Voluntary Arbitration

[San Miguel Corp vs NLRC]

• SECTION 1. Grounds for strike and lockout. — A strike or lockout may be declared in cases of bargaining deadlocks
and unfair labor practices. Violations of the collective bargaining agreements, except flagrant and/or malicious
refusal to comply with its economic provisions, shall not be considered unfair labor practice and shall not be
strikeable. No strike or lockout may be declared on grounds involving inter-union and intra-union disputes or on
issues brought to voluntary or compulsory arbitration
- The definition of strike is any temporary stoppage of work by the concerted action of employees as a result of
an industrial or labor dispute. While the definition of lockout is the temporary refusal of an employer to furnish
work as a result of an industrial or labor dispute. The industrial or labor dispute being referred to here, includes
any controversy or matter concerning terms & conditions of employment or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms & conditions of employment.
• Voluntary arbitration
- Voluntary Arbitration is defined as “the mode of settling labor-management disputes by which the parties select
a competent, trained, and impartial person who shall decide on the merits of the case and whose decision is
final, executory, and binding
- As stated in Section 8, Article VIII of the parties’ 1990 Collective Bargaining Agreement, “If the employee or
Union is not satisfied with the Decision of the Conciliation Board and desires to submit the grievance to
arbitration, the employee or the Union shall serve notice of such intention to the Company within fifteen (15)
working days after receipt of the Board’s decision. If no such written notice is received by the Company within
fifteen (15) working days, the grievance shall be considered settled on the basis of the company’s position and
shall no longer be available for arbitration.
• Collective Bargaining Deadlock is defined as "the situation between the labor and the management of the company
where there is failure in the collective bargaining negotiations resulting in a "stalemate."
• A notice of strike should be dismissed if there is failure to exhaust all the steps in the grievance machinery/arbitration
proceedings provided in the Collective Bargaining Agreement.
• Grievance procedure
- the main purpose of the parties in adopting a procedure in the settlement of their disputes is to prevent a strike.
This procedure must be followed in its entirety if it is to achieve its objective . . . strikes held in violation of the
terms contained in the collective bargaining agreement are illegal, specially when they provide for conclusive
arbitration clauses. These agreements must be strictly adhered to and respected if their ends have to be
achieved .
- The grievance procedure is the series of formal steps in a collective bargaining agreement the parties agreed
upon to take for the adjustment of grievances or questions from the interpretation or implementation of the CBA
or company personnel policies wherein the terminal step is voluntary arbitration.
- The grievance procedure gives the parties a first attempt to address the issues in the CBA administration and
it must be conducted before a voluntary arbitrator can take over the unresolved grievance. It is commonly a
multi-step process that begins with a discussion of the grievance between the employee and/or the Union
Steward on one side and the foreman and supervisor on the other hand, and ends with the highest decision-
making company’s officials, representing the hierarchy of command or responsibility.
- the grievance procedure is an appellate procedure that must be included in the provision of every collective
bargaining agreement. It is that part of the agreement that establishes a peaceful way of solving disagreements
and misunderstandings between the parties.
No strike/no lockout clause

[Guagua National Colleges vs Guagua National Colleges Faculty Labor Union]

• Guagua National Colleges entered into a CBA with Guagua National Colleges Faculty Labor Union and Guagua
National Colleges Non-Teaching and Maintenance Labor Union, which had a no-strike, no lock-out clause
• As their CBA is about to expire, both union’s president informed the president of GNC of their intention to open the
negotiation for the renewal of the existing CBA.
• Unions stressed that they were bargaining in good faith and GNC is not. Both unions asked GNC if they wanted a
third party to assist them in threshing out their differences, but GNC did not reply, so unions filed a preventive
mediation case with the NCMB.
• Both unions also alleged that both parties had agreed on the details regarding the grant of signing bonus, but during
the scheduled meeting, no representative of GNC appeared so they were constrained to file a notice of strike
• GNC then filed a motion to strike out the notice of strike and to refer the dispute to voluntary arbitration and grievance
machinery pursuant to the CBA. According to GNC, it invoked the "no-strike, no lock-out" clause and the grievance
machinery and voluntary arbitration provision of the parties' existing CBA
• it is the declared policy of the State to promote and emphasize the primacy of voluntary arbitration as a mode of
settling labor or industrial disputes
• ARTICLE 252. Meaning of duty to bargain collectively.
- The duty to bargain collectively means the performance of a mutual obligation to satisfy and convene
promptly and expeditiously in straightness for the aim of negotiating an agreement with relevancy wages,
hours of labor and every one other terms and conditions of employment including proposals for adjusting
any grievances or questions arising under such agreements and executing a contract incorporating such
agreements if requested by either party but such duty doesn't compel any party to comply with a proposal
or to create any agreement.
• GNC failed to comply with the mandatory requirement of serving a reply/counter-proposal within 10 calendar days
from receipt of a proposal, a fact which by itself is already a sign of lack of genuine interest to bargain
• It merely went through the motions of negotiations then entered into an agreement with respondents which clad to
be an empty one since it later denounced the identical by submitting a reply/counter-proposal
• Indeed, the parties through their CBA, agreed to a "no-strike, no lock-out" policy and to resolve their disputes
through grievance machinery and voluntary arbitration. Despite these, respondents were justified in filing a notice
of strike in light of the facts of this case.
• No strike, no lockout clause may only be invoked in case the strike or lockout involves that are economic in nature.
Economic, in the sense that the basis for staging of strike or lockout is force wage or other agreements from the
employer that are not mandated or granted by any law. The “no strike no lockout” clause is INAPPLICABLE to
prevent a strike or lockout which is grounded on ULP or unfair labor practice
• The facts of the case revealed that what primarily impelled them to file said notice was their perception of bad faith
bargaining and violation of the duty to bargain collectively by GNC, charges which constitute unfair labor practice
under Article 248(g) of the Labor Code.

Union Dues and Agency Fees

[Palacol vs Calleja]

• Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to Article 222(b) of the
Labor Code.
• ART. 222. Appearances and Fees
- (b) No attorney’s fees, negotiation fees or similar charges of any kind arising from any collective bargaining
negotiations or conclusion of the collective agreement shall be imposed on any individual member of the
contracting union; Provided, however, that attorney’s fees may be charged against union funds in an amount
 to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be
null and void.
• ART. 241. Rights and conditions of membership in a labor organization.
- (o) Other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation
fees or any other extraordinary fees may be checked off from any amount due to an employee without an
individual written authorization duly signed by the employee. The authorization should specifically state the
amount, purpose and beneficiary of the deduction
- (n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization
unless authorized by a written resolution of a majority of all the members at a general membership meeting
duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including
the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient
of such assessments or fees. The record shall be attested to by the president
• the Union has nevertheless failed to comply with the procedure to legitimize the questioned special assessment by:
(1) presenting mere minutes of local membership meetings instead of a written resolution; (2) failing to call a general
membership meeting; (3) having the minutes of three (3) local membership meetings recorded by a union director,
and not by the union secretary as required; (4) failing to have the list of members present included in the minutes
of the meetings; and (5) failing to present a record of the votes cast
• After a careful review of the records of this case, We are convinced that the deduction of the 10% special
assessment by the Union was not made in accordance with the requirements provided by law
• Since it is quite evident that the Union did not comply with the law at every turn, the only conclusion that may be
made therefrom is that there was no valid levy of the special assessment
• Paragraph (o) requires an individual written authorization duly signed by every employee in order that a special
assessment may be validly checked-off.
- there can be no valid check-off considering that the majority of the union members had already withdrawn their
individual authorizations.
- A withdrawal of individual authorizations is equivalent to no authorization at all
• no check-offs from any amounts due employees may be effected without an individual written authorization signed
by the employees
• The Union points out, however, that said disauthorizations are not valid for being collective in form, as they are
"mere bunches of randomly procured signatures, under loose sheets of paper
- The Court finds these retractions to be valid. There is nothing in the law which requires that the disauthorization
must be in individual form
• The mandate of the majority rank and file have (sic) to be respected considering they are the ones directly affected
and the realities of the high standards of survival nowadays. To ignore the mandate of the rank and file would enure
to destabilizing industrial peace and harmony within the rank and file and the employer’s fold, which we cannot
countenance.
• Article 222 (b) prohibits attorney’s fees, negotiations fees and similar charges arising out of the conclusion of a
collective bargaining agreement from being imposed on any individual union member
- there is no question that it is an exaction which falls within the category of a "similar charge," and, therefore,
within the coverage of the prohibition in the aforementioned article
• The principle “that employees are protected by law from unwarranted practices that diminish their compensation
without their known edge and consent” is in accord with the constitutional principle of the State affording full
protection to labor.
• Special assessment; requires express consent of union members to be obtained in accordance with law
- the failure of the Union to comply strictly with the requirements set out by the law invalidates the questioned
special assessment
• Requisites for levy of a special assessment
 - Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off" of a special assessment. Both provisions
must be complied with. Under paragraph (n), the Union must submit to the Company a written resolution of a
majority of all the members at a general membership meeting duly called for the purpose
- Since it is quite evident that the Union did not comply with the law at every turn, the only conclusion that may
be made therefrom is that there was no valid levy of the special assessment pursuant to paragraph (n) of Article
241 of the Labor Code
• Check-off requires an individual written authorization duly signed by every employee; withdrawal of individual
authorizations equivalent to no authorization at all
- Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in
order that a special assessment may be validly checked-off
- A withdrawal of individual authorizations is equivalent to no authorization at all. Hence, the ruling in Galvadores
that "no check-offs from any amounts due employees may be effected without an individual written authorization
signed by the employees . . ." is applicable.
• Implementation and interpretation of provisions shall be resolved in favor of labor; labor refers to union members
as employees of company
- it is well-settled that "all doubts in the implementation and interpretation of the provisions of the Labor Code . .
. shall be resolved in favor of labor."

Check-off (Effect if ER fails to implement check-off)

[Holy Cross of Davao vs Joaquin]

• Holy Cross asserts that it could not comply with the check-off provision because contrary to established practice
prior to August, 1989, KAMAPI failed to submit to the college comptroller every 8th day of the month, a list of
employees from whom union.
• A check-off is a process or device whereby the employer, on agreement with the union recognized as the proper
bargaining representative, or on prior authorization from its employees, deducts union dues or agency fees from
the latter’s wages and remits them directly to the union
• this Court has acknowledged that the system of check-off is primarily for the benefit of the union and, only indirectly,
of the individual laborers
• the Labor Code and its Implementing Rules recognize it (check-off) to be the duty of the employer to deduct sums
equivalent to the amount of union dues from the employees’ wages for direct remittance to the union, in order to
facilitate the collection of funds vital to the role of the union as representative of employees in a bargaining unit if
not, indeed, to its very existence.
• the right to union dues deducted pursuant to a check-off, pertains to the local union which continues to represent
the employees under the terms of a CBA, and not to the parent association from which it has disaffiliated
• Statutory limitations on check-offs generally require written authorization from each employee to deduct wages;
however, a resolution approved and adopted by a majority of the union members at a general meeting will suffice
when the right to check-off has been recognized by the employer
• Authorization to effect a check-off of union dues is co-terminous with the union affiliation or membership of
employees
• No requirement of written authorization from the non-union employee is imposed. The employee’s acceptance of
benefits resulting from a collective bargaining agreement justifies the deduction of agency fees from his pay and
the union’s entitlement thereto.
• No provision of law makes the employer directly liable for the payment to the labor organization of union dues and
assessments that the former fails to deduct from its employees’ salaries and wages pursuant to a check-off
stipulation
• The employer’s failure to make the requisite deductions may constitute a violation of a contractual commitment for
which it may incur liability for unfair labor practice.
 • Check-offs in truth impose an extra burden on the employer in the form of additional administrative and bookkeeping
costs. It is a burden assumed by management at the instance of the union and for its benefit, in order to facilitate
the collection of dues necessary for the latter’s life and sustenance
• But the obligation to pay union dues and agency fees obviously devolves not upon the employer, but the individual
employee. It is a personal obligation not demandable from the employer upon default or refusal of the employee to
consent to a check-off.
• The only obligation of the employer under a checkoff is to effect the deductions and remit the collections to the
union.
• There was thus no basis for the Voluntary Arbitrator to require Holy Cross to assume liability for the union dues and
assessments, and agency fees that it had failed to deduct from its employees’ salaries on the proffered plea that
contrary to established practice, KAMAPI had failed to submit to the college comptroller every 8th day of the month,
a list of employees from whose pay union dues and the corresponding agency fees were to be deducted.

CBA: Scope of the agreement; who may avail the benefits

[New Pacific Timber vs. NLRC; National Federation Labor, union]

• 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
• 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
• 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."
• Article 221 – “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. . . ."
• 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
• 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 dutybound 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 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.
 • 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
• 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.
• 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
• Our responsibility here is to create a legal framework to promote industrial peace and to develop responsible and
fair labor movement. The longer the period of effectivity of the CBA, the better for industrial peace

Who are entitled to the benefits?

• 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
• 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
• It is only fair and just that the employees hired thereafter be included in the existing CBA
• 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

May parties negotiate and agree to extend term of exclusive bargaining status of majority union?

[FVC Labor Union-PTWGO vs. SANAMA-FVC-SIGLO]

• while the parties may renegotiate the other provisions (economic and non-economic) of the CBA, this should
not affect the five-year representation aspect of the original CBA
• If the duration of the renegotiated agreement does not coincide with but rather exceeds the original five-year
term, the same will not adversely affect the right of another union to challenge the majority status of the
incumbent bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA.
• In the event a new union wins in the certification election, such union is required to honor and administer the
renegotiated CBA throughout the excess period
• The legal question before us centers on the effect of the amended or extended term of the CBA on the exclusive
representation status of the collective bargaining agent and the right of another union to ask for certification as
exclusive bargaining agent.
• The question arises because the law allows a challenge to the exclusive representation status of a collective
bargaining agent through the filing of a certification election petition only within 60 days from the expiration of
the five-year CBA
• Article 253-A of the Labor Code
- 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 retroactivity
thereof
• In case of a deadlock in the renegotiation of the collective bargaining agreement, the parties may exercise their
rights under this Code.
• Book V, Rule VIII of the Rules Implementing the Labor Code
- Sec. 14. Denial of the petition; grounds. - The MedArbiter may dismiss the petition on any of the
following grounds:
o the petition was filed before or after the freedom period of a duly registered collective bargaining
agreement; provided that the sixty-day period based on the original collective bargaining
agreement shall not be affected by any amendment, extension or renewal of the collective
bargaining agreement
• The root of the controversy can be traced to a misunderstanding of the interaction between a union's exclusive
bargaining representation status in a CBA and the term or effective period of the CBA.
• only with respect to the original five-year term of the CBA which, by law, is also the effective period of the union's
exclusive bargaining representation status
• While the parties may agree to extend the CBA's original five-year term together with all other CBA provisions, any
such amendment or term in excess of five years will not carry with it a change in the union's exclusive collective
bargaining status.
• By express provision of the above-quoted Article 253-A, the exclusive bargaining status cannot go beyond five
years and the representation status is a legal matter not for the workplace parties to agree upon
• despite an agreement for a CBA with a life of more than five years, either as an original provision or by amendment,
the bargaining union's exclusive bargaining status is effective only for five years and can be challenged within sixty
(60) days prior to the expiration of the CBA's first five years
• this negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWO's exclusive bargaining
representation status which remained effective only for five years ending on the original expiry date of January 30,
2003
• Thus, sixty days prior to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a petition for
certification election