COLLECTIVE BARGAINING

UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED

INDUSTRIES UNIONS - KILUSANG MAYO UNO (UFE- DFA-KMU) v.
NESTLE PHILIPPINES INC.
FACTS:
1. UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-
file employees of Nestle belonging to the latters Alabang and Cabuyao plants.
2. On 4 April 2001, as the existing collective bargaining agreement (CBA)
between Nestle and UFE-DFA-KMU was to end on 5 June 2001, the
Presidents of the Alabang and Cabuyao Divisions of UFE-DFA-KMU
informed Nestle of their intent to open new Collective Bargaining Negotiation
for the year 2001-2004 as early as June 2001.
3. In response thereto, Nestle informed them that it was also preparing its own
counter-proposal and proposed ground rules to govern the impending conduct
of the CBA negotiations
4. On 29 May 2001, in another letter to the UFE-DFA-KMU (Cabuyao Division
only), Nestle reiterated its stance 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. Dialogue between the company
and the union thereafter ensued.
5. On 14 August 2001, however, Nestle requested the (NCMB), to conduct
preventive mediation proceedings between it and UFE-DFA-KMU owing to
an alleged impasse in said dialogue; i.e., that despite fifteen (15) meetings
between them, the parties failed to reach any agreement on the proposed CBA.
6. UFE- DFA-KMU filed a Notice of Strike on 31 October 2001 with the
NCMB, complaining, in essence, of a bargaining deadlock pertaining to
economic issues, i.e., retirement (plan), panel composition, costs and
attendance, and CBA.
7. The result of a strike vote conducted by the members of UFE-DFA-KMU
yielded an overwhelming approval of the decision to hold a strike.
8. Secretary issued an Order assuming jurisdiction over the subject labor
dispute.

1
9. UFE-DFA-KMU sought reconsideration. SOLE denied. On 15 January 2002,
despite the order enjoining the conduct of any strike or lockout and
conciliation efforts by the NCMB, the employee members of UFE-DFA-
KMU at Nestle Cabuyao Plant went on strike.
10. Appellate court promulgated its Decision on the twin petitions for certiorari,
ruling entirely in favor of Union. Both parties appealed the aforequoted ruling.
Nestle essentially assailed that part of the decision finding the DOLE
Secretary to have gravely abused her discretion amounting to lack or excess of
jurisdiction when she ruled that the Retirement Plan was not a valid issue to
be tackled during the CBA negotiations; UFE-DFA-KMU, in contrast,
questioned the appellate courts decision finding Nestle free and clear of any
unfair labor practice.
11. MR both denied.
12. Court resolved to consolidate the two petitions inasmuch as they (1) involved
the same set of parties; arose from the same set of circumstances, i.e., from
several Orders issued by then DOLE Secretary, Hon. Patricia A. Sto. Tomas,
respecting her assumption of jurisdiction over the labor dispute between
Nestle and UFE-DFA-KMU, Alabang and Cabuyao Divisions; and (3)
similarly assailed the same Decision and Resolution of the Court of Appeals.
13. After giving due course to the instant consolidated petitions, this Court
promulgated on 22 August 2006 its Decision, now subject of UFE- DFA-
KMUs Motion for Partial Reconsideration and Nestle Motion for
Clarification. In its Motion for Partial Reconsideration, UFE-DFA- KMU
would have this Court address and discuss anew points or arguments that have
basically been passed upon in this Courts 22 August 2006 Decision.
ISSUE/s:
WON this Courts finding that Nestle was not guilty of unfair labor practice
because of failing on its duty to bargain collectively by imposing precondition
for negotiation, considering that the transaction speaks for itself, i.e, res ipsa
loquitor. No, Purpose of collective bargaining is the reaching of an agreement
resulting in a contract binding on the parties; but the failure to reach an
agreement after negotiations have continued for a reasonable period does not
establish a lack of good faith.
1. Purpose of collective bargaining is the reaching of an agreement resulting in a
contract binding on the parties; but the failure to reach an agreement after
2
 negotiations have continued for a reasonable period does not establish a lack
of good faith. The statutes invite and contemplate a collective bargaining
contract, but they do not compel one. The duty to bargain does not include the
obligation to reach an agreement.
2. The crucial question, therefore, 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.
As we have said, 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 some degree, the
question of good faith may be a question of credibility. The effect of an
employers or a unions individual actions is not the test of good-faith
bargaining, but the impact of all such occasions or actions, considered as a
whole, and the inferences fairly drawn therefrom collectively may offer a
basis for the finding of the NLRC.
3. For a charge of unfair labor practice to prosper, it must be shown that Nestle
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 x
x x in disclaiming unilateral grants as proper subjects in their collective
bargaining negotiations.
4. While the law makes it an obligation for the employer and the employees to
bargain collectively with each other, such compulsion does not include the
commitment to precipitately accept or agree to the proposals of the other. All
it contemplates is that both parties should approach the negotiation with an
open mind and make reasonable effort to reach a common ground of
agreement.
5. In this case, the Union merely bases its claim of refusal to bargain on a letter
dated 29 May 2001 written by Nestle where the latter laid down 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.
6. But as we have stated in this Courts Decision, said letter is not tantamount to
refusal to bargain. In thinking to exclude the issue of Retirement Plan from
the CBA negotiations, Nestle, cannot be faulted for considering the same
3
 benefit as unilaterally granted, considering that eight out of nine bargaining
units have allegedly agreed to treat the Retirement Plan as a unilaterally
granted benefit.
7. This is not a case where the employer exhibited an indifferent attitude towards
collective bargaining, Nestle never refused to bargain collectively with UFE-
DFA-KMU. The corporation simply wanted to exclude the Retirement Plan
from the issues to be taken up during CBA negotiations, on the postulation
that such was in the nature of a unilaterally granted benefit. An employers
steadfast insistence to exclude a particular substantive provision is no
different from a bargaining representatives perseverance to include one that
they deem of absolute necessity. It had a right to insist on its position to the
point of stalemate.
WON the DOLE Secretary can take cognizance of matters beyond the
amended Notice of Strike. Not RelevantNestle corporation seeks elucidation
respecting the dispositive part of this Courts Decision directing herein parties
to resume negotiations on the retirement compensation package of the
concerned employees. Not relevant

PAL v. PALEA
FACTS:
1. PALEA filed an (ULP) against PAL and Del Rosario (Director of Personnel
of PAL). PALEA alleged that the non-payment of the 13th month pay of PAL
employees who have not yet been regularized as of April 30, 1998 is in
contravention with PALEA's CBA with PAL.
2. PALEA entered into a CBA with PAL on February 6, 1987 covering the
period of 1986-1989. The CBA contained provisions requiring PAL to pay its
rank-and-file employees their 13th month pay or mid- year bonus in May
(under section 4) and Christmas Bonus (under section 5).
Section 5—Christmas Bonus The equivalent of one month’s current basic pay as of
November 30, shall be paid in December as a Christmas bonus. Payment may be
staggered in two (2) stages. It is distinctly understood that nothing herein contained shall
be construed to mean that the Company may not at its sole discretion give an additional
amount or increase the Christmas bonus.”

4
3. Prior to the 13th month pay or mid-year bonus, PAL released a guidelines
providing that only regular employees as of April 30, 1988 are eligible to be
paid the 13th month pay on May.
4. PALEA assailed the guidelines stating that all employees of PAL, regular or
non-regular, must be paid their 13th month pay. PALEA wrote a letter
informing PAL that 5 regular employees failed to receive their 13th month
pay. PAL replied stating that rank-and- file employees regularized after April
30, 1988 were not entitled to the 13th month pay because they had already
received their Christmas Bonus on December 9, 1988 pursuant to the IRR o
P.D. 851 (13th month pay law). Citing Section 3(c)41 of the IRR, PAL argues
that the Christmas Bonus is included in the term “its equivalent” .
5. Labor Arbiter: Dismissed PALEA’s case. NO ULP.
6. NLRC: Reversed the LA. The 13th month pay is separate and distinct from
the Christmas Bonus. Hence, the receipt of a Christmas Bonus did not amount
to the payment of the 13th month pay.CA Affirmed
PAL Contends that: PALEA contends that:
CBA does not apply to non-regular All employees of PAL are entitled to the
employees; thus benefits from the same benefit as they are within the same
agreement cannot apply to them like the collective bargaining unit and the
mid year bonus entitlement to such benefits spills over to
even non-union members.
It's been company practice not to extend PAL misrepresented the 13th month pay or
mid year bonus to those who have not mid year bonus to be the same as the
attained regular status by the month of May Christmas bonus when they are different
ISSUE/s:
Whether the benefits mentioned in the CBA include all members (regular
and non-regular) of the bargaining unit (the rank and file employees) – YES.
1. The Court ruled that a cursory reading of the CBA would indicate that the
CBA applies to all employees of the bargaining unit without distinguishing
regular and non-regular employees. It is a well-settled doctrine that the
benefits of a CBA extend to the laborers and employees in the collective
bargaining unit, including those who do not belong to the chosen bargaining
labor organization. Otherwise, it would be a clear case of discrimination.
2. Hence, to be entitled to the benefits under the CBA, the employees must
be members of the bargaining unit, but not necessarily of the labor
organization designated as the bargaining agent. PAL failed to

5
 substantiate that the non-regular employees have a distinct interest from
the regular employees of the same bargaining unit.
3. Petitioner PAL is committing a patent act of inequity that is grossly
prejudicial to the non-regular rank and file employees there being no rational
basis for withholding from the latter the benefit of a Christmas bonus besides
the 13th month pay or mid-year bonus, while the same is being granted to the
other rank and file employees of petitioner PAL who have been regularized as
of 30 April 1988, although both types of employees are members of the same
bargaining unit.
4. As it had willfully and intentionally agreed to under the terms of the CBA,
petitioner PAL must pay its regular and non- regular employees who are
members of the bargaining unit represented by respondent PALEA their 13th
month pay or mid-year bonus separately from and in addition to their
Christmas bonus.
5. A collective bargaining agreement refers to a negotiated contract between a
legitimate labor organization and the employer concerning wages, hours of
work and all other terms and conditions of employment in a bargaining unit.
Whether the 13th month pay is distinct from the Christmas Bonus as
provided for by the CBA. – YES. The Christmas bonus, payable in December of
every year, is distinguished from the 13th month pay, due yearly in May, for
which reason it was denominated as the mid-year bonus. Such being the case, the
only logical inference that could be derived therefrom is that petitioner PAL
intended to give the members of the bargaining unit, represented by respondent
PALEA, a Christmas bonus over and above its legally mandated obligation to
grant the 13th month pay.
Whether the Christmas Bonus remains an act of generosity despite being
included in the CBA. – NO. By incorporation in the CBA, it has become a
contractual obligation.
1. By virtue of its incorporation into the CBA, it has become more than just an
act of generosity on the part of petitioner PAL, but a contractual obligation it
has undertaken.

6
SAN MIGUEL FOODS, INC. v. SAN MIGUEL CORPORATION
EMPLOYEES UNION-PTWGO
FACTS:
1. Union, was the sole bargaining agent of all the monthly paid employees of
petitioner San Miguel Foods, Incorporated (SMFI).
2. On 1992, some employees of SMFI’s Finance Department, through the Union
brought a grievance against Finance Manager Montesa, for “discrimination,
favoritism, unfair labor practices, not flexible , harassment, promoting
divisiveness and sectarianism
3. Almost nine 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 Union’s requests
could not be granted.
4. The Union 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 attorney’s fees, and to cease and desist
from committing the same unjust discrimination in matters of promotion.”
5. SMFI et al. filed MTD , contending that the issues raised in the complaint
were grievance issues and, therefore, “should be resolved in the grievance
machinery provided CBA of the parties or in the mandated provision of
voluntary arbitration which is also provided in the CBA.” The Union opposed
the MTD.
6. LA granted SMFI et al.’s motion to dismiss and ordered the remand of the
case to the grievance machinery for completion of the proceedings.
7. NLRC by “Motion for Reconsideration/Appeal” it ordered the Labor Arbiter
to continue the proceedings on the Union’s complaint.
8. CA held 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. (Note: This is the one being
assailed by the Petitioner in this case)
9. In the Position Paper of the Union, it alleged that there were unfair labor
practices pursuant to Article 248 (e)44 and (i)45 of the Labor Code. It
specifically alleged:
a) “large scale and wanton unjust discrimination in matters of
promotion, particularly upon the following members of complainant:
7
 Ventura, Geronimo, Cruz, Calasin, de Peralta, Alano, And
Moraleda, all assigned with the Finance Department or respondent
SMFI.
b) gross and blatant violations by respondent SMFI of Section 5, Article
III (Job Security) and Section 4, Article VIII (Grievance Machinery)
of the current collective bargaining agreement (CBA) between
complainant and respondent SMFI, which provisions of said CBA
are hereunder quoted for easy reference.”
ISSUE/s:
1. WON the CA erred in holding that the Labor Arbiter 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-- NO.
1. The particular acts of ULP were not specified. However, the Union detailed
the particular acts of ULP in its Position Paper. Thus, Section 1 of Rule 8 of
the Rules of Court should not be strictly applied to a case filed before a Labor
Arbiter.
2. On promotions, the Union did not allege that they were done 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 Labor Code.
3. As for ULP committed under Article 248(i), for violation of a CBA, this
Article is qualified by Article 261 of the Labor Code, the pertinent portion of
which latter Article reads: “x x x violations of a Collective Bargaining
Agreement, except those which are gross in character, shall no longer be
treated as unfair labor practice and shall be resolved as grievances under the
CBA. For purposes of this article, gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious refusal to comply with the
economic provisions of such agreement.”
4. Silva vs. NLRC instructs that for a “ULP case to be cognizable by the Labor
Arbiter, and the NLRC to exercise its appellate jurisdiction, the allegations in
the complaint should show prima facie the concurrence of two things, namely:
a. Gross violation of the CBA; AND
b. The violation pertains to economic provisions of the CBA.

8
5. As reflected in the allegations of the Union, it charges SMFI to have violated
the grievance machinery provision in the CBA. The grievance machinery
provision in the CBA is NOT an economic provision. Hence, the second
requirement for a Labor Arbiter to exercise jurisdiction of a ULP is not
present.
6. Union likewise charges SMFI 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 by-passing
more senior employees who are deserving of said appointment.”
7. 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 labor Code, be considered an economic provision.

9
Capitol Medical Center v. Trajano
FACTS:
1. Capitol Medical Center Employees Association-Allience of Filipino workers
(Union) is a duly registered labor union acting as the certified collective
bargaging agent of the rank and file employees of Capitol Medical Center, a
hospital in Quezon City.
2. The union, through its President Ibabao, sent Capitol Medical Center a letter
requesting a negotiation of their (CBA).
3. CMC challenged the union’s legitimacy and refused to bargain with them.
Thereafter Capitol Medical Center filed a petition for cancellation of the
union’s certificate of registration with the BLR.
4. The union filed a notice of strike with the NCMB. The union alleged that
Capitol Medical Center’s refusal to bargain constitutes as unfair labor
practice.
5. The hospital and the union failed to reach an amicable settlement. A month
later the union held a strike.
6. Labor Secretary issued an order assuming jurisdiction over the dispute and
ordered all the striking workers to return to work. Moreover, that proposals
and counter- proposals for a CBA be submitted within 10 days.
7. Note however that while the case was on appeal with the CA, the Regional
Director issued an order denying the petition for cancellation of union’s
certificate of registration
8. The decision of the regional director was affirmed by BLR, ruling that:
a) First, In order to allow an employer to validly suspend the bargaining
process, there must be a valid petition for certification election. The mere
filing of a petition does not ipso facto justify the suspension of negotiation
by the employer
b) Second, the primary assumption of jurisdiction may be exercised by the
Director of BLR even without the necessity of prior notice or hearing
given to any of the parties disputants
c) While the hospital asserts that the union has lost its legitimacy, at every
turn it has been ruled by the various labor administrative officials that the
respondent union is legitimate.
[Back to the pending CA case because of SOLE’s order to resume normal
operation]
10
9. CA affirmed the decision
10. Capitol Medical Center argues that:
 The petition for cancellation of union’s certificate of registration involves
a prejudicial question that should first be settled before the SOLE can
order the hospital and union to bargain collectively.
 The Secretary of Labor cannot exercise his powers under Article 263 (g)
of the Labor Code without observing the requirements of due process.
ISSUE/s:
W/N the petition for cancellation of union’s certificate of registration should
first be settled before the SOLE can order an employer and collective
bargaining agent to bargain collectively –— NO.
1. The Secretary of Labor correctly ruled that the pendency of a petition for
cancellation of union registration does not preclude collective bargaining.
Neither the pendency of a petition to cancel the union’s registration certificate
bar a certification election.
2. A union is not affected by the pendency of the Petition for Cancellation
pending against it. Unless its certificate of registration and its status as the
certified bargaining agent are revoked, the Hospital is, by express provision of
the law, duty bound to collectively bargain with the Union
3. Moreover, during the pendency of this case before the CA, the Regional
Director issued an Order on October 1, 1998 denying the petition for
cancellation of certificate of registration. This Order became final and
executory and recorded in the BLR’s Book of Entries of Judgments.
W/N the SOLE needed to give prior notice or hearing before he could order
the resumption of normal operations –NO.
1. In labor disputes adversely affecting the continued operation of such hospitals,
clinics or medical institutions, it shall be the duty of the striking union or
locking-out employer to provide and maintain an effective skeletal workforce
of medical and other health personnel, whose movement and services shall be
unhampered and unrestricted, as are necessary to insure the proper and
adequate protection of the life and health of its patients, most especially
emergency cases, for the duration of the strike or lockout.
2. In such cases, the SOLE is mandated to immediately assume, within (24)
hours from knowledge of the occurrence of such a strike or lockout,

11
 jurisdiction over the same or certify it to the Commission for compulsory
arbitration.
3. For this purpose, the contending parties are strictly enjoined to comply with
such orders, prohibitions and/or injunctions as are issued by the SOLE or the
Commission, under pain of immediate disciplinary action, including dismissal
or loss of employment status or payment by the locking-out employer of
backwages, damages and other affirmative relief, even criminal prosecution
against either or both of them.
4. The discretion to assume jurisdiction may be exercised by the Secretary of
Labor and Employment without the necessity of prior notice or hearing given
to any of the parties. The rationale for his primary assumption of jurisdiction
can justifiably rest on his own consideration of the exigency of the situation in
relation to the national interests.

12
STANDARD CHARTERED BANK EMPLOYEES UNION VS. CONFESOR
Facts:
1. 1990, the Bank and the Union signed a five-year (CBA) with a provision to
renegotiate the terms thereof on the third year. Prior to the expiration of the
three-year period but within the 60 day freedom period
2. In 1993, The Union initiated the negotiations. the Union, through its (UNION
PRESIDENT) sent a letter containing its proposals covering political
provisions and thirty- four (34) economic provisions. Included therein was a
list of the names of the members of the Unions negotiating panel.
3. In a Letter, the bank sent a letter thru its country manager attaching its
counter-proposal to non-economic provisions proposed by the Union.
4. . The parties agreed to set meetings to settle their differences on the proposed
CBA.
5. Before the commencement of the negotiation, the Union suggested to exclude
the bank lawyers in the negotiating team. The Bank acceded.
6. Meanwhile, Diokno said that it shall be a family affair and suggested to the
Union President to exclude: Jose P. Umali, Jr (NUBE PRESIDENT)., the
President of the National Union of Bank Employees (NUBE), the federation
to which the Union was affiliated, be excluded from the Unions negotiating
panel. However, Umali was retained as a member thereof.
7. The Union and the Bank reached a deadlock on its non-economic provisions.
Months after, the negotiation for economic provisions commenced. The
NUBE PRESIDENT chided the Bank for the insufficiency of its counter-
proposal on the provisions on salary increase, group hospitalization, death
assistance and dental benefits.
8. Upon the Banks insistence to tackle the economic package items by item [in
the negotiations of the CBA]. Upon the Unions suggestion, the Bank indicated
which provisions it would accept, reject, retain and agree to discuss. The Bank
suggested that the Union prioritize its economic proposals, considering that
many of such economic provisions remained unresolved. The Union,
however, demanded that the Bank make a revised itemized proposal
9. Union suggested that if the Bank would not accept their demands then it
would be necessary to seek third party assistance. After the break, the Bank
presented its revised counter-proposal (with respect to the demands above).

13
10. .The Head of the Panel stated that, in order for the Bank to make a better
offer, the Union should clearly identify what it wanted to be included in the
total economic package. FED PRESIDENT replied that it was impossible to
do so because the Banks counter- proposal was unacceptable. He furthered
asserted that it would have been easier to bargain if the atmosphere was the
same as before, where both panels trusted each other.
11. The Union declared a deadlock and filed a Notice of Strike before the
National Conciliation and Mediation Board (NCMB). [The ULP case was
probable filed here, there was no mention in the facts where the ULP case
against the bank was filed]
12. The Bank filed a case against the Union of ULP in the NLRC, with the
following grounds, the Bank alleged that:
a) The Union violated its duty to bargain, as it did not bargain in good faith.
b) the Union demanded sky high economic demands, indicative of blue-sky
bargaining.
c) the Union violated its no strike- no lockout clause by filing a notice of
strike before the NCMB.
d) Considering that the filing of notice of strike was an illegal act, the Union
officers should be dismissed.
e) Finally, the Bank alleged that as a consequence of the illegal act, the Bank
suffered nominal and actual damages and was forced to litigate and hire
the services of the lawyer.
5. Secretary assumed jurisdiction a pursuant to Article 263(g) of the Labor Code
over the labor dispute and the ULP Case. The SOLE ordered to execute the
CBA that shall be retroactive to 01 April 1993 and shall remain effective for
two years thereafter, or until such time as a new CBA has superseded it. The
SOLE created its own terms to balancing the demands of the Union and
counter-proposals of the Bank.
6. The SOLE dismissed the charges of ULP, explaining that both parties failed to
substantiate their claims. the SOLE stated that ULP charges would prosper
only if shown to have directly prejudiced the public interest. SOLE denied the
MRs of both the Union and the Bank
7. Bank and the Union signed the CBA. Immediately thereafter, the wage
increase was effected and the signing bonuses based on the increased wage
were distributed to the employees covered by the CBA.
14
8. The Union alleges that the SOLE acted with GADALEJ with its resolution
that there is no ULP committed despite that the Bank interfered with the
Unions choice of negotiator.The Union further argued that contrary to the
ruling of the public respondent, damage or injury to the public interest need
not be present in order for unfair labor practice to prosper.
9. The Union, likewise, pointed out that the SOLE failed to rule on the ULP
charges arising from the Banks surface bargaining and that the Bank is in bad
faith for refusal to disclose information
10. Bank prayed for the petition to be dismissed as the Union was estopped in
sigining the CBA before. It asserted that it is the Union who committed ULP
(same grounds in fact #15) and that the Union removed their negotiating team

ISSUE: Whether or not the Union was able to substantiate its claim of unfair
labor practice against the Bank:

Interference under Article 248 (a) of the Labor Code (Negotiator choice issue)

1. Under the ILO Convention and the Constitution what is protected is the
workers’ right to self-organization and interference to such causes disruption
with the industrial peace. Hence, Article 248(a) of the Labor Code, considers
it an unfair labor practice when an employer interferes, restrains or coerces
employees in the exercise of their right to self-organization or the right to
form association. The right to self- organization necessarily includes the right
to collective bargaining.

2. Parenthetically, if an employer interferes in the selection of its negotiators or

coerces the Union to exclude from its panel of negotiators a representative of
the Union, and if it can be inferred that the employer adopted the said act to
yield adverse effects on the free exercise to right to self-organization or on the
right to collective bargaining of the employees, ULP under Article 248(a) in
connection with Article 243 of the Labor Code is committed.

3. In order to show that the employer committed ULP under the Labor Code,
substantial evidence is required to support the claim. In the case at bar,
the Union bases its claim of interference on the alleged suggestions of Head of
the Negotiation Panel to exclude the NUBE president from the Unions
negotiating panel
15
4. The circumstances that occurred during the negotiation do not show that the
suggestion made by the Head of the Negotiation Panel to the Union president
is an anti-union conduct from which it can be inferred that the Bank
consciously adopted such act to yield adverse effects on the free exercise of
the right to self-organization and collective bargaining of the employees,
especially considering that such was undertaken previous to the
commencement of the negotiation and simultaneously with Union president
suggestion that the bank lawyers be excluded from its negotiating panel.

5. The records show that after the initiation of the collective bargaining process,
with the inclusion of the NUBE president in the Unions negotiating panel, the
negotiations pushed through. It is clear that such ULP charge was merely an
afterthought. The accusation occurred after the arguments and differences
over the economic provisions became heated and the parties had become
frustrated. It happened after the parties started to involve personalities.

interferes in the choice of negotiators but in this case the union failed to provide
substantial evidence.
The Duty to Bargain Collectively/ Surface Bargaining Issue
1. The Union alleged that the Bank just went through the motions of bargaining
without any intent of reaching an agreement, as evident in the Banks counter-
proposals.
2. Surface bargaining is defined as going through the motions of negotiating
without any legal intent to reach an agreement. The resolution of surface
bargaining allegations never presents an easy issue. The determination of
whether a party has engaged in unlawful surface bargaining is usually a
difficult one because it involves, at Article 242. Rights of Legitimate Labor
Organization
3. The minutes of meetings do not show that the Bank had any intention of
violating its duty to bargain with the Union. Records show that after the
Union sent its proposal to the Bank Thereafter, meetings were set for the
settlement of their differences. The minutes of the meetings show that both the
Bank and the Union exchanged economic and non-economic proposals and
counter-proposals.
16
On Bank’s bad faith
1. The records show that the Banks counter-proposals on the non- economic
provisions or political provisions did not put up for grabs the entire work of
the Union and its predecessors. There were actually many provisions which it
proposed to be retained.
2. The information requested was not done in the manner the law has laid down
to exercise such right. The Union, did not, , send a written request for the
issuance of a copy of the data about the Banks rank and file employees.
No Grave Abuse of Discretion on the part of SOLE
1. The special civil action for certiorari may be availed of when the tribunal,
board, or officer exercising judicial or quasi-judicial functions has acted
without or in excess of jurisdiction and there is no appeal or any plain, speedy,
and adequate remedy in the ordinary course of law for the purpose of
annulling the proceeding
2. While it is true that a showing of prejudice to public interest is not a requisite
for ULP charges to prosper, it cannot be said that the public respondent acted
in capricious and whimsical exercise of judgment, equivalent to lack of
jurisdiction or excess thereof. representatives of the employees in the
bargaining unit, or within sixty (60) calendar days before the expiration of the
existing collective bargaining agreement, or during the collective negotiation;

ULP on refusal to furnish the Union with copies of the relevant data – NO. the
refusal to disclose information to the Union was justified because the union did
not exercise the right to the information properly.
Estoppel not Applicable in the Case at Bar
1. In the case, however, the approval of the CBA and the release of signing
bonus do not necessarily mean that the Union waived its ULP claim against
the Bank during the past negotiations. After all, the conclusion of the CBA
was included in the order of the SOLE, while the signing bonus was
included in the CBA itself.
2. Moreover, the Union twice filed a motion for reconsideration respecting its
ULP charges against the Bank before the SOLE.
The Union Did Not Engage in Blue-Sky Bargaining

17
1. The Union did not make exaggerated or unreasonable proposals. The Bank
failed to show that the economic demands made by the Union were
exaggerated or unreasonable.
2. The minutes of the meeting show that the Union based its economic proposals
on data of rank and file employees and the prevailing economic benefits
received by bank employees from other foreign banks doing business in the
Philippines and other branches of the Bank in the Asian region.

18
General Milling Corporation v. CA
FACTS:
1. GMC) had employed 190 workers in its two plants in Cebu and Lapu-Lapu
City. These employees were all members of (Union), the duly certified
baragaining agent.
2. Parties concluded a CBA which included the issue of representation for a term
of 3 years.
3. A day before expiration of the CBA, the union sent GMC a proposed CBA,
requesting that GMC submits its counter-proposal within 10 days.
4. GMC wrote the Union claiming that there was no basis to negotiate with a
union which no longer existed. This was brought about by of individual letters
from workers which GMC concluded after receiving letters claiming that
several workers had withdrawn their union membership on grounds of
religious affiliation and personal differences.
5. Union officers disclaimed 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.
6. GMC dismissed Marcia Tumbiga, a union member, on the ground of
incompetence. The Union protested and requested GMC to submit the matter
to the grievance procedure in the CBA, but GMC ignored.
7. Union filed a complaint against GMC with the NLRC for unfair labor
practice for:
a. Refusal to bargain collectively;
b. Interference with the right to self-organization;
c. Discrimination.
8. LA dismissed the case and recommended that a petition for certification
election be held
9. NLRC reversed the LA and found for the Union. MR-GMC .
10. CA found for the Union.
ISSUE/s:
WON GMC is guilty of unfair labor practice for violating the duty to bargain
collectively – NO.
Violation of Duty to Bargain Collectively

19
1. The law mandates that the representation provision of a CBA should last for 5
years. The relation between labor and management should be undisturbed
until the last 60 days of the 5th year.
2. 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 5 years
from the date of effectivity of the CBA,.
3. 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.
4. Under Art. 250, the other party is required to make a reply to a proposal to
collective bargaining not later than 10 calendar days from receipt of notice.
Where the employer did not even bother to submit an answer to the bargaining
proposals of the union, there is a clear evasion of the duty to bargain
collectively.
5. GMC's refusal to make a counter-proposal to the union's proposal for CBA
negotiation is an indication of its bad faith. 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.
WON GMC is guilty of unfair labor practice for interfering with the rights of its
employees to self-organization – NO.
1. . The fact that the resignations of the union members occurred during the
pendency of the case before the labor arbiter shows GMC's desperate attempts
to cast doubt on the legitimate status of the union., the ill-timed letters of
resignation from the union members indicate that GMC had interfered with
the right of its employees to self-organization.
Imposing upon GMC the draft CBA proposed by the union for two years to begin
from the expiration of the original CBA – NO.
1. Art. 253 mandates parties to keep the status quo while they are still in the
process of working out their respective proposal and counter proposal.
General rule is that when a CBA already exists, its provision shall continue to
govern the relationship until a new one is agreed upon.

20
2. However, when one of the parties abuses this grace period by purposely
delaying the bargaining process, a departure from the general rule is
warranted.
3. It is not obligatory upon either side of a labor controversy to precipitately
accept or agree to the proposals of the other. But an erring party should not be
allowed to resort with impunity to schemes feigning negotiations by going
through empty gestures. Thus, by imposing on GMC the provisions of the
draft CBA proposed by the union, the SC believed that the interests of equity
and fair play were properly served and both parties regained equal footing,
which was lost when GMC thwarted the negotiations for new economic terms
of the CBA.
4. Since it was GMC which violated the duty to bargain collectively, based on
jurisprudence, it had lost its statutory right to negotiate or renegotiate the
terms and conditions of the draft CBA proposed by the union.

21
Halagueña, et al., and other flight attendants of Philippine Airlinesi.
Philippine Airlines
FACTS:
1. The petitioners in this case were employed as female flight attendants of PAL
prior to November 22, 1996.
2. The Flight Attendants are members of Union, the labor organization certified
as the sole and exclusive bargaining representative of the flight attendants,
flight stewards and pursers of PAL.
3. PAL and the Union entered into a CBA for the years 2000-2005.
 Section 144, Part A of said CBA provides that the compulsory retirement age
shall be 55 for females and 60 for males.
4. In 2003, the Flight Attendants manifested that the said provision is
discriminatory and demanded for equal treatment with their male
counterparts. They demanded for the removal of gender discrimination
provisions in the coming renegotiations with PAL.
5. The president of the Union submitted their 2004-2005 CBA proposals and
manifested willingness to commence collective bargaining negotiations with
management as soon as possible.
6. On 2004, the Flight Attendants filed a Special Civil Action for Declaratory
Relief with Prayer for Issuance of a TRO and WPI with the RTC against PAL
for the invalidity of Section 144 Part A of the CBA.
7. RTC ssued the WPI, enjoining PAL from further implementing Section 144
Part A of the CBA.
8. PAL filed a Petition for Certiorari and Prohibition with Prayer for TRO an
WPI with the CA praying that the RTC order be denied for lack of
jurisdiction/ GADALEJ.
9. CA granted this prayer
ISSUE:
WON the RTC has jurisdiction over the Flight Attendants’ action
challenging the legality or constitutionality of the provisions on the
compulsory retirement age contained in the CBA between PAL and the
Union. – YES
1. The Flight Attendants’ primary relief is the annulment of Section 144, Part A
of the CBA, which allegedly discriminates against them for being female
flight attendants. Said issue cannot be resolved solely by applying the Labor
22
 Code. It requires the application of the Constitution, labor statutes, law on
contracts and the CEDAW.
2. The power to apply and interpret the Constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction.
3. Not every dispute between an employer and employee involves matters that
only labor arbiters and the NLRC can resolve in the exercise of their
adjudicatory/quasi-judicial powers.
 The jurisdiction of LA’s and the NLRC is limited to disputes arising from an
employer-employee relationship which can only be resolved by reference to
the Labor Code, other labor statutes, or their CBA.
4. Actions between employees and employer where the employer- employee
releationship is merely incidental and the cause of action precedes from a
different source of obligation is within the exclusive jurisdiction of the regular
court.
1. Here, the employer-employee relationship between the parties is merely
incidental and the cause of action ultimately arose from different sources of
obligation—the Constitution and the CEDAW. Grievance machinery and
voluntary arbitrators do not have the power to determine and settle the issues
at hand
2. They have no jurisdiction and competence to decide the constitutional issues
relative to the questioned compulsory retirement age.
3. Questions on constitutionality of contracts involves the exercise of judicial
power, which can only be wielded by regular courts.
4. The dispute in the case is not between the Union and PAL since they have
already previously agreed upon the provision on compulsory retirement of the
female flight attendants as embodied in the CBA. The dispute is between PAL
and several female flight attendants who questioned the provision on
compulsory retirement of female flight attendants.
5. Referral to the grievance machinery and voluntary arbitration would not serve
the interest of the Flight Attendants., it would be futile because PAL already
implemented Section 114 Part A of the CBA when several of its female flight
attendants reached the compulsory retirement age of 55
WON the CBA unfairly discriminates against women flight attendants and
violates the Constitution, the Labor Code, and the CEDAW. – Such issue is a
question of fact, which requires presentation and reception of evidence by the
23
parties and a full-blown trial. Therefore, a remand to the RTC for proper
determination of the merits of the petition is just and proper.

24
PASSI v. Boclot
FACTS:
1. PASSI is engaged in the business of providing arrastre and stevedoring
services at Pier 8 in Manila North Harbor since 1974, and has been hiring
stevedores who assists in the loading and unloading of cargoes to and from the
vessels.
2. Boclot was hired by PASSI as a stevedore staring September 20, 1999.
3. In 2000, Philippine Ports Authority seized the facilities and took over the
operations of PASSI through its Special Takeover Unit, absorbing PASSI
workers as well as their relivers.
4. PASSI were able to regain control of their arrastre and stevedoring operations.
5. In 2003, Boclot filed a complaint with the Labor Arbiter claiming
regularization, payment of SIL, 13th month pays, damages and attys fees.
 Alleged that he was hired by PASSI in October 1999, and that he became a
regular employee by April 2000, since it was his sixth continuous month in
service in PASSIs regular course of business.
 that he remained a casual employee from the time he was first hired to
perform the services of a stevedore.
 Thus, he was denied the rights and privileges of a regular employee, including
those granted under the Collective Bargaining Agreement (CBA) such as
wage increase; medical, dental and hospitalization benefits; vacation and sick
leaves; uniforms, Christmas gifts, productivity bonus, accident insurance,
special separation pays, and others.
6. LA dismissed the complaint finding no factual or legal basis for the
regularization and that Boclot was nothing more than an extra worker who is
called upon to work at the pier in the absence of regular stevedores at a certain
shift.
7. NLRC declared that Boclot is a regular employee of the PASSI, however the
claims for the benefits under the CBA and other monetary claims were
dismissed
8. CA affirmed NLRC ruling,
PASSI argues:
 that respondent was hired as a mere reliever stevedore and, thus, could not
become a regular stevedore

25
 that the employment of the stevedores is governed by a system of rotation.
Based on this system of rotation, the work available to reliever stevedores is
dependent on the actual stevedoring and arrastre requirements at a current
given time.
 that Boclot, as a reliever stevedore, is a mere extra worker whose work is
dependent on the absence of regular stevedores during any given shift.
 as opposed to regular stevedores who work 16 days a month, Boclot oly
performed services for an average of 6.34 days a month from Sep 1999 to
June 2003
 That Articles 280-81 of the LC are not applicable since Boclot is neither a
probationary nor a casual employee
 That Article 24 of the CBA cannot be used to support Boclot’s contention that
he is a regular employee since the provision only applies to probationary and
casual employees in the company
ISSUE:
Whether Boclot has attained regular status as PASSI’s employee. – Yes.
regular employee, but on a different basis.
1. PASSI concedes that whenever Boclot worked as a reliever stevedore due to
the absence of a regular stevedore, he performed tasks that are usually
necessary and desirable to their business.
2. However,this in itself does not make him a regular stevedore, postulating that
the hiring of respondent as a reliever is akin to a situation in which a worker
goes on vacation/sick /maternity/paternity leave; and the employer is
constrained to hire another worker from outside the establishment to ensure
the smooth flow of its operations
3. The court agrees that Boclot performs tasks necessary or desirable to the usual
business of PASSI. However, it should be deemed part of the nature of his
work that he can only work as a stevedore in the absence of the employee
regularly employed for the very same function.
4. Boclot performed services from September 1999 until June 2003 for a period
of only 228.5 days in 36 months, or roughly an average of 6.34 days a month;
while a regular stevedore, on the other hand, renders service for an average of
16 days a month, demonstrates that respondents employment is subject to the
availability of work, depending on the absences of the regular stevedores.

26
 Boclot is also not prohibited to offer his services to other cargo handlers in the
other piers.
5. Periods have been imposed to preclude acquisition of tenurial security by an
employee, such imposition should be struck down or disregarded as contrary
to public policy and morals.
6. However, we take this occasion to emphasize that the law, while protecting
the rights of the employees, authorizes neither the oppression nor the
destruction of the employer. When the law tilts the scale of justice in favor of
labor, the scale should never be so tilted if the result would be an injustice to
the employer.
7. Thus, this Court cannot be compelled to declare Boclot as a regular employee
when by the nature of his work as a reliever stevedore and his accumulated
length of service of only eight months do not qualify him to be declared as
such under the provisions of the Labor Code alone.
8. NONETHELESS, the Supreme Court still finds Boclot to be a regular
employee on the basis of pertinent provisions under the CBA between PASSI
and its Workers union, which was effective from 4 March 1998 to 3 March
2003: “Company agrees to convert to regular status all incumbent
probationary or casual employees and workers in the Company who have
served the Company for an accumulated service term of employment of not
less than six (6) months from his original date of hiring.””
9. The union which negotiated the existing CBA is the sole and exclusive
bargaining representative of all the stevedores, dock workers, gang bosses,
rank and file employees working at Pier 8, and its offices.
10. Boclot assents that he is not a member of the union, as he was not recognized
by PASSI as its regular employee, but this Court notes that PASSI adopts a
union-shop agreement wherein non-members may be hired on the condition
that after a certain period employee shall be required to be a member to retain
employment. This requirement applies to the present and future employees.
The same article of the CBA stipulates that employment in PASSI cannot be
obtained without prior membership in the union.
11. Applying the foregoing provisions of the CBA, Boclot should be considered a
regular employee after six months of accumulated service. It is clearly
stipulated therein that PASSI shall agree to convert to regular status all
incumbent probationary or casual employees and workers who have served for
27
 an accumulated service term of employment of not less than six months from
the original date of hiring. Having rendered 228.5 days, or eight months of
service to PASSI since 1999, then Boclot is entitled to regularization by virtue
of the said CBA provisions

28
FVCLU-PTGWO vs SANAMA-FVC-SIGLO’
FACTS:
1. (UNION 1) is the recognized bargaining agent of the rank-and-file employees
of the (company) – signed a five-year collective bargaining agreement (CBA)
with the company. The five-year CBA period was from February 1, 1998 to
January 30, 2003.
2. At the end of the 3rd year of the five-year term and pursuant to the CBA,
Union 1 and the company entered into the renegotiation of the CBA and
modified, among other provisions, the CBA’s duration. It extended the
original five-year period of the CBA by four (4) months.
3. 9 days before the expiration of the originally-agreed five-year CBA term (and
four [4] months and nine [9] days away from the expiration of the amended
CBA period), (UNION 2) filed before DOLE a petition for certification
election for the same rank- and-file unit covered by Union 1.
4. Union 1 moved to dismiss the petition because itwas filed outside the freedom
period or outside of the 60 days before the expiration of the CBA.
5. Med Arbiter : filed outside the 60-day period counted from the expiry date of
the amended CBA.
6. DOLE Secretary (MR) : Amended CBA had been ratified by members of the
bargaining unit some of whom later organized themselves as Union 2, the
certification election applicant. Since these members fully accepted and in fact
received the benefits arising from the amendments, the Acting Secretary
rationalized that they also accepted the extended term of the CBA and cannot
now file a petition for certification election based on the original CBA
expiration date.
7. CA : while the parties may renegotiate the other provisions (economic and
non- economic) of the CBA, this should not affect the 5 year representation
aspect of the original CBA.
8. With this denial, Union 1 argues that in light of the peculiar attendant
circumstances of the case, the CA erred in its decision.
 the economic and other provisions of the CBA that it renegotiated with the
company. The renegotiated CBA changed the CBA’s remaining term,
extending it by 4 months.

29
 To Union 1, this extension of the CBA term also changed the union’s
exclusive bargaining representation status and effectively moved the
reckoning point of the 60-day freedom period.
 Union 1 moved to dismiss the petition for certification election filed 9 days
before the expiry date of the original CB by Union 2 on the ground that the
petition was filed outside the authorized 60-day freedom period. It also
submits in its petition that Union 2 is estopped from questioning the extension
of the CBA term under the amendments because its members are the very
same ones who approved the amendments.
9. Meanwhile, Union 2 manifested its abandonment of its challenge to the
exclusive bargaining representation status of Union 1. The SC granted the
request for relief and dispensed with the filing of a comment.
ISSUE:
WON the extended term of a CBA will carry with it the extension of
representation status of the collective bargaining agent? – No
1. The legal question before us centers on the effect of the amended or
extended term of the CBA on the exclusive representation status of the
collective bargaining agent and the right of another union to ask for
certification as exclusive bargaining agent.
2. The question arises because the law allows a challenge to the exclusive
representation status of a collective bargaining agent through the filing of a
certification election petition only within 60 days from the expiration of the
five-year CBA.
3. Article 253-A of the Labor Code covers this situation and it provides: Terms
of a collective bargaining agreement. – Any Collective Bargaining Agreement
that the parties may enter into, shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority
status of the incumbent bargaining agent shall be entertained and no
certification election shall be conducted by the Department of Labor and
Employment outside of the sixty day period immediately before the date of
expiry of such five-year term of the Collective Bargaining Agreement. All
other provisions of the Collective Bargaining Agreement shall be renegotiated
not later than three (3) years after its execution.
Any agreement on such other provisions of the Collective Bargaining
Agreement entered into within six (6) months from the date of expiry of the
30
 term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If any
such agreement is entered into beyond six months, the parties shall agree on
the duration of retroactivity thereof. In case of a deadlock in the renegotiation
of the collective bargaining agreement, the parties may exercise their rights
under this Code.
4. Union 1 is correct, but only with respect to the original five-year term of the
CBA which, by law, is also the effective period of the union’s exclusive
bargaining representation status.
5. While the parties may agree to extend the CBA’s original five-year term
together with all other CBA provisions, any such amendment or term in
excess of five years will not carry with it a change in the union’s exclusive
collective bargaining status.
6. By express provision Article 253-A, the exclusive bargaining status cannot go
beyond five years and the representation status is a legal matter not for the
workplace parties to agree upon.
7. In other words, despite an agreement for a CBA with a life of more than five
years, either as an original provision or by amendment, the bargaining union’s
exclusive bargaining status is effective only for five years and can be
challenged within sixty (60) days prior to the expiration of the CBA’s first
five years.
8. In the present case, the CBA was originally signed for a period of five
years, i.e., from February 1, 1998 to January 30, 2003, with a provision
for the renegotiation of the CBA’s other provisions at the end of the 3rd
year of the five- year CBA term. Thus, prior to January 30, 2001 the
workplace parties sat down for renegotiation but instead of confining
themselves to the economic and non-economic CBA provisions, also extended
the life of the CBA for another four months, i.e., from the original expiry date
on January 30, 2003 to May 30, 2003.
9. Union 1’s exclusive bargaining representation status which remained effective
only for five years ending on the original expiry date of January 30, 2003.
10. Thus, sixty days prior to this date, or starting December 2, 2002, Union 2
could properly file a petition for certification election. Its petition, filed on
January 21, 2003 or nine (9) days before the expiration of the CBA and of
Union 1’s exclusive bargaining status, was seasonably filed
31
11. If this ruling cannot now be given effect, the only reason is SANAMA-
SIGLO’s own desistance; we cannot disregard its manifestation that the
members of SANAMA themselves are no longer interested in contesting the
exclusive collective bargaining agent status of FVCLU-PTGWO. This
recognition is fully in accord with the Labor Code’s intent to foster industrial
peace and harmony in the workplace.

32
RFM Corp. v. KAMPI-NAFLU-KMU
FACTS:
1. Sometime in 2000, RFM’s Flour Division and SFI Feeds Division entered into
CBAs with their respective labor unions, the Kasapian ng Manggagawang
Pinagkaisa-RFM (KAMPI-NAFLU-KMU) for the Flour Division, and
Sandigan at Ugnayan ng Manggagawang Pinagkaisa-SFI (SUMAPI- NAFLU-
KMU) for the Feeds Division (respondents). The CBAs, which contained
similar provisions and effective for five years.
2. Sec. 3, Art. XVI of each of the CBAs reads:
Section. 3. Special Holidays with Pay. — The COMPANY agrees to make payment to all
daily paid employees, in respect of any of the days enumerated hereunto if declared as
special holidays by the national government:
a) Black Saturday
b) November 1
c) December 31
3. On the first year of the effectivity of the CBAs, December 31 which fell on a
Sunday was declared by the national government as a special holiday. Both
Unions thus claimed payment of their members' salaries, invoking the above-
stated CBA provision.
4. RFM refused the claims for payment, averring that December 31, 2000 was
not compensable as it was a rest day. The controversy resulted in a deadlock,
drawing the parties to submit the same for voluntary arbitration.
5. Voluntary Arbitrator sided with the Union declaring that the above-quoted
provision of the CBA is clear and ordered petitioner to pay the salaries of
Union members for December 31, 2000, and to pay attorney's fees.
6. The CA: If it was indeed RFM’s intent to pay the salaries of daily-paid
employees during a special holiday, even if unworked, only if such special
holiday fell on weekdays, then it should have been clearly and expressly
stipulated in the CBAs. Futher held inapplicable Kimberly Clark Philippines
v. Lorredo cited by RFM which case held that whenever there is a conflict
between the words in the CBA and the evident intention of the parties, the
latter prevails. The CA explained, there were no words or provisions in the
CBAs which would result in an absurd interpretation vis-a-vis the parties' true
intention.
7. RFM insists that the CBA provision in question was intended to protect the
employees from reduction of their take-home pay, hence, it was not meant to

33
 remunerate them on Sundays, which are rest days, nor to increase their
salaries.
ISSUE/s:
Whether or not special holiday pay should be paid even if it falls on a rest
day? YES

Special Holiday falls on a Rest Day

1. If the terms of a CBA are clear and have no doubt upon the intention of the
contracting parties, as in the herein questioned provision, the literal meaning
thereof shall prevail. That is settled. As such, the daily-paid employees must
be paid their regular salaries on the holidays which are so declared by the
national government, regardless of whether they fall on rest days.
2. Holiday pay is a legislated benefit enacted as part of the Constitutional
imperative that the State shall afford protection to labor. Its purpose is not
merely "to prevent diminution of the monthly income of the workers on
account of work interruptions. In other words, although the worker is forced
to take a rest, he earns what he should earn, that is, his holiday pay."
3. The CBA is the law between the parties, hence, they are obliged to comply
with its provisions.
4. RFM maintains, however, that the parties failed to foresee a situation where
the special holiday would fall on a rest day.
5. The Court is not persuaded. The Labor Code specifically enjoins that in case
of doubt in the interpretation of any law or provision affecting labor, it should
be interpreted in favor of labor.
6. Unions having been compelled to litigate as a result of petitioner's failure to
satisfy their valid claim, the Court deems it just and equitable to sustain the
award of attorney's fees.

34
Fulache v. ABS-CBN Broadcasting Corp.
FACTS
1. In June 2001, petitioners (Fulache et al.) and Cresente Atinen (Atinen) filed
two separate complaints for regularization, unfair labor practice and several
money claims against (ABS-CBN –Cebu ).
2. Fulache and Castillo were drivers/cameramen; Atinen, Lagunzad and
Jabonero were drivers; Ponce and Almendras were cameramen/editors; Bigno
was a PA/Teleprompter Operator-Editing, and Cabas was a VTR man/editor.
 Excluded from the CBA executed between Union and ABS-CBN because
ABS-CBN considered them temporary and not regular employees.
 Accordingly, they claimed that they had already rendered more than a year of
service in the company and, therefore, should have been recognized as regular
employees.
3. ABS-CBN explained the nature of the petitioners’ employment within the
framework of its operations;
 it claimed that its division—Regional Network Group (RNG)— is the one
exercising control and supervision over all the ABS- CBN local stations.
 Further, it alleged that the petitioners were contracted by its Cebu station as
independent contractors/off camera talents, and they were not entitlted to
regularization in these capacities.
4. LA held that petitioners were regular employees
5. While the appeal of the regularization case was pending, ABS-CBN dismissed
Fulache, Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal
to sign up contracts of employment with service contractor Able Services. The
four drivers and Atinen responded by filing a complaint for illegal dismissal.
6. In ABS-CBN’s defense:
 Even before LA decision in the regularization case, it had already undertaken
a comprehensive review of its existing organizational structure. I
 It then decided to course through legitimate service contractors all driving,
messengerial, janitorial, utility, make- up, wardrobe and security services for
both the Metro Manila and provincial stations, to improve its operations and
to make them more economically viable.
 Fulache et al were not singled out for dismissal; as drivers, they were
dismissed because they belonged to a job category that had already been
contracted out.
35
7. LA upheld the validity of ABS- CBN’s contracting out of certain work or
services in its operations. The LA found that Fulache et al. had been dismissed
due to redundancy
8. NLRC ruled that there was an employer-employee relationship between
Fulache et al. and ABS-CBN as the company exercised control over them in
the performance of their work;
9. NLRC reversed the LA’s ruling in the illegal dismissal case
10. CA ruled that Fulache et al. failed to prove their claim to CBA benefits since
they never raised the issue in the compulsory arbitration proceedings and did
not appeal the labor arbiter’s decision which was silent on their entitlement to
CBA benefits.
11. On the illegal dismissal case, the CA upheld the NLRC decision. Thus, the
drivers Fulache et al. were not illegally dismissed as their separation from
service was due to redundancu; they had not presented any evidence that
ABS- CBN abused its prerogative in contracting out the services of
12. On the question of their CBA coverage, the Fulache et al. contend that the CA
erred in not considering that ABS-CBN admitted their membership in the
bargaining unit, for nowhere in its partial appeal from the labor arbiters
decision in the regularization case did it allege that they failed to prove that
they are members of the bargaining unit; instead, the company stood by its
position that the Fulache et al. were not entitled to the CBA benefits since they
were independent contractors/program employees.
ISSUE/s: Whether Fulache et al. are entitled to the coverage of CBA Benefits.
–YES. Being regular employees of ABS-CBN, they are entitled to CBA
Benefits. (IMPORTANT)
1. As regular employees, the petitioners fall within the coverage of the
bargaining unit and are therefore entitled to CBA benefits as a matter of law
and contract.
2. The declaration of the Labor Arbiter that Fulache et al. were regular
employees unequivocally settled their employment status:
3. Under these terms of the CBA, Fulache et al. are members of the appropriate
bargaining unit because they are regular rank-and- file employees and do not
belong to any of the excluded categories. Specifically, nothing in the records
shows that they are supervisory or confidential employees; neither are they
casual nor probationary employees.
36
4. Thus, as regular rank-and-file employees, they fall within CBA coverage
under the CBA’s express terms and are entitled to its benefits.
5. We see no merit in ABS-CBNs arguments that the petitioners are not entitled
to CBA benefits because: (1) they did not claim these benefits in their position
paper; (2) the NLRC did not categorically rule that the petitioners were
members of the bargaining unit; and (3) there was no evidence of this
membership. To further clarify what we stated above, CBA coverage is not
only a question of fact, but of law and contract. The factual issue is whether
the petitioners are regular rank- and-file employees of ABS-CBN. The
tribunals below uniformly answered this question in the affirmative.
Whether Fulache et al. were illegally dismissed—YES. The termination of
employment of the 4 drivers occurred under highly questionable
circumstances and with plain and unaldurated bad faith.
1. In the course of this appeal, ABS-CBN took matters into its own hands and
terminated the petitioners’ services, clearly disregarding its own appeal then
pending with the NLRC.
2. Notably, this appeal posited that the petitioners were not employees (whose
services therefore could be terminated through dismissal under the Labor
Code); they were independent contractors whose services could be terminated
at will, subject only to the terms of their contracts. To justify the termination
of service, the company cited redundancy as its authorized cause but offered
no justificatory supporting evidence.
3. ABS-CBN’s intent, of course, based on the records, was to transfer the
petitioners and their activities to a service contractor without paying any
attention to the requirements of our labor laws; hence, ABS-CBN dismissed
the petitioners when they refused to sign up with the service contractor
4. It forgot that by claiming redundancy as authorized cause for dismissal, it
impliedly admitted that the petitioners were regular employees whose
services, by law, can only be terminated for the just and authorized causes
defined under the Labor Code.
5. Likewise, ABS-CBN forgot that it had an existing CBA with a union, which
agreement must be respected in any move affecting the security of tenure of
affected employees; otherwise, it ran the risk of committing unfair labor
practice both a criminal and an administrative offense. It similarly forgot that
an exercise of management prerogative can be valid only if it is undertaken in
37
 good faith and with no intent to defeat or circumvent the rights of its
employees under the laws or under valid agreements.
6. Lastly, it forgot that there was a standing labor arbiter’s decision that, while
not yet final because of its own pending appeal, cannot simply be disregarded.
By implementing the dismissal action at the time the labor arbiters ruling was
under review, the company unilaterally negated the effects of the labor
arbiter’s ruling while at the same time appealling the same ruling to the
NLRC. This unilateral move is a direct affront to the NLRCs authority and an
abuse of the appeal process.

EMPLOYEES UNION OF BAYER v. BAYER PHILIPPINES

FACTS:
1. (Union 1) is the exclusive bargaining agent of all the rank-and-file employees
of Bayer Philippines (Bayer) and is an affiliate of the Federation of Free
Workers (FFW). Union 1, headed by Facundo, negotiated with Bayer for the
signing of a CBA which resulted in a bargaining deadlock when Union 1
rejected Bayer’s 9.9% wage-increase proposal.
2. Pending the resolution of the dispute, Remigio and 27 other union members
(Remigio group which eventually formed a splinter union), without any
authority from their union leaders, accepted Bayer’s wage-increase proposal.
3. SOLE then issued an arbitral award ordering Union 1 and Bayer to execute a
CBA retroactive to January 1997 and to be made effective until December
2001. This CBA was registered in July 1998 with the Industrial Relations
Division of DOLE.
4. Barely six months from the signing of the new CBA, 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 (basically new union =
Union 2); (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 the new union to administer the CBA between
Union 1 and Bayer.
38
5. Group and Remigio Group both sought recognition from Bayer and
demanding remittance of the union dues collected from its rank-and-file
members.
6. Remigio’s group wrote Facundo, FFW, and Bayer informing them of the
decision of the majority of the union members to disaffiliate from FFW.
7. This was followed by another letter informing the same parties that an interim
set of Union 2 executive officers and board of directors had been appointed
and demanding the remittance of all union dues to Union 2.
8. Facundo Group of Union 1 also sent similar requests to Bayer for the
remittance of union dues in favor of Union 1 and accused the company of
interfering with purely union matters.
9. 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.
10. In a grievance conference, the two groups failed to settle their issues.
11. Union 1 lodge a complaint against Union 2 before the Industrial Relations
Division of DOLE praying for their expulsion from Union 1 for commission
of “acts that threaten the life of the union.”
12. LA: dismissed the first ULP complaint for lack of jurisdiction and explained
that the root cause for Bayer’s failure to remit the collected union dues can be
traced to the intra-union conflict between Union 1 and Remigio’s group and
that the charges imputed against Bayer should have been submitted instead to
voluntary arbitration.
13. Union 1 filed a second ULP complaint against Bayer for organizing a
company union, gross violation of the CBA, and violation of their duty to
bargain. They alleged that Bayer refused to remit the collected union dues to
Union 1 despite several demands sent to the management and that despite the
requests sent to Bayer for renegotiation of the last two years of the 1997-2001
CBA, Bayer opted to negotiate instead with Remigio’s group.
14. On the same date that the second ULP complaint was filed, Remigio’s group
and Bayer agreed to sign a new CBA.
15. Union 1 then filed an urgent motion for the issuance of a restraining
order/injunction before the NLRC and LA asserting their authority as the
exclusive bargaining representative of all rank-and-file employees of Bayer
and asked that a TRO be issued against Remigio’s group and Bayer to prevent
39
 the employees from ratifying the new CBA. They also alleged gross violation
of the CBA for violation of the contract bar rule following Bayer’s decision to
negotiate and sign a new CBA with Remigio’s group.
16. Union 1 argues that the subject matter of their complaint pertain to the unfair
labor practice act of Bayer in dealing with Remigio’s union. They allege that
the acts of abetting or assisting in the creation of another union is among those
considered as unfair labor practice; that the act of negotiating with such union
constitutes a violation of Bayer’s duty to collectively bargain and that Bayer’s
unjustified refusal to process Union 1’s grievances and to recognize the said
union as the sole and exclusive bargaining agent are tantamount to unfair
labor practice.
17. Bayer countered that there can be no unfair labor practice since the requisites
for unfair labor practice (i.e. that the violation of the CBA should be gross and
that it should involve a violation in the economic provisions of the CBA) were
not satisfied.
18. Bayer also argues that the case is already moot and academic following the
lapse of the 1997-2001 CBA and their renegotiation with Union 1 for the
2006-2007 CBA. They reason that Bayer’s act of negotiating with Union 1 for
the 2006-2007 CBA is an obvious recognition on their part that Union 1 is
now the certified collective bargaining agent of its rank-and-file employees.
ISSUE/s:
Whether the act of Bayer in dealing and negotiating with Remigio’s group
despite its validly existing CBA with Union 1 can be considered unfair labor
practice. YES.
1. A CBA is entered into in order to foster stability and mutual cooperation
between labor and capital. An employer should not be allowed to rescind
unilaterally its CBA with the duly certified bargaining agent it had previously
contracted with and decide to bargain anew with a different group if there is
no legitimate reason for doing so and without first following the proper
procedure.
2. If such behavior could be tolerated, bargaining and negotiations between the
employer and the union will never be truthful and meaningful, and no CBA
forged after arduous negotiations will ever be honored or relied upon. Article
253 of the Labor Code provides, in part, that where there is a collective
bargaining agreement, the duty to bargain collectively shall also mean
40
 that neither party shall terminate or modify such agreement during its
lifetime. x x x
3. This is the reason why it is axiomatic in labor relations that a CBA entered
into by a legitimate labor organization that has been duly certified as the
exclusive bargaining representative and the employer becomes the law
between them.
4. Additionally, in the Certificate of Registration issued by the DOLE, it is
specified that the registered CBA serves as the covenant between the parties
and has the force and effect of law between them during the period of its
duration. Compliance with the terms and conditions of the CBA is mandated
by express policy of the law primarily to afford protection to labor and to
promote industrial peace
5. Thus, when a valid and binding CBA had been entered into by the
workers and the employer, the latter is behooved to observe the terms
and conditions thereof bearing on union dues and representation. If the
employer grossly violates its CBA with the duly recognized union, the
former may be held administratively and criminally liable for unfair
labor practice.
6. In Silva v. NLRC, the Court explained that the allegations in the complaint
must show prima facie the concurrence of two things: (1) gross violation of
the CBA; and (2) the violation pertain to the economic provisions of the
CBA.
7. This pronouncement, however, should not be construed to apply to violations
of the CBA which can be considered as gross violations per se. 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.
8. Moreover, Bayer cannot claim good faith to justify their acts.
 They knew that Facundo’s group represented the duly-elected officers of
Union 1.
 They were also cognizant of the fact that even the SOLE himself had
recognized the legitimacy of Union 1’s mandate by rendering an arbitral
award ordering the signing of the 1997-2001 CBA between Bayer and
Union 1.
41
  Bayer was also well-aware of the pendency of the intra-union dispute
case, yet they still proceeded to turn over the collected
Whether the two ULP complaints was properly dismissed.
On the jurisdiction of the tribunals
1. An intra-union dispute refers to any conflict between and among union
members, including grievances arising from any violation of the rights and
conditions of membership, violation of or disagreement over any provision of
the union's constitution and by-laws, or disputes arising from chartering or
disaffiliation of the union. Sections 1 and 2, Rule XI of DO 40-03 series of
2003 of the DOLE enumerate the circumstances classified as inter/intra-union
disputes.
2. 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 Union 1.
As to Bayer, the question was whether they were liable for unfair labor
practice, which issue was within the jurisdiction of the NLRC. Thus, the
dismissal of the second ULP complaint was erroneous.
3. As to Remigio and her allies, the ULP complaint was validly dismissed since
the issue as against them essentially involves an intra- union dispute based on
Section 1(n)48 of DOLE DO 40-03. To rule on the validity or illegality of
their acts, the LA and the NLRC will necessarily touch on the issues
respecting the propriety of their disaffiliation and the legality of the
establishment of Union 2 – issues that are outside the scope of their
jurisdiction.
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers' association.
Whether the case is moot and academic given the fact that Bayer recognized
Union 1 as the exclusive bargaining agent in the negotiation of the 2006-2007
CBA. NO because the recognition did not obliterate the fact that the
management of Bayer had withdrawn its recognition of Union 1 and
supported Union 2 during the tumultuous implementation of the 1997-2001
CBA.
On whether the case is already moot and academic
1. A legitimate labor organization cannot be construed to have abandoned its
pending claim against the employer by returning to the negotiating table to
fulfill its duty to represent the interest of its members, except when the
42
 pending claim has been expressly waived or compromised in its subsequent
negotiations with the management.
2. Bayer’s recognition of Union 1 as the certified collective bargaining agent of
its rank-and-file employees for purposes of its 2006-2007 CBA negotiations
did not obliterate the fact that the management of Bayer had withdrawn its
recognition of Union 1 and supported Union 2 during the tumultuous
implementation of the 1997-2001 CBA. Such act of interference which is
violative of the existing CBA with Union 1 led to the filing of the subject
complaint.

43
GENERAL MILLING CORP. INDEPENDENT LABOR UNION v.
GENERAL MILLING
FACTS:
1. GMC and the Union entered into a CBA which provided, among other terms,
the latters representation of the collective bargaining unit for a three-year term
made to retroact to 1 December 1988.
2. One day before the expiration of the subject CBA, the Union sent a draft CBA
proposal to GMC, with a request for counter-proposals from the latter, for the
purpose of renegotiating the existing CBA between the parties.
3. GMC failed to comply with the request so the Union filed a complaint for
ULP which was dismissed for lack of merit by the Regional Arbitration
Branch-VII of the NLRC.
4. NLRC ruled against the Union
5. The decision of the NLRC ruling for the Union was again set aside by the
NLRC upon petition of GMC so the Union filed petitions for certiorari
6. CA then reversed the NLRC ruling and reinstated its ruling for the Union
which imposed upon GMC the draft proposal for the remaining 2 years of the
original CBA.
7. GMC then elevated the case to the SC via petition for review on certiorari, the
3nd Division of the SC affirmed the decision in favor of the Union and held
that GMC violated its duty to bargain collectively when it didn't comply with
the mandatory obligation to submit a reply to the Union’s proposals.
8. Since the decision in favor of the Union was about to become final, the Union
filed a motion for the issuance of a writ of execution to enforce the claims of
the covered employees and to require GMC to produce the time cards for the
purpose of computing their OT, Night Shift differential and etc.
9. GMC opposed the motion for execution on the ground that the bargaining unit
no longer exists in view of the resignation, retrenchment, retirement and
separation from service of workers who have additionally executed waivers
and quitclaims; that the covered employees have already received salary
increases and benefits to the period of the CBA; and that the decision simply
called for the execution of the CBA incorporating the Union’s proposal, not
the outright computation of benefits thereunder.

44
10. GMC further manifested that the Union membership in the bargaining unit did
not exceed 286 , given the fact that a number of employees should be
excluded from the Union.
11. Union argued that the benefits derived from its proposed CBA extended to
both union members and non-members; that the newly hired employees were
entitled to the benefits accruing after their employment by GMC; that the
employees who had, in the meantime, been separated from service could
not have validly waived the benefits which were only determined with finality
in the earlier ruling; that the CBA benefits can be extended the daily paid
employees upon their re- classification as monthly paid employees as well as
to GMCs managerial and supervisory employees, prior to their
promotion; and, that the imposition of its CBA proposals necessarily calls for
the computation of the benefits therein provided.
12. LA Ortiz-Bantug then issued an order limiting the computation of the benefits
of the Union’s CBA proposal, the computation covered the 436 employees
included in the Unions list, less the following: (a) 77 employees who were
hired or regularized after 30 November 1993; (b) 36 daily paid rank and file
employees who were covered by a separate CBA; (c) 41
managerial/supervisory employees; and (d) 1 employee for whom no salary-
rate information was submitted in the premises.
13. The NLRC affirmed the order of execution. It also upheld the LA’s
computation. GMC and the Union then both filed separate Rule 65 petitions
for certiorari before the CA.
14. Acknowledging the difficulty of computing the benefits demanded by the
Union in the absence of evidence upon which to base the same, the CA
referred the case to the Grievance Machinery under the imposed CBA and
directed the exclusion of the following items from said computation: (a) the
Unions claims for vacation leave salary rate differentials and sick leave salary
rate differentials; (b) the benefits in favor of the employees who have already
executed quitclaims in favor of GMC; and (c) the salary increases and other
employment benefits GMC had, in the meantime, extended its employees.
ISSUE/s:
What is the period of effectivity of the imposed CBA
1. Article XIV of the imposed CBA provides that (t)his Agreement shall be in
full force and effect for a period of five (5) years from 1 December 1991,
45
 provided that sixty (60) days prior to the lapse of the third year of effectivity
hereof, the parties shall open negotiations on economic aspect for the fourth
and fifth years effectivity of this Agreement.
2. Considering that no new CBA had been, in the meantime, agreed upon by
GMC and the Union, we find that the CA correctly ruled in that, pursuant to
Article 253 of the Labor Code, the provisions of the imposed CBA continues
to have full force and effect until a new CBA has been entered into by the
parties.
3. Article 253 mandates the parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement during the
60-day period prior to the expiration of the old CBA and/or until a new
agreement is reached by the parties.
4. In the same manner that it does not provide for any exception nor qualification
on which economic provisions of the existing agreement are to retain its force
and effect, the law does not distinguish between a CBA duly agreed upon by
the parties and an imposed CBA like the one under consideration.
5. The decision which ordered the imposition upon GMC of the Union’s draft
proposal stated that it is for the remaining 2 years duration of the original
CBA
6. So the Union can’t espouse a computation which extends the benefits of the
imposed CBA beyond the remaining 2 years of the original CBA. The order
of execution can’t exceed the judgment sought to be executed.
7. The computation of benefits under the imposed CBA should be limited to
covered employees who were in GMC’s employ during the said 2 years.
8. While it is true that the provisions of the imposed CBA extend beyond said
remaining two-year duration of the original CBA in view of the parties
admitted failure to conclude a new CBA, the corresponding computation of
the benefits accruing in favor of GMCs covered employees after the term of
the original CBA was correctly excluded in the decision imposing upon GMC
the draft proposal.
9. The computation of the same benefits beyond the 2 year period should instead
be threshed out by GMC and the Union in accordance with the Grievance
Procedure outlined in the CBA.
10. The 234 employees were union members whose employment with GMC
ceased as a consequence of death, termination due to redundancy/closure of
46
 plant/for cause, voluntary resignation, separation or dismissal from service as
well as retirement. These employees executed deeds of waiver, release and
quitclaim.
11. The waiver was all inclusive. There was not even a hint of a limitation of
coverage.

Who are the employees covered by the CBA— Computation of benefits

under the imposed CBA should be limited to covered employees who were in
GMC’s employ during the said 2 years.
What are the benefits to be excluded in the execution—(a) vacation leave salary
rate differentials; (b) sick leave salary rate differentials; (c) dislocation allowance;
(d) separation pay for voluntary resignation; and (e) separation pay salary rate
differentials.

47
MALAYAN EMPLOYEES v. MALAYAN INSURANCE
FACTS:
1. The Malayan Employees Association-FFW is the exclusive bargaining agent
of the rank and file employees of Malayan Insurance Company, Inc.
2. The CBA gives union officials union leaves with pay for a total of 90- man
days per year for the purpose of attending grievance meetings, labor-
management committee meetings, annual national labor management
conferences, labor education programs and seminars, and other union
activities.
3. The company added a rule which added prior approval by the department
head, on top of prior notice, before the members can avail of the leaves.
 When the rule was enforced, it was not objected to by the union and its
members.
4. However, when Mangalino filed union leave applications 2 years after the
rule’s implementation (2002-2004), his department head disapproved because
the department was undermanned at that time.
 , Mangalino proceeded to take the leave since he believed in good faith that he
had complied with existing company practice (prior notice) and with the
procedure in the CBA
 The company suspended him for a week for the first violation, then for a
month for the second violation.
5. The Voluntary Arbitrators (VA) adjudged the first suspension of Mangalino
as invalid, while the second was valid but illicit (ie., in favor of Mangalino).
6. CA ruled in favor of the company on the basis of the company’s prerogative
to prescribe reasonable rules to regulate the use of union leaves.
ISSUE/s:
Whether the suspension of Mangalino was valid. YES — it was a proper
exercise of management prerogative to make express what the CBA implied
(ie., the proper approval process for union member leaves).
Mode of appeal improper; filed out of time
1. While it is true that the union and its members have been granted union leave
privileges under the CBA, the grant cannot be considered separately from the
other provisions of the CBA.
2. There was a provision where the CBA reserved for the company the full and
complete authority in managing and running its business.
48
3. There is nothing in the union leave provision that removes from the company
the right to prescribe reasonable rules and regulations to govern the manner of
availing union leaves.
4. Precisely, prior notice is expressly required under the CBA so that the
company can appropriately respond to the request for leave
5. The rule requiring prior approval only made express what is implied from the
terms of the CBA.
6. The rule on its face is not unreasonable, oppressive, nor violative of CBA
terms.
7. Moreover, ample evidence exists in the records indicating the union’s
acquiescence to the rule.
 No letter from the union complaining about the unilateral change in policy
or any request for a meeting to discuss the same appears on record.
 Even Mangalino himself, in the past, had filed applications for union
leave with his department manager, and willingly complied with the
disapproval without protest of any kind.
 Hence, when Mangalino protested, the requirement for prior approval was
already in place and established, and could no longer be removed except
with the company’s consent or negotiation and express agreement under
future CBAs.
 , Mangalino had the clear obligation to comply with the management’s
disapproval of his requested leave while at the same time registering his
objection to the company’s regulation and action
 His going on leave despite approval rendered him open to the charge of
insubordination, separately from his absence without leave.
 The charge of insubordination, however, can no longer prosper given the
lapse of time that has transpired.

49
SANTUYO v. REMERCO GARMENTS
FACTS:
1. There was a serious industrial dispute between (Union) and (Company)
which led to a strike staged by the Union.
2. The strike was subsequently declared illegal and all union officers were
dismissed.
3. Some employees resigned from the company while others, who chose to stay
with the company, were recalled to work on the condition that they would no
longer be paid a daily rate but on a piece-rate basis.
4. Months after the first strike, the Union filed a notice of strike in (NCMB)
based on the following grounds:
 The company conducted a time and motion study and changed the salary
scheme from a daily rate to piece-rate basis without consulting it.
 The company did not only violate the existing collective bargaining
agreement (CBA) but also diminished the salaries agreed upon. It therefore
committed an unfair labor practice.
5. The Company and Union underwent conciliation and during this period,
Company transferred its factory site
6. This transfer caused the union to stage a strike and blocked the entry to the
Company.
7. SOLE ordered RGMI’s striking workers to return to work immediately. He
likewise ordered the union and RGMI to submit their respective position
papers.
 In its position paper, the Union asked for the reinstatement of all employees to
their former positions at the old worksite and payment of their unpaid salaries
based on the daily rate (as provided in the CBA). Furthermore, the union
enumerated the company’s alleged unfair labor practices:
 The Company not only changed its salary scheme but also refused to pay
wages to its employees for three weeks and transferred the plant to a new site.
8. Company prayed that the strike be declared illegal and all union officers and
those employees who refused to return to work be dismissed from the
Company.
9. Another conciliation proceeding were conducted, however, this time around,
Santuyo et. Al(petitioner’s in this case) filed a complaint for illegal dismissal.

50
10. LA found that respondents did not pay petitioners their salaries and deprived
them of the benefits they were entitled to under the CBA.
11. NLRC denied appeal.
12. CA:In favor of the Company on the ground that the labor arbiter had no
jurisdiction over the complaint.
ISSUE/s:
WoN the Labor Arbiter had jurisdiction over the case. NO — the subject
matter of the dispute is governed by the existing CBA, such should have been
resolved by the grievance machinery or by the voluntary arbitrators.
1. The controversy was not a simple case of illegal dismissal but a labor dispute
involving the manner of ascertaining employees salaries, a matter which was
governed by the existing CBA.
2. Under Article 217(c)49 of the Labor Code, labor arbiters should refer cases
involving the implementation of CBAs to the grievance machinery provided
in the CBA and to voluntary arbitration
3. The first step, under Article 260 of the Labor Code, is to refer the dispute to
the grievance machinery, and if unresolved, Article 261 mandates that the
dispute shall automatically be referred to voluntary arbitration.
4. Voluntary arbitrators have original and exclusive jurisdiction over matters
which have not been resolved by the grievance machinery.
5. The labor arbiter should have referred the matter to the grievance machinery
provided in the CBA. Because the labor arbiter clearly did not have
jurisdiction over the subject matter, his decision was void.

The Intervention of the SOLE

*this was not an issue in the case, but the court discussed it because the SOLE’s
(prior) decision was binding between the parties despite the lack of jurisdiction of
the labor arbiter (in the latter case).
1. Article 263(g) of the Labor Code gives the Secretary of Labor discretion to
assume jurisdiction over a labor dispute likely to cause a strike or a lockout in
an industry indispensable to the national interest and to decide the controversy
or to refer the same to the NLRC for compulsory arbitration.
2. The SOLE’s power is plenary and discretionary in nature to enable him to
effectively and efficiently dispose of the issue

51
3. In this case, the SOLE assumed jurisdiction over the controversy because the
Company was a major exporter of garments to the United States and
Canada.Since neither the Union nor the Company appealed the SOLE’s order,
it became final and executory. Therefore, the Union was barred from filing
another case under the principle of conclusiveness of judgements.

52
INSULAR HOTEL EMPLOYEES UNION v. WATERFRONT INSULAR
HOTEL
Characters:
Employee – Waterfront Insular Hotel Davao (Waterfront Hotel)
Recognized Labor Organization - Davao Insular Hotel Free Employees Union (Union 1)
Another union with NFL in its name- Insular Hotel Employees Union-NFL (Union 2)
FACTS:
1. WATERFRONT HOTEL sent the (DOLE), Region XI, a Notice of
Suspension of Operations, notifying the same that it will suspend its
operations for a period of six months due to severe and serious business
losses.
2. During the period of the suspension, Rojas , the President of (UNION 1), the
recognized labor organization in Waterfront Davao, sent Waterfront a number
of letters asking management to reconsider its decision.
3. November 8, 2000 – Rojas wrote in a letter that the members of Union 1 were
determined to keep their jobs and that they believed they too had to help
Waterfront Hotel.
4. November 20, 2000, - In another letter, Rojas sent Waterfront Hotel more
proposals as a form of Union 1’s gesture of their intention to help the
company.
5. It is understood that with the suspension of the CBA renegotiations, the same
existing CBA shall be adopted and that all provisions therein shall remain
enforced, except for those mentioned in this proposal.
6. These proposals shall automatically supersede the affected provisions of the
CBA.
7. November 25, 2000, - In a handwritten letter, Rojas once again appealed to
Waterfront Hotel for it to consider their proposals and to re-open the hotel.
 Rojas stated that manpower for fixed manning shall be one hundred (100)
rank-and-file Union members instead of the one hundred forty-five (145)
originally proposed.
8. Finally, sometime in January 2001, UNION 1 through Rojas, submitted to
Waterfront Hotel a Manifesto concretizing their earlier proposals.
9. After series of negotiations, parties signed a (MOA) wherein Waterfront Hotel
agreed to re-open the hotel subject to certain concessions offered by UNION 1
in its Manifesto.

53
10. Accordingly, Waterfront Hotel downsized its manpower structure to 100 rank-
and-file employee and a new pay scale was also prepared by Waterfront Hotel
as set forth in the terms of the MOA.
11. The retained employees individually signed a "Reconfirmation of
Employment" which embodied the new terms and conditions of their
continued employment. Each employee was assisted by Rojas who also signed
the document.
12. August 22, 2002 – (Joves) and Planas, claiming to be local officers of the
(NFL), filed a Notice of Mediation before the National Conciliation and
Mediation Board (NCMB), Region XI, the issue raised in said Notice was the
"Diminution of wages and other benefits through unlawful Memorandum of
Agreement."
13. In the said conference in NCMB, (UNION 2), represented by Joves, signed a
Submission Agreement wherein they chose Accredited Voluntary Arbitrator
Alfredo C. Olvida (AVA Olvida) to act as voluntary arbitrator.
14. Joves, assisted by Atty. Danilo Cullo (Cullo), presented several Special
Powers of Attorney (SPA) which were, however, undated and unnotarized.
15. September 16, 2002 – a second preliminary conference was conducted in the
NCMB, where Cullo denied any existence of an intra-union dispute among
the members of the union.
16. When asked to present his authority from NFL, Cullo admitted that the case
was, in fact, filed by individual employees named in the SPAs.
17. The hearing officer directed both parties to elevate the aforementioned issues
to AVA Olvida.
18. Waterfront Hotel again raised its objections; specifically arguing that the
persons who signed the complaint were not the authorized representatives of
UNION 1 indicated in the Submission Agreement nor were they parties to the
MOA.
19. AVA Olvida directed Waterfront Hotel to file a formal motion to withdraw its
submission to voluntary arbitration.
ISSUE/s:
Who may file a notice or declare a strike or lockout or request preventive
mediation? –
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive
mediation, to wit:Who may file a notice or declare a strike or lockout or request preventive
mediation. — Any certified or duly recognized bargaining representative may file a notice or declare
54
a strike or request for preventive mediation in cases of bargaining deadlocks and unfair labor
practices. The employer may file a notice or declare a lockout or request for preventive mediation in
the same cases. In the absence of a certified or duly recognized bargaining representative, any
legitimate labor organization in the establishment may file a notice, request preventive mediation or
declare a strike, but only on grounds of unfair labor practice.
1. From the foregoing, it is clear that only a certified or duly recognized
bargaining agent may file a notice or request for preventive mediation.
2. It is curious that even Cullo himself admitted, in a number of pleadings, that
the case was filed not by the Union but by individual members thereof.
3. Clearly, therefore, the NCMB had no jurisdiction to entertain the notice filed
before it.
WoN the NCMB and Voluntary Arbitrators had jurisdiction over the
complaint? – NO.
4. Even though Waterfront Hotel signed a Submission Agreement, it had,
however, immediately manifested its desire to withdraw from the proceedings
after it became apparent that the UNION1 had no part in the complaint
5. As a matter of fact, only four days had lapsed after the signing of the
Submission Agreement when Waterfront Hotel called the attention of AVA
Olvida in a "Manifestation with Motion for a Second Preliminary Conference"
that the persons who filed the instant complaint in the name of UNION 2 had
no authority to represent the Union.
6. UNION 2’s thesis that unsettled grievances should be referred to voluntary
arbitration as called for in the CBA, the same does not lie.
1. The pertinent portion of the CBA reads:
a) “In case of any dispute arising from the interpretation or implementation of this
Agreement or any matter affecting the relations of Labor and Management, the
UNION and the COMPANY agree to exhaust all possibilities of conciliation through
the grievance machinery.
b) The committee shall resolve all problems submitted to it within fifteen (15) days after
the problems have been discussed by the members.
c) If the dispute or grievance cannot be settled by the Committee, or if the committee
failed to act on the matter within the period of fifteen (15) days herein stipulated, the
UNION and the COMPANY agree to submit the issue to Voluntary Arbitration.
d) xxx If the Company and the Union representatives within ten 10) days fail to agree on
the Arbitrator, the NCMB shall name the Arbitrator. The decision of the Arbitrator
shall be final and binding upon the parties.

55
e) However, the Arbitrator shall not have the authority to change any provisions of the
Agreement. The cost of arbitration shall be borne equally by the parties.”
WoN the individual members of the Union have the requisite standing to
question the MOA before the NCMB? – NO, individual members Joves et al
have not, however, been duly authorized to represent UNION 1.
No authority to represent and file
1. Joves et al have not, however, been duly authorized to represent UNION 1.
2. “Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name
or designate their respective representatives to the grievance machinery and if
the grievance is unsettled in that level, it shall automatically be referred to the
voluntary arbitrators designated in advance by parties to a CBA.
3. Consequently, only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.
WoN the federation UNION 1 and 2 is affiliated to has the authority to file
the case? - NO. As provided under Section 3, Rule IV NCMB Manual of
Procedures, only a certified or duly recognized bargaining representative and an
employer may file a notice of mediation, declare a strike or lockout or request
preventive mediation. Moreover, the CBA recognizes that UNION 1 is the
exclusive bargaining representative of all permanent employees.
Federation has no authority to file the case
1. A local union does not owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary association owing its creation
to the will of its members.
2. Mere affiliation does not divest the local union of its own personality, neither
does it give the mother federation the license to act independently of the local
union.
3. It only gives rise to a contract of agency, where the former acts in
representation of the latter.
4. Hence, local unions are considered principals while the federation is deemed
to be merely their agent.”
5. NFL had no authority to file the complaint in behalf of the individual
employees.
6. “The voluntary arbitrator had no jurisdiction over the case. Waterfront
contends that the Notice of Mediation does not mention the name of the Union

56
 but merely referred to the National Federation of Labor (NFL) with which the
Union is affiliated.
7. In the subsequent pleadings, NFL's legal counsel even confirmed that the case
was not filed by the union but by NFL and the individual employees named in
the SPAs, which were not even dated nor notarized.
8. Even granting that UNION 2 was affiliated with NFL, still the relationship
between that of the local union and the labor federation or national union with
which the former was affiliated is generally understood to be that of agency,
where the local is the principal and the federation the agency.
9. Being merely an agent of the local union, NFL should have presented its
authority to file the Notice of Mediation.
10. While we commend NFL's zealousness in protecting the rights of lowly
workers, we cannot, however, allow it to go beyond what it is empowered to
do.”
11. As provided under the NCMB Manual of Procedures, only a certified or duly
recognized bargaining representative and an employer may file a notice of
mediation, declare a strike or lockout or request preventive mediation.
12. (CBA), on the other, recognizes that UNION 1 is the exclusive bargaining
representative of all permanent employees
13. The inclusion of the word "NFL" after the name of the local union merely
stresses that the local union is NFL's affiliate.
14. It does not, however, mean that the local union cannot stand on its own. The
local union owes its creation and continued existence to the will of its
members and not to the federation to which it belongs. The spring cannot rise
higher than its source, so to speak.
WoN Waterfront Hotel was really not suffering from serious losses as ruled
by the CA? – NO. Waterfront Hotel’s audited financial statements still continues
to suffer losses.
WoN Article 100 of the Labor Code applies only to benefits already enjoyed
at the time of the promulgation of the Labor Code? – NO, it applies to benefits
already enjoyed and benefits to be enjoyed even after the promulgation of the
Labor Code.
WoN the non-ratification of the MOA is fatal to its validty? – NO, the signing
of the individual "Reconfirmation of Employment" should be deemed an implied
ratification by the Union members of the MOA.
57
Does the non-ratification of the MOA in accordance with the Union's constitution
prove fatal to the validity?
1. It must be remembered that after the MOA was signed, the members of the
Union individually signed contracts denominated as "Reconfirmation of
Employment."
2. Cullo did not dispute the fact that of the 87 members of the Union, who
signed and accepted the "Reconfirmation of Employment," 71 are the
respondent employees in the case at bar.
3. Moreover, it bears to stress that all the employees were assisted by Rojas,
UNION 1’s president, who even co-signed each contract.
4. Stipulated in each Reconfirmation of Employment were the new salary and
benefits scheme.
5. In addition, it bears to stress that specific provisions of the new contract also
made reference to the MOA.
6. Thus, the individual members of the union cannot feign knowledge of the
execution of the MOA.
7. Each contract was freely entered into and there is no indication that the same
was attended by fraud, misrepresentation or duress.
8. While the terms of the MOA undoubtedly reduced the salaries and
certain benefits previously enjoyed by the members of the Union, it
cannot escape this Court's attention that it was the execution of the MOA,
which paved the way for the re-opening of the hotel, notwithstanding its
financial distress.
9. More importantly, the execution of the MOA allowed the employees to keep
their jobs. It would certainly be iniquitous for the members of the Union to
sign new contracts prompting the re-opening of the hotel only to later on
renege on their agreement on the fact of the non-ratification of the MOA.

58
CIRTEK EMPLOYEES LABOR UNION-FFW v. CIRTEK
ELECTRONICS, INC
FACTS:
1. (UNION) entered into a five- year CBA with (EMPLOYER). On the third
year of the CBA, UNION sought to renegotiate the economic provisions but
failed to reach a settlement. UNION declared a bargaining deadlock and filed
a Notice of Strike, while EMPLOYER filed a Notice of Lockout.
2. While conciliation proceedings were ongoing, EMPLOYER suspended
several union officers. UNION filed another Notice of Strike which was
converted to arbitration proceedings. Since no amicable settlement was
forthcoming on the CBA, UNION went on strike.
3. The Secretary of Labor and Employment (SOLE), however, issued a Return to
Work Order which was complied with.
4. EMPLOYER created a Labor Management Council which facilitated the
conclusion of a Memorandum of Agreement providing for daily wage
increases on P6.00 effective Jan. 2004, and P10.00 effective Jan. 2005.
5. The MOA was signed under EMPLOYER’s assurance that it would respect a
higher award from the SOLE should one be granted.
6. SOLE resolved the CBA deadlock by granting P9.00 and P15.00 daily
wage increases for Jan. 2004 and Jan. 2005, respectively. EMPLOYER
moved for reconsideration, presenting a Muling Pagpapatibay ng
Pagsang-ayon sa Kasunduan. SOLE denied the MR.
7. The CA ruled in favor of the employer : the minutes of the meeting and the
Plaiwanag submitted by UNION in relation to the MOA did not comply with
the requirements of law for documentary evidence and were treated as parol
evidence. Hence, this petition.
ISSUE/s:
Whether the SOLE is authorized to give an award higher than that agreed
upon in the MOA. YES —
Authority of SOLE
1. The SOLE, in the exercise of his power to assume jurisdiction under Art. 263
(g) of the Labor Code, may resolve all issues involved in the controversy
including the award of wage increases and benefits. While an arbitral award
cannot per se be categorized as an agreement voluntarily entered into by the
parties because it requires the intervention and imposing power of the State
59
 thru the SOLE when he assumes jurisdiction, the arbitral award can be
considered an approximation of a collective bargaining agreement which
would otherwise have been entered into by the parties, hence, it has the force
and effect of a valid contract obligation.
2. The filing and submission of the MOA did not have the effect of divesting the
SOLE of his jurisdiction, or of automatically disposing the controversy, then
neither should the provisions of the MOA restrict the Secretary's leeway in
deciding the matters before him.

Whether the documents evidencing the assurance made by EMPLOYER that

it will respect a higher award by the SOLE should have been admitted. YES
—
1. In labor cases pending before the Commission or the Labor Arbiter, the rules
of evidence prevailing in courts of law or equity are not controlling. Rules of
procedure and evidence are not applied in a very rigid and technical sense in
labor cases.
2. Hence, the Labor Arbiter is not precluded from accepting and evaluating
evidence other than, and even contrary to, what is stated in the CBA.
3. While the terms and conditions of a CBA constitute the law between the
parties, it is not, however, an ordinary contract to which is applied the
principles of law governing ordinary contracts.
4. A CBA, as a labor contract within the contemplation of Article 1700 of the
Civil Code of the Philippines which governs the relations between labor and
capital, is not merely contractual in nature but impressed with public interest,
thus, it must yield to the common good.
5. As such, it must be construed liberally rather than narrowly and technically,
and the courts must place a practical and realistic construction upon it, giving
due consideration to the context in which it is negotiated and purpose which it
is intended to serve.
(QUESTION: In the case of Top Form: SC ruled that the Union should have demanded that the
promise or undertaking be made in writing/incorporated in the CBA)

60
Eastern Telecoms v. Eastern Telecoms Employees Union
FACTS:
1. Respondent Union has an existing CBA with the company to expire in the
year 2004 with a Side Agreement signed on 2001.
2. The Side agreement of the CBA provides: "4. Employment Related Bonuses.
The Company confirms that the 14th, 15th and 16th month bonuses (other
than 13th month pay) are granted."
3. The Company decided to defer payment of the 2003 14th, 15th and 16th
month bonuses sometime in April 2004 and such payment would also be
subject to availability of funds.
4. Union opposed the deferment of payment of the bonuses by filing a
preventive mediation complaint with the (NCMB), the purpose of which
complaint is to determine the date when the bonus should be paid.
5. However, the company made a sudden turnaround in its position by declaring
that they will no longer pay the bonuses until the issue is resolved through
compulsory arbitration. It was due to the union’s filing of the issue to the
NCMB.
6. Union filed a Notice of Strike on the ground of ULP for failure of company to
pay the bonuses in gross violation of the economic provision of the existing
CBA. The dispute was submitted to compulsory arbitration
7. In its position paper, union contends that:
a) Company had consistently and voluntarily been giving out 14th month
bonus during the month of April, and 15th and 16th month bonuses every
December of each year (subject bonuses) to its employees from 1975 to
2002, even when it did not realize any net profits,
b) By reason of its long and regular concession, the payment of these monetary
benefits had ripened into a company practice which could no longer
be unilaterally withdrawn,
c) This long-standing company practice had been expressly confirmed in the
Side Agreements of the 1998-2001 and 2001-2004 CBA which provided for
the continuous grant of these bonuses in no uncertain terms.
8. On the other hand, the company posited that:
a) The subject bonuses were not part of the legally demandable wage and the
grant thereof to its employees was an act of pure gratuity and generosity

61
 on its part, involving the exercise of management prerogative and always
dependent on the financial performance and realization of profits,
b) It resorted to the discontinuance of payment of the bonuses due to the
unabated huge losses that the company had continuously experienced,
c) It had been suffering serious business losses since 2000 and to require the
company to pay the subject bonuses during its dire financial straits would
in effect penalize it for its past generosity,
d) The bonus provision in the 2001-2004 CBA Side Agreement was a mere
affirmation that the distribution of bonuses was discretionary to the
company, premised and conditioned on the success of the business and
availability of cash, and
e) The bonus provision partook of the nature of a "one-time" grant
9. NLRC ruling that the payment of these benefits was a management
prerogative,
10. CA declared that the Side Agreements of the 1998 and 2001 CBA created a
contractual obligation on the company to confer the subject bonuses to its
employees without qualification or condition. It also found that the grant of
said bonuses has already ripened into a company practice and their denial
would amount to diminution of the employees’ benefits.
ISSUE/s:
Whether the company is liable to pay 14th, 15th and 16th month bonuses for
the year 2003 and 14th month bonus for the year 2004 to the members of
respondent union? YES
RULING:
1. The grant of a bonus is basically a management prerogative which cannot be
forced upon the employer who may not be obliged to assume the onerous
burden of granting bonuses or other benefits aside from the employee’s basic
salaries or wages. A bonus, however, becomes a demandable or enforceable
obligation when it is made part of the wage or salary or compensation of the
employee.
2. Company and the Union agreed on the inclusion of a provision for the grant of
14th, 15th and 16th month bonuses in the 1998-2001 CBA Side Agreement,
as well as in the 2001-2004 CBA Side Agreement.
3. The side agreement provides for the giving of 14th, 15th and 16th month
bonuses without qualification. There were no conditions specified in the CBA
62
 Side Agreements for the grant of the benefits. The payment of these bonuses
was not related to the profitability of business operations.
4. By virtue of the bonuses’ incorporation in the CBA Side Agreements, the
grant of 14th, 15th and 16th month bonuses has become more than just an act
of generosity on the part of the company but contractual obligation it has
undertaken.’
5. In the absence of any proof that company’s consent was vitiated by fraud,
mistake or duress, it is presumed that it entered into the Side Agreements
voluntarily, that it had full knowledge of the contents thereof and that it was
aware of its commitment under the contract
6. Notwithstanding such huge losses, company entered into the 2001-2004 CBA
Side Agreement whereby it contracted to grant the subject bonuses to the
union in no uncertain terms.
7. Nowhere in the Side Agreement does it say that the subject bonuses shall be
conferred once during the year the Side Agreement was signed. The bonus
provision in question is exactly the same as that contained in the Side
Agreement of the 1998-2001 CBA and there is no denying that from 1998 to
2001, company granted the subject bonuses for each of those years.
8. Company invokes Art. 126750 to be released from its contractual liability.
Court held that the company appears to be well aware of its deteriorating
financial condition when it entered into the 2001-2004 CBA Side Agreement
with the union and obliged itself to pay bonuses to the members of the union.
9. Considering that the company had been continuously suffering huge losses
from 2000 to 2002, its business losses in the year 2003 were not exactly
unforeseen or unexpected.
10. Granting arguendo that the CBA Side Agreement does not contractually bind
the company to give the subject bonuses, the act of granting the same has
become an established company practice such that it has virtually become part
of the employees’ salary or wage.
11. To be considered a "regular practice," however, the giving of the bonus should
have been done over a long period of time, and must be shown to have been
consistent and deliberate.
12. Records show that Company, aside from complying with the regular 13th
month bonus, has been further giving its employees 14th month bonus every
April as well as 15th and 16th month bonuses every December of the year,
63
 without fail, from 1975 to 2002 or for 27 years whether it earned profits or
not. The considerable length of time of giving the special grants to its
employees indicates a unilateral and voluntary act on its part to continue
giving said benefits knowing that such act was not required by law.
13. Article 1267. When the service has become so difficult as to be manifestly
beyond the contemplation of the parties, the obligor may also be released
therefrom, in whole or in part.
14. The giving of the subject bonuses cannot be peremptorily withdrawn by the
company without violating Article 10051 of the Labor Code. The rule is
settled that any benefit and supplement being enjoyed by the employees
cannot be reduced, diminished, discontinued or eliminated by the employer.

64
PNCC Skyway Traffic Management & Security Division Workers
Organization v. PNCC Skyway Corp
FACTS:
1. In 2002, PNCC Union and PNCC entered into a CBA incorporating the terms
and conditions of their agreement which included vacation leave and
expenses for security license provisions.
2. Among the terms provided for in the vacation leave is, “The company shall
schedule the vacation leave of employees during the year taking into
consideration the request of preference of the employees.” As for security
license, it is provided that, “All expenses of security guard in securing/renewing their
licenses shall be for their personal account. Guards, securing/renewing their license must apply
for a leave of absence and/or a change of schedule. Any guard who fails to renew his security
guard license should be placed on forced leave until such time that he can present a renewed
security license.”
3. In a memorandum, it is provided that the 17 days of scheduled vacation
leave (SVL) with pay has been published and that employees may swap their
SVL with others on a one-on-one basis by submitting a request at least 30
days before the actual schedule of the SVL duly assigned. Afterwhich, the
request will be evaluated and considered.
4. PNCC Union objected, insisting individual members of the union have the
right to schedule their vacation leave. It opined that the unilateral scheduling
of the employees' vacation leave was done to avoid the monetization of their
vacation leave in December.
5. PNCC Union also demanded that the expenses for the required in- service
training of its member security guards, as a requirement for the renewal of
their license, be shouldered by the PNCC.
6. However, PNCC did not accede to petitioner's demands and stood firm on its
decision to schedule all the vacation leave of petitioner's members.
7. PNCC Union elevated the matter to the DOLE-NCMB for preventive
mediation. Parties failed to settle the issue amicably, and have agreed to
submit the issue before the voluntary arbitrator.
8. The arbitrator declared that (1) the scheduling of all vacation leaves shall be
under the discretion of the union members entitled thereto, and that the
management shall convert into cash all the leaves which the management
compelled them to use; (2) to pay the expenses related to renewal of licenses,

65
 as these shall not be charged to the employees’ personal account but that of
the company’s.
9. CA- against UNION. CBA is clear.
ISSUE/s:
[MAIN] Whether the union members have the preference in
scheduling their vacation leave. NO — Intention of the parties must be
gathered from that language, and from that language alone.
1. The intention of the parties must be gathered from that language, and from
that language alone.
2. The contested provision of the CBA is clear and unequivocal. The CBA
categorically provides that the scheduling of vacation leave shall be under
the option of the employer.
3. The preference requested by the employees is not controlling because
respondent retains its power and prerogative to consider or to ignore said
request. The terms of the CBA are clear, and leave no doubt upon the
intention of the contracting parties, thus the literal meaning of its stipulation
shall prevail.
4. In fine, the CBA must be strictly adhered to and respected, being the law
between the parties. There is no basis for the Voluntary Arbitrator to interpret
the subject provision relating to the schedule of vacation leaves as being
subject to the discretion of the union members. There is simply nothing in the
CBA which grants the union members this right.
5. Since the grant of vacation leave is a prerogative of the employer, the latter
can compel its employees to exhaust all their vacation leave credits. Of
course, any vacation leave credits left unscheduled by the employer, or any
scheduled vacation leave that was not enjoyed by the employee upon the
employer's directive, due to exigencies of the service, must be converted to
cash, as provided in the CBA.
6. However, it is incorrect to award payment of the cash equivalent of vacation
leaves that were already used and enjoyed by the employees.
7. The vacation leave privilege was not intended to serve as additional salary,
but as a non-monetary benefit.
Whether the expenses related to securing/renewing security license should be
shouldered by the employees. NO –

66
1. Although it is a rule that a contract freely entered into between the parties
should be respected, since a contract is the law between the parties, there are,
however, certain exceptions to the rule, namely those contrary to law, morals,
good customs, public order, or public policy.
2. The CBA provides that, “All expenses of security guards in securing
/renewing their licenses shall be for their personal account.” A reading of the
provision would reveal that it encompasses all possible expenses a security
guard would pay or incur in order to secure or renew his license.
3. However, the 1994 Private Security Agency Law) provides that it is the
primary responsibility of operators of company security forces to maintain
and upgrade the standards of efficiency, discipline, performance and
competence of their personnel. It follows then that the expenses to be incurred
therein shall be for the personal account of the company.

67
SUPREME STEEL v. NAGKAKAISANG MANGGAGAWA NG SUPREME

Facts:
1. Supreme Steel Pipe Corporation (Supreme) is a domestic corporation engaged
in the business of manufacturing steel pipes for domestic and foreign markets.
2. (Union) is the certified bargaining agent of Supreme’s rank-and-file
employees. The CBA in question was executed by the parties to cover the
period from June 1, 2003 to May 31, 2008.
3. Union filed a notice of strike with the (NCMB) on the ground that Supreme
violated certain provisions of the CBA. The parties failed to settle their
dispute.
4. Consequently, the Secretary of Labor certified the case to the NLRC for
compulsory arbitration pursuant to Article 263(g) of the Labor Code.
5. Union alleged eleven CBA violations, delineated as follows:
A. Denial to four employees of the CBA- provided wage increase
 Union alleged that Supreme has repeatedly denied the annual CBA increases
to at least four individuals: Juan Niño, Reynaldo Acosta, Rommel Talavera,
and Eddie Dalagon.
 According to Union, Supreme gives an anniversary increase to its employees
upon reaching their first year of employment. The four employees received
their respective anniversary increases and Supreme used such anniversary
increase to justify the denial of their CBA increase for the year.
B. Contracting-out labor
 Union claimed that, contrary to this provision, Supreme hired temporary
workers for five months based on uniformly worded employment contracts,
renewable for five months, and assigned them to almost all of the departments
in the company.
 under the CBA, temporary workers are allowed only in the Warehouse and
Packing Section; consequently, employment of contractual employees outside
this section, whether direct or agency-hired, was absolutely prohibited.
 Worse, Supreme never regularized them even if the position they occupied
and the services they performed were necessary and desirable to its business.
Upon the expiration of their contracts, these workers would be replaced with
other workers with the same employment status. This scheme is a clear
circumvention of the laws on regular employment.
68
C. Failure to provide shuttle service
 Union claimed that the company vehicle which would be used as shuttle
service for its employees has not been reconditioned by Supreme since the
signing of the CBA on February 26, 2004.
 Supreme explained that it is difficult to implement this provision and simply
denied that it has reneged on its obligation.
D. Refusal to answer for the medical expenses incurred by three employees
 Union asserted that Supreme is liable for the expenses incurred by three
employees who were injured while in the company premises. This liability
allegedly stems from Article VIII, Section 4 of the CBA which provides:
E. Failure to comply with the time-off with pay provision
 Union contended that under the said provision, Supreme was obliged to grant
a paid time-off to Union’s duly authorized representative or to any employee
who was on duty, when summoned by Union to testify or when the
employee’s presence was necessary in the grievance hearings, meetings, or
investigations.
F. Visitors’ free access to company premises
 Union charged Supreme with violation of Article II, Section 7 of the CBA
which provides:
b. Section 7. Free Access to Company Premises. Local Union and Federation
officers (subject to company’s security measure) shall be allowed during working hours to
enter the COMPANY premises for the following reasons:
1. To investigate grievances that have arisen;
2. To interview Union Officers, Stewards and members during reasonable hours;
and
3. To attend to any meeting called by the Management or the UNION.
G. Failure to comply with reporting time-off provision
 Union averred that Supreme paid the employees’ salaries for one hour only of
the four-hour brownout that occurred on July 25, 2005 and refused to pay for
the remaining three hours.
H. Dismissal of Diosdado Madayag
 Union contended that Madayag’s dismissal from employment is illegal
because Supreme failed to obtain a certification from a competent public
authority that his disease is of such nature or at such stage that it cannot be
cured within six months even after proper medical treatment. Supreme also
69
 failed to prove that Madayag’s continued employment was prejudicial to his
health or that of his colleagues.
I. Denial of paternity leave benefit to two employees
 Union argued that Supreme is relying on technicalities by insisting that the
denial was due to the two employees’ failure to notify it of the pregnancy of
their respective spouses. It maintained that the notification requirement runs
counter to the spirit of the law. Union averred that, on grounds of social
justice, the oversight to notify Supreme should not be dealt with severely by
denying the two claimants this benefit.
J. Discrimination and harassment

 According to Union, Supreme was contemptuous over union officers for

protecting the rights of union members. In an affidavit executed by Guadaña,
union secretary, he narrated that Alfred Navarro, Officer-in-Charge of the
Packing Department, had been harsh in dealing with his fellow employees and
would even challenge some workers to a fight. He averred that Navarro had an
overbearing attitude during work and grievance meetings.
 In November 2004, Navarro removed Guadaña, a foreman, from his position
and installed another foreman from another section. The action was allegedly
brought about by earlier grievances against Navarro’s abuse.
 Union also alleged that Marigondon, union president, was also penalized for
working for his fellow employees. One time, Marigondon inquired from
management about matters concerning tax discrepancies because it appeared
that non-taxable items were included as part of taxable income. Thereafter,
Marigondon was transferred from one area of operation to another until he
was allegedly forced to accept menial jobs of putting control tags on steel
pipes, a kind of job which did not require his 16 years of expertise in
examining steel pipes.
 Edgardo Masangcay, Union’s Second Vice President, executed an affidavit
wherein he cited three instances when his salary was withheld by Supreme.
The first incident happened on May 28, 2005 when Supreme refused to give
his salary to his wife despite presentation of a proof of identification (ID) and
letter of authorization. On June 18, 2005, Supreme also refused to release his
salary to Pascual Lazaro despite submission of a letter of authority and his ID
and, as a result, he was unable to buy medicine for his child who was
70
 suffering from asthma attack. The third instance happened on June 25, 2005
when his salary was short of ₱450.00; this amount was however released the
following week.
K. Non-implementation of COLA in Wage Order Nos. RBIII-10 and 11
 Union posited that any form of wage increase granted through the CBA
should not be treated as compliance with the wage increase given through
the wage boards.
6. The NLRC’s Ruling. Out of the eleven issues raised by Union, eight were
decided in its favor; two (denial of paternity leave benefit and discrimination
of union members) were decided in favor of Supreme; while the issue on
visitor’s free access to company premises was deemed settled during the
mandatory conference.
7. The issue on Visitors’ Free Access to Company Premises is dismissed for
being moot and academic after it was settled during the scheduled
conferences.
8. Forthwith, Supreme elevated the case to the CA, reiterating its arguments on
the eight issues resolved by the NLRC in Union’s favor.

ISSUE/s:
WoN the CA erred in finding that Supreme violated certain provisions of the
CBA. YES, but only on the issue pertaining to the denial of the COLA under
Wage Order No. RBIII-10 and 11 to the employees who are not minimum
wage earners.
1. It is a familiar and fundamental doctrine in labor law that the CBA is the law
between the parties and compliance therewith is mandated by the express
policy of the law. If the terms of a CBA are clear and there is no doubt as to
the intention of the contracting parties, the literal meaning of its stipulation
shall prevail. Moreover, the CBA must be construed liberally rather than
narrowly and technically and the Court must place a practical and realistic
construction upon it. Any doubt in the interpretation of any law or provision
affecting labor should be resolved in favor of labor.
2. The wording of the CBA on general wage increase cannot be interpreted any
other way: The CBA increase should be given to all employees "over and
above" the amount they are receiving, even if that amount already includes an

71
 anniversary increase. Stipulations in a contract must be read together, not in
isolation from one another.
3. Consideration of Article XIII, Section 2 (non-crediting provision), bolsters
such interpretation. Section 2 states that "[a]ll salary increase granted by the
company shall not be credited to any future contractual or legislated wage
increases."
4. Clearly then, even if Supreme had already awarded an anniversary increase to
its employees, such increase cannot be credited to the "contractual" increase
as provided in the CBA, which is considered "separate and distinct."
5. Supreme claims that it has been the company practice to offset the anniversary
increase with the CBA increase. It however failed to prove such material fact.
Company practice, just like any other fact, habits, customs, usage or patterns
of conduct must be proven. The offering party must allege and prove specific,
repetitive conduct that might constitute evidence of habit, or company
practice. Evidently, the pay slips of the four employees do not serve as
sufficient proof.
6. Supreme’s excuse in not providing a shuttle service to its employees is
unacceptable. Supreme simply says that it is difficult to implement the
provision. It relies on the fact that "no time element [is] explicitly stated [in
the CBA] within which to fulfill the undertaking." We cannot allow Supreme
to dillydally in complying with its obligation and take undue advantage of the
fact that no period is provided in the CBA. Supreme should recondition the
company vehicle at once, lest it be charged with and found guilty of unfair
labor practice.
7. Supreme gave a narrow construction to the wording of the CBA when it
denied (a) reimbursement for the first-aid medicines taken by Solitario when
he was injured during the company sportsfest and the transportation cost
incurred by Alberto Guevara and Job Canizares in going to the hospital, (b)
payment of the wages of certain employees during the time they spent at the
grievance meetings, and (c) payment of the employees’ wages during the
brownout that occurred on July 25, 2002.
8. It is the duty of the courts to place a practical and realistic construction upon
the CBA, giving due consideration to the context in which it is negotiated and
the purpose which it is intended to serve. Absurd and illogical interpretations

72
 should be avoided. A CBA, like any other contract, must be interpreted
according to the intention of the parties.
9. The CA was correct in pointing out that the concerned employees were not
seeking hospitalization benefits under Article VIII, Section 1 of the CBA, but
under Section 4 thereof; hence, confinement in a hospital is not a prerequisite
for the claim.
10. Supreme should reimburse Solitario for the first aid medicines; after all, it is
the duty of the employer to maintain first- aid medicines in its premises.
Similarly, Guevara and Canizares should also be reimbursed for the
transportation cost incurred in going to the hospital.
11. The Omnibus Rules Implementing the Labor Code provides that, where the
employer does not have an emergency hospital in its premises, the employer is
obliged to transport an employee to the nearest hospital or clinic in case of
emergency.
12. We likewise agree with the CA on the issue of nonpayment of the time-off for
attending grievance meetings. The intention of the parties is obviously to
compensate the employees for the time that they spend in a grievance meeting
as the CBA provision categorically states that the company will pay the
employee "a paid time-off for handling of grievances, investigations, labor-
management conferences." It does not make a qualification that such meeting
should be held during office hours or within the company premises.
13. The employees should also be compensated for the time they were prevented
from working due to the brownout. The CBA enumerates some of the
instances considered as "emergencies" and these are "typhoons, flood
earthquake, transportation strike."
14. As correctly argued by Union, the CBA does not exclusively enumerate the
situations which are considered "emergencies." Obviously, the key element of
the provision is that employees "who have reported for work are unable to
continue working" because of the incident. It is therefore reasonable to
conclude that brownout or power outage is considered an "emergency"
situation.
15. Again, on the issue of contracting-out labor, we sustain the CA. Supreme, in
effect, admits having hired "temporary" employees, but it maintains that it
was an exercise of management prerogative, necessitated by the increase in

73
 demand for its product.

16. Indeed, jurisprudence recognizes the right to exercise management

prerogative. Labor laws also discourage interference with an employer's
judgment in the conduct of its business. For this reason, the Court often
declines to interfere in legitimate business decisions of employers. The law
must protect not only the welfare of employees, but also the right of
employers. However, the exercise of management prerogative is not
unlimited. Managerial prerogatives are subject to limitations provided by law,
collective bargaining agreements, and general principles of fair play and
justice. The CBA is the norm of conduct between the parties and, as
previously stated, compliance therewith is mandated by the express policy of
the law.
14. The CBA is clear in providing that temporary employees will no longer be
allowed in the company except in the Warehouse and Packing Section. Supreme is
bound by this provision. It cannot exempt itself from compliance by invoking
management prerogative. Management prerogative must take a backseat when
faced with a CBA provision. If Supreme needed additional personnel to meet the
increase in demand, it could have taken measures without violating the CBA.
15. Union claims that the temporary employees were hired on five-month
contracts, renewable for another five months. After the expiration of the contracts,
Supreme would hire other persons for the same work, with the same employment
status.
16. Plainly, Supreme’s scheme seeks to prevent employees from acquiring the
status of regular employees. But the Court has already held that, where from the
circumstances it is apparent that the periods of employment have been imposed to
preclude acquisition of security of tenure by the employee, they should be struck
down or disregarded as contrary to public policy and morals.
17. We also uphold the CA’s finding that Madayag’s dismissal was illegal. It
is already settled that the burden to prove the validity of the dismissal rests upon
the employer. Dismissal based on Article 284 of the Labor Code is no different,
thus:

18. The law is unequivocal: the employer, before it can legally dismiss its
employee on the ground of disease, must adduce a certification from a competent
74
public authority that the disease of which its employee is suffering is of such
nature or at such a stage that it cannot be cured within a period of six months even
with proper treatment.
19. However, with respect to the issue of whether the COLA under Wage
Order Nos. RBIII-10 and 11 should be implemented across the board, we hold a
different view from that of the CA. No diminution of benefits would result if the
wage orders are not implemented across the board, as no such company practice
has been established.
20. Diminution of benefits is the unilateral withdrawal by the employer of
benefits already enjoyed by the employees. There is diminution of benefits when
it is shown that: (1) the grant or benefit is founded on a policy or has ripened into
a practice over a long period of time; (2) the practice is consistent and deliberate;
(3) the practice is not due to error in the construction or application of a doubtful
or difficult question of law; and (4) the diminution or discontinuance is done
unilaterally by the employer.
21. The CA failed to note that Globe Mackay primarily emphasized that, for
the grant of the benefit to be considered voluntary, "it should have been practiced
over a long period of time, and must be shown to have been consistent and
deliberate." The fact that the practice must not have been due to error in the
construction or application of a doubtful or difficult question of law is a distinct
requirement.
22. The implementation of the COLA under Wage Order No. RBIII-10 across
the board, which only lasted for less than a year, cannot be considered as having
been practiced "over a long period of time." While it is true that jurisprudence has
not laid down any rule requiring a specific minimum number of years in order for
a practice to be considered as a voluntary act of the employer, under existing
jurisprudence on this matter, an act carried out within less than a year would
certainly not qualify as such. Hence, the withdrawal of the COLA Wage Order
No. RBIII-10 from the salaries of non-minimum wage earners did not amount to a
"diminution of benefits" under the law.
23. There is also no basis in enjoining Supreme to implement Wage Order
No. RBIII-11 across the board. Similarly, no proof was presented showing that the
implementation of wage orders across the board has ripened into a company
practice. In the same way that we required Supreme to prove the existence of a
company practice when it alleged
75
the same as defense, at this instance, we also require Union to show proof of the
company practice as it is now the party claiming its existence. Absent any proof of
specific, repetitive conduct that might constitute evidence of the practice, we
cannot give credence to Union’s claim. The isolated act of implementing a wage
order across the board can hardly be considered a company practice, more so
when such implementation was erroneously made.

76
Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and
Staff Association
FACTS:
1. Petitioner Wesleyan University-Philippines (University) and Responend
Wesleyan University-Philippines Faculty and Staff Associaion (Union), as the
sole and exclusive bargaining agent of all rank-and-file faculty and staff
employees, signed a 5-year CBA.
2. Sections 1 and 2 of Article XII of the CBA Provide that all covered
employees are entitled to 15 days sick leave and 15 days vacation leave with pay
every year and that after the second year of service, all unused vacation leave shall
be converted to cash and paid to the employee at the end of each school year.
3. On August 16, 2005, Wesleyan University issued a memorandum
providing guidelines on the implementation of vacation and sick leave
commutation (Memorandum). It provided that vacation and sick leave credits are
not automatic, and they would be earned on a month-to- month basis at a rate of
1.25 days for each vacation and sick leave.
4. The Wesleyan Union was not amenable to the unilateral changes and that
it violated the existing CBA. This was raised during the Labor Management
Committee Meeting.
5. In the same meeting, petitioner announced its plan of implementing a one-
retirment policy, effectively abolishing the existing Private Education Retirement
Annuity Association Plan (PERAA) and CBA Retirement Plan.
6. The parties referred the issue to a Voluntary Arbitrator. It revoked the

the one-retirment policy and the memorandum, holding the same were contrary to
law.
7. The Court of Appeals affirmed the decision on the ground that the same
unilaterally amended the CBA without consent of the Wesleyan Union.
ISSUE/s:
5. Whether or not the Memorandum is valid. NO — It imposed a limitation
not agreed upon by the parties nor stated in the CBA. [main issue]
6. Whether or not the one-retirement policy is valid. NO – The non-
diminution rule applies in the case.

77
RULING: WHEREFORE, the Petition is hereby DENIED. The assailed
September 25, 2007 Decision and the February 5, 2008 Resolution of the Court of
Appeals in CA-G.R. SP No. 97053 are hereby AFFIRMED.
RATIO:
Issue 1
13. A Collective Bargaining Agreement is a contract entered into by an
employer and a legitimate labor organization concerning the terms and conditions
of employment. Like any other contract, it has the force of law between the parties
and, thus, should be complied with in good faith. Unilateral changes or
suspensions in the implementation of the provisions of the CBA cannot be
allowed without consent of both parties.
14. The CBA grants all covered employees with 15 days sick leave and 15
days vacation leave with pay every year without any qualification. On the other
hand, the Memorandum provided that vacation and sick leave credits are not
automatic as leave credits would be earned on a month-to-month basis. This
would limit the available leave credits of an employee at the start of the school
year. The Memorandum imposes a limitation not agreed upon by the parties nor
stated in the CBA. Therefore, it is invalid.
Issue 2

15. The Non-Diminution Rule found in Article 100 of the Labor Code
explicitly prohibits employers from eliminating or reducing the benefits received
by their employees.
16. For this rule to apply, such benefits must be based on an express policy, a
written contract, or a practice consistently and deliberately made by the employer
over a long period of time.
17. An exception to the rule is when the practice is due to error or doubtful
question of law. But such error must be immediately corrected.
18. The defense of Wesleyan University in supporting the one-retirement plan
policy are: a) There is no company practice or policy of giving two retirement
benefits; and b) the release of two retirement benefits were done by mere
oversight or mistake.
19. The record shows that the Wesleyan University has been giving two
retirement benefits as early as 1997 (at least 6 years before). Wesleyan University
also failed to substantiate its allegation that the two retirement benefits were a
78
mistake. Wherefore, the one-retirment plan policy is void as being against existing
practice of giving two retirement benefits.
20. The Court also noted that when the provision of the CBA is clear, the
literal meaning of the stipulation shall govern. In case of doubt, it shall be
resolved in favor of labor.
21. In this case, the CBA did not refer to the two retirement plans as one and
the same nor did it prohibit the existence of the two. Therefore, the issue should
be resolved in the favor of the Wesleyan Union

79
SONEDCO v. URC
FACTS:
1. On May 6, 2002, Universal Robina Corporation Sugar Division -
Southern Negros Development Corporation (URC-SONEDCO) and Philippine
Agricultural Commercial and Industrial Workers Union (PACIWU-TUCP), then
the exclusive bargaining representative of URC-SONEDCO's rank-and-file
employees, entered into a Collective Bargaining Agreement (2002 Collective
Bargaining Agreement)

effective January 1, 2002 to December 31, 2006

2. Under the 2002 Collective Bargaining Agreement, rank-and-file
employees were entitled to a wage increase of P14.00/day for 2002 and
P12.00/day for the succeeding years until 2006
3. On May 17, 2002, days after the 2002 Collective Bargaining Agreement
was signed, a certification election was conducted. SONEDCO Workers Free
Labor Union won and replaced PACIWU- TUCP as the exclusive bargaining
representative.
4. PACIWU-TUCP questioned the results of the certification election before
the Department of Labor and Employment. On July 8, 2002, Med-Arbiter Romulo
Sumalinog certified SONEDCO Workers Free Labor Union as the sole and
exclusive bargaining representative of URC-SONEDCO.
5. URC-SONEDCO consistently refused to negotiate a new collective
bargaining agreement with SONEDCO Workers Free Labor Union, despite
several demands from SONEDCO Workers Free Labor Union, allegedly due to
the 2002 Collective Bargaining Agreement, which it signed with PACIWU-
TUCP.
6. Despite being the incumbent exclusive bargaining agent, SONEDCO
Workers Free Labor Union filed before the Department of Labor and Employment
a Petition for certification election on December 6, 2006 in view of the
approaching expiration of the 2002 Collective Bargaining Agreement.
7. On December 31, 2006, the 2002 Collective Bargaining Agreement
expired with no new collective bargaining agreement being signed.
8. On August 28, 2007, with no collective bargaining agreement in effect,
URC-SONEDCO informed the rank-and-file employees that they would be
granted the following economic benefits:
80
(1) Wage increase of P16.00/day effective January 1, 2007;
(2) Group life insurance of P50,000.00 coverage/year;
(3) Emergency leave in lieu of bereavement leave, up to five (5) days per
year; and
(4) Cash loan in lieu of emergency loan of P5,000.00, payable in 11 months

9. URC-SONEDCO asked the employees who wished to avail themselves of

these-benefits to sign an acknowledgment receipt/waiver (2007 waiver), which
stated that "[i]n the event that a

subsequent [collective bargaining agreement] is negotiated between Management

and Union, the new [Collective Bargaining Agreement] shall only be effective
January 1, 2008.
10. URC-SONEDCO claimed that the 2007 waiver was designed to avoid
and/or prevent double compensation. Several SONEDCO Workers Free Labor
Union members refused to sign the 2007 waiver. Hence, they did not receive the
benefits given to other members of the bargaining unit who had done so.
11. In 2008, another wage increase of P16.00/day effective January 1, 2008
were given to employees who signed an acknowledgment receipt/waiver (2008
waiver). The 2008 waiver stated that "[s]a panahon na kung saan may [collective
bargaining agreement] na maisasara sa pagitan ng Management at Uniyon, ito ay
magiging epektibo lamang Simula January 1, 2009.
12. Again, several SONEDCO Workers Free Labor Union members refused
to sign the 2008 waiver. They did not receive the benefits from URC-SONEDCO.
13. On August 20, 2008, a certification election was conducted. SONEDCO
Workers Free Labor Union won again and proceeded to negotiate a new collective
bargaining agreement, which became effective January 1, 2009 to December 31,
2013 (2009 Collective Bargaining Agreement).
14. COMPLAINT BY SWUFLU: On July 2, 2009, SONEDCO Workers Free
Labor Union and its members who refused to sign the 2007 and 2008 waivers
filed a complaint for unfair labor practices against URC- SONEDCO. They
argued that the requirement of a waiver before the release of the wage increase
violated their right to self-organization, collective bargaining, and concerted
action.
81
15. LA DECISION: Labor Arbiter found that URC-SONEDCO did not
commit unfair labor practice when it increased the wages of the rank- and-file
employees for 2007 and 2008. He found that, the requirement of a waiver aside, it
was benevolent for URC-SONEDCO to give its employees additional benefits
outside the Collective Bargaining Agreement.
16. However, the Labor Arbiter ordered URC-SONEDCO to pay the
employees who refused to sign the 2007 and 2008 waivers of the benefits received
by their fellow employees for 2007 and 2008. As a new collective bargaining
agreement had already been renegotiated and did not include the years 2007 and
2008, the purpose of the waivers was already served.
17. NLRC DECISION: NLRC affirmed the LA decision both as to the

validity of the waiver and the decision to award the wage increase.

Such an act does not constitute interference, restraining or coercing employees in

the exercise of their right to self organization or to bargain collectively, neither is
it tantamount to discrimination against union members who refused to waive wage
increase in a CBA. As aptly termed by respondents, it is an "offer" during the
absence of a Collective Bargaining Agreement (CBA) and during the time when
there was an unresolved union representation, which this Commission considers
as reasonable.
18. Aggrieved, members of SONEDCO Workers Free Labor Union filed
before the Court of Appeals a Petition for Certiorari assailing the National Labor
Relations Commission Decision. The Court of Appeals found no grave abuse of
discretion in the assailed decision and dismissed the Petition.
19. SWUFLU argue that CA failed to consider the totality of respondent's
dealings with them. They allege that despite their several invitations, URC-
SONEDCO consistently failed to bargain with them, and the wage increase was
just another move to avoid negotiations. SWUFLY claim that the benefits given
by respondent was an economic incentive meant to encourage individual
employees to give up agreement bargaining for 2007 and 2008.

ISSUE/s:
1. WoN URC-SONEDCO committed unfair labor practice – Yes because the
company refused to bargain collectively with the union and was made manifest by
82
its erroneous reliance with the 2002 CBA, waivers it executed, and the consistent
failure to communicate and attend meetings with Union 1 the exclusive bargaining
agent.
2. WoN URC is liable for damages – Yes because unfair labor practices
violate the constitutional rights of workers and employees to self- organization.
For this reason, we find it proper in this case to impose moral and exemplary
damages on private respondent
RULING: WHEREFORE, the Petition is GRANTED. The Decision of the Court
of Appeals dated January 30, 2015 and the Resolution dated July 27, 2015 in CA-
GR. SP No. 05950 are SET ASIDE. Respondent Universal Robina Corporation.
Sugar Division - Southern Negros Development Corporation is GUILTY of unfair
labor practice and is ORDERED to pay each of the petitioners the wage increase
of P16.00 for the years 2007 and 2008; and to

pay SONEDCO Workers Free Labor Union moral damages in the amount of
P100,000.00; and exemplary damages in the amount of P200,000.00.

RATIO:
1. Both the National Labor Relations Commission and the Court of Appeals
ruled that respondent did not commit unfair labor practice since the requirement of
a waiver for 2007 and 2008 did not interfere with the employees exercise of their
right to self-organization.
2. However, the Court of Appeals failed to take into account that unfair labor
practice not only involves acts that violate the right to self- organization but also
covers several acts enumerated in Article 259 of the Labor Code. In this case, the
provisions specifically violated are letters (a), ( e ), and (g):
(a) To interfere with, restrain or coerce employees in the exercise of their
right 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.
(g) To violate the duty to bargain collectively as prescribed by this Code
3. Under this provision, an employer is guilty of unfair labor practice when
it fails in its duty to bargain in good faith

83
4. Although it is well-settled that the findings of fact of quasi-judicial
agencies such as the National Labor Relations Commission are accorded great
respect, this rule does admit exceptions. One of these exceptions is when, as in
this case, the Court of Appeals errs in appreciating the facts.
5. In ruling that URC-SONEDCO did not commit unfair labor practice, the
National Labor Relations Commission and the Court of Appeals failed to consider
the totality of URC-SONEDCO’s acts, which

showed that it violated its duty to bargain collectively52. This constitutes unfair
labor practice under Article 259(g) of the Labor Code.
6. URC-SONEDCO repeatedly refused to meet and bargain with
SONEDCO Workers Free Labor Union, the exclusive bargaining agent of its
rank-and-file employees.
7. In its Position Paper, before the National Labor Relations Commission,
URC-SONEDCO cited the different instances when SWUFLU sent it letters
trying to set meetings to discuss a new collective bargaining agreement. URC-
SONEDCO admitted that it refused to meet with petitioners in light of the 2002
Collective Bargaining Agreement, which it signed with PACIWU-TUCP, the
previous bargaining representative. It claimed that the 2002 Collective Bargaining
Agreement remained in full force and effect without change until December 31,
2006, despite PACIWU-TUCP losing the May 17, 2002 certification election to
SONEDCO Workers Free Labor Union
8. The argument has no merit URC-SONEDCO’s reliance on the 2002
Collective Bargaining Agreement as basis for not negotiating with SWUFLU is
unjustified. The Collective Bargaining Agreement that URC-SONEDCO invoked
had been entered into when a Petition for Certification Election was already filed
9. In Associated Trade Union v. Trajano, this Court ruled on the temporary
nature of this type of collective bargaining agreement
The said CBA cannot be deemed permanent, precluding the commencement of
negotiations by another union with the management. In the meantime however, so
as not to deprive the workers of the benefits of the said

52 ARTICLE 263. [252] Meaning of Duty to Bargain Collectively. — The

duty to bargain collectively means the performance of a mutual obligation to meet
84
and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work and all other terms
and conditions of

agreement, it shall be recognized and given effect on a temporary basis, subject to

the results of the certification election.
10. URC-SONEDCO claimed that it refused to bargain with SWUFLU
because the issue of representation was still pending before the courts. It claimed
that when the 2002 Collective Bargaining Agreement expired on December 31,
2006, it had no bargaining agent to deal with as SONEDCO Workers Free Labor
Union had filed before the Department of Labor and Employment a Petition for
Certification Election on December 6, 2006, which resulted in the absence of a
duly elected bargaining representative. And that they were only certified as the
exclusive bargaining agent on 2008.
11. The above argument is untenable. Let it be noted that based on the results
of the certification election conducted in the establishment on 17 May 2002,
Mediator-Arbiter Sumalinog, declared and certified SWOFLU as the sole and
exclusive bargaining agent of the rank-and- file employees of SONEDCO. The
office of the Secretary affirmed SWOFLU's certification in OS-A-6-63-01, and
the decision became final and executory on 15 April 2003. As such, the
suspension of the running of the one (1) year period referred in Section 3(a) Rule
VIII was automatically lifted on 15 April 2003. Hence, the one (1) year bar cannot
be used to deny the subject petition. Furthermore, despite PACIWU-TUCP's act of
questioning the Office of the Secretary's affirmation before the Court of Appeals
by way of a petition for certiorari, no restraining order was issued to stay the
implementation of the decision.
12. DOLE emphasized that, as far as this Office is concerned, SWOFLU is
the incumbent sole and exclusive bargaining agent of the rank-and- file employees
of SONEDCO. As such, there was actually no necessity for SWOFLU to file the
subject petition, as its representation

employment including proposals for adjusting any grievances or questions arising

under such agreement and executing a contract incorporating such agreements if
requested by either party but such duty does not compel any party to agree to a
proposal or to make any concession
85
status remains to be effective unless challenged by other legitimate labor
organizations during the freedom period of the CBA that was entered into by
PACIWU-TUCP and employer SONEDCO.
13. URC-SONEDCO’s duty to bargain with SWUFLU as the incumbent
bargaining agent is clear from the last paragraph of Article 268:
At the expiration of the freedom period, the employer shall continue to recognize
the majority status of the incumbent bargaining agent where no petition for
certification election is filed.
14. When SWUFLU held a conference on May 26, 2003, URC- SONEDCO
refused to attend. Because URC-SONEDCO failed to appear in the conference,
SWUFLU wrote their demands in a letter sometime in July 2003.
15. Instead of explaining its non-attendance to the conference or making a
counter-offer, respondent replied on August 15, 2003 acknowledging the receipt
and contents of the July 2003 letter but invoking the 2002 Collective Bargaining
Agreement as an excuse not to answer petitioners' demands to negotiate.59 This is
contrary to Article 26153 of the Labor Code, which requires the other party to
reply within 10 days from receipt of the written demand
16. URC-SONEDCO likewise failed to reply to the collective bargaining
agreement proposal sent by petitioners on August 21, 2007.
17. The court explicitly held in Associated Labor Unions v. Trajano

If, as a result of the certification election, respondent union or a union other than
petitioner union which executed the interim agreement is certified as the exclusive
bargaining

53 ARTICLE 261. [250] Procedure in Collective Bargaining. — The

following procedures shall be observed in collective bargaining:cralawlawlibrary

(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 notic

86
representative of the rank and file employees of respondent company, then, such
union may adopt the interim collective bargaining agreement or negotiate with
management for a new collective bargaining agreement
18. Even if we consider URC-SONEDCOs refusal to bargain as merely a
mistake made in good faith, its subsequent acts show an attempt to restrict
petitioners' negotiating power.
19. First, the 2002 Collective Bargaining Agreement was done on May 6,
2002, only days before the May 17, 2002 certification election. When respondent
and PACIWU-TUCP entered into the 2002 Collective Bargaining Agreement,
they had been aware that a certification election was going to be conducted in a
few days. In pushing through with negotiations instead of waiting for the outcome
of the election, URC-SONEDCO risked needing to renegotiate with a new union
if PACIWU-TUCP loses. It cannot, thus, invoke the hastily concluded 2002
Collective Bargaining Agreement as an excuse not to bargain with petitioners. If
URC-SONEDCO had truly intended to bargain in good faith, it could have easily
waited a few more days to know the result of the certification election.
20. Second, when the 2002 Collective Bargaining Agreement expired in
December 2006, the Labor Secretary's Resolution declaring SONEDCO Workers
Free Labor Union as the bargaining agent of respondent's rank-and-file employees
was already final and executory. Respondent's initial basis for refusal to bargain
had expired, and since no temporary restraining order was issued, nothing was
legally preventing respondent from negotiating a new collective bargaining
agreement with the union.
21. The wording of the waivers54 shows a clear attempt to limit

54 The 2007 waiver provided, in part

In the event that a subsequent CBA is negotiated between Management and
Union, the new CBA shall only be effective January 1, 2008.
chanrobleslaw
The 2008 waiver provided, in part:

petitioners' bargaining power by making them waive the negotiations for 2007 and
2008. In stipulating that the collective bargaining agreement that would be entered
into would only be effective the year following the 2008 waiver, respondent

87
limited when the collective bargaining agreement could be deemed effective. Tn
other words,

respondent asked petitioners to forego any benefits they might have received
under a collective bargaining agreement in exchange for the company-granted
benefits.

88