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Labor Relations Case Digest: Complex Electric v. NLRC (1999) G.R. No. 121315 July 19, 1999

G.R. No. 121315 July 19, 1999

Lessons Applicable: Unfair Labor Practice

Laws Applicable:

·         Complex Electronics Corporation was engaged in the manufacture of electronic products. It was actually a subcontractor of electronic products where its customers gave their job orders, sent their own materials and consigned their equipment to it.
·         The rank and file workers of Complex were organized into a union known as the Complex Electronics Employees Association
·         Complex received a facsimile message from Lite-On Philippines Electronics Co., requiring it to lower its price by 10%.
o   Complex informed its Lite-On personnel that such request of lowering their selling price by 10% was not feasible as they were already incurring losses at the present prices of their products.
o   Complex regretfully informed the employees that it was left with no alternative but to close down the operations of the Lite-On Line
§  retrenchment will not take place until after 1 month
§  try to prolong the work for as many people as possible for as long as it can
§  retrenchment pay as provided for by law i.e. half a month for every year of service in accordance with Article 283 of the Labor Code of Philippines.
·         Complex filed a notice of closure of the Lite-On Line with the Department of Labor and Employment (DOLE) and the retrenchment of the ninety-seven (97) affected employees.
·         Union filed a notice of strike with the National Conciliation and Mediation Board
·         In the evening of April 6, 1992, the machinery, equipment and materials being used for production at Complex were pulled-out from the company premises and transferred to the premises of Ionics Circuit, Inc. (Ionics) at Cabuyao, Laguna.
o   Fearful that the machinery, equipment and materials would be rendered inoperative and unproductive due to the impending strike of the workers, the customers ordered their pull-out and transfer to Ionics.
o   Complex was compelled to cease operations
o   Ionics contended that it was an entity separate and distinct from Complex and had been in existence since July 5, 1984 or eight (8) years before the labor dispute arose at Complex. Like Complex, it was also engaged in the semi-conductor business where the machinery, equipment and materials were consigned to them by their customers
o   President of Complex was also the President of Ionics, the latter denied having Qua as their owner since he had no recorded subscription of P1,200,00.00 in Ionics as claimed by the Union. Ionics further argued that the hiring of some displaced workers of Complex was an exercise of management prerogatives.
·         complaint was, thereafter, filed with the Labor Arbitration Branch of the NLRC for unfair labor practice, illegal closure/illegal lockout, money claims for vacation leave, sick leave, unpaid wages, 13th month pay, damages and attorney's fees. The Union alleged that the pull-out of the machinery, equipment and materials from the company premises, which resulted to the sudden closure of the company was in violation of Section 3 and 8, Rule XIII, Book V of the Labor Code of the Philippines  and the existing CBA
·         Labor Arbiter: reinstate the 531 above-listed employees to their former position; charge of slowdown strike filed by respondent Complex against the union is hereby dismissed for lack of merit.
·         NLRC: pay 531 complainants equivalent to one month pay in lieu of notice and separation pay equivalent to one month pay for every year of service and a fraction of six months considered as one whole year.

ISSUE: W/N there was ULP

·         A "runaway shop" is defined as an industrial plant moved by its owners from one location to another to escape union labor regulations or state laws, but the term is also used to describe a plant removed to a new location in order to discriminate against employees at the old plant because of their union activities.
o   It is one wherein the employer moves its business to another location or it temporarily closes its business for anti-union purposes
o   relocation motivated by anti-union animus rather than for business reasons
o   Ionics was not set up merely for the purpose of transferring the business of Complex. At the time the labor dispute arose at Complex, Ionics was already existing as an independent company.
o   The Union failed to show that the primary reason for the closure of the establishment was due to the union activities of the employees.
o   The mere fact that one or more corporations are owned or controlled by the same or single stockholder is not a sufficient ground for disregarding separate corporate personalities.
·         No illegal lockout/illegal dismissal
o   closure, therefore, was not motivated by the union activities of the employees, but rather by necessity since it can no longer engage in production without the much needed materials, equipment and machinery.
o   The determination to cease operation is a prerogative of management that is usually not interfered with by the State as no employer can be required to continue operating at a loss simply to maintain the workers in employment.
·         personal liability of Lawrence Qua- absence of malice or bad faith, a stockholder or an officer of a corporation cannot be made personally liable for corporate liabilities.
·         We see no valid and cogent reason why petitioner should not be likewise sanctioned for its failure to serve the mandatory written notice. Under the attendant facts, we find the amount of P5,000.00, to be just and reasonable.