STANDARD CHARTERED BANK EMPLOYEES UNION vs. CONFESOR G.R. No.

114974 16 June 2004

FACTS:

Petitioner Union is the exclusive bargaining agent of the rank and file employees of Standard Chartered
Bank (Bank). The Union and the Bank signed a 5 year CBA in 1990 with a provision to renegotiate its
terms in its 3rd year. In 1993, the Union initiated negotiations. It submitted its proposal to the Bank as
well as a list containing the members of its negotiating panel. The Bank submitted its counter-proposal
and the respective list of the members of its negotiating panel. Before negotiations can begin, the Union
suggested that the Bank’s lawyers are to be excluded from its negotiating panel. The Bank agreed. The
Bank however, suggested that Jose P. Umali, Jr., the President of NUBE be excluded from the Union’s
negotiating panel. However, Umali remained a member of the Union’s panel. During the preliminary
negotiations, the parties laid down the ground rules. The Bank suggested that the negotiation be kept a
family affair. The negotiations on the revisions on the CBA began on March 12, 1993. The proposed non-
economic provisions were discussed first. The parties were not able to reach at an agreement leaving
some of the provisions as DEFERRED/DEADLOCKED. Afterwards, negotiations on the economic
provisions began on May 18, 1993. Like before, the Union and the Bank could not reach an agreement.
Umali chided the Bank for the insufficiency of its counter-proposal and reminded the Bank how they got
what they wanted in 1987 and that they were willing to resort to such means if needed. The
negotiations resumed but even after the submission of counter-proposals from both parties, the
impasse remained. Exasperated, Umali asserted that it would be easier to bargain if both parties trusted
each other like before. The Bank requested the Union to refrain from involving personalities and to
focus on the negotiations. On June 21, 1993, the Union declared a deadlock and filed a Notice of Strike
with the NCMB. On its part, the Bank filed a complaint for unfair labor practices against the Union with
the Labor Arbiter. The Bank claimed that the Union engaged in blue sky bargaining (unrealistic or
unreasonable demands in negotiations where neither concedes anything or demands the impossible).
The Bank also claimed that the Union violated the no strike-no lockout clause of the CBA. Then Secretary
of Labor Confesor assumed jurisdiction of the dispute and dismissed the ULP charges of both the Bank
and Union. She also ordered the award of certain benefits. On March 22, 1994, the Bank and Union
signed the CBA.

ISSUE: WON SoL Confessor committed grave abuse of discretion when she dismissed the ULP charge
filed by the Union.

HELD: No ULP committed by the Bank or Union. Article 248(a) considers it an ULP if the employer
interferes, restrains or coerces employees in the exercise of their right to self-organization or the right
to form an association. In order to show that the employer committed ULP under the Labor Code,
substantial evidence is required to support the claim. Substantial evidence is such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. The facts show that the suggestion
to exclude Umali Jr., was not an anti-union conduct from which it can be inferred that the Bank adopted
to undermine the free exercise of the right to self-organization and collective bargaining of the
employees especially when it was requested after the Union requested the exclusion of the Bank’s
lawyer from its negotiating panel. Further, the ULP charge was merely an afterthought as the complaint
was only made after a deadlock was declared by the Union. There was no surface bargaining on the part
of the Bank. Surface bargaining is defined as going through the motions of negotiating without any legal
intent to reach an agreement. Such is a question of the intent of the party in question and usually such
intent can be inferred from the totality of the challenged party’s conduct both at and away from the
table. The duty to bargain does not compel either party to agree to a proposal or require the making of a
concession. There was no grave abuse of discretion on the part of the Secretary of Labor. It cannot be
said that she acted in a capricious and whimsical exercise of judgment. There was no showing that the
public respondent exercised her power in an arbitrary and despotic manner by reason of passion or
personal hostility. Likewise, neither is the Union guilty of ULP for engaging in blue sky bargaining. The
demands of the Union were not exaggerated or unreasonably but based on the data of rank and file
employees and other prevailing economic benefits received by employees in the industry. ===== If an
employer interferes in the selection of the union’s negotiators or coerces the union to exclude from its
panel of negotiators are 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. However, in this case, the act of the bank’s Human Resource Manager in
suggesting the exclusion of the federation president from the negotiating panel was not considered ULP.
It is not 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 the manager’s suggestion that the bank lawyers be excluded from
its negotiating panel. The records show that after the initiation of the collective bargaining process, with
the inclusion of the federation president in the union’s negotiating panel, the negotiations pushed
through. If at all, the suggestion should be construed as part of the normal relations and innocent
communications which are all part of the friendly relations between the union and the bank. F: Surface
bargaining v. blue sky-bargaining H: NO ULP in either side -Duty to bargain does not compel either party
to agree to a proposal or to require the making of a concession