UNION OF FILIPRO EMPLOYEES, vs.

  NLRC & NESTLE PHILIPPINES, INC., G.R. No. 91025, December 19,
1990

Facts:
 Union of the Filipro Employees, SEBA of all rank-and-file employees of Nestle Philippines, filed a Notice of Strike
at the DOLE raising the issues of CBA deadlock and ULP.
 NCMB invited the parties for a conference to settle the dispute. Nestle however, assailed the legal personality of the
proponents of the said notice of strike to represent its employees. NCMB still proceeded to invite the parties to
attend the conciliation meetings and to which Nestle failed to attend contending that it will deal only with a
negotiating panel duly constituted and mandated in accordance with the UFE Constitution and By-laws.
 Before the filing of said notice of strike, the respective CBAs in the 4 units of Nestle work locations had all expired.
Under the said CBAs, Alabang/Cabuyao and Makati units were represented by the UFE; the Cagayan de Oro unit
was represented by WATU; while the Cebu-Davao was represented by TUPAS. Prior to the expiration of the CBAs
for Makati and Alabang/Cabuyao, UFE submitted to the company a list of CBA proposals. The company expressed
its readiness to negotiate a new CBA for Makati and Alabang/Cabuyao units but reserved the negotiation for
Cagayan de Oro and Cebu-Davao considering that the issue of representation for the latter units was not yet settled.
UFE was certified as the SEBA representative of Cagayan de Oro and Cebu/Davao units, respectively.
 Netle terminated from employment all UFE Union officers, headed by its president, and all the members of the
negotiating panel for instigating and knowingly participating in a strike, without any notice of strike filed and a
strike vote obtained for the purpose.
 The union filed a complaint for illegal dismissal.
 LA upheld the validity of the dismissal of said union officers. Affirmed by NLRC.
 Nestle: "with the dismissal of UFE officers as later on confirmed by the NLRC, said union negotiating panel thus
ceased to exist and its former members divested of any legal personality, standing and capacity to act as such or
represent the union in any manner whatsoever."
 Union: asserted their authority to represent the regular rank-and-file employees of Nestle, being the duly elected
officers of the union.
 Nestle sought guidelines from DOLE on how it should treat letters from several splinter groups claiming to have
possessed authority to negotiate in behalf of the UFE. Aside from the names of the negotiating panel submitted by
UFE officials, 5 other groups (all from UFE) have expressed a desire to bargain with management professing
alleged authorization from and by the general membership.
 BLR advised that it would be unwise for Nestle to deal with them. Nestle concluded separate CBAs with the general
membership of the union at Cebu/Davao and Cagayan de Oro units. The workers thereat likewise conducted
separate elections of their officers.
 Assailing the validity of these agreements, the union filed a case of ULP against the company with the NLRC-NCR
Arbitration Branch. NCM failed to resolve the matter of who should represent and negotiate for the workers
 Union filed a motion asking the Secretary of Labor to assume jurisdiction over the dispute of deadlock in CB
between the parties.
 Labor Secretary Drilon certified to the NLRC the said dispute between the UFE and Nestle. The sole issue of
deadlock in CBA negotiations.
 NLRC: granted wage increase and other benefits to Nestle's employees, ruling on non-economic issues, as well as
absolving Nestle of the ULP charge. Union filed an MR, which was, however, denied.
 Union filed a Special civil action of Certiorari assails the 1989 NLRC Resolution relative to a Certified Case, and
the resolution denying the MR.
 Nestle’s counsel filed a motion for leave of court to oppose the urgent manifestation and motion. The allowance of
said opposition would necessarily delay the early disposition of this case, SC Resolved to DISPENSE with the filing
of the same.
Held:
 This case was certified when existing rules prescribed that, it is incumbent upon the Commission en banc to decide
or resolve a certified dispute. However, R.A. 6715 took effect during the pendency of this case. Aside from vesting
upon each division the power to adjudicate cases filed before the Commission, said Act further provides that the
divisions of the Commission shall have exclusive appellate jurisdiction over cases within their respective territorial
jurisdiction.
 In view of the enactment of Republic Act 6715, the rules requiring the Commission en banc to decide or resolve a
certified dispute have accordingly been repealed. This is supported by the fact that the Secretary of Labor, issued
Administrative Order No. 36 which states that the Commission shall cease holding en banc sessions for purposes of
adjudicating cases and shall discharge their adjudicatory functions and powers through their respective Divisions.
 It is a matter of judicial notice that since the effectivity of R.A. 6715, many cases have already been decided by the
5divisions of the NLRC. We find no legal justification in entertaining petitioner's claim considering that the clear
intent of the amendatory provision is to expedite the disposition of labor cases filed before the Commission. To rule
otherwise would not be congruous to the proper administration of justice.
 NLRC’s resolution is proper and in full compliance with the order of the Secretary of Labor. The concomitant delay
that will result in resolving petitioner's motion for the modification of the certification order to determine whether to
include Cebu/Davao and Cagayan de Oro Divisions or not will defeat the very purpose of the Secretary of Labor's
assumption of jurisdiction and his subsequent certification order for compulsory arbitration.
 The assumption of jurisdiction by the Secretary over labor disputes causing or likely to cause a strike or lockout in
an industry indispensable to the national interest is in the nature of a police power measure. The Secretary's
 certification order for compulsory arbitration which was intended for the immediate formulation of an already
delayed CBA was proper.
 The prayer to declare Nestle guilty of acts of ULP when it allegedly resorted to practices designed to delay the CB
negotiations cannot be subsumed in this petition, it being beyond the scope of the certification order.
 In the recent case of PAL vs. NLRC, SC defined compulsory arbitration as the process of settlement of labor
disputes by a government agency which has the authority to investigate and to make an award which is binding on
all the parties.
 When sitting in a compulsory arbitration certified to by the Secretary of Labor, the NLRC is not sitting as a judicial
court but as an administrative body charged with the duty to implement the order of the Secretary. Its function only
is to formulate the terms and conditions of the CBA and cannot go beyond the scope of the order. Moreover, the
Commission is further tasked to act within the earliest time possible and with the end in view that its action would
not only serve the interests of the parties alone, but would also have favorable implications to the community and to
the economy as a whole. In view of the limited purpose of NLRC's assumption of jurisdiction over this compulsory
arbitration case, it cannot be faulted in not taking cognizance of other matters that would defeat this purpose.
 The CBA is to be signed by the parties effective upon the promulgation of the assailed resolution. In Article 253-A,
any agreement on such other provisions of the CBA shall be given retroactive effect only when it is entered into
within 6 months from its expiry date. If the agreement was entered into outside the 6 month period, then the parties
shall agree on the duration of the retroactivity thereof.
 The assailed resolution which incorporated the CBA to be signed by the parties was promulgated June 5, 1989, and
hence, outside the 6 month period from June 30, 1987, the expiry date of the past CBA. Based on the provision of
Section 253-A, its retroactivity should be agreed upon by the parties. But since no agreement to that effect was
made, NLRC did not abuse its discretion in giving the CBA a prospective effect. NLRC’s action is within the ambit
of its authority vested by existing laws.
 Every CBA contracted after the expiry date of the previous CBA must retroact to the day following such date.
Hence, it is proper to rule that in the case at bar, the clear and unmistakable terms of Articles 253 and 253-A must be
deemed controlling.
 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, there being no new agreement reached, the automatic
renewal clause provided for by the law which is deemed incorporated in all CBAs, provides the reason why the new
CBA can only be given a prospective effect.
 The CBA formulated by NLRC is fair, reasonable and just. Even if prospective in effect, CBA still entitles the
Nestle employees reasonable compensation and benefits which is one of the highest, if not the highest in the
industry.
 NLRC is in the best position to formulate a CBA which is equitable to all concerned. Because of its expertise in
settling labor disputes, it is imbued with competence to appraise and evaluate the evidence and positions presented
by the parties. In the absence of a clear showing of grave abuse of discretion, the findings of the respondent NLRC
on the terms of the CBA should not be disturbed.

Rivera vs. Espiritu, G.R. No. 135547, January 23, 2002

Facts:
 PAL pilots affiliated with the Airline Pilots Association of the Philippines (ALPAP) went on a 3-week strike,
causing serious financial losses. As a result, PALs 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.
 PALEA went on strike to protest the retrenchment measures adopted by the airline, which affected 1,899 union
members. The strike ended 4 days later, when PAL and PALEA agreed to a more systematic reduction in PALs
work force and the payment of separation benefits to all retrenched employees.
 President Estrada issued AO No. 16 creating an Inter-Agency Task Force to address the problems of the ailing flag
carrier. It was composed of the Departments of Finance, Labor and Employment, Foreign Affairs, Transportation
and Communication, and Tourism, together with the SEC.
 Espiritu, then the Secretary of Finance, was designated chairman of the Task Force. It was empowered to summon
all parties concerned for conciliation, mediation to completely solve the problem.
 Conciliation meetings were then held between PAL management and the 3 unions representing the airlines
employees, with the Task Force as mediator.
 PAL management submitted to the Task Force an offer by Tan, Chairman & CEO of PAL, of a plan to transfer
shares of stock to its employees in the active payroll. (60k; PHP5.00/share); request for a suspension of the CBAs
for 10 years.
 Union members, however, rejected Tans offer. Under intense pressure from PALEA members, the unions directors
subsequently resolved to reject Tans offer.
 PAL informed the Task Force that it was shutting down its operations, 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.
 PALEA sought the intervention 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.
  PALEA informed DOLE that it had no objection to a referendum on the Tans offer. 2,799 out of 6,738 PALEA
members cast their votes in the referendum under DOLE supervision. Of the votes cast, 1,055 voted in favor of Tans
offer while 1,371 rejected it.
 PAL ceased its operations and sent notices of termination to its employees.
 PALEA board wrote President Estrada, 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. Tan, however, rejected this
counter-offer.
 PALEA board again wrote the President proposing the following terms and conditions, subject to ratification by the
general membership.
 Among the signatories to the letter were 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.
 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.
 PAL resumed domestic operations. On the same date, 7 officers and members of PALEA filed this instant petition to
annul the agreement entered into between PAL and PALEA.
 Petitioners: 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.
10-year CBA suspension is inordinately long, way beyond the maximum statutory life of a CBA, provided for in Article
253-A. The agreement is void because it abrogated the right of workers to self-organization and their right to CB. It was
not meant merely to suspend the existing PAL-PALEA CBA, 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 laid down by the Constitution.
 Respondents: public respondents merely served as conciliators or mediators, and merely supervised the conduct of
referendum. They did not perform any judicial and quasi-judicial act pertaining to jurisdiction. Petition be dismissed
for violating the hierarchy of courts doctrine.

Issues:
(1) Is an original action for certiorari and prohibition the proper remedy to annul the PAL-PALEA agreement;
(2) Is the PAL-PALEA agreement, stipulating the suspension of the PAL-PALEA CBA unconstitutional and contrary to
public policy?

Held:
 The 1st & 2nd requisites for certiorari and prohibition are not present in this case. (Petition's not proper)
 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 Finance Secretary and Labor Secretary as functionaries of the
Task Force. Neither is there a judgment, order, or resolution of either public respondents involved. This is a contract
between a private firm and one of its labor unions, entered into with the assistance of the Task Force.
 There is available to petitioners a plain, speedy, and adequate remedy in the ordinary course of law. Its object is 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 RTC.
 However, 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 nations premier airline and flag carrier, a national concern, SC looked into this case.
 Under Article 253-A LC, insofar as representation is concerned, a CBA has a term of 5 years, while the other
provisions, except for representation, may be negotiated not later than 3 years after the execution.
 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. Its primary purpose 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 agreement was the result of voluntary CB 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 latters closure.
 Article 253-A has a two-fold purpose: 1) to promote industrial stability and predictability. It sought to promote
industrial peace at PAL during its rehabilitation; 2) to assign specific timetables wherein negotiations become a
matter of right and requirement. Article 253-A, doesn’t prohibit the parties from waiving or suspending the
mandatory timetables and agreeing on the remedies to enforce the same. PALEA, as the exclusive bargaining agent
of PALs 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 unions exercise of its right to Cb. The right to free
CB, 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, 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.
Hence, not ULP. It is State policy to promote unionism to enable workers to negotiate with management on an even
playing field. 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--
vis the employer.
 Under Article 248 (d) LC, a company union exists when the employer acts to 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.
 The 5-year representation limit mandated by Article 253-A was not violated. The parties agreed to suspend the CBA
and put in abeyance the limit on the representation period.
 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.