Labor Review 2021

Atty. Paciano F. Fallar Jr.

SSCR-CoL

Bar Questions on
CBA , Grievance, & ULP

Q1 The Samahan ng Mga Manggagawa sa Pids and Co. Inc. lost its majority status in the
bargaining unit one year after the signing of the Collective Bargaining Agreement. Bickerings
among all the three other unions in the bargaining unit were a daily occurrence, with each union
asserting majority status. To resolve this pestering problem, the Company and the three other
unions agreed to hold a consent election under the supervision of the Bureau of Labor Relations.
In the consent election, Pids and Co, Worker's Union won, and was accordingly recognized by
the Company as the exclusive bargaining representative in the bargaining unit. Is the Pids and
Co. Workers Union bound by the Collective Bargaining Agreement signed between the
Company and the Samahan ng Mga Manggagawa Sa Pids and Co. Inc.? Explain.

ANSWER: YES. Under Art 264 of the Labor Code, at the expiration of the freedom period, the
employer shall continue to recognize the majority status of the incumbent bargaining agent
where no petition for certification election is filled. 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.

Here, provided that the CBA was left unchanged during the 60dayperiod and that no new
agreement was reached by the parties, Pids and Co. Workers remains to be bound by the CBA
signed between the Company and the Samahan.

Q2. Shortly after the consent election, Pids and Co. Inc. sold the Groceries Division to Metro
Manila Grocery Inc. The employees of the sold division formed part of the bargaining unit
described in the CBA and all were absorbed by Metro Manila Grocery Inc. Is Metro Manila
Grocery Inc., as the new employer, bound by the CBA existing at the time of the sale? Explain.

ANSWER: YES. The general rule under the Labor Code is that when there is a CBA, the duty to
bargain also means that neither party shall terminate nor modify such agreement during its
lifetime. The exception is 60 days before the CBA expires, either party may notify the other in
writing that it wants to terminate or modify the agreement. The CBA remains in full force and
effect during the 60 day period and until a new agreement is reached.

Since it does not so appear that a new CBA has been reached, the same shall remain in effect
during the freedom period. Thus, Metro Manila Grocery is obliged to respect the CBA existing at
the time of the sale.

Q3. The collective bargaining agreement between MM Park Hotel and MPH Labor Union
contains a union shop provision. After the signing of the 2000– 2005 CBA, the Union demanded
the dismissal of 3 employees, XX, YY and ZZ, pursuant to the union security clause in the CBA.

The Hotel Management replied that it was legally impossible to comply with the demand of the
Union, since the three (3) employees had been promoted as supervisors and had and had resigned
from the Union. But according to the Union, the three submitted their resignations outside the
freedom period after the 1996–2000 CBA expired on June 30, 2000. The Union argued that the
Hotel Management could not skirt its obligation to respect and implement the union security
clause by promoting the three employees. That could be viewed as rewarding employees for their
disloyalty to the union, said the union officers.

Does the union security clause sufficiently justify the demand for dismissal of the three
employees or not? May the Hotel Management validly refuse the Union’s demand?

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ANSWER: NO. Yes, the Hotel Management may validly refuse the Union’s demand. Under
jurisprudence, there is maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who thereafter become members, must
maintain union membership as a condition for (their) continued employment until they are
promoted or transferred out of the bargaining unit or the agreement is terminated.

Here, it appears that the 3 employees were promoted which is technically pursuant to the
membership clause. Hence, there is no violation committed.

Q4. May a rank-a file employee , who is not a member of the union representing his bargaining
unit, avail of the wage increases which the union negotiated for its members?

ANSWER: YES. Under jurisprudence, an Agency Shop is an agreement whereby employees

must either join the union or pay to the union as exclusive bargaining agent a sum equal to that
paid by the members.

Thus, employees who are not members of a union representing a bargaining unit may avail of the
benefits under the CBA by paying the union a sum equal to that paid by the members instead.

Q5 Company A and Union B had a 3-year CBA that expired on June 12, 1990. Negotiations
proved futile so the unresolved issues were referred to a Labor Arbiter .Is the referral to the
Labor Arbiter valid? If not valid, what would the proper course of action for the parties?

ANSWER: NO IT IS NOT VALID. The parties must submit their case before a 3 rd party
conciliator or arbitrator. Under jurisprudence, a genuine deadlock consists in the submission of
the deadlock to a 3rd party conciliator or arbitrator.

Thus, referral to the Labor Arbiter is improper as the proper judge for this case is the NCMB or
any of its regional offices.

Q6.What is the "automatic renewal clause" in a collective bargaining agreement?

ANSWER: Under Art 264 of the Labor Code, the automatic renewal clause states that at the
expiration of the freedom period, the employer shall continue to recognize the majority status of
the incumbent bargaining agent where no petition for certification election is filled. 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.

Q8.The Ang Sarap Kainan Workers Union appointed Juan Javier, a law student, as bargaining
representative. Mr. Javier is neither an employee of Ang Sarap Kainan Company nor a member
of the union. Is the appointment of Mr. Javier as a bargaining representative in accord with the
law?

ANSWER: NO. Under jurisprudence, a bargaining unit is a group of employees sought to be

represented by a petitioning union. Such employees need not be members of a union seeking the
conduct of a certification election. A union certified as an exclusive bargaining agent represents
not only its members but also other employees who are not union members.

Hence, although Mr. Javier is not a member of the union, he cannot be the sole bargaining
representative of Ang Sarap Kainan Workers Union for such representative must consist in a
group of employees and not merely a single one.

Q9. On December 1, 2018, GHI Co., an organized establishment, and Union J, the
exclusive bargaining agent therein, executed a five (5)-year collective bargaining
agreement (CBA) which, after ratification, was registered with the Bureau of Labor
Relations.

(a)When can the union ask, at the earliest, for the renegotiation of all the terms of the
CBA, except its representation aspect? Explain.

ANSWER: The union may renegotiate on all the terms of the CBA at any time not later

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than December 1, 2021 other than the representation aspect.

(b)When is the earliest time that another union can file for a petition for certification
election? Explain.

ANSWER: The earliest time that another union can file for a petition for certification
election is on October 2, 2023 or exactly 60 days before December 1, 2023 which is the
expiry of the 5-year term of their CBA.

Q10 ABC company and U labor union have been negotiating for a new Collective
Bargaining Agreement (CBA) but failed to agree on certain economic provisions of the
existing agreement. In the meantime, the existing CBA expired. The company thereafter
refused the employees their midyear bonus, saying that the CBA which provided for the
grant of midyear bonus to all company employees had already expired. Are the
employees entitled to be paid their midyear bonus? Explain your answer.

ANSWER: YES. Under the hold over principle as provided by jurisprudence, the CBA shall be
in full force and effect until the parties reach a new agreement. Until a new CBA 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.

Thus, the employees are still entitled to be paid their midyear bonus.

Q11The CBA for the period January 2007 to December 2009 granted the employees a
P40 per day increase with the understanding that it is creditable as compliance to any
future wage order. Subsequently, the regional wage board increased by P20 the
minimum wage in the employer’s area beginning January 2008. The management
claims that the CBA increase may be considered compliance even if the Wage Order
itself said that “CBA increase is not creditable as compliance to the Wage Order.” Is
the management’s claim valid?

(A) Yes, since creditability of the CBA increase is the free and deliberate
agreement and intention of the parties.
(B) Yes, since the Wage Order cannot prejudice the management’s vested interest
in the provisions of the CBA.
(C) No, disallowing creditability of CBA pay increase is within the wage board’s
authority.
(D) No, the CBA increase and the Wage Order are essentially different and are to
be complied with separately.

ANSWER: A.

Q12 The management and Union X in Atisan Mining entered into a CBA for 1997 to
2001. After 6 months, a majority of the members of Union X formed Union Y and
sought management recognition. The latter responded by not dealing with either union.
But, when the CBA’s economic provisions had to be renegotiated towards the end of
the term of the CBA, the management chose to negotiate with Union Y, the newer
union. Thus, Union X which negotiated the existing CBA charged the company with
unfair labor practice (ULP). The company argued that it committed no unfair labor
practice since the supposed violation had nothing to do with economic provisions of the
CBA. Is the management right?

(A) No. Refusal to comply with the CBA’s economic provisions is not the only
ground for ULP; a disregard of the entire CBA by refusing to renegotiate with
the incumbent bargaining agent is also ULP,
(B) Yes. No unfair labor practice was committed because the supposed violation
has nothing to do with economic provisions of the CBA.
(C) Yes. The management commits no ULP when it decided to renegotiate with the

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 numerically majority union.
(D) Yes. A CBA violation amounts to ULP only if the violation is “gross,” meaning
flagrant or malicious refusal to comply with the CBA’s economic provisions
which is not the case here.

ANSWER: A

Q13 Upon the expiration of the first three (3) years of their CBA, the union and the
company commenced negotiations. The union demanded that the company continue
to honor their 30-day union leave benefit under the CBA. The company refused on the
ground that the CBA had already expired, and the union had already consumed their
union leave under the CBA. Who is correct?

(A) The company is correct because the CBA has expired; hence it is no longer
bound to provide union leave.
(B) The company is correct because the union has already consumed the allotted
union leave under the expired CBA.
(C) The union is correct because it is still the bargaining representative for the next
two (2) years.
(D) The union is correct because union leaves are part of the economic terms that
continue to govern until new terms are agreed upon.
(E) They are both wrong.

ANSWER: D

Q14. The Collective Bargaining Agreement (CBA) between Libra Films and its union,
Libra Films Employees’ Union (LFEU), contains a maintenance of membership clause.

While Libra Films and LFEU are in re-negotiations for an extension of the CBA, LFEU
discovers that some of its members have resigned from the union, citing their
constitutional right to organize (which includes the right NOT to organize). LFEU
demands that Libra Films institute administrative proceedings to terminate those union
members who resigned in violation of the CBA’s maintenance of membership clause.
Libra Films refuses, citing its obligation to remain a neutral party. As a result, LFEU
declares a strike and after filing a notice of strike and taking a strike vote, goes on
strike. The union claims that Libra Films grossly violated the terms of the CBA and
engaged in unfair labor practice. Are LFEU’s claims correct? Explain.

ANSWER: NO. The Court has ruled that prohibited acts refer to "acts that violate the
workers’ right to organize." Without that element, the acts, even if unfair, are not ULP.
Thus, an employer may only be held liable for unfair labor practice if it can be shown that
his acts affect in whatever manner the right of his employees to self-organize.

Here, it does not appear that Libra Films’ act constitutes that which is violative of the
workers’ right to organize. In fact, it even serves to act as a neutral party to meet the
demands of all parties concerned.

Q15. Forbes Country Club (Club) owns a golf course and has 250 rank-and-file
employees who are members of the Forbes Country Club Union (Union). The Club has
a CBA with the Union and one of the stipulations is a Union Security Clause, which
reads: “All regular rank-and- file employees who are members of the union shall keep
their membership in good standing as a condition for their continued employment
during the lifetime of this agreement.”

Peter, Paul and Mary were the Treasurer, Assistant Treasurer, and Budget Officer of
the Union, respectively. They were expelled by the Board of Directors of the Union for
malversation. The Union then demanded that the Club dismiss said officials pursuant
to the Union Security Clause that required maintenance of union membership. The
Club required the three officials to show cause in writing why they should not be
dismissed. Later, the Club called the three Union officials for a conference regarding
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the charges against them. After considering the evidence submitted by the parties and
their written explanations, the Club dismissed the erring officials. The dismissed
officials sued the Club and the Union for illegal dismissal because there was really no
malversation based on the documents presented and their dismissal from the Union
was due to the fact that they were organizing another union.

Is the dismissal of Peter, Paul and Mary by the Club valid?

ANSWER: NO. Under jurisprudence, dismissal of an employee due to a union security

clause requires that the employer must comply with due process by notifying the
employees that their dismissal is being requested by the union and that they are heard.
Further, even if there are valid grounds to expel the union officers, due process requires
that these union officers be accorded a separate hearing by respondent company.

Here, the 3 employees were not notified by the Club that their dismissal was being
requested by the Union and they were not accorded a separate hearing by respondent
company. The Club merely relied on the evidence submitted by the parties without a
separate hearing. Thus, their termination is not valid.

Q16. Gene is a married regular employee of Matibay Corporation. The employees and
Matibay Corporation had an existing CBA that provided for funeral or bereavement aid
of₱15,000.00 in case of the death of a legal dependent of a regular employee. His
widowed mother, who had been living with him and his family for many years, died;
hence, he claimed the funeral aid. Matibay Corporation denied the claim on the basis
that she had not been his legal dependent as the term legal dependent was defined by
the Social Security Law.Is Gene entitled to the funeral aid for the death of his widowed
mother? Explain your answer.

ANSWER: YES. Under the SSS Law, a legal dependent includes a parent who is
receiving regular support from the member.

Here, Gene’s mother has been living with him for years which gives rise to the
presumption that she has been under his support. Hence, Gene may claim for funeral
aid.

Q17Nagrab Union and Nagrab Corporation have an existing CBA which contains the
following provision: "New employees within the coverage of the bargaining unit who
may be regularly employed shall become members of Nagrab Union. Membership in
good standing with the Nagrab Union is a requirement for continued employment with
Nagrab Corporation." Nagrab Corporation subsequently acquired all the assets and
rights of Nuber Corporation and absorbed all of the latter's employees. Nagrab Union
immediately demanded enforcement of the above-stated CBA provision with respect to
the absorbed employees. Nagrab Corporation refused on the ground that this should
not apply to the absorbed employees who were former employees of another
corporation whose assets and rights it had acquired.

a). Was Nagrab Corporation correct in refusing to enforce the CBA provision with
respect to the absorbed employees?

ANSWER: NO. The Court ruled that the subject union security clause does not make a
distinction as to how a regular employee should attain such status as a “new employee”
in order to be covered by the clause. Absorbed employees as a result of merger or
acquisition of assets and rights between two corporations, therefore, should be
considered as “new employees” of the surviving or acquiring corporation.

b) May a newly-regularized employee of Nagrab Corporation (who is not part of the

absorbed employees) refuse to join Nagrab Union?

ANSWER: YES. As provided under jurisprudence, the right to join a union carries with
it the right not to join one.

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 Q18. Pol requested Obet, a union officer and concurrently chairman of the company's
Labor-Management Council, to appeal to the company for a recomputation of Pol’s
overtime pay. After 5 p.m., his usual knock-off time, Obet spent two hours at the
Personnel Office, reconciling the differing computations of Pol’s overtime. Are those
two hours compensable?

(A) Yes, because Obet performed work within the company premises.
(B) No, since Obet’s action has nothing to do with his regular work assignment.
(C) No, because the matter could have been resolved in the labor-management
council of which he is the chairman.
(D) Yes, because the time he spent on grievance meetings is considered hours
worked.

ANSWER: B

Q19 Natasha Shoe Company adopted an organizational streamlining program that

resulted in the retrenchment of 550 employees in its main plant. After having been paid
their separation benefits, the retrenched workers demanded payment of retirement
benefits under a CBA between their union and management. Natasha Shoe Company
denied the workers' demand. What is the most procedurally peaceful means to resolve
this dispute?

ANSWER: The employees must engage into a grievance machinery. Under Art
273 of the Labor Code, the parties to a CBA shall include therein provisions that will
ensure the mutual observance of its terms and conditions. They shall establish a
machinery for the adjustment and resolution of grievances arising from the
interpretation or implementation of their CBA AND those arising from the interpretation
or enforcement of company personnel policies.

Q20 Company C, a toy manufacturer, decided to ban the use of cell phones in the
factory premises. In the pertinent Memorandum, management explained that too much
texting and phone-calling by employees disrupted company operations. Two
employees members of Union X were terminated from employment due to violation of
the memorandum-policy. The union countered with a prohibitory injunction case (with
prayer for the issuance of a temporary restraining order) filed with the Regional Trial
Court, challenging the validity and constitutionality of the cell phone ban. The company
filed a motion to dismiss, arguing that the case should be referred to the grievance
machinery pursuant to an existing Collective Bargaining Agreement with Union X, and
eventually to Voluntary Arbitration. Is the company correct? Explain.

ANSWER: NO. Under jurisprudence, a grievance machinery can only be established by

provision in the CBA or on the absence of applicable provision in the CBA, a Grievance
committee shall be created within 10 days from the signing of the CBA. Further,
grievable issues are (1) interpretation or implementation of the CBA; (2) interpretation
and implementation of a company policy; and (3) any claim by either party that the other
party is violating any provisions of the CBA or company personnel policies.

Here, although there was a violation of a company policy, the same is not one of the
grievable issues. Since the CBA contains a grievance machinery establishment, the
same must first be resorted to.

Q21 XYZ Company and Mr. AB, a terminated employee who also happens to be the
President of XYZ Employees Union, agree in writing to submit Mr. AB’s illegal
dismissal case to voluntary arbitration. Is this agreement a valid one?

ANSWER: NO. Under jurisprudence, the matter which may be referred to grievance
machinery or voluntary arbitration are those issues arising from the implementation or
interpretation of the CBA.

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The written agreement between the Company and Mr. AB is not considered as a CBA
that has been carefully crafted between the employer and the bargaining representative.

Q22 When resolving a case of unfair labor practice (ULP) filed by a union, what should
be the critical point of analysis to determine if the act constitutes ULP?

ANSWER: The Court has ruled that prohibited acts refer to "acts that violate the workers’ right to
organize." Without that element, the acts, even if unfair, are not ULP. Thus, an employer may only
be held liable for unfair labor practice if it can be shown that his acts affect in whatever manner the
right of his employees to self-organize.

Q23: Corporation X is engaged in a collective bargaining negotiation with the Union of

its employees. With respect to the demand for profit-sharing the corporation patiently
but consistently alleged that it cannot accept the said demand. The corporation and the
union several times to arrive at the proper resolution of the issue but the corporation
would not yield. Finally, the union filed an unfair labor practice case accusing the
corporation of bargaining in bad faith and refusing to accede to its demand of profit-
sharing. Decide.

ANSWER: The union’s argument is untenable. It must be dismissed. Under

jurisprudence, deadlock arises when there is an impasse, which presupposes
reasonable effort at good faith bargaining which, despite noble intentions, did not
conclude in an agreement between the parties.

The Union and the Corporation arrived at an impasse with regard to the profit-sharing
scheme. As stated, the Corporation patiently but consistently alleged its position against
the issue. Thus, it cannot be said the Corporation acted in bad faith in denying the
Union’s claim. What they should have done instead is to submit the matter before a
neutral 3rd party.

Q24 Company "A" contracts out its clerical and janitorial services. In the negotiations of
its CBA, the Union insisted that, henceforth, the company may no longer engage in
contracting out these types of services, which services the union claims to be necessary
in the company's business, without prior consultation. Is the union's stand valid or not?

ANSWER: It is not. Under jurisprudence, contracting out of services is not illegal per
se. It is an exercise of business judgment or management prerogative. Absent proof
that the management acted in malicious or arbitrary manner, the Court will not interfere
with the exercise of judgment by an employer.

Here, it does not appear that the employer acted in bad faith in contracting out services
and that the same was motivated in circumvention of the law. Hence, the Union is in
error.

Q25: Article 259 (d) of the Labor Code states that it shall be unlawful for an employer to
initiate, dominate, assist in or otherwise interfere with the formation or administration of
any labor organization, including the giving of financial or other support to it or to its
organizers or officers.

X Company, Inc. has been regularly contributing money to the recreation fund of the
labor union representing its employees. This fund, including the financial assistance
given by the employer, is used for refreshment and other expenses of the labor union
whenever the employees go on a picnic, on an excursion, or hold a Christmas party. Is
the employer liable for unfair labor practice under Article 259 (d) of the Labor Code?
Explain your answer.

ANSWER: YES. Under jurisprudence, one manifestation of company dominion is

through financially supporting the union by defraying the union expenses or paying the
attorney’s fees of the lawyer who drafted the constitution and by – laws of the union.

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Since the Company furnishes the financial means for the Union to go about its activities,
the same may be considered as ULP.

PFFALLARJRNOV2021