Digitel labor issue keenly watched

THE decision of the National Labor Relations Commission (NLRC) on the termination of all employees of Digital Telecommunications Philippines Inc. (Digitel), which was earlier purchased by the Philippine Long Distance Telephone Co. (PLDT) under a share-swap agreement, bears watching, for it strikes at the heart of the security-of-tenure provision in the country’s labor laws. If this is not questioned, it could have a negative impact on workers’ rights.

The Digitel Employees Union (DEU) has resorted to using social media to question the resolution issued by the NLRC’s Second Division and raise important issues related to it. According to this resolution, “the company argues that it implemented the redundancy program pursuant to a valid exercise of [the] management’s prerogative. Abolition of departments or positions is one of the recognized management prerogatives.”

On this particular issue, the DEU was emphatic: How can redundancy result in the termination of all the company’s regular employees? In a statement posted on its blog and Facebook page, DEU President Allan Licardo said that, while the labor laws allow for the taking out of whole departments or positions, the Digitel case is very different, since all the company’s regular employees have been removed.

The union also came up with a point-by-point rebuttal of the NLRC decision, and this is where the case becomes interesting, not so much for the arguments raised as for the questions raised on the very cases the Supreme Court (SC) had decided on that formed the bases for the resolution.

There were three cases dredged up by the NLRC in coming up with its decision to side with the PLDT management. And in these three cases the union raised valid issues, foremost of which is the misreading of those cases. What bears watching is how the Digitel case would further unfold, given the arguments made by the union in opposing the resolution.

The first case that the NLRC cited in declaring “that [the] complainants’ redundancy is illegal” was Deles v NLRC, the decision on which was made on March 9, 2000. This decision was cited for this: it “is a well-settled rule in this jurisdiction” that, while the Labor Code guarantees security of tenure to the employees, it is a well-recognized principle that employers have the right and prerogative to regulate every aspect of their business generally without restraint in accordance with their own discretion and judgment.

However, the DEU said the Deles case—which, to reiterate, was cited by the NLRC to boost its argument that the termination was legal—shows that the issue was not one of redundancy. What it shows is the fact the employee in question was terminated due to neglect of duty and dishonesty. “Verily, a reading of the entire case will readily show that the case was used by [the] NLRC out of context and in an entirely different situation,” the union said.

The second case cited was Mendoza v Rural Bank of Lucban, decided on by the SC on July 7, 2004. This case was cited by the NLRC for this: the “privilege is inherent in the right of employers to control and manage their enterprise effectively.” But the DEU said there was a misreading of the impact of the case, since this one involves a different matter altogether.

The NLRC’s reliance on this particular case, the union said, is “misplaced,” adding that the case “does not involve redundancy, but a reshuffle or transfer of work assignments within the company. It simply involves a complaint of one employee, whose assignment as appraiser was reshuffled to clerk-collection.”

The third case cited was Pilar Espino v Court of Appeals, the decision on which was promulgated by the SC on March 28, 2007. The NLRC cited this case for this: “One of the rights accorded [to] an employer is the right to close an establishment or undertaking. Just as no law forces anyone to go into business, no law can compel anybody to continue the same.”

In response, the DEU said a simple reading of the case would show that it involved the closure of M.Y. San when it was sold to Monde. It added that the Digitel case involved redundancy, not closure, and that “the NLRC seriously and manifestly erred in relying and using the SC decisions out of context.”

How the Digitel case would evolve will surely have a great impact on the country’s labor laws and on the plight of employees, in light of the challenges to their security of tenure. This alone should make the Digitel case one to watch. –Lito Gagni, Businessmirror