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election. St. James argued that those who voted were not its
regular employees but construction workers of an independent - The motor pool, construction and transportation
contractor, Architect Bacoy.
employees of the Tandang Sora campus had 149
qualified voters at the time of the certification
Med-Arbiter Falconitin: the 84 voters were no longer working at election. Hence, the 149 qualified voters should be used
St. James and that since the construction projects have ceased, to determine the existence of a quorum. Since a majority
some of the workers were no longer entitled to vote in the or 84 out of the 149 qualified voters cast their votes, a
certification election. Even if the 84 workers were to be included quorum existed in the certification election.
in the 179 rank and file employees of St. James, the total
number of voters would be 263. Thus, the 84 votes cast would
not be sufficient to constitute a majority of all eligible voters to DISPOSITION Affirm CA Decision and Resolution.
have a valid certification election.
Petition denied.
Samahang Manggagawa appealed to the Secretary of Labor.
DOLE reversed the ruling of Med-Arbiter. CA dismissed the St.
James petition and MFR.
ISSUES
WON the formation of the labor union and the certification
election were valid.
HELD
- YES. The 84 workers were employees of St. James and the
Architect was only a labor-only contractor. The certification
election is valid. (Section 13, Rule XII, Book V of the Omnibus
1
Rules Implementing the Labor Code ).
- St. James has five campuses. The members of Samahang
Manggagawa are employees in the Tandang Sora
campus. Under its constitution and by-laws, Samahang
Manggagawa seeks to represent the motor pool, construction
and transportation employees of the Tandang Sora campus.
Thus, the computation of the quorum should be based on the
rank and file motor pool, construction and transportation
employees of the Tandang Sora campus and not on all the
employees in St. James five campuses.
Section 2, Rule XII, Book V of the Omnibus Rules provides:
Section 2. Qualification of voters; inclusion-exclusion
proceedings. All employees who are members of the
appropriate bargaining unit sought to be represented by the
petitioner at the time of the certification or consent election
shall be qualified to vote. A dismissed employee whose
dismissal is being contested in a pending case shall be allowed
to vote in the election.
In case of disagreement over the voters list or over the
eligibility of voters, all contested voters shall be allowed to
vote. However, their votes shall be segregated and sealed in
individual envelopes in accordance with Section 9 of these
Rules.
Section 13. Proclamation and certification of results by election officer; when proper.
Upon completion of the canvass there being a valid election, the election officer shall
proclaim and certify as winner the union which obtained a majority of the valid votes cast
under any of the following conditions:
1

a) No protest had been filed or, even if one was filed, the same was not perfected
within the five-day period for perfection of the protest;
b) No challenge of eligibility issue was raised or even if one was raised, the resolution
of the same will not materially change the result.
For this purpose, the election officer shall immediately issue the corresponding
certification, copy furnished all parties, which shall form part of the records of the
case. The winning union shall have the rights, privileges and obligations of a duly
certified collective bargaining representative from the time the certification is
issued. The proclamation and certification so issued shall not be appealable.

Part 7
Collective bargaining

PROCESS, PROCEDURES AND ISSUES

7.01 GENERAL CONCEPTS
1. POLICY DECLARATION

ART XIII, 1987 CONSTITUTION

LABOR
Section 3. The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They
shall also participate in policy and decision-making
processes affecting their rights and benefits as may be
provided
by
law.
The State shall promote the principle of shared responsibility
between workers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation,
and shall enforce their mutual compliance therewith to foster
industrial
peace.
The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in
the fruits of production and the right of enterprises to
reasonable returns to investments, and to expansion and
growth.

ART. 211. Declaration of Policy. - A. It is the policy of the State:

(a) To promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration,
mediation and conciliation, as modes of settling labor or industrial
disputes;

KIOK LOY VS NLRC (PAMBANSANG KILUSAN

NG PAGGAWA)
141 SCRA 179

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CUEVAS: January 22, 1986

NATURE: Petition for certiorari to annul the decision of the National
Labor Relations Commission
FACTS:
- In a certification election held on October 3, 1978, the Pambansang
Kilusang Paggawa (Union for short) was subsequently certified in a
resolution dated November 29, 1978 by the Bureau of Labor Relations
as the sole and exclusive bargaining agent of the rank-and-file
employees of Sweden Ice Cream Plant (Company for short). The
Company's motion for reconsideration of the said resolution was denied
on January 25, 1978.
- December 7, 1978, the Union furnished the Company with two copies
of its proposed collective bargaining agreement. It also requested the
Company for its counter proposals. Both requests were ignored and
remained unacted upon by the Company.
- The Union, on February 14, 1979, filed a "Notice of Strike", with the
Bureau of Labor Relations (BLR) on ground of unresolved economic
issues in collective bargaining.
- Conciliation proceedings then followed during the thirty-day statutory
cooling-off period.
- The Bureau of Labor Relations to certify the case to the National
Labor Relations Commission for compulsory arbitration.
- The labor arbiter set the initial hearing for April 29, 1979. For failure
however, of the parties to submit their respective position papers as
required, the said hearing was cancelled and reset to another date.
- The Union submitted its position paper.
- On July 20, 1979, the National Labor Relations Commission rendered
its decision declaring the respondent guilty of unjustified refusal to
bargain
- Petitioner contends that the National Labor Relations Commission
acted without or in excess of its jurisdiction or with grave abuse of
discretion amounting to lack of jurisdiction in rendering the challenged
decision.
- Petitioner further contends that the National Labor Relations
Commission's finding of unfair labor practice for refusal to bargain is not
supported by law
ISSUE/S:
- WON the respondent is guilty of unjustified refusal to bargain
HELD:
YES
unfair labor practice is committed when it is shown that the respondent
employer, after having been served with a written bargaining proposal
by the petitioning Union, did not even bother to submit an answer or
reply to the said proposal
Ratio
Unfair labor practice is committed when it is shown that the respondent
employer, after having been served with a written bargaining proposal
by the petitioning Union, did not even bother to submit an answer or
reply to the said proposal
Reaspmomg
Collective bargaining which is defined as negotiations towards a
collective agreement, is one of the democratic frameworks under the
New Labor Code, designed to stabilize the relation between labor and
management and to create a climate of sound and stable industrial
peace. It is a mutual responsibility of the employer and the Union and is
characterized as a legal obligation. So much so that Article 249, par. (g)
of the Labor Code makes it an unfair labor practice for an employer to
refuse "to meet and convene promptly and expeditiously in good faith for
the purpose of negotiating an agreement with respect to wages, hours of
work, and all other terms and conditions of employment including
proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if
requested by either party.
While it is a mutual obligation of the parties to bargain, the employer,
however, is not under any legal duty to initiate contract negotiation. The
mechanics of collective bargaining is set in motion only when the
following jurisdictional preconditions are present, namely, (1) possession

of the status of majority representation of the employees'

representative in accordance with any of the means of selection
or designation provided for by the Labor Code; (2) proof of
majority representation; and (3) a demand to bargain under
Article 251, par. (a) of the New Labor Code .
- From the over-all conduct of petitioner company in relation to
the task of negotiation, there can be no doubt that the Union has
a valid cause to complain against its (Company's) attitude, the
totality of which is indicative of the latter's disregard of, and
failure to live up to, what is enjoined by the Labor Code to
bargain in good faith.
DISPOSITION: Petition dismissed

2. NATURE AND PURPOSE

UNITED EMPLOYEES UNION OF GELMART
INDUSTRIES V NORIEL
67 SCRA 267
FERNANDO; October 3, 1975
NATURE
Petition for certiorari and prohibition
FACTS
- the petition seeks to have the certification election declared null
and void, for it was held under circumstances that manifested
lack of fairness
- it was alleged that the petitioner-union was included, but under
another name, in the list of contending unions in the election,
where the winning party had 63% of the votes, while the
petitioner only had 4.5% (thus, the winner won by a landslide,
even if the votes of all the other 7 contending unions were
combined. Therefore, the mistake didnt really affect the outcome
of the election)
ISSUE WON the certification election is void
HELD NO
Ratio Considering what transpired, it is apparent that the
grievance spoken of is more fancied than real, the assertion of
confusion and demoralization based on conjecture rather than
reality. At most, it was an honest mistake
Reasoning The institution of collective bargaining is a prime
manifestation of industrial democracy at work. The two parties to
the relationship, labor and management, make their own rules by
coming to terms. That is to govern themselves in matters that
really count. As labor, however, is composed of a number of
individuals, it is indispensable that they be represented by a
labor organization of their choice. Thus may be discerned how
crucial a certification election is.
- There must be an opportunity to determine which labor
organization shall act on their behalf. It is precisely because
respect must be accorded to the will of labor thus ascertained
that a general allegation of duress is not sufficient to invalidate a
certification election; it must be shown by competent and
credible proof. That is to give substance to the principle of
majority rule, one of the basic concepts of a democratic polity.
Disposition Petition dismissed.

3. WAIVER
RIVERA V ESPIRITU
G.R. No. 135547
QUISUMBING; January 23, 2002

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Nature Special civil action for certiorari and prohibition

and the exercised voluntary modes in settling disputes, including

conciliation to foster industrial peace."

Facts
Disposition petition is DISMISSED.
As a result of a three week strike staged by PAL pilots affiliated with the
Airline Pilots Association of the Philippines (ALPAP) PAL which was
already financially beleaguered suffered serious losses, PALs financial
situation went from bad to worse. Faced with bankruptcy, PAL adopted a
rehabilitation plan and downsized its labor force by more than one-third.
In protest to such action PALEA went on strike which when PAL and
PALEA agreed to a more systematic reduction in PALs work force and
the payment of separation benefits to all retrenched employees.
President Estrada thru AO 16 created an Inter-Agency Task Force to
address the problems of PAL.
PAL management submitted to the Task Force an offer by Lucio Tan,
Chairman a plan to transfer shares of stock to its employees which has
a provision regarding the suspension of the Collective Bargaining
Agreements (CBAs) for 10 years. PALEA Members rejected the
offer.Subsequently, PAL informed the Task Force that it was shutting
down its operations because given its labor problems, rehabilitation was
no longer feasible, and hence, the airline had no alternative but to close
shop. PALEA sought the intervention of the Office of the President in
immediately convening the parties, the PAL management, PALEA,
ALPAP, and FASAP, including the SEC under the direction of the InterAgency Task Force, to prevent the imminent closure of PAL.After
several negotiations a the questioned PAL- PALEA Agreement which
provided for among others the suspension of the PAL-PALEA CBA for a
period of ten (10) years, provided the certain safeguards are in place.
Issue
WON the PAL-PALEA agreement stipulating the suspension of the PALPALEA CBA unconstitutional and contrary to public policy
Held
No.
A CBA is a contract executed upon request of either the employer or
the exclusive bargaining representative incorporating the agreement
reached after negotiations with respect to wages, hours of work and all
other terms and conditions of employment, including proposals for
adjusting any grievances or questions arising under such agreement.
The primary purpose of a CBA is the stabilization of labor-management
relations in order to create a climate of a sound and stable industrial
peace. In construing a CBA, the courts must be practical and realistic
and give due consideration to the context in which it is negotiated and
the purpose which it is intended to serve.
The assailed PAL-PALEA agreement was the result of voluntary
collective bargaining negotiations undertaken in the light of the severe
financial situation faced by the employer, with the peculiar and unique
intention of not merely promoting industrial peace at PAL, but preventing
the latters closure.
We find no conflict between said agreement and Article 253-A of the
Labor Code. Article 253-A has a two-fold purpose. One is to promote
industrial stability and predictability. Inasmuch as the agreement sought
to promote industrial peace at PAL during its rehabilitation, said
agreement satisfies the first purpose of Article 253-A. The other is to
assign specific timetables wherein negotiations become a matter of right
and requirement. Nothing in Article 253-A, prohibits the parties from
waiving or suspending the mandatory timetables and agreeing on the
remedies to enforce the same.
In the instant case, it was PALEA, as the exclusive bargaining agent of
PALs ground employees, that voluntarily entered into the CBA with PAL.
It was also PALEA that voluntarily opted for the 10-year suspension of
the CBA. Either case was the unions exercise of its right to collective
bargaining. The right to free collective bargaining, after all, includes the
right to suspend it.
The acts of public respondents in sanctioning the 10-year suspension of
the PAL-PALEA CBA did not contravene the protection to labor policy
of the Constitution. The agreement afforded full protection to labor;
promoted the shared responsibility between workers and employers;

7.02 BARGAINING PROCEDURE

1. PRIVATE PROCEDURE-251
2. CODE PROCEDURE-250ART. 251. Duty to bargain collectively in the absence of
collective bargaining agreements. - In the absence of an
agreement or other voluntary arrangement providing for a
more expeditious manner of collective bargaining, it shall be
the duty of employer and the representatives of the
employees to bargain collectively in accordance with the
provisions of this Code.

251;233

ART. 250. Procedure in collective bargaining. - The

following procedures shall be observed in collective
bargaining:
(a) When a party desires to negotiate an agreement, it
shall serve a written notice upon the other party with a
statement of its proposals. The other party shall make
a reply thereto not later than ten (10) calendar days
from receipt of such notice;
(b) Should differences arise on the basis of such
notice and reply, either party may request for a
conference which shall begin not later than ten (10)
calendar days from the date of request.
(c) If the dispute is not settled, the Board shall
intervene upon request of either or both parties or at
its own initiative and immediately call the parties to
conciliation meetings. The Board shall have the power
to issue subpoenas requiring the attendance of the
parties to such meetings. It shall be the duty of the
parties to participate fully and promptly in the
conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board,
the parties are prohibited from doing any act which
may disrupt or impede the early settlement of the
disputes; and
(e) The Board shall exert all efforts to settle disputes
amicably and encourage the parties to submit their
case to a voluntary arbitrator. (As amended by Section
20, Republic Act No. 6715, March 21, 1989).

NATURE OF PROCEDURE
ASSOCIATED LABOR UNIONS (ALU) vs.
FERRER-CALLEJA
173 SCRA 178
Regalado; May 5, 1989

ART. 251. Duty to bargain collectively in the absence

of collective bargaining agreements. - In the absence
of an agreement or other voluntary arrangement
providing for a more expeditious manner of collective
A2010
bargaining, it shall be the duty of employer and the
representatives of the employees to bargain
collectively in accordance with the provisions of this
Code.

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NATURE Petition for certiorari

FACTS
- On January 4, 1960, the petitioner entered into a contract with
the Marine Security Agency for the latter to guard and protect the
petitioner's vessels while they were moored at the port of Manila.
It was stipulated in the contract that its term was for one year
commencing from the date of its execution and it may be
terminated by either party 30 days' notice to the other. The
relationship between the petitioner and Marine Security Agency
is such that it was the latter who hired and assigned the guards
TAKE NOTE: These procedures (A250-251) are
who kept watching over the petitioner's vessels. The guards
DIRECTORY in nature and not mandatory, failure to comply
were not known to petitioner who dealt only with the agency on
with the prescribed time periods will not amount to an unfair
matters pertaining to the service of the guards. A lump sum
labor practice.
would be paid by petitioner to the agency who in turn determined
and paid the compensation of the individual watchmen.
FACTS
- Upon prior notice given by the petitioner to the Marine Security
- ALU, through a letter dated May 7, 1986, informed GAW Trading, Inc. Agency, the contract was terminated on January 4, 1961, after it
that majority of the latter's employees have authorized ALU to be their had run its term. After the termination of its contract with Marine
sole and exclusive bargaining agent (SEBA), and requested a Security Agency, the petitioner executed a new contract with the
conference with GAW for the execution of an initial Collective Bargaining Philippine Scout Veterans Security and Investigation Agency
Agreement (CBA). ALU received a letter dated May 12th from GAW, also for the purpose of having its vessels protected while they
which letter set the meeting on the same date. The following day, May called at the port of Manila, and this contract was also for a fixed
13th, ALU transmitted to GAW copies of the proposed CBA. 2 days period of one year.
later, ALU and GAW executed the CBA. In the meantime, on May 9th, - private respondents protested against the termination
2 unions in the company went on strike.
- On February 6, 1961, the respondent Union passed a
resolution abolishing itself with the following reasons:
- After the signing of the CBA, one of the striking unions filed a petition 1. Termination of Contract of the Marine Security Agency with
for certification election, which petition was eventually granted by the the American President Lines.
Bureau of Labor Relations. Hence the present action by ALU, which 2. Inability of the Marine Security Agency to provide employment
invokes the CBA it made with GAW and, thus, the applicability of the 3. Inability of the members and the Union to provide
contract bar rule.
maintenance in the coming months.
- On December 10, 1962, the respondent union passed another
ISSUE WON the contract bar rule applies
resolution reviving itself.
- On March 21, 1963, the Maritime Security Union, through
HELD NO. The subject CBA is defective.
private respondents filed a complaint against the petitioner for
2
RATIO:
unfair labor practice under RA 875. Their complaint, wherein
- The mechanics of collective bargaining are set in motion only they charged that the petitioner had refused to negotiate an
when the following jurisdictional preconditions are present, namely, agreement with them and had discriminated against them with
(1) possession of the status of majority representation by the regard to their tenure of employment by dismissing them for no
employees' representative; (2) proof of majority representation; other reason than their membership with the union and union
and (3) a demand to bargain. The standing of ALU as SEBA is dubious, activities, was lodged with the defunct Court of Industrial
to say the least. The only express recognition of ALU as SEBA in the Relations. However, before that court could resolve the case, the
records is in the CBA. There was precipitate haste on the part of GAW in Labor Code was enacted and the case was transferred to the
recognizing ALU, which recognition appears to have been based on the NLRC under Arbiter Lomabao.
self-serving claim of ALU that it had the support of the majority of the - Arbiter Lomabao found the petitioner to be an employer of the
employees in the bargaining unit. Furthermore, at the time of the private respondents and guilty of ULP against them.
supposed recognition, GAW was obviously aware that there were other - The NLRC affirmed with the qualification that only those
unions existing in the unit.
complainants who are 60 years old or younger and capacitated
to discharge their former duties should be reinstated without loss
There was also failure to post the CBA in conspicuous places in the of seniority rights and other privileges, and with three years of
establishment before its ratification, as required by the implementing backwages; and those who could not be so reinstated should be
rules of the Labor Code. Also, BLR found that about 64% of the workers given separation pay in addition to their backwages for three
who "ratified" the CBA now strongly repudiate the alleged negotiation years. The Minister of Labor affirmed, and the Office of the
and ratification of the CBA.
President affirmed as well.
ART. 233. Privileged communication. - Information and
statements made at conciliation proceedings shall be treated
as privileged communication and shall not be used as
evidence in the Commission. Conciliators and similar
officials shall not testify in any court or body regarding any
matters taken up at conciliation proceedings conducted by
them.

CALTEX v. BRILLANTES
279 SCRA 218
(Mel Sicat)
AMERICAN PRESIDENT LINES VS CLAVE
114 SCRA 826
BARREDO; June 29, 1982
2

In relation to the topic, what this case is saying seems to be that the bargaining procedure is
JURISDICTIONAL in nature. If the requisites are not followed, the resulting CBA is defective.
Accordingly, the proper adjudicative body has no jurisdiction over the CBA, when the purported
SEBA seeks the agencys quasi-judicial function to enforce the res (CBA). Obviously, the agency has
no business deciding whether the contract bar rule applies in favor of the (defective) CBA.

ISSUES
1. WON there existed an employer-employee relationship
between the petitioner and the individual watchmen of the
Marine Security Agency who are alleged to be members of the
respondent union.
2. WON the petitioner refused to negotiate a CBA with the said
individual watchmen and discriminated against them in respect
to their tenure of employment by terminating their contract on
January 1, 1961, because of their union activities (an unfair labor
practice).
HELD
1. NO.
Ratio The following elements are generally considered to
determine whether an employer-employee relationship exists: (1)

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the selection and engagement of the employee; (2) the payment of

wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct-although the latter is the most important element.
Reasoning In the present case, it is the agency that recruits, hires, and
assigns the work of its watchmen. Hence, a watchman can not perform
any security service for the petitioner's vessels unless the agency first
accepts him as its watchman. With respect to his wages, the amount to
be paid to a security guard is beyond the power of the petitioner to
determine. Certainly, the lump sum amount paid by the petitioner to the
agency in consideration of the latter's service is much more than the
wages of any one watchman. In point of fact, it is the agency that
quantifies and pays the wages to which a watchman is entitled. Neither
does the petitioner have any power to dismiss the security guards. Since
the petitioner has to deal with the agency, and not the individual
watchmen, on matters pertaining to the contracted task, it stands to
reason that the petitioner does not exercise any power over the
watchmen's conduct. Always, the agency stands between the petitioner
and the watchmen; and it is the agency that is answerable to the
petitioner for the conduct of its guards.
2. NO.
Ratio In view of Our finding that there is no employer-employee
relationship between the petitioner and the members of the respondent
agency, it should necessarily follow that the petitioner cannot be guilty of
unfair labor practice as charged by the private respondents. Under RA
975 Sec.13, an unfair labor practice may be committed only within the
context of an employer-employee relationship.
- We find it difficult to believe that the members of the respondent
agency made "repeated requests" upon the petitioner through its
Captain Morris to negotiate a CBA with the respondent union. Apart from
their oral declaration, the private respondents have not presented any
written proof that such requests were made. Under RA 875, Sec.14(a),
the desire to negotiate an agreement should be expressed through
a written notice. At the time the members of the agency were allegedly
presenting "repeated requests" for negotiation, they were represented by
counsel. If such requests were in fact made, counsel would not have
failed to advise his clients to tender their requests in the manner
required by law. With regard to the termination of the contract between
the petitioner and the respondent agency, We find no evidence, that it
bears any relationship to the alleged union activities of the individual
members of the agency. The hard fact is that the contract had a lifetime
of one year. Hence, after that period, and without it being renewed, it
lived out its term. While the expiration of the contract might have
rendered the members of the respondent agency jobless, it can hardly
be attributed to any adverse act by the petitioner.
Disposition WHEREFORE the complaint for unfair labor practice
against petitioner is hereby dismissed.
SEPARATE OPINIONS
AQUINO, Concurring:
I concur in the result. The watchmen were employees of the American
President Lines while guarding the ships. Since the watchmen were
hired only for a period of one year, they ceased, after that period, to be
employees of the APL. APL was not obligated to renew the contract of
employment. Hence, the non-renewal of their employment and the act of
the American President Lines in hiring the watchmen of another security
agency cannot be regarded as an unfair labor practice.
Moreover, the watchmen in filing their complaint for unfair labor practice
and reinstatement only two years and two months after the expiration of
their employments contract were guilty of laches.
ABAD SANTOS, Dissenting:
- The pivotal question in this case is one of fact, i.e. whether or not there
existed an employer-employee relationship between the APL and the
individual complainants. The Executive Department of the government
starting from the Labor Arbiter, to the NLRC, the Minister of Labor and
finally the Office of the President found as a fact that there was an
employer-employee relationship. This finding of fact is supported by
substantial evidence:
"evidence on record undisputably shows that private respondents
became employees of the APL when they were hired much earlier even
before 1961 after they had been recruited by the Marine Security

Disini

Agency for the said shipping company who then hired them to
perform guarding duties over its vessels on dock in the Manila
ports. This arrangement became the practice starting the early
part of 1951 to evade the preferential hiring of union men and the
maintenance of the rates of pay then obtaining. This
arrangement gave birth to the Marine Security Agency which
was contracted for the sole purpose of recruiting and supplying
watchmen on ships and vessels of the American President Lines.
It was also observed that the Marine Security Agency which had
recruited herein private respondents for the said shipping
company was not an 'independent contractor' but a 'mere agent
which served as extension of the office' of the said shipping
company 'in the recruitment of the watchmen, the computation of
the watchmen's wages; and the placement of supervisors of the
watchmen.' These reveal that a certain degree of control
exercised by the shipping company over these watchmen. The
services of these watchmen were availed of and their
compensation paid in lump sum by the shipping company
through the watchmen's agency, even if such were done through
the said watchmen agency without the direct intervention of the
said shipping company. While working as regular employees of
APL, private respondents herein formed and organized on
August 3, 1958 the Maritime Security Union. The foregoing
factors or indicia demonstrate that employer-employee
relationship existed between APL and herein private
respondents,
- On the question as to whether or not the APL is guilty of unfair
labor practice, it suffices to quote from the decision of the Office
of the President, thus:
"This Office also found that there was indeed an unfair labor
practice committed by the respondent-appellant. The evidence
indubitably show that the repeated requests of members of the
complainant union to negotiate in behalf of the union with Capt.
Edward Morris were unheeded. As such, refusal to negotiate and
eventually separating individual complaints are, to our mind, acts
constituting unfair labor practice."

NATIONAL UNION OF RESTAURANT WORKERS

V CIR
10 SCRA 843
BAUTISTA ANGELO; APR.30, 1964
NATURE
PETITION for review by certiorari of a resolution of the Court
of Industrial Relations.
FACTS
- On June 9, 1960, a complaint for unfair labor practice was
lodged against the owners of Tres Hermanas Restaurant,
particularly Mrs. Felisa Herrera, on the ground, among others,
that respondents refused to bargain collectively with the
complaining union; respondents made a counter-proposal in the
sense that they would bargain with said union and would accept
its demands if the same would become a company union, and
one Martin Briones, an employee, was separated from the
service because he was found to be the organizer and adviser of
the complaining union.
- Responents denied the charges, and they were exonerated.
The judge found that the charges were not proven and
dismissed the complaint.
ISSUES
1. WON respondents refused to bargain collectively with the
union and committed unfair labor practice
2. WON respondents interfered, coerced or restrained their
employees in the exercise of their right to join the complaining
union
3. WON respondents dismissed said employee because he was
found to be the organizer and adviser of the complaining union.

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HELD
1. NO
Reasoning The court cited several instances that showed respondents
willingness to bargain with the union.
It is true that under Sec 14, RA 875 whenever a party serves a written
notice upon the employer making some demands the latter shall reply
thereto not later than 10 days from receipt thereof, but this condition is
merely procedural, and as much its non-compliance cannot be deemed
to be an act of unfair labor practice. The fact is respondents did not
ignore the letter sent by the union so much so that they called a meeting
to discuss its demands.
The court also pointed out the markings on the letter made by
respondent in the meeting with the union on May 3, 1960 at their
restaurant in Quezon City, indicating the willingness and actual
bargaining made with the union. (Check for agreement, a cross for
disapproval and a circle for demands left open for further discussion)
It is contended that respondents refused to bargain with the complaining
union as such even if they called a meeting of its officers and employees
hereby concluding that they did not desire to enter into a bargaining
agreement with said union. It is belied by the fact that respondents did
actually agree and bargain with the representatives of the union.
Respondents were of the impression that before a union could have that
capacity it must first be certified by the CIR as the duly authorized
bargaining unit, which they also stated in their answer to the petition for
certification filed by said union before the CIR. In that case, another
union known as the International Labor and Marine Union of the
Philippines claimed to represent the majority of the employees of
respondent restaurant, and this is what it alleged in a letter sent to the
manager of respondents dated May 25, 1962.
2. NO.
Reasoning On this document certain notations were made by one
Ernesto Tan which are indeed derogatory and which were allegedly
made by him upon instructions of respondent Felisa Herrera. Thus, the
pertinent notation on which the union relies is one which states that
respondent Herrera would be willing to recognize the union "if union
would become company union", which would indeed show that Mrs.
Herrera interfered with the employees' right to self-organization. But
respondents denied that they ever authorized Ernesto Tan to make such
notation or to represent them in the negotiations. Although Tan was the
nephew of respondent Herrera, in the company, he was merely a
bookkeeper whose duties were confined to the keeping and examination
of their books of accounts and sales invoices. It appears that he was not
even invited to the meeting but merely volunteered to be present and
made those notations on his own account and initiative.
3. NO.
Reasoning. Respondents maintain that Briones was dismissed because
of the smouldering embers of hatred that Briones had against Mrs.
Herrera, the threats he made, and her fear for her own safety being
always together with in her car driven by Briones during business routine.
Petitioners maintain that Briones was dismissed because of his union
activities. It appears in Briones testimony that he is not the only one
who organized the union, yet the members who are more active in the
union and serve as its officers are still employed at the restaurant.
Disposition CIR decision AFFIRMED.

COLEGIO DE SAN JUAN DE LETRAN v ASSOCIATION

OF EMPLOYEES AND FACULTY OF LETRAN
340 SCRA 587
KAPUNAN; Sept 18, 2000
Nature:
Petition for review on certiorari
Facts:

Disini

- On Dec 1992, Salvador Abtria, then President of respondent

union, initiated the renegotiation of its CBA with petitioner for the
last 2 years of the 5 year lifetime from 1989-1994. On the same
year, the union elected a new set of officers, with Eleanor Ambas
as new president.
- Ambas wanted to continue the renegotiation of the CBA but
petitioner, through Fr. Edwin Lao, claimed that the CBA was
already prepared for signing by the parties. The parties
submitted the disputed CBA to a referendum by the union
members, who eventually rejected the said CBA.
- Petitioner accused the union officers of bargaining in bad faith
before the NLRC. The labor arbiter ruled in favor of petitioner,
but was reversed on appeal before the NLRC.
- On Jan 1996, the union notified the National Conciliation and
Mediation Board of its intention to strike.
- On Jan 18, 1996 the parties agreed to disregard the unsigned
CBA and to start negotiation on a new 5 year CBA starting 19941999. On Feb 7, 1996, the union submitted its proposals to
petitioner, which notified the union 6 days later that it has been
submitted to its Board of Trustees.
- Ambas was informed through a letter dated Feb 15, 1996 that
her work schedule was being changed from Mon-Fri to Tue-Sat.
Ambas protested and requested management to submit the
issue to a grievance machinery under the old CBA.
- Due to petitioners inaction, the union filed a notice of strike on
Mar 13, 1996. On Mar 29, the union received petitioners letter
dismissing Ambas for alleged insubordination. The union
amended the notice of strike to include Ambas dismissal.
- On Apr 20 1996, both parties again discussed the ground
rules for the CBA negotiations. However, petitioner stopped the
negotiations after it purportedly received information that a new
group of employees had filed a certification election.
- On June 18, 1996, the union finally struck. On July 2, the Sec
of Labor assumed jurisdiction and ordered all striking employees
including the union president to return to work and for petitioner
to accept them back under the same terms and conditions before
the actual strike. Petitioner readmitted the striking members
except Ambas.
- On Dec 2, 1996, the Sec of Labor issued an order declaring
petitioner guilty of unfair labor practice on two counts and
directing the reinstatement of Ambas, with backwages.
- Petitioners MFR was denied, so it sought a review before the
CA, which dismissed the petition and affirmed the findings of the
Sec of Labor.
Issues:
1. WON petitioner is guilty of unfair labor practice by refusing to
bargain with the union when it unilaterally suspended the
ongoing negotiations for a new CBA upon mere information that
a petition for certification has been filed by another legitimate
labor organization
2. WON the termination of the union president amounts to an
interference of the employees right to self-organization
Held:
1. YES
- Article 252 of the Labor Code defines the meaning of the
phrase duty to bargain collectively.
Article 252. Meaning of duty to bargain collectively.
The duty to bargain collectively means the performance
of mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours of work and
all other terms and conditions of employment including
proposals for adjusting any grievances or questions
arising under such agreement and executing a contract
incorporating such agreements if requested by either
party but such duty does not compel any party to agree
to a proposal or to make any concession.
- There is a requirement on both parties of the performance of
the mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an

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agreement. The union lived up to its requisite when it presented its

proposals for the CBA to petitioner. On the other hand, petitioner
devised ways and means in order to prevent the negotiation.
- Petitioners utter lack of interest in bargaining with the union is obvious
in its failure to make a timely reply to the proposals presented by the
union. This is a clear violation of Article 250 of the Labor Code
Article 250. Procedure in collective bargaining. The following
procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall
serve a written notice upon the other party with a statement of its
proposals. The other party shall make a reply thereto not later
than ten (10) calendar days from receipt of such notice. Xxx
- Petitioner claims that the suspension of negotiations was proper since
by the filing of the petition for certification of election the issue on
majority representation of the employees arose. Court held that in order
to allow the employer to validly suspend the bargaining process there
must be a valid petition for certification election raising a legitimate
representation issue. Hence, the mere filing of a petition for certification
election does not ipso facto justify the suspension of negotiation by the
employer. The petition must first comply with the provisions of the Labor
Code and its Implementing Rules. Foremost is that a petition for
certification election must be filed during the sixty-day freedom period.
2. YES
While the Court recognizes the right of the employer to terminate the
services of an employee for a just or authorized cause, nevertheless, the
dismissal of employees must be made within the parameters of law and
pursuant to the tenets of equity and fair play.
Disposition Petition denied

KIOK LOY (SWEDEN ICE CREAM PLANT) V NLRC,

KILUSAN
G.R. No. L-54334
CUEVAS; JAN 22 1986
NATURE
Petition for CERTIORARI to annul the decision ofNLRC (w/c found
petitioner guilty of ULP for unjustified refusal to bargain, in violation of
par. (g) of Article 249 Labor Code, and declared the draft proposal of
the KILUSAN for a collective bargaining agreement as the governing
CBA bet the EEs and the mgt.
FACTS
- Pambansang Kilusan ng Paggawa (Kilusan), a legitimate labor
federation, won cert election and was certified by the BLR as the sole
and exclusive bargaining agent of the rank-and-file employees of
Sweden Ice Cream Plant (Company).
- Kilusan then gave the Company two copies of its proposed CBA. It
requested the Company for its counter proposals. There was no
response from Company. Kilusan again requested the Company for
collective bargaining negotiations and for the Company to furnish them
with its counter proposals. Both requests were ignored and remained
unacted upon by the Company.
-Kilusan on Feb 14, 1979, filed a "Notice of Strike", with the BLR on
ground of unresolved economic issues in collective bargaining.
-Conciliation proceedings followed but all attempts towards an amicable
settlement failed. BLR certified the case to the NLRC for compulsory
arbitration. The case was reset/postponed several times (mostly
Companys request).
-Then in the scheduled hearing on June 4, 1979, the Company's
representative, Mr. Ching, who was supposed to be examined, failed to
appear. The Companys counsel requested for another postponement.
The labor arbiter denied. He ruled that the Company has waived its right
to present further evidence and, therefore, considered the case
submitted for resolution.
- NLRC held: Sweden Ice Cream guilty of unjustified refusal to bargain.

Disini

The draft proposal for a CBA was found to be reasonable under

the premises, and declared to be the collective agreement w/c
should govern the relationship between the parties.
-Petitioner: its right to procedural due process has been
violated when it was precluded from presenting further evidence
in support of its stand and when its request for further
postponement was denied.
that the NLRCs finding of unfair labor practice for refusal to
bargain is not supported by law and the evidence considering
that it was only on May 24. 1979 when the Union furnished them
with a copy of the proposed CBA and it was only then that they
came to know of the Union's demands; that CBA approved
and adopted by the NLRC is unreasonable and lacks legal basis.
ISSUE/S
1) WON companys right to due process has been
violated
2) WON company is guilty of ULP
3) WON CBA is reasonable
HELD
1) NO
-Considering the various postponements granted in its behalf,
the claimed denial of due process appeared totally bereft of any
legal and factual support. As herein earlier stated, petitioner had
not even honored respondent union with any reply to the latter's
successive letters, all geared towards bringing the Company to
the bargaining table.. Certainly, the moves and overall behavior
of company were in total derogation of the policy enshrined in
the Labor Code which is aimed towards expediting settlement of
economic disputes. Hence, the Court is not prepared to affix its
imprimatur to such an illegal scheme and dubious maneuvers.
2) YES
- Article 249, par. (g) LC makes it an unfair labor practice for an
employer to refuse "to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work, and all other
terms and conditions of employment including proposals for
adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such
agreement, if requested by either party."
-Collective bargaining which is defined as negotiations towards a
collective agreement, is designed to stabilize the relation
between labor and management and to create a climate of
sound and stable industrial peace. It is a mutual responsibility of
the employer and the Union and is characterized as a legal
obligation.
- While it is a mutual obligation of the parties to bargain, the
employer, however, is not under any legal duty to initiate contract
negotiation.
-The mechanics of collective bargaining is set in motion only
when the ff. jurisdictional preconditions are present, namely, (1)
possession of the status of majority representation of the
employees' representative in accordance with any of the means
of selection or designation provided for by the LC; (2) proof of
majority representation; and (3) a demand to bargain under Art
251, par. (a) of the Labor Code . . . all of which preconditions are
undisputedly present in the instant case.

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-From the over-all conduct of petitioner company, Kilusan has a valid

cause to complain against Company's attitude, the totality of which is
indicative of the latter's disregard of, and failure to live up to, what is
enjoined by the Labor Code ---- to bargain in good faith.
-Company is GUILTY of unfair labor practice. (1) respondent Union
was a duly certified bargaining agent; (2) it made a definite request to
bargain, accompanied with a copy of the proposed CBA, to the
Company not only once but twice which were left unanswered and
unacted upon; and (3) the Company made no counter proposal
whatsoever all of which conclusively indicate lack of a sincere desire to
negotiate. Even during the period of compulsory arbitration before the
NLRC, Company's stalled the negotiation by a series of
postponements, non-appearance at the hearing conducted
-Herald Delivery Carriers Union (PAFLU) vs. Herald Publications:
"unfair labor practice is committed when it is shown that the
respondent employer, after having been served with a written
bargaining proposal by the petitioning Union, did not even bother to
submit an answer or reply to the said proposal. This doctrine was
reiterated in Bradman vs. CIR: "while the law does not compel the
parties to reach an agreement, it does contemplate that both parties
will approach the negotiation with an open mind and make a
reasonable effort to reach a common ground of agreement".
3) YES
- The instant case being a certified one, it must be resolved by the
NLRC pursuant to the mandate of P.D. 873, as amended, which
authorizes the said body to determine the reasonableness of the terms
and conditions of employment embodied in any CBA. To that extent,
utmost deference to its findings of reasonableness of any Collective
Bargaining Agreement as the governing agreement by the employees
and management must be accorded due respect by this Court.

e. The Board shall exert all efforts to settle disputes

amicably and encourage the parties to submit their case
160to a voluntary arbitrator.

Disini

Art. 233 Privileged communication. Information and

statements made at conciliation proceedings shall be
treated as privileged communication and shall not be
used as evidence in the Commission. Conciliators and
similar officials shall not testify in any court or body
regarding any matters taken up at conciliation
proceedings conducted by them.
Art.250 (e) says that: The Board shall exert all efforts to
settle disputes amicably and encourage the parties to
submit their case to a voluntary arbitrator. How does the
law encourage the parties to go into conciliation?
Privileged Communication (Art. 233)
a. Information and statements made at conciliation
proceedings
shall
be
treated
as
privileged
communication and shall not be used as evidence in the
Commission.
b. Conciliators and similar officials shall not testify in any
court or body regarding any matters taken up at
conciliation proceedings conducted by them.
The Board shall have the power to issue subpoenas
requiring the attendance of the parties to such meetings.
It shall be the duty of the parties to participate fully and
promptly in the conciliation meetings the Board may call;
(Art. 250 c).
This power to subpoena is merely to force the parties to
participate.
During the conciliation proceedings in the Board, the
parties are prohibited from doing any act which may
disrupt or impede the early settlement of the disputes;
(Art. 250d)

Disposition Petition dismissed.

GARCIA; October 31, 2006

3. CONCILIATION PROCEDURE-250
(C, D,E); 233
Art. 250 Procedure in collective bargaining.
c. If the dispute is not settled, the Board shall intervene
upon request of either or both parties or at its own initiative
and immediately call the parties to conciliation meetings.
The Board shall have the power to issue
subpoenas requiring the attendance of the parties to such
meetings.
It shall be the duty of the parties to participate fully and
promptly in the
conciliation meetings the Board may call;
d. During the conciliation proceedings in the Board, the
parties are prohibited from doing any act which may disrupt
or impede the
early settlement of the disputes; and

NISSAN MOTORS V SECRETARY OF DOLE

491 SCRA 605

FACTS
- A 2000-2001 labor dispute between Nissan Motors Philippines,
Inc. (Nissan Motors) and the union BANAL-NMPI-OLALIA-KMU
triggered by a collective bargaining deadlock resulted in the filing
of four notices of strike and the dismissal from the service of a
number of company employees.
- August 22, 2001 DOLE issued an order assuming jurisdiction
over the case. In the same order, the DOLE Secretary expressly
enjoined any strike or lockout and directed the parties to cease
and desist from committing any act that might aggravate the
situation. It also ordered the Union to refrain from engaging in
any disruptive activity.
- December 5, 2001 The DOLE secretary issued a decision
which contained names of union officers and members whom
Nissan Motors dismissed for defying the directives contained in
the assumption order. The order can be summarized as follows:
- That the suspension of 140 employees is affirmed
and the dismissal of the union officers is sustained.
- But the dismissal of the union members was recalled
and it ordered for the reinstatement of the
employees/union members without backwages. They
were to be imposed a 1-month suspension which was
to be deemed served already.

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- January 22, 2002 The DOLE affirmed with modification the

December resolution. The modification consisted of deleting from the
list of union officers three employees.
- February 7, 2003 The CA, acting on petitions filed by Nissan
Motors and the union, affirmed the DOLE decision.
- June 21, 2006 The SC affirmed that of the CA insofar as it upheld
the DOLE Secretary on the suspension and dismissal angle of her
decision which included the following: (a) affirming the suspension of
the 140 employees which is the subject of the first notice of strike; (b)
sustaining the dismissal of the Union officers; and (c) downgrading the
penalty of dismissal to a 1-month suspension to be imposed on Union
members who joined the striking Union officers in defying the
assumption order and accordingly reinstating said union members
having already served the 1-month suspension.
- In the present case, the Union seeks clarification on who among the
union members were ordered reinstated, pursuant to the affirmed
decision of the DOLE, considering that the Courts Decision failed to
mention the names of such union members ordered reinstated after
their dismissal was recalled.
ISSUE
WON the decision of the DOLE secretary was correct
HELD YES
Reasoning
- The workers engaged in illegal strike which rightly led to the company
dismissing them in accordance with A264(a).
- The members of the Union should not be as severely punished.
Dismissal is a harsh penalty as surely they were only following orders
from their officers.
- There is no evidence that they engaged or participated in the
commission of illegal activities during the said strike. They should thus
be reinstated to their former positions, but without backwages.
Disposition Judgment affirmed

7.03 DUTY TO BARGAIN- 250-253; 242 (C)

ART. 250. Procedure in collective bargaining. - The following
procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a
written notice upon the other party with a statement of its proposals.
The other party shall make a reply thereto not later than ten (10)
calendar days from receipt of such notice;
(b) Should differences arise on the basis of such notice and reply, either
party may request for a conference which shall begin not later than ten
(10) calendar days from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request
of either or both parties or at its own initiative and immediately call the
parties to conciliation meetings. The Board shall have the power to
issue subpoenas requiring the attendance of the parties to such
meetings. It shall be the duty of the parties to participate fully and
promptly in the conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are
prohibited from doing any act which may disrupt or impede the early
settlement of the disputes; and
(e) The Board shall exert all efforts to settle disputes amicably and
encourage the parties to submit their case to a voluntary arbitrator. (As
amended by Section 20, Republic Act No. 6715, March 21, 1989).

ART. 251. Duty to bargain collectively in the absence of collective

bargaining agreements. - In the absence of an agreement or other
voluntary arrangement providing for a more expeditious manner of
collective bargaining, it shall be the duty of employer and the
representatives of the employees to bargain collectively in accordance
with the provisions of this Code.

Disini

ART. 252. Meaning of duty to bargain collectively. - The duty to

bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement with
respect to wages, hours of work and all other terms and
conditions of employment including proposals for adjusting any
grievances or questions arising under such agreement and
executing a contract incorporating such agreements if
requested by either party but such duty does not compel any
party to agree to a proposal or to make any concession.
ART. 253. Duty to bargain collectively when there exists a
collective bargaining agreement. - When there is a collective
bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a
written notice to terminate or modify the agreement at least sixty
(60) days prior to its expiration date. It shall be the duty of both
parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during
the 60-day period and/or until a new agreement is reached by
the parties.
ART. 253-A. Terms of a collective bargaining agreement. - Any
Collective Bargaining Agreement that the parties may enter into
shall, insofar as the representation aspect is concerned, be for a
term of five (5) years. No petition questioning the majority status
of the incumbent bargaining agent shall be entertained and no
certification election shall be conducted by the Department of
Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five-year term of
the Collective Bargaining Agreement. All other provisions of the
Collective Bargaining Agreement shall be renegotiated not later
than three (3) years after its execution. Any agreement on such
other provisions of the Collective Bargaining Agreement entered
into within six (6) months from the date of expiry of the term of
such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such
date. If any such agreement is entered into beyond six months,
the parties shall agree on the duration of retroactivity thereof. In
case of a deadlock in the renegotiation of the Collective
Bargaining Agreement, the parties may exercise their rights
under this Code. ( As amended by Section 21, Republic Act No.
6715, March 21, 1989).
ART. 242. Rights of legitimate labor organizations. - A legitimate
labor organization shall have the right:
(c) To be furnished by the employer, upon written request, with
its annual audited financial statements, including the balance
sheet and the profit and loss statement, within thirty (30)
calendar days from the date of receipt of the request, after the
union has been duly recognized by the employer or certified as
the sole and exclusive bargaining representative of the
employees in the bargaining unit, or within sixty (60) calendar
days before the expiration of the existing collective bargaining
agreement, or during the collective bargaining negotiation

MEANING OF DUTY
STANDARD CHARTERED BANK EMPLOYEES
UNION V CONFESOR
432 SCRA 308
CALLEJO; June 16, 2004
FACTS
- Standard Chartered Bank is a foreign banking corporation
doing business in the Philippines. The exclusive bargaining
agent of the rank and file employees of the Bank is the
Standard Chartered Bank Employees Union
- The Union sought to renegotiate the terms of the CBA and
initiated the negotiations.
- Through its President, Eddie L. Divinagracia, it sent a letter
containing its proposals covering political and economic
provisions.

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- The Bank, took note of the Unions proposals. The Bank attached its
counter-proposal to the non-economic provisions proposed by the Union.
- Before the commencement of the negotiation, the Union, through
Divinagracia, suggested to the Banks Human Resource Manager and
head of the negotiating panel, Cielito Diokno, that the bank lawyers
should be excluded from the negotiating team. The Bank acceded.
- Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr.,
the President of the National Union of Bank Employees (NUBE), the
federation to which the Union was affiliated, be excluded from the
Unions negotiating panel. However, Umali was retained as a member
thereof.
- The parties met and set the ground rules for the negotiation. Diokno
suggested that the negotiation be kept a family affair.
- Even during the final reading of the, there were still non-economic
provisions on which the Union and the Bank could not agree. Both
parties agreed to place the notation DEFERRED/DEADLOCKED.
- The negotiation for economic provisions commenced. Except for the
provisions on signing bonus and uniforms, the Union and the Bank failed
to agree on the remaining economic provisions of the CBA. The Union
declared a deadlock and filed a Notice of Strike before the National
Conciliation and Mediation Board
- The Bank filed a complaint for Unfair Labor Practice (ULP) and
Damages before the NLRC in Manila alleging that the Union violated its
duty to bargain, as it did not bargain in good faith. It contended that the
Union demanded sky high economic demands, indicative of blue-sky
bargaining.
- Then Secretary of Labor and Employment (SOLE) Nieves R. Confesor,
assumed jurisdiction over the labor dispute and issued an Order
dismissing the Bank and the Unions charges for unfair labor practice
- The Union filed a motion for reconsideration with clarification, while the
Bank filed a motion for reconsideration. The SOLE issued a Resolution
denying the motions.
The Union filed a second motion for
reconsideration, which was, likewise, denied
- The Union filed this petition
- The Union alleges that the Bank violated its duty to bargain; hence,
committed ULP under Article 248(g) when it engaged in surface
bargaining. It alleged that the Bank just went through the motions of
bargaining without any intent of reaching an agreement, as evident in
the Banks counter-proposals.
ISSUE
WON the SOLE committed grave abuse of discretion amounting to lack
of jurisdiction in dismissing the unions charge of unfair labor practice.
HELD
NO.
- Surface bargaining: going through the motions of negotiating without
any legal intent to reach an agreement.
- The resolution of surface bargaining allegations never presents an
easy issue. The determination of whether a party has engaged in
unlawful surface bargaining is usually a difficult one because it involves,
at bottom, a question of the intent of the party in question, and usually
such intent can only be inferred from the totality of the challenged partys
conduct both at and away from the bargaining table. It involves the
question of whether an employers conduct demonstrates an
unwillingness to bargain in good faith or is merely hard bargaining.
- The minutes of meetings do not show that the Bank had any intention
of violating its duty to bargain with the Union. Records show that after
the Union sent its proposal to the Bank, the latter replied with a list of its
counter-proposals. Thereafter, meetings were set for the settlement of
their differences. The minutes of the meetings show that both the Bank
and the Union exchanged economic and non-economic proposals and
counter-proposals.
- The Union has not been able to show that the Bank had done acts,
both at and away from the bargaining table, which tend to show that it
did not want to reach an agreement with the Union or to settle the
differences between it and the Union. Admittedly, the parties were not
able to agree and reached a deadlock.
However, it is herein
emphasized that the duty to bargain does not compel either party to
agree to a proposal or require the making of a concession. Hence, the
parties failure to agree did not amount to ULP under Article 248(g) for
violation of the duty to bargain.

Disini

- The inference that respondents did not refuse to bargain

collectively with the complaining union because they accepted
some of the demands while they refused the others even leaving
open other demands for future discussion is correct, especially
so when those demands were discussed at a meeting called by
respondents themselves precisely in view of the letter sent by
the union
- The Court also does not agree that the Union is guilty of ULP
for engaging in blue-sky bargaining or making exaggerated or
unreasonable proposals.
- The Bank failed to show that the economic demands made by
the Union were exaggerated or unreasonable. The minutes of
the meeting show that the Union based its economic proposals
on data of rank and file employees and the prevailing economic
benefits received by bank employees from other foreign banks
doing business in the Philippines and other branches of the Bank
in the Asian region.
Disposition Resolutions of the SOLE are AFFIRMED.

UNION OF FILIPRO EMPLOYEES (UFE-DFAKMU) V NESTL PHILIPPINES, INC.

499 SCRA 521
CHICO-NAZARIO; August 22, 2006
FACTS
- Due to the impending expiration of the existing collective
bargaining agreement (CBA) between Nestl and UFE-DFAKMU, the Presidents of the Alabang and Cabuyao Divisions of
UFE-DFA-KMU, informed Nestl of their intent to open our new
Collective Bargaining Negotiation for the year 2001-2004 x x x as
early as June 2001.
- Nestl acknowledged receipt of the aforementioned letter. It
also informed UFE-DFA-KMU that it was preparing its own
counter-proposal and proposed ground rules that shall govern
the conduct of the collective bargaining negotiations.
- Nestl underscored its position that unilateral grants, one-time
company grants, company-initiated policies and programs, which
include, but are not limited to the Retirement Plan, Incidental
Straight Duty Pay and Calling Pay Premium, are by their very
nature not proper subjects of CBA negotiations and therefore
shall be excluded therefrom.
- In addition, it clarified that with the closure of the Alabang Plant,
the CBA negotiations will only be applicable to the covered
employees of the Cabuyao Plant; hence, the Cabuyao Division
of UFE-DFA-KMU became the sole bargaining unit involved in
the subject CBA negotiations.
- Thereafter, dialogue between the company and the union
ensued.
- Nestl, claiming to have reached an impasse in said dialogue,
requested the National Conciliation and Mediation Board to
conduct preventive mediation proceedings between it and UFEDFA-KMU.
- Conciliation proceedings nevertheless proved ineffective.
Complaining, in essence, of bargaining deadlock pertaining to
economic issues, i.e., retirement (plan), panel composition,
costs and attendance, and CBA, UFE-DFA-KMU filed a Notice
of Strike .
- One week later, another Notice of Strike was filed by the UFEDFA-KMU, this time predicated on Nestls alleged unfair labor
practices i.e., bargaining in bad faith in that it was setting preconditions in the ground rules by refusing to include the issue of
the Retirement Plan in the CBA negotiations.
- In view of the looming strike, Nestl filed with the DOLE a
Petition for Assumption of Jurisdiction
- Sto. Tomas issued an Order assuming jurisdiction over the
subject labor dispute between the parties stating that any strike
or lockout is enjoined, that the parties are further directed to
meet and convene for the discussion of the union proposals and
company counter-proposals before the National Conciliation and
Mediation Board and that if no settlement of all the issues is

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reached, the Office shall define the outstanding issues and order the
filing of position papers for a ruling on the merits.
- UFE-DFA-KMU sought reconsideration of the Assumption of
Jurisdiction Order
- In an Order, Sec. Sto. Tomas denied the aforequoted motion for
reconsideration
- The employee members of UFE-DFA-KMU at the Nestl Cabuyao
Plant went on strike.
- Notwithstanding a Return-To-Work Order, the members of UFE-DFAKMU continued with their strike and refused to go back to work as
instructed. Thus, Sec. Sto. Tomas sought the assistance of the
Philippine National Police (PNP) for the enforcement of said order.
- At the hearing called, Nestl and UFE-DFA-KMU filed their respective
position papers.
- Tomas denied the motion for reconsideration of UFE-DFA-KMU.
- Frustrated with the foregoing turn of events, UFE-DFA-KMU filed a
petition for certiorari with application for the issuance of a temporary
restraining order or a writ of preliminary injunction before the Court of
Appeals.
- Meanwhile, in an attempt to finally resolve the crippling labor dispute
between the parties, then Acting Secretary of the DOLE, Hon. Arturo D.
Brion, came out with an Order
- UFE-DFA-KMU moved to reconsider the aforequoted position of the
DOLE.
- Secretary of the DOLE, Hon. Sto. Tomas, issued the last of the
assailed Orders. This order resolved to deny the preceding motion for
reconsideration of UFE-DFA-KMU.
- Undaunted still, UFE-DFA-KMU, for the second time, went to the Court
of Appeals
- The Court of Appeals, acting on the twin petitions for certiorari,
determined the issues in favor of UFE-DFA-KMU
- Dissatisfied, both parties separately moved for the reconsideration of
the abovequoted decision
- The Court of Appeals stood pat in its earlier pronouncements and
denied the motions for reconsideration
ISSUES
1. WON the Retirement Plan was a proper subject to be included in the
CBA negotiations between the parties hence, negotiable.
2. WON the assumption powers of the Secretary of Labor and
Employment should have been limited merely to the grounds alleged in
the second Notice of Strike
3. WON Nestl was guilty of unfair labor practice
HELD
1. YES
- In Nestl Philippines, Inc. v. NLRC, ironically involving the same
parties herein, the Court has had the occasion to affirm that a retirement
plan is consensual in nature. The Court, through Madame Justice GrioAquino, declared that:
The fact that the retirement plan is non-contributory, i.e., that the employees contribute
nothing to the operation of the plan, does not make it a non-issue in the CBA negotiations.
As a matter of fact, almost all of the benefits that the petitioner has granted to its
employees under the CBA salary increases, rice allowances, midyear bonuses, 13th
and 14th month pay, seniority pay, medical and hospitalization plans, health and dental
services, vacation, sick & other leaves with pay are non-contributory benefits. Since the
retirement plan has been an integral part of the CBA since 1972, the Unions demand to
increase the benefits due the employees under said plan, is a valid CBA issue.
x x x [E]mployees do have a vested and demandable right over existing benefits
voluntarily granted to them by their employer. The latter may not unilaterally withdraw,
eliminate or diminish such benefits

- In the case at bar, it cannot be denied that the CBA that was about to
expire at that time contained provisions respecting the Retirement Plan.
As the latter benefit was already subject of the existing CBA, the
members of UFE-DFA-KMU were only exercising their prerogative to
bargain or renegotiate for the improvement of the terms of the
Retirement Plan just like they would for all the other economic, as well
as non-economic benefits previously enjoyed by them.
- The purpose of collective bargaining is the acquisition or attainment of
the best possible covenants or terms relating to economic and noneconomic benefits granted by employers and due the employees. The
Labor Code has actually imposed as a mutual obligation of both parties,
this duty to bargain collectively.
- The duty to bargain collectively is categorically prescribed by Article
252 of the said code. It states:

Disini

ART. 252. MEANING OF DUTY TO BARGAIN COLLECTIVELY. The duty to

bargain collectively means the performance of a mutual obligation to meet and
confer promptly and expeditiously and in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work, and all other
terms and conditions of employment including proposals for adjusting any
grievances or questions arising under such agreement and executing a contract
incorporating such agreement if requested by either party, but such duty does
not compel any party to agree to a proposal or to make any concession.

- Further, Article 253, also of the Labor Code, defines the

parameter of said obligation when there already exists a CBA,
viz:
ART. 253. DUTY TO BARGAIN COLLECTIVELY WHEN THERE EXISTS A
COLLECTIVE BARGAINING AGREEMENT. The duty to bargain collectively
shall also mean that either party shall not terminate nor modify such agreement
during its lifetime. However, either party can serve a written notice to terminate
or modify the agreement at least sixty (60) days prior to its expiration date. It
shall be the duty of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement during the
sixty day period and/or until a new agreement is reached by the parties.

- In demanding that the terms of the Retirement Plan be opened

for renegotiation, the members of UFE-DFA-KMU are acting well
within their rights as we have, indeed, declared that the
Retirement Plan is consensual in character; and so, negotiable.
2. NO.
- Declaring the Secretary of the DOLE to have acted with grave
abuse of discretion for ruling on substantial matters or issues
and not restricting itself merely on the ground rules, the appellate
court and UFE-DFA-KMU would have the Court treat the subject
labor dispute in a piecemeal fashion.
- The power granted to the Secretary of the DOLE by Paragraph
(g) of Article 263 of the Labor Code, authorizes her to assume
jurisdiction over a labor dispute, causing or likely to cause a
strike or lockout in an industry indispensable to the national
interest, and correlatively, to decide the same.
- In the case at bar, the Secretary of the DOLE simply relied on
the Notices of Strike that were filed by UFE-DFA-KMU. Thus,
based on the Notices of Strike filed by UFE-DFA-KMU, the
Secretary of the DOLE rightly decided on matters of substance.
- The issue of whether or not the Secretary of the DOLE could
decide issues incidental to the subject labor dispute had already
been answered in the affirmative. The Secretarys assumption of
jurisdiction power necessarily includes matters incidental to the
labor dispute, that is, issues that are necessarily involved in the
dispute itself, not just to those ascribed in the Notice of Strike; or,
otherwise submitted to him for resolution.
- In any event, the query as to whether or not the Retirement
Plan is to be included in the CBA negotiations between the
parties ineluctably dictates upon the Secretary of the DOLE to go
into the substantive matter of the CBA negotiations.
3. NO.
- Basic is the principle that good faith is presumed and he who
alleges bad faith has the duty to prove the same. By imputing
bad faith unto the actuations of Nestl, it was UFE-DFA-KMU,
therefore, who had the burden of proof to present substantial
evidence to support the allegation of unfair labor practice.
- A perusal of the allegations and arguments raised by UFEDFA-KMU in the Memorandum will readily disclose that it failed
to discharge said onus probandi as there is still a need for the
presentation of evidence other than its bare contention of unfair
labor practice in order to make certain the propriety or
impropriety of the unfair labor practice charge hurled against
Nestl.
- There is no per se test of good faith in bargaining. Good faith or
bad faith is an inference to be drawn from the facts, to be precise,
the crucial question of whether or not a party has met his
statutory duty to bargain in good faith typically turns on the facts
of the individual case. Necessarily, a determination of the validity
of the Nestls proposition involves an appraisal of the exercise
of its management prerogative.
- Employers are accorded rights and privileges to assure their
self-determination and independence and reasonable return of
capital. This mass of privileges comprises the so-called
management prerogatives. In this connection, the rule is that
good faith is always presumed. As long as the companys

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exercise of the same is in good faith to advance its interest and not for
purpose of defeating or circumventing the rights of employees under the
law or a valid agreement, such exercise will be upheld.
Disposition Petition seeking that Nestl be declared to have committed
unfair labor practice was DENIED. The Petition was PARTLY
GRANTED, the ruling of the Court of Appeals was REVERSED in so far
as it ruled that the Secretary of the DOLE gravely abused her discretion
in failing to confine her assumption of jurisdiction power over the ground
rules of the CBA negotiations; but the ruling of the Court of Appeals on
the inclusion of the Retirement Plan as a valid issue in the collective
bargaining negotiations between UFE-DFA-KMU and Nestl is
AFFIRMED.

Disini

Ratio Failing to comply with the mandatory obligation to submit a

reply to the unions proposals, GMC violated its duty to bargain
collectively, making it liable for unfair labor practice. Reasoning
Article 253-A, Labor Code

Terms of a collective bargaining agreement. Any

Collective Bargaining Agreement that the parties may enter
into shall, insofar as the representation aspect is concerned,
be for a term of five (5) years. No petition questioning the
majority status of the incumbent bargaining agent shall be
entertained and no certification election shall be conducted
by the Department of Labor and Employment outside of the
sixty-day period immediately before the date of expiry of such
five year term of the Collective Bargaining Agreement. All
other provisions of the Collective Bargaining Agreement shall
GEN. MILLING CORP. v CA (GEN. MILLING CORP.
be renegotiated not later than three (3) years after its
INDEPENDENT LABOR UNION)
execution....
- The representation provision of a CBA should last for five years.
422 SCRA 514
The relation between labor and management should be
QUISIMBING; February 11, 2004
undisturbed until the last 60 days of the fifth year. It is
indisputable that when the union requested for a renegotiation of
NATURE Petition for certiorari assailing the decision of the CA.
the economic terms of the CBA on November 29, 1991, it was
still the certified collective bargaining agent of the workers,
FACTS
because it was seeking said renegotiation within five (5) years
- Gen. Milling employed 190 employees in its two plants in Cebu and from the date of effectivity of the CBA on December 1, 1988.
Lapu-Lapu. They were all members of respondent Gen. Milling Corp. - For refusing to send a counter-proposal to the union and
Independent Labor Union (union), a duly certified bargaining agent.
to bargain anew on the economic terms of the CBA, the
- April 28, 1989: GMC and the union concluded a CBA which included company committed an unfair labor practice under Article
the issue of representation effective for a term of three years. The CBA 248 of the Labor Code:
was effective for three years retroactive to December 1, 1988 (expiration:
ART. 248. Unfair labor practices of employers. It shall be
November 30, 1991).
unlawful for an employer to commit any of the following
- A day before the expiration, the union to GMC a CBA, with a request
unfair labor practice:
for a counter-proposal to be returned within 10 days from receipt.
(g) To violate the duty to bargain collectively as
- GMC received collective and individual letters from workers who stated
prescribed by this Code;
that they had withdrawn from their union membership, due to religious
ART. 252. Meaning of duty to bargain collectively. The
affiliation and personal differences. Believing that the union no longer
duty to bargain collectively means the performance of a
had standing to negotiate a CBA, GMC did not send any countermutual obligation to meet and convene promptly and
proposal.
expeditiously in good faith for the purpose of
- December 16, 1991: GMC wrote a letter to the unions officers, stating
negotiating an agreement....
that even if there was no longer a basis for negotiations (since there was - Good faith or bad faith is an inference to be drawn from the
no union already), management was still willing to enter a dialogue with facts. The effect of an employers or a unions actions individually
the union. The union officers disclaimed the massive disaffiliation.
is not the test of good-faith bargaining, but the impact of all such
- January 13, 1992: GMC dismissed Marcia Tumbiga, a union member, occasions or actions, considered as a whole.
on the ground of incompetence. The union protested and requested - Under Article 252 both parties are required to perform their
GMC to submit the matter to the grievance procedure provided in the mutual obligation to meet and convene promptly and
CBA. GMC, however, advised the union to refer to our letter dated expeditiously in good faith for the purpose of negotiating an
December 16, 1991.
agreement. The union lived up to this obligation when it
- July 2, 1992: the union filed a complaint against GMC with the NLRC, presented proposals for a new CBA to GMC. On the other hand,
Arbitration Division, Cebu City, alleging unfair labor practice. The labor GMC failed in its duty under Article 252. What it did was to
arbiter dismissed the case with the recommendation that a petition for devise a flimsy excuse, by questioning the existence of the union
certification election be held to determine if the union still enjoyed the and the status of its membership to prevent any negotiation.
support of the workers.
GMCs failure to make a timely reply to the proposals presented
- The union appealed to the NLRC. The NLRC set aside the labor by the union is indicative of its utter lack of interest in bargaining
arbiters decision, and ordered GMC to abide by the CBA draft that the with the union.
union proposed for a period of two (2) years. NLRC pointed out that - The CA found that the letters between February to June 1993
upon the effectivity of Rep. Act No. 6715, the duration of a CBA, insofar by 13 union members signifying their resignation from the union
as the representation aspect is concerned, is five (5) years which, in the clearly indicated that GMC exerted pressure on its employees.
case of GMC-Independent Labor Union was from December 1, 1988 to Yes, GMC interfered with the right of employees to selfNovember 30, 1993; the union remained as the exclusive bargaining organization.
agent.
ISSUES
1. WON GMC is guilty of unfair labor practice for violating the duty
to bargain collectively and/or interfering with the right of its
employees to self-organization;
2. WON CA abused its discretion when it imposed upon GMC the
draft CBA proposed by the union for two years to begin from the
expiration of the original CBA.
HELD
1. YES

2. NO
Ratio The provision mandates the parties to keep the status quo
while they are still in the process of working out their respective
proposal and counter proposal. When one of the parties abuses
this grace period by purposely delaying the bargaining process,
a departure from the general rule is warranted, that is, the court
may impose on the erring company the CBA proposed by its
employees union - lock, stock and barrel.
Reasoning By its acts, no less than its action which bespeak its
insincerity, GMC has forfeited whatever rights it could have
asserted as an employer.

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- Under ordinary circumstances, it is not obligatory upon either side of a

labor controversy to precipitately accept or agree to the proposals of the
other. But an erring party should not be allowed to resort with impunity to
schemes feigning negotiations by going through empty gestures.
DISPOSITION Petition is dismissed.

COLEGIO DE SAN JUAN DE LETRAN V

ASSOCIATION OF EMPLOYEES AND FACULTY OF
LETRAN (AMBAS)
340 SCRA 587
KAPUNAN, J.; September 18, 2000
NATURE
Petition for review on certiorari of the decision of the CA dismissing the
petition of petitioner and affirming the order of the Sec of Labor
FACTS
- Respondent union initiated the renegotiation of its CBA with petitioner
for the last 2 years of the CBAs 5 year lifetime. In the same year, the
union elected a new set of officers wherein private respondent Eleanor
Ambas was elected President. Ambas wanted to continue the
renegotiation of the CBA but petitioner claimed that the CBA was
already prepared for signing by the parties. The parties submitted the
disputed CBA to a referendum by the union members, who eventually
rejected the said CBA. Petitioner accused the union officers of
bargaining in bad faith before the NLRC. The Labor Arbiter decided in
favor of petitioner. However, the Labor Arbiters decision was reversed
on appeal before the NLRC. The union gave notice to the National
Conciliation & Mediation Board of its intention to strike on the grounds of
petitioners non-compliance with the NLRCs orders and refusal to
bargain.
- The parties agreed to disregard the unsigned CBA and to start
negotiation on a new five-year CBA. The union submitted its proposals
to petitioner, which notified the union that the same had been submitted
to its Board of Trustees. In the meantime, Ambas was informed through
a letter from her superior that her work schedule was being changed
from Monday to Friday to Tuesday to Saturday. Ambas protested and
requested management to submit the issue to grievance machinery
under the old CBA. Due to petitioners inaction, the union filed a notice
of strike. The parties met before the NCMB to discuss the ground rules
for the negotiation. The union received petitioners letter dismissing
Ambas for alleged insubordination. Hence, the union amended its notice
of strike to include Ambas dismissal. Both parties again discussed the
ground rules for the CBA renegotiation. However, petitioner stopped the
negotiations after it purportedly received information that a new group of
employees had filed a petition for certification election.
- The union finally struck. Public respondent Sec of Labor assumed
jurisdiction and ordered all striking employees including the union
president to return to work and for petitioner to accept them back under
the same terms and conditions before the actual strike. Petitioner
readmitted the striking members except Ambas. Public respondent
issued an order declaring petitioner guilty of unfair labor practice on two
counts and directing the reinstatement of private respondent Ambas with
backwages. Petitioner filed an MFR which was denied. Petitioner sought
a review of the order of the Sec of Labor before the CA. The appellate
court dismissed the petition and affirmed the findings of public
respondent.
ISSUE/S
1. WON petitioner is guilty of unfair labor practice by refusing to bargain
with the union when unilaterally suspended negotiations
2. WON termination of the union president amounts to interference with
the right to self-organization
HELD
1. YES
Ratio Petitioners utter lack of interest in bargaining with the union is
obvious in its failure to make a timely reply to the proposals presented

Disini

by the latter. Where the employer did not even bother to submit
an answer to the bargaining proposals of the union, there is a
clear evasion of the duty to bargain collectively.
Reasoning In order to allow the employer to validly suspend the
bargaining process there must be a valid petition for certification
election raising a legitimate representation issue. The mere filing
of a petition for certification election does not ipso facto justify
the suspension of negotiation. The petition must first comply with
the Labor Code and its Implementing Rules. Significantly, the
same petition was dismissed by the Sec of Labor. The dismissal
was upheld by this Court.
2. YES
Ratio Management has the prerogative to discipline its
employees for insubordination. But when the exercise of such
management right tends to interfere with the employees right to
self-organization, it amounts to union-busting and is therefore a
prohibited act.
Reasoning The dismissal of Ms. Ambas was clearly designed to
frustrate the Union in its desire to forge a new CBA with the
College that is reflective of the true wishes and aspirations of the
Union members. Her dismissal was merely a subterfuge to get
rid of her. It has the effect of busting the Union, stripping it of its
strong-willed leadership. When management refused to treat the
charge of insubordination as a grievance within the scope of the
Grievance Machinery, the action of the College in finally
dismissing her from the service became arbitrary, capricious and
whimsical, and therefore violated Ms. Ambas right to due
process.
On Duty to Bargain Collectively
Article 252 of the Labor Code defines the meaning of the phrase
"duty to bargain collectively," as follows: The duty to bargain
collectively means the performance of a mutual obligation to
meet and convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement with respect to
wages, hours of work and all other terms and conditions of
employment including proposals for adjusting any grievances or
questions arising under such agreement and executing a
contract incorporating such agreements if requested by either
party but such duty does not compel any party to agree to a
proposal or to make any concession.
Disposition Petition is DENIED for lack of merit.

KIOK LOY (SWEDEN ICE CREAM PLANT) V

NLRC, KILUSAN
G.R. No. L-54334
CUEVAS; JAN 22 1986
NATURE
Petition for CERTIORARI to annul the decision ofNLRC (w/c
found petitioner guilty of ULP for unjustified refusal to bargain, in
violation of par. (g) of Article 249 Labor Code, and declared the
draft proposal of the KILUSAN for a collective bargaining
agreement as the governing CBA bet the EEs and the mgt.
FACTS
- Pambansang Kilusan ng Paggawa (Kilusan), a legitimate labor
federation, won cert election and was certified by the BLR as the
sole and exclusive bargaining agent of the rank-and-file
employees of Sweden Ice Cream Plant (Company).
- Kilusan then gave the Company two copies of its proposed
CBA. It requested the Company for its counter proposals. There
was no response from Company. Kilusan again requested the
Company for collective bargaining negotiations and for the
Company to furnish them with its counter proposals. Both
requests were ignored and remained unacted upon by the
Company.
-Kilusan on Feb 14, 1979, filed a "Notice of Strike", with the BLR
on ground of unresolved economic issues in collective

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bargaining.

preconditions are undisputedly present in the instant case.

-Conciliation proceedings followed but all attempts towards an amicable

settlement failed. BLR certified the case to the NLRC for compulsory
arbitration. The case was reset/postponed several times (mostly
Companys request).

-From the over-all conduct of petitioner company, Kilusan has a

valid cause to complain against Company's attitude, the totality
of which is indicative of the latter's disregard of, and failure to live
up to, what is enjoined by the Labor Code ---- to bargain in good
faith.

-Then in the scheduled hearing on June 4, 1979, the Company's

representative, Mr. Ching, who was supposed to be examined, failed to
appear. The Companys counsel requested for another postponement.
The labor arbiter denied. He ruled that the Company has waived its right
to present further evidence and, therefore, considered the case
submitted for resolution.
- NLRC held: Sweden Ice Cream guilty of unjustified refusal to bargain.
The draft proposal for a CBA was found to be reasonable under the
premises, and declared to be the collective agreement w/c should
govern the relationship between the parties.
-Petitioner: its right to procedural due process has been violated
when it was precluded from presenting further evidence in support of its
stand and when its request for further postponement was denied.
that the NLRCs finding of unfair labor practice for refusal to bargain is
not supported by law and the evidence considering that it was only on
May 24. 1979 when the Union furnished them with a copy of the
proposed CBA and it was only then that they came to know of the
Union's demands; that CBA approved and adopted by the NLRC is
unreasonable and lacks legal basis.
ISSUE/S
4) WON companys right to due process has been violated
5) WON company is guilty of ULP
6) WON CBA is reasonable

-Company is GUILTY of unfair labor practice. (1) respondent

Union was a duly certified bargaining agent; (2) it made a definite
request to bargain, accompanied with a copy of the proposed
CBA, to the Company not only once but twice which were left
unanswered and unacted upon; and (3) the Company made no
counter proposal whatsoever all of which conclusively indicate
lack of a sincere desire to negotiate. Even during the period of
compulsory arbitration before the NLRC, Company's stalled the
negotiation by a series of postponements, non-appearance at
the hearing conducted
-Herald Delivery Carriers Union (PAFLU) vs. Herald Publications:
"unfair labor practice is committed when it is shown that the
respondent employer, after having been served with a written
bargaining proposal by the petitioning Union, did not even bother
to submit an answer or reply to the said proposal. This doctrine
was reiterated in Bradman vs. CIR: "while the law does not
compel the parties to reach an agreement, it does contemplate
that both parties will approach the negotiation with an open mind
and make a reasonable effort to reach a common ground of
agreement".
3) YES
- The instant case being a certified one, it must be resolved by
the NLRC pursuant to the mandate of P.D. 873, as amended,
which authorizes the said body to determine the reasonableness
of the terms and conditions of employment embodied in any CBA.
To that extent, utmost deference to its findings of
reasonableness of any Collective Bargaining Agreement as the
governing agreement by the employees and management must
be accorded due respect by this Court.

HELD
1) NO
-Considering the various postponements granted in its behalf, the
claimed denial of due process appeared totally bereft of any legal and
factual support. As herein earlier stated, petitioner had not even honored
respondent union with any reply to the latter's successive letters, all
geared towards bringing the Company to the bargaining table.. Certainly,
the moves and overall behavior of company were in total derogation of Disposition Petition dismissed.
the policy enshrined in the Labor Code which is aimed towards
expediting settlement of economic disputes. Hence, the Court is not
prepared to affix its imprimatur to such an illegal scheme and dubious
REPUBLIC SAVINGS BANK
maneuvers.
21 SCRA 226
2) YES
- Article 249, par. (g) LC makes it an unfair labor practice for an
employer to refuse "to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement with respect to
wages, hours of work, and all other terms and conditions of employment
including proposals for adjusting any grievance or question arising under
such an agreement and executing a contract incorporating such
agreement, if requested by either party."
-Collective bargaining which is defined as negotiations towards a
collective agreement, is designed to stabilize the relation between labor
and management and to create a climate of sound and stable industrial
peace. It is a mutual responsibility of the employer and the Union and is
characterized as a legal obligation.
- While it is a mutual obligation of the parties to bargain, the employer,
however, is not under any legal duty to initiate contract negotiation.
-The mechanics of collective bargaining is set in motion only when the ff.
jurisdictional preconditions are present, namely, (1) possession of the
status of majority representation of the employees' representative in
accordance with any of the means of selection or designation provided
for by the LC; (2) proof of majority representation; and (3) a demand to
bargain under Art 251, par. (a) of the Labor Code . . . all of which

v. CIR

CASTRO; September 27, 1967

NATURE
Appeal of CIR decision
FACTS
- Republic Savings Bank (now Republic Bank or RB)
discharged/terminated private respondents Resuello, Jola et al,
for having written and published "a patently libelous letter,
tending to cause the dishonor, discredit or contempt not only of
officers and employees of this bank, but also of your employer,
the bank itself." Respondents had written to the bank president,
Ramon Racelis, a letter-charge, demanding his resignation on
the grounds of immorality, nepotism in the appointment and
favoritism as well as discrimination in the promotion of RB
employees.
- CIR ruled that RBs act of dismissing the 8 respondent
employees constituted an unfair labor practice within the
meaning and intendment of the Industrial Peace Act (RA 875).
RB appealed. It still maintains that the discharge was for cause.
- RBs defense: CIR should have dismissed the complaint
because the discharge of the respondents had nothing to do with
their union activities as the latter in fact admitted at the hearing
that the writing of the letter-charge was not a "union action" but
merely their "individual" act.

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ISSUE
WON the dismissal of the 8 employees by RB constituted unfair labor
practice within the meaning and intendment of the Industrial Peace Act
HELD
YES.
- Even assuming that respondents acted in their individual capacities
when they wrote the letter-charge they were nonetheless protected for
they were engaged in concerted activity, in the exercise of their right of
self-organization that includes concerted activity for mutual aid and
protection, interference with which constitutes an unfair labor practice.
The joining in protests or demands, even by a small group of
employees, if in furtherance of their interests, is a concerted activity
protected by the Industrial Peace Act. It is not necessary that union
activity be involved or that collective bargaining be contemplated.
- NLRC v. Phoenix Mutual Life Insurance Co is case in point. Held: An
insurance company was guilty of an unfair labor practice in interfering
with this right of concerted activity by discharging two agents employed
in a branch office. The agents acts of meeting and joining in a letter to
the home office objecting to the transfer to their branch office of a
cashier from another branch, for further discussion, approval and
signature, is a concerted activity that is protected.
Re Meaning of Duty to Bargain
- What the RB should have done was to refer the letter-charge to the
grievance committee. This was its duty, failing which it committed an
unfair labor practice RA 875 which makes it an unfair labor practice for
an employer "to dismiss, discharge or otherwise prejudice or
discriminate against an employee for having filed charges or for having
given or being about to give testimony under this Act."
- Collective bargaining does not end with the execution of an agreement.
It is a continuous process. The duty to bargain imposes on the parties
during the term of their agreement the mutual obligation to meet and
confer promptly and expeditiously and in good faith for the purpose of
adjusting any grievances or question arising under such agreement and
a violation of this obligation is an unfair labor practice.
- Instead of stifling criticism, RB should have allowed the respondents to
air their grievances. Good faith bargaining required of the Bank an open
mind and a sincere desire to negotiate over grievances. The grievance
committee, created in the CBA, would have been an appropriate forum
for such negotiation. Indeed, the grievance procedure is a part of the
continuous process of collective bargaining. It is intended to promote a
friendly dialogue between labor and management as a means of
maintaining industrial peace.
Disposition Appealed decision is AFFIRMED
FERNANDO, CONCURRING
- Collective bargaining presupposes the give-and-take of discussion. No
party adopts, at least in its initial stages, a hard-line position, from which
there can be no retreat. That was not the situation here. Respondents as
labor leaders were quite certain that the President of RB had offended
most grievously. They wanted him out. There was no room for
discussion.
- That for me is not bargaining as traditionally and commonly
understood. It is for that reason that I find it difficult to agree fully with the
view that their dismissal could be construed as a refusal to bargain
collectively. Moreover, they did not as adverted to in the opinion of the
Court, follow the procedure set forth for adjusting grievances. It is my
view therefore that the dismissal amounted to "interference, restraint or
coercion" as prohibited in the Industrial Peace Act, and not refusal to
bargain collectively.

DEADLOCK
SAN MIGUEL CORP. V NLRC
304 SCRA 1
PURISIMA; March 23, 1999

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NATURE
Petition for Certiorari
FACTS
- In July 1990, San Miguel Cooperation shut down some of its
plants and declared 55 positions as redundant. Consequently,
the private respondent union filed several grievance cases for
the said retrenched employees, praying for the redeployment of
the said employees to the other divisions of the company.
- Grievance proceedings were conducted pursuant to Sections 5
and 8, Article VIII of the parties 1990 Collective Bargaining
Agreement. During the grievance proceedings, however, most of
the employees were redeployed, while others accepted early
retirement. As a result only 17 employees remained when the
parties proceeded to the third level of the grievance procedure.
In a meeting on October 26, 1990, petitioner informed private
respondent union that if by October 30, 1990, the remaining 17
employees could not yet be redeployed, their services would be
terminated on November 2, 1990. The said meeting adjourned
when Mr. Daniel S. L. Borbon II, a representative of the union,
declared that there was nothing more to discuss in view of the
deadlock.
- On November 7, 1990, the private respondent filed with the
National Conciliation and Mediation Board (NCMB) of the
Department of Labor and Employment (DOLE) a notice of strike
on the following grounds: a) bargaining deadlock; b) union
busting; c) gross violation of the CBA such as non-compliance
with the grievance procedure; d) failure to provide private
respondent with a list of vacant positions pursuant to the parties
side agreement that was appended to the 1990 CBA; and e)
defiance of voluntary arbitration award. Petitioner on the other
hand, moved to dismiss the notice of strike but the NCMB failed
to act on the motion.
- On December 21, 1990, petitioner SMC filed a complaint with
the respondent NLRC, praying for: (1) the dismissal the notice of
strike; (2) an order compelling the respondent union to submit to
grievance and arbitration the issue listed in the notice of strike; (3)
the recovery of the expenses of litigation. Respondent NLRC
came out with a minute resolution dismissing the complaint.
ISSUE
WON NLRC gravely abused its discretion in dismissing
SMCs complaint
HELD
YES
- Rule XXII, Section I, of the Rules and Regulations
Implementing Book V the Labor Code,10 [As amended by D.O.
No. 09 which took effect on June 21, 1997.] reads:
"Section 1. Grounds for strike and lockout. -- A strike or lockout
may be declared in cases of bargaining deadlocks and unfair
labor practices. Violations of the collective bargaining
agreements, except flagrant and/or malicious refusal to comply
with its economic provisions, shall not be considered unfair labor
practice and shall not be strikeable. No strike or lockout may be
declared on grounds involving inter-union and intra-union
disputes or on issues brought to voluntary or compulsory
arbitration."
- In the case under consideration, the grounds relied upon by the
private respondent union are non-strikeable. The issues which
may lend substance to the notice of strike filed by the private
respondent union are: collective bargaining deadlock and
petitioners alleged violation of the collective bargaining
agreement. These grounds, however, appear more illusory than
real.
- Collective Bargaining Deadlock is defined as "the situation
between the labor and the management of the company where
there is failure in the collective bargaining negotiations resulting
in a stalemate". This situation, is non-existent in the present case

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since there is a Board assigned on the third level of the grievance

machinery to resolve the conflicting views of the parties. Instead of
asking the Conciliation Board composed of five representatives each
from the company and the union, to decide the conflict, petitioner
declared a deadlock, and thereafter, filed a notice of strike. For failing to
exhaust all the steps in the grievance machinery and arbitration
proceedings provided in the Collective Bargaining Agreement, the notice
of strike should have been dismissed by the NLRC and private
respondent union ordered to proceed with the grievance and arbitration
proceedings. In the case of Liberal Labor Union vs. Phil. Can Co., the
court declared as illegal the strike staged by the union for not complying
with the grievance procedure provided in the collective bargaining
agreement, ruling that:
"x x x the main purpose of the parties in adopting a procedure in the
settlement of their disputes is to prevent a strike. This procedure must
be followed in its entirety if it is to achieve its objective. x x x strikes held
in violation of the terms contained in the collective bargaining agreement
are illegal, specially when they provide for conclusive arbitration clauses.
These agreements must be strictly adhered to and respected if their
ends have to be achieved. x x x"
As regards the alleged violation of the CBA, we hold that such a
violation is chargeable against the private respondent union. In
abandoning the grievance proceedings and stubbornly refusing to avail
of the remedies under the CBA, private respondent violated the
mandatory provisions of the collective bargaining agreement.
Disposition Petition is granted.

MINUTES OF NEGOTIATION
SAMAHANG MANGGAGAWA SA TOP FORM V. NLRC
295 SCRA 171
ROMERO : September 7, 1998
FACTS:
- The charge arose from the employer's refusal to grant across-theboard increases to its employees in implementing Wage Orders Nos. 01
and 02 of the Regional Tripartite Wages and Productivity Board of the
National Capital Region (RTWPB-NCR). Such refusal was aggravated
by the fact that prior to the issuance of said wage orders, the employer
allegedly promised at the collective bargaining conferences to
implement any government-mandated wage increases on an across-theboard basis.
- Petitioner Samahang Manggagawa sa Top Form Manufacturing
United Workers of the Philippines (SMTFM) was the certified collective
bargaining representative of all regular rank and file employees of
private respondent Top Form Manufacturing Philippines, Inc.
- At the collective bargaining negotiation, the parties agreed to discuss
unresolved economic issues. According to the minutes of the meeting
the Union proposed that any future wage increase given by the
government should be implemented by the company across-the-board
or non-conditional.
- Management requested the union to retain this provision since their
sincerity was already proven when the P25.00 wage increase was
granted across-the-board. The union acknowledges management's
sincerity but they are worried that in case there is a new set of
management, they can just show their CBA. The union decided to defer
this provision.
- In their joint affidavit dated January 30, 1992, union members Salve L.
Barnes, Eulisa Mendoza, Lourdes Barbero and Concesa Ibaez
affirmed that at the subsequent collective bargaining negotiations, the
union insisted on the incorporation in the collective bargaining
agreement (CBA) of the union proposal on "automatic across-the-board
wage increase."
- On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01
granting an increase of P17.00 per day in the salary of workers. This

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was followed by Wage Order No. 02 dated December 20, 1990

providing for a P12.00 daily increase in salary.
- As expected, the union requested the implementation of said
wage orders. However, they demanded that the increase be on
an across-the-board basis. Private respondent refused to accede
to that demand. Instead, it implemented a scheme of increases
purportedly to avoid wage distortion.
- On October 24, 1991, the union, through its legal counsel,
wrote private respondent a letter demanding that it should "fulfill
its pledge of sincerity to the union by granting an across-theboard wage increase to all employees under the wage orders."
- Several conferences between the parties notwithstanding,
private respondent adamantly maintained its position on the
salary increases it had granted that were purportedly designed to
avoid wage distortion.
- Consequently, the union filed a complaint with the NCR NLRC
alleging that private respondent's act of "reneging on its
undertaking/promise clearly constitutes act of unfair labor
practice through bargaining in bad faith." It charged private
respondent with acts of unfair labor practices or violation of
Article 247 of the Labor Code, as amended, specifically
"bargaining in bad faith," and prayed that it be awarded actual,
moral and exemplary damages.
- Private respondent, on the other hand, contended that in
implementing Wage Orders Nos. 01 and 02, it had avoided "the
existence of a wage distortion" that would arise from such
implementation. It emphasized that only "after a reasonable
length of time from the implementation" of the wage orders "that
the union surprisingly raised the question that the company
should have implemented said wage orders on an across-theboard basis." It asserted that there was no agreement to the
effect that future wage increases mandated by the government
should be implemented on an across-the-board basis.
Otherwise, that agreement would have been incorporated and
expressly stipulated in the CBA.
- On March 11, 1992, Labor Arbiter Jose G. de Vera rendered a
decision dismissing the complaint for lack of merit.
- Not satisfied, petitioner appealed to the NLRC that, in turn,
promulgated the assailed Resolution of April 29, 1993
dismissing the appeal for lack of merit. Still dissatisfied, petitioner
sought reconsideration which, however, was denied by the
NLRC in the Resolution dated January 17, 1994.
ISSUE: WON private respondent committed an unfair labor
practice
HELD: NO
Reasoning:
- If there was indeed a promise or undertaking on the part of
private respondent to obligate itself to grant an automatic acrossthe-board wage increase, petitioner union should have requested
or demanded that such "promise or undertaking" be incorporated
in the CBA. After all, petitioner union has the means under the
law to compel private respondent to incorporate this specific
economic proposal in the CBA. It could have invoked Article 252
of the Labor Code defining "duty to bargain," thus, the duty
includes "executing a contract incorporating such agreements if
requested by either party."
- The CBA is the law between the contracting parties, the
collective bargaining representative and the employer-company.
Compliance with a CBA is mandated by the expressed policy to
give protection to labor. In the same vein, CBA provisions should
be "construed liberally rather than narrowly and technically, and
the courts must place a practical and realistic construction upon
it, giving due consideration to the context in which it is negotiated
and purpose which it is intended to serve." This is founded on
the dictum that a CBA is not an ordinary contract but one
impressed with public interest. It goes without saying, however,
that only provisions embodied in the CBA should be so
interpreted and complied with. Where a proposal raised by a
contracting party does not find print in the CBA, it is not a part
thereof and the proponent has no claim whatsoever to its

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implementation. Because the proposal was never embodied in the CBA,

the promise has remained just that, a promise, the implementation of
which cannot be validly demanded under the law.
DISPOSITIVE: NLRC decision affirmed.

SUSPENSION OF BARGAINING
COLEGIO de SAN JUAN de LETRAN v ASSOCIATION
OF EMPLOYEES
340 SCRA 587
KAPUNAN; September 18, 2000
FACTS:
-Newly elected union president Ambas wanted to continue the
renegotiation of the CBA with said school but petitioner claimed that the
CBA was already prepared for signing by the parties. Union members
rejected CBA
-union notified the National Conciliation and Mediation Board (NCMB) of
its intention to strike on the ground of petitioner's refusal to bargain.
January 18, 1996, the parties agreed to start negotiation on a new fiveyear CBA starting 1994-1999. On February 7, 1996, the union submitted
its proposals to petitioner, which notified the union six days later or on
February 13, 1996 that the same had been submitted to its Board of
Trustees.
-In the meantime, Ambas was informed that her work schedule was
being changed from Monday to Friday to Tuesday to Saturday. Ambas
protested and requested management to submit the issue to a grievance
machinery under the old CBA
-Due to petitioner's inaction, the union filed a notice of strike. The parties
met on March 27, 1996 before the NCMB to discuss the ground rules for
the negotiation. On March 29, 1996, the union received petitioner's letter
dismissing Ambas for alleged insubordination
- On April 20, 1996, both parties again discussed the ground rules for
the CBA renegotiation. However, petitioner stopped the negotiations
after it purportedly received information that a new group of employees
had filed a petition for certification election
-union finally struck. On July 2, 1996, public respondent the Secretary of
Labor and Employment assumed jurisdiction and issued a return to work
order
- On December 2, 1996, public respondent issued an order declaring
petitioner guilty of unfair labor practice on two counts and directing the
reinstatement of private respondent Ambas with backwages
ISSUE:
WON petitioner is guilty of unfair labor practice by refusing to bargain
with the union when it unilaterally suspended the ongoing negotiations
for a new CBA upon mere information that a petition for certification has
been filed by another legitimate labor organization?
HELD: yes
-Article 252 of the Labor Code defines the meaning of the phrase "duty
to bargain collectively. Noteworthy in the above definition is the
requirement on both parties of the performance of the mutual obligation
to meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement
-union lived up to this requisite when it presented its proposals for the
CBA to petitioner on February 7, 1996. On the other hand, petitioner
devised ways and means in order to prevent the negotiation
-Petitioner's utter lack of interest in bargaining with the union is obvious
in its failure to make a timely reply to the proposals presented by the
latter. More than a month after the proposals were submitted by the
union, petitioner still had not made any counter-proposals which is a
clear violation of Art.250 which in part states: When a party desires to
negotiate an agreement, it shall serve a written notice upon the other
party with a statement of its proposals. The other party shall make a
reply thereto not later than ten (10) calendar days from receipt of such

notice. the company's refusal to make counter-proposal to the

union's proposed CBA is an indication of its bad faith
-Moreover, the series of events (changing of Ambas work sched
and her subsequent dismissal for insubordination) that transpired
after the filing of the first notice of strike in January 1996 show
petitioner's resort to delaying tactics to ensure that negotiation
would not push through.

7.04 BARGAINABLE ISSUES-252

ART. 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the
performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith for
the purpose of negotiating an agreement with respect
to wages, hours of work and all other terms and
conditions of employment including proposals for
adjusting any grievances or questions arising under
such agreement and executing a contract
incorporating such agreements if requested by either
party but such duty does not compel any party to
agree to a proposal or to make any concession.

ISSUES
MANILA FASHIONS, INC. V NLRC (ZAMORA
AND NAGKAKAISANG MANGGAGAWA NG
MANILA FASHIONS, INC.)
G.R. No. 117878
BELLOSILLO; November 13, 1996
FACTS
- respondent Nagkakaisang Manggagawa ng Manila Fashions,
Inc., through its president, respondent Nonito Zamora, filed a
complaint before the Labor Arbiter on behalf of its one hundred
and fifty (150) members who were regular employees of
petitioner Manila Fashions, Inc. The complaint charged petitioner
with non-compliance, with Wage Order No NCR-02 and 02-A
mandating a P12- increase in wages effective 8 January 1991.
As a result, complainants' basic pay, 13th month pay, service
incentive leave pay, legal holiday pay, night shift differential and
overtime pay were all underpaid
- Petitioner countered that the failure to comply with the pertinent
Wage Order was brought about by the tremendous losses
suffered by it which were aggravated when the workers staged a
strike on account of the non-adjustment of their basic pay. To
forestall continuous suspension/closure of business operations,
which petitioner did for three (3) months, the strikers sent a
notice that they were willing to condone the implementation of
the increase. The condonation was distinctly stated in Sec. 3, Art.
VIII, of the Collective Bargaining Agreement (CBA) dated 4
February 1992, which was voluntarily entered into by the parties
and represents a reasonable settlement The Union realizes the
companys closeness to insolvency and, as such , sympathizes
with the companys condition. Therefore, the Union has agreed,
as it hereby agrees, to condone the implementation of Wage
Order o. NCR-02 and 02-A.
- The complainants admitted the existence of the aforementioned
provision in the CBA; however they denied the validity thereof
inasmuch as it was not reached after due consultation with the
members.
- The Labor Arbiter sustained the claim that the subject provision
of the CBA was void but based its conclusion on a different
ground :

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. . . While it is true that both union officers/members and

(petitioner) signed the agreement, however, the same is not
enforceable since said agreement is null and void, it being
contrary to law. It is only the Tripartite Wage Productivity Board
of (the) Department of Labor and Employment (DOLE) that could
approve exemption (of) an establishment from coverage of (a)
Wage Order . . .

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- Nestle filed this petition for certiorari alleging that since its
retirement plan is non-contributory, it has the sole and exclusive
prerogative to define the terms of the plan because the workers
have no vested and demandable rights there under, the grant
being not a contractual obligation but merely gratuitous. At most
the company can only be directed to maintain the same but not
to change its terms. It should be left to the discretion of the
company on how to improve or modify the same.

ISSUES
1. WON the condonation of the implementation of Wage Order No.
NCR-02 and 02-A contained in Sec. 3, Art. VIII, of the CBA was valid

ISSUE
WON the Retirement Plan is a collective bargaining issue

HELD
1. NO
Reasoning A Collective Bargaining Agreement refers to the negotiated
contract between a legitimate labor organization and the employer
concerning wages, hours of work and all other terms and conditions of
employment in a bargaining unit, including mandatory provisions for
grievances and arbitration machineries. As in all other contracts, the
parties in a CBA may establish such stipulations, clauses, terms and
conditions as they may deem convenient provided they are not contrary
to law, morals, good customs, public order or public policy. Section 3,
Art. VIII, of the CBA is a void provision because by agreeing to condone
the implementation of the Wage Order the parties thereby contravened
its mandate on wage increase of P12.00 effective 8 January 1991. Also,
as stated by the Labor Arbiter, it is only the Tripartite Wage Productivity
Board of the DOLE that could approve exemption of an establishment
from coverage of a Wage Order.
If petitioner is a financially distressed company then it should have
applied for a wage exemption so that it could meet its labor costs without
endangering its viability or its very existence upon which both
management and labor depend for a living. The Office of the Solicitor
General emphasizes the point that parties to a CBA may not by
themselves, set a wage lower than the minimum wage. To do so would
render nugatory the purpose of a wage exemption, not to mention the
possibility that employees may be unwittingly put in a position to accept
a lower wage.
The cases that petitioner relies on are simply inapplicable because,
unlike the present case which involves a stipulation in the CBA in
contravention of law, they are concerned with compromise settlements
as a means to end labor disputes recognized by Art. 227 of the Labor
Code and considered not against public policy by doctrinal rules
established by this Court.

HELD
YES.
Ratio The fact that the retirement plan is non-contributory, i.e.,
that the employees contribute nothing to the operation of the
plan, does not make it a non-issue in the CBA negotiations.
Reasoning Almost all of the benefits granted to its employees
under the CBA (salary increases, rice allowances, midyear
bonuses, 13th & 14th month pay, seniority pay, medical and
hospitalization plans, health and dental services, vacation, sick &
other leaves with pay) are non-contributory benefits. Since the
retirement plan has been an integral part of the CBA since 1972,
the Union's demand to increase the benefits due the employees
under said plan is a valid CBA issue.
- The improvement of the existing Retirement Plan was one of
the original CBA proposals submitted by the UFE to Nestle. The
union's original proposal was to modify the existing plan by
including a provision for early retirement. The company did not
question the validity of that proposal as a collective bargaining
issue but merely offered to maintain the existing noncontributory
retirement plan which it believed to be still adequate for the
needs of its employees and competitive with those existing in the
industry. The union thereafter modified its proposal, but the
company was adamant. Consequently, the impasse on the
retirement plan became one of the issues certified to the NLRC
for compulsory arbitration.
- The inclusion of the retirement plan in the CBA as part of the
package of economic benefits extended by the company to its
employees gives it "a consensual character" so that it may not
be terminated or modified at will by either party. Employees have
a vested and demandable right over existing benefits voluntarily
granted to them by their employer. The latter may not unilaterally
withdraw, eliminate or diminish such benefits.

Disposition Petition is dismissed.

NESTLE PHIL V NLRC (Union of FIL-IPRO Employees)

193 SCRA 504
GRINO-AQUINO; February 4, 1999
NATURE
Petition for certiorari
FACTS
- Four CBAs with Nestle Philippines (Nestle) expired on June 30, 1987.
While the parties were negotiating, the employees resorted to a
"slowdown" and walk-outs prompting Nestle to shut down the factory.
Marathon collective bargaining negotiations between the parties ensued.
- The UFE declared a bargaining deadlock. The Secretary of Labor
assumed jurisdiction and issued a return to work order. In spite of that
order, the union struck, without notice. Nestle retaliated by dismissing
the union officers and members of the negotiating panel who
participated in the illegal strike. The NLRC affirmed the dismissals. UFE
filed a notice of strike on the same ground of CBA deadlock and ULP.
- After conciliation efforts of the NCMB yielded negative results, the
dispute was certified to the NLRC by the Secretary of Labor. The NLRC
issued a resolution regarding the union's demand for liberalization of the
company's retirement plan for its workers. Both the parties MFR were
denied.

Disposition Petition is DISMISSED.

SAMAHANG MANGGAGAWA SA TOP FORM

MANUFACTURING UNITED WORKERS OF THE
PHILIPPINES V NLRC (DE VERA).
295 SCRA 171
ROMERO; September 7, 1998
NATURE
Petition for review on certiorari
FACTS
. At the collective bargaining negotiation between SMTFM-UWP
and its employer, the Union proposed that any future wage
increase given by the government should be implemented by the
company across-the-board or non-conditional. The management
promised to implement this but requested the union to drop the
provision since their sincerity was already proven when the
P25.00 wage increase was granted across-the-board. An
undertaking to this effect was taken by the officials of the
company.
- RTWPB-NCR issued Wage Order No. 01 and Wage Order No.
02 providing for a P17 and P12 daily increase in salary,
respectively.

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- Union requested the implementation of said wage orders on an acrossthe-board basis. Employer refused. Instead, it implemented a scheme of
increases purportedly to avoid wage distortion.
- Several conferences were held but they were not able to settle.
- Union filed a complaint for unfair labor practices or violation of Article
247 of the Labor Code, specifically "bargaining in bad faith," and prayed
that it be awarded actual, moral and exemplary damages. Union added
that it was also charging private respondent with violation of Article 100.
- Labor arbiter De Vera, and subsequently, the NLRC, dismissed the
complaint for lack of merit.
ISSUES
1. WON the employer committed an unfair labor practice
HELD
1. NO
Ratio The CBA is the law between the contracting parties. Compliance
with a CBA is mandated by the expressed policy to give protection to
labor. In the same vein, CBA provisions should be "construed liberally
rather than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due consideration to
the context in which it is negotiated and purpose which it is intended to
serve." This is founded on the dictum that a CBA is not an ordinary
contract but one impressed with public interest. It goes without saying,
however, that only provisions embodied in the CBA should be so
interpreted and complied with. Where a proposal raised by a contracting
party does not find print in the CBA, it is not a part thereof and the
proponent has no claim whatsoever to its implementation
Reasoning
- If there was indeed a promise or undertaking on the part of the
management to obligate itself to grant an automatic across-the-board
wage increase, union should have requested or demanded that such be
incorporated in the CBA. It could have invoked Article 252 of the Labor
Code defining "duty to bargain," thus, the duty includes "executing a
contract incorporating such agreements if requested by either party."
However, Article 252 also states that the duty to bargain "does not
compel any party to agree to a proposal or make any concession." Thus,
union may not validly claim that the proposal embodied in the Minutes of
the negotiation forms part of the CBA that it finally entered into with
private respondent.
- Union asserts that management committed "acts of unfair labor
practices by virtue of its contractual commitment made during the
collective bargaining process." The mere fact, however, that the
proposal in question was not included in the CBA indicates that no
contractual commitment thereon was ever made as no agreement had
been arrived at by the parties.
- The purpose of collective bargaining is the reaching of an agreement
resulting in a contract binding on the parties; but the failure to reach an
agreement after negotiations continued for a reasonable period does not
establish a lack of good faith. The statutes invite and contemplate a
collective bargaining contract, but they do not compel one. The duty to
bargain does not include the obligation to reach an agreement.
- The question as to what are mandatory and what are merely
permissive subjects of collective bargaining is of significance on the right
of a party to insist on his position to the point of stalemate. A party may
refuse to enter into a collective bargaining contract unless it includes a
desired provision as to a matter which is a mandatory subject of
collective bargaining; but a refusal to contract unless the agreement
covers a matter which is not a mandatory subject is in substance a
refusal to bargain about matters which are mandatory subjects of
collective bargaining, and it is no answer to the charge of refusal to
bargain in good faith that the insistence on the disputed clause was not
the sole cause of the failure to agree or that agreement was not reached
with respect to other disputed clauses.
- No benefits or privileges previously enjoyed by union and the other
employees were withdrawn as a result of the manner by which private
respondent implemented the wage orders. Granted that private
respondent had granted an across-the-board increase pursuant to RA
6727, that single instance may not be considered an established
company practice. Union's argument in this regard is actually tied up
with its claim that the implementation of Wage Orders Nos. 01 and 02 by
private respondent resulted in wage distortion.

Dispositive Petition DISMISSED.

THE SUBJECTS OF MANDATORY

BARGAINING
BERNARD D. MELTZER
- Collective bargaining alternative to individual bargaining; also
a process for joing determination of web of private rules that
govern and impinge on employment
- Uncertainty exists regarding unions right to participate in
decisions on matters that affect EXISTENCE of jobs rather than
their TERMS and conditions.
- New conditions include the progressive expansion of collective
agreements into new areas. Areas included in the subjects of
mandatory bargaining expanded.
- Issues involved:
- Is a subject within or beyond mandatory bargaining?
- How to balance management interest in innovation and
employee interest in decisions that may affect their
economic lives
- Role of law and economic power in determining area of
negotiation
- Sphere of NLRB, courts, Congress
- Outside US, there are other forms of participation, including
systems of codetermination under w/c workers representatives
join stockholders representatives on directorial boards.
NLRB V. WOOSTER DIV. OF BORG-WARNER CORP.
- Here, employer insisted that collective bargaining contract
include
1. ballot clause calling for prestrike secret vote as to the
employers last offer
2. recognition clause w/c excluded, as party to the contract,
the International Union
- Board held that the employers insistence on the clauses
amounted to refusal to bargain.
- Board held that the clauses do not come within scope of
mandatory collective bargaining.
- SC sustained the Boards order directing employer to cease
insisting upon either clause.
- International was certified by the Board to the Wooster Division
of the Borg-Warner Corp as the elected representative.
International chartered a local. Together the unions presented a
comprehensive CBA.
- Company submitted counterproposal. Unions negotiators
objected because a clause disregarded the certification of
International as the employees representative.
The
counterproposal also contained the ballot clause.
- Unions did not accept the clause. They struck, but negotiations
continued.
Finally, the local, upon recommendation of
International, gave in and entered into agreement with both
clauses.
- The obligation to bargain in good faith is limited to subjects
within wages, hours, and other terms and conditions of
employment As to other matters, each party is free to bargain
or not.
- Companys good faith met the requirements as to subjects of
mandatory bargaining. But that doesnt license employer to
refuse to enter into agreements on ground that they dont include
some proposal w/c is not a mandatory subject of bargaining.
Such conduct is a refusal to bargain.
- The two clauses are lawful. But it doesnt follow that because
the company may propose these, it can lawfully insist upon them.
- The issue now becomes WON the two clauses come within the
phrase wages, hours, and other terms
- The ballot clause does not. It relates only to procedure
before strike.

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- The recognition clause also does not come within the definition of
mandatory bargaining. The Act doesnt prohibit voluntary addition
of a party, but that doesnt authorize employer to exclude a certified
representative.
Harlan, J., whom Clark and Whittaker, JJ., join, concurring in part
and dissenting in part
- I must state that I am unable to grasp a concept of bargaining which
enables one to propose a particular point, but not to insist on it as a
condition to agreement.
- The ballot clause should come within other terms and conditions It
affects employer-employee relationship, determines timing of strikes or
even whether a strike will occur.
- Nonetheless, I accept Courts holding that this clause is not a condition
of employment.
- Bargaining process should be fluid.
- WON party bargained in good faith depends upon evaluation of total
circumstances.
RAILROAD TELEGRAPHERS V. CHICAGO & NW. RY.
- Norris-LaGuardia Act barred a permanent injunction against a
threatened strike in support of a demand that the railroad should not
abolish preexisting jobs without incumbent unions consent.
- Majority found that the demand fell within bargainable subjects.
- There is nothing strange about agreements that affect permanency of
employment.
FIBREBOARD PAPER PRODUCTS CORP. V. NLRB
- Issue is WON contracting out of work being performed by employees
is a statutory subject of collective bargaining.
- Board adhered to Trial Examiners finding that companys motive in
contracting out was economic rather than antiunion but found
nonetheless that failure to negotiate with union concerning its decision to
subcontract constituted a violation.
- Contracting out work is a matter within phrase other terms and
conditions and is a mandatory subject of collective bargaining.
- In this case, the maintenance work still had to be performed. No
capital investment was contemplated.
Company merely replaced
existing employees with those of an independent contractor. To require
employer to bargain on this would not significantly abridge its freedom to
manage the business.
- Another issue is WON upon finding that the company refused to
bargain on a statutory subject of collective bargaining, Board was
empowered to order resumption of maintenance operations and
reinstatement with back pay. Held: It is so empowered.
Stewart, J., with whom Douglas and Harlan, JJ., join, concurring.
- Court doesnt decide that every managerial decision which terminates
employment is subject to duty to bargain. Nor does Court decide that
subcontracting is as a general matter subject to that duty.
- Industrial experience may be useful in determining proper scope of
duty to bargain.
- Only a narrow concept of conditions of employment will serve
purpose of delineating a limited category of issues w/c are subject to
duty to bargain collectively.
GOLDBERG, MANAGEMENTS RESERVED RIGHTS: A LABOR
VIEW
- Mature bargaining relationships require reliance on acceptance of
rights of each party by the other.
- Business is often conservative on social questions but radical when it
comes to production. Trade unionists and trade unions are radicals in
changing social institutions but they are conservative in approach to
changes in methods of production.
- Employer has right to innovation and change. Employee and union
seek to protect right to certainty / security.
WESTINGHOUSE ELECTRIC CORP.
- Contracting out has been a practice of respondent. Before doing so,
respondent considers economic feasibility of doing the work with unit
employees. It doesnt advise Union each time it awards work to an
outside contractor
- In Fibreboard cases, contracting out is a departure from established
practice. Here, contracting out is motivated solely by economic

Disini

considerations and that it comported with traditional methods.

The respondent did not violate its statutory bargaining obligation.
ALLIED CHEMICAL & ALKALI WORKERS V. PITTSBURGH
PLATE GLASS CO.
- NLRB held that changes in retired employees retirement
benefits are embraced by the bargaining obligation and that
employers unilateral modification of them is an unfair labor
practice. CA disagreed. SC affirmed order of CA.
- Board held that pensioners are employees and members of
the bargaining unit.
- Boards decision is not supported by law. The Act is concerned
with rights of workers, not those who have retired from the work
force. Employee is not to be stretched beyond its plain
meaning.
- Active and retired employees do not share a community of
interests.
Pensioners interests extend only to retirement
benefits. Inclusion of such limited purpose constituency in the
bargaining unit would create potential for severe internal conflicts.
Also, representatives may bargain at the expense of retirees
benefits.
GENERAL ELECTRIC CO. V. NLRB
- GE walked out of meeting with IUE because company objected
to presence on IUE bargaining committee of representatives of
other unions. It feared that IUE was using its request for
preliminary discussion as device to further IUEs desire for joint
company-wide bargaining.
- There have been exceptions to general rule that either side can
choose its bargaining representatives freely, but they have been
rare and confined to situations infected with ill will.
- A union has an interest in using experts to bargain. No good
reason why it may not look to outsiders just as an employer is
free to do so. The IUE technique is in response to companys
past bargaining practices.

7.05 THE COLLECTIVE

BARGAINING AGREEMENT
1. DEFINITION
UNIVERSITY OF THE IMMACULATE
CONCEPCION, INC v. THE HON. SECRETARY
OF LABOR AND EMPLOYMENT, UNIVERSITY
OF THE IMMACULATE CONCEPCION
TEACHING AND NON-TEACHING EMPLOYEES
UNION-FFW
374 SCRA 471
PARDO; January 23, 2002
Nature: Appeal via Certiorari
Facts
- University of the Immaculate Concepcion, Inc. is a non-stock,
non-profit educational institution, who, on 2 occasions, met with
the ICTNE Union-FFW, through the auspices of the National
Conciliation and Mediation Board (NCMB), to negotiate a CBA.
- The Union filed with the NCMB a Notice of Strike, the first in a
series of 3 notices of strike, alleging deadlock in the CBA
negotiations and unfair labor practices on the part of the petition
in the form of "mass termination of teaching and non-teaching
employees, interference with union activities, discrimination, and
harassments."
- The Univ. of IC denied the allegations in its Motion to Strike Out
Notice of Strike.
- During the parties' conciliation conference before the NCMB,
petitioner and the Union reached an agreement on some issues
(ie. ECONOMIC ISSUE~ pertaining to increase in amt of salary

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per increase in tuition fees;

NON-ECONOMIC ISSUES~ union
recognition and security, working schedule)
- The panel of voluntary arbitrators rendered a decision excluding the
secretaries, registrars, cashiers, guidance counselors and the chief of
the accounting department of the petitioner from the coverage of the
bargaining unit.
- The University presented to the Union a draft of the CBA. After a study
thereof, the Union rejected the draft on the ground that the manner of
computing the net incremental proceeds has yet to be agreed upon by
the parties.
- The University wrote the Union insisting that the Union was bound to
comply with the terms contained in the draft-CBA since said draft
allegedly embodies all the items agreed upon by the parties during the
conciliation sessions held by the NCMB.
- the Union filed its Second Notice of Strike with the NCMB, therein
alleging bargaining deadlock on "allocation of 5% (CBA) and
distribution/computation of 70% incremental proceeds (RA6728)", and
unfair labor practice by the petitioner in the form of "harassments, union
busting and correct implementation of COLA,"
- After the Union's filing of its Second Notice of Strike, the University
terminated the employment of 2 union members who later filed their
complaints for illegal dismissal before the Regional Arbitration Branch
No. XI of the NLRC in Davao City.
- In the same venue, the University filed a complaint against the Union
and its officers for unfair labor practices based (ie refusing to answer in
writing, and within 10 days required by law, the cba proposals, refusing
to bargain in good faith, by declaring a deadlock in the cba negotiations
after just two days of negotiations, even if there were so many issues
unresolved and still to be discussed at the bargaining table, etc)
- The case was elevated to the Secretary of Labor. The Union also
pushed through with the strike.
- The Secretary of Labor issued an order assuming jurisdiction over the
labor dispute and directed all workers to return to work within 24 hours
upon receipt of the Order and for management to accept them back
under the same terms and conditions prior to the strike The parties were
further directed to cease and desist from committing any or all acts that
might exacerbate the situation.
- Eventually, the Sec of Labor found that the strike undertaken by the
Union was a valid exercise of the workers' rights under the Labor Code.
The Union observed the mandatory requirements/procedures for a valid
strike and the issues raised in the Notice of Strike i.e., bargaining
deadlock and ULP are strikeable issues specifically provided under
Article 263 (c) of the Labor Code and then directed the University and
the Union to execute a CBA embodying the dispositions contained
herein as well as all items agreed upon by the parties. The CBA shall be
effective for five (5) years starting SY 1995-96, subject to renegotiation
of the economic provisions for the last two (2) years.
- CA affirmed the decision of the Sec of Labor. Hence, this appeal.
ISSUE:
WON the CA erred in affirming the orders of the Secretary of Labor and
Employment.
HELD: NO.
REASONING:
- CA did not err in finding that there was still no new collective
bargaining agreement because the parties had not reached a meeting of
the minds.
- A collective bargaining agreement (CBA) refers to the negotiated
contract between a legitimate labor organization and the employer
concerning wages, hours of work and all other terms and
conditions of employment in a bargaining unit, including
mandatory provisions for grievances and arbitration machineries.
(Manila Fashions v. NLRC) As in all other contracts, there must be
clear indications that the parties reached a meeting of the minds.
- In this case, no CBA could be concluded because of what the union
perceived as illegal deductions from the 70% employees' share in the
tuition fee increase from which the salary increases shall be charged.
Also, the manner of computing the net incremental proceeds was yet to
be agreed upon by the parties.
- Petitioner insisted that a new collective bargaining agreement was
concluded through the conciliation proceeding before the NCMB on all

Disini

issues specified in the notice of strike. Although it is true that the

university and the union may have reached an agreement on the
issues raised during the collective bargaining negotiations, still
no agreement was concluded by them because, among other
reasons, the DOLE Secretary, who assumed jurisdiction on
January 23, 1995 only was set to resolve the distribution of the
salary increase of the covered employees. The Court of Appeals
found that "there are many items in the draft-CBA that were not
even mentioned in the minutes of the July 20, 1994 conference."
- Considering the parties failed to reach an agreement regarding
certain items of the CBA, they still have the duty to negotiate a
new collective bargaining agreement in good faith, pursuant to
the applicable provisions of the Labor Code.
DISPOSITIVE: Petition Denied. The parties are enjoined to
comply with the directive of the Secretary of Labor and
Employment to negotiate a collective bargaining agreement in
good faith.

DAVAO INTEGRATED PORT STEVEDORING

SERVICES v ABARQUEZ (THE ASSOCIATION
OF TRADE UNIONS)
220 SCRA 197
ROMERO; March 19, 1993
NATURE Petition for certiorari
FACTS
Petitioner Davao Integrated Port Stevedoring Services
(petitioner-company) and private respondent ATU-TUCP (Union),
the exclusive collective bargaining agent of the rank and file
workers of petitioner-company, entered into a collective
bargaining agreement (CBA) which, under Sections 1 and 3,
Article VIII thereof, provide for sick leave with pay benefits each
year to its employees who have rendered at least one year of
service with the company.
Upon its renewal, the provisions for sick leave with pay benefits
were reproduced under Sections 1 and 3, Article VIII of the new
CBA, but the coverage of the said benefits was expanded to
include the "present Regular Extra Labor Pool as of the signing
of this Agreement."
During the effectivity of the CBA (a total of three years and nine
months), all the field workers of petitioner who are members of
the regular labor pool and the present regular extra labor pool
who had rendered at least 750 hours up to 1,500 hours were
extended sick leave with pay benefits. Any unenjoyed portion
thereof at the end of the current year was converted to cash and
paid at the end of the said one-year period pursuant to Sections
1 and 3, Article VIII of the CBA. The number of days of their sick
leave per year depends on the number of hours of service per
calendar year in accordance with the schedule provided in
Section 3, Article VIII of the CBA.
The commutation of the unenjoyed portion of the sick leave with
pay benefits of the intermittent workers or its conversion to cash
was, however, discontinued or withdrawn when petitionercompany under a new assistant manager, Mr. Marzo (who
replaced Beltran, Jr. upon the latter's resignation in June 1989,
stopped the payment of its cash equivalent on the ground that
they are not entitled to the said benefits under Sections 1 and 3
of the 1989 CBA.
The Union objected to the said discontinuance of commutation or
conversion to cash of the unenjoyed sick leave with pay benefits
of petitioner's intermittent workers contending that it is a

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deviation from the true intent of the parties that negotiated the CBA; that
it would violate the principle in labor laws that benefits already extended
shall not be taken away and that it would result in discrimination
between the non-intermittent and the intermittent workers of the
petitioner-company.

FACTS
- American Rubber Company, Inc. (ARCI) is a domestic
corporation existing in and incorporated under the laws of the
Philippines. It owns a rubber plantation in Latuan, Isabella. It
entered into a Farm Management Agreement (FMA) with Sime
Darby Pilipinas, Inc. (SDPI), where SDPI was given the right to
Upon failure of the parties to amicably settle the issue on the
manage, administer, develop, cultivate, and improve the rubber
interpretation of Sections 1 and 3, Article VIII of the 1989 CBA, the
plantations as an agro-industrial development project,
Union brought the matter for voluntary arbitration before the National
specifically for planting rubber trees, processing of and
Conciliation and Mediation Board, Regional Arbitration Branch XI at
marketing of its products and providing technical expertise for a
Davao City by way of complaint for enforcement of the CBA. The parties
period of twenty-five years, or up to the year 2011.
mutually designated public respondent Abarquez, Jr. to act as voluntary
- National Federation of Labor (NFL) was the duly registered
arbitrator.
bargaining agent of the daily-and-monthly-paid rank-and-file
After the parties had filed their respective position papers, public
employees of SDPI in the Latuan rubber plantation. SDPI and
respondent Abarquez, Jr. issued an Award in favor of the Union ruling
NFL executed a collective bargaining agreement (CBA) in which
that the regular intermittent workers are entitled to commutation of their
they agreed that in case of permanent or temporary lay-off,
unenjoyed sick leave with pay benefits under Sections 1 and 3 of the
workers affected would be entitled to termination pay as
1989 CBA. Petitioner-company disagreed with the aforementioned ruling
provided by the Labor Code. The 150 petitioners were dailyof public respondent, hence, the instant petition.
and-monthly-paid employees of SDPI in the Latuan plantation
Petitioner-company argued that it is clear from the language and intent
and were, likewise, members of NFL.
of the last sentence of Section 1, Article VIII of the 1989 CBA that only
- In 1988, RA 6657, aka Comprehensive Agrarian Reform Law
the regular workers whose work are not intermittent are entitled to the
took effect.
benefit of conversion to cash of the unenjoyed portion of sick leave, thus:
- SDPI decided to cease its operations in certain plants, including
". . . And provided, however, that only those regular workers of the
the one in Latuan.
Company whose work are not intermittent are entitled to the herein sick
- The employees were given month pay for every year of
leave privilege."
service as separation pay, pursuant to the CBA. They were
ISSUE
made to sign quitclaim, which they said they entered into
WON public respondents interpretation of Sections 1 and 3, Article VIII
voluntarily.
of the 1989 CBA is correct
- A few months later, they filed a complaint for illegal dismissal
and insufficiency of separation pay.
HELD YES.
- Labor arbiter, NLRC, and CA all found that there was no illegal
A collective bargaining agreement (CBA), as used in Article 252 of the
dismissal and that the employees were properly paid their
Labor Code, refers to a contract executed upon request of either the
separation pay.
employer or the exclusive bargaining representative incorporating the
agreement reached after negotiations with respect to wages, hours of
ISSUE
work and all other terms and conditions of employment, including
WON the employees separation pay was insufficient.
proposals for adjusting any grievances or questions arising under such
agreement.
HELD
While the terms and conditions of a CBA constitute the law between the
NO.
parties, it is not, however, an ordinary contract to which is applied the
- The employees argue that they should have gotten 1 month per
principles of law governing ordinary contracts. A CBA, as a labor
year of service, pursuant to company policy. The precedents
contract within the contemplation of Article 1700 of the Civil Code of the
they site are not applicable.
Philippines which governs the relations between labor and capital, is not
- A collective bargaining agreement refers to the negotiated
merely contractual in nature but impressed with public interest, thus, it
contract between the legitimate labor organization and the
must yield to the common good. As such, it must be construed liberally
employer concerning wages, hours of work and all other terms
rather than narrowly and technically, and the courts must place a
and conditions of employment in the bargaining unit. During the
practical and realistic construction upon it, giving due consideration to
negotiations, the parties, management and union meet and
the context in which it is negotiated and purpose which it is intended to
convene promptly and expeditiously in good faith for the purpose
serve.
of negotiating an agreement. Had the daily-paid rank-and-file
It is thus erroneous for petitioner to isolate Section 1, Article VIII of the
employees deemed the same to be a diminution of their benefits,
1989 CBA from the other related section on sick leave with pay benefits,
they should have rejected the CBA. The petitioners never
specifically Section 3 thereof, in its attempt to justify the discontinuance
assailed the CBA as prejudicial to them or for having been in
or withdrawal of the privilege of commutation or conversion to cash of
violation of Article 100 of the Labor Code. Unless annulled, the
the unenjoyed portion of the sick leave benefit to regular intermittent
CBA, as a contract governing the employer and the employees
workers. The manner they were deprived of the privilege previously
respecting the terms of employment, should prevail.
recognized and extended to them by petitioner-company during the
- If the separation pay was supposed to be 1 month per year of
lifetime of the CBA of October 16, 1985 until three months from its
service, why wasnt it specified in the CBA? Instead, the CBA
renewal on April 15, 1989, or a period of three years and nine months, is
says as provided by the LC. Art. 283 provides that in case of
not only tainted with arbitrariness but likewise discriminatory in nature.
closure or cessation of operations, the separation pay shall be
equivalent to 1 month pay or to at least month per year of
Dispositive Petition dismissed
service, whichever is higher. In this case, the latter is higher, so
thats what the company gave them.
Disposition Petition DENIED.

NATIONAL FEDERATION OF LABOR v. CA (SIME

DARBY PILIPINAS INC)
440 SCRA 604
CALLEJO, SR.; October 19, 2004
NATURE Petition for review of the decision of the CA

RIVERA v ESPIRITU
374 SCRA 351
QUISUMBING; January 23, 2002
NATURE
Special civil action for certiorari and prohibition

Labor Law 2

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A2010 - 175-

FACTS
-PAL pilots affiliated with the Airline Pilots Association of the Philippines
(ALPAP) went on a three-week strike, causing serious losses to the
financially beleaguered flag carrier. As a result, PAL's financial situation
went from bad to worse. Faced with bankruptcy, PAL adopted a
rehabilitation plan and downsized its labor force by more than one-third.
-PALEA went on strike to protest the retrenchment measures adopted
by the airline, which affected 1,899 union members. The strike ended
four days later, when PAL and PALEA agreed to a more systematic
reduction in PAL's work force and the payment of separation benefits to
all retrenched employees.
-then President Joseph E. Estrada issued Administrative Order No. 16
creating an Inter-Agency Task Force (Task Force) to address the
problems of the ailing flag carrier
-PAL management submitted to the Task Force an offer by private
respondent Lucio Tan, Chairman and Chief Executive Officer of PAL, of
a plan to transfer shares of stock to its employees
-PALEA informed the Department of Labor and Employment (DOLE)
that it had no objection to a referendum on the Tan's offer. 2,799 out of
6,738 PALEA members cast their votes in the referendum under DOLE
supervision held on September 21-22, 1998. Of the votes cast, 1,055
voted in favor of Tan's offer while 1,371 rejected it
-PAL ceased its operations and sent notices of termination to its
employees.
Two days later, the PALEA board wrote President Estrada anew,
seeking his intervention. PALEA offered a 10-year moratorium on strikes
and similar actions and a waiver of some of the economic benefits in the
existing CBA. Tan, however, rejected this counter-offer
-PALEA board again wrote the President. Among the signatories to the
letter were herein petitioners Rivera, Ramiso, and Aranas, as officers
and/or members of the PALEA Board of Directors. PAL management
accepted the PALEA proposal and the necessary referendum was
scheduled.
-PALEA members cast their votes in a DOLE-supervised referendum. Of
the votes cast, 61% were in favor of accepting the PAL-PALEA
agreement, while 34% rejected it.
-seven officers and members of PALEA filed this instant petition to annul
the September 27, 1998 agreement entered into between PAL and
PALEA
ISSUE
WON the PAL-PALEA agreement of September 27, 1998, stipulating the
suspension of the PAL-PALEA CBA unconstitutional and contrary to
public policy?
HELD
NO. petitioners contend that the controverted PAL-PALEA agreement is
void because it abrogated the right of workers to self-organization and
their right to collective bargaining. Petitioners claim that the agreement
was not meant merely to suspend the existing PAL-PALEA CBA, which
expires on September 30, 2000, but also to foreclose any renegotiation
or any possibility to forge a new CBA for a decade or up to 2008. It
violates the "protection to labor" policy laid down by the Constitution.
Under Article 253-A of the Labor Code, insofar as representation is
concerned, a CBA has a term of five years, while the other provisions,
except for representation, may be negotiated not later than three years
after the execution. Petitioners submit that a 10-year CBA suspension is
inordinately long, way beyond the maximum statutory life of a CBA,
provided for in Article 253-A. By agreeing to a 10-year suspension,
PALEA, in effect, abdicated the workers' constitutional right to bargain
for another CBA at the mandated time.
-HOWEVER, A CBA is "a contract executed upon request of either
the employer or the exclusive bargaining representative
incorporating the agreement reached after negotiations with
respect to wages, hours of work and all other terms and conditions
of employment, including proposals for adjusting any grievances
or questions arising under such agreement.'' The primary purpose of
a CBA is the stabilization of labor-management relations in order to
create a climate of a sound and stable industrial peace. In construing a
CBA, the courts must be practical and realistic and give due
consideration to the context in which it is negotiated and the purpose

which it is intended to serve. The assailed PAL-PALEA

agreement was the result of voluntary collective bargaining
negotiations undertaken in the light of the severe financial
situation faced by the employer, with the peculiar and unique
intention of not merely promoting industrial peace at PAL, but
preventing the latter's closure. We find no conflict between said
agreement and Article 253-A of the Labor Code. Article 253-A
has a two-fold purpose. One is to promote industrial stability and
predictability. Inasmuch as the agreement sought to promote
industrial peace at PAL during its rehabilitation, said agreement
satisfies the first purpose of Article 253-A. The other is to assign
specific timetables wherein negotiations become a matter of right
and requirement. Nothing in Article 253-A, prohibits the parties
from waiving or suspending the mandatory timetables and
agreeing on the remedies to enforce the same.
In the instant case, it was PALEA, as the exclusive bargaining
agent of PAL's ground employees, that voluntarily entered into
the CBA with PAL. It was also PALEA that voluntarily opted for
the 10-year suspension of the CBA. Either case was the union's
exercise of its right to collective bargaining. The right to free
collective bargaining, after all, includes the right to suspend it.
Disposition Petition DISMISSED

2. CONTENTS
SEE SAMPLE CBA
EFFECT SUBSTANDARD CONTRACT

ART. 239. Grounds for cancellation of union registration. The following shall constitute grounds for cancellation of
union registration:
(f) Entering into collective bargaining agreements which
provide terms and conditions of employment below minimum
standards established by law;
* remember! A239 has been amended by RA 8491

DURATION AND RE-NEGOTIATION

GRIEVANCE PROCEDURE
ART. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties may
enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining
agent shall be entertained and no certification election shall
be conducted by the Department of Labor and Employment
outside of the sixty-day period immediately before the date of
expiry of such five-year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3)
years after its execution. Any agreement on such other
provisions of the Collective Bargaining Agreement entered
into within six (6) months from the date of expiry of the term
of such other provisions as fixed in such Collective
Bargaining Agreement, shall retroact to the day immediately
following such date. If any such agreement is entered into
beyond six months, the parties shall agree on the duration of
retroactivity thereof. In case of a deadlock in the renegotiation
of the Collective Bargaining Agreement, the parties may
exercise their rights under this Code. (As amended by
Section 21, Republic Act No. 6715, March 21, 1989).

LUZON DEVELOPMENT BANK V ASSOCIATION

OF DEVELOPMENT BANK EMPLOYEES
249 SCRA 162

ART. 260. Grievance machinery and voluntary

arbitration. - The parties to a Collective Bargaining
A2010
Agreement shall include therein provisions that will
ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the
adjustment and resolution of grievances arising from
the interpretation or implementation of their Collective
Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel
policies.
All grievances submitted to the grievance machinery
which are not settled within seven (7) calendar days
from the date of its submission shall automatically be
referred to voluntary arbitration prescribed in the
Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining
Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators,
or include in the agreement a procedure for the
selection of such Voluntary Arbitrator or panel of
Voluntary Arbitrators, preferably from the listing of
qualified Voluntary Arbitrators duly accredited by the
Board. In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary Arbitrators, the Board
shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant
to the selection procedure agreed upon in the
Collective Bargaining Agreement, which shall act with
the same force and effect as if the Arbitrator or panel
of Arbitrators has been selected by the parties as
described above.

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- 176-

ROMERO; October 6, 1995

NATURE
Petition for certiorari and prohibition seeking to set aside the decision of
the Voluntary Arbitrator and to prohibit her from enforcing the same
FACTS
-Luzon Development Bank (LDB) and the Association of Luzon
Development Bank Employees (ALDBE) submitted to arbitration to
resolve WON the company has violated the Collective Bargaining
Agreement provision and the Memorandum of Agreement dated April
1994, on promotion
-The parties agreed to submit their respective Position Papers on
December 1-15, 1994.
-Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received
ALDBE's Position Paper on January 18, 1995.
-LDB, on the other hand, failed to submit its Position Paper
-On May 24, 1995, without LDB's Position Paper, the Voluntary
Arbitrator rendered a decision finding that the Bank has not adhered to
the Collective Bargaining Agreement provision nor the Memorandum of
Agreement on promotion.
-Hence, this petition
ISSUE
WON the Voluntary Arbitrator erred in finding that the Bank has
not adhered to the Collective Bargaining Agreement provision nor
the Memorandum of Agreement on promotion
(the Court referred the case to the CA so the issue wasnt
resolvedit said that elevating a decision or award of a voluntary
arbitrator to the Supreme Court on a petition for certiorari is in
effect equating the voluntary arbitrator with the NLRC or the Court
of Appeals, which in its view is illogical and imposes an
unnecessary burden upon it)
HELD
(only obiter pertaining to topic)
-In labor law context, arbitration is the reference of a labor dispute to an
impartial third person for determination on the basis of evidence and
arguments presented by such parties who have bound themselves to
accept the decision of the arbitrator as final and binding.

Disini

-Arbitration may either be compulsory or voluntary.

-Compulsory arbitration is a system whereby the parties to a
dispute are compelled by the government to forego their right to
strike and are compelled to accept the resolution of their dispute
through arbitration by a third party.
-Under voluntary arbitration, on the other hand, referral of a
dispute by the parties is made, pursuant to a voluntary
arbitration clause in their collective agreement, to an
impartial third person for a final and binding resolution.
Ideally, arbitration awards are supposed to be complied with by
both parties without delay, such that once an award has been
rendered by an arbitrator, nothing is left to be done by both
parties but to comply with the same. After all, they are presumed
to have freely chosen arbitration as the mode of settlement for
that particular dispute. Pursuant thereto, they have chosen a
mutually acceptable arbitrator who shall hear and decide their
case. Above all, they have mutually agreed to de bound by said
arbitrator's decision.
-In the Philippine context, the parties to a Collective
Bargaining Agreement (CBA) are required to include therein
provisions for a machinery for the resolution of grievances
arising from the interpretation or implementation of the CBA
or company personnel policies.
-For this purpose, parties to a CBA shall name and designate
therein a voluntary arbitrator or a panel of arbitrators, or include
a procedure for their selection, preferably from those accredited
by the National Conciliation and Mediation Board (NCMB).
Disposition
The Court resolved to REFER this case to the Court of Appeals

NAVARRO V DAMASCO, BUSCO SUGAR

MILLING
246 SCRA 260
QUIASON; June 16, 1969
NATURE
Petition for certiorari to reverse the Decision of the Voluntary
Arbitrator Damasco, declaring as valid the separation from
employment of petitioner
FACTS
- Navarro III was employed as typist of BUSCO Sugar Milling at
its plant in Quezon, Bukidnon.
- One time, he went to visit Mercy Baylas, a co-employee he was
courting, at the ladies' dormitory inside the compound of the
company. Upon seeing him, Baylas hid behind the divider at the
reception room. He still saw her, followed her, and after taking
hold of her left hand, pulled her towards him. The force caused
her to fall on the floor. He then placed himself on top of her. The
dormitory housekeeper, responded to Baylas' shouts for help.
- According to the medical report issued by Dr. Maraat, Baylas
complained of pains on her shoulder and left foot.
- Navarro was then informed of the complaint against him and
was placed under preventive suspension. He was dismissed
from the service for having violated paragraph 3.B (Conduct and
Behavior) of the Code of Employee Discipline. This includes:
inflicting bodily injury, immoral conduct within company premises,
improper conduct and acts of gross discourtesy or disrespect.
- President of the Mindanao Sugar Workers Union, for and in
behalf of petitioner, and Jaime J. Javier, Personnel Officer of the
company, agreed to submit the case of petitioner to voluntary
arbitration.
- Navarro contends that the grievance procedure was not
followed hence the Voluntary Arbitrator should not have taken
cognizance of the case.
ISSUE

Labor Law 2

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WON grievance machinery provisions 3 should have been invoked

HELD
NO
Reasoning The instant case is not a grievance that must be submitted
to the grievance machinery. What are subject of the grievance
procedure for adjustment and resolution are grievances arising from the
interpretation or implementation of the collective bargaining
agreement.
- The acts of petitioner involved a violation of the Code of Employee
Discipline, particularly the provision penalizing the immoral conduct of
employees. There was no justification for petitioner to invoke the
grievance machinery provisions.
Disposition Decision of Voluntary Arbitrator is AFFIRMED.

SMC v. CONFESSOR
(cha Mendoza)
GENERAL MILLING CORPORATION v CA (GMC
INDEPENDENT LABOR UNION)
422 SCRA 514
QUISUMBING; February 11, 2004
FACTS
-GMC employed 190 workers in its two plants, all of whom were
members of GMC-ILO (duly certified bargaining agent). GMC and the
union concluded a CBA) which included the issue of representation
effective for a term of three years. The CBA was effective for three
years, to expire on November 30, 1991.
-A day before the expiration of the CBA, the union sent GMC a proposed
CBA, with a request that a counter-proposal be submitted within 10
days. As early as October 1991, however, GMC had received collective
and individual letters from workers who stated that they had withdrawn
from their union membership, on grounds of religious affiliation and
personal differences. Believing that the union no longer had standing to
negotiate a CBA, GMC did not send any counter-proposal, believing that
there was no basis to negotiate with a union which no longer existed.
-The union officers disclaimed any massive disaffiliation or resignation
from the union and submitted a manifesto, signed by its members,
stating that they had not withdrawn from the union.
-GMC dismissed Tumbiga, a union member, on the ground of
incompetence. The union protested and requested GMC to submit the
matter to the grievance procedure provided in the CBA. GMC denied the
unions request. Thus, the union filed a complaint against GMC with the
Labor Arbiter alleging ULP for: (1) refusal to bargain collectively; (2)
interference with the right to self-organization; and (3) discrimination.
The labor arbiter dismissed the case with the recommendation that a
petition for certification election be held to determine if the union still
enjoyed the support of the workers.
- Upon appeal, the NLRC reversed the LAs decision. But NLRC later
reversed its own decision. The CA reinstated NLRCs first decision,
ruling in favor of the union.
ISSUE
1. WON GMC is guilty of ULP for violating the duty to bargain
collectively and/or interfering with the right of its employees to selforganization
2. WON the CA erred in imposing upon GMC the draft CBA proposed by
the union for two years to begin from the expiration of the original CBA.
HELD
1. YES

Section 2, Article X of the Collective Bargaining Agreement specifies the instances when the
grievance machinery may be availed of, thus: "Any protest or misunderstanding concerning any
ruling, practice or working conditions in the Company, or any dispute arising as to the meaning,
application or claim of violation of any provision of this Agreement or any complaint that any
employee may have against the COMPANY shall constitute a grievance."

Disini

ART. 253-A of the LC mandates that the representation provision

of a CBA should last for five years. The relation between labor
and management should be undisturbed until the last 60 days of
the fifth year. Hence, it is indisputable that when the union
requested for a renegotiation of the economic terms of the CBA,
it was still the certified collective bargaining agent of the workers,
because it was seeking said renegotiation within 5 years from
the date of effectivity of the CBA. The unions proposal was also
submitted within the prescribed 3-year period from the date of
effectivity of the CBA, albeit just before the last day of said
period. It was obvious that GMC had no valid reason to refuse to
negotiate in good faith with the union.
For refusing to send a counter-proposal to the union and to
bargain anew on the economic terms of the CBA, the company
committed an unfair labor practice under Article 248 of the Labor
Code, which provides that:
ART. 248. Unfair labor practices of employers. It shall be
unlawful for an employer to commit any of the following unfair
labor practice:
(g) To violate the duty to bargain collectively as prescribed by
this Code;
Article 252 of the Labor Code elucidates the meaning of the
phrase duty to bargain collectively, thus:
ART. 252. Meaning of duty to bargain collectively. The duty to
bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement....
The crucial question whether or not a party has met his statutory
duty to bargain in good faith typically turn on the facts of the
individual case. There is no per se test of good faith in
bargaining. Good faith or bad faith is an inference to be drawn
from the facts. The effect of an employers or a unions actions
individually is not the test of good-faith bargaining, but the impact
of all such occasions or actions, considered as a whole.
Under Article 252, both parties are required to perform their
mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an
agreement. The union lived up to this obligation when it
presented proposals for a new CBA to GMC within 3 years from
the effectivity of the original CBA. But GMC failed in its duty
under Article 252. What it did was to devise a flimsy excuse, by
questioning the existence of the union and the status of its
membership to prevent any negotiation.
It bears stressing that the procedure in collective bargaining
prescribed by the Code is mandatory because of the basic
interest of the state in ensuring lasting industrial peace. Thus:
ART. 250. Procedure in collective bargaining. The following
procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall
serve a written notice upon the other party with a statement of its
proposals. The other party shall make a reply thereto not later
than ten (10) calendar days from receipt of such notice.
GMCs failure to make a timely reply to the proposals presented
by the union is indicative of its utter lack of interest in bargaining
with the union. Its excuse that it felt the union no longer
represented the workers, was mainly dilatory as it turned out to
be utterly baseless.
GMCs refusal to make a counter-proposal to the unions
proposal for CBA negotiation is an indication of its bad faith.
Where the employer did not even bother to submit an answer to
the bargaining proposals of the union, there is a clear evasion of
the duty to bargain collectively.
2. NO.
The Code provides:
ART. 253. Duty to bargain collectively when there exists a
collective bargaining agreement. ....It shall be the duty of both
parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during
the 60-day period [prior to its expiration date] and/or until a new
agreement is reached by the parties.
The provision mandates the parties to keep the status quo while
they are still in the process of working out their respective

(A231 contd)

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proposal and counter proposal. The general rule is that when a CBA
already exists, its provision shall continue to govern the relationship
between the parties, until a new one is agreed upon. The rule
necessarily presupposes that all other things are equal. That is, that
neither party is guilty of bad faith. However, when one of the parties
abuses this grace period by purposely delaying the bargaining process,
a departure from the general rule is warranted.
It would be unfair to the union and its members if the terms and
conditions contained in the old CBA would continue to be imposed on
GMCs employees for the remaining two (2) years of the CBAs duration.
We are not inclined to gratify GMC with an extended term of the old CBA
after it resorted to delaying tactics to prevent negotiations. Since it was
GMC which violated the duty to bargain collectively, based on Kiok Loy
and Divine Word University of Tacloban, it had lost its statutory right to
negotiate or renegotiate the terms and conditions of the draft CBA
proposed by the union.
Under ordinary circumstances, it is not obligatory upon either side of a
labor controversy to precipitately accept or agree to the proposals of the
other. But an erring party should not be allowed to resort with impunity to
schemes feigning negotiations by going through empty gestures. Thus,
by imposing on GMC the provisions of the draft CBA proposed by the
union, the interests of equity and fair play were properly served and both
parties regained equal footing, which was lost when GMC thwarted the
negotiations for new economic terms of the CBA.

3. REGISTRATION-231

ART. 231. Registry of unions and file of collective

bargaining agreements. - The Bureau shall keep a registry
of legitimate labor organizations. The Bureau shall also
maintain a file of all collective bargaining agreements and
other related agreements and records of settlement of
labor disputes and copies of orders and decisions of
voluntary arbitrators. The file shall be open and accessible
to interested parties under conditions prescribed by the
Secretary of Labor and Employment, provided that no
specific information submitted in confidence shall be
disclosed unless authorized by the Secretary, or when it is
at issue in any judicial litigation, or when public interest or
national security so requires.
Within thirty (30) days from the execution of a Collective
Bargaining Agreement, the parties shall submit copies of
the same directly to the Bureau or the Regional Offices of
the Department of Labor and Employment for registration,
accompanied with verified proofs of its posting in two
conspicuous places in the place of work and ratification by
the majority of all the workers in the bargaining unit. The
Bureau or Regional Offices shall act upon the application
for registration of such Collective Bargaining Agreement
within five (5) calendar days from receipt thereof. The
Regional Offices shall furnish the Bureau with a copy of the
Collective Bargaining Agreement within five (5) days from
its submission.

4. CONTRACT BENEFICIARIES- 255

BENEFICIARIES
NEW PACIFIC TIMBER & SUPPLY CO. V NLRC (BUAT
ET AL)
328 SCRA 404
KAPUNAN; March 17, 2000

The Bureau or Regional Office shall assess the

employer for every Collective Bargaining Agreement a
178registration fee of not less than one thousand pesos
(P1,000.00) or in any other amount as may be
deemed appropriate and necessary by the Secretary
of Labor and Employment for the effective and
efficient administration of the Voluntary Arbitration
Program. Any amount collected under this provision
shall accrue to the Special Voluntary Arbitration Fund.
The Bureau shall also maintain a file and shall
undertake or assist in the publication of all final
decisions, orders and awards of the Secretary of
Labor and Employment, Regional Directors and the
Commission. (As amended by Section 15, Republic
Act No. 6715, March 21, 1989).

Disini

ART. 255. Exclusive bargaining representation and

workers participation in policy and decision-making.
- The labor organization designated or selected by
the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive
representative of the employees in such unit for the
purpose of collective bargaining. However, an
individual employee or group of employees shall
have the right at any time to present grievances to
their employer.
Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules
and regulations as the Secretary of Labor and
Employment may promulgate, to participate in policy
and decision-making processes of the establishment
where they are employed insofar as said processes
will directly affect their rights, benefits and welfare.
For this purpose, workers and employers may form
labor-management councils: Provided, That the
representatives of the workers in such labormanagement councils shall be elected by at least
the majority of all employees in said establishment.
(As amended by Section 22, Republic Act No. 6715,
March 21, 1989).
NATURE
Petition for certiorari with prayer for issuance of preliminary
injunction
FACTS
- The National Federation of Labor (NFL) was certified as the
sole and exclusive bargaining representative of all regular rankand-file EEs of petitioner. NFL began negotiations which
petitioner resisted, prompting NFL to file a complaint for unfair
labor practices (ULP) on the ground of refusal to bargain
collectively. The Executive Labor Arbiter declared petitioner
guilty of ULP and the CBA proposals of NFL as the CBA
between the bargaining unit and petitioner.
- Petitioner appealed, which was dismissed by NLRC, as with its
MFR. Its petition for certiorari was later denied by the Court as
well. The records were remanded to the arbitration branch of
origin wherein Labor Arbiter Villena ordered petitioner to pay 142
EEs the benefits and amounts due to them under the CBA.
Petitioner complied, quitclaims were executed, and NFL
manifested it would not appeal.
-Still, a petition for relief was later filed by 186 of the private
respondents (Aklit and 350 others) claiming to have been
excluded from enjoying the benefits of the CBA. NLRC issued an
order granting said CBA benefits. Petitioner filed an MFR.
Private respondents, including the 186, filed individual money
claims, all of which were dismissed and EEs appealed. NLRC
issued a resolution directing petitioner to pay individual claimants
their CBA benefits in the aggregate amount of P13,559,510.
Hence this petition.

Labor Law 2

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A2010 - 179-

ISSUE/S
WON NLRC committed grave abuse of discretion in ruling that private
respondents Aklit and 350 others are entitled to the CBA benefits
despite the fact that they werent members of the bargaining unit during
the CBAs term, and werent even EEs of petitioner
HELD
1. NO
Ratio In a long line of cases, the Court has held that when a collective
bargaining contract is entered into by the union representing the EEs
and ER, even the non-member EEs are entitled to the benefits of the
contract.
Reasoning Petitioner argues that private respondents cannot claim
benefits as they were only hired after the term of the CBA and were thus
not parties to the agreement. However, to grant such benefits only to
members of the union without valid reason would constitute undue
discrimination against nonmembers. A laborer may even claim benefits
from the CBA entered into by the company and union of which he was a
member at the time, after he has resigned from said union.
-Petitioner argues that the CBA benefits sought such as wage increases
in 1985 were stipulated only for the years 1981-84 and as such, there
was no contractual basis for the grant of said benefits from 1985
onwards. However, the Court has held that a CBA, even though it has
expired, continues to have legal effect until a new one is entered into;
parties to the CBA must maintain the status quo during the 60-day
period (to serve written notice to terminate CBA 60-days prior to
expiration) or until a new agreement is reached. To hold otherwise
would be to create a gap during which no agreement at all would govern
from the time the old CBA expires until the new one is entered into.
Disposition Petition for certiorari is dismissed.

5. CONTRACT ADMINISTRATION AND

ENFORCEMENT
5.1 NATURE OF CONTRACT
BABCOCK-HITACHI (PHILS.), INC vs BABCOCKHITACHI (PHILS.), INC., MAKATI EMPLOYEES UNION
(BHPIMEU)
453 SCRA 156
SANDOVAL-GUTIERREZ; Mar 10 , 2005
NATURE
Petition for review on certiorari under Rule 45.
FACTS
Some employees of Babcock-Hitachi Phils were transferred from Makati
to Bauan Batnagas, in line with the companys plan to transfer its Design
Department in order to improve the operating efficiency and coordination
among its various departments.
- The said employees demanded relocation allowance as provided for in
their CBA. However, the company refused saying that under Policy
Statement No. BHPI-G-044A, they are not entitled to it considering that
they are residents of Bauan or its adjacent towns.
ISSUE WON union members are entitled to relocation allowance in light
of the CBA between the parties.
HELD YES.
Ratio Any doubt or ambiguity in the contract between management and
the union members should be resolved in favor of the latter (Article 1702
of the Civil Code)
Contracts which are not ambiguous are to be interpreted according to
their literal meaning and not beyond their obvious intendment.
the terms and conditions of a collective bargaining contract
constitute the law between the parties. Those who are entitled to its
benefits can invoke its provisions.
In the event that an obligation

therein imposed is not fulfilled, the aggrieved party has the right
to go to court for redress. (Mactan Workers Union vs. Aboitiz)
DISPOSITION Petition is DENIED.

MANALANG v. ARTEX DEVT CO, INC

(GIULIA)
MINDANAO STEEL CORP. VS MINSTEEL FREE WORKERS
ORGANIZATION
424 SCRA 614
SANDOVAL-GUTIERREZ; March 4, 2004
FACTS
Mindanao Steel Corporation and Minsteel Free
Workers Organization MINFREWO-NFL Cagayan de Oro City
(Minsteel) executed a CBA providing for an increase of P20.00 in
the workers daily wage.
Prompted by the fuel price increase, the Regional
Tripartite Wages and Productivity Board (RTWPB) of Region X,
Northern Mindanao, Cagayan de Oro City issued an Interim
Wage Order granting an ECOLA/temporary allowance for 3
months pending the approval of the wage increase being
petitioned by the workers. Mindanao refused to implement the
Interim Wage Order, prompting Minsteel to file with the National
Mediation and Conciliation Board (NCMB) a complaint for
payment of ECOLA against the former. Then the parties agreed
to submit the case for voluntary arbitration.
The Voluntary Arbitrator rendered a decision ordering
Mindanao to pay Minsteels members and other workers their
ECOLA. Mindanao then filed a motion for reconsideration which
was denied. Mindanao filed a petitioner for certiorari with the
CA. CA affirmed the decision of the Arbitrator. Hence, this
petition for review on certiorari.
Mindanao contends that it is exempt from paying the
ECOLA because pursuant to the CBA, it already granted a wage
increase of P20.00 a day. Likewise, Mindanao claims it is
entitled to creditable benefits on the basis of Section 7 of Interim
Wage Order No. RX-02 which provides:Wage increases, rice
allowance (in kind or cash), and other allowances granted by
employers to their workers because of, or in anticipation of the
fuel price hikes are creditable, provided that if the amount is
less than that prescribed in this Interim Wage Order, the
employer shall give the difference. Along the same line,
Mindanao maintains that under Section 5 its grant of wage
increase to its workers pursuant to the CBA is considered
compliance with the Order, thus: Section 5. Creditable Benefits Any wage increases or adjustments granted between
November 22, 1990 and January 06, 1991 shall be
considered as compliance with the Order provided that if the
amount is less than that prescribed, the employer shall pay the
difference.
ISSUE
WON Mindanao is exempt from paying the ECOLA in light of the
CBA entered into by the parties.
HELD
NO.
Pertinent is Section 3, Article VII of the CBA which provides: It is
hereby agreed that these salary increases shall be exclusive
of any wage increase that may be provided by law as a
result of any economic change.
The above provision is clear that the salary increases,
such as the P20.00 provided under the CBA, shall not include
any wage increase that may be provided by law as a result of
any economic change. Hence, aside from the P20.00 CBA wage
increase, Minsteels members are also entitled to the ECOLA
under the Interim Wage Order.
In Mactan Workers Union vs. Aboitiz, it was held that the

Labor Law 2

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terms and conditions of a collective bargaining contract constitute

the law between the parties. Those who are entitled to its benefits
can invoke its provisions. In the event that an obligation therein
imposed is not fulfilled, the aggrieved party has the right to go to court
for redress.
Finally, the P20.00 daily wage increase granted by Mindanao to its
employees under the CBA can not be considered as creditable
benefit or compliance with the Interim Wage Order because such was
intended as a CBA or negotiated wage increase and not because
of, or in anticipation of the fuel price hikes on December 5, 1990 x x
x.
Dispositive Petition is DENIED. The assailed Decision dated May 30,
1997 and Resolution dated August 22, 1997 rendered by the CA in are
AFFIRMED.

United Kimberly Employees Union vs Kimberly Clark

484 SCRA 187
Callejo, Sr., ; March 6, 2006
NATURE Petition for Review.Certiorari
FACTS
- Petitioner is the labor union representing rank and file employees of
respondent. Way back in 1980, the parties agreed to include in their
CBA a provision which states that the company agrees to employ
immediate relative of an employee who had retired, resigned, died
provided that the employee had rendered at least ten years service.
There were no other standards set with regard the acceptance of the
said recommendees and as a matter of fact, evem high school
graduates were accepted.
- In 1991, a case was filed against the company for refusing to employ a
nephew of a retiring employee (Kimberly Clark vs Lorredo) as apparently
the retiring employee had children who he did not recommend and the
company was questioning this. In any case, the company lost in this
case but as part of the ruling of the Court, it was stated that Kimberly
was not obliged to unconditionally accept the recommendee since
the latter must still meet the required employment standard
theretofore set by it. Even a qualified recommendee would be hired
only on a probationary status. As such, KCPI was not left without its
own safeguards under the agreement.
- In 1995, the company issued the now questioned guidelines which
among others required that such recommendees must be at least 18
years of age but not more than 30 years old at the time of the hiring, and
(b) have completed, after graduating from high school, at least a twoyear technical/vocational course or a third year level of college
education. Moreover, where both husband and wife are employees of
the company, they shall be treated as one family; hence, only one of the
spouses would be allowed to avail of the benefit.
- The Union and the company agreed to postpone the implementation of
said guidelines until January 1, 1997 but only with respect to the
educational qualification. And the guidelines were in fact implemented in
the second half of 1998. A voluntary arbitrator ruled on the controversy
saying that the company cannot upgrade the educational qualification as
this is contrary to what has been in existence and what had been a
practice.
- Appeal was filed with the CA which reversed the resolution of the
voluntary arbitrator with regard the upgrade of the qualification of the
recommendee. Hence this appeal.
ISSUE/S
WON the CA erred in ruling that, under Article XX, Section 1 of the 1997
CBA, respondent is required to hire only those recommendees of
retired/resigned, deceased or disabled members of petitioner who had
completed at least a two-year technical/vocational course or a third-year
level of college education
HELD
NO. In the present case, the parties are in agreement that, on its face,
Article XX, Section 1 of their 1997 CBA does not contain any provision

Disini

relative to the employment qualification standards of

recommendees of retired/resigned, deceased or disabled
employees of respondent who are members of petitioner.
However, in determining the employment qualification standards
for said recommendees, the VA should have relied on the
November 7, 1995 Guidelines issued by respondent, which
reads:
D. Definition of the phrase immediate member of the family of an
employee
1. The phrase immediate member of the family of an employee
shall refer to the employees legitimate children and in default
thereof to the employees collateral relatives within the third civil
degree.
2. A resigned/retired employee may be allowed to recommend a
collateral relative within the third civil degree (e.g., brother, sister,
nephew or niece) as his/her replacement only in the following
cases:
a. Where the retired/resigned employee is single or if married
has no legitimate children.
b. Where the retired/resigned employees children are still
minors (below 18 years old) at the time of his/her separation
from the company. (Emphasis added)
E.

General Provisions

1. The privilege to recommend a replacement can be exercised

by the employee concerned only once. Thus, in the following
cases, a recommendee who has been hired on probationary
status can no longer be substituted with another recommendee.
a. where the recommendee fails to pass in his performance
evaluation.
b. where the recommendee resigns without completing his
probationary period.
c. where the recommendee is dismissed for cause.
d. where the recommendee dies during his probationary
4[48]
period.
Respondent issued said Guidelines in light of the ruling of this
Court in Kimberly Clark Philippines v. Lorredo. Respondent saw
it imperative to do away with its practice of accommodating
recommendees who were mere high school graduates, and to
require higher employment standards for them.
By agreement of the parties, the implementation of the
Guidelines was deferred until January 1, 1997, unless revoked or
amended by the 1997 CBA. Petitioner proposed that the
practice of hiring recommendees of retired/resigned, deceased
or disabled employees who were union members, who were at
least high school graduates, be included in their CBA, but
respondent did not agree. Hence, Article XX, Section 1 of the
1997 CBA of the parties remained intact. There was thus no
more legal bar for respondent to implement the November 7,
1995 Guidelines. By executing the 1997 CBA, in its present form,
petitioner is bound by the terms and conditions therein set forth.
The Court has recognized in numerous instances the
undoubted right of the employer to regulate, according to his own
discretion and best judgment, all aspects of employment,
including but not limited to, work assignments and supervision,
working methods and regulations, time, place and manner of
work, processes to be followed, and hiring, supervision, transfer,
discipline, lay off, dismissal and recall of workers.
Encompassing though it could be, the exercise of this right is not
absolute. Management prerogative must be exercised in good
faith for the advancement of the employers interest and not for
the purpose of defeating or circumventing the rights of the

Labor Law 2

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employees under special laws, valid agreements such as the individual

contract of employment and the collective bargaining agreement, and
general principles of justice and fair play. 5[49] In this case, the Court finds
that respondent acted in accord with the CBA and the November 7,
1995 Guidelines, which, by agreement of the parties, may be
implemented by respondent after January 1, 1997.
Disposition Petition is denied.

CAINTA CATHOLIC SCHOOL V CAINTA CATHOLIC

SCHOOL EMPLOYEES UNION
489 SCRA 468
TINGA; May 4, 2006
NATURE Petition for review on certiorari under Rule 45 assailing CA
Decision which reversed the Resolutions of the National Labor Relations
Commission
FACTS
- 10 September 1993 > Union held an election of officers, with Mrs.
Llagas being elected as President; Javier, Vice-President; Villegas
- 15 October 1993 > School retired Llagas and Javier, who had rendered
more than 20 years of continuous service, pursuant to Section 2, Article
X of the CBA [An employee may be retired, either upon application by
the employee himself or by the decision of the Director of the School,
upon reaching the age of 60 or after having rendered at least twenty
(20) years of service to the School the last 3 years of which must be
continuous]
- 27 July 1994 > Union filed a complaint for unfair labor practice before
the NLRC
- 31 January 1997 > NLRC rendered a Resolution favoring the School
that the retirement of Llagas and Javier is legal as the School was
merely exercising an option under the CBA
- 9 July 1997 > Union filed a petition for certiorari before this Court and
the Court issued a TRO against the enforcement of the resolutions
- St. Martin Funeral Homes v. NLRC > case was referred to CA
- 20 August 2001 > CA gave due course and granted the petition to
annul and set aside Resolutions of the NLRC; while dismissing the
petition for contempt for lack of merit.
- In reversing NLRC decision, CA construed the retirement of Llagas and
Javier as an act amounting to unfair labor practice as they were a new
and different breed of union leaders assertive, militant and
independent the exact opposite of former union president Victor Javier
who seemed to be passive, cooperative and pacific. The school saw the
two as threats which it could not control, and faced with a very
uncomfortable situation of having to contend with an aggressive union
which just dominated the high school faculty club, the school decided to
nip in the bud the reactivated union by retiring its most prominent
leaders (union busting?)
- The School avers that the retirement of Llagas and Javier was clearly
in accordance with a specific right granted under the CBA and that no
unfair labor practice is committed by management if the retirement was
made in accord with management prerogative or in case of voluntary
retirement, upon approval of management.
- NLRC, however, gave another justification to sustain the validity of the
two union officers forcible retirement:
> retirement of Llagas has become inevitable because, being a
managerial employee by reason of her position as Dean of Student
Affairs, she accepted the Union presidency. She lost the trust and
confidence on her by the SCHOOL as she occupied a managerial
position as Dean of Student Affairs. . . Being also the union president,
she has allowed her loyalties to be divided between the administration
and the union.
> Javiers retirement was decided upon after an evaluation shows that
she was not performing well as her students were complaining about her

Disini

brusque attitude and bad language, aside from being habitually

absent and late
ISSUE
WON the stipulation in a Collective Bargaining Agreement (CBA)
that allows management to retire an employee in its employ for a
predetermined lengthy period but who has not yet reached the
minimum compulsory retirement age provided in the Labor Code
is valid [WON the retirement id valid]
HELD
YES
Ratio By their acceptance of the CBA, the Union and its
members are obliged to abide by the commitments and
limitations they had agreed to cede to management. The
questioned retirement provisions cannot be deemed as an
imposition foisted on the Union, which very well had the right to
have refused to agree to allowing management to retire
employees with at least 20 years of service. It should not be
taken to mean that retirement provisions agreed upon in the CBA
are absolutely beyond the ambit of judicial review and
nullification. A CBA, as a labor contract, is not merely contractual
in nature but impressed with public interest. If the retirement
provisions in the CBA run contrary to law, public morals, or
public policy, such provisions may very well be voided. Certainly,
a CBA provision or employment contract that would allow
management to subvert security of tenure and allow it to
unilaterally retire employees after one month of service cannot
be upheld. Neither will the Court sustain a retirement clause that
entitles the retiring employee to benefits less than what is
guaranteed under Article 287 of the Labor Code, pursuant to the
provisions express proviso thereto in the provision.
Reasoning
- Pursuant to the CBA, School has the option to retire an
employee upon reaching the age limit of 60 or after having
rendered at least 20 years of service to the School, the last 3
years of which must be continuous. Retirement is a different
specie of termination of employment from dismissal for just or
authorized causes under Articles 282 and 283 of the Labor Code.
While in all three cases, the employee to be terminated may be
unwilling to part from service, there are eminently higher
standards to be met by the employer validly exercising the
prerogative to dismiss for just or authorized causes. In those two
instances, it is indispensable that the employer establish the
existence of just or authorized causes for dismissal as spelled
out in the Labor Code. Retirement, on the other hand, is the
result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter after
reaching a certain age agrees and/or consents to sever his
employment with the former.
- ART. 287. Retirement. Any employee may be retired upon
reaching the retirement age established in the collective
bargaining agreement or other applicable employment contract.
In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned under
existing laws and any collective bargaining agreement and other
agreements: Provided, however, That an employees retirement
benefits under any collective bargaining agreement and other
agreements shall not be less than those provided herein.
In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of sixty (60)
years or more, but not beyond sixty-five (65) years which is
hereby declared the compulsory retirement age, who has served
at least five (5) years in the said establishment, may retire and
shall be entitled to retirement pay equivalent to at least one-half
(1/2) month salary for every year of service, a fraction of at least
six (6) months being considered as one whole year.
- CBA established 60 as the compulsory retirement age.
However, it is not alleged that either Javier or Llagas had
reached the compulsory retirement age of 60 years, but instead
that they had rendered at least 20 years of service in the School,

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the last 3 years continuous. Clearly, CBA provision allows the employee
to be retired by the School even before reaching the age of 60, provided
that he/she had rendered 20 years of service. Would such a stipulation
be valid? Jurisprudence affirms the position of the School.
- Pantranco North Express, Inc. v. NLRC > Pantranco allowed the
employee to be compulsorily retired upon reaching the age of 60 or
upon completing 25 years of service. On the basis of the CBA, private
respondent was compulsorily retired by Pantranco at the age of 52, after
25 years of service. Interpreting Article 287, the Court ruled that the
Labor Code permitted employers and employees to fix the applicable
retirement age at below 60 years of age. Moreover, the Court also held
that there was no illegal dismissal since it was the CBA itself that
incorporated the agreement reached between the employer and the
bargaining agent with respect to the terms and conditions of
employment; hence, when the private respondent ratified the CBA with
his union, he concurrently agreed to conform to and abide by its
provisions.
- Progressive Development Corporation v. NLRC > CBA stipulated
that an employee with 20 years of service, regardless of age, may be
retired at his option or at the option of the company. The stipulation was
used by management to compulsorily retire two employees with more
than 20 years of service, at the ages of 45 and 38. The Court affirmed
the validity of the stipulation on retirement as consistent with Article 287
of the Labor Code.
- Philippine Airlines, Inc. v. Airline Pilots Association of the Phils. >
PAL-ALPAP Retirement Plan, the Plan having subsequently been
misquoted in the CBA mutually negotiated by the parties. The Plan
authorized PAL to exercise the option of retirement over pilots who had
chosen not to retire after completing 20 years of service or logging over
20,000 hours for PAL. After PAL exercised such option over a pilot,
ALPAP charged PAL with illegal dismissal and union-busting. While the
Secretary of Labor upheld the unilateral retirement, it nonetheless ruled
that PAL should first consult with the pilot to be retired before it could
exercise such option. The Court struck down that proviso, ruling that the
requirement to consult the pilots prior to their retirement defeats the
exercise by management of its option to retire the said employees,
[giving] the pilot concerned an undue prerogative to assail the decision
of management.
Obiter
- Llagas and Javier were indeed managerial and supervisory employees,
respectively. Having established that Llagas is a managerial employee,
she is proscribed from joining a labor union, more so being elected as
union officer. In the case of Javier, a supervisory employee, she may
join a labor union composed only of supervisory employees. Finding
both union officers to be employees not belonging to the rank-and-file,
their membership in the Union has become questionable, rendering the
Union inutile to represent their cause.

ART. 260. Grievance machinery and voluntary arbitration. The parties to a Collective Bargaining Agreement shall
include therein provisions that will ensure the mutual
observance of its terms and conditions. They shall
establish a machinery for the adjustment and resolution of
grievances
arising
from
the
interpretation
or
implementation of their Collective Bargaining Agreement
and those arising from the interpretation or enforcement of
company personnel policies.
All grievances submitted to the grievance machinery which
are not settled within seven (7) calendar days from the
date of its submission shall automatically be referred to
voluntary arbitration prescribed in the Collective Bargaining
Agreement.
For this purpose, parties to a Collective Bargaining
Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators, or
include in the agreement a procedure for the selection of
such Voluntary Arbitrator or panel of Voluntary Arbitrators,
preferably from the listing of qualified Voluntary Arbitrators
duly accredited by the Board. In case the parties fail to
select a Voluntary Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the Voluntary
Arbitrator or panel of Voluntary Arbitrators, as may be
necessary, pursuant to the selection procedure agreed
upon in the Collective Bargaining Agreement, which shall
act with the same force and effect as if the Arbitrator or
panel of Arbitrators has been selected by the parties as

Disposition
Petition is GRANTED.
REINSTATED.

NLRC Resolution

5.2 GRIEVANCE
PROCEDURE-260;255
DISPUTE
SETTLEMENT:
ISSUES AND INDIVIDUAL
GRIEVANCE

ART. 255. Exclusive bargaining representation and

workers participation in policy and decision-making. - The
labor organization designated or selected by the majority
of the employees in an appropriate collective bargaining
unit shall be the exclusive representative of the
employees in such unit for the purpose of collective
bargaining. However, an individual employee or group of
employees shall have the right at any time to present
grievances to their employer.
Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
regulations as the Secretary of Labor and Employment
may promulgate, to participate in policy and decisionmaking processes of the establishment where they are
employed insofar as said processes will directly affect
their rights, benefits and welfare. For this purpose,
workers and employers may form labor-management
councils: Provided, That the representatives of the
workers in such labor-management councils shall be
elected by at least the majority of all employees in said
establishment. (As amended by Section 22, Republic Act
No. 6715, March 21, 1989).

MASTER IRON LABOR UNION (MILU) v NLRC

(MASTER IRON WORKS AND CONSTRUCTION
CORP
219 SCRA 47
MELO; February 17, 1993
NATURE
Petition for review on certiorari to annul and set aside decision of
NLRC
FACTS
- Master Iron (MI) and its labor union (MILU) entered into a CBA
in Feb 1987. It provided that there shall be no strike and no
lookout, stoppage or shutdown of work, or any other interference
with any of the operation of MI during the term of this CBA,
unless allowed and permitted by law.
- Right after signing the CBA, MI subcontracted outside workers
to do the usual jobs done by its regular workers including those
done outside of the company plant. Thus, regular workers were
scheduled by management to work on a rotation basis allegedly
to prevent financial losses thereby allowing the workers only 10
working days/month. MILU requested implementation of the
grievance procedure which had also been agreed upon in the
CBA, but MI ignored the request.

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- MILU filed a notice of strike, and upon intervention of DOLE, it was

agreed upon that MI would give back the usual work to its regular
employees who were members of MILU
- Notwithstanding the agreement, MI continued the practice of hiring
outside workers. MILU again went on a strike. MI sought to have the
strike declared illegal while MILU filed complaint for unfair labor practice.
- LA and NLRC decided for MI (strike was illegal for failure to exhaust
the provision in the CBA on grievance procedure), hence this petition
ISSUE
1. WON the strike was illegal for failure to exhaust grievance procedure
HELD
1. NO
Ratio MIs refusal to heed MILUs request to undergo the grievance
procedure clearly demonstrated its lack of intent to abide by the terms of
the CBA, thus committing an unfair labor practice
Reasoning MIs failure to traverse MILUs allegation that NLRC abused
its discretion in holding that the provision on grievance procedure had
not been exhausted clearly sustains such allegation and upholds the
MILUs contention that MI refused to undergo said procedure. It should
be remembered that a grievance procedure is part of the continuous
process of collective bargaining. It is intended to promote a friendly
dialogue between labor and management as a means of maintaining
industrial peace.
On nature of the strike:
MILU contend that notwithstanding the CBAs non-strike provision, the
strike was legal because the reasons therefor are non-economic in
nature. On the other hand, in holding that the strike was illegal, NLRC
relied solely on the no-strike no-lockout provision of the CBA. As the SC
has held, a no-strike clause in a CBA is applicable only to economic
strikes. Corollarily, if the strike is founded on an unfair labor practice of
the employer, a strike declared by the union cannot be considered a
violation of the no-strike clause.
- An economic strike is defined as one which is to force wage or other
concessions from the employer which he is not required by law to grant.
Here, MILU enumerated in their notice of strike the ff grounds: violation
of CBA or MIs practice of subcontracting workers; discrimination;
coercion of employees; unreasonable suspension of union officials, and
unreasonable refusal to entertain grievance.
MILU is not asking for an economic benefit not already agreed upon, but
is merely asking for the implementation of the same.
Prof. Perfecto Fernandez: economic strike involves issues relating to
demands for higher wages, higher pension or overtime rates, pensions,
profit sharing, shorter working hours, fewer work days for the same pay,
elimination of night work, lower retirement age, more healthful working
conditions, better health services, sanitation and more safety appliances.
The demands were within the power of MI to grant and therefore the
strike was not an economic strike.
Disposition Petition is granted.

PAL V SANTOS
218 SCRA 415
REGALADO; February 1, 1993

Disini

pursuant to the grievance machinery Step I of the CBA regarding

the illegal/questionable salary deductions and inventory of
bonded goods and merchandise being done by catering service
personnel which they believed should not be their duty.
The grievance was submitted to the office of Mr. Reynaldo Abad
who at the time was on vacation leave.
The grievants thru the shop steward wrote a letter on December
5, 1984 addressed to the office of Mr. Abad, who was still on
leave at the time, that inasmuch as no reply was made to their
grievance which 'was duly received by your secretary' and
considering that petitioner had only five days to resolve the
grievance as provided for in the CBA,
Section 2, Article IV of the PAL-PALEA Collective Bargaining
Agreement (hereinafter, CBA), to wit:
"Section 2-Processing of Grievances xxx STEP 1-Any employee
who believes that he has a justifiable grievance shall take the
matter up with his shop steward. If the shop steward feels there
is justification for taking the matter up with the Company, be shall
record the grievance on the grievance form heretofore agreed
upon by the parties. Two (2) copies of the grievance form
properly filled, accepted, and signed shall then be presented to
and discussed by the shop steward with the division head. The
division head shall answer the grievance within five (5) days from
the date of presentation by inserting his decision on the
grievance form, signing and dating same, and returning one copy
to the shop steward. If the division head fails to act within the five
(5)-day regl(e)mentary period, the grievance must be resolved in
favor of the aggrieved party. If the division head's decision is not
appealed to Step 11, the grievance shall be considered settled
on the basis of the decision made, and shall not be eligible for
further appeal
-said grievance as believed by them was deemed resolved in
their favor.When Mr Abad returned he immediately scheduled a
meeting with the grievants. Thereafter, the individual
respondents refused to conduct inventory works.
Mr. Abad resolved the grievance by denying the petition of
individual respondents and adopted the position that inventory of
bonded good is part of their duty as catering service personnel
and that it was only proper that employees are charged for the
amount due to mishandling of company property which resulted
to losses. They were also suspended for not conducting
inventory work.
Held
It is clear that the grievance was filed with Mr. Abad's secretary
during his absence. Under Section 2 of the CBA aforequoted, the
division head shall act on the grievance within five (5) days from
the date of presentation thereof, otherwise "the grievance must
be resolved in favor of the aggrieved party." It is not disputed
that the grievants knew that division head Reynaldo Abad was
then "on leave" when they filed their grievance which was
received by Abad's secretary.This knowledge, however, should
not prevent the application of the CBA.

Facts
Respondents are Port Stewards of Catering Sub-Department,
Passenger Services Department of PAL who have the following duties
and responsibilities:Prepare meal orders and check-lists, setting up
standard equipment in accordance with the requirements of the type of
service for each flight; skiing, binning and inventorying of Commissary
supplies and equipment.

On this score, respondent NLRC aptly ruled:

"x x x Based on the facts heretofore narrated, division head
Reynaldo Abad had to act on the grievance of complainants
within five days from 21 November 1984. Therefore, when
Reynaldo Abad failed to act within the reglementary period,
complainants, believing in good faith that the effect of the CBA
had already set in, cannot be blamed if they did not conduct
ramp inventory for the days thereafter xxx it is hard to believe
that everything under Abad's authority would have to stand still
during his absence from office. To be sure, it is to be expected
that someone has to be left to attend to Abad's duties.

On various occasions, several deductions were made from their salary

representing losses of inventoried items charged to them for
mishandling of company properties
Respondents, represented by the union, made a formal notice regarding
the deductions to petitioner thru Mr. Reynaldo Abad, Manager for
Catering. PAL did not act on it thus respondents filed a formal grievance

As respondent NLRC has pointed out, Abad's failure to act on

the matter may have been due to petitioner's inadvertance, but it
is clearly too much of an injustice if the employees be made to
bear the dire effects thereof. Much as the latter were willing to
discuss their grievance with their employer, the latter closed the
door to this possibility by not assigning someone else to look

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into "lie matter during Abad's absence. Thus, private respondents should
not be faulted for believing that the effect of the C13A in their favor had
already stepped into the controversy.
Disposition
petition denied, assailed decision of NLRC is affirmed

CALTEX REFINERY EMPLOYEES ASSOCIATION

(CREA) VS.SEC.. BRILLANTES, and CALTEX
(PHILIPPINES
279 SCRA 218
PANGANIBAN; 1997

Disini

Secretary deemed it best to leave the matter to the

agreement of both parties. Finally, the Secretary
advised the parties that the list of accredited voluntary
arbitrators is now being maintained and disseminated
by the National Conciliation and Mediation Board and
no longer by the Bureau of Labor Relations.
ISSUE WON the Honorable Secretary committed grave
abuse of discretion in modifying the grievance machinery
HELD NO.

No particular setup for a grievance machinery is

mandated by law. Rather, Article 260 of the Labor Code,
FACTS
as incorporated by RA 6715, provides for only a single
Anticipating the expiration of their Collective Bargaining
grievance machinery in the company to settle problems
Agreement on July 31, 1995, petitioner CALTEX EMPLOYEES
arising from "interpretation or implementation of their
ASSOC and CALTEX PHIL. negotiated the terms and
collective bargaining agreement and those arising from
conditions of employment to be contained in a new CBA. The
the interpretation or enforcement of company personnel
negotiation between the two parties was participated in by the
policies."
National Conciliation and Mediation Board (NCMB) and the
Office of the Secretary of Labor and Employment. Some items
in the new CBA were amicably arrived at and agreed upon, but Article 260, as amended, reads: Grievance Machinery
and Voluntary Arbitration. The parties to a Collective
others were unresolved.
Bargaining Agreement shall include therein provisions
that will ensure the mutual observance of its terms and
To settle the unresolved issues, eight meetings between the
conditions. They shall establish a machinery for the
parties were conducted. Because the parties failed to reach
adjustment and resolution of grievances arising from
any significant progress in these meetings, petitioner declared
the interpretation or implementation of their Collective
a deadlock. On July 24, 1995, petitioner filed a notice of strike.
Bargaining Agreement and those arising from the
Six (6) conciliation meetings conducted by the NCMB failed to
interpretation or enforcement of company personnel
settle the parties' differences. Then, the parties held marathon
policies.
meetings at the plant level, but this remedy proved also
unavailing.
All grievances submitted to the grievance machinery
which are not settled within seven (7) calendar days
During a strike vote on August 16, 1995, the members of
from the date of its submission shall automatically be
petitioner opted for a walkout. Private respondent then filed
referred to voluntary arbitration prescribed in the
with the Department of Labor and Employment (DOLE) a
Collective Bargaining Agreement. For this purpose,
petition for assumption of jurisdiction in accordance with Article
263 (g) of the Labor Code. Sec. Brillantes assumed jurisdiction. parties to a Collective Bargaining Agreement shall
name and designate in advance a Voluntary Arbitrator
He enjoined any strike or lockout, whether actual or intended.
or panel of Voluntary Arbitrators, or include in the
The parties were further directed to cease and desist from
agreement a procedure for the selection of such
committing any and all acts which might exacerbate the
Voluntary Arbitrator or panel of Voluntary Arbitrators,
situation.
preferably from the listing of qualified Voluntary
Arbitrators duly accredited by the Board. In case the
Several issues on benefits were raised. One of the issues
parties fail to select a Voluntary Arbitrator or panel of
which stood out however was the grievance procedure of the
Voluntary Arbitrators, the Board shall designate the
parties under the CBA. The Secretary ordered that the
Voluntary Arbitrator or panel of Voluntary Arbitrators, as
periods to process/resolve grievances based on existing
may be necessary, pursuant to the selection procedure
practice be reduced from (45) days to (30) days at the first
agreed upon in the Collective Bargaining Agreement,
step and (10) days to seven (7) days at the second step which
which shall act with same force and effect as if the
is the level of the VP for Manufacturing. The Secretary further
Arbitrator or panel of Arbitrators has been selected by
reviewed the steps through which a grievance may be
the parties as described above.
processed and in line with the principle to expedite the early
resolution of grievances, and found that the establishment of a
joint Council as an additional step in the grievance procedure, We believe that the procedure described by public
respondent sufficiently complies with the minimum
may only serve to protract the proceeding and, therefore, no
requirement of the law. Public respondent even
longer necessary. Instead, the unresolved grievance, if, not
provided for two steps in hearing grievances prior to
settled within (7) days at the level of the VP for Manufacturing,
their referral to arbitration. The parties will decide on the
shall automatically be referred by both parties to voluntary
number of arbitrators who may hear a dispute only
arbitration in accordance with R.A. 6715.
when the need for it arises. Even the law itself does not
specify the number of arbitrators. Their alternatives
As to the number of Arbitrators for which the Union proposes
whether to have one or three arbitrators have their
to employ only one instead of a panel of three Arbitrators, the
respective advantages and disadvantages. In this

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Disini

RATIO
Contract in labor law is a term the implications of which must be
determined from the connection in which it appears. Collective
bargaining between employer and the representatives of a unit,
usually a union, results in an accord as to terms which will
govern hiring and work and pay in that unit. The result is not,
however a contract of employment except in rare cases; no one
has a job by reason of it and no obligation to any individual
ordinarily comes into existence from it alone. The negotiations
between union and management result in what often has been
5.3 INDIVIDUAL WORKER AND called a trade agreement, rather than in a contract of
employment.
CONTRACT
After the collective trade agreement is made, the individuals who
J.I. CASE CO. VS NATIONAL LABOR RELATIONS
shall benefit by it are identified by individual hirings. The
BOARD
employer, except as restricted by the collective agreement itself
64 Sup. Ct. 576 99 L. Ed. (44)
and exceptthat he must engage in no unfair labor practice or
discrimination, is free to select those he will employ or discharge.
JACKSON; October 1943
But the terms of the employment already have been traded out.
But however engaged, an employee becomes entitled by virtue
NATURE
of the Labor Relations Act somewhat as a third party beneficiary
Certiorari to review a decree which granted enforcement of an order of
to all benefits of the collective trade agreement, even if on his
the National Relations Board
own he would yield to less favorable terms. The individual
hiring contract is subsidiary to the terms of the trade
FACTS
- Petitioner J.I. Case Company, from 1937 offered each employee an agreement and may not waive any of its ebenfits, any more
individual contract of employment. The contracts were uniform and for a than a shipper can contract away the benefit of filed taiffs.
term of one year. The Company agreed to furnish employment as Concurrent existence of these two types of agreement raises
steadily as conditions permitted, to pay a specified rate, which the problems as to which the National Labor Relations Act makes no
Company might re-determine if the job changed, and to maintain certain express provision. The court however held that individual
hospital facilities. The Employee agreed to accept the provisions, to contracts obtained as the result of an unfair labor practice may
serve faithfully and honestly for the term, to comply with factory rules not be the basis of advantage to the violator of the Act nor of
and that defective work should not be paid for. About 75% of the disadvantage to employees.
employees accepted and worked under these agreements. According to Individual contracts, no matter what the circumstances that
the Boards stipulation and finding, the execution of the contracts was justify their execution or what their terms, may not be availed of
not a condition of employment, nor was the status of individual to defeat or delay the procedures prescribed by the National
employees affected by reason of signing or failing to sign the contracts. Labor Relations Act looking to collective bargaining, nor to
It is not found or contended that the agreements were coerced, obtained exclude the contracting employee from a duly ascertained
by any unfair labor practice, or that they were not valid under the bargaining unit; nor may they be used to forestall bargaining or
to limit or condition the terms of the collective agreement The
circumstances in which they were made.
- While the individual contracts executed were in effect, a C.I>O> union Board asserts a public right vested in it as a public body,
petitioned the Board for certification as the exclusive bargaining charged in the public interest with the duty of preventing unfair
representative of the production and maintenance employees. A hearing labor practices. Whether private contracts conflict with its
was held, at which the Company urged the individual contracts as a bar functions, they obviously must yield or the Act would be
to representation proceedings, the Board, however, directed an election reduced to a futility
which was won by the union. The union was thereupon certified as the It is equally clear since the collective trade agreement is to serve
exclusive bargaining representative of the em0ployees in question in the purpose contemplated by the Act, the individual contract
cannot be effective as a waiver of any benefit to which the
respect to wages, hours and other conditions of employment.
-The union then asked the Company to bargain, it refused, declaring that employee otherwise would be entitled under the trade agreement.
it could not deal with the union in any manner affecting rights and The very purpose of providing by statute for the collective
obligations under the individual contracts while they remained in effect. It agreement is to supersede the terms of separate agreements of
offered to negotiate on matters which did not affect rights under the employees with terms which reflect the strength and bargaining
individual contracts, and said that upon the expiration of the contracts it power and serve the welfare of the group. Its benefits and
advantages are open to every employee of the represented unit,
would bargain as to all matters.
-The Board held that the Company had refused to bargain collectively in whatever the type or terms of his pre-exisitng contract of
violation of S8 of the National Relations Act; and that the contracts had employment.
bee utilized by means of the circulars to impede employees in the But it is urged that some employees may lose by the collective
exercise of rights guaranteed by s7 of the Act, with the result that the agreement, that an individual workman may sometimes have, or
Company had engaged in unfair labor practices within the meaning of s8 be capable of getting better terms than those obtainable by the
(1) of the Act. It ordered the Company to cease and desist from giving group and that his freedom of contract must be respected on that
effect to the contracts, from extending them or entering into new ones, account. The court finds the mere possibility that such
from refusing to bargain and from interfering with the employees; and it agreements might be made no ground for holding generally
required the Company to give notice accordingly and to bargain upon that individual contracts may survive or surmount collective
request. The Circuit Court of Appeals, with modification not in issue here, ones. The practice and philosophy of collective bargaining
looks with suspicion on such individual advantages of
granted an order of enforcement.
course where there is great variation in circumstances of
employment or capacity of employees, it is possible for the
ISSUE
WON the contentions of the Company that the individual contracts collective bargain to prescribe only minimum rates or
precluded a choice of representatives and warranted refusal to bargain masimum hours or expressly to leave certain areas open to
individual bargaining. But except as so provided,
during their duration were properly overruled.
advantages to individuals may prove as disruptive of
industrial peace as disadvantages
HELD
YES
DISPOSITION AFFIRMED

matter, cost is not the only consideration; full deliberation on

the issues is another, and it is best accomplished in a hearing
conducted by three arbitrators. In effect, the parties are
afforded the latitude to decide for themselves the composition
of the grievance machinery as they find appropriate to a
particular situation. At bottom, we cannot really impute grave
abuse of discretion to public respondent on this issue.

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5.4 CONTRACT INFIRMITY

ASSOCIATED LABOR UNIONS VS CALLEJA
173 SCRA 179
REGALADO; May 5, 1989
NATURE Special civil action for certiorari and prohibition
FACTS
- Petitioner Associated Labor Unions instituted this action to overturn the
decision of the respondent director which ordered the holding of a
certification election among the rank-and-file workers of the private
respondent GAW Trading, Inc.
- ALU thru its regional VP Teofanio C. Nuez informed GAW Trading,
Inc. that majority of the latter's employees have authorized ALU to be
their sole and exclusive bargaining representative, and requested GAW
Trading Inc., in the same Letter for a conference for the execution of an
initial CBA
- GAW Trading Inc. responded indicating its recognition of ALU as the
sole and exclusive bargaining agent for the majority of its employees
and for which it set the time for conference and/or negotiation
- ALU in behalf of the majority of the employees of GAW Trading Inc.
signed and executed the CBA
- In the meantime, at a date before the execution of the CBA, the
Southern Philippines Federation of Labor (SPFL) together with
Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a Strike after
it failed to get the management of GAW Trading Inc. to sit for a
conference respecting its demands presented in an effort to pressure
GAW Trading Inc. to make a turnabout of its standing recognition of ALU
as the sole and exclusive bargaining representative of its employees, as
to which strike GAW Trading Inc. filed a petition for Restraining
Order/Preliminary Injunction and which strike Labor Arbiter Bonifacio B.
Tumamak held as illegal
- GAW Lumad Labor Union (GALLU-PSSLU) Federation filed a
Certification Election petition, but as found by Med-Arbiter Candido M.
Cumba in its, without having complied with the subscription requirement
for which it was merely considered an intervenor until compliance
thereof in the other petition for direct recognition as bargaining agent
filed by SPFL as found in the same order
- In the meantime, the CBA executed by ALU and GAW Trading Inc.
was duly filed with the Ministry of Labor and Employment in Region VII,
Cebu city
- Nevertheless, Med-Arbiter Cumba in his order ruled for the holding of a
certification election in all branches of GAW Trading Inc. in Cebu City,
as to which ALU filed a Motion for Reconsideration which was treated as
an appeal on that questioned Order for which reason the entire record of
subject certification case was forwarded for the Director, Bureau of
Labor Relations, Ministry of Labor and Employment, Manila
- BLR Director Cresencio B. Trajano, rendered a Decision granting
ALU's appeal and set aside the questioned Med-Arbiter Order on the
ground that the CBA has been effective and valid and the contract bar
rule is applicable
- The decision of Director Trajano was sought for reconsideration both
by SPFL and the Philppine Social Security Labor Union (PSSLU) which
were opposed by both GAW Trading, Inc. and ALU
- The aforesaid decision was thereafter reversed by respondent director
in her aforecited decision which is now assailed in this action. A motion
for reconsideration of ALU appears to have been disregarded, hence, its
present resort grounded on grave abuse of discretion by public
respondent.
- Public respondent ordered the holding of a certification election ruling
that the "contract bar rule" relied upon by her predecessor does not
apply in the present controversy. According to the decision of said
respondent, the CBA involved herein is defective because it "was not
duly submitted in accordance with Section I, Rule IX, Book V of the
Implementing Rules of BP 130." It was further observed that "there is no
proof tending to show that the CBA has been posted in at least two
conspicuous places in the establishment at least five days before its

Disini

ratification and that it has been ratified by the majority of the

employees in the bargaining unit."
ISSUE
WON the CBA executed by GAW Trading Inc and ALU is
defective.
HELD
YES.
Ratio The CBA in question is defective hence unproductive of
the legal effects attributed to it by the former director in his
decision which was subsequently and properly reversed. The
mechanics of collective bargaining are set in motion only when
the following jurisdictional preconditions are present, namely, (1)
possession of the status of majority representation by the
employees' representative in accordance with any of the means
of selection and/or designation provided for by the Labor Code;
(2) proof of majority representation; and (3) a demand to bargain
under Article 251, paragraph (a), of the New Labor Code.
Reasoning In the present case, the standing of petitioner as an
exclusive bargaining representative is dubious, to say the least.
Respondent company, in a letter and addressed to petitioner,
merely indicated that it was "not against the desire of its workers"
and required petitioner to present proof that it was supported by
the majority thereof in a meeting to be held on the same date.
- The only express recognition of petitioner as said employees'
bargaining representative is in the CBA entered into two days
thereafter. Evidently, there was precipitate haste on the part of
respondent company in recognizing petitioner union, which
recognition appears to have been based on the self-serving
claim of the latter that it had the support of the majority of the
employees in the bargaining unit.
- Furthermore, at the time of the supposed recognition, the
employer was obviously aware that there were other unions
existing in the unit. The unusual promptitude in the recognition of
petitioner union by respondent company as the exclusive
bargaining representative of the workers in GAW Trading, Inc.
under the fluid and amorphous circumstances then obtaining,
was decidedly unwarranted and improvident.
It bears mention that even in cases where it was the then
Minister of Labor himself who directly certified the union as the
bargaining representative, this Court voided such certification
where there was a failure to properly determine with legal
certainty whether the union enjoyed a majority representation. In
such a case, the holding of a certification election at a proper
time would not necessarily be a mere formality as there was a
compelling reason not to directly and unilaterally certify a union.
- An additional infirmity of the CBA involved was the failure to
post the same in at least 2 conspicuous places in the
establishment at least five days before its ratification. In the first
place, the posting of copies of the CBA is the responsibility of the
employer which can easily comply with the requirement through
a mere mechanical act. The purpose of the requirement is
precisely to inform the employees in the bargaining unit of the
contents of said agreement so that they could intelligently decide
whether to accept the same or not. The assembly of the
members of ALU wherein the agreement in question was
allegedly explained does not cure the defect. The contract is
intended for all employees and not only for the members of the
purported representative alone. It may even be said the the need
to inform the non-members of the terms thereof is more exigent
and compelling since, in all likehood, their contact with the
persons who are supposed to represent them is limited.
- Another potent reason for annulling the disputed collective
bargaining is the finding of respondent director that 181 of the
281 workers who "ratified" the same now strongly and
vehemently deny and/or repudiate the alleged negotiations and
ratification of the CBA."
- Basic to the contract bar rule is the proposition that the delay of
the right to select representatives can be justified only where
stability is deemed paramount. Excepted from the contract which
do not foster industrial stability, such as contracts where the

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identity of the representative is in doubt. Any stability derived from such

contracts must be subordinated to the employees' freedom of choice
because it does not establish the type of industrial peace contemplated
by the law.
Disposition WHEREFORE, the order of the public respondent for the
conduct of a certification election among the rank-and-file workers of
respondent GAW Trading Inc. is AFFIRMED.

5.5 CONTRACT DURATION AND

RENEWALS- 253 A
ART. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties may
enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining
agent shall be entertained and no certification election shall
be conducted by the Department of Labor and Employment
outside of the sixty-day period immediately before the date of
expiry of such five-year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3)
years after its execution. Any agreement on such other
provisions of the Collective Bargaining Agreement entered
into within six (6) months from the date of expiry of the term
of such other provisions as fixed in such Collective
Bargaining Agreement, shall retroact to the day immediately
following such date. If any such agreement is entered into
beyond six months, the parties shall agree on the duration of
retroactivity thereof. In case of a deadlock in the
renegotiation of the Collective Bargaining Agreement, the
parties may exercise their rights under this Code. (As
amended by Sec 21, RA No. 6715)

MANILA ELECTRIC CO. v QUISUMBING (MEWA)

302 SCRA 173
MARTINEZ; JAN.27, 1999
NATURE
Petition for certiorari of the order of the Sec. of Labor (SoL)
FACTS
- MERALCOs rank and file union, MEWA (Meralco Workers Assoc.),
informed MERALCO of its intention to re-negotiate the terms and
conditions of their existing 1992-1997 CBA covering the remaining 2
years of said CBA starting from Dec. 1, 1995 to Nov. 30, 1997.
MERALCO, willing to re-negotiate, formed a CBA negotiating panel for
the purpose. After MEWA submitted its proposal, MERALCO presented
a counter-proposal. The collective bargaining negotiations eventually
proceeded, however, despite the series of meetings between the
negotiating panels of MERALCO and MEWA, the parties failed to arrive
at terms and conditions acceptable to both.
- MEWA filed a notice of strike with the NRC National Conciliation and
Mediation Board (NCMB) on the grounds of bargaining deadlock and
unfair labor practices. The NCMB conducted a series of conciliation
meetings but the parties failed to reach an amicable settlement.
MERALCO, faced with the imminence of a strike, filed a petition with the
DOLE praying that the SoL assume jurisdiction over the labor dispute
and to enjoin the striking employees to go back to work. The SoL
granted the petition and enjoined the members of MEWA from
committing any act that may exacerbate the situation.
- After the parties submitted their respective memoranda, the SoL
resolved the labor dispute through an order dated Aug.19, 1996, upon
which MERALCO filed a MFR alleging that the SoL committed grave
abuse of discretion amounting to lack or excess of jurisdiction.

Disini

MERALCO later filed a supplement to the MFR, alleging that the

SoL did not properly appreciate the effect of the awarded wages
and benefits on MERALCOs financial viability. MEWA likewise
filed a motion asking the SoL to reconsider its Order on the wage
increase, leaves, decentralized filing of paternity and maternity
leaves, bonuses, retirement benefits, optional retirement,
medical, dental and hospitalization benefits, short swing and
payroll treatment. On its political demands, MEWA asked the
SoL to rule its proposal to institute a Code of Discipline for its
members and the unions representation in the administration of
the Pension Fund.
- On Dec. 28, 1996, the SoL issued an Order resolving the
parties separate motions stating, among others, that the
effectivity of the agreement was to be RETROACTIVE or from
Dec. 1, 1995 to Nov. 30, 1997.
- Dissatisfied, MERALCO filed this petition contending that the
SoL gravely abused his discretion.
ISSUE
WON the retroactive effectivity of the new CBA set by the SoL
was proper
HELD
NO. There is no sufficient legal ground on the justification for
the retroactive application of the disputed CBA. The CBA
should be effective for a term of 2 years counted from Dec.28,
1996 (the date of the SoLs disputed order) up to Dec.27, 1999.
Reasoning Under Art.253-A, the representation aspect of the
CBA is to be for a term of 5 years while all other provisions of
the CBA shall be re-negotiated not later than 3 years after its
execution. Any agreement on such other provisions of the CBA
entered into within 6 months from the date of expiry of the term
of such other provisions as fixed in such CBA shall retroact to
the day immediately following such date. If such agreement is
entered into beyond 6 months, the parties shall agree on the
duration of the effectivity thereof.
- INTERPRETATION: it is clear that the 5-year term
requirement under Art.253-A is specific to the representation
aspect. What the law additionally requires is that a CBA must
be re-negotiated within 3 years after its execution. If no
agreement is reached within 6 months from the expiry date
of the 3 years that follow the CBA execution, the law
expressly gives the parties - not anybody else - the
discretion to fix the effectivity of the agreement.
- The law does not specifically cover the situation where no
agreement has been reached with respect to the effectivity of the
CBA within the 6 month period allowed. In this eventuality, any
provision of law should then apply, for the law abhors a vacuum.
One such provision is the principle of hold over, i.e., that in the
absence of a new CBA, the parties must maintain the status quo
and must continue in full force and effect the terms and
conditions of the existing agreement until a new agreement is
reached. In this manner, the law prevents the existence of a gap
in the relationship between the collective bargaining parties.
Another legal principle that should apply is that in the absence of
an agreement between the parties, then, an arbitrated CBA
takes on the nature of any judicial or quasi-judicial award; it
operates and may be executed only respectively unless there
are legal justifications for its retroactive application.
Disposition Petition GRANTED. Orders of public respondent
SoL dated Aug.19, 1996 and Dec.28, 1996 are SET ASIDE.

MANILA CENTRAL LINE CORP. v MANILA

CENTRAL LINE FREE WORKERS UNION
290 SCRA 690
MENDOZA; June 15, 1998
NATURE Petition for certiorari

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FACTS
- This case arose out of a collective bargaining deadlock between
petitioner and Manila Central Line Free Workers Union-National
Federation of Labor. The parties' collective bargaining agreement had
expired on March 15, 1989. As the parties failed to reach a new
agreement, the union sought the aid of the National Conciliation and
Mediation Board, but the deadlock remained unresolved.
- On February 9, 1990, the union filed a Petition for Compulsory
Arbitration. At the initial hearing, the parties declared that conciliation
efforts before the NCMB had terminated and it was their desire to submit
the case for compulsory arbitration.
- On September 28, 1990, the labor arbiter rendered a decision
embodying provisions for a new 5-year collective bargaining agreement.
- Petitioners appeal was denied by the NLRC. The NLRC also denied
petitioner's motion for reconsideration.
ISSUE
WON the NLRC erred in affirming the Labor Arbiter's decision holding
that the effectivity of the renegotiated CBA shall be retroactive to March
15, 1989, the expiry date of the old CBA.
HELD YES
Reasoning
Art. 253-A refers to collective bargaining agreements entered into by the
parties as a result of their mutual agreement. The CBA in this case, on
the other hand, is part of an arbitral award. As such, it may be made
retroactive to the date of expiration of the previous agreement.
- St. Luke's Medical Center, Inc. v. Torres: The effectivity of the
Order must retroact to the date of the expiration of the previous CBA,
contrary to the position of petitioner. Article 253-A cannot be properly
applied to herein case. As correctly stated by public respondent, anent
the alleged lack of basis for the retroactivity provisions awarded, we
would stress that the provision of law invoked by the Hospital, Article
253-A of the Labor Code, speaks of agreements by and between the
parties, and not arbitral awards . . . Therefore, in the absence of a
specific provision of law prohibiting retroactivity of the effectivity of
arbitral awards issued by the Secretary of Labor pursuant to Article
263(g) of the Labor Code, such as herein involved, public respondent is
deemed vested with plenary and discretionary powers to determine the
effectivity thereof.
- petitioner has not shown that the question of effectivity was not
included in the general agreement of the parties to submit their dispute
for arbitration. To the contrary, as the order of the labor arbiter states,
this question was among those submitted for arbitration by the parties:
As regards the "Effectivity and Duration" clause, the company proposes
that the collective bargaining agreement shall take effect only upon its
signing and shall remain in full force and effect for a period of five years.
The union proposes that the agreement shall take effect retroactive to
March 15, 1989, the expiration date of the old CBA.
- It is the observation of this Arbitrator that in almost subsequent CBAs,
the effectivity of the renegotiated CBA, usually and most often is made
effective retroactive to the date when the immediately proceeding CBA
expires so as to give a semblance of continuity.
Disposition the petition is DISMISSED for lack of merit.

RIVERA V ESPIRITU, PAL, LUCIO TAN, et al

97 SCRA 715
QUISUMBING; JAN 23, 2002
NATURE Special civil action for certiorari and prohibition
FACTS
-PAL pilots went on a strike. As a result, PALs financial situation went
from bad to worse. Faced with bankruptcy, PAL downsized its labor
force by more than one-third.
- PALEA went on strike to protest the retrenchment measures adopted
by the airline, w/c affected 1,899 union members.

Disini

- President Estrada issued AO No. 16 creating an Inter-Agency

Task Force (Task Force) to address the problems PAL. Edgardo
Espiritu, then the Sec of Finance, was designated chairman of
the Task Force.
- PAL management submitted to the Task Force an offer by
private respondent Lucio Tan, Chairman and Chief Executive
Officer of PAL, of a plan to transfer shares of stock to its
employees. PALEA rejected offer.
- PAL eventually ceased its operations and sent notices of
termination to its employees.
- PALEA board wrote the President for intervention proposing
terms and conditions including the suspension of the PALPALEA CBA for a period of 10 years.
- PALEA members cast their votes in a DOLE-supervised
referendum. 61% ratified the PAL-PALEA agreement.
- Days later, seven officers and members of PALEA filed petition
to annul the agreement entered into between PAL and PALEA.
-Petitioners: the PAL-PALEA agreement is void because it
abrogated the right of workers to self-organization and their right
to collective bargaining and that the agreement was not meant
merely to suspend the existing PAL-PALEA CBA, but also to
foreclose any renegotiation or any possibility to forge a new CBA
for a decade. It violates the protection to labor policy laid down
by the Constitution.
ISSUE/S
1. WON an original action for certiorari and prohibition the proper
remedy to annul the PAL-PALEA agreement
2. WON the PAL-PALEA agreement of Sept 27, 1998,
stipulating the suspension of the PAL-PALEA CBA is
unconstitutional and contrary to public policy
HELD
1. NO
(Petitioners alleged grave abuse of discretion under Rule 65 of
the 1997 Rules of Civil Pro) The essential requisites for a
petition for certiorari under Rule 65 are: (1) the writ is directed
against a tribunal, a board, or an officer exercising judicial or
quasi-judicial functions; (2) such tribunal, board, or officer has
acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction; and (3)
there is no appeal or any plain, speedy, and adequate remedy in
the ordinary course of law
- The assailed agreement is clearly not the act of a tribunal,
board, officer, or person exercising judicial, quasi-judicial, or
ministerial functions. It is not the act of public respondents
Finance Secretary Espiritu and Labor Secretary Laguesma as
functionaries of the Task Force. Neither is there a judgment,
order, or resolution of either public respondents involved.
Instead, what exists is a contract between a private firm and one
of its labor unions, albeit entered into with the assistance of the
Task Force. The first and second requisites for certiorari and
prohibition are therefore not present in this case. ( Nevertheless,
Court looked into the substance of the petition, in the higher
interest of justice and in view of the public interest involved)
2. NO
-Article 253-A 6 has a two-fold purpose. One is to promote
industrial stability and predictability. Inasmuch as the agreement

ART. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining

Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of 5 years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five-year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be
renegotiated not later than 3 years after its execution. Any agreement on such other
provisions of the Collective Bargaining Agreement entered into within 6 months from the
date of expiry of the term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If any such
agreement is entered into beyond six months, the parties shall agree on the duration of the
6

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sought to promote industrial peace at PAL during its rehabilitation, said

agreement satisfies the first purpose of Article 253-A. The other is to
assign specific timetables wherein negotiations become a matter of right
and requirement. Nothing in Article 253-A, prohibits the parties from
waiving or suspending the mandatory timetables and agreeing on the
remedies to enforce the same.
-The acts of public respondents in sanctioning the 10-year suspension of
the PAL-PALEA CBA did not contravene the protection to labor policy
of the Constitution. The agreement afforded full protection to labor;
promoted the shared responsibility between workers and employers;
and the exercised voluntary modes in settling disputes, including
conciliation to foster industrial peace
- It was also PALEA that voluntarily opted for the 10-year suspension of
the CBA. Either case was the unions exercise of its right to collective
bargaining. The right to free collective bargaining, after all, includes the
right to suspend it.
- Petitioners further allege that the 10-year suspension of the CBA under
the PAL-PALEA agreement virtually installed PALEA as a company
union for said period, amounting to unfair labor practice, in violation of
Article 253-A of the Labor Code mandating that an exclusive bargaining
agent serves for five years only.
The questioned proviso of the agreement reads:
a. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of
the regular rank-and-file ground employees of the Company;

Said proviso cannot be construed alone. The aforesaid provision must

be read within the context of the next clause:
b. The union shop/maintenance of membership provision under the PAL-PALEA
CBA shall be respected.

The aforesaid provisions, taken together, clearly show the intent of the
parties to maintain union security during the period of the suspension
of the CBA. Its objective is to assure the continued existence of PALEA
during the said period. We are unable to declare the objective of union
security an unfair labor practice. It is State policy to promote unionism
to enable workers to negotiate with management on an even playing
field and with more persuasiveness than if they were to individually and
separately bargain with the employer.
Petitioners contention that the agreement installs PALEA as a virtual
company union is also untenable. Under Article 248 (d) of the Labor
Code, a company union exists when the employer acts [t]o initiate,
dominate, assist or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial
or other support to it or its organizers or supporters. The case records
are bare of any showing of such acts by PAL.
We also do not agree that the agreement violates the five-year
representation limit mandated by Article 253-A. Under said article, the
representation limit for the exclusive bargaining agent applies only when
there is an extant CBA in full force and effect. In the instant case, the
parties agreed to suspend the CBA and put in abeyance the limit on the
representation period.

Disposition CA decision affirmed but modified (SC deleted decision that

mortgage fee as fully paid, and awarded moral damages).

retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining agreement,
the parties may exercise their rights under this Code.

5.6

CBA AND 3 RD PARTY

APPLICABILITY

SUNDOWNER DEVELOPMENT CORP V DRILON

180 SCRA 14
GANCAYCO; December 6, 1989
NATURE
Petition for certiorari to review the orders of the Secretary of the
Department of Labor and Employment
FACTS
- Hotel Mabuhay, Inc. leased the premises belonging to Santiago
Syjuco, Inc. in Ermita, Manila.
- Due to non-payment of rentals, a case for ejectment was filed
by Syjuco against Mabuhay in the Metropolitan Trial Court of
Manila.
Mabuhay offered to amicably settle the cam by
surrendering the premises to Syjuco and to sell its assets and
personal property to any interested party.
- Syjuco offered the said premises for lease to Sundowner.
- April 16, 1987 The lease agreement was finalized and was
agreed to commence on May 1, 1987 and to expire on April 30,
1992.
- May 4, 1987 - National Union of Workers in Hotel, Restaurant
and Allied Services (NUWHRAIN for short) picketed the leased
premises, barricaded the entrance to the leased premises and
denied petitioner's officers, employees and guests free access to
and egress from said premises. This prompted Sundowner to
write a letter of complaint to Syjuco.
- May 7, 1987 - A complaint for damages with preliminary
injunction and/or temporary restraining order was filed by
Sundowner. The Executive Judge of the court issued a
restraining order against respondent NUWHRAIN and its officers
and members. NUWHRAIN nevertheless maintained their strike
but filed an answer to the complaint.
- May 14, 1987 - An order was issued by public respondent
Secretary of Labor assuming jurisdiction over the labor dispute
pursuant to Article 263(g) of the Labor Code. It required the 91
striking employees to return to work and for Mabuhay to accept
all returning employees pending final determination of the issue
of the absorption of the former employees of Mabuhay.
- Mabuhay submitted its position paper alleging:
- That it had sold all its assets and personal properties
to Sundowner and that there was no sale or transfer of
its shares whatsoever.
- Mabuhay completely ceased operation effective April
28,1987 and surrendered the premises to Sundowner
so that there exists a legal and physical impossibility
on its part to comply with the return to work order
specifically on absorption.
- June 26, 1987 - In order to commence its operation,
Sundowner signed a tripartite agreement so the workers may lift
their strike. In this agreement among Sundowner, NUWHRAIN
and Mabuhay, the latter paid to respondent NUWHRAIN the sum
of P638,000.00 in addition to the first payment in the sum of
P386,447.11, for which reason respondent NUWHRAIN agreed
to lift the picket.
- July 13, 1987 - NUWHRAIN filed its position paper alleging
connivance between Mabuhay and Sundowner in selling the
assets and closing the hotel to escape its obligations to the
employees of Mabuhay. NUWHRAIN prays that petitioner
accept the workforce of Mabuhay and pay backwages from April
16, 1986 to April 28, 1987, the day Mabuhay stopped operation.
- January 20, 1988 Drilon, as DOLE secretary, issued an order
requiring Sundowner to absorb the members of the union and to
pay backwages from the time it started operations up to the date
of the order.
- January 27, 1988 Sundowner filed a motion for
reconsideration of the order, alleging that the theory of implied
acceptance and assumption of statutory wrong does not apply in

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the instant case and that there is no law requiring bona fide purchasers
of the assets of an on-going concern to absorb in its employ the
employees of the latter.
- Drilon denied the MFR.
ISSUE
WON the purchaser of the assets of an employer corporation can be
considered a successor employer of the latter's employees
HELD
NO
Ratio The rule is that unless expressly assumed, labor contracts such
as employment contracts and collective bargaining agreements are not
enforceable against a transferee of an enterprise, labor contracts being
in personam, thus binding only between the parties.
Reasoning
- As a general rule, there is no law requiring a bona fide purchaser of
assets of an on-going concern to absorb in its employ the employees of
the latter.
- However, although the purchaser of the assets or enterprise is not
legally bound to absorb in its employ the employers of the seller of such
assets or enterprise, the parties are liable to the employees if the
transaction between the parties is colored or clothed with bad faith.
- In the case at bar, contrary to the claim of the public respondent that
the transaction between petitioner and Mabuhay was attended with bad
faith, the court finds no cogent basis for such contention. Thus, the
absorption of the employees of Mabuhay may not be imposed on
petitioner.
- It is undisputed that when Mabuhay surrendered the leased premises
to Syjuco and asked Syjuco to offer same to other lessees, it was Syjuco
who found petitioner and persuaded petitioner to lease said premises.
Mabuhay had nothing to do with the negotiation and consummation of
the lease contract between petitioner and Syjuco.
- In the tri-partite agreement that was entered into by petitioner with
respondents NUWHRAIN and Mabuhay, it is clearly stipulated that
immediately after the execution of the agreement, Mabuhay shall give a
list of its members to Sundowner that it desires to recommend for
employment so that the latter can consider them for employment, with
no commitment whatsoever on the part of Sundowner to hire them in the
business that it will operate in the premises formerly occupied by the
Hotel Mabuhay.
- There can be no implied acceptance of the employees of Mabuhay by
petitioner and acceptance of statutory wrong as it is expressly provided
in the agreement that petitioner has no commitment or duty to absorb
them.
- The court does not subscribe to the theory of Drilon that petitioner
should have informed NUWHRAIN of its lease of the premises and its
purchase of the assets and personal properties of Mabuhay so that said
employees could have taken steps to protect their interest. The court
finds no such duty on the part of petitioner and its failure to notify said
employees cannot be an indicium of bad faith.
- While it is true that petitioner is using the leased property for the same
type of business as that of respondent Mabuhay, there can be no
continuity of the business operations of the predecessor employer by the
successor employer as respondent Mabuhay had not retained control of
the business.
Disposition Petition granted. Orders reversed and set aside.

MANLIMOS V NLRC (SUPER MAHOGANY PLYWOOD

CORPORATION/ALBERT GO)
242 SCRA 145
DAVIDE; March 21, 1995
FACTS
- The petitioners were among the regular employees of the Super
Mahogany Plywood Corporation
- A new owner/management group acquired complete ownership of the
corporation. The petitioners were advised of such change of ownership;
however, the petitioners continued to work for the new owner and were
considered terminated, with their conformity, only when they received
their separation pay, 13th month pay, and all other benefits due them.

Disini

- Each of them then executed a Release and Waiver which they

acknowledged before the Hearing Officer of the Butuan City
District Office of the DOLE
- The new owner caused the publication of a notice for the hiring
of workers, indicating therein who of the separated employees
could be accepted on probationary basis. The petitioners then
filed their applications for employment. Except for Rosario
Cuarto, they were hired on probationary basis for six months as
patchers or tapers, but were compensated on piece-rate or task
basis.
- For their alleged absence without leave, Perla Cumpay and
Virginia Etic were considered, to have abandoned their work.
The rest were dismissed because they allegedly committed acts
prejudicial to the interest of the new management.
- Petitioners then filed against the respondent a complaint.
- The petitioners maintained that they remained regular
employees regardless of the change of management and their
execution of the Release and Waiver.
- Respondent contended that the petitioners were deemed
legally terminated from their previous employment; that the new
owner was well within its legal right or prerogative in considering
as
terminated
the
petitioners'
probationary/temporary
appointment; and that the petitioners were not illegally dismissed;
hence, they are not entitled to the reliefs prayed for.
- Labor Arbiter ruled for the petitioners. The Labor Arbiter,
however, ruled that there was no "cessation of operations which
would lead to the dismissal of the employees."
- Respondent appealed to the NLRC which reversed the
judgment of the Labor Arbiter, subject, however, to
recomputation based on the actual services of the petitioners
under the new owner up to the actual date of their separation
from the service. It found that the change of ownership in this
case was made in good faith since there was no evidence on
record that "the former owners conspired with the new owners to
insulate the former management of any liability to its workers."
- Their motion to reconsider the resolution having been denied
by the NLRC, the petitioners filed a special civil action for
certiorari.
ISSUE
WON the NLRC acted with grave abuse of discretion when it
reversed the decision of the Labor Arbiter.
HELD
NO.
- There was only a change of ownership of Super Mahogany
Plywood Corporation which resulted in a change of ownership. In
short, the corporation itself, as a distinct and separate juridical
entity, continues to exist. The issue of whether there was a
closing or cessation of business operations which could have
operated as just cause for the termination of employment was
not material.
- The change in ownership of the management was done bona
fide and the petitioners did not for any moment before the filing
of their complaints raise any doubt on the motive for the change.
On the contrary, upon being informed thereof and of their
eventual termination from employment, they freely and
voluntarily accepted their separation pay and other benefits and
individually executed the Release or Waiver which they
acknowledged before no less than a hearing officer of the DOLE.
- A change of ownership in a business concern is not proscribed
by law.
- Central Azaucarera del Danao vs. CA: It is a principle wellrecognized, that it is within the employer's legitimate sphere of
management control of the business to adopt economic policies
or make some changes or adjustments in their organization or
operations that would insure profit to itself or protect the
investment of its stockholders. As in the exercise of such
management prerogative, the employer may merge or
consolidate its business with another, or sell or dispose all or
substantially all of its assets and properties which may bring
about the dismissal or termination of its employees in the

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process. Such dismissal or termination should not however be

interpreted in such a manner as to permit the employer to escape
payment of termination pay. For such a situation is not envisioned in the
law. It strikes at the very concept of social justice.
- In a number of cases on this point, the rule has been laid down that the
sale or disposition must be motivated by good faith as an element of
exemption from liability.
- Indeed, an innocent transferee of a business establishment has no
liability to the employees of the transferor to continue employing them.
Nor is the transferee liable for past unfair labor practices of the previous
owner, except, when the liability therefor is assumed by the new
employer under the contract of sale, or when liability arises because of
the new owner's participation in thwarting or defeating the rights of the
employees.
- Where such transfer of ownership is in good faith, the transferee is
under no legal duty to absorb the transferor's employees as there is no
law compelling such absorption. The most that the transferee may do,
for reasons of public policy and social justice, is to give preference to the
qualified separated employees in the filling of vacancies in the facilities
of the purchaser.
- Since the petitioners were effectively separated from work due to a
bona fide change of ownership and they were accordingly paid their
separation pay, which they freely and voluntarily accepted, the private
respondent corporation was under no obligation to employ them; it may,
however, give them preference in the hiring. The private respondent in
fact hired, but on probationary basis, all the petitioners, except Rosario
Cuarto. The non-hiring of Cuarto was legally permissible.
Disposition Petition waspartly GRANTED. The challenged resolutions
of NLRC were MODIFIED; respondent was ordered to pay petitioners
Perla Cumpay and Virginia Etic their backwages up to the expiration of
their probationary employment contracts.

5.7

CBA
AND
DISAFFILIATIONSUBSTTTUTION DOCTRINE

ELISCO-ELIROL LABOR UNION V NORIEL

80 SCRA 682
TEEHANKEE; December 29, 1977
FACTS
-Sometime on Feb1974, Elisco Elirol Labor Union (NAFLU) negotiated
and executed a CBA with Elizalde Steel Consolidated, Inc. Upon
verification at the Registration Division, Bureau of Labor Relations, the
Elisco-Elirol Labor Union (NAFLU), the contracting party in said CBA,
was found to be not then registered and therefore not entitled to the
benefits and privileges embodied in said CBA; thus, the members said
union in a general membership meeting decided in a resolution to
register their union to protect and preserve the integrity and inviolability
of the collective bargaining agreement between the Elisco-Elirol Labor
Union (NAFLU) and the Elizalde Steel Consolidated, Inc.
-Petitioner union applied for registration with the BLR, hence on May 28,
1975, Certificate of Registration No. 8511-IP was issued by said Office.
Steps were taken by petitioner to enforce the CBA as the principal party
to the same representing the workers covered by such agreement
immediately after the issuance of the certificate of registration.
-June 10, 1975: at a special meeting called for the purpose, the general
membership of the petitioner union adopted a resolution to disaffiliate
from their mother union, the National Federation of Labor Unions. The
petitioner union informed respondents of said disaffiliation by means of a
letter, and subsequently requested respondents to recognize petitioner
as the sole and exclusive bargaining representative of the employees
thereof but its employer without any justifiable reason refused and
continues to refuse to recognize petitioner as the sole and exclusive
bargaining representative of its employees, and, now actually dismissed
the petitioner union's officers and board members. In this connection, a
complaint for unfair labor practice was filed by petitioners against
respondents for the latter's refusal to bargain collectively with petitioner.

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-By virtue of said refusal, petitioners filed a petition before the

BLR against respondents Elizalde Steel Consolidated, Inc. and
the National Federation of Labor Unions praying that the mother
union be ordered to stop from presenting itself as the collective
bargaining agent and pursuant thereto, a writ of preliminary
mandatory and prohibitory injunction be issued.
-BLR issued an Order dismissing the petition for lack of merit. On
appeal, the BLR Director affirmed said dismissal. Hence this
petition.
ISSUE
Which of the two unions should be recognized as the sole and
exclusive bargaining representative of the employees and
ultimately recognized to administer and supervise the
enforcement of the collective bargaining agreement?
HELD
The union consisting of the members-employees of an employer
is the principal party to the collective bargaining agreement
(rather than the mother union which is merely its agent) and is
therefore entitled to be recognized as the sole and exclusive
bargaining representative entitled to administer and enforce the
collective bargaining agreement with the employer.
-Respondent BLR director correctly perceived in his Resolution
that "to grant to the former mother union (NAFLU) the authority
to administer and enforce their collective bargaining agreement
without presumably any members in the bargaining unit is quite
absurd" but fell unto the grave error of holding that "When the
employees disaffiliated from the mother union and formed
themselves into a new union, their status as employees was also
terminated."
-The employees and members of the local union did not form a
new union but merely registered the local union as was their
right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of
employees and members of the local union was the principal
party to the agreement. NAFLU as the "mother union" in
participation in the execution of the bargaining agreement with
respondent company acted merely as agent of the local union,
which remained the basic unit of the association existing
principally and freely to serve the common interest of all its
members, including the freedom to disaffiliate when the
circumstances so warranted as in the present case. (Liberty
Cotton Mills Workers Union v. Liberty Cotton Mills)
-The "substitutionary" doctrine likewise fully supports petitioner's
stand. Petitioner union to whom the employees owe their
allegiance has from the beginning expressly avowed that it "does
not intend to change and/or amend the provisions of the present
collective bargaining agreement but only to be given the chance
to enforce the same since there is a shift of allegiance in the
majority of the employees at respondent company."
-Benguet Consolidated Inc. vs. BCI Employees & Workers
Union-PAFLU: This principle, formulated by the NLRB as its
initial compromise solution to the problem facing it when there
occurs a shift in employees' union allegiance after the execution
of a bargaining contract with their employer, merely states that
even during the effectivity of a collective bargaining
agreement executed between employer and employees thru
their agent, the employees can change said agent but the
contract continues to bind then up to its expiration date.
They may bargain however for the shortening of said
expiration date.
-In formulating the "substitutionary" doctrine, the only
consideration involved as the employees' interest in the existing
bargaining agreement. The agent's interest never entered the
picture. The justification for said doctrine was that the majority
of the employees, as an entity under the statute, is the true
party in interest to the contract, holding rights through the
agency of the union representative. Thus, any exclusive
interest claimed by the agent is defeasible at the will of the
principal.
-What is paramount, as it is expressly and explicitly emphasize in
an exacting language under the New Constitution, is the security

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of tenure of the workers, not the security of the union. To impress,

therefore, such "maintenance of membership" which is intended for the
security of the union rather than the security of tenure of the workers as
a bar to employees' changing their affiliation is not only to infringe on the
constitutional right of freedom of association, but also to trample upon
the constitutional right of workers to security of tenure and to render
meaningless whatever "adequate social services" the State may
establish or maintain in the field of employment "to guarantee the
enjoyment by the people of a decent standard of living."
Disposition Petition is granted and the appealed resolution is set aside.
Petitioner local union is declared to be the sole and exclusive bargaining
representative of the employees of respondent corporation entitled to
administer and enforce any subsisting collective bargaining agreement
with said employer corporation. Decision immediately executory

5.8

EFFECT EXPIRY

NEW PACIFIC TIMBER AND SUPPLY CO. INV. V NLRC

(BUAT ET AL.)
328 SCRA 173
KAPUNAN; March 17, 2000
NATURE Petition for certiorari.
FACTS
- The National Federation of Labor (NFL, for brevity) was certified as the
sole and exclusive bargaining representative of all the regular rank-andfile employees of petitioner New Pacific Timber & Supply Co., Inc
(Pacific). NFL negotiated for better terms and conditions, but Pacific
resisted, prompting NFL to sue for unfair labor practice.
- March 31, 1987: the Labor Arbiter issued an order declaring (a) herein
petitioner Company guilty of ULP.
- Pacific appealed to the NLRC, but the NLRC dismissed the petition.
The Supreme Court also dismissed the petition filed by Pacific.
- The records of the case were remanded to the arbitration branch of
origin for the execution of the Labor Arbiters Order, dated March 31,
1987, granting monetary benefits consisting of wage increases, housing
allowances, bonuses, etc. to the regular rank-and-file employees.
Following a series of conferences to thresh out the details of
computation, (new) Labor Arbiter Villena issued an Order, dated October
18, 1993, directing petitioner Company to pay the 142 employees
entitled to the aforesaid benefits the respective amounts due them under
the CBA. Petitioner Company complied; and, the corresponding
quitclaims were executed. The case was considered closed following
NFL's manifestation that it will no longer appeal the October 18, 1993
Order of Labor Arbiter Villena.
- A petition for relief was filed in behalf of the 186 of the private
respondents "Mariano J. Akilit and 350 others." They claimed they were
wrongfully excluded from enjoying the benefits of the CBA, and that
NFLs misrepresentations had precluded them from appealing their
exclusion. NLRC held that they were entitled to the CBA.
ISSUES
1. WON the petition for relief must prosper.
2. WON Mariano Akilit and the 350 others are entitled to the benefits
of the CBA even if they were not employed by Pacific during the
CBA term.
HELD
1. NO
Ratio Once a judgment has become final and executory, it can no
longer be disturbed, altered or modified. However, a careful scrutiny of
the facts and circumstances of the instant case warrants liberality in the
application of technical rules and procedure.
Reasoning Private respondents, in their petition for relief, claimed that
they were wrongfully excluded from the list of those entitled to the CBA
benefits by their union, NFL, without their knowledge; and, because they

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were under the impression that they were ably represented, they
were not able to appeal their case on time.
- The Supreme Court has allowed appeals from decisions of the
labor arbiter to the NLRC, even if filed beyond the reglementary
period, in the interest of justice.
2. NO
Ratio When a collective bargaining contract is entered into by the
union representing the employees and the employer, even the
non-member employees are entitled to the benefits of the
contract.
Reasoning
- It must first be established whether a CBA was in effect during
the time of the appeal. A CBA, as to its economic provisions, can
be extended beyond the period stipulated therein, and even
beyond the three-year period prescribed by law, in the absence
of a new agreement, Article 253 of the Labor Code explicitly
provides:
ART. 253. Duty to bargain collectively when there exists a
collective bargaining agreement. - When there is a
collective bargaining agreement, the duty to bargain
collectively shall also mean that neither party shall
terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60) days
prior to its expiration date. It shall be the duty of both parties
to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement
during the 60-day period and/or until a new agreement is
reached by the parties.
- Until a new Collective Bargaining Agreement has been
executed by and between the parties, they are duty-bound to
keep the status quo and to continue in full force and effect the
terms and conditions of the existing agreement. In the case at
bar, no new agreement was entered into by and between
petitioner Pacific and NFL pending appeal of the decision in
NLRC Case.
- To rule otherwise, i.e., that the economic provisions of the
existing CBA in the instant case ceased to have force and effect
in the year 1984, would be to create a gap during which no
agreement would govern, from the time the old contract expired
to the time a new agreement shall have been entered into.
- It is even conceded, that a laborer can claim benefits from a
CBA entered into between the company and the union of which
he is a member at the time of the conclusion of the agreement,
after he has resigned from said union.
- To exclude the nonmembers would constitute undue
discrimination and deprive them of monetary benefits they would
otherwise be entitled to under a new collective bargaining
contract to which they would have been parties. Since in this
particular case, no new agreement had been entered into after
the CBA's stipulated term, it is only fair and just that the
employees hired thereafter be included in the existing CBA.
DISPOSITION
Petition for certiorari is dismissed for lack of merit.

MANILA ELECTRIC CO. v QUISUMBING (MEWA)

302 SCRA 173
MARTINEZ; JAN.27, 1999
NATURE
Petition for certiorari of the order of the Sec. of Labor (SoL)
FACTS
- MERALCOs rank and file union, MEWA (Meralco Workers
Assoc.), informed MERALCO of its intention to re-negotiate the
terms and conditions of their existing 1992-1997 CBA covering
the remaining 2 years of said CBA starting from Dec. 1, 1995 to

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Nov. 30, 1997. MERALCO, willing to re-negotiate, formed a CBA

negotiating panel for the purpose. After MEWA submitted its proposal,
MERALCO presented a counter-proposal. The collective bargaining
negotiations eventually proceeded, however, despite the series of
meetings between the negotiating panels of MERALCO and MEWA, the
parties failed to arrive at terms and conditions acceptable to both.
- MEWA filed a notice of strike with the NRC National Conciliation and
Mediation Board (NCMB) on the grounds of bargaining deadlock and
unfair labor practices. The NCMB conducted a series of conciliation
meetings but the parties failed to reach an amicable settlement.
MERALCO, faced with the imminence of a strike, filed a petition with the
DOLE praying that the SoL assume jurisdiction over the labor dispute
and to enjoin the striking employees to go back to work. The SoL
granted the petition and enjoined the members of MEWA from
committing any act that may exacerbate the situation.
- After the parties submitted their respective memoranda, the SoL
resolved the labor dispute through an order dated Aug.19, 1996, upon
which MERALCO filed a MFR alleging that the SoL committed grave
abuse of discretion amounting to lack or excess of jurisdiction.
MERALCO later filed a supplement to the MFR, alleging that the SoL did
not properly appreciate the effect of the awarded wages and benefits on
MERALCOs financial viability. MEWA likewise filed a motion asking the
SoL to reconsider its Order on the wage increase, leaves, decentralized
filing of paternity and maternity leaves, bonuses, retirement benefits,
optional retirement, medical, dental and hospitalization benefits, short
swing and payroll treatment. On its political demands, MEWA asked the
SoL to rule its proposal to institute a Code of Discipline for its members
and the unions representation in the administration of the Pension Fund.
- On Dec. 28, 1996, the SoL issued an Order resolving the parties
separate motions stating, among others, that the effectivity of the
agreement was to be RETROACTIVE or from Dec. 1, 1995 to Nov. 30,
1997.
- Dissatisfied, MERALCO filed this petition contending that the SoL
gravely abused his discretion.
ISSUE
WON the retroactive effectivity of the new CBA set by the SoL was
proper
HELD
NO. There is no sufficient legal ground on the justification for the
retroactive application of the disputed CBA. The CBA should be effective
for a term of 2 years counted from Dec.28, 1996 (the date of the SoLs
disputed order) up to Dec.27, 1999.
Reasoning Under Art.253-A, the representation aspect of the CBA is to
be for a term of 5 years while all other provisions of the CBA shall be renegotiated not later than 3 years after its execution. Any agreement on
such other provisions of the CBA entered into within 6 months from the
date of expiry of the term of such other provisions as fixed in such CBA
shall retroact to the day immediately following such date. If such
agreement is entered into beyond 6 months, the parties shall agree on
the duration of the effectivity thereof.
- INTERPRETATION: it is clear that the 5-year term requirement under
Art.253-A is specific to the representation aspect. What the law
additionally requires is that a CBA must be re-negotiated within 3 years
after its execution. If no agreement is reached within 6 months from
the expiry date of the 3 years that follow the CBA execution, the law
expressly gives the parties - not anybody else - the discretion to fix
the effectivity of the agreement.
- The law does not specifically cover the situation where no agreement
has been reached with respect to the effectivity of the CBA within the 6
month period allowed. In this eventuality, any provision of law should
then apply, for the law abhors a vacuum. One such provision is the
principle of hold over, i.e., that in the absence of a new CBA, the parties
must maintain the status quo and must continue in full force and effect
the terms and conditions of the existing agreement until a new
agreement is reached. In this manner, the law prevents the existence of
a gap in the relationship between the collective bargaining parties.
Another legal principle that should apply is that in the absence of an
agreement between the parties, then, an arbitrated CBA takes on the
nature of any judicial or quasi-judicial award; it operates and may be

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executed only respectively unless there are legal justifications for

its retroactive application.
Disposition Petition GRANTED. Orders of public respondent
SoL dated Aug.19, 1996 and Dec.28, 1996 are SET ASIDE.

CITIZENS LABOR UNION-CCLU V CIR

(MALAYANG MANGGAGAWA SA ESSO, DEPT
OF LABOR, ESSO)
G.R. No. L-24320, L-24421
CASTRO, J.; November 12, 1966
NATURE
Consolidated actions for mandamus, prohibition and certiorari to
compel respondent court to act on petitioner's MFR
FACTS
- Respondent union MME filed a petition for certification election
with the CIR alleging that it is a labor union organized among the
employees of Esso Standard Eastern, Inc.; that it represents the
majority of the non-supervisory employees of the said terminal
unit; that there exists a CBA between petitioner CLU and ESSO;
and that its aim in asking for a certification election is merely to
determine which union will administer the contract during the
remainder of the term thereof. The CLU and ESSO filed motions
to dismiss the petition based on several grounds, most important
of which is that the existing CBA is a bar to the holding of a
certification election.
- After due hearing, the CIR denied the motions, holding that the
existing CBA is no bar to a certification election, and requesting
the Dept of Labor to conduct the necessary election. The CLU
and the ESSO filed with the CIR en banc separate MFRs, to
which the MME filed its opposition. Meanwhile, the Dept of Labor
scheduled the secret ballot election with notice to the parties
concerned. The CLU and the ESSO filed with the CIR en banc
separate motions to suspend the certification election as set,
upon the basis of their respective MFRs then pending, ESSO on
its part alleging that the certification election if held would render
its MFR academic. The CLU filed with this Court the 1st petition
for certiorari and mandamus with preliminary injunction. This was
given due course and the parties respondents filed their
respective answers, but no writ of preliminary injunction was
issued. The Dept of Labor proceeded with the election and the
result thereof shows that the MME obtained votes of more than
one-half of the rank and file employees and laborers of the
ESSO unit eligible to vote.
- The CLU filed with the CIR a motion to annul the certification
election on several grounds, among which are that the election
was held illegally and irregularly as it was conducted on a
holiday, and that it was had without participation of the CLU
therein. The ESSO also filed with the CIR a similar motion to
annul the certification election. The MME thereafter filed its
opposition thereto. The CIR en banc, by resolution, denied the
MFRs. The CLU filed a notice of appeal. The CIR issued an
order denying the MFR seeking annulment of the certification
election. On the basis of the result of the secret ballot election,
the CIR certified the MME as the sole and exclusive bargaining
agent of all the non-supervisory employees of the ESSO at its
Pandacan Terminal unit. The CLU and the ESSO filed separate
motions to have this last order reconsidered. These motions are
pending resolution.
- The CLU filed with this Court an urgent petition praying for
issuance of a writ of preliminary injunction to restrain the CIR
from proceeding with the enforcement of its order on the ground
st
that the issues to be heard in its 1 petition before this Court
would become moot and academic if the said order was
enforced. The CLU moved to have the hearing advanced. This
Court issued the injunction prayed for, restraining the CIR from
enforcing its order and also from proceeding or taking any other
action in connection with the certification election case. This

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Court also advanced the hearing. The CLU filed with this Court a 2 nd
petition for review of the order and resolution of the CIR en banc. We
gave due course to the 2nd petition for review and resolved further to
consider it together with the 1st.
- Pending this Court's adjudication of the two cases, the MME filed with
this Court a "Motion for Preliminary Injunction", alleging that the ESSO
and the CLU had extended the term of the existing CBA; that pursuant
to its provisions, the CLU and the ESSO will commence negotiations for
a new CBA and sign the same, unless a preliminary injunction is issued
by this Court; that a new agreement will render moot and academic the
order of the CIR certifying the MME as the sole and exclusive bargaining
agent of all the employees of the ESSO unit, and may again be alleged
as a bar to the holding of a new certification election. The motion was
opposed by the CLU and the ESSO, both alleging that since the secret
ballot election was held, there has occurred a substantial change in the
composition of the rank and file employees at the ESSO unit, a good
number of them having left their employment, retired, or been
compulsorily laid off with the approval of the CIR, resulting in a change
of employee composition in the unit; that the ESSO will negotiate a new
CBA with the union that commands the majority of the present labor
force, either the CLU or the MME, as the case may be; and that if this
Court issues the restraining order, it will suspend the process of a new
CBA to the prejudice of the workers who would be denied the economic
benefits thereof. This court issued an injunction commanding the CLU
and ESSO to refrain from negotiating and concluding a new collective
bargaining agreement until after this Court shall have decided the case
on the merits.
ISSUE/S
1. WON the court may determine which of the competing unions is the
appropriate bargaining unit
HELD
1. NO
Ratio This Court in numerous cases has reaffirmed its attitude that it is a
sound and unassailable labor practice for labor and management to
conclude a new contract before the expiry date of any collective
bargaining agreement in order to avoid a hiatus in management-labor
relations.
Reasoning The passage of time has removed all meaning and validity
from the positions taken by the 2 competing unions. All the pleadings
extant in the record are dated and were filed prior to the date when the
CBA in question expired; the positions of the 2 unions have therefore
become academic. The CLU claims that it is the sole and exclusive
bargaining agent on the strength of its prior collective bargaining history;
the MME claims that it is the one that should be recognized on the basis
of the will of the employees manifested in the secret ballot election in
favor of the MME. Like the CLU, the MME claims that its majority status
should be presumed to continue up to the present time and for as long
as the question has not been finally resolved. Against the presumption
of continued majority status, however, is the rule that such majority
status does not continue forever "especially in face of an assertion
and offer of proof to the contrary", or "in view of altered
circumstances which have likely occurred in the interim", or "by a
change in the conditions which demonstrates that a shift in
sentiment actually exists among the employees, and is caused by
other factors than the employer's refusal to bargain collectively".
The burden of coming forward with proof of majority status is upon the
union asserting it. Against the claim of the MME that it represents the
will of the majority of the rank and file employees at the Pandacan
Terminal unit, is the manifestation, advanced with vehemence, of both
the CLU and the ESSO that after the secret ballot election, the
employee composition has substantially changed because a great
number of the employees and laborers in the Pandacan Terminal unit
have left their employment, retired, or been compulsorily laid off with the
approval of the CIR. Precisely because the record is barren of evidence
upon which this Court may properly reach a definitive determination as
to which of the 2 unions should be upheld, at this time, as the sole and
exclusive bargaining agent, this Court will not even begin to attempt to
resolve the problem in favor of one or the other labor union.
Disposition Case remanded to the CIR with instructions to take such
action and issue such orders as circumstances may warrant.

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