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GENERAL MILLING CORPORATION, petitioner, vs. HON.

COURT OF APPEALS, GENERAL MILLING CORPORATION INDEPENDENT LABOR UNION (GMC-


ILU), and RITO MANGUBAT, respondents. [G.R. No. 146728. February 11, 2004]

Before us is a petition for certiorari assailing the decision[1] dated July 19, 2000, of the Court of Appeals in CA-G.R. SP No. 50383, which earlier
reversed the decision[2] dated January 30, 1998 of the National Labor Relations Commission (NLRC) in NLRC Case No. V-0112-94.

The antecedent facts are as follows:

In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling Corporation (GMC) employed 190 workers. They
were all members of private respondent General Milling Corporation Independent Labor Union (union, for brevity), a duly certified bargaining
agent.
On April 28, 1989, GMC and the union concluded a collective bargaining agreement (CBA) which included the issue of representation
effective for a term of three years. The CBA was effective for three years retroactive to December 1, 1988. Hence, it would expire on November 30,
1991.
On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request that a counter-
proposal be submitted within ten (10) days.
As early as October 1991, however, GMC had received collective and individual letters from workers who stated that they had withdrawn
from their union membership, on grounds of religious affiliation and personal differences. Believing that the union no longer had standing to
negotiate a CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and Victor Lastimoso. The letter stated that it felt
there was no basis to negotiate with a union which no longer existed, but that management was nonetheless always willing to dialogue with them
on matters of common concern and was open to suggestions on how the company may improve its operations.
In answer, the union officers wrote a letter dated December 19, 1991 disclaiming any massive disaffiliation or resignation from the union
and submitted a manifesto, signed by its members, stating that they had not withdrawn from the union.
On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The union protested and
requested GMC to submit the matter to the grievance procedure provided in the CBA. GMC, however, advised the union to refer to our letter
dated December 16, 1991.*3+
Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration Division, Cebu City. The complaint alleged
unfair labor practice on the part of GMC for: (1) refusal to bargain collectively; (2) interference with the right to self-organization; and (3)
discrimination. The labor arbiter dismissed the case with the recommendation that a petition for certification election be held to determine if the
union still enjoyed the support of the workers.
The union appealed to the NLRC.
On January 30, 1998, the NLRC set aside the labor arbiters decision. Citing Article 253-A of the Labor Code, as amended by Rep. Act No.
6715,[4] which fixed the terms of a collective bargaining agreement, the NLRC ordered GMC to abide by the CBA draft that the union proposed for
a period of two (2) years beginning December 1, 1991, the date when the original CBA ended, to November 30, 1993. The NLRC also ordered GMC
to pay the attorneys fees.*5+
In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No. 6715, the duration of a CBA, insofar as the representation
aspect is concerned, is five (5) years which, in the case of GMC-Independent Labor Union was from December 1, 1988 to November 30, 1993. All
other provisions of the CBA are to be renegotiated not later than three (3) years after its execution. Thus, the NLRC held that respondent union
remained as the exclusive bargaining agent with the right to renegotiate the economic provisions of the CBA. Consequently, it was unfair labor
practice for GMC not to enter into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13 of its members from February to June
1993 confirmed the pressure exerted by GMC on its employees to resign from the union. Thus, the NLRC also found GMC guilty of unfair labor
practice for interfering with the right of its employees to self-organization.
With respect to the unions claim of discrimination, the NLRC found the claim unsupported by substantial evidence.
On GMCs motion for reconsideration, the NLRC set aside its decision of January 30, 1998, through a resolution dated October 6, 1998. It
found GMCs doubts as to the status of the union justified and the allegation of coercion exerted by GMC on the unions members to resign
unfounded. Hence, the union filed a petition for certiorari before the Court of Appeals. For failure of the union to attach the required copies of
pleadings and other documents and material portions of the record to support the allegations in its petition, the CA dismissed the petition on
February 9, 1999. The same petition was subsequently filed by the union, this time with the necessary documents. In its resolution dated April 26,
1999, the appellate court treated the refiled petition as a motion for reconsideration and gave the petition due course.
On July 19, 2000, the appellate court rendered a decision the dispositive portion of which reads:
WHEREFORE, the petition is hereby GRANTED. The NLRC Resolution of October 6, 1998 is hereby SET ASIDE, and its decision of January
30, 1998 is, except with respect to the award of attorneys fees which is hereby deleted, REINSTATED.*6+
A motion for reconsideration was seasonably filed by GMC, but in a resolution dated October 26, 2000, the CA denied it for lack of merit.
Hence, the instant petition for certiorari alleging that:

I. THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE THAT NO DECISION SHALL BE RENDERED BY ANY COURT WITHOUT
EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH IT IS BASED.
II. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS
COMMISSION IN THE ABSENCE OF ANY FINDING OF SUBSTANTIAL ERROR OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION.
III. THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT APPRECIATING THAT THE NLRC HAS NO JURISDICTION TO DETERMINE THE TERMS
AND CONDITIONS OF A COLLECTIVE BARGAINING AGREEMENT.[7]
Thus, in the instant case, the principal issue for our determination is whether or not the Court of Appeals acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in (1) finding GMC guilty of unfair labor practice for violating the duty to bargain collectively
and/or interfering with the right of its employees to self-organization, and (2) imposing upon GMC the draft CBA proposed by the union for two
years to begin from the expiration of the original CBA.
On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, states:
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....
The law mandates that the representation provision of a CBA should last for five years. The relation between labor and management
should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that when the union requested for a renegotiation of the
economic terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent of the workers, because it was seeking said
renegotiation within five (5) years from the date of effectivity of the CBA on December 1, 1988. The unions proposal was also submitted within the
prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of said period. It was obvious that GMC had no valid
reason to refuse to negotiate in good faith with the union. For refusing to send a counter-proposal to the union and to bargain anew on the
economic terms of the CBA, the company committed an unfair labor practice under Article 248 of the Labor Code, which provides that:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair labor practice: .
(g) To violate the duty to bargain collectively as prescribed by this Code;. . .
Article 252 of the Labor Code elucidates the meaning of the phrase duty to bargain collectively, thus:
ART. 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the performance of a mutual obligation to
meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement....
We have held that the crucial question whether or not a party has met his statutory duty to bargain in good faith typically turn$ on the
facts of the individual case.[8] There is no per se test of good faith in bargaining.[9] Good faith or bad faith is an inference to be drawn from the
facts.*10+ The effect of an employers or a unions actions individually is not the test of good-faith bargaining, but the impact of all such occasions
or actions, considered as a whole.[11]
Under Article 252 abovecited, both parties are required to perform their mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement. The union lived up to this obligation when it presented proposals for a
new CBA to GMC within three (3) years from the effectivity of the original CBA. But GMC failed in its duty under Article 252. What it did was to
devise a flimsy excuse, by questioning the existence of the union and the status of its membership to prevent any negotiation.
It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the basic interest of the
state in ensuring lasting industrial peace. Thus:
ART. 250. Procedure in collective bargaining. The following procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals.
The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice. (Underscoring supplied.)
GMCs failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining with
the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it turned out to be utterly baseless.
We hold that GMCs refusal to make a counter-proposal to the unions proposal for CBA negotiation is an indication of its bad faith.
Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to
bargain collectively.[12]
Failing to comply with the mandatory obligation to submit a reply to the unions proposals, GMC violated its duty to bargain collectively,
making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of
jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice.
Did GMC interfere with the employees right to self-organization? The CA found that the letters between February to June 1993 by 13
union members signifying their resignation from the union clearly indicated that GMC exerted pressure on its employees. The records show that
GMC presented these letters to prove that the union no longer enjoyed the support of the workers. The fact that the resignations of the union
members occurred during the pendency of the case before the labor arbiter shows GMCs desperate attempts to cast doubt on the legitimate
status of the union. We agree with the CAs conclusion that the ill-timed letters of resignation from the union members indicate that GMC had
interfered with the right of its employees to self-organization. Thus, we hold that the appellate court did not commit grave abuse of discretion in
finding GMC guilty of unfair labor practice for interfering with the right of its employees to self-organization.
Finally, did the CA gravely abuse its discretion when it imposed on GMC the draft CBA proposed by the union for two years commencing
from the expiration of the original CBA?
The Code provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. ....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 [prior to its
expiration date] and/or until a new agreement is reached by the parties. (Underscoring supplied.)
The provision mandates the parties to keep the status quo while they are still in the process of working out their respective proposal and
counter proposal. The general rule is that when a CBA already exists, its provision shall continue to govern the relationship between the parties,
until a new one is agreed upon. The rule necessarily presupposes that all other things are equal. That is, that neither party is guilty of bad faith.
However, when one of the parties abuses this grace period by purposely delaying the bargaining process, a departure from the general rule is
warranted.
In Kiok Loy vs. NLRC,[13] we found that petitioner therein, Sweden Ice Cream Plant, refused to submit any counter proposal to the CBA
proposed by its employees certified bargaining agent. We ruled that the former had thereby lost its right to bargain the terms and conditions of
the CBA. Thus, we did not hesitate to impose on the erring company the CBA proposed by its employees union - lock, stock and barrel. Our findings
in Kiok Loy are similar to the facts in the present case, to wit:
petitioner Companys approach and attitude stalling the negotiation by a series of postponements, non-appearance at the hearing
conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an
agreement with the Union. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands
set forth by the Union much less justify its objection thereto.[14]
Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and Employment,[15] petitioner therein, Divine Word University of
Tacloban, refused to perform its duty to bargain collectively. Thus, we upheld the unilateral imposition on the university of the CBA proposed by
the Divine Word University Employees Union. We said further:
That being the said case, the petitioner may not validly assert that its consent should be a primordial consideration in the bargaining
process. By its acts, no less than its action which bespeak its insincerity, it has forfeited whatever rights it could have asserted as an employer.[16]
Applying the principle in the foregoing cases to the instant case, it would be unfair to the union and its members if the terms and
conditions contained in the old CBA would continue to be imposed on GMCs employees for the remaining two (2) years of the CBAs duration. We
are not inclined to gratify GMC with an extended term of the old CBA after it resorted to delaying tactics to prevent negotiations. Since it was GMC
which violated the duty to bargain collectively, based on Kiok Loy and Divine Word University of Tacloban, it had lost its statutory right to negotiate
or renegotiate the terms and conditions of the draft CBA proposed by the union.
We carefully note, however, that as strictly distinguished from the facts of this case, there was no pre-existing CBA between the parties in
Kiok Loy and Divine Word University of Tacloban. Nonetheless, we deem it proper to apply in this case the rationale of the doctrine in the said two
cases. To rule otherwise would be to allow GMC to have its cake and eat it too.
Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals
of the other. But an erring party should not be allowed to resort with impunity to schemes feigning negotiations by going through empty
gestures.[17] Thus, by imposing on GMC the provisions of the draft CBA proposed by the union, in our view, the interests of equity and fair play
were properly served and both parties regained equal footing, which was lost when GMC thwarted the negotiations for new economic terms of the
CBA.
The findings of fact by the CA, affirming those of the NLRC as to the reasonableness of the draft CBA proposed by the union should not be
disturbed since they are supported by substantial evidence. On this score, we see no cogent reason to rule otherwise. Hence, we hold that the
Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it imposed on GMC, after it had
committed unfair labor practice, the draft CBA proposed by the union for the remaining two (2) years of the duration of the original CBA. Fairness,
equity, and social justice are best served in this case by sustaining the appellate courts decision on this issue.
WHEREFORE, the petition is DISMISSED and the assailed decision dated July 19, 2000, and the resolution dated October 26, 2000, of the
Court of Appeals in CA-G.R. SP No. 50383, are AFFIRMED. Costs against petitioner.

VICENTE SAN JOSE, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and OCEAN TERMINAL SERVICES, INC., respondents.
[G.R. No. 121227. August 17, 1998]

Before the Court is a Petition for Certiorari seeking to annul a Decision of the National Labor Relations Commission dated April 20, 1995 in
NLRC-NCR-CA-No. 00671-94 which reversed, on jurisdictional ground, a Decision of the Labor Arbiter dated January 19, 1994 in NLRC-NCR Case No.
00-03-02101-93 a case for a money claim - underpayment of retirement benefit. Records do not show that petitioner presented a Motion for
Reconsideration of subject Decision of the National Labor Relations Commission, which motion is, generally required before the filing of Petition
for Certiorari.
While the rule prescribing the requisite motion for reconsideration is not absolute and recognizes some exceptions, there is no showing
that the case at bar constitutes an exception. Nevertheless, we gave due course to the petition to enable the Court to reiterate and clarify the
jurisdictional boundaries between Labor Arbiters and Voluntary Arbitrator or Panel of Voluntary Arbitrators over money claims, and to render
substantial and speedy justice to subject aged stevedore retiree who first presented his claim for retirement benefit in April 1991, or seven years
ago.
Labor law practitioners and all lawyers, for that matter, should be fully conversant with the requirements for the institution
of certiorari proceedings under Rule 65 of the Revised Rules of Court. For instance, it is necessary that a Motion for Reconsideration of the Decision
of the National Labor Relations Commission must first be resorted to. The ruling in Corazon Jamer v. National Labor Relations
Commission, G.R. No. 112630, September 5, 1997, comes to the fore and should be well understood and observed. An ordinary allegation ...
and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law (Rule 65, Sec. 1, Revised Rules of Court) is not a
foolproof substitute for a Motion for Reconsideration, absence of which can be fatal to a Petition for Certiorari. Petitioner cannot and should not
rely on the liberality of the Court simply because he is a working man.
In the Jamer case, this court said:
... This premature action of petitioners constitutes a fatal infirmity as ruled in a long line of decisions, most recently is the case
of Building Care Corporation v. National Labor Relations Commission
The filing of such motion is intended to afford public respondent an opportunity to correct any actual or fancied error attributed to it by way of a
re-examination of the legal and factual aspects of the case. Petitioners inaction or negligence under the circumstances is tantamount to a
deprivation of the right and opportunity of the respondent commission to cleanse itself of an error unwittingly committed or to vindicate itself of
an act unfairly imputed...
Likewise, a motion for reconsideration is an adequate remedy; hence certiorari proceedings, as in this case, will not prosper.
As stated in the Decision of the Labor Arbiter in NLRC-NCR-Case No. 00-03-0201-93, dated January 19, 1994, the facts of this case are
undisputed. The Labor Arbiter reported, thus:
Complainant, in his position paper (Record, pages 11 to 14) states that he was hired sometime in July 1980 as a stevedore continuously
until he was advised in April 1991 to retire from service considering that he already reached 65 years old (sic); that accordingly, he did apply for
retirement and was paid P3,156.39 for retirement pay... (Rollo, pp. 15, 26-27, 58-59).
Decision of the Labor Arbiter in NLRC-NCR-Case No. 00-03-02101-93, January 9, 1994 (Rollo, pp. 15017, at pp. 16-17).
The Labor Arbiter decided the case solely on the merits of the complaint. Nowhere in the Decision is made mention of or reference to
the issue of jurisdiction of the Labor Arbiter (Rollo, pp. 15-17). But the issue of jurisdiction is the bedrock of the Petition because, as earlier
intimated, the Decision of the National Labor Relations Commission, hereinbelow quoted, reversed the Labor Arbiters Decision on the issue of
jurisdiction. Reads subject Decision of the Labor Arbiter:
Respondents, in their Reply to complainants position paper, allege (Record, pages 18 to 21) that complainants latest basic salary
was P120.34 per day; that he only worked on rotation basis and not seven days a week due to numerous stevedores who can not all be given
assignments at the same time; that all stevedores only for paid every time they were assigned or actually performed stevedoring; that the
computation used in arriving at the amount of P3,156.30 was the same computation applied to the other stevedores; that the use of divisor 303 is
not applicable because complainant performed stevedoring job only on call, so while he was connected with the company for the past 11 years, he
did not actually render 11 years of service; that the burden of proving that complainants latest salary was P200.00 rests upon him; that he already
voluntarily signed a waiver of quitclaim; that if indeed respondent took advantage of his illiteracy into signing his quitclaim, he would have
immediately filed this complaint but nay, for it took him two (2) years to do so.
The issue therefore is whether or not complainant is entitled to the claimed differential of separation pay.
We find for the complainant. He is entitled to differential.
We cannot sustain a computation of length of service based on the ECC contribution records. Likewise, the allegation that complainant rendered
service for only five days a month for the past 11 years is statistically improbable, aside from the fact that the best evidence thereof are
complainants daily time records which respondent are (sic) duty bound to keep and make available anytime in case of this.
The late filing has no bearing. The prescription period is three years. It is suffice (sic) that the filing falls within the period.
Whether or not complainant worked on rotation basis is a burden which lies upon the employer. The presumption is that the normal working
period is eight (8) hours a day and six (6) days a week, or 26 days a month, unless proven otherwise.
Also, the burden of proving the amount of salaries paid to employees rests upon the employer not on the employee. It can be easily proven by
payrolls, vouchers, etc. which the employers are likewise duty bound to keep and present. There being non, we have to sustain complainants
assertion that his latest salary rate was P200 a day or P5,200 a month. Therefore, his retrenchment pay differential is P25,443.70 broken down as
follows:
P200 x 26 days = P5,200 x 11 years
2
= (P2,600 x 11 years) - P3,156.30
= P28,600 - P3,156.30
= P25,443.70
The Decision of the National Labor Relations Commission in NLRC-NCR-CA No. 06701-94, April 20, 1995 (Rollo, pp. 18-21).
The National Labor Relations Commission reversed on jurisdictional ground the aforesaid Decision of the Labor Arbiter; ruling, as follows:
... His claim for separation pay differential is based on the Collective Bargaining Agreement (CBA) between his union and the respondent company,
the pertinent portion of which reads:
xxx ANY UNION member shall be compulsory retired (sic) by the company upon reaching the age of sixty (60) years, unless otherwise extended by
the company for justifiable reason. He shall be paid his retirement pay equivalent to one-half (1/2) month salary for every year of service, a
fraction of at least six months being considered as one (1) whole year.
xxx The company agrees that in case of casual employees and/or workers who work on rotation basis the criterion for determining their retirement
pay shall be 303 rotation calls or work days as equivalent to one (1) year and shall be paid their retirement pay equivalent to one half (1/2) month
for every year of service.
xxx
Since the instant case arises from interpretation or implementation of a collective bargaining agreement, the Labor Arbiter should have dismissed it
for lack of jurisdiction in accordance with Article 217 (c) of the Labor Code, which reads: (Underscoring supplied)
Art. 217. Jurisdiction of Labor Arbiter and the Commission.
xxx
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator as may be provided in said agreements.
Petitioner contends that:
I. THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN GIVING DUE COURSE TO THE APPEAL DESPITE THE FACT 4 (SIC) THAT IT
WAS FILED OUT OF TIME AND THERE IS NO SHOWING THAT A SURETY BOND WAS POSTED.
II. THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION N SETTING ASIDE THE DECISION OF XXX DATED 19 JANUARY 1994 AND
DISMISSING THE CASE ON THE GROUND OF LACK OF JURISDICTION WHEN THE ISSUE DOES NOT INVOLVE ANY PROVISION OF THE COLLECTIVE
BARGAINING AGREEMENT. (Rollo, pp. 7-8)
The Manifestation and Motion (In Lieu of Comment) sent in on December 6, 1995 by the Office of the Solicitor General support the second
issue, re: jurisdiction raised by the Petitioner (Rollo, pp. 26-33, at pp. 38-32).
Labor Arbiter Decision
Labor Arbiters should exert all efforts to cite statutory provisions and/or judicial decision to buttress their dispositions. An Arbiter cannot
rely on simplistic statements, generalizations, and assumptions. These are not substitutes for reasoned judgment. Had the Labor Arbiter exerted
more research efforts, support for the Decision could have been found in pertinent provisions of the Labor Code, its Implementing Rules, and
germane decisions of the Supreme Court. As this Court said in Juan Saballa, et al. v. NLRC, G.R. No. 102472-84, August 22, 1996:
xxx This Court has previously held that judges and arbiters should draw up their decisions and resolutions with due care, and make
certain that they truly and accurately reflect their conclusions and their final dispositions. A decision should faithfully comply with Section 14,
Article VIII of the Constitution which provides that no decision shall be rendered by any court without expressing therein clearly and distinctly the
facts of the case and the law on which it is based. If such decision had to be completely overturned or set aside, upon the modified decision, such
resolution or decision should likewise state the factual and legal foundation relied upon. The reason for this is obvious: aside from being required
by the Constitution, the court should be able to justify such a sudden change of course; it must be able to convincingly explain the taking back of its
solemn conclusions and pronouncements in the earlier decision. The same thing goes for the findings of fact made by the NLRC, as it is a settled
rule that such findings are entitled to great respect and even finality when supported by substantial evidence; otherwise, they shall be struck down
for being whimsical and capricious and arrived at with grave abuse of discretion. It is a requirement of due process and fair play that the parties to
a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. A
decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached
and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal. xxx
This is not an admonition but rather, advice and a critique to stress that both have obligations to the Courts and students of the law. Decisions of
the Labor Arbiters, the National Labor Relations Commission, and the Supreme Court serve not only to adjudicate disputes, but also as an
educational tool to practitioners, executives, labor leaders and law students. They all have a keen interest in methods of analysis and the reasoning
processes employed in labor dispute adjudication and resolution. In fact, decisions rise or fall on the basis of the analysis and reasoning processes
of decision makers or adjudicators.
On the issues raised by the Petitioner, we rule:
I. Timeliness of Appeal And Filing of Appeal Bond

The Court rules that the appeal of the respondent corporation was interposed within the reglementary period, in accordance with the Rules of the
National Labor Relations Commission, and an appeal bond was duly posted. We adopt the following Comment dated August 14, 1996, submitted
by the National Labor Relations Commission, to wit:
xxx While it is true that private respondent company received a copy of the decision dated January 19, 1994 of the Labor Arbiter xxx and filed its
appeal on February 14, 1994, it is undisputed that the tenth day within which to file an appeal fell on a Saturday, the last day to perfect an appeal
shall be the next working day.
Thus, the amendments to the New Rules of Procedure of the NLRC, Resolution No. 11-01-91 which took effect on January 14, 1992, provides in
part:
xxx
1. Rule VI, Sections 1 and 6 are hereby amended to read as follows:
Section 1. Period of Appeal Decisions, awards or orders of the Labor Arbiter ... shall be final and executory unless appealed to the Commission
by any or both parties within ten (10) calendar days from receipt of such decisions, awards or orders of the Labor Arbiter xxx ... If the 10
th
day ...
falls on a Saturday, Sunday or a Holiday, the last day to perfect the decision shall be the next working day. (Underscoring supplied)
Hence, it is crystal clear that the appeal was filed within the prescriptive period to perfect an appeal. Likewise, the petitioners contention that
private respondent did not post the required surety bond, deserves scant consideration, for the simple reason that a surety bond was issued by BF
General Insurance Company, Inc., in the amount of P25, 443.70 (Rollo, pp. 63-64).
2. Jurisdictional Issue
The jurisdiction of Labor Arbiters and Voluntary Arbitrator or Panel of Voluntary Arbitrators is clearly defined and specifically delineated in the
Labor Code. The pertinent provisions of the Labor Code, read:
A. Jurisdiction of Labor Arbiters
Art. 217. Jurisdiction of Labor Arbiter and the Commission. -- (a) Except as otherwise provided under this Code the Labor Arbiter shall have original
and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms
and conditions of employment;
4. claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and,
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee
relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000) regardless of
whether accompanied with a claim for reinstatement.
xxx
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator so maybe provided in said agreement.
B. Jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall
have 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 referred to in the
immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as grievances under the collective bargaining agreement. For purposes of this
Article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of
such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes,
grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement.
Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall
also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.
The aforecited provisions of law cannot be read in isolation or separately. They must be read as a whole and each Article of the Code reconciled
one with the other. An analysis of the provisions of Articles 217, 261, and 262 indicates, that:
1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators over the cases enumerated in Articles 217, 261
and 262, can possibly include money claims in one form or another.
2. The cases where the Labor Arbiters have original and exclusive jurisdiction are enumerated in Article 217, and that of the Voluntary Arbitrator
or Panel of Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an exception as indicated in the introductory sentence of Article
217 (a), to wit:
Art. 217. Jurisdiction of Labor Arbiters ... (a) Except as otherwise provided under this Code the Labor Arbiter shall have original and exclusive
jurisdiction to hear and decide ... the following cases involving all workers...
The phrase Except as otherwise provided under this Code refers to the following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters ...
xxx
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator as may be provided in said agreement.
B. Art. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall
also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.
Parenthetically, the original and exclusive jurisdiction of the Labor Arbiter under Article 217 (c), for money claims is limited only to those arising
from statutes or contracts other than a Collective Bargaining Agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators will have
original and exclusive jurisdiction over money claims arising from the interpretation or implementation of the Collective Bargaining Agreement
and, those arising from the interpretation or enforcement of company personnel policies, under Article 261.
4. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is provided for in Arts. 261 and 262 of the Labor Code as indicated
above.
1. A close reading of Article 261 indicates that the original and exclusive jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is
limited only to:
... 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... Accordingly, violations of a collective bargaining agreement, except those which are
gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining
Agreement. xxx.
2. Voluntary Arbitrators or Panel of Voluntary Arbitrators, however, can exercise jurisdiction over any and all disputes between an employer and a
union and/or individual worker as provided for in Article 262.
Art. 262. Jurisdiction over other labor disputes. - The voluntary arbitrator or panel of voluntary arbitrators, upon agreement of the parties, shall
also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.
It must be emphasized that the jurisdiction of the Voluntary Arbitrator or Panel of Voluntary Arbitrators under Article 262 must be voluntarily
conferred upon by both labor and management. The labor disputes referred to in the same Article 262 can include all those disputes mentioned in
Article 217 over which the Labor Arbiter has original and exclusive jurisdiction.
As shown in the above contextual and wholistic analysis of Articles 217, 261, and 262 of the Labor Code, the National Labor Relations Commission
correctly ruled that the Labor Arbiter had no jurisdiction to hear and decide petitioners money-claim underpayment of retirement benefits, as the
controversy between the parties involved an issue arising from the interpretation or implementation of a provision of the collective bargaining
agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators has original and exclusive jurisdiction over the controversy under Article 261
of the Labor Code, and not the Labor Arbiter.
3. Merits of the Case
The Court will not remand the case to the Voluntary Arbitrator or Panel of Voluntary Arbitrators for hearing. This case has dragged on far too long -
eight (8) years. Any further delay would be a denial of speedy justice to an aged retired stevedore. There is further the possibility that any Decision
by the Voluntary Arbitrator or Panel of Voluntary Arbitrators will be appealed to the Court of Appeals, and finally to this Court. Hence, the Court
will rule on the merits of the case.
We adopt as our own the retirement benefit computation formula of the Labor Arbiter, and the reasons therefor as stated in the decision
abovequoted.
The simple statement of the Labor Arbiter that we cannot sustain a computation of length of service based on ECC contribution records, was not
amply explained by the Labor Arbiter; however, there is legal and factual basis for the same. It is unrealistic to expect a lowly stevedore to know
what reports his employer submits to the Employees Compensation Commission under Book IV, Health, Safety and Welfare Benefits, Title II,
Employees Compensation and State Insurance Fund, of the Labor Code, simply because the insurance fund is solely funded by the employer and
the rate of employers contribution varies according to time and actuarial computations. (See Articles 183-184; Labor Code). The worker has no
ready access to this employers record. In fact, it is farthest from his mind to inquire into the amount of employers contribution, much less
whether the employer remits the contributions. The worker is at all times entitled to benefits upon the occurrence of the defined contingency
even when the employer fails to remit the contributions. (See Article 196 (b), Labor Code).
All employers are likewise required to keep an employment record of all their employees, namely: payrolls; and time records. (See Book III, Rule X,
specifically Secs. 6,7,8, 1 and 12, Omnibus Rules - Implementing the Labor Code).
The respondent-employer was afforded the opportunity to show proof of the petitioners length of service and pay records. In both instances, the
respondent-employer failed. By its own folly, it must therefore suffer the consequences of such failure. (South Motorists Enterprises v. Tosoc, 181
SCRA 386, [1990]) From the very beginning - by the provision of the retirement provision of the Collective Bargaining Agreement, i.e., the length of
service as requirement for retirement, and salary as a basis for benefit computation - the employer was forewarned of the need for accurate record
keeping. This is precisely the basis of retirement, and the computation of benefits based on years of service and monthly wage.
To recapitulate; the Court hereby rules -
1. That the National Labor Relations Commission correctly ruled that the Labor Arbiter had no jurisdiction over the case, because the case involved
an issue arising from the interpretation or implementation of a Collective Bargaining Agreement;
2. That the appeal to the National Labor Relations Commission was filed within the reglementary period and that the appeal bond was filed; and
3. That we adopt the computation formula for the retirement benefits by the Labor Arbiter, and the basis thereof. The respondent must therefore
pay the petitioner the additional amount of Twenty-Five Thousand Four Hundred Forty-Three and Seventy Centavos P25,443.70) Pesos.
In view of the long delay in the disposition of the case, this decision is immediately executory.

SAN MIGUEL CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, AND SAN MIGUEL CORPORATION
EMPLOYEES UNION (SMCEU) - PTGWO, respondents. [G.R. No. 99266. March 2, 1999]

PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, assailing the Resolution
[1]
of the National Labor Relations Commission
in NLRC NCR CASE NO. 00094-90, which dismissed the complaint of San Miguel Corporation (SMC), seeking to dismiss the notice of strike given by
the private respondent union and to compel the latter to comply with the provisions of the Collective Bargaining Agreement (CBA)
[2]
on grievance
machinery, arbitration, and the no-strike clause, with prayer for the issuance of a temporary restraining order.
The antecedent facts are as follows:
In July 1990, San Miguel Corporation, alleging the need to streamline its operations due to financial losses, shut down some of its plants and
declared 55 positions as redundant, listed as follows: seventeen (17) employees in the Business Logistics Division (BLD), seventeen (17) in the
Ayala Operations Center (AOC), and eighteen (18) in the Magnolia-Manila Buying Station (Magnolia-MBS).
[3]
Consequently, the private
respondent union filed several grievance cases for the said retrenched employees, praying for the redeployment of the said employees to the
other divisions of the company.
The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of the parties 1990 Collective Bargaining Agreement providing
for the following procedures, to wit:
Sec.5. Processing of Grievance. - Should a grievance arise, an earnest effort shall be made to settle the grievance expeditiously in accordance with
the following procedures:
Step 1. - The individual employee concerned and the Union Directors, or the Union Steward shall, first take up the employees grievance orally with
his immediate superior. If no satisfactory agreement or adjustment of the grievance is reached, the grievance shall, within twenty (20) working days
from the occurrence of the cause or event which gave rise to the grievance, be filed in writing with the Department Manager or the next level
superior who shall render his decision within ten (10) working days from the receipt of the written grievance. A copy of the decision shall be
furnished the Plant Personnel Officer.
Step 2. - If the decision in Step 1 is rejected, the employee concerned may elevate or appeal this in writing to the Plant Manager/Director or his duly
authorized representative within twenty (20) working days from the receipt of the Decision of the Department Manager. Otherwise, the decision in
Step 1 shall be deemed accepted by the employee.
The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the necessity of conducting grievance meetings. If necessary,
the Plant Manager/Director and the Plant Personnel Officer shall meet the employee concerned and the Union Director/Steward on such date(s) as
may be designated by the Plant Manager. In every plant/office, Grievance Meetings shall be scheduled at least twice a month.
The Plant Manager shall give his written comments and decision within ten (10) working days after his receipt of such grievance or the date of
submission of the grievance for resolution, as the case may be. A copy of his Decision shall be furnished the Employee Relations Directorate.
Step 3. - If no satisfactory adjustment is arrived at Step 2, the employee may appeal the Decision to the Conciliation Board as provided under Section
6 hereof, within fifteen (15) working days from the date of receipt of the decision of the Plant Manager/Director or his designate. Otherwise, the
decision in Step 2 shall be deemed accepted by the employee.
The Conciliation Board shall meet on the grievance in such dates as shall be designated by the Division/Business Unit Manager or his
representative. In every Division/Business Unit, Grievance Meetings of the Conciliation Board shall be scheduled at least once a month.
The Conciliation Board shall have fifteen (15) working days from the date of submission of the grievance for resolution within which to decide on the
grievance.
SEC. 6. Conciliation Board. - There shall be a conciliation Board per Business Unit or Division. Every Conciliation Board shall be composed of not
more than five (5) representatives each from the Company and the Union. Management and the Union may be assisted by their respective legal
counsels.
In every Division/Business Unit, the names of the Company and Union representatives to the Conciliation Board shall be submitted to the
Division/Business Unit Manager not later than January of every year. The Conciliation Board members shall act as such for one (1) year until
removed by the Company or the Union, as the case may be.
x x x
Sec. 8. Submission to Arbitration. - If the employee or Union is not satisfied with the Decision of the Conciliation Board and desires to submit the
grievance to arbitration, the employee or the Union shall serve notice of such intention to the Company within fifteen (15) working days after receipt
of the Boards decision. If no such written notice is received by the Company within fifteen (15) working days, the grievance shall be considered
settled on the basis of the companys position and shall no longer be available for arbitration.
[4]

During the grievance proceedings, however, most of the employees were redeployed, while others accepted early retirement. As a result only 17
employees remained when the parties proceeded to the third level (Step 3) of the grievance procedure. In a meeting on October 26, 1990,
petitioner informed private respondent union that if by October 30, 1990, the remaining 17 employees could not yet be redeployed, their services
would be terminated on November 2, 1990. The said meeting adjourned when Mr. Daniel S. L. Borbon II, a representative of the union, declared
that there was nothing more to discuss in view of the deadlock.
[5]

On November 7, 1990, the private respondent filed with the National Conciliation and Mediation Board (NCMB) of the Department of Labor and
Employment (DOLE) a notice of strike on the following grounds: a) bargaining deadlock; b) union busting; c) gross violation of the Collective
Bargaining Agreement (CBA), such as non-compliance with the grievance procedure; d) failure to provide private respondent with a list of vacant
positions pursuant to the parties side agreement that was appended to the 1990 CBA; and e) defiance of voluntary arbitration award. Petitioner on
the other hand, moved to dismiss the notice of strike but the NCMB failed to act on the motion.
On December 21, 1990, petitioner SMC filed a complaint
[6]
with the respondent NLRC, praying for: (1) the dismissal the notice of strike; (2) an
order compelling the respondent union to submit to grievance and arbitration the issue listed in the notice of strike; (3) the recovery of the
expenses of litigation.
On April 16, 1991, respondent NLRC came out with a minute resolution dismissing the complaint; holding, thus:
NLRC NCR IC NO. 000094-90, entitled San Miguel Corporation, Complainant -versus- San Miguel Corporation Employees Union-PTWO (SMCEU),
Respondent. - Considering the allegations in the complaint to restrain Respondent Union from declaring a strike and to enforce mutual compliance
with the provisions of the collective bargaining agreement on grievance machinery, and the no-strike clause, with prayer for issuance of temporary
restraining order, and the evidence adduced therein, the Answer filed by the respondent and the memorandum filed by the complainant in support
of its application for the issuance of an injunction, the Second Division, after due deliberation, Resolved to dismiss the complaint for lack of merit.
[7]

Aggrieved by the said resolution, petitioner found its way to this court via the present petition, contending that:
I
IT IS THE POSITIVE LEGAL DUTY OF RESPONDENT NLRC TO COMPEL ARBITRATION AND TO ENJOIN A STRIKE IN VIOLATION OF A NO STRIKE CLAUSE.
II
INJUNCTION IS THE ONLY IMMEDIATE, EFFECTIVE SUBSTITUTE FOR THE DISASTROUS ECONOMIC WARFARE THAT ARBITRATION IS DESIGNED TO
AVOID.
[8]

On June 3, 1991, to preserve the status quo, the Court issued a Resolution
[9]
granting petitioners prayer for the issuance of a Temporary Restraining
Order.
The Petition is impressed with merit.
Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor Code
[10]
, reads:
Section 1. Grounds for strike and lockout. -- A strike or lockout may be declared in cases of bargaining deadlocks and unfair labor
practices. Violations of the collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall
not be considered unfair labor practice and shall not be strikeable. No strike or lockout may be declared on grounds involving inter-union and intra-
union disputes or on issues brought to voluntary or compulsory arbitration.
In the case under consideration, the grounds relied upon by the private respondent union are non-strikeable. The issues which may lend substance
to the notice of strike filed by the private respondent union are: collective bargaining deadlock and petitioners alleged violation of the collective
bargaining agreement. These grounds, however, appear more illusory than real.
Collective Bargaining Deadlock is defined as the situation between the labor and the management of the company where there is failure in the
collective bargaining negotiations resulting in a stalemate
[11]
This situation, is non-existent in the present case since there is a Board assigned on
the third level (Step 3) of the grievance machinery to resolve the conflicting views of the parties. Instead of asking the Conciliation Board
composed of five representatives each from the company and the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed
a notice of strike. For failing to exhaust all the steps in the grievance machinery and arbitration proceedings provided in the Collective Bargaining
Agreement, the notice of strike should have been dismissed by the NLRC and private respondent union ordered to proceed with the grievance and
arbitration proceedings. In the case of Liberal Labor Union vs. Phil. Can Co.,
[12]
the court declared as illegal the strike staged by the union for not
complying with the grievance procedure provided in the collective bargaining agreement, ruling that:
x x x the main purpose of the parties in adopting a procedure in the settlement of their disputes is to prevent a strike. This procedure must be
followed in its entirety if it is to achieve its objective. x x x strikes held in violation of the terms contained in the collective bargaining agreement are
illegal, specially when they provide for conclusive arbitration clauses. These agreements must be strictly adhered to and respected if their ends have
to be achieved. x x x
[13]

As regards the alleged violation of the CBA, we hold that such a violation is chargeable against the private respondent union. In abandoning the
grievance proceedings and stubbornly refusing to avail of the remedies under the CBA, private respondent violated the mandatory provisions of
the collective bargaining agreement.
Abolition of departments or positions in the company is one of the recognized management prerogatives.
[14]
Noteworthy is the fact that the private
respondent does not question the validity of the business move of petitioner. In the absence of proof that the act of petitioner was ill-motivated, it
is presumed that petitioner San Miguel Corporation acted in good faith. In fact, petitioner acceded to the demands of the private respondent
union by redeploying most of the employees involved; such that from an original 17 excess employees in BLD, 15 were successfully redeployed. In
AOC, out of the 17 original excess, 15 were redeployed. In the Magnolia - Manila Buying Station, out of 18 employees, 6 were redeployed and only
12 were terminated.
[15]

So also, in filing complaint with the NLRC, petitioner prayed that the private respondent union be compelled to proceed with the grievance and
arbitration proceedings. Petitioner having evinced its willingness to negotiate the fate of the remaining employees affected, there is no ground to
sustain the notice of strike of the private respondent union.
All things studiedly considered, we are of the ineluctable conclusion, and so hold, that the NLRC gravely abused its discretion in dismissing the
complaint of petitioner SMC for the dismissal of the notice of strike, issuance of a temporary restraining order, and an order compelling the
respondent union to settle the dispute under the grievance machinery of their CBA.
WHEREFORE, the instant petition is hereby GRANTED. Petitioner San Miguel Corporation and private respondent San Miguel Corporation
Employees Union - PTGWO are hereby directed to complete the third level (Step 3) of the Grievance Procedure and proceed with the Arbitration
proceedings if necessary. No pronouncement as to costs.
SO ORDERED

SANYO PHILIPPINES WORKERS UNION-PSSLU LOCAL CHAPTER NO. 109 AND/OR ANTONIO DIAZ, PSSLU NATIONAL PRESIDENT, petitioners, vs. HON.
POTENCIANO S. CANIZARES, in his capacity as Labor Arbiter, BERNARDO YAP, RENATO BAYBON, SALVADOR SOLIBEL, ALLAN MISTERIO, EDGARDO
TANGKAY, LEONARDO DIONISIO, ARNEL SALVO, REYNALDO RICOHERMOSO, BENITO VALENCIA, GERARDO LASALA AND ALEXANDER ATANASIO,
respondents. G.R. No. 101619 July 8, 1992

This petition seeks to nullify: 1) the order of respondent Labor Arbiter Potenciano Caizares dated August 6, 1991 deferring the resolution of the
motion to dismiss the complaint of private respondents filed by petitioner Sanyo Philippines Workers Union-PSSLU Local Chapter No. 109 (PSSLU,
for brevity) on the ground that the labor arbiter had no jurisdiction over said complaint and 2) the order of the same respondent clarifying its
previous order and ruling that it had jurisdiction over the case.

The facts of the case are as follows:
PSSLU had an existing CBA with Sanyo Philippines Inc. (Sanyo, for short) effective July 1, 1989 to June 30, 1994. The same CBA contained a union
security clause which provided:
Sec. 2. All members of the union covered by this agreement must retain their membership in good standing in the union as condition of his/her
continued employment with the company. The union shall have the right to demand from the company the dismissal of the members of the union
by reason of their voluntary resignation from membership or willful refusal to pay the Union Dues or by reasons of their having formed, organized,
joined, affiliated, supported and/or aided directly or indirectly another labor organization, and the union thus hereby guarantees and holds the
company free and harmless from any liability whatsoever that may arise consequent to the implementation of the provision of this article. (pp. 5-6,
Rollo)
In a letter dated February 7, 1990, PSSLU, through its national president, informed the management of Sanyo that the following
employees were notified that their membership with PSSLU were cancelled for anti-union, activities, economic sabotage, threats, coercion and
intimidation, disloyalty and for joining another union: Benito Valencia, Bernardo Yap, Arnel Salvo, Renato Baybon, Eduardo Porlaje, Salvador
Solibel, Conrado Sarol, Angelito Manzano, Allan Misterio, Reynaldo Ricohermoso, Mario Ensay and Froilan Plamenco. The same letter informed
Sanyo that the same employees refused to submit themselves to the union's grievance investigation committee (p. 53, Rollo). It appears that many
of these employees were not members of PSSLU but of another union, KAMAO.
On February 14, 1990, some officers of KAMAO, which included Yap, Salvo, Baybon, Solibel, Valencia, Misterio and Ricohermoso,
executed a pledged of cooperation with PSSLU promising cooperation with the latter union and among others, respecting, accepting and honoring
the CBA between Sanyo and specifically:
1. That we shall remain officers and members of KAMAO until we finally decide to rejoin Sanyo Phil. Workers Union-PSSLU;
2. That henceforth, we support and cooperate with the duly elected union officers of Sanyo Phil. Workers Union-PSSLU in any and all its
activities and programs to insure industrial peace and harmony;
3. That we collectively accept, honor, and respect the Collective Bargaining Agreement entered into between Sanyo Phil. Inc. and Sanyo
Phil. Workers Union-PSSLU dated February 7, 1990;
4 That we collectively promise not to engage in any activities inside company premises contrary to law, the CBA and existing policies;
5 That we are willing to pay our individual agency fee in accordance with the provision of the Labor Code, as amended;
6 That we collectively promise not to violate this pledge of cooperation. (p. 55, Rollo)
On March 4, 1991, PSSLU through its national and local presidents, wrote another letter to Sanyo recommending the dismissal of the
following non-union workers: Bernardo Yap, Arnel Salvo, Renato Baybon, Reynaldo Ricohermoso, Salvador Solibel, Benito Valencia, and Allan
Misterio, allegedly because: 1) they were engaged and were still engaging in anti-union activities; 2) they willfully violated the pledge of
cooperation with PSSLU which they signed and executed on February 14, 1990; and 3) they threatened and were still threatening with bodily harm
and even death the officers of the union (pp. 37-38, Rollo).
Also recommended for dismissal were the following union members who allegedly joined, supported and sympathized with a minority
union, KAMAO: Gerardo Lasala, Legardo Tangkay, Alexander Atanacio, and Leonardo Dionisio.

The last part of the said letter provided:
The dismissal of the above-named union members is without prejudice to receive (sic) their termination pay if management decide (sic)
to grant them benefits in accordance with law. The union hereby holds the company free and harmless from any liability that may arise consequent
to the implementation by the company of our recommendations for the dismissal of the above-mentioned workers.
It is however suggested that the Grievance Machinery be convened pursuant to Section 3, Article XV of the Collective Bargaining
Agreement (CBA) before their actual dismissal from the company. (p. 38, Rollo)
Pursuant to the above letter of the union, the company sent a memorandum to the same workers advising them that:
As per the attached letter from the local union President SPWU and the federation President, PSSLU, requesting management to put the
herein mentioned employees on preventive suspension, effective immediately, preliminary to their subsequent dismissal, please be informed that
the following employees are under preventive suspension effective March 13, 1991 to wit:
1. Bernardo Yap 2. Renato Baybon 3.Salvador Solibel 4.Allan Misterio 5.Edgardo Tangkay
6. Leonardo Dionisio 7.Arnel Salvo 8.Reynaldo Ricohermoso 9.Benito Valencia
10. Gerardo Lasala 11.Alexander Atanacio
The above listed employees shall not be allowed within company premises without the permission of management.
As per request of the union's letter to management, should the listed employees fail to appeal the decision of the union for dismissal,
then effective March 23, 1991, said listed employees shall be considered dismissed from the company. (p 39, Rollo)
The company received no information on whether or not said employees appealed to PSSLU. Hence, it considered them dismissed as of March 23,
1991 (p. 40, Rollo).
On May 20, 1991, the dismissed employees filed a complaint (pp. 32-35, Rollo) with the NLRC for illegal dismissal. Named respondent
were PSSLU and Sanyo.
On June 20, 1991, PSSLU filed a motion to dismiss the complaint alleging that the Labor Arbiter was without jurisdiction over the case,
relying on Article 217 (c) of P.D. 442, as amended by Section 9 of Republic Act No. 6715 which provides that cases arising from the interpretation or
implementation of the collective bargaining agreements shall be disposed of by the labor arbiter by referring the same to the grievance machinery
and voluntary arbitration.
The complainants opposed the motion to dismiss complaint on these grounds: 1) the series of conferences before the National
Conciliation and Mediation Board had been terminated; 2) the NLRC Labor Arbiter had jurisdiction over the case which was a termination dispute
pursuant to Article 217 (2) of the Labor Code; and 3) there was nothing in the CBA which needs interpretation or implementation (pp. 44-46, Rollo).
On August 7, 1991, the respondent Labor Arbiter issued the first questioned order. It held that:
xxx xxx xxx
While there are seemingly contradictory provisions in the aforecited article of the Labor Code, the better interpretation will be to give
effect to both, and termination dispute being clearly spelled as falling under the jurisdiction of the Labor Arbiter, the same shall be respected. The
jurisdiction of the grievance machinery and voluntary arbitration shall cover other controversies.
However, the resolution of the instant issue shall be suspended until both parties have fully presented their respective positions and the
said issue shall be included in the final determination of the above-captioned case.
WHEREFORE, the instant Motions to Dismiss are hereby held pending.
Consequently, the parties are hereby directed to submit their position papers and supporting documents pursuant to Section 2, Rule VII
of the Rules of the Commission on or before the hearing on the merit of this case scheduled on August 29, 1991 at 11:00 a.m. (p. 23, Rollo)
On August 27, 1991, PSSLU filed another motion to resolve motion to dismiss complaint with a prayer that the Labor Arbiter resolve the
issue of jurisdiction.
On September 4, 1991, the respondent Labor Arbiter issued the second questioned order which held that it was assuming jurisdiction
over the complaint of private respondents, in effect, holding that it had jurisdiction over the case.
On September 19, 1991, PSSLU filed this petition alleging that public respondent Labor Arbiter cannot assume jurisdiction over the
complaint of public respondents because it had no jurisdiction over the dispute subject of said complaint. It is their submission that under Article
217 (c) of the Labor Code, in relation to Article 261 thereof, as well as Policy Instruction No. 6 of the Secretary of Labor, respondent Arbiter has no
jurisdiction and authority to take cognizance of the complaint brought by private respondents which involves the implementation of the union
security clause of the CBA. The function of the Labor Arbiter under the same law and rule is to refer this case to the grievance machinery and
voluntary arbitration.
In its comment, private respondents argue that Article 217(a) 2 and 4 of the Labor Code is explicit, to wit:

Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide . . . the following cases involving all workers, . . . :
xxx xxx xxx
2) Termination disputes,
xxx xxx xxx
4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations.

The private respondents also claimed that insofar as Salvo, Baybon, Ricohermoso, Solibel, Valencia, Misterio and Lasala were concerned,
they joined another union, KAMAO during the freedom period which commenced on May 1, 1989 up to June 30, 1989 or before the effectivity of
the July 1, 1989 CBA. Hence, they are not covered by the provisions of the CBA between Sanyo and PSSLU. Private respondents Tangkay, Atanacio
and Dionisio admit that in September 1989, they resigned from KAMAO and rejoined PSSLU (pp.
66(a)-68, Rollo).
For its part, public respondent, through the Office of the Solicitor General, is of the view that a distinction should be made between a
case involving "interpretation or implementation of collective bargaining agreement or "interpretation" or "enforcement" of company personnel
policies, on the one hand and a case involving termination, on the other hand. It argued that the case at bar does not involve an "interpretation or
implementation" of a collective bargaining agreement or "interpretation or enforcement" of company policies but involves a "termination." Where
the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up in the CBA or
by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter.
Article 217 of the Labor Code defines the jurisdiction of the Labor Arbiter.
Art. 217. Jurisdiction of Labor Arbiters and the Commission. a) Except as otherwise provided under this Code the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide within thirty (30) calendar days after the submission of the case by the parties for
decision without extension even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-
agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other
terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-
employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or
enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements.
It is clear from the above article that termination cases fall under the jurisdiction of the Labor Arbiter. It should be noted however that
said article at the outset excepted from the said provision cases otherwise provided for in other provisions of the same Code, thus the phrase
"Except as otherwise provided under this Code . . . ." Under paragraph (c) of the same article, it is expressly provided that "cases arising from the
interpretation or implementation of collective bargaining agreements and those arising from the interpretation and enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be
provided in said agreements.
It was provided in the CBA executed between PSSLU and Sanyo that a member's voluntary resignation from membership, willful refusal
to pay union dues and his/her forming, organizing, joining, supporting, affiliating or aiding directly or indirectly another labor union shall be a cause
for it to demand his/her dismissal from the company. The demand for the dismissal and the actual dismissal by the company on any of these
grounds is an enforcement of the union security clause in the CBA. This act is authorized by law provided that enforcement should not be
characterized by arbitrariness (Manila Mandarin Employee Union v. NLRC, G.R. No. 76989, 29 Sept. 1987, 154 SCRA 368) and always with due
process (Tropical Hut Employees Union v. Tropical Food Market, Inc., L-43495-99, Jan. 20, 1990).
The reference to a Grievance Machinery and Voluntary Arbitrators for the adjustment or resolution of grievances arising from the
interpretation or implementation of their CBA and those arising from the interpretation or enforcement of company personnel policies is
mandatory. The law grants to voluntary arbitrators 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 (Art. 261, Labor Code).
In its order of September 4, 1991, respondent Labor Arbiter explained its decision to assume jurisdiction over the complaint, thus:
The movants failed to show (1) the provisions of the CBA to be implemented, and (2) the grievance machinery and voluntary arbitrator
already formed and properly named. What self-respecting judge would refer a case from his responsibility to a shadow? To whom really and
specifically shall the case be indorsed or referred? In brief, they could have shown the (1) existence of the grievance machinery and (2) its being
effective.
Furthermore, the aforecited law merely directs the "referral" cases. It does not expressly confer jurisdiction on the grievance machinery
or voluntary arbitration panel, created or to be created. Article 260 of the Labor Code describes the formation of the grievance and voluntary
arbitration. All this of course shall be on voluntary basis. Is there another meaning of voluntary arbitration? (The herein complainant have strongly
opposed the motion to dismiss. Would they go willingly to the grievance machinery and voluntary arbitration which are installed by their
opponents if directed to do so?) (p. 26, Rollo)
The failure of the parties to the CBA to establish the grievance machinery and its unavailability is not an excuse for the Labor Arbiter to
assume jurisdiction over disputes arising from the implementation and enforcement of a provision in the CBA. In the existing CBA between PSSLU
and Sanyo, the procedure and mechanics of its establishment had been clearly laid out as follows:
ARTICLE XV 17 GRIEVANCE MACHINERY
Sec. 1. Whenever any controversy should arise between the company and the union as to the interpretation or application of the
provision of this agreement, or whenever any difference shall exist between said parties relative to the terms and conditions of employment, an
earnest effort shall be made to settle such controversy in substantially the following manner:
First step. (Thru Grievance) The dispute shall initially be resolved by conference between the management to be represented by the
Management's authorized representatives on the one hand, and the Union to be represented by a committee composed of the local union
president and one of the local union officer appointed by the local union president, on the other hand within three days from date of concurrence
of grievance action. In the absence of the local union president, he (shall) appoint another local union officer to take over in his behalf. Where a
controversy personally affects an employee, he shall not be allowed to be a member of the committee represented by the union.

Second step. (Thru Arbitrator mutually chosen) Should such dispute remain unsettled after twenty (20) days from the first
conference or after such period as the parties may agree upon in specified cases, it shall be referred to an arbitrator chosen by the consent of the
company and the union. In the event of failure to agree on the choice of voluntary arbitrator, the National Conciliation and Mediation Board,
Department of Labor and Employment shall be requested to choose an Arbitrator in accordance with voluntary arbitration procedures.
Sec. 2. The voluntary Arbitrator shall have thirty (30) days to decide the issue presented to him and his decision shall be final, binding
and executory upon the parties. He shall have no authority to add or subtract from and alter any provision of this agreement. The expenses of
voluntary arbitration including the fee of the arbitrator shall be shared equally by the company and the union. In the event the arbitrator chosen
either by the mutual agreement of the company and the union by (the) way of voluntary arbitration or by the National Conciliation and Mediation
Board (NCMB) failed to assume his position, died, become disabled or any other manner failed to function and or reach a decision, the company
and the union shall by mutual agreement choose another arbitrator; in the event of failure to agree on the choice of a new voluntary arbitrator, the
matter shall again be referred back to the NCMB who shall be requested again to choose a new arbitrator as above provided. Any grievance not
elevated or processed as above provided within the stipulated period shall be deemed settled and terminated.
Sec. 3. It is hereby agreed that decisions of the union relative to their members, for implementation by the COMPANY, should be
resolved for review thru the Grievance Machinery; and management be invited to participate in the Grievance procedure to be undertaken by the
union relative to (the) case of the union against members. (pp. 134-135, Rollo)
All that needs to be done to set the machinery into motion is to call for the convening thereof. If the parties to the CBA had not
designated their representatives yet, they should be ordered to do so.
The procedure introduced in RA 6715 of referring certain grievances originally and exclusively to the grievance machinery and when not
settled at this level, to a panel of voluntary arbitrators outlined in CBA's does not only include grievances arising from the interpretation or
implementation of the CBA but applies as well to those arising from the implementation of company personnel policies. No other body shall take
cognizance of these cases. The last paragraph of Article 261 enjoins other bodies from assuming jurisdiction thereof:
The commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes,
grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of voluntary arbitrators and shall
immediately dispose and refer the same to the grievance machinery or voluntary arbitration provided in the Collective Bargaining Agreement.
In the instant case, however, We hold that the Labor Arbiter and not the Grievance Machinery provided for in the CBA has the jurisdiction
to hear and decide the complaints of the private respondents. While it appears that the dismissal of the private respondents was made upon the
recommendation of PSSLU pursuant to the union security clause provided in the CBA, We are of the opinion that these facts do not come within
the phrase "grievances arising from the interpretation or implementation of (their) Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies," the jurisdiction of which pertains to the Grievance Machinery or thereafter, to a
voluntary arbitrator or panel of voluntary arbitrators. Article 260 of the Labor Code on grievance machinery and voluntary arbitrator states that
"(t)he parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of
their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies." It is further
provided in said article that the parties to a CBA shall name or designate their respective representatives to the grievance machinery and if the
grievance is not settled in that level, it shall automatically be referred to voluntary arbitrators (or panel of voluntary arbitrators) designated in
advance by the parties. It need not be mentioned that the parties to a CBA are the union and the company. Hence, only disputes involving the
union and the company shall be referred to the grievance machinery or voluntary arbitrators.
In the instant case, both the union and the company are united or have come to an agreement regarding the dismissal of private
respondents. No grievance between them exists which could be brought to a grievance machinery. The problem or dispute in the present case is
between the union and the company on the one hand and some union and non-union members who were dismissed, on the other hand. The
dispute has to be settled before an impartial body. The grievance machinery with members designated by the union and the company cannot be
expected to be impartial against the dismissed employees. Due process demands that the dismissed workers grievances be ventilated before an
impartial body. Since there has already been an actual termination, the matter falls within the jurisdiction of the Labor Arbiter.
ACCORDINGLY, the petition is DISMISSED. Public respondent Labor Arbiter is directed to resolve the complaints of private respondents
immediately.

CMC-ACE-UFSW vs. LAGUESMA

FACTS:
Respondent union filed petition for certification election. The Med-Arbiter granted the petition for certification election. Respondent Capitol
Medical Center (CMC) appealed to the Office of the Secretary. But the Order granting the certification election was affirmned.
On December 9, 1992, elections were held with respondent union garnering 204 votes, 168 in favor of no union and 8 spoiled ballots out of a total
of 380 votes cast. Med-Arbiter issued an Order certifying respondent union as the sole and exclusive bargaining representative of the rank and file
employees at CMC.
Respondent CMC again appealed to the Office of the Secretary of Labor the result of the election, it was denied. MR also denied. Respondent
CMCs contention was the supposed pendency of its petition for cancellation of respondent unions certificate of registration. In the said case, the
Med-Arbiter therein issued an Order which declared respondent unions certificate of registration as null and void. However, this order was
reversed on appeal by the Officer-in-Charge of the BLR in her Order. The said Order dismissed CMCs motion for cancellation of the certificate of
registration of respondent union and declared that it was not only a bona fide affiliate or local of a federation, but a duly registered union as well.
Respondent union, after being declared as the certified bargaining agent of the rank-and-file employees of respondent CMC, presented proposals
for the negotiation of a CBA. However, CMC contended that CBA negotiations should be suspended in view of the Order declaring the registration
of respondent union as null and void. In spite of the refusal of respondent CMC, respondent union still persisted in its demand for CBA
negotiations, claiming that it has already been declared as the sole and exclusive bargaining agent of the rank-and-file employees of the hospital.
Due to respondent CMCs refusal to bargain collectively, respondent union filed a notice of strike and later staged a strike on April 15, 1993. The
case was certified to the NLRC for compulsory arbitration.
It is at this point that petitioner union, on March 24, 1994, filed a petition for certification election among the regular rank-and-file employees of
the Capitol Medical Center Inc. It alleged in its petition that: 1) three hundred thirty one (331) out of the four hundred (400) total rank-and-file
employees of respondent CMC signed a petition to conduct a certification election; and 2) that the said employees are withdrawing their
authorization for the said union to represent them as they have joined and formed the union Capitol Medical Center Alliance of Concerned
Employees (CMC-ACE). They also alleged that a certification election can now be conducted as more that 12 months have lapsed since the last
certification election was held.
Respondent union opposed the petition and moved for its dismissal. It contended that it is the certified bargaining agent of the rank-and-file
employees of the Hospital, which was confirmed by the Secretary of DOLE and by this Court. It also alleged that it was not negligent in asserting its
right as the certified bargaining agent for it continuously demanded the negotiation of a CBA with the hospital despite the latters avoidance to
bargain collectively.
May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for certification election among the rank and file employees. On
appeal by respondent union, the public respondent Laguesma reversed and favored the respondent union. Hence this petition.

ISSUE:
Was there a bargaining deadlock between CMC and respondent union.

RULING:
While it is true that one year had lapsed since the time of declaration of a final certification result, and that there is no collective bargaining
deadlock, public respondent did not commit grave abuse of discretion when it ruled in respondent unions favor since the delay in the forging of
the CBA could not be attributed to the fault of the latter.
After respondent union was certified as the bargaining agent of CMC, it invited the employer hospital to the bargaining table by submitting its
economic proposal for a CBA. However, CMC refused to negotiate with respondent union and instead challenged the latters legal personality
through a petition for cancellation of the certificate of registration which eventually reached this Court. The decision affirming the legal status of
respondent union should have left CMC with no other recourse but to bargain collectively; but still it did not. Respondent union was left with no
other recourse but to file notice of strike against CMC for unfair labor practice with the NCMB. This eventually led to a strike.
A deadlock is the counteraction of things producing entire stoppage; There is a deadlock when there is a complete blocking or stoppage resulting
from the action of equal and opposed forces. The word is synonymous with the word impasse, which presupposes reasonable effort at good faith
bargaining which, despite noble intentions, does not conclude in agreement between the parties.
Although there is no deadlock in its strict sense as there is no counteraction of forces present in this case nor reasonable effort at good faith
bargaining, such can be attributed to CMCs fault as the bargaining proposals of respondent union were never answered by CMC. In fact, what
happened in this case is worse than a bargaining deadlock for CMC employed all legal means to block the certification of respondent union as the
bargaining agent of the rank-and-file; and use it as its leverage for its failure to bargain with respondent union. We can only conclude that CMC was
unwilling to negotiate and reach an agreement with respondent union. CMC has not at any instance shown willingness to discuss the economic
proposals given by respondent union.
It is only just and equitable that the circumstances in this case should be considered as similar in nature to a bargaining deadlock when no
certification election could be held. This is also to make sure that no floodgates will be opened for the circumvention of the law by unscrupulous
employers to prevent any certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule V, Book V of the Implement Rules should be
interpreted liberally so as to include a circumstance, e.g. where a CBA could not be concluded due to the failure of one party to willingly perform its
duty to bargain collectively.
WHEREFORE, the petition is hereby DISMISSED.