KIOK LOY doing business under name and style Sweden Ice Cream Plant v.

NLRC
G.R. NO. | DATE

TICKER: refusal to the duty to bargain collectively

FACTS:
In a certification election held, the Pambansang Kilusan ng Paggawa (“Union”), a legitimate labor
federation, won and was subsequently certified by the Bureau of Labor Relations as the sole and
exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant
(“Company”). Thereafter, the Union furnished the Company with two copies of its proposed CBA
and requested the Company for its counter proposals. However, even after several requests, it
remained ignored and unacted upon by the Company.

The Union then filed a Notice of Strike with the BLR on the ground of unresolved economic issues
in collective bargaining. Having no amicable settlement arrived at, the BLR certified the case to
NLRC for compulsory arbitration.

NLRC: The Company is declared GUILTY of unjustified refusal to bargain.

ISSUE:
Whether or not NLRC’s resolution is proper

SUPREME COURT
YES.

Collective bargaining which is defined as negotiations towards a collective agreement, is one of the
democratic frameworks under the New Labor Code, designed to stabilize the relation between
labor and management and to create a climate of sound and stable industrial peace. It is a mutual
responsibility of the employer and the Union and is characterized as a legal obligation. So much so
that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to
refuse "to meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work, and all other terms and conditions
of employment including proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if requested by either party."

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any
legal duty to initiate contract negotiation. The mechanics of collective bargaining is set in motion
only when the following jurisdictional preconditions are present, namely, (1) possession of the
status of majority representation of the employees' representative in accordance with any of the
means of selection or designation provided for by the Labor Code; (2) proof of majority
representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor Code . . .
all of which preconditions are undisputedly present in the instant case.

It has been established in this case that (1) respondent Union was a duly certified bargaining
agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed
Collective Bargaining Agreement, to the Company not only once but twice which were left
unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all of
which conclusively indicate lack of a sincere desire to negotiate. A Company's refusal to make
counter proposal if considered in relation to the entire bargaining process, may indicate bad faith
and this is specially true where the Union's request for a counter proposal is left unanswered.
We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to
precipitately accept or agree to the proposals of the other. But an erring party should not be
tolerated and allowed with impunity to resort to schemes feigning negotiations by going through
empty gestures.

PETITION IS DISMISSED.

Holy Cross of Davao College, Inc v Holy Cross of Davao Faculty Union - KAMAPI
G.R. NO. | DATE

TICKER:

FACTS:
Petitioner and Holy Cross of Davao College Faculty Union - KAMAPI (Union) entered into a
CBA providing for faculty development scholarship for academic teaching personnel.
Petitioner received a letter of invitation for the 1999 Monbusho scholarship grant offered and
sponsored by the Japanese government.

ISSUE: Whether Jean Legaspi is entitled to grant-in aid benefits in light of the CBA between
the parties

SUPREME COURT:
To begin with, any doubt or ambiguity in the contract (CBA) between management and the
union members should be resolved in favor of the latter. This is pursuant to Article 1702 of the
Civil Code which provides: "(I)n case of doubt, all labor legislation and all labor contracts shall
be construed in favor of the safety and decent living for the laborer. “

The provisions in the CBA state that academic teaching personnel, like Jean Legaspi, as
recipient of a scholarship grant are entitled to a leave of absence with a grant-in-aid equivalent
to their monthly salary and allowance, provided such grant is to promote their professional
growth or to enhance their studies in institutions of higher learning. Such provisions need no
interpretation for they are clear. Contracts which are not ambiguous are to be interpreted
according to their literal meaning and not beyond their obvious intendment.

In Mactan Workers Union vs. Aboitiz, we held that "the terms and conditions of a collective
bargainingcontract constitute the law between the parties. Those who are entitled to its
benefits can invoke its provisions. In the event that an obligation therein imposed is not
fulfilled, the aggrieved party has the right to go to court for redress.

UFE-DFA-KMU v Nestle

GR 158944-45 (2006)

FACTS:
UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of Nestlé
belonging to the latter’s Alabang and Cabuyao plants. the existing collective bargaining agreement
(CBA) between Nestlé and UFE-DFA-KMU4 was to end on 5 June 2001. Both express their intentions
to enter into another CBA and proceed with the negotiations. However, the respondent extends its
concern to the Cabuyao Division through a letter that the Retirement Plan, Incidental Straight Duty Pay
and Calling Pay Premium, are by their very nature not proper subjects of CBA negotiations and
therefore shall be excluded therefrom.

Both parties submitted the negotiations to NCMB in order to reach resolution but after 15 meetings it
failed to produce a CBA. With this the petitioner sent a notice of strike to the respondent for the reason
of bargaining deadlock pertaining to economic issues. It also contends that the respondent is alleged to
commit ULP for bargaining in bad faith by setting pre-conditions in the ground rules and/or refusing to
include the issue of the Retirement Plan in the CBA negotiations. The strike proceeded in which the
respondent sought remedy to the Sec. of DOLE, Sto. Tomas. It them issued a back-to-work order but
was unheeded by the petitioner. In their position order, petitioner contends that the sec. of DOLE is
without jurisdiction of the matter and alleged ULP against the respondent. While the respondent stood
on its ground that the retirement plan was not to be included in the CBA. DOLE ruled in favor of the
respondent ang held that the present Retirement Plan at the Nestlé Cabuyao Plant is a unilateral grant
that the parties have expressly so recognized subsequent to the Supreme Court's ruling in Nestlé,
Phils. Inc. v. NLRC, G.R. No. 90231, February 4, 1991, and is therefore not a mandatory subject for
bargaining

In its appeal to CA, petitioner was granted favor and declared the ruling of DOLE annulled and set
aside. However, on the motion for reconsideration of both parties were denied and thus petition before
this court is filed. Nestlé essentially assailed that part of the decision finding the DOLE Secretary to
have gravely abused her discretion amounting to lack or excess of jurisdiction when she ruled that the
Retirement Plan was not a valid issue to be tackled during the CBA negotiations; UFE-DFA-KMU, in
contrast, questioned the appellate court’s decision finding Nestlé free and clear of any unfair labor
practice.

ISSUE:

WON the inclusion of the Retirement Plan in the CBA is valid. (dito na ako nag-focus kasi purpose ng
CBA yung topic niya sa book)

SUPREME COURT:

The present issue is not one of first impression. In Nestlé Philippines, Inc. v. NLRC, ironically involving
the same parties herein, this Court has had the occasion to affirm that a retirement plan is consensual
in nature.

The fact that the retirement plan is non-contributory, i.e., that the employees contribute nothing to the
operation of the plan, does not make it a non-issue in the CBA negotiations. As a matter of fact, almost
all of the benefits that the petitioner has granted to its employees under the CBA - salary increases, rice
allowances, midyear bonuses, 13th and 14th month pay, seniority pay, medical and hospitalization
plans, health and dental services, vacation, sick & other leaves with pay - are non-contributory benefits.
Since the retirement plan has been an integral part of the CBA since 1972, the Union's demand to
increase the benefits due the employees under said plan, is a valid CBA issue.

In the case at bar, it cannot be denied that the CBA that was about to expire at that time contained
provisions respecting the Retirement Plan. As the latter benefit was already subject of the existing CBA,
the members of UFE-DFA-KMU were only exercising their prerogative to bargain or renegotiate for the
improvement of the terms of the Retirement Plan just like they would for all the other economic, as well
as non-economic benefits previously enjoyed by them.

Precisely, the purpose of collective bargaining is the acquisition or attainment of the best possible
covenants or terms relating to economic and non-economic benefits granted by employers and due the
employees. The Labor Code has actually imposed a mutual obligation of both parties, this duty to
bargain collectively.

And, in demanding that the terms of the Retirement Plan be opened for renegotiation, the members of
UFE-DFA-KMU are acting well within their rights as we have, indeed, declared that the Retirement Plan
is consensual in character; and so, negotiable

Nestlé further rationalizes that a ruling declaring the Retirement Plan a valid CBA negotiation issue will
inspire other bargaining units to demand for greater benefits in accordance with their respective
appetites. Suffice it to say that the consensual nature of the Retirement Plan neither gives the union
members the unfettered right nor the unbridled prerogative to demand more than what the company
can viably give.

UFE-DFA-KMU v. Nestle
G.R. Nos. 158930-31 | March 3, 2008

UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of
Nestlé belonging to the latter’s Alabang and Cabuyao plants. On 4 April 2001, as the existing
CBA between Nestlé and UFE-DFA-KMU was to end on 5 June 2001, the Presidents of the
Alabang and Cabuyao Divisions of UFE-DFA-KMU informed Nestlé of their intent to "open
[our] new Collective Bargaining Negotiation for the year 2001-2004 x x x as early as June
2001." In response thereto, Nestlé informed them that it was also preparing its own counter-
proposal and proposed ground rules to govern the impending conduct of the CBA
negotiations.

Nestlé reiterated its stance that "unilateral grants, one-time company grants, company-
initiated policies and programs, which include, but are not limited to the Retirement Plan,
Incidental Straight Duty Pay and Calling Pay Premium, are by their very nature not proper
subjects of CBA negotiations and therefore shall be excluded therefrom. Dialogue between
the company and the union thereafter ensued.

Conciliation proceedings proved ineffective, and the UFE-DFA-KMU filed a Notice of Strike
with the NCMB, complaining, in essence, of a bargaining deadlock pertaining to economic
issues as well as alleged unfair labor practices. Secretary Sto. Tomas assumed jurisdiction
over the labor dispute and enjoined the strike. It directed the parties to desist from committing
any act that might lead to the further deterioration of the current labor relations situation. The
parties are further directed to meet and convene for the discussion of the union proposals and
company counter-proposals before the NCMB. Despite these, the employee members of
UFE-DFA-KMU at Nestlé’s Cabuyao Plant went on strike. Notwithstanding the Return-to-Work
Order, the members of UFE-DFA-KMU continued with their strike, thus, prompting Sec. Sto.
Tomas to seek the assistance of the Philippine National Police (PNP) for the enforcement of
said order.

On 7 February 2002, Nestlé and UFE-DFA-KMU filed their respective position papers. Nestlé
addressed several issues concerning economic provisions of the CBA as well as the non-
inclusion of the issue of the Retirement Plan in the collective bargaining negotiations. The
union posited that Sec. Sto. Tomas "could only assume jurisdiction over the issues mentioned
in the notice of strike subject of the current dispute,"17 and that the Amended Notice of Strike
it filed did not cite, as one of the grounds, the CBA deadlock. Secretary Sto. Tomas denied
the motion for reconsideration of UFE-DFA-KMU.

Thus, UFE-DFA-KMU filed a Petition for Certiorari before the CA alleging that Sec. Sto.
Tomas committed grave abuse of discretion amounting to lack or excess of jurisdiction when
she issued the Orders of 11 February 2002 and 8 March 2002.

Acting DOLE Secretary Arturo D. Brion, ruled that the present Retirement Plan at the Nestlé
Cabuyao Plant is a unilateral grant that the parties have expressly so recognized is not a
mandatory subject for bargaining. The parties are also directed to secure the best applicable
terms of the recently concluded CBSs between Nestlé Phils. Inc. and it eight (8) other
bargaining units, and to adopt these as the terms and conditions of the Nestlé Cabuyao Plant
CBA. Nestlé essentially assailed that part of the decision finding the DOLE Secretary to have
gravely abused her discretion amounting to lack or excess of jurisdiction when she ruled that
the Retirement Plan was not a valid issue to be tackled during the CBA negotiations; UFE-
DFA-KMU, in contrast, questioned the appellate court’s decision finding Nestlé free and clear
of any unfair labor practice.

ISSUE: Whether or not the DOLE Secretary committed GADALEJ when she ruled that the
Retirement Plan was not a valid issue to be tackled during the CBA negotiations

The duty to bargain collectively is mandated by Articles 252 and 253 of the Labor Code, as
amended, which state –

ART. 252. Meaning of duty to bargain collectively. – The duty 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 make any concession.

ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. –
When there is a collective bargaining agreement, the duty to bargain collectively shall also
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 of conditions of the existing agreement
during the 60-day period and/or until a new agreement is reached by the parties.

Obviously, the purpose of collective bargaining is the reaching of an agreement resulting in a

contract binding on the parties; but the failure to reach an agreement after negotiations have
continued for a reasonable period does not establish a lack of good faith. The statutes invite
and contemplate a collective bargaining contract, but they do not compel one. The duty to
bargain does not include the obligation to reach an agreement.

The crucial question, therefore, of whether or not a party has met his statutory duty to bargain
in good faith typically turns on the facts of the individual case. As we have said, there is no per
se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the
facts. To some degree, the question of good faith may be a question of credibility. The effect
of an employer’s or a union’s individual actions is not the test of good-faith bargaining, but the
impact of all such occasions or actions, considered as a whole, and the inferences fairly
drawn therefrom collectively may offer a basis for the finding of the NLRC.26

For a charge of unfair labor practice to prosper, it must be shown that Nestlé 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 x x x"27 in disclaiming unilateral grants as proper subjects
in their collective bargaining negotiations. While the law makes it an obligation for the
employer and the employees to bargain collectively with each other, such compulsion does
not include the commitment to precipitately accept or agree to the proposals of the other. All it
contemplates is that both parties should approach the negotiation with an open mind and
make reasonable effort to reach a common ground of agreement.

Herein, the union merely bases its claim of refusal to bargain on a letter28 dated 29 May 2001
written by Nestlé where the latter laid down its position that "unilateral grants, one-time
company grants, company-initiated policies and programs, which include, but are not limited
to the Retirement Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their
very nature not proper subjects of CBA negotiations and therefore shall be excluded
therefrom." But as we have stated in this Court’s Decision, said letter is not tantamount to
refusal to bargain. In thinking to exclude the issue of Retirement Plan from the CBA
negotiations, Nestlé, cannot be faulted for considering the same benefit as unilaterally
granted, considering that eight out of nine bargaining units have allegedly agreed to treat the
Retirement Plan as a unilaterally granted benefit. This is not a case where the employer
exhibited an indifferent attitude towards collective bargaining, because the negotiations were
not the unilateral activity of the bargaining representative. Nestlé’s desire to settle the dispute
and proceed with the negotiation being evident in its cry for compulsory arbitration is proof
enough of its exertion of reasonable effort at good-faith bargaining.

In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The
corporation simply wanted to exclude the Retirement Plan from the issues to be taken up
during CBA negotiations, on the postulation that such was in the nature of a unilaterally
granted benefit. An employer’s steadfast insistence to exclude a particular substantive
provision is no different from a bargaining representative’s perseverance to include one that
they deem of absolute necessity. Indeed, an adamant insistence on a bargaining position to
the point where the negotiations reach an impasse does not establish bad faith.[fn24 p.10] It
is but natural that at negotiations, management and labor adopt positions or make demands
and offer proposals and counter-proposals. On account of the importance of the economic
issue proposed by UFE-DFA-KMU, Nestle could have refused to bargain with the former – but
it did not. And the management’s firm stand against the issue of the Retirement Plan did not
mean that it was bargaining in bad faith. It had a right to insist on its position to the point of
stalemate.

GENERAL MILLING CORP v. CA

G.R. No. 146728, February 11, 2004

FACTS: Petitioner General Milling Corporation (GMC) employed 190 workers. They were all
members of private respondent General Milling Corporation Independent Labor, a duly
certified bargaining agent.

GMC and the union concluded a collective bargaining agreement (CBA) which included the
issue of representation effective for a term of three years. The CBA was effective for three
years retroactive to December 1, 1988. Hence, it would expire on November 30, 1991.

On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a
proposed CBA, with a request that a counter-proposal be submitted within ten (10) days.

As early as October 1991, however, GMC had received collective and individual letters from
workers who stated that they had withdrawn from their union membership, on grounds of
religious affiliation and personal differences. Believing that the union no longer had standing
to negotiate a CBA, GMC did not send any counter-proposal.

GMC wrote a letter to the union's officers, Rito Mangubat and Victor Lastimoso and said that it
felt there was no basis to negotiate with a union which no longer existed, but that
management was willing to dialogue with them on matters of common concern and was open
to suggestions on how the company may improve its operations.

The union officers wrote a letter disclaiming any massive disaffiliation or resignation from the
union and submitted a manifesto, signed by its members, stating that they had not withdrawn
from the union.

GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The union
protested and requested GMC to submit the matter to the grievance procedure provided in the
CBA. GMC, however, advised the union to refer to their previous letter.

Thus, the union filed a complaint against GMC with the NLRC, Arbitration Division, Cebu City.
The complaint alleged unfair labor practice on the part of GMC for: (1) refusal to bargain
collectively; (2) interference with the right to self-organization; and (3) discrimination. The
labor arbiter dismissed the case with the recommendation that a petition for certification
election be held to determine if the union still enjoyed the support of the workers.
The union appealed to the NLRC. NLRC ruled in favor of the union and ordered GMC to abide
by the CBA draft that the union proposed for a period of two (2) years beginning December 1,
1991, the date when the original CBA ended, to November 30, 1993.

However, on GMC's motion for reconsideration, the NLRC set aside its decision. It found
GMC's doubts as to the status of the union justified and the allegation of coercion exerted by
GMC on the union's members to resign unfounded. Hence, the union filed a petition for
certiorari before the Court of Appeals.

The CA ruled in favor of the union.

ISSUES:
1. Whether or not GMC is guilty of unfair labor practice for violating the duty to bargain
collectively and/or interfering with the right of its employees to self-organization (p. 548 & 557)
2. Whether or not the it is still the union which is the certified collective bargaining agent (p.
584)

HELD:
1. YES.

ART. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit
any of the following unfair labor practice:
(g) To violate the duty to bargain collectively as prescribed by this Code;

Article 252 of the Labor Code elucidates the meaning of the phrase "duty to bargain
collectively," thus:
ART. 252. Meaning of duty to bargain collectively. - The duty 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.

We have held that the crucial question whether or not a party has met his statutory duty to
bargain in good faith typically turns on the facts of the individual case. There is no per se test
of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts.
The effect of an employer's or a union's actions individually is not the test of good-faith
bargaining, but the impact of all such occasions or actions, considered as a whole.

Under Article 252, both parties are required to perform their mutual obligation to meet and
convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement. The union lived up to this obligation when it presented proposals for a new CBA to
GMC within three (3) years from the effectivity of the original CBA. But GMC failed in its duty
under Article 252. What it did was to devise a flimsy excuse, by questioning the existence of
the union and the status of its membership to prevent any negotiation.

It bears stressing that the procedure in collective bargaining prescribed by the Code is
mandatory because of the basic interest of the state in ensuring lasting industrial peace. Thus:
ART. 250. Procedure in collective bargaining. - The following procedures shall be
observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice
upon the other party with a statement of its proposals. The other party shall make a
 reply thereto not later than ten (10) calendar days from receipt of such notice.
(Underscoring supplied.)

GMC's failure to make a timely reply to the proposals presented by the union is indicative of
its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer
represented the workers, was mainly dilatory as it turned out to be utterly baseless.

We hold that GMC's refusal to make a counter-proposal to the union's proposal for CBA
negotiation is an indication of its 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.

Failing to comply with the mandatory obligation to submit a reply to the union's proposals,
GMC violated its duty to bargain collectively, making it liable for unfair labor practice. Perforce,
the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of
jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice.

2. YES.

ART. 253-A. Terms of a collective bargaining agreement. - Any Collective Bargaining

Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated
not later than three (3) years after its execution....

The law mandates that the representation provision of a CBA should last for five years. The
relation between labor and management should be undisturbed until the last 60 days of the
fifth year. Hence, it is indisputable that when the union requested for a renegotiation of the
economic terms of the CBA on November 29, 1991, it was still the certified collective
bargaining agent of the workers, because it was seeking said renegotiation within five (5)
years from the date of effectivity of the CBA on December 1, 1988. The union's proposal was
also submitted within the prescribed 3-year period from the date of effectivity of the CBA,
albeit just before the last day of said period. It was obvious that GMC had no valid reason to
refuse to negotiate in good faith with the union. For refusing to send a counter-proposal to the
union and to bargain anew on the economic terms of the CBA, the company committed an
unfair labor practice under Article 248 of the Labor Code.

COLEGIO DE SAN JUAN DE LETRAN v. ASSOCIATION OF EMPLOYEES AND FACULTY

OF LETRAN and ELEONOR AMBAS

G.R. No. 141471 September 18, 2000

Facts: Two year before the expiration of CBA, petitioner and respondents began negotiations
for a new one. The union changed officers and respondent ELEONOR AMBAS was elected
as President. She wanted to continue the negotiation but the petitioner submitted that the new
CBA is already prepared for signing by the parties. The union denied the claim.

The President, Ms. Ambas then received a notice from superiors, changing her schedule from
Monday – Friday to Tuesday – Saturday. She requested that the issue be submitted for
grievance machinery as provided under old CBA. The petitioner denied the request and
dismissed respondent Ambas for insubordination.
The petitioner then stopped the negotiations after it purportedly received information that a
new group of employees had filed a petition for certification election

The respondent Union filed a notice of strike before the NCMB. The Strike was carried out.
Public respondent the Secretary of Labor and Employment assumed jurisdiction and ordered
all striking employees including the union president to return to work and for petitioner to
accept them back under the same terms and conditions before the actual strike. Petitioner
readmitted the striking members except Ambas.

Union filed for a complaint for unfair labor practice before DOLE. Dole ruled in favor of
respondent. CA affirmed.

Issue:

1. W/n the Petitioner is guilty of unfair labor practice

2. W/n the dismissal of Union president constitutes violation of worker’s constitutional right
to self-organization

Held:

1. Yes. The petitioner failed to perform its duty to bargain as provided for under Article 252
of the Labor Code – “…mutual obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement….”.

The petitioner failed to reply promptly to Union’s proposals and caused the stoppage of
negotiation with a mere information of new certification election filed by another group of
employees which is not valid due to contract bar rule. They also stripped off the Union of
strong leadership for dismissing its President. The petitioner devised ways and means in
order to prevent the negotiation.

2. Ms. Ambas was dismissed in order to strip the union of a leader who would fight for the
right of her co-workers at the bargaining table. The management has the prerogative to
discipline its employees for insubordination. But when the exercise of such management right
tends to interfere with the employees' right to self-organization, it amounts to union-busting
and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly designed to
frustrate the Union in its desire to forge a new CBA with the College that is reflective of the
true wishes and aspirations of the Union members. Her dismissal was merely a subterfuge to
get rid of her, which smacks of a pre-conceived plan to oust her from the premises of the
College.

ASSOCIATED LABOR UNIONS (ALU) v. HON. PURA FERRER-CALLEJA

G.R. No. 82260 | 1989-07-19

FACTS:
Petitioner Associated Labor Unions (ALU) instituted this special civil action for certiorari and
prohibition to overturn the decision of the respondent director, which ordered the holding of a
certification election among the rank-and-file workers of the private respondent GAW
Trading, Inc.

ALU, through its Regional Vice-President Teofanio C. Nunez, informed GAW Trading, Inc.
that majority of the latter's employees have authorized ALU to be their sole and exclusive
bargaining representative, and requested GAW Trading Inc. for a conference for the
execution of an initial Collective Bargaining Agreement (CBA). GAW Trading Inc. thus
recognized ALU as the sole and exclusive bargaining agent for the majority of its employees
and then executed the Collective Bargaining Agreement two days thereafter.

The Southern Philippines Federation of Labor (SPFL) together with Nagkahiusang

Mamumuo sa GAW (NAMGAW) undertook a strike after it failed to get the management of
GAW Trading Inc. to sit for a conference respecting its demands in an effort to pressure GAW
Trading Inc. to make a turnabout of its standing recognition of ALU as the sole and exclusive
bargaining representative of its employees, as to which was held illegal by Labor Arbiter
Bonifacio B. Tumamak.

GAW Lumad Labor Union (GALLU-PSSLU) Federation filed a Certification Election petition
but, as found by Med-Arbiter Candido M. Cumba in its Order, without having complied the
subscription requirement.

Bureau of Labor Relations Director Cresenciano B. Trajano, rendered a Decision granting

ALU's appeal (Motion for Reconsideration) and set aside the questioned Med-Arbiter Order on
the ground that the CBA has been effective and valid and the contract bar rule applicable.

The aforesaid decision of then Director Trajano was thereafter reversed by respondent
director in her aforecited decision which is now assailed in this action. A motion for
reconsideration of ALU appears to have been disregarded, hence, its present resort grounded
on grave abuse of discretion by public respondent.

Public respondent ordered the holding of a certification election, ruling that the "contract bar
rule" relied upon by her predecessor does not apply in the present controversy. According to
the decision of said respondent, the collective bargaining agreement involved herein is
defective. It was further observed that "(t)here is no proof tending to show that the CBA has
been posted in at least two conspicuous places in the establishment at least five days before
its ratification and that it has been ratified by the majority of the employees in the bargaining
unit."
ISSUE:
Whether or not the collective bargaining agreement between ALU and GAW Trading Inc. is
valid

SUPREME COURT:
No, the Court yields the conclusion that the collective bargaining agreement in question is
indeed defective.

(Page 549; Jurisdictional Preconditions in Collective Bargaining)

The Court has previously held that the mechanics of collective bargaining are set in motion
only when the following jurisdictional preconditions are present, namely, (1) possession of the
status of majority representation by the employees' representative in accordance with any of
the means of selection and/or designation provided for by the Labor Code; (2) proof of
majority representation; and (3) a demand to bargain under Article 251, paragraph (a), of the
New Labor Code.

In the present case, the standing of petitioner as an exclusive bargaining representative is

dubious, to say the least. It may be recalled that respondent company, in a letter dated May
12, 1986 and addressed to petitioner, merely indicated that it was "not against the desire of
(its) workers" and required petitioner to present proof that it was supported by the majority
thereof in a meeting to be held on the same date. The only express recognition of petitioner
as said employees' bargaining representative that the Court sees in the records is in the
collective bargaining agreement entered into two days thereafter. Evidently, there was
precipitate haste on the part of respondent company in recognizing petitioner union, which
recognition appears to have been based on the self-serving claim of the latter that it had the
support of the majority of the employees in the bargaining unit.

Furthermore, at the time of the supposed recognition, the employer was obviously aware that
there were other unions existing in the unit. The unusual promptitude in the recognition of
petitioner union by respondent company as the exclusive bargaining representative of the
workers in GAW Trading, Inc. under the fluid and amorphous circumstances then obtaining,
was decidedly unwarranted and improvident.

(Page 553; Posting of CBA is Employer’s Responsibility)

The posting of copies of the collective bargaining agreement is the responsibility of the
employer which can easily comply with the requirement through a mere mechanical act. The
fact that there were "no impartial members of the unit" is immaterial. The purpose of the
requirement is precisely to inform the employees in the bargaining unit of the contents of said
agreement so that they could intelligently decide whether to accept the same or not.

The assembly of the members of ALU wherein the agreement in question was allegedly
explained does not cure the defect. The contract is intended for all the employees and not
only for the members of the purported representative alone. It may even be said that the need
to inform the non-members of the terms thereof is more exigent and compelling since, in all
likelihood, their contact with the persons who are supposed to represent them is limited.
Moreover, to repeat, there was an apparent and suspicious hurry in the formulation and
finalization of said collective bargaining accord. In the aforementioned letter where respondent
company required petitioner union to present proof of its support by the employees, the
company already suggested that petitioner ALU at the same time submit the proposals that it
intended to embody in the projected agreement.
WHEREFORE, the order of the public respondent for the conduct of a certification election
among the rank-and-file workers of respondent GAW Trading Inc. is AFFIRMED.

ASSOCIATED TRADE UNION (ATU) v. TRAJANO

TICKER: non-posting of the CBA is a fatal defect

FACTS:

Private respondent Union (Trade Unions of the PH and Allied Services/TUPAS) filed with the Ministry of
Labor and Employment a petition for certification election at the Baliwag Transit, Inc. among its rank-
and-file workers, and this was granted. Petitioner ATU appealed to the Director of Labor and
Employment which affirmed said decision. ATU then appeals to this Court.

ATU argued that TUPAS’s petition for certification election is defective because it was not allowed
under the contract-bar rule as there is a new and existing collective bargaining agreement between
ATU with the company.

ISSUE:
Whether or not ATU’s petition is meritorious

SUPREME COURT:

NO.

The new CBA was entered into at a time when the petition for certification election had already been
filed by TUPAS and was then pending resolution. The said CBA cannot be deemed permanent,
precluding the commencement of negotiations by another union with the management. The agreement
may be continued in force if ATU is certified as the exclusive bargaining representative of the workers
or may be rejected and replaced in the event that TUPAS emerges as the winner.

Further, the Court stated that:

TUPAS contends that the said agreement suffers from certain fatal procedural flaws. Specifically, the
CBA was not posted for at least five days in two conspicuous places in the establishment before
ratification, to enable the workers to clearly inform themselves of its provisions. Moreover, the CBA
submitted to the MOLE did not carry the sworn statement of the union secretary, attested by the union
president, that the CBA had been duly posted and ratified, as required by Section 1, Rule 9, Book V of
the Implementing Rules and Regulations. These requirements being mandatory, non-compliance
therewith rendered the said CBA ineffective.

Manila Mining Corp. Employees Assoc-Fed of Free Workers v Manila Mining Corp
G.R. NO. | DATE

TICKER:

FACTS:
Respondent Manila Mining Corporation (MMC) is engaged in the mining for gold and copper
ore. MMC is required by law to store waste material generated by its mining operations.

MMC-Makati Employees Association-Federation of Free Workers Chapter (Union). filed with

the DOLE all the requirements for its registration. The union acquired legitimate registration
status on 30 March 2000. Subsequently, it sent letters to MMC relating its intention to bargain
collectively.

Upon expiration of the tailings permit, DENR did not issue a permanent permit due to the
inability of MMC to secure an Environmental Compliance Certificate (ECC). Due to this, MMC
was compelled to temporarily shut down its mining operations, resulting to the temporary lay-
off of 400 employees.

The employees, together with the union, filed a complaint against MMC before the LA. They
allege that MMC did not want to bargain with the union that’s why they terminated all union
officers and active members. The Union insists that MMC is guilty of unfair labor practice
when it unilaterally suspended the negotiation for a CBA.

ISSUE: Whether or not MMC committed unfair labor practice in refusing to bargain with the
union

SUPREME COURT: NO
The lay-off is neither illegal nor can it be considered as unfair labor practice.

Despite all efforts exerted by MMC, it did not succeed in obtaining the consent of the residents
of the community where the tailings pond would operate, one of the conditions imposed by
DENR-EMB in granting its application for a permanent permit. The evidence on record indeed
clearly shows that MMC’s suspension of its mining operations was bonafide and the reason
for such suspension was supported by substantial evidence. MMC cannot conduct mining
operations without a tailings disposal system.

Unfair labor practice cannot be imputed to MMC since, as ruled by the Court of Appeals, the
call of MMC for a suspension of the CBA negotiations cannot be equated to "refusal to
bargain."

Article 252 of the Labor Code defines the phrase "duty to bargain collectively," to wit:

ARTICLE 252. Meaning of duty to bargain collectively. - The duty 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
agreements [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 make
any concession.

For a charge of unfair labor practice to prosper, it must be shown that the employer was
motivated by ill-will, bad faith or fraud, or was oppressive to labor. The employer must have
acted in a manner contrary to morals, good customs, or public policy causing social
humiliation, wounded feelings or grave anxiety. While the law makes it an obligation for the
employer and the employees to bargain collectively with each other, such compulsion does
not include the commitment to precipitately accept or agree to the proposals of the other. All it
contemplates is that both parties should approach the negotiation with an open mind and
make reasonable effort to reach a common ground of agreement.

Verily, it cannot be said that MMC deliberately avoided the negotiation. It merely sought a
suspension and in fact, even expressed its willingness to negotiate once the mining operations
resume. There was valid reliance on the suspension of mining operations for the suspension,
in turn, of the CBA negotiation. The Union failed to prove bad faith in MMC’s actuations.

Stevedoring Services v Abarquez

GR 102132

FACTS:

Davao Integrated Port Stevedoring Services (petitioner-company) and private respondent ATU-TUCP
(Union), the exclusive collective bargaining agent of the rank and file workers of petitioner-company,
entered into a collective bargaining agreement (CBA) on October 16, 1985 which, under Sections 1 and
3, Article VIII thereof, provide for sick leave with pay benefits each year to its employees who have
rendered at least one (1) year of service with the company. Upon its renewal, the provisions for sick
leave with pay benefits were reproduced under Sections 1 and 3, Article VIII of the new CBA, but the
coverage of the said benefits was expanded to include the "present Regular Extra Labor Pool as
of the signing of this Agreement."

During the effectivity of the new CBA, all the field workers of petitioner who are members of the regular
labor pool and the present regular extra labor pool who had rendered at least 750 hours up to 1,500
hours were extended sick leave with pay benefits. Any unenjoyed portion thereof at the end of the
current year was converted to cash and paid at the end of the said one-year period pursuant to
Sections 1 and 3, Article VIII of the CBA. The commutation of the unenjoyed portion of the sick leave
with pay benefits of the intermittent workers or its conversion to cash was, however, discontinued or
withdrawn when petitioner-company under a new assistant manager, Mr. Benjamin Marzo.

The Union objected to the said discontinuance of commutation or conversion to cash of the unenjoyed
sick leave with pay benefits of petitioner's intermittent workers contending that it is a deviation from the
true intent of the parties that negotiated the CBA; that it would violate the principle in labor laws that
benefits already extended shall not be taken away and that it would result in discrimination between the
non-intermittent and the intermittent workers of the petitioner-company. In failure to reach a decision
the matter to NCMB and the herein respondent ruled in favor of the union. Petitioner appealed for the
resolution to be reversed and contends that that while the intermittent workers were paid the cash
equivalent of their unenjoyed sick leave with pay benefits during the previous management of Mr.
Beltran who misinterpreted Sections 1 and 3 of Article VIII of the 1985 CBA, it was well within
petitioner-company's rights to rectify the error it had committed and stop the payment of the said sick
leave with pay benefits. An error in payment, according to petitioner-company, can never ripen into a
practice.
ISSUE:

WON the withdrawal of the payment of unenjoyed sick leaves with pay benefits of intermittent workers
is valid.

SUPREME COURT:

A collective bargaining agreement (CBA), as used in Article 252 of the Labor Code, refers to a contract
executed upon request of either the employer or the exclusive bargaining representative incorporating
the agreement reached after negotiations 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.

A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines
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.

It is thus erroneous for petitioner to isolate Section 1, Article VIII of the 1989 CBA from the other related
section on sick leave with pay benefits, specifically Section 3 thereof, in its attempt to justify the
discontinuance or withdrawal of the privilege of commutation or conversion to cash of the unenjoyed
portion of the sick leave benefit to regular intermittent workers. The manner they were deprived of the
privilege previously recognized and extended to them by petitioner-company during the lifetime of the
CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989, or a period of three
(3) years and nine (9) months, is not only tainted with arbitrariness but likewise discriminatory in nature.
Petitioner-company is of the mistaken notion that since the privilege of commutation or conversion to
cash of the unenjoyed portion of the sick leave with pay benefits is found in Section 1, Article VIII, only
the regular non-intermittent workers and no other can avail of the said privilege because of the proviso
found in the last sentence thereof.

Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and
vacation leave benefits, among others, are by their nature, intended to be replacements for regular
income which otherwise would not be earned because an employee is not working during the period of
said leaves. They are non-contributory in nature, in the sense that the employees contribute nothing to
the operation of the benefits. By their nature, upon agreement of the parties, they are intended to
alleviate the economic condition of the workers.

HERALD DELIVERY CARRIERS UNION (PAFLU) and PHILIPPINE ASSOCIATION OF

FREE LABOR UNIONS (PAFLU) vs. HERALD PUBLICATION, INC.
G.R. No. L-29966, February 28, 1974

FACTS: Herald Publication, Inc. after it was served with written bargaining proposals by
petitioner union in behalf of 90 of respondent's delivery and carrier workers, undertook to act
unilaterally and without notice to petitioner union on a subject of mandatory bargaining by
contracting out with 12 so-called independent contractors the work done by said delivery and
carrier workers, thereby affecting their separation and undercutting the bargaining relationship
with petitioner union.

Respondent employer never submitted an answer or reply tendering an issue respecting the
written bargaining proposals submitted by petitioner union, thereby violating its statutory duty
to 'make a reply thereto not later than ten (10) days from receipt of such proposals' (Sec.
14[a], of R.A. No. 875).

Respondent employer evaded its duty to bargain collectively through unfulfilled promises of
submitting an answer or counter-proposals, or of taking up the demands submitted by
petitioner Union in meetings or conferences." All that was mentioned in the answer of
respondent Herald Publications on the above points were to the effect that: "When petitioners
presented their bargaining proposals to respondent company, the latter sent a reply asserting
that the carriers are independent contractors and not employees.

The assumption then was that the duty to bargain existed, the claim of lack of employment
relationship not being sustained, but there was no such refusal to comply with the statutory
duty. Actually the thirty-three individual members were separated or laid off from the service
because of a new system of distribution adopted by private respondent by contracting outside
work to twelve distributors, a step which according to it was under serious consideration
before the strike of September 27, 1962, which was the precursor of the complaint for unfair
labor practice filed by petitioners with respondent Court precisely on the very ground of a
failure or refusal to comply with its statutory duty to bargain in good faith. Respondent Court of
Industrial Relations, ruled against petitioners.

ISSUE: Whether or not Herald Publication, Inc. failed to comply with its statutory duty to
bargain in good faith

HELD: YES. While the law does not compel the parties to reach agreement, it does
contemplate that both parties will approach the negotiations with an open mind and will make
a reasonable effort to reach a common ground of agreement." The same thought found
expression in a later decision, with its stress on "the incontestably sound principle" that the
employer "had a duty to negotiate in good faith with his employees' representatives, to match
their proposals, if unacceptable, with counterproposals; and to make every reasonable effort
to reach an agreement." The Wagner Act called for a more explicit declaration. There must
be, according to National Labor Relations Board v. Pilling and Son Co., "common willingness
among the parties to discuss freely and fully their respective claims and demands and, when
these are opposed, to justify them on reason."

Professor Cox added: "Although the law cannot open a man's mind, it can at least compel him
to conduct himself as if he were trying to persuade and were willing to be persuaded. To offer
the union a contract saying, 'Take it or leave it,' is not bargaining collectively within the
meaning of the act."

These are among the indicia referred to by him to indicate lack of good faith: "Stalling the
negotiations by unexplained delays in answering correspondence and unnecessary
postponement of meetings."

In the latest work on the subject, Professor Smith, also an authoritative voice, wrote on the
present state of American law thus:

"As a minimum it would seem that the Act prescribes a superficial pretense at
bargaining fictitious negotiation which essentially denies recognition of a union.
However, manifestations of such activity may be subtle and hard to detect. Even when
 it is not, the manner in which 'sham bargaining' can be prevented presents problems.
Statutory antinomy arises because as a matter of legislative history, meaningful
bargaining was to be accomplished by 'leading the parties to the bargaining table'
without intrusions into the negotiations, and, in any event, without compelling either
party to agree to a proposal or make a concession.”

WHEREFORE, the order of respondent Court of August 12, 1966 as affirmed by its
Resolution of December 10, 1966 is set aside. Respondent Herald Publications, Inc. is found
guilty of unfair labor practice for not bargaining in good faith and ordered to pay three months
back wages to members of petitioners-unions who were laid off or separated from the service
as a result of such unfair labor practice. Costs against private respondent.

PAFLU v Estrella

GR 45323

Facts:

On March 26, 1968, the Philippine Association of Free Labor Unions (PAFLU) filed with the
Court of Industrial Relations a petition for certification election at Visayan Glass Factory, Inc.
ALU moved to dismiss on the ground that it had then a collective agreement with the company
which would expire on May 31, 1968.

On May 20, 1968, the CBA between ALU and Visayan Glass Factory, Inc was renewed. Said
CBA is set to expire on 1971. PAFLU’s petition remained unsolved. On November 25,1971, a
new contract expiring on May 31, 1974 was again concluded.

Finally, On March 3, 1975, the Med-Arbiter granted the petition of PAFLU and called for a
certification election. ALU moved to dismiss in the ground that the CBA still subsist because of
CBA’s automatic renewal clause and later on because another CBA was concluded, approved
by NLRC, to expire on 1979. BLR denied motion to dismissed..

Certification election was conducted. PAFLU obtained the highest vote. ALU filed protest
citing the new CBA mentioned above. BLR acting director ganted. Hence this petition by
PAFLU.

Issues: W/n the certification election is valid in the ground of exiting CBA approve by NLRC

Held: Yes. The certification election is valid. The petition for certification election filed by
PAFLU had been pending since 1968.

It is the rule in this jurisdiction that only a certified collective bargaining agreement — i.e., an
agreement duly certified by the BLR may serve as a bar to certification elections.

It is noteworthy that the BLR did not certify the 5 April 1975 collective bargaining agreement
here in question. Second, even assuming (though merely arguendo) that approval of said
agreement by the NLRC on 11 April 1975 had the same effect as certification by the BLR,
nevertheless, such approval did not quash, as it were, petitioner PAFLUs Petition for
Certification Election which had then remained pending with the BLR for more than seven (7)
years, such petition having been filed as early as March of 1968. To hold otherwise would be
to create an incentive for labor unions or employers to block the expeditious disposition of
petitions for certification elections which are, after all, the mechanisms through which the
choice of the workers of their own representatives is ascertained.

RIVERA v. ESPIRITU

TICKER: CBA extended to 10 years - valid

FACTS:

Faced with bankruptcy, PAL adopted a rehabilitation plan and downsized its labor force by more
than one-third. This was due to a 3-week strike of PAL pilots.

PALEA went on strike to protest the retrenchment measures adopted by the airline, which affected
1,899 union members. The strike ended four days later, when PAL and PALEA agreed to a more
systematic reduction in PAL's work force and the payment of separation benefits to all retrenched
employees.

President Joseph E. Estrada issued Administrative Order No. 16 creating an Inter-Agency Task
Force (Task Force) to address the problems of the ailing flag carrier. Public respondent Edgardo
Espiritu, then the Secretary of Finance, was designated chairman of the Task Force.
Conciliation meetings were then held between PAL management and the three unions
representing the airline's employees, with the Task Force as mediator.

Eventually, given its labor problems and rehabilitation was no longer feasible, PAL ceased its
operations and sent notices of termination to its employees.
PALEA wrote to the President proposing the following terms and conditions:

xxx

4. To assure investors and creditors of industrial peace, PALEA agrees, subject to the ratification
by the general membership, (to) the suspension of the PAL-PALEA CBA for a period of ten (10)
years, provided the following safeguards are in place:

a. PAL shall continue recognizing PALEA as the duly certified bargaining agent of the regular rank-
and-file ground employees of the Company;

b. The 'union shop/maintenance of membership' provision under the PAL-PALEA CBA shall be
respected.

c. No salary deduction, with full medical benefits.

xxx

PAL accepted the proposal. When it resumed its operations, petitioners, as officers of PALEA, filed
this petition to annul the agreement.

ISSUE:
Whether or not the agreement stipulating the suspension of the PAL-PALEA CBA is
constitutional

SUPREME COURT:
YES. This petition is DISMISSED.

Article 253-A of the Labor Code reads:

ART. 253-A. Terms of a Collective Bargaining Agreement. - Any Collective Bargaining

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

Under this provision, insofar as representation is concerned, a CBA has a term of five years,
while the other provisions, except for representation, may be negotiated not later than three
years after the execution.[17] Petitioners submit that a 10-year CBA suspension is inordinately
long, way beyond the maximum statutory life of a CBA, provided for in Article 253-A. By
agreeing to a 10-year suspension, PALEA, in effect, abdicated the workers' constitutional right
to bargain for another CBA at the mandated time.
The assailed PAL-PALEA agreement was the result of voluntary collective bargaining
negotiations undertaken in the light of the severe financial situation faced by the employer,
with the peculiar and unique intention of not merely promoting industrial peace at PAL, but
preventing the latter's closure. We find no conflict between said agreement and Article 253-A
of the Labor Code. Article 253-A has a two-fold purpose. One is to promote industrial stability
and predictability. Inasmuch as the agreement sought to promote industrial peace at PAL
during its rehabilitation, said agreement satisfies the first purpose of Article 253-A. The other is
to assign specific timetables wherein negotiations become a matter of right and requirement.
Nothing in Article 253-A, prohibits the parties from waiving or suspending the mandatory
timetables and agreeing on the remedies to enforce the same.

In the instant case, it was PALEA, as the exclusive bargaining agent of PAL's ground
employees, that voluntarily entered into the CBA with PAL. It was also PALEA that voluntarily
opted for the 10-year suspension of the CBA. Either case was the union's exercise of its right
to collective bargaining. The right to free collective bargaining, after all, includes the right to
suspend it.

The acts of public respondents in sanctioning the 10-year suspension of the PAL-PALEA CBA
did not contravene the "protection to labor" policy of the Constitution. The agreement afforded
full protection to labor; promoted the shared responsibility between workers and employers;
and the exercised voluntary modes in settling disputes, including conciliation to foster
industrial peace."

Petitioners further 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 unfair
labor practice, in violation of Article 253-A of the Labor Code mandating that an exclusive
bargaining agent serves for five years only.

The questioned proviso of the agreement reads:

a. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of the regular
rank-and-file ground employees of the Company;

Said proviso cannot be construed alone. In construing an instrument with several provisions, a
construction must be adopted as will give effect to all. Under Article 1374 of the Civil Code,
contracts cannot be construed by parts, but clauses must be interpreted in relation to one
another to give effect to the whole. The legal effect of a contract is not determined alone by
any particular provision disconnected from all others, but from the whole read together.The
aforesaid provision must be read within the context of the next clause, which provides:

b. The 'union shop/maintenance of membership' provision under the PAL-PALEA CBA shall
be respected.

The aforesaid provisions, taken together, clearly show the intent of the parties to maintain
"union security" during the period of the suspension of the CBA. Its objective is to assure the
continued existence of PALEA during the said period. We are unable to declare the objective
of union security an unfair labor practice. It is State policy to promote unionism to enable
workers to negotiate with management on an even playing field and with more persuasiveness
than if they were to individually and separately bargain with the employer. For this reason, the
law has allowed stipulations for "union shop" and "closed shop" as means of encouraging
workers to join and support the union of their choice in the protection of their rights and
interests vis-á -vis the employer.

Petitioners' contention that the agreement installs PALEA as a virtual company union is also
untenable. Under Article 248 (d) of the Labor Code, a company union exists when the
employer acts "[t]o 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." The case records are bare of any showing of such acts by
PAL.

The Court also do not agree that the agreement violates the five-year representation limit
mandated by Article 253-A. Under said article, the representation limit for the exclusive
bargaining agent applies only when there is an extant CBA in full force and effect. In the
instant case, the parties agreed to suspend the CBA and put in abeyance the limit on the
representation period.

In sum, the PAL-PALEA agreement 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.

FVC Labor Union v Sama-Samang Nagkakaisang Manggagawa sa FVC

G.R. NO. | DATE

TICKER:

FACTS:
Petitioner FVCLU-PTGWO - the recognized bargaining agent of the rank-and-file employees
of the FVC Philippines, Incorporated signed a five-year CBA with the company. The period
was originally from Feb 1, 1998 to January 30, 2003. At the end of the 3rd year of the term,
petitioner and the company entered into a renegotiation of the CBA and one of the things
modified was the CBA’s duration. It provided that “this re-negotiation agreement shall take
effect beginning February 1, 2001 and until May 31, 2003" thus extending the original period
of the CBA by 4 months.

9 days before the Jan 30, 2003 expiration of the original 5 year period of the CBA, the
respondent (Sama-Samang Nagkakaisang Manggagawa sa FVC) filed a petition for
certification election. Petitioner moved to dismiss on the ground that the certification election
petition was filed outside the freedom period or the 60 days before the expiration of the CBA
on May 31, 2003.

Med Arbiter dismissed the petition on the ground that it was filed outside of the freedom
period. DOLE Secretary Sto. Tomas reversed and ruled in favor of respondent. DOLE Acting
Secretary Imson reversed again.

CA ruled in favor respondent.

Hence, this petition.

Petitioner contends that the extension of the CBA term also changed the union’s exclusive
bargaining representation status and effectively moved the reckoning point of the 60-day
freedom period from January 30, 2003 to May 30, 2003.

ISSUE: Whether the freedom period should be based on the original expiration of the CBA or
on the renegotiated period

SUPREME COURT:
Book V, Rule VIII of the Rules Implementing the Labor Code
b) the petition was filed before or after the freedom period of a duly registered
collective bargaining agreement; provided that the sixty-day period based on the
original collective bargaining agreement shall not be affected by any amendment,
extension or renewal of the collective bargaining agreement.

The freedom period is reckoned based on the original five-year term of the CBA.
While the parties may agree to extend the CBA’s original five-year term together with all other
CBA provisions, any such amendment or term in excess of five years will not carry with it a
change in the union’s exclusive collective bargaining status. By express provision of the
above-quoted Article 253-A, the exclusive bargaining status cannot go beyond five years and
the representation status is a legal matter not for the workplace parties to agree upon.

In the event however, that the parties, by mutual agreement, enter into a renegotiated contract
with a term of three (3) years or one which does not coincide with the said five-year term and
said agreement is ratified by majority of the members in the bargaining unit, the subject
contract is valid and legal and therefore, binds the contracting parties. The same will however
not adversely affect the right of another union to challenge the majority status of the
incumbent bargaining agent within sixty (60) days before the lapse of the original five (5) year
term of the CBA.

San Miguel Corp Employees Union-PTGWO v Confesor

GR 111262
FACTS:

Petitioner-union San Miguel Corporation Employees Union — PTGWO entered into a Collective
Bargaining Agreement (CBA) with private respondent San Miguel Corporation (SMC) to take effect
upon the expiration of the previous CBA or on June 30, 1989. In August 1991, SMC management
undergo a restructuring. Magnolia and Feeds and Livestock Division were spun-off and became two
separate and distinct corporations: Magnolia Corporation (Magnolia) and San Miguel Foods, Inc.
(SMFI). Notwithstanding the spin-offs, the CBA remained in force and effect

After the expiration of the old CBA the petitioner and SMC entered into renegotiation to produce a new
CBA. The petitioner-union insisted that the bargaining unit of SMC should still include the employees of
the spun-off corporations: Magnolia and SMFI; and that the renegotiated terms of the CBA shall be
effective only for the remaining period of two years or until June 30, 1994. SMC, on the other hand,
contended that the members/employees who had moved to Magnolia and SMFI, automatically ceased
to be part of the bargaining unit at the SMC. Furthermore, the CBA should be effective for three years
in accordance with Art. 253-A of the Labor Code.

Because of the deadlock, SMC sought the intervention of NCMB but did not result to an agreement.
The petitioner then filed a Notice of Strike. SMC then filed a petition before the Sec. of Labor praying
that the latter assume jurisdiction over the labor dispute in a vital industry. Secretary of Labor issued
the assailed Order on February 15, 1993 directing, among others, that the renegotiated terms of the
CBA shall be effective for the period of three (3) years from June 30, 1992; and that such CBA shall
cover only the employees of SMC and not of Magnolia and SMFI.

Hence this petition.

ISSUE:

Whether or not the duration of the renegotiated terms of the CBA is to be effective for three years or for
only two years.

SUPREME COURT:

Article 253-A is a new provision. This new provision states that the CBA has a term of five (5) years
instead of three years, before the amendment of the law as far as the representation aspect is
concerned. All other provisions of the CBA shall be negotiated not later than three (3) years after its
execution. The "representation aspect" refers to the identity and majority status of the union that
negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining unit
concerned. "All other provisions" simply refers to the rest of the CBA, economic as well as non-
economic provisions, except representation.

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

In the instant case, it is not difficult to determine the period of effectivity for the non-representation
provisions of the CBA. Taking it from the history of their CBAs, SMC intended to have the terms of the
CBA effective for three (3) years reckoned from the expiration of the old or previous CBA which was on
June 30, 1989.

As a matter of policy the parties are encourages (sic) to enter into a renegotiated CBA with a term
which would coincide (sic) with the aforesaid five (5) year term of the bargaining representative.

In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a
term of three (3) years or one which does not coincide with the said 5-year term, and said agreement is
ratified by majority of the members in the bargaining unit, the subject contract is valid and legal and
therefore, binds the contracting parties. The same will however not adversely affect the right of another
union to challenge the majority status of the incumbent bargaining agent within sixty (60) days before
the lapse of the original five (5) year term of the CBA.

PORT WORKERS UNION OF THE PHILIPPINES (PWUP) v. LAGUESMA

G.R. Nos. 94929-30 | March 18, 1992

FACTS:

The International Container Terminal Services, Inc. ‘s (ICTSI) CBA with Associate Port
Checkers and Workers Union (APCWU), the incumbent union, was due to expire on April 14,
1990. Other unions were seeking to represent the laborers in the negotiation of the next CBA
and were already plotting their moves.

On April 2, 1990, herein petitioner Port Workers Union of the Philippines (PWUP) filed a
petition for intervention. Still another petition for certification election was filed by the Port
Employees Association and Labor Union (PEALU), on April 6, 1990. The consent signatures
were submitted on May 11, 1990, or thirty-five days after the filing of the petition.

PWUP appealed to the Secretary of Labor arguing that Article 256 of the Labor Code did not
require the written consent to be submitted simultaneously with the petition for certification
election. The principal petitioners did not appeal. On August 21, 1990, DOLE Undersecretary
Bienvenido Laguesma affirmed the order of the Med-Arbiter and dismissed PWUP's appeal.
PWUP claims grave abuse of discretion on the part of the public respondent in the application
of Article 256 of the Labor Code. The article provides in part as follows:

Art. 256. Representation issue in organized establishments. — In organized establishments,

when a verified petition questioning the majority status of the incumbent bargaining agent is
filed before the Department of Labor and Employment within the sixty-day period before the
expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot when the verified petition is supported by the written consent of at
least twenty-five (25%) percent of all the employees in the bargaining unit to ascertain the will
of the employees in the appropriate bargaining unit. . . .

The petitioner argues that under this article, the Med-Arbiter should automatically order
election by secret ballot when the petition is supported by at least 25% of all employees in the
bargaining unit. SAMADA and PEALU substantially complied with the law when they
submitted the required consent signatures several days after filing the petition. The petitioner
complains that the dismissal of the petitions for certification election, including its own petition
for intervention, had the effect of indirectly certifying APCWU as the sole and exclusive
bargaining representative of the ICTSI employees.

Private respondent ICTSI maintains that the dismissal was based on Article 256 of the Labor
Code as implemented by Section 6, Rule V, Book V of the Implementing Rules, quoted above.
Moreover, under Section 10, Rule V, Book V of the Implementing Rules, decisions of the
Secretary in certification election cases shall be final and unappealable.

ISSUE: Whether or not there was grave abuse of discretion on the part of the public
respondent in the application of Article 256 of the Labor Code.

SUPREME COURT:

Deviation from the contract-bar rule is justified only where the need for industrial stability is
clearly shown to be imperative. 13 Subject to this singular exception, contracts, where the
identity of the authorized representative of the workers is in doubt, must be rejected in favor of
a more certain indication of the will of the workers. As we stated in Philippine Association of
Free Labor Union vs. Estrella, 14 any stability that does not establish the type of industrial
peace contemplated by the law must be subordinated to the employees' freedom to choose
their real representative.

The private respondents contend that the overwhelming ratification of the CBA is an
affirmation of their membership in the bargaining agent, rendering the representation issue
moot and academic and conclusively barring the holding of a certification election thereon.
That conclusion does not follow. Even Tupas did not say that the mere ratification of the CBA
by the majority of the workers signified their affirmation of membership in the negotiating
union. That case required, first, ratification of the CBA, the second, affirmation of membership
in the negotiating union. The second requirement has not been established in the case at bar
as the record does not show that the majority of the workers, besides ratifying the new CBA,
have also form affiliated with APCWU.

Section 4, Rule V, Book V of the Omnibus Rules implementing the Labor Code provides that
the representation case shall not be adversely affected by a collective agreement submitted
before or during the last 60 days of a subsisting agreement or during the pendency of the
representation case. As the new CBA was entered into at the time when the representation
case was still pending, it follows that it cannot be recognized as the final agreement between
the ICTSI and its workers.

There was indeed grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of public respondents when they dismissed the petitions for certification election because
the consent signatures had not been submitted simultaneously with the petition. The issue of
majority representation thus remains open and awaits settlement. Following the rulings above-
quoted, we hereby declare that the newly-concluded CBA cannot constitute a bar to the
holding of a certification election.

It is possible that the APCWU will prevail in the certification election, in which event the new
CBA it concluded with ICTSI will be upheld and recognized. It is also possible that another
union will be chosen, in which event it will have to enter into its own negotiations with ICTSI
that may result in the adoption of a new CBA. In the meantime, however, the old CBA having
expired, it is necessary to lay down the rules regulating the relations of the workers with the
management. For this reason, the Court hereby orders that the new CBA concluded by ICTSI
and APCWU shall remain effective between the parties, subject to the result and effects of the
certification election to be called.

The certification election is the best method of determining the will of the workers on the
crucial question of who shall represent them in their negotiations with the management for a
collective bargaining agreement that will best protect and promote their interests. It is
essential that there be no collusion against this objective between an unscrupulous
management and a union covertly supporting it while professing its loyalty to labor, or at least
that the hopes of labor be not frustrated because of its representation by a union that does not
enjoy its approval and support. It is therefore sound policy that any doubt regarding the real
representation of the workers be resolved in favor of the holding of the certification election.
This is preferable to the suppression of the voice of the workers through the prissy
observance of technical rules that will exalt procedure over substantial justice.

TITLE
G.R. NO. | DATE

TICKER:

FACTS:

ISSUE:

SUPREME COURT:

TITLE Oriental Tin Can Labor Union v Secretary of Labor and Employment

G.R. No. 116751 August 28, 1998

TICKER:

FACTS: 24 days prior to the expiration of existing CBA, ORIENTAL TIN CAN WORKERS
UNION — FEDERATION OF FREE WORKERS [OTCWU-FFW] filed a petition for certification
election. Oriental Tin Can and Metal Sheet Manufacturing Company, Inc. moved to dismiss on
the grounds that a new CBA was signed between them and Oriental Tin Can Labor Union and
that respondent failed to obtain support of 25% of bargaining unit.
Mid- Arbiter dismissed the petition for certification election.

DOLE issued a certificate of registration of the said CBA pursuant to Article 231 of the Labor
Code. Respondent members went on strike. They blocked the building premises which
caused petitioner company to claim 3.6M lost in their operation.

On appeal, DOLE set aside the decision of Mid-Arbiter and ordered the conduct of certification
election. Hence this appeal by petitioner.

ISSUE: 1. w/n respondent has validly met 25% support of bargaining unit

2. w/n the newly signed CBA during the 60 day freedom period barred the
certification election filed by respondent. (TOPIC)

SUPREME COURT: Held:

1. Yes. The respondent initially satisfied the 25% support from members of bargaining unit
if it not because of the intervention, intimidation by employer to cause some of them to
withdraw said support thru waiver.

2. The filing of a petition for certification election during the 60-day freedom period gives
rise to a representation case that must be resolved even though a new CBA has been entered
into within that period. This is clearly provided for in the aforequoted Section 4, Rule V, Book
V of the Omnibus Rules Implementing the Labor Code.

The reason behind this rule is obvious. A petition for certification election is not necessary
where the employees are one in their choice of a representative in the bargaining process.
Moreover, said provision of the Omnibus Rules manifests the intent of the legislative authority
to allow, if not encourage, the contending unions in a bargaining unit to hold a certification
election during the freedom period. Hence, the Court held in the case of Warren
Manufacturing Workers Union (WMWU) v. Bureau of Labor Relations,18 that the agreement
prematurely signed by the union and the company during the freedom period does not affect
the petition for certification election filed by another union.

LMG CHEMICALS CORPORATION v. SECRETARY OF LABOR AND EMPLOYMENT

TICKER:

FACTS:
LMG Chemicals Corporation, (petitioner) is a domestic corporation engaged in the
manufacture and sale of various kinds of chemical substances. Petitioner has three divisions,
namely: the Organic Division, Inorganic Division and the Pinamucan Bulk Carriers.

Petitioner and respondent Chemical Workers Union started negotiation for a new Collective
Bargaining Agreement (CBA) as their old CBA was about to expire. They were able to agree
on the political provisions of the new CBA, but no agreement was reached on the issue of
wage increase and on economic issues.

The positions of the parties with respect to wage increase issue were:

"Petitioner Company

P40 per day on the first year

P40 per day on the second year

P40 per day on the third year

Respondent Union

P350 per day on the first 18 months, and

P150 per day for the next 18 months"

Respondent Union pruned down the originally proposed wage increase quoted above to P215
per day, broken down as follows: "P142 for the first 18 months; P73 for the second 18 months"

With the CBA negotiations at a deadlock, respondent Union filed a Notice of Strike with the
NCMB, wherein the parties failed to reach an amicable settlement. Then, a strike was staged.

The Secretary of Labor and Employment, finding the instant labor dispute impressed with
national interest, assumed jurisdiction over the same. It ruled a P140 wage increase and shall
retroact to January 1, 1996.

Hence, this petition.

ISSUE:
Whether or not the judgment on wage increase and fixing of retroactivity is proper

SUPREME COURT:
YES.

Petitioner's assertion that respondent Secretary failed to consider the evidence on record
lacks merit. It was only the Inorganic Division of the petitioner corporation that was sustaining
losses. Such incident does not justify the withholding of any salary increase as petitioner's
income from all sources are collated for the determination of its true financial condition. As
correctly stated by the Secretary, "the loss in one is usually offset by the gains in the others."
Moreover, petitioner company granted its supervisory employees, during the pendency of the
negotiations between the parties, a wage increase of P4,500 per month or P166 per day,
more or less. Petitioner's actuation is actually a discrimination against respondent union
members. If it could grant a wage increase to its supervisors, there is no valid reason why it
should deny the same to respondent union members.

On the issue of retroactivity in the judgment, petitioner insists that public respondent's
discretion on the issue of the date of the effectivity of the new CBA is limited to either: (1)
leaving the matter of the date of effectivity of the new CBA to the agreement of the parties or
(2) ordering that the terms of the new CBA be prospectively applied.

It must be emphasized that respondent Secretary assumed jurisdiction over the dispute
because it is impressed with national interest. Such authority of the Secretary to assume
jurisdiction carries with it the power to determine the retroactivity of the parties' CBA. This
authority of the Secretary of Labor to assume jurisdiction over a labor dispute causing or likely
to cause a strike or lockout in an industry indispensable to national interest includes and
extends to all questions and controversies arising therefrom. The power is plenary and
discretionary in nature to enable him to effectively and efficiently dispose of the primary
dispute.

Therefore in the absence of the specific provision of law prohibiting retroactivity of the
effectivity of the arbitral awards issued by the Secretary of Labor pursuant to Article 263(g) of
the Labor Code, such as herein involved, public respondent is deemed vested with plenary
powers to determine the effectivity thereof.

Benguet Consolidated Inc v BCI Employees and Workers Union-PAFLU

G.R. NO. | DATE

TICKER: Doctrine of Substitution

FACTS:
Benguet-Balatoc Workers Union (BBWU) was the union of the employees in the mines and
milling establishments of Benguet Consolidated Inc (BENGUET). They entered into a CBA
which was in effect from June 23, 1959 to December 23, 1963. The CBA contained a No-
Strike, No-Lockout clause.

3 years later, a certification election was conducted by the Department of Labor among all the
rank and filed employees of BENGUET. BCI Employees & Workers Union (UNION) obtained
more than 50% of the votes and thus replaced BBWU as the sole and exclusive collective
bargaining agent of all BENGUET employees.

UNION later on filed a notice of strike to BENGUET for refusal to grant certain benefits and
discrimination against union members in enforcement of disciplinary actions. Three months
later, UNION members went on strike.

Eventually the parties came to an agreement and executed a new CBA. However, as a result
of the strike staged by UNION, BENGUET claims that it had to incur expenses for the
rehabilitation of its facilities and equipment which amounted to P1.9M. BENGUET sued
UNION to recover the said amount on the ground that the UNION breached their undertaking
in the existing contract at the time not to strike.

Defendant UNION contends that they are not bound by the contract which BBWU, the former
union, had executed with BENGUET.

BENGUET first invokes the so-called "Doctrine of Substitution", in General Maritime

Stevedores' Union v. South Sea Shipping Lines “that if a bargaining agent other than the
union or organization that executed the contract, is elected, said new agent would have to
respect said contract, but that it may bargain with the management for the shortening of the
life of the contract if it considers it too long

ISSUE: Whether or not BCI Employees and Workers Union is bound by the no-strike clause in
the CBA entered into by BBWU and the company

SUPREME COURT: NO.

BENGUET's reliance upon the Principle of Substitution is totally misplaced. This principle,
formulated by the NLRB as its initial compromise solution to the problem facing it when there
occurs a shift in employees' union allegiance after the execution of a bargaining contract with
their employer, merely states that even during the effectivity of a collective bargaining
agreement executed between employer and employees thru their agent, the employees can
change said agent but the contract continues to bind them up to its expiration date. They may
bargain however for the shortening of said expiration date.

In formulating the "substitutionary" doctrine, the only consideration involved was the
employees' interest in the existing bargaining agreement. The agent's interest never entered
the picture. In fact, the justification for said doctrine was:

... that the majority of the employees, as an entity under the statute, is the true party in
interest to the contract, holding rights through the agency of the union representative.
Thus, any exclusive interest claimed by the agent is defeasible at the will of the
principal....

Stated otherwise, the "substitutionary" doctrine only provides that the employees cannot
revoke the validly executed collective bargaining contract with their employer by the simple
expedient of changing their bargaining agent. And it is in the light of this that the phrase "said
new agent would have to respect said contract" must be understood. It only means that the
employees, thru their new bargaining agent, cannot renege on their collective bargaining
contract, except of course to negotiate with management for the shortening thereof.

The "substitutionary" doctrine, therefore, cannot be invoked to support the contention that a
newly certified collective bargaining agent automatically assumes all the personal
undertakings — like the no-strike stipulation here — in the collective bargaining agreement
made by the deposed union.

San Miguel Corp v NLRC

GR 99266
FACTS:

San Miguel Corporation, alleging the need to streamline its operations due to financial loses, shut down
some of its plants and declared 55 positions as redundant. Consequently, the private respondent union
filed several grievance cases for the said retrenched employees, praying for the redeployment of the
said employees to the other divisions of the company. The grievance proceedings were conducted
pursuant to Sections 5 and 8, Article VIII of the parties' 1990 Collective Bargaining Agreement providing
for procedures.

During the grievance proceedings, however, most of the employees were redeployed, while others
accepted early retirement. As a result, only 17 employees remained when the parties proceeded to the
third level (Step 3) of the grievance procedure. Petitioner then informed the respondent that if the issue
will not be resolved prior to the deadline provided the services of the 17 employees will be terminated.
Respondent union then declared that there is a deadlock in the negotiations and later on filed Notice to
Strike before NCMB on the ground of bargaining deadlock. Petitioner moved for reconsideration but
was denied.

SMC filed a complaint with the respondent NLRC, praying for: (1) the dismissal the notice of strike; (2)
an order compelling the respondent union to submit to grievance and arbitration the issue listed in the
notice of strike; (3) the recovery of the expenses of litigation. But the complaint was dismissed by
NLRC.

ISSUE:

WON the said deadlock is a ground for strike.

SUPREME COURT:

Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor Code10, reads:

Sec.1. Grounds for strike and lockout. — A strike or lockout may be declared in cases of bargaining
deadlocks and unfair labor practices. Violations of the collective bargaining agreements, except flagrant
and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor
practice and shall not be strikeable. No strike or lockout may be declared on grounds involving inter-
union and intra-union disputes or on issues brought to voluntary, or compulsory, arbitration.

In the case under consideration, the grounds relied upon by the private respondent union are non-
strikeable. The issues which may lend substance to the notice of strike filed by the private respondent
union are: collective bargaining deadlock and petitioner's alleged violation of the collective bargaining
agreement. These grounds, however, appear more illusory than real.

Collective Bargaining Deadlock is defined as "the situation between the labor and the management of
the company where there is failure in the collective bargaining negotiations resulting in a stalemate"

This situation is non-existent in the present case since there is a Board assigned on the third level
(Step 3) of the grievance machinery to resolve the conflicting views of the parties. Instead of asking the
Conciliation Board composed of five representatives each from the company and the union, to decide
the conflict, petitioner declared a deadlock, and thereafter, filed a notice of strike. For failing to exhaust
all the steps in the grievance machinery and arbitration proceedings provided in the Collective
Bargaining Agreement, the notice of strike should have been dismissed by the NLRC and private
respondent union ordered to proceed with the grievance and arbitration proceedings.

San Miguel Corporation Supervisors and Exempt Union v Laguesma

G.R. NO. 110399 | August 15, 1997

TICKER: bargaining unit; "community or mutuality of interests,"

FACTS:
Petitioner union filed before the DOLE a petition for certification election among the
supervisors and exempt employees of the SMC Magnolia Poultry Products of Cabuyao, San
Fernando, and Otis.

Med-Arbiter Danilo Reynante ordered the conduct of certification election among the
supervisors of the branches as one bargaining unit.

Respondent SMC filed a Notice of Appeal arguing that the Med-Arbiter erred in grouping
together all 3 separate plants into one bargaining unit.

ISSUE: Whether the employees of San Miguel Corporation Magnolia Poultry Products Plants
of Cabuyao, San Fernando, and Otis constitute a single bargaining unit

SUPREME COURT: YES.

An appropriate bargaining unit may be defined as "a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective interest
of all the employees, consistent with equity to the employer, indicate to be best suited to serve
the reciprocal rights and duties of the parties under the collective bargaining provisions of the
law."

A unit to be appropriate must effect a grouping of employees who have substantial, mutual
interests in wages, hours, working conditions and other subjects of collective bargaining.
It is readily seen that the employees in the instant case have "community or mutuality of
interests," which is the standard in determining the proper constituency of a collective
bargaining unit. It is undisputed that they all belong to the Magnolia Poultry Division of San
Miguel Corporation. This means that, although they belong to three different plants, they
perform work of the same nature, receive the same wages and compensation, and most
importantly, share a common stake in concerted activities.

The fact that the three plants are located in three different places, namely, in Cabuyao,
Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial.
Geographical location can be completely disregarded if the communal or mutual interests of
the employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-
academic rank and file employee of the University of the Philippines in Diliman, Quezon City,
Padre Faura, Manila, Los Baños, Laguna and the Visayas were allowed to participate in a
certification election. We rule that the distance among the three 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

Knitjoy Manufacturing v Ferrer-Calleja

GR 81883

FACTS:

Petitioner KNITJOY had a collective bargaining agreement (CBA) with the Federation of Filipino
Workers (FFW) covered only the regular rank-and-file employees of KNITJOY paid on a daily or piece-
rate basis. Prior to its expiration, the FFW was split into two (2) factions and eventually became the
Confederation of Filipino Workers (CFW).

Private respondent KMEU filed a petition for certification election among KNITJOY’s regular rank-and-
file monthly-paid employees with Regional Office No. IV of the Department of Labor and Employment.
This was questioned by the petitioner contending that there exist a labor organization representing the
said employees and are included in the CFW. The petition of the petitioner was dismissed by the Med-
Arbiter and the BLR Director and granted the certification election of the KMEU.

ISSUE:

Whether or not petitioner KNITJOY’s monthly-paid regular rank-and-file employees can constitute an
appropriate bargaining unit separate and distinct from the existing unit composed of daily or piece-rate
paid regular rank-and-file employees
SUPREME COURT:

The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the
greater mutual benefits which the parties could derive, especially in the case of employees whose
bargaining strength could undeniably be enhanced by their unity and solidarity but diminished by their
disunity, division and dissension, is not without exceptions.

The usual exception, of course, is where the employer unit has to give way to the other units like the
craft unit, plant unit, or a subdivision thereof, the recognition of these exceptions takes into account the
policy to assure employees of the fullest freedom in exercising their rights. Otherwise stated, the one
company-one union policy must yield to the right of the employees to form unions or associations for
purposes not contrary to law, to self-organization and to enter into collective bargaining negotiations,
among others, which the Constitution guarantees.

Furthermore, it is not denied that in the bargaining history of KNITJOY, the CBA has been consistently
limited to the regular rank-and-file employees paid on a daily or piece-rate basis. On the other hand, the
rank-and-file employees paid on a monthly basis were never included within its scope. Respondent
KMEU’s membership is limited to the latter class of employees, KMEU does not seek to dislodge CFW
as the exclusive bargaining representative for the former.

Clearly therefore, KNITJOY and CFW recognize that insofar as the monthly-paid employees are
concerned, the latter’s constituting a separate bargaining unit with the appropriate union as sole
bargaining representative, can neither be prevented nor avoided without infringing on these employees’
rights to form a union and to enter into collective bargaining negotiations.

TITLE
G.R. NO. | DATE

TICKER:

FACTS:

ISSUE:

SUPREME COURT:

TITLE
G.R. NO. | DATE

TICKER:

FACTS:

ISSUE:
SUPREME COURT:

TITLE
G.R. NO. | DATE

TICKER:

FACTS:

ISSUE:

SUPREME COURT:

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED

INDUSTRIES – MANILA PAVILION HOTEL CHAPTER v. SECRETARY OF LABOR AND
EMPLOYMENT
G.R. No. 181531 | 2009-07-31

TICKER: Supervisory employees excluded to vote; Double Majority

FACTS:
A certification election was conducted on June 16, 2006 among the rank-and-file employees of
respondent Holiday Inn Manila Pavilion Hotel (the Hotel), with the following results:

EMPLOYEES IN VOTERS' LIST = 353

TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22

In view of the significant number of segregated votes, contending unions, petitioner,

NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union
(HIMPHLU), referred the case back to Med-Arbiter Ma. Simonette Calabocal to decide which
among those votes would be opened and tallied. Eleven (11) votes were initially segregated
because they were cast by dismissed employees, albeit the legality of their dismissal was still
pending before the Court of Appeals. Six other votes were segregated because the
employees who cast them were already occupying supervisory positions at the time of the
election. Still five other votes were segregated on the ground that they were cast by
probationary employees and, pursuant to the existing Collective Bargaining Agreement (CBA),
such employees cannot vote.

Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes, especially
those cast by the 11 dismissed employees and those cast by the six supposedly supervisory
employees of the Hotel.

Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment
(SOLE), arguing that the votes of the probationary employees should have been opened.

The SOLE, through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiter's
Order. It held that pursuant to Section 5, Rule IX of the Omnibus Rules Implementing the
Labor Code on exclusion and inclusion of voters in a certification election, the probationary
employees cannot vote.

The SOLE further held that, with respect to the votes cast by the 11 dismissed employees,
they could be considered since their dismissal was still pending appeal. As to the votes cast
by the six alleged supervisory employees, the SOLE held that their votes should be counted
since their promotion took effect months after the issuance of Order of the Med-Arbiter, hence,
they were still considered as rank-and-file.

In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining
agent was proper. Petitioner's motion for reconsideration having been denied by the SOLE, it
appealed to the Court of Appeals. The appellate court affirmed the ruling of the SOLE.
Petitioner's motion for reconsideration having been denied, the present recourse was filed.

ISSUES:
1. Whether or not the votes casted by the probationary employees and supervisory
employees should be counted and considered
2. Whether or not HIMPHLU was able to obtain the required majority for it to be certified as
the exclusive bargaining agent

SUPREME COURT:
1. Yes, the Court rules in the affirmative.

In a certification election, all rank and file employees in the appropriate bargaining unit,
whether probationary or permanent are entitled to vote. This principle is clearly stated in Art.
255 of the Labor Code which states that the "labor organization designated or selected by the
majority of the employees in an appropriate bargaining unit shall be the exclusive
representative of the employees in such unit for purposes of collective bargaining." Collective
bargaining covers all aspects of the employment relation and the resultant CBA negotiated by
the certified union binds all employees in the bargaining unit.

Hence, all rank and file employees, probationary or permanent, have a substantial interest in
the selection of the bargaining representative. The Code makes no distinction as to their
employment status as basis for eligibility in supporting the petition for certification election.
The law refers to "all" the employees in the bargaining unit. All they need to be eligible to
support the petition is to belong to the "bargaining unit."
But while the Court rules that the votes of all the probationary employees should be included,
under the particular circumstances of this case and the period of time which it took for the
appeal to be decided, the votes of the six supervisory employees must be excluded because
at the time the certification elections was conducted, they had ceased to be part of the rank
and file, their promotion having taken effect two months before the election.

2. No, the Court rules in the negative.

It is well-settled that under the so-called "double majority rule," for there to be a valid
certification election, majority of the bargaining unit must have voted AND the winning union
must have garnered majority of the valid votes cast.

Prescinding from the Court's ruling that all the probationary employees' votes should be
deemed valid votes while that of the supervisory employees should be excluded, it follows that
the number of valid votes cast would increase from 321 (346 total votes – 3 spoiled – 22
segregated) to 337 (346 total votes – 3 spoiled – 6 supervisory employees). Under Art. 256 of
the Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters
shall be certified as the sole and exclusive bargaining agent of all the workers in the
appropriate bargaining unit. Hence, 50% of 337 is 168.5 + 1 or at least 170.

HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able
to obtain a majority vote. The position of both the SOLE and the appellate court that the
opening of the 17 segregated ballots will not materially affect the outcome of the certification
election as for, so they contend, even if such member were all in favor of petitioner, still,
HIMPHLU would win, is thus untenable.

Having declared that no choice in the certification election conducted obtained the required
majority, it follows that a run-off election must be held to determine which between HIMPHLU
and petitioner should represent the rank-and-file employees.

A run-off election refers to an election between the labor unions receiving the two (2) highest
number of votes in a certification or consent election with three (3) or more choices, where
such a certified or consent election results in none of the three (3) or more choices receiving
the majority of the valid votes cast; provided that the total number of votes for all contending
unions is at least fifty percent (50%) of the number of votes cast.

WHEREFORE, the petition is GRANTED.

TITLE
G.R. NO. | DATE

TICKER:
FACTS:

ISSUE:

Algire v De Mesa
GR No. 97622 | DATE

TICKER:

FACTS:
The case arose out of the election of the rightful officers to represent the union in the
Collective Bargaining Agreement (CBA) with the management of Universal Robina Textile.
Universal Robina Textile Monthly Salaried Employees Union, (URTMSEU), through private
respondent Regalado de Mesa, filed on September 4, 1990 a petition for the holding of an
election of union officers with the DOLE.

In the pre- election conference, it was agreed that the election by secret ballot be conducted
between petitioner Algire and respondents Regalado. The official ballot contained the ff
instructions:

1. Mark Check (/) or cross (x) inside the box specified above who among the two
contending parties you desire to be represented for the purpose of collecting
bargaining.
2. This is a secret ballot. Don't write any other markings.

The election resulted in a tie between the Algire and Regalado group, both receiving 133
votes. Six (6) of the votes case were declared as spoiled.

Algire filed a petition arguing that that one of the ballots wherein one voter placed two checks
inside the box opposite the phrase "Lino Algire and his officers," hereinafter referred to as the
"questioned ballot," should not have been declared spoiled, as the same was a valid vote in
their favor. The group argued that the two checks made even clearer the intention of the voter
to exercise his political franchise in favor of Algire's group.

Med-arbiter de la Cruz issued an order declaring the questioned ballot valid, thereby counting
the same in Algire's favor and accordingly certified petitioner's group as the union's elected
officers.

Regalado appealed the decision to the Secretary of Labor which granted the appeal and
reversed the aforesaid Order. In its stead, it entered a new one ordering "the calling of another
election of officers of the Universal Robina Textile Monthly Salaried Employees Union
(URTMSEU), with the same choices as in the election of 15 November, 1990, after the usual
pre-election conference.

Catalino Algire's group filed a motion for reconsideration of the Order which was denied.
Hence, Algire filed this petition, alleging that the assailed decision and order of the Secretary
of Labor are not supported by law and evidence
ISSUE: Whether or not the Sec. of Labor committed grave abuse of discretion in calling for
another election of officers.

SUPREME COURT:
NO.
The contention of the petitioner is that a representation officer (referring to a person duly
authorized to conduct and supervise certification elections in accordance with Rule VI of the
Implementing Rules and Regulations of the Labor Code) can validly rule only on on-the-spot
questions arising from the conduct of the elections, but the determination of the validity of the
questioned ballot is not within his competence.

The ruling of DOLE's representative in that election that the questioned ballot is spoiled is not
based on any legal provision or rule justifying or requiring such action by such officer but
simply in pursuance of the intent of the parties, expressed in the written instructions contained
in the ballot, which is to prohibit unauthorized markings thereon other than a check or a cross,
obviously intended to identify the votes in order to preserve the sanctity of the ballot, which
is in fact the objective of the contending parties.

If indeed petitioner's group had any opposition to the representation officer's ruling that the
questioned ballot was spoiled, it should have done so seasonably during the canvass of votes.
Its failure or inaction to assail such ballot's validity shall be deemed a waiver of any defect or
irregularity arising from said election.

In any event, the choice by the majority of employees of the union officers that should best
represent them in the forthcoming collective bargaining negotiations should be achieved
through the democratic process of an election, the proper forum where the true will of the
majority may not be circumvented but clearly defined. The workers must be allowed to freely
express their choice once and for all in a determination where anything is open to their sound
judgment and the possibility of fraud and misrepresentation is minimized, if not eliminated,
without any unnecessary delay and/or maneuvering.

Pambansang Kapatiran ng mga Anak Pawis v Sec of Labor

GR 111836

FACTS:

The rank and file workers of Formey Plastic, Inc. (FORMEY), formed a local union known as
Pambansang Kapatiran ng mga Anak Pawis sa Formey Plastic (KAPATIRAN) under the auspices of
the National Workers Brotherhood (NWB). It filed a Petition for Certification Election before DOLE with
the contention that there exist no CBA and bargaining union in the said company.

FORMEY moved to dismiss the petition while Kalipunan ng Manggagawang Pilipino (KAMAPI)
intervened and likewise moved to dismiss3 on the ground that there was already a duly registered CBA,
hence the "contract bar rule" would apply. KAPATIRAN opposed both motions to dismiss claiming that
the CBA executed between FORMEY and KAMAPI was fraudulently registered with the Department of
Labor and Employment and that it was defective since what was certified as bargaining agent was
KAMAPI which, as a federation, only served as mere agent of the local union hence without any legal
personality to sign in behalf of the latter.

Med-Arbiter Rasidali C. Abdullah found that a valid and existing CBA between FORMEY and KAMAPI
effectively barred the filing of the petition for certification election. The Secretary of Labor acting through
Undersecretary Bienvenido E. Laguesma upheld the decision of the Med-Arbiter.

ISSUE:

WON Contract Bar Rule will apply.

SUPREME COURT:

Art. 253-A of the Labor Code provides that "(n)o petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty (60) day period immediately before the date
of expiry of such five-year term of the collective bargaining agreement." Sec. 3, Rule V, Book V of the
Omnibus Rules Implementing the Labor Code provides that ". . . (i)f a collective bargaining agreement
has been duly registered in accordance with Article 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."

The subject agreement was made effective 1 January 1992 and is yet to expire on 31 December 1996.
The petition for certification election having been filed on 22 April 1993 it is therefore clear that said
petition must fail since it was filed before the so-called 60-day freedom' period. KAPATIRAN insists that
the CBA was a fake in having been surreptitiously registered with the Department of Labor and
Employment.

The resolution of this issue hinges on the determination of factual matters which certainly is not within
the ambit of the present petition for certiorari. Besides, the contention is without any legal basis at all; it
is purely speculative and bereft of any documentary support.

Suffice it to mention that the filing of the petition for certification election is not the panacea to this
allegedly anomalous situation. Violations of collective bargaining agreements constitute unfair labor
practice as provided for under Art. 248, par. (i), of the Labor Code. In consonance thereto, Art. 261
equips petitioner with the proper and appropriate recourse.

By filing the petition for certification election, it is clear that KAPATIRAN did not avail of the
abovementioned grievance procedure.

It is further argued that the CBA has no binding force since it was entered into by KAMAPI as a
federation and not by the local union. Perusal of the agreement proves the contention flawed. The
signatories for KAMAPI consisted of its national president and of the duly elected officers of the local
union. Thus, the fact that KAMAPI was particularly mentioned as the bargaining party without specifying
the local union cannot strip it of its authority to participate in the bargaining process. The local union
maintains its separate personality despite affiliation with a larger national federation.

STA. LUCIA EAST COMMERCIAL CORPORATION v HON. SECRETARY OF LABOR AND

EMPLOYMENT and STA. LUCIA EAST COMMERCIAL CORPORATION WORKERS
ASSOCIATION (CLUP LOCAL CHAPTER)
G.R. No. 162355, August 14, 2009

FACTS:
On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of its
chartered local, instituted a petition for certification election among the regular rank-and-file
employees of Sta. Lucia East Commercial Corporation and its Affiliates.

Med-Arbiter Bactin ordered the dismissal of the petition due to inappropriateness of the
bargaining unit.

CLUP-Sta. Lucia East Commercial Corporation and its Affiliates Workers Union appealed the
order of dismissal to DOLE. CLUP-Sta. Lucia East Commercial Corporation and its Affiliates
Workers Union [CLUP-SLECC and its Affiliates Workers Union] moved for the withdrawal of
the appeal. DOLE granted the motion and affirmed the dismissal of the petition.

In the meantime [CLUP-SLECC and its Affiliates Workers Union] reorganized itself and re-
registered as CLUP-Sta. Lucia East Commercial Corporation Workers Association (CLUP-
SLECCWA), limiting its membership to the rank-and-file employees of Sta. Lucia East
Commercial Corporation. It was issued Certificate of Creation of a Local Chapter.

CLUP-SLECCWA filed a petition for direct certification. It alleged that SLECC employs about
115 employees and that more than 20% of employees belonging to the rank-and-file category
are its members. It claimed that no certification election has been held among them within the
last 12 months prior to the filing of the petition, and while there is another union registered
with DOLE-Regional Office No. IV covering the same employees, namely SMSLEC, it has not
been recognized as the exclusive bargaining agent of SLECC's employees.

SLECC filed a motion to dismiss the petition. It averred that it has voluntarily recognized
SMSLEC as the exclusive bargaining agent of its regular rank-and-file employees, and that
collective bargaining negotiations already commenced between them. SLECC argued that the
petition should be dismissed for violating the one year and negotiation bar rules under pars.

CLUP-SLECCWA assailed the validity of the voluntary recognition of SMSLEC by SLECC and
their consequent negotiations and execution of a CBA. According to SLECCWA, the same
were tainted with malice, collusion and conspiracy involving some officials of the Regional
Office.

Med-Arbiter Anastacio L. Bactin dismissed CLUP-SLECCWA's petition for direct certification

on the ground of contract bar rule. The prior voluntary recognition of SMSLEC and the CBA
between SLECC and SMSLEC bars the filing of CLUP-SLECCWA's petition for direct
certification. SMSLEC is entitled to enjoy the rights, privileges, and obligations of an exclusive
bargaining representative from the time of the recording of the voluntary recognition.
Moreover, the duly registered CBA bars the filing of the petition for direct certification.

The Secretary found merit in CLUP-SLECCWA's appeal. The Secretary held that the
subsequent negotiations and registration of a CBA executed by SLECC with SMSLEC could
not bar CLUP-SLECCWA's petition. CLUP-SLECC and its Affiliates Workers Union
constituted a registered labor organization at the time of SLECC's voluntary recognition of
SMSLEC.

The appellate court affirmed the ruling of the Secretary.

ISSUE: Whether or not the employer may participate in a petition for certification election

HELD: NO. We find it strange that the employer itself, SLECC, filed a motion to oppose
CLUP-SLECCWA's petition for certification election. In petitions for certification election, the
employer is a mere bystander and cannot oppose the petition or appeal the Med-Arbiter's
decision. The exception to this rule, which happens when the employer is requested to
bargain collectively, is not present in the case before us.

SANTUYO v. REMERCO GARMENTS MANUFACTURING, INC.

G.R. No. 174420, March 22, 2010

FACTS: From 1992 to 1994, due to a serious industrial dispute, the Kaisahan ng
Manggagawa sa Remerco Garments Manufacturing Inc.- KMM Kilusan (union) staged a strike
against respondent Remerco Garments Manufacturing, Inc. (RGMI). Because the strike was
subsequently declared illegal, all union officers were dismissed. Employees who wanted to
sever their employment were paid separation pay while those who wanted to resume work
were recalled on the condition that they would no longer be paid a daily rate but on a piece-
rate basis.

Petitioners, who had been employed as sewers, were among those recalled.

Without allowing RGMI to normalize its operations, the union filed a notice of strike in the
National Conciliation and Mediation Board (NCMB) on August 8, 1995. According to the
union, RGMI conducted a time and motion study and changed the salary scheme from a daily
rate to piece-rate basis without consulting it. RGMI therefore not only violated the existing
collective bargaining agreement (CBA) but also diminished the salaries agreed upon. It
therefore committed an unfair labor practice.

RGMI filed a notice of lockout in the NCMB. While the union and RGMI were undergoing
conciliation in the NCMB, RGMI transferred its factory site.

The union went on strike and blocked the entry to RGMI's (new) premises.

The Secretary of Labor assumed jurisdiction pursuant to Article 263(g) of the Labor Code and
ordered RGMI's striking workers to return to work immediately. He likewise ordered the union
and RGMI to submit their respective position papers.

While the conciliation proceedings between the union and respondent were pending,
petitioners filed a complaint for illegal dismissal against RGMI and respondent Victoria Reyes,
accusing the latter of harassment.

Respondents, on the other hand, moved to dismiss the complaint in view of the pending
conciliation proceedings (which involved the same issue) in the NCMB. Moreover, alleged
violations of the CBA should be resolved according to the grievance procedure laid out
therein. Thus, the labor arbiter had no jurisdiction over the complaint.

The labor arbiter found that respondents did not pay petitioners their salaries and deprived
them of the benefits they were entitled to under the CBA. Thus, in a decision dated July 15,
1999,[11] he ordered respondents to pay petitioners their unpaid salaries according to their
daily rate with the corresponding increase provided in the CBA and benefits, separation pay
and attorney's fees.

Respondents appealed the decision of the labor arbiter in the National Labor Relations
Commission (NLRC) but it was denied.

Aggrieved, respondents filed a petition for certiorari in the Court of Appeals (CA) claiming that
the NLRC acted with grave abuse of discretion in affirming the decision of the labor arbiter.
They argued that since the complaint involved the implementation of the CBA, the labor
arbiter had no jurisdiction over it.

The CA reversed and set aside the decision of the NLRC on the ground that the labor arbiter
had no jurisdiction over the complaint.

ISSUE: Whether or not the labor arbiter has jurisdiction over the complaint

HELD: NONE.

Article 217. Jurisdiction of Labor Arbiters and the Commission. xxxx x x x x x

(c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to
the grievance machinery and voluntary arbitration as may be provided in said
agreements. (emphasis supplied)

This provision requires labor arbiters to refer cases involving the implementation of CBAs to
the grievance machinery provided therein and to voluntary arbitration.

Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to
the grievance machinery and, if unresolved within seven days, they shall automatically be
referred to voluntary arbitration.

Under Article 217, voluntary arbitrators have original and exclusive jurisdiction over matters
which have not been resolved by the grievance machinery.

Pursuant to Articles 217 in relation to Articles 260 and 261 of the Labor Code, the labor arbiter
should have referred the matter to the grievance machinery provided in the CBA. Because the
labor arbiter clearly did not have jurisdiction over the subject matter, his decision was void.