TITLE VI

Title VI
UNFAIR LABOR PRACTICES

Chapter I
CONCEPT
Article 258 [247]. Concept of Unfair Labor Practice and

Procedure for Prosecution Thereof. — Unfair labor practices violate the
constitutional right of workers and employees to self-organization, are
inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with
each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable
labor-management relations.
Consequently, unfair labor practices are not only violations
criminal
of the civil rights of both labor and management but are also
prosecution and
offenses against the State which shall be subject to
punishment as herein provided.
the Secretary
Subject to the exercise by the President or by
in them by Articles
of Labor and Employment of the powers vested
civil aspects of all cases
278 [263] and 279 [264] of this Code, the
include claims for actual,
involving unfair labor practices, which may fees and
damages, attorney’s
moral, exemplary and other forms of
the jurisdiction of the Labor
other affirmative relief, shall be under
utmost priority to the hearing
Arbiters. The Labor Arbiters shall give
unfair labor practices. They shall
and resolution of all cases involving
calendar days from the time they
resolve such cases within thirty (30)
are submitted for decision.'
the a dministrative proceedings
Recovery of civil liability in
Civil Code.
shall bar recovery under the
this Title may be instituted
No criminal prosecution under ce was
without a final judgment fin ding that an unfair labor practi
aph.
hav ing bee n firs t obt ain ed in the preceding paragr
committed,
the pen den cy of suc h adm ini strative proceeding, the running
During penalized
of the criminal offense herein
of the period of prescription the final
Provided, however, that
shall be considered interrupted: g in
nt in the adm ini str ati ve proceedings shall not be bindin
judgme as
d as evidence of guilt but merely
the criminal case nor be considere
uirements therein set forth.
proof of compliance of the req
NOTES AND COMMENTS
INTRODUCTION
TATION.
1. ORDER OF TOPICAL PRESEN
are as follows:
major topics dis cussed in this section
The
"As amended by Section 19, RA. No. 6715, March 21, 1989. Merch 21, 1989; As
70, May 1, 1980 and later furher amende d by Section 19, R.A. No. 6715,ies of 2015
nealt io Section 5, RA. No, |10161, June 21,1, 2011201 and DOLE Depa rtme nt
Advisor
i s o r y y No. 01, Ser (Renumbering
Seen pursuan 21, 2015,
ofthe Labor Code of the Phiippines, as Amended), issued on July
664 LAW ON LABOR RELATIONS
ANNOTATED
|. LABOR CODE PROVISIONS ON ULPs

ll. ULPs
Ill. ASPECTS OF ULP
L
LABOR CODE PROVISIONS ON ULPs
1. FIVE (5) PROVISIONS.
Under the Labor Code, there are three provisions that directly deal with ULPs, viz.:
1. Article 258 [247] which describes the concept of ULPs and prescribes the
procedure for their prosecution;
2. Article 259 [248] which enumerates the ULPs that may be committed by
employers; and ;
3. Article 260 [249] which enumerates the ULPs that may be committed by labor
organizations.
Additionally, the same Code contains 2 other provisions that relate to ULP, to wit:
4. Article 274 [261] which considers violations of the CBA as no longer ULPs
unless the same are gross in character which means flagrant and/or malicious
refusal to comply with the economic provisions thereof, and
5. Article 278(c) [263(c)] which refers to union-busting involving the dismissal
from employment of union officers duly elected in accordance with the union
constitution and by-laws, where the existence of the union is threatened thereby.
2. VIOLATION OF CBA AS ULP.
It bears noting that the enumeration of ULPs of employers in Article 259 [248] and
of labor organizations in Article 260 [249] does not reflect the fact that mere violations of the
CBA as provided in paragraph (i) of Article 259 [248] and paragraph (f) of Article 260 [249]
thereof are no longer considered ULPs, in the light of the incorporation into the Labor Code
of a new provision denominated as Article 274 [261] by R.A. No. 6715,' which provides,
insofar as pertinent, as follows:
“sox Accordingly, 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 collective bargaining
agreement. For purposes of this Article, gross violations of a collective
bargaining agreement shall mean flagrant and/or malicious refusal to comply
with the economic provisions of such agreement.”
Clearly, therefore, the following violations of the CBA are not considered ULPs,
irrespective of whether they have been committed by the employer or the union: (1) ordinary
violations of a CBA which involve its non-economic/political provisions; (2) violations of its
non-economic provisions, even if gross in nature; and (3) violations of its economic
provisions which are not gross in character. Consequently, they shall be resolved as ordinary
a properly cognizable under the grievance machinery and voluntary arbitration of
e
3. UNION-BUSTING AS ULP.
; The same enumeration of ULPs of employers in Article 259 [248] does not likewise
include union-busting which is considered a ULP by virtue of Article 278(c) [263(c)], which
provides in part as follows:
1 See Section 26 thereof; This law took effect on March 21, 1989.
2 Underscoring supplied.
THE LABOR CODE OF THE PH ILIPPIN
Articke 258 [247].Coceha tak Le pase ad eo poesia Thereof “s
“Sox However,
CNGE, in case of dismissal fi rom employment of union
officers duly elected in accordance with the unionconinthinan: si bola which
may constitute union busting, where the existence of the union is threatened, the
15-day cooling-off period shall not apply and the union may take action
immediately.”"
oug the above-quoted provision does not e xpressly describe
Although uni i as a
ibe union-busting
form of ULP, jurisprudence abounds where it is considered as such.’
; (NOTE: See more discussion on union-busting
in the Notes and Comments on Article 278 [263], infra).
I.
ULPs
1. DEFINITION.
es “unfair labor practice” OT
. Article 219{k) [212(k)}> of the Labor Code defin
ned by the Labor Code, originally
“ULP” as any unfair labor practice as expressly defi
259 [248]* and 260 [249]° thereof but
referring solely to the acts enumerated in Articles 278(c) [263(c)], as
in Articles 274 [261]® and
should additionally include those mentioned
discussed above.’
2. ROOT BASES OF ULP PROVISIONS.
trace their roots in ILO Convention No.
The provisions on ULP in the Labor Code United
ve Bargaining Convention "8 and relevant
98, entitled “Right to Organize and Collecti
States labor laws.
a. ILO Convention No. 98.
tion:
to ULP are provided under this Conven
The following principles relevant
of anti-union
quate protection against acts
1) Workers shall enjoy ade
discrimination in respect of thei
r employment.’
calculated to:
Suc h pro tec tio n shal ] app ly more particularly in respect of acts
2)
shall not
emp loy men t of a wor ker subject to the condition that he
(a) make the bership;
e union mem
join a union or shall relinquish trad prejudice a worker by reason of union
(b) cause the dismissal of or otherwise working
shi p or bec aus e of par tic ipa tion in union activities outside
member hours.'°
the employer, within working
hours or, with the consent of
nst
Work ers’ and empl oyer s’ orga niza tion s shall enjoy adequate protection agai
3) or members in their
any acts or interference by each other or each other’s agents
establishment, functioning or administration."
s’
act s whi ch are des ign ed to pro mote the establishment of worker
4) In particular, ’ organizations or
zat ion s und er the dom ination of employers or employers
organi
. —
111 , Dec . 24, 1986 . S
Executive Ord
: As amended by Secfion 88, sa
er No,
No, 826 8 Oc , 100 ; mp See Neil. Pape Me OB
: Asan by Sec on e 7
Gulld, GR. Nos. L-20667 and L-20669, Oct. 29, 1965. on and Pre ven Messin Cass.
SEN ee s a NCME Manual of Procedures lr Concia
UL Employers.
of P
mow ew
ULPs of Labor Organizatons.

es
Gross violat n.
of theioCBA
Union-busting,
Adopted by the Intemational Labour Conference on July 01, 1949.
Arfcle1 thereof,
2-7
i.
1 Arce 2 thereof.
+
ANNOTATED
to support workers’ organizations by financial or other means, with the object of

placing such organizations under the control of employers or employers’
organizations within the meaning of this Article.’
b. United States laws.
Articles 259 [248]? and 260 [249}° of the Labor Code contain well-nigh verbatim
replicas of similar provisions of pertinent United States’ labor laws," although the scope and
coverage are far greater than the ones mentioned in our Code, insofar as the ULPs of the
employer’ and labor organization are concerned. It is for this reason that the interpretation
Kd.
epwna
ULPs of Employers.
ULPs of Labor Organizations.
Particularly, the National Labor Relations Act of 1935 (49 Stal. 449) 29 U.S.C. § 151-169 (also known as the NLRA and the Wagner Act
after New York Senator Robert F. Wagner) and other legislation. Such acts are heard and adjudicated by the Natonal Labor Relations
Board (NLRB).
The following is the enumeration of the unfair labor practices by employer: “it shall be an unfair labor practice for an employer:
(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this tite;
(2) b dominate or interfere with the formation or administration of any labor organization or contibute financial or other support to it
Provided, That subject to rules end regulations made and published by the Board pursuant fo section 156 of this title, an employer shall
not be prohibited from permitting employees to confer with him during working hours without loss of time or pay,
(3) by discrimination in regard to hire or tenure of employment or any tem or condition of employment to encourage or discourage
membership in any labor organization: Provided, That nothing in this subchapter, or in any other statute of the United States, shail
preciude an employer from making an agreement with a labor organization (not established, maintained, or assisted by any action defined
in this subsection as an unfair labor practice) to require as a condition of employment membership therein on or after the thirteth day
following the beginning of such employment or the effective date of such agreement, whichever is the later, () if such labor organization is
the representative of the employees as provided in section 159(a) of this tite, in the appropriate collective-bargaining unit covered by such
agreement when made, and (i) unless following an election held as provided in section 159(e) of this fitle within one year preceding the
effective date of such agreement, the Board shall have certified that at least a majority of the employees eligible to vote in such election
have voled fo rescind the authority of such labor organization to make such an agreement Provided further, That no employer shail justify
any discrimination against an employee for nonmembership in a labor organization (A) if he has reasonable grounds for believing that
such membership was not available to the employee on the same terms and conditions generally applicable to other members, or (B) if he
has reasonable grounds for believing that membership was denied or terminated for reasons other than the failure of the employee to
tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or retaining membership;
(4) to discharge or otherwise discriminate against an employee because he has filed charges or given testimony under this subchapter,
(5) to refuse to bargain colectively with the representatives of his employees, subject to the provisions of section 159(a) of this title.”
The folowing is the enumeration of the unfair labor practices by a labor organization: “tt shall be an unfair labor practice for a labor
organization
or its agents;
(1) to restrain or coerce (A) employees in the exercise of the rights guaranteed in section 157 of this title: Provided, That this paragraph
shall not impair the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership
therein; or (B) an employer in the selection of his representatives for the purposes of collective bargaining or the adjustment of grievances;
(2) to cause or attempt to cause an employer to discriminate against an employee in violation of subsection (a)(3) or to discriminate
against an employee with respect fo whom membership in such organization has been denied or terminated on some ground other than
his failure to tender the periodic dues and the inifiaton fees uniformly required as a condition of acquiring or retaining membership;
CO en enh SOR AKRON R Neaeeme nn
a) ;
(4) () to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting
commerce to engage in, a stike or a refusal in the course of his employment to use, manufacture, process, transport, or otherwise handle
or work on any goods, articles, materials, or commodities or to perform any services; or (i) to threaten, coerce, or restrain any person
engaged in commerce or in an industry affecting commerce, where in either case an object thereof is:
(A) forcing or requiring any employer or sell-employed person to join any labor
or employer organization
or to enter into any agreement
which is prohibited by subsection (e); ad *s =
(B) forcing or requiring any person to cease using, selling, handing, transporting, or otherwise dealing in the products of any other
Producer, processor, or manufaciurer, or to cease doing business with any other person, or forcing or requiring any other employer to
recognize or bargain with a labor organization as the representative of his employees unless such labor organization has been certified as
the representative of such employees under the provisions of section 159 of this title: Provided, That nothing contained in this clause (B)
shall be construed to make unlawful, where not otherwise unlawful, any primary strike or primary picketing;
(C) forcing or requiring any employer to recognize or baryain with a particular labor organization as the representative of his employees if
another labor organization has been certified as the representative of such employees under the provisions of section 159 of this file;
(D) forcing or requiring any employer to assign particular work to employees in a particular labor organization or in a particular trade, craft,
or dass rather tan to employees in another labor organization or in another trade, crafl, or class, unless such employer is failing to
Conform to an order or certification of the Board determining the bargaining representative for employees performing such work: Provided,
That nothing contained in this subsection shail be construed to make unlawtul a refusal by any person to enter upon the premises
of any
employer (other than his own employer), if the employees of such employer are engaged in a strike ratified or approved by a
representative of such employees whom such employer is required to recognize under this subchapter, Provided further, That for the
purposes of this paragraph (4) only, nothing contained in such paragraph shall be construed to prohibit publicity, other than picketing, for
the purpose of truthfully advising the public, including consumers and members of a labor organization, that a product or products are
/ THE LABOR CODE OF THE PHILIPPINES e
Article
258 [247]. Concept of Unfair Labor Practice and Procedure for Prosecution Thereof’ “
accorded to these provisions by the United States courts would serve as a reliable and
persuasive guidepost for Philippine courts to visit and consult and possibly follow in deciding
simliar Cases.
3. ULP HAS CRIMINAL CONSEQUENCES.

. Under the original rendering of the Labor Code, ULPs were deemed mere
administrative offenses sans any criminal implications. However, with the enactment of
Batas Pambansa Bilang 70 on May 1, 1980, its concept was completely changed - ULPs
were made criminal offenses. The Explanatory Note of Parliamentary Bill No. 386, which
subsequently became B.P. Big. 70, indicates the reason for criminalizing ULPs:
“Our experience in the field of labor relations of the last four years since
the Labor Code (P. D. 442) took effect on November 1, 1974, has shown that the
change in the concept of ‘unfair labor practice’ as outlined in Article 261 [250] of
the same, from ‘penal’ to ‘administrative’, has brought more harm than good.
“Emboldened by the law’s liberality, nay, inadequacy, irresponsible,
sometimes, vindictive employers, many of them aliens, ride high brazenly
committing such unfair labor practices. Legitimate unions and labor organizations,
most especially the weak and newly organized, easily get busted with impunity,
t
harassed or discriminated against, and terms and conditions of employmen
of the lack
retrogressing to sub-standard level instead of improving all on account
of effective deterrents to and penal sanctions against such pernicious practices.
“Add to this depressing spectacle the sight of many labor leaders and
violations of
active members getting arrested, detained or languishing in jails for
or for having brought the law
the ban on strikes, picketing or unlawful assembly,
for a single instance
into their own hands, while you grope in frustration looking
for having illegally
where an unscrupulous employer has suffered the same fate
losing jobs and their
locked-out his establishment resulting in countless workers
serve to undermine the
only means of live lihood. Situations such as these not only
one cancerous growth,
laudable gain achi eved by the New Society but, just like
will slowly but surely, eat up the very fiber of
our people’s faith in their
government and the efficacy of its laws.
to be instituted to
“Remedial legislative measures must therefore have
labor, necessary to bring
effectuate the equal, desirable balance between capital and
a primary dispute and are dstibuted by anciher employes, as Ing

produced by an employer with whom the labor orarizaion has employer in the course of
such publicity does not havean effect of inducing any individual employed by any person ofher than the primary
perform any services, at he esiabishment ofthe empioyer
hs employment fo relse b pick up, deve, or ransport any goods, or not ©
in suchge
enga ubon;
distribd t, as @ condion precedent to
i covered by an agreement authorized under subssecfon (2)(3) the paymen
inatory under all the
i | of a fee in an amount which the Board finds excessi or discrimve
Board shall consider, among olher relevan t factors, the practic es and customs of labor
ty paid to the employ ees affect ed
organizations inthe particular industry, and the wages curen
(6b cause or att io cause an emplo yer lo pay or dever or agree o pay ar delve any money or oher hing of vale inthe ner
an exacton, for services which are not performed or not lo beorperfor med; and
f cause fo be picketed, any employer where an object there! is forcing or
organization is currently certified as the representative of such employees: any other labor organization and a question
(A) where the employer has lawtully recognized in accordance with this subchapter tie,
cConcemingi representationmay not iately be raised under section 159(c) of this
(8) where within the preceding twelve months a valid election under section 159(c)159(c) of this tife has been conducted,or
(C) where such picketing has been conducted without a petiton under section of his boe beng fled wihin a reasonable period of
ime not b exceed thy days from the commencement of such pickeing: Provided, That when such a petiton has been fied the Board
shall forthwith, wihout regard to the provisions of secon 159(c)() ofthis ite o the absence of a showing of a substantia interest on the
Board fnds io be appropriate and shall cerfy the results thereof
pat of the labor orgenizafon, drect an election in such unt as the
Provided further, That nothing in this subparagraph (C) shall be construed to prohibit any picketng or other publ for he purpose of
of, or have @ contract with, a labor
tuthfully advising the pubic (including consumers) that an employer does nat employ members
organization, unless an effect of such picketing is to induce any individual employed by any paragraph
other person in the course of his employment,
(7) shall be construed to perm. arty
Not pick up, delver or anspor any goods or not io perform any services. Nothing n this
act which would otherwise be an unfair labor practice under this subsection.
ANNOTATED
peace. Hence, these proposals to

about a stable but dynamic and just industrial
- although, for a speedy, faster
restore the penal concept of ‘unfair labor practices’
ances arising therefrom, the
disposition of the more immediate labor relations griev
nue to be processed and resolved in
civil aspect of ULP complaints must still conti
as unlawful, all violations of the
mere administrative proceedings - and to declare
to provide adequate
right of workers and employees to self-organization in order
implementation of the
teeth for Article 303 [288]! of the Labor Code to grind along ry.”
unions in the count
declared State policy to encourage growth of trade
the court should
Consequently, in assessing whether a ULP exists in a given case,
be mindful not only of its civil but criminal consequences.”
ACT?
4. WHEN DOES AN UNFAIR ACT BECOME A ULP
cise by the employees of their right to
a. A ULP act should be related to the exer
or to the observance of a CBA.
self-organization and collective bargaining
an act or decision of an employer ora
At the outset, it must be clarified that while
inly not every such unfair or unjust act or
union may be patently unfair or even unjust, certa
understood, defined and enumerated under
decision may constitute ULP, as this term is provisions.‘ In
or in some of its other
Articles 259 [248] and 260 [249] of the Labor Code? e and causal
idered, the act complained of as ULP must have a proximat
order to be so cons
g constitutionally and legally protected
connection with the exercise of any of the followin
rights of employees:
(1) Right to self-organization;>
(2) Right to collective bargaining; or
a CBA.®
(3) Right to demand the enforcement and observance of
technical signification
Minus this connection, the unfair act does not fall within the
act complained of,
of the term “unfair labor practice.” Absent these vital elements, the may
the union
although seemingly unjust, would not constitute ULP.® Thus, an employer or er the
only be held liable for ULP if it can be shown that its act affects in whatever mann
afore-mentioned rights.°
b. Article 259(f) [248())], the only ULP not related to the exercise of the right to
self-organization and collective bargaining.
The only ULP which is the exception to the general rule as discussed above is the
act described under paragraph (f) of Article 259 [248], ie, to dismiss, discharge or
otherwise prejudice or discriminate against an employee for having given or being
+ Previously numbered Artide 289.

2 T &H Shopfitiers Corporation/Gin Queen Corporation v. T & H Shopfitiers Corporation/Gin Queen Workers Union, G.R. No. 191714, Feb.
26, 2014.
3 Galavie Steel Workers Union (GSWU-NAFLU-KMU] v. NLRC, G-R. No. 165757, Oct. 17, 2006; Great Pacific Life Employees Union v.
ee ede, Corporation, G.R. No. 126717, Feb. 11, 1999; Sterling Products Intemational, inc. v. Sol, G.R. No. L-19187,
oe
, meet ones A iraned Manik Mendoza v. Officers of Manila
seat ee tn ar. cana gnc hamatpitn

Raat ee Re ee i cennrnsatonci
; Fb, eer2 67ge naa fe in teriesrncer en
SORA14 41h cen les Ln HR Gebel Canmunkaton GR he tai, Ay17,
4 oes A ial cle Philippines, Inc., GR. No, 165381, Feb. 9, 2011; Great Pacific Life
THE LABOR CODE OF THE
Artic 258 [247]. Cinaoteg tach Leh Peds we promi je onalie Thereof 8
about to give testimony under the Labor Code.! Once committed, this act need not be
related to or connected with the exercise of the right to self-organization and collective
bargaining in order to be considered ULP.?
5, ELEMENTS OF ULP.
a. Requisites.
be said to have
. Before an employer or labor organization, as the case may be, may
committed a ULP, the following elements must concur:
1. There should exist an employer-employee relationship between the offended
party and the offender; and
2. The act complained of must be express/y mentioned and defined in the Labor
Code as ULP.
In the absence of any of the foregoing elements, the act is not ULP.
be committed in
The first requisite above is necessary because a ULP may only
collective bargaining
connection with the exercise of the twin rights to self-organization and
by employees. Necessarily, there must exist an employment relationship between the
to be validly
offender and the offended party in order for these protected organizational rights
and lawfully invoked.
Code itself requires
The second requisite above should be present since the Labor
that the ULP be “expressly defined by [this] Code. »3 It
follows therefore that if an act is not
tion and description of any of the
expressly defined or does not fall within the express defini
, strictly speaking, be deemed as
ULP acts mentioned and enumerated in the law, it cannot
such.
in accordance with
b. The act need not exactly be characterized and denominated
the precise language of the law.
eme Court had observed, the
It must be emphasized, however, that, as the Supr
of specifying in precise and unmistakable
Labor Code does not undertake the impossible task to the court the work of
r, it leaves
language each incident which constitutes ULP.4 Rathe infinite combinations of events
applying the law’s general prohibitory language in light of
s.°
which may be charged as violative of its term
be considered ULP, need not be described
This simply means that an act, in order to
in full accord with the precise languag e
of the law. For what matters really
and denominated
denomination of the act but that the act realistically
is not the characterization, description or
valently take such varying forms as
and reasonably constitutes ULP which may equi
“discrimination,” or any of the acts related to
“interference,” “restraint” or “coercion,” or acts.
tion of these
the duty to bargain collectively, or an amalgama
BE ALLEGED IN THE COMPLAINT.
6. ALL ACTS CONSTITUTING ULP MUST
itted during a given period
When a party accus es the other ofa ULP allegedly comm
of time, the charge should incl ude all acts constituting the ULP committed
during that period.
If it is a case, for instance, of a ULP charge by the union against the
employer, the union
on
should not, upon dismissal of the charge first proffe red, be allowed to split its cause of acti
' Philcom Employees Union v. Philippine Global Communications, supra.

Feb, 18, 2013, 691 SCRA 113.
2 PepsiCdla Philippines, inc v. Molen, GR. No, 175002,br OS Me
ie 219] 212) of Later Coe ees" prac’ "UL a hy ter aber pron ey
: Hongkong and Shanghai Banking Corpration Employees , Union v. NLRC, G.R. No. 125038, Nov.6, 1997, 281 SCRA S08
226.
Id; Republic Savings Bank v. Court of industrial Relations GR. No. L-20303, Sept. 27, 1967,21 SCRA
ANNOTATED
and harass the employer with subsequent charges based upon acts committed during the same
period of time.!
7. BURDEN OF PROOF IN ULP CASES.
The general principle is that the party who makes an allegation has the burden of
proving it. While there are exceptions to this general rule, in ULP cases, the alleging party has
the burden of proving the ULP;? and in order to show that a party, be it an employer or union,
committed ULP under the Labor Code, substantial evidence is required to support the claim.*
This strict principle finds justification in the fact that ULP is punishable with both civil and/or
criminal sanctions.‘
8. PARTIES WHO/WHICH MAY COMMIT ULPs AND BE LIABLE THEREFOR.
a. ULPs are committed by either the employer or the labor organization.
As earlier emphasized, a ULP may be committed by either an employer or a labor
organization. The various ULPs that may be committed by them are as follows:
(A) Employer’s ULPs:
1. Those enumerated under Article 259 [248] except its paragraph (i) which
involves violation of the CBA which is now qualified by Article 274 [261].5
2. Union-busting under Article 278(c) [263(c)].°
(B) Labor Organization’s ULPs:
1. Those enumerated under Article 260 [249] except its paragraph (f) which
involves violation of the CBA which is now qualified by Article 274 [261].’
b. Counterpart ULPs for both employers and labor organizations.
There are certain kinds of ULPs that, by their nature, have matching or counterpart
ULPs for both the employers and labor organizations. The following are examples thereof:
1) Restraint, or coercion of employees in the exercise of their right to self-
organization;*
2) Discrimination committed by the employer 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°and discrimination committed
‘Delfin v. Inciong, G.R. No. 50661, Dec. 10, 1990; Dionela v. CIR, GR. No. L-18334, Aug. 31, 1963.
2 Bankard, Inc. v. NLRC, G.R. No. 171664, March 8, 2013; UST Faculty Union v. UST, G.R. No. 180892, Apri 7, 2009 584 SCRA
656,
648. r ’
3 Tre re as atv. UST, supra, Standard Chartered Bank Employees Union (NUBE)
v. Confesor, GR. No. 114974, June 18, 2004,
: id, citing Article 258 [247], Labor Code.
Paragraph (i) ofc this article involving violation of: the CBA is now considered
n simply as a grievance except when itis
which case, it's to be treated as ULP per Artie 274 [261], Gross violation of CBA means flagrant and/or malicious gross in character,ini
: the economic provisions thereof, in accordance with Article 274 [261].
refusal comply
: =
Union-busting involves the dismissal from employment of union officers elected in accordance i i
laws, where the existence of the union is threatened thereby. = me Sanna
7 Paragraph
; (ofthis
) arte involving violation of‘ the CBA is now considered simply as a grievance except when
which case, itis to be treated as ULP per Aricle 274 [261]. Gross itis in character,ini
violatn of CBA means flagrant andlor malicous che ‘
ene in accordance with Article 274 [261]. ae oT
a) (248(a)] ULP of employers; Article 260(a) [249(a)] for ULP of labor organizations.
of "nterforence” i found in Article 259(a) [248(a)] but notin Article 260(a)[249(a)} It must be noted that the element
since the act ofthe union in “interfering” with the
may noe lowed eke wis Pes aot eae ret achieve the goad of se ergarizaton, While the erpoyer
allowed | terfere exercise by employees of such right, the union needs to “interfere” with
ight iin order to
such right
® See first sentence of Article 259(e) [248(e)] for ULP of employers.
mp THE LAB
IO cg ts
by the labor organization consisting in its act of causing or attempting to cause
an employer to discriminate against an employee;!
3) Violation of a CBA, when gross in character;?
4) Violation of the duty to bargain collectively; and
5) Payment by employer of negotiation or attorney’s fees and acceptance thereof
by the union or its officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute.‘
c. Persons criminally liable for ULP.
On the part of the employer, only the officers and agents of corporations,
associations or partnerships who have actually participated in or authorized or ratified theof
officers, members
ULPs are criminally liable.4 On the part of the union, only the
ions or organizations
overning boards, representatives or agents or members of labor associat
are criminally liable.*
sho have actually participated in or authorized or ratified the ULPs
consequences of his
A person who commits ULP must be made to shoulder all the be held
party to the case cannot
unfair acts.’ A person, however, who is not impleaded as a
liable therefor.®
9, COMPROMISE OF ULP CASES.
ral rule, not subject to
In view of the public interest involved, ULPs are, as a gene
labor is not merely contractual as it is so
compromise. The relation between capital and
must yield to the common good.”
impressed with public interest that labor contracts subject of a
ruled that a ULP case can be the
However, in earlier cases, the Supreme Court
because of the policy of the State to promote
compromise agreement. This rule is acceptable
management by mutual apreement.’® Indeed,
the settlement of differences between labor and the
a compr omise agree ment be entere d into between management and the union for
should former, the
a ULP case filed by the latter against the
withdrawal and consequent dismissal of such
union, including the minority who opposed
same is binding on all members of the
agreement."
DI.
OF ULP
ASPECTS
1. TWO (2) ASPECTS OF ULP.
(2)
(2) aspects, namely: (1) civil aspect; and
Under Article 258 [247], ULP has two
criminal aspect.
cause ater cree 9) STR

bor rarzatns, Ts pros sls “To in such oranieason
‘ so pavise 20) PAR) or ULP of mina fin agan st an employee wi respe ct o whom memb ersh ip
an ducin g ceor tions under which membership or
discnminate against ground ofher than the usual lems and condi
d or to termi nate an empl oyee on any -
has been derie memb ers;
continuation of membership is made avalable to other 260) P40] fr ULP oar ogarzatons, These procs as now eae
LP of enpl jes; Ae
a Ca a CBA by either the employer or the labor
274 [261] which considers simple :Violation of the
another provision of the Labor Code, Article is lobe tesa as (LP pos OS
vanc e exep t wen ti as charac, wich case, niznce win vane
ence ve
andr mal s reis e compl y wi fhe economic press eres, acza
crarizaon sire ant
274 (261). organizations
oyes; Arle 260() 2400) for ULP of iebor xpanizaons.
, Soe sve 250()4Bl}|fr ULP of empl Arles 260¢) [249()] for ULP ol labor
: See arte 259) [48h Code.fr ULP of employers;
5 Article 259 [248] , Labor
: Article 260 [249], Ibid. 739, Dec. 24, 1964, 12 SCRA 599.
Htogon-Suyoc Mines, Inc.v. Baldo, G.R. No. L-17 “ation, GR. Nos. L-2017Dec. , , 12 SCRA 694.
811964
9-28,
6
Lopezv. Chronicle Publications Emplayees 1988; AFP Mutu al Benefit Assocation, Inc. v. AFP-MBAFEU,
9
CLLCE. G. Gochangco Workers Union v. NLRC , GR No. 67158, May 30,
732.
GR Nos. 39140 and 39145, May 17, 1980, 97 SCRAL-26715, 169, March 1, 1979, 89 SCRA 1.
on
r al
Corpo ratio n v. NPCE WA, G.R. No. 82, Jan. 27, 1997, 266
it Nati Powe mist Union of RB. Liner, Inc. v. NLRC, G.R. No. 1204
Dionelav, CIR, GR. No. L-18334, Aug. 31, 1963; Refor
SCRA 713, 724-725.
ANNOTATED
III-A.
CIVIL ASPECT OF ULP
1, COVERAGE OF THE CIVIL ASPECT OF ULP.

The civil aspect of ULP includes claims for actual, moral and exemplary damages,
attorney’s fees and other affirmative reliefs.!
2. JURISDICTION OVER THE CIVIL ASPECT OF ULP.
Generally, the civil claims mentioned above should be asserted in the proceedings
in the labor case filed before the Labor Arbiters who have original and exclusive jurisdiction
over ULPs. The only exceptions when the Labor Arbiters do not have jurisdiction over the
civil aspect of ULPs are as follows:
1. When the DOLE Secretary or the President of the Philippines exercises the
powers vested in them under Articles 278(g) [263(g)]? and 279 [264]° of the Labor Code.
These powers principally refer to the assumption of jurisdiction or certification to the NLRC
of national interest disputes by the DOLE Secretary or by his principal, the President of the
Philippines, who is himself not precluded from intervening at any time and assuming
jurisdiction over any such labor dispute in order to settle or terminate it.
2. When the parties mutually agree to submit the issue of ULP for voluntary
arbitration before a Voluntary Arbitrator or Panel of Voluntary Arbitrators under Article 275
[262]§ of the Labor Code.
3. PERIOD TO RESOLVE THE CIVIL ASPECT OF ULP.
The Labor Arbiters or any other appropriate agencies® which may validly exercise
original jurisdiction over ULP cases, are required to give utmost priority to the hearing and
resolution of all cases involving ULPs. They should resolve such cases within thirty (30)
calendar days from the time they are submitted for decision.’
4, RECOVERY OF CIVIL LIABILITY UNDER THE LABOR CODE BARS
RECOVERY THEREOF UNDER THE CIVIL CODE.
Once recovery of the civil liability is made under the Labor Code, the same shall
operate to bar recovery for the same civil liability under the Civil Code®
5. AN ILLEGALLY DISMISSED EMPLOYEE WHOSE DISMISSAL IS TAINTED
WITH ULP IS ENTITLED TO MORAL AND EXEMPLARY DAMAGES.
A finding of ULP done in bad faith carries with it the sanction of moral and
exemplary damages.’ Depending on the factual milieu, jurisprudence has awarded varying
amounts as moral and exemplary damages to illegally dismissed employees when the
1 See Ariicle 258 [247], Labor Code.

? Paragraph (g) of this arte states in part as follows: “When, in his opinion, there exists a labor dispute causing or likely to cause a stike or
lockout in an industy indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the Commission for compulsory arbitration. xox The foregoing notwithstanding, the President
of the Philippines shall not be precluded from determining the industries that, in his opinion, are indispensable to the national interest, and
from intervening at any time and assuming jurisdiction over any such labor dispute in order to settle or terminate the same.”
> This arficle provides, to wit “No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after
Cettfication or submission of the dispute fo compulsory or voluntary arbitration or during the pendency of cases involving the same
grounds for the strike or lockout.”
4 See Article 258 [247] in relation to Article 278 (263), Labor Code,
5 This arficle states: “Aride 275 [262]. Jurisdiction over other labor disputes, The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks."
5 Referring to labor authoribes other than Labor Arbiters under Article 224 [217], such as Voluntary Arbitrators under Article 275 (262),
or the
DOLE Secretary under Article 278(g) [263(9)}.
7 See Article
258 [247], ibid.
® National Union of Bank Employees v. Hon. Judge Alfredo Lazaro, G.R. No. L-56431, Jan. 19, 1988,
° Hacienda Fatima v. National Federation of Sugarcane Workers-F ood and General Trade, GR. No, 149440, Jan.
28, 2003.
Artie 28 (247), Cc of Uf Laer Pre and Proscar Prenon Thar "
dismissal is attended by bad faith or fraud; or constitutes an act oppressive to labor, or is done
in a manner contrary to good morals, good customs or public policy; or if the dismissal is
effected in a wanton, oppressive or malevolent manner.' Thus, in Nueva Ecija,” the High
Court found it proper to award moral and exemplary damages to illegally dismissed
employees as their dismissal was tainted with ULP.
This ruling was reiterated in the following cases involving ULP:
1. Quadra v. The CA,? where the dismissal of the employees was found to have
been done to interfere with, restrain or coerce them in the exercise of their right
to self-organization.
2. Purefoods Corp. v. Nagkakaisang Samahang Manggagawa ng Purefoods Rank-
and-File,4 where the dismissal of the employees was brought about by the
closure in bad faith of petitioner’s Sto. Tomas, Batangas farm.
3. Digital Telecommunications Philippines, Inc. v. Digitel Employees Union
(DEU),5 which involves the closure in bad faith of Digiserv, a department of
petitioner company, resulting in the dismissal of the employees therein.
6. AWARD OF MORAL AND EXEMPLARY DAMAGES IN ILLEGAL
DISMISSAL RESULTING FROM ULP MAY BE MADE IN INDIVIDUAL OR
AGGREGATE AMOUNT.
The Supreme Court has awarded moral and exemplary damages to illegally
dismissed employees occasioned by ULP either in lump sum or individually. It appears that if
the total number of the illegally dismissed employees is not determined with certainty, the
award of moral and exemplary damages is granted in their aggregate amount; otherwise it is
given on an individual basis. Purefoods® is the best illustrative case where the award for
moral and exemplary damages was granted in their aggregate amount. The illegally
dismissed union members were awarded the total sum of ?500,000.00 for moral and
exemplary damages. Distinguishing Purefoods from the 2012 case of Digital’ where each of
the 13 illegally dismissed employees were awarded P 10,000.00 and P5,000.00 as moral and
exemplary damages, respectively, the High Court pronounced as follows:
“In the recent case of Purefoods Corporation v. Nagkakaisang
Samahang Manggagawa ng Purefoods Rank-and-File, we awarded the aggregate
amount of P500,000.00 as moral and exemplary damages to the illegally dismissed
union member-employees which exact number was undetermined.
“In the case at hand, with the Union’s manifestation that only 13
employees remain as respondents, as most had already accepted separation pay,
and consistent with our finding that Digitel committed an unfair labor practice in
violation of the employees’ constitutional right to self-organization, we deem it
proper to award each of the illegally dismissed union member-employees the
amount of P10,000.00 and P5,000.00 as moral and exemplary damages,
respectively.”
7, LIABILITY OF UNION OFFICERS FOR MORAL & EXEMPLARY DAMAGES
AND ATTORNEY’S FEES FOR COMMITTING ULP.
on Article
see discussion on this topic in the Nofes and Comments
(NOTE: Please
260 [249], under the sub-topic entitled “VIIl. CRIMINAL AND CIVIL LIABILITY FOR
ULPs OF LABOR ORGANIZATION,” infra).
Woodrid School v. Pege Benito, G.R. No. 160240, Oct. 29, 2008,570 SCRA 164, 186.
Jan. 24, 2000, 323 SCRA 86.
Nueva Ecija | Electric Cooperative, Inc. (NEECO |) Employees Association v. NLRC, G.R. No, 116066,
GR_No. 147593, July 31, 2006.
GR No, 150896, Aug, 28, 2008.
GR_Nos, 184903-04, Oct. 10, 2012.
gawa
ng Purefoods
Purefoods Corp. v. Nagkakaisang Samahang Mangga Rank-and-File, G.R. No, 150896, Aug. 28, 2008.
Digital Telecorimunications Philippines, Inc.v. Digitel Employees Union (DEU), G.R. Nos. 184903-04, Oct. 10, 2012.
ANNOTATED
II-B.
CRIMINAL ASPECT OF ULP
1. RATIONALE FOR TREATING ULP AS A CRIME.

A consideration of the entire law on the matter clearly discloses the intention of the
lawmaker to consider acts which are alleged to constitute ULPs as violations of the law or
offenses, to be prosecuted in the same manner as a criminal offense. The reason for this
provision is that the commission of ULP is an offense against a public right or interest and
should be prosecuted in the same manner as a public offense.’
By the very nature of ULP, it is not only a violation of the civil rights of both labor
and management but is also a criminal offense against the State which is subject to
prosecution and punishment.? Essentially, a complaint for ULP is no ordinary labor dispute
and therefore requires a more thorough analysis, evaluation and appreciation of the factual
and legal issues involved.>
2. DISTINCTION OF ULP FROM ORDINARY VIOLATION OF CONTRACTUAL
OBLIGATION.
The reason for the distinction between a ULP case and a mere violation by an
employer of its contractual obligation towards an employee is that, as earlier stated above,
ULP cases involve violations of a public right or policy to be prosecuted like criminal
offenses; whereas a breach of an obligation by an employer to his employee is only a
contractual breach to be redressed like an ordinary contract or obligation.‘
3. JURISDICTION OVER THE CRIMINAL ASPECT.
Any criminal offense punished under the Labor Code is under the concurrent
jurisdiction of the Municipal or City Courts and the Regional Trial Courts.*
4. WHEN CRIMINAL PROSECUTION FOR ULP MAY BE INITIATED.
As far as the criminal aspect of ULP is concemed, it is required that a ULP case
should first be filed as a labor case before the appropriate agency.® Criminal case for the same
ULP may only be instituted after a final judgment finding that ULP was indeed committed is
obtained in the labor case. Absent such pre-requisite final judgment in the labor case,” no
criminal prosecution may be instituted against the offender.
5, EFFECT ON PRESCRIPTIVE PERIOD.
While generally, offenses penalized under the Labor Code and the mules and
regulations issued pursuant thereto prescribe in three (3) years, all complaints for ULP are
required to be filed with the appropriate agency* within one (1) year from the accrual thereof;
otherwise, they shall be forever barred.’ During the pendency of the proceedings in the labor
era
case for ULP, the running of the period of prescription of the criminal offense for the same
act constituting the ULP is considered interrupted. Hence, if the labor case reaches the
RR
National Labor Union v. Insular-Yebana Tobacco Corporation, G.R. No. L-15363 July 31, 1961.
en =
tacking a Shanghal Banking Corporation Employees Union NLRC, G.R. No. 125038, Nov. 6, 1997, 281 SCRA 509.
2
fio
id: To thisoe oe.has been the express ruling in the United States in the case of National Labor Relations Vv. . Newark Moming Co., 120 F
effect
=
Article 303 [288], Labor Code.

& SE ea aetna
A judgment is considered final if it finally disposes of the action or proceedings. For instance,
if the remedy of appeal is available
apped is instituted, then, the judgment is deemed final and , ° . Bee
& ee eas ea eee
Oe
See Article 305 [290], Labor Code.

THE ae
Article 258 [247], ee Pair acd Pecan jar Poanediog Yi °
Supreme Court, it is only upon the rendition of a final judgment therein by the Highest Court
that the running of the one (1) year prescriptive period will commence.'
6. EVIDENTIARY WEIGHT OF THE FINAL JUDGMENT FINDING ULP IN THE
LABOR CASE.
The final judgment in the labor case holding that a ULP has been committed is not
binding in the criminal case; nor is it considered as evidence of guilt but merely as proof of
compliance with the pre-requisite that the labor case over the same ULP has been instituted
and that a final judgment therein was rendered prior to the initiation of the criminal action.
Not having any evidentiary value in the criminal proceeding, the criminal charge for ULP
should be proved independently from the labor case.
(NOTE: For a more comprehensive discussion on how a criminal case for ULP may be
initiated and prosecuted, please refer to the Notes and Comments on Articles 303 [288F and
305 [290F found in Volume Ill of this 3-Volume series on the Labor Code by the author).
1 Aricle
258 [247], Ibid
2 Entitled “Penalties.”
3 "Artie 305 [290]. Offenses. ~ Offenses penalized under this Code and the rules and regulations issued pursuant thereto shal prescribe
in three (3) years.
“Al unfair labor practices arising fram Book V shall be filed with the appropriate agency within one (1) year from accrual of such unfair
labor practice; otherwise, they shall be forever barred."
676
Chapter U
UNFAIR LABOR PRACTICES OF
EMPLOYERS
Article 259 [248]. Unfair Labor Practices of Employers. — It
following
shall be unlawful for an employer to commit any of the
unfair labor practices:
yees in the
(a) To interfere with, restrain or coerce emplo
exercise of their right to self-organization;
that a person
(b) To require as a condition of employmentorgan ization or
or an employee shall not join a labor
shall withdraw from one to which he belongs;
performed
(c) To contract out services or functions being
with,
by union members when such will interfere
of their
restrain or coerce employees in the exercise
rights to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with
the formation or administration of any labor
organization, including the giving of financial or other
support to it or its organizers or supporters;
(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. Nothing in this Code or in any other law
shall stop the parties from requiring membership in a
recognized collective bargaining agent as a condition for
employment, except those employees who are already
members of another union at the time of the signing of
the collective bargaining agreement. Employees of an
appropriate bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid
by members of the recognized collective bargaining
agent, if such non-union members accept the benefits
under the collective bargaining agreement: Provided,
that the individual authorization required under Article
250 [241], paragraph (0) of this Code shall not apply to
the non-members of the recognized collective bargaining
agent;
(f To dismiss, discharge or otherwise prejudice or

discriminate against an employee for having given or
being about to give testimony under this Code;
To violate the duty to bargain collectively as prescribed
by this Code;
(h) To pay negotiation or attorney’s fees to the union or its
officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute; or
Wes
Barner
ian
THE LABOR CODE OF THE PHILIPPINES 77
Article 259 [248]. Unfair Labor Practices
of Employers
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding,

only the officers and agents of corporations, associations or
partnerships who have actually participated in, authorized or ratified
unfair labor practices shall be held criminally liable.’
NOTES AND COMMENTS
INTRODUCTION
1. CATEGORIES OF EMPLOYER’S BEHAVIOR CONSTITUTING ULP.

Article 259 [248] lays down the nine (9) major categories of behavior for which an
employer may be charged for ULP, enumerated from paragraphs (a) to (i) therein. They are
all discussed in this section.
It must be noted that most of the categories of ULPs mentioned in this article are not
of Philippine origin. Five of the enumerated categories in this article, particularly, paragraphs
(a), (d), (e), (f) and (g) thereof, were substantially copied from similar provisions in the
National Labor Relations Act (NLRA) of the United States? Hence, the jurisprudential
interpretation and construction accorded to these ULPs by the judiciary of the United States
would be very helpful, nay, persuasive, in construing and interpreting the same provisions in
the Labor Code. As a consequence of this, some relevant pieces of U.S. jurisprudence, not to
mention authoritative literatures on pertinent U.S. laws and decisions, are cited in this book to
give a better insight and perspective of the legal principles and tenets discussed herein.
2. ORDER OF TOPICAL PRESENTATION.
The major topics discussed in this section are as follows:
I. INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES IN THE
EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
ll. | YELLOW DOG CONTRACT
Ill. CONTRACTING OUT OF SERVICES AND FUNCTIONS
IV. COMPANY UNION
V. THREE SEPARATE CONCEPTS TREATED IN PARAGRAPH (E), ARTICLE 259 [248]
VL. FILING OF CHARGES OR GIVING OF TESTIMONY
Vil. CBA-RELATED ULPs
Vill. BURDEN OF PROOF IN ULP CASES UNDER ARTICLE 259 [248)
IX. PERSONS CRIMINALLY AND CIVILLY LIABLE FOR ULPs OF EMPLOYER
1.
INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
1. RIGHT OF EMPLOYERS TO PARTICIPATE IN OR OPPOSE UNION
ACTIVITIES.
As a general rule, employers do not have the right to participate in union activities
nor do they have any right to oppose them. It is prohibited as an act of ULP under paragraph
(a) of Article 259 [248] if such participation or opposition is intended “to interfere with,
restrain or coerce employees in the exercise of their right to self-organization.” The
‘As amended by Batas Pambansa Bilang 130, August 21, 1981; As renumbered pursuant to Section 5, RA. No, 10151, June 21, 2011
and DOLE Department Advisory No. 01, Series of 2015 (Renumbering of the Labor Code of the Philippines, as Amended), issued on July
21, 2015.
2 More particularly, National Labor Relations Act, 29 U.S. Code § 158 - Unfair labor practice, Sec. 8(a) (1) to (5).
67a LAW ON LABOR RELATIONS
ANNOTATED
enumerated acts in this article constitute the legal restrictions on the kinds of actions
employers can take. Violations of this law are called ULPs.!
exercise of
The phrase “to interfere with, restrain or coerce employees in the
their right to self-organization.” means it is ULP for an employer to prohibit the free
discussion by its employees of their desire and intent to organize a union or to implement
retaliatory policies and rules or actually commit vengeful actions against an employee for
self-
trying to organize a union. This is so because an employee, pursuant to his constitutional
the
organization right, can generally do and perform any organizational work anywhere in
by the
workplace, unhampered and undeterred by any limitations that may be imposed
otherwise smooth
employer except that the same should not disrupt the establishment's
operation and production.
granted
Union organizers representing a federation or a national union are usually
and
access to certain areas in the workplace, such as the parking lot, canteen, locker rooms,
the employe r’s
the like, to do organizational work for as long as it does not disrupt or disturb
to the prospective union
operation and production. Organizational work includes talking
members, handing out leaflets, information kits and other reading materials.
2. EMPLOYER’S RIGHT TO FREE SPEECH.
form of
Since the general policy of the law is to insulate employees from any
of their organizational
interference, restraint or coercion by an employer in the exercise
freedom of speech and of
rights, a question may be posed: Can the employer, pursuant to his
as owner of the business
expression, not to mention his dominical and proprietary right
of the union at its
establishment, criticize, condemn or openly oppose the creation
organizational stage?
“free
In the United States, there is a law, the Taff-Hartley Act,’ which contains a
nt, or opinion, or the
speech clause,” providing that “[t]he expressing of any views, argume
shall not constitute
dissemination thereof, whether in written, printed, graphic, or visual form,
threat of reprisal or
or be evidence of an unfair labor practice, if such expression contains no
er neutrality in the
force or promise of benefit.” This law revised the requirement of employ
pursuant to
Wagner Act,‘ to allow employers to make anti-union messages in the workplace, n
they do not threate
their constitutional right to express their opposition to unions, so long as
to employees as an
employees with reprisals for their union activities nor offer any incentives
alternative to unionizing.
h by
There is no similar Jaw in the Philippines expressly recognizing free speec
that
employers in the same nature and manner as prescribed in the Taft-Hartley Act.* It seems
when the pertinent principles in the United States’ labor statutes were copied and
interfere
Atticle 259(a) (248(a)] of the Labor Code traces its roots from a U.S. law which provides that it shal be ULP of an employer °(1) fo
_
with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 157 of this ttte[ (See National Labor Relations Act,
29 U.S. Code § 158 - Unfair labor practices, Sec. 8{a] [1] thereof).
2 The Labor Management Relations Act of 1947, also known as the “Taft-Harlley Act” was enacted on June 23, 1947. Itis a United States
federal law that restricls the activities and power of labor unions. One of the amendments it introduced to the National Labor Relations Act
of 1935 pertains to the free speech doctrine quoted herein. This law revised the required employer strict neutrality provided orginally in the
Wagner Act,
3 More particularly, 61 Stat. 142 (1947); Natonal Labor Relations Act, 29 U.S. Code § 158 - Unfair labor practices, Sec. 8{c) (1958).
4 The Nafonal Labor Relations Act af 1935, better known as the “Wagner Act,” is a labor law in the United States which guarantees the
conditions at
basc rights of private sector employees to organize into trade unions, engage in collective bargaining for better terms and
work, and lake collective action including strike, if necessary.
Relatons Board
5 Although this amendatory Taft-Hariey Act also grants employers the right to file a petiion asking the National Labor
of the
(NLRB) to determine if a union represents @ majarily of its employees. This principle is copied and replicated in the Labor Code
Philippines as Artie 270 [258] entitled “When an Employer May File Petition.”
Article 259 [248]. Unfair Labor Practices of Employers
incorporated into the Philippine Labor Code, certain employer rights did not merit the
attention and consideration of its author,' one of which is this free speech doctrine.
It is believed that although this clause is not found in the Labor Code nor in any
Philippine statute, the employer may be allowed a modicum amount of free speech subject
only to a similar limitation that the same be not accompanied with any threat of reprisal or
promise of benefit.
As it stands now, the employer whose establishment is being unionized, has to
maintain strict neutrality as to completely refrain, nay, restrain himself, from making any
statements, views, arguments or opinions, no matter how innocuous they may be, on the
creation of the union, lest he be charged for interfering with, restraining or coercing his
employees in the exercise of their protected right to self-organization, specifically the right to
form, join or assist a labor organization. In fact, in order to maintain the required strict
neutrality, the employer has to pretend that he is unaware that a union is being organized in
his establishment and if queried about it, he has to present an oblivious countenance and
unmindful and ignorant stance, otherwise, any expression of even the most harmless opinion
would be taken as evidence of his anti-union bias and animus, thus, constitutive of the act of
“interfering with, restraining or coercing employees in the exercise of their right to self-
organization.” He has to assume the role of a complete bystander,’ or at least pretend to be
one, otherwise, he would be charged for and declared guilty of ULP.
3. THE INSULAR LIFE DOCTRINE: TEST TO DETERMINE INTERFERENCE,
RESTRAINT OR COERCION.
The terms “interfere,” “restrain” and “coerce” in paragraph (a) of Article 259 [248]
or
are very broad that any act of management that reasonably tends to have an influence
effect on the exercise by the employees of their right to self-organization may fall within their
meaning and coverage.
According to the leading case of Insular Life,‘ the test of the employer's
interference with, restraint or coercion of employees within the meaning of the law is
whether the employer has engaged in conduct which may reasonably tend to interfere with
ning.
the free exercise of the employees’ twin rights to self-organization and collective bargai
ined,
It is not necessary that there be direct evidence that any employee was in fact restra
intimidated or coerced by the statements or threats of the employer; what matters is that there
e
is a reasonable inference that the anti-union conduct of the employer does have an advers
effect on the exercise of said rights.
However the act is called or denominated - whether as interference, restraint or
coercion, or as a discriminatory discharge, or as a refusal to bargain, or even as acombination
of any or all of these - is of no consequence. What is important is that the act constitutes
ULP.5 Determining the validity of an employer's act involves an appraisal of his motives.
However, motivations are seldom expressly avowed and avowals are not always candid.
There must be a measure of reliance on the appraisal of evidence by the administrative
1 The Labor Code’s author was former President Ferdinand E. Marcos, who promulgated it as Presidential Decree No. 442 on May 1,
1974."
2 For instance, promising benefits to employees to discourage their union support also violates the law and constitutes ULP.
q The term “employer as bystander” is now enshrined as a legal principle in Avtide 2711 [258-A], entited “Employer as Bystander,” thus: “In
all cases, whether the petition for cerffcation election is filed by an employer or a legitmate labor organization, the employer shall not be
considered a party thereto with a concomitant right lo oppose a petition for certification election. The employer's participation in such
proceedings shal be limited to: (1) being notified or informed of petitions of such nature; and (2) submiting the Ist of employees during the
pre-election conference should the Med-Aybiter act favorably on the petiion.” (As inserted into the Labor Code by Section 12, R.A. No.
9481, which lapsed into law on May 25, 2007 and became effective on June 14, 2007; As renumbered pursuant to Section 5, R.A. No.
10151, June 21, 2011).
Co., Lid., G.R. No. L-25291, Jan. 30, 1971, 37
Co., Lid., Employees Association-NATU v. insular Life Assurance
4 Insular Life Assurance
SCRA 244.
5 Republc Savings Bank v. CIR, G.R. No. L-20303, Sept. 27, 1967, 21 SCRA 226.
ANNOTATED
agency. It is for the labor tribunal, in the first instance, to weigh the employer's expressed
motive in determining the effect on the employees of management’s otherwise equivocal act.
The significant point to consider, for a charge of ULP to prosper, is that itmust be
shown that the employer’s act 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 therefrom." It
bears emphasis, however, that according to jurisprudence, basic is the principle that good
faith is presumed and he who alleges bad faith has the duty to prove it. By imputing bad faith
to the actuations of the employer, the employee has the burden of proof to present substantial
evidence to support the allegation of ULP. Should he fail to discharge this burden, his bare
allegations deserve no credit.?
In accordance with the Jnsular Life test, the following acts of petitioners, in the 2014
case of T & H Shopfitters,) were declared as “all reek[ing] of interference on the part of
petitioners,” namely: (1) sponsoring a field trip to Zambales for its employees, to the
exclusion of union members, a day before the scheduled certification election; (2) the active
campaign by the sales officer of petitioners against the union prevailing as a bargaining agent
during the field trip; (3) escorting its employees after the field trip to the polling center, (4)
the continuous hiring of sub-contractors performing respondents’ functions; (5) assigning
union members to the Cabangan site to work as grass cutters; and (6) the enforcement of
work on a rotational basis for union members.
In declaring petitioners guilty of ULP, the Court held that indubitably, the above
various acts of petitioners, taken together, reasonably support an inference that, indeed, such
were all orchestrated to restrict respondents’ free exercise of their right to self-organization.
Petitioners’ undisputed actions prior and immediately before the scheduled certification
election, while seemingly innocuous, unduly meddled in the affairs of its employees in
selecting their exclusive bargaining representative. This goes against the earlier ruling in Holy
Child that a certification election is the sole concern of the workers, save when the employer
itself has to file the petition, but even after such filing, its role in the certification process
ceases and thus becomes merely a by-stander. Thus, petitioners had no business persuading
and/or assisting their employees in their legally protected independent process of selecting
their exclusive bargaining representative. The fact and peculiar timing of the field trip
sponsored by petitioners for their employees not affiliated with respondent THS-GQ Union,
although a positive enticement, was undoubtedly extraneous influence designed to impede
respondents in their quest to be certified. This cannot be countenanced.
Not content with achieving a “no union” vote in the certification election,
petitioners launched a vindictive campaign against union members by assigning work on a
rotational basis while sub-contractors performed the latter’s functions regularly. Worse, some
of the respondents were made to work as grass cutters in an effort to dissuade them from
further collective action. Again, this cannot be countenanced.
4. TOTALITY OF CONDUCT DOCTRINE.
In ascertaining whether the act of the employer constitutes interference with,
restraint or coercion of the employees’ exercise of their right to self-organization and
collective bargaining, the “totality of conduct doctrine” may be applied. Because of its nature
1 Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc. [G.R. No. 162025, August 3, 2010, citing Union of Filipro
Employees-Drug, Food and Alied Industries Unions-XMU v. Nestlé Philippines, Inc., G.R. Nos. 158930-31 & 158944-45, March3, 2008,
547 SCRA 323, 335; San Miguel Corporation
v. Del Rosario, G.R. Nos. 168194
& 168603, Dec. 13, 2005, 477 SCRA 604, 619,
7 Culliv. Eastem Telecommunications Philippines, Inc., G.R. No. 165381, Feb. 9, 2011; Central Azucarera De Bais Employees Union-NFL
[CABELLNFL] v, Central Azucarera Da Bais, Inc. [CAB], G.R. No. 186605, Nov. 17, 2010.
3 T&H Shopfitiers Corp//Gin Queen Corp. v. T & H Shopfitters Corp./Gin Queen Workers Union, G.R. No. 191714, Feb. 26, 2014.
4 Holy Child Catholic School v. Hon. Patricia Sto. Tomas, G.R. No. 179146, July 23, 2013.
THE LABOR CODE OF THE PHILIPPINES ont
Article 259 (248]. Unfiir Labor Practices of Employers
and consequences, a finding of ULP should not be made based alone on the cited ULP act
considered in isolation but should be viewed on the basis of the employer's act outside of the
bigger context of the accompanying labor relations situation. Any perceived act of
interference must be examined in terms of the act’s inherent import and effects, in light of the
surrounding circumstances, and weighed on the basis of the totality of the conduct of the
entity charged. These circumstances include the factual setting of the alleged interference, the
parties-in-interest or “players” whose interests should be considered in viewing the alleged
ULP, the circumstances of the entity charged, particularly its record of anti-union animus, the
circumstances of the accuser, particularly whether its own hands are clean, and the presence
or absence of prejudice or real violation of the employee’s right to self-organization."
In viewing the “players” and their interests, consideration cannot be limited to a
strictly bi-partite relationship between the union and management. While the union
represents the employees in a unionized setting, the latter - on their own - are live parties with
rights to protect, not only against management, but even against their union. The law itself
recognizes this role of the employees through provisions protecting them from their union.”
The union, on the other hand, is merely the agent of the employees in their collective
bargaining effort with their employer.’
The totality of conduct doctrine means that expressions of opinion by an employer,
tances
though innocent in themselves, may be held to constitute ULP because of the circums
anti-
under which they were uttered, the history of the particular employer’s labor relations or
or
union bias or because of their connection with an established collateral plan of coercion
in the
interference. An expression which may be permissibly uttered by one employer might,
as a
mouth of a more hostile employer, be deemed improper and consequently actionable
ULP.‘ The past conduct of the employer and like considerations, coupled with an intimate
s of the
connection between the employer’s action and the union affiliation or activitie
as to the
particular employee or employees taken as a whole, may raise a suspicion
reason
motivation for the employer’s conduct. The failure of the employer to ascribe a valid
ar
therefor may justify an inference that his unexplained conduct in respect of the particul
employee or employees was inspired by the latter’s union membership and activitie s.*
In Carmelcraft§ petitioner company invoked as reason to justify the cessation of its

operations the fact that it sustained losses in the small amount of P 1,603.88 as of December
31, 1986. There is no report, however, of its operations during the period after that date, that
is, during the succeeding seven and a half months before it decided to close its business.
Significantly, the company is capitalized at P3 million. Considering such a substantial
investment, a loss of the paltry sum of less than P2,000.00 could hardly be considered serious
enough to call for the closure of the company. This justification is hardly credible; in fact, it is
preposterous when viewed in the light of the other relevant circumstances. The real reason for
the decision of the petitioners to cease operations was the establishment of respondent
Carmelcraft Employees Union. It was apparently unwelcome to the corporation which would
rather shut down than deal with the union. The company had in fact suggested that it might
decide not to close the business if the employees were to affiliate with another union which
the management preferred. The act of the petitioners was ULP prohibited by law.
"Se Dissenting Opinion of Mr. Justice Arturo D, Brion in De la Salle University and Dr. Quebengco v, De la Salle University Employees
Association [DLSUEA- G.R.NAFTEUI,
No. 177283, April 7, 2009.
2 Article 250 [241], Labor Code.
3 Article267 [255], bid.
«Insular Life Assurance Co., Lid, Employees Association-NATU, v. Insular Life Assurance Co., Lid, supra; Samahan ng Manggagawa sa
Bandolino-LMLCv. NLRC, G.R. No. 126195, July 17, 1997, 275 SCRA 633,
5 Royal Undergament Corporation of the Philippinesv. CIR, G.R. No. L-39040, June6, 1990.
® Cammelcraft Corporation v. NLRC, G.R. Nos. 90634-35, June 6, 1990, 186 SCRA 393.
= LAW ON LABOR RELATIONS
ANNOTATED
In General Milling,’ the Supreme Court considered the act of the employer in
presenting the letters from February to June 1993, by 13 union members signifying their
resignation from the union clearly indicative of the employer’s pressure on its employees.
The records show that the employer presented these letters to prove that the union no longer
enjoyed the support of the workers. The fact that the resignations of the union members
occurred during the pendency of the case before the Labor Arbiter shows the employer’s
desperate attempt to cast doubt on the legitimate status of the union. The ill-timed letters of
resignation from the union members indicate that the employer had interfered with the right
of its employees to self-organization. Because of such act, the employer was declared guilty
of ULP.
In Hacienda Fatima,” the Supreme Court upheld the factual findings of the NLRC
and the CA that from the employer’s refusal to bargain to its acts of economic inducements
resulting in the promotion of those who withdrew from the union, the use of armed guards to
prevent the organizers to come in, and the dismissal of union officials and members, one
cannot but conclude that the employer did not want a union in its hacienda - a clear
interference in the right of the workers to self-organization. Hence, the employer was held
guilty of ULP.
In De Leon, it was held that based on the facts, there is sufficient ground to
conclude that respondents were guilty of interfering with the right of petitioners to self-
organization which constitutes ULP. Petitioners, who are security guards, have been
employed with Fortune Integrated Services, Inc. (FISI) since the 1980’s and have since been
posted at the premises of Fortune Tobacco Corporation (FTC) — in its main factory plant, its
tobacco redrying plant and warehouse. It appears from the records that FISI, while having its
own corporate identity, was a mere instrumentality of FTC, tasked to provide protection and
security in the company premises. The records show that the two corporations had identical
stockholders and the same business address. FISI also had no other clients except FTC and
other companies belonging to the Lucio Tan group of companies. Moreover, the early
payslips of petitioners show that their salaries were initially paid by FTC. To enforce their
rightful benefits under the laws on labor standards, petitioners formed a union which was
later certified as the bargaining agent of all the security guards. On February 1, 1991, the
stockholders of FISI sold all. their participations in the corporation to a new set of
stockholders which renamed the corporation as Magnum Integrated Services, Inc. (MISTI. On
October 15, 1991, FTC, without any reason, pre-terminated its contract of security services
with MISI and contracted two other agencies to provide security services for its premises.
This resulted in the displacement of petitioners. As MISI had no other clients, it failed to give
new assignments to petitioners. Petitioners have remained unemployed since then. All these
facts indicate a concerted effort on the part of respondents to remove petitioners from the
company and thus abate the growth of the union and block its actions to enforce their
demands in accordance with the labor standards laws. ‘
It was likewise held in Insular Life* that it is an act of interference for the employer
to send individual letters to all employees notifying them to return to work at a time specified
therein, otherwise new employees would be engaged to perform their jobs. Individual
solicitation of the employees or visiting their homes, with the employer or his representative
urging the employees to cease their union activities or cease striking, constitutes ULP. All the
above-detailed activities are ULPs because they tend to undermine the concerted activity of
the employees, an activity to which they are entitled free from the employer's molestation.
1 Genera Miling Corporation v. CA, GR. No. 146728, Feb. 11, 2004.
2 Hacienda Fatima v. National Federation of Sugarcane Workers — Food and General Trade, G.R. No. 149440, Jan. 28, 2003.
3 DeLeon v. NLRC and Forlune Tobacco Corporation, G.R. No, 112661, May 30, 2001.
4 ee a even Rae EN ET a PLD
Article 259 (248). Unfair Labor Practices
of Emplapers
§, JURISPRUDENTIALLY DECLARED ACTS OF ULP INVOLVING
EMPLOYER’S INTERFERENCE, RESTRAINT OR COERCION.
Certain specific acts have been jurisprudentially declared as ULP in a number of

cases which invariably involves interference, restraint or coercion by the employer. These
acts may be generally classified as follows:
(1) Dismissals;
(2) Threats;
(3) Questioning and interrogation;
(4) Offers and Promises;
(5) Espionage and surveillance;
(6) Interference in intra-union affairs;
(7) Other forms of interference, restraint or coercion.
5.1. DISMISSALS CONSTITUTING ULP.
a. Organizing and forming a union, never a valid ground to dismiss.
At the outset, it bears underscoring that an employer may be held guilty of ULP for
its act of interference with the employees’ right to self-organization even before the union is
registered.’ The nefarious effects of such interference can already be felt by the employees
even before they can start laying down the groundworks for the establishment of their union.
With more reason that such an act of interference would constitute as ULP if it is perpetrated
at a time when the employees have already organized their union and about to start with the
effort at having it certified as their sole and exclusive bargaining agent (SEBA).
Consequently, to dismiss union members in order to ensure the defeat of the union in the
certification election is ULP.?
In ruling in Mark Roche* that the private respondents were not constructively
dismissed but illegally dismissed, it was established that it was the filing of the petition for
certification election and organization of a union within the company which led petitioners to
dismiss private respondents and not petitioners’ allegation of absence or abandonment by
private respondents. Evidently, it was after receiving the notice of hearing of the petition for
certification election on October 27, 1992 that petitioners immediately told private
respondents that they were no longer employed. The formation of a labor union has never
been a ground for valid termination and where there is an absence of clear, valid and legal
cause, the law considers the termination illegal.‘
It is ULP even if the action of the employer is short of dismissal, such as
transferring, laying off or assigning employees more difficult work tasks, or otherwis
e
punishing them because they engaged in organizing and forming a union.
What transpired in the 2014 case of T & H Shopfitters’ is reflective of this
situation.
Here, a day after the initial meeting to form the union,‘ petitioners barred 17 employ
ees from
entering their factory premises located in Castillejos, Zambales, and ordered
them to transfer
to T&H Shopfitters’ warehouse at Subic Bay Freeport Zone (SBFZ) purport
edly because of
expansion. Afterwards, the said 17 employees were repeatedly ordered
to go on forced leave
due to the unavailability of work. They were not given regular work
assignments while sub-
contractors were continuously hired to perform their functio
ns. After the conduct of a
* Samahan ng Manggagawa sa Bandolno-LMIC v. NLRC, GR. No, 125195, July 17, 1927597
Inciong, GR. No. L-51494, Aug. 19, 1982, 115 SCRA 887. SCRA,633; Juchic Canning Corporation
Samahang Manggagawa
os ite .
ng Via Mare v, Noriel, G.R. No, L-52169, June 30, 198
ww
98 SCRA
0, 507.
Mark Roche Intemationalv. NLRC, GR. No. 123825, Aug. 31, 1999.
Citing General Baptist Bible Collegev. NLRC, G.R. No.85534, March 5, 1993, 219
SCRA
T &H Shopfitters CompJGin Queen Corp. v. T & H Shopfitters Corp/Gin Queen Workers 549, 555,
oh
Subsequently, on December 18, 2003, the

Union, GR. No. 191714, Feb, 26, 2014.
DOLE issued a certificate of registration in favor of respondent THS-GO Union.
ANNOTATED
petitioners at preventing
certification election was ordered by the DOLE, the efforts of
fied. Petitioners relocated
respondent union from being certified as a bargaining agent intensi
dents discovered was a
their office and workers to Cabangan, Zambales which respon
were made to work as grass
““alahiban” or grassland. The union officers and members
gay Captain. Due to these
cutters in Cabangan, under the supervision of a Baran
circumstances, the employees assigned in Cabangan did not report for work. As a
to explain why he should not be
consequence, the THS-GQ Union president was made report in likewise failed to
terminated for insubordination. The other employees who
Cabangan were meted out with suspension.
a field trip to Iba,
A day before the certification election, petitioners sponsored
the THS-GQ Union were
Zambales, for their employees. The officers and members of
field trip, a sales officer of
purportedly excluded from the field trip. On the evening of the
election. On the day
igned against the union in the forthcoming certification
petitioners campa
the field trip to the polling
of the certification election, the employees were escorted from
ers, the
center in Zambales to cast their votes. Due to the heavy pressure exerted by petition
was held,
votes for “no union” prevailed. The following week after the certification election
d at the Zambales plant.
petitioners retrenched THG-GQ Union officers and members assigne
Respondents claimed that the work weeks of those employees in the SBFZ plant were
drastically reduced to only three (3) days in a month.
ners, taken
The Supreme Court declared that all the afore-described acts of petitio
dents’ free exercise of
together, constitute ULP. Such were all orchestrated to restrict respon
to and immediately
their right to self-organization. Petitioners’ undisputed actions prior
meddled in
before the scheduled certification election, while seemingly innocuous, unduly
the affairs of their employees in selecting their exclusive bargaining representative.
b. Dismissals that are occasioned by employer’s interference, restraint or
coercion, always ULP.
It is now well-settled that dismissing employees because of their union activities is
ULP.! The following acts involving dismissal of employees have been judicially declared
ULPs:
(a) Dismissing the union officers and members on the ground of losses about two
years after it has allegedly sustained them and after the dismissed officers and members
became more militant when they demanded improvement in their working conditions.’
(b) Effecting discriminatory dismissal where only unionists were permanently
dismissed, even where business conditions justified a lay-off of the employees.’
(c) The mass lay-off or dismissal of 65 employees due to retrenchment absent any
losses or financial reverses. This kind of retrenchment constitutes a lame excuse and a
veritable smokescreen of the employer’s scheme to bust the union and thus unduly disturb the
employment tenure of the employees concerned.‘
(d) Dismissal occasioned by the refusal of the employees to give up their union
et which dismissal was under the pretext of retrenchment due to reduced dollar
locations.
* Ltex Employees Association v. : CIR, G.R. No. i L-30154, j Sept. 9, , 1982, 116 SCRA 459; Union
U of Supervisors
: [R. B.| NATU v. Secretary of
Lara rk No SE 2 erase Copa igpes OR GR Ne
2 Oceanic Air Products, inc. v. CIR, G.R. No, L-18704, Jan. 31, 1963
3 San Miguel Corporation v. NURC, GR.No,
GR. No. 108001, March15, 1996, 196, 255 SCRA 133, 141; See also Bataan Shipyard and ineeting
Engineer
' EU cL imc utey oie $81 ScRk a7 erie x Oe GRA LAS Siete
People's Trust Co. v. People's Bank and Trust Co, Employees Union, G.R. No. L-39603, Jan. 13, 1976.
3 Mania Penal Co. v. CIR, G.R. No. L-16903, Aug. 31, 1965, 14 SCRA 955.
Article
259 [248]. Unfair Labor Practices of Employers
(e) Dismissal of an employee because of his act of soliciting signatures for the
purpose of forming a union.
() Dismissal of employees because of their refiisal to resign from their union and to
join the union favorable to the employer, the latter’s formation having been aided and abetted
by the company.’
(g) Dismissal of employees because of their act of engaging in valid and legal
concerted union activities.
(h) Dismissal occasioned by the implausible and unproved allegation of overpricing
of needles the employee was ordered to buy and for alleged tampering of receipts.‘
(i) Dismissal of an employee who had worked for 19 years because he had filed
money claims against the employer.*
(j) Terminating teachers who have attained permanent status because of the
employer’s apprehension that there might be a future strike in the school. This is an
unwarranted interference with the rights of workers to self-organization and to engage in
concerted activities.®
c, Dismissal of union officers which threatens the existence of the union
constitutes union-busting, a different kind of ULP.
While generally, to dismiss employees because they form, join or assist a union or
vote for a union or engage in protected concerted activity is ULP, a distinction is made
between dismissal of ordinary union members and union officers. The dismissal of ordinary
union members constitutes conventional ULP that may be prosecuted under Article 259
[248]. But if union officers who were duly elected in accordance with the union constitution
and by-laws are the ones dismissed and there is substantial evidence to show that such
dismissal threatens the very existence of the union, the law treats this kind of dismissal
differently. It is classified as union-busting, also an act of ULP, but is prosecuted under a
different provision of the Labor Code — paragraph (c) of Article 278 [263].’
For example, in Colegio de San Juan de Letran,® the outright termination for
alleged insubordination of the union president while the CBA negotiation was on-going was
declared as an act of union-busting as it interfered with the employees’ right to self-
organization. The factual backdrop of the termination of the union president leads to no other
conclusion but that she was dismissed in order to strip the union of a leader who would fight
for the right of her co-workers at the bargaining table.
In another case, Cathay Pacific,’ the act of the employer in dismissing a supervisory
employee (Personnel Superintendent) on account of his union activities related to the
formation of the supervisory union was held as ULP.
(NOTE: This subject is extensively discussed in the Nofes and Comments on Article
278 [263], particularly, under the topic: “Vil. UNION-BUSTING,” infra).
Judric Canning Corporation v. Inciong, G.R. No. L-61494, Aug. 19, 1982, 115 SCRA 887.
i
Progressive Development Carporation v. CIR, G.R. No. L-39546, Nov. 24, 1977, 80 SCRA 434,
Republic Savings Bank v. CIR, G.R. No. L-20303, Sept. 27, 1967,21 SCRA 226.
Kapisanan ng Manggagawa sa Camara Shoes v. Camara Shoes, G.R. No. L-50985, Jan. 30, 1982.
Shal v. Notre Dame of Greater Manila, G.R. No. 75093, Feb. 23, 1990.
Rizal Memorial Colleges Faculty Union v. NLRC, G.R. No. 59012-13, Oct. 12, 1989.
*(0) In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may fie a
notice of lockout with the Ministry at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice
Shall be 15 days and in the absence of a duly certified or recognized bargaining agent, the notice of strke may be fled by any legitimate
in behaif of ts members. However, in case of dismissal from employment of union officers duly elected in accordance
labor organization
with the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day
cooling-off period shal not apply and the union may take action immediately.”
* Colegio de San Juan de Letran v. Association of Employees and Faculty of Letran, G.R. No. 141471, Sept. 18, 2000.
* Cathay Pacific Steel Corp. v. Hon. CA, G.R. No. 164564, Aug. 30, 2006.
LAW ON LABOR RELATIONS
ANNOTATED
5.2. THREATS CONSTITUTING ULP.

The mere issuance of a threat by the employer, even
if not actualized, may already
constitute ULP. Examples are as follows:
(a) Threatening employees with loss of jobs or benefits or promotional opportunities
if they join or vote for a union or engage in protected concerted activity.’
_ (b) Threatening to close the plant if employees select a union to represent them?
or
to discourage union activity or support
(c) Stating to employees that union bargaining is futile or a strike is inevitable.
(d) Threatening the union recruiter with bodily harm when he refused to yield the
demand of the employer to surrender the union affiliation forms.
5.3. QUESTIONING AND INTERROGATING EMPLOYEES THAT CONSTITUTE
ULP.
The act may also amount to ULP even if it is merely in the form of a question. The
following acts well constitute ULP under this classification:
(a) Interrogating its employees in connection with their membership in the union or
their union activities which hampers their exercise of free choice.®
(b) Questioning employees about their union sympathies or activities in
circumstances that tend to interfere with, restrain or coerce employees in the exercise of their
rights would be treated as ULP.”
5.4. OFFERS AND PROMISES CONSTITUTING ULP.
The employer’s act of making an offer or promise of certain favors or benefits may
also constitute as ULP. The following are illustrative of this kind:
(a) Promising or implementing employee wage increases to discourage their union
activity or support.’
(>) Offer of reinstatement and attempt to “bribe” the strikers with “comfortable
cots,” “free coffee and occasional movies,” “overtime pay” for work performed in excess of 8
hours and offer of “arrangements” for their families so they would abandon the strike and
return to work, constitute strike-breaking which is a ULP.?
(c) Offer of Christmas bonus to all “/aya?’ employees made shortly after the request
by the union to bargain; wage increase given for the purpose of mollifying employees after
the employer has refused to bargain with the union or to induce strikers to return to work;
employer’s promise of benefits in return for the striking employees’ abandonment of their
strike; and the employer’s statement made about 6 weeks after the strike started, to a group of
strikers in a restaurant that if the strikers returned to work, new benefits such as
"Se “Employer/Union Rights and Obligations,” United States’ National Labor Relations Board (NLR&), at htps:/iwww
protectlemployerunionighis-and-obigatons; Last accessed: October 09, 2016. See also Mackinac Center for .nrb.govtightsve-
Public Policy, "The
National Labor Relations Board and ‘Unfair Labor Practices", by Robert P. Hunter, published on Aug. 24, 1999, online version at
hitps:/ww_mackinac.org/2317; Last accessed: February 14, 2017,
Id.
Ww
Mackinac Center for Public Policy, “The National Labor Relations Board and ‘Unfair Labor Practices", by Robert P. Hunter,
supra.
w
id,
&®
Velezv. PAV Watchmen's Union, G.R. No. L-12639, Aprit27, 1960, 107 Phil 689,
no
Sooly’s Deparment Store v. Micaller, G.R. No. L-8116, Aug. 25, 1956, 99 Phi. 762; Philipine Steam Navigton Co. v. Phiippine Marine
eo
Officers Guid, G.R. Nos. L-20667-69, Oct. 29, 1985, 15 SCRA 174. Y
id.
~
Mackinac Center fr Public Policy, “The Naonal Labor Relations Board and Unfa Labor Pracices", by Robert P. Hunter,
$ sue Le Assurance Co, LA, Employees Aston NATU v. sur Lie Assurance supra.
Co, Ud, GR No L26291, Jn. 30,1971, 37
Article 259 [248]. Unfair Labor Practices aire
hospitalization, accident insurance, profit-sharing and a new building to work in, will be
given to them.
_ (d) Announcement by the employer of benefits prior to the conduct of a certification
election, intended to induce the employees to vote against the union.”
5,5. ESPIONAGE AND SURVEILLANCE CONSTITUTING ULP.
. The act of spying and surveilling of employees to determine their involvement and
ee in union Organizing, formation and concerted activities is ULP. Examples are as
follows:
_ (a) When management conducts espionage or surveillance of the meetings and

activities of the union. It is illegal since it shows the opposition of the employer to the
existence of the union, and the furtive nature of his activity tends to demonstrate spectacularly
the state of his anxiety.
(c) Requesting employees to report on the union activity of others.‘
5.6. INTERFERENCE IN INTRA-UNION DISPUTE CONSTITUTES ULP.
The act of management in meddling with purely internal concerns, issues and affairs
of the union is ULP. For example, petitioners, in De /a Salle University,> were declared liable
for ULP for which they were ordered to pay respondent union nominal damages in the
amount of P250,000 and attorney's fees in the amount of P50,000 because of their act of
temporarily doing the following at the height of an intra-union dispute involving the election
of officers of respondent union:
(1) Establishing a savings account for the union where all collected union dues and
agency fees will be deposited and held in trust; and
(2) Discontinuing normal relations with any group within the union including the
incumbent set of officers.
The said act of petitioners was precipitated by the request of one of the contending
groups in respondent union for them “to please put on escrow all union dues/agency fees and
whatever money considerations deducted from salaries of concerned co-academic personnel
until such time that an election of union officials has been scheduled and subsequent elections
has been held.” Petitioners’ act described above drew respondent union to file a complaint
against them for ULP, claiming that they unduly interfered with its internal affairs and
discriminated against its members. The Supreme Court agreed with respondent union’s
labor
contention. It thus found the said act of petitioners constitutive of interference, an unfair
had been
practice, because at the time they adopted said action, a valid and existing CBA
and conditions
entered between the parties. It thus behooved petitioners to observe the terms
that a CBA
thereof bearing on union dues and representation. It is axiomatic in labor relations
entered into by a legitimate labor organization and an employer becomes the law between the
parties, compliance with which is mandated by express policy of the law.
In the 2016 case of Ren Transport Corp. V. NLRC; petitioner’s failure to remit the
union dues it has checked-off to private respondent union, SMART,’ the incumbent
bargaining agent, was declared an act of interference with the exercise of the employees’ right
i,
en =
Re Louisiana Plastic, Inc. 173 NLRB No. 218; NLRB v. Exchange Parts Co., 375 U. S. 405. _
p. 278. i on
Sec,
CJS1A
VS 382, Board and ‘Unfair Labor Practices", by RobertP. Hunter, published
Vackiar Contr Pbk Pky. “The National Labor Relations
. 24, 1999, onli : 14, 2017.
jon athttps Aww vmackinac 07/2317; Last accessed: February
; De ae Urn tr Chaengcov. Dela Sle Unversty Employees Assocation (OLSUEANNAFTEU), GR. No. 177283, Ape
7, 2008,
* GR Nos. 188020 & 1882532,
June 27, 2016.
Samahan ng Manggagawasa Ren Transport (SMART).
ANNOTATED
to self-organize and therefore ULP under Article 259(a) [248(a)].! The failure to remit the
union dues to SMART because of the disaffiliation by some of its members who organized
another union, RTEA,? and the voluntary recognition extended to RTEA, were clear
ill-
indications of interference with the employees’ right to self-organization. These acts were
Such
timed in view of the existence of a labor controversy over membership in the union.
that cannot
supposed disaffiliation and voluntary recognition of RTEA are but a lame excuse
validate those acts.
But the foregoing cases should be contrasted with the earlier case of Arellano
s
University,3 where the act of the university in withholding the union dues and death benefit
was not considered ULP because it was made upon the request of union members in the light
of their gripes against the union and its officers. The university even deposited the amounts
parties could
corresponding to the union dues and death benefits with the DOLE where the
settle the issues among themselves. The university, therefore, cannot be faulted for ULP as it
in good faith merely heeded the request of union members.
5.7. OTHER FORMS OF INTERFERENCE, RESTRAINT OR COERCION
CONSTITUTING ULP.
n, such
There are other forms of ULP by means of interference, restraint or coercio
as the following:
(a) Indirectly forcing the employees to join another labor union as a condition for
their re-admission for participating in a strike.‘
(b) Instructing an employee not to affiliate or join a union.°
(c) Refusal of the employer to reinstate strikers who voluntarily and unconditionally
offered to return to work but did not accept the new discriminatory conditions imposed
against them because of their union membership or activities.®
(d) The act of the purchasers of a business establishment in replacing the union
members who were negotiating a CBA with the former owner at the time of the sale.”
(e) The grant of concessions and privileges during the pendency ofa certification
election case to members of one of the unions participating therein.*
(f) Withdrawal by the employer of holiday pay benefits stipulated under a
supplementary agreement with the union.’
(g) Suspending union officers who attended the hearing in the petition for
certification election they filed.!°
(h) The uneven application by the employer of the company’s marketing plan which
caused undue hardship to the president and vice president of the union."
1 This was cited by the Supreme Court in this decision as Artide 258 (a) and not Article 259(a) which is the renumbering made by the
aa No. 01, Series of 2015 (Renumbering of the Labor Code of the Philippines, as Amended),
on 2015,
2 Ren Transport Employees Association {(RTEA),
3 Arellano University Employees and Workers Union v. CA, G.R. No. 139940, Sept. 19, 2006.
4 Macleod & Company of the Phils. v. Progressive Federation of Labor, G.R. No. L-7887, May 31, 1955, 97 Phil. 205. Here, the company
not only limited itself to dispensing with the services of the 38 laborers who parlicipated in the strike, but indirectly forced them to join
another labor union @s a condition whereby they could be readmitted. This was what was provided in the clause inserted in the contract of
service entered into by the company with the Davao Stevedore Terminal Company which provides that the employment of the members
of the outside gang would be subject to the condition that they shall affiiate themselves with the Davao Stevedore Mutual Benefit
: een SEM Ct Gh Ge OIE Po ee re re:
eaev. - , Feb. 25, 4 RA 426; National
Nati Fastener Corporation
i v, CIR, G.R. No. L-15834,
: 1
Cromwell Commercial Employees and Laborers Union v. CIR, G.R. No. L-19778, Sept. 30, 1964.
National Labor Union v. CIR, G.R. No. L-31276, Sept.9, 1982.
Philippine Charity Sweepstakes Office v. The Association of Sweepstakes Staff Personnel, G.R. No. L-27546, July 16, 1982.
Re Louisiana Plastics, Inc. 173 NLRB No. 218; NLRB v. Exchange Parts Co., 375 U. S. 405.
® Oceanic Pharmacal Employees Union v. Inciong, G.R. No. L-50568, Nov, 7, 1979.
11 AHSPhilippine Employees Union v. NLRC, G.R. No. 73721, March 30, 1987.
THE LABOR CODE OF THE PHILIP:PINES
Article 259 (248). Unfair Labor Practices of Employers =e
(i) Ceasing operation due to the establishment of the union.!

(j) Simulated sale in bad faith of business resorted to in order to get rid of the
employees who were members of the union.?
; (k) Engaging in capital reduction to camouflage the fact that it had been making
profit, in order for it to be able to effectuate the mass lay-off of union members.*
; (1) The retrenchment of employees who belong to a particular union, with no
satisfactory justification why said employees were singled out.‘
(m) Asking the employees to disclose the names of the members of the union.*
(n) Putting on “rotation” only the alleged members of the union.®
(0) Compelling employees to sign an instrument indicating that the employer
observed the labor standards provisions of the law when he might have not, together with the
act of terminating or coercing those who refuse to cooperate with the employer’s scheme.”
(p) The cessation of a company’s operations shortly after the organization of
a labor union and the resumption of business barely a month after, gives credence to the
employees’ claim that the closure was meant to discourage union membership and to
interfere in union activities.®
(q) Provoking the union officers into a fight by two recently hired employees
pursuant to a strategy of the company designed to provide an apparently lawful cause for
their dismissal. The dismissed employees have not figured in similar incidents before or
violated company rules in their many years with the company.’
(r) Refusal of the employer to reinstate an employee who was illegally dismissed
based on the union security clause, unless the latter admits his guilt.!°
6. ILLUSTRATIVE CASES WHERE EMPLOYERS WERE NOT DECLARED
GUILTY OF ULP.
In the following cases, the employers were not declared guilty of ULP:
(a) The transfer of an employee, absent any evidence which directly reflects
interference by the company with the employee’s right to self-organization."
(b) A promotion which is manifestly beneficial to an employee and therefore cannot
be said to have been made simply to deprive the union of the membership of the promoted
employee.”
(c) Mandatory or forced vacation leaves of workers due to economic crisis which
were not effected in a malicious, harsh, oppressive, vindictive or wanton manner and where
they were paid therefor or the same were otherwise charged to their respective earned
leaves.'9
G.R. No.
' Carmelcrait Corporation v. NLRC, G.R. Nos. 9064-35, June 6, 1990; Sy Chie Junk Shop v. Federacion Obrero de la industria,
30964 ,
May 9, 1988.
2 Moncada Bijon Factoryv. CIR, G.R. No, L-18065, March 30, 1962,4 SCRA 756; Cruzv. PAFLU, G.R. No. L-26519, Oct. 29, 1971, 42
SCRA 68; National Labor Union v. CIR, G.R. No. L-31276, Sept. 9, 1982, 116 SCRA 417.
Madrigal & Co,, inc. v. Zamora, G.R. No. L-48237, June 30, 1987, 151 SCRA 355.
ew
Bataan Shipyard and Engineering Co., lnc. v. NLRC, G.R. No, 78604, May 9, 1988.
Samahan ng Manggagawa sa Bandolino-LMLCv. NLRC, G.R. No. 126195, July 17, 1997, 275 SCRA 633.
ew
Samahan ng Manggagawa sa Bandolino-LM LC

v. NLRC, supra.
Mabezav. NLRC GR. No. 118506, April 18, 1997, 271 SCRA 670.
Me-Shum Corporation v. Me-Shum Workers Union - FSM, G.R. No. 156292, Jan. 11, 2005.
e724
Visayan Bicycle Manufacturing Ca, Inc. v. National Labor Union and CIR, G.R. No. L-19997, May 19, 1965, 14 SCRA 5.
Liex Employees Association v. CIR, G.R. No. L-39154, Sept 9, 1982, 116 SCRA 459.
11 Rubberworld [Phils], Inc.v. NLRC, G.R. No. 75704, July 19, 1989.
ma Bullefin Publishing Co. v. Sanchez, G.R. No. 74425, Oct. 7, 1986,
3 Philippine Graphic Arts, Inc. v. NLRC, G.R. No. L-80737, Sept 29, 1988, 166 SCRA 118.
LAW ON LABOR RELA TIONS
a0; D
ANNOTATE
the strike was declared

(d) Refusal by employer to re-admit striking workers after
illegal.!
time since there were justifiable
(e) Failure to re-admit striking workers at the same
such as the complete paralyzation of
reasons not to effect their simultaneous re-admission, attended by
which were both
the business operations as a consequence of the two strikes
the machines because of long
widespread violence and vandalism and the non-operability of
disuse during the strikes.”
and “protest
(f) Acceptance by the employer of mass “protest retirement”
concerted activity and
resignation” of pilots which cannot be considered as a protected
ULP
therefore illegal. The employees cannot validly claim that their employer committed
therewith,
because, having themselves voluntarily terminated their employment relationship
they were not dismissed.
registration is
Filing by the employer of a petition for cancellation of the union’s
evidence that the said
same a act of ULP ioe is a showing by substantial
petition was aimed to oppress the union.‘
of reinstatement
(h) The failure of the employer to comply with the final order
because of a government directive which rendered the reinstatement an impossibility.*
of the union as unfit for
(i) The decision of the employer to consider the top officers
Discrimination in the
reinstatement is not essentially discriminatory and constitutive of ULP.
labor organization
context of the Labor Code involves either encouraging membership in any
to give testimony under
or is made on account of the employee’s having given or being about
the Labor Code. There is no ULP if this fact is not proven by evidence.°
(j) The refusal of a shipping agency to hire and employ security guards affiliated
with a security agency which does not post a bond. Such refusal is a legitimate exercise of
the right to protect its own interests.’
(k) An error in the interpretation of a provision of the CBA, absent any malice or
bad faith. Honest differences in construction imay arise in the actual application of contractual
provisions.®
(1) The grant of profit-sharing benefits to managers, supervisors and all rank-and-file
employees not covered by the CBA is not discriminatory but a valid exercise of management
prerogative.”
(m) Dismissal where there is absence of proof that it was dictated by anti-union
motives.!°
(n) Dismissal of workers pursuant to the union security clause in the CBA after
affording them due process."
(0) Dismissal of an employee due to loss of confidence’ or any other just or
authorized causes.
GOP-OCP Workers Union v. CIR, G.R. No. L-33015, Sept. 10, 1979. ‘
wn=
Lakas ng Manggagawang Makabayan v. Marcelo Enterprises, G.R. No. 38258, Nov. 19, 1982, 118 SCRA 422.
v. Zamora, G.R. No. L-51382, Dec. 29, 1986.
Enriquez
Rural Bank of Alaminos Employees Union [RBAEU] v. NLRC, G.R. Nos. 100342-44, Oct. 29, 1999.
ese
Arrastre Security Association v. Ople, G.R. No. L-45344, Feb. 20, 1984, 127 SCRA 580.
uw
Greal Paciic Life Employees Union v. Great Pacific Life Assurance Corporation, G.R. No, 126717, Feb, 11, 1999.
2B
Associated Watchmen and Seourity Union v. Lanting, G.R. No. L-14120, Feb. 29, 1960, 107 Phil. 275.
ss
Singapore Airines Local Employees Assodation v. NLRC, G.R. No. L-56786, July 16, 1984, 130 SCRA 472.
Wse and Co., Inc. v. Wise and Co., Inc. Employees Union, G.R. No. 87672, Oct 13, 1989.
18 AHS/Ph ilippi
Employees ne
Union v. NURC, G.R. No. 73721, March 30, 1987.
" ea eg me Te pag coma hap gels gh hele aie mele gl 113907,
Feb. 28, 2000;
v. ; : ; , 1957, 102 Phil. 669; Victorias Co., Inc, v. Victorias-Manapia
9 SCRA 154.
No. L-18467, Sept. 30, 1963, mi nen ee
@ Nevens v. CIR, GR. No. L-21510, June 29, 1968.
THE LABOR CODE OF THE PHILIPPIN
Article 259 [248]. lb Ube Poker peecone”
©) Dismissal of an employee which is not discriminatory since other employees

more active than him in unionism were retained.’
(q) Dismissal of a supervisor who organized a labor union composed of men under
his supervision?
7. VALID DEFENSES AGAINST CHARGE OF INTERFERENCE.
a. Lack of ill will, bad faith or fraud; act not oppressive to labor or not done ina
manner contrary to law, morals, good customs, or public policy.
A valid defense against the charge of ULP is the lack of ill will, bad faith or fraud
on the part of the employer in performing the act alleged to constitute ULP or that the act was
not oppressive to labor or done in a manner contrary to morals, good customs or public
policy. The best example of this is the case of Asia Brewery.’ Here, the employer, respondent
ks and
company, unilaterally stopped the deduction of union dues from the secretaries/cler rank-
covered by the
checkers whom it considered confidential employees and therefore not
Resultantly,
and-file bargaining unit under the express exclusionary provision of the CBA.
that such act
petitioner union charged respondent company for ULP as the former claimed
as provided in Article
“restrained” the workers’ exercise of their right to self-organization,
however, ruled that although said
259(a) [248(a)] of the Labor Code. The Supreme Court,
and are therefore included in
secretaries/clerks and checkers are not confidential employees
discontinuing the deductions for
the bargaining unit, such act of respondent company in same was motivated by
shown that the
union dues cannot be considered ULP since it was not
or done in a manner contrary to morals,
ill will, bad faith or fraud, or was oppressive to labor,
wounded feelings or grave anxiety
good customs or public policy, and that social humiliation,
that they were excluded by the
resulted therefrom. Respondent company believed
te arose from a simple disagreement in the
CBA. Moreover, considering that herein dispu
uded employees from the bargaining unit,
interpretation of the CBA provision on excl s in
onde nt comp any cann ot be said to have committed ULP that restrained its employee
resp -union
n, nor did it thereby demonstrate an anti
the exercise of their right to self-organizatio
stance.
right to self-organization.
b. Lack of intention to interfere with employees’
union members, were ordered by
In the case of Tryco,‘ petitioners, including some veterinary medicines with
their employer, Tryco Pharma Corporation, a manufacturer of Rafael,
from its plant in Caloocan City to San
principal office in Caloocan City, to transfer the Bureau of Animal Industry
Bulacan by virtue of a Letter dated March 26, 1997 from conducted
reminding it that its production should be
(BAI) of the Department of Agriculture orders
City. Petitioners contend that the transfer
ap
in San Rafael, Bulacan and not in Caloocan

and render the union ineffective. The Supreme
sg
amounted to ULP because it would paralyze bers

see how the mere transfer of the union mem
Court, however, observed that it could not of petitioners whose
ze the uni on. The uni on was not deprived of the membership ant there was no
can paraly e onl y tra nsf err ed to another location. More import ly,
ivated by an intention to interfere
wor k ass ign men ts wer
nsfer orders were mot
showing or any indication that the‘ze.traUL P refers to acts that violate the workers’ right to
with petitioners’ right to organize D)}* of the Labor Code, the prohibited
acts
the exce ptio n of Artic le 259( ) [248(
organize. With
nt Workers [PTUC]. CIR,SCR,G.R.A No. -20044, April 30, 1964.

National Union of RestNo.aura
L-25953, Aug. 27, 1979
93 1.
Fortch v. CIR, G.R. ag) NG. NS AG
epg ova
Tirana GR. No. 151309 208. rwise prejudice or discriminate against an employee for having
Oct ,15, or othe
a
ig Manggagjawa sa Tryoo v. “NLRC, N

a
which provid es: “ ( ) To dismis s, discha rge

Referring tn T This isthe only ULP that need not be related lo
the exercise of the right to self
i yunder0 this Code[. U hes, nv. Baldo, GR. No.L-17739, Dec. 24, 1964; Philippine American Cigar
given oror being about toto givegh testimon
aboutme)
being beco
Organization or collective bargaining. (See | and Caree Wenufacsrg Co, GR No L-183
54, Feb
a ene at psdent Un v.Pppne Ameican Ona
ANNOTATED
are related to the workers’ right to self-organization and to the observance of a CBA. Without
that element, the acts, no matter how unfair, are not ULPs.
c. Valid exercise of management prerogative.
The Supreme Court had occasion to reiterate in Cainta Catholic School, the rule
earlier enunciated in Philippine Airlines,? that the exercise by the employer of a valid and
duly established prerogative to retire an employee granted to it under a CBA, does not
constitute ULP even if the employee retired is an officer of the union. The CBA in this case
established 60 as the compulsory retirement age. It, however, allows the retirement of an
employee after having rendered at least 20 years of service to the school, the last 3 years of
which must be continuous. Clearly, the CBA provision allows the employee to be retired by
the school even before reaching the age of 60, provided that he has rendered 20 years of
service. This provision in the CBA is valid as affirmed by jurisprudence. Evidently, it more
clearly emerges in the case of retirement that management would anyway have the right to
retire an employee, no matter the degree of involvement of said employee in union activities.
I.
YELLOW DOG CONTRACT
1. GENERAL DESCRIPTION OF THIS CONTRACT.
Paragraph [b] of Article 259 [248] describes what is commonly known as “yellow
dog contract” or a yellow-dog clause of a contract.’ It is an employment agreement which
requires from employees, as a condition of employment, that they shall not join or belong to a
labor organization, or attempt to organize one during their period of employment or that they
shall withdraw therefrom in case they are already members thereof.‘
2. ORIGIN OF THE TERM “YELLOW DOG.”
The term “yellow dog” traces its roots to certain commentaries made by the labor
press in the United States sometime in 1921. An example is the following editor’s comment
of the United Mine Workers' Journal: “This agreement has been well named. It is yellow dog
for sure. It reduces to the level of a yellow dog any man that signs it, for he signs away every
right he possesses under the Constitution and laws of the land and makes himself the
truckling, helpless slave of the employer.”> Simply put, it is so-called “yellow dog” because
the employees were deemed to have to cower before their "masters" to get a job.®
3. COMMON STIPULATIONS IN A YELLOW DOG CONTRACT.
A typical yellow dog contract embodies the following stipulations:
(1)A representation by the employee that he is not a member of a labor
organization;
(2) A promise by the employee that he will not join one; and
28, 1963; Phiicom Employees Union v, Philippine Global Communications, G.R. No. 144315, July 17, 2008; Pepsi-Cola Philippines, Inc.
v. Molon, G.R. No, 175002, Feb. 18, 2013).
Cainta Catholic School v. Cainta Catholic School Employees Union [CCSEU], G.R. No. 151021, May 4, 2006.
wn =
Philippine Airlines, Inc. v. Air ine Pilots Association of the Philippines, G.R. No. 143686, Jan. 15, 2002.
This anti-union pledge or non-union oath Is also called an ‘iron-clad document."
Such contracts, used mast widely in the United States in the 1920s, enabled employers to take legal action against union organizers for
ea
encouraging workers to break these contracts. A federal law prohibiting the use of yellow-cog contracts on the railroads (Erdman Act of
1898) was struck down by the Supreme Court as an unconstitutional infringement upon the freedom of contract (Adair v. The United
States, 1908). In 1932, in accordance with the new philosophy that the govemment should not interfere with workers’ right to organize, the
Norris-LaGuardia Act made yellow-dog contracts unenforceable in the federal courts. (See Encyclopedia Britannica, online version at
http/Awww britannica.com/opiclyeliow-dog-contract, Last accessed: January 29, 2017; Basu, Kaushik (January 2006). "Coercion
Contract and the Limits of the Market"; Arthur Schlesinger, Jr., The Crisis of the Old Order, 1919-1933, (Houghton Miffin Company,
Boston,
1957), pp. 238-239).
5 Joel |. Seidman, The Yellow Dog Contract, The Johns Hopkins Press, 1932, Ch. 1, pp.11-38.
6 USLegal.com at hitpidefintions
uslegal.cony/yelow-dog-contracl/;
Last accessed: February 14, 2017.
Artick 259 [248]. Unfair Labor Practices of Employers
(3) A promise by the employee that upon joining a labor organization, he will quit
his employment.
The act of the employer in imposing any of the foregoing conditions constitutes |
ULP. Such stipulation in the contract is null and void.
4. AN ILLEGAL CLAUSE.
Yellow dog contracts were forbidden in the United States in the private sector by
the 1932 Norris-LaGuardia Act.’ They were, however, allowed in the public sector, including
many government jobs like teachers, beginning with the precedent Frederick v. Ownens.?
Since the purpose of the yellow dog contract is essentially to prevent employees from
organizing, it is therefore not enforceable, as it is illegal under the Norris-LaGuardia Act.
Til.
CONTRACTING OUT OF SERVICES AND FUNCTIONS
1. GENERAL RULE.
Paragraph [c] of Article 259 [248] describes when the act of the employer of
contracting out of services or functions being performed by union members is considered
ULP.
As a general rule, the act
of an employer
in having work
or certain services or
functions being performed by union members contracted out is not per se a ULP act.’ This is
so because contracting-out of a job, work or service is clearly an exercise by the employer of
its business judgment and inherent management rights and prerogatives. Hiring of workers is
within the employer’s inherent freedom to regulate and is a valid exercise of its management
prerogative subject only to special laws and agreements thereon and the fair standards of
justice. The employer cannot be denied the authority of promoting efficiency and attaining
economy by ascertaining what units of its business are essential for its operation. It has the
ultimate right and prerogative to make a determination of whether services should be
performed by its personnel or contracted to outside agencies.5
The Court has always respected a company’s exercise of its prerogative to devise
means to improve its operations. Thus, it has been consistently held that management is free
to regulate, according to its own discretion and judgment, all aspects of employment,
including hiring, work assignments, supervision and transfer of employees, working methods,
time, place and manner of work. This is so because the law on ULPs is not intended to
deprive employers of their fundamental right to prescribe and enforce such rules as they
honestly believe to be necessary to the proper, productive and profitable operation of their
business.®
The foregoing basic tenets have been re-affirmed in Bankard v. NLRC.” Here,
respondent Bankard Employees Union-AWATU charged petitioner Bankard for ULP
because of its act of reducing its number of employees thru the application of the Manpower
Rationalization Program (MRP) and subsequently outsourcing or contracting-out the same to
other contractual employees. Respondent union alleged that as a result of such reduction, the
1 in 1932 Senator George Nomis and Congressman Fiorello LaGuardia succeeded in passing this law.
2 35 Ohio C. C. 538 (1915); (See Slater, Joseph E. Public Workers: Govemment Employee Unions, the Law and the State, 1900 - 1962.
Ithaca, NY: ILR Press, 2004).
3 See Section 3 thereof. (Roberts, Harold S. (1986) Roberts’ Dictionary of Industrial Relations (34 ed.). p. 800).
‘ Philcom Employees Union v. Philippine Global Communication, G.R. No, 144315, July 17, 2006, 527 Phil. 540, 557.
8 Manila Electric Company v. Quisumbing, GR. No, 127598, Jan. 27, 1999, 302 SCRA 173, 214; See also Serrano v. NLRC, G.R. No.
117040, Jan. 27, 2000; De Ocampo v. NLRC, G.R. No. 101539, September 4, 1992, 213 SCRA 652; Asian Alcohol Corporation v. NURC,
GR. No. 131108, March 25, 1999.
§ Bankard, Inc. v. NURC, G.R. No. 171664, March 6, 2013, citing Philcom Employees Union v. Philippine Global Communication, supra.
7 Bankand,
Inc. v. NLRC, supra.
ot LAW ON LABOR RELATIONS
ANNOTATED
number of union members was reduced, and the number of contractual employees, who were
never eligible for union membership for lack of qualification, increased.
The High Court, however, ruled that petitioner has not committed any ULP
considering that there was no proof that the program was meant to encourage the employees
to disassociate themselves from the union or to restrain them from joining any union or
organization. There was no showing that it was intentionally implemented to stunt the growth
of the union or that Bankard discriminated or in any way singled out the union members who
had availed of the retirement package under the MRP. True, the program might have affected
the number of union membership because of the employees’ voluntary resignation and
availment of the package, but it does not necessarily follow that Bankard indeed purposely
sought such result. It must be recalled that the MRP was implemented as a valid cost-cutting
measure, well within the ambit of the so-called management prerogatives. Bankard
contracted an independent agency to meet business exigencies. In the absence of any showing
that Bankard was motivated by ill will, bad faith or malice, or that it was aimed at interfering
with its employees' right to self-organize, it cannot be said to have committed an act of ULP.
Contracting out of services is an exercise of business judgment or management prerogative.
Absent any proof that management acted in a malicious or arbitrary manner, the Court will
not interfere with the exercise of judgment by an employer.’
2. WHEN CONTRACTING-OUT BECOMES ULP.
It is only when the contracting out of a job, work or service being performed by
union members will interfere with, restrain or coerce employees in the exercise of their right
to self-organization that it shall be unlawful and shall constitute ULP.? Thus, it is not ULP to
contract out work for such reasons as reduction of labor cost through the acquisition of
automatic machines,’ business decline, inadequacy of facilities and equipment, reduction of
cost and similar reasonable grounds. The court usually refuses to substitute its judgment for
that of the business decision of the employer in ascertaining the validity or legality of the
motivation for the contracting out of services.
In Shell Oil4 the Supreme Court ruled that the contracting out of security services to
an outside private security agency to undertake the work of the company security guards who
were re-assigned to other sections of the company, is violative of the existing CBA. It could
have been purely an exercise of management prerogative on the part of the company if it
were not bound by what was stipulated in the CBA to continue to maintain a security guard
section at least during the lifetime of the agreement.
Another instance where the employer was declared guilty of ULP consequent to
contracting out of services is the 2012 case of Digital Telecommunications.* In this case,
petitioner closed Digiserv, one of its departments, for the purpose of outsourcing its call
center operation. While losses may have been a valid reason to close down its operations in
the light of the decline in the volume of transaction of operator-assisted call services as
supported by Financial Statements for the years 2003 and 2004, during which Digiserv
incurred a deficit of P163,624.00 and P164,055.00, respectively, it was, however, made in
bad faith. In declaring petitioner guilty of ULP, the Supreme Court cited as precedent, the
case of St. John Colleges,® where the closure of petitioner's high school department
occasioned by the CBA deadlock and its subsequent reopening one year later was declared a
ULP act. It was then held that the closure was done by petitioner school to defeat the affected
: Eee oe ee
{C Cc), ; Section 6 [f], Department Order No. 18-02, Series of 2002, [Feb. 21, 200: ; Philcom Employees Union
v. Philippine Global Communication, G.R. No. 144315, July 17, 2006, 527 Phil. 540, 557. F 7“
Phiicom Employees Union v. Philippine Global Communication, supra.
es we
Shell Oi Workers Union v. Shell Ol Company of the Philippines, Ltd., G.R. No. L-28607, May 31, 1971, 39 SCRA 276, 292.
nan
Digital Telecommunications Philippines, Inc. v. Digitel Employees Union (DEU), GR. Nos. 184903-04, Oct. 10, 2012.
St John Colleges, Inc. v. St John Academy Faculty and Employees Union, G.R. No. 167892, Oct. 27, 2006,
Article
259 [248]. Unfair Labor Practices
of Employers
employees’ security of tenure. In the instant case, the closure of Digiserv was made after the
DOLE Secretary had issued the first assumption order to enjoin an impending strike. When
Digiserv effected the dismissal of the affected employees, the union filed another notice of
strike. Significantly, the DOLE Secretary ordered that the second notice of strike be
subsumed by the previous assumption order. Thus, it was held that, as in Sz. John Colleges,
bad faith was manifested by the timing of the closure of Digiserv and the rehiring of some
employees to Interactive Technology Solutions, Inc. (I-tech), a corporate arm of Digitel. The
assumption order directs employees to return to work, and the employer to reinstate the
employees. The existence of the assumption order should have prompted Digitel to observe
the status quo. Instead, Digitel proceeded to close down Digiserv. The DOLE Secretary had
to subsume the second notice of strike in the assumption order. This order notwithstanding,
Digitel proceeded to dismiss the employees.
The timing of the creation of I-tech is dubious. It was incorporated on 18 January
2005 while the labor dispute within Digitel was pending. I-tech’s primary purpose was to
provide call center/customer contact service, the same service provided by Digiserv. It
conducts its business inside the Digitel office at //0 E. Rodriguez Jr. Avenue, Bagumbayan,
Quezon City. The former head of Digiserv, Ms. Teresa Taniega, is also an officer of I-tech.
Thus, when Digiserv was closed down, some of the employees who presumably were non-
union members were rehired by I-tech. Therefore, the closure of Digiserv pending the
existence of an assumption order coupled with the creation of a new corporation performing
similar functions as Digiserv leaves no iota of doubt that the target of the closure are the
union member-employees. These factual circumstances prove that Digitel terminated the
services of the affected employees to defeat their security of tenure. The termination of
service was not a valid retrenchment; it was an illegal dismissal of employees and it
constituted ULP under Article 259(c) [248(c)] because it was at the height of the labor
dispute occasioned by Digitel’s reluctance to negotiate with the union that I-tech was formed
to provide, as it did provide, the same services performed by Digiserv, the union members’
nominal employer. Indeed, the closure of Digiserv was undertaken in bad faith, badges
thereof being evident in the timing of Digiserv’s closure, hand in hand, with I-tech’s creation.
The finding of ULP hinges on Digitel’s contracting-out certain services performed by union
member-employees to interfere with, restrain or coerce them in the exercise of their right to
self-organization.
primordial issue
In another case involving Bank of the Philippine Islands (BPI),' the
and
raised is whether or not the act of respondent BPI to outsource the cashiering, distribution
in
bookkeeping functions to BPI Operations Management Corporation (BOMC) is
conformity with the law and the existing CBA. Particularly in dispute is the validity of the
after
transfer of 12 former FEBTC employees to BOMC, instead of being absorbed in BPI
in the
the corporate merger. Petitioner union claims that a union shop agreement is stipulated
bargaining
existing CBA and that it is ULP for BPI to outsource the positions in the existing
unit, citing the case of Shell OiP earlier discussed. A finding of ULP necessarily requires the
alleging party to prove it with substantial evidence. Unfortunately, the union failed to
discharge this burden. Consequently, in ruling that respondent BPI did not commit ULP, the
Supreme Court cited the following ratiocinations:
(1) The union’s reliance on the Shell Oil case is misplaced. The rule now is covered
ic
by Article 274 [261] of the Labor Code. Clearly, only gross violations of the econom
provisions of the CBA are treated as ULP. Otherwise, they are mere grievances. In the
even assuming it
present case, the alleged violation of the union shop agreement in the CBA,
nt.
was malicious and flagrant, is not a violation of an economic provision in the agreeme
" BP{ Employees Union-Davao City -FUBU (BPIEU-Davao City-FUBU) v. Bank of the Philippine Istands (BP), G.R. No. 174912, July 24,
2013.
2 Shel Ol Workers Union v, Shell O1 Company of the Philippines, Lid, G.R. No, L-28607, May 31, 1971, 39 SCRA 276, 292
= LAW ON LABOR RELATIONS
ANNOTATED
(2) The provisions relied upon by the union were those articles referring to the
recognition of the union as the sole and exclusive bargaining representative of all rank-and-
file employees, as well as the articles on union security, specifically, the maintenance of
membership in good standing as a condition for continued employment and the union shop
clause. It failed to take into consideration its recognition of the bank’s exclusive rights and
prerogatives, likewise provided in the CBA, which included the hiring of employees,
promotion, transfers, and dismissals for just cause and the maintenance of order, discipline
and efficiency in its operations.
(3) The union, however, insists that jobs being outsourced to BOMC were included
in the existing bargaining unit; thus, resulting in a reduction of a number of positions in such
unit. It asserts that the reduction interfered with the employees’ right to self-organization
because the power of a union primarily depends on its strength in number. The Court,
however, observed that it is incomprehensible how the “reduction of positions in the
collective bargaining unit” interferes with the employees’ right to self-organization because
the employees themselves were neither transferred nor dismissed from the service. As the
NLRC clearly stated: “In the case at hand, the union has not presented even an iota of
evidence that petitioner bank has started to terminate certain employees, members of the
union. In fact, what appears is that the Bank has exerted utmost diligence, care and effort to
see to it that no union member has been terminated. In the process of the consolidation or
merger of the two banks which resulted in increased diversification of functions, some of
these non-banking functions were merely transferred to the BOMC without affecting the
union membership.” BPI stresses that not a single employee or union member was or would
be dislocated or terminated from their employment as a result of the Service Agreement.
Neither had it resulted in any diminution of salaries and benefits nor led to any reduction of
union membership. As far as the 12 former FEBTC employees are concerned, the union
failed to substantially prove that their transfer, made to complete BOMC’s service
complement, was motivated by ill will, anti-unionism or bad faith so as to affect or interfere
with the employees’ right to self-organization.
(4) It is to be emphasized that contracting out of services is not illegal per se. It is an
exercise of business judgment or management prerogative. Absent proof that the
management acted in a malicious or arbitrary manner, the Court will not interfere with the
exercise of judgment by an employer. In this case, bad faith cannot be attributed to BPI
because its actions were authorized by CBP Circular No. 1388, Series of 1993, issued by the
Monetary Board of the then Central Bank of the Philippines (mow Bangko Sentral ng
Pilipinas).
3. ENGAGING A LABOR-ONLY CONTRACTOR DOES NOT MAKE THE ACT
ULP.
Labor-only contracting has been declared in the law! and its implementing rules* and
other issuances’ as being prohibited. It refers to an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to perform a job, work or service
for a principal, and the following elements are present:
a) The contractor or subcontractor does not have substantial capital or investment in
the form of tools, equipment, machineries, work premises, among others, and the
workers recruited and placed by such person arc performing activities which are
directly related to the principal business of such employer. In such cases, the
- person or intermediary shall be considered merely as an agent of the employer who
1 Aftide106, Labor Code,

2 Department Order No. 18:A, Series of2011 [November
14,2011],
Such as Labor Advoay Ho, 10, Series of 2016 (Prohibition
Against Labor-Only Contracting), issued by the DOLE Secretary
on July 25,
Article 259 [248]. Unfair Labor Practices of Emplopers
shall be responsible to the workers in the same manner and extent as if the latter
were directly employed by him; or
b) The contractor does not exercise the right of control over the performance of the
work of the employee.!
In the 2016 case of CEPALCO v. CEPALCO Employee's Labor Union-Associated
Labor Unions-TUCP,? the complaints filed by respondent union were only for ULP. In
support of this charge, labor-only contracting was invoked by respondent union as a
prohibited act under Article 259(c) [248(c)] of the Labor Code. Respondent union, however,
failed to relate the arrangement to the defining element of ULP, ie., that it violated the
workers’ right to self-organization. Thus, even if so prohibited, the mere engagement by an
employer of a labor-only contractor does not make it liable for ULP. It only becomes liable if
it is devised by the employer to “interfere with, restrain or coerce employees in the exercise
of their right to self-organization.” To so hold the employer, therefore, there must be
evidence to show that the employer violated such right of the employees.
(NOTE: For a more extensive discussion on labor-only contracting, see the
Notes and Comments on Articles 106 to 109 of the Labor Code, contained in
Volume I of this 3—-Volume series by the author on the Labor Code).
IV.
COMPANY UNION
1. COMPANY INITIATED, CONTROLLED, DOMINATED OR ASSISTED UNION.
Paragraph [d] of Article 259 [248P considers it a ULP of employer to initiate,
sponsor, dominate, control, assist or otherwise interfere with the formation or administration
of any labor organization, including the giving of financial or other support to it or its
organizers or supporters or bringing pressure upon employees to join a union. Such union is
called “company union,” “yellow union” or “sham union,” as its formation, function or
administration has been assisted by any act defined as ULP of employer under the Labor
Code.4 To determine whether an employer unfairly controls a union, all the facts in a given
case should be looked into, including such facts as the employer’s role in the effort to
organize the union and the extent of the participation of the employer in purely union affairs.
2. SUSPENSION OF CBA FOR A LONG PERIOD DOES NOT MAKE THE UNION
COMPANY-DOMINATED.
If warranted by circumstances, a CBA may be suspended for more than its usual 5-
year lifetime. During the period of suspension, the parties may mutually agree that the
bargaining union’s status should continue to be recognized as such. The question is, does this
prolonged recognition tantamount to making the union company-dominated? This poser was
answered in the negative in Rivera v. Espiritu,’ where the CBA between the management of
Philippine Airlines (PAL) and the bargaining union, Philippine Airlines Employees
Association (PALEA), with expiry date of September 30, 2000, was mutually agreed by the
parties to be suspended until 2008, to prevent the closure of PAL because of severe financial
situation. It was accordingly stipulated in the agreement of suspension that:
of 2016, Id.
* Labor Advisory No. 10, Series ; ;
2 Cagayan Electric Power & Trading Company, Inc. (CEPALCO) v. CEPALCO Employee's Labor Union-Associated Labor Unions-TUCP,
June 20, 2016.
GR. Nos. 211015 & 213835, .
> Afi 259(d)with[248(4)] ofthe Labor Code traces its origin from a U.S. law which provides that it shall be ULP of an employer “to dominate
oF interfere the formation or administration of any fabor organization or contribute financial or other support tb it Provided, That
Subject tp rules and regulations made and published by the Board pursuant to section 156 ofthis tle, an employer shall not be prohibited
petmiting employees to confer with him during working hours without loss of time or pay[ (See National Labor Relations Act, 29
U.S. Code § 158 - Unfair labor practices, Sec. 8[a] [2] thereof).
‘ Aticle 2194) [212(]], Labor Code: Section 1 [k], Rule I, Book V, Rules to Implement the Labor Code. Notably, company unions are
Ikewise contrary to intematonal labour law. (See ILO Convention 98, Article 2).
* GR No. 135547,
Jan, 23, 2002,
a LAW ON LABOR RELATIONS
ANNOTATED
“a. PAL shall continue recognizing PALEA as the duly certified-

bargaining agent of the regular rank-and-file ground employees of the
Company|.]"
Petitioners alleged that the 10-year suspension of the CBA under the PAL-PALEA
agreement virtually installed PALEA as a company union for said period, amounting to
ULP, in violation of Article 265 [253-A] of the Labor Code mandating that an exclusive
bargaining agent serves for 5 years only. The Supreme Court, however, pronounced:
“Said proviso cannot be construed alone. In construing an instrument
with several provisions, a construction must be adopted as will give effect to all.
Under Article 1374 of the Civil Code, contracts cannot be construed by parts, but
clauses must be interpreted in relation to one another to give effect to the whole.
provision
The legal effect of a contract is not determined alone by any particular
disconnected from all others, but from the whole read together.’ The aforesaid
provision must be read within the context of the next clause, which provides:
‘b. The ‘union shop/maintenance of membership’ provision under
the PAL-PALEA CBA shall be respected.”
“The aforesaid provisions, taken together, clearly show the intent of the
parties to maintain ‘union security’ during the period of the suspension of the
CBA. Its objective is to assure the continued existence of PALEA during the said
period. We are unable to declare the objective of union security an unfair labor
practice. It is State policy to promote unionism to enable workers to negotiate
with management on an even playing field and with more persuasivencss than if
they were to individually and separately bargain with the employer. For this
reason, the law has allowed stipulations for ‘union shop’ and ‘closed shop’ as
means of encouraging workers to join and support the union of their choice in the
protection of their rights and interests vis-a-vis the employer.?
“Petitioners” contention that the agreement installs PALEA as a virtual
company union is also untenable. Under Article 259(d) [248(d)] of the Labor
Code, a company union exists when the employer acts ‘[t]o initiate, dominate,
assist or otherwise interfere with the formation or administration of any labor
organization, including the giving of financial or other support to it or its
organizers or supporters.’ The case records are bare of any showing of such acts
by PAL.
XXX
“In sum, we are of the view that the PAL-PALEA agreement dated
September 27, 1998, is a valid exercise of the freedom to contract. Under the
principle of inviolability of contracts guaranteed by the Constitution,> the contract
must be upheld.”
3. ILLUSTRATIVE CASES OF COMPANY UNION.

_ In Hamilton Distillery,’ there were two unions existing in the company, namely:
Kapisanan ng mga Manggagawa ng Alak (NAFLU), and respondent Hamilton Workers'
Union, (Workers’ Union). It was established by evidence, and so the Supreme Court holds,
that the company preferred the latter union over the former as shown by the following facts:
(1) Although the Workers’ Union was registered on September 24, 1957, its CBA with the
company and the notice issued by the company - giving its employees who were not
members of the Workers’ Union, thirty (30) days to join the same, or else be dismissed - bear
the same date; (2) The company asked the president of the former to dissolve NAFLU and
when he refused, he was dismissed; (3) Subsequently, some members of NAFLU resigned
therefrom and joined the Workers’ Union because otherwise they would be dismissed by the
Reparations Commission v. Northem Lines Inc., G.R. No. L-24835, July31, 1970, 145 Phil 24,3
-_wen=
apn
Liberty Flour Milsrape
Employees v. s
Liberty Flour Mils, Inc,, G.R. Nos. 768-70,5876-0, Dec, Dec 29, 1989, 180 SCRA 668, 679-680.
79-680
Kepisanan Ng Mga Mengagagawa Ng Alek v. Hamiton Dsillery Company, G.R. No. L-18112, Oct. 30, 1962, 6 SCRA 367.
Articke
259 [248]. Unfisir Labor Practices of Employers
company and those who remained affiliated with NAFLU were allowed to work only 2 days
per week; (4) Later, 52 employees who were members of NAFLU were also terminated for
refusing to join the Workers’ Union, Considering that the company had altogether around
100 employees only, it is clear that a petition for certification election, if filed by NAFLU
rior to the execution of the CBA between the Workers’ Union and the company, would
have, in all probability, barred effectively said agreement.
In Oceanic Air Products v, CIR,’ several employees were forced by company
officers to join a union. No member of the union had been dismissed despite the
implementation of a retrenchment policy which resulted in the dismissal of other employees
who are officers and members of another union. After the dismissals, the company hired
several laborers. All these indicate that the union is company-dominated.
In Philippine American Cigar,” it was pronounced that one indication that the union
is company-dominated consists in the act of the employer in securing authorization cards
from employees and by immediately granting the union exclusive recognition as a bargaining
agent and entering into a contract therewith although it was not the duly authorized
representative of the employees. Another is when the union approached the management
rather than the employees in getting the plant unionized and management extended the
requested assistance to the union. The acts of the company in soliciting membership and
allowing union activities to be held during working time and coercing employees to join the
union under threat of dismissal or demotion are clear indicia of company domination.
In Davao Free Workers Front v. CIR,* the following acts of respondent employer,
7-UP Bottling Company of the Philippines at its Davao branch, were cited as indicia that the
union was company-dominated: It refused to bargain with petitioner union; it interfered with
and coerced its members to vote for its hand-picked candidate as president of petitioner
union; it required the members of petitioner union to join the 7-Up Employees Association, a
newly organized labor union obviously sponsored and favored by it with which it
immediately executed a CBA granting its members with new union fringe benefits while
refusing to bargain with petitioner union regarding the renewal of their just-expired contract
and instead foisting upon petitioner union its unilateral version of a CBA; and it filed a notice
of lock-out and refused entry to members of petitioner union when the latter refused to accept
its unilateral contract version. These union-busting and discriminatory acts led petitioner
union justifiably to declare a strike against respondents’ ULPs.
V.
3 SEPARATE LEGAL CONCEPTS
TREATED IN PARAGRAPH (E), ARTICLE 259 [248]
1. THREE SENTENCES, THREE SEPARATE CONCEPTS.
The three (3) sentences comprising paragraph [e] of Article 259 [248) treat of three
(3) separate labor law concepts,* to wit:
1 GR_No. 18704, Jan. 31, 1963, 7 SCRA 208. ;

2 Philippine American Cigar and Cigarette Factory Workers Independent Union v. Philippine American Cigar and Cigarette Manufacturing
Co., G.R. No. L-18364, Feb. 28, 1963, 7 SCRA 375.
also Progressive tanicn

t“Se Seco een v. CIR, GR.i No. . L-39546, , Nov. Nov. 29, 29, 1977, : 80 SCRA 434 :
Development Corporation
3 Article 259(e) [248(e)] of the Labor Code is substantially based on a U.S. law which provides that it shall be ULP of an employer “flo
discriminate] in regard to hire or tenure of employment or any term or cankition of employment to encourage or discourage membership in
any labor organization: Provided, That nothing in this subchapter, orin any other statute of the United States, shall preclude an employer
from making an agreement with a labor organization (not established, maintained, or assisted by ary action defined in this subsection as
of
an unfair labor practice) to require as a condition of employment membership therein on or after the thirtieth day following the beginning
of the
such employment or the effective date of such agreement, whichever is the later, () if such labor organization is the representative made,
159(a) of this fil, in the appropriate collectve-b argaining unt covered by such agreement when
employees as provided in section the effective date of such
and (i) uniess folowing an election held as provided in section 159(e) of this tile within one year precedingelection have voted to rescind
agreement, the Board shall have certified that at least a majority of the employees eligible to vote in such
ANNOTATED
|. Discrimination. - This is found in the first sentence thereof which considers as

ULP, to discriminate in regard to wages, hours of work and other terms and
conditions of employment in order to encourage or discourage membership jn
any labor organization.
bo
. Union security clause. — This is embodied in the second sentence thereof which
states that “(n)othing in this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining agent as a condition
for employment, except those employees who are already members of another
union at the time of the signing of the collective bargaining agreement.”
3. Agency fee. - This is described in the third sentence thereof in that “(e)mployees
of an appropriate bargaining unit who are not members of the recognized
collective bargaining agent may be assessed a reasonable fee equivalent to the
dues and other fees paid by members of the recognized collective bargaining
agent, if such non-union members accept the benefits under the collective
bargaining agreement, provided, that the individual authorization required under
Article 251 [242], paragraph (0) of this Code shall not apply to the non-members
of the recognized collective bargaining agent.”
The above concepts are discussed in details below.
V-A.
DISCRIMINATION
1. CONCEPT.
Discrimination has been defined as the failure to treat all persons equally when no
reasonable distinction can be found between those favored and those not favored. There is
discrimination only when one is denied privileges which are granted to others under similar
conditions and circumstances.” Thus, before a claim for discrimination can prosper, it must be
established that first, there is no reasonable distinction or classification that can be obtained
between persons belonging to the same class; and, second, persons belonging to the same
class have not been treated alike.’ It must be stressed, however, that discrimination per se is
not unlawful. Further, there can be no discrimination where the employees concemed are not
similarly situated.‘
Hence, in a strike case, Great Pacific Life Employees Union v. Great Pacific Life
Assurance Corporation,® the decision of the employer to consider only the top officers of the
striking union as “unfit for reinstatement” was held to be not essentially discriminatory and
constitutive of ULP under Article 259(e) [248(e)]. Discriminating in the context of this
provision involves encouraging or discouraging membership in any labor organization. This
has not been proved in the case at bar. The top union officers are not similarly situated with
the ordinary members. A union officer has larger and heavier responsibilities than a union
member. Union officers are duty bound to respect the law and to exhort and guide their
the authority of such labor organization to make such an agreement Provided further, That no shall discrimination
against an employee fr non-membership in a labor organization (A) fhe has reasonable ones beleute etcorh mowbestip
was not available to the employee on the same terms and conditions generally applicable to other members, or (B) if he has reasonable
Cee ad he ee aa tas Genie or erinald for easons cher than the fara ofthe employee fo ender the per
uniformly required as a condition ining of retaining membership[ T (See Nati i
29S. Code § 158 - Una lborpractes, Sec. 8(a)(})hereo), — Leet ees
1 Black's =e pices p. 467; orphan Mal We Inc., G.R. Nos. 164804 & 164784, Jan. 30, 2009;
Portuguez v. Comsavings ,G) é ; 2, 2007, citing Philippine American Life Gen. Insurance Co.
v. Gramaje, G.R. No. 156963, Nov. 11, 2004, 442 SCRA 274, 284-285, =
Caltex [Philippines], Inc. v. Philippine Labor Organization, G.R. No. L-5206, April 29, 1953, 92 Phi. 1014,
ow
glee Inc. v. Wise and Co., Inc. Employees Union-NATU, G.R. No, 87672, Oct. 13, 1989, 178 SCRA 536, 539.
no.
GR.No. 126717, Feb. 11, 1999.

ee or bias ana 701
members to do the same; their position mandates them to lead by example. By committing
prohibited activities during the strike, the union vice president demonstrated a high degree of
imprudence and irresponsibility. Verily, this justifies his dismissal from employment. Since
the objective of the Labor Code is to ensure a stable but dynamic and just industrial peace, the
dismissal of undesirable labor leaders should be upheld.! That respondent company opted to
reinstate all the strikers except the union president and vice president is an option taken in
good faith for the just and lawful protection and advancement of its interest. Readmitting the
union members to the exclusion of these two officers was nothing less than a sound exercise
of management prerogative, an act of self-preservation in fact, designed to insure the
maintenance of peace and order in the company premises. Specifically, the dismissal of the
union vice president who had shown his capacity for unmitigated mischief was intended to
avoid a recurrence of the violence that attended the fateful strike.
2. DISCRIMINATION AND CLASSIFICATION, DISTINGUISHED.
Discrimination should be distinguished from classification. While discrimination is
considered ULP, classification is not because it merely differentiates the employees in
accordance with their respective jobs and accords them the appropriate levels of pay or
benefits due them by reason thereof.
3. COVERAGE OF PROHIBITION.
What is prohibited as ULP under the law is 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.”
4, MATERIALITY OF PURPOSE OF ALLEGED DISCRIMINATORY ACT.
For discrimination by reason of union membership to be considered ULP, it must
have been committed to encourage or discourage such membership in the union. In the
following cases, the act of management was not considered ULP since discrimination was
never established by evidence:
(1) Rizal Cement, where the refusal to allow the employees to work and the
requirement that they should stay out of the premises in the meantime while the strike was
still going on in the factory not declared indicative of discrimination because this was borne
out of the company’s justified apprehension and fear that sabotage might be committed in the
warehouse where the products, machinery and spare parts were stored. It has never been
shown that the act of the company was intended to induce the employees to renounce their
union membership or as a deterrent for non-members to affiliate therewith; nor as a
retaliatory measure against the activities of the union or in the furtherance of the cause of the
union.
(2) Luzon Stevedoring, where it was pronounced that the disapproval of the
application for leave of absence with pay does not necessarily indicate discrimination, unless
it could be shown that such disapproval was due to the employee’s union membership or
activity.
(3) Bondoc v. CIR where the employee’s charge that his employer has
discriminated against him in the grant of promotion because he was not a member of any
labor union was debunked by the Supreme Court because he failed to mention any specific
nenta
1 Citing ContiCement l Labor Union (NLU)v. Conti
Corporation nenta
Cement l G.R. No, 51544, Aug. 30, 1990, 189
Corporation,
SCRA 134.
? Article 259(e) [248(e)], Labor Code.
3 Rizal Cement Workers Union v. Madrigal and Co., G.R. No. L-19767, Apri 30, 1964, 10 SCRA 831.
4 Luzon Stevedoring Comorationv. CIR, G.R. Nos. L-17411 and L-18683, Dec. 31, 1965, 15 SCRA 660.
3 GR_No. 33955, Jan. 26, 1989.
ANNOTATED
union. Moreover, it is not believable for the employer to harass and oppress an employee to
force him to join a union, for it cannot be comprehended how his joining a union would
benefit his employer.
But in the following cases, the employer was declared guilty of discrimination:
(1) Manila Pencil,’ where it was ruled that even assuming that business conditions
justify the dismissal of employees, it is ULP of the employer to dismiss permanently only
union members and not non-unionists.
(2) Manila Railroad? where the non-regularization of long-time employees because
of their affiliation with the union while new employees were immediately regularized was
declared an act of discrimination.
(3) AHS/Philippines,> where the employer transferred the union president from the
main office in Manila to Cebu at the time when the union was still being organized. It was
held that the uneven application of its marketing plan resulting in the said transfer of the
union president is patently an act of discrimination constitutive of ULP.
5, DISMISSING ONLY A FEW BUT NOT ALL OF THE ERRANT EMPLOYEES,
EFFECT.
Employees have no right to continue working upon their own terms while rejecting
the standards desired by their employer. It is not ULP for the employer to dismiss employees
who engage in slowdown. This holds true even if the employer dismissed only some of the
employees who participated in the slowdown where such dismissal is made to serve as an
example to stop the slowdown and not for discriminatory reasons."
6. IMPOSITION OF CONDITIONS ON RETURNING STRIKERS, EFFECT.
a. Requiring to fill up forms, valid.
The act of the employer in requesting returning strikers to fill up forms to indicate
the date of their availability for work is not ULP.*
b. Promise not to destroy company property, valid.
In the same vein, the requirement by the company that returning strikers should
promise not to destroy company property and no acts of reprisal should be made against
union members who did not participate in the strike is not ULP. It is an act of self-
preservation on the part of the employer which is designed to maintain industrial peace in the
company premises.°
c. Medical examination as pre-condition to re-admission for work, not proper.
In Davao Free Workers Front v. CIR,’ involving a valid strike occasioned by the
ULP of the employer, it was held that requiring medical examination as a condition precedent
for reinstatement or return to work is not proper. This is so because the filing and pendency of
a ULP case, as in the case at bar, presupposes a continuing employer-employee relationship
and when the case is decided in favor of the workers, this relationship is, in law, deemed to
have continued uninterruptedly notwithstanding their unlawful dismissal or the lawful strike
and stoppage of work and, hence, seniority and other privileges are preserved in their favor.
To require them to undergo a physical or medical examination as a pre-condition of
Manila Pencil Co., Inc.v. CIR, G.R. No. L-16903, Aug. 31, 1965, 14 SCRA 955.
Manila Railroad Co. v. Kapisanan ng mga Manggagawa sa Manila Railroad Co., G.R. No. L-19728,
July 30, 1964.
ee
AHS/Philippines Employees Union v. NLRC, G.R. No. 73721, March 30, 1987.
48 Am Jur 2d 937.
Lakasng Manggagawang Makabayan v. Marcelo Enterprises, G.R. No. L-38258, Nov. 12, 1982, 118 SCRA 422.
May 16, 1967, 20 SCRA 49.
Pagkakaisang Itinataguyod ng mga Manggagawa sa Ang Tibay v. Ang Tibay, Inc., G.R. No. L-22273,
i
GR_No. L-29356, Oct. 31, 1974, 60 SCRA 408.

qT
TNS eee =
reinstatement or return to work simply because of the long pendency of their case which is
due to no fault of theirs would not only defeat the purpose of the law and the constitutional
and statutory mandates to protect labor but would work to their unfair prejudice as aggrieved
ies and give an undue advantage to employers as the offenders who have the means and
resources to wage attrition and withstand the bane of protracted litigation. Hence, the
aggrieved workers may be subjected to periodic physical or medical examination as old
reinstated workers, but not as a precondition to their reinstatement or return to work with the
important consequence that if they are found to be ill or suffering from some disability, they
would be entitled to all the benefits that the laws and company practices provide by way of
compensation, medical care, disability benefits and gratuities, etc. to employees and workers.
d. When physical fitness is declared a valid pre-condition for re-admission to
work.
In extreme contrast to the said Davao Free Workers case is Mercury Drug Co., Inc.
v. CIR,' where it was held that an employer should not be compelled to reinstate an employee
who is no longer physically fit for the job from which he was ousted. However, the employee
can be reinstated after securing a certification of his physical fitness from a government
physician. In accordance with this Mercury Drug ruling, it was likewise ruled in Jackbilt that
the strikers, before they can be reinstated, should undergo the required usual physical and
medical examinations by petitioners’ company physician, to determine their illness for
continued work and employment. Thus, petitioners were directed to immediately reinstate the
strikers formerly found to have been suffering from tuberculosis and other illness upon
presentation by them of certification of their physical fitness for work issued by a government
physician.
7. RECALL OF SOME BUT NOT ALL STRIKERS, EFFECT.
Recall of workers clearly falls within the ambit of management prerogative.> The
employer can exercise this prerogative without fear of any liability so long as it is done in.
good faith for the advancement of its interest and not for the purpose of defeating or
circumventing the rights of its employees under special laws or valid agreements. It is valid
as long as it is not performed in a malicious, harsh, oppressive, vindictive or wanton manner
or out of malice or spite.
In Great Pacific Life,‘ it was ruled tbat the act of respondent company in opting to
reinstate all the strikers, except Domingo and de la Rosa, is an option taken in good faith for
the just and lawful protection and advancement of its interest. Readmitting the union
members to the exclusion of Domingo and de la Rosa was nothing less than a sound exercise
of management prerogative, an act of self-preservation in fact, designed to insure the
maintenance of peace and order in the company premises. The dismissal of de la Rosa who
had shown his capacity for unmitigated mischief was intended to avoid a recurrence of the
violence that attended the fateful strike.
8. DISCRIMINATION IN GRANT OF BONUS.

In Philippine Blooming Mills,> a case decided by the NLRC, the employer reserved
its right under the CBA to grant better bonus to those who are exceptionally good or efficient.
It was held that it is not discriminatory or ULP for said employer to give such bonus to non-
* GR. No, L-23357, Apri 30, 1974, 56 SCRA 694. ,

2 Jackbit Concrete Block Co., Inc. v. Norton & Harrison Co. and Jackbit Concrete Block Co. Labor Union- NLU, GR. Nos. L-39174 & L-
39186, May 7, 1976.
Company
® Manila Electric 414129, Oct 24, 1996, 263 SCRA 531,
Life Assurance
Groat acl [PAFLU]
Ung w- Orgarizafion Comoran, GR. No, 126717, Fb, 11, 1980,
Great PaceBlooming
:5 Philpgine Mls csEmployees
Lic ont . Philpine Blooming Mils Co, nc., NLRG Case No. RB-WV-295175, June 4,
1976.
To LAW ON LABOR RELATIONS
ANNOTATED
union members, it being clear that many union members were also given the bonus and itwas
purely a valid exercise of management prerogative.
But in Manila Hotel,’ it was enunciated that there was unjust discrimination when
management departed from its previous practice of dividing equally to all employees certain
percentage of its net profit as Christmas bonus - giving only to its employees in the operation
where there was no union and not giving any to its unionized departments.
9. RUNAWAY SHOP.
A “runaway shop” is defined as an industrial plant moved by its owners from one
location to another to escape union labor regulations or state laws. The term Is also used to
describe a plant moved to a new location in order to discriminate against employees at the old
plant because of their union activities.? A “runaway shop”, in this sense, isa relocation rather
than an actual termination of operations® resorted to by an employer without first bargaining
with the statutory representative of its employees* or with the primary intent of escaping this
representative;> it is motivated by anti-union animus rather than for business reasons.®
In A.C. Ransom,’ the “run-away corporation” was declared liable not only for the
backwages but also for the reinstatement of the terminated employees of A.C. Ransom
(Phils.) Corporation. In so holding, the Supreme Court declared that aggravating Ransom's
clear evasion of payment of its financial obligations is the organization of a "runaway
corporation,” Rosario Industrial Corporation, in 1969 at the time the ULP case was pending
before the Court of Industrial Relations (CIR) by the same persons who were the officers and
stockholders of A.C. Ransom, engaged in the same line of business as A.C. Ransom,
producing the same line of products, occupying the same. compound, using the same
machineries, buildings, laboratory, bodega and sales and accounts departments used by A.C.
Ransom and which is still in existence. Both corporations were close corporations, owned
and managed by members of the same family. Its organization proved to be a convenient
instrument to avoid payment of backwages and the reinstatement of the 22 workers. This is
another instance where the fiction of separate and distinct corporate entities should be
disregarded. It is very obvious that the second corporation seeks the protective shield of a
corporate fiction whose veil in the present case could, and should, be pierced as it was
deliberately and maliciously designed to evade its financial obligation to its employees.
V-B.
UNION SECURITY
1. NATURE AND PURPOSE OF A UNION SECURITY CLAUSE.
The stipulation in a CBA based on the second sentence of paragraph [e] of Article
259 [248], commonly known as the “union security clause”, allows the parties thereto to
enter into an agreement compulsorily requiring membership of the covered employees in the
sole and exclusive bargaining agent (SEBA) which successfully negotiated the CBA, as a
' Manila Hotel Co. v. Pines Hotel Employees Association, G.R. No. L-30818, Sept 28, 1972
.
* Textle Workers Union v. Darlington Mig. Co., 380 US 263, 12 L Ed. 2d, 827, 85, S Ct 994; Wiliam P. Statsky, Wests Legal
Thesaurus/Di Special cion
Deluxe Edition,
ary, p. 671.
* Texte Workers Union of Americav. Darlington Mig. Co., 380 U.S. 263, 268 (1965); Garwin Corp, 153 NLRB. 664 (1965); Califomia
Footwear Co., 114 NLRB. 765 (1955),
* See Sidele Fashions, inc., 133 N.LR.B. 547, §52-54 (1961); Philadelphia Dress Joint Board v. NLRB, 305 F.2d 825
industial Fabricafng inc., 119 NLRB. 162, 163-72 (1957); NLRB v. Mackneish, inc., 272 F.2d 184 (6th Cir, 1959) (3d Cir. 1962}
: Schieber Millinery
Co., 26 NLRB. 937 (1939).
* Garwin Corp., 153 N.LR.B. 664, 676 (1965); Local 57, Intemational Ladies’ Garment Workers v. NLRB, 374 F.2d 295 (D.C.
NLRB v. Preston Feed Corp, 309 F.2d 345 (4th Cir, 1962). Ca. 1967);
* Complex Electronics Employees Association [CEA], etc. v. NLRC, G.R. No. 121315, July 19, 1999; Complex Electronics Corporation v.
NLRC, GR. No. 122136, July 19, 1999.
7 A.C. Ran Laborsom
Union-CCLU v. NLRC, G.R. No. L-69494, May 29, 1987.
condition for their continued employment. The only exceptions to this rule where compulsory
membership in the SEBA cannot be enforced are as follows:
(1) In the case of employees who, at the time of the signing of the CBA, were
already members of another union;! or
(2) In the case of religious objectors.”
“Union security” is a generic term which is applied to and comprehends “closed
shop,” “union shop,” “maintenance of membership” or other forms of agreement which
impose upon employees the obligation to acquire and retain membership in the SEBA as a
condition sine qua non for their continued employment. In other words, the purpose of a
union security arrangement is, as the term “union security” signifies, to guarantee the
continued existence of the SEBA through enforced membership for the benefit of the
workers.’ The employer under this clause recognizes that the membership of employees in
the SEBA which negotiated the CBA should be maintained and continued as a condition for
and retention of employment. The obvious purpose is to safeguard and ensure the union’s
continued existence and to strengthen and protect it from the fickleness or perfidy of its own
members. Without this clause, the existence of the SEBA is always subject to uncertainty as
its members may resign anytime resulting in the decimation of its ranks. The SEBA becomes
gradually weakened and increasingly vulnerable to company machinations. In this security
clause therefore lies the strength of the SEBA during the administration and enforcement of
the CBA; it is this clause that provides labor with substantial power in collective bargaining.‘
The law thus allows union security stipulations as a means of encouraging workers
to join and support the union of their choice in the protection of their rights and interests vis-
a-vis the employer. By thus promoting unionism, workers are able to negotiate with
management on an even playing field and with more persuasiveness than if they were to
individually and separately bargain therewith.
2. EMPLOYEE HAS RIGHT TO JOIN OR NOT TO JOIN A UNION OR TO
RESIGN THEREFROM.
a. Decision of employee to join or not to join a union should be respected.
Generally, the right to join a union carries with it the concomitant right to abstain
from joining a union or to resign therefrom. It is the employee who should decide for himself
whether or not he should join a labor organization and in the event he chooses to join one, he
himself makes up his mind as to which association he would join; and even after he has
joined one, he still retains the liberty and power to resign, leave and cancel his membership
with said organization at any time.* However, it is valid for the employer and the SEBA to
stipulate on a “union security clause” although it must be stressed that there is no law which
requires mandatorily that this clause be included in the CBA. This is clear from the tenor of
the second sentence of paragraph (e) of Article 259 [248], to wit:
“Nothing in this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining agent as a condition for
1 See paragraph (e) of Article 259 [248], Labor Code.

2 Victoriano v. Elizalde Rope Workers Union, G.R. No. L-25246, Sept 12, 1974, 59 SCRA S4.
2 Bank of the Philippine Islands v. BP! Employees Union-Davao Chapter-Federation of Unions in BP! Unibank, G.R. No. 164301, Aug. 10,
2010; Picop Resources, Ine. (PRI) v. Dequilla, G.R. No. 172666, Dec. 7, 2011; Picop Resources, inc. (PRI) v. Tafieca, G.R. No. 160828,
Aug. 9, 2010; National Union of Workers in Hotels, Restaurants and Allied Industries - Manila Hotel Pavilion Chapter v. NURC, G.R. No.
179402, Sept. 30, 2008.
“Caltex Refnery Employees Associaton [CREA] v. Brilantes, G.R. No, 123782, Sept. 16, 1997, 279 SCRA 218, 236.
5 Del Monte Philippines, Inc. v. Saldivar, GR. No, 158620, Oct 11, 2006, 504 SCRA 192, 203-204; Liberty Flour Mills Employees v. Liberty
Flour Mills, inc,, G.R. Nos. 58768-70, Dec. 29, 1989, 180 SCRA 668, 679-680.
© Victoriano v. Elizalde Rope Workers Union, G.R. No. L-25246, Sept 12, 1974, 59 SCRA 54. in Pattem Makers v. NLRB, 473 U.S. 95
(1985), the United States Supreme Court held that union members have the right to resign their union membership at any time.
ss

ANNOTATED
employment, except those employees who are already members of another union at
the time of the signing of the collective bargaining agreement”
5. The nature of such clause is contractual.

It is clear, therefore, that a union security clause, not being mandatorily required by
law to be part of the CBA, is simply contractual in nature, being a mere creation of the parties
through their mutual agreement thereon. As such, it can be made subject to such terms and
conditions that the parties may agree on. This explains the variation in its forms.'
c. The right not to join a union is not absolute since it may be restricted.
The right of an employee not to join a SEBA is not absolute and must give way to
the collective good of all members of the collective bargaining unit (CBU). When certain
employees are obliged to join a particular SEBA as a requisite for continued employment, as
in the case of a union security clause, this condition is a valid restriction on the freedom or
right not to join any labor organization because it is in favor of unionism.
Time and again, it has been ruled that the individual employee’s right not to join a
SEBA may be validly restricted by a union security clause in a CBA. Theoretically, there is
nothing in law or in jurisprudence to prevent an employer and a SEBA from stipulating that
existing employees (who already attained regular and permanent status but who are not
members of any union) are to be included in the coverage of a union security clause. Even
Article 259(e) [248(e)] of the Labor Code only expressly exempts old employees who
already have a union from inclusion in a union security clause.”
d. Union security clause does not violate constitutional right to freedom of
association.
A union security clause in a CBA is not a violation or a restriction of the
employee’s right to freedom of association guaranteed by the Constitution. It is unsurprising
that significant provisions on labor protection of the 1987 Constitution are found in Article
XIII on Social Justice. The constitutional guarantee given the right to form unions and the
State policy to promote unionism have social justice considerations. In People’s Industrial,? it
was recognized that “[I]abor, being the weaker in economic power and resources than capital,
deserves protection that is actually substantial and material.”
The rationale for upholding the validity of a union security clause in a CBA, even if
it impinges upon the individual employee’s right or freedom of association, is not to protect
the union for the union’s sake. Laws and jurisprudence promote unionism and afford certain
protections to the certified SEBA in a unionized company because a strong and effective
union presumably benefits all employees in the bargaining unit since such a union would
be in a better position to demand improved benefits and conditions of work from the
employer. This is the rationale behind the State policy to promote unionism declared in the
Constitution. Nonetheless, settled jurisprudence has already swung the balance in favor of
unionism, in recognition of the fact that ultimately the individual employee will be benefited
by that policy. In the hierarchy of constitutional values, the right to abstain from joining a
labor organization is subordinate to the policy of encouraging unionism as an instrument of
social justice.‘
‘Such as closed shop,maintenance of membership agreement, union shop, modified union shop, exclusive bargaining, bargaining for
members only, agency shop; or preferential hiring agreement
2 Berk afte Frlgpie Mendy. BP Enrlayens UsereDimao Chaplee oder of tira i Una, GIR: No, (BAO, 1
3 People’s Industrial and Commercial Employees and Workers ization v. 's Industrial and Commercial , GR. No.
L-37687, March 15, 1982, 112 SCRA 440, 455. ess ee
“ Bank of the Philippine islands v. BP! Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, Ibid., citing Manila Mandan
Employees Union v. NLRC, G.R. No. 76989, Sept. 29, 1987, 154 SCRA 368, 375; Liberty Flour Mis Employees v. Liberty Flour Mis,
THE LABOR CODE OF THE PHILIPPINES
Article
259 [248]. Unfair Labor Practices of Employers 707
V-B-1.
VARIOUS FORMS OF UNION SECURITY ARRANGEMENTS
1. CLASSIFICATION OF UNION SECURITY ARRANGEMENTS.
a. Various forms.
Generally, a union security clause may take the form of:
. Closed shop agreement;
he
. Maintenance of membership agreement;

. Union shop agreement;
A tn mb
On
. Modified union shop agreement;

. Exclusive bargaining agreement;
. Bargaining for members only agreement;
. Agency shop agreement; or
. Preferential hiring agreement
b. Modification of arrangements.
The above classification admits of certain modified types which the parties may
agree upon in the CBA depending on the peculiar requirements of the situation of the parties
thereto.
c. Validity of union security clauses.
Article 259(e) [248(e)] of the Labor Code specifically recognizes the aforesaid
arrangements as valid forms of union security and strength. They do not constitute ULP nor
are they violations of the freedom of association clause of the Constitution.!
@ Ignorance of the existence of the union security provision in the CBA, not an
excuse.
In Manalang,? petitioners argued that their expulsion from the union - Bagong
Buhay Labor Union (BBLU) - for affiliating with another union was not valid since they
were not aware of the union security clause in the CBA. It was held, however, that “even if
we assume, in gratia argumentis, that the petitioners were unaware of the stipulations set
forth in the collective bargaining agreement, since their membership in BBLU prior to their
expulsion therefrom is undenied, there can be no question that as long as the agreement with
closed-shop provision was in force, they were bound by it. Neither their ignorance of, nor
their dissatisfaction with, its terms and conditions would justify breach thereof or the
formation by them of a union of their own.” This is so because the CBA gives rise to valid
enforceable contractual relations, against the individual union members in matters that affect
them peculiarly, and against the union in matters that affect the entire membership or large
classes of its members. Further, a union member who is employed under an agreement
between the union and his employer is bound by the provisions thereof, since it is a joint and
several contract of the members of the union entered into by the union as their agent.
2. CLOSED-SHOP AGREEMENT.
a. Nature and definition.
A “closed-shop” arrangement may be defined as a scheme in which, by agreement
between the employer and its employees or their representatives, no person is allowed to be
Inc., G.R. Nos, §8768-70, Dec. 29, 1989, 180 SCRA 669; Lirag Textile Mills, Inc. v. Blanco, G.R. No, L-27029, Nov. 12, 1981, 109 SCRA
87; Manalangv. Artex Development Company, Inc., G.R. No. L-20432, Oct. 30, 1967, 21 SCRA 561.
‘Tanduay Distillery Labor Union v. NLRC, G.R. Nos. 75037 and 75055, April 30, 1987, 149 SCRA 470.
2 Manalang v. Artex Development Company, inc., G.R. No. L-20432, Oct 30, 1967,21 SCRA 561,
> See Capra v. Local Lodge, 102 Colo.
63, cited in Dangel & Shriber, The Law of Labor Unions, 1941 ed., p. 342.
ANNOTATED
employed in any departments of the enterprise unless he/she is, becomes and, for the duration
of the agreement, remains a member in good standing of a SEBA entirely comprised of or of
which the employees in interest are a part.!
Basically, this kind of agreement stipulates the undertaking by the employer not to
hire or employ any person who is not a member of the SEBA. Once employed, it is required
that the said person should remain a member of the SEBA in good standing as a condition for
his/her continued employment, at least during the whole duration of the CBA. This
for their
requirement for employees to become members of the SEBA as a condition
out to
continued employment redounds to their benefit and advantage because by holding
wields group
loyal members a promise of employment in the closed shop, the union
solidarity. In fact, it is said that “the closed shop contract is the most prized achievement of
unionism.” It adds membership and compulsory dues.”
b. Validity of closed shop arrangement.
shop” is nota
To reiterate, just like any of the union security arrangements, “closed
.’ In fact, it
restriction on the freedom of association guaranteed under the Constitution
tution.‘
uphold s the principle of sanctity or inviolability of contracts guaranteed by the Consti
For instance,
Its validity has long been upheld by the Supreme Court in a long line of cases.
Labor Code, it
in Aguinaldo’s Echague,s which was decided long before the advent of the
has chosen to
was declared that Congress, in the exercise of its policy-making power,
of the
approve the concept of closed shop, when it legalized in R.A. No. 875,° any agreement
condition
employer with a labor organization requiring membership in such organization as a
ees.
of employment provided such labor organization properly represents the employ
The foregoing pronouncement of the Supreme Court had been reiterated in a
es
number of cases.” Thus, it is beyond cavil that Article 259(e) [248(e)] specifically recogniz
the validity of closed shop arrangement as a form of union security.*
c. Strict interpretation of closed shop agreement.
While closed shop agreement is allowed to further increase the effectiveness of
unions, it is recognized that this arrangement has some detrimental effects on the workers
themselves. In Anakan Lumber,? it was pronounced that a closed shop arrangement is “so
harsh that it must be strictly construed” and that “doubts must be resolved against
[it] Further, “[iJn order that an employer may be deemed bound under a collective
1 Del Monte Philippines, Inc. v. Saldivar, G.R. No, 158620, Oct. 11, 2006 citing Rothenberg on Labor Relations, p. 48; cited in Confederated
Sons of Labor v. Anakan Lumber Co., G.R. No. L-12503, Apri 29, 1960, 107 Phi. 915; See also Bank of the Philippine Islands v. BPI
Inc. (PRI),v.
Employees Union-Davao Chapler-Federation of Unions in BP! Unibank, G.R. No. 164301, Aug. 10, 2010; Picop Resources
Dequila, G.R. No. 172666, Dec. 7, 2011; Picop Resourves, Inc. (PRI) v. Tafieca, G.R. No. 160828, Aug. 9, 2010; Inguillo v. First
Philippine Scales, Inc., G.R. No. 165407, June 5, 2009, 588 SCRA 471, 485-486
2 National Labor Union v, Aguinaldo’s Echague, G.R. No. L-7358, May 31, 1955; See also Bank of the Philippine Islands v. BP! Employees
_
Union-Davao Chapler-Federation of Unions in BPI Unibank, supra; Manila Mandarin Employees Union v, NLRC, G.R. No. 76989, Sept
29, 1987,
3 Lirag Textile Mills v. Blanco, 109 SCRA 87; Vilar v. Inciong, G.R. Nos. L-50283-84, April 20, 1983, 121 SCRA 444; Ferrer v. NLRC, G.R.
No. 100898, July 5, 1993, 224 SCRA 410, 418; Mania Mandarin Employees Unionv, NLRC, G.R. No. 76989, Sept. 29, 1987; Manalang
v. Artex Development Company, Inc., G.R. No. L-20432, Oct 30, 1967, 21 SCRA 561; National Brewery & Alied Industries labor Union of
a
the Philippinesv. San Miquel Brewery, inc., et al., L-18170, Aug. 31, 1963; Bacolod-Murcia Milling Co.v, National Employees’ Security
Union, L-9003, Dec. 21, 1956; National Labor Union v, Aguinaldo's Echague, L-7358, May 31, 1655; Ang Malayang Manggagawa ng Ang
sahara
Tibay Enterprises v. Ang Tibay, L-8259, Dec. 28, 1957.

Victorias Milling Co., Inc. v. Victoria s-Manapl
Workers a G.R. No, L-18467, Sept. 30, 1963.
Organization - PAFLU,
sna me
Natonal Labor Union v. Aguinaldo's Echague, Inc., G.R. No. L-7358, May 31, 1955, 97 Phil. 184;51 0. G., No. 6, p. 2899,
Othenwise known as the “Magna Carta of Labor.” See Section 4, Sub-section (a), paragraph 4 thereof.
May 30, 1956, ,
Such as the cases of Tolentino v. Angeles, [G.R, No, L-8150 62 O. G., 4262}; Bacolod: Murcia Miling Co., Inc. v. National
=|
Employ ees
Workers Security Union, [G.R. No. L-9003, December 21, 1956,
53 0. G. 615); Ang Malayang Manggagawa ng Ang Thay
Enterprise s [G.R. No. L-8259, Dec. 23, 1957}; Confederated Sons of Labor v. Anakan Lumber Co., [G.R. No. L-12503, Apri
v. Ang Tibay,
29, 1960, 107 Phil 915}.
* Tanduay Distillery Labor Union v. NLRC, G.R. Nos. 75037 and 75055, Apri 30, 1987, 149 SCRA 470.
4 Confederated Sons of Labor v. Anakan Lumber Co., G.R. No. L-12503, April 29, 1960, 107 Phil. 915.
THE LABOR CODE OF THE PHILIPPINES
Article259 [248]. Unfair Labor Practices of Employers 702
bargaining agreement to dismiss employees for non-union membersh
ip, the stipulation to this
effect must be so clear and unequivocal as to leave no room for doubt thereon.”
Guijarno v. CIR,’ elucidated the downside of a closed shop arrangement and its
compulsory membership; thus, it could happen that a closed-shop which assures further
weight to a labor union at the bargaining table could be utilized against minority groups or
individual members thereof. In this sense, the power in a collectivity could be the means of
crushing opposition and stifling the voices of those who are in dissent. The right to join others
of like persuasion is indeed valuable. An individual by himself may feel inadequate to meet
the exigencies of life or even to express his personality without the right to association being
vitalized. It could happen though that whatever group may be in control of the organization
may simply ignore his most-cherished desires and treat him as if he counts for naught. The
antagonism between him and the group becomes marked. Dissatisfaction, if given
expression, may be labeled disloyalty. In the labor field, the union under such circumstances
may no longer be a haven of refuge but indeed as much of a potential foe as management
itself.
3. MAINTENANCE OF MEMBERSHIP AGREEMENT.
There is maintenance of membership arrangement when employees who are SEBA
members as of the effective date of the agreement, or who thereafter become its members,
must maintain their union membership as a condition for their continued employment until
they are promoted or transferred out of the bargaining unit, or the agreement is terminated.
Its role is to protect the SEBA’s current membership. By its express terms, it covers and
renders continued union membership compulsory for: (1) those who were already SEBA
members at the time the CBA was signed; and (2) the newly-hired employees who will
become regular during the lifetime of the CBA.
This form of union security clause is considered the mildest because it does not
require non-members of the SEBA to join the latter but simply stipulates that those who are
its members at the time of the execution of the CBA and those who may, after its execution,
on their own, voluntarily join it, should maintain their membership in good standing therein
for the whole duration of the CBA as a condition for their continued employment until they
are promoted or transferred out of the bargaining unit or the agreement is terminated. Simply
put, employees who are not members of the SEBA at the time of the execution of the CBA
are not, in any manner, required to become its members. Employees hired after the execution
of the CBA are likewise not duty-bound to join it. They may or may not join it4
4. UNION SHOP AGREEMENT.
There is union shop arrangement when all new regular employees are required to
join the SEBA within a certain period as a condition for their continued employment:5 Its role
is to compel membership of those who are not yet SEBA members. Under this scheme, the
employer is given the freedom to hire and employ any person who is not a member of the
SEBA. Once such person becomes an employee, he is required to become a member of the
1 GR. Nos, L-28791-93, Aug. 27, 1973.

? See also the dissenting opinion of Mr. Justice Antonio T. Carpio in Bank of the Philippine Istands v. BPI Employees Union-Davao Chapter-
Federation of Unions in BP! Unibank, G.R. No. 164301, Aug. 10, 2010.
3 Bank of the Philippine Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BP! Unibank, G.R. No. 164301, Aug. 10,
2010; Picop Resources, Inc. (PRI)v. Dequilla, G.R. No. 172666, Dec.7, 2011; Picop Resources, Inc. (PRI) v. Tafleca, G.R.
No. 160828,
Aug. 9, 2010; Inguillov. First Philippine Scales, Inc., G.R. No. 165407, June 5, 2009, 588 SCRA 471, 485-486.
4 See Alabang County Club, Ine.v. NLRC, G.R. No. 170287, Feb. 14, 2008.
§ Alabang Country Club, Inc. v. NLRC, supra; Bank of the Phifippine Islands v. BPI Employees Union-Davao Chapter-Federation of Unions
in BPI Unibank, G.R. No. 164301, Aug. 10, 2010; Picop Resources, Inc, (PRI) v. Dequilla, G.R. No. 172666, Dec. 7, 2011; Picop
Resources, Inc. (PRI) v. Tafieca, G.R. No. 160828, Aug. 9, 2010; Inguillo v. First Philippine Scales, Inc., G.R. No. 165407, June 5, 2009,
588 SCRA 471, 485-486,
ANNOTATED
SEBA and to remain as such member in good standing for the whole duration of the
effectivity of the CBA as a condition for his continued employment.
5. MODIFIED UNION SHOP AGREEMENT.
Employees under this arrangement who are not SEBA members at the time of the
signing or execution of the CBA are not required to join it. However, any and all workers
hired or employed after the signing or execution of the CBA are required to join the SEBA.
6. EXCLUSIVE BARGAINING AGENT AGREEMENT.
The union which negotiated and concluded the CBA with management is
considered and recognized as the SEBA of all the employees covered by the bargaining unit,
irrespective of whether they be members or not of the SEBA.
7. BARGAINING FOR MEMBERS ONLY AGREEMENT.
Under this arrangement, the union which negotiated and concluded the CBA with
management is recognized as the SEBA only for its own members.’ This kind of union
security is not allowed in our jurisdiction since the SEBA is required to represent not only its
members but all the employees covered by the bargaining unit where such SEBA operates
and which it represents.
8. AGENCY SHOP AGREEMENT.
Under this scheme, there is no requirement for non-members of the SEBA to
become its members. However, it is required that such non-SEBA members should pay to
the SEBA an agency fee as a condition for their continued employment. The third sentence of
Article 259(e) [248(e)] of the Labor Code validates this arrangement.
9. PREFERENTIAL HIRING AGREEMENT.
It is the principal feature of this arrangement that the employer gives preference in
hiring to the members of the SEBA under equal circumstances and qualifications. Once hired
or employed, they are required to maintain their membership in good standing in the SEBA
for the entire duration of the CBA as a condition for their continued employment.
V-B-2.
RELIGIOUS OBJECTORS AND OTHER EXEMPTED EMPLOYEES
1. EMPLOYEES EXEMPTED FROM COVERAGE OF UNION SECURITY
CLAUSE.
All employees in the bargaining unit covered by a Union Security Clause in their
CBA with management are subject to its terms. However, under pertinent law and
jurisprudence, the following kinds of employees are exempted from its coverage, namely:
1. Employees who, at the time the union security agreement takes effect, are bona-
fide members of a religious organization which prohibits its members from
joining labor unions on religious grounds [See discussion below];
2. Employees already in the service and already members of a union other than the
SEBA at the time the union security agreement took effect;?
3. Confidential employees who are excluded from the rank-and-file or supervisory
bargaining unit;*
1 Rothenberg on Labor Relations, page 410.

2 Victorianov, Elizalde
Rope Workers’ Union, GR. No. L-25246, Sept. 12, 1974, 59 SCRA 54, 68.
3 oe iesansa Manufacturing Co. v. CIR, G.R. No. L-16561, Jan. 28,1961, 1 SCRA 353, 356; S
1 INC. V. . L-15768, April 29, 1961,
1 SCRA 130; Sta. Cecilia Sawmills v. CIR G.R. No. L-19273-4, Feb. 2,
1964, 10 SCRA 433, 437, ° . *
4 Metrolab Industries, Inc. v. Confesor, G.R. No. 108855, Feb. 28, 1996, 254 SCRA 182, 197.
pn nm
THE
™
4. Supervisory employees who are excluded from becoming members of the rank-
and-file union and vice-versa;! and
5. Employees excluded from the coverage of the union security clause per express
mutual agreement of the parties as stipulated in the CBA.”
2, EFFECT OF RELIGIOUS FREEDOM ON THE UNION SECURITY CLAUSE.
a. Constitutional basis.
Religious freedom is one of the hallowed and inviolable rights guaranteed in the
1987 Constitution, thus:
7 “Section 5. No law shall be made respecting an establishment of
religion, or prohibiting the free exercise thereof. The free exercise and enjoyment
of religious profession and worship, without discrimination or preference, shall
forever be allowed. No religious test shall be required for the exercise of civil or
political rights."
b. Historical background.
Peace
Under the 1953 law, R.A. No. 875,‘ otherwise known as the “Industrial
a labor organization to
Act,” the employer is not precluded from making an agreement with
organization is the
require membership therein as a condition of employment, if such labor
No. 3350,5 was enacted
representative of the employees. In 1961, an amendatory law, R.A.
shop agreement
which exempts from the operation of a closed shop or a union security
members in any such labor
“members of any religious sects which prohibit affiliation of their
organization.”
R-A. No. 3350, was
One of the early challenges to R.A. No. 875, as amended by
y. Abiera,* where,
posed in the 1970 case of Lakas ng Manggagawang Makabayan [LMM] the
union, notwithstanding
on the basis of a union security clause in the CBA, petitioner
prevail upon the employer, the
above saving clause introduced by R.A. No. 3350, was able to private
Industrial Corporation, to terminate the services of
Marinduque Mining and
of the tenets of which prohibits
respondents, adherents of the Iglesia ni Cristo (INC) sect, one
CBA stipulation, the High Court
membership in any labor organization. In nullifying such the 1961
within its terms,
declared that the said 1967 CBA is deemed to have incorporated
of any religious sects
amendment of R.A. No. 875 providing such exemption of members
is thus well-settled that an
from being affiliated with any labor organization. The principle parties
the need for the
existing law enters into and forms part of a valid contract without of its provisions
expressly making reference to it. Only thus could its validity insofar as some
act granting the above exemption to
are concerned be assured. Thus, “unless the legislative validity
against its
certain religious sects remains unmodified and no challenge is hurled
elie"
7
faithfully to its terms. It is

resulting in its nullification, the parties to any contract must live up
may be, it
a fundamental postulate that however broad the freedom of contracting parties
5
ne Ot
a legal proscription.
Rak
does not go so far as to countenance disrespect for or failure to observe

F
must yield to it. That is

The statute takes precedence; a stipulation in a collective bargaining
to adhere to the rule of law.”
Supreme Court in
The constitutionality of said amendatory law was upheld by the
the leading cases of Victoriano’ and Basa.' The principal issue raised in these cases was
1 Atticle 255 [245], Labor Code.

of Unions in BPI Unibank, GR. No. 164301, Aug. 10,
poe of the Philippine istandsv. BPI Employees Union-Davao Chapter-Federation
N
Section 5, Article I [Bill Pgs).

of
Section 4 fal, paragraph 4 of R.A. No. 875 which took effect on January 17, 1953.
smoek
Enacted on June 18, 1961, amending Section4 (a), paragraph 4 of R.A. No. 875.
Lakas ng Manggagawang Makabayan [LMM]v. Abiera, G.R. No. L-29474, Dec, 19, 1970.
Victorianov. Elizalde Rope Workers Union, G.R. No. L-25246, Sept. 12, 1974, 59 SCRA 54.
ANNOTATED
whether or not employees who were members of the Iglesia ni Cristo (INC) sect could be
compelled to join the union under a closed shop provision,” despite the fact that their religious
beliefs prohibited them from joining a union. The Supreme Court was asked to balance the
constitutional right to religious freedom against a host of other constitutional provisions,
including the freedom of association, the non-establishment clause, the non-impairment of
contracts clause, the equal protection clause and the social justice provision. In the end, it was
held that “religious freedom, although not unlimited, is a fundamental personal right
and liberty and has a preferred position in the hierarchy of values.”
c. Current law and jurisprudence.
With the repeal of R.A. No. 875 by the Labor Code,? and considering that R.A. No.
3350 was merely a part of R.A. No. 875, it may be concluded that the repeal of R.A. No. 875
carries with it the repeal of R.A. No. 3350. However, it is worthy to note that the provision of
Section 4 (a), paragraph 4 of R.A. No. 875 is carried over and reflected in Article 259(e)
[248(e)] of the current Labor Code. But significantly, the amendatory provision introduced by
R.A. No. 3350 into R.A. No. 875 regarding exemption of religious objectors, was not
reiterated in the Labor Code.
The question now is whether the said exemption of religious objectors is still
applicable under the regime of the Labor Code, as amended. The answer to this poser is in the
affirmative in the light of the following:
1. The decision in the Victoriano case was promulgated on September 12, 1974 or
after the enactment of the Labor Code on May 1, 1974 but prior to its effectivity on
November 1, 1974. Of significance is the fact that in the said decision, the Supreme Court
went to the extent of citing the Labor Code as a ground in rejecting one of the union’s
arguments against R.A. No. 3350.‘
2. The doctrinal ruling in Victoriano was reiterated in Anucension,> which was
promulgated on November 29, 1977, at a time when the Labor Code was already in effect for
almost three (3) years. In addition, a number of cases® involving members of the same
religious sect”? were decided subsequent to and in line with Victoriano. All these cases upheld
the INC members’ claimed exemption from the union security clause on religious grounds.
3. The Victoriano ruling may be invoked under the freedom of religion clause in the
Bill of Rights of the Constitution.* -
4. In 1988, the Supreme Court rendered a decision in the case of Kapatiran sa Meat
and Canning Division,® where it ruled that the decision in Victoriano upholding the right of
members of the INC sect not to join a labor union for being contrary to their religious beliefs
does not bar its members from forming their own union. The High Court upheld the public
1 oil seer Obrera de la Industria Tabaquera y Otros Trabajadores de Filpinas (FOITAF), G.R. No. L-27113, Nov. 19, 1974, 61
2 The CBA's closed shop provision states: “Membership in the Union shall be required as a condition of employment for all permanent
employees workers covered by this Agreement.”
4 See Article 317 [302], Labor Code.
4 The Court has invoked the "new Labor Code” in this wise: “Appellant bewails that while Republic Act No. 3350 protects members of
cerlain religious sects, it leaves no right to, and is silent as to the protection af, labor organizations. The purpose of Republic Act No. 3350
was Not fo grant nights to labor unions. The rights of labor unions are amply provided for in Republic Act No. 875 and the new Labor Code.
As to the lamented silence of the Act regarding the rights and protection of labor unions, suffice it to say, first, that the validity of a statute fs
determined by its provisions, not by its silence ; and, second, the fact that the law may work hardship does not render it unconstitutional.”
: Siiaciuae Fee 1977.
as Basa v. Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Fiipinas, [G.R, No. L-27113, November
19, 1974,
61 SCRA 93], Gonzalesv. Central Azucarera de Tarlac Labor Union, [G.R. No. LaHTTS. Coker 3 28s 139 SCRA 30] and Knifjoy
Manufacturing, Inc.v. Femer-Calleja, [G.R. No, 81883, September 23, 1992, 214 SCRA 174).
7 Iglesia ni Cristo [INC].
8 Section 5, Article Ill, 1987 Constitution.
es
® Kapatiran sa Meat and Canning Division [Tupas
[Tupas Local
Local Chapter No, : 1027]v. ; The Hon. ; BLR Director
i Pura Ferrer-Calleja,
i G.R. No. . LL»
n
et
Fe atm
Article 259 [248], Unfair Labor Practices
of Employers
respondent's holding that the “recognition of the tenets of the sect xx should not infringe on
the basic right of self-organization granted by the constitution to workers, regardless of
religious affiliation.”
5. In 1992, the Supreme Court, in the case of Alexander Reyes v. Trajano,' ordained
that the members of the INC sect, although prohibited by their religious dogma to join
unions, may be allowed to vote in a certification election. Neither law nor administrative rule
nor jurisprudence requires that only employees affiliated with any labor organization may
take part in a certification election. On the contrary, the plainly discernible intendment of the
law is to grant the right to vote to all bona-fide employees in the bargaining unit, whether
they be members of a labor organization or not.? Neither does the contention that petitioners
should be denied the right to vote because they “did not participate in previous certification
elections in the company for the reason that their religious beliefs do not allow them to form,
join or assist labor organizations,” persuade acceptance. No law, administrative rule or
precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in
past certification elections.’
V-B-3.
DISMISSAL DUE TO VIOLATION OF UNION SECURITY CLAUSE
1. LEGAL BASIS.
It bears to emphasize that the stipulations in a CBA authorizing the dismissal of
employees, such as the one provided for violation of a union security clause, are of equal
import as the statutory provisions on termination of employment under the Labor Code, since
a CBA is the law between the employer and the employees being represented by the SEBA
and compliance therewith is mandated by the State’s avowed and express policy to give
protection to labor.‘
Article 294 [279] of the Labor Code ordains that “in cases of regular employment,
the employer shall not terminate the services of an employee except for a just cause or when
authorized by Title I,8 Book Six® of the Labor Code.” Admittedly, the enforcement of the
union security provision in the CBA as a ground for termination of employment finds no
basis in any of the provisions under said Title I, Book Six of the Code. Yet, jurisprudence has
consistently recognized that it is the State policy to promote unionism to enable workers to
negotiate with management on an even playing field and with more persuasiveness than if
they were to individually and separately bargain with their employer. For this reason, the law
has allowed stipulations for a union security clause as a means of encouraging workers to join
and support the union of their choice in order to better protect their rights and interests vis-a-
vis their employer.” en
_
But the general rule remains that, unless otherwise expressly* provided in the CBA,
ey
refusal by a covered employee to join the SEBA or loss of membership in good standing
GR. No. 84433, June 2, 1992.

~_onm om
As held in Airtime Specialists, Inc. v. Ferrer-Calleja, G.R. Nos. 80612-16, Dec. 29, 1989, 180 SCRA 749.
Ibid
General Milling Corp. v. Casio, G.R. No. 149552, March 10, 2010; Del Monte Philippines, Inc.v. Sakiivar, G.R. No, 158620, October 11,
2006, 504 SCRA 192, 201.
Terminationof Employment
, Post Employment
National Union of Workers in Hotels, Restaurants and Allied Industries - Manila Hotel Pavilion Chapter v, NLRC, G.R. No. 178402, Sept
30, 2008; Rivera v, Espiritu, G.R. No. 135547, Jan. 23, 2002, 425 Phil. 169, 184, citing Liberty Flour Mis Employeesv. Liberty Flour Mills,
nc. G.R. Nos. 58768-70, 180 SCRA 668, 679-680.
See discussion below entitled “DISMISSAL BASED ON UNION SECURITY CLAUSE MAY ONLY BE VALID IF IT IS EXPRESSLY
PROVIDED THEREIN AS THE PENALTY FOR ITS VIOLATION."
ANNOTATED
therein as may have been occasioned by resignation or expulsion therefrom or any other
causes, is not considered a ground that could result in his termination of employment.!
2. GROUNDS INVOKED BY SEBAs IN TO TERMINATE EMPLOYMENT DUE
TO VIOLATION OF UNION SECURITY CLAUSE.
a. 3 common grounds.
But in cases where termination of employment is expressly stipulated therein as the
end-result of such refusal to join the SEBA or loss of membership status, the SEBA has to
back up its recommendation to the employer to terminate a member-employee’s employment
with just and valid grounds. There are no standard grounds, however, prescribed in the law,
They vary from CBA to CBA. However, there are basically three (3) common grounds that
are usually invoked by the SEBA to justify termination of employment, fo wif:
(1) Refusal to become members of the SEBA of:
a. employees who are neither members of the SEBA nor of any other union/s at
the time of the signing of the CBA; or
b. future, newly-hired employees upon their regularization;
(2) Resignation by its existing members;
(3) Expulsion on the following grounds:
a. Disloyalty to the SEBA;
b. Commission of any act/s inimical to the interest of the SEBA;
c. Refusal to pay union dues and other assessments;
d. Commission or conviction of a felony, offense or crime as defined by the
Revised Penal Code or any special laws against any union officer or member
in relation to activities for and in behalf of the SEBA;
e. Organizing and/or joming another labor organization claiming jurisdiction
similar to that of the SEBA or affiliating with a labor federation without its
approval;
f. Involvement in any violation of the union security agreement or the SEBA's
Constitution and By-Laws; or
g. Participation in a ULP or any derogatory act against the SEBA or any of its
officers or members.”
In case of expulsion of a member or officer, it is required that the norms of due
process should be observed prior to effecting it. If the expulsion is attended by arbitrary
ground or process, it may be considered a ULP of the union. This is so because a member of
a SEBA may be expelled only for a valid cause and by following the procedure outlined in its
constitution and by-laws.?
b, Effect of signing prior to 60-day freedom period of the authorization letter in
Savor of another union to file PCE but filing it only during such period.
The two Picop Resources* cases involving the same incident and factual setting, are
illustrative of the situation where several members of the SEBA were expelled therefrom on
the ground of committing an act of disloyalty and who were subsequently terminated by
petitioner employer, upon recommendation of the SEBA, on the ground of violation of the
a In the United States, from which the concept and rationale that animate the union security clause in Philppine law is pattemed, it is
generally held that union members have the right to resign their union membership at any time. See, for instance, the US Supreme
Court's decision in the case of Pattem Makers V. NLRB, 473 U.S. 95 (1985).
2 See for instance the cases of Rance v. NLRC, [G.R. No. 68147, June 30, 1988), and Carifio v. NLRC, [G.R. No. 91086, May 8, 1990, 185
SCRA 177], where the provisions thereon are quoted in the body of the decision.
3 Kapisanan ng mga Manggagawa sa Mania Railroad Co. v. Bugay, G.R. No. L-9327, March 30, 1957, 101 Phil. 181 See also Rance v.
NLRC, supra.
* The firsts the 2010 case of Picop Resources, Inc. (PRI) v. Tafieca,, G.R. No. 160828, Aug. 9, 2010 and the second, the 2011 case of
Picop Resources, Inc. (PRI) v. Dequilla, G.R. No. 172666, Dec. 7, 2011,
saStnn gaps or eer
THE
union security clause in the CBA. The alleged act of disloyalty consisted in the signing by the
respondent members of the SEBA of an “authorization letter to file a petition for
certification election (PCE)” in favor of another union prior to the advent of the 60-day
freedom period. The petition, however, was actually filed during the freedom period. In
holding that the termination pursuant to the union security clause was illegal, the Supreme
Court emphasized that while they signed such “authorization letter” outside the 60-day
freedom period, they actually filed the “Petition for Certification Election” within the
freedom period. It is therefore clear that it is the fact of actual filing of the petition that is
material to consider whether it may be considered an act of disloyalty to the bargaining union
to justify the expulsion and whether the union security clause has been violated to justify
termination of employment.
(NOTE: For more discussion on expulsion of officers and members,
please read the Notes and Comments on Article 250 [241], supra).
3. TERMINATION OF EMPLOYMENT DUE TO VIOLATION OF UNION
SECURITY CLAUSE, A JUST CAUSE.
It is now well-settled that violation of a union security clause is considered a just
cause to terminate employment.! This mule has, once again, been reiterated in the case of
Alabang Country Club, Inc. v. NLRC,* where the Supreme Court declared that in addition to
the grounds mentioned in Articles 297 [282], 298 [283], 299 [284] and 300 [285] of the
Labor Code, another cause for termination is dismissal from employment due to the
enforcement of the union security clause in the CBA which, in this case, was in the nature of
union shop and maintenance of membership shop arrangement.
Termination of employment by virtue of a union security clause embodied in a
CBA strengthens the union and prevents disunity in the bargaining unit within the duration of
the CBA. By preventing member disaffiliation with the threat of expulsion from the union
and the consequent termination of employment, the SEBA gains more numbers and
strengthens its position as against other unions which may want to claim majority
representation.?
4. DISMISSAL BASED ON UNION SECURITY CLAUSE MAY ONLY BE VALID
IF IT IS EXPRESSLY PROVIDED THEREIN AS THE PENALTY FOR ITS
VIOLATION.
To iterate, while dismissal may be effected as a consequence of a breach of the
union security clause, the general rule that should prevail is that this clause should be strictly
construed against the existence of the right to dismiss. In other words, if there is doubt as to
whether termination of employment is the penalty for its violation, the doubt should be
resolved against the dismissal of the violating employee and in favor of upholding his right to
employment. The clause cannot be unduly extended beyond the explicit coverage of its
terms. Hence, it should not be deemed to authorize by implication the dismissal of employees
before the agreement thereon was made.*
Violation of the union security clause, to be a valid basis for terminating an
employment, must be expressly stated therein that such is its consequence. A dismissal
founded on this clause which does not explicitly authorize it for its violation constitutes ULP.
‘ Picop Resources, Inc. (PRI) v. Dequilla, G.R. No. 172666, Dec. 7, 2011; Picop Resources, Inc. (PR!)
v. Tafieca, G.R. No. 160828,
Aug.
9, 2010; Alabang Country Club, Inc.v. NURC, G.R. No. 170287, Feb, 14, 2008.
2 GR_No. 170287, Feb. 14, 2008.
7 id.
* San Carlos Milling Co. v, CIR, G.R. Nos, L-15453 and L-15723, March 17, 1961, 1 SCRA 734: See also the Resolution dated March 29,
1962 on petiioners’ Motion for Reconsideration,
ANNOTATED
The leading case in this regard is Confederated Sons of Laborv. Anakan Lumber
Co." Forty-five members of respondent United Workers’ Union joined another union, herein
petitioner, and were thus dismissed for violation of the following union security clause:
“That the UNION shall have the exclusive right, and privilege to
supply the COMPANY with such laborers, employees and workers as are
necessary in the logging, mechanical, sawmill, office, logponds, motor pools,
security guards and all departments in its many phases of operations, excepting
such positions which are highly technical and confidential in character and/or such
positions which carry the exercise of authority in the interest of the COMPANY
which exercise is not merely clerical or routinary within the contemplation of the
law, and that the COMPANY agrees to employ or hire in any of its
departments only such person or persons who are members of theUNION,”
Respondents maintain that since respondent union is thus given "the exclusive right
and privilege to supply the company with such laborers, employees and workers are as
necessary” for the activities specified in the said provision and the company had agreed "to
employ or hire in any of its departments only such persons who are members of the union,” it
follows that such laborers, employees and workers of the company as may cease to be
members of the respondent union must be expelled from the company. Upon mature
deliberation, however, the Supreme Court opined that respondents’ pretense cannot be
sustained, thus:
“In_ order _that_an employer_may be deemed bound, under _a
collective bargaining agreement, to dismiss_employees for _non-uni
membership, the stipulation to this effect must be so clear and unequivocal as
to leave no room for doubt thereon. An undertaking of this nature is so harsh
that it must be strictly construed, and doubts must be resolved against the
existence of ‘closed shop.’ Referring particularly to the above-quoted Article II,
we note that the same establishes the exclusive right of respondent union to
‘supply’ laborers etc., and limits the authority of the company to “employ or hire’
them. In other words, it requires that the laborers, employees and workers hired or
employed by the company be members of respondent union at the time of the
commencement of the employer-employee relation. Membership in respondent
union is not a condition for the continuation of said relation or for the retention of a
laborer or employee engaged either before said agreement or while he was a
member of said union.”
This ruling in Confederated Sons of Labor has been followed and adhered to in so
many cases decided thereafter, some of them are as follows:
(1) San Carlos Milling Co. v. CIR, where, based on the union shop stipulation‘ in
the CBA, it was declared that it was ULP to dismiss respondent Sinforoso Kyamko based on
1 Confederated Sons of Labor v. Anakan Lumber Co., United Workers’ Union and CIR, GR. No. L-12503, April 29, 1960, 107 Phil. 915.
3) GR. Nes. L-15453 and L-15723, March 17, 1961, 1 SCRA 734.
* It prowdes: “4.. New employees and laborers hired who are not members of the Workers Association will be on temporary status and the
employer agrees that before they will be considered regular employees and laborers, they have to become members of the ALLIED
WORKERS ASSOCIATION OF THE PHILIPPINES or the ALLIED WORKERS ASSOCIATION or THE PHILIPPINES, SAN CARLOS
CHAPTER within 30 days from the date of employment and if they refuse to affiliate with the sald labor organization within this
time, they will be immediately dismissed by the EMPLOYER. After a laborer or employee Is hired pursuant to this arrangement,
igs lea iehchon tll lence pete feeble! dba
and regu! 'S ASSOCIATION, the management, advice WORKERS ASSOC
shall dismiss the said laboreror employee...” ~ _ eel
‘5. Employees and laborers presently working in any department or section of the or mill of the EMPLO including
sn rary by plo stra’ ys, Wi wn rat wert of On WOFEGS AaGOLIA ey cen Roos tee ew
temporary employees and laborers and shall be given thirty (30) days time from the date of this agreement within which to join or afffiate
with the WORKERS ASSOCIATION, and #f they refuse to do so, their positions will be declared vacant and will be filled in the
manner provided for in this agreement. However, employees and laborers who have rendered ten (10) years continuous service
with the EMPLOYER may not be affected by this condition, provided they are not members of, and will not join or affiliate with,
labor unions or join the WORKERS ASSOCIATION, if they so desire. ."
ca
THE
a 717
the recommendation of the union which earlier expelled him, together with others, for
committing an act of disloyalty when he joined another union. It was pronounced that
*[uJnion shop, as with close shop provisions, should be strictly construed against the
existence of union shop. Sometimes harsh and onerous, such provisions should not be
extended beyond the explicit coverage of their terms, and will not be deemed to
authorize by implication the dismissal of employees already working before the
agreement was made.”
(2) ICAWO v. Central Azucarera de Pilar,’ where petitioners, who were long-time
employees of respondent company, were dismissed for violation of the union shop clause”
when they created a new union, herein petitioner ICAWO? while the CBA between
respondent company and respondent union, CAPAWA,‘ was still effective. The Supreme
Court, citing Confederated Sons of Labor, declared the dismissal illegal because there is
absolutely nothing in the said clause to show that it was the intention of the parties that the
non-membership of existing employees will cause their dismissal. There is, likewise, no
requirement whatsoever on union members to remain as such under pain of being dismissed.
Confederated Sons of Labor requires that there should be a clear and unequivocal statement
that the loss of the status of a member of good standing in the union is a cause for dismissal.
(3) Rizal Labor Union v. Rizal Cement Co.,5 where, on the basis of the closed-shop*
stipulation in the CBA, 15 employees, petitioners herein, were terminated for organizing their
own union (herein petitioner Rizal Labor Union) while they were still members of the
Binangonan Labor Union Local 104 which was the bargaining union at that time. In
declaring petitioners’ dismissal illegal as being constitutive of ULP, the Supreme Court cited
as its justification the ruling in Confederated Sons of Labor that the stipulation to the effect
that violation of the union security clause will result in dismissal must be so clear and
unequivocal as to leave no room for doubt thereon. Thus, there being no substantial
difference between the wording of the provision involved in this case and that construed in
Confederated Sons of Labor, the Court found no reason for the adoption of a different ruling
herein.
(4) Manila Cordage Company v. CIR,’ where the maintenance of membership
clause® in the CBA was cited as basis for the dismissal of the employees who resigned from
the union. The High Court declare the dismissal illegal because said clause clearly does not
state that maintenance of membership in the bargaining union (Manco Labor Union) is a
1 Industrial-Commercia-Agriculiural Workers Organization (ICAWO) v. Central Azucarera de Pilar, G.R. No. L-17422, Feb. 28, 1962,4
SCRA 605.
2 It reads as follows: “The EMPLOYER agrees that in hiring unskilled employees and laborers, the members of the WORKERS
ASSOCIATION should be given preference and the Management should notify accordingly to the WORKERS ASSOCIATION of any
vacancy existing in all Departments. New employees and laborers hired who are nol members of the WORKERS ASSOCIATION will
be on TEMPORARY STATUS and the EMPLOYER agrees that before they will be considered regular employees and laborers they have
Ip become members of the CENTRAL AZUCARERA DE PILAR ALLIED WORKERS’ ASSOCIATION within thirty (30) days from the
date of employment and If refuse to affiliate said labor this time wil
dismissed by the EMPLOYER.”
Industial-Commercial-Agnicultural
Workers Organization (ICAWO).
owe
Aled Workers’ Association-CAPAWA.

GR. No, L-19779, July 30, 1966 (En Banc).
It states: “The EMPLOYER agrees to have in ts employ and to employ only members in good standing of the UNION in all its branches,
units, plants, quaries, warehouses, docks, etc. The UNION agrees to furnish at all time the laborers, employees and all technical helps
[Sc] that the EMPLOYER may require. EMPLOYER, however, reserves its right to accept or reject where they fail to meet its
requirements."
(Section 5, Article 1).
“The EMPLOYER agrees not to have in its employ nor to hire any new employee or laborer unless he is a member of good standing of
the UNION, and a bona-fide holder of a UNION (NWE) card, provided such new employee or laborer meets the qualifications required by
the EMPLOYER." (Section 1-d, Artie VII).
GR. Nos. L-27079 and L-27080, Aug. 31, 1977.
=~
\ provides: “lV. MAINTENANCE OF MEMBERSHIP - Both parties agree that all employees of the COMPANY who are already members
Of the UNION at the time of the signing of this AGREEMENT shall continue to remain members of the UNION for the duration- af this
ANNOTATED
condition of continuous employment in the Manila Cordage Company. Thus, in consonance

with the ruling in Confederated Sons of Labor, in order that petitioner company may be
deemed bound to dismiss employees who do not maintain their membership in the Manco
Labor Union, the stipulation to this effect must be so clear as to leave no room for doubt
thereon. To construe the clause as imposing as a condition to continued employment in
petitioner company the maintenance of membership in the Manco Labor Union is to violate
the natural and constitutional right of the laborer to organize freely.' Such interpretation
would be inconsistent with the constitutional mandate that the State shall afford protection to
labor.”
5. EFFECT OF UNION SECURITY CLAUSE ON NON-SEBA MEMBERS.
a. Union security applies only to members of the SEBA.

to
The principles applicable to union security discussed in this section apply only
which is
the members of the SEBA. Other unions in existence in a given bargaining unit
being represented by a duly certified SEBA cannot invoke these union security principles.
is that union secu
The reason rityin a CBA; hence, it can only be invoked by
is a stipulation
to no other
the union which is a party thereto and this could only refer to the SEBA and
union/s.
b. Newly-hired employees can be compelled to join the SEBA.
As far as newly-hired employees are concerned, they can, under a union security
after
arrangement,? be compulsorily required, within a certain period, to join the SEBA
in the
attaining regularity of employment.‘ The other union/s existing and operating
bargaining unit where the SEBA operates and which it represents, not being
entitled to the
ees to join
assurance of union security under the CBA, cannot compel newly-hired employ
these new entrants
them; only the SEBA can impose such compulsory membership. Should
tion from
fail to join the SEBA, the SEBA can recommend to management their termina
employment for violation of the union security provision in the CBA.
c. Members of the minority union cannot be compelled to join the SEBA.
For purposes of enforcement of the union security clause and the determination of
validity of termination based on violation thereof, a distinction should be made between the
members of the SEBA and the non-members thereof who are members of the defeated
minority union/s as reckoned at the time of the signing of the CBA. This differentiation is
necessary because Article 259%e) [248(e)] of the Labor Code expressly exempts old
employees who are already members of union/s other than the SEBA at the time of the
signing of the CBA, from being included in the coverage of the union security clause.* The
second sentence of paragraph (e) of this article is clear in its exception, thus:
“Sox Nothing in this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining agent as a condition
for employment, except those employees who are already members of another
union at the time of the signing of the collective bargaining agreement.”
1 Article Ill, Sec. 1(6), 1935 Constitution.

2 Article XI, Section 6, Ibid.
3 Such as in “union shop” when all new regular employees are required to join the union within a certain period as a condition for their
continued employment.
As discussed in General Milling Comp. v. Casio, G.R. No. 149552, March 10, 2010 and v. First ine Scales, Inc., G-R. No.
165407, June 5, 2009. a
of Unions in BPI Unibank, G.R. No, 164301, Aug. 10,
etme ringene Islands v. BP] Employees Union-Davao Chapter-Federaton
e Unfair Labor Pract
259 [248].
Articl Employers
of ices
The union security clause therefore does not cover employees who are members of
the union/s' other than the SEBA.? Not being so covered, they cannot be dismissed for
violation of said clause.’ Indeed, with respect to employees already working at the time a
CBA is made, their discharge for failure to affiliate or maintain union membership always
retains a coercive character inimical to the individual worker’s freedom to join unions of his
choice, and for this reason, it has been viewed with disfavor, contracts providing it being
restrictively interpreted.
a. A contrary stipulation cannot prevail over the clear language of the law.
Even if there is a stipulation to the effect that the members of the minority union/s
must become members of the SEBA after the signing of the CBA, the same cannot bind them
and thus must be declared null and void.
In Freeman,’ a case decided prior to the advent of the Labor Code, under the regime
of R.A. No. 875,° from which the present provision in Article 259(e) [248(e)] traces its roots,
it was held that the union security clause should apply only to persons to be hired or to
employees who are not yet members of any labor organization at the time of the signing of
the CBA. It is inapplicable to those already in the service who are members of another union.
To hold otherwise, ie., that the employees in a company who are members of a minority
union may be compelled to disaffiliate from their union and join the SEBA, would render
nugatory the right of all employees to self-organization and to form, join or assist labor
organizations of their own choosing, a right guaranteed under the law’ and the Constitution.®
Citing Freeman, it was held in Talim,’ that a closed-shop clause in a CBA does not
apply to persons belonging to another labor union already hired but is effective only upon
those yet to be hired, and that a dismissal of the former for refusing to comply with the
closed-shop contract is unlawful. The dismissal therefore by the petitioner company, upon
demand by the other petitioner, the Talim Quarry Labor Union, of the 13 employees, or
laborers, respondents herein, for refusing to become members of the Talim Quarry Labor
Union, as required by the union-shop contract, is illegal.!°
e. Non-SEBA members can resign from their unions to join SEBA at any time
during the lifetime of the CBA,
While SEBA members are not allowed to resign, leave or dissociate themselves
therefrom as this may result in their expulsion and the ultimate termination of their
employment upon the recommendation of the SEBA, the same cannot be said of members of
the other minority union/s existing in the same bargaining unit where the SEBA operates,
since they can resign from their union/s at any time during the lifetime of the CBA, to join the
SEBA, without transgressing the union security clause in the CBA that may result in their
1 Called “minority union/s.”

2 Otherwise
called ‘majority union.”
: Confederated Sons of Labor v. Anakan Lumber Co., United Workers’ Union and CIR, G.R. No. L-12503, April 29, 1960, 107 Phil. 915;
Local 7 Press and Printing Free Workers [PFW] v. Judge Tabigne, G.R. No. L-16093, Nov. 29, 1960, 110 Phi. 276; San Carlos Milling
Co. v. CIR, GR. Nos. L-15453 and L-15723, March 17, 1961, 1 SCRA734,
pepe wo Sele vere 2, 1952.01 peltonees Nearer Raponeioortn by San Costes Ming Ca. Ci, GA Hon: LA SASS and Le
, Supra.
* Freeman
Shirt Manufacturing Co.
v. CIR, GR. No. L-16561, Jan. 28, 1961,
1 SCRA 353,
‘ Otherwise known as the Industrial Peace Act. Sec. 4, Subsection a(4) thereof provides as follows: “To discriminate in regard to hire or
tenure of employment or any term or condition of employment to encourage or discourage membership in any labor orjanization:
Provided, That nothing in this Act or in any other Act or statute of the Republic of the Philippines shall preclude an employer from making
an agreement with a labor organization to require as a condition af employment membership therein, if such labor organization is the
‘epresentative of the employees as provided in section twelve.”
oo
See Section 3 of the old Republic Act No. 875,

Artide Ill, Section 1{6], 1935 Constitution,
1 Talim Quany Co., Ine, v. Bartola, GR. No, L-15768,
April 29, 1961, 1 SCRA 130.
See aso National Labor Union v, Zip Venetian Bind Co., G.R. No. L-15827, May 31, 1961; Sta. Cecila Sawmills v. CIR G.R. No. L-
19273-4, Feb. 29, 1964, 10 SCRA 433, 437.
ANNOTATED
dismissal from employment. The reason is that by joining the SEBA, the avowed objective of
the law is attained since as a result of such membership migration to the SEBA, its continued
existence is further strengthened and amply assured.
are not
Jf. Non-retroactivity of union security clause as to cover employees who
members of any labor organization at the time of effectivity of the CBA.
nt
As a general rule, a union security provision such as a closed shop agreeme
requiring all employees to join the SEBA is not valid.’ Hence, such a stipulation in a CBA
s of
cannot be given retroactive effect as to cover and bind employees who are not member
any labor organization at the time of the effectivity of the CBA.
Guijarno v. CIR* has expounded on the non-retroactive application of a union
the
security clause such as closed-shop to employees already in the service at the time of
not to
CBA’s effectivity. The authoritative doctrine that a closed-shop provision in a CBA is
in the
be given a retroactive effect so as to preclude its being applied to employees already
service is traceable to the leading case of Confederated Sons of Labor.’ Thereafter, in
Hamilton Distillery Company,‘ the Court minced no words in characterizing a stipulation that
would allow a dismissal of those already employed as “sul! and void.”* Nothing can be
clearer, therefore, than that the Court looks with disfavor a provision of this character being
utilized as an excuse for the termination of employment. To complete the picture, mention
should be made of Elegance,* where the Court harked back to Freeman,’ to stress the point of
non-retroactivity.°
g. Exception to the non-retroactivity rule - when non-members of any other labor
organization at the time of effectivity of the CBA may be compelled to join the
SEBA.
The exception to the non-retroactivity rule is when there exists a valid union
security clause requiring compulsory membership in the SEBA, in which case, an employee
who is not a member of any labor organization at the time of the effectivity of the CBA may
be compelled to join it and his refusal to so join will justify his dismissal. This is clear from
Juat which involved the dismissal of petitioner, a long-standing employee of respondent
Bulaklak Publications, for his refusal to join the SEBA, under the following closed-shop
stipulation in the CBA:
“All employees and/or workers who on January 1, 1960 are members of the
Union in good standing in accordance with its Constitution and By-Laws and all
members who become members after that date shall, as a condition of
employment, maintain their membership in the Union for the duration of this
Agreement. All employees and/or workers who on January 1, 1961 are not yet
members of the Union shall, as a condition of maintaining their employment,
become members of such union,"!"
Sta. Cecilia Sawmillsv. CIR, G.R. Nos. L-19273-74, Feb. 29, 1964, 10 SCRA 433.
om
GR. Nos. L-28791-93, Aug. 27, 1973.

wee
Confederated Sons of Labor v. Anakan Lumber Co., G.R. No. L-12503, April 29, 1960, 107 Phil. 915. See discussion on this case above.
Kapisanan Ng Mga Mangagagawa Ng Alak v. Hamilton Distillery Company, G.R. No. L-18112, Oct 30, 1962, 6 SCRA 367.
ee
See also Findlay Millar Timber Co. v. Phil, Land-Air-Sea Labor Union, G.R. Nos. L-18217 and L-18222, Sepl 29, 1962, 6 SCRA 227;
United States Lines Co. v. Associated Watchmen & Security Union, G.R. No. L-15508, June 29, 1963, 8 SCRA 326; National Brewery &
Sere Tad lio OSs GAL GR Nee. OBE nd SGE DA ELE A SLA TL ed hte
Navigation Co. v. Officers Guild, Le L-20669,
Oct. 29, 1965, Ri i
17 SCRA 858.
Cement Co,, Inc., GR. No. L-19779, July 30, 1966, ee eee Nae
teen
6 Blegance, Inc. v. CIR, GR. No. L-24096, April 20, 1971, 38 SCRA 382.
7 Freeman Shirt Manufacturing Co. v. CIR, G.R. No. L-16561, Jan. 28, 1961, 1 SCRA 363.
a See also Big Five Products Workers Union-CLP v. CIR, G.R. No. L-17600, July 31, 1963,
5 Juat v, CIR, Bulaklak Publications and Evangelista, G.R. No. L-20764, Nov. 28, 1965, 15 SCRA 391 (En Banc).
of Employers
Artiche 299 [243] Unfair Labor Practices
In affirming the validity of the dismissal of petitioner Juat based on the above-
quoted CBA stipulation, the High Court cited Freeman! and Findlay,? where it was
pronounced that as a settled doctrine, the closed-shop proviso of a CBA entered into between
an employer and a duly authorized labor union applies, and should be applied, to old
employees or workers who are non-members of any labor union at the time the CBA was
entered into. In other words, the old employees or workers can be obliged by his employer to
join the labor union which had entered into a CBA that provides for a closed-shop as a
condition for his continuance in his employment, otherwise, his refusal to join the contracting
labor union would constitute a justifiable basis for his dismissal.
Although Juat, Freeman and Findlay were decided before the Labor Code’s
effectivity,’ the principle laid down therein, insofar as this point of law is concerned, still
applies to the present situation. This is so because these cases were decided under the regime
of R.A. No. 875,‘ from which the present-day provision in Article 259(e) [248(e)] traces its
origin. Thus, the prohibition in the second sentence of paragraph (e) of Article 259 [248]
expressly exempts from being included in the coverage of the union security clause, only the
old employees who are already members of union/s other than the SEBA at the time of the
signing of the CBA, but not those who are not yet members of any union.
6. EFFECT OF MERGERS OR CONSOLIDATION ON UNION SECURITY
CLAUSE.
In case of mergers or consolidation, the constituent corporations cease to exist with
the exception of the surviving corporation, in the case of mergers, or the consolidated
corporation, in the case of consolidation. While Batas Pambansa Bilang 68,$ in its Section
80, provides, inter alia, that “(Dhe surviving or the consolidated corporation shall be
responsible and liable for all the liabilities and obligations of each of the constituent
corporations 2x,” it does not contain, however, any provision mandating the absorption of the
employees of the non-surviving corporation by the surviving corporation, in the case of
mergers, or by the consolidated corporation, in the case of consolidation.
In the event that such absorption is made, the existing union security clause in the
CBA of the surviving corporation is applicable to the “absorbed” employees of the non-
surviving corporation. Such merger cannot be invoked by the surviving entity as a valid
ground to exempt its “absorbed employees” from the coverage of a union shop clause
contained in its existing CBA with its own certified exclusive bargaining union.
The en banc decision in Bank of the Philippine Islands,’ best exemplifies this
situation. This case involves the merger of petitioner BPI and Far East Bank and Trust
Company (FEBTC) where petitioner bank was the surviving entity. In this case, the existing
CBA between petitioner bank and respondent union embodied a union shop clause which
provides:
* Supra,
? Findlay Miler Timber Co. v. PLASLU, G.R. Nos. L-18217 & L-18222, Seot. 29, 1962.
* The Labor Code was promulgated and enacted as P.D. No. 442 by President Ferdinand E, Marcos on May 1, 1974. It took effect on
November 1, 1974- six months after its promulgation. (See Article 2, P.D. No. 442).
. Otherwise known as the Industrial Peace Act. See Sec. 4, Subsection a(4) thereof which provides, viz.: “To discriminate in regard to hire
oF tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization:
Provided, That nothing in this Act or in any other Act or statute of the Republic of the Philippines shall preclude an employer from making
@N agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the
representative of the employees as provided in section twelve.”
* S00 Nothing in this Code or in any other law shal stop the parties from requiring membership in a recognized collective bargaining agent
@S a condition for employment, except em) who are al embers of another union at the time
ive bargaining agreement”
* Otherwise known as “The Corporation Code of the Philippines.”
’ Fork oe Pilppine islands v. BP! Ereloyees Urion-Daveo Chapter Federation of Unions n BP Unbark, GR. No, 164301, Aug. 10
ANNOTATED
“Section 2. Union Shop - New employees falling within the bargaining
unit as defined in Article | of this Agreement, who may hereafter be regularly
employed by the Bank shall, within thirty (30) days after they become regular
employees, join the Union as a condition of their continued employment. It is
understood that membership in good standing in the Union is a condition of
their continued employment with the Bank.”!
Petitioner bank posited that the term “new employees,” as the same is used in the
foregoing clause, refers only to employees hired by petitioner as non-regular employees
who later qualify for regular employment and become regular employees, and not those
who, as a “legal consequence” of a merger, are allegedly automatically deemed regular
employees of BPI. The Supreme Court, however, disagreed to this postulation. It held that
the CBA provision quoted above does not make a distinction as to how a regular employee
should attain such status as “new employee” in order to be covered by the said union shop
clause. Hence, the absorbed employees should be considered as “new employees” of
petitioner bank. For what is indubitable from the union shop clause is that upon the
effectivity of the CBA, petitioner’s new regular employees (regardless of the manner by
which they became employees of BPI), are required to join the union as a condition of their
continued employment. Moreover, there is nothing in the Corporation Code that provides for
such “legal consequence” of a merger insofar as the absorption of employees of the non-
surviving entity by the surviving corporation is concerned, much less, the applicability of a
union security clause to the absorbed employees. More significantly, the Articles of Merger
and Plan of Merger between petitioner bank and FEBTC did not contain any specific
stipulation with respect to the employment contracts of existing personnel of the non-
surviving entity. In the face of these circumstances, the High Court ruled that the absorbed
employees are subject to the union shop provision of the CBA of the surviving corporation,
herein petitioner BPI.
V-B+4,
DUE PROCESS IN TERMINATION DUE TO
VIOLATION OF UNION SECURITY CLAUSE
1. REQUISITES FOR TERMINATION BASED ON UNION SECURITY CLAUSE.
Alabang Country Club? has enunciated the following requisites that the employer
should determine, prove and comply with prior to terminating the employment of an
employee by virtue of the enforcement of the union security clause:
(1) The union security clause is applicable;
(2) The SEBA is requesting for the enforcement of such clause; and
(3) There is sufficient evidence to support the SEBA’s decision to expel the
employee from membership.
Once the foregoing requisites are present, the ensuing termination is considered a
Just cause. The best illustrative case where the above three (3) requisites are present is
Inguillo v. First Philippine Scales, Inc.? Petitioners and several FPSI employees, during the
effectivity of the CBA between FPSI and First Philippine Scales Industries Labor Union
(FPSILU), joined another union, the Nagkakaisang Lakas ng Manggagawa (NLM), which
was affiliated with a federation called KATIPUNAN (NLM-KATIPUNAN). Because of this,
they were expelled by FPSILU for disloyalty. In upholding the validity of their dismissal, the
Supreme Court noted that the three (3) requisites mentioned in Alabang Country Club were
present, thus:
1 Emphases supplied
2 Alabang Country Club, Inc. v. NLRC, G.R. No. 170287, Feb, 14, 2008; See also General Milling Corp. v, Casio, G.R. No, 149552, March
10, 2010.
3 GR._No. 165407, June 5, 2009, 588 SCRA 471.
Artiche 259 [248]. Unfair Labor Practices of Emplayers
First. Respondent FPSI was justified in applying the Union Security Clause, as it
was a valid provision in the CBA, the existence and validity of which was not questioned by
either party. Moreover, petitioners were among the 93 employees who affixed their
signatures to the document that ratified the CBA. They cannot now turn their back and deny
knowledge of such provision.
Second. FPSILU acted on its prerogative to recommend to FPSI the dismissal of its
members who failed to maintain their membership therewith. Aside from joining another
rival union, FPSILU cited other grounds committed by petitioners and the other employees
which tend to prejudice FPSI’s interests, ie., dereliction of duty - by failing to call periodic
membership meetings and to give financial reports; depositing union funds in the names of
Grutas and former Vice-President Yolanda Tapang, instead of in the name of FPSILU care of
the President; causing damage to FPSI by deliberately slowing down production, preventing
the union from even attempting to ask for an increase in benefits from the former, and
poisoning the minds of the rest of the members of the union so that they would be enticed to
join the rival union.
Third. FPSILU's decision to ask for the termination of the employees in the
“Petisyon” was justified and supported by the evidence on record. Petitioners Inguillo and
Bergante were indisputably former members of FPSILU. In fact, Inguillo was the Secretary
of Finance, the underlying reason why his salary was garnished to satisfy the judgment of the
Med-Arbiter who ordered NLM-KATIPUNAN to return the union dues it erroneously
collected from the employees. Their then affiliation with FPSILU was also clearly shown by
their signatures in the document which ratified the CBA. Without a doubt, they committed
acts of disloyalty to the union when they failed not only to maintain their membership but
also disaffiliated from it. They abandoned FPSILU and even joined another union which
works against the former’s interests. This is evident from the intra-union dispute filed by
NLM-KATIPUNAN against FPSILU. Once affiliated with NLM-KATIPUNAN, Inguillo
and Bergante proceeded to recruit other employees to disaffiliate from FPSILU and even
collected onion dues from them.
A case illustrative of lack of compliance with one of the requisites is the 2010 case
of Picop Resources, Inc. (PRI) v. Tafieca,‘ where the termination of employment of
respondents was declared illegal because of non-compliance with the third requisite
mentioned in Alabang Country Club. While there was compliance with the first and second
requisites as there was a valid provision on maintenance of membership as union security
clause in the CBA and in two (2) occasions, the collective bargaining agent (Nagkahiusang
Mamumuo sa PRI-Southern Philippines Federation of Labor [NAMAPRI-SPFL]) demanded
from petitioner Picop Resources, Inc, (PRI) to terminate the employment of respondents due
to their acts of disloyalty to the union, however, the third requisite was not present. The
alleged acts of disloyalty consist in their signing of an “authorization letter to file a petition
for certification election” by another union (Federation of Free Workers [FFW]). However,
it was established that while they signed such “authorization letter” outside the 60-day
freedom period, they actually filed the “Petition for Certification Election” within the
freedom period. As per records, it was clear that the actual Petition for Certification Election
of FFW was filed only on May 18, 2000. Thus, it was within the ambit of the freedom period
which commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is
prohibited is the filing of a petition for certification election outside the 60-day freedom
period. This is not the situation in this case. If at all, the signing of the authorization to file a
certification election was merely preparatory to the filing of the petition for certification
election, or an exercise of respondents’ right to self-organization. The mere signing of the
authorization in support of the Petition for Certification Election of FFW on March 19, 20
" GRNo, 160828, Aug. 9, 2010.
aan
ANNOTATED
and 21, or before the “freedom period,” is not sufficient ground to terminate the employment
of respondents inasmuch as the petition itself was actually filed during the freedom
period. Nothing in the records would show that respondents failed to maintain their
membership in good standing in the union. Respondents did not resign or withdraw their
membership from the union to which they belong. Respondents continued to pay their union
dues and never joined the FFW.
The above Picop ruling was reiterated in another case involving the same company,
the 2011 case of Picop Resources, Inc. (PRI) v. Dequilla,' involving the same incident and
factual setting. Quoting extensively its earlier 2010 ruling in Picop, it was emphasized in this
case that the records are bereft of proof of any contemporaneous acts of resignation or
withdrawal of union membership or non-payment of union dues on the part of the private
respondents. Neither is there proof that private respondents joined FFW. The fact is, private
respondents remained in good standing with their union, NAMAPRI-SPFL, a point which
was already settled in said earlier 2010 case of Picop.?
2. EMPLOYER’S OBLIGATION TO TERMINATE THE EMPLOYMENT OF
ERRANT MEMBERS UPON DEMAND BY SEBA.
To avoid the possibility of incurring liability for breaching the union security clause
of the CBA and to protect its own interests, the only sensible option left to an employer, upon
its receipt of a demand from the union for the dismissal of the employees whom it accused of
committing acts of disloyalty, is to conduct its own inquiry on the factual and legal bases of
such demand in order to satisfy itself that there indeed exist sufficient bases to dismiss them.
Thus, the act of the employer, in Manila Hotel Pavilion, of issuing notices requiring the 36
employees to submit their explanations to the charges against them lodged by the SEBA
is
the reasonable and logical first step in a fair investigation. It is important to note
that in this
case, the Hotel did not take further steps to terminate the 36 employees. Instead,
it arranged
for reconciliatory conferences between the contending unions in order to avert the possibility
of dismissing the 36 employees for violation of the union security clause of the CBA.
In Del Monte,‘ respondent Timbal’s expulsion from ALU was premised
on the
ground of disloyalty to the union which, under Section 4[3], Article
II of the CBA, also
stands as a ground for her dismissal from petitioner Del Monte.
Indeed, Section 5, Article I
of the CBA enjoins Del Monte to dismiss from employment those employees
ALU for disloyalty,
expelled from
albeit with the qualification that it should be “in accordance with
Article 294 [279] of the Labor Code applies both to dismissals based law.”
on the Just or authorized
causes under the law or on the union security clause of the CBA. Hence,
determining whether a valid cause exists for termination, whether under Title in the matter of
L° Book Six‘ of
the Labor Code or under a valid CBA, substantive due process must be observed
as a means
of ensuring that the security of tenure of the employees is not infringed.
In the case of Carifio v. NLRC,’ where petitioner (former president
of the union)
was dismissed the next day after receipt by respondent company of the
letter from the SEBA
recommending his termination due to petitioner’s expulsion therefrom, the
Supreme Court
pronounced that while the company, under a maintenance of membership
provision of the
CBA, is bound to dismiss any employee expelled by the SEBA for disloy
alty upon its written
GR.No. 172666, Dec. 7, 2011.

* Supra; See aso General Milng Corp. v. Caso, G.R. No, 149652, March 10, 2010, which also iustrates
requisite prescribed in Alabang Country Club is absent the siuaion where the 3rd
3 Natonal Union of Workers in Hotels, Restaurants and Aled industries ~ Mania Hotel Pavikon Chapter
30, 2008. v. NLRC, GIR. No. 179402, Sent
Del Monte Philippines, Inc. v. Saldivar and Timbal, GR. No, 158820,
Oct. 11, 2006,
om
Entited "Termination of ,
ee
Entitled“Post Employment.”
GR. No. 91086, May 8, 1990, 185 SCRA 177.
Artice 259 [245]. Unfair Labor Practices of Employers
request, this undertaking should not be done hastily and summarily. The company is said to
have acted in bad faith in dismissing a worker if it does not afford him the benefit of a
hearing. The right of an emplo to be informed
yee of the charges agains him and to
ta
reasonable opportunity to present his side in a controversy with either the company or his
own union is not wiped away by a union security clause or a union shop clause ina CBA. An
employee is entitled to be protected not only from a company which disregards his rights but
also from his own union, the leadership of which could yield to the temptation of swift and
arbitrary expulsion from membership and dismissal
from his job."
In Rancev. NLRC,? where the employer has acted with scandalous haste in
dismissing 125 employees who were expelled from the union because of alleged disloyalty
but were never accorded due process, both the employer and the union were declared guilty
of ULP and ordered jointly and severally to pay the employees’ backwages.?
In M. Greenfield‘ petitioners were union officers who were expelled by the
federation (ULGWP) for allegedly committing acts of disloyalty and/or inimical to the
interest of the federation and in violation of its constitution and by-laws. Upon demand of the
federation, the company terminated petitioners without conducting a separate and
independent investigation. Respondent company did not inquire into the cause of the
expulsion and whether or not the federation had sufficient grounds to effect the same.
Relying merely upon the federation’s allegations, respondent company terminated petitioners
from employment when a separate inquiry could have revealed if the federation had acted
arbitrarily and capriciously in expelling the union officers. Respondent company’s allegation
that petitioners were accorded due process is belied by the termination letters received by the
petitioners which state that the dismissal shall be immediately effective
Respondent employer, in Tropical Hut,® sent a letter to petitioners advising them of
the SEBA’s recommendation of their dismissal and at the same time giving them 48 hours
within which to comment thereon. When petitioners failed to do so, respondent company
immediately suspended them and thereafter effected their dismissal. According to the
Supreme Court, this act of respondent employer is certainly not in fulfillment of the mandate
of due process which is to afford the employees to be dismissed an opportunity to be heard.
An employer can be adjudged guilty of ULP for having dismissed its employees in line with
a closed shop provision if they were not given a proper hearing.
3. AN EXPELLED UNION MEMBER CANNOT BE DISMISSED BY THE
EMPLOYER WITHOUT THE UNION’S RECOMMENDATION TO THAT
EFFECT.
An employee expelled by the union cannot be dismissed by the employer on the
ground of violation of the union security clause without the appropriate recommendation of
the union to that effect. The fact of union expulsion alone would not be a sufficient
justification for the employer to dismiss the expelled employee; the employer should wait for
the union recommendation before he could act thereon.
"Se also Liberty Cotton Mils Workers Union v. Liberty Cotton Mills, G.R. No. L-33987, Sept. 4, 1975, 65 SCRA 512: Bi
Sugar Co., Inc. [BISCOM v. Philippine Association of Free Labor Unions [PAFLU], G.R. No. L-18782, Aug. 29, 1963, 8 SCRA 700;
2
Sanyo Philippines Workers Union - PSSLU v. Canizares, GR. No. 101619, July 8, 1992, 211 SCRA 361.
i
GR.No. 68147, June 30, 1988.
4
See also Manila Cordage Co. v. CIR, G.R. No. L-27079, Aug. 31, 1977, 78 SCRA 398,
5
Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG-UWP) v. Ramos, G.R. No. 113907, Feb. 23, 2000.
Saat Basbegen-bebela Sugar Co, be [BISCOM]v. Philippine Association of Free Labor Unions [PAFLUJ, G.R. No. L-18782, Aug.
, 1953, 8 SCRA 700.
Tropical Hut Employees’ Union
- CGW v. Tropical Hut Food Market, Inc., G.R. No. L-43495-99, Jan, 20, 1990.
ANNOTATED
The 3 respondents in M. D. Transit v. de Guzman,’ were expelled by their union and

subsequently dismissed by petitioners? due: 1) to their absence from work for 4 consecutive
days, in violation of their CBA; and 2) to a communication of the union to the petitioners,
marked as Exhibit 5, urging them to dismiss the respondents pursuant to the closed shop
stipulation in said CBA, in view of their expulsion from the union. In holding the expulsion
by the union and the subsequent dismissal from employment by petitioners illegal, the High
Court pronounced that it was established by evidence that respondents were dismissed by
petitioners before the latter had even received the aforementioned Exhibit 5. In fact, the
record abundantly showed that respondents were not allowed by agents of petitioners to enter
its premises or work for the petitioners since November 9, 1958, despite the fact that said
communication of the union was not written and sent until November 10, 1958. The
dismissal could not have been made, therefore, in pursuance either of the request contained in
said communication or of the closed shop provision of the CBA. Moreover, the lower court
found, and this was amply supported by the evidence or record - that respondents’ suspension
by the president of the union, and their subsequent expulsion by its Board of Directors, were
due to the charges proferred by respondents against the officers of the union, which led to the
discovery by the DOLE of the alleged shortage in its mutual aid fund of over P22,000.00, and
the reference of the case to the City Fiscal of Quezon City. Thus, both the union and
petitioners were guilty of ULP.
4, MEANING OF “INDEPENDENT AND SEPARATE HEARING” IN
TERMINATION BASED ON UNION SECURITY CLAUSE.
The use of the phrase “independent and separate hearing” in connection with the
due process required in termination grounded on violation of the union security clause means
that the employer is not duty-bound to immediately implement the recommendation to
terminate made by the SEBA; it has to conduct its own hearing independent and separate
from any hearing as may have earlier been conducted by the SEBA. As held in M.
Greenfield?
“While respondent company may validly dismiss the employees expelled
by the union for disloyalty under the union security clause of the collective
bargaining agreement upon the recommendation by the union, this dismissal should
not be done hastily and summarily thereby eroding the employees’ right to due
process, self-organization and security of tenure. The enforcement of union security
clauses is authorized by law provided such enforcement is not characterized by
arbitrariness and always with due process. Even on the assumption that the
federation had valid grounds to expel the union officers, due process requires that
these union officers be accorded a separate hearing by respondent company.”
The twin requirements of notice and hearing constitute the essential elements of
procedural due process. The law requires the employer to furnish the employee sought to be
dismissed with two written notices before termination of employment can be legally effected:
(1) a written notice apprising the employee of the particular acts or omissions for which his
dismissal is sought in order to afford him an opportunity to be heard and to defend himself
with the assistance of counsel, if he desires, and (2) a subsequent notice informing the
employee of the employer’s decision to dismiss him. This procedure is mandatory and its
absence taints the dismissal with illegality.5
GR. No. L-18810, April 23, 1963, 7 SCRA 726. Petitioners are MD Transit & Taxi Co. Inc., and CAM Transportation
Co, are separate
-
entiies engaged in business as common camers, but under joint management, which had entered into a CBA with the MD-CAM Local 3
(PTGWO), a labor union composed of employees of said enties, to which prior to October 27, 1958, respondents Bienvenido de
Guzman, Cecio Cajoles and Bemardita Oracion were rendering services, the first two as drivers and the last as conductress.
Petitioners are MD Transit & Taxi Co. inc., and CAM Transportation Co.
oo
Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, Feb. 28, 2000.
woe
Easycall Communications Phiis., ine. v. King, G.R. No. 145901, Dec. 15, 2005, 478 SCRA 102, 113-114.
Article 259 (245), Unfeir Labor Practices of Exyplopers
In the same case of Alabang Country Club,’ the question was asked whether
employments were terminated. In ruling that the Club, their employer, substantially complied
with the due process requirements before it dismissed them, the Supreme Court ratiocinated
that the CA and the 3 respondents erred in relying on the said case of M. Greenfield? where
the members were expelled from the SEBA and were immediately dismissed from the
company without affording them any semblance of due process. Both the union and the
company did not conduct administrative hearings to give the employees a chance to explain
themselves. In the present case, the Club has substantially complied with due process. The 3
respondents were notified that their dismissal was being requested by the SEBA and their
explanations were heard. Then, the Club, through its President, conferred with said
respondents during the last week of October 2001. The 3 respondents were dismissed only
after the Club reviewed and considered the documents submitted by the SEBA vis-d-vis the
written explanations submitted by said respondents. Under these circumstances, it is clear
that the Club had afforded the 3 respondents reasonable opportunity to be heard and defend
themselves.
5, UNION DUE PROCESS VS. EMPLOYER DUE PROCESS.
In most cases where the termination of employment based on violation of the union
the dismissal
security clause was declared illegal because the employer approved
d member, it is the
recommendation of the SEBA without affording due process to the expelle
due process to the
employer’s contention that there is no more need to afford procedural
by the SEBA prior
employee because the same has already been given to and complied with
is to simply adopt as its
to his expulsion. In other words, what the employer normally does
This contention of the
own, the due process observed by the SEBA prior to the expulsion.
ion between the required
employer is of course erroneous as it is oblivious of the legal distinct
expulsion and the due process
due process that should be afforded by the SEBA prior to
termination of employment.
required under the law to be observed by the employer prior to
red to be observed
The distinction is not hard to comprehend. The due process requi
nation of his membership
by the union prior to its member’s expulsion concerns the termi
by the employer pertains
with the union; while the due process that must be complied with
purpose being distinct from
to the termination of his employment with the employer. The
adopt as its own due process
each other, it is complete error on the part of the employer to
what has been earlier afforded by the SEBA to the erring employee without conducting its
own independent and separate due process.
?
Thus, in declaring the illegality of the dismissal of petitioner in Carifio v. NLRC
in his dismissal, that
the Supreme Court noted in regard to the involvement of the company
petitioner Carifio
the company, upon being formally advised in writing of the expulsion of
immediately proceeded
from the union, in turn, did not afford due process to him; instead, it
ve the very
to issue a dismissal letter to petitioner Carifio, the termination being made effecti
n his side
next day. The company should have given petitioner Carifio an opportunity to explai
of the controversy with the union. Notwithstanding the union security clause in the CBA, the
had not
company should have reasonably satisfied itself by its own inquiry that the union
Carifio.
been merely acting arbitrarily and capriciously in impeaching and expelling petitioner
it
Had the company taken the trouble to investigate the acts and proceedings of the union,
and
could have very easily determined that the union had acted arbitrarily in impeaching
the union had
expelling from its ranks petitioner Carifio. The company offered the excuse that
a
threatened to go on strike if its request had not been forthwith granted. Assuming that such
1 Alghang Country Cub, inc. v. NLRC, GR. No. 170287, Feb. 14, 2008.
2 GRNo. 113907, Feb. 28, 2000.
2 GR_No. 91085, May 8, 1990, 185 SCRA 177.
ANNOTATED
threat had in fact been made, if a strike was in fact subsequently called because the company
had insisted on conducting its own inquiry, the Court could have declared that strike illegal.
The Court likewise ignored the company’s further plea that for it to inquire into the
lawfulness of the acts of the union in this regard could have constituted interference in the
administration of the affairs of the union.
In Rance v. NLRC.’ where some members of the union were dismissed for violation
of the union security clause consisting in their alleged act of seeking help from another
federation at the time that they were being temporarily laid off from work, it was held that
such act cannot constitute disloyalty as contemplated in the CBA. At most, it was an act of
self-preservation of workers who, driven to desperation, found shelter in the other federation
which took the cudgels for them. The dismissed union members were denied due process
when they were dismissed for disloyalty to the union based on the union security clause in the
CBA. There was no impartial tribunal or body vested with authority to conduct disciplinary
proceeding under the constitution and by-laws and the expelled union members were not
furnished any notice of the charge of disloyalty against them, nor timely notice of the hearing
thereon. Petitioners had no idea that they were charged with disloyalty. Those who came
were not only threatened with persecution but also made to write the answers to questions as
dictated to them by the union and the company representatives. The Board of Directors of the
union acted as prosecutor, investigator and judge at the same time. The proceedings have
been a farce, The absence of a full blown investigation of the expelled members of the union
by an impartial body provided no basis for the union’s accusation of disloyalty. Employees
are entitled to due process before they may be expelled from the union on charge of
disloyalty, The scandalous haste with which respondent corporation dismissed 125
employees lent credence to the claim that there was connivance between respondent
corporation and respondent union. It is evident that private respondents were in bad faith in
dismissing petitioners. They are guilty of unfair labor practice.
The case of General Milling Corp. v. Casio,” also illustrates the situation where
petitioner GMC dismissed respondents, Casio, et al.” on the basis of the recommendation of
its officers, Pino, et al, 4 who are also respondents in this case.5 They were originally
expelled on the basis of the finding that they have committed “acts inimical to the interest of
the union” in violation of the union security clause.° In justifying its act of immediately
ordering the dismissal of Casio, ef al. solely on the basis of the recommendation of Pino, et
al. and without affording them due process, petitioner GMC asserted the following defense:
(1) As an employer, its only duty was to ascertain that the union, IBM-Local 31,
accorded Casio, et al. due process; and, it is its finding that the union did give Casio, et al. the
opportunity to answer the charges against them, but they refused to avail themselves of such
opportunity.
(2) The acts of Pino, et al. as officers and board members of the union, in expelling
see al. from the union, enjoy the presumption of regularity in the performance of
official duties.
The Supreme Court, however, debunked said arguments and found that petitioner
GMC has illegally dismissed Casio, et al. because not only did GMC fail to make a
1 GR No. 68147, June 30, 1988.
; Se ee ee
Se reguiar
, et al. were neeemployees of GMC, Casio was elected IBM/ Local31 President for a three-year term in June 1991, while his: co-
oil
; iy ai iil hgh
Ktmust , llaw at Buidod ng Mangagawa (IBM)}-Local
31 Chapter 31), the sole and exclusive bargaining
ore rnk and fe employees ofpeboner GMCin Lap apu Cy, wasnotinplenieds spare hhc cone,
® Inthe present case, the CBA between petifoner GMC and IBM-Local 31 included a maintenance of membership and closed shop _
clause
as can be gleaned from Sections 3 and 6 of Artide Il. IBMV-Local 31, where the union, by writien request, can ask GMC: to terminate the
employment of the employee/worker who failed to maintain its good standing as a union member.
resin
THE
creme
determination of the sufficiency of evidence to support the decision of the union to expel
Casio, et al., but also to accord the expelled union members procedural due process, ié.,
notice and hearing, prior to the termination of their employment. It thus concluded that the 3“
requisite! prescribed in Alabang Country Club is absent? More particularly, the foregoing 2
arguments were expounded as follows:
On No. 1 above, this argument was declared to have no basis because petitioner
GMC failed to discharge the onus of proving that the dismissal of Casio, et al. was not
illegal.’ Irrefragably, GMC cannot dispense with the requirements of notice and hearing
before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop
provision in the CBA. The rights of an employee to be informed of the charges against him
and to reasonable opportunity to present his side in a controversy with either the company or
his own union are not wiped away by a union security clause or a union shop clause in a
CBA. An employee is entitled to be protected not only from a company which disregards his
rights but also from his own union, the leadership of which could yield to the temptation of
swift and arbitrary expulsion from membership and hence dismissal from his job.‘ In the case
at bar, Casio, et al. did not receive any other communication from GMC, except the written
notice of termination dated March 24, 1992. GMC, by its own admission, did not conduct a
separate and independent investigation to determine the sufficiency of the evidence
supporting the expulsion of Casio, et al. by IBP-Local 31. It straight away acceded to the
demand of IBP-Local 31 to dismiss Casio, et al.
On No. 2 above, it was declared that contrary to the position of GMC, the acts of
Pino, et al. as officers and board members of IBM-Local 31, in expelling Casio, et al. from
the union, do not enjoy the presumption of regularity in the performance of official duties,
because the presumption applies only to public officers from the highest to the lowest in the
service of the Government, departments, bureaus, offices, and/or its political subdivisions.
V-B-5.
LIABILITY OF EMPLOYER AND/OR SEBA FOR TERMINATION OF
EMPLOYMENT PURSUANT TO THE UNION SECURITY CLAUSE
1. DISMISSAL BASED ON UNION SECURITY CLAUSE, NOT CONSIDERED ULP
IF MADE IN GOOD FAITH.
The dismissal of union members occasioned by the demand of the SEBA pursuant
to a union security clause, where said union members had been expelled by the SEBA for
organizing a rival union, is legal and not a ULP.* M. Greenfield’ proclaimed the rule that the
1 Alabang Country Club prescribes the following requisites: (1) The union security cause is applicable; (2) The SEBA is requesting for the
enforcement of such clause; and (3) There is sufficient evidence to support the SEBA's decision to expel the employes from membership.
2 {tis undisputed thal IBM-Local 31, through Gabiana, the IBM Regional Director for Visayas and Mindanao, twica requested GMC, in the
letiers dated March 10 and 19, 1992, to terminate the employment of Casio, et al. as a necessary consequence of their expulsion from the
union. It is the third requisite — that there is sufficient evidence to support the decision of IBM-Local 31 io expel Casio, et all. — which
appears to be lacking in this case.
3 Citing Great Southem Maritime Services Corporation. v. Acufia, G.R. No. 140189. Feb. 28, 2005, 492 Phi. 518, 530-531.
4 Citing Carifio v. NLRC, GR. No. 91085, May 8, 1990, 185 SCRA 177, 189.
5 The records of this case are absolutely bereft of any supporting evidence fo substantiate the bare allegation of GMC that Casio, et al.
were accorded due process by IBM-Local 31. There is nothing on record that would indicate that IBM-Local 31 actually notified Casio, et
a. of the charges against them or that they were given the chance to explain their side. All that was stated in the IBM-Local 31 Resolution
dated February 29, 1992, expelling Casio, et al. from the union, was thal “a copy of the said letter complaint [dated February 24, 1992}
was dropped or left in front of E. Casio." It was not established that said letter-complaint charging Casio, et al. with acts inimical to the
interest of the union was properly served upon Casio, that Casio willfully refused to accept the said leter-nolice, or that Casio had the
authority to receive the same lelter-notice on behalf of the other employees similarly accused. It is worthy to note that Casio, et al. were
@xpeled only five days affer the issuance of the lelter-complaint against them. There was proof on record when the three-day period,
within which Casio, et al. was supposed Io file ther answer or counter-affidavits, started tp run and had expired. The Court is likewise
unconvinced {hat the said three-day period was sufficient for Casio, et al. lo prepare their defenses and evidence to refute the serious
charges against them.
* Lirag Textile Mis v. Blanco, G.R. No. L-27029, Nov. 12, 1981, 109 SCRA 87; Victonas Milling Co, Inc. v. Victorias-Manapla Workers
Organization - PAFLU, G.R. No. L-18467, Sept 30, 1963.
Malayang Samahan ng Manogagawa sa M. Greenfield v. Ramos, G.R. No. 113907, Feb. 28, 2000.
~
ANNOTATED
dismissal of an employee by the company pursuant to a labor union’s demand in accordance
with a union security agreement does not constitute ULP. An employer is not considered
guilty of ULP if it merely complied in good faith with the request of the SEBA for the
dismissal of its members whom it expelled pursuant to the union security clause in the CBA.!
It cannot be said that the stipulation in the CBA that the employer may dismiss an
employee whenever the union recommends it either for disloyalty or for any violation of its
constitution and by-laws is illegal or constitutive of ULP, for such is one of the matters on
which management and labor can agree in order to bring about harmonious relations between
them and promote the cohesion and integrity of the SEBA. And as an act of loyalty, a SEBA
may certainly require its members not to affiliate with any other labor union and to consider
its infringement as a reasonable cause for separation.’ The members of the SEBA must thus
suffer the consequences of their separation from the union under the union security clause in
the CBA, although they are entitled to disaffiliate from their union and to form a new
organization of their own at the proper time.’
2. RULE ON LIABILITY FOR REINSTATEMENT, BACKWAGES AND
DAMAGES IN CASE DISMISSAL DUE TO VIOLATION OF UNION SECURITY
CLAUSE IS DECLARED ILLEGAL.
The latest rule is that good faith will not exonerate the employer and the SEBA
from liability for reinstatement, backwages and damages, in case the dismissal based on
violation of the union security clause is declared illegal.
In the earlier cases of Zip Venetian Blind‘ and Soriano,> the Supreme Court
affirmed the disallowance of backwages or “financial assistance”” where the employer acted
in good faith in dismissing the employees on the basis of a closed-shop agreement, even if the
dismissal was held illegal. However, in more recent cases, like Del Monte® and Olvido,” it
was ruled that the doctrine laid down in said 1961 case of Zip Venetian Blind and 1989 case
of Soriano is inconsistent with Article 294 [279] of the Labor Code, as amended by R.A. No.
6715, which took effect on March 21, 1989 - just five (5) days after Soriano was
promulgated. This is so because it is now provided in the Labor Code that “[a]n employee
who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.”
Thus, where reinstatement is adjudged, the award of backwages and other benefits
continues beyond the date of the Labor Arbiter’s decision ordering the reinstatement and
extends up to the time said order of reinstatement is actually carried out. R.A. No. 6715
effectively mitigated previous jurisprudence which had limited the extent to which illegally
dismissed employees could claim for backwages.®
The fact, therefore, that there has been a finding of illegality of dismissal will result
in declaring the employer and the union liable for all the reliefs provided in Article 294 [279].
See also National Union of Workers in Hotels, Restaurants and Allied Industies - Manila Hotel Paviion Chapter v. NLRC, GR. No.
179402, Sept. 30, 2008; Soriano v. Aienza, G.R. No. 68619, March 16, 1989; Tanduay Distlery Labor Union v. NLRC, (G.R. Nos. 75037
and 75055, April 30, 1987, 149 SCRA 470; Malayang Manggagawa v. Ang Tibay, GR. No. L-8259, Dec. 23, 1957, 102 Phi. 669;
Victorias Miling Co., Inc. v. Victorias-Manapla Workers, G.R. No. L- 18467, Sep. 30, 1963, 9 SCRA 154; Seno v. Mendoza, GR. No. L-
20565, Nov. 29, 1967,21 SCRA 1124.
Tanduay Disillery Labor Union v. NLRC, G.R. Nos. 75037 and 75055, Apri 30, 1987.
Vilar v. inciong, G.R. Nos. L-50283-84, Apri 20, 1983, 121 SCRA 444,
eeewe
Nafional Labor Union v. Zip Venetian Blind, GR. Nos. L-15827-28, May 31, 1961, 2 SCRA 509: 112 Phil 407.
Soriano v. Alienza, G.R. No, 68619, March 16, 1989, 171 SCRA 284,
Del Monte Philippines, Inc. v. Saidivar, G.R. No. 158820, Oct. 11, 2006.
Olvidov, CA, G.R. Nos. 141166-67, Oct. 15, 2007.
4
As epained in Ferterv. NURC, GR. No. 100898, July5, 1993, 224 SCRA 410, 418.
THE LABOR CODE OF THE PULP? ONES va
Thus, in both the 2010 case of Picop Resources, Inc. (PRI) v. Tafieca,’ and 2011 case of
Picop Resources, Inc. (PRI) v. Dequilla,? involving the same incident and factual setting,
respondents who were found to have been illegally dismissed pursuant to the union security
clause in the CBA were granted the twin reliefs of full backwages and reinstatement or, if no
longer viable, separation pay equivalent to one month salary for every year of service in lieu
thereof. Moreover, respondents, having been compelled to litigate in order to seek redress for
monetary
their illegal dismissal, were awarded attorney’s fees equivalent to 10% of the total of
payment
award. It is thus well-settled that the employer is liable for reinstatement and the
based on the
backwages if it has acted in bad faith in effecting the dismissal of the employees
union security clause in the CBA
SEVERAL IN
3, THE LIABILITY OF EMPLOYER AND UNION IS JOINT AND
NATURE.
t,
The nature of the liability of the employer and the union for reinstatemen
arising from
backwages, damages and other monetary claims in cases of illegal dismissal
several, To illustrate,
purported violation of the union security clause is solidary or joint and
ed guilty of ULP in the case
both the respondent employer and respondent union were adjudg
of Rizal Labor Union v. Rizal Cement Co.,4 when the union requested the dismissal of 15
on the ground that the said
employees and the employer acceded by effecting the dismissal r, merely
employees formed anothe r union. The union security clause in the CBA, howeve
the dismissal. Consequently,
provided for a limited closed shop which did not justify
petitioners, and pay jointly and
respondent company and union were ordered to reinstate
they were reinstated.°
severally, their backwages from the date of their dismissal until
SOLIDARY LIABILITY TO
4, DISTINCTIVE APPLICATION OF JOINT AND
KWAGES AND DAMAGES.
THE REMEDIES OF REINSTATEMENT, BAC
a. On reinstatement.
rned, only the employer
There is no question that, as far as reinstatement is conce for and the
employer is solely liable there
can comply therewith and not the union. Hence, the
to.
joint and solidary principle cannot be applied there
ement.
b. On separation pay in lieu of reinstat
no longer feasible, practicable or
However, in the event that reinstatement is
, the otherwise non-monetary
possible, separation pay is granted in lieu thereof. In this caseg this time monetary in nature,
e, bein
reinstatement is converted” into a monetary award; henc
oyer therefor.
the union may be held solidarily liable with the empl
c. On backwages and damages.
they are both monetary in
As far as backwages and damages are concemed, since
f:
character, the employer and the union may be held solidarily liable for payment thereo
@ The Rance case.
ioned. A
The case of Rance v. NLRC,* best illustrates the three points above-ment on
total of 125 employees were dismissed by the employer upon the instigation of the SEBA
of the scandalous
the ground of disloyalty for seeking help from another federation. Because
' GR No. 160828, Aug.9, 2010

® GR No. 172666,
Dec. 7,2011.
;
Lety Coton Mis Workers Union v. Ley Coton Ms, GR No. 33987, Sept 4, 1975, 86 SCRA512
: GR No. Let8779, ly 30,1968,
, Se@ais0 Manila Cordage Company v. CIR, G.R. Nos. L-27079 and L-27080, Aug. 31, 197.
2010.
1 ri fa Miling Comp.v. Casio, G.R. No. 149552, MarchFast10, Foods v. CA (Sixth Dhision), G.R. No. 172149, Feb. 8, 2010, 612 SCRA 10.
‘GR the holding in Session Delights koe Cream and
No. 68147, June 30, 1988,
ANNOTATED
haste with which respondent company dismissed them, it was established that there was
connivance between respondent company and respondent union and, thus, they were both
declared guilty of ULP. In granting the reliefs of reinstatement, backwages and exemplary
damages, the Supreme Court disposed as follows:
“PREMISES CONSIDERED, (1) the decision of respondent National
Labor Relations Commission in NLRC-NCR-1 1-688 1-82 dated April 26, 1984 is
REVERSED and SET ASIDE; and (2) respondent corporation is ordered: (1) to
reinstate petitioners to their former positions without reduction in rank, seniority
and salary; (b) to pay petitioners three-year backwages,' without any reduction or
qualification, jointly and solidarily with respondent Union; and (c) to pay
petitioners exemplary damages of 500.00 each. Where reinstatement is no
longer feasible, respondent corporation and respondent union are solidarily
ordered to pay, considering their length of service their corresponding separation
pay and other benefits to which they are entitled under the law.”
e. Cases where employer was held liable only for reinstatement while union was
solely held liable for backwages.
In the following cases, the employer was held liable only for reinstatement but not
backwages because it was the union which was held solely liable for the payment of
backwages:
(a) Salunga v. CIR}?
(b) Guijarno v. CIR;4 and
(c) Manila Mandarin Employees Union v. NLRC.°
Jf. Deletion of separation pay and substituting it with penalty of fixed amount.
The case of Carifio v. NLRC, presents a good study of when separation pay was not
granted but instead, a penalty was imposed on both the employer and the union to be borne
solidarily by them. In this case, it was found that petitioner Carifio, the former president of the
union who was expelled for gross mismanagement of the union’s affairs, was dismissed
without affording him due process. He was awarded separation pay by the NLRC “by way of
penalty and financial assistance,” at the rate of one-half (1/2) month's salary for each year of
service. The Supreme Court, however, deleted this award and substituted it with penalty in
the amount of P5,000.00 upon its finding that there has been just cause for his dismissal and
the separation pay is not justified simply because of the failure of the company to accord him
his full measure of due process.
g. Cases of dismissal for violation of union security clause where only the union
was declared guilty of ULP but not the employer.
There have been a number of cases where only the SEBA which recommended and
demanded the termination of its members for violation of the union security clause was held
liable for ULP. The following may be cited as examples thereof:
neste
' The straight 3-year backwages rule was the prevailing rule at the fime the detision in this case was promulgated in 1988 pursuant to the
April
so-called "Mercury Drug Rule,” referring to the rule first enunciated in the case of Mercury Drug Co., Inc. v. CIR, [G.R. No, L-23357,
30, 1974, 56 SCRA 694), which mandates that in case the illegal dismissal of an employee has lasted for many years, he is enlited fo
backwages for a fixed period of three (3) years, ‘without further qualifications or deductions,” which means that there is no need to take
inlo account whatever the employee might have eamed during Such period and deducting the same from the backwages recovered.
oe eam. Lenard, G.R. No. 74271, Mach 31,1988 Htmay Copa Tet v. NLR GRE No 108889, July 30,
Emphasis supplied.
GR. No. L-22456, Sept 27, 1967, 21 SCRA 216,
GR. Nos. L-28791-93, Aug, 27, 1973.
GR. No. 76989, Sept 29, 1987, 154 SCRA 369,
GR. No. 91086, May 8, 1990, 185 SCRA 177.
of Emplopers
(1) Salunga v. CIR,’ where the union member resigned from the union but upon
being advised by the company of the consequence of his resignation which is dismissal from
the company, he withdrew or revoked his resignation but the union refused to readmit him. It
was ruled that a union is not entitled to arbitrarily exclude qualified applicants for
membership and a closed shop provision would not justify the employer in discharging, or a
union in insisting upon the discharge of, an employee whom the union thus refuses to admit
to membership without any reasonable ground therefor. If a union may be compelled to admit
new members who have the requisite qualifications, with more reason may the law and the
courts exercise the coercive power when the employee involved is a long-standing union
member who, owing to the provocations of the union officers, was impelled to tender his
resignation which he forthwith withdrew or revoked. The union here was declared to have
committed ULP but the company was spared from any liability. Nonetheless, the dismissed
employee was ordered reinstated to his former or substantially equivalent position in the
company, without prejudice to his seniority and/or rights and privileges and with back pay
which should be bome exclusively by the union.
(2) Manila Mandarin Employees Union v. NLRC,? where the union alone was held
guilty of ULP when it expelled, demanded and caused the dismissal of a union member based
on the union security clause in the CBA. Union security clauses are governed by law and by
principles of justice, fair play and legality. They cannot be used by union officials against an
employer, much less their own members, except with a high sense of responsibility, fairness,
prudence and judiciousness. A union member may not be expelled from her union and
consequently from her job for personal or impetuous reasons or for causes foreign to the
closed shop agreement and in a manner characterized by arbitrariness and whimsicality.
h. Dismissal for violation of union security clause where both the employer and
the SEBA were declared guilty of ULP.
The following cases illustrate where both the employer and the SEBA were
clause:
declared guilty of ULP involving dismissal for violation of the union security
(1) Rizal Labor Union v. Rizal Cement Co.,? where both the union and management
and
were declared guilty of ULP when the union requested the dismissal of 15 employees
said employees
management acceded by effecting the dismissal on the ground that the
formed another union, it appearing that the union security clause in the CBA merely provided
for a limited closed shop which did not justify the dismissal.
both
(2) Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.,“ where
the mother federation and the employer were adjudged liable for ULP for the dismissal of
workers who instigated the disaffiliation of the local union from the federation. The right to
disaffiliate is inherent in the contract and the act of disaffiliation was justified by the alleged
negligence of the federation in attending to the needs of the local union. Consequently, the
mother federation was held solely liable for the payment of backwages and the employer's
liability was limited to the reinstatement of the dismissed employees.
_ _Q) Rance v. NLRC where it was held that the act of some union members of
seeking help from another federation cannot constitute disloyalty as contemplated in the
CBA. At most, it was an act of self-preservation of workers who, driven to desperation, found
Shelter in the other federation which took the cudgels for them. The dismissed union
members were denied due process when they were dismissed for disloyalty to the union
based on the union security clause in the CBA. Employees are entitled to due process before
—___
GR No. L-22456, Sept. 27, 1967, 21 SCRA 216

Cr NO 76889, Spt 29,1987, 154 SCRA 269,
GI Neo 79, ly 20, 1966.
339 Sept87,
4, 1975, 66 SCRA 512.
GR No. 68147, June 30, 1989.
ANNOTATED
they may be expelled from the union on charge of disloyalty. The scandalous haste with
which respondent corporation dismissed 125 employees lent credence to the claim that there
was connivance between respondent corporation and respondent union. It is evident that
of ULP.
private respondents were in bad faith in dismissing petitioners. They are guilty
5, DOES EMPLOYMENT REINSTATEMENT INCLUDE UNION

REINSTATEMENT?
a. Employment reinstatement solely devolves upon the employer.
to @ union security
In cases where the employee who was terminated pursuant
illegal, there is
clause is ordered reinstated, on the basis of the finding that his dismissal was
despite the
no doubt that such obligation to reinstate devolves only upon the employer, this
ry for both the employer
fact that the liability for reinstatement may have been made solida effecting
and the union. For the reality is, between the two, only the employer is capable of
the actual reinstatement of the employee to his former position, in accordance with the
mandate of the law."
ent the solidary
Of course, as earlier discussed, making the order of reinstatem
tatement Is no
liability of both the employer and the union has its legal effect, as when reins
the monetary award of
longer feasible or possible thereby necessitating its conversion to the
atement,” in which case, the union will now have to share
“separation pay in lieu of reinst
of the liability for the
monetary burden as has been brought about by the solidary nature
converted? remedy of reinstatement.
result in union
b. Employment reinstatement does not ipso facto nor ipso jure
reinstatement.
The crucial question though is whether such employment reinstatement should

the union.
likewise result in union reinstatement, notwithstanding his earlier expulsion from
The obvious answer to this question is negative considering that:
(1) An illegal dismissal case solely concerns the employment relationship of the
employee with his employer and never his union relationship with his union;
(2) Expulsion is an intra-union dispute which cannot be commingled with an illegal
dismissal case;
(3) The Labor Arbiter has jurisdiction only over the illegal dismissal case; he has no
jurisdiction over an intra-union case which is cognizable by the Med-Arbiter.
A separate proceeding, therefore, needs to be initiated to resolve the issue of union
reinstatement of an illegally dismissed employee ordered reinstated.
Is it possible for an employee to be ordered reinstated to his former position or to a
substantially equivalent position but not to be reinstated to his membership in the union?
Since, as cited above, the proceedings are separate and distinct for illegal dismissal and illegal
expulsion, there is always the possibility that an employee is successful in securing
reinstatement in his illegal dismissal case but not in his effort to regain his union membership.
The reason is the resolution of one case is not in any way dependent on the other. One thing
definitive though is when the employee’s termination is declared valid and legal, there is no
way he could re-acquire his union membership since existence of employer-employee
relationship is indispensably required for such union membership. It is a basic principle im
labor law that one cannot join, form or assist a union unless he is an employee of the
establishment where such union will operate.
4 Nostell ship arp : CA (Sixth Division),

v, hearer 201 , G1261
G.R. No. 172149, Feb,8, v0, that such
and Fast Foods
coiesist baa tepusionpay Herd randserterkine noes inna. SCRA 10,
THE LABOR CODE OF THE PHILIPPINES 73s
Artick
259 [248].
e Unfair Labor Practi
of Employers
ces
c. Liability for union dues or agency fees of an employee ordered reinstated.
(NOTE:
This is discussed under
the topic “V-C. CHECK-
OF AGENCYOFF
FEE”, infra).
V-B-6.
FREE AND HARMLESS CLAUSE
1. EFFECT OF THE “FREE AND HARMLESS” STIPULATION IN THE UNION
SECURITY CLAUSE.
It isa common feature in union security clauses to provide that the union shall hold
the employer “free and harmless” from any monetary claims or damages as may arise or
may have arisen as a consequence of the declaration of illegality of the termination effected
pursuant thereto. The judicial dicta on this point vary from case to case depending in large
measure on the unique facts and circumstances obtaining in each case. The following cases
are illustrative of the variance in the application of this rule:
(1) A case where the employer’s liability was limited to reinstatement only and
the union held solely liable for payment of monetary awards.
The case of Manila Mandarin,‘ is an example of this rule. The provision in the
CBA, which states that "the Union shall hold the Company free and blameless from any
and all liabilities that may arise" should the employee question the dismissal, was cited as
one of the reasons for holding petitioner union solely liable to pay to the employee it
recommended for dismissal for violation of the union security clause “the wages and fringe
benefits from the time she was placed on forced leave until she is actually reinstated, plus ten
percent (10%) thereof as attorney's fees.” The liability of the employer, Manila Mandarin
Hotel, was limited to the reinstatement of the employee and to pay her for whatever service
charges may be due her during that period, which amount should be held in escrow by the
hotel. Evidence in this case indicates that the hotel would not have compelled the employee
to go on forced leave were it not for the union's insistence and demand to the extent that
because of the failure ofthe hotel to dismiss her as requested, the union filed a notice of strike
with the Ministry of Labor and Employment on the issue of ULP. The hotel was then
compelled to put the employee on forced leave and to stop payment of her salary.
(2) Cases where the employer was held liable for all the claims alongside with
the union.
The leading case of Liberty Cotton* best exemplifies this doctrine. The CBA states:
“.. for disloyalty to the union shall be dismissed from employment by the Company
upon request in writing by the Union, which shall hold the COMPANY free from any
e
liability arising from or caused by such dismissal.” On the basis of the mother federation’s
request to terminate the workers for “disloyalty in having instigated disaffiliation,”
respondent company, without conducting any hearing, hastily and summarily dismissed
them. However, despite said free and harmless clause, the High Court held respondent
company liable jointly and severally with the federation (PAFLU), for reinstatement and
payment of full backwages to the dismissed workers.3
In M. Greenfield‘ the federation undertook to hold the employer free from any
liability resulting from the illegality of the dismissal of 30 union officers which it
recommended to the employer for violation of the union security clause which stipulated that
“the UNION shall hold the COMPANY free and blameless from any and all liabilities
' Nania Mandarin Employees Union v. NLRC, G-R. No. 76989, Sept. 29, 1987, 154 SCRA 369.
; Liberty Coton Mills Workers Union v. Liberty Cotton Mills, Inc., G.R. No. L-33987, Sept 4, 1975, 66 SCRA 512.
Id; See the Resolufon dated May 31, 1979 (90 SCRA 391) on the motion for reconsideration of the petitioners which amended the
orginalruling of the Court
Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG-UWP) v. Ramos, G.R. No. 113907, Feb. 28, 2000.
~
736 LAW OWN LABOR RELATIONS
ANNOTATED
that may arise should the dismissed employee question, in any manner, his dismissal.”
In holding the company liable, the High Court cited its Resolution on the Motion for
Reconsideration in said case of Liberty Cotton Mills, where it was held that the company is
liable for the payment of backwages for having acted in bad faith in effecting the dismissal of
the employees. Thus, notwithstanding the fact that the dismissal was at the instance of the
federation and that it undertook to hold the company free from any liability resulting from
such a dismissal, the company may still be held liable if it was remiss in its duty to accord the
would-be dismissed employees their right to be heard on the matter.
(3) Case where the employer was held solidarily liable for all the claims
alongside the guilty union officers but not the union itself.
The CBA in General Milling Corp. v. Casio, contained a maintenance of

membership clause which pertinently states that “[t]he Union shall absolve the Company
from any and all liabilities, pecuniary or otherwise, and responsibilities to any employee
or worker who is dismissed or terminated in pursuant /sic/ thereof.”? The union
members here, respondents Casio, et al., were expelled by respondent union officers, Pino, et
al. The union? was not impleaded as a party in this case but only herein respondent union
officers, Pino, et al. On the basis of their recommendation, petitioner GMC dismissed the
union members, Casio, et al, immediately without observing the due process prescribed in
Alabang Country Club.
Consequently, the dismissal was declared illegal and petitioner GMC was held
solidarily liable with the respondent union officers (not the union which was not impleaded
here), notwithstanding the above-quoted free and harmless provision,*® for the payment of
separation pay in lieu of reinstatement, full backwages, moral and exemplary damages to
each of respondents, Casio, ef al, in the amounts of P50,000.00 and P30,000.00,
respectively, and attomey’s fees equivalent to 10% of the total monetary award.
(4) Case where the free and harmless clause was totally disregarded.
The fact that there is a “free and harmless” clause in the CBA is no guarantee that it
will ever be considered by the Court in its resolution of issues related to the illegality of the
termination of employment due to violation of the union security clause. The Court may
determine the appropriate relief without regard of this clause.
For example, the following “free and harmless” clause was stipulated in Carifio v.
NLRC:
“The UNION assumes full and complete responsibility for all dismissal
of any worker/employee effected by the UNION and conceded in tum, by the
COMPANY pursuant to the provisions hereof. The UNION shall defend and hold
the COMPANY free and harmless against any and all claims the dismissed
worker/employee might bring and/or obtain from the Company for such dismissal.”
However, no pronouncement was made in the decision respecting this clause. The
employer and the union were made liable to pay solidarily the penalty of P5,000.00 for not
affording due process to petitioner whose dismissal was found to be for a just cause.
GR_No. 149552, March 10, 2010.

see
Emphasis supplied,
Faw af Buklod ng Mangagawa (IBM)-Local 31 Chapter (Local 31).
Itis undisputed that IBM-Local 31, through Gablana, the IBM Regional Director for Visayas and Mindanao, twice requested GMC, in the
letters daied March 10 and 19, 1992, to terminate the employment of Casio, et al. as a necessary consequence of their expulsion from the
union. It's the third requisite - that there is sufficient evidence to support the decision of IBV-Local 31 to expel Casio, et al. ~ which
appears to be lacking in this case.
: os re i NLRC, G.R. No. 170287,
Feb, 14, 2008, ,
Malayang Samahan ng mga Manggagawa sa M. Greenfield j
T GR No. 91086, May 8, 1990, 185 SCRA 177. SMG DWE). Ramos, Sip
of Employers
2. RULE ON REIMBURSEMENT BY EMPLOYER FROM UNION.

a. Right of employer to be reimbursed for payment of any claims arising out of
dismissals demanded by the union under the union security clause.
t for
There are two (2) ways by which an employer may secure reimbursemen
whatever payment it may have made for separation pay in lieu of reinstatement, monetary
claims, backwages and damages, in cases where it is adjudged guilty of illegally dismissing
an employee upon recommendation of the union pursuant to the union security provision in
the CBA, to wit:
(1) By express provision in the CBA to that effect; or
(2) By securing it through judicial directive.
Example of the first:
An example where such right of reimbursement is expressly grante d in the CBA is

the case of Del Monte Philippines, Inc. v. Saldivar,! where it was stipula ted in Section 5 of
the CBA that “[ALU] assumes full responsibility of any such termination [of any
member of the bargaining unit who loses his membership in ALU] and hereby agrees to
hold [Del Monte] free from any liability by judgment of a_ com ent authority for
claims arising out of dismissals made upon demand of [ALU], and_latter shall
reimburse the former of such sums as it shall have paid therefor.”
According to the Supreme Court, this stipulation does present a cause of action in
by
Del Monte’s favor should it be held financially liable for the dismissal of an employee
of this
reason of expulsion from ALU. Nothing in this decision should preclude the operation
provision in the CBA.
Example of the second:
ded in the
An example where the right of reimbursement, while not expressly provi
y Cotto n Mills?
union security clause, was granted by judicial decree is the case of Libert
on
While the original decision rendered in this case on September 4, 1975° did not menti
y, in this May
anything about the grant of the right of reimbursement to respondent compan
he ¢
31, 1979 Resolution on the motio n for reconsideration, the Court amende
d its earlier ruling
by holding respondent company liable jointly and solidarily with the tum, federation for the
U - was, in sentenced to
payment of backwages, but respondent federation — PAFL
reimburse and pay respondent company any and all such amounts that said company may
pay thereunder by way of backwages to the workers. aa
taken cognizance of by
b. The action for cross-claim for reimbursement cannot be
thereover.
the Labor Arbiter; Voluntary Arbitrator has jurisdiction
The employer cannot assert his right of reimbursement by way of a cross-claim in
ry
the same labor proceeding before the Labor Arbiter. He should lodge it through volunta
arbitration. This is the gist of the ruling in the same case of Del Monte.‘ Thus, it was held that
the Labor Arbiter could not properly pass judgment on the cross-claim made by petitioner
al or
Del Monte against ALU for reimbursement should it be made liable for illegal dismiss
from the
ULP pursuant to the CBA, because jurisdiction over money claims arising or
interpretation or implementation of the CBA and those arising from the interpretation
enforcement of company personnel policies, is vested with the Voluntary Arbitrator or Panel
* GR No, 158620, Oct 11, 2006.

the Resolution on
G.R. No. L-33987, May 31, 1979, 90 SCRA 391. This is case
2 Liberty Cotton Mils Workers Union v. Liberty Cotton Mills, Inc., was not mentioned in the orginal decision in the same which was
the Motion for Reconsideration, This right of reimbursement
, Promulgated on September 4, 1975, 66 SCRA 512}
1 See copy thereof at 66 SCRA 512.
Del Monte Philippines, Inc. v. Saidivar, G.R. No. 158620, Oct. 11, 2006.
ANNOTATED
of Voluntary Arbitrators pursuant to Article 274 [261] and not on the Labor Arbiter under
Article 224 [217] of the Labor Code.
V-C.
CHECK-OFF OF AGENCY FEE
1. AGENCY FEE OR FAIR SHARE FEE.
a. Legal basis.
Employees who are not members of the SEBA but are members of the collective
bargaining unit (CBU) being represented by the SEBA in its collective bargaining
negotiations and dealings with the employer, are obligated to pay “agency fee” to the SEBA
which successfully negotiated the CBA with the employer under the authority of the 3"
sentence of the 3-sentence paragraph [e] of Article 259 [248] of the Labor Code which states,
thus:
“Employees of an appropriate bargaining unit who are not members of
the recognized! collective bargaining agent may be assessed a reasonable fee
ed?
equivalent to the dues and other fees paid by members of the recogniz
collective bargaining agent, if such non-union members acce) the benefits
under the collective bargaining agreement: Provided, that the individual
authorization required under Article 250 {241],? paragraph (0) of this Code shall
not apply to the non-members of the recognized collective bargaining agent.”*
Clearly from the foregoing, the SEBA is given the right to collect a reasonable fee,
called “agency fee” in case the non-SEBA members accept the benefits under the CBA.
Their entitlement thereto is not affected by their non-membership in the SEBA. It is called
“agency fee” because by availing of the benefits of the CBA, they, in effect, recognize and
accept the SEBA as their “agent” as well when it negotiated and concluded the CBA with the
employer. It is thus the employees’ acceptance of benefits resulting from the CBA that is the
material consideration that justifies the deduction of agency fees from the employees’ pay
and the SEBA’s consequent entitlement thereto.”
This fee is also known in other jurisdictions as “Fair Share Fee.”* And the moment
an employee pays the SEBA an agency fee, he is technically called an “Agency Employee.”
b. Meaning of CBA benefits for purposes of determining agency fee.
The law does not explain nor expound the meaning of the term “CBA benefits,” the
receipt of which would trigger the check-off of agency fee.® Does it refer only to economic
benefits or to both economic and non-economic benefits?
The decision in Del Pilar Academy,' clearly shows that the term “benefits” does not
only refer to salary increases but also to others that are, however, definitely purely economic
1 The use in the law of this word “recognized” is not accurate since it is descriptive of the situation where the collective bargaining agent
becomes a SEBA by virtue of “voluntary recognition” granted to it by the employer. Thus, a SEBA which becomes such by virtue of
certification election is property to be referred to as “certified” collective bargaining agent. This distinction acquires more significance in the
ight of the recent repeal of ‘voluntary recognition” as a mode of designating a SEBA and its replacement by the mode of “Request for
SEBA Certiication” introduced by Department Order No. 40-15, Series of 2015, issued on Septernber 07, 2015. Particularly repealed is
_ Ride Vl [Voluntary Recognition}, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of
SF SET ee ms br eapeiad rt vtec ty nr pice Win, SCAT FO PE
Rerey terpese gd (SEBA) CERTIFICATION’, ‘1 pursuant foto the
the amendment introduced by Sectioni 3 of saidt Department
Id.
Previously designated as Artice 242.
vu
Hoy Ones ‘inthe

of DaweUnted
Colega
Statste v. Joaquin, G.R. No. 110007,
Oct 18,8, 1996, 263 SCRA
wh
Pa 1996, 263 358; 331 Phil. 680, 692.
Labor Law Glossary, Matt Austin Labor Law, hitps:/mattaustinlabortaw.conViabor-law-dictonary/, Last aovessed: October 09, 2016.
Arfice 259(¢) [248(e)] of the Labor Code. sai last
=~
Article 259 (248]. Unfair Labor Practices of Employers
in nature. It is opined, however, that “benefits” may also refer to non-economic or political
benefits such as availment of the grievance machinery, voluntary arbitration and the like. The
following ratiocinations may be cited:
(1) Fair representation of all members of the CBU, - Once certified, the SEBA
represents not only its members but also its non-members who are included in the bargaining
unit. More so when the non-members have paid and are paying agency fees to the SEBA
thereby conferring upon them the right to avail of all the benefits flowing from the CBA,
without qualification as to whether it is economic or political in nature. It is axiomatic that
since the law does not qualify, one should not qualify.
(2) Non-waiver of right of individual employee or group of empl - The
designation of a SEBA does not deprive an individual employee or group of employees of
their right at any time to present grievances to their employer, with or without the
intervention of the SEBA, a right recognized under Article 267 [255]. Further, the provisions
on grievance machinery and voluntary arbitration under Articles 273 [260] and 274 [261],
respectively, one of the most political of stipulations in a CBA, do not make any qualification
as to who can avail thereof, that is, whether these remedies are available only to SEBA
members and not to non-SEBA members. On the contrary, Article 267 [255] explicitly
provides that an individual employee or group of employees, on their own, may validly bring
grievances directly to the employer even if there is an existing SEBA. The only restriction is
that enunciated in Tabigue,’ that an individual employee or group of employees cannot be
allowed to submit or refer unsettled grievances for voluntary arbitration without the
participation of the SEBA. With the payment to, and collection by, the SEBA of agency fees,
however, will its participation and acquiescence be legally withheld if the non-SEBA
members insist thereon?
(3) Payment of agency fee converts non-SEBA_ members into quasi-SEBA

members, - While payment of agency fee to SEBA does not have the legal effect of making
the non-SEBA members,* full-fledged members of the SEBA, by so paying the agency fee,
however, the non-SEBA members become thereby “quasi-SEBA members,” it having been
declared that the obligation to pay agency fee is “guasi-contractual” in nature5 By
becoming quasi-members® of the SEBA, they now have the concomitant right to avail not
only of the economic but non-economic or political benefits as well. Thus, except for the
“internal” activities of the SEBA involving its members only, the agency fee-paying non-
SEBA members should necessarily be entitled to all benefits provided in the CBA, including
such non-economic benefits as availment of grievance machinery and voluntary arbitration,
participation in policy and decision-making processes affecting their rights, benefits and
welfare, and the like, as if they are full-fledged members of the SEBA. This is so because by
so paying the agency fees, a “guasi-contract’” is created by operation of law which gives rise
to an obligation between the parties — the SEBA and the non-SEBA members — even in the
absence of a written agreement between them.
—_
"Del Pilar Academy v. Del Pilar Academy Employees Union, G.R. No. 170112, April 30, 2008.
4 National Brewery & Allied Industries Labor Union of the Phiippines v. San Miguel Brewery, Inc. G.R. No. L-18170, Aug. 31, 1963, B
SCRA 805; Dairy Queen Products of the Philippines, inc. v. CIR, G.R. No. L-35009, Aug. 31, 1977, 78 SCRA 439,
* Tabigue v. Intemational Copra Export Corporation, G.R. No. 183335, Dec. 23, 2009; See also Hotel Employees Union-NFL v. Waterfront
, Nsuler Hotel Davao, GR. Nos. 174040-41,
Sept. 22, 2010.
: Thisis according to Holy Cross of Davao College, Inc. v. Joaquin, G.R. No. 110007, Oct. 18, 1996, 263 SCRA 358; 331 Phil 680.
, Whether members of minarty unions or not members of any union at all ;
The word “quas”” means “having some resemblance usually by possession of certain attributes” or “having a legal status only by operation
OF construction of law and without reference to intent (a quasi contract),” See Merriam-Webster at http/ww.meriam-
Webster 5 i accessed: January 30, 2017).
” "Quaseontact”
cere eae tat fe baw creas athe abc lr ecrebrnend beawoen eppami * See The Free Dictionary
by Farlex at hitp:Mlagal-dictionary thefreedictionary.com/Quasi+Contract
(Last accessed: January 1, 2017).
ANNOTATED
Under the provision on quasi-contract in the Civil Code,' certain lawful, voluntary
and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one
shall be unjustly enriched or benefited at the expense of another. While the receipt by, and
acceptance of, benefits by non-SEBA members of the benefits flowing from the CBA may
unjustly enrich or benefit them at the expense of the SEBA and its members, this is cured by
the payment of agency fee. Conversely, since they have paid the appropriate agency fee, they
should be entitled to any and all benefits — economic and non-economic — stipulated in the
CBA, to avoid unjust enrichment on the part of the SEBA.
c. Nature of agency fee - not contractual but quasi-contractual.
Further to and in accordance with the discussion above, while the payment of
agency fees to the SEBA is a requirement recognized by law,’ it is not, however, contractual
but simply quasi-contractual in nature. It could not be contractual because the non-SEBA
members have no contractual relationship with the SEBA. But should the /arter decide not to
collect agency fees from the former despite their enjoyment of the benefits flowing from the
CBA, such decision shall not, in any manner, adversely affect the entitlement of the former to
the CBA-granted benefits. As SEBA, its obligation to represent both its members and non-
members stand valid and binding on it.
d. Anon-SEBA member has the right to accept or reject CBA and its benefits.
There is no law that compels a non-SEBA member, who is part of the CBU being
represented by the SEBA, to accept the benefits provided in the CBA. He has the freedom to
choose between accepting and rejecting the entire CBA itself or any of the benefits flowing
therefrom. Consequently, if a non-SEBA member does not accept the CBA itself or refuses
to avail of any of its benefits, he is not under any obligation to pay the “agency fee” to the
SEBA since, in effect, he does not give recognition to the status of the SEBA as his agent.
But the moment he accepts the CBA itself by ratifying it and accepting all the benefits
flowing therefrom, or even if he has not ratified it but he accepts and receives any or all of the
benefits provided therein, he becomes liable to pay the agency fee to the SEBA by virtue of
such acceptance or actual receipt of benefits.
e. Limitation on the amount of agency fee.
The SEBA cannot capriciously fix the amount of agency fee it can collect from its
non-members, Article 259(e) [248(e)] expressly lays down the limitation in that the agency
fee should be:
(1) reasonable in amount; and
(2) equivalent to the dues and other fees paid by members of the SEBA.*
Thus, any agency fee collected in excess of this limitation is a nullity.
FS. The Beck Rights doctrine.
However, a question may be raised on whether the amount of agency fee could be
reduced to less than the amount being paid by the SEBA members as their union dues,
' Under Article 2142 of the Civil Code of the Philippines, “quasi-contract” is defined and explained as “(certain lawful, voluntary and
unser a Give ete frida ion ot qustcnact he end than oe hal be unity enced or boned be
expense of another: Itis an obligation thal the law creates in the absence of an agreement between the partes, It's invoked by the courts
fare Url Enero, which coz when person retain money cr bens hat nal fainess belong to encther, woud exe wiht
; ab a cmmlnaad ards etek |, GR. No. 110007, Oct. 18, 1996, 263 SCRA 358; 331 Phil 680.
Dstny, @ requires two partes fo consent to mutually agreeable tenns. Under a quasi-contract, neither party is originally
intended fo create an agreement. Instead, an amangement is imposed to rectify an occurrence of unjust entichment.
* See Del Pilar Academy v. Del Pilar Academy Employees Union, infra.
5 See aso Sacton 4, Rule XOXV, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of
2003, Feb. 17, 2003},
"rie tf Peron .
considering that the non-SEBA members are supposed to pay the SEBA only for “the costs
of collective bargaining, contract administration, and grievance adjustment with their
employer,” which presumably should only be a fraction of the union dues being paid by the
SEBA members. For why should the non-SEBA members be made to pay for the equivalent
amount of union dues that SEBA members regularly pay to their union which presumably
cover costs for politics or other non-representational or non-CBA-telated activities such as,
inter alia, those spent for running the day-to-day operation of the union?
In other words, the requirement of the law,' that the agency fee be “a reasonable
fee equivalent to the dues and other fees paid by members of the recognized collective
bargaining agent,” should be qualifiedly interpreted to mean “equivalent to [that part only
of] the dues and other fees paid by members” of the SEBA to cover the costs and expenses
for “representational purposes” such as “the costs of collective bargaining, contract
administration, and grievance adjustment with their employer.”
This is the essence of the Beck Rights doctrine? in the United States. Thus,
employees who are not members of the SEBA can object to paying any agency fees to the
SEBA other than for “representational or CBA-related purposes.” This means that the
SEBA, through the exercise by the employees of the Beck rights, cannot be allowed to
impose as part of the agency fee, any money that is used for politics or other non-
representational activities. The most that non-SEBA members can be required to pay is an
agency fee that equals to their share of what the SEBA can prove is its “costs of collective
bargaining, contract administration, and grievance adjustment with their employer.”
Notably, it has been proved that except in extraordinary cases, the SEBA’s costs of collective
bargaining, contract administration, and grievance adjustment do not equal the union dues
amount. Simply put, Beck makes it clear that non-SEBA members required to pay agency
fees as a condition of employment have a right under the NLRA? to object and obtain a
reduction of their compulsory payments so that they do not include union expenses for
purposes other than collective bargaining, contract administration, and grievance adjustment.‘
g. Examples of expenses that are non-chargeable to agency fees.
The following constitute the best examples of costs and expenses incurred by the
SEBA which may not be imposed as part of the agency fee it collects from non-SEBA
members, to wit: 1) Political activities, including activities related to ballot and bond issues;
2) Ideological activities; 3) Public relations activities; 4) Litigation unrelated to collective
bargaining; 5) Engaging in illegal strikes; 6) Union "members only” benefits; 7) Portions of
union publications reporting on the foregoing activities.
The rule in cases where the issue of chargeability to the agency fee is raised is that
no union expense is chargeable to an objecting non-SEBA member unless the SEBA proves
before a neutral decision-maker, that it is related to collective bargaining, contract
administration and grievance adjustment.°
| Ace 259(e) [248(e)), Labor Code.

: This was the holding of the United States Supreme Court in the case of Communication Workers v. Beck, 487 U.S. 735 (1988).
“NLRA" refers to the National Labor Relations Act of 1935, better known as the “Wagner Act” Its a labor law in the United States which
guarantees the basic rights of private sector employees to organize into trade unions, engage in colectve bargaining for better terms and
‘ Conditions at work, and take collective action including stike, if necessary.
- eo of Nafional Right to Work Legal Defense Foundation, Inc., at htip/Awew nrtw.org/a/a_1_p.him; Last aovessed: October
* id; The items in the enumeration are based on the folowing cases: Abood v. Detroit Board of Education, 431 U.S. 209 (1977), Elis v.
500 U.S. 507 (1991);
BRAC, 466 U.S. 435 (1984); Lehnert v. Ferris Faculty Association, and
Locke v. Karass, 129 S. Ct 798 (2009);
- oo NLRB, 522 F.3d 423 (D.C. Cir. 2008).
ANNOTATED
h. Non-SEBA members need not become members of SEBA nor can their
payment of agency fees make them members thereof.
the
Employees who are not members of the SEBA which successfully concluded
CBA are not required to become members thereof despite their acceptance of the benefits
flowing from the CBA. Their act of paying the agency fees does not make them members
e
thereof. Hence, they cannot participate in SEBA elections or meetings, nor vote in collectiv
bargaining ratification elections, nor participate in other “internal” union activities of the
SEBA. Conversely, the SEBA cannot discipline them nor hold them liable for certain acts
which are related to membership with the SEBA.
i The non-SEBA members who are paying agency fee to the SEBA remain liable
to pay union dues to their own union.
The fact that the non-SEBA members who are members of the minority union are
paying agency fee to the SEBA does not free them from their obligation as minority union
members to continue paying their union dues and special assessments to their own union.
ng union
While, in the meantime that it has yet to attain the SEBA status, it can stop collecti
dues from its members who are paying agency fees to the SEBA, it must be emphasized that
failed to
there is no law that puts a stop to such obligation to pay simply because their union
viability of
be certified as the SEBA. Union dues are required for the continued existence and
pay
their union. They are its lifeblood. Hence, under this situation, they may be obligated to
two (2) kinds of dues:
(1) Union dues and special assessments to their own union; and
(2) Agency fee to the SEBA.
This is clear from a reading of Article 250 [241]' which does not qualify that the
right to collect union dues and assessments, on the part of the union, and the obligation to pay
the same, on the part of its members, are extinguished the moment the union is unsuccessful
in its quest to become the SEBA of the employees in the bargaining unit where it seeks to
operate.
2, CHECK-OFF OF AGENCY FEE.
a. Check-off of agency fee, meaning.
“Check-off’ of agency fee is a process or device whereby the employer, on
agreement with the SEBA, deducts agency fee from the wages of non-SEBA members and
remits them directly to the SEBA.”
b. Accrual of right of SEBA to demand check-off of agency fees.
The right of the SEBA to demand check-off of agency fees accrues from the
moment the non-SEBA member accepts and receives the benefits from the CBA. This is the
operative fact that would trigger such liability for check-off.*
c. Employer’s duty to check-off agency fees.
When so stipulated in a CBA or when it is clear that the non-SEBA member has
availed of and accepted the benefits provided in the CBA, the law recognizes it to be the duty
of the employer to check off the sum equivalent to the amount of agency fees from such non-
SEBA member’s wages for direct remittance to the SEBA.
' Ente "iis ard Condos Menberstip inate Oar

Gabriel v. Secretary of Labor and Employment, G.R. No. 115949, March 16, 2000; ABS-CBN Supervisors Employees Union
Members
Wr v. ABS-CBN
an Broadcasting Corp., G.R. No. 106518, March 14,, 1999; 19 : Holy
Holy Cross
Cros of of Davao College, Inc. v, Joaquin, G.R. No.
3 id.
THE LABOR CODE OF THE PHILIPPINES ve
Article
299 [248]. Unfair Labor Practice
of Employers
s
d. Minority union cannot demand from the employer to grant it the right to
check-off of union dues and assessments from their members.
The obligation on the part of the employer to undertake the duty to check-off union
dues and special assessments holds and applies only to the SEBA and not to any other
minority union/s operating in the same bargaining unit. This is clear from the manner by
which the Supreme Court described check-off in the case of Holy Cross,’ that it is only with
the SEBA that the employer is obligated to perform its task of checking off union dues,
ee assessments or agency fees. A similar obligation does not exist in regard to minority
unlons.
(NOTE: For more extensive discussion on check-off of union dues and special assessments,
please read the Notes and Comments on Article 250 [241], supra).
V-D.
UNION DUES VS. AGENCY FEES
1. UNION DUES CANNOT BE INTERCHANGED WITH AGENCY FEES.

While union dues are required to be paid by the members of the SEBA, agency
The
fees, on the other hand, are required to be paid by non-SEBA members to the SEBA.
are not
latter, therefore, cannot be compelled to pay such union dues to the SEBA, since they
e of
part thereof, but they can be required to pay agency fees to it by reason of their acceptanc
the CBA and its benefits.”
2, CHECK-OFF OF AGENCY FEES, DIFFERENT FROM CHECK-OFF OF
UNION DUES AND ASSESSMENTS.
by the non-
Check-off of agency fees, for its validity, does not require the execution
while such is an
SEBA members of individual written authorizations in favor of the SEBA;?
ents from SEBA
indispensable requisite for check-off of union dues and special assessm
ph [0] of Article 250
members.’ Article 259(e) [248(e)] makes it explicit that paragra
agency fees from non-
[241] requiring written authorization is inapplicable to the check-off of
SEBA members who receive benefits provided in the CBAS
the
Petitioner employer, in Del Pilar Academy,® admitted its failure to deductn by
but justifies the non-deductio
agency fees from the salaries of non-SEBA members,
Article 259(e) [248(e)]
reason of the absence of individual written authorization. It posits that The annual
s from the CBA.
is inapplicable considering that its employees derived no benefit
derived from the CBA.
salary increase of its employees is a benefit mandated by law and not ed
Sports (DECS) requir
According to petitioner, the Department of Education, Culture and the salaries and
all educational institutions to allocate at least 70% of tuition fee increases for
execution of the
other benefits of teaching and non-teaching personnel; that even prior to the
ses to its
CBA in September 1994, petitioner was already granting annual salary increa
deduction; hence, a written
employees. Besides, the non-SEBA members objected to the this
authorization is indispensable to effect a valid check off. The Supreme Court debunked
argument, thus:
Holy Cross of Davao College, Inc, v. JoaG.R. qui n,Oct 18, 1996, 263 SCRA 358; 331 Phil. 680.
No. 110007,
awenN
This was the holding of the United States Supreme Court in Communication Workers v. Beck, 487 U.S. 735 (1968).
See 3” sentence of the 3-sentence paragraph (e] of Article 259 [248] of the Labor Code.
See paragraph (0) of Article 250 [241), Labor Code which provides: “Other may than for mandatory activites under the Code, no special
assessments, atlomey’s fees, negotiation fees or any olher extraordinary fees be checked off from any amount due to an employee
without an individual written authorization duly signed by the employe e. The authorization should specifically state the amount, purpose
and ben efi
of the cia
deductio n.” ry
See also Holy Cross of Davao College, Inc. v. Joaquin,G.R. No. 110007, Oct 18, 1996, 263 SCRA
No, 170 112
April ,
30, 2008.
: 358: 331 Phil. 680: Del Pilar Academy v. Deal Pilar Academy Employees Union, G.R.
See "sentence of the 3-sentence paragraph [e] of Article 259 [246] of the Labor Code.
Dal Pilar Academy v. Del Piar Academy Employees Union, G.R. No, 170112, April 30, 2008.
i LAW ON LABOR RELATIONS
ANNOTATED
“Contrary to what DEL PILAR wants to portray, the grant of annual
salary increase is not the only provision in the CBA that benefited the non-union
employees. The UNION negotiated for other benefits, namely, limitations on
teaching assignments to 23 hours per week, additional compensation for overload
units or teaching assignments in excess of the 23 hour per week limit, and payment
of longevity pay. It also negotiated for entitlement to summer vacation leave with
pay for two (2) months for teaching staff who have rendered six (6) consecutive
semesters of service. For the non-teaching personnel, the UNION worked for their
entitlement to fifteen (15) days leave with pay. These provisions in the CBA surely
benefited the non-union employees, justifying the collection of, and the UNION’s
entitlement to, agency fees.
“Accordingly, no requirement of written authorization from the non-
union employees is needed to effect a valid check off. Article 259(e) [248(e)]
makes it explicit that Article 250 [241], paragraph (0), requiring written
authorization is inapplicable to non-union members, especially in this case where
the non-union employees receive several benefits under the CBA.”
3, DISTINCTION BETWEEN REFUSAL OF SEBA MEMBER TO PAY UNION

DUES AND REFUSAL OF NON-SEBA MEMBER TO PAY AGENCY FEES.
In cases where the prevailing arrangement is “open shop”, there is no distinction
between the refusal of a SEBA member to pay union dues, on the one hand, and refusal of a
non-SEBA member to pay agency fees, on the other hand. This is because under this
arrangement, there is no legal compulsion on the part of the employee to pay union dues or
agency fees, as the case may be. No sanction is imposed upon the refusing employee,
irrespective of his membership or non-membership with the SEBA.
But in cases where there is a union security arrangement in which payment of union
dues or agency fees to the SEBA is required, there is a distinction on the effect of such refusal
on the refusing employee, to wit:
(1) If the refusing employee is a member of the SEBA and payment of union dues is
expressly imposed as a condition for his continued membership in good
standing therein, his refusal to pay the union dues can be cited as a ground for
his expulsion from the union and, upon the SEBA’s recommendation, for his
subsequent dismissal from employment.
(2) If the refusing employee is not a member of the SEBA, the effect of his refusal
will depend on whether he accepts the CBA benefits or not. If he accepts, the
SEBA can demand that the grant of the CBA benefits to him be stopped; if he
does not accept, he has no obligation to pay any agency fees to the SEBA,
hence, no sanction can be imposed on him. Notably, his refusal to pay the
agency fees to the SEBA cannot result in the termination of his employment.
This is so because it is his acceptance and availment of the CBA benefits that
constitute the operative fact that makes him liable for the payment of the agency
fees to the SEBA. Consequently, the only sanction that can be imposed on him
for such refusal is to deprive him of the CBA benefits, nothing more, nothing
less.
4, LIABILITY FOR UNION DUES OR AGENCY FEES OF AN EMPLOYEE
ORDERED REINSTATED.
If an employee is dismissed on the ground of his violation of union security clause
and he is ordered reinstated because his dismissal is declared illegal, the question of whether
he is liable to pay union dues or agency fees would depend on any of the following
circumstances:
Article
259 [248]. Unfair Labor Practices of Employers
(1) If he is reinstated but not able to regain, through appropriate proceeding,' his
union membership with the SEBA, then he is liable to pay agency fees to his
former union, the SEBA, if he accepts and receives the benefits flowing from
the CBA — the same being the operative fact that triggers the check-off of
agency fees from his pay.
(2) If he is reinstated and also re-acquires, through proper proceeding,” his union
membership with the SEBA, he is liable to resume paying his union dues to the
SEBA as a member in good standing thereof.
V-E.
DEAUTHORIZATION
1. DEFINITION.
“Deauthorization”’ is an election process intended to achieve only one purpose and
effect, that is, to get rid of the “union security clause”? in the CBA which imposes “forced
membership” in the SEBA as a condition of continued employment. It ensures that the
employees are no longer forced to pay union dues or agency fees or similar impositions. The
process is called a “deauthorization election” because employees "deauthorize” the forced-
unionism Clause and remove it from the CBA.
2. EMPLOYEES ELIGIBLE TO VOTE.
In the United States,‘ employees in a collective bargaining unit (CBU) have the
right to call for a deauthorization election at any time during the life of the CBA by signing a
petition and voting therein, regardless of their membership or non-membership in the SEBA.
There are no “contract bar” or “election bar” rules like there are with decertification
elections. If 30% or more of the employees in the bargaining unit sign a Deauthorization
Petition, the National Labor Relations Board (NLRB) will conduct a secret ballot election to
determine if a majority of the employees wish to remove the forced-unionism clause in the
CBA and allow employees to choose whether or not to pay dues to the SEBA.
3. ABSENCE OF ANY PROVISION IN PHILIPPINE LAW.
This process is not provided in the Labor Code nor in any other Philippine law.
However, this void in the law does not mean that the employees composing the majority of
the CBU are precluded from initiating a petition for the conduct of deauthorization election
when such is justified under the circumstances obtaining therein. Indeed, there is no question
that they can initiate such a petition in the light of the following:
(1) A union security arrangement is not mandatorily required to be stipulated in a
CBA, as shown by the tenor and language of the law. In other words, even in its absence, the
CBA remains a valid and binding document,
(2) Not being mandatory in character, the only way the CBA will contain such a
provision is when the SEBA proposes and negotiates its inclusion therein. It is only when the
employer gives its agreement to it that it becomes part of the CBA.
(3) Being a provision initiated and introduced by and emanating from the
employees through their SEBA, intended as it is for their exclusive benefit and advantage,
* The appropriate proceeding is for the employee In initiate a separate complaint with the Med-Arbiter to resolve the issue of his expulsion
fom fe rion which s rauronin nature. This ssue cannot be corminged wih ie egal dlsmisal case over whch fe Labor Aer
id.
known as imes
;_ Somet "Forced Unionism,”
Particularly, under the National Labor Relations Act of 1935 (49 Stat. 449) 29 U.S.C. § 151-169 (also known as the NLRA and the
,_Vagner Act after New York Senator Robert F. Wagner).
This is clear from the tenor of the second sentence of paragraph (e) of Article 259 [248], to wit “Nothing in this Code or in any other law
shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except thase
employees who are already members of another union at the time of the signing of the collective bargaining agreement.”
ANNOTATED
they can well decide on whether to continue recognizing it or amend it or altogether withdraw
or waive it without getting afoul of any law, rule or regulation.
4, NET EFFECT.
The net effect should at least a majority or more of the employees vote to
deauthorize the union security clause would be the nullification and deletion of this clause
from the CBA. Consequently, the concomitant obligation to pay union dues, on the part of
the SEBA members, and agency fees, on the part of non-SEBA members, also ceases.
The bargaining unit, therefore, becomes an “open shop” or “merit shop.”! Under
this arrangement, there is a SEBA but the employees are not required to join or financially
support it by requiring the payment of union dues to it as a condition for their hiring or
continued employment. The CBA continues to be in force and effect, with the sole exception
of the deauthorized “union security clause.” The remainder of the CBA, including its
provisions on wages and benefits, remains in effect and the SEBA continues to serve as such
in that capacity, whether or not the employees pay any dues or fees to it. Simply put, even
after a successful deauthorization, every employee remains fully covered by the CBA,
whether or not he or she remains a union member or pays any dues. The employees cannot,
however, be compelled to pay any dues or fees to the SEBA.
5. DECERTIFICATION VS. DEAUTHORIZATION.
(NOTE: For an extensive discussion on this topic, please read the Notes and Comments
on Article 267 [255], specifically under the topic: “IX. DECERTIFICATION”, infra).
VI.
FILING OF CHARGES OR GIVING OF TESTIMONY
1. CONCEPT.
Under paragraph [f] of Article 259 [248] of the Labor Code,? it is ULP for an
employer to dismiss, discharge or otherwise prejudice or discriminate against an employee
for having given or being about to give testimony under the Labor Code.”
2. THE ONLY ULP NOT REQUIRED TO BE RELATED TO EMPLOYEES’
EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION AND COLLECTIVE
BARGAINING.
Jurisprudence is entrenched that Article 259(f) [248(D)] is the only kind of ULP that
need not be related to or connected with the exercise by the employees of their right to self-
organization and collective bargaining‘ or observance of a CBA.
3. MEANING OF “HAVING GIVEN OR BEING ABOUT TO GIVE TESTIMONY
UNDER [THE LABOR] CODE.”
The qualifying phrase “having given or being about to give testimony under [the
Labor] Code,” despite its clear language, should not be confined merely to the act of the
employee in actually testifying or offering his testimony in a labor case, whether as a party-
1 In common usage, "merit shop" Is often synonymous with being non-union or open shop.
2 Article 259(f) [248(f] of the Labor Code is lifted from a U.S. law which provides that it shall be ULP of an employer “to discharge or
otherwise discriminate against an employee because he has fled charges of given testimony under this subchapter{]’ (See National
Labor Relations Act, 29 U.S. Code § 158 - Unfair labor practices, Sec. 8(a) (4) thereof).
: arm ang apa hl ghey
Pepsi-Cola Philippines, Inc. v. Molon, G.R. No. 175002, Feb. 18, 2013; Bisig Manggagawa sa Tryco v. NLRC, G.R. No. 151309, Oct.
Jenene FRE ART RP et ORRIN Cae TP BI TP
5 Phiom Employees Union v. Philippine Global Communications, G.R No. 144315, July 17, 2006; Pepsi-Cola Philippines, Inc. v. Moln,
GR. No. 175002,
Feb. 18, 2013. ad inv. Moon
of Emplopers
in-interest therein or as a witness for himself, for a co-employee, for a union, for the
government or for a third party.
What is material to consider is the fact that the sanction imposed on the employee
that constitutes ULP, such as dismissal or discharge, or the prejudice or discrimination
pe against him that likewise amounts to ULP, was occasioned by his act of filing a
complaint against the employer or of participating in any labor case, regardless of its nature
and extent and in whatever capacity or purpose the same may have been made by him.
In Jtogon-Suyoc,' it was declared that ULP was committed by the employer when it
dismissed the worker who had testified in the hearing of a certification election case despite
its prior request for him not to testify in the said proceeding accompanied with a promise of
being reinstated if he followed the request.?
An example of a ULP involving the filing of a complaint is the case of Philippine
American Cigar. The extremely unique nature of this case consists in the fact that the person
dismissed by respondent company was not the employee who filed the case for ULP but his
brother. Despite this unorthodox situation, the High Court ruled that the company was guilty
who filed
of ULP. Although the law‘ would seem to refer only to the dismissal of the one
to assure absolute
charges against the company as constituting ULP, the legislative intent is
to proffer
freedom of the employees to establish labor organizations and unions as well as
charges for violation of labor laws.
would be
If the dismissal of an employee due to the filing by him of said charges
owing to the non-
and is an undue restraint upon said freedom, the dismissal of his brother
in fact a greater
withdrawal of the charges of the former would be and constitute as much,
directly
and more effective, restraint upon the same freedom. What is prohibited to be done
shall not be allowed to be accomplished indirectly.°
on
Decisions in the United States abound where similar dismissals of employees
For instance, the
account of union activities of relatives were declared constitutive of ULP.
dismissal of a brother,® or of an employee, because of the union activities of his wife,’ or of a
female employee, due to the union activities of her husband,’ was declared ULP.”
1 fHogon-Suyoc Mines, Inc. v. Baldo, G.R. No. L-17739, Dec. 24, 1964.
H. G. Henares & Sons v. National Labor
: See also National Fastener Corporation v. CIR, GR. No. L-15834, Jan. 20, 1961, 1 SCRA 17;
Union, G.R. No. L-17535, Dec. 28, 196 3 1,
SCRA 765.
n Cigar and Cigarette Manufacturing
3 Philigpine American Cigar and Cigaretile Factory Workers Independent Union v. Philippine America
Co., GR. No, L-18364, Feb. 28, 1963.
$ Section fa] 5 of RA. No. 875, now Article 259(f) [248()] of the Labor Code.
a
e Manufacturing Co, Inc. guilty of

5 The Supreme Court disposed ofthis case by declaring respondent Philippine American Cigar & Cigarett
ULP and ordering said respondent to reinstate the brother [Apotonio San Jose], rs of America (2 NLRB 963),
s id, cing In the Matter of Quidnick Dye Works, Inc. and Federation of Dyers, Finishers, Printers and Bleache s of American, 6 NLRB
See also In the Maller of the Fashion Piece Dye Works, Inc. and Federati on of Sik and Rayon Dyers and Finisher
p. 274.
322.
i Id., cing In the Matter of Ford Motor Company and H.C. MeGarily, 26 NLRB, p.
: Kd, citing Union Asbestos & Rubber Co. and United Textile Workers of America, AFL, 98 NLRB p. 1055.
* id, citing Teller’s work on Labor Disputes and Collective Bargaining (Vol. 2, p. 859), where he stated:
itself
The discharge of relatives of an emiployee who wes himself been discriminately discharged, for no other reason than the relation, is
of a discriminatory discharge, in violation of Sec. 8(3) of the Act. An illustrati on is Memphis Fumiture Co. (3 NLRB 26 [1997], enforced 2
Fad 1018 [CCA 6, 1938}, cert. den. 305 US 627, 59 S Ct 91, 83 L. Ed. 402 [CCA 6, 1938) where the evidence indicate d that the sole
reason for the dismissal of a female employee was that she was the wife of an employee who has been discharged. It was held thal the
discharge under the circumstances was discriminatory and a violation of the Act, even though discharged female employee was not
herself a member of any union. The Board said: "The respondent thus made union membership and acivibes a bar to Ihe employment
on
not only of the union member himse¥ but of members of his family as well. A more effective mode of discouragement of union affiiati
could hardly be found than the knowledge that such activities put not merely the union member's employment but that of thase closely
related to him in jeopardy. The direct cause of Mrs. Barmer's discharg e was the fact that her husband had been discharg ed, but the
indirect and antecedent cause was discrimination against union members in regard to hire and tenure of employment with intent to
discourage membership in the Union.” So also the Board has held that the discharge of discriminatingly discharged employees’ wives for
the reason that the employer did not desire the employees to continue to fve in the employers houses, which they would do so long as
their wives remained employed, is itself a discriminating discharge in violation of the Act. (Mexis Texfle Mills, 11 NLRB 1167 [1939],
enforced 110 F2d 565 [CCA 5, 1940]) In Mansfield Mis, Inc. (3 NLRB 901 [1937] , the respondent alleged thal the wife of an employee
ANNOTATED
4. THE ULP ACT NEED NOT INVOLVE DISMISSAL OR DISCHARGE.

The act of reprisal contemplated under this provision is not limited to the dismissal
or discharge of an employee.’ Any other act, short of dismissal, but which tantamount to
discrimination or prejudice against an employee by reason of his filing a labor complaint,
or for his being a prospective witness in a labor case or for actually testifying or participating
therein may also be considered ULP.
Thus, the terms “discrimination” and “prejudice” in the context of ULP under
this particular provision of the Labor Code, relate to the employee’s having given or being
about to give testimony under the Labor Code? and the employer's retaliatory act may take
various forms, such as transferring the employee to a demeaning position or assigning him
with more difficult work tasks, or otherwise punishing him because he has filed ULP or other
as a
charges against it or he has participated in the prosecution/defense of a labor case, either
party-in-interest thereto or a witness therein.
VIL
CBA-RELATED ULPs
1. THREE (3) CBA-RELATED ULPs.
Article 259 [248] enunciates three (3) CBA-related ULPs, to wit:
1) To violate the duty to bargain collectively as prescribed in the Labor Code.?
as part
2) To pay negotiation or attorney’s fees to the union or its officers or agents
of the settlement of any issue in collective bargaining or any other dispute.*
3) To violate a CBA.S
VII-A.
VIOLATION OF THE DUTY TO BARGAIN COLLECTIVELY
(NOTE: Discussion of this topic is presented as part of the Notes and Comments on Articles
264 [250]to 264 [253], infra. Only the ULP aspect thereof is discussed hereunder).
1. THE DUTY TO BARGAIN COLLECTIVELY.
The duty to bargain collectively devolves upon both the employer and the SEBA.*
As described in the law, the duty to bargain collectively means the performance of a mutual
obligation to meet 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 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 make any concession.’
In the absence of an agreement or other voluntary arrangement providing for a more
expeditious manner of collective bargaining, it is the duty of the employer and the
who had been discharged allegedly in violation of the Act was herself discharged in consequence of a company rule requiring the
dismissal of all members of the family when the head of the family is discharged. The Board said: "Assuming this as the reason for Mrs.
Sution's discharge, we would necessarily find that she was the victim of discrimination in violation of the Act, if we determined that Sutton
was discharged as the result of his union affiliation." in the usual case, it is the wife who is the sufferer because of the husband's union
affiliation. In |. Youlin and Company (22 NLRB No. 65 [1940]) the husband was discharged for failure to secure his wife's resignation from
the union this was held violative of Section 8(3) of the Act.
1 The terms “dismissa” and “discharge” have the same meaning. “Discharge,” in labor law, refers to the dismissal of an employee, usually
for breaking the rules or policies of management, incompetence, or some other reason. (See US Legal at USLega.com:
teaotrcrac ern cota) Len cement muy 12 27
Emplayees v. Pacific Life Assurance Corporation, G.R. No. 126717, Feb. 11, 1999. As held in this case, in
addition, this term likewise refers to any other act which encourages membership in any labor organization.
Aificle 259(g) [248(g)], Labor Code, nae .
w
Arfcle 259(h) [248(h)], bid.

wh
Artice 259()) [248()), Ibid.

See Articles 259(a) [248(q)] and 260(c) [249(c)), respectively, af the Labor Code.
“8
Article 263 [252], Labor Code; Elizalde Rope Factory, Inc. v. CIR, G.R. No. L-16419, May 30, 1963, 8 SCRA 67.
representatives of the employees to bargain collectively in accordance with the provisions of

the Labor Code.!
When there is a CBA, the duty to bargain collectively also means that neither party
should terminate nor modify such agreement during its lifetime. However, either party can
serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its
expiration date which, under the law, is considered the freedom period within which either
can validly terminate the CBA. It is the duty of both parties to keep the status quo and
to continue in full force and effect the terms and conditions of the existing agreement during
the 60-day period and/or until a new agreement is reached by the parties.’
2, FAILURE OR REFUSAL OF EMPLOYER TO GIVE COUNTER-PROPOSALS.
The failure of the employer to submit its counter-proposals to the demands of the
SEBA does not, by itself, constitute refusal to bargain as would amount to ULP.* However, it
is different if the employer refuses to submit an answer or reply to the written bargaining
proposals of the SEBA. In this case, unfair labor practice is committed. While the law does
not compel the parties to reach an agreement, it does contemplate that both parties will
approach the negotiation with an open mind and make a reasonable effort to reach a common
ground of agreement.
In the case of General Milling,’ the Supreme Court found the petitioner guilty of
ULP under Article 259(g) [248(g)] for refusing to send a counter-proposal to the SEBA and
to bargain anew on the economic terms of the CBA. The employer anchored its refusal to
bargain with and recognize the union on several letters received by the former regarding the
withdrawal of the workers' membership from the union. This defense was rejected by the
the
Supreme Court, saying that the employer had devised a flimsy excuse by attacking
.
existence of the union and the status of the union's membership to prevent any negotiation.
Similarly, in the earlier case of Colegio de San Juan de Letran§§ the petitioner
school was declared guilty of ULP when it failed to make a timely reply to the proposals of
the SEBA more than a month after the same were submitted to it. In explaining its failure to
reply, the school merely offered the feeble excuse that its Board of Trustees had not yet
convened to discuss the matter. Clearly, its actuation showed a lack of sincere desire to
negotiate the CBA thereby rendering it guilty of ULP.
In the 2016 case of Ren Transport Corp. v. NLRC,’ petitioner was declared to have
violated its duty to bargain collectively with private respondent union SMART;® the
incumbent bargaining agent, because of its refusal to submit to the latter its CBA counter-
proposals on the basis of its position that it has ceased to be the exclusive bargaining agent of
*.
the rank-and-file employees by reason of the disaffiliation of the majority of its members. In
so declaring petitioner guilty of ULP, the Court noted that it had a duty to bargain collectively
with SMART. Under 264 [253]? in relation to Article 268 [256]'° of the Labor Code, it is
to
* Attile 262 [251], Labor Code. This arfice traces its roots from a U.S. law which provides that it shall be ULP of an employer “to refuse
bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) ofthis tile T (See National Labor
Relations Act, 29 U.S. Code § 158 - Unfair labor practices, Sec. 8(a) (5) thereof).
2 Aticl 264 [253],eIbid.
3 Philppine Marine Radio Officers Association v. CIR, G.R. Nos. L-10095 and L-10115, Oct. 31, 1957, 102 Phil, 373.
4 Kok Loy'v. NLRC, GR. No, 54334, Jan. 22, 1986; Bradman Co., Inc. v, CIR, G.R. Nos, L-24134-35, July 21, 1977, 78 SCRA 10.
5 General Milling Corporation v. CA, G.R.No. 146728, Feb. 11, 2004.
® Colegio de San Juan de Letran v. Association of Employees and Faoully of Letran, G.R. No. 141471, Sept. 18, 2000.
7 GR Nos. 188020 & 1882532, June 27, 2016.
® Samahan ng Manggagawa sa Ren Transport (SMART).
* Atice 264 [253] is entitled “Duty to Bargain Collectively When There Exists a Collective Bargaining Agreement.” This was cited by the
Supreme Court in this decision as Artie 263 and not Article 264 which is the renumbering made by the DOLE onSecretary in her
Department Advisory No. 01, Series of 2015 (Renumbering of the Labor Code of the Philippines, as Amended), issued July 21, 2015. as
% Avficie 268 [256] is entitled “Representation Issue in Organized Establishments.” This was ated by the Supreme Court in this decision
Atticle 267 and not Arficle 268 which is the renumbering made by the DOLE Secretary in her Depariment Advisory Na. 01, Series of 2015
(Renumbering of the Labor Code of the Philippines, as Amended), issued on July 21, 2015.
LAW ON LABOR RELATIONS
7m
ANNOTATED
CBA - when
during the freedom period - or the last 60 days before the expiration of the
agent through the filing of
another union may challenge the majority status of the bargaining
a petition for a certification election. If there is no such petition filed during the freedom
of the incumbent
period, then the employer “shall continue to recognize the majority status
present case, the
bargaining agent where no petition for certification election is filed.” In the
ging the majority
facts are not up for debate. No petition for certification election challen
November | to
status of SMART was filed during the freedom period, which was from
SMART
December 31, 2004 - the 60-day period prior to the expiration of the five-year CBA.
therefore remained the exclusive bargaining agent of the rank-and-file employees.
3. FALLURE OF EMPLOYER TO PROVIDE UPDATED FINANCIAL
INFORMATION, WHEN ULP.
During and in the course of the CBA negotia tions, the SEBA has the right
to request
the balance
from the employer, copies of the annual audited financial statements, including
sheet and the profit and loss statement.' The employer is duty-bound to make available suchis
establishment which
up-to-date financial information on the economic situation of its
and necessary for a
normally submitted to relevant government agencies that is material
meaningful negotiation.”
ice the
In cases where the disclosure of some of the information would prejud
a commitment of the
employer’s business, its communication may be made conditioned upon
er, upon
union that it would be regarded as confidential to the extent required.? The employ
has thirty (30) calendar
receipt of the written request for copies of the financial statements,
days from receipt thereof within which to furnish the union therewith.‘
ed
It bears emphasis, however, that the refusal of the employer to furnish the request
required in Article
information is not ULP if the SEBA failed to put its request in writing as
251(c) [242(c)]° of the Labor Code.°
if an
The necessity to provide financial data to the SEBA cannot be overemphasized
ing
employer pleads inability to pay higher wages or fringe benefits. Good-faith bargain
is true
necessarily requires that claims made by either bargainer should be honest claims. This
t is important
about an asserted inability to pay an increase in wages. If such an argumen
enough to present in the give-and-take of bargaining, it is important enough to require some
sort of proof of its accuracy. And it would certainly not be far-fetched for a trier of fact to
reach the conclusion that bargaining lacks good faith when an employer mechanically repeats
aclaim of inability to pay without making the slightest effort to substantiate the claim.”
4. UNILATERAL CHANGES IN WAGES AND TERMS AND CONDITIONS OF
EMPLOYMENT IN THE COURSE OF THE CBA NEGOTIATIONS.
It is considered a failure and refusal to bargain in good faith if an employer, without
first negotiating with the union, unilaterally makes changes in wages, hours of work and other
terms and conditions of work that are the subject of the on-going CBA negotiation. But the
situation is different once the employer has given the SEBA the opportunity to negotiate over
ae 251(c) ae Labor Code. .

Section 2, Rule XVI, Book V, Rules to Implement the Labor Cod je, as amended by Deparment Order No. 40-03, Series of 2003,
ue
(February 17, 2003}

id.
4 Article 251(c) preg abate.
Paragraph (c) of this article provides as follows: “(c) To be furnished by the employer, upon written with its annual audited
financial statements, including Glance shee ar fi rfc nen skaerent Sais fe eX ela ting em = Cate o cet
emgage al eye primer mpi
employees or calendar days before the expiration existing collective bargain
: ajar ast case apanng ca 7 ™ ae =
Standard Chartered Bank Employees Union [NUBE] v. Confesor,
G.R. No.
7 NLRBv. Truitt Manufacturing
Co., 351 US Ye en, saciid
nee
THE LAB IPPINES
a
aset of proposals and there has been a deadlock, in which case, the employer has the liberty
to unilaterally implement its proposals. The law certainly does not intend to impose an
embargo upon the employer from introducing improvements in its employees’ benefits until
the CBA is concluded with the SEBA.
PANEL.
5, INTERFERENCE IN THE CHOICE OF UNION BARGAINING
a. Right of union to choose and designate the members of its union team.
If an employer interferes in the selection of the union’s negotiators or coerces the
union to exclude from its panel of negotiators, a representative of the union, and if it can be
on the free exercise of
inferred that the employer adopted the said act to yield adverse effects
s, a ULP
the right to self-organization or on the right to collective bargaining of the employee
[243]! of the Labor Code, is
under Article 259(a) [248(a)], in relation to, Article 253
committed.
s representatives
Thus, an employer’s personal objection to one or more of the union'
is so because both the employer and
does not ordinarily justify his refusal to negotiate. This and
respectively choose
the SEBA have the freedom and right to designate whomever they
law does not allow either or both
designate to represent them at the bargaining table. The
or actual conflicts between
parties to refuse to bargain with each other by reason of perceived
ves at such discussions must be
their representatives. Thus, the right to choose its representati
.”
left to the discretion of the SEBA and not to the whim of management
of the bank’s Human
However, in the case of Standard Chartered Bank, the act the
of the federation president from
Resource Manager in suggesting the exclusion
an anti-union conduct from which it can
negotiating panel was not considered a ULP. It is not
to yield adverse effects on the free
be inferred that the bank consciously adopted such act
ctive bargaining of the employees,
exercise of the right to self-organization and colle
ous to the commencement of the
especially considering that such was undertaken previ
suggestion that the bank lawyers be
negotiation and simultaneously with the manager’s
ds show that after the initiation of the
excluded from its negotiating panel as well. The recor
federation president in the union’s
collective bargaining process, with the inclusion of the
If at all, the suggestion should be
negotiating panel, the negotiations pushed through. are all part of the
ations that
construed as part of the normal relations and innocent communic
bank.
friendly relations between the union and the
the negotiating panel.
b. Excluded employees cannot be designated members of
designate its representatives
While concededly, a SEBA has the right to choose and with
ing in collective bargaining
that will compose its negotiating team for purposes of engag
in such team, individuals who
the employer, this does not, however, mean the right to include
managers or supervisors, Such
are excluded from the bargaining unit by reason of their being
which includes managerial or
fact of collectively bargaining with a rank-and-file union panel
since such active participation of
supervisory employees may even be considered as a ULP
SEBA would defeat its chief role
managerial or supervisory employees in the affairs of the
unit in its negotiations with the
and purpose of representing the employees in the bargaining
yment. This, in a way, would
employer in respect to the terms and conditions of emplo
rights to self-organization and
constitute interference in the exercise of the employees’ twin
collective bargaining.
; This provision slates: “Arie 253 [24], Coverage and employees’ right tp sateanizaton. Al persons employed in commerssh
mecical, or educatona instiitons, whether operaing for prt or Nok
Idustial and ayrculural enterprises and in reigious, chartable,
tions of thei own choosing for purposes of colectve
shal have the fight o selforganizaton and to form, jin, or assist labor organiza
d by Batas Pambansa Bang 70, May 1, 1980)
5 may form labor organizations for their mutual ad and protecion.” (As amende
: Ft Jackson Laundry Facility, ASLMR Dec. No. 242 (1972).
Standard Chartered Bank Employees Union [NUBE] v. Confesor, G.R. No. 114974, June 16, 2004.
ANNOTATED
c. Right of employer to negotiate size of union bargaining panel.

It is within the right of the employer to negotiate with the SEBA, the appropriate
size of the latter’s negotiating panel or bargaining team. This is more compelling if the
bargaining negotiations were to be conducted on company time.
6. EMPLOYER’S ACT OF NEGOTIATING WITH UNION MEMBERS
INDIVIDUALLY, A ULP.
To negotiate or attempt to negotiate with individual workers rather than with the
SEBA is ULP. For instance, the act of the employer in notifying absent employees
individually during a strike following unproductive efforts at collective bargaining that the
plant would be operated the next day and that their jobs were open for them should they want
to come in has been held to be a ULP, an active interference with the right of collective
bargaining through dealing with the employees individually instead of through their
collective bargaining representative.'
In Insular Life? respondent company through its president, sent two (2) sets of
letters to the individual strikers during the strike. The first contained promises of benefits to
the employees in order to entice them to return to work; while the second contained threats to
obtain replacements for the striking employees in the event they do not report for work on
June 2, 1958. The respondents contend that the sending of the letters constituted a legitimate
exercise of their freedom of speech. The Supreme Court, however, disagreed. The said letters
were directed to the striking employees individually - by registered special delivery mail at
that - without being coursed through the unions’ which were representing the employees in
the collective bargaining. Moreover, the sending of these letters is not protected by the free
speech provisions of the Constitution. The free speech protection under the Constitution is
inapplicable where the expression of opinion by the employer or his agent contains a promise
of benefit or threats or reprisal.‘
Indeed, it is ULP for an employer operating under a CBA to negotiate or to attempt
to negotiate with his employees individually in connection with changes therein. And the
basis of the prohibition regarding individual bargaining with the strikers is that although the
union is on strike, the employer is still under obligation to bargain with the union as the
employees’ bargaining representative.* Such actions are illegal as constituting unwarranted
acts of interference. Thus, the act of a company president in writing letters to the strikers,
urging their return to work on terms inconsistent with their union membership, constitutes
interference with the exercise of his employees’ right to coliective bargaining.®
7. UNION CANNOT VALIDLY BARGAIN IN BEHALF OF ITS MEMBERS ONLY.
Respondent union in Philippine Diamond Hotel,’ insists that it could validly bargain
in behalf of “its members,” only, relying on paragraph (a) of Article 251[242]* of the Labor
Code. It was, however, pronounced that respondent’s reliance on said article, a general
provision on the rights of legitimate labor organizations, is misplaced for not every legitimate
1 31 Am.Jur.563, cling NLRB v. Montgomery Ward & Co, [CA 9th] 133 F2d 676, 146 ALR 1045.
2 er Lie Assure Co, LA, Employees Assocs NATU v. sar Lie Assurance Co, Li, GR. No. L252, Jan. 30 197,37
2 Refering tothe petiioners, namely: The Insular Life Assurance Co,, Lid., Employees Association-NATU, FGU Insurance
Group Workers
& Employees
i Association-NATU,
Be ied andbate
insular Life Building dea Association-NATU whiwhich entereded into separate
CBAs with the
4 Cling 31 Am. Jur. 544; NLRB v. Clearfield Cheese Co, Inc., 213 F2470; NLRB v. Goigy Co., 211 F2d 533, 35 ALR 2d 422.
s Cing Nel Pl Suply Caparo. Natal Labo’ Rains Bor 321 US. 332" =
® Ciing Lighter Publishing, CCA 7th, 133 Fd 621.
? Prlgpne Darond He and Rest ke. Mena Darmond Hol] v. Marta anand Holl Employes Union, GR No. 18075, un
®t provides as flows: “Arie 251247]. Right of legitimate labor organizations, - A legtimate tabor organizt
actas representative ofits members for the purpose of colecve bargaining, oor sponge tee
Article 259 [248]. Unfair Labor Practices of Emplopers
labor organization possesses the rights mentioned therein. Article 251(a) [242(a)] must be
read in relation to Article 267 [255].! Thus, on respondent’s contention that it was bargaining
in behalf only of its members, the appellate court, affirming the NLRC’s observation that the
same would only “fragment the employees” of petitioner, held that “what [respondent] will
be achieving is to divide the employees, more particularly, the rank-and-file employees of
[petitioner] ... the other workers who are not members are at a serious disadvantage, because
if the same shall be allowed, employees who are non-union members wil] be economically
impaired and will not be able to negotiate their terms and conditions of work, thus defeating
the very essence and reason of collective bargaining which is an effective safeguard against
the evil schemes of employers in terms and conditions of work.” Petitioner’s refusal to
bargain then with respondent union cannot be considered an unfair labor practice to justify
the staging of the strike.
It bears noting that the goal of the DOLE is geared towards “a single employer-wide
unit which is more to the broader and greater benefit of the employees working force.” The
philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees’
bargaining power with the management. To veer away from such goal would be contrary,
inimical and repugnant to the objectives of a strong and dynamic unionism.
8 EMPLOYER’S ACT OF NEGOTIATING A CBA WITH ANOTHER UNION
DURING PENDENCY OF NCMB CONCILIATION WITH THE SEBA, WHEN
NOT A ULP.
Central Azucarera de Bais‘ is a unique case because during the conciliation of the
deadlocked issues with the NCMB which was the subject of a notice of strike filed by
petitioner CABEU-NFL, the duly registered labor union and the certified SEBA of the rank-
and-file employees of respondent CAB,5 petitioner CABEU-NFL’s president ceased to be
respondent CAB’s employee since he has already been lawfully terminated due to an
authorized cause (redundancy) and that (1) petitioner union has lost its majority status by
reason of the disauthorization and withdrawal of support thereto by more than 90% of the
rank-and-file employees in the bargaining unit; and (2) the workers themselves, acting as
principal, after disauthorizing petitioner union, have organized themselves into a new union
known as Central Azucarera de Bais Employees Labor Association (CABELA) with which
respondent CAB had concluded a new CBA which had been duly ratified by the rank-and-
file workers constituting 91% of the collective bargaining unit. Petitioner CABEU-NFL filed
a ULP complaint against respondent CAB for the latter's refusal to bargain with it.
In ruling that respondent CAB was not guilty of ULP due to its act of concluding a
CBA with CABELA, another union in the bargaining unit, and its failure to resume
negotiations with petitioner CABEU-NFL, the High Court noted that petitioner failed to
show that respondent CAB was motivated by ill-will or bad faith in doing so since it believed
that petitioner was no longer the representative of the workers. Respondent just wanted to
foster industrial peace by bowing to the wishes of the overwhelming majority of its rank-and-
file workers and by negotiating and concluding in good faith a CBA with CABELA. Such
actions of CAB are nowhere tantamount to anti-unionism, the evil sought to be punished in
cases of ULPs. Basic is the principle that good faith is presumed and he who alleges bad faith
respondent CAB,
has the duty to prove the same. By imputing bad faith to the actuations of
"It states: “Article 267 [255]. Exclusive bargaining representation and workers’ paripation in policy and decisionmaking. The labor
organization designated or selected by the majorty of the employees in an appropriat e collective bargahing unit shall be the exclusive
2 ISpresentatve of he employees in such unitfor te purpose of colectve bargaining mot
B5343, June 28, 1989, 174 SCRA 388, 397.
* id; Vide: Phiranco Service Enterprises v. Bureau of Labor Relations, G.R. No,Azucarera
Ceniral Azucarera de Bais Employees Union-NFL (CABEU-NF L| v. Central de Bas, in, (CAB), G.R. No. 186605, Nov. 17,
2010.
Central Azucarera de Bais, Inc. (CAB).
ANNOTATED
petitioner has the burden of proof to present substantial evidence to support the allegation of
ULP which, however, it failed to discharge.
9, SURFACE BARGAINING.
“Surface bargaining” is defined as “going through the motions of negotiating”
without any legal intent to reach an agreement. It is a form of ULP that may only be
committed by the employer. According to Standard Chartered Bank, it involves the question
of whether an employer’s conduct demonstrates an unwillingness to bargain in good faith or
is merely hard bargaining. There can be no surface bargaining, absent any evidence that
management had done acts, both at and away from the bargaining table, which tend to show
that it did not want to reach an agreement with the union or to settle the differences between it
and the union. Here, admittedly, the parties were not able to agree and thus reached a
deadlock. However, it must be emphasized that the duty to bargain “does not compel either
party to agree to a proposal or require the making of a concession.” Hence, the parties’ failure
to agree does not amount to ULP under Article 259(g) [248(g)].’
10. BLUE-SKY BARGAINING.
“Blue-sky bargaining” means making exaggerated or unreasonable proposals. This
is a kind of ULP which can only be committed by a SEBA.
In the same Standard Chartered Bank case, the minutes of the meeting show that
the SEBA 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. Hence, it
cannot be said that the union was guilty of ULP for blue-sky bargaining.
11. BOULWARISM.
Boulwarism is a negotiation tactic named after the former vice president of General
Electric, Lemuel Boulware, who pioneered this strategy.‘ It is a labor law principle in which
management opens the negotiation with a generous offer that is not meant to be negotiated.‘
In other words, it is an offer which is ultimate and to which no further revisions will be made.
This “take it or leave it” offer or counter-offer does not constitute proper collective
bargaining not only within the contemplation of United States laws but also under Philippine
law.’ It is considered ULP* as essentially, no labor negotiation has taken place.’
12. CLOSURE OF ESTABLISHMENT IN BAD FAITH.
In holding that petitioner is liable for ULP and illegal dismissal, it was pronounced
in St. John Colleges" that the timing of, and the reasons for, the closure of the high school
department and its reopening after only one year from the time it was closed down, show that
the closure was done in bad faith for the purpose of circumventing the union’s right to
Standard Charlered Bank Employees Union [NUBE] v. Confesor, G.R. No. 114974, June 16, 2004.
eee FETE i A NLU AREY ey MAGS GB: TTA i
ae
: Arthur A. Sloana and Fred Witney, Labor Relations, 7" Edition 1991, p. 195.
When faced with a strike, Boulware Is famous for telling the Intemational Union of Electrical Workers (IUEW) at the onset of negotiations
. that the company had already evaluated the workers’ needs and was putting forth its “first, last and best offer” on the table.
: See BusinessDictionary.com al htip/www businessdictionary comi/definition/Bouhwarism him, Last accessed: January 29, 2017.
General Bectic Co., 150 NLRB 192 (1964); Saginaw Township Board of Education, Michigan Employment Relations Commission Lab.
‘ Op. 127 (1970), reprinted in Smith, Edwards, and Clark, op, cll, p. 544.
Philippine National Railways v. Union de Maquinistas, G.R. No. L-32630, April 10, 1979, 89 SCRA 596; See also Herald Delivery Carriers
; la el aereee ee Inc., GR. No. L-29966, Feb. 28, 1974, 55 SCRA 713.
National a Relations (NLRB) of the United States has declared Boulwarism as a ULP, as itis in violation of the ner
slabs smcpalegeesegl orb! cyrpaslhelvei ed apll arpa “
9 See BusinessDictionary.com, supra. USLegal.com at htip//definitions. .com/b/boulwarism”where the outcome
method was described as not having a real negotiation. —_ ans
19 St John Collages, Inc. v. St John Academy Faculty and Employees Union, G.R. No. 167892, Oct. 27, 2006.
"nee “
Retree aT e
collective bargaining and its members’ right to security of tenure. Petitioner SJCI
undermined the Labor Code’s system of dispute resolution by closing down its high school
department while the 1997 CBA negotiations deadlock issues were pending resolution before
the DOLE Secretary. The closure was done in bad faith for the purpose of defeating the
union’s right to collective bargaining. Besides, as found by the NLRC, the alleged illegality
and excessiveness of the union’s demands were not sufficiently proved by petitioner SJCI.
Even on the assumption that the union’s demands were illegal or excessive, petitioner SJCI’s
remedy was to await the resolution by the DOLE Secretary and to file a ULP case against the
union. However, SJCI did not have the power to take matters into its own hands by closing
down its high school department in order to get rid of the union.
In Purefoods Corp.,' the closure of petitioner’s Sto. Tomas farm was declared to
have been made in-bad faith. Badges of bad faith are evident from the following acts of the
petitioner: it unjustifiably refused to recognize the Sto. Tomas Free Workers Union’s
(STFWU’s) and the other unions’ affiliation with Purefoods Unified Labor Organization
(PULO); it concluded a new CBA with another union in another farm during the agreed
indefinite suspension of the collective bargaining negotiations; it surreptitiously trans
d the
and continued its business in a less hostile environment; and it suddenly terminate
Petitioner
STFWU members but retained and brought the non-members to its Malvar farm.
or that the subject
presented no evidence to support its contention that it was incurring losses
Sto. Tomas farm
farm’s lease agreement was pre-terminated. Ineluctably, the closure of the
violated its
circumvented the labor organization’s right to collective bargaining and
s is
members’ right to security of tenure. The sudden termination of the STFWU member
employees in the
tainted with ULP because it was done to interfere with, restrain or coerce its
y was held liable for
exercise of their right to self-organization. Thus, the petitioner compan
illegally dismissed
the payment of moral and exemplary damages of 0500,000.00 to the
STFWU members.
(NOTE: See further discussion on this topic
in the Notes and Comments on Articles 261 [250] to 264 [253], infra).
VII-B.
PAYMENT OF NEGOTIATION FEES OR ATTORNEY'S FEES
1. WHEN PAYMENT CONSIDERED ULP.

Article 259(h) [248(h)] of the Labor Code considers as ULP, the act of the employer
in paying negotiation fees or attomey’s fees to the SEBA or its officers or agents as part of
the settlement of any issue in collective bargaining or any other dispute.
2. FEES SHOULD BE PAID FROM UNION FUNDS.
Article 228(b) [222(b)] requires that such attorney’s fees, negotiation fees or similar
charges should be paid from the union funds. These fees cannot be collected from the
employees individually.”
(NOTE: For a more comprehensive discussion on attomey’s fees and negotiation fees arising from CBA
on Article 228(b) [222(b)] of the Labor Code, supra).
negotiations, please read the Nofes and Comments
3. COUNTERPART PROVISION IN ARTICLE 260(e) [249%e)].
On the part of the union, asking for or accepting attorney’s fees or negotiation fees
from the employer as part of the settlement of any issue in collective bargaining or any other
dispute is considered ULP under Article 260(e) [249(e)] of the Labor Code.
‘Purefods Corp. v. Nagkakaisang Samahang Manggagawa ng Purefoods Rank-and-File, G.R. No. 150896, Aug. 28, 2008.
2 Pacific Banking Corporation v. Clave, GR. No. 56965, March 7, MObt 28 SOFA I: Gonesdosv. Tileea GF. No. TWOGT, Stet 18
1986, 144 SCRA 138; Amalgamated Laborers Association v. CIR, G.R. No. L-23467, March 27, 1968, 22 SCRA 1266.
ANNOTATED
VIT-C.
VIOLATION OF THE CBA
1, CORRELATION,
Article 259(i) [248(i)] of the Labor Code should be read in relation to Article 274
[261] thereof. Under the latter article, as amended,! violations of a CBA, except those which
are gross in character, are no longer considered as ULPs but merely as grievances that must
be resolved through the grievance machinery provided in the CBA. Gross violation of CBA
means flagrant and/or malicious refusal to comply with its economic provisions.”
(NOTE: For a more comprehensive discussion on this topic of violation of CBA, please
read the Nofes and Comments on Article 274 [261] of the Labor Code, supra).
2. PAST CASE LAW.
Prior to said amendment of Article 274 [261] by R.A. No. 6715, case law has been
consistent in holding that the act of the employer in refusing to comply with the terms and
conditions of a CBA constitutes bargaining in bad faith and thus a ULP.’ For instance, the act
of refusing to implement the negotiated wage increase stipulated in the CBA, which increase
is intended to be distinct and separate from any other benefits or privileges that may be
forthcoming to the employees, is a ULP.‘ Refusal for a considerable number of years to give
salary adjustments according to the improved salary scales in the CBA is also ULP.5 The act
of permitting non-union members to participate in the service charges, contrary to the
stipulation in the CBA, is likewise a ULP.° However, a reduction of working hours cannot be
considered a violation of the CBA absent any clear and specific prohibition thereon.’
VUL.
BURDEN OF PROOF
IN ULP CASES UNDER ARTICLE 259 [248]
In ULP cases against employers, it is the union which has the burden to present
substantial evidence to support its allegation of ULP committed by the employer. It is not
enough that the union believed that the employer committed ULP when the circumstances
clearly negate even a prima facie showing to warrant such a belief.’
TX.
PERSONS CRIMINALLY AND CIVILLY LIABLE
FOR ULPs OF EMPLOYER
1. THE LAW SPEAKS ONLY OF CRIMINAL LIABILITY OF PERSONS

ADJUDGED GUILTY OF COMMITTING ULP.
As provided in the last paragraph of Article 259 [248], only the officers and agents
of corporations, associations or partnerships who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable. Absent any such participation,
authorization or ratification, the officers and agents of said entities cannot be held personally
liable for ULP.
* Asamanded by RA No.6716.
See Fight Attendants and Stewards Association ofthe Philippines [FASAP] v. Philippine Alrines, nc., G.R. No 178083, July 22, 2008,
National Development Co. v. NOC Employees and Workers Union, G.R. No. -32387, Aug. 19, 1975, 66 SCRA 181; Oceanic Pharmacal
Emplayees Union v, Inciong, G.R. No. L-50568, Nov. 7, 1979, 94 SCRA 270.
‘ Plone Pope Weta Urn. NLRC, GR. No, L-60320, July 31, 1981; Alhambra Industries, Inc.v. CIR, G.R. No. L-25984, Oct 30,
Benguet Consolidated v. BC! Employees and Workers Union, G.R. No. L-25471, March 27, 1968, 22 SCRA 1208.
2sow ow
Nba Patio de Makat!v, Alba Patio de Makati Employees Association, G.R. No, L-37922, March 16, 1984,
Sac Eel SC GR No S102 Moy 18, 122 SRA
iu v. NLRC, , , Aug, 18, 1997, 277 SCRA 680, 687; See also Schering Employees Labor Union [SELU] v. Schering
Plough Corporation,
G.R. No. 142506, Feb. 17, 2005; Samhang Manggagawa sa Sulpico Sulpico L
GR. No. 140092, March 25, 2004, “ aap tres. Be
4 A

It bears stressing that because of the personal character of a criminal liability, mere
membership in the governing body of a corporation does not suffice to make a person
criminally liable for corporate acts. This was underscored in Manila Electric Company v. .
Atilano, thus:' “Finally, apart from its sweeping allegation that the respondents
misappropriated or converted its money placements, the handling prosecutor found that
MERALCO failed to establish, by evidence, the particular role or actual participation of each
respondent in the all criminal_act. Neither was it shown that they assented to its
commission. It is basic that only corporate officers shown to have participated in the
alleged anomalous acts may be held criminally liable.””
2. PERSONS ADJUDGED GUILTY OF COMMITTING ULP MAY ALSO BE
HELD PERSONALLY OR SOLIDARILY LIABLE WITH THEIR JURIDICAL
EMPLOYER FOR CIVIL DAMAGES ARISING THEREFROM.
While nowhere is it provided in Article 259 [248], that the officers and agents of
corporations, associations or partnerships who actually participated in, authorized or ratified
the ULP act are, in addition to their criminal liability, also liable for civil damages, such as
moral and exemplary damages and attorney’s fees, it cannot be gainsaid that they can be so
held liable personally and in solidum with their juridical employer, especially when they have
acted in bad faith,? in a manner oppressive to labor, or in a manner contrary to morals, good
customs, or public policy‘ - justifications for the award of moral and exemplary damages; or
the victim of the ULP act was compelled to litigate in order to seek redress and protect his
rights - a justification for the award of attorney’s fees.*
(NOTE: For discussion on how criminal cases for ULP may be initiated and prosecuted,
please read the Notes and Comme nts258 [247] of the Labor Code, supra).
on Article
‘eo eae
1 GR. No. 166758, June 27, 2012.

2 Ging Cruzvale, Inc. v. Eduque, GR. Nos. 168662, February 19, 2008. Underscoring supplied. A similar pronouncement was made by
the Supreme Court in Kara-an v. Ombudsman, G.R. No. 119990, June 21, 2004.
3 Article 2220 of the Civil Code states that ‘[wiilful injury to property may be a legal ground for awarding moral damages if the court should
find that, under the circumstances, such damages are justly due. The same rule apples to breaches of contract where the defendant
acted fraudulently
or in bad faith.” Moreover, Article 2219 of the Civil Code enumerates the cases under which moral damages may be
recovered. (See The Coffee Bean and Tea Leaf Philippines, Inc. v. Roly P_ Arenas, G.R. No. 208908, March 11, 2015; v. Mallen, Jr., G.R.
No. 173169, Sept 22, 2010, 631 SCRA 118, 125; Sunio v. NLRC, G.R. No. L-57767, Jan. 31, 1984, 127 SCRA 390; See also EPG
Constructions Co. v. CA, G.R. No. 103372, June 22, 1992, 210 SCRA 230; Cruz v. NLRC, G.R. No. 116384, Feb. 7, 2000; C & A
Construction Co., Inc. v. NLRC, G.R. No. 122279, Nov. 22, 1999; Se also Nancy S. Montinola v. Philippine Airfines, G.R. No. 198656,
Sept 08, 2014).
See Nancy S. Montinola v. Philippine Aidines, supra.
oe
See Article 2208 (2) of the Civil Code; Philippine Spring Water Resources, Inc. v. CA and Mahilum, G.R. No, 205278, June 11, 2014;
Zuelig Freight and Cargo Systems v. NLRC and San Miguel, G.R. No. 157900, July 22, 2013; Univac Development, Inc. v. Soriano, G.R.
No. 182072, June 28, 2013; Allling v. Feliclano, G.R. No. 185829, April 25, 2012, 671 SCRA 186, 205; Fadriquelan v, Monterey Foods
Corporation, G.R. Nos. 178409 & 178434, June 8, 2011; Exodus Intemational Construction Corp. v, Biscocho, G.R. No, 166109, Feb. 23,
2011, 644 SCRA 76, 91: CRC Agricultural Trading v. NURC, G.R. No, 177664, Dec. 23, 2009; Macasero v. Southem Industrial Gases
Philippines, G.R. No. 178524, Jan. 30, 2009, 577 SCRA 500, 507.
758
Chapter Il
UNFAIR LABOR PRACTICES OF
LABOR ORGANIZATIONS
Article 260 [249]. Unfair Labor Practices of Labor
Organizations. - It shall be unfair labor practice for a labor
organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their
right to self-organization. However, a labor organization
shall have the right to prescribe its own rules with
respect to the acquisition or retention of membership;
(b) To cause or attempt to cause al employer to
discriminate against an employee, including
discrimination against an employee with respect to
whom membership in such organization has been denied
or to terminate an employee on any ground other than
the usual terms and conditions under which
membership or continuation of membership is made
available to other members;
(c) To violate the duty, or refuse to bargain collectively with
the employer, provided it is the representative of the
employees;
(d) To cause or attempt to cause an employer to pay or
deliver or agree to pay or deliver any money or other
things of value, in the nature of an exaction, for services
which are not performed or not to be performed,
including the demand for fee for union negotiations;
(e) To ask for or accept negotiation or attorney’s fees from
employers as part of the settlement of any issue in
collective bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding,
only the officers, members of governing boards, representatives or
agents or members of labor associations or organizations who have
actually participated in, authorized or ratified unfair labor practices
shall be held criminally liable.’
NOTES AND COMMENTS
’ INTRODUCTION
1, CATEGORIES OF UNION’S BEHAVIOR CONSTITUTING ULP.
Article 260 [249] sets forth the six (6) major categories of behavior for which a
labor organization may be charged for ULP, enumerated from paragraphs (a) to (f) therein.
They are all cited and discussed in this section.
' As amended by Batas Pambansa Bilang 130, August 21, 1981; As renumbered pursuant to Section 5, RA. Na. 10151 June 21, 2011
and DOLE Deparment Adv No.1, Stes of 2015 Renumbei fhe Labr Cade lhe Phipps, s Arend), sued oy
Article 260 [249]. Unfair Labor Practices of Labor Organizations
It bears stressing, at the outset, that most of the categories of ULPs mentioned in
this article are not original Philippine law provisions. Four of the enumerated categories were
mirror reflections of similar provisions in the National Labor Relations Act (NLRA) of the
United States, particularly, paragraphs (a), (b), (c) and (d) thereof.’ Consequently, like the
ULPs of employers under Article 259 [248], the pertinent American jurisprudence
interpreting or construing these ULP acts of labor organizations may well be applied with
uasive effect to similar Philippine situations. Reference, therefore, is made to these U.S.
jurisprudence as well as authoritative commentaries thereon of American authors in the
discussion below of these union ULPs for purposes of greater insight and perspective.
2, KINDS OF UNION WHICH MAY COMMIT ULPs UNDER THIS ARTICLE.
Of the six categories of ULPs, it is only those mentioned in paragraphs (c), (e) and
() of this article that can be committed by a certified SEBA? and not merely by any ordinary
union. All the rest of the ULPs in this article can be committed by any union, irrespective of
whether it is a SEBA or anon-SEBA.
Under paragraph (c) thereof, the “duty” to “bargain collectively” mentioned

therein devolves only upon a union which has been certified as a SEBA, hence, as the article
states, “it is the representative of the employees.” Violating such duty or refusing to
discharge it is the essence of this kind of ULP.
. Under paragraph (e) thereof, the union referred to therein is engaged in “collective
bargaining” or “any other dispute” with the employer and the “negotiation or attorney’s
fees” that are “asked for” or “accepted” by the former from the latter are made “as part of
the settlement” thereof. These particular acts can only be done by a SEBA and not by any
other kind of unions.
Under paragraph (f) thereof, the union that can be said to have committed a
violation of the CBA necessarily pertains only to the union which is a party to such CBA.
And a union can only become a party to a CBA when it is a certified SEBA. However, it
must be stressed that simple violation of a CBA by the SEBA is no longer considered a ULP
per Article 274 [261] of the Labor Code but merely as a “grievance” that is cognizable and
resolvable through the grievance machinery provided in the CBA. It is only when such
violation is “gross”? in character that it is considered as ULP.
3. ORDER OF TOPICAL PRESENTATION.
The major topics discussed in this section are as follows:
|. RESTRAINT AND COERCION OF EMPLOYEES IN THE EXERCISE OF THEIR
RIGHT TO SELF-ORGANIZATION
I. DISCRIMINATION
Ill. DUTY OF UNION TO BARGAIN COLLECTIVELY
I'v. FEATHERBEDDING LAW
V. DEMAND OR ACCEPTANCE OF NEGOTIATION FEES OR ATTORNEY'S FEES
VI. VIOLATION OF THE CBA
Vil. BURDEN OF PROOF IN ULP CASES UNDER ARTICLE 260 [249]
Vill. CRIMINAL AND CIVIL LIABILITY FOR ULPs OF LABOR ORGANIZATION
See National Labor Relations Act, 29 U.S. Code § 158

- Unfair labor practices
eho nuars Gigeni Pxtevstangahighet? ‘ ae PR IONE
Grogs vidlafon of the CBA means flagrant and/or malicious refusal to comply with its economic provisions. [See Article 274 [261], Labor
Cove Fight Atedans and Starts Associon ol he Philppines FASAPIv. Phppne Anes ne, GR. No 78083 Ady 22.2008)
a LAW ON LABOR RELATIONS
ANNOTATED
I
RESTRAINT AND COERCION OF EMPLOYEES
ATION
IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZ
E
1. UNION MAY INTERFERE WITH BUT NOT RESTRAIN OR COERC
EMPLOYEES IN THEIR RIGHT TO SELF-ORGANIZE.
Under paragraph (a) of Article 260 [249]," it is ULP for a labor organization, its
officers, agents or representatives, to restrain or coerce employees in the exercise of their
right to self-organization. Compared to similar provision of paragraph (a) of Article 259
es’
[248], notably lacking is the use of the word “interfere” in the exercise of the employe
in the grant of
right to self-organize. The significance in the omission 0 f this term lies ] g
unrestricted license to the labor organization, its officers, agents or representatives to interfere
not
with the exercise by the employees of their right to self-organization. Such interference is and
since without it, no labor organization can be formed as the act of recruiting
unlawful
unlawful
convincing the employees to join it is definitely an act of interference. It becomes
to restraint or
within the context of paragraph [a] of Article 260 [249] only when it amounts
coercion which is expressly prohibited thereunder.
ITS
2. AUNION CANNOT PUNISH EMPLOYEES WHO DISAGREE WITH
TO RESTRAINT
POLICIES OR VIOLATE ITS RULES AS WOULD AMOUNT
OR COERCION OF THEIR ORGANIZATIONAL RIGHTS.
It is ULP for a union to restrain or coerce any employee in the exercise of his
into joining a
organization rights. He may or may not join a union. He cannot be coerced
union nor be restrained from joining one. Any coercion or restraint constitutes ULP.
act of
Once a member of the union, he cannot be punished purely on the basis of his
a
disagreeing with certain policies of the union against which he feels strongly. True it is that
n or Ics
union, pursuant to its broad rule-making power in respect to the acquisition, retentio
of membership, can prescribe certain penalties for the violation thereof, which may range
from fines, suspension or expulsion from membership; however, as a matter of general rule,
these sanctions are only internal in application for the proper governance and administration
and
of the union’s activities and affairs. Most certainly, such act of breaking union policies
rules, or refusing to comply with the penalties imposed, or voluntarily accepting the sanctions
meted, cannot be used as justification for the eventual dismissal of the employee from
employment; otherwise, such will constitute ULP of the union since it, in effect, would have
coercive and restraining adverse effect on the affected employee’s organizational rights.
A union member, to cite an extreme example, who organizes another union and
initiates the filing of a petition for certification election may, based on the rules of the union,
be expelled from membership in the union but such expulsion cannot result in giving power
to the union to recommend the firing of the errant member from his job or from harming in
any way his status as an employee. Beyond the imposition of sanctions, the union cannot do
anything to secure the termination of the employee from his employment. Any attempt of the
_ in further endangering the employment status of the employee would be tantamount to
Even if there is an existing union security clause in the CBA, the dismissal from
employment of the errant employee is not the automatic consequence of his violation as a
union member of union policies and rules. Expulsion from the union would not ipso facto not
1 Article 260(a) [249(a)] of the Labor Code traces its roots from a U.S.S. law which provide sbe ULP
that it shall for a labor organization
izat or its
sens‘ esto care (A) ene: in he exe oe his arid scion 157 of ste Pow, Tha
paragraph shall not impair the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of
mbox hate (8) an erleyer in he selecon of is representatives forthe purposes of colecve barging or he austen
grievances| (See National Labor Relations Act, 29 U.S. Code § 158 - Unfair labor practices, Sec. 8[b [1] thereof).
ipso jure lead to expulsion from the job. For there should foremost be compliance with the
pre-requisites: First, it must be clearly shown that the act committed by the employee against
the union also constitutes a violation of such clause; and second, that under such clause, the
union is granted the power to recommend to the employer the errant employee’s termination
of employment and the employer has agreed to effect it after compliance with due process per
the Alabang Country Club doctrine.'! The mere existence of such clause in the CBA is no
fool-proof assurance that termination is the immediate consequence and direct result for its
violation. As held in a cafena of cases, a dismissal based on a union security clause which
does not expressly authorize it for its violation constitutes ULP.
3. DEMOCRACY IN UNION AFFAIRS.
In the United States, from which most of the Philippine labor law principles on
ULPs were lifted, there is the 1959 Labor-Management Reporting and Disclosure Act
(Landrum- Griffin Act) which established a code of conduct guaranteeing certain rights to
union members within their union, and imposed reporting requirements on unions, union
officers, employers, and consultants. It protected the union membership rights of employees
from ULPs by unions; while the National Labor Relations Act’ protected employee rights
from ULPs by employers or unions. Having been patterned after US laws, it may be
concluded that under similar laws, particularly those governing ULPs, the right of union
members to have a voice in the affairs of their union should be recognized as part and parcel
of the constitutionally guaranteed right to self-organization and collective bargaining. Union
members, therefore, should have the twin freedoms of assembly and of expression. Of
assembly - to meet outside of the regular meetings of the union and discuss its affairs without
fear of reprisals from union officials. Of expression - to express their opinions, views and
arguments at union meetings or gatherings without any threat of being sanctioned or punished
for speaking their minds. This rule should hold true for as long as the pronouncements and
actuations of the union members do not border on disloyalty to the union and do not
constitute acts deleterious or inimical to the core interest of the union, such as supporting a
rival union.
4. EXPRESSION OF VIEWS WITHOUT THREAT OF REPRISAL OR FORCE OR
PROMISE OF BENEFIT IS NOT ULP.
Under U.S. law, the expressing by a labor organization of any views, argument, or
opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form,
shall not constitute or be evidence of ULP, if such expression contains no threat of reprisal or
force or promise of benefit.° Albeit there is no similar provision in Philippine law, this rule
should likewise apply to local situations.
1 The case of Alabang Country Club, Inc. v. NURC, G.R. No. 170287, Feb. 14, 2008, has enunciaied the folowing requisites that the
employer should determine, prove and comply with prior to terminating the employment of an employee by virtue of the enforcement of
the union security cause: (1) The union security clause Is applicable; (2) The SEBA is requesting for the enforcement of such clause; and
(3) There is sufficient evidence to support the SEBA’s decision to expel the employee from membership.
2 See. for instance, the cases of Confederated Sons of Labor v. Anakan Lumber Co., United Workers’ Union and CIR, G.R. No. L-12503,
April 29, 1960, 107 Phil. 915; San Carlos Milling Co. v. CIR, G.R. Nos. L-15453 and L-15723, March 17, 1961, 1 SCRA 734; Industrial-
Commercia lAgricult
Workers Organization ural
(ICAWO) v. Central Azucarera de Pilar, G.R. No. L-17422,
Feb. 28, 1962,4 SCRA 605;
Rizal Labor Union v. Rizal Cement Co., G.R. No. L-19779, July 30, 1966 (En Banc); and Manila Cordage Company v. CIR, G.R. Nos. L-
27079 and L-27080, Aug. 31, 1977; See also Inguillo v. First Philippine Scales, Inc. G.R. No. 165407, June 5, 2009, 588 SCRA 471.
3 The Labor-Management Reporting and Disclosure Act (LMRDA) — also known as the Landrum-Griffin Act — deals with the relationship
between a union and its members. The LMRDA grants certain rights to union members and protects their interests by promoting
democratic procedures within labor organizations.
4 The US Congress enacted the National Labor Relations Act (NLRA’) in 1935 to protect the rights of employees and employers, to
Icollective bargaining,
and to
aires curtail certain private sector labor andmanagement practices,
ecoony, i which can harm the general welfare
5 Nabonal Labor Relations Act, 29 U.S. Code § 158 - Unfair labor practices, Sec. 8(c) thereof
This rule applies to both the employer and the labor organization. wy i
ANNOTATED
5. RIGHT TO PRESCRIBE OWN RULES NOT ONLY ON ACQUISITION OR
RETENTION OF MEMBERSHIP BUT ON LOSS THEREOF.
Under the same provision, a labor organization is granted “the right to prescribe its
own mules with respect to the acquisition or retention of membership.” Although not
expressly mentioned in the law, it is equally the right of the union to prescribe in the same
rules with respect to the loss of membership therein through various modes allowed by law,
such as resignation, expulsion or impeachment. These rules are normally embodied in the
Constitution and By-Laws of the labor organization. Pursuant to this right, the labor
organization can prescribe the proper qualifications for membership as well as the rules and
regulations to be followed by its members in order to retain their membership in good
standing therein.
ON AND
6. THE INTERNAL RULES PRESCRIBED UNDER THE CONSTITUTI
BY-LAWS SHOULD BE STRICTLY ADHERED TO.
be
The intemal rules prescribed in the union’s Constitution and By-Laws should
strictly observed in all matters involving union affairs. Failure to so comply therewith may
amount to ULP.
a. Failure of union officers to observe internal rules would amount to ULP.
The 2016 case of Allan M. Mendoza v. Officers of Manila Water Employees Union
were
(MWEU)," illustrates this situation. The respondents, who are all officers of the union,
twice
charged for ULP by one of its members, petitioner Mendoza, because they have
s for not paying the
successively suspended him for 30 days each for his first 2 offense
non-
required union dues, and subsequently expelled him for his 3“ similar offense of
payment of union dues. The Supreme Court declared respondents “guilty of unfair labor
practices under Article 260 [249] (a) and (b) - that is, violation of petitioner's right to self-
organization, unlawful discrimination, and illegal termination of his union membership”
because “[aJs members of the governing board of MWEU, respondents are presumed to
know, observe, and apply the union’s constitution and by-laws. Thus, their repeated
violations thereof and their disregard of petitioner's rights as a union member - their inaction
on his two appeals which resulted in his suspension, disqualification from running as MWEU
officer, and subsequent expulsion without being accorded the full benefits of due process -
connote willfulness and bad faith, a gross disregard of his rights thus causing untold
suffering, oppression and, ultimately, ostracism from MWEU,”?
b. Failure of ordinary union members to observe internal rules would justify their
expulsion.
Baptista v. Villanueva? is an example of this situation. Petitioners here were former
union members of Radio Philippines Network Employees Union (RPNEU), a legitimate
labor organization and the sole and exclusive bargaining agent of the rank-and-file employees
of Radio Philippines Network (RPN), a government-sequestered corporation involved in
commercial radio and television broadcasting affairs; while herein respondents were the
union’s elected officers and members. Petitioners were among those who were expelled by
RPNEU, and ultimately dismissed by their employer upon the recommendation of RPNEU,
for violating a provision in its constitution and by-laws‘ when they filed a suit calling for the
impeachment of the officers and members of the Executive Board of RPNEU and various
petitions for audit covering the period from 2000 to 2004 before the DOLE, without first
resorting to and exhausting all internal remedies available under said constitution and by-
1 GR_No. 201595, Jan. 25, 2016,

2 See aso M.D. Transit. de Guzman, G.R. No. L-18810, April 23, 1963, 7 SCRA 726
3 GR No. 194709, July 31, 2013. AoTi23, 1963, ,
4 Particularly,
Section 2.5 of Article IX thereof.
of Labor Organizations
laws. Because of their expulsion, petitioners charged respondents of ULP under paragraphs
(a) and (b) of Article 260 [249] of the Labor Code. The Supreme Court upheld the validity of
itioners’ expulsion and the dismissal of their ULP accusation because they failed to
comply with the express mandate of RPNEU’s constitution and by-laws that before a party
js allowed to seek the intervention of the court, it is a pre-condition that he should have
availed of all the internal remedies within the organization. Petitioners have violated this
mandate when they filed petitions for impeachment against their union officers and for audit
before the DOLE without first exhausting all internal remedies available within their
organization. This act is a ground for expulsion from union membership. Thus, petitioners’
expulsion from the union was not a deliberate attempt to curtail or restrict their right to
organize, but was triggered by the commission of an act, expressly sanctioned by the union’s
constitution and by-laws.
I.
DISCRIMINATION
1, CONCEPT.
Under Article 260(b) [249(b)], it is considered ULP for a labor organization, its
officers, agents or representatives, to cause or attempt to cause an employer to discriminate
against an employee, including discrimination against an employee with respect to whom
membership in such organization has been denied, or to terminate an employee on any
ground other than the usual terms and conditions under which membership or continuation of
membership is made available to other members.
2. KINDS OF DISCRIMINATION,
There are three (3) kinds of discrimination that a union may commit under this
article, to wit:
(1) The act of the union to cause or attempt to cause an employer to discriminate
against an employee, in general, irrespective of whether he or she is a member
or non-member of the union.
(2) The discriminatory act of the union against an employee “with respect to
whom membership in such organization has been denied.”
(3) The discriminatory act of the union against an employee whose membership
therein has been terminated based “on any ground other than the usual
terms and conditions under which membership or continuation of
membership is made available to other members.”
2.1. FIRST KIND OF UNION DISCRIMINATION.
It is the basic characteristic of the first kind of union discrimination mentioned

above that its act which constitutes ULP consists in inducing or instigating the employer to
Commit discrimination against an employee who may or may not be its member. The purpose
is to encourage or discourage union membership. An example is the act of the union in
Convincing an employer to penalize employees who engage in anti-union activities.
The intent and initiative to discriminate should not emanate from the employer but
from the union, its officers, agents or representatives. In fact, the employer need not be shown
to have actually acted on such inducement or instigation of the union in order to hold the
latter liable for ULP. If it is shown that the employer has yielded and acquiesced to the
inducement and instigation of the union by actually committing the act of discrimination, it
May be held liable for ULP not under Article 260(b) [249(b)], which exclusively speaks of a
ULP committed by a labor organization, but under Article 259(e) [248(e)], which is the
Counterpart provision for employer ULP insofar as the charge of discrimination is concerned.
ANNOTATED
That Article 259(e) [248(e)] is the law violated by reason of such discriminatory action of the
employer consequent to the union’s inducement or instigation is clear from a reading of the
and copied.
US. law! from which this provision of Article 260(b) [249(b)] was patterned
DISCRIMINATION.
2.2. SECOND AND THIRD KINDS OF UNION
nation mentioned
The discriminatory ULP act under the 2 and 3 kinds of discrimi therewith
above is perpetratedby the union itself against an employee whos e membership
union.”
has been either: (1) denied by the union; or (2) terminated by the
member of the union because
The first involves an employee who has not become a
; while the second
his membership therein has been discriminatorily denied by the union
ber of the union but whose
refers to the case of an employee who is already 2 mem
any ground other than the
membership therein is discriminatorily terminated based “on
uation of membership is made
usual terms and conditions under which membership or contin
available to other members.”
cle 260(b) [249(b)] that states: Tasik
It is noteworthy to clarify that the phrase in Arti conditions und r
itions unde
terminate an employee on any gro und other than
the usual terms and _cond
ip is made available to other_members,”
which membership or continuation of membersh the employer as
ring to the termination of employment by
should not be construed as refer of a
be insti gated or reco mmen ded by the union but to the termination of membership
may “member” in the provision
e” instead of
member from the union. By so using “employe
s to sugge st, nay, conno te that it is the “emp loyment” rather than the “membership” in
seem
provision should have been stated more
the union which is being terminated. This
a [member] on any ground other than the
appropriately in this manner: “to terminate
ip or continuation f mem bership is made
usual terms and conditions underw ich membersh
to l
avai er b
otha s.”
bere
meml
CLAUSE IN THE CBA, NOT
3, EXCEPTION - UNION SECURITY .
DISCRIMINATORY.
atory ULP is the union security
Excepted from the coverage of this kind of discrimin
by the employer and the SEBA. The
provision of a CBA — a product of mutual agreement
which has been designated as
law, particularly, Article 259(e) [248(e)], allows a union
se an employer to discharge
SEBA, to bargain collectively for a contract that permits it to cau nding therein as a condition
employees who fail to join or maintain membership in good sta
l rule that unions may
for continued employment. This certainly is an exception to the genera
in favor of) employees
not cause or attempt to cause an employer to discriminate against (or
on union-related grounds. However, if the employee discharged on the basis of the
recommendation of a union is a religious objector, hence, exempted from the coverage of any
form of union security clause, the same may be considered ULP of the labor organization so
recommending,’
4, EXAMPLES.
wre the following g acts :
acts o. ofthe : uniunion of causing
May be cite d as exa mpl es of this UCP
or attempting to cause an employer:
(1) to demote an employee who incurs the union's hostility.
i
1 See the National Labor Relations Act, 29 U.S.
\ Code § 158. Philippine laws had consistently tly adopted the saidi legal concept of this kind
i of
ULP. The first law is R.A. No. 875, othenwise known as “The Industrial Peace Act’ which i was enacted on June 1 7 , 1953, [See its Section
3 See,. for instance, Lakas ng Manggagawang Makabayan LM) v, F Abiera GR. No. L-294 74. . Dec. 19, ;
1970 where on this
a discussion
‘THE LABOR CODE OF THE PHILIPPINES 765
(2) to take action against an employee for a reason that is arbitrary, discriminatory
or in bad faith.
(3) to tie seniority to union membership.
(4) to change an employee's wages, hours, or other terms and conditions of
employment for the worse because he did something to incur union’s hostility,
such as opposing a candidate it favors in a union election.
(5) to discharge an employee:
(a) for a reason other than his failure to pay periodic dues or initiation fees under
a union-security agreement or “on any ground other than the usual terms and
conditions under which membership or continuation of membership is made
available to other members.”
(b) under a union-security agreement where the union did not afford the
employee due process prior to his expulsion and before securing his
discharge.
(c) for failure to pay a union fine.
(d) because he disagreed with union policy.
Il.
DUTY OF UNION TO BARGAIN COLLECTIVELY
1, CONCEPT.
ied SEBA, its officers,
Under Article 260(c) [249(c)],! it is ULP for a duly certif
to bargain collectively with the
agents or representatives, to violate the duty, or refuse
This is the counterpart provision
employer, provided it is the representative of the employees.
employer of its duty to bargain
of Article 259(g) [248(g)] in regard to the violation by the
collectively.
2. PURPOSE.
the SEBA to bargain
The purpose of the law in imposing it as a duty on the part of
faith in order for them
collectively is to ensure that it will negotiate with management in good
of their employment
to conclude a mutually beneficial agreement on the terms and conditions
relationship.
3. REQUISITES.
The following are the requisites before a union may be held liable for ULP:
(1) The union is a duly certified SEBA; and
(2) It commits any of the following:
(a) It violates the duty to bargain collectively; or
(b) It refuses to bargain collectively with the employer.
3.1, First Requisite: The union is a duly certified SEBA.
At the outset, it is important to stress that the employer is not in any way obligated
to collectively bargain with a non-SEBA. It has every right to fend off any effort on the part
ofa union to negotiate a CBA before it is certified as SEBA through appropriate certification
election proceedings.’
On the other hand, a non-SEBA cannot commit ULP under this paragraph (c) of
Article 260 [249]. This is so because a non-SEBA has no duty to collectively bargain with the
1 Afficle 260(a) [249(a] af the Labor Code traces its roots from a U.S. law which provides that it shall be ULP for a labor organization or its
agents “fo refuse to bargain collectively with an employer, provided itis the representative of his employees subject to the provisions of
; section 159(a) of this tila| J (See National Labor Relations Act, 29 U.S. Code § 158 - Unfair labor practices, Sec. 8[b] 3] thereo!).
Makabayan v. awang
Lakas ng Manggag Marcela Enterprises, G.R. No, L-38258, Nov. 19, 1982, 118 SCRA 425.
ANNOTATED
employer; only a SEBA has that duty. Once certified as SEBA, it must engage in collective
bargaining with the employer since this is the very raison d’étre of the right to self-
organization — to enable workers to bargain in a collective fashion with their employer.
3.2. Second Requisite: The SEBA commits any of the following: (1) It violates the du
to bargain collectively: or (2) It refuses to bargain collectivel
with the employer.
(1) Violation of the duty to bargain collectively.
As a duly certified SEBA, the union has the duty and responsibility to represent all
the employees in the collective bargaining unit (CBU) equally and fairly, irrespectiveon”of
whether they are its members or not. This is the so-called “duty of fair representati
of all the CBU-
which involves primordially the duty to bargain collectively for and on behalf
covered employees. The SEBA should discharge this duty by equally representing everyone
in the CBU, handling cases and resolving issues fairly, processing grievances consistently,
and observing due process at all times. If the union violates this duty, it may be charged for
ULP by any aggrieved CBU-covered employee.
(2) Refusal to bargain collectively with the employer.
The act of refusing to discharge the duty to bargain collectively with the employer
includes wide-ranging scenarios. May be cited as an example is when the union restrains or
coerces the employer in its choice of its representative to the collective bargaining
purpose
negotiations by refusing to bargain with the representative it has designated for that
r
and insisting on dealing only with a particular management representative. The employe
as its
certainly has the sole and exclusive right to choose the person it shall designate
in any
representative at the negotiating table and the SEBA cannot be allowed to meddle
to
manner in that choice. It may further be illustrated by a situation where the SEBA refuses
engage in good-faith collective bargaining by coming to the bargaining table or listening to
any of the employer's proposals or worse, when it unduly engages in strikes, boycotts or other
concerted coercive actions that transgress its duty to bargain col lectively.
IV.
LAW
FEATHERBEDDING
1, CONCEPT.
Article 260(d) [249(d)] is the “featherbedding”’ provision in the Labor Code.
Patterned after a similar provision in the Taft-Hartley Act,? “featherbedding” or “make-
work” refers to the practice, caused and induced by a union, of hiring more workers than are
needed to perform a given work, job or task or to adopt work procedures which is evidently
senseless, wasteful, inefficient and without legitimate justifications since it is meant purely
for the purpose of employing additional workers than are necessary. This is resorted to by the
union as a response to the laying-off of workers occasioned by their obsolescence because of
1 Etymologically, the term “featherbedding” onginally referred to any person who is pampered, coddled or excessively rewarded, The term
originated in the use of feathers fo fil matfresses in beds, providing for more comfort. The modem use of the term in the labor relations
See nde ait Utindae tae eee
Changing technology which led to widespread unemployment, sought to preserve Jobs by negotiating contracts which required
employers In compensaie workers to do little or no work or which required complex and fime-consuming work rules so as to generate a
full day's work for an employee who olhewise would nol remain employed, (Meriam-Webster's Dictionary of Law, 1° ed., Meriam-
Webster, Inc., 1996. ISBN 0-87779-604-1; Visit aiso the Knowledge Encyclopedia at hitp:/Awwwreferenceforbusiness, corvknowedge!
Featherbedding html; Last visited: Jan. 30, 2017).
2 [tls the Labor Management Relations Act of 1947, betler known as the “Taft-Hartley Act” which was enacted
seb a LR A, US. Ca 6 Urb woes Se: Powel wh Sas cae ct
attempt
P cr ec employer to
arin arnt pay peierstrbate
or delveror agree
se to pay
faeor defver any i of value, in the nature of an exaction,
Money or other thing ’
aaa “
the introduction of machines, robots’ or new and innovative technological changes and
improvements m the workplace or as required by minimum health and safety standards,
among other reasons. Its purpose is to unduly secure the jobs of the workers. Because of these
lay-offs, the unions are constrained to resort to some featherbedding practices. Accordingly,
they usually request that the technological changes be introduced gradually, or not at all, or
that a minimum number of personnel be retained despite such changes. They resort to some
ways and methods of retaining workers even though there may be little work left for them to
do and perform. It therefore unnecessarily maintains or increases the number of employees
used or the amount of time consumed to work on a specific job, work or undertaking. By so
increasing the demand for workers, featherbedding obviously keeps wages higher.”
2. REQUISITES.
The requisites for featherbedding are as follows:
or
(1) The labor organization, its officers, agents or representatives have caused
attempted to cause an employer either:
for fee for union
(a) to pay or agree to pay any money, including the demand
negotiations; or
(b) to deliver or agree to deliver any things of value;
of value is in the
(2) Such demand for payment of money or delivery of things
nature of an exaction; and
n are not actually
(3) The services contemplated in exchange for the exactio
performed or will not be performed.
ng payment of sums of
On No. 1 above, it is important that the effort at securi
from and initiated by the union.
money or delivery of goods or things of value, emanates
the money or delivering the
On No. 2 above, the act of the employer in paying
will and is therefore, as the law states,
things of value demanded by the union, is against its
, as a legal term, means an excessive or
“in the nature of exaction” by the union. “Exaction” course of
e performed in the normal
harsh demand of a reward or fee for an official servic , under color of
or pay for the services than what the law allows
duty. It is taking more fee
should, however, be differentiated
one’s official authority? While it is a form of extortion,‘ it when something
from “extortion” in that, in “extortion,” the union extorts more than its due, due to it.5
due, when there is nothing
is due; in “exaction,” the union exacts what is not
or deliver things of
On No. 3 above, although the employer agrees to pay money
are made will not actually do or
value, the employees to whom such payment and delivery
no services would be rendered in
perform the contemplated services. Being an exaction,
of value delivered.
exchange for the money paid or things
presarbing minimum nuriber of workers to be hired and maintained and oher “make-work’ arrangements are considered vahd and legal,
peranding
oF theact provision
. notwithst of this section.
SLegal com found at titp/tefnions usegal comefexacon Last visited: June 20, 2018. Note that ‘he act
Stcocteg money ar he sum exacted i 090 caledexacten” See aso TheLawDicionary Com at hitp/Mhelawrcfonary orgexacton
Last
Seeaccessed:
YourDict June Le
30, 2016, i ee ee iia: ine at one |
Pas oe at hitp:/idefnitions uslegal.comle/exaction/. sited: Juné 30, 2016, The FreeDictonary.com
at httpegal-
esonery festeedicfonay ee dangushed hese bo tas, Fux: EXACTION, ba. A wil wrong dove by en ofc or by
sre whe under color of his office, takes more fee or pay for his Services than what the law allows. Between extorion and exacton there is
this - that in the former case the officer extorts more than his due, when something is due to him; in the latter, he exacts what is
ne ahe ahen there snothng duet him. Wshard; Co, Lit 368." Last accessed: June 30,2016,
ANNOTATED
3. DEMAND FOR PAYMENT OF STANDBY SERVICES.

A union commits ULP under this provision by causing or attempting to cause an
employer to pay or agree to pay for standby services. Payments for “standing-by,” or for the
substantial equivalent of “standing-by,” are not payments for “services performed” within the
meaning of the law. When an employer receives a bona-fide offer of competent performance
of relevant services, it remains for the employer, through free and fair negotiation, to
determine whether such offer should be accepted and what compensation should be paid for
the work done.!
It is an exaction constitutive of ULP within the meaning of this law for a union to
demand of the employer for a contract calling for payment of compensation for the presence
of one of its members at a jobsite when no unionist’s work is being done therein, and when
the employer indicated that it had no need for such labor, the union staged a strike to make
the employer respond to such demand. The demand herein is considered not a bona-fide offer
of competent performance of relevant services.”
A union’s demand that a theater corporation employ maintenance men at its theater
is also an arguable violation of the anti-featherbedding provision of the law where
maintenance men employed at other theaters under union compulsion did little or no actual
work but were merely present on the premises during working hours.?
4. DEMAND FOR PAYMENT OF MADE WORK.
Where work is actually done by an employee with the employer’s consent, the
union’s demand that the employee be compensated for time spent in doing the work does not
violate the law.4 The law leaves to collective bargaining the determination of what work, if
any, including bona-fide “made work,” shall be included as compensable services and what
rate of compensation shall be paid for it.’
A musicians’ union has been held not to have violated the anti-featherbedding
provision by refusing to permit a union band to perform at the opening game of the baseball
season, refusing to permit a union organist to play at the home games, and picketing the
baseball stadium, in order to force the owner of the baseball team to hire a union band to play
at all weekend home games; or by refusing to give its consent to appearances of travelling
bands in a theater unless the theater manager also employs a local orchestra in connection
with certain programs where the local orchestra is to perform actual and not token services,
even though the theater manager does not need or want to employ the local orchestra.
Similarly, a printers’ union does not violate the anti-featherbedding provision by securing
. payment of wages to printers from newspapers for setting “bogus” - duplicate forms for local
advertisements although the newspaper already has cardboard matrices to be used as molds
for metal casting from which to print the same advertisements — even though the “bogus” is
ordinarily not used but is melted down immediately.”
5. DEMAND FOR PAYMENT OF WORK ALREADY COMPENSATED.
The anti-featherbedding provision has been held not to bar a union from
demanding payment for work for which the employer has already paid another person.
NLRB v. Gamble Enterprises, Inc., 345 US 117 97 L Ed 864, 73 S Ct560.

ed
Intematonal Brotherhood of Teamsters, efc., 212 NLRB 968, 1974 CCH NLRB 26867, 87 BNA LRRM 1101.
Consolidated Theaters, Inc. v, Theatrical Stage Employees Union, 69 Cal 2d 713, 73 Cal Rotr 213, 447 P2d 325.
a
NLRB v. Gamble Enterprises, Inc., 345 US 117, 97 | Ed 864, 73 S Ct 560; American Newspaper Publishers Association v. NLRB, 345 US
100, 97 L Ed 852, 73S Ct 552, 31 ALR2d 497.
American Newspaper Publishers Association v. NLRB, 345 US 100, 97 L Ed 852, 73 S Ct 552, 31 ALR2d 497,
* Musicians Union v. Superior Court of Alameda County, 69 Cal 2d 695, 73 Cal Rptr 201, 447 P2d 313; NLRB v. Gamble Enterprises, Inc.,
345 US 117, 97 L Ed 864, 73 S Ct560.
” American Newspaper Publishers Association v. NLRB, 345 US 100, 97 L Ed 852, 73 S Ct 552, 31 ALR2d 497: Intemational Hod Carriers
Bldg, & Common Laborers Union, 135 NLRB 1153 1962 CCH NLRB 10938, 49 BNA LRRM 1638.
Article
260 [249], Unfair Labor Practices of Labor Organizations
Hence, @ union has been held not guilty of ULP in demanding payment to it of an amount
equal to the wages paid by the employer to a non-union employee for work to which the
union’s members were entitled. If the work is actually done by employees, there can be no
conflict with the anti-featherbedding provision, regardless of whether or not the persons
receiving payment are the ones who performed the work.!
V.
DEMAND OR ACCEPTANCE
OF NEGOTIATION FEES OR ATTORNEY’S FEES
1. CONCEPT.
Under Article 260(e) [249(e)], it is ULP for a labor organization, its officers, agents
rs as
or representatives to ask for or accept negotiation fees or attorney’s fees from employe
part of the settlement of any issue in collective bargaining or any other dispute.
2. COUNTERPART PROVISION.
This is the counterpart provision of Article 259(h) (248(h)] regarding the payment,
union or its officers or
on the part of the employer, of negotiation fees or attorney’s fees to the
or any other dispute.
agents as part of the settlement of any issue in collective bargaining
3, RATIONALE BEHIND THE PROHIBITION.
by the employer
The reason for this policy of the law is to prevent undue influence
issues it may have with the
on the independence of the union in its decision-making over any
t of negotiation fees or
former. Moreover, it is possible that the matter of fixing the amoun ntive
than the more substa
attorney’s fees alone would present a problem much complicated
the right, benefits or welfare of
issues involving the terms and conditions of employment and
the workers.
4, REQUISITES.
based on this particular
Following are the requisites to hold a union liable for ULP
ground:
commit either of the
(1) The union or any of its officers, agents or representatives
following acts:
(a) to ask for negotiation fees or attorney’s fees; or
(b) to accept negotiation fees or attorney’s fees;
given by, the
(2) The negotiation fees or attorney’s fees are demanded from, or
employer as part of the settlement of any of the following issues:
(a) in collective bargaining; or
- (b) in any other dispute.
On No. 1 above, there are 2 situations contemplated, namely:
of ULP
(a) when the union, its officers, agents or representatives are held guilty
y’s fees from the employer.
from the very moment they “ask” for negotiation fees or attorne
no need to prove that the employer has succumbed and given in
Under this situation, there is
to the union’s demand.
(b) when the union, its officers, agents or representatives are held guilty of ULP
even if they have not asked or demanded from the employer the payment to them of
negotiation fees or attorney's fees for as long as there is evidence that they have “accepted”
negotiation fees or attomey’s fees from the employer.
NLRBui
+ Rabo 195 F2d.906.
[CA2]nv
ANNOTATED
On No. 2 above, in order to be held guilty of ULP, there is a need to prove that the
union has “asked” or “accepted,” as the case may be, for the payment to it of the negotiation
fees or attorney’s fees by the employer, as principal consideration for the settlement of any
issues affecting labor-management relations, or even if not a principal consideration, as part
of the settlement of any such issues, chief of which are issues affecting collective bargaining.
Vi
VIOLATION OF THE CBA
1. CONCEPT.
Under Article 260(f) [249(0], it is considered ULP for a labor organization, its
officers, agents or representatives to violate a CBA.
2. COUNTERPART PROVISION.
This is the counterpart provision of Article 259(i) [248(i)] regarding the employer's
act of violating a CBA. But it must be noted that under Article 274 [261] of the Labor Code,
violation of the CBA is generally considered merely a grievable issue. It becomes an unfair
labor practice only if the violation is gross in character whic h means that there is flagrant
and/or malicious refusal to comply with the economic (as distinguished from non-economic)
stipulations in the CBA. This principle applies not only to the employer but with equal force
to the labor organization as well.
(NOTE: For more discussion on this topic of violation of CBA, please refer to the Notes
and Comments on Article 274 [261], intra).
VIL
BURDEN OF PROOF IN ULP CASES UNDER ARTICLE 260 [249]
For a charge of ULP against a labor organization to prosper, the onus probandi
rests upon the party alleging it to prove or substantiate such claims by the requisite quantum
of evidence.! In labor cases as in other administrative proceedings, substantial evidence or
such relevant evidence as a reasonable mind might accept as sufficient to support a
conclusion is required.? Moreover, it is indubitable that all the prohibited acts constituting
unfair labor practice should materially relate to the workers’ right to self-organization.?
VII.
CRIMINAL AND CIVIL LIABILITY
FOR ULPs OF LABOR ORGANIZATION
1. PERSONS LIABLE.
The last paragraph of Article 260 [249] is explicit in prescribing who should be held
criminally liable for ULPs committed by labor organizations, It states that only the officers,
members of governing boards, representatives or agents or members of labor associations or
organizations who have actually participated in, authorized or ratified ULPs shall be so held
criminally liable.
2. ALTHOUGH THE LAW SPEAKS ONLY OF CRIMINAL LIABILITY, UNION
OFFICERS MAY BE HELD LIABLE FOR CIVIL DAMAGES.
. Notably, there is nothing in said article that holds any of the persons so held
criminally liable also liable for the civil aspect thereof which may take the form of civil
' Baplista v. Vilanueva, G.R. No. 194709, July 31, 2013, citing UST Faculty Union v. University of Santo Tomas, G.R. No. 180892. April 7,
2009, 584 SCRA 648. 662.
2 |d,, citing Standand Chartered Bank Employees Union (NUBE) v. Confesor, G.R. No. 114974, June 16, 2004, 476 Phil. 346, 367
3 RR Fam LB ai Ccspeesa A 1877 Feb. 11, 1999, 362 Phi. 451,
Article
260 [249], Unfair Labor Practices of Labor Organtzatlons
damages. However, despite this silence in the law, jurisprudence is to the effect that union
officers who commit ULPs are personally liable for moral and exemplary damages as well as
attorney’s fees.
The 2016 case of Allan M. Mendoza v. Officers of Manila Water Employees Union
(MWEU), ' illustrates the situation where all the responsible officers of the union, respondents
in this case, were held guilty of committing ULP? against one of the union members, herein
petitioner, and consequently ordered to indemnify petitioner the amounts of P 100,000.00 as
and by way of moral damages, P50,000.00 as exemplary damages, and attorney's fees
equivalent to 10% of the total award.
The award of moral damages was justified by respondents’ repeated violations of
the union's constitution and by-laws and their disregard of petitioner's rights as a union
member - their inaction on his two appeals which resulted in his suspension, disqualification
from running as MWEU officer, and subsequent expulsion without being accorded the full
benefits of due process - connote willfulness and bad faith, a gross disregard of his rights thus
causing untold suffering, oppression and, ultimately, ostracism from MWEU. “Bad faith
implies breach of faith and willful failure to respond to plain and well understood obligation.”
The Court cited Vital-Gozon v. CA,} and for respondents’ act of violating petitioner’s right to
self-organization, Article 32 of the Civil Code was invoked, thus:
“Art. 32. Any public officer or employee, or any private individual, who
directly or indirectly obstructs, defeats, violates or in any manner impedes or
impairs any of the following rights and liberties of another person shall be liable to
the latter for damages:
XXX
“(12) The right to become a member of associations or societies for
purposes not contrary to law[.]”
Additionally, under the circumstances, the said award of exemplary damages was
justified, thus: “Exemplary damages are designed to permit the courts to mold behavior that
has socially deleterious consequences, and their imposition is required by public policy
suppress the wanton acts of the offender.”* This should prevent respondents from repeating
their mistakes, which proved costly for petitioner.
Finally, petitioner was adjudged also entitled to attorney's fees equivalent to 10% of
the total award because the unjustified acts of respondents clearly compelled him to institute
an action primarily to vindicate his rights and protect his interest. Indeed, when an employee
is forced to litigate and incur expenses to protect his rights and interest, he is entitled to an
award of attorney's fees.*
‘ GR_No. 201595, Jan. 25, 2016.

2 The respondents’ ULP consists in thelr act of twice suspending petitioner and subsequently expelling him from membership therewith on
the ground of non-payment of union dues, without affording him the right to appeal under the union's constitution and by-aws. They were
thus dectared “guilty of unfair labor practices under Avticle 260 [249] (a) and (b) - that is, violation of petitioner's right to setf-organization,
unlawful discrimination, and illegal termination of his union membership xox.”
> GR_No, 129132. July 8, 1998, 354 Phil. 128, 151.
* See U-Bix Comoration v. Bandiola, G.R. No, 157168, June 26, 2007, 552 Phil. 633, 651, Further, under Article 2229 of the Civil Code,
‘feemplary or corrective damages are Imposed, by way of example or correction for the public good, in addition to the moral, temperate,
iquidated or compensatory damages.” (See Montinola v. Philippine Airines, G.R. No. 198656, Sept 8, 2014, 734 SCRA 439, 464).
5 See Tangga-an v. Philippine Transmarine Carriers, inc., G.R. No. 180636, March 13, 2013, 693 SCRA 340, 356, citing Kaisahan at
cee eg Wg Ra a NN tC CTPA GR TENT, Hi TE,

TITLE VI - Unfair Labor Practices

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TITLE VI - Unfair Labor Practices

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UNFAIR LABOR PRACTICES

Article 258 [247]. Concept of Unfair Labor Practice and

|. LABOR CODE PROVISIONS ON ULPs

ULPs of Labor Organizatons.

to support workers’ organizations by financial or other means, with the object of

3. ULP HAS CRIMINAL CONSEQUENCES.

a primary dispute and are dstibuted by anciher employes, as Ing

peace. Hence, these proposals to

+ Previously numbered Artide 289.

seat ee tn ar. cana gnc hamatpitn

' Philcom Employees Union v. Philippine Global Communications, supra.

cause ater cree 9) STR

1, COVERAGE OF THE CIVIL ASPECT OF ULP.

1 See Ariicle 258 [247], Labor Code.

1. RATIONALE FOR TREATING ULP AS A CRIME.

Article 303 [288], Labor Code.

See Article 305 [290], Labor Code.

(e) To discriminate in regard to wages, hours of work and

(f To dismiss, discharge or otherwise prejudice or

The provisions of the preceding paragraph notwithstanding,

1. CATEGORIES OF EMPLOYER’S BEHAVIOR CONSTITUTING ULP.

In Carmelcraft§ petitioner company invoked as reason to justify the cessation of its

Certain specific acts have been jurisprudentially declared as ULP in a number of

Subsequently, on December 18, 2003, the

5.2. THREATS CONSTITUTING ULP.

_ (a) When management conducts espionage or surveillance of the meetings and

(i) Ceasing operation due to the establishment of the union.!

Samahan ng Manggagawa sa Bandolino-LM LC

the strike was declared

©) Dismissal of an employee which is not discriminatory since other employees

in San Rafael, Bulacan and not in Caloocan

amounted to ULP because it would paralyze bers

nt Workers [PTUC]. CIR,SCR,G.R.A No. -20044, April 30, 1964.

ig Manggagjawa sa Tryoo v. “NLRC, N

which provid es: “ ( ) To dismis s, discha rge

1 Aftide106, Labor Code,

“a. PAL shall continue recognizing PALEA as the duly certified-

3. ILLUSTRATIVE CASES OF COMPANY UNION.

1 GR_No. 18704, Jan. 31, 1963, 7 SCRA 208. ;

also Progressive tanicn

|. Discrimination. - This is found in the first sentence thereof which considers as

GR.No. 126717, Feb. 11, 1999.

GR_No. L-29356, Oct. 31, 1974, 60 SCRA 408.

8. DISCRIMINATION IN GRANT OF BONUS.

* GR. No, L-23357, Apri 30, 1974, 56 SCRA 694. ,

1 See paragraph (e) of Article 259 [248], Labor Code.

706 LAW ON LABOR RELATIONS

5. The nature of such clause is contractual.

. Maintenance of membership agreement;

. Modified union shop agreement;

Tibay Enterprises v. Ang Tibay, L-8259, Dec. 28, 1957.

1 GR. Nos, L-28791-93, Aug. 27, 1973.

1 Rothenberg on Labor Relations, page 410.

faithfully to its terms. It is

does not go so far as to countenance disrespect for or failure to observe

must yield to it. That is

1 Atticle 255 [245], Labor Code.

Section 5, Article I [Bill Pgs).

GR. No. 84433, June 2, 1992.

Aled Workers’ Association-CAPAWA.

condition of continuous employment in the Manila Cordage Company. Thus, in consonance

a. Union security applies only to members of the SEBA.

1 Article Ill, Sec. 1(6), 1935 Constitution.