G.R. No. 74841 & G.R. No. 75667, December 20, 1991
Associated Labor Unions-VIMCONTU, et al. vs. National Labor Relations Commission, et al.

FACTS

Petitioner labor unions filed a complaint for unfair labor practice and breach of contract against Mobil Oil Philippines, Inc. (MOPI) and its president, Jean Pierre Bailleux. This arose from the sale of MOPI’s marketing and distribution assets to Caltex Philippines, Inc., which led to the termination of all employees effective August 31, 1983. The employees accepted separation pay and signed quitclaims under protest. The unions alleged that the sale violated the Collective Bargaining Agreement (CBA), specifically a provision stating the CBA would be binding on successors and assigns and that the union would be notified of any assignment. They further argued the termination was due to redundancy and that MOPI continued its business under a new corporate name, Mobil Philippines, Inc.
The Labor Arbiter dismissed the complaint, a decision affirmed by the National Labor Relations Commission (NLRC). The Arbiter found the unions had prior knowledge of the sale and closure through negotiations, the termination resulted from a bona fide closure, not redundancy, and the benefits given exceeded legal requirements. The unions elevated the case via certiorari, arguing the NLRC committed grave abuse of discretion.

ISSUE

Whether the NLRC committed grave abuse of discretion in affirming the dismissal of the complaint for unfair labor practice and breach of CBA arising from the sale of corporate assets and termination of employees.

RULING

The Supreme Court dismissed the petitions, finding no grave abuse of discretion. The legal logic centers on the distinction between a sale of assets and a sale of the controlling interest in a corporation. The sale was of the shareholdings of Mobil Petroleum USA in MOPI to Caltex, constituting a transfer of corporate control, not a sale of the entire business enterprise or its assets. Consequently, MOPI, as the corporate entity, remained the employer. Its subsequent closure and cessation of operations constituted a bona fide closure of business, a legitimate exercise of management prerogative. A closure due to serious business losses justifies termination. The purchaser, Caltex, was not MOPI’s successor-in-interest obligated to absorb its employees, as there was no evidence the transaction was cloaked in bad faith to circumvent labor laws. The CBA’s successor clause did not apply under these circumstances. The acceptance of separation benefits, which were above the legal minimum, further militated against the claims. Since the termination resulted from a legitimate closure, the claim of illegal termination due to redundancy was untenable.