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Labor Law Reviewer

Labor Law Reviewer


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Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work and all other terms and any grievances
or questions arising under such agreement and executing a contract incorporating such agreements if
requested by either party, but such duty does not compel any party to agree to a proposal or to make
any concession. (Article 252 of the Labor Code)
Collective bargaining which is defined as negotiations towards a collective agreement, is one of the
democratic frameworks under the New Labor Code, designed to stabilize the relation between labor
and management and to create a climate of sound and stable industrial peace. It is a mutual
responsibility of the employer and the Union and is characterized as a legal obligation. So much so that
Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse "to
meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement
with respect to wages, hours of work, and all other terms and conditions of employment including
proposals for adjusting any grievance or question arising under such an agreement and executing a
contract incorporating such agreement, if requested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any
legal duty to initiate contract negotiation. The mechanics of collective bargaining is set in motion only
when the following jurisdictional preconditions are present, namely, (1) possession of the status of
majority representation of the employees' representative in accordance with any of the means of
selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a
demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions are
undisputedly present in the instant case.




The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU)
vs. Herald Publications the rule had been laid down that "unfair labor practice is committed when it is
shown that the respondent employer, after having been served with a written bargaining proposal by
the petitioning Union, did not even bother to submit an answer or reply to the said proposal. This
doctrine was reiterated anew in Bradman vs. CIR wherein it was further ruled that "while the law does
not compel the parties to reach an agreement, it does contemplate that both parties will approach the
negotiation with an open mind and make a reasonable effort to reach a common ground of agreement.

(Kiok Loy vs. NLRC [G.R. No. L-54334, 22 January 1986])
It is essential to the right of a putative bargaining agent to represent the employees that it be the
delegate of a majority of the employees and, conversely, an employer is under duty to bargain
collectively only when the bargaining agent is representative of the majority of the employees. A natural
consequence of these principles is that the employer has the right to demand of the asserted
bargaining agent proof of its representation of its employees. Having the right to demonstration of this
fact, it is not an 'unfair labor practice' for an employer to refuse to negotiate until the asserted
bargaining agent has presented reasonable proof of majority representation. It is necessary however,
that such demand be made in good faith and not merely as a pretext or device for delay or evasion.
The employer's right is however to reasonable proof. ...
... Although an employer has the undoubted right to bargain with a bargaining agent whose
authority has been established, without the requirement that the bargaining agent be officially certified
by the NLRB as such, if the informally presented evidence leaves a real doubt as to the issue, the
employer has a right to demand a certification and to refuse to negotiate until such official certification is

(LAKAS vs. Marcelo Enterprises [G.R. No. L-38258, 19 November 1982] citing Rothenberg)
We hold that there existed no duty to bargain collectively with the complainant LAKAS on the part of
said companies. And proceeding from this basis, it follows that all acts instigated by complainant
LAKAS such as the filing of the Notice of strike on June 13, 1967 (although later withdrawn) and the
'two strikes of September 4, 1967 and November 7, 1967 were calculated , designed and intended to
compel the respondent Marcelo Companies to recognize or bargain with it notwithstanding that it was
an uncertified union, or in the case of respondent Marcelo Tire and Rubber Corporation, to bargain with
it despite the fact that the MUEWA of Paulino Lazaro vas already certified as the sole bargaining agent
in said respondent company. These concerted activities executed and carried into effect at the
instigation and motivation of LAKAS ire all illegal and violative of the employer's basic right to bargain
collectively only with the representative supported by the majority of its employees in each of the
bargaining units. This Court is not unaware of the present predicament of the employees involved but
much as We sympathize with those who have been misled and so lost their jobs through hasty, ill-
advised and precipitate moves, We rule that the facts neither substantiate nor support the finding that
the respondent Marcelo Companies are guilty of unfair labor practice. (LAKAS vs. Marcelo Enterprises
[G.R. No. L-38258, 19 November 1982])
[I]n a situation like this where the issue of legitimate representation in dispute is viewed for not only
by one legitimate labor organization but two or more, there is every equitable ground warranting the
holding of a certification election. In this way, the issue as to who is really the true bargaining
representative of all the employees may be firmly settled by the simple expedient of an election.
(PAFLU vs. The Bureau of Labor Relations [69 SCRA 132])

The inference that respondents did not refuse to bargain collectively with the complaining union
because they accepted some of the demands while they refused the others even leaving open other
demands for future discussion is correct, especially so when those demands were discussed at a
meeting called by respondents themselves precisely in view of the letter sent by the union on April 29,
1960. It is true that under Section 14 of Republic Act 875 whenever a party serves a written notice
upon the employer making some demands the latter shall reply thereto not later than 10 days from
receipt thereof, but this rendition is merely procedural and as such its non-compliance cannot be
deemed to be an act of unfair labor practice. The fact is that respondents did not ignore the letter sent
by the union so much so that they called a meeting to discuss its demands, as already stated
elsewhere. (National Union of Restaurant Workers vs. CIR [G.R. No. L-20044, 30 April 1964])

Duration of a CBA

Art. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining

Agreement. All other provisions of the Collective Bargaining Agreement shall be
renegotiated not later than three (3) years after its execution. Any agreement on such other
provisions of the Collective Bargaining Agreement entered into within six (6) months from
the date of expiry of the term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If any such agreement
is entered into beyond six months, the parties shall agree on the duration of retroactivity
thereof. In case of a deadlock in the renegotiation of the collective bargaining agreement,
the parties may exercise their rights under this Code.

Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act No. 6715 (the
Herrera-Veloso Law) which took effect on March 21, 1989. This new provision states that the CBA has
a term of five (5) years instead of three years, before the amendment of the law as far as the
representation aspect is concerned. All other provisions of the CBA shall be negotiated not later than
three (3) years after its execution. The "representation aspect" refers to the identity and majority status
of the union that negotiated the CBA as the exclusive bargaining representative of the appropriate
bargaining unit concerned. "All other provisions" simply refers to the rest of the CBA, economic as well
as non-economic provisions, except representation.


From the aforesaid discussions, the legislators were more inclined to have the period of effectivity
for three (3) years insofar as the economic as well as non-economic provisions are concerned, except

Obviously, the framers of the law wanted to maintain industrial peace and stability by having both
management and labor work harmoniously together without any disturbance. Thus, no outside union
can enter the establishment within five (5) years and challenge the status of the incumbent union as the
exclusive bargaining agent. Likewise, the terms and conditions of employment (economic and non-
economic) cannot be questioned by the employers or employees during the period of effectivity of the
CBA. The CBA is a contract between the parties and the parties must respect the terms and conditions
of the agreement. Notably, the framers of the law did not give a fixed term as to the effectivity of the
terms and conditions of employment. It can be gleaned from their discussions that it was left to the
parties to fix the period.
(SMC vs. Confesor [G.R. No. 111262, 19 September 1996])

The signing of the CBA is not determinative of the question whether "the agreement was entered
into within six months from the date of expiry of the term of such other provisions as fixed in such
collective bargaining agreement" within the contemplation of Art. 253-A.
As already stated, on November 12, 1992, the Union sent the Company a notice of deadlock in
view of their inability to reconcile their positions on the main issues, particularly on wages. The Union
filed a notice of strike. However, on December 18, 1992, in a conference called by the NCMB, the
Union and the Company agreed on a number of provisions of the CBA, including the provision on wage
increase, leaving only the issue of retirement to be threshed out. In time, this, too, was settled, so that
in his record of the January 14, 1993 conference, the Med-Arbiter noted that "the issues raised by the
notice of strike had been settled and said notice is thus terminated." It would therefore seem that at that
point, there was already a meeting of the minds of the parties, which was before the February 1993 end of
the six-month period provided in Art. 253-A.

The fact that no agreement was then signed is of no moment. Art. 253-A refers merely to an
"agreement" which, according to Black's Law Dictionary is "a coming together of minds; the coming
together in accord of two minds on a given proposition." This is similar to Art. 1305 of the Civil Code's
definition of "contract" as "a meeting of minds between two persons."
The two terms, "agreement" and "contract," are indeed similar, although the former is broader than
the latter because an agreement may not have all the elements of a contract. As in the case of
contracts, however, agreements may be oral or written. Hence, even without any written evidence of
the CBA made by the parties, a valid agreement existed in this case from the moment the minds of the
parties met on all matters they set out to discuss.
(Mindanao Terminal & Brokerage vs. Roldan-Confessor [G.R. No. 111809, 05May 1997])
The Court in the January 27, 1999 Decision, stated that the CBA shall be "effective for a period of 2
years counted from December 28, 1996 up to December 27, 1999." Parenthetically, this actually covers

a three-year period. Labor laws are silent as to when an arbitral award in a labor dispute where the
Secretary had assumed jurisdiction by virtue of Article 263 (g) of the Labor Code shall retroact. In
general, a CBA negotiated within six months after the expiration of the existing CBA retroacts to the day
immediately following such date and if agreed thereafter, the effectivity depends on the agreement of
the parties. On the other hand, the law is silent as to the retroactivity of a CBA arbitral award or that
granted not by virtue of the mutual agreement of the parties but by intervention of the government.
Despite the silence of the law, the Court rules herein that CBA arbitral awards granted after six months
from the expiration of the last CBA shall retroact to such time agreed upon by both employer and the
employees or their union. Absent such an agreement as to retroactivity, the award shall retroact to the
first day after the six-month period following the expiration of the last day of the CBA should there be
one. In the absence of a CBA, the Secretary's determination of the date of retroactivity as part of his
discretionary powers over arbitral awards shall control.
It is true that an arbitral award cannot per se be categorized as an agreement voluntarily entered
into by the parties because it requires the interference and imposing power of the State thru the
Secretary of Labor when he assumes jurisdiction. However, the arbitral award can be considered as an
approximation of a collective bargaining agreement which would otherwise have been entered into by
the parties. The terms or periods set forth in Article 253-A pertains explicitly to a CBA. But there is
nothing that would prevent its application by analogy to an arbitral award by the Secretary considering
the absence of an applicable law. Under Article 253-A: "(I)f any such agreement is entered into beyond
six months, the parties shall agree on the duration of retroactivity thereof." In other words, the law
contemplates retroactivity whether the agreement be entered into before or after the said six-month
period. The agreement of the parties need not be categorically stated for their acts may be considered
in determining the duration of retroactivity. In this connection, the Court considers the letter of
petitioner's Chairman of the Board and its President addressed to their stockholders, which states that
the CBA "for the rank-and-file employees covering the period December 1, 1995 to November 30, 1997
is still with the Supreme Court," as indicative of petitioner's recognition that the CBA award covers the
said period. Earlier, petitioner's negotiating panel transmitted to the Union a copy of its proposed CBA
covering the same period inclusive. In addition, petitioner does not dispute the allegation that in the
past CBA arbitral awards, the Secretary granted retroactivity commencing from the period immediately
following the last day of the expired CBA. Thus, by petitioner's own actions, the Court sees no reason
to retroact the subject CBA awards to a different date. The period is herein set at two (2) years from
December 1, 1995 to November 30, 1997.
(MERALCO vs. Quisumbing [G.R. No. 127598, 22 February 2000])

Effect of Failure to Bargain Collectively

A thorough study of the records reveals that there was no "reasonable effort at good faith
bargaining" specially on the part of the University. Its indifferent towards collective bargaining inevitably
resulted in the failure of the parties to arrive at an agreement. As it was evident that unilateral moves
were being undertaken only by the DWUEU-ALU, there was no "'counteraction" of forces or an impasse
to speak of. While collective bargaining should be initiated by the union, there is a corresponding
responsibility on the part of the employer to respond in some manner to such acts. This is a clear from
the provisions of the Labor Code Art 250(a) of which states:




Hence, petitioner's contention that the DWUEU-ALU's proposals may not be unilaterally imposed on
it on the ground that a collective bargaining agreement is a contract wherein the consent of both parties
is indispensable is devoid of merit. A similar argument had already been disregarded in the case of Kiok
Loy v. NLRC, where we upheld the order of the NLRC declaring the unions draft CBA proposal as the
collective agreement which should govern the relationship between the parties. Kiok Loy v. NLRC is
applicable in the instant case considering that the fact therein have also been indubitably established in
this case. These factors are: (a) the union is the duly certified bargaining agent; (b) it made a definite
request to bargain submitted its collective bargaining proposals, and (c) the University made no further
proposal whatsoever. As we said in Kiok Loy v. NLRC, [a] company's refusal to make counter proposal
if considered in relation to the entire bargaining process, may indicate bad faith and this is especially
true where the Union's request for a counter proposal is left unanswered." Moreover, the Court added in
the same case that "it is not obligatory upon either side of a labor controversy to precipitately accept or
agree to the proposal of the other. But an erring party should not be tolerated and allowed with impunity
to resort to schemes feigning negotiations by going through empty gestures."

(Divine Word University of Tacloban vs. Secretary [G. R. No. 91915, 11 September 1992])

Any provision in the CBA is deemed to be a bilateral agreement, hence subject to negotiation

The company's contention that its retirement plan is non-negotiable, is not well-taken. The NLRC
correctly observed that the inclusion of the retirement plan in the collective bargaining agreement as
part of the package of economic benefits extended by the company to its employees to provide them a
measure of financial security after they shall have ceased to be employed in the company, reward their
loyalty, boost their morale and efficiency and promote industrial peace, gives "A CONSENSUAL
CHARACTER" to the plan so that it may not be terminated or modified at will by either party (Nestle
Phil., Inc. vs. NLRC [G.R. No. 91231, 04 February 1991]

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