Collective Bargaining and Administration of Agreement
Collective Bargaining and Administration of Agreement
TRADE UNIONS OF THE PHILIPPINES/FEBRUARY SIX MOVEMENT
TUPAS/FSM), petitioner,
vs.
HON BIENVENIDO LAGUESMA, TRANSUNION CORPORATION-GLASS DIVISION,
AND INTEGRATED LABOR ORGANIZATION (ILO-PHILIPPINES), respondents.
Alar, Comia, Manalo and Associates Law Offices for petitioner.
Arcaya & Associates for Transunion Corp.-Glass Division.
Francisco A. Mercado, Jr. for Integrated Labor Organization (ILO-Phils.)
PUNO, J.:
Petitioner Trade Unions of the Philippines-February Six Movement (TUPAS-FSM)
seeks the reversal of the Resolution, dated July 25, 1990, rendered by then
Secretary of Labor and Employment Ruben D. Torres, In OS-MA-A-5-167-90,
which dismissed the petition for certification election filed by petitioner TUPAS-FSM
for being prematurely filed. 1
The controlling facts, as culled from the records, are as follows:
On March 23, 1990 TUPAS-FSM filed a petition for certification election with the
Regional Office No. IV of the Department of Labor and Employment (DOLE), for the
purpose of choosing a bargaining representative for the rank-and-file employees of
Transunion Corporation's industrial plant, situated in Canlubang, Laguna, known as
the Transunion Corporation-Glassware Division. Petitioner had then secured a
Certification , dated
March 22, 1990, issued by Tomas B. Bautista, Jr., Director IV of DOLE (Region IV),
that "Transunion Corporation" has no existing collective bargaining agreement with
any labor organization. 2
It appears, however, that before the filing of said petition, or on November 15,
1989, Integrated Labor Organization (ILO-Phils.) was duly certified by DOLE as the
sole and exclusive bargaining agent of the rank-and-file employees of Transunion
Corporation-Glassware Division. 3 On November 28, 1989, a collective bargaining
agreement (CBA) was the forged between Transunion-Glassware Division and ILO-
Phils. covering the company's rank-and-file employees, The CBA, with a five-year
term from December 1, 1989 to December 1, 1994, was ratified by a great majority
of the rank-and -filers on December 8, 1989. 4 In the meantime, the President of
ILO-PHILS died. An inter-union conflict followed and the subject CBA was filed with
DOLE, for registration purposes, only on March 14, 1990, more or less, three (3)
months from its execution. Finally, on May 4, 1990, the Certification of Registration
was issued by DOLE through Regional Director Romeo A. Young. 5
ILO-Phils., intervened in the certification election proceedings initiated by TUPAS-
FSM. It opposed the petition in view of the existing CBA between ILO and the
Transunion Corporation-Glassware Division. It stresses that the petition for
certification election should be entertained only during the freedom period, or
sixty day before the expiration of the CBA. Med-Arbiter Orlando S. deal Cruz
dismissed the petition on the ground of prematurity.
TUPAS-FSM appealed contending: (1) that pursuant to Article 231 of the Labor
Code. CBAs shall be file with the Regional Office of the DOLE within thirty (30)
days from the date of signing thereof; (2) that said requirement is mandatory,
although it would not affect the enforceability of the CBA as between the parties
thereto; and (3) since the CBA was filed outside the 30-day period specified under
Article 231 of the Labor Code, the prohibition against certification election under
Article 232 of the same Code should not apply to third parties such as petitioner.
As stated earlier, the Secretary of Labor and Employment affirmed the impugned
Order of the Med-Arbiter, ruling that the belated submission of the CBA was
excusable and that the requirement of the law was substantially complied with
upon the filing of a copy of the CBA prior to the filing of the petition for certification
election. TUPAS-FSM then filed a motion for reconsideration, but it was also
denied, Hence, this petition for certiorari where petitioner alleged:
GRAVE ABUSE OF DISCRETION ON THE PART OF THE PUBLIC
RESPONDENTS AMOUNTING TO LOSS OF JURISDICTION; and
THE RESOLUTION IS CONTRARY TO THE FACTS AND THE LAW.
The petition lacks merit.
Petitioner raises both factual and legal issues in this present petition.
First, the factual issues. Relying on the March 22, 1990 Dole Certification issued by
Director Bautista, Jr., supra, petitioner insists there was no existing CBA between
Transunion Corporation and any labor organization when it filed its petition for
certification election on March 23, 1990. To further strengthen its position,
petitioner charges that the filing of the CBA was antedated to march 14, 1990, to
make it appear that the same was already existing and filed before the filing of the
petition for certification election. Petitioner also claims that since Article 231 of the
Labor Code mandates DOLE to act on the CBA filed in its office within Five (5) days
from date of filing thereof, the subject CBA was filed on April 30, 1990, or five (5)
days before its registration on May 4, 1990.
The argument deserves scant consideration. It is elementary that the special civil
action for certiorari under Rule 65 of the Revised Rules of Court can be availed of to
nullify or modify the proceedings before the concerned tribunal, board, or officer
exercising judicial functions who has acted without or in excess of its jurisdiction or
with grave abuse of discretion and there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law. This Court is not a trier of facts and
it is not its function to examine and evaluate the probative value of all evidence
presented to the concerned tribunal which formed the basis of its impugned
decision, resolution or order. 6Following this hoary rule, it is inappropriate to
review the factual findings of the Med-arbiter and the Secretary of Labor, regarding
the date of filing of the CBA on March 14, 1990 prior to the filing of the petition for
certification election; the company's voluntary recognition and DOLE's certification
of ILO-PHILS. as the sole and exclusive bargaining representative of the rank-and-
file employees of Transunion Corporation-Glassware Division; and the subsequent
registration of the CBA. They are binding on this Court as they are supported by
substantial evidence. In contrast, petitioner’s bare allegation pertaining to the
"antedating" of the date of filing of the CBA is unsubstantiated and based purely on
conjectures.
It is crystal clear from the records that the rank-and- file employees of private
respondent's Glassware Division are, at present, represented by ILO-PHILS. Hence,
petitioner's reliance on the March 22, 1990 Certification issued by Director
Bautista, Jr., is misplaced. The existence and filing of their CBA was confirmed in a
Certification, dated April 24, 1990, issued by Director Romeo A. Young of DOLE-
Region IV. 7 The Certification of ILO-PHILS. "as the sole and exclusive bargaining
agent of the rank-and-file workers of Transunion-Glassware Division," means it
shall remain as such during the existence of the CBA, to the exclusion of other labor
organizations, including petitioner, and no petition questioning the majority status
of the incumbent bargaining agent shall be entertained, nor shall certification
election be conducted, outside of the fifty-day freedom period immediately before
the expiry date of the five-year term of the CBA. 8
We now resolved the legal issue. Petitioner points out that the subject CBA was
filed beyond the 30-day period prescribed under Article 231 of the Labor Code. It
also insists that under Article 232 of the Labor Code, the prohibition on the filing of
a petition for certification election applies when the CBA had been duly registered
and, in this case, since the CBA was not registered in accordance with the Art. 231,
the prohibition will not apply. We disagree.
Article 231 an s232 of the Labor Code read:
Art. 231. — Registry of unions and file of collective agreements.
-....
Within thirty (30) days from the execution of a Collective
Bargaining Agreement, the parties shall submit copies of the
same directly to the Bureau or the Regional Office of the
Department of Labor and Employment for registration
accompanied with verified proofs of its posting n two
conspicuous places in the place of work and ratification by the
majority of all the workers in the bargaining unit. The Bureau or
Regional Office shall act upon the application for registration of
such Collective Bargaining Agreement within five (5) days from
receipts thereof. The Regional Office shall furnish the Bureau
with a copy of the Collective Bargaining agreement within five
(5) days form its submission.
xxx xxx xxx
Art. 232. — Prohibition on Certification Election. — The Bureau
shall not entertain any petition for certification election or any
other action which may disturb the administration of duly
registered existing collective bargaining agreement affecting
the parties except under Articles 253, 253-A and 256 of this
Code.
Corollary thereto, Article 253-A of the same Code reads:
 Art. 253-A. — Any Collective Bargaining Agreement that the BENGUET CONSOLIDATED, INC. vs. BCI EMPLOYEES & WORKERS UNION-PAFLU,
parties may enter into shall, insofar as the representation
aspect is concerned, be for a term of five (5) years. No petition PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, CIPRIANO CID and
questioning agent shall be entertained and no certification JUANITO GARCIA
election shall be conducted by the Department of Labor and
Employment outside the sixty-day period immediately before
the date of expiry of such five year term of the Collective OCTOBER 23, 2012 ~ VBDIAZ
Bargaining Agreement. . . . .
BENGUET CONSOLIDATED, INC. vs. BCI EMPLOYEES & WORKERS UNION-PAFLU,
It appears that the procedural requirement of filing the CBA within 30 days from
date of execution under Article 231 was not met. The subject CBA was executed on PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, CIPRIANO CID and JUANITO
November 28, 1989. It was ratified on December 8, 1989, and then filed with DOLE
for registration purposes on March 14, 1990. Be that as it may, the delay in the GARCIA
filing of the CBA was sufficiently explained, i.e., there was an inter-union conflict on
who would succeed to the presidency of ILO-PHILS. The CBA was registered by the
DOLE only on May 4, 1990. It would be injudicious for us to assume, as what
petitioner did, that the said CBA was filed only on April 30, 1990, or five (5) days G.R. No. L-24711,; Apr 30, 1968
before its registration, on the unsupported surmise that it was done to suit the law
that enjoins Regional Offices of Dole to act upon an application for registration of a
CBA within five (5) days from its receipt thereof. In the absence of any substantial
evidence that DOLE officials or personnel, in collusion with private respondent, had
antedated the filing date of the CBA, the presumption on regularity in the
performance of official functions hold.
FACTS:
More importantly, non-compliance with the cited procedural requirement should
not adversely affect the substantive validity of the CBA between ILO-PHILS and the
Transunion Corporation-Glassware Division covering the company's rank and file
On June 23, 1959, the Benguet-Balatoc Workers Union (“BBWU”), for and in behalf
employees. A collective bargaining agreement is more than a contract. It is highly
impressed with public interest for it is an essential instrument to promote of all Benguet Consolidated, Inc (BENGUET) employees in its mines and milling
industrial peace. Hence, it bears the blessings not only of the employer and
employees concerned but even the Department of Labor and Employment. To set it establishment located at Balatoc, Antamok and Acupan, Mt. Province, entered into
aside on technical grounds is not conducive to the public good.
a Collective Bargaining Contract (CONTRACT) with BENGUET. The CONTRACT was
IN VIEW WHEREOF, the impugned July 25, 1990 Resolution, and August 23, 1990
Order of Secretary Ruben D. Torres and Undersecretary Bienvenido E. Laguesma. stipulated to be effective for a period of 4-1/2 years, or from June 23, 1959 to
respectively, in OS-MA-A-5-167-90, is AFFIRMED in toto. Costs against petitioned.
December 23, 1963. It likewise embodied a No-Strike, No-Lockout clause.

SO ORDERED.
3 years later, or on April 6, 1962, a certification election was conducted by the from the strike. BENGUET also argued that the UNION violated the CONTRACT

Department of Labor among all the rank and file employees of BENGUET in the which has a stipulation not to strike during the effectivity thereof.

same collective bargaining units. BCI EMPLOYEES & WORKERS UNION (UNION)

obtained more than 50% of the total number of votes, defeating BBWU. The Court Defendants unions and their presidents defended that: (1) they were not bound by

of Industrial Relations certified the UNION as the sole and exclusive collective the CONTRACT which BBWU, the defeated union, had executed with BENGUET; (2)

bargaining agent of all BENGUET employees as regards rates of pay, wages, hours the strike was due, among others, to unfair labor practices of BENGUET; and (3) the

of work and such other terms and conditions of employment allowed them by law strike was lawful and in the exercise of the legitimate rights of UNION-PAFLU under

or contract. Republic Act 875.

Later on, the UNION filed a notice of strike against BENGUET. UNION members who The trial court dismissed the complaint on the ground that the CONTRACT,

were BENGUET employees in the mining camps at Acupan, Antamok and Balatoc, particularly the No-Strike clause, did not bind defendants. BENGUET interposed the

went on strike. The strike was attended by violence, some of the workers and present appeal.

executives of the BENGUET were prevented from entering the premises and some

of the properties of the BENGUET were damaged as a result of the strike.

Eventually, the parties agreed to end the dispute. BENGUET and UNION executed

the AGREEMENT. PAFLU placed its conformity thereto. About a year later or on ISSUE:

January 29, 1964, a collective bargaining contract was finally executed between

UNION-PAFLU and BENGUET. Did the Collective Bargaining Contract executed between Benguet and BBWU on

June 23, 1959 and effective until December 23, 1963 automatically bind UNION-

Meanwhile, BENGUET sued UNION, PAFLU and their Presidents to recover the PAFLU upon its certification, on August 18, 1962, as sole bargaining representative

amount the former incurred for the repair of the damaged properties resulting of all BENGUET employeesRULING:
NO. BENGUET erroneously invokes the so-called “Doctrine of Substitution” referred In formulating the “substitutionary” doctrine, the only consideration involved was

to in General Maritime Stevedore’s Union v. South Sea Shipping Lines where it was the employees‘ (principal) interest in the existing bargaining agreement. The

ruled that: agent’s (union) interest never entered the picture. The majority of the employees,

as an entity under the statute, is the true party in interest to the contract, holding

“We also hold that where the bargaining contract is to run for more than two years, rights through the agency of the union representative. Thus, any exclusive interest

the principle of substitution may well be adopted and enforced by the CIR to the claimed by the agent is defeasible at the will of the principal. The “substitutionary”

effect that after two years of the life of a bargaining agreement, a certification doctrine only provides that the employees cannot revoke the validly executed

election may be allowed by the CIR, that if a bargaining agent other than the union collective bargaining contract with their employer by the simple expedient of

or organization that executed the contract, is elected, said new agent would have changing their bargaining agent. And it is in the light of this that the phrase “said

to respect said contract, but that it may bargain with the management for the new agent would have to respect said contract” must be understood. It only means

shortening of the life of the contract if it considers it too long, or refuse to renew the that the employees, thru their new bargaining agent, cannot renege on their

contract pursuant to an automatic renewal clause.” collective bargaining contract, except of course to negotiate with management for

the shortening thereof.

BENGUET’s reliance upon the Principle of Substitution is totally misplaced. This

principle, formulated by the NLRB as its initial compromise solution to the problem The “substitutionary” doctrine cannot be invoked to support the contention that a

facing it when there occurs a shift in employees’ union allegiance after the newly certified collective bargaining agent automatically assumes all the personal

execution of a bargaining contract with their employer, merely states that even undertakings — like the no-strike stipulation here — in the collective bargaining

during the effectivity of a collective bargaining agreement executed between agreement made by the deposed union. When BBWU bound itself and its officers

employer and employees thru their agent, the employees can change said agent not to strike, it could not have validly bound also all the other rival unions existing

but the contract continues to bind them up to its expiration date. They may bargain in the bargaining units in question. BBWU was the agent of the employees, not of

however for the shortening of said expiration date. the other unions which possess distinct personalities.

UNION, as the newly certified bargaining agent, could always voluntarily assume all
the personal undertakings made by the displaced agent. But as the lower court
found, there was no showing at all that, prior to the strike, UNION formally
adopted the existing CONTRACT as its own and assumed all the liabilities imposed
by the same upon BBWU. Defendants were neither signatories nor participants in
the CONTRACT.
Everything binding on a duly authorized agent, acting as such, is binding on the
principal; not vice-versa, unless there is mutual agency, or unless the agent
expressly binds himself to the party with whom he contracts. Here, it was the
previous agent who expressly bound itself to the other party, BENGUET. UNION,
the new agent, did not assume this undertaking of BBWU.
Since defendants were not contractually bound by the no-strike clause in the
CONTRACT, for the simple reason that they were not parties thereto, they could
not be liable for breach of contract to plaintiff.
WHEREFORE, the judgment of the lower court appealed from is hereby affirmed.
Liberty Flour Mills Employees, Biascan and Evaristo v. Liberty Flour Mills (1989)
Doctrine: The rationale for upholding the validity of union shop clauses in a CBA,
even if they impinge upon the individual employees right or freedom of
association, is NOT to protect the union for the unions sake. Laws and
jurisprudence promote unionism and afford certain protections to the certified
bargaining agent in a unionized company because a strong and effective union
presumably benefits all employees in the bargaining unit since such a union would
be in a better position to demand improved benefits and conditions of work from
the employer.
 Feb 1974: entered into 3-year CBA with Phil. Labor Alliance Council (PLAC),
the Union of the rank-and-file employees of Liberty
 In the CBA, parties agreed to establish a union shop by imposing "membership
in good standing for the duration of the CBA as a condition for continued
employment" of workers.
 Oct. 1974: PLAC filed complaint against company for the nonpayment of
emergency cost of living allowance (ecola)
 1975: Biascan and Evaristo (B&E) filed similar complaint as regards ecola
 at this point B&E are veering away from PLAC
 1975: B&E organized new Union for rank and file employees of Liberty
 B&E filed petition for certification election as the Union
among the rank and file
 PLAC expelled B&E due to disloyalty
 PLAC demanded from Liberty the dismissal from employment of B&E in
accordance with the Union Shop clause in the CBA
 The matter of the dismissal of B&E were submitted to compulsory arbitration as
well as the demand for ecola
 Meanwhile, the certification election held at the Liberty Flour Mills, Inc. on
December 27, 1976, the Ilaw at Buklod ng Manggagawa (ILAW), with which the
union organized by Biascan and Evaristo was affiliated, won overwhelmingly
with 441 votes as against the 5 votes cast for PLAC
 In 1977, Liberty’s new CBA was agreed with ILAW
 B&E were terminated and claimed that they were illegally dismissed for
organizing a new union opposed to PLAC which they described as a company
union
o B&E’s argument: merely exercising right to self organization
 NLRC ruled in favor of B&E, holding that the CBA was not certified hence “it was
not yet in effect and so could not be the basis of the action taken against B&E”
ISSUE: WON B&E were illegally dismissed as the CBA was not yet certified at the
time they were dismissed?
HELD: Dismissal was valid
 CBA concluded in 1974 was certifiable and was in fact certified on April 11,
1975
 Evaristo and Biascan were dismissed only on May 20, 1975, more than a
month after the said certification.
 Even if the new union organized by B&E is the one chosen by the rank and file
employees this does not excuse the fact that the two disaffiliated from PLAC
as early as March 1975 and thus rendered themselves subject to dismissal
under the union shop clause in the CBA
 Roselle’s Note: nagpasaway sila habang reign pa ng first union (PLAC)
 Union Shops and closed shops are encouraged by law
o purposes could be thwarted if every worker were to choose to go his
own separate way instead of joining his co-employees in planning
collective action and presenting a united front when they sit down to
bargain with their employers
Metropolitan Bank and Trust Company vs. National Labor Relations Commission,
589 SCRA 376, G.R. No. 152928 June 18, 2009
FACTS:
Respondents Patag and Flora were former employees of petitioner Metrobank.
Both respondents availed of the bank’s compulsory retirement plan in accordance
with the 1995 Officers’ Benefits Memorandum. Patag retired on February 1, 1998
as an Assistant Manager with a monthly salary of P32,100.00. Flora retired on April
1, 1998 as a Senior Manager with a monthly salary of P48,500.00. Consequently,
the new 1998 CBA was issued increasing the retirement benefits from 185% to
200%. The 1998 CBA covers employees for year 1998-2000 provided that they
should not resign before June 15, 1998. With this, the private respondents
requested to extend the benefits of the 1998 CBA to them but they were denied by
the petitioner because they had already resigned before June 15, 1998. The LA
dismissed the complaint. NLRC reversed the LA by granting the respondents the
benefits endowed by the 1998 CBA. The CA affirmed the NLRC by stating that
notwithstanding the stipulation of the 1998 CBA, it has been the petitioner’s long
practice to extend the newly issued CBAs towards its employees every 1st of
January for 11 years from 1986 to 1997 without any conditions that an employee
must not resign prior to a settled date. Hence, this petition.
ISSUE:
Whether respondents can still recover higher benefits under the 1998 Officers’
Benefits Memorandum despite the fact that they have compulsorily retired prior to
the issuance of said memorandum
RULING:
YES. It is a jurisprudential rule that where there is an established employer
practice of regularly, knowingly and voluntarily granting benefits to employees
over a significant period of time, despite the lack of a legal or contractual
obligation on the part of the employer to do so, the grant of such benefits ripens
into a vested right of the employees and can no longer be unilaterally reduced or
withdrawn by the employer
To be considered a company practice, the giving of the benefits should have been
done over a long period of time, and must be shown to have been consistent and
deliberate. The test or rationale of this rule on long practice requires an indubitable
showing that the employer agreed to continue giving the benefits knowing fully
well that said employees are not covered by the law requiring payment thereof.
In the case at bar, petitioner Metrobank favorably adjusted its officers’ benefits,
including retirement benefits, after the approval of each CBA with the rank and file
employees, to be effective every January 1st of the same year as the CBA’s
approval, and without any condition regarding the date of employment of the
officer, from 1986 to 1997 or for about eleven (11) years. This constitutes
voluntary employer practice which cannot be unilaterally withdrawn or
diminished by the employer without violating the spirit and intent of Art. 100 of
the Labor Code which prohibits the diminution of benefits of the employee. The
condition that an officer must still be in the service of petitioner bank as of June 15,
1998 effectively reduced benefits of employees who retired prior to the issuance of
the 1998 Officers’ Benefits Memorandum despite the fact in the past no such
condition was imposed by the bank and previous retirees presumably enjoyed the
higher benefits regardless of their date of retirement as long as they were still
employees of petitioner as of the January 1st effectivity date.
SUMMARY: The respondents, who were the former employees of the petitioner,
requested the benefits endowed by the 1998 CBA but they were denied by the
petitioner because the latter resigned prior to the settled date conditioned by the
said CBA. The Court ruled in favor of the respondents by stating that the long
practice of the petitioner of voluntarily covering the employees’ benefits in every
CBA for 11 years from 1986 to 1997 every 1st of January without any conditions
must apply also to the 1998 CBA.
LABOR LAW CONCEPTS:
1.) It is a jurisprudential rule that where there is an established employer
practice of regularly, knowingly and voluntarily granting benefits to
employees over a significant period of time, despite the lack of a legal or
contractual obligation on the part of the employer to do so, the grant of
such benefits ripens into a vested right of the employees and can no
longer be unilaterally reduced or withdrawn by the employer
2.) Wages and Benefits and Retirement - To be considered a company
practice, the giving of the benefits should have been done over a long
period of time, and must be shown to have been consistent and
deliberate.
3.) The right to file a labor complaint or assert a cause of action against an
employer is a personal right of each employee
4.) It is a time-honored rule that in controversies between a laborer and his
master, doubts reasonably arising from the evidence or in the
interpretation of agreements and writings should be resolved in the
former’s favor
G.R. No. 113856 September 7, 1998
SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS
OF THE PHILIPPINES (SMTFM-UWP), its officers and members, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. JOSE G. DE VERA and TOP
FORM MANUFACTURING PHIL., INC., respondents.
ROMERO, J.:
The issue in this petition for certiorari is whether or not an employer committed an
unfair labor practice by bargaining in bad faith and discriminating against its
employees. The charge arose from the employer's refusal to grant across-the-board
increases to its employees in implementing Wage Orders Nos. 01 and 02 of the
Regional Tripartite Wages and Productivity Board of the National Capital Region
(RTWPB-NCR). Such refusal was aggravated by the fact that prior to the issuance of
said wage orders, the employer allegedly promised at the collective bargaining
conferences to implement any government-mandated wage increases on an
across-the-board basis.
Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers
of the Philippines (SMTFM) was the certified collective bargaining representative of
all regular rank and file employees of private respondent Top Form Manufacturing
Philippines, Inc. At the collective bargaining negotiation held at the Milky Way
Restaurant in Makati, Metro Manila on February 27, 1990, the parties agreed to
discuss unresolved economic issues. According to the minutes of the meeting,
Article VII of the collective bargaining agreement was discussed. The following
appear in said Minutes:
Art. VII, Wages
Sect. 1. — Defer —
Sect. 2. Status quo
Sec. 3. Union proposed that any future wage increase given by
the government should be implemented by the company
across-the-board or non-conditional.
 Management requested the union to retain this provision since
their sincerity was already proven when the P25.00 wage
increase was granted across-the-board. The union
acknowledges management's sincerity but they are worried
that in case there is a new set of management, they can just
show their CBA. The union decided to defer this provision. 1
In their joint affidavit dated January 30, 1992, 2 union members Salve L. Barnes,
Eulisa Mendoza, Lourdes Barbero and Concesa Ibañez affirmed that at the
subsequent collective bargaining negotiations, the union insisted on the
incorporation in the collective bargaining agreement (CBA) of the union proposal
on "automatic across-the-board wage increase." They added that:
11. On the strength of the representation of the negotiating
panel of the company and the above undertaking/promise
made by its negotiating panel, our union agreed to drop said
proposal relying on the undertakings made by the officials of
the company who negotiated with us, namely, Mr. William
Reynolds, Mr. Samuel Wong and Mrs. Remedios Felizardo. Also,
in the past years, the company has granted to us government
mandated wage increases on across-the-board basis.
On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an
increase of P17.00 per day in the salary of workers. This was followed by Wage
Order No. 02 dated December 20, 1990 providing for a P12.00 daily increase in
salary.
As expected, the union requested the implementation of said wage orders.
However, they demanded that the increase be on an across-the-board basis.
Private respondent refused to accede to that demand. Instead, it implemented a
scheme of increases purportedly to avoid wage distortion. Thus, private
respondent granted the P17.00 increase under Wage Order No. 01 to
workers/employees receiving salary of P125.00 per day and below. The P12.00
increase mandated by Wage Order No. 02 was granted to those receiving the salary
of P140.00 per day and below. For employees receiving salary higher than P125.00
or P140.00 per day, private respondent granted an escalated increase ranging from
P6.99 to P14.30 and from P6.00 to P10.00, respectively. 3
On October 24, 1991, the union, through its legal counsel, wrote private
respondent a letter demanding that it should "fulfill its pledge of sincerity to the
union by granting an across-the-board wage increases (sic) to all employees under
the wage orders." The union reiterated that it had agreed to "retain the old
provision of CBA" on the strength of private respondent's "promise and assurance"
of an across-the-board salary increase should the government mandate salary
increases. 4 Several conferences between the parties notwithstanding, private
respondent adamantly maintained its position on the salary increases it had
granted that were purportedly designed to avoid wage distortion.
Consequently, the union filed a complaint with the NCR NLRC alleging that private
respondent's act of "reneging on its undertaking/promise clearly constitutes act of
unfair labor practice through bargaining in bad faith." It charged private
respondent with acts of unfair labor practices or violation of Article 247 of the
Labor Code, as amended, specifically "bargaining in bad faith," and prayed that it
be awarded actual, moral and exemplary damages.5 In its position paper, the union
added that it was charging private respondent with "violation of Article 100 of the
Labor Code." 6
Private respondent, on the other hand, contended that in implementing Wage
Orders Nos. 01 and 02, it had avoided "the existence of a wage distortion" that
would arise from such implementation. It emphasized that only "after a reasonable
length of time from the implementation" of the wage orders "that the union
surprisingly raised the question that the company should have implemented said
wage orders on an across-the-board basis." It asserted that there was no
agreement to the effect that future wage increases mandated by the government
should be implemented on an across-the-board basis. Otherwise, that agreement
would have been incorporated and expressly stipulated in the CBA. It quoted the
provision of the CBA that reflects the parties' intention to "fully set forth" therein
all their agreements that had been arrived at after negotiations that gave the
parties "unlimited right and opportunity to make demands and proposals with
respect to any subject or matter not removed by law from the area of collective
bargaining." The same CBA provided that during its effectivity, the parties "each
voluntarily and unqualifiedly waives the right, and each agrees that the other shall
not be obligated, to bargain collectively, with respect to any subject or matter not
specifically referred to or covered by this Agreement, even though such subject or
matter may not have been within the knowledge or contemplation of either or
both of the parties at the time they negotiated or signed this Agreement." 7
On March 11, 1992, Labor Arbiter Jose G. de Vera rendered a decision dismissing
the complaint for lack of merit. 8He considered two main issues in the case: (a)
whether or not respondents are guilty of unfair labor practice, and (b) whether or
not the respondents are liable to implement Wage Orders Nos. 01 and 02 on an
across-the-board basis. Finding no basis to rule in the affirmative on both issues, he
explained as follows:
The charge of bargaining in bad faith that the complainant
union attributes to the respondents is bereft of any certitude
inasmuch as based on the complainant union's own admission,
the latter vacillated on its own proposal to adopt an across-the-
board stand or future wage increases. In fact, the union
acknowledges the management's sincerity when the latter
allegedly implemented Republic Act 6727 on an across-the-
board basis. That such union proposal was not adopted in the
existing CBA was due to the fact that it was the union itself
which decided for its deferment. It is, therefore, misleading to
claim that the management undertook/promised to implement
future wage increases on an across-the-board basis when as
the evidence shows it was the union who asked for the
deferment of its own proposal to that effect.
The alleged discrimination in the implementation of the subject
wage orders does not inspire belief at all where the wage
orders themselves do not allow the grant of wage increases on
an across-the-board basis. That there were employees who
were granted the full extent of the increase authorized and
some others who received less and still others who did not
receive any increase at all, would not ripen into what the
complainants termed as discrimination. That the
implementation of the subject wage orders resulted into an
uneven implementation of wage increases is justified under the
law to prevent any wage distortion. What the respondents did
under the circumstances in order to deter an eventual wage
distortion without any arbitral proceedings is certainly
commendable.
The alleged violation of Article 100 of the Labor Code, as
amended, as well as Article XVII, Section 7 of the existing CBA
as herein earlier quoted is likewise found by this Branch to have
no basis in fact and in law. No benefits or privileges previously
enjoyed by the employees were withdrawn as a result of the
implementation of the subject orders. Likewise, the alleged
company practice of implementing wage increases declared by
the government on an across-the-board basis has not been duly
established by the complainants' evidence. The complainants
asserted that the company implemented Republic Act No. 6727
which granted a wage increase of P25.00 effective July 1, 1989
on an across-the-board basis. Granting that the same is true,
such isolated single act that respondents adopted would
definitely not ripen into a company practice. It has been said
that "a sparrow or two returning to Capistrano does not a
summer make."
Finally, on the second issue of whether or not the employees of
the respondents are entitled to an across-the-board wage
increase pursuant to Wage Orders Nos. 01 and 02, in the face
of the above discussion as well as our finding that the
respondents correctly applied the law on wage increases, this
Branch rules in the negative.
Likewise, for want of factual basis and under the circumstances
where our findings above are adverse to the complainants,
their prayer for moral and exemplary damages and attorney's
fees may not be granted.
Not satisfied, petitioner appealed to the NLRC that, in turn, promulgated the
assailed Resolution of April 29, 1993 9dismissing the appeal for lack of merit. Still
dissatisfied, petitioner sought reconsideration which, however, was denied by the
NLRC in the Resolution dated January 17, 1994. Hence, the instant petition
for certiorari contending that:
-A-
THE PUBLIC RESPONDENTS GROSSLY ERRED IN NOT DECLARING
THE PRIVATE RESPONDENTS GUILTY OF ACTS OF UNFAIR LABOR
PRACTICES WHEN, OBVIOUSLY, THE LATTER HAS BARGAINED IN
BAD FAITH WITH THE UNION AND HAS VIOLATED THE CBA
WHICH IT EXECUTED WITH THE HEREIN PETITIONER UNION.
-B-
THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT
DECLARING THE PRIVATE RESPONDENTS GUILTY OF ACTS OF
 DISCRIMINATION IN THE IMPLEMENTATION OF NCR WAGE
ORDER NOS. 01 AND 02.
-C-
THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT FINDING
THE PRIVATE RESPONDENTS GUILTY OF HAVING VIOLATED
SECTION 4, ARTICLE XVII OF THE EXISTING CBA.
-D-
THE PUBLIC RESPONDENTS GRAVELY ERRED IN NOT DECLARING
THE PRIVATE RESPONDENTS GUILTY OF HAVING VIOLATED
ARTICLE 100 OF THE LABOR CODE OF THE PHILIPPINES, AS
AMENDED.
-E-
ASSUMING, WITHOUT ADMITTING THAT THE PUBLIC
RESPONDENTS HAVE CORRECTLY RULED THAT THE PRIVATE
RESPONDENTS ARE GUILTY OF ACTS OF UNFAIR LABOR
PRACTICES, THEY COMMITTED SERIOUS ERROR IN NOT
FINDING THAT THERE IS A SIGNIFICANT DISTORTION IN THE
WAGE STRUCTURE OF THE RESPONDENT COMPANY.
-F-
THE PUBLIC RESPONDENTS ERRED IN NOT AWARDING TO THE
PETITIONERS HEREIN ACTUAL, MORAL, AND EXEMPLARY
DAMAGES AND ATTORNEY'S FEES.
As the Court sees it, the pivotal issues in this petition can be reduced into two, to
wit: (a) whether or not private respondent committed an unfair labor practice in its
refusal to grant across-the-board wage increases in implementing Wage Orders
Nos. 01 and 02, and (b) whether or not there was a significant wage distortion of
the wage structure in private respondent as a result of the manner by which said
wage orders were implemented.
With respect to the first issue, petitioner union anchors its arguments on the
alleged commitment of private respondent to grant an automatic across-the-board
wage increase in the event that a statutory or legislated wage increase is
promulgated. It cites as basis therefor, the aforequoted portion of the Minutes of
the collective bargaining negotiation on February 27, 1990 regarding wages,
arguing additionally that said Minutes forms part of the entire agreement between
the parties.
The basic premise of this argument is definitely untenable. To start with, if there
was indeed a promise or undertaking on the part of private respondent to obligate
itself to grant an automatic across-the-board wage increase, petitioner union
should have requested or demanded that such "promise or undertaking" be
incorporated in the CBA. After all, petitioner union has the means under the law to
compel private respondent to incorporate this specific economic proposal in the
CBA. It could have invoked Article 252 of the Labor Code defining "duty to bargain,"
thus, the duty includes "executing a contract incorporating such agreements if
requested by either party." Petitioner union's assertion that it had insisted on the
incorporation of the same proposal may have a factual basis considering the
allegations in the aforementioned joint affidavit of its members. However, Article
252 also states that the duty to bargain "does not compel any party to agree to a
proposal or make any concession." Thus, petitioner union may not validly claim
that the proposal embodied in the Minutes of the negotiation forms part of the
CBA that it finally entered into with private respondent.
The CBA is the law between the contracting parties 10 — the collective bargaining
representative and the employer-company. Compliance with a CBA is mandated by
the expressed policy to give protection to labor. 11 In the same vein, CBA provisions
should 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 purpose which it is intended to
serve." 12 This is founded on the dictum that a CBA is not an ordinary contract but
one impressed with public interest. 13 It goes without saying, however, that only
provisions embodied in the CBA should be so interpreted and complied with.
Where a proposal raised by a contracting party does not find print in the CBA, 14 it
is not a part thereof and the proponent has no claim whatsoever to its
implementation.
Hence, petitioner union's contention that the Minutes of the collective bargaining
negotiation meeting forms part of the entire agreement is pointless. The Minutes
reflects the proceedings and discussions undertaken in the process of bargaining
for worker benefits in the same way that the minutes of court proceedings show
what transpired therein. 15 At the negotiations, it is but natural for both
management and labor to adopt positions or make demands and offer proposals
and counter-proposals. However, nothing is considered final until the parties have
reached an agreement. In fact, one of management's usual negotiation strategies is
to ". . . agree tentatively as you go along with the understanding that nothing is
binding until the entire agreement is reached." 16 If indeed private
respondent promised to continue with the practice of granting across-the-board
salary increases ordered by the government, such promise could only be
demandable in law if incorporated in the CBA.
Moreover, by making such promise, private respondent may not be considered in
bad faith or at the very least, resorting to the scheme of feigning to undertake the
negotiation proceedings through empty promises. As earlier stated, petitioner
union had, under the law, the right and the opportunity to insist on
the foreseeable fulfillment of the private respondent's promise by demanding its
incorporation in the CBA. Because the proposal was never embodied in the CBA,
the promise has remained just that, a promise, the implementation of which
cannot be validly demanded under the law.
Petitioner's reliance on this Court's pronouncements 17 in Kiok Loy v. NLRC 18 is,
therefore, misplaced. In that case, the employer refused to bargain with the
collective bargaining representative, ignoring all notices for negotiations and
requests for counter proposals that the union had to resort to conciliation
proceedings. In that case, the Court opined that "(a) Company's refusal to make
counter-proposal, if considered in relation to the entire bargaining process, may
indicate bad faith and this is specially true where the Union's request for a counter-
proposal is left unanswered." Considering the facts of that case, the Court
concluded that the company was "unwilling to negotiate and reach an agreement
with the Union." 19
In the case at bench, however, petitioner union does not deny that discussion on
its proposal that all government-mandated salary increases should be on an across-
the-board basis was "deferred," purportedly because it relied upon the
"undertaking" of the negotiating panel of private respondent. 20 Neither does
petitioner union deny the fact that "there is no provision of the 1990 CBA
containing a stipulation that the company will grant across-the-board to its
employees the mandated wage increase." They simply assert that private
respondent committed "acts of unfair labor practices by virtue of its contractual
commitment made during the collective bargaining process." 21 The mere fact,
however, that the proposal in question was not included in the CBA indicates that
no contractual commitment thereon was ever made by private respondent as no
agreement had been arrived at by the parties. Thus:
Obviously the purpose of collective bargaining is the reaching of
an agreement resulting in a contract binding on the parties; but
the failure to reach an agreement after negotiations continued
for a reasonable period does not establish a lack of good faith.
The statutes invite and contemplate a collective bargaining
contract, but they do not compel one. The duty to bargain does
not include the obligation to reach an agreement. . . . 32
With the execution of the CBA, bad faith bargaining can no longer be imputed upon
any of the parties thereto. All provisions in the CBA are supposed to have been
jointly and voluntarily incorporated therein by the parties. This is not a case where
private respondent exhibited an indifferent attitude towards collective bargaining
because the negotiations were not the unilateral activity of petitioner union. The
CBA is proof enough that private respondent exerted "reasonable effort at good
faith bargaining." 23
Indeed, the adamant insistence on a bargaining position to the point where the
negotiations reach an impasse does not establish bad faith. Neither can bad faith
be inferred from a party's insistence on the inclusion of a particular substantive
provision unless it concerns trivial matters or is obviously intolerable. 24
The question as to what are mandatory and what are merely
permissive subjects of collective bargaining is of significance on
the right of a party to insist on his position to the point of
stalemate. A party may refuse to enter into a collective
bargaining contract unless it includes a desired provision as to a
matter which is a mandatory subject of collective bargaining;
but a refusal to contract unless the agreement covers a matter
which is not a mandatory subject is in substance a refusal to
bargain about matters which are mandatory subjects of
collective bargaining, and it is no answer to the charge of
refusal to bargain in good faith that the insistence on the
disputed clause was not the sole cause of the failure to agree or
that agreement was not reached with respect to other disputed
clauses. 25
On account of the importance of the economic issue proposed by petitioner union,
it could have refused to bargain and to enter into a CBA with private respondent.
On the other hand, private respondent's firm stand against the proposal did not
mean that it was bargaining in bad faith. It had the right "to insist on (its) position
to the point of stalemate." On the part of petitioner union, the importance of its
proposal dawned on it only after the wage orders were issued after the CBA had
been entered into. Indeed, from the facts of this case, the charge of bad faith
bargaining on the part of private respondent was nothing but a belated reaction to
the implementation of the wage orders that private respondent made in
accordance with law. In other words, petitioner union harbored the notion that its
members and the other employees could have had a better deal in terms of wage
increases had it relentlessly pursued the incorporation in the CBA of its proposal.
The inevitable conclusion is that private respondent did not commit the unfair
labor practices of bargaining in bad faith and discriminating against its employees
for implementing the wage orders pursuant to law.
The Court likewise finds unmeritorious petitioner union's contention that by its
failure to grant across-the-board wage increases, private respondent violated the
provisions of Section 5, Article VII of the existing CBA 26 as well as Article 100 of the
Labor Code. The CBA provision states:
Sec. 5. The COMPANY agrees to comply with all the applicable
provisions of the Labor Code of the Philippines, as amended,
and all other laws, decrees, orders, instructions, jurisprudence,
rules and regulations affecting labor.
Art. 100 of the Labor Code on prohibition against elimination or
diminution of benefits provides that "(n)othing in this Book shall be
construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this
Code."
We agree with the Labor Arbiter and the NLRC that no benefits or privileges
previously enjoyed by petitioner union and the other employees were withdrawn
as a result of the manner by which private respondent implemented the wage
orders. Granted that private respondent had granted an across-the-board increase
pursuant to Republic Act No. 6727, that single instance may not be considered an
established company practice. Petitioner union's argument in this regard is actually
tied up with its claim that the implementation of Wage Orders Nos. 01 and 02 by
private respondent resulted in wage distortion.
The issue of whether or not a wage distortion exists is a question of
fact 27 that is within the jurisdiction of the quasi-judicial tribunals below. Factual
findings of administrative agencies are accorded respect and even finality in this
Court if they are supported by substantial evidence. 28 Thus, in Metropolitan Bank
and Trust Company, Inc. v. NLRC, the Court said:
The issue of whether or not a wage distortion exists as a
consequence of the grant of a wage increase to certain
employees, we agree, is, by and large, a question of fact the
determination of which is the statutory function of the NLRC.
Judicial review of labor cases, we may add, does not go beyond
the evaluation of the sufficiency of the evidence upon which
the labor officials' findings rest. As such, the factual findings of
the NLRC are generally accorded not only respect but also
finality provided that its decisions are supported by substantial
evidence and devoid of any taint of unfairness or arbitrariness.
When, however, the members of the same labor tribunal are
not in accord on those aspects of a case, as in this case, this
Court is well cautioned not to be as so conscious in passing
upon the sufficiency of the evidence, let alone the conclusions
derived
therefrom. 29
Unlike in above-cited case where the Decision of the NLRC was not unanimous, the
NLRC Decision in this case which was penned by the dissenter in that case,
Presiding Commissioner Edna Bonto-Perez unanimously ruled that no wage
distortions marred private respondent's implementation of the wage orders. The
NLRC said:
On the issue of wage distortion, we are satisfied that there was
a meaningful implementation of Wage Orders Nos. 01 and 02.
This debunks the claim that there was wage distortion as could
be shown by the itemized wages implementation quoted
above. It should be noted that this itemization has not been
successfully traversed by the appellants. . . . . 30
The NLRC then quoted the labor arbiter's ruling on wage distortion.
We find no reason to depart from the conclusions of both the labor arbiter and the
NLRC. It is apropos to note, moreover, that petitioner's contention on the issue of
wage distortion and the resulting allegation of discrimination against the private
respondent's employees are anchored on its dubious position that private
respondent's promise to grant an across-the-board increase in government-
mandated salary benefits reflected in the Minutes of the negotiation is an
enforceable part of the CBA.
In the resolution of labor cases, this Court has always been guided by the State
policy enshrined in the Constitution that the rights of workers and the promotion
of their welfare shall be protected. 31 The Court is likewise guided by the goal of
attaining industrial peace by the proper application of the law. It cannot favor one
party, be it labor or management, in arriving at a just solution to a controversy if
the party has no valid support to its claims. It is not within this Court's power to
rule beyond the ambit of the law.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED and the
questioned Resolutions of the NLRC AFFIRMED. No costs.
SO ORDERED.
Duty to Bargain Collectively
ALU vs. Ferrer-Calleja, 173 SCRA 178
FACTS:
Petitioner Associated Labor Unions (ALU) informed private respondent GAW
Trading, Inc. that a majority of the latter's employees had authorized it to be their
sole and exclusive bargaining representative. Petitioner thereafter requested that
private respondent conduct a conference with it for the execution of an initial CBA.
On the ff day, ALU's Chairman furnished GAW Trading 10 final copies of the CBA for
Comment, or otherwise, for signing. Two days later, ALU (in behalf of majority of
the employees of GAW Trading, Inc.) signed and executed the collective bargaining
agreement.
In the meantime, the Southern Philippines Federation of Labor (SPFL) together with
nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a strike after it failed to
get the management of GAW Trading, Inc. to sit for a conference respecting its
demands. Specifically, SPFL wanted GAW Trading, Inc. to make a turn-about of its
standing recognition of ALU as the sole and exclusive bargaining representative of
its employees.
GAW Trading filed a petition for a Restraining Order/Preliminary Injunction seeking
to enjoin SPFL from continuing with the strike. Acting on the petition, the Labor
Arbiter declared the strike illegal.
Later, the Med-Arbiter issued an order declaring that a certification election be
held for all branches of GAW Trading, Inc. Aggrieved by the decision, ALU filed an
appeal, which the Bureau of Labor Relations Director granted. However, the
decision was reversed by respondent Director, on the ground that the CBA
between petitioner and GAW Trading was defective.
Petitioner thus filed SCA-C, asserting that the Med-Arbiter committed GAD in
issuing the order declaring that a certification election be held for all branches of
GAW Trading, Inc. It asseverated that the CBA between it and GAW Trading was
not defective
ISSUE:
W/N the CBA entered into between petitioner and GAW Trading was defective.
D/R:
NO.
The public respondent was correct in its holding that the CBA between petitioner
and GAW Trading was defective, for various reasons. First, the mechanics of
collective bargaining are set in motion only when the ff jurisdictional preconditions
are present:
1) possession of the status of majority representation by the employees'
representative in accordance with any of the means of selection and/or
designation provided for by the Labor Code;
2) proof of majority representation; and
3) a demand to bargain under LC251, (a). (PPD)
In this case, petitioner's status as an exclusive bargaining representative was found
to be dubious. Respondent GAW Trading sent a letter to the petitioner, merely
indicating that it was not against the desire of its workers and required petitioner
to present proof that it was supported by the majority in a meeting to be held on a
specified date. Yet petitioner did not positively establish that the employees
expressly recognized it as their exclusive bargaining representative. Clearly,
respondent GAW Trading acted with undue haste in recognizing petitioner as the
exclusive bargaining agent of the employees, for it merely relied on the latter's self-
serving claim that it was indeed recognized as such by said employees. Hence,
there is no clear compliance with the jurisdictional preconditions for collective
bargaining.
Second, there was a failure to post the CBA in at least two conspicuous places in
the establishment at least 5 days before its ratification. Petitioner ratiocinated that
the illegal strike staged by SPFL made it impossible to comply with the posting
requirement, for it resulted in the absence of impartial members of the bargaining
unit who could be apprised of the CBA's contents.
The SC found petitioner's justification puerile and unacceptable. In the first place,
the posting of copies of the CBA is the responsibility of the employer, and not the
petitioner. Secondly, the formulation and finalization of the CBA was suspect, for
there appeared to be undue haste in the conduct thereof. Hence, that an illegal
strike was conducted by the SPFL is of no moment.
Third, the public respondent director found that 181 of the 281 workers who
supposedly ratified the CBA had soon manifested their strong and vehement denial
and/or repudiation of the alleged negotiation and ratification of the CBA. This
indicates that the CBA would be detrimental to industrial stability.
Hence, the public respondent was correct in finding the CBA to be defective.
LAKAS NG MANGAGAGAWANG MAKABAYAN VS MARCELO ENTERPRISE GR. NO.
L-38258 J. GUERERO
FACTS: On May 23, 1967, the Lakas had existing CBAs within the bargaining units in
the respective companies comprising Marcelo Companies. The said CBAs were
entered into while they were affiliated with a national federation, Phil Social
Security Labor Union. Two of the CBAs were about to expire in May and June 1967.
The other one faced conflict as there was a rival union. On March 14, 1967, the
management of Marcelo Steel received a letter requesting negotiation of a new
CBA from PSSLU in behalf of UNWU. There were also proposals from the unions in
Marcelo Tire and Marcelo Rubber as the existing CBA was about to expire. Same
day, the union oin Marcelo Tire disauthorized PSSLU as their agent. Afterwards, the
rival union submitted ita own proposals. Another requests were received on May 3,
1967 and May 23, 1967 from two different unions. As the management was
confused as to which of the union really represents the workers, the president
asked for the proof of authorization from the unions and they were informed of the
conflicting claims and suggested that they file for certification election and the
decision of the court shall be followed and respected. PSSLU refused the suggestion
of the management and said that they will file ULP for refusing to bargain with
them. All of the unuons subsequently filed a Notice of Strike. MUEWA was certified
as the bargaining agent as it represents the majority of the workers in Marcelo Tire
and that there were no oppositions from the other union or interested persons.
Notices of Strike were withdrawn and the management agreed to sit down in a
conference for the bargaining. On the fourth conference, Lakas declared a strike
against Marcelo Companies. Acts of violence and vandalism attended by picketing,
the premises were blocked, windows of the plants were bad.y damaged. Cases
were filed against the strikers and a Return to Work order was agreed upon.
Marcelo Companies resumed its operations and strikers went back to work.
Marcelo Companies and Lakas resumed their bargaining negotiations. On Oct. 13,
1967 the negotiations reached its final stage. Then Lakas declared another strike
without filing a notice of strike resulting to complete paralyzation of the business.
Notices to return to work were posted and some of the strikers started working
again. The management required the workers to fill up forms so that they may be
given a schedule. However, the workers refused and insisted that they be admitted
without complying to the said requirement. Lakas then filed a ULP case based on
the alleged fact of non readmission of striking members. The trial court ruled that
the Marcelo Companies were not remiss in their obligation to bargain and that the
strikes conducted were illegal. However, it was decided that there was ULP in not
readmitting all the strikers.
ISSUE: -Whether or not Marcelo Companies are guilty of ULP -legitimate
representation
HELD: The SC ruled in favor of Marcelo Companies. Lakas was not the bargaining
representative, yet the management did not ignore the demand for collective
bargaining neither it was refused. Marcelo Companies may rightfully demand for
reasonable proof of majority representation on the part of the supposed or
putative bargaining agent as it is a natural consequence of the employer’s duty to
bargain with the bargaining agent who represents the majority of the workers. It is,
however, necessary that such demand is made in good faith and not as a pretext of
delay or evasion. Marcelo Companies did not commit ULP. The facts of the case
shows that the strikers were readmitted to work and the form required was
intended for proper scheduling and not to prevent workers from coming back to
work. It is only those who did not report back to work who are not readmitted.
NATIONAL UNION OF RESTAURANT WORKERS (PTUC), petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, ET AL., respondents.
Alejandro C. Villavieja for petitioner.
Padilla Law Office for respondents.
BAUTISTA ANGELO, J.:
On June 9, 1960, a complaint for unfair labor practice was lodged against the
owners of Tres Hermanas Restaurant, particularly Mrs. Felisa Herrera, on the
ground, among others, that respondents refused to bargain collectively with the
complaining union; respondents made a counter-proposal in the sense that they
would bargain with said union and would accept its demands if the same would
become a company union, and one Martin Briones, an employee, was separated
from the service because he was found to be the organizer and adviser of the
complaining union.
After respondents had filed their answer, wherein they denied the charges of
unfair labor practice filed against them, Judge Emiliano C. Tabigne, who was
assigned to act on the complaint, received the evidence, and on July 28, 1961,
rendered decision exonerating respondents. He found that the charges were not
proven and dismissed the complaint.
The case was taken to the court en banc, where in a split decision the court
affirmed the decision of Judge Tabigne. The case is now before us on a petition for
review.
The important findings of the court a quo which are now disputed by the union are:
(1) respondents did not refuse to bargain collectively with the union as in fact they
met its members with the only particularity that they were not able to accept all
the demands of the union; (2) respondents did not interfere, coerce or restrain
their employees in the exercise of their right to join the complaining union; and (3)
the dismissal of Martin Briones was due to the concern of Mrs. Herrera for her life
on account of the hatred that Briones had entertained against her, she being
always with him in the car he used to drive during their business routine. It is
claimed that Judge Tabigne committed a grave abuse of discretion in making the
above findings.
Anent the first issue, the court a quo found that in the letter sent by the union to
respondents containing its demands marked in the case as Exhibit 1, there appears
certain marks, opposite each demand, such as a check for those demands to which
Mrs. Felisa Herrera was agreeable, a cross signifying the disapproval of Mrs.
Herrera, and a circle regarding those demands which were left open for discussion
on some future occasion that the parties may deem convenient. Such markings
were made during the discussion of the demands in the meeting called by
respondents on May 3, 1960 at their restaurant in Quezon City. The court a
quo concluded that the fact that respondent Herrera had agreed to some of the
demands shows that she did not refuse to bargain collectively with the complaining
union.
We can hardly dispute this finding, for it finds support in the evidence. The
inference that respondents did not refuse to bargain collectively with the
complaining union because they accepted some of the demands while they refused
the others even leaving open other demands for future discussion is correct,
especially so when those demands were discussed at a meeting called by
respondents themselves precisely in view of the letter sent by the union on April
29, 1960. It is true that under Section 14 of Republic Act 875 whenever a party
serves a written notice upon the employer making some demands the latter shall
reply thereto not later than 10 days from receipt thereof, but this rendition is
merely procedural and as such its non-compliance cannot be deemed to be an act
of unfair labor practice. The fact is that respondents did not ignore the letter sent
by the union so much so that they called a meeting to discuss its demands, as
already stated elsewhere.
It is contended that respondents refused to bargain with the complaining union as
such even if they called a meeting of its officers and employees thereby concluding
that they did not desire to enter into a bargaining agreement with said union. This
conclusion has no rational relation with the main premise of the union for it is
belied by the fact that respondents did actually agree and bargain with the
representatives of the union. While it is true that respondents denied the capacity
of the complaining union to bargain collectively with the respondents this is
because they were of the impression that before a union could have that capacity it
must first be certified by the Court of Industrial Relations as the duly authorized
bargaining unit, in fact this is what they stated in their answer to the petition for
certification filed by said union before the Court of Industrial Relations (See Case
No. 763-MC). In said case, another union known as the International Labor and
Marine Union of the Philippines claimed to represent the majority of the
employees of respondent restaurant, and this is what it alleged in a letter sent to
the manager of respondents dated May 25, 1962.
Anent the second issue, the claim of the complaining union has also no basis. This is
premised on a document marked Exhibit C which contains certain alleged counter-
proposals tendered to complainant union the nature of which would apparently
indicate that respondents made use of coercion which interferes with the right of
the employees to self-organization. On this document certain notations were made
by one Ernesto Tan which are indeed derogatory and which were allegedly made
by him upon instructions of respondent Felisa Herrera. Thus, the pertinent notation
on which the union relies is one which states that respondent Herrera would be
willing to recognize the union "if union would be willing to recognize the union",
which would indeed show that Mrs. Herrera interfered with the employees' right to
self-organization. But respondents denied that they ever authorized Ernesto Tan to
make such notation or to represent them in the negotiations, for he was merely a
bookkeeper whose duties were confined to the keeping and examination of their
books of accounts and sales invoices. It appears that he was not even invited to the
meeting but merely volunteered to be present and made those notations on his
own account and initiative. The court a quo gave credence to this stand of
respondents, as can be seen in the following finding: "There is no evidence to show
that Ernesto Tan was authorized to represent management in the meeting held on
May 3, 1960, and that Ernesto Tan, being a mere bookkeeper of respondents, he is
not a part of management although he is the nephew of Mrs. Herrera." We are not
prepared to disturb this finding of the court a quo.
Finally, it is alleged in connection with the third issue that respondent Herrera
dismissed Martin Briones without sufficient cause other than his being the
organizer and adviser of the complaining union. It however appears from the very
testimony of Martin Briones that he is not the only one who organized the
complaining union but together with Galicano Apiz, Pablo Cabreros and Juan
Morales, with the particularity that, as Briones himself had intimated, Apiz,
Cabreros and Morales were more active than himself in organizing the union so
much so that they were appointed officers of that union. And yet, Apiz, Cabreros
and Morales were never touched and continued to be employed in respondents'
restaurant. For this reason, the court a quo discredited the claim that Briones was
dismissed because of union activities but rather because of the threats he made on
Mrs. Herrera, as communicated to her by her sister Aureata. The following is the
finding made by the court a quo on this point: "If it is the union activities of
complainant's members that Mrs. Herrera did not like, Apiz, Cabreros and Morales
should have been dismissed by her also, because said persons were more active
than Briones in the organization of the union. Verily, it was not the union activities
of Martin Briones that prompted Mrs. Herrera to dismiss him, but her fear for the
safety of her life on account of the smouldering members of hatred that the former
had against the latter, the said persons being always together in her car driven by
Briones, during business routine." This finding finds support in the evidence.
On the strength of the foregoing considerations, we find no justification for
disturbing the findings of the court a quo which led to the dismissal of the
complaint under consideration.1äwphï1.ñët
WHEREFORE, the decision appealed from is affirmed. No costs.
Bengzon, C.J., Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Reg
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT,
petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN
NG PAGGAWA
(KILUSAN), respondents.
NATURE:
Petition for certiorari to annul the decision of the NLRC dated July 20, 1979 which
found petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified
refusal to bargain, in violation of par. (g) of Article 249 of the New Labor Code, and
declared the draft proposal of the Union for a collective bargaining agreement as
the governing collective bargaining agreement between the employees and the
management.

FACTS:
 In a certification election held on October 3, 1978, the Pambansang Kilusang
Paggawa, a legitimate late labor federation, won and was subsequently
certified in a resolution by the Bureau of Labor Relations as the sole and
exclusive bargaining agent of the rank-and-file employees of Sweden Ice
Cream Plant. The Company's MR of the said resolution was denied.
 Thereafter, the Union furnished the Company with two copies of its proposed
CBA. At the same time, it requested the Company for its counter proposals.
Eliciting no response to the aforesaid request, the Union again wrote the
Company reiterating its request for collective bargaining negotiations. Both
requests were ignored and remained unacted upon by the Company.
 Left with no other alternative in its attempt to bring the Company to the
bargaining table, the Union, on February 14, 1979, filed a "Notice of Strike",
with the Bureau of Labor Relations (BLR) on ground of unresolved economic
issues in collective bargaining.
 Conciliation proceedings then followed during the thirty-day statutory cooling-
off period. But all attempts towards an amicable settlement failed, prompting
the Bureau of Labor Relations to certify the case to the NLRC for compulsory
arbitration pursuant to Presidential Decree No. 823, as amended. The
Company did not submit its position paper, and instead requested for a
resetting which was granted.
 The case was reset many times upon the request of defendant’s counsel.
When the company’s representative failed to appear in a scheduled hearing
and defendant’s counsel again asked for a postponement, the labor arbiter
denied the request. He also ruled that the Company has waived its right to
present further evidence and, therefore, considered the case submitted for
resolution.
 The LA submitted its report to the NLRC, which ruled in favor of the union.
 Petitioner went to the SC assailing the NLRC order and alleging the following:
 that its right to procedural due process has been violated when it was
precluded from presenting further evidence in support of its stand and
when its request for further postponement was denied.
 that the NLRC's finding of unfair labor practice for refusal to bargain is
not supported by law and the evidence considering that it was only on
May 24, 1979 when the Union furnished them with a copy of the
proposed CBA and it was only then that they came to know of the
Union's demands; and finally,
 that the Collective Bargaining Agreement approved and adopted by the
NLRC is unreasonable and lacks legal basis.
HELD:
CBA, DEFINED
Collective bargaining which is defined as negotiations towards a collective
agreement, is one of the democratic frameworks under the New Labor Code,
designed to stabilize the relation between labor and management and to create a
climate of sound and stable industrial peace. It is a mutual responsibility of the
employer and the Union and is characterized as a legal obligation. So much so that
Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an
employer to refuse "to meet and convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement with respect to wages, hours of work,
and all other terms and conditions of employment including proposals for adjusting
any grievance or question arising under such an agreement and executing a
contract incorporating such agreement, if requested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is
not under any legal duty to initiate contract negotiation. The mechanics of
collective bargaining is set in motion only when the following jurisdictional
preconditions are present, namely:
(1) possession of the status of majority representation of the employees'
representative in accordance with any of the means of selection or designation
provided for by the Labor Code;
(2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New Labor Code ...
PETITIONER’S ACTS SHOW DISINTEREST TO BARGAIN IN GOOD FAITH
From the over-all conduct of petitioner company in relation to the task of
negotiation, there can be no doubt that the Union has a valid cause to complain
against its (Company's) attitude, the totality of which is indicative of the latter's
disregard of, and failure to live up to, what is enjoined by the Labor Code — to
bargain in good faith. Petitioner Company is GUILTY of unfair labor practice.
It has been indubitably established that (1) respondent Union was a duly certified
bargaining agent; (2) it made a definite request to bargain, accompanied with a
copy of the proposed Collective Bargaining Agreement, to the Company not only
once but twice which were left unanswered and unacted upon; and (3) the
Company made no counter proposal whatsoever all of which conclusively indicate
lack of a sincere desire to negotiate.
A Company's refusal to make counterproposal if considered in relation to the entire
bargaining process, may indicate bad faith and this is specially true where the
Union's request for a counter proposal is left unanswered.
Petitioner's aforesaid submittal that it has been denied due process failed to
impress the SC. Considering the various postponements granted in its behalf, the
claimed denial of due process appeared totally bereft of any legal and factual
support. The moves and overall behavior of petitioner-company were in total
derogation of the policy enshrined in the New Labor Code which is aimed towards
expediting settlement of economic disputes.
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 tolerated and
allowed with impunity to resort to schemes feigning negotiations by going through
empty gestures. More so, as in the instant case, where the intervention of the
NLRC was properly sought for after conciliation efforts undertaken by the BLR
failed.
The instant case being a certified one, it must be resolved by the NLRC pursuant to
the mandate of P.D. 873, as amended, which authorizes the said body to determine
the reasonableness of the terms and conditions of employment embodied in any
CBA. To that extent, utmost deference to its findings of reasonableness of any CBA
as the governing agreement by the employees and management must be accorded
due respect by this Court.
Standard Chartered Bank Employees Union vs Confessor Facts: Bank and the
Union signed a five-year collective bargaining agreement (CBA) with a provision to
renegotiate the terms thereof on the third year. Prior to the expiration of the
three-year period but within the sixty-day freedom period, the Union initiated the
negotiations. On February 18, 1993, the Union, through its President, Eddie L.
Divinagracia, sent a letter containing its proposals covering political provisions and
thirty-four (34) economic provisions. The Bank attached its counter-proposal to the
non-economic provisions proposed by the Union. The Bank posited that it would be
in a better position to present its counter-proposals on the economic items after
the Union had presented its justifications for the economic proposals. Before the
commencement of the negotiation, the Union, through Divinagracia, suggested to
the Bank’s Human Resource Manager and head of the negotiating panel, Cielito
Diokno, that the bank lawyers should be excluded from the negotiating team. The
Bank acceded. Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr.,
the President of the National Union of Bank Employees (NUBE), the federation to
which the Union was affiliated, be excluded from the Union’s negotiating panel.
However, Umali was retained as a member thereof. Except for the provisions on
signing bonus and uniforms, the Union and the Bank failed to agree on the
remaining economic provisions of the CBA. The Union declared a deadlock. On the
other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages
before the Arbitration Branch of the National Labor Relations Commission (NLRC)
in Manila. It contended that the Union demanded "sky high economic demands,"
indicative of blue-sky bargaining. Further, the Union violated its no strike- no
lockout clause by filing a notice of strike before the NCMB. Considering that the
filing of notice of strike was an illegal act, the Union officers should be dismissed.
Issue: Whether or not the Union was able to substantiate its claim of unfair labor
practice against the Bank arising from the latter’s alleged “interference” with its
choice of negotiator; surface bargaining; making bad faith non-economic proposals;
and refusal to furnish the Union with copies of the relevant data;
Ruling: ART. 243. COVERAGE AND EMPLOYEES’ RIGHT TO SELFORGANIZATION. –
All persons employed in commercial, industrial and agricultural enterprises and in
religious, charitable, medical or educational institutions whether operating for
profit or not, shall have the right to selforganization and to form, join, or assist
labor organizations of their own choosing for purposes of collective bargaining.
Ambulant, intermittent and itinerant workers, self-employed people, rural workers
and those without any definite employers may form labor organizations for their
mutual aid and protection. Article 248(a) of the Labor Code, considers it an unfair
labor practice when an employer interferes, restrains or coerces employees in the
exercise of their right to self-organization or the right to form association. The right
to self-organization necessarily includes the right to collective bargaining.
Parenthetically, if an employer interferes in the selection of its negotiators or
coerces the Union to exclude from its panel of negotiators a representative of the
Union, and if it can be inferred that the employer adopted the said act to yield
adverse effects on the free exercise to right to self-organization or on the right to
collective bargaining of the employees, ULP under Article 248(a) in connection with
Article 243 of the Labor Code is committed. In order to show that the employer
committed ULP under the Labor Code, substantial evidence is required to support
the claim. Substantial evidence has been defined as such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. The
circumstances that occurred during the negotiation do not show that the
suggestion made by Diokno to Divinagracia is an anti-union conduct from which it
can be inferred that the Bank consciously adopted such act to yield adverse effects
on the free exercise of the right to self-organization and collective bargaining of the
employees, especially considering that such was undertaken previous to the
commencement of the negotiation and simultaneously with Divinagracia’s
suggestion that the bank lawyers be excluded from its negotiating panel. It is clear
that such ULP charge was merely an afterthought. The accusation occurred after
the arguments and differences over the economic provisions became heated and
the parties had become frustrated. The Duty to Bargain Collectively Surface
bargaining is defined as “going through the motions of negotiating” without any
legal intent to reach an agreement. The Union has not been able to show that the
Bank had done acts, both at and away from the bargaining table, which tend to
show that it did not want to reach an agreement with the Union or to settle the
differences between it and the Union. Admittedly, the parties were not able to
agree and reached a deadlock. However, it is herein emphasized that the duty to
bargain “does not compel either party to agree to a proposal or require the making
of a concession. Hence, the parties’ failure to agree did not amount to ULP under
Article 248(g) for violation of the duty to bargain. Estoppel not Applicable In the
Case at Bar The approval of the CBA and the release of signing bonus do not
necessarily mean that the Union waived its ULP claim against the Bank during the
past negotiations. After all, the conclusion of the CBA was included in the order of
the SOLE, while the signing bonus was included in the CBA itself. The Union Did Not
Engage In Blue-Sky Bargaining The Bank failed to show that the economic demands
made by the Union were exaggerated or unreasonable. The minutes of the meeting
show that the Union based its economic proposals on data of rank and file
employees and the prevailing economic benefits received by bank employees from
other foreign banks doing business in the Philippines and other branches of the
Bank in the Asian region. In sum, we find that the public respondent did not act
with grave abuse of discretion amounting to lack or excess of jurisdiction when it
issued the questioned order and resolutions. While the approval of the CBA and
the release of the signing bonus did not estop the Union from pursuing its claims of
ULP against the Bank, we find that the latter did not engage in ULP. We, likewise,
hold that the Union is not guilty of ULP.
DIVINE WORD UNIVERSITY OF TACLOBAN VS. SECRETARY OF LABOR FACTS: •
Divine Word University Employees Union (DWUEU) is the sole and bargaining agent
of the Divine Word University. Sometime in 1985, DWUEU submitted its collective
bargaining proposals. The University replied and requested a preliminary
conference which unfortunately did not take place due to the alleged withdrawal
of the CBA proposals. • Because of this, the union filed a notice of strike on the
grounds of bargaining deadlock and unfair labor practice. • Then, an agreement
between the University and DWUEUALU were held after the filing of the notice of
strike. • DWUEU-ALU, consonant with the agreement, submitted its collective
bargaining proposals but were ignored by the University. ISSUE: WON the
complaint for unfair labor practice filed by the Union is with merit. HELD: A
thorough study of the records reveals that there was no "reasonable effort at good
faith bargaining" specially on the part of the University. Its indifferent towards
collective bargaining inevitably resulted in the failure of the parties to arrive at an
agreement. As it was evident that unilateral moves were being undertaken only by
the DWUEU-ALU, there was no counteraction of forces or an impasse to speak of.
While collective bargaining should be initiated by the union, there is a
corresponding responsibility on the part of the employer to respond in some
manner to such acts. This is a clear from the provisions of the Labor Code Art250(a)
of which states: 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 10 calendar days from receipt of
such notice. Hence, petitioner's contention that the DWUEU-ALU's proposals may
not be unilaterally imposed on it on the ground that a collective bargaining
agreement is a contract wherein the consent of both parties is indispensable is
devoid of merit. A similar argument had already been disregarded in the case of
Kiok Loy v. NLRC, where we upheld the order of the NLRC declaring the unions draft
CBA proposal as the collective agreement which should govern the relationship
between the parties. Kiok Loy vs. NLRC is applicable in the instant case, considering
that the fact therein have also been indubitably established in this case. These
factors are: (a) the union is the duly certified bargaining agent; (b) it made a
definite request to bargain submitted its collective bargaining proposals, and (c)
the University made no further proposal whatsoever. As we said in Kiok Loy v.
NLRC, a company's refusal to make counter proposal if considered in relation to the
entire bargaining process, may indicate bad faith and this is especially true where
the Union's request for a counter proposal is left unanswered. "Moreover, the
Court added in the same case that "it is not obligatory upon either side of a labor
controversy to precipitately accept or agree to the proposal of the other. But an
erring party should not be tolerated and allowed with impunity to resort to
schemes feigning negotiations by going through empty gestures.
Nestle Philippines vs NLRC Case Digest
Nestle Philippines, Inc. vs. NLRC and Union of Filipro Employees
193 SCRA 504
Facts: Four (4) collective bargaining agreements separately covering the
petitioner's employees in its Alabang/Cabuyao factories; Makati Administration
Office. (Both Alabang/Cabuyao factories and Makati office were represented by the
respondent, Union of Filipro Employees [UFE]);Cagayan de Oro Factory represented
by WATU; and Cebu/Davao Sales Offices represented by the Trade Union of the
Philippines and Allied Services (TUPAS), all expired on June 30, 1987. UFE was
certified as the sole and exclusive bargaining agent for all regular rank-and-file
employees at the petitioner's Cagayan de Oro factory, as well as its Cebu/Davao
Sales Office.
In August 1987, while the parties, were negotiating, the employees at Cabuyao
resorted to a "slowdown" and walk-outs prompting the petitioner to shut down the
factory. Marathon collective bargaining negotiations between the parties ensued.
On September 1987, the UFE declared a bargaining deadlock. On September 8,
1987, the Secretary of Labor assumed jurisdiction and issued a return to work
order. In spite of that order, the union struck, without notice, at the
Alabang/Cabuyao factory, the Makati office and Cagayan de Oro factory on
September 11, 1987 up to December 8, 1987. The company retaliated by dismissing
the union officers and members of the negotiating panel who participated in the
illegal strike. The NLRC affirmed the dismissals on November 2, 1988. On January
26, 1988, UFE filed a notice of strike on the same ground of CBA deadlock and
unfair labor practices.
However, on March 30, 1988, the company was able to conclude a CBA with the
union at the Cebu/Davao Sales Office, and on August 5, 1988, with the Cagayan de
Oro factory workers. The union assailed the validity of those agreements and filed a
case of unfair labor practice against the company on November 16, 1988. After
conciliation efforts of the NCMB yielded negative results, the dispute was certified
to the NLRC. The NLRC issued a resolution on June 5, 1989, whose pertinent
disposition regarding the union's demand for liberalization of the company's
retirement plan for its workers. the NLRC issued a resolution denying the motions
for reconsideration. With regard to the Retirement Plan, the NLRC held that Anent
management's objection to the modification of its Retirement Plan, the plan is
specifically mentioned in the previous bargaining agreements thereby integrating
or incorporating the provisions thereof to the agreement. By reason of its
incorporation, the plan assumes a consensual character which cannot be
terminated or modified at will by either party. Consequently, it becomes part and
parcel of CBA negotiations.
Petitioner alleged that since its retirement plan is non-contributory, Nestle has the
sole and exclusive prerogative to define the terms of the plan because the workers
have no vested and demandable rights, the grant thereof being not a contractual
obligation but merely gratuitous. At most the company can only be directed to
maintain the same but not to change its terms. It should be left to the discretion of
the company on how to improve or modify the same.
Issue: Whether or not the workers have vested and demandable rights over the
retirement plan.
Ruling: The Court ruled that employees have a vested and demandable right over
the retirement plan. The inclusion of the retirement plan in the collective
bargaining agreement as part of the package of economic benefits extended by the
company to its employees to provide them a measure of financial security after
they shall have ceased to be employed in the company, reward their loyalty, boost
their morale and efficiency and promote industrial peace, gives "a consensual
character" to the plan so that it may not be terminated or modified at will by either
party.
The fact that the retirement plan is non-contributory, i.e., that the employees
contribute nothing to the operation of the plan, does not make it a non-issue in the
CBA negotiations. As a matter of fact, almost all of the benefits that the petitioner
has granted to its employees under the CBA — salary increases, rice allowances,
midyear bonuses, 13th and 14th month pay, seniority pay, medical and
hospitalization plans, health and dental services, vacation, sick & other leaves with
pay — are non-contributory benefits. Since the retirement plan has been an
integral part of the CBA since 1972, the Union's demand to increase the benefits
due the employees under said plan, is a valid CBA issue.
The petitioner's contention, that employees have no vested or demandable right to
a non-contributory retirement plan, has no merit for employees do have a vested
and demandable right over existing benefits voluntarily granted to them by their
employer. The latter may not unilaterally withdraw, eliminate or diminish such
benefits.
ADMINISTRATION OF CBA; GRIEVANCE AND VOLUNTARY ARBITRATION
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-19779 July 30, 1966
RIZAL LABOR UNION, CARLOS SANTOS, EDILBERTO REYES, TEOFENES
MINGUILLAN, APRONIANO CELAJES, AUGUSTO RAYMUNDO, CELESTINO RINO,
EDMUNDO GARCIA, JOSE EVANCHES, MELENCIO ENRIQUEZ, PEDRO ANTAZO,
BENJAMIN ONGKIATCO, FELIX ADSUARA, GREGORIO YUNZAL and VICENTE
INAMAC, petitioners,
vs.
RIZAL CEMENT COMPANY, INC., JUAN DE LEON, RODOLFO FAUSTINO,
BINANGONAN LABOR UNION LOCAL 104, FILOMENO PRUDON, NICANOR
MEYCACAYAN, MACARIO CENIDOZA, APOLONIO SUMALDE, LOTARIO BATAN,
FRANCISCO EVANGELISTA, DOMINGO PUBLICO, HON. ARSENIO MARTINEZ, Judge,
Court of Industrial Relations, HON. EMILIANO TABIGNE, Judge, Court of Industrial
Relations, and HON. AMANDO BUGAYONG, Judge, Court of Industrial Relations,
respondents.
Pedro A. Lopez for petitioner.
Bausa, Ampil and Suarez for respondent Rizal Cement Co., Inc.
Mariano B. Tuazon for respondent Court of Industrial Relations.
A. V. Villacorta for respondent Union.
BARRERA, J.:
This is a petition filed by the Rizal Labor Union for the review of the resolution of
the Court of Industrial Relations en banc (in Case No. 16115-ULP), dismissing the
petition for unfair labor practice filed against the Binangonan Labor Union, Local
104 and the Rizal Cement Company.1äwphï1.ñët
On February 13, 1958, Carlos Santos and 14 other employees of the Rizal Cement
company, while still members of the Binangonan Labor Union Local 104, formed
and organized the Rizal Labor Union. The company was notified thereof on March
18, 1958. Prior to this date or on March 15, 1958, Carlos Santos and Teofines
Minguillan, president and secretary, respectively, of the newly-organized Rizal
Labor Union, received identical letters from the Binangonan Labor Union, requiring
them to explain in 48 hours why they should not be expelled for disloyalty.
Although Santos and Minguillan requested for the convocation of a general
meeting of the members of the Binangonan Labor Union to explain their side, the
15 organizers of the new union were expelled from their original union on March
21, 1958. On the same day, it demanded the dismissal of the expelled members
from employment, which the company did on March 22, 1958.
The dismissed employees went to the Court of Industrial Relations charging the
Company and the Binangonan Labor Union with unfair labor practices. Said
respondents answered the charges by referring to the alleged closed-shop proviso
in the subsisting collective bargaining agreement between them. After due hearing,
the trial judge rendered a decision holding that the supposed closed-shop proviso,
while valid, was inadequate to justify the dismissal of complainants from
employment. The company was thus ordered to reinstate them and both
respondents were directed to pay, jointly and severally, the complainants their
back wages. Upon respondents, motion for reconsideration, the judgment of the
trial Judge was reversed by the court en banc. The dismissal of complainants was
found to be justified by the closed shop proviso of the collective bargaining
agreement, although they were declared entitled to separation pay. Complainants
filed the present petition for review.
The only issue presented in this case is whether the dismissal of the complaining 15
employees was justified or not. The resolution of this question hinges on the
validity and adequacy of the supposed closed-shop proviso of the collective
bargaining contract between respondent Company and respondent union. For, it is
axiomatic that in order that the discharge of an employee pursuant to a closed-
shop agreement may be considered justified, it must first be shown that the said
agreement is valid. The provisions of the contract relied by respondents read as
follows:
The EMPLOYER agrees to have in its employ and to employ only members
in good standing of the UNION in all its branches, units, plants, quarries,
warehouses, docks, etc. The UNION agrees to furnish at all time the
laborers, employees and all technical helps that the EMPLOYER may
 require. EMPLOYER, however, reserves its right to accept or reject where
they fail to meet its requirements. (Article 1, Sec. 5.)
The EMPLOYER agrees not to have in its employ nor to hire any new
employee or laborer unless he is a member of good standing of the
UNION, and a bona fide holder of a UNION (NWB) card, provided such
new employee or laborer meets the qualifications required by the
EMPLOYER. (Article VII, Sec. 1-d).
The trial Judge construed the first, Article 1, Section 5, as applicable to those
already on the job at the time the agreement was entered into in 1954,1 while
Article VII, Section 1-(d) as applicable to those getting employment thereafter.
However, while the trial Judge ruled that the aforequoted pertinent provision of
the collective bargaining agreement does not prescribe the period within which the
employees must remain as members of good standing of the union, and therefore
the dismissal of the complainants after they were expelled from the union was
unjustified, the court en banc ruled that the word "employ" as used in the proviso
("to have in its employ and to employ only members in good standing of the union"
means "to retain in service", "to suffer or permit to work", "to keep at work". In
short, the court en banc would read in the provision the employer's assent to retain
in the service or to keep at work only those union members of good standing. We
incline to uphold the stand of the trial judge.
In one case,2 this Court ruled that a proviso in the collective bargaining contract
which reads:
That the UNION shall have the exclusive right and privilege to supply the
COMPANY with such laborers, employees and workers as are necessary in
the logging, mechanical, etc. ... and that the COMPANY agrees to employ
or hire in any of its departments only such person or persons who are
members of the UNION.
does not establish a "closed-shop" agreement, Thus, we held:
Inasmuch as Article II above quoted does not provide that employees
"must continue to remain members in good standing" of respondent
union "to keep their jobs," the collective bargaining agreement between
them does not establish a "closed shop," except in a very limited sense,
namely, that the laborers' employees and workers engaged by the
company after the signing of the agreement on January 23, 1955, must
be members of respondent union. The agreement does not affect the
right of the company to retain those already working therefor on or
before said date, or those hired, or employed subsequently thereto,
while they were members of respondent union, but who, thereafter,
resign or are expelled therefrom.
In order that an employer may be deemed bound, under a collective
bargaining agreement, to dismiss employees for non-union membership,
the stipulation to this effect must be so clear and unequivocal as to leave
no room for doubt thereon. An undertaking of this nature is so harsh that
it must be strictly construed, and doubts must be resolved against the
existence of "closed shop." Referring particularly to the abovequoted
Article II, we note that the same establishes the exclusive right of
respondent union to "supply" laborers, etc., and limits the authority of
the company to "employ or hire" them. In other words, it requires that
the laborers, employees and workers hired or employed by the company
be members of respondent union at the time of the commencement of
the employer- employee relation. Membership in respondent union is
not a condition for the continuation of said relation or for the retention of
a laborer or employee engaged either before said agreement or while he
was a member of said union.
There being no substantial difference between the wording of the provision
involved in this case and that construed in the aforementioned case, we find no
reason for the adoption of a different ruling herein.
For the foregoing reason, the resolution of the respondent Court en banc is hereby
set aside. Respondents Company and union are declared guilty of unfair labor
practice as charged, and they are ordered to reinstate the complainants, and pay
jointly and severally, their back wages from the date of their dismissal until they
are reinstated by the respondent Company minus whatever they may have earned
elsewhere during the period of their dismissal. Without costs. So ordered.
MSMG-UWP v. Ramos, GR 113907, February 28, 2000
Facts: Petitioner Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc.,
(MSMG or local union), is an affiliate of the private respondent, United Lumber and
General Workers of the Philippines (ULGWP), referred to as the "federation". The
CBA between MSMG/ULGWP and M. Greenfield, Inc. includes a Union Security
clause which mandates that all employees who are covered must be presently
members of the UNION and shall remain members of the UNION for the duration
of the Agreement as a condition precedent to continued employment with the
COMPANY. The local union held a general membership meeting in which several
union members failed to attend, prompting the Executive Board to create a
committee tasked to investigate the non-attendance of several union members in
the said assembly, pursuant to Sections 4 and 5, Article V of the Constitution and
By-Laws of the union. The local union wrote respondent company a letter
requesting it to deduct the union fines from the wages/salaries of those union
members who failed to attend the general membership meeting. The Secretary
General of the national federation disapproved the resolution of the local union
imposing the P50.00 fine. The union officers protested such action by the
Federation. The imposition of P50.00 fine became the subject of bitter
disagreement between the Federation and the local union culminating in the
latter’s declaration of general autonomy from the former through a Resolution
passed by the local executive board and ratified by the general membership. In
retaliation, the national federation asked respondent company to stop the
remittance of the local union’s share in the education funds (a benefit from the
CBA). This was objected to by the local union which demanded that the education
fund be remitted to it in full. The company was thus constrained to file a Complaint
for Interpleader with a Petition for Declaratory Relief with the Med-Arbitration
Branch of DOLE. The MedArbiter ordered that the ULGWP through its local union
officers shall administer the collective bargaining agreement (CBA) and that the
company shall remit the P10,000.00 monthly labor education program fund to the
ULGWP subject to the condition that it shall use the said amount for its intended
purpose. On appeal, the Director issued a, Resolution which modified in part the
earlier disposition, to the extent that the company should remit the amount of five
thousand pesos (P5,000.00) of the P10,000.00 monthly labor education program
fund to ULGWP and the other P5,000.00 to MSMG. Meanwhile, the officials of
ULGWP called a Special National Executive Board where a Resolution was passed
placing the MSMG under trusteeship and appointing respondent Cesar Clarete as
administrator. The said administrator wrote the respondent company informing
the latter of its designation of a certain Alfredo Kalingking as local union president
and "disauthorizing" the incumbent union officers from representing the
employees. The petitioner union officers received identical letters from the
administrator requiring them to explain within 72 hours why they should not be
removed from their office and expelled from union membership. Consequently, the
officers were expelled from the ULGWP for committing acts of disloyalty and/or
acts inimical to the interest and violative to the Constitution and by-laws of your
federation. And since they were no longer members of good standing, ULGWP also
recommended their termination from employment. The Federation filed a Notice
of Strike with the National Conciliation and Mediation Board to compel the
company to effect the immediate termination of the expelled union officers. Under
the pressure of a threatened strike, respondent company terminated the 30 union
officers from employment. This provoked some of the members of the local union
to demonstrate their protest for the dismissal of the said union officers. Some
union members left their work posts and walked out of the company premises. A
total of 78 union shop stewards were placed under preventive suspension by
respondent company. This prompted the union members to again stage a walk-out
and resulted in the official declaration of strike. The strike was attended with
violence, force and intimidation on both sides resulting to physical injuries to
several employees, both striking and non-striking, and damage to company
properties. The employees who participated in the strike and allegedly figured in
the violent incident were placed under preventive suspension by respondent
company. The company also sent return-to-work notices to the home addresses of
the striking employees thrice successively. However, respondent company
admitted that only 261 employees were eventually accepted back to work. Those
who did not respond to the return-to-work notice were sent termination.
Petitioners filed a verified complaint with the Arbitration Branch, NCR, DOLE,
Manila, charging private respondents of unfair labor practice which consists of
union busting, illegal dismissal, illegal suspension, interference in union activities,
discrimination, threats, intimidation, coercion, violence, and oppresion. After the
filing of the complaint, the lease contracts on the respondent company’s office and
factory at Merville Subdivision, Parañaque expired and were not renewed.
manufacturing operations, the company was constrained to move the said
departments to Tacloban, Leyte. The Labor Arbiter dismissed the complaint as it
found that the termination was valid and in compliance with the union security
clause of the CBA. Petitioners then appealed to the NLRC. The First Division
affirmed the Labor Arbiter’s disposition and denied the MFR, hence, this recourse
to the SC.
Issue: 1. Whether or not respondent company was justified in dismissing petitioner
employees merely upon the labor federation’s demand for the enforcement of the
union security clause embodied in their CBA.
No. Although this Court has ruled that union security clauses embodied in the
collective bargaining agreement may be validly enforced and that dismissals
pursuant thereto may likewise be valid, this does not erode the fundamental
requirement of due process. The reason behind the enforcement of union security
clauses which is the sanctity and inviolability of contract cannot override one’s right
to due process.
While the company, under a maintenance of membership provision of the
collective bargaining agreement, is bound to dismiss any employee expelled by the
union for disloyalty upon its written request, this undertaking should not be done
hastily and summarily. The company acts in bad faith in dismissing a worker
without giving him the benefit of a hearing. Due process must be observed in
dismissing an employee because it affects not only his position but also his means
of livelihood. Employers should respect and protect the rights of their employees,
which include the right to labor.
In the case under scrutiny, petitioner union officers were expelled by the
federation for allegedly commiting acts of disloyalty and/or inimical to the interest
of ULGWP and in violation of its Constitution and By-laws. Upon demand of the
federation, the company terminated the petitioners without conducting a separate
and independent investigation. Respondent company did not inquire into the cause
of the expulsion and whether or not the federation had sufficient grounds to effect
the same. Relying merely upon the federation’s allegations, respondent company
terminated petitioners from employment when a separate inquiry could have
revealed if the federation had acted arbitrarily and capriciously in expelling the
union officers. Respondent company’s allegation that petitioners were accorded
due process is belied by the termination letters received by the petitioners which
state that the dismissal shall beimmediately effective.
An employee is entitled to be protected not only from a company which disregards
his rights but also from his own union the leadership of which could yield to the
temptation of swift and arbitrary expulsion from membership and mere dismissal
from his job.
The enforcement of union security clauses is authorized by law provided such
enforcement is not characterized by arbitrariness, and always with due process.
Even on the assumption that the federation had valid grounds to expel the union
officers, due process requires that these union officers be accorded a separate
hearing by respondent company.
Thus, notwithstanding the fact that the dismissal was at the instance of the
federation and that it undertook to hold the company free from any liability
resulting from such a dismissal, the company may still be held liable if it was remiss
in its duty to accord the would-be dismissed employees their right to be heard on
the matter (according to jurisprudence, the company is liable for such tortuous act,
thus, solidarily liable with the federation).
2. Whether or not the Labor Arbiter properly took cognizance of the case.
Although the issue of whether or not the federation had reasonable grounds to
expel the petitioner union officers is properly within the original and exclusive
jurisdiction of the Bureau of Labor Relations, being an intra-union conflict, this
Court deems it justifiable that such issue be nonetheless ruled upon, as the Labor
Arbiter did, for to remand the same to the Bureau of Labor Relations would be to
intolerably delay the case.
3. Whether the petitioner union officers were justifiably expelled from the
federation for committing acts of disloyalty when it undertook to disaffiliate from
the federation.
No. A local union has the right to disaffiliate from its mother union or declare its
autonomy. A local union, being a separate and voluntary association, is free to
serve the interests of all its members including the freedom to disaffiliate or
declare its autonomy from the federation to which it belongs when circumstances
warrant, in accordance with the constitutional guarantee of freedom of
association.
The purpose of affiliation by a local union with a mother union or a federation is to
increase by collective action the bargaining power in respect of the terms and
conditions of labor. Yet the locals remained the basic units of association, free to
serve their own and the common interest of all, subject to the restraints imposed
by the Constitution and By-Laws of the Association, and free also to renounce the
affiliation for mutual welfare upon the terms laid down in the agreement which
brought it into existence.
Thus, a local union which has affiliated itself with a federation is free to sever such
affiliation anytime and such disaffiliation cannot be considered disloyalty. In the
absence of specific provisions in the federation’s constitution prohibiting
disaffiliation or the declaration of autonomy of a local union, a local may dissociate
with its parent union. The evidence on hand does not show that there is such a
provision in ULGWP’s constitution.
There is no disloyalty to speak of, neither is there any violation of the federation’s
constitution because there is nothing in the said constitution which specifically
prohibits disaffiliation or declaration of autonomy. Hence, there cannot be any
valid dismissal because Article II, Section 4 of the union security clause in the CBA
limits the dismissal to only three (3) grounds, to wit: failure to maintain
membership in the union (1) for non-payment of union dues, (2) for resignation;
and (3) for violation of the union’s Constitution and By-Laws.

4. Whether there was unfair labor practice on the part of respondent company and
federation officers.

None. As earlier discussed, union security clauses in collective bargaining

agreements, if freely and voluntarily entered into, are valid and binding. Corrolarily,
dismissals pursuant to union security clauses are valid and legal subject only to the
requirement of due process, that is, notice and hearing prior to dismissal. Thus, the
dismissal of an employee by the company pursuant to a labor union’s demand in
accordance with a union security agreement does not constitute unfair labor
practice.

However, the dismissal was invalidated in this case because of respondent

company’s failure to accord petitioners with due process, that is, notice and
hearing prior to their termination. Also, said dismissal was invalidated because the
reason relied upon by respondent Federation was not valid. Nonetheless, the
dismissal still does not constitute unfair labor practice.

Respondent company is hereby ordered to immediately reinstate the petitioners to

their respective positions. Should reinstatement be not feasible, respondent
company shall pay separation pay of one month salary for every year of service.
Since petitioners were terminated without the requisite written notice at least 30
days prior to their termination, the respondent company is hereby ordered to pay
full backwages to petitioner-employees while the Federation is also ordered to pay
full backwages to petitioner-union officers who were dismissed upon its instigation.
Since the dismissal of petitioners was without cause, backwages shall be computed
from the time the herein petitioner employees and union officers were dismissed
until their actual reinstatement. Should reinstatement be not feasible, their
backwages shall be computed from the time petitioners were terminated until the
finality of this decision. Costs against the respondent company.