DUTY TO BARGAIN CLAUSES

First: Article 261 is, to put it

kindly, is a surplusage.
Art 261 (251). Duty to bargain
collectively in the
absence of CBA. 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 the
employer and the representatives of
the
employees
to
bargain
collectively in accordance with the
provisions of this Code.
It does not say anything. It just
says
you
you
bargain
in
accordance with the Labor Code.
How else are you going to
bargain? In accordance with the
Corporation Code? You have to
bargain in accordance with the
Labour Code.
Second:
Art 262 (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.
When is it applicable? It does not
say. The provision before this say,
the duty to bargain collectively
in the absence of collective
bargaining agreements.

When there is no CBA, you

bargain in accordance with the
LAbor code. Suppose there is
already a CBA, do you bargain not
in accordance with the Labor
Code? It is submitted that this
provision
applies
to
the
NEGOTIATION PHASE of the
bargaining process.
Three
Stages
of
bargaining process:

the

1. Negotiation
Stagethis
presupposes that you already
have an Exclusive Bargaining
agent
either
by
voluntary
recognition/direct certification, or
by Certification Election. The
shortest period for negotiation is
ONE YEAR because the EBA has
one year to conclude the CBA and
all the other unions all over the
world cannot file a certification
election. Why do I say that it is
the shortest period? Because if
there is a deadlock, they cannot
go ahead with the collective
bargaining and they have to
submit it either to voluntary
arbitration
or
compulsory
arbitration. Then, the prohibition
against filing a Certification
Election is extended. That is
called the DEADLOCK BAR
RULE.
2. Administration Stage- there
is already a CBA. You are
administering it.
3. Renegotiation Stage/ Phase
DEADLOCK BAR RULE. This
time, the negotiation is brought
to a forum and the forum decides
the deadlock. So it could last up
to 10 years or 15 years.
I hate to confuse you but there is
another rule when you cannot file
a certification a certification
election. It is not mentioned in
the
Labor
Code.
All
the

commentators want to forget the

rule but it exists. I call that rule
the JOSEPH ESTRADA RULE. In
one case, Joseph Estrada called
all the employers and employees,
and they said the present
collective bargaining agreement
will stay for 10 years and there
will be no certification election.
When you have time, read the
case. Nobody refers to it.
Article 262 refers to the duty to
bargain during the negotiation
phase. There are 3 POSITIVE
DUTIES and 2 NEGATIVE.
FIVE DUTIES OF COLLECTIVE
BARGAINING
POSITIVE DUTIES:
1. to meet and convene promptly
and expeditiously
2. In good faith
3. For the purpose of the CBA
( nnegotiating 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
NEGATIVE DUTIES:
4. the duty does not compel any
party to agree to a proposal
5. It does not compel any party to
make any concessions
MEMORIZE THAT. All the technical
terms. The FIVE DUTIES OF
COLLECTIVE BARGANING.
Cases of UNLAWFUL or ILLEGAL
BARGAINING or what they call
BAD FAITH BARGAINING:
To
meet
promptly
and
expeditiously, that is behavioural,
very easy to determine. IF you do
not show up, you violated the

duty to bargain. But when does

the duty to bargain begin? The
duty to bargain begins as defined
by the Supreme Court in the
celebrated case of Kiok Loy vs
NLRC, the duty to bargain begins
when you have reduced to writing
your
proposals,
you
have
submitted your proposals to the
management,
you
are
the
majority representation of the
bargaining unit, and you have in
your possession proof of majority
registration.
This Kiok Loy pronouncement was
reiterated in General Milling vs
CA.
From 2015 TSN:
The SC said the duty to bargain begins
when the exclusive
bargaining agent presents a bargaining
proposal and the
exclusive bargaining agent has proof of
majority
representation.
Three elements:
1. The union is the exclusive bargaining
agent;
2. It has submitted in writing
bargaining proposals; and
3. The union is in possession of
majority representation status
Let me bring to your attention
Article 250. (feel nako 242 iya
gimean)
Article 250(C) Why is it important
as regards the exception to the
duty to bargain? It states that:
Art. 242. Rights of legitimate
labor organizations. A legitimate
labor organization shall have the
right:
Xxxxx

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;
Xxxxx
Is it not the beginning of the
collective
bargaining?
The
moment there is an exclusive
bargaining agent? Nakalimot ang
Supreme Court ini. Still, General
Milling case, the SC reiterated
the ruling in Kiok Loy. The Kiok
Loy decision was before the
amendment
here.
This
was
introduced by RA 6715, The
Herrera-Veloso Law which was
enacted before the Kiok Loy case.
RA 6715 became effective on
March 16, 1989. The Supreme
Court said in the Kiok Loy case
that there is already an exclusive
bargaining agent, the Med Arbiter
already declared them as the
winner, they reduced the CBA into
writing,
gave
it
to
the
management. The management
just ignored it, did not confirm
that they receive it and replied to
it. What should have been the
duty of the management? Article
260.

Art.
250.
collective

Procedure
in
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

x
Who is the party who desires to
negotiate an agreement? It is
always the union. The company
does not care, it does not desire
to negotiate an agreement.
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.
The period that you have to
remember here is 10 DAYS. 10,
10, 10 DAYS.
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;
This negotiation is so replete that
the government is hovering over
the shoulders of the parties.
When in doubt, the NCMB may
come in. They want to prevent a
strike.

D.
During
the
conciliation
proceedings in the Board (refers
to NCMB), 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)
What happens if you do not
submit to Voluntary Arbitration?
You may be charged of Failure in
your duty to bargain. Can that
charge __stick__? It is my
submission that it does not. That
is why it is not stated here as a
specimen of Bad Faith Bargaining.
For example, the employer fails to
show up in the conciliation
proceedings. Can they compel
those present to testify? Please
refer
to
Article
238
as
renumbered.
Art. 238 (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.
So what is the status of
conciliation
proceedings?
PRIVILEGED. Dont forget that.
Even the Supreme Court forgets
that. If fail to object on the
ground that it is privileged, you
waive it.

Situation: if you fail to appear in

the conciliation proceedings, and
the other party bring a case
against
you
for
bad
faith
bargaining, which is a species of
Unfair Labor Practice. If he brings
it up, it is a mere allegation that
is self-serving. So you need
evidence. How do you produce
evidence?
You
produce
the
logbook of the conciliation. Can
you produce the logbook? NO,
because that is PRIVILEGED. Can
you call the Conciliator to testify?
No. He
is prohibited from
testifying. Article 238.
Philippine
Airlines
vs
Secretary of Labor: They filed a
notice of strike with the NCMB.
But the Code says, you file it with
the Ministry. The Bureau of Labor
IRR says you should file it with
the NCMB. When they filed it with
the NCMB, it did not consider it as
a strikable issue. The NCMB
considered it as among the
preventive mediation items. It is
not a strike item. The SC said that
there is no ground for strike
because even the NCMB classified
it as non-strikable. How did it get
hold of that record when it was
supposed to be privileged? Article
238 is original to the law; it was
here from the very start. It is not
an amendment. How could the SC
find out that the NCMB put it
there? The NCMB testified.
Alright, you present bargaining
proposals.
You
are
the
representative of the Bargaining
unit, and then you are in
possession of proof of your status.
What is your proof of your
representative status? And mga
tao walay documentation, walay
evidence.
Lets go to the case of Divine
Word University of Tacloban
vs Torres. The independent
union of the faculty won so they

are certified as the exclusive

bargaining agent. They present
bargaining proposals to the
university administration. The
university administration did not
act on it. Three years passed by
and there was no action. Because
the president of the union died.
After three years, here comes ALU
who presents a new bargaining
proposal. When does the duty to
bargain begin? When the party
who desires to bargain submits
his proposal to bargain. He
submits it to the other party. It
was the representative of the
bargaining unit nga gikuyogan sa
officials sa union. Unya, wala
nakasubmit ug proof of majority
representation status. Wala may
proof.
Why?
Because
the
certification
is
for
the
independent union, not for the
federation (ALU). The registration
of the federation is distinct from
the independent union.
That is why I suggest you read
the decision of Kiok Loy. Ayaw
sayangi ang decision ni Cuevas. A
wild decision, questionable but it
remains in the books. It tears
apart the very nature of what a
contract is because it justifies the
unilateral action of the State in
saying that this proposal is now
the agreement because the other
party refused to bargain.
One day it will be overturned. You
mark my word. Remember me in
my grave because that is an
erroneous legal ruling. After
teaching this subject for 32/33
years, I have the right to say that.
Difference between Kiok Loy
and Nestle: Nestle said we wont
bargain
anymore
with
the
retirement plan. The SC said that
is part of the mandatory settling
of bargaining because that is part
of the terms and conditions of
work. Nestle said we dont want

to bargain anymore kay nag

bargain na mi sa 12 kabuok. If we
bargain with you and mausab na,
mausab pud ning 12 kabuok. That
is what Nestle said. (talks about
Nestle building a new plant)
It is very important that you know
what refusal to bargain is.
Stonewalling is refusal to bargain.
Tagaan kag bargain proposal,
wala kay reaction. That is refusal
to bargain. That is bad faith
bargaining.
First Duty: 1. to meet and
convene
promptly
and
expeditiously
So the first duty is behavioural. It
is very easy. You can see that.
Wala
siya
dinha,
walay
bargaining.
Second duty: in good faith
Mao ning lisod. Does the length of
time of the negotiation tell you
whether or not you are bargaining
in good faith. Kada semana mo
magtagbo,
lain-lain
nga
restaurant inyong adtuan. Walay
pagkahuman. Explain ang union
side.
Explain
na
sad
ang
management side. Pila inyong
gipangayo? 250 a day. Unya ang
employer: among mahatag 50
lang a day. 250,50, 250, 50. Tanawa ra gyud ning among financial
statement.
Ang sick leave gusto buhaton sa
union ug 10 days. Ingon sab sa
management, 3 shift basis baya
ta ha. Unya kung muleave mo,
mubayad pa ta sa mupuli nimo,
icompute na ninyo.Pagkahuman
nay compromise, 8 days. Ing-ana
na ang negotiation. Pagkahuman
ana kay you reduce it to contract
language. Pagreduce sa contract
language, dugay kayo. Dili dayon

magkasabot. That is the process.

That is the nitty-gritty.
Third Duty: For the purpose of
the CBA ( 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
Fourth Duty: the duty does
not compel any party to agree
to a proposal
Fifth Duty: It does not compel
any party to make any
concessions
DUTY
TO
PROVISIONS:

BARGAIN

1.
Article
124.
Standards/Criteria
for
minimum wage fixing. x x x
Where the application of any
prescribed wage increase by
virtue of a law or wage order
issued by any Regional Board
results in distortions of the wage
structure within an establishment,
the employer and the union
shall negotiate to correct the
distortions. Any dispute arising
from wage distortions shall be
resolved through the grievance
procedure under their collective
bargaining agreement and, if it
remains
unresolved,
through
voluntary
arbitration.
Unless
otherwise agreed by the parties in
writing, such dispute shall be
decided
by
the
voluntary
arbitrators
within
ten
(10)

calendar days from the time said

dispute was referred to voluntary
arbitration.
xxx
2.
Art 261 (251). Duty to bargain
collectively in the
absence of CBA. 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 the
employer and the representatives of the
employees to bargain collectively in
accordance with the provisions of this
Code.
3.
Art 262 (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.
4.
Art. 263. 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 60day period and/or until a new
agreement is reached by the
parties.
5.
Art. 264. 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)

Those are the five DUTY TO

BARGAIN provisions in the Labor
Code.
Kiok Loy vs NLRC, is 141
SCRA 179 (1986) and Divine
Word University of Tacloban
vs Secretary Torres is 213
SCRA
759
(1992).Latest
reiteration of the Kiok Loy
ruling is General Milling Corp.
vs NLRC (no citation).
GENERAL RULE: The employer
must
answer
a
bargaining
proposal within 10 days.
EXCEPTIONS: (from old cases
decided under the Industrial
Peace Act, in effect beginning
1954 and was supplanted by the
Labor Code, Book V, on November
1, 1974)
1. LVN Pictures Employees
vs LVN, 35 SCRA 147
- LVN
Pictures,
upon
receipt
of
the
bargaining
proposals,
they
acknowledged
receipt but they did not
answer within 10 days.
Why? Because they are
waiting for the General
Stockholders Meeting of
LVN which is to happen
a month later. The
stockholders are going
to make a fundamental
decision.
The
union
brought an unfair Labor
practice case against
the management for
refusal
to
answer.
Management said we
have already arrived at
a fundamental decision
after 1 month. LVN is
finally closing down. We
are declaring insolvency
and we are closing
down.
- SC:
It
is
justified
because
they
have

decided no longer to
continue with business.
LVN stopped making
movies. They just rent
out their equipment to
those
who
make
movies.
2. National
Union
of
Restaurant Workers vs
CIR, 10 SCRA 843/343?
(1964)
- National
Union
of
Restaurant Workers is a
union of the workers of
Aristocrat
Restaurant,
the one of the oldest
restaurant in Manila. It
has been there before
World War II.
- This is a landmark case.
The owner did not just
mind the bargaining
proposals
until
the
union,
after
two
months, filed a notice of
strike. They said that
the employer is guilty of
unfair labor practice.
When they filed a notice
of strike, that is when
the big boss appeared.
- The conciliator said to
the owner: You have not
acknowledged
their
bargaining
proposals.
What do you say about
their
bargaining
proposals.
The
boss
said, I forgot. Can you
give me a copy of the
bargaining proposals?
- So the Labor union gave
her a copy. She took it,
read it. Said, #1, this is
too much. #2, maybe
we
can
make
compromise. She went
down
the
entire
proposal.
She
made
marginal annotations by
way of responding to
the proposals.

The union took it and it

became part of the
document of a case that
later
on
went
to
compulsory arbitration.
The union insisted that
she failed on her duty to
bargain. So they were
pushing on a ruling on
their
unfair
labor
practice charge.
Issue: When she made
those marginal notes by
way of responding to
the proposal item by
item, and she gave it
back to the union, can
that be considered as
substantial compliance
of her duty to bargain?
SC: Yes. When she met
with the union and may
markings
on
the
proposal as to which of
the
proposal
is
acceptable
or
unacceptable and those
which
needed
more
discussion, that was
considered
as
substantial compliance
with
the
duty
to
bargain.

Is management obliged to
initiate
the
collective
bargaining? That was answered
by Cuevas in Kiok Loy. The
Supreme Court says No.
Is employer obliged to file a
grievance? No. ( SMTFM-UWP vs
NLRC, L- 113856, September 7,
1998) There is no need for
management to file grievance
because in ordinary parlance, the
bargaining obligation ends with
an agreement. When there is
already an agreement, you do not
bargain
anymore;
you
administer/implement
the
agreement. In CBA, collective
bargaining does not end with an

agreement.
continues.

Bargaining

Bar Exam Question: What do

you mean by, Collective
bargaining as a process does
not end with an collective
bargaining agreement? The
explanation is clearly shown in
the landmark case of Republic
Savings Bank vs CIR, 21 SCRA
226, 1967.
From full text of Republic Savings
Bank:
For 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, by section 4 (a) (6)
and (b) (3) an unfair labor
practice. As Professors Cox and
Dunlop point out:
Collective bargaining . . . normally
takes the form of negotiations
when
major
conditions
of
employment to be written into an
agreement
are
under
consideration and of grievance
committee
meetings
and
arbitration when questions arising
in the administration of an
agreement are at stake.
In Republic Savings Bank, you
have a union who writes, signed
by the President and all of the
officers of the union, addressed to
the President of the Bank, and the
letter is made an open letter and
distributed
to
all
of
the
employees of the bank. What
does the letter say? You are a no

good, bad president. In fact, you

are an immoral President. Your
secretary is your mistress. You
went to a banking conference in
California and you did not bring
any of the managers of the bank.
You brought the Secretary. The
President called an investigation
of the officers and the president.
The offense was slandering and
putting
in
bad
light
the
management of the bank. After
the investigation, the president
and the officers of the union were
fired. They filed an unfair labor
practice dismissal. They said that
they were filed for exercising their
right to self-organization.
Who won the case? The union
won the case. The SC said that
when the union complained of
nepotism, favouritism and other
management practices, they were
acting within an area marked out
by the Industrial Peace Act as a
proper sphere of the Collective
Bargaining. Even the reference to
immorality was not irrelevant as it
was made to support the
respondents' other charge that
the bank president had failed to
provide
wholesome
working
conditions, let alone a good moral
example, for the employees by
practicing
discrimination
and
favoritism in the appointment and
promotion of certain employees
on the basis of illicit relations or
blood relationship with them.
..what the Bank should have
done was to refer the lettercharge
to
the
grievance
committee. This was its duty,
failing which it committed an
unfair
labor
practice
under
section 4(a) (6) of the Industrial
Peace Act.
Instead of stifling criticism, the
Bank 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
collective
bargaining
agreements, 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, as it were, a
friendly dialogue between labor
and management as a means of
maintaining industrial peace.
Once again, this is an exception
of
traditional
concepts
of
contract. There is no more
negotiation once there is an
agreement reduced into writing.
But, in collective bargaining,
negotiation continues.
CONTENT OF THE DUTY TO
BARGAIN ONCE YOU HAVE A
COLLECTIVE
BARGAINING
AGREEMENT:
Art. 263. 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.
The
agreement
therefore
continues even if it is expired if

there is no CBA yet. Although you

are allowed to renegotiate it, if
there is no agreement, then
automatically it is extended. That
is by provision of law.
Is the 60-day Freedom Period the
6th Duty to Bargain Provision?
Must the employer answer it
within 10 days under Article 262?
Think about that. Why it was not
included in the 5 provisions.
PARTIES CANNOT MODIFY or
TERMINATE THE AGREEMENT. But,
you can renegotiate before the
end of the 23rd year the last two
years of the CBA. And, 60 days
before the end of the CBA, you
can also propose a renegotiation.
However, the SC says that an
employer
that
allows
renegotiation does so in its own
risk. This is because if there is a
Certification Election and a new
Exclusive bargaining agent is
elected, the new CBA will be set
aside because the EBA will
negotiate his own CBA. That is
why there is no duty to bargain
during the 60 days. It is only
PERMISSIVE on the part of the
employer.
Rule: NEITHER PARTIES MAY
MODIFY THE CBA
Exception:
Management
can
always modify as long as their
modification is better than what
he CBA provides. If management
makes changes and it is in favour
of the workers, what prevails is
the practice modifying the CBA.
Because it grants more to the
workers.
Rule: NEITHER PARTIES SHALL
TERMINATE THE CBA
Exception: For example, during
the affectivity of the CBA, there is
a schism. The local disaffiliates
from
the
federation.
The
federation is the signatory of the

CBA. The substitutionary doctrine

applies. Your new federation takes
the place of the incumbent and it
can say that let us negotiate to
terminate the CBA. That is one of
the very rare exceptions.
Labor relations is just kuti.
Kinahanglan ka magbuhat ug
outline gikan sa sinugdanan
hantod ma imo na tanan.