TOYOTA MOTOR PHILIPPINES CORP. WORKERS ASSOCIATION (TPCWA) vs.

NATIONAL LABOR
RELATIONS COMMISSION, et al. G.R. Nos 158798-99 19 October 2007

FACTS: The Union is the sole and exclusive bargaining agent of all Toyota rank and file
employees. After the holding of a certification election, and the issuance of an Order certifying
the Union as the sole and exclusive bargaining agent of all the Toyota rank and file employees,
Toyota challenged said Order via appeal to the DOLE Secretary. Thus, Toyota refused to
negotiate CBAs with the Union pending said appeal. The Union’s subsequent notice to strike was
converted into a preventive mediation case. The 21 February 2001 hearing on the exclusion of
the votes of alleged supervisory employees from the votes cast during the certification election
was cancelled and reset to the next day The Union requested that its members be absent on 22
February, but the same was denied. Despite said denal, more than 200 employees staged mass
actions on 22 and 23 February in front of the BLR and DOLE offices, to protest the partisan and
anti-union stance of Toyota. Due to the loss of the said number of employees, Toyota
experienced losses due to inability to meet production goals. Soon thereafter, Toyota sent
individual letters to some 360 employees requiring them to explain within 24 hours why they
should not be dismissed for their obstinate defiance of the company’s directives . The letters
specifically cited the Company’s Code of Conduct wherein “inciting or participating in riots,
disorders, alleged strikes, or concerted actions detrimental to Toyota’s interest” wherein the
first offense would amount to dismissal. In response to the letters, the Union circulated a
Manifesto which urged its members to participate in a strike/picket and to abandon their posts.
The Union members explained that their refusal to work on their scheduled work time for two
consecutive days was simply an exercise of their constitutional right to peaceably assemble and
to petition the government for redress of grievances. On 16 March 2001, Toyota terminated 227
employees for participation in concerted actions in violation of its Code of Conduct and for
misconduct under Article 282 of the Labor Code. In reaction to the dismissal of its union
members and officers, the Union went on strike on 17 March, 28 March ad 12 April. In the latter
dates, the Union intensified its strike by barricading the gates of Toyota’s Bicutan and Sta. Rosa
plants. The strikers prevented workers who reported for work from entering the plants.

ISSUE(S): 1. Whether the mass actions committed by the Union on different occasions are illegal
strikes; and 2. Whether separation pay should be awarded to the Union members who
participated in the illegal strikes. WHETHER THE UNION HAVE A LEGAL STANDING AT THE TIME
OF FILING A CERTIFICATE ELECTION

The purpose of every certification election is to determine

HELD:
the exclusive representative of employees in an appropriate
bargaining unit for the purpose of collective bargaining. A
certification election for the collective bargaining process is one
of the fairest and most effective ways of determining which
labor organization can truly represent the working force. 16 In
determining the labor organization which represents the
interests of the workforce, those interests must be, as far as
reasonably possible, homogeneous, so as to genuinely reach
the concerns of the individual members of a labor organization.
a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor
organization. Not being one, an organization which carries a
mixture of rank-and-file and supervisory employees cannot
possess any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for
the purpose of collective bargaining. It becomes necessary,
therefore, anterior to the granting of an order allowing a
certification election, to inquire into the composition of any
labor organization whenever the status of the labor
organization is challenged on the basis of Article 245 of the
Labor Code.
DUNLOP SLAZENGER (PHILS.), INC., petitioner, vs. HON. SECRETARY OF LABOR AND
EMPLOYMENT and DUNLOP SLAZENGER STAFF ASSOCIATION - APSOTEU, respondents.

Facts:

On September 15, 1995, Dunlop-Slazenger Staff Assoc. (DSSA) filed a Petition for Cert. Election before
DOLE Pampanga, alleging that it is a legitimate labor organization, a duly chartered local of
Associated Professional, Supervisory Office & Technical Employees Union (APSOTEU). DSSA further
alleged that Dunlop Slazenger Inc. (DSI) is an unorganized establishment, that there is no CBA
barring the filing of the petition for cert. election, and that no cert. election has been conducted
within 1 year prior to filing of the petition for cert. election.

In response, DSI filed its Answer w/Motion to Dismiss on October 9, 1995 based on three grounds:

1. DSSA is comprised of supervisory and rank-and-file EEs and cannot act as bargaining agent
for the proposed unit.
2. A single certification election cannot be conducted jointly among supervisory and rank-and-
file EEs.
3. DSSA lacks legal standing since it failed to submit its books of accounts.

DSSA, in its Reply, stated that its members are supervisors and NOT rank-and-file EEs, and averred
that all members are paid monthly by DSI. DSSA also alleged that the bargaining unit it wants to
represent is made up of the monthly paid supervisory employees and other personnel who cannot be
classified as belonging to the rank-and-file. It also contended that it has no obligation to attach its
books of accounts since it is a legitimate labor organization. Finally, it urged that the certification
election proceeding cannot be used to question the legal personality of a labor organization.

On March 4, 1996, however, DSSA submitted its new books of accounts consisting of the Cash
Receipts Journal, Cash Disbursements Journal and two (2) ledgers.

Med-Arbiter granted the petition on July 5, 1996, with the Secretary of Labor affirming the decision,
citing Art. 245 (251[n]) of the Labor Code. Regarding the issue of member composition of the union,
the Secretary stated that:

“…the same is not a sufficient reason that would warrant the dismissal of the present petition. The same can be
taken care (sic) of during the pre-election conference thru the exclusion-inclusion proceedings wherein
those employees who are occupying rank and file positions will be excluded from the list of eligible voters.”

Further to this, the Secretary agrees with the Med-Arb decision in stating that DSSA has sufficiently
complied with the mandatory reportorial requirements provided under the Labor Code IRRs (Section
3, Rule II, Book V).

MR was filed by DSI but was denied.

Issues

WON the DSSA can file a Petition for Cert. Election to represent the supervisory EEs of the DSI. NO.
Petition of DSI meritorious.
Held:

The Court first reiterated that supervisors can create or join an appropriate bargaining unit, in
accordance with earlier rulings stating that 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. The resolution of the case, therefore, revolves around WON
the union is solely composed of supervisory EEs.

In determining the difference between supervisory and rank-and-file EEs, the Labor Code’s
definitions according to Art. 212[217,n] (m) and Section 1(t), Rule I, Book V of the Omnibus Rules of
the Labor Code were used.

''Managerial employee is one who is vested with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees.

Supervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment.

All employees not falling within any of the above definitions are considered rank-and-file employees for
purposes of this Book.

The status test for supervisors is WON an employee possesses authority to act in the interest of his
employer, which authority should not be merely routine or clerical in nature but requires the use of
independent judgment. Corollary to this, what determines the nature of employment is not the
employee's title, but his job description.

As the case states, the list of monthly paid EEs submitted by DSI contain the names of:

 27 supervisory EEs
 6 managerial EEs
 1 confidential EE
 26 office and technical EEs holding various positions which were shown by the Court as
rank-and-file positions due to the positions not carrying the authority to act in the interest of
the employer, or to recommend managerial actions.

The Court also states that it is not decisive that these employees are monthly paid employees, as their
mode of compensation is usually a matter of convenience and does not necessarily determine the
nature and character of their job.

The Secretary of Labor also erred in stating that the infirmity is remedied by conducting the “pre-
election conference through exclusion-inclusion proceedings”, stating that there is an
misappreciation of the antipathy between the interest of supervisors and rank-and-file EEs. As held
in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union:

“…a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries
a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor
organization, including the right to file a petition for certification election for the purpose of collective
 bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to
inquire into the composition of any labor organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code.”

As a result, DSSA has no legal right to file a Petition for Certification Election to represent a
bargaining unit for supervisors as long as it counts rank-and-file EEs in its ranks.

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner,

vs. HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of
Labor and Employment; HON. CRESENCIANO B. TRAJANO in his capacity
as the Acting Secretary of Labor and Employment; DR. BRIAN
MACCAULEY in his capacity as the Superintendent of International School-
Manila; and INTERNATIONAL SCHOOL, INC., respondents.,

G.R. No. 128845, June 1, 2000

FACTS:

Private respondent International School, Inc. (School), pursuant to PD 732, is a

domestic educational institution established primarily for dependents of foreign
diplomatic personnel and other temporary residents. The decree authorizes the School
to employ its own teaching and management personnel selected by it either locally or
abroad, from Philippine or other nationalities, such personnel being exempt from
otherwise applicable laws and regulations attending their employment, except laws that
have been or will be enacted for the protection of employees. School hires both foreign
and local teachers as members of its faculty, classifying the same into two: (1) foreign-
hires and (2) local-hires.

The School grants foreign-hires certain benefits not accorded local-hires. Foreign-hires
are also paid a salary rate 25% more than local-hires.

When negotiations for a new CBA were held on June 1995, petitioner ISAE, a legitimate
labor union and the collective bargaining representative of all faculty members of the
School, contested the difference in salary rates between foreign and local-hires. This
issue, as well as the question of whether foreign-hires should be included in the
appropriate bargaining unit, eventually caused a deadlock between the parties.

ISAE filed a notice of strike. Due to the failure to reach a compromise in the NCMB, the
matter reached the DOLE which favored the School. Hence this petition.

ISSUE:
Whether the foreign-hires should be included in bargaining unit of local- hires.

RULING:

NO. The Constitution, Article XIII, Section 3, specifically provides that labor is entitled
to “humane conditions of work.” These conditions are not restricted to the physical
workplace – the factory, the office or the field – but include as well the manner by which
employers treat their employees.

Discrimination, particularly in terms of wages, is frowned upon by the Labor Code.

Article 248 declares it an unfair labor practice for an employer to discriminate in regard
to wages in order to encourage or discourage membership in any labor organization.

The Constitution enjoins the State to “protect the rights of workers and promote their
welfare, In Section 18, Article II of the constitution mandates “to afford labor full
protection”. The State has the right and duty to regulate the relations between labor and
capital. These relations are not merely contractual but are so impressed with public
interest that labor contracts, collective bargaining agreements included, must yield to
the common good.

However, foreign-hires do not belong to the same bargaining unit as the local-hires.

A bargaining unit is a group of employees of a given employer, comprised of all or less
than all of the entire body of employees, consistent with equity to the employer
indicate to be the best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law.

The factors in determining the appropriate collective bargaining unit are (1) the will of
the employees (Globe Doctrine); (2) affinity and unity of the employees’ interest, such as
substantial similarity of work and duties, or similarity of compensation and working
conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history;
and (4) similarity of employment status. The basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights.

In the case at bar, it does not appear that foreign-hires have indicated their intention to
be grouped together with local-hires for purposes of collective bargaining. The collective
bargaining history in the School also shows that these groups were always treated
separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure.
Although foreign-hires perform similar functions under the same working conditions as
the local-hires, foreign-hires are accorded certain benefits not granted to local-hires
such as housing, transportation, shipping costs, taxes and home leave travel allowances.
These benefits are reasonably related to their status as foreign-hires, and justify the
exclusion of the former from the latter. To include foreign-hires in a bargaining unit
with local-hires would not assure either group the exercise of their respective collective
bargaining rights.

Labor Organizations> i. Registration 2. Action on Application

Progressive Development Corp.-Pizza Hut v. Laguesma, 205 SCRA 802 (1992)

Kapunan, J. │ April 18, 1997

FACTS:

 In 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent Union) filed a petition for
certification election with the DOLE-NCR in behalf of the rank and file EEs of the Progressive Development
Corporation (Pizza Hut)
 A month later, petitioner filed a verified MTD alleging fraud, falsification and misrepresentation in the
respondent Union's registration making it void and invalid:
o registration was tainted with false, forged, double or multiple signatures of those who allegedly took part in
the ratification of the respondent Union's constitution and by-laws and in the election of its officers
o there were two sets of supposed attendees to the alleged organizational meeting
o alleged chapter is claimed to have been supported by 318 members when in fact the persons who actually
signed their names were much less
o while the application for registration of the charter was supposed to have been approved in the
organizational meeting held on June 27, 1993, the charter certification issued by the federation KATIPUNAN
was dated June 26, 1993
 Citing other instances of misrepresentation and fraud, petitioner filed a supplemental MTD
o election of officers was held on June 27, 1993; however, it appears that the Union's constitution and by-laws
were adopted only on July 7, 1993 (i.e. no positions to which the officers could be validly elected yet on the
date of supposed election)
o voting was not conducted by secret ballot
o constitution and by Laws submitted in support of its petition were not properly acknowledged and notarized
 Subsequently, petitioner filed a Petition seeking the cancellation of the Union's registration on the
grounds of fraud and falsification; Motion was likewise filed requesting suspension of proceedings in the
certification election case until after the prejudicial question of the Union's legal personality is determined
 However, Med-Arbiter Abdullah directed the holding of a certification election among petitioner's rank
and file EEs explaining that “Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labor org (LLO) in
contemplation of law and shall remain as such until its very charter certificate is canceled or otherwise
revoked by competent authority. The alleged misrepresentation, fraud and false statement in connection
with the issuance of the charter certificate are collateral issues which could be properly ventilated in the
cancellation proceedings”
 Petitioner’s appeal to the office of the Sec. of Labor, denied. MR was also denied, hence this SCA for
certiorari under Rule 65.

ISSUES/HOLDING/RATIO:
1. W/N, after the necessary papers and documents have been filed by a labor organization, recognition by
the BLR merely becomes a ministerial function. NO.

 The requirements of the law in relation to the recognition of unions as LLO are intended as preventive
measures against the commission of fraud. After a labor org has filed the necessary papers and
documents for registration, it becomes mandatory for the BLR to check if the requirements under
 Art 2341 have been sedulously complied with… if a certificate of recognition has been issued, the
propriety of the labor org's registration could be assailed directly through cancellation of registration
proceedings in accordance with Art 238 and 239 of the LC, or indirectly, by challenging its petition for
the issuance of an order for certification election.
 Registration requirements specifically afford a measure of protection to unsuspecting employees who
may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union
funds or use the labor organization for illegitimate ends. Such requirements are a valid exercise of the
police power, because the activities in which labor organizations, associations and unions of workers
are engaged directly affect the public interest and should be protected.
 Furthermore, the LC itself grants the BLR a period of 30 days within which to review all applications
for registration (see Art 2352)

2. W/N the public respondent committed GAD in affirming the Med-Arbiter's order to conduct a certification
election among petitioner's rank and file EEs, considering that: (1) respondent Union's legal personality
was squarely put in issue; (2) allegations of fraud and falsification, supported by documentary evidence
were made; and (3) a petition to cancel respondent Union's registration is pending with DOLE-NCR. YES.

 The LC requires that in organized and unorganized establishments, a petition for certification election
must be filed by a LLO. The acquisition of rights by any union or labor org, particularly the right to
file a petition for certification election depends on w/n the labor org has attained the status of a
LLO.
 In this case, the Med-Arbiter summarily disregarded the petitioner's prayer that the former look into
the legitimacy of the respondent Union by a sweeping declaration that the union was in the
possession of a charter certificate. The grounds invoked by petitioner for the cancellation of
respondent Union's registration fall under paragraph (a) and (c) of LC Art 239 3. The Med-Arbiter
should have looked into the merits of the petition for cancellation before issuing an order calling for
certification election.
 Inasmuch as the legal personality of respondent Union had been seriously challenged, it would have
been more prudent for the Med-Arbiter and public respondent to have granted petitioner's request
for the suspension of proceedings in the certification election case, until the issue of the legality of
the Union's registration shall have been resolved. Failure of the Med-Arbiter and public respondent
to heed the request constituted a grave abuse of discretion.

1
Art. 234. Requirements of registration. - Any applicant labor organization, association or group of unions or workers shall
acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining
unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and
the list of the members who participated in it.

2
Art. 235. Action on application. - The Bureau shall act on all applications for registration within thirty (30) days from filing.
3
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws
or amendments thereto, the minutes of ratification, the list of members who took part in the ratification of the constitution and
by-laws or amendments thereto, the minutes of ratification, the list of members who took part in the ratification;
xxx
(c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers,
the list of voters, or failure to submit these documents together with the list of the newly elected-appointed officers and their
postal addresses within thirty (30) days from election
UST FACULTY UNION (UST-FU) v. BITONIO

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

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

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

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

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

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

In both elections, there are procedures to be followed. Thus, the October 4, 1996
election cannot properly be called a union election, because the procedure laid down in
the USTFU’s CBL for the election of officers was not followed. It could not have been a
certification election either, because representation was not the issue, and the proper
procedure for such election was not followed. The participation of non-union members
in the election aggravated its irregularity.
NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED
INDUSTRIES- MANILA PAVILION HOTEL CHAPTER vs. SECRETARY OF LABOR

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 to decide which among those votes
would be opened and tallied. 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. It bears noting early on, however, that the vote of one Jose
Gatbonton (Gatbonton), a probationary employee, was counted.

Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes,
specially 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 considering that probationary employee Gatbonton’s vote was tallied. And
petitioner averred that respondent HIMPHLU, which garnered 169 votes, should not be
immediately certified as the bargaining agent, as the opening of the 17 segregated
ballots would push the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence,
the 169 votes which HIMPHLU garnered would be one vote short of the majority which
would then become 169.

Secretary affirmed the decision of the med-arbiter. In fine, the SOLE concluded that the
certification of HIMPHLU as the exclusive bargaining agent was proper.
ISSUES: (1) whether employees on probationary status at the time of the certification
elections should be allowed to vote (2) whether HIMPHLU was able to obtain the
required majority for it to be certified as the exclusive bargaining agent.

HELD:

I. On the first issue, the Court rules in the affirmative.

The inclusion of Gatbonton’s vote was proper not because it was not questioned but
because probationary employees have the right to vote in a certification election. The
votes of the six other probationary employees should thus also have been counted. As
Airtime Specialists, Inc. v. Ferrer-Calleja holds:

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.” (Emphasis
supplied)

For purposes of this section (Rule II, Sec. 2 of Department Order No. 40-03, series of
2003), any employee, whether employed for a definite period or not, shall beginning on
the first day of his/her service, be eligible for membership in any labor organization.

All other workers, including ambulant, intermittent and other workers, the self-employed,
rural workers and those without any definite employers may form labor organizations for
their mutual aid and protection and other legitimate purposes except collective
bargaining. (Emphasis supplied)

The provision in the CBA disqualifying probationary employees from voting cannot
override the Constitutionally-protected right of workers to self-organization, as well as
the provisions of the Labor Code and its Implementing Rules on certification elections
and jurisprudence thereon.

A law is read into, and forms part of, a contract. Provisions in a contract are valid only if
they are not contrary to law, morals, good customs, public order or public policy.
II. As to whether HIMPHLU should be certified as the exclusive bargaining agent, 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 to 337. 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. This majority is 50% + 1. 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.

It bears reiteration that the true importance of ascertaining the number of valid votes
cast is for it to serve as basis for computing the required majority, and not just to
determine which union won the elections. The opening of the segregated but valid votes
has thus become material.

To be sure, the conduct of a certification election has a two-fold objective: to determine

the appropriate bargaining unit and to ascertain the majority representation of the
bargaining representative, if the employees desire to be represented at all by anyone. It
is not simply the determination of who between two or more contending unions won, but
whether it effectively ascertains the will of the members of the bargaining unit as to
whether they want to be represented and which union they want to represent them.

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.
YOKOHAMA TIRE PHIL., INC. VS. YOKOHAMA
EMPLOYEES UNION
[GR NO. 159553] | [December 10, 2007] | [Quisumbing, J.]

CASE SUMMARY
There was a certification election held for the rank and file employees of Yokohama Tire
Phil. Yokohama challenged the votes of 78 of its employees who were previously dismissed.
SC ruled that the votes of the dismissed employees should be appreciated pursuant to the
IRR of the Labor Code and DO 40-03 (see holding)

DOCTRINE

FACT
1. Yokohama Employees Union filed a petition for certification election among R&F
employees of Yokohama. This was dismissed by the Med-Arbiter, but the SOLE ordered
an election with 2 choices: (1) Yokohama Employees Union, and (2) No union.
2. There were a total of 401 votes cast.
1. 78 of which were challenged by Yokohama on the ground that these were cast by
dismissed employees.
2. 73 was challenged by the Union; 65 because they were cast by newly-regularized
R&F employees, 5 because they were supervisor-trainees.
3. This was formalized by Yokohama through a protest filed before the Med-Arbiter raising
the issue of the eligibility of these employees to vote; the Union, on the other hand,
submitted a handwritten manifestation during the election.
4. The Med-Arbiter resolved the protests ruling that:
1. Votes 65 employees who contested their dismissal before the NLRC shall be
suspended until final disposition of their complaint for illegal dismissal
2. Votes of 68 newly-regularized employees shall be appreciated.
5. DOLE Acting Secretary: modified; said that the votes of the dismissed employees who
contested their dismissal before the NLR shall be appreciated.
6. CA: Affirmed DOLE Acting Secretary.
1. 78 employees who contested their dismissal were entitled to vote under Article 212
(f) of the Labor Code and Section 2, Rule XII of the rules implementing Book V of the
Labor Code.
7. Hence, Yokohama appealed.
ISSUE
1. WON the votes of the newly regularized employees should be appreciated  MOOT
1. WON the manifestation on the day of the certification election was sufficient
compliance with the rule on formalization of protests  MOOT
2. WON the votes of Yokohama’s employees who were previously dismissed should be
appreciated?  YES

RATIO
1. WON the votes of Yokohama’s employees who were previously dismissed should be
appreciated?  YES because the court chever chever
1. Yokohama contends that employees who have quit or have been dismissed for just
cause prior to the date of the certification election are excluded from participating in
the certification election. The Union, on the other hand, counters that Section 2,
Rule XII f the rules implementing Book V of the Labor Code allows a dismissed
employee to vote in the certification election if the case contesting the dismissal is
still pending.
1. Rule XII, Sec. 2 was in force during the certification election.
2. In 2003, the DOLE issued DO 40-03 which provided that “An employee who has
been dismissed from work but has contested the legality of the dismissal in a
forum of appropriate jurisdiction at the time of the issuance of the order for
the conduct of a certification election shall be considered a qualified voter,
unless his/her dismissal was declared valid in a final judgment at the time of
the conduct of the certification election” (Rule IX, Sec. 5)
2. Here, the votes of employees with illegal dismissal cases were challenged by
petitioner although their cases were still pending at the time of the certification
election in 2001. The illegal dismissal cases were filed in 2001, while the appeal to
the LA and NLRC were decided in 2003. In both the old rule in the IRR of the Labor
Code and the DO, the challenged votes of the dismissed employees should be
appreciated.
2. The other issues were rendered moot. The 68 votes of the newly regularized rank-and-
file employees, even if counted in favor of "No Union," will not materially alter the
result. There would still be 208 votes in favor of respondent and 189 votes in favor of
"No Union.” The certification election is already a fait accompli, and clearly petitioner's
rank-and-file employees had chosen respondent as their bargaining representative.

DECISION
1. Petition denied
CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO
SERVICE WORKERS, (CMC-ACE-UFSW) vs. HON. BIENVENIDO E. LAGUESMA

Respondent union filed petition for certification election. The Med-Arbiter granted the
petition for certification election. Respondent Capitol Medical Center (CMC) appealed to
the Office of the Secretary. But the Order granting the certification election was
affirmned.

On December 9, 1992, elections were held with respondent union garnering 204 votes,
168 in favor of no union and 8 spoiled ballots out of a total of 380 votes cast. Med-
Arbiter issued an Order certifying respondent union as the sole and exclusive
bargaining representative of the rank and file employees at CMC.

Respondent CMC again appealed to the Office of the Secretary of Labor the result of
the election, it was denied. MR also denied. Respondent CMC’s contention was the
supposed pendency of its petition for cancellation of respondent union’s certificate of
registration. In the said case, the Med-Arbiter therein issued an Order which declared
respondent union’s certificate of registration as null and void. However, this order was
reversed on appeal by the Officer-in-Charge of the BLR in her Order. The said Order
dismissed CMC’s motion for cancellation of the certificate of registration of respondent
union and declared that it was not only a bona fide affiliate or local of a federation, but a
duly registered union as well.

Respondent union, after being declared as the certified bargaining agent of the rank-
and-file employees of respondent CMC, presented proposals for the negotiation of a
CBA. However,  CMC contended that CBA negotiations should be suspended in view of
the Order declaring the registration of respondent union as null and void. In spite of the
refusal of respondent CMC, respondent union still persisted in its demand for CBA
negotiations, claiming that it has already been declared as the sole and exclusive
bargaining agent of the rank-and-file employees of the hospital.

Due to respondent CMC’s refusal to bargain collectively, respondent union filed a notice
of strike and later staged a strike on April 15, 1993. The case was certified to the NLRC
for compulsory arbitration.

It is at this point that petitioner union, on March 24, 1994, filed a petition for certification
election among the regular rank-and-file employees of the Capitol Medical Center Inc. It
alleged in its petition that: 1) three hundred thirty one (331) out of the four hundred (400)
total rank-and-file employees of respondent CMC signed a petition to conduct a
certification election; and 2) that the said employees are withdrawing their authorization
for the said union to represent them as they have joined and formed the union Capitol
Medical Center Alliance of Concerned Employees (CMC-ACE). They also alleged that a
certification election can now be conducted as more that 12 months have lapsed since
the last certification election was held.
Respondent union opposed the petition and moved for its dismissal. It contended that it
is the certified bargaining agent of the rank-and-file employees of the Hospital, which
was confirmed by the Secretary of DOLE and by this Court. It also alleged that it was
not negligent in asserting its right as the certified bargaining agent for it continuously
demanded the negotiation of a CBA with the hospital despite the latter’s avoidance to
bargain collectively.

May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for
certification election among the rank and file employees. On appeal by respondent
union, the public respondent Laguesma reversed and favored the respondent union.
Hence this petition.

ISSUE:

Was there a bargaining deadlock between CMC and respondent union.

RULING:

While it is true that one year had lapsed since the time of declaration of a final
certification result, and that there is no collective bargaining deadlock, public respondent
did not commit grave abuse of discretion when it ruled in respondent union’s favor since
the delay in the forging of the CBA could not be attributed to the fault of the latter.

After respondent union was certified as the bargaining agent of CMC, it invited the
employer hospital to the bargaining table by submitting its economic proposal for a
CBA. However, CMC refused to negotiate with respondent union and instead
challenged the latter’s legal personality through a petition for cancellation of the
certificate of registration which eventually reached this Court. The decision affirming the
legal status of respondent union should have left CMC with no other recourse but to
bargain collectively; but still it did not. Respondent union was left with no other recourse
but to file notice of strike against CMC for unfair labor practice with the NCMB. This
eventually led to a strike.

A “deadlock” is the counteraction of things producing entire stoppage; There is a

deadlock when there is a complete blocking or stoppage resulting from the action of
equal and opposed forces. The word is synonymous with the word impasse, which
presupposes reasonable effort at good faith bargaining which, despite noble intentions,
does not conclude in agreement between the parties.

Although there is no “deadlock” in its strict sense as there is no “counteraction” of forces

present in this case nor “reasonable effort at good faith bargaining,” such can be
attributed to CMC’s fault as the bargaining proposals of respondent union were never
answered by CMC. In fact, what happened in this case is worse than a bargaining
deadlock for CMC employed all legal means to block the certification of respondent
union as the bargaining agent of the rank-and-file; and use it as its leverage for its
failure to bargain with respondent union. We can only conclude that CMC was unwilling
to negotiate and reach an agreement with respondent union. CMC has not at any
instance shown willingness to discuss the economic proposals given by respondent
union.

It is only just and equitable that the circumstances in this case should be considered as
similar in nature to a “bargaining deadlock” when no certification election could be held.
This is also to make sure that no floodgates will be opened for the circumvention of the
law by unscrupulous employers to prevent any certified bargaining agent from
negotiating a CBA. Thus, Section 3, Rule V, Book V of the Implement Rules should be
interpreted liberally so as to include a circumstance, e.g. where a CBA could not be
concluded due to the failure of one party to willingly perform its duty to bargain
collectively.
KAISAHAN NG MANGGAGAWANG PILIPINO v. BLR DIRECTOR TRAJANO and VIRON GARMENTS
1991 / Narvasa
Bars to certification election > One year bar / certification year rule

FACTS
In 1981, by virtue of a BLR Resolution, the National Federation of Labor Unions (NAFLU) was declared the
exclusive bargaining representative of all rank-and-file employees of Viron Garments (VIRON).
In 1985, More than four years later, another union, the Kaisahan ng Manggagawang Pilipino (KAMPIL
Katipunan), filed with the BLR a petition for certification election among VIRON employees. The petition allegedly
counted with the support of more than thirty percent (30%) of VIRON workers. NAFLU opposed the petition.
The Med-Arbiter ordered that a certification election be held, after ascertaining that KAMPIL had
complied with all the requirements of law and that since NAFLU’s certification in 1981, no CBA was executed.
NAFLU contended that at the time the petition for certification election was filed, it was in process of
collective bargaining with VIRON; that there was in fact a deadlock in the negotiations which had prompted it to file a
notice of strike; and that these circumstances constituted a bar to the petition for election in accordance with Section
3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code.4
BLR director Trajano set aside the Med-Arbiter's Order and dismissed KAMPIL's petition for
certification election. The delay in the negotiations was attributed to the exhaustion of all legal remedies in the
representation question twice initiated in the company before the filing of the present petition, as well as to the
management who had been resisting the representations of NAFLU in collective bargaining. It also considered the
fact that NAFLU underwent a strike to bring management to the negotiation table.

ISSUE & HOLDING

WON KAMPIL's petition for certification election is barred. NO

RATIO
The prohibition imposed by law on the holding of a certification election "within one year from the date of
issuance of declaration of a final certification election result' — in this case, from the date of the Resolution declaring
NAFLU the exclusive bargaining representative— can have no application here. That one-year period—known as
the "certification year" during which the certified union is required to negotiate with the employer, and certification
election is prohibited—has long since expired.
Prior to the filing of the petition for election, there was no bargaining deadlock which was submitted to
conciliation or arbitration or had become the subject of a valid notice of strike or lockout. There are assertions by
NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful because of the latter's
recalcitrance and unfulfilled promises to bargain collectively, but there is no proof that it had taken any action to
legally coerce VIRON to comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair
labor practice; but it did not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain
collectively and compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain
collectively had been delayed by continuing challenges to the resolution pronouncing it the sole bargaining
representative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of
the bargaining process between it and VIRON.
The fact is that from the time that NAFLU was proclaimed the exclusive bargaining representative
until the time KAMPIL filed its petition for certification election, no CBA was ever executed, and no deadlock
ever arose from negotiations between NAFLU and VIRON resulting in conciliation proceedings or the filing of
a valid strike notice.
VIRON adverts to a strike declared by NAFLU for its [VIRON] refusal to bargain and for violation of terms
and conditions of employment, and to another strike staged in connection with a claim of violation of said agreement,.
However, these activities took place after KAMPIL initiated the certification election case, and it was grave abuse of
discretion to have regarded them as precluding the holding of the certification election prayed for.

BLR Resolution is NULLIFIED AND SET ASIDE.

4
SEC. 3. When to file. — In the absence of a collective bargaining agreement submitted in accordance with Article 231 of the
Code, a petition for certification election may be filed at any time. However, no certification election may be held within one year
from the date of issuance of declaration of a final certification election result. Neither may a representation question be entertained
if, before the filing of a petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is
a party had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.
If a collective bargaining agreement has been duly registered in accordance with Article 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.
DIVINE

FACTS:

Divine Word University Employees Union (DWUEU) was certified as the sole and exclusive bargaining
agent of the Divine Word University. Subsequently, the Divine Union submitted its collective bargaining
proposals March 7, 1985

The University replied and requested a preliminary conference. However, two days before the
scheduled conference the DWUEU’s resigned vice-president Mr. Brigido Urminita wrote a letter
addressed to the University unilaterally withdrawing the CBA proposals. Consequently, the preliminary
conference was cancelled.

After almost three years, or on March 11, 1988, the DWUEU, which had by then affiliated with the
Associated Labor Union (ALU), requested a conference with the University for the purpose of continuing
the collective bargaining negotiations. A follow-up letter was sent regarding their request but to no
avail.

DWUEU -ALU filed with the National Conciliation and Mediation Board of the Department of Labor and
Employment a notice of strike on the grounds of bargaining deadlock and unfair labor practice acts,
specifically, refusal to bargain, discrimination and coercion on employees.

After the filing of the notice of strike, a conference was held which led to the conclusion of an
agreement between the University and DWUEU-ALU on May 10, 1888

However, it turned out that an hour before the May 10, 1988 agreement was concluded, the University
had filed a petition for certification election

On the other hand, on May 19, 1988, DWUEU-ALU, consonant with the agreement, submitted its
collective bargaining proposals. These were ignored by the University.

Med-Arbiter Milado, acting on the University’s petition for certification election, issued an Order
directing the conduct of a certification election to be participated in by DWUEU-ALU and “no union,”
after he found the petition to be “well-supported in fact and in law.

Said Order prompted the DWUEU-ALU to file with the Secretary of Labor an urgent motion seeking to
enjoin Milado from further acting on the matter of the certification election.

The Divine Word University Independent Faculty and Employees Union (DWUIFEU), which was
registered earlier that day, filed a motion for intervention alleging that it had “at least 20% of the rank
and file employees” of the University.

The Secretary of Labor dismissed not only the case filed by DWUEU-ALU for unfair labor practice on the
ground of the union’s failure to prove the commission of the unfair labor practice acts specifically
complained of but also the complaint filed by the University for unfair labor practices and illegal strike
for “obvious lack of merit brought about by its utter failure to submit evidence”
The DWUEU-ALU had filed a second notice of strike charging the University with violation of the return-
to-work order which was previously ordered by the Secretary of Labor and unfair labor practices such as
dismissal of union officers, coercion of employees and illegal suspension

Acting Secretary then concluded that for reneging on the agreement of May 10, 1988 and for its
“reluctance and subscription to legal delay,” the University should be “declared in default.” He also
maintained that since under the circumstances the University cannot claim deprivation of due process,
the Office of the Secretary of Labor may rightfully impose the Union’s May 19, 1988 collective bargaining
agreement proposals motu proprio.

ISSUE: Whether or not there was a deadlock or an impasse in the collective bargaining process

RULING: YES. A thorough study of the records reveals that there was no “reasonable effort at good faith
bargaining” especially on the part of the University. Its indifferent attitude towards collective bargaining
inevitably resulted in the failure of the parties to arrive at an agreement. As it was evident that
unilateral moves were being undertaken only by the DWUEU-ALU, there was no “counteraction” of
forces or an impasse to speak of. While collective bargaining should be initiated by the union, there is a
corresponding responsibility on the part of the employer to respond in some manner to such acts.

However, the Court cannot help but notice that the DWUEU was not entirely blameless in the matter of
the delay in the bargaining process. While it is true that as early as March 7, 1985, said union had
submitted its collective bargaining proposals and that, its subsequent withdrawal by the DWUEU Vice
President being unauthorized and therefore ineffective, the same proposals could be considered as
subsisting, the fact remains that said union remained passive for three years. The records do not show
that during this three-year period, it exerted any effort to pursue collective bargaining as a means of
attaining better terms of employment.

It was only after its affiliation with the ALU that the same union, through the ALU Director for
Operations, requested an “initial conference” for the purpose of collective bargaining. That the DWUEU
abandoned its collective bargaining proposals prior to its affiliation with ALU is further confirmed by the
fact that in the aforequoted May 10, 1988 agreement with the University, said Union bound itself to
submit a new set of proposals on May 13, 1988. Under the circumstances, the agreement of May 10,
1988 may as well be considered the written notice to bargain referred to in the aforequoted Art. 250(a)
of the Labor Code, which thereby set into motion the machinery for collective bargaining, as in fact, on
May 19, 1988, DWUEU-ALU submitted its collective bargaining proposals.

Be that as it may, the Court is not inclined to rule that there has been a deadlock or an impasse in the
collective bargaining process. As the Court earlier observed, there has not been a “reasonable effort at
good faith bargaining” on the part of the University. While DWUEU-ALU was opening all possible
avenues for the conclusion of an agreement, the record is replete with evidence on the University’s
reluctance and thinly disguised refusal to bargain with the duly certified bargaining agent, such that the
inescapable conclusion is that the University evidently had no intention of bargaining with it. Thus, while
the Court recognizes that technically, the University has the right to file the petition for certification
election as there was no bargaining deadlock to speak of, to grant its prayer that the herein assailed
Orders be annulled would put an unjustified premium on bad faith bargaining. Bad faith on the part of
the University is further exemplified by the fact that an hour before the start of the May 10, 1988
conference, it surreptitiously filed the petition for certification election. And yet during said conference,
it committed itself to “sit down” with the Union. Obviously, the University tried to preempt the
conference which would have legally foreclosed its right to file the petition for certification election. In
so doing, the University failed to act in accordance with Art. 252 of the Labor Code which defines the
meaning of the duty to bargain collectively as “the performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith.” Moreover, by filing the petition for certification
election while agreeing to confer with the DWUEU-ALU, the University violated the mandate of Art. 19
of the Civil Code that “(e)very person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.”
WESLEYAN

DOCTRINE:

“The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers from
eliminating or reducing the benefits received by their employees.  This rule, however, applies only if the
benefit is based on an express policy, a written contract, or has ripened into a practice. To be considered a
practice, it must be consistently and deliberately made by the employer over a long period of time.

In closing, it may not be amiss to mention that when the provision of the CBA is clear, leaving no doubt on
the intention of the parties, the literal meaning of the stipulation shall govern.  However, if there is doubt in
its interpretation, it should be resolved in favor of labor, as this is mandated by no less than the
Constitution.”

FACTS:

Petitioner Wesleyan University-Philippines is a non-stock, non-profit educational institution duly organized

and existing under the laws of the Philippines. 6  Respondent Wesleyan University-Philippines Faculty and
Staff Association, on the other hand, is a duly registered labor organization 7 acting as the sole and exclusive
bargaining agent of all rank-and-file faculty and staff employees of petitioner.

The parties signed a 5-year CBA9 effective June 1, 2003 until May 31, 2008 and petitioner, through its
President, Atty. Guillermo T. Maglaya (Atty. Maglaya), issued a Memorandum 11 providing guidelines on the
implementation of vacation and sick leave credits as well as vacation leave commutation. 

The pertinent portion of the said memorandum stated that the vacation and sick leave credits are not
automatic; they have to be earned. Only vacation leave is commuted or monetized to cash.  Vacation leave
commutation is effected after the second year of continuous service of an employee. 

Respondent’s President sent a letter to petitioner questioning the unilateral changes it made on the Sections
1 and 2, Article XII of the CBA.

On February 8, 2006, a Labor Management Committee (LMC) Meeting was held during which petitioner
advised respondent to file a grievance complaint on the implementation of the vacation and sick leave
policy.17  In the same meeting, petitioner announced its plan of implementing a one-retirement
policy,18which was unacceptable to respondent.

Ruling of the Voluntary Labor:

Unable to settle their differences at the grievance level, the parties referred the matter to a Voluntary
Arbitrator.  During the hearing, respondent submitted affidavits to prove that there is an established
practice of giving two retirement benefits, one from the Private Education Retirement Annuity Association
(PERAA) Plan and another from the CBA Retirement Plan. 

Declared the memorandum and the one-retirement policy contrary to law.

Ruling of the Court of Appeals:

Affirmed Voluntary Labor’s decision.

Issue/s:
 a. Whether or not the retirement plan under the CBA and PERAA are one and the same.
b. Whether or not the memorandum as to vacation and sick leave credits is contrary to
existing CBA.

Ruling:

a. No. In this case, respondent was able to present substantial evidence in the form of affidavits to
support its claim that there are two retirement plans.  Based on the affidavits, petitioner has been
giving two retirement benefits as early as 1997. Moreover, petitioner’s assertion that there is only
one retirement plan as the CBA Retirement Plan and the PERAA Plan are one and the same is not
supported by any evidence.  There is nothing in Article XVI of the CBA to indicate or even suggest
that the “Plan” referred to in the CBA is the PERAA Plan. Thus, petitioner cannot, without the
consent of respondent, eliminate the two-retirement policy and implement a one-retirement policy
as this would violate the rule on non-diminution of benefits.

b. Yes. The Memorandum dated August 16, 2005, however, states that vacation and sick leave credits
are not automatic as leave credits would be earned on a month-to-month basis.  This, in effect,
limits the available leave credits of an employee at the start of the school year. In closing, it may
not be amiss to mention that when the provision of the CBA is clear, leaving no doubt on the
intention of the parties, the literal meaning of the stipulation shall govern. 47  However, if there is
doubt in its interpretation, it should be resolved in favor of labor, 48 as this is mandated by no less
than the Constitution.49
crallawlibrary

Dispositive:

Petition, Denied and the Resolution of the Court of Appeals is hereby affirmed.

174 Master Iron Labor Union v NLRC AUTHOR: TIGLAO

[G.R. No. 92009 | 17 February 1993] NOTES:
TOPIC: Unfair Labor Practice
PONENTE: J. Melo
CASE LAW/ DOCTRINE:
MILU is not, therefore, already asking for an economic benefit not already agreed upon, but are merely
asking for the implementation of the same. They aver that the Corporation's practice of hiring
subcontractors to do jobs outside of the company premises was a way "to dodge paying service
allowance to the workers"

Much more than an economic issue, the said practice of the Corporation was a blatant violation of the
CBA — and unfair labor practice on the part of the employee. Although the end result, should the
Corporation be required to observe the CBA, may be economic in nature because the workers would
then be given their regular working hours and therefore their just pay, not one of the said grounds is an
economic demand within the meaning of the law on labor strikes.
EMERGENCY RECIT
There was a CBA between MILU and employer. Employer Corporation later subcontracted work that
was supposedly to be done by MILU’s employees in order to avoid paying service allowances provided
under the CBA. MILU staged a strike and Corporation filed a complaint with the NLRC alleging that it
was illegal. LA and NLRC said that the strike was illegal. MILU appealed arguing that it was valid
because the ground for the strike was non-economic in nature. SC reversed and agreed with MILU that
the strike was legal. Check doctrine.
FACTS:
 Master Iron Labor Union (MILU) entered into a CBA with the Corporation with a no strike and
no lockout provision and another provision on service allowances.
 The Corporation eventually subcontracted outside workers to do the jobs of its regular workers.
 MILU filed a notice of strike. Through DOLE’s intervention, the Corporation agreed to give
back the usual work to its regular employees.
 Despite this, the Corporation continued subcontracting, arguing that the hiring of casual
workers was a management prerogative. Calls for conciliation made by MILU were ignored.
 MILU filed another notice of strike and staged the same.
 Corporation filed with the NLRC a petition to declare the strike illegal.
 In its counter complaint, MILU charged the Corporation with ULP for subcontracting work
causing the reduction of the employees’ work days.
 LA: Declared the strike illegal and affirmed the termination of petitioners.
 NLRC: Affirmed LA.
 MILU contends that notwithstanding the non-strike provision in the CBA, the strike they
staged was legal because the reasons therefor are non-economic in nature. They assert that the
NLRC abused its discretion in holding that there was "failure to exhaust the provision on
grievance procedure" in view of the fact that they themselves sought grievance meetings but
the Corporation ignored such requests.
 In holding that the strike was illegal, the NLRC relied solely on the no-strike no-lockout
provision of the CBA. As this Court has held in Philippine Metal Foundries, Inc. vs. CIR, a
no-strike clause in a CBA is applicable only to economic strikes. Corollarily, if the strike is
founded on an unfair labor practice of the employer, a strike declared by the union cannot be
considered a violation of the no-strike clause.
ISSUE(S): W/N the strike was illegal

HELD: No, the strike was legal.

RATIO:
All told, the strike staged by the petitioners was a legal one even though it may have been called to
offset what the strikers believed in good faith to be unfair labor practices on the part of the employer
Verily, such presumption of legality prevails even if the allegations of unfair labor practices are
subsequently found out to be untrue
An economic strike is defined as one which is to force wage or other concessions from the employer
which he is not required by law to grant. In this case, petitioners enumerated in their notice of strike the
following grounds: violation of the CBA or the Corporation's practice of subcontracting workers;
discrimination; coercion of employees; unreasonable suspension of union officials, and unreasonable
refusal to entertain grievance.
The Corporation contends that MILU’s clamor for the implementation of Section 2, Article VIII of the
CBA on service allowances granted to workers who are assigned outside the company premises is an
economic issue.
On the contrary, MILU decry the violation of the CBA, specifically the provision granting them service
allowances. MILU is not, therefore, already asking for an economic benefit not already agreed upon,
but are merely asking for the implementation of the same. They aver that the Corporation's practice of
hiring subcontractors to do jobs outside of the company premises was a way "to dodge paying service
allowance to the workers"
Much more than an economic issue, the said practice of the Corporation was a blatant violation of the
CBA — and unfair labor practice on the part of the employee. Although the end result, should the
Corporation be required to observe the CBA, may be economic in nature because the workers would
then be given their regular working hours and therefore their just pay, not one of the said grounds is an
economic demand within the meaning of the law on labor strikes.
The demands of the petitioners, being covered by the CBA, are definitely within the power of the
Corporation to grant and therefore the strike was not an economic strike.

The other grounds, i.e., discrimination, unreasonable suspension of union officials and unreasonable
refusal to entertain grievance, had been ventilated before the Labor Arbiter. They are clearly unfair
labor practices as defined in Article 248 of the Labor Code.
Moreover, MILU staged the strike only after the Corporation had failed to abide by the agreement
forged between the parties upon the intervention of no less than the DOLE after the union had
complained of the Corporation's unabated subcontracting of workers who performed the usual work of
the regular workers. The Corporation's insistence that the hiring of casual employees is a management
prerogative betrays its attempt to coat with legality the illicit curtailment of its employees' rights to
work under the terms of the contract of employment and to a fair implementation of the CBA.
While it is true that an employer's exercise of management prerogatives, with or without reason, does
not per se constitute unjust discrimination, such exercise, if clearly shown to be in grave abuse of
discretion, may be looked into by the courts
Indeed, the hiring, firing, transfer, demotion, and promotion of employees are traditionally identified as
management prerogatives. However, they are not absolute prerogatives. They are subject to limitations
found in law, a collective bargaining agreement, or general principles of fair play and justice
The Corporation's assertion that it was exercising a management prerogative in hiring outside workers
being contrary to the contract of employment which, of necessity, states the expected wages of the
workers, as well as the CBA, is therefore untenable.
DISSENTING/CONCURRING OPINION(S):
GMCC - 2011

FACTS:

GMC and the General Milling Corporation Independent Labor Union concluded a collec
tive bargaining agreement (CBA) which included the issue of representation effective for 
a term of three years.  A day before the expiration of the CBA, the union sent GMC a pro
posed CBA, with a request that a counterproposal be submitted within ten (10) days. Ho
wever, before that, GMC had received collective and individual letters from workers who 
stated that they had withdrawn from their union membership, on grounds of religious af
filiation and personal differences. Believing that the union no longer had standing to ne
gotiate a CBA, GMC did not send any counter-proposal. On this matter, the union officer
s disclaimed any massive disaffiliation or resignation from the union and submitted a m
anifesto, signed by its members, stating that they had not withdrawn from the union.

Thus, the union filed a complaint against GMC with the NLRC, Arbitration Division, Ceb
u City.

ISSUE: Whether or not an employer is guilty of ULP when it refuses to submit a counter
-proposal on the proposed CBA a day before its expiration considering that the agreed te
rm of which is only 3years.

RULING:

Yes. In the case at bar, the Supreme Court said that the law mandates that the represent
ation provision of a CBA should last for five years. The relation between labor and mana
gement should be undisturbed until the last 60 days of the fifth year. Hence, it is indispu
table that when the union requested for a renegotiation of the economic terms of the CB
A on the day before the expiration, 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. 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 sai
d period. It was obvious that GMC had no valid reason to refuse to negotiate in good fait
h with the union. For refusing to send a counter-proposal to the union and to bargain an
ew on the economic terms of the CBA, the company committed an unfair labor practice 
under Article 248(g) of the Labor Code

GMC’s failure to make a timely reply to the proposals presented by the union is indicativ
e 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 bas
eless.The Court held that GMC’s refusal to make a counter-proposal to the union’s propo
sal for CBA negotiation is an indication of its bad faith. Where the employer did not eve
n bother to submit an answer to the bargaining proposals of the union, there is a clear ev
asion of the duty to bargain collectively. Failing to comply with the mandatory obligatio
n to submit a reply to the union’s proposals, GMC violated its duty to bargain collectivel
y, making it liable for unfair labor practice.
UNION OF FILIPRO EMPLOYEES vs. NLRC and NESTLE PHILIPPINES,
INC.
G.R. No. 91025 : December 19, 1990.
FACTS: On June 22, 1988, the petitioner Union of the Filipro Employees, the
sole and exclusive bargaining agent of all rank-and-file employees of Nestle
Philippines, (private respondent) filed a Notice of Strike at the DOLE raising
the issues of CBA deadlock and unfair labor practice. Private respondent
assailed the legal personality of the proponents of the said notice of strike to
represent the Nestle employees, before the NCMB. This notwithstanding, the
NCMB proceeded to invite the parties to attend the conciliation meetings and
to which private respondent failed to attend contending that it will deal only
with a negotiating panel duly constituted and mandated in accordance with
the UFE Constitution and By-laws. Thereafter, Company terminated from
employment all UFE Union officers, and all the members of the negotiating
panel for instigating and knowingly participating in a strike staged at the
Makati, Alabang, Cabuyao and Cagayan de Oro on September 11, 1987 without
any notice of strike filed and a strike vote obtained for the purpose. The union
filed a complaint for illegal dismissal. LA upheld the validity of the dismissal;
NLRC en banc affirmed. Subsequently, company concluded separate CBAs
with the general membership of the union at Cebu/Davao and Cagayan de Oro
units; Assailing the validity of these agreements, the union filed a case of ULP
against the company with the NLRC-NCR Arbitration Branch Efforts to
resolve the dispute amicably were taken by the NCMB but yielded negative
result. Petitioner filed a motion asking the Secretary of Labor to assume
jurisdiction over the dispute of deadlock in collective bargaining between the
parties. On October 28, 1988, Labor Secretary Franklin Drilon “certified” to
the NLRC the said dispute between the UFE and Nestle, Philippines.. which
reads as follows: xxx “The NLRC is further directed to call all the parties
immediately and resolve the CBA deadlock within twenty (20) days from
submission of the case for resolution.” Second Division of the NLRC
promulgated a resolution granting wage increase and other benefits to Nestle’s
employees, ruling on non-economic issues, as well as absolving the private
respondent of the Unfair Labor Practice charge. Petitioner finds said
resolution to be inadequate and accordingly, does not agree therewith. It filed
a motion for reconsideration, denied. Hence, this petition.

ISSUE: WHETHER OR NOT THE RESPONDENT NLRC HAD ACTED WITH GRAVE ABUSE
OF DISCRETION AND COMMITTED SERIOUS ERRORS IN FACT AND IN LAW WHEN IT
RULED THAT THE CBA IS EFFECTIVE ONLY UPON THE PROMULGATION OF THE
ASSAILED RESOLUTION

HELD: In the light of the foregoing, this Court upholds the pronouncement of the NLRC
holding the CBA to be signed by the parties effective upon the promulgation of the
assailed resolution.It is clear and explicit from Article 253-A that any agreement on such
other provisions of the CBA shall be given retroactive effect only when it is entered into
within six (6) months from its expiry date.If the agreement was entered into outside the
six (6) month period, then the parties shall agree on the duration of the retroactivity
thereof.

The assailed resolution which incorporated the CBA to be signed by the parties was
promulgated June 5, 1989, and hence, outside the 6 month period from June 30, 1987,
the expiry date of the past CBA.Based on the provision of Section 253-A, its retroactivity
should be agreed upon by the parties.But since no agreement to that effect was made,
public respondent did not abuse its discretion in giving the said CBA a prospective
effect.The action of the public respondent is within the ambit of its authority vested by
existing laws.

MANILA ELECTRIC COMPANY, petitioner, vs. Hon. Secretary of Labor Leonardo Quisumbing
and Meralco Employees and Workers Association (MEWA), respondents.
[G.R. No. 127598. February 22, 2000]

Facts;
In 1999, the SC promulgated a decision directing the parties to execute a CBA which provided for
increase in wages and retroactive application of arbitral awards. Dissatisfied with the decision, some
members of union filed motion for intervention, and motion for reconsideration. MERALCO filed this
petition arguing that an increase in wages will result in higher rates of electricity which will be passed to
the consumers. The Union likewise asks for reconsideration in so far as the 1999 decision denied them the
benefit of being granted loans to set up a cooperative. Finally, the Union questions the right given to
MERALCO in contracting out jobs without need to consult the Union.
Issues;
1. WON increase in wages will result in higher prices of electricity
2. WON grant of arbitral awards retroactive
3. WON cooperative may demand for the loan for a cooperative
4. WON contracting without need to consult Union valid provision

Held / Ratio;
1. This is a non sequitur. An increase in the prices of electric current needs the approval of the
appropriate regulatory government agency and does not automatically result from a mere
increase in the wages. Collective bargaining disputes "requires due consideration and proper
balancing of the interests of the parties to the dispute and of those who might be affected by
the dispute."It should be noted that the relations between labor and capital is impressed with
public interest which must yield to the common good. Neither party should act oppressively
against the other or impair the interest or convenience of the public.

2. CBA arbitral awards granted after six months from the expiration of the last CBA shall
retroact to such time agreed upon by both employer and the employees or their union. Absent
such an agreement as to retroactivity, the award shall retroact to the first day after the six-
month period following the expiration of the last day of the CBA should there be one. In the
absence of a CBA, the Secretary’s determination of the date of retroactivity as part of his
discretionary powers over arbitral awards shall control.

3. There is no merit in the union’s claim that it is no different from housing loans. The award of
loans for housing is justified because it pertains to a basic necessity. In contrast, providing
seed money for the establishment of the cooperative is a matter in which the employer has no
business interest or legal obligation.

4. The employer is allowed to contract out services for six months or more. However, a line
must be drawn between management prerogatives regarding business operations per se and
those which affect the rights of employees, and in treating the latter, the employer should see
to it that its employees are at least properly informed of its decision or modes of action in
order to attain a harmonious labor-management relationship and enlighten the workers
concerning their rights. Hiring of workers is within the employer’s inherent freedom to
regulate and is a valid exercise of its management prerogative subject only to special laws
and agreements on the matter and the fair standards of justice. While there should be mutual
consultation, eventually deference is to be paid to what management decides.