123 Culili vs. Eastern Telecommunications Philippines, Inc.
, 642 SCRA 338, effect a company-wide reorganization simply for the purpose of getting
G.R. No. 165381 February 9, 2011
Facts:
Culili (Culili) was employed by ETPI as a Senior Technician in the Customer
Premises Equipment Management Unit of the Service Quality Department.
due to interconnection problems with the (PLDT), poor subscription and
cancellation of subscriptions, and other business difficulties, ETPI was forced to
halt its roll out of thousands of landlines already allocated to a number of its
employees.
Due to the business troubles and losses, ETPI was compelled to implement a
Right-Sizing Program which consisted of two phases:
 the first phase involved the reduction of ETPIs workforce to only those
employees that were necessary and which ETPI could sustain;
 the second phase entailed a company-wide reorganization which would
result in the transfer, merger, absorption or abolition of certain
departments of ETP
Upon the approval of the Union (ETEU), ETPI implemented  the Right-Sizing
Program and the Special Retirement Program. These form part of the first
phase. Culili rejected the offer embodied in Special Retirement Program.
The second phase, then ensued. Some departments were either abolished or
absorbed. As a result, Culilis position was abolished due to redundancy and his
functions were absorbed by Andre Andrada, another employee already with the
Business and Consumer Accounts Department.
Culili, among other aggrieved EEs, protested and coursed through this to ETEU.
A letter informing Culili’s termination (termination letter) was then sent as a
reply of ETPI. This was written by the Assistant VP.
This letter was similar to the memo shown to Culili by the union president
weeks before Culili was dismissed. The memo was dated December 7, 1998, and
was advising him of his dismissal effective January 4, 1999 due to the Right-
Sizing Program ETPI was going to implement to cut costs and avoid losses
Culili filed a complaint against ETPI and its officers for Illegal Dismissal, Unfair
Labor Practice and Money Claims before LA.
LA- Guilty.
A. Guilty of Illegal Dismissal- It believed that ETPI intended to dismiss him
even before his position became redundant as evidenced by the
termination latter. Termination Letter showed that the reason was
retrenchment and not redundancy.
B. Guilty of ULP- the contracting out of Culili’s functions to non-union
members violated Culili’s rights as a union member. ETPI also failed to
dispute Culili’s claim of discrimiations and subcontracting.
NLRC- Guilty.
CA- Not Guilty.
A. Culili’s position was validly abolished due to redundancy.
B. ETPI had been very candid with its employees in implementing its
Right-Sizing Program, and that it was highly unlikely that ETPI would
rid of Culili.
C. ETPI cannot be held guilty of unfair labor practice as mere contracting
out of services being performed by union members does not per se
amount to unfair labor practice unless it interferes with the employees’
right to self-organization.
Issue:
Whether or not the contracting out done by ETPI constitutes an ULP?
Held:
 ULP may also refer to acts setforth in Art 248 of LC.
 (c) To contract out services or functions being performed
by union members when such will interfere with, restrain
or coerce employees in the exercise of their rights to self-
organization
 (e) To discriminate in regard to wages, hours of work, and
other terms and conditions of employment in order to
encourage or discourage membership in any labor
organization. Xxx
 Is this form of ULP evident in this case? NO
Dismissal due to redundancy is valid. As provided in Art 283 of
LC, ER may also terminate the employment of any EE due to
the installation of labor saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers and the
DOLE at least 1 month before the intended date thereof.
o There is redundancy when the service capability of the
workforce is greater than what is reasonably required
to meet the demands of the business enterprise.
o Requisites of a valid redundancy program are:
(1) the good faith of the ER in abolishing the
redundant position; and
(2) fair and reasonable criteria in ascertaining
what positions are to be declared redundant
(e.g. preferred status, efficiency, and
seniority)
o In this case, the requisites are present. ETPI was in
good faith (indications- a. it negotiated with ETPU, b.
showed that the reorganization was well thought off
and necessary, and c. the termination letter provided
an adequate explanation for the dismissal)
 o While it is true that the written notice requirement to
the DOLE was not complied with in this case, the
dismissal is still based on a valid cause. Thus, the
dismissal in this case may be upheld. This is, however,
without prejudice to the duty of ETPI to pay Culili
indemnity (damages for the violation of procedural
due process)
 ULP may refer to acts that violate the workers’ right to organize
and non-observance of CBA. prohibited acts are related to the
workers' right to self-organization and to the observance of a
CBA.Thus, an ER may only be held liable for ULP if it can be shown
that his acts affect the right of his employees to self-organize.
 Is this form of ULP evident in this case? NO
Here, there is no showing that ETPI, in implementing its Right-
Sizing Program, was motivated by ill will, bad faith or malice, or
that it was aimed at interfering with its employees right to self-
organize.
o ETPI even negotiated and consulted with the union before
implementing its Right-Sizing Program
o Good faith is presumed and he who alleges bad faith has the
duty to prove the same.
124 Galaxie Steel Workers Union vs NLRC (2006)
 Galaxie Corp manufactures and sells re-bars and steel billets for
construction of buildings
 Galaxie decided to close its business due to losses from 1997 to
1999
 Galaxie Workers filed a complaint for ULP, illegal dismissal and money
claims
 LA: closure of Galaxie was valid but ordered payment of
separation pay, 13th month, VL and SL
 NLRC affirmed but removed 13th month, VL and SL pay;
removed separation pay because closure was due to serious
business losses
 CA affirmed NLRC
 Workers are arguing that since Galaxie did not serve them notices of
closure but merely posted it on the bulletin, Galaxie should be liable for
backwages; separation pay must be paid in case of closure of business
WON there was unfair labor practice NONE
 Galaxie Workers failed to present evidence to support their claim of
unfair labor practice
 Unfair labor practice refers to acts that violate the workers
right to organize
 The prohibited acts relate to the workers right to self-
organization and to the observance of Collective Bargaining
Agreement without which relation the acts, no matter how
unfair, are not deemed unfair labor practices
 The fact of losses suffered by Galaxie was supported by substantial
evidence
 As to separation pay
 There is payment of separation pay for closures NOT due to
serious business losses
 Where, the closure then is due to serious business losses, the
Labor Code does not impose any obligation upon the employer
to pay separation benefits
 Also the notice of closure was posted on the company bulletin
 mere posting on the company bulletin board does not,
however, meet the requirement under Article 283 of serving a
written notice on the workers
 service of the written notice must be made individually upon
each and every employee of the company
 the amount of nominal damages to be awarded the employee is
addressed to the sound discretion of the Court, taking into
account the relevant circumstances
  here it is P20,000 each for violation of procedural due process 1. No. The mere fact that while performing the duties assigned to her she was
not under the supervision of the petitioners does not render her a contractor,
because what she has to do, the hours that she has to work and the report that
125 STERLING PRODUCTS INTERNATIONAL, INC. v. LORETA C. SOL and she has to submit all — these are according to instructions given by the
COURT OF INDUSTRIAL RELATIONS employer. It is not correct to say, therefore, that she was an independent
G.R. No. L-19187             February 28, 1963 contractor, for an independent contractor is one who does not receive
instructions as to what to do, how to do, without specific instructions.
Facts: Moreover, a contractor is not entitled to a vacation leave or to a bonus nor to a
Loreta C. Sol is a regular Radio Monitor of Sterling. She filed a complaint against minimum wage. This act of hers in demanding these privileges are inconsistent
the said firm for underpayment, money equivalent of her vacation leave from with the claim that she was an independent contractor.
1952 to 1959, and Christmas bonus for 1959, equivalent to one month salary. 2. No. The court agrees with the petition of the Sterling that as respondent Sol
The complaint was, however, resulted in her dismissal. Thus, she charged was merely an employee and was not connected with any labor union, the
Sterling Products International and its Radio Director V. San Pedro with having company cannot be considered as having committed acts constituting unfair
committed an unfair labor practice act labor practice as defined in the Industrial Peace Act, Rep. Act 875.
Petitioners claim that Sol is an independent contractor whose services were The term unfair labor practice has been defined as any of those acts listed in
retained by petitioners to submit reports of radio monitoring work performed See. 4 of the Act. The respondent Sol has never been found to commit any of the
outside of their office; that petitioners no longer required complainant's acts mentioned in paragraph (a) of Sec. 4. Respondent Sol was not connected
services and therefore, it gave her notice of termination for good and justifiable with any labor organization, nor has she ever attempted to join a labor
reasons. organization, or to assist, or contribute to a labor organization. The company
Judge Tabigne of the Court of Industrial Relations held that the complainant cannot, therefore, be considered as having committed an unfair labor practice.
only an independent contractor and that respondent firm was justified in
dismissing the complainant due to economic reasons.
Complainant filed a motion to reconsider the decision, raising the question as to
whether she is an employee or an independent contractor. The lower court
reversed the decision of Judge Tabigne, ruling that complainant was an
employee and not an independent contractor, and ordered her reinstatement
with back wages. The lower court further ruled that respondent firm was guilty
of unfair labor practice in consideration of the following circumstances: (1)
Complainant was given an identification card stating that "Bearer Loreta C. Sol
is a bona fide employee of this Company;" (2) when she applied for purchase of
a lot from the PHHC, she was given a certificate to show that she was indeed an
employee of the respondent company for the last five years or six years; and (3)
as such employee, she enjoyed the privilege of borrowing money from the
Employees Loan Association of the firm.
The court further found that the company's control over respondent's work is
shown by the fact that she can not listen to broadcasts other than those that
were contained in the schedule given to her by the company. Supervision and
control of her work could be done by checking or verifying the contents of her
reports on said broadcasts, said the court.
Sterling brought the case to the SC by certiorari urging that Sol was an
independent contractor because of the lack of employer-employee relationship.
Issues:
 Whether or not Sol is an independent contractor?
 Whether or not Sterling is guilty of unfair labor practice?
Ruling:
126 American President Lines vs. Clave No. 51641. June 29, 1982.
Topic: ULP; Requisites; ER-EE Relationship Author: Andre Mina
FACTS:
On January 4, 1960, American President Lines (APL) entered into a contract
with Marine Security Agency for the latter to guard and protect its vessels while
moored at the port of Manila, for one year, with the stipulation that should the
contract be terminated, 30 day notice should be given. Upon giving a 30 day
notice, the contract was terminated by APL.
Counsel of respondent union Maritime Security Union (MSU) cabled APL’s San
Francisco office, to protest against the termination of the contract.
On February 6, 1961, MSU abolished itself. On December 10, 1962, MSU revived
itself.
On March 21, 1963, MSU filed a complaint against APL for ULP. They allege that
APL refused to negotiate an agreement with them and had discriminated
against them with regard to their tenure of employment by dismissing them on
January 1, 1961, for no other reason than their membership with the union and
union activities.
LA Lomabao found ER guilty of ULP; NLRC Commissioner affirmed; Minister of
Labor affirmed; Office of the President affirmed.
ISSUE: WON there exists an ER-EE between the parties – NO
RATIO: The Court failed to see how the complaining watchmen of the Marine
Security Agency can be considered as employees of APL. It is the agency that
recruits, hires, and assigns the work of its watchmen. Hence, a watchman cannot
perform any security service for the petitioner’s vessels unless the agency first
accepts him as its watchman. With respect to his wages, the amount to be paid
to a security guard is beyond the power of the petitioner to determine.
Certainly, the lump sum amount paid by the petitioner to the agency in
consideration of the latter’s service is much more than the wages of any one
watchman. In point of fact, it is the agency that quantifies and pays the wages to
which a watchman is entitled.
Neither does APL have any power to dismiss the security guards. In fact, the
Court failed to see any evidence in the record that it wielded such a power. It is
true that it may request the agency to change a particular guard. But this,
precisely, is proof that the power lies in the hands of the agency.
Since APL has to deal with the agency, and not the individual watchmen, on
matters pertaining to the contracted task, it stands to reason that the petitioner
does not exercise any power over the watchmen’s conduct. Always, the agency
stands between the petitioner and the watchmen; and it is the agency that is
answerable to the petitioner for the conduct of its guards
In view of the finding that there is no employer-employee relationship between
the petitioner and the members of the respondent agency, it should necessarily
follow that the APL cannot be guilty of ULP as charged by the respondents.
DISSENTING OPINION OF J. ABAD:
There is substantial evidence that will support the findings of the Executive
Department that there exists an ER-EE relationship between the parties:
They were hired much earlier even before 1961 after they had been recruited
by the Marine Security Agency for the said shipping company who then hired
them to perform guarding duties over its vessels on dock in the Manila ports.
This arrangement became the practice starting the early part of 1951 to evade
the preferential hiring of union men and the maintenance of the rates of pay
then obtaining This arrangement gave birth to the MSA which was contracted
for the sole purpose of recruiting and supplying watchmen on ships and vessels
of the APL. It was also observed that the Marine Security Agency which had
recruited herein private respondents for the said shipping company was not an
‘independent contractor’ but a ‘mere agent which served as extension of the
office’ of the said shipping company ‘in the recruitment of the watchmen, the
computation of the watchmen’s wages; and the placement of supervisors of the
watchmen’. These reveal that a certain degree of control was exercised by the
shipping company over these. The services of these watchmen were availed of
and their compensation paid in lump sum by the shipping company through the
watchmen’s agency, even if such were done through the said watchmen agency
without the direct intervention of the said shipping company
While working as regular employees of the petitioner shipping company,
private respondents herein formed and organized on August 3, 1958, the
Maritime Security Union under Registration Certificate No. 2764-IP issued on
August 28, 1959. Bernard Brodbury, a regularly employed supervisor of the APL
was also the operator and supervisor of the said watchmen agency. He was paid
by the shipping company in that capacity. Amadeo Tinsay who became the
operator of the Marine Security Agency when Bernard Brodbury was
hospitalized, acted as supervisor of the watchmen of the said shipping company.
Tinsay was also paid by the shipping company in that capacity. Tinsay, in effect,
supervised the watchmen and security guards, among them herein private
respondents, for and in behalf of the said shipping company, the American
President Lines, not for himself, nor for the said watchmen agency. Private
respondents were ‘ultimately working’ for the shipping company, and
‘ultimately paid’ for by the latter.
127 Tiu vs. National Labor Relations Commission
G.R. No. 123276. August 18, 1997; J. Padilla
Facts:
1. Republic Broadcasting System Inc. (RBS) had a CBA with GMA Channel 7
Employees Union (GMAEU).
2. After the first quarter of 1991, RBS management noted the huge amount of
overtime expense it incurred during the said period. To streamline its
operations, the president of RBS created a committee to formulate
guidelines on the availment of leaves and rendering of OT work.
3. RBS sent a copy of the new guidelines to GMAEU and requested the latter to
comment. Union did not file any comment. RBS then officially issued the
guidelines.
4. The next day, GMAEU sent a letter to the President of RBS, arguing the ff:
(1) that it was not consulted in the formulation of the said guidelines, a
clear violation of the CBA; (2) that the new guidelines would make CBA
provisions on the same subject irrelevant; (3) diminution of benefits
constitutes a withdrawal of an existing company policy.
5. RBS management and GMAEU officials then met to thresh out the issues.
This failed and the union refused to hold further talks with RBS.
6. GMAEU then filed a Notice to Strike with NCMB based on ULP allegedly
committed by RBS (ULP: Gross violation of existing CBA, EEs coercion,
Union interference, and discrimination)
7. During the conciliation meeting, RBS informed GMAEU’s officers: (1) that
RBS did not violate any provision in the CBA since the issuance of the
guidelines was a management prerogative duly recognized in their
agreement. (2) As regards GMAEU’s charges of coercion, union
interference and discrimination, RBS argued that these alleged unfair
labor practices were neither raised by the union in its 26 June 1991
letter nor during their 3 July and 10 July 1991 talks.
8. RBS’ counsel requested GMAEU’s officers to name the persons or officers of
RBS involved in the alleged ULP and to state the specific act or acts
complained of so that RBS management could adequately refute said
allegations or impose appropriate disciplinary actions against its erring
officers. GMAEU’s officers, however, ignored both RBS’ and the labor
conciliator’s requests for a bill of particulars.
9. In a second conciliation meeting, RBS reiterated their request, which was
denied by the Union and the latter refused to hold further talks with RBS. As
such, RBS filed a MTD GMAEU’s notice of strike and forewarned the Union
about the consequences of an illegal strike.
10. On August 2, 1991, Union held a strike. On the same day, RBS filed a
complaint for illegal strike and ULP against GMAEU.
11. SOLE assumed jurisdiction over the case, issued a return to work order. LA:
RBS is NOT guilty of ULP. NLRC affirmed LA decision.
12. On the illegal strike case, LA: declared strike illegal. Union officers who
knowingly participated in the illegal strike to have validly lost their
employment status.
a. The notice of strike did not specifically charge the company (RBS)
of unfair labor practices, only pro forma allegations of gross
violation of the collective bargaining agreement, employees
coercion, union interference, and discrimination.
b. It is “defective as it consisted of vague and general charges which
could not be substantiated and which the company could not
properly defend itself against.
c. The absence of evidence on record that the mandatory cooling-off
period and strike vote under the law were complied which renders
the strike staged by the respondents illegal per se on technical
grounds.
13. GMAEU argued that their acts were justified based on its honest belief that
RBS was committing unfair labor practices. Stated otherwise, “the
presumption of legality (of the strike) prevails even if the allegations of
unfair labor practices are subsequently found out to be untrue.”
14. RBS: Union cannot invoke the protective mantle of the good faith strike
doctrine because the alleged issues in the notice of strike were never
substantiated by the union either before or during the conciliation
proceedings. The union violated the no strike clause under the collective
bargaining agreement and should be held accountable for their acts by
considering them validly dismissed from their employment with RBS.
Issue/s: WON RBS committed acts of ULP which induced them to proceed with
the strike on August 2 1991.
Held: No. There was no strikeable issue to support Union’s subject strike.
Evidence show that the union anchored its position on alleged unfair labor
practices in order to evade not only the grievance machinery but also the no
strike clause in their collective bargaining agreement with RBS. Petition
dismissed.
Ratio:
1. The notice of strike filed by the union contained general allegations that
RBS management committed ULP. It is the union, therefore, who had the
burden of proof to present substantial evidence to support these
allegations.
2. During the talks, the union never raised the issue of unfair labor practices
allegedly committed by RBS’ officials under Article 248 of the Labor Code.
But in its notice of strike filed two days later, the union raised issues of
coercion, discrimination, and union interference for the first time.
3. The facts and the evidence did not establish even at least a rational basis
why the union would wield a strike based on alleged unfair labor practices
it did not even bother to substantiate during the conciliation proceedings.
4. It is not enough that the union believed that the employer committed acts of
unfair labor practice when the circumstances clearly negate even a prima
facie showing to warrant such a belief.
5. RBS did not issue its implementing guidelines dated 24 June 1991
concerning the availment of leaves and rendering of overtime services in an
arbitrary manner.
a. The union was promptly informed that RBS’ decision was based on
its management prerogative to regulate all aspects of employment,
subject of course to well-defined limitations imposed by law or by
contract.
6. Even assuming arguendo that in the issuance of said guidelines RBS may
have violated some provisions in the CBA, there was no palpable showing
that the same was a flagrant and/or malicious refusal to comply with its
economic provisions. Hence, the law mandates that said violation “shall
not be considered unfair labor practice and shall not be strikeable.”
7. The union should have immediately resorted to the grievance machinery
established in their agreement with RBS. In disregarding said procedure the
union leaders who knowingly participated in the illegal strike “have acted
unreasonably, and, as such, the law cannot interpose its hand to protect
them from the consequences of their behavior.”
128 CABEU-NFL v CAB
 CABEU-NFL sent CAB a proposed CBA, seeking increases in the daily
wage and vacation and sick leave benefits of the monthly employees
and the grant of leave benefits and 13th month pay to seasonal workers.
 CAB responded with a counter-proposal to the effect that the
production bonus incentive and special production bonus and
incentives be maintained. CAB also agreed to execute a pro-rated
increase of wages every time thee government would mandate an
increase in the minimum wage. CAB, however, did not agree to grant
additional and separate Christmas bonuses.
 CABUE-NFL sent an amended proposal reducing its previous demand
regarding wages and bonuses.
 CAB maintained its position on the matter. Thus, the negotiations
resulted in a deadlock.
 CABEU-NFL filed a notice of strike with the NCMB.
 NCM assumed jurisdiction and summoned the parties to conciliation
conferences.
 CABEU-NFL requested for copies of CAB’s financial statements and
asked for the resumption of conciliation meetings.
 CAB alleged that CABEU-NFL already lost its majority status by reason
of the disauthorization and withdrawal of support by more than 90% of
the rank and file employees in the bargaining unit, and that the workers
organized themselves into a new union, known as CABELA, who had
concluded a new CBA with CAB. Thus, the request for further
conciliation conference will serve no lawful and practical purose.
 NCMB failed to act on the letter of CAB.
 Reacting from the letter of CAB, CABEU-NFL filed a complaint for ULP
for the former’s refusal to bargain with it
 LA: dismissed complaint for ULP.
 It was incumbent upon NCMB to make a ruling.
 When the conciliation by NCMB has not been officially
concluded, ULP complaint is not only without merit but also
premature.
 NLRC: reversed LA.
 CABEU-NFL is the certified collective bargaining agent and its
status as such was determined in a certification election.
 There was no reason for CAB to deal and negotiate with
CABELA.
 CA: reversed NLRC.
 CAB was not scuttling the ongoing negotiations towards a new
CBA. It was simply propounding a position for the NCMB to
rule on.
 There is nothing that establishes CAB’s predetermined resolve
not to budge from an initial position – perhaps stubbornness
 but not the absence of good faith to pursue collective  Moreover, the filing of the complaint for unfair labor practice was
bargaining. premature inasmuch as the issue of collective bargaining is still pending
 CAB argues that in view of the disassociation of more than 90% of rank before the NCMB.
and file workers from CABEUNFL, it was constrained to negotiate and
conclude in good faith a new CBA with CABELA. CAB emphasizes that it
declined further negotiations with CABEUNFL in good faith because to
continue with it would serve no practical purpose.
ISSUE: WON CAB is guilty of ULP.- NO

 Article 247 of the LC provides that “Unfair labor practices violate the
constitutional right of workers and employees to selforganization, are
inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with
each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-
management relations.”
 Article 248 of the LC likewise provides that a violation of the “duty to
bargain collectively as prescribed by this Code” is an act constituting
ULP by an employer.
 For a charge of ULP to prosper, it must be shown that CAB was
motivated by ill will, bad faith, or fraud, or was oppressive to labor, or
done in a manner contrary to morals, good customs, or public policy,
and, of course, that social humiliation, wounded feelings or grave
anxiety resulted in suspending negotiations with CABEUNFL.
 In this case, CAB believed that CABEUNFL was no longer the
representative of the workers. It just wanted to foster industrial peace
by bowing to the wishes of the overwhelming majority of its rank and
file workers and by negotiating and concluding in good faith a CBA with
CABELA. Such actions of CAB are nowhere tantamount to antiunionism-
the evil sought to be punished in ULP cases.
 Basic is the principle that good faith is presumed and he who alleges
bad faith has the duty to prove the same. By imputing bad faith to the
actuations of CAB, CABEUNFL has the burden of proof to present
substantial evidence to support the allegation of unfair labor practice.
o However, CABEUNFL refers only to the
circumstances mentioned in the letter by CAB
to the NCMB, namely, the execution of the
supposed CBA between CAB and CABELA and
the request to suspend the negotiations, to
conclude that bad faith attended CAB’s
actions.
o CABEUNFL, in simply relying on the said
letter, failed to substantiate its claim of ULP to
rebut the presumption of good faith.
129 Union of Filipro Employees-Drug vs. NLRC
G.R. No. 158930-31 August 22, 2006
Topic: Bargainable Issues
FACTS:
1. In consideration of the impending expiration of the existing CBA
between Nestle and UFE-DFA-KMU, Presidents of the Alabang and
Cabuyao Divisions of the Union, Pasco and Fortuna, informed Nestle of
their intent to open our new CB Negotiation for the year 2001-2004 as
early as June 2001
2. Nestle acknowledged receipt of the letter; also informed the Union that
it was preparing its counter-proposal and proposed ground rules that
shall govern the conduct of the CB negotiations
3. In another letter addressed to Union Cabuyao Division, Nestle
underscored its position that unilateral grants, one-time company
grants, company-initiated policies and programs, which include, but are
not limited to the Retirement Plan, Incidental Straight Duty Pay and
Calling Pay Premium, are by their very nature not proper subjects of
CBA negotiations and therefore shall be excluded therefrom; clarified
that with the closure of the Alabang Plant, the CBA negotiations will
only be applicable to the covered employees of the Cabuyao Plant;
hence, the Cabuyao Division became the sole bargaining unit involved
4. Dialogue between the company and union ensued
5. Nestle requested the NCMB to conduct preventive mediation
proceedings between it and the Union
6. Conciliation proceedings nevertheless proved ineffective.
7. Complaining, in essence, of bargaining deadlock pertaining to economic
issues, i.e., retirement (plan), panel composition, costs and attendance,
and CBA, UFE-DFA-KMU filed a Notice of Strike; One week later,
another strike was filed by the Union, this time predicated on Nestls
alleged unfair labor practices i.e., bargaining in bad faith in that it was
setting preconditions in the ground rules by refusing to include the
issue of the Retirement Plan in the CBA negotiations.
8. Nestle filed with the DOLE a Petition for Assumption of Jurisdiction,
praying that Secretary of DOLE assume jurisdiction over the labor
dispute
9. Sec. Sto. Tomas: assumed jurisdiction; strike enjoined 10. Union sought
reconsideration; denied
10. Despite efforts by NCMB, employee members of Union went on strike
(Cabuyao Plant)
11. Sec. Sto. Tomas issued yet another Order directing: - the members of
UFE-DFA-KMU to return-towork within twenty-four (24) hours from
receipt of such Order; - Nestl to accept back all returning workers
under the same terms and conditions existing preceding to the strike; -
both parties to cease and desist from committing acts inimical to the
on-going conciliation proceedings leading to the further deterioration
of the situation; and - the submission of their respective position papers
within ten (10) days from receipt thereof.
12. Nestle and Union filed their respective position papers
13. Union filed several pleadings; Eventually filed a petition for certiorari
with application for the issuance of TRO or a WPI before CA
14. Then acting Sec of DOLE Brion came out with an order recognizing that
the present Retirement Plan at Cabuyao Plant is a unilateral grant that
the parties have expressly so recognized; all union demands not
covered by the provisions of CBA are denied, etc.
15. Union moved to reconsider; denied. Both parties appealed. Hence, these
petitions for review on certiorari
ISSUE: Whether the Retirement Plan is a proper subject to be included in the
CBA negotiations between the parties, hence, negotiable (YES)
HELD:
 It cannot be denied that the CBA that was about to expire at that time
contained provisions respecting the Retirement Plan. As the latter
benefit was already subject of the existing CBA, the members of UFE-
DFA-KMU were only exercising their prerogative to bargain or
renegotiate for the improvement of the terms of the Retirement Plan
just like they would for all the other economic, as well as non-economic
benefits previously enjoyed by them.
 Precisely, the purpose of collective bargaining is the acquisition or
attainment of the best possible covenants or terms relating to economic
and noneconomic benefits granted by employers and due the
employees. The Labor Code has actually imposed as a mutual obligation
of both parties, this duty to bargain collectively. The duty to bargain
collectively is categorically prescribed by Article 252 of the said code. It
states:
o A RT. 2 5 2 . M E A N I N G O F D U T Y TO B A R G A I N
COLLECTIVELY. The duty to bargain collectively means the
performance of a mutual obligation to meet and confer
promptly and expeditiously and 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 grievances or questions
arising under such agreement and executing a contract
 incorporating such agreement if requested by either party, but
such duty does not compel any party to agree to a proposal or
to make any concession.
o ART. 253. DUTY TO BARGAIN COLLECTIVELY WHEN THERE
EXISTS A COLLECTIVE BARGAINING AGREEMENT. The duty to
bargain collectively shall also mean that either party shall not
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 sixty day
period and/or until a new agreement is reached by the parties.
 And, in demanding that the terms of the Retirement Plan be opened for
renegotiation, the members of UFE-DFA-KMU are acting well within
their rights as we have, indeed, declared that the Retirement Plan is
consensual in character; and so, negotiable. Contrary to the claim of
Nestle that the categorical mention of the terms unilateral agreement in
the letter and the
 MOA signed by the representatives of UFE-DFA-KMU, had, for all
intents and purposes worked to estop UFE-DFA-KMU from raising it as
an issue in the CBA negotiations, our reading of the same, specifically
Paragraph 6 and subparagraph 6.2:
o 6. Additionally, the COMPANY agree to extend the following
unilateral grants which shall not form part of the Collective
Bargaining Agreement (CBA):
 6.2. Review for improvement of the COMPANYs
Retirement Plan and the reference on the Retirement
Plan in the Collective Bargaining Agreement signed on
4 July 1995 shall be maintained.
hardly persuades us that the members of UFE-DFA-KMU have agreed to
treat the Retirement Plan as a benefit the terms of which are solely
dependent on the inclination of the Nestle and remove the subject
benefit from the ambit of the CBA. The characterization unilaterally
imposed by Nestl on the Retirement Plan cannot operate to divest the
employees of their vested and demandable right over existing benefits
voluntarily granted by their employer. Besides, the contention that
UFE-DFA-KMU has abandoned or forsaken our earlier pronouncement
vis--vis the consensual nature of a retirement plan is quite inconsistent
with, nay, is negated by its conduct in doggedly asking for a
renegotiation of said benefit.
130 Caltex Filipino Managers and Supervisors Association v. Court of
Industrial Relations, Caltex Philippines Inc., W.E. Menefee and B.F.
Edwards
TOPIC: ULP; Interpretation
Facts:
 Caltex Filipino Managers and Supervisors’ Association is a labor
organization of Filipino managers and supervisors in Caltex
(Philippines) Inc.
 The Association sent a set of proposal to the Company wherein one of
the demands was the recognition of the Association as the duly
authorized bargaining agency for managers and supervisors in the
Company.
 The Company countered that the managerial employees are not
qualified for membership in a labor organization; hence it suggested
that the Association institute a certification proceeding as to remove
any question with regard to position titles that should be included in
the bargaining unit.
 The Association felt disinclined to follow the suggestion of the
Company, so the Company initiated a certification proceeding.
 The Association filed a notice to strike on the ground of refusal to
bargain in good faith and to act on demands and resort to union-
busting.
 During the hearing of the certification proceedings, Judge Tabigne
cautioned the parties to maintain the status quo; he specifically advised
the employees not to go on strike, making it clear, however, that in the
presence of unfair labor practices they could go on strike even without
any notice.
 On the basis of the strike notice filed and in view of acts committed by
the Company which the Association considered as constituting unfair
labor practice, the Association struck, after the efforts exerted by the
Bureau of Labor Relations to settle the differences between the parties
failed.
 Then through an Urgent Petition or as incident of the certification
election proceedings, the Company prayed the strike to be declared
illegal and the officers and members of the Association be held and
punished for contempt and be declared to have lost their employee
status.
 The Association filed a motion to dismiss questioning the jurisdiction of
the industrial court. – DENIED
 Because of the settlement between the parties on some of their
disputes, the Association filed with the court a manifestation to which a
copy of the return-to-work agreement was attached, had become moot
and academic.
  The Company filed a counter-manifestation disputing the
representation of the Association.
 respondent court en banc issued a resolution allowing the withdrawal
of the Association’s motion for reconsideration against the order on the
theory that there was justification for such withdrawal.
 Relative to the resolution Company filed a motion for clarification
which the Association opposed for it contended that such motion was in
reality a motion for reconsideration and as such filed out of time. But
respondent court brushed aside the Association’s opposition and
proceeded to clarify the resolution to mean that the Company was not
barred from continuing with the certification election proceedings.
 At the hearing, the court decided thereupon to secure evidence from
the parties to enlighten it on the interpretation of the provisions of the
return-to-work agreement relied upon by the Association as rendering
the case already moot and academic.
 After a protracted preliminary investigation, the Association’s charge
for unfair labor practices against the Company and its officials was
given due course through the filing by the prosecution division of
respondent court of the corresponding complaint against Caltex
(Philippines), Inc., W. E. Menefee and B.F. Edwards.
 that the Company refused to bargain although the Association
commands majority representation;
 that due to the steps taken by the Company to destroy the
Association or discourage its members from continuing their
union membership, the Association was forced to file a strike
notice;
 that during the strike the Company and its officers continued
their efforts to weaken the Association as well as its picket
lines.
 The ULP case was dismissed for lack of merit and substantial evidence
Issue:
WON the Court of Industrial Relations has jurisdiction over the ULP case -
YES
WON the Company is guilty of unfair labor practice - YES
Ratio:
JURISDICTION
Respondent’s court’s jurisdiction over Case No. 1484MC(1) has to be tested by
the allegations of the “Urgent Petition” dated April 26, 1965 filed by the
Company in relation to the applicable provisions of law. A reading of said
pleading shows that the same is for injunctive relief under Section 9(d) of
Republic Act No. 875 (Magna Charta of Labor); for contempt, obviously
pursuant to Sec. 6 of Commonwealth Act No. 103 in conjunction with Sec. 3(b)
of Rule 71 of the Rules of Court; and for forfeiture of the employee status of the
strikers by virtue of their participation in what the Company considered as an
“illegal strike.”
It is well known that the scheme in Republic Act No. 875 for achieving industrial
peace rests essentially on a free and private agreement between the employer
and his employees as to the terms and conditions under which the employer is
to give work and the employees are to furnish labor, unhampered as far as
possible by judicial or administrative intervention. On this premise the
lawmaking body has virtually prohibited the issuance of injunctive relief
involving or growing out of labor disputes.
The prohibition to issue labor injunctions is designed to give labor a comparable
bargaining power with capital and must be liberally construed to that end. It is
said that the prohibition creates substantive and not purely procedural law.
Within the purview of our ruling, speaking through Justice Labrador, in Social
Security Employees Association (PAFLU), et al. vs. The Hon. Edilberto Soriano,
there can be no injunction issued against any strike except in only one
instance, that is, when a labor dispute arises in an industry indispensable
to the national interest and such dispute is certified by the President of
the Philippines to the Court of Industrial Relations in compliance with Sec.
10 of Republic Act No. 875.
As a corollary to this, an injunction in an uncertified case must be based on the
strict requirements of Sec. 9 (d) of Republic Act No. 875; the purpose of such an
injunction is not to enjoin the strike itself, but only unlawful activities. To the
extent, then, that
the Company sought injunctive relief under Sec. 9(d) of Republic Act No.
875, respondent court had jurisdiction over the Company’s “Urgent
Petition” dated April 26, 1965.
UNFAIR LABOR PRACTICE
We are convinced from the records that on the whole the means employed by
the strikers during the strike, taking into account the activities of the Company
and the non-striking employees on the same occasion, cannot be labeled as
unlawful; in other words, the Company itself through the provocative, if not
unlawful, acts of the nonstriking employees is not entirely blameless for the
isolated incidents relied upon by respondent court as tainting the picketing of
the strikers with illegality.
What is clearly within the law is the concerted activity of cessation of work in
order that a union’s economic demands may be granted or that an employer cease
and desist from the unfair labor practice. That the law recognizes as a right.
There is though a disapproval of the utilization of force to attain such an
objective. For implicit in the very concept of a legal order is the maintenance of
peaceful ways. A strike otherwise valid, if violent, in character, may be placed
beyond the pale. Care is to be taken, however, especially where an unfair labor
practice is involved, to avoid stamping it with illegality just because it is tainted by
such acts. To avoid rendering illusory the recognition of the right to strike,
responsibility in such a case should be individual and not collective. It could be
reasonably concluded then that even if justified as to end, it becomes illegal
because of the means employed.
Under Sec. 14(c) of Republic Act No. 875, the parties themselves are required
“to participate fully and promptly in such meetings and conferences as the
(Conciliation)
Service may undertake.” In this case, the parties agreed to meet on April 21, 1965
and yet, notwithstanding this definite agreement, the Company sent no
representatives. The Company’s claim to bargaining in good faith cannot be
given credence in the face of the fact that W.E. Menefee, the Company’s
Managing Director, conveniently left Manila for Davao on April 17 or 18, 1965,
as admitted by
W.E. Wilmarth.
it is clear that the Company employed dilatory tactics doubtless to discredit
CAFIMSA before the eyes of its own members and prospective members as an
effective bargaining agent, postpone eventual recognition of the Association,
and frustrate its efforts towards securing favorable action on its economic
demands.
The guilty conduct of the Company before, during and after the strike of April
22, 1965 cannot escape the Court’s attention. It will suffice to mention typical
instances by way of illustration.
 Long prior to the strike, the Company had interferred with the Cebu
Supervisors’ Union by enticing Mapa into leaving the Union under the
guise of a promotion in Manila;
 shortly before the strike, B. R. Edwards, ManagerOperations, had
inquired into the formation and organization of the petitioner
Association in this case.
 During the strike, the Association’s President and VicePresident,
respectively, in 1965, in two coercion cases filed at that time and their
subsequent elimination from the charges at the initiative of the
Company after the settlement of the strike;
 the cutting off of telephone facilities extended to Association members
in the refinery;
 and the use of a member of the Association to spy for the company.
The discriminatory acts practiced by the Company against active unionists after
the strike furnish further evidence that the Company committed unfair labor
practices as charged.
131 Republic Savings Bank v. CIR
GR L-20303, September 27, 1967
 Republic Savings Bank EEs (Resuello, Jara, Allasas, Jola, Mendiola, De la
Cruz, Macaraeg, Rovilos) wrote to Ramon Racelis, Republic Savings
Bank President
 The EEs demanded that Racelis resign, due to:
 his tolerance for immorality, by employing women of questionable
character, one of whom he had illicit relations with
 nepotism; by appointing relatives to good positions
 promotions; by his preference for relatives
 These EEs were dismissed. Hence, these EEs filed a ULP case against
the Bank, because RA 875 provides that it is ULP to “dismiss, discharge,
prejudice or discriminate against an EE for having filed charges or for
having given or being about to give testimony”
 The Bank defends itself by saying that the EEs were dismissed for
having written and published apparently libelous letter that caused the
discredit of officers and EEs of the bank but also of the bank itself
 Furthermore, the Bank says that in Royal Interocean v. CIR, the Court
says that there is no ULP if the dismissal was not related to the right of
self-organization.
 CIR ruled for EEs; ordered Republic to take them back
Issue: Did the dismissal of the EEs constitute ULP? YES.
 The dismissal constituted ULP on different grounds (interference, filing
charges, refusal to bargain):
 There was interference with concerted activities designed for mutual
and/protection: Even if the EEs wrote the letter in their individual
capacities, they were still protected for they were engaged in concerted
activity, in the exercise of their right of self-organization, which
includes concerted activity for mutual aid and protection, and with this
right constitutes ULP.
 If the EEs make protests or demands in furtherance of their interests as
EEs, it is a concerted activity protected by the Industrial Peace Act. It is
not necessary that union activity be involved or that collective
bargaining be contemplated
 The letter complained of nepotism, favoritism and other management
practices, and as such the EEs were acting within a sphere of collective
bargaining.
  There was also ULP for dismissal due to the filing of charges.
 There was also ULP for refusal to bargain collectively with the EE
representatives, because the Bank should have resorted to the
grievance committee first.
 Instead of stifling criticism, the Bank should have allowed the
respondents to air their grievances, as a measure of good faith
bargaining
 Hence, Republic Savings Bank was guilty of ULP.
132 Hacienda Fatima vs. National Federation of Sugarcane Workers-Food
and General Trade, 396 SCRA 518, G.R. No. 149440 January 28, 2003
FACTS:
 HF did not look with favor workers having organized themselves into a
union. When the Union (respondents) was certified as the collective
bargaining representative, HF refused to sit down with the Union for
the purpose of entering into a CBA.
 In protest, Union staged a strike which was however settled upon the
signing of a Memorandum of Agreement which stipulated among others
that:
a) The parties will initially meet for CBA negotiations in January 1991
and will conclude the same within thirty (30) days.
b) The management prioritize women workers who are members of the
union in case work relative x x x or amount[ing] to gahit and [dipol]
arises.
c) Ariston Eruela Jr. will be given back his normal work load which is 6
days a week
d) The management will provide 15 wagons for the workers and that
existing workforce prior to the actual strike will be given priority.
However, in case the said workforce would not be enough, the
management can hire additional workers to supplement them.
e) The management will not anymore allow the scabs, numbering about
18 workers[,] to work in the hacienda; and
f) The union will immediately lift the picket upon signing of this
agreement.
 HF alleged that Union failed to load some wagons, HF reneged on its
commitment to bargain collectively and employed all means including
the use of private armed guards to prevent the organizers
from entering the premises. 
 No work assignments were given to respondents which forced the
union to stage a strike. 
 Due to conciliation efforts by the DOLE, another MOA was signed by the
parties & they met in a conciliation meeting. 
 In the conciliation meeting which was conducted, Luisa Rombo,
Ramona Rombo, Bobong Abrega, and Boboy Silva were not considered
by the company as employees, and thus may not be members of the
union. It was also agreed that a number of other employees will be
reinstated.
 HF again reneged on its commitment, Union filed a complaint with LA.
 HF on the other hand, accused Union of refusing to work and being
choosy in the kind of work they have to perform.
 LA: ruled in favor of HF.
 NLRC: LA Decision is set aside.
 CA: HF guilty of ULP. Also, that while the work of respondents was
seasonal in nature, they were considered to be merely on leave during
the off-season and were therefore still employed by petitioners.
Moreover, the workers enjoyed security of tenure. Any infringement
upon this right was deemed by the CA to be tantamount to illegal
dismissal.
Issue:
Whether or not HF is guilty of ULP because of an act violative of right to self-
organization: Interference, Restraint and Coercion?
Held:
Yes. Both the LA and CA found that:
“Indeed, from respondents’ refusal to bargain, to their acts of economic
inducements resulting in the promotion of those who withdrew from
the union, the use of armed guards to prevent the organizers to come
in, and the dismissal of union officials and members, one cannot but
conclude that respondents did not want a union in their hacienda—a
clear interference in the right of the workers to self-organization.”
Their findings are binding on the Supreme Court. Their conclusions are
accorded great weight upon appeal, especially when supported by substantial
evidence. Consequently, the Court is not duty-bound to delve into the accuracy
of their factual findings, in the absence of a clear showing that these were
arbitrary and bereft of any rational basis.
In case Sir Asks:
The SC considered the respondents regular employees. This is because
although the employers have shown that respondents performed work that
was seasonal in nature, they failed to prove that the latter worked only for the
duration of one particular season. In fact, petitioners (HF) do not deny that
these workers have served them for several years already. Hence, they are
regular—not seasonal—employees.
Moreover, settled is the rule that “Where there is no showing of clear, valid and
legal cause for the termination of employment, the law considers the matter a
 case of illegal dismissal and the burden is on the employer to prove that the
termination was for a valid and authorized cause.” In this case, petitioners
failed to prove any such cause for their dismissal.
133 SCOTY DEPT STORE v NENA MICALLER
Topic: Acts violative of self-organization; Interrogation
FACTS
 Nena Micaller was employed as a salesgirl in the Scoty's Department
Store. She had a higher salary compared to other ee; she won first prize
for being best seller, most cooperative and most honest ee.
 She organized a union among ee, which was later affiliated with
National Labor Union.
 The union sent a petition to the store containing ten demands and no
Nena was called by the management for questioning and, in the
manager's office, er asked who were the members, but Nena pretended
not to know them.
 Er went to the Nena’s house to question her regarding union
membership, and she was even brought to er’s counsel and was made
to sign withdrawal from union.
 Er even asked each ee whether they are member of a union.
 The Union gave notice to strike; the management hired temporary ee
equal in number to the old.
 The new employees were affiliated with another labor union.
 An information for threats was filed against Nena Micaller before the
municipal court. This was dismissed. Another information was filed
against Nena Micaller for slander, which was followed by series of
slander case.
 Nena was dismissed for "insulting the owner of the store and for taking
to the girls inside the store during business hours."
 Nena filed a case for ULP alleging that she was dismissed by them
because of her membership in the National Labor Union and that, prior
to her separation, said employers had been questioning their
employees regarding their membership in said union and had
interfered with their right to organize under the law.
 Industrial court found petitioner guilty of ULP.
 Er denied the charge claiming that Nena was dismissed due to her
misconduct and serious disrespect to the management and her co-ee so
much so that several criminal charges were filed against her.
ISSUE: WON the employer is guilty of ULP?
HELD: Yes.
RATIO:
  The industrial court has made a careful analysis of the evidence and
has found the petitioners have really subjected complaint and her co-
employees to a series of questioning regarding their membership in the
union or their union activities which in contemplation of law are
deemed acts constituting unfair labor practice [Section 4, (a) (4) ,
Republic Act No. 875]
 As per American jurisprudence:
o Questioning of employees concerning union
membership and activities and disparaging
remarks by supervisory employees made in
such away as to hamper the exercise of free
choice on the part of the employees, have
been uniformly condemned as a violation of
the Act.
o  there is abundant evidence of the questioning
of employees as to membership in the union
and of anti-union expressions by the
company's superintendent made in such away
as to discourage union membership.
WHO SHOULD BE FINED: THE MANAGER OR THE OWNER (who had no
participation in management)
 Court said that the imposition of penalty is not within the power of
industrial court.
 In conclusion, our considered opinion is that the power to impose the
penalties provided for in section 25 of Republic Act No. 875 is lodged in
ordinary courts, and not in the Court of Industrial Relations,
notwithstanding the definition of the word "Court" contained in section
2(a) of said Act. Hence, the decision of of the industrial court in so far as
it imposes a fine of P100 upon petitioners is illegal and should be
nullified.
 e to the stalemate of salary increases.
 The Union demanded from the Companies their counter-proposals, but
instead, the Companies presented facts about their financial position.
 This prompted the Unions to declare a strike in protest against what
they considered the Companies’ unfair labor practices.
 Meanwhile, 87 unionists were reclassified as supervisors without
increase in salary nor in responsibility while negotiations were going
on in the Department of Labor after the notice to strike was served on
the Companies. These employees resigned from the Unions.
 The Unions went on strike and picketed the offices of the Insular Life
Building at Plaza Moraga.
  Jose M. Olbes, the acting manager and president, sent individual letters
to the striking employees urging them to abandon their strike with a
promise of free coffee, movies, overtime pay, and accommodations.
 He also warned the strikers if they fail to return to work by a
certain date, they might be replaced in their jobs.
 The Union continued the strike.
 The Companies hired men to break into the picket lines resulting in
violence, and the filing of criminal charges against some union officers
and members.
 Alleging that some non-strikers were injured and with the use of
photographs as evidence, the Companies then filed criminal charges
against the strikers with the City Fiscal’s Office.
 The Companies, again through the respondent Olbes, sent individually
to the strikers a letter.
 The Companies told the strikers that if they are still interested
in continuing their employment, and that no criminal charges
are pending against them, then they were given a deadline to
when they should report for work. If not, they will be replaced.
 Among the 120 criminal charges filed against the Union members, only
3 were not dismissed.
 When the strikers called off their strike to return to their jobs, they
were subjected to a screening process by a management committee,
among the members were Garcia and Enaje.
 After screening, eighty-three (83) strikers were rejected due to pending
criminal charges, and refused readmission of thirty-four (34) officials
and members of the Unions who were most active in the strike.
 The CIR prosecutor filed a complaint for unfair labor practice against
the Companies, specifically (1) interfering with the members of the
Unions in the exercise of their right to concerted action; and (2)
discriminating against the members of the Unions as regards
readmission to work after the strike on the basis of their union
membership and degree of participation in the strike.
 After the trial, the Court of Industrial Relations dismissed the Unions’
complaint for lack of merit.
ISSUES:
 Whether the Companies are guilty of ULP
 When they sent individual letters to the strikers with the
promise of additional benefits, and notifying them to either
return to work, or lose their jobs. YES.
 For discriminating against the striking members of the Unions
in readmission of employees after the strike. YES.
 For dismissing Union members without investigation. YES.
C. Re: Sending of letters
 Companies: Legitimate exercise of freedom of speech.
 SC: WRONG. The said letters were directed to the striking employees
individually, by registered special delivery mail at that, without being
coursed through the Unions which were representing the employees in
the collective bargaining.
 It is an unfair labor practice for an employer operating under a
collective bargaining agreement to negotiate or to attempt to negotiate
with his employees individually in connection with changes in the
agreement. Reason: Although the union is on strike, the employer is still
under obligation to bargain with the union as the employees’
bargaining representative
 It is likewise an act of interference for the employer to send a letter to
all employees notifying them to return to work at a time specified
therein, otherwise new employees would be engaged to perform their
jobs.
 All the above-detailed activities are unfair labor practices because they
tend to undermine the concerted activity of the employees, an activity
to which they are entitled free from the employer’ molestation.
 Moreover, the first letter containing promises of benefits to the
employees in order to entice them to return to work, it is not
protected by the free speech provisions of the Constitution. Same
with the 2nd letter because it contained threats to obtain
replacements for striking employees.
 The free speech protection under the Constitution is inapplicable
where the expression of opinion by the employer of his agent
contains a promise of benefit, or threats, or reprisal.
 When the Companies offered reinstatement and attempted to bribe the
strikers with comfortable cots, free coffee and occasional movies,
overtime pay for work performed in excess of eight hours, and
arrangements for their families, so they would abandon the strike and
return to work, they were guilty of strike-breaking and/or union-
busting and, consequently, of unfair labor practice.
D. Re: Readmission of Employees
 Some of the members of the Unions were refused readmission because
they had pending criminal charges.
 However, despite the fact they were able to secure clearances, 34
officials and members were still refused readmission on the alleged
ground that they committed acts inimical to the Companies.
 It should be noted, however, that non-strikers who also had criminal
charges pending against them in the fiscal’s office, arising from the
same incidents whence against the criminal charges against the strikers
are involved, were readily readmitted and were not required to secure
clearances.
  This is an act of discrimination practiced by the Companies in the
process of rehiring and is therefore a violation of Sec. 4(a)(4) of the
Industrial Peace Act.
 The respondent Companies did not merely discriminate against all
strikers in general since they separated the active rom the less active
unionists on the basis of their militancy, or lack of it, on the picket lines.
Discrimination exists where the record shows that the union activity of
the rehired strikers has been less prominent than that of the strikers
who were denied reinstatement.
E. Re: Dismissal without investigation
 The record shows that not a single dismissed striker was given the
opportunity to defend himself against the supposed charges against
him.
 As earlier mentioned, when the striking employees reported back for
work on the Companies refused to readmit them unless they first
secured the necessary clearances; but when all, except three, were able
to secure and subsequently present the required clearances, the
respondents still refused to take them back.
 Indeed, the individual cases of dismissed officers and members of the
striking unions do not indicate sufficient basis for dismissal.
ADDITIONAL NOTES:
 Violative of the rights to organize, form and join labor organizations are
the following acts:
o the offer of a Christmas bonus to all loyal
employees of a company shortly after the
making of a request by the union to bargain;
o wage increases given for the purpose of
mollifying employees after the employer has
refused to bargain
134 PHILIPPINE STEAM NAVIGATION CO. (PHILSTEAM) vs. PHILIPPINE
MARINE OFFICERS GUILD (PMOG)
G.R. Nos. L-20667 and 20669            October 29, 1965
1. PHILSTEAM is engaged in inter-island shipping.
2. PMOG is a labor union, affiliated with the Federation of Free Workers
(FFW) representing some of PHILSTEAM's officers.
3. The Cebu Seamen's Association (CSA) is another labor union that
represents some of PHILSTEAM's officers.
4. PMOG sent PHILSTEAM request for collective bargaining.
5. PHILSTEAM required PMOG to first prove its representation of a majority of
PHILSTEAM's employees before its demands will be considered as
requested.
6. PHILSTEAM started interrogating and investigating its captains, deck
officers, and engineers, to find out directly from them if they had
joined PMOG or authorized PMOG to represent them.
7. PMOG insists that PHILSTEAM consider its requests first before requiring
proof of majority representation.
8. PMOG filed a notice of intention to strike stating as reasons PHILSTEAM's
alleged refusal to bargain and unspecified ULP.
9. The CSA had meanwhile also transmitted its own demands to PHILSTEAM.
PHILSTEAM then recognized CSA as representing the majority of its
employees.
10. Subsequently, PHILSTEAM and CSA signed a CBA. On the same date, PMOG
declared a strike against PHILSTEAM.
11. 3 conferences at DOLE between PHILSTEAM and PMOG but all failed to
bring the parties to an agreement.
12. President certified the dispute the CIR.
13. CIR held that (1) PHILSTEAM committed ULP in having interfered with,
restrained and coerced employees in the exercise of their rights to self-
organization; (2) PMOG has not been shown to have committed ULP; and,
(3) the strike of PMOG against PHILSTEAM was justified and lawfully
carried out.
14. CIR orders PHILSTEAM to cease and desist from interrogating and
investigating their employees to determine whether they have authorized
PMOG or any other labor organization to represent them for the purpose of
collective bargaining; discouraging any of such employees from remaining
as a member of PMOG or any other labor organization, and encouraging
them to join CSA or any other labor organization, and, in any manner,
interfering with, restraining, or coercing their employees in the
exercise of their right to self-organization.
15. The acts found by CIR constituting the foregoing ULP are: (1) the
interrogation and investigation by PHILSTEAM's supervisory officials of its
captains, deck officers and engineers, to determine whether they had
authorized PMOG to act as their bargaining agent; (2) the subjection of
 PMOG to vilification; and (3) the participation of PHILSTEAM's pier
superintendent in soliciting membership for a competing union.
ISSUE: WON PHILSTEAM interrogation and investigation constitutes ULP?
HELD: YES. The asserted reason for the interrogation and investigation cannot
be sustained.
RATIO:
1. Investigation was started by PHILSTEAM even before it received PMOG's
reply stating a refusal to submit proof of majority representation.
Specifically, the investigation was put under way on the same day
PHILSTEAM sent its request that PMOG submit proof of majority
representation.
2. An employer is not denied the privilege of interrogating its employees
as to their union affiliation, provided the same is for a legitimate
purpose and assurance is given by the employer that no reprisals
would be taken against unionists. Nonetheless, any employer who
engages in interrogation does so with notice that he risks a finding of ULP if
the circumstances are such that his interrogation restrains or
interferes with employees in the exercise of their rights to self-
organization.
3. CIR has found that PHILSTEAM's interrogation of its employees had in fact
interfered with, restrained and coerced the employees in the exercise of
their rights to self-organization. Such finding being upon questions of fact,
the same cannot be reversed in SC, because it is fully supported by
substantial evidence.
4. Subjection by the company of its employees to a series of questionings
regarding their membership in the union or their union activities, in
such a way as to hamper the exercise of free choice on their part,
constitutes unfair labor practice. PHILSTEAM's interrogation squarely
falls under this rule.
5. EVIDENCE: Beliso, PHILSTEAM's purchasing agent, told Feliciano, that
PMOG was a "money-asking union," that "all the members of the FFW are
low people" and that CSA "is a good union." Guerrero, PHILSTEAM's inter-
island manager, had authorized Beliso to assist him in his investigation of
PMOG membership. The statement of Beliso was made in the presence of
PHILSTEAM office manager Mañ eru and pier superintendent Perez.
PHILSTEAM, through its supervisory officials, made it appear to Feliciano
that Beliso was speaking for or on behalf of the company, when he made the
remarks derogatory to PMOG and favorable to CSA.
6. PHILSTEAM assert an inconsistency on the part of CIR in finding that Beliso
was made to appear by PHILSTEAM supervisory officials as acting for them
as testified to by Feliciano, when said court elsewhere rejected a testimony
to this effect by Obispo.
7. PHILSTEAM refers to the testimony of Obispo, an engine officer, that he
signed up with CSA because he was intimidated by Beliso. Obispo's
testimony, however, referred to a different incident, wherein there was no
showing that Beliso acted in the presence and with the apparent approval of
high supervisory officials of PHILSTEAM. Furthermore, Obispo's credibility,
was put in doubt because he falsely stated that Beliso was an Assistant
Manager of PHILSTEAM. SC find no inconsistency or discrimination in the
appreciation of the evidence by CIR in giving credence to Feliciano, as to
one incident, while disbelieving Obispo, as to another.
8. Of record also stands the fact that PHILSTEAM pier superintendent Teves
helped bring about the affiliation of Capilitan, a PMOG member, with CSA,
by telling him that his joining with CSA would not affect his PMOG
affiliation. This incident was testified to by PHILSTEAM witnesses
themselves. While such a statement, if considered as an isolated remark,
may be a harmless expression of opinion, it in reality amounted to support
of CSA's membership solicitation drive.
9. CIR absolved PMOG from the charge of ULP. The alleged threats and
violence on the part of PMOG strikers were found not sufficiently
established by evidence.
10. PHILSTEAM, would contend that PMOG's strike was illegal, for the reason
that the purpose of the strike was illegal. It argued that PMOG staged a
strike so as to compel PHILSTEAM to bargain collectively with it
notwithstanding that it was a minority union.
a. First, the statement that PMOG is a minority union is not accurate.
CIR precisely found that there has been no proof as to which union
represented the majority of PHILSTEAM employees. For lack of
showing that CSA represented the majority it declared the
PHILSTEAM-CSA CBA null and void. It stated that the parties to the
dispute were welcomed to file a petition for certification election to
decide this point.
b. Second, PMOG's strike was in retaliation to PHILSTEAM's ULP
rather than, as PHILSTEAM would picture it, an attempt to
undermine the PHILSTEAM-CSA agreement. PHILSTEAM's ULP,
consisting in its interference with the employees, rights to self-
organization started prior to PHILSTEAM-CSA agreement. It was
because of said unlawful act of the employer that the union struck.
11. As to the question of reinstatement, striking employees are entitled to
reinstatement, WON the strike was the consequence of the employer's ULP,
unless, where the strike was not the consequence of any ULP, the employer
has hired others to take the place of the strikers and has promised them
continued employment.
12. The present strike was the consequence of PHILSTEAM's ULP.
Reinstatement of the strikers, who have not found substantially equivalent
employment elsewhere, therefore follows reinstatement as a matter of
right, notwithstanding that the employer has hired others to take the place
of the strikers.
13. Even if the employer hires others to replace the strikers, thereby avoiding
paralysis of his business, if the strike is against an ULP on its part, the
employer is bound to reinstate the strikers.
135 THE INSULAR LIFE ASSURANCE CO. LTD. EMPLOYEES ASSN. v. INSULAR
LIFE ASSURANCE CO. LTD.
Acts Violative of the R2SO; Speech, Espionage, Economic Coercion
1. Insular Life Assurance Employees Association-NATU, FGU Insurance Group
Workers and Employees Association-NATU and Insular Life Building
Employees Association-NATU (Unions), while members of FFW, entered
into a separate CBAs with Insular Life Assurance and FGU Insurance
(Companies)
2. Two of the lawyers and officers of the Unions namely Felipe Enaje and
Ramon Garcia, tried to dissuade the Unions from disaffiliating with the FFW
and joining the National Association of Trade Unions (NATU), to no avail.
3. Enaje and Garcia left the FFW and secured employment with the Anti-
Dummy Board of the Department of Justice and were hired by the
companies.
a. Garcia as assistant corporate secretary and legal assistant
b. Enaje as personnel manager and chairman of the negotiating panel
for the Companies in the collective bargaining with the Unions.
4. The Unions jointly submitted proposals to the Companies for a modified
renewal of their respective CBAs.
5. Negotiations for the collective bargaining was conducted but resulted to a
deadlock.
6. Several conciliation conferences were held. The Unions dropped their
demand for Union Shop.
7. From April 25 to May 6, 1958, the parties negotiated on the labor demands
but with no satisfactory results due to the stalemate of salary increases.
8. The Union demanded from the Companies their counter-proposals, but
instead, the Companies presented facts about their financial position.
9. This prompted the Unions to declare a strike in protest against what they
considered the Companies’ unfair labor practices.
10. Meanwhile, 87 unionists were reclassified as supervisors without increase
in salary nor in responsibility while negotiations were going on in the
Department of Labor after the notice to strike was served on the
Companies. These employees resigned from the Unions.
11. The Unions went on strike and picketed the offices of the Insular Life
Building at Plaza Moraga.
12. Jose M. Olbes, the acting manager and president, sent individual letters to
the striking employees urging them to abandon their strike with a promise
of free coffee, movies, overtime pay, and accommodations.
a. He also warned the strikers if they fail to return to work by a
certain date, they might be replaced in their jobs.
13. The Union continued the strike.
14. The Companies hired men to break into the picket lines resulting in
violence, and the filing of criminal charges against some union officers and
members.
15. Alleging that some non-strikers were injured and with the use of
photographs as evidence, the Companies then filed criminal charges against
the strikers with the City Fiscal’s Office.
16. The Companies, again through the respondent Olbes, sent individually to
the strikers a letter.
a. The Companies told the strikers that if they are still interested in
continuing their employment, and that no criminal charges are
pending against them, then they were given a deadline to when
they should report for work. If not, they will be replaced.
17. Among the 120 criminal charges filed against the Union members, only 3
were not dismissed.
18. When the strikers called off their strike to return to their jobs, they were
subjected to a screening process by a management committee, among the
members were Garcia and Enaje.
19. After screening, eighty-three (83) strikers were rejected due to pending
criminal charges, and refused readmission of thirty-four (34) officials and
members of the Unions who were most active in the strike.
20. The CIR prosecutor filed a complaint for unfair labor practice against the
Companies, specifically (1) interfering with the members of the Unions in
the exercise of their right to concerted action; and (2) discriminating
against the members of the Unions as regards readmission to work after the
strike on the basis of their union membership and degree of participation in
the strike.
21. After the trial, the Court of Industrial Relations dismissed the Unions’
complaint for lack of merit.
ISSUES:
1. Whether the Companies are guilty of ULP
a. When they sent individual letters to the strikers with the promise
of additional benefits, and notifying them to either return to work,
or lose their jobs. YES.
b. For discriminating against the striking members of the Unions in
readmission of employees after the strike. YES.
c. For dismissing Union members without investigation. YES.
A. Re: Sending of letters
 Companies: Legitimate exercise of freedom of speech.
 SC: WRONG. The said letters were directed to the striking employees
individually, by registered special delivery mail at that, without being
coursed through the Unions which were representing the employees in the
collective bargaining.
 It is an unfair labor practice for an employer operating under a collective
bargaining agreement to negotiate or to attempt to negotiate with his
employees individually in connection with changes in the agreement.
Reason: Although the union is on strike, the employer is still under
 obligation to bargain with the union as the employees’ bargaining
representative
 It is likewise an act of interference for the employer to send a letter to all
employees notifying them to return to work at a time specified therein,
otherwise new employees would be engaged to perform their jobs.
 All the above-detailed activities are unfair labor practices because they tend
to undermine the concerted activity of the employees, an activity to which
they are entitled free from the employer’ molestation.
 Moreover, the first letter containing promises of benefits to the
employees in order to entice them to return to work, it is not
protected by the free speech provisions of the Constitution. Same with
the 2nd letter because it contained threats to obtain replacements for
striking employees.
 The free speech protection under the Constitution is inapplicable
where the expression of opinion by the employer of his agent contains
a promise of benefit, or threats, or reprisal.
 When the Companies offered reinstatement and attempted to bribe the
strikers with comfortable cots, free coffee and occasional movies, overtime
pay for work performed in excess of eight hours, and arrangements for their
families, so they would abandon the strike and return to work, they were
guilty of strike-breaking and/or union-busting and, consequently, of unfair
labor practice.
B. Re: Readmission of Employees
 Some of the members of the Unions were refused readmission because they
had pending criminal charges.
 However, despite the fact they were able to secure clearances, 34 officials
and members were still refused readmission on the alleged ground that
they committed acts inimical to the Companies.
 It should be noted, however, that non-strikers who also had criminal
charges pending against them in the fiscal’s office, arising from the same
incidents whence against the criminal charges against the strikers are
involved, were readily readmitted and were not required to secure
clearances.
 This is an act of discrimination practiced by the Companies in the process of
rehiring and is therefore a violation of Sec. 4(a)(4) of the Industrial Peace
Act.
 The respondent Companies did not merely discriminate against all strikers
in general since they separated the active rom the less active unionists on
the basis of their militancy, or lack of it, on the picket lines. Discrimination
exists where the record shows that the union activity of the rehired strikers
has been less prominent than that of the strikers who were denied
reinstatement.
C. Re: Dismissal without investigation
 The record shows that not a single dismissed striker was given the
opportunity to defend himself against the supposed charges against him.
 As earlier mentioned, when the striking employees reported back for work
on the Companies refused to readmit them unless they first secured the
necessary clearances; but when all, except three, were able to secure and
subsequently present the required clearances, the respondents still refused
to take them back.
 Indeed, the individual cases of dismissed officers and members of the
striking unions do not indicate sufficient basis for dismissal.
ADDITIONAL NOTES:
 Violative of the rights to organize, form and join labor organizations are the
following acts:
o the offer of a Christmas bonus to all loyal employees of a company
shortly after the making of a request by the union to bargain;
o wage increases given for the purpose of mollifying employees after
the employer has refused to bargain with the union, or for the
purpose of inducing striking employees to return to work;
o the employer’s promises of benefits in return for the strikers’
abandonment of their strike in support of the union.
 The test of whether an employer has interfered with and coerced
employees within the meaning of subsection (a) (1) is:
o Whether the employer has engaged in conduct which it may
reasonably be said tends to interfere with the free exercise of
employees right under section 3 of the Act.
o 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.
136
137 Republic Savings Bank vs. Court of Industrial Relations,
21 SCRA 226, No. L-20303
September 27, 1967
Topic: Acts Violative of the Right to Self-Organization
(Concerted Activities)
FACTS:
In the case at bar, 8 respondents wrote and published a letter to
the bank president, Ramon Recelis demanding his resignation on the
grounds of immorality, nepotism, favoritism and discrimination in the
appointment and promotion of bank employees. These employees
include- (1) Miss Edita Castro – whom the bank president was having
illicit relations with; (2) Nieces and nephews ; and (3) brother-in-law.
In 1958, the respondents filed a complaint in the CIR alleging
that the Bank's conduct violated section 4 (a) (5) of the Industrial Peace
Act which makes it an unfair labor practice for an employer “to dismiss,
discharge or otherwise prejudice or discriminate against an employee
for having filed charges or for having given or being about to give
testimony under this Act.”
The Bank moved for the dismissal of the complaint, contending
that respondents were discharged not for union activities but for having
written and published a libelous letter against the bank president.
CIR Ruling on the Motion to Dismiss:
The case was heard because according to CIR, Section 4 (a) (5)
applies to cases (as this case) in which an employee is dismissed or
discriminated against for having filed “any charges against his employer.
______________________________________________________________
In 1960, however, this Court overruled the decision of the CIR in
the Royal Interocean case and held that “the charge, the filing of which is
the cause of the dismissal of the employee, must be related to his right to
self-or-ganization in order to give rise to unfair labor practice on the part
of the employer,” because “under subsection 5 of section 4(a), the
employee's (1) having filed charges or (2) having given testimony or (3)
being about to give testimony, are modified by ‘under this Act’ appearing
after the last item.”
The Bank therefore renewed its motion to dismiss, but the court
held the motion in abeyance and proceeded with the hearing.
CIR Ruling on the case:
In 1962, the court rendered a decision finding the Bank guilty of unfair
labor practice and ordering it to reinstate the respondents, with full back
wages and without loss of seniority and other privileges.
CIR En Banc:
Affirmed the CIR Ruling. Hence, this APPEAL.
 DEFENSE #1.
In its appeal, the petitioner relies upon Royal Interocean Lines v.
CIR and Lakas ng Pagkakaisa sa Peter Paul v. CIR. It argues that
the court should have dismissed the complaint because the
discharge of the respondents had nothing to do with their union
activities as the latter in fact admitted at the hearing that the
writing of the letter-charge was not a “union action” but merely
their “individual” act.
 DEFENSE #2.
The petitioner also defends its action by invoking its right to
discipline for what it calls the respondents’ libel in giving undue
publicity to their letter-charge.
ISSUE:
Whether the dismissal of the eight (8) respondent employees by
the petitioner constituted an unfair labor practice within the meaning
and intendment of the Industrial Peace Act (Republic Act 875)
HELD:
Yes. The dismissal constituted an unfair labor practice within the
meaning and intendment of the Industrial Peace Act.
DEFENSE #1.
The Court ruled that the cases of Royal Interocean Lines v. CIR
and Lakas ng Pagkakaisa sa Peter Paul v. CIR are not applicable in this
case. In ruling, the Court compared these two cases with the present
case, viz:
Royal Interocean Lakas ng This case
Pagkakaisa
he employee’s letter the letter, which the that the dismissal of protests or demands, even by a small group of employees, if in
to the home office, for employee wrote to the respondents was furtherance of their interests as such, is a concerted activity protected by
writing which she the mother company made on account’ of the Industrial Peace Act. It is not necessary that union activity be
was dismissed, in violation of the the letter they had involved or that collective bargaining be contemplated.
complained of the local company’s rule, written, in which they
local manager’s denounced “wastage demanded the
“inconsiderate and of company funds.” resignation of the
DEFENSE #2.
untactful attitude” bank president for a Also, the Bank defends its action by invoking its right to
number of reasons discipline for what it calls the respondents’ libel in giving undue
touching labor- publicity to their letter-charge. To be sure, the right of self-organization
management of employees is not unlimited as the right of an employer to discharge
relations for cause is undenied. The Industrial Peace Act does not ouch the normal
exercise of the right of an employer to select his employees or to
Conclusion of the Conclusion of the Conclusion of the discharge them. It is directed solely against the abuse of that right by
Court: Court: Court: interfering with the countervailing right of self-organization.
NOT RELATED TO NOT RELATED TO RELATED TO UNION
Furthermore, in determining whether in fact the discharges are
UNION ACTIVITIES. UNION ACTIVITIES. ACTIVITIES; THUS,
made because of such a separable cause or because of some other
DONE IN DONE IN COLLECTIVE
activities engaged in by employees for the purpose of collective
INDIVIDUAL INDIVIDUAL BARGAINING bargaining, it is for the CIR, in the first instance, to make the
CAPACITY. CAPACITY. SHOULD HAVE BEEN determination, “to weigh the employer’s expressed motive in
DONE. determining the effect on the employees of management’s otherwise
equivocal act. The Act leaves to the court the work of applying its general
prohibitory language in the light of infinite combinations of events which
In this case, what the Bank should have done was to refer the
may be charged as violative of its terms. (Thus, the CIR, in ruling in favor
letter-charge to the grievance committee. This was its duty, failing which
of the respondents is in the proper position to do so)
it committed an unfair labor practice under section 4 (a) (6). For
collective bargaining does not end with the execution of an agreement. It
Ruling: ACCORDINGLY, the decision of July 4, 1962 and the resolution of
is a continuous process. The duty to bargain imposes on the parties
August 9, 1962 of the Court of Industrial Relations are affirmed, at
during the term of their agreement the mutual obligation “to meet and
petitioner’s cost.
confer promptly and expeditiously and in good faith xxx for the purpose
of adjusting any grievances or question arising under stich agreement”
and a violation of this obligation is, by section 4 (a) (6) and (b)(3) an
unfair labor practice.

Assuming that the latter acted in their individual capacities when

they wrote the letter-charge they were nonetheless protected for they
were engaged in concerted activity, in the exercise of their right of self-
organization that includes concerted activity for mutual aid and
protection, interference with which constitutes an unfair labor practice
under section 4(a)(l). For, as has been aptly stated, the joining in
138 VISAYAN STEVEDORE TRANSPORTATION COMPANY
(VISTRANCO) and RAFAEL XAUDARO,  each succeeding milling season, and their services were invariably availed
vs. COURT OF INDUSTRIAL RELATIONS, UNITED WORKERS' &
FARMERS' ASSOCIATION (UWFA) VENANCIO DANO-OG,
BUENAVENTURA AGARCIO and 137 others
FACTS:
1. Vistranco is engaged in the loading and unloading of vessels, with a branch
office in Hinigaran, Negros Occidental, under the management of said
Rafael Xaudaro.
2. Its workers are supplied by UWFA — whose men (affiliated to various
labor unions) have regularly worked as laborers of Vitranco during every
milling season since immediately after World War II up to the milling
season immediately preceding November 11, 1955, when Vitranco refused
to engage the services of Venancio Dano-og, Buenaventura, Agarcio and
137 other persons they claim, to their union activities.
3. A complaint for unfair labor practice was, accordingly, filed against the
Company and Xaudaro with the CIR. In due course, its Presiding Judge
issued the order appealed from (finding respondents guilty of unfair labor
practice as charged, directs them to cease and desist from such unfair labor
practice and to reinstate the complainants, with back wages from the date
they were laid off until reinstated) which was affirmed by the CIR sitting en
banc. Hence this petition for review by certiorari.
ISSUES:
1. Whether there is employer-employee relationship
2. Whether Vitranco has been guilty of unfair labor practice
3. Whether the order of reinstatement of Complainants, with backpay, is a
reversible error
HELD:
1. Vitranco maintains that it had never had an employer-employee relationship
with the Complainants, the latter's services having allegedly been engaged
by the UWFA not by Vitranco, and that, in any event, whatever contractual
relation there may have been between them had ceased at the end of each
milling season, so that the Company can not be guilty of unfair labor
practice in refusing to renew said relation at the beginning of the milling
season in November, 1955. However, although Complainants, through the
labor union to which they belong, form part of UWFA, there was no
independent contract between the latter, as an organization, and the
Company. After the first milling season subsequently to the liberation of the
Philippines, Complainants merely reported for work, at the beginning of
of by the Company, although an officer of the UWFA or union concerned
determined the laborers who would work at a given time, following a
rotation system arranged therefor.
In the performance of their duties, Complainants worked, however, under the
direction and control of the officers of the Company, whose paymaster, or disbursing
officer paid the corresponding compensation directly to said Complainants, who, in
turn, acknowledged receipt in payrolls of the Company. We have already held that
laborers working under these conditions are employees of the Company, in the same
manner as watchmen or security guards furnished, under similar circumstances, by
watchmen or security agencies, inasmuch as the agencies and/or labor organizations
involved therein merely performed the role of a representative or agent of the
employer in the recruitment of men needed for the operation of the latter's business.
2. As regards the alleged termination of employer-employee relationship
between the Company and the Complainants at the conclusion of each
milling season, it is, likewise, settled that the workers concerned are
considered, not separated from the service, but, merely on leave of absence,
without pay, during the off-season, their employer-employee relationship
being merely deemed suspended, not severed, in the meanwhile. Referring
to the unfair labor practice charge against the Company, we find, with the
CIR, that said charge is substantially borne out by the evidence of record, it
appearing that the workers not admitted to work beginning from November,
1955, were precisely those belonging to the UWFA and the Xaudaro, the
Company Branch Manager, had told them point-blank that severance of
their connection with the UWFA was the remedy, if they wanted to
continue working with the Company.
3. As to the payment of back wages, the law explicitly vests in the CIR
discretion to order the reinstatement with back pay of laborers dismissed
due to union activities, and the record does not disclose any cogent reason
to warrant interference with the action taken by said Court.
139 Bankard, Inc. v. NLRC
G.R. No. 171664
March 6, 2013
FACTS:
Respondent Bankard Employees Union-AWATU (Union) filed before the
National Conciliation and Mediation Board (NCMB) its first Notice of Strike
(NOS), alleging commission of unfair labor practices by petitioner Bankard, Inc.
(Bankard), to wit: 1) job contractualization; 2) outsourcing/contracting-out
jobs; 3) manpower rationalizing program; and 4) discrimination.
Bankard: is of the position that job contractualization or outsourcing or
contracting-out of jobs was a legitimate exercise of management prerogative
and did not constitute ULP. It had to implement new policies and programs, one
of which was the Manpower Rationalization Program (MRP) to further enhance
its efficiency and be more competitive in the credit card industry. The MRP was
an invitation to the employees to tender their voluntary resignation, with
entitlement to separation pay equivalent to at least two (2) months salary for
every year of service. Those eligible under the company’s retirement plan would
still receive additional pay. Thereafter, majority of the Phone Center and the
Service Fulfilment Division availed of the MRP. Thus, Bankard contracted an
independent agency to handle its call center needs.
Bankard denied that there was bad faith on its part in bargaining with the
Union. It came up with counter-offers to the Union’s proposals, but the latter’s
demands were far beyond what management could give. Nonetheless, Bankard
continued to negotiate in good faith CBA was entered into between Bankard and
the Union. The CBA was overwhelmingly ratified by the Union members. For
said reason, Bankard contended that the issue of bad faith in bargaining had
become moot and academic.
Union alleged that contractualization started in Bankard in 1995 in the Records
Communications Management Division, particularly in the mailing unit, which
was composed of two (2) employees and fourteen (14) messengers. They were
hired as contractual workers to perform the functions of the regular employees
who had earlier resigned and availed of the MRP. According to the Union, there
were other departments in Bankard utilizing messengers to perform work load
considered for regular employees, like the Marketing Department, Voice
Authorizational Department, Computer Services Department, and Records
Retention Department. The Union contended that the number of regular
employees had been reduced substantially through the management scheme of
freeze-hiring policy on positions vacated by regular employees on the basis of
cost-cutting measures and the introduction of a more drastic formula of
streamlining its regular employees through the MRP.
Union averred that Bankard’s proposals were way below their demands,
showing that the management had no intention of reaching an agreement. It
was a scheme calculated to force the Union to declare a bargaining deadlock.
NLRC: declared that the management committed acts considered as ULP. It
ruled that the act of management of reducing its number of employees thru
application of the Manpower Rationalization Program and subsequently
contracting the same to other contractual employees defeats the purpose or
reason for streamlining the employees. The ultimate effect is to reduce the
number of union members and increasing the number of contractual employees
who could never be members of the union for lack of qualification.
Consequently, the union was effectively restrained in their movements as a
union on their rights to self-organization. Management had successfully limited
and prevented the growth of the Union and the acts are clear violation of the
provisions of the Labor Code and could be considered as Unfair Labor Practice
in the light of the provisions of Article 248 paragraph (c) of the Labor Code.
NLRC, however, agreed with Bankard that the issue of bargaining in bad faith
was rendered moot and academic by virtue of the finalization and signing of the
CBA between the management and the Union.
CA: agreed with Bankard that job contracting, outsourcing and/or contracting
out of jobs did not per se constitute ULP, especially when made in good faith and
for valid purposes. CA, however, ruled in this wise: Incontrovertible is the fact
that petitioner's acts, particularly its promotion of the program enticing
employees to tender their voluntary resignation in exchange for financial
packages, resulted to a union dramatically reduced in numbers. Coupled with
the management's policy of "freeze-hiring" of regular employees and
contracting out jobs to contractual workers, petitioner was able to limit and
prevent the growth of the Union, an act that clearly constituted unfair labor
practice.
Article 248(c) of the Labor Code which states that:
Art. 248. Unfair labor practices of employers. – It shall be unlawful for an
employer to commit any of the following unfair labor practice:
(c) To contract out services or functions being performed by union members
when such will interfere with, restrain or coerce employees in the exercise of
their rights to self-organization;
ISSUE: WON Bankard committed acts considered as ULP.
RULING:
NO. Bankard merely validly exercised its management prerogative. Not shown
to have acted maliciously or arbitrarily, no act of ULP can be imputed against it.

The Court has ruled that the prohibited acts considered as ULP relate to the
workers’ right to self-organization and to the observance of a CBA. It refers to
"acts that violate the workers’ right to organize." Without that element, the acts,
even if unfair, are not ULP.
The general principle is that the one who makes an allegation has the burden of
proving it. While there are exceptions to this general rule, in ULP cases, the
alleging party has the burden of proving the ULP; and in order to show that the
employer committed ULP under the Labor Code, substantial evidence is
required to support the claim. Such principle finds justification in the fact that
ULP is punishable with both civil and/or criminal sanctions.
Aside from the bare allegations of the Union, nothing in the records strongly
proves that Bankard intended its program, the MRP, as a tool to drastically and
deliberately reduce union membership. Contrary to the findings and
conclusions of both the NLRC and the CA, there was no proof that the program
was meant to encourage the employees to disassociate themselves from the
Union or to restrain them from joining any union or organization. There was no
showing that it was intentionally implemented to stunt the growth of the Union
or that Bankard discriminated, or in any way singled out the union members
who had availed of the retirement package under the MRP. True, the program
might have affected the number of union membership because of the
employees’ voluntary resignation and availment of the package, but it does not
necessarily follow that Bankard indeed purposely sought such result. It must be
recalled that the MRP was implemented as a valid cost-cutting measure, well
within the ambit of the so-called management prerogatives. Bankard contracted
an independent agency to meet business exigencies. In the absence of any
showing that Bankard was motivated by ill will, bad faith or malice, or that it
was aimed at interfering with its employees’ right to self-organize, it cannot be
said to have committed an act of unfair labor practice.
Unfortunately, the Union, which had the burden of adducing substantial
evidence to support its allegations of ULP, failed to discharge such burden.
The law on unfair labor practices is not intended to deprive employers of their
fundamental right to prescribe and enforce such rules as they honestly believe
to be necessary to the proper, productive and profitable operation of their
business.
Dispositive: Bankard won.
Doctrine: Contracting out of services is an exercise of business judgment or
management prerogative. Absent any proof that management acted in a
malicious or arbitrary manner, the Court will not interfere with the exercise of
judgment by an employer.
140 PROGRESSIVE DEVELOPMENT CORPORATION VS. CIR (1977)
Topic: Company Domination of Union
Facts:
1. Araneta Coliseum EEs Assoc. (ACEA) filed a case for ULP against Progressive
Devt Corp (PDC), a domestic business entity operating the Araneta Coliseum,
Jorge Araneta, Judy A. Roxas, Manuel B. Jover and Ramon Llorente, as officers of
the corporation PDC and Progressive Employees Union (PEU), a labor
organization existing in the PDC.
2. The complaint alleged that the: (Total of 48 complainants)
- PDC disauthorized the counsel of ACEA from appearing in a union
conference
- PDC encouraged, and assisted in, the formation of the PEU and
coerced the employees to disaffiliate from the complainant union and to affiliate
with the PEU.
- PDC also discriminated the individual complainants by either not
giving them their working schedules, lessening their number of working days
and eventually dismissing them from their employment, because of their refusal
to disaffiliate from their union and join PEU.
3. Petitioners claimed that the individual complainants were merely casuals or
temporary employees. They alleged that they did not initiate nor assist PEU.
4. PEU denied that the officers and supervisors of PDC initiated and assisted in
its formation and claimed that its organization is the joint efforts of the
overwhelming majority of the employees and laborers of the corporation PDC.
5. CIR: PEU was formed formed purportedly to bust the complainant union.
Issue: W/N the petitioners are guilty of unfair labor practice – YES. The
petitioners were correctly found to have committed acts constituting unfair
labor practice.
Ruling:
1. There is reason to believe that had the complainants agreed to resign from
the ACEA and to transfer to the PEU, they would not have been separated from
their work and would even have been made permanent employees. Mrs. Araiza
who as a casual employee became a permanent employee after she handed her
resignation from the ACEA Union personally to Jose E. Belmonte, the General
Manager of the PDC.
2. From the facts of record, it is clear that the individual complainants were
dismissed because they refused to resign from the ACEA and to affiliate with the
PEU which was being aided and abetted by the PDC. The assertion that they
have nothing to do with the formation of the PEU is not supported by the facts of
record.
3. The President then of the PEU was Jose Generoso, Jr., Stage Manager of the
PDC. The stage Manager, Generoso, has supervisory power over the twenty-two
(22) employees under him. Generoso was then the No. 2 man in the Araneta
Coliseum, being an assistant of the Director of said Coliseum. PEU never
collected dues from its members and all their members are now regular
employees and are still working in the construction unit of the PDC. There is
evidence that the PEU became inactive after the death of Atty. Reonista, the
former counsel of PDC. This shows that PEU was organized to camouflage the
petitioner corporation's dislike for ACEA and to stave off the latter's
recognition.
4. Also, PEU after exerting efforts to win in the Certification Election did not
conclude and enter into a collective bargaining agreement with the
management.
5. As regards Gregorio Viray he was an active member of the ACEA and that he
was in charge of around eighteen (18) janitors. There can be no other reason
for dismissal except his active membership. If, as argued, his dismissal was due
to the abolition of the office where he was assigned, it puzzles us to note why he
was singled out for dismissal. And the fact that someone took over the position
completely belie PDC's allegation that Viray was dismissed because the office
where he was working was already closed. The evidence shows that Reynaldo
Asis, like the other individual complainants, was dismissed because he refused
to join the Progressive Employees Union.
141 Alabang Country Club, Inc. vs. National Labor Relations Commission,
466 SCRA 329, G.R. No. 157611 August 9, 2005
Facts:
in 1993, Francisco Ferrer, then President of ACCI, requested its Internal Auditor,
Irene Campos-Ugalde, to conduct a study on the profitability of ACCI’s Food and
Beverage Department (F & B).
Ugalde made use of the audited figures in the financial statements prepared by
SGV&Co. for 1989-1993 in reflecting the total revenue and costs and expenses of
the F&B. However, while SGV&Co. deducted the entire “undistributed operating
costs and expenses” consisting of “general and maintenance costs” from the
total income of ACCI, Ugalde allocated a percentage of these expenses and
charged the same against the total revenue of the F & B.
Consequently, her report showed that from 1989 to 1993, F & B had been
incurring substantial losses in the aggregate amount of (P8,727,135.00).
Realizing that it was no longer profitable for ACCI to maintain its own F & B
Department, the management decided to cease from operating the department
and to open the same to a contractor, such as a concessionaire, which would be
willing to operate its own food and beverage business within the club.
La Tasca Restaurant became this concessionaire.
ACCI then informed the affected employees that La Tasca agreed to absorb all
affected employees immediately with the status of regular employees without
need of undergoing a probationary period, and that all affected employees
would receive the same salary they were receiving from ACCI at the time of
their termination.
The Union then filed for a complaint for illegal dismissal, unfair labor practice
and regularization and damages with WPI against ACCI. According to them it
was not true that F&B is not having any income. It used the financial statements
prepared by SGV&Co.
ACCI averred, however, that it may exercise management prerogatives to adopt
a cost-saving and cost-consciousness program to improve efficiency in its
operations, prevent losses, and concentrate on core businesses, and to lay-off
workers and contract out their jobs.
Issue:
Whether or not the EEs have been validly terminated in this case?
Held1:
Yes.
The closure of operation of an establishment or undertaking not due to serious
business losses or financial reverses includes both the complete cessation of
operations and the cessation of only part of a company’s activities. For any bona
fide reason, an employer can lawfully close shop anytime. Just as no law forces
anyone to go into business, no law can compel anybody to continue the same. It
would be stretching the intent and spirit of the law if a court interferes with
management’s prerogative to close or cease its business operations just because
the business is not suffering from any loss or because of the desire to provide
the workers continued employment.
Moreover, while petitioner did not sufficiently establish substantial losses to
justify closure of its F & B Department on this ground, there is basis for its claim
that the continued maintenance of said department had become more expensive
through the years. An evaluation of the financial figures appearing in the
audited financial statements prepared by the SGV&Co. shows that ninety-one to
ninety-six (91%–96%) percent of the actual revenues earned by the F & B
Department comprised the costs and expenses in maintaining the department.
Petitioner’s decision to place its F & B operations under a concessionaire must
then be respected, absent a showing of bad faith on its part. In fine,
management’s exercise of its prerogative to close a section, branch, department,
plant or shop will be upheld as long as it is done in good faith to advance the
employer’s interest and not for the purpose of defeating or circumventing the
rights of employees under the law or a valid agreement.
142 Del Monte Philippines, Inc. v. Saldivar
G.R. No. 158620. October 11, 2006.
TOPIC: Valid discrimination: union security clause – requisites
FACTS:
 The Associated Labor Union (ALU) is the exclusive bargaining agent of
plantation workers of petitioner Del Monte Philippines, Inc. (Del
Monte) in Bukidnon
 Timbal is a member of ALU
 Del Monte and ALU entered into a CBA
 Timbal and 4 other employees were charged by ALU for disloyalty of
the union for encouraging defections to a rival union, the National
Federation of Labor (NFL)
 The charge against Timbal was supported by an affidavit executed on
23 March 1993 by Gemma Artajo (Artajo), also an employee of Del
Monte. 
 Artajo alleged that she was personally informed by Timbal that
a seminar was to be conducted by the NFL on the following day
 Timbal assured her that she would be given honorarium in the
amount of P500.00 if she were to attend the NFL meeting and
bring new recruits.
 Timbal filed an Answer before the Disloyalty Board, denying the
allegations in the complaint and the averments in Artajo’s Affidavit.
 She further alleged that her husband, Modesto Timbal, had
filed a complaint against Artajo for collection of a sum of
money, just 6 days before Artajo executed her affidavit.
 She noted that the allegations against her were purportedly
committed nearly 2 years earlier, and that Artajo’s act was
motivated by hate and revenge owing to the filing of the
aforementioned civil action.
 ALU DISLOYALTY BOARD: concluded that Timbal was guilty of acts or
conduct inimical to the interests of ALU.
 It found that the acts imputed to Timbal were partisan
activities, prohibited since the “freedom period” had not yet
commenced as of that time.
 ALU President affirmed the expulsion
 Timbal and her co-employees, thereafter, filed a complaint against Del
Monte and ALU for illegal dismissal, ULP and Damages
 LABOR ARBITER: held that all 5 employees were illegally dismissed
and ordered Del Monte to reinstate them
 NLRC: reversed; all employees were validly dismissed
 CA: reversed; only Timbal was illegaly dismissed
 CA’s ruling was based problematic relationship between her
and Artajo, the complaining witness against her. 
  Also held that Del Monte failed to observe procedural due  HOWEVER. In the matter of determining whether cause exists for
process in dismissing the co-employees termination, whether under Book Six, Title I of the Labor Code or under
 Del Monte sought to introduce another witness, Piquero, on appeal, a valid Collective Bargaining Agreement (CBA), substantial due process
which affirmed Artajo’s testimony. But the CA did not consider such must be observed as a means of ensuring that security of tenure is not
testimony. infringed.
 Even if the dismissal of an employee is conditioned not on the grounds
ISSUE: Whether Timbal was validly dismissed. NO for termination under the Labor Code, but pursuant to the provisions of
a CBA, it still is necessary to observe substantive due process in order
HELD: to validate the dismissal.
 It bears elaboration that Timbal’s dismissal is not predicated on any of  The dismissal for cause of employees must be justified by substantial
the just or authorized causes for dismissal the Labor Code, but on the evidence, as appreciated by an impartial trier of facts. None of the trier
union security clause in the CBA between Del Monte and ALU.  of facts below—the Labor Arbiter, the NLRC and the Court of Appeals—
 The CBA, which covers all regular hourly paid employees at the saw fit to accord credence to Piquero’s testimony, even assuming that
pineapple plantation in Bukidnon, stipulates that all present and such testimony was properly contained in the record
subsequent employees shall be required to become a member of ALU as  TIMBAL WAS ILLEGALY DISMISSED
a condition of continued employment. The CBA obviously adopts a
closed-shop policy which mandates, as a condition of employment,
membership in the exclusive bargaining agent.
 A “closed-shop” may be defined as an enterprise in which, by
agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed
departments of the enterprise unless he or she is, becomes, and, for the
duration of the agreement, remains a member in good standing of a
union entirely comprised of or of which the employees in interest are a
part
 A CBA provision for a closed-shop is a valid form of union security and
it is not a restriction on the right or freedom of association guaranteed
by the Constitution
 Admittedly, the enforcement of a closed-shop or union security
provision in the CBA as a ground for termination finds no
extension within any of the provisions under Title I, Book Six of
the Labor Code.
 Yet jurisprudence has consistently recognized, thus: “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-á-vis the
employer.”
 It might be suggested that since Timbal was expelled from ALU on the
ground of disloyalty, Del Monte had no choice but to implement the
CBA provisions and cause her dismissal.
143 BANK OF THE PHILIPPINE ISLANDS, v. BPI EMPLOYEES UNION-DAVAO
CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK
G.R. No. 164301: October 19, 2011
FACTS:
In 2000, Far East Bank and trust Company (FEBTC) merged with Bank of the
Philippine Islands. Petitioner had a Union Shop agreement with respondent BPI
Employees Union-Davao Chapter-Federation of Unions in BPI Unibank (the
Union).Pursuant to the merger, respondent requested BPI to terminate the
employment of those new employees from FEBTC who did not join the union.
BPI refused to undertake such action and brought the controversy before a
voluntary arbitrator. Although BPI won the initial battle at the Voluntary
Arbitrator level, BPIs position was rejected by the Court of Appeals which ruled
that the Voluntary Arbitrators interpretation of the Union Shop Clause was at
war with the spirit and rationale why the Labor Code allows the existence of
such provision.
This was followed and affirmation by the Supreme Court of the CA decision
holding that former employees of the Far East Bank and Trust Company
(FEBTC) "absorbed" by BPI pursuant to the two banks merger. The absorbed
employees were covered by the Union Shop Clause in the then existing
collective bargaining agreement (CBA)of BPI with respondent BPI Employees
Union-Davao Chapter-Federation of Unions in BPI Unibank (the Union).
Petitioners, despite the August 2010 decision moved for a Motion for
reconsideration of the decision.
ISSUE:
Whether or not the "absorbed" FEBTC employees fell within the definition of
"new employees" under the Union Shop Clause, such that they may be required
to join respondent union or suffer termination upon request by the union.
RULING:
The court agreed with Justice Brions view that it is more in keeping with the
dictates of social justice and the State policy of according full protection to
labor to deem employment contracts as automatically assumed by the
surviving corporation in a merger, without break in the continuity of their
employment, and even in the absence of an express stipulation in the
articles of merger or the merger plan.
By upholding the automatic assumption of the non-surviving corporations
existing employment contracts by the surviving corporation in a merger, the
Court strengthens judicial protection of the right to security of tenure of
employees affected by a merger and avoid confusion regarding the status of
their various benefits.However, it shall be noted that nothing in the Resolution
shall impair the right of an employer to terminate the employment of the
absorbed employees for a lawful or authorized cause or the right of such an
employee to resign, retire or otherwise sever his employment, whether before
or after the merger, subjectto existing contractual obligations.
Although by virtue of the merger BPI steps into the shoes of FEBTC as a
successor employer as if the former had been the employer of the latters
employees from the beginning it must be emphasized that, in reality, the legal
consequences of the merger only occur at a specific date,i.e.,upon its effectivity
which is the date of approval of the merger by the SEC.Thus, the court observed
in the Decision that BPI and FEBTC stipulated in the Articles of Merger that they
will both continue their respective business operations until the SEC issues the
certificate of merger and in the event no such certificate is issued, they shall
hold each other blameless for the non-consummation of the merger.
In other words, the obligation of BPI to pay the salaries and benefits of the
former FEBTC employees and its right of discipline and control over them only
arose with the effectivity of the merger.Concomitantly, the obligation of former
FEBTC employees to render service to BPI and their right to receive benefits
from the latter also arose upon the effectivity of the merger.What is material is
that all of these legal consequences of the merger took place during the life of an
existing and valid CBA between BPI and the Union wherein they have mutually
consented to include a Union Shop Clause.
144 Del Pilar Academy vs. Del Pilar Academy Union as check off. No requirement of written authorization from the non-union
G.R. No. 170112. April 30, 2008. employees is necessary if the non-union employees accept the benefits resulting
Topic: Acts Violative of Right of Self – Organization; Collectiion of Agency Fees from the CBA.
Author: Andre Mina Contrary to what DEL PILAR, the UNION has negotiated for other benefits
provisions in the CBA that surely benefited the non-union employees, justifying
FACTS: the collection of, and the UNION’s entitlement to, agency fees, i.e., limitations on
1. On September 15, 1994, the UNION and DEL PILAR entered into a teaching assignments to 23 hrs/wk, additional compensation for overload units
CBA granting salary increase and other benefits to the teaching and non- in excess, and payment of longevity pay. Written authorization is inapplicable to
teaching staff. non-union members, especially in this case where the non-union employees
2. The UNION then assessed agency fees from non-union employees, and receive several benefits under the CBA.
requested DEL PILAR to deduct said assessment from the employees’ salaries
and wages. DEL PILAR, however, refused to effect deductions claiming that the The employee’s acceptance of benefits resulting from a collective bargaining
non-union employees were not amenable to it. agreement justifies the deduction of agency fees from his pay and the union’s
3. In September 1997, the UNION negotiated for the renewal of the CBA. DEL entitlement thereto. In this aspect, the legal basis of the union’s right to agency
PILAR, however, refused to renew the same unless the provision regarding fees is neither contractual nor statutory, but quasi-contractual, deriving from
entitlement to 2 months summer vacation leave with pay will be amended by the established principle that non-union employees may not unjustly enrich
limiting the same to teachers, who have rendered at least 3 consecutive themselves by benefiting from employment conditions negotiated by the
academic years of satisfactory service. The UNION objected to the proposal bargaining union.
claiming diminution of benefits. DEL PILAR refused to sign the CBA, resulting in
a deadlock.
4. DEL PILAR denied committing unfair labor practices against the UNION. It
justified the non-deduction of the agency fees by the absence of individual check
off authorization from the non-union employees.
5. LA – DENIED ULP, UPHELD right to collect agency dues; NLRC – AFFIRMED;
CA – AFFIRMED right to collect agency dues but did not adjudicate upon the
ULP.
6. Del Pilar argues: (1) its failure to deduct the agency fees from the salaries of
non-union employees, but justifies the non-deduction by the absence of
individual written authorization; Article 248(e) is inapplicable considering that
its employees derived no benefits from the CBA; (3) The annual salary increase
of its employee is a benefit mandated by law, and not derived from the CBA; (4)
that even prior to the execution of the CBA in September 1994, DEL PILAR was
already granting annual salary increases to its employees; (5) the non-union
employees objected to the deduction; hence, a written authorization is
indispensable to effect a valid check off.
ISSUE: WON the Union can collect agency fees even to non-members of the
Union – YES
HELD:
The collection of agency fees in an amount equivalent to union dues and fees,
from employees who are not union members, is recognized by Article 248(e) of
the Labor Code.
When so stipulated in a CBA or authorized in writing by the employees
concerned, the LC and its IRR recognize it to be the duty of the employer to
deduct the sum equivalent to the amount of union dues, as agency fees, from the
employees’ wages for direct remittance to the union. The system is referred to
145 H. G. Henares & Sons vs. National Labor Union 2. On the contrary, rather than absenting himself on the day he was called to
testify before the Industrial Court in another case against the petitioner
No. L-17535. December 28, 1961. company, which he was free to do, he worked on the night shift the day
before and urged Francisco to take over his day shift on the day of the trial
Facts:
in order to avoid impairing the normal business operation of the company.
1. Pablo Fernandez was employed by H.G. Henares & Sons as laboratory 3. In fact, both Frio and Fernandez performed the same kind of work in the
assistant in the quality control section whose job was to conduct tests on company; and Fernandez’ absence, without replacement, would have placed
the percentage of solidity of ink and other products of the company. the quality of the company’s products in greater jeopardy.
2. Fernandez approached Francisco Frio, another laboratory assistant 4. There is more reason to believe that Pablo Fernandez was dismissed from
working on the night shift, and arranged to take over the latter’s shift from work because of union activities, i.e., in testifying unfavorably against the
midnight of November 25 to 8:00 a.m. of the next day. petitioner in another unfair labor practice case then pending in the
3. Francisco Frio, on the other hand, was to work on Fernandez’ shift from Industrial Court.
7:00 a.m. to 4:00 p.m. of November 26. a. Fernandez is a member of the Board of Directors of the H. G.
4. The arrangement, which was effected without the company’s prior Henares & Sons Employees Association, an affiliate of the
approval, was to enable Fernandez to testify, which he did, in the hearing on respondent union, and that he received the dismissal notice on
November 26, 1958, in case No. 1778-ULP of the Court of Industrial November 29, 1958, or barely three days after he testified.
Relations, an ULP case filed against the company on behalf of one of its
employees.
5. Conchita Martinez, Fernandez’ immediate superior, learned of the
unauthorized exchange of shift from Francisco Frio whom she questioned
after she allegedly discovered evidence of poor quality control work on the
night shift.
6. Production manager issued a memorandum recommending Fernandez’
discharge from the company.
7. Both Francisco Frio and Pablo Fernandez were investigated, but only
Fernandez was dismissed. Frio was given a suspension term.
8. CIR: there was discriminatory motivation behind the dismissal of
Fernandez; found company to be guilty of ULP and ordered reinstatement
with backwages.
9. HG Henares argues that Fernandez took it upon himself to exchange shifts
w/o prior authorization.

Issue: WON HG Henares and Sons committed an ULP for having dismissed
Fernandez.

Held: YES.

Ratio:

1. The action of the employee in exchanging shifts with another, who was
performing the same kind of work in the company, without prior
authorization of the company, in order to testify before the Court of
Industrial Relations on a case against the company, does not by itself show
any wanton disregard of the company’s rule of discipline.
146 NORMA MABEZA v. NLRC, PETER NG/HOTEL SUPREME (1997)
NOTE: Check full text for issues relating to loss of confidence & grant of
facilities.
FACTS:
 Hotel Supreme in Baguio was inspected which resulted in findings by
DOLE Labor Inspector adverse to the hotel.
 In an effort to refute such findings, Mabeza and her co-employees were
asked by the management to sign an instrument attesting to the hotel’s
compliance with minimum wage and other labor standard provisions of
law. The instrument states:
a. “That we have no complaints against the management of Hotel
Supreme as we are paid accordingly and that we are treated
well.”
b. “That we are executing this affidavit voluntarily without any
force or intimidation and for the purpose of informing the
authorities concerned and to dispute the alleged report”
 Mabeza signed the affidavit but refused to go to the City Prosecutor's
Office to swear to the veracity and contents of the affidavit as instructed
by management. The affidavit was nevertheless submitted, on the same
day, to the Regional Office of DOLE.
 After Mabeza’s refusal, she was ordered by the hotel management to
turn over the keys to her living quarters and to remove her belongings
from the hotel premises.
 According to Mabeza, the hotel strongly chided her for refusing to
proceed to the City Prosecutor's Office. She thereafter reluctantly filed a
leave of absence from her job which was denied by management.
 When she attempted to return to work, the cashier told her that she
should not report to work and instead continue with her unofficial
leave of absence.
 Mabeza then filed for illegal dismissal. She also alleged underpayment
of wages and non-payment of holiday pay and other benefits.
 Peter Ng, owner of the hotel, alleged that Mabeza surreptitiously left
w/o notice and abandoned her work. He maintained that there was no
basis for the money claims as these were paid in the form of facilities.
 Pointing to the Affidavit, Ng asserted that his EEs actually have no
problems with management. In a supplemental answer, Ng raised a
new ground, loss of confidence, which was supported by a criminal
complaint for Qualified Theft filed before the prosecutor's office.
 LA: Dismissed Mabeza's complaint on the ground of loss of confidence.
Evidence shows that Mabeza stole 1 blanket, 1 piece bedsheet, 1 piece
thermos, 2 pieces towel, w/c was the reason why Peter Ng lodged a
criminal complaint against Mabeza. The fiscal's office, finding a prima
facie evidence that Mabeza committed qualified theft, issued a
resolution for its filing in court. Hence, LA concluded that Mabeza
committed serious misconduct against the hotel which is one of the just
and valid grounds for an employer to terminate an employee.
 NLRC affirmed. Hence, Mabeza instituted the instant certiorari.
ISSUE: W/N the dismissal of Mabeza constitutes an unfair labor practice.
RULING: YES
The pivotal question in any case where ULP on the part of the ER is alleged is
W/N the ER has exerted pressure, in the form of restraint, interference or
coercion, against his EE’s right to institute concerted action for better terms and
conditions of employment.
Without doubt, the act of compelling EEs to sign an instrument indicating that
the ER observed labor standards provisions of law when he might have not,
together with the act of terminating or coercing those who refuse to cooperate
with the ER’s scheme constitutes ULP. The first act clearly preempts the right
of the hotel's workers to seek better terms and conditions of employment
through concerted action.
This actuation is analogous to that envisaged in paragraph (f) of Art. 248 of the
LC which distinctly makes it ULP "to dismiss, discharge or otherwise prejudice
or discriminate against an employee for having given or being about to give
testimony."
 In NOT giving positive testimony in favor of her ER, Mabeza had
reserved not only her right to dispute the claim and proffer
evidence in support thereof but also to work for better terms and
conditions of employment.
 For refusing to cooperate with the hotel's scheme, Mabeza was
obviously held up as an example to other EEs.
 Implicit in the act of Mabeza’s termination and the subsequent filing of
charges against her was the warning that they would not only be
deprived of their means of livelihood, but also possibly, their personal
liberty.
The law requires that the ER must furnish the EE sought to be terminated from
employment with 2 written notices before the same may be legally effected.
 Given the seriousness of the second cause (qualified theft) of the
Mabeza’s dismissal, it is noteworthy that Ng never even bothered to
inform Mabeza of the charges against her. Neither was she given the
opportunity to explain the loss of the articles.
 It was only almost 2 months after Mabeza had filed a complaint for
illegal dismissal, as an afterthought, that the loss was reported to the
police and added as a supplemental answer to petitioner's complaint.
 Mabeza’s dismissal without the benefit of notice and hearing prior to
her termination violated her constitutional right to due process.

147 Itogon-Suyoc Mines, Inc. v. Baldo | GR NO. 169632; March 28, 2006
Topic: Retaliation: Testimony Against Employer/ Indirect discrimination
FACTS:
1. In a complaint, an Acting Prosecutor of the CIR charged the herein
petitioner-employer, Itogon-Suyoc Mines, Inc., and Claude Fertig its
General Superintendent, with having committed unfair labor practices
within the meaning of Section 4(a), paragraphs 1, 4 and 5 of Republic
Act No. 875.
2. The complaint substantially alleged that Manaois and Jose Baldo,
employees of herein petitioner, were dismissed by said petitioner
because of their membership with the herein respondent Sangilo-
Itogon Workers Union and for having testified against the petitioner in
a certification election case involving the employees of the petitioner
(Case No. 3-MC-PANG).
3. The complaint prayed that an order be issued against the herein
petitioner to cease and desist from the labor practices complained of
and that the complaining employees, Manaois and Jose Baldo be
reinstated to their former positions in the mining company without loss
of employee benefits and with back wages from the date of their
respective dismissal until the date of their actual reinstatement.
4. The petitioner herein, admitted the fact of the dismissal of the two
complaining employees, but alleged that the complaining employees
were dismissed for just and lawful causes, namely, "inefficiency, utter
disregard and violation of safety rules and regulations established and
enforced by the respondent for the protection of the lives of the
employees and properties of the respondent company, utter disregard
of the company property and poor attendance records."
5. CIR: in finding ULP far as it concerned the complaining employee A.
Manaois was not proved and that the dismissal of said employee was
just and legal; but as far as the other complaining employee Jose Baldo
was concerned, the charge of unfair labor practice was proved and that
the dismissal of said employee was unjust and illegal and ordering it to
reinstate respondent Jose Baldo to his former work with back wage.
Hence, this petition for certiorari.
ISSUE: Whether petitioner is guilty of unfair labor practices (YES)
HELD:
 From the evidence of record, the following facts are clear. Baldo started
working as miner in the respondent company sometime in 1954. He
worked continuously therein until February 4, 1958 when he was given
a "30-day notice of termination of employment" to the effect that his
services will not be needed by the respondent company after March 5,
1958. Baldo refused to acknowledge receipt of said notice when Mowry,
mine's superintendent of the company, asked him to sign the same. It
appears that Baldo was on 15 days vacation leave with pay immediately
prior to his being served his separation notice.
 The complainant's evidence tended to prove that Baldo was dismissed
by the company because of his membership in the complainant Sangilo-
Itogon Workers Union, a legitimate labor organization; and, for having
testified for the said union in Case No. 3-MC-PANG a certification
proceeding involving the employees of the respondent company. Baldo
failed to obtain a reinstatement therein.
 Gelladoga, plant engineer and former labor relations officer of the
respondent company, asked Baldo not to testify therein are the promise
that he will be reinstated. Admittedly, the case of Baldo's separation
from the respondent company which was pending consideration at that
time with the grievance committee of the union and management was
immediately "dropped" after Baldo testified in the certification case
"because he (Baldo) brought his case to a rival union of the Itogon
Labor Union." It becomes obvious that Baldo's case was not considered
further by the grievance committee because of his testimony against
the company in the certification proceeding. An examination of the
alleged offense imputed on Baldo previous to his dismissal and which
are relied upon by the respondent company shows that they were not
so serious as to warrant his immediate and permanent dismissal. Under
the circumstances it is safe to conclude that Gelladoga who is a
Supervisor within the meaning of the Act, really promised to reinstate
Baldo to his former work in the company should he desist from
testifying in that certification case mentioned above.
 Considering everything, SC is convinced that because of Baldo's refusal
to accede to the demand of his employer not to testify in the
certification proceeding mentioned above, his Case was "dropped" by
the grievance committee of the union and management, and
consequently, he failed to be reinstated in the company.
148 Shell Oil Workers Union v. Shell Co. of the Philippines Ltd.
TOPIC: Management Prerogatives and ULP
Facts:
1. Shell Company PH insists to dissolve its security guard section
notwithstanding its being embraced in and its continuance as such thus
assured by an existing collective bargaining contract.
a. The Company transferred 18 security guards to its other
department an consequently hired a private security agency to
undertake the work of said security guards.
2. This resulted to a strike called by the Shell Oil Wokers’ Union.
a. The Union filed a petition contending that the 18 security
guards are part of the bargaining unit and covered by the
existing CBA, and as such their transfers are illegal.
3. This case was later certified by the President to the CIR.
4. An appeal was filed by the company on ground that the dissolution was
a valid exercise of management prerogative.
a. That the action was motivated by business consideration and
made after notice to and discussion with the Union
b. That the 18 guards were dismissed for willfully refusing to
obey the transfer order
c. A study was made by the Company for purpose of improving
the productivity and efficiency of its project (Pandacan
Installation). If an outside agency to perform such service were
to be hired, there would be a saving of P96,000 annually. A
joint consultation by the Union and management was held, and
no opposition to such move was made, provided it be done
gradually and in close consultation with the Union.
5. Respondent court declared that no ULP was committed by the Shell
Company, as it is within management prerogative.
Issue: WON the company is guilty of unfair labor practice in contracting
out its security service to an independent professional security agency and
reassigning the 18 guards to other sections of the Company
Held: YES
Ratio:
It cannot be denied the faculty of promoting efficiency and attaining economy
by a study of what units are essential for its operation. To it belongs the ultimate
determination of whether services should be performed by its personnel or
contracted to outside agencies. It is the opinion of the Court, that while
management has the final say on such matter, the labor union is not to be
completely lef t out. What was done by Shell Company in informing the Union as
to the step it was intending to take on the proposed dissolution of the security
guard section to be replaced by an outside agency is praiseworthy. There should
be mutual consultation eventually deference is to be paid to what management
decides.
In this particular case though, what was stipulated in an existing collective
bargaining contract certainly precluded Shell Company from carrying out
what otherwise would have been within its prerogative if to do so would
be violative thereof.
The crucial question thus is whether the then existing collective bargaining
contract running f for three years from August 1, 1966 to December 31, 1969
constituted a bar
to such a decision reached by management? The answer must be in the
affirmative. As correctly stressed in the brief for the petitioner, there was
specific coverage concerning the security guard section in the collective
bargaining contract. lt is found not only in the body thereof but in the two
appendices concerning the wage schedules as well as the premium pay and the
night compensation to which the personnel in such section were entitled. It was
thus an assurance of security of tenure, at least, during the lifetime of the
agreement. Nor is it a sufficient answer, as set forth in the decision of
respondent Court, that while such a section would be abolished, the guards
would not be unemployed as they would be transferred to another position
with an increase in pay and with a transfer bonus. For what is involved is the
integrity of the agreement reached, the terms of which should be binding on
both parties. One of them may be released, but only with the consent of the
other. The right to object belongs to the latter, and if exercised, must be
respected. Such a state of affairs should continue during the existence of the
contract. Only thus may there be compliance with and fulfillment of the
covenants in a valid subsisting agreement.
The Company had reached its decision to effect the implementation of the study
of dissolution of the security guards. Later, there was a joint consultation
between it and the Union on the matter. A collective bargaining contract was
entered into which, as indicated above, did assure the continued existence of the
security guard section. The Shell Company did not have to agree to such a
stipulation. Or it could have reserved the right to effect a dissolution and
reassign the guards. It did not do so. Instead, when it decided to take such a step
resulting in the strike, it would rely primarily on provisions in the collective
bargaining' contract coached in general terms,
merely declaratory of certain management prerogatives. Considering the
circumstances of record, there can be no justification then for Shell Company's
insistence on pushing through its project of such dissolution without thereby
incurring a violation of the collective bargaining agreement.
149 San Miguel Corporation Employees Union v. Bersamira
Facts:
 Between 1983-84, San Miguel entered into merchandising contracts
with Lipercon and D’Rite. Both Lipercon and D’Rite are independent
contractors licensed with the DOLE.
 The agreement between San Miguel and Lipercon/D’Rite expressly
provides that Lipercon/D’Rite would be pay its own employees, and
these employees are not to be considered employees of San Miguel
 However, the San Miguel Corporation Employes Union-PTWGO (the
Union), the authorized representative of the monthly-paid rank-and-file
employees, wrote a letter to San Miguel
 The Union said that some Lipercon/D’Rite workers signed up for union
membership and sought regularization with San Miguel.
 San Miguel did not give a favorable response, hence, the Union filed a
notice of strike for Unfair Labor Practice, violation of the CBA, and
Union-Busting.
 Pickets were then staged at different San Miguel plants
 Eventually, San Miguel filed a complaint for damages against the Union
with the RTC Pasig
 RTC Pasig issued a Writ of Preliminary Injunction, preventing the Union
from representing the Lipercon/D’Rite workers and preventing the
Union from continuing the strike
 The Union files a petition for certiorari with the SC
Issue: Do Labor Tribunals have jurisdiction over the controversy? YES. The
RTC Pasig was without jurisdiction.
 The Labor Tribunals have jurisdiction because this case involves a labor
dispute.
 A "labor dispute" as defined in Article 212 (1) of the Labor Code
includes "any controversy or matter concerning terms and conditions
of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing, or arranging the terms and
conditions of employment, regardless of whether the disputants stand
in the proximate relation of employer and employee."
 Even if there is no ER-EE relationship between San Miguel and the
Lipercon/D’Rite workers, a labor dispute can nevertheless exist as Art.
212(1) of the Labor Code provides: "… regardless of whether the
disputants stand in the proximate relationship of employer and
employee”
 As long as the controversy concerns, among others, the terms and
conditions of employment or a "change" or "arrangement" thereof,
there is a labor dispute.
 In this case a labor dispute is evident. What the Union seeks is to
regularize the status of the employees contracted by Lipercon and
D'Rite in effect, that they be absorbed into the working unit of San
Miguel.
 This matter definitely dwells on the working relationship between said
employees vis-a-vis SanMig. Terms, tenure and conditions of their
employment and the arrangement of those terms are thus involved
bringing the matter within the purview of a labor dispute.
 The issues in this case call for the application of Labor Laws and San
Miguel’s cause of action is inextricably linked with those issues.
RE: Unfair Labor Practice
 Since the case is linked with a labor dispute, the jurisdiction belongs to
Labor Tribunals
 As provided by Art. 217 of the Labor Code (prior to its amendment),
Labor Arbiters have jurisdiction to hear and decide cases involving
workers, including cases for Unfair Labor Practice
 Even if San Miguel claims this case involves damages (Art. 19, 20, 21,
Civil Code) this does not automatically place jurisdiction with the
regular courts, since the claim for damages is interwoven with the labor
dispute
RE: Management Prerogative
 The SC recognizes the proprietary right of San Miguel to exercise an
inherent management prerogative and its best business judgment to
determine whether it should contract out the performance of some of
its work to independent contractors.
 However, the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law (Section 3, Article
XIII, 1987 Constitution) equally call for recognition and protection.
 Those contending interests must be placed in proper perspective and
equilibrium.
150 Shell Oil Workers' Union vs. Shell Company of the Philippines, Ltd., 39 The unfair labor practice strike called by the Union did have the impress of
SCRA 276, No. L-28607 May 31, 1971 validity. Rightly, labor is justified in making use of such a weapon in its arsenal
Facts: to counteract what is clearly outlawed by the Industrial Peace Act. That would
The insistence on the part of respondent Shell Company of the Philippines to be one way to assure that the objectives of unionization and collective
dissolve its security guard section1, stationed at its Pandacan Installation, bargaining would not be thwarted. It would, of course, file an unfair labor
notwithstanding its being embraced in, and its continuance as such thus practice case before the Court of Industrial Relations. It is not precluded,
assured by an existing collective bargaining contract, resulted in a strike called however, from relying on its own resources to frustrate such an effort on the
by the union. Against its decision declaring the strike illegal primarily on the part of an employer.
ground that such dissolution was a valid exercise of a management
prerogative, this appeal is taken.
Issue:
Whether or not the dissolution constitutes ULP because it is not a valid
exercise of Management Prerogative?
Held:
Yes.
Ratio:

It is to be admitted that the stand of ShelI Company as to the scope of

management prerogative is not devoid of plausibility if it were not bound by
what was stipulated. The growth of industrial democracy fostered by the
institution of collective bargaining with the workers entitled to be represented
by a union of their choice, has no doubt contracted the sphere of what
appertains solely to the employer. What was stipulated in an existing collective
bargaining contract certainly precluded Shell Company from carrying out what
otherwise would have been within its prerogative if to do so would be violative
thereof.
The crucial question is whether the then existing collective bargaining contract
running for three years from August 1, 1966 to December 31, 1069 constituted
a bar to such a decision reached by management? Yes.
As correct stressed in the brief for the petitioner, there was specific coverage
concerning the security guard section in the collective bargaining contract, It is
found not only in the body thereof but in the two appendices concerning the age
schedules as well as the premium pay and the night compensation to which the
personnel in such section were entitled. It was thus an assurance of security of
tenure, at least, during the lifetime of the agreement. For what is involved is the
integrity of the agreement reached, terms of which should be binding on both
parties. One of them may be released, but only with the consent of the other.
The right to object belongs to the latter; and if exercised, must be respected.
Such a state of affairs should continue during the existence of the contract. Only
thus may there be compliance with and fulfillment of the covenants in a valid
subsisting agreement.
The Shell Company, in failing to manifest fealty to what was stipulated in an
existing collective bargaining contract, was thus guilty of an unfair labor
practice. Such a doctrine first found expression in Republic Savings Bank vs.
Court of Industrial Relations2
151 GMC v CA
FACTS:
1. In its two plants located at Cebu City and Lapu-Lapu City, petitioner
General Milling Corporation (GMC) employed 190 workers.
2. They were all members of private respondent General Milling
Corporation Independent Labor Union.
3. On April 28, 1989, GMC and the union concluded a collective bargaining
agreement (CBA) which included the issue of representation effective
for a term of three years.
4. The day before the expiration of the CBA, the union sent GMC a
proposed CBA, with a request that a counter-proposal be submitted
within ten (10) days.
5. However, GMC had received collective and individual letters from
workers who stated that they had withdrawn from their union
membership, on grounds of religious affiliation and personal
differences.
6. Believing that the union no longer had standing to negotiate a CBA,
GMC did not send any counter-proposal.
7. On December 16, 1991, GMC wrote a letter to the union’s officers, Rito
Mangubat and Victor Lastimoso. The letter stated that it felt there was
no basis to negotiate with a union which no longer existed, but that
management was nonetheless always willing to dialogue with them on
matters of common concern and was open to suggestions on how the
company may improve its operations.
8. In answer, the union officers wrote a letter dated December 19, 1991
disclaiming any massive disaffiliation or resignation from the union and
submitted a manifesto, signed by its members, stating that they had not
withdrawn from the union.
9. NLRC held that the action of GMC in not negotiating was ULP.
ISSUE: WON the company (GMC) should have entered into collective bargaining
with the union?
HELD: Yes.
RATIO:
 The law mandates that the representation provision of a CBA
should last for five years. The relation between labor and
management should be undisturbed until the last 60 days of the
fifth year. Hence, it is indisputable that when the union requested for a
renegotiation of the economic terms of the CBA on November 29,
1991, it was still the certified collective bargaining agent of the
workers, because it was seeking said renegotiation within five (5)
years from the date of effectivity of the CBA on December 1, 1988.
The union’s proposal was also submitted within the prescribed 3-
year period from the date of effectivity of the CBA, albeit just
before the last day of said period. 
 It was obvious that GMC had no valid reason to refuse to negotiate
in good faith with the union. For refusing to send a counter-proposal
to the union and to bargain anew on the economic terms of the CBA, the
company committed an unfair labor practice under Article 248 of the
Labor Code.
 ART. 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….
 ART. 248. Unfair labor practices of employers. – It shall be unlawful
for an employer to commit any of the following unfair labor practice:
(g) To violate the duty to bargain collectively as prescribed by this Code
Under Article 252 abovecited, both parties are required to perform
their mutual obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement. The union lived up to
this obligation when it presented proposals for a new CBA to GMC within three
(3) years from the effectivity of the original CBA. But GMC failed in its duty
under Article 252. What it did was to devise a flimsy excuse, by questioning the
existence of the union and the status of its membership to prevent any
negotiation.
 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.
 GMC’s failure to make a timely reply to the proposals presented by the
union is indicative of its utter lack of interest in bargaining with the
union. Its excuse that it felt the union no longer represented the
workers, was mainly dilatory as it turned out to be utterly baseless.
 Failing to comply with the mandatory obligation to submit a reply to
the union’s proposals, GMC violated its duty to bargain collectively,
making it liable for unfair labor practice.
152 Central Azucarera De Bais Employees Union-NFL v. Central Azucarera
De Bais, Inc. (CAB)
G.R. No. 186605, November 17, 2010
1. CAB is a corporation duly organized and existing under the laws of
the Philippines. It is represented by its President, Chan, in this proceeding.
2. CABEU-NFL is a duly registered labor union and a certified bargaining agent
of the CAB rank-and-file employees, represented by its President, Saguran.
3. CABEU-NFL sent CAB a proposed CBA seeking increases in the daily wage
and vacation and sick leave benefits of the monthly employees and the
grant of leave benefits and 13th month pay to seasonal workers.
4. CAB responded with a counter-proposal to the effect that the production
bonus incentive and special production bonus and incentives be
maintained. In addition, CAB agreed to execute a pro-rated increase of
wages every time the government would mandate an increase in the
minimum wage. CAB did not agree to grant additional and separate
Christmas bonuses.
5. CAB received an Amended Union Proposal, CABEU-NFL reducing its
previous demand regarding wages and bonuses. CAB, however, maintained
its position on the matter. Thus, the collective bargaining negotiations
resulted in a deadlock.
6. On account of the impasse, CABEU-NFL filed a Notice of Strike with the
NCMB. The NCMB then assumed conciliatory-mediation jurisdiction.
7. CABEU-NFL then requested copies of CAB’s annual financial statements
from 2001-04 and asked for the resumption of conciliation meetings.
8. CAB replied to NCMB Regional Director, saying that that the declared
purpose of the requested conciliation meeting has already been rendered
moot and academic because: (1) the Union which Saguran represents has
already lost its majority status by reason of the withdrawal of support
thereto by more than 90% of the employees in the bargaining unit, and (2)
the workers themselves, after disauthorizing CABEU-NFL have organized
themselves into a new Union, the Central Azucarera de Bais Employees
Labor Association (CABELA) and after obtaining their registration
certificate and making due representation that it is a duly organized union
representing almost all the rank and file workers in the Central, had
concluded a new CBA with CAB. The aforesaid CBA had been duly ratified.
9. Reacting from the letter-response of CAB, CABEU-NFL filed a Complaint for
ULP for the former’s refusal to bargain with it.
10. LA dismissed the complaint. LA: Record shows that CAB participated in a
series of CBA negotiations conducted by the parties as well as in the
conciliation/mediation proceedings conducted by the NCMB. Unfortunately,
both exercises resulted in a deadlock. It cannot be said, therefore, that CAB
refused to negotiate or that it violated its duty to bargain collectively in light
of its active participation in the past CBA negotiations.
11. NLRC reversed LAs decision and found CAB guilty of ULP. The NLRC
explained that the issue to be resolved is WON CAB committed ULP for
violation of its duty to bargain collectively in good faith. NLRC looked upon
fact that CAB concluded a CBA with CABELA, becasue there was no reason
for CAB to deal and negotiate with CABELA since the latter does not have
such status of majority representation. Based on this premise, CAB violated
its duty to bargain with CABEU-NFL when during the pendency of the
conciliation proceedings before the NCMB it concluded a CBA with another
union.
12. CA reversed the NLRC. CA: In the case at bar, CABEU-NFL failed in its
burden of proof to present substantial evidence to support the allegation of
ULP. The Decision of NLRC referred merely to 2 circumstances which
allegedly support the conclusion that the presumption of good faith had
been rebutted and that bad faith was extant in petitioners actions. To recall,
these circumstances are: (a) the execution of a supposed collective
bargaining agreement with another labor union, CABELA; and (b) CABs
sending of the letter dated June 14, 2005 to NCMB seeking to call off the
collective bargaining negotiations. These, however, are not enough to
ascribe the very serious offense of ULP upon CAB. There is nothing
that establishes CAB’s predetermined resolve not to budge from an
initial position perhaps stubbornness of some ambiguous sort but not
the absence of good faith to pursue collective bargaining.
ISSUE: WON CAB was guilty of ULP by refusing to bargain collectively?
HELD: NO.
1. The concept of unfair labor practice is provided in Art 247 of the Labor
Code which states:
Concept of Unfair Labor Practice and Procedure for Prosecution thereof.
-- Unfair labor practices violate the constitutional right of workers and
employees to self-organization, are inimical to the legitimate interests of
both labor and management, including their right to bargain collectively
and otherwise deal with each other in an atmosphere of freedom and
mutual respect, disrupt industrial peace and hinder the promotion of
healthy and stable labor-management relations.
2. The Labor Code enumerates the acts constituting unfair labor practices of
the employer, thus:
Article 248. Unfair Labor Practices of Employers.It shall be unlawful for
an employer to commit any of the following unfair labor practice: (g) To
violate the duty to bargain collectively as prescribed by this Code.
3. For a charge of ULP to prosper, it must be shown that CAB was
motivated by ill will, bad faith, or fraud, or was oppressive to labor, or
done in a manner contrary to morals, good customs, or public policy,
 and, of course, that social humiliation, wounded feelings or grave
anxiety resulted in suspending negotiations with CABEU-NFL.  Kilusang Mayo Uno vs. Nestlé Philippines, Inc. , 499 SCRA 521, G.R. No.
4. Notably, CAB believed that CABEU-NFL was no longer the representative of
the workers. It just wanted to foster industrial peace by bowing to the
wishes of the overwhelming majority of its rank and file workers and by
negotiating and concluding in good faith a CBA with CABELA. Such actions
of CAB are nowhere tantamount to anti-unionism, the evil sought to be
punished in cases of unfair labor practices.
5. Furthermore, basic is the principle that good faith is presumed and he
who alleges bad faith has the duty to prove the same. By imputing bad
faith to the actuations of CAB, CABEU-NFL has the burden of proof to
present substantial evidence to support the allegation of unfair labor
practice. 
6. CABEU-NFL, in simply relying on the said letter-response, failed to
substantiate its claim of unfair labor practice to rebut the presumption of
good faith. Moreover, as correctly determined by the LA, the filing of the
complaint for unfair labor practice was premature inasmuch as the issue of
collective bargaining is still pending before the NCMB.
153
154 Union of Filipro Employees-Drug, Food and Allied Industries Unions-
158930-31, G.R. No. 158944-45 August 22, 2006
Facts:
 The CBA between Nestle and Union was about to expire soon; thus, the
presidents of Alabang and Cabuyao Divisions sent a letter of intent to
renegotiate.
 Nestle receipt the letter and informed them of its position that
“unilateral grants, one-time company grants, company-initiated policies
and programs, which include, but are not limited to the Retirement
Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their
very nature not proper subjects of CBA negotiations and therefore shall
be excluded therefrom.” In addition, it clarified that with the closure of
the Alabang Plant, the CBA negotiations will only be applicable to the
covered employees of the Cabuyao Plant; hence, the Cabuyao Division
of UFE-DFA-KMU became the sole bargaining unit involved in the
subject CBA negotiations.
 Thereafter, dialogue between the company and the union about this
ensued but this failed.
 The Union then filed for a Notice of Strike for bargaining deadlock. After
a month, it also filed for a ULP alleging that Nestle was bargaining in
bad faith.
 DOLE and CA held that there was no ULP.
 Thus, this case.
Issue:Whether or not there is a violation of duty to bargain in this case?
Held: No. The ER is presumed in good faith and because the EEs failed to
discharge the burden to show the contrary, ER is deemed to have not violated
this duty.
Ratio:
A. In the case at bar, it cannot be denied that the CBA that was about to expire at
that time contained provisions respecting the Retirement Plan. As the latter
benefit was already subject of the existing CBA, the members of UFE-DFAKMU
were only exercising their prerogative to bargain or renegotiate for the
improvement of the terms of the Retirement Plan just like they would for all the
other economic, as well as non-economic benefits previously enjoyed by them.
Precisely, the purpose of collective bargaining is the acquisition or attainment of
the best possible covenants or terms relating to economic and non-economic
benefits granted by employers and due the employees. The Labor Code has
actually imposed as a mutual obligation of both parties, this duty to bargain
collectively. The duty to bargain collectively is categorically prescribed by
Article 252 of the said code.
B. Presumption of Good Faith; Basic is the principle that good faith is presumed
and he who alleges bad faith has the duty to prove the same.—
Basic is the principle that good faith is presumed and he who alleges
bad faith has the duty to prove the same. By imputing bad faith unto the
actuations of Nestlé, it was UFE-DFA-KMU, therefore, who had the
burden of proof to present substantial evidence to support the
allegation of unfair labor practice. A perusal of the allegations and
arguments raised by UFE-DFA-KMU in the Memorandum (in G.R. Nos.
158930-31) will readily disclose that it failed to discharge said onus
probandi as there is still a need for the presentation of evidence other
than its bare contention of unfair labor practice in order to make
certain the propriety or impropriety of the unfair labor practice charge
hurled against Nestlé. Under Rule XIII, Sec. 4, Book V of the
Implementing Rules of the Labor Code: x x x. In cases of unfair labor
practices, the notice of strike shall as far as practicable, state the acts
complained of and the efforts to resolve the dispute amicably.”
C. There is no per se test of good faith in bargaining. good faith or bad faith is an
inference to be drawn from the facts.—
There is no per se test of good faith in bargaining. Good faith or bad
faith is an inference to be drawn from the facts, to be precise, the crucial
question of whether or not a party has met his statutory duty to bargain
in good faith typically turns on the facts of the individual case.
Necessarily, a determination of the validity of the Nestlé’s proposition
involves an appraisal of the exercise of its management prerogative.
D. Employers are accorded rights and privileges to assure their self-
determination and independence and reasonable return of capital. This mass of
privileges comprises the so-called management prerogatives.
In this connection, the rule is that good faith is always presumed. As
long as the company’s exercise of the same is in good faith to advance
its interest and not for purpose of defeating or circumventing the rights
of employees under the law or a valid agreement, such exercise will be
upheld. Construing arguendo that the content of the afore-quoted letter
of 29 May 2001 laid down a pre-condition to its agreement to bargain
with UFE-DFA-KMU, Nestlé’s inclusion in its Position Paper of its
proposals affecting other matters covered by the CBA contradicts the
claim of refusal to bargain or bargaining in bad faith. Accordingly, since
UFE-DFA-KMU failed to proffer substantial evidence that would
overcome the legal presumption of good faith on the part of Nestlé, the
award of moral and exemplary damages is unavailing.
155 ARELLANO UNIVERSITY EMPLOYEES AND WORKERS UNION v. CA,
NLRC, and ARELLANO UNIVERSITY
 The Union filed with the NCMB a Notice of Strike charging Arellano
with ULP as ff:
a. Interfering in union activities
b. Union Busting (violation of CBA’s Article IV, Sec. 2)
c. Union Busting (Disregarding the Union’s request to deduct
penalties from its members who were absent and without
justifiable reasons during union meetings
d. Contracting Workout (management contracted out services
being performed by Union members)
 A majority of the Union members filed a petition for audit of union
funds before the DOLE against the officers of the Union.
a. DOLE ordered officers to render an accounting of union funds
amounting to P480k which were remitted per check-off
statement.
 DOLE Sec certified the Notice of Strike for compulsory arbitration to the
NLRC.
 No settlement was reached.
 University moved for the consolidation of the ff. cases:
a. The ULP Charge
b. The Interpleader it filed against the Union and some of its
members
c. Complaint of the Union filed for underpayment of wages
arising from the change in the manner of computation of salary
of employees and non-payment of Sunday pay.
 Before the NLRC could act of the motion for consolidation, DOLE Sec.
Laguesma certified for compulsory arbitration to the NLRC a 2 nd Notice
of Strike filed by the Union charging the University with:
a. Violation of CBA (Withholding of union and death benefits)
b. Violation of CBA (Non-granting of 10% salary increase to some
union members
c. Illegal deductions in the payroll
d. Union interference (circulating letters against Union)
e. Non-implementation of the retirement plan as approved by
BIR
 A strike was then staged.
 DOLE ordered them to return to work within 24 hours. The ff day, the
Union lifted its strike.
 University filed a petition to declare the strike illegal.
 NLRC:
a. 2 notices of strike: Without merit
b. University is absolved from the ULP charges
 c. All the officers who participated in the illegal strike lost their retirement plan, as approved by the BIR, were left for
employment status. resolution as the Union dropped the other issues raised therein
d. There is no diminution of benefits because the University is after the NCMB hearings.
correct in using 314 days as divisor.  Crediting the explanation of the University that its withholding
ISSUE: Whether the University violated the CBA. of union dues and death aid benefits was upon the written
request of several union members themselves, the NLRC held
 To constitute ULP, however, violations of the CBA must be gross. that no ULP was committed.
 Gross violation of the CBA, under Article 261 of the Labor Code, means  Re: Non-implementation of the retirement plan
flagrant and/or malicious refusal to comply with the economic  The same was baseless and it was in fact not ventilated before
provisions thereof. the NCMB.
 Evidently, the University cannot be faulted for ULP as it in good  In the Interpleader case filed by the University against the Union and
faith merely heeded the above-said request of Union members. the members:
 On the NLRC’s declaration of loss of employment status of the strikers,  NLRC ruled that the University may not be held guilty of ULP
an ordinary striking worker may not be declared to have lost his for refusal to heed the demand of the Union that salaries of its
employment status by mere participation in an illegal strike. There members be deducted for their failure to attend union
must be proof that he knowingly participated in the commission of meetings:
illegal acts during the strike.  firstly, because the Union itself failed to meet the
 While the University adduced photographs showing strikers requirements provided for in Sections 1 and 2, Article
picketing outside the university premises, it failed to identify IV of the CBA; and
who they were.  secondly, an interpleader had been filed by the
 It thus failed to meet the substantiality of evidence test University for the parties to litigate their claims before
applicable in dismissal cases. the NLRC.
 Petitioner-union members must thus be reinstated to their  The NLRC also ruled that the resolution calling for such
former position, without backwages. If reinstatement is no deduction was not valid as it was not even signed by the
longer possible, they should receive separation pay of One (1) majority of Union officers and circulated to the members.
Month for every year of service.
 With respect to the union officers, as already discussed, their mere
participation in the illegal strike warrants their dismissal.
NOTE (NLRC DECISION, WHICH WAS AFFIRMED BY THE SC):
 NLRC found that what triggered the strike was the Union’s suspicion
that the petition for audit of union fund was initiated by the University.
 However, it was some Union members who initiated such,
therefore, there was no actual basis to hold the University
guilty of interference.
 Re: Union busting
 NLRC: The refusal of the University to deduct penalties from
the salaries of members of the Union who failed to attend the
meetings was based on the CBA which required as condition
for valid check-off prior submission to the management of
individual authorization. (This was not met by the Union).
 Re: Contracting Out
 Not raised during the conciliation meetings at the NCMB level.
 Re: 2nd Notice of Strike
 Only the charges of violation of the CBA for withholding union
dues and death benefits, and the non-implementation of the
156 San Miguel Foods, Inc. v. SMC Employees Union-PTGWO (2007)  accordingly ordered the Labor Arbiter to continue the proceedings on
FACTS: 
1. Respondent Union was the sole bargaining agent of all the monthly paid
employees of petitioner SMFI. On November 9, 1992, some employees
of SMFIs Finance Department, through the Union, brought a grievance
against Finance Manager Montesa, for discrimination, favoritism, ULP, not
flexible, harassment, promoting divisiveness and sectarianism, etc., before
SMFI Plant Operations Manager Nava in accordance with Step 1 of the
grievance machinery adopted in the CBA forged by SMFI and the Union.
The Union sought the review, evaluation & upgrading of all Finance staff
and promotion of G.Q. Montesa to other SMC affiliates & subsidiaries.
2. At the grievance meeting held on January 14, 1993, SMFI informed
the Union that it planned to address the grievance through a work
management review which would be completed by March 1993, hence, it
asked the finance personnel to give it their attention and cooperation. The
work management review was not completed by March 1993, however,
prompting the Union to elevate the grievance to Step 2.
3. 9 months after the grievance meeting was held, SMFI rendered a Decision
on Step 1 Grievance stating that it was still in the process of completing the
work management review, hence, the Unions requests could not be granted.
4. The Union thereupon filed a complaint before NLRC, Arbitration Branch,
against SMFI, its President, and its Finance Manager for ULP, and unjust
discrimination in matters of promotion. It prayed that SMFI et al. be
ordered to promote the therein named employees with the corresponding
pay increases or adjustment including payment of salary differentials plus
attys fees, and to cease and desist from committing the same unjust
discrimination in matters of promotion.
5. Instead of filing a position paper as required by the LA, SMFI et al. filed a
MD contending that the issues raised in the complaint were grievance
issues and, therefore, should be resolved in the grievance machinery
provided in the CBAs of the parties or in the mandated provision of VA
which is also provided in the CBA. The Union opposed the MD.
6. In its Position Paper, the Union specified acts of ULP of SMFI et al. under
Article 248, paragraphs (e) and (i) of the LC which Article reads: Art. 248.
Unfair labor practices of employers. It shall be unlawful for an employer to
commit any of the following unfair labor practices: (e) To discriminate in
regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor
organization. x x x (i) To violate a collective bargaining agreement.  thereof. But since Section 7, Rule V of the New Rules of Procedure of the NLRC
7. LA granted SMFI et al’s MD and ordered to remand the case to grievance
machinery for completion of the proceedings. The Union appealed the said
order to the NLRC by MR/Appeal which its Second Division granted and
the Unions complaint. SMFI et al. filed MR of the NLRC order but it was
denied, hence, they filed a petition for certiorari with this Court. After the
parties and the SG had filed their respective pleadings, this Court, by
Resolution of January 25, 1999, referred the case to the CA pursuant to St.
Martin Funeral Homes v. NLRC.
8. By Decision of July 31, 2002, the CA denied SMFI et al.s petition for
certiorari, it holding that the LA has jurisdiction over the complaint of
the Union, they having violated the seniority rule under the CBA by
appointing and promoting certain employees which amounted to a ULP.
Hence, this petition.
 
ISSUES:
1. W/N LA has jurisdiction over complaint of Union. YES, just because
technicalities of law and procedure should not strictly apply in LC
cases.
2. W/N SMFI’s alleged violation constitutes ULP. YES, just because all doubts
in implementing and interpreting LC and its IRR must be resolved in
favor of labor.
 
HELD/RATIO:
1. The jurisdiction of Labor Arbiters, enumerated in Article 217 of the Labor
Code, includes complaints for ULP.
 
SMFI argues that the allegations in the Unions complaint filed before the LA do
not establish a cause of action for ULP, citing RoC Section 1. In general. Every
pleading shall contain in a methodical and logical form, a plain concise and direct
statement of the ultimate facts on which the party pleading relies for his claim.
Alleging that the Union failed to comply with this Rule, SMFI concludes that the
Labor Arbiter has no jurisdiction over its complaint.
 
A perusal of the complaint shows that, indeed, the particular acts of ULP alleged
to have been committed by SMFI were not specified; neither were the ultimate
facts in support thereof. In its Position Paper, however, the Union detailed the
particular acts of ULP attributed to SMFI and the ultimate facts in support
provides that the proceedings before the LA shall be non-litigious in
nature. Subject to the requirements of due process, the technicalities of law and
procedure and the rules obtaining in the courts of law shall not strictly apply
thereto, the Labor Arbiter may avail himself of all reasonable means to ascertain  
the facts of the controversy speedily, including ocular inspection and
examination of well-informed persons. As above-stated, the Union charges SMFI to have promoted less senior
employees, thus bypassing others who were more senior and equally or more
   qualified. It may not be seriously disputed that this charge is a gross or flagrant
violation of the seniority rule under the CBA, a ULP over which the Labor
2. On the questioned promotions, the Union did not allege that they were done Arbiter has jurisdiction.
to encourage or discourage membership in a labor organization. In fact,
those promoted were members of the complaining Union. The promotions  
do not thus amount to ULP under Article 248(e) of the LC. As for the alleged
ULP committed under Article 248(i), for violation of a CBA, this Article is SMFI, at all events, questions why the CA came out with a finding that it (SMFI)
qualified by Article 261 of the LC, which reads: disregarded the seniority rule under the CBA when its petition before said court
  merely raised a question of jurisdiction. The CA having affirmed the NLRC
decision finding that the Labor Arbiter has jurisdiction over the Unions
violations of a CBA, except those which are gross in character, shall no longer be
complaint and thus remanding it to the LA for continuation of proceedings
treated as ULP and shall be resolved as grievances under the CBA. For purposes
thereon, the appellate courts said finding may be taken to have been made only
of this article, gross violations of CBA shall mean flagrant and/or malicious
for the purpose of determining jurisdiction.
refusal to comply with the economic provisions of such agreement. 
 
 
RULING: WHEREFORE, the Petition is DENIED.
Silva v. NLRC instructs that for a ULP case to be cognizable by the LA, and the
NLRC to exercise its appellate jurisdiction, the allegations in the complaint
should show prima facie the concurrence of two things, namely: (1) gross
violation of the CBA; AND (2) the violation pertains to the economic provisions
of the CBA. As reflected in the above-quoted allegations of the Union in its
Position Paper, the Union charges SMFI to have violated the grievance
machinery provision in the CBA. The grievance machinery provision in the CBA
is not an economic provision, however, hence, the second requirement for a
Labor Arbiter to exercise jurisdiction of a ULP is not present.

The Union likewise charges SMFI, however, to have violated the Job Security

provision in the CBA, specifically the seniority rule, in that SMFI appointed less
senior employees to positions at its Finance Department, consequently
intentionally by-passing more senior employees who are deserving of said
appointment.

Article 4 of the LC provides that All doubts in the implementation and

interpretation of the provisions of this Code, including IRR, shall be resolved in
favor of labor. Since the seniority rule in the promotion of employees has a
bearing on salary and benefits, it may, following a liberal construction of Article
261 of the LC, be considered an economic provision of the CBA.
157 EMPLOYEES UNION OF BAYER PHILS., FFW, and JUANITO S. FACUNDO
(President) v. BAYER PHILS, INC., DIETER LONISHEN (President),
ASUNCION AMISTOSO (HRD Manager), AVELINA REMIGIO AND ANASTACIA
VILLAREAL VILLARAMA, JR., J.:
FACTS:
 Petitioner Employees Union of Bayer Philippines. (EUBP) is the
exclusive bargaining agent of all rank-and-file employees of Bayer
Philippines (Bayer). In 1997, EUBP, headed by its president Facundo,
negotiated with Bayer for the signing of a CBA. During the negotiations,
EUBP rejected Bayers 9.9% wage-increase proposal resulting in a
bargaining deadlock. Subsequently, EUBP staged a strike, prompting
the Secretary of the Department of Labor and Employment (DOLE) to
assume jurisdiction over the dispute.
 In November, pending the resolution of the dispute, respondent Avelina
Remigio (Remigio) and 27 other union members, without any authority
from their union leaders, accepted Bayers wage-increase proposal. In
1998, the DOLE Secretary issued an arbitral award ordering EUBP and
Bayer to execute a CBA retroactive to January 1997 and to be made
effective until 2001.  management of Bayer to respect the authority of the duly-elected
 Meanwhile, the rift between Facundos leadership and Remigios group
broadened.
 Remigio solicited signatures from union members in support of a
resolution containing the decision of the signatories to (1) disaffiliate
from FFW, (2) rename the union as Reformed Employees Union of
Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws
for the union, (4) abolish all existing officer positions in the union and
elect a new set of interim officers, and (5) authorize REUBP to
administer the CBA between EUBP and Bayer.
 The said resolution was signed by 147 of the 257 local union members
and a copy of this was given to Facundo, FFW and Bayer informing
them of the abovementioned.
 Facundo, meanwhile, sent similar requests to Bayer requesting for the
remittance of union dues in favor of EUBP and accusing the company of
interfering with purely union matters. Bayer responded by deciding not
to deal with either of the two groups, and by placing the union dues
collected in a trust account until the conflict between the two groups is
resolved.
 EUBP filed a complaint for unfair labor practice (first ULP complaint)
against Bayer for non-remittance of union dues.
 In 1999, while the first ULP case was still pending and despite EUBPs
repeated request for a grievance conference, Bayer decided to turn over
the collected union dues amounting to P254,857.15 to respondent
Anastacia Villareal, Treasurer of REUBP.
 Aggrieved by the said development, EUBP lodged a complaint against
Remigios group before the Industrial Relations Division of the DOLE
praying for their expulsion from EUBP for commission of acts that
threaten the life of the union.
 LA- dismissed the first ULP complaint for lack of jurisdiction because
the root cause for Bayers failure to remit the collected union dues can
be traced to the intra-union conflict between EUBP and Remigios
group and that the charges imputed against Bayer should have been
submitted instead to voluntary arbitration. EUBP did not appeal the
said decision.
 Meaniwhile, petitioners filed a second ULP complaint against the
respondents charging the respondents with ULP committed by
organizing a company union, gross violation of the CBA and violation of
their duty to bargain. Petitioners complained that Bayer refused to
remit the collected union dues to EUBP despite several demands sent to
the management. They also alleged that the requests sent to Bayer for a
renegotiation of the last 2 years of the 1997-2001 CBA, Bayer opted to
negotiate instead with Remigio’s group.
 BLR- reversed the Regional Directors ruling and ordered the
officers of EUBP in the administration of the prevailing CBA.
(Unfortunately, the said BLR ruling came late since Bayer had already
signed a new CBA with REUBP on February 21, 2000. The said CBA was
eventually ratified by majority of the bargaining unit.)
 LA- dismissed EUBPs second ULP complaint for lack of jurisdiction as
the case involves intra-union disputes, pursuant to Art 226 of the LC;
NLRC- dismissed the second ULP complaint.; CA- sustained LA and
NLRC Rulings.
ISSUES:
 WON the act of the management of Bayer in dealing and negotiating
with Remigios splinter group despite its validly existing CBA with EUBP
can be considered unfair labor practice and, if so, whether EUBP is
entitled to any relief - The petition is partly meritorious.
 WON Bayer, Lonishen and Amistoso liable for ULP- Yes
HELD:
 It is clear from Secs. 1 and 2, Rule XI of Department Order No. 40-03,
Series of 2003 of the DOLE that the issues raised by petitioners do not
fall under any of the circumstances therein constituting an intra-union
dispute. More importantly, the petitioners do not seek a determination
of whether it is the Facundo group (EUBP) or the Remigio group
(REUBP) which is the true set of union officers. Instead, the issue raised
pertained only to the validity of the acts of management in light of the
fact that it still has an existing CBA with EUBP. Thus as to Bayer,
 Lonishen and Amistoso the question was whether they were liable for
unfair labor practice, which issue was within the jurisdiction of the
NLRC. The dismissal of the second ULP complaint was therefore
erroneous. However, as to respondents Remigio and Villareal, we find
that petitioners complaint was validly dismissed.
Petitioners ULP complaint cannot prosper as against respondents Remigio and
Villareal because the issue, as against them, essentially involves an intra-union
dispute based on Section 1 (n) of DOLE Department Order No. 40-03. To rule on
the validity or illegality of their acts, the Labor Arbiter and the NLRC will
necessarily touch on the issues respecting the propriety of their disaffiliation and
the legality of the establishment of REUBP issues that are outside the scope of their
jurisdiction. Accordingly, the dismissal of the complaint was validly made, but
only with respect to these two respondents.
 Indeed, in Silva v. NLRC, we explained the correlations of Article 248 (1)
and Article 261 of the Labor Code to mean that for a ULP case to be
cognizable by the Labor Arbiter, and for the NLRC to exercise appellate
jurisdiction thereon, the allegations in the complaint must show prima
facie the concurrence of two things, namely: (1) gross violation of the
CBA; and (2) the violation pertains to the economic provisions of the
CBA.
EUBP is now the certified collective bargaining agent of its rank-and-file
employees.
We do not agree.
First, a legitimate labor organization cannot be construed to have abandoned its
pending claim against the management/employer by returning to the
negotiating table to fulfill its duty to represent the interest of its members,
except when the pending claim has been expressly waived or compromised in
its subsequent negotiations with the management. To hold otherwise would be
tantamount to subjecting industrial peace to the precondition that previous
claims that labor may have against capital must first be waived or abandoned
before negotiations between them may resume. Undoubtedly, this would be
against public policy.
Second, that the management of Bayer decided to recognize EUBP as the
certified collective bargaining agent of its rank-and-file employees for purposes
of its 2006-2007 CBA negotiations is of no moment.
 It did not obliterate the fact that the management of Bayer had
withdrawn its recognition of EUBP and supported REUBP during the
tumultuous implementation of the 1997-2001 CBA. Such act of
interference which is violative of the existing CBA with EUBP led to the
filing of the subject complaint.

This pronouncement in Silva, however, should not be construed to apply to

violations of the CBA which can be considered as gross violations per se, such as
utter disregard of the very existence of the CBA itself, similar to what happened
in this case. When an employer proceeds to negotiate with a splinter union
despite the existence of its valid CBA with the duly certified and exclusive
bargaining agent, the former indubitably abandons its recognition of the latter
and terminates the entire CBA.

Respondents cannot claim good faith to justify their acts. They knew that
Facundo’s group represented the duly-elected officers of EUBP. Moreover, they
were cognizant of the fact that even the DOLE Secretary himself had recognized
the legitimacy of EUBPs mandate by rendering an arbitral award ordering the
signing of the 1997-2001 CBA between Bayer and EUBP. Respondents were
likewise well-aware of the pendency of the intra-union dispute case, yet they
still proceeded to turn over the collected union dues to REUBP and to effusively
deal with Remigio. The totality of respondents conduct, therefore, reeks with
anti-EUBP animus.
Other issue *Just in case Atty. A asks*
Bayer, Lonishen and Amistoso argue that the case is already moot and academic
following the lapse of the 1997-2001 CBA and their renegotiation with EUBP for
the 2006-2007 CBA. They also reason that the act of the company in negotiating
with EUBP for the 2006-2007 CBA is an obvious recognition on their part that
158 PHILIPPINE METAL FOUNDRIES INC v. CIR
G.R. No. L-34948-49 May 15, 1979
FACTS
Petitioner, in its complaint charged the Regal Manufacturing Employees
Associations FTUP and its members (herein private respondents), with unfair
labor practice for declaring a strike and picketing the company's premises
without filing a notice of strike in spite of the existence of a no strike, no lockout
clause and grievance procedure in the collective bargaining agreement entered
into between the petitioner and the Union.
In their answer to this complaint, the Union and its members denied the charge
and alleged that the Union requested the management for a grievance
conference, stating in its invitation the time and place of meeting, but the
company refused and instead handed the Union's President a memorandum
dismissing him from work and told the Union members not to report for work,
which is in violation of the no lockout and no strike clause of the contract.
Upon the other hand, petitioner Philippine Metal Foundries, Inc. and its General
Manager were charged by private respondents on with unfair labor practice for
the dismissal of Celestino Baylon, President of the Union allegedly due to his
union activities in representing and protecting the Union members in their
relations with the petitioner.
After holding joint trial on these two cases, the CIR rendered its decision, finding
that Baylon, as Union President, was discharged for his union activities and that
the employees declared a strike because they believed in good faith that the
dismissal of their President was an unfair labor practice.
The Court declared respondents Philippine Metal Foundries, Inc. and Leopoldo
Relunia, guilty of unfair labor practice in dismissing complainant Celestino
Baylon; ordered respondents to reinstate Celestino Baylon to his former
position with all the rights and privileges formerly appertaining thereto, with
one (1) year back wages; and dismissed the petitioner's charge in ULP.
Its motion for reconsideration having been denied by the Court of Industrial
Relations en banc, petitioner filed the present petition which was considered by
this Court as submitted for decision without respondents' brief.
ISSUES: Whether Celestino Baylon was dismissed due to his absences or to his
union activities as Union President
RULING:
He was dismissed because of union acgtivities. In determining whether a
discharge is discriminatory, the true reason for the discharge must be
established. It has been said that while union activity is no bar to a discharge,
the existence of a lawful cause for discharge is no defense if the employee was
actually discharged for union activity. There is no question that Celestino
Baylon incurred numerous absences from January to September 1963. Had the
company wanted to terminate his services on the ground of absences, it could
have done so, pursuant to Article V of the Collective Bargaining Agreement as
early as March 1963 when he incurred twelve (12) consecutive absences
without permission. Its failure to do so shows that the infractions commited by
Baylon were disregarded.
The question of whether an employee was discharged because of his union
activities is essentially a question of fact as to which the findings of the Court of
Industrial Relations are conclusive and binding if supported by substantial
evidence considering the record as a whole. 1 This is so because the Industrial
Court is governed by the rule of substantial evidence, rather than by the rule of
preponderance of evidence as in any ordinary civil cases. 2 Substantial evidence
has been defined as such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion. 3 It means such evidence which affords a
substantial basis from which the fact in issue can be reasonably inferred. 4
Examining the evidence on hand on this matter, We find the same to be
substantially supported.
It is admitted by petitioner that it accepted the invitation of Baylon for a
grievance conference on October 5, 1963. Yet, two hours after it accepted the
letter of invitation, it dismissed Baylon without prior notice and/or
investigation. Such dismissal is undoubtedly an unfair labor practice committed
by the company. Under these facts and circumstances, Baylon and the members
of the Union had valid reasons to ignore the schedule grievance conference and
declared a strike.
The strike cannot be declared as illegal for lack of notice. In strikes arising out of
and against a company's unfair labor practice, a strike notice is not necessary in
view of the strike being founded on urgent necessity and directed against
practices condemned by public policy, such notice being legally re. required
only in cases of economic strikes.

Topic: Totality of Evidence
159 ROYAL UNDERGARMENT CORPORATION OF THE PHILIPPINES VS. CIR,
ROYAL UNDERGARMENT WORKERS UNION (PTGWO) AND ANTONIO CRUZ
Facts:
 Cruz was an electrician of Royal Undergarment. He was elected as
President of RUWU which became affiliated with PTGWO. RUWU-
PTGWO sent proposals to Royal Undergarment for collective
bargagining, Petitioner terminated the services of Cruz on the basis of
the latter’s “record and after careful analysis and deliberation. His wife
was also terminated. Thus, RUWU called a strike
 RUWU-PTGWO and Petitioner entered into a Return-to-Work
Agreement thru the conciliation efforts of the Department of Labor.
The agreement contained the following provision: reinstatement for
both employees when the RUWU-PTGWO shall have been chosen as the
CBAgent for the workers at the consent election to be held in the
company premises
 The records do not disclose the results of the consent election.
Subsequently, Cruz and his wife were both re-employed and reinstated
by petitioner corporation, thereby indicating the victory of RUWU-
PTGWO in the consent election.
 RUWU-PTGWO and petitioner into a CBA which contained a grievance
procedure for the settlement of disputes.
 Meanwhile, PTGWO urged its member-unions to stage a nationwide
strike. Thus, respondent Cruz campaigned among the members of
RUWU to join the strike. Cruz approached three co-employees who are
supervisors of the company. These persons contended that respondent
Cruz, who was under the influence of liquor, uttered the following
remarks to them: “Ikaw, Ikaw, Ikaw - - - mga hayop kayo. Bibigyan ko
kayo ng isang linggong taning sa buhay ninyo ipapapatay ko kayo.” They
also claim that respondent Cruz had challenged another co-employee.
 Respondent and his witnesses denied this charge and claimed that what
the respondent actually said to the three employees was: “Ikaw, Ikaw,
Ikaw pare, alam kong matitigas kayo rito sa compania, kaya’t ako’y
nakikiusap, kung maaari pag-natuloy ang nationwide strike bukas,
makiisa kayo at gamitin ang tigas ninyo.”
 Cruz was placed on preventive suspension for threatening “the lives of
four (4) employees” and for having “been reported under the influence
of liquor,” both acts being “contrary to rules and regulations.” Then, he
was dismissed so he filed for ULP.
Issue: W/N the petitioner committed unfair labor practice - YES
CIR: Surrounding circumstance of the case is a valid and sufficient basis
for the charge of unfair labor practice against petitioner company. There is no
question as to the union activities of the complainant.
SC: We accord respect to the findings of the industrial court. It shall be unfair
labor practice for an employer to discriminate in regard to tenure of
employment or any term or condition of employment to encourage or
discourage membership in any labor organization. We have perused the record
and found that the totality of evidence as found by respondent court supports
the conclusion that respondent Cruz has been unjustly dismissed by reason of
his union activities. The charge by petitioner against respondent Cruz for being
under the influence of liquor on a certain date and for having threatened the
lives of his co-employees is too flimsy to merit serious consideration. We have
on record the undisputed facts that private respondent, as president of RUWU,
was known for his aggressive and militant union activites; that he and his wife
had been previously dismissed on the ground of active participation in union
affairs; that they were reemployed only pursuant to the express terms of the
Return-to-Work Agreement executed by petitioner corporation and RUWU
when the latter won in the consent election; that respondent Cruz was
dismissed again for the second time in the course of his campaign among RUWU
members to join the nationwide strike of PTGWO in which RUWU is a member
union.
It has previously been indicated that an employer may treat freely with an
employee and is not obliged to support his actions with a reason or purpose.
However, where the attendant circumstances, the history of the employer’s past
conduct and like considerations, coupled with an intimate connection between
the employer’s action and the union affiliations or activities of the particular
employee or employees taken as a whole raise a suspicion as to the motivation
for the employer’s action, the failure of the employer to ascribe a valid reason
therefor may justify an inference that his unexplained conduct in respect of the
particular employee or employees was inspired by the latter’s union
membership or activities
Further, factual findings of the CIR are conclusive in the absence of a showing
that the same have no support in the evidence on record. This Court will not
review said court’s factual findings as long as the same are supported by
evidence. This is so because the industrial court is governed by the rule of
substantial evidence rather than by the rule of preponderance of evidence as in
ordinary civil cases.
160 National Labor Union vs. Court of Industrial Relations, 116 SCRA 417,
No. L-31276 September 9, 1982
Facts:
Everlasting Manufacturing (EM) was charged of ULP because of CBa violations
and dismissal/lock outs of EES
In 1963, upon being summoned, Ang Wo Long, filed its answer denying the
material allegations of the complaint. He also prays for the dismissal of the case.
As affirmative defenses, it is claimed substantially
 that respondent establishment is no longer owned by Benito Estanislao
but by Ang Wo Long who purchased the same from the former for
valuable consideration and that the new owner is not duty bound to
respect whatever agreement has been entered into by the former
owner and the workers;
 that there has never been any employer-employee relationship
between the new owner and the complaining workers so that the latter
could not have been dismissed or locked out.
Issue:
Whether or not Ang Wo Long should be held liable for ULP
Held:
Yes.
Under the facts and circumstances of this case, it is irrational if not specious to
assume that Mr. Ang bought a business lock, stock, and barrel without inquiring
into its labor-management situation 1 and that his dismissal of all the union
members without retaining a few experienced workers and their replacement
with a completely new set of employees who were strangers to the company
was anything other than an attempt to rid the firm of unwanted union activity.
It is also irrational that Mr. Ang, the purchaser of a business outfit who was
careful enough to register himself as its new owner could not have been
unaware of a more sensitive aspect of the business, which was the relationship
of workers to management and the existence of a labor union threat.
Thus, Mr. Ang was really aware of the labor-management situation.
Also, in this case, it is obvious that there was conspiracy between the old owner
and the new owner to boot out members of the petition for union activity. The
summons issued to Benito Estanislao was returned by Ang Wo Long’s counsel
who stated that Benito Estanislao was no longer at his former address.
Summons had to be effected through publication. The person found guilty of
unfair labor practice did not show up at the reopened hearings and as far as the
records before US show, had disappeared. The concatenation of circumstances
clearly indicates the participation of both Mr. Estanislao and Mr. Ang in the
unfair labor practice. Hence, Ang Wo Long should be jointly and severally liable
with Benito S. Estanislao for the payment of backwages to the complaining
employees.
Consequently, the SC grants the three (3) years backwages without deduction or
qualification to the dismissed employees. Following the same considerations
and in fairness to Ang Wo Long, reinstatement of the complaining employees
should be made on the basis of the latter’s physical fitness for the respective 161. CLLC E.G. Gochangco Workers Union v. NLRC and E.G. GOCHANGCO,
jobs from which they were illegally ousted. INC.

161 SCRA 656 (1988)

TOPIC: Acts Violative of Right to Collective Bargaining; Enforcement, Remedies

and Sanctions; Compromise

FACTS:

1. Sometime in January 1980, the majority of the rank and file employees of
respondent firm (E.G. GOCHANGCO, INC.) organized the E.G. Gochangco
Workers Union as an affiliate of the CLLC.
2. The CLLC national president wrote the general manager of respondent firm
informing him of the organization of the union and requesting for a labor-
management conference to normalize employer-employee relations
a. The union sent a written notice to respondent firm requesting
permission for certain member officers and members of the union
to attend the hearing of the petition for certification election. The
management refused to acknowledge receipt of said notice
3. Thereafter, the private respondent preventively suspended the union
officers and members who attended the hearing 
a. The common ground alleged by private respondent for its action
was “abandonment of work on February 27, 1980."
b. On the same date, all the gate passes of all the above-mentioned
employees to Clark Air Base were confiscated by a Base guard.
4. Claiming that private respondent instigated the confiscation of their gate
passes to prevent them from performing their duties and that respondent
firm did not pay them their overtime pay, 13th month pay and other
benefits, petitioner union and its members filed a complaint for
constructive lockout and unfair labor practice against private respondent
a. Several more employees were suspended/terminated after the
filing of this case. They themselves filed a ULP case against the
company, which were consolidated with the present case
5. LA: ordered the company to reinstate all suspended and dismissed
employees to their former positions with payment of full backwages
6. NLRC: reversed LA and granted the company’s application for clearance to
terminate the services of the petitioners

ISSUE: Whether the respondent company is guilty of ULP. YES

AS REGARDS ULP
 We are convinced that the respondent company is indeed guilty of an unfair  Furthermore, these alleged waivers do not appear to have been presented
labor practice. It is no coincidence that at the time said respondent issued in the first Instance, They cannot be introduced for the first time on appeal.
its suspension and termination orders, the petitioners were in the midst of  Hence, the company is ordered to: (1) Reinstate the terminated employees
a certification election preliminary to a labor-management conference, (2) Order payment of backwages, moral and exemplary damages, and
purportedly, “to normalize employer-employee relations." attorney’s fees.
 It was within the legal right of the petitioners to do so, the exercise of which
was their sole prerogative, and in which management may not as a rule
interfere. 
 But as if to add insult to injury, the company suspended the petitioners on
the ground of “abandonment of work", the date on which apparently, the
pre-election conference had been scheduled. What unfolds here is a clear
effort by management to punish the petitioners for their union activities.
 As a consequence of such a suspension, the Clark Air Base guards
confiscated the employees’ gate passes, and banned them from the base
premises. We cannot be befooled by the company’s pretenses that "[t]he
subsequent confiscation by the Americans of the complainants’ passes is
beyond the powers of management."
o The petitioners were dispossessed of those gate passes precisely
because of the suspension meted out against them. It is not the
other way around, as the NLRC would have us believe, for the
confiscation of such passes would not furnish a ground for
suspension.
 In finding the petitioners’ suspension illegal, with more reason do we hold
their subsequent dismissal to be illegal. There is no merit in the claim that
the petitioners’ terms were coterminous with the duration of the contract.
There is nothing in the records that would show that the petitioners were
parties to that contract. 
o What impresses us is the Solicitor General’s submission that the
petitioners were regular employees and as such, their tenure did
not end with the expiration of the contract. 

AS REGARDS COMPROMISE:

 The Court likewise rejects the claims of an alleged waiver by the petitioners
of their economic demands, in the light of an alleged order issued by Labor
Arbiter Luciano Aquino in connection with another case(s) involving the
same parties.
 Acting on these allegations, the respondent Commission, baring its clear
bias for management, ruled that the petitioners had waived their claims
 We find this puzzling for clearly, Labor Arbiter Aquino’s resolution refers to
other cases and not the instant unfair labor practice controversy.
 In any event, we have held that unfair labor practice cases are not, in view
of the public interest involved, subject to compromises.
162 GERONIMO Q. QUADRA v. CA
G.R. No. 147593             July 31, 2006
Facts: Geronimo Q. Quadra was the Chief Legal Officer of respondent
Philippine Charity Sweepstakes Office (PCSO) when he organized and
actively participated in the activities of Philippine Charity Sweepstakes
Employees Association (CUGCO), an organization composed of the rank and
file employees of PCSO, and then later, the Association of Sweepstakes
Staff Personnel and Supervisors (CUGCO) (ASSPS [CUGCO]).
He was administratively charged before the Civil Service Commission with
violation of Civil Service Law and Rules for neglect of duty and misconduct
and/or conduct prejudicial to the interest of the service was found guilty of the
charges and recommended the penalty of dismissal. The following day, he
was sent a letter of dismissal
Petitioner filed a motion for reconsideration of the decision of the Civil
Service Commission t and, together with ASSPS (CUGCO), filed with the
Court of Industrial Relations (CIR) a complaint for unfair labor practice
against respondent PCSO and its officers.
CIR issued its decision finding respondent PCSO guilty of unfair labor
practice for having committed discrimination against the union and for having
dismissed petitioner due to his union activities. It ordered the reinstatement of
petitioner to his former position with full backwages and with all the rights and
privileges pertaining to said position.
Respondent PCSO complied with the decision of the CIR. But while it
reinstated petitioner to his former position and paid his backwages, it also
filed with the Supreme Court a petition for review on certiorari.
During the pendency of the case in the Supreme Court, petitioner filed with
the CIR a "Petition for Damages." He prayed for moral and exemplary
damages in connection with the ULP case. He cited the decision of the
Supreme Court in Rheem of the Philippines, Inc., et al. v. Ferrer, et
al.3 where it upheld the jurisdiction of the CIR over claims for damages
incidental to an employee's dismissal.
Respondent PCSO moved to dismiss the petition for damages on the
following grounds: (1) the CIR has no jurisdiction to award moral and
exemplary damages; (2) the cause of action is barred by prior judgment, it
appearing that two complaints are brought for different parts of a single
cause of action; and (3) the petition states no valid cause of action.
Petitioner resigned from PCSO on August 18, 1967.
Labor Arbiter rendered a decision awarding moral and exemplary damages
to petitioner in the amount of P1.6 million.
The NLRC affirmed the decision of the Labor Arbiter, prompting respondent
PCSO to file a petition for certiorari with the Court of Appeals.
The Court of Appeals reversed the decision of the NLRC. It held that there
was no basis for the grant of moral and exemplary damages to petitioner as
his dismissal was not tainted with bad faith
Petitioner now seeks the Court to review the ruling of the Court of Appeals.
Issue: Whether or not Quadra is entitled to moral damages?
Ruling: Yes. A dismissed employee is entitled to moral damages when the
dismissal is attended by bad faith or fraud or constitutes an act oppressive to
labor, or is done in a manner contrary to good morals, good customs or
public policy. Exemplary damages may be awarded if the dismissal is
effected in a wanton, oppressive or malevolent manner.
It appears from the facts that petitioner was deliberately dismissed from the
service by reason of his active involvement in the activities of the union
groups of both the rank and file and the supervisory employees of PCSO,
which unions he himself organized and headed. Respondent PCSO first
charged petitioner before the Civil Service Commission for alleged neglect of
duty and conduct prejudicial to the service because of his union activities.
The Civil Service Commission recommended the dismissal of petitioner.
Respondent PCSO immediately served on petitioner a letter of dismissal
even before the latter could move for a reconsideration of the decision of the
Civil Service Commission. Respondent PCSO may not impute to the Civil
Service Commission the responsibility for petitioner's illegal dismissal as it
was respondent PCSO that first filed the administrative charge against him.
As found by the CIR, petitioner's dismissal constituted unfair labor practice. It
was done to interfere with, restrain or coerce employees in the exercise of
their right to self-organization.
Unfair labor practices violate the constitutional rights of workers and
employees to self-organization, are inimical to the legitimate interests of both
labor and management, including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom and mutual
respect; and disrupt industrial peace and hinder the promotion of healthy and
stable labor-management relations. As the conscience of the government, it
is the Court's sworn duty to ensure that none trifles with labor rights.