Case Digests
Ca
of Micah Pogi (Labor Relations, CBAs)
1. California Manufacturing Corporation v.
Laguesma
G.R. No. 97020
8 June 1992
Paras, J.:
Facts:
A petition for certification election among the
supervisors of California Manufacturing
Corporation (CMC) was filed by the Federation
of Free Workers (FFW) — California
Manufacturing Corporation Supervisors Union
Chapter (CALMASUCO)
There was at that time no recognized
supervisors union existing in the company. The
petition was filed in accordance with Article 257
of the Labor Code and it was supported by a
substantial member of signatures of the
employees concerned.
CMC, alleged that the petition for the holding of
a certification election should be denied as it is
not supported by the required twenty-five
percent (25%) of all its supervisors because a
big number of the supposed signatories to the
petition are not actually supervisors as they
have no subordinates to supervise, nor do they
have the powers and functions which under the
law would classify them as supervisors.
FFW—CALMASUCO answered back by
contending that under the law, when there is no
existing unit yet in a particular bargaining unit at
the time a petition for certification election is
filed, the 25% rule on the signatories does not
apply. It adds that the "organized establishment"
contemplated by law does not refer to a
"company" per se but rather refers to a
"bargaining unit" which may be of different
classifications in a single company and that as
of that time, CMC has at least two (2) different
bargaining units, namely, the supervisory
(unorganized) and the rank-and-file (organized).
The Med-Arbiter ruled in favor of CALMASUCO
and ordered the holding of a certification
election. CMC appealed to the Secretary of
DOLE but the latter agreed with the Med-Arbiter.
Hence, the petition was brought to the Court.
Issue:
WON the term "unorganized establishment' in
Article 257 of the Labor Code refers to a
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bargaining unit and not a business
establishment.
Held:
YES. Article 257 of the Labor code is applicable
to unorganized labor organizations and not to
establishments where there exists a certified
bargaining agent which had previously entered
into a collective bargaining agreement with the
management. Otherwise stated, the
establishment concerned must have no certified
bargaining agent.
In the instant case, it is beyond cavil that the
supervisors of CMC which constitute a
bargaining unit separate and distinct from that of
the rank-and-file have no such agent. Thus, they
correctly filed a petition for certification election
thru union FFW-CALMASUCO, likewise
indubitably a legitimate labor organization.
CMC's insistence on the 25% subscription
requirement, is clearly immaterial.
2. Indophil Textile Mill Workers Union-
PTGWO v. Calica
G.R. No. 96490
3 February 1992
Medialdea, J.:
Facts:
Indophil Textile Mill Workers Union-PTGWO
(Union) and Indophil Textile Mills, Inc. (Indophil)
executed a collective bargaining agreement
effective from April 1, 1987 to March 31, 1990.
On November 3, 1967 Indophil Acrylic
Manufacturing Corporation (Acrylic) was formed
and registered with the Securities and Exchange
Commission. In 1988, Acrylic became
operational and hired workers according to its
own criteria and standards. Sometime in July,
1989, the workers of Acrylic unionized and a
duly certified collective bargaining agreement
was executed.
In 1990 or a year after the workers of Acrylic
have been unionized and a CBA executed, the
union claimed that the plant facilities built and
set up by Acrylic should be considered as an
extension or expansion of the facilities of private
respondent Company pursuant to Section 1(c),
Article I of the CBA. In other words, it is the
union's contention that Acrylic is part of the
Indophil bargaining unit. Indophil opposed by
Case Digests
Ca
of Micah Pogi (Labor Relations, CBAs)
saying that it is a juridical entity separate and
distinct from Acrylic.
The existing impasse led the union and Indophil
to enter into a submission agreement. The
parties jointly requested Teodorico Calica to act
as voluntary arbitrator in the resolution of the
pending labor dispute pertaining to the proper
interpretation of the CBA provision. Calica held
for Indophil. Thereafter, the union brought their
case to the Supreme Court.
Issue:
WON the rank-and-file employees working at
Acrylic should be recognized as part of, and/or
within the scope of the bargaining unit of
Indophil.
Held:
NO. In the case of Diatagon Labor Federation
Local 110 of the ULGWP v. Ople it was held that
it is grave abuse of discretion to treat two
companies as a single bargaining unit when
these companies are indubitably distinct entities
with separate juridical personalities.
Hence, the Acrylic not being an extension or
expansion of Indophil, the rank-and-file
employees working at Acrylic should not be
recognized as part of, and/or within the scope of
the union, as the bargaining representative of
Indophil.
Also here, the union seeks to pierce the veil of
corporate entity of Acrylic, alleging that the
creation of the corporation is a devise to evade
the application of the CBA between it and
Indophil. The fact that the businesses of Indophil
and Acrylic are related, that some of the
employees of Indophil are the same persons
manning and providing for auxilliary services to
the units of Acrylic, and that the physical plants,
offices and facilities are situated in the same
compound, these facts are not sufficient to
justify the piercing of the corporate veil of
Acrylic.
3. Standard Chartered Bank Employees
Union v. Confesor
G.R. No. 114974
16 June 2004
Callejo, Sr., J.:
Facts:
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In August of 1990, the Bank and the Union
signed a 5-year collective bargaining agreement
(CBA) with a provision to renegotiate the terms
thereof on the third year. Prior to the expiration
of the three-year period but within the sixty-day
freedom period, the Union initiated the
negotiations. On February 18, 1993, the Union,
through its President, Eddie L. Divinagracia,
sent a letter containing its proposal covering
political and economic provisions.
In a Letter dated February 24, 1993, the Bank,
through its Country Manager Peter H. Harris,
took note of the Union’s proposals. The Bank
attached its counter-proposal to the non-
economic provisions proposed by the Union.
The Bank posited that it would be in a better
position to present its counter-proposals on the
economic items after the Union had presented
its justifications for the economic proposals.
Before the commencement of the negotiation,
the Union, through Divinagracia, suggested to
the Bank’s 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 Union’s negotiating panel.
However, Umali was retained as a member
thereof.
Thereafter, the parties met and set the ground
rules for the negotiation. Diokno suggested that
the negotiation be kept a “family affair.”
The negotiations on the economic aspect
ultimately stalled with both parties refusing to
budge. Diokno stated that, in order for the Bank
to make a better offer, the Union should clearly
identify what it wanted to be included in the total
economic package. Umali replied that it was
impossible to do so because the Bank’s counter-
proposal was unacceptable. The Union declared
a deadlock and filed a Notice of Strike before the
National Conciliation and Mediation Board
(NCMB).
On the other hand, the Bank filed a complaint for
Unfair Labor Practice (ULP) and Damages
before the Arbitration Branch of the National
Labor Relations Commission
Case Digests
Ca
of Micah Pogi (Labor Relations, CBAs)
The Bank alleged 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
Further, the Union violated its no strike-no
lockout clause by filing a notice of strike before
the NCMB. Considering that the filing of notice
of strike was an illegal act, the Union officers
should be dismissed.
The Secretary of DOLE assumed jurisdiction
over the case, dismissed the charges of ULP of
both the Union and the Bank, explaining that
both parties failed to substantiate their claims,
and ordered both to enter into a CBA under the
terms which she outlined in her decision.
In this petition, the Union alleges that the SOLE
acted with grave abuse of discretion amounting
to lack or excess of jurisdiction when it found
that the Bank did not commit unfair labor
practice by surface bargaining.
Issue:
WON the Union was able to substantiate its
claim of unfair labor practice against the Bank.
Held:
NO. Surface bargaining is defined as “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 party’s conduct both at and
away from the bargaining table.
Here, 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
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amount to ULP under Article 248(g) for violation
of the duty to bargain.
4. Kiok Loy v. NLRC
G.R. No. L-54334
22 January 1986
Cuevas, J.:
Facts:
In a certification electio the Pambansang
Kilusang Paggawa (Union), a legitimate late
labor federation, won and was subsequently
certified 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).
Thereafter, the Union furnished the Company
with two copies of its proposed collective
bargaining agreement. At the same time, it
requested the Company for its counter
proposals. Eliciting no response to the aforesaid
request, the Union again wrote the Company
reiterating its request 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. Left with no other alternative the
Union, 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. But all
attempts towards an amicable settlement failed,
prompting the Bureau of Labor Relations to
certify the case to the National Labor Relations
Commission (NLRC) for compulsory arbitration
The Union submitted its position paper. The
Company did not, and instead requested for a
resetting which was granted. The Company was
directed anew to submit its financial statements
for the years 1976, 1977, and 1978.
When the case was called for hearing as
scheduled, the Company's representative, Mr.
Ching, who was supposed to be examined,
failed to appear. Atty. Panganiban then
requested for another postponement which the
labor arbiter denied. He also ruled that the
Company has waived its right to present further
evidence and, therefore, considered the case
submitted for resolution. Thereafter, labor arbiter
Case Digests
Ca
of Micah Pogi (Labor Relations, CBAs)
Fidelino submitted its report to the NLRC which
then rendered its decision in favor of the Union.
In this instant petition, Company now maintains
that 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.
It further contends that the NLRC's finding of
unfair labor practice for refusal to bargain is not
supported by law and the evidence.
Issue:
WON the Company is guilty of ULP for refusal to
bargain collectively.
Held:
YES. Collective bargaining 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.
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.
A Company's refusal to make counter proposal if
considered in relation to the entire bargaining
process, may indicate bad faith and this is
specially true where the Union's request for a
counter proposal is left unanswered. Even
during the period of compulsory arbitration
before the NLRC, petitioner Company's
approach and attitude-stalling the negotiation by
a series of postponements, non-appearance at
the hearing conducted, and undue delay in
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submitting its financial statements, lead to no
other conclusion except that it is unwilling to
negotiate and reach an agreement with the
Union.
5. SMCEU v. Confesor
G.R. No. 111262
19 September 1996
Kapunan, J.:
Facts:
On June 28, 1990, petitioner-union San Miguel
Corporation Employees Union - PTGWO (Union)
entered into a Collective Bargaining Agreement
(CBA) with private respondent San Miguel
Corporation (SMC) to take effect upon the
expiration of the previous CBA or on June 30,
1989.
In keeping with their vision and long term
strategy for business expansion, SMC
management informed its employees in a letter
that the company which was composed of four
operating divisions namely: (1) Beer, (2)
Packaging, (3) Feeds and Livestocks, (4)
Magnolia and Agri-business, would undergo a
restructuring. As a result, Magnolia and Feeds
and Livestock Division were spun-off and
became two separate and distinct corporations:
Magnolia Corporation (Magnolia) and San
Miguel Foods, Inc. (SMFI). Notwithstanding the
spin-offs, the CBA remained in force and effect.
After June 30, 1992, the CBA was renegotiated
in accordance with the terms of the CBA and
Article 253-A of the Labor Code. Negotiations
started sometime in July, 1992 with the two
parties submitting their respective proposals and
counterproposals.
During the negotiations, the petitioner-union
insisted that the bargaining unit of SMC should
still include the employees of the spun-off
corporations: Magnolia and SMFI; and that the
renegotiated terms of the CBA shall be effective
only for the remaining period of two years or
until June 30, 1994.
SMC, on the other hand, contended that the
members/employees who had moved to
Magnolia and SMFI, automatically ceased to be
part of the bargaining unit at the SMC.
Furthermore, the CBA should be effective for
three years in accordance with Art. 253-A of the
Labor Code. As negotiations stalled, a strike by
Case Digests
Ca
of Micah Pogi (Labor Relations, CBAs)
the Union ensued. The Secretary of Labor
assumed jurisdiction over the dispute. After the
parties submitted their position papers the
Secretary decided to the effect that the
renegotiated terms of the CBA shall be effective
for the period of three (3) years from June 30,
1992, and shall cover only the employees of
SMC and not of Magnolia and SMFI.
Dissatisfied, the union went to the Court
questioning this Order of the Secretary of Labor.
Issue(s):
1. WON the duration of the renegotiated terms
of the CBA is to be effective for three years.
2. WON the bargaining unit of SMC includes
also the employees of Magnolia and SMFI.
Held:
1. YES. Article 253-A states that the CBA has a
term of five (5) years instead of three years,
before the amendment of the law as far as the
representation aspect is concerned. All other
provisions of the CBA shall be negotiated not
later than three (3) years after its execution.
The “representation aspect” refers to the identity
and majority status of the union that negotiated
the CBA as the exclusive bargaining
representative of the appropriate bargaining unit
concerned. “All other provisions” simply refers
to the rest of the CBA, economic as well as non-
economic provisions, except representation.
In the instant case, it is not difficult to determine
the period of effectivity for the non-
representation provisions of the CBA. Taking it
from the history of their CBAs, SMC intended to
have the terms of the CBA effective for three (3)
years reckoned from the expiration of the old or
previous CBA which was on June 30, 1989, as it
provides:
SECTION 1. This Agreement which
shall be binding upon the parties hereto
and their respective successors-in-
interest, shall become effective and
shall remain in force and effect until
June 30, 1992.
2. NO. Undeniably, the transformation of the
companies was a management prerogative and
business judgment which the courts cannot look
into unless it is contrary to law, public policy or
morals. Neither can we impute any bad faith on
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the part of SMC so as to justify the application of
the doctrine of piercing the corporate veil.
Moreover, in determining an appropriate
bargaining unit, the test of grouping is mutuality
or commonality of interests. The employees
sought to be represented by the collective
bargaining agent must have substantial mutual
interests in terms of employment and working
conditions as evinced by the type of work they
performed. Considering the spin-offs, the
companies would consequently have their
respective and distinctive concerns in terms of
the nature of work, wages, hours of work and
other conditions of employment.
Interests of employees in the different
companies perforce differ. SMC is engaged in
the business of beer manufacturing. Magnolia is
involved in the manufacturing and processing of
dairy products while SMFI is involved in the
production of feeds and the processing of
chicken. The nature of their products and scales
of business may require different skills which
must necessarily be commensurated by different
compensation packages. The different
companies may have different volumes of work
and different working conditions. For such
reason, the employees of the different
companies see the need to group themselves
together and organize themselves into
distinctive and different groups. It would then be
best to have separate bargaining units for the
different companies where the employees can
bargain separately according to their needs and
according to their own working conditions.
6. ALU v. Calleja
G.R. No. L-77282
5 May 1989
Regalado, J.:
Facts:
The associated Labor Unions (ALU) in a letter,
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 Collective Bargaining
Agreement (CBA).
GAW Trading Inc. received the leetter of ALU
and responded to ALU indicating its recognition
of ALU as the sole and exclusive bargaining
Case Digests
Ca
of Micah Pogi (Labor Relations, CBAs) 2014

agent for the majority of its employees and for
which it set the time for conference and/or
negotiation.
The following day of May13, 1986, ALU in behalf
of the majority of the employees of GAW
Trading Inc. signed and excuted the Collective
Bargaining. Then, on May 15, 1986, ALU in
behalf of the majority of the employees of GAW
Trading Inc. and GAW Trading Inc. signed and
executed the Collective Bargaining Agreements.
Rival unions, having been by-passed by the
moves, actively sought for the conduct of a
certification election, which was granted. The
BLR also ruled 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 collective bargaining
agreement involved herein is defective because
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 ratification and that it has been ratified
by the majority of the employees in the
bargaining unit. The ALU in this petition,
contests the finding of the BLR.
on the same date. The only express recognition
of petitioner as said employees' bargaining
representative is in the collective bargaining
agreement 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.
As earlier stated, GAW's aforesaid letter is dated
May 12, 1986 while the two other unions,
Southern Philippine Federation of Labor
(hereafter, SPFL and Philippine Social Security
Labor Union (PSSLU, for short), went on strike
earlier on May 9, 1986. 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
improvident.

Issue:

1. WON the CBA between ALU and GAW

Trading is protected under the contract bar rule.

Held:

NO. 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 bar rule are those which do not
foster industrial stability, such as contracts
where the 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.

In the present case, the standing of petitioner as

an exclusive bargaining representative is
dubious, to say the least. It may be recalled that
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

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