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As a worker or an employee, the most ideal situation

which could be envisioned is that he will be able to dictate the
terms and conditions of his work, even including how much he
will be paid, the manner and method by which he will work,
and such other terms and conditions. But that is not usually
the case. In practical terms, the terms and conditions of
employment are usually dictated upon by the employer at the
time of the hiring of the employee. In a sense, the contract of
employment (if ever there is one) is in the nature of a contract
of adhesion, e.g., there is already a printed form enumerating
the terms and conditions of employment and the employee
takes it or leaves it. From the time of hiring, you can already
note the inherent inequality between management and labor.
Thus, in cognizance of this inherent inequality in industrial
relations, the State has provided constitutional guarantees to
correct the same.

Who may join labor organizations?

Art. 249, Title V- COVERAGE- All persons employed in

commercial, industrial and agricultural enterprises, including
employees of government owned or controlled corporations
without original charters established under the Corporation
Code, as well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not,
shall have the right to self-organization and to form, join or
assist labor unions for purposes of collective bargaining:
PROVIDED however, THAT Supervisory employees shall not be
eligible for membership in a labor union of the rank and file
employees but may form, join or assist separate labor unions of
their own. Managerial employees shall not be eligible to form,
join or assist any labor unions for purpose of collective
bargaining. Alien employees with valid working permits issued
by the Department may exercise the right to self-organization
and join or assist labor unions for purposes of collective
bargaining if they are nationals of a country which grants the
same or similar rights to Filipino workers, as certified by the
Department of Foreign Affairs. (Rule II, Department Order 40-
All other workers, including ambulant, intermittent and
other workers, the self-employed, rural workers and those
without any definite employers may form labor organizations for their
mutual aid and protection and other legitimate purposes except collective

It must be noted that only registered legitimate labor unions have the
right to represent their members for collective bargaining and other
purposes; while the workers association can represent their members for
purposes other than collective bargaining.


Any employee, whether employed for a definite period or not, shall,

beginning on his first day of service, be considered an employee for purposes
of membership in any labor union. (Art. 283(c))

Security guards can now join a labor organization. While under the old
rules, security guards were barred from joining a labor organization of the
rank and file, but the present law, they may now freely join a labor
organization of the rank and file or that of a supervisory union depending on
their rank. (MERALCO vs. Secretary of Labor, GR No. 91902, 20 May 1991) The
Implementing rules of RA 6715 insofar as they disqualify security guards from
joining a rank and file organization, are null and void fir not being germane to
the object and purposes of EO 111 and RA 6715.


1. Managerial employees by necessary implication

2. Employee-members of a cooperative while employees who are at

the same time members of the cooperative cannot invoke the right to
collective bargaining because an owner cannot bargain with himself
or his co-owners. However, insofar as it involves cooperatives with
employees who are not members or co-owners thereof, certainly
such employees are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as are
enshrined in the Constitution and existing laws of the country.
(Cooperative Rural Bank of Davao City Inc. vs. Ferre-Calleja, 165
SCRA 725)

3. Confidential Employees ineligible to join a union, under

confidential employee doctrine; Exception: Confidential employees
without access to confidential labor relations information.
Examples: Confidential employees (such as division secretaries, staff
of general management, staff of the personnel department,
secretaries of audit, EDP , financial systems) are ineligible to form,
assist or join a labor union because by the nature of their functions,
they assist and act in a confidential capacity to or have access to
confidential matters, of persons who exercise managerial functions
in the field of labor relations, and the union might not be assured of
their loyalty in view of evident conflict of interests. (Philips
Industrial Dev. Inc. vs. NLRC, GR No. 88957, 25 June 1992) By the
nature of their functions, legal secretaries fall under the category of
confidential employees. (Metrolab Industries Inc. vs. Confesor, GR
No. 108855, 28 Feb. 1996) Also confidential employees performing
managerial functions cannot join unions. (MetroDrug Inc. vs.
Secretary of Labor and Employment, GR No. 109204, 18 May 1994)

However, if the access to confidential labor relations information is

merely incidental in the performance of their functions, they do not
have to be treated as confidential employees, thus eligible and have
the right to form or join a union. (SMC Supervisors and Exempt
Employees Union vs. Hon. Laguesma, 277 SCRA 370).

4. Alien employees without valid working permits cannot form or join a

union. Assuming they possess valid working permits, still they are not
allowed to enjoy right to self-organization if theyare nationals of a
country that does not grant the same right to Filipino workers. (Rule II,
Dept. Order 40-03)


Employees of all branches, subdivisions, instrumentalities and agencies

of government, including government-owned or controlled corporations with
original charters, except members of the ARMED FORCES OF THE PHILIPPINES,
may form, join or assist organizations, associations and/or federations of
exclusively government employees of their own choosing for the furtherance
and the protection of their interests (Sec. 1, Rule II, EO 180). High level
employees whose functions are normally considered as policy-making or
managerial or whose duties are of a highly confidential nature shall not be
eligible to join the organization of rank and file government employees (Sec. 3,
EO 180)

Government employees may, therefore through their union or

associations, either petition Congress for the betterment of the terms and
conditions of employment which are within the ambit of legislation or
negotiate with the appropriate government agencies for the improvement of
those which are not fixed by law. )SSS vs. CA 176 SCRA 686)
If there be any unresolved grievances, the dispute may be referred to
the Public Sector-Labor Management Council for appropriate action. But
employees in the civil service may not resort to strikes, walkouts and other
temporary work stoppages like workers in the private sector, to pressure the
Government to accede in their demands as so provided under Sec. 4, Rule III of
the Rules and Regulations to Govern the Exercise of the Right of Government
Employees to Self-Organization.

Constitutional and statutory basis;

Concept and rationale of collective bargaining

Consti., Art. 13, sec. 3. The State shall afford full protection to labor,
local and overseas, organized and unorganized, and promote full employment
and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization,

collective bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living
wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between

workers and employers, and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.

The State shall regulate the relations between the workers and
employers, recognizing the right of labor to its just share in the fruits of
production, and the right of entrepreneurs to reasonable returns on
investments, and to expansion and growth.

Art. 211 (a), Labor Code cf. Art. 255, LC

Art. 211. Declaration of policy. -- It is the policy of the State: (a) to

promote and emphasize the primacy of free collective bargaining and
negotiations, as modes of settling labor or industrial dispute.

Art. 255. Exclusive bargaining representation and workers

participation in policy and decision-making. -- The labor organization
designated or selected by a majority of the employees in an appropriate
bargaining unit shall be the exclusive representative of the employees in such
unit for the purpose of collective bargaining. However, an individual
employee or a group of employees shall have the right at any time to present
grievances to their employer.

Any provision of the law to the contrary notwithstanding, workers

shall have the right, subject to such rules and regulations as the Secretary of
Labor and Employment may promulgate, the participate in policy and
decision-making processes of the establishment where they are employed
insofar as said processes will directly affect their rights, benefits and welfare.
For this purpose, workers and employers may form labor-management
councils: Provided, that the representatives of the workers in such labor-
management councils shall be elected by at least the majority of all
employees in said establishment.

Kiok Loy vs. NLRC, 141 SCRA 179 (1986)

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 resonsibility of the employer and the union, and is characterized
as a legal obligation. So much so that Art. 249 (g) of the Labor Code makes it
a ULP for the 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 an agreement, if requested by either party.

Caltex Refinery Empl. Union vs. Brillantes, 279 SCRA 218 (1997)

Bargaining is not equivalent to an adversarial litigation where rights

and obligations are delineated and remedies applied. It is simply a process of
finding a reasonable solution to a conflict and harmonizing opposite
positions into a fair and reasonable compromise.


Collective bargaining is a procedure looking towards the execution of a

labor contract between the employer and the bargaining agent, regarding
wages, hours of work and other terms and conditions of employment.


Basically: (a) the employer, as represented by the members of the
Management panel; and (b) the employees, as represented by the union
certified as the exclusive bargaining agent/representative in a certification
election called for such purpose.

Note 1: The duty to bargain collectively exists only

between the employer and the employees. Hence, in the
case of Planters Products Employees Union vs. Planters
Products where a company employed an independent
contractor who had his own employees assigned to the plant,
the unionized contract workers cannot demand for collective
bargaining with the company, inasmuch as they are employees
of the contractor and not of the company.

Note 2: As regards the bargaining representative:

(a) The union representative need not be an employee in the

unit. However, the union officer must an employee in the unit.
(Example: Union which is certified as the exclusive bargaining
agent may be represented by the officers of the federation to
which it is affiliated, during the collective bargaining

(b) The union that gets the majority vote in a certification

election, once it is certified as the exclusive bargaining agent,
does not act for its members alone. It represents all the
employees in the bargaining unit. (Mactan Workers Union vs.

2.1 Definition of the appropriate bargaining unit -

Dept. Order No. 9 (April 1997), Rule I, Sec. 1 (q) -

Bargaining unit refers to a group of employees sharing mutual interests within a

given employer unit, comprised of all or less than all of the entire body of employees
in the employer unit or any specific occupational or geographical grouping within
such employer unit.

Golden Farms vs. Sec. of Labor, 234 SCRA 517 - A bargaining unit
has been defined as a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which
the collective interest of all of the employees indicate to be best suited
to serve the reciprocal rights and duties of the parties under the
collective bargaining provision of the law.


San Miguel Corp. vs. Laguesma, 236 SCRA 595

The fundamental factors in determining the appropriate collective bargaining unit

are: (1) the will of the employees [Globe doctrine]; (2) the affinity and unity of the
employees interests, such as the substantial similarity of work and duties, or of
compensation and working conditions [Substantial or Mutual Interests rule;
community of interest]; (3) prior collective bargaining history; and (4) similarity of
employment status.

Toyota Motor Phils. vs. Toyota MP Labor Union, 268 SCRA 571 (1997)

According to Rothenberg, an appropriate bargaining unit is a group of

employees of a given employer, composed of all or less than all of the
employees which the collective interest of all of the employees indicate
to be best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provision of the law. In Belyca
Corporation vs. Ferrer-Calleja, we defined the bargaining unit as the
legal collectivity for purposes of collective bargaining purposes
whose members have substantially mutual bargaining interests in
terms and conditions of employment as will assure to all
employees their collective bargaining rights.

2.2 Generally -- community of interest

The determinative factor in finding out what kind of workers may

properly constitute an appropriate bargaining unit is the SUBSTANTIAL
SIMILARITY OF WORK AND DUTIES. The most efficatious bargaining
unit is one which is comprised of workers enjoying COMMUNITY OR
MUTUALITY OF INTERESTS. This is so because the basic test of a
bargaining units acceptability is whether it will best assure to all the
employees concerned of the exercise of their collective bargaining

Phil. Land-Air-Sea Labor Union vs. CIR, 110 Phil. 176

In making judgments about community of interests, the Board will

look to the following factors: (1) similarity in scale and manner of
determining earnings; (2) similarity in employments benefits, hours of
work, and other terms and conditions of employment; (3) similarity in
the kind of work performed; (4) similarity in the qualifications, skills
and training of employees; (5) frequency of contact or interchange
between the employees; (6) geographic proximity; (7) continuity or
integration of production processes; (8) common supervision and
determination of collective bargaining; (9) history of collective
bargaining; (10) desires of the affected employees; and (11) extent of
union organization.
Pagkakaisa ng Manggagawa sa Triumph vs. Calleja, 181 SCRA 119

Where the supervisory employees sought to be represetned by the

union are actually NOT INVOLVED in policy making, and their
recommendatory powers are not even instantly effective since they are
subject to review by at least three (3) managers (dept. mgr., personnel
mgr. And general manager), then it is evident that these employees doe
not possess managerial status.

The fact that their work designations are either managerial or

supervisory is of no moment, considering that it is the nature of
their functions and NOT SAID NOMENCLATURES which determines
their respective status.

A careful examination of the records of this case reveals no evidence

that rules out the commonality or community of interest among the
rank-and-file members of the petitioners, and the herein declared rank-
and-file members of the respondent union. Instead of forming another
bargaining unit, the law requires them to be members of the existing
one. The ends of unionism are better served if all the rank-and-file
members with substantially the same interests and who invoke their
right to self-organization are part of a single unit so they can deal
with their ER with JUST ONE AND YET POTENT VOICE. The Ees
bargaining power with management is strengthened thereby.

San Miguel vs. Laguesma, 236 SCRA 595

Facts: Petition for CE of North Luzon Magnolia Sales Force, seeking to

represent all regular sales personnel of Magnolia in the North Luzon
area. This was opposed by the company, on the ground of prior
bargaining history, re: each sales office/plant/warehouse to be
considered a separate bargaining unit.

Decision: Existence of prior bargaining history is neither decisive nor

conclusive in determination of an appropriate bargaining unit, the more
decisive being the mutuality or community of interest in terms of the
employment conditions and type of work performed. .

contra: SMC Employees Union vs. Confesor, 262 SCRA 81 [1996]

Spin-off of Magnolia and San Miguel Foods Companies from the San
Miguel Corporation as separate corporate entities. Existing CBA
included all four divisions. During the renewal or renegotiation for two
years on the economic provisions, spin-off corporations were already in
existence. The Union insisted that the employees of the spun-off
corporations were still to be considered as part of the appropriate
bargaining unit.

Decision: Considering the spin-off, the companies would consequently

have their respective and distinctive concerns in terms of the nature of
work, wages, hours of work and other conditions of employment. The
interests of the employees in different companies would perforce differ.
SMC is engaged in beer manufacturing; Magnolia with manufacturing
and processing of dairy products; SM Foods with production of feeds
and processing of chicken. The nature of the products and sales of
business may require diff. Skills which must necessarily be
commensurated by different compensation packages; different volumes
of work and working conditions. It would then be best to have
separate bargaining units for different companies where the
employees can bargain separately accdg. to their needs and working

2.3 Globe Doctrine -- desire of employees

The desires of the employees are relevant to the determination of the

appropriate bargaining unit, but not controlling under this jurisdiction.
It is only when, all other considerations being equally balanced, the
determining factor would be the desire of the employees themselves.

Globe Machine, 3 NLRB 294 [1937]

Three AFL unions representing different categories of employees (metal

polishers and buffers; punch press operators; others) of Globe Machine
filed petitions for CE. Another union (UAW) intervened, claiming
representation of all production and maintenance workers.

Three unions contended that it would be most feasible to have separate

bargaining units, and that there was a previous bargaining history of
separate units.

UAW contended that the interrelational and interdependence of the

various units constitute proof of feasibility of one company-one union
policy, and was shown by negotiation of plant-wide agreement (not

NLRB ruled that in such a case where all other considerations being
equally balanced, the determining factor would be the desire of the
employees themselves.

2.4 One Company - One Union; modifications under Rep. Act. No. 6715

The proliferation of unions in a single employer unit is discouraged as a

matter of policy unless there are compelling reasons which would deny
a certain class of employees the right to self-org. for purposes of
collective bargaining. Thus: Managerial employees are prohibited by
law to join, assist or form labor union; supervisory are prohibited from
joining rank-and-file.

Article 245, Labor Code. Ineligibility of managerial employees to join

any labor organization; right of supervisory employees. Managerial
employees are not eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees, but may join, assist or form
separate labor organizations of their own.

Philtranco vs. BLR, 174 SCRA 388

It is natural in almost all fairly sized corporations to have different

groups of workers discharging different functions. No company
could possibly have all employees performing exactly the same
work. Variety of tasks is to be expected. It would not be in the
interest of sound mgmt.-labor relations if each group of employees were
to be allowed to form their own separate bargaining unit. Certainly
there is commonality in interests of all workers: they are all
interested in the progress of their company and in each worker
sharing the fruits of their endeavors equitably and generously.
While there may be differences in the nature of their individual jobs,
such difference is not substantial as to warrant the formation of
separate unions.

Indophil Textile Mills Workers Union vs. Calica, 205 SCRA 697

Acrylic Indophil Corporation cannot be considered an extension of

Indophil Corporation, as to cover in one bargaining unit all employees
thereof. Note separate corporate entities: doctrine of piercing the veil of
corporate entity not applied.

Knitjoy Manufacturing vs. Ferrer-Calleja, 214 SCRA 174

Article 245 of Labor Code expressly allows for supervisory employees

who are not performing managerial functions to join, assist or form
unions, but bars them from membership in the rank-and-file. The
provisions obviously allows more than one union in the company.
Toyota Motor Phils. vs. Toyota MP Labor Union, 268 SCRA 571

A labor organization composed of both rank-and-file and supervisory

employees is no labor organization at all. It cannot, for any guise or
purpose, be a legitimate labor organization, and consequently, cannot
have the right to file a petition for CE for purposes of collective
bargaining. It becomes necessary therefore, anterior to the granting of
an order allowing for a CE, to inquire into the composition of any labor
organization whenever the status of the labor org is challenged on the
basis of Art. 245 of the Labor Code.

Supervisory employees: those who, in the interest of the employer,

effectively recommend managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but require the
use of independent judgment.

In relation to:

Managerial employees: one who is vested with powers or

prerogatives to lay down and execute management policies, including
right to hire, transfer, suspend, lay-off and recall.

Villuga vs. NLRC: A managerial employee is one whose: (a) primary

duties consists of performance of work directly related to management
policies; (b) customarily and regularly exercises discretion and
independent judgment relative thereto; (c) regularly and directly assists
in the management of the establishment; (d) does not devote 20% of his
time to work other than those described above.

Duty to bargain collectively

3.1 Defined:

Art. 252, Labor Code. Meaning of duty to bargain collectively. -- The

duty to bargain collectively means THE PERFORMANCE OF A MUTUAL
EMPLOYMENT including proposals for adjusting 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
Kiok Loy vs. NLRC, supra.

Sweden Ice cream company, with an already certified union. Company

given CBA proposals and request for counter-proposal. Company
ignored the request. Union filed a case for ULP after notice of strike.
NLRC for Union and declared the proposals as the CBA.

3.2 When duty to bargain exists/begins

a) In the absence of a CBA

Art. 251, Labor Code. Duty to bargain collectively in the absence of

collective bargaining agreements. -- In the absence of an agreement
or other voluntary arrangement providing for a more expeditious
manner of collective bargaining, it shall be the duty of the employer
and the representatives of the employees to bargain collectively in
accordance with the provisions of this Code.

Lakas Manggagawa vs. Marcelo, 12 Nov. 1982

It is essential to the right of a putative bargaining agent to

represet the employees that it be the delegate of a majority of the
employees, and conversely, AN EMPLOYER IS UNDER DUTY TO

A natural consequence of this 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 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 the demand be
made in good faith, and not merely as a pretext or device for
delay or evasion. The employers right is however subject to
reasonable proof only.

b) With the existence of a CBA - only during freedom period

Art. 253, Labor Code. Duty to bargain collectively when there

exists a collective bargaining agreement. -- When there is a
collective bargaining agreement, the duty to bargain collectively
shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. HOWEVER, EITHER PARTY CAN
EXPIRATION DATE. It shall be the duty of both parties to keep the
status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period
and/or until a new agreement is reached by the parties.

Note 1. When there is a collective bargaining agreement, the duty

to bargain collectively shall also mean that neither party shall
terminate or modify such agreement during its lifetime.

However, either party can serve a written notice to terminate or

modify the agreement at least 60 days prior to the expiration day.

It shall be the duty of each party to keep the status quo and to
continue in full force and effect the terms and conditions of
the existing CBA during the 60-day period, and/or until a new
agreement is reached by the parties.

Note 2: As regards CBA about to expire, the law provides for an

AUTOMATIC RENEWAL CLAUSE, e.g., that the terms and conditions
of the existing CBA shall continue to be in full force and effect
during the sixty-day freedom period (Union of Filipro Ees. vs.
NLRC, 192 SCRA 414), or until a new CBA is reached. Thus,
depiste the lapse of the effectivity of the old CBA, the law considers
the same as continuing in full force and effect until a new CBA is
executed. (Lopez Sugar vs. FFW, 30 Aug. 1990)

Note 3: In both instances however, the duty to bargain collectively

is therefore an obligation of both the employer and the

3.3 Effect of refusal to bargain - constitutes ULP under Art. 248 (g)

Art. 248 (g), Labor Code. Unfair labor practices of employers. -- To

violate the duty to bargain collectively as prescribed by this Code.

If the employer is guilty of violating the duty to bargain collectively in

good faith, the employer may be held guilty of ULP under Art. 258 (g).
Furthermore, the unions draft CBA proposals may unilaterally be
imposed upon the employer as the collective bargaining agreement to
govern their relationship. Hence, the case of Divine Word.

Divine Word Univ. vs. NLRC, 213 SCRA 759

Petitioners contention that the Unions proposal may not be

unilaterally imposed on it on the ground that a CBA is a contract
where in the consent of both parties is indispensable, is devoid of

A similar argument has already been disregarded in the case of KIOK

LOY, where the SC upheld the order of the NLRC declaring the unions
draft CBA proposal as the collective agreement which should govern
the relationship between the parties. That case is applicable because
of the similarities: (a) the union made a definite request to bargain
and submitted its bargaining proposals; (b) the University made no
counter-proposal whatsoever.

As stated in Kiok Loy, a companys refusal to make counter

proposals, if considered in relation to the entire bargaining
process, may indicate bad faith, and this is especially true where
the Unions request for the counter-proposal is left unanswered.
While it is not obligatory for either party to precipitately accept or
agree to the proposals of the other, an erring party should not be
tolerated and allowed with impunity to resort to schemes feigning
negotiations by going through empty gestures.

Hence, Divine Word may not validly assert that its consent should be a
primordial consideration in the bargaining process. By its acts, no
less that its inaction which bespeck of its sincerity, it has forfeited
whatever rights it could have asserted as an employer.

3.4 When duty to bargain ceases

1. Upon actual loss of majority status of the bargaining representative

without fault of the employer; or

2. Where a representation question or dispute has arisen in the unit.



As had been intimated earlier, the constitutional guarantee of the workers right
to collective bargaining is an implicit cognizance of the inherent inequality in the
economic relationship between labor and management. Management controls
and owns the capital, the disposition and direction of which is entirely within
management prerogatives, in its quest for PROFITS.

On the other hand, the workers are economically dependent upon capital, and
hence, the weaker of the two. Note however that despite this, there is no
gainsaying the fact that without the workers efforts, profits could not be had.
Thus, it is but just that they should be given their equitable share in the profits.

In the context of a depressed economy such as ours, and the lack of employment
opportunities, employer-employee relationships may thus be subject to abuses
by management. Hence, the State regulates the relationship through the
promulgation and implementation of laws which are intended to protect the
interests of labor. One such right is thus collective bargaining.

1. Submission of Proposals

As intimated earlier, collective bargaining allows for a means toward the ideal
laissez faire condition, where the employees stand on a more or less equal
footing with the employer, in threshing out the conditions and terms of their

It is in pursuance of the better terms and conditions of their employment that

the Union would seek vast improvements therein. Thus, in the submission of
their proposals, the Union usually maximizes their proposals (SUNTOK SA
BUWAN), in cognizance that these proposals will usually be whittled down
during the negotiation proper.

On the other hand, the Company will usually maintain a very conservative
stand. In the context of its quest for profits, the Company will as much as
possible not want to give anything more than that which is mandated by
law. Thus, this is where the bargaining power and the relative strength of the
Union comes in. This is in turn, backed up by its constitutional rights to
strike and to undertake concerted activities --- but note that this must all be
done in accordance with law.

2. Composition of Panels; requirements

2.1 Appointment of the members of the respective panels; by whose


For the management panel: by authority of the President or the

Board of Directors/Trustees, depending upon the By-laws of the

Usually, Board of Directors/Trustees give authority by way of a

resolution passed and approved during a regular meeting, there being
a quorum to transact business.

For the union panel: usually the officers of the union are members of
the panel, duly given authority by their own Board.
2.2 Presentation of the appropriate Special Power of Attorney

2.3 Identification of Chairman and Recorder

Chairman: note that it is only the chairman that can bind their
respective panel.

Recorder: to ensure the recording of the minutes of each meeting or

conference. The minutes are useful later, in case there arises a question
of the interpretation and/or implementation of the CBA provisions.

3. Determination of ground rules (on 1st mtg.

3.1 What will be considered as Working Documents

e.g., Existing CBA and the proposals of Union

The following documents may considered as the working documents of

the CBA negotiations: (a) Original CBA; (b) Proposals of the Union for a
new CBA; and (c) Counter-proposals of the Management shall be
considered as references.

3.2 Quorum

The quorum for business to be transacted shall be at least: (a) three [3]
members for the Management Panel; and (b) three [3] members for the
Union Panel.

3.3 Postponement

It may be agreed by both panels that should a postponement be

necessary, to inform the other panel, in writing, of such postponement
within twenty four (24) hours. Should the Union request for a
postponement, such notice should be addressed to Chairman or
Recorder of the Management panel; should the Management request
for a postponement, such notice should be addressed to the President of
the Union or the recorder.

3.4 Recording of the Minutes

Both panels should appoint their respective recording secretary.

(The recording secretary for the Institute shall be Ms. Rosanna Roces,
while the recording secretary for the Union panel shall be Ms. Ara
Both recording secretaries shall consult with each other and make the
common minutes for the past meeting.

Mechanics: The Union recording secretary may fax their minutes to the
Management recording secretary who will make the common minutes.
The common minutes must be faxed at least one (1) day immediately
prior to the next scheduled meeting, in order that the Union may review
the same.

3.5 Signing of the Common Minutes

The common minutes should all be signed before the actual start of
the negotiations. Hence, any correction, amendments or modifications
to the common minutes must be made prior to the start of the

3.6 Order of Discussion or Negotiations

Both panels may agree to discuss non-economic provisions first

(inclusive of political and union rights), prior to the discussion on all
economic provisions.


Both panels may agree to follow the order provided in the Working
Documents (CBA 1996) in accordance with the above priority.

3.7 Setting of the Agenda

In order that the discussions per meeting will be both fast and
productive, both panel should agree that before adjournment of each
meeting, that they will enumerate the agenda for discussion on the next

3.8 Related expenses

It was agreed that expenses for the collective bargaining negotiations

pertaining to merienda, shall be for the account of the Management.

3.9 Recess

Recess during negotiations shall be allowed upon request of either


3.10 Venue, frequency and time of meetings

Usually better to set it at a particular day and time, e.g., every Friday at 10:00 a.m.
Note that for union members, this is considered time-in.

The time frame per each meeting may be extended by mutual consent of
both parties, should the same be deemed necessary under the

4. What are Bargainable Issues - Art. 252, LC

Art. 252, Labor Code. 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 the wages, hours of work and all
other terms and conditions of employment including proposals for
adjusting 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.

4.1 Mandatory Subjects

a. As regards minimum standards provided by the Labor Code and

effect of substandard contract

Phil. Am. Mgmt. vs. Phil. Am. Ees. Assn., 51 SCRA 98 (1971)

There is an area placed beyond the sphere of bargaining between the

parties. Included therein is the question of minimum wages. It is
understandable why it is so. For legislation of that character
proceeds from the premise that THERE IS A FLOOR BELOW WHICH
decent living conditions. Such an enactment is compoulsory in nature;
not even the consent of the employees themselves suffices to defeat its
WAGES IS NOT NEGOTIABLE. What the law decrees must be obeyed.
It is as simple as that.

NOTE: By entering into a sub-minimum contract, there arises a

cause of action on the part of the affected employees to
DECERTIFY the Union (Article 239, LC).

Nestle Phils. vs. NLRC, 193 SCRA 504 (1991)

The companys contention that the retirement plan being non-

contributory and hence, non-negotiable, is not well-taken. The NLRC
correctly observed that the inclusion of the retirement plan in the CBA
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.

The fact that the retirement plan is non-contributory (i.e. that the
employees do not contribute anything to the operation of the plan)
does not make it a non-issue in CBA negotiations. As a matter of fact,
almost all of the benefits which the company has granted to its
employees are non-contributory, such as salary increases, rice
allowances, mid-year bonuses, 13th and 14th month pay, seniority pay,
medical and hospitalization plans, health and dental services,
vacation, sick and other leaves with pay, are non-contributory.

b. Grievance procedure and voluntary arbitration

The grievance machinery as provided in the CBA usually

defines the following: (a) composition of the panel; (b) procedure at
plant level; and (c) what is to be considered as a grievance. If the
definition includes ULP as subject to the grievance procedure, a
strike in violation of its terms will be illegal.



Under the Labor Code, all grievances submitted to the grievance

machinery which are not settled within 7 calendar days from the
date of its submission shall automatically be referred to voluntary
arbitration prescribed in the CBA (Art. 260, LC).

For this purpose, parties to a CBA shall name and designate in

advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or
include in the agreement a procedure for the selection of such VA or
panel of VAs, preferably from a listing of qualified VAs duly
accredited by the Board.

The VA or panel of VAs shall have original and exclusive jurisdiction

to hear and decide all unresolved grievances arising from the
jurisdiction to hear and decide all unresolved grievances arising
from the interpretation or implementation of the CBA and those
arising from the interpretation or enforcement of company
personnel policies. Violations of a CBA, except those which are
gross in character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under the CBA.
Gross violations of the CBA shall mean flagrant and/or
malicious refusal to comply with the economic provisions of the
agreement (Art. 260, LC).

The Commission, its Regional Offices and the Regional Directors of

the Department of Labor & Employment shall not entertain disputes,
grievances or matters under the exclusive and original jurisdiction
of the VA or VA panel and shall immediately dispose and refer the
same to the Grievance Machinery or Voluntary Arbitration provided
in the CBA (Art. 261, LC).

The VA or VA panel, upon agreement of the parties, shall also hear

and decide all other labor disputes including unfair labor practices
(ULPs) and bargaining deadlocks (Art. 262, LC).

The VA shall have the power to hold hearings, receive evidence and
take whatever action is necessary to resolve the issue/s subject to
the dispute, including efforts to effect a voluntary settlement
between the parties.

All parties to the dispute shall be entitled to attend the arbitration

proceedings. The attendance of any third party or the exclusion of
any witness from the proceedings shall be determined by the VA or
VA panel. Hearings may be adjourned for cause or upon agreement
by the parties.

Unless the parties agree otherwise, it shall be mandatory for the VA

or the VA panel to render an award or decision within 20 calendar
days from the date of submission of the dispute to VA.

c. union dues, special assessment

Art. 241, Labor Code. Rights and conditions of membership in a labor


(g) No officer, agent or member of a labor organization shall collect any fees, dues
or other contributions in its behalf or make any disbursement of its money or funds
unless he is duly authorized pursuant to its constitution and by-laws;

(h) Every payment of fees, dues or other contributions by a member shall be

evidenced by a receipt signed by the officer or agent making the collection and
entered into the record of the organization to be kept and maintained for the
(n) No special assessment or other extraordinary fees may be levied upon the
members of a labor organization unless authorized by a written resolution of a
majority of all the members of a general membership meeting duly called for the
purpose. The secretary of the organization shall record the minutes of the meeting
including the list of all members present, the votes cast, the purpose of the special
assessment or fees and the recipient of such assessment or fees. The record shall be
attested to by the president.

(o) Other than for mandatory activities under the Code, no special assessments,
attorneys fees, negotiation fees or any other extraordinary fees may be checked off
from any amount due to an employee, without an individual written authorization
duly signed by the employee. The authorization should specifically state the
amount, purpose and beneficiary of the deduction, if any.

xxx Any violation of the above rights and conditions of membership shall be a
ground for the cancellation of union registration or expulsion of officer from office,
whichever is appropriate. At least thirty percent (30%) of all the members of a
union or any member or members specifically concerned may report such violation
to the Bureau. xxx

Art. 222 (b), Labor Code. Appearances and fees. -- (b) No attorneys
fees, negotiation fees or similar charges of any kind arising from any
collective bargaining negotiations or conclusion of the collective
agreement shall be imposed on any individual member of the
contracting union; Provided, however, that attorneys fees may be
charged against union funds in an amount to be agreed upon by
the parties. Any contract, agreement or arrangement of any sort
to the contrary shall be null and void.

Palacol vs. Calleja, 26 Feb. 1990



A special assessment cannot be validly deducted by the Union certified

as coll. barg. agent from the lump-sum pay of its members granted
under the CBA, especially so that there had been subsequent
disauthorizations by the majority of the union members, and that
the procedure for imposition of special assessment provided by the
Labor Code was not followed.

Special assessment was for purposes of putting up a cooperative and

credit union, for purchase of vehicles and other items needed for the
benefit of the officers and general membership, and for payment of
services rendered by union members. Allocation thereof at discretion
of Union President.
The Union, contrary to the legal procedure, held local membership
meetings on different occasion, on different dates and various venues.
It submitted only minutes of said meetings when what is required is a
written resolution adopted at the general meeting. Worse, only a
union director recorded the minutes and not the secretary, no record
of votes or list of members present.

d. No Strike - No Lock-out clause


MANAGEMENT and UNION agree that the way to preserve job

security and improve the welfare of the employees is to increase the
goodwill xxx. It is therefore to the mutual interest of both parties that
the business of the company will continue without inconvenience to
the public, and as such, MANAGEMENT and UNION agree as follows:

1. UNION agrees that there shall be no strike, walk-outs,

stoppage, slowdown, boycotts, xxx whether sympathetic or general,
during the effectivity of this CBA.

2. MANAGEMENT agrees that there shall be no lock-out during

the effectivity of this CBA.

The No Strike-No Lockout Clause is not an infringement or

undue restriction of the constitutional right to strike, because
said clause is applicable only to ECONOMIC STRIKES, but not to
ULP strikes. In other words, even during the effectivity of the
CBA, the Union may still strike if the company commits ULP as
enumerated in Article 248 of the Labor Code. (PHIL. METAL

General rule:

A No strike - No Lock-out clause applies only to economic

strikes, and not to ULP strike. (Phil. Metal Foundries case).

Exception: (but this is no longer controlling; already overturned and

modified by the new rules which reverts back to the Phil. Metal
Foundries case)

When the CBA provides for a conclusive arbitration clause, in which

case, even ULP strikes are subject to the no-strike no lock-out clause.
(Union of Filipro vs. Nestle Phils.)

4.2 Other non-mandatory subjects

a. Management prerogatives clause

The above provisions notwithstanding, MANAGEMENT is not

precluded from exercising its management prerogatives,
including but not limited to the exclusive right to hire and appoint
employees subject to such reasonable rules and regulations it may
prescribe, to transfer, demote, suspend, lay-off, dismiss or impose
any form of disciplinary action upon its employees, or such other
matters relative to the conduct of the business of the company.

b. Union security clauses (union shop/closed shop, etc.)

Example 1:

MANAGEMENT agrees to require as a condition of employment

for those employees within the bargaining unit who are either
members of the ABC FEDERATION on the date of the effectivity of
this CBA, or may join the union during the effectivity of this
Agreement, and that they shall not voluntarily resign from the
union earlier than 60 days prior to expiration of this Agreement.

Example 2:

Section 1. Employees of the COMPANY who at the signing of this

Agreement are members of the UNION and those who
subsequently become members thereof shall maintain their
membership with the UNION for the duration of this Agreement
as a condition of employment.

Section 2. Members of the Union who cease to be members of the

UNION in good standing by reason of resignation or expulsion
shall not be retained in the employment of the COMPANY.

NOTE: A Union security clause cannot have any retroactive effect under Article 248
of the Labor Code, and as such, will not apply to employees who are already
members of another union at the time of the effectivity of the CBA.

ART. 248. Unfair labor practices of employers. - It shall be

unlawful for an employer to commit any of the following unfair
labor practice:


(e) To discriminate in regard to wages, hours of work, and other

terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in
this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining
agent as a condition for employment, except those employees
who are already members of another union at the time of the
signing of the collective bargaining agreement. Employees of
an appropriate collective bargaining unit who are not members of
the recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by
members of the recognized collective bargaining agent, if such
non-union members accept the benefits under the collective
agreement: Provided, that the individual authorization required
under Article 242, paragraph (o) of this Code shall not apply to
the non-members of the recognized collective bargaining agent;

c. Signing bonus:

Caltex Refinery Assn. vs. Brillantes, 279 SCRA 218

Although proposed by petitioner UNION, the signing bonus was

not accepted by the Company. Besides, a signing bonus is not a
benefit which may be demanded under the law. Rather, it is now
claimed by petitioner Union under the principle of maintenance
of existing benefits of the old CBA. However, as clearly
explained by the respondent Company, a signing bonus may
not be demanded as a matter of right. If it is not agreed upon
by the parties, or unilaterally offered as an additional
incentive by the company, the condition for awarding it must
be duly satisfied. In the present case, the condition sine qua non
for its grant a non-strike was not complied with.

5. Bargaining Deadlock

5.1 When is there a deadlock in collective bargaining

Deadlock is defined as the counteraction of things producing an

entire stoppage; a state of inaction or of neutralization caused by the
opposition of persons or factions; STANDSTILL.

During negotiations, it is a situation where both parties have reached

a point beyond which there is no longer any compromise, e.g.,
unacceptable. The word is synonymous to an impasse, which in
labor relations law, presupposes reasonable effort at good faith
bargaining which, despite noble intentions, does not conclude in an
agreement between the parties.
Capitol Medical Center Alliance of Concerned Employees
vs. Laguesma, 267 SCRA 503 (1997)

In the case of Divine Word University of Tacloban vs. Secretary of

Labor and Employment, we had the occasion to define what a
deadlock is, viz:

A deadlock is xxx the counterclaim of things producing entire

stoppage; xxx. There is a deadlock when there is a complete blocking
or stoppage resulting from the action of equal and opposed forces
xxx. The word is synonymous with the word impasse, which xxx
presupposes reasonable effort at good faith bargaining which, despite
noble intentions, does not conclude in agreement between the

If the law proscribes the conduct of a certification election when

there is a bargaining deadlock submitted to conciliation or
arbitration, with more reason should it not be conducted if, despite
attempts to bring an employer to the negotiation table by the
certified bargaining agent, there was no reasonable effort in
good faith on the part of the employer to bargain collectively.

This is what is strikingly different between the Kaisahan case and the
case at bench for in the latter case, there was proof that the certified
bargaining agent, respondent union, had taken an action to legally
coerce the employer to comply with its statutory duty to bargain
collectively, i.e., charging the employer with unfair labor practice and
conducting a strike in protest against the employer' refusal to
bargain. 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,

5.2 Remedies - Notice of strike or notice of lock-out 30-

day cooling-period and 7-day strike ban.

Art. 263 (c), Labor Code. Strikes, picketing and lock-outs. -- (c) In
cases of bargaining deadlocks, the duly certified or recognized
bargaining agent may file a notice of strike or the employer may
file a notice of lock-out with the Ministry (Department) at least
30 days before the intended date thereof.

In cases of unfair labor practice, the period of notice shall be 15

days and in the absence of a duly certified or recognized bargaining
agent, the notice of strike may be filed by any legitimate labor
organization in behalf of its members. However, in case of dismissal
from employment of union officers duly elected in accordance with
the union constitution and by-laws, which may constitute union
busting where the existence of the union is threatened, the 15-day
cooling off period shall not apply, and the union may take action

(f) A decision to declare a strike must be approved by a majority of

the total union membership in the bargaining unit concerned,
obtained by secret ballot in meetings or referenda called for that
purpose. Xxx The decision shall be valid for the duration of the
dispute based on substantially the same grounds considered when
the strike or lockout vote was considered. Xxx. In every case, the
union or the employer shall furnish the (Department) the
results of the volting at least seven days before the intended date
of strike or lockout, subject to the cooling-off period herein


1. Definition

Dept. Order No. 9, Rule I. Definition of terms. (pp) Collective bargaining

agreement refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit.

B5 R1 S1 (jj), Impl. Rules and Regulations. Collective bargaining

agreement refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit, including
mandatory provisions for grievances and arbitration machineries.

Davao Integrated Port Stevedoring vs. Abarquez, 220 SCRA 197 (1993)

While the terms and conditions of a CBA constitute the law between the
parties, it is not an ordinary contract to which is applied the principles
of law governing ordinary contracts. A CBA, as a labor contract within
contemplation of Art. 1700 of the Civil Code, is not merely contractual in
nature but is impressed with public interest. Thus, it must yield to the
common good. As such, it must be construed liberally rather than narrowly
and technically, and the courts must place a practical and realistic
construction upon it, giving due consideration to the context in which it is
negotiated and the purpose which it is intended to serve.

2. Signing and ratification

2.1 The collective bargaining agreement should be signed by the members

of both panels.

2.2 After the signing by the panels, a majority of the employees covered by
the appropriate bargaining unit should ratify the same.

2.3 Note the posting requirement in at least two conspicuous places in the
establishment at least five (5) days before its ratification

2.4 If certified CBA, contract bar rule applies and operates as a bar to a
representation question.

2.5 Note however that a CBA is valid even without certification, and will be
considered as binding upon the parties.

3. Procedure in registration of CBA

Dept. Order No. 9 (April 1997), Rule XVI, Secs. 1, 2 & 5:

(See also: B5 R9 S1, IRR)

Section 1. Registration of collective bargaining agreement. The parties to a

collective bargaining agreement shall submit to the appropriate Regional
Office two (2) duly signed copies thereof within thirty (30) calendar days
from execution. Such copies of the agreement shall be accompanied with
verified proof of posting in two conspicuous places in the work place and of
ratification by the majority of all the workers of the bargaining unit.

Such proof shall consist of copies of the following documents certified

under oath by the union secretary and attested to by the union

(a) Statement that the collective bargaining agreement was posted in at

least two conspicuous places in the establishment at least five (5) days before
its ratification; and
(b) Statement that the collective bargaining agreement was ratified by
the majority of the employees in the bargaining unit.

The Regional Office shall assess the employer for every collective
bargaining agreement a registration fee of one thousand pesos (P1,000.00).

The Regional Office shall retain one (1) copy of the agreement for its
file and transmit one (1) copy thereof tot he Bureau within five (5) calendar
days from its registration. The Regional Office shall issue a certification of
registration within five (5) calendar days from receipt of the agreement and
the proofs of posting and ratification as required herein.

Section 2. Registration of agreement resulting from awards by the Secretary,

the Commission or the Voluntary Arbitrator. -- Where the agreement results
from an arbitration award, the same shall be registered in accordance with
the immediately preceding section, except that the requirement of ratification
and proof thereof shall be dispensed with.

Section 5. Appeal. -- The decision of the Regional Director granting or

denying an action to declare the registration ineffectual may be appealed to
the Bureau on the ground of grave abuse of discretion within ten (10) days
from receipt of the parties of a copy thereof. The Bureau shall have twenty
(20) dyas within which to resolve the appeal and its decision shall be final
and executory.

Art. 231, Labor Code. Registry of unions and file of collective agreements. --
The Bureau shall keep a registry of legitimate labor organizations. The
Bureau shall also maintain a file of all collective bargaining agreements and
other related agreements and records of settlement of labor disputes, and
copies of orders, and decisions of voluntary arbitrators. The files shall be
open and accessible to interested parties subject to conditions prescribed by
the Secretary of Labor and Employment, provided that no specific
information submitted in confidence shall be disclosed unless authorized by
the Secretary, or when it is at issue in any judicial litigation or when public
interest or national security so requires.


4. Scope of the agreement; who may avail of benefits -

Natl. Brewers and Allied Industries Labor Union vs. San Miguel Brewery

All employees in the barg. unit are covered, regardless of their membership
or non-membership in the union; otherwise, discrimination.
5. Duration of the CBA (Art. 253-A. cf. Dept. Order No. 9, Rule XIV, Secs. 3-4)

Article 253-A, Labor Code. (same as Dept. Order No. 9, Rule XIV, secs. 3-4)

5.1 Economic provisions of the CBA - term of 3 yrs.

Dept. Order No. 9, Rule XIV, sec. 3

All other provisions of said agreement shall, as a matter of right, be

renegotiated not later than three (3) years after its execution.

5.2 Representation question and the contract-bar rule

Dept. Order No. 9, Rule XIV, secs. 3-4

Section 3. Term of representation status of agreement; contract-bar rule.

-- The representation status of the incumbent exclusive bargaining
representative which is a party to a duly registered collective bargaining
agreement shall be for a term of five (5) years. (CONTRACT BAR

Section 4. Exception to the contract bar rule. Notwithstanding its

registration, a collective bargaining agreement shall not constitute a bar
to a certification election where it is found in appropriate proceedings
before the Regional Director that any of the following conditions exist:

(a) The agreement contains provisions lower than the

standards fixed by law; or

(b) The documents supporting its registration are

falsified, fraudulent or tainted with misrepresentation.

ALU vs. Ferrer-Calleja, 173 SCRA 178

no proof tending to show that the CBA has been posted in at least 2
conspicuous places in the company at least 5 days prior to the
ratification, and that the same was ratified by a majority of the members
of the union.
Perusal of the facts show that the CBA was defective, and hence
unproductive of the legal effects of a certified CBA. Note that the Labor
unions representation was in itself questionable, and that there was
precipitate haste in recognizing the union based on an unsubstantiated
and self-serving claim that it represented the majority of the employees
in the bargaining unit. Moreover, there was an apparent and suspicious
hurry in the formulation and finalization of the CBA.


representation issue may be questioned by another union.

5.3 Retroactivity

Dept. Order No. 9, Rule XIV, sec. 3

Any agreement on such other provisions entered into within six (6) months
from the date of expiry of such provisions shall retroact to the day
immediately following such date. If any such provisions are entered into
beyond six months, the parties shall agree on the duration of
retroactivity. In case of a deadlock in the renegotiation of the agreement,
the parties may exercise their rights under the Code. In case of
renegotiation, all requirements for registration prescribed under the two
immediately preceding sections shall be complied with, whichever is
applicable, except payment of the registration fee.

Union of Filipro Employees vs. NLRC, 192 SCRA 397, at 425

In the aforecited case, the Court only pointed out that, it is not right for
union members to argue that they cannot be covered by the past and the
new CBAs both containing the same closed-shop agreement for acts
committed during the interregnum. What as emphasized by this Court is
that in no case should there be a period in which no agreement would
govern at all. But nowhere in the said pronouncement did We rule
that every CBA contracted after the expiry date of the previous CBA
must retroact to the day following such date. Hence, it is proper to rule
that in the case at bar, the clear and unmistakable terms of Articles 253 and
253-A must be deemed controlling.

Articles 253 and 253-A mandate the 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 the expiration of the old CBA
and/or until a new agreement is reached by the parties. Consequently,
there being no new agreement reached, the automatic renewal clause
provided for by the law which is deemed incorporated in all CBAs, provides
the reason why the new CBA can only be given a prospective effect.
Petitioner claims that because of the prospective effect of the CBA, union
members were deprived of substantial amount of monetary benefits which
they could have enjoyed had the CBA be given retroactive effect. This would
include backwages, the immediate effects of the mandated wage increase
on the fringe benefits such as the 13th and 14th month pay, overtime
premium, and right to differential pay, leaves, etc. This Court, is not
unmindful of these. Nevertheless, We are convinced that the CBA
formulated by public respondent is fair, reasonable and just. Even if
prospective in effect, said CBA still entitles the Nestle workers and
employees reasonable compensation and benefits which, in the opinion of
this Court, is one of the highest, if not the highest in the industry. Petitioner
did not succeed in overcoming the presumption of regularity in the
performance of the public respondents functions. Even if the resolution
fell short of meeting the numerous demands of the union, the petitioner
failed to establish that public respondent committed grave abuse of
discretion in not giving the CBA a retrospective effect.

6. Violations of the CBA (Art. 261)

Question: Is the violation of the CBA provisions a ULP as to allow the union
to strike?

Answer: It depends on whether the violation is gross in character or not. If

gross, then ULP and the union may strike. If not gross, then non-strikeable
and must be referred to the grievance machinery.


6.1 Generally: Grievances arising from interpretation or implementation of

the CBA is no longer considered ULP and hence, non-
strikeable. Must be referred to grievance machinery
and voluntary arbitrators

6.2 Exception: Strikeable issue when there is gross and flagrant refusal to
comply with the economic provisions of the CBA

Article 261, Labor Code. 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 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 practices and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of
this article, gross violations of the Collective Bargaining Agreement shall
mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement.

7. Substitutionary Doctrine

Benguet Consolidated vs. BCI Ees Union, 23 SCRA 465

The employees cannot revoke the validly executed CBA with their employer
by the simple expedient of changing their bargaining representative. The
CBA is binding for the period specified therein, but the new agent may
bargain for the shortening of the period.

But the substitutionary doctrine applies only to the employees of the unit, not
to the new agent which is not bound by the purely personal undertakings of
the displaced agent like the no-strike clause in the CBA.

8. Effect: (w/ respect to successor-employer)

General rule:

An innocent transferee of a business concern has no liability to the

employees either with respect to continuing them in employment or with
respect to the past ULP of previous owner.

Exceptions to above general rule:

a) By virtue of obligations assumed under the contract.

b) Liability arises because of new owners participation in defeating the

rights of the employees. In such instance, he is treated as in the same
position of a tortfeasor.

E. Razon vs. Secretary of Labor, 222 SCRA 1

A CBA is a contract in personam, and therefore, not enforceable against the

successor-employer. In rehiring the workers of the old employer, the successor-
employer has the right to consider them as new employees. The old employer, to
whom years of service had been rendered by its suddenly jobless employees, had the
corresponding obligation to pay them their respective separation pay.