Interim Report - Report No 362, November 2011

Case No 2815 (Philippines) - Complaint date: 25-AUG-10 - Closed

Allegations: The complainant organization alleges anti-union dismissals and anti-union discrimination at the Cirtek Electronics Corporation and at Temic Automotive Philippines

1. 1335. The complaint is contained in two communications from the Trade Federation for Metals, Electronics, Electrical and other Allied Industries – Federation of Free Workers (TF4FFW) dated 25 August 2010.
2. 1336. The Government forwarded partial observations to the allegations in a communication dated 15 November 2010. The Committee has been obliged to postpone its examination of the case on two occasions [see 358th and 359th Reports, paras 6 and 7, respectively]. At its meeting in May–June 2011 [see 360th Report, para. 5], the Committee issued an urgent appeal to the Government, indicating that, in accordance with the procedural rules set out in paragraph 17 of its 127th Report, approved by the Governing Body, it could present a report on the substance of the case at its next meeting even if the information or observations requested had not been received in due time. The Government submitted a partial response to the allegations in communications dated 1 June and 16 and 29 September 2011. To date, the Government’s complete observations have still not been received.
3. 1337. The Philippines has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants’ allegations

1. 1338. In its communications dated 25 August 2010, the complainant organization alleges, for the Cirtek Employees Labour Union – FFW and for the Temic Automotive Phils. Inc. Employees Union - FFW, anti-union dismissals and anti-union discrimination at the companies Cirtek Electronics Corporation and at Temic Automotive Philippines.
   • Cirtek Electronics Corporation
2. 1339. The complainant organization alleges the dismissal by Cirtek Electronics Corporation of three sets of union officers of Cirtek Employees Labour Union – FFW (the union). Following a request, in 2009, to the Department of Labour and Employment (DOLE) and the then President of the Philippines, Ms Arroyo, to redress the situation, the union received a copy of a letter from the Office of the President of the Philippines urging the Secretary of the Department of Labour and Employment (SOLE) to take appropriate action on the mass dismissals of union leaders. To date however, no action has been taken by the DOLE on the issue at hand.
3. 1340. The complainant specifies that Cirtek Electronics Corporation is a company engaged in independent subcontracting for semiconductor assembly, testing and packaging services and located in the Special Export Processing Zone in Laguna Technopark, Biñan, Laguna, Philippines.
4. 1341. According to the complainant, the first dismissal occurred in 2003, when a collective bargaining agreement (CBA) negotiation took place between the company and Cirtek Employees Labour Union – FFW to re-negotiate the last two years of the current CBA (specifically 2004 and 2005). No agreement was reached and hence a bargaining deadlock ensued. A notice of strike was subsequently filed by the union against the company before the National Conciliation and Mediation Board – Calamba, Laguna (NCMB). Despite due notices, the company did not attend the several scheduled conciliations at the NCMB. At the same time, the management accused the union, specifically its officers, of slowing down and persuading the members to boycott overtime work. The union officers were required to explain their side and thereafter, the management decided to terminate Nonita Maliksi, the President of the union, and five other officers, namely: Lolita Salonga, Rosita Demetrio, Rosenda Dolor, Imelda de Silva and Elizabeth Verona. Only Mildred Acuin, Vice-President of the union, and two other board members were not terminated. Following the dismissals, the union officers filed a notice of strike on 26 April 2004 as advised by the FFW. However, after a series of conciliations at the NCMB, Ms Maliksi, the President of the union, decided to convert the strike notice into voluntary arbitration and pursue the illegal dismissal and unfair labour practice complaint against the company through voluntary arbitration. Finally, it was ruled that the dismissals were justified.
5. 1342. The complainant further reports that the second dismissal occurred in June 2005, when the union went on strike due to a bargaining deadlock. After several days of strike, the DOLE assumed the deadlocked issues on 23 June and directed the workers to return to work and the management to accept the strikers. Ms Maliksi who had joined the strike insisted to be admitted back together with the other strikers but the company refused considering that the issue was dealt with by voluntary arbitration. After the resumption of the operation of the company, the union officers and the workers identified as active participants in the strike were approached one by one by the management and threatened with dismissal if they did not cooperate. They were also forced to conclude a Memorandum of Agreement (MOA) while the deadlocked issues were being reviewed by the SOLE. According to Mildred Acuin, the Vice-President of the union, and other officers, they agreed to sign the MOA because the management pledged to abide by the decision of the SOLE should the latter decide on higher benefits, in particular a higher wage increase. On 16 March 2006, the SOLE issued a decision resolving the deadlock by improving the wage increase as agreed in the memorandum of agreement and incorporating in the CBA the agreed items in the MOA. The management questioned the CBA awards of the SOLE before the Court of Appeals, which favourably granted the petition and reversed the decision of the SOLE due to alleged settlement agreement of some members. Hence, the union brought the matter before the Supreme Court, which, to date, has not yet handed down its decision. While the SOLE awards were favourable to the union, the newly elected officers appeared to be ambivalent as to this development for reasons incomprehensible to the general membership, which therefore decided to conduct a new election and elect a new set of officers who would represent them in the enforcement of the decision. Thus, in 2008, the members gathering themselves in the FFW headquarters elected Richie Lacsarum as President, Cleverose Literal and Mildred Fernandez as Vice-Presidents, and another set of officers. After the election, the FFW informed the company of the names of the new officers of Cirtek Electronics Employees Union – FFW. The management immediately dismissed the union officers from their employment. A notice of strike was filed before the NCMB by Mr Lacsarum on the grounds of unfair labour practice. Several meetings were scheduled by the NCMB but the company never bothered to attend and, instead, directly negotiated with the dismissed officers by offering them separation packages. The offer was finally accepted by the workers who were under pressure for having been out of work and without money. However, this decision was not taken in consultation with FFW.
6. 1343. Lastly, the complainant indicates that the third dismissal occurred when the FFW appointed another set of ad hoc officers to replace the dismissed union officials. FFW again wrote to the company to convey their names namely: Vhir Grande, Rosalinda Guisihan, Aninia Santos, Clemencia Amparo, Russell Kadil, Amelia Ablema, Vilma Sepian, Erwin Bella, Florencia Matula, Alicia Espíritu, Olga Dermogenio and Adorable Unido. Upon receipt of the letter, the company unilaterally dismissed the new set of officers. The union filed another notice of strike for the mass termination of its officers on the ground of unfair labour practice. The company never appeared before the NCMB.
7. 1344. To date, the company has not recognized the local union of FFW. It has stopped deducting union dues in violation of the CBA. The union was replaced with the labour management council, the composition of which is questionable, since the worker representatives have been neither elected nor voted upon by the workers themselves. The complainant believes that freedom of association of the workers in Cirtek Electronics Corporation has been clearly trampled upon by the said company. Moreover, the DOLE had not taken action despite having been reminded by the Office of the President of the Philippines to do so. At present, there were several illegal dismissal and unfair labour practice cases pending before the arbitration branch and the National Labour Relations Commission (NLRC) on the matter. Workers in the company are currently deprived of their right to organize, and any initiatives to revive the union are squelched right away by threats of dismissal from employment. The complainant states that, despite having signed a quit and release claim, the dismissed workers prayed that they be reinstated to their former jobs for being illegally dismissed from their respective employment, and that they be allowed to freely exercise the right to organize and to collectively bargain.
   • Temic Automotive Philippines Inc.
8. 1345. The complainant denounces anti-union practices by Temic Automotive Philippines Inc. against the Temic Automotive Philippines Inc. Employees Union (“the union”). According to the complainant, Temic Automotive Philippines Inc. terminated all regular rank-and-file employees in its Warehouse and Facilities Departments under the guise of a “Voluntary Retirement Package” (VRP) which was compulsory in its real intent and purpose. There were 28 employees in the said departments who were affected by the outsourcing including four shop stewards. The two departments were part of the bargaining unit as stipulated under the CBA entered into by the company and the union. The dismissals of the 28 rank-and-file employees are considered by the complainant as an unfair labour practice because they were intended to weaken the bargaining edge of the union.
9. 1346. The complainant specifies that Temic Automotive Philippines Inc. is a duly organized company engaged in the business of manufacturing automotive electronics, especially electronic brake systems and comfort body electronics for automotive development, with the principal office located in the FTI Special Economic Zone, FTI Estate, Taguig City, Metro Manila, Philippines. By way of background, a strike was conducted, on 14 September 1995, by the union in the company, then the Telefunken Semiconductors, where the employees of the Warehouse and Facilities Departments played a vital role. In 1998, a spin-off was initiated by Telefunken Semiconductors thereby dividing the latter into four companies, the RF Microtune Technologies, TSPIC Atmel, VISHAY, and the Temic Automotive Philippines Inc. The employees that were assigned to each part of the company were accordingly absorbed as part of its workforce. In 1999, the employees in the four spin-off companies formed their respective unions because they felt that there was no point in questioning the validity of the spin-off. The unions were recognized by the management and thus no certification election was conducted.
10. 1347. The complainant indicates that, in February 2000, during discussions between the union and the management of Temic Automotive Philippines Inc., the company sought the consent of the union to exclude the Warehouse Department from the coverage of the bargaining unit. However, the union refused on the grounds that the Warehouse Department: (i) was composed of many regular positions occupied by rank-and-file employees; (ii) had always been an integral part of the bargaining unit even prior to the spin-off; (iii) performed functions that were necessary and desirable to the company; and (iv) being the heart of the operation of the company, had played a strategic role during the strike in 1995 in the sense that the joining of the union members from the Warehouse Department had entailed the slowing down if not stoppage of the company’s operation. In 2004, during the collective negotiation for the period 2005–09, the exclusion of the Warehouse Department from the scope of the CBA was again raised by the company. The offer was again turned down by the union. Thus, under the CBA 2005–09 entered into by the union and the company, the said Departments are not excluded from the bargaining unit of the rank-and-file employees of the company and are thus covered by the agreement.
11. 1348. The complainant states that, thereafter, a significant increase in the hired independent service provider workers became noticeable, in particular in regular positions such as clerks, material handlers, system encoders, and general clerks. The workers hired by the service providers had practically intruded into the functions of the regular employees in the two departments, working in the same area as the regular employees and using the same equipment, tools, and computers that were owned by the company instead of being provided by the service providers. This was contrary to section 106 of the Labour Code, according to which in cases where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment machineries, work premises, among others, and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
12. 1349. Hence, on 25 October 2006, the union formally filed a grievance before the company questioning the encroachment of the service provider workers into the functions and positions reserved only for regular employees and asserting that the company violated section 1(1)–(3) of the 2005–2009 CBA. As no settlement was reached at the plant level, the union and the company elevated the matter before voluntary arbitration (Case AC-420-NCMB-NCR-62-01-11-06 handled by Voluntary Arbitrator Padilla). On 1 May 2007, the Voluntary Arbitrator rendered a decision according to which the functions of service provider workers were functions being performed by the regular rank-and-file employees covered by the bargaining unit and thus not valid, and all employees including those supplied by service providers presently designated and functioning as clerks, material handlers, system or data encoders were entitled to the rights and privileges of regular employees of the company. The decision was appealed by the company via a petition for certiorari before the Court of Appeals (CA-G.R. SP No. 99029), which denied the petition for lack of merit and affirmed the decision of the voluntary arbitrator.
13. 1350. The company raised the case before the Supreme Court (G.R. No. 186965). On 23 December 2009, the Supreme Court rendered a decision nullifying the above decisions on the grounds of lack of evidence showing that: the forwarding arrangement (of the company) violates section 106 of the Labour Code; the company’s basic objective was not that of achieving” greater economy and efficiency of operations”; there was bad faith; the forwarding arrangement in place since 1998 has led to regular employees being dismissed or displaced by the forwarders’ employees; the outsourcing has resulted in a reduction of work hours or the splitting of the bargaining unit; the forwarding activities violate the parties’ CBA, specifically that it interfered with, restrained or coerced employees in the exercise of their rights to self-organization, the only exception being of course the non-recognition of service provider workers as regular company employees and its effect on the CBA scope of coverage.
14. 1351. The complainant further indicates that, in August 2008, while the above case was still pending before the Court of Appeals, the company, without consulting the union, talked to the regular rank- and-file employees assigned at the Warehouse and Facilities Departments to offer them a VRP in relation to its supposed plan to outsource the two departments. As soon as the union learnt of the scheme, it sought a meeting with the company on 9 September 2008 and 15 October 2008, during which the management admitted that there was a not yet final plan to outsource the aforesaid departments. The union believes that the company stalled the discussion during the grievance meeting, since at that time the company was still engaged in getting the confirmation of all the 28 regular rank-and-file employees, 19 of which were from the Warehouse and nine from the Facilities Department, relative to its VRP package. It was only on 21 October 2008 that the union received a letter confirming the outsourcing effective 1 January 2009. The union filed a grievance with the management on the same day, on the ground that this decision contravened the collective bargaining agreement, particularly as to the coverage of the bargaining unit.
15. 1352. The complainant reports that, without regard to the ongoing grievance, the company hired as early as 19 November 2008 at least 72 service provider workers for the Warehouse Department and 14 service provider workers for the Facilities Department to replace the regular rank-and-file employees. The above number of 86 service provider workers is far higher than the previous number of personnel which was composed of 19 regular employees and 26 service provider workers or a total of 45 employees. According to the complainant, from the number of workers alone, it cannot be said that the company was in dire need to save cost due to business exigencies as they spent more for 86 less experienced personnel. Cost comparison as to expenses would also show that the company spent per month around 1.1 million pesos for the 86 service provider workers as compared to approximately 1.07 million pesos for its regular rank-and-file employees.
16. 1353. Since no settlement was reached at the plant level, the grievance was raised to voluntary arbitration (Case NCR-12-03-07 handled by Voluntary Arbitrator Alensuela). While the case was still ongoing, the company enforced the VRP by separating the regular rank-and-file employees except for Mr Endrico Dumolong, a shop steward of the Warehouse Department who refused to avail himself of the VRP and was still dismissed on 14 January 2009, on the ground that his position had been deemed redundant because it had been outsourced already.
17. 1354. In light of the above, a Motion for Reconsideration was filed on 3 February 2010 concerning the aforementioned decision of the Supreme Court of 23 December 2009, in order to inform the Supreme Court of the supervening event and evidence of the illegality of the outsourcing arrangement, namely that the outsourcing of all the positions in the Warehouse and Facilities Departments had led to all the regular employees being displaced as they were forced to accept the purported “voluntary” retirement package, and one employee, Mr Endrico Dumolong, being dismissed as he did not avail himself of that program. However, the Supreme Court denied the motion with finality stating that no substantial argument had been adduced to warrant the reconsideration.
18. 1355. Prior to engaging the services of the independent service provider employees, the latter were required to sign employment contracts, which stipulate the following: “During the period of your employment you could be dismissed by the company any time if it was proven that you violated the following clauses: …; if you join any labour union which is strictly prohibited by the client.” In the complainant’s view, the above stipulation is a classic proof of the company’s ill intent: there was only one client the service providers referred to in the contract that prohibited its employees from joining the union, and it was none other than the company.
19. 1356. The complainant recalls the various events and, in its opinion, manifestations of bad faith of the company against the union. In the CBA negotiations following the industrial action in 1995, the management had sought in vain the exclusion from the bargaining unit of the Warehouse and Facilities Departments, the regular employees of which had played an important role during the strike. According to the complainant, the financial crisis in 2008 was the excuse the company had been waiting for to finally get rid of them by outsourcing all the regular functions in the two departments in clear violation of the existing CBA and replacing them with service provider workers. The complainant strongly believes that the outsourcing of the two departments was in reality designed to eliminate a strong portion of the membership of the union with the ill intent to weaken its stance and bargaining power. In the complainant’s view, this is strengthened by the evidence of the contractual prohibition to join the union that the workers, hired through independent service providers to replace the regular employees, were required to sign as a condition for employment. It is also confirmed by the lack of genuine voluntariness in the VRP offer of the company since the regular employees had no choice but to sign it or be dismissed as Mr Dumolong, one of the shop stewards, on the grounds of redundancy.
20. 1357. In this context, the complainant indicates that Mr Endrico Dumolong (union shop steward) filed a case of illegal dismissal (Case NLRC No. NCR-03-03885-09 handled by Labour Arbiter Demaisip). The management argued that: “… the Company’s decision to contract out services and dismiss the affected employees is separate and independent from the implementation of the VRP. Separation of the affected employees was not optional, but was an inevitable consequence of the contracting out of their services. Thus, an affected employee’s non-availment of the VRP will not prevent his separation from Temic. Stated differently, the affected employee will still be dismissed on account of redundancy, regardless if he or she opts to avail of the VRP. Availment of the VRP only affects the benefits the affected employee receives upon separation.” With the assistance of the union and the FFW Legal Center, Endrico Dumolong won before the Labour Arbiter.
21. 1358. The complainant adds, however, that the company appealed the case before the first Division of the NLRC, and the decision was reversed on the ground of "redundancy" with the following reckless reasoning: “In contracting the services of reputable service providers as part of the company’s cost saving program, the services of the employees of the Warehouse and Facilities Departments, including that of complainant, became redundant and superfluous and, therefore, properly terminable. … And in the absence of any proof that the management abused its discretion or acted in a malicious or arbitrary manner, this Commission will not interfere with the exercise of such prerogative”. In the complainant’s view, this decision poses a serious threat to the right of workers to employment security enshrined in the Labour Code and the Constitution (Article XIII(3)), and is also dangerous for those members of unions whom the management would want to get rid of as in this case. The complainant believes that this scheme, contrary to the findings of the NLRC, is clearly illegal, since it validated the compulsory nature of the supposed “voluntary” retirement package of the company and belittled the principle of employment security. A simple offer of some sort of package and the employees lost their employment. If an employee refused to accept the VRP, he/she would still be dismissed on the ground of “Redundancy”. The employee is left with no choice but to accept the offer, hence there was no genuine voluntariness. The complainant indicates that a Motion for Reconsideration is pending before the first Division of the NLRC but that, while hoping that the NLRC would reconsider its harmful decision, the union was not confident given the one-sided decision of the NLRC and the loss of their case containing similar issues before the Supreme Court despite presentation of new evidence.
22. 1359. As regards the case before Voluntary Arbitrator Alensuela, a decision was rendered on 7 August 2009 declaring that the company validly contracted out the functions of the Warehouse and Facilities Departments and did not violate the CBA provisions nor commit unfair labour practice. According to the complainant, no account was taken of the fact that all regular employees in the said departments were displaced and that another one who did not avail himself of the VRP was dismissed in violation section 106 of the Labour Code and section 6(a) of Department Order No. 18, series of 2002, which prohibits the contracting out of a job, work or service when not done in good faith, not justified by the circumstances and resulting in the termination of regular employees. The VRP clearly resulted in the dismissal of the employee who refused to accept the package. Also, in the complainant’s view, the pretext of economic necessity and exigencies could not deny the fact that there was malice in the enforcement of the VRP, the offer being in reality of a compulsory and not voluntary nature, as refusal to accept the offer would still lead to dismissal. The complainant further denounces that there was malice in the enforcement of the outsourcing since the independent service provider workers who were hired to replace the regular employees in the two departments were required to sign a contract stipulating that they would be dismissed from employment if they joined the union.
23. 1360. Finally, the complainant states that, since the union felt ambivalent that the Supreme Court could render a balanced perspective given the fact that it had dismissed the prior case brought before it and had denied the subsequent Motion for Reconsideration despite the supervening events and new evidence, it had considered that it had no other recourse but to submit this case before the Committee on Freedom of Association. The union prayed that those who were forcibly compelled to accept the VRP be declared to have been illegally dismissed for they were left with no other choice but to accept the offer, that the dismissal of Endrico Dumolong be considered illegal and that he and all those who accepted the VRP be granted relief and be allowed to return to their former jobs.

B. The Government’s reply

1. 1361. As regards Cirtek Electronics Corporation, the Government states, in its communication dated 15 November 2010, that this case will be processed pursuant to the Tripartite Industrial Peace Council (TIPC)-Monitoring Body Operational Guidelines and will be discussed at an upcoming meeting of the TIPC. In its communication dated 1 June 2011, the Government indicates that the complainant and the management of Cirtek were requested to provide information or comments, and that the submissions received required further validation. Hence, the TIPC-Monitoring Body recommended for Cirtek, in its Resolution No. 4 (Series of 2011), the creation of an impartial Tripartite Team from among the members of the TIPC-Monitoring Body, with a clear mandate and timeline. In its communication dated 16 September 2011, the Government refers to Administrative Order No. 225, Series of 2011, issued by the Secretary of Labor and Employment, which created the Tripartite Team for Cirtek Electronics Corporation (TTCEC). Accordingly, the mandate of the TTCEC is: (i) to immediately conduct plant level validation/verification of the issues between the local union and the management with a view to arriving at a sound and practicable recommendation or proposed action to the TIPC-Monitoring Body by end of June 2011; (ii) to work out a mutually acceptable action plan to progressively and substantially move the issues to a settlement before November 2011; and (iii) to conciliate-mediate a solution for the immediate resolution of the pending ILO Case No. 2815.
2. 1362. The Government reports that the TTCEC has conducted five meetings. At the first meeting on 15 June 2011, it was agreed that the FFW will conduct an election of a new set of officers of the union (the management did not agree nor disagree), with the DOLE supervising the election if the union so requests. The election took place peacefully on 5 July 2011 with DOLE and FFW staff acting as observers; out of the 470 rank-and-file employees of the company, 297 casted their vote. The Government states that, according to the TTCEC, another union, the Cirtek Electronics Corporation-Independent Labor Union (CEC–ILU), was registered on 4 July 2011. FFW maintained that, in the absence of a challenge to its representative status, the union remained the exclusive bargaining agent at the company, and the meeting addressed the issue of conducting a certification election to determine the choice of the workers.
3. 1363. The Government further indicates that, during the third meeting on 12 July 2011, the CEC–ILU raised the issue on the disaffiliation it filed before the Bureau of Labor Relations (BLR), accompanied by 430 signatures, and questioned the basis for conducting a certification election maintaining that the union was no longer existing at the company as a result of the disaffiliation of the workers. On 3 August 2011, the BLR, recalling that the disaffiliation from the mother federation, as a right of the local union, is only verified against the federation’s by-laws and the support by an overwhelming majority of workers, considered that, absent an overwhelming majority support and in view of the continued existence of the local union, the claimed disaffiliation operates as a mere withdrawal of membership, the local union’s representative status shall continue to be respected and the new union cannot claim to be the exclusive bargaining agent without going through the process of certification election. At the fourth meeting on 5 August 2011, while the union was amenable to the conduct of an election, the CEC–ILU requested ample time to further enquire on the disaffiliation issue. At the fifth meeting on 9 August, the management recommended that the two unions should explore an agreement and inform the TTCEC of the result.
4. 1364. According to the Government, as of 6 September 2011, no dialogue has occurred. Following two more meetings to be held in September 2011, the TTCEC will submit its findings and recommendations to the TIPC-Monitoring Body.
5. 1365. As regards Temic Automotive Philippines, the Government supplies information concerning the outcome of judicial and arbitration proceedings relating to the complaint and encloses the relevant decision of the voluntary arbitrator and the decision of the Supreme Court dated 23 December 2009.

C. The Committee’s conclusions

1. 1366. The Committee deeply regrets that, despite the time that has elapsed since the presentation of the complaint, it has not received the Government’s complete observations, particularly as regards the allegations of freedom of association violations of Temic Automotive Philippines, although it has been invited on several occasions, including by means of an urgent appeal, to present its comments and observations on the case.
2. 1367. Under these circumstances and in accordance with the applicable rules of procedure [see 127th Report, para. 17, approved by the Governing Body], the Committee finds itself obliged to present a report on the substance of the case without the benefit of the information which it had expected to receive from the Government in respect of all the pending matters.
3. 1368. The Committee recalls that the purpose of the whole procedure established by the International Labour Organization for the examination of allegations of violations of freedom of association is to promote respect for this freedom in law and in fact. The Committee remains confident that, if the procedure protects governments from unreasonable accusations, governments on their side will recognize the importance of formulating, for objective examination, detailed replies concerning allegations made against them.
   • Cirtek Electronics Corporation
4. 1369. The Committee notes from the allegations that Cirtek Electronics Corporation has dismissed three sets of union officers of the Cirtek Employees Labour Union – FFW. In particular, the Committee notes that, according to the complainant: (i) in 2003, during a bargaining deadlock with strike notice, the company did not attend the scheduled conciliations at the NCMB but rather accused the union of slowing down and persuading its members to boycott overtime work; after the union officers were required to explain their side, the management decided to terminate Nonita Maliksi, the President of the union, and union officers Lolita Salonga, Rosita Demetrio, Rosenda Dolor, Imelda de Silva and Elizabeth Verona; the union officers pursued the illegal dismissal and unfair labour practice complaint against the company through voluntary arbitration, and the arbitrator ruled that the dismissals were justified; (ii) in June 2005, after several days of strike due to a bargaining deadlock, the DOLE assumed the deadlocked issues and directed the workers to return to work; after resumption of operation, the union officers and workers identified as active participants in the strike were threatened by the management with dismissal if they did not cooperate and were forced to conclude a Memorandum of Agreement (MOA) pending review of the deadlocked issues by the SOLE; according to Mildred Acuin, the Vice-President of the union, and other officers, they agreed to sign the MOA because the management pledged to abide by the decision of the SOLE should the latter be more favourable. On 16 March 2006, the SOLE resolved the deadlock by improving the wage increase agreed in the MOA and incorporating in the CBA the agreed clauses of the MOA. The management questioned the SOLE decision before the Court of Appeals, which reversed it due to alleged settlement agreement of some members. Hence, the union brought the matter before the Supreme Court, which, to date, has not yet handed down its decision. Since the union officers appeared to be ambivalent as to the favourable SOLE awards for reasons incomprehensible to the general membership, a new set of officers was elected in 2008, including Richie Lacsarum as President, Cleverose Literal and Mildred Fernandez as Vice-Presidents. Immediately after being informed of the names of the new union officers, the company dismissed them from their employment. Following the strike notice filed before the NCMB on the grounds of unfair labour practice, the company never attended the meetings and, instead, directly negotiated with the dismissed officers offering them separation packages. The offer was finally accepted by the workers who were under financial pressure; and (iii) the third collective dismissal occurred when, in order to replace the dismissed union officials, the FFW appointed another set of ad hoc officers namely: Vhir Grande, Rosalinda Guisihan, Aninia Santos, Clemencia Amparo, Russell Kadil, Amelia Ablema, Vilma Sepian, Erwin Bella, Florencia Matula, Alicia Espíritu, Olga Dermogenio and Adorable Unido. Upon receipt of the letter conveying their names, the company unilaterally dismissed the new set of officers. The union filed another notice of strike for the mass termination of its officers on the grounds of unfair labour practice but the company never appeared before the NCMB. In the complainant’s view, freedom of association has been clearly trampled upon by the company. Finally, the Committee notes from the complainant’s indications that at present, there were several illegal dismissal and unfair labour practice cases pending on the matter before the arbitration branch and the NLRC, and that, to date, the company has not recognized the union and has stopped deducting union dues in violation of the CBA. The union was replaced with the labour management council, composed of worker representatives that have not been elected by the workers. Any initiatives to revive the union were allegedly squelched right away by threats of dismissal from employment.
5. 1370. As regards the alleged first set of dismissals of trade union officials following strike notice in 2003 (Nonita Maliksi – President of the union, Lolita Salonga, Rosita Demetrio, Rosenda Dolor, Imelda de Silva and Elizabeth Verona), it is recalled that, when trade unionists or union leaders are dismissed for having exercised the right to strike, the Committee can only conclude that they have been punished for their trade union activities and have been discriminated against. Respect for the principles of freedom of association requires that workers should not be dismissed or refused re-employment on account of their having participated in a strike or other industrial action. It is irrelevant for these purposes whether the dismissal occurs during or after the strike. Logically, it should also be irrelevant that the dismissal takes place in advance of a strike, if the purpose of the dismissal is to impede or to penalize the exercise of the right to strike. Regarding various types of strike action denied to workers (wild-cat strikes, tools-down, go-slow, working to rule and sit-down strikes), the Committee considers that these restrictions may be justified only if the strike ceases to be peaceful [see Digest of decisions and principles of the Freedom of Association Committee, fifth edition, 2006, paras 545, 662 and 663].
6. 1371. Further, as regards the alleged second and third sets of dismissals in 2008 of trade union officials immediately after their election (Richie Lacsarum – President, Cleverose Literal – Vice-President, Mildred Fernandez – Vice-President and another set of officers) or, respectively, after their ad hoc appointment (Vhir Grande, Rosalinda Guisihan, Aninia Santos, Clemencia Amparo, Russell Kadil, Amelia Ablema, Vilma Sepian, Erwin Bella, Florencia Matula, Alicia Espíritu, Olga Dermogenio and Adorable Unido), the Committee emphasizes once again that one of the fundamental principles of freedom of association is that workers should enjoy adequate protection against all acts of anti-union discrimination in respect of their employment, such as dismissal, demotion, transfer or other prejudicial measures. This protection is particularly desirable in the case of trade union officials because, in order to be able to perform their trade union duties in full independence, they should have a guarantee that they will not be prejudiced on account of the mandate which they hold from their trade unions. The Committee has considered that the guarantee of such protection in the case of trade union officials is also necessary in order to ensure that effect is given to the fundamental principle that workers’ organizations shall have the right to elect their representatives in full freedom. The Committee has pointed out that one way of ensuring the protection of trade union officials is to provide that these officials may not be dismissed, either during their period of office or for a certain time thereafter except, of course, for serious misconduct [see Digest, op. cit., paras 799 and 804].
7. 1372. In view of the large number of dismissed union leaders (21 named and several unnamed), and given that, as of 2003, the company almost systematically terminated trade union officials that were preparing a strike or were taking up office, the Committee notes with interest from the Government’s reply the creation of an impartial Tripartite Team from among the members of the TIPC-Monitoring Body with the mandate to conduct a plant-level verification of the parties’ claims, make recommendations to the TIPC-Monitoring Body by the end of June 2011, work out an action plan to move the issues towards settlement by the end of November 2011 and conciliate-mediate a solution for the immediate resolution of the present Case. The Committee notes the tight timeline of the works of the TTCEC and the detailed information provided by the Government in this regard, referring in particular to the creation of a new union and the ensuing competition concerning certification for bargaining purposes handled by the BLR. The Committee expects that the TTCEC will review the initial allegations of the complainant relating to the dismissals of three sets of union officials and requests the Government to provide detailed information with regard to the results of the conducted inquiry. Should it be found in the course of that inquiry that the abovementioned trade union officials were dismissed due to their exercise of legitimate trade union activities, the Committee requests the Government to take the necessary steps to ensure that they are fully reinstated without loss of pay. The Committee requests to be kept informed of any developments in this respect.
8. 1373. The Committee further requests the Government to ensure that the above inquiry also deals with the allegations that the company has stopped deducting union dues, refuses to recognize the union and has replaced it by a council composed of non-elected worker representatives, and to keep it informed in this regard.
9. 1374. Finally, the Committee urges the Government to keep it informed of the final outcome of any relevant judicial or other proceedings, including those pending before the Supreme Court, the NLRC and the arbitration branch, and of all measures of redress taken. It also requests the complainant organization or the Government to supply a copy of the arbitration decision rendered with regard to the first collective dismissal of union officers.
   • Temic Automotive Philippines
10. 1375. The Committee notes the complainant’s allegations that Temic Automotive Philippines Inc. has engaged in anti-union practices against the Temic Automotive Philippines Inc. Employees Union.
11. 1376. In particular, the Committee notes that, according to the complainant, as of 2004, a significant increase in hired independent service provider workers became noticeable, in particular in regular positions in the Warehouse and Facilities Departments. On 25 October 2006, the union filed a grievance asserting that the company violated the CBA and section 106 of the Labour Code. In the absence of a settlement at the plant level, the union and the company elevated the matter before voluntary arbitration. On 1 May 2007, the Voluntary Arbitrator rendered a decision according to which workers supplied by service providers enjoyed the same rights as regular employees of the company. The decision was appealed by the company but affirmed by the Court of Appeals. The company raised the case before the Supreme Court, which, on 23 December 2009, rendered a decision nullifying the above decisions on the grounds of lack of evidence that there was a violation of the CBA or section 106 of the Labour Code or that the forwarding arrangement had led to regular employees being dismissed.
12. 1377. The Committee further notes from the complainant’s allegations that, in August 2008, the company, without consulting the union, talked to the 28 regular employees assigned at the Warehouse Department (19) and Facilities Department (9) to offer them a VRP in relation to its plan to outsource the two departments. On 21 October 2008 the union filed a grievance on the ground that the outsourcing decision effective 1 January 2009 contravened the CBA because the two departments were part of the bargaining unit. Since no settlement was reached at the plant level, the grievance was raised to voluntary arbitration. The company hired as early as 19 November 2008 at least 72 service provider workers for the Warehouse Department and 14 service provider workers for the Facilities Department to replace the rank-and-file employees. While the case was still ongoing, the company enforced the VRP by terminating all 28 regular employees (including four shop stewards) except for Mr Endrico Dumolong, a shop steward who refused to avail himself of the VRP and was dismissed on 14 January 2009, on the ground that his position was deemed redundant because it had been outsourced already. The Voluntary Arbitrator rendered a decision on 7 August 2009 declaring that the company validly contracted out the functions of the Warehouse and Facilities Departments and did not violate the CBA. A Motion for Reconsideration was filed on 3 February 2010 concerning the aforementioned decision of the Supreme Court of 23 December 2009, in order to inform the Supreme Court of the supervening event and evidence of the illegality of the outsourcing arrangement, namely that the outsourcing of the positions in the two departments had led to all the regular employees being displaced as they were forced to accept the purported “voluntary” retirement package, and one employee being dismissed as he did not avail himself of that program. However, the Supreme Court denied the motion with finality stating that no substantial argument had been adduced to warrant the reconsideration.
13. 1378. In this context, the Committee notes from the allegations that Mr Endrico Dumolong filed a case of illegal dismissal. The management argued that the decision to contract out services and dismiss the affected employees was separate and independent from the acceptance or refusal of the VRP. With the assistance of the union and the FFW Legal Center, Mr Dumolong won before the Labour Arbiter. The company appealed the case before the first Division of the NLRC, and the decision was reversed on the ground of “redundancy” stating that in the absence of proof that the management abused its discretion or acted in a malicious or arbitrary manner, the NLRC will not interfere in the exercise of this company prerogative. The complainant indicates that a Motion for Reconsideration is pending before the first Division of the NLRC but that the union is not confident given the one-sided decision of the NLRC and the loss of their case containing similar issues before the Supreme Court despite new evidence.
14. 1379. The Committee also notes that the complainant strongly believes that the outsourcing of the two departments was in reality designed to eliminate a strong portion of the membership of the union with the ill intent to weaken its stance and bargaining power and provides details in this regard in its allegations.
15. 1380. Given the alleged lack of consultations with the union prior to implementing the outsourcing plan and the VRP, the Committee emphasizes that it has always requested that, in the cases where new staff reduction programmes are undertaken, negotiations take place between the enterprise concerned and the trade union organizations, and that, when voluntary retirement programmes are carried out, the trade union organizations in the sector should be consulted [see Digest, op. cit., paras 1082–1083].
16. 1381. The Committee deeply regrets that the Government has confined itself to describing the outcome of certain judicial and arbitration proceedings relating to the complaint but has provided no information in relation to the allegations concerning Temic Automotive Philippines, nor has it indicated whether this matter has been brought before the TIPC or whether the relevant employers’ organization has been consulted so as to bring to the Committee’s attention the views of the enterprise concerned and thus enable it to examine this matter in full knowledge of the facts. The Committee wishes to generally recall that the dismissal of workers on grounds of membership of an organization or trade union activities violates the principles of freedom of association, and that subcontracting accompanied by dismissals of union leaders can constitute a violation of the principle that no one should be prejudiced in his or her employment on the grounds of union membership or activities [see Digest, op. cit., paras 789–790].
17. 1382. In this context, the Committee expresses great concern at the alleged hidden reason for outsourcing the two departments normally belonging to the bargaining unit, and the further allegation that the hired service provider workers who replaced the regular employees are prohibited by threat of dismissal to join any union and are excluded from the scope of the CBA. The Committee therefore emphasizes that acts of anti-trade union discrimination should not be authorized under the pretext of dismissals based on economic necessity, and that a corporate restructuring should not directly or indirectly threaten unionized workers and their organizations [see Digest, op. cit., paras 795 and 797].
18. 1383. Recalling that the basic regulations that exist in the national legislation prohibiting acts of anti-union discrimination are inadequate when they are not accompanied by procedures to ensure that effective protection against such acts is guaranteed [see Digest, op. cit., para. 818], the Committee expects that this principle will be taken into account in practice, in a manner so as to ensure that, in the remaining legal proceedings, the relevant bodies will effectively consider in their review the allegations put forward by the complainant that the outsourcing plan was actually aimed at eliminating any form of union in the departments concerned (e.g. previous attempts of the company to exclude those departments from the bargaining unit, doubts as to the invoked reason of cost-saving for outsourcing the two departments, the compulsory nature of the purportedly voluntary compensation, the contractual prohibition of the service provider workers to join any union and their exclusion from the scope of the CBA).
19. 1384. Moreover, noting that, as regards the allegations concerning the first enterprise considered, the TIPC-Monitoring Body recommended the creation of an impartial Tripartite Team from among its members with the mandate to conduct a plant-level verification of the parties’ claims, the Committee invites the Government to follow a similar approach in the context of this enterprise and to provide detailed information with regard to the conduct and outcome of such an inquiry. Should it be found in the course of the inquiry that the 28 terminations were anti-union in nature and aimed at eliminating any union representation for the departments concerned, the Committee requests the Government to take the necessary steps to ensure that the union members and officials concerned are fully reinstated without loss of pay and to keep it informed of any developments in this respect.

The Committee's recommendations

1. 1385. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) With respect to Cirtek Electronics Corporation, the Committee:
   • (i) noting with interest from the Government’s reply the creation of an impartial Tripartite Team (TTCEC) from among the members of the TIPC-Monitoring Body with the mandate to conduct a plant-level verification of the parties’ claims and propose recommendations with a view to achieving a settlement by the end of November 2011, and further noting the detailed information concerning the works of the TTCEC, expects that the TTCEC will review the initial allegations of the complainant relating to the dismissals of three sets of trade union officials and requests the Government to provide detailed information with regard to the results of the conducted inquiry;
   • (ii) requests that, should it be found in the course of the inquiry that the abovementioned trade union officials were dismissed due to their exercise of legitimate trade union activities, the Government take the necessary steps to ensure that they are fully reinstated without loss of pay and keep it informed of any developments in this respect;
   • (iii) requests the Government to ensure that the above inquiry also deals with the allegations that the company has stopped deducting union dues, refuses to recognize the union and has replaced it by a council composed of non-elected worker representatives, and to keep it informed in this regard;
   • (iv) urges the Government to keep it informed of the final outcome of any relevant judicial or other proceedings, including those pending before the Supreme Court, the NLRC and the arbitration branch, and of all measures of redress taken; and
   • (v) invites the complainant organization or the Government to supply a copy of the arbitration decision rendered with regard to the first collective dismissal of union officers.
   • (b) With respect to Temic Automotive Philippines, the Committee:
   • (i) deeply regretting that the Government has provided no information in relation to these allegations nor indicated whether this matter has been brought before the TIPC or whether the relevant employers’ organization has been consulted, expresses great concern at the alleged hidden reason for outsourcing the two departments normally belonging to the bargaining unit;
   • (ii) expects that the principles enounced in its conclusions will be taken into account in practice, in a manner so as to ensure that, in the remaining legal proceedings, the relevant bodies will effectively consider in their review the allegations put forward by the complainant that the outsourcing plan was actually aimed at eliminating any form of union in the departments concerned;
   • (iii) invites the Government to propose the creation of an impartial Tripartite Team from among the TIPC-Monitoring Body members with the mandate to conduct a plant-level verification of the parties’ claims, and to provide detailed information with regard to the conduct and outcome of such an inquiry; and
   • (iv) requests that, should it be found in the course of the inquiry that the 28 terminations were anti-union in nature and aimed at eliminating any union representation for the departments concerned, the Government take the necessary steps to ensure that the union members and officials concerned are fully reinstated without loss of pay and keep it informed of any developments in this respect.