1. Capitol Medical Center v. Trajano, et. al., G.R. No. 155690, Jun.

30, 2005

CAPITOL MEDICAL CENTER, INC., petitioner, vs. HON. CRESENCIANO B. TRAJANO, in his capacity as Secretary of the Department of
Labor and Employment, and CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-AFW, respondents.

DECISION

SANDOVAL-GUTIERREZ, J p:

For our resolution is the instant petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the Decision 1 dated September 20, 2001 and the Resolution 2 dated October 18, 2002 rendered by the Court of Appeals in
CA-G.R. SP No. 53479, entitled "Capitol Medical Center, Inc. vs. Hon. Cresenciano B. Trajano, in his capacity as Secretary of the
Department of Labor and Employment and Capitol Medical Center Employees Association-AFW."' AIHaCc

The factual antecedents as gleaned from the records are:

Capitol Medical Center, Inc., petitioner, is a hospital with address at Panay Avenue corner Scout Magbanua Street, Quezon City.
Upon the other hand, Capitol Medical Center Employees Association-Alliance of Filipino Workers, respondent, is a duly registered
labor union acting as the certified collective bargaining agent of the rank-and-file employees of petitioner hospital.

On October 2, 1997, respondent union, through its president Jaime N. Ibabao, sent petitioner a letter requesting a negotiation of
their Collective Bargaining Agreement (CBA).

In its reply dated October 10, 1997, petitioner, challenging the union's legitimacy, refused to bargain with respondent. Subsequently
or on October 15, 1997, petitioner filed with the Bureau of Labor Relations (BLR), Department of Labor and Employment, a petition
for cancellation of respondent's certificate of registration, docketed as NCR-OD-9710-006-IRD. 3

For its part, on October 29, 1997, respondent filed with the National Conciliation and Mediation Board (NCMB), National Capital
Region, a notice of strike, docketed as NCMB-NCR-NS-10-453-97. Respondent alleged that petitioner's refusal to bargain constitutes
unfair labor practice. Despite several conferences and efforts of the designated conciliator-mediator, the parties failed to reach an
amicable settlement. SECcIH

On November 28, 1997, respondent staged a strike.

On December 4, 1997, former Labor Secretary Leonardo A. Quisumbing, now Associate Justice of this Court, issued an Order
assuming jurisdiction over the labor dispute and ordering all striking workers to return to work and the management to resume
normal operations, thus:

"WHEREFORE, this Office assumes jurisdiction over the labor disputes at Capitol Medical Center pursuant to Article 263 (g) of the
Labor Code,as amended. Consequently, all striking workers are directed to return to work within twenty-four (24) hours from the
receipt of this Order and the management to resume normal operations and accept back all striking workers under the same terms
and conditions prevailing before the strike. Further, parties are directed to cease and desist from committing any act that may
exacerbate the situation. CaAcSE

Moreover, parties are hereby directed to submit within 10 days from receipt of this Order proposals and counter-proposals leading
to the conclusion of the collective bargaining agreement in compliance with aforementioned Resolution of the Office as affirmed by
the Supreme Court.

SO ORDERED."

Petitioner then filed a motion for reconsideration but was denied in an Order dated April 27, 1998.

On June 23, 1998, petitioner filed with this Court a petition for certiorari assailing the Labor Secretary's Orders. Pursuant to our
ruling in St. Martin Funeral Home vs. The National Labor Relations Commission, et al., 4 we referred the petition to the Court of
Appeals for its appropriate action and disposition.
Meantime, on October 1, 1998, the Regional Director, in NCR-OD-9710-006-IRD, issued an Order denying the petition for
cancellation of respondent union's certificate of registration. 5

On September 20, 2001, the Appellate Court rendered a Decision affirming the Orders of the Secretary of Labor. The Court of
Appeals held:

"Anent the first issue raised by the petitioner, We find the same untenable. The public respondent acted well within his duty to
order the petitioner hospital to bargain collectively, for it was the surest way to end the dispute. In LMG Chemicals Corporation vs.
Secretary of the Department of Labor and Employment, the Hon. Leonardo A. Quisumbing and Chemical Worker's Union (G.R. No.
127422, April 17, 2001), the Supreme Court made the following pronouncement, to wit:

'It is well settled in our jurisprudence that the 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.

xxx xxx xxx

Indeed, We find no grave abuse of discretion on the part of respondent Secretary of Labor whose power is plenary and includes the
resolution of all controversies arising from the labor dispute. In fact, he was merely following the directive laid down by the Supreme
Court (Decision dated February 4, 1997) in the case of Capitol Medical Center Alliance of Concerned Employees-Unified Filipino
Service Workers (CMC-ACE-UFSW) vs. Hon. Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment,
Capitol Medical Center Employees Association-Alliance of Filipino Workers and Capitol Medical Center Incorporated and Dra. Thelma
Clemente, President, ordering petitioner hospital to collectively bargain with the Capitol Medical Center Employees Association-
Alliance of Filipino Workers (private respondent herein) — the certified bargaining agent.

As earlier mentioned, the petition for cancellation was dismissed by the regional director in a decision dated September 30,
1998. . . .

xxx xxx xxx

Said decision by the regional director was affirmed by the Director of the Bureau of Labor Relations in a resolution dated December
29, 1998, dismissing the appeal of the petitioner hospital from the said DOLE-NCR's decision.

Finally, the petition for certiorari (docketed as CA-G.R. SP No. 52736) entitled — Capitol Medical Center, Inc. vs. Hon. Benedictor R.
Bitonio, Jr., in his capacity as Director of the Bureau of Labor Relations, Department of Labor and Employment; Hon. Maximo B. Lim
in his capacity as Regional Director, National Capital Region, Department of Labor and Employment and Capitol Medical Center
Employees Association (CMCEA-AFW), was dismissed in a decision dated January 11, 2001. The motion for reconsideration which
was subsequently filed was denied on March 23, 2001. DEacIT

xxx xxx xxx

In order to allow an employer to validly suspend the bargaining process, there must be a valid petition for certification election. The
mere filing of a petition does not ipso facto justify the suspension of negotiation by the employer (Colegio de San Juan de Letran vs.
Association of Employees and Faculty of Letran and Eleanor Ambas, G.R. No. 141471, September 18, 2000). If pending a petition for
certification, the collective bargaining is allowed by the Supreme Court to proceed, with more reason should the collective
bargaining (in this case) continue since the High Court had recognized the respondent as the certified bargaining agent in spite of
several petitions for cancellation filed against it.

xxx xxx xxx

Secondly, We are inclined to agree with the public respondent's statement that 'the primary assumption of jurisdiction may be
exercised by this Office even without the necessity of prior notice or hearing given to any of the parties disputants.''(page 56 of the
Rollo).

xxx xxx xxx

We are also not convinced by the arguments raised by the petitioner with respect to its third assigned error. This Court fails to see
any supervening event that would render the execution of the decision of public respondent impossible. The petitioner asserts that
the respondent union has lost its legitimacy, but at every turn it has been ruled by the various labor administrative officials that the
respondent union is legitimate. It has failed to convince the labor administrative officials, We are likewise not persuaded. Unless and
until the Certificate of Registration of the union is cancelled, it (union) remains the certified bargaining agent and the Hospital has
the duty to enter into a collective bargaining agreement with it.

xxx xxx xxx

WHEREFORE, premises considered, the instant petition is DENIED, hereby AFFIRMING the two assailed orders, dated December 4,
1997 and April 27, 1998, of the public respondent in OS-AJ-0024-97 (NCMB-NCR-NS-10-453-97).

SO ORDERED."

On October 18, 2002, the Court of Appeals issued a Resolution denying petitioner's motion for reconsideration.

Hence, this petition for review on certiorari.

Petitioner contends that its petition for the cancellation of respondent union's certificate of registration involves a prejudicial
question that should first be settled before the Secretary of Labor could order the parties to bargain collectively.

We are not persuaded.

As aptly stated by the Solicitor General in his comment on the petition, the Secretary of Labor correctly ruled that the pendency of a
petition for cancellation of union registration does not preclude collective bargaining, thus:

"That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the mechanics of
collective bargaining. If a certification election may still be ordered despite the pendency of a petition to cancel the union's
registration certificate (National Union of Bank Employees vs. Minister of Labor, 110 SCRA 274), more so should the collective
bargaining process continue despite its pendency. We must emphasize that the majority status of the respondent Union is not
affected by the pendency of the Petition for Cancellation pending against it. Unless its certificate of registration and its status as the
certified bargaining agent are revoked, the Hospital is, by express provision of the law, duty bound to collectively bargain with the
Union. Indeed, no less than the Supreme Court already ordered the Hospital to collectively bargain with the Union when it affirmed
the resolution of this Office dated November 18, 1994 directing the management of the Hospital to negotiate a collective bargaining
agreement with the Union. That was the categorical directive of the High Court in its Resolution dated February 4, 1997 in Capitol
Medical Center Alliance of Concerned Employees-United Filipino Service Worker vs. Hon. Bienvenido E. Laguesma, et al., G.R. No. L-
118915." DaACIH

Moreover, as mentioned earlier, during the pendency of this case before the Court of Appeals, the Regional Director, in NCR-OD-
9710-006-IRD, issued an Order on October 1, 1998 denying the petition for cancellation of respondent's certificate of registration.
This Order became final and executory and recorded in the BLR's Book of Entries of Judgments on June 3, 1999.

Petitioner also maintains that the Secretary of Labor cannot exercise his powers under Article 263 (g) of the Labor Code without
observing the requirements of due process.

Article 263 (g) of the Labor Code,as amended, provides:

"ART. 263. Strikes, Picketing and Lockouts. —

xxx xxx xxx

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same
to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the
time of assumption or certification, all striking or locked out employees shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the
Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such
orders as he may issue to enforce the same. IEaCDH

. . . In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the duty
of the striking union or locking-out employer to provide and maintain an effective skeletal workforce of medical and other health
personnel, whose movement and services shall be unhampered and unrestricted, as are necessary to insure the proper and
adequate protection of the life and health of its patients, most especially emergency cases, for the duration of the strike or lockout.
In such cases, therefore, the Secretary of Labor and Employment is mandated to immediately assume, within twenty-four (24) hours
from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission for
compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions
and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary
action, including dismissal or loss of employment status or payment by the locking-out employer of backwages, damages and other
affirmative relief, even criminal prosecution against either or both of them.

The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in his
opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any such labor
dispute in order to settle or terminate the same.

xxx xxx xxx

In Magnolia Poultry Employees Union vs. Sanchez, 6 we held that the discretion to assume jurisdiction may be exercised by the
Secretary of Labor and Employment without the necessity of prior notice or hearing given to any of the parties. The rationale for his
primary assumption of jurisdiction can justifiably rest on his own consideration of the exigency of the situation in relation to the
national interests.

In sum, petitioner's submissions are bereft of merit.

WHEREFORE, the petition is DENIED. The assailed Decision dated September 20, 2001 and the Resolution dated October 18, 2002 of
the Court of Appeals in CA-G.R. SP No. 53479 are AFFIRMED. Costs against petitioner. DTaAHS

SO ORDERED.

2. LVN Pictures Employees and Workers Association v. LVN Pictures, Inc., G.R. Nos. L-23495 and L-26432, September 30,
1970
LVN PICTURES EMPLOYEES AND WORKERS ASSOCIATION (NLU), petitioner, vs. LVN PICTURES, INC., respondent.

[G.R. No. L-26432. September 30, 1970]

LVN PICTURES CHECKERS' UNION (NLU), petitioner, vs. LVN PICTURES, INC. and/or DALISAY PICTURES, INC., and the COURT OF
INDUSTRIAL RELATIONS, respondents.

Eulogio R. Lerum for petitioners.

Teofilo Sison & Nicanor Sison for respondent LVN Pictures, Inc.

Zacarias V . Flores for respondent Dalisay Pictures, Inc.

DECISION

CASTRO, J p:

These two appeals by certiorari taken by the respective complainants from the decision and the resolution dated October 8, 1963
and August 29, 1964, respectively, of the Court of Industrial Relations (CIR) in case 2879-ULP (LVN Pictures Employees and Workers
Association [NLU] v. LVN Pictures, Inc.), and from the decision and the resolution dated June 2, 1966 and July 18, 1966, respectively,
of the same court in case 3013-ULP (LVN Pictures Checkers' Union [NLU] v. LVN Pictures, Inc. and/or Dalisay Pictures, Inc.), are here
considered together because all the complainants in both cases were former employees of the LVN Pictures, Inc. and the two cases
involve similar, if not identical, factual situations and issues.
The LVN Pictures, Inc. (hereinafter referred to as the LVN) was a corporation engaged in the business of producing Tagalog movies.
Among its employees were the members of the LVN Pictures Employees and Workers Association (NLU) (hereinafter referred to as
the EWA) with which it executed on April 23, 1959 a collective bargaining agreement to expire on December 31, 1960. During their
employment with LVN, the members of the EWA served in various capacities in the LVN, such as cameramen and their assistants,
soundmen and their assistants, sound technicians, carpenters, electricians, drivers, laboratory personnel, and laborers doing odd
jobs.

Previous to the year 1957, the LVN was realizing profits from its business. However, from 1957 to 1961, it suffered heavy losses in its
movie production due to causes beyond its control. As of May 31, 1961 its total losses amounted to P1,560,985.14, while its paid-up
capital as of the said date was only P1,204.000. Thus the losses exceeded the paid-up capital by P356,985.14. Also as of May 31,
1961, the company's total liabilities reached P1,189,946.19 while its total assets were only P853,961.05, so that its liabilities
exceeded its assets, by P335,985.14. In addition, outstanding loans due from it amounted to P527,960.53. Of its overdraft line of
P200,000 with the Philippine National Bank which served as part of its operating capital, it had used and withdrawn the total sum of
P199,303.45, leaving the amount of only P696.55. LVN had likewise used and withdrawn P199,167.95 of its overdraft line in the
amount of P200,000 with the Commercial Bank & Trust Company, leaving a balance of P832.05.

Notwithstanding the foregoing adverse financial posture, the LVN continued to operate its movie production with the expectation
that it would recoup part of its losses and investments. And in order to avoid immediate closure of business, as well as lay-off of
employees, the management of the LVN, by letter dated March 14, 1960, proposed to the EWA a change in the payment of salaries
and wages of the employees from salary or wage basis to the "pakiao" system per picture. This proposal was however rejected by
the union in its letter of March 31, 1960. On April 8, 1960 the LVN asked the EWA to reconsider its decision on the "pakiao" system,
to no avail. Again, on January 25, 1961, the LVN proposed to reduce the monthly compensation of all its employees and laborers
regardless of whether or not they were union members, according to the following scale:

"from P175.00 to P190.00

5%
'"from 200.00 to 350.00
10%
'"from 400.00 up
20%
The salaries and/or wages of employees and workers below P175 as well as the daily wage earners were not to be affected. This
proposal was approved by the board of directors of the LVN as a measure to stave off the mounting losses in the operation of its
Tagalog movie production. But it was also rejected by the EWA in its letter of February 15, 1961.

After the expiration of the term of the collective bargaining contract, the EWA proposed negotiations for a new contract on February
24, 1961. In a letter-reply dated March 2, 1961, the LVN informed the EWA that on March 15, 1961 the LVN stockholders would hold
a meeting at which one of the matters to be discussed was whether because of the financial losses of the corporation, it would still
continue to make pictures. The LVN therefore advised the union that it would answer neither yes nor no to the proposed
negotiations but would await the outcome of the stockholders' meeting.

By letter dated March 20, 1961, the LVN informed the EWA that, because of huge losses incurred and the many obligations of the
former which could not be met, the stockholders had agreed not to invest additional capital and to stop producing new moving
pictures, and to finish only the pictures that were then under production. Moreover, in view of the refusal of the EWA to consider
the LVN's proposals and because of the mounting losses, the LVN's board of directors decided to close its movie production as of
May 31, 1961.

As a necessary consequence of the stoppage of its movie production after May 31, 1961, the LVN was compelled to dismiss all its
personnel employed in the said movie production, among them the 84 employees and/or workers of the EWA. The equipments and
properties of the LVN were kept in the studio premises under the care of a skeleton force selected for the purpose. Thereafter, in
order to secure rents to meet some of its obligations the LVN leased its equipments and properties for the production of moving
pictures to the Tagalog Ilang-Ilang Productions, Arriba Productions, Inc., Manuel M. Lagunsad Productions, Galaxy Productions, Inc.,
Dalisay Pictures, Inc., Magna East Productions and other producers, at P13,000 per picture. In the production of moving pictures, the
several lessees employed their own personnel to handle the leased properties and equipments of the LVN. There were some
instances when these lessees employed former workers and employees of the LVN.

On May 31, 1961 the Dalisay Pictures, Inc. (hereinafter referred to as the DPI) was incorporated, capitalized at P100,000 which was
wholly subscribed and fully paid by its incorporators, as follows: Delfin Buencamino, 1,000 shares, P50,000; Encarnacion Luna, 400
shares, P20,000; Maria Sevilla, 200 shares, P10,000; Jose T. Beltran, 200 shares, P10,000; and Nicanor S. Sison, 200 shares, P10,000.
On January 16, 1961, the LVN Pictures Checkers' Union (NLU) (hereinafter referred to as the LPCU) was organized and was registered
with the Department of Labor on February 21, 1961. On February 27, 196] it sent a letter to the LVN containing collective bargaining
proposals. The LVN informed the LPCU that the former's stockholders would meet to decide whether or not it would continue
production of pictures. On March 24, 1961 all the members of LPCU received identical letters informing them that the LVN would
stop its movie production business effective May 31, 1961. Thereafter, the LVN began reducing the work-load of the members of
LPCU and, in November 1961, dismissed them from employment.

On July 18, 1961 the EWA filed a complaint charging the LVN with violations of section 4(a) (1) and (4) of Republic Act 875 (Industrial
Peace Act), consisting of alleged union interference by the LVN and/or discriminatory dismissal of 84 employees and workers
because of their membership in the EWA. The LPCU likewise filed on October 20, 1961 a complaint against the LVN and the DPI for
alleged violations of sec. 4(a) (1), (4) and (6) in relation to sections 12 and 13 of the Industrial Peace Act, consisting of alleged acts of
discrimination, shortening of working hours and/or days, and forced dismissals. In both cases the CIR decided in favor of the
respondents, holding the latter not guilty of unfair labor practices in dismissing the employees-members of the EWA and the LPCU,
and, in the latter case filed by the LPCU, declaring that the DPI is a business establishment and entity separate and distinct from the
LVN. The motions for reconsideration filed by the respective complainants were denied by the CIR.

Hence, these appeals.

The numerous issues raised in both appeals can be capsulized into two main issues: (1) Is the LVN guilty of unfair labor practice in
dismissing it employees who are members of the EWA and the LPCU? (2) Are the LVN and the DPI one and the same corporation or
entity?

We resolve both issues in favor of the respondents LVN and DPI, and affirm the CIR decisions and resolutions appealed from.

1. The evidence in both appealed cases is clear that the LVN incurred losses from 1957 to 1961, reducing it to a state of practical
bankruptcy. Thus, the respondent CIR found that as of December 31, 1957, the LVN suffered a net loss of P364,320.32; December
31, 1958, P210,857.01; December 31, 1959, P393,644.29; December 31, 1960, P399,085.85; and December 31, 1961, P333,714.60.
As of May 31, 1961, the total losses suffered by LVN amounted to P1,560,985.14, whereas its paid-up capital was only P1,204,000.00
— the former exceeding the latter by P356,785.14. The liabilities of the LVN as of May 31, 1961 totalled P1,189,946.19, while its
total assets were only P853,961.05, the total liabilities exceeding the total assets by P335,985.14. On top of these, the LVN as of May
31, 1961 had loans due from it in the amount of P527,960.53. It had an overdraft line of P200,000 with the Philippine National Bank
which served as part of its operating capital, but of this amount it had already withdrawn and used the total sum of P199,303.45 as
of May 31, 1961, leaving a balance of only P696.55. It had also as of the aforementioned date withdrawn and used P199,167.95 of its
P200,000 overdraft line with the Commercial Bank & Trust Company, leaving a balance of only P832.05. Its yearly balance sheets,
yearly profit and loss statements, and yearly income tax returns unquestionably proved that the LVN became insolvent due to heavy
financial losses suffered in good faith and in the ordinary course of business operations from 1957 to May 31, 1961. Thus, it was
constrained to stop its movie production business. Since its operating capital of P400,000 consisting of an overdraft line in the
amount of P200,000 each with the Philippine National Bank and the Commercial Bank & Trust Company, was nearly completely
exhausted as of May 31, 1961, it is clear that when the LVN completely stopped its movie production business on May 31, 1961, it
was not only insolvent but was also without any operating capital.

It is to the credit of the LVN, however, that it did not decide to stop producing movies immediately. Notwithstanding its insolvency
and before it finally closed its business on May 31, 1961, it had in good faith attempted to avail of all possible arrangements with its
employees to avoid the complete closure of its business. It proposed various remedial measures, e.g., the payment of wages or
salaries on the pakiao system per picture, and the gradual reduction of the employees' salaries. Unfortunately, these proposals were
flatly rejected. To avoid total bankruptcy, the LVN had no alternative but to closed and stop its movie production business. The
employees, by their refusal to meet the LVN halfway, in effect "killed the goose that laid the golden eggs." It is not therefore correct
to say that when the LVN proposed the "pakiao" system and the reduction of wages for both union and non-union members, it was
committing an unfair labor practice. It was merely trying, understandably and justifiably, to stave off eventual bankruptcy and the
ultimate folding-up of its movie production business. Neither can the LVN be accused of being anti-labor when it gradually reduced
the working hours of the checkers and finally laid them off. The members of the LPCU were theater checkers of the LVN. Their
services were needed only in the exhibition of new pictures which were shown on percentage basis, in order that the LVN might
receive its lawful share in the gross gate receipts. However, since the LVN stopped its movie production business on May 31, 1961,
and its second-run or old pictures were being exhibited on flat-rate rental basis, there was no longer any need to employ checkers.

The argument is advanced that the LVN refused to bargain when it put off answering the proposals of the EWA and the LPCU
pending the stockholders' meeting. We do not agree. It was entirely reasonable for the LVN to hold in abeyance its answers to the
proposals because whether or not it would still enter into a collective bargaining agreement with the EWA and the LPCU would
depend on the consensus that would be arrived at by the stockholders. There would be neither rhyme nor reason for a collective
bargaining agreement if the company would decide — as it did decide — to stop producing moving pictures, because the resultant
ultimate effect would be the dismissal or separation of employees. In fact, subsequent events proved the prudence of the action
taken by the LVN. When the stockholders decided to stop movie production as of May 31, 1961, the LVN was compelled to dismiss
its employees because there was no more work for them. Had the LVN agreed to enter into collective bargaining agreements with
the two unions without awaiting the result of the stockholders' meeting, the contracts would have become inutile anyway because it
was closing shop.

The petitioners in both cases also allege that non-union members were employed by the LVN even after May 31, 1961. This is not
correct. The truth is that although the LVN studio equipments and movie apparatus were being used in the production of pictures,
they were being used not to produce LVN pictures but were leased to small independent producers. The several lessees employed
former workers of the LVN but the employment of these people depended solely upon the discretion of the different lessees,
without any participation of or interference from the LVN.

The petitioners also contend that the LVN was not "really losing" because its assets, namely, all the 320 finished films, were
undervalued at only P320, or at P1.00 book value per picture, when they were actually earning thousands of pesos. We find no merit
in this argument. In determining the yearly profit or loss of a business enterprise, what is taken into account under section 28,
Chapter IV of the National Internal Revenue Code (Act No. 466, as amended), are the "gross income computed under section twenty
nine, less the deductions allowed by section thirty" of the said Act. A perusal of the said pertinent provisions of the Tax Code will
clearly show that the book value or inventory value of assets (such as the 320 finished films book-valued at P1.00 per picture) is
immaterial and is not considered in the preparation of the yearly profit and loss statement which is usually attached to the yearly
balance sheet. What are considered only are the incomes (not book value of assets) and the expenses or deductions allowed in
section 30 of the Tax Code. What is relevant and material, therefore, for purposes of determining the yearly profit or loss of a
corporation like the LVN is that all such incomes are duly reported. And this has been done by the LVN.

Besides, this rate of depreciation has been observed and adhered to strictly by the LVN since 1946, and sanctioned and allowed by
the Bureau of Internal Revenue which, up to now, has not found any occasion to object to the said system of full depreciation after a
period of 6 months from the date of first exhibition. Indeed, under this procedure the LVN made and realized annual profits from
1946 to 1956, inclusive, as aforementioned. However, as hereinfore explained, it suffered losses in its movie production business
from 1957 to 1961.

The amount of P10,124,400, allegedly earned by these finished films from 1958 to 1961, included both the earnings from the old
pictures that were continued to be exhibited even after the period of six months, and the incomes realized from the exhibition of all
new pictures produced at an average of 22 new pictures a year from 1956 to May 31, 1961. Therefore, the said amount of
P10,124,400.00 represented practically the total gross income of the LVN in the period of five years as reflected in the yearly
operating account and yearly profit and loss statements attached to its yearly balance sheets. Thus, the petitioners' allegation that
the said amount of P10,124,400.00 represented only the earnings of the 320 finished films book-valued at P1.00 each, is inaccurate
and misleading.

This Court, in a number of cases, has recognized and affirmed the right of an employer to lay off or dismiss employees because of
losses in the operation of its business, 1 lack of work, 2 and considerable reduction in the volume of his business. 3 We have held
that such acts of dismissal do not constitute unfair labor practice. 4 Indeed, "an employer may close his business, provided the same
is done in good faith and is due to causes beyond his control. To rule otherwise would be oppressive and inhuman." 5

The respondent CIR found for a fact, and our own independent study of the evidence shows, that the LVN suffered tremendous
losses, completely depleting its capital which was needed to operate and continue its business of producing moving pictures. In
order to avoid immediate lay-off of employees and the closure of its business, the LVN proposed to the EWA a change in the
payment of salaries and wages of the employees and workers from salary or wage basis to the "pakiao" system; and when this was
rejected by the union, it offered to reduce the monthly compensation of all the employees (except those receiving less than P175 a
month and the daily wage earners) regardless of their union membership, and this too was rejected. In order to avoid further losses
and in view of the refusal of the union to cooperate in alleviating its mounting losses, the LVN was left with no alternative but to
close its movie production as of May 31, 1961 and to dismiss its employees. This the LVN had the right to do, and it did so in good
faith. We are not unmindful of the plight of the employees in this case, but we consider it oppressive to compel the LVN to continue
its business of producing movies when to do so would only result in its incurring further losses.

Under the Termination Pay Law (R.A. 1052, sec. 1, as amended by R.A. 1787), one of the just causes for terminating an employment
without a definite period by the employer, is the closing or cessation of operations of the establishment or enterprise, unless the
closing is for the purpose of defeating the intention of the said law. Since the LVN in good faith stopped its movie production
business on May 31, 1961, it could therefore legally dismiss its employees. But before doing so, it gave them sufficient notice and an
ample period within which to look for other employments. Therefore, contrary to the petitioners' allegation, the Termination Pay
Law applies.

2. Anent the second issue, the CIR found that the DPI is an entity separate and distinct from the LVN. Thus, the CIR held in case 3013-
ULP (LVN Pictures Checkers' Union [NLU] v. LVN Pictures, et al.) that:

"The Dalisay Pictures, Inc. is a separate and distinct entity from the LVN Pictures, Inc., hence, it cannot be said that there was bad
faith in the termination of the employees mentioned in paragraph 5(a) of the complaint. The Articles of Incorporation of the Dalisay
Pictures Inc. (Annex '2' RCA) duly registered with the Securities and Exchange Commission shows that the incorporators of the said
corporation are Encarnacion Luna, Maria Sevilla, Delfin Buencamino, Nicanor S. Sison, Jose T. Beltran, who are entirely different from
the owners of the LVN Pictures, namely, the De Leon family, Villongco and the Navoa family. Hence, the two corporations are
distinct and separate from each other. The only point of contact between the Dalisay Pictures, Inc. and the LVN Pictures, Inc. is when
the former leases its movie equipment with the latter."

To the same tenor is the CIR's holding in case 2879-ULP (LVN Pictures Employees & Workers Association [NLU] v. LVN Pictures, Inc.)
which states, inter alia:

"The lessees Dalisay Pictures, Inc., Ilang-Ilang Productions, Arriba Productions, Inc., and Magna East Productions, are separate and
distinct business establishments and/or entities from the LVN Pictures, Inc. These are separate and distinct corporate entities and
independent from each other. They pursue their business enterprises according to their respective incorporation papers. They
produce movie pictures of their own choice employing their own capital and separate personnel force without the intervention and
interference of the respondent LVN Pictures, Inc. These firms leased the equipments and production properties of the latter (LVN
Pictures, Inc.) with rents properly paid by them."

The foregoing factual findings of the CIR are supported by substantial evidence on record and therefore are conclusive. The rule is
now firmly established that the CIR findings of fact are not to be disturbed on appeal as long as they are supported by such material
and relevant evidence as a reasonable mind might accept as adequate to support a conclusion, 6 the appeal to the Supreme Court
being then confined to questions of law. 7 We can not therefore disturb the CIR findings of fact on the matter of the separate
identities of the LVN and the DPI.

3. We have noted that in the second case at bar (LVN Pictures Checkers' Union [NLU], L-26432), the CIR awarded one-month pay to
each of the workers involved therein, in addition to holding that they should be given the first preference in the event the LVN
would operate anew.

The award of one-month pay to the members of the LPCU is not justified under the circumstances. For it is now settled that when an
employment is terminated for a just cause as defined in section 1 of Rep. Act 1052, as amended by Rep. Act 1787, because of the
losses incurred by the business, the employee whose services are terminated or dispensed with is not entitled to separation pay 8 .
However, because the LVN did not appeal from the said portion of the decision awarding a month's pay to each of the members of
the LPCU, nor discussed or called the attention of this Court to this error, we are not authorized to consider this unassigned error. 9

ACCORDINGLY, the appealed decisions and resolutions of the Court of Industrial Relations in case 2879-ULP (LVN Pictures Employees
and Workers Association [NLU] v. LVN Pictures, Inc.) and in case 3013-ULP (LVN Pictures Checkers' Union [NLU] v. LVN Pictures, Inc.,
et al.) are affirmed. No pronouncement as to costs.

3. Kiok Loy v. NLRC, et. al. No. L-54334, Jan. 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION (NLRC) and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN), respondents.

Ablan and Associates for petitioner.

Abdulcadir T. Ibrahim for private respondent.

DECISION

CUEVAS, J p:
Petition for CERTIORARI to annul the decision 1 of the National Labor Relations Commission (NLRC) dated July 20, 1979 which found
petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g) of Article 249 2 of
the New Labor Code, 3 and declared the draft proposal of the Union for a collective bargaining agreement as the governing
collective bargaining agreement between the employees and the management. cdrep

The pertinent background facts are as follows:

In a certification election held on October 3, 1978, the Pambansang Kilusan ng Paggawa (Union for short), a legitimate labor
federation, won and was subsequently certified in a resolution dated November 29, 1978 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 for short). The Company's
motion for reconsideration of the said resolution was denied on January 25, 1978.

Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies of its proposed
collective bargaining agreement. At the same time, it requested the Company for its counter proposals, Eliciting no response to the
aforesaid request, the Union again wrote the Company reiterating its request for collective bargaining negotiations and for the
Company to furnish them with its counter proposals. Both requests were ignored and remained unacted upon by the Company.

Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on February 14, 1979, filed a
"Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic issues in collective bargaining. 5

Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts towards an amicable
settlement failed, prompting the Bureau of Labor Relations to certify the case to the National Labor Relations Commission (NLRC) for
compulsory arbitration pursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case
was assigned, set the initial hearing for April 29, 1979. For failure however, of the parties to submit their respective position papers
as required, the said hearing was cancelled and reset to another date. Meanwhile, the Union submitted its position paper. The
Company did not, and instead requested for a resetting which was granted. The Company was directed anew to submit its financial
statements for the years 1976, 1977, and 1978.

The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty. Rodolfo dela Cruz. On
May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as counsel for the Company only to request for another
postponement allegedly for the purpose of acquainting himself with the case. Meanwhile, the Company submitted its position paper
on May 28, 1979.

When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr. Ching, who was supposed to
be examined, failed to appear. Atty. Panganiban then requested for another postponement which the labor arbiter denied. He also
ruled that the Company has waived its right to present further evidence and, therefore, considered the case submitted for
resolution.

On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations Commission. On July 20, 1979,
the National Labor Relations Commission rendered its decision, the dispositive portion of which reads as follows: LLjur

"WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal to bargain, in violation of Section (g)
Article 248 (now Article 249), of P.D. 442, as amended. Further, the draft proposal for a collective bargaining agreement (Exh."E")
hereto attached and made an integral part of this decision, sent by the Union (Private respondent) to the respondent (petitioner
herein) and which is hereby found to be reasonable under the premises, is hereby declared to be the collective agreement which
should govern the relationship between the parties herein.

SO ORDERED." (Words in parenthesis supplied)

Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor Relations Commission acted
without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in rendering the challenged
decision. On August 4, 1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however, the
Resolution of dismissal was reconsidered and the petition was given due course in a Resolution dated April 1, 1981.

Petitioner Company now maintains that its right to procedural due process has been violated when it was precluded from presenting
further evidence in support of its stand and when its request for further postponement was denied. Petitioner further contends that
the National Labor Relations Commission's finding of unfair labor practice for refusal to bargain is not supported by law and the
evidence considering that it was only on May 24. 1979 when the Union furnished them with a copy of the proposed Collective
Bargaining Agreement and it was only then that they came to know of the Union's demands; and finally, that the Collective
Bargaining Agreement approved and adopted by the National Labor Relations Commission is unreasonable and lacks legal basis.

The petition lacks merit. Consequently, its dismissal is in order.

Collective bargaining which is defined as negotiations towards a collective agreement, 6 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. 7 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.

From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the Union has a
valid cause to complain against its (Company's) attitude, the totality of which is indicative of the latter's disregard of, and failure to
live up to, what is enjoined by the Labor Code — to bargain in good faith. Cdpr

We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair labor practice. It has
been indubitably established 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. 8 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. 9 Even during the period of compulsory arbitration before the NLRC, petitioner Company's approach and attitude —
stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its
financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union.
Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by
the Union much less justify its opposition thereto. 10

The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications 11 the rule
had been laid down that "unfair labor practice is committed when it is shown that the respondent employer, after having been
served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said
proposal. This doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while
the law does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation with
an open mind and make a reasonable effort to reach a common ground of agreement".

As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the issue of due process
claiming, that it was denied the right to be heard and present its side when the Labor Arbiter denied the Company's motion for
further postponement.

Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf, the claimed denial
of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had not even honored
respondent Union with any reply to the latter's successive letters, all geared towards bringing the Company to the bargaining table.
It did not even bother to furnish or serve the Union with its counter proposal despite persistent requests made therefor. Certainly,
the moves and overall behavior of petitioner-company were in total derogation of the policy enshrined in the New Labor Code which
is aimed towards expediting settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an
illegal scheme and dubious maneuvers.

Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which was approved and
adopted by the NLRC is a total nullity for it lacks the company's consent, much less its argument that once the Collective Bargaining
Agreement is implemented, the Company will face the prospect of closing down because it has to pay a staggering amount of
economic benefits to the Union that will equal if not exceed its capital. Such a stand and the evidence in support thereof should have
been presented before the Labor Arbiter which is the proper forum for the purpose.
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. 13 More so, as in the instant case, where the intervention of the National Labor
Relations Commission was properly sought for after conciliation efforts undertaken by the BLR failed. The instant case being a
certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to
determine the reasonableness of the terms and conditions of employment embodied in any Collective Bargaining Agreement. To
that extent, utmost deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing agreement
by the employees and management must be accorded due respect by this Court.

WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27, 1980, is LIFTED and SET ASIDE.

No pronouncement as to costs.

SO ORDERED.

4. Divine Word University of Tacloban v. Secretary of Labor

DIVINE WORD UNIVERSITY OF TACLOBAN, petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT and DIVINE WORD UNIVERSITY
EMPLOYEES UNION-ALU, respondents.

Generosa R. Jacinto for petitioner.

Joji L. Barrios for private respondent.

DECISION

ROMERO, J p:

Assailed in this petition for certiorari for being violative of the "constitutional right of employees to self-organization which includes
the right to form, join or assist labor organizations of their own choosing for purposes of collective bargaining," 1 are the Orders of
May 23, 1989 and January 17, 1990 issued by then Secretary of Labor and Employment Franklin H. Drilon and Acting Secretary of
Labor and Employment Dionisio D. de la Serna, respectively. cdrep

Culled from the records are the following facts which led to the filing of the instant petition:

On September 6, 1984, Med-Arbiter Bienvenido C. Elorcha certified the Divine Word University Employees Union (DWUEU) as the
sole and exclusive bargaining agent of the Divine Word University (University for brevity). On March 7, 1985, DWUEU submitted its
collective bargaining proposals. On March 26, 1985, the University replied and requested a preliminary conference to be held on
May 28, 1985. However, two days before the scheduled conference or on May 26, 1985, DWUEU's resigned vice-president Mr.
Brigido Urminita (or Urmeneta) wrote a letter addressed to the University unilaterally withdrawing the CBA proposals. Consequently,
the preliminary conference was cancelled. 2

After almost three years, or on March 11, 1988, DWUEU, which had by then affiliated with the Associated Labor Union, 3 requested
a conference with the University for the purpose of continuing the collective bargaining negotiations. 4 Not having heard from the
University, DWUEU-ALU sent a follow-up letter on March 23, 1988 reiterating its request for a conference and warning the
University against committing acts of interference through its various meetings with both the academic and non-academic
employees regarding their union affiliation and activities. Despite the letter, the University persisted in maintaining silence.

On April 25, 1988, 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 (sic) employees. 5 The conferences which were held after the filing of the notice of strike led to the
conclusion of an agreement between the University and DWUEU-ALU on May 10, 1888 with the following terms: cdphil

"1. Union will submit their (sic) CBA proposals on Friday, May 13, 1988 for whatever action management will take.

2. Union and management agrees (sic) to sit down and determine (sic) the number of employees that will represent their bargaining
unit.
3. Conciliation proceedings is (sic) temporarily suspended until the parties inform this office of further development.

4. The issues of discrimination: re Ms. Colinayo and Ms. Cinco Flores is settled.

5. Issue (sic) on coercion and refusal to bargain shall be subject of continuing dialogue.

6. Atty. Jacinto shall be given 10 days notice in the next conciliation meeting." 6

However, it turned out that an hour before the May 10, 1988 agreement was concluded, the University had filed a petition for
certification election with the Region VIII office of the Department of Labor and Employment. 7

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. Thereafter, through the National Conciliation and Mediation Board (NCMB) of Region VIII,
marathon conciliation conferences were conducted but to no avail. Hence, on August 25, 1988, then Secretary of Labor Franklin M.
Drilon, exercising his powers under Art. 263(g) of the Labor Code, issued an Order assuming jurisdiction over the labor dispute and
directing all striking workers to report back to work within twenty-four (24) hours and the management to accept them back under
the same terms and conditions prevailing prior to the work stoppage. The Secretary also designated the NCMB to hear the case and
to submit its report thereon. 8

On the same day, Med-Arbiter Rodolfo S. 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." 9

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. On September 20, 1988, the Labor Secretary granted said motion and directed
Milado to hold in abeyance any and all certification election proceedings at the University pending the resolution of the labor
dispute. 10 The Labor Secretary's Order, predicated on his extraordinary powers under Art. 263 (g) of the Labor Code, conformed
with this Court s Resolution of October 29, 1987 in the Bulletin Today cases (G.R. Nos. 79276 and 79883) where the issue of strong
disagreement among the parties on the question of representation was deemed subsumed in the labor dispute certified for
compulsory arbitration. The Secretary added:

"Underscoring the necessity to conform with this settled doctrine is the fact that the dispute over which this Office assumed
jurisdiction arose from the alleged continued refusal by the University to negotiate a CBA with the Union despite the latter's
certification as exclusive bargaining agent in 1984. Necessarily related thereto is the representativity issue raised by the University in
its certification election petition. The resolution of these issues in one proceeding is, in the words of the Supreme Court, 'meet and
proper in view of the very special circumstances obtaining in this case, and will prevent split jurisdiction and that multiplicity of
proceedings which the law abhors' (24 December 1987 [should be December 17, 1987] resolution of the Supreme Court in the
Bulletin Today cases, supra). Cdpr

Moreover, to allow a certification election to proceed at this point in time might further rupture the already strained labor-
management relations pervading at the University. The assumption order issued by this Office merely served as a temporary bond to
hold together such a fragile relationship. More importantly, the projected election hastily decreed would preempt the proper
resolution of the issues raised and pursued so zealously by the employees that prompted them to stage their strike." 11

The NCMB of Region VIII conducted hearings on the case from October 17-18, 1988. On October 26, 1988, 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. 12

Exercising once again his extraordinary powers under Art. 263(g) of the Labor Code, the Secretary consolidated "the entire labor
dispute including all incidents arising therefrom, or necessarily related thereto" in his Order of May 23, 1989 13 and the following
cases were "subsumed or consolidated to the labor dispute": the petition for certification election docketed as MED-ARB-Case No. 5-
04-88, the DWUEU's complaint docketed as NLRC Case No. 8-0321-88, and the University's complaint docketed as NLRC Case No. 8-
0323-88. Thus, in said Order of May 23, 1989, the Secretary of Labor resolved these issues: "(1) whether there was refusal to bargain
and an impasse in bargaining; (2) whether the complaints for unfair labor practices against each other filed by both parties, including
the legality of the strike with the NLRC, which later on was subsumed by the assumption Order, are with merits; and, (3) whether or
not the certification election can be passed upon by this Office."

On the first issue, the Secretary of Labor said:

"It is a matter of record that when the Union filed its Notice of Strike (Exh. A) two of the issues it raised were bargaining deadlock
and refusal to bargain. It is also worth mentioning that the CBA proposals by the Union were submitted on March 7, 1985 (Exh. 9)
after Med-Arbiter Bienvenido Elorcha issued a certification election Order dated September 6, 1984 (Exh. 4). An examination of the
CBA proposals submitted by the Union of the University showed there was (sic) some negotiations that has (sic) taken place as
indicated on the handwritten notations made in the CBA proposal (Exh. F). The said proposals include among others, union scope,
union recognition, union security, union rights, job security, practices and privileges, terms and conditions of work, leave of absence,
hours of work, compensation salary and wages, workers' rights and safety, workers' education, retirement longevity pay, strike and
lockouts and grievance machinery.

The said CBA proposals were indorsed by DWU President to Atty. Generosa R. Jacinto, Divine Word University legal counsel together
with a copy of the Union CBA proposals. The submission of the CBA proposals and the reply letter of the DWU counsel, dated March
26, 1985 to the Union indicated that the CBA negotiations process was set into motion. DWU's counsel even suggested that the
preliminary conference between the union and the university be scheduled on 28 May 1985 at 2:30 P.M. which unfortunately did
not take place due to the alleged withdrawal of the CBA proposals.

Undeniably, the Union and the DWU have not been able to conclude a CBA since its certification on 6 September 1984 by then Med-
Arbiter Bienvenido Elorcha. But the non-conclusion of a CBA within one year, as in this case, does not automatically authorize the
holding of a certification election when it appears that a bargaining deadlock issue has been submitted to conciliation by the certified
bargaining agent. The records show that the Notice of Strike was filed by the Union on 25 April 1988, citing bargaining deadlock as
one of the grounds (Annex '1'), while the Petition for Certification Election was filed by the DWU on 10 May 1988. The filing of the
notice of strike was precipitated by the University's act of not replying to the Union's letters of March 11 and March 23, 1988.

This being the case, Section 3, Rule V, Book V of the Rules Implementing the Labor Code applies and we quote: LibLex

'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 it (sic)
before the filing of a petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a
party has been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.'

Clearly, a bargaining deadlock exists and as a matter of fact this is being conciliated by the National Conciliation and Mediation Board
at the time the University filed its Petition for Certification Election on 10 May 1988. In fact the deadlock remained unresolved and
was in fact mutually agreed upon to be conciliated further by the NCMB as per items 1 and 5 of the 'Agreement' (Exhibit 'L').

The aforequoted rule clearly barred the Med-Arbiter from further entertaining the petition for certification election. Furthermore,
the various communications sent to the University by the Union prior to the filing of the notice of strike was enough opportunity for
the former to raise the issue of representation if it really casts doubt to the majority status of the Union. More importantly, if DWU
indeed doubted the status of the union, how come it entered into an agreement with the latter on May 10, 1988. Apparently, the
move to file the petition on the same day was an afterthought on the part of the University which this Office considers as fatal." 14

The same Order 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 (NLRC Case No. 8-0321-88) 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" (NLRC Case No. 8-0323-88).

Citing the Bulletin Today cases, the said Order pronounced as untenable the University's claim that the assumption Order earlier
issued by the Office of the Secretary of Labor merely held in abeyance the holding of a certification election and that the
representation issue was not deemed consolidated by virtue of the said assumption Order. Accordingly, the Order has this
dispositive portion:

"WHEREFORE, ALL THE FOREGOING PREMISES CONSIDERED, the Divine Word University of Tacloban and the Divine Word University
Employees Union are hereby directed to enter into a collective bargaining agreement by adopting the Union's CBA proposals sent to
the DWU President on 19 May 1988 (Exhibit '6'). DWU is hereby warned that any unwarranted delay in the execution of the
collective bargaining agreement will be construed as an unfair labor practice act. Moreover, the petition for certification election
filed by the University is hereby dismissed for lack of merit and the Order of Med-Arbiter Rodolfo Milado set aside. Likewise, NLRC
CASES Nos. 8-0321-88 and 8-0323 filed by the Union and the DWU, respectively, are hereby dismissed for lack of merit.
SO ORDERED." 15

The University filed a motion for the reconsideration of said Order. It was opposed by the DWUEU-ALU. However, since on May 5,
1989 the DWUEU-ALU had filed a second notice of strike charging the University with violation of the return-to-work order of the
Secretary of Labor and unfair labor practices such as dismissal of union officers, coercion of employees and illegal suspension, 16 the
Office of the Secretary called for a series of conciliation and mediation conferences between the parties. At the July 5, 1989
conference, the University agreed to submit its proposals on how to settle amicably the labor dispute on or before July 17, 1989.

On said date, however, the University failed to appear. Instead, its representative phoned in a request for the resetting of the
conference purportedly because its Board of Directors had failed to muster a quorum. Hence, after so informing ALU's Eastern
Visayas Vice-President, the conference was rescheduled for July 19, 1989. The University once again failed to appear. LLjur

In view of the University's intransigence, the DWUEU-ALU pursued its second notice of strike on November 24, 1989. Four days later,
the University filed with the Office of the Secretary of Labor a motion praying that said Office assume jurisdiction over the dispute or
certify the same to the NLRC for compulsory arbitration on the ground that the strike affected not only the University but also its
other academic and non-academic employees, the students and their parents. On December 4, 1989, the Office of the Secretary of
Labor received a Resolution passed by the students of the University urging said Office's assumption of jurisdiction over the labor
dispute and the earliest resolution of the case.

Consequently, on December 29, 1989, Secretary Drilon issued an Order reiterating the August 28, 1988 Order which assumed
jurisdiction over the labor dispute. He ordered all striking workers to return to work within 24 hours and the University to accept
them back under the same terms and conditions of employment; deemed the issues raised in the May 5, 1989 notice of strike as
"subsumed in this case"; ordered the Director of Regional Office No. VIII to hear the issues raised in said notice of strike and to
submit his findings and recommendations within ten days from submission of the case by the parties, and enjoined the parties to
cease and desist from any act that may "aggravate the employer-employee relationship."

On January 17, 1990, Acting Secretary of Labor Dionisio L. de la Serna, "dismissed" for lack of merit the University's motion for
reconsideration and affirmed the Order of May 23, 1989. He noted the fact that the March 7, 1985 collective bargaining proposals of
the DWUEU had not been validly withdrawn as the union's Vice-President had resigned and the withdrawal was signed only by three
of the eight members of the Executive Board of said union. Granting that the withdrawal was valid, the Acting Secretary believed
that it did not "exculpate the University from the duty to bargain with the Union" because the collective bargaining processes had
been "set in motion from the time the CBA proposals was (sic) received by the University until the impasse took place on account of
its failure to reply to the Union's letters pursuing its CBA Proposals dated March 11 and 23, 1988."

On the University's assertion that no negotiations took place insofar as the March 7, 1985 collective bargaining proposals are
concerned, the Acting Secretary found that:

". . . The records indicate otherwise. Conciliation meetings were conducted precisely to discuss the CBA proposals the Union
submitted to the University on March 7, 1985. As a matter of fact, the University admitted the existence of the deadlock when a
provision was incorporated in the agreement it signed on May 10, 1988 with the Union which reads:

'a. That on the matter of Bargaining Deadlock —

1. Union will submit their (renewed) CBA proposals on Friday May 13, 1988 for whatever action management will take.

2. Union and Management agree to sit down and determine the number of employees that will represent (constitute) their
bargaining unit;

xxx xxx xxx'

On account of the deadlock regarding the March 7, 1985 CBA proposals, it was agreed that the Union submit a renewed CBA
proposal which it did on May 19, 1988. The records indicate that no response was made by the University. The uncooperative
posture of the University to respond and continue with the negotiations could very well be explained when one (1) hour prior to the
start of the conciliation on May 10, 1988, the University filed a Petition for Certification with (sic) Regional Office. The surreptitious
filing of the petition and at the same time cunningly entering into an agreement which required the Union to submit a renewed CBA
proposal, is patently negotiating in bad faith. The University should have candidly and timely raised the issue of representation, if it
believed that such issue was valid, not by entering into an agreement. The May 10, 1988 Agreement only served to falsely heighten
the expectations of the Union and this Office that a mutually acceptable settlement of the dispute was in the offing. This Office
cannot tolerate such actuations by the University." 17

The 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. On the University's contention that the motion for intervention of the
DWU-IFEU was not resolved, the Acting Secretary ruled that said motion was in effect denied when the petition for certification
election filed by the University was dismissed in the Order of May 23, 1989. cdrep

Hence, the University had recourse to instant petition.

In its petition for certiorari and prohibition with preliminary injunction filed on February 9, 1990, the University raises as grounds
therefor the following:

"A. Respondent Secretary committed grave and patent abuse of discretion amounting to lack of jurisdiction in issuing his order dated
17 January 1990 finally denying petitioner's motion for reconsideration in the face of the order dated 29 December 1989 and
subsequent acts of DOLE official subsuming the second notice of strike with the first notice of strike.

B. In the absence of a certified CBA and there having been no certification election held in petitioner unit for more than five (5)
years, a certification election is mandatory.

C. Respondent Secretary committed grave and patent abuse of discretion in issuing his orders dated 23 May 1989 and 17 January
1990 disregarding evidence on record, provisions of law and established jurisprudence.

D. Petitioner was denied due process." 18

Citing the dispositive portion of the December 29, 1989 Order of the Secretary of Labor which states that the issues raised in the
May 5, 1989 notice of strike "are ordered subsumed in this case" and elaborating on the meaning of the word "subsume," i.e., "to
include within a larger class, group, order, etc.," 19 the petitioner University argues that the Secretary of Labor "cannot resolve
petitioner's and (intervenor) DWU-IFEU's motions for reconsideration (in the NS. 1) of the Order dated 23 May 1989 until the
proceedings in the subsumed NS. 2 are terminated." It opines that since the Regional Director is an extension of the Secretary of
Labor, the latter should have waited for the recommendation of the former on the issues in notices of strike nos. 1 and 2 before the
he issued the Order of January 17, 1990.

We agree with the Acting Secretary of Labor's observation that the action for intervention had in effect been denied by the dismissal
of the petition for certification election in the May 23, 1989 Order. The sub silencio treatment of the motion for intervention in said
Order does not mean that the motion was overlooked. It only means, as shown by the findings of facts in the same Order, that there
was no necessity for the holding of a certification election wherein the DWU-IFEU could participate. In this regard, petitioner's undue
interest in the resolution of the DWU-IFEU's motion for intervention becomes significant since a certification election is the sole
concern of employees except where the employer itself has to file a petition for certification election. But once an employer has filed
said petition, as the petitioner did in this case, its active role ceases and it becomes a mere bystander. Any uncalled-for concern on
the part of the employer may give rise to the suspicion that it is batting for a company union. 20

Petitioner's contention that the Acting Secretary of Labor should have deferred the issuance of the Order of January 17, 1990 until
after his receipt of the Regional Director's recommendation on the notices of strike is, under the circumstances, untenable. Ideally, a
single decision or order should settle all controversies resulting from a labor dispute. This is in consonance with the principle of
avoiding multiplicity of suits. However, the exigencies of a case may also demand that some matters be threshed out and resolved
ahead of the others. Any contrary interpretation of the Secretary of Labor's powers under Art. 263(g) of the Labor Code on this
matter would only result in confusion and delay in the resolution of the manageable aspects of the labor dispute. llcd

In this case, resolution of the motion for reconsideration at the earliest possible time was urgently needed to set at rest the issues
regarding the first notice of strike, the certification election and the unfair labor practice cases filed by the University and the
DWUEU-ALU. The nature of the business of the University demanded immediate and effective action on the part of the respondent
public officials. Otherwise, not only the contending parties in the dispute would be adversely affected but more importantly, the
studentry and their parents. It should be emphasized that on January 17, 1990, the second notice of strike could not have been
resolved as yet considering that at that time, Regional Director Teddy S. Cabeltes was still conducting the conference between the
parties in pursuance of the directive in the Order of December 19, 1989. The Secretary, or for that matter, the Acting Secretary,
could not have intended the efforts of the Regional Director to be inutile or fruitless. Thus, when he set aside the issues raised in the
second notice of strike, the Acting Secretary was acting in accordance with the exigencies of the circumstances of the case. Hardly
can it be said to be an abuse of his discretion.

On the issue of whether or not a certification election should have been ordered by the Secretary of Labor, pertinent are the
following respective provisions of the Labor Code and Rule V, Book V of the Implementing Rules and Regulations of the same Code:

"ART. 258. When an employer may file petition. — When requested to bargain collectively, an employer may petition the Bureau for
an election. If there is no existing certified collective bargaining agreement in the unit, the Bureau shall, after hearing, order a
certification election.

All certification cases shall be decided within twenty (20) working days.

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and regulations prescribed by
the Secretary of Labor.

Sec. 3. When to file. — In the absence of a collective bargaining agreement duly registered 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 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 valid notice of strike or lockout. (Emphasis supplied)

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."

These provisions make it plain that in the absence of a collective bargaining agreement, an employer who is requested to bargain
collectively may file a petition for certification election any time except upon a clear showing that one of these two instances exists:
(a) the petition is filed within one year from the date of issuance of a final certification election result or (b) when a bargaining
deadlock had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

While there is no question that the petition for certification election was filed by the herein petitioner after almost four years from
the time of the certification election and, therefore, there is no question as to the timeliness of the petition, the problem appears to
lie in the fact that the Secretary of Labor had found that a bargaining deadlock exists. llcd

A "deadlock" is defined as the "counteraction of things producing entire stoppage: a state of inaction or of neutralization caused by
the opposition of persons or of factions (as in government or a voting body): standstill." 21 There is a deadlock when there is a
"complete blocking or stoppage resulting from the action of equal and opposed forces; as, the deadlock of a jury or legislature." 22
The word is synonymous with the word impasse 23 which, within the meaning of the American federal labor laws, "presupposes
reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the parties." 24

A thorough study of the records reveals that there was no "reasonable effort at good faith bargaining" specially 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. This is clear from the provisions of the Labor
Code Art. 250(a) of which states:

"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.

(b) Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not
later than ten (10) calendar days from the date of request.

(c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and
immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the attendance of
the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the
Board may call;
(d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the
early settlement of the disputes; and prLL

(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary
arbitrator."

Considering the procedure outlined above, 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. 25 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."

Moreover, the University's unscrupulous attitude towards the DWUEU-ALU is also betrayed by its belated questioning of the status
of the said union. The communications between them afforded the University ample opportunity to raise the issue of representation
if indeed it was doubtful of the DWUEU-ALU's status as a majority union, but it failed to do so. On the other hand, in the agreement
of May 10, 1988, the University even agreed "to sit down and determine the number of employees that will represent their
bargaining unit." This clearly indicates that the University recognized the DWUEU-ALU as the bargaining representative of the
employees and is, therefore, estopped from questioning the majority status of the said union. prLL

Hence, petitioner's contention that the DWUEU-ALU's proposals may not be unilaterally imposed on it on the ground that a
collective bargaining agreement is a contract wherein the consent of both parties is indispensable is devoid of merit. A similar
argument had already been disregarded in the case of Kiok Loy v. NLRC, 26 where we upheld the order of the NLRC declaring the
union's draft CBA proposal as the collective agreement which should govern the relationship between the parties. Kiok Loy v. NLRC is
applicable in the instant case considering that the facts therein have also been indubitably established in this case. These factors are:
(a) the union is the duly certified bargaining agent; (b) it made a definite request to bargain and submitted its collective bargaining
proposals, and (c) the University made no counter proposal whatsoever. As we said in Kiok Loy, "[a] company's refusal to make
counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is especially true where
the Union's request for a counter proposal is left unanswered." 27 Moreover, the Court added in the same case 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." 28
That being the case, the petitioner may not validly assert that its consent should be a primordial consideration in the bargaining
process. By its acts, no less than its inaction which bespeak its insincerity, it has forfeited whatever rights it could have asserted as an
employer. We, therefore, find it superfluous to discuss the two other contentions in its petition.

WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. This decision is immediately executory. Costs against the
petitioner.

SO ORDERED.

5. New Pacific Timber & Supply Company, Inc. v. NLRC, G.R. No. 124224, Mar. 17, 2000

NEW PACIFIC TIMBER & SUPPLY COMPANY, CO., INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MUSIB M. BUAT,
LEON G. GONZAGA, JR., ET AL., NATIONAL FEDERATION OF LABOR, MARIANO AKILIT and 350 OTHERS, respondents.

Siguion-Reyna Montecillo & Ongsiako for petitioner.

The Solicitor General for public respondent.

SYNOPSIS

Executive Labor Arbiter Hakim S. Abdulwahid in an order granted monetary benefits consisting of wage increases, housing
allowances, bonuses, etc. to the regular rank-and-file employees of petitioner company. Petitioner company complied; and the
corresponding quitclaims were executed. The case was considered closed following the manifestation of respondent National
Federation of Labor (NFL) that it will no longer appeal the October 18, 1993 Order of Labor Arbiter Villena. However,
notwithstanding such manifestation, a "Petition for Relief'' was filed in behalf of 186 of the private respondents "Mariano J. Akilit
and 350 others" on May 12, 1994. In their petition, they claimed that they were wrongfully excluded from enjoying the benefits
under the CBA since the agreement with NFL and petitioner Company limited the CBA's implementation to only the 142 rank-and-
file employees enumerated therein. They claimed that NFL's misrepresentations had precluded them from appealing their exclusion.
Treating the petition for relief as an appeal, the National Labor Relations Commission (NLRC) entertained the same. Thereafter, said
Commission issued a resolution declaring that the 186 excluded employees "form part and parcel of the then existing rank-and-file
bargaining unit" and were, therefore, entitled to the benefits under the CBA. Petitioner Company filed a motion for reconsideration
but was denied for lack of merit. Hence, the present petition. Petitioner argued that the private respondents are not entitled to the
benefits under the CBA because employees hired after the term of a CBA are not parties to the agreement, and, therefore, may not
claim benefits thereunder, even if they subsequently become members of the bargaining unit. As for the term of the CBA, petitioner
maintains that Article 253 of the Labor Code refers to the continuation in full force and effect of the previous CBA's terms and
conditions. By necessity, it could not possibly refer to terms and conditions which, as expressly stipulated, ceased to have force and
effect. TAEDcS

The Supreme Court dismissed the petition for lack of merit. According to the Court, Article 253 of the Labor Code clearly provides
that until a new Collective Bargaining Agreement has been executed by and between the parties, they are duty-bound to keep the
status quo and to continue in full force and effect the terms and conditions of the existing agreement. The law does not provide for
any exception nor qualification as to which of the economic provisions of the existing agreement are to retain force and effect;
therefore, it must be understood as encompassing all the terms and conditions in the said agreement. The Court also ruled that the
benefits under the CBA in the instant case should be extended to those employees who only became such after the year 1984. To
exclude them would constitute undue discrimination and deprive them of monetary benefits they would otherwise be entitled to
under a new collective bargaining contract to which they would have been parties. Since in this particular case, no new agreement
had been entered into after the CBA's stipulated term, it is only fair and just that the employees hired thereafter be included in the
existing CBA.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; NO GRAVE ABUSE OF DISCRETION ON THE PART OF THE NATIONAL LABOR
RELATIONS COMMISSION WHEN IT ENTERTAINED THE PETITION FOR RELIEF AND TREATED IT AS AN APPEAL EVEN IF IT WAS FILED
BEYOND THE REGLEMENTARY PERIOD FOR FILING AN APPEAL; THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WARRANTS
LIBERALITY IN THE APPLICATION OF TECHNICAL RULES AND PROCEDURE. — We find no grave abuse of discretion on the part of the
NLRC, when it entertained the petition for relief filed by the private respondents and treated it as an appeal, even if it was filed
beyond the reglementary period for filing an appeal. Ordinarily, once a judgment has become final and executory, it can no longer be
disturbed, altered or modified. However, a careful scrutiny of the facts and circumstances of the instant case warrants liberality in
the application of technical rules and procedure. It would be a greater injustice to deprive the concerned employees of the monetary
benefits rightly due them because of a circumstance over which they had no control. As stated above, private respondents, in their
petition for relief, claimed that they were wrongfully excluded from the list of those entitled to the CBA benefits by their union, NFL,
without their knowledge; and, because they were under the impression that they were ably represented, they were not able to
appeal their case on time. The Supreme Court has allowed appeals from decisions of the labor arbiter to the NLRC, even if filed
beyond the reglementary period, in the interest of justice. Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the
exercise of its appellate powers, "correct, amend or waive any error, defect or irregularity whether in substance or in form." Further,
Article 221 of the same provides that: "In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence
prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its
members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively
and without regard to technicalities of law or procedure, all in the interest of due process. . . . "

2. ID.; ID.; THE COLLECTIVE BARGAINING AGREEMENT REMAINS IN FULL FORCE AND EFFECT EVEN BEYOND THE STIPULATED TERM
IN THE ABSENCE OF A NEW AGREEMENT; ARTICLE 253 OF THE LABOR CODE DOES NOT PROVIDE FOR ANY EXCEPTION NOR
QUALIFICATION TO WHICH OF THE ECONOMIC PROVISIONS OF THE EXISTING AGREEMENT ARE TO RETAIN FORCE AND EFFECT,
THEREFORE, IT MUST BE UNDERSTOOD AS ENCOMPASSING ALL THE TERMS AND CONDITIONS OF SAID AGREEMENT. — It is clear
from the above provision of law that until a new Collective Bargaining Agreement has been executed by and between the parties,
they are duty-bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing
agreement. The law does not provide for any exception nor qualification as to which of the economic provisions of the existing
agreement are to retain force and effect; therefore, it must be understood as encompassing all the terms and conditions in the said
agreement. In the case at bar, no new agreement was entered into by and between petitioner Company and NFL pending appeal of
the decision in NLRC Case No. RAB-IX-0334-82; nor were any of the economic provisions and/or terms and conditions pertaining to
monetary benefits in the existing agreement modified or altered. Therefore, the existing CBA in its entirety, continues to have legal
effect. In a recent case, the Court had occasion to rule that Articles 253 and 253-A mandate the parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the expiration
of the old CBA and/or until a new agreement is reached by the parties. Consequently, the automatic renewal clause provided for by
the law, which is deemed incorporated in all CBA's, provides the reason why the new CBA can only be given a prospective effect.

3. ID.; ID.; ID.; ID.; TO RULE OTHERWISE WOULD CREATE A SITUATION THAT RUNS CONTRARY TO THE VERY INTENT AND PURPOSE
OF ARTICLES 253 AND 252-A OF THE LABOR CODE. — To rule otherwise, i.e., that the economic provisions of the existing CBA in the
instant case ceased to have force and effect in the year 1984, would be to create a gap during which no agreement would govern,
from the time the old contract expired to the time a new agreement shall have been entered into. For if, as contended by the
petitioner, the economic provisions of the existing CBA were to have no legal effect, what agreement as to wage increases and other
monetary benefits would govern at all? None, it would seem, if we are to follow the logic of petitioner Company. Consequently, the
employees from the year 1985 onwards would be deprived of a substantial amount of monetary benefits which they could have
enjoyed had the terms and conditions of the CBA remained in force and effect. Such a situation runs contrary to the very intent and
purpose of Articles 253 and 253-A of the Labor Code.

4. ID.; ID.; ID.; ID.; BENEFITS OF THE COLLECTIVE BARGAINING AGREEMENT SHOULD ALSO BE EXTENDED TO THOSE EMPLOYEES
WHO ONLY BECAME SUCH AFTER THE AGREEMENT WAS ENTERED INTO; TO DEPRIVE THEM WOULD CONSTITUTE UNDUE
DISCRIMINATION AND DEPRIVE THEM OF MONETARY BENEFITS THEY WOULD OTHERWISE BE ENTITLED TO UNDER A NEW
COLLECTIVE BARGAINING CONTRACT TO WHICH THEY WOULD HAVE BEEN PARTIES. — Petitioner Company insists that the rank-and-
file employees hired after the term of the CBA inspite of their subsequent membership in the bargaining unit, are not parties to the
agreement, and certainly may not claim the benefits thereunder. We do not agree. In a long line of cases, this Court has held that
when a collective bargaining contract is entered into by the union representing the employees and the employer, even the non-
member employees are entitled to the benefits of the contract. To accord its benefits only to members of the union without any
valid reason would constitute undue discrimination against nonmembers. It is even conceded, that a laborer can claim benefits from
a CBA entered into between the company and the union of which he is a member at the time of the conclusion of the agreement,
after he has resigned from said union. In the same vein, the benefits under the CBA in the instant case should be extended to those
employees who only became such after the year 1984. To exclude them would constitute undue discrimination and deprive them of
monetary benefits they would otherwise be entitled to under a new collective bargaining contract to which they would have been
parties. Since in this particular case, no new agreement had been entered into after the CBA's stipulated term, it is only fair and just
that the employees hired thereafter be included in the existing CBA. This is in consonance with our ruling that the terms and
conditions of a collective bargaining agreement continue to have force and effect beyond the stipulated term when no new
agreement is executed by and between the parties to avoid or prevent the situation where no collective bargaining agreement at all
would govern between the employer company and its employees. AcEIHC

DECISION
KAPUNAN, J p:

May the term of a Collective Bargaining Agreement (CBA) as to its economic provisions be extended beyond the term expressly
stipulated therein, and, in the absence of a new CBA, even beyond the three-year period provided by law? Are employees hired after
the stipulated term of a CBA entitled to the benefits provided thereunder?

These are the issues at the heart of the instant petition for certiorari with prayer for the issuance of preliminary injunction and/or
temporary restraining order filed by petitioner New Pacific Timber & Supply Company, Incorporated against the National Labor
Relations Commission (NLRC), et al. and the National Federation of Labor, et al. cdasia

The antecedent facts, as found by the NLRC, are as follows:

The National Federation of Labor (NFL, for brevity) was certified as the sole and exclusive bargaining representative of all the regular
rank-and-file employees of New Pacific Timber & Supply Co., Inc. (hereinafter referred to as petitioner Company). 1 As such, NFL
started to negotiate for better terms and conditions of employment for the employees in the bargaining unit which it represented.
However, the same was allegedly met with stiff resistance by petitioner Company, so that the former was prompted to file a
complaint for unfair labor practice (ULP) against the latter on the ground of refusal to bargain collectively. 2

On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order declaring (a) herein petitioner Company
guilty of ULP; and (b) the CBA proposals submitted by the NFL as the CBA between the regular rank-and-file employees in the
bargaining unit and petitioner Company. 3

Petitioner Company appealed the above order to the NLRC. On November 15, 1989, the NLRC rendered a decision dismissing the
appeal for lack of merit. A motion for reconsideration thereof was, likewise, denied in a Resolution, dated November 12, 1990. 4

Unsatisfied, petitioner Company filed a petition for certiorari with this Court. But the Court dismissed said petition in a Resolution,
dated January 21, 1991. 5

Thereafter, the records of the case were remanded to the arbitration branch of origin for the execution of Labor Arbiter
Abdulwahid’s Order, dated March 31, 1987, granting monetary benefits consisting of wage increases, housing allowances, bonuses,
etc. to the regular rank-and-file employees. Following a series of conferences to thresh out the details of computation, Labor Arbiter
Reynaldo S. Villena issued an Order, dated October 18, 1993, directing petitioner Company to pay the 142 employees entitled to the
aforesaid benefits the respective amounts due them under the CBA. Petitioner Company complied; and, the corresponding
quitclaims were executed. The case was considered closed following NFL's manifestation that it will no longer appeal the October 18,
1993 Order of Labor Arbiter Villena. 6

However, notwithstanding such manifestation, a "Petition for Relief" was filed in behalf of 186 of the private respondents "Mariano
J. Akilit and 350 others” on May 12, 1994. In their petition, they claimed that they were wrongfully excluded from enjoying the
benefits under the CBA since the agreement with NFL and petitioner Company limited the CBA's implementation to only the 142
rank-and-file employees enumerated. They claimed that NFL's misrepresentations had precluded them from appealing their
exclusion. 7

Treating the petition for relief as an appeal, the NLRC entertained the same. On August 4, 1994, said commission issued a resolution
8 declaring that the 186 excluded employees "form part and parcel of the then existing rank-and-file bargaining unit" and were,
therefore, entitled to the benefits under the CBA. The NLRC held, thus:

WHEREFORE, the appeal is hereby granted and the Order of the Labor arbiter dated October 18, 1993 is hereby Set Aside and
Vacated. In lieu hereof, a new Order is hereby issued directing respondent New Pacific Timber & Supply Co., Inc. to pay all its regular
rank-and-file workers their wage differentials and other benefits arising from the decreed CBA as explained above, within ten (10)
days from receipt of this order.

SO ORDERED. 9

Petitioner Company filed a motion for reconsideration of the aforequoted resolution.

Meanwhile, four separate groups of the private respondents, including the original 186 who had filed the "Petition for Relief” filed
individual money claims, docketed as NLRC Cases Nos. M-001991-94 to M-001994-94, before the Arbitration Branch of the NLRC,
Cagayan de Oro City. However, Labor Arbiter Villena dismissed these cases in Orders, dated March 11, 1994; April 13, 1994; March 9,
1994, and, May 10, 1994. The employees appealed the respective dismissals of their complaints to the NLRC. The latter consolidated
these appeals with the aforementioned motion for reconsideration filed by petitioner Company.

On February 29, 1996, the NLRC issued a resolution, the dispositive portion of which reads as follows:

WHEREFORE, the instant petition for reconsideration of respondent is Denied for lack of merit and the Resolution of this Commission
dated August 4, 1994 Sustained. The separate orders of the Labor Arbiter dated March 11, 1994, April 13, 1994, March 9, 1994 and
May 10, 1994, respectively, in NLRC Cases Nos. M-001991-94 to M-001994-94 are Set Aside and Vacated for lack of legal bases. prLL

Conformably, respondent New Pacific Timber and Supply Co., Inc. is hereby directed to pay individual complainants their CBA
benefits in the aggregate amount of P13,559,510.37, the detailed computation thereof is contained in Annex "A" which forms an
integral part of this resolution, plus ten (10%) percent thereof as Attorney's fees.

SO ORDERED. 10

Hence, the instant petition wherein petitioner Company raises the following issues:

THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN ALLOWING THE "PETITION FOR RELIEF" TO PROSPER.

II

THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN RULING THAT PRIVATE RESPONDENTS MARIANO
AKILIT AND 350 OTHERS ARE ENTITLED TO BENEFITS UNDER THE COLLECTIVE BARGAINING AGREEMENT IN SPITE OF THE FACT THAT
THEY WERE NOT EMPLOYED BY THE PETITIONER MUCH LESS WERE THEY MEMBERS OF THE BARGAINING UNIT DURING THE TERM
OF THE CBA.

III

PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING FACTUAL FINDINGS WITHOUT BASIS.

IV

THE DISPOSITIVE PORTIONS OF THE ASSAILED RESOLUTIONS ARE DEFECTIVE AND/OR REVEAL THE GRAVE ABUSE OF DISCRETION
COMMITTED BY PUBLIC RESPONDENT. 11

Petitioner Company contends that a "Petition for Relief" is not the proper mode of seeking a review of a decision rendered by the
arbitration branch of the NLRC. 12 According to the petitioner, nowhere in the Labor Code or in the NLRC Rules of Procedure is there
such a pleading. Rather, the remedy of a party aggrieved by an unfavorable ruling of the labor arbiter is to appeal said judgment to
the NLRC. 13

Petitioner asseverates that even assuming that the NLRC correctly treated the petition for relief as an appeal, still, it should not have
allowed the same to prosper, because the petition was filed several months after the ten-day reglementary period for filing an
appeal had expired; and, therefore, it failed to comply with the requirements of an appeal under the Labor Code and the NLRC Rules
of Procedure.

Petitioner Company further contends that in filing separate complaints and/or money claims at the arbitration level in spite of their
pending petition for relief and in spite of the final order, dated October 18, 1993, in NLRC Case No. RAB-IX-0334-82, the private
respondents were in fact forum-shopping, an act which is proscribed as trifling with the courts and abusing their practices.

Anent the second issue, petitioner argues that the private respondents are not entitled to the benefits under the CBA because
employees hired after the term of a CBA are not parties to the agreement, and therefore, may not claim benefits thereunder, even if
they subsequently become members of the bargaining unit.

As for the term of the CBA, petitioner maintains that Article 253 of the Labor Code refers to the continuation in full force and effect
of the previous CBA's terms and conditions. By necessity, it could not possibly refer to terms and conditions which, as expressly
stipulated, ceased to have force and effect. 14
According to petitioner, the provision on wage increase in the 1981 to 1984 CBA between petitioner Company and NFL provided for
yearly wage increases. Logically, these provisions ended in the year 1984 — the last year that the economic provisions of the CBA
were, pursuant to contract and law, effective. Petitioner claims that there is no contractual basis for the grant of CBA benefits such
as wage increases in 1985 and subsequent years, since the CBA stipulates only the increases for the years 1981 to 1984.

Moreover, petitioner alleges that it was through no fault of theirs that no new CBA was entered pending appeal of the decision in
NLRC Case No. RAB-IX-0334-82.

Finally, petitioner Company claims that it was never given the opportunity to submit a counter-computation of the benefits
supposedly due the private respondents. Instead, the NLRC allegedly relied on the self-serving computations of private respondents.

Petitioner's contentions are untenable.

We find no grave abuse of discretion on the part of the NLRC, when it entertained the petition for relief filed by the private
respondents and treated it as an appeal, even if it was filed beyond the reglementary period for filing an appeal. Ordinarily, once a
judgment has become final and executory, it can no longer be disturbed, altered or modified. However, a careful scrutiny of the facts
and circumstances of the instant case warrants liberality in the application of technical rules and procedure. It would be a greater
injustice to deprive the concerned employees of the monetary benefits rightly due them because of a circumstance over which they
had no control. As stated above, private respondents, in their petition for relief, claimed that they were wrongfully excluded from
the list of those entitled to the CBA benefits by their union, NFL, without their knowledge; and, because they were under the
impression that they were ably represented, they were not able to appeal their case on time. cdtai

The Supreme Court has allowed appeals from decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary
period, in the interest of justice. 15 Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the exercise of its appellate
powers, "correct, amend or waive any error, defect or irregularity whether in substance or in form." Further, Article 221 of the same
provides that: "In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of
law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without
regard to technicalities of law or procedure, all in the interest of due process. . . ." 16

Anent the issue of whether or not the term of an existing CBA, particularly as to its economic provisions, can be extended beyond
the period stipulated therein, and even beyond the three-year period prescribed by law, in the absence of a new agreement, Article
253 of the Labor Code explicitly provides:

ARTICLE 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 and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.
(Italics supplied.)

It is clear from the above provision of law that until a new Collective Bargaining Agreement has been executed by and between the
parties, they are duty-bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing
agreement. The law does not provide for any exception nor qualification as to which of the economic provisions of the existing
agreement are to retain force and effect; therefore, it must be understood as encompassing all the terms and conditions in the said
agreement.

In the case at bar, no new agreement was entered into by and between petitioner Company and NFL pending appeal of the decision
in NLRC Case No. RAB-IX-0334-82; nor were any of the economic provisions and/or terms and conditions pertaining to monetary
benefits in the existing agreement modified or altered. Therefore, the existing CBA in its entirety, continues to have legal effect.

In a recent case, the Court had occasion to rule that Articles 253 and 253-A 17 mandate the parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the expiration
of the old CBA and/or until a new agreement is reached by the parties. Consequently, the automatic renewal clause provided for by
the law, which is deemed incorporated in all CBA's, provides the reason why the new CBA can only be given a prospective effect. 18

In the case of Lopez Sugar Corporation vs. Federation of Free Workers, et al., 19 this Court reiterated the rule that although a CBA
has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. It is the duty of both
parties to the CBA to keep the status quo, and to continue in full force and effect the terms and conditions of the existing agreement
during the 60-day period and/or until a new agreement is reached by the parties. 20

To rule otherwise, i.e., that the economic provisions of the existing CBA in the instant case ceased to have force and effect in the
year 1984, would be to create a gap during which no agreement would govern, from the time the old contract expired to the time a
new agreement shall have been entered into. For if, as contended by the petitioner, the economic provisions of the existing CBA
were to have no legal effect, what agreement as to wage increases and other monetary benefits would govern at all? None, it would
seem, if we are to follow the logic of petitioner Company. Consequently, the employees from the year 1985 onwards would be
deprived of a substantial amount of monetary benefits which they could have enjoyed had the terms and conditions of the CBA
remained in force and effect. Such a situation runs contrary to the very intent and purpose of Articles 253 and 253-A of the Labor
Code which is to curb labor unrest and to promote industrial peace, as can be gleaned from the discussions of the legislators leading
to the passage of said laws, thus:

HON. CHAIRMAN HERRERA:

Pag nag-survey tayo sa mga unyon, ganoon ang mangyayari. And I think our responsibility here is to create a legal framework to
promote industrial peace and to develop responsible and fair labor movement.

HON. CHAIRMAN VELOSO:

In other words, the longer the period of the effectivity. . . .

xxx xxx xxx

HON. CHAIRMAN VELOSO:

(continuing). . . . in other words, the longer the period of effectivity of the CBA, the better for industrial peace. cdtai

xxx xxx xxx. 21

Having established that the CBA between petitioner Company and NFL remained in full force and effect even beyond the stipulated
term, in the absence of a new agreement; and, therefore, that the economic provisions such as wage increases continued to have
legal effect, we are now faced with the question of who are entitled to the benefits provided thereunder.

Petitioner Company insists that the rank-and-file employees hired after the term of the CBA in spite of their subsequent membership
in the bargaining unit, are not parties to the agreement, and certainly may not claim the benefits thereunder.

We do not agree. In a long line of cases, this Court has held that when a collective bargaining contract is entered into by the union
representing the employees and the employer, even the non-member employees are entitled to the benefits of the contract. To
accord its benefits only to members of the union without any valid reason would constitute undue discrimination against
nonmembers. 22 It is even conceded, that a laborer can claim benefits from a CBA entered into between the company and the union
of which he is a member at the time of the conclusion of the agreement, after he has resigned from said union. 23

In the same vein, the benefits under the CBA in the instant case should be extended to those employees who only became such after
the year 1984. To exclude them would constitute undue discrimination and deprive them of monetary benefits they would
otherwise be entitled to under a new collective bargaining contract to which they would have been parties. Since in this particular
case, no new agreement had been entered into after the CBA's stipulated term, it is only fair and just that the employees hired
thereafter be included in the existing CBA. This is in consonance with our ruling that the terms and conditions of a collective
bargaining agreement continue to have force and effect even beyond the stipulated term when no new agreement is executed by
and between the parties to avoid or prevent the situation where no collective bargaining agreement at all would govern between
the employer company and its employees.

Anent the other issues raised by petitioner Company, the Court finds that these pertain to questions of fact that have already been
passed upon by the NLRC. It is axiomatic that, the factual findings of the National Labor Relations Commission, which have acquired
expertise because its jurisdiction is confined to specific matters, are accorded respect and finality by the Supreme Court, when these
are supported by substantial evidence. A perusal of the assailed resolution reveals that the same was reached on the basis of the
required quantum of evidence. LLphil

WHEREFORE, in view of the foregoing, the instant petition for certiorari is hereby DISMISSED for lack of merit.
SO ORDERED.

6. Standard Chartered Bank Employees Union v. Confesor, G.R. No. 114974, June 16, 2004

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

DECISION

CALLEJO, SR., J p:

This is a petition for certiorari under Rule 65 of the Rules of Court filed by the Standard Chartered Bank Employees Union, seeking
the nullification of the October 29, 1993 Order 1 of then Secretary of Labor and Employment Nieves R. Confesor and her resolutions
dated December 16, 1993 and February 10, 1994.

The Antecedents

Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation doing business in the Philippines. The exclusive
bargaining agent of the rank and file employees of the Bank is the Standard Chartered Bank Employees Union (the Union, for
brevity).

In August of 1990, the Bank and the Union signed a five-year collective bargaining agreement (CBA) with a provision to renegotiate
the terms thereof on the third year. Prior to the expiration of the three-year period 2 but within the sixty-day freedom period, the
Union initiated the negotiations. On February 18, 1993, the Union, through its President, Eddie L. Divinagracia, sent a letter 3
containing its proposals 4 covering political provisions 5 and thirty-four (34) economic provisions. 6 Included therein was a list of the
names of the members of the Union’s negotiating panel. 7

In a Letter dated February 24, 1993, the Bank, through its Country Manager Peter H. Harris, took note of the Union’s proposals. The
Bank attached its counter-proposal to the non-economic provisions proposed by the Union. 8 The Bank posited that it would be in a
better position to present its counter-proposals on the economic items after the Union had presented its justifications for the
economic proposals. 9 The Bank, likewise, listed the members of its negotiating panel. 10 The parties agreed to set meetings to
settle their differences on the proposed CBA.

Before the commencement of the negotiation, the Union, through Divinagracia, suggested to the Bank’s Human Resource Manager
and head of the negotiating panel, Cielito Diokno, that the bank lawyers should be excluded from the negotiating team. The Bank
acceded. 11 Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the National Union of Bank
Employees (NUBE), the federation to which the Union was affiliated, be excluded from the Union’s negotiating panel. 12 However,
Umali was retained as a member thereof.

On March 12, 1993, the parties met and set the ground rules for the negotiation. Diokno suggested that the negotiation be kept a
“family affair.” The proposed non-economic provisions of the CBA were discussed first. 13 Even during the final reading of the non-
economic provisions on May 4, 1993, there were still provisions on which the Union and the Bank could not agree. Temporarily, the
notation “DEFERRED” was placed therein. Towards the end of the meeting, the Union manifested that the same should be changed
to “DEADLOCKED” to indicate that such items remained unresolved. Both parties agreed to place the notation
“DEFERRED/DEADLOCKED.” 14

On May 18, 1993, the negotiation for economic provisions commenced. A presentation of the basis of the Union’s economic
proposals was made. The next meeting, the Bank made a similar presentation. Towards the end of the Bank’s presentation, Umali
requested the Bank to validate the Union’s “guestimates,” especially the figures for the rank and file staff. 15 In the succeeding
meetings, Umali chided the Bank for the insufficiency of its counter-proposal on the provisions on salary increase, group
hospitalization, death assistance and dental benefits. He reminded the Bank, how the Union got what it wanted in 1987, and stated
that if need be, the Union would go through the same route to get what it wanted. 16

Upon the Bank’s insistence, the parties agreed to tackle the economic package item by item. Upon the Union’s suggestion, the Bank
indicated which provisions it would accept, reject, retain and agree to discuss. 17 The Bank suggested that the Union prioritize its
economic proposals, considering that many of such economic provisions remained unresolved. The Union, however, demanded that
the Bank make a revised itemized proposal.
In the succeeding meetings, the Union made the following proposals:

Wage Increase:
1st Year — Reduced from 45% to 40%
2nd Year — Retain at 20%
Total = 60%

Group Hospitalization Insurance:

Maximum disability benefit reduced from P75,000.00 to P60,000.00 per illness annually

Death Assistance:
For the employee — Reduced from P50,000.00 to P45,000.00
For Immediate Family Member — Reduced from P30,000.00 to P25,000.00

Dental and all others — No change from the original demand. 18

In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank would not make the necessary revisions on its
counter-proposal, it would be best to seek a third party assistance. 19 After the break, the Bank presented its revised counter-
proposal 20 as follows:

Wage Increase: 1st Year — from P1,000 to P1,050.00

2nd Year — P800.00–no change

Group Hospitalization Insurance

From: P35,000.00 per illness
To: P35,000.00 per illness per year

Death Assistance — For employee

From: P20,000.00
To: P25,000.00

Dental Retainer — Original offer remains the same 21

The Union, for its part, made the following counter-proposal:

Wage Increase: 1st Year — 40%

2nd Year — 19.5%
Group Hospitalization Insurance
From: P60,000.00 per year
To: P50,000.00 per year

Dental:
Temporary Filling/ — P150.00
Tooth Extraction
Permanent Filling — 200.00
Prophylaxis — 250.00
Root Canal — From P2,000 per tooth
To: 1,800.00 per tooth

Death Assistance:
For Employees: From P45,000.00 to P40,000.00
For Immediate Family Member: From P25,000.00 to P20,000.00. 22

The Union’s original proposals, aside from the above-quoted, remained the same.

Another set of counter-offer followed:

Management Union
Wage Increase
1st Year — P1,050.00 40%
2nd Year — 850.00 19.0% 23
Diokno stated that, in order for the Bank to make a better offer, the Union should clearly identify what it wanted to be included in
the total economic package. Umali replied that it was impossible to do so because the Bank’s counter-proposal was unacceptable.
He furthered asserted that it would have been easier to bargain if the atmosphere was the same as before, where both panels
trusted each other. Diokno requested the Union panel to refrain from involving personalities and to instead focus on the
negotiations. 24 He suggested that in order to break the impasse, the Union should prioritize the items it wanted to iron out.
Divinagracia stated that the Bank should make the first move and make a list of items it wanted to be included in the economic
package. Except for the provisions on signing bonus and uniforms, the Union and the Bank failed to agree on the remaining
economic provisions of the CBA. The Union declared a deadlock 25 and filed a Notice of Strike before the National Conciliation and
Mediation Board (NCMB) on June 21, 1993, docketed as NCMB-NCR-NS-06-380-93. 26

On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the Arbitration Branch of the
National Labor Relations Commission (NLRC) in Manila, docketed as NLRC Case No. 00-06-04191-93 against the Union on June 28,
1993. The Bank alleged that the Union violated its duty to bargain, as it did not bargain in good faith. It contended that the Union
demanded “sky high economic demands,” indicative of blue-sky bargaining. 27 Further, the Union violated its no strike- no lockout
clause by filing a notice of strike before the NCMB. Considering that the filing of notice of strike was an illegal act, the Union officers
should be dismissed. Finally, the Bank alleged that as a consequence of the illegal act, the Bank suffered nominal and actual damages
and was forced to litigate and hire the services of the lawyer. 28

On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R. Confesor, pursuant to Article 263(g) of the Labor
Code,issued an Order assuming jurisdiction over the labor dispute at the Bank. The complaint for ULP filed by the Bank before the
NLRC was consolidated with the complaint over which the SOLE assumed jurisdiction. After the parties submitted their respective
position papers, the SOLE issued an Order on October 29, 1993, the dispositive portion of which is herein quoted:

WHEREFORE, the Standard Chartered Bank and the Standard Chartered Bank Employees Union — NUBE are hereby ordered to
execute a collective bargaining agreement incorporating the dispositions contained herein. The CBA shall be retroactive to 01 April
1993 and shall remain effective for two years thereafter, or until such time as a new CBA has superseded it. All provisions in the
expired CBA not expressly modified or not passed upon herein are deemed retained while all new provisions which are being
demanded by either party are deemed denied, but without prejudice to such agreements as the parties may have arrived at in the
meantime.

The Bank’s charge for unfair labor practice which it originally filed with the NLRC as NLRC-NCR Case No. 00-06-04191-93 but which is
deemed consolidated herein, is dismissed for lack of merit. On the other hand, the Union’s charge for unfair labor practice is
similarly dismissed.

Let a copy of this order be furnished the Labor Arbiter in whose sala NLRC-NCR Case No. 00-06-04191-93 is pending for his guidance
and appropriate action. 29

The SOLE gave the following economic awards:

1. Wage Increase:
a) To be incorporated to present salary rates:
Fourth year : 7% of basic monthly salary
Fifth year : 5% of basic monthly salary based
on the 4th year adjusted salary
b) Additional fixed amount:
Fourth year : P600.00 per month
Fifth year : P400.00 per month

2. Group Insurance
a) Hospitalization : P45,000.00
b) Life : P130,000.00
c) Accident: P130,000.00
3. Medicine Allowance
Fourth year : P5,500.00
Fifth year : P6,000.00

4. Dental Benefits
Provision of dental retainer as proposed by the Bank, but
without diminishing existing benefits

5. Optical Allowance
Fourth year : P2,000.00
Fifth year : P2,500.00

6. Death Assistance
a) Employee : P30,000.00
b) Immediate : P5,000.00
Family
Member

7. Emergency Leave — Five (5) days for each contingency

8. Loans
a) Car Loan: P200,000.00
b) Housing Loan : It cannot be denied that the costs
attendant to having one’s own home
have tremendously gone up. The
need, therefore, to improve on this
benefit cannot be overemphasized.
Thus, the management is urged to
increase the existing and allowable
housing loan that the Bank extends
to its employees to an amount that
will give meaning and substance to
this CBA benefit. 30
The SOLE dismissed the charges of ULP of both the Union and the Bank, explaining that both parties failed to substantiate their
claims. Citing National Labor Union v. Insular-Yebana Tobacco Corporation, 31 the SOLE stated that ULP charges would prosper only
if shown to have directly prejudiced the public interest. SDAcaT

Dissatisfied, the Union filed a motion for reconsideration with clarification, while the Bank filed a motion for reconsideration. On
December 16, 1993, the SOLE issued a Resolution denying the motions. The Union filed a second motion for reconsideration, which
was, likewise, denied on February 10, 1994.

On March 22, 1994, the Bank and the Union signed the CBA. 32 Immediately thereafter, the wage increase was effected and the
signing bonuses based on the increased wage were distributed to the employees covered by the CBA.

The Present Petition

On April 28, 1994, the Union filed this petition for certiorari under Rule 65 of the Rules of Procedure alleging as follows:

A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
DISMISSING THE UNION’S CHARGE OF UNFAIR LABOR PRACTICE IN VIEW OF THE CLEAR EVIDENCE OF RECORD AND ADMISSIONS
PROVING THE UNFAIR LABOR PRACTICES CHARGED. 33

B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO RULE ON OTHER UNFAIR LABOR PRACTICES CHARGED. 34

C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
DISMISSING THE CHARGES OF UNFAIR LABOR PRACTICES ON THE GROUND THAT NO PROOF OF INJURY TO THE PUBLIC INTEREST
WAS PRESENTED. 35
The Union alleges that the SOLE acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it found that
the Bank did not commit unfair labor practice when it interfered with the Union’s choice of negotiator. It argued that, Diokno’s
suggestion that the negotiation be limited as a “family affair” was tantamount to suggesting that Federation President Jose Umali, Jr.
be excluded from the Union’s negotiating panel. It further argued that contrary to the ruling of the public respondent, damage or
injury to the public interest need not be present in order for unfair labor practice to prosper.

The Union, likewise, pointed out that the public respondent failed to rule on the ULP charges arising from the Bank’s surface
bargaining. The Union contended that the Bank merely went through the motions of collective bargaining without the intent to
reach an agreement, and made bad faith proposals when it announced that the parties should begin from a clean slate. It argued
that the Bank opened the political provisions “up for grabs,” which had the effect of diminishing or obliterating the gains that the
Union had made.

The Union also accused the Bank of refusing to disclose material and necessary data, even after a request was made by the Union to
validate its “guestimates.”

In its Comment, the Bank prayed that the petition be dismissed as the Union was estopped, considering that it signed the Collective
Bargaining Agreement (CBA) on April 22, 1994. It asserted that contrary to the Union’s allegations, it was the Union that committed
ULP when negotiator Jose Umali, Jr. hurled invectives at the Bank’s head negotiator, Cielito Diokno, and demanded that she be
excluded from the Bank’s negotiating team. Moreover, the Union engaged in blue-sky bargaining and isolated the no strike-no
lockout clause of the existing CBA.

The Office of the Solicitor General, in representation of the public respondent, prayed that the petition be dismissed. It asserted that
the Union failed to prove its ULP charges and that the public respondent did not commit any grave abuse of discretion in issuing the
assailed order and resolutions.

The Issues

The issues presented for resolution are the following: (a) whether or not the Union was able to substantiate its claim of unfair labor
practice against the Bank arising from the latter’s alleged “interference” with its choice of negotiator; surface bargaining; making bad
faith non-economic proposals; and refusal to furnish the Union with copies of the relevant data; (b) whether or not the public
respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction when she issued the assailed order and
resolutions; and, (c) whether or not the petitioner is estopped from filing the instant action.

The Court’s Ruling

The petition is bereft of merit.

“Interference” under Article

248 (a) of the Labor Code

The petitioner asserts that the private respondent committed ULP, i.e., interference in the selection of the Union’s negotiating panel,
when Cielito Diokno, the Bank’s Human Resource Manager, suggested to the Union’s President Eddie L. Divinagracia that Jose P.
Umali, Jr., President of the NUBE, be excluded from the Union’s negotiating panel. In support of its claim, Divinagracia executed an
affidavit, stating that prior to the commencement of the negotiation, Diokno approached him and suggested the exclusion of Umali
from the Union’s negotiating panel, and that during the first meeting, Diokno stated that the negotiation be kept a “family affair.”

Citing the cases of U.S. Postal Service 36 and Harley Davidson Motor Co., Inc., AMF, 37 the Union claims that interference in the
choice of the Union’s bargaining panel is tantamount to ULP.

In the aforecited cases, the alleged ULP was based on the employer’s violation of Section 8(a)(1) and (5) of the National Labor
Relations Act (NLRA), 38 which pertain to the interference, restraint or coercion of the employer in the employees’ exercise of their
rights to self-organization and to bargain collectively through representatives of their own choosing; and the refusal of the employer
to bargain collectively with the employees’ representatives. In both cases, the National Labor Relations Board held that upon the
employer’s refusal to engage in negotiations with the Union for collective-bargaining contract when the Union includes a person
who is not an employee, or one who is a member or an official of other labor organizations, such employer is engaged in unfair labor
practice under Section 8(a)(1) and (5) of the NLRA.
The Union further cited the case of Insular Life Assurance Co., Ltd. Employees Association — NATU vs. Insular Life Assurance Co. Ltd.,
39 wherein this Court said that the test of whether an employer has interfered with and coerced employees in the exercise of their
right to self-organization within the meaning of subsection (a)(1) is whether the employer has engaged in conduct which it may
reasonably be said, tends to interfere with the free exercise of employees’ rights under Section 3 of the Act. 40 Further, it is not
necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the
employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization
and collective bargaining. 41

Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF ASSOCIATION AND PROTECTION OF THE RIGHT TO
ORGANIZE to which the Philippines is a signatory, “workers and employers, without distinction whatsoever, shall have the right to
establish and, subject only to the rules of the organization concerned, to job organizations of their own choosing without previous
authorization.” 42 Workers’ and employers’ organizations shall have the right to draw up their constitutions and rules, to elect their
representatives in full freedom to organize their administration and activities and to formulate their programs. 43 Article 2 of ILO
Convention No. 98 pertaining to the Right to Organize and Collective Bargaining, provides:

Article 2

1. Workers’ and employers’ organizations shall enjoy adequate protection against any acts or interference by each other or each
other’s agents or members in their establishment, functioning or administration.

2. In particular, acts which are designed to promote the establishment of workers’ organizations under the domination of employers
or employers’ organizations or to support workers’ organizations by financial or other means, with the object of placing such
organizations under the control of employers or employers’ organizations within the meaning of this Article.

The aforecited ILO Conventions are incorporated in our Labor Code, particularly in Article 243 thereof, which provides:

ART. 243. COVERAGE AND EMPLOYEES’ RIGHT TO SELF-ORGANIZATION. — All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical or educational institutions whether operating for profit or not, shall have
the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective
bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection.

and Articles 248 and 249 respecting ULP of employers and labor organizations.

The said ILO Conventions were ratified on December 29, 1953. However, even as early as the 1935 Constitution, 44 the State had
already expressly bestowed protection to labor as part of the general provisions. The 1973 Constitution, 45 on the other hand,
declared it as a policy of the state to afford protection to labor, specifying that the workers’ rights to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work would be assured. For its part, the 1987 Constitution, aside
from making it a policy to “protect the rights of workers and promote their welfare,” 46 devotes an entire section, emphasizing its
mandate to afford protection to labor, and highlights “the principle of shared responsibility” between workers and employers to
promote industrial peace. 47

Article 248(a) of the Labor Code,considers it an unfair labor practice when an employer interferes, restrains or coerces employees in
the exercise of their right to self-organization or the right to form association. The right to self-organization necessarily includes the
right to collective bargaining.

Parenthetically, if an employer interferes in the selection of its negotiators or coerces the Union to exclude from its panel of
negotiators a representative of the Union, and if it can be inferred that the employer adopted the said act to yield adverse effects on
the free exercise to right to self-organization or on the right to collective bargaining of the employees, ULP under Article 248(a) in
connection with Article 243 of the Labor Code is committed.

In order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the claim.
Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion. 48 In the case at bar, the Union bases its claim of interference on the alleged suggestions of Diokno to exclude Umali
from the Union’s negotiating panel.
The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno to Divinagracia is an anti-
union conduct from which it can be inferred that the Bank consciously adopted such act to yield adverse effects on the free exercise
of the right to self-organization and collective bargaining of the employees, especially considering that such was undertaken
previous to the commencement of the negotiation and simultaneously with Divinagracia’s suggestion that the bank lawyers be
excluded from its negotiating panel.

The records show that after the initiation of the collective bargaining process, with the inclusion of Umali in the Union’s negotiating
panel, the negotiations pushed through. The complaint was made only on August 16, 1993 after a deadlock was declared by the
Union on June 15, 1993.

It is clear that such ULP charge was merely an afterthought. The accusation occurred after the arguments and differences over the
economic provisions became heated and the parties had become frustrated. It happened after the parties started to involve
personalities. As the public respondent noted, passions may rise, and as a result, suggestions given under less adversarial situations
may be colored with unintended meanings. 49 Such is what appears to have happened in this case.

The Duty to Bargain

Collectively

If at all, the suggestion made by Diokno to Divinagracia should be construed as part of the normal relations and innocent
communications, which are all part of the friendly relations between the Union and Bank.

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

Surface bargaining is defined as “going through the motions of negotiating” without any legal intent to reach an agreement. 50 The
resolution of surface bargaining allegations never presents an easy issue. The determination of whether a party has engaged in
unlawful surface bargaining is usually a difficult one because it involves, at bottom, a question of the intent of the party in question,
and usually such intent can only be inferred from the totality of the challenged party’s conduct both at and away from the
bargaining table. 51 It involves the question of whether an employer’s conduct demonstrates an unwillingness to bargain in good
faith or is merely hard bargaining. 52

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

The Union has not been able to show that the Bank had done acts, both at and away from the bargaining table, which tend to show
that it did not want to reach an agreement with the Union or to settle the differences between it and the Union. Admittedly, the
parties were not able to agree and reached a deadlock. However, it is herein emphasized that the duty to bargain “does not compel
either party to agree to a proposal or require the making of a concession.” 53 Hence, the parties’ failure to agree did not amount to
ULP under Article 248(g) for violation of the duty to bargain.

We can hardly dispute this finding, for it finds support in the evidence. The inference that respondents did not refuse to bargain
collectively with the complaining union because they accepted some of the demands while they refused the others even leaving
open other demands for future discussion is correct, especially so when those demands were discussed at a meeting called by
respondents themselves precisely in view of the letter sent by the union on April 29, 1960 . . . 54

In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank made bad-faith provisions has no leg to
stand on. The records show that the Bank’s counterproposals on the non-economic provisions or political provisions did not put “up
for grabs” the entire work of the Union and its predecessors. As can be gleaned from the Bank’s counterproposal, there were many
provisions which it proposed to be retained. The revisions on the other provisions were made after the parties had come to an
agreement. Far from buttressing the Union’s claim that the Bank made bad-faith proposals on the non-economic provisions, all
these, on the contrary, disprove such allegations.
We, likewise, find that the Union failed to substantiate its claim that the Bank refused to furnish the information it needed.

While the refusal to furnish requested information is in itself an unfair labor practice, and also supports the inference of surface
bargaining, 55 in the case at bar, Umali, in a meeting dated May 18, 1993, requested the Bank to validate its guestimates on the data
of the rank and file. However, Umali failed to put his request in writing as provided for in Article 242(c) of the Labor Code:

Article 242. Rights of Legitimate Labor Organization . . .

(c) To be furnished by the employer, upon written request, with the annual audited financial statements, including the balance sheet
and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been
duly recognized by the employer or certified as the sole and exclusive bargaining representatives of the employees in the bargaining
unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective
negotiation;

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

No Grave Abuse of Discretion

On the Part of the Public Respondent

The special civil action for certiorari may be availed of when the tribunal, board, or officer exercising judicial or quasi-judicial
functions has acted without or in excess of jurisdiction and there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law for the purpose of annulling the proceeding. 56 Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility which must be so patent and gross as to amount to an invasion of positive duty or
to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Mere abuse of discretion is not enough. 57

While it is true that a showing of prejudice to public interest is not a requisite for ULP charges to prosper, it cannot be said that the
public respondent acted in capricious and whimsical exercise of judgment, equivalent to lack of jurisdiction or excess thereof.
Neither was it shown that the public respondent exercised its power in an arbitrary and despotic manner by reason of passion or
personal hostility.

Estoppel not Applicable

In the Case at Bar

The respondent Bank argues that the petitioner is estopped from raising the issue of ULP when it signed the new CBA.

Article 1431 of the Civil Code provides:

Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or
disproved as against the person relying thereon.

A person, who by his deed or conduct has induced another to act in a particular manner, is barred from adopting an inconsistent
position, attitude or course of conduct that thereby causes loss or injury to another. 58

In the case, however, the approval of the CBA and the release of signing bonus do not necessarily mean that the Union waived its
ULP claim against the Bank during the past negotiations. After all, the conclusion of the CBA was included in the order of the SOLE,
while the signing bonus was included in the CBA itself. Moreover, the Union twice filed a motion for reconsideration respecting its
ULP charges against the Bank before the SOLE.

The Union Did Not Engage

In Blue-Sky Bargaining

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or unreasonable
proposals. 59 The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. The
minutes of the meeting show that the Union based its economic proposals on data of rank and file employees and the prevailing
economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the
Bank in the Asian region.

In sum, we find that the public respondent did not act with grave abuse of discretion amounting to lack or excess of jurisdiction
when it issued the questioned order and resolutions. While the approval of the CBA and the release of the signing bonus did not
estop the Union from pursuing its claims of ULP against the Bank, we find the latter did not engage in ULP. We, likewise, hold that
the Union is not guilty of ULP.

IN LIGHT OF THE FOREGOING, the October 29, 1993 Order and December 16, 1993 and February 10, 1994 Resolutions of then
Secretary of Labor Nieves R. Confesor are AFFIRMED. The Petition is hereby DISMISSED.

SO ORDERED.

7. Union of Filipro Employees v. NLRC, et. al. Dec. 19, 1990

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

DECISION

CALLEJO, SR., J p:

This is a petition for certiorari under Rule 65 of the Rules of Court filed by the Standard Chartered Bank Employees Union, seeking
the nullification of the October 29, 1993 Order 1 of then Secretary of Labor and Employment Nieves R. Confesor and her resolutions
dated December 16, 1993 and February 10, 1994.

The Antecedents

Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation doing business in the Philippines. The exclusive
bargaining agent of the rank and file employees of the Bank is the Standard Chartered Bank Employees Union (the Union, for
brevity).

In August of 1990, the Bank and the Union signed a five-year collective bargaining agreement (CBA) with a provision to renegotiate
the terms thereof on the third year. Prior to the expiration of the three-year period 2 but within the sixty-day freedom period, the
Union initiated the negotiations. On February 18, 1993, the Union, through its President, Eddie L. Divinagracia, sent a letter 3
containing its proposals 4 covering political provisions 5 and thirty-four (34) economic provisions. 6 Included therein was a list of the
names of the members of the Union’s negotiating panel. 7

In a Letter dated February 24, 1993, the Bank, through its Country Manager Peter H. Harris, took note of the Union’s proposals. The
Bank attached its counter-proposal to the non-economic provisions proposed by the Union. 8 The Bank posited that it would be in a
better position to present its counter-proposals on the economic items after the Union had presented its justifications for the
economic proposals. 9 The Bank, likewise, listed the members of its negotiating panel. 10 The parties agreed to set meetings to
settle their differences on the proposed CBA.

Before the commencement of the negotiation, the Union, through Divinagracia, suggested to the Bank’s Human Resource Manager
and head of the negotiating panel, Cielito Diokno, that the bank lawyers should be excluded from the negotiating team. The Bank
acceded. 11 Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the National Union of Bank
Employees (NUBE), the federation to which the Union was affiliated, be excluded from the Union’s negotiating panel. 12 However,
Umali was retained as a member thereof.

On March 12, 1993, the parties met and set the ground rules for the negotiation. Diokno suggested that the negotiation be kept a
“family affair.” The proposed non-economic provisions of the CBA were discussed first. 13 Even during the final reading of the non-
economic provisions on May 4, 1993, there were still provisions on which the Union and the Bank could not agree. Temporarily, the
notation “DEFERRED” was placed therein. Towards the end of the meeting, the Union manifested that the same should be changed
to “DEADLOCKED” to indicate that such items remained unresolved. Both parties agreed to place the notation
“DEFERRED/DEADLOCKED.” 14
On May 18, 1993, the negotiation for economic provisions commenced. A presentation of the basis of the Union’s economic
proposals was made. The next meeting, the Bank made a similar presentation. Towards the end of the Bank’s presentation, Umali
requested the Bank to validate the Union’s “guestimates,” especially the figures for the rank and file staff. 15 In the succeeding
meetings, Umali chided the Bank for the insufficiency of its counter-proposal on the provisions on salary increase, group
hospitalization, death assistance and dental benefits. He reminded the Bank, how the Union got what it wanted in 1987, and stated
that if need be, the Union would go through the same route to get what it wanted. 16

Upon the Bank’s insistence, the parties agreed to tackle the economic package item by item. Upon the Union’s suggestion, the Bank
indicated which provisions it would accept, reject, retain and agree to discuss. 17 The Bank suggested that the Union prioritize its
economic proposals, considering that many of such economic provisions remained unresolved. The Union, however, demanded that
the Bank make a revised itemized proposal.

In the succeeding meetings, the Union made the following proposals:

Wage Increase:
1st Year — Reduced from 45% to 40%
2nd Year — Retain at 20%
Total = 60%

Group Hospitalization Insurance:

Maximum disability benefit reduced from P75,000.00 to P60,000.00 per illness annually

Death Assistance:
For the employee — Reduced from P50,000.00 to P45,000.00
For Immediate Family Member — Reduced from P30,000.00 to P25,000.00

Dental and all others — No change from the original demand. 18

In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank would not make the necessary revisions on its
counter-proposal, it would be best to seek a third party assistance. 19 After the break, the Bank presented its revised counter-
proposal 20 as follows:

Wage Increase: 1st Year — from P1,000 to P1,050.00

2nd Year — P800.00–no change

Group Hospitalization Insurance

From: P35,000.00 per illness
To: P35,000.00 per illness per year

Death Assistance — For employee

From: P20,000.00
To: P25,000.00

Dental Retainer — Original offer remains the same 21

The Union, for its part, made the following counter-proposal:

Wage Increase: 1st Year — 40%

2nd Year — 19.5%
Group Hospitalization Insurance
From: P60,000.00 per year
To: P50,000.00 per year

Dental:
Temporary Filling/ — P150.00
Tooth Extraction
Permanent Filling — 200.00
Prophylaxis — 250.00
Root Canal — From P2,000 per tooth
 To: 1,800.00 per tooth

Death Assistance:
For Employees: From P45,000.00 to P40,000.00
For Immediate Family Member: From P25,000.00 to P20,000.00. 22

The Union’s original proposals, aside from the above-quoted, remained the same.

Another set of counter-offer followed:

Management Union

Wage Increase
1st Year — P1,050.00 40%
2nd Year — 850.00 19.0% 23
Diokno stated that, in order for the Bank to make a better offer, the Union should clearly identify what it wanted to be included in
the total economic package. Umali replied that it was impossible to do so because the Bank’s counter-proposal was unacceptable.
He furthered asserted that it would have been easier to bargain if the atmosphere was the same as before, where both panels
trusted each other. Diokno requested the Union panel to refrain from involving personalities and to instead focus on the
negotiations. 24 He suggested that in order to break the impasse, the Union should prioritize the items it wanted to iron out.
Divinagracia stated that the Bank should make the first move and make a list of items it wanted to be included in the economic
package. Except for the provisions on signing bonus and uniforms, the Union and the Bank failed to agree on the remaining
economic provisions of the CBA. The Union declared a deadlock 25 and filed a Notice of Strike before the National Conciliation and
Mediation Board (NCMB) on June 21, 1993, docketed as NCMB-NCR-NS-06-380-93. 26

On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the Arbitration Branch of the
National Labor Relations Commission (NLRC) in Manila, docketed as NLRC Case No. 00-06-04191-93 against the Union on June 28,
1993. The Bank alleged that the Union violated its duty to bargain, as it did not bargain in good faith. It contended that the Union
demanded “sky high economic demands,” indicative of blue-sky bargaining. 27 Further, the Union violated its no strike- no lockout
clause by filing a notice of strike before the NCMB. Considering that the filing of notice of strike was an illegal act, the Union officers
should be dismissed. Finally, the Bank alleged that as a consequence of the illegal act, the Bank suffered nominal and actual damages
and was forced to litigate and hire the services of the lawyer. 28

On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R. Confesor, pursuant to Article 263(g) of the Labor
Code,issued an Order assuming jurisdiction over the labor dispute at the Bank. The complaint for ULP filed by the Bank before the
NLRC was consolidated with the complaint over which the SOLE assumed jurisdiction. After the parties submitted their respective
position papers, the SOLE issued an Order on October 29, 1993, the dispositive portion of which is herein quoted:

WHEREFORE, the Standard Chartered Bank and the Standard Chartered Bank Employees Union — NUBE are hereby ordered to
execute a collective bargaining agreement incorporating the dispositions contained herein. The CBA shall be retroactive to 01 April
1993 and shall remain effective for two years thereafter, or until such time as a new CBA has superseded it. All provisions in the
expired CBA not expressly modified or not passed upon herein are deemed retained while all new provisions which are being
demanded by either party are deemed denied, but without prejudice to such agreements as the parties may have arrived at in the
meantime.

The Bank’s charge for unfair labor practice which it originally filed with the NLRC as NLRC-NCR Case No. 00-06-04191-93 but which is
deemed consolidated herein, is dismissed for lack of merit. On the other hand, the Union’s charge for unfair labor practice is
similarly dismissed.

Let a copy of this order be furnished the Labor Arbiter in whose sala NLRC-NCR Case No. 00-06-04191-93 is pending for his guidance
and appropriate action. 29

The SOLE gave the following economic awards:

1. Wage Increase:
a) To be incorporated to present salary rates:
Fourth year : 7% of basic monthly salary
 Fifth year : 5% of basic monthly salary based
on the 4th year adjusted salary
b) Additional fixed amount:
Fourth year : P600.00 per month
Fifth year : P400.00 per month

2. Group Insurance
a) Hospitalization : P45,000.00
b) Life : P130,000.00
c) Accident: P130,000.00

3. Medicine Allowance
Fourth year : P5,500.00
Fifth year : P6,000.00

4. Dental Benefits
Provision of dental retainer as proposed by the Bank, but
without diminishing existing benefits

5. Optical Allowance
Fourth year : P2,000.00
Fifth year : P2,500.00

6. Death Assistance
a) Employee : P30,000.00
b) Immediate : P5,000.00
Family
Member

7. Emergency Leave — Five (5) days for each contingency

8. Loans
a) Car Loan: P200,000.00
b) Housing Loan : It cannot be denied that the costs
attendant to having one’s own home
have tremendously gone up. The
need, therefore, to improve on this
benefit cannot be overemphasized.
Thus, the management is urged to
increase the existing and allowable
housing loan that the Bank extends
to its employees to an amount that
will give meaning and substance to
this CBA benefit. 30
The SOLE dismissed the charges of ULP of both the Union and the Bank, explaining that both parties failed to substantiate their
claims. Citing National Labor Union v. Insular-Yebana Tobacco Corporation, 31 the SOLE stated that ULP charges would prosper only
if shown to have directly prejudiced the public interest. SDAcaT

Dissatisfied, the Union filed a motion for reconsideration with clarification, while the Bank filed a motion for reconsideration. On
December 16, 1993, the SOLE issued a Resolution denying the motions. The Union filed a second motion for reconsideration, which
was, likewise, denied on February 10, 1994.

On March 22, 1994, the Bank and the Union signed the CBA. 32 Immediately thereafter, the wage increase was effected and the
signing bonuses based on the increased wage were distributed to the employees covered by the CBA.

The Present Petition

On April 28, 1994, the Union filed this petition for certiorari under Rule 65 of the Rules of Procedure alleging as follows:
A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
DISMISSING THE UNION’S CHARGE OF UNFAIR LABOR PRACTICE IN VIEW OF THE CLEAR EVIDENCE OF RECORD AND ADMISSIONS
PROVING THE UNFAIR LABOR PRACTICES CHARGED. 33

B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO RULE ON OTHER UNFAIR LABOR PRACTICES CHARGED. 34

C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
DISMISSING THE CHARGES OF UNFAIR LABOR PRACTICES ON THE GROUND THAT NO PROOF OF INJURY TO THE PUBLIC INTEREST
WAS PRESENTED. 35

The Union alleges that the SOLE acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it found that
the Bank did not commit unfair labor practice when it interfered with the Union’s choice of negotiator. It argued that, Diokno’s
suggestion that the negotiation be limited as a “family affair” was tantamount to suggesting that Federation President Jose Umali, Jr.
be excluded from the Union’s negotiating panel. It further argued that contrary to the ruling of the public respondent, damage or
injury to the public interest need not be present in order for unfair labor practice to prosper.

The Union, likewise, pointed out that the public respondent failed to rule on the ULP charges arising from the Bank’s surface
bargaining. The Union contended that the Bank merely went through the motions of collective bargaining without the intent to
reach an agreement, and made bad faith proposals when it announced that the parties should begin from a clean slate. It argued
that the Bank opened the political provisions “up for grabs,” which had the effect of diminishing or obliterating the gains that the
Union had made.

The Union also accused the Bank of refusing to disclose material and necessary data, even after a request was made by the Union to
validate its “guestimates.”

In its Comment, the Bank prayed that the petition be dismissed as the Union was estopped, considering that it signed the Collective
Bargaining Agreement (CBA) on April 22, 1994. It asserted that contrary to the Union’s allegations, it was the Union that committed
ULP when negotiator Jose Umali, Jr. hurled invectives at the Bank’s head negotiator, Cielito Diokno, and demanded that she be
excluded from the Bank’s negotiating team. Moreover, the Union engaged in blue-sky bargaining and isolated the no strike-no
lockout clause of the existing CBA.

The Office of the Solicitor General, in representation of the public respondent, prayed that the petition be dismissed. It asserted that
the Union failed to prove its ULP charges and that the public respondent did not commit any grave abuse of discretion in issuing the
assailed order and resolutions.

The Issues

The issues presented for resolution are the following: (a) whether or not the Union was able to substantiate its claim of unfair labor
practice against the Bank arising from the latter’s alleged “interference” with its choice of negotiator; surface bargaining; making bad
faith non-economic proposals; and refusal to furnish the Union with copies of the relevant data; (b) whether or not the public
respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction when she issued the assailed order and
resolutions; and, (c) whether or not the petitioner is estopped from filing the instant action.

The Court’s Ruling

The petition is bereft of merit.

“Interference” under Article

248 (a) of the Labor Code

The petitioner asserts that the private respondent committed ULP, i.e., interference in the selection of the Union’s negotiating panel,
when Cielito Diokno, the Bank’s Human Resource Manager, suggested to the Union’s President Eddie L. Divinagracia that Jose P.
Umali, Jr., President of the NUBE, be excluded from the Union’s negotiating panel. In support of its claim, Divinagracia executed an
affidavit, stating that prior to the commencement of the negotiation, Diokno approached him and suggested the exclusion of Umali
from the Union’s negotiating panel, and that during the first meeting, Diokno stated that the negotiation be kept a “family affair.”
Citing the cases of U.S. Postal Service 36 and Harley Davidson Motor Co., Inc., AMF, 37 the Union claims that interference in the
choice of the Union’s bargaining panel is tantamount to ULP.

In the aforecited cases, the alleged ULP was based on the employer’s violation of Section 8(a)(1) and (5) of the National Labor
Relations Act (NLRA), 38 which pertain to the interference, restraint or coercion of the employer in the employees’ exercise of their
rights to self-organization and to bargain collectively through representatives of their own choosing; and the refusal of the employer
to bargain collectively with the employees’ representatives. In both cases, the National Labor Relations Board held that upon the
employer’s refusal to engage in negotiations with the Union for collective-bargaining contract when the Union includes a person
who is not an employee, or one who is a member or an official of other labor organizations, such employer is engaged in unfair labor
practice under Section 8(a)(1) and (5) of the NLRA.

The Union further cited the case of Insular Life Assurance Co., Ltd. Employees Association — NATU vs. Insular Life Assurance Co. Ltd.,
39 wherein this Court said that the test of whether an employer has interfered with and coerced employees in the exercise of their
right to self-organization within the meaning of subsection (a)(1) is whether the employer has engaged in conduct which it may
reasonably be said, tends to interfere with the free exercise of employees’ rights under Section 3 of the Act. 40 Further, it is not
necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the
employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization
and collective bargaining. 41

Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF ASSOCIATION AND PROTECTION OF THE RIGHT TO
ORGANIZE to which the Philippines is a signatory, “workers and employers, without distinction whatsoever, shall have the right to
establish and, subject only to the rules of the organization concerned, to job organizations of their own choosing without previous
authorization.” 42 Workers’ and employers’ organizations shall have the right to draw up their constitutions and rules, to elect their
representatives in full freedom to organize their administration and activities and to formulate their programs. 43 Article 2 of ILO
Convention No. 98 pertaining to the Right to Organize and Collective Bargaining, provides:

Article 2

1. Workers’ and employers’ organizations shall enjoy adequate protection against any acts or interference by each other or each
other’s agents or members in their establishment, functioning or administration.

2. In particular, acts which are designed to promote the establishment of workers’ organizations under the domination of employers
or employers’ organizations or to support workers’ organizations by financial or other means, with the object of placing such
organizations under the control of employers or employers’ organizations within the meaning of this Article.

The aforecited ILO Conventions are incorporated in our Labor Code, particularly in Article 243 thereof, which provides:

ART. 243. COVERAGE AND EMPLOYEES’ RIGHT TO SELF-ORGANIZATION. — All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical or educational institutions whether operating for profit or not, shall have
the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective
bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection.

and Articles 248 and 249 respecting ULP of employers and labor organizations.

The said ILO Conventions were ratified on December 29, 1953. However, even as early as the 1935 Constitution, 44 the State had
already expressly bestowed protection to labor as part of the general provisions. The 1973 Constitution, 45 on the other hand,
declared it as a policy of the state to afford protection to labor, specifying that the workers’ rights to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work would be assured. For its part, the 1987 Constitution, aside
from making it a policy to “protect the rights of workers and promote their welfare,” 46 devotes an entire section, emphasizing its
mandate to afford protection to labor, and highlights “the principle of shared responsibility” between workers and employers to
promote industrial peace. 47

Article 248(a) of the Labor Code,considers it an unfair labor practice when an employer interferes, restrains or coerces employees in
the exercise of their right to self-organization or the right to form association. The right to self-organization necessarily includes the
right to collective bargaining.

Parenthetically, if an employer interferes in the selection of its negotiators or coerces the Union to exclude from its panel of
negotiators a representative of the Union, and if it can be inferred that the employer adopted the said act to yield adverse effects on
the free exercise to right to self-organization or on the right to collective bargaining of the employees, ULP under Article 248(a) in
connection with Article 243 of the Labor Code is committed.

In order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the claim.
Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion. 48 In the case at bar, the Union bases its claim of interference on the alleged suggestions of Diokno to exclude Umali
from the Union’s negotiating panel.

The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno to Divinagracia is an anti-
union conduct from which it can be inferred that the Bank consciously adopted such act to yield adverse effects on the free exercise
of the right to self-organization and collective bargaining of the employees, especially considering that such was undertaken
previous to the commencement of the negotiation and simultaneously with Divinagracia’s suggestion that the bank lawyers be
excluded from its negotiating panel.

The records show that after the initiation of the collective bargaining process, with the inclusion of Umali in the Union’s negotiating
panel, the negotiations pushed through. The complaint was made only on August 16, 1993 after a deadlock was declared by the
Union on June 15, 1993.

It is clear that such ULP charge was merely an afterthought. The accusation occurred after the arguments and differences over the
economic provisions became heated and the parties had become frustrated. It happened after the parties started to involve
personalities. As the public respondent noted, passions may rise, and as a result, suggestions given under less adversarial situations
may be colored with unintended meanings. 49 Such is what appears to have happened in this case.

The Duty to Bargain

Collectively

If at all, the suggestion made by Diokno to Divinagracia should be construed as part of the normal relations and innocent
communications, which are all part of the friendly relations between the Union and Bank.

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

Surface bargaining is defined as “going through the motions of negotiating” without any legal intent to reach an agreement. 50 The
resolution of surface bargaining allegations never presents an easy issue. The determination of whether a party has engaged in
unlawful surface bargaining is usually a difficult one because it involves, at bottom, a question of the intent of the party in question,
and usually such intent can only be inferred from the totality of the challenged party’s conduct both at and away from the
bargaining table. 51 It involves the question of whether an employer’s conduct demonstrates an unwillingness to bargain in good
faith or is merely hard bargaining. 52

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

The Union has not been able to show that the Bank had done acts, both at and away from the bargaining table, which tend to show
that it did not want to reach an agreement with the Union or to settle the differences between it and the Union. Admittedly, the
parties were not able to agree and reached a deadlock. However, it is herein emphasized that the duty to bargain “does not compel
either party to agree to a proposal or require the making of a concession.” 53 Hence, the parties’ failure to agree did not amount to
ULP under Article 248(g) for violation of the duty to bargain.

We can hardly dispute this finding, for it finds support in the evidence. The inference that respondents did not refuse to bargain
collectively with the complaining union because they accepted some of the demands while they refused the others even leaving
open other demands for future discussion is correct, especially so when those demands were discussed at a meeting called by
respondents themselves precisely in view of the letter sent by the union on April 29, 1960 . . . 54
In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank made bad-faith provisions has no leg to
stand on. The records show that the Bank’s counterproposals on the non-economic provisions or political provisions did not put “up
for grabs” the entire work of the Union and its predecessors. As can be gleaned from the Bank’s counterproposal, there were many
provisions which it proposed to be retained. The revisions on the other provisions were made after the parties had come to an
agreement. Far from buttressing the Union’s claim that the Bank made bad-faith proposals on the non-economic provisions, all
these, on the contrary, disprove such allegations.

We, likewise, find that the Union failed to substantiate its claim that the Bank refused to furnish the information it needed.

While the refusal to furnish requested information is in itself an unfair labor practice, and also supports the inference of surface
bargaining, 55 in the case at bar, Umali, in a meeting dated May 18, 1993, requested the Bank to validate its guestimates on the data
of the rank and file. However, Umali failed to put his request in writing as provided for in Article 242(c) of the Labor Code:

Article 242. Rights of Legitimate Labor Organization . . .

(c) To be furnished by the employer, upon written request, with the annual audited financial statements, including the balance sheet
and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been
duly recognized by the employer or certified as the sole and exclusive bargaining representatives of the employees in the bargaining
unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective
negotiation;

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

No Grave Abuse of Discretion

On the Part of the Public Respondent

The special civil action for certiorari may be availed of when the tribunal, board, or officer exercising judicial or quasi-judicial
functions has acted without or in excess of jurisdiction and there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law for the purpose of annulling the proceeding. 56 Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility which must be so patent and gross as to amount to an invasion of positive duty or
to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Mere abuse of discretion is not enough. 57

While it is true that a showing of prejudice to public interest is not a requisite for ULP charges to prosper, it cannot be said that the
public respondent acted in capricious and whimsical exercise of judgment, equivalent to lack of jurisdiction or excess thereof.
Neither was it shown that the public respondent exercised its power in an arbitrary and despotic manner by reason of passion or
personal hostility.

Estoppel not Applicable

In the Case at Bar

The respondent Bank argues that the petitioner is estopped from raising the issue of ULP when it signed the new CBA.

Article 1431 of the Civil Code provides:

Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or
disproved as against the person relying thereon.

A person, who by his deed or conduct has induced another to act in a particular manner, is barred from adopting an inconsistent
position, attitude or course of conduct that thereby causes loss or injury to another. 58

In the case, however, the approval of the CBA and the release of signing bonus do not necessarily mean that the Union waived its
ULP claim against the Bank during the past negotiations. After all, the conclusion of the CBA was included in the order of the SOLE,
while the signing bonus was included in the CBA itself. Moreover, the Union twice filed a motion for reconsideration respecting its
ULP charges against the Bank before the SOLE.

The Union Did Not Engage

In Blue-Sky Bargaining

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or unreasonable
proposals. 59 The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. The
minutes of the meeting show that the Union based its economic proposals on data of rank and file employees and the prevailing
economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the
Bank in the Asian region.

In sum, we find that the public respondent did not act with grave abuse of discretion amounting to lack or excess of jurisdiction
when it issued the questioned order and resolutions. While the approval of the CBA and the release of the signing bonus did not
estop the Union from pursuing its claims of ULP against the Bank, we find the latter did not engage in ULP. We, likewise, hold that
the Union is not guilty of ULP.

IN LIGHT OF THE FOREGOING, the October 29, 1993 Order and December 16, 1993 and February 10, 1994 Resolutions of then
Secretary of Labor Nieves R. Confesor are AFFIRMED. The Petition is hereby DISMISSED.

SO ORDERED.

8. St. Luke Medical Center v. Torres, et. al. G.R. No. 99395, Jun. 29, 1993

ST. LUKE'S MEDICAL CENTER, INC., petitioner, vs. HON. RUBEN O. TORRES and ST. LUKE'S MEDICAL CENTER ASSOCIATION-ALLIANCE
OF FILIPINO WORKERS ("SLMCEA-AFW"), respondents.

Sofronio A. Ona for petitioner.

Edgar R. Martir for respondent union.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATIONS; LABOR DISPUTE; ASSAILED ORDER ISSUED BY PUBLIC RESPONDENT IS ACCORDED GREAT
RESPECT BY THIS COURT; DUE PROCESS REQUIREMENT WAS CLEARLY OBSERVED IN ITS ISSUANCE. — We rule that the Order,
particularly in its disposition on the economic issues, was not arbitrarily imposed by public respondent. A perusal of the Order shows
that public respondent took into consideration the parties' respective contentions, a clear indication that he was keenly aware of
their contrary positions. Both sides having been heard, they were allowed to present their respective evidence. The due process
requirement was thus clearly observed. Considering public respondent's expertise on the subject and his observance of the cardinal
principles of due process, the assailed Order deserves to be accorded great respect by this Court. Equally worth mentioning is the
fact that in resolving the economic issues, public respondent merely adopted in toto petitioner's proposals. Consequently, petitioner
cannot now claim that the awards are unreasonable and baseless. Neither can it deny having made such proposals, as it attempted
to do in its Motion for Reconsideration of the challenged Order before public respondent and which it continues to pursue in the
instant petition. It is too late in the day for such pretense, especially so because petitioner failed to controvert private respondent's
allegation contained in its Comment to the petition before the Labor Secretary that petitioner had offered as its last proposal said
salary and meal allowance increases. As correctly pointed out by public respondent, petitioner failed, when it had the chance, to
rebut the same in its Reply to said Comment, considering that the resolution of the labor dispute at that time was still pending. Any
objection on this point is thus deemed waived. We do not see merit in petitioner's theory that the awards were granted
prematurely. In its effort to persuade this Court along this point, petitioner denies having negotiated with private respondent
SLMCEA-AFW. Petitioner collectively refers to all the talks conducted with private respondent as mere informal negotiations due to
the representation issue involving AFW. Petitioner thus argues that in the absence of any formal negotiations, no collective
bargaining could have taken place. Public respondent, petitioner avers, should have required the parties instead to negotiate rather
than prematurely issuing his order.

2. ID.; LABOR UNION; A REGISTERED LOCAL UNION AFFILIATED WITH A NATIONAL UNION OR FEDERATION DOES NOT LOSE ITS
LEGAL PERSONALITY OR INDEPENDENCE. — A duly registered local union affiliated with a national union or federation does not lose
its legal personality or independence (Adamson and Adamson, Inc. vs. The Court of Industrial Relations and Adamson and Adamson
Supervising Union (FFW), 127 SCRA 268 [1984]). In Elisco-Elirol Labor Union (NAFLU) vs. Noriel (180 SCRA 681 [1977]), then Justice
Teehankee re-echoed the words of Justice Esguerra in Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. (66 SCRA 512
[1975], thus: (T)he locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power
between the employer and their employee-members in the economic struggle for the fruits of the joint productive effort of labor
and capital; and the association of the locals into the national union (as PAFLU) was in furtherance of the same end. These
associations are consensual entities capable of entering into such legal relations with their members. The essential purpose was the
affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of
the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common
interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the
affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence. Appending "AFW" to the
local union's name does not mean that the federation absorbed the latter. No such merger can be construed. Rather, what is
conveyed is the idea of affiliation, with the local union and the larger national federation retaining their separate personalities.

3. ID.; RETROACTIVITY OF THE EFFECTIVITY OF ARBITRAL AWARDS; ART. 253-A OF THE LABOR CODE, UNDER THE CIRCUMSTANCES
OF THE CASE, CANNOT BE PROPERLY APPLIED; THE SECRETARY OF LABOR, IN ISSUING ARBITRAL AWARDS PURSUANT TO ARTICLE
263 (g) OF THE LABOR CODE, IS DEEMED VESTED WITH PLENARY AND DISCRETIONARY POWERS TO DETERMINE THE EFFECTIVITY
THEREOF IN THE ABSENCE OF A LAW TO THE CONTRARY. — Finally, the effectivity of the Order of January 28, 1991, must retroact to
the date of the expiration of the previous CBA, contrary to the position of petitioner. Under the circumstances of the case, Article
253-A cannot be properly applied to herein case. As correctly stated by public respondent in his assailed Order of April 12, 1991
dismissing petitioner's Motion for Reconsideration — Anent the alleged lack of basis for the retroactivity provisions awarded, we
would stress that the provision of law invoked by the Hospital, Article 253-A of the Labor Code, speaks of agreements by and
between the parties, and not arbitral awards . . . Therefore, in the absence of a specific provision of law prohibiting retroactivity of
the effectivity of 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 and discretionary powers to determine the effectivity thereof.

DECISION

MELO, J p:

In response to the mandate under Article 263(g) of the Labor Code and amidst the labor controversy between petitioner St. Luke's
Medical Center and private respondent St. Luke's Medical Center Employees Association-Alliance of Filipino Workers (SLMCEA-AFW),
then Secretary of Labor Ruben D. Torres, issued the Order of January 28, 1991 requiring the parties to execute and finalize their
1990-1993 collective bargaining agreement (CBA) to retroact to the expiration of the anterior CBA. The parties were also instructed
to incorporate in the new CBA the disposition on economic and non-economic issues spelled out in said Order (p. 48, Rollo).
Separate motions for re-evaluation from the parties were to no avail; hence, the petition at bar premised on the following
ascriptions of error, to wit:

PUBLIC RESPONDENT HON. SECRETARY OF LABOR ACTED IN EXCESS OF JURISDICTION AND/OR COMMITTED GRAVE ABUSE OF
DISCRETION WHEN HE VIOLATED PETITIONER'S RIGHT TO DUE PROCESS, PUBLIC RESPONDENT COMPLETELY IGNORED THE LATTER'S
EVIDENCE AND ISSUED THE QUESTIONED AWARDS ON THE BASIS OF ARBITRARY GUESSWORKS, CONJECTURES AND INFERENCES.

II

PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN HE CURTAILED THE PARTIES' RIGHT TO FREE COLLECTIVE
BARGAINING, AND WHEN HE GRANTED MONETARY AWARDS AND ADDITIONAL BENEFITS TO THE EMPLOYEES GROSSLY
DISPROPORTIONATE TO THE OPERATING INCOME OF PETITIONER.

III

PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN HE ADOPTED/CONSIDERED THE ALLEGATIONS OF THE
UNION THAT THE HOSPITAL OFFERED SALARY AND MEAL ALLOWANCE INCREASES IN THE AMOUNT OF P1,140.00 FOR THE FIRST
YEAR AND P700.00 ACROSS THE BOARD MONTHLY SALARY INCREASES FOR THE SECOND AND THIRD YEARS OF THE NEW CBA.

IV

FINALLY, PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN HE GAVE HIS AWARD RETROACTIVE EFFECT.
When the collective bargaining agreement for the period August 1, 1987 to July 30, 1990 was forged between petitioner and private
respondent, the incumbent national president of AFW, the federation to which the local union SLMCEA is affiliated, was Gregorio del
Prado.

Before the expiration of the 1987-90 CBA, the AFW was plagued by internal squabble splitting its leadership between Del Prado and
Purita Ramirez, resulting in the filing by AFW and Del Prado of a petition later docketed before the Department of Labor as NCR-00-
M-90-05-077, where a declaration was sought on the legitimacy of Del Prado's faction as bona fide officers of the federation.
Pending resolution of said case, herein private respondent SLMCEA-AFW brought to the attention of petitioner via a letter dated July
4, 1990 that the 1987-1990 was about to expire, and manifested in the process that private respondent wanted to renew the CBA.
This development triggered round-table talks on which occasions petitioner proposed, among other items, a maximum across-the-
board monthly salary increase of P375.00 per employee, to which proposal private respondent demanded a P1,500.00 hike or 50%
increase based on the latest salary rate of each employee, whichever is higher.

In the meantime, relative to the interpleader case (NCR-00-M-90-05-070) initiated by petitioner to settle the question as to who
between Del Prado and Diwa was authorized to collect federation dues assessed from hospital employees, the Med-Arbiter
recognized Del Prado's right (p. 423, Rollo). This resolution of July 31, 1990 was elevated to the Labor Secretary.

The talks that then ensued between petitioner and private respondent were disturbed anew when the other wing in the AFW
headed by Purita Ramirez, expressed its objections to the on-going negotiations, and when a petition for certification election was
filed by the Association of Democratic Labor Organization of petitioner. However, private respondent emerged victorious after the
elections and was thus certified as the exclusive bargaining entity of petitioner's rank and file employees. Cdpr

Following the decision dated September 14, 1990 in NCR-00-M-90-05-077 (pp. 444-445, Rollo) which upheld the legitimacy of Del
Prado's status including the other officers, Bayani Diwa of the Ramirez Wing appealed; the two cases — NCR-00-M-90-05-070 for
interpleader and NCR-00-M-90-05-077 — were consolidated.

On September 17, 1990, private respondent wrote petitioner for the resumption of their negotiations concerning the union's
proposed CBA. Petitioner reacted by writing a letter on September 20, 1990 expressing willingness to negotiate a new CBA for the
rank and file employees who are not occupying confidential positions. Negotiations thus resumed. However, a deadlock on issues,
especially that bearing on across-the-board monthly and meal allowances followed and to pre-empt the impending strike as voted
upon by a majority of private respondent's membership, petitioner lodged the petition below. The Secretary of Labor immediately
assumed jurisdiction and the parties submitted their respective pleadings. LLphil

On January 22, 1991, a resolution was issued in the consolidated cases which eventually declared Gregorio del Prado and his group
as the legitimate officials of the AFW and the acknowledged group to represent AFW (pp. 320-321, Rollo).

On January 28, 1991, public respondent Secretary of Labor issued the Order now under challenge. Said Order contained a disposition
on both the economic and non-economic issues raised in the petition. On the economic issues, he thus ruled:

First year — P1,140.00 broken down as follows: P510.00 in compliance with the government mandated daily salary increase of
P17.00; and P630.00 CBA across the board monthly salary increase.

Second year — P700.00 across the board monthly salary increase.

Third year — P700.00 across the board monthly salary increase.

It is understood that the second and third year salary increases shall not be chargeable to future government mandated wage
increases. (p. 47, Rollo.)

As earlier stated, both parties moved for reconsideration of the above order, but both motions were denied. Consequently,
petitioner St. Luke's filed the instant petition, a special civil action on certiorari.

In assailing the Order of January 28, 1991, petitioner St. Luke's focuses on public respondent's disposition of the economic issues.

First, petitioner finds highly questionable the very basis of public respondent's decision to award P1,140.00 as salary and meal
allowance increases for the first year and P700.00 across-the-board monthly salary increases for the succeeding second and third
years of the new CBA. According to petitioner, private respondent SLMCEA-AFW misled public respondent into believing that said
amounts were the last offer of petitioner St. Luke's immediately prior to the deadlock. Petitioner vehemently denies having made
such offer, claiming that its only offer consists of the following:

Non-Economic Issues:

St. Luke's submits that it is adopting the non-economic issues proposed and agreed upon in its Collective Bargaining Agreement with
SLMCEA-AFW for the period covering 1987, 1990. Copy of the CBA is attached as Annex "F" hereof.

Economic Issue:

St. Luke's respectfully offers to give an increase to all its rank and file employees computed as follows:

First Year — P900 (P700.00 basic + P200.00 food allowance) for an overall total food allowance of P320.00.

Second Year — P400

Third Year — P400

plus the union will be allowed to operate and manage one (1) canteen for free to augment their funds. Although the profit shall be
divided equally between union and SLMC, the operation of the canteen will generate for them a monthly income of no less than
P15,000.00, and likewise provide cheap and subsidized food to Union members.

The wage increase as proposed shall be credited to whatever increases in the minimum wage or to any across the board increases
that may be mandated by the government or the DOLE. (pp. 20-21, Rollo.)

Petitioner charges that public respondent, in making such award, erroneously relied on the extrapolated figures provided by private
respondent SLMCEA-AFW, which grossly inflated petitioner St. Luke's net income. Petitioner contends that if the disputed awards
are sustained, the wage increases and benefits shall total approximately P194,403,000.00 which it claims is excessive and
unreasonable, considering that said aggregate amount is more than its projected income for the next three years. To illustrate its
point, petitioner submits the following computation:

YR I

A. P1,140 added to basic pay

a) P1,140 x 1,500 (no. of employees)x 12 (months) P20,520,000

b) 13th month pay: P1,140 x 1,500 1,710,000

c) Overtime pay, 20% of payroll 4,104,000

d) Holiday pay, PM/Night pay 1,026,000

e) Sick leave 855,000

f) Funeral, Paternity, Maternity leaves, retirement pay 820,000

B. P230 added to meal allowance

a) P230 x 1,500 x 12 4,140,000

C. One day added to sick leave

a) (Ave. pay P3,000 + P1,140) divided by 30 x 1,500 222,000.

D. Sick leave cash conversion base reduced from 60 to 45 days

a) (P3,300 + P1,140)/30 x 1,200 2,664,000

E. Retirement benefits adjustment 500,000

—————

FIRST YEAR ADDITIONAL COST 36,561,000

YR II

A. Yr I increase except sick leave cash conversion

from 60 to 45 P33,897,000

B. P700 added to monthly basic pay

a) P700 x 1,500 x 12 12,600,000

b) 13th month pay: P700 x 1,500 1,050,000

c) Overtime pay, 20% of P12.6M 2,520,000

d) Holiday pay, PM/Night pay 630,000

e) Sick leave: 15 days x 700/30 x 1,500 525,000

f) Funeral, paternity, maternity leaves, retirement pay 504,000

—————

SECOND YEAR ADDITIONAL COST P51,726,000

YR III

A. Yr I and Yr II increases P88,287,000

B. P700 added to basic pay

a) P700 x 1,500 x 12 12,600,000

b) 13th month pay: P700 x 1,500 1,050,000

c) Overtime pay, 20% of P12.6M 2,520,000

d) Holiday pay, PM/Night pay 630,000

e) Sick leave 525,000

f) Funeral, paternity, maternity leaves, retirement pay 504,000

—————

THIRD YEAR ADDITIONAL COST P106,116,000

TOTAL THREE-YEAR ADDITIONAL

BENEFITS/WAGES P194,403,000

(pp. 14-16, Rollo)

On the basis of the foregoing, petitioner St. Luke's concludes that it would be in a very poor position to even produce the resources
necessary to pay the wage increases of its rank and file employees. LexLib

Petitioner also impugns public respondent's awards on grounds of prematurity, emphasizing that the awards in question even
preceded collective bargaining negotiations which have to take place first between both litigants. It denies entering into a round of
negotiations with private respondent SLMCEA-AFW on the theory that the meetings referred to by the latter were merely informal
ones, without any binding effect on the parties because AFW is torn between two factions vying for the right to represent it. Thus,
petitioner maintains that nothing conclusive on the terms and conditions of the proposed CBA could be arrived at when the other
party, private respondent SLMCEA-AFW is confronted with an unresolved representation issue. llcd

Petitioner argues further that since no formal negotiations were conducted, it could not have possibly made an offer of P1,140.00 as
salary and meal allowance increases for the first year and an increase of P700.00 across-the-board monthly salary for the second and
third years of the new CBA. It raises doubts on the veracity of the minutes presented by private respondent SLMCEA-AFW to prove
that negotiations were held, particularly on October 26, 1990, when petitioner allegedly made said offer as its last ditch effort for a
compromise prior to the deadlock. According to petitioner, these minutes, unsigned by petitioner, were merely concocted by private
respondent SLMCEA-AFW. LLjur

Finally, petitioner attacks the Order of January 28, 1991 for being violative of Article 253-A of the Labor Code, particularly its
provisions on retroactivity. Said Article pertinently provides:

xxx xxx xxx

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 the 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 retroactivity
thereof. In case of a deadlock in the renegotiation of the collective bargaining agreement, the parties may exercise their rights under
this Code.

Petitioner argues that in granting retroactive effect to the enforceability of the CBA, public respondent committed an act contrary to
the above provision of law, pointing out that the old CBA expired on July 30, 1990 and the questioned order was issued on January
28, 1991. Petitioner theorizes that following Article 13 of the Civil Code which provides that there are 30 days in one month, the
questioned Order of January 28, 1991 was issued beyond the six-month period, graphically shown thus:

July 30, 1990 Expiration

July 31 = 1 day
August 1-31, 1990 = 31 days
September 1-30, 1990 = 30 days
October 1-31,1990 = 31 days
November 1-30, 1990 = 30 days
December 1-31, 1990 = 31 days
January 1-28, 1991 = 28 days
—————————
TOTAL = 182 days
(6 months and 2 days)

(p. 34, Rollo.)

Traversing petitioner's arguments, private respondent SLMCEA-AFW contends that the formulation of the terms and conditions of
the CBA awards is well supported by the factual findings of public respondent which established that petitioner failed to refute
private respondent's allegation that during their last meeting on October 26, 1990, petitioner stood pat on its offer of P1,140.00 as
salary and meal allowance increases for the first year of the new CBA and P700.00 across-the-board salary increases for the second
and third years thereof. Said awards, it said, are well within the means of petitioner because its reported net income of P15 million,
P11 million, and P13 million for 1987, 1988, and 1989, respectively, have been actually understated. Moreover, private respondent
claims that petitioner, in actual terms, does not have to pay the alleged amount of P194,403,000.00 for wages and benefits in favor
of its employees. Such amount, according to private respondent, is bloated and excessive. Private respondent in substantiating such
claim made the following analysis:

First, P1,140.00 total salary increase for the first year (1990-1991) of the new CBA is divided into: P510.00 in compliance with the
government mandated daily salary increase of P17.00 and P630.00 CBA across the board monthly salary increase, thus, the whole
P1,140.00 salary increase is payable only beginning August 1, 1990 (reckoned from the CBA July 30, 1990 expiry date) up to October
31, 1990 only following the November 1, 1990 effectivity of WAGE ORDER NO. NCR-01 which granted the said P17.00 daily wage
increase or P510.00 monthly of which herein petitioner promptly complied with and paid to its employees and therefore deductible
from P1,140.00 total monthly salary increase (Annex "A" — Petition and Annex "13" hereof);

Second, the remaining P630.00 CBA across the board monthly salary increase takes effect on November 1, 1990 up to January 7,
1991 only following the January 8, 1991 effectivity of WAGE ORDER NO. NCR-02 which mandated P12.00 daily wage increase or
P360.00 monthly, hence, reducing the P630.00 CBA monthly salary increase to P270.00 CBA monthly salary increase effective
January 8, 1991 and onwards till July 31, 1991 (Annexes "22" and "23" hereof);

Third, that out of an estimated work force of 1,264 regular employees inclusive of about 209 supervisors, unit, junior area, division
department managers and top level executives, all occupying permanent positions, and approximately 55 regular but highly
confidential employees, only 1,000 rank-and-file regular/permanent employees (casuals, contractuals, probies and security guards
excluded) are entitled to the CBA benefits for three (3) years (1990-1993) (as private respondent SLMCEA-AFW gathered and
analyzed from the petitioner's Personnel Strength Report hereto attached as Annex "28" hereof) vis-a-vis the generalized and
inflated 1,500 employees as total work force purportedly entitled to CBA benefits per its self-serving and incredible computation;

Fourth, the petitioner's computed 20% overtime pay of the basic salary is unrealistic and overstated in view of its extreme cost-
cutting/savings measures on all expenditures, most specially, on overtime work adopted since last year and a continuing
management priority project up to the present; and

Fifth, due to the above considerations, the total real award of wages and fringe benefits is far less than the true annual hefty
operating net income of the petitioner.

The net result is that the first year award of P1,140.00 monthly salary increase of which P510.00 monthly salary increase is made in
compliance with the P510.00 monthly wage increase at P17.00 daily wage increase effective November 1, 1990 under Wage Order
No. NCR-01 (Annex "13" hereof) or with the intended P630.00 CBA monthly salary increase is further reduced by P360.00 monthly
wage increase at P12.00 daily wage increase effective January 8, 1991 under Wage Order No. NCR-02 (Annex "22" hereof), thereby
leaving a downgraded or watered down CBA monthly increase of P270.00 only.

Comparatively speaking, the 13% monthly salary increase of each employee average basic monthly salary of P2,500.00 in 1987 or
P325.00 monthly salary increase granted by the petitioner under the first old CBA (1987-1990) is better than the much diluted
P270.00 CBA monthly salary increase (in lieu of the awarded P630.00 CBA monthly salary increase for the first year of the new CBA
under Order, dated January 28, 1991, of public respondent). (Annexes "A" and "G" — Petition). (pp. 390-391, Rollo.)

Private respondent concludes that petitioner's version that it will have to pay P194,403,000.00 is not true because this will be
drastically reduced by 40% to 60% in real terms due to a smaller number of employees covered. It is further explained that the
government-decreed wage increases above mentioned already form part of the P1,140.00 wage and meal allowance increases, not
to mention the strict cost-cutting measures and practices on overtime and expense items adopted by petitioner since 1990. prLL

With respect to public respondent's ruling that the CBA awards should be given retroactive effect, private respondent agrees with
the Labor Secretary's view that Article 253-A of the Labor Code does not apply to arbitral awards such as those involved in the
instant case. According to private respondent, Article 253-A of the Labor Code is clear and plain on its face as referring only to
collective bargaining agreements entered into by management and the certified exclusive bargaining agent of all rank-and-file
employees therein within six (6) months from the expiry of the old CBA.

These foregoing contentions and arguments of private respondent have been similarly put forward by the Office of the Solicitor
General in its Consolidated Comment filed on November 23, 1991. The Solicitor General shares the views of private respondent
SLMCEA-AFW.

We are now tasked to rule on the petition. Do petitioner's evidence and arguments provide adequate basis for the charge of alleged
grave abuse of discretion committed by public respondent in his Order of January 28, 1991 as to warrant its annulment by this
Court? This is the sole issue in the case at bar. Consequently, this Court would apply the following yardstick in resolving the
aforestated issue: that public respondent, in the exercise of his power to assume jurisdiction over subject labor dispute, acted
whimsically, capriciously, or in an arbitrary, despotic manner by reason of passion or personal hostility which was so patent and
gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined or to act at all in contemplation of
law (San Sebastian College vs. Court of Appeals, 197 SCRA 136 [1991]).

Subjected to and measured by this test, the challenged Order, we believe, can withstand even the most rigorous scrutiny.

Petitioner assails the Order of January 28, 1991 on three grounds: (a) unreasonableness and baselessness; (b) prematurity; and (c)
violation of Article 253-A of the Labor Code.

We rule that the Order, particularly in its disposition on the economic issues, was not arbitrarily imposed by public respondent. A
perusal of the Order shows that public respondent took into consideration the parties' respective contentions, a clear indication that
he was keenly aware of their contrary positions. Both sides having been heard, they were allowed to present their respective
evidence. The due process requirement was thus clearly observed. Considering public respondent's expertise on the subject and his
observance of the cardinal principles of due process, the assailed Order deserves to be accorded great respect by this Court.

Equally worth mentioning is the fact that in resolving the economic issues, public respondent merely adopted in toto petitioner's
proposals. Consequently, petitioner cannot now claim that the awards are unreasonable and baseless. Neither can it deny having
made such proposals, as it attempted to do in its Motion for Reconsideration of the challenged Order before public respondent and
which it continues to pursue in the instant petition. It is too late in the day for such pretense, especially so because petitioner failed
to controvert private respondent's allegation contained in its Comment to the petition before the Labor Secretary that petitioner
had offered as its last proposal said salary and meal allowance increases. As correctly pointed out by public respondent, petitioner
failed, when it had the chance, to rebut the same in its Reply to said Comment, considering that the resolution of the labor dispute
at that time was still pending. Any objection on this point is thus deemed waived. llcd

We do not see merit in petitioner's theory that the awards were granted prematurely. In its effort to persuade this Court along this
point, petitioner denies having negotiated with private respondent SLMCEA-AFW. Petitioner collectively refers to all the talks
conducted with private respondent as mere informal negotiations due to the representation issue involving AFW. Petitioner thus
argues that in the absence of any formal negotiations, no collective bargaining could have taken place. Public respondent, petitioner
avers, should have required the parties instead to negotiate rather than prematurely issuing his order.

We cannot agree with this line of reasoning. It is immaterial whether the representation issue within AFW has been resolved with
finality or not. Said squabble could not possibly serve as a bar to any collective bargaining since AFW is not the real party-in-interest
to the talks; rather, the negotiations were confined to petitioner and the local union SLMCEA which is affiliated to AFW. Only the
collective bargaining agent, the local union SLMCEA in this case, possesses legal standing to negotiate with petitioner. A duly
registered local union affiliated with a national union or federation does not lose its legal personality or independence (Adamson
and Adamson, Inc. vs. The Court of Industrial Relations and Adamson and Adamson Supervising Union (FFW), 127 SCRA 268 [1984]).
In Elisco-Elirol Labor Union (NAFLU) vs. Noriel (180 SCRA 681 [1977]), then Justice Teehankee re-echoed the words of Justice
Esguerra in Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. (66 SCRA 512 [1975], thus:

(T)he locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the
employer and their employee-members in the economic struggle for the fruits of the joint productive effort of labor and capital; and
the association of the locals into the national union (as PAFLU) was in furtherance of the same end. These associations are
consensual entities capable of entering into such legal relations with their members. The essential purpose was the affiliation of the
local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and
conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all,
subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought it into existence. (at p. 688; emphasis supplied.)

Appending "AFW" to the local union's name does not mean that the federation absorbed the latter. No such merger can be
construed. Rather, what is conveyed is the idea of affiliation, with the local union and the larger national federation retaining their
separate personalities.

Petitioner cannot pretend to be unaware of these legal principles since they enjoy the benefit of legal advice from their
distinguished counsel. Thus, we are constrained to agree with the position of the Solicitor General that petitioner conveniently used
the representation issue within AFW to skirt entering into bargaining negotiations with the private respondent.

Too, petitioner is in error in contending that the order was prematurely issued. It must be recalled that immediately after the
deadlock in the talks, it was petitioner which filed a petition with the Secretary of Labor for the latter to assume jurisdiction over the
labor dispute. In effect, petitioner submitted itself to the public respondent's authority and recognized the latter's power to settle
the labor dispute pursuant to Article 263(g) of the Labor Code granting him the power and authority to decide the dispute. It cannot,
therefore, be said that public respondent's decision to grant the awards is premature and pre-emptive of the parties' right to
collectively bargain, simply because the Order of January 28, 1991 was unfavorable to one or the other party, for as we held in
Saulog Transit, Inc. vs. Lazaro, (128 SCRA 591 [1984]):

It is a settled rule that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and after
failing to obtain such relief, repudiate or question that same jurisdiction. A party cannot invoke jurisdiction at one time and reject it
at another time in the same controversy to suit its interests and convenience. The Court frowns upon and does not tolerate the
undesirable practice of some litigants who submit voluntarily a cause and then accepting the judgment when favorable to them and
attacking it for lack of jurisdiction when adverse. (Tajonera v. Lamaroxa, 110 SCRA 447, citing Tijam v. Sibonghanoy, 23 SCRA 35). (at
p. 601.)

Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the previous CBA, contrary to
the position of petitioner. Under the circumstances of the case, Article 253-A cannot be properly applied to herein case. As correctly
stated by public respondent in his assailed Order of April 12, 1991 dismissing petitioner's Motion for Reconsideration —

Anent the alleged lack of basis for the retroactivity provisions awarded, we would stress that the provision of law invoked by the
Hospital, Article 253-A of the Labor Code, speaks of agreements by and between the parties, and not arbitral awards . . . (p. 818,
Rollo.)

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of 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 and discretionary powers to determine the effectivity thereof.

WHEREFORE, the instant petition is hereby DISMISSED for lack of merit.

SO ORDERED.

9. Rivera, et. al. v. Espiritu, Jan. 23, 2002

GERARDO F. RIVERA, ALFRED A. RAMISO, AMBROCIO PALAD, DENNIS R. ARANAS, DAVID SORIMA, JR., JORGE P. DELA ROSA, and
ISAGANI ALDEA, petitioners, vs. HON. EDGARDO ESPIRITU in his capacity as Chairman of the PAL Inter-Agency Task Force created
under Administrative Order No. 16; HON. BIENVENIDO LAGUESMA in his capacity as Secretary of Labor and Employment; PHILIPPINE
AIRLINES (PAL), LUCIO TAN, HENRY SO UY, ANTONIO V. OCAMPO, MANOLO E. AQUINO, JAIME J. BAUTISTA, and ALEXANDER O.
BARRIENTOS, respondents.

Movement of Attorney's for Brotherhood, Integrity & Nationalism, Inc. (MABINI) for petitioners.

Estelito P. Mendoza for private respondents.

The Solicitor General for public respondent.

Adolfo M. Guerzon for private respondent A. Barrientos.

SYNOPSIS

To address the problems of the ailing flag carrier, on September 23, 1998, Philippine Airlines (PAL) ceased operations and sent
notices of termination to its employees. Consequently, on September 27, 1998, the Philippine Airlines Employees Association
(PALEA) board wrote again to the Office of the President and submitted a proposal. The PAL management accepted the said PALEA
proposal. During the DOLE-supervised referendum, majority of the union members accepted the PAL-PALEA agreement. As a result,
on October 7, 1998, PAL resumed domestic operations. However, on the same date, seven officers and members of PALEA filed this
petition to annul the September 27, 1998 agreement on the ground, among others, that the suspension of the PAL-PALEA CBA for a
period of 10 years as provided therein was unconstitutional and contrary to public policy.

The Court ruled that 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. This Court found 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 satisfied the first purpose of Article
253-A. The other purpose is to assign specific timetables wherein negotiations become a matter of right and requirement. Nothing in
Article 253-A of the Labor Code prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the
remedies to enforce the same. 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.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI AND PROHIBITION; ESSENTIAL REQUISITES. — The essential requisites for a
petition for certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-
judicial functions; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary
course of law. For writs of prohibition, the requisites are: (1) the impugned act must be that of a "tribunal, corporation, board,
officer, or person, whether exercising judicial, quasi-judicial or ministerial functions"; and (2) there is no plain, speedy, and adequate
remedy in the ordinary course of law."

2. ID.; ID.; ID.; NOT PROPER REMEDIES IN CASE AT BAR. — The assailed agreement is clearly not the act of a tribunal, board, officer,
or person exercising judicial, quasi-judicial, or ministerial functions. It is not the act of public respondents Finance Secretary Edgardo
Espiritu and Labor Secretary Bienvenido Laguesma as functionaries of the Task Force. Neither is there a judgment, order or
resolution of either public respondents involved. Instead, what exists is a contract between a private firm and one of its labor
unions, albeit entered into with the assistance of the Task Force. The first and second requisites for certiorari and prohibition are
therefore not present in this case. Furthermore, there is available to petitioners a plain, speedy, and adequate remedy in the
ordinary course of law. While the petition is denominated as one for certiorari and prohibition, its object is actually the nullification
of the PAL-PALEA agreement. As such, petitioners' proper remedy is an ordinary civil action for annulment of contract, an action
which properly falls under the jurisdiction of the regional trial courts. Neither certiorari nor prohibition is the remedy in the present
case.

3. ID.; ID.; ID.; REVIEW OF THE FACTS AND FACTUAL ISSUES NOT THE FUNCTION OF THE SUPREME COURT; EXCEPTION. — Petitioners
further assert that public respondents were partial towards PAL management. They allegedly pressured the PALEA leaders into
accepting the agreement. Petitioners ask this Court to examine the circumstances that led to the signing of said agreement. This
would involve review of the facts and factual issues raised in a special civil action for certiorari which is not the function of this Court.
Nevertheless, considering the prayer of the parties principally we shall look into the substance of the petition, in the higher interest
of justice and in view of the public interest involved, inasmuch as what is at stake here is industrial peace in the nation's premier
airline and flag carrier, a national concern. aECTcA

4. LABOR AND SOCIAL LEGISLATIONS; LABOR CODE; LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENT; ELUCIDATED. — A
CBA is "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." The primary purpose of a CBA is the
stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace. In construing a CBA,
the courts must be practical and realistic and give due consideration to the context in which it is negotiated and the purpose which it
is intended to serve.

5. ID.; ID.; ID.; ID.; NOTHING PROHIBITS THE PARTIES FROM WAIVING OR SUSPENDING THE MANDATORY TIMETABLES AND
AGREEING ON THE REMEDIES TO ENFORCE THE SAME. — 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.

6. ID.; ID.; ID.; RIGHT TO FREE COLLECTIVE BARGAINING INCLUDES THE RIGHT TO SUSPEND IT. — 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."

7. CIVIL LAW; OBLIGATIONS AND CONTRACTS; IN CONSTRUING AN INSTRUMENT WITH SEVERAL PROVISIONS, A CONSTRUCTION
MUST BE ADOPTED AS WILL GIVE EFFECT TO ALL. — 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.

8. LABOR AND SOCIAL LEGISLATIONS; LABOR CODE; LABOR RELATIONS; INTENT OF THE PARTIES TO MAINTAIN "UNION SECURITY"
DURING THE PERIOD OF THE SUSPENSION OF THE (CBA) IS NOT UNFAIR LABOR PRACTICE. — 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. . . . 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-à-vis the
employer.

9. ID.; ID.; ID.; PALEA AS COMPANY UNION; NOT ESTABLISHED IN CASE AT BAR. — 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.

10. ID.; ID.; ID.; COLLECTIVE BARGAINING AGREEMENT; FIVE-YEAR REPRESENTATION LIMIT APPLIES ONLY WHEN THERE IS AN
EXTANT CBA IN FULL FORCE AND EFFECT. — We 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.

DECISION

QUISUMBING, J p:

In this special civil action for certiorari and prohibition, petitioners charge public respondents with grave abuse of discretion
amounting to lack or excess of jurisdiction for acts taken in regard to the enforcement of the agreement dated September 27, 1998,
between Philippine Airlines (PAL) and its union, the PAL Employees Association (PALEA).
The factual antecedents of this case are as follows:

On June 5, 1998, PAL pilots affiliated with the Airline Pilots Association of the Philippines (ALPAP) went on a three-week strike,
causing serious losses to the financially beleaguered flag carrier. As a result, PAL's financial situation went from bad to worse. Faced
with bankruptcy, PAL adopted a rehabilitation plan and downsized its labor force by more than one-third.

On July 22, 1998, 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.

On August 28, 1998, then 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. The Task Force was composed of the Departments of Finance, Labor and
Employment, Foreign Affairs, Transportation and Communication, and Tourism, together with the Securities and Exchange
Commission (SEC). Public respondent Edgardo Espiritu, then the Secretary of Finance, was designated chairman of the Task Force. It
was "empowered to summon all parties concerned for conciliation, mediation (for) the purpose of arriving at a total and complete
solution of the problem.'' 1 Conciliation meetings were then held between PAL management and the three unions representing the
airline's employees, 2 with the Task Force as mediator.

On September 4, 1998, PAL management submitted to the Task Force an offer by private respondent Lucio Tan, Chairman and Chief
Executive Officer of PAL, of a plan to transfer shares of stock to its employees. The pertinent portion of said plan reads:

1. From the issued shares of stock within the group of Mr. Lucio Tan's holdings, the ownership of 60,000 fully paid shares of stock of
Philippine Airlines with a par value of PHP5.00/share will be transferred in favor of each employee of Philippine Airlines in the active
payroll as of September 15, 1998. Should any share-owning employee leave PAL, he/she has the option to keep the shares or sells
(sic) his/her shares to his/her union or other employees currently employed by PAL.

2. The aggregate shares of stock transferred to PAL employees will allow them three (3) members to (sic) the PAL Board of Directors.
We, thus, become partners in the boardroom and together, we shall address and find solutions to the wide range of problems
besetting PAL.

3. In order for PAL to attain (a) degree of normalcy while we are tackling its problems, we would request for a suspension of the
Collective Bargaining Agreements (CBAs) for 10 years. 3

On September 10, 1998, the Board of Directors of PALEA voted to accept Tan's offer and requested the Task Force's assistance in
implementing the same. Union members, however, rejected Tan's offer. Under intense pressure from PALEA members, the union's
directors subsequently resolved to reject Tan's offer.

On September 17, 1998, PAL informed the Task Force that it was shutting down its operations effective September 23, 1998,
preparatory to liquidating its assets and paying off its creditors. The airline claimed that given its labor problems, rehabilitation was
no longer feasible, and hence, the airline had no alternative but to close shop.

On September 18, 1998, PALEA sought the intervention of the Office of the President in immediately convening the parties, the PAL
management, PALEA, ALPAP, and FASAP, including the SEC under the direction of the Inter-Agency Task Force, to prevent the
imminent closure of PAL. 4

On September 19, 1998, PALEA informed the Department of Labor and Employment (DOLE) that it had no objection to a referendum
on the Tan's offer. 2,799 out of 6,738 PALEA members cast their votes in the referendum under DOLE supervision held on September
21-22, 1998. Of the votes cast, 1,055 voted in favor of Tan's offer while 1,371 rejected it.

On September 23, 1998, PAL ceased its operations and sent notices of termination to its employees.

Two days later, the PALEA board wrote President Estrada anew, seeking his intervention. PALEA offered a 10-year moratorium on
strikes and similar actions and a waiver of some of the economic benefits in the existing CBA. 5 Tan, however, rejected this counter-
offer.

On September 27, 1998, the PALEA board again wrote the President proposing the following terms and conditions, subject to
ratification by the general membership:
1. Each PAL employee shall be granted 60,000 shares of stock with a par value of P5.00, from Mr. Lucio Tan's shareholdings, with
three (3) seats in the PAL Board and an additional seat from government shares as indicated by His Excellency;

2. Likewise, PALEA shall, as far as practicable, be granted adequate representation in committees or bodies which deal with matters
affecting terms and conditions of employment;

3. To enhance and strengthen labor-management relations, the existing Labor-Management Coordinating Council shall be
reorganized and revitalized, with adequate representation from both PAL management and PALEA;

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.

5. PAL shall grant the benefits under the 26 July 1998 Memorandum of Agreement forged by and between PAL and PALEA, to those
employees who may opt to retire or be separated from the company.

6. PALEA members who have been retrenched but have not received separation benefits shall be granted priority in the
hiring/rehiring of employees.

7. In the absence of applicable Company rule or regulation, the provisions of the Labor Code shall apply. 6

Among the signatories to the letter were herein petitioners Rivera, Ramiso, and Aranas, as officers and/or members of the PALEA
Board of Directors. PAL management accepted the PALEA proposal and the necessary referendum was scheduled.

On October 2, 1998, 5,324 PALEA members cast their votes in a DOLE-supervised referendum. Of the votes cast, 61% were in favor
of accepting the PAL-PALEA agreement, while 34% rejected it.

On October 7, 1998, PAL resumed domestic operations. On the same date, seven officers and members of PALEA filed this instant
petition to annul the September 27, 1998 agreement entered into between PAL and PALEA on the following grounds:

PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND EXCEEDED THEIR JURISDICTION IN ACTIVELY PURSUING THE
CONCLUSION OF THE PAL-PALEA AGREEMENT AS THE CONSTITUTIONAL RIGHTS TO SELF-ORGANIZATION AND COLLECTIVE
BARGAINING, BEING FOUNDED ON PUBLIC POLICY, MAY NOT BE WAIVED, NOR THE WAIVER, RATIFIED.

II

PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND EXCEEDED THEIR JURISDICTION IN PRESIDING OVER THE
CONCLUSION OF THE PAL-PALEA AGREEMENT UNDER THREAT OF ABUSIVE EXERCISE OF PAL'S MANAGEMENT PREROGATIVE TO
CLOSE BUSINESS USED AS SUBTERFUGE FOR UNION-BUSTING.

The issues now for our resolution are:

(1) Is an original action for certiorari and prohibition the proper remedy to annul the PAL-PALEA agreement of September 27, 1998;

(2) Is the PAL-PALEA agreement of September 27, 1998, stipulating the suspension of the PAL-PALEA CBA unconstitutional and
contrary to public policy?

Anent the first issue, petitioners aver that public respondents as functionaries of the Task Force, gravely abused their discretion and
exceeded their jurisdiction when they actively pursued and presided over the PAL-PALEA agreement.
Respondents, in turn, argue that the public respondents merely served as conciliators or mediators, consistent with the mandate of
A.O. No. 16 and merely supervised the conduct of the October 3, 1998 referendum during which the PALEA members ratified the
agreement. Thus, public respondents did not perform any judicial and quasi-judicial act pertaining to jurisdiction. Furthermore,
respondents pray for the dismissal of the petition for violating the "hierarchy of courts" doctrine enunciated in People v. Cuaresma 7
and Enrile v. Salazar. 8

Petitioners allege grave abuse of discretion under Rule 65 of the 1997 Rules of Civil Procedure. The essential requisites for a petition
for certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial
functions; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary
course of law. 9 For writs of prohibition, the requisites are: (1) the impugned act must be that of a "tribunal, corporation, board,
officer, or person, whether exercising judicial, quasi-judicial or ministerial functions;" and (2) there is no plain, speedy, and adequate
remedy in the ordinary course of law." 10

The assailed agreement is clearly not the act of a tribunal, board, officer, or person exercising judicial, quasi-judicial, or ministerial
functions. It is not the act of public respondents Finance Secretary Edgardo Espiritu and Labor Secretary Bienvenido Laguesma as
functionaries of the Task Force. Neither is there a judgment, order, or resolution of either public respondents involved. Instead, what
exists is a contract between a private firm and one of its labor unions, albeit entered into with the assistance of the Task Force. The
first and second requisites for certiorari and prohibition are therefore not present in this case.

Furthermore, there is available to petitioners a plain, speedy, and adequate remedy in the ordinary course of law. While the petition
is denominated as one for certiorari and prohibition, its object is actually the nullification of the PAL-PALEA agreement. As such,
petitioners' proper remedy is an ordinary civil action for annulment of contract, an action which properly falls under the jurisdiction
of the regional trial courts. 11 Neither certiorari nor prohibition is the remedy in the present case.

Petitioners further assert that public respondents were partial towards PAL management. They allegedly pressured the PALEA
leaders into accepting the agreement. Petitioners ask this Court to examine the circumstances that led to the signing of said
agreement. This would involve review of the facts and factual issues raised in a special civil action for certiorari which is not the
function of this Court. 12

Nevertheless, considering the prayer of the parties principally we shall look into the substance of the petition, in the higher interest
of justice 13 and in view of the public interest involved, inasmuch as what is at stake here is industrial peace in the nation's premier
airline and flag carrier, a national concern.

On the second issue, petitioners contend that the controverted PAL-PALEA agreement is void because it abrogated the right of
workers to self-organization 14 and their right to collective bargaining. 15 Petitioners claim that the agreement was not meant
merely to suspend the existing PAL-PALEA CBA, which expires on September 30, 2000, but also to foreclose any renegotiation or any
possibility to forge a new CBA for a decade or up to 2008. It violates the "protection to labor" policy 16 laid down by the
Constitution.

Article 253-A of the Labor Code reads:

ARTICLE 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.

We find the argument devoid of merit.

A CBA is "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.'' 18 The primary purpose of a CBA is the
stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace. 19 In construing a
CBA, the courts must be practical and realistic and give due consideration to the context in which it is negotiated and the purpose
which it is intended to serve. 20

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.'' 21

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, 22 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. 23 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-à-vis the employer. 24

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.

We 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, we are of the view that the PAL-PALEA agreement dated September 27, 1998, is a valid exercise of the freedom to contract.
Under the principle of inviolability of contracts guaranteed by the Constitution, 25 the contract must be upheld.
WHEREFORE, there being no grave abuse of discretion shown, the instant petition is DISMISSED. No pronouncement as to costs.

SO ORDERED.

10. Insular Hotel Employees v. Waterfront Insular Hotel, Sep. 22, 2010

INSULAR HOTEL EMPLOYEES UNION-NFL, petitioner, vs. WATERFRONT INSULAR HOTEL DAVAO, respondent.

DECISION

PERALTA, J p:

Before this Court is a petition for review on certiorari, 1 under Rule 45 of the Rules of Court, seeking to set aside the Decision 2
dated October 11, 2005, and the Resolution 3 dated July 13, 2006 of the Court of Appeals (CA) in consolidated labor cases docketed
as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657. Said Decision reversed the Decision 4 dated the April 5, 2004 of the Accredited
Voluntary Arbitrator Rosalina L. Montejo (AVA Montejo). aTcSID

The facts of the case, as culled from the records, are as follows:

On November 6, 2000, respondent Waterfront Insular Hotel Davao (respondent) sent the Department of Labor and Employment
(DOLE), Region XI, Davao City, a Notice of Suspension of Operations 5 notifying the same that it will suspend its operations for a
period of six months due to severe and serious business losses. In said notice, respondent assured the DOLE that if the company
could not resume its operations within the six-month period, the company would pay the affected employees all the benefits legally
due to them.

During the period of the suspension, Domy R. Rojas (Rojas), the President of Davao Insular Hotel Free Employees Union (DIHFEU-
NFL), the recognized labor organization in Waterfront Davao, sent respondent a number of letters asking management to reconsider
its decision.

In a letter 6 dated November 8, 2000, Rojas intimated that the members of the Union were determined to keep their jobs and that
they believed they too had to help respondent, thus:

xxx xxx xxx

Sir, we are determined to keep our jobs and push the Hotel up from sinking. We believe that we have to help in this (sic) critical
times. Initially, we intend to suspend the re-negotiations of our CBA. We could talk further on possible adjustments on economic
benefits, the details of which we are hoping to discuss with you or any of your emissaries. . . . 7

In another letter 8 dated November 10, 2000, Rojas reiterated the Union's desire to help respondent, to wit:

We would like to thank you for giving us the opportunity to meet [with] your representatives in order for us to air our sentiments
and extend our helping hands for a possible reconsideration of the company's decision.

The talks have enabled us to initially come up with a suggestion of solving the high cost on payroll.

We propose that 25 years and above be paid their due retirement benefits and put their length of service to zero without loss of
status of employment with a minimum hiring rate.

Thru this scheme, the company would be able to save a substantial amount and reduce greatly the payroll costs without affecting
the finance of the families of the employees because they will still have a job from where they could get their income. CIAacS

Moreover, we are also open to a possible reduction of some economic benefits as our gesture of sincere desire to help.

We are looking forward to a more fruitful round of talks in order to save the hotel. 9

In another letter 10 dated November 20, 2000, Rojas sent respondent more proposals as a form of the Union's gesture of their
intention to help the company, thus:
1) Suspension of [the] CBA for ten years, No strike no lock-out shall be enforced.

2) Pay all the employees their benefits due, and put the length of service to zero with a minimum hiring rate. Payment of benefits
may be on a staggered basis or as available.

3) Night premium and holiday pays shall be according to law. Overtime hours rendered shall be offsetted as practiced.

4) Reduce the sick leaves and vacation leaves to 15 days/15days.

5) Emergency leave and birthday off are hereby waived.

6) Duty meal allowance is fixed at P30.00 only. No more midnight snacks and double meal allowance. The cook drinks be stopped as
practiced.

7) We will shoulder 50% of the group health insurance and family medical allowance be reduced to 1,500.00 instead of 3,000.00.

8) The practice of bringing home our uniforms for laundry be continued.

9) Fixed manning shall be implemented, the rest of manpower requirements maybe sourced thru WAP and casual hiring. Manpower
for fixed manning shall be 145 rank-and-file union members.

10) Union will cooperate fully on strict implementation of house rules in order to attain desired productivity and discipline. The
union will not tolerate problem members.

11) The union in its desire to be of utmost service would adopt multi-tasking for the hotel to be more competitive.

It is understood that with the suspension of the CBA renegotiations, the same existing CBA shall be adopted and that all provisions
therein shall remain enforced except for those mentioned in this proposal.

These proposals shall automatically supersede the affected provisions of the CBA. 11

In a handwritten letter 12 dated November 25, 2000, Rojas once again appealed to respondent for it to consider their proposals and
to re-open the hotel. In said letter, Rojas stated that manpower for fixed manning shall be one hundred (100) rank-and-file Union
members instead of the one hundred forty-five (145) originally proposed. ScaCEH

Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted to respondent a Manifesto 13 concretizing their earlier
proposals.

After series of negotiations, respondent and DIHFEU-NFL, represented by its President, Rojas, and Vice-Presidents, Exequiel J. Varela
Jr. and Avelino C. Bation, Jr., signed a Memorandum of Agreement 14 (MOA) wherein respondent agreed to re-open the hotel
subject to certain concessions offered by DIHFEU-NFL in its Manifesto.

Accordingly, respondent downsized its manpower structure to 100 rank-and-file employees as set forth in the terms of the MOA.
Moreover, as agreed upon in the MOA, a new pay scale was also prepared by respondent.

The retained employees individually signed a "Reconfirmation of Employment" 15 which embodied the new terms and conditions of
their continued employment. Each employee was assisted by Rojas who also signed the document.

On June 15, 2001, respondent resumed its business operations.

On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be local officers of the National Federation of Labor (NFL),
filed a Notice of Mediation 16 before the National Conciliation and Mediation Board (NCMB), Region XI, Davao City. In said Notice, it
was stated that the Union involved was "DARIUS JOVES/DEBBIE PLANAS ET AL., National Federation of Labor." The issue raised in
said Notice was the "Diminution of wages and other benefits through unlawful Memorandum of Agreement."

On August 29, 2002, the NCMB called Joves and respondent to a conference to explore the possibility of settling the conflict. In the
said conference, respondent and petitioner Insular Hotel Employees Union-NFL (IHEU-NFL), represented by Joves, signed a
Submission Agreement 17 wherein they chose AVA Alfredo C. Olvida (AVA Olvida) to act as voluntary arbitrator. Submitted for the
resolution of AVA Olvida was the determination of whether or not there was a diminution of wages and other benefits through an
unlawful MOA. In support of his authority to file the complaint, Joves, assisted by Atty. Danilo Cullo (Cullo), presented several Special
Powers of Attorney (SPA) which were, however, undated and unnotarized.

On September 2, 2002, respondent filed with the NCMB a Manifestation with Motion for a Second Preliminary Conference, 18
raising the following grounds:

1) The persons who filed the instant complaint in the name of the Insular Hotel Employees Union-NFL have no authority to represent
the Union;

2) The individuals who executed the special powers of attorney in favor of the person who filed the instant complaint have no
standing to cause the filing of the instant complaint; and

3) The existence of an intra-union dispute renders the filing of the instant case premature. 19

On September 16, 2002, a second preliminary conference was conducted in the NCMB, where Cullo denied any existence of an intra-
union dispute among the members of the union. Cullo, however, confirmed that the case was filed not by the IHEU-NFL but by the
NFL. When asked to present his authority from NFL, Cullo admitted that the case was, in fact, filed by individual employees named in
the SPAs. The hearing officer directed both parties to elevate the aforementioned issues to AVA Olvida. 20 ACIESH

The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred to AVA Olvida. Respondent again raised its objections,
specifically arguing that the persons who signed the complaint were not the authorized representatives of the Union indicated in the
Submission Agreement nor were they parties to the MOA. AVA Olvida directed respondent to file a formal motion to withdraw its
submission to voluntary arbitration.

On October 16, 2002, respondent filed its Motion to Withdraw. 21 Cullo then filed an Opposition 22 where the same was captioned:

NATIONAL FEDERATION OF LABOR

And 79 Individual Employees, Union Members,
Complainants,

-versus-

Waterfront Insular Hotel Davao,

Respondent.

In said Opposition, Cullo reiterated that the complainants were not representing IHEU-NFL, to wit:

xxx xxx xxx

2. Respondent must have been lost when it said that the individuals who executed the SPA have no standing to represent the union
nor to assail the validity of Memorandum of Agreement (MOA). What is correct is that the individual complainants are not
representing the union but filing the complaint through their appointed attorneys-in-fact to assert their individual rights as workers
who are entitled to the benefits granted by law and stipulated in the collective bargaining agreement. 23

On November 11, 2002, AVA Olvida issued a Resolution 24 denying respondent's Motion to Withdraw. On December 16, 2002,
respondent filed a Motion for Reconsideration 25 where it stressed that the Submission Agreement was void because the Union did
not consent thereto. Respondent pointed out that the Union had not issued any resolution duly authorizing the individual
employees or NFL to file the notice of mediation with the NCMB.

Cullo filed a Comment/Opposition 26 to respondent's Motion for Reconsideration. Again, Cullo admitted that the case was not
initiated by the IHEU-NFL, to wit:

The case was initiated by complainants by filling up Revised Form No. 1 of the NCMB duly furnishing respondent, copy of which is
hereto attached as Annex "A" for reference and consideration of the Honorable Voluntary Arbitrator. There is no mention there of
Insular Hotel Employees Union, but only National Federation of Labor (NFL). The one appearing at the Submission Agreement was
only a matter of filling up the blanks particularly on the question there of Union; which was filled up with Insular Hotel Employees
Union-NFL. There is nothing there that indicates that it is a complainant as the case is initiated by the individual workers and
National Federation of Labor, not by the local union. The local union was not included as party-complainant considering that it was a
party to the assailed MOA. 27
On March 18, 2003, AVA Olvida issued a Resolution 28 denying respondent's Motion for Reconsideration. He, however, ruled that
respondent was correct when it raised its objection to NFL as proper party-complainant, thus: AEHCDa

Anent to the real complainant in this instant voluntary arbitration case, the respondent is correct when it raised objection to the
National Federation of Labor (NFL) and as proper party-complainants.

The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the recognized and incumbent bargaining agent of the
rank-and-file employees of the respondent hotel. In the submission agreement of the parties dated August 29, 2002, the party
complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79 other
members.

However, since the NFL is the mother federation of the local union, and signatory to the existing CBA, it can represent the union, the
officers, the members or union and officers or members, as the case may be, in all stages of proceedings in courts or administrative
bodies provided that the issue of the case will involve labor-management relationship like in the case at bar.

The dispositive portion of the March 18, 2003 Resolution of AVA Olvida reads:

WHEREFORE, premises considered, the motion for reconsideration filed by respondent is DENIED. The resolution dated November
11, 2002 is modified in so far as the party-complainant is concerned; thus, instead of "National Federation of Labor and 79 individual
employees, union members," shall be "Insular Hotel Employees Union-NFL et al., as stated in the joint submission agreement dated
August 29, 2002. Respondent is directed to comply with the decision of this Arbitrator dated November 11, 2002,

No further motion of the same nature shall be entertained. 29

On May 9, 2003, respondent filed its Position Paper Ad Cautelam, 30 where it declared, among others, that the same was without
prejudice to its earlier objections against the jurisdiction of the NCMB and AVA Olvida and the standing of the persons who filed the
notice of mediation.

Cullo, now using the caption "Insular Hotel Employees Union-NFL, Complainant," filed a Comment 31 dated June 5, 2003. On June
23, 2003, respondent filed its Reply. 32

Later, respondent filed a Motion for Inhibition 33 alleging AVA Olvida's bias and prejudice towards the cause of the employees. In an
Order 34 dated July 25, 2003, AVA Olvida voluntarily inhibited himself out of "delicadeza" and ordered the remand of the case to the
NCMB.

On August 12, 2003, the NCMB issued a Notice requiring the parties to appear before the conciliator for the selection of a new
voluntary arbitrator.

In a letter 35 dated August 19, 2003 addressed to the NCMB, respondent reiterated its position that the individual union members
have no standing to file the notice of mediation before the NCMB. Respondent stressed that the complaint should have been filed by
the Union. cEaDTA

On September 12, 2003, the NCMB sent both parties a Notice 36 asking them to appear before it for the selection of the new
voluntary arbitrator. Respondent, however, maintained its stand that the NCMB had no jurisdiction over the case. Consequently, at
the instance of Cullo, the NCMB approved ex parte the selection of AVA Montejo as the new voluntary arbitrator.

On April 5, 2004, AVA Montejo rendered a Decision 37 ruling in favor of Cullo, the dispositive portion of which reads:

WHEREOF, in view of the all the foregoing, judgment is hereby rendered:

1. Declaring the Memorandum of Agreement in question as invalid as it is contrary to law and public policy;

2. Declaring that there is a diminution of the wages and other benefits of the Union members and officers under the said invalid
MOA.

3. Ordering respondent management to immediately reinstate the workers wage rates and other benefits that they were receiving
and enjoying before the signing of the invalid MOA;
4. Ordering the management respondent to pay attorney's fees in an amount equivalent to ten percent (10%) of whatever total
amount that the workers union may receive representing individual wage differentials.

As to the other claims of the Union regarding diminution of other benefits, this accredited voluntary arbitrator is of the opinion that
she has no authority to entertain, particularly as to the computation thereof.

SO ORDERED. 38

Both parties appealed the Decision of AVA Montejo to the CA. Cullo only assailed the Decision in so far as it did not categorically
order respondent to pay the covered workers their differentials in wages reckoned from the effectivity of the MOA up to the actual
reinstatement of the reduced wages and benefits. Cullos' petition was docketed as CA-G.R. SP No. 83831. Respondent, for its part,
questioned among others the jurisdiction of the NCMB. Respondent maintained that the MOA it had entered into with the officers of
the Union was valid. Respondent's petition was docketed as CA-G.R. SP No. 83657. Both cases were consolidated by the CA. STDEcA

On October 11, 2005, the CA rendered a Decision 39 ruling in favor of respondent, the dispositive portion of which reads:

WHEREFORE, premises considered, the petition for review in CA-G.R. SP No. 83657 is hereby GRANTED, while the petition in CA-G.R.
SP No. 83831 is DENIED. Consequently, the assailed Decision dated April 5, 2004 rendered by AVA Rosalina L. Montejo is hereby
REVERSED and a new one entered declaring the Memorandum of Agreement dated May 8, 2001 VALID and ENFORCEABLE. Parties
are DIRECTED to comply with the terms and conditions thereof.

SO ORDERED. 40

Aggrieved, Cullo filed a Motion for Reconsideration, which was, however, denied by the CA in a Resolution 41 dated July 13, 2006.

Hence, herein petition, with Cullo raising the following issues for this Court's resolution, to wit:

I.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN FINDING THAT THE ACCREDITED
VOLUNTARY ARBITRATOR HAS NO JURISDICTION OVER THE CASE SIMPLY BECAUSE THE NOTICE OF MEDIATION DOES NOT MENTION
THE NAME OF THE LOCAL UNION BUT ONLY THE AFFILIATE FEDERATION THEREBY DISREGARDING THE SUBMISSION AGREEMENT
DULY SIGNED BY THE PARTIES AND THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF THE LOCAL UNION.

II.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR BY DISREGARDING THE PROVISIONS OF THE
CBA SIMPLY BECAUSE IT BELIEVED THE UNPROVEN ALLEGATIONS OF RESPONDENT HOTEL THAT IT WAS SUFFERING FROM
FINANCIAL CRISIS.

III.

THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY ERRED IN CONCLUDING THAT ARTICLE 100 OF THE LABOR CODE
APPLIES ONLY TO BENEFITS ENJOYED PRIOR TO THE ADOPTION OF THE LABOR CODE WHICH, IN EFFECT, ALLOWS THE DIMINUTION
OF THE BENEFITS ENJOYED BY EMPLOYEES FROM ITS ADOPTION HENCEFORTH. 42

The petition is not meritorious.

Anent the first error raised, Cullo argues that the CA erred when it overlooked the fact that before the case was submitted to
voluntary arbitration, the parties signed a Submission Agreement which mentioned the name of the local union and not only NFL.
Cullo, thus, contends that the CA committed error when it ruled that the voluntary arbitrator had no jurisdiction over the case simply
because the Notice of Mediation did not state the name of the local union thereby disregarding the Submission Agreement which
states the names of local union as Insular Hotel Employees Union-NFL. 43 HEDSIc

In its Memorandum, 44 respondent maintains its position that the NCMB and Voluntary Arbitrators had no jurisdiction over the
complaint. Respondent, however, now also contends that IHEU-NFL is a non-entity since it is DIHFEU-NFL which is considered by the
DOLE as the only registered union in Waterfront Davao. 45 Respondent argues that the Submission Agreement does not name the
local union DIHFEU-NFL and that it had timely withdrawn its consent to arbitrate by filing a motion to withdraw.
A review of the development of the case shows that there has been much confusion as to the identity of the party which filed the
case against respondent. In the Notice of Mediation 46 filed before the NCMB, it stated that the union involved was "DARIUS
JOVES/DEBBIE PLANAS ET AL., National Federation of Labor." In the Submission Agreement, 47 however, it stated that the union
involved was "INSULAR HOTEL EMPLOYEES UNION-NFL."

Furthermore, a perusal of the records would reveal that after signing the Submission Agreement, respondent persistently
questioned the authority and standing of the individual employees to file the complaint. Cullo then clarified in subsequent
documents captioned as "National Federation of Labor and 79 Individual Employees, Union Members, Complainants" that the
individual complainants are not representing the union, but filing the complaint through their appointed attorneys-in-fact. 48 AVA
Olvida, however, in a Resolution dated March 18, 2003, agreed with respondent that the proper party-complainant should be
INSULAR HOTEL EMPLOYEES UNION-NFL, to wit:

. . . In the submission agreement of the parties dated August 29, 2002, the party complainant written is INSULAR HOTEL EMPLOYEES
UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79 other members. 49

The dispositive portion of the Resolution dated March 18, 2003 of AVA Olvida reads:

WHEREFORE, premises considered, the motion for reconsideration filed by respondent is DENIED. The resolution dated November
11, 2002, is modified in so far as the party complainant is concerned, thus, instead of "National Federation of Labor and 79 individual
employees, union members," shall be "Insular Hotel Employees Union-NFL et al., as stated in the joint submission agreement dated
August 29, 2002. Respondent is directed to comply with the decision of this Arbitrator dated November 11, 2002. 50

After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted "Insular Hotel Employees Union-NFL et al., Complainant" as the
caption in all his subsequent pleadings. Respondent, however, was still adamant that neither Cullo nor the individual employees had
authority to file the case in behalf of the Union.

While it is undisputed that a submission agreement was signed by respondent and "IHEU-NFL," then represented by Joves and Cullo,
this Court finds that there are two circumstances which affect its validity: first, the Notice of Mediation was filed by a party who had
no authority to do so; second, that respondent had persistently voiced out its objection questioning the authority of Joves, Cullo and
the individual members of the Union to file the complaint before the NCMB.

Procedurally, the first step to submit a case for mediation is to file a notice of preventive mediation with the NCMB. It is only after
this step that a submission agreement may be entered into by the parties concerned.

Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive mediation, to wit: TDcAIH

Who may file a notice or declare a strike or lockout or request preventive mediation. —

Any certified or duly recognized bargaining representative may file a notice or declare a strike or request for preventive mediation in
cases of bargaining deadlocks and unfair labor practices. The employer may file a notice or declare a lockout or request for
preventive mediation in the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate
labor organization in the establishment may file a notice, request preventive mediation or declare a strike, but only on grounds of
unfair labor practice.

From the foregoing, it is clear that only a certified or duly recognized bargaining agent may file a notice or request for preventive
mediation. It is curious that even Cullo himself admitted, in a number of pleadings, that the case was filed not by the Union but by
individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the notice filed before it.

Even though respondent signed a Submission Agreement, it had, however, immediately manifested its desire to withdraw from the
proceedings after it became apparent that the Union had no part in the complaint. As a matter of fact, only four days had lapsed
after the signing of the Submission Agreement when respondent called the attention of AVA Olvida in a "Manifestation with Motion
for a Second Preliminary Conference" 51 that the persons who filed the instant complaint in the name of Insular Hotel Employees
Union-NFL had no authority to represent the Union. Respondent cannot be estopped in raising the jurisdictional issue, because it is
basic that the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by
estoppel.

In Figueroa v. People, 52 this Court explained that estoppel is the exception rather than the rule, to wit:
Applying the said doctrine to the instant case, the petitioner is in no way estopped by laches in assailing the jurisdiction of the RTC,
considering that he raised the lack thereof in his appeal before the appellate court. At that time, no considerable period had yet
elapsed for laches to attach. True, delay alone, though unreasonable, will not sustain the defense of "estoppel by laches" unless it
further appears that the party, knowing his rights, has not sought to enforce them until the condition of the party pleading laches
has in good faith become so changed that he cannot be restored to his former state, if the rights be then enforced, due to loss of
evidence, change of title, intervention of equities, and other causes. In applying the principle of estoppel by laches in the exceptional
case of Sibonghanoy, the Court therein considered the patent and revolting inequity and unfairness of having the judgment creditors
go up their Calvary once more after more or less 15 years. The same, however, does not obtain in the instant case.

We note at this point that estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied rarely — only from
necessity, and only in extraordinary circumstances. The doctrine must be applied with great care and the equity must be strong in its
favor. When misapplied, the doctrine of estoppel may be a most effective weapon for the accomplishment of injustice. . . . (Italics
supplied.) 53

The question to be resolved then is, do the individual members of the Union have the requisite standing to question the MOA before
the NCMB? On this note, Tabigue v. International Copra Export Corporation (INTERCO) 54 is instructive:

Respecting petitioners' thesis that unsettled grievances should be referred to voluntary arbitration as called for in the CBA, the same
does not lie. The pertinent portion of the CBA reads: TcDAHS

In case of any dispute arising from the interpretation or implementation of this Agreement or any matter affecting the relations of
Labor and Management, the UNION and the COMPANY agree to exhaust all possibilities of conciliation through the grievance
machinery. The committee shall resolve all problems submitted to it within fifteen (15) days after the problems ha[ve] been
discussed by the members. If the dispute or grievance cannot be settled by the Committee, or if the committee failed to act on the
matter within the period of fifteen (15) days herein stipulated, the UNION and the COMPANY agree to submit the issue to Voluntary
Arbitration. Selection of the arbitrator shall be made within seven (7) days from the date of notification by the aggrieved party. The
Arbitrator shall be selected by lottery from four (4) qualified individuals nominated by in equal numbers by both parties taken from
the list of Arbitrators prepared by the National Conciliation and Mediation Board (NCMB). If the Company and the Union
representatives within ten (10) days fail to agree on the Arbitrator, the NCMB shall name the Arbitrator. The decision of the
Arbitrator shall be final and binding upon the parties. However, the Arbitrator shall not have the authority to change any provisions
of the Agreement. The cost of arbitration shall be borne equally by the parties.

Petitioners have not, however, been duly authorized to represent the union. Apropos is this Court's pronouncement in Atlas Farms,
Inc. v. National Labor Relations Commission, viz.:

. . . Pursuant to Article 260 of the Labor Code,the parties to a CBA shall name or designate their respective representatives to the
grievance machinery and if the grievance is unsettled in that level, it shall automatically be referred to the voluntary arbitrators
designated in advance by parties to a CBA. Consequently, only disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators. (Emphasis and underscoring supplied.) 55 HEDCAS

If the individual members of the Union have no authority to file the case, does the federation to which the local union is affiliated
have the standing to do so? On this note, Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment 56 is
enlightening, thus:

. . . A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality,
neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of
agency, where the former acts in representation of the latter. Hence, local unions are considered principals while the federation is
deemed to be merely their agent. . . . 57

Based on the foregoing, this Court agrees with approval with the disquisition of the CA when it ruled that NFL had no authority to file
the complaint in behalf of the individual employees, to wit:

Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction over the case. Waterfront contents that the Notice of
Mediation does not mention the name of the Union but merely referred to the National Federation of Labor (NFL) with which the
Union is affiliated. In the subsequent pleadings, NFL's legal counsel even confirmed that the case was not filed by the union but by
NFL and the individual employees named in the SPAs which were not even dated nor notarized.
Even granting that petitioner Union was affiliated with NFL, still the relationship between that of the local union and the labor
federation or national union with which the former was affiliated is generally understood to be that of agency, where the local is the
principal and the federation the agency. Being merely an agent of the local union, NFL should have presented its authority to file the
Notice of Mediation. While We commend NFL's zealousness in protecting the rights of lowly workers, We cannot, however, allow it
to go beyond what it is empowered to do.

As provided under the NCMB Manual of Procedures, only a certified or duly recognized bargaining representative and an employer
may file a notice of mediation, declare a strike or lockout or request preventive mediation. The Collective Bargaining Agreement
(CBA), on the other, recognizes that DIHFEU-NFL is the exclusive bargaining representative of all permanent employees. The
inclusion of the word "NFL" after the name of the local union merely stresses that the local union is NFL's affiliate. It does not,
however, mean that the local union cannot stand on its own. The local union owes its creation and continued existence to the will of
its members and not to the federation to which it belongs. The spring cannot rise higher than its source, so to speak. 58

In its Memorandum, respondent contends that IHEU-NFL is a non-entity and that DIHFEU-NFL is the only recognized bargaining unit
in their establishment. While the resolution of the said argument is already moot and academic given the discussion above, this
Court shall address the same nevertheless.

While the November 16, 2006 Certification 59 of the DOLE clearly states that "IHEU-NFL" is not a registered labor organization, this
Court finds that respondent is estopped from questioning the same as it did not raise the said issue in the proceedings before the
NCMB and the Voluntary Arbitrators. A perusal of the records reveals that the main theory posed by respondent was whether or not
the individual employees had the authority to file the complaint notwithstanding the apparent non-participation of the union.
Respondent never put in issue the fact that DIHFEU-NFL was not the same as IHEU-NFL. Consequently, it is already too late in the
day to assert the same. HCDAac

Anent the second issue raised by Cullo, the same is again without merit.

Cullo contends that respondent was not really suffering from serious losses as found by the CA. Cullo anchors his position on the
denial by the Wage Board of respondent's petition for exemption from Wage Order No. RTWPB-X1-08 on the ground that it is a
distressed establishment. 60 In said denial, the Board ruled:

A careful analysis of applicant's audited financial statements showed that during the period ending December 31, 1999, it registered
retained earnings amounting to P8,661,260.00. Applicant's interim financial statements for the quarter ending June 30, 2000 cannot
be considered, as the same was not audited. Accordingly, this Board finds that applicant is not qualified for exemption as a
distressed establishment pursuant to the aforecited criteria. 61

In its Decision, the CA held that upholding the validity of the MOA would mean the continuance of the hotel's operation and financial
viability, to wit:

. . . We cannot close Our eyes to the impending financial distress that an employer may suffer should the terms of employment
under the said CBA continue.

If indeed We are to tilt the balance of justice to labor, then We would be inclined to favor for the nonce petitioner Waterfront. To
uphold the validity of the MOA would mean the continuance of the hotel's operation and financial viability. Otherwise, the eventual
permanent closure of the hotel would only result to prejudice of the employees, as a consequence thereof, will necessarily lose their
jobs. 62

In its petition before the CA, respondent submitted its audited financial statements 63 which show that for the years 1998, 1999,
until September 30, 2000, its total operating losses amounted to P48,409,385.00. Based on the foregoing, the CA was not without
basis when it declared that respondent was suffering from impending financial distress. While the Wage Board denied respondent's
petition for exemption, this Court notes that the denial was partly due to the fact that the June 2000 financial statements then
submitted by respondent were not audited. Cullo did not question nor discredit the accuracy and authenticity of respondent's
audited financial statements. This Court, therefore, has no reason to question the veracity of the contents thereof. Moreover, it
bears to point out that respondent's audited financial statements covering the years 2001 to 2005 show that it still continues to
suffer losses. 64

Finally, anent the last issue raised by Cullo, the same is without merit.

Cullo argues that the CA must have erred in concluding that Article 100 of the Labor Code applies only to benefits already enjoyed at
the time of the promulgation of the Labor Code.
Article 100 of the Labor Code provides:

PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS — Nothing in this Book shall be construed to eliminate or in any
way diminish supplements, or other employee benefits being enjoyed at the time of the promulgation of this Code.

On this note, Apex Mining Company, Inc. v. NLRC 65 is instructive, to wit:

Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the Labor Code is specifically concerned
with benefits already enjoyed at the time of the promulgation of the Labor Code.Article 100 does not, in other words, purport to
apply to situations arising after the promulgation date of the Labor Code . . . . 66

Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees with respondent that the same does not
prohibit a union from offering and agreeing to reduce wages and benefits of the employees. In Rivera v. Espiritu, 67 this Court ruled
that the right to free collective bargaining, after all, includes the right to suspend it, thus:

A CBA is "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." The primary purpose of a CBA is the
stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace. In construing a CBA,
the courts must be practical and realistic and give due consideration to the context in which it is negotiated and the purpose which it
is intended to serve.

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. EICScD

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. 68

Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's Constitution and By-Laws specifically provides that "the results of
the collective bargaining negotiations shall be subject to ratification and approval by majority vote of the Union members at a
meeting convened, or by plebiscite held for such special purpose." 69 Accordingly, it is undisputed that the MOA was not subject to
ratification by the general membership of the Union. The question to be resolved then is, does the non-ratification of the MOA in
accordance with the Union's constitution prove fatal to the validity thereof?

It must be remembered that after the MOA was signed, the members of the Union individually signed contracts denominated as
"Reconfirmation of Employment." 70 Cullo did not dispute the fact that of the 87 members of the Union, who signed and accepted
the "Reconfirmation of Employment," 71 are the respondent employees in the case at bar. Moreover, it bears to stress that all the
employees were assisted by Rojas, DIHFEU-NFL's president, who even co-signed each contract.

Stipulated in each Reconfirmation of Employment were the new salary and benefits scheme. In addition, it bears to stress that
specific provisions of the new contract also made reference to the MOA. Thus, the individual members of the union cannot feign
knowledge of the execution of the MOA. Each contract was freely entered into and there is no indication that the same was
attended by fraud, misrepresentation or duress. To this Court's mind, the signing of the individual "Reconfirmation of Employment"
should, therefore, be deemed an implied ratification by the Union members of the MOA.

In Planters Products, Inc. v. NLRC, 71 this Court refrained from declaring a CBA invalid notwithstanding that the same was not
ratified in view of the fact that the employees had enjoyed benefits under it, thus:

Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing Rules, the parties to a collective [bargaining]
agreement are required to furnish copies of the appropriate Regional Office with accompanying proof of ratification by the majority
of all the workers in a bargaining unit. This was not done in the case at bar. But we do not declare the 1984-1987 CBA invalid or void
considering that the employees have enjoyed benefits from it. They cannot receive benefits under provisions favorable to them and
later insist that the CBA is void simply because other provisions turn out not to the liking of certain employees. . . . . Moreover, the
two CBAs prior to the 1984-1987 CBA were not also formally ratified, yet the employees are basing their present claims on these
CBAs. It is iniquitous to receive benefits from a CBA and later on disclaim its validity. 72

Applied to the case at bar, while the terms of the MOA undoubtedly reduced the salaries and certain benefits previously enjoyed by
the members of the Union, it cannot escape this Court's attention that it was the execution of the MOA which paved the way for the
re-opening of the hotel, notwithstanding its financial distress. More importantly, the execution of the MOA allowed respondents to
keep their jobs. It would certainly be iniquitous for the members of the Union to sign new contracts prompting the re-opening of the
hotel only to later on renege on their agreement on the fact of the non-ratification of the MOA.

In addition, it bears to point out that Rojas did not act unilaterally when he negotiated with respondent's management. The
Constitution and By-Laws of DIHFEU-NFL clearly provide that the president is authorized to represent the union on all occasions and
in all matters in which representation of the union may be agreed or required. 73 Furthermore, Rojas was properly authorized under
a Board of Directors Resolution 74 to negotiate with respondent, the pertinent portions of which read:

SECRETARY's CERTIFICATE

I, MA. SOCORRO LISETTE B. IBARRA, . . ., do hereby certify that, at a meeting of the Board of Directors of the DIHFEU-NFL, on 28 Feb.
2001 with a quorum duly constituted, the following resolutions were unanimously approved:

RESOLVED, as it is hereby resolved that the Manifesto dated 25 Feb. 2001 be approved ratified and adopted; ScaATD

RESOLVED, FURTHER, that Mr. Domy R. Rojas, the president of the DIHFEU-NFL, be hereby authorized to negotiate with Waterfront
Insular Hotel Davao and to work for the latter's acceptance of the proposals contained in DIHFEU-NFL Manifesto; and

RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized to sign any and all documents to implement, and carry into effect,
his foregoing authority. 75

Withal, while the scales of justice usually tilt in favor of labor, the peculiar circumstances herein prevent this Court from applying the
same in the instant petition. Even if our laws endeavor to give life to the constitutional policy on social justice and on the protection
of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management
has rights which are also entitled to respect and enforcement in the interest of fair play. 76

WHEREFORE, premises considered, the petition is DENIED. The Decision dated October 11, 2005, and the Resolution dated July 13,
2006 of the Court of Appeals in consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657, are
AFFIRMED.

SO ORDERED.