378-503 Israel

378
CHAPTER FIVE
LABOR RELATIONS
TOPICS PER SYLLABUS
V.
LABOR RELATIONS
A. Right to self-organization
1. Coverage
2. Ineligibility of managerial employees; right of supervisory employees
3. Effect of inclusion as employees outside of the bargaining unit
4. Non-abridgement
B. Bargaining unit
C. Bargaining representative
D. Rights of labor organizations

1. Check off, assessments, and agency fees
2. Collective bargaining
E. Unfair Labor Practices

1. Nature, aspects
2. By employers
3. By labor organizations
F. Peaceful concerted activities

1. Strikes
2. Picketing
3. Lockouts
4. Assumption of jurisdiction by the DOLE Secretary
5. Injunctions
379
CHAPTER FIVE
LABOR RELATIONS
A.
RIGHT TO SELF-ORGANIZATION
1.
COVERAGE
a.
PERSONS WHO CAN EXERCISE
1. PRIVATE SECTOR.
The following are eligible to join, form or assist a labor organization in the private sector:
1) All persons employed in commercial, industrial and agricultural enterprises;
2) Employees of government-owned and/or controlled corporations without original
charters established under the Corporation Code;2
3) Employees of religious, charitable, medical or educational institutions, whether
operating for profit or not;3
4) Front-line managers, commonly known as supervisory employees [See discussion
below];4
5) Alien employees [See discussion below];
6) Working children [See discussion below];
7) Homeworkers [See discussion below];
8) Employees of cooperatives [See discussion below]; and
9) Employees of legitimate contractors - not with the principals but with the contractors
[See discussion below].
2. PUBLIC SECTOR.
In the public sector, all rank-and-file employees of all branches, subdivisions,
instrumentalities, and agencies of government, including government-owned and/or controlled
corporations with original charters, can form, join or
1
Article 253 [243], Labor Code.
2
Article 254 1244], Labor Code.
3
Article 253 [243], Labor Code; Solon 2. Rule Ii, Book V, Rules to Implement the Labor Code, as
amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003] and further amended by
Department Order No. 40-C-05, Series of 2005 [March 7,2005; See also Article 243, Labor Code.
4
Article 255 1245], Labor Code; Paper Industries Corporation of the Philippines v. Laguesma, G.R. No.
101738, April 12, 20001 United Pepsi-Cola Supervisory Union [UPSU] v. Laguesma, OR. No.
122226, Marc:1125, 1998, 288 SCRA 15,21-23.
380 BAR REVIEWER ON LABOR LAW
assist labor organizations called "employees' organizations" of their own choosing.'
3. RIGHT OF CERTAIN SPECIFIC WORKERS.
a. Supervisors (a.k.a. first-line managers).
There is no prohibition in the law or in the implementing rules regarding the right
of supervisory employees to organize a labor organization or workers' association of their
own. They are, however, not allowed to become members of a labor union composed of
rank-and-file employees. This is clear under Article 255 [245] of the Labor Code.2 In case
there is mixed membership of supervisors and rank-and-file employees in one union, the new
rule enunciated in Article 256 [245A]3 of the Labor Code, unlike in the old law, is that it
cannot be invoked as a ground for the cancellation of the registration of the union. The
employees so improperly included are automatically deemed removed from the list of
members of said union. In other words, their removal from the said list is by operation of
law.
b. Alien employees.
For an alien employee to exercise his right to self-organize, the following requisites
should be complied with:
1) He should have a valid working permit issued by the DOLE; and
2) He is a national of a country which grants the same or similar rights to Filipino
workers or which has ratified either ILO Convention No. 874 or ILO Convention
No. 98,5 as certified by the Philippine Department of Foreign Affairs (DFA).
c. Working children.
Working children have the same freedom as adults to join the collective bargaining union
of their own choosing in accordance with existing law. Under P.D. No. 603,6 it is clearly
provided that neither management nor any collective
1
Sections 1 and 2, Executive Order No. 180, June 01,1987; Sections 1 and 2, Rule II, Rules and
Regulations to Govern the Exercise of the Right of Government Employees to Self-Organization.
2
Ibid.
3
A new provision inserted into the Labor Code by Section 9 of Republic Act No. 9481 (effective on
June 14,2007).
4
Under Article 2 of ILO Convention No. 87 [Freedom of Association and Protection of the Right to
Organize] of which the Philippines is a signatory. 'workers and employers, without distinction
whatsoever, shall have the right to establish and subject only to the rules of the organization
concerned, job organizations of their own choosing without previous authorization.'
5
Article 2 of ILO Convention No. 98 which dwells on the Right to Organize and Collective Bargaining.
6
Otherwise known as The Child and Youth Welfare Code."
381
CHAPTER FIVE
LABOR RELATIONS
bargaining union shall threaten or coerce working children to join, continue or withdraw as
members of such union.1
d. Homeworkers.
Homeworkers have the right to form, join or assist organizations of their own
choosing in accordance with law.2 The registration of homeworkers' organizations or
associations following the requirements prescribed by law will vest legal personality thereto.3
e. Members or employees of cooperatives.

Members of a cooperative have no right to form or join labor organizations for
purposes of collective bargaining for being themselves co-owners of the cooperative. This
prohibition covers employees of the cooperative who are at the same time members thereol4
However, insofar as the cooperative's employees who are not members or co-owners thereof
are concerned, they are entitled to exercise their right to self-organization and collective
bargaining as guaranteed in the Constitution and existing laws. It is the fact of ownership of
the cooperative and not involvement in the management thereof which disqualifies a member
from joining any labor organization within the cooperative. But employee-members of a
cooperative may withdraw as members of the cooperative for purposes of joining a labor
union.3
f. Employees of legitimate contractors.

An employee of a legitimate job contractor is entitled to all the rights and
privileges due a regular employee as provided in the Labor Code, such as the right to self-
organization, collective bargaining and peaceful concerted activities, including the right to
strike.6 But this right cannot be exercised and invoked against the principal but only against
the independent contractor which employed them.
g. Workers allowed to organize labor organizations only for mutual aid and
protection and not for collective bargaining purposes.
As a general rule, labor organizations are established principally for the purpose
of allowing the employees to engage in collective bargaining with their employers. However,
workers who have no employers with whom they can collectively bargain are allowed to
organize labor organizations or workers' associations for their mutual aid and protection.
These workers include ambulant,
1
Article 111, Chapter 3, Title VI, P.D. No. 603, as amended by Presidential Decree No. 1179 which took
effect on Aug. 15, 1977.
2
Section 3, Department Order No.5, Feb. 04, 1992.
3
Section 4, Ibid.
4
Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, G.R. No. 77951, Sept 26, 1988; San
Jose Electric Service
Cooperative, Inc. v. Ministry of Labor, G.R. No. 77231, May 31, 1989.
5
Central Negros Electric Corporation v. Secretary of Labor, G.R. No. 94045, Sept 13,1991.
6
Section 10(e), Department Order No. 174, Series of 2917.
intermittent and other workers, the se /f-employed, rural workers and those without any definite
employers.1
4. SOME PRINCIPLES ON THE RIGHT TO SELF-ORGANIZATION.
• Any employee, whether employed for a definite period or not, shall, beginning on the
first day of his service, be eligible for membership in any labor organization. 2
• Right to join a union cannot be made subject of a stipulation in an employment
contract or CBA.3
5. SOME PRINCIPLES ON GOVERNMENT EMPLOYEES' RIGHT TO SELF-

ORGANIZATION.
• The labor organization in the government sector is technically called an "employees'
organization."4
• Registration of employees' organizations is made with both Civil Service Commission
(CSC) and the Bureau of Labor Relations (BLR) of the Department of Labor and
Employment (DOLE). Once registered, it is technically called a "registered employees'
organization."5 In the private sector, this is theoretically known as a "legitimate labor
organization." Cancellation of registration of an employees' organization is likewise made
by both the CSC and the BLR.
• The sole and exclusive bargaining union is called an "accredited employees'
organization."6 In the private sector, this is in principle known as a "sole and exclusive
bargaining agent (SEBA)."
• The unit where the government employees' organization seeks to operate and represent is
called "organizational unit." It is the employer's unit consisting of rank-and-file
employees unless circumstances otherwise require.7 In the private sector, this is
technically known as "bargaining unit."
• The right to strike is absolutely prohibited in the government sector.8
1
Article 243, Labor Code; FEU-Dr. Nicanor Reyes Medical Foundation, Inc. v. Trajano, OR. No. 76273,
July 311987.
2
Article 292(c) [277(c)1, Labor Code; No. 10, Basic Amendments under R. A. 6715, prepared by
Members of the Senate-House Conference Committee of Congress.
3
Southern Philippines Federation of Labor (SPFL) v. Call*, OR. No. 80882, April 24, 1989, 172 SCRA
676.
4
Section 1 [hi, Rule I, Rules and Regulations to Govern the Exercise of the Right of Government
Employees to Seth Organization.
5
Section 1 51. Rik I, Ibid.
5
Section 1 al, Rik I, Ibid.
7
Section 9, Executive Order No. 180
8
CSC Memorandum Circular No. 6. s. 1987. [April 21, 19871 promulgated by the Civil Service
Commission categorically prohibits all government officials and employees from staging strikes,
demonstrations, mass leaves, walk-outs and other fours of mass action which will result in the
temporary stoppage or disruption of public services. Allowing them to strike or conduct the said
profited acts is to undermine or prejudice the government system. Executive Order No. 180, [June 1.
19871, which provides the guidelines on the exercise of the right of government workers to organize,
implicitly endorsed said CSC Memorandum Circular No. 6, s. 1987, dated April 21, 1987 [supra] by
stating that the Civil Service Law and rules
383
CHAPTER FIVE
LABOR RELATIONS
b.
PERSONS WHO CANNOT EXERCISE
1. PRIVATE SECTOR.
The following are not eligible to join, form or assist a labor organization in the private sector:
1) Managerial employees; and
2) Confidential employees.
2. PUBLIC SECTOR.
The following are not eligible to join, form or assist a labor organization in the public sector:
1) High-level employees whose functions are normally considered as policy-making or
managerial or whose duties are of a highly confidential nature;'
2) Members of the Armed Forces of the Philippines;
3) Police officers;
4) Policemen;
5) Firemen; and
6) jail guards.2
2.
INELIGIBILITY OF MANAGERIAL EMPLOYEES;
RIGHT OF SUPERVISORY EMPLOYEES
a.
MANAGERIAL EMPLOYEE RULE
1. LEGAL BASIS.
Article 255 [2451 of the Labor Code provides:
"Article 255 1.2451. Ineligibility of Managerial Employees to Join rug Labor

Organization; Right of Supervisory Employees. - Managerial employees are not eligible
to join, assist or form any labor organization. Supervisory employees shall not be
eligible for membership in the collective bargaining unit of the rank-and-file employees
but may join, assist or form separate collective bargaining units and/or legitimate
governing concerted activities aid strikes in the government service shall be observed. (Jacinto
v. Hon. CA, G.R. No, 124540. Nov. 14.1997).
1
Section 3, Executive Order No. 180, June 01, 1987; Section 2, Rule II, Rules and Regulations
to Govern the Executive of the Right of Government Employees to Self-Organization.
2
Section 4, Executive Order No. 180; Section 1, Rule II, Ibid.; See also Chapter 6, Book V.
Administrative Code of 1987 'Executive Order No. 2921.
labor organizations of their own. The rank-and-file union and the supervisors' union
operating within the same establishment may join the same federation or national union."1
2. TYPES OF MANAGERIAL EMPLOYEES.

There are three (3) types of managerial employees for purposes of determining whether they
could exercise their right to self-organization:
1) Top Management;
2) Middle Management; or
3) First-Line Management (technically known as "supervisors').2
Top Management is composed of a comparatively small group of executives. It is

responsible for the overall management of the organization. It establishes operating policies and
guides the organization's interactions with its environment. Typical titles of top managers are
"chief executive officer," "president," or "senior vice-president" Actual titles vary from one
organization to another and are not always a reliable guide to membership in the highest
management classification.
Middle Management refers to more than one level in an organization. Middle managers
direct the activities of other managers and sometimes also those of operating employees. The
middle managers' principal responsibilities are to direct the activities that implement their
organization's policies and to balance the demands of their superiors with the capacities of their
subordinates. A plant manager in an electronic firm is an example of a middle manager.
First-Line Management is the lowest level in an organization at which individuals are

responsible for the work of others. First-line managers direct operating employees only; they do
not supervise other managers. Examples of first-line managers are the "foreman" or production
supervisor in a manufacturing plant, the technical supervisor in a research department, and the
clerical supervisor in a large office. First-level managers are often called supervisors.
3. NOT ALL MANAGERIAL EMPLOYEES ARE PROHIBITED FROM FORMING,

JOINING OR ASSISTING A UNION.
Based on the above classification, "managerial employees" may fall into two (2) distinct
categories: namely:
1) The "managers" per se composed of top and middle managers; and

2) The "supervisors" composed of rust-line managers.
1
As amended by Section 18. RA. No. 6715, March 21,1989 and Section 8. RA No. 9481 which lapsed
into law on May 25. 2007 and became effective on June 14,2007; As renumbered pursuant to
Section 5 R.A. No. 10151, June 21, 2011 and DOLE Department Advisory No. 01, Series of 2015
(Renumbering of the Labor Code of the Philippines, as Amended). issued on July 21, 2015
2
Paper Industries Corporation of the Philippines v. Laguesma, G.R. No. 101738, April 12, 2000: United
Pepsi-Cola Supervisory Union [UPSU] v. Laguesma, G.R. No. 122226, March 25, 1998, 288 SCRA
15,21-23.
385
CHAPTER FIVE
LABOR RELATIONS
No. 1 above are absolutely prohibited from forming, joining or assisting any labor unions
for purposes of collective bargaining.' Only No. 2 above are so allowed to form a labor union of
their own kind.2
b.
SUPERVISORY EMPLOYEE RULE
1. SUPERVISORS MAY ORGANIZE OWN UNION BUT ARE PROHIBITED FROM

JOINING THE RANK-AND-FILE UNION.
The reason for the segregation of supervisory and rank-and-file employees with respect to
the exercise of their right to self-organization is the difference in their interests. Supervisory
employees are more closely identified with the employer than with the rank-and-file employees.
If supervisory and rank-and-file employees in a company are allowed to form a single union, the
conflicting interests of these groups impair their relationship and adversely affect discipline,
collective bargaining and strikes. These consequences can obtain not only in cases where
supervisory and rank-and-file employees in the same company belong to a single union but also
where unions formed independently by supervisory and rank-and—file employees of a company
are allowed to affiliate with the same national federation.3
C.
CONFIDENTIAL EMPLOYEE RULE
1. WHO ARE CONFIDENTIAL EMPLOYEES?

Within the context of labor relations, "confidential employees" are those who meet the
following criteria:
1) They assist or act in a confidential capacity;
2) To persons or officers who formulate, determine, and effectuate management policies
specifically in the field of labor relations.
The two (2) criteria are cumulative and both must be met if an employee is to be considered a
"confidential employee" that would deprive him of his right to form, join or assist a labor
organization.4
1
This is dear under Article 245 of the Labor Code; Paper Industries Corporation of the Philippines v.
Laguesma, G.R No. 101738. April 12,2000; United Pepsi-Cola Supervisory Union [UPSU] v.
Laguesma. G.R. No. 122226, March 25, 1998. 288 SCRA 15, 21-23.
2
Paper industries Corporation of the Philippines v. Laguesma, supra; United Pepsi-Cola Supervisory
Union [UPSUJ v. Laguesma, supra.
3
La Salle University Medical Center aid College of Medicine v. Laguesma, G.R. No. 102084, Aug. 12,
1998, 294 SCRA 141.
4
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R. No. 162025, Aug.
3, 2010; Sugbuanon Rural Bank, Inc. v. Laguesma, G.R. No. 116194, Feb. 2, 2000.
A confidential employee may be a rank-and-file or supervisory employee but because in

the normal course of his duties, he becomes aware of management policies relating to labor
relations, he is not allowed to assist, form or join a rank-and-file union or supervisory union, as
the case may be. His exclusion from the bargaining unit is justified under the "confidential
employee rule. "To allow him to join a union would give rise to a potential conflict of interest.
Management should not be required to handle labor relations matters through employees who are
represented by the union with which the company is required to deal and who, in the normal
performance of their duties, may obtain advance information on the company's position with
regard to collective bargaining negotiations, the disposition of grievances, or other labor relations
matters.1
However, the mere access of an employee to confidential labor relations information

which is merely incidental to his duties and, therefore, knowledge thereof is not necessary in the
performance of said duties, does not make such employee a confidential employee. If access to
confidential labor relations information is to be a factor in the determination of an employee's
confidential status, such information must relate to the employer's labor relations policies.
Therefore, access to information which is regarded by the employer to be confidential from the
business standpoint, such as financial information or technical trade secrets, will not render an
employee a confidential employee under this rule. An employee may not be excluded from an
appropriate bargaining unit merely because he has access to confidential information concerning
the employer's internal business operations which is not related to the field of labor relations.2
Thus, even a bank cashier who also serves as the secretary of the board of directors may
not be classified as a confidential employee disqualified to join a union. True, the board of
directors is responsible for corporate policies, the exercise of corporate powers and the general
management of the business and affairs of the corporation. As secretary of the bank's governing
body, the employee serves the bank's management, but could not be deemed to have access to
confidential information specifically relating to the bank's labor relations policies absent a clear
showing on this matter.3
2. DOCTRINE OF NECESSARY IMPLICATION.

The doctrine of necessary implication is the legal basis for the ineligibility of a
confidential employee to join a union. The disqualification of managerial and confidential
employees from joining a bargaining unit of rank-and-file employees or supervisory employees
is already well-entrenched in jurisprudence. While Article 255 [245] of the Labor Code limits the
ineligibility to
1
San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, OR. No. 110399, Aug.
15, 1997.
2
See San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma, supra;
National Association of Trade Unions - Republic Planters Bank Supervisors Chapter v. Torres, OR.
No. 93468, Dec. 29, 1994, 239 SCRA 546,560
3
Sugbuanon Rural Bank. Inc v. Laguesrna, G.R. No. 116194, Feb. 2,2000.
387
CHAPTER FIVE
LABOR RELATIONS
join, assist or form a labor organization to managerial employees, jurisprudence has extended
this prohibition to confidential employees or those who, by reason of their positions or nature of
work, are required to assist or act in a fiduciary manner to managerial employees and, therefore,
are likewise privy to sensitive and highly confidential records.1
Article 255 [245] of the Labor Code does not directly prohibit confidential employees
from engaging in union activities. Their disqualification proceeds merely from the application of
the "doctrine of necessary implication" because what Article 255 [245] singles out as ineligible
to join, assist or form any labor organization are managerial employees. By necessary
implication, confidential employees are similarly disqualified. This doctrine states that what is
implied in a statute is as much a part thereof as that which is expressed.2
Simply stated, in the collective bargaining process, managerial employees are supposed
to be on the side of the employer to act as its representatives and to see to it that its interests are
well protected. The employer is not assured of such protection if managerial employees
themselves are union members. Collective bargaining in such a situation can become one-sided.
It is the same reason why the positions of confidential employees are included in the
disqualification found in Article 255 [245] as if such disqualification was written in the
provision. If confidential employees could unionize in order to bargain for advantages for
themselves, then they could be governed by their own motives rather than the interest of the
employer. Moreover, unionization of confidential employees for the purpose of collective
bargaining would mean the extension of the law to persons or individuals who are supposed to
act "in the interest of" the employers. It is not far-fetched that in the course of the collective
bargaining negotiations, they might jeopardize that interest which they are duty-bound to protect.
3. CONFIDENTIAL EMPLOYEES NOT ALLOWED TO JOIN UNIONS.
Based on jurisprudence, the following are considered confidential employees under the
confidential employee rule:
1. Accounting personnel and radio and telegraph operators;3

2. Division secretaries, all Staff of General Management, Personnel and Industrial Relations
Department, Secretaries of Audit, EDP and Financial Systems;4
3. Legal secretaries who are tasked with, among others, the typing of legal documents,
memoranda and correspondence, the keeping of
1
Standard Chartered Bank Employees Union [SCBELI-NUBE) v. Standard Chartered Bank, G.R. No. 1
61933, April 22,2008
2
Chua v. Civil Service Commission, G.R No. 88979, Feb. 7, 1992, 206 SGRA 65.
3
Golden Fans, Inc. v. Ferrer-Calleja, G.R. No. 78755, July 19,1989, 175 SCRA 471.
4
Philips Industrial Development, Inc. v. NLRC_ G.R. No. 88957, June 25, 1992, 210 SC,RA
388 BAR REVIEWER ON IABOR LAW
records and files, the giving of and receiving notices, and such other duties as
required by the legal personnel of the corporation.'
4. Executive secretaries of the General Manager and the executive secretaries of the Quality
Assurance Manager, Product Development Manager, Finance Director, Management
System Manager, Human Resources Manager, Marketing Director, Engineering Manager,
Materials Manager and Production Manager were also considered confidential employees
since they have access to "vital labor information."2
5. CONFIDENTIAL EMPLOYEES ALLOWED TO JOIN UNIONS.

Confidential employees are not absolutely prohibited from joining unions. This is the correct
view since confidential employees are allowed to join unions in some cases. For instance, in
Southern Philippines,3 the inclusion of the confidential rank-and-file employees in the bargaining
unit of rank-and-file employees was upheld by the Supreme Court. Much earlier, the High Court
proclaimed in Filoill that confidential rank-and-file employees may join the union of supervisors,
especially in a situation where the confidential employees are very few in number and are, by
practice and tradition, identified with the supervisors in their role as representatives of
management vis-a-vis the rank-and-file employees. Such identity of interest has allowed their
inclusion in the bargaining unit of supervisors for purposes of collective bargaining. They remain
employees in relation to the company as their employer. This identity of interest logically calls
for their inclusion in the same bargaining unit and at the same time fulfills the law's objective of
insuring to them the full benefit of their right to self-organization and to collective bargaining
which could hardly be accomplished if the respondent association's membership were to be
broken up into five separate ineffective tiny units. Jurisprudence, therefore, has established that
there is no legal prohibition against confidential employees who are not performing managerial
functions to form and join a union.5
d.
SEPARATION OF UNIONS DOCTRINE
1. INAPPLICABILITY OF THE DOCTRINE

R.A. No. 94816 amended Article 255 [245] by adding the phrase: "The rank-and-file union
and the supervisors' union operating within the same
1
Pier 8 Arraste & Stevedoring Services. Inc. v. Roidan-Confesor, [G.R. No. 110854, Feb. 13, 1995,
241 SCRA 294.
2
Metrolab Industries. Inc. v. Roklan-Confesor, G.R. No. 108855, Feb. 28, 1996, 254 SCRA 182; 324
Phil. 416.
3
Southern Philippines Federation of Labor v. Ferrer-Calleja, G.R. No. 80882, April 24,1989, 172 SCRA
676.
4
Filoil Refinery Corp. v. Filoil Supervisory and Confidential Employees Association, G.R. No. L-26736,
Aug. 18,1972.
5
San Miguel Corp. Supervisors and Exempt Employees Union v. Laguema, G.R. No. 110399, Aug.
15,1997,; National Association of Trade Unions - Republic Planters Bank Supervisors Chapter v.
Torres, G.R. No. 93468, Dec. 29, 1994.
6
Section 8 of R.A. No. 9481 'effective June 14, 2007].
389
CHAPTER FIVE
LABOR RELATIONS
establishment may join the same federation or national union." By reason of this
amendment, the so-called `preparation of union, doctrine" enunciated in Atlas Lithographic,' and
in other related cases no longer applies. This doctrine prohibits the situation where the
supervisory union and the rank-and-file union operating within the same establishment are both
affiliated with one and the same federation because of the possible conflict of interest which may
arise in the areas, inter aka, of discipline, collective bargaining and strike. Thus, if the intent of
the law is to avoid a situation where supervisors would merge with the rank-and-file or where the
supervisors' labor organization would represent conflicting interests, then a local supervisors'
union should not be allowed to affiliate with the federation with which the rank-and-file union is
also affiliated and where the federation actively participates in the union activities in the
company. The intent of the law is clear especially where the supervisors will be co-mingling with
the rank-and-file employees whom they directly supervise in their own bargaining unit.2
Likewise affected by the amendatory provision of R.A. No. 9481 is the ruling in Coastal
Subic Btry,3 where the Supreme Court declared that both the supervisory union and rank-and-file
union which have separately affiliated with different federations with commingling or common
set of officers have not attained the status of legitimate labor organizations. Here, private
respondents CSBTI-RFU,4 a rank-and-file union, and CSBTI-SU,6 a supervisory union, filed
separate petitions for certification election before the Med-Arbiter. Both private respondents
insist that they are legitimate labor organizations because, on the part of the rank-and-file union,
it was issued a charter certificate by the ALU,6 and on the part of the supervisory union, it was
issued a charter certificate by the APSOLE.U.7 However, this arrangement, according to the
Supreme Court, gives occasion for possible conflicts of interest among the common officers of
the two federations. For as long as they are affiliated with the APSOTEU and ALU, the
supervisory and rank-and-file unions both do not meet the criteria to attain the status of
legitimate labor organizations, and thus could not separately file their respective petitions for
certification election.
As earlier pointed out, however, in the light of the amendment of Article 255 [245] by
R.A. No. 9481, the above ruling in Coastal Subic BD/ no longer applies as the law itself now
explicitly allows the more extreme situation of a rank-and-file union and a supervisors' union
operating within the same establishment joining one and the same federation or national union as
affiliates thereof.
1
Alias Lithographic Services, Inc. Laguesrna, G.R No. 96566, J. 6,1992.
2
See Pepsi-Cola Products Philippines, Inc. v. Hon. Secretary of Labor, G.R No. 96663, Aug. 10, 1999;
La Salle University Medical Center and College of Medicine v. Laguesma, OR. No. 102084, Aug. 12,
1998.
3
Coastal Subic Bay Terminal, Inc. v. DOLE-Office of the Secretary, G.R. No. 157117, Nov. 20.2006.
4
Coastal Subic Bay Terminal. Inc. Rank-and-File Union (CSBTI-RFU).
5
Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU).
6
Associated Labor Union (ALU).
7
Associated Professional, Supervisory. Office and Technical Employees Union (APSOTEU).
EFFECT OF INCLUSION AS MEMBERS OF EMPLOYEES

OUTSIDE OF THE BARGAINING UNIT
1. LEGAL BASIS.
The following provision in the Labor Code' addresses the issue of commingling or mixture of
membership in one union, thus:
Article 256 [245-A]. Effect of Inclusion as Members of Employees

Outside the Bargaining Unit. - The inclusion as union members of employees
outside the bargaining unit shall not be a ground for the cancellation of the
registration of the union. Said employees are automatically deemed removed from
the list of membership of said union.2
2. PREVAILING RULE.
Previously, it was the doctrine enunciated in Toyota3 that a labor organization composed of
both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any
guise or purpose, be a legitimate labor organization. Not being one, an organization which
carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of
a legitimate labor organization, including the right to file a petition for certification election for
the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of
an order allowing a certification election, to inquire into the composition of any labor
organization whenever its status is challenged on the basis of Article 255 [245] of the Labor
Code.4 In the same vein, it was held in Dania, that for as long as the supervisors' union counts
rank-and-file employees among its members, it has no legal right to file a petition for
certification election to represent a bargaining unit composed of supervisors.
The above doctrinal rulings in Tuyota6 and Dunlop7 no longer hold sway in the present
altered state of the law, Article 256 [245-A], as quoted above brought about by the enactment of
the amendatory R.A. No. 9481.8 Under this provision, the inclusion as union members of
employees outside the bargaining unit is not a ground for the cancellation of the registration of
the union. The employees so
1
Section got RA No. 9481 inserted Article 256 [245-A] into the Labor Code in 2007.
2
Introduced as new provision by Section 9, RA No, 9481 which lapsed into law on May 25,2007 and
became effective on June 14, 2007: As renumbered pursuant to Section 5, R.A. No. 10151, June 21,
2011 and DOLE Department Advisory No. 01, Series of 2015 (Renumbering of tie Labor Code of the
Philippines, as Amended), issued on July 21, 2015.
3
Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union. G.R. No. 121084,
Feb. 19,1997.
4
See also Toyota Motor Philippines Corporation Labor Union v. Toyota Motor Philippines Corporation
Employer and Workers Union, Toyota Motor Philippines Corporation, G.R. No. 135806, Aug. 8,2002.
5
Dunlop Slazenger [Phils, Inc. v. Secretary of Labor and Employment OR. No. 131248, Dec. 11,1998.
6
Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union, OR. No. 121084,Feb.
19, 1997.
7
Dunlop Slazenger [Phils1, Inc. v. Secretary of Labor and Employment, G.R. No. 131248, Dec. 11,
1008.
8
Republic or the Philippines v. Kawashima Textile Mfg.. Philippines, Inc., G.R. No. 160352, July
23,2008.
391
CHAPTER FIVE
LABOR RELATIONS
improperly included are automatically deemed removed from the list of members of said union
by operation of law.' Thus, in Charter Chemicat2 involving the mixed membership of
supervisory and rank-and-file employees in the rank-and-file union, it was held that the inclusion
of supervisory employees in petitioner union does not divest it of its status as a legitimate labor
organization. The CA's reliance on Toyota is misplaced in view of the subsequent ruling in
Kawash1ma3 where it was explained at length how and why the Toyota doctrine no longer holds
sway under the altered state of the law and rules applicable to this case.4
3. EXCLUDED MEMBERS AUTOMATICALLY REMOVED BY OPERATION OF

LAW.
As is now provided in Article 256 [245-A], any excluded members are automatically deemed
removed by operation of law from the list of legitimate members of the union concerned. Thus, if
supervisory employees are included as members of a rank-and-file union, they are deemed
automatically removed from the roster of members of said union and vice versa.
4. MIXED MEMBERSHIP, A PROHIBITED GROUND TO CANCEL UNION

REGISTRATION.
Under the Implementing Ru1es5 of the Labor Code, mixed membership is now deemed a
prohibited ground for the cancellation of union registration.
4.
NON-ABRIDGEMENT6
(OF RIGHT TO SELF-ORGANIZATION)
1. LEGAL BASIS.
Article 257 [246] speaks of the principle of non-abridgment of the right to self-organization
as follows:
"Article 257 [246]. Non-Abridgment of Right to Self-Organization. - It
shall be unlawful for any person to restrain, coerce, discriminate against or unduly
interfere with employees and workers in their exercise of the right to self-
organization. Such right shall include the right to
1
See also Section 6, Rule XIV, Book V, Rules to Implement the Labor Code, as inserted by Department Order No.
40-F-03, Sales of 2008 [Oct. 30,2008].
2
Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and
Reforms (SMCC-SUPER) v. Charter Chemical and Coating Corporation, G.R. No. 1697171, Math 16,2011.
3
Republic of the Philippines, Represented by DOLE v. Kawashima Textile Mfg., Philippines, Inc., supra.
4
See also The Heritage Hotel Manila v. Secretary of Labor and Employment G.R. No. 172132, July 23,2014.
5
New Section 6, Rule XIV, Book V, Rules to Implement the Labor Code, as inserted by Department Order No. 40-
F-03, Series of 2008 [Oct. 30,2008]. This section provides: °"Section 6. Prohibited Grounds for Cancelation of
Registration. — The inclusion as union members of employees who are outside the bargaining unit shat not be a
ground to caned the union registration. The ine5gble employees are automatically deemed removed from the list
of membership of the union.'
6
This is bon this word "Abridgement' is spelled in the 2019 Syllabus. Note that in Article 257 [246] of the Labor
Code, this words spelled as 'Non-Abridgment"
form, join, or assist labor organizations for the purpose of collective bargaining
through representatives of their own choosing and to engage in lawful concerted
activities for the same purpose or for their mutual aid and protection, subject to the
provisions of Article 2641 of this Code"
2. MEANING OF RIGHT TO SELF ORGANIZATION.
The right of self-organization-includes the right to organize or affiliate with a labor union or
determine which of two or more unions in an establishment to join, and to engage in concerted
activities with co-workers for purposes of collective bargaining through representatives of their
own choosing, or for their mutual aid and protection, i.e., the protection, promotion, or
enhancement of their rights and interests.2
More aptly, Article 257 [246] describes the legal concept of the "right to self-organization,"
which, as a legal proposition, includes two (2) basic rights, namely:
1) "to form, join, or assist labor organizations for the purpose of collective bargaining
through representatives of their own choosing;" and
2) "to engage in lawful concerted activities for the same purpose or for their mutual aid and
protection, subject to the provisions of Article 279 [26413 of [the Labor] Code."
No. 1 above is the rudimentary and hornbook description of the "right to self-organization"
but No. 2 needs some dissecting and further expounding.
The term "concerted activities" refers to either or both (1) a "strike," considered the most
potent democratic weapon4 of workers in the economic war between labor and management,
and/or (2) a "picket", which is protected under the freedom of speech and of expression in the
Constitution.5 Under this concept, a strike or picket may be staged for two purposes, namely: (1)
"for the purpose of collective bargaining"; or (2) "for their mutual aid and protection."
1
Now renumbered as Article 279 and entitled "Prohibited Activities' [n Sties aid Lockouts].
2
Allan M. Mendoza v. Officers of Mania Water Employees Union (M1NEU), G.IZ No. 201595, Jan.
25,2016.
3
Entitled "Prohibited Activities" [in Strikes and Lockouts].
4
Jurisprudentially, a stoke, because it is premised on the concept of economic war between labor and
management, has been described as a "weapon" that can either breathe life to or destroy the union
aid its members, and one that must also necessarily affect management and its members. (Phimco
industries, tic. v. Phimco Industries Labor Association (PILA), GR. No. 170830. Aug. 11,2010, oiling
Association of Independent Unions in the Philippines v. NLRC, G.R. No. 120505. March 25, 1999,
364 Phil. 697, 707).
5
Section 4, Article of the 1987 Constitution which provides: 'Section 4. No law shall be passed
abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably
to assemble aid petition the government for redress of grievances."
393
CHAPTER FIVE
LABOR RELATIONS
The Labor Code's principal provision on "strikes" and "picketing," Article 278 [263],1
reiterates the foregoing two (2) purposes in its paragraph (b), thus:
"(b) Workers shall have the right to engage in concerted activities for
purposes of collective bargaining or for their mutual benefit and protection. The right of
legitimate labor organizations to strike and picket and of employers to lockout,
consistent with the national interest, shall continue to be recognized and respected.
However, no labor union may strike and no employer may declare a lockout on grounds
involving inter-union and intra-union disputes."2
From the foregoing disquisition, it is clear that the twin rights to strike and to picket are
not separate and distinct, stand-alone rights but are part and parcel of the primordial and
fundamental right to self-organization. No meaningful strike or picket can be staged by the
workers without their being organized first into one potent force — as a union. Self-organization
therefore is the main key that could open the door to the valid exercise of the rights to strike and
to picket. Consequently, any act of restraint, coercion, discrimination or interference in the
conduct of a strike or picket would necessarily violate the employees' lawful exercise of their
right to self-organization.
3. OBJECT OF THE LAW.

The right to form, join, or assist a union is specifically protected by the Constitution 3 and
such right4 shall not be abridged.5 Article 257 [246] emphatically restates the policy of the State
to promote and emphasize the primacy of free collective bargaining and negotiations, free trade
unionism and free and voluntary organization of a strong and united labor movement.6
4. RIGHT TO UNION MEMBERSHIP.

a. Right to union membership is not absolute.
An employee cannot invoke an absolute right to union membership. 7 Although the right
to self-organization and collective bargaining is duly guaranteed under the Constitution, it is
subject, however, to regulation by the State. For instance, it is mandated by law that no labor
organization shall knowingly admit as member or continue in membership, any individual who
belongs to a subversive organization or who is engaged directly or indirectly in any subversive
activity.5
I
Entitled "Strikes, Picketing aid Lockouts."
2
Underscoring supplied.
3
Section 3, Article XIII thereof.
According to Section 8, Article III of the Constitution which provides: "Section 8. The right of the
people, including those employed in the public and private sectors, to form unions, associations, or
societies for purposes not contrary to law shall not be abridged."
5
S.S. Ventures International, Inc. v. S.S. Ventures Labor Union, G.R. No. 161690, July 23,2008
6
See also Article 218 [2111 Labor Code
7
Local 7, Press & Printing Free Workers (FFW) v. Tabigne, G.R No. L-16093, Nov. 29, 1960, 110 Ptd.
276.
8
Article 250(e) [241(e)), Labor Code.
b. Freedom of choice.
An employee has the right to join or not to join a labor union. 1 A member of a labor
union may leave and cancel his membership at any time. An employee who joins a union does
not make any commitment or assume any undertaking to continue his membership therein for a
fixed period of time, much less indefinitely. In this regard, he is a free agent 2 The same may not
be said, however, in case there is a valid union security clause in the CBA such as a closed-shop
or union-shop arrangement between management and the union. In such a case, the employee
concerned is duty-bound to keep his union membership for the duration of the CBA as a
condition for his continued employment. If such membership in the union which is the collective
bargaining agent is validly terminated, he may likewise be dismissed from his employment. The
only exception to this is when the employee objects to such membership on the ground of
religious belief.3
c. Right to join a union acquired from first day of employment.

By express provision of Article 292(c) [277(c)] of the Labor Code, any employee,
whether employed for a definite period or not shall, beginning on his first day of service, be
considered an employee for purposes of membership in any labor union.
d. Union members who are not employees do not possess the tight to join union.
If the union members are not employees, no right to organize for purposes of collective
bargaining nor to be certified as bargaining agent can be recognized. The question of whether
employer-employee relationship exists is a primordial consideration before extending labor
benefits under the workmen's compensation, social security, PhilHealth, termination pay and
labor relations law. It is important in the determination of who shall be included in the proposed
bargaining unit because it is the sine qua non, the fundamental and essential condition that a
bargaining unit be composed of employees. Failure to establish this juridical relationship
between the union members and the employer affects the legality of the union itself. It means the
ineligibility of the union members to present a petition for certification election as well as to vote
therein.4
1
Victoriano v. Elizalde Rope Workers Union, G.R. No. L-25246, Sept 12.1974: UST Faculty Union
[LISTFU] v.13konio, G.R No. 131235, Nov. 16.1999.
2
Base v. FOITAF, G.R. No. L-27113, Nov. 19, 1974, 61 SCRA 93: Pagkakaisa v. Enriquez, G.R No. L-
12999, July 26, 1960.
3
Victorian° v. Elizalde Rope Workers Union, supra; De La Sale University v. De La Salle University
Employees Association, G.R. No. 109002, 4ril 12,2000.
4
Singe Sewing Machine Company v. Drilon, G.R. No. 91307, Jan. 24, 1991; La Suerte Cigar and
Cigarette Factory V. Director of Labor Relations, G.R No. L-55674, July 25, 1983, 123 SCRA 679;
Republic Planters Bank General Services Employees Union-National Association of Trade Unions v.
Laguesma, G.R No. 119675. Nov. 21, 1996, 264 SCRA 637, 643.
395
CHAPTER FIVE
LABOR RELATIONS
5. RIGHTS OF UNION MEMBERS UNDER ARTICLE 250 [241].
Article 250 [241] of the Labor Code enumerates the specific legal rights of a member of a
labor union as well as the legal conditions of such membership. More specifically, these rights
and conditions may be grouped into the following categories:
a. Fiscal rights.
Financial rights include the following:
1) Right against arbitrary, oppressive or excessive fees, fines and forfeitures;

2) Right to full and detailed reports on all financial transactions in accordance with the
constitution and by-laws of the union;
3) Right against unauthorized collection of any fees, dues or other contributions;
4) Right to claim receipt for every payment of fees, dues or other contributions;
5) Right to prevent funds of the organization from being applied for any purpose or object
other than those expressly provided by the union's constitution and by-laws or allowed
expressly by written resolution adopted by the majority of the members at a general
meeting duly called for the purpose;
6) Right to demand or require that every income or revenue as well as every expenditure of
the union shall be recorded or receipted, which record or receipt shall form part of the
financial records of the union;
7) Right against unauthorized check-off for special assessments, attorney's fees, negotiation
fees or any other extraordinary fees without an individual written authorization duly
signed by the employee;
8) Right to vote on the compensation of union officers; and
9) Right against unreasonable assessments to finance labor relations seminars and other
labor education activities.
b. Right to information.
Right to information includes the following:
1) Right to require the treasurer and the other officers of the union responsible for the
account of the union as well as for the collection, management, disbursement, custody or
control of the funds, moneys and other properties, to render a true and correct account
thereof, at least once a year within thirty (30) days after the
close of its fiscal year and at such other times as may be required by a resolution of the majority
of the members of the union and upon vacating his office;
2) Right to require that the account be duly audited and verified by affidavit and a copy
thereof be furnished to the DOLE Secretary;
3) Right to inspect the books of accounts and other financial records of the union and to
require full and detailed reports from their officers and representatives on all financial
transactions as provided for in the constitution and by-laws of the organization;
4) Right to be informed of the provisions of the constitution and bylaws, CBA, the
prevailing labor relations system and all their rights and obligations under existing labor
laws through the medium of labor relations seminars or other labor education activities;
and
5) Right to seek investigation of any irregularity.
It must be noted that the law considers it unlawful for any person to make any statement,
report, or record filed or kept pursuant to the provisions of the Labor Code, knowing such
statement, report or record to be false in any material respect
c. Political rights.
Political rights include the following:
1) Right to vote and be voted for as an officer of the union, subject to the qualifications and
disqualifications mentioned in Article 250 [241] of the Labor Code;2 and
2) Right to be appointed to appointive positions in the organization, subject to the
qualifications and disqualifications mentioned in Article 250 [241] of the Labor Code.
3) Right to participate in decision-making.
Right to participate in decision-making process includes the following:

1) Right to vote by secret ballot on any question of major policy affecting the entire
membership of the organization; and
2) Right to initiate and participate in impeachment or expulsion proceedings against an
erring officer or member of the union.
1
Article 119, Labor Code.
2
Such as membership in a subversive organization or engaging, directly or indirect+, in any subversive
activity and conviction of a crime involving moral turpitude.
397
CHAPTER FIVE LABOR RELATIONS
5.
HOW A UNION IS ORGANIZED1
1. NEED TO DISCUSS HOW TO ORGANIZE A UNION.

Labor Relations is a complicated subject. Since unionism is at its very core, this subject is
better understood if its discussion will start with the answer to the lingering question of how a
labor organization is created and established. Thus, after discussing the right to self-organization
above and before delving into the other specific topics prescribed in the 2019 Syllabus under this
major topic of 'Labor Relations," a preliminary discussion on the modes of creating and
establishing a union would certainly prove helpful.
2. "LABOR ORGANIZATION" AND "UNION," DEFINED.

A "labor organization" is any union or association of employees which exists in whole or in
part for the purpose of collective bargaining or for dealing with employers concerning the terms
and conditions of employment.2 It is created for mutual aid, interest, cooperation, protection or
other lawful purposes.3 On the other hand, the term "union "is technically defined as any labor
organization in the private sector organized for collective bargaining and for other legitimate
purposes.4 These two terms may, however, be used interchangeably. A "legitimate labor
Organization" refers to any labor organization in the private sector registered or reported with the
DOLE, in accordance with the Labor Code and its implementing rules. It includes any branch or
local thereofs. 5
3. TWO (2) BASIC PURPOSES OF A LABOR ORGANIZATION.

Based on the legal definition of the term "labor organization," there are two (2) basic
purposes of a labor organization, namely:
1. for collective bargaining; and

2. for dealing with the employer.
4. TWO (2) MODES OF CREATING A LABOR ORGANIZATION
Under the Labor Code, there are two (2) modes of creating or establishing a labor organization,
i.e., through:
1
This topic is not a part of the 2019 Syllabus.
2
Article 219(g) [212(g)1, Labor Code; See also Section 1114 Rule III, NCMB Manual of Procedures for
Conciliation and Preventive Mediation Cases.
3
Section 1 [cc], Rule I, Book V. Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, [Feb. 17,2003].
4
Section 1 Rule I, Book V, Ibid.
5
See Article 219(h) 1212 (h)], Labor Code; Rules III [Registration of Labor Organizations] and IV
[Provisions Common to the Registration of Labor Organizations and Workers Associations], in
relation to Section 1 [ee]. Rule I, Book V of the Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, [Feb. 17,2003.
(1) Independent registration;1 and

(2) Chartering of local chapter/chartered local.2
5. ONLY FEDERATION OR NATIONAL UNION MAY DIRECTLY CREATE A

LOCAL CHAPTER/CHARTERED LOCAL.
Under Article 241 [234-A], it is clear that the authority to directly create a local
chapter/chartered local is vested only with the federation or national union, to the exclusion of
all others. It is only a federation or national union which is empowered to
directly issue a charter certificate indicating the establishment of the local chapter/chartered
local.3
6. TRADE UNION CENTERS NOT ALLOWED.

Article 240 [234], as amended by R.A. No. 9481, now includes "trade union center" as
among the organizations which may register as a legitimate labor organization. But interestingly,
Article 241 [234-A], the provision enunciating the procedure for chartering of a local
chapter/chartered local, does not include "trade union center" as among the labor organizations
that is empowered, besides the federation or national union, to create such local
chapter/chartered local through the process of chartering.
Also worth emphasizing is that even in the series of amenchnents4 to the Rules to Implement
the Labor Code, such as Department Order No. 40-F-03, Series of 2008,5 which was issued to
implement the amendments introduced by R.A. No. 9481, there was no mention of a "trade union
center" as being among the labor organizations allowed to charter a local chapter/chartered local.
Thus, applying the Latin maxim expressio unius est exclusio alterius, it was held in San Miguel
Col).,6 that trade union centers7 are not allowed to charter directly a local chapter/chartered local
because the pertinent statutes and applicable implementing rules do not grant such authority
thereto. The power granted to labor organizations to directly create a local chapter/chartered
local through chartering is given only to a federation or national union.
1
As provided under Article 240 [234].
2
As provided under Article 241 [234-A].
3
Section 2, Department Order No. 40-F-03, Series of 2008, [October 30, 2008] which amended
Section 2. paragraph E, Rule III of Book V of the Implementing Rules of the Labor Code, as earlier
amended by Department Order No. 40-8-03 [February 16,2004).
4
Such as those introduced by Department Order No. 40-8-03 February 16, 20041 Department Order
No. 40-C-05 [March 7, 2005], Department Order No. 40-0-05 [September 13,2005), and the most
recent Department Order No. 40-F-03, Series of 2008 [October 30,2008).
5
October 30,2008.
6
San Niguel Corp. Employees Union-PTGWO v. San Miguel Paclicaging Product Employees Union —
POMP, G.R. No. 171153, Sept 12,2007.
7
Like the Pambansang Diwa ng Manggagawang Pilipino (POMP) in this case .
399
CHAPTER FIVE
LABOR RELATIONS
In sum, although the trade union center 1 in this case is a legitimate labor organization, it has
no power to directly create a local chapter/chartered local.
7. DISTINCTIONS.
The following are the distinctions between independent registration and chartering:
Criteria Independent Chartering

Registration
Documentary Article 240 [234]2 Article 241 [234-Ap]3
requirements
Unions covered (a) Independent labor Local chapter Or Chartered local
organization
(b) Federation
(c) National union
(d) Industry union
(e) Trade union center.
Acquisition of Acquires full legal Acquires legal personality in two (2) stages:
legal personality personality upon issuance of First stage: Partial legal personality which it
a Certificate of Registration acquires upon the issuance to it of a Charter
by the BLR.5 Certificate by a federation or national union.
Second stage: Full legal personality which is
accorded to a local chapter/chartered local only
upon submission to the DOLE of its Charter
Certificate and the documents mentioned in Article
241 [234-A].
Note: No independent registration is required for it
to acquire legal personality. Hence, no similar
Certificate of Registration is issued. The
subsequent issuance of the Certificate of Creation of
Chaffered Local by the DOLE is not material to
its acquisition of legal personality but the
submission of the documents mentioned in Article
241 [234-A].
Right to file Upon issuance of Certificate Upon issuance of a Charter Certificate by a
PCP of Registration federation or national union (First Stage above),
both or either the local chapter/chartered local
and/or the federation or national union can file the
PCE7
2
Article 240 [234] - Requirements of Registration.
3
Article 241[234-A] - Chartering and Creation of a Local Chapter.
4
San Miguel Corp. Employees Union-PTGWO V. San Miguel Packaging Products Employees Union — POMP,
G.R. No. 171153, Sept 12, 2007.
5
See Artiste 240 [234], Labor Code; Certificate of Registration issued by the Bureau of Labor Relations (BLR).
6
Petition for Certification Election (ME).
7
See Articles 268 [256] and 269 [2571 of the Labor Code which provide in paert "xxx In cases Were the petition
was filed by a national union or federation, it shall not be required to disclose tie names of the local chapters
officers and members."
6.
AFFILIATION AND DISAFFILIATION
1. UNION VIS-A-VIS ITS MEMBERS.
The relationship between the union and its members is that of principal and agent, the
former being the agent while the latter, the principal. Their relationship is fiduciary in character.
The union is but an agent of its members for the purpose of securing for them fair and just wages
and proper, good working conditions. It includes the obligation to give its members as its
principals, all information relevant to the union and labor matters entrusted to it. The court has
the duty to protect workers from the unfair treatment and unjust exploitation not only by
oppressive employers but also by their own unworthy leaders. Where the union leadership is
recreant in its duty towards the union members, the courts must be vigilant to protect the
individual interests of the union members.1
2. MOTHER UNION V15-A- V/S AFFILIATE OR LOCAL CHAPTER/CHARTERED

LOCAL
In relation to an affiliate or local chapter/chartered local, the federation or national union

is commonly known as the "mother union." This term is not found in law but oftentimes, the
Supreme Court uses this term to describe a federation or a national union.
The mother union, acting for and in behalf of its affiliate, has the status of an agent while the
affiliate or local chapter/chartered local remains the principal — the basic unit of the association
free to serve the common interest of all its members, subject only to the restraints imposed by the
constitution and by-laws of the association.2
3. PURPOSE OF AFFILIATION
The purpose of affiliation is to further strengthen the collective bargaining leverage of the
affiliate. No doubt, the purpose of affiliation by a local union with a mother union is to increase
by collective action its bargaining power in respect of the terms and conditions of labor.3
4. RIGHT TO DISAFFILIATE.
The right of the affiliate union to disaffiliate from its mother federation or national union
is a constitutionally-guaranteed right which may be invoked by the former at any time. It is
axiomatic that an affiliate union is a separate and voluntary
1
Heirs of Teodulo M. Cruz v. CIR, G.R. Nos. L-23331-32, Dec. 27, 1959.30 SCRA 917.
2
Progressive Development Corporation v. Secretary, Department of Labor and Employment G.R.No
96425, Feb 4,1992.
3
National Union of Bar* Employees (NUBE) v. Philnabank Employees Association (PEMA), G.R.
No.I74287, August 12, 2013, citing Malayang Samahan ng mga Manggagawa sa M. Greenfield v.
Hon. Ramos, G.R. No. 113907, Feb. 28, 2000.
401
CHAPTER FIVE
LABOR RELATIONS
association free to serve the interest of all its members consistent with the freedom of association
guaranteed in the Constitution.1
5. DISTINCTIONS AS TO AFFILIATION & DISAFFILIATION.

The following are the distinctions between independently registered union and local
chapter/chartered local, insofar as their relationship with the federation or national union is
concerned:
Criteria Independently Registered Union Local Chapter or Chartered Local

Proper term to describe the Affiliation Chartering
relationship with federation or
national union
Proper denomination of the Atfiliate2 Local Chapter or Chartered Local3
union
Nature of contractual Principal-Agent Principal-Agent
relationship with federation or Principal - Affiliate Union Agent - Principal- Local Chapter/Chartered
national union Federation or National Union Local
Agent- Federation or National Union
Proof of relationship Contract of Affiliation Charter Certificate
Effect of affiliation/chattering Does not affect in any way its Since it is a creation of the federation
independent legal personality or national union, its legal personality
is dependent upon and coterminous
with its association with its creator - the
federation or national union
Effect of Disaffiliation Does not affect legal personality Ceases to have any legal personality
since it has its own independent Exception: If prior to disaffiliation, it
registration has secured independent registration
6. SOME PRINCIPLES ON AFFILIATION.

• Independent legal personality of an affiliate union is not affected by affilia tion.4
• The affiliate union is a separate and distinct voluntary association owing its creation to
the will of its members. It does not give the mother union the license to act independently
of the affiliate union.'
• The fact that the affiliate union is not a legitimate labor organization does not affect the
principal-agent relationship.'
1
Volkschel Labor Union v. Bureau of Labor Relations, G.R. No. L-45824, June 19, 1985, 137 SCRA 42.
2
An 'affiliate refers to:
(1) An independent union affiliated WM a federation or a national union; or
(2) A local chapter or chartered local *lit has been subsequently granted independent registration but did not
disaffiliate from the federation or national union which created it (Section 1 [a], Rule I, Book V. Rules to
Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,20031).
3
Technically, a local chapter created through the mode of chartering by a mother union under Article 241 [234-A]
of the Labor Code, cannot be properly called an "affiliate" if it has not acquired any independent registration of its
own.
4
Adamson and Adamson v. CIR, G.R. No. L-35120, Jan. 31, 1984.
5
Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, G.R. Nos. 174040-41, Sept 22,2010.
402 BAR REVIEWER 061 LABOR1AW
• Affiliate union becomes subject of the rules of the federation or national union.2
• The appendage of the acronym of the federation or national union after the name of the
affiliate union in the registration with the DOLE does not change the principal-agent
relationship between them. Such inclusion of the acronym is merely to indicate that the
local union is affiliated with the federation or national union at the time of the
registration. It does not mean that the affiliate union cannot independently stand on its
own.3
• The fact that it was the federation which negotiated the CBA does not make it the
principal and the affiliate or local union which it represents, the agent.'
• However, if it was the federation which negotiated all the CBAs in the establishment, the
local chapter cannot negotiate the renewal of the CBA without the consent and
participation of the federation.3
• The fact that it was the name of the federation that was particularly mentioned as the
bargaining party in the CBA without specifying the affiliate local union does not have
any effect on the right of the federation to participate in the bargaining process.6
• It is the local union and not the federation/national union with which it is affiliated that
has the right to administer and enforce the CBA with the employer.7
• In case of illegal strike, the local union, not the mother union, is liable for damages.8
7. SOME PRINCIPLES ON DISAFFILIATION.

• Disaffiliation does not divest an affiliate union of its legal personality.9
• Disaffiliation of an affiliate union is not an act of disloyalty.io
• Disaffiliation for purposes of forming a new union does not terminate the status of the
members thereof as employees of the company. By said act of disaffiliation, the
employees who are members of the local union did not form a new union but merely
exercised their right to register their local union. The local union is free to disaffiliate
from its mother union. 11
1
Filipino Pipe and Foundry Corporation v. NLRC, OR No. 115180, Nov. 15, 1999.
2
See also Malayang Samahan rig mga Manggagawa so M. Greenfield v. Ramos, OR. No. 113907.
Feb. 28,2000.
3
Tropical Hut Food Employees Union - COW v. Tropical Hut Food Market OR. No. 43495-99, Jan. 20,
1990.
4
Elisco-Elirol Labor Union [NAFLU1 v. Noriel, G.R. No. 41955, Dec. 29,1977.
5
Abania v. NLRC, OR. Nos. 154113, 187778, 187861 & 196156, Dec. 7, 2011, 661 SCRA 686.
6
Pambansang Kapatiran ng mga Anak Pawis so Formey Plastic National Workers Brotherhood v.
Laguesma, OR. No. 111836, Feb. 1, 1996, 253 SCRA 96.
7
Elisco-Elirol Labor Union [NAFLU] v. Noriel, OR. No. 41955. Dec. 29,1977.
8
Filipino Pipe and Foundry Corporation v. NLRC. G.R. No. 115180, Nov. 16, 1999.
9
Philippine Skylanders, Inc. v. NLRC, OR. No. 127374, Jan. 31,2002
10
People's Industrial and Commercial Employees and Workers Organization [FFW1 v. People's
Industrial and Commercial Corporation, G.R. No. L-37687, March 15, 1982, 112 SCRA 440
11
Elisco-Elirol Labor Union [NAFLU] V. None!, G. R L-41955, Dec. 29,1977.
403
CHAPTER FIVE
LABOR RELATIONS
 Disaffiliation should be approved by the majority of the union members.1

 Disaffiliation terminates the right to check-off federation dues. The obligation to check-
off federation dues is terminated with the valid disaffiliation of the affiliate union from
the federation with which it was previously affiliated.2
 Disaffiliation does not affect the CBA. It does not operate to amend it or change the
administration of the contract.3
 As a general rule, a labor union may disaffiliate from the mother union to form an
independent union only during the 60-day freedom period prior to the expiration of the
existing CBA. It is not, however, legally impossible to effect the disaffiliation prior to the
freedom period, provided that the same is approved by the majority of the members of the
bargaining unit. Under this situation, the CBA continues to bind the members of the new
or disaffiliated and independent union up to the expiration thereof.4
 Disaffiliating from the federation and entering into a CBA with the employer does not
constitute an unfair labor practice.5
 Disaffiliation is not a violation of the union security clause.6
 Election protest involving both the mother federation and local union is not a bar to
clisaffiliation.7
 The issue of affiliation or disaffiliation is an inter-union conflict the jurisdiction of which
properly lies with the Bureau of Labor Relations IBLR) and not with the Labor Arbiters 8
B.
BARGAINING UNIT
1. BARGAINING UNIT, MEANING.
A "bargaining unit" or more appropriately, "collective bargaining unit (CBU)," refers to a

group of employees sharing mutual interests within a given employer unit, comprised of all or
less than all of the entire body of employees in the employer unit or any specific occupational or
geographical grouping within such employer unit.9 It may also refer to the group or cluster of
1
Villar v. Inciong, supra; Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., G.R No. L-
33987, Sept 4,1975.
2
Volkschel Labor Union v. Bureau of Labor Relations, G.R No. L-45824, June 19, 1985 137 SCRA 42.
3
Volkschel Labor Union v. Bureau of Labor Relations, supra.
4
Associated Workers Union PTGWO v. NLRC, G.R. Nos. 87266-69, July 30, 1990.
5
Philippine Skylanders, Inc. v. NLRC, G.R. No. 127374, Jan. 31,2002].
6
Tropical Hut Employees Union - COW, v. Tropical Hut Food Market, Inc., G.R. No. L-43495-99, Jan.
20, 1990.
7
Philippine Skylanders, Inc. v. NLRC, G.R. No. 127374, Jan. 31, 2002.
8
Id.
9
Section 1, Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order
No. 40-03, Series of 2003, [Feb. 17, 2003].
jobs or positions within the employer's establishment that supports the labor organization which
is applying for registration.
It is a legal collectivity for collective bargaining purposes whose members have substantially
mutual bargaining interests in the terms and conditions of employment as will ensure to all
employees their collective bargaining rights. To be appropriate, a bargaining unit must involve a
grouping of employees who have substantial, mutual interests in wages, hours of work, working
conditions and other subjects of collective bargaining1
2. NO HARD AND FAST RULE TO DETERMINE A CBU.

There is no hard and fast rule in determining an appropriate bargaining unit. The test whether
the designation of a bargaining unit is appropriate is whether it will best assure to all employees
the exercise of their collective bargaining rights. There should be a community of interest which
should be reflected in groups having substantial similarity of work and duties or similarity of
compensation and working conditions, among other criteria.2
3. TESTS TO DETERMINE AN APPROPRIATE CBU.

Based on jurisprudence,3 there are certain tests which may be used in determining the
appropriate collective bargaining unit, to wit.
(1) Community or mutuality of interest doctrine;

(2) Globe doctrine;
(3) Collective bargaining history doctrine; and
(4) Employment status doctrine.
3.1. COMMUNITY OR MUTUALITY OF INTEREST DOCTRINE.
Under this doctrine, the employees sought to be represented by the collective bargaining
agent must have community or mutuality of interest in terms of employment and working
conditions as evinced by the type of work they perform. It is characterized by similarity of
employment status, same duties and responsibilities and substantially similar compensation and
working conditions.4
In San Miguel Coloration a Laguesma,5 the Supreme Court applied this principle in the
petition of the union which seeks to represent the sales personnel in the various Magnolia sales
offices in Northern Luzon. Petitioner took the position that each sales office should constitute
one bargaining unit. In disagreeing to this proposition of petitioner, the High Court said: "What
greatly militates against this position (of the company) is the meager number of sales personnel
in
1
Dunlop Slazenger [PI-Rs ], Inc. v. Secretary of Labor and Employment, G.R. No. 131248, Dec. 11,
1998.
2
Democratic Labor Association V. Cebu Stevedoring Co., Inc.. G.R. No. 10321, Feb. 28,1958.
3
International School Alliance of Educators [ISAEI v. Quisumbing, G.R No. 128845, June 1.2000].
4
San Miguel Corporation Employees Union-PTGWO v. Confesor, G.R. No. 111262, Sept 19, 1996,262
SCRA 81, 98. 5 G.R. No. 1004E5, Sept 21, 1994.
405
CHAPTER FIVE
LABOR RELATIONS
each of the Magnolia sales offices in Northern Luzon. Even the bargaining unit sought to be
represented by respondent union in the entire Northern Luzon sales area consists only of
approximately fifty-five (55) employees. Surely, it would not be for the best interest of these
employees if they would further be fractionalized. The adage 'there is strength in number' is the
very rationale underlying the formation of a labor union."
In San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma,1 the
fact that the three (3) plants comprising the bargaining unit are located in three (3) different
places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando,
Pampanga, was declared immaterial. Geographical location can be completely disregarded if the
communal or mutual interests of the employees are not sacrificed. The distance among the three
(3) plants is not productive of insurmountable difficulties in the administration of union affairs.
Neither are there regional differences that are likely to impede the operations of a single
bargaining representative.
In University of the Philippines v. Ferrer-Calleja,2 all non-academic rank-and-file employees

of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Banos,
Laguna and the Visayas were allowed to participate in a certification election as one bargaining
unit.
In St. James School of Quezon Go v. Samahang Manggagawa sa St. James School of

Quezon City,3 the Court allowed respondent union to represent only the rank-and-file employees
(consisting of the motor pool, construction and transportation employees) of petitioner-school's
Tandang Sora campus. It debunked petitioner-school's contention that the bargaining unit should
not only be composed of said employees but must include administrative, teaching and office
personnel in its five (5) campuses. The motor pool, construction and transportation employees of
the Tandang Sora campus had 149 qualified voters at the time of the certification election, hence,
it was ruled that the 149 qualified voters should be used to determine the existence of a quorum
during the election and not all the employees in petitioner's five (5) campuses.
3.2. GLOBE DOCTRINE.

This principle is based on the will of the employees. It is called Globe doctrine because
this principle was first enunciated in the United States case of Globe Machine and Stamping
Co..4 where it was ruled, in defining the appropriate bargaining unit, that in a case where the
company's production workers can be considered either as a single bargaining unit appropriate
for purposes of collective bargaining or as three (3) separate and distinct bargaining units, the
determining
1
G.R. No. 110399, Aug. 15, 1997, 277 SCRA 370, 380-381.
2
G.R. No. 96189, July 14, 1991 211 SCRA 451.
3
G.R. No. 151326, Nov. 23,2005.
4
3 NLRB 294 (1937).
factor is the desire of the workers themselves. Consequently, a certification election should be
held separately to choose which representative union will be chosen by the workers.1
In International School Alliance of Educators [ISAE] v. ,Quisumb142 the High Court ruled
here that foreign-hired teachers do not belong to the bargaining unit of the local-hires because
the former have not indicated their intention to be grouped with the latter for purposes of
collective bargaining. Moreover, the collective bargaining history of the school also shows that
these groups were always treated separately.
3.3. COLLECTIVE BARGAINING HISTORY DOCTRINE.

This principle puts premium to the prior collective bargaining history and affinity of the
employees in determining the appropriate bargaining unit. However, the existence of a prior
collective bargaining history has been held as neither decisive nor conclusive in the
determination of what constitutes an appropriate bargaining unit.3
It was ruled in National Association of Free Trade Unions v. Mainit Lumber Development
Company Workers Union,4 that there is mutuality of interest among the workers in the sawmill
division and logging division as to justify their formation of a single bargaining unit. This holds
true despite the history of said two divisions being treated as separate units and notwithstanding
their geographical distance from each other.
In San Miguel Corporation v. Laguesma,5 despite the collective bargaining history of having
a separate bargaining unit for each sales office, the Supreme Court applied the principle of
mutuality or commonality of interests in holding that the appropriate bargaining unit is
comprised of all the sales force in the whole of Northern Luzon.
3.4. EMPLOYMENT STATUS DOCTRINE.

The determination of the appropriate bargaining unit based on the employment status of the
employees is considered an acceptable mode.6 For instance, casual employees and those
employed on a day-to-day basis do not have the mutuality or community of interest with regular
and permanent employees. Hence, their inclusion in the bargaining unit composed of the latter is
not justified.7
1
See also Mechanical Department Labor Union sa Philippine National Railways v. CIR, G. R. No. L-
28223, Aug. 30,1968.
2
G.R. No. 128845, June 1, 2000.
3
San Niguel Corporation v. Laguesma, infra; National Association of Free Trade Unions v Mainit
Lumber Development Company Workers Union, infra.
4
G.R. No. 79526, Dec. 21, 1990.
5
G.R. No. 100485, Sept 21,1994.
6
Rothenberg on Labor Relations, pp. 482-510.
7
Philippine Land-Air-Sea Labor Union v. CIR, G.R. No. L-14656, Nov. 29, 1960.
407
CHAPTER FIVE
LABOR RELATIONS
The case of Belyca Corporation v. Ferrer-Ca110,1 best illustrates this mode. This case
involves a corporation engaged in piggery and poultry raising, planting of agricultural crops and
operation of supermarts and cinemas. The Supreme Court ruled that it is beyond question that the
employees of the livestock-agro division of the corporation perform work entirely different from
those being performed by employees in the supermarts and cinemas. The differences among
them lie in their working conditions, hours of work, rates of pay, including the categories of their
positions and employment status. As stated by petitioner in its position paper, due to the nature
of the business in which its livestock-agro division is engaged, very few of its employees therein
are permanent, the overwhelming majority of whom are seasonal and casual and not regular
employees. Definitely, they have very little in common with the employees of the supermarts and
cinemas. To lump all its employees in its integrated business concerns cannot result in an
efficacious bargaining unit comprised of constituents enjoying a community or mutuality of
interest. Undeniably, the rank-and-file employees of the livestock-agro division fully constitute a
bargaining unit that satisfies both requirements of classification according to employment status
and of substantial similarity of work and duties which will ultimately assure its members the
exercise of their collective bargaining rights.2
C.
BARGAINING REPRESENTATIVE
1.
SOLE AND EXCLUSIVE BARGAINING AGENT
(SEBA)
1. MEANING.
"Sole and exclusive bargaining agent (SEBA)" refers to a legitimate labor union duly
certified3 as the sole and exclusive bargaining representative or agent of all the employees in a
collective bargaining unit (CBU).4 A labor union certified as SEBA means that it shall remain as
such during the existence of the CBA, to the exclusion of all other labor organizations existing
and operating in the same CBU, and no petition for certification election (PCE) questioning its
majority status shall be entertained nor shall certification election be conducted outside of the 60-
day freedom period immediately before the expiry date of the 5-year term of
1
G.R. No. 77395, Nov. 29,1988.
2
See also Democratic Labor Association v. Cebu Stevedoring Co., Inc., G.R. No. 10321, Feb. 28,
1958, 103 Phi. 1103.
3
The union becomes the SEBA through any of the following processes: certification election, consent
election, run-off election acre-run election. Voluntary recognition, as a mode of designating a SEBA,
has already been repealed and replaced by the new mode called "Request for SEBA Certification' per
department by Section 3, Department Order No. 44-1-15, Series of 2015 [September 07, 2015],
entitled "Further Amending Department Order No. 40, Series of 2003, Amending the Implementing
Rules and Regulations of Book Vat the Labor Code of the Philippines, as Amended.'
4
Article 219(j) [2120)1; Section 1 it], Rule. Book V, Ibid.
the CBA.' Once certified, what is represented by the SEBA are not only its members but also
those who are members of other unions, called "mino0"unions, who are included in the CRU.2
2. A NON-CERTIFIED UNION CANNOT COLLECTIVELY BARGAIN.

Under Article 267 [25513 of the Labor Code, it is clear that only the labor organization
selected by the majority of the employees in an appropriate CBU through any of the proper
certification election processes can act as the exclsoive representative or SEBA of all the
employees in such unit for purposes of collective bargaining with the employer. Hence, if the
union is admittedly not the exclusive representative of the majority of the employees in a CBI., it
could not demand from the employer the right to bargain collectively in their behalf.4
3. RIGHT OF INDIVIDUAL EMPLOYEE OR GROUP OF EMPLOYEES TO BRING

GRIVANCES DESPITE EXISTENCE OF SEBA.
Article 267 [255]5 recognizes an exception to the SEBA exclusivity rule. The existence
and designation of a SEBA does not have the effect of depriving an individual employee or
group of employees, regardless of whether they are members or non-members of the SEBA, to
exercise their right at any time to present grievances directly to their employer, with or without
the consent, participation or intervention of the SEBA.6 This simply means that a SEBA cannot
force an individual employee or group of employees to use only the union grievance procedure
or machinery in bringing grievances to the employer, although it may insist on having a
representative present at the grievance meeting of the individual employee or group of
employees with the employer. Thus, any employee or group of employees who want to settle a
problem directly with the employer may do so without getting afoul of the exclusivity rule that
generally the SEBA could invoke. They cannot be accused of committing any anti-union
violation or act of disloyalty against their union.
1
Article 265 [253-Al, Labor Code; Trade Unions of the P1tilippines!February Six Movement [TUPAS/FSM] v.
Laguesma, G.R. No.95013, Sept. 21,1994.
2
National Brewery & Allied Industries Labor Union of the Philippines v. San Miguel Brewery, Inc.. G.R. No.
L-18170, Aug. 31, 1963,8 SCRA 805, Dairy Queen Products of the Philippines, Inc. v. CIR, G.R. No. L-
35009, Aug. 31,1977,78 SGRA 439.
3
The first paragraph of this glide provides: "Article 267 12551 Exclusive Bargaining Representation and
Workers' Participation in Policy and Decision-Making. — The labor organization designated or selected by
the majority of the employees in an appropriate collective bargaining unit shall be the exclusive
representative of the employees in such unit for the purpose of collective bargaining. However, an
individual employee or group of employees she& have the light at any time to present grievances to the
employer.'
4
Philippine Diamond Hotel and Resort, Inc. [Mania Diamond Hotel] v. Manila Diamond Hotel Employees
Union, G.R. No.158075, June 30,2006.
5
Article 267 [2551 Exclusive Bargaining Representation and workers' Participation in Poky and Decision-
Mg. — The labor organization designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be the excusive representative of the employees in such unit for the purpose
of collective bargaining. However, an individual employee or group of employees shall have the right at any
time to present grievances to their employer.
6
Article 267 [255] Labor (Code.
409
CHAPTER FIVE
LABOR RELATIONS
Article 267 [255] has not defined nor described with clarity who the individual employee
and/or group of employees referred to therein are but it may be logically inferred from a reading
of this article, in correlation with relevant jurisprudence, that these employees may either be:
(1) Members of the SEBA, as in the case of Tabigue,4 or

(2) Non-SEBA members who belong to another union, as in the case of Insular Hotel 2
However, this right does not authorize the individual employee or group of employees to
bring their grievances through the CBA's grievance machinery and, if unsettled, elevate them to
voluntary arbitration without the participation of the SEBA. While Article 267 [255] clearly
enunciates the rule that an individual employee or group of employees are allowed to bring
grievances directly to the employer without need to secure the prior consent or participation of
the SEBA, jurisprudence, however, has clarified that they cannot have their grievances processed
through the grievance machinery and voluntary arbitration mechanism provided in the CBA
without the participation of the SEBA, the reason being that such processes are contractually
granted by the parties thereto — the employer and the SEBA — hence, their consent, especially
that of the SEBA's, should first be secured by the individual employee or group of employees.
Atlas Farms3 is very definitive on this requirement, viz.:

"xxx Pursuant to Article 273 [2601 of the Labor Code, the parties to a CBA
shall name or designate their respective representatives to the grievance machinery and
if the grievance is unsettled in that level, it shall automatically be referred to the
voluntary arbitrators designated in advance by parties to a CBA. Consequently, only
disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators."4
Resultantly, if the grievance or dispute is between an individual employee or group of

employees [but not the SEBA], on the one hand, and the employer (referred to as company in
Atlas), on the other hand, there is no way it could be referred to or processed through the
grievance machinery or voluntary arbitration provided in the CBA.
The case of Tabigue5 has reiterated Atlas Farms. The petitioners in this case are members of
INTERCO Employees/Laborers' Union (the union), the bargaining agent in respondent company.
Without the participation of the union, petitioners filed a Notice of Preventive Mediation with
the NCMB against
1
Tabigue v. International Copra Export Corporation, G.R. No. 183335. Dec. 23,2009.
2
Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, DR. Nos. 17404041, Sept
22,2010.
3
Atlas Farms, Inc. v. NLRC, GR. No. 142244, Nov. 18, 2002, 440 Phil. 620.
4
Emphasis and underscoring supplied.
5
Supra
respondent company for violation of the CBA and for failure to sit on the grievance conference/
meeting. As the parties failed to reach a settlement before the NCMB, petitioners requested to
elevate the case to voluntary arbitration. The NCMB thus set a date for the parties to agree on a
Voluntary Arbitrator. However, before they could finally meet, respondent company presented
before the NCMB, a letter of the president of the union of which petitioners are members,
addressed to respondent company's plant manager, stating that petitioners "are not dii# authorked
bi [the] board or the officers to represent the union, [hence] ... all actions, representations or
agreements made br these people with the management will not be honored or recognked by the
union. "Respondent company thus moved to dismiss petitioners' complaint for lack of
jurisdiction. In affirming the position taken by the union president, the Supreme Court reasoned
that the right of any employee or group of employees to, at any time, present grievances to the
employer does not imply the right to submit the same to voluntary arbitration. In this case,
petitioners have not been duly authorized to represent the union, hence, they cannot present their
unsettled grievances for voluntary arbitration.1
Insular Hote1,2 reiterated Tabigue. In this case, the DIHFEU-NFL,3 the recognized SEBA,
entered into a Memorandum of Agreement (MOA) with the respondent hotel which superseded
the affected provisions of the existing CBA. The MOA was executed to effect the re-opening of
the hotel which earlier suspended its operation due to extreme business losses. Individual
members of another union, the IHEU-NFL,4 petitioner in this case, which claimed to be
affiliated also with the same federation, questioned the validity of the MOA by filing a Notice of
Preventive Mediation with the NCNB.
On the issue of the identity of the duly recognized union, the respondent hotel contended that
it is DIHPEU-NFL which is the only recognized bargaining agent in their establishment, the
other union, IHEU-NFL, being a non-entity since, as certified by the DOLE, it is not a registered
labor organization. It was held, however, that respondent hotel is already estopped from
questioning the same as it did not raise the said issue in the proceedings before the NCMB and
the Voluntary Arbitrator. A perusal of the records revealed that the main theory posed by
respondent hotel was whether or not the individual employees had the authority to file the
complaint, notwithstanding the apparent non-participation of the union. Respondent hotel never
put in issue the fact that DIHFEU-NFL was not the same as IHEU-NFL. Consequently, it was
declared already too late in the day to assert the same.
Resolving the issue raised by respondent hotel of whether the individual members of IHEU-
NFL have the requisite standing to question the MOA before
1
See also Atlas Fans. Inc. v. NLRC, G.R No. 142244, Nov. 18, 2002, 440 Phil. 620.
2
Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, G.R Nos. 174040-41, Sept
22,2010.
3
Davao Insular Hotel Free Employees Union-National Federation of Labor (DIHFEU-NFL).
4
Insular Hotel Employees Union-National Federation of Labor (IHEU-NFL).
411
CHAPTER FIVE
LABOR RELATIONS
the NCNIB and the Voluntary Arbitrator, the Supreme Court, invoking its ruling in Tabigue and
the provision of the NCM13 Manual of Procedure' which provides that only a voluntarily
recognized2 or certified bargaining representative has the tight to file a notice or request for
preventive mediation, declared that the individual members of the union have no authority to file
the Notice of Preventive Mediation and/or voluntary arbitration case. Clearly, therefore, the
NCMB and the Voluntary Arbitrator have no jurisdiction to entertain the Notice of Preventive
Mediation and the voluntary arbitration case. In order to acquire legal standing3 to initiate the
complaint which, in this case, was in the nature of a Notice of Preventive Mediation, the
individual employee or group of employees should be shown to have been duly authorized to
represent the SEBA. Petitioners have not, however, shown by evidence that they have been duly
authorized to represent the SEBA.
4. FIVE (5) MODES.

The SEBA of the employees in a CBU may be determined through any of the following
modes:
a) Request for SEBA certification4 (which repealed and replaced "Voluntary Recognition' 5
as a mode of securing SEBA status);
b) Certification election;8
c) Consent election,2
d) Run-off election.8
e) Re-run election.4
1
Section 3, Rule IV of the NCMB Manual of Procedure.
2
It must be noted that "Voluntary Recognition" as a mode of designating a SEBA has already been repealed and
replaced by the mode known as "Request for SEBA Certification," per Department Order No. 40-1-15, Series of
2015, issued on September 07,2015. Particularly repealed is Rule V11 [Voluntary Recognition], Book V, Rules to
Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003. [Feb. 17, 2003]. This
provision has been repealed and replaced by a new provision entitled, °REQUEST FOR SOLE AND
EXCLUSIVE BARGAINING AGENT (SEBA) CERTIFICATION', pursuant to the amendment introduced by
Section 3 of said Department Order No. 40-1-15, Series of 2015.
3
According to Joya v. Presidential Commission on Good Government, G.R. No. 96541, Aug. 24, 1993, Legal
standing' means a personal and substantial interest in the case such that the party has sustained or will sustain
direct injury as a result of the xxx act being challenged. The term "interest' is material interest an interest in issue
and to be affected by the decree, as distinguished from mere interest h the question involved, or a mere
incidental interest. Moreover, the interest of the party plaintiff must be personal and not one based on a desire to
vindicate the constitutional right of some third and unrelated party. (See Cagayan Electric Power & Trading
Company, inc. (CEPALCO) v. CEPALCO Employee's Labor Union-Associated Labor Unions-TUCP, G.R. Non.
211015 & 213835, June 20,2016).
4
This is a new mode which repealed and replaced "Voluntary Recognition", per amendment by Section 3.
Department Order No. 40415, Series of 2015 September 07, 2915], entitled "Further Amending Department
Order No. 40, Series of 2003. Amending the Implementing Rules and Regulations of Book V of the Labor Code
of the Philippines, as Amended.'
5
Formerly denominated as Section 2, Rule VI, Book V, Rules to Implement the Labor Code, amended by
6
Id.
7
ld
8
ld.
9
New Section 1(U), Rule Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-
03, Series of 2003, [Feb. 17,20031. as further added through the amendment introduced by Section 2,
Department Order No. 40-1-15,
These modes are discussed hereunder in seriatim.

a.
REQUEST FOR SEBA CERTIFICATION
(This Mode Repealed and Replaced "Voluntary Recognition")
1. NEW MODE OF DETERMINING SEBA.

Department Order No. 40-1-15, Series of 2015,' has expressly repealed the entire set of
Ibiles2 applicable to "Voluntary Recognition" in the Labor Code's Implementing Rules on Book
V and replaced it with the freshly-minted mode of securing the status of a SEBA through a
"Request for SEBA Certification" or simply 'Request."
2. JUSTIFICATION FOR THE REPEAL.

It is an iron-clad rule that in an inter-union or certification/representation dispute, the
employer is a mere bystander and should never be considered a party thereto; it has no
concomitant right to oppose in any way the petition for certification election (PCE).3 This rule
holds true irrespective of whether the PCE is filed by the employer or by a legitimate labor
organization.4 If ever one may call it as participation at all, the employer's role in such
proceedings is limited to only two (2) matters, to wit.
1) To be notified or informed of the filing of the PCE; and

2) To submit the list of employees during the pre-election conference, should the Med-
Arbiter act favorably on the PCE.3
Being the sole and exclusive concern and domain of the employees, 6 the previous mode of
allowing the employer to extend "voluntary recog-nition"7 to enable a union to become a SEBA
is a patently incongruous and self-contradiction rule that runs diametrically contrary to the
autonomous process of choosing the SEBA. For by so allowing the employer to extend
"voluntary recognition" to a union, it
Series of 2015 [September 07, 2015], entitled 'Further Amending Department Order No. 40, Series of 2003,
Amending the Implementing Rules and Regulations of Book V oldie Labor Code of the Pri4pines, as Amended."
1
Issued on September 07, 2015.
2
Particularly its Rule VII [Voluntary Recognition], Book V. Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, [Feb. 17,2003]. This provision has been repealed aid replaced by a
new provision entitled. 'REQUEST FOR SOLE AND EXCLUSIVE BARGAINING AGENT (SEBA)
CERTIFICATION", pursuant to the amendment introduced by Section 3, Department Order No. 40-1-15, Series
of 2015 [September 07, 20151, entitled "Further Amending Department Order No. 40, Series of 2003, Amending
the Implementing Rules and Regulations of Book V of the Labor Code of the Philippines, as Amended."
3
Article 271 [258-A] (Employer as Bystander), Labor Code.
4
Id.
5
Id.
6
The Heritage Hotel Manila v. Secretary of Labor and Employment G.R. No. 172132,July 23,2014.
7
As defined under the previous Rules, 'voluntary recognition' refers to the process by which a legitimate Ito( union
is voluntarily recognized by the employer as the exclusive bargaining representative or agent in a bargaining unit
and reported as such with the Regional Office. (See Section 2, Rule VII, Book V of the Rules to Implement the
Labor Code. (See Section 1 [bob], Rule I, Book V, Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, [Feb. 17,2003]).
413
CHAPTER FIVE
LABOR RELATIONS
is, in a way, no longer the employees but the employer that determines and designates the SEBA
when the latter is not supposed to have any iota of role in such determination and designation.
Although the 2015 issuance1 that repealed "voluntary recognition" failed to explain the
rationale behind it, the foregoing disquisition on the bystander role of the employer in the
certification election process is the only logical rationale for such repeal and its eventual
replacement by the mode of filing a Request for SEBA Certification by the union desiring to be
certified as a SEBA, without need to secure first the consent and voluntary recognition of the
employer. And under this new rule, the DOLE Regional Director is duty-bound to issue such
SEBA Certification simply on the basis of the requesting union's compliance with the
requirements.
3. WHERE FILED.
Any legitimate labor organization may file a Request in the DOLE Regional Office
which issued to it its Certificate of Registration2 or Certificate of Oration of Chartered Local,
3 as the case may be.4
4. DOCUMENTARY REQUIREMENTS FOR THE REQUEST.

The Request should indicate:
a. The name and address of the requesting legitimate labor organization;
b. The name and address of the company where it operates;
c. The bargaining unit sought to be represented;
d. The approximate number of employees in the bargaining unit; and
e. The statement of the existence/non-existence of other labor organization/CBA.5
The Certificate of Registration as duly certified by the president of the requesting union or
Certificate of Creation of Chartered Local as duly certified by the president of the federation of
the local chapter/chartered local is required to be attached to the Request.6
5. ACTION ON THE REQUEST.

Within one (1) day from the submission of the Request, the DOLE Regional Director should:
1
Department Order No. 40-1-15, Series of 2015, issued on September 07, 2015.
2
In the case of an independently registered union.
3
In the case et a local chapter or chartered local.
4
Section 1. Rule VII, Book V. Rules to Implement the Labor Code, as amended by Department Order
No. 40-03. Series of 2003, Feb. 17,2003], and as further amended by Section 3, Department Order
No. 404-15, Series of 2015 [September 07, 2015], entitled "Further Amending Department Order No.
40. Series of 2003, Amending the Implementing Rules and Regulations of Book V of the Labor Code
of the Philippines, as Amended." Other terms used synonymously and interchangeably with
'chartered local' are "local chapter, "local chapter, "local" or -chapter.'
5
Section 2, Rule VII, Ibid.
6
ld
a. Determine whether the request is compliant with the documentary requirements as above
enumerated' and whether the bargaining unit sought to be represented is organized or not;
and
b. Request a copy of the payroll for purposes of SEBA certification.2
If he/she finds it deficient, the DOTY Regional Director should advise the requesting union
or local chapter/chartered local to comply within ten (10) days from notice. Failure to comply
within the prescribed period shall be deemed withdrawal of the Request.3
6. THREE SCENARIOS INVOLVING A REQUEST FOR CERTIFICATION.
There are three (3) scenarios conceived under the Rules on this mode, namely:
1) Request for certification in unorganized establishment with (Jay one (1) legitimate union;
2) Request for certification in unorganized establishment with more than one (1) legitimate
labor organi7ation; and
3) Request for certification in organized establishment.
The foregoing scenarios are discussed below.
6.1. FIRST SCENARIO: Request for certification in UNORGANIZED establishment

with only one (1) legitimate union.
a. Validation process.
If the DOLE Regional Director finds the establishment unorganized with only one (1)
legitimate labor organization in existence therein, he/she should call a conference within five (5)
working days for the submission of the following:
1. The names of employees in the covered bargaining unit who signify their support for the
SEB_\. certification, provided that said employees comprise at least majority' of the
number of employees in the covered bargaining unit; and
2. Certification under oath by the president of the requesting union or local chapter/chartered
local that all documents submitted arc true and correct based on his/her personal
knowledge.4
The submission shall be presumed to be true and correct unless contested under oath by any
member of the bargaining unit during the validation conference.
1
Referring to the documentary requirement mentioned in Section 2, Rule VII, lbid.
2
Pursuant to Section 4 [REQUEST FOR CERTIFICATION IN UNORGANIZED ESTABLISHMENT
WITH ONLY ONE (1) LEGITIMATE UNION; VALIDATION PROCEEDINGS] of Rule VII, Ibid.,
(Section 3, Rule VII, Ibid.).
3
id.
4
415
CHAPTER FIVE
LABOR RELATIONS
For this purpose, the employer or any representative of the employer shall not be deemed a
party-in-interest but only as a bystander to the process of certification.1
If the requesting union or local chapter/chartered local fails to complete the requirements for
SEBA certification during the conference, the Request should be referred to the Election Officer
for the conduct of certification election.2
b. When SEBA Certification should be issued.

If the DOLE Regional Director finds the requirements complete, he/she should issue,
during the conference, a Certification as SEBA to the requesting union, granting the rights and
privileges of an exclusive bargaining agent of all the employees in the covered bargaining unit.3
The DOLE Regional Director should cause the posting of the SEBA Certification for 15
consecutive days in at least 2 conspicuous places in the establishment or covered bargaining
unit.4
c. Effect of certification.
Upon the issuance of the Certification as SEBA, the certified union or local
chapter/chartered local shall enjoy all the rights and privileges of an exclusive bargaining agent
of all the employees in the covered CBU.5
d. Certification year bar rule.

The issuance of the SEBA Certification bars the filing of a petition for certification
election (PCE) by any labor organization for a period of one (1) year from the date of its
issuance. It is only upon the expiration of this 1-year period that any other legitimate labor
organization may file a PCE in the same CBU represented by the certified SEBA for purposes of
challenging the majority status of the certified SEBA, unless a CBA between the employer and
the certified SEBA has already been executed and registered with the Regional Office.6
6.2. SECOND SCENARIO: Request for certification in UNORGANIZED

establishment with more than one (1) legitimate labor organization.
If the DOLE Regional Director finds the establishment unorganized with more than one (1)
legitimate labor organization, he/she should refer the same to
1
ld
2
pursuant ID Rule IX of the Rules.
3
Section 4.1., Rule VII, 11:4d.
4
Id.
5
Section 42., Rule VII, Ibid.
6
Id., in accordance with Rule XVII of the Rules. It must be noted that after certification, an employer is
required to bargain with the certified SEBA for a reasonable time, which is usually one yea., in the
absence of 'unusual circumstances.' The certified SEBA for that period is conclusively presumed to
represent the majority of he employees in die CEO, this presumption, however, becomes rebuttable
after such period. But the SEBA loses its majority standing because of the commission of ULP by the
employer against it, the SEBA can legally insist on its being such even after the lapse of the 1-year
period, without prejudice to the employer being prosecuted for the ULP act.
the Election Officer for the conduct of a certification election in accordance with the Rules.2
6.3. THIRD SCENARIO: Request for certification in ORGANIZED establishment.
If the Regional Director finds the establishment organized, he/she should refer the same to
the Med-Arbiter (Mediator-Arbiter) for the determination of the propriety of conducting a
certification election.3
7. CONDUCT OF CERTIFICATION ELECTION UNDER THIS MODE.

It is clear that under the three (3) scenarios cited above, the 2nd and 3rd clearly involve the
conduct of certification election. It is only in the 1st that the conduct of certification election is
not the order of the day; there will be certification election only when the requesting union or
local chapter/chartered local fails to complete the requirements for SEBA certification during the
conference, in which event, the DOLE Regional Director shall refer the Request directly to the
Election Officer, not to the Med-Arbiter (Mediator-Arbiter),' for the conduct of certification
election.5
b.
CERTIFICATION ELECTION
1. DEFINITION AND NATURE.
“Certification election" refers to the process of determining through secret ballot the SEBA
of the employees in an appropriate CBU for purposes of collective bargaining with the employer.
A certification election is conducted only upon the order of the Med-Arbiter of the BLR.6
Certification election is the most democratic method of determining the choice of the
employees of their bargaining representative.7 It is held to ensure that the employees are
properly represented in the exercise of their right to collective bargaining with their employer.'
No obstacle must be placed to the holding of a certification election for it is the statutory policy
that it should not be
1
2
Referring to Rule IX of these Rules.
3
Section 6, Rule VII, Ibid. in accordance with Rules VIII and IX of be Rules.
4
It is significant to note that a is the Mediator-Arbiter who has original jurisdiction over inter-union or
certification election/representation disputes. (See Article 232 [226], Labor Code). The Election
Officer merely conducts the certification election.
5
Section 4. Rule VII, in relation and pursuant to Rule IX of the Rules.
6
Section 1 Ill, Rule I, Book V. Rules to Implement the Labor Code, as amended by Department Order
No. 40-03, Series of 2003, [Feb. 17.20031.
7
Philippine Airlines Employees' Association v. Ferrer-Calleja, G.R No. 76673, June 22,1988.
8
FOITAF V. Norte', G.R. No, L-41937, July 6, 1976; CCLU v. Noriel, G.R. No. L-56902, Sept 21,1982.
417
CHAPTER FIVE
LABOR RELATIONS
circumvented.1 It is not a litigation proceeding in the sense in which this term is commonly
understood. It is a mere investigation of a non-adversary fact-finding character in which the
DOLE plays the part of a disinterested investigator seeking merely to ascertain the desires of the
employees as to the matter of determining which labor organization will represent the employees
in their collective bargaining with the employer.2 It is not therefore bound by the technical rules
of evidence.3 In case of doubt, the PCE should be resolved in favor of the holding of a
certification election.4
2. PARTIES THAT MAY FILE A PCE.
A PCE may be filed by:

1) Any legitimate labor organization, including:
a) A national union or federation that has issued a charter certificate to its local
chapter/chartered local. The former is filing the PCE for and on behalf of the latter; or
b) The local chapter/chartered local itself which has been issued a charter certificate by
the national union or federation;5 or
c) An independently registered union.
2) An employer, when requested to bargain collectively in a bargaining unit where no
registered CBA exists.8
a. On legitimacy requirement.
In Pizza Hut,7 it was held that the Labor Code requires that in both organized and
unorganized establishments, a PCE must be filed by a legitimate labor organization. The
acquisition of rights by any union or labor organization, particularly the right to file a PCE, first
and foremost, depends on whether or not the labor organization has attained the status of a
legitimate labor organization.8
1
Trade Unions of the Philippines and Allied Services World Federation of Trade Unions [TUPAS-
WFTU] v. Laguesma, G.R No. 102350, June 30,1994.
2
The Heritage Hotel Manila v. Secretary of Labor and Employment, OR. No. 172132, July 23, 2014.
3
Associated Labor Unions v. Ferrer-Calla, G.R. No. 82260, July 19, 1989.
4
National Federation of Labor v. The Secretary of Labor. OR. No. 104556, March 9,1998.
5
Articles 241 [234-Al, 268 [256] and 269 [257], Labor Code; See also Section 1, Rule VIII, Book V,
Rules to Implement the Labe( Code, as amended by Department Order No. 40-F-03, Series c42008
[October 30,20081, issued pursuant b R.A. No. 9481, and as further amended by Section 4,
Department Order No. 40-1-15, Series of 2015 [September 07,2015], entitled "Further Amending
Department Order No. 40, Series of 2003, Amending the Implementing Rules and Regulations of
Book V of the Labor Code of the Philippines, as Amended.'
6
Article 2701258], Labor Code: See also Section 1, Rule VIII, Book V, Rules to Implement the Labor
Code, as amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008], issued
pursuant to RA. No. 9481, and as further amended by Section 4, Department Order No.40-1-15,
Series of 2015 [September 07, 20151 Ibid.
7
Progressive Development Corp.—Pizza Hut v. Laguesma, OR No. 115077, April 18, 1997, 271 SCRA
593.
8
Tagaytay Highlands International Golf Club Inc. v. Tagaytay Highlands Employees Union-PGIVVO,
G.R. No. 142090, Jan. 22.2003.
In cases where the petition is filed by a national union or federation in letter (b) above, it
shall not be required to disclose the names of the local chapter/chartered local's officers and
members.' It shall attach to the PCE the charter certificate it issued to the local chapter/chartered
local.2 Needless to state, the national union or federation, by so filing, is acting as the agent of
the local chapter/chartered local which, for all legal intents and purposes, is considered the
principal It must be noted that a union can file a PCE even during the pendency of its
registration. This was underscored too clearly in the case of U.E. Automotive Employees v
Norie1,3 where it was ruled that a union's right to file the petition is guaranteed, even pending
the registration process, for as long as no fatal defect exists in its application for registration.
b. When employer may file the PCE.

When requested to bargain collectively, an employer may petition the BLR for a
certification election. If there is no existing certified SEBA in the unit, the Med-Arbiter of the
BLR shall, after hearing, order a certification election. 4 All certification cases shall be decided
within twenty (20) working days. The BLR shall conduct a certification election within twenty
(20) days in accordance with the rules and regulations prescribed by the DOLE Secretary.5
c. Role of employer as bystander.

In all cases, whether the PCE is filed by an employer or a legitimate labor
organization, the employer shall not be considered a party thereto with a concomitant right to
oppose the PCE. The employer's participation in such proceedings shall be limited to:
1) being notified or informed of petitions of such nature; and

2) submitting the list of employees during the pre-election conference should the Med-
Arbiter (Mediator-Arbiter) act favorably on the petition.6
3. WHERE TO FILE THE PCE.

A PCE should be filed with the DOLE Regional Office which issued the petitioning union's
certificate of registration or certificate of creation of chartered
1
See Articles 268 [256] and 269 [257], as amended by Sections 23 and 24, RA No. 6715, Mardi 21,
1989 arid Section 11, RA. No. 9481, which lapsed into law on May 25, 2007 and became effective on
June 14, 2007; As renumbered pursuant to Section 5, FLA. No. 10151, June 21, 2011 and DOLE
Department Advisory No. 01, Series of 2015 (Renumbering of the Labor Code of the Philippines, as
Amended), issued on July 21.2015.
2
Articles 268 [256] and 269 [257], labor Code.
3
G.R. No. L-44350 Nov. 25, 1976, 74 SCRA 72.
4
Article 270 [258]. Labor Code.
5
Id.
6
Section 1, Rule VIII, Book V. Rules to Implement the Labor Code, as amended by Department Order
No. 40-F-03, Series of 2008 [October 30,2008], issued pursuant to RA No. 9481, and as further
amended by Section 4, Department Order No. 40-1-15 Series of 2015 [September 07, 2015], Ibid.
419
CHAPTER FIVE
LABOR RELATIONS
local.1 The PCE shall be heard and resolved by the Med-Arbiter (Mediator-Arbiter).2
4. ON-LINE FILING OF PCE.

The Implementing Rules, as amended, now provide that at the option of the petitioner, a
PCE and its supporting documents may be filed on-line,3 that is, through the interne. The
same Rules, however, do not provide the internet link to any website where the on-line filing
may be made.4
5. LABOR OFFICIALS INVOLVED IN ELECTIONS.

a. Mediator-Arbiter hears and resolves PCEs.
The PCE is heard and resolved by the Mediator-Arbiter' (or Med-Arbiter, as this term is
used in the Labor Code).6
b. Election Officer.
The actual certification election is conducted by the "Election Officer" who is an officer of
the BLR or the Labor Relations Division in the DOLE Regional Office authorized to conduct:
1) Certification, consent, run-off or re-run elections;
2) Elections of union officers; and
3) Other forms of elections and referenda.7
6. CERTIFICATION ELECTION IN TWO (2) KINDS OF ESTABLISHMENTS.

Generally, certification election may be conducted in two (2) kinds of establishments,
namely:
(a) Unorganized establishment; and
(b) Organized establishment.
The first above is provided in Article 269 [257]; while the second, under Article 268 [256].
1 Section 2, Rule VIII, Book V: Rules to Implement the Labor Code, as amended by Department Order
No. 40-03, Series of 2003, [Feb. 17,2003], and as further amended by Section 5, Department Older
No. 40-1-15, Series of 2015 [September 07,
2015], entitled "Fuller Amending Department Order No. 40, Series of 2903, Amu ring the
Implementing Rules aid Regulations of Book V of the Labor Code of the Philippines, as Amended."
2 id.
3 id.
4 The website address of the Bureau of Labor Relations is http.//blr.dole.gov.ph/ However, a search of
this website indicates that there is no webpage therein where on-line Sing may be made. Last
accessed: October 09,2016.
5 As this tern is used in the Implementing Rules of the Labor Code.
6 Section 2, Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department Order
No. 40-03: Series of 2003, [Feb. 17, 2003] and as further amended by Section 5, Department Order
No. 40415, Series of 2015 [September 07, 2015].
7 Section 1 [o], Rule I, and Sections 2-5, Rule XII, Book V, Ibid.
An "organized establishment" refers to an enterprise where there exists a SEBA,' regardless

of whether a CBA has been concluded or not by such SEBA with the employer.
An "unorganized establishment" is a firm or company where there is no certified SEBA.2

Therefore, an establishment may still be considered unorganized:
1) Even if there are several unions in existence in one CBU3 for as long as not one of them
is duly certified as SEBA.
2) Even if one CBU has a certified SEBA but the other CBUs do not have, hence, only the
former will be considered organized but the latter shall remain unorganized.
The case of Lepanto Consolidated Mining Company v. The Lepanto Capataz Union,4 best
illustrates the situation where the supervisory employees called "capatazes" were historically
been members of the rank-and-file union [Lepanto Employees Union (LEU)], the exclusive
bargaining agent of all rank-and-file employees of petitioner's Mine Division. In giving due
course to their PCE, it was declared that the capatazes are not rank-and-file employees; hence,
they could form their own union. They were performing functions totally different from those
performed by the rank-and-file employees. The bargaining unit sought to be represented by the
appellee are the capatazes employees of the appellant There is no other labor organization of
capatazes within the employer unit except herein appellant. Thus, appellant is an unorganized
establishment in so far as the bargaining unit of capatazes is concerned.
b-i.
IN UNORGANIZED ESTABLISHMENTS
1. REQUISITES.
In cases involving a PCE filed by a legitimate labor organization in an establishment
where there is no certified SEBA, hence, unotganked, Article 269 [257]5 is clear that the Med-
Arbiter should automatically conduct a certification election upon the filing of such PCE.
The conditions and limitations that are required to be observed in the filing of PCEs in
organized establishments [infra) do not apply to certification elections in unorganized
establishments. The obvious rationale behind the law is to
1
Section 1 [1], Rule I, Book V. Rules to Implement the Labor Code, as amended by Department Oilier
No. 40-03, Series of 2093, [Feb. 17,2003].
2
Article 269 [2571, Labor Code.
3
Collective Bargaining Unit (CBU). G.R. No. 157086. Feb. 18,2013.
5
Article 269 [257] entitled "Petitions in Unorganized Establishment."
421
CHAPTER FIVE
LABOR RELATIONS
make it easy for employees to self-organize - a policy which is enunciated in the Constitution
and labor laws.
b-ii.
IN ORGANIZED ESTABLISHMENTS
1. REQUISITES.
To ascertain the will of the employees in the appropriate CBU, the Med-Arbiter, under
Article 268 [2561,1 is required to automatically order the conduct of a certification election by
secret ballot in-an organized establishment as soon as the following requisites are fully met:
1) That a PCE questioning the majority status of the incumbent bargaining agent is filed
before the Med-Arbiter within the 60-day freedom period;
2) That such PCE is verified; and
3) That the PCE is supported by the written consent of at least twenty-five percent (25%) of
all the employees in the CBU.2
1.1. FIRST REQUISITE: FILING OF PCE WITHIN THE 60-DAY FREEDOM

PERIOD.
It is only during the 60-day freedom period that a PCE may be filed by a challenging union.
It cannot be a day before or after this period. If it is filed a day earlier, then it is considered
prematurely filed; if it is a day after, then it is considered belatedly filed. The 60-day period is
strictly observed in determining the validity of the PCE.
1.2. SECOND REQUISITE: THE PCE MUST BE VERIFIED.

Per ImpkmentingIttdes,3 the PCE is required to be in writing and verified under oath by any
of the following:
1) By the president of petitioning labor organization, if filed by the independent union or

local chapter/chartered local;4
2) By the president or duly authorized representative of the federation or national union, if
filed by a federation or national union in behalf of its local chapter or affiliate;5 or
1
Article 268(256] entitled 'Representation Issue in Organized Establishments."
2
Trade Unions of the Philippines and Allied Services World Federation of Trade Unions [TUPAS-
WFTU] v. Laguesma, G.R. No. 102350. June 30,1994.
3
Section 4, Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department Order
No. 40-F-03, Series of 2008 [October 30,2008]
4
Id.
5
Id.
3) By the president or any corporate officer who is authorized by the Board of Directors, if
filed by the employer (owner).1
The minimum number of at least 25% of the employees in the CBU mentioned in the law2
need not verify the PCE. What is required is merely to attach to the verified PCE the signatures
of said number of employees.
1.3. THIRD REQUISITE:THE PCE SHOULD BE SUPPORTED BY WRITTEN
CONSENT OF AT LEAST 25% OF ALL EMPLOYEES IN THE CBU.
a. Purpose of the 25% written support.

The reason behind the 25% requirement is to ensure that the petitioning union has a
substantial interest in the representation proceedings and that a considerable number of workers
desire their representation by the said petitioning union for collective bargaining purposes.
Hence, it becomes mandatory for the Med-Arbiter to order the holding of the certification
election upon showing that 25% of the workers in the bargaining unit signify their support to the
PCE.3
b. 25% written consent not strictly enforced.

The 25% written consent requirement' is relevant if it becomes mandatory to hold a
certification election. In all other instances, discretion should ordinarily be exercised in favor of
holding a certification election.3 This means that the 25% requirement may not be strictly
enforced. Compliance therewith need not be established with absolute certainty. Thus, even if
this statutory requirement has not been strictly complied with, the Med-Arbiter is still
empowered to order the conduct of the certification election for the purpose of ascertaining
which of the contending labor organizations should be chosen as the exclusive SEBA.6 It is a
mere technicality which should be employed in determining the true will of the workers instead
of frustrating it. All doubts as to the number of employees actually supporting the holding of a
certification election should therefore be resolved by going through such procedure. It is
judicially settled that a certification election is the most effective and expeditious means of
determining which labor organization can truly represent the working force in the appropriate
CBU.7
1
Id.
2
Article 268 [256] entitled Representation Issue in Organized Establishments."
3
Philippine Association of Free Labor Unions (September Convention) v. Ferrer-Calleja, G.R. No.
79347, Jan. 26, 1989; Samahang Manggagawa rig Pacific Mills, lacy. Noriel. G.R. No. L-56588, Jan.
17, 1985. 134 SCRA 152.
4
Article 269 [2571 Labor Code; Atlas Free Workers Union v. Noriel, G.R. No. L-51905, May 26, 1981,
104 SCRA 565; FFW v. Noriel, OR. Nos. L-47182-83, Oct. 30, 1978, 86 SCRA 132.
5
National Mines and Allied Workers Union [NAMAWU-UIF] v. Luna, G.R. No. L-46722, June 15, 1978,
83 SCRA 607.
6
California Manufacturing Corporation v. Laguesma, G.R. No. 97020, June 8,1992; Eastland
Manufacturing Company, Inc. V. Node& No. L-45528, Feb. 10, 1982: Atlas Free Workers Union-
PSSLU Local v. None!, G.R W. L-51905, May 26, 1981.
7
Oriental Tin Can Labor Union v. Secretary of Labor and Employment, OR. No. 116751, Aug. 28,
1998, 294 SCRA 640: Consolidated Farms, Inc. II v. Notel. G.R. No. L-47752, July 31, 1978,84 SCRA
469,472; Philippine Association of Free Labor Unions v. BLR, G.R. No. L-42115, Jan. 37, 1976, 69
SCRA 132.
423
CHAPTER FIVE
LABOR RELATIONS
b-iii
DENIAL OF THE PCE
1. GROUNDS.
The Med-Arbiter may dismiss the PCE on any of the following grounds:
a) The petitioning union or national union or federation is not listed in the DOLE's registry
of legitimate labor unions or that its registration certificate has been cancelled with
finality;1
b) Failure of a local chapter/chartered local or national union/federation to submit a duly
issued Charter Certificate upon filing of the PCE;2
c) In an organized establishment, the failure to submit the 25% consent signature
requirement to support the filing of the PCE;3
d) Non-appearance of the petitioner for two (2) consecutive scheduled conferences before
the :Med-Arbiter despite due notice;4 and
e) Absence of employer-employee relationship between all the members of the petitioning
union and the establishment where the proposed CBU is sought to be represented.
f) Violation of the various Bar Rules [infra].
b-iv.
BAR RULES
1. WHEN TO FILE PCE; EXCEPTIONS.

In the absence of a CBA duly registered in accordance with Article 237 [231]6 of the Labor
Code, a petition for certification election (PCE) may, as a general rule, be filed at any time'
except when it is prohibited under any of the following bar rules:
(1) Contract bar rule;
(2) Statutory bar rule;
(3) Certification year bar rule;
1
Section 14(a), Rule VIII [Certification Election], Book V of the Rules to Implement the Labor Code, as
amended by Department Order No. 40-F-03, Series of 2008 October 30, 2008]. See Section 11,
paragraph II, Implementing Rules of Book V, Rule XI, as amended by D.O. No. 9; Samahan ng mga
Manggagawa sa Samma Lakas sa Industriya rig Kapatirang Hi rig Alyansa (SAMMA LIKHA) V.
Samma Corporation, G.R. No. 167141, March 13.2009.
2
Section 14(b), Rule VIII [Certification Election], Book V of the Rules to Implement of Labor Code, Ibid.
3
Section 14(, Rule VIII, Ibid.
4
Section 14(g), Rule VIII, Ibid.
5
Section 140), Rule VIII, Ibid.
6
Article 237 [231] entitled "Registry of Unions and File of Collective Bargaining Agreement."
7
Section 3, Rule VIII, Book V. Rules to Implement the Labor Code.
(4) Negotiations bar rule; or

(5) Bargaining deadlock bar rule.
These are discussed in seriatim below.

I.
Contract Bar Rule
1. REGISTERED CBA CANNOT BE DISTURBED.

Under this rule, the existence of the CBA, the contract referred to therein, bars the filing of a
PCE. Once a CBA is duly registered and validly subsisting, no PCE or any other action should
be entertained that may disturb the administration of the duly registered existing CBA.' Neither
party should terminate nor modify such agreement during its lifetime. Inter-union electoral
contests are therefore not allowed.2
2. DURATION OF THE CONTRACT BAR.

For the entire 5-year lifetime of the CBA, no PCE questioning the majority status of the
incumbent SEBA shall be entertained and no certification election shall be conducted by the
DOT.F outside of the 60-day freedom period immediately before the date of expiry of such five-
year term of the CBA.
3. PURPOSE OF RULE.
In more specific terms, the reasons for this rule are as follows:
1) Certification election may only be entertained within the 60-day freedom period. Any
PCE filed before or after the 60-day freedom period should be dismissed outright.'
2) When there exists a CBA, it is the duty of both parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement during
the 60-day freedom period and/or until a new agreement is reached by the parties.3
3) At the expiration of the 60-day freedom period, the employer should continue to
recognize the majority status of the incumbent bargaining
1
No. 40-F-03, Series of 2008 [October 30. 2008], issued pursuant to RA No. 9481, and as further
amended by Section 4, Department Order No. 40415, Series of 2015 [September 07, 2015].
2
Foamex Labor Union v. Noriel. OR. No. L-42349, Aug. 17,1976.
3
Secton 3 [d], Rule VIII. Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, [Feb. 17,2003]. TUPAS v. Inciong, OR No. L-46499, Aug. 19, 1982
4
Article 264 [254 Labor Code.
425
CHAPTER FIVE
LABOR RELATIONS
agent where no PCE challenging such majority status is filed by any other union.1
4. EXCEPTIONS.
The contract bar rule admits of several exceptions where a PCE may be validly filed
1) During the 60-day freedom period immediately prior to the expiry date of a CBA.
2) When the CBA is not registered with the BLR or any of the DOT .F Regional Offices.
3) When the CBA, although registered, contains provisions lower than the standards fixed
by law2 or illegalper se clauses.3
4) When the documents supporting the CBA's registration are falsified, fraudulent or tainted
with misrepresentation.4
5) When the CBA is not complete as it does not contain any of the mandatory provisions
which the law requires. Such kind of agreement cannot promote industrial peace as it
leaves out matters which the parties should have stipulated.5
6) When the CBA was extended during its term as when it was negotiated and entered into
prior to the 60-day freedom period. The agreement in this case is deemed hastily entered
into in order to frustrate the will of the employees in choosing their bargaining
representative.6
7) When there is a schism in the union resulting in an industrial dispute wherein the CBA
can no longer foster industrial peace. The conduct of a certification election in such a
situation becomes imperative to clear any doubt as to the real and legitimate
representative of the employees.7
1
Article 269 [257], !bid.
2
See old provision of Section 4, Rule XVI, Book V, Rules to Implement the Labor Code, as amended
by Article 1, Department Order No. 09, Sales of 1997121 June 1997].
3
See a United States case entitled: Paragon Prods. Corp., 134 NLRB 662, 666-67 (1961). For
example, a contract with an legal hot-cargo" clause vd1 not bar an election. A hot-cargo clause is one
prohibiting an employer from conducting business with some other person with whom the union has
or may have a dispute. Such clause is an Mega unfair labor practice under NLRA Section 8(e). A
union will violate the prohibition in section 8(bX4)(A) against coating an employer to 'cease doing
business with any other person' if it uses strikes or any other pressure to force an employer to accept
this type of clause.
4
See old provision of Section 4, Rule XVI, Book V, Rules to Implement the Labor Code, as amended
by Article 1, Department Order No. 09, Series of 1997 [21 June 1997].
5
Buklod ng Saulog Trasit v. Casalla, G.R. No. L-8049. May 9, 1956,99 Phil. 16.
6
Associated Trade Union v. Noriel, G.R. No. L-48367, Jai. 16.1979.
7
In the Matter of Petition for Direct Certification or Certification Election, Firestone The and Rubber
Company Employees Union v. Estrella, G.R. Nos. L-45513-14, Jan. 6, 1978,81 SCRA 49, where it
was held: "hi he case at bar, it is doubtful if any contact that may have been entered into between
respondent ALU and respondent Company will foster stability in the
8) When there is an automatic renewal provision in the CBA but prior to the date when
such automatic renewal became effective, the employer seasonably filed a manifestation
with the BLR of its intention to terminate the said agreement if and when it is established
that the SEBA does not represent anymore the majority of the workers in the bargaining
unit.1
9) When the CBA does not foster industrial stability anymore, such as where the identity of
the representative is in doubt since the employer extended direct recognition 2 to the union
and concluded a CBA therewith less than one (1) year from the time a certification
election • was conducted where the "no union" vote won. Any stability derived from such
contract must be subordinated to the employees' freedom of choice because it does not
establish the kind of industrial peace contemplated by law. Such situation obtains in a
case where the company entered into a CBA with the union when its status as exclusive
bargaining agent of the employees has not been established yet.3
10) Where the nature of the operation substantially changes between the execution of the
CBA and the filing of the PCE. Such changes include (i) a merger or consolidation of two
or more operations creating a new operation with major personnel changes and (ii) a
resumption of operations after an indefinite period of closing, with new employees.
However, a change in the number of employees due to a relocation does not affect the
contract bar rule.
11) Where the CBA is executed before any employees are hired!'
5. APPLICABILITY OF THE CONTRACT BAR RULE IN CASES OF

PREMATURELY NEGOTIATED AND CONCLUDED CBAs.
a. Premature renegotiation and conclusion of CBA.

A CBA is said to have been renegotiated and concluded prematurely if the same has been
done by the employer and the incumbent union which has yet to be re-certified as the SEBA,
prior to the advent of the 60-day freedom period or during the pendency of a PCE filed by rival
union/s. It is premature in the sense that it should have been negotiated and concluded only when
the union has already been re-certified as SEBA.
bargaining unit in view of the fact that a substantial number of the employees therein have resigned
from ALU and joined petitioner FEU. At any rate, this is a matter that must be finally determined by
means of a certification election."
1
PLDT Employees. Union v. Philippine Long Distance Telephone Company. G.R. No. L-8138, Aug.
20,1955.
2
It must be noted that 'Voluntary Recognition" as a mode of designating a SEBA has already beer,
repealed and replaced by the mode known as "Request for SEBA Certification; per Department Order
No. 40-1-15, Series of 2015, issued on September. 07.2015
3
Samahang Manggagawa sa Permex [SMP-P11LU-TUCP] v. Secretary of Labor. G.R. No. 10T792,
March 2,1998. E.g., a pre-hire agreement in the construction industry.
427
CHAPTER FIVE
LABOR RELATIONS
b. Effect on prematurely concluded CBA of PCE filed by rival union/s.

The rule, however, is significantly different if there is a PCE filed by rival union/s during
the freedom period. In this situation, the CBA renegotiated and concluded prematurely cannot be
invoked as a valid bar, under the contract bar rule, against the holding of a certification election.
Indeed, a prematurely concluded CBA, even if ratified unanimously or by a majority of the
employees of the collective bargaining unit (CBU), cannot deprive rival union/s of the right to be
certified as the new SEBA.1
c. Effect if no PCE is filed by rival union/s during freedom period.
The validity of a CBA renegotiated and concluded by the employer and the existing SEBA
before the arrival of the 60-day freedom period and even during such period is unassailable if no
PCE is filed by rival union/s. The employer and the existing SEBA can start their renegotiation
for a renewal of the CBA and accordingly conclude and register it at any time before or during
the 60-day freedom period. The fact of early renegotiation and conclusion alone will not in any
way invalidate the CBA.
II.
Statutory Bar Rule
1. RECKONING OF 1-YEAR PERIOD.

The Labor Code does not contain any provision on this rule but the Rides to Implement
the Labor Cod? embody a rule that bars the filing of a PCE within a period of one (1) year from
the date of a valid conduct of a certification, consent, run-off or re-run3 election where no appeal
on the results thereof was made.4 If there was such an appeal from the order of the Med-Arbiter,
the running of the one-year period is deemed suspended until the decision on the appeal has
become final and executory.5
This is called the statutory bar rule which finds its roots from a similar rule in the United
States. Thus, an election cannot be held in any bargaining unit in
1
Associated Labor Unions [ALU1 v. Calleja, G.R. No. 82260, July 19,1989.
2
Section 3(a), Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, [Feb. 17, 2003].
3
New Section 1(tt). Rule I, Book V, Rules IA Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, [Feb. 17,20031, and as titter added through the amendment
introduced by Section 2, Department Order No. 40-I-
15. Series of 2015 [September 07, 2015].
4
Section 14(d), Rule VIII [Certification Election], Book V of the Rules to Implement the Labor Code, as
amended by Department Order No. 40-F-03, Series of 2008 [October 30,2008].
5
Section 3(a), Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003. [Feb. 17,2003].

which a final and valid election was concluded within the preceding 12-month period.1
2. THE 1-YEAR PERIOD MAY EITHER BE A "STATUTORY BAR"OR

"CERTIFICATION YEAR BAR."
This 1-year bar may be denominated either as a "statutory bar" or "certification year bar,"
depending on whether or not a SEBA has been certified as such in the certification, consent, run-
off or re-run election. If there was none, then, it is called the "statutory bar"; if there was, then, it
is denominated as the "certification year" bar. Simply stated, if a SEBA is certified, then another
bar rule is set into motion, i.e., the certification year bar-rule discussed below.
3. THE 1-YEAR PERIOD, HOW RECKONED.

The 1-year period for "statutory/ bar" begins to run on the actual date of the prior election,
not from the date the SEBA was certified, 2 which is the reckoning date for another rule - the
"certification year ban" If the prior election results in a vote for 'No Union," the one-year period
runs from the date of that election.3
4. INAPPLICABILITY TO RE-RUN OR RUN-OFF ELECTION.

In situations where the conduct of a re-run or run-off election's becomes necessary, the
statutory bar rule does not preclude it nor apply thereto since it is required to be done and
accomplished within a certain period after the failed certification election, which period
incidentally falls within one (1) year thereafter.
Thus, a re-run election should be held:

1) In case of a tie, within ten (10) days after the posting of the notice of re-run election;
2) In case of failure of election, within six (6) months from date of declaration of failure of
election.6
And a run-off election is required to be conducted within ten (10) days from the close of the
election proceedings between the labor unions receiving the two (2) highest number of votes, if
there are no objections or challenges which, if sustained, can materially alter the results.
1
199 See 29 U.S.C. A7 159(c)(3).
2
See Robertson Bros. Department Store, Inc.. 95 NLRB 271, 273 (1951); see also Cohn Rat-Man Co.,
86 NLRB 10 in. 1(1949).
3
See Bendix( Corp., 179 NLRB 140 (1969).
4
See Robertson Bros. Dep't Store. Inc.. 95 NLRB 271,273 (1951); see also Cohn-Rall-Marx Co.. 86
NLRB 101 n. 1(1949).
5
New Section 18, Rule IX, Book V. Rules to Implement the Labor Code, as previously amended by
Department Order No. 40-03. Series of 2003, [Feb. 17, 2003], and as added by Section 16,
Department Order No. 404-15, Series of 2015 [September 07.2015].
6
This provision entitled "Effect of failure of election- should now be denominated as Section 19, Rule
IX, Book V, Rules to Implement the Labor Code, by virtue of the re-numbering ordered by Section 17,
Department Order No. 404-15, Series of 2015 [September 07, 2015J.
429
CHAPTER FIVE
LABOR RELATIONS
III
Certification Year Bar Rule
1. CERTIFICATION YEAR — THE PERIOD WHEN THE CBA NEGOTIATION

MUST COMMENCE AFTER A UNION HAS BEEN CERTIFIED AS SEBA.
Although the Labor Code does not contain any provision on when the CBA negotiation
process should start after a union is duly certified as the SEBA of the employees it seeks to
represent in a given bargaining unit, there is, however, this provision in the Rules to Implement
the Labor Code' when the Med-Arbiter (Mediator-Arbiter) may dismiss the PCE if the same is
filed within one (1) year reckoned and counted:
1) From the date the SEBA Certification is issued by the DOLE Regional Director in cases
of Request for SEBA Certification filed in an unorganized establishment with only one
(1) legitimate labor organization;2 or
2) From the date of issuance of certification as SEBA and not from the date of the conduct
of valid certification, consent, run-off or re-run3 election.4
Note must be made that No. 1 above repealed and replaced "Voluntary Recognition" as a
mode of designating a SEBA5 per Department Order No. 40-1-15, Series of 2015.6 Previously,
the 1-year period is reckoned from the date of recording of the Voluntary Recognition. However,
under this new mode, the same period is counted from the issuance of the SEBA certification
which shall have the effect of barring the filing of a PCE by any labor organization. It is only
upon expiration of this 1-year period that any legitimate labor organization may file a PCE in the
same collective bargaining unit (CBU) represented by the certified SEBA, unless a CBA
between the employer and the certified SEBA was executed and registered with the DOLF
Regional Office.7
Note must likewise be made of No. 2 above where a distinction should be made between the
reckoning of the 1-year statutory bar and the 1-year
1
Section 14(d), Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-F-03, Series of 2008 [October 30,2008].
2
Section 4.2., Rule VII, Department Order No. 40-1-15, Series of 2015 [September 07,20151.
3
"Re-run election' is a newly introduced mode of selecting or choosing a SEBA.
See Section 140), Rule VIII, Book V, Rules to Implement the Labor Code, as amended by
Department Order No. 40-F-03, Series of 2008 [October 30,2008].
5
Particularly its Rule VII [Voluntary Recognition]. Book V. Rules to implement tie Labor Code, as
amended by Department Order No. 40-03, Series of 2003, Feb. 17, 2003].
6
Issued on September 07, 2015.
7
See Section 4.2., Rule VII, Department Order No. 40-1-15, Series of 2015 [September 07, 2015],
entitled "Further Amending Department Order No. 40, Series of 2003, Amending Tie Implementing
Rules aid Regulations of Book V of the Labor Code of the Philippines, as Amended.'
certification year bar. The 1-year period in the former should be counted from the date of the
election; while the 1-year period in the latter should be from the date of certification of the
SEBA. The union will be deprived of its entitlement to the critical one (1) year as a certified
SEBA if this period is reckoned from the actual date when the certification, consent, run-off or
re-run election was conducted. The union certainly is entitled to a full twelve (12) months as
SEBA. Until the certification is made in its favor, its status as SEBA is not definite.
This rule is better known as the certification year bar rule' which is similar to the
"certification year" rule2 in the United States where it is provided that the collective bargaining
negotiations between the employer and the SEBA should begin within twelve (12) months
following the certification of the latter as SEBA. This rule thus prevents the holding of a new
certification election until the parties have had one year to bargain.3
2. EFFECT OF FAILURE TO COMMENCE CBA NEGOTIATION WITHIN THE 1-

YEAR PERIOD.
If the SEBA fails to commence the collective bargaining process within said period, its
being the SEBA may be questioned by another union through the filing of a new PCE.4 This is
best illustrated by the case of KAMPIL-KATIPUNAN v. Trajano 5 where the SEBA failed to
initiate the collective bargaining process within a period of more than 4 years thereby enabling
another union to file a new petition for certification election.6
3. INTERRUPTION OF THE RUNNING OF THE 1-YEAR PERIOD.

Where an appeal has been filed from the order of the Med-Arbiter certifying the results of the
election, the running of the one (1) year period is
1
Section 14(d), Rule VIII [Certification Election" Book V of the Rules to Implement the Labor Code, as
amended by Department Order No. 40-F-03, Series of 2008 [October 30, 20081.
2
This is also known as the 11rtebuttable Presumption of Majority Support Rule. The United States
Supreme Court approved the 'Certification Year Rule' in Brooks v. NLRB, 348 U.S. 96 (1954),
3
48 Am Jur 2d 991. In the same case of Brooks v NLRB, 348 U.S. 96 (1954), the Supreme Court held
that. absent any unusual circumstances such as defunctness or schism, an employer has a du ry to
bargain with the union certified as The bargaining agent for his employees for one year from the date
of certification,
4
Although in the United States, what is allowed to be filed a petition for decertification election and not
a petition for certification election by another union. For a more extensive discussion of Decertification
Election', please see the Notes and Comments On Article 267 [255], particularly, under the topic of
"IX DECERTIFICATION", infra).
5
Kaisahan rig Manggagawang Pilipino FAMPIL-KATIPUNAN) v. Trajano, G.R. No. 75810, Sept 9,
1991, 201 SCRA 453.
6
The stark incontrovertible fact in this owe is That from February 27, 1981 - when National Federation
of Labor Unions (NAFLU) was proclaimed the exclusive bargaining representative of all VIRON
employees - to April 11, 1985 - when KAMPIL filed its petition for certification election or a period of
more than 4 yeas. no CBA was ever executed and no deadlock ever arose from negotiations between
NAFLU and VIRON resulting in conciliation proceedings or the Sing of a valid strike notice.
431
CHAPTER FIVE
LABOR RELATIONS
deemed suspended until the decision on the appeal has become final and executory.1
IV.
Negotiations Bar Rule
1. THE CBA NEGOTIATION SHOULD BE VALIDLY COMMENCED WITHIN THE
REQUIRED PERIOD.
Under this rule,2 no PCE should be entertained from the moment the SEBA and the
employer have commenced and sustained negotiations in good faith in accordance with Article
261 [25013 of the Labor Code within the period of one (1) year4 from the date of a valid
certification, consent, run-off or re-run elections or from the date of issuance of the SEBA
Certification by the DOLE Regional Director in cases of Request for SEBA Cerqication,6 which
replaced the mode of "Voluntary Recognition. "7
2. ONCE NEGOTIATION COMMENCES, THERE IS NO MORE PERIOD OF

LIMITATION TO RECKON WITH.
Once the CBA negotiations have commenced and while the parties are engaged in this
process, no challenging union is allowed to file a PCE that would disturb the negotiation process
and unduly delay, preempt or forestall the prompt and timely conclusion thereof.
It must be noted that there is no law or rule that imposes a time limitation or cap as to when
the parties should negotiate and conclude a CBA. The parties have all the freedom and leeway to
negotiate the CBA's terms and conditions without being constrained by any time restriction. In
other words, the negotiation process may last for days, Weeks, months, even years, and during
the entire duration thereof, no PCE may be filed by any challenging union/s.
1
Section 3 ]a], Rule VIII, Book V. Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, [Feb. 17,20031.
2
As provided in Section 3(b), Rule VIII, Book V. Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, (Feb. 17,2003].
3
Article 261 [250] entitled "Procedure h Collective Bargaining."
4
Denominated as the "certification year bar."
5
Section 14(e), Rule VIII [Certification Election], Book V of the Rules to Implement the Labor Code, as
amended by Department Order No. 40-F-03, Series of 2008 [October 30.2008].
6
Only when this Request is fled h an unorganized establishment with only one (1) legitimate labor
organization will a SEBA Certification will be issued by the DOLE Regional Director. If he Request is
made is an unorganized establishment with two or more legitimate organizations or when the same is
made in an organized establishment, it is the Mediator-Arbiter who has jurisdiction and power to issue
the SEBA Certification.
7
As provided is Section 4.2., Rule VII, Department Order No. 404-15, Series of 2015 [September
07,20151. As earlier pointed out this is a new remedy that repealed and replaced voluntary
recognition as a mode of selecting a SEBA. The SEBA certification shall bar the filing of a petition for
certification election by any labor organization for a period of one (1) year from the date of its
issuance. Upon expiration of this 1-year period, any legitimate labor organ iza4ion may file a petition
for certification election is the same bargaining unit represented by the certified labor organization,
unless a CBA between the emp4oyer and the certified labor organization was executed and
registered with the Regional Office.
V.
Bargaining Deadlock Bar Rule
1. CBA DEADLOCK, MEANING.

"Collective bargaining deadlock" refers to a situation where there is a failure in the
collective bargaining negotiations between the SEBA and the employer resulting in an impasse
or stalemate.' This happens when, despite their efforts at bargaining in good faith, the parties
have failed to resolve the issues and it appears that there are no other definite options or plans in
sight to break the standoff. Simply stated, there is a deadlock when there is a complete blocking
or stoppage in the negotiation resulting from the action of equal and opposing forces.2
2. AS A BAR, THERE MUST BE A DEADLOCK IN THE CBA NEGOTIATION.

Under this rule, a PCE may not be entertained when a bargaining deadlock to which an
incumbent SEBA is a party has been submitted to conciliation, compulsory or voluntary
arbitration or has become the subject of a valid nonce of strike or lockout.3
3. RULE APPLIES EVEN IF THERE IS NO ACTUAL DEADLOCK, IF THE

CIRCUMSTANCES ARE SIMILAR TO A DEADLOCK.
The bargaining deadlock bar rule was applied in Capitol Medical Center v. Laguesma, 4 even
if no actual CBA deadlock occurred in this case: After being certified as the SEBA of the rank-
and-file employees of respondent Capitol Medical Center (CMC), private respondent union,
CMCEA-AFW,5 submitted its CB_A. proposals but CMC refused to negotiate a CBA, raising as
an issue, the legitimacy of CMCEA-AFW. Because of this, CMCEA-AFW staged a strike over
which the DOLE Secretary assumed jurisdiction and issued an order certifying the same to the
NLRC for compulsory arbitration where the said case was still pending at the time the decision
in this case was rendered.
After more than one year of not having any CBA negotiation because of the pendency of the
said certified case before the NLRC, another union, herein petitioner CMC-ACE-UFSW,6 filed a
petition for certification election among the regular rank-and-file employees of respondent CMC,
citing as one of the grounds,
1
San Niguel corporation v. NLRC, G.R. No. 99266, March 2,1999; Tayag & P. F. Jardiniano, Dictionary
of Rapine Labor Terms, p. 36; Appendix 2 [Definition of Terns], NCMB Primer on Stile, Picketing and
Lockout, 2nd Edition, December 1995.
2
Capitol Medical Center Alliance of Concerned Employees-Unified Filipino Service Workers v.
Laguesma, G.R. No. 118915, Feb. 4. 1997. 267 SCRA 503, 513.
3
Section 14(e), Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-F-03, Seeds of 2008 Alter 30.26081.
4
Capitol Medical Center Alliance of Concerned Employees v. Hon. Laguesma, G.R. No. 118915, Feb.
4.1997.
5
Capitol Medical Center Employees Association-Alliance of Filipino Waters (CMCEA-AFW).
Capitol Medical Center Alliance of Concerned Employees-Unified Filipino Service Workers (CMC-
ACE-UFSVV).
433
CHAPTER FIVE
LABOR RELATIONS
the fact that more than 12 months have elapsed since the last certification election was held
where respondent CMCEA-AFW was voted as the SEBA and yet, there has been no CBA
negotiation or bargaining deadlock between respondent CMCEA-AFW and respondent CMC
that could effectively bar its filing of the petition.
The Supreme Court, unconvinced of this argument, ruled that although there was no
bargaining deadlock between respondent CMCEA-AFW and respondent CMC before the filing
by petitioner CMC-ACE-UFSW of the petition for certification election which had been
submitted to conciliation or had become the subject of a valid notice of strike or lockout, what
happened in this case is worse than a bargaining deadlock for CMC employed all legal means to
block the certification of respondent CMCEA-AFW as the bargaining agent of the rank-and-file
employees and use it as its leverage for its failure to bargain therewith. Thus, it can only be
concluded that CMC was unwilling to negotiate and reach an agreement with respondent
CMCEA-AFW. Respondent CMC has not at any instance shown willingness to discuss the
economic proposals given by respondent CMCEA-AFW. If the law proscribes the conduct of a
certification election when there is a bargaining deadlock submitted to conciliation or arbitration,
with more reason should it not be conducted if, despite attempts to bring an employer to the
negotiation table by the certified bargaining agent, there was "no reasonable effort in good faith"
on the employer to bargain collectively.
It is thus only just and equitable that the circumstances in this case should be considered as
similar in nature to a "bargaining deadlock" when no certification election could be held. This is
also to make sure that no floodgates will be opened for the circumvention of the law by
unscrupulous employers to prevent any certified bargaining agent from negotiating a CBA. Thus,
Section 3, Rule V, Book V of the Labor Code's Implementing Rules' should be interpreted
liberally so as to include a circumstance, e.g., where a CBA could not be concluded due to the
failure of one party to willingly perform its duty to bargain collectively.
4. WHEN THE RULE DOES NOT APPLY.

The case of KAMPIL-KAT7P1INAN v. Trajano,2 illustrates the classic situation where the
bargaining deadlock bar rule was not applied. On February 27, 1981, the BLR declared
N.AFLU3 as the exclusive bargaining representative of all
1
This provision reads: "SEC. 3. When to file. — In the absence of a collective bargaining agreement submitted in
accordance with Article 237 [231] of the Code, a petition for certification election may be filed at any time.
However, no certification election may be held within one year from the date of issuance of declaration of a final
certification election result. Neither may a representation question be entertained if, before the filling of a petition
for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party had
been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. If a
collective bargaining agreement has been duly registered in accordance with Article 237 [231] of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60)days prior to
the expiry date of such agreement'
2
Kaisahan ng Maiggagawang Piapino [KAMPIL-KATIPUNAN] v. Trojan°, G.R. No. 75810, Sept 9,1991, 201
SCRA 453.
3
National Federation of Labor Unions (NAFLU).
rank-and-file employees of Viron Garments Manufacturing Co., Inc. (VIRON). More than four
(4) years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang
Pilipino KAMPIL-Katipunan filed with the BLR a PCE among the employees of VIRON. The
petition counted the support of more than thirty percent (30%) of the workers at VIRON.
NAFLU opposed the petition contending that at the time the petition was filed on April 11, 1985,
it was in process of collective bargaining with VIRON; that there was in fact a deadlock in the
negotiations which had prompted it to file a notice of strike; and that these circumstances
constituted a bar to the PCE in accordance with Section 3, Rule V, Book V of the Labor Code's
Implementing Reeks.1
The Supreme Court, however, did not apply the bargaining deadlock bar rule because of the
following
1) Prior to the filing of the PCE in this case, there was no such "bargaining deadlock ...
(which) had been submitted to conciliation or arbitration or had become the subject of a
valid notice of strike or lockout." To be sure, there are, in the record, assertions by
NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful
because of the latter's recalcitrance and unfulfilled promises to bargain collectively; but
there is no proof that it had taken any action to legally coerce VIRON to comply with its
statutory duty to bargain collectively. It could have charged VIRON with unfair labor
practice, but it did not. It could have gone on a legitimate strike in protest against
VIRON's refusal to bargain collectively and compel it to do so, but it did not.
2) The stark, incontrovertible fact is that from February 27, 1981 - when NAFLU was
proclaimed the exclusive bargaining representative of all VIRON employees - to April
11, 1985 - when KANTIL filed its PCE or a period of more than 4 years, no CBA was
ever executed and no deadlock ever arose from negotiations between NAFLU and
VIRON resulting in conciliation proceedings or the filing of a valid strike notice.
5. CAPITOL DISTINGUISHED FROM KAISAIHAN.
Capitol Medical Center is strikingly different from Kaisahan in that in the former, there was
proof that the certified SEB.A had taken an action to legally coerce the employer to comply with
its statutory duty to bargain collectively, i.e., charging the employer with unfair labor practice
and conducting a strike in protest against the employer's refusal to bargain. It is thus only just
and equitable that the circumstances therein should be considered as similar in nature to a
"bargaining deadlock" when no certification election could be held. In the latter case, there was
no proof that for more than 4 years, the bargaining agent had taken any action to legally coerce
the employer to comply with its statutory, duty to bargain collectively.
435
CHAPTER FIVE
LABOR REIATIONS
b-v.
THE DOUBLE MAJORITY RULE
1. PURPOSE OF THE RULE.

The process of certification election requires the application of the double majority rule for
the following twin purposes:
(1) To have a valid certification election; and

(2) To declare the winning union that will be certified as SEBA.
2. FIRST MAJORITY:TO BE A VALID CERTIFICATION ELECTION, AT LEAST A

MAJORITY OF ALL ELIGIBLE VOTERS IN THE BARGAINING UNIT SHOULD
HAVE CAST THEIR VOTES.
The first majority is essential to validate the certification election process itself.
According to Article 268 [256], in order to have a valid certification election, it is required that at
least a majority of all eligible voters in the bargaining unit must have cast their votes.' If less than
such majority have cast their votes, the certification election process itself is not valid and,
therefore, not one of the contending unions therein, even if chosen by the majority of the votes
cast, can be certified as the SEBA to represent the CBU.
3. SECOND MAJORITY: MAJORITY VOTE OF THE VALID VOTES

CAST REQUIRED IN ORDER TO BE CHOSEN AS THE SEBA.
After establishing the validity of the certification election process itself, the next point to
ascertain and establish is whether the petitioning union, in a single-union contest, or any of the
unions, in a multi-union election, has garnered the majority of the valid votes cast.
Under the same Article 268 [256], it is required that only "the labor union receiving the majority
of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the
unit" and under Article 267 [255], it is likewise provided that the labor organization designated
or selected by the majority of the employees in an appropriate CBU is the exclusive
representative of the employees in such unit for purposes of collective bargaining.2
4. HOW TO RECKON THE DOUBLE MAJORITY.

To illustrate the proper reckoning of the double majority, in a bargaining unit for example
composed of 100 employees, the first thing to determine is how many votes should be validly
cast in order to have a valid process of certification election. The second thing to ascertain. is
how many votes should a contending
1
Article 268 1256], Labor Code; Samahan ng Manggagawa sa Pacific Plastic v. Laguesma, G.R. No.
111245, Jan. 31,1997.
2
Isaac Per V. United Employees Welfare Association, G.R. No. L-9831, Oct 30,1957.
union garner in order to be declared winner and thus be proclaimed as the SEBA of all the
employees in the CBU.
Following the rule enunciated in Article 268 [256], in order to have a valid certification
election process, majority of the 100 employees or at least 51 employees should validly cast their
votes. In order to win the election, a contending union should be able to gamer the majority of
the valid votes cast. So, if only 51 employees cast their votes, the majority thereof or, at least, 26
employees should vote for the winning union. This illustration is necessary to dispel the notion
that in a bargaining unit composed of 100 employees, at least 51 employees should vote for the
winning union. As clearly shown in this illustration, a vote of 26 would suffice in order to be
certified as the SEBA.
5. ILLUSTRATIVE COMPUTATION.
To illustrate the proper reckoning of the double majority, in a bargaining unit composed
of 100 employees, the first MAJORITY to determine is how many votes should be validly cast in
order to have a valid process of certification election. The second MAJORITY to ascertain is
how many votes should a contending union gamer in order to be declared winner and thus be
proclaimed as the SEBA of all the employees in the CBU.
Following the double majority rule enunciated in Article 268 [256], in order to have a valid
certification election process, majority of the 100 employees or at least 51 employees should
validly cast their votes (FIRST MAJORITY).
In order to win the election, a contending union should be able to gamer the majority of the
valid votes cast. So, if only 51 employees cast their votes, the majority thereof or, at least, 26
employees should vote for the winning union (SECOND MAJORITY).
This illustration is necessary to dispel the notion that in a bargaining unit composed of 100
employees, at least 51 employees should vote for the winning union in order to be proclaimed
the SEBA. As clearly shown in this illustration, the minimum vote of 26 would suffice to be
certified as such.
6. "NO UNION" ALWAYS A CHOICE.

It is a basic principle in labor relations that the right to join a union has the concomitant right
not to join one. It is on this basis that 'No Union "is always a choice in all certification elections.
In the event that the petitioning union, in a single-union election, or any of the participating
unions, in a multi-union contest, fails to muster the majority of the valid votes cast and the 'No
Union" choice wins, no SEBA shall be proclaimed and no new PCE can be filed within one (1)
year from the conduct of the certification election pursuant to the one-year Statutory Bar Rule.
437
CHAPTER FIVE
LABOR RELATIONS
b-Vi.
CHALLENGING OF VOTES AND PROTEST
1. ELIGIBLE VOTERS.
“Eligible voter" refers to a voter belonging to the appropriate CBU that is the subject of a
petition for certification, consent, run-off or re-run election.' All employees who are members of
the appropriate CBU three (3) months prior to the filing of the petition/request shall be eligible to
vote.2
2. ELIGIBILITY OF DISMISSED EMPLOYEES TO VOTE.

An employee who has been dismissed from work but has contested the legality of the
dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the
conduct of a certification election shall be considered a qualified voter, unless his/her dismissal
was declared valid in a final judgment at the time of the conduct of the certification election.3
In the case of Yokohama Tire, 4 the petitioner posits that "employees who have quit or
have been dismissed for just causes prior to the date of the certification election are excluded
from participating in the certification election." In disagreeing to this postulation, the Supreme
Court, citing the Implementing Rules,5 ruled that dismissed employees are allowed to vote during
the certification election if the cases they filed contesting their dismissal are still pending at the
time of the election. Thus, without a final judgment declaring the legality of their dismissal,
dismissed employees are eligible or qualified voters.
Indeed, it is now well-settled that employees who have been improperly laid off but who
have a present, unabandoned right to or expectation of reemployment, are eligible to vote in
certification elections.6 Thus, and to repeat, if the dismissal is under question whereby a case of
illegal dismissal and/or unfair labor practice was filed, the employees concerned could still
qualify to vote in the elections.7
3. VENUE OF THE ELECTION.

While the posting of the notice of the certification election is expressly required to be made in at
least two (2) most conspicuous places within the company premises, there is, however, no
provision in the law nor in the Rules which requires that the certification election be conducted
within the company premises. Being a purely employee-activity, the election should, as a general
rule,
1.
Section 1 [q], Rule I, Book V. Rules to Implement the Labor Code, as amended by Department Order No. 40-F-
03, Sates of2008 [Oct. 30, 2008].
2.
Section 6 [Formerly Section 5], Rule IX, Book V. Rules to Implement the Labor Code, as amended by
Department Order No. 40-F-03, Series of 2008 [Oct 30.2008], and as further amended and renumbered by
Section 10, Department Order No. 40-1-15, Series of 2015 [September 07, 2015].
3.
Id.
4.
Yokohama Tire Philippines, Inc. v. Yokohama Employees Union, G.R. No. 159553, Dec. 10,2007.
5.
Particularly, Section 5, Rule IX of Book V of the Rules to Implement the Label' Code.
6.
Philippine Fruit and Vegetable Industries, Inc. v. Hon. Ruben D. Torres, OR. No. 92391, July 3, 1992, citing
Rothenberg on Labor Relations, p. 548.
7.
Samahang Manggagawa ng Via Mare v. Noriel, G.R. No. L-52169, June 30, 1980, 98 SCRA 507.
necessarily be held in the place of employment of the employees. Holding the election off
premises controlled by the employer may be justified such as when the employer unreasonably
refuses to make its work premises available for that purpose or has shown extreme anti-union
bias. In this eventuality, the Election Officer may exercise his/her sound discretion over the
selection of the election site. The contending unions, for their part, may mutually agree on the
venue of the election.1
4. ELECTION CAMPAIGN.
The Rules do not embody a single provision regulating election campaigns that may be
waged by the candidate-unions. Not being encumbered by any limitation in the law and unless
the contrary is mutually agreed upon by the contending unions, campaigning may be done up to
the very day of the representation election itself. In other jurisdictions, however, campaigning
may be validly prohibited in 52o-election bearing tone" with the proviso that it does not take
place while employees are standing in line to vote and does -not "substantially impair employee's
fair choice."2
That the employer is not allowed to wage any campaign against the holding of the
certification election or for or against any of the contending unions, is beyond cavil, it being
settled that the employer is a bystander in such electoral exercise3 and such act well constitutes
ULP.4 Thus, the act of the employer in distributing anti-union paraphernalia to employees on the
day of the election is held to interfere with employee's free choice, and such objectionable
conduct may be the basis for setting aside the election. 5
5. SECRECY AND SANCTITY OF BALLOTS.

To ensure secrecy of the ballot, the Election Officer, together with the authorized
representatives of the contending unions shall, before the start of the actual voting, inspect the
polling place, the ballot boxes and the polling booths.6
No device that could record or identify the voter or otherwise undermine the secrecy and sanctity
of the ballot shall be allowed within the premises, except those devices brought in by the
Election Officer. Any other device found within
1
A case in pant is Confederation of Citizens Labor Unions v. Noriel, G.R. No. L-56902. Sept 21, 1982, 116 SCRA
694. On November 6,1980, three (3) election supervisors from the Artistry of Labor and Employment arrived at
around 7 o'clock in the morning near the Redson Textile compound but they were not aimed by the security guard
to enter the company premises in spite of the heavy rah. So, after consulting through the phone with the chief, the
said election supervisors deckled to hold the certification election "outside the premises of tie company in a small
store outside of the annex building." They used as ballot box 'an improvised carton box." The union representatives
did not died to the improvised poling place and ballot bat
2
See New Yak Rehabilitation Management Care, LLC v. NLRB, 506 F.3d 1070 p.c. C. 2007); Overate Transport Co.
v. NLRB, 140 F.3d 259 (D.C. C. 1998).
3
Per Mole 271 [258-A], Labor Code.
4
Under Article 259(a) (248(a)1, Labor Code.
5
2 Sisters Food Group, Inc. and United Food and Commercial Waters International Union, Local 1167. 357 NLRB
168, Dec. 29,2011.
6
Section 8, [formerly Section 7], Rule IX, Bo* V, Rules to implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, Feb. 17,2003], and as flutter amended and re-numbered by Section 12,
Department Order No. 40-115, Seri% of 2015 [September 07, 20151, Ibid.
439
CHAPTER FIVE
LABOR RELATIONS
the premises shall be confiscated by the Election Officer and returned to its owner only after the
conduct of the certification election .1
6. PREPARATION OF BALLOTS.
The Election Officer is required to prepare the ballots in English and Filipino or the local
dialect. The number of ballots should correspond to the number of voters in the bargaining unit
plus a reasonable number of extra ballots for contingencies. All ballots shall be signed at the
back by the Election Officer and an authorized representative each of the contending unions. A
party who refuses or fails to sign the ballots waives its right to do so and the Election Officer
shall enter the fact of refusal or failure and the reason therefor in the records of the case. 2 It no
right to sign the ballots must be noted that, by virtue of the 'Employer as Bystander" rule, the
employer has
7. CASTING OF VOTES.
The voter must put a cross (x) or a check (√) mark in the square opposite the name of the
chosen union or "No Union" if he/she does not want to be represented by any union. If the voter
inadvertently spoils a ballot, he/she shall return it to the Election Officer who shall destroy it and
give him/her another ballot.3 Arty member of the CBU who is unintentionally omitted in the
master list of voters may be allowed to vote if both parties agree; otherwise, he/she will be
allowed to vote but his/her ballot should be segregated.4
8. CHALLENGING OF VOTES.
a. Grounds.
The following provision of the Rules to Implement the Labor Code contains the grounds
for challenging of votes but surprisingly, it has been ordered deleted by virtue of Department
Order No. 40-F-03, Solies of 2008:5
"An authorized representative of any of the contending unions and the enmployer
may challenge a vote before it is deposited in the ballot box only on any of the following
grounds:
a) That there is no employer-employee relationship between the voter and the employer;
or
b) That the voter is not a member of the appropriate bargaining unit which petitioner
seeks to represent"6
1
ki.
2
Section 8, Rule IX, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40.F-03,
Series of 2008 pa. 30, 20081
3
Seat 10, (formerly Section 91, Rule IX, Book V. Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, Feb. 17, 20031, at as further amended and re-numbered by Section 13,
Department Order No. 40-1-15, Series of 2015 (September 07, 20151, Ibid.
4
Id
5
Issued on October 30,2008. The amendatory provision deleting this section states: 'Section 10, Rule IX is hereby
deleted, And Section 11 of Rule IX has been an and re-numbered in this wise: 'Section 11, Rule lX is hereby
amended and re-numbered as Section 10 under Rule IX, to read as follows: Section 10. Procedure lithe
challenge of votes. -- toe (See quoted provision of this section belay.).
6
Section 10, Rule IX, Book V, Ibid.

While the said deletion is understandable considering that any challenge that concerns the
qualification and eligibility of the voters can no longer be done at the time of the election itself
but during the pre-election conference,' the validity of the two (2) grounds afore-mentioned has
not been rendered nugatory by such deletion. Not only are they proper to be raised in so
challenging the eligibility of the voter concerned but their continued validity is recognized in the
amendatory Rules which make express reference to the same grounds in regard to resolving "on-
the-spot questions. "2 [See discussion below on this topic]. This only shows that the 2 grounds
mentioned therein remain valid despite said section's deletion.
Moreover, the deletion of this section is obviously proper insofar as the right granted to
the employer to assert a challenge is concerned. This is pursuant to the same 'Employer as
Bystander" rule.
b. Procedure in challenging of votes.
The procedure in the challenging of votes has been re-crafted in Department Order No.
40-F-03, Series of 2008,3 as follows:
"Section 10. Procedure in the challenge of votes. - The ballot of the voter
who has been properly challenged during the PRE-ELECTION CONFERENCES,
shall be placed in an envelope which shall be sealed by the Election Officer in the
presence of the voter and the representatives of the contending unions. The Election
Officer shall indicate on the envelope the voter's name, the union challenging the
voter, and the ground for the challenge. The sealed envelope shall then be signed by
the Election Officer and the representatives of the contending unions. The Election
Officer shall note all challenges in the minutes of the election proceedings and shall
have custody of all envelopes containing the challenged votes. The envelopes shall
be opened and the question of eligibility shall be passed upon BY THE
MEDIATOR-ARBITER only if the number of segregated votes will materially alter
the results of the election."4
c. On-the-spot questions.
The Election Officer shall rile on any on-the-spot question relating to and raised during
the conduct of the election. In no case, however, shall the
1
See Section 10, Department Order No. 40-F-03, Series of 2008 [Oct 30, 20081, its entire provision is
quoted below. (Previously numbered Section 11, Rule. I( Book V. but ordered re-numbered under this
Department Order No. 40-F-03, Series of 2008). Further, it washed in Ace Workers' Union v.
NAMAWU, OR. No. L-18848, April 23,1963, 7 SCRA 730, that the proper time to question the 1st of
quailed voters is during the pie-election conference. It can no longer be contested during the actual
conduct of the certification election.
2
Section 11 (form Section 12), Rule IX, Book V, Rules to Implement the Labor Code., as amended by
Department Order No. 40-03, Series of 2003, [Feb. 17,2003], and as re-numbered by Department
Order No. 40-F-03, Series of 2008 [Oct 30, 20081
3
Issued on October 30, 2008.
4
Previously numbered Section 11, Rule IX, Bock V, but ordered re-numbered under Department Oder
No. 40-F-03, Series of 2008 [Oct 30, 2006]. Underscoring supplied.
441
CHAPTER FIVE
LABOR RELATIONS
Election Officer rule on an of the grounds for challenge specified in the immediately preceding
Section 10 quoted above' because the authority to rule on such grounds for challenge is vested in
the Mediator-Arbiter.2
d. Notable changes in the Rules.
Based on the foregoing disquisition on the amendments, deletions and changes in the
Rules, it is clear that:
1) The challenge to the voter should be made and asserted "during the PRE-ELECTION
CONFERENCES" and not during the election proper which was what was provided in
the old Rules, i.e., that the challenge be made right "before [the ballot] is deposited in the
ballot box. '5
2) After being challenged during the pre-election conferences, the challenged voter will still
be allowed to vote in the election, although, at the time he/she casts his/her ballot, it shall
be placed in an envelope which shall be sealed by the Election Officer in the presence of
the voter and the representatives of the contending unions. The Election Officer shall then
follow the procedural steps in processing challenged votes laid down in Section 10 of
Rule IX, as quoted above.
3) The grounds for challenging a vote remain the same, namely: (a) that there is no
employer-employee relationship between the voter and the employer; or (b) that the voter
is not a member of the appropriate bargaining unit which petitioner seeks to represent."
4) The Election Officer, in no case, has authority to rule on questions of voter eligibility
(referring to the said 2 grounds), his/her role being confined only to taking "note of all
challenges in the minutes of the election proceedings" and to "have custody of all
envelopes containing the challenged votes."
5) It is the Mediator-Arbiter who has the authority to rule on such questions of voter
eligibility.4
6) The Election Officer shall rule on any on-the pot question relating to and raised during
the conduct of the election.
1
Section 11 (formerly Section 12), Rule IX, Book V, Rules to Implement the Labor Code, as amended
by Department Order No. 40-03, Series of 2003. Feb. 17,2003J, and as re-numbered by Department
Order- No. 40-F-03, Series (1(2008 [Oct 30, 2008]. Note that reference to “Section 10” in this
provision is no longer accurate since this 2008 Department Order No. 40-F03 has deleted said
Section 10 and has re-nunbered Section 11 to Section 10.
2
See Salon 10 which was previously numbered Section 11, Rule IX, Book V, and re-numbered under
Department Order No. 40-F-03, Series of 2008 (Oct 30, 2008].
3
As previously provided, in Section 10, Rule IX, Book V of the Implementing Rules, that is: 'An
authorized representative of any of the contending unions and the employer may challenge a vote
before it is deposited he ballot box xxx'
4
But the envelopes shall be opened and the question of eligibility shall be passed upon by the
Mediator-Arbiter only if the number of segregated votes w materially alter the results of the election.
9. PROTEST.
a. Requisites for valid invocation of protest.
The following requirements, as a matter of procedure, must be complied with in order
that a protest would prosper, to wit.
1) Any party-in-interest may file a protest with the Election Officer based on "any issue
arising from [the certification election's] conduct or from its results." Such protest shall
be recorded in the minutes of the election proceedings. Protests not so raised immediately
after the last ballot cast are deemed waived.2
2) General reservation to file a protest shall be prohibited. The protesting party should
specify the grounds for protest.3
3) The protesting party must formalize its protest with the Mediator-Arbiter, with specific
grounds, arguments and evidence, within five (5) days after the close of the election
proceedings. If not recorded in the minutes and formalized within the prescribed period,
the protest should be deemed dropped4 or waived.5
b. Meaning of "party-in-interest."
It must be noted that only a "pariy-in-interest" or more appropriately, a "union-in-interest"
can file a protest. For lack of personality, it cannot therefore be filed by:
1) a labor union which is not a participant in the certification election.'6

2) a union which has disaffiliated from its mother federation and which has no independent
registration?
3) an employer, being legally treated merely as bystander.8
c. Meaning of "close of the election proceedings."
The phrase "close of the election proceedings" as used in the pertinent Implementing Rules,
refers to that period from the closing of the polls to the counting and tabulation of the votes, as it
could not have been the intention of the Implementing Rules to include in the term "close of the
election proceedings", the period for the final determination of the challenged votes and the
canvass thereof, which may
1
No. 40-03, Series of2003, Feb. 17,2003].
2
Section 13, Rule VIII, Book V. Rules to Implement the Labor Code, as previously amended and re-
numbered as Section 12 [formerly Section 13] by Department Order No. 40431, Series of 2003, Feb.
17, 20031.
3
ld.
4
Id.
5
See Samahan Ng Manggagawa Sa Pacific Plastic v. Laguesma, G.R. No. 111245. Jan. 31,1997.
6
GOP-CCP Workers Union v. CIR, G.R. No. L-33015, Sept 10, 1979, 93 SCRA 116.
7
Reyes v. Ople, GR No. L-48192, Mach 30, 1979, 89 SCRA 279.
8
See Artie 271 r258-A], Labor Code.
443
CHAPTER FIVE
LABOR RELATIONS
take a very long period. Thus, if a protest can be formalized within five (5) days after a final
determination and canvass of the challenged votes have been made, it would result in an undue
delay in the affirmation of the employees' expressed choice of a bargaining representative.'
Thus, in Philippine Fruits and Vegetable Industries, Inc. v. Hon. Ruben D. Torres, 2 the
petitioner's protest was declared filed out of time because after filing a manifestation of protest
on December 16, 1988, the election day, it only formalized the same on February 20, 1989, or
more than two (2) months after the close of the election proceedings (i.e., December 16, 1988).
Declared not persuasive was petitioner's following arguments: (1) that the term "election
proceedings" includes not only the casting of votes but necessarily includes the canvassing and
appreciation of votes cast; (2) that consequently, considering that the canvassing and
appreciation of all the votes cast were terminated only on February 16, 1989, it was only then
that the election proceedings are deemed closed; and (3) that when the formal protest was filed
on February 20, 1989, the five-day period within which to file the formal protest still subsisted
and its protest was therefore formalized within the reglementary period.
d. When 5-day period treated as mere technicality.
The 5-day period is generally strictly observed. However, in the case of National
Federation of Labor v. The Secretary of Labor,3 it was held that where a substantial number of
workers were disenfranchised since they were not notified of the date of the certification
election, coupled with the fact that the report of the Med-Arbiter confirmed to be true the
allegations of fraud and irregularities, the 5-day period should be treated as a mere technicality
which must not be allowed to prevail over the workers' welfare. As the Supreme Court stressed
in LTVN Pictures, Inc. v. Phil. Musicians Guild, 4 it is essential that the employees must be
accorded an opportunity to freely and intelligently determine which labor organization should act
in their behalf.
10. CHALLENGING OF VOTES VS. PROTEST.
The remedy of challenging of votes is different from protest in that:
1) In the former, the grounds that may be invoked concern voter eligibility,5 hence, are
substantive in nature; while in the latter, the
1
Philippine Fruit and Vegetable Industries, Inc. v. Ron. Ruben D. Tortes, G.R No. 92391, July 3,1992.
2
id.
3
GR No. 104556, March 9, 1998, 287 SCRA 599, 607.
G.R. Nos. L-12582 at L-12598, Jan. 28, 1961, 1 SCRA 132.
5
Referring to the timing 2 grounds: (a) That there is no employer-employee relationship between the
voter aid the employer, or (b) That the voter is not a member of the appropriate bargaining unit which
petitioner seeks to represent. (See Section 10, Re IX, Book V, Rules to Implement the Labor Code,
as amended by Department Order No. 40-03, Series of 2033, Feb. 17,2003].

grounds that may be asserted involve the conduct and mechanics of the election, thus, are
procedural in character.
(2) The former should be raised during the pre-election conferences but not during the election
proper; while the latter should be raised and recorded in the minutes during the election
proper and formali7ed with the Mediator-Arbiter within five (5) days after the close of the
election proceedings.
11. SPOILED BALLOTS.

"Spoiled ballot" refers to a ballot that is torn, defaced, or contains markings which can
lead another to clearly identify the voter who casts such vote.' Spoiled ballots are not reckoned to
determine majority. The earlier ruling in Allied Workers v. CIR, 2 that spoiled ballots should be
counted to determine the majority does not possess any relevance anymore, according to PAFLU
v. BLR.3
12. ABSTENTION.
“Abstention" refers to a blank or unfilled ballot validly cast by an eligible voter. It is not
considered as a negative vote. However, it shall be considered a valid vote for purposes of
determining a valid election.4
13. CONDUCT OF ELECTION AND CANVASS OF VOTES.
a. Opening and closing of precincts.
The election precincts should open and close on the date and time agreed upon during the
pre-election conference. The opening and canvass of votes should proceed immediately after the
precincts have closed. Failure of any party or the employer or his/her/their representative/s to
appear during the election proceedings should be considered as a waiver to be present and to
question the conduct thereof.;
b. Canvassing of votes.
The votes should be counted and tabulated by the Election Officer in the presence of the
representatives of the contending unions. Upon completion of the canvass, the Election Officer is
required to give each representative a copy of the
1
New Section 1(vow), Rule I, Book V, Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, Feb. 17, 20031.
2
Allied Workers Association of the Philippines v. CIR, GR. Nos. L-22580 and L-22950, June 6, 1967,
20 SCRA 364.
3
PAFLU v. Bureau of Labor Relators, OR No. L-43760, Aug. 211976.
4
New Section 1(a), Rule I, Book V, Rules to Implement the labor Code, as amended by Department
Order No. 40-03, Series of 2003, [Feb. 17, 2003], aid as further added through be amendment
introduced by Section 2, Department Order No. 40-115, Series of 2015 [September 07, 20151,
entitled "Further Amending Department Order No. 40, Series of 2003, Amending the Implementing
Rules and Regulations of Book V of the Labor Code of the Philippines, as Amended."
5
Section 14 piney Section 15], Rule IX, Book V, Rules to Implement the Labor Code, as amended by
445
CHAPTER FIVE
LABOR RELATIONS
minutes of the election proceedings and results of the election. The ballots and the tally
sheets shall be sealed in an envelope and signed by the Election Officer and the
representatives of the contending unions and transmitted to the Med-Arbiter, together with
the minutes and results of the election within twenty-four (24) hours from the completion of
the canvass. Where the election is conducted in more than one region, consolidation of
results should be made within fifteen (15) days from the conduct thereof.1
C.
CONSENT ELECTION
1. DEFINITION.
"Consent election" refers to the process, voluntarily and mutually agreed upon by the
contending unions, of determining through secret ballot the SEBA of the employees in an
appropriate CBU for purposes of collective bargaining with the employer. It is conducted with or
without the intervention of the DOLF.2
2. CONSENT ELECTION VS. CERTIFICATION ELECTION.

Consent election is but a form of certification election. They may be distinguished from each
other in the following manner:
1.) The former is held upon the mutual agreement of the contending unions; while the latter
does not require the mutual consent of the parties as it is conducted upon the order of the
Med-Arbiter (Mediator-Arbiter).3
2.) The former may be conducted with or without the control and supervision of the DOLE;
while the latter is always conducted under the control and supervision of the DOLE.4
3.) The former is being conducted as a voluntary mode of resolving labor dispute; while the
latter, although non-adversarial, is a compulsory method of adjudicating a labor dispute.
4.) The former is given the highest priority; while the latter is resorted to only when the
contending unions fail or refuse to submit their representation dispute through the
former.5 This is so because under the Implementing Rules, as amended, 6 even in cases
where a PCE is filed, the Med-Arbiter (Mediator-Arbiter), during the preliminary
conference and hearing thereon, is tasked to determine the “possibility of a consent
election." It is only when the contending unions fail to agree to the conduct of a consent
election during the preliminary conference that the Med-
1
Section 13 [formerly Section 14], Rule IX, Book V, Ibid.
2
Section 1[h], Rule Book V, Rules to implement the Labor Code, as amended by Department Oder No.
40-03, Series of 2003, [Feb. 17, 2003]; Algire v. De Mesa, G.R. No. 97622, Oct. 19, 1994, 237 SCRA
647.
3
See Section 1[h], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, Feb. 17, 20031
4
id.
6
Section 3, Rule VIII, Book V, Riles to Implement the Labor Code.
7
Section 9, Rile VIII, Book V, Riles to Implement the Labor Code, as amended by Department Order
No. 40-03, Series of 2003, [Feb. 17,2003].
Arbiter (Mediator-Arbiter) will proceed with the process of certification election by conducting
as many hearings as he may deem necessary up to its actual holding. But in no case shall the
conduct of the certification election exceed 15 days from the date of the scheduled preliminary
conference/hearing after which time, the PCE is considered submitted for decision.1
(5) The former necessarily involves at least two (2) or more contending unions; while the
latter may only involve one (1) petitioner union.
(6) The former may be conducted in the course of the proceeding in the
latter or during its pendency.
d.
RUN-OFF ELECTION
1. ELEMENTS.
A "run-off election "may only be conducted under the following elements:
a) There are three (3) or more unions competing in a certification or consent election;
b) None of the contending unions garnered the majority of the valid votes cast;
c) But the total number of votes for all contending unions, if added, is at least fifty percent
(50%) of the number of valid votes cast;
d) If the above three (3) elements are present, a run-off election will be conducted between
the labor unions receiving the two (2) highest number of votes in such certification
election or consent election.2 The third union and the others, if any, will no longer be
allowed to participate in such election. And for obvious reason, the choice of 'No Union"
should no longer be included in the run-off election.3
2. WHEN TO BE CONDUCTED.
If the above conditions that justify the conduct of a run-off election are present and there are
no objections or challenges which, if sustained, can materially alter the election results, the
Election Officer should motu proprio conduct a run-off election within ten (10) days from the
close of the election proceeding between the labor unions receiving the two highest number of
votes.4
3. ILLUSTRATION.
To illustrate, in a certification election involving four (4) unions, namely: Union A, Union B,
Union C, and Union D, where there are 100 eligible voters who validly cast their votes, and the
votes they each garnered are as follows: Union
1
Section 11, Rule VIII, Book V, Ibid.
2
Article 268 [256], Labor Code; Section 1 [ss], Rule I, Boa V, Rules to Implement the Labor Code, as
amended by Department Order No. 40-03, Series of 2003, [Feb. 17,2003].
3
Id.
4
Section 1, Rule X. Book V, Ibid.
447
CHAPTER FIVE
LABOR RELATIONS
A —35; Union B — 25; Union C — 10; Union D - 15; and No Union - 15, a runoff election may
be conducted between Union A and Union B because:
1.) Not one of the unions mustered the majority vote of 51 votes but Union A and Union B
got the first two highest number of votes;
2.) If all the votes for the contending unions are added up, it will result in at least 50% of the
valid votes cast (Union A — 35; Union B — 25; Union C — 10; Union D - 15 for a total
of 85 or 85%); and
3.) There are no objections or challenges which, if sustained, can materially alter the results
of the election.
e.
RE-RUN ELECTION
1. BELATED ENUNCIATION OF RULE ON RE-RUN ELECTIONS,

This mode of choosing the SEBA is not expressly provided in the Labor Code nor in the
original rendering of its implementing rules. It was only in 2015 that an issuance of the DOLE
Secretary has introduced this term for the first time as an amendment to the Rides to Implement
the Labor Code and defines it as follows:
"Re-nm election” refers to an election conducted to break a tie between

contending unions, including between 'no union' and one of the unions. It shall
likewise refer to an election conducted after a failure of election has been
declared by the Election Officer and/or affirmed by the Mediator-Arbiter."'
2. GROUNDS CITED IN THE RULES FOR RE-RUN ELECTION.
Based on the above-quoted Reek, there are two (2) situations that justify the conduct of a re-
run election, to wit:
(1) To break a tie; or

(2) To cure a failure of election.
3. A THIRD GROUND BASED ON JURISPRUDENCE.

A re-run election is obviously in the nature of a corrective action meant to cure a
seriously defective and distorted certification election. Consequently, a 3rd ground that may be
cited as would justify the conduct of a fair re-run election is when the certification, consent or
run-off election has been invalidated or nullified due to certain serious irregularities that have
been committed during the conduct thereof, such as, inter alai, disenfranchisement of the voters,
lack of secrecy in the voting, fraud or bribery or acts of terrorism, force, threat and intimidation
employed by any of the contending unions or the employer. Such invalidation
1
Underscoring supplied; New Section 1(tt), Rule I, Book V. Rules to Implement the Labor Code, as
amended by Department Order No. 40-03, Series of 2003, Feb. 17, 20031 .
would necessitate the conduct of a re-run election among the contending unions to determine the
true will and desire of the employees-electorate.1
Philippine jurisprudence has not exactly denominated the holding of another certification
election after the invalidation of the first as "re-run" election but the same may well be deemed
the correct terminology to describe it. Two cases may be cited as good examples of cases where
"re-run" election was ordered, to wit
(1) Confederation of Citizens Labor Unions v. Noriel;2 and
(2) National Federation of Labor v. The Secretary of Labor.3
In ordering another run-off election in Case No. 1 (Confederation) above, the High Court
ratiocinated:
"We hold that the certification election is invalid because of certain
irregularities such as that (1) the workers on the night shift (ten p.m. to six a.m.) and
some of those in the afternoon shift were not able to vote, so much so that out of
1,010 voters only 692 voted and about 318 failed to vote (p. 88, Rollo); (2) the
secrecy of the ballot was not safeguarded; (3) the election supervisors were remiss in
their duties and were apparently 'intimidated' by a union representative, and (4) the
participating unions were overzealous in wooing the employees to vote in their favor
by resorting to such tactics as giving free tricycle rides and T-shirts.
"The purpose of a certification election is to give the employees 'true
representation in their collective bargaining with an employer' (51 C.J.S. 969). That
purpose was not achieved in the run-off election because many employees or union
members were not able to vote and the employer, through apathy or deliberate intent,
did not render assistance in the holding of the election."
In the same vein, the re-run election in Case No. 2 (National Federation of Labor) above,
was ordered by the Court on the basis of the following ratiocination:
"The complaint in this case was that a number of employees were not able to
cast their votes because they were not properly notified of the date. They could not
therefore have filed their protests within five (5) days. At all events, the Solicitor
General states that the protests were not filed within five (5) days, and is a mere
technicality which should not be allowed to prevail over the workers' welfare. As
this Court stressed in LVN Pictures, Inc. v. PhiL Musicians Gaild,4 it is essential
that the employees must be accorded an opportunity to freely and intelligently
determine which labor organization shall act in their behalf. The workers in this
case were denied this opportunity. Not only were a substantial number of them
disfranchised, there were, in
1
See Confederation of Citizens Labor Unions v. Nadel, G.R. No. L-56902. September 21, 1982, 116
SCRA 694.
2
G.R, No. L-56902. Sept. 21,1982 116 SCRA 694.
3
GR. No. 104556, March 9, 1998, 287 SCRA 599, 607.
4
1 SCRA 132(1961).
449
CHAPTER FIVE
LABOR RELATIONS
addition, allegations of fraud and other irregularities which put in question the
integrity of the election. Workers wrote letters and made complaints protesting the
conduct of the election. The Report of Med-Arbiter Pura who investigated these
allegations found the allegations of fraud and irregularities to be true.
"In one easel this Court invalidated a certification election upon a showing
of disfranchisement, lack of secrecy in the voting and bribery. We hold the same in
this case. The workers' right to self-organization as enshrined in both the
Constitution and Labor Code would be rendered nugatory if their right to choose
their collective bargaining representative were denied. Indeed, the policy of the
Labor Code favors the holding of a certification election as the most conclusive way
of choosing the labor organization to represent workers in a collective bargaining
unit. In case of doubt, the doubt should be resolved in favor of the holding of a
certification election."
4. VARIOUS SITUATIONS WHERE A TIE MAY OCCUR.
Based on the above-quoted provision of the Implementing Rules, the tie contemplated therein
which would justify the holding of a re-run election may occur in any of the following scenarios:
(1) At least 2 unions are involved and a tie in the votes occurred:
a) Between the 2 contending unions and the 'No Union ' 2 choice did not gamer the
majority; or
b) Between 1 of the 2 unions and the 'No Union "choice.
(2) At least 3 unions are involved and a tie in the votes occurred:
a) Between and among 2 or more or all of the contending unions and the “No Union
"choice did not muster the majority
b) Between and among 1 or more of the contending unions and the 'No Union" choice.
(3) A tie in the votes occurred between the 2 unions involved in a run-of election.
It bears stressing that if the 'No Union" choice garners the majority of the votes and thus wins
the certification or consent election, a tie between and among the contending unions will no
longer matter. This means that the employees in the CBU do not want any SEB.A to represent
them. Consequently, no CBA negotiation will transpire
1
Citing Confederation of Citizens Labor Unions v. Noriel, G.R. N. L-56902 September 21, 1982, 116
SCRA 694.
2
It must be stressed that the "No Union° choice is always one ci the choices in all certification elections,
with the sole exception of run-off election, for obvious reason.
In any of the three (3) situations mentioned and discussed above, the Election Officer
should immediately notify the parties of a re-run election. The Election Officer should cause the
posting of the notice of re-run election within five (5) days from the certification, consent or run-
off election. The re-run election shall be conducted within ten (10) days after the posting of
notice.1
The choice receiving the highest votes cast during the re-run election shall be declared the
winner and shall be certified as the SEBA accordingly.2
5. RULE IN CASE OF FAILURE OF ELECTION.

In failure of election, the number of votes cast in the certification or consent election is
less than the majority of the number of eligible voters and there are no challenged votes that
could materially change the results of the election. 3 For example, in a DIU composed of 100
employees, the majority of 100, which is 51, should participate in the election; otherwise, if less
than 51 employees have participated, there is a failure of election.
A failure of election shall not bar the filing of a motion for the immediate holding of
another certification or consent election, now to be called re-run election, within six (6) months
from the date of declaration of failure of election.4
6. RUN-OFF ELECTION VS. RE-RUN ELECTION.

These two kinds of election may be distinguished from each other in that a run-off election is
usually required if no choice on the ballot receives a majority of valid votes cast in an election
involving 3 or more labor organizations, provided that the total number of votes for all
contending unions is at least 50% of the number of valid votes cast.5 Consequently, the run-off
election will be conducted between the 2 choices receiving the highest number of votes and the
one receiving the next highest vote number. In certain exceptional cases, however, where all the
3 or more or all the choices receive the same number of votes - no run-off election should be
conducted; the "inconclusive" election should be declared a nullity and a re-run election should
be held instead.
1
NEW Section 18, Rule IX Book V, Rules to Implement the Labor Code, as previously amended by
Department Order No. 40-03, Series c12003, Feb. 17, 2003].
2
Id
3
Section 16 [formerly Section 17], Rule IX, Bock V. Rules to Implement the Labor Code, as amended
by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], and as re-numbered by Department
Order No. 40-F-03, Series of 2038 [Oct 30, 2008].
4
This provision entitled 'Effect of failure of election should now be denominated as Sedan 19, Rule DC,
Book V, Rules to Implement the Labor Code, by virtue of the re-numbering ordered by Section 17,
Department Order No. 40-1-15, Series of 2015 [September 07, 20151.
5
Article 268 R56], Labor Code; Section 1 [ss], Rule I, Book V, Rules to Implement t the Labor Code, as
amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003].
151
CHAPTER FIVE
LABOR RELATIONS
D.
RIGHTS OF LABOR ORGANIZATIONS
1. RIGHTS UNDER THE LABOR CODE.
The Labor Code enumerates the following rights of legitimate labor organizations:
"Article 251 1242]. Rights of Legitimate Labor Organizations. — A legitimate labor

organization shall have the right
a) To act as the representative of its members for the purpose of collective bargaining;
b) To be certified as the exclusive representative of all the employees in an appropriate
bargaining unit for purposes of collective bargaining
c) To be furnished by the employer, upon written request, with its annual audited
financial statements, including the balance sheet and the profit and loss statement,
within thirty (30) calendar days from the date of receipt of the request, after the union
has been duly recognize& by the employer or certified as the sole and exclusive
bargaining representative of the employees in the bargaining unit, or within sixty (60)
calendar clays before the expiration of the existing collective bargaining agreement,
or during the collective bargaining negotiation;
d) To own property, real or personal, for the use and benefit of the labor organization
and its members;
e) "1"o sue and be sued in its registered name; and
f) To undertake all other activities designed to benefit the organization and its members,
including cooperative, housing, welfare and other projects not contrary to law.
"Notwithstanding any provision of a general or special law to the contrary, the income
and the properties of legitimate labor organizations, including grants, endowments, gifts,
donations and contributions they may receive from fraternal and similar organizations, local or
foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free
from taxes, duties and other assessments. The exemptions provided herein may be withdrawn
only by a special law expressly repealing this provision."2
1
Voluntary recognition as a mode of designating a SEBA has been repealed arid replaced by the latest
mode of Requesting SEBA Certification as provided ii Section 4.2., Rule VII, Department Order No.
40415, Series of 2015 [September 07, 2015].
2
As amended by Section 17, RA No. 6715, March 21, 1989; As renumbered pursuant to Section 5, RA
No. 10151, June 21, 2011 arid DOLE Department Advisory No. 01, Series of 2015 (Renumbering of
the Labor Code of the Philippines, as Amended), issued on July 21, 2015.
452 REVIEWER ON LABOR LAW
2. TOPICS UNDER THE SYLLABUS.
The 2019 Syllabus prescribes only the following two (2) subject matters under this topic
of "RIGHTS OF LABOR ORGANIZATIONS":
1. CHECK OFF, ASSESSMENTS, AND AGENCY FEES; and

2. COLLECTIVE BARGAINING.
These are discussed below in seriatim.

1.
CHECK-OFF, ASSESSMENTS, AND AGENCY FEES
a.
CHECK-OFF
1. CHECK-OFF, MEANING.
Broadly, the term "check-of means a method of deducting by the employer from the
employee's pay at prescribed periods, any amount due for fees, fines or assessments.' Strictly
speaking, "check-off"is a process or device whereby the employer, on agreement with the
union certified as the SEBA, or on prior authorization from its employees, deducts union dues
or agency fees from the latter's wages and remits them directly to the union.2
2. RIGHT TO CHECK-OFF, AVAILABLE ONLY TO THE SEBA.

The right to check off of union dues or agency fees as above-described is available only
to the SEBA. The minority union, not being the collective bargaining agent, has no such right.
The employer therefore is not under any legal obligation to check-off any union dues and
assessments for the minority union.
3. TWO (2) KINDS OF CHECK-OFF.

Based on the above legal description of this term, "check-or may thus refer to two (2) things,
to wit.
1.) Collection of union dues, special assessments and fees (such as attorney's fees,
negotiation fees or any other extraordinary fees)3 by the SEBA from its members; and
1
A L. Arnmen Transportation Co., Inc. v. Bicol Transportation Employees Mutual Association, GR No. L-
4941, July 25, 1952,91 PhiL649.
2
Gabriel V. The Hon. Secretary of Labor and Employment G.R No. 115949, Math 16,2000.
3
See paragraph (o) of Article 25012411 Labor Code which provides: °Other than for mandatory
activities under the Code, no special assessment, attorney's fees, negotiation fees or any other
extraordinay fees may be checked off from any amount due to an employee without an individual
written authorization duty signed by the employee. The authorization should specifically state IN
amount purpose and beneficiary of the deduction'
453
CHAPTER FIVE
LABOR RELATIONS
(2) Collection of ageng fees from non-members of the SEBA but covered by and
included in the collective bargaining unit (CBU) who accept the benefits provided
in the Collective Bargaining Agreement (CBA).
4. PRINCIPAL DISTINCTION.
The first kind mentioned above requires for its validity, the execution by the employees
of individual written authorization which should specifically state the amount, purpose and
beneficiary of the deduction;1 but the second kind does not require any such authorization since
the law2 itself recognizes and allows it upon the non-SEBA member's acceptance of benefits
resulting from the CBA.3
5. CHECK-OFF OF AGENCY FEES FROM NON-MEMBERS OF SEBA.

In case a CBA is successfully negotiated and concluded by the SEBA, check-off from non-
members thereof who accept the benefits flowing from the CBA is authorized under paragraph
[e] of Article 259 [248] of the Labor Code. Thus, such non-members may be assessed a
reasonable agency fee equivalent to the dues and other fees paid by members of the SEBA. The
individual written authorization required under the law* is not necessary to effect such check-off.
6. SOME PRINCIPLES ON CHECK-OFF.

 System of check-off primarily for the benefit of the SEBA and only indirectly for the
individual employees.5
 Check-off is obligatory on the part of employer.6
 Check-off, although an extra burden to the employer, is allowed by law.7
 Employer has the obligation to remit directly to the union whatever it has checked-off.
This is so because the right to union dues deducted pursuant to a check off pertains to the
local union which continues to represent the employees under the terms of a CBA, and
not to the mother union from which it has disaffiliated.8
1
lbid
2
See 3'4 sentence of the 3-sentence paragraph [e] of Artie 259 [248] of the Labor Code.
3
Holy Cross of Davao College, Inc. V. Joaquin, G.R. No. 110007, Oct 18, 1996, 263 SCRA 358; 331 Phil. 680.
4
Paragraph [o] of Article 250 [241] of the Labor Code Which provides: 'Artie 250 [241]. Rights and Conditions of
Membership in a Labor Organization. — The following are the rights and conditions of membership in a labor
organization: ix< (o) Other than for mandatory activities under the Code, no special assessments, attorneys fees,
negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without
an individual written authorization duly signed by the employee. The authorization should specifically state the
amount purpose and beneficiary of the deduction."
5
Gabriel v. The Ron. Secretary of Labor and Employment, G.R. No. 115949. March 162000. 384 Phil. 797, 804;
Holy Cross of Davao College, Inc. V. Joaquin, supra; ABS-CBN Supervisors Employees Union Members v. ABS-
CBN Broadcasting Corp., G.R. No. 106518, March 11, 1999.
6
Id.; See paragraphs [g], [n] and [o] of Article 250 [241 on check-off of union dues and special assessments and
paragraph (e) of Article 259 [248] of the Labor Code on agency fees.
7
A. L. Ammen Transportation Co., Inc. v. Bicol Transportation Employees Mutual Association, G.R. No. L-4941,
July 25,195291 Phi. 649.
8
Volkchel Labor Union v. BLR, OR No, L-45824, June 19, 1985.
• SEBA has the obligation to inform the employer of the names of employees subject of the
check-off and the particulars of the deductions to be made.'
• Employer is not liable to pay to the SEBA for unchecked-off union dues and asses sments.2
b.
ASSESSMENTS
1. RIGHT OF UNION TO COLLECT DUES AND ASSESSMENTS.

All unions are authorized to collect reasonable amounts of:
1. membership fees;
2. union dues;
3. assessments;
4. fines;
5. contributions for labor education and research, mutual death and hospitalization benefits,
welfare fund, strike fund and credit and cooperative undertakings;3 and
6. agency fees.4
2. REQUISITES FOR VALIDITY OF UNION DUES AND SPECIAL ASSESSMENTS.

The following requisites must concur in order for union dues and special assessments for the
union's incidental expenses, attorney's fees and representation expenses to be valid, namely:
a) Authorization by a written resolution of the majority of all the members at a general

membership meeting duly called for the purpose;
b) Secretary's record of the minutes of said meeting; and
c) Individual written authorizations for check-off duly signed by the employees concemed.5
3. ASSESSMENT FOR ATTORNEY'S FEES, NEGOTIATION FEES AND SIMILAR

CHARGES.
As far as attorney's fees, negotiation fees or similar charges are concerned, the rule is that no
such fees and charges of any kind arising from the negotiation or
1
Holy Cross of Davao College, Inc. v. Joaquin, G.R No. 110007, Oct 18, 1996, 263 SCRA 358; 331
Phil. 680.
2
Id.
3
Articles 250(o) [241(o)] and 292(a) [277(a)], Ibid.; Section 1, Rule XIII, Book V, Rules to Implement the
Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,20031.
4
Article 259(e) [248(e)], Labor Code.
5
Article 241[o], Labor Code; Gabriel v. The Hon. Secretary of Labor and Employment supra, ABS-CBN
Supervisors Employees Union Members v. ABS-CBN Broadcasting Corp., supra
455
CHAPTER FIVE IABOR RELATIONS
conclusion of the CBA shall be imposed on any individual member of the contracting union.
Such fees and charges may be charged only against the union funds in an amount to be agreed
upon by the parties. Any contract, agreement or arrangement of any sort to the contrary is
deemed null and void.' Clearly, what is prohibited is the payment of attorney's fees, negotiation
fees or similar charges when it is effected through forced contributions from the workers from
their own funds as distinguished from the union funds.2
4. INDIVIDUAL WRITTEN AUTHORIZATION, WHEN REQUIRED.

The law strictly prohibits the check-off from any amount due an employee who is a member
of the union, of any union dues, special assessment, attorney's fees, negotiation fees or any other
extraordinary fees other than for mandatory activities under the Labor Code, without the
individual written authorization duly signed by the employee. Such authorization must
specifically state the amount, purpose and beneficiary of the deduction. 3 The purpose of the
individual written authorization is to protect the employees from unwarranted practices that
diminish their compensation without their knowledge or consent.4
5. INDIVIDUAL WRITTEN AUTHORIZATION, WHEN NOT REQUIRED.
In the following cases, individual written authorization is not required:

a) Assessment from non-members of the SEBA of "agency fees" which should be
equivalent to the dues and other fees paid by members of the SEBA, if such non-
members accept the benefits under the CBA.5
b) Deductions for fees for mandatory activities such as labor relations seminars and labor
education activities.6
c) Check-off for union service fees authorized by law.7
d) Deductions for withholding tax mandated under the National Internal Revenue Code
(NIRC).
e) Deductions for withholding of wages because of employee's debt to the employer which
is already due.8
f) Deductions made pursuant to a judgment against the worker under circumstances where
the wages may be the subject of attachment or
1
See Article 241 in relation to paragraph 113] of Article 222 of the Labor Code.
2
Gabriel v. The Hon. Secretary of Labor and Employment supra; Vengco v. Trio, G.R. No. 74463, May
5, 1989; S1 Inc. Services, Inc. v. NLRC, G.R. No. 117418, Jan. 24, 1996, 252 SCRA 323; Palacol v.
Ferrer-Calleja, G.R. No. 85333, Feb. 26, 1990, 182 SCRA 710.
3
Article 241 [o], Labor Code.
4
Galvadaes v. Trajano, G.R No. 70367, Sept 15,1986, 144 SCRA 138.
5
Article 259(e) [248(e)j, Labor Code.
6
Article 241 [o], Ibid.
7
RCPI v. Secretary of Labor, G.R No. 77959, Jan. 9, 1989.
8
Article 1706, Givi Code.
execution but only for debts incurred for food, clothing, shelter and medical attendance.1
g) Deductions from wages ordered by the court.
h) Deductions authorized by law such as for premiums for PhilHealth, social security, Pag-
IBIG, employees' compensation and the like.
6. MINORITY UNION HAS NO RIGHT TO DEMAND CHECK-OFF FROM ITS

MEMBERS.
The obligation on the part of the employer to undertake the duty to check-off union dues
and special assessments holds and applies only to the SEBA and not to any other union/ s
(called `Minority Union/ s”). This is clear from the manner by which the Supreme Court
described check-off in the case of Hoy Cross of Davao College, Inc. v. Joaquin, 2 that it is on
the basis of the agreement with the union which is recognized as the proper bargaining
representative that the employer is obligated to perform its task of checking off union dues or
agency fees. When stipulated in a CBA, or authorized in writing by the employees concerned
- the Labor Code and its Implementing Rules recognize it to be the duty of the employer to
deduct sums equivalent to the amount of union dues from the employees' wages for direct
remittance to the union, in order to facilitate the collection of funds vital to the role of the
union as representative of the employees in the bargaining unit if not indeed to its very
existence.
7. SOME PRINCIPLES ON UNION DUES AND ASSESSMENTS.

 Check-off for a special assessment is not valid after the withdrawal of the individual
written authorizations.3
 Unlike in authorization for union dues and assessments, disauthorization does not
require that it be written individually. The fact that the disauthorizations were collective
in form consisting of randomly procured signatures and under loose sheets of paper, is
of no moment for the simple reason that the documents containing the disauthorizations
have the signatures of the union members. Such retractions were valid. There is nothing
in the law which requires that the disauthorizations must be in individual form.4
 The right of the incumbent SEBA to check off and to collect dues is not affected by the
pendency of a representation case or an intra-union dispute.5
 Approval of the union dues and assessments by the majority of all the members of the
union is required.6 The Labor Code and the Rules to
1
Article 1708, Ibid.
2
GR. No. 110007, Oct. 18, 1996, 263 SCRA 358; 331 Phil. 680.
3
Palacol v. Feirer-Calla, G.R. No. 85333, Feb. 26, 1990, 182 SCRA 710-711.
Palaool v. Ferrer-Calleja, [supra.
5
See old provision of Section 1, Rule XVIII, Book V, Rules to Implement the Labor Code, as amended
by Article 1, Department Order No. 09, Series of 1997 [21 June 1997.
6
Stellar Industrial Services, Inc. v. NLRC, G.R. No. 117418, Jan. 24, 1996, 252 SCRA 323; Palacol v.
Calleja, etc., supra.
7
Article 241 [n] thereof.
457
CHAPTER FIVE
LABOR RELATIONS
Implement the Labor Code' disallow a deduction for special assessment which was passed by
a mere board resolution of the directors, and not by the majority of all the members of the
union.
1. LEGAL BASIS.
The concept of agency fees is provided for under the 3rd sentence of paragraph [e] of Article
259 [24812 of the Labor Code which pertinently states: "(e) xxx Employees of an appropriate
bargaining unit who are not members of the recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the dues and other fees paid by members of the
recognized collective bargaining agent, if such nonunion members accept the benefits under the
collective bargaining agreement Provided, that the individual authorization required under
Article 250 [241], paragraph (o) of this Code shall not apply to the nonmembers of the
recognized collective bargaining agent[.]"
2. NATURE OF AGENCY FEES.

The SEBA which successfully negotiated the CBA with the employer is given the right to
collect a reasonable fee called "agency fee" from its non- members - who are employees covered
by the collective bargaining unit (CBU) being represented by the SEBA - in case they Accept the
benefits under the CBA. It is called "agency fees" because by availing of the benefits of the
CBA, they, in effect, recognize and accept the SEBA as their "agent" as well.
To clarify, "non-SEBA members" refer to members of the minority union/s who lost in the
certification election where the SEBA was certified as such. Simply put, they are members of
union/s other than the union certified as SEBA in the same CBU.
According to Holy Cross of Davao College, Inc. a. Joaquin,3 payment by non-SEBA

members of agency fees to the certified SEBA which successfully negotiated the CBA in an
amount equivalent to the union dues and fees being paid by its members is recognized under the
law. 4 The non-SEBA members' acceptance of pay and the SEBA's entitlement thereto benefits
resulting from the CBA justifies the deduction of agency fees from their
3. CHECK-OFF OF AGENCY FEES.

“Check-or of agency fees is a process or device whereby the employer, upon agreement with
the SEBA, deducts agency fees from the wages of non-
1
Section 13 [a], Rule VIII, Book III thereof.
2
Article 259 1248) is entitled 'Unfair Labor Practices of Employers."
3
G.R N. 110007, Oct 18,1996, 263 SCRA 358; 331 Phil. 680, 692.
4
See the earlier quoted pertinent provision of Ad* 259(e) (248(e)] of the Labor Code.
SEBA members who avail of the benefits from the CBA and remits them directly to the SEBA.'
It is the duty of the employer to deduct or "check-of' the sum equivalent to the amount of agency
fees from the non-SEBA members' wages. 2
4. A NON-SEBA MEMBER HAS RIGHT TO ACCEPT OR NOT THE BENEFITS OF

CBA.
There is no law that compels a non-SEBA member to accept the benefits provided in the
CBA. He has the freedom to choose between accepting and rejecting the CBA itself or the
benefits flowing therefrom. Consequently, if a non-SEBA member does not accept or refuses to
avail of the CBA-based benefits, he is not under any obligation to pay the "agency fees" to the
SEBA since, in effect, he does not recognize the status of the SEBA as his agent.
5. LIMITATION ON THE AMOUNT OF AGENCY FEE.

The SEBA cannot capriciously fix the amount of -agency fees it may collect from its non-
members. Article 259(e) [248(e)] of the Labor Code expressly sets forth the limitation in fixing
the amount of the agency fees, thus:
(1) It should be reasonable in amount; and
(2) It should be equivalent to the dues and other fees paid by members of the SEBA.3
Thus, any agency fee collected in excess of this limitation is a nullity.
6. NON-SEBA MEMBERS NEED NOT BECOME MEMBERS OF SEBA.

The employees who are not members of the certified SEBA which successfully concluded the
CBA are not required to become members of the latter. Their acceptance of the benefits flowing
from the CBA and their act of paying the agency fees do not make them members thereof.
7. ACCRUAL OF RIGHT OF SEBA TO DEMAND CHECK-OFF OF AGENCY FEES.

The right of the SEBA to demand from the employer the check-off of agency fees accrues
from the moment the non-SEBA member accepts and receives the benefits from the CBA. This
is the operative fact that would trigger such liability on the part of such non-SEBA member.4
1
Gabriel v. The Hat. Secretary of Labor and Employment, G.R. No. 115949, March 15,2000.
2
Del Pier Academy v. Del Pilar Academy Employees Union, G.R No. 170112, April 30,2008.
3
See also Section 4, Rule >DCV, Book V. Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, [Feb. 17, 20031
4
lbid.
459
CHAPTER FIVE
LABOR RELATIONS
8. NO INDIVIDUAL WRITTEN AUTHORIZATION BY NON-SEBA MEMBERS

REQUIRED TO CHECK-OFF.
To effect the check-off of agency fees, no individual written authorization from the non-SEBA
members who accept the benefits from the CBA is necessary.1
9. THE NON-SEBA MEMBERS WHO PAY AGENCY FEES TO THE SEBA REMAIN
LIABLE TO PAY UNION DUES TO THEIR OWN UNION.
The fact that the non-SEBA members who are members of the minority union are paying
agency fees to the SEBA does not free them from their obligation as members to continue paying
their union dues and special assessments to their own union. There is no law that puts a stop to
such obligation simply because their union failed to be certified as the SEBA. Union dues are
required for the continued existence and viability of their union. Hence, they are obligated to pay
two (2) kinds of dues:
(1) Union dues and special assessments to their own union; and
(2) Agency fee to the SEBA.
This is clear from a reading of Article 250 [241]2 which does not qualify that the right to
collect union dues and assessments, on the part of the union, and the obligation to pay the same,
on the part of its members, are extinguished the moment the union is unsuccessful in its quest to
become the SEBA of the employees in the bargaining unit where it seeks to operate.
But to iterate, the minority union collecting union dues and assessments from its members
does not have the right to ask the employer to check-off the same from its members' wages. Such
right exclusively belongs to the SEBA.
2.
COLLECTIVE BARGAINING
a.
DUTY TO BARGAIN COLLECTIVELY
1. CONSTITUTIONAL FOUNDATION.
The right of all workers to collective bargaining is a right duly guaranteed under the
Constitution. Thus, it is expressly provided in Section 3, Article XIII thereof that the State,
among others, shall guarantee the rights of all workers to collective bargaining and negotiations.
1
Del Pilar Academy v. Del foliar Academy Employees Union, G.R. No. 170112, April 30, 2008.
2
Entitled “Rights and Conditions of Membership in a Labor Organization.”
2. LEGAL BASES.
The above-stated constitutional mandate is implemented through Articles 261 [250] to 264
[253] and Article 259 [248] of the Labor Code,' the provisions of which are discussed below.
2. MEANING OF DUTY TO BARGAIN COLLECTIVELY.

The "du1y to bargain collectively" means the performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith for the purpose of negotiating an agreement
with respect to wages, hours of work and all other terms and conditions of employment,
including proposals for adjusting any grievances or questions arising under such agreement and
executing a contract incorporating such agreements if requested by either party but such duty
does not compel any party to agree to a proposal or to snake any concession.2
The duty does not compel any party to agree blindly to a proposal nor to make concession. While
the law imposes on both the employer and the bargaining union the mutual duty to bargain
collectively, the employer is not under any legal obligation to initiate collective bargaining
negotiations.3
3. EMPLOYER'S DUTY TO BARGAIN EXISTS ONLY WITH SEBA.
The duty to bargain collectively does not exist when the majority status of the employees'
representative is not established. The employer has no such duty to bargain with the individual
workers or with the minority union.4 In Philippine Diamond Hotel v. Manila Diamond Hotel
Employees Union,5 it was held that since the respondent union is not the exclusive
representative of the majority of the employees of petitioner, it could not demand from petitioner
the right to bargain collectively in their behalf. Petitioner's refusal, therefore, to bargain
collectively with respondent union cannot be considered ULP.
4. ULTIMATE GOAL IS TO CONCLUDE A CBA.

Obviously, the ultimate purpose of collective bargaining is to reach 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
1
These articles are denominated as follows: Article 26112501- Procedure in Collective Bargaining;
Article 26212511- Duty to Bargain Collectively in tie Absence of Collective Bargaining Agiuirlie16,
Article 263 1252] - Meaning of Duty to Bargain Collectively; Article 264 (253] - Duty to Bargain
Collectively When There Exists a Collective Bargaining Agreement, and Article 25912481- Unfair
Labor Practices of Employers.
2
Article 252, Labor Code; Kiok Loy v. NLRC, G.R No. 54334, Jan. 22, 1986, 141 SCRA 179; United
Employees Union V. Noriel, G.R No. L-40810, Oct 3, 1975, 67 SCRA 267; Isaac Peral Bowling Alley
v. Untied Employees Welfare Association, G.R. No. L-9831, Oct. 30, 1957, 102 Phil. 219.
3
Kiok Loy v. NLRC, supra.
4
Lakas ng Manggagawang Makabayan v. Marcelo Enterprises, G.R No. L-38258, Nov. 19,1982.
5
Philippine Diamond Hotel and Resort, Inc. [Mania Diamond Hotel] v. Manila Diamond Hotel
Employees Union, G.R No. 158075, June 30,2006.
461
CHAPTER FIVE
LABOR RELATIONS
contract, but they do not compel one. The duty to bargain does not include the obligation to
reach an agreement.1
5. BARGAINING, NOT EQUIVALENT TO ADVERSARIAL LITIGATION.

The High Court set the tone of what collective bargaining negotiations mean in Caltex
Refinery Employees Association [CREA] v. Btillantes. 2 It said that bargaining is not equivalent
to an adversarial litigation where rights and obligations are delineated and remedies applied. It is
simply a process of finding a reasonable solution to a conflict and harmonizing opposite
positions into a fair and reasonable compromise.
6. VIOLATION OF THE DUTY TO BARGAIN COLLECTIVELY.

The duty to bargain collectively may well constitute ULP if violated by an employer, under
Article 259(g) [248(g)],3 or by a labor organization, under Article 260(c) [249(c)]4 of the Labor
Code.
7. KENDS OF COLLECTIVE BARGAINING.

The Rules to Implement the Labor Code, as amended, 5 enunciate two (2) kinds of collective
bargaining, namely:
1.) Single-enterprise bargaining involving a CBA negotiation between one certified SEBA
and one employer; and
2.) Multi-employer bargaining involving a CB.A negotiation between and among several
certified SEBAs and employers.6
In No. 1 above, any certified SEBA may demand negotiations with the employer regarding
the terms and conditions of employment of employees in the bargaining unit it represents.7 The
SEBA should submit such intention in writing to the employer together with its proposals for
collective bargaining. The SEBA and the employer may adopt such procedures and processes
they may deem appropriate and necessary for the early termination and conclusion of their
negotiations. They should name their respective representatives to the negotiations, schedule the
number and frequency of the meetings, and agree on the wages, benefits and other
1
Union of Filipino Employees Drug, Food and Allied Industries Unions-Kilusang Mayo Uno [UFE-DFA-
KMU] v. Nestle Philippines, Inc., G.R. Nos. 158930-31, March 3,2008.
2
OR. No. 123782, Sept 16, 1997, 279 SCRA 218, 236, 243-244.
3
Paragraph (g) of Article 259 [248] states: —(g) To violate the duty bargain collectively as prescribed
by this Code Paragraph (c) of Article 260 [249] provides: '(c) To violate the duty, or refuse to bargain
collectively with the employer, provided t is the representative of the employees[.]
5
Sections 3 and 5, Rule XVI, Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-03,Series of 2003, [Feb. 17, 20031.
6
ld
7
Section 3, Rule XVI, Book V, Ibid.

terms and conditions of employment for all the employees covered in the bargaining unit.'
In No. 2 above, any legitimate labor unions and employers may agree in writing to come together
for the purpose of collective bargaining, provided:
a) Only legitimate labor unions which are incumbent SEBAs may participate and negotiate
in multi-employer bargaining;
b) Only employers with counterpart legitimate labor unions which are incumbent SEBAs
may participate and negotiate in multi-employer bargaining; and
c) Only those legitimate labor unions that pertain to employer units which consent to multi-
employer bargaining may participate in multi-employer bargaining.2
8. TWO (2) SITUATIONS CONTEMPLATED.

The duty to bargain collectively involves two (2) situations, namely:
1. Duty to bargain collectively in the absence of a CBA;3 and
2. Duty to bargain collectively when there is an existing CBA.4
b.
IN THE ABSENCE OF CBA
1. HOW DUTY SHOULD BE DISCHARGED.

The duty to bargain collectively when there has yet been no CBA in the collective bargaining
unit (CBU) where the SEBA seeks to operate should be complied with in the following order:
First, in accordance with any agreement or voluntary arrangement providing for a more
expeditious manner of collective bargaining; and secondly, in its absence, in accordance with the
provisions of the Labor Code, referring to Article 261 [250] thereof which lays down the
procedure in collective bargaining.5
2. RATIONALE.
Clearly, the law gives utmost premium and extends due respect to the voluntary arrangement
between the parties on how they will discharge their respective duties to bargain collectively
before resort to the procedure laid down in
1
Section 4, Rule XV1, Book V, Ibid.
2
Becton 5, Rule XVI, Book V, Ibid.
3
As provided in Article 262 [251] of the Labor Code.
4
AsdedriMicle264l253l0ftheLth0rC0de.
5
CHAPTER FIVE 463
LABOR RELATIONS
the Labor Code may be made. In other words, it is only when there is no such voluntary
arrangement that the procedure laid down in Article 261 [250] of the Labor Code should be
followed.
C.
WHEN THERE EXISTS A CBA
1. CONCEPT.
Under the Labor Code,' when there is a CBA, the duty to bargain collectively shall mean that
neither party shall terminate nor modify such agreement during its lifetime. However, either
party can serve a written notice to terminate or modify the agreement at least sixty (60) days
prior to its expiration date. It shall be the duty of both parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement during the 60-
day period and/or until a new agreement is reached by the parties.2
2. 60-DAY FREEDOM PERIOD.

Article 264 [253] clearly states that "(w)hen there is an existing CBA, the parties thereto are
bound to observe the terms and conditions therein set forth until its expiration. Neither party is
allowed to terminate nor modify such agreement during its lifetime. The only time the parties are
allowed to terminate or modify the agreement is within the period of at least sixty (60) days prior
to its expiration date by serving a notice to that effect." This last 60-day period of the 5-year
lifetime of the CBA immediately preceding its expiration is called the "freedom period" It is
denominated as such because it is the only time when the law allows the parties to freely serve a
notice to terminate, alter or modify the existing CBA. It is also the time when the majority status
of the SEBA3 may be challenged by another union by filing the appropriate petition for
certification election (PCE).4
The twin Picop Resources casess best illustrate the significance of the freedom period. Here,
the collective bargaining agent, Nagkahiusang Mamumuo sa PRI-Southern Philippines
Federation of Labor [NAMAPRI-SPFL], had a CBA with petitioner company for a period of 5
years from May 22, 1995 until May 22, 2000. On two occasions, said union, pursuant to the
union security clause (maintenance of membership) in the CBA, demanded from petitioner
company to terminate the employment of respondents due to their acts of disloyalty to the union
consisting in their signing of an "authorization letter to file a petition for certification election"
by another union (Federation of Free Workers [FFW]) prior
1
Article 264 [254 Ibid.
2
Id.
3
SEBA means 'Sole and Excise Bargaining Agent'
4
NPR Yard Crew v. PNR, G.R. No. L-33621, July 26. 1976.
5
Referring to the 2010 case of Picop Resources Inc, (NI) v. Tañeca, G.R. No. 160828, Aug. 9, 2010,
and the 2011 case of Picop Resources, Inc. (PRI) v. Dequila, G.R. No. 172666, Dec.7, 2011.

to the 60-day freedom period. Petitioner company terminated respondents' employment on the
basis of said demand of the union. In holding that the termination pursuant to the union security
clause was illegal, the Supreme Court pointed out that while they signed such "authorization
letter" outside the 60-day freedom period, they actually filed the "Petition for Certification
Election" within the freedom period. As per records, it was clear that the actual Petition for
Certification Election of FFW was filed only on May 18, 2000. Thus, it was within the ambit of
the freedom period which commenced from March 21, 2000 until May 21, 2000. Strictly
speaking, what is prohibited is the filing of a petition for certification election outside the 60-day
freedom period. This is not the situation in this case. If at all, the signing of the authorization to
file a certification election was merely preparatory to the filing of the petition for certification
election, or an exercise of respondents' right to self-organization. The mere signing of the
authorization in support of the Petition for Certification Election of FFW on March 19, 20 and
21, or before the "freedom period," is not sufficient ground to terminate the employment of
respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing
in the records would show that respondents failed to maintain their membership in good standing
in the union. Respondents did not resign or withdraw their membership from the union to which
they belong. Respondents continued to pay their union dues and never joined the FFW.1
3. AUTOMATIC RENEWAL CLAUSE.

Pending the renewal of the CBA and while they are negotiating its renewal, the parties are
bound to keep the status quo and to treat the terms and conditions embodied therein still in full
force and effect not only during the 60-day freedom period but until a new agreement is
negotiated and ultimately concluded and reached by the parties. This principle is otherwise
known as the "automatic renewal clause" which, being mandated by law, is deemed incorporated
in all CBAs.2
For its part, the employer cannot discontinue the grant of the benefits embodied in the CBA
which just expired as it is duty-bound to maintain the status quo by continuing to give the same
benefits until a renewed CBA is reached by the parties. On the part of the union, it has to observe
and continue to abide by its undertakings and commitments under the expired CBA until the
same is renewed.
For example, the union security clause must continue to be in effect even after the expiration
of the CBA; otherwise, there would be a gap during which no
1
See also National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP)-TUCP v.
Ferrer-Calleja, G.R. No. 89609, Jai. 27,1992.
2
Article 264 [253], Labor Code; New Pacific Timber & Supply Co, Inc. v. NLRC, G.R. No. 124224,
Math 17, 2000, 328 SCRA 404; Piet 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor, OR.
No. 110854, Feb. 13, 1995, 241 SCRA 294; Union of Filipino Employees v. NLRG, G.R No. 91025,
Dec. 19,1990.
465
CHAPTER FIVE
LABOR RELATIONS
agreement would govern from the time the old agreement expired to the time a new agreement is
concluded by the parties.1
4. KIOK LOY DOCTRINE.

This doctrine is based on the ruling in Kiok Loy v. NLRC, 2 where the petitioner, Sweden Ice
Cream Plant, refused to submit any counter-proposal to the CBA proposed by its employees'
certified SEBA. The High Court ruled that the employer had thereby lost its right to bargain the
terms and conditions of the CBA. Consequently, all the terms and conditions of the CBA as
proposed by the SEBA are deemed approved and accepted lock, stock and barrel (LSB) by the
erring employer.
The Kiok Loy case epitomizes the classic case of negotiating a CBA in bad faith consisting
of the employer's refusal to bargain with the SEBA by ignoring all notices for negotiations and
requests for counter-proposals made to the former by the latter. Such refusal to send its counter-
proposals to the SEBA's proposals and to bargain on the economic terms of the CBA constitutes
an unfair labor practice (ULP) under Article 259(g) [248(g)]3 of the Labor Code.4
5. OTHER CASES AFTER KIOK LOY.

The ruling that the CBA proposed by the SEBA may be adopted as the new CBA if the
employer unjustifiably and in bad faith refused to counter-propose and negotiate its terms and
conditions has been reiterated in the following cases:
1. Divine Word University of Tacloban v. Secretary of Labor and Empkyment,5 where the
university refused to perform its duty to bargain collectively; hence, the High Tribunal
upheld the unilateral imposition on the university of the CBA proposed by the Divine
Word University Employees Union.
2. General Milling Corporation v. CA,6 where the Supreme Court imposed on the employer
the draft CBA proposed by the SEBA for the last two (2) years commencing from the
expiration of the 3-year term of the original CBA. This was because of the employer's
refusal to counter-propose to the SEBA's proposals which was declared as a ULP act
under Article 259(g) [248(g)]7 of the Labor Code.
1
Villar v. lnciong, G.R. Nos. L-50283-84, April 20, 1983, 121 SCRA 444.
2
G.R.No. L-54334, Jan. 22, 1986, 141 SCRA 179, 188.
3
To violate the duty to bargain collectively as prescribed by this Code [.]
4
General Wing Corporation 4. CA, G.R. No. 146728, Feb. 11,2004].
5
GR. No. 91915, Sept 11, 1992, 213 SCRA 759.
6
GR No. 146728, Feb. 11,2004.
7
"(g) To violate tie duty lo bargain collectively as prescribed by this Code [.]”
6. SOME PRINCIPLES.
• If unchallenged during the 60-day freedom period, the majority status of the existing
SEBA is deemed uninterrupted and continuing and thus should be respected by the
employer. A PCE challenging the majority status of the existing SEBA should be filed
within — and not before or after - the 60-day freedom period. Upon the expiration of the
said period and no PCE is filed by a challenging union, the employer is duty-bound to
continue its recognition of the majority status of the incumbent SEBA.1
• All the terms and conditions of the CBA are deemed automatically renewed. The law
does not provide for any exception or qualification on which economic provisions of the
existing CBA are to retain their continuing force and effect. Therefore, the automatic
renewal of the CBA's provisions must be understood as encompassing all the terms and
conditions thereof.2
d.
COLLECTIVE BARGAINING AGREEMENT (CBA)
1. DEFINITION.
A “Collective Bargaining Agreement" or `CBA" for short, refers to the negotiated contract
between a duly cer4fied SEBA3 of workers and the employer incorporating the agreement
reached after negotiations with respect to wages, hours of work and all other terms and
conditions of employment in the appropriate bargaining unit, including mandatory provisions for
grievances and arbitration machineries.4 It may be executed not only upon the request of the
SEBA but also by the employer.5
2. PRIMARY PURPOSE.
The primary purpose of a CBA is the stabilization of labor-management relations in order to
create a climate of sound and stable industrial peace.6
3. THE LAW BETWEEN THE PARTIES.
The CBA embodies all the agreements reached after negotiations between the employer and
the SEBA with respect to the terms and conditions of their employment relationship. 7
Consequently, from the moment it is perfected and
1
Article 268 12561 Labor Code.
2
Faculty Association of Mapua Institute of Technology v. Hon. CA, GR. No. 164060, June 15,2007.
3
SEBA means 'Sole and Exclusive Bargaining Agent"
4
Section 1 (ft Rue II, NUE Revised Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings [Oct 15, 20041 See Wesleyan University-Philippines v. Wesleyan University-Philippines
Faculty and Staff Association, CR. No. 181806, March 12,2014; Philippine Journalists, Inc. v. Journal
Employees Union (JEU), G.R No. 192601, June 03, 2013.
5
National Union of Workers in Hotel Restaurant and Abed Industries (NUWHRAIN-APL-IUF),
Philippine Plaza Chapter v. Philippine Plaza Holdings, Inc. G.R. No. 177524, July 23,2014.
6
Rivera v. Espiritu, supra; Kiok Loy v. NLRC, No. L-54334, January 22, 1986, 141 SCRA 179, 195.
7
Pantranco North Express, Inc. v. NLRC, G.R. No. 95940, July 24, 1996, 259 SCRA 161.
467
CHAPTER ERIE
LABOR RELATIONS
during its lifetime, it is considered the law between the parties1 and as such, they are bound not
only to the fulfillment of what has been expressly stipulated but also to all consequences which,
according to their nature, may be in keeping with good faith2 and the mandate of the law.3 Being
the law between the parties, any violation thereof can be subject of redress in court.4
4. GRANT OF RIGHT TO SELF-GOVERNMENT.

The CBA is no doubt the ultimate expression of the common intention of the employer and
the employees at having their own self-government. In so enacting the CBA, they are, in effect,
exercising quasi-legislative authority as they craft its terms meant at improving the standards set
by law in relation to their rights, welfare and benefits. The terms of the CBA, in reality,
constitute the governing law crafted and enacted by them. Resultantly, the law's provisions
affecting their rights, welfare and benefits will no longer be the controlling tenets but those of the
CBA's unless, of course, there is, as between them, serious disparity and inconsistency that may
harm the employees or operate to their disadvantage, in which event, it is the law's provisions,
and not the CBA's which shall prevail.
5. LIMITATION OF MANAGEMENT RIGHTS AND PREROGATIVES.

A CBA is not simply a document by which the union and the employees have imposed
upon management express restrictions over its otherwise absolute right to manage the enterprise.
While regulating or restraining the exercise of management functions, the CBA does not oust
management from the performance of these functions. It is a well-entrenched principle in labor
law as regards the exercise by the employer of its management rights and prerogatives that "the
power to grant benefits over and beyond the minimum standards of law or the Labor Code for
that matter belongs to the employer." More specifically, matters of salary increases are part of
management prerogatives.5 According to this principle, even if the law is solicitous of the welfare
of the employees, it must also protect the right of the employer to exercise what clearly are
management prerogatives.6
Following this principle, petitioner in Dole Phikppines 7 claims that being the employer, it has
the right to determine whether it will grant a 'free meal" benefit to its employees and, if so, under
what conditions. It contends that to see it otherwise would amount to an impairment of its rights
as an employer. The Supreme Court,
1
Samahang Manggagawa S3 Top Form Manufacturing-United Workers of the Philippines ISMTFM-
UVVP] v. NLRC, G.R. No. 113856, Sept 7,1998, Marcopper Mining Corporation v. NLRC, GR. No.
103525, March 29, 1996, 255 SCRA 322.
2
Goya, Inc. v. Goya, Inc. Employees Union-FFW, GR No. 170054, Jan. 21,2013.
3
Supreme Steel Corporation V. Nagkakaisang Manggagawa ng Supreme Independent Union (NMS-
IND-API), GR No. 185556, Math 28,2011, citing Endo v. Quantum Foods Distributi3n Center, GR. No.
161615, January 30, 2009.
4
Faculty Association of Mapua Institute of Technology v. Hon. CA, GR No. 164060, June 15,2007.
5
Mania Electric Company v. Quisumbing, G.R. No. 127598, Feb. 222000.
6
Abbot Laboratories Phi., Inc. v. NLRC, GR. No. L-76959, Oct 12, 1987, 154 SCRA 713.
7
Dole Philippines, Inc. v. Pawis ng Makabayang Obrero-NFL {PAMAO-NFLI, G.R. No. 146650, Jan.
13,2003.
however, disagreed. It held that the exercise of management prerogatives is not unlimited. It is
subject to the limitations found in the law, in the CBA or in the general principles of fair play
and justice. This situation constitutes one of the limitations. The CBA is the norm of conduct
between petitioner and private respondent and compliance therewith is mandated by the express
policy of the law.1
6. CBA NOT AN ORDINARY CONTRACT.

While the CBA constitutes the law between the parties, it is not, however, an ordinary
contract to which the principles of law governing ordinary contracts apply.2 A CBA, as a labor
contract within the contemplation of Article 1700 of the Civil Code which governs the relations
between labor and capital, is not merely contractual in nature but impressed with public interest;
thus, it must yield to the common good.3
7. DOUBTS OR AMBIGUITIES IN THE CBA, HOW RESOLVED.
Compliance with the CBA is mandated under the policy to give protection to labor. As a
labor contract within the contemplation of Article 1700 of the Civil Code, it must be construed
liberally rather than narrowly and technically, and the courts must place a practical and realistic
construction upon it, giving due consideration to the context in which it is negotiated and
purpose which it is intended to serve.4
As a contract and the governing law between the parties, the general rules of statutory
construction apply in the interpretation of its provisions.3 Thus, if the terms of the CBA are plain,
clear and leave no doubt on the intention of the contracting parties, the literal meaning of its
stipulations, as they appear on the face of the contract, shall prevail.6 Contracts which are not
ambiguous are to be interpreted according to their literal meaning and not beyond their obvious
intendment.7 Only when the words used are ambiguous and doubtful or leading to several
interpretations of the parties' agreement that a resort to interpretation and construction is called
for.8 And in making such construction, it is well-settled that
1
See aim E. Razon, Inc. v. Secretary of Labor and Employment G.R. No. 85867, May 13, 1993, 222
SCRA 1.
2
Davao integrated Port Stevedoring v. Abaquez, G.R. No. 102132. March 19,1993.
3
Cirtek Employees Labor Union-FEW v. Citek Electronics, Inc., G.R No. 190515, Nov. 15,2010.
4
Cirtek Employees Labor Union-FFW v. Citek Electronics, Inc., Ibid., Pantranco North Express, Inc. v.
NLRC, GR No. 95940, July 24,1996; Davao Integrated Port Stevedoring Services v. Abarquez, GR.
No. 102132, Mach 19,1993.
5
National Union of Waters in Hotel Restaurant and Abed Industries (NUW1-IRAIN-AP1-IUF), Philippi*
Plaza Chapter v. Philippi* Plaza Holdings, Inc., G.R. No. 171524, July 23,2014.
6
Article 1370, Civil Code; University of Santo Tomas Faculty Union v. University of Saito Tomas, G.R
No. 203957, July 30, 2014; Philippine Journalists, Inc. v. Journal Employees Union (JEU), GR No.
192601, June 03.2013.
7
Mindanao Steel Corporation v. Minsteel Free Waters Organization [MINFREWO-NFL] Cagayan de
Oro, G.R. No. 130693, Mardi 4,2004; Plastic Tow Center Corporation v. NLRC, GR No. 81176, April
19,1989.
8
Untied Kimberly-Clark Employees Union-Philippine Transport General Workers' Organization
(UKCEU-PTGWO) v. Kimberly-Clark Philippines, Inc., supra; Honda Philippines, Inc. v. Samahan ng
Malayang Manggagawa sa Honda, GA No. .145561, June 15,2005,499 Phil. 174, 180.
469
CHAPTER FIVE
LABOR REIATIONS
the contemporaneous and subsequent conduct of the parties may be taken into account.
If there is doubt in the interpretation of the provision of the CBA, it should be resolved in
favor of labor,2 as this is mandated by no less than the constitution. 3 Additionally, it is well-
settled that in resolving any such doubt or ambiguity, the following provisions of law should be
applied:
1) Article 1702 of the Civil Code which provides that all labor legislation and labor
contracts should be construed in favor of the safety and decent living for the laborer; and
2) Article 4 of the Labor Code which states that all doubts should be resolved in favor of
labor.4
(NOTE: See extensive discussion of this topic in Chapter One [General]

Provisions] under the topic of "B. CONSTRUCTION IN FAVOR OF LABOR").
8. BINDING EFFECT OF CBA.

Ratification of the CBA by majority of all the workers in the bargaining unit makes the
same binding on all employees therein.5 A CBA gives rise to valid enforceable contractual
relations against the union members, in matters that affect them individually, and against the
union itself, in matters that affect the entire membership in general. A person who is an
employee and at the same time a union member, is bound by the CBA, in both capacities as such.
This is so because the CBA is a joint and several contract of the members of the union entered
into by the union as their agent.6
9. AUTOMATIC INCORPORATION CLAUSE - LAW IS PRESUMED PART OF THE

CBA.
It is well-settled that existing laws and pertinent jurisprudence automatically form part of
a valid contract. There is therefore no need for the
1
Caltex Regular Employees, etc. v. Caltex Inc., OR No. 111359, Aug. 15, 1995; Universal Textile
Mt v. NLRC,G.R. No. 87245, April 6, 1990, 184 SCRA 273.
2
Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and Staff Association,
G.R. No. 181806, March12, 2014; Supreme Steel Corporation v. Nagkakaisang Manggagawa ng
Supreme Independent Union (NMS-IND-APL), OR. No. 185556, Match 28, 2011, 646 SCRA 501,
521; Faculty Association of Mapua Institute of Technology IFAMIT) v. CA OR No. 164060, June 15,
2007, 524 SCRA 709, 717.
3
Article II, Section 18 of the Constitution provides: "Section 18. The State affirms labor as a primary
social economic force. It shall protect the rights of workers and promote their welfare'
4
Holy Cross of Davao College, Inc. v. Holy Cross of Davao Faculty Union — KAMAPI, OR No.
156098, June 27, 2005; Plastic Town Center Corporation v. NLRC, OR No. 81176, April 19,1989.
5
Article 237 [2311 Labor Code.
6
Manalang v. Artex Development Co., Inc., OR No. L-20432, Oct 30, 1967, 21 SCRA 561.
parties to copy or reiterate them in the CBA nor to make any express reference thereto. They are
all presumed to be part of the contract.1
10. STANDARD STIPULATIONS IN A CBA.

Generally, the stipulations in a CBA may be classified into two (2), namely:
(1) Non-economic or political; and
(2) Economic or non-political.
The first one covers the following provisions that the parties to a CBA usually stipulate: (a)
Coverage or Scope of the Agreement; (b) Exclusions; (c) Rights and Responsibilities of Parties;
(d) Union Security Arrangement; (e) Job Security (Security of Tenure); (f) Management Rights
and Prerogatives; (g) Company Rules and Regulations; (h) Discipline of Employees; (i) Union
Dues and Special Assessments; (j) Agency Fee; (k) Check-Off; (1) Grievance Machinery; (m)
Voluntary Arbitration; (n) Labor-Management Council (LMC); (o) No-Strike, No-Lockout (p)
Waiver and Completeness of Agreement; and (q) Duration and Effectivity of Agreement.
The second includes: (a) Wage Increases; (b) Allowances; (c) Premiums for Work on Rest
Days, Holidays, etc.; (d) Meal, Rice and other Subsidies; (e) Leave Benefits; (f) Union Leave;
(g) Uniforms; (h) Union Office; (1) Promotions; (j) Bonuses; (k) Insurance; (1) Hospitalization;
(in) Retirement; (n) Excursion; and (o) Others which have monetary values.
11. THREE (3) CATEGORIES OF CBA SUBJECTS.

The subjects of CBAs may be classified into three (3) categories, namely: (a) Mandatory; (b)
Permissive or voluntary; and (c) Illegal.
a. Mandatory Subjects.
Mandatory subjects of the CBA are those that the parties are compulsorily required to
bargain if either party has made a proposal thereon. Thus, an employer may not introduce any
changes in the mandatory bargaining subjects without providing the SEBA prior notice of such
proposed changes and affording it of the opportunity to bargain thereover. Neither the employer
nor the SEBA can refuse to bargain over mandatory subjects of bargaining.
It bears emphasizing, however, that despite their being mandatory, the parties need not arrive
at an agreement thereon through negotiations alone; what is simply required is that they should
bargain in good faith on the proposals although a deadlock may ultimately result therefrom. And
if the deadlock remains
1
Lakas ng Manggagawang Makabayan [LMM] v. Abiera, G.R No. L-29474, Dec. 19,1970; Liberation
Steamship Co, Inc. v. GR No. L-25389, June 27, 1968; Davao Integrated Port Stevedoring Services v.
Abarquez, GR. No. 102132, March 19, 1993, 220 SCRA 197, 204.
471
CHAPTER FIVE
LABOR RELATIONS
unresolved, the parties may resort to such concerted activities as a strike, on the part of the
SEBA, or lock-out, on the part of the employer.'
Considered mandatory are proposals concerning the terms and conditions of employment.
Examples of mandatory subjects are wages (all forms of wages), hours of work, 2 meal time,3
time breaks,4 overtime and other premiums,3 commissions,6 shift differentials,7 paid holidays,8
incentive pays,9 paid leaves of absence, w fringe benefits," separation/severance pay," pensions"
and retirement benefit," work schedules," probationary period," grievance procedure,"
arbitration, w labor-management council (1_,NIC),19 no-strike, no-lockout dause,29 union security
clause,21 inter alia.
In addition to the foregoing, the CBA is mandatorily required by special laws to embody
certain stipulations, such as the following:
1. Drug-free workplace policy. - Under RA. No. 916522 and its Implementing Rides and
Regulations?' it is explicitly required that a provision on drug-
1
See Article 278 [263], of the Labor Code, which provides, in its paragraph (c), as follows: "(c) In case of
bargaining deadlocks, the duly certified Of recognized bargaining agent may file a notice of strike or the
employer may file a notice of lockout with the Ministry at least 30 days before the intended da thereof. >pa"
2
Timken Roller Bearing Co., 70 NLRB 500 (1946).
3
Id.
4
Id.
5
Id.
6
The Register-Guard, 339 NLRB 353 (2003).
7
Smith Cabinet Mfg. Co., 147 NLRB 1506 (1964).
8
Singer Mtg. Co., 24 NLRB 444 (1940).
9
Libby, McNeil & Libby, 65 NLRB 873 (1946).
10
Such as service incentive leave, vacation leave, paternity leave, maternity leave, sob parents' leave, et.
11
W.W. Crs & Co. v. NLRB, 174 F2d 875 (1,' Or. 1949); Lany Geweke Ford, 344 NLRB 628 (2005).
12
Adams Day, Inc., 137 NLRB 815 (1962).
13
Pensions for active workers are mandatory but benefits for retirees are permissive. (Allied Chemical & Atcali
Workers Local 1 v. Pittsburgh Plate Glass Go., 404 U.S. 157 [1971D.
14
ld.
15
Timken Role; Bearing Co., 70 NLRB 500 (1946).
16
17
Article 273 [260], Id.; Hughes Tool Co. v. NLRB, 147 F2d 69 (5th Cr. 1945).
18
Article 274 (261], Id.; NLRB v. Montgomery Ward & Co., 133 F2d 676 (9th Cir. 1943).
19
20
Article 278 [263], Id.
21
Article 259(e) [248(e)], Id.
22
Otherwise known as the "Comprehensive Dangerous Drugs Act of 2002' which was approved on June 7,
2032.11 is prodded in its Section 49: "Labor Organizations and the Private Sector. — All or unions, federations,
associations; or organizations in cooperation with the respective private sector patters shall include in their
collective bargaining or any similar agreements, joint continuing programs and information campaigns for the
laborers similar to the programs provided under Section 47 of the Act with the end in view of achieving a drug-
free workplace. "It shall be required that the workplace drug abuse prevention policies and programs be included
as part of the Collective Bargaining Agreement (CBA)."
23
The Implementing Rules and Regulations provide as follows: "Section 49. Labor Organizations and the Private
Sector. — All labor unions, federations, associations, or organizations in cooperation with the respective private
sector partners shall include in their collective bargaining of any similar agreements, joint continuing programs
and information campaigns for the
free workplace be included in the CBA.1 Pursuant thereto, DOT .F Department Order No. 53-03,
Series of 2003,2 promulgated the Guidelines for the Implementation of a Drug-Free Workplace
Policies and Programs for the Private Sector which requires that in organized establishments, the
drug-free workplace policies and programs should be included as part of the CBA.
2. HIV/AIDS education and information program. - The 1999 Rules and Regulations
Implementing RA. No. 8504,3 require that "(t)he quality of the HIV/AIDS education and
information program shall be under the Collective Bargaining Agreement xxx."4 This
workplace HIV/AIDS education and information program for all workers is required to be
developed, implemented, evaluated and funded by the employer. Further, AIDS education is
mandated thereunder to be integrated in the orientation, training, continuing education and
other human resource development programs of employees and employers in all private
offices.
b. Permissive or Voluntary Subjects.

Permissive or voluntary subjects of bargaining are those that are non-mandatory in the
sense that they are not directly related to the work being performed by the employees in the
bargaining unit. These subjects are not related to wages, hours of work and other terms and
conditions of employment. Being permissive and non-mandatory, the parties may agree to
engage in bargaining over these subjects but they are not in any way required to so bargain under
compulsion of law. These subjects may be proposed by either party, but neither of them can
insist upon their acceptance as condition for executing and concluding the CBA. Any of the
parties, therefore, can refuse to negotiate them without getting into any legal complication such
as being charged for ULP. These subjects cannot likewise be the subject of a bargaining
deadlock which may be cited as valid and lawful ground for the conduct of a strike by the SEBA
or lockout by the employer. But once the parties choose to negotiate permissive subjects, any
agreement reached thereon is enforceable. Moreover, the fact that a permissive subject is
included in one CBA does not make negotiations over that subject mandatory during the next
CBA negotiations.5
That a certain subject is mandatory and not permissive or vice-versa is a thin gray line issue
that may present legal complications. A threshold may be cited in that subjects which have an
insignificant bearing on the employment relationship are most likely permissive. The danger of
not making a clear-cut
laborers similar to the programs provided under Section 47 of this Act with the end in view of achieving a
drug free work Place
1
See Section 49, Article VI (Participation of the Private and Labor Sectors in the Bit
rIn1tofthAd]thereof.
2
Issued on August 14,2003 by DOLE Secretary Patricia A. Santo Tom.
3
Otherwise imam as tie Philippi.* AIDS Prevention aid Control Act of 1998! It was issued on Apri113,
1999.
4
Section 15, Rule II thereof.
5
Printing Pressmen Local 252 (Columbus) (R.W. Page Corp.), 219 NLRB 268 (1975).
473
CHAPTER FIVE
LABOR RELATIONS
distinction between these two lies in the possibility that if the employer declines to bargain over
a subject which turns out to be mandatory rather than permissive, then the SEBA may have
sufficient ground to initiate a ULP complaint for the perceived undue refusal of the employer to
negotiate the CBA.
Examples of this kind of subjects, inter alia, are (1) the ground rules that the parties should
observe in the course of the parties' negotiations;1 (2) selection of the, composition of the
management and union panels who will negotiate the CBA;2 (3) SEBA's insistence on bargaining
for a unit larger than is covered by its certification;3 (4) determination of the products to be
manufactured; (5) general business practices; (6) internal union matters, 4 such as determining the
amount of union dues and agency fees, amendments to the union constitution and by-laws,
changes in the rules governing election of officers, etc.; and (7) basic capital investment
decisions which are based on factors other than labor costs.5
c. Illegal Subjects.
Illegal or prohibited subjects are those that cannot be made subject of the collective
bargaining negotiations because doing so would run afoul of the law. Being violative of the law,
the parties are prohibited not only to negotiate them but to actually stipulate and incorporate
them into a CBA, this notwithstanding their mutual agreement to so make them part of the CBA.
And if they are stipulated in a CBA, they are void and unenforceable. Further, the parties cannot
invoke them to declare a deadlock which may be cited as a ground to support a strike or lockout.
And in case a strike or lockout is conducted based on such ground, the same should be declared
patently illegal.
Examples of illegal subjects are those that provide for benefits that are less than the
minimum standards set by law; discrimination against certain employees based on sex, sexual
preference and orientation, race, marital status, disability, age and religion; 6 issues beyond the
scope of the appropriate bargaining unit; yellow dog condifions; 2 and other acts considered as
ULPs under the law.
12. BENEFITS FROM THE CBA AND THE LAW, SEPARATE AND DISTINCT FROM
EACH OTHER.
Benefits derived from law, on the one hand, and those from the CBA or company policy or
practice, on the other, are separate and distinct from each other unless otherwise provided by the
law or agreement or policy or practice granting
1
American Medical Response, 346 NLRB 1004(2006); Vanguard Fit & Sear* Systems, 345 NLRB
1016 (2305).
2
General Electric Co., 173 NLRB 253 (1968).
3
Douds v. Longshoremen (LA), 241 F2d 278 (2d at 1957).
4
Universal 01 Products Co. v. NLRI3, 445 F2d 155 (7th Ct. 1971).
5
Fist National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981).
6
Hughes Tool Co., 147 NLRB 1573 (1964).
7
Article 259(b) [248l Labor Code.
them.1 Workers are allowed to negotiate wage increases separately from and in addition to
legislated wage increases.
It is provided under Article 125 of the Labor Code that no wage order should be construed to
prevent workers in particular firms or enterprises or industries from bargaining for higher wages
with their respective employers. This is usually the case because all CBA negotiations are
conducted with the end in view of effecting improvements and upward changes in wages and
other benefits over and above the rates set by law. Obviously, the parties do not sit down and
negotiate a CBA for the purpose of reducing existing wages and benefits below the minimum
standards fixed and mandated by law.
Parties may validly agree in the CBA to reduce wages and benefits of employees provided
such reduction does not go below the minimum standards. While the proscription is clear that the
parties to the CBA are not allowed to stipulate on wages and benefits below the minimum rates
or standards set by law, they are not, however, precluded from negotiating and agreeing to their
reduction for as long as they do not result in being reduced to the level below the legal minimum
rates and standards.
In the case of Insular Hote1,2 it was argued by petitioner union that reducing wages and
benefits runs contrary to Article 1003 of the Labor Code which enunciates the non-diminution of
benefits principle. The Supreme Court, however, ruled that even assuming arguendo that Article
100 applies to the case at bar, respondent hotel, following Rivera, 4 is correct that this principle
does not prohibit a union from offering and agreeing to reduce wages and benefits of the
employees. This is so because the CBA is the end-product of negotiations by the employer and
the SEB.A not only with respect to wages, hours of work but to "all other terms and conditions
of employment."5 As such, the parties are free to enter into any stipulation that is permissible
under the law. And in construing a CBA, the courts must be practical and realistic and give due
consideration to the context in which it is negotiated and the purpose which it is intended to
serve.6
It must be emphasized that the parties to a CBA are not allowed to stipulate below the
minimum standards provided under the law. Entering into a CBA which contains terms and
conditions of employment below legally mandated minimum standards will not, despite its
registration, constitute a bar to the conduct of a certification election should another union
challenge the majority status of the
1 Meycauayal Colleges v. Drilon, G.R No. 81144, May 7, 1990.

2 insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, CR. Nos. 174040-41, Sept
22,2010.
3 It provides as follows: 'Article 100. Prohibition against elimination or deminution of benefits. - Nothing
n this Book shall be construed to eliminate or in any way dininish supplements, or other employee
benefits beg enjoyed at the tine of promulgation of this Code.'
4 Rivera v. Espiritu, G.R No. 135547, Jan. 23,2002.
5 Id.
6 Id.; See also Octavio V. Philippine Long Distance Telephone Company, G.R. No.175492, Feb.
27,2013.
475
CHAPTER FIVE
LABOR RELATIONS
SEBA which negotiated it. Previously, entering into a CBA providing benefits below the
minimum standards set by law is one of the grounds for cancellation of union registration under
paragraph (f) of Article 247 [239] of the Labor Code. This ground, however, has been deleted by
the amendatory provision of R.A. No. 9481, which took effect on June 14, 2007.
13. EMPLOYEES ENTITLED TO CBA BENEFITS.

Who are entitled to the benefits flowing from the CBA? This question continues to bedevil
the courts as it is raised in many cases to this day. Based on jurisprudence, the following are
entitled to the benefits stipulated in the CBA:
(1) Members of the SEB/-‘;
(2) Non-SEBA members but are covered by the collective bargaining unit (CBU);1
(3) Members of the minority union/s who paid agency fees to the SEBA;2 and
(4) New employees hired after the conclusion of the CBA and during its effectivity or even
after its expiration. 3
14. ENTITLEMENT OF EXCLUDED EMPLOYEES.

Are employees excluded from the collective bargaining unit (CBU), like confidential
employees or managerial employees or supervisory employees, in the case of rank-and-file CBU,
or vice-versa, entitled to the benefits flowing from the CBA?
The answer is in the negative. But two exceptions may be cited, to wit:
1) When the CBA benefits are granted to managerial employees by reason of company
policy or company practice;
2) When adjustments are made to avoid distortion in the levels of wages or benefits.
In the first, in order to make it an enforceable and demandable right, there should be evidence
of existence of such policy or practice; otherwise, the absence thereof would not justify any
claim or demand therefor. For example, in the 2018 case of SITA v. Hu4ganga,4 Respondent
Huliganga was a managerial employee of SITA and, as such, he is not entitled to retirement
benefits exclusively granted to the rank-and-file employees under the CBA. It must be
remembered that under Article 255 [245] of the Labor Code, managerial employees are not
eligible to join, assist or form any labor organization. To be entitled to the benefits under the
CBA,
1
New Pacific Timber & Supply Co., Inc. v. NLRC, G.R. No. 124224, March 17, woo, 328 SCRA 404.
2
See Article 259(e)1248(e)j, Labor Code.
3
lbid
4
Societe Internationale de Telecommunications Aerocnautiques (SITA) v. Huliganga, G.R No. 215504,
Aug. 20,2018.
the employees must be members of the bargaining unit, but not necessarily of the labor
organization designated as the bargaining agent.
The same ruling was made in another 2018 case, Manila Hotel Corporation v. Rosita De
Leon,1 where respondent, a managerial employee, was compulsorily retired under the retirement
plan in the rank-and-file CBA which prescribes that an employee's retirement is compulsory
when he or she reaches the age of 60 or has rendered 20 years of service, whichever comes first.
Respondent De Leon was only 57 at the time she was compulsorily retired but had already
rendered 34 years of service as Assistant Credit and Collection Manager/Acting General Cashier.
As managerial employee, she is not covered by the CBA. There is nothing in petitioner's
submissions showing that respondent had assented to be covered by the CBA's retirement
provisions. Thus, in the absence of an agreement to the contrary, managerial employees cannot
be allowed to share in the concessions obtained by the labor union through collective
negotiation. Otherwise, they would be exposed to the temptation of colluding with the union
during the negotiations to the detriment of the employer. Accordingly, the fact that respondent
had rendered more than 20 years of service to petitioner will not justify the latter's act of
compulsorily retiring her at age 57, absent proof that she agreed to be covered by the CBA's
retirement clause.
In the second, certain economic benefits may be voluntarily extended to excluded employees
such as increases in wages and other monetary benefits because a CBA was concluded with the
rank-and-file employees. But if so given, the same cannot, strictly speaking, be considered as
having been based on the CBA but simply as adjustments to prevent distortion in the levels of
wages and benefits among the employees included in the CBI., in particular, and all the
employees of the establishment, in general. Such increases in wages and benefits may not
necessarily be equal to or higher than what the CBA provides. In this case, not being based on
the CBA, the employer can implement such increases based on its exclusive right and
prerogative to determine how much the same should be.
15. CBA DEADLOCK

A "deadlock" is defined as the "counteraction of things producing entire stoppage: a state
of inaction or of neutralization caused by the opposition of persons or of factions (as in
government or a voting body): standstill."' There is a deadlock when there is a "complete
blocking or stoppage resulting from the action of equal and opposed forces; as, the deadlock of a
jury or legislature."3 The word is synonymous with the word impasse* which, within the
meaning of the American
1
G.R No. 219774, July 23,2018.
2
Divine Word University of Tacloban V. Secretary of Labor and Employment G.R. No. 91915, Sept. 11,
1992.
3
Id., citing Webster's New Twentieth Century Dictionary, 2nd Ed., p. 465.
4
Id., citing William C. Burton's Legal Thesaurus, 1980 Ed., p. 133.
477
CHAPTER FIVE
LABOR RELATIONS
federal labor laws, "presupposes reasonable effort at good faith bargaining which, despite noble
intentions, does not conclude in agreement between the parties.1
Thusly, there is a deadlock in collective bargaining where there is a failure in the collective
bargaining negotiations between the SEBA. and the employer resulting in an impasse or
stalemate on all or some of the issues subject of the negotiation.2 Despite their efforts at
bargaining in good faith, the parties have failed to resolve the issues and it appears that there are
no other definite options or plans in sight to break it. Simply stated, there is a deadlock when
there is a complete blocking or stoppage in the negotiation resulting from the action of equal and
opposing forces.3
Either of the parties in the CBA negotiation — the SEBA or the employer - may declare a
deadlock. There is no law that mandates that only the SEBA or the employer alone may declare a
deadlock. Such declaration, in fact, may be made separately or jointly by the parties and either
expressly or impliedly. The filing of a notice of strike by the SEBA or notice of lockout by the
employer, signals the formal declaration of a CBA deadlock — one of only two (2) grounds
allowed under the law4 that may be invoked in such notice, the other being ULP committed
either by the employers or the SEBA.6
In the 2014 case of Papinas Shell Petroleum Cmporation,7 it was stipulated in Item 8 of the
Ground Rules of the CBA negotiation that a "deadlock can only be declared upon mutual
consent of both parties." Because the parties have not agreed on the issue of wage increase,
there was a complete stoppage of the ongoing negotiations between the parties and the union
consequently filed a Notice of Strike. Petitioner union contends that despite the said
stoppage, there could have been no deadlock between the parties as the union had not given
its consent to it, pursuant to said Item 8 of the Ground Rules governing the parties'
negotiations which requited mutual consent for a declaration of deadlock. The Supreme
Court, however, disagreed. Under the circumstances of this case, a mutual declaration would
neither add to nor subtract from the reality of the deadlock then existing between the parties.
Thus, the absence of the parties' mutual declaration of deadlock does not mean that there was
no deadlock. The union's reliance on item 8 of the ground rules governing the parties'
negotiations which required mutual consent for a declaration of deadlock was reduced to
irrelevance by the actual facts. Contra factum non valet argumentum. There is no argument
against facts.
1
Id., citing N.L.R.B. v. Bancroft, 635 F2d 492 (1981).
2
San Miguel Corporation v. NLRC, G.R. No. 99266, March 2,1999.
3
Capitol Medical Center Alliance of Concerned Employees-Unified Filipino Service Workers v.
Laguesma, supra. See Article 276(c) 1263(c)1, Labor Code.
5
See Article 259 [248], Labor Code entitled 'Unfair Labor Practices of Employers.°
6
See Article 260 [249], Labor Code entitled 'Unfair l2bor Practices of Labor Organizations."
7
Tabangao Shell Refinery Employees Association v. Pilipinas Shell Petroleum Corporation, GR No.
170007, Apt 07,2014.
Rights of Parties in Case of Deadlock.

In case of a deadlock in the initial negotiation or re-negotiation or renewal of the CBA,
the law provides that the parties may exercise their respective rights under the Labor Code'
which include the following:
1) Submission of the deadlocked issue to conciliation and mediation by the NCMB.2 This
means that the deadlock may be taken cognizance of motu proprio by the NCMB or
through the filing of a notice of strike by the union or notice of lockout by the employer
or notice of preventive mediation by any of the parties.3
2) Declaration and actual staging of a strike by the union or lockout by the employer.4
3) Referral of case to compulsory or voluntary arbitration.
4) In case of industries indispensable to the national interest, filing of petition for
assumption of jurisdiction over the labor dispute or certification thereof to the NLRC for
compulsory arbitration.
e.
THE COLLECTIVE BARGAINING PROCESS
1. ESSENTIAL REQUISITES OF COLLECTIVE BARGAINING.

Prior to any collective bargaining negotiations between the employer and the SEBA, the
following requisites must first be satisfied:
1. Employer-employee relationship must exist between the employer and the members of
the bargaining unit being represented by the SEBA.5
2. The majority status of the SEBA must be duly established through any of the modes
sanctioned by law such as SEBA Certification (which replaced the mode of "Voluntary
Recognition'),6 or certification, consent, run-off or re-run election.' Proof of the majority
status of the union demanding negotiation should be clearly established; otherwise, the
employer has no obligation to engage in collective bargaining negotiations with it and it
has the right to refuse to negotiate until such official proof is presented.5
1
Article 265 [253-Al, Labor Code; Section 2, Rule IX, Book V, Rules to Implement the Labor Code.
2
National Conciliation and Mediation Board (NUE).
3
Article 261(c)1250(c)], Labor Code.
4
G.R. No. 91915, Sept 11, 1992, 213 SCRA 759, 912-913.
5
Allied Free Workers Union v. Compania Maritima, G.R. No. L-22951, Jai. 31,1967.
6
See Section 42., Rule VII, Department Order No. 40-I-15, Series of 2015 [September 07, 2015].
7
See Articles 267 [255) to 2701258], Labor Code.
8
Lakas ng Manggagawang Makabayan v. Marcelo Enterprises, G.R. No. L-38258, Nov. 19, 1982, 118
SCRA 422.
479
CHAPTER FIVE
LABOR RELATIONS
3. The bargaining unit being sought to be represented by the SEBA should be validly
constituted and established in accordance with law.
4. There should be a lawful written demand to bargain and a clear statement of the
proposals by one party to negotiate an agreement and the equivalent counter-proposals
thereto by the other party before the collective bargaining negotiations process may
validly commence.1
2. COLLECTIVE BARGAINING PROCEDURE IN ARTICLE 261 [250],

MANDATORY.
Under Article 261 [25012 The Supreme Court, in earlier cases,3 held that the failure of a
party to reply to the written notice containing a statement of CBA proposals served by the other
party within the period of ten (10) calendar days mentioned in Article 261 [2501.4 does not
constitute refusal to bargain which is an unfair labor practice (ULP) of the party concerned. This
period was considered merely procedural in nature and therefore not mandatory.
Recently, however, there has been a shift in the interpretation of Article 261 [250].
According to General Milling,5 the procedure in collective bargaining prescribed under the said
provision is mandatory because of the basic interest of the State in ensuring lasting industrial
peace. It underscored the fact that the other party upon whom the written notice containing the
proposals was served is mandatorily required under the law to "make a 1.0 thereto not later than
ten (10) calendar days from receipt of such notice." Consequently, in declaring the employer in
this case guilty of ULP under Article 259(g) [248(g)] of the Labor Code, the High Court
construed its failure to make a timely reply to the proposals presented by the union as being
indicative of its bad faith and utter lack of interest in bargaining with the union. Its excuse that it
felt that the union no longer represented the workers was held to be mainly dilatory as it turned
out to be utterly baseless.
In Colegio de San Juan de Letran,6 petitioner school was declared to have violated Article
261 [250] and to have acted in bad faith because of its failure to make a timely reply to the
proposals presented by the union. More than a month had elapsed after the proposals were
submitted by the union and yet petitioner still had not made any counter-proposals. This inaction
on the part of petitioner prompted the union to file its second notice of strike. Petitioner could
only offer a feeble explanation that its Board of Trustees had not yet convened to discuss the
matter as its excuse for failing to file its reply. Its refusal to make a counterproposal shows a lack
of sincere desire to negotiate, rendering it guilty of ULP.
1
Article 261 [250], Laba Code; Kiok Loy v. NLRC, G.R. No. L-54334, Jan. 22, 1986.
2
Article 2611250] is entitled 'Procedure in Collective Bargaining."
3
Such as the ruling in National Union of Restaurant Workers v. CIR, GR. No. L-20044, April 30, 1964,
10 SCRA 843.
4
Article 261 [250] is entitled 'Procedure in Collective Bargaining”
5
General Kling Corporation v. CA, G.R No. 146728, Feb. 11, 2004.
6
Colegio de San Juan de Letran v. Association of Employees aid Faculty of Letran, GR. No. 141471,
Sept. 18, 2000.
The same holding was made in the earlier case of Kiok Loy v. NLRC,' where the company's
refusal to make any counter-proposal to the union's proposed CBA was declared as an indication
of bad faith. Where the employer did not even bother to submit an answer to the bargaining
proposals of the union, there is a clear evasion of the duty to bargain collectively.2
3. STEPS IN THE COLLECTIVE BARGAINING PROCESS
A. PRELIMINARY PROCESS.
The first step in the bargaining process involves the act of a party desiring to negotiate an
agreement, of serving a written notice upon the other party with a statement of its proposals. The
other party is required to make a reply thereto not later than ten (10) calendar days from receipt
of such notice. It must be noted that although in almost all cases, the negotiation process is
initiated by the SEBA, Article 261 [250] does not foreclose the right of the employer to initiate
it. The provision uses the word "party" which may refer either to the employer or the SEBA.3
B. NEGOTIATION
This involves the process of meeting, not later than ten (10) calendar days from the date of
request for conference, of the representatives of the employer and the SEBA, for the purpose of
discussing and adjusting their differences, if any, with the end in view of concluding an
agreement on the terms and conditions of their employment relationship. Negotiation may be
conducted with the intervention of the government through the Conciliators-Mediators of the
NCMB, in case any dispute arising therefrom is not settled by the parties among themselves.4
C. SIGNING AND EXECUTION

This involves the signing and execution of a written document, ordinarily denominated as
"CBA" or simply as "Agreement" by the management and SEBA negotiating panels after a series
of negotiations. The document embodies all the agreements reached by them on each and every
issue raised and resolved (luting the negotiation process. At this point, although the panel
representatives of both management and the SEBA have affixed their signatures on each and
every page of the CBA and the same have been notarized by a Notary Public, it cannot as yet be
considered as having taken effect since there are still certain mandatory legal processes that need
to be complied with, such as the publication, ratification and registration processes, as discussed
below.
1
G.R. No. 54334, Jan. 22, 1986, 141 SCRA 179, 186.
2
See also The Bradman Co., Inc. v. CIR, G.R Nos. L-24134-35, July 21, 1977, 78 SCRA 10,15.
3
Riven v. Espiritu, G.R. No. 135547, Jan. 23,2002.
4
Articles 261 [250], 262 [251] and 263 [2521 Ibid.
481
CHAPTER FIVE
LABOR RELATIONS
D. PUBLICATIOIV.
This involves the posting of a copy of the newly concluded CBA in at least two (2)
conspicuous places in the workplace, at least five (5) days prior to the ratification thereof by all
the employees comprising the bargaining unit.1
E. RATIFICATION.
This involves the act of ratifying in writing the newly concluded CBA by at le2ist the majority,
not of the members of the SEBA which negotiated it, but of all the employees covered by and
included in the bargaining unit.2
F. REGISTRATION
This pertains to the registration of the duly ratified CBA with the BLR or the DOT .F
Regional Office by submitting five (5) copies thereof together with the other documentary
requirements and paying the required registration fee.3
G. JOINT ADMINISTRATION.
This involves the joint administration of the CBA by the employer and the SEBA during the
entire lifetime thereof which is set by law at five (5) years.4
H. INTERPRETATION AIVD APPLICATION.

This concerns the interpretation, application, implementation and enforcement of the
stipulations embodied in the CBA to give effect thereto.
4. BASIC PRINCIPLES IN CBA NEGOTIATIONS.
a. Parties must act in good faith.3

b. Employer and employees should stand on equal footing.6
c. The parties have the power to fix the terms and conditions of their employment
relationship.7
d. The employer has the obligation to make available such up-to-date financial information
on the economic situation of the undertaking which is normally submitted to relevant
government agencies as is material and necessary for meaningful negotiations.8
1
Mick 237 [231], Ibid.
2
bd.
3
bid.
4
Article 265[253-Al Ibid.
5
West Hartford Education Association v. DeCourcy, 162 Conn. 566,295 Aid 526 (1972), reprinted in
Smith, Edwards, and Clark, op. cit., p. 521.
6
Royal Inter-Ocean Liles, Inc. v. CIR, GR. No, L-11745, Oct 31,1960.
7
Article 1306, Civil Code; Manila Fashions, Inc. v. NLRC, G.R. No. 117878, Nov. 13, 1996.
8
Section 2, Rule )CI, Book V. Rules b implement the Labor' Code, as amended by Department Order
No. 40-03, Series of 2003, [Feb. 17,20031.
e. Refusal of employer to furnish financial statements is ULP only when the request is made
in writing as required in Article 251(c) [242(c)]; if not in writing, management cannot be
held liable for ULP.1
f. A proposal not embodied in the CBA is not part thereof. Only stipulations embodied in
the CBA should be binding on the parties thereto. 2
g. The minutes of the CBA negotiation meetings are not part of the
h. Making a promise during the CBA negotiations is not an indication of bad faith. As held
in Top Form,4 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.
i. Adamant stance resulting in an impasse is not an indicium of bad faith.3
j. Parties have no obligation to precipitately agree to the proposals of each
k. Refusal of a party to sign the fully-concluded CBA is ULP.7
l. No meeting of the minds, no CBA to speak of. For as long as there is no meeting of the
minds between the employer and the union, there can be no CBA that may be said to
have been concluded.8
m. Allegations of bad faith are wiped out with the signing of the CBA. With the execution of
the CBA, bad faith bargaining generally 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. The CBA is proof enough that the company exerted
reasonable effort at good faith bargaining.8 However, in Standard Chartered Bank," it
was held that such signing of the CBA does not operate to estop the parties from raising
charges for ULP against each other. The approval of the CBA and the release of the
signing bonus do not necessarily mean that the union has waived its claim for ULP
against the employer, or vice-versa, during the past negotiations.
1
Standard Chartered Bank Employees Union [NUBE] v. Confesor, G.R. No.114974, June 16, 2004.
2
Samahang Manggagawa in Top Form Manufacturing-United Workers of the Philippines ISMTFM-
LWPI v. NLRC, OR No. 113856, Sept 7,1998.
3
As held in Samahang Manggagawa in Top Form Manufacturing-United Workers of the Philippines
[SMTFM-UMI v. NLRC, G.R. No. 113856, Sept 7, 1998.
4
Id
5
Id.: Divine Word University of Tacloban v. Secretary of Labor and Employment OR No. 91915, Sept
11, 1992.
6
Union of Filipino Employees-Drug, Food and Allied Industries Unions-Kilusang Mayo Uno [1JFE-DFA-
KMU1 v. Nestle Philippines, Inc., OR. Ni. 158930-31, March 3,2008.
7
Roadway Express v. General Teamster, 320 F 2d, 859.
8
See University of the Immaculate Concepcion, Inc. v. The lion. SOLE, G.R. No. 146291, Jan.
23,2002.
9
Samahang Manggagawa in Top Form Manufacturing-United Workers of the Philippines [SMTFM-
UWPI v. NLRC, G.R. No. 113856, Sept 7, 1998.
10
Standard Cheered Bank Employees Union [NUBE] v. Confesor, G.R. No. 114974, June 16,2004.
483
CHAPTER FIVE LABOR RELATIONS
E.
UNFAIR LABOR PRACTICES (ULPs)
1.
NATURE, ASPECTS
1. WHEN AN ACT CONSTITUTES ULP.

At the outset, it must be clarified that not all unfair acts constitute ULPs. While an act or
decision of an employer or a union may be unfair, certainly not every unfair act or decision
thereof may constitute ULP as defined and enumerated under Articles 259 [248]' and 260 [249]2
of the Labor Code.3
The act complained of as ULP must have a, proximate and causal connection with the
following:
1. Exercise of the right to self-organization;
2. Exercise of the right to collective bargaining; or
3. Compliance with CBA.
Sans this connection, the unfair acts do not fall within the technical signification of the term
"unfair lobar practice. '4
2. THE ONLY ULP WHICH MAY OR MAY NOT BE RELATED TO THE EXERCISE
OF THE ABOVE RIGHTS.
The only ULP which is the exception as it may or may not relate to the exercise of the right
to self-organization and collective bargaining is the act described under paragraph (f) of Article
259 [248], i.e., to dismiss, discharge or otherwise prejudice or discriminate against an employee
for having given or being about to give testimony under the Labor Code.5
3. LABOR CODE PROVISIONS ON ULP.
There are only five (5) articles in the Labor Code related to ULP, to wit:
1) Article 258 [247] which describes the concept of ULPs and prescribes the procedure for
their prosecution;
2) Article 259 [248] which enumerates the ULPs that may be committed by employers;
1
Article 259 [248] - Unfair Labor Practices of Employers.
2
Article 260 [249] - Unfair Labor Practices of Labor Organizations.
3
Galaxie Steel Workers Union GSWU-NAFLU-KMU] v. NLRC, G.R. No. 165757, Oct 17, 2006.
4
Alfred Banking Corporation v. CA, G.R No. 144412, Nov. 18, 2003; See also Tunay na Pagkakaisa
ng Manggagawa sa Asia &sway v. Asia Brewery, Inc., GR. No.1K625, Aug. 3,2010.
5
Philcom Errployees Union v. Philippine Global Communications, G.R. No. 144315, Jury 17,2006.
3) Article 260 [249] which enumerates the ULPs that may be committed by labor
organizations;
4) Article 274 [261] which considers violations of the CBA as no longer ULPs unless the
same are gross in character which means flagrant and/or malicious refusal to comply with
the economic provisions thereof.
5) Article 278(c) [263(c)] which refers to union-busting, a form of ULP, involving the
dismissal from employment of union officers duly elected in accordance with the union
constitution and by-laws, where the existence of the union is threatened thereby.
4. PARTIES WHO/WHICH MAY COMMIT ULP.

A ULP may be committed by an employer or by a labor organization. Article 259 [248]
describes the ULPs that may be committed by the employer; while Article 260 [249] enumerates
those which may be committed by the labor organization.
On the part of the employer, only the officers and agents of corporations, associations or
partnerships who have actually participated in or authorized or ratified ULPs are criminally
liable.'
On the part of the union, only the officers, members of governing boards, representatives or
agents or members of labor associations or organizations who have actually participated in or
authorized or ratified the ULPs are criminally liable.2
5. ELEMENTS OF ULP.
Before an employer or labor organization may be said to have committed ULP, the following
elements must concur:
1) There should exist an employer-employee relationship between the offended party and
the offender; and
2) The act complained of must be expressly mentioned and defined in the Labor Code as a
ULP.
Absent one of the elements aforementioned will not make the act a ULP.
The first requisite is necessary because ULP may only be committed in connection with the
right to self-organization and collective bargaining by employees. Necessarily, there must be an
employment relationship in order for the organizational right to be validly and lawfully invoked.
1
Article 259 12481 Labor Code.
2
Article 260 [249], Ibid.
485 CHAPTER FIVE LABOR RELATIONS
The second requisite should be present since the Labor Code itself requires that the ULP
be "expressly defined by this Code." If an act is not covered by any of the ULPs expressly
mentioned in the law, it cannot be so deemed a ULP act.
6. ASPECTS OF ULP.
Under Article 258 [247], a ULP has two (2) aspects, namely:
1) Civil aspect; and
2) Criminal aspect.
The civil aspect of ULP includes claims for actual, moral and exemplary damages,
attorney's fees and other affirmative reliefs." Generally, these civil claims should be asserted in
the labor case before the Labor Arbiters who have original and exclusive jurisdiction over ULP
cases.2 The criminal aspect, on the other hand, can only be asserted before the regular courts.
7. BURDEN OF PROOF.
In ULP cases against employers, it is the union which has the burden to present substantial
evidence to support its allegation of ULP committed by the
employer.3 In ULP cases against labor organizations, the burden of proof rests on the employer.
2.
ULP BY EMPLOYERS
1. SPECIFIC ULP ACTS BY EMPLOYERS.

Article 259 [248] of the Labor Code enumerates the ULPs that may be committed by
employers, to wit.
"Article 259 [248]. Unfair Labor Practices of Employers. — It shall be unlawful for an
employer to commit any of the following unfair labor practices:
a) To interfere with, restrain or coerce employees in the exercise of their tight to self-
organization;
b) To require as a condition of employment that a person or an employee shall not join a
labor organization or shall withdraw from one to which he belongs;
c) To contract out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their rights to self-
organization;
1
See Article 258 [247], Ibid.
2
Under Article 224 [217], Ibid.
3
Schering Employees Labor Union [SEW] v. Schering Plough Caporali3n, G.R. No. 142506, Feb.
17,2005.
d) To initiate, dominate, assist or otherwise interfere with the formation or administration of

any labor organization, including the giving of financial or other support to it or its
organizers or supporters;
e) To discriminate in regard to wages, hours of work and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization.
Nothing in this Code or in any other law shall stop the parties from requiring membership
in a recognized collective bargaining agent as a condition for employment, except those
employees who are already members of another union at the time of the signing of the
collective bargaining agreement. Employees of an appropriate bargaining unit who are
not members of the recognized collective bargaining agent may be assessed a reasonable
fee equivalent to the dues and other fees paid by members of the recognized collective
bargaining agent, if such non-union members accept the benefits under the collective
bargaining agreement: Provided, that the individual authorization required under Article
251 [242], paragraph (o) of this Code shall not apply to the non-members of the
recognized collective bargaining agent;
f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for
having given or being about to give testimony under this Code;
g) To violate the duty to bargain collectively as prescribed by this Code;
h) To pay negotiation or attorney's fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute; or
i) To violate a collective bargaining agreement.
"The provisions of the preceding paragraph notwithstanding, only the officers and agents of
corporations, associations or partnerships who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable."
2. ORDER OF TOPICAL PRESENTATION.
For orderly presentation, the topics discussed in this section are as follows:
I. INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES IN THE EXERCISE OF

THEIR RIGHT TO SELF-ORGANIZATION
II. YELLOW DOG CONTRACT
III. CONTRACTING OUT OF SERVICES AND FUNCTIONS
IV. COMPANY UNION
1
As amended by Batas Pattaisa Rang 130, Aug. 21, 1981.
487
CHAPTER FIVE
LABOR RELATIONS
V. THREE SEPARATE CONCEPTS TREATED IN PARAGRAPH (E), ARTICLE 259 [248]

VI. FILING OF CHARGES OR GIVING OF TESTIMONY
VII. CBA-RELATED ULPs
INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES IN THE

EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
1. THE INSULAR LIFE DOCTRINE: TEST TO DETERMINE INTERFERENCE,

RESTRAINT OR COERCION.
The terms "interfere," "restrain" and "coerce" in paragraph (a) of Article 259 {248] are very
broad and expansive that any act of management that reasonably tends to have an influence or
effect on the exercise by the employees of their right to self-organization may fall within their
meaning and coverage.
According to the leading case of Insular Lzfe,1 the test of the employer's interference with,
restraint or coercion of employees within the meaning of the law is whether the employer has
engaged in conduct which may reasonably tend to interfere with the free exercise of the
employees' twin rights to self-organization and collective bargaining. It is not necessary that
there be direct evidence that any employee was in fact restrained, intimidated or coerced by the
statements or threats of the employer; what matters is that there is a reasonable inference that the
antiunion conduct of the employer does have an adverse effect on the exercise of said rights.
The significant point to consider, for a charge of ULP to prosper, is that it must be shown that
the employer's act was motivated by ill will, bad faith or fraud, or was oppressive to labor, or
done in a manner contrary to morals, good customs, or public policy, and, of course, that social
humiliation, wounded feelings or grave anxiety resulted therefrom.2 It bears emphasis, however,
that according to jurisprudence, basic is the principle that good faith is presumed and he who
alleges bad faith has the duty to prove it. By imputing bad faith to the actuations of the employer,
the employee has the burden of proof to present substantial evidence to support the allegation of
ULP. Should he fail to discharge this burden, his bare allegations deserve no credit.3
In accordance with the Insular Life test, the following acts of petitioners in T & H S
hopfitters,4 were declared as "all reek[ing] of interference on the part of
1
Insular Life Assurance Co, Ltd., Employees Association v. Insular Life Assurance Co., GR. No. L-
25291, Jan. 30,1971.
2
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., [G.R No. 162025,
August 3, 2010.
3
Culili v. Eastern Telecom unios Philippines, Inc., GR. No. 165381, Feb. 9,2011.
4
T & H Shopfilters Corp./Gin Queen Corp. v. T & H Shopfilters Corp., G.R. No. 191714, Feb. 26,2014.
petitioners," namely: (1) sponsoring a field trip to Zambales for its employees, to the exclusion
of union members, a day before the scheduled certification election; (2) the active campaign by
the sales officer of petitioners against the union prevailing as a bargaining agent during the field
trip; (3) escorting its employees after the field trip to the polling center; (4) the continuous hiring
of sub-contractors performing respondents' functions; (5) assigning union members to the
Cabangan site to work as grass cutters; and (6) the enforcement of work on a rotational basis for
union members. In declaring petitioners guilty of ULP, the Court held that indubitably, the above
various acts of petitioners, taken together, reasonably support an inference that, indeed, such
were all orchestrated to restrict respondents' free exercise of their right to self-organization.
Petitioners' undisputed actions prior and immediately before the scheduled certification election,
while seemingly innocuous, unduly meddled in the affairs of its employees in selecting their
exclusive bargaining representative.
2. TOTALITY OF CONDUCT DOCTRINE.

In ascertaining whether the act of the employer constitutes interference with, restraint or
coercion of the employees' exercise of their right to self-organization and collective bargaining,
the "totally of conduct doctrine" may be applied. Because of its nature and consequences, a
finding of ULP should not be made based alone on the cited ULP act considered in isolation but
should be viewed on the basis of the employer's act outside of the bigger context of the
accompanying labor relations situation. Any perceived act of interference must be examined in
terms of the act's inherent import and effects, in light of the surrounding circumstances, and
weighed on the basis of the totality of the conduct of the entity charged.
The totality of conduct doctrine means that expressions of opinion by an employer, though
innocent in themselves, may be held to constitute ULP because of the circumstances under which
they were uttered, the history of the particular employer's labor relations or anti-union bias or
because of their connection with an established collateral plan of coercion or interference. An
expression which may be permissibly uttered by one employer might, in the mouth of a more
hostile employer, be deemed improper and consequently actionable as a ULP.' The past conduct
of the employer and like considerations, coupled with an intimate connection between the
employer's action and the union affiliation or activities of the particular employee or employees
taken as a whole, may raise a suspicion as to the motivation for the employer's conduct. The
failure of the employer to ascribe a valid reason therefor may justify an inference that his
unexplained conduct in respect of the particular employee or employees was inspired by the
latter's union membership and activities.2
1
Samahan ng Manggagawa sa Bandolino-LMLC v. NLRC, G.R. No. 126195, July 17, 1997, 275 SCRA
633.
2
Royal Undergarment Corporation of the Philippines v. CIR, G.R. No. L-39040, June 6,1990.
489
CHAPTER FIVE
LABOR RELATIONS
In Carmelcraft,1 petitioner company invoked as reason to justify the cessation of its

operations the fact that it sustained losses in the small amount of P1,603.88 as of December 31,
1986. There is no report, however, of its operations during the period after that date, that is,
during the succeeding seven and a half months before it decided to close its business.
Significantly, the company is capitalized at P3 million. Considering such a substantial
investment, a loss of the paltry sum of less than P2,000.00 could hardly be considered serious
enough to call for the closure of the company. This justification is hardly credible; in fact, it is
preposterous when viewed in the light of the other relevant circumstances. The real reason for
the decision of the petitioners to cease operations was the establishment of respondent
Carmelcraft Employees Union. It was apparently unwelcome to the corporation which would
rather shut down than deal with the union. The company had in fact suggested that it might
decide not to dose the business if the employees were to affiliate with another union which the
management preferred. The act of the petitioners was ULP prohibited by law.
In General Milling,2 the Supreme Court considered the act of the employer in presenting
the letters from February to June 1993, by 13 union members signifying their resignation from
the union clearly indicative of the employer's pressure on its employees. The records show that
the employer presented these letters to prove that the union no longer enjoyed the support of the
workers. The fact that the resignations of the union members occurred during the pendency of
the case before the Labor Arbiter shows the employer's desperate attempt to cast doubt on the
legitimate status of the union. The ill-timed letters of resignation from the union members
indicate that the employer had interfered with the right of its employees to self-organization.
Because of such act, the employer was declared guilty of ULP.
In Hacienda Fatima,3 the Court upheld the factual findings of the NLRC and the CA that
from the employer's refusal to bargain to its acts of economic inducements resulting in the
promotion of those who withdrew from the union, the use of armed guards to prevent the
organizers to come in, and the dismissal of union officials and members, one cannot but
conclude that the employer did not want a union in its hacienda - a clear interference in the right
of the workers to self-organization. Hence, the employer was declared guilty of ULP.
3. JURISPRUDENTIALLY DECLARED ACTS OF ULP INVOLVING EMPLOYER'S

INTERFERENCE, RESTRAINT OR COERCION.
Certain specific acts have been jurisprudentially declared as ULP in a number of cases which
invariably involve interference, restraint or coercion by the employer. These acts may be
generally classified as follows:
1
Carmelcraft Corporation v. NLRC, GR. Nos. 90634-35, June 6, 1990,186 SCRA 393.
2
General Milting Corporation v. CA, G.R. No. 146728, Feb. 11, 2004.
3
Hacienda Fatima v. National Federation of Sugarcane Waters— Food and General Trade, G.R No.
149440,Jan. 28,2003.

(1) Dismissals;
(2) Threats;
(3) Questioning and interrogation;
(4) Offers and Promises;
(5) Espionage and surveillance;
(6) Interference in intra-union affairs;
(7) Other forms of interference, restraint or coercion.
3.1. DISMISSALS.
Dismissals that are occasioned by employer's interference, restraint or coercion are always
ULP.1 The following acts involving dismissal of employees have been judicially declared ULPs:
(a) Dismissal of employees after they have organized their union and about to start with
the effort at having it certified as their SEBA. 2 Consequently, to dismiss union members
in order to ensure the defeat of the union in the certification election is I.ILP.3
(b) Dismissal of union officers which threatens the existence of the union constitutes
union-busting, an act of ULP.4
(c) Dismissing the union officers and members on the ground of losses about two years
after it has allegedly sustained them and after the dismissed officers and members
became more militant when they demanded improvement in their working conditions.5
(d) Effecting discriminatory dismissal where only unionists were permanently dismissed,
even where business conditions justified a layoff of the employees.6
(e) The mass lay-off or dismissal of 65 employees due to retrenchment absent any losses or
financial reverses. This kind of retrenchment constitutes a lame excuse and a veritable
smokescreen of the employer's scheme to bust the union and thus unduly disturb the
employment tenure of the employees concemed.7
1
Litex Employees Association v. CIR, G.R. No. L-39154, Sept. 9,1982.
2
Samahan ng Manggagava sa Bandolino-Lt/LC v. NLRC, G.R No. 126195, July 17,1997.
3
Samahang Manggagawa ng Via Mare v. Noriel, G.R No. L-52169, June 30, 1980, 98 SCRA 507.
4
See Article 278 [263(e)] which pertinently provides in part xxx [l] in case of dismissal from
employment of union officers duly elected in accordance with the union constitution and by-laws,
which may constitute union busting, where the existence of the union is threatened, the 15-day
coding-off period shall not apply and the union may take action immediately” See also Colegio de San
Juan de Letran v. Association of Employees and Faculty of Letran, G.R No. 141471, Sept 18,2000.
5
Oceanic Air Products, Inc. v. CIR, G.R. No. L-18704, Jan. 31,1963.
6
San Miguel Corporation v. NLRC, G.R No. 108001, March 15,1996.
7
People's Bank aid Trust Co. v. People's Bank and Trust Co. Employees Union, G.R. No. L-39603,
Jan. 13,1976.
491
CHAPTER FIVE
LABOR RELATIONS
(f) Dismissal occasioned by the refusal of the employees to give up their union
membership, which dismissal was under the pretext of retrenchment due to reduced
dollar allocations.1
(g) Dismissal of an employee because of his act of soliciting signatures for the purpose of
forming a union.2
(h) Dismissal of employees because of their refusal to resign from their union and to join
the union favorable to the employer, the latter's formation having been aided and
abetted by the company.3
(i) Dismissal of employees because of their act of engaging in valid and legal concerted
union activities.4
(j) Dismissal occasioned by the implausible and unproved allegation of overpricing of
needles the employee was ordered to buy and for alleged tampering of receipts.3
(k) Dismissal of an employee who had worked for 19 years because he had filed money
claims against the employer.6
(l) Terminating teachers who have attained permanent status because of the employer's
apprehension that there might be a future strike in the school. This is an unwarranted
interference with the rights of workers to self-organization and to engage in concerted
activities.
3.2. THREATS.
The mere issuance of a threat by the employer, even if not actualized, may already constitute
ULP. Examples are as follows:
a) Threatening employees with loss of jobs or benefits or promotional opportunities if they
join or vote for a union or engage in protected concerted activity.7
b) Threatening to close the plant if employees select a union to represent them° or to
discourage union activity or support.9
c) Stating to employees that union bargaining is futile or a strike is inevitable.10
1
Mania Pencil Co. v. CIR, G.R. No. L-16903, Aug. 31, 1965, 14 SCRA 955.
2
Judric Canning Corporation v. Inciong, GR No. L-51494, Aug. 19, 1982, 115 SCRA 887.
3
Progressive Department Corporation v. CIR G.R. No. L-3.9546, Nov. 24, 1977, 80 SCRA 434.
4
Republic Savings Bank v. CIR, G.R. No. L-20303, Sept 27, 1967, 21 SCRA 226.
5
Kapisanan ng Manggagawa sa Camara Shoes v. Camara Shoes, G.R. No. L-50985, Jai. 30,1982.
6
Sibal v. Notre Dane of Greater Mania, G.R. No. 75093, Feb. 23,1990.
7
See "Employer/Union Rights and Obligations; United States' National Labor Relations Board (NLRB),
athtips://vwwarkb.govirights-we-protect/employeninion-rights-and-obigations; Last accessed: October
09, 2016.
8
Id.
9
Medinac Center for Public Policy, 'The National Labor Relations Board and Unfair Labor Practices-,
by Robert P. Hunter.
10
Id
d) Threatening the union recruiter with bodily harm when he refused to yield the demand of
the employer to surrender the union affiliation forms.1
3.3. QUESTIONING AND INTERROGATING EMPLOYEES.

The act may also amount to ULP even if it is merely in the form of a question. The following
acts well constitute ULP under this classification:
a) Interrogating its employees in connection with their membership in the union or their
union activities which hampers their exercise of free choice.2
b) Questioning employees about their union sympathies or activities in circumstances that
tend to interfere with, restrain or coerce employees in the exercise of their rights would
be treated as ULP.3
3.4. OFFERS AND PROMISES.

The employer's act of making an offer or promise of certain favors or benefits may also
constitute as ULP. The following are illustrative of this kind:
a) Promising or implementing employee wage increases to discourage their union activity or

support.4
b) Offer of reinstatement and attempt to "bribe" the strikers with "comfortable cots," "free
coffee and occasional movies," "overtime pay for work performed in excess of 8 hours
and offer of "arrangements" for their families so they would abandon the strike and return
to work, constitute strike-breaking which is a ULP.5
c) Offer of Christmas bonus to all "loyal' employees made shortly after the request by the
union to bargain; wage increase given for the purpose of mollifying employees after the
employer has refused to bargain with the union or to induce strikers to return to work;
employer's promise of benefits in return for the striking employees' abandonment of their
strike; and the employer's statement made about 6 weeks after the strike started, to a
group of strikers in a restaurant that if the strikers returned to work, new benefits such as
hospitalization, accident insurance, profit-sharing and a new building to work in, will be
given to them.6
1
Velez v. PAV Watchmen's Union, G.R. No. L-12639, Apri127, 1960, 107 Phil. 689.
2
Scots Department Store v. Micaller, G.R No. L-8116, Aug. 25,1956.
3
id.
4
Mackinac Center for Public Policy, 'The National Labor Relations Board and 'Unfair Labor Practices,
by Robert P. Hunter.
5
Insular Life Assurance Co., Ltd., Employees Association v. Insular Life Assurance Co. GR No. L-
25291, Jan. 30, 1971.
6
Id.
493
CHAPTER FIVE
LABOR RELATIONS
d) Announcement by the employer of benefits prior to the conduct of a certification election,

intended to induce the employees to vote against the union.'
3.5. ESPIONAGE AND SURVEILLANCE.

The act of spying and shriveling of employees to determine their involvement and
participation in union organizing, formation and concerted activities is ULP. Examples are as
follows:
a) When management conducts espionage or surveillance of the meetings and activities of
the union. It is illegal since it shows the opposition of the employer to the existence of the
union, and the furtive nature of his activity tends to demonstrate spectacularly the state of
his anxiety.2
b) Requesting employees to report on the union activity of others.
3.6. INTERFERENCE IN INTRA-UNION DISPUTE.

The act of management in meddling with purely internal concerns, issues and affairs of
the union is ULP. For example, petitioners, in De la Salle Universio,4 were declared liable for
ULP for which they were ordered to pay respondent union nominal damages in the amount of
P250,000 and attorney's fees in the amount of P50,000 because of their act of temporarily doing
the following at the height of an intra-union dispute involving the election of officers of
respondent union:
1) 1Establishing a savings account for the union where all collected union dues and agency
fees will be deposited and held in trust; and
2) Discontinuing normal relations with any group within the union including the incumbent
set of officers.
3)
The said act of petitioners was precipitated by the request of one of the contending groups in
respondent union for them "to please put on escrow all union dues/agency fees and whatever
money considerations deducted from salaries of concerned co-academic personnel until such
time that an election of union officials has been scheduled and subsequent elections has been
held." Petitioners' act described above drew respondent union to file a complaint against them for
ULP, claiming that they unduly interfered with its internal affairs and discriminated against its
members. The Supreme Court agreed with respondent union's contention. It thus found the said
act of petitioners constitutive of interference, an unfair labor practice, because at the time they
adopted said action, a valid and existing CBA had been entered into by the parties. It thus
behooved petitioners to
1
Re Louana Plastics, Inc. 173 NLRB No. 218; NLRB v. Exchange Parts Co., 375 U. S. 405.
2
V51A CJS S. 382, p. 278.
3
Mackinac Center for Pubic Poky, 'The National Labor Relations Board and “Unfair Labor Practices",
by Robert P. Hunter, published on Aug. 24,1999, (Abe version at htlpsfhweveinackinac.ag/2317; Last
accessed: February 14,2017.
4
Cola Sate University v. Cola Sale University Employees Association, G.R. No. 177283, April 7,2009.
observe the terms and conditions thereof bearing on union dues and representation. It is
axiomatic in labor relations that a CBA entered into by a legitimate labor organization and an
employer becomes the law between the parties, compliance with which is mandated by express
policy of the law.
In Ren Transport Col). v. 1\iLRC,1 petitioner's failure to remit the union dues it has
checked-off to private respondent union, SMART,2 the incumbent SEBA, was declared an act of
interference with the exercise of the employees' right to self-organize and therefore ULP under
Article 259(a) [248(a)].3 The failure to remit the union dues to SMART because of the
disaffiliation by some of its members who organized another union, RTEA," and the voluntary
recognition extended to RTEA, were clear indications of interference with the employees' right
to self-organization. These acts were ill-timed in view of the existence of a labor controversy
over membership in the union. Such supposed disaffiliation and voluntary recognition of RTEA
are but a lame excuse that cannot validate those acts.
But the foregoing cases should be contrasted with the earlier case of Arellano Universi,5
where the act of the university in withholding the union dues and death benefits was not
considered ULP because it was made upon the request of union members in the light of their
gripes against the union and its officers. The university even deposited the amounts
corresponding to the union dues and death benefits with the DOLE where the parties could settle
the issues among themselves. The university, therefore, cannot be faulted for ULP as it in good
faith merely heeded the request of union members.
3.7. OTHER FORMS OF INTERFERENCE, RESTRAINT OR COERCION
CONSTITUTING ULP.
There are other forms of ULP by means of interference, restraint or coercion, such as the
following.
a) Indirectly forcing the employees to join another labor union as a condition for their re-
admission for participating in a strike.6
b) Instructing an employee not to affiliate or join a union.7
c) Refusal of the employer to reinstate strikers who voluntarily and unconditionally offered
to return to work but did not accept the new
1
GR. Nos. 188020 & 1882532, June 27,2016.
2
Samahan ng Manggagawa sa Ren Transport (SMART).
3
MB was cited by the Supreme Court in this decision as Article 258 (a) and not /Wide 259(a) which is
the renumbering made by the DOLE Secretary it her Department Advisory No. 01, Series of 2015
(Renumbering of the Labor Code of the Philippines, as Amended), issued on Jut,' 21,2015.
4
Ren Transport Employees Association (RTEA).
5
Arellano University Employees and Workers Union v. CA, G.R. No. 139940, Sept 19,2006.
6
Macleod & Company of the Fhb. v. Progressive Federation at Labor, G.R. No. L-7887, May 31, 1955.
7
Visayan Stevedores v. CIR G.R. No. L-21696, Feb. 25, 1967, 19 SCRA 426.
495
CHAPTER FIVE
LABOR RELATIONS
discriminatory conditions imposed against them because of their union membership or

activities.1
d) The act of the purchasers of a business establishment in replacing the union members
who were negotiating a CBA with the former owner at the time of the sale.2
e) The grant of concessions and privileges during the pendency of a certification election
case to members of one of the unions participating therein.3
f) Suspending union officers who attended the hearing in the petition for certification
election they filed.4
g) Ceasing operation due to the establishment of the union.3
h) Simulated sale in bad faith of business resorted to in order to get rid of the employees
who were members of the union.6
i) Engaging in capital reduction to camouflage the fact that it had been making profit, in
order for it to be able to effectuate the mass lay-off of union members?
j) The retrenchment of employees who belong to a particular union, with no satisfactory
justification why said employees were singled outs
k) Asking the employees to disclose the names of the members of the union.9
l) Putting on "rotation" only the alleged members of the union.1°
m) Compelling employees to sign an instrument indicating that the employer observed the
labor standards provisions of the law when he might have not, together with the act of
terminating or coercing those who refuse to cooperate with the employer's scheme."
n) The cessation of a company's operations shortly after the organization of a labor union
and the resumption of business barely a month after, gives credence to the employees'
claim that the closure was meant to discourage union membership and to interfere in
union activities.
o) Provoking the union officers into a fight by two recently hired employees pursuant to a
strategy of the company designed to provide
1
Cromwell Commercial Employees and Laborers Union v. CR, G.R No. L-19778, Sept. 30,1964.
2
National Labor Union v. CIR, G.R. No. L-31276, Sept 9,1982.
3
Philippine Charity Sve3pstakes Office v. The Association of Sweepstakes Staff Personnel, GR No. L-
27546, July 16,1982.
4
Oceanic Pharmacal Employees Union v. Inciong, G.R No. L-50568, Nov. 7,1979.
5
Carmelkraft Corporation v. NLRC, G.R. Nos. 90634-35, June 6, 1990.
6
Moncada 13ijon Factory v. CIR, G.R. No. L-18065, Math 30,1962.
7
Madrigal & Co., tic. v. Zamora, GR No. L-48237, June 30, 1987, 151 SCRA 355.
8
Sateen Shipyard and Engineering Co., Inc. v. NLRC, GR No.78604, May 9,1988.
9
Samahan ng Manggagawa sa Bandolino-LMLC v. NLRC, G.R No. 126195, July 17, 1997, 275 SCRA
633.
10
Samahan ng Manggagawa sa Bandolino-LMLC v. NLRC, supra.
11
Mabeza v. NLRC G.R No. 118506, Apn118, 1997, 271 SCRA 670.
12
Me-Shum Corporation v. Me-Shum Workers Union — FSM, G.R No. 156292, Jan. 11,2005.
an apparently lawful cause for their dismissal. The dismissed employees have not figured in
similar incidents before or violated company rules in their many years with the company.'
p) Transferring, laying off or assigning employees more difficult work or tasks, or otherwise
punishing them because they engaged in organizing and forming a union.2
II.
YELLOW DOG CONTRACT
1. GENERAL DESCRIPTION OF A YELLOW DOG CONTRACT.
Paragraph [b]3 of Article 259 [248] describes what is commonly known as `yellow dog
contract." It is one which exacts from workers as a condition of employment that they shall not
join or belong to a labor organization, or attempt to organize one during their period of
employment or that they shall withdraw therefrom in case they are already members of a labor
organization.
2. COMMON STIPULATIONS IN A YELLOW DOG CONTRACT. A typical yellow dog

contract embodies the following stipulations:
(1) A representation by the employee that he is not a member of a labor organization;
(2) A promise by the employee that he will not join a union; and
(3) A promise by the employee that upon joining a labor organization, he will quit his
employment.
The act of the employer in imposing such a condition constitutes ULP under Article 259(b)
[248(b)] of the Labor Code. Such stipulation in the contract is null and void.
CONTRACTING OUT OF SERVICES AND FUNCTIONS
1. GENERAL RULE.
Paragraph [c]4 of Article 259 [248] describes when the act of the employer of contracting out
of services or functions being performed by SEBA members is considered ULP.
1
Visayan Bicycle Manufacturing Co, Inc. v. National Labor Uni3n aid CIR, G.R. No. L-19997, May 19,
1965,14 SCRA 5.
2
T & H Shopfitters Corp/Gin Queen Corp. v. T & H Shop5tters Corp, G.R. No. 191714, Feb. 26, 2014.
3
"(b) To require as a condition of employment that a person or an employee shall rot join a labor
organization or shall withdraw from one to which he belongs [.]
4
(c) To contract out services or functions being performed by union members when such will interfere
with, restrain or coerce employees in the exercise of their rights to self-organization [.]
497
CHAPTER FIVE
LABOR RELATIONS
As a general rule, the act of an employer in having work or certain services or functions
being performed by SEBA members contracted out is not per se ULP. This is so because
contracting-out of a job, work or service is clearly an exercise by the employer of its business
judgment and its inherent management rights and prerogatives. Hiring of workers is within the
employer's inherent freedom to regulate its business and is a valid exercise of its management
prerogative subject only to special laws and agreements on the matter and the fair standards of
justice. The employer cannot be denied the faculty of promoting efficiency and attaining
economy by a study of what units are essential for its operation. It has the ultimate right to
determine whether services should be performed by its personnel or contracted to outside
agencies.1
2. WHEN CONTRACTING-OUT BECOMES ULP.

It is only when the contracting out of a job, work or service being performed by SEBA
members will interfere with, restrain or coerce employees in the exercise of their right to self-
organization that it shall constitute ULP.2 Thus, it is not ULP to contract out work for reasons of
business decline, inadequacy of facilities and equipment, reduction of cost and similar reasonable
grounds. The court usually refuses to substitute its judgment for that of the business decision of
the employer in ascertaining the validity or legality of the motivation for the contracting out of
services.
In Shell Oil, 3 the Court ruled that the contracting out of security services to an outside
private security agency to undertake the work of the company security guards who were re-
assigned to other sections of the company, is violative of the existing CBA. It could have been
purely an exercise of management prerogative on the part of the company if it were not bound by
what was stipulated in the CBA to continue to maintain a security guard section at least during
the lifetime of the agreement.
Another instance where the employer was declared guilty of ULP consequent to contracting
out of services is Digital Telecommunications:1 In this case, petitioner closed Digiserv, a
department of the company, to outsource its call center operation. While losses may have been a
valid reason to close down its operations in the light of the decline in the volume of transaction
of operator-assisted call services as supported by Financial Statements for the years 2003 and
2004, during which Digiserv incurred a deficit of P163,624.00 and P164,055.00, respectively, it
was, however, made in bad faith. In declaring petitioner guilty of ULP, the Supreme Court stated
that the closure of Digiserv was made after the DOLE Secretary had issued the first assumption
order to enjoin an impending
1
Mania Electric Company v. Quisumbing, G.R. No. 127598, Jan. 27,1999.
2
Article 2259(c)1248(c)], Labor Code; Section 6 [t], Department Order No. 18-02, Setts of 2002, [Feb.
21,20021
3
Shell Oil Workers Union v. Shell 01 Company of the Philippines, Ltd.,G.R No. L-28607, M3y 31, 1971,
39 SCRA 276, 292. Digit31Telecommunicaticos Philippines, Inc. v. Digitel Employees Union (DEU),
GR Nos. 184903-04, Oct. 10,2012.
strike. When Digiserv effected the dismissal of the affected employees, the union filed another
notice of strike. Significantly, the DOLE Secretary ordered that the second notice of strike be
subsumed by the previous assumption order. Thus, it was held that bad faith was manifested by
the timing of the closure of Digiserv and the rehiring of some employees to Interactive
Technology Solutions, Inc. (I-tech), a corporate arm of Digitel. The assumption order directs
employees to return to work and the employer to reinstate the employees. The existence of the
assumption order should have prompted Digitel to observe the status quo. Instead, Digitel
proceeded to close down Digiserv. The DOLE Secretary had to subsume the second notice of
strike in the assumption order. This order notwithstanding, Digitel proceeded to dismiss the
employees.
The timing of the creation of I-tech is dubious. It was incorporated on 18 January 2005
while the labor dispute within Digitel was pending. I-tech's primary purpose was to provide call
center/customer contact service, the same service provided by Digiserv. It conducts its business
inside the Digitel office at 110 E. Rochiguez Jr. Avenue, Bagumbgan, ,Quezon City. The former
head of Digiserv, Ms. Teresa Taniega, is also an officer of I-tech. Thus, when Digiserv was
closed down, some of the employees, presumably non-union members, were rehired by I-tech.
Thus, the closure of Digiserv pending the existence of an assumption order coupled with the
creation of a new corporation performing similar functions as Digiserv leaves no iota of doubt
that the target of the closure are the union member-employees. These factual circumstances
prove that Digitel terminated the services of the affected employees to defeat their security of
tenure. The termination of service was not a valid retrenchment; it was an illegal dismissal of
employees. The Supreme Court ruled that the closure of Digiserv to outsource its operations to I-
tech constitutes ULP under Article 259(c) [248(c)] of the Labor Code. At the height of the labor
dispute, occasioned by Digitel's reluctance to negotiate with the Union, I-tech was formed to
provide, as it did provide, the same services performed by Digiserv, the Union members' nominal
employer.
The principal issue in BPIEU-Davao City-FUBU v. BPI,' is whether or not the act of
respondent BPI to outsource the cashiering, distribution and bookkeeping functions to BPI
Operations Management Corporation (BOMC) is in conformity with the law and the existing
CBA. Particularly in dispute is the validity of the transfer of twelve (12) former FEBTC
employees to BOMC, instead of being absorbed in BPI after the corporate merger. Petitioner
union claims that a union shop agreement is stipulated in the existing CBA. It is unfair labor
practice for employer to outsource the positions in the existing bargaining unit, citing the case of
Shell Oil.2
1
BPI Employees Union-Davao City -FUBU (BPIEU-Davao City-FUBU) v. Bank of the Philippine Islands
(BPI), G.R. No.174912, July 24, 2013.
2
Shell Oil Workers Union v. Shell Oil Company of the Philippines, Ltd., G.R. No. L-28607, May 31,
1971, 39 SCRA 276, 292.
499
CHAPTER FIVE
LABOR RELATIONS
A finding of ULP necessarily requires the alleging party to prove it with substantial
evidence. Unfortunately, the union failed to discharge this burden. Consequently, in ruling that
respondent BPI did not commit ULP, the Supreme Court cited the following ratiocinations:
(1) The union's reliance on the Shell Oil case is misplaced. The rule now is covered by
Article 274 [261]1 of the Labor Code. Clearly, only gross violations of the economic provisions
of the CBA are treated as ULP. Otherwise, they are mere grievances. In the present case, the
alleged violation of the union shop agreement in the CBA, even assuming it was malicious and
flagrant, is not a violation of an economic provision in the agreement.
(2) The provisions relied upon by the union were those articles referring to the
recognition of the union as the sole and exclusive bargaining representative of all rank-and-file
employees, as well as the articles on union security, specifically, the maintenance of membership
in good standing as a condition for continued employment and the union shop clause. It failed to
take into consideration its recognition of the bank's exclusive rights and prerogatives, likewise
provided in the CBA, which included the hiring of employees, promotions, transfers, and
dismissals for just cause and the maintenance of order, discipline and efficiency in its operations.
(3) The union, however, insists that jobs being outsourced to BOMC were included in the
existing bargaining unit, thus, resulting in a reduction of a number of positions in such unit. The
reduction interfered with the employees' right to self-organization because the power of a union
primarily depends on its strength in number. It is incomprehensible how the "reduction of
positions in the collective bargaining unit" interferes with the employees' right to self-
organization because the employees themselves were neither transferred nor dismissed from the
service. BPI stresses that not a single employee or union member was or would be dislocated or
terminated from their employment as a result of the Service Agreement. Neither had it resulted in
any diminution of salaries and benefits nor led to any reduction of union membership. As far as
the twelve (12) former FEBTC employees are concerned, the union failed to substantially prove
that their transfer, made to complete BOMC's service complement, was motivated by ill will,
anti-unionism or bad faith so as to affect or interfere with the employees' right to self-
organization.
(4) It is to be emphasized that contracting out of services is not illegal per se. It is an
exercise of business judgment or management prerogative. Absent proof that the management
acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of
judgment by an employer. In this case, bad faith
1
Article 274 (2611 is entitled 'Jurisdiction of Voluntary Arbitrators a Panel of Voluntary Arbitrators'
where it S provided pertinently as follows: "xxx Accordingly, Violations of a Collective Bargaining
Agreement, except those which are gross in character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under tie Collective Bargaining Agreement. For
purposes of this article, gross Violations of Collective Bargaining Agreement shall mean Wait and/or
malicious refusal to creepy with the economic provisions of such agreement.'
cannot be attributed to BPI because its actions were authorized by CBP Circular No. 1388, Series
of 1993 issued by the Monetary Board of the then Central Bank of the Philippines (now Bangko
Sentral ng Pilipinas).
IV.
COMPANY UNION
1. COMPANY INITIATED, DOMINATED OR ASSISTED UNION.

Paragraph [d]l of Article 259 [248] considers it a ULP to initiate, dominate, assist or
otherwise interfere with the formation or administration of any labor organization, including the
giving of financial or other support to it or its organizers or supporters. Such union is called
"compag union" as its formation, function or administration has been assisted by any act of the
employer defined as ULP under the Labor Code.2
2. A PREJUDICIAL QUESTION.
While generally, the pendency of a ULP case filed against a labor organization participating
in the certification election does not stay the holding thereof, 3 however, the pendency of a formal
charge of company domination against one of the unions which is participating in the
certification election is a prejudicial question that bars the holding thereof until its final
resolution.4
3. SUSPENSION OF CBA FOR A LONG PERIOD.

If warranted by circumstances, a CBA may be suspended for more than the usual 5-year
lifetime thereof. During the period of suspension, the parties may mutually agree that the SEBA's
status shall continue to be recognized as such. The question is, does this prolonged recognition
tantamount to making the SEBA company-dominated? This poser was answered in the negative
in Rivera v. .ffipititu,5 where the CBA between the management of Philippine Airlines (PAL)
and the SEBA, Philippine Airlines Employees Association (PALEA), with expiry date of
September 30, 2000, was mutually agreed by the parties to be suspended until 2008, to prevent
the closure of PAL because of severe financial losses. It was accordingly stipulated in the
agreement of suspension that:
"a. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of the
regular rank-and-file ground employees of the Company;"
1
"(d)To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor
organization, including the giving of financial or other support to I or its organizers or supporters[r
2
Article 212(i), Labor Code; Section 1 RI, Rule I, Balk V, Rules to Implement the Labor Code.
3
Barrera v. CR, G,R, No. L-32853, Sept 25, 1981107 SCRA 596.
4
United CMG Workers Union v. Bureau of labor Reis, G.R. No. L-51337, Math 221984.
5
G.R. No. 135547, Jai. 23,2002
501
CHAPTER FIVE
LABOR. RELATIONS
Petitioners allege that the 10-year suspension of the CBA under the PAL-PALEA
agreement virtually installed PALEA as a company union for said period, amounting to ULP, in
violation of Article 265 [253-A] of the Labor Code mandating that a SEBA serves for five years
only. The Supreme Court, however, disagreed and pronounced that the PAL-PALEA agreement
dated September 27, 1998, is a valid exercise of the freedom to contract. Under the principle of
inviolability of contracts guaranteed by the Constitution, the contract must be upheld."
4. ILLUSTRATIVE CASES OF COMPANY UNION.

In Kapisanan v. Hamilton,' there were two unions existing in the company, namely:
Kapisanan ng mga Manggagawa ng Alak (NAFLU), and respondent Hamilton Workers' Union,
(Workers' Union). The company preferred the latter union over the former. It asked the president
of the former to dissolve NAFLU and when he refused, he was dismissed. Subsequently, some
members of NAFLU resigned therefrom and joined the Workers' Union because otherwise they
would be dismissed by the company and those who remained affiliated with NAFLU were
allowed to work only two (2) days a week. Later, 52 employees who were members of NAFLU
were also terminated for refusing to join the Workers' Union. Because of these circumstances,
the Supreme Court declared that the Workers' Union is a company union.
In Oceanic Air Products v. GR,2 several employees were forced by company officers to join
a union. No member of the union had been dismissed despite the implementation of a
retrenchment policy which resulted in the dismissal of other employees who were officers and
members of another union. After the dismissals, the company hired several laborers. All these
circumstances indicate that the union is company-dominated.
In Philippine American Cigar v. Philippine American Cigar and Cigarette Manufacturing

Co.,3 it was pronounced that one indication that the union is company-dominated is the act of the
employer in securing authorization cards from employees and by immediately granting the union
exclusive recognition as a bargaining agent and entering into a contract therewith although it was
not the duly authorized representative of the employees. Another is when the union approached
management rather than the employees in getting the union organized and management extended
the requested assistance to the union. The acts of the company in soliciting membership and
allowing union activities to be held during working time and coercing employees to join the
union under threat of dismissal or demotion are clear indicia of company domination.
1
Kapisanan Ng Mga Manggagavra Ng AI* v. Hamilton Distillery Company, G.R. No. L-18112, Oct. 30,
1962, 6 SCRA 367.
2
GR No. 18704,Jan. 31, 1963, 7 SCRA 208.
3
Philippine American Cigar and Cigarette Factory Workers Independent Union v. Philippine Amok-di
Cigar and Cigarette Manufacturing Co., G.R No. L-18364, Feb. 28, 1963, 7 SCRA 375.
In Davao Free Workers Front v. CTR,1 the following acts of respondent employer, 7-UP
Bottling Company of the Philippines at its Davao branch, were cited as indicia that the union was
company-dominated: It refused to bargain with petitioner union; it interfered with and coerced its
members to vote for its handpicked candidate as president of petitioner union; it required the
members of petitioner union to join the Seven-Up Employees Association, a newly organized
labor union obviously sponsored and favored by it with which it immediately executed a CBA
granting the members of such new union fringe benefits while refusing to bargain with petitioner
union regarding the renewal of their just-expired contract and instead foisting upon petitioner
union its unilateral version of a CBA; and it filed a notice of lock-out and refused entry to
members of petitioner union when the latter refused to accept its unilateral contract version.
These union-busting and discriminatory acts led petitioner union justifiably to declare a strike
against respondents' unfair labor practices.
V.
THREE (3) SEPARATE LEGAL CONCEPTS
TREATED IN PARAGRAPH (E), ARTICLE 259 [248]
1. THREE SENTENCES, THREE SEPARATE CONCEPTS.
Paragraph (e) of Article 259 [248] states:

"(e) To discriminate in regard to wages, hours of work and other terms and conditions
of employment in order to encourage or discourage membership in any labor organization.
Nothing in this Code or in any other law shall stop the parties from requiring membership in
a recognized collective bargaining agent as a condition for employment, except those
employees who are already members of another union at the time of the signing of the
collective bargaining agreement. Employees of an appropriate bargaining unit who are not
members of the recognized collective bargaining agent may be assessed a reasonable fee
equivalent to the dues and other fees paid by members of the recognized collective
bargaining agent, if such non-union members accept the benefits under the collective
bargaining agreement: Provided, that the individual authorization required under Article 250
[2411, paragraph (o) of this Code shall not apply to the non-members of the recognized
collective bargaining agent[.]"
The three (3) sentences comprising above paragraph [e] treat of three (3) separate labor
law concepts,2 to wit:
1
G.R. No. L-29356, Oct 31, 1974, 60 SCRA 408.
2
Mole 259(e) [248(e)) of the Labor Code is substantially based on a U.S. law (See National Labor
Relations Act, 29 U.S. Codes 158- Unfair Labor practices, Sec. 8(a) (3) thereof).
503
CHAPTER FIVE
LABOR RELATIONS
1. Discrimination. - This is found in the first sentence thereof which considers as ULP, to
discriminate in regard to wages, hours of work and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization.
2. Union security clause. — This is embodied in the second sentence thereof which states
that "(n)othing in this Code or in any other law shall stop the parties from requiring
membership in a recognized collective bargaining agent as a condition for employment,
except those employees who are already members of another union at the time of the
signing of the collective bargaining agreement."
3. Agency fee. - This is described in the third sentence thereof in that "(e)mployees of an
appropriate bargaining unit who are not members of the recognized collective bargaining
agent may be assessed a reasonable fee equivalent to the dues and other fees paid by
members of the recognized collective bargaining agent, if such non-union members
accept the benefits under the collective bargaining agreement, provided, that the
individual authorization required under Article 251 [242], paragraph (o) of this Code
shall not apply to the non-members of the recognized collective bargaining agent"
Except for Agency Fee which has been earlier discussed under the topic "D. RIGHTS
OF LABOR ORGANIZATIONS," the first two of the above concepts are discussed in details
below.
V-1
DISCRIMINATION
1. CONCEPT.
Discrimination has been defined as the failure to treat all persons equally when no reasonable
distinction can be found between those favored and those not favored.' There is discrimination
only when one is denied privileges which are granted to others under similar conditions and
circumstances.2 Thus, before a claim for discrimination can prosper, it must be established that
first, there is no reasonable distinction or classification that can be obtained between persons
belonging to the same class; and, second, persons belonging to the same class have not been
treated alike.3 It must be stressed, however, that discrimination per se is not
1
Black's Law Dictionary, 6th Edition, p. 467; Sugue v. Triumph International (Phils.), Inc., G.R. Nos.
164804 & 164784, Jan. 30, 2009; Portuguez v. GSIS Family Bank [Comsavings Bank], GR No.
169570, March 22007, citing Philippine American Life Gen. Insurance Coy. Gran*, G.R. No. 156963,
Nov. 11,2004,442 SCRA 274,284-285.
2
Getz [Philippines], Inc. v. Philippi.* Labor Organization, GR. No.1-5206, April 29, 1953, 92 Phi. 1014.
3
We and Co., Inc. v. Wise and Co., Inc. Employees Union-NATU, G.R. No. 87672, Oct. 13, 1989, 178
KRA 536, 539.

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378

TOPICS PER SYLLABUS

D. Rights of labor organizations

E. Unfair Labor Practices

F. Peaceful concerted activities

assist labor organizations called "employees' organizations" of their own choosing.'

3. RIGHT OF CERTAIN SPECIFIC WORKERS.

a. Supervisors (a.k.a. first-line managers).

e. Members or employees of cooperatives.

f. Employees of legitimate contractors.

382 BAR REVIEWER ON LABOR LAW

5. SOME PRINCIPLES ON GOVERNMENT EMPLOYEES' RIGHT TO SELF-

Article 255 [2451 of the Labor Code provides:

"Article 255 1.2451. Ineligibility of Managerial Employees to Join rug Labor

2. TYPES OF MANAGERIAL EMPLOYEES.

Top Management is composed of a comparatively small group of executives. It is

First-Line Management is the lowest level in an organization at which individuals are

3. NOT ALL MANAGERIAL EMPLOYEES ARE PROHIBITED FROM FORMING,

1) The "managers" per se composed of top and middle managers; and

1. SUPERVISORS MAY ORGANIZE OWN UNION BUT ARE PROHIBITED FROM

1. WHO ARE CONFIDENTIAL EMPLOYEES?

386 BAR REVIEWER ON LABOR LAW

A confidential employee may be a rank-and-file or supervisory employee but because in

However, the mere access of an employee to confidential labor relations information

2. DOCTRINE OF NECESSARY IMPLICATION.

3. CONFIDENTIAL EMPLOYEES NOT ALLOWED TO JOIN UNIONS.

1. Accounting personnel and radio and telegraph operators;3

388 BAR REVIEWER ON IABOR LAW

5. CONFIDENTIAL EMPLOYEES ALLOWED TO JOIN UNIONS.

1. INAPPLICABILITY OF THE DOCTRINE

390 BAR REVIEWER ON LABOR LAW

EFFECT OF INCLUSION AS MEMBERS OF EMPLOYEES

Article 256 [245-A]. Effect of Inclusion as Members of Employees

3. EXCLUDED MEMBERS AUTOMATICALLY REMOVED BY OPERATION OF

4. MIXED MEMBERSHIP, A PROHIBITED GROUND TO CANCEL UNION

392 BAR REVIEWER ON LABOR LAW

2. MEANING OF RIGHT TO SELF ORGANIZATION.

3. OBJECT OF THE LAW.

4. RIGHT TO UNION MEMBERSHIP.

c. Right to join a union acquired from first day of employment.

5. RIGHTS OF UNION MEMBERS UNDER ARTICLE 250 [241].

1) Right against arbitrary, oppressive or excessive fees, fines and forfeitures;

396 BAR REVIEWER ON LABOR LAW

Political rights include the following:

Right to participate in decision-making process includes the following:

1. NEED TO DISCUSS HOW TO ORGANIZE A UNION.

2. "LABOR ORGANIZATION" AND "UNION," DEFINED.

3. TWO (2) BASIC PURPOSES OF A LABOR ORGANIZATION.

1. for collective bargaining; and

398 BAR REVIEWER ON LABOR LAW

(1) Independent registration;1 and

5. ONLY FEDERATION OR NATIONAL UNION MAY DIRECTLY CREATE A

6. TRADE UNION CENTERS NOT ALLOWED.

Criteria Independent Chartering

400 BAR REVIEWER ON LABOR LAW

1. UNION VIS-A-VIS ITS MEMBERS.

2. MOTHER UNION V15-A- V/S AFFILIATE OR LOCAL CHAPTER/CHARTERED

In relation to an affiliate or local chapter/chartered local, the federation or national union

5. DISTINCTIONS AS TO AFFILIATION & DISAFFILIATION.

Criteria Independently Registered Union Local Chapter or Chartered Local

6. SOME PRINCIPLES ON AFFILIATION.

402 BAR REVIEWER 061 LABOR1AW

7. SOME PRINCIPLES ON DISAFFILIATION.