SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO. vs.

SAN MIGUEL
CORPORATION, MAGNOLIA CORPORATION (Formerly, Magnolia Plant) and SAN
MIGUEL FOODS, INC. (Formerly, B-Meg Plant)

FACTS: On June 28, 1990, petitioner-union San Miguel Corporation Employees Union —
PTGWO entered into a CBA with private respondent San Miguel Corporation (SMC) to take
effect upon the expiration of the previous CBA or on June 30, 1989.

This CBA provided, among others, that:

ARTICLE XIV

DURATION OF AGREEMENT

Sec. 1. This Agreement which shall be binding upon the parties hereto and their respective
successors-in-interest, shall become effective and shall remain in force and effect until June 30,
1992.

Sec. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this
Agreement insofar as the representation aspect is concerned, shall be for five (5) years from July
1, 1989 to June 30, 1994. Hence, the freedom period for purposes of such representation shall be
sixty (60) days prior to June 30, 1994.

Sec. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all
provisions of this Agreement, except insofar as the representation aspect is concerned. If no
agreement is reached in such negotiations, this Agreement shall nevertheless remain in force up
to the time a subsequent agreement is reached by the parties.

Meanwhile, effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-
off and became two separate and distinct corporations: Magnolia Corporation (Magnolia) and
San Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA remained in force and
effect.

After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA and
Article 253-A of the Labor Code. Negotiations started sometime in July, 1992 with the two
parties submitting their respective proposals and counterproposals.

During the negotiations, the petitioner-union insisted that the bargaining unit of SMC should still
include the employees of the spun-off corporations: Magnolia and SMFI; and that the
renegotiated terms of the CBA shall be effective only for the remaining period of two years or
until June 30, 1994.

SMC, on the other hand, contended that the members/employees who had moved to Magnolia
and SMFI, automatically ceased to be part of the bargaining unit at the SMC. Furthermore, the
CBA should be effective for three years in accordance with Art. 253-A of the Labor Code.

Unable to agree on these issues with respect to the bargaining unit and duration of the CBA,
petitioner-union declared a deadlock on September 29, 1990.

(Notice of strike…Secretary assumed jurisdiction)

Secretary’s decision: the CBA shall be effective for the period of 3 years from June 30, 1992;
and that such CBA shall cover only the employees of SMC and not of Magnolia and SMFI.

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ISSUES: 1) Whether or not the duration of the renegotiated terms of the CBA is to be effective
for three years of for only two years; and 2) Whether or not the bargaining unit of SMC includes
also the employees of the Magnolia and SMFI.

HELD: We agree with the Secretary of Labor.

Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads:

Art. 253-A. Terms of a CBA. — Any CBA that the parties may enter into shall, insofar as the
representation aspect is concerned, be for a term of 5 years. No petition questioning the majority
status of the incumbent bargaining agent shall be entertained and no certification election shall
be conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the CBA. All other provisions of
the CBA shall be renegotiated not later than 3 years after its execution. Any agreement on such
other provisions of the CBA entered into within 6 months from the date of expiry of the term of
such other provisions as fixed in such CBA, shall retroact to the day immediately following such
date. If any such agreement is entered into beyond six months, the parties shall agree on the
duration of retroactivity thereof. In case of a deadlock in the renegotiation of the CBA, the
parties may exercise their rights under this Code. (Emphasis supplied.)

The “representation aspect” refers to the identity and majority status of the union that negotiated
the CBA as the exclusive bargaining representative of the appropriate bargaining unit concerned.
“All other provisions” simply refers to the rest of the CBA, economic as well as non-economic
provisions, except representation.

The law is clear and definite on the duration of the CBA insofar as the representation aspect is
concerned, but is quite ambiguous with the terms of the other provisions of the CBA. It is a
cardinal principle of statutory construction that the Court must ascertain the legislative intent for
the purpose of giving effect to any statute.

(as usual mahabang conversation ng mga framers)

Obviously, the framers of the law wanted to maintain industrial peace and stability by having
both management and labor work harmoniously together without any disturbance. Thus, no
outside union can enter the establishment within 5 years and challenge the status of the
incumbent union as the exclusive bargaining agent. Likewise, the terms and conditions of
employment (economic and non-economic) can not be questioned by the employers or
employees during the period of effectivity of the CBA. The CBA is a contract between the
parties and the parties must respect the terms and conditions of the agreement.  Notably, the
framers of the law did not give a fixed term as to the effectivity of the terms and conditions of
employment. It can be gleaned from their discussions that it was left to the parties to fix the
period.

The issue as to the term of the non-representation provisions of the CBA need not belaboured.
The parties, by mutual agreement, enter into a renegotiated contract with a term of three (3) years
or one which does not coincide with the said 5-year term, and said agreement is ratified by
majority of the members in the bargaining unit, the subject contract is valid and legal and
therefore, binds the contracting parties.

Thus, we do not find any grave abuse of discretion on the part of the Secretary of Labor in ruling
that the effectivity of the renegotiated terms of the CBA shall be for 3 years.

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II. Undeniably, the transformation of the companies was a management prerogative and business
judgment which the courts can not look into unless it is contrary to law, public policy or morals.
Neither can we impute any bad faith on the part of SMC so as to justify the application of the
doctrine of piercing the corporate veil.18 Ever mindful of the employees’ interests, management
has assured the concerned employees that they will be absorbed by the new corporations without
loss of tenure and retaining their present pay and benefits according to the existing
CBAs. 19 They were advised that upon the expiration of the CBAs, new agreements will be
negotiated between the management of the new corporations and the bargaining representatives
of the employees concerned.

Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical
personalities. Thus, they can not belong to a single bargaining unit.

Moreover, in determining an appropriate bargaining unit, the test of grouping is mutuality or

commonality of interests. The employees sought to be represented by the collective bargaining
agent must have substantial mutual interests in terms of employment and working conditions as
evinced by the type of work they performed. 22 Considering the spin-offs, the companies would
consequently have their respective and distinctive concerns in terms of the nature of work,
wages, hours of work and other conditions of employment. Interests of employees in the
different companies perforce differ. The nature of their products and scales of business may
require different skills which must necessarily be commensurated by different compensation
packages. The different companies may have different volumes of work and different working
conditions. For such reason, the employees of the different companies see the need to group
themselves together and organize themselves into distinctive and different groups. It would then
be best to have separate bargaining units for the different companies where the employees can
bargain separately according to their needs and according to their own working conditions.

WHEREFORE, the petition is DISMISSED for lack of merit.

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PHILIPPINE LONG DISTANCE TELEPHONE CO. INC., v. MANGGAGAWA NG
KOMUNIKASYON SA PILIPINAS and the COURT OF APPEALS. G.R. No. 162783

FACTS:
Petitioner Philippine Long Distance Telephone Co., Inc. (PLDT) is a domestic
corporation engaged in the telecommunications business. Private respondent
Manggagawa ng Komunikasyon sa Pilipinas (MKP) is a labor union of rank and file
employees in PLDT.

The members of respondent union learned that a redundancy program would

be implemented by the petitioner. Thereupon it filed a Notice of Strike with the
National Conciliation and Mediation Board (NCMB) on 04 November 2002. The Notice
fundamentally contained the following:

UNFAIR LABOR PRACTICES, to wit:

1.
PLDT’s abolition of the Provisioning Support Division, in violation of the duty to
bargain collectively with MKP in good faith.

2.
PLDT’s unreasonable refusal to honor its commitment before this Honorable
Office that it will provide MKP its comprehensive plan/s with respect to personnel
downsizing/reorganization and closure of exchanges. Such refusal violates its duty to
bargain collectively with MKP in good faith.

3.
PLDT’s continued hiring of “contractual”, “temporary”, “project” and “casual”
employees for regular jobs performed by union members, resulting in the decimation of
the union membership and in the denial of the right to self-organization to the concerned
employees.

4.
PLDT’s gross violation of the legal and CBA provisions on overtime work and
compensation.

5.
PLDT’s gross violation of the CBA provisions on promotions and job grade re-
evaluation or reclassification.

On 11 November 2002, another Notice of Strike was filed by the private respondent,
which contained the following: UNFAIR LABOR PRACTICES, to wit: PLDT’s alleged
restructuring of its GMM Operation Services.

A number of conciliation meetings, conducted by the NCMB, National Capital Region,

were held between the parties. However, these efforts proved futile.

On 23 December 2002, the private respondent staged a strike. On 31 December 2002,

three hundred eighty three (383) union members were terminated from service pursuant
to PLDT’s redundancy program.

On 02 January 2003, the Secretary, Patricia Sto. Tomas, issued an Order[4] in NCMB-
NCR-NS-11-405-02 and NCMB-NCR-NS-11-412-02. Portions of the Order are reproduced
hereunder:

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xxx Accordingly, the strike staged by the Union is hereby enjoined. All striking workers
are hereby directed to return to work within twenty four (24) hours from receipt of this
Order, except those who were terminated due to redundancy. The employer is hereby
enjoined to accept the striking workers under the same terms and conditions prevailing
prior to the strike. The parties are likewise directed to cease and desist from committing
any act that might worsen the situation. xxx

ISSUE:
WHETHER THE SUBJECT ORDERS OF THE SECRETARY OF THE DOLE EXCLUDING
FROM THE RETURN-TO-WORK
ORDER THE WORKERS DISMISSED DUE TO THE REDUNDANCY PROGRAM
OF PETITIONER, ARE VALID OR NOT.

RULING:

. . . Assumption of jurisdiction over a labor dispute, or as in this case the

certification of the same to the NLRC for compulsory arbitration, always
co-exists with an order for workers to return to work immediately and for
employers to readmit all workers under the same terms and conditions
prevailing before the strike or lockout.
Time and again, this Court has held that when an official bypasses the law on the
asserted ground of attaining a laudable objective, the same will not be maintained if the
intendment or purpose of the law would be defeated.[30]

One last piece. Records would show that the strike occurred on 23 December
2002. Article 263(g) directs that the employer must readmit all workers under the
same terms and conditions prevailing before the strike. Since the strike was held on the
aforementioned date, then the condition prevailing before it, which was the condition
present on 22 December 2002, must be maintained.

Undoubtedly, on 22 December 2002, the members of the private respondent who

were dismissed due to alleged redundancy were still employed by the petitioner and
holding their respective positions. This is the status quo that must be maintained.

Valid.

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Jsckbilt Industries, Inc. v. Jackbilt Employees Workers Union-NAFLU-KMU

G.R. Nos. 171618-19, March 13, 2009

Facts:

Due to economic crisis on construction industry, petitioner decided to temporarily stop its
business of producing concrete hollow blocks compelling most of its employees to go on leave
for sixmonths. Respondent protested the temporary shutdown and later on went on strike.

Petitioner filed a petition for injunction with prayer for the issuance of TRO in NLRC which
NLRC issued. Reports of both the implementing officers and Labor Arbiter revealed that
respondentviolated the TRO. Respondent wrote letters to respondent participated in strike to
explain why theyshould not be dismissed for committing illegal acts in the course of a strike.
Failure of respondent tocomply despite the extensions granted, petitioner dismissed the
concerned employees.Hence, respondent filed a complaint for illegal lockout, runaway shop and
damages. In itsdecision, LA dismissed the complaint for lack of merit. However, because the
petition did not declarethe strike illegal before terminating some employees, the company is
found guilty of illegal dismissal.On appeal, the NLRC modified the decision of LA and held that
petitioner should be heldliable for monetary awards granted to respondent. Petitioner appeal
before the CA. The CA dismissedthe petition but modified the NLRC decision and held that the
temporary shutdown was moved byanti-union sentiments. Petitioner was guilty therefore of
unfair labor practice.

Issue:

Whether the filing of a petition with the LA to declare a strike illegal is a condition sine quanon
for the valid termination of employees who commit an illegal act in the course of strike.

Ruling:

The use of unlawful means in the course of a strike renders such strike illegal. Therefore,
pursuant to the principle of conclusiveness of judgment, the March 9, 1998 strike was ipso facto
illegal.The filing of a petition to declare the strike illegal was thus unnecessary.Consequently, we
uphold the legality of the dismissal of respondent. Article 264 of the Labor Code further provides
that an employer may terminate employees found to have committed illegal actsin the course of a
strike. Petitioner clearly had the legal right to terminate respondent.The petitioner is granted

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STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE) vs. The Honorable MA.
NIEVES R. CONFESOR, in her capacity as SECRETARY OF LABOR AND EMPLOYMENT;
and the STANDARD CHARTERED BANK

G.R. No. 114974             June 16, 2004

FACTS: Before the commencement of the negotiation for the new CBA between the bank and
the Union, 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(head of the negotiating team for
the bank) 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.

There was deadlock in the negotiations. Both parties alleged ULP. Bank alleged that 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. Union alleged unfair labor practice when the bank allegedly interfered with the
Union’s choice of negotiator. It argued that, Diokno’s suggestion that the negotiation be limited
as a “family affair” was tantamount to suggesting that Federation President Jose Umali, Jr. be
excluded from the Union’s negotiating panel. It further argued that, damage or injury to the
public interest need not be present in order for unfair labor practice to prosper. The Union also
contended that the Bank merely went through the motions of collective bargaining without the
intent to reach an agreement

ISSUE:

WON there was interference

WON the bank committed “surface bargaining”

HELD:

NONE

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. In the case at bar, the Union
bases its claim of interference on the alleged suggestions of Diokno to exclude Umali from the
Union’s negotiating panel.

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

7
undertaken previous to the commencement of the negotiation and simultaneously with
Divinagracia’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 Umali in the Union’s negotiating panel, the negotiations pushed through. The complaint was
made only on August 16, 1993 after a deadlock was declared by the Union on June 15, 1993.

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. It happened after the parties started to involve personalities. As the public
respondent noted, passions may rise, and as a result, suggestions given under less adversarial
situations may be colored with unintended meanings. Such is what appears to have happened in
this case.

NO. Surface bargaining is defined as “going through the motions of negotiating” without any
legal intent to reach an agreement.”

The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under
Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went through
the motions of bargaining without any intent of reaching an agreement, as evident in the Bank’s
counter-proposals. It explained that of the 34 economic provisions it made, the Bank only made
6 economic counterproposals. Further, as borne by the minutes of the meetings, the Bank, after
indicating the economic provisions it had rejected, accepted, retained or were open for
discussion, refused to make a list of items it agreed to include in the economic package.

The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank had
any intention of violating its duty to bargain with the Union. Records show that after the Union
sent its proposal to the Bank on February 17, 1993, the latter replied with a list of its counter-
proposals on February 24, 1993. Thereafter, meetings were set for the settlement of their
differences. The minutes of the meetings show that both the Bank and the Union exchanged
economic and non-economic proposals and counter-proposals.

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.

NOTE: (on the allegation of the bank’s refusal to give certain information) The Union, did not,
as the Labor Code requires, send a written request for the issuance of a copy of the data about the
Bank’s rank and file employees. Moreover, as alleged by the Union, the fact that the Bank made
use of the aforesaid guestimates, amounts to a validation of the data it had used in its
presentation.

8
ORIENTAL TIN CAN LABOR UNION vs. SECRETARY OF LABOR AND EMPLOYMENT,
ORIENTAL TIN CAN WORKERS UNION — FEDERATION OF FREE WORKERS
[OTCWU-FFW] and ORIENTAL TIN CAN AND METAL SHEET MANUFACTURING.

FACTS: Oriental Tin Can and Metal Sheet Manufacturing Company, Inc. (the company) is
engaged in the manufacture of tin can containers and metal sheets. On March 3, 1994, it entered
into a collective bargaining agreement (CBA) with petitioner Oriental Tin Can Labor Union
(OTCLU) as the existing CBA was due to expire on April 15, 1994. Four days later, 248 of the
company’s rank-and-file employees authorized the Federation of Free Workers (FFW) to file a
petition for certification election. On March 10, 1994, however, this petition was repudiated via a
written waiver by 115 of the signatories who, along with other employees totalling 897, ratified
the CBA on the same date.

On March 18, 1994, armed with Charter Certificate No. IV-MEE-089, respondent Oriental Tin
Can Workers Union — Federation of Free Workers (OTCWU-FFW) filed a petition for
certification election with the National Capital Region office of the Department of Labor and
Employment (DOLE), pursuant to Article 256 of the Labor Code. Purporting to represent the
regular rank-and-file employees of the company, the petition was accompanied by the “authentic
signatures” of 25% of the employees/workers in the bargaining unit.

The above petition for certification elections was opposed by the OTCLU. For its part, the
company filed a comment alleging inter alia that the new CBA was ratified by 897 out of the
1,020 rank-and-file employees within the bargaining unit. The OTCLU then filed a motion to
dismiss and/or position paper reiterating its position that the petition did not comply with the
25% signature requirement and maintaining that the new CBA was a bar to a certification
election.

The certification election was allowed.

ISSUE: WON the company has a personality to challenge the conduct of a certification elections.

HELD: NONE

It is a well-established rule that certification elections are exclusively the concern of employees;
hence, the employer lacks the legal personality to challenge the same. Law and policy demand
that employers take a strict, hands-off stance in certification elections. The bargaining
representative of employees should be chosen free from any extraneous influence of
management. A labor bargaining representative, to be effective, must owe its loyalty to the
employees alone and to no other.

The only instance when an employer may concern itself with employee representation activities
is when it has to file the petition for certification election because there is no existing CBA in the
unit and it was requested to bargain collectively, pursuant to Article 258 of the Labor code. After
filing the petition, the role of the employer ceases and it becomes a mere bystander. The
company’s interference in the certification election below by actively opposing the same is
manifestly uncalled-for and unduly creates a suspicion that it intends to establish a company
union.

The designation or selection of the bargaining representative without, however, going through

the process set out by law for the conduct of a certification election applies only when
representation is not in issue. There is no problem if a union is unanimously chosen by a majority
of the employees as their bargaining representative, but a question of representation arising from
the presence of more than one union in a bargaining unit aspiring to be the employees’

9
representative, can only be resolved by holding a certification election under the supervision of
the proper government authority.

NOTE: It is uncontroverted that the petition for certification election in this case was filed on
March 18, 1994, twenty-eight days before the expiration of the existing CBA on April 15, 1994,
and well within the 60-day period provided for by the Code. The OTCLU, however, is concerned
with the effect of the employees’ ratification of the new CBA on the timely filing of the petition
for certification election. Would such ratification nullify the petition?

The law dictates a negative reply. The filing of a petition for certification election during the 60-
day freedom period gives rise to a representation case that must be resolved even though a new
CBA has been entered into within that period. This is clearly provided for in the aforequoted
Section 4, Rule V, Book V of the Omnibus Rules Implementing the Labor Code. The reason
behind this rule is obvious. A petition for certification election is not necessary where the
employees are one in their choice of a representative in the bargaining process. Moreover, said
provision of the Omnibus Rules manifests the intent of the legislative authority to allow, if not
encourage, the contending unions in a bargaining unit to hold a certification election during the
freedom period. The agreement prematurely signed by the union and the company during the
freedom period does not affect the petition for certification election filed by another union.

As regards the 25% support requirement, the same has been met. As previously held by the SC,
once the required percentage requirement has been reached, the employees’ withdrawal from
union membership (waiver in this case) taking place after the filing of the petition for
certification election will not affect the petition. On the contrary, the presumption arises that the
withdrawal was not free but was procured through duress, coercion or for a valuable
consideration. Hence, the subsequent disaffiliation of the 6 employees from the union will not be
counted against or deducted from the previous number who had signed up for certification

10
UST FACULTY UNION VS. BITONIO

FACTS: Private Responednts are duly elected officers of the UST Faculty Union (USTFU). The
union has a subsisting five-year CBA with UST. The petitioners on the other hand, questioned
before the Med-Arbiter, that the COMELEC was not constituted in accordance with USTFU’s
constitution and by-laws (CBL) and that no rules had been issued to govern the conduct of the 05
October 1996 election. Med-Arbiter issued a TRO enjoining the conduct of elections. However,
a general faculty assembly was held as scheduled. The general assembly was attended by
members of the USTFU and, as admitted by the appellants, also by “non-USTFU members
[who] are members in good standing of the UST Academic Community Collective Bargaining
Unit”. On this occasion, appellants were elected as USTFU’s new set of officers by acclamation
and clapping of hands.

On 03 December 1996, appellants and UST allegedly entered into another CBA covering the
period from 01 June 1996 to 31 May 2001. Said CBA was ratified by a majority of the UST
faculty community.

ISSUE: WON the election of the officers in this case was valid

HELD: NO. The importance of a union’s constitution and bylaws cannot be overemphasized.
They embody a covenant between a union and its members and constitute the fundamental law
governing the members’ rights and obligations. As such, the union’s constitution and bylaws
should be upheld, as long as they are not contrary to law, good morals or public policy.

A union election is held pursuant to the union’s constitution and bylaws, and the right to vote in
it is enjoyed only by union members. A union election should be distinguished from a
certification election, which is the process of determining, through secret ballot, the sole and
exclusive bargaining agent of the employees in the appropriate bargaining unit, for purposes of
collective bargaining.  Specifically, the purpose of a certification election is to ascertain whether
or not a majority of the employees wish to be represented by a labor organization and, in the
affirmative case, by which particular labor organization.

In a certification election, all employees belonging to the appropriate bargaining unit can

vote. Therefore, a union member who likewise belongs to the appropriate bargaining unit is
entitled to vote in said election. However, the reverse is not always true; an employee belonging
to the appropriate bargaining unit but who is not a member of the union cannot vote in the union
election, unless otherwise authorized by the constitution and bylaws of the union. Verily, union
affairs and elections cannot be decided in a non-union activity.

In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot
properly be called a union election, because the procedure laid down in the USTFU’s CBL for
the election of officers was not followed. It could not have been a certification election either,
because representation was not the issue, and the proper procedure for such election was not
followed. The participation of non-union members in the election aggravated its irregularity.

11
P.I. MANUFACTURING, INCORPORATED, Petitioner, vs. P.I. MANUFACTURING
SUPERVISORS AND FOREMAN ASSOCIATION and the NATIONAL LABOR UNION,
Respondents.   G.R. No. 167217, February 04, 2008

FACTS:

Petitioner P.I. Manufacturing, Incorporated is a domestic corporation engaged in the manufacture

and sale of household appliances. Respondent P.I. Manufacturing Supervisors and Foremen
Association (PIMASUFA) is an organization of petitioner’s supervisors and foremen, joined in
this case by its federation, the National Labor Union (NLU).

December 10, 1987, R.A. No. 6640 was passed providing an increase in the statutory minimum
wage and salary rates of employees and workers in the private sector, to which it is increased by
P10.00 per day, except non-agricultural workers and employees outside Metro Manila who shall
receive an increase of P11.00 per day: Provided, That those already receiving above the
minimum wage up to P100.00 shall receive an increase of P10.00 per day. Excepted from the
provisions of this Act are domestic helpers and persons employed in the personal service of
another.

December 18, 1987, petitioner and respondent PIMASUFA entered into a new CBA (1987 CBA)
whereby the supervisors were granted an increase of P625.00 per month and the foremen,
P475.00 per month. The increases were made retroactive to May 12, 1987, or prior to the passage
of R.A. No. 6640, and every year thereafter until July 26, 1989.

January 26, 1989, respondents PIMASUFA and NLU filed a complaint with NLRC charging
petitioner with violation of R.A. No. 6640. Respondents attached to their complaint a numerical
illustration of wage distortion resulting from the implementation of R.A. No. 6640.

LA favored respondents ordering Petitioner to give members of respondent PIMASUFA wage

increases equivalent to 13.5% of their basic pay they were receiving prior to December 14, 1987.
On appeal by petitioner, the NLRC affirmed LA’s judgment. Petitioner filed a petition for
certiorari with SCourt. However, SC referred the petition to CA. CA affirmed the Decision of the
NLRC with modification by raising the 13.5% wage increase to 18.5%. M.R. was denied.
Petitioner went to SC but it favored respondents. Hence this MR.

ISSUES:

Whether the implementation of R.A. No. 6640 resulted in a wage distortion

Whether such distortion was cured or remedied by the 1987 CBA.

RULING:

Yes. R.A. No. 6727, otherwise known as the Wage Rationalization Act, explicitly defines“wage
distortion”as: “a situation where an increase in prescribed wage rates results in the elimination or
severe contraction of intentional quantitative differences in wage or salary rates between and
among employee groups in an establishment as to effectively obliterate the distinctions embodied
in such wage structure based on skills, length of service, or other logical bases of
differentiation.”

Otherwise stated, wage distortion means the disappearance or virtual disappearance of pay

differentials between lower and higher positions in an enterprise because of compliance with a
wage order. The increase in the wage rates by virtue of R.A. No. 6640 resulted in wage distortion

12
or the elimination of the intentional quantitative differences in the wage rates of the supervisor
employees of petitioner.

II. Yes. Wage distortions were cured or remedied when respondent PIMASUFA entered into the
1987 CBA with petitioner after the effectivity of R.A. No. 6640. The 1987 CBA increased the
monthly salaries of the supervisors by P625.00 and the foremen, by P475.00, effective May 12,
1987. These increases re-established and broadened the gap, not only between the supervisors
and the foremen, but also between them and the rank-and-file employees. Significantly, the 1987
CBA wage increases almost doubled that of the P10.00 increase under R.A. No. 6640.

The P625.00/month means P24.03 increase per day for the supervisors, while

the P475.00/month means P18.26 increase per day for the foremen. Such gap as re-established
by virtue of the CBA is more than a substantial compliance with R.A. No. 6640. CA erred in not
taking into account the provisions of the CBA. The provisions of the CBA should be read in
harmony with the wage orders, whose benefits should be given only to those employees covered
thereby.

To require petitioner to pay all the members of respondent PIMASUFA a wage increase
of 18.5%, over and above the negotiated wage increases provided under the 1987 CBA, is highly
unfair and oppressive to the former. It was not the intention of R.A. No. 6640 to grant an across-
the-board increase in pay to all the employees of petitioner. Only those receiving wages P100.00
and below are entitled to the P10.00 wage increase. The apparent intention of the law is only to
upgrade the salaries or wages of the employees specified therein. Almost all of the members of
respondent PIMASUFA have been receiving wage rates above P100.00 and, therefore, not
entitled to the P10.00 increase. Only 3 of them are receiving wage rates below P100.00, thus,
entitled to such increase.

TO compel employers simply to add on legislative increases in salaries or allowances without

regard to what is already being paid, would be to penalize employers who grant their workers
more than the statutory prescribed minimum rates of increases. Clearly, this would be counter-
productive so far as securing the interests of labor is concerned.

It must be stressed that a CBA constitutes the law between the

parties when freely and voluntarily entered into. Iit has not been shown that respondent
PIMASUFA was coerced or forced by petitioner to sign the 1987 CBA. All of its 13 officers
signed the CBA with the assistance of respondent NLU. They signed it fully aware of the
passage of R.A. No. 6640. The duty to bargain requires that the parties deal with each other with
open and fair minds. Respondents cannot invoke the beneficial provisions of the 1987 CBA but
disregard the concessions it voluntary extended to petitioner. The goal of collective bargaining is
the making of agreements that will stabilize business conditions and fix fair standards of working
conditions. Respondents’ posture contravenes this goal.

13
PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH INTERNATIONAL-UNITED
LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (PMTI-ULGWF) vs.
PURA FERRER-CALLEJA, DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND
THE CONFEDERATION OF FILIPINO WORKERS (CFW), PROGRESSIVE EMPLOYEES
UNION (PEU-TIPI)

FACTS:
The petitioner is the recognized collective bargaining agent of the rank-and-file employees of
Triumph International with which the latter has a valid and existing collective bargaining
agreement effective up to September 24, 1989.

On November 25, 1987, a petition for certification election was filed by the respondent union
with the Department of Labor and Employment.

On January 30, 1988, a motion to dismiss the petition for certification election was filed by
Triumph International on the grounds that the respondent union cannot lawfully represent
managerial employees and that the petition cannot prosper by virtue of the contract-bar rule. On
the same grounds, the petitioner, as intervenor, filed its opposition to the petition oil February 18,
1988.

On April 13, 1988, the Labor Arbiter issued an order granting the petition for certification
election and directing the holding of a certification election to determine the sole and exclusive
bargaining representative of all monthly-paid administrative, technical, confidential and
supervisory employees of Triumph International.

On appeal, the public respondent on August 24, 1988 affirmed the Labor Arbiter’s order.

On September 5, 1988, Triumph International filed a motion for reconsideration which was
denied by the public respondent in a resolution dated October 28, 1988.

HELD:
There is no evidence in the records which sufficiently distinguishes and clearly separates the
group of employees sought to be represented by the private respondents into managerial and
supervisory on one hand or supervisory and rank-and-file on the other. The respondents’
pleadings do not show the distinctions in functions and responsibilities which differentiate the
managers from the supervisors and sets apart the rank-and-file from either the managerial or
supervisory groups. As a matter of fact, the formation of a supervisor’s union was never before
the Labor Arbiter and the Bureau of Labor Relations and neither is the issue before us. We,
therefore, abide by the public respondent’s factual findings in the absence of a showing of grave
abuse of discretion.

In the case at bar, there is no dispute that the petitioner is the exclusive bargaining representative
of the rank-and-file employees of Triumph International. A careful examination of the records of
this case reveals no evidence that rules out the commonality of interests among the rank-and-file
members of the petitioner and the herein declared rank-and-file employees who are members of
the respondent union. Instead of forming another bargaining unit, the law requires them to be
members of the existing one. The ends of unionism are better served if all the rank-and-file
employees with substantially the same interests and who invoke their right to self-organization
are part of a single unit so that they can deal with their employer with just one and yet potent
voice. The employees’ bargaining power with management is strengthened thereby. Hence, the
circumstances of this case impel us to disallow the holding of a certification election among the
workers sought to be represented by the respondent union for want of proof that the right of said
workers to self-organization is being suppressed.
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Once again we enunciate that the proliferation of unions in an employer unit is discouraged as a
matter of policy unless compelling reasons exist which deny a certain and distinct class of
employees the right to self-organization for purposes of collective bargaining.

San Miguel Corporation vs. National Labor Relations Commissions, et al; GR No. 99266; March
2,1999;

15
FACTS:

San Miguel Corporation, alleging the need to streamline its operations due to financial losses,
shut down some of its plants and declared fifty-five positions as redundant. Consequently, San
Miguel Corporation Employees Union (SMCEU) filed several grievance cases for said
retrenched employees, praying for the redeployment of the said employees to the other divisions
of the company. The grievance proceedings were conducted pursuant to the parties' Collective
Bargaining Agreement. During the grievance proceedings, most of the employees were
redeployed, while others accepted early retirement. As a result, only seventeen employees
remained when the parties proceeded to the third level (Step 3) of the grievance procedure. SMC
informed SMCEU that if the remaining seventeen employees could not be redeployed, their
services would be terminated. The said meeting adjourned in a deadlock. SMCEU filed with the
National Conciliation and Mediation Board (NCMB) of the Department of Labor and
Employment (DOLE) a notice of strike on the grounds of collective bargaining deadlock and
gross violation of the Collective Bargaining Agreement. SMC, on the other hand, filed a
complaint with the NLRC for the dismissal of the notice of strike and to compel SMCEU to
submit to grievance and arbitration. NLRC, however, dismissed the complaint for lack of merit.
Hence, this petition.

ISSUE: Whether or not the notice of strike should be dismissed.

HELD: 

The Supreme Court ruled in the affirmative. The grounds relied upon by SMCEU are non-
strikeable. The issues which may lend substance to the notice of strike filed by SMCEU are:
collective bargaining deadlock and SMC's alleged violation of the CBA. These grounds,
however, appear more illusory than real. Collective Bargaining Deadlock is defined as the
situation between the labor and the management of the company where there is failure in the
collective bargaining negotiations resulting in a stalemate. This situation is non-existent in the
case at bar since there is a Board assigned on the grievance machinery to resolve the conflicting
views of the parties. Instead of asking the Conciliation Board composed of five representatives
each from the company and the union to decide the conflict, SMCEU declared a deadlock, and
thereafter, filed a notice of strike. For failing to exhaust all the steps in the grievance machinery
and arbitration proceedings provided in the CBA, the notice of strike should have been dismissed
by the NLRC and ordered SMCEU to proceed with the grievance and arbitration proceedings. 

PEA-ALU vs. Secretary Quisumbing; G.R. No. 128192; April 14, 1999; Third Division---
Purisima, J.

FACTS:

16
The respondent corporation, Philippine Associated Smelting and Refining Corporation
(PASAR), and the petitioner, PASAR Employees Association-ALU (PEA-ALU), inked a
collective bargaining agreement on November 21, 1990. Before the expiration of their five year
agreement, private respondent, National Federation of Labor Unions (NAFLU), filed a petition
for certification election which was granted by the Department of Labor and Employment. PEA-
ALU, however, filed a motion to dismiss the petition on the ground that NAFLU failed to
acquire for and in behalf of its local chapter affiliate, Concerned Organization of PASAR
Progressive Employees for Reform (COPPER), a legal personality as a legitimate labor
organization. It appeared that COPPER did not have a legal personality at the time when the
petition for certification election was filed on November 17, 1995. COPPER was issued by
DOLE a Certificate of Registration as an independent registered labor organization only on
December 7, 1995. The motion to dismiss was granted but the same was set aside by respondent
Secretary of Labor.

ISSUE: Whether or not COPPER has a legal personality at the time of filing of NAFLU's
petition for certification election.

HELD: 

The Supreme Court ruled in the affirmative. When COPPER submitted on December 1, 1995 to
DOLE all the documents required for the registration of a legitimate labor organization, and the
registration was found meritorious on December 7, 1995 with the issuance of its Certificate of
Registration, it thereby attained the status of a legitimate labor organization, as of November 17,
1995, when the petition for certification election was filed by NAFLU. By fiction of law,
COPPER was already a duly registered labor organization when the petition for certification
election was filed. The fact that petitioner federation's local union attains the status of a
legitimate labor organization only after the 60 days freedom period cannot be used as a basis for
the dismissal of the petition. The date of the submission by the petitioner of the required
documents to the appropriate office retroacts to the date of the filing of the petition and it cured
whatever defects the petition was initially tainted with.

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