Life Assurance Employees Asso. vs. Insular Life, G. R. No.
L- with his employees individually in connection with changes in the
2529, January 30, 1971
FACTS
Previous to the petitioners' submission of proposals for an amended renewal of their
respective collective bargaining agreements to the respondents, the latter hired Felipe
Enage and Ramon Garcia, former legal counsels of the petitioners (UNIONS), as
personnel manager and assistant corporate secretary, respectively, with attractive
compensations. After the notice to strike was served on the Companies and
negotiations were in progress in the Department of Labor, the respondents reclassified
87 employees as supervisors without increase in salary or in responsibility, in effect
compelling these employees to resign from their unions. And during the negotiations in
the Department of Labor, despite the fact that the petitioners granted the respondents'
demand that the former drop their demand for union shop and in spite of urgings by
the conciliators of the Department of Labor, the respondents adamantly refused to
answer the Unions' demands en toto. Incidentally, Enage was the chairman of the
negotiating panel for the Companies in the collective bargaining between the former
and the Unions. After the petitioners went to strike, the strikers were individually sent
copies of exhibit A, enticing them to abandon their strike by inducing them to return to
work upon promise of special privileges. Two days later, the respondents, thru their
president and manager, respondent Jose M. Olbes, brought three truckloads of non-
strikers and others, escorted by armed men, who, despite the presence of eight
entrances to the three buildings occupied by the Companies, entered thru only one
gate less than two meters wide and in the process, crashed thru the picket line posted
in front of the premises of the Insular Life Building. This resulted in injuries on the part
of the picketers and the strike-breakers.lâwphî1.ñèt Then the respondents brought
against the picketers criminal charges, only three of which were not dismissed, and
these three only for slight misdemeanors. As a result of these criminal actions, the
respondents were able to obtain an injunction from the court of first instance
restraining the strikers from stopping, impeding, obstructing, etc. the free and peaceful
use of the Companies' gates, entrance and driveway and the free movement of
persons and vehicles to and from, out and in, of the Companies' buildings. On the
same day that the injunction was issued, the letter, Exhibit B, was sent — again
individually and by registered special delivery mail — to the strikers, threatening them
with dismissal if they did not report for work on or before June 2, 1958. But when most
of the petitioners reported for work, the respondents thru a screening committee — of
which Ramon Garcia was a member — refused to admit 63 members of the Unions on
the ground of "pending criminal charges." However, when almost all were cleared of
criminal charges by the fiscal's office, the respondents adamantly refused admission to
34 officials and union members. It is not, however, disputed that all-non-strikers with
pending criminal charges which arose from the breakthrough incident of May 23, 1958
were readmitted immediately by the respondents. Among the non-strikers with pending
criminal charges who were readmitted were Generoso Abella, Enrique Guidote, Emilio
Carreon, Antonio Castillo, Federico Barretto, Manuel Chuidian and Nestor Cipriano.
And despite the fact that the fiscal's office found no probable cause against the
petitioning strikers, the Companies adamantly refused admission to them on the
pretext that they committed "acts inimical to the interest of the respondents," without
stating specifically the inimical acts allegedly committed. They were soon to admit,
however, that these alleged inimical acts were the same criminal charges which were
dismissed by the fiscal and by the courts..
ISSUE
1. WON there is interference.
2. WON there is discrimination.
HELD
The respondents contend that the sending of the letters, exhibits A and B,
constituted a legitimate exercise of their freedom of speech. No! The free
speech protection under the Constitution is inapplicable where the
expression of opinion by the employer or his agent contains a promise of
benefit, or threats, or reprisal
1. YES. The said letters were directed to the striking employees
individually — by registered special delivery mail at that — without being
coursed through the Unions which were representing the employees in the
collective bargaining.
Indeed, it is an unfair labor practice for an employer operating under a
collective bargaining agreement to negotiate or to attempt to negotiate
agreement. And the basis of the prohibition regarding individual
bargaining with the strikers is that although the union is on strike, the
employer is still under obligation to bargain with the union as the
employees' bargaining representative
It is likewise an act of interference for the employer to send a letter to all
employees notifying them to return to work at a time specified therein,
otherwise new employees would be engaged to perform their jobs.
Individual solicitation of the employees or visiting their homes, with the
employer or his representative urging the employees to cease union
activity or cease striking, constitutes unfair labor practice. All the above-
detailed activities are unfair labor practices because they tend to
undermine the concerted activity of the employees, an activity to which
they are entitled free from the employer's molestation.
The test of whether an employer has interfered with and
coerced employees within the meaning of subsection
(a)(1) is whether the employer has engaged in conduct which
it may reasonably be said tends to interfere with the free
exercise of employees' rights under section 3 of the Act, and
it is not necessary that there be direct evidence that any
employee was in fact intimidated or coerced by statements of
threats of the employer if there is a reasonable inference that
anti-union conduct of the employer does have an adverse
effect on self-organization and collective bargaining
2. YES. Discrimination undoubtedly exists where the record shows that the union
activity of the rehired strikers has been less prominent than that of the strikers who
were denied reinstatement. Needless to say, the mere act of placing in the hands of
employees hostile to the strikers the power of reinstatement, is a form of discrimination
in rehiring. Exhibit H imposed three conditions for readmission of the strikers, namely:
(1) the employee must be interested in continuing his work with the group companies;
(2) there must be no criminal charges against him; and (3) he must report for work on
June 2, 1958, otherwise he would be replaced
Standard Chartered Bank Employees Union vs. Confesor, G.
R. No. 114974, June 16, 2004
FACTS
The petitioner asserts that the private respondent committed ULP, i.e.,
interference in the selection of the Unions negotiating panel, when Cielito Diokno, the
Banks Human Resource Manager, suggested to the Unions President Eddie L.
Divinagracia that Jose P. Umali, Jr., President of the NUBE, be excluded from
the Unions negotiating panel. In support of its claim, Divinagracia executed an
affidavit, stating that prior to the commencement of the negotiation, Diokno
approached him and suggested the exclusion of Umali from the Unions negotiating
panel, and that during the first meeting, Diokno stated that the negotiation be kept a
family affair.
ISSUE
1. whether or not the Union was able to substantiate its claim of unfair
labor practice against the Bank arising from the latters alleged interference with its
choice of negotiator;
2. whether or not the Union was able to substantiate its claim of unfair labor practice
against the Bank arising from the latters surface bargaining
HELD.
1. No. Article 248(a) of the Labor Code, considers it an unfair labor practice when an
employer interferes, restrains or coerces employees in the exercise of their right to
self-organization or the right to form association. The right to self-organization
necessarily includes the right to collective bargaining.
Parenthetically, if an employer interferes in the selection of its negotiators or
coerces the Union to exclude from its panel of negotiators a representative of the
Union, and if it can be inferred that the employer adopted the said act to yield adverse
effects on the free exercise to right to self-organization or on the right to
collective bargaining of the employees, ULP under Article 248(a) in connection with
Article 243 of the Labor Code is committed.
In order to show that the employer committed ULP under the Labor Code,
substantial evidence is required to support the claim. Substantial evidence
has been defined as such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.[48] In the case at bar, the Union
bases its claim of interference on the alleged suggestions of Diokno to
exclude Umali from the Unions negotiating panel.
The circumstances that occurred during the negotiation do not show that the
suggestion made by Diokno to Divinagracia is an anti-union conduct from which it can
be inferred that the Bank consciously adopted such act to yield adverse effects on the
free exercise of the right to self-organization and collective bargaining of the
employees, especially considering that such was undertaken previous to the
commencement of the negotiation and simultaneously with Divinagracias suggestion
that the bank lawyers be excluded from its negotiating panel.
The records show that after the initiation of the collective bargaining process,
with the inclusion of Umali in the Unions negotiating panel, the negotiations pushed
through. The complaint was made only on August 16, 1993 after a deadlock was
declared by the Union on June 15, 1993.
It is clear that such ULP charge was merely an afterthought. The accusation
occurred after the arguments and differences over the economic provisions became
heated and the parties had become frustrated. It happened after the parties started to
involve personalities. As the public respondent noted, passions may rise, and as a
result, suggestions given under less adversarial situations may be colored with
unintended meanings.[49] Such is what appears to have happened in this case.
If at all, the suggestion made by Diokno to Divinagracia should be construed as
part of the normal relations and innocent communications, which are all part of the
friendly relations between the Union and Bank.
2. The Union alleges that the Bank violated its duty to bargain; hence,
committed ULP under Article 248(g) when it engaged in surface bargaining. It alleged
that the Bank just went through the motions of bargaining without any intent of
reaching an agreement, as evident in the Banks counter-proposals. It explained that of
the 34 economic provisions it made, the Bank only made 6 economic
counterproposals. Further, as borne by the minutes of the meetings, the Bank, after
indicating the economic provisions it had rejected, accepted, retained or were open for
discussion, refused to make a list of items it agreed to include in the economic
package.
Surface bargaining is defined as going through the motions of negotiating
without any legal intent to reach an agreement.[50]The resolution of surface bargaining
allegations never presents an easy issue. The determination of whether a party has
engaged in unlawful surface bargaining is usually a difficult one because it involves, at
bottom, a question of the intent of the party in question, and usually such intent can
only be inferred from the totality of the challenged partys conduct both at and away
from the bargaining table.[51] It involves the question of whether an employers conduct
demonstrates an unwillingness to bargain in good faith or is merely hard bargaining
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.[53] Hence, the
parties failure to agree did not amount to ULP under Article 248(g) for violation of the
duty to bargain.
Cathay Pacific Steel vs. CA, G. R. No. 164561, August
30, 2006
Petitioner CAPASCO, hired private respondent Tamondong as Assistant to the
Personnel Manager, he was promoted to the position of Personnel/Administrative
Officer, and later to that of Personnel Superintendent. Private respondent Tamondong
actively involved himself in the formation of the union and was even elected as one of
its officers after its creation. Consequently, petitioner CAPASCO sent a memo 8 dated
3 February 1997, to private respondent Tamondong requiring him to explain and to
discontinue from his union activities, with a warning that a continuance thereof shall
adversely affect his employment in the company. Private respondent Tamondong
ignored said warning and made a reply letter 9 on 5 February 1997, invoking his right
as a supervisory employee to join and organize a labor union. In view of that, on 6
February 1997, petitioner CAPASCO through a memo 10terminated the employment of
private respondent Tamondong on the ground of loss of trust and confidence, citing his
union activities as acts constituting serious disloyalty to the company.
Private respondent Tamondong challenged his dismissal for being illegal and
as an act involving unfair labor practice by filing a Complaint for Illegal Dismissal and
Unfair Labor Practice before the NLRC
In the Memorandum 15 filed by petitioners, they aver that private respondent
Tamondong as Personnel Superintendent of CAPASCO was performing functions of a
managerial employee because he was the one laying down major management
policies on personnel relations such as: issuing memos on company rules and
regulations, imposing disciplinary sanctions such as warnings and suspensions, and
executing the same with full power and discretion.
ISSUE
WON dismissal is proper
HELD
NO. Accordingly, Article 212(m) of the Labor Code, as amended, differentiates
supervisory employees from managerial employees, to wit: supervisory employees are
those who, in the interest of the employer, effectively recommend such managerial
actions, if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment; whereas, managerial employees are those
who are vested with powers or prerogatives to lay down and execute management
policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline
employees. Thus, from the foregoing provision of the Labor Code, it can be clearly
inferred that private respondent Tamondong was just a supervisory employee. Private
respondent Tamondong did not perform any of the functions of a managerial employee
as stated in the definition given to it by the Code. Hence, the Labor Code 33 provisions
regarding disqualification of a managerial employee from joining, assisting or forming
any labor organization does not apply to herein private respondent Tamondong. Being
a supervisory employee of CAPASCO, he cannot be prohibited from joining or
participating in the union activities of private respondent CUSE
Catholic School vs. Cainta Catholic School Employees
Union, G.R. No. 15102, May 2, 2006
Balbago)was appointed School Director in April 1987. From this time, the Union
became inactive.
It was only in 10 September 1993 that the Union held an election of officers, with
Llagas being elected as President; Javier, Villegas, Treasurer; and Santos, Secretary.
Llagas was then the Dean of the Student Affairs while Villegas and Santos were Year-
Level Chairmen.
On 15 October 1993, the School retired Llagas and Javier, who had rendered more
than twenty (20) years of continuous service, pursuant to Section 2, Article X of the
CBA, to wit:
An employee may be retired, either upon application by the employee himself or by the
decision of the Director of the School, upon reaching the age of sixty (60) or after
having rendered at least twenty (20) years of service to the School the last three (3)
years of which must be continuous.7
Three (3) days later, the Union filed a notice of strike with the National Conciliation and
Mediation Board (NCMB) .
On 8 November 1993, the Union struck and picketed the School’s entrances.
The NLRC ruled that the retirement of Llagas and Javier is legal as the School was
merely exercising an option given to it under the CBA.10 The NLRC dismissed the
unfair labor practice charge against the School for insufficiency of evidence.
In reversing the decision of the NLRC, the Court of Appeals construed the retirement
of Llagas and Javier as an act amounting to unfair labor practice when viewed against
the backdrop of the relevant circumstances obtaining in the case. Hence, this petition.
The main issue for resolution hinges on the validity of a stipulation in a
Collective Bargaining Agreement (CBA) that allows management to retire an employee
in its employ for a predetermined lengthy period but who has not yet reached the
minimum compulsory retirement age provided in the Labor Code.
ISSUE
whether the School’s decision to retire Llagas and Javier constitutes unfair
labor practice;
HELD. No.
Article 287 of the Labor Code, a CBA may validly accord management the prerogative
to optionally retire an employee under the terms and conditions mutually agreed upon
by management and the bargaining union, even if such agreement allows for
retirement at an age lower than the optional retirement age or the compulsory
retirement age.
The law and this Court frowns upon unfair labor practices by management, including
so-called union-busting. Such illegal practices will not be sustained by the Court, even
if guised under ostensibly legal premises. But with respect to an active unionized
employee who claims having lost his/her job for union activities, there are different
considerations presented if the termination is justified under just or authorized cause
under the Labor Code; and if separation from service is effected through the exercise
of a duly accorded management prerogative to retire an employee. There is perhaps a
greater imperative to recognize the management prerogative on retirement than the
prerogative to dismiss employees for just or authorized causes. Evidently, it more
clearly emerges in the case of retirement that management would anyway have the
right to retire an employee, no matter the degree of involvement of said employee in
union activities.
Having established that Llagas is a managerial employee, she is proscribed from
joining a labor union,38 more so being elected as union officer. In the case of Javier, a
supervisory employee, she may join a labor union composed only of supervisory
employees.39 Finding both union officers to be employees not belonging to the rank-
and-file, their membership in the Union has become questionable, rendering the Union
inutile to represent their cause.
Purefoods vs. Nagkakaisang Samahang Manggagawa ng
Purefoods, G.R. No. 150896, August 28, 2008
FACTS
Three labor organizations and a federation are respondents in this case
NAGSAMA-Purefoods, the exclusive bargaining agent of the rank-and-file workers of
Purefoods, STFWU, (Sto. Tomas, Batangas); and PGFWU (Sta. Rosa, Laguna).
These organizations were affiliates of the respondent federation, Purefoods Unified
Labor Organization (PULO). The three labor organizations manifested their desire to
re-negotiate the collective bargaining agreement, submitting their respective demands
and proposals and authorizing a negotiating panel which included among others a
PULO representative. While Purefoods formally acknowledged receipt of the union’s
proposals, but refused to negotiate with the unions should a PULO representative be
in the panel which resulted in a deadlock. However, the petitioner company concluded
a new CBA with another union in its farm in Malvar, Batangas and terminated the
service of regular rank-and file workers in Sto Tomas. The farm manager, supervisors
and electrical workers of the Sto. Tomas farm, who were members of another union,
were nevertheless retained by the company in its employ. The 4 respondent labor
organizations jointly instated a complaint for Unfair Labor Practice, illegal
lockout/dismissal and damages.
In the proceedings before the Labor Arbiter (LA), Purefoods interposed,
among others, the defenses that PULO was not a legitimate labor organization or
federation for it did not have the required minimum number of member unions; that the
closure of the Sto. Tomas farm was not arbitrary but was the result of the financial
non-viability of the operations therein, or the consequence of the landowners pre-
termination of the lease agreement; that the other complainants had no cause of
action considering that it was only the Sto. Tomas farm which was closed; that the
termination of the employees complied with the 30-day notice requirement and that the
said employees were paid 30-day advance salary in addition to separation pay; and
that the concerned union, STFWU, lost its status as bargaining representative when
the Sto. Tomas farm was closed.[6]
NLRC ruled that the petitioner companys refusal to recognize the labor
organizations affiliation with PULO was unjustified considering that the
latter had been granted the status of a federation by the Bureau of Labor
Relations; and that this refusal constituted undue interference in, and
restraint on the exercise of the employees right to self-organization and
free collective bargaining. The NLRC said that the real motive of the
company in the sudden closure of the Sto. Tomas farm and the mass
dismissal of the STFWU members was union busting, as only the union
members were locked out, and the company subsequently resumed
operations of the closed farm under a new contract with the landowner.
Because the requisites of a valid lockout were absent, the NLRC
concluded that the company committed ULP.
Issue: WON the refusal of Purefoods to recognized PULO as a labor organizations’
affiliation constituted undue interference in, and restraint on the exercise of the
employees’ right to self-organization and free collective bargaining
HELD
It is crystal clear that the closure of the Sto. Tomas farm was made in bad
faith. Badges of bad faith are evident from the following acts of the
petitioner: it unjustifiably refused to recognize the STFWUs and the other
unions affiliation with PULO; it concluded a new CBA with another union in
another farm during the agreed indefinite suspension of the collective
bargaining negotiations; it surreptitiously transferred and continued its
business in a less hostile environment; and it suddenly terminated the
STFWU members, but retained and brought the non-members to the
Malvar farm. Petitioner presented no evidence to support the contention
that it was incurring losses or that the subject farms lease agreement was
pre-terminated. Ineluctably, the closure of the Sto. Tomas farm
circumvented the labor organizations right to collective bargaining and
violated the members right to security of tenure.[19]
Shell Oil Workers Union vs. Shell Oil Company, G.R. No. L-
28607, May 31, 1971
FACTS: Respondent Shell Company of the Philippines (COMPANY) dissolved its
security guard section stationed at its Pandacan Installation, notwithstanding its (guard
section) continuance and that such is assured by an existing collective bargaining
contract. The respondent company transferred 18 security guards to its other
department and consequently hired a private security agency to undertake the work of
said security guards. This resulted in a strike called by petitioner Shell Oil Workers’
Union (UNION), The President certified it to respondent Court of Industrial Relations
(CIR). CIR declared the strike illegal on the ground that such dissolution was a valid
exercise of a management prerogative. Thus this appeal is taken.
Petitioner argued that the 18 security guards affected are part of the bargaining unit
and covered by the existing collective bargaining contract, as such, their transfers and
eventual dismissals are illegal being done in violation of the existing contract. The
Company maintained that in contracting out the security service and redeploying the
18 security guards affected, it was merely performing its legitimate prerogative to
adopt the most efficient and economical method of operation, that said action was
motivated by business consideration in line with past established practice and made
after notice to and discussion with the Union, that the 18 guards concerned were
dismissed for wilfully refusing to obey the transfer order, and that the strike staged by
the Union is illegal.
ISSUE: Whether the existing collective bargaining contract on maintaining security
guard section, among others, constitute a bar to the decision of the management to
contract out security guards.
HELD
YES. The strike was legal because there was a violation of the collective bargaining
agreement by Company. It was part of the CBA that the Security Guard Section will
remain. Yet, the Company did not comply with the stipulation in CBA. It was thus an
assurance of security of tenure, at least, during the lifetime of the agreement. For what
is involved is the integrity of the agreement reached, the terms of which should be
binding on both parties
The stand of Shell Company as to the scope of management prerogative is not devoid
of plausibility, management prerogative of the Company would have been valid if it
were not bound by what was stipulated in CBA. The freedom to manage the business HELD:yes
remains with management. It cannot be denied the faculty of promoting efficiency and
attaining economy by a study of what units are essential for its operation. To it belongs
The Union, however, insists that jobs being outsourced to BOMC were included in the
the ultimate determination of whether services should be performed by its personnel or
existing bargaining unit, thus, resulting in a reduction of a number of positions in such
contracted to outside agencies. However, while management has the final say on such
unit. The reduction interfered with the employees’ right to self-organization because
matter, the labor union is not to be completely left out.
the power of a union primarily depends on its strength in number.28
An unfair labor practice is committed by a labor union or its agent by its refusal ‘to
It is incomprehensible how the “reduction of positions in the collective bargaining unit”
bargain collectively with the employer’. Collective bargaining does not end with the
interferes with the employees’ right to self-organization because the employees
execution of an agreement, being a continuous process, the duty to bargain
themselves were neither transferred nor dismissed from the service. As the NLRC
necessarily imposing on the parties the obligation to live up to the terms of such a
clearly stated:cralavvonlinelawlibrary
collective bargaining agreement if entered into, it is undeniable that non-compliance
therewith constitutes an unfair labor practice.
In the case at hand, the union has not presented even an iota of evidence that
BPI Employees Union-Davao City-FUBU vs. BPI, G.R. No. petitioner bank has started to terminate certain employees, members of the union. In
fact, what appears is that the Bank has exerted utmost diligence, care and effort to see
174912, July 24, 2013 to it that no union member has been terminated. In the process of the consolidation or
merger of the two banks which resulted in increased diversification of functions, some
BOMC, primarily engaged in providing and/or handling support services for banks and of these non-banking functions were merely transferred to the BOMC without affecting
other financial institutions, is a subsidiary of the Bank of Philippine the union membership.29
Islands (BPI) operating and functioning as an entirely separate and distinct entity.

A service agreement between BPI and BOMC was initially implemented in BPI’s Metro
Manila branches. In this agreement, BOMC undertook to provide services such as
check clearing, delivery of bank statements, fund transfers, card production,
operations accounting and control, and cash servicing, Not a single BPI employee
was displaced and those performing the functions, which were transferred to BOMC,
were given other assignments.
The Manila chapter of BPI Employees Union (BPIEU-Metro Manila-FUBU) then filed a
complaint for unfair labor practice (ULP). (LA) decided the case in favor of the union.
The decision was, however, reversed on appeal by the NLRC. BPIEU-Metro Manila-
FUBU filed a petition forcertiorari before the CA which denied it, holding that BPI
transferred the employees in the affected departments in the pursuit of its legitimate
business. The employees were neither demoted nor were their salaries, benefits and
other privileges diminished.6
the service agreement was likewise implemented in Davao City. Later, a merger
between BPI and Far East Bank and Trust Company (FEBTC) took effect on April 10,
2000 with BPI as the surviving corporation. Thereafter, BPIs cashiering function and
FEBTCs cashiering, distribution and bookkeeping functions were handled by BOMC.
Consequently, twelve (12) former FEBTC employees were transferred to BOMC to
complete the latters service complement.
BPI Davaos rank and file collective bargaining agent, BPI Employees Union-Davao
City-FUBU (Union), objected to the transfer of the functions and the twelve (12)
personnel to BOMC contending that the functions rightfully belonged to the BPI
employees and that the Union was deprived of membership of former FEBTC
personnel who, by virtue of the merger, would have formed part of the bargaining unit
represented by the Union pursuant to its union shop provision in the CBA.
BPI stresses that not a single employee or union member was or would be dislocated
or terminated from their employment as a result of the Service Agreement.30 Neither
had it resulted in any diminution of salaries and benefits nor led to any reduction of
union membership.31
As far as the twelve (12) former FEBTC employees are concerned, the Union failed to
substantially prove that their transfer, made to complete BOMC’s service complement,
was motivated by ill will, anti-unionism or bad faith so as to affect or interfere with the
employees’ right to self-organization.
It is to be emphasized that contracting out of services is not illegal per se. It is an
exercise of business judgment or management prerogative. Absent proof that the
management acted in a malicious or arbitrary manner, the Court will not interfere with
the exercise of judgment by an employer.32 In this case, bad faith cannot be attributed
to BPI because its actions were authorized by CBP Circular No. 1388, Series of
199333 issued by the Monetary Board of the then Central Bank of the Philippines
(now Bangko Sentral ng Pilipinas). The circular covered amendments in Book I of the
Manual of Regulations for Banks and Other Financial Intermediaries, particularly on
the matter of bank service contracts. A finding of ULP necessarily requires the
alleging party to prove it with substantial evidence. Unfortunately, the Union failed to
discharge this burden.
Philippine American Cigar and Cigarette Factory Workers vs.
Philippine American Cigar, G.R. No.L-18364, February 28,
1963

Union filed a notice of strike before the National Conciliation and Mediation FACTS: October 23, 1958, Apolonio San Jose’s brother, Francisco San Jose, who is
Board (NCMB) on the following grounds: also a regular worker of the respondent and a member of the complainant union, filed
a) Contracting out services/functions performed by union members that interfered with, restraineda and/or
charge for ULP against herein respondent, which case is still pending.
coerced the employees in the exercise of their right to self-organization;
Subsequent to the filing of the said charge, the respondent by its manager Chue
The Union is of the position that the outsourcing of jobs included in the existing bargaining unitYiong,
to summoned and advised union president Lazaro Peralta that if Francisco San
BOMC is a breach of the union-shop agreement in the CBA. In transferring the former employees Joseofwill not withdraw his charge against the company, the company will also dismiss
FEBTC to BOMC instead of absorbing them in BPI as the surviving corporation in the merger, his the brother Apolonio San Jose, to which the union president replied that should not be
number of positions covered by the bargaining unit was decreased, resulting in the reduction ofthe theattitude of the company because Apolonio has nothing to do with his brother’s
Union’s membership. For the Union, BPI’s act of arbitrarily outsourcing functions formerly performed
case.
by the Union members and, in fact, transferring a number of its members beyond the ambit of the
Union, is a violation of the CBA and interfered with the employees’ right to self organization. The
OnUnion
January 24, 1959, respondent did dismiss Apolonio San Jose without just and valid
insists that the CBA covers the agreement with respect, not only to wages and hours of work, but to all
cause and in gross violation of the operative CBA between the complainant union and
other terms and conditions of work. The union shop clause, being part of these conditions, states that
respondent corporation.
the regular employees belonging to the bargaining unit, including those absorbed by way of the
corporate merger, were required to join the bargaining union “as a condition for employment.” Simply
ISSUE: Whether the dismissal of a relative of an employee who filed an action against
put, the transfer of former FEBTC employees to BOMC removed them from the coverage of unionized the employer is an ULP.
establishment. While the Union admitted that BPI has the prerogative to determine what should be
done to meet the exigencies of business in accordance with the case of Sime Darby Pilipinas, RULING:
Inc. v. YES. Section 4(a) (5) of Republic Act No. 875, provides that :
NLRC,19 it insisted that the exercise of management prerogative is not absolute, thus, requiring good
faith and adherence to the law and the CBA. Citing the case of Shell Oil Workers’ Union v. Shell “(a) It shall be ULP for an employer:
Company of the Philippines, Ltd.,20 the Union claims that it is unfair labor practice for an employer to
outsource the positions in the existing bargaining unit. … (5) To dismiss, discharge, or otherwise prejudice or discriminate against an
employee for having filed charges or for having given or being about to give testimony
ISSUE: Whether or not the act of BPI to outsource the cashiering, distribution and under this Act.”
bookkeeping functions to BOMC is in conformity with the law and the existing CBA.
Although the cited law pertains to the specific employee who filed a case or given a
testimony against the employer, it should be construed in line with the spirit and
purpose of said Section 4 and of the legislation of which it forms part — namely, to
assure absolute freedom of the employees and laborers to establish labor
organizations and unions, as well as to prefer charges before the proper organs of the
Government for violations of our labor laws.
If the dismissal of an employee due to the filing by him of said charges would be and is
an undue restraint upon said freedom, the dismissal of his brother owing to the non-
withdrawal of the charges of the former, would be and constitute as much a restraint
upon the same freedom. In fact, it may be greater and more effective restraint thereto.
Indeed, a complainant may be willing to risk the hazards of a possible and even
probable retaliatory action by the employer in the form of a dismissal or another
discriminatory act against him personally, considering that nobody is perfect, that
everybody commits mistakes and that there is always a possibility that the employer
may find in the records of any employee, particularly if he has long been in the service,
some act or omission constituting a fault or negligence which may be an excuse for
such dismissal or discrimination. Yet, such complainant may not withstand the
pressure that would result if his brother or another member of his immediate family
were threatened with such action unless the charges in question were withdrawn.
What is prohibited to be done directly shall not be allowed to be accomplished
indirectly. Thus in the Matter of Quidnick Dye Works Inc. and Federation of Dyers,
Finishers, Printers and Bleachers of America (2 NLRB 963) it was held that the
dismissal of a laborer on account of union activities of his brother constituted an ULP.
The discharge of relatives of an employee who has himself been discriminately
discharged, for no other reason than the relation, is itself a discriminatory discharge, in
violation of the Act. An illustration is Memphis Furniture Co. (3 NLRB 26 [1937]),
“where the evidence indicated that the sole reason for the dismissal of a female
employee was that she was the wife of an employee who has been discharged. It was
held that the discharge under the circumstances was discriminatory and a violation of
the Act, even though discharged female employee was not herself a member of any
union. The respondent thus made union membership and activities a bar to the
employment not only of the union member himself but of members of his family as
well. A more effective mode of discouraging of union affiliation could hardly be found
then the knowledge that such activities put not merely the union member’s
employment but that of those closely related to him in jeopardy.“
In addition to violating Section 4(a) (5) of Republic Act No. 875, the discharge of
Apolonio San Jose is, therefore, an ULP.
Rizal Cement Workers vs. Madrigal, G.R.
No. L-19767, April 30, 1964
the Union staged a strike at the plant of the respondent Rizal Cement Co., Inc. in
Binangonan, Rizal. In the early morning of the following day, that is, on May 28, 1956,
Candido de Leon warehouseman-encargado at the Bodega Tanque, received a
telephone call from one Johnny de Leon, manager of the respondent Rizal Cement
Co., Inc., with the information that the Union staged a strike against the company on
the previous day, May 27, 1956, in Binangonan, Rizal De Leon further informed him
that he should take precautionary measures in protecting the properties of the
company stored at the Bodega Tanque because of the strikers caused damage to the
factory in Binangonan and sabotage might occur. For this reason, he was advised by
the manager to request the members of the Union to stay meanwhile outside the
premises of the Bodega Tanque. What he did in the morning of May 28, 1956 was to
station himself at the gate of the compound. When the workers arrived for work at 7:00
a.m., he did not allow the 21 complaining workers who are members of the Union to
enter the gate and allowed only those who are not members of said Union.
Upon refusal of Candido de Leon to allow the complaining workers to work on that
day, the Union, sent a letter to the manager of the Bodega alleging discrimination. The
manager sent a reply denying such allegation.
Issue: WON there was discrimination against the employees who are not allowed to
work in the Bodega.
HELD NO.
It is not herein controverted that the complainants were locked out or denied work by
the respondent Company. Under Republic Act 875, however, for the discrimination by
reason of union membership to be considered an unfair labor practice, the same must
have been committed to courage or discourage such membership in the union. This
cannot be said of the act of the Company complained of. As clearly established by the
evidence, its refusal to all complainants to work and requirement that the latter stay out
of the premises in the meantime (perhaps while the strike was still going on at the
factory) was borne out of the Company's justified apprehension and fear that sabotage
might be committed in the warehouse where the products machinery and spare parts
were stored, as has been the case in Binangonan. It has never been shown that the
act of the Company was intended to induce the complain ants to renounce their union-
membership or as a deterrent for non-members to affiliate therewith, nor as a
retaliatory measure for activities in the union or in furtherance of the cause of the
union.
PICOP vs. Taneca, G.R. No. 160828, August 9, 2010
respondents, regular rank-and-file employees of PRI and bona fide members
of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor
(NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI, filed a Complaint for unfair labor practice, illegal dismissal
and money claims against petitioner PICOP Resources, Incorporated (PRI)
Fuentes (Atty. Fuentes) sent a letter to the management of PRI demanding the
termination of employees who allegedly campaigned for, supported and signed the
Petition for Certification Election of the Federation of Free Workers Union (FFW)
during the effectivity of the CBA. NAMAPRI-SPFL considered said act of campaigning
for and signing the petition for certification election of FFW as an act of disloyalty and
a valid basis for termination for a cause in accordance with its Constitution and By-
Laws, and the terms and conditions of the CBA
Atty. Romero A. Boniel issued a memorandum addressed to the concerned employees
to explain in writing within 72 hours why their employment should not be terminated
due to acts of disloyalty as alleged by their Union. Atty. Fuentes advised the
management of PRI that the Union found the member's explanations to be
unsatisfactory. He reiterated the demand for termination, but only of 46 member-
employees, including respondents.
Respondents maintained that their acts of signing the authorization signifying support
to the filing of a Petition for Certification Election of FFW was merely prompted by their
desire to have a certification election among the rank-and-file employees of PRI with
hopes of a CBA negotiation in due time; and not to cause the downfall of NAMAPRI-
SPFL.
ISSUE:
whether an existing CBA can be given its full force and effect in all its terms and
condition including its union security clause, even beyond the 5-year period when no
new CBA has yet been entered into.
HELD
Citing Article 253 of the Labor Code,14 PRI contends that as parties to the CBA, they
are enjoined to keep thestatus quo and continue in full force and effect the terms and
conditions of the existing CBA during the 60-day period and/or until a new agreement
is reached by the parties.
Petitioner's argument is untenable.
"Union security" is a generic term, which is applied to and comprehends "closed
shop," "union shop," "maintenance of membership," or any other form of agreement
which imposes upon employees the obligation to acquire or retain union membership
as a condition affecting employment.
There is union shop when all new regular employees are required to join the union
within a certain period as a condition for their continued employment.
There is maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued employment
until they are promoted or transferred out of the bargaining unit, or the agreement is
terminated.
A closed shop, on the other hand, may be defined as an enterprise in which, by
agreement between the employer and his employees or their representatives, no
person may be employed in any or certain agreed departments of the enterprise
unless he or she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of which the employees
in interest are a part.15
in terminating the employment of an employee by enforcing the union security
clause, the employer needs to determine and prove that:
(1) the union security clause is applicable;
(2) the union is requesting for the enforcement of the union security provision in the
CBA; and
(3) there is sufficient evidence to support the decision of the union to expel the
employee from the union.
 CBA between PRI and respondents included a union security clause,
specifically, a maintenance of membership
 PRI, upon written request from the Union, can indeed terminate the
employment of the employee who failed to maintain its good standing as a
union member. NAMAPRI-SPFL, in two (2) occasions demanded from
PRI, to terminate the employment of respondents due to their acts of
disloyalty to the Union.
 However, as to the third requisite, we find that there is no sufficient
evidence to support the decision of PRI to terminate the employment of
the respondents.
1. PRI alleged that respondents were terminated from employment based on the
alleged acts of disloyalty they committed when they signed an authorization for the
Federation of Free Workers (FFW) to file a Petition for Certification Election among all
rank-and-file employees of PRI. It contends that the acts of respondents are a violation
of the Union Security Clause, as provided in their Collective Bargaining Agreement.
We are unconvinced.
Mere signing of the authorization in support of the Petition for Certification Election of
FFW on March 19, 20 and 21, or before the "freedom period," is not sufficient ground
to terminate the employment of respondents inasmuch as the petition itself was
actually filed during the freedom period. Nothing in the records would show that
respondents failed to maintain their membership in good standing in the Union.
Respondents did not resign or withdraw their membership from the Union to which
they belong. Respondents continued to pay their union dues and never joined the
FFW.
"authorization letter to file a petition for certification election" is different from an actual
"Petition for Certification Election." Likewise, as per records, it was clear that the actual
Petition for Certification Election of FFW was filed only on May 18, 2000.17 Thus, it was
within the ambit of the freedom period
2. PRI anchored their decision to terminate respondents’ employment on Article 253 of
the Labor Code which states that "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." It claimed that they are still bound by the Union Security
Clause of the CBA even after the expiration of the CBA; hence, the need to terminate
the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
At the expiration of the freedom period, the employer shall continue to recognize
the majority status of the incumbent bargaining agent where no petition for
certification election is filed.19
Applying the same provision, it can be said that while it is incumbent for the employer
to continue to recognize the majority status of the incumbent bargaining agent even
after the expiration of the freedom period, they could only do so when no petition for
certification election was filed. The reason is, with a pending petition for certification,
any such agreement entered into by management with a labor organization is fraught
with the risk that such a labor union may not be chosen thereafter as the collective
bargaining representative.20 The provision for statusquo is conditioned on the fact that
no certification election was filed during the freedom period. Any other view would
render nugatory the clear statutory policy to favor certification election as the means of
ascertaining the true expression of the will of the workers as to which labor
organization would represent them.21
Moreover, the last sentence of Article 253 which provides for automatic renewal
pertains only to the economic provisions of the CBA, and does not include
representational aspect of the CBA. An existing CBA cannot constitute a bar to a filing
of a petition for certification election. When there is a representational issue,
the statusquo provision in so far as the need to await the creation of a new agreement
will not apply. Otherwise, it will create an absurd situation where the union members
will be forced to maintain membership by virtue of the union security clause existing
under the CBA and, thereafter, support another union when filing a petition for
certification election. If we apply it, there will always be an issue of disloyalty whenever
the employees exercise their right to self-organization. The holding of a certification
election is a statutory policy that should not be circumvented,23 or compromised.
NUWHRAIN vs. NLRC, G.R. No. 179402, September 30, 2008
After the lapse of the 60-day freedom period, but pending the disposition of the
Petition for Certification Election filed by NUWHRAIN, HIMPHLU served the Hotel with
a written demand dated 28 July 2005[10] for the dismissal of 36 employees following
their expulsion from HIMPHLU for alleged acts of disloyalty and violation of its
Constitution and by-laws. An Investigation Report[11] was attached to the said written
demand, stating that the 36 employees, who were members of HIMPHLU, joined
NUWHRAIN, in violation of Section 2, Article IV of the Collective Bargaining
Agreement, which provided for a union security clause that reads: [12]
Section 2. DISMISSAL PURSUANT TO UNION SECURITY
CLAUSE. Accordingly, failure to join the UNION within the period specified
in the immediately preceding section or failure to maintain membership
with the UNION in good standing either through resignation or expulsion
from the UNION in accordance with the UNIONs Constitution and by-laws
due to disloyalty, joining another union or non-payment of UNION dues
shall be a ground for the UNION to demand the dismissal from the
HOTEL of the employee concerned. The demand shall be accompanied
by the UNIONs investigation report and the HOTEL shall act
accordingly subject to existing laws and jurisprudence on the
matter, provided, however, that the UNION shall hold the HOTEL free
and harmless from any and all liabilities that may arise should the
dismissed employee question in any manner the dismissal. The
HOTEL shall not, however, be compelled to act on any such UNION
demand if made within a period of sixty (60) days prior to the expiry
date of this agreement.
Hotel issued Disciplinary Action Notices[13] (Notices) directing the 36
employees to submit a written explanation for their alleged acts of disloyalty and
violation of the union security clause for which HIMPHLU sought their dismissal. Hotel
called the contending unions and the employees concerned for a reconciliatory
conference in an attempt to avoid the dismissal of the 36 employees. NUWHRAIN
proceeded to file a Notice of Strike before the National Conciliation and Mediation
Board (NCMB) on 8 September 2005 on the ground of unfair labor practice
NUWHRAIN asserted that the Hotel committed unfair labor practice when it issued the
Notices to the 36 employees who switched allegiance from HIMPHLU to NUWHRAIN
ISSUE
WON the HOTEL committed unfair labor practice when it issued the
Notices to the 36 employees, former members of HIMPHLU, who
switched allegiance to NUWHRAIN
Union security is a generic term which is applied to and comprehends
closed shop, union shop, maintenance of membership or any other form of agreement
which imposes upon employees the obligation to acquire or retain union membership
as a condition affecting employment.[25] Article 248(e) of the Labor Code recognizes
the effectivity of a union shop clause:
Art. 248. Unfair labor practices of employers.
(e) To discriminate in regard to wages, hours of work, and
other terms and conditions of employment in order to
encourage or discourage membership in any labor
organization. Nothing in this Code or in any other law
shall prevent the parties from requiring membership in a
recognized collective bargaining agent as a condition for
 employment, except of those employees who are already
members of another union at the time of the signing of
the collective bargaining agreementx x x. (Emphasis
supplied.)
In the present case, the Collective Bargaining Agreement includes a union
security provision.[28] To avoid the clear possibility of liability for breaching the union
security clause of the Collective Bargaining Agreement and to protect its own interests,
the only sensible option left to the Hotel, upon its receipt of the demand of HIMPHLU
for the dismissal of the 36 employees, was to conduct its own inquiry so as to make its
own findings on whether there was sufficient ground to dismiss the said employees
who defected from HIMPHLU. The issuance by the respondent of the Notices requiring
the 36 employees to submit their explanations to the charges against them was the
reasonable and logical first step in a fair investigation. It is important to note that the
Hotel did not take further steps to terminate the 36 employees.Instead, it arranged for
reconciliatory conferences between the contending unions in order to avert the
possibility of dismissing the 36 employees for violation of the union security clause of
the Collective Bargaining Agreement.
This Court, in Malayang Samahan ng Manggagawa sa M. Greenfield v.
Ramos[29] clearly stated the general rule: the dismissal of an employee by the company
pursuant to a labor unions demand in accordance with a union security agreement
does not constitute unfair labor practice. An employer is not considered guilty of unfair
labor practice if it merely complied in good faith with the request of the certified union
for the dismissal of employees expelled from the union pursuant to the union security
clause in the Collective Bargaining Agreement.[30] In the case at bar, there is even less
possibility of sustaining a finding of guilt for unfair labor practice where respondent did
not dismiss the 36 employees, despite the insistence of HIMPHLU, the sole bargaining
agent for the rank and file employees of the Hotel, on the basis of the union security
clause of the Collective Bargaining Agreement. The only act attributed to the
respondent is its issuance of the Notices which, contrary to being an unfair labor
practice, even afforded the employees involved a chance to be heard.
BPI vs. BPI Employees Union-Davao Chapter, G.R.
No. 164301, August 10, 2010
Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC
were transferred to and absorbed by BPI as the surviving corporation. FEBTC
employees, including those in its different branches across the country, were hired by
petitioner as its own employees, with their status and tenure recognized and salaries
and benefits maintained.
Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI
Unibank (hereinafter the Union, for brevity) is the exclusive bargaining agent of BPIs
rank and file employees in Davao City. The former FEBTC rank-and-file employees in
Davao City did not belong to any labor union at the time of the merger
Prior to the effectivity of the merger, respondent Union invited said FEBTC
employees to a meeting regarding the Union Shop Clause
Section 2. Union Shop - New employees falling within the
bargaining unit as defined in Article I of this Agreement, who
may hereafter be regularly employed by the Bank shall,
within thirty (30) days after they become regular employees,
join the Union as a condition of their continued employment. It
is understood that membership in good standing in the Union
is a condition of their continued employment with the
Bank.[8] (Emphases supplied.)
Respondent Union then sent notices to the former FEBTC employees who
refused to join, as well as those who retracted their membership, and called them to a
hearing regarding the matter. When these former FEBTC employees refused to attend
the hearing, the president of the Union requested BPI to implement the Union Shop
Clause of the CBA and to terminate their employment pursuant thereto.[10]
Voluntary Arbitrator Rosalina Letrondo-Montejo, in a Decision[12] dated
November 23, 2001, ruled in favor of petitioner BPIs interpretation that the former
FEBTC employees were not covered by the Union Security Clause of the CBA
between the Union and the Bank on the ground that the said employees were not new
employees who were hired and subsequently regularized, but were absorbed
employees by operation of law because the former employees of FEBTC can be
considered assets and liabilities of the absorbed corporation. The Voluntary
Arbitrator concluded that the former FEBTC employees could not be compelled to join
the Union, as it was their constitutional right to join or not to join any organization.
ISSUE
whether or not the former FEBTC employees that were absorbed by
petitioner upon the merger between FEBTC and BPI should be covered by the Union
Shop Clause found in the existing CBA between petitioner and respondent Union.
HELD
Section 2, Article II of the CBA is silent as to how one becomes a regular
employee of the BPI for the first time.There is nothing in the said provision which
requires that a new regular employee first undergo a temporary or probationary
status before being deemed as such under the union shop clause of the CBA.
Union security is a generic term which is applied to and comprehends closed shop,
union shop, maintenance of membership or any other form of agreement which
imposes upon employees the obligation to acquire or retain union membership as a
condition affecting employment.
There is union shop when all new regular employees are required to join the union
within a certain period for their continued employment.
There is maintenance of membership shop when employees, who are union members
as of the effective date of the agreement, or who thereafter become members, must
maintain union membership as a condition for continued employment until they are
promoted or transferred out of the bargaining unit or the agreement is terminated.
A closed-shop, on the other hand, may be defined as an enterprise in which, by
agreement between the employer and his employees or their representatives, no
person may be employed in any or certain agreed departments of the enterprise
unless he or she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of which the employees
in interest are a part.[19]
In other words, the purpose of a union shop or other union security
arrangement is to guarantee the continued existence of the union through enforced
membership for the benefit of the workers.
Absorbed FEBTC Employees are Neither Assets nor Liabilities
In legal parlance, however, human beings are never embraced in the term assets and
liabilities. Moreover, BPIs absorption of former FEBTC employees was neither by
operation of law nor by legal consequence of contract. There was no government
regulation or law that compelled the merger of the two banks or the absorption of the
employees of the dissolved corporation by the surviving corporation. Had there been
such law or regulation, the absorption of employees of the non-surviving entities of the
merger would have been mandatory on the surviving corporation.[27] In the present
case, the merger was voluntarily entered into by both banks presumably for some
mutually acceptable consideration. In fact, the Corporation Code does not also
mandate the absorption of the employees of the non-surviving corporation by
the surviving corporation in the case of a merger.
Proper Appreciation of the Term New Employees Under the CBA
In any event, it is of no moment that the former FEBTC employees
retained the regular status that they possessed while working for their former employer
upon their absorption by petitioner. This fact would not remove them from the scope of
the phrase new employees as contemplated in the Union Shop Clause of the CBA,
contrary to petitioners insistence that the term new employees only refers to those who
are initially hired as non-regular employees for possible regular employment.
The Union Shop Clause in the CBA simply states that new employees
who during the effectivity of the CBA may be regularly employed by the Bank must join
the union within thirty (30) days from their regularization. There is nothing in the said
clause that limits its application to only new employees who possess non-regular
status, meaning probationary status, at the start of their employment. Petitioner
likewise failed to point to any provision in the CBA expressly excluding from the Union
Shop Clause new employees who are absorbed as regular employees from the
beginning of their employment. What is indubitable from the Union Shop Clause is that
upon the effectivity of the CBA, petitioners new regular employees (regardless of the
manner by which they became employees of BPI) are required to join the Union as
a condition of their continued employment.
No Substantial Distinction Under the CBA Between Regular Employees
Hired After Probationary Status and Regular Employees Hired After the
Merger They both enjoy benefits that the Union was able to secure for them
under the CBA. When they both entered the employ of BPI, the CBA and the
Union Shop Clause therein were already in effect and neither of them had the
opportunity to express their preference for unionism or not. We see no cogent
reason why the Union Shop Clause should not be applied equally to these two
types of new employees, for they are undeniably similarly situated.
PURPOSE OF UNION SECURITY CLAUSE
Indeed, a union security clause in a CBA should be interpreted to give
meaning and effect to its purpose, which is to afford protection to the certified
bargaining agent and ensure that the employer is dealing with a union that represents
the interests of the legally mandated percentage of the members of the bargaining
unit.
The union shop clause offers protection to the certified bargaining agent
by ensuring that future regular employees who
(a) enter the employ of the company during the life of the CBA;
(b) are deemed part of the collective bargaining unit; and (
c) whose number will affect the number of members of the collective
bargaining unit will be compelled to join the union.
 Such compulsion has legal effect, precisely because the
employer by voluntarily entering in to a union shop clause in a
CBA with the certified bargaining agent takes on the
responsibility of dismissing the new regular employee who
does not join the union.
Right of an Employee not to Join a Union is not Absolute and Must
Give Way to the Collective Good of All Members of the Bargaining Unit Time and
again, this Court has ruled that the individual employees right not to join a union may
be validly restricted by a union security clause in a CBA [49] and such union security
clause is not a violation of the employees constitutional right to freedom of
association.[50] Laws and jurisprudence promote unionism and afford certain
protections to the certified bargaining agent in a unionized company because a strong
and effective union presumably benefits all employees in the bargaining unit since
such a union would be in a better position to demand improved benefits and conditions
of work from the employer.
settled jurisprudence has already swung the balance in favor of unionism, in
recognition that ultimately the individual employee will be benefited by that policy. In
the hierarchy of constitutional values, this Court has repeatedly held that the right to
abstain from joining a labor organization is subordinate to the policy of encouraging
unionism as an instrument of social justice.
CONCLUSION
Union Shop Clause of the CBA covers the former FEBTC employees who
were hired/employed by BPI during the effectivity of the CBA in a manner which
petitioner describes as absorption.
Complex Electronics Employees Asso. vs. Complex
Electronics, 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 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.
Octavio vs. PLDT, G.R. No. 175492, February 27, 2013
Facts: PLDT and Gabay ng Unyon sa Telekominaksyon ng mga Superbisor (GUTS)
entered into a CBA covering the period January 1, 1999 to December 31, 2001 (CBA
of 1999-2001). On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on
a probationary status. He became a member of GUTS.
On May 31, 2002, PLDT and GUTS entered into another CBA covering the period
January 1, 2002 to December 31, 2004 (CBA of 2002-2004). Claiming that he was not
given the salary increases of P2,500.00 effective January 1, 2001 and P2,000.00
effective January 1, 2002, Octavio wrote the President of GUTS, Adolfo Fajardo
(Fajardo). Acting thereon and on similar grievances from other GUTS members,
Fajardo wrote the PLDT Human Resource Head to inform management of the GUTS
members’ claim for entitlement to the across-the-board salary increases.
The committee denied the claims of Octavio. Octavio filed before the Arbitration
Branch of the NLRC a Complaint for payment of said salary increases.
PLDT countered that the issues advanced by Octavio had already been resolved by
the Union-Management Grievance Committee when it denied his claims through the
Committee Resolution. Moreover, the grant of across-the board salary increase for
those who were regularized starting January 1, 2002 and the exclusion thereto of
those who were regularized on January 1, 2001, do not constitute an act of unfair labor
practice as would result in any discrimination or encourage or discourage membership
in a labor organization. In fact, when the Union-Management Grievance Committee
came up with the Committee Resolution, they considered the same as the most
practicable and reasonable solution for both management and union. At any rate, the
said Committee Resolution had already become final and conclusive between the
parties for failure of Octavio to elevate the same to the proper forum. In addition, PLDT
claimed that the NLRC has no jurisdiction to hear and decide Octavio’s claims.
Issue: WON the decision of the Grievance Committee is binding.
Held: Yes. It is settled that "when parties have validly agreed on a procedure for
resolving grievances and to submit a dispute to voluntary arbitration then that
procedure should be strictly observed." Moreover, we have held time and again that
"before a party is allowed to seek the intervention of the court, it is a precondition that
he should have availed of all the means of administrative processes afforded him.
Hence, if a remedy within the administrative machinery can still be resorted to by
giving the administrative officer concerned every opportunity to decide on a matter that
comes within his jurisdiction, then such remedy should be exhausted first before the
court’s judicial power can be sought. The premature invocation of the court’s judicial
intervention is fatal to one’s cause of action." "The underlying principle of the rule on
exhaustion of administrative remedies rests on the presumption that when the
administrative body, or grievance machinery, is afforded a chance to pass upon the
matter, it will decide the same correctly."
Under Article 26019 of the Labor Code, grievances arising from the interpretation or
implementation of the parties’ CBA should be resolved in accordance with the
grievance procedure embodied therein. It also provides that all unsettled grievances
shall be automatically referred for voluntary arbitration as prescribed in the CBA.
By failing to question the Committee Resolution through the proper procedure
prescribed in the CBA, that is, by raising the same before a Board of Arbitrators,
Octavio is deemed to have waived his right to question the same. Clearly, he departed
from the grievance procedure mandated in the CBA and denied the Board of
Arbitrators the opportunity to pass upon a matter over which it has jurisdiction. Hence,
and as correctly held by the CA, Octavio’s failure to assail the validity and
enforceability of the Committee Resolution makes the same binding upon him. On this
score alone, Octavio’s recourse to the labor tribunals below, as well as to the CA, and,
finally, to this Court, must therefore fail.
Goya Inc. vs Goya Employees’ Union, G.R. No. 170054, January 21, 2013
FACTS: Sometime in January 2004, petitioner Goya, Inc. (Company) hired contractual
employees from PESO Resources Development Corporation (PESO) to perform
temporary and occasional services in its factory. This prompted respondent Goya, Inc.
Employees Union–FFW (Union) to request for a grievance conference on the ground
that the contractual workers do not belong to the categories of employees stipulated in
the existing Collective Bargaining Agreement (CBA).The Union asserted that the hiring
of contractual employees from PESO is not a management prerogative and in gross
violation of the CBA tantamount to unfair labor practice (ULP). It noted that the
contractual workers engaged have been assigned to work in positions previously
handled by regular workers and Union members, in effect violating Section 4, Article I
of the CBA, which provides for three categories of employees in the Company.
During the hearing on July 1, 2004, the Company and the Union manifested before
Voluntary Arbitrator (VA) Bienvenido E. Laguesma that amicable settlement was no
longer possible; hence, they agreed to submit for resolution the solitary issue of
"[w]hether or not the Company is guilty of unfair labor acts in engaging the services of
PESO, a third party service provider, under the existing CBA, laws, and
jurisprudence."
On October 26, 2004, VA Laguesma dismissed the Union’s charge of ULP for being
purely speculative and for lacking in factual basis, but the Company was directed to
observe and comply with its commitment under the CBA.
While the Union moved for partial reconsideration of the VA Decision,8 the Company
immediately filed a petition for review9 before the Court of Appeals (CA) under Rule 43
of the Revised Rules of Civil Procedure to set aside the directive to observe and
comply with the CBA commitment pertaining to the hiring of casual employees when
necessitated by business circumstances. the CA dismissed the petition
ISSUE: WON the VA professed an order was not covered by the sole issue submitted
for voluntary arbitration
HELD: No. The VA ruled on a matter that is covered by the sole issue submitted for
voluntary arbitration. Resultantly, the CA did not commit serious error when it
sustained the ruling that the hiring of contractual employees from PESO was not in
keeping with the intent and spirit of the CBA. Indeed, the opinion of the VA is germane
to, or, in the words of the CA, "interrelated and intertwined with," the sole issue
submitted for resolution by the parties.
Generally, the arbitrator is expected to decide only those questions expressly
delineated by the submission agreement. Nevertheless, the arbitrator can assume that
he has the necessary power to make a final settlement since arbitration is the final
resort for the adjudication of disputes. The succinct reasoning enunciated by the CA in
support of its holding, that the Voluntary Arbitrator in a labor controversy has
jurisdiction to render the questioned arbitral awards, deserves our concurrence, thus:
In general, the arbitrator is expected to decide those questions expressly stated and
limited in the submission agreement. However, since arbitration is the final resort for
the adjudication of disputes, the arbitrator can assume that he has the power to make
a final settlement. Thus, assuming that the submission empowers the arbitrator to
decide whether an employee was discharged for just cause, the arbitrator in this
instance can reasonably assume that his powers extended beyond giving a yes-or-no
answer and included the power to reinstate him with or without back pay.
In one case, the Supreme Court stressed that "xxx the Voluntary Arbitrator had plenary
jurisdiction and authority to interpret the agreement to arbitrate and to determine the
scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of
this Court. The Arbitrator, as already indicated, viewed his authority as embracing not
merely the determination of the abstract question of whether or not a performance
bonus was to be granted but also, in the affirmative case, the amount thereof.
By the same token, the issue of regularization should be viewed as two-tiered issue.
While the submission agreement mentioned only the determination of the date or
regularization, law and jurisprudence give the voluntary arbitrator enough leeway of
authority as well as adequate prerogative to accomplish the reason for which the law
on voluntary arbitration was created – speedy labor justice. It bears stressing that the
underlying reason why this case arose is to settle, once and for all, the ultimate
question of whether respondent employees are entitled to higher benefits. To require
them to file another action for payment of such benefits would certainly undermine
labor proceedings and contravene the constitutional mandate providing full protection
to labor.
Honda Cars vs Honda Cars Technical Specialist, G.R. No. 204142, November 19,
2014
Facts: Honda Cars Inc., and the company’s supervisors and technical specialists’
union, Honda Cars Technical Specialists and Supervisory Union entered into a
collective bargaining agreement for the period April 1, 2006 to March 31, 2011. Prior to
the execution of the CBA, the union members were receiving P3,300.00 a month as
transportation allowance; on September3, 2005, they entered into a Memorandum of
Agreement converting the transportation allowance into a monthly gasoline allowance
at 125 liters each for official business purposes and travel from home to office.
Claiming that the gasoline allowance is similar to the company policy for manages and
assistant vice-presidents that “in the event the gas allowance is not fully consumed,
the gasoline not used may be converted to cash, subject to whatever tax is
applicable”, the company deducted from union members withholding tax
corresponding to the conversion to cash of their unused gasoline allowance, since the
company considered it as part of compensation subject to income tax. The union on
the other hand claimed that the gasoline allowance is a “negotiated item” under Article
XV Section 15 of the new CBA on fringe benefits, thus it resulted to a grievance which
was not resolved by the CBA grievance procedure. They submitted the issue to a
panel of voluntary arbitrators as required by the CBA.
The Panel of Voluntary Arbitrators then rendered a decision declaring that the cash
conversion of the unused gasoline allowance is a fringe benefit subject to the fringe
benefit tax, not to income tax, thus the deductions made by the company shall be
considered as advances subject to refund in future remittances of withholding tax.
On appeal, the CA Eight Division denied the appeal and affirmed with modification the
Voluntary Arbitrators’ decision. While the CA agreed that the cash conversion is a
fringe benefit, it does not necessarily mean that it is subject to the fringe benefit tax, as
it explained that Section 33 (A) of the National Internal Revenue Code (NIRC) of
1997 imposed a fringe benefit tax, effective January 1, 2000 and thereafter, on the
grossed-up monetary value of fringe benefit furnished or granted to the employee
(except rank-and-file employees) by the employer (unless the fringe benefit is required
by the nature of, or necessary to the trade, business or profession of the employer, or
when the fringe benefit is for the convenience or advantage of the employer). Since
the gasoline allowance was mainly for the benefit of the company, it is not subject to
fringe benefit tax.
The company elevated the case to the Supreme Court. It assails the finding of both
the arbitrators and the CA that the cash conversion of the unused portion of gasoline
allowance is a fringe benefit, not a part of compensation income. Even assuming the
same is a fringe benefit, the union has no cause of action for the refund of tax withheld
and paid to the BIR. Citing Section 204 of the NIRC, the company contends that an
action for the refund of an erroneous withholding and payment of taxes should be in
the nature of a tax refund claim with the BIR. It further contends that when it withheld
the income tax due from the cash conversion of the unused gasoline allowance of the
union members, it was simply acting as an agent of the government for the collection
and payment of taxes due from the members.
Issue: Whether or not the union has a cause of action for refund to tax withheld by the
company on the cash conversion of the unused portion of the gasoline allowance of its
members.
Ruling: We partly grant the petition. The Voluntary Arbitrator has no jurisdiction to
settle tax matters
The Labor Code vests the Voluntary Arbitrator original and exclusive jurisdiction to
hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies[ LABOR CODE, Article
261.]. Upon agreement of the parties, the Voluntary Arbitrator shall also hear and
decide all other labor disputes, including unfair labor practices and bargaining
deadlocks.⁠1
In short, the Voluntary Arbitrator’s jurisdiction is limited to labor disputes. Labor dispute
means “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
the disputants stand in the proximate relation of employer and employee.”⁠2
The issues raised before the Panel of Voluntary Arbitrators are: (1) whether the cash
conversion of the gasoline allowance shall be subject to fringe benefit tax or the
graduated income tax rate on compensation; and (2) whether the company wrongfully
withheld income tax on the converted gas allowance.
The Voluntary Arbitrator has no competence to rule on the taxability of the gas
allowance and on the propriety of the withholding of tax. These issues are clearly tax
matters, and do not involve labor disputes. To be exact, they involve tax issues within
a labor relations setting as they pertain to questions of law on the application of
Section 33 (A) of the NIRC. They do not require the application of the Labor Code or
the interpretation of the MOA and/or company personnel policies. Furthermore, the
company and the union cannot agree or compromise on the taxability of the gas
allowance. Taxation is the State’s inherent power; its imposition cannot be subject to
the will of the parties.
Under paragraph 1, Section 4 of the NIRC, the CIR shall have the exclusive and
original jurisdiction to interpret the provisions of the NIRC and other tax laws, subject
to review by the Secretary of Finance. Consequently, if the company and/or the union
desire/s to seek clarification of these issues, it/they should have requested for a tax
ruling⁠3 from the Bureau of Internal Revenue (BIR). Any revocation, modification or
reversal of the CIR’s ruling shall not be given retroactive application if the revocation,
modification or reversal will be prejudicial to the taxpayers, except in the following
cases:
(a) Where the taxpayer deliberately misstates or omits material facts from his return or
any document required of him by the BIR;
(b) Where the facts subsequently gathered by the BIR are materially different from the
facts on which the ruling is based; or
(c) Where the taxpayer acted in bad faith.⁠4
On the other hand, if the union disputes the withholding of tax and desires a refund of
the withheld tax, it should have filed an administrative claim for refund with the CIR.
Paragraph 2, Section 4 of the NIRC expressly vests the CIR original jurisdiction over
refunds of internal revenue taxes, fees or other charges, penalties imposed in relation
thereto, or other tax matters.
The union has no cause of action against the company
Under the withholding tax system, the employer as the withholding agent acts as both
the government and the taxpayer’s agent. Except in the case of a minimum wage
earner, every employer has the duty to deduct and withhold upon the employee’s
wages a tax determined in accordance with the rules and regulations to be prescribed
by the Secretary of Finance, upon the CIR’s recommendation.⁠5 As the Government’s
agent, the employer collects tax and serves as the payee by fiction of law.⁠6 As the
employee’s agent, the employer files the necessary income tax return and remits the
tax to the Government.⁠7
Based on these considerations, we hold that the union has no cause of action against
the company. The company merely performed its statutory duty to withhold tax based
on its interpretation of the NIRC, albeit that interpretation may later be found to be
erroneous. The employer did not violate the employee’s right by the mere act of
withholding the tax that may be due the government.⁠8
Moreover, the NIRC only holds the withholding agent personally liable for the tax
arising from the breach of his legal duty to withhold, as distinguished from his duty to
pay tax.⁠9 Under Section 79 (B) of the NIRC, if the tax required to be deducted and
withheld is not collected from the employer, the employer shall not be relieved from
liability for any penalty or addition to the unwithheld tax.
Thus, if the BIR illegally or erroneously collected tax, the recourse of the taxpayer, and
in proper cases, the withholding agent, is against the BIR, and not against the
withholding agent⁠10. The union’s cause of action for the refund or non-withholding of
tax is against the taxing authority, and not against the employer. Section 229 of the
NIRC provides:
Sec.229. Recovery of Tax Erroneously or Illegally Collected. – No suit or proceeding
shall be maintained in any court for the recovery of any national internal revenue tax
hereafter alleged to have been erroneously or illegally assessed or collected, or of any
penalty claimed to have been collected without authority, or of any sum alleged to
have been excessively or in any manner wrongfully collected, until a claim for refund or
credit has been duly filed with the Commissioner; but such suit or proceeding may be
maintained, whether or not such tax, penalty, or sum has been paid under protest or
duress.
Ace Navigation Co. Inc., vs Fernandez, G.R. No. 197309, October 10, 2012
seaman Teodorico Fernandez (Fernandez), assisted by his wife, Glenita Fernandez,
filed with the National Labor Relations Commission (NLRC) a complaint for disability
benefits, The petitioners moved to dismiss the complaint,4 contending that the labor
arbiter had no jurisdiction over the dispute. They argued that exclusive original
jurisdiction is with the voluntary arbitrator or panel of voluntary arbitrators, pursuant to
Section 29 of the POEA Standard Employment Contract (POEA-SEC), since the
parties are covered by the AMOSUP-TCC or AMOSUP-VELA (as later cited by the
petitioners) collective bargaining agreement (CBA). Under Section 14 of the CBA, a
dispute between a seafarer and the company shall be settled through the grievance
machinery and mandatory voluntary arbitration. Fernandez opposed the motion.5 He
argued that inasmuch as his complaint involves a money claim, original and exclusive
jurisdiction over the case is vested with the labor arbiter. 2008, Labor Arbiter Romelita
N. Rioflorido denied the motion to dismiss, holding that under Section 10 of Republic
Act (R.A.) No. 8042, the Migrant Workers and Overseas Filipinos Act of 1995, the
labor arbiter has original and exclusive jurisdiction over money claims arising out of an
employer-employee relationship or by virtue of any law or contract, notwithstanding
any provision of law to the contrary.6
HELD
the POEA-SEC, which governs the employment of Filipino seafarers, provides in its
Section 29 on Dispute Settlement Procedures:
In cases of claims and disputes arising from this employment, the parties
covered by a collective bargaining agreement shall submit the claim or dispute
to the original and exclusive jurisdiction of the voluntary arbitrator or panel of
voluntary arbitrators. If the parties are not covered by a collective bargaining
agreement, the parties may at their option submit the claim or dispute to either the
original and exclusive jurisdiction of the National Labor Relations Commission (NLRC),
pursuant to Republic Act (RA) 8042 otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995 or to the original and exclusive jurisdiction of the
voluntary arbitrator or panel of voluntary arbitrators. If there is no provision as to the
voluntary arbitrators to be appointed by the parties, the same shall be appointed from
the accredited voluntary arbitrators of the National Conciliation and Mediation Board of
the Department of Labor and Employment.
Under the above-quoted constitutional and legal provisions, the voluntary arbitrator or
panel of voluntary arbitrators has original and exclusive jurisdiction over Fernandez’s
disability claim. There is no dispute that the claim arose out of Fernandez’s
employment with the petitioners and that their relationship is covered by a CBA — the
AMOSUP/TCC or the AMOSUP-VELA CBA. The CBA provides for a grievance make both the Secretary (or the various regional directors) and the labor arbiters share
procedure for the resolution of grievances or disputes which occur during the jurisdiction, subject to certain conditions. Otherwise, the Secretary would not be able
employment relationship and, like the grievance machinery created under Article 261 to effectively and efficiently dispose of the primary dispute. To hold the contrary may
of the Labor Code, it is a two-tiered mechanism, with voluntary arbitration as the last even lead to the absurd and undesirable result wherein the Secretary and the labor
step. arbiter concerned may have diametrically opposed rulings. As we have said, ‘it is
fundamental that a statute is to be read in a manner that would breathe life into it,
rather than defeat it.
It bears stressing at this point that we are upholding the jurisdiction of the voluntary
In fine, the issuance of the assailed orders is within the province of the Secretary as
arbitrator or panel of voluntary arbitrators over the present dispute, not only because of
authorized by Article 263(g) of the Labor Code and Article 217(a) and (5) of the same
the clear language of the parties’ CBA on the matter; more importantly, we so uphold
Code, taken conjointly and rationally construed to subserve the objective of the
the voluntary arbitrator’s jurisdiction, in recognition of the State’s express preference
jurisdiction vested in the Secretary.
for voluntary modes of dispute settlement, such as conciliation and voluntary
arbitration as expressed in the Constitution, the law and the rules. It is settled that
NUWHRAIN-APL-IUF Dusit Hotel Nikko Chapter vs. CA, G.R. No. 163942, Nov. 11,
when the parties have validly agreed on a procedure for resolving grievances
2008
and to submit a dispute to voluntary arbitration then that procedure should be
Facts: Because of the collective bargaining deadlock, petitioner Union staged a strike
strictly observed.31
against the Hotel, herein private respondent. This strike was declared illegal by the
SC.
Interphil Laboratories Employees Union vs. Interphil Laboratories, G.R. No.
142824, December 19, 2001
Issue: The effects of an illegal strike on employees.
Facts: Petitioner is the sole and exclusive bargaining agent of the rank-and-file
employees of Respondent. They had a CBA.
Held: Regarding the Union officers and members’ liabilities for their participation in the
illegal picket and strike, Article 264(a), paragraph 3 of the Labor Code provides that
Prior to the expiration of the CBA, respondent company was approached by the
“any union officer who knowingly participates in an illegal strike and any worker or
petitioner, through its officers. The Union inquired about the stand of the company
union officer who knowingly participates in the commission of illegal acts during a
regarding the duration of the CBA which was set to expire in a few months. Salazar
strike may be declared to have lost his employment status x x x.” The law makes a
told the union officers that the matter could be best discussed during the formal
distinction between union officers and mere union members. Union officers may be
negotiations which would start soon.
validly terminated from employment for their participation in an illegal strike, while
union members have to participate in and commit illegal acts for them to lose their
All the rank-and-file employees of the company refused to follow their regular two-shift
employment status. Thus, it is necessary for the company to adduce proof of the
work schedule. The employees stopped working and left their workplace without
participation of the striking employees in the commission of illegal acts during the
sealing the containers and securing the raw materials they were working on.
strikes.
To minimize the damage the overtime boycott was causing the company, Salazar
Clearly, the 29 Union officers may be dismissed pursuant to Art. 264(a), par. 3 of the
immediately asked for a meeting with the union officers. In the meeting, Enrico
Labor Code which imposes the penalty of dismissal on “any union officer who
Gonzales, a union director, told Salazar that the employees would only return to their
knowingly participates in an illegal strike.” We, however, are of the opinion that there is
normal work schedule if the company would agree to their demands as to the
room for leniency with respect to the Union members. It is pertinent to note that the
effectivity and duration of the new CBA. Salazar again told the union officers that the
Hotel was able to prove before the NLRC that the strikers blocked the ingress to and
matter could be better discussed during the formal renegotiations of the CBA. Since
egress from the Hotel. But it is quite apparent that the Hotel failed to specifically point
the union was apparently unsatisfied with the answer of the company, the
out the participation of each of the Union members in the commission of illegal acts
overtime boycott continued. In addition, the employees started to engage in a work
during the picket and the strike. For this lapse in judgment or diligence, we are
slowdown campaign during the time they were working, thus substantially delaying the
constrained to reinstate the 61 Union members.
production of the company.
Further, we held in one case that union members who participated in an illegal strike
Respondent company filed with the National NLRC a petition to declare illegal
but were not identified to have committed illegal acts are entitled to be reinstated to
petitioner union’s “overtime boycott” and “work slowdown” which, according to
their former positions but without backwages.
respondent company, amounted to illegal strike. It also filed with Office Secretary of
Labor a petition for assumption
Club Filipino vs. Bautista, G.R. No. 168406, July 13, 2009
of jurisdiction. Secretary of Labor Nieves Confesor issued an assumption order over
Facts: Petitioner and the union had a CBA which expired on May 31, 2000. Within the
the labor dispute.
freedom period, the union made several demands for negotiation but the company
replied that it could not muster a quorum, thus no CBA negotiations could be held. In
Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor
order to compel the company to negotiate, union filed a request for preventive
Leonardo A. Quisumbing. Then Secretary Quisumbing approved and adopted the
mediation with NCMB but again failed. On April 2001, a notice of strike was filed by the
report in his Order, finding illegal strike on the part of petitioner Union.
union and thereafter, a strike was held. Petitioner filed before the NLRC a petition to
declare the strike illegal. The LA, in its decision, declared that the strike is illegal. On
Issue: WON the Labor Secretary has jurisdiction to rule over an illegal strike.
appeal, the NLRC decision is affirmed the LA decision. Upon elevation to CA, the court
set aside the ruling of the LA and NLRC as far as other respondent but dismissed the
Held: On the matter of the authority and jurisdiction of the Secretary of Labor and
other respondent. Hence, this petition.
Employment to rule on the illegal strike committed by petitioner union, it cannot be
denied that the issues of “overtime boycott” and “work slowdown” amounting to illegal
Issue: Whether the strike staged by respondent is legal.
strike before Labor Arbiter Caday are intertwined with the labor dispute before the
Labor Secretary.
Ruling: The court ruled in affirmative. It is undisputed that the notice of strike was filed
by the union without attaching the counter-proposal of the company. In cases of
The appellate court also correctly held that the question of the Secretary of Labor and
bargaining deadlocks, the notice shall, as far as practicable, further state the
Employment’s jurisdiction over labor-related disputes was already settled in
unresolved issues in the bargaining negotiations and be accompanied by the written
International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated Labor
proposals of the union, the counter-proposals of the employer and the proof of a
Union (ALU) where the Court declared:
request for conference to settle differences. In cases of unfair labor practices, the
notice shall, as far as practicable, state the acts complained of, and efforts taken to
In the present case, the Secretary was explicitly granted by Article 263(g) of the Labor
resolve the dispute amicable. Any notice which does not conform with the
Code the authority to assume jurisdiction over a labor dispute causing or likely to
requirements of this and the foregoing section shall be deemed as not having been
cause a strike or lockout in an industry indispensable to the national interest, and
filed and the party concerned shall be so informed by the regional branch of the Board.
decide the same accordingly. Necessarily, this authority to assume jurisdiction over the
The union cannot be faulted for its omission. The union could not have attached the
said labor dispute must include and extend to all questions and controversies arising
counter- proposal of the company in the notice of strike it submitted to the NCMB as
therefrom, including cases over which the labor arbiter has exclusive jurisdiction.
there was no such counter- proposal. The union filed a notice of strike, after several
request for negotiation proved futile. It was only after two weeks, when the company
Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptions
formally responded to the union by submitting the first part of its counter-proposal.
thereto. This is evident from the opening proviso therein reading ‘(e)xcept as otherwise
Nowhere in the ruling of the LA can we find any discussion of how respondents, as
provided under this Code x x x.’ Plainly, Article 263(g) of the Labor Code was meant to
union officers, knowingly participated in the alleged illegal strike. Thus, even assuming
Arguendo that the strike was illegal, their automatic dismissal had no basis.
Santa Rosa CocaCola Plant Ph. Union v CocaCola Bottlers, GR No. 164302, Jan
24, ‘07
Facts: The Sta. Rosa Coca-Cola Plant Employees Union (Union) is the sole and
exclusive bargaining representative of the regular daily paid workers and the monthly
paid non-commission-earning employees of the Coca-Cola Bottlers Philippines, Inc.
(Company) in its Sta. Rosa, Laguna plant.
Upon the expiration of the CBA, the Union informed the Company of its desire to
renegotiate its terms. The CBA meetings commenced on July 26, 1999, where the
Union and the Company discussed the ground rules of the negotiations. The Union
insisted that representatives from the Alyansa ng mga Unyon sa Coca-Cola be allowed
to sit down as observers in the CBA meetings. The Union officers and members also
insisted that their wages be based on their work shift rates. For its part, the Company
was of the view that the members of the Alyansa were not members of the bargaining
unit. The Alyansa was a mere aggregate of employees of the Company in its various
plants; and is not a registered labor organization. Thus, an impasse ensued.
On August 30, 1999, the Union, its officers, directors and six shop stewards filed a
“Notice of Strike” with the NCMB.
The Union decided to participate in a mass action organized by the Alyansa in front of
the Company’s premises. Thus, the Union officers and members held a picket along
the front perimeter of the plant on September 21, 1999. As a result, all of the 14
personnel of the Engineering Section of the Company did not report for work, and 71
production personnel were also absent. As a result, only one of the three bottling lines
operated during the day shift. All the three lines were operated during the night shift
with cumulative downtime of five (5) hours due to lack of manning, complement and
skills requirement. The volume of production for the day was short by 60,000 physical
cases versus budget.
On October 13, 1999, the Company filed a “Petition to Declare Strike Illegal”
Issue: WON the strike, dubbed by petitioner as picketing, is illegal.
Held: Article 212(o) of the Labor Code defines strike as a temporary stoppage of work
by the concerted action of employees as a result of an industrial or labor dispute. In
Bangalisan v. CA, the Court ruled that “the fact that the conventional term ‘strike’ was
not used by the striking employees to describe their common course of action is
inconsequential, since the substance of the situation, and not its appearance, will be
deemed to be controlling.”
Picketing involves merely the marching to and fro at the premises of the employer,
usually accompanied by the display of placards and other signs making known the
facts involved in a labor dispute. As applied to a labor dispute, to picket means the
stationing of one or more persons to observe and attempt to observe. The purpose of
pickets is said to be a means of peaceable persuasion.
The basic elements of a strike are present in this case. They marched to and fro in
front of the company’s premises during working hours. Thus, petitioners engaged in a
concerted activity which already affected the company’s operations. The mass
concerted activity constituted a strike.
For a strike to be valid, the following procedural requisites provided by Art 263 of the
Labor Code must be observed: (a) a notice of strike filed with the DOLE 30 days
before the intended date thereof, or 15 days in case of unfair labor practice; (b) strike
vote approved by a majority of the total union membership in the bargaining unit
concerned obtained by secret ballot in a meeting called for that purpose, (c) notice
given to the DOLE of the results of the voting at least seven days before the intended
strike. These requirements are mandatory and the failure of a union to comply
therewith renders the strike illegal. It is clear in this case that petitioners totally ignored
the statutory requirements and embarked on their illegal strike.
MSF Tire & Rubber, Inc., vs CA, G.R. No. 128632, August 5, 1999
Facts: Respondent Union filed a notice of strike in the NCMB charging (Phildtread)
with unfair labor practice. Thereafter, they picketed and assembled outside the gate of
Philtread’s plant. Philtread, on the other hand, filed a notice of lockout. Subsequently,
the Secretary of Labor assumed jurisdiction over the labor dispute and certified it for
compulsory arbitration.
During the pendency of the labor dispute, Philtread entered into a Memorandum of
Agreement with Siam Tyre whereby its plant and equipment would be sold to a new
company, herein petitioner, 80% of which would be owned by Siam Tyre and 20% by
Philtread, while the land on which the plant was located would be sold to another
company, 60% of which would be owned by Philtread and 40% by Siam Tyre.
Petitioner then asked respondent Union to desist from picketing outside its plant. As
the respondent Union refused petitioner’s request, petitioner filed a complaint for
injunction with damages before the RTC. Respondent Union moved to dismiss the
complaint alleging lack of jurisdiction on the part of the trial court.
Petitioner asserts that its status as an “innocent bystander” with respect to the labor
dispute between Philtread and the Union entitles it to a writ of injunction from the civil
courts.
Issue: WON petitioner has shown a clear legal right to the issuance of a writ of
injunction under the “innocent bystander” rule.
Held: In Philippine Association of Free Labor Unions (PAFLU) v. Cloribel, this Court,
through Justice J.B.L. Reyes, stated the “innocent bystander” rule as follows:
The right to picket as a means of communicating the facts of a labor dispute is a phase
of the freedom of speech guaranteed by the constitution. If peacefully carried out, it
cannot be curtailed even in the absence of employer-employee relationship.
The right is, however, not an absolute one. While peaceful picketing is entitled to
protection as an exercise of free speech, we believe the courts are not without power
to confine or localize the sphere of communication or the demonstration to the parties
to the labor dispute, including those with related interest, and to insulate
establishments or persons with no industrial connection or having interest totally
foreign to the context of the dispute. Thus the right may be regulated at the instance of
third parties or “innocent bystanders” if it appears that the inevitable result of its
exercise is to create an impression that a labor dispute with which they have no
connection or interest exists between them and the picketing union or constitute an
invasion of their rights.
Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the
court it is entirely different from, without any connection whatsoever to, either party to
the dispute and, therefore, its interests are totally foreign to the context thereof.
In the case at bar, petitioner cannot be said not to have such connection to the
dispute. We find that the “negotiation, contract of sale, and the post transaction”
between Philtread, as vendor, and Siam Tyre, as vendee, reveals a legal relation
between them which, in the interest of petitioner, we cannot ignore. To be sure, the
transaction between Philtread and Siam Tyre, was not a simple sale whereby Philtread
ceased to have any proprietary rights over its sold assets. On the contrary, Philtread
remains as 20% owner of private respondent and 60% owner of Sucat Land
Corporation which was likewise incorporated in accordance with the terms of the
Memorandum of Agreement with Siam Tyre, and which now owns the land were
subject plant is located. This, together with the fact that private respondent uses the
same plant or factory; similar or substantially the same working conditions; same
machinery, tools, and equipment; and manufacture the same products as Philtread,
lead us to safely conclude that private respondent’s personality is so closely linked to
Philtread as to bar its entitlement to an injunctive writ.
Univ. of the Immaculate Conception vs. Sec. of Labor, G.R. No. 178085, Sept 14,
2015
PLDT vs. Manggagawa ng Komunikasyon sa Pilipinas, G.R. No. 161783, July 13,
2005
FACTS: Petitioner Philippine Long Distance Telephone Co., Inc. (PLDT) is a domestic
corporation engaged in the telecommunications business. Private respondent
Manggagawa ng Komunikasyon sa Pilipinas (MKP) is a labor union of rank and file
employees in PLDT.
The members of respondent union learned that a redundancy program would be
implemented by the petitioner. Thereupon it filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB) on 04 November 2002. The Notice
fundamentally contained the following:
UNFAIR LABOR PRACTICES, to wit:
1. PLDT’s abolition of the Provisioning Support Division, in violation of the
duty to
bargain collectively with MKP in good faith.
2. PLDT’s unreasonable refusal to honor its commitment before this
Honorable
Office that it will provide MKP its comprehensive plan/s with respect to personnel
downsizing / reorganization and closure of exchanges. Such refusal violates its duty to
bargain collectively with MKP in good faith.
3. PLDT’s continued hiring of “contractual”, “temporary”, “project” and
“casual”
employees for regular jobs performed by union members, resulting in the decimation of
the union membership and in the denial of the right to self-organization to the
concerned employees.
4. PLDT’s gross violation of the legal and CBA provisions on overtime work
and
compensation.
5. PLDT’s gross violation of the CBA provisions on promotions and job grade
re-
evaluation or reclassification.
On 11 November 2002, another Notice of Strike was filed by the private respondent,
which contained the following: UNFAIR LABOR PRACTICES, to wit: PLDT’s alleged
restructuring of its GMM Operation Services.
A number of conciliation meetings, conducted by the NCMB, National Capital Region,
were held between the parties. However, these efforts proved futile.
On 23 December 2002, the private respondent staged a strike. On 31 December 2002,
three hundred eighty three (383) union members were terminated from service
pursuant to PLDT’s redundancy program.
On 02 January 2003, the Secretary, Patricia Sto. Tomas, issued an Order[4] in NCMB-
NCR-NS-11-405-02 and NCMB-NCR-NS-11-412-02. Portions of the Order are
reproduced hereunder:
xxx Accordingly, the strike staged by the Union is hereby enjoined. All striking workers
are hereby directed to return to work within twenty four (24) hours from receipt of this
Order, except those who were terminated due to redundancy. The employer is hereby
enjoined to accept the striking workers under the same terms and conditions prevailing
prior to the strike. The parties are likewise directed to cease and desist from
committing any act that might worsen the situation. xxx
ISSUE: WHETHER THE SUBJECT ORDERS OF THE SECRETARY OF THE DOLE
EXCLUDING FROM THE RETURN-TO-WORK ORDER THE WORKERS DISMISSED
DUE TO THE REDUNDANCY PROGRAM OF PETITIONER, ARE VALID OR NOT.
RULING: Valid. . . . Assumption of jurisdiction over a labor dispute, or as in this case
the certification of the same to the NLRC for compulsory arbitration, always co-exists
with an order for workers to return to work immediately and for employers to readmit all
workers under the same terms and conditions prevailing before the strike or lockout.
Time and again, this Court has held that when an official bypasses the law on the
asserted ground of attaining a laudable objective, the same will not be maintained if
the intendment or purpose of the law would be defeated.
One last piece. Records would show that the strike occurred on 23 December 2002.
Article 263(g) directs that the employer must readmit all workers under the same terms
and conditions prevailing before the strike. Since the strike was held on the
aforementioned date, then the condition prevailing before it, which was the condition
present on 22 December 2002, must be maintained.
Undoubtedly, on 22 December 2002, the members of the private respondent who were
dismissed due to alleged redundancy were still employed by the petitioner and holding
their respective positions. This is the status quo that must be maintained.
Capitol Medical Center vs. Trajano, G.R. No. 155690, June 30, 2005
FACTS: Petitioner is a hospital with address at Panay Avenue corner Scout
Magbanua Street, Quezon City. Upon the other hand, Respondent is a duly registered
labor union acting as the certified collective bargaining agent of the rank-and-file
employees of petitioner hospital.
Respondent sent petitioner a letter requesting a negotiation of their Collective
Bargaining Agreement (CBA).
Petitioner, however, challenged the union’s legitimacy and refused to bargain with
respondent. Subsequently petitioner filed with the (BLR), Department of Labor and
Employment, a petition for cancellation of respondent’s certificate of registration.
For its part, respondent filed with the (NCMB), National Capital Region, a notice of
strike. Respondent alleged that petitioner’s refusal to bargain constitutes unfair labor
practice. Despite several conferences and efforts of the designated conciliator-
mediator, the parties failed to reach an amicable settlement.
Respondent staged a strike.
Former Labor Secretary Leonardo A. Quisumbing, now Associate Justice of this Court,
issued an Order assuming jurisdiction over the labor dispute and ordering all striking
workers to return to work and the management to resume normal operations, thus:
xxx all striking workers are directed to return to work within twenty-four (24) hours from
the receipt of this Order and the management to resume normal operations and accept
back all striking workers under the same terms and conditions prevailing before the
strike. Further, parties are directed to cease and desist from committing any act that
may
exacerbate the situation.
Moreover, parties are hereby directed to submit within 10 days from receipt of this
Order
proposals and counter-proposals leading to the conclusion of the collective bargaining
agreement in compliance with aforementioned Resolution of the Office as affirmed by
the
Supreme Court. xxx
ISSUE: Whether or not Secretary of Labor cannot exercise his powers under Article
263 (g) of the Labor Code without observing the requirements of due process.
RULING: The discretion to assume jurisdiction may be exercised by the Secretary of
Labor and Employment without the necessity of prior notice or hearing given to any of
the parties. The rationale for his primary assumption of jurisdiction can justifiably rest
on his own consideration of the exigency of the situation in relation to the national
interests.
xxx In labor disputes adversely affecting the continued operation of such hospitals,
clinics or medical institutions, it shall be the duty of the striking union or locking-out
employer to provide and maintain an effective skeletal workforce of medical and other
health personnel, whose movement and services shall be unhampered and
unrestricted, as are necessary to insure the proper and adequate protection of the life
and health of its patients, most especially emergency cases, for the duration of the
strike or lockout. In such cases, therefore, the Secretary of Labor and Employment is
mandated to immediately assume, within twenty-four (24) hours from knowledge of the
occurrence of such a strike or lockout, jurisdiction over the same or certify it to the
Commission for compulsory arbitration. For this purpose, the contending parties are
strictly enjoined to comply with such orders, prohibitions and/or injunctions as are
issued by the Secretary of Labor and Employment or the Commission, under pain of
immediate disciplinary action, including dismissal or loss of employment status or
payment by the locking-out employer of backwages, damages and other affirmative
relief, even criminal prosecution against either or both of them.
The foregoing notwithstanding, the President of the Philippines shall not be precluded
from determining the industries that, in his opinion, are indispensable to the national
interest, and from intervening at any time and assuming jurisdiction over any such
labor dispute in order to settle or terminate the same.xxx
Phimco vs. Brillantes, G.R. No. 120751, March 17, 1999
FACTS: On March 9, 1995, the private respondent, Phimco Industries Labor
Association (PILA), duly certified collective bargaining representative of the daily paid
workers of the petitioner PHIMCO filed a notice of strike with the NCMB against
PHIMCO, a corporation engaged in the production of matches, after a deadlock in the
collective bargaining and negotiation. Parties failed to resolve their differences PILA
(during the conciliation conferences), composed of 352 members, staged a strike.
PHIMCO sent notice of termination to some 47 workers including several union
officers.
Secretary Brillantes assumed jurisdiction over the labor dispute; issued a return-to-
work order.
Hence, petitioner files this petition.
ISSUE: whether or not the public respondent acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in assuming jurisdiction over subject labor
dispute.
HELD: YES, the petition is impressed with merit.
Art. 263, paragraph (g) of the Labor Code, provides:
(g) When, in his opinion, there exist a labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to the national interest, the Secretary of Labor
and Employment may assume jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration . . .
The Labor Code vests in the Secretary of Labor the discretion to determine what
industries are indispensable to the national interest. Accordingly, upon the
determination by the Secretary of Labor that such industry is indispensable to the
national interest, he will assume jurisdiction over the labor dispute in the said industry.
8 This power, however, is not without any limitation.
It stressed in the case of Free telephone Workers Union vs. Honorable Minister of
Labor and Employment, et al., 10 the limitation set by the legislature on the power of
the Secretary of Labor to assume jurisdiction over a labor dispute, thus:
xxx cannot be any clearer, the coverage being limited to “strikes or lockouts adversely
affecting the national interest. 11
In this case at bar, however, the very admission by the public respondent draws the
labor dispute in question out of the ambit of the Secretary’s prerogative, to wit.
While the case at bar appears on its face not to fall within the strict categorization of
cases imbued with “national interest”, this office believes that the obtaining
circumstances warrant the exercise of the powers under Article 263 (g) of the Labor
Code, as amended. 12
The private respondent did not even make any effort to touch on the indispensability of
the match factory to the national interest. It must have been aware that a match
factory, though of value, can scarcely be considered as an industry “indispensable to
the national interest” as it cannot be in the same category as “generation and
distribution of energy, or those undertaken by banks, hospitals, and export-oriented
industries.” 13 Yet, the public respondent assumed jurisdiction thereover.
To uphold the action of the public respondent under the premises would be stretching
too far the power of the Secretary of Labor as every case of a strike or lockout where
there are inconveniences in the community, or work disruptions in an industry though
not indispensable to the national interest, would then come within the Secretary’s
power. It would be practically allowing the Secretary of Labor to intervene in any Labor
dispute at his pleasure.
This is precisely why the law sets and defines the standard: even in the exercise of his
power of compulsory arbitration under Article 263 (g) of the Labor Code, the Secretary
must follow the law.
FEU-NRMF vs FEU-NRMF Employees Association, G.R. No. 168362, October 12,
2006
FACTS: In 1994, petitioner FEU-NRMF (a medical institution organized and existing
under the Philippine laws), and respondent union (a legitimate labor organization and
is the duly recognized representative of the rank and file employees of petitioner),
entered into a CBA that will expire on 30 April 1996. In view of the forthcoming expiry,
respondent union sent a letter-proposal to petitioner FEU-NRMF stating their economic
and non-economic proposals for the negotiation of the new CBA.
Petitioner FEU-NRMF rejected respondent union’s demands and proposed to maintain
the same provisions of the old CBA reasoning that due to financial constraints, it
cannot afford to accede to a number of their demands. In an effort to arrive at a
compromise, subsequent conciliation proceedings were conducted before the NCMB,
but the negotiation failed.
Respondent union filed a Notice of Strike before NCMB on the ground of bargaining
deadlock. Union staged a strike.
Petitioner FEU-NRMF filed a Petition for the Assumption of Jurisdiction or for
Certification of Labor Dispute with the NLRC, underscoring the fact that it is a medical
institution engaged in the business of providing health care for its patients. Secretary
of Labor granted the petition and an Order assuming jurisdiction over the labor dispute
was issued, thereby prohibiting any strike or lockout and enjoining the parties from
committing any acts which may exacerbate the situation.
On September 6, 1996, Francisco Escuadra, the NLRC process server, certified that,
on September 5, 1996 at around 4:00 P.M., he attempted to serve a copy of the
Assumption of Jurisdiction Order (AJO) to the union officers but since no one was
around at the strike area, he just posted copies of the said Order at several
conspicuous places within the premises of the hospital.
Striking employees continued holding a strike until 12 September 1996, claiming that
they had no knowledge that the Secretary of Labor already assumed jurisdiction over
the pending labor dispute as they were not able to receive a copy of the AJO.
The Secretary of Labor issued another Order directing all the striking employees to
return to work and the petitioner FEU-NRMF to accept them under the same terms and
conditions prevailing before the strike. A Return to Work Agreement was executed by
the disputing parties. Subsequently, petitioner FEU-NRMF filed a case before the
NLRC, contending that respondent union staged the strike in defiance of the AJO,
hence, it was illegal. LA declared the strike illegal and allowed dismissal of union
officers for conducting the strike in defiance of the AJO. Respondent union filed an
Appeal before the NLRC. NLRC affirmed in toto the Decision of the LA. Respondent
union filed MR, it was denied. Respondent union brought a Petition for Certiorari
before CA. CA granted the Petition and reversed the Resolutions of NLRC. Petitioner
filed MR but it was denied. Hence this petition.
ISSUE: Whether the service of the AJO was validly effected by the process server so
as to bind the respondent union and hold them liable for the acts committed
subsequent to the issuance of the said Order.
RULING: No. The process server resorted to posting the Order when personal service
was rendered impossible since the striking employees were not present at the strike
area. This mode of service, however, is not sanctioned by either the NLRC Revised
Rules of Procedure or the Revised Rules of Court.
The pertinent provisions of the NLRC Revised Rules of Procedure read:
“Section 6. Service of Notices and Resolutions.
(a) Notices or summons and copies of orders, shall be served on the parties to the
case personally by the Bailiff or duly authorized public officer within 3 days from receipt
thereof or by registered mail; Provided that in special circumstances, service of
summons may be effected in accordance with the pertinent provisions of the Rules of
Court; Provided further, that in cases of decisions and final awards, copies thereof
shall be served on both parties and their counsel or representative by registered mail;
Provided further, that in cases where a party to a case or his counsel on record
personally seeks service of the decision upon inquiry thereon, service to said party
shall be deemed effected upon actual receipt thereof; Provided finally, that where
parties are so numerous, service shall be made on counsel and upon such number of
complainants, as may be practicable, which shall be considered substantial
compliance with Article 224(a) of the Labor Code, as amended.”
An Order issued by the Secretary of Labor assuming jurisdiction over the labor dispute
is not a final judgment for it does not dispose of the labor dispute with finality.
Consequently, the rule on service of summons and orders, and not the proviso on
service of decisions and final awards, governs the service of the Assumption of
Jurisdiction Order.
Under the NLRC Revised Rules of Procedure, service of copies of orders should be
made by the process server either personally or through registered mail. However, due
to the urgent nature of the AJO and the public policy underlying the injunction carried
by the issuance of the said Order, service of copies of the same should be made in the
most expeditious and effective manner, without any delay, ensuring its immediate
receipt by the intended parties as may be warranted under the circumstances. Thus,
personal service is the proper mode of serving the AJO.
Personal service effectively ensures that the notice desired under the constitutional
requirement of due process is accomplished. If, however, efforts to find the party
concerned personally would make prompt service impossible, service may be
completed by substituted service, that is, by leaving a copy, between the hours of eight
in the morning and six in the evening, at the party’s or counsel’s residence, if known,
with a person of sufficient age and
discretion then residing therein (RULE 12 of Rev Rules of Court).
Substituted service derogates the regular method of personal service. It is therefore
required that statutory restrictions for effecting substituted service must be strictly,
faithfully and fully observed. Failure to comply with this rule renders absolutely void the
substituted service along with the proceedings taken thereafter. The underlying
principle of this rigid requirement is that the person, to whom the orders, notices or
summons are addressed, is made to answer for the consequences of the suit even
though notice of such action is made, not upon the party concerned, but upon another
whom the law could only presume would notify such party of the pending proceedings.
In the case at bar, presumption of receipt of the copies of the Assumption of
Jurisdiction Order AJO could not be taken for granted considering the adverse effect in
case the parties failed to heed to the injunction directed by such Order. Defiance of the
assumption and return-to-work orders of the Secretary of Labor after he has assumed
jurisdiction is a valid ground for the loss of employment status of any striking union
officer or member. Employment is a property right of which one cannot be deprived of
without due process. Due process here would demand that the respondent union be
properly notified of the Assumption of Jurisdiction Order of the Secretary of Labor
enjoining the strike and requiring its members to return to work. Thus, there must be a
clear and unmistakable proof that the requirements prescribed by the Rules in the
manner of effecting personal or substituted service had been faithfully complied with.
Merely posting copies of the AJO does not satisfy the rigid requirement for proper
service outlined by the above stated rules. Needless to say, the manner of service
made by the process server was invalid and irregular. Respondent union could not
therefore be adjudged to have defied the said Order since it was not properly apprised
thereof. Accordingly, the strike conducted by the respondent union was valid under the
circumstances.
Union of Filipro Employees vs. NLRC, G.R. No. 91025, December 19, 1990
FACTS: On June 22, 1988, the petitioner Union of the Filipro Employees, the sole and
exclusive bargaining agent of all rank-and-file employees of Nestle Philippines, (private
respondent) filed a Notice of Strike at the DOLE raising the issues of CBA deadlock
and unfair labor practice. Private respondent assailed the legal personality of the
proponents of the said notice of strike to represent the Nestle employees, before the
NCMB. This notwithstanding, the NCMB proceeded to invite the parties to attend the
conciliation meetings and to which private respondent failed to attend contending that
it will deal only with a negotiating panel duly constituted and mandated in accordance
with the UFE Constitution and By-laws. Thereafter, Company terminated from
employment all UFE Union officers, and all the members of the negotiating panel for
instigating and knowingly participating in a strike staged at the Makati, Alabang,
Cabuyao and Cagayan de Oro on September 11, 1987 without any notice of strike
filed and a strike vote obtained for the purpose. The union filed a complaint for illegal
dismissal. LA upheld the validity of the dismissal; NLRC en banc affirmed.
Subsequently, company concluded separate CBAs with the general membership of
the union at Cebu/Davao and Cagayan de Oro units; Assailing the validity of these
agreements, the union filed a case of ULP against the company with the NLRC-NCR
Arbitration Branch Efforts to resolve the dispute amicably were taken by the NCMB but
yielded negative result. Petitioner filed a motion asking the Secretary of Labor to
assume jurisdiction over the dispute of deadlock in collective bargaining between the
parties. On October 28, 1988, Labor Secretary Franklin Drilon “certified” to the NLRC
the said dispute between the UFE and Nestle, Philippines.. which reads as follows: xxx
“The NLRC is further directed to call all the parties immediately and resolve the CBA
deadlock within twenty (20) days from submission of the case for resolution.” Second
Division of the NLRC promulgated a resolution granting wage increase and other
benefits to Nestle’s employees, ruling on non-economic issues, as well as absolving
the private respondent of the Unfair Labor Practice charge. Petitioner finds said
resolution to be inadequate and accordingly, does not agree therewith. It filed a motion
for reconsideration, denied. Hence, this petition.
ISSUE: WON WHETHER OR NOT THE SECOND DIVISION OF THE NLRC ACTED
WITHOUT JURISDICTION IN RENDERING THE ASSAILED RESOLUTION, THE
SAME BEING RENDERED ONLY BY A DIVISION OF THE PUBLIC RESPONDENT
AND NOT BY EN BANC;
HELD: This case was certified on October 28, 1988 when existing rules prescribed
that, it is incumbent upon the Commission en banc to decide or resolve a certified
dispute. However, R.A. 6715 took effect during the pendency of this case. Aside from
vesting upon each division the power to adjudicate cases filed before the Commission,
said Act further provides that the divisions of the Commission shall have exclusive
appellate jurisdiction over cases within their respective territorial jurisdiction. Section 5
of RA 6715 provides as follows: xxxx The Commission may sit en banc or in five (5)
divisions, each composed of three (3) members. The Commission shall sit en banc
only for purposes of promulgating rules and regulations governing the hearing and
disposition of cases before any of its divisions and regional branches and formulating
policies affecting its administration and operations. The Commission shall exercise its
adjudicatory and all other powers, functions and duties through its divisions. xxxx In
view of the enactment of Republic Act 6715, the aforementioned rules requiring the
Commission en banc to decide or resolve a certified dispute have accordingly been
repealed. Confirmed in Administrative Order No. 36 (Series of 1989) promulgated by
the Secretary under his delegated rule-making power. Moreover, it is to be
emphasized and it is a matter of judicial notice that since the effectivity of R.A. 6715,
many cases have already been decided by the 5 divisions of the NLRC. We find no
legal justification in entertaining petitioner’s claim considering that the clear intent of
the amendatory provision is to expedite the disposition of labor cases filed before the
Commission. To rule otherwise would not be congruous to the proper administration of
justice. ACCORDINGLY, PREMISES CONSIDERED, the petition is DISMISSED. The
Resolutions of the NLRC, dated June 5, 1989 and August 8, 1989 are AFFIRMED,
except insofar as the ruling absolving the private respondent of unfair labor practice
which is declared SET ASIDE.
OWWA vs. Chavez, G.R. No. 169802, June 8, 2007
FACTS: OWWA traces its beginnings to 1 May 1977, when the Welfare and Training
Fund for Overseas main objective, inter alia, of providing social and welfare services to
OFW, including insurance coverage, social work, legal and placement assistance,
cultural and remittances services, and the like.
On 1 May 1980, PD 1694 was signed into law, formalizing the operations of a
comprehensive Welfare Fund (Welfund), as authorized and created under Letter of
Instructions No. 537. On 16 January 1981, PD 1809 was promulgated, amending
certain provisions of PD 1694. Subsequently, EO 126 was passed renaming the
Welfare Fund as the OWWA. On January 9, 2004, as there was yet no formal OWWA
structure duly approved by the DBM and CSC, the OWWA Board of Trustees passed
Resolution No. 001, Series of 2004, depicting the organizational structure and staffing
pattern of the OWWA.
On March 24, 2004, DBM Secretary Emilia T. Boncodin approved the organizational
structure and staffing pattern of the OWWA. In her approval thereof, she stated that
the total funding requirements for the revised organizational structure shall be
P107,546,379 for 400 positions. On May 31, 2004, an advisory was given to the
officials and employees of the OWWA that the DBM had recently approved OWWA’s
also placement staffing pattern.
On June 3, 2004, DOLE Secretary Sto. Tomas issued Administrative Order No. 171
creating a Placement Committee to evaluate qualifications of employees, and to
recommend their appropriate placement in the new organizational chart, functional
statements and staffing pattern of the OWWA.
On June 18, 2004, DOLE Acting Secretary Imson issued Administrative Order No.
186, Series of 2004, prescribing the guidelines on the placement of personnel in the
new staffing pattern of the OWWA. Herein respondents filed a complaint to nullify the
organizational structure with Prayer for the Issuance of a Writ of Preliminary Injunction
against petitioner OWWA and its Board of Trustees. According to the respondents, the
resulting decrease in the number of employees due to Organizational Structure will
result in the constructive dismissal of at least 110 employees. Meanwhile, the
deployment of the regular central office personnel to the regional offices will displace
the said employees, as well as their families. Respondents challenged the validity of
the new organizational structure of the OWWA. In fine, they contended that the same
is null and void; hence, its implementation should be prohibited.
RTC granted respondents’ prayer for a writ of preliminary injunction. Petitioner, thru
OSG and the RTC to restrain, for the meantime, the implementation of OWWA’s
reorganization to prevent injury until after the main case is heard and decided.
Petitioner, thru OSG filed the instant petition.
ISSUE: Whether CA erred in affirming the RTC in its grant of the assailed writ of
preliminary injunction.
RULING: No. Section 1, Rule 58 of the Rules of Court, defines a preliminary injunction
as an order granted at any stage of an action prior to the judgment or final order
requiring a party or a court, an agency or a person to refrain from a particular act or
acts. It persists until it is dissolved or until the termination of the action without the
court issuing a final injunction. To be entitled to an injunctive writ, and an urgent and
paramount necessity for the writ to prevent serious damage. A writ of evidence
required to justify the issuance of a writ of preliminary injunction in the hearing thereon
need not be conclusive or complete.
Preliminary injunction is merely a provisional remedy, an adjunct to the main case
subject to the latter’s outcome, the sole objective of which is to preserve the status quo
until the trial court hears fully the merits of the case. The status quo usually preserved
by a preliminary injunction is the last actual, peaceable and uncontested status which
preceded the actual controversy. The status quo ante litem is the state of affairs which
is existing at the time of the filing of the case. The trial court must not make use of its
injunctive power to alter such status. In the case at bar, the RTC did not maintain the
status quo when it issued the writ of preliminary injunction. Rather, it effectively
restored the situation prior to the status quo, in effect, disposing the issue of the main
case without trial on the merits. What was preserved by the RTC was the state
OWWA, and the subsequent administrative orders pursuant to its passing. The RTC
forgot that what is imperative in preliminary injunction cases is that the writ cannot be
effectuated to establish new relations between the parties.
Courts should avoid issuing a writ of preliminary injunction which would in effect
dispose of the main case without trial. In this case, the RTC also did not maintain the
status quo but restored the landscape before the implementation of OWWA’s
reorganization. In thus issuing by the trial court. What was done by the RTC was
quite simply a disposition of the case without trial. Furthermore, we find that the RTC
similarly prejudged the validity of the issuances released by the OWWA Board of
Trustees, as well as the other governmental bodies, which approved the organizational
structure and staffing pattern of the OWWA. This Court is not convinced that
respondents were able to show a clear and unmistakable legal right to warrant their
entitlement to the writ. A mere blanket allegation that they are all officers and
employees of the OWWA without a showing of how they stand to be directly injured a
right in esse. There was no showing that Respondents are the employees who are in
grave danger of being displaced due to the reorganization. Injunction is not a remedy
to protect or enforce contingent, abstract, or future rights; it will not issue to protect
aright not in esse and which may never arise, or to restrain an action which did not
give rise to a cause of action. Indeed, the question as to the validity of the OWWA
reorganization remains the subject in the main case pending before the trial court. Its
annulment is outside the realm of the instant Petition.
Univ. of the Immaculate Conception vs. Sec. of Labor, G.R. Nos. 151379, Jan 14,
2005
Facts: This case stemmed from the collective bargaining negotiations between
petitioner University of Immaculate Concepcion, Inc. (UNIVERSITY) and respondent
The UIC Teaching and Non- Teaching Personnel and Employees Union (UNION). The
UNION, as the certified bargaining agent of all rank and file employees of the
UNIVERSITY, submitted its collective bargaining proposals to the latter on February
16, 1994. However, one item was left unresolved and this was the inclusion or
exclusion of some positions in the scope of the bargaining unit.
The UNION it filed a notice of strike on the grounds of bargaining deadlock and ULP.
During the thirty (30) day cooling-off period, two union members were dismissed by
petitioner. Consequently, the UNION went on strike.
On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor, issued
an Order assuming jurisdiction over the labor dispute.
On March 10, 1995, the UNION filed another notice of strike, this time citing as a
reason the UNIVERSITY’s termination of the individual respondents. The UNION
alleged that the UNIVERSITY’s act of terminating the individual respondents is in
violation of the Order of the Secretary of Labor.
On March 28, 1995, the Secretary of Labor issued another Order reiterating the
directives contained in the January 23, 1995 Order. Hence, the UNIVERSITY was
directed to reinstate the individual respondents under the same terms and conditions
prevailing prior to the labor dispute.
The UNIVERSITY filed a MR. In the Order dated August 18, 1995, then Acting
Secretary Jose S. Brilliantes denied the MR, but modified the two previous Orders by
adding:
Anent the Union’s Motion, we find that superseding circumstances would not warrant
the physical reinstatement of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement until the validity of
their termination is finally resolved.
Issue: WON payroll reinstatement, instead of actual reinstatement, is proper.
Held: With respect to the Secretary’s Order allowing payroll reinstatement instead of
actual reinstatement for the individual respondents herein, an amendment to the
previous Orders issued by her office, the same is usually not allowed. Article 263(g) of
the Labor Code aforementioned states that all workers must immediately return to
work and all employers must readmit all of them under the same terms and conditions
prevailing before the strike or lockout. The phrase “under the same terms and
conditions” makes it clear that the norm is actual reinstatement. This is consistent with
the idea that any work stoppage or slowdown in that particular industry can be
detrimental to the national interest.
In ordering payroll reinstatement in lieu of actual reinstatement, then Acting Secretary
of Labor Jose S. Brillantes said:
Anent the Union’s Motion, we find that superseding circumstances would not warrant
the physical reinstatement of the twelve (12) terminated employees. Hence, they are
hereby ordered placed under payroll reinstatement until the validity of their termination
is finally resolved.
As an exception to the rule, payroll reinstatement must rest on special circumstances
that render actual reinstatement impracticable or otherwise not conducive to attaining
the purposes of the law.
The “superseding circumstances” mentioned by the Acting Secretary of Labor no
doubt refer to the final decision of the panel of arbitrators as to the confidential nature
of the positions of the twelve private respondents, thereby rendering their actual and
physical reinstatement impracticable and more likely to exacerbate the situation. The
payroll reinstatement in lieu of actual reinstatement ordered in these cases, therefore,
appears justified as an exception to the rule until the validity of their termination is
finally resolved. This Court sees no grave abuse of discretion on the part of the Acting
Secretary of Labor in ordering the same. Furthermore, the issue has not been raised
by any party in this case.
Manila Diamond Hotel Employees’ Union vs CA, G.R.No. 140518, December 16,
2004
Facts: The Union filed a petition for a certification election, which was dismissed by
the DOLE. Despite the dismissal of their petition, the Union sent a letter to the Hotel
informing the latter of its desire to negotiate for a collective bargaining agreement. The
Hotel, however, refused to negotiate with the Union, citing the earlier dismissal of the
Union’s petition for certification by DOLE.
Failing to settle the issue, the Union staged a strike against the Hotel. Numerous
confrontations followed, further straining the relationship between the Union and the
Hotel. The Hotel claims that the strike was illegal and dismissed some employees for
their participation in the allegedly illegal concerted activity. The Union, on the other
hand, accused the Hotel of illegally dismissing the workers.
A Petition for Assumption of Jurisdiction under Article 263(g) of the Labor Code was
later filed by the Union before the Secretary of Labor. Thereafter, Secretary of Labor
Trajano issued an Order directing the striking officers and members of the Union to
return to work within twenty-four (24) hours and the Hotel to accept them back under
the same terms and conditions prevailing prior to the strike.
After receiving the above order the members of the Union reported for work, but the
Hotel refused to accept them and instead filed a Motion for Reconsideration of the
Secretary’s Order.
Acting on the motion for reconsideration, then Acting Secretary of Labor Español
modified the one earlier issued by Secretary Trajano and instead directed that the
strikers be reinstated only in the payroll.
Issue: WON payroll reinstatement is proper in lieu of actual reinstatement under
Article 263(g) of the Labor Code.
Held: Payroll reinstatement in lieu of actual reinstatement is not sanctioned under the
provision of the said article.
The Court noted the difference between UST vs. NLRC and the instant case. In UST
case the teachers could not be given back their academic assignments since the order
of the Secretary for them to return to work was given in the middle of the first semester
of the academic year.
The NLRC was, therefore, faced with a situation where the striking teachers were
entitled to a return to work order, but the university could not immediately reinstate
them since it would be impracticable and detrimental to the students to change
teachers at that point in time.
In the present case, there is no similar compelling reason that called for payroll
reinstatement as an alternative remedy. A strained relationship between the striking
employees and management is no reason for payroll reinstatement in lieu of actual
reinstatement.
Under Article 263(g), all workers must immediately return to work and all employers
must readmit all of them under the same terms and conditions prevailing before the
strike or lockout.
The Court pointed out that the law uses the precise phrase of “under the same terms
and conditions,” revealing that it contemplates only actual reinstatement. This is in
keeping with the rationale that any work stoppage or slowdown in that particular
industry can be inimical to the national economy.
The Court reiterates that Article 263(g) was not written to protect labor from the
excesses of management, nor was it written to ease management from expenses,
which it normally incurs during a work stoppage or slowdown. This law was written as
a means to be used by the State to protect itself from an emergency or crisis. It is not
for labor, nor is it for management.
Portillo vs. Rudolf Lietz, G.R. No. 196539, October 10, 2012
Pacific Consultants vs. Schonfeld, G.R. No. 166920, February 19, 2007
Balite vs. SS Ventures International, Inc, G.R. No. 195109, February 4, 2015
SMART Comm vs. Solidum, G.R. Nos. 197763/197836, December 7, 2015
Milan vs. NLRC, G.R. No. 202961, February 4, 2015
Michelin Asia Application Center, Inc. vs Ortiz, G.R. No. 189861, November 19,
2014
Baronda vs. Court of Appeals, G.R. No. 161006, October 14, 2015
Montero vs. Times Transportation, G.R. No. 190828, March 16, 2015
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