Kiok Loy v. NLRC January 22, 1986 Cuevas, J.: FACTS: Oct.

. 1978 Pambansang Kilusang Paggawa (Union), a legitimate labor federation, won in a certification election. Bureau of Labor Relations (BLR) certified such Union as the sole and exclusive bargaining agent of the rankand-file employees of Sweden Ice Cream Plant (Company). Dec. 1978 Union furnished Company with two copies of its proposed CBA and requested the latter for its counter-proposals. Company ignored. Feb. 1979 Union filed a Notice of Strike with BLR on the ground of unresolved economic issues in collective bargaining. Amicable settlement having failed, BLR certified the case to the NLRC for compulsory arbitration. Company kept on asking for the cancellation and resetting of hearing due to reasons like failure to submit its position paper and withdrawal of its counsel. Its final request for further postponement was denied. The arbiter then ruled that the Company has waived its right to present further evidence and considered the case submitted for resolution. NLRC declared Company guilty of unjustified refusal to bargain, in violation of Sec. (g) Art. 248 (now Art. 249) of the Labor Code. NLRC also adopted the CBA draft proposal submitted by the Union and declared it to be the collective agreement. Hence, this petition by Company, imputing GAD against the NLRC.

and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. The mechanics of collective bargaining is set in motion only when the following jurisdictional preconditions are present: (1) possession of the status of majority representation of the employees' representative in accordance with any of the means of selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor Code - all of which preconditions are undisputedly present in the instant case. From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the Union has a valid cause to complain against the Company's attitude, the totality of which is indicative of the latter's disregard of, and failure to live up to, what is enjoined by the Labor Code to bargain in good faith. We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed Collective Bargaining Agreement, to the Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is especially true where the Union's request for a counter proposal is left unanswered. Even during the period of compulsory arbitration before the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications the rule had been laid down that "unfair labor practice is committed when it is shown that the respondent employer, after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal This doctrine was reiterated anew

ISSUE/HOLDING: 1. WON the NLRC committed GAD in finding that Company committed unfair labor practice for refusal to bargain. NO GAD. 2. WON the Company was denied the right to be heard and present its side when the Labor Arbiter denied the Company's motion for further postponement. DUE PROCESS WAS OBSERVED.

RATIO: 1. WON the NLRC committed GAD in finding that Company committed unfair labor practice for refusal to bargain. NO GAD. Collective bargaining which is defined as negotiations towards a collective agreement, is one of the democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and management

in Bradman vs. Court of Industrial Relations wherein it was further ruled that "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 2. WON the Company was denied the right to be heard and present its side when the Labor Arbiter denied the Company's motion for further postponement. DUE PROCESS WAS OBSERVED. Considering the various postponements granted in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had not even honored respondent Union with any reply to the latter's successive letters, all geared towards bringing the Company to the bargaining table. It did not even bother to furnish or serve the Union with its counter proposal despite persistent requests made therefor. Certainly, the moves and overall behavior of petitioner-company were in total derogation of the policy enshrined in the New Labor Code which is aimed towards expediting settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.

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Scout Ramon Albano Memorial College v. Noriel October 3, 1978 Fernando, Acting C.J.: FACTS: September 1997 Scout Ramon V. Albano Memorial Chapter of private respondent Federation of Free Workers (Union) filed a petition for certification election, alleging that the written consent of 67 out of 200 employees have been secured. October 21, 1977 Motion to Dismiss filed by petitioner Scout Ramon Albano Memorial College (School), alleging that the 30% requirement was not met as there were 250 employees in total. October 26, 1977 Union submitted additional signatures of 22 employees. However, the School filed an opposition. Med-Arbiter dismissed Unions petition on the ground that the latter did not satisfy the 30% requirement. Union appealed to the Bureau of Labor Relations (BLR). BLR granted the appeal and ordered the holding of a certification election within 20 days. Petitioners MR was denied. So was his appeal to the SOLE. Hence, this petition imputing GAD. ISSUE/HOLDING: 3. WON the BLR committed GAD when it ordered the holding of a petition for certification election. NO GAD. RATIO: In United Employees Union of Gelmart Industries v. Noriel, the first decision the SC made after the effectivity of the Labor Code, the Court pointed out that the constitution of collection bargaining is a prime manifestation of industrial democracy at work. As to labor, it is indispensable that they be represented by a labor organization of their choice, which makes certification election crucial. Same principle was emphasized in the subsequent case of Philippine Association of Free Labor Unions v. BLR, adding that certification election is the fairest and most effective way of determining which labor organization can truly represent the working force. It is a fundamental postulate that the will of the majority be given expression in an honest election with freedom on the part of the voters to make their choice. No better device can assure the institution of industrial democracy with the two parties to a business enterprise, management and labor, establishing a regime of self-rule. That is to accord respect to the policy of the Labor Code, indisputably partial to the holding of a certification election so as to arrive in a manner definitive and certain

concerning the choice of the labor organization to represent the workers in a collective bargaining unit. This court, in the aforesaid PAFLU case, recognized that the BLR, in the exercise of its sound discretion, may order a certification election notwithstanding the failure to meet the 30% requirement. Once that requisite is complied with, however, the Code makes it clear that "it shall be mandatory for the Bureau to conduct a certification election for the purpose of determining the representative of the employees in the appropriate bargaining unit and certify the winner as the exclusive collective bargaining representative of all the employees in the unit." Necessarily then, the argument of petitioner as to the inability of the Union to come up with the required signatures when the petition was first filed falls to the ground. At any rate, additional signatures were subsequently secured. The allegation that there was thereafter a retraction on the part of a number of such signatories lends added support to the decision arrived at by respondent BLR that the only way of determining with accuracy the true will of the personnel involved in the bargaining unit is to conduct a certification petition At any rate, that is a factual matter, the resolution of which by BLR is entitled to respect by this court. There is relevance likewise to this excerpt from Monark International, Inc. v. Noriel: "Precisely, the institution of collective bargaining is designed to assure that the other party, labor, is free to choose its representative. To resolve any doubt on the matter, a certification election, to repeat, is the most appropriate means of ascertaining its will. It is true that there may be circumstances where the interest of the employer calls for its being heard on the matter. An obvious instance is where it invokes the obstacle interposed by the contract-bar rule. This case certainly does not fall within the exception. Sound policy dictates that as much as possible, management is to maintain a strictly hands-off policy. For if it does not, it may lend itself to the legitimate suspicion that it is partial to one of the contending unions. The judiciary then should be the last to look with tolerance at such efforts of an employer to take part in the process leading to the free and untrammeled choice of the exclusive bargaining representative of the workers."

Suarez, et al. v. National Steel Corporation October 17, 2008 Leonardo-de Castro, J.: FACTS: Sometime in 1994 Respondent National Steel Corporation (Company), engaged in the business of manufacturing steel products needed for pipemaking, ship building, can-making, and production of appliances, adopted an organization streamlining program that resulted in the retrenchment of 700 employees, among whom were petitioners, in its main plant in Iligan. This was due to substantial financial losses it took due to foreign competition. At that time, Company and National Steel Labor UnionFederation of Free Workers (NASLU-FFW) were negotiating for the renewal of the CBA. July 18, 1994 Company sent individual notices to the 700 employees affected, terminating their services effective August 18, 1994. It also specified that each will receive a separation package. The employees, after being paid their separation benefits, executed and signed a release and quitclaim. October 27, 1994 Company and NASLU-FFW signed a new CBA, retroactive to July 1, 1994. Pursuant thereto, the retrenched employees were given their salary differentials, for which they executed and signed another release and quitclaim. February 1997 or about two and a half years after being separated, petitioners wrote Company demanding payment of retirement benefits under the CBA. Company rejected such claim, forcing petitioners to file a complaint for payment of retirement benefits. LA dismissed the complaint. Petitioners appealed. This appeal was consolidated with another case, which also involved retrenched employees. NLRC granted the appeal and reversed the LA. Company elevated the matter to the CA. CA reversed the NLRC and declared that petitioners were no longer entitled to retirement benefits after having received the separation pay, and were precluded from claiming such because of their quitclaims. Hence, this petition.

RATIO: Petitioners: We are entitled to retirement benefits in addition to the separation pay pursuant to Art. XIV of the existing CBA. Aquino v. NLRC, UE v. Minister of Labor, and Batanga Laguna Tayabas Bus Co. v. CA: Held that payment of separation benefits dies not exclude payment of retirement benefits in the absence of a specific prohibition in the retirement plan and the CBA. Respondent: Retirement plan expressly prohibits the payment of retirement benefits to employees terminated for cause. Moreover, petitioners executed valid quitclaims. Supreme Court: Contrary to the stance taken by petitioners, the retirement plan of the Company reveals that an employee who was terminated for cause is not entitled to retirement benefit. With the inclusion of such provision in the retirement plan, Company categorically disallows payment of retirement benefits to retrenched employees. There is no dispute that petitioners were separated from the service for cause, as it was due to a valid retrenchment undertaken by the Company. Retrenchment is recognized as one of the authorized causes for termination of employment under Art. 283 of the Labor Code. Apart from the aforementioned provision in the retirement plan, provisions of the 1994-1996 CBA between the Company and its employees further militate against petitioners contention that they are entitled to both separation pay and retirement benefits. Art. XIV, Sec. 3 of which provides that employees laid-off by the Company pursuant to a retrenchment program shall be given 2 months base pay per year of service credits. This shows the intention of the parties to exclude retrenched employees from receiving retirement benefits under the existing retirement plan. The court took the opportunity is discuss the nature and purpose of a CBA and how it should be interpreted. A CBA is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate. It covers the whole employment relationship and prescribes the rights and duties of the parties. If the terms of the CBA are clear and have no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. However, if the CBA imports ambiguity, then the parties intention as shown by their conduct, words, actions and deeds -- prior to, during, and after executing the agreement, must be ascertained. That

ISSUE/HOLDING: WON petitioners who were retrenched employees that had already received their separation pay can still recover retirement benefits. NO. THEY CAN NO LONGER RECOVER RETIREMENT BENEFITS.

there is an apparent ambiguity or a failure to express the true intention of the parties, especially with regard to the retirement provisions of the 1994-1996 CBA, is evident in the opposing interpretations of the same by the Labor Arbiter and the CA on one hand and the NLRC on the other In this instance to resolve all doubts as to the proper interpretation of the relevant CBA provisions, it was imperative for the CA to determine the true intent of the parties to the agreement. The CA committed no error in considering the affidavits as contemporaneous and subsequent acts from which the intention of the parties to the CBA can be inferred. This juristic principle is supported by the following provision of law found in Art. 1371 of the New Civil Code. Thus, while the CBA, on its face, does not contain an express prohibition of payment of retirement benefits to retrenched employees, the parties may still prove it by means of contemporaneous and subsequent acts of the parties to the agreement, such as the execution of the affidavits by the NASLU-FFW officers and respondents managers. The Court likewise upholds the CAs finding that petitioners voluntarily executed and signed a release and quitclaim after receiving their separation package, acknowledging full and final payment of all benefits that they may be entitled to in relation to their employment. The validity of quitclaims executed by laborers has long been recognized in this 23 jurisdiction. In Periquet v. National Labor Relations Commission, this Court ruled that not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement of the claims of the employee, it is binding on the parties and may not later be disowned simply because of a change of mind. Such legitimate waivers resulting from voluntary settlements of laborers claims should be treated and upheld as the law between the parties.

Lepanto Consolidated Mining Co. v. Lepanto Local Staff Union August 20, 2008 Carpio, J.: FACTS:
ARTICLE VIIINIGHT SHIFT DIFFERENTIAL Section 3. Night Differential pay.The Company shall continue to pay nightshift differential for work during the first and third shifts to all covered employees within the bargaining unit as follows: For the First Shift (11:00 p.m. to 7:00 a.m.), the differential pay will be 20% of the basic rate. For the Third Shift (3:00 p.m. to 11:00 p.m.), the differential pay will be 15% of the basic rate. However, for overtime work, which extends beyond the regular day shift (7:00 a.m. to 3:00 p.m.), there [will] be no night differential pay added before the overtime pay is calculated. ARTICLE XIIRIGHTS, PRIVILEGES AND OTHER BENEFITS Section 9. Longevity pay.The company shall grant longevity pay of P30.00 per month effective July 1, 1998 and every year thereafter.

CA affirmed VA and held that petitioners act disclosed the parties intent to include employees in the second shift in the payment of night shift differential.

ISSUE/HOLDING: WON workers are entitled to night shift differential for work performed beyond the regular day shift, from 7:00 a.m. to 3:00 p.m. YES. RATIO: The first paragraph of Section 3 provides that petitioner shall continue to pay night shift differential to workers of the first and third shifts. It does not provide that workers who performed work beyond the second shift shall not be entitled to night shift differential. The inclusion of the third paragraph is not intended to exclude the regular day shift workers from receiving night shift differential for work performed beyond 3:00 p.m. It only provides that the night shift differential pay shall be excluded in the computation of the overtime pay. The CA correctly ruled that petitioner failed to present any convincing evidence to prove that the payment was erroneous. In fact, the Court of Appeals found that even after the promulgation of the Voluntary Arbitrators decision and while the case was pending appeal, petitioner still paid night shift differential for work performed beyond 3:00 p.m. It affirms the intention of the parties to the CBA to grant night shift differential for work performed beyond 3:00 p.m. The terms and conditions of a collective bargaining contract constitute the law between the parties. If the terms of the CBA are clear and have no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. In order to ascertain the intention of the contracting parties, the Voluntary Arbitrator shall principally consider their contemporaneous and subsequent acts as well as their negotiating and contractual history and evidence of past practices.

During the effectivity of the first three CBAs, petitioner paid night shift differentials to other workers who were members of respondent for work performed beyond 3:00 p.m. Petitioner also paid night shift differential for work beyond 3:00 p.m. during the effectivity of the 4th CBA. However, petitioner alleges that the payment of night shift differential for work performed beyond 3:00 p.m. during the 4th CBA was a mistake on the part of its accounting department. Respondent Union filed a complaint with the National Conciliation and Mediation Board, alleging that petitioner failed to pay the night shift differential and longevity pay of respondents members as provided in the 4th CBA. Petitioner and respondent failed to amicably settle the dispute so they agreed to submit the issue to a voluntary arbitrator (VA). VA ruled in favor of respondent (Union) that the inclusion of paragraph 3, Section 3, Article VIII of the 4th CBA disclosed the intent of the parties to grant night shift differential benefits to employees who rendered work beyond the regular day shift. The Voluntary Arbitrator ruled that if the intention were otherwise, paragraph 3 would have been deleted.

P.I. Manufacturing Incorporated v. P.I Manufacturing Supervisors and Foreman Association February 4, 2008 Sandoval-Gutierrez, J.: FACTS: In 1987, the President signed into law Republic Act (RA) No. 6640 providing, among others, an increase in the statutory minimum wage and salary rates of employees and workers in the private sector. Thereafter, P.I. Manufacturing Incorporated (P.I), petitioner, and P.I. Manufacturing Supervisors and Foremen Association (PIMASUFA), respondents, entered into a new Collective Bargaining Agreement (1987 CBA) whereby the supervisors were granted an increase of Php 625 per month and the foremen, Php 475 per month. In 1989, PIMASUFA and the National Labor Union filed a complaint with the National Labor Relations Commission (NLRC) charging P.I. with violation of RA No. 6640, contending that the implementation of the said statute had resulted in a wage distortion. The LA rendered a Decision in favor of PIMASUFA, ordering P.I. to pay all the members of PIMASUFA (across the board) wage increases equivalent to 13.5%of their basic pay. On appeal, the NLRC rendered a Resolution affirming the LA's judgment. Thereafter, P.I. filed a petition for Certiorari with this Court, which the Court referred to the CA. The CA rendered a Decision affirming that of the NLRC's with modification by raising the 13.5% wage increase to 18.5%. A motion for reconsideration was filed by P.I. but it was denied. Hence, this petition.

supervisor, and Morales and Salvo, both foremen. They are petitioners lowest paid supervisor and foremen. As a consequence, the increased wage rates of foremen Morales and Salvo exceeded that of supervisor Buencuchillo. Also, the increased wage rate of supervisor Alcantara exceeded those of supervisors Buencuchillo and Del Prado. Consequently, the P9.79 gap or difference between the wage rate of supervisor Del Prado and that of supervisor Alcantara was eliminated. Instead, the latter gained a P.21 lead over Del Prado. Like a domino effect, these gaps or differences between and among the wage rates of all the above employees have been substantially altered and reduced. It is therefore undeniable that the increase in the wage rates by virtue of R.A. No. 6640 resulted in wage distortion or the elimination of the intentional quantitative differences in the wage rates of the above employees. However, while we find the presence of wage distortions, we are convinced that the same were cured or remedied when respondent PIMASUFA entered into the 1987 CBA with petitioner after the effectivity of R.A. No. 6640. The 1987 CBA increased the monthly salaries of the supervisors by P625.00 and the foremen, by P475.00, effective May 12, 1987. These increases re-established and broadened the gap, not only between the supervisors and the foremen, but also between them and the rank-and-file employees. Significantly, the 1987 CBA wage increases almost doubled that of the P10.00 increase under R.A. No. 6640. The P625.00/month means P24.03 increase per day for the supervisors, while the P475.00/month means P18.26 increase per day for the foremen. These increases were to be observed every year, starting May 12, 1987 until July 26, 1989. Clearly, the gap between the wage rates of the supervisors and those of the foremen was inevitably re-established. It continued to broaden through the years. Interestingly, such gap as re-established by virtue of the CBA is more than a substantial compliance with R.A. No. 6640. We hold that the CA erred in not taking into account the provisions of the CBA viz-a-viz the wage increase under the said law. It has not escaped our attention that requiring petitioner to pay all the members of respondent PIMASUFA a wage increase of 18.5%, over and above the negotiated wage increases provided under the 1987 CBA, is highly unfair and oppressive to the former. Obviously, it was not the intention of R.A. No. 6640 to grant an across-the-board increase in pay to all the employees of petitioner. Almost all of the members of respondent PIMASUFA have been receiving wage rates above P100.00 and, therefore, not entitled to the P10.00 increase. Only three (3) of them are receiving wage rates below P100.00, thus, entitled to such increase. Now, to direct petitioner to grant an across-

ISSUE/HOLDING: WON the implementation of RA No. 6640 resulted in a wage distortion and whether such distortion was cured or remedied by the 1987 CBA. YES, THERE WAS WAGE DISTORTION BUT IT WAS CURED BY THE 1987 CBA. RATIO: Wage distortion means the disappearance or virtual disappearance of pay differentials between lower and higher positions in an enterprise because of compliance with a wage order. In this case, the CA correctly ruled that a wage distortion occurred due to the implementation of R.A. No. 6640. Notably, the implementation of R.A. No. 6640 resulted in the increase of P10.00 in the wage rates of Alcantara,

the-board increase to all of them, regardless of the amount of wages they are already receiving, would be harsh and unfair to the former. In fine, it must be emphasized that in the resolution of labor cases, this Court has always been guided by the State policy enshrined in the Constitution that the rights of workers and the promotion of their welfare shall be protected. However, consistent with such policy, the Court cannot favor one party, be it labor or management, in arriving at a just solution to a controversy if the party concerned has no valid support to its claim, like respondents here.