Labor secretary dismisses charges vs Ceneco-Primelectric JVA

NEGROS. An official of Ceneco and members of its Third Part Bids and Awards Committee are facing administrative charges filed by multisectoral group Sanlakas-Negros over a move to purchase power supply from a coal plant. (Erwin P. Nicavera photo)
NEGROS. An official of Ceneco and members of its Third Part Bids and Awards Committee are facing administrative charges filed by multisectoral group Sanlakas-Negros over a move to purchase power supply from a coal plant. (Erwin P. Nicavera photo)

Labor Secretary Bienvenido Laguesma dismissed the charges filed by the Central Negros Electric Cooperative, Inc. (Ceneco) Union of Rational Employees (Cure) on the joint venture agreement (JVA) between the power firm and Primelectric Holdings Inc., which they claimed violated the union members' right to security of tenure, for prematurity and lack of cause of action.

Laguesma, in his order dated May 3, 2024, also dismissed the claim for damages by Cure for "lack of factual and legal basis."

He also dismissed the claim of unfair labor practice filed by the Cure against the electric cooperative's general manager, Arnel Lapore, for lack of merit.

The JVA which was entered into on June 3, 2023, between Ceneco and Primelectric to be implemented through Negros Electric Power Cooperative (NEPC).

Cure alleged it would result in the termination of employment of all members and officers of the union. It also alleged unfair labor practices allegedly committed by Ceneco when it intervened in internal union matters.

In its decision, the Department of Labor and Employment (Dole) explained that in entering into the JVA, Ceneco made a management decision to cease operations. Accordingly, it started the steps to dispose of or transfer its assets to the NEPC as its joint venture partner in the manner prescribed by law and under the authority and supervision of the NEA. Of itself, the execution of the JVA does not immediately terminate the employment of Ceneco's employees.

It added that it is but a part of a process that also includes the conduct of a plebiscite among Ceneco's members and attainment of the requisite majority support, the approval of the transfer by NEA, and the passage by Congress of a new legislative franchise in favor of NEPC as the joint venture partner. Ceneco's operation as a power distribution utility shall cease after the transfer of rights, interest, and ownership of its distribution assets to NEPC. It is only after the transfer has taken effect that the employment of Ceneco employees, including the members of the union, will be terminated.

In this case, it is undisputed that the process of transfer at the time of the filing of the notice of strike was just starting and until the present remains ongoing, it also said.

"Ceneco was and remains in operation. None of the union members has been issued a notice of termination by reason of the JVA. In short, Ceneco has not committed any positive or overt act of termination that would support a claim that the right of its members to security of tenure has been violated. On the other hand, this office notes that the ongoing process of transfer is being undertaken under the supervision and guidance of the NEA, whose regulatory authority over electric cooperatives is unquestionable under Presidential Decree No. 269, as amended by Republic Act No. 10531. Given these circumstances, the union's claim that CENECO violated the right of its members to the security of tenure has not ripened into an actual cause of action. At this stage, a decision on this issue would be premature and unfounded,” the decision said.

It also said that Dole notes that under the terms of the JVA, there are provisions that pertain to the liabilities of Ceneco and the rights of its affected employees, including the members of the union, should the transfer of assets from Ceneco to NEPC be finally approved.

The affected employees can invoke these provisions at the proper time. As noted above, Ceneco shall use the cash amounts that it will receive as the consideration for the transfer and assignment of the Distribution Assets to NEPC for the full payment and settlement of any Separation or Retirement pay of employees of Ceneco who will cease to be employed by Ceneco, it stated.

Ceneco shall be responsible for and shall ensure the payment of any and all retirement or separation pay that may be due to its employees who will cease working for Ceneco due to the cessation of business of Ceneco as a distribution utility, including those employees who will transfer to and be accepted to work for NEPC.

As to the allegation that Ceneco is an ailing electric cooperative and that NEA should have instead exercised its step-in rights as provided for under Section 4-B of Presidential Decree No. 269, as amended by Republic Act No. 10531, Dole is of the view that the exercise of this option is within the sole jurisdiction of the NEA to make. Suffice it to note that the actions being taken by Ceneco in this case involve the transfer of assets and cessation of operations of Ceneco under Section 36 (b) of Presidential Decree No. 269, as amended, and not the NEA's exercise of step-in rights. In any case, the provision on step-in rights does not mean that CENECO cannot cease operations, enter into a JVA, or transfer its assets, the decision read.

On the union's claim for moral and exemplary damages, this office notes that the reliefs prayed for are premised on a finding that Ceneco committed unfair labor practice and violated the union members' right to security of tenure. Since neither unfair labor practice nor a violation of the employee's right to security of tenure has been established by substantial evidence, it follows that there is no factual and legal basis to grant the union's claim for moral and exemplary damages, the decision further stated.*

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