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21. Manila Electric v.

Quisumbing
G.R. No. 127598 February 22, 2000
Facts:
Members of the Private respondent union were dissatisfied with the terms of a CBA
with petitioner. The parties in this case were ordered by the Sec. of Labor to execute a
collective bargaining agreement (CBA) wherein.The CBA allowed for the increase in the
wages of the employees concerned. The petitioner argues that if such increase were
allowed, it would pass off such to the consumers.
Issue: W/N matters of salary are part of management prerogative
RULING: Yes. There is no need to consult the Secretary of Labor in cases involving
contracting out for 6 months or more as it is part of management prerogative. However,
a line must be drawn with respect to management prerogatives on business operations
per se and those which affect the rights of the workers. Employers must see to it that
that employees are properly informed of its decisions to attain harmonious labor
relations and enlighten the worker as to their rights.
The contracting out business or services is an exercise of business judgment if it is for
the promotion of efficiency and attainment of economy. Management must be motivated
by good faith and contracting out should not be done to circumvent the law. Provided
there was no malice or that it was not done arbitrarily, the courts will not interfere with
the exercise of this judgment.
22. Rivera vs Espiritu
GR 135547
Facts:
PAL was suffering from a difficult financial situation in 1998. It was faced with
bankruptcy and was forced to adopt a rehabilitation plan and downsized its labor force
by more than 1/3. PALEA (PAL Employees Association) went on a four-day strike to
protest retrenchment measures in July 1998. PAL ceased operations on Sep 23, 1998.
PALEA board again wrote the President on Sep 28, 1998. Among others, it proposed
the suspension of the PAL-PALEA CBA for a period of ten years, subject to certain
conditions. PALEA members accepted such terms through a referendum on Oct 2,
1998. PAL resumed domestic operations on Oct 7, 1998.
Seven officers and members of PALEA filed instant petition to annul the Sep 27, 1998
agreement entered into between PAL and PALEA.
Issue: WON negotiations may be suspended for 10 years.

Held:
YES. CBA negotiations may be suspended for 10 years.
The assailed PAL-PALEA agreement was the result of voluntary collective bargaining
negotiations undertaken in the light of the severe financial situation faced by the
employer, with the peculiar and unique intention of not merely promoting industrial
peace at PAL, but preventing the latters closure.
There is no conflict between said agreement and Article 253-A of the Labor Code. CBA
under Article 253-A of the Labor Code has a two-fold purpose. One is to promote
industrial stability and predictability. Inasmuch as the agreement sought to promote
industrial peace, at the PAL during its rehabilitation, said agreement satisfied the first
purpose of said article. The other purpose is to assign specific timetable, wherein
negotiations become a matter of right and requirement. Nothing in Article 253-A
prohibits the parties from waiving or suspending the mandatory timetable and agreeing
on the remedies to enforce the same.
23. UNION OF FILIPRO EMPLOYEES vs. NLRC and NESTLE PHILIPPINES, INC.
G.R. No. 91025 : December 19, 1990.
FACTS: On June 22, 1988, the petitioner Union of the Filipro Employees, the sole and
exclusive bargaining agent of all rank-and-file employees of Nestle Philippines, (private
respondent) filed a Notice of Strike at the DOLE raising the issues of CBA deadlock and
unfair labor practice. Private respondent assailed the legal personality of the proponents
of the said notice of strike to represent the Nestle employees, before the NCMB. This
notwithstanding, the NCMB proceeded to invite the parties to attend the conciliation
meetings and to which private respondent failed to attend contending that it will deal
only with a negotiating panel duly constituted and mandated in accordance with the
UFE Constitution and By-laws. Thereafter, Company terminated from employment all
UFE Union officers, and all the members of the negotiating panel for instigating and
knowingly participating in a strike staged at the Makati, Alabang, Cabuyao and Cagayan
de Oro on September 11, 1987 without any notice of strike filed and a strike vote
obtained for the purpose. The union filed a complaint for illegal dismissal. LA upheld the
validity of the dismissal; NLRC en banc affirmed. Subsequently, company concluded
separate CBAs with the general membership of the union at Cebu/Davao and Cagayan
de Oro units; Assailing the validity of these agreements, the union filed a case of ULP
against the company with the NLRC-NCR Arbitration Branch Efforts to resolve the
dispute amicably were taken by the NCMB but yielded negative result. Petitioner filed a
motion asking the Secretary of Labor to assume jurisdiction over the dispute of
deadlock in collective bargaining between the parties. On October 28, 1988, Labor
Secretary Franklin Drilon certified to the NLRC the said dispute between the UFE and
Nestle, Philippines.. which reads as follows: xxx The NLRC is further directed to call all
the parties immediately and resolve the CBA deadlock within twenty (20) days from
submission of the case for resolution. Second Division of the NLRC promulgated a

resolution granting wage increase and other benefits to Nestles employees, ruling on
non-economic issues, as well as absolving the private respondent of the Unfair Labor
Practice charge. Petitioner finds said resolution to be inadequate and accordingly, does
not agree therewith. It filed a motion for reconsideration, denied. Hence, this petition.
ISSUE: (relative to the topic) WON WHETHER OR NOT THE SECOND DIVISION OF
THE NLRC ACTED WITHOUT JURISDICTION IN RENDERING THE ASSAILED
RESOLUTION, THE SAME BEING RENDERED ONLY BY A DIVISION OF THE
PUBLIC RESPONDENT AND NOT BY EN BANC; HELD: This case was certified on
October 28, 1988 when existing rules prescribed that, it is incumbent upon the
Commission en banc to decide or resolve a certified dispute. However, R.A. 6715 took
effect during the pendency of this case. Aside from vesting upon each division the
power to adjudicate cases filed before the Commission, said Act further provides that
the divisions of the Commission shall have exclusive appellate jurisdiction over cases
within their respective territorial jurisdiction. Section 5 of RA 6715 provides as follows:
xxxx The Commission may sit en banc or in five (5) divisions, each composed of three
(3) members. The Commission shall sit en banc only for purposes of promulgating rules
and regulations governing the hearing and disposition of cases before any of its
divisions and regional branches and formulating policies affecting its administration and
operations. The Commission shall exercise its adjudicatory and all other powers,
functions and duties through its divisions. xxxx In view of the enactment of Republic Act
6715, the aforementioned rules requiring the Commission en banc to decide or resolve
a certified dispute have accordingly been repealed. Confirmed in Administrative Order
No. 36 (Series of 1989) promulgated by the Secretary under his delegated rule-making
power. Moreover, it is to be emphasized and it is a matter of judicial notice that since the
effectivity of R.A. 6715, many cases have already been decided by the 5 divisions of the
NLRC. We find no legal justification in entertaining petitioners claim considering that the
clear intent of the amendatory provision is to expedite the disposition of labor cases filed
before the Commission. To rule otherwise would not be congruous to the proper
administration of justice. ACCORDINGLY, PREMISES CONSIDERED, the petition is
DISMISSED. The Resolutions of the NLRC, dated June 5, 1989 and August 8, 1989 are
AFFIRMED, except insofar as the ruling absolving the private respondent of unfair labor
practice which is declared.
24. FVC Labor Union-PTGWO vs SANAMA-FVC-SIGLO
G.R. No. 176249, November 27, 2009
Facts:
On December 22, 1997, the petitioner FVCLU-PTGWO the recognized bargaining
agent of the rank-and-file employees of the FVC Philippines, Incorporated signed a
five-year collective bargaining agreement with the company. The five-year CBA period
was from February 1, 1998 to January 30, 2003. At the end of the 3rd year of the fiveyear term and pursuant to the CBA, FVCLU-PTGWO and the company entered into the
renegotiation of the CBA and modified, among other provisions, the CBAs duration.
Article XXV, Section 2 of the renegotiated CBA provides that this re-negotiation

agreement shall take effect beginning February 1, 2001 and until May 31, 2003 thus
extending the original five-year period of the CBA by four (4) months. On January 21,
2003, nine (9) days before the January 30, 2003 expiration of the originally-agreed fiveyear CBA term (and four [4] months and nine [9] days away from the expiration of the
amended CBA period), the respondent Sama-Samang Nagkakaisang Manggagawa sa
FVC-Solidarity of Independent and General Labor Organizations (SANAMA-SIGLO)
filed before the Department of Labor and Employment (DOLE) a petition for certification
election for the same rank-and-file unit covered by the FVCLU-PTGWO CBA. FVCLUPTGWO moved to dismiss the petition on the ground that the certification election
petition was filed outside the freedom period or outside of the sixty (60) days before the
expiration of the CBA on May 31, 2003.
Issue:
Was the certification election filed within the freedom period?
Ruling:
Yes. While the parties may agree to extend the CBAs original five-year term together
with all other CBA provisions, any such amendment or term in excess of five years will
not carry with it a change in the unions exclusive collective bargaining status. By
express provision of Article 253-A, the exclusive bargaining status cannot go beyond
five years and the representation status is a legal matter not for the workplace parties to
agree upon. In other words, despite an agreement for a CBA with a life of more than five
years, either as an original provision or by amendment, the bargaining unions exclusive
bargaining status is effective only for five years and can be challenged within sixty (60)
days prior to the expiration of the CBAs first five years.
In the present case, the CBA was originally signed for a period of five years, i.e., from
February 1, 1998 to January 30, 2003, with a provision for the renegotiation of the
CBAs other provisions at the end of the 3rd year of the five-year CBA term. Thus, prior
to January 30, 2001 the workplace parties sat down for renegotiation but instead of
confining themselves to the economic and non-economic CBA provisions, also
extended the life of the CBA for another four months, i.e., from the original expiry date
on January 30, 2003 to May 30, 2003.
This negotiated extension of the CBA term has no legal effect on the FVCLUPTGWOs exclusive bargaining representation status which remained effective only for
five years ending on the original expiry date of January 30, 2003. Thus, sixty days prior
to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a
petition for certification election. Its petition, filed on January 21, 2003 or nine (9) days
before the expiration of the CBA and of FVCLU-PTGWOs exclusive bargaining status,
was seasonably filed.
25. PICOP Resources Inc vs Taneca

GR 160828
Facts:
Respondents were regular rank-and-file employees of PRI and bona fide members of
Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRISPFL), which is the collective bargaining agent for the rank-and-file employees of
petitioner PRI. PRI has a CBA with NAMAPRI-SPFL. The CBA contained the following
union security provisions:

Article II- Union Security and Check-Off

Section 6. Maintenance of membership.

6.1 All employees within the appropriate bargaining unit who are members of the
UNION at the time of the signing of this AGREEMENT shall, as a condition of continued
employment by the COMPANY, maintain their membership in the UNION in good
standing during the effectivity of this AGREEMENT.

6.3 The COMPANY, upon the written request of the UNION and after compliance with
the requirements of the New Labor Code, shall give notice of termination of services of
any employee who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of this
Article

Atty. Fuentes sent a letter to the management of PRI demanding the termination of
employees who allegedly campaigned for, supported and signed the Petition for
Certification Election of the Federation of Free Workers Union (FFW) during the
effectivity of the CBA. NAMAPRI-SPFL considered said act of campaigning for and
signing the petition for certification election of FFW as an act of disloyalty and a valid
basis for termination for a cause in accordance with its Constitution and By-Laws, and
the terms and conditions of the CBA, specifically Article II, Sections 6.1 and 6.2 on
Union Security Clause.

On October 16, 2000, PRI served notices of termination for causes to employees whom
NAMAPRIL-SPFL sought to be terminated on the ground of acts of disloyalty
committed against it when respondents allegedly supported and signed the Petition for
Certification Election of FFW before the freedom period during the effectivity of the
CBA. A Notice dated October 21, 2000 was also served on the DOLE, Caraga Region.

Respondents then accused PRI of ULP.

Issue:
WON respondents were validly terminated.

Held:

Union security is a generic term, which is applied to and comprehends closed shop,
union shop, maintenance of membership, or any other form of agreement which
imposes upon employees the obligation to acquire or retain union membership as a
condition affecting employment. There is union shop when all new regular employees
are required to join the union within a certain period as a condition for their continued
employment. There is maintenance of membership shop when employees, who are
union members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued employment
until they are promoted or transferred out of the bargaining unit, or the agreement is
terminated. A closed shop may be defined as an enterprise in which, by agreement
between the employer and his employees or their representatives, no person may be
employed in any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good standing
of a union entirely comprised of or of which the employees in interest are a part.

However, in terminating the employment of an employee by enforcing the union security


clause, the employer needs to determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient evidence to support the decision of the
union to expel the employee from the union. These requisites constitute just cause for
terminating an employee based on the union security provision of the CBA.

As to the first requisite, there is no question that the CBA between PRI and respondents
included a union security clause. Secondly, it is likewise undisputed that NAMAPRISPFL, in two (2) occasions demanded from PRI, in their letters dated May 16 and 23,
2000, to terminate the employment of respondents due to their acts of disloyalty to the
Union. However, as to the third requisite, we find that there is no sufficient evidence to
support the decision of PRI to terminate the employment of the respondents.

The mere signing of the authorization in support of the Petition for Certification Election
of FFW on March 19, 20 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.
Petition denied.
26. G.R. No. 183122 : June 15, 2011
GENERAL MILLING CORPORATION-INDEPENDENT LABOR UNION (GMC-ILU),
Petitioner, v. GENERAL MILLING CORPORATION, Respondent.
G.R. No. 183889 : June 15, 2011
GENERAL MILLING CORPORATION, Petitioner, v. GENERAL MILLING
CORPORATION-INDEPENDENT LABOR UNION (GMC-ILU), ET.AL, Respondents.
PEREZ,J.:
FACTS:
On April 28, 1989, GMC and theUnionentered into a CBA which provided, among other
terms, the latters representation of the collective bargaining unit for a three-year term
made to retroact to 1 December 1988.On 29 November 1991 or one day before the
expiration of the subject CBA, the Union sent a draft CBA proposal to GMC, with a
request for counter-proposals from the latter, for the purpose of renegotiating the
existing CBA between the parties.In view of GMCs failure to comply with said request,
theUnioncommenced the complaint for unfair labor practice which was dismissed for
lack of merit. On appeal, however, said dismissal was reversed and set aside in the 30
January 1998 decision rendered by the Fourth Division of the NLRC in NLRC Case No.
V-0112-94. The Supreme Court found GMC guilty of unfair labor practice.

Thus, the Union filed a motion for issuance of a writ of execution to enforce the claims
of the covered employees which it computed in the sum ofP433,786,786.36. However,
GMC opposed said motion on the ground, among other matters, that the bargaining unit
no longer exist in view of the resignation, retrenchment, retirement and separation from
service of workers who have additionally executed waivers and quitclaims
acknowledging full settlement of their claims; that the covered employees have already
received salary increases and benefits for the period 1991 to 1993; and, that aside from
the aforesaid supervening events which precluded the enforcement thereof, the
decision rendered in the case simply called for the execution of a CBA incorporating the
Unions proposal, not the outright computation of benefits thereunder.
27 October 2005 , the LA rendered a decision limiting the computation of the benefits of
theUnions CBA proposal to the remaining two years of the duration of the original CBA
or from 1 December 1991 up to 30 November 1993.
On appeal, the NLRC affirmed the decision of the LA, finding, among other matters, that
the duty to maintain thestatus quoand to continue in full force and effect the terms of the
existing agreement under Article 253 of theLabor Code of the Philippinesapplies only
when the parties agreed to the terms and conditions of the CBA, the NLRC upheld the
Executive Labor Arbiters computation on the ground, among others, that the decision
sought to be enforced covered only the remaining two years of the duration of the
original CBA.
On their petitions before the CA, Unions petition (CA-G.R. CEB-SP No. 02226) was
partially granted on October 10, 2007, upon the finding that the parties old CBA was
superseded by the imposed CBA which provided a term of five years from 1 December
1991 and remained in force until a new CBA is concluded between the parties. The CA,
however, faulted the Union for its hasty and premature filing of its motion for issuance of
a writ of execution, instead of first demanding the enforcement of the imposed CBA from
GMC and, failing the same, referring the matter to the grievance machinery or voluntary
arbitration provided under the imposed CBA, in accordance with Articles 260 and 261 of
theLabor Code.
On the other hand, GMCs petition (CA-G.R. SP No. CEB-SP No. 02232) was dismissed
for lack of merit on November 16, 2007, finding that both parties were given an
opportunity to present their respective positions during the pre-execution conference
conducteda quo, the CA ruled that the LAs 27 October 2005 order had attained finality
insofar as GMC is concerned, in view of its failure to perfect an appeal therefrom by
paying the required appeal fee and posting the cash or surety bond in an amount
equivalent to the benefits computed. The CA likewise held that quitclaims did not extend
to the benefits provided under the imposed CBA and that the additional benefits
supposedly received by GMCs employees should not be deducted therefrom, for lack of
sufficient evidence to prove the same.
Hence, this petition.
ISSUE:

Whether or not the imposed CBA which provided a term of five years from 1 December
1991 remains in force until a new CBA is concluded between the parties?
HELD:
CA-G.R. CEB-SP Nos. 02226 and 02232 are reversed and set aside.
LABOR LAW
Article XIV of the imposed CBA provides that (t)his Agreement shall be in full force and
effect for a period of five (5) years from 1 December 1991, provided that sixty (60) days
prior to the lapse of the third year of effectivity hereof, the parties shall open
negotiations on economic aspect for the fourth and fifth years effectivity of this
Agreement. Considering that no new CBA had been, in the meantime, agreed upon by
GMC and the Union, we find that the CAs Special Twentieth Division correctly ruled in
CA-G.R. CEB-SP No. 02226 that, pursuant to Article 253 of theLabor Code, the
provisions of the imposed CBA continues to have full force and effect until a new CBA
has been entered into by the parties.Article 253 mandates the parties to keep thestatus
quoand to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period prior to the expiration of the old CBA and/or until a
new agreement is reached by the parties. In the same manner that it does not provide
for any exception nor qualification on which economic provisions of the existing
agreement are to retain its force and effect,the law does not distinguish between a CBA
duly agreed upon by the parties and an imposed CBA like the one under consideration.
Considering that the 30 January 1998 decision sought to be enforced confined the
application of the imposed CBA to the remaining two-year duration of the original CBA,
we find that the computation of the benefits due GMCs covered employees was
correctly limited to the period 1 December 1991 to 30 November 1993 in the 27 October
2005 order issued by Executive Labor Arbiter Violeta Ortiz-Bantug and the 20 July 2006
decision rendered by the NLRC in NLRC Case No. V-000632-2005.
Consequently, insofar as the execution of the 30 January 1998 decision is concerned,
theUnionis out on a limb in espousing a computation which extends the benefits of the
imposed CBA beyond the remaining two-year duration of the original CBA.The rule is,
after all, settled that an order of execution which varies the tenor of the judgment or
exceeds the terms thereof is a nullity. Since execution not in harmony with the judgment
is bereft of validity,it must conform, more particularly, to that ordained or decreed in the
dispositive portion of the decision sought to be enforced.Considering that the decision
sought to be enforced pertains to the period 1December 1991 to 30 November 1993, it
necessarily follows that the computation of benefits under the imposed CBA should be
limited to covered employees who were in GMCs employ during said period of
time.While it is true that the provisions of the imposed CBA extend beyond said
remaining two-year duration of the original CBA in view of the parties admitted failure to
conclude a new CBA, the corresponding computation of the benefits accruing in favor of
GMCs covered employees after the term of the original CBA was correctly excluded in

the aforesaid 27 October 2005 order issued in RAB VII-06-0475-1992.Rather than the
abbreviated pre-execution proceedings before Executive Labor ArbiterVioleta OrtizBantug, the computation of the same benefits beyond 30 November 1993 should,
instead, be threshed out by GMC and theUnionin accordance with theGrievance
Procedure.
Article II of the imposed CBA, relatedly, provides that (t)he employees covered by this
Agreement are those employed as regular monthly paid employees at the [GMC] offices
in Cebu City and Lapulapu City, including cadet engineers, salesmen, veterinarians,
field and laboratory workers, with the exception of managerial employees, supervisory
employees, executive and confidential secretaries, probationary employees and the
employees covered by a separate Collective Bargaining Agreement at the Companys
Mill in Lapulapu City. Gauged from the express language of the foregoing provision, we
find that Executive Labor ArbiterVioleta Ortiz-Bantug correctly excluded the following
employees fromthe list of 436 employees submitted by the Union andthe computation of
the benefitsfor the period 1December 1991 to 30 November 1993, to wit: (a) 77
employees who were hired or regularized after 30 November 1993; (b)36 daily paid rank
and file employees who were covered by a separate CBA; (c) 41
managerial/supervisory employees; and, (d) 1 employee for whom no salary-rate
information was submitted in the premises. However, we find that the 234 employees
who had already been separated from GMCs employ by the time of the rendition of the
11 February 2004 decision in G.R. No. 146728 should further be added to these
excluded employees.
The record shows that said 234 employees were union members whose employment
with GMC ceased as a consequence of death, termination due to redundancy,
termination due to closure of plant, termination for cause, voluntary resignation,
separation or dismissal from service as well as retirement. Upon compliance with GMCs
clearance requirements and in consideration of sums ranging fromP38,980.12
toP631,898.72, due payment and receipt of which were duly acknowledged, it appears
that said employees executed deeds of waiver, release and quitclaim.
27. ELISCO-ELIROL LABOR UNION (NAFLU) and its OFFICERS AND MEMBERS OF
THE BOARD OF DIRECTORS vs. CARMELO NORIEL, in his capacity as Director of
the Bureau of Labor Relations, ELIZALDE STEELCONSOLIDATED, INC. and
NATIONAL FEDERATION OFLABOR UNIONS (NAFLU)
No. L-41955. December 29, 1977
FACTS: Petitioner ELISCO-NAFLU negotiated and executed a collective bargaining
agreement with respondent-Elizalde Steel Consolidated, Inc.However, petitionerwas not
then registered and therefore not entitled to the benefits and privileges embodied in said
collective bargaining agreement.A resolution was passed, and as such, petitioner union
applied for registration with the Bureau of Labor Relations. By the issuance of the
certificate of registration, petitioner-appellant acquired a personality separate and
distinct from any other labor union. Petitioner enforce the collective bargaining
agreement as the principal party to the same representing the workers covered by such
agreement immediately after the issuance of the certificate of registration.

At a special meeting, the general membership of petitioner union decided that their
mother union, the National Federation of Labor Unions, can no longer safeguard the
rights of its members insofar as working conditions and other terms of employment are
concerned and that the interest and welfare of petitioner can be served best if it will stay
independent and disaffiliated from said mother union, hence, the general membership
adopted a resolution to disaffiliate from the National Federation of Labor Unions.
Respondent without any justifiable reason refused and continues to refuse to recognize
petitioner as the sole and exclusive bargaining representative of its employees, and,
now actually dismissed the petitioner unions officers and board members.
A complaint for unfair labor practice was filed by petitioners against respondents for the
latters refusal to bargain collectively with petitioner. A petition was filed before the BLR,
DOLE against respondents and be ordered to stop from presenting itself as the
collective bargaining agent and pursuant thereto, a writ of preliminary mandatory and
prohibitory injunction be issued.
BLR,through Med-Arbiter dismissed the petition for lack of merit. On appeal ,respondent
Director of the BLR affirmed the dismissal of petition. In its resolution,the director ruled
that when the employees disaffiliated from the mother union and formed themselves
into a new union, their status as employees was also terminated. As such they could not
therefore absolutely and legally claim that they still comprise the majority of the
bargaining unit. And to vest, upon the new union the authority to bargain is in violation of
the whole CBA, under the theory that when the mother union (NAFLU) entered and
executed the same in its separate and distinct personality aside from the people
composing the same. In fine, the CBA then was executed by and between the company
and the (NAFLU) with the latter as an entity having its own capacity and personality
different from the members composing the same.
ISSUE:WON the respondent director erred in ruling that the petition is unmeritorious
HELD: YES. The Court sets aside respondent directors appealed resolution and rules
in accordance with the prevailing law and settled jurisprudence that the petitioner union
consisting of the members employees of respondent corporation is the principal party to
the collective bargaining agreement (rather than the respondent mother union which is
merely its agent) and is therefore entitled to be recognized as the sole and exclusive
bargaining representative entitled to administer and enforce the collective bargaining
agreement with the employer corporation.
Disaffiliation of employees from their mother union and their formation into a new union
do not terminate their status as employees of the corporation, as the employees and
members of the local union did not form a new union but merely exercised their right to
register their local union; A local union when circumstances so warranted, is free to
disaffiliate from its mother union
Respondent director correctly perceived in his Resolution that to grant to the former
mother union (NAFLU) the authority to administer and enforce their collective bargaining
agreement without presumably any members in the bargaining unit is quite absurd but
fell unto the grave error of holding that when the employees disaffiliated from the
mother union and formed themselves into a new union, their status as employees was
also terminated. His error was in not perceiving that the employees and members of
the local union did not form a new union but merely registered the local union as was
their right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of employees and

members of the local union was the principal party to the agreement. NAFLU as the
mother union in participating in the execution of the bargaining agreement with
respondent company acted merely as agent of the local union, which remained the
basic unit of the association existing principally and freely to serve the common interest
of all its members, including the freedom to disaffiliate when the circumstances so
warranted as in the present case.
Corollarily, the substitutionary doctrine likewise fully supports petitioners stand.
Petitioner union to whom the employees owe their allegiance has from the beginning
expressly avowed that it does not intend to change and/or amend the provisions of the
present collective bargaining agreement but only to be given the chance to enforce the
same since there is a shift of allegiance in the majority of the employees at respondent
company
ACCORDINGLY, the petition is granted and the appealed resolution is set aside and
petitioner localunion is declared to be the sole and exclusive bargaining representative
of the employees of respondent corporation entitled to administer and enforce any
subsisting collective bargaining agreement with said employer corporation. This
decision shall be immediately executory upon its promulgation.