Dear Atty. Gab,

Musta Atty! I hope you can shed some light on a situation happening at my workplace, Makabayan Products Inc. I’m Ricardo Cruz, a long-time regular employee and union member. We have a Collective Bargaining Agreement (CBA) that clearly outlines three types of employees: regular, probationary, and casual. The CBA defines casual employees as those hired for occasional or seasonal work directly related to our main operations, like packing during peak season.

Recently, maybe two months ago, management started bringing in workers from an agency called QuickHands Staffing. These agency workers are doing the exact same packing jobs that our casual employees used to handle, especially when orders pile up. Management says it’s their prerogative to manage operations efficiently and that these workers are just temporary help for fluctuating demand.

However, many of us in the union are concerned. Our CBA specifies how casuals are hired, and many of our current regular members started as casuals. If the company keeps hiring from agencies instead of hiring casuals directly as per the CBA, doesn’t that violate our agreement? It feels like they’re bypassing the CBA structure. We’re worried this could weaken the union in the long run because there won’t be a pool of casuals potentially becoming regulars and joining us. No regular employee has been laid off yet, but this new practice feels wrong and undermines the agreement we negotiated in good faith. Can the company legally do this even if our CBA defines specific employee categories for such work? What are our rights here?

Salamat po for any guidance.

Lubos na gumagalang,
Ricardo Cruz

Dear Ricardo,

Thank you for reaching out with your concerns regarding the hiring practices at Makabayan Products Inc. I understand why you and your fellow union members feel uneasy about the engagement of agency workers for tasks traditionally performed by casual employees as defined in your CBA.

The situation you described touches upon a common point of tension in labor relations: the intersection of management’s right to run its business (management prerogative) and the specific terms agreed upon in a Collective Bargaining Agreement (CBA). While companies generally have the prerogative to contract out services for efficiency, this right is not absolute. It can be limited by law, principles of good faith, and, crucially, the provisions of a CBA negotiated with the employees’ union. Your CBA’s definition of employee categories, particularly casual employees, appears central to this issue.

When Your CBA and Company Outsourcing Collide

The core issue you’re facing involves understanding the balance between management prerogative and the contractual obligations set forth in your Collective Bargaining Agreement (CBA). Management prerogative refers to the inherent right of an employer to regulate all aspects of employment. This includes decisions about hiring, work assignments, methods, transferring employees, supervision, discipline, and even contracting out parts of the business operations. The Supreme Court has recognized contracting out services as generally falling within this sphere of business judgment.

However, this prerogative is not a blank check. Its exercise must be done in good faith and is subject to limitations found in law, public policy, general principles of fair play, and, very importantly, in collective bargaining agreements. When a company and a union voluntarily enter into a CBA, its terms become the binding law between them. As the Supreme Court often emphasizes:

“It is familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they are obliged to comply with its provisions. … As in all contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the express policy of the law.”

This means that if your CBA clearly defines categories of employees and the type of work they perform, these provisions must be respected. You mentioned your CBA defines a ‘Casual Employee’ for specific types of work:

“Casual Employee, – One hired by the Company to perform occasional or seasonal work directly connected with the regular operations of the Company, or one hired for specific projects of limited duration not connected directly with the regular operations of the Company.”

If the agency workers from QuickHands Staffing are performing tasks that fit this description – ‘occasional or seasonal work directly connected with regular operations’ – then the company’s decision to outsource this work instead of hiring casual employees directly could indeed be seen as contrary to the intent and spirit, if not the literal terms, of the CBA. By defining casual employees for such work, the CBA arguably limits the company’s prerogative to outsource those specific functions. The company agreed to use casual employees for that purpose, and bringing in an external agency might circumvent that agreement.

It’s also important to distinguish between a simple violation of the CBA and an Unfair Labor Practice (ULP). Not every breach of a CBA constitutes ULP. According to labor law jurisprudence:

“Violations of a CBA, except those which are gross in character, shall no longer be treated as unfair labor practice. Gross violations of a CBA means flagrant and/or malicious refusal to comply with the economic provisions of such agreement.”

Therefore, while the company’s actions might violate the CBA provisions on employee categories, it may not necessarily rise to the level of ULP unless it can be proven to be a flagrant and malicious refusal to comply, particularly with economic provisions, or if it significantly undermines the union itself. However, even if not a ULP, a violation of the CBA is still actionable, typically through the grievance machinery and potentially voluntary arbitration.

Should this matter proceed to voluntary arbitration, the arbitrator generally has broad authority to interpret the CBA and resolve the dispute comprehensively. The arbitrator isn’t strictly limited to a ‘yes’ or ‘no’ answer regarding the specific question initially posed (like whether it’s ULP) but can delve into related issues, such as whether the CBA was violated even if it wasn’t ULP.

“Generally, the arbitrator is expected to decide only those questions expressly delineated by the submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to make a final settlement since arbitration is the final resort for the adjudication of disputes.”

In your situation, Ricardo, the company’s action of hiring agency workers seems to directly conflict with the CBA provision establishing casual employees for occasional or seasonal work. While claimed as an exercise of management prerogative, this action appears limited by the specific agreement you have in place.

Practical Advice for Your Situation

• Review Your CBA Thoroughly: Examine the exact wording of Article I, Section 4 (or its equivalent in your CBA) regarding ‘Categories of Employees,’ especially the definition of ‘Casual Employee,’ and any related clauses like union security (Article III, Section 1 in the reference).
• Gather Specific Evidence: Document precisely what tasks the agency workers are performing, when they started, and how these tasks align with the work previously done by casual employees under the CBA definition.
• Engage Your Union: Bring this matter formally to your union leadership. The union is the party to the CBA and should lead the effort to address this potential violation.
• Utilize the Grievance Machinery: The primary mechanism to address alleged CBA violations is the grievance procedure outlined within your CBA. Initiate this process through your union.
• Focus on the CBA Violation: While the long-term impact on union membership is a valid concern, the strongest initial argument is the direct violation of the CBA’s provisions on employee categories.
• Consider Voluntary Arbitration: If the grievance process does not resolve the issue, the next step, usually stipulated in the CBA, is voluntary arbitration.
• Distinguish CBA Violation from ULP: Understand that proving a ULP requires showing ‘gross violation’ (flagrant/malicious refusal). Your initial focus might be better placed on proving the CBA violation itself.
• Consult with Union Legal Counsel: The union should seek advice from its legal counsel to strategize the best approach, whether through negotiation, grievance, or arbitration.

Ricardo, your concerns are valid. The CBA is a contract that management must adhere to, and specific provisions, like those defining employee roles for particular types of work, can indeed limit the scope of management prerogatives like outsourcing. Pursuing this through your union and the established CBA mechanisms is the appropriate course of action.

Hope this helps!

Sincerely,
Atty. Gabriel Ablola

For more specific legal assistance related to your situation, please contact me through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This correspondence is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please schedule a formal consultation.