PAL v. NLRC G.R. No.

85985 August 13, 1993

Facts: PAL completely revised its 1966 Code of Discipline. The Code was circulated among the
employees and was immediately implemented, and some employees were forthwith subjected to
the disciplinary measures embodied therein.

The Philippine Airlines Employees Association (PALEA) filed a complaint before the National
Labor Relations Commission (NLRC). PALEA contended that PAL, by its unilateral
implementation of the Code, was guilty of unfair labor practice, specifically Paragraphs E and
G of Article 249 and Article 253 of the Labor Code. PA LEA alleged that copies of the Code
had been circulated in limited numbers; that being penal in nature the Code must conform with
the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and
prejudicial to the rights of the employees.

It prayed that implementation of the Code be held in abeyance; that PAL should discuss the
substance of the Code with PALEA; that employees dismissed under the Code be reinstated and
their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice
and be ordered to pay damages

PAL asserted its prerogative as an employer to prescibe rules and regulations regarding
employees' conduct in carrying out their duties and functions, and alleging that by
implementing the Code, it had not violated the collective bargaining agreement (CBA) or any
provision of the Labor Code. Assailing the complaint as unsupported by evidence, PAL
maintained that Article 253 of the Labor Code cited by PALEA reffered to the requirements for
negotiating a CBA which was inapplicable as indeed the current CBA had been negotiated.

Issue: W/N the formulation of a Code of Discipline among employees is a shared responsibility
of the employer and the employees.

Ruling: Petitioner's assertion that it needed the implementation of a new Code of Discipline
considering the nature of its business cannot be overemphasized. In fact, i ts being a local
monopoly in the business demands the most stringent of measures to attain safe travel for its
patrons. Nonetheless, whatever disciplinary measures are adopted cannot be properly
implemented in the absence of full cooperation of the employees. Such cooperation cannot be
attained if the employees are restive on account, of their being left out in the determination of
cardinal and fundamental matters affecting their employment.

1
 ANTONIO CARAG VS NLRC ET. AL.
G.R NO. 147590, APRIL 2, 2007
FACTS:
National Federation of Labor Unions (NAFLU) and Mariveles Apparel Corporation
Labor Union (MACLU), on behalf of all of MAC’s rank and file employees, filed a
complaint against MAC for illegal dismissal brought about by its illegal closure of
business. They included in their complaint Mariveles Apparel Corporation’s Chairman of
the Board Antonio Carag in order to be solidarily liable for the illegal dismissal and illegal
closure of business. According to the Labor Union of MAC, the Corporation suddenly
closed its business without following the notice as laid down in the Labor Law of the
Philippines. The Labor Arbiter decided in favor of the Labor Union and held that Antonio
Carag being the owner of the corporation be solidarily liable for the payment of separation
pay and backwages of the rank and file employees. Antonio Carag questioned the decision
of the Labor Arbiter and alleged that the Corporation and its officers have separate and
distinct personality and the latter cannot be held liable solidarily in cases of payment of
damages.

Issue:
Whether or not Antonio Carag be held solidarily liable for the payment of the
illegally dismissed employees.

Held:
The Supreme Court held that the rule is that a director is not personally liable for the
debts of the corporation, which has a separate legal personality of its own. Section 31 of
the Corporation Code lays down the exceptions to the rule, as follows:

Liability of directors, trustees or officers. - Directors or trustees

who wilfully and knowingly vote for or assent to patently unlawful acts
of the corporation or who are guilty of gross negligence or bad faith in
2
 directing the affairs of the corporation or acquire any personal or
pecuniary interest in conflict with their duty as such directors or trustees
shall be liable jointly and severally for all damages resulting therefrom
suffered by the corporation, its stockholders or members and other
persons.

xxxx

Section 31 makes a director personally liable for corporate debts if he wilfully and
knowingly votes for or assents to patently unlawful acts of the corporation. Section
31 also makes a director personally liable if he is guilty of gross negligence or bad faith
in directing the affairs of the corporation.

Complainants did not allege in their complaint that Carag wilfully and knowingly
voted for or assented to any patently unlawful act of MAC. Complainants did not present
any evidence showing that Carag wilfully and knowingly voted for or assented to any
patently unlawful act of MAC. Neither did Arbiter Ortiguerra make any finding to this
effect in her Decision.

For a wrongdoing to make a director personally liable for debts of the corporation,
the wrongdoing approved or assented to by the director must be a patently unlawful
act. Mere failure to comply with the notice requirement of labor laws on company closure
or dismissal of employees does not amount to a patently unlawful act. Patently unlawful
acts are those declared unlawful by law which imposes penalties for commission of such
unlawful acts. There must be a law declaring the act unlawful and penalizing the act.

Wherefore, Antonio Carag is not liable to the debt of the Corporation as to the
illegally dismissed employees of MAC.

3
G.R. No. 113856 September 7, 1998
SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS OF THE
PHILIPPINES (SMTFM-UWP), its officers and members, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. JOSE G. DE VERA and TOP FORM
MANUFACTURING PHIL., INC., respondents.

FACTS
- Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers of the Philippines (SM) was
the certified collective bargaining representative of all regular rank and file employees of private respondent Top
Form Manufacturing Philippines, Inc.
- Employer Top Form Manufacturing (TFM) refused to grant across-the-board increases to its employees in
implementing Wage Order No. 01 (granting an increase of P17 per day in the salary of workers) and Wage Order
No. 02 (providing for a P12 daily increase in salary) 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-the-board basis.
- The union SM requested the implementation of said wage orders. But they demanded that the increase be on an
across-the-board basis. Respondent TFM refused to accede to that demand. Instead, it implemented a scheme of
increases purportedly to avoid wage distortion. TFM granted the P17 increase under WO#01 to
workers/employees receiving salary of P125/day and below. The P12 increase under by WO#02 was granted to
those receiving the salary of P140/day and below. For employees receiving salary higher than P125 or
P140.00/day, TFM granted an escalated increase ranging from P6.99 to P14.30 and from P6.00 to P10.00,
respectively.
- SM filed a complaint with the NCR NLRC.
- Petitioner’s contention: TFM's act of "reneging on its undertaking/promise clearly constitutes act of unfair labor
practice through bargaining in bad faith." It charged TFM with acts of unfair labor practices or violation of A247
of the Labor Code, as amended, specifically "bargaining in bad faith," and prayed that it be awarded actual, moral
and exemplary damages. In its position paper, the union added that it was charging private respondent with
"violation of A100 of the Labor Code."
- Respondent’s contention: In implementing Wage Orders Nos. 01 and 02, it had avoided "the existence of a wage
distortion" that would arise from such implementation.
- 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. It quoted the provision of the CBA that reflects the parties' intention to "fully set
forth" therein all their agreements that had been arrived at after negotiations that gave the parties "unlimited right
and opportunity to make demands and proposals with respect to any subject or matter not removed by law from
the area of collective bargaining."
- Labor Arbiter dismissed the complaint for lack of merit. On appeal at the NLRC, same was dismissed for lack
of merit. MFR denied. Hence, this petition.
ISSUES
1. Whether private respondent Top Form Manufacturing committed an unfair labor practice in its refusal to grant
across-the-board wage increases in implementing Wage Orders Nos. 01 and 02
2. Whether there was a significant wage distortion of the wage structure in private respondent as a result of the
manner by which said wage orders were implemented

HELD
1. NO

4
The CBA is the law between the contracting parties. Thus, only provisions embodied in the CBA should be so
interpreted and complied with. Where a proposal or a promise 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.

- If there was indeed a promise or undertaking on the part of TFM to obligate itself to grant an automatic across-
the-board wage increase, union SM should have requested or demanded that such "promise or undertaking" be
incorporated in the CBA. After all, petitioner has the means under the law to compel private respondent to
incorporate this specific economic proposal in the CBA. It could have invoked A252 of the Labor Code defining
"duty to bargain," thus, the duty includes "executing a contract incorporating such agreements if requested by
either party."
- A252 also states that the duty to bargain "does not compel any party to agree to a proposal or make any
concession." Thus, petitioner 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.
- SM’s contention that the Minutes of the collective bargaining negotiation meeting forms part of the entire
agreement is pointless. If indeed private respondent promised to continue with the practice of granting across-
the-board salary increases ordered by the government, such promise could only be demandable in law if
incorporated in the CBA.
*Granted that private respondent TFM had granted an across-the-board increase pursuant to Republic Act No.
6727, that single instance may not be considered an established company practice.

2. NO
The issue of whether or not a wage distortion exists is a question of fact that is within the jurisdiction of the quasi-
judicial tribunals below. Factual findings of administrative agencies are accorded respect and even finality in this
Court if they are supported by substantial evidence. Thus, in Metropolitan Bank and Trust Company, Inc. v.
NLRC, the Court said:
The issue of whether or not a wage distortion exists as a consequence of the grant of a wage increase to certain
employees, we agree, is, by and large, a question of fact the determination of which is the statutory function of
the NLRC. Judicial review of labor cases, we may add, does not go beyond the evaluation of the sufficiency of
the evidence upon which the labor officials' findings rest. As such, the factual findings of the NLRC are generally
accorded not only respect but also finality provided that its decisions are supported by substantial evidence and
devoid of any taint of unfairness or arbitrariness. When, however, the members of the same labor tribunal are not
in accord on those aspects of a case, as in this case, this Court is well cautioned not to be as so conscious in
passing upon the sufficiency of the evidence, let alone the conclusions derived therefrom.
Unlike in above-cited case where the Decision of the NLRC was not unanimous, the NLRC Decision in this case
which was penned by the dissenter in that case, Presiding Commissioner Edna Bonto-Perez unanimously ruled
that no wage distortions marred private respondent's implementation of the wage orders. The NLRC said:
On the issue of wage distortion, we are satisfied that there was a meaningful implementation of Wage Orders
Nos. 01 and 02. This debunks the claim that there was wage distortion as could be shown by the itemized wages
implementation quoted above. It should be noted that this itemization has not been successfully traversed by the
appellants. . . . .
- In this case, NLRC unanimously ruled that no wage distortions marred private respondent's implementation of
the wage orders. There was a meaningful implementation of WO#01 and #02. SM’s contention on the issue of
wage distortion and the resulting allegation of discrimination against the TFM's employees are anchored on its
dubious position that TFM's promise to grant an across-the-board increase in government-mandated salary
benefits reflected in the Minutes of the negotiation is an enforceable part of the CBA.

5
SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS OF THE
PHILIPPINES (SMTFM-UWP), its officers and members v. NLRC
G.R. No. 113856
Romero J.
September 7, 1998
Topic: unfair Labor Practice

Facts:

 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
 On February 27, 1990, A the collective bargaining negotiation was held.
 The parties agreed to discuss unresolved economic issues. According to the minutes of the meeting,
Article VII of the collective bargaining agreement was discussed.
o In the minutes of the meeting, across the board wage increase was tackled but it was not stated
anymore in the CBA since the union dropped such proposals relying to the undertakings made by
the officials of the company
 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, thus the issue of this case

Issues:

(1) whether or not private respondent committed an unfair labor practice in its refusal to grant across-the-
board wage increases in implementing Wage Orders Nos. 01 and 02, which was stated in the minutes of
the meeting on their discussions on February 27, 1990?\

(2) whether or not an employer committed an unfair labor practice by bargaining in bad faith and
discriminating against its employees?

(3) whether or not there was a significant wage distortion of the wage structure in private respondent as a
result of the manner by which said wage orders were implemented?

Held:

1 No. Since the across-the-board wage increase is not part of the CBA
a. The petitioner’s main point that the Minutes of the collective bargaining negotiation meeting
forms part of the entire agreement is pointless, it could only be demandable in law if
incorporated in the CBA, but in this case it was not.
b. The Minutes only reflects the proceedings and discussions undertaken in the process of
bargaining for worker benefits in the same way that the minutes of court proceedings show what
transpired therein.

6
 c. If indeed private respondent promised to continue with the practice of granting across-the-board
salary increases ordered by the government, such promise could only be demandable in law if
incorporated in the CBA.
d. Moreover, petitioner union had the right and the opportunity to insist on
the foreseeable fulfillment of the private respondent's promise by demanding its incorporation in
the CBA but they did not.
i. 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.

2 No. With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the
parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily incorporated
therein by the parties. This is not a case where private respondent exhibited an indifferent attitude
towards collective bargaining because the negotiations were not the unilateral activity of petitioner
union. The CBA is proof enough that private respondent exerted "reasonable effort at good faith
bargaining."
a. Moreover, private respondent may not be considered in bad faith since As earlier said, petitioner
union had, under the law, the right and the opportunity to insist on the foreseeable fulfillment of
the private respondent's promise by demanding its incorporation in the CBA. 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.
b.
3 Since it is a question of fact, the NLRC has the jurisdiction. As such, the factual findings of the NLRC
are generally accorded not only respect but also finality provided that its decisions are supported by
substantial evidence and devoid of any taint of unfairness or arbitrariness.
a. the NLRC Decision in this case which was penned by the dissenter in that case, Presiding
Commissioner Edna Bonto-Perez, unanimously ruled that no wage distortions marred private
respondents implementation of the wage orders.
i. On the issue of wage distortion, there was a meaningful implementation of Wage Orders
Nos. 01 and 02. This debunks the claim that there was wage distortion as could be shown
by the itemized wages implementation quoted above. It should be noted that the
itemization has not been successfully traversed by the appellants
ii. the petitioners contention on the issue of wage distortion and the resulting allegation of
discrimination against the private respondents employees are anchored on its dubious
position that private respondents promise to grant an across-the-board increase in
government-mandated salary benefits reflected in the Minutes of the negotiation is an
enforceable part of the CBA.

Disposition: The Supreme Court denied the petition and affirmed the decision of the NLRC

By: Reannah Reonal

7
SAN MIGUEL CORP. VS HON. LAGUESMA and NORTH LUZON MAGNOLIA SALES
LABOR UNION-INDEPENDENT
G.R. No. 100485. September 21, 1994

FACTS:
Private respondent union filed for a petition for certification election among all the regular sales
personnel of Magnolia Dairy Products in the North Luzon Area. This was opposed by the petitioner and
questioned the appropriateness of the bargaining unit to be represented by the union. It claimed that its
bargaining history in its sales offices, plants and warehouses is to have a separate bargaining unit for
each sales office. During the hearing of the petition, the substitute lawyer of the petitioner withdrew its
opposition and agreed to consider one bargaining unit in the mentioned sales office. Upon the order of
the Mediator-Arbiter certifying the union as the sole and exclusive bargaining agent for all the regular
sales personnel in the North Luzon area, the petitioner appealed to the Secretary of Labor contending a
mistake in the decision brought by its substitute lawyer. In a petition for certiorari,the petitioner contends
that the prior collective bargaining is the most pervasive criterion in determining the approriateness of
the CBA.

ISSUE: Whether or not the union represents an appropriate bargaining unit.

HELD:
Yes. The court ruled in accordance with the tests in determining an appropriate bargaining unit.
The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual
Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. Contrary
to petitioner's assertion, the Court has categorically ruled that the existence of a prior collective
bargaining history is neither decisive nor conclusive in the determination of what constitutes an
appropriate bargaining unit.
Indeed, 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 perform. In the case at bench,
respondent union sought to represent the sales personnel in the various Magnolia sales offices in northern
Luzon. There is similarity of employment status for only the regular sales personnel in the north Luzon
area are covered. They have the same duties and responsibilities and substantially similar compensation
and working conditions. The commonality of interest among he sales personnel in the north Luzon sales
area cannot be gainsaid. Further, the petitioner cannot insist that there should be one bargaining unit.
What greatly militates against this position is the meager number of sales personnel in each of the
Magnolia sales office in northern Luzon. Even the bargaining unit sought to be represented by respondent
union in the entire north Luzon sales area consists only of approximately
fifty-five (55) employees. Surely, it would not be for the best interest of these employees if they would
further be fractionalized. The adage "there is strength in number" is the very rationale underlying the
formation of a labor union….

8
Solidbank Corporation v. Gamier
November 15, 2010 | J. Villarama Jr.

G.R. No.159460
Petitioner: Solidbank Corporation (now known as First Metro Investment Corp.)
Respondents: Ernesto U. Gamier, Elena R. Condevillamar, Janice L. Arriola & Ophelia C. De Guzman
[RESPONDENTS 1]

G.R. No.159461
Petitioners: Solidbank Corporation and/or its successor-in-interest, First Metro Investment
Corporation, Deogracias N. Vistan & Edgardo Mendoza, Jr.
Respondents: Solidbank Union & Its Dismissed Officers and Members (129 names) [RESPONDENTS
2]

FACTS:
 Solidbank and Solidbank Employees’ Union (Union) were set to renegotiate the economic provisions
of their 1997-2001 CBA to cover the remaining 2 years (2000-2001). Negotiations commenced but
seeing that an agreement was unlikely, the Union declared a deadlock and filed a Notice of Strike on
December 29, 1999.
 In view of the impending actual strike, then DOLE Sec. Laguesma assumed jurisdiction over the
labor dispute and in an Assumption Order dated January 18, 2000 directed the parties “to cease and
desist from committing any and all acts that might exacerbate the situation”. In another Order dated
March 24, 2000, Sec. Laguesma resolved all economic and non-economic issues submitted by the
parties.
 Dissatisfied with the ruling, the Union held a rally in front of the DOLE Office in Intramuros, Manila,
simultaneous with the filing of their MR. On April 3, 2000, an overwhelming majority of employees,
Union officers and members, joined the “mass leave” and “protest action” while the bank’s provincial
branches in Cebu, Iloilo, Bacolod and Naga followed suit and “boycotted regular work.” The union
members also picketed the bank’s Head Office in Binondo on April 6, 2000, and Paseo de Roxas
branch on April 7, 2000.
 The employees’ work abandonment/boycott lasted for 3 days (April 3 to 5). On the 3rd day, President
of Solidbank Vistan issued a memorandum declaring that the bank is prepared to take back employees
who will report for work starting April 6, 2000 “provided these employees were/are not part of those
who led or instigated or coerced their co-employees into participating in this illegal act.” Out of the
712 employees, 513 returned to work and were accepted by the bank. The remaining 199 employees
insisted on defying Vistan’s directive (which includes the 3 respondents in the 1st GR No. and the
129 individual respondents in the 2nd GR No.) They then filed separate complaints for illegal
dismissal, ULP and damages, which were then consolidated.
 Labor Arbiter: Dismissed the complaints of RESPONDENTS 1. But decided in favor of
RESPONDENTS 2.
 NLRC: Reversed both.
 CA: Decided that the dismissal of ALL respondents were illegal. REASON: the mass action was a
legitimate exercise of their right to free expression, and not a strike proscribed when the Secretary of
Labor assumed jurisdiction over the impassé between Solidbank and the Union in the collective
bargaining negotiations.

9
MAIN ISSUE: WON the protest rally and concerted work abandonment/boycott is equivalent to a strike.
(my own words) – YES.
RATIO:
 Art. 212 LC defines strike as any temporary stoppage of work by the concerted action of employees
as a result of an industrial or labor dispute. A labor dispute includes any controversy or matter
concerning terms and conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment,
regardless of whether or not the disputants stand in the proximate relation of employers and
employees. The term “strike” shall comprise not only concerted work stoppages, but also slowdowns,
mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities and
similar activities. The substance of the situation, and not its appearance, will be deemed to be
controlling.
 In the case at bar, considering that the mass actions stemmed from a bargaining deadlock and an order
of assumption of jurisdiction had already been issued by the Secretary of Labor to avert an impending
strike, there is no doubt that the concerted work abandonment/boycott was the result of a labor
dispute.
 Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission
 Union contends that the protests conducted are not within the ambit of strikes as defined in the
LC, since they were legitimate exercises of their right to peaceably assemble and petition the
government for redress of grievances relying on the doctrine laid down in the case of Philippine
Blooming Mills Employees Organization. However, the Union fails to realize one major difference
[in the factual antecedents]: there was no labor dispute in Philippine Blooming Mills. In the present
case, there was an on-going labor dispute arising from Toyota’s refusal to recognize and negotiate
with the Union, which was the subject of the notice of strike filed by the Union. Thus, the Union’s
reliance on Philippine Blooming Mills is misplaced. (applicable in here as well)
 Moreover, Sec. Laguesma in his 1st order already directed that the Union and its members should
refrain from committing “any and all acts that might exacerbate the situation which certainly includes
concerted actions. For all intents and purposes, therefore, the respondents staged a strike ultimately
aimed at realizing their economic demands.
 Note that a strike that is undertaken despite the issuance by the Secretary of Labor of an assumption
order and/or certification is a prohibited activity under Art. 264(a) of the LC and thus illegal.

Court’s Other Decision:

 Only the Union officers who participated in an illegal strike may be validly terminated from
employment. It is only when a worker commits illegal acts during a strike that he may be declared to
have lost employment status. (Art. 264(a) of LC) Hence, with respect to respondents who are union
officers, the validity of their termination by Solidbank cannot be questioned. But for the rest who are
union members, since there was no proof that he or she committed illegal acts during a strike, they
are entitled to reinstatement without backwages. But since reinstatement is no longer possible given
the lapse of considerable time from the occurrence of the strike, not to mention the fact that Solidbank
had long ceased its banking operations, the award of separation pay of 1 month salary for each year
of service, in lieu of reinstatement, is in order.

10
COMPLEX ELECTRONICS CORP vs. NLRC, COMPLEX ELECTRONICS EMPLOYEES
ASSOCIATION (CEEA), represented by Union President, TALAVERA

G.R. No. 122136 July 19, 1999

FACTS: Due to losses on production of the petitioner, it was constrained to cease operations. In the
evening of April 6, 1992, the machinery, equipment and materials being used for production at
Complex were pulled-out from the company premises and transferred to the premises of Ionics Circuit,
Inc. (Ionics) at Cabuyao, Laguna. The following day, a total closure of company operation was
effected at Complex.

A complaint was, thereafter, filed with the Labor Arbitration Branch of the NLRC for unfair labor
practice, illegal closure/illegal lockout, money claims for vacation leave, sick leave, unpaid wages,
13th month pay, damages and attorney’s fees. The Union alleged that the pull-out of the machinery,
equipment and materials from the company premises, which resulted to the sudden closure of the
company was in violation of Section 3 and 8, Rule XIII, Book V of the Labor Code of the
Philippines and the existing CBA. Ionics was impleaded as a party defendant because the officers and
management personnel of Complex were also holding office at Ionics with Lawrence Qua as the
President of both companies.

The Union anchors its position on the fact that Lawrence Qua is both the president of Complex and
Ionics and that both companies have the same set of Board of Directors. It claims that business has not
ceased at Complex but was merely transferred to Ionics, a runaway shop. To prove that Ionics was
just a runaway shop, petitioner asserts that out of the 80,000 shares comprising the increased capital
stock of Ionics, it was Complex that owns majority of said shares with P1,200,000.00 as its capital
subscription and P448,000.00 as its paid up investment, compared to P800,000.00 subscription
andP324,560.00 paid-up owing to the other stockholders, combined. Thus, according to the Union,
there is a clear ground to pierce the veil of corporate fiction.
ISSSUE: WON Ionics is merely a runaway shop

HELD: NO

A “runaway shop” is defined as an industrial plant moved by its owners from one location to another to
escape union labor regulations or state laws, but the term is also used to describe a plant removed to a
new location in order to discriminate against employees at the old plant because of their union
activities. It is one wherein the employer moves its business to another location or it temporarily closes
its business for anti-union purposes. A “runaway shop” in this sense, is a relocation motivated by anti-
union animus rather than for business reasons.

In this case, however, Ionics was not set up merely for the purpose of transferring the business of
Complex. At the time the labor dispute arose at Complex, Ionics was already existing as an
independent company. As earlier mentioned, it has been in existence since July 5, 1984 (8 years
prior to the dispute). It cannot, therefore, be said that the temporary closure in Complex and its

11
 subsequent transfer of business to Ionics was for anti-union purposes. The Union failed to show
that the primary reason for the closure of the establishment was due to the union activities of the
employees.

The mere fact that one or more corporations are owned or controlled by the same or single stockholder
is not a sufficient ground for disregarding separate corporate personalities. Mere ownership by a single
stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of
itself sufficient ground for disregarding the separate corporate personality.

At first glance after reading the decision a quo, it would seem that the closure of respondent’s operation
is not justified. However, a deeper examination of the records along with the evidence, would show
that the closure, although it was done abruptly as there was no compliance with the 30-day prior notice
requirement, said closure was not intended to circumvent the provisions of the Labor Code on
termination of employment. The closure of operation by Complex on April 7, 1992 was not without
valid reasons. Customers of respondent alarmed by the pending labor dispute and the imminent strike
to be foisted by the union, as shown by their strike vote, directed respondent Complex to pull-out its
equipment, machinery and materials to other safe bonded warehouse. Respondent being mere
consignees of the equipment, machinery and materials were without any recourse but to oblige the
customers’ directive. The pull-out was effected on April 6, 1992. We can see here that Complex’s
action, standing alone, will not result in illegal closure that would cause the illegal dismissal of the
complainant workers. Hence, the Labor Arbiter’s conclusion that since there were only 2 of
respondent’s customers who have expressed pull-out of business from respondent Complex while most
of the customer’s have not and, therefore, it is not justified to close operation cannot be upheld. The
determination to cease operation is a prerogative of management that is usually not interfered with by
the State as no employer can be required to continue operating at a loss simply to maintain the workers
in employment. That would be taking of property without due process of law which the employer has
the right to resist.

FACTS:
Complex Electronics Corporation was engaged in the manufacture of electronic products. It was
actually a subcontractor of electronic products where its customers gave their job orders, sent their own
materials and consigned their equipment to it.
The rank and file workers of Complex were organized into a union known as the Complex
Electronics Employees Association
Complex received a facsimile message from Lite-On Philippines Electronics Co., requiring it to
lower its price by 10%.
o Complex informed its Lite-On personnel that such request of lowering their selling price by 10% was
not feasible as they were already incurring losses at the present prices of their products.
o Complex regretfully informed the employees that it was left with no alternative but to close down the
operations of the Lite-On Line
retrenchment will not take place until after 1 month
try to prolong the work for as many people as possible for as long as it can
retrenchment pay as provided for by law i.e. half a month for every year of service in accordance with
Article 283 of the Labor Code of Philippines.

12
 Complex filed a notice of closure of the Lite-On Line with the Department of Labor and
Employment (DOLE) and the retrenchment of the ninety-seven (97) affected employees.
Union filed a notice of strike with the National Conciliation and Mediation Board
In the evening of April 6, 1992, the machinery, equipment and materials being used for production
at Complex were pulled-out from the company premises and transferred to the premises of Ionics
Circuit, Inc. (Ionics) at Cabuyao, Laguna.
o Fearful that the machinery, equipment and materials would be rendered inoperative and unproductive
due to the impending strike of the workers, the customers ordered their pull-out and transfer to Ionics.
o Complex was compelled to cease operations
o Ionics contended that it was an entity separate and distinct from Complex and had been in existence
since July 5, 1984 or eight (8) years before the labor dispute arose at Complex. Like Complex, it was
also engaged in the semi-conductor business where the machinery, equipment and materials were
consigned to them by their customers
o President of Complex was also the President of Ionics, the latter denied having Qua as their owner since
he had no recorded subscription of P1,200,00.00 in Ionics as claimed by the Union. Ionics further
argued that the hiring of some displaced workers of Complex was an exercise of management
prerogatives.
complaint was, thereafter, filed with the Labor Arbitration Branch of the NLRC for unfair labor
practice, illegal closure/illegal lockout, money claims for vacation leave, sick leave, unpaid wages,
13th month pay, damages and attorney's fees. The Union alleged that the pull-out of the machinery,
equipment and materials from the company premises, which resulted to the sudden closure of the
company was in violation of Section 3 and 8, Rule XIII, Book V of the Labor Code of the
Philippines and the existing CBA
Labor Arbiter: reinstate the 531 above-listed employees to their former position; charge of
slowdown strike filed by respondent Complex against the union is hereby dismissed for lack of merit.
NLRC: pay 531 complainants equivalent to one month pay in lieu of notice and separation pay
equivalent to one month pay for every year of service and a fraction of six months considered as one
whole year.

ISSUE: W/N there was ULP

HELD:
NO.
A "runaway shop" is defined as an industrial plant moved by its owners from one location to
another to escape union labor regulations or state laws, but the term is also used to describe a plant
removed to a new location in order to discriminate against employees at the old plant because of their
union activities.
o It is one wherein the employer moves its business to another location or it temporarily closes its
business for anti-union purposes
o relocation motivated by anti-union animus rather than for business reasons
o Ionics was not set up merely for the purpose of transferring the business of Complex. At the time the
labor dispute arose at Complex, Ionics was already existing as an independent company.
o The Union failed to show that the primary reason for the closure of the establishment was due to the
union activities of the employees.

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o The mere fact that one or more corporations are owned or controlled by the same or single stockholder
is not a sufficient ground for disregarding separate corporate personalities.
No illegal lockout/illegal dismissal
o closure, therefore, was not motivated by the union activities of the employees, but rather by necessity
since it can no longer engage in production without the much needed materials, equipment and
machinery.
o The determination to cease operation is a prerogative of management that is usually not interfered with
by the State as no employer can be required to continue operating at a loss simply to maintain the
workers in employment.
personal liability of Lawrence Qua- absence of malice or bad faith, a stockholder or an officer of a
corporation cannot be made personally liable for corporate liabilities.
We see no valid and cogent reason why petitioner should not be likewise sanctioned for its failure
to serve the mandatory written notice. Under the attendant facts, we find the amount of P5,000.00, to
be just and reasonable.

G.R. No. 121315 July 19, 1999

Lessons Applicable: Unfair Labor Practice
Laws Applicable:
FACTS:
Complex Electronics Corporation was engaged in the manufacture of electronic products. It was
actually a subcontractor of electronic products where its customers gave their job orders, sent their own
materials and consigned their equipment to it.
The rank and file workers of Complex were organized into a union known as the Complex
Electronics Employees Association
Complex received a facsimile message from Lite-On Philippines Electronics Co., requiring it to
lower its price by 10%.
o Complex informed its Lite-On personnel that such request of lowering their selling price by 10% was
not feasible as they were already incurring losses at the present prices of their products.
o Complex regretfully informed the employees that it was left with no alternative but to close down the
operations of the Lite-On Line
retrenchment will not take place until after 1 month
try to prolong the work for as many people as possible for as long as it can
retrenchment pay as provided for by law i.e. half a month for every year of service in accordance with
Article 283 of the Labor Code of Philippines.
Complex filed a notice of closure of the Lite-On Line with the Department of Labor and
Employment (DOLE) and the retrenchment of the ninety-seven (97) affected employees.
Union filed a notice of strike with the National Conciliation and Mediation Board
In the evening of April 6, 1992, the machinery, equipment and materials being used for production
at Complex were pulled-out from the company premises and transferred to the premises of Ionics
Circuit, Inc. (Ionics) at Cabuyao, Laguna.
o Fearful that the machinery, equipment and materials would be rendered inoperative and unproductive
due to the impending strike of the workers, the customers ordered their pull-out and transfer to Ionics.
o Complex was compelled to cease operations

14
o Ionics contended that it was an entity separate and distinct from Complex and had been in existence
since July 5, 1984 or eight (8) years before the labor dispute arose at Complex. Like Complex, it was
also engaged in the semi-conductor business where the machinery, equipment and materials were
consigned to them by their customers
o President of Complex was also the President of Ionics, the latter denied having Qua as their owner since
he had no recorded subscription of P1,200,00.00 in Ionics as claimed by the Union. Ionics further
argued that the hiring of some displaced workers of Complex was an exercise of management
prerogatives.
complaint was, thereafter, filed with the Labor Arbitration Branch of the NLRC for unfair labor
practice, illegal closure/illegal lockout, money claims for vacation leave, sick leave, unpaid wages,
13th month pay, damages and attorney's fees. The Union alleged that the pull-out of the machinery,
equipment and materials from the company premises, which resulted to the sudden closure of the
company was in violation of Section 3 and 8, Rule XIII, Book V of the Labor Code of the
Philippines and the existing CBA
Labor Arbiter: reinstate the 531 above-listed employees to their former position; charge of
slowdown strike filed by respondent Complex against the union is hereby dismissed for lack of merit.
NLRC: pay 531 complainants equivalent to one month pay in lieu of notice and separation pay
equivalent to one month pay for every year of service and a fraction of six months considered as one
whole year.

ISSUE: W/N there was ULP

HELD:
NO.
A "runaway shop" is defined as an industrial plant moved by its owners from one location to another to
escape union labor regulations or state laws, but the term is also used to describe a plant removed to a new
location in order to discriminate against employees at the old plant because of their union activities.
o It is one wherein the employer moves its business to another location or it temporarily closes its business for
anti-union purposes
o relocation motivated by anti-union animus rather than for business reasons
o Ionics was not set up merely for the purpose of transferring the business of Complex. At the time the labor
dispute arose at Complex, Ionics was already existing as an independent company.
o The Union failed to show that the primary reason for the closure of the establishment was due to the union
activities of the employees.
o The mere fact that one or more corporations are owned or controlled by the same or single stockholder is not a
sufficient ground for disregarding separate corporate personalities.
No illegal lockout/illegal dismissal
o closure, therefore, was not motivated by the union activities of the employees, but rather by necessity since it
can no longer engage in production without the much needed materials, equipment and machinery.
o The determination to cease operation is a prerogative of management that is usually not interfered with by the
State as no employer can be required to continue operating at a loss simply to maintain the workers in
employment.
personal liability of Lawrence Qua- absence of malice or bad faith, a stockholder or an officer of a
corporation cannot be made personally liable for corporate liabilities.
We see no valid and cogent reason why petitioner should not be likewise sanctioned for its failure to serve
the mandatory written notice. Under the attendant facts, we find the amount of P5,000.00, to be just and
reasonable.

15
EMPLOYEES UNION OF BAYER VS BAYER G.R. No. 162943

Topic: Enforcement and remedies – Intra-union disputes; jurisdiction; procedure and sanctions:

QUICKIE FACTS: Employees Union is the Collective bargaining agent of Bayer headed by Facundo However,
there was a breakaway group named Reformed Employees’ Union headed by Remigio. The union dues
collected by Bayer was then remitted to the Reformed Union despite the existence of a CBA between the
company and the Union. The Union then filed an unfair labor practice complaint against Bayer and Remigio.
Bayer was found guilty of unfair labor practice. The case against Remigio was dismissed because the rift
between Facundo’s group and Remigio’s group is an intra-union dispute.

FACTS:

1. Petitioner Employees Union of Bayer Philippines (Union) is the exclusive bargaining agent of all rank-and-
file employees of Bayer Philippines, and is an affiliate of the Federation of Free Workers (FFW).

2. In 1997, the Union, headed by its president Juanito S. Facundo, negotiated with Bayer for the signing of a
CBA. During the negotiations, the Union rejected Bayer’s 9.9% wage-increase proposal resulting in a
bargaining deadlock. Subsequently, the Union staged a strike, prompting the Secretary of DOLE to assume
jurisdiction over the dispute.

3. Pending the resolution of the dispute, respondent Avelina Remigio and 27 other union members, without any
authority from their union leaders, accepted Bayers wage-increase proposal. The DOLE Secretary issued an
arbitral award ordering EUBP and Bayer to execute a CBA.

4. Meanwhile, the rift between Facundo’s leadership and Remigio’s group broadened. Six months from the
signing of the new CBA, Remigio solicited signatures from union members in support of a resolution
containing the decision of the signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed
Employees Union of Bayer Philippines (Reformed Union), (3) adopt a new constitution and by-laws for the
union, (4) abolish all existing officer positions in the union and elect a new set of interim officers, and (5)
authorize Reformed Union to administer the CBA between the Union and Bayer. The said resolution was signed
by 147 of the 257 local union members.

5. Both groups sought recognition from Bayer and demanded remittance of the union dues collected from its
rank-and-file members. Bayer responded by deciding not to deal with either of the two groups, and by placing
the union dues collected in a trust account until the conflict between the two groups is resolved.

16
6. The Union filed a complaint for unfair labor practice (first unfair labor practice case) against Bayer for non-
remittance of union dues. While the case was still pending and despite the Union’s repeated request for a
grievance conference, Bayer decided to turn over the collected union dues to Reformed Union.

7. Consequently, the Union lodged a complaint against Remigio’s group before the Industrial Relations
Division of the DOLE praying for their expulsion from the Union for commission of "acts that threaten the life
of the union."

8. Labor Arbiter dismissed this complaint for lack of jurisdiction.

9. Petitioners filed the second unfair labor practice complaint against herein respondents. Petitioners
complained that Bayer refused to remit the collected union dues to EUBP despite several demands sent to the
management and that the latter opted to negotiate instead with Remigio’s group.

10. Reformed Union and Bayer agreed to sign a new CBA. In response, petitioners immediately filed an urgent
motion for the issuance of a restraining order/injunction before the NLRC and the Labor Arbiter against
respondents.

11. Labor Arbiter: dismissed the Union’s second unfair labor practice complaint for lack of jurisdiction.

12. NLRC: denied the Union’s appeal

13. CA: sustained both the Labor Arbiter and the NLRCs rulings.

ISSUES:

W/N LA and NLRC have jurisdiction

W/N the instant case involves an intra-union dispute

W/N the company committed an act of unfair labor practice

RULINGS:

17
LA and NLRC have jurisdiction over the unfair labor practice complaint filed against Bayer.
However,petitioner’s unfair labor practice complaint cannot prosper as against respondents Remigio et
al because the issue, as against them, essentially involves an intra-union dispute

No, the case at bar is not about an intra-union dispute. The issues raised by petitioners do not fall under any of
the circumstances constituting an intra-union dispute. More importantly, the petitioners do not seek a
determination of whether it is the Facundo group (Union) or the Remigio group (Reformed Union) which is the
true set of union officers. Instead, the issue raised pertained only to the validity of the acts of management.

Yes, the acts of the company constituted an unfair labor practice. When an employer proceeds to negotiate with
a splinter union despite the existence of its valid CBA with the duly certified and exclusive bargaining agent,
the former indubitably abandons its recognition of the latter and terminates the entire CBA.

DISPOSITIVE: Bayer is liable for unfair labor practice and they are ordered to remit to petitioners the collected
union dues previously turned over to Remegio. The unfair labor practice complaint against Remegio is
dismissed for lack of jurisdiction of LA and NLRC.

DOCTRINE: An intra-union dispute refers to any conflict between and among union members, including
grievances arising from any violation of the rights and conditions of membership, violation of or disagreement
over any provision of the union’s constitution and by-laws, or disputes arising from chartering or disaffiliation
of the union.

It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between
labor and capital. An employer should not be allowed to rescind unilaterally its CBA with the duly certified
bargaining agent it had previously contracted with, and decide to bargain anew with a different group if there is
no legitimate reason for doing so and without first following the proper procedure. If such behavior would be
tolerated, bargaining and negotiations between the employer and the union will never be truthful and
meaningful, and no CBA forged after arduous negotiations will ever be honored or be relied upon.

18
SMCEU-PTGWO v. Bersamira

Facts:

SanMig entered into contracts for merchandising services with Lipercon and D'Rite, independent
contractors duly licensed by DOLE, to maintain its competitive position and in keeping with the
imperatives of efficiency, business expansion and diversity of its operation. In said contracts, it
was expressly understood and agreed that the workers employed by the contractors were to be
paid by the latter and that none of them were to be deemed employees or agents of SanMig. There
was to be no employer-employee relation between the contractors and/or its workers, on the one
hand, and SanMig on the other.

Petitioner San Miguel Corporation Employees Union-PTWGO is the duly authorized

representative of the monthly paid rank-and-file employees of SanMig with whom the latter
executed a CBA which provides that "temporary, probationary, or contract employees and
workers are excluded from the bargaining unit and, therefore, outside the scope of this
Agreement."

The Union advised SanMig that some Lipercon and D'Rite workers had signed up for union
membership and sought the regularization of their employment with SMC because some
employees have been continuously working for SanMig for a period ranging from 6 months to
15 years and that their work is neither casual nor seasonal as they are performing work or activities
necessary or desirable in the usual business or trade of SanMig. Thus, it was contended that there
exists a "labor-only" contracting situation and wanted to be regularized.

The Union filed a notices of strike for unfair labor practice, CBA violations, and union busting.
The two (2) notices of strike were consolidated and several conciliation conferences were held to
settle the dispute before the National Conciliation and Mediation Board (NCMB) of DOLE.

Series of pickets were staged by Lipercon and D'Rite workers in various SMC plants and offices.

SMC filed a verified Complaint for Injunction and Damages before respondent Court to enjoin
the Union from their acts. The Court issued a Temporary Restraining Order and set the application
19
for Injunction for hearing. The Union filed a Motion to Dismiss which was then opposed by
SanMig. The Motion was denied by the respondent Judge. The Court then issued the Order
granting the application and enjoining the union from the acts thereof. Court issued the
corresponding Writ of Preliminary Injunction after SanMig had posted the required bond of
P100,000.00 to answer for whatever damages petitioners may sustain by reason thereof.
Petitioners then sought for the nullification of the Writ before the SC while it also went to strike
as some of the contractual workers were laid off. NCMB called the parties for conciliation.

Issue:

Did the respondent Court correctly assumed jurisdiction over the present controversy and
properly issued the Writ of Preliminary Injunction to the resolution of that question, is the matter
of whether, or not the case at bar involves, or is in connection with, or relates to a labor dispute.

Held:

While it is SanMig's submission that no employer-employee relationship exists between itself, on

the one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor dispute
can

nevertheless exist "regardless of whether the disputants stand in the proximate relationship of
employer and employee” provided the controversy concerns, among others, the terms and
conditions of employment or a "change" or "arrangement" thereof. The existence of a labor
dispute is not negative by the fact that the plaintiffs and defendants do not stand in the proximate
relation of employer and employee.

20