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[G.R. No. 146728.

February 11, 2004]

LA%OR "NION &GMC'IL"(, a)* RIO MANG"%A, respondents.
$ E C I # I O N
+"I#"M%ING, J.,
Before us is a petition for certiorari assailing the decision
July 19, 2000, of the Court of Appeals in CA-G! "# $o %0&'&, (hich
earlier re)ersed the decision
dated January &0, 199' of the $ational
*a+or !elations Co,,ission -$*!C. in $*!C Case $o /-0112-90
1he antecedent facts are as follo(s2
3n its t(o plants located at Ce+u City and *apu-*apu City, petitioner
General 4illing Corporation -G4C. e,ployed 190 (or5ers 1hey (ere all
,e,+ers of pri)ate respondent General 4illing Corporation 3ndependent
*a+or 6nion -union, for +re)ity., a duly certi7ed +argaining agent
8n April 2', 19'9, G4C and the union concluded a collecti)e
+argaining agree,ent -CBA. (hich included the issue of representation
e9ecti)e for a ter, of three years 1he CBA (as e9ecti)e for three
years retroacti)e to :ece,+er 1, 19'' ;ence, it (ould e<pire on
$o)e,+er &0, 1991
8n $o)e,+er 29, 1991, a day +efore the e<piration of the CBA, the
union sent G4C a proposed CBA, (ith a re=uest that a counter-proposal
+e su+,itted (ithin ten -10. days
As early as 8cto+er 1991, ho(e)er, G4C had recei)ed collecti)e
and indi)idual letters fro, (or5ers (ho stated that they had (ithdra(n
fro, their union ,e,+ership, on grounds of religious a>liation and
personal di9erences Belie)ing that the union no longer had standing to
negotiate a CBA, G4C did not send any counter-proposal
8n :ece,+er 1?, 1991, G4C (rote a letter to the union@s o>cers,
!ito 4angu+at and /ictor *asti,oso 1he letter stated that it felt there
(as no +asis to negotiate (ith a union (hich no longer e<isted, +ut that
,anage,ent (as nonetheless al(ays (illing to dialogue (ith the, on
,atters of co,,on concern and (as open to suggestions on ho( the
co,pany ,ay i,pro)e its operations
3n ans(er, the union o>cers (rote a letter dated :ece,+er 19,
1991 disclai,ing any ,assi)e disa>liation or resignation fro, the union
and su+,itted a ,anifesto, signed +y its ,e,+ers, stating that they
had not (ithdra(n fro, the union
8n January 1&, 1992, G4C dis,issed 4arcia 1u,+iga, a union
,e,+er, on the ground of inco,petence 1he union protested and
re=uested G4C to su+,it the ,atter to the grie)ance procedure
pro)ided in the CBA G4C, ho(e)er, ad)ised the union to Arefer to our
letter dated :ece,+er 1?, 1991B
1hus, the union 7led, on July 2, 1992, a co,plaint against G4C (ith
the $*!C, Ar+itration :i)ision, Ce+u City 1he co,plaint alleged unfair
la+or practice on the part of G4C for2 -1. refusal to +argain collecti)elyC
-2. interference (ith the right to self-organiDationC and -&.
discri,ination 1he la+or ar+iter dis,issed the case (ith the
reco,,endation that a petition for certi7cation election +e held to
deter,ine if the union still enEoyed the support of the (or5ers
1he union appealed to the $*!C
8n January &0, 199', the $*!C set aside the la+or ar+iter@s
decision Citing Article 2%&-A of the *a+or Code, as a,ended +y !ep
Act $o ?F1%,
(hich 7<ed the ter,s of a collecti)e +argaining
agree,ent, the $*!C ordered G4C to a+ide +y the CBA draft that the
union proposed for a period of t(o -2. years +eginning :ece,+er 1,
1991, the date (hen the original CBA ended, to $o)e,+er &0,
199& 1he $*!C also ordered G4C to pay the attorney@s fees
3n its decision, the $*!C pointed out that upon the e9ecti)ity of
!ep Act $o ?F1%, the duration of a CBA, insofar as the representation
aspect is concerned, is 7)e -%. years (hich, in the case of G4C-
3ndependent *a+or 6nion (as fro, :ece,+er 1, 19'' to $o)e,+er &0,
199& All other pro)isions of the CBA are to +e renegotiated not later
than three -&. years after its e<ecution 1hus, the $*!C held that
respondent union re,ained as the e<clusi)e +argaining agent (ith the
right to renegotiate the econo,ic pro)isions of the CBA Conse=uently,
it (as unfair la+or practice for G4C not to enter into negotiation (ith the
1he $*!C li5e(ise held that the indi)idual letters of (ithdra(al fro,
the union su+,itted +y 1& of its ,e,+ers fro, Ge+ruary to June 199&
con7r,ed the pressure e<erted +y G4C on its e,ployees to resign fro,
the union 1hus, the $*!C also found G4C guilty of unfair la+or practice
for interfering (ith the right of its e,ployees to self-organiDation
Hith respect to the union@s clai, of discri,ination, the $*!C found
the clai, unsupported +y su+stantial e)idence
8n G4C@s ,otion for reconsideration, the $*!C set aside its
decision of January &0, 199', through a resolution dated 8cto+er ?,
199' 3t found G4C@s dou+ts as to the status of the union Eusti7ed and
the allegation of coercion e<erted +y G4C on the union@s ,e,+ers to
resign unfounded ;ence, the union 7led a petition for certiorari +efore
the Court of Appeals Gor failure of the union to attach the re=uired
copies of pleadings and other docu,ents and ,aterial portions of the
record to support the allegations in its petition, the CA dis,issed the
petition on Ge+ruary 9, 1999 1he sa,e petition (as su+se=uently 7led
+y the union, this ti,e (ith the necessary docu,ents 3n its resolution
dated April 2?, 1999, the appellate court treated the re7led petition as a
,otion for reconsideration and ga)e the petition due course
8n July 19, 2000, the appellate court rendered a decision the
dispositi)e portion of (hich reads2
H;I!IG8!I, the petition is here+y GRANE$ 1he $*!C !esolution of
8cto+er ?, 199' is here+y #E A#I$E, and its decision of January &0,
199' is, e<cept (ith respect to the a(ard of attorney@s fees (hich is
here+y deleted, REIN#AE$
A ,otion for reconsideration (as seasona+ly 7led +y G4C, +ut in a
resolution dated 8cto+er 2?, 2000, the CA denied it for lac5 of ,erit
;ence, the instant petition for certiorari alleging that2
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A##!IC3A13$G 1;A1 1;I $*!C ;A" $8 J6!3":3C138$ 18
:I1I!43$I 1;I 1I!4" A$: C8$:3138$" 8G A C8**IC13/I
BA!GA3$3$G AG!II4I$1
1hus, in the instant case, the principal issue for our deter,ination is
(hether or not the Court of Appeals acted (ith gra)e a+use of discretion
a,ounting to lac5 or e<cess of Eurisdiction in -1. 7nding G4C guilty of
unfair la+or practice for )iolating the duty to +argain collecti)ely andMor
interfering (ith the right of its e,ployees to self-organiDation, and -2.
i,posing upon G4C the draft CBA proposed +y the union for t(o years
to +egin fro, the e<piration of the original CBA
8n the 7rst issue, Article 2%&-A of the *a+or Code, as a,ended +y
!ep Act $o ?F1%, states2
A!1 2%&-A er-. o/ a 0o11e0234e bar5a3)3)5 a5ree-e)2 N Any
Collecti)e Bargaining Agree,ent that the parties ,ay enter into shall,
insofar as the representation aspect is concerned, +e for a ter, of 7)e
-%. years $o petition =uestioning the ,aEority status of the incu,+ent
+argaining agent shall +e entertained and no certi7cation election shall
+e conducted +y the :epart,ent of *a+or and I,ploy,ent outside of
the si<ty-day period i,,ediately +efore the date of e<piry of such 7)e
year ter, of the Collecti)e Bargaining Agree,ent All other pro)isions of
the Collecti)e Bargaining Agree,ent shall +e renegotiated not later than
three -&. years after its e<ecution
1he la( ,andates that the representation pro)ision of a CBA should
last for 7)e years 1he relation +et(een la+or and ,anage,ent should
+e undistur+ed until the last ?0 days of the 7fth year ;ence, it is
indisputa+le that (hen the union re=uested for a renegotiation of the
econo,ic ter,s of the CBA on $o)e,+er 29, 1991, it (as still the
certi7ed collecti)e +argaining agent of the (or5ers, +ecause it (as
see5ing said renegotiation (ithin 7)e -%. years fro, the date of
e9ecti)ity of the CBA on :ece,+er 1, 19'' 1he union@s proposal (as
also su+,itted (ithin the prescri+ed &-year period fro, the date of
e9ecti)ity of the CBA, al+eit Eust +efore the last day of said period 3t
(as o+)ious that G4C had no )alid reason to refuse to negotiate in good
faith (ith the union Gor refusing to send a counter-proposal to the
union and to +argain ane( on the econo,ic ter,s of the CBA, the
co,pany co,,itted an unfair la+or practice under Article 20' of the
*a+or Code, (hich pro)ides that2
A!1 20' ")/a3r 1abor 6ra0230e. o/ e-61oyer.. N 3t shall +e unla(ful
for an e,ployer to co,,it any of the follo(ing unfair la+or practice2

-g. 1o )iolate the duty to +argain collecti)ely as prescri+ed +y this CodeC

Article 2%2 of the *a+or Code elucidates the ,eaning of the phrase
Aduty to +argain collecti)ely,B thus2
A!1 2%2 Mea)3)5 o/ *u2y 2o bar5a3) 0o11e0234e1y N 1he duty to
+argain collecti)ely ,eans the perfor,ance of a ,utual o+ligation to
,eet and con)ene pro,ptly and e<peditiously in good faith for the
purpose of negotiating an agree,ent
He ha)e held that the crucial =uestion (hether or not a party has
,et his statutory duty to +argain in good faith typically turnO on the
facts of the indi)idual case
1here is no per se test of good faith in
Good faith or +ad faith is an inference to +e dra(n fro, the
1he e9ect of an e,ployer@s or a union@s actions indi)idually is
not the test of good-faith +argaining, +ut the i,pact of all such
occasions or actions, considered as a (hole
6nder Article 2%2 a+o)ecited, +oth parties are re=uired to perfor,
their ,utual o+ligation to ,eet and con)ene pro,ptly and e<peditiously
in good faith for the purpose of negotiating an agree,ent 1he union
li)ed up to this o+ligation (hen it presented proposals for a ne( CBA to
G4C (ithin three -&. years fro, the e9ecti)ity of the original CBA But
G4C failed in its duty under Article 2%2 Hhat it did (as to de)ise a
Pi,sy e<cuse, +y =uestioning the e<istence of the union and the status
of its ,e,+ership to pre)ent any negotiation
3t +ears stressing that the procedure in collecti)e +argaining
prescri+ed +y the Code is ,andatory +ecause of the +asic interest of the
state in ensuring lasting industrial peace 1hus2
A!1 2%0 Pro0e*ure 3) 0o11e0234e bar5a3)3)5 N 1he follo(ing
procedures shall +e o+ser)ed in collecti)e +argaining2
-a. Hhen a party desires to negotiate an agree,ent, it shall ser)e a
(ritten notice upon the other party (ith a state,ent of its proposals
1he other party shall ,a5e a reply thereto not later than ten -10.
calendar days fro, receipt of such notice -6nderscoring supplied.
G4C@s failure to ,a5e a ti,ely reply to the proposals presented +y
the union is indicati)e of its utter lac5 of interest in +argaining (ith the
union 3ts e<cuse that it felt the union no longer represented the (or5ers,
(as ,ainly dilatory as it turned out to +e utterly +aseless
He hold that G4C@s refusal to ,a5e a counter-proposal to the
union@s proposal for CBA negotiation is an indication of its +ad faith
Hhere the e,ployer did not e)en +other to su+,it an ans(er to the
+argaining proposals of the union, there is a clear e)asion of the duty to
+argain collecti)ely
Gailing to co,ply (ith the ,andatory o+ligation to su+,it a reply to
the union@s proposals, G4C )iolated its duty to +argain collecti)ely,
,a5ing it lia+le for unfair la+or practice #erforce, the Court of Appeals
did not co,,it gra)e a+use of discretion a,ounting to lac5 or e<cess of
Eurisdiction in 7nding that G4C is, under the circu,stances, guilty of
unfair la+or practice
:id G4C interfere (ith the e,ployees@ right to self-
organiDationQ 1he CA found that the letters +et(een Ge+ruary to June
199& +y 1& union ,e,+ers signifying their resignation fro, the union
clearly indicated that G4C e<erted pressure on its e,ployees 1he
records sho( that G4C presented these letters to pro)e that the union
no longer enEoyed the support of the (or5ers 1he fact that the
resignations of the union ,e,+ers occurred during the pendency of the
case +efore the la+or ar+iter sho(s G4C@s desperate atte,pts to cast
dou+t on the legiti,ate status of the union He agree (ith the CA@s
conclusion that the ill-ti,ed letters of resignation fro, the union
,e,+ers indicate that G4C had interfered (ith the right of its
e,ployees to self-organiDation 1hus, (e hold that the appellate court
did not co,,it gra)e a+use of discretion in 7nding G4C guilty of unfair
la+or practice for interfering (ith the right of its e,ployees to self-
Ginally, did the CA gra)ely a+use its discretion (hen it i,posed on
G4C the draft CBA proposed +y the union for t(o years co,,encing
fro, the e<piration of the original CBAQ
1he Code pro)ides2
A!1 2%& $u2y 2o bar5a3) 0o11e0234e1y 78e) 28ere e93.2. a
0o11e0234e bar5a3)3)5 a5ree-e)2. N 3t shall +e the duty of +oth
parties to 5eep the status =uo and to continue in full force and e9ect the
ter,s and conditions of the e<isting agree,ent during the ?0-day period
[prior to its e<piration date] andMor until a ne( agree,ent is reached +y
the parties -6nderscoring supplied.
1he pro)ision ,andates the parties to 5eep the status quo (hile
they are still in the process of (or5ing out their respecti)e proposal and
counter proposal 1he general rule is that (hen a CBA already e<ists, its
pro)ision shall continue to go)ern the relationship +et(een the parties,
until a ne( one is agreed upon 1he rule necessarily presupposes that all
other things are e=ual 1hat is, that neither party is guilty of +ad faith
;o(e)er, (hen one of the parties a+uses this grace period +y purposely
delaying the +argaining process, a departure fro, the general rule is
3n Kiok Loy vs. NLRC,
(e found that petitioner therein, "(eden
3ce Crea, #lant, refused to su+,it any counter proposal to the CBA
proposed +y its e,ployees@ certi7ed +argaining agent He ruled that the
for,er had there+y lost its right to +argain the ter,s and conditions of
the CBA 1hus, (e did not hesitate to i,pose on the erring co,pany the
CBA proposed +y its e,ployees@ union - loc5, stoc5 and +arrel 8ur
7ndings in Kiok Loy are si,ilar to the facts in the present case, to (it2
Rpetitioner Co,pany@s approach and attitude N stalling the negotiation
+y a series of postpone,ents, non-appearance at the hearing
conducted, and undue delay in su+,itting its 7nancial state,ents, lead
to no other conclusion e<cept that it is un(illing to negotiate and reach
an agree,ent (ith the 6nion #etitioner has not at any instance, e)inced
good faith or (illingness to discuss freely and fully the clai,s and
de,ands set forth +y the 6nion ,uch less Eustify its o+Eection thereto
*i5e(ise, in Divine Word University of Tacloban vs. Secretary of
Labor and !ploy!ent,
petitioner therein, :i)ine Hord 6ni)ersity of
1aclo+an, refused to perfor, its duty to +argain collecti)ely 1hus, (e
upheld the unilateral i,position on the uni)ersity of the CBA proposed
+y the :i)ine Hord 6ni)ersity I,ployees 6nion He said further2
1hat +eing the said case, the petitioner ,ay not )alidly assert that its
consent should +e a pri,ordial consideration in the +argaining process
By its acts, no less than its action (hich +espea5 its insincerity, it has
forfeited (hate)er rights it could ha)e asserted as an e,ployer
Applying the principle in the foregoing cases to the instant case, it
(ould +e unfair to the union and its ,e,+ers if the ter,s and conditions
contained in the old CBA (ould continue to +e i,posed on G4C@s
e,ployees for the re,aining t(o -2. years of the CBA@s duration He are
not inclined to gratify G4C (ith an e<tended ter, of the old CBA after it
resorted to delaying tactics to pre)ent negotiations "ince it (as G4C
(hich )iolated the duty to +argain collecti)ely, +ased on Kiok
Loy and Divine Word University of Tacloban, it had lost its statutory right
to negotiate or renegotiate the ter,s and conditions of the draft CBA
proposed +y the union
He carefully note, ho(e)er, that as strictly distinguished fro, the
facts of this case, there (as no pre-e<isting CBA +et(een the parties
in Kiok Loy and Divine Word University of Tacloban $onetheless, (e
dee, it proper to apply in this case the rationale of the doctrine in the
said t(o cases 1o rule other(ise (ould +e to allo( G4C to ha)e its ca5e
and eat it too
6nder ordinary circu,stances, it is not o+ligatory upon either side
of a la+or contro)ersy to precipitately accept or agree to the proposals
of the other But an erring party should not +e allo(ed to resort (ith
i,punity to sche,es feigning negotiations +y going through e,pty
1hus, +y i,posing on G4C the pro)isions of the draft CBA
proposed +y the union, in our )ie(, the interests of e=uity and fair play
(ere properly ser)ed and +oth parties regained e=ual footing, (hich (as
lost (hen G4C th(arted the negotiations for ne( econo,ic ter,s of the
1he 7ndings of fact +y the CA, a>r,ing those of the $*!C as to the
reasona+leness of the draft CBA proposed +y the union should not +e
distur+ed since they are supported +y su+stantial e)idence 8n this
score, (e see no cogent reason to rule other(ise ;ence, (e hold that
the Court of Appeals did not co,,it gra)e a+use of discretion
a,ounting to lac5 or e<cess of Eurisdiction (hen it i,posed on G4C,
after it had co,,itted unfair la+or practice, the draft CBA proposed +y
the union for the re,aining t(o -2. years of the duration of the original
CBA Gairness, e=uity, and social Eustice are +est ser)ed in this case +y
sustaining the appellate court@s decision on this issue
:!EREFORE, the petition is :3"43""I: and the assailed decision
dated July 19, 2000, and the resolution dated 8cto+er 2?, 2000, of the
Court of Appeals in CA-G! "# $o %0&'&, are AGG3!4I: Costs against

G.R. No. 8;<8; Au5u.2 1=, 1<<=
P!ILIPPINE AIRLINE#, INC. &PAL(, petitioner,
A##OCIAION &PALEA(, respondents
Solon "arcia for petitioner.
#dolp$o %. "uer&on for respondent '#L#.

3n the instant petition for certiorari, the Court is presented the issue of
(hether or not the for,ulation of a Code of :iscipline a,ong e,ployees
is a shared responsi+ility of the e,ployer and the e,ployees
8n 4arch 1%, 19'%, the #hilippine Airlines, 3nc -#A*. co,pletely re)ised
its 19?? Code of :iscipline 1he Code (as circulated a,ong the
e,ployees and (as i,,ediately i,ple,ented, and so,e e,ployees
(ere forth(ith su+Eected to the disciplinary ,easures e,+odied therein
1hus, on August 20, 19'%, the #hilippine Airlines I,ployees Association
-#A*IA. 7led a co,plaint +efore the $ational *a+or !elations
Co,,ission -$*!C. for unfair la+or practice -Case $o $C!-F-20%1-'%.
(ith the follo(ing re,ar5s2 S6*# (ith ar+itrary i,ple,entation of #A*Ts
Code of :iscipline (ithout notice and prior discussion (ith 6nion +y
4anage,entS -Rollo, p 01. 3n its position paper, #A*IA contended that
#A*, +y its unilateral i,ple,entation of the Code, (as guilty of unfair
la+or practice, speci7cally #aragraphs I and G of Article 209 and Article
2%& of the *a+or Code #A*IA alleged that copies of the Code had +een
circulated in li,ited nu,+ersC that +eing penal in nature the Code ,ust
confor, (ith the re=uire,ents of su>cient pu+lication, and that the
Code (as ar+itrary, oppressi)e, and preEudicial to the rights of the
e,ployees 3t prayed that i,ple,entation of the Code +e held in
a+eyanceC that #A* should discuss the su+stance of the Code (ith
#A*IAC that e,ployees dis,issed under the Code +e reinstated and their
cases su+Eected to further hearingC and that #A* +e declared guilty of
unfair la+or practice and +e ordered to pay da,ages -pp F-10, !ecord.
#A* 7led a ,otion to dis,iss the co,plaint, asserting its prerogati)e as
an e,ployer to presci+e rules and regulations regarding e,ployessT
conduct in carrying out their duties and functions, and alleging that +y
i,ple,enting the Code, it had not )iolated the collecti)e +argaining
agree,ent -CBA. or any pro)ision of the *a+or Code Assailing the
co,plaint as unsupported +y e)idence, #A* ,aintained that Article 2%&
of the *a+or Code cited +y #A*IA re9ered to the re=uire,ents for
negotiating a CBA (hich (as inapplica+le as indeed the current CBA had
+een negotiated
3n its reply to #A*Ts position paper, #A*IA ,aintained that Article 209 -I.
of the *a+or Code (as )iolated (hen #A* unilaterally i,ple,ented the
Code, and cited pro)isions of Articles 3/ and 3 of Chapter 33 of the Code as
defecti)e for, respecti)ely, running counter to the construction of penal
la(s and ,a5ing punisha+le any o9ense (ithin #A*Ts conte,plation
1hese pro)isions are the follo(ing2
"ec 2 Non(e)clusivity U 1his Code does not contain
the entirety of the rules and regulations of the co,pany
I)ery e,ployee is +ound to co,ply (ith all applica+le
rules, regulations, policies, procedures and standards,
including standards of =uality, producti)ity and
+eha)iour, as issued and pro,ulgated +y the co,pany
through its duly authoriDed o>cials Any )iolations
thereof shall +e punisha+le (ith a penalty to +e
deter,ined +y the gra)ity andMor fre=uency of the
"ec F Cu!ulative Record U An e,ployeeTs record of
o9enses shall +e cu,ulati)e 1he penalty for an o9ense
shall +e deter,ined on the +asis of his past record of
o9enses of any nature or the a+sence thereof 1he ,ore
ha+itual an o9ender has +een, the greater shall +e the
penalty for the latest o9ense 1hus, an e,ployee ,ay
+e dis,issed if the nu,+er of his past o9enses (arrants
such penalty in the Eudg,ent of ,anage,ent e)en if
each o9ense considered separately ,ay not (arrant
dis,issal ;a+itual o9enders or recidi)ists ha)e no place
in #A* 8n the other hand, due regard shall +e gi)en to
the length of ti,e +et(een co,,ission of indi)idual
o9enses to deter,ine (hether the e,ployeeTs conduct
,ay indicate occasional lapses -(hich ,ay ne)ertheless
re=uire sterner disciplinary action. or a pattern of
*a+or Ar+iter 3sa+el # 8rtiguerra handling the case called the parties to
a conference +ut they failed to appear at the scheduled date
3nterpreting such failure as a (ai)er of the partiesT right to present
e)idence, the la+or ar+iter considered the case su+,itted for decision
8n $o)e,+er F, 19'?, a decision (as rendered 7nding no +ad faith on
the part of #A* in adopting the Code and ruling that no unfair la+or
practice had +een co,,itted ;o(e)er, the ar+iter held that #A* (as
Snot totally fault freeS considering that (hile the issuance of rules and
regulations go)erning the conduct of e,ployees is a Slegiti,ate
,anage,ent prerogati)eS such rules and regulations ,ust ,eet the test
of Sreasona+leness, propriety and fairnessS "he found "ection 1 of the
Code afore=uoted as San all e,+racing and all enco,passing pro)ision
that ,a5es punisha+le any o9ense one can thin5 of in the co,panySC
(hile "ection F, li5e(ise =uoted a+o)e, is So+Eectiona+le for it )iolates
the rule against dou+le Eeopardy there+y ushering in t(o or ,ore
punish,ent for the sa,e ,isde,eanorS -pp &'-&9, Rollo.
1he la+or ar+iter also found that #A* Sfailed to pro)e that the ne( Code
(as a,ply circulatedS $oting that #A*Ts assertion that it had furnished
all its e,ployees copies of the Code is unsupported +y docu,entary
e)idence, she stated that such SfailureS on the part of #A* resulted in the
i,position of penalties on e,ployees (ho thought all the (hile that the
19?? Code (as still +eing follo(ed 1hus, the ar+iter concluded that
S-t.he phrase ignorance of the la( e<cuses no one fro, co,pliance
7nds application only after it has +een conclusi)ely sho(n that the la(
(as circulated to all the parties concerned and e9orts to disse,inate
infor,ation regarding the ne( la( ha)e +een e<erted -p &9, Rollo. "he
thereupon disposed2
H;I!IG8!I, pre,ises considered, respondent #A* is
here+y ordered as follo(s2
1 Gurnish all e,ployees (ith the ne( Code of :isciplineC
2 !econsider the cases of e,ployees ,eted (ith
penalties under the $e( Code of :iscipline and re,and
the sa,e for further hearingC and
& :iscuss (ith #A*IA the o+Eectiona+le pro)isions
speci7cally tac5led in the +ody of the decision
All other clai,s of the co,plainant union -is. [are]
here+y, dis,issed for lac5 of ,erit
"8 8!:I!I: -p 00, Rollo.
#A* appealed to the $*!C 8n August 19, 19'', the $*!C through
Co,,issioner Incarnacion, (ith #residing Co,,issioner Bonto-#ereD
and Co,,issioner 4aglaya concurring, found no e)idence of unfair
la+or practice co,,itted +y #A* and a>r,ed the dis,issal of #A*IATs
charge $onetheless, the $*!C ,ade the follo(ing o+ser)ations2
3ndeed, failure of ,anage,ent to discuss the pro)isions
of a conte,plated code of discipline (hich shall go)ern
the conduct of its e,ployees (ould result in the erosion
and deterioration of an other(ise har,onious and
s,ooth relationship +et(een the, as did happen in the
instant case 1here is no dispute that adoption of rules of
conduct or discipline is a prerogati)e of ,anage,ent
and is i,perati)e and essential if an industry, has to
sur)i)e in a co,petiti)e (orld But la+or cli,ate has
progressed, too 3n the #hilippine scene, at no ti,e in our
conte,porary history is the need for a cooperati)e,
supporti)e and s,ooth relationship +et(een la+or and
,anage,ent ,ore 5eenly felt if (e are to sur)i)e
econo,ically 4anage,ent can no longer e<clude la+or
in the deli+eration and adoption of rules and regulations
that (ill a9ect the,
1he co,plainant union in this case has the right to feel
isolated in the adoption of the $e( Code of :iscipline
1he Code of :iscipline in)ol)es security of tenure and
loss of e,ploy,ent U a property rightV 3t is ti,e that
,anage,ent realiDes that to attain e9ecti)eness in its
conduct rules, there should +e candidness and openness
+y 4anage,ent and participation +y the union,
representing its ,e,+ers 3n fact, our Constitution has
recogniDed the principle of Sshared responsi+ilityS
+et(een e,ployers and (or5ers and has li5e(ise
recogniDed the right of (or5ers to participate in Spolicy
and decision-,a5ing process a9ecting their rights S
1he latter pro)ision (as interpreted +y the Constitutional
Co,,issioners to ,ean participation in S,anage,entST
-!ecord of the Constitutional Co,,ission, /ol 33.
3n a sense, participation +y the union in the adoption of
the code if conduct could ha)e accelerated and
enhanced their feelings of +elonging and (ould ha)e
resulted in cooperation rather than resistance to the
Code 3n fact, la+or-,anage,ent cooperation is no( Sthe
thingS -pp &-0, $*!C :ecision 9 p 109, 8riginal
!espondent Co,,ission thereupon disposed2
H;I!IG8!I, pre,ises considered, (e ,odify the
appealed decision in the sense that the $e( Code of
:iscipline should +e re)ie(ed and discussed (ith
co,plainant union, particularly the disputed pro)isions
[] -1.hereafter, respondent is directed to furnish each
e,ployee (ith a copy of the appealed Code of
:iscipline 1he pending cases ad)erted to in the
appealed decision if still in the ar+itral le)el, should +e
reconsidered +y the respondent #hilippine Air *ines
8ther dispositions of the *a+or Ar+iter are sustained
"8 8!:I!I: -p %, $*!C :ecision.
#A* then 7led the instant petition for certiorari charging pu+lic
respondents (ith gra)e a+use of discretion in2 -a. directing #A* Sto share
its ,anage,ent prerogati)e of for,ulating a Code of :isciplineSC -+.
engaging in =uasi-Eudicial legislation in ordering #A* to share said
prerogati)e (ith the unionC -c. deciding +eyond the issue of unfair la+or
practice, and -d. re=uiring #A* to reconsider pending cases still in the
ar+itral le)el -p F, #etitionC p ',Rollo.
As stated a+o)e, the #rincipal issue su+,itted for resolution in the
instant petition is (hether ,anage,ent ,ay +e co,pelled to share (ith
the union or its e,ployees its prerogati)e of for,ulating a code of
#A* asserts that (hen it re)ised its Code on 4arch 1%, 19'%, there (as
no la( (hich ,andated the sharing of responsi+ility therefor +et(een
e,ployer and e,ployee
3ndeed, it (as only on 4arch 2, 19'9, (ith the appro)al of !epu+lic Act
$o ?F1%, a,ending Article 211 of the *a+or Code, that the la( e<plicitly
considered it a "tate policy S-t.o ensure the participation of (or5ers in
decision and policy-,a5ing processes a9ecting the rights, duties and
(elfareS ;o(e)er, e)en in the a+sence of said clear pro)ision of la(,
the e<ercise of ,anage,ent prerogati)es (as ne)er considered
+oundless 1hus, in Cru& vs. %edina -1FF "C!A %?% [19'9]. it (as held
that ,anage,entTs prerogati)es ,ust +e (ithout a+use of discretion
3n San %i*uel +re,ery Sales -orce Union .'T"W/0 vs. /ple -1F0 "C!A
2% [19'9]., (e upheld the co,panyTs right to i,ple,ent a ne( syste,
of distri+uting its products, +ut ga)e the follo(ing ca)eat2
"o long as a co,panyTs ,anage,ent prerogati)es are
e<ercised in good faith for the ad)ance,ent of the
e,ployerTs interest and not for the purpose of defeating
or circu,)enting the rights of the e,ployees under
special la(s or under )alid agree,ents, this Court (ill
uphold the,
-at p 2'.
All this points to the conclusion that the e<ercise of ,anagerial
prerogati)es is not unli,ited 3t is circu,scri+ed +y li,itations found in
la(, a collecti)e +argaining agree,ent, or the general principles of fair
play and Eustice -University of Sto. To!as vs. NLRC, 190 "C!A F%'
[1990]. 4oreo)er, as enunciated in #bbott Laboratories .'$il.01 vs.
NLRC -1%0 F1& [19'F]., it ,ust +e duly esta+lished that the prerogati)e
+eing in)o5ed is clearly a ,anagerial one
A close scrutiny of the o+Eectiona+le pro)isions of the Code re)eals that
they are not purely +usiness-oriented nor do they concern the
,anage,ent aspect of the +usiness of the co,pany as in the San
%i*uel case 1he pro)isions of the Code clearly ha)e repercusions on the
e,ployeeTs right to security of tenure 1he i,ple,entation of the
pro)isions ,ay result in the depri)ation of an e,ployeeTs ,eans of
li)elihood (hich, as correctly pointed out +y the $*!C, is a property right
-Callanta1 vs Carnation '$ilippines1 2nc, 10% "C!A 2?' [19'?]. 3n )ie(
of these aspects of the case (hich +order on infringe,ent of
constitutional rights, (e ,ust uphold the constitutional re=uire,ents for
the protection of la+or and the pro,otion of social Eustice, for these
factors, according to Justice 3sagani CruD, tilt Sthe scales of Eustice (hen
there is dou+t, in fa)or of the (or5erS -!ployees #ssociation of t$e
'$ilippine #!erican Life 2nsurance Co!pany vs. NLRC, 199 "C!A ?2'
[1991] ?&%.
/erily, a line ,ust +e dra(n +et(een ,anage,ent prerogati)es
regarding +usiness operations per se and those (hich a9ect the rights of
the e,ployees 3n treating the latter, ,anage,ent should see to it that
its e,ployees are at least properly infor,ed of its decisions or ,odes
action #A* asserts that all its e,ployees ha)e +een furnished copies of
the Code #u+lic respondents found to the contrary, (hich 7nding, to say
the least is entitled to great respect
#A* posits the )ie( that +y signing the 19'9-1991 collecti)e +argaining
agree,ent, on June 2F, 1990, #A*IA in e9ect, recogniDed #A*Ts
Se<clusi)e right to ,a5e and enforce co,pany rules and regulations to
carry out the functions of ,anage,ent ,it$out ha)ing to discuss the
sa,e (ith #A*IA and ,uch less, o+tain the latterTsconfor!ity t$eretoS
-pp 11-12, #etitionerTs 4e,orandu,C pp 1'0-1'1, Rollo. #etitionerTs
)ie( is +ased on the follo(ing pro)ision of the agree,ent2
1he Association recogniDes the right of the Co,pany to
deter,ine ,atters of ,anage,ent it policy and
Co,pany operations and to direct its ,anpo(er
4anage,ent of the Co,pany includes the right to
organiDe, plan, direct and control operations, to hire,
assign e,ployees to (or5, transfer e,ployees fro, one
depart,ent, to another, to pro,ote, de,ote, discipline,
suspend or discharge e,ployees for Eust causeC to lay-o9
e,ployees for )alid and legal causes, to introduce ne(
or i,pro)ed ,ethods or facilities or to change e<isting
,ethods or facilities and the right to ,a5e and enforce
Co,pany rules and regulations to carry out the functions
of ,anage,ent
1he e<ercise +y ,anage,ent of its prerogati)e shall +e
done in a Eust reasona+le, hu,ane andMor la(ful ,anner
"uch pro)ision in the collecti)e +argaining agree,ent ,ay not +e
interpreted as cession of e,ployeesT rights to participate in the
deli+eration of ,atters (hich ,ay a9ect their rights and the for,ulation
of policies relati)e thereto And one such ,ater is the for,ulation of a
code of discipline
3ndeed, industrial peace cannot +e achie)ed if the e,ployees are denied
their Eust participation in the discussion of ,atters a9ecting their rights
1hus, e)en +efore Article 211 of the la+or Code -#: 002. (as a,ended
+y !epu+lic Act $o ?F1%, it (as already declared a policy of the "tate,
S-d. 1o pro,ote the enlighten,ent of (or5ers concerning their rights
and o+ligations as e,ployeesS 1his (as, of course, a,pli7ed +y
!epu+lic Act $o ?F1% (hen it decreed the Sparticipation of (or5ers in
decision and policy ,a5ing processes a9ecting their rights, duties and
(elfareS #A*Ts position that it cannot +e saddled (ith the So+ligationS of
sharing ,anage,ent prerogati)es as during the for,ulation of the
Code, !epu+lic Act $o ?F1% had not yet +een enacted -#etitionerTs
4e,orandu,, p 00C Rollo, p 212., cannot thus +e sustained Hhile
such So+ligationS (as not yet founded in la( (hen the Code (as
for,ulated, the attain,ent of a har,onious la+or-,anage,ent
relationship and the then already e<isting state policy of enlightening
(or5ers concerning their rights as e,ployees de,and no less than the
o+ser)ance of transparency in ,anagerial ,o)es a9ecting e,ployeesT
#etitionerTs assertion that it needed the i,ple,entation of a ne( Code
of :iscipline considering the nature of its +usiness cannot +e
o)ere,phasiDed 3n fact, its +eing a local ,onopoly in the +usiness
de,ands the ,ost stringent of ,easures to attain safe tra)el for its
patrons $onetheless, (hate)er disciplinary ,easures are adopted
cannot +e properly i,ple,ented in the a+sence of full cooperation of
the e,ployees "uch cooperation cannot +e attained if the e,ployees
are resti)e on account, of their +eing left out in the deter,ination of
cardinal and funda,ental ,atters a9ecting their e,ploy,ent
H;I!IG8!I, the petition is :3"43""I: and the =uestioned decision
AGG3!4I: $o special pronounce,ent is ,ade as to costs
"8 8!:I!I:
[G.R. No. 11=8;6. #e62e-ber 7, 1<<8]
"NIE$ :OR?ER# OF !E P!ILIPPINE# &#MFM'":P(, 32.
o@0er. a)* -e-ber.,petitioners, vs. NAIONAL LA%OR
$ E C I # I O N
1he issue in this petition for certiorari is (hether or not an e,ployer
co,,itted an unfair la+or practice +y +argaining in +ad faith and
discri,inating against its e,ployees 1he charge arose fro, the
e,ployer@s refusal to grant across-the-+oard increases to its e,ployees
in i,ple,enting Hage 8rders $os 01 and 02 of the !egional 1ripartite
Hages and #roducti)ity Board of the $ational Capital !egion -!1H#B-
$C!. "uch refusal (as aggra)ated +y the fact that prior to the issuance
of said (age orders, the e,ployer allegedly pro,ised at the collecti)e
+argaining conferences to i,ple,ent any go)ern,ent-,andated (age
increases on an across-the-+oard +asis
#etitioner "a,ahang 4anggaga(a sa 1op Gor, 4anufacturing N
6nited Hor5ers of the #hilippines -"41G4. (as the certi7ed collecti)e
+argaining representati)e of all regular ran5 and 7le e,ployees of
pri)ate respondent 1op Gor, 4anufacturing #hilippines, 3nc At the
collecti)e +argaining negotiation held at the 4il5y Hay !estaurant in
4a5ati, 4etro 4anila on Ge+ruary 2F, 1990, the parties agreed to discuss
unresol)ed econo,ic issues According to the ,inutes of the ,eeting,
Article /33 of the collecti)e +argaining agree,ent (as discussed 1he
follo(ing appear in said 4inutes2
AA!13C*I /33 Hages
"ection 1 N :efer N
"ection 2 "tatus =uo
"ection & 6nion proposed that any future (age increase gi)en +y the
go)ern,ent should +e i,ple,ented +y the co,pany across-the-+oard
or non-conditional
4anage,ent re=uested the union to retain this pro)ision since their
sincerity (as already pro)en (hen the #2%00 (age increase (as
granted across-the-+oard 1he union ac5no(ledges ,anage,ent@s
sincerity +ut they are (orried that in case there is a ne( set of
,anage,ent, they can Eust sho( their CBA 1he union decided to defer
this pro)isionB
3n their Eoint a>da)it dated January &0, 1992,
union ,e,+ers
"al)e * Barnes, Iulisa 4endoDa, *ourdes Bar+ero and Concesa 3+aWeD
a>r,ed that at the su+se=uent collecti)e +argaining negotiations, the
union insisted on the incorporation in the collecti)e +argaining
agree,ent -CBA. of the union proposal on Aauto,atic across-the-+oard
(age increaseB 1hey added that2
A11 8n the strength of the representation of the negotiating panel
of the co,pany and the a+o)e underta5ingMpro,ise ,ade +y its
negotiating panel, our union agreed to drop said proposal relying on the
underta5ings ,ade +y the o>cials of the co,pany (ho negotiated (ith
us, na,ely, 4r Hillia, !eynolds, 4r "a,uel Hong and 4rs !e,edios
GeliDardo Also, in the past years, the co,pany has granted to us
go)ern,ent ,andated (age increases on across-the-+oard +asisB
8n 8cto+er 1%, 1990, the !1H#B-$C! issued Hage 8rder $o 01
granting an increase of #1F00 per day in the salary of (or5ers 1his
(as follo(ed +y Hage 8rder $o 02 dated :ece,+er 20, 1990 pro)iding
for a #1200 daily increase in salary
As e<pected, the union re=uested the i,ple,entation of said (age
orders ;o(e)er, they de,anded that the increase +e on an across-the-
+oard +asis #ri)ate respondent refused to accede to that
de,and 3nstead, it i,ple,ented a sche,e of increases purportedly to
a)oid (age distortion 1hus, pri)ate respondent granted the #1F00
increase under Hage 8rder $o 01 to (or5ersMe,ployees recei)ing
salary of #12%00 per day and +elo( 1he #1200 increase ,andated +y
Hage 8rder $o 02 (as granted to those recei)ing the salary of #10000
per day and +elo( Gor e,ployees recei)ing salary higher than #12%00
or #10000 per day, pri)ate respondent granted an escalated increase
ranging fro, #?99 to #10&0 and fro, #?00 to #1000, respecti)ely
8n 8cto+er 20, 1991, the union, through its legal counsel, (rote
pri)ate respondent a letter de,anding that it should Aful7ll its pledge of
sincerity to the union +y granting an across-the-+oard (age increases
-sic. to all e,ployees under the (age ordersB 1he union reiterated that
it had agreed to Aretain the old pro)ision of CBAB on the strength of
pri)ate respondent@s Apro,ise and assuranceB of an across-the-+oard
salary increase should the go)ern,ent ,andate salary increases
"e)eral conferences +et(een the parties not(ithstanding, pri)ate
respondent ada,antly ,aintained its position on the salary increases it
had granted that (ere purportedly designed to a)oid (age distortion
Conse=uently, the union 7led a co,plaint (ith the $C! $*!C
alleging that pri)ate respondent@s act of Areneging on its
underta5ingMpro,ise clearly constitutes an act of unfair la+or practice
through +argaining in +ad faithB 3t charged pri)ate respondent (ith
acts of unfair la+or practices or )iolation of Article 20F of the *a+or
Code, as a,ended, speci7cally A+argaining in +ad faith,B and prayed
that it +e a(arded actual, ,oral and e<e,plary da,ages
3n its
position paper, the union added that it (as charging pri)ate respondent
(ith A)iolation of Article 100 of the *a+or CodeB
#ri)ate respondent, on the other hand, contended that in
i,ple,enting Hage 8rders $os 01 and 02, it had a)oided Athe
e<istence of a (age distortionB that (ould arise fro, such
i,ple,entation 3t e,phasiDed that only Aafter a reasona+le length of
ti,e fro, the i,ple,entationB of the (age orders Athat the union
surprisingly raised the =uestion that the co,pany should ha)e
i,ple,ented said (age orders on an across-the-+oard +asisB 3t
asserted that there (as no agree,ent to the e9ect that future (age
increases ,andated +y the go)ern,ent should +e i,ple,ented on an
across-the-+oard +asis 8ther(ise, that agree,ent (ould ha)e +een
incorporated and e<pressly stipulated in the CBA 3t =uoted the
pro)ision of the CBA that rePects the parties@ intention to Afully set forthB
therein all their agree,ents that had +een arri)ed at after negotiations
that ga)e the parties Aunli,ited right and opportunity to ,a5e de,ands
and proposals (ith respect to any su+Eect or ,atter not re,o)ed +y la(
fro, the area of collecti)e +argainingB 1he sa,e CBA pro)ided that
during its e9ecti)ity, the parties Aeach )oluntarily and un=uali7edly
(ai)es the right, and each agrees that the other shall not +e o+ligated,
to +argain collecti)ely, (ith respect to any su+Eect or ,atter not
speci7cally referred to or co)ered +y this Agree,ent, e)en though such
su+Eect or ,atter ,ay not ha)e +een (ithin the 5no(ledge or
conte,plation of either or +oth of the parties at the ti,e they
negotiated or signed this Agree,entB
8n 4arch 11, 1992, *a+or Ar+iter Jose G de /era rendered a
decision dis,issing the co,plaint for lac5 of ,erit
;e considered t(o
,ain issues in the case2 -a. (hether or not respondents are guilty of
unfair la+or practice, and -+. (hether or not the respondents are lia+le
to i,ple,ent Hage 8rders $os 01 and 02 on an across-the-+oard
+asis Ginding no +asis to rule in the a>r,ati)e on +oth issues, he
e<plained as follo(s2
A1he charge of +argaining in +ad faith that the co,plainant union
attri+utes to the respondents is +ereft of any certitude inas,uch as
+ased on the co,plainant union@s o(n ad,ission, the latter )acillated
on its o(n proposal to adopt an across-the-+oard stand or future (age
increases 3n fact, the union ac5no(ledges the ,anage,ent@s sincerity
(hen the latter allegedly i,ple,ented !epu+lic Act ?F2F on an across-
the-+oard +asis 1hat such union proposal (as not adopted in the
e<isting CBA (as due to the fact that it (as the union itself (hich
decided for its defer,ent 3t is, therefore, ,isleading to clai, that the
,anage,ent undertoo5Mpro,ised to i,ple,ent future (age increases
on an across-the-+oard +asis (hen as the e)idence sho(s it (as the
union (ho as5ed for the defer,ent of its o(n proposal to that e9ect
1he alleged discri,ination in the i,ple,entation of the su+Eect (age
orders does not inspire +elief at all (here the (age orders the,sel)es
do not allo( the grant of (age increases on an across-the-+oard +asis
1hat there (ere e,ployees (ho (ere granted the full e<tent of the
increase authoriDed and so,e others (ho recei)ed less and still others
(ho did not recei)e any increase at all, (ould not ripen into (hat the
co,plainants ter,ed as discri,ination 1hat the i,ple,entation of the
su+Eect (age orders resulted into an une)en i,ple,entation of (age
increases is Eusti7ed under the la( to pre)ent any (age distortion Hhat
the respondents did under the circu,stances in order to deter an
e)entual (age distortion (ithout any ar+itral proceedings is certainly
1he alleged )iolation of Article 100 of the *a+or Code, as a,ended, as
(ell as Article K/33, "ection F of the e<isting CBA as herein earlier =uoted
is li5e(ise found +y this Branch to ha)e no +asis in fact and in la( $o
+ene7ts or pri)ileges pre)iously enEoyed +y the e,ployees (ere
(ithdra(n as a result of the i,ple,entation of the su+Eect orders
*i5e(ise, the alleged co,pany practice of i,ple,enting (age increases
declared +y the go)ern,ent on an across-the-+oard +asis has not +een
duly esta+lished +y the co,plainants@ e)idence 1he co,plainants
asserted that the co,pany i,ple,ented !epu+lic Act $o ?F2F (hich
granted a (age increase of #2%00 e9ecti)e July 1, 19'9 on an across-
the-+oard +asis Granting that the sa,e is true, such isolated single act
that respondents adopted (ould de7nitely not ripen into a co,pany
practice 3t has +een said that Xa sparro( or t(o returning to Capistrano
does not a su,,er ,a5e@
Ginally, on the second issue of (hether or not the e,ployees of the
respondents are entitled to an across-the-+oard (age increase pursuant
to Hage 8rders $os 01 and 02, in the face of the a+o)e discussion as
(ell as our 7nding that the respondents correctly applied the la( on
(age increases, this Branch rules in the negati)e
*i5e(ise, for (ant of factual +asis and under the circu,stances (here
our 7ndings a+o)e are ad)erse to the co,plainants, their prayer for
,oral and e<e,plary da,ages and attorney@s fees ,ay not +e grantedB
$ot satis7ed, petitioner appealed to the $*!C that, in turn,
pro,ulgated the assailed !esolution of April 29, 199&
dis,issing the
appeal for lac5 of ,erit "till dissatis7ed, petitioner sought
reconsideration (hich, ho(e)er, (as denied +y the $*!C in the
!esolution dated January 1F, 1990 ;ence, the instant petition
for certiorari contending that2
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As the Court sees it, the pi)otal issues in this petition can +e
reduced into t(o, to (it2 -a. (hether or not pri)ate respondent
co,,itted an unfair la+or practice in its refusal to grant across-the-
+oard (age increases in i,ple,enting Hage 8rders $os 01 and 02, and
-+. (hether or not there (as a signi7cant (age distortion of the (age
structure in pri)ate respondent as a result of the ,anner +y (hich said
(age orders (ere i,ple,ented
Hith respect to the 7rst issue, petitioner union anchors its
argu,ents on the alleged co,,it,ent of pri)ate respondent to grant an
auto,atic across-the-+oard (age increase in the e)ent that a statutory
or legislated (age increase is pro,ulgated 3t cites as +asis therefor, the
afore=uoted portion of the 4inutes of the collecti)e +argaining
negotiation on Ge+ruary 2F, 1990 regarding (ages, arguing additionally
that said 4inutes for,s part of the entire agree,ent +et(een the
1he +asic pre,ise of this argu,ent is de7nitely untena+le 1o start
(ith, if there (as indeed a pro,ise or underta5ing on the part of pri)ate
respondent to o+ligate itself to grant an auto,atic across-the-+oard
(age increase, petitioner union should ha)e re=uested or de,anded
that such Apro,ise or underta5ingB +e incorporated in the CBA After
all, petitioner union has the ,eans under the la( to co,pel pri)ate
respondent to incorporate this speci7c econo,ic proposal in the CBA 3t
could ha)e in)o5ed Article 2%2 of the *a+or Code de7ning Aduty to
+argain,B thus, the duty includes Ae<ecuting a contract incorporating
such agree,ents if re=uested +y either partyB #etitioner union@s
assertion that it had insisted on the incorporation of the sa,e proposal
,ay ha)e a factual +asis considering the allegations in the
afore,entioned Eoint a>da)it of its ,e,+ers ;o(e)er, Article 2%2 also
states that the duty to +argain Adoes not co,pel any party to agree to a
proposal or ,a5e any concessionB 1hus, petitioner union ,ay not
)alidly clai, that the proposal e,+odied in the 4inutes of the
negotiation for,s part of the CBA that it 7nally entered into (ith pri)ate
1he CBA is the la( +et(een the contracting parties
N the
collecti)e +argaining representati)e and the e,ployer-
co,pany Co,pliance (ith a CBA is ,andated +y the e<pressed policy
to gi)e protection to la+or
3n the sa,e )ein, CBA pro)isions should +e
Aconstrued li+erally rather than narro(ly and technically, and the courts
,ust place a practical and realistic construction upon it, gi)ing due
consideration to the conte<t in (hich it is negotiated and purpose (hich
it is intended to ser)eS
1his is founded on the dictu! that a CBA is
not an ordinary contract +ut one i,pressed (ith pu+lic interest
goes (ithout saying, ho(e)er, that only pro)isions e,+odied in the CBA
should +e so interpreted and co,plied (ith Hhere a proposal raised +y
a contracting party does not 7nd print in the CBA,
it is not a part
thereof and the proponent has no clai, (hatsoe)er to its
;ence, petitioner union@s contention that the 4inutes of the
collecti)e +argaining negotiation ,eeting for,s part of the entire
agree,ent is pointless 1he 4inutes rePects the proceedings and
discussions underta5en in the process of +argaining for (or5er +ene7ts
in the sa,e (ay that the ,inutes of court proceedings sho( (hat
transpired therein
At the negotiations, it is +ut natural for +oth
,anage,ent and la+or to adopt positions or ,a5e de,ands and o9er
proposals and counter-proposals ;o(e)er, nothing is considered 7nal
until the parties ha)e reached an agree,ent 3n fact, one of
,anage,ent@s usual negotiation strategies is to A< < < agree tentati)ely
as you go along (ith the understanding that nothing is +inding until the
entire agree,ent is reachedB
3f indeed pri)ate
respondent pro!ised to continue (ith the practice of granting across-
the-+oard salary increases ordered +y the go)ern,ent,
such pro!ise could only +e de,anda+le in la( if incorporated in the
4oreo)er, +y ,a5ing such pro!ise1 pri)ate respondent ,ay not +e
considered in +ad faith or at the )ery least, resorting to the sche,e of
feigning to underta5e the negotiation proceedings through e,pty
pro,ises As earlier stated, petitioner union had, under the la(, the right
and the opportunity to insist on the foreseeable ful7ll,ent of the pri)ate
respondent@s pro,ise +y de,anding its incorporation in the
CBA Because the proposal (as ne)er e,+odied in the CBA, the pro,ise
has re,ained Eust that, a pro,ise, the i,ple,entation of (hich cannot
+e )alidly de,anded under the la(
#etitioner@s reliance on this Court@s pronounce,ents
in Kiok Loy
is, therefore, ,isplaced 3n that case, the e,ployer refused to
+argain (ith the collecti)e +argaining representati)e, ignoring all notices
for negotiations and re=uests for counter proposals that the union had to
resort to conciliation proceedings 3n that case, the Court opined that
A-a. Co,pany@s refusal to ,a5e counter-proposal, if considered in
relation to the entire +argaining process, !ay indicate bad fait$ and this
is specially true (here the 6nion@s re=uest for a counter-proposal is left
unans(eredB Considering the facts of that case, the Court concluded
that the co,pany (as Aun(illing to negotiate and reach an agree,ent
(ith the 6nionB
3n the case at +ench, ho(e)er, petitioner union does not deny that
discussion on its proposal that all go)ern,ent-,andated salary
increases should +e on an across-the-+oard +asis (as Adeferred,B
purportedly +ecause it relied upon the Aunderta5ingB of the negotiating
panel of pri)ate respondent
$either does petitioner union deny the
fact that Athere is no pro)ision of the 1990 CBA containing a stipulation
that the co,pany (ill grant across-the-+oard to its e,ployees the
,andated (age increaseB 1hey si,ply assert that pri)ate respondent
co,,itted Aacts of unfair la+or practices +y )irtue of its contractual
co!!it!ent !ade durin* t$e collective bar*ainin* process.B
,ere fact, ho(e)er, that the proposal in =uestion (as not included in
the CBA indicates that no contractual co!!it!ent thereon (as e)er
,ade +y pri)ate respondent as no agree,ent had +een arri)ed at +y the
parties 1hus2
A8+)iously the purpose of collecti)e +argaining is the reaching of an
agree,ent resulting in a contract +inding on the partiesC +ut the failure
to reach an agree,ent after negotiations continued for a reasona+le
period does not esta+lish a lac5 of good faith 1he statutes in)ite and
conte,plate a collecti)e +argaining contract, +ut they do not co,pel
one 1he duty to +argain does not include the o+ligation to reach an
agree,ent < < <B
Hith the e<ecution of the CBA, +ad faith +argaining can no longer
+e i,puted upon any of the parties thereto All pro)isions in the CBA
are supposed to ha)e +een Eointly and )oluntarily incorporated therein
+y the parties 1his is not a case (here pri)ate respondent e<hi+ited an
indi9erent attitude to(ards collecti)e +argaining +ecause the
negotiations (ere not the unilateral acti)ity of petitioner union 1he CBA
is proof enough that pri)ate respondent e<erted Areasona+le e9ort at
good faith +argainingB
3ndeed, the ada,ant insistence on a +argaining position to the
point (here the negotiations reach an i,passe does not esta+lish +ad
faith $either can +ad faith +e inferred fro, a party@s insistence on the
inclusion of a particular su+stanti)e pro)ision unless it concerns tri)ial
,atters or is o+)iously intolera+le
A1he =uestion as to (hat are ,andatory and (hat are ,erely per,issi)e
su+Eects of collecti)e +argaining is of signi7cance on the right of a party
to insist on his position to the point of stale,ate A party ,ay refuse to
enter into a collecti)e +argaining contract unless it includes a desired
pro)ision as to a ,atter (hich is a ,andatory su+Eect of collecti)e
+argainingC +ut a refusal to contract unless the agree,ent co)ers a
,atter (hich is not a ,andatory su+Eect is in su+stance a refusal to
+argain a+out ,atters (hich are ,andatory su+Eects of collecti)e
+argainingC and it is no ans(er to the charge of refusal to +argain in
good faith that the insistence on the disputed clause (as not the sole
cause of the failure to agree or that agree,ent (as not reached (ith
respect to other disputed clausesS
8n account of the i,portance of the econo,ic issue proposed +y
petitioner union, it could ha)e refused to +argain and to enter into a CBA
(ith pri)ate respondent 8n the other hand, pri)ate respondent@s 7r,
stand against the proposal did not ,ean that it (as +argaining in +ad
faith 3t had the right Ato insist on -its. position to the point of
stale,ateB 8n the part of petitioner union, the i,portance of its
proposal da(ned on it only after the (age orders (ere issued after the
CBA had +een entered into 3ndeed, fro, the facts of this case, the
charge of +ad faith +argaining on the part of pri)ate respondent (as
nothing +ut a +elated reaction to the i,ple,entation of the (age orders
that pri)ate respondent ,ade in accordance (ith la( 3n other (ords,
petitioner union har+ored the notion that its ,e,+ers and the other
e,ployees could ha)e had a +etter deal in ter,s of (age increases had
it relentlessly pursued the incorporation in the CBA of its proposal 1he
ine)ita+le conclusion is that pri)ate respondent did not co,,it the
unfair la+or practices of +argaining in +ad faith and discri,inating
against its e,ployees for i,ple,enting the (age orders pursuant to la(
1he Court li5e(ise 7nds un,eritorious petitioner union@s contention
that +y its failure to grant across-the-+oard (age increases, pri)ate
respondent )iolated the pro)isions of "ection %, Article /33 of the e<isting
as (ell as Article 100 of the *a+or Code 1he CBA pro)ision
A"ection % 1he C84#A$J agrees to co,ply (ith all the applica+le
pro)isions of the *a+or Code of the #hilippines, as a,ended, and all
other la(s, decrees, orders, instructions, Eurisprudence, rules and
regulations a9ecting la+orB
Article 100 of the *a+or Code on prohi+ition against eli,ination or
di,inution of +ene7ts pro)ides that A-n.othing in this Boo5 shall +e
construed to eli,inate or in any (ay di,inish supple,ents, or other
e,ployee +ene7ts +eing enEoyed at the ti,e of pro,ulgation of this
He agree (ith the *a+or Ar+iter and the $*!C that no +ene7ts or
pri)ileges pre)iously enEoyed +y petitioner union and the other
e,ployees (ere (ithdra(n as a result of the ,anner +y (hich pri)ate
respondent i,ple,ented the (age orders Granted that pri)ate
respondent had granted an across-the-+oard increase pursuant to
!epu+lic Act $o ?F2F, that single instance ,ay not +e considered an
esta+lished co,pany practice #etitioner union@s argu,ent in this regard
is actually tied up (ith its clai, that the i,ple,entation of Hage 8rders
$os 01 and 02 +y pri)ate respondent resulted in (age distortion
1he issue of (hether or not a (age distortion e<ists is a =uestion of
that is (ithin the Eurisdiction of the =uasi-Eudicial tri+unals
+elo( Gactual 7ndings of ad,inistrati)e agencies are accorded respect
and e)en 7nality in this Court if they are supported +y su+stantial
1hus, in %etropolitan +ank and Trust Co!pany1 2nc. v.
NLRC1 the Court said2
A1he issue of (hether or not a (age distortion e<ists as a conse=uence
of the grant of a (age increase to certain e,ployees, (e agree, is, +y
and large, a =uestion of fact the deter,ination of (hich is the statutory
function of the $*!C Judicial re)ie( of la+or cases, (e ,ay add, does
not go +eyond the e)aluation of the su>ciency of the e)idence upon
(hich the la+or o>cials@ 7ndings rest As such, the factual 7ndings of the
$*!C are generally accorded not only respect +ut also 7nality pro)ided
that its decisions are supported +y su+stantial e)idence and de)oid of
any taint of unfairness or ar+itrariness Hhen, ho(e)er, the ,e,+ers of
the sa,e la+or tri+unal are not in accord on those aspects of a case, as
in this case, this Court is (ell cautioned not to +e as so conscious in
passing upon the su>ciency of the e)idence, let alone the conclusions
deri)ed therefro,B
6nli5e in a+o)e-cited case (here the :ecision of the $*!C (as not
unani,ous, the $*!C :ecision in this case (hich (as penned +y the
dissenter in that case, #residing Co,,issioner Idna Bonto-#ereD,
unani,ously ruled that no (age distortions ,arred pri)ate respondent@s
i,ple,entation of the (age orders 1he $*!C said2
A8n the issue of (age distortion, (e are satis7ed that there (as a
,eaningful i,ple,entation of Hage 8rders $os 01 and 02 1his
de+un5s the clai, that there (as (age distortion as could +e sho(n +y
the ite,iDed (ages i,ple,entation =uoted a+o)e 3t should +e noted
that this ite,iDation has not +een successfully tra)ersed +y the
appellants < < <B
1he $*!C then =uoted the la+or ar+iter@s ruling on (age distortion
He 7nd no reason to depart fro, the conclusions of +oth the la+or
ar+iter and the $*!C 3t is apropos to note, ,oreo)er, that petitioner@s
contention on the issue of (age distortion and the resulting allegation of
discri,ination against the pri)ate respondent@s e,ployees are anchored
on its du+ious position that pri)ate respondent@s pro,ise to grant an
across-the-+oard increase in go)ern,ent-,andated salary +ene7ts
rePected in the 4inutes of the negotiation is an enforcea+le part of the
3n the resolution of la+or cases, this Court has al(ays +een guided
+y the "tate policy enshrined in the Constitution that the rights of
(or5ers and the pro,otion of their (elfare shall +e protected
Court is li5e(ise guided +y the goal of attaining industrial peace +y the
proper application of the la( 3t cannot fa)or one party, +e it la+or or
,anage,ent, in arri)ing at a Eust solution to a contro)ersy if the party
has no )alid support to its clai,s 3t is not (ithin this Court@s po(er to
rule +eyond the a,+it of the la(
:!EREFORE, the instant petition for certiorari is
here+y $I#MI##E$ and the =uestioned !esolutions of the
$*!C AFFIRME$ $o costs