KIOK LOY v. NATIONAL LABOR RELATIONS COMMISSION et al.

G.R. No. L-54334, 22 January, 1986, SECOND DIVISION, (Cuevas, J.)

DOCTRINE OF THE CASE

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 impunity to resort to schemes feigning negotiations by

going through empty gestures.

FACTS

The Union filed a PCE to which it won as the SEBA for the rank and file EEs of

petitioner Company. The Union furnished the company with copies of its proposed

collective bargaining agreement and requested the Company to submit its counter

proposals. After several requests, the Company still did not submit its counter proposal.

Upon compulsory arbitration, petitioner delayed the proceedings several times to which

the NLRC rendered a decision declaring petitioner of ULP. Furthermore, the NLRC,

imposed the proposed CBA by respondent Union to Company.

ISSUE

WON the imposition of the CBA of respondent Union against Company is valid?

RULING

YES. Petitioner is guilty of ULP. It was established that the Union was the SEBA,

and that it had made a definite request to bargain, which was accompanied by the

imposed CBA, and that the Company made no counter proposal whatsoever which
indicates the lack of sincere desire to negotiate. The Company’s approach and attitude,

by stalling the negotiation by a series of postponements, non-appearance in hearings

lead to the conclusion that it is unwilling to negotiate with respondent Union.

DIVINE WORD UNIVERSITY OF TACLOBAN v. THE SECRETARY OF LABOR AND

EMPLOYMENT et al.

G.R. No. 91915, 11 September, 1992, THIRD DIVISION, (Romero, J.)

DOCTRINE OF THE CASE

A company’s refusal to make a 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.

FACTS

Respondent Union was declared as the SEBA of petitioner University. The Union

submitted its proposed CBA. However, despite the numerous follow up letters, the

University persisted in ignoring the Union. The SOLE then rendered a decision, and

imposed the proposed CBA against the University. Petitioner then claims that they were

deprived of due process because of the said decision, and that the imposed CBA is

untenable because of the lack of consent or agreement of petitioner.

ISSUE

WON the imposition of the SOLE is valid?

RULING

YES. Based on a thorough examination on the facts of the case, there was no

reasonable effort at good faith bargaining specifically 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.

 The Court is also not inclined to rule that there has been a deadlock or an

impasse in the collective bargaining process. There has been no reasonable effort at

good faith bargaining on the part of the University. While the Union was opening all

possibilities for the conclusion of an agreement, the record is replete with evidence of

the University’s reluctance to bargain with the Union. While the Court recognizes that

technically the University has a right to file a PCE, as there was no bargaining deadlock

to speak of, to grant its prayer that the order of the SOLE to be annulled would put an

unjustified premium on bad faith bargaining.

Petitioner may not validly assert that its consent should be a primordial

consideration in the bargaining process. By its acts, not less than its inaction which

bespeak its insincerity, it has forfeited whatever rights it could have asserted as an ER.
 GENERAL MILLING CORPORATION v. HONORABLE COURT OF APPEALS et al.

G.R. No. 146728, 11 February, 2004, SECOND DIVISION, (Quisumbing, J.)

DOCTRINE OF THE CASE

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 impunity to resort to schemes feigning negotiations by

going through empty gestures.

FACTS

Petitioner Corporation concluded a CBA with respondent Union. Upon the

expiration of the CBA, the Union sent to petitioner its proposed CBA with the request of

the latter’s counter proposal. Petitioner Corporation stated that it had no reason to

bargain with a union that is no longer existing due to alleged disaffiliation of its

members. Respondent Union filed before the NLRC alleging that petitioner is guilty of

ULP for refusal to bargain collectively. A decision was rendered finding petitioner guilty

of ULP and that the proposed CBA of the Union be imposed on the former.

ISSUE

WON the decision rendered finding petitioner guilty of ULP and imposing the

proposed CBA of the respondent valid?

RULING

YES. Pursuant to RA No. 6715, the representational provision of the CBA is

extended to 5 years. Thus, in the case at bar, the Union has 2 remaining years as the
SEBA. Moreover, it negotiated the economic provisions of the CBA through a new

proposed one on the third year. Petitioners refusal to send a counter proposal

constitutes unfair labor practice under Article 248 of the Labor Code.

Pursuant to Article 252 of the Labor Code, both parties must comply with the

mandatory duty to bargain, which involves bargaining in good faith. Determination of

good faith has not one size fits all test, but it depends on the facts of each case. In the

case at bar, the Union lived up to its obligation when it presented proposals for a new

CBA within 3 years, wherein petitioner failed to comply with such duties. The Court

holds that petitioner’s refusal to make a counter proposal for the union’s proposal is an

indication of bad faith.

More so, citing Article 253 of the Labor Code, the said provision maintains to

keep the status quo while the parties are still working on the respective proposal or

counter proposal. The general rule is when a CBA already exists, its provision shall

continue to govern the relationship between the parties until a new one is agreed upon.

The rule necessarily presupposes that all other things are equal. That neither party is

guilty of bad faith. However, when one of the parties abuses the grace period by

purposely delaying the bargaining process, the departure from the general rule is

warranted.

Applying the decisions in Kiok Loy, and Divine Word University, it would be unfair

to the respondent Union if the terms of the old CBA would continue to be imposed for

the remaining two years. The Court is not inclined to gratify petitioner with an extended

term of the old CBA after it resorted to delaying tactics to prevent negotiations. Since
petitioner violated the duty to bargain it losses its statutory right to negotiate or

renegotiate the terms and conditions of the proposed CBA by the Union.

Although, there was no pre-existing CBA in the case of Kiok Loy and Divine

Word University, the Court applies the rationale of both cases and impose the proposed

the CBA of the Union because to grant Petitioner’s argument leads to the justification of

his bad faith bargaining.

 SAN MIGUEL CORPORATION UNION-PGTWO et al. v. HONORABLE MA. NIEVES

D. CONFESOR

G.R. No. 111262, 19 September, 1996, FIRST DIVISION, (Kapunan, J.)

DOCTRINE OF THE CASE

However, it circumstances would warrant that the contract duration which

it is soliciting from the company for the benefit of the workers, shall be a little bit

longer than its lifespan, then this Office cannot stand in the way of a more ideal

situation. We must not lose sight of the fact that the primordial purpose of the

collective contract is to promote industrial harmony and stability in the terms and

conditions of employment.

FACTS

In 1988, Petitioner Union entered into a CBA with private respondent Company

where the non-representational provisions of the Agreement will expire in 1992. In 1991,

the CBA was re-negotiated. Petitioner argues that the non-representational provision

(economic) should coincide with the remaining 2 years of the representational provision

of the CBA. Company then argues that the economic provisions should be fixed at 3

years. More so, petitioner argues that the EEs of Magnonila-SMC and SMCFI should be
included in the coverage of the CBA despite the separations of the two branches into

two corporations.

ISSUE

WON the non-representational (economic) provisions should be fixed to coincide

with the remaining 2 years of the representational aspect?

RULING

NO. Based from the history of the times and the state of things when the RA No.

6715 was adopted, the law makers made it clear that they did not provide for a fixed

term of the economic provisions of a CBA. In fixing the terms of the non-

representational aspect of the CBA, it is up to the parties of the Agreement to fix the

term. The rationale for such ruling is in keeping with the purpose of the collective

contract itself, which is to foster industrial peace. Therefore, the non-representational

provision of the CBA may coincide with the remaining 2 years of the representational

provision. However, if circumstance warrant that the duration of the non-representation

provision is a little bit longer than the representational provision, the State nor the office

of the SOLE cannot stand in the way of such an ideal position.

As to the inclusion of the Magnolia and SMCFI, the Court ruled that the

concerned groups cannot be part of the same bargaining unit as that represented of the

Union. Applying the mutuality of interest test, the concerned parties and the EEs

represented by petitioner union do not have the same interest. In fact their nature of

work demands different skills which must be commensurate with different compensation
packages. With the different of interest, it is better that if the concerned parties formed a

union of their own to represent their interest.

MANILA ELECTRIC COMPANY v. HONORABLE SECRETARY OF LABOR

LEONARDO QUISUMBING et al.

G.R. No. 127598, 1 August, 2000, SPECIAL FIRST DIVISION, (Ynares-Santiago, J.)

FACTS

Petitioner assails the decision rendered by the Supreme which declared that in

an absence of an agreement between the parties, an arbitrated CBA takes on the

nature of any judicial or quasi-award. Moreover, The decision was flawed since it held

that the award shall retroact on the first after the six month period following on the

expiration on the CBA, the reckoning day should be June 1, 1996, and not December 1,

1995, wherein the latter is the last day of the three year lifetime of the economic

provision of the CBA. Respondent argues that that modification sought by petitioner is

unauthorized since the management already stated that they will comply with the order

rendered by the Supreme Court.

RULING

In resolving in the affirmative the modification sought by the petitioner. The Court

took into account the fact that petitioner belongs to an industry imbued with public

interest. The Court cannot ignore the enourmous cost that petitioner will have to bear as
a consequence of the full retroaction of the CBA to the date of the expiry of the CBA an

its inevitable effect on the economy. On the other hand, under the policy of social

justice, the law bends to accommodate the interests of workers. Balancing this two

interests, the Court turned to the dictates of fairness and equitable justice. The Court

held that the arbitral award be made to retroact to the first day after the six month period

following the expiration of the CBA. The court maintains the foregoing rule in the

Resolution as pro hac vice.

NOTES:

In the case of Union of Filipro EEs, the Court held that act of the NRLC of

giving prospective effect to the CBA. Pursuant to Article 253-A of the Labor Code,

since the incorporated CBA was signed outside of the 6 month period, the parties

must agree on its retroactivity. But since there is no agreement, the SOLE did not

abuse its power when it gave the CBA a prospective effect

In St. Lukes Medical Center v. Torres, it held that the SOLE has plenary and

discretionary powers to determine the effectivity of the arbitral awards. In the absence of

a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards

issued by the SOLE, he is deemed vested with plenary and discretionary powers to

determine the effectivity. Hence, the SOLE adopted that the CBA be in retroactive

application.