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It is the objective of not only the law, but likewise the employer and employees within a

company or establishment to foster and promote industrial peace and harmony. A symbiotic
relationship is the ideal situation in every employer and employee relationship. One of the factors
in facilitating industrial harmony is the formulation of an agreement that benefits both the
employer and his/her laborers.
A CBA is essentially a contract. A contract between the employer and the employees which
includes all the necessary terms and conditions of employment. The formulation of a CBA is not
a one-time event, as it could encompass not only weeks or months but also decades before one is
finally agreed upon and ratified. Time, effort and a great deal of resources are poured into even in
just the formulation and negotiation of a CBA. In the setting that I will present in my thesis, we
imagine a situation where finally, after long, grueling and expensive meetings to implement and
agree upon a CBA, the same would then simply be discarded by the other party. This is then the
situation that my thesis seeks to present and discuss.
The substitutionary doctrine is a long-standing and time-honored principle in labor law.
The "Substitutionary doctrine" provides that the employees cannot revoke the validly executed
collective bargaining contract with their employer by simply changing their bargaining agent. The
new agent must respect the contract. The employees, thru their new bargaining agent, cannot
renege on the collective bargaining contract, except to negotiate with management for the
shortening thereof. The essence of the doctrine then is “respect”, where the new bargaining agent
is obliged to respect the CBA the predecessor negotiating agent entered into with the employer.
Contract law and agency principles lay down the legal bases for such doctrine. Contract
law is applied because the CBA is a contract, which is considered as the law between them and
binds the contracting parties thereto - the ER and EYs, and either party cannot unilaterally escape
the obligations provided therein. Agency law principles also come into play since the negotiating
agent – as the nomenclature provides, is merely an extension of its principal, a.k.a., the employees
of the bargaining unit.
The issue at hand is whether or not the SONEDCO ruling is in contravention of the SD,
and if it is, would it be better if the SD be removed or revoked from our labor law principles.
The proponent respectfully submits that the ruling in SONEDCO is erroneous, for it goes
against the principles of contract law, agency law, and necessarily the substitutionary doctrine. In
SONEDCO, a labor union (union 2) filed a PCE seeking to become the new SEBA. During the
pendency of this PCE however, a CBA was entered into by the employer URC and the current
SEBA PACIWU (union 1). However, 11 days after the execution of this CBA, union 2 won in said
PCE and then became the new SEBA of the BU. Union 2 then demanded from the ER to
renegotiate for a NEW CBA, to which the ER refused, citing as basis the already existing CBA it
entered into with union 1. Ultimately the case reached the SC where the Court categorically stated
that “if as a result of the PCE, the union other than the current SEBA which executed the CBA is
certified as the new bargaining agent, then such new bargaining agent may adopt said CBA or
renegotiate for a new one.” The SC in allowing union 2 or the new SEBA to renegotiate and
disregard the already valid and existing CBA is in direct contravention of the Substitutionary
Doctrine, which mandates that the new SEBA is bound and must abide by the already existing
CBA entered into by its predecessor SEBA. It is worthy to note that there was nothing in the
SONEDCO decision which discussed the SD. The SC merely used as basis the fact that because
the CBA was entered into by the ER and EYs during the pendency of a PCE, then such CBA is
temporary in nature – and used as basis the Trajano ruling wherein the proponent contends is
likewise an erroneous ruling.
The other rationale for the Substitutionary Doctrine is that the parties to this agreement are
to be given the reasonable expectation that the contract they entered into will be respected by the
other party. The ER then is entitled to this reasonable expectation that the other party – the EYs –
will respect and abide by their agreement. Again, the SD gets its bases not only from contract law
and agency law provisions but likewise from equity principles. A CBA, as jurisprudence provides,
is a labor contract, and is a special contract which is imbued with public interest. It is true that in
times of labor disputes, it is the policy of the state to favor the employee. However, this does not
mean that the courts would always favor the employees, and as a result lead to the oppression of
the employer.
Pursuant to this erroneous ruling, there is then a need to correct this promulgation in order
to avoid subsequent cases following this SONEDCO ruling. SONEDCO as stated is not the first
of its kind and that the basis even of SONEDCO is in a 1988 case entitled ATU vs Trajano which
more or less contain the same facts as that of SONEDCO and resulted also in a similar ruling.
It is then the recommendation of the Proponent that the substitutionary doctrine which is a
jurisprudentiary creation, be enfleshed in our statutes particularly the labor code, in order to
prevent future decisions such as SONEDCO, and in order to give stability and avoid confusion as
to the nature and status of a CBA. The proposed labor provision, would then be the new Article
265 of the LC the caption of which states: “Change in the Bargaining Representative – Any
subsequent change of the incumbent bargaining representative certified as the sole and exclusive
bargaining representative of the bargaining unit concerned through any of the processes or methods
of selecting said exclusive bargaining agent, shall have no effect whatsoever on the duly
constituted collective bargaining agreement between the bargaining unit and the employer existing
prior to the change of the bargaining representative.”
With that, I end my thesis presentation.