GOYA INCORPORATED VS.

GOYA EMPLOYEES

FACTS of the Case: GR. 170054

Goya, Inc., a local firm specializing in the manufacture, importation, and wholesale of
high-quality food items, has engaged contractual personnel from PESO Resources Development
Corporation (PESO) to conduct temporary and occasional services in its facility in Parang,
Marikina City (SunnyDay, n.d.). According to the existing categories of employees listed in the
Collective Bargaining Agreement (CBA), contractual employees hired by Goya do not fall into
any of these categories. As a result, they asked for a meeting to discuss their grievances. When
the dispute could not be settled, the matter was referred to the National Conciliation and
Mediation Board for Voluntary Arbitration. During the hearing, however, both the firm and the
union stated that an amicable settlement is no longer conceivable before the voluntary arbiter,
Laguesma. As a result, both parties agreed to provide a resolution to the sole issue of whether the
Company engaged the services of PESO in an unfair labor practice. According to the union,
hiring contractual staff from a third-party service provider is a violation of the law and
constitutes unfair labor practice. In response to the unions' claims, the Goya Company
maintained that the hiring of contractual employees did not result in the termination of an
employee or a reduction in working hours (Santos, n.d.). The Union's complaint of Unfair Labor
Practice was dismissed by the Voluntary Arbitrator due to a lack of factual basis (ULP). The
Company, on the other hand, was advised to follow through on its CBA commitments. As a
result, both parties agreed that if the firm needs more workers to conduct seasonal work directly
related to the company's operations, the company can hire employees who are tied to contractual
or seasonal workers. It was also mentioned at the outset that the company's contract with PESO
was for temporary or seasonal services. This being said, the company then should have directly
hired the services of casual employees rather than do it through PESO. However, the right of the
company to outsource is not totally eliminated but is only limited by the CBA. The CA denied
the request and confirmed the choice of the VA, Goya moved for reexamination yet it was
likewise denied. Goya contended that recruiting contractual workers is a substantial
administrative right. Goya company also stated that it is the administration's right track to enlist
legally binding workers. The petition was dismissed by the Court of Appeals.

ISSUE:

Whether or not the Company is guilty of unfair labor practice in engaging the services of
PESO, a third party service provider, under existing CBA, laws, and jurisprudence.

No. Although the engagement of PESO violates Section 4, Article I of the CBA, it does not
constitute unfair labor practice as it does not characterize under the law as a gross violation of
the CBA. Violations of CBA, except those which are gross, will no longer be treated as unfair
labor practices. Moreover, gross violations of a CBA express flagrant and/or malicious refusal to
comply with the economic provisions of such agreement, ("G.R. No. 170054", n.d). In the case
presented between Goya, Inc. (Company) and Goya, Inc. Employees Union FFW (Union) the
company had admitted the engagement of the services of PESO to perform temporary or
occasional services which are similar to those performed by casual employees. It was evident
that the engagement of PESO in the Company is not in keeping with the intent and spirit of the
CBA. In line with this, the company should have observed and complied with the provision of
their CBA. Also, it must be given the emphasis that the management prerogative of contracting
out services is not totally eliminated but is simply limited by the CBA.

Whether or not the act of hiring contractual employees is a valid exercise of management
prerogative.

No. In this case, Goya Inc. insisted that both the VA and the CA acknowledged that its
engagement of contractual workers from PESO was a valid exercise of management prerogative.
To give emphasis, declaring that a particular act falls within the concept of management
prerogative is different from acknowledging that such act is a valid exercise thereof, ("G.R. No.
170054", n.d). Moreover, the VA and the CA rightly ruled that the Company’s act of outsourcing
contractual employees is within the scope of management prerogative. However, both did not
declare that such an act is a valid exercise thereof. This is due to the recognition that the CBA
provisions agreed upon by Goya and the Union delimit the free exercise of management
prerogative concerning the hiring of contractual employees. As repeatedly held, the exercise of
management prerogative is not unlimited; it is subject to the limitations found in the law,
collective bargaining agreement, or the general principles of fair play and justice, ("G.R. No.
170054", n.d).

DOCTRINE OR RELEVANT LAW AS BASIS OF THE DECISION

● Collective Bargaining Agreement (CBA) Section IV, Article I.

On October 26, 2004, Voluntary Arbitrator (VA) Bienvenido E. Laguesma dismissed the
union’s charge of unfair labor practice (ULP) against the company due to lack of factual basis.
The VA leaned his judgement towards Section 4, Article 1 of CBA, whereas the article merely
defined the three categories of employees: the probationary, regular, and casual, as well as their
respective functions and duties ("G.R. No. 170054", n.d).

● Department of Labor and Employment (DOLE) Order No. 18-02, Section I.

Evidently, the engagement of PESO was indeed a violation of Section 4, Article I of the
CBA, nonetheless it does not constitute unfair labor practice. Gross violation of CBA can only
be considered if there is a malicious refusal to comply with the economic provisions of such
agreement, ("G.R. No. 170054", n.d). The company highlighted the fact that the engagement of
contractual employees did not prejudice the union, no termination of employees was upheld, and
neither the reduction of working hours nor a decrease or splitting of the bargaining unit. Also,
according to the DOLE (2019), Order No. 18-02, Section I to which the law allows contracting
and subcontracting arrangements gearing towards regulation and promotion of employment,
("G.R. No. 170054", n.d).
 ● Collective Bargaining Agreement (CBA), Section I, Article III.

Furthermore, it was also stated that PESO will be handling a work identical to the ones
performed by the casual employees of the company; and with the provision on the casual
employees, the movement of hiring PESO as the third-party service provider was also found not
keeping with the spirit and intent of their Collective Bargaining Agreement (CBA) Section IV,
Article I which explains the union and the company to which it must be in conjunction to Section
I, Article III emphasizing union security. ("G.R. No. 170054", n.d). Union Security is a form of
agreement that establishes a condition towards employees to attain union membership, (“G.R.
No. 232687”, n.d).

VERDICT

The first issue that was addressed in this case that the Union brought up to the Voluntary
Arbitrator (VA) is their claim that the company’s action of hiring contractual workers from PESO
constitutes unfair labor practice. Their basis for this claim is Section 4, Article I of CBA which
states the categories of employees. Only referring to this, it does not really justify their claim. It
is true that the PESO contractual employees do not fall in the categories of employees that were
stated in the CBA, hiring them is not an unfair labor practice. The company therefore, is not
guilty of unfair labor practice as the Supreme Court had declared.

However, it cannot be overlooked that the company violated the CBA because of their
action. They appealed that they only exercised their prerogative as a company to outsource
employees to provide certain services but this is not a valid excuse because even though it is
indeed their right to do so, they have already agreed to acknowledge the CBA in respect to their
relationship with the Union so their right is limited by this agreement. The PESO contractual
workers had the same nature of job as the casual employees of the company and it really looks
unfair in the eyes of the Union because it threatens their security in the company. The company
has the responsibility to adhere to the CBA and their excuse that it is only their prerogative does
not justify their action.
REFERENCES

Department of Labor and Employment, (n.d). Department Order No. 18-02, series of 2002:
Rules Implementing Articles 106-109 of the Labor Code, as amended. Retrieved from
https://blr.dole.gov.ph/news/department-order-no-18-02-series-of-2002-rules
implementing-articles-106-109-of-the-labor-code-as-amended/

Goya v. Goya Employees (G.R. No. 170054; January 21, 2013). (n.d.). Retrieved November 27,
2021, from PROJECTJURISPRUDENCE website:
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Magsino, T. (2017). Goya V Goya Employees Union. Retrieved from  

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Santos, N.F. (n.d.). GOYA v. GOYA, GR No. 170054, 2013-01-21. Retrieved from
https://lawyerly.ph/digest/cd8c7?user=1230

Sunny and the Law. (2015). Goya, Inc. vs. Goya, Inc. employee’s union -FFW G.R. No.
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The LAWPHIL Project, (n.d). Philippine Laws and Jurisprudence Databank. G.R. No. 170054.
Goya, Inc., vs Goya, Inc. Employees Union-FFW. Retrieved from
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Slord Development Corporation vs Bernardo, M. Noya. Retrieved from
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