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LABOR

RELATIONS: Azucena Vol. II


BOOK FIVE except as otherwise provided under this Code. (As
LABOR RELATIONS amended by Section 3, Republic Act No. 6715,
March 21, 1989)
Title I ________
POLICY AND DEFINITIONS
1. OVERVIEW AND VIEWPOINT
Chapter I
POLICY “Labor Standards” refers to the minimum terms and
conditions of employment which employees are
Art. 211. Declaration of Policy. legally entitled to and employers must comply with.
A. It is the policy of the State:
a. To promote and emphasize the primacy “Labor Relations” refers to the interactions
of free collective bargaining and between employer and employees or their
negotiations, including voluntary representatives and the mechanism by which the
arbitration, mediation and conciliation, as standards and other terms and conditions of
modes of settling labor or industrial employment are negotiated, adjusted and enforced.
disputes;
The government labor relations policy is declared in
b. To promote free trade unionism as an Art. 211 which is a focused elaboration of the basic
instrument for the enhancement of labor policy announced in Art.3 which, in turn,
democracy and the promotion of social echoes the constitutional mandates. The policy
justice and development; intends to attain social justice through industrial
peace and progress. The latter is founded on
c. To foster the free and voluntary employee participation and collective interactions
organization of a strong and united labor between employer and employees. In Management
movement; parlance, the input is the parties’ rights and duties,
the process is worker’s organization and collective
d. To promote the enlightenment of bargaining, and the output is industrial peace and
workers concerning their rights and progress towards social justice as the end goal.
obligations as union members and as
employees; Work stoppage—known as “strike” by employees or
“lockout” by the employer—is not favoured in law.
e. To provide an adequate administrative It is recognized as a legal right but regulated as to
machinery for the expeditious settlement of the purpose and manner of doing it. Deviation from
labor or industrial disputes; the mandatory requirements has adverse
consequences to the violators. Work stoppage,
f. To ensure a stable but dynamic and just because it is counter-productive, is and has to be
industrial peace; and considered a measure of last resort.

g. To ensure the participation of workers in The principle behind labor unionism in private
decision and policy-making processes industry is that industrial peace cannot be secured
affecting their rights, duties and welfare. through compulsion by law. Relations between
private employers and their employees rest on an
B. To encourage a truly democratic method of essentially voluntary basis. Subject to the minimum
regulating the relations between the employers and requirements of wage laws and other labor and
employees by means of agreements freely entered welfare legislation, the terms and conditions of
into through collective bargaining, no court or employment in the unionized private sector are
administrative agency or official shall have the settled through the process of collective bargaining.
power to set or fix wages, rates of pay, hours of
work or other terms and conditions of employment,



LABOR RELATIONS: Azucena Vol. II
Because labor relations are primarily “domestic,” (2) Employees wished to substitute what we should
third parties, even the Government, shy away from term “the rule of law” for the arbitrary and often
meddling, as much as it can be helped. This is why capricious exercise of power by the boss.
an in-house problem solving structure, called
grievance machinery, is a requirement in CBAs. If (3) Finally, unions helped to give employees a sense
this machinery fails, the parties themselves are free of participation in the business enterprises of which
to select any third party, called voluntary arbitrator, they are part—a function of labor unions which
to resolve their differences. became important as organizations spread into
mass production industries.
The laws, as a force that balances the parties’ rights
and obligations, are admittedly necessary in the The union is the recognized instrumentality and
industrial setting.1 mouthpiece of the laborers.

2. WORKERS’ ORGANIZATION 4. ILO CONVENTION NO. 87
________
A labor or trade union is a combination of workmen
organized for the ultimate purpose of securing Chapter II
through united action the most favourable DEFINITIONS
conditions as regards wages, hours of labor,
conditions of employment, etc., for its members. Art. 212. Definitions.
a. "Commission" means the National Labor
In the popular sense a labor union is understood to Relations Commission or any of its divisions, as the
be a completely organized body of dues-paying case may be, as provided under this Code.
members, operating through elected officers and
constituting a militant, vital and functioning organ. b. "Bureau" means the Bureau of Labor Relations
It may be said that while every labor union is a labor and/or the Labor Relations Divisions in the regional
organization, not every labor organization is a labor offices established under Presidential Decree No. 1,
union. The difference is one of organization, in the Department of Labor.
composition and operation.
c. "Board" means the National Conciliation and
3. WHY WORKERS ORGANIZE Mediation Board established under Executive Order
No. 126.
Self-help through economic action necessarily
requires increasing the bargaining power of d. "Council" means the Tripartite Voluntary
employees; hence one of the basic purposes of a Arbitration Advisory Council established under
labor union is to eliminate competition among Executive Order No. 126, as amended.
employees in the labor market.
e. "Employer" includes any person acting in the
Three other human desires should be noted among interest of an employer, directly or indirectly. The
the forces that led workers to organize: term shall not include any labor organization or any
of its officers or agents except when acting as
(1) One is the desire for job security. employer.

f. "Employee" includes any person in the employ of
an employer. The term shall not be limited to the

1
Art. 1700. The relations between capital and labor are not merely employees of a particular employer, unless the
contractual. They are so impressed with public interest that labor Code so explicitly states. It shall include any
contracts must yield to the common good. individual whose work has ceased as a result of or in

Art. 19. Every person must, in the exercise of his rights and in the connection with any current labor dispute or
performance of his duties, act with justice, give everyone his due, and because of any unfair labor practice if he has not
observe honesty and good faith.


LABOR RELATIONS: Azucena Vol. II
obtained any other substantially equivalent and named or designated in the Collective Bargaining
regular employment. Agreement by the parties to act as their Voluntary
Arbitrator, or one chosen with or without the
g. "Labor organization" means any union or assistance of the National Conciliation and
association of employees which exists in whole or in Mediation Board, pursuant to a selection procedure
part for the purpose of collective bargaining or of agreed upon in the Collective Bargaining
dealing with employers concerning terms and Agreement, or any official that may be authorized
conditions of employment. by the Secretary of Labor and Employment to act as
Voluntary Arbitrator upon the written request and
h. "Legitimate labor organization" means any labor agreement of the parties to a labor dispute.
organization duly registered with the Department of
Labor and Employment, and includes any branch or o. "Strike" means any temporary stoppage of work
local thereof. by the concerted action of employees as a result of
an industrial or labor dispute.
i. "Company union" means any labor organization
whose formation, function or administration has p. "Lockout" means any temporary refusal of an
been assisted by any act defined as unfair labor employer to furnish work as a result of an industrial
practice by this Code. or labor dispute.

j. "Bargaining representative" means a legitimate q. "Internal union dispute" includes all disputes or
labor organization whether or not employed by the grievances arising from any violation of or
employer. disagreement over any provision of the constitution
and by-laws of a union, including any violation of
k. "Unfair labor practice" means any unfair labor the rights and conditions of union membership
practice as expressly defined by the Code. provided for in this Code.

l. "Labor dispute" includes any controversy or r. "Strike-breaker" means any person who
matter concerning terms and conditions of obstructs, impedes, or interferes with by force,
employment or the association or representation of violence, coercion, threats, or intimidation any
persons in negotiating, fixing, maintaining, changing peaceful picketing affecting wages, hours or
or arranging the terms and conditions of conditions of work or in the exercise of the right of
employment, regardless of whether the disputants self-organization or collective bargaining.
stand in the proximate relation of employer and
employee. s. "Strike area" means the establishment,
warehouses, depots, plants or offices, including the
m. "Managerial employee" is one who is vested sites or premises used as runaway shops, of the
with the powers or prerogatives to lay down and employer struck against, as well as the immediate
execute management policies and/or to hire, vicinity actually used by picketing strikers in moving
transfer, suspend, lay-off, recall, discharge, assign to and fro before all points of entrance to and exit
or discipline employees. Supervisory employees are from said establishment. (As amended by Section 4,
those who, in the interest of the employer, Republic Act No. 6715, March 21, 1989)
effectively recommend such managerial actions if ________
the exercise of such authority is not merely
routinary or clerical in nature but requires the use 1. EMPLOYER-EMPLOYEE RELATIONSHIP ESSENTIAL
of independent judgment. All employees not falling
within any of the above definitions are considered The existence of employer-employee relationship,
rank-and-file employees for purposes of this Book. as explained in Book III, is determined by the
presence of the following elements, namely:
n. "Voluntary Arbitrator" means any person
accredited by the Board as such or any person (a) selection and engagement of the employee;



LABOR RELATIONS: Azucena Vol. II
nature of a “labor dispute” does not require that
(b) payment of wages; the disputants should stand in the proximate
relation of employer and employee, with
(c) power to dismiss; and consequent protection of concerted activities
carried out by many persons belonging to several
(d) power to control the employee’s conduct. employers.

The fourth is the most important element. 2.1 “One whose work has ceased...”

2. WHO ARE EMPLOYEES Cessation of work due to strike or lockout, or to
dismissal or suspensions constituting unfair labor
The term “employee”: practices, does not in itself affect the “employee”
status, in the sense that the rights and benefits of
(1) shall include any employee the employee are protected as though there had
been no interruption of service, effective upon
(2) and shall not be limited to the employee of any actual return to work.
particular employer, unless the Act so explicitly
states otherwise 3. LABOR ORGANIZATION AS EMPLOYER

(3) and shall include any individual Exceptionally, a labor organization may be deemed
an “employer” when it is acting as such in relation
(a) whose work has ceased as a result of, or to persons rendering services under hire,
in connection with any current labor particularly in connection with its activities for
dispute profit or gain.

(b) and who has not obtained any other 4. LABOR DISPUTE
substantially equivalent and regular
employment. The test of whether a labor controversy comes
within the definition of a labor dispute depends on
“Employee” refers to any person working for an whether it involves or concerns terms, conditions of
employer. It includes one whose work has ceased in employment or representation.
connection with any current labor dispute or
because of any unfair labor practice and one who The existence of a labor dispute is not negative by
has been dismissed from work but the legality of the fact that the plaintiffs and defendants do not
the dismissal is being contested in a forum of stand in the proximate relation of employer and
appropriate jurisdiction. employee.

“Employer” refers to any person or entity who 5. LABOR DISPUTES AND REMEDIES: A SUMMARY
employs the services of others, one for whom
employees work and who pays their wages or 5.1 Definition
salaries. An employer includes any person directly
or indirectly acting in the interest of an employer. It “Labor Dispute” includes any controversy or matter
shall also refer to the enterprise where a labor concerning terms and conditions of employment or
organization operates or seeks to operate. the association or representation of persons in
negotiating, fixing, maintaining, changing or
An employer may be brought into bargaining and arranging the terms and conditions of employment,
economic relationship with persons not in his actual regardless of whether the disputants stand in the
employ; such persons are given the status and proximate relation of employer and employee.
tights of “employees” in relation to him, in order to
accord to them the protection of the Act. Thus, The 5.2 Tests or Criteria of “Labor Dispute”



LABOR RELATIONS: Azucena Vol. II
Department of Labor and Employment for program
A. Nature: Dispute arises from employer-employee and policy coordination only, composed of a
relationship, although disputants need not be Chairman and fourteen (14) Members.
proximately “employee” or “employer” of the
other. Five (5) members each shall be chosen from among
the nominees of the workers and employers
B. Subject matter: Dispute concerns (1) terms or organizations, respectively. The Chairman and the
conditions of employment; or (2) association or four (4) remaining members shall come from the
representation of persons in negotiating, fixing, public sector, with the latter to be chosen from
maintaining, or changing terms or conditions of among the recommendees of the Secretary of Labor
employment. and Employment.

5.3 Kinds of Labor Disputes Upon assumption into office, the members
nominated by the workers and employers
A. Labor Standards Disputes: organizations shall divest themselves of any
affiliation with or interest in the federation or
(1) Compensation – (underpayment of minimum association to which they belong.
wage)
The Commission may sit en banc or in five (5)
(2) Benefits – (nonpayment of holiday pay) divisions, each composed of three (3) members.
Subject to the penultimate sentence of this
(3) Working conditions – (unrectified work hazards) paragraph, the Commission shall sit en banc only for
purposes of promulgating rules and regulations
B. Labor Relations Disputes: governing the hearing and disposition of cases
before any of its divisions and regional branches,
(1) Organizational Right Dispute/ ULP – (coercion) and formulating policies affecting its administration
and operations. The Commission shall exercise its
(2) Representation Disputes – (determination of adjudicatory and all other powers, functions, and
appropriate collective bargaining unit) duties through its divisions. Of the five (5) divisions,
the first, second and third divisions shall handle
(3) Bargaining Disputes – (refusal to bargain) cases coming from the National Capital Region and
the parts of Luzon; and the fourth and fifth
(4) Contract Administration or Personnel Policy divisions, cases from the Visayas and Mindanao,
Disputes – (noncompliance with CBA provision) respectively; Provided that the Commission sitting
en banc may, on temporary or emergency basis,
(5) Employment Tenure Disputes – allow cases within the jurisdiction of any division to
(nonregularization of employees) be heard and decided by any other division whose
docket allows the additional workload and such
5.4 Remedies in Labor Disputes (SEE TABLE 1) transfer will not expose litigants to unnecessary
________ additional expense. The divisions of the Commission
shall have exclusive appellate jurisdiction over cases
Title II within their respective territorial jurisdictions. [As
NATIONAL LABOR RELATIONS COMMISSION amended by Republic Act No. 7700].

Chapter I The concurrence of two (2) Commissioners of a
CREATION AND COMPOSITION division shall be necessary for the pronouncement
of judgment or resolution. Whenever the required
Art. 213. National Labor Relations Commission. membership in a division is not complete and the
There shall be a National Labor Relations concurrence of two (2) commissioners to arrive at a
Commission which shall be attached to the judgment or resolution cannot be obtained, the



LABOR RELATIONS: Azucena Vol. II
Chairman shall designate such number of additional necessary for the effective and efficient operation
Commissioners from the other divisions as may be of the Commission. Each regional branch shall be
necessary. headed by an Executive Labor Arbiter. (As amended
by Section 6, Republic Act No. 6715, March 21,
The conclusions of a division on any case submitted 1989)
to it for decision shall be reached in consultation ________
before the case is assigned to a member for the
writing of the opinion. It shall be mandatory for the 1. NLRC: NATURE AND ORGANIZATION
division to meet for purposes of the consultation
ordained herein. A certification to this effect signed 1.1 Creation and Autonomy
by the Presiding Commissioner of the division shall
be issued and a copy thereof attached to the record Before the advent of the Labor Code the labor court
of the case and served upon the parties. was the Court of Industrial Relations. When martial
law was declared in September 1972, PD No. 21
The Chairman shall be the Presiding Commissioner (October 14, 1972) abolished the CIR and replaced it
of the first division and the four (4) other members with an ad hoc National Labor Relations
from the public sector shall be the Presiding Commission. This NLRC was short-lived as it gave
Commissioners of the second, third, fourth and fifth way to the NLRC which the Labor Code created in
divisions, respectively. In case of the effective 1974.
absence or incapacity of the Chairman, the
Presiding Commissioner of the second division shall 1.2 Administrative Supervision Delegated to the
be the Acting Chairman. DOLE Secretary

The Chairman, aided by the Executive Clerk of the Executive Order No. 204 delegated to the Secretary
Commission, shall have administrative supervision of Labor “administrative supervision over the NLRC,
over the Commission and its regional branches and its regional branches and all its personnel.” The
all its personnel, including the Executive Labor Order cited two objectives: (1) to further improve
Arbiters and Labor Arbiters. the rate of disposition of cases and (2) to enhance
existing measures for the prevention of graft and
The Commission, when sitting en banc shall be corruption in the NLRC.
assisted by the same Executive Clerk and, when
acting thru its Divisions, by said Executive Clerks for 1.3 Essential Character
the second, third, fourth and fifth Divisions,
respectively, in the performance of such similar or Under Republic Act No. 6715 in 1989, as under the
equivalent functions and duties as are discharged former law, the National Labor Relations
by the Clerk of Court and Deputy Clerks of Court of Commission continues to act collegially, whether it
the Court of Appeals. (As amended by Section 5, performs administrative or rule-making functions or
Republic Act No. 6715, March 21, 1989) exercises appellate jurisdiction to review decisions
________ and final orders of the Labor Arbiters.

Art. 214. Headquarters, Branches and Provincial 1.4 Tripartite Composition
Extension Units. The Commission and its First,
Second and Third divisions shall have their main The same Article 213, as amended, provides that
offices in Metropolitan Manila, and the Fourth and the Chairman and twenty-three members
Fifth divisions in the Cities of Cebu and Cagayan de composing the National Labor Relations
Oro, respectively. The Commission shall establish as Commission shall be chosen from the workers,
many regional branches as there are regional offices employers and the public sectors.
of the Department of Labor and Employment, sub-
regional branches or provincial extension units. 1.5 Allocation of Powers Between NLRC En Banc and
There shall be as many Labor Arbiters as may be Its Division



LABOR RELATIONS: Azucena Vol. II
appointed by the President, upon recommendation
The “division: is a legal entity, not the persons who of the Secretary of Labor and Employment and shall
sit in it. Hence, an individual commissioner has no be subject to the Civil Service Law, rules and
adjudicatory power, although, of course, he can regulations.
concur or dissent in deciding a case. The law lodges
the adjudicatory power on each of the eight The Secretary of Labor and Employment shall, in
divisions, not on the individual commissioners not consultation with the Chairman of the Commission,
on the whole commission. appoint the staff and employees of the Commission
and its regional branches as the needs of the service
1.6 The NLRC Rules of Procedure may require, subject to the Civil Service Law, rules
and regulations, and upgrade their current salaries,
“The 2005 Revised Rules of Procedure of the benefits and other emoluments in accordance with
National Labor Relations Commission” was law. (As amended by Section 7, Republic Act No.
published in newspapers on December 23, 2005 6715, March 21, 1989)
and took effect on January 7, 2006. ________
________
REQUIRING CONFIRMATION BY COMMISSION ON
Art. 215. Appointment and Qualifications. The APPOINTMENTS, UNCONSTITUTIONAL
Chairman and other Commissioners shall be ________
members of the Philippine Bar and must have
engaged in the practice of law in the Philippines for Art. 216. Salaries, benefits and other emoluments.
at least fifteen (15) years, with at least five (5) years The Chairman and members of the Commission
experience or exposure in the field of labor- shall receive an annual salary at least equivalent to,
management relations, and shall preferably be and be entitled to the same allowances and benefits
residents of the region where they are to hold as those of the Presiding Justice and Associate
office. The Executive Labor Arbiters and Labor Justices of the Court of Appeals, respectively. The
Arbiters shall likewise be members of the Philippine Executive Labor Arbiters shall receive an annual
Bar and must have been engaged in the practice of salary at least equivalent to that of an Assistant
law in the Philippines for at least seven (7) years, Regional Director of the Department of Labor and
with at least three (3) years experience or exposure Employment and shall be entitled to the same
in the field of labor-management relations: allowances and benefits as that of a Regional
Provided, However, that incumbent Executive Labor Director of said Department. The Labor Arbiters
Arbiters and Labor Arbiters who have been engaged shall receive an annual salary at least equivalent to,
in the practice of law for at least five (5) years may and be entitled to the same allowances and benefits
be considered as already qualified for purposes of as that of an Assistant Regional Director of the
reappointment as such under this Act. The Department of Labor and Employment. In no case,
Chairman and the other Commissioners, the however, shall the provision of this Article result in
Executive Labor Arbiters and Labor Arbiters shall the diminution of existing salaries, allowances and
hold office during good behavior until they reach benefits of the aforementioned officials.(As
the age of sixty-five years, unless sooner removed amended by Section 8, Republic Act No. 6715,
for cause as provided by law or become March 21, 1989)
incapacitated to discharge the duties of their office. ________

The Chairman, the division Presiding Commissioners Chapter II
and other Commissioners shall be appointed by the POWERS AND DUTIES
President, subject to confirmation by the
Commission on Appointments. Appointment to any Art. 217. Jurisdiction of the Labor Arbiters and the
vacancy shall come from the nominees of the sector Commission.
which nominated the predecessor. The Executive a. Except as otherwise provided under this Code,
Labor Arbiters and Labor Arbiters shall also be the Labor Arbiters shall have original and exclusive



LABOR RELATIONS: Azucena Vol. II
jurisdiction to hear and decide, within thirty (30) 1. ADDITIONAL CASES
calendar days after the submission of the case by
the parties for decision without extension, even in To the six (6) kinds of cases mentioned in Article
the absence of stenographic notes, the following 217, the following should be added:
cases involving all workers, whether agricultural or
non-agricultural: 1. Money claims arising out of employer-employee
relationship or by virtue of any law or contract,
1. Unfair labor practice cases; involving Filipino workers for overseas deployment,
including claims for actual, moral, exemplary and
2. Termination disputes; other forms of damages, as well as employment
termination of OFWs;
3. If accompanied with a claim for
reinstatement, those cases that workers 2. Wage distortion disputes in unorganized
may file involving wages, rates of pay, hours establishments not voluntarily settled by the parties
of work and other terms and conditions of pursuant to Republic Act No. 6727, as reflected in
employment; Article 124;

4. Claims for actual, moral, exemplary and 3. Enforcement of compromise agreements when
other forms of damages arising from the there is non-compliance by any of the parties
employer-employee relations; pursuant to Article 227 of the Labor Code, as
amended; and
5. Cases arising from any violation of Article
264 of this Code, including questions 4. Other cases as may be provided by law.
involving the legality of strikes and lockouts;
and 2. COMPULSORY ARBITRATION BY LABOR
ARBITERS
6. Except claims for Employees
Compensation, Social Security, Medicare In its broad sense, arbitration is the reference of a
and maternity benefits, all other claims dispute to an impartial third person, chosen by the
arising from employer-employee relations, parties or appointed by statutory authority to hear
including those of persons in domestic or and decide the case in controversy. When the
household service, involving an amount consent of one of the parties is enforced by
exceeding five thousand pesos (P5,000.00) statutory provisions, the proceeding is referred to
regardless of whether accompanied with a as compulsory arbitration. In labor cases,
claim for reinstatement. compulsory arbitration is the process of settlement
of labor disputes by a government agency which has
b. The Commission shall have exclusive appellate the authority to investigate and to make an award
jurisdiction over all cases decided by Labor Arbiters. which is binding on all the parties.

c. Cases arising from the interpretation or 2.1 NLRC Appellate Proceedings Not Part of
implementation of collective bargaining agreements Arbitration
and those arising from the interpretation or
enforcement of company personnel policies shall be Under the Labor Code, it is the Labor Arbiter who is
disposed of by the Labor Arbiter by referring the clothed with the authority to conduct compulsory
same to the grievance machinery and voluntary arbitration on cases involving termination disputes
arbitration as may be provided in said agreements. and other cases under Art. 217.
(As amended by Section 9, Republic Act No. 6715,
March 21, 1989) When the Labor Arbiter renders his decision,
________ compulsory arbitration is deemed terminated



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because by then the hearing and determination of Arbitration Branch having jurisdiction over the workplace
the controversy has ended. of the complainant or petitioner.

2.2 Nature of Proceedings For purposes of venue, the workplace shall be
understood as the place or locality where the employee

is regularly assigned at the time the cause of action
The NLRC Rules describe the proceedings before the arose. It shall include the place where the employee is
Labor Arbiter as non-litigious. Subject to the supposed to report back after a temporary detail,
requirements of due process, the technicalities of assignment, or travel. In case of field employees, as well
law and procedure in the regular courts do not as ambulant or itinerant workers, their workplace is
apply in NLRC/labor arbiter proceedings (Art. 221). where they are regularly assigned, or where they are
The arbiter may avail himself of all reasonable supposed to regularly receive their salaries and wages or
means, including ocular inspection, to ascertain the work instructions from, and report the results of their
facts speedily; he shall personally conduct the assignment to, their employers.
conference or hearings and take full control of the
b) Where two (2) or more Regional Arbitration Branches
proceedings. (Rule V, Sec. 2, NLRC 2005 Rules of
have jurisdiction over the workplace of the complainant
Procedure) or petitioner, the Branch that first acquired jurisdiction
over the case shall exclude the others.
2.3 Article 217 Yields to Arts. 2612 and 2623
c) When venue is not objected to before the filling of
3. LABOR ARBITER’S JURISDICTION, IN GENERAL position papers such issue shall be deemed waived.

The cases labor arbiter can hear and decide are d) The venue of an action may be changed or transferred
employment-related. to a different Regional Arbitration Branch other than
where the complaint was filed by written agreement of
the parties or when the Commission or Labor Arbiter
3.1 Supervisory Control, Crucial
before whom the case is pending so orders, upon motion
by the proper party in meritorious cases.
Control over the performance of the work is the
crucial indicator of employment relationship, e) Cases involving overseas Filipino workers may be filed
without which the labor arbiter has no jurisdiction before the Regional Arbitration Branch having
over the dispute. jurisdiction over the place where the complainant resides
or where the principal office of any of the respondents is
It is well-settled in law and jurisprudence that situated, at the option of the complainant.
where no employer-employee relationship exists
between the parties and no issue is involved which 4.1 Worker’s Option
may be resolved by reference to the Labor Code,
other labor statutes, or any collective bargaining The worker, being the economically-disadvantaged
agreement, it is the Regional Trial Court that has party—whether as complainant/petitioner or as
jurisdiction. respondent, as the case may be—the nearest
governmental machinery to settle the dispute must
4. VENUE be placed at his immediate disposal.

The NLRC Rules of Procedure provides: 4.2 Waiver

Section 1. Venue. - a) All cases which Labor Arbiters have The 2005 NLRC Rules, in Sec. 1(c), Rule IV states:
authority to hear and decide may be filed in the Regional “When venue is not objected to before the filling of
position papers such issue shall be deemed

2
A voluntary arbitrator, under Art. 261, has “original and exclusive” waived.”
jurisdiction over disputes concerning CBA implementation or personnel
policy enforcement.
3
In addition, under Art. 262, the parties may submit to a voluntary
5. LABOR ARBITER’S JURISDICTION: U.L.P. CASES
arbitrator (or panel) “all other disputes including unfair labor practices
and bargaining deadlocks.


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But its essence, captured in Art. 246, is any act The better policy to be followed in determining
intended or directed to weaken or defeat the jurisdiction over a case should be to consider
worker’s rights to self-organize or to engage in concurrent factors such as the status or relationship
lawful concerted activities. In short, unfair labor of the parties or the nature of the question that is
practice, when committed by an employer, carries the subject of their controversy.
the effect of anti-unionism.
7.4 Tabang v. NLRC: SEC Jurisdiction Reaffirmed;
6. CBA VIOLATION AMOUNTING TO ULP Corporate Officer and Intra-corporate Controversy
Defined
Certainly, violations of the collective bargaining
agreement would be unfair labor practice which An “intra-corporate controversy” is one which
falls under the jurisdiction of the Labor Arbiters and arises between a stockholder and the corporation.
the National Labor Relations Commission. There is no distinction, qualification, nor any
exemption whatsoever. The provision is broad and
7. LABOR ARBITER’S JURISDICTION: TERMINATION covers all kinds of controversies between
DISPUTES stockholders and corporations.

Termination disputes or illegal dismissal complaints 8. LABOR ARBITER’S JURISDICTION: MONEY
fall within the jurisdiction of a labor arbiter, as CLAIMS
stated in Art. 217(2).
A money claim arising from employer-employee
7.1 Termination of Corporate Officer; Jurisdiction relations, excepting SSS/ECC/Medicare claims, is
over Intra-Corporate Disputes Transferred from SEC within the jurisdiction of a labor arbiter—
to RTC
1. if the claim, regardless of amount, is
The dismissal of a corporate officer by a corporate accompanied with a claim for reinstatement; or
board is a corporate dispute that should be brought
to the regular courts. 2. if the claim, whether or not accompanied with a
claim for reinstatement, exceeds five thousand
A corporate officer’s dismissal is always a corporate pesos (P5,000.00) per claimant.
act, or an extra-corporate controversy and the
nature is not altered by the reason or wisdom with 8.1 Only Money Claims Not Arising from CBA
which the Board of Directors may have in taking
such action. The Voluntary Arbitrator or Panel of Voluntary
Arbitrators will have original and exclusive
7.2 Effect of Claim for Backwages, Benefits, or jurisdiction over money claims "arising from the
Damages interpretation or implementation of the Collective
Bargaining Agreement and, those arising from the
In intra-corporate matters, such as those affecting interpretation or enforcement of company
the corporation, its directors, trustees, officers and personnel policies", under Article 261.
shareholders, the issue of consequential damages
may just as well be resolved and adjudicated by the 8.2 Money Claims Must Have Arisen from
SEC. Undoubtedly, it is still within the competence Employment
and expertise of the SEC to resolve all matters
arising from or closely connected with all intra- Money claims of workers which do not arise out of
corporate disputes. or in connection with their employer-employee
relationship fall within the general jurisdiction of
7.3 Mainland v. Movilla: The “Better Policy” in regular courts of justice.
Determining SEC Jurisdiction



LABOR RELATIONS: Azucena Vol. II
Where the claim to the principal relief sought is to Still another limit to the arbiter’s jurisdiction is the
be resolved not by reference to the Labor Code or jurisdiction of the regular courts to hear and decide
other labor relations statute or a collective actions filed by third parties being affected by a
bargaining agreement but by the general civil law, strike of people who are not their employees.
the jurisdiction over the dispute belongs to the Finally, if a crime is committed, whether in relation
regular courts of justice and not to the Labor Arbiter to a strike or not, the prosecution of the crime has
and the National Labor Relations Commission. to be done not before a labor arbiter but a regular
court, because in such a case the laws to be
8.3 Money Claims of Coop Employees administered are primarily the penal laws of the
land.
8.4 Jurisdiction over Claims for Damages
10. LABOR ARBITER’S JURISDICTION: OFW’S
Money claims of workers which the labor arbiter MONEY CLAIMS OR DISMISSAL
has original and exclusive jurisdiction are
comprehensive enough to include claims for moral Section 10 of RA 8042, approved on June 7, 1995,
damages of a dismissed employee against his known as the Migrant Workers and Overseas
employer. Filipinos Act of 1995, transfers from the POEA to
Labor Arbiters the original and exclusive jurisdiction
8.5 Splitting of Actions Not Allowed to hear and decide claims arising out of an
employer-employee relationship or by virtue of any
An employee who has been illegally dismissed so as law or contract involving Filipino workers for
to cause him moral damages has a cause of action overseas deployment, including claims for actual,
for reinstatement, back wages and damages. When moral, exemplary and other forms of damages.
he institutes proceedings before the Labor Arbiter,
he should make a claim for all said reliefs. Based on [Article 217, Labor Code and Section 10,
R.A. No. 8042], labor arbiters, clearly have original
8.6 Employer’s Complaint for Damages and exclusive jurisdiction over claims arising from
employer-employee relations, including
An employer’s claim for damages against an terminations disputes involving all workers, among
employee may be filed as counterclaim in the illegal them whom are Overseas Filipino Workers (OFW).
dismissal case filed by the employee. Such claim for
damages, arising from employment relationship, is 11. LABOR ARBITER’S JURISDICTION: WGAE
outside the jurisdiction of the regular court. DISTORTION

9. LABOR ARBITER’S JURISDICTION: STRIKE AND A salary distortion case, referred to in the Article
LOCKOUTS 124, is resolved either through the CBA mechanism
or, in unorganized establishments, through the
Questions relating to strikes or lockouts or any form NCMB. IF the NCMB fails to resolve the dispute in
of work stoppage including incidents thereof under ten days of conciliation conferences, it shall be final
Art. 264 fall within the labor arbiter’s jurisdiction. to the appropriate branch of the NLRC.

But the power to issue injunction is lodged with an 12. LABOR ARBITER’S JURISDICTION: DISPUTES
NLRC division, not a labor arbiter. Moreover, OVER COMPROMISE SETTLEMENTS
“national interest’ cases are handled differently.
Art. 263 (g) empowers the DOLE Secretary or the Because labor law policy encourages voluntary
President of the Republic to assume jurisdiction or resolution of disputes, compromise settlements are
refer the case to the NLRC if the labor dispute or ordinarily final and binding upon the parties. But a
impending strike or lockout involves an industry compromise settlement may itself become the
indispensible to national interest. subject of dispute. If there is noncompliance with
the compromise agreement or if there is prima facie



LABOR RELATIONS: Azucena Vol. II
evidence that the settlement was obtained through a money claim (against the Government) arising
fraud, misrepresentation, or coercion, then, from such contract.
according to Article 227, the NLRC through the labor
arbiter may assume jurisdiction over such dispute. 16. LOCAL WATER DISTRICT

13. SUBMISSION TO JURISDICTION They are quasi public corporations whose
employees belong to the civil service, hence, the
The active participation of the party against whom dismissal of those employees shall be governed by
the action was brought coupled with his failure to the civil service law, rules and regulations.
object to the jurisdiction of the Court or quasi-
judicial body where the action is pending, is 16.1 Exception: Where NLRC Jurisdiction is Invoked
tantamount to an invocation of that jurisdiction,
and a willingness to abide by the resolution of the 17. REPUBLIC ACT NO. 6715—RETROACTIVE?
case will bar said party from later on impugning the ________
court or body’s jurisdiction.
Art. 218. Powers of the Commission. The
The Supreme Court frowns upon the undesirable Commission shall have the power and authority:
practice of a party submitting his case for decision a. To promulgate rules and regulations governing
and then accepting the judgment only if favourable, the hearing and disposition of cases before it and its
and attacking it for lack of jurisdiction when regional branches, as well as those pertaining to its
adverse. internal functions and such rules and regulations as
may be necessary to carry out the purposes of this
14. IMMUNITY OF FOREIGN GOVERNMENTS Code; (As amended by Section 10, Republic Act No.
6715, March 21, 1989)
In international law, "immunity" is commonly
understood as an exemption of the state and its b. To administer oaths, summon the parties to a
organs from the judicial jurisdiction of another controversy, issue subpoenas requiring the
state. This is anchored on the principle of the attendance and testimony of witnesses or the
sovereign equality of states under which one state production of such books, papers, contracts,
cannot assert jurisdiction over another in violation records, statement of accounts, agreements, and
of the maxim par in parem non habet imperium (an others as may be material to a just determination of
equal has no power over an equal). the matter under investigation, and to testify in any
investigation or hearing conducted in pursuance of
As it stands now, the application of the doctrine of this Code;
immunity from suit has been restricted to sovereign
or governmental activities (jure imperii). The mantle c. To conduct investigation for the determination of
of state immunity cannot be extended to a question, matter or controversy within its
commercial, private and proprietary acts (jure jurisdiction, proceed to hear and determine the
gestionis). disputes in the absence of any party thereto who
has been summoned or served with notice to
14.1 Immunity of the UN and Its Specialized appear, conduct its proceedings or any part thereof
Agencies in public or in private, adjourn its hearings to any
time and place, refer technical matters or accounts
15. EXECUTING MONEY CLAIMS AGAINST THE to an expert and to accept his report as evidence
GOVERNMENT after hearing of the parties upon due notice, direct
parties to be joined in or excluded from the
Even when a government agency enters into a proceedings, correct, amend, or waive any error,
business contract with a private entity, it is not the defect or irregularity whether in substance or in
Labor Code but C.A. No. 327 that applies in pursuing form, give all such directions as it may deem
necessary or expedient in the determination of the



LABOR RELATIONS: Azucena Vol. II
dispute before it, and dismiss any matter or refrain injunction in any case involving or growing out of a
from further hearing or from determining the labor dispute as defined in this Code shall be issued
dispute or part thereof, where it is trivial or where except after hearing the testimony of witnesses,
further proceedings by the Commission are not with opportunity for cross-examination, in support
necessary or desirable; and of the allegations of a complaint made under oath,
and testimony in opposition thereto, if offered, and
d. To hold any person in contempt directly or only after a finding of fact by the Commission, to
indirectly and impose appropriate penalties the effect:
therefor in accordance with law.
1. That prohibited or unlawful acts have
A person guilty of misbehavior in the presence of or been threatened and will be committed and
so near the Chairman or any member of the will be continued unless restrained, but no
Commission or any Labor Arbiter as to obstruct or injunction or temporary restraining order
interrupt the proceedings before the same, shall be issued on account of any threat,
including disrespect toward said officials, offensive prohibited or unlawful act, except against
personalities toward others, or refusal to be sworn, the person or persons, association or
or to answer as a witness or to subscribe an organization making the threat or
affidavit or deposition when lawfully required to do committing the prohibited or unlawful act
so, may be summarily adjudged in direct contempt or actually authorizing or ratifying the same
by said officials and punished by fine not exceeding after actual knowledge thereof;
five hundred pesos (P500) or imprisonment not
exceeding five (5) days, or both, if it be the 2. That substantial and irreparable injury to
Commission, or a member thereof, or by a fine not complainant’s property will follow;
exceeding one hundred pesos (P100) or
imprisonment not exceeding one (1) day, or both, if 3. That as to each item of relief to be
it be a Labor Arbiter. granted, greater injury will be inflicted upon
complainant by the denial of relief than will
The person adjudged in direct contempt by a Labor be inflicted upon defendants by the
Arbiter may appeal to the Commission and the granting of relief;
execution of the judgment shall be suspended
pending the resolution of the appeal upon the filing 4. That complainant has no adequate
by such person of a bond on condition that he will remedy at law; and
abide by and perform the judgment of the
Commission should the appeal be decided against 5. That the public officers charged with the
him. Judgment of the Commission on direct duty to protect complainant’s property are
contempt is immediately executory and unable or unwilling to furnish adequate
unappealable. Indirect contempt shall be dealt with protection.
by the Commission or Labor Arbiter in the manner
prescribed under Rule 71 of the Revised Rules of Such hearing shall be held after due and personal
Court; and (As amended by Section 10, Republic Act notice thereof has been served, in such manner as
No. 6715, March 21, 1989) the Commission shall direct, to all known persons
against whom relief is sought, and also to the Chief
e. To enjoin or restrain any actual or threatened Executive and other public officials of the province
commission of any or all prohibited or unlawful acts or city within which the unlawful acts have been
or to require the performance of a particular act in threatened or committed, charged with the duty to
any labor dispute which, if not restrained or protect complainant’s property: Provided, however,
performed forthwith, may cause grave or that if a complainant shall also allege that, unless a
irreparable damage to any party or render temporary restraining order shall be issued without
ineffectual any decision in favor of such party: notice, a substantial and irreparable injury to
Provided, That no temporary or permanent complainant’s property will be unavoidable, such a



LABOR RELATIONS: Azucena Vol. II
temporary restraining order may be issued upon premises, including any work, material, implement,
testimony under oath, sufficient, if sustained, to machinery, appliance or any object therein, and ask
justify the Commission in issuing a temporary any employee, laborer, or any person, as the case
injunction upon hearing after notice. Such a may be, for any information or data concerning any
temporary restraining order shall be effective for no matter or question relative to the object of the
longer than twenty (20) days and shall become void investigation.
at the expiration of said twenty (20) days. No such ________
temporary restraining order or temporary
injunction shall be issued except on condition that 1. POWERS OF THE COMMISSION
complainant shall first file an undertaking with
adequate security in an amount to be fixed by the 1.1 Rule-Making Power
Commission sufficient to recompense those
enjoined for any loss, expense or damage caused by The Commission has the power to promulgate rules
the improvident or erroneous issuance of such and regulations:
order or injunction, including all reasonable costs,
together with a reasonable attorney’s fee, and a) governing the hearing and disposition of cases
expense of defense against the order or against the before it and its regional branches;
granting of any injunctive relief sought in the same
proceeding and subsequently denied by the b) pertaining to its internal functions; and
Commission.
c) those that may be necessary to carry out the
The undertaking herein mentioned shall be purposes of this Code.
understood to constitute an agreement entered
into by the complainant and the surety upon which It is an elementary rule in administrative law that
an order may be rendered in the same suit or administrative regulations and policies enacted by
proceeding against said complainant and surety, administrative bodies, such as the Revised Rules of
upon a hearing to assess damages, of which the NLRC, to interpret the law which they are
hearing, complainant and surety shall have entrusted to enforce, have the force of law, and are
reasonable notice, the said complainant and surety entitled to great respect.
submitting themselves to the jurisdiction of the
Commission for that purpose. But nothing herein 1.2 Power to Issue Compulsory Processes
contained shall deprive any party having a claim or
cause of action under or upon such undertaking The Commission has the power to:
from electing to pursue his ordinary remedy by suit
at law or in equity: Provided, further, That the a) administer oaths;
reception of evidence for the application of a writ of
injunction may be delegated by the Commission to b) summon parties; and
any of its Labor Arbiters who shall conduct such
hearings in such places as he may determine to be c) issue subpoenas ad testificandum and duces
accessible to the parties and their witnesses and tecum.
shall submit thereafter his recommendation to the
Commission. (As amended by Section 10, Republic 1.3 Power to Investigate and Hear Disputes within
Act No. 6715, March 21, 1989) Its Jurisdiction
________
The Commission has the power to:
Art. 219. Ocular inspection. The Chairman, any
Commissioner, Labor Arbiter or their duly a) conduct investigation for the determination of a
authorized representatives, may, at any time during question, matter or controversy within its
working hours, conduct an ocular inspection on any jurisdiction; and
establishment, building, ship or vessel, place or



LABOR RELATIONS: Azucena Vol. II
b) proceed to hear and determine the disputes in The NLRC has no appellate jurisdiction over
the manner laid down under paragraph (c) of Art. decisions rendered by (1) a voluntary arbitrator, or
218. (2) the secretary of labor, or (3) the bureau of labor
relations director on cases appealed from the DOLE
1.4 Contempt Power regional offices. The decisions of these three offices
are appealable rather to the Court of Apeals.
Contempt is defined as a disobedience to the Court
by setting up an opposition to its authority, justice Where the labor arbiter has no jurisdiction or has
and dignity. It signifies not only a willful disregard or not acquired jurisdiction, neither has the NLRC. Its
disobedience of the court's orders but such conduct jurisdiction over cases under Art. 217(a) is
as tends to bring the authority of the court and the appellate, not original.
administration of law into disrepute or in some
manner to impede the due administration of 2. POWER TO ISSUE INJUNCTION OR TEMPORARY
justice. RESTRAINING ORDER

1.5 Power to Conduct Ocular Inspection The NLRC has injunction power or, simply, the
power to command that an act be done or not
Under Article 219, the Chairman, any done.
Commissioner, Labor Arbiter or their duly
authorized representatives, may, at any time during The action for injunction is distinct from the
working hours: ancillary remedy of preliminary injunction4 which
cannot exist except only as part or an incident of an
a) conduct an ocular inspection on any independent action or proceeding.
establishment, building, ship or vessel, place or
premises, including any work, material, implement, A writ of preliminary injunction is generally based
machinery, appliance or any object therein; and solely on initial and incomplete evidence.

b) ask any employee, laborer, or any person, as the 2.1 Injunction by Labor Arbiter
case may be, for any information or data concerning
any matter or question relative to the object of the Article 218 limits the grant of injunctive power to
investigation. the “Commission” meaning the Commission en
banc or any of its divisions.
1.6 Adjudicatory Power: Original
2.2 Requisites for Issuance of Restraining Order or
The NLRC has original jurisdiction over petitions for Injunction
injunction or temporary restraining order under Art.
218(e). As a rule, restraining orders or injunctions do not
issue ex parte and only after compliance with the
Also, it has original jurisdiction to hear and decide following requisites, to wit:
“National Interest” cases certified to it by the
Secretary of Labor under Art. 263(g). a) a hearing held "after due and personal notice
thereof has been served, in such manner as the
1.7 Adjudicatory Power: Appellate Commission shall direct, to all known persons
against whom relief is sought, and also to the Chief
The NLRC has exclusive appellate jurisdiction over Executive and other public officials of the province
all cases decided by labor arbiters (Art. 217[b]) and or city within which the unlawful acts have been
the DOLE regional director or hearing officers under threatened or committed charged with the duty to
Art. 129. protect complainant's property;"

4
The sole object of which is to preserve the status quo until the merits
can be heard.


LABOR RELATIONS: Azucena Vol. II
together with a reasonable attorney's fee, and
b) reception at the hearing of "testimony of expense of defense against the order or against the
witnesses, with opportunity for cross-examination, granting of any injunctive relief sought in the same
in support of the allegations of a complaint made proceeding and subsequently denied by the
under oath," as well as "testimony in opposition Commission;" and
thereto, if offered x x;
d) the "temporary restraining order shall be
c) “a finding of fact by the Commission, to the effective for no longer than twenty (20) days and
effect: (1) That prohibited or unlawful acts have shall become void at the expiration of said twenty
been threatened and will be committed and will be (20) days.
continued unless restrained, but no injunction or
temporary restraining order shall be issued on An injury is considered irreparable if it is of such
account of any threat, prohibited or unlawful act, constant and frequent recurrence that no fair and
except against the person or persons, association or reasonable redress can be had therefor in a court of
organization making the threat or committing the law, or where there is no standard by which their
prohibited or unlawful act or actually authorizing or amount can be measured with reasonable accuracy,
ratifying the same after actual knowledge thereof; that is, it is not susceptible of mathematical
(2) That substantial and irreparable injury to computation. It is considered irreparable injury
complainant's property will follow; (3) That as to when it cannot be adequately compensated in
each item of relief to be granted, greater injury will damages due to the nature of the injury itself or the
be inflicted upon complainant by the denial of relief nature of the right or property injured or when
than will be inflicted upon defendants by the there exists no certain pecuniary standard for the
granting of relief; (4) That complainant has no measurement of damages.
adequate remedy at law; and (5) That the public
officers charged with the duty to protect “Property” includes not only tangible property but
complainant's property are unable or unwilling to also the right to use such property.
furnish adequate protection.”
“Public officers” means local law enforcing officers.
2.3 Conditions for Issuance Ex Parte of a Temporary
Restraining Order (TRO) The “protection” contemplated is that which would
enable the employer to proceed with the work.
A temporary restraining order (valid only for 20
days) may be issued ex parte under the following The intent of this requirement is to take the
conditions: executive function of law enforcement out of the
court and leave it to the appropriate executive
a) the complainant "shall also allege that, unless a officers, unless they fail to function.
temporary restraining order shall be issued without
notice, a substantial and irreparable injury to 2.4 No Adequate Remedy
complainant's property will be unavoidable;
In addition to the other requirements which the
b) there is "testimony under oath, sufficient, if complainant must satisfy in order to obtain
sustained, to justify the Commission in issuing a injunctive relief under the Act, the complainant
temporary injunction upon hearing after notice;" must show that “he has no adequate remedy at
law.”
c) the "complainant shall first file an undertaking
with adequate security in an amount to be fixed by An adequate remedy at law has been defined as
the Commission sufficient to recompense those one “that affords relief with reference to the matter
enjoined for any loss, expense or damage caused by in controversy, and which is appropriate to the
the improvident or erroneous issuance of such particular circumstances of the case.
order or injunction, including all reasonable costs,



LABOR RELATIONS: Azucena Vol. II
2.5 Cash Bond 2.8 Twenty-day Life of TRO

Under the NLRC Rules of 2005, no temporary A temporary restraining order (TRO), if issued at all
restraining order or writ of preliminary injunction in a petition for injunction, is valid only for twenty
shall be issued except on the condition that (20) days and becomes void ipso facto at the end of
petitioner shall first file an undertaking to answer that period.
for the damages and post a cash bond in the
amount of Fifty Thousand Pesos (P50,000.00), or The TRO takes effect upon its issuance and not
such higher amount as may be determined by the upon receipt of the parties.
Commission. The purpose of the bond is to
recompense those enjoined for any loss, expense or The maximum period of 20 days includes Saturdays,
damage caused by the improvident or erroneous Sundays, and holidays.
issuance of such order or injunction, including all
reasonable costs, together with a reasonable 2.9 Illustrative Case: Issuance of TRO
attorney’s fee, and expense of defense against the
order or against the granting of any injunctive relief 2.10 Injunction from NLRC: Not the Proper Remedy
sought in the same proceeding and subsequently against Employee’s Dismissal
denied by the Commission. ________

2.6 Scope [Art. 220. Compulsory arbitration. The Commission
or any Labor Arbiter shall have the power to ask the
As to the scope of an injunction issued under the assistance of other government officials and
Act, both the Act itself and the cases restrict the qualified private citizens to act as compulsory
operation of such injunction not only to the specific arbitrators on cases referred to them and to fix and
acts complained of in the pleadings and proven at assess the fees of such compulsory arbitrators,
trial as wrongful, but further, limits the injunction to taking into account the nature of the case, the time
only those alleged and proven guilty of actual consumed in hearing the case, the professional
participation, authorization or ratification of such standing of the arbitrators, the financial capacity of
acts. the parties, and the fees provided in the Rules of
Court.] (Repealed by Section 16, Batas Pambansa
The power of the NLRC to enjoin or restrain the Bilang 130, August 21, 1981)
commission of any or all prohibited or unlawful acts ________
as provided in Art. 218 of the Labor Code, can only
be exercised in a labor dispute. Art. 221. Technical rules not binding and prior
2.7 Reception of Evidence resort to amicable settlement. In any proceeding
before the Commission or any of the Labor Arbiters,
The reception of evidence “for the application of a the rules of evidence prevailing in courts of law or
writ of injunction may be delegated by the equity shall not be controlling and it is the spirit and
Commission to any of its Labor Arbiters who shall intention of this Code that the Commission and its
conduct such hearings in such places as he may members and the Labor Arbiters shall use every and
determine to be accessible to the parties and their all reasonable means to ascertain the facts in each
witnesses and shall submit thereafter his case speedily and objectively and without regard to
recommendation to the Commission.” technicalities of law or procedure, all in the interest
of due process. In any proceeding before the
“Labor Arbiter” in the preceding sentence may now Commission or any Labor Arbiter, the parties may
refer to “Commission Attorney,” a position created be represented by legal counsel but it shall be the
by R.A. No. 9347 (July 27, 2006) to assist the duty of the Chairman, any Presiding Commissioner
Commission and its divisions in their appellate and or Commissioner or any Labor Arbiter to exercise
adjudicatory functions. complete control of the proceedings at all stages.



LABOR RELATIONS: Azucena Vol. II
Any provision of law to the contrary 1.2 Cardinal Rights in Quasi-Judicial Proceedings
notwithstanding, the Labor Arbiter shall exert all
efforts towards the amicable settlement of a labor There are cardinal primary rights which must be
dispute within his jurisdiction on or before the first respected even in proceedings of this character:
hearing. The same rule shall apply to the
Commission in the exercise of its original 1) right to a hearing;
jurisdiction. (As amended by Section 11, Republic
Act No. 6715, March 21, 1989) 2) tribunal must consider the evidence presented;
________
3) decision must be supported by something
1. PROCEEDINGS BEFORE LABOR ARBITER OR THE (evidence);
COMMISSION; TECHNICAL RULES NOT APPLICABLE
4) supporting evidence must be substantial;
Administrative and quasi-judicial bodies, like the
National Labor Relations Commission, are not 5) Decision must be rendered on the evidence
bound by the technical rules of procedure in the presented or at least contained in the record and
adjudication of cases. disclosed to the parties affected;

Simplification of procedure, without regard to 6) the body or CIR or any of its judges must act on
technicalities of law or procedure and without his own independent considerations of the law and
sacrificing the fundamental requisites of due facts, and not simply accept the views of the
process, is mandated to insure a speedy subordinate in arriving at a decision; and
administration of social justice. This Court
construed Article 221 of the Labor Code as to allow 7) decide in such manner that parties can know the
the NLRC or a labor arbiter to decide a case on the various issues involved and the reason for the
basis of position papers and other documents decision.
submitted without resorting to technical rules of
evidence as observed in regular courts of justice. 1.3 Verification

1.1 Modicum of Admissibility; Substantial Evidence Verification is intended to assure that the
allegations in the pleading have been prepared in
It is true that administrative and quasi-judicial good faith or are true and correct, not mere
bodies like the NLRC are not bound by the technical speculations. Generally, lack of verification is
rules of procedure in the adjudication of cases. merely a format defect that is neither jurisdictional
However, this procedural rule should not be nor fatal.
construed as a license to disregard certain
fundamental evidentiary rules. While the rules of 1.4 Party Respondent
evidence prevailing in the courts of law or equity
are not controlling in proceedings before the NLRC, In a complaint for underpayment of wages and
the evidence presented before it must at least have other money claims filed by employees of a single
a modicum of admissibility for it to be given some proprietorship business, the respondent should be
probative value. the business owner. This is not necessarily the
person in whose name the business is registered.
Not only must there be some evidence to support a
finding or conclusion, but evidence must be 1.5 Prohibited Pleadings and Motions
"substantial." "Substantial evidence is more than a
mere scintilla. It means such relevant evidence as a Emphasizing the avoidance of legal technicalities,
reasonable mind might accept as adequate to the NLRC 2005 Rules (in Rule III, Section4) does not
support a conclusion. allow the following motions or pleadings:



LABOR RELATIONS: Azucena Vol. II
a) Motion to dismiss the complaint except on the c) In any case, the compromise agreement shall be
ground of lack of jurisdiction over the subject approved by the Labor Arbiter, if after explaining to the
matter, improper venue, res judicata, prescription parties, particularly to the complainants, the terms,
and forum shopping; conditions and consequences thereof, he is satisfied that
they understand the agreement, that the same was

entered into freely and voluntarily by them, and that it is
b) Motion for a bill of particulars; not contrary to law, morals, and public policy.

c) Motion for new trial; d) A compromise agreement duly entered into in
accordance with this Section shall be final and binding
d) Petition for relief from judgment when filed with upon the parties and shall have the force and effect of a
the Labor Arbiter; judgment rendered by the Labor Arbiter.

e) Petition for Certiorari, Mandamus or prohibition; e) The mandatory conciliation and mediation conference
shall, except for justifiable grounds, be terminated within
thirty (30) calendar days from the date of the first
f) Motion to declare respondent in default;
conference.

g) Motion for reconsideration or appeal from any f) No motion for postponement shall be entertained
interlocutory order of the Labor Arbiter. except on meritorious grounds.

2. MANDATORY CONCILIATION AND MEDIATION Section 4. Effect of Failure of Conciliation and Mediation.
CONFERENCE; COMPROMISE ENCOURAGED - Should the parties fail to agree upon an amicable
settlement, either in whole or in part, during the
Section 2. Nature of Proceedings. - The proceedings mandatory conciliation and mediation conference, the
before the Labor Arbiter shall be non-Iitigious in nature. Labor Arbiter shall terminate the conciliation and
Subject to the requirements of due process, the mediation stage and proceed to pursue the other
technicalities of law and procedure and the rules purposes of the said conference as enumerated in the
obtaining in the courts of law shall not strictly apply immediately preceding Section. Thereafter, the Labor
thereto. The Labor Arbiter may avail himself of all Arbiter shall direct the parties to simultaneously file their
reasonable means to ascertain the facts of the respective position papers on the issues agreed upon by
controversy speedily, including ocular inspection and the parties and as reflected in the minutes of the
examination of well-informed persons. proceedings.

Section 3. Mandatory Conciliation and Mediation Section 5. Non-Appearance of Parties. - The non-
Conference. – a) The mandatory conciliation and appearance of the complainant or petitioner during the
mediation conference shall be called for the purpose of two (2) settings for mandatory conciliation and
(1) amicably settling the case upon a fair compromise; (2) mediation conference scheduled in the summons,
determining the real parties in interest; (3) determining despite due notice thereof, shall be a ground for the
the necessity of amending the complaint and including all dismissal of the case without prejudice.
causes of action; (4) defining and simplifying the issues in
the case; (5) entering into admissions or stipulations of In case of non-appearance by the respondent during the
facts; and (6) threshing out all other preliminary matters. first scheduled conference, the second conference shall
The Labor Arbiter shall preside and take full control of proceed as scheduled in the summons. If the respondent
the proceedings. still fails to appear at the second conference despite
being duly served with summons, the Labor Arbiter shall
b) Conciliation and mediation efforts shall be exerted by immediately terminate the mandatory conciliation and
the Labor Arbiters all throughout the proceedings. mediation conference. The Labor Arbiter shall thereafter
Should the parties arrive at any agreement as to the allow the complainant or petitioner to file his verified
whole or any part of the dispute, the same shall be position paper and submit evidence in support of his
reduced to writing and signed by the parties and their causes of action, and thereupon render his decision on
respective counsel or authorized representative, if any, the basis of the evidence on record.
before the Labor Arbiter.
It is true that a compromise agreement once
approved by the court has the effect of res judicata


LABOR RELATIONS: Azucena Vol. II
between the parties and should not be disturbed is barred by prior judgment, prescription, or forum
except for vices of consent and forgery. However, shopping, shall be immediately resolved by the Labor
settled is the rule that the NLRC may disregard Arbiter through a written order. An order denying the
technical rules of procedure in order to give life to motion to dismiss, or suspending its resolution until the
final determination of the case, is not appealable.
the constitutional mandate affording protection to

labor and to conform to the need of protecting the
3.1 Motu proprio Dismissal of Complaint based on
working class whose inferiority against the
Prescription
employer has always been earmarked by

disadvantage.
3.2 Res Judicata as Reason to Dismiss Complaint


2.1 Binding Effect of Compromise Agreement
For a prior judgment to constitute a bar to a

subsequent case, the following requisites must
The authority to compromise cannot lightly be
concur: (a) it must be a final judgment or order; (b)
presumed and should be established by evidence.
the court rendering the same must have jurisdiction

Section 9. Authority to Bind Party. - Attorneys and other
over the subject matter and over the parties; (c) it
representatives of parties shall have authority to bind must be a judgment or order on the merits, and (d)
their clients in all matters of procedure; but they cannot, there must be between the two cases Identity of
without a special power of attorney or express consent, parties, subject matter, and causes of action.
enter into a compromise agreement with the opposing
party in full or partial discharge of a client's claim. 3.3 No Dismissal of Complaint despite Death

Also not to be overlooked is Section 3 (c and d) of 3.4 Revival or Refiling of Dismissed Case
the NLRC 2005 Rules of Procedure quoted above. It
requires the Labor Arbiter’s approval of a A dismissed case is not necessarily dead.
compromise agreement over a case pending before
the Labor Arbiter. Section 16. Revival And Re-Opening Or Re-Filing Of
Dismissed Case. - A party may file a motion to revive or
2.2 Quitclaim and Waivers re-open a case dismissed without prejudice, within ten
(10) calendar days from receipt of notice of the order
A deed of release or quitclaim cannot bar an dismissing the same; otherwise, his only remedy shall be
to re-file the case in the arbitration branch of origin.
employee from demanding benefits to which he is

legally entitled.
A complaint dismissed “without prejudice” simply

means a tentative or temporary dismissal—the
2.2a Final and Executory Judgment Cannot be
complaint may be revived through an appropriate
Negotiated
motion.


The judgment may no longer be modified in any
4. SUBMISSION OF POSITION PAPERS AND REPLY
respect, even if the modification is meant to correct

what is perceived to be an erroneous conclusion of
4.1 Determination of necessity of Hearing or
fact or law, and regardless of whether the
Clarificatory Conference
modification is attempted to be made by the court

rendering it or by the highest court of the land.
Section 8. Determination of Necessity of Hearing or
Clarificatory Conference. - Immediately after the
3. MOTION TO DISMISS submission by the parties of their position paper or reply,
as the case may be, the Labor Arbiter shall, motu proprio,
Section 6. Motion to Dismiss. - On or before the date set determine whether there is a need for a hearing or
for the mandatory conciliation and mediation clarificatory conference. At this stage, he may, at his
conference, the respondent may file a motion to dismiss. discretion and for the purpose of making such
Any motion to dismiss on the ground of lack of determination, ask clarificatory questions to further elicit
jurisdiction, improper venue, or that the cause of action facts or information, including but not limited to the



LABOR RELATIONS: Azucena Vol. II
subpoena of relevant documentary evidence, if any, from his scheduled presentation of evidence or opportunity to
any party or witness. cross-examine witnesses, despite due notice thereof,
shall be construed as a waiver on his part to present
4.2 Role of the Labor Arbiter in hearing and evidence or conduct cross-examination.
clarificatory conference--
c) The parties and their counsels appearing before the
Section 9. Role of the Labor Arbiter in Hearing and Labor Arbiter shall be prepared for continuous hearing or
Clarificatory Conference. - a) The Labor Arbiter shall take clarificatory conference. No postponement or
full control and personally conduct the hearing or continuance shall be allowed by the Labor Arbiter, except
clarificatory conference. Unless otherwise provided by upon meritorious grounds and subject always to the
requirement of expeditious disposition of cases. In any
law, the Labor Arbiter shall determine the order of
case, the hearing or clarificatory conference shall be
presentation of evidence by the parties, subject to the
terminated within ninety (90) calendar days from the
requirements of due process. He shall examine the
parties and their witnesses with respect to the matters at date of the initial hearing or conference.
issue; and ask questions only for the purpose of clarifying
points of law or fact involved in the case. He shall limit d) Paragraph (c) of this Section notwithstanding, in cases
the presentation of evidence to matters relevant to the involving overseas Filipino workers, the aggregate period
issue before him and necessary for a just and speedy for conducting the mandatory conciliation and mediation
conference, including hearing on the merits or
disposition of the case.
clarificatory conference, shall not exceed sixty (60) days,

b) In the cross-examination of witnesses, only relevant, which shall be reckoned from the date of acquisition of
pertinent and material questions necessary to enlighten jurisdiction by the Labor Arbiter over the person of the
the Labor Arbiter shall be allowed. respondents.

c) The Labor Arbiter shall make a written summary of the 5. SUBMISSION OF THE CASE FOR DECISION
proceedings, including the substance of the evidence
presented, in consultation with the parties. The written 5.1 Position Papers as Basis of Decision
summary shall be signed by the parties and shall form
part of the records. The affidavits in such case may take the place of
their direct testimony. The labor arbiter may
4.3 Non-appearance of Parties; Postponement of choose, if he deems it necessary, to set the case for
Hearing and Clarificatory Conferences. hearing on the merits where witnesses may be
presented and examined by the parties. In both
Section 10. Non-Appearance of Parties, and instances, the burden of proving that the
Postponement of Hearings and Clarificatory Conferences.
termination was for valid or authorized cause rests
- a) Non-appearance at a hearing or clarificatory
conference by the complainant or petitioner, who was
on the employer.
duly notified thereof, may be sufficient cause to dismiss
the case without prejudice. Subject to Section 16 of this 5.2 Lack of Verification, Not Fatal
Rule, where proper justification is shown by proper
motion to warrant the re-opening of the case, the Labor The lack of verification of the position paper-
Arbiter shall call another hearing or clarificatory affidavit is a formal, rather than a substantial,
conference and continue the proceedings until the case defect. It is not fatal. It could be easily corrected by
is finally decided. The dismissal of the case for the second requiring an oath.
time due to the unjustified non-appearance of the
complainant or petitioner, who was duly notified of the
5.3 Due Process: Opportunity to Be Heard
clarificatory hearing, shall be with prejudice.


b) In case the respondent fails to appear during the The simple meaning of procedural due process is
hearing or clarificatory conference despite due notice that a party to a case must be given sufficient
thereof, the complainant shall be allowed to present opportunity to be heard. Its very essence is to allow
evidence ex-parte, without prejudice to cross- all parties opportunity to present evidence.
examination at the next hearing or conference. Two (2)
successive non-appearances by the respondent during



LABOR RELATIONS: Azucena Vol. II
A formal or trial-type hearing is not at all times and 7. FILING AND SERVICE OF PLEADINGS AND
in all instances essential to due process, the DECISIONS
requirements of which are satisfied where parties
are afforded fair and reasonable opportunity to Section 5. Filing and Service of Pleadings. - All pleadings
explain their side of the controversy at hand. in connection with the case shall be filed with the
appropriate docketing unit of the Regional Arbitration
5.4 Inhibition Branch or the Commission, as the case maybe.


The party filing the pleadings shall serve the opposing
Section 12. Inhibition. - A Labor Arbiter may voluntarily
parties with a copy thereof and its supporting documents
inhibit himself from the resolution of a case and shall so
in the manner provided for in these Rules with proof of
state in writing the legal justifications therefor. Upon
service thereof.
motion of a party, either on the ground of relationship
within the fourth civil degree of consanguinity or affinity

with the adverse party or counsel, or on question of 7.1 Service of Notice and Resolutions
impartiality, the Labor Arbiter may inhibit himself from
further hearing and deciding the case. Such motion shall Section 6. Service of Notices and Resolutions. - a) Notices
be resolved within five (5) days from the filing thereof. or summons and copies of orders, shall be served on the
An order denying or granting a motion for inhibition is parties to the case personally by the Bailiff or duly
inappealable. authorized public officer within three (3) days from
receipt thereof or by registered mail; Provided that in
5.5 Due Process Includes Impartiality of the Appeal special circumstances, service of summons may be
effected in accordance with the pertinent provisions of
Body
the Rules of Court; Provided further, that in cases of
decisions and final awards, copies thereof shall be served
In addition, administrative due process includes (a) on both parties and their counsel or representative by
the right to notice, be it actual or constructive, of registered mail; Provided further that in cases where a
the institution of the proceedings that may affect a party to a case or his counsel on record personally seeks
person's legal right; (b) reasonable opportunity to service of the decision upon inquiry thereon, service to
appear and defend his rights and to introduce said party shall be deemed effected upon actual receipt
witnesses and relevant evidence in his favor; (c) a thereof; Provided finally, that where parties are so
tribunal so constituted as to give him reasonable numerous, service shall be made on counsel and upon
assurance of honesty and impartiality, and one of such number of complainants, as may be practicable,
which shall be considered substantial compliance with
competent jurisdiction; and (d) a finding or decision
Article 224 (a) of the Labor Code, as amended.
by that tribunal supported by substantial evidence
presented at the hearing or at least ascertained in For purposes of appeal, the period shall be counted from
the records or disclosed to the parties. receipt of such decisions, resolutions, or orders by the
counsel or representative of record.
It is self-evident from the ruling case law that the
officer who reviews a case on appeal should not be b) The Bailiff or officer serving the notice, order,
the same person whose decision is the subject of resolution or decision shall submit his return within two
review. Thus, we have ruled that "the reviewing (2) days from date of service thereof, stating legibly in his
officer must perforce be other than the officer return his name, the names of the persons served and
the date of receipt, which return shall be immediately
whose decision is under review.
attached and shall form part of the records of the case.
In case of service by registered mail, the Bailiff or officer
6. SUSPENSION OF PROCEEDINGS shall write in the return, the names of persons served
and the date of mailing of the resolution or decision. If
To allow labor cases to proceed would clearly no service was effected, the service officer shall state the
defeat the purpose of the automatic stay and reason therefor in the return.
severely encumber the management committee’s
time and resources. 7.2 Proof and Completeness of Service



LABOR RELATIONS: Azucena Vol. II
Section 7. Proof and Completeness of Service. - The remedy or relief granted. In cases involving monetary
return is prima facie proof of the facts indicated therein. awards, the decisions or orders of the Labor Arbiter shall
Service by registered mail is complete upon receipt by contain the amount awarded.
the addressee or his agent; but if the addressee fails to
claim his mail from the post office within five (5) days In case the decision of the Labor Arbiter includes an
from the date of first notice of the postmaster, service order of reinstatement, it shall likewise contain: a) a
shall take effect after such time. statement that the reinstatement aspect is immediately
executory; and b) a directive for the employer to submit
Section 4, Rule 13 of the Rules of Court which is a report of compliance within ten (10) calendar days
suppletory to the rules of the NLRC, provides as from receipt of the said decision.
follows:
9.2 No Motions for Reconsideration and Petition for
Section 4. Personal Service. — Service of the Relief from Judgment
papers may be made by delivering personally a copy to
the party or his attorney, or by leaving it in his office with Section 15. Motions for Reconsideration and Petitions for
his clerk or with a person having charge thereof. If no Relief from Judgment. - No motions for reconsideration
person is found in his office, or his office is not known, or petitions for relief from judgment of any decision,
then by leaving the copy, between the hours of eight in resolution or order of a Labor Arbiter shall be
the morning and six in the evening, at the party's or allowed.However, when one such motion for
attorney's residence, if known, with a person of sufficient reconsideration is filed, it shall be treated as an appeal
discretion to receive the same. provided that it complies with the requirements for
perfecting an appeal.In the case of a petition for relief
8. RESOLUTION OF DOUBT IN LAW OR EVIDENCE from judgment, the Labor Arbiter shall elevate the case
to the Commission for disposition.
It is now a familiar rule that doubt as to the ________
interpretation of labor laws and regulations has to
be resolved in favor of labor. This precept is etched Art. 222. Appearances and Fees.
in the Labor Code (Art. 4) and, in similar tenor, the a. Non-lawyers may appear before the Commission
Civil Code (Art. 1702). or any Labor Arbiter only:

But this precept is not limited to interpretation of 1. If they represent themselves; or
legal provisions. It extends likewise to doubts about
the evidence of the disputants. 2. If they represent their organization or
members thereof.
9. DECISION OF LABOR ARBITER
b. No attorney’s fees, negotiation fees or similar
Section 13. Period to Decide Case. - The Labor Arbiter charges of any kind arising from any collective
shall render his decision within thirty (30) calendar days, bargaining agreement shall be imposed on any
without extension, after the submission of the case by individual member of the contracting union:
the parties for decision, even in the absence of Provided, However, that attorney’s fees may be
stenographic notes; Provided however, that cases charged against union funds in an amount to be
involving overseas Filipino workers shall be decided agreed upon by the parties. Any contract,
within ninety (90) calendar days after the filing of the agreement or arrangement of any sort to the
complaint which shall commence to run upon acquisition contrary shall be null and void. (As amended by
by the Labor Arbiter of jurisdiction over the respondents.
Presidential Decree No. 1691, May 1, 1980)

________
9.1 Contents of Decisions


1. APPEARANCE OF NON-LAWYERS
Section 14. Contents of Decisions. - The decisions and
orders of the Labor Arbiter shall be clear and concise and

shall include a brief statement of the: a) facts of the case; Section 8. Appearances. - b) A non-lawyer may appear as
counsel in any of the proceedings before the Labor
b) issues involved; c) applicable laws or rules; d)
conclusions and the reasons therefor; and e) specific


LABOR RELATIONS: Azucena Vol. II
Arbiter or Commission only under the following 2) there must be filed the written consent of the
conditions: client to the substitution;

(1) he represents himself as party to the case; 3) there must be filed the written consent of the

attorney to be substituted, if such consent can be
(2) he represents a legitimate labor organization, as
defined under Article 212 and 242 of the Labor Code, as
obtained;
amended, which is a party to the case: Provided, that he
presents: (i) a certification from the Bureau of Labor 4) in case such written consent cannot be procured,
Relations (BLR) or Regional Office of the Department of there must be filed with the application for
Labor and Employment attesting that the organization he substitution, proof of the service of notice of such
represents is duly registered and listed in the roster of motion in the manner required by the rules, on the
legitimate labor organizations; (ii) a verified certification attorney to be substituted.
issued by the secretary and attested to by the president
of the said organization stating that he is authorized to 3. AUTHORITY TO BIND PARTY
represent the said organization in the said case; and (iii) a

copy of the resolution of the board of directors of the
Section 9. Authority to Bind Party. - Attorneys and other
said organization granting him such authority;
representatives of parties shall have authority to bind

their clients in all matters of procedure; but they cannot,
(3) he represents a member or members of a legitimate
without a special power of attorney or express consent,
labor organization that is existing within the employer's
enter into a compromise agreement with the opposing
establishment, who are parties to the case: Provided,
party in full or partial discharge of a client's claim.
that he presents: (i) a verified certification attesting that
he is authorized by such member or members to

represent them in the case; and (ii) a verified certification 4. ATTORNEY’S FEE
issued by the secretary and attested to by the president
of the said organization stating that the person or The purpose of the provision is to prevent
persons he is representing are members of their imposition on the workers of the duty to
organization which is existing in the employer's individually contribute their respective shares in the
establishment; fee to be paid the attorney for his services on behalf
of the union in its negotiations with the
(4) he is a duly-accredited member of any legal aid office management. The obligation to pay the attorney's
recognized by the Department of Justice or Integrated
fees belongs to the union and cannot be shunted to
Bar of the Philippines: Provided, that he (i) presents
proof of his accreditation; and (ii) represents a party to
the workers as their direct responsibility.
the case;
4.1 Negotiation Fee
(5) he is the owner or president of a corporation or
establishment which is a party to the case: Provided, that The 105 negotiation fee which covers attorney’s
he presents: (i) a verified certification attesting that he is fees, agency fee, and the like is based on the
authorized to represent said corporation or amount of backwages receivable under the CBA
establishment; and (ii) a copy of the resolution of the which is beyond what the law grants.
board of directors of said corporation, or other similar
resolution or instrument issued by said establishment,
4.2 For Services Rendered by Union Officers
granting him such authority.


Article 222 (b) prohibits attorney's fees,
2. CHANGE OF LAWYER
negotiations fees and similar charges arising out of

the conclusion of a collective bargaining agreement
No substitution of attorneys will be allowed unless
from being imposed on any individual union
the following requisites concur:
member. The collection of the special assessment

partly for the payment for services rendered by
1) there must be filed a written application for
union officers, consultants and others may not be in
substitution;
the category of "attorney's fees or negotiations

fees." But there is no question that it is an exaction


LABOR RELATIONS: Azucena Vol. II
which falls within the category of a "similar charge,"
and, therefore, within the coverage of the In all cases, the appellant shall furnish a copy of the
prohibition in the aforementioned article. memorandum of appeal to the other party who
________ shall file an answer not later than ten (10) calendar
days from receipt thereof.
Chapter III
APPEAL The Commission shall decide all cases within twenty
(20) calendar days from receipt of the answer of the
Art. 223. Appeal. Decisions, awards, or orders of the appellee. The decision of the Commission shall be
Labor Arbiter are final and executory unless final and executory after ten (10) calendar days
appealed to the Commission by any or both parties from receipt thereof by the parties.
within ten (10) calendar days from receipt of such
decisions, awards, or orders. Such appeal may be Any law enforcement agency may be deputized by
entertained only on any of the following grounds: the Secretary of Labor and Employment or the
a. If there is prima facie evidence of abuse of Commission in the enforcement of decisions,
discretion on the part of the Labor Arbiter; awards or orders. (As amended by Section 12,
Republic Act No. 6715, March 21, 1989)
b. If the decision, order or award was secured ________
through fraud or coercion, including graft and
corruption; 1. NO MOTION FOR RECONSIDERATION OF LABOR
ARBITER’S DECISION
c. If made purely on questions of law; and
If any grounds mentioned in this Article exists, the
d. If serious errors in the findings of facts are raised losing party may appeal the Labor Arbiter’s decision
which would cause grave or irreparable damage or to the NLRC within ten (10) days from receipt of the
injury to the appellant. decision.

In case of a judgment involving a monetary award, 1.1 Final Decision Cannot Be Amended
an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by If not appealed on time, the Labor Arbiter’s decision
a reputable bonding company duly accredited by becomes final and cannot be amended.
the Commission in the amount equivalent to the
monetary award in the judgment appealed from. The perfection of an appeal within the statutory or
reglementary period is not only mandatory but also
In any event, the decision of the Labor Arbiter jurisdictional and failure to do so renders the
reinstating a dismissed or separated employee, questioned decision final and executor, thus
insofar as the reinstatement aspect is concerned, depriving the appellate court of jurisdiction to alter
shall immediately be executory, even pending the final judgment, much less entertain the appeal.
appeal. The employee shall either be admitted back
to work under the same terms and conditions 2. PERIOD TO APPEAL FROM LABOR ARBITER
prevailing prior to his dismissal or separation or, at
the option of the employer, merely reinstated in the 2.1 Ten Calendar Days
payroll. The posting of a bond by the employer shall
not stay the execution for reinstatement provided A period of ten (10) days from receipt of any order
herein. is granted to either or to both parties involved to
appeal to the National Labor Relations Commission.
To discourage frivolous or dilatory appeals, the
Commission or the Labor Arbiter shall impose After mature and careful deliberation, We have
reasonable penalty, including fines or censures, arrived at the conclusion that the shortened period
upon the erring parties. of ten (10) days fixed by Article 223 contemplates



LABOR RELATIONS: Azucena Vol. II
calendar days and not working days. We are not prejudiced by the delay in the service of said
persuaded to this conclusion, if only because We copy of appeal.
believe that it is precisely in the interest of labor
that the law has commanded that labor cases be 2.6 No Extension of Period
promptly, if not peremptorily, dispose of.
Section 1. Periods of Appeal. - No motion or request for
This Court reiterates the doctrine enunciated in said extension of the period within which to perfect an appeal
case that the 10-day period provided in Art. 223 of shall be allowed.
the Labor Code refers to 10 calendar days and not
10 working days. This means that Saturdays, 2.7 Periods Generally Mandatory
Sundays and Legal Holidays are not to be excluded,
but included, in counting the 10-day period. This is Such periods are imposed with a view to prevent
in line with the objective of the law for speedy needless delays and to ensure the orderly and
disposition of labor cases with the end in view of speedy discharge of judicial business. Strict
protecting the interests of the working man. compliance with such rule is both mandatory and
imperative.
2.2 Ten-Calendar-Day Rule Not Applicable Prior to
Vir-Jen Case 3. GROUNDS OF APPEAL

2.3 Under the 2005 NLRC Rules of Procedure Section 2. Grounds. - The appeal may be entertained only
on any of the following grounds:


Section 1. Periods of Appeal. - Decisions, resolutions or
a) If there is prima facie evidence of abuse of discretion
orders of the Labor Arbiter shall be final and executory
on the part of the Labor Arbiter or Regional Director;
unless appealed to the Commission by any or both

parties within ten (10) calendar days from receipt
b) If the decision, resolution or order was secured
thereof; and in case of decisions, resolutions or orders of
through fraud or coercion, including graft and corruption;
the Regional Director of the Department of Labor and

Employment pursuant to Article 129 of the Labor Code,
c) If made purely on questions of law; and/or
within five (5) calendar days from receipt thereof. If the

10th or 5th day, as the case may be, falls on a Saturday,
d) If serious errors in the findings of facts are raised
Sunday or holiday, the last day to perfect the appeal shall
which, if not corrected, would cause grave or irreparable
be the first working day following such Saturday, Sunday
damage or injury to the appellant.
or holiday.


4. WHERE TO FILE APPEAL
2.4 Date of Receipt by Mail


Section 3. Where Filed. - The appeal shall be filed with
The rule is that service by registered mail is the Regional Arbitration Branch or Regional Office where
complete either upon actual receipt by the the case was heard and decided.
addressee or at the end of five (5) days, if he does
not claim it within five (5) days from the first notice 5. REQUISITES FOR PERFECTION OF APPEAL
of the postmaster. (Rule 13, §8) The purpose is to
place the date of receipt of pleadings, judgments Section 4. requisites For Perfection Of Appeal. - a) The
and processes beyond the power of the party being appeal shall be: 1) filed within the reglementary period
served to determine at his pleasure. provided in Section 1 of this Rule; 2) verified by the
appellant himself in accordance with Section 4, Rule 7 of
2.5 Failure to Give Copy of Appeal to Adverse Party the Rules of Court, as amended; 3) in the form of a
Within Ten Days memorandum of appeal which shall state the grounds
relied upon and the arguments in support thereof, the
relief prayed for, and with a statement of the date the
The failure to give copy of appeal to the appellee
appellant received the appealed decision, resolution or
within ten (10) days is not fatal if the appellee was order; 4) in three (3) legibly typewritten or printed
copies; and 5) accompanied by i) proof of payment of the



LABOR RELATIONS: Azucena Vol. II
required appeal fee; ii) posting of a cash or surety bond 8. APPEAL BOND; FILING ON TIME; EXCEPTIONS
as provided in Section 6 of this Rule; iii) a certificate of
non-forum shopping; and iv) proof of service upon the Section 6. Bond. - In case the decision of the Labor
other parties. Arbiter or the Regional Director involves a monetary
award, an appeal by the employer may be perfected only
b) A mere notice of appeal without complying with the upon the posting of a bond, which shall either be in the
other requisites aforestated shall not stop the running of form of cash deposit or surety bond equivalent in
the period for perfecting an appeal. amount to the monetary award, exclusive of damages
and attorney's fees.
c) The appellee may file with the Regional Arbitration
Branch or Regional Office where the appeal was filed, his In case of surety bond, the same shall be issued by a
answer or reply to appellant's memorandum of appeal, reputable bonding company duly accredited by the
not later than ten (10) calendar days from receipt Commission or the Supreme Court, and shall be
thereof. Failure on the part of the appellee who was accompanied by original or certified true copies of the
properly furnished with a copy of the appeal to file his following:
answer or reply within the said period may be construed
as a waiver on his part to file the same. a) a joint declaration under oath by the employer, his
counsel, and the bonding company, attesting that the
d) Subject to the provisions of Article 218 of the Labor bond posted is genuine, and shall be in effect until final
Code, once the appeal is perfected in accordance with disposition of the case.
these Rules, the Commission shall limit itself to reviewing
and deciding only the specific issues that were elevated b) an indemnity agreement between the employer-
on appeal. appellant and bonding company;

6. FRIVOLOUS APPEAL c) proof of security deposit or collateral securing the
bond: provided, that a check shall not be considered as
Section 11, Rule VI of the NLRC Rules of Procedure an acceptable security;
empowers not only the Commission but also the
Labor Arbiter to impose reasonable penalties, d) a certificate of authority from the Insurance
Commission;
including fines and censures, upon a party for filing

a frivolous appeal. This implies that even when the e) certificate of registration from the Securities and
appeal is still with the Labor-Arbiter, and not yet Exchange Commission;
transmitted to the Commission, the former may
already find it frivolous and, there and then, f) certificate of authority to transact surety business from
terminate that appeal. the Office of the President;

6.1 Unverified Letter Not Proper Appeal g) certificate of accreditation and authority from the
Supreme Court; and
7. PAYMENT OF APPEAT FEES
h) notarized board resolution or secretary's certificate

from the bonding company showing its authorized
Section 5. Appeal Fee. - The appellant shall pay an appeal
signatories and their specimen signatures.
fee of One Hundred Fifty Pesos (P150.00) to the Regional

Arbitration Branch or Regional Office of origin, and the
A cash or surety bond shall be valid and effective from
official receipt of such payment shall form part of the
the date of deposit or posting, until the case is finally
records of the case.
decided, resolved or terminated, or the award
satisfied.This condition shall be deemed incorporated in
The failure to pay the appeal docketing fee confers the terms and conditions of the surety bond, and shall be
a directory and not a mandatory power to dismiss binding on the appellants and the bonding company.
an appeal, and such power must be exercised with a
sound discretion and with a great deal of The appellant shall furnish the appellee with a certified
circumspection considering all attendant true copy of the said surety bond with all the above-
circumstances. mentioned supporting documents.The appellee shall



LABOR RELATIONS: Azucena Vol. II
verify the regularity and genuineness thereof and Substantial justice demands that it fulfill its
immediately report any irregularity to the Commission. commitment to post the bond in order to stay
execution of the judgment against it pending
Upon verification by the Commission that the bond is resolution of the appeal therefrom. This
irregular or not genuine, the Commission shall cause the
consideration cannot be outweighed by the claim
immediate dismissal of the appeal, and censure or cite in
contempt the responsible parties and their counsels, or
that procedural errors were committed by the
subject them to reasonable fine or penalty. Labor Arbiter.

No motion to reduce bond shall be entertained except on 9. RECORDS AND TRANSMITTAL
meritorious grounds, and only upon the posting of a
bond in a reasonable amount in relation to the monetary Section 7. Records of Case on Appeal. - The records of a
award. case shall have a corresponding index of its contents
which shall include the following: a) the original copy of
The mere filing of a motion to reduce bond without the complaint; b) other pleadings and motions; c)
complying with the requisites in the preceding minutes of the proceedings, notices, transcripts of
paragraphs shall not stop the running of the period to stenographic notes, if any; d) decisions, orders, and
perfect an appeal. resolutions as well as proof of service thereof, if
available; e) the computation of the award; f)
The bond is sine qua non to the perfection of appeal memorandum of appeal and the reply or answer thereto,
from the labor arbiter’s monetary award. if any, and proof of service, if available; g) official receipt
of the appeal fee; and h) the appeal bond, if any.

8.1 Motion to Reduce Bond under NLRC Rules
The records shall be chronologically arranged and paged
prominently.
A motion to reduce the amount of the bond may be
entertained, but, meantime, a bond in reasonable Section 8. Transmittal Of Records Of Case On Appeal. -
amount must be filed anyway. Within forty-eight (48) hours after the filing of the
appeal, the records of the case shall be transmitted by
8.2 No Bond, No Appeal Perfected the Regional Arbitration Branch or office of origin to the
Commission.
The lawmakers intended the posting of a cash or
surety bond by the employer to be the exclusive 10. EFFECT OF APPEAL OF ARBITER’S DECISION
means by which an employer’s appeal may be
considered completed. Section 9. Perfection Of Appeal; Effect. - Without
prejudice to immediate reinstatement pending appeal

under Section 6 of Rule XI, once an appeal is filed, the
8.2a Relaxing the Ten-day Period Labor Arbiter loses jurisdiction over the case. All
pleadings and motions pertaining to the appealed case
8.3 No Distinction Between “Filing” and shall thereafter be addressed to and filed with the
“Perfection” of Appeal; Star Angel Decision, Not Commission.
“Venerable”
10.1 Execution or Reinstatement Pending Appeal
8.4 Amount of Appeal Bond Excludes Damages
Section 6. Execution of Reinstatement Pending Appeal. -
An appeal is deemed perfected upon the posting of In case the decision includes an order of reinstatement,
the bond equivalent to the monetary award and the employer disobeys the directive under the
exclusive of moral and exemplary damages as well second paragraph of Section 14 of Rule V or refuses to
as attorney’s fees. reinstate the dismissed employee, the Labor Arbiter shall
immediately issue writ of execution, even pending

appeal, directing the employer to immediately reinstate
8.5 Is Property Bond Acceptable? YES. the dismissed employee either physically or in the
payroll, and to pay the accrued salaries as a consequence
8.6 Supersedeas Bond of such reinstatement at the rate specified in the
decision.


LABOR RELATIONS: Azucena Vol. II

The Sheriff shall serve the writ of execution upon the Section 4. Commission En Banc Session, Quorum and
employer or any other person required by law to obey Vote. - c) Division. - The presence of at least two (2)
the same. If he disobeys the writ, such employer or Commissioners of a Division shall constitute a quorum.
person may be cited for contempt in accordance with The concurrence of two (2) Commissioners of a Division
Rule IX. shall be necessary for the pronouncement of a judgment
or resolution.
10.2 Effect of Perfection of Appeal on Execution
Whenever the required membership in a Division is not
Section 9. Effect of Perfection of Appeal on Execution. - complete and the concurrence of two (2) Commissioners
The perfection of an appeal shall stay the execution of to arrive at a judgment or resolution cannot be obtained,
the decision of the Labor Arbiter on appeal, except the Chairman shall designate such number of additional
execution for reinstatement pending appeal. Commissioners from the other Divisions as may be
necessary from the same sector.

11. FRIVOLOUS OR DILATORY APPEALS
d) Role of Chairman in the Division. - The Chairman of the
Commission may convene and preside over the session
Section 10. Frivolous or Dilatory Appeals. - No appeal
of any Division to consider any case pending before it
from an interlocutory order shall be entertained.To and participate in its deliberations, if in his judgment, his
discourage frivolous or dilatory appeals, including those presence therein will best serve the interests of labor
taken from interlocutory orders, the Commission may justice. He shall not however, participate in the voting by
censure or cite in contempt the erring parties and their the Division, except when he is acting as Presiding
counsels, or subject them to reasonable fine or penalty.
Commissioner of the Division in the absence of the
regular Presiding Commissioner
12. APPEALS FROM DECISION OF OTHER AGENCIES
13.1 Issues on Appeal
Section 11. Appeals from Decision of Other Agencies. -

The Rules provided herein governing appeals from the
decisions or orders of Labor Arbiters shall apply to
Section 4(d) Rule VI of the NLRC Rules of Procedure,
appeals to the Commission from decisions or orders of the Commission shall, in cases of perfected appeals,
the other offices or agencies appealable to the limit itself to reviewing those issues which were
Commission according to law. raised on appeal.

13. PROCEEDING BEFORE THE COMMISSION 13.2 Technical Rules Not Binding

Section 2. Composition and Internal Functions of the Section 10. Technical Rules Not Binding. - The rules of
Commission En Banc and Its Divisions. – b) Commission procedure and evidence prevailing in courts of law and
En Banc. - The Commission shall sit en banc only for equity shall not be controlling and the Commission shall
purposes of promulgating rules and regulations use every and all reasonable means to ascertain the facts
governing the hearing and disposition of cases before its in each case speedily and objectively, without regard to
Divisions and Regional Arbitration Branches, and for the technicalities of law or procedure, all in the interest of
formulation of policies affecting its administration and due process.
operations. It may, on temporary or emergency basis,
allow cases within the jurisdiction of any Division to be In any proceeding before the Commission, the parties
heard by any other Division whose docket allows the may be represented by legal counsel but it shall be the
additional workload and such transfer will not expose duty of the Chairman, any Presiding Commissioner or
litigants to unnecessary additional expense. Commissioner to exercise complete control of the
proceedings at all stages.
c) Divisions. - Unless otherwise provided by law, the
Commission shall exercise its adjudicatory and all other 13.2a Evidence Submitted on Appeal to NLRC
powers, functions and duties through its five (5)
Divisions. Each Division shall consist of one member from The settled rule is that the NLRC is not precluded
the public sector who shall act as the Presiding
from receiving evidence on appeal as technical rules
Commissioner and one member each from the workers
and employers sectors, respectively.
of evidence are not binding in labor cases. In fact,



LABOR RELATIONS: Azucena Vol. II
labor officials are mandated by the Labor Code to practicable, appoint two (2) Commissioners from other
use every and all reasonable means to ascertain the Divisions representing the sector of the Commissioners
facts in each case speedily and objectively, without who inhibited themselves.
regard to technicalities of law or procedure, all in
the interest of due process. 14. FORM OF DECISION, RESOLUTION AND ORDER

13.3 Conciliation/Mediation Section 13. Form of Decision, Resolution and Order. - The
decision, resolution and order of the Commission shall

state clearly and distinctly the findings of facts, issues,
Section 11. Conciliation and Mediation. - In the exercise
and conclusions of law on which it is based, and the relief
of its exclusive, original and appellate jurisdiction, the
granted, if any. If the decision, resolution or order
Commission may exert all efforts towards the amicable
involves monetary awards, the same shall contain the
settlement of a labor dispute.
specific amount awarded as of the date the decision is

rendered.
The settlement of cases on appeal, to be valid and
binding between the parties, shall be made before the

Commissioner or his authorized representative. Under Art. 223, the Commission shall decide ll cases
within twenty calendar days from receipt of the
13.4 Consultation answer of the appellee.

Section 5. Consultation. - The conclusions of a Division on The decision of the Commission shall be final and
any case or matter submitted to it for decision shall be executory after ten calendar days from receipt
reached in consultation before the case is assigned to a thereof by the parties.
member for the writing of the opinion. It shall be
mandatory for the Division to meet for the purpose of 14.1 Reasoned Reversal
the consultation ordained herein.
While it is within respondent Commission's
A certification to this effect signed by the Presiding
competence, as an appellate agency reviewing
Commissioner of the Division shall be issued and a copy
thereof attached to the record of the case and served
decisions of Labor Arbiters, to disagree with and set
upon the parties. aside the latter's findings, it stands to reason that it
should state an acceptable cause therefor. It would
13.5 Dissenting Opinion otherwise be a whimsical, capricious, oppressive,
illogical, unreasonable exercise of quasi-judicial
Section 6. Dissenting Opinion. - Should any member of a prerogative, subject to invalidation by the
Division indicate his intention to write a dissenting extraordinary writ of certiorari.
opinion, he may file the same within the period
prescribed for deciding or resolving the appeal; 14.2 Extended Meaning of “Appeal” under Article
otherwise, such written dissenting opinion shall not be 223; NLRC May Issue Writ of Certiorari
considered part of the records of the case.
15. FINALITY OF DECISION OF THE COMMISSION
13.5 Inhibition AND ENTRY OF JUDGMENT

Section 7. Inhibition. - No motion to inhibit the entire Section 14. Finality Of Decision Of The Commission And
Division of the Commission shall be entertained. Entry Of Judgment. - a) Finality of the Decisions,
However, any Commissioner may inhibit himself from the Resolutions or Orders of the Commission. - Except as
consideration and resolution of any case or matter provided in Section 9 of Rule X, the decisions, resolutions
before the Division and shall so state in writing the legal or orders of the Commission shall become final and
or justifiable grounds therefor. In the event that a executory after ten (10) calendar days from receipt
member inhibits himself, the case shall be raffled by the thereof by the parties.
Executive Clerk or Deputy Executive Clerk to either of the
two (2) remaining Commissioners. In case two (2) b) Entry of Judgment. - Upon the expiration of the ten
Commissioners in a Division inhibit themselves in a case (10) calendar day period provided in paragraph (a) of this
or matter before it, the Chairman shall, as far as



LABOR RELATIONS: Azucena Vol. II
Section, the decision, resolution, or order shall be
entered in a book of entries of judgment. (1) the way to review NLRC decisions is through the
special civil action of certiorari under Rule 65;
The Executive Clerk or Deputy Executive Clerk shall
consider the decision, resolution or order as final and
(2) the jurisdiction over such action belongs to both
executory after sixty (60) calendar days from date of
mailing in the absence of return cards, certifications from
the Supreme Court and the Court of Appeals; but
the post office, or other proof of service to parties.
(3) in line with the doctrine n hierarchy of courts,
16. MOTION FOR RECONSIDERATION the petition should be initially presented to the
lower of the two courts, that is, the Court of
Section 15.MOTIONS FOR RECONSIDERATION. - Motion Appeals.
for reconsideration of any decision, resolution or order of
the Commission shall not be entertained except when 18.2 When and Where to File Petition
based on palpable or patent errors; provided that the
motion is under oath and filed within ten (10) calendar Section 4. When and where petition filed. — The
days from receipt of decision, resolution or order, with petition shall be filed not later than sixty (60) days from
proof of service that a copy of the same has been notice of the judgment, order or resolution. In case a
furnished, within the reglementary period, the adverse motion for reconsideration or new trial is timely filed,
party; and provided further, that only one such motion whether such motion is required or not, the sixty (60)
from the same party shall be entertained. day period shall be counted from notice of the denial of
said motion.
Should a motion for reconsideration be entertained
pursuant to this section, the resolution shall be executory The petition shall be filed in the Supreme Court or, if it
after ten (10) calendar days from receipt thereof. relates to the acts or omissions of a lower court or of a
corporation, board, officer or person, in the Regional
The NLRC Rules does not allow a second motion for Trial Court exercising jurisdiction over the territorial area
reconsideration. The NLRC abuses its discretion as defined by the Supreme Court. It may also be filed in
when it violates its own rules by entertaining such a the Court of Appeals whether or not the same is in aid of
motion. its appellate jurisdiction, or in the Sandiganbayan if it is
in aid of its appellate jurisdiction. If it involves the acts or

omissions of a quasi-judicial agency, unless otherwise
A supplemental motion for reconsideration filed provided by law or these Rules, the petition shall be filed
outside the 10-day appeal period cannot be in and cognizable only by the Court of Appeals.
entertained.
No extension of time to file the petition shall be granted
16.1 Party Who Failed to Appeal on Time From except for compelling reason and in no case exceeding
Decision of Labor Arbiter May Still File Motion for fifteen (15) days. (4a) (Bar Matter No. 803, 21 July 1998;
Reconsideration of NLRC Decision A.M. No. 00-2-03-SC)

It is also an accepted postulate that issues not 18.2a One Day Late
raised in the lower court or the labor arbiter may
not be raised for the first time on appeal. The 60-day period must carefully be observed.

17. CERTIFIED CASES Reglementary periods are indispensable
interdictions against needless delays.
18. APPEAL FROM THE NATIONAL LABOR
RELATIONS COMMISSION 18.2b Certified True Copy of NLRC Decision

18.1 Review by Certiorari by the Court of Appeals; Numerous decisions issued by this Court emphasize
St. Martin case that in appeals under Rule 45 and in original civil
actions for certiorari under Rule 65 in relation to
In a nutshell, the St. Martin precedent states: Rules 46 and 56, what is required to be certified is



LABOR RELATIONS: Azucena Vol. II
the copy of the questioned judgment, final order or virtual refusal to perform the duty enjoined or to
resolution. Since the LA's Decision was not the act at all in contemplation of law.
questioned ruling, it did not have to be certified.
What had to be certified was the NLRC Decision. 18.7 Sole Office of Certiorari

18.3 Effect on NLRC’s Decision The appellate court’s jurisdiction to review a
decision of the NLRC in a petition for certiorari is
Section 10. Effect of Petition for Certiorari on Execution. - confined to issues of jurisdiction or grave abuse of
A petition for certiorari with the Court of Appeals or the discretion. An extraordinary remedy, a petition for
Supreme Court shall not stay the execution of the certiorari is available only and restrictively in truly
assailed decision unless a restraining order is issued by exceptional cases. The sole office of the writ of
said courts.
certiorari is the correction of errors of jurisdiction

including the commission of grave abuse of
18.4 Appeal to Labor Secretary Abolished
discretion amounting to lack or excess of

jurisdiction. It does not include correction of the
Presidential Decree No. 1391 amended Article 223
NLRC’s evaluation of the evidence or of its factual
and abolished appeals to the Secretary of Labor.
findings. Such findings are generally accorded not

only respect but also finality. A party assailing such
18.5 Grounds for Certiorari
findings bears the burden of showing that the

tribunal acted capriciously and whimsically or in
A party may seasonably avail of the special civil
total disregard of evidence material to the
action for certiorari, where the tribunal, board or
controversy, in order that the extraordinary writ of
officer exercising judicial functions has acted
certiorari will lie.
without or in excess of its jurisdiction, or with grave

abuse of discretion, and praying that judgment be
18.8 Appeal from OSEC to CA; St. Martin Ruling
rendered annulling or modifying the proceedings, as
Applies
the law requires, of such tribunal, board or officer.


Though appeals from the NLRC to the Secretary of
In spite of statutory provisions making ‘final’ the
Labor were eliminated, presently there are several
decisions of certain administrative agencies, the
instances in the Labor Code and its implementing
Supreme Court [or Court of Appeals] using the
and related rules where an appeal can be filed with
power of judicial review, has taken cognizance of
the Office of the Secretary of Labor or the Secretary
petitions questioning the decisions where want of
of Labor issues a ruling, to wit:
jurisdiction, grave abuse of discretion, violation of

due process, denial of substantial justice, or
(1) Under the Rules and Regulations Governing
erroneous interpretation of the law were brought
Recruitment and Placement Agencies for Local
to its attention.
Employment 14 dated June 5, 1997 superseding

certain provisions of Book I (Pre-Employment) of
The writ of certiorari will issue to undo those acts,
the implementing rules, the decision of the Regional
and do justice to the aggrieved party.
Director on complaints against agencies is

appealable to the Secretary of Labor within ten (10)
18.6 “Grave Abuse of Discretion”
working days from receipt of a copy of the order, on

specified grounds, whose decision shall be final and
By grave abuse of discretion is meant capricious and
inappealable.
whimsical exercise of judgment as is equivalent to

lack of jurisdiction. Mere abuse of discretion is not
(2) Art. 128 of the Labor Code provides that an
enough. It must be grave abuse of discretion as
order issued by the duly authorized representative
when the power is exercised in an arbitrary or
of the Secretary of Labor in labor standards cases
despotic manner by reason of passion or personal
pursuant to his visitorial and enforcement power
hostility, and must be so patent and so gross as to
amount to an evasion of a positive duty or to a


LABOR RELATIONS: Azucena Vol. II
under said article may be appealed to the Secretary within twenty (20) calendar days from receipt of the
of Labor. records of the case.

Sec. 2 in relation to Section 3 (a), Rule X, Book III (3) Art. 238 provides that the certificate of
(Conditions of Employment) of the implementing rules registration of any legitimate organization shall be
gives the Regional Director the power to order and canceled by the Bureau of Labor Relations if it has
administer compliance with the labor standards reason to believe, after due hearing, that the said
provisions of the Code and other labor legislation. labor organization no longer meets one or more of
Section 4 gives the Secretary the power to review the the requirements prescribed by law.
order of the Regional Director, and the Secretary's

decision shall be final and executory.
Sec. 4, Rule VIII, Book V provides that the decision of the

Regional Office or the Director of the Bureau of Labor
Sec. 1, Rule IV (Appeals) of the Rules on the Disposition
Relations may be appealed within ten (10) days from
of Labor Standards Cases in the Regional Offices dated
receipt thereof by the aggrieved party to the Director of
September 16, 1987 15 provides that the order of the
the Bureau or the Secretary of Labor, as the case may be,
Regional Director in labor standards cases shall be final
whose decision shall be final and executory.
and executory unless appealed to the Secretary of Labor.


Sec. 5, Rule V (Execution) provides that the decisions, (4) Art. 259 provides that any party to a certification
orders or resolutions of the Secretary of Labor and election may appeal the order or results of the
Employment shall become final and executory after ten election as determined by the Med-Arbiter directly
(10) calendar days from receipt of the case records. The to the Secretary of Labor who shall decide the same
filing of a petition for certiorari before the Supreme within fifteen (15) calendar days.
Court shall not stay the execution of the order or
decision unless the aggrieved party secures a temporary Sec. 12, Rule XI, Book V provides that the decision of the
restraining order from the Court within fifteen (15) Med-Arbiter on the petition for certification election may
calendar days from the date of finality of the order or be appealed to the Secretary.
decision or posts a supersedeas bond.
Sec. 15, Rule XI, Book V provides that the decision of the
Sec. 6 of Rule VI (Health and Safety Cases) provides that Secretary of Labor on an appeal from the Med-Arbiter's
the Secretary of Labor at his own initiative or upon the decision on a petition for certification election shall be
request of the employer and/or employee may review final and executory. The implementation of the decision
the order of the Regional Director in occupational health of the Secretary affirming the decision to conduct a
and safety cases. The Secretary's order shall be final and certification election shall not be stayed unless
executory. restrained by the appropriate court.

(2) Art. 236 provides that the decision of the Labor Sec. 15, Rule XII, Book V provides that the decision of the
Relations Division in the regional office denying an Med-Arbiter on the results of the certification election
applicant labor organization, association or group of may be appealed to the Secretary within ten (10) days
unions or workers' application for registration may from receipt by the parties of a copy thereof, whose
be appealed by the applicant union to the Bureau of decision shall be final and executory.

Labor Relations within ten (10) days from receipt of
Sec. 7, Rule XVIII (Administration of Trade Union Funds
notice thereof. and Actions Arising Therefrom), Book V provides that the
decision of the Bureau in complaints filed directly with
Sec. 4, Rule V, Book V (Labor Relations), as amended by said office pertaining to administration of trade union
Department Order No. 9 dated May 1, 1997 16 provides funds may be appealed to the Secretary of Labor within
that the decision of the Regional Office denying the ten (10) days from receipt of the parties of a copy
application for registration of a workers association thereof.
whose place of operation is confined to one regional
jurisdiction, or the Bureau of Labor Relations denying the Sec. 1, Rule XXIV (Execution of Decisions, Awards, or
registration of a federation, national or industry union or Orders), Book V provides that the decision of the
trade union center may be appealed to the Bureau or the Secretary of Labor shall be final and executory after ten
Secretary as the case may be who shall decide the appeal (10) calendar days from receipt thereof by the parties
unless otherwise specifically provided for in Book V.


LABOR RELATIONS: Azucena Vol. II
Forum shopping is the act or attempt to present the
(5) Art. 263 provides that the Secretary of Labor same dispute to different adjudicators in the hope
shall decide or resolve the labor dispute over which of securing a favourable ruling.
he assumed jurisdiction within thirty (30) days from
the date of the assumption of jurisdiction. His In relation thereto, Rule 7, Section 5 of the Rules of
decision shall be final and executory ten (10) Court provides:
calendar days after receipt thereof by the parties.
Certification against forum shopping.—The plaintiff or
18.9 Exhaustion of Administrative Remedies; principal party shall certify under oath in the complaint
Motion for Reconsideration Required or other initiatory pleading asserting a claim for relief, or
in a sworn certification annexed thereto and
simultaneously filed therewith:
The remedy of an aggrieved party in a decision or

resolution of the Secretary of the DOLE is to timely (a) that he has not theretofore commenced any action or
file a motion for reconsideration as a precondition filed any claim involving the same issues in any court,
of or any further or subsequent remedy, and then tribunal or quasi-judicial agency and, to the best of his
seasonably file a special civil action for certiorari knowledge, no such other action or claim is pending
under Rule 65 of the 1997 Rules of Civil Procedure. therein;

Petitioner’s failure to file its motion for (b) if there is such other pending action or claim, a
reconsideration seasonably is fatal to its cause and complete statement of the present status thereof; and
in effect, renders final and executor the Resolution
(c) if he should thereafter learn that the same or similar
of the Secretary of the DOLE.
action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the
A petition for certiorari should be preceded by court wherein his aforesaid complaint or initiatory
exhaustion of administrative remedies. pleading has been filed.

When an administrative remedy is provided by law, Failure to comply with the foregoing requirements
relief must be sought by first exhausting that shall not be curable by mere amendment of the
remedy before seeking judicial intervention. Failure complaint or other initiatory pleading but shall be
to do so is fatal. cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion
18.10 Exceptions and after hearing. The submission of a false
certification or non-compliance with any of the
It has been held that the requirement of a motion undertakings therein shall constitute indirect
for reconsideration may be dispensed with in the contempt of court, without prejudice to the
following instances: (1) when the issue raised is one corresponding administrative and criminal actions.
purely of law; (2) where public interest is involved; If the acts of the party or his counsel clearly
(3) in cases of urgency; and (4) where special constitute willful and deliberate forum shopping,
circumstances warrant immediate or more direct the same shall be ground for summary dismissal
action. On the other hand, among the accepted with prejudice and shall constitute direct contempt,
exceptions to the rule on exhaustion of as well as a cause for administrative sanctions.
administrative remedies are: (1) where the question
in dispute is purely a legal one; and (2) where the 19.1 Certification of Nonforum Shopping Must be
controverted act is patently illegal or was Made by Petitioner
performed without jurisdiction or in excess of
jurisdiction. The certification must be made by petitioner
himself and not by counsel since it is petitioner who
19. CERTIFICATION OF NON-FORUM SHOPPING is in the best position to know whether he has
previously commenced any similar action involving
the same issues in any other tribunal or agency.


LABOR RELATIONS: Azucena Vol. II
(8) when the findings are conclusions without
20. DISPOSITION BY THE COURT OF APPEALS citation of specific evidence on which they are
based;
20.1 Remand
(9) when the facts set forth in the petition as well as
20.2 Dismissal of Appeal in the petitioner's main and reply briefs are not
disputed by the respondent;
20.3 Findings of Facts Generally Final
(10) when the findings of fact are premised on the
As a general rule, the findings of administrative supposed absence of evidence and contradicted by
agencies are accorded not only respect but even the evidence on record; and
finality.
(11) when the Court of Appeals manifestly
The doctrine that the findings of facts of the NLRC overlooked certain relevant facts not disputed by
are binding on this Court if supported by substantial the parties, which, if properly considered, would
evidence is well established. However, in the same justify a different conclusion.
way that the findings of facts unsupported by
substantial and credible evidence do not bind the 20.5 Examples: Some Findings of Facts Reversed
Supreme Court [or Court of Appeals], neither will
we uphold erroneous conclusions of the NLRC when 21. FROM CA TO SC: ONLY QUESTION OF LAW,
we find that the latter committed grave abuse of RULE 45
discretion in reversing the decision of the labor
arbiter, especially if the findings of NLRC based on It must be filed within fifteen (15) days from notice
practically the same facts established in the of the judgment or final order or resolution
hearings before the arbiter are speculative and appealed from, or of the denial of the petitioner’s
conjectural motion for new trial or reconsideration.

20.4 Exceptions: The special civil action of certiorari under Rule 65
cannot be used as a substitute for an appeal under
(1) when the findings are grounded entirely on Rule 45 that the petitioner already lost.
speculation, surmises, or conjectures; ________

(2) when the inference made is manifestly Art. 224. Execution of decisions, orders or awards.
mistaken, absurd, or impossible; a. The Secretary of Labor and Employment or any
Regional Director, the Commission or any Labor
(3) when there is grave abuse of discretion; Arbiter, or Med-Arbiter or Voluntary Arbitrator
may, motu proprio or on motion of any interested
(4) when the judgment is based on a party, issue a writ of execution on a judgment
misapprehension of facts; within five (5) years from the date it becomes final
and executory, requiring a sheriff or a duly
(5) when the findings of facts are conflicting; deputized officer to execute or enforce final
decisions, orders or awards of the Secretary of
(6) when in making its findings, the Court of Appeals Labor and Employment or regional director, the
went beyond the issues of the case, or its findings Commission, the Labor Arbiter or med-arbiter, or
are contrary to the admissions of both the appellant voluntary arbitrators. In any case, it shall be the
and the appellee; duty of the responsible officer to separately furnish
immediately the counsels of record and the parties
(7) when the findings are contrary to the trial court; with copies of said decisions, orders or awards.
Failure to comply with the duty prescribed herein



LABOR RELATIONS: Azucena Vol. II
shall subject such responsible officer to appropriate
administrative sanctions. 1.1 Article 224 is Execution, Not Appeal, Procedure

b. The Secretary of Labor and Employment, and the 1.2 Both Party and Counsel Should Be Notified
Chairman of the Commission may designate special
sheriffs and take any measure under existing laws 2. EXECUTION UPON FINALITY OF DECISION OR
to ensure compliance with their decisions, orders or ORDER
awards and those of the Labor Arbiters and
voluntary arbitrators, including the imposition of Section 1. Execution Upon Finality of Decision or Order. -
administrative fines which shall not be less than a) A writ of execution may be issued motu proprio or on
P500.00 nor more than P10,000.00. (As amended by motion, upon a decision or order that finally disposes of
Section 13, Republic Act No. 6715, March 21, 1989) the action or proceedings after the parties and their
counsels or authorized representatives are furnished
________
with copies of the decision or order in accordance with
these Rules, but only after the expiration of the period to
1. EXECUTION appeal if no appeal has been filed, as shown by the
certificate of finality. If an appeal has been filed, a writ of
A writ of “Execution” is an order to carry out, to execution may be issued when there is an entry of
implement, a final judgment. judgment as provided for in Section 14 of Rule VII.

Under Art. 224, a writ of execution may be issued b) No motion for execution shall be entertained nor a
by the following officials for the final decisions, writ of execution be issued unless the Labor Arbiter or
order or awards promulgated by them: the Commission is in possession of the records of the
case which shall include an entry of judgment if the case

was appealed; except that, as provided for in Section 14
a) Secretary of Labor and Employment; of Rule V and Section 6 of this Rule, and in those cases
where partial execution is allowed by law, the Labor
b) any Regional Director; Arbiter shall retain duplicate original copies of the
decision to be implemented and proof of service thereof
c) the Commission; for the purpose of immediate enforcement.

d) the Labor Arbiter; Section 2. Pre-Execution Conference. - Within two (2)
working days from receipt of a motion for the issuance of
e)the Med-Arbiter; a writ of execution, and subject to Section 1, paragraph
(b) of this Rule, the Labor Arbiter shall schedule a pre-

execution conference or hearing to thresh out matters
f) the Voluntary Arbitrator; or relevant to execution, including the computation of the
award.
g) the Panel of Arbitrators.
Section 3. Form and Contents of a Writ of Execution. -
The writ of execution on a judgment may be issued The writ of execution must be issued in the name of the
motu proprio or on motion of any interested party Republic of the Philippines signed by the Commission or
within five (5) years from the date it becomes final Labor Arbiter requiring the Sheriff to execute the
and executory decision, order, or award of the Commission or Labor
Arbiter, and must contain the dispositive portion thereof,
the amount, if any, to be demanded, and all lawful fees
Execution is done through the regular or special
to be collected from the losing party or any other person
sheriff. But alternatively, the Secretary, the required by law to obey the same.
Commission, any Labor Arbiter, the Regional
Director or the Director of the Bureau of Labor Section 4. Computation During Execution. - Where
Relations in appropriate cases may deputize the further computation of the award in the decision,
Philippine National Police or any law enforcement resolution or order is necessary during the course of the
agencies in the enforcement of final awards, orders execution proceedings, no writ of execution shall be
or decisions. issued until after the computation has been approved by



LABOR RELATIONS: Azucena Vol. II
the Labor Arbiter in an order issued after the parties Supreme Court shall not stay the execution of the
have been duly notified and heard on the matter. assailed decision unless a restraining order is issued by
said courts.
Section 5. Execution of Monetary Judgment. - a)
Immediate payment on demand. - The Sheriff shall Section 11. Resolution of Motion to Quash. - The mere
enforce a monetary judgment by demanding the filing of a motion to quash shall not stay execution
immediate payment of the full amount stated in the writ proceedings. A motion to quash shall be resolved by the
of execution and all lawful fees from the losing party or Labor Arbiter within ten (10) working days from
any other person required by law to obey the same. submission of said motion for resolution.

b) In the event of failure or refusal of the losing party to 3. APPEAL ON THE EXECUTION OF DECISION;
pay the judgment award, the Sheriff shall immediately SUPERVENING EVENTS
proceed against the cash deposit or surety bond posted
by the losing party, if any;
A judgment becomes final and executory by

c) If the bonding company refuses to comply with the
operation of law, not by judicial declaration.
writ of execution, then its president and officers or Accordingly, finality of judgment becomes a fact
authorized representatives shall be cited for contempt, upon the lapse of the reglementary period of
and the bonding company shall be barred from appeal if no appeal is perfected. In such a situation,
transacting business with the Commission; the prevailing party is entitled as a matter of right
to a writ of execution; and issuance thereof is a
d) Should the cash deposit or surety bond be insufficient, ministerial duty, compellable by mandamus.
or in case the surety bond cannot be proceeded against
for any reason, the Sheriff shall, within five (5) days from 4. GENERAL RULE: REGIONAL TRIAL COURT
demand, execute the monetary judgment by levying on
CANNOT ISSUE INJUNCTION AGAINST NLRC
the property, personal and real, of the losing party not
exempt from execution, sufficient to cover the judgment

award, which may be disposed of for value at a public Precedents abound confirming the rule that said
auction to the highest bidder. courts have no labor jurisdiction to act on labor
cases or various incidents arising therefrom,
e) Proceeds of execution shall be deposited with the including the execution of decisions, awards or
Cashier of the concerned Division or Regional Arbitration orders. Jurisdiction to try and adjudicate such cases
Branch, or with an authorized depositary bank. Where pertains exclusively to the proper labor official
payment is made in the form of a check, the same shall concerned under the Department of Labor and
be payable to the Commission. Employment. To hold otherwise is to sanction split

jurisdiction which is obnoxious to the orderly
Section 7. Enforcement of Writ of Execution. - In
executing a decision, resolution or order, the Sheriff, or
administration of justice.
other authorized officer acting as Sheriff of the
Commission, shall be guided strictly by these Rules, and 4.1 Execution Over Property Owned Only by
by the Manual on Execution of Judgment, which shall Judgment Debtor; Remedies of Third Party
form part of these Rules. In the absence of applicable Claimant; The Yupangco Case
rules, the Rules of Court, as amended, shall be applied in
a suppletory manner. A third party whose property has been levied upon
by a sheriff to enforce a decision against a judgment
Section 8. Execution By Motion or By Independent debtor is afforded with several alternative remedies
Action. - A decision or order may be executed on motion
to protect its interests. The third party may avail
within five (5) years from the date it becomes final and
executory. After the lapse of such period, the judgment
himself of alternative remedies cumulatively, and
shall become dormant, and may only be enforced by an one will not preclude the third party from availing
independent action within a period of ten (10) years himself of the other alternative remedies in the
from date of its finality. event he failed in the remedy first availed of.

Section 10. Effect of Petition for Certiorari on Execution. - Thus, a third party may avail himself of the
A petition for certiorari with the Court of Appeals or the following alternative remedies:


LABOR RELATIONS: Azucena Vol. II
Jurisprudence is likewise replete with rulings that
a) File a third party claim with the sheriff of the since the third-party claimant is not one of the
Labor Arbiter, and parties to the action, he could not, strictly speaking,
appeal from the order denying his claim, but should
b) If the third party claim is denied, the third party file a separate reinvindicatory action against the
may appeal the denial to the NLRC. execution creditor or the purchaser of the property
after the sale at public auction, or a complaint for
Even if a third party claim was denied, a third party damages against the bond filed by the judgment
may still file a proper action with a competent court creditor in favor of the sheriff.
to recover ownership of the property illegally seized
by the sheriff. 4.3 Third Party Claim

The right of a third-party claimant to file an Section 12. Third Party Claim. - A third party claim shall
independent action to vindicate his claim of be filed within five (5) days from the last day of posting
ownership over the properties seized is reserved by or publication of the notice of execution sale; otherwise
Section 17 (now 16), Rule 39 of the Rules of Court. the claim shall be forever barred.The third party claimant
shall execute an affidavit stating his title to the property

or right to possession thereof with supporting evidence,
The aforesaid remedies are nevertheless without and shall file the same with the Sheriff and the
prejudice to 'any proper action' that a third-party Commission or Labor Arbiter who issued the writ of
claimant may deem suitable to vindicate 'his claim execution.Upon receipt of the third party claim, all
to the property. proceedings, with respect to the execution of the
property subject of such claim, shall automatically be
Quite obviously, too, this 'proper action' would suspended.The Labor Arbiter who issued the writ may
have for its object the recovery of ownership or require the third party claimant to adduce additional
possession of the property seized by the sheriff, as evidence in support of his third party claim and to post a
well as damages resulting from the allegedly cash or surety bond equivalent to the amount of his
claim, as provided for in Section 6 of Rule VI, without
wrongful seizure and detention thereof despite the
prejudice to the posting by the prevailing party of a
third-party claim. supersedeas bond in an amount equivalent to that
posted by the third party claimant.The Labor Arbiter shall
The remedies above mentioned are cumulative and resolve the propriety of such third party claim within ten
may be resorted to by a third-party claimant (10) working days from submission of said claim for
independent of or separately from and without resolution.
need of availing of the others.
4.4 Simulated Sale, Void Ab Initio
4.2 RTC Injunction against Labor Arbiter or NLRC,
When Allowed A third-party claim on a levied property does not
automatically prevent execution. When a third-
The regional trial court where the reinvindicatory party claim is filed, the sheriff is not bound to
action is filed can issue an injunction or temporary proceed with the levy of the property unless the
restraining order against the execution ordered by a judgment creditor or the latter's agent posts an
labor arbiter or the NLRC. indemnity bond against the claim. Where the bond
is filed, the remedy of the third-party claimant is to
The general rule that no court has the power to file an independent reivindicatory action against the
interfere by injunction with the judgments or judgment creditor or the purchaser of the property
decrees of another court with concurrent or at public auction.
coordinate jurisdiction possessing equal power to ________
grant injunctive relief, applies only when no third-
party claimant is involved. Art. 225. Contempt powers of the Secretary of
Labor. In the exercise of his powers under this Code,
the Secretary of Labor may hold any person in



LABOR RELATIONS: Azucena Vol. II
direct or indirect contempt and impose the collective bargaining or to any other conflict or
appropriate penalties therefor. dispute between legitimate labor unions.
________
"Intra-Union Dispute" refers to any conflict between
Title III and among union members, including grievances
BUREAU OF LABOR RELATIONS arising from any violation of the rights and
conditions of membership, violation of or
Art. 226. Bureau of Labor Relations. The Bureau of disagreement over any provision of the union's
Labor Relations and the Labor Relations Divisions in constitution and by-laws, or disputes arising from
the regional offices of the Department of Labor, chartering or affiliation of union.
shall have original and exclusive authority to act, at
their own initiative or upon request of either or In inter/intra-union dispute the complaint may be
both parties, on all inter-union and intra-union filed by a union or union members; in a “related
conflicts, and all disputes, grievances or problems labor relations dispute” the complaint may be filed
arising from or affecting labor-management by a party-in-interest who is not necessarily a union
relations in all workplaces, whether agricultural or or union member.
non-agricultural, except those arising from the
implementation or interpretation of collective Whether the dispute be of the first or the second
bargaining agreements which shall be the subject of category, the complainant or petition, if it involves
grievance procedure and/or voluntary arbitration. an independent union, a chartered local, or a
worker’s association, shall be filed with the DOLE
The Bureau shall have fifteen (15) working days to Regional Office where the labor organization is
act on labor cases before it, subject to extension by registered. But if the complaint involves a
agreement of the parties. (As amended by Section federation or an industry/national union, it shall be
14, Republic Act No. 6715, March 21, 1989). filed with the BLR itself.
________
2.1 D.O. No. 40-03
1. BLR JURISDICTION
The Order appears to aim the following specific
The Bureau of Labor Relations (BLR) no longer objectives:
handles “all” labor-management disputes; rather,
its functions and jurisdiction are largely confined to 1. to simplify the formation and registration of
union matters, collective bargaining registry, and unions, especially chartered locals
labor education.
2. to simplify and expedite the holding of
Section 16. Bureau of Labor Relations. - The Bureau of certification elections
Labor Relations shall set policies, standards, and
procedures on the registration and supervision of 3. to promote responsible unionism, particularly in
legitimate labor union activities including denial, administration of union funds
cancellation and revocation of labor union permits. It

shall also set policies, standards, and procedure relating
to collective bargaining agreements, and the examination
4. to authorize union merger, consolidation, and
of financial records of accounts of labor organizations to change of name
determine compliance with relevant laws.
5. to authorize deregistration of collective
2. INTER-UNION AND INTRA-UNION DISPUTES; bargaining agreements
D.O. NO. 40-03
2.2 Effect of Pendency
"Inter-Union Dispute" refers to any conflict
between and among legitimate labor unions Section 3. Effects of the filing/pendency of inter/intra-
involving representation questions for purposes of union and other related labor relations disputes. - The



LABOR RELATIONS: Azucena Vol. II
rights, relationships and obligations of the parties
litigants against each other and other parties-in-interest Section 21. Finality of Decision of Bureau/Office of the
prior to the institution of the petition shall continue to Secretary. - The decision of the Bureau or the Office of
remain during the pendency of the petition and until the the Secretary shall become final and executory after ten
date of finality of the decision rendered therein. (10) days from receipt thereof by the parties, unless a
motion for its reconsideration is filed by any party
2.3 Appeal therein within the same period. Only one (1) motion for
reconsideration of the decision of the Bureau or the
Section 16. Appeal. - The decision of the Med-Arbiter and Office of the Secretary in the exercise of their appellate
Regional Director may be appealed to the Bureau by any jurisdiction shall be allowed.
of the parties within ten (10) days from receipt thereof,
copy furnished the opposing party. The decision of the Section 22. Execution of decision. - The decision of the
Bureau Director in the exercise of his/her original Med-Arbiter and Regional Director shall automatically be
jurisdiction may be appealed to the Office of the stayed pending appeal with the Bureau. The decision of
Secretary by any party within the same period, copy the Bureau in the exercise of its appellate jurisdiction
furnished the opposing party. shall be immediately executory upon issuance of entry of
final judgment.
The appeal shall be verified under oath and shall consist
of a memorandum of appeal specifically stating the The decision of the Bureau in the exercise of its original
grounds relied upon by the appellant, with supporting jurisdiction shall automatically be stayed pending appeal
arguments and evidence. with the Office of the Secretary. The decision of the
Office of the Secretary shall be immediately executory
Section 17. Where to file appeal. - The memorandum of upon issuance of entry of final judgment.
appeal shall be filed in the Regional Office or Bureau
where the complaint or petition originated. Within 3. EXTENT OF BLR AUTHORITY
twenty-four (24) hours from receipt of the memorandum
of appeal, the Bureau or Regional Director shall cause the In the interest of industrial peace and for the
transmittal thereof together with the entire records of promotion of the salutary constitutional objectives
the case to the Office of the Secretary or the Bureau, as of social justice and protection to labor, the
the case may be. competence of the governmental entrusted with

supervision over disputes involving employers and
Section 18. Finality of Decision. - Where no appeal is filed
within the ten-day period, the Bureau and Regional
employees as well as "inter-union and intra-union
Director or Med-Arbiter, as the case may be, shall enter conflicts," is broad and expensive.
the finality of the decision in the records of the case and
cause the immediate implementation thereof. 4. KATARUNGANG PAMBARANGAY, NOT
APPLICABLE TO LABOR DISPUTES
Section 19. Period to reply. - A reply to the appeal may
be filed by any party to the complaint or petition within Presidential Decree No. 1508 applies only to courts
ten (10) days from receipt of the memorandum of of justice and not to labor relations commissions or
appeal. The reply shall be filed directly with the Bureau labor arbitrators’ offices.
or the Office of the Secretary, as the case may be.


Section 20. Decision of the Bureau/Office of the
Note: Conciliation-mediation is now done by NCMV
Secretary. - The Bureau Director or the Secretary, as the not BLR.
case may be, shall have twenty (20) days from receipt of
the entire records of the case within which to decide the Instead of simplifying labor proceedings designed at
appeal. The filing of the memorandum of appeal from expeditious settlement or referral to the proper
the decision of the MedArbiter or Regional Director and court or office to decide it finally, the position taken
Bureau Director stays the implementation of the assailed by the petitioner would only duplicate the
decision. conciliation proceedings and unduly delay the
disposition of the labor case.
The Bureau or Office of the Secretary may call the parties
________
to a clarificatory hearing in aid of its appellate
jurisdiction.



LABOR RELATIONS: Azucena Vol. II
Art. 227. Compromise agreements. Any presence of the Regional Director or his duly
compromise settlement, including those involving authorized representative.
labor standard laws, voluntarily agreed upon by the
parties with the assistance of the Bureau or the 3. VALID COMPROMISE AND QUITCLAIM
regional office of the Department of Labor, shall be
final and binding upon the parties. The National The law looks with disfavor upon quitclaims and
Labor Relations Commission or any court, shall not releases by employees who are inveigled or
assume jurisdiction over issues involved therein pressured into signing them by unscrupulous
except in case of non-compliance thereof or if there employers seeking to evade their legal
is prima facie evidence that the settlement was responsibilities. On the other hand, there are
obtained through fraud, misrepresentation, or legitimate waivers that represent a voluntary
coercion. settlement of laborer's claims that should be
________ respected by the courts as the law between the
parties.
1. COMPROMISE AGREEMENTS
Not all waivers and quitclaims are invalid as against
The assistance of the BLR or the regional office of public policy. If the agreement was voluntarily
the DOLE in the execution of a compromise entered into and represents a reasonable
settlement is a basic requirement; without it, there settlement, it is binding on the parties and may not
can be no valid compromise settlement. later be disowned simply because of a change of
mind. It is only where there is clear proof that the
The NLRC or any court shall not assume jurisdiction waiver was wangled from an unsuspecting or
over issues involved therein, except: gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in
a) in case of noncompliance with the compromise to annul the questionable transaction. But where it
agreement, or is shown that the person making the waiver did so
voluntarily, with full understanding of what he was
b) if there is prima facie evidence that the doing, and the consideration for the quitclaim is
settlement was obtained through fraud, credible and reasonable, the transaction must be
misrepresentation, or coercion. recognized as a valid and binding undertaking.

Along the same line, the Court reiterated in 2005: 4. COMPROMISE SHOULD BE DULY AUTHORIZED

There are legitimate waivers that represent a voluntary Section 9. Authority to Bind Party. - Attorneys and other
and reasonable settlement of a worker’s claim which representatives of parties shall have authority to bind
should be respected by the courts as the law between their clients in all matters of procedure; but they cannot,
the parties. Indeed, not all quitclaims are per se invalid or without a special power of attorney or express consent,
against public policy, except (1) where there is clear enter into a compromise agreement with the opposing
proof that the waiver was wangled from an unsuspecting party in full or partial discharge of a client's claim.
or gullible person, or (2) where the terms of settlement
are unconscionable on their faces; in these cases, the law The authority to compromise cannot lightly be
will step in to annul the questionable transactions. Such presumed and should be duly established by
quitclaims are regarded as ineffective to bar the workers evidence.
from claiming the full measure of their legal rights.


5. RULINGS ON COMPROMISE SETTLEMENTS
2. FORMAL REQUIREMENTS OF COMPROMISE
SUMMARIZED
AGREEMENT


6. WHEN TO EFFECT COMPROMISE: FINAL
Compromise agreements involving labor standards
DECISION, NEGOTIABLE?
cases must be reduced to writing and signed in the



LABOR RELATIONS: Azucena Vol. II
A compromise agreement may be effected at any ________
stage of the proceedings and even when there is
already a final and executor judgment. Art. 231. Registry of unions and file of collective
bargaining agreements. The Bureau shall keep a
7. OPTIONS WHEN COMPROMISE AGREEMENTS IS registry of legitimate labor organizations. The
VIOLATED Bureau shall also maintain a file of all collective
bargaining agreements and other related
Under Article 2041 of the Civil Code, should a party agreements and records of settlement of labor
fail or refuse to comply with the terms of a disputes and copies of orders and decisions of
compromise or amicable settlement, the other voluntary arbitrators. The file shall be open and
party could either: (1) enforce the compromise by a accessible to interested parties under conditions
writ of execution, or (2) regard it as rescinded and prescribed by the Secretary of Labor and
so insist upon his original demand. Employment, provided that no specific information
________ submitted in confidence shall be disclosed unless
authorized by the Secretary, or when it is at issue in
[Art. 228. Indorsement of cases to Labor Arbiters. any judicial litigation, or when public interest or
a. Except as provided in paragraph (b) of this Article, national security so requires.
the Labor Arbiter shall entertain only cases
endorsed to him for compulsory arbitration by the Within thirty (30) days from the execution of a
Bureau or by the Regional Director with a written Collective Bargaining Agreement, the parties shall
notice of such indorsement or non-indorsement. submit copies of the same directly to the Bureau or
The indorsement or non-indorsement of the the Regional Offices of the Department of Labor
Regional Director may be appealed to the Bureau and Employment for registration, accompanied with
within ten (10) working days from receipt of the verified proofs of its posting in two conspicuous
notice. places in the place of work and ratification by the
majority of all the workers in the bargaining unit.
b. The parties may, at any time, by mutual The Bureau or Regional Offices shall act upon the
agreement, withdraw a case from the Conciliation application for registration of such Collective
Section and jointly submit it to a Labor Arbiter, Bargaining Agreement within five (5) calendar days
except deadlocks in collective bargaining.](Repealed from receipt thereof. The Regional Offices shall
by Section 16, Batas Pambansa Bilang 130, August furnish the Bureau with a copy of the Collective
21, 1981) Bargaining Agreement within five (5) days from its
________ submission.

Art. 229. Issuance of subpoenas. The Bureau shall The Bureau or Regional Office shall assess the
have the power to require the appearance of any employer for every Collective Bargaining Agreement
person or the production of any paper, document a registration fee of not less than one thousand
or matter relevant to a labor dispute under its pesos (P1,000.00) or in any other amount as may be
jurisdiction, either at the request of any interested deemed appropriate and necessary by the Secretary
party or at its own initiative. of Labor and Employment for the effective and
________ efficient administration of the Voluntary Arbitration
Program. Any amount collected under this provision
Art. 230. Appointment of bureau personnel. The shall accrue to the Special Voluntary Arbitration
Secretary of Labor and Employment may appoint, in Fund.
addition to the present personnel of the Bureau and
the Industrial Relations Divisions, such number of The Bureau shall also maintain a file and shall
examiners and other assistants as may be necessary undertake or assist in the publication of all final
to carry out the purpose of the Code. (As amended decisions, orders and awards of the Secretary of
by Section 15, Republic Act No. 6715, March 21, Labor and Employment, Regional Directors and the
1989)



LABOR RELATIONS: Azucena Vol. II
Commission. (As amended by Section 15, Republic Title IV
Act No. 6715, March 21, 1989) LABOR ORGANIZATIONS
________
Chapter I
REGISTRY OF UNIONS AND CBAs REGISTRATION AND CANCELLATION

The Bureau shall keep a registry of legitimate labor Art. 234. Requirements of Registration. - A
organizations. federation, national union or industry or trade
union center or an independent union shall acquire
The Bureau shall also maintain a file of all Collective legal personality and shall be entitled to the rights
Bargaining Agreements (CBAs) and other related and privileges granted by law to legitimate labor
agreements. organizations upon issuance of the certificate of
________ registration based on the following requirements:

Art. 232. Prohibition on certification election. The (a) Fifty pesos (P50.00) registration fee;
Bureau shall not entertain any petition for
certification election or any other action which may (b) The names of its officers, their addresses, the
disturb the administration of duly registered principal address of the labor organization, the
existing collective bargaining agreements affecting minutes of the organizational meetings and the list
the parties except under Articles 253, 253-A and of the workers who participated in such meetings;
256 of this Code. (As amended by Section 15,
Republic Act No. 6715, March 21, 1989) (c) In case the applicant is an independent union,
________ the names of all its members comprising at least
twenty percent (20%) of all the employees in the
THE CONTRACT-BAR RULE bargaining unit where it seeks to operate;

Article 232 speaks of the contract-bar rule which (d) If the applicant union has been in existence for
means that while a valid and registered CBA is one or more years, copies of its annual financial
subsisting, the Bureau is not allowed to hold an reports; and
election contesting the majority status of the
incumbent union. The existence of the CBA does (e) Four copies of the constitution and by-laws of
not allow, that is, it bars, the holding of the inter- the applicant union, minutes of its adoption or
union electoral contest. The election is legally ratification, and the list of the members who
allowed, says Art. 256, only during the “freedom participated in it. (As amended by Republic Act No.
period” which refers to the last 60 days of the fifth 9481, May 25, 2007)
year of a CBA. ________

The objective of the rule, obviously, is to minimize Art. 234-A. Chartering and Creation of a Local
union “politicking” until the proper time comes. Chapter. - A duly registered federation or national
________ union may directly create a local chapter by issuing
a charter certificate indicating the establishment of
Art. 233. Privileged communication. Information the local chapter. The chapter shall acquire legal
and statements made at conciliation proceedings personality only for purposes of filing a petition for
shall be treated as privileged communication and certification election from the date it was issued a
shall not be used as evidence in the Commission. charter certificate.
Conciliators and similar officials shall not testify in
any court or body regarding any matters taken up at The chapter shall be entitled to all other rights and
conciliation proceedings conducted by them. privileges of a legitimate labor organization only
________ upon the submission of the following documents in
addition to its charter certificate:



LABOR RELATIONS: Azucena Vol. II
________
(a) The names of the chapter's officers, their
addresses, and the principal office of the chapter; [Art. 238. Conditions for registration of federations
and or national unions. No federation or national union
shall be registered to engage in any organization
(b) The chapter's constitution and by-laws: activity in more than one industry in any area or
Provided, That where the chapter's constitution and region, and no federation or national union shall be
by-laws are the same as that of the federation or registered to engage in any organizational activity in
the national union, this fact shall be indicated more than one industry all over the country.
accordingly.
The federation or national union which meets the
The additional supporting requirements shall be requirements and conditions herein prescribed may
certified under oath by the secretary or treasurer of organize and affiliate locals and chapters without
the chapter and attested by its president. registering such locals or chapters with the Bureau.
________
Locals or chapters shall have the same rights and
Art. 235. Action on application. The Bureau shall act privileges as if they were registered in the Bureau,
on all applications for registration within thirty (30) provided that such federation or national union
days from filing. organizes such locals or chapters within its assigned
organizational field of activity as may be prescribed
All requisite documents and papers shall be by the Secretary of Labor.
certified under oath by the secretary or the
treasurer of the organization, as the case may be, The Bureau shall see to it that federations and
and attested to by its president. national unions shall only organize locals and
________ chapters within a specific industry or union.]
(Repealed by Executive Order No. 111, December
Art. 236. Denial of registration; appeal. The decision 24, 1986)
of the Labor Relations Division in the regional office ________
denying registration may be appealed by the
applicant union to the Bureau within ten (10) days 1. LABOR ORGANIZATION: TWO BROAD PURPOSES
from receipt of notice thereof.
________ A “labor organization” is not always a union; it may
be an “association of employees.” And, the purpose
Art. 237. Additional requirements for federations or is not only or necessarily “collective bargaining” but
national unions. Subject to Article 238, if the also dealing with employers concerning terms and
applicant for registration is a federation or a conditions of employment.
national union, it shall, in addition to the
requirements of the preceding Articles, submit the "Labor Organization" refers to any union or
following: association of employees in the private sector
which exists in whole or in part for the purpose of
a. Proof of the affiliation of at least ten (10) locals or collective bargaining, mutual aid, interest,
chapters, each of which must be a duly recognized cooperation, protection, or other lawful purposes.
collective bargaining agent in the establishment or
industry in which it operates, supporting the "Legitimate Labor Organization" refers to any labor
registration of such applicant federation or national organization in the private sector registered or
union; and reported with the Department in accordance with
Rules III and IV of these Rules.
b. The names and addresses of the companies
where the locals or chapters operate and the list of
all the members in each company involved.



LABOR RELATIONS: Azucena Vol. II
"Union" refers to any labor organization in the each of which must be a duly recognized collective
private sector organized for collective bargaining bargaining agent.
and for other legitimate purposes.
“Industry Union” means any group of legitimate
We should note that not every union is labor organizations operating within an identified
“legitimate;” only those properly registered are industry, organized for collective bargaining or for
considered LLO. But non-registration does not mean dealing with employers concerning terms and
it is “illegitimate;” it simply is unregistered and has conditions of employment within an industry, or for
no legal personality. It exists legally but does not participating in the formulation of social and
possess the rights of an LLO. employment policies, standards and programs in
such industry, which is duly registered with the
"Exclusive Bargaining Representative" refers to a Department. D.O. No. 40-03, however, does not
legitimate labor union duly recognized or certified carry this term and this definition, although under
as the sole and exclusive bargaining representative Rule III, Section 2-B, “labor organizations operating
or agent of all the employees in a bargaining unit. within an identified industry may also apply for
registration as a federation or national union within
"Workers' Association" refers to an association of the specified industry by submitting to the Bureau
workers organized for the mutual aid and the same set of documents (as required of
protection of its members or for any legitimate federations and national unions.)”
purpose other than collective bargaining.
“Trade Union Center” means any group of
"Legitimate Workers' Association" refers to an registered national unions or federations organized
association of workers organized for mutual aid and for the mutual aid and protection of its members,
protection of its members or for any legitimate for assisting such members in collective bargaining,
purpose other than collective bargaining registered or for participating in the formulation of social and
with the Department in accordance with Rule III, employment policies, standards and programs,
Sections 2-C and 2-D of these Rules. which is duly registered with the Department.

1.1 Distinction Between “Collective Bargaining” and An “alliance” is an aggregation of unions existing in
“Dealing with Employer” one line of industry, or in a conglomerate, a group
of franchises, a geographical area, or an industrial
To bargain collectively is a right that may be center.
acquired by a labor organization after registering
itself with the Department of Labor and A “company-union” is a labor organization which, in
Employment and after being recognized or certified whole or in part, is employer-controlled or
by DOLE as the exclusive bargaining representative employer-denominated. Article 248(d) prohibits
(EBR) of the employees. being a company union.

Dealing with employer, on the other hand, is a 2.1 Unions at Enterprise Level
generic description of interaction between
employer and employees concerning grievances, A labor union at the enterprise level may be created
wages, work hours and other terms and conditions either by (a) independent registration or (b)
of employment, even if the employee’s group is not chartering. Independent registration is obtained by
registered with the Department of Labor and the union organizers in an enterprise through their
Employment. own action instead of through issuance of a charter
by a federation or national union. An independent
2. CLASSIFICATION OF LABOR ORGANIZATIONS union has a legal personality of its own not derived
from that of a federation.
"National Union/Federation" means any labor
organization with at least ten (10) locals or chapters



LABOR RELATIONS: Azucena Vol. II
"Independent Union" refers to a labor organization Such incorporation does not grant the rights and
operating at the enterprise level that acquired legal privileges of a legitimate labor organization.
personality through independent registration under
Article 234 of the Labor Code and Rule III, Section 2-A of 4. WHERE TO REGISTER
these Rules.


Applications for registration of independent labor
Chartering, on the other hand, takes place when a
unions, chartered locals, and worker’s association
duly registered federation or national union issue a
shall be filed with the Regional Office where the
charter to a union in an enterprise and registers the
applicant principally operates.
creation of the chapter with the Regional Office

where the applicants operates. The union recipient
If the Regional Office denies the application, the
of the charter s called a chapter or local or
denial is appealable to the Bureau and from there
chartered local. Its legal personality is derived from
to the Court of Appeals (not to the Secretary of
the federation/ national union but it may
Labor) if proper grounds exist.
subsequently register itself independently.


5. REGISTRATION REQUIREMENTS
3. REGISTRATION RATIONALE


5.1 Independent Labor Union
A labor organization may be registered or not. If

registered with DOLE, it is considered “legitimate Section 2. Requirements for application. - A. The
labor organization” (LLO). But the reverse us not application for registration of an independent labor
true, that is, a labor organization is not union shall be accompanied by the following documents:
“illegitimate” just because it is unregistered. It is
still lawful organization and can deal with the (a) the name of the applicant labor union, its principal
employer, but it has no legal personality to demand address, the name of its officers and their respective
collective bargaining with the employer. It cannot addresses, approximate number of employees in the
petition for a certification election and cannot hold bargaining unit where it seeks to operate, with a
a legal strike. statement that it is not reported as a chartered local of
any federation or national union;


Registration is merely a condition sine qua non for (b) the minutes of the organizational meeting(s) and the
the acquisition of legal personality by labor list of employees who participated in the said meeting(s);
organizations, associations or unions and the
possession of the rights and privileges granted by (c) the name of all its members comprising at least 20%
law to legitimate labor organizations. of the employees in the bargaining unit;

Such requirement is a valid exercise of the police (d) the annual financial reports if the applicant has been
power, because the activities in which labor in existence for one or more years, unless it has not
organizations, associations and union of workers collected any amount from the members, in which case a
statement to this effect shall be included in the
are engaged affect public interest, which should be
application;
protected.
(e) the applicant's constitution and by-laws, minutes of
3.1 Effect of Registration Under the Corporation its adoption or ratification, and the list of the members
Law who participated in it. The list of ratifying members shall
be dispensed with where the constitution and by-laws
A labor organization may be organized under the was ratified or adopted during the organizational
Corporation Law as a non-stock corporation and meeting. In such a case, the factual circumstances of the
issued a certificate of incorporation by the ratification shall be recorded in the minutes of the
Securities and Exchange Commission. But such organizational meeting(s).
incorporation has only the effect of giving to it
juridical personality before regular courts of justice. 5.2 Federation or National Union



LABOR RELATIONS: Azucena Vol. II
B. The application for registration of federations and (c) the financial reports of the applicant association if it
national unions shall be accompanied by the following has been in existence for one or more years, unless it has
documents: not collected any amount from the members, in which
case a statement to this effect shall be included in the
(a) a statement indicating the name of the applicant application;
labor union, its principal address, the name of its officers
and their respective addresses; (d) the applicant's constitution and by-laws to which
must be attached the names of ratifying members, the
(b) the minutes of the organizational meeting(s) and the minutes of adoption or ratification of the constitution
list of employees who participated in the said meeting(s); and by-laws and the date when ratification was made,
unless ratification was done in the organizational
(c) the annual financial reports if the applicant union has meeting(s), in which case such fact shall be reflected in
been in existence for one or more years, unless it has not the minutes of the organizational meeting(s).
collected any amount from the members, in which case a
statement to this effect shall be included in the 5.4 Chartered Local
application;
5.4a When Does a Chartered Local Become an LLO
(d) the applicant union's constitution and by-laws,

minutes of its adoption or ratification, and the list of the
members who participated in it. The list of ratifying
The acquisition of legal personality cannot be the
members shall be dispensed with where the constitution date of filing of the documents. Section 3
and by-laws was ratified or adopted during the (Department Order No. 9, 1997) was defeating the
organizational meeting(s). In such a case, the factual very purpose of registration of unions which was to
circumstances of the ratification shall be recorded in the block off fly-by-night unions.
minutes of the organizational meeting(s);
5.4b When Does a Chartered Local Acquire Legal
(e) the resolution of affiliation of at least ten (10) Personality under D.O. No. 40, Series of 2003
legitimate labor organizations, whether independent
unions or chartered locals, each of which must be a duly Section 8. Effect of registration. - The labor union or
certified or recognized bargaining agent in the workers' association shall be deemed registered and
establishment where it seeks to operate; and vested with legal personality on the date of issuance of
its certificate of registration or certificate of creation of
(f) the name and addresses of the companies where the
chartered local
affiliates operate and the list of all the members in each

company involved.

The determinative date now is not the date the
Labor organizations operating within an identified required documents were filed but the date the
industry may also apply for registration as a federation or certificate was issued. And the date of issuance is
national union within the specified industry by likely to be the date the documents were filed
submitting to the Bureau the same set of documents. because D.O. No. 40-D-05, supplementing D.O. No.
40-03, requires the Regional Office or the Bureau to
5.3 Worker’s Association either approve or deny the application for
registration “within one (1) day from receipt
C. The application for registration of a workers' thereof.”
association shall be accompanied by the following
documents: 5.4c Recognition by BLR not a Ministerial Duty

(a) the name of the applicant association, its principal
5.4d Chartered Local Has to be Registered;
address, the name of its officers and their respective
addresses;
Requirements

(b) the minutes of the organizational meeting(s) and the 5.4e Registration Requirements for a Chartered
list of members who participated therein; Local



LABOR RELATIONS: Azucena Vol. II
E. A duly-registered federation or national union may represent even the members of other unions as
directly create a chartered local by submitting to the long as they are part of the CBU. This is why the
Regional Office two (2) copies of the following: representative union (also called bargaining agent
or majority union) is called “exclusive bargaining
(a) A charter certificate issued by the federation or
representative” (EBR).
national union indicating the creation or establishment
of the local/chapter;

7. CONSTITUION, BY-LAWS, AND REGULATIONS
(b) The names of the local/chapter’s officers, their
addresses, and the principal office of the local/chapter; Like other voluntary associations, labor unions have
and the right to adopt constitutions, rules, and by-laws
within the scope of the lawful purposes of the union
(c) The local/chapter’s constitution and by-laws, provided and bind their members thereby, provided they are
that where the local/chapter’s constitution and by-laws reasonable, uniform, and not discriminatory, and
is the same as that of the federation or national union, provided they are not contrary to public policy or
this fact shall be indicated accordingly.
the law of the land.

All of the foregoing supporting requirements shall be

certified under oath by the Secretary or the Treasurer of The articles of agreement of a labor union, whether
the local/chapter and attested by its President. (As called a constitution, charter, by-laws, or any other
amended by DO 40-B-03.) name, constitutes a contract between the members
which the courts will enforce, if not immoral or
5.4f Requirements Relaxed contrary to public policy or the law of the land.

The creation of a local does not need subscription A union’s constitution and by-laws govern the
by a minimum number of members. The 20 percent relationship between and among its members. As in
initial membership mentioned in Article 234(c) is the interpretation of contracts, if the terms are
required of an independent union but not of a clear and leave no doubt as to the intentions of the
chartered local. parties, the literal meaning of the stipulation shall
control.
5.5 Union’s Legitimacy not Subject to Collateral
Attack 7.1 Limitation to By-laws

Such legal personality may be questioned only through Under Art. 234(e) it is implied that the members are
an independent petition for cancellation of union the ones to adopt or ratify the union’s constitution
registration in accordance with Rule XIV of these Rules, and by-laws. It being a governing law of the union,
and not by way of collateral attack in petition for the CBL should be democratically ratified.
certification election proceedings under Rule VIII.
7.2 Amendments
6. COLLECTIVE BARGAINING UNIT (CBU)
A union’s constitution and by-laws may be
"Bargaining Unit" refers to a group of employees amended, modified and extended by the duly
sharing mutual interests within a given employer constituted union authorities under the laws of the
unit, comprised of all or less than all of the entire state, In the absence of other requirements, and
body of employees in the employer unit or any subject to vested rights, a union constitution may
specific occupational or geographical grouping be made, changed, unmade, or superseded by a
within such employer unit. majority vote of the members or its constituent
body.
While officers lead and represent a union, a union
represents a CBU. The representative is the union; Under Art. 241(d), major policy questions are to be
the group represented is the CBU. The deliberated upon and decided by secret ballot by
representative union, once determined, will the members.



LABOR RELATIONS: Azucena Vol. II
consolidation shall be in writing stating in clear terms the
8. PROVISIONS COMMON TO THE REGISTRATION reasons for the denial or return.
OF LABOR ORGANIZATIONS AND WORKER’S
ASSOCIATION 8.4 Appeal

8.1 Attestation, Fee, Copies of Documents Section 6. Form of Denial of Application/Return of
Notice; Appeal. - The denial may be appealed to the
Bureau if denial is made by the Regional Office or to the
Section 1. Attestation requirements. - The application for
registration of labor unions and workers' associations, Secretary if denial is made by the Bureau, within ten (10)
notice for change of name, merger, consolidation and days from receipt of such notice, on the ground of grave
affiliation including all the accompanying documents, abuse of discretion or violation of these Rules.
shall be certified under oath by its Secretary or
Section 7. Procedure on appeal. - The memorandum of
Treasurer, as the case may be, and attested to by its
appeal shall be filed with the Regional Office or the
President.
Bureau that issued the denial/return of notice. The

Section 3. Accompanying documents. - One (1) original memorandum of appeal together with the complete
copy and two (2) duplicate copies of all documents records of the application for registration/notice of
accompanying the application or notice shall be change of name, affiliation, merger or consolidation,
submitted to the Regional Office or the Bureau. shall be transmitted by the Regional Office to the Bureau
or by the Bureau to the Office of the Secretary, within

twenty-four (24) hours from receipt of the memorandum
8.2 Action on the Application/Notices of appeal.

Section 4. Action on the application/notice. - The The Bureau or the Office of the Secretary shall decide the
Regional Office or the Bureau, as the case may be, shall appeal within twenty (20) days from receipt of the
act on all applications for registration or notice of change records of the case.
of name, affiliation, merger and consolidation within ten
(10) days from receipt either by: (a) approving the
9. AFFILIATION
application and issuing the certificate of
registration/acknowledging the notice/report; or (b)

denying the application/notice for failure of the applicant An affiliate is an independently registered union
to comply with the requirements for registration/notice. that enters into an agreement of affiliation with a
federation or a national union. It also refers to a
8.3 Denial of Application/Return of Notice chartered local which applies for and is granted an
independent registration but does not disaffiliate
Section 5. Denial of Application/Return of Notice. - from its mother federation or national union.
Where the documents supporting the application for
registration/notice of change of name, affiliation, merger A union, either an independent or a local, affiliates
and consolidation are incomplete or do not contain the with a federation or national union for a number of
required certification and attestation, the Regional Office reasons. The most common ones are to secure
or the Bureau shall, within five (5) days from receipt of support or assistance particularly during the
the application/notice, notify the applicant/labor
formative stage of unionization; or to utilize
organization concerned in writing of the necessary
requirements and complete the same within thirty (30)
expertise in preparing and pursuing bargaining
days from receipt of notice. Where the applicant/labor proposals; or to marshal mind and manpower in the
organization concerned fails to complete the course of a group action such as strike.
requirements within the time prescribed, the application
for registration shall be denied, or the notice of change The relationship between a local or chapter and the
of name, affiliation, merger and consolidation returned, labor federation or national union is generally
without prejudice to filing a new application or notice. understood to be that of agency, where the local is
the principal and the federation the agent.
Section 6. Form of Denial of Application/Return of
Notice; Appeal. - The notice of the Regional Office or the
9.1 Report of Affiliation; Requirements
Bureau denying the application for registration/returning
the notice of change of name, affiliation, merger or



LABOR RELATIONS: Azucena Vol. II
Section 6. Report of Affiliation with federations or Disaffiliation of employees from their mother union
national unions; Where to file. - The report of affiliation and their formation into a new union do not
of an independently registered labor union with a terminate their status as employees of the
federation or national union shall be filed with the corporation, as the employees and members of the
Regional Office that issued its certificate of registration.
local union did not form a new union but merely

Section 7. Requirements of affiliation. - The report of
exercised their right to register their local union.
affiliation of independently registered labor unions with
a federation or national union shall be accompanied by 10.2 When to Disaffiliate
the following documents:
While it is true that a local union is free to serve the
(a) resolution of the labor union's board of directors interest of all its members and enjoys the freedom
approving the affiliation; to disaffiliate, such right to disaffiliate may be
exercised and is thus considered a protected labor
(b) minutes of the general membership meeting activity only when warranted by circumstances.
approving the affiliation;
Generally, a labor union may disaffiliate from the

(c) the total number of members comprising the labor
mother union to form a local or independent union
union and the names of members who approved the only during the 60-day freedom period immediately
affiliation; preceding the expiration of the CBA.

(d) the certificate of affiliation issued by the federation in The “freedom period” refers to the last 60-days of
favor of the independently registered labor union; and the fifth and last year of a CBA.

(e) written notice to the employer concerned if the But even before the onset of the freedom period
affiliating union is the incumbent bargaining agent. (and despite the closed-shop provision in the CBA
between the mother union and management)
10. DISAFFILIATION disaffiliation may still be carried out, but such
disaffiliation must be effected by a majority of the
The sole essence of affiliation is to increase, by members in the bargaining unit.
collective action, the common bargaining power of
local unions for the effective enhancement and This ruling is true ONLY if the contract of affiliation
protection of their interests. Admittedly, there are does not specify the period for possible
times when without succor and support local unions disaffiliation.
may find it hard, unaided by other support groups,
to secure justice for themselves. 10.3 Disaffiliation must be by Majority Decision

Yet the local unions remain the basic units of Article 241(d) applies to disaffiliation, thus, it has to
association, free to serve their own interests subject be decided by the entire membership through
to the restraints imposed by the constitution and secret balloting.
by-laws of the national federation, and free also to
renounce the affiliation upon the terms laid down in 10.4 Disaffiliation: Effect on Legal Status
the agreement which brought such affiliation into
existence. When a union which is not independently
registered disaffiliates from the federation, it is not
To disaffiliate is a right, but to observe the terms of entitled to the rights and privileges granted to a
affiliation is an obligation legitimate labor organization. It cannot file a
petition for certification election.
10.1 Local Union is the Principal, Federation the
Agent 10.5 Disaffiliation: Effect on Union Dues



LABOR RELATIONS: Azucena Vol. II
The obligation of an employee to pay union dues is obligations of the absorbed labor organizations are
coterminous with his affiliation or membership. transferred to the absorbing organization.

A contract between an employer and the parent Where there is consolidation, the legal existence of the
consolidating labor organizations shall cease and a new
organization as bargaining agent for the employees
labor organization is created. The newly created labor
is terminated by the disaffiliation of the local of organization shall acquire all the rights, interests and
which the employees are members. obligations of the consolidating labor organizations.

10.6 Disaffiliation: Effect on Existing CBA; the Consolidation usually occurs between two unions
“Substitutionary” Doctrine that are approximately the same size, whereas
merger often involves a larger union merging with a
The “substitutionary doctrine” provides that the smaller union.
employees cannot revoke the validly executed
collective bargaining contract with their employer Why do unions merge? They merge for reasons
by the simple expedient of changing their similar to those behind corporate mergers.
bargaining agent. The new agent must respect the
contract. First, a small union may merge with a larger union
in order to gain access to greater resources and
11. REVOCATION OF CHARTER expertise.

A federation, national union or workers’ association Second, unions that have traditionally competed
may revoke the charter issued to a local/chapter or with each other for members may merge in order to
branch by serving on the latter a verified notice of eliminate inter-organizational conflicts.
revocation, copy furnished the Bureau, on the
ground of disloyalty or such other grounds as may Third, unions whose members’ skills have been
be specified in the constitution and bylaws of the outmoded by technological and economic changes
federation, national union or workers’ association. may merge with a stronger union in order to
The revocation shall divest the local/chapter of its maintain job security and institutional survival.
legal personality upon receipt of the notice by the
Bureau, unless in the meantime the local/chapter 12.1 Notice of Merger/Consolidation of Labor
has acquired independent registration in Organizations’; Where to File
accordance with these Rules.
Section 8. Notice of Merger/Consolidation of labor
11.1 Effect of Cancellation of Registration of organizations; Where to file. - Notice of merger or
Federation or National Union on Locals/Chapter consolidation of independent labor unions, chartered
locals and workers' associations shall be filed with and
The cancellation of registration of a federation or recorded by the Regional Office that issued the
national union shall operate to divest its certificate of registration/certificate of creation of
local/chapter of their status as legitimate labor chartered local of either the merging or consolidating
labor organization. Notice of merger or consolidation of
organizations, unless the locals/chapters are
federations or national unions shall be filed with and
covered by a duly registered collective bargaining recorded by the Bureau.
agreement.
12.2 Requirements of Notice of
12 MERGER AND CONSOLIDATION Merger/Consolidation

Section 10. Effect of merger or consolidation. - Where The notice of merger of labor organizations shall be
there is a merger of labor organizations, the legal
accompanied by the following documents:
existence of the absorbed labor organization(s) ceases,

while the legal existence of the absorbing labor (a) the minutes of merger convention or general
organization subsists. All the rights, interests and membership meeting(s) of all the merging labor



LABOR RELATIONS: Azucena Vol. II
organizations, with the list of their respective members organization, whether national or local, may be
who approved the same; and cancelled by the Bureau, after due hearing, only on
the grounds specified in Article 239 hereof. (As
(b) the amended constitution and by-laws and minutes of amended by Republic Act No. 9481, May 25, 2007)
its ratification, unless ratification transpired in the
________
merger convention, which fact shall be indicated
accordingly.

Art. 238-A. Effect of a Petition for Cancellation of
12.3 Certificate of Registration Registration. - A petition for cancellation of union
registration shall not suspend the proceedings for
Section 10. Certificate of Registration. - The certificate of certification election nor shall it prevent the filing of
registration issued to merged labor organizations shall a petition for certification election.
bear the registration number of one of the merging labor
organizations as agreed upon by the parties to the In case of cancellation, nothing herein shall restrict
merger. the right of the union to seek just and equitable
remedies in the appropriate courts. (As amended by
The certificate of registration shall indicate the following: Republic Act No. 9481, May 25, 2007)
(a) the new name of the merged labor organization; (b) ________
the fact that it is a merger of two or more labor

organizations; (c) the name of the labor organizations
that were merged; (d) its office or business address; and
Art. 239. Grounds for Cancellation of Union
(e) the date when each of the merging labor Registration. - The following may constitute grounds
organization. for cancellation of union registration:

13. CHANGE OF NAME (a) Misrepresentation, false statement or fraud in
connection with the adoption or ratification of the
Section 3. Notice of change of name of labor constitution and by-laws or amendments thereto,
organizations; Where to file. - The notice for change of the minutes of ratification, and the list of members
name of a registered labor organization shall be filed who took part in the ratification;
with the Bureau or the Regional Office where the
concerned labor organization's certificate of registration (b) Misrepresentation, false statements or fraud in
or certificate of creation of a chartered local was issued. connection with the election of officers, minutes of

the election of officers, and the list of voters;
Section 4. Requirements for notice of change of name. -
The notice for change of name of a labor organization

shall be accompanied by the following documents: (c) Voluntary dissolution by the members. (As
amended by Republic Act No. 9481, May 25, 2007)
(a) proof of approval or ratification of change of name; ________
and
Art. 239-A. Voluntary Cancellation of Registration. -
(b) the amended constitution and by-laws. The registration of a legitimate labor organization
may be cancelled by the organization itself.
13.1 Effect of Change of Name Provided, That at least two-thirds of its general
membership votes, in a meeting duly called for that
The change of name of a labor organization shall purpose to dissolve the organization: Provided,
not affect its legal personality. All rights and further, That an application to cancel registration is
obligations of a labor organization under its old thereafter submitted by the board of the
name shall continue to be exercised by the labor organization, attested to by the president thereof.
organization under its new name. (As amended by Republic Act No. 9481, May 25,
________ 2007)
________
Art. 238. Cancellation of Registration. - The
certificate of registration of any legitimate labor 1. CANCELLATION OF REGISTRATION; GROUNDS



LABOR RELATIONS: Azucena Vol. II
(e) updated list of its chartered locals and affiliates or
While registration is the act that converts a labor member organizations, collective bargaining agreements
organization to a legitimate labor organization, executed and their effectivity period, in the case of
cancellation is the government act that [divests] it federations or national unions, within thirty (30) days
after the close of each fiscal year, as well as the updated
of that status. It thereby reverts to its character
list of their authorized representatives, agents or
prior to the registration. Although it does not cease signatories in the different regions of the country.
to exist or become an unlawful organization, its
juridical personality as well as its statutory rights As understood in these Rules, the fiscal year of a labor
and privileges [are] suspended. It loses entitlement organization shall coincide with the calendar year, unless
to the rights enumerated in Article 242 of the Labor a different period is prescribed in the constitution and
Code. It cannot demand recognition by or by-laws.
bargaining with the employer, cannot file a petition
for certification election, and cannot strike. Failure of the labor organization to submit the
reports mentioned above for five (5) consecutive
1.1 “Cabo” years authorizes the Bureau to institute cancellation
proceedings upon its own initiative or upon
"Cabo" refers to a person or group or persons or to complaint by any party-in-interest.
a labor group which, in the guise of a labor
organization, supplies workers to an employer, with 2. WHO FILES PETITION FOR CANCELLATION
or without any monetary or other consideration
whether in the capacity of an agent of the employer Section 2. Who may file. - Any party-in-interest may
or as an ostensible independent contractor. commence a petition for cancellation of registration,
except in actions involving violations of Article 241,
which can only be commenced by members of the labor
1.2 Administrative Cancellation; the “reportorial
organization concerned.
requirements”

Section 3. Grounds for cancellation. - The following shall
Section 1. Reporting requirements. - It shall be the duty constitute grounds for cancellation of registration of
of every legitimate labor unions and workers associations
labor organizations:
to submit to the Regional Office or the Bureau which

issued its certificate of registration or certificate of (g) commission of any of the acts enumerated under
creation of chartered local, as the case may be, two (2) Article 241 of the Labor Code; provided that no petition
copies of each of the following documents: for cancellation based on this ground may be granted
unless supported by at least thirty (30%) percent of all
(a) any amendment to its constitution and by-laws and the members of the respondent labor organization;
the minutes of adoption or ratification of such

amendments, within thirty (30) days from its adoption or
ratification;
The petition shall be under oath and shall state
clearly and concisely the facts and grounds relied
(b) annual financial reports within thirty (30) days after upon, accompanied by proof of service to the
the close of each fiscal year or calendar year; respondent. But such petition cannot be
entertained in the petition for certification election
(c) updated list of newly-elected officers, together with filed by the union.
the appointive officers or agents who are entrusted with
the handling of funds, within thirty (30) days after each 3. WHERE TO FILE PETITION
regular or special election of officers, or from the
occurrence of any change in the officers of agents of the Section 1. Where to file. - Subject to the requirements of
labor organization or workers association; notice and due process, the registration of any legitimate
independent labor union, chartered local and workers'
(d) updated list of individual members of chartered association may be cancelled by the Regional Director, or
locals, independent unions and workers' associations
in the case of federations, national or industry unions
within thirty (30) days after the close of each fiscal year;
and trade union centers, by the Bureau Director, upon
and



LABOR RELATIONS: Azucena Vol. II
the filing of an independent complaint or petition for nature of the industry and the location of the
cancellation. affiliates.
________
Cancellation orders issued by the Regional Director
are appealable to the BLR. The latter’s decision is Chapter II
final and executor, hence, not appealable to the RIGHTS AND CONDITIONS OF MEMBERSHIP
DOLE Secretary but it may be elevated to the Court
of Appeals by certiorari. Art. 241. Rights and conditions of membership in a
labor organization. The following are the rights and
BLR decisions on cancellation cases that originated conditions of membership in a labor organization:
at the BLR itself may be appealed to the Secretary a. No arbitrary or excessive initiation fees shall be
and, again, by certiorari to the CA. required of the members of a legitimate labor
organization nor shall arbitrary, excessive or
4. PROCEDURE oppressive fine and forfeiture be imposed;

Section 2. Procedure. - The Labor Relations Division of b. The members shall be entitled to full and detailed
the Regional Office shall make a report of the labor reports from their officers and representatives of all
organization's non-compliance and submit the same to
financial transactions as provided for in the
the Bureau for verification with its records. The Bureau
shall send by registered mail with return card to the
constitution and by-laws of the organization;
labor organization concerned, a notice for compliance
indicating the documents it failed to submit and the c. The members shall directly elect their officers,
corresponding period in which they were required, with including those of the national union or federation,
notice to comply with the said reportorial requirements to which they or their union is affiliated, by secret
and to submit proof thereof to the Bureau within ten ballot at intervals of five (5) years. No qualification
(10) days from receipt thereof. requirements for candidacy to any position shall be
imposed other than membership in good standing
Where no response is received by the Bureau within in subject labor organization. The secretary or any
thirty (30) days from the release of the first notice,
other responsible union officer shall furnish the
another notice for compliance shall be made by the
Bureau, with warning that failure on its part to comply
Secretary of Labor and Employment with a list of
with the reportorial requirements within the time the newly-elected officers, together with the
specified shall cause the continuation of the proceedings appointive officers or agents who are entrusted
for the administrative cancellation of its registration. with the handling of funds, within thirty (30)
calendar days after the election of officers or from
Section 3. Publication of notice of cancellation of the occurrence of any change in the list of officers
registration . - Where no response is again received by of the labor organization; (As amended by Section
the Bureau within thirty (30) days from release of the 16, Republic Act No. 6715, March 21, 1989)
second notice, the Bureau shall cause the publication of
the notice of cancellation of registration of the labor
d. The members shall determine by secret ballot,
organization in two (2) newspapers of general
circulation. The Bureau may conduct an investigation
after due deliberation, any question of major policy
within the employer's premises and at the labor affecting the entire membership of the
organization's last known address to verify the latter's organization, unless the nature of the organization
existence. or force majeure renders such secret ballot
________ impractical, in which case, the board of directors of
the organization may make the decision in behalf of
Art. 240. Equity of the incumbent. All existing the general membership;
federations and national unions which meet the
qualifications of a legitimate labor organization and e. No labor organization shall knowingly admit as
none of the grounds for cancellation shall continue members or continue in membership any individual
to maintain their existing affiliates regardless of the who belongs to a subversive organization or who is



LABOR RELATIONS: Azucena Vol. II
engaged directly or indirectly in any subversive after the effectivity of this Act shall automatically
activity; result in the cancellation of union registration of
such labor organization; (As amended by Section 16,
f. No person who has been convicted of a crime Republic Act No. 6715, March 21, 1989)
involving moral turpitude shall be eligible for
election as a union officer or for appointment to k. The officers of any labor organization shall not be
any position in the union; paid any compensation other than the salaries and
expenses due to their positions as specifically
g. No officer, agent or member of a labor provided for in its constitution and by-laws, or in a
organization shall collect any fees, dues, or other written resolution duly authorized by a majority of
contributions in its behalf or make any all the members at a general membership meeting
disbursement of its money or funds unless he is duly called for the purpose. The minutes of the
duly authorized pursuant to its constitution and by- meeting and the list of participants and ballots cast
laws; shall be subject to inspection by the Secretary of
Labor or his duly authorized representatives. Any
h. Every payment of fees, dues or other irregularities in the approval of the resolutions shall
contributions by a member shall be evidenced by a be a ground for impeachment or expulsion from the
receipt signed by the officer or agent making the organization;
collection and entered into the record of the
organization to be kept and maintained for the l. The treasurer of any labor organization and every
purpose; officer thereof who is responsible for the account of
such organization or for the collection,
i. The funds of the organization shall not be applied management, disbursement, custody or control of
for any purpose or object other than those the funds, moneys and other properties of the
expressly provided by its constitution and by-laws organization, shall render to the organization and to
or those expressly authorized by written resolution its members a true and correct account of all
adopted by the majority of the members at a moneys received and paid by him since he assumed
general meeting duly called for the purpose; office or since the last day on which he rendered
such account, and of all bonds, securities and other
j. Every income or revenue of the organization shall properties of the organization entrusted to his
be evidenced by a record showing its source, and custody or under his control. The rendering of such
every expenditure of its funds shall be evidenced by account shall be made:
a receipt from the person to whom the payment is
made, which shall state the date, place and purpose 1. At least once a year within thirty (30) days after
of such payment. Such record or receipt shall form the close of its fiscal year;
part of the financial records of the organization.
2. At such other times as may be required by a
Any action involving the funds of the organization resolution of the majority of the members of the
shall prescribe after three (3) years from the date of organization; and
submission of the annual financial report to the
Department of Labor and Employment or from the 3. Upon vacating his office.
date the same should have been submitted as
required by law, whichever comes earlier: Provided, The account shall be duly audited and verified by
That this provision shall apply only to a legitimate affidavit and a copy thereof shall be furnished the
labor organization which has submitted the Secretary of Labor.
financial report requirements under this Code:
Provided, further, that failure of any labor m. The books of accounts and other records of the
organization to comply with the periodic financial financial activities of any labor organization shall be
reports required by law and such rules and open to inspection by any officer or member
regulations promulgated thereunder six (6) months thereof during office hours;



LABOR RELATIONS: Azucena Vol. II

n. No special assessment or other extraordinary As unionism’s aim is to install industrial democracy,
fees may be levied upon the members of a labor the unions themselves must be democratic. This is a
organization unless authorized by a written rationale behind Article 241.
resolution of a majority of all the members in a
general membership meeting duly called for the To democratize the unions, Article 241 requires that
purpose. The secretary of the organization shall the union officers be elected directly by the
record the minutes of the meeting including the list members through secret ballot and that the major
of all members present, the votes cast, the purpose policy decisions, as a rule, be made by the union
of the special assessment or fees and the recipient members, again, by secret ballot. As in a republic
of such assessment or fees. The record shall be where sovereignty resides in the people, the
attested to by the president. members of the union are the keepers and
dispensers of authority. The governing power is the
o. Other than for mandatory activities under the members, not the officers.
Code, no special assessments, attorney’s fees,
negotiation fees or any other extraordinary fees 2. NATURE OF RELATIONSHIP BETWEEN UNION
may be checked off from any amount due to an AND ITS MEMEBERS
employee without an individual written
authorization duly signed by the employee. The The union has been evolved as an organization of
authorization should specifically state the amount, collective strength for the protection of labor
purpose and beneficiary of the deduction; and against the unjust exactions of capital, but equally
important is the requirement of fair dealing
p. It shall be the duty of any labor organization and between the union and its members, which is
its officers to inform its members on the provisions fiduciary in nature, and arises out of two factors:
of its constitution and by-laws, collective bargaining "one is the degree of dependence of the individual
agreement, the prevailing labor relations system employee on the union organization; the other, a
and all their rights and obligations under existing corollary of the first, is the comprehensive power
labor laws. vested in the union with respect to the individual."
The union may be considered but the agent of its
For this purpose, registered labor organizations may members for the purpose of securing for them fair
assess reasonable dues to finance labor relations and just wages and good working conditions and is
seminars and other labor education activities. subject to the obligation of giving the members as
its principals all information relevant to union and
Any violation of the above rights and conditions of labor matters entrusted to it.
membership shall be a ground for cancellation of
union registration or expulsion of officers from 2.1 Duty of Court to Protect Laborers from Unjust
office, whichever is appropriate. At least thirty Exploitation by Oppressive Employers and Union
percent (30%) of the members of a union or any Leaders
member or members specially concerned may
report such violation to the Bureau. The Bureau Just as this Court has stricken down unjust
shall have the power to hear and decide any exploitation of laborers by oppressive employers, so
reported violation to mete the appropriate penalty. will it strike down their unfair treatment by their
own unworthy leaders. The Constitution enjoins the
Criminal and civil liabilities arising from violations of State to afford protection to labor. Fair dealing is
above rights and conditions of membership shall equally demanded of unions as well as of employers
continue to be under the jurisdiction of ordinary in their dealings with employees.
courts.
________ The union constitution is a covenant between the
union and its members and among the members.
1. DEMOCRATIZATION OF UNIONS



LABOR RELATIONS: Azucena Vol. II
3. RIGHTS OF UNION MEMBERS
To sum up:
The rights and conditions of membership laid down
in Art. 241 may be summarized as follows: Inclusion in the CBU depends on the determination
of its appropriateness under Art. 234 and Art. 255.
(1) Political right – the member’s right to vote and
be voted for, subject to lawful provisions on Inclusion or membership in a union depends on the
qualifications and disqualifications. union’s constitution and by-laws, without prejudice
to Art. 277(c).
(2) Deliberative and decision-making right – the
member’s right to participate in deliberations on Inclusion or coverage in the CBA depends on the
major policy questions and decide them by secret stipulations in the CBA itself.
ballot.
4. ELECTION OF UNION OFFICERS
(3) Rights over money matters – the member’s right
against excessive fees; the right against The officers of the union are elected by the
unauthorized collection of contributions or members in secret ballot voting. The election takes
unauthorized disbursements; the right to require place at intervals of five years which is the term of
adequate records of income and expenses and the office of the union officers including those of a
right of access to financial records; the right to vote national union, federation, or trade union center.
on officers’ compensation; the right to vote on
proposed special assessments and be deducted a The Implementing Rules (Rule XII, Section 1) require
special assessment only with the member’s written the incumbent president to create an election
authorization. committee within 60 days before expiration of the
incumbent officers’ term.
(4) Right to Information – the member’s right to be
informed about the organization’s constitution and If the officers with expired term do not call an
by-laws and the collective bargaining agreement election, the remedy, according to Rule XII, is for at
and about labor laws. least 30% of the members to file a petition with the
DOLE Regional Office.
Although not so denominated, Article 241 of the
Labor Code carries the character of a bill of rights of The member’s frustration over the performance of
union members. the union officers, as well as their fear of a
“fraudulent” election to be held under the latter’s
3.1 Eligibility for Membership supervision, does not justify disregard of the union’s
constitution and by-laws.
When, how, and under what conditions does an
employee become a union member? The answer 4.1 Eligibility of Voters
depends on the union’s constitution and by-laws
inasmuch as Article 249 gives a labor organization Only members of the union can take part in the
the right to prescribe its own rules for acquisition or election of union officers.
retention of membership. Nonetheless, under Art.
277 an employee is already qualified for union Ember in good standing is any person who has
membership starting on his first day of service. fulfilled the requirements for membership in the
union and who has neither voluntarily withdrawn
Qualifying for union membership does not from membership nor been expelled or suspended
necessarily mean inclusion in the coverage of the from membership after appropriate proceedings
CBA. The reverse is equally true: membership in the consistent with the lawful provisions of the union’s
CBU does not automatically mean membership in constitution and by-laws.
the union.



LABOR RELATIONS: Azucena Vol. II
A labor organization may prescribe reasonable rules evidence, within five (5) days after the close of the
and regulations with respect to voting eligibility. election proceedings. If not recorded in the minutes and
formalized within the prescribed period, the protest shall
A labor organization may condition the exercise of be deemed dropped.
the right to vote on the payment of dues, since
paying dues is a basic obligation of membership. 5. ACTION AGAINST UNION OFFICERS
However, this rule is subject to two qualifications in
that (a) any rule denying dues-delinquent members A union officer, after his election, may not be
the right to vote must be applied uniformly; and (b) expelled from the union for past malfeasance or
members must be afforded a reasonable misfeasance. To do so would nullify the choice
opportunity to pay dues, including a grace period made by the union members.
during which dues may be paid without any loss of
rights. The remedy against erring union officers is not
referendum but union expulsion, i.e., to expel them
Submission of the employees names with the BLR as from the Union.
qualified members of the union is not a condition
sine qua non to enable said members to vote in the It is the better part of conventional or pragmatic
election of union's officers. solutions in cases of this nature, absent overriding
considerations to the contrary, to respect the will of
4.2 Union Officers Must Be an Employee the majority of the workers who voted in the
elections. Although decreed under a different
(f) No person who is not an employee or worker of the setting, it is apropos to recall the ruling that where
company or establishment where an independently the people have elected a man to office, it must be
registered union, affiliate, local or chapter of a labor assumed that they did this with knowledge of his
federation or national union operates shall henceforth be life and character, and that they disregarded or
elected or appointed as an officer of such union, affiliate, forgave his faults or misconduct, if he had been
local or chapter. guilty of any.

In short, one should be employed in the company to 6. DUE PROCESS IN IMPEACHMENT
qualify as officer of a union in that company.
7. EXPULSION OF MEMBER
4.3 Disqualification of Union Officers
Just as an officer is entitled to due process, so does
"Moral turpitude" has been defines as an act of a member. In a case, the Court explicitly ruled that a
baseness, vileness, or depravity in the private and member of a labor union may be expelled only for a
social duties which a man owes his fellow men, or valid cause and by following the procedure outlined
to society in general, contrary to the accepted and in the constitution and by-laws of the union.
customary rule of right and duty between man and
man or conduct contrary to justice, honesty, Expulsion of a member for arbitrary or impetuous
modesty, or good morals. reason may amount to unfair labor practice by the
union.
4.4 Union Election Protest: Proclamation of Winners
8. RELIEF WITHIN THE UNION
Section 13. Protest; when perfected. - Any party-in-
interest may file a protest based on the conduct or Generally, redress must first be sought within the
mechanics of the election. Such protests shall be
union itself in accordance with its constitution and
recorded in the minutes of the election proceedings.
Protests not so raised are deemed waived.
by-laws.

The protesting party must formalize its protest with the If intra-union remedies have failed to correct any
Med-Arbiter, with specific grounds, arguments and violations of the internal labor organization



LABOR RELATIONS: Azucena Vol. II
procedures, a case can be filed with the Bureau of
Labor Relations, which is authorized to hear and A check-off is a method of deducting from an
decide cases of this nature. employee’s pay at prescribed period, the amounts
due the union for fees, fines, or assessments. The
8.1 Exceptions right of a union to collect union dues is recognized
under Article 277(a).
Where exhaustion of remedies within the union
itself would practically amount to a denial of justice, 11.1 Assessments, like dues, may also be checked
or would be illusory or vain, it will not be insisted off
upon, particularly where property rights of the
members are involved, as a condition to the right to Dues are defined as payments to meet the union’s
invoke the aid of a court. general and current obligations. The payment must
be regular, periodic, and uniform. Payments used
9. CONSEQUENCES OF VIOLATION OF RIGHTS for a special purpose, especially if required only for
a limited time, are regarded as assessment.
If the conditions of membership, or the right of the
members, are violated, the violation may result in ART. 241. Rights and conditions of membership in a labor
the cancellation of the union registration or the organization. — The following are the rights and
expulsion of the culpable officers. conditions of membership in a labor organization.

(o) Other than for mandatory activities under the Code,
Section 4. Actions arising from Article 241. - Any
no special assessment, attorney's fees, negotiation fees
complaint or petition with allegations of mishandling,
or any other extraordinary fees may be checked off from
misappropriation or non-accounting of funds in violation
of Article 241 shall be treated as an intra-union dispute. any amount due an employee without an individual
It shall be heard and resolved by the Med-Arbiter written authorization duly signed by an employee. The
pursuant to the provisions of Rule XI. authorization should specifically state the amount,
purpose and beneficiary of the deduction.


9.1 Exception: When 30% Not Required
Attorney's fees may not be deducted or checked off

from any amount due to an employee without his
When such violation directly affects only one or two
written consent except for mandatory activities
members, then only one or two members would be
under the Code.
enough to report such violation.


A mandatory activity has been defined as a judicial
It states that a report of a violation of rights and
process of settling dispute laid down by the law. An
conditions of membership in a labor organization
amicable settlement entered into by the
may be made by "(a)t least thirty percent (30%) of
management and the union is not a mandatory
all the members of a union or any member or
activity under the Code. Moreover, the law
members specially concerned.
explicitly requires the individual written

authorization of each employee concerned, to make
10. VISITORIAL POWER
the deduction of attorney’s fees valid.


Article 247 authorizes the Secretary of Labor and
Deductions for union service fee are authorized by
Employment or his duly authorized representative
law and do not require individual check-off
to inquire into the financial activities of any labor
authorizations.
organization on the basis of a complaint under oath,

supported by 20 percent of the membership in
Notwithstanding its "compulsory" nature,
order to determine compliance or noncompliance
“compulsory arbitration” is not the "mandatory
with the laws and to aid in the prosecution of any
activity" under the Code which dispenses with
violation thereof.
individual written authorizations for check-offs.


11. CHECK-OFF AND ASSESSMENTS


LABOR RELATIONS: Azucena Vol. II
(1) Requirements – The failure of the Union to comply rendered by union officers, consultants and others,
strictly with the requirements set out by the law should be supported by the regular union dues, there
invalidates the questioned special assessment. being no showing that the latter are not sufficient to
Substantial compliance is not enough in view of the fact cover the same.
that the special assessment will diminish the
compensation of the union members. Their express (5) Article 222(b) of the Labor Code, “similar charge” –
consent is required, and this consent must be obtained in The last stated purpose is contended by petitioners to
accordance with the steps outlined by law, which must fall under the coverage of Article 222 (b) of the Labor
be followed to the letter. No shortcuts are allowed. Code. The contention is impressed with merit. Article 222
(b) prohibits attorney's fees, negotiations fees and
It submitted only minutes of the local membership similar charges arising out of the conclusion of a
meetings when what is required is a written resolution collective bargaining agreement from being imposed on
adopted at the general meeting. Worse still, the minutes any individual union member. The collection of the
of three of those local meetings held were recorded by a special assessment partly for the payment for services
union director and not by the union secretary. The rendered by union officers, consultants and others may
minutes submitted to the Company contained no list of not be in the category of "attorney's fees or negotiations
the members present and no record of the votes cast. fees." But there is no question that it is an exaction
Since it is quite evident that the Union did not comply which falls within the category of a "similar charge," and,
with the law at every turn, the only conclusion that may therefore, within the coverage of the prohibition in the
be made therefrom is that there was no valid levy of the aforementioned article.
special assessment pursuant to paragraph (n) of Article
241 of the Labor Code. (6) Unlimited discretion of union president, disallowed –
There is an additional proviso giving the Union President
(2) Effects of withdrawal of authorizations – Paragraph unlimited discretion to allocate the proceeds of the
(o) on the other hand requires an individual written special assessment. Such a proviso may open the door to
authorization duly signed by every employee in order abuse by the officers of the Union considering that the
that a special assessment may be validly checked-off. total amount of the special assessment is quite
Even assuming that the special assessment was validly considerable — P1,027,694.33 collected from those
levied pursuant to paragraph (n), and granting that union members who originally authorized the deduction,
individual written authorizations were obtained by the and P1,267,863.39 from those who did not authorize the
Union, nevertheless there can be no valid check-off same, or subsequently retracted their authorizations.
considering that the majority of the union members had
already withdrawn their individual authorizations. A The Court, therefore, stakes down the questioned special
withdrawal of individual authorizations is equivalent to assessment for being a violation of Article 241,
no authorization at all. paragraphs (n) and (o), and Article 222 (b) of the Labor
Code.
(3) Forms of disauthorization – The Union points out,
however, that said disauthorizations are not valid for 11.2 Three Requisites to Collect Special Assessment
being collective in form, as they are "mere bunches of
randomly procured signatures, under loose sheets of Article 241 speaks of three (3) requisites that must
paper." The contention deserves no merit for the simple
be complied with in order that the special
reason that the documents containing the
disauthorizations have the signatures of the union
assessment for Union's incidental expenses,
members. The Court finds these retractions to be valid. attorney's fees and representation expenses, as
There is nothing in the law which requires that the stipulated in Article XII of the CBA, be valid and
disauthorization must be in individual form. upheld namely: 1) authorization by a written
resolution of the majority of all the members at the
(4) Purpose of the special assessment – Of the stated general membership meeting duly called for the
purposes of the special assessment, as embodied in the purpose; (2) secretary's record of the minutes of the
board resolution of the Union, only the collection of a meeting; and (3) individual written authorization for
special fund for labor and education research is check-off duly signed by the employee concerned.
mandated, as correctly pointed out by the Union. The

two other purposes, namely, the purchase of vehicles
and other items for the benefit of the union officers and
11.3 Check-off of Agency Fee
the general membership, and the payment of services



LABOR RELATIONS: Azucena Vol. II
This is the amount, equivalent to union dues, which by the employer or certified as the sole and
a non-union member pays to the union because he exclusive bargaining representative of the
benefits from the CBA negotiated by the union. In employees in the bargaining unit, or within sixty
negotiating the CBA the union served as the (60) calendar days before the expiration of the
employee’s agent. Check-off of agency fee is existing collective bargaining agreement, or during
allowed under Art. 248(e). the collective bargaining negotiation;

11.4 Illegal Check-off Ground for cancellation d. To own property, real or personal, for the use
and benefit of the labor organization and its
11.5 Employer’s Liability in Check-off Arrangement members;

Check-offs in truth impose an extra burden on the e. To sue and be sued in its registered name; and
employer in the form of additional administrative
and bookkeeping costs. It is a burden assumed by f. To undertake all other activities designed to
management at the instance of the union and for its benefit the organization and its members, including
benefit, in order to facilitate the collection of dues cooperative, housing, welfare and other projects
necessary for the latter's life and sustenance. But not contrary to law.
the obligation to pay union dues and agency fees
obviously devolves not upon the employer, but the Notwithstanding any provision of a general or
individual employee. It is a personal obligation not special law to the contrary, the income and the
demandable from the employer upon default or properties of legitimate labor organizations,
refusal of the employee to consent to a check-off. including grants, endowments, gifts, donations and
The only obligation of the employer under a check- contributions they may receive from fraternal and
off is to effect the deductions and remit the similar organizations, local or foreign, which are
collections to the union. actually, directly and exclusively used for their
lawful purposes, shall be free from taxes, duties and
11.6 Jurisdiction Over Check-off Disputes other assessments. The exemptions provided herein
may be withdrawn only by a special law expressly
The Regional Director of DOLE, not the labor repealing this provision. (As amended by Section 17,
arbiter, has jurisdiction over check-off disputes. Republic Act No. 6715, March 21, 1989)
________ ________

Chapter III Art. 242-A. Reportorial Requirements. - The
RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS following are documents required to be submitted
to the Bureau by the legitimate labor organization
Art. 242. Rights of legitimate labor organizations. A concerned:
legitimate labor organization shall have the right:
a. To act as the representative of its members for (a) Its constitution and by-laws, or amendments
the purpose of collective bargaining; thereto, the minutes of ratification, and the list of
members who took part in the ratification of the
b. To be certified as the exclusive representative of constitution and by-laws within thirty (30) days
all the employees in an appropriate bargaining unit from adoption or ratification of the constitution and
for purposes of collective bargaining; by-lam or amendments thereto;

c. To be furnished by the employer, upon written (b) Its list of officers, minutes of the election of
request, with its annual audited financial officers, and list of voters within thirty (30) days
statements, including the balance sheet and the from election;
profit and loss statement, within thirty (30)
calendar days from the date of receipt of the (c) Its annual financial report within thirty (30) days
request, after the union has been duly recognized after the close of every fiscal year; and



LABOR RELATIONS: Azucena Vol. II

(d) Its list of members at least once a year or 3. COMPROMISE BINDING UPON MINORITY
whenever required by the Bureau. MEMBERS OF UNION; EXCEPTION

Failure to comply with the above requirements shall It is an accepted rule under our laws that the will of the
not be a ground for cancellation of union majority should prevail over the minority and that the
registration but shall subject the erring officers or action taken by petitioners as minority members of the
members to suspension, expulsion from Union is contrary to the policy of the Magna Carta of
Labor, which promotes the settlement of differences
membership, or any appropriate penalty. (As
between management and labor by mutual agreement,
amended by Republic Act No. 9481, May 25, 2007) and that if said action were tolerated, no employer
________ would ever enter into any compromise agreement for
the minority members of the Union will always dishonor
1. NOT ANY L.L.O. the terms of the agreement and demand for better
terms.
The first three rights mentioned in this article do
not pertain to just about any union but only to the 4. COMPROMISE OF MONEY CLAIMS
union that has been selected as the bargaining
representative of the employees in the bargaining Money claims due to laborers cannot be the object
unit. This article must be read in relation to Article of settlement or compromise effected by a union or
255. counsel without the specific individual consent of
each laborer concerned. The beneficiaries are the
2. RIGHTS OF UNION TO REPRESENT ITS MEMBERS individual complainants themselves. The union to
which they belong can only assist them but cannot
It is the function of a labor union to represent its decide for them. Awards in favor of laborers after
members against the employer’s unfair labor long years of litigation must be attended to with
practices. It can file in their behalf without the mutual openness and in the best of faith. Only thus
cumbersome procedure of joining each and every can we really give meaning to the constitutional
member as a separate party. mandate of giving laborers maximum protection
and security.
A labor union has the requisite personality to sue on
behalf of its members for their individual money Under the philosophy of collective responsibility, an
claims. It would be an unwarranted impairment of employer who bargains in good faith should be entitled
the right to self-organization if such collective to rely upon the promises and agreements of the union
entities would be barred from instituting an action representatives with whom he must deal under the
compulsion of law and contract. The collective bargaining
in their representative capacity.
process should be carried on between parties who can
mutually respect and rely upon the authority of each
2.1 Members Doubting Their Union other." Where, however, collective bargaining process is
not involved, and what is at stake are back wages already
A labor union is one such party authorized to earned by the individual workers by way of overtime,
represent its members under Article 242(a) of the premium and differential pay, and final judgment has
Labor Code which provides that a union may act as been rendered in their favor, the present case, the real
the representative of its members for the purpose parties in interest with direct material interest, as against
of collective bargaining. This authority includes the the union which has only served as a vehicle for
power to represent its members for the purpose of collective action to enforce their just claims, are the
individual workers themselves. Authority of the union to
enforcing the provisions of the CBA.
waive or quitclaim all or part of the judgment award in
favor of the individual workers cannot be lightly
The intervention may be allowed when there is a presumed but must be expressly granted, and the
suggestion of fraud or collusion or that the employer, as judgment debtor, must deal in all good faith
representative will not act in good faith for the with the union as the agent of the individual workers.
protection of all interests represented by the union. The Court in turn should certainly verify and assure itself



LABOR RELATIONS: Azucena Vol. II
of the fact and extent of the authority of the union organizations for their mutual aid and protection.
leadership to execute any compromise or settlement of (As amended by Batas Pambansa Bilang 70, May 1,
the judgment on behalf of the individual workers who 1980).
are the real judgment creditors. ________

5. RIGHT TO BE FURNISHED WITH FINANCIAL 1. ORGANIZING IN GENERAL
STATEMENT
The rights to organize and to bargain, in a general
To better equip the union in preparing for or in sense, are given not exclusively to employees. Even
negotiating with the employer, the law gives it the workers who are not employees of any particular
right to be furnished with the employer’s audited employer may form their organizations to protect
financial statements. There are four points in time their interests.
when the union may ask in writing for these
statements: Under Art. 243 of this Code, the right to organize
refers also to forming, joining or assisting a labor
(1) after the union has been recognized by the organization. Connected to Art. 246 this right
employer as sole bargaining representative of the carries with it the right to engage in group action,
employees in the bargaining unit; or provided it is peaceful, to support the organization’s
objective which is not necessarily bargaining but,
(2) after the union is certified by DOLE as such sole simply, to aid and protect its members. But this kind
bargaining representative; or of group action must be differentiated from strike
which, because it is work stoppage, must observe
(3) within the last 60 days of the life of a CBA; or certain regulation; otherwise, the strike may be
declared illegal and its leaders may be thrown out
(4) during the collective bargaining negotiation. of their jobs.

The audited statements, including the balance sheet 1.1 Coverage of the Right to Organize; Exceptions
and the profit and loss statement, should be
provided by the employer within 30 calendar days The right to form, join or assist a labor organization
after receipt of the union’s request. is granted to all kinds of employees of all kinds of
employers—public or private, profit or non-profit,
6. RIGHT TO COLLECT DUES commercial or religious. Their usual form of
________ organization is a union and the usual purpose is
collective bargaining with their employers.

But the seemingly all-inclusive coverage of “all
Title V persons” in Article 243 actually admits exceptions.
COVERAGE Under Art. 245, for instance, managerial employees,
regardless of the kind of organization where they
Article 243. Coverage and employees’ right to self- are employed, may not join, assist or form any labor
organization. – All persons employed in commercial, organization, meaning a labor union.
industrial and agricultural enterprises and in
religious, charitable, medical, or educational Accordingly, managerial employees cannot, in the
institutions, whether operating for profit or not, absence of an agreement to the contrary, be
shall have the right to self-organization and to form, allowed to share in the concessions obtained by the
join, or assist labor organizations of their own labor union through collective negotiation.
choosing for purposes of collective bargaining. Otherwise, they would be exposed to the
Ambulant, intermittent and itinerant workers, self- temptation of colluding with the union during the
employed people, rural workers and those without negotiations to the detriment of the employer.
any definite employers may form labor However, there is nothing to prevent the employer



LABOR RELATIONS: Azucena Vol. II
from granting benefits to managerial employees cooperative. Their share capital earn limited
equal to or higher than those afforded to union interests. They enjoy special privileges as exemption
members. from income tax and sales taxes, preferential right
to supply their products to State agencies and even
Supervisors are allowed to organize, but they exemption from minimum wage laws.
cannot for, join or assist a rank-and-file union.
An employee of such a cooperative who is a
2. RIGHT TO ORGANIZE CANNOT BE BARGAINED member and co-owner thereof cannot invoke the
AWAY right to collective bargaining for certainly an owner
cannot bargain with himself or his co-owners.
Although we have upheld the validity of the CBA as
the law among the parties, its provisions cannot However, in so far as it involves cooperatives with
override what is expressly provided by law that only employees who are not members or co-owners
managerial employees are ineligible to join, assist or thereof, certainly such employees are entitled to
form any labor organization. Therefore, regardless exercise the rights of all workers to organization,
of the challenged employees' designations, whether collective bargaining, negotiations and others as are
they are employed as Supervisors or in the enshrined in the Constitution and existing laws of
confidential payrolls, if the nature of their job does the country.
not fall under the definition of "managerial" as
defined in the Labor Code, they are eligible to be In another case, the court clarified that it is the fact
members of the bargaining unit and to vote in the of ownership of the cooperative, and not
certification election. Their right to self-organization involvement in the management thereof, which
must be upheld in the absence of an express disqualifies a member from joining any labor
provision of law to the contrary. It cannot be organization within the cooperative. Thus,
curtailed by a collective bargaining agreement. irrespective of the degree of their participation in
the actual management of the cooperative, all
3. EMPLOYEES OF NONPROFIT INSTITUTIONS members thereof cannot form, assist or join a labor
organization for the purpose of collective
Under Article 243 of the Labor Code, the rank-and- bargaining.
file employees of non-profit medical institutions are
permitted to form, organize or join labor unions of But member-employees of a cooperative may
their choice for purposes of collective bargaining. If withdraw as members of the cooperative in order
the union has complied with the requisites provided to join a labor union. Membership in a cooperative
by law for calling a certification election, it is is voluntary; inherent in it is the right not to join.
incumbent upon the DOLE Regional Director to
conduct such certification election to ascertain the 4.1 Exception to Exception: Association, not Union
bargaining representative of the hospital
employees. While the members of a cooperative who are also
its employees cannot unionize for bargaining
4. EXCEPTION: EMPLOYEE-MEMBERS OF A purposes, the law does not prohibit them from
COOPERATIVE forming an association for their mutual aid and
protection as employees.
A cooperative is by its nature different from an
ordinary business concern being run either, by D.O. No. 40-03 allows and defines a “workers’
persons, partnerships or corporations. Its owners association” as one which is organized for the
and/or members are the ones who run and operate mutual aid and protection of its members or for any
the business while the others are its employees. As legitimate purpose other than collective bargaining.
above stated, irrespective of the name of shares
owned by its members they are entitled to cast one 5. EXCEPTION: INTERNATIONAL ORGANIZATIONS
vote each in deciding upon the affair of the



LABOR RELATIONS: Azucena Vol. II
A certification election cannot be conducted in an (3) Labor’s Basic Rights Remain—The immunity of
international organization which the Philippine International Catholic Migration Commission (ICMC) and
Government has granted immunity from local the International Rice Research Institution (IRRI) from
jurisdiction. local jurisdiction by no means deprives labor of its basic
rights, which are guaranteed by Article II, Section 18,

Article III, Section 8, and Article XIII, Section 3, of the
The grant of such immunity is a political question 1987 Constitution; and implemented by Articles 243 and
whose resolution by the executive branch of 246 of the Labor Code.
government is conclusive upon the courts
(4) Certification Election Barred by Immunity—The
(1) “International Organization” and “Specialized immunity granted being "from every form of legal
Agencies”—The term "international organization" is process except in so far as in any particular case they
generally used to describe an organization set up by have expressly waived their immunity," it is inaccurate to
agreement between two or more states. Under state that a certification election is beyond the scope of
contemporary international law, such organizations are that immunity for the reason that it is not a suit against
endowed with some degree of international legal ICMC. A certification election cannot be viewed as an
personality such that they are capable of exercising independent or isolated process. It could trigger off a
specific rights, duties and powers. They are organized series of events in the collective bargaining process
mainly as a means for conducting general international together with related incidents and/or concerted
business in which the member states have an interest. activities, which could inevitably involve ICMC in the
The United Nations, for instance, is an international "legal process," which includes “any penal, civil and
organization dedicated to the propagation of world administrative proceedings.” The eventuality of Court
peace. "Specialized agencies" are international litigation is neither remote and from which international
organizations having functions in particular fields. The organizations are precisely shielded to safeguard them
term appears in Articles 57 and 63 of the Charter of the from the disruption of their functions. Clauses on
United Nations. jurisdictional immunity are said to be standard provisions
in the constitutions of international Organizations. “The
(2) Principles Underlying the Grant of International immunity covers the organization concerned, its property
Immunities to International Organizations—There are and its assets...”
basically three propositions underlying the grant of
international immunities to international organizations. 5.1 Waiver of Immunity
These principles, contained in the ILO Memorandum are
stated thus: 1) international institutions should have a
Waiver of its immunity is discretionary to IRRI.
status which protects them against control or
interference by any one government in the performance
Without such express waiver the NLRC or its labor
of functions for the effective discharge of which they are arbiters have no jurisdiction over IRRI even in cases
responsible to democratically constituted international of alleged illegal dismissal of any of its employees.
bodies in which all the nations concerned are
represented; 2) no country should derive any national 5.2 Foreign Workers
financial advantage by levying fiscal charges on common
international funds; and 3) the international organization Foreigners, whether natural or juridical, as well as foreign
should, as a collectivity of States members, be accorded corporations are strictly prohibited from engaging
the facilities for the conduct of its official business directly or indirectly in all forms of trade union activities.
customarily extended to each other by its individual However, aliens working in the country with valid work
member States. The theory behind all three propositions permits may exercise the right to self-organization if they
is said to be essentially institutional in character. "It is are nationals of a country that grants the same or similar
not concerned with the status, dignity or privileges of rights to Filipino workers. (Art. 269)
individuals, but with the elements of functional
independence necessary to free international institutions 6. EXCEPTION: RELIGIOUS OBJECTORS; IGLESIA NI
from national control and to enable them to discharge CRISTO MEMBERS
their responsibilities impartially on behalf of all their

members. The raison d'etre for these immunities is the
assurance of unimpeded performance of their functions
Under the Industrial Peace Act (1953) which
by the agencies concerned. preceded the Labor Code (and even under the
present Code) the employer and the union could



LABOR RELATIONS: Azucena Vol. II
enter into a “closed shop” agreement which would their objectives, such as strikes, picketing, boycotts.
compel employees to become union workers as a But the right of government employees to "form,
condition of continued employment. But in 1961 join or assist employees organizations of their own
R.A. No. 3350 was passed to exempt from such choosing" under Executive Order No. 180 is not
compulsory union membership the followers of any regarded as existing or available for "purposes of
religious sect (such as the Iglesia ni Cristo) whose collective bargaining," but simply "for the
teachings forbid membership in labor unions. The furtherance and protection of their interests."
constitutionality of R.A. No. 3350 was upheld by the
Supreme Court in Victoriano v. Elizalde. In other words, the right of Government employees
to deal and negotiate with their respective
It may not be amiss to point out here that the free employers is not quite as extensive as that of
exercise of religious profession or belief is superior private employees. Excluded from negotiation by
to contract rights. In case of conflict, the latter government employees are the "terms and
must, therefore, yield to the former. conditions of employment...that are fixed by law," it
being only those terms and conditions not
6.1 Does the Exemption Still Stand? otherwise fixed by law that "may be subject of
negotiation between the duly recognized
6.2 Iglesia Ni Cristo Members May Form and Join employees' organizations and appropriate
Own Union government authorities."
________
Declared to be 'not negotiable' are matters "that require
Article 244. Right of employees in the public service. appropriation of funds;" e.g., increase in salary
– Employees of government corporations emoluments and other allowances, car plan, special
established under the Corporation Code shall have hospitalization, medical and dental services, increase in
retirement benefits (Sec. 3, Rule VIII), and those "that
the right to organize and to bargain collectively with
involve the exercise of management prerogatives;" e.g.,
their respective employers. All other employees in appointment, promotion, assignment/detail, penalties as
the civil service shall have the right to form a result of disciplinary actions, etc. (Sec. 4, Id.)
associations for purposes not contrary to law. (As Considered negotiable are such matters as schedule of
amended by Executive Order No. 111, December vacation and other leaves, work assignment of pregnant
24, 1986). women; recreational, social, athletic, and cultural
________ activities and facilities, etc. (Sec. 2, Id.).

1. GOVERNMENT EMPLOYEES’ RIGHT TO 1.2 No Signing Bonus
ORGANIZE; LIMITATIONS
Employees and officers of SSS are not entitled to
The highest law of the land guarantees to the signing bonus provided for in the collective
government employees the right to organize and to negotiation agreement because the process of
negotiate, but not the right to strike. collective negotiations in the public sector does not
encompass terms and conditions of employment
1.1 Limited Purpose requiring the appropriation of public funds. The
Court reminds the Social Security Commission
The extent of the government employees' right of officials that the SSS fund is not their money
self-organization differs significantly from that of
employees in the private sector. The latter's right of 1.3 Excepted Employees
self-organization, i.e., "to form, join or assist labor
organizations for purposes of collective bargaining," Excepted from the application of Executive Order
admittedly includes the right to deal and negotiate 180, however, are “members of the Armed Forces
with their respective employers in order to fix the of the Philippines, including police officers,
terms and conditions of employment and also, to policemen, firemen, and jail guards” (Sec. 4). For
engage in concerted activities for the attainment of



LABOR RELATIONS: Azucena Vol. II
reasons of security and safety, they are not allowed thereof and government-owned and controlled
to unionize. corporations with original charters are governed by law,
the employees therein shall not strike for the purpose of
A “high level employee” is one “whose functions are securing changes thereof.
normally considered policy determining, managerial
or one whose duties are highly confidential in 2. REGISTRATION
nature. A managerial function refers to the exercise
Sec. 7. Government employees' organizations shall
of powers such as: (1) to effectively recommend
register with the Civil Service Commission and the
such managerial actions; (2) to formulate or execute Department of Labor and Employment. The application
management policies and decisions; or (3) to hire, shall be filed with the Bureau of Labor Relations of the
transfer, lay-off, recall, dismiss, assign or discipline Department which shall process the same in accordance
employees. with the provisions of the Labor Code of the Philippines,
as amended. Applications may also be filed with the
1.3a Professors as rank-and-file employees Regional Offices of the Department of Labor and
Employment which shall immediately transmit the said
Professors at the University of the Philippines who applications to the Bureau of Labor Relations within
are not exercising managerial or highly confidential three (3) days from receipt thereof.

functions are rank-and-file employees and may
Sec. 8. Upon approval of the application, a registration
unionize separately from the non-academic certificate be issued to the organization recognizing it as
personnel. a legitimate employees' organization with the right to
represent its members and undertake activities to
In short, the professors, associate professors and further and defend its interest. The corresponding
assistant professors of the University of the certificates of registration shall be jointly approved by
Philippines are rank-and-file employees. The full the Chairman of the Civil Service Commission and
professors, associate professors, assistant Secretary of Labor and Employment. (E.O. No. 180)
professors, instructors and the research, extension
and professional staff may, if so minded, organize 3. CERTIFICATION ELECTION IN GOVERNMENT
themselves into a separate collective bargaining CORPORATION
unit.
A certification election to choose the union that will
1.4 Right to Strike represent the employees may be conducted by the
Bureau of Labor Relations in a government
EO No. 180 also concedes to government employees, like corporation, whether governed by the Labor Code
their counterparts in the private sector, the right to or the Civil Service rules.
engage in concerted activities, including the right to
strike, the executive order is quick to add that those 3.1 Election of Officers in Government Unions
activities must be exercised in accordance with law, i.e.
are subject both to "Civil Service Law and rules" and "any It is quite clear from this provision that BLR has the
legislation that may be enacted by Congress," that "the
original and exclusive jurisdiction on all inter-union
resolution of complaints, grievances and cases involving
government employees" is not ordinarily left to collective
and intra-union conflicts. An intra-union conflict
bargaining or other related concerted activities, but to would refer to a conflict within or inside a labor
"Civil Service Law and labor laws and procedures union, and an inter-union controversy or dispute,
whenever applicable;" and that in case "any dispute one occurring or carried on between or among
remains unresolved after exhausting all available unions. The subject of the case at bar, which is the
remedies under existing laws and procedures, the parties election of the officers and members of the board
may jointly refer the dispute to the (Public Sector Labor- of KMKK-MWSS, is, clearly, an intra-union conflict,
Management) Council for appropriate action." What is being within or inside a labor union. It is well within
more, the Rules and Regulations implementing Executive the powers of the BLR to act upon.
Order No. 180 explicitly provide that since the "terms

and conditions of employment in the government,
including any political subdivision or instrumentality



LABOR RELATIONS: Azucena Vol. II
4. WHEN PSLMC MAY RULE ON LEGALITY OF RA 6715 which took effect on March 21, 1989 (15
DISMISSAL days after its publication in the "Philippines Daily
Inquirer") provides that although "supervisory
The Public Sector Labor-Management Council, employees shall not be eligible for membership in a
created by Executive Order No. 180 (June 1, 1987) labor organization of the rank and file employees,"
has jurisdiction to hear charges of unfair labor they may, however, "join, assist or form separate
practice filed by government employees against labor organization of their own."
their employer, e.g., the Pamantasan ng Lungsod ng
Maynila. In deciding the ULP charge the PSLMC may 2. INELIGIBILITY OF MANAGERS
also rule on the complainants’ dismissal if the two
issues—ULP and dismissal—are unavoidably 2.1 Types of Managerial Employees
interlinked.
The term "manager" generally refers to "anyone who is
5. UNION-BUSTING IN A GOVERNMENT AGENCY, responsible for subordinates and other organizational
U.L.P. resources." As a class, managers constitute three levels
of a pyramid, namely, top management, middle
management, and first-line management which is also
5.1 Even Temporary Employees May Organize
called supervisor. Below this third level are the
operatives or operating employees who, we may add, are
Even temporary employees enjoy the basic right to also called rank-and-file.
form organization or association for purposes not
contrary to law. FIRST-LINE MANAGERS — The lowest level in an
organization at which individuals are responsible for the
Under Art. 277(c) of the Labor Code, “any work of others is called first-line or first-level
employee, whether employed for a definite period management. First-line managers direct operating
of not, shall beginning on his first day of service, be employees only; they do not supervise other managers.
considered an employee for purposes of Examples of first-line managers are the "foreman" or
production supervisor in a manufacturing plant, the
membership in any labor union.”
technical supervisor in a research department, and the
________ clerical supervisor in a large office. First-level managers
are often called supervisors.
Article 245. Ineligibility of managerial employees to
join any labor organization; Right of Supervisory MIDDLE MANAGERS — The term middle management
Employees. - Managerial employees are not eligible can refer to more than one level in an organization.
to join, assist or form any labor organization. Middle managers direct the activities of other managers
Supervisory employees shall not be eligible for and sometimes also those of operating employees.
membership in the collective bargaining unit of the Middle managers' principal responsibilities are to direct
rank-and-file employees but may join, assist or form the activities that implement their organizations' policies
and to balance the demands of their superiors with the
separate collective bargaining units and/or
capacities of their subordinates. A plant manager in an
legitimate labor organizations of their own. The electronics firm is an example of a middle manager.
rank-and-file union and the supervisors’ union
operating within the same establishment may join TOP MANAGERS — Composed of a comparatively small
the same federation or national union. (As group of executives, top management is responsible for
amended by Section 18, Republic Act No. 6715, the overall management of the organization. It
March 21, 1989 and Section 8, Republic Act No. establishes operating policies and guides the
9481 which lapsed into law on May 25, 2007 and organization's interactions with its environment. Typical
became effective on June 14, 2007). titles of top managers are "chief executive officer,"
________ "president," and "senior vice-president." Actual titles
vary from one organization to another and are not

always a reliable guide to membership in the highest
1. CATEGORIES OF EMPLOYEES management classification.



LABOR RELATIONS: Azucena Vol. II
As can be seen from this description, a distinction exists The rationale for this inhibition has been stated to be,
between those who have the authority to devise, because if these managerial employees would belong to
implement and control strategic and operational policies or be affiliated with a Union, the latter might not be
(top and middle managers) and those whose task is assured of their loyalty to the Union in view of evident
simply to ensure that such policies are carried out by the conflict of interests. The Union can also become
rank-and-file employees of an organization (first-level company-dominated with the presence of managerial
managers/supervisors). What distinguishes them from employees in Union membership.
the rank-and-file employees is that they act in the
interest of the employer in supervising such rank-and-file 2.2a Other Opinions
employees.
Justice Puno further airs a warning: “To declare Article
"Managerial employees" may therefore be said to fall 245 of the Labor Code unconstitutional cuts deep into
into two distinct categories: the "managers" per se, who our existing industrial life and will open the floodgates to
compose the former group described above, and the unionization at all levels of the industrial hierarchy. Such
"supervisors" who form the latter group. Whether they a ruling will wreak havoc on the existing set-up between
belong to the first or the second category, managers, vis- management and labor. If all managerial employees will
a-vis employers, are, likewise, employees. be allowed to unionize, then all who are in the payroll of
the company, starting from the president, vice-president,
2.2 Constitutionality of the Prohibition general managers and everyone, with the exception of
the directors, may go on strike or picket the employer.
The question is whether the first sentence of Art. Company officers will join forces with the supervisors
245 of the Labor Code, prohibiting managerial and rank-and-file.”
employees from forming, assisting or joining any
labor organization, is constitutional in light of Art. 3. EVOLUTION OF SUPERVISORS’ RIGHT TO
III, Sec. 8 of the Constitution which provides: ORGANIZE

The right of the people, including those employed in the Unlike managers, supervisors can unionize.
public and private sectors, to form unions, association, or
societies for purposes not contrary to law shall not be 3.1 First Period: Under the Industrial Peace Act
abridged.
The problem was that although the Industrial Peace
The present Article 245 is the result of the Act defined a “supervisor,” it failed to define a
amendment of the Labor Code in 1989 by R.A. No. “manager” or “managerial employee.” So the
6715, otherwise known as the Herrera-Veloso Law. question arose: Did the word “supervisor” include
Unlike the Industrial Peace Act or the provisions of “manager”? Could managers also unionize? In a
the Labor Code which it superseded, R.A. No. 6715 case involving Caltex managers, the Court answered
provides separate definitions of the terms affirmatively.
"managerial" and "supervisory employees" (See Art.
212[m]). 3.2 Second Period: Under the Labor Code Before
Amendment by R.A. No. 6715
Although the definition of "supervisory employees"
seems to have been unduly restricted to the last This time the question was: Did ‘managerial
phrase of the definition in the Industrial Peace Act, employee” include “supervisor”? Were supervisors
the legal significance given to the phrase also banned from unionizing? Yes. The prohibition
"effectively recommends" remains the same. In was applied to supervisors in the case of Bulletin
fact, the distinction between top and middle Publishing Corp. V. Sanchez, 144 SCRA 428, decided
managers, who set management policy, and front- on October 7, 1986.
line supervisors, who are merely responsible for
ensuring that such policies are carried out by the 3.3 Third Period: Under the Labor Code as Amended
rank and file, is articulated in the present definition. by RA 6715



LABOR RELATIONS: Azucena Vol. II
R.A. No. 6715 presents a compromise formula: department heads and other higher executives of the
retain the ineligibility of managerial employees but company, the same, although present, are not effective
revive the right of supervisory employees to and not an exercise of independent judgment as required
unionize. by law.


It is the nature of an employee's functions and not the
4. DEFINITION OF MANAGER AND SUPERVISOR nomenclature or title given to his job which determines
whether he has rank-and-file or managerial status.
Unlike in the Industrial Peace Act and the Labor Among the characteristics of managerial rank are: (1) He
Code before such amendment, the power to decide is not subject to the rigid observance of regular office
on managerial acts is now separated from the hours; (2) His work requires the consistent exercise of
power to recommend those managerial acts, such discretion and judgment in its performance; (3) the
as laying down policy, hiring or dismissing output produced or the result accomplished cannot be
employees, etc. A supervisor has the power only to standardized in relation to a given period of time; (4) He
recommend while a managerial employee has the manages a customarily recognized department or
subdivision of the establishment, customarily and
power to decide and do those acts.
regularly directing the work of other employees therein;
(5) He either has the authority to hire or discharge other
But to make one a supervisor, the power to employees or his suggestions and recommendations as
recommend must not be merely routinary or to hiring and discharging, advancement and promotion
clerical in nature but requires the use of or other change of status of other employees are given
independent judgment. In other words, the particular weight; and (6) As a rule, he is not paid hourly
recommendation is (1) discretionary or judgmental wages nor subjected to maximum hours of work.
(not clerical), (2) independent (not a dictation of
someone else), and (3) effective (given particular 5.1 The Power to Recommend
weight in making the management decision). If
these qualities are lacking or, worse, if the power to The power to recommend, in order to qualify an
recommend is absent, then the person is not really employee as a supervisor, must not only be
a supervisor but a rank-and-file employee and effective but should require the use of independent
therefore belongs or should belong to a rank-and- judgment. It should not be merely of a routinary or
file organization. clerical nature.

Similarly, a so-called manager, no matter how his 5.2 Examples of Ineffective or Clerical
position is titled, is not really a manager in the eyes Recommendation
of the law if he does not possess managerial powers
(to lay down and execute management policies 6. SEGREGATION OF RANK-AND-FILE AND
and/ or to hire, transfer, suspend, lay-off, recall, SUPERVISORS
discharge, assign or discipline employees). If he can
only recommend the exercise of any of these Article 245 allows supervisory employees to form,
powers, he is only a supervisor, hence, may join, join, or assist separate labor organizations of their
assist or form a supervisors’ organization. own, but they are not eligible for membership in a
labor organization of the rank-and-file employees.
5. TEST OF SUPERVISORY STATUS Neither may a rank-and-file join a union of
supervisors.
The test of "supervisory" or "managerial status" depends
on whether a person possesses authority to act in the This policy of segregating the supervisors’ union
interest of his employer in the matter specified in Article from that of the rank-and-file is founded on fairness
212 (k) of the Labor Code and Section 1 (m) of its to the employees themselves. It will be doubly
Implementing Rules and whether such authority is not detrimental to the employer if the supervisors and
merely routinary or clerical in nature, but requires the
the rank-and-file, as members of only one union,
use of independent judgment. Thus, where such
recommendatory powers as in the case at bar, are
could take a common stand against the employer.
subject to evaluation, review and final action by the



LABOR RELATIONS: Azucena Vol. II
6.1 Effects of Having Mixed Membership 6.4 Cancellation of Union Registration on Ground of
Inclusion of Disqualified Positions: What needs to
A union whose membership is a mixture of be Proved
supervisors and rank-and-file is not and cannot
become a legitimate labor organization. It cannot What is essential is the nature of the employee’s
petition for a certification election, much less ask to function and not the nomenclature or title given to the
be recognized as the bargaining representative of job which determines whether the employee has rank-
employees. and-file or managerial status or whether he is a
supervisory employee.

The Labor Code has made it a clear statutory policy to

prevent supervisory employees from joining labor The implementing Rules state that the legal
organizations consisting of rank-and-file employees as personality of the petitioner union cannot be
the concerns which involve members of either group are subject to collateral attack “but may be questioned
normally disparate and contradictory. only in an independent petition for cancellation.”

Clearly, based on Article 245, a labor organization To summarize, the petition for certification election
composed of both rank-and-file and supervisory is not the proper forum to raise the issue of legal
employees is no labor organization at all. It cannot, for personality of the union. Also, a petition to cancel
any guise or purpose, be a legitimate labor organization.
union registration cannot be heard or decided by
Not being one, an organization which carries a mixture of
rank-and-file and supervisory employees cannot possess
the Med-Arbiter but either the DOLE Regional
any of the rights of a legitimate labor organization, Director for enterprise-level or the BLR Director for
including the right to file a petition for certification national unions.
election for the purpose of collective bargaining. It
becomes necessary, therefore, anterior to the granting of 6.5 Affiliation of Supervisors and Rank-and-File
an order allowing a certification election, to inquire into Unions
the composition of any labor organization whenever the
status of the labor organization is challenged on the basis Even in affiliating with a federation, the unions of
of Article 245 of the Labor Code. the supervisors and of the ran-and-file should be

segregated.
The rationale behind the Code's exclusion of supervisors
from unions of rank-and-file employees is that such

employees, while in the performance of supervisory The peculiar role of supervisors is such that while they
functions, become the alter ego of management in the are not managers, when they recommend action
making and the implementing of key decisions at the implementing management policy or ask for the
discipline or dismissal of subordinates, they identify with
sub-managerial level. Certainly, it would be difficult to
the interests of the employer and may act contrary to the
find unity or mutuality of interests in a bargaining unit
interests of the rank-and-file.
consisting of a mixture of rank-and-file and supervisory
employees. And this is so because the fundamental test
of a bargaining unit's acceptability is whether or not such We agree with the petitioner's contention that a conflict
a unit will best advance to all employees within the unit of interest may arise in the areas of discipline, collective
the proper exercise of their collective bargaining rights. bargaining and strikes. Members of the supervisory
The Code itself has recognized this, in preventing union might refuse to carry out disciplinary measures
against their co-member rank-and-file employees. In the
supervisory employees from joining unions of rank-and-
area of bargaining, their interests cannot be considered
file employees.
identical. The needs of one are different from those of

the other. Moreover, in the event of a strike, the national
6.2 How Many? How Few? federation might influence the supervisors' union to
conduct a sympathy strike on the sole basis of affiliation.
6.3 Illegal Mixed Membership Must Be Raised and
Proved Thus, if the intent of the law is to avoid a situation where
supervisors would merge with the rank and-file or where
the supervisors' labor organization would represent
conflicting interests, then a local supervisors' union
should not be allowed to affiliate with the national


LABOR RELATIONS: Azucena Vol. II
federation of union of rank-and-file employees where Although Article 245 of the Labor Code limits the
that federation actively participates in union activity in ineligibility to join, form and assist any labor organization
the company. to managerial employees, jurisprudence has extended
this prohibition to confidential employees or those who
6.6 Restriction in Affiliation Clarified in De La Salle by reason of their positions or nature of work are
required to assist or act in a fiduciary manner to
First, the rank-and-file employees are directly under managerial employees and hence, are likewise privy to
sensitive and highly confidential records.
the authority of the supervisory employees. Second,

the national federation is actively involved in union
7.4c Who Are Confidential Employees?
activities in the company. If these two conditions

are absent, the rule prohibiting supervisors from
Confidential employees assist and act in a
affiliating with the mother union of the rank-and-
confidential capacity to, or have access to
file union does not apply.
confidential matters of, persons who exercise

The affiliation of two local unions in a company with the
managerial functions in the field of labor relations.
same national federation is not by itself a negate-on of As such, the rationale behind the ineligibility of
their independence since in relation to the employer, the managerial employees to form, assist or join a labor
local unions are considered as the principals, while the union equally applies to them.
federation is deemed to be merely their agent.
Confidential employees are those who by reason of
7. CONFIDENTIAL EMPLOYEES their positions or nature of work are required to
assist or act in a fiduciary manner to managerial
7.1 First Swing: Inclusion Among Rank-and-File employees and hence, are likewise privy to sensitive
and highly confidential records.
7.2 Second Swing: Exclusion from Rank-and-File
By the very nature of their functions, they assist and
7.3 Third Swing: Inclusion Among Supervisors act in a confidential capacity to, or have access to
confidential matters of, persons who exercise
7.4 Fourth Swing: Inclusion Among Monthly Paid managerial functions in the field of labor relations.
Rank-and-File
7.4d The Labor Nexus
7.4a Limited Exclusion; Doctrine of Necessary
Implication The broad rationale behind this rule is that employees
should not be placed in a position involving a potential
A confidential employee is one entrusted with conflict of interests. "Management should not be
confidence on delicate matters, or with the custody, required to handle labor relations matters through
employees who are represented by the union with which
handling, or care and protection of the employer's
the company is required to deal and who in the normal
property. While Art. 245 of the Labor Code singles performance of their duties may obtain advance
out managerial employees as ineligible to join, information of the company's position with regard to
assist or form any labor organization, under the contract negotiations, the disposition of grievances, or
doctrine of necessary implication, confidential other labor relations matters."
employees are similarly disqualified.
Art. 245 of the Labor Code does not directly prohibit
The doctrine of necessary implication means that confidential employees from engaging in union
what is implied in a statute is as much a part activities. However, under the doctrine of necessary
thereof as that which is expressed. implication, the disqualification of managerial
employees equally applies to confidential
7.4b The Metrolab and Meralco Summations: employees. The confidential-employee rule justifies
Exclusion from Bargaining unit and Closed-shop exclusion of confidential employees because in the
Clause normal course of their duties they become aware of
management policies relating to labor relations. It


LABOR RELATIONS: Azucena Vol. II
must be stressed, however, that when the Article 264 of this Code. (As amended by Batas
employee does not have access to confidential Pambansa Bilang 70, May 1, 1980).
labor relations information, there is no legal ________
prohibition against confidential employees from
forming, assisting, or joining a union. 1. CONCEPT OF THE RIGHT TO SELF ORGANIZATION

7.4e New CBA may include employees excluded This is a key article that offers an inclusionary
from old CBA; Expired CBA may be Modified, not definition of the right to self-organization (S.O.) by
just Renewed saying not what it is but what it includes. It includes
at least two rights: (1) the right to form, join or
The employer and the union in an enterprise may assist labor organizations, and (2) the right to
negotiate and agree whom to cover in their CBA. engage in lawful concerted activities. The “labor
And they are free to change their agreement: organization” may be a union or association of
people excluded before may be included now, or employees, as mentioned in Article 212(g). Its
vice versa. purposes may be collective bargaining (as stated in
this Article) or dealing with the employer [as stated
8. SECURITY GUARDS MAY JOIN RANK-AND-FILE in Article 212(g)].
OR SUPERVISORS UNION
The right to form labor organization is twin to the
Under the old rules, security guards were barred right to engage in concerted activities.
from joining a labor organization of the rank-and-
file. Under RA 6715, they may now freely join a It is worth noting, finally, that the right to self-
labor organization of the rank-and-file or that of the organization is granted not only to employees but
supervisory union, depending on their rank. to “workers,” whether employed or not. In fact,
________ constitutionally speaking, the right to form
associations or societies is a right of the “people,”
Article 245-A. Effect of inclusion as members of whether workers or not.
employees outside the bargaining unit. - The
inclusion as union members of employees outside No “person”—inside or outside of government,
the bargaining unit shall not be a ground for the employer or non-employer, unionist or non-
cancellation of the registration of the union. Said unionist—may abridge these rights. If abridged in
employees are automatically deemed removed the workplace, the abridgment is termed ULP
from the list of membership of said union. (unfair labor practice).
(Introduced as new provision by Section 9, Republic
Act No. 9481 which lapsed into law on May 25, Article 246, is both (in mixed metaphors), the
2007 and became effective on June 14, 2007). conceptual mother and the formidable fortress of
________ the prohibition expounded in the next three
articles.
Article 246. Non-abridgment of right to self- ________
organization. – It shall be unlawful for any person to
restrain, coerce, discriminate against or unduly Title VI
interfere with employees and workers in their UNFAIR LABOR PRACTICES
exercise of the right to self-organization. Such right
shall include the right to form, join, or assist labor Chapter I
organizations for the purpose of collective CONCEPT
bargaining through representatives of their own
choosing and to engage in lawful concerted Article 247. Concept of unfair labor practice and
activities for the same purpose or for their mutual procedure for prosecution thereof. – Unfair labor
aid and protection, subject to the provisions of practices violate the constitutional right of workers
and employees to self-organization, are inimical to



LABOR RELATIONS: Azucena Vol. II
the legitimate interests of both labor and As noted at the start of Book V a major aim of labor
management, including their right to bargain relations policy is industrial democracy whose
collectively and otherwise deal with each other in realization is most felt in free collective bargaining
an atmosphere of freedom and mutual respect, or negotiation over terms and conditions of
disrupt industrial peace and hinder the promotion employment. But for bargaining negotiation to be
of healthy and stable labor-management relations. true and meaningful, the employees, first of all,
must organize themselves. Because self-
Consequently, unfair labor practices are not only organization is a prerequisite—the lifeblood—of
violations of the civil rights of both labor and industrial democracy, the right to self-organize has
management but are also criminal offenses against been enshrined in the Constitution, and any act
the State which shall be subject to prosecution and intended to weaken or defeat the right is regarded
punishment as herein provided. by law as an offense. The offense is technically
called “unfair labor practice” (ULP). Literally, it does
Subject to the exercise by the President or by the not mean an unfair practice by labor but a practice
Secretary of Labor and Employment of the powers unfair to labor, although the offender may either be
vested in them by Articles 263 and 264 of this Code, an employer or a labor organization.
the civil aspects of all cases involving unfair labor
practices, which may include claims for actual, The victim of the offense is not just the workers as a
moral, exemplary and other forms of damages, body and the well-meaning employers who value
attorney’s fees and other affirmative relief, shall be industrial peace, but the State as well. Thus, the
under the jurisdiction of the Labor Arbiters. The attack to this constitutional right is considered a
Labor Arbiters shall give utmost priority to the crime which therefore carries both civil and criminal
hearing and resolution of all cases involving unfair liabilities.
labor practices. They shall resolve such cases within
thirty (30) calendar days from the time they are A consideration of the entire law on the matter clearly
submitted for decision. discloses the intention of the lawmaker to consider acts
which are alleged to constitute unfair labor practices as
Recovery of civil liability in the administrative violations of the law or offenses, to be prosecuted in the
same manner as a criminal offense. The reason for this
proceedings shall bar recovery under the Civil Code.
provision is that the commission of an unfair labor
practice is an offense against a public right or interest
No criminal prosecution under this Title may be and should be prosecuted in the same manner as a public
instituted without a final judgment finding that an offense. The reason for the distinction between an unfair
unfair labor practice was committed, having been labor practice case and a mere violation of an employer
first obtained in the preceding paragraph. During of its contractual obligation towards an employees is, x x
the pendency of such administrative proceeding, x that unfair labor practice cases involve violations of a
the running of the period of prescription of the public right or policy, to be prosecuted like criminal
criminal offense herein penalized shall be offenses whereas a breach of an obligation of the
considered interrupted: Provided, however, that employer to his employee is only a contractual breach to
be redressed like an ordinary contract or obligation.
the final judgment in the administrative

proceedings shall not be binding in the criminal case
1.1 Elements
nor be considered as evidence of guilt but merely as

proof of compliance of the requirements therein set
Commission of unfair labor practice at the
forth. (As amended by Batas Pambansa Bilang 70,
enterprise level needs the presence of certain
May 1, 1980 and later further amended by Section
elements: first, there is employer-employee
19, Republic Act No. 6715, March 21, 1989).
relationship between the offender and the
________
offended; and second, the act done is expressly

defined in the Code as an act of unfair labor
1. CONCEPT OF UNFAIR LABOR PRACTICE
practice. The first element is required because ULP

is negation of, a counteraction to, the right to
organize which is available only to employees in


LABOR RELATIONS: Azucena Vol. II
relation to their employer. No organizational right
can be negated or assailed if employer-employee To prosecute ULP as criminal offense is not possible
relationship is absent in the first place. until after finality of judgment in the labor case,
finding that the respondent indeed committed
The second element is that the act done is unfair labor practice. But such judgment will not
prohibited by the Code, specifically in Articles 248 serve as evidence of ULP in the criminal case; the
and 261 for an employer and Article 249 for a labor criminal charge must be proved independently from
organization. Art. 212(k) emphatically defines the labor case. Moreover, while only substantial
“unfair labor practice” as “any unfair labor practice evidence is required in labor case in the NLRC, proof
as expressly defined in this Code.” Art. 261 amplifies beyond reasonable doubt is needed to convict in
Art. 248(i) by stating that violation of a CBA is unfair the criminal case of ULP.
labor practice only if the violation is gross in
character. The criminal charge, states Art. 228, falls under the
concurrent jurisdiction of the Municipal or Regional
The prohibited acts, it should be stressed, are all Trial Court. The same article defines the penalty of
related to the worker’s self-organizational right and fine and/ or imprisonment.
to the observance of a collective bargaining
agreement (CBA). The only possible exception is Art. Under Art. 289, the penalty shall be imposed upon
248(f) referring to dismissing or prejudicing an the guilty officers of a corporation, partnership,
employee giving testimony under this Code association or entity. If the ULP is committed by a
[regardless of the subject of the testimony]. labor organization the parties liable are those
mentioned in Art. 249.
Because ULP is and has to be related to the right to
self-organization and to the observance of the CBA, The offense prescribes in one year. (Art. 290)
it follows that not every unfair act is “unfair labor ________
practice.”
Chapter II
ULP, therefore, has a limited, technical meaning UNFAIR LABOR PRACTICES OF EMPLOYERS
because it is a labor relations concept with a
statutory definition. It refers only to acts opposed Article 248. Unfair labor practices of employers. – It
to worker’s right to organize. Without that element, shall be unlawful for an employer to commit any of
the act, no matter how unfair, is not unfair labor the following unfair labor practice:
practice as legally defined.
(a) To interfere with, restrain or coerce employees
Stripped of legalese, unfair labor practice, when in the exercise of their right to self-organization;
committed by the employer, commonly connotes
anti-unionism. (b) To require as a condition of employment that a
person or an employee shall not join a labor
1.2 Prejudice to Public Interest not an Element of organization or shall with-draw from one to which
U.L.P. he belongs;

A showing of prejudice to public interest is not a (c) To contract out services or functions being
requisite for ULP charges to prosper. performed by union members when such will
interfere with, restrain or coerce employees in the
2. PROSECUTION OF U.L.P. exercise of their rights to self-organization;

Under Art. 247 ULP has civil as well as criminal (d) To initiate, dominate, assist or otherwise
aspects. The civil aspect may include liability for interfere with the formation or administration of
damages and these may be passed upon by a labor any labor organization, including the giving of
arbiter.



LABOR RELATIONS: Azucena Vol. II
financial or other support to it or its organizers or Before an employee may be considered aggrieved
supporters; by an alleged unfair labor practice (ULP) by an
employer, it must be demonstrated, firstly, that the
(e) To discriminate in regard to wages, hours of injured party comes within the definition of
work and other terms and conditions of “employee” as that term is defined by the Code,
employment in order to encourage or discourage and secondly, the act charged as ULP must fall
membership in any labor organization. Nothing in under the prohibition of Art. 248 (acts of the
this Code or in any other law shall stop the parties employer) or 249 (acts of the union).
from requiring membership in a recognized
collective bargaining agent as a condition for Nonetheless, specific denomination of the act is not
employment, except those employees who are necessary to prosecute ULP. In resolving the
already members of another union at the time of question of whether or not an employer committed
the signing of the collective bargaining agreement. the act charged in the complaint, it is of no
Employees of an appropriate bargaining unit who consequence, either as a matter of procedure or of
are not members of the recognized collective substantive law, how the act is denominated—
bargaining agent may be assessed a reasonable fee whether as a restraint, interference or coercion, or
equivalent to the dues and other fees paid by a discriminatory discharge, or as a refusal to
members of the recognized collective bargaining bargain, or even as a combination of any or all of
agent, if such non-union members accept the these. For however the employer’s conduct may be
benefits under the collective bargaining agreement: characterized, what is important is that it
Provided, that the individual authorization required constituted an unfair labor practice.
under Article 242, paragraph (o) of this Code shall
not apply to the non-members of the recognized 2. ILO CONVENTION NO. 98
collective bargaining agent;
Article 1
(f) To dismiss, discharge or otherwise prejudice or
discriminate against an employee for having given 1. Workers shall enjoy adequate protection against acts
or being about to give testimony under this Code; of anti-union discrimination in respect of their
employment.


(g) To violate the duty to bargain collectively as 2. Such protection shall apply more particularly in respect
prescribed by this Code; of acts calculated to--

(h) To pay negotiation or attorney’s fees to the (a) make the employment of a worker subject to the
union or its officers or agents as part of the condition that he shall not join a union or shall relinquish
settlement of any issue in collective bargaining or trade union membership;
any other dispute; or
(b) cause the dismissal of or otherwise prejudice a
(i) To violate a collective bargaining agreement. worker by reason of union membership or because of
participation in union activities outside working hours or,

with the consent of the employer, within working hours.
The provisions of the preceding paragraph
notwithstanding, only the officers and agents of Article 2
corporations, associations or partnerships who have
actually participated in, authorized or ratified unfair 1. Workers' and employers' organisations shall enjoy
labor practices shall be held criminally liable. (As adequate protection against any acts of interference by
amended by Batas Pambansa Bilang 130, August 21, each other or each other's agents or members in their
1981). establishment, functioning or administration.
________
2. In particular, acts which are designed to promote the
establishment of workers' organisations under the
1. CONDITIONS PRECEDENT TO U.L.P. CHARGE
domination of employers or employers' organisations, or
to support workers' organisations by financial or other


LABOR RELATIONS: Azucena Vol. II
means, with the object of placing such organisations
under the control of employers or employers' Acceptance of a voluntary resignation is not ULP. In
organisations, shall be deemed to constitute acts of a Philippine Airlines case the court said that the
interference within the meaning of this Article. pilots’ "protest retirement/resignation" was not a
concerted activity which was protected by law.
3. NO U.L.P.: ILLUSTRATIVE INSTANCES OF VALID They did not assume the status of strikers. They
EXERCISE OF MANAGEMENT RIGHTS cannot, therefore, validly claim that the company
committed unfair labor practice. When the pilots
The law on “unfair labor practices” is not intended voluntarily terminated their employment
to deprive employers of their fundamental right to relationship with the company, they cannot claim
prescribe and enforce such rules as they honestly that they were dismissed.
believe to be necessary to the proper, productive
and profitable operation of their business. Nor are 3.3 Grant of Profit-Sharing Benefits to Non-Union
his rights of selection and discharge of his Members
employees wrested from him by the Act.
Rothenberg stresses that an employer, subject to Management has the prerogative to regulate,
the provisions of his contract with his employees, according to its discretion and judgment, all aspects
has the same full measure of control over his of employment. This flows from the established rule
business as he had prior to the enactment of the that labor law does not authorize the substitution
Wagner Act and undiminished by the amended Act. of the judgment of the employer in the conduct of
The only condition imposed upon this control is that its business. Such management prerogative may be
it must not be exercised so as to effect a violation of availed of without fear of any liability so long as it is
the Act and its several prohibitions. exercised in good faith for the advancement of the
employers' interest and not for the purpose of
3.1 Personnel Movements defeating or circumventing the rights of employees
under special laws or valid agreement and are not
As a rule, it is the prerogative of the company to exercised in a malicious, harsh, oppressive,
promote, transfer or even demote its employees to vindictive or wanton manner or out of malice or
other positions when the interests of the company spite.
reasonably demand it. Unless there are instances
which directly point to interference by the company 3.4 Forced Vacation Leave
with the employees' right to self-organization, the
transfer of private respondent should be considered Where the vacation leave without pay, which the
as within the bounds allowed by law. Furthermore, employer requires employees to take in view of the
although private respondent was transferred to a economic crisis, is neither malicious, oppressive or
lower position, his original rank and salary remained vindictive, ULP is not committed.
undiminished.
3.5 Issuance of Rules or Policy
It is the company’s prerogative to promote its
employees to managerial positions. Managerial Every business enterprise endeavors to increase its
positions are offices which can only be held by profits. In the process, it may adopt or devise
persons who have the trust of the corporation and means designed towards that goal.
its officers. It should not be prevented from doing
so. A promotion which is manifestly beneficial to an Even as the law is solicitous of the welfare of the
employee should not give rise to a gratuitous employees, it must also protect the right of an
speculation that such a promotion was made simply employer to exercise what are clearly management
to deprive the union of the membership of the prerogatives. The free will of management to
promoted employee. conduct its own business affairs to achieve its
purpose cannot be denied.
3.2 Acceptance of Mass Resignation



LABOR RELATIONS: Azucena Vol. II
3.6 Taking Action Against Slowdown
5.1 Interrogation
Employees have the right to strike, but they have no
right to continue working on their own terms while Persistent interrogation of employees to elicit
rejecting the standards desired by their employer. information as to what had happened at union
Hence, an employer does not commit an unfair meetings and the identity of the active union
labor practice by discharging employees who employees was held as violative of organizational
engaged in a slowdown, even if their object is a pay rights of employees.
increase which is lawful. Moreover, an employer
does not violate the act by discharging only some of In order that the questioning of an employee
the employees who participate in the slowdown concerning his union activities would not be
where he discharges them to serve as an “example” deemed coercive, the employer must communicate
to stop the slowdown and not for discriminatory to the employee the purpose of the questioning,
reasons. assure him that no reprisal would take place, and
obtain his participation on a voluntary basis. In
4. DETERMINATION OF VALIDITY addition, questioning must also occur in a context
free from employer hostility to union organization
Necessarily, determining the validity of an and must not itself be coercive in nature.
employer’s act involves an appraisal of his motives.
5.2 U.L.P. Even Before Union is Registered
An employer may treat freely with an employee and is
not obliged to support his actions with a reason or An employer who interfered with the right to self-
purpose. However, where the attendant circumstances, organization before the union is registered can be
the history of employer's past conduct and like held guilty of ULP.
considerations, coupled with an intimate connection

between the employer's action and the union affiliations
or activities of the particular employee or employees
5.3 Prohibiting Organizing Activities
taken as a whole raise a suspicion as to the motivation
for the employer's action, the failure of the employer to A rule prohibiting solicitation of union membership
ascribe a valid reason therefor may justify an inference in company property is unlawful if it applies to non-
that his unexplained conduct in respect of the particular working time as well as to working time.
employee or employees was inspired by the latter's
union membership or activities. Where majority of the employees live on the
premises of the employer and cannot be reached by
While the presence of this mere suspicion neither takes any means or procedures practically available to
the place of evidence that the employer's conduct was
union organizers, the employer may be required to
improperly motivated nor dispenses with the
requirement of proof of the fact, such suspicion, when
permit non-employee union organizers to come
coupled with other facts which in themselves, might have within its premises, in order to solicit employees.
been inadequate to support an adverse finding against
the employer, may suffice to sustain a finding that the However, in the absence of showing that the illegal
employer's action violated the prohibition of the Act. dismissal was dictated by anti-union motives, the
same does not constitute an unfair labor practice as
5. FIRST U.L.P.: INTERFERENCE (ART. 248[a]) would be a valid ground for strike. The remedy is an
action for reinstatement with backwages and
In summarized form, the nine U.L.P. acts of an damages.
employer under Art. 248 are: (1) Interference, (2)
“yellow dog” condition, (3) contracting out, (4) We have held that unfair labor practice cases are
company unionism, (5) discrimination, (6) not, in view of the public interest involved, subject
discrimination because of testimony, (7) violation of to compromises.
duty to bargaining, (8) paid negotiation, and (9)
violation of CBA. 5.4 Violence or Intimidation



LABOR RELATIONS: Azucena Vol. II
5.7 Employer’s Expression of Opinion; Totality of
An employer unlawfully coerced employees by Conduct Doctrine
directing two individuals to his office at gun point
on the day of representation election after the The doctrine holds that the culpability of employer’s
individuals had informed the employer that they remarks was to be evaluated not only on the basis
were on the premises to vote in the election. of their implications, but against the background of
and in conjunction with collateral circumstances.
5.5 Espionage and Surveillance
(1) Letter to individual employees—It is an act of
One form of “pressure” which some over-eager interference for the employer to send a letter to all
employers sometimes use is the practice of spying employees notifying them to return to work at a time
upon employees. This device consists of using one specified therein, otherwise new employees would be
engaged to perform their jobs. Individual solicitation of
or a small group of employees, or other agents,
the employees or visiting their homes, with the employer
inspired by profit opportunism, vengeance or come or his representative urging the employees to cease
kindred human frailty to use his or their access to union activity or cease striking, constitutes unfair labor
employees’ quarters and affairs for the purpose of practice. All the above-detailed activities are unfair labor
spying upon fellow employees and reporting back practices because they tend to undermine the concerted
to the employer. It is plainly evident that such activity of the employees, an activity to which they are
conduct on the employer’s part, however subtly it entitled free from the employer's molestation.
may be accomplished, constitutes interference with
the employee’s exercise of their rights. Inasmuch as (2) Strike-breaking—When the respondent company
the “pressure” results more from the employees’ offered reinstatement and attempted to "bribe" the
strikers with "comfortable cots," "free coffee and
apprehension than from the employer’s purpose in
occasional movies," "overtime" pay for "work performed
spying and the use of its result, it has been held to in excess of eight hours," and "arrangements" for their
be no answer to a charge of unfair labor practice families, so they would abandon the strike and return to
that the fruits of espionage were not used. work, they were guilty of strike-breaking and/or union-
busting and, consequently, of unfair labor practice.
When an employer engages in surveillance or takes
steps leading his employees to believe it is going on, (3) Acts violative of right to organize—Violative of the
a violation results because the employees come right to organize, form and join labor organizations are
under threat of economic coercion or retaliation for the following acts: the offer of a Christmas bonus to all
their union activities. Unlawful surveillance was "loyal" employees of a company shortly after the making
of a request by the union to bargain; wage increases
properly found where supervisors were present
given for the purpose of mollifying employees after the
near the place where union meeting was being held employer has refused to bargain with the union, or for
to check the names of employees leaving the the purpose of inducing striking employees to return to
meeting. work; the employer's promises of benefits in return for
the strikers' abandonment of their strike in support of
5.6 Economic Inducements their union; and the employer's statement, made about 6
weeks after the strike started, to a group of strikers in a
A violation results from an employer’s restaurant to the effect that if the strikers returned to
announcement of benefits prior to a representation work, they would receive new benefits in the form of
election, where it is intended to induce the hospitalization, accident insurance, profit-sharing, and a
new building to work in.
employees to vote against the union.

(4) Test of interference or coercion—The test of whether
It is well-settled rule that while a representation an employer has interfered with and coerced employees
election is pending, the conferral of employee within the meaning of subsection (a) (1) is whether the
benefits for the purpose of inducing the employees employer has engaged in conduct which it may
to vote against a union is unlawful. reasonably be said tends to interfere with the free
exercise of employees' rights under section 3 of the Act,
and it is not necessary that there be direct evidence that



LABOR RELATIONS: Azucena Vol. II
any employee was in fact intimidated or coerced by
statements of threats of the employer if there is a An employer which closed its business to put an end
reasonable inference that anti-union conduct of the to a union’s activities, and which made no effort to
employer does have an adverse effect on self- allow the employees’ attempt to exercise their right
organization and collective bargaining.
to self-organization and collective bargaining, and

(5) The “totality of conduct” doctrine—the letters of the
even threatening the employees that they would
company president to the individual strikers should not lose their jobs if they did not cease affiliation with
be considered by themselves alone but should be read in the union, commits unfair labor practice.
the light of the preceding and subsequent circumstances.
The letters should be interpreted according to the 5.9a Sale in Bad Faith
"totality of conduct doctrine," whereby the culpability of
an employer's remarks has to be evaluated not only on Where the sale of a business enterprise was attended
the basis of their implicit implications, but were to be with bad faith, there is no need to consider the
appraised against the background of and in conjunction applicability of the rule that labor contracts being in
with collateral circumstances. personam are not enforceable against the transferee.
The latter is in the position of tort-feasor having been a
5.8 Mass Layoff Amounting to U.L.P. party likewise responsible for the damage inflicted on the
members of the aggrieved union and therefore cannot
A company’s capital reduction efforts, to justly escape liability.
camouflage the fact that it has been making profits,
and to justify the mass lay-off of its employees It is irrational to suppose that a purchaser of a
especially union members, were an unfair labor manufacturing enterprise is not aware of the labor-
practice which can neither be countenanced nor management situation in the firm he bought.
condoned.
5.9b Assumption of Obligations by New Company
5.9 Lockout or Closure Amounting to U.L.P.
5.10 Successor Employer; Piercing the Corporate
A lockout, actual or threatened, as a means of Veil
dissuading the employees from exercising their
rights under the Act is clearly an unfair labor Closure is likewise not legal and the employees
practice. However, to hold an employer who cannot be separated if, in fact, there is no closure
actually or who threatens to lock out his employees because the “closed” department or company
guilty of a violation of the Act, the evidence must reappeared although under a new name. If the
establish that the purpose thereof was to interfere “new” company is, for instance, engaging in the
with the employees’ exercise of their rights. same business as the closed company or
department, or is owned by the same people, and
An honest closing of one’s plant is not a violation of the “closure” is calculated to defeat the workers’
the Act. However, cessation of operations, actual or organizational right, then, the closure may be
threatened, does constitute an unfair labor declared a “subterfuge” and the doctrine of
practice, if it is, directly or indirectly, expressly or by successor employer will be applied, that is, the new
innuendo, calculated or employed to interfere with company will be treated as a continuation or
the employees’ rights under the Act. Proof of the successor of the one that closed. If such be the
employer’s state of mind, unless it is expressed, is case, the separated employees will have to be
often very difficult. However, it may be proven by employed in the “new” firm because in the first
circumstantial evidence. place they should not have been separated at all.

The rule is that it is unlawful for the employer to The “successor employer” ruling is an enforcement
threaten its employees with moving or shutting of the legal recourse called “piercing the veil of
down the plant and consequent loss of corporate entity.”
employment, as the result of their support for the
union.


LABOR RELATIONS: Azucena Vol. II
Under the doctrine of piercing the veil of corporate himself of union men, or escape his statutory duty
entity, when valid grounds therefore exist, the legal to bargain collectively with his employees’
fiction that a corporation is an entity with a juridical bargaining representative.
personality separate and distinct from its members or
stockholders may be disregarded. In such cases, the
As we have previously held, the company can determine
corporation will be considered as a mere association of
in its best business judgment whether it should contract
persons. The members or stockholders of the out the performance of some of its work for as long as
corporation will be considered as the corporation, that is, the employer is motivated by good faith, and the
liability will attach directly to the officers and contracting out must not have been resorted to to
stockholders. The doctrine applies when the corporate circumvent the law or must not have been the result of
fiction is used to defeat public convenience, justify
malicious or arbitrary action.
wrong, protect fraud, or defend crime, or when it is

made as a shield to confuse the legitimate issues or
where a corporation is the mere alter ego or business
7.1 Contracting out restricted by CBA
conduit of a person, or where the corporation is so
organized and controlled and its affairs are so conducted 7.2 Runaway Shop
as to make it merely an instrumentality, agency, conduit
or adjunct of another corporation. Resorting to a runaway shop is a U.L.P. A “runaway”
shop is defined as an industrial plant moved by its
6. SECOND U.L.P.: “YELLOW DOG” CONDITION owners from one location to another to escape
(ART. 248[b]) union labor regulations or state laws, but the term
is also used to describe a plant removed to a new
Contract provisions whereby an employee agrees location in order to discriminate against employees
that during the period of his employment he will at the old plant because of their union activities.
not become a member of a labor union have been Moreover, it has been held that where a plant
outlawed in the United States, by legislation in removal is for business reasons but the relocation is
some states, as well as by Federal legislation. hastened by anti-union motivation, the early
removal is an unfair labor practice. It is immaterial
The “yellow dog” contract is a promise exacted that the relocation is accompanied by a transfer of
from workers as a condition of employment that title to a new employer who is an alter ego of the
they are not to belong to, or attempt to foster, a original employer.
union during their period of employment.
Runaway shop refers to business relocation
An American scheme, the typical yellow dog animated by anti-union animus. Sameness of
contract is an at-will employment agreement which business is not reason enough to show run-away
contains, in addition to the usual provisions for shop to pierce the veil of separate corporate entity.
employment, the following three provisions: (1) a
representation by the employee that he is not a A "runaway shop" is defined as an industrial plant moved
member of a labor union; (2) a promise by the by its owners from one location to another to escape
employee not to join a labor union; (3) a promise by union labor regulations or state laws, but the term is also
the employee that, upon joining a labor union, he used to describe a plant removed to a new location in
order to discriminate against employees at the old plant
will quit his employment.
because of their union activities. It is one wherein the
employer moves its business to another location or it
7. THIRD U.L.P.: CONTRACTING OUT (ART. 248[c]) temporarily closes its business for anti-union purposes. A
"runaway shop" in this sense, is a relocation motivated
Contracting out itself, is not ULP; it is the ill by anti-union animus rather than for business reasons.
intention that makes it so.
Mere ownership by a single stockholder or by another
An employer’s contracting out of work is itself an corporation of all or nearly all of the capital stock of a
unfair labor practice where motivated by a desire to corporation is not of itself sufficient ground for
prevent his employees from organizing and disregarding the separate corporate personality.

selecting a collective bargaining representative, rid


LABOR RELATIONS: Azucena Vol. II
This fiction of corporate entity can only be disregarded in former union; that officers and members of the rival
certain cases such as when it is used to defeat public union were dismissed allegedly pursuant to a
convenience, justify wrong, protect fraud, or defend retrenchment policy of the company, after they had
crime. To disregard said separate juridical personality of presented demands for the improvement of the working
a corporation, the wrongdoing must be clearly and conditions despite its alleged retrenchment policy; and
convincingly established. that, after dismissal of the aforesaid officers of the rival
labor union, the company engages the services of new
8. FOURTH U.L.P.: COMPANY-DOMINATION OF laborers.
UNION (ART. 248[d])
9. FIFTH U.L.P.: DISCRIMINATION (ART. 248[e])
Domination of a labor union usually manifests in the
following forms: What the law prohibits is discrimination to
encourage or discourage membership in a labor
(a) Initiation of the company union idea. This may organization. Where the purpose is to influence the
further occur in three styles: (1) outright formation union activity of employees, the discrimination is
by the employer or his representatives; (2) unlawful. But discrimination is not the same as
employee formation on outright demand or differentiation or classification. For instance, it is
influence by employer; and (3) managerially common management practice to classify jobs and
motivated formation by employees. grant them varying levels of pay benefits package.
These are valid differentiations that recognize
(b) Financial support to the union. An employer differences in job requirements or contributions.
commits unfair labor practice if he defrays the They are not necessarily discrimination classifiable
union expenses or pays the attorney’s fees to the as ULP.
attorney who drafted the constitution and by-laws
of the union. Under the Industrial Peace Act, to constitute an unfair
labor practice, the discrimination committed by the
(c) Employer encouragement and assistance. employer must be in regard to the "hire or tenure of
Immediately granting the union exclusive employment or any term or condition of employment to
encourage or discourage membership in any labor
recognition as a bargaining agent without
organization." The exaction, by the Company, from the
determining whether the union represents the strikers returning to work, of a promise not to destroy
majority of employees is an illegal form of company property and not to commit acts of reprisal
assistance amounting to unfair labor practice. against the Union-members who did not participate in
the strike, cannot be considered as intended to
(d) Supervisory assistance. This takes the form of encourage or discourage Union-membership. Taking the
soliciting membership, permitting union activities circumstances surrounding the prescribing of that
during working time or coercing employees to join condition, the requirement by the Company is actually an
the union by threats of dismissal or demotion. act of self-preservation and designed to insure the
maintenance of peace and order in the Company
premises.
An employer was held to have unlawfully aided a

union by assisting its attempt to secure
Discouraging membership in a labor organization
authorization cards from employees and by
includes not only discouraging adhesion to union
executing a contract with such union when it was
membership but also discouraging participation in
not the authorized representative of the
union activities such as legitimate strike.
employees.


A labor union is company-dominated where it appears
9.1 Discrimination in Work Quota
that key officials of the company have been forcing
employees belonging to a rival labor union to join the Considered in the light of the anti-union attitude
former under pain of dismissal should they refuse to do exhibited by respondent company in transferring union
so; that hey officials of the company, as well as its legal president Leones from the main office in Manila to Cebu
counsel, have attended the election of officers of the when the union was still being organized, and which act
was found by the NLRC as constituting unfair labor


LABOR RELATIONS: Azucena Vol. II
practice and union-busting in connection with the
application for clearance to terminate Leones filed by When it is resorted to by a combination of
respondent company, 34 the uneven application of its employers to prevent employment of employees
marketing plan by respondent company is patently an act for union activities, it may constitute unfair labor
of discrimination, considered as an unfair labor practice
practice. Aside from constituting an unfair labor
under Art. 248(e) of the Labor Code.
practice, it may give rise to a right of action for

damages by the employees prejudice under Article
9.2 Discrimination in Bonus Allocation or Salary
28 of the new Civil Code.
Adjustments


In its broad sense, however that is, in the sense of the
There is unfair and unjust discrimination in the employer’s circulating a list of former employees of
granting of salary adjustments where the evidence notorious laziness or negligence in the performance of
shows that (a) the management paid the employees their duties or of incorrigible propensity to create trouble
of the unionized branch; (b) where the salary in the place of employment, it may be a proper measure
adjustments were granted to employees of one of for the protection of employers. Thus, it has been held
its nonunionized branches although it was losing in that unless the action of the employers in combining or
its operations; and (c) the total salary adjustments in passing communications among themselves for the
given every ten of its unionized employees would purpose of excluding unwanted workers from
not even equal the salary adjustments given one employment, constitutes a libel or slander (and according
to some decisions the defamation, to be actionable, must
employee in the nonunionized branch.
be malicious), the excluded employee possesses no right
of action because the employers’ community of interest
9.3 Discrimination in Layoff or Dismissal acts both to justify the combination and to privilege the
communication.
Even where business conditions justified a layoff of
employees, unfair labor practices in the form of 9.6 Indirect Discrimination
discriminatory dismissal were found where only
unionists were permanently dismissed while It is a well settled rule of law that what is prohibited
nonunionists were not. to be done directly shall not be allowed to be
accomplished indirectly.
Labor is a person's means of livelihood. He cannot be
deprived of his labor or work without due process of law. Thus, the following acts have been held unfair labor
Retrenchment very heart of one's employment. While
practices: (1) the dismissal of a laborer in account of
the right of strikes at the very heart of an employer to
dismiss an employee is conceded in a valid
union activities of his brother; (2) the discharge of
retrenchment, the right differs from and should not be an employee due to the union activities of the wife;
confused with the manner in which such right is and (3) the discharge of a wife due to the union
exercised. It should not be oppressive and abusive since activities of the husband.
it affects one's person and property. Due process of law
demands nothing less. 9.7 Test of Discrimination

9.4 Discrimination in Regularization For the purpose of determining whether or not a
discharge is discriminatory, it is necessary that the
9.5 Discrimination by Blacklisting underlying reason for the discharge be established.
The fact that a lawful cause for discharge is
A blacklist has been defined as “a list of persons available is not a defense where the employee is
marked out for special avoidance, antagonism or actually discharged because of his union activities. If
enmity on the part of those who prepare the list, or the discharge is actually motivated by a lawful
those among whom it is intended to circulate, as reason, the fact that the employee is engaged in
where a trade union ‘blacklists’ workmen who union activities at the time will not lie against the
refuse to conform to its rules, or where a list of employer and prevent him from the exercise of his
insolvent or untrustworthy persons is published by
a commercial agency or mercantile association.”


LABOR RELATIONS: Azucena Vol. II
business judgment to discharge an employee for membership in the union so that an employee may
cause. retain his job and the union’s existence is assured.

Where circumstances establish a discriminatory “Union security” is a generic term which is applied
motive on the part of the employer, the assignment to and comprehends “closed shop,” “union shop,”
of a just cause will be unavailing. If it can be “maintenance of membership” or any other form of
established that the true and basic inspiration for agreement which imposes upon employees the
the employer’s act is derived from the employees’ obligation to acquire or retain union membership as
union affiliations or activities, the assignment by the a condition affecting employment. It is indeed
employer of another reason, whatever its compulsory union membership whose objective is
semblance of validity, is unavailing. to assure continued existence of the union. In a
sense, there is discrimination when certain
An interference that the discharge of an employee employees are obliged to join a particular union.
was motivated by his union activity must be based But it is discrimination favouring unionism; it is a
upon evidence, direct or circumstantial, not upon valid kind of “discrimination.”
mere suspicion.
The employer is not guilty of unfair labor practice if
9.8 Constructive Discharge it merely complies in good faith with the request of
the certified union for the dismissal of employees
Where the employer prohibits employees from expelled from the union pursuant to the union
exercising their rights under the Act, on pain of security clause in the collective bargaining
discharge, and the employee quits as a result of the agreement.
prohibition, a constructive discharge occurs, which
may be remedies in an unfair labor practice 9.10a Kinds of Union Security Agreements
proceeding.
Closed-shop: Only union members can be hired by
9.9 Discharge Due to Union Activity, A Question of the company and they must remain as union
Fact members to retain employment in the company.

The question of whether an employee was discharged Union Shop: Nonmembers may be hired, but to
because of his union activities is essentially a question of retain employment must become union members
fact as to which the findings of the Court of Industrial after a certain period. The requirement applies to
Relations are conclusive and binding if supported by present and future employees.
substantial evidence considering the record as a whole.

This is so because the Industrial Court is governed by the
rule of substantial evidence, rather than by the rule of
Modified Union Shop: Employees who are not union
preponderance of evidence as in any ordinary civil cases. members at the time of signing the contract need
Substantial evidence has been defined as such relevant not join the union, but all workers hired thereafter
evidence as a reasonable mind might accept as adequate must join.
to support a conclusion. It means such evidence which
affords a substantial basis from which the fact in issue Maintenance of Membership Shop: No employee is
can be reasonably inferred. compelled to join the union, but all present or
future members must, as a condition of
9.10 Valid Discrimination: Union Security Clause employment, remain in good standing in the union.

There is a form of encouragement of union Exclusive Bargaining Shop: The union is recognized
membership which is not considered ULP. This is as the exclusive bargaining agent for all employees
where Management and Union enter into a in the bargaining unit, whether union members or
collective bargaining agreement containing a union not.
security clause. Despite variations and limitations, a
union security clause essentially requires



LABOR RELATIONS: Azucena Vol. II
Bargaining for Members Only: The union is most prized achievement of unionism." It adds
recognized as the bargaining agent only for its own membership and compulsory dues. By holding out to
members loyal members a promise of employment in the closed-
shop, it welds group solidarity. It is a very effective form
of union security agreement.
Agency Shop: An agreement whereby employees

must either join the union or pay the union as
9.10c Advantages and Disadvantages of Closed-
exclusive bargaining agent a sum equal to that paid
Shop Agreement
by the members. This is directed against “free rider”

employees who benefits from union activities
A closed-shop agreement is advantageous because
without contributing financially to union support. It
it—
prevents situation where non-union members

enrich themselves at the expense of union
a. Increases the strength and bargaining power of
members. Another term for agency shop agreement
labor organizations.
is “maintenance of treasury shop.”


b. Prevents non-union workers from sharing in the
The above variations are opposite of open shop, an
benefits of the union’s activities without also
arrangement which does not require union
sharing its obligations.
membership as a condition of employment.


c. Prevents the weakening of labor organizations by
9.10b Validity of Closed-Shop Agreement
discrimination against union members.

It is true that disaffiliation from a labor union is not open

to legal objection. It is implicit in the freedom of d. Eliminates the lowering of standards caused by
association ordained by the Constitution. But this Court competition with non-union workers.
has laid down the ruling that a closed shop is a valid form
of union security, and such provision in a collective e. Enables labor organizations effectively to enforce
bargaining agreement is not a restriction of the right of collective agreements.
freedom of association guaranteed by the Constitution.
f. Facilitates the collection of dues and the
It is the policy of the State to promote unionism to enforcement of union rules.
enable the workers to negotiate with management on

the same level and with more persuasiveness than if they
were to individually and independently bargain for the
g. Creates harmonious relations between the
improvement of their respective conditions. To this end, employer and employee.
the Constitution guarantees to them the rights "to self-
organization, collective bargaining and negotiations and But it is disadvantageous as it—
peaceful concerted actions including the right to strike in
accordance with law." There is no question that these a. Results in monopolistic domination of
purposes could be thwarted if every worker were to employment by labor organizations.
choose to go his own separate way instead of joining his
co-employees in planning collective action and b. Interferes with the freedom of contract and
presenting a united front when they sit down to bargain
personal liberty of the individual worker.
with their employers. It is for this reason that the law has
sanctioned stipulations for the union shop and the closed

shop as a means of encouraging the workers to join and c. Compels employers to discharge all non-union
support the labor union of their own choice as their workers regardless of efficiency, length of service,
representative in the negotiation of their demands and etc.
the protection of their interest vis-a-vis the employer.
d. Facilitates the use of labor organizations by
A closed-shop agreement is an agreement whereby an unscrupulous union leaders for the purpose of
employer binds himself to hire only members of the extortion, restraint of trade, etc.
contracting union who must continue to remain
members in good standing to keep their jobs. It is "the



LABOR RELATIONS: Azucena Vol. II
e. Denies to non-union workers equal opportunity explicit coverage of their terms, and will not be
for employment. deemed to authorize by implication any dismissal of
employees already working before the agreement
f. Enables union to charge exorbitant dues and was made.
initiation fees.
9.10f Due Process Required in Enforcing Union
9.10d Valid Dismissal Because of Application of Security Clause; Intra-union Matter becomes
Union Security Clause Termination Dispute with Employer

Union security clauses in collective bargaining Although a union security clause in a CBA may be
agreements, if freely and voluntarily entered into, are validly enforced and that dismissal pursuant thereto
valid and binding. Corollary, dismissals pursuant to union may likewise be valid, this does not erode the
security clauses are valid and legal subject only to the fundamental requirement of due process. The
requirement of due process, that is, notice and hearing
reason behind the enforcement of union security
prior to dismissal. Thus, the dismissal of an employee by
the company pursuant to a labor union's demand in
clauses which is the sanctity and inviolability of
accordance with a union security agreement does not contracts cannot override one's right to due
constitute unfair labor practice. process.

Even if the union members were unaware of the closed- 9.10g Liability of Union to Pay Wages and Fringe
shop stipulation in the CBA, they were bound by it. Benefits of Illegally Dismissed Employee
Neither their ignorance of, nor their dissatisfaction with
its terms and conditions would justify breach thereof or 9.10h Employer in Good Faith Not Liable
the formation by them of a union of their own. This is so
because a union member who is employed under an
9.10i Closed-Shop, To Whom Not Applicable
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 All employees in the bargaining unit covered by a
the union as their agent. closed-shop agreement are subject to its terms,
except the following: (1) any employee who at the
This provision is an indirect restriction on the right of an time the closed-shop agreement takes effect is a
employee to self-organization. It is a solemn bona fide member of religious organization which
pronouncement of a policy that while an employee is prohibits its members from joining labor unions on
given the right to join a labor organization, such right religious grounds; (2) employees already in the
should only be asserted in a manner that will not spell service and already members of a labor union or
the destruction of the same organization The law
unions other than the majority union at the time
requires loyalty to the union on the part of its members
in order to obtain to the full extent its cohesion and
the closed-shop agreement took effect; (3)
integrity. Confidential employees who are excluded from the
rank-and-file bargaining unit; and (4) employees
9.10e Dismissal Pursuant to Closed-Shop Clause excluded from the closed-shop by express terms of
Must Clearly Appear in Contract the agreement.

In order to validly dismiss an employee by force of It is well settled in this jurisdiction that, in the absence of
a manifest intent to the contrary, "closed shop"
the union security clause, there should be a clear
provisions in a collective bargaining agreement "apply
and unequivocal statement that the loss of the only to persons to be hired or to employees who are not
status of a member of good standing in the union yet members of any labor organization" and that said
shall be a cause for dismissal. provisions of the agreement are not applicable to those
already in the service at the time of its execution. To hold
Union shop, as with closed-shop provisions, should that the employees in a company who are members of a
be strictly construed against the existence of union minority union may be compelled to disaffiliate from
shop. Sometimes harsh and onerous, such their union and join the majority or contracting union,
provisions should not be extended beyond the would render nugatory the right of all employees to self



LABOR RELATIONS: Azucena Vol. II
organization and to form, join or assist labor
organizations of their own choosing, a right guaranteed Employer’s reprisal against a testifying employee is
by the Industrial Peace Act (sec. 3, Rep. Act No. 875) as ULP because, furthermore, it violates the right to
well as by the Constitution (Art. III, sec. 1[6]). engage in concerted activity, a right included in the
right to self-organize (Art. 246) and reiterated in
9.10j Agency Fee Instead of Union Membership Article 263(b). Concerted activity does not always
require a number of people acting in unison. An
The employees who are benefitting from the CBA, employee acting alone in pursuing a group interest
without being members of the bargaining union, may be said to be doing a concerted activity which
may be required to pay an agency fee. The the employer may not curtail.
collection of agency fees in an amount equivalent to
union dues and fees, from employees who are not 10.1 Refusal to Testify
union members, is recognized by Article 248 (e) of
the Labor Code. A written authorization from the Clearly, the efforts to justify petitioner's dismissal — on
non-union employee is imposed. The employee's top of the private respondent's scheme of inducing his
acceptance of benefits resulting from a collective employees to sign an affidavit absolving him from
bargaining agreement justifies the deduction of possible violations of the Labor Code — taints with
agency fees from his pay and the union's evident bad faith and deliberate malice petitioner's
entitlement thereto. In this aspect, the legal basis of summary termination from employment. The pivotal
the union's right to agency fees is neither question in any case where unfair labor practice on the
contractual nor statutory, but quasi-contractual, part of the employer is alleged is whether or not the
employer has exerted pressure, in the form of restraint,
deriving from the established principle that non-
interference or coercion, against his employee's right to
union employees may not unjustly enrich institute concerted action for better terms and
themselves by benefiting from employment conditions of employment. Without doubt, the act of
conditions negotiated by the bargaining union. compelling employees to sign an instrument indicating
that the employer observed labor standards provisions of
The justification of collecting agency fee is the law when he might have not, together with the act of
union’s accomplishment in having negotiated a CBA terminating or coercing those who refuse to cooperate
in behalf of the employees. The union served as with the employer's scheme constitutes unfair labor
agent of the employees, and the agency fee is practice. The first act clearly preempts the right of the
recognition of the agent’s efforts. The fee is hotel's workers to seek better terms and conditions of
employment through concerted action.
collectible only from employees deriving economic

benefits from the union-negotiated CBA.
10.2 Labor Standards Violation May Lead to a Srike


10. SIXTH U.L.P.: DISCRIMINATION BECAUSE OF
Art. 118. Retaliatory measures. It shall be unlawful
TESTIMONY (ART. 248[f])
for an employer to refuse to pay or reduce the

wages and benefits, discharge or in any manner
The law protects not only the employees’ right to
discriminate against any employee who has filed
form, join, or assist labor organizations but also
any complaint or instituted any proceeding under
their right to testify on matters covered by the
this Title or has testified or is about to testify in
Code. If this right is not protected, the right to self-
such proceedings.
organization will be indirectly defeated because the

employees will fear their employer’s reprisal. By
And yet, Articles 118 and 248 are related. They both
protecting the employee’s right to testify, the law
speak of employee’s filing a complaint or giving
therefore shields the workers’ right to self-
testimony. But the subject of complaint or
organization from indirect assault by the employer.
testimony under Article 118 is limited to matters
Thus, it is ULP “to dismiss, discharge, or otherwise
about wages, the subject of Title I of Book III. Under
prejudice or discriminate against an employee for
Article 248, on the other hand, the subject testified
having given or being about to give testimony under
to is any issue covered by the Code. Both articles
this Code.
likewise speak of retaliation by the employer.


LABOR RELATIONS: Azucena Vol. II
Retaliation is wrong, and more than that, Article confine its injunction orders to specific act or acts
248 considers it an unfair labor practice which, which are related to past misconduct. A cease and
under Art. 263, is a legal reason for employees to desist order is not invalidated because the act
hold a strike. complained of was voluntarily discontinued prior to
or during the course of the proceedings. But if the
11. SEVENTH U.L.P.: VIOLATION OF THE DUTY TO act complained of happened so long a time that
BARGAIN (ART. 248[g]) there is no longer any threat or probability of a
recurrence, a cease and desist order will not be
The seventh ULP act under Art. 248 refers to justified.
violating the duty to bargain. See Articles 252 and
253 14.2 Affirmative Order

12. EIGHT U.L.P.: PAID NEGOTIATION (ART. 248[h]) The Court does not only have the power to issue
negative or prohibitive orders but also affirmative
Self-organization and collective bargaining are or positive orders.
treasured rights of workers. The law zealously
shields them from corruption. It is a punishable act The order may usually direct the full reinstatement
of ULP for the employer to pay the union or any of of the discharged employees to their substantially
its officers or agents any negotiation fee or equivalent position without prejudice to their
attorney’s fee as part of settlement in collective seniority and other rights and privileges.
bargaining or any labor dispute. To do so is not
unlawful. It is ethically reprehensible. 14.3 Order to Bargain; Mandated CBA

13. NINTH U.L.P.: VIOLATION OF THE CBA (ART. Likewise, when an employer has failed or refused to
248[i]) bargain with the proper bargaining agent of his
employees, the Court may, in addition to the usual
After a CBA is concluded, its implementation cease and desist orders, issue an affirmative order
follows. Implementation is still part of the to compel the respondent to “bargain” with the
bargaining process which, it should be recalled, bargaining agent.
rests on the parties’ “duty to bargain.” The duty to
bargain, it should also be recalled, requires good 14.4 Disestablishment
faith. And good faith implies faithful observance of
what has been agreed upon. It logically follows that Where the employer had initiated, dominated or
noncompliance with the agreement is non- assisted in or interfered with the formation or
observance of good faith in bargaining; therefore, establishment of any labor organization or
the noncompliance amounts to ULP. contributed financial or other support to it, the
Court may issue, in addition to a cease and desist
But such violation, to constitute ULP, must be order, an order directing the employer to withdraw
“gross,” according to Art. 261. all recognition from the dominated labor union and
to disestablish the same.
14. RELIEF IN U.L.P. CASES
15. U.L.P. NOT SUBJECT TO COMPROMISE
14.1 Cease and Desist Order
Unfair labor practice cases are not, in view of the
To support a cease and desist order, the record public interest involved, subject to compromises.
must show that the restrained misconduct was an The relation between capital and labor are not
issue in the case; that there was a finding of fact of merely contractual. They are so impressed with the
said misconduct and such finding of fact was public interest that labor contracts must yield to the
supported by evidence. The Court is not authorized common good.
to issue blank cease and desist orders, but must



LABOR RELATIONS: Azucena Vol. II
16. U.L.P. IN A GIVEN PERIOD SHOULD BE Article 249. Unfair labor practices of labor
INCLUDED IN SINGLE CHARGE organizations. - It shall be unfair labor practice for a
labor organization, its officers, agents or
When a labor union accuses an employer of acts of representatives:
unfair labor practice allegedly committed during a
given period of time, the charges should include all (a) To restrain or coerce employees in the exercise
acts of unfair labor practice committed against any of their right to self-organization. However, a labor
and all members of the Union during that period. organization shall have the right to prescribe its
The Union should not, upon the dismissal of the own rules with respect to the acquisition or
charges first preferred, be allowed to split its cause retention of membership;
of action and harass the employer with subsequent
charges. based upon acts committed during the (b) To cause or attempt to cause an employer to
same period of time. discriminate against an employee, including
discrimination against an employee with respect to
17. EMPLOYER’S RESPONSIBILITY FOR U.L.P. ACTS whom membership in such organization has been
BY SUBORDINATE OFFICIALS denied or to terminate an employee on any ground
other than the usual terms and conditions under
Knowledge by the employer of the employee’s which membership or continuation of membership
improper acts: Where it was established that the is made available to other members;
employer was aware of the employee’s
wrongdoing, his failure to prevent continuation of (c) To violate the duty, or refuse to bargain
the course of conduct or his failure to renounce any collectively with the employer, provided it is the
connection or affinity therewith, invited the representative of the employees;
imputation of fault and responsibility to the
employer. (d) To cause or attempt to cause an employer to
pay or deliver or agree to pay or deliver any money
Continuity of improper conduct by employee: A or other things of value, in the nature of an
single utterance by a supervisory employee, exaction, for services which are not performed or
whether improvident or deliberate on the not to be performed, including the demand for fee
employee’s part, was not ordinarily and n absence for union negotiations;
of proof of actual authority held to be sufficient to
convict an employer of an unfair labor practice; (e) To ask for or accept negotiation or attorney’s
however, continued, repeated or widespread fees from employers as part of the settlement of
activities by such supervisory employee in affront of any issue in collective bargaining or any other
the rights of the body of employees was deemed dispute; or
ample justification for ascribing knowledge and
blame to the employer. (f) To violate a collective bargaining agreement.

Employer’s past policy and attitude: It has been held The provisions of the preceding paragraph
that, among other things, the similarity between notwithstanding, only the officers, members of
the past attitude or policy of the employer and that governing boards, representatives or agents or
of the offending supervisory employee might, in members of labor associations or organizations who
certain cases, be indicative of a concert of effort have actually participated in, authorized or ratified
between the two. unfair labor practices shall be held criminally liable.
________ (As amended by Batas Pambansa Bilang 130, August
21, 1981).
Chapter III ________
UNFAIR LABOR PRACTICES OF LABOR
ORGANIZATIONS



LABOR RELATIONS: Azucena Vol. II
1. RESTRAINT OR COERCION BY LABOR Consequently, admission to membership may not
ORGANIZATION; INTERFERENCE BY UNION IS NOT be compelled. This rule, however, is qualified in the
ULP case of labor unions holding a monopoly in the
supply of labor, either in a given locality, or as
A labor organization commits ULP when it restrains regards a particular employer by reason of a closed-
or coerces employees in their right to self- shop or similar agreements. In such case, qualified
organization. This provision of Art. 249(a) parallels applicants may not be arbitrarily excluded from
with Art. 248(a). But “interference” is left out. This membership and their admission may not be barred
deliberate omission is “the equivalent of license of by unreasonable rules.
labor organization to engage in those practices
which, at the hands of an employer, would It is well settled that labor unions are not entitled to
constitute actionable unfair labor practices by way arbitrarily exclude qualified applicants for membership,
of “interference.” In other words, a labor and a closed-shop provision would not justify the
organization may interfere in the employees’ right employer in discharging, or a union in insisting upon the
discharge of, an employee whom the union thus refuses
to self-organization as long as the interference does
to admit to membership, without any reasonable ground
not amount to restraint or coercion. therefor.4 Needless to say, if said unions may be
compelled to admit new members, who have the
Interference by a labor organization is not ULP requisite qualifications, with more reason may the law
because interfering in the exercise of the right to and the courts exercise the coercive power when the
organize is itself a function of self-organizing. employee involved is a long standing union member,
who, owing to provocations of union officers, was
1.1 Coercing Participation in Strike impelled to tender his resignation, which he forthwith
withdrew or revoked. Surely, he may, at least, invoke the
The provision is violated by a union’s restraining or rights of those who seek admission for the first time, and
cannot arbitrarily he denied readmission.
coercing an employee in the exercise of his right to

refuse to participate in or recognize a strike. The Court stresses, however, that union security clauses
Similarly, violation is committed when a union are also governed by law and by principles of justice, fair
threatens employees with bodily harm in order to play, and legality. Union security clauses cannot be used
force them to strike. by union officials against an employer, much less their
own members, except with a high sense of responsibility,
2. UNION-INDUCED DISCRIMINATION fairness, prudence, and judiciousness.

The law forbids as ULP union attempts to cause an A union member may not be expelled from her union,
employer to grant advantages for union members and consequently from her job, for personal or
impetuous reasons or for causes foreign to the closed-
over non-members, for union members in good
shop agreement and in a manner characterized by
standing over suspended or expelled members, for arbitrariness and whimsicality.
union members over permit holders, for members
of the union executive board over more senior 2.2 Not Disloyalty to Ask Help from Another Union
employees, for members of one union over
members of another union, or for members of one 3. REFUSAL TO BARGAIN
local over members of another local.
ULP under Art. 249(c) is intended to insure that
The forbidden discrimination may refer to terms of unions approach the bargaining table with the same
hiring or firing, in layoff, in seniority, or in benefits. attitude of willingness to agree as the Act requires
of management.
2.1 Arbitrary Use of Union Security Clause
A union violates its duty to bargain collectively by
The broad rule is that the union has the right to entering negotiations with a fixed purpose of not
determine its membership and to prescribe the reaching an agreement or signing a contract.
conditions for the acquisition and retention thereof.


LABOR RELATIONS: Azucena Vol. II
4. FEATHERBEDDING AND MAKE-WORK
ARRANGEMENTS (e) The Board shall exert all efforts to settle disputes
amicably and encourage the parties to submit their
Art. 249(d) refers to featherbedding. case to a voluntary arbitrator. (As amended by
“Featherbedding” is the name given to employee Section 20, Republic Act No. 6715, March 21, 1989).
practices which create or spread employment by ________
“unnecessarily” maintaining or increasing the
number of employees used, or the amount of time Article 251. Duty to bargain collectively in the
consumed, to work on a particular job. absence of collective bargaining agreements. – In
the absence of an agreement or other voluntary
In spite of employee assertions that these so-called arrangement providing for a more expeditious
featherbedding practices are directly related to job manner of collective bargaining, it shall be the duty
security, health and safety, most courts at common of employer and the representatives of the
law found these practices to be economically employees to bargain collectively in accordance
wasteful and without any legitimate employee with the provisions of this Code.
justification. ________
________
1. NATURE OF COLLECTIVE BARGAINING
Title VII
COLLECTIVE BARGAINING AND 1.1 Definition
ADMINISTRATION OF AGREEMENTS
Collective bargaining or negotiations towards a
ART. 250. Procedure in collective bargaining. - The collective agreement is a democratic framework to
following procedures shall be observed in collective stabilize the relation between labor and
bargaining: management and to create a climate of sound and
stable industrial peace. It is a mutual responsibility
(a) When a party desires to negotiate an of the employer and the Union and is characterized
agreement, it shall serve a written notice upon the as a legal obligation.
other party with a statement of its proposals. The
other party shall make a reply thereto not later than Collective bargaining includes four related but
ten (10) calendar days from receipt of such notice; distinguishable processes:
(1) negotiation between representatives of the
(b) Should differences arise on the basis of such management and the union over “wages, hours,
notice and reply, either party may request for a and other terms of employment;”
conference which shall begin not later than ten (10)
calendar days from the date of request. (2) the execution of a written contract embodying
the terms agreed upon;
(c) If the dispute is not settled, the Board shall
intervene upon request of either or both parties or (3) negotiation of any question arising as to the
at its own initiative and immediately call the parties interpretation or application of the contract; and
to conciliation meetings. The Board shall have the
power to issue subpoenas requiring the attendance (4) negotiation over the terms of a new contract or
of the parties to such meetings. It shall be the duty proposed modifications, when an existing
of the parties to participate fully and promptly in agreement is validly opened for negotiations.
the conciliation meetings the Board may call;
Collective bargaining is a system made up of a set of
(d) During the conciliation proceedings in the Board, continuous processes; it is customary and helpful to
the parties are prohibited from doing any act which distinguish negotiation of contracts (the
may disrupt or impede the early settlement of the “legislative” phase of the union-employer
disputes; and relationship), administration of contracts (the



LABOR RELATIONS: Azucena Vol. II
“executive phase), and interpretation or application conditions under which he works, and a rule of law
of contracts (the “judicial” phase). is substituted for absolute authority.

In common usage as well as in legal terminology, 1.3 Strength of the Collective Bargaining Method
collective bargaining denotes negotiations looking
forward to a collective agreement. However, it does Collective bargaining is also a means of ensuring
not end with the execution of an agreement. It is a worker’s participation in decision-making. The
continuous process. It requires both parties, the notion that workers are entitled to participate in
employer and duly authorized representatives of setting the terms under which they are to work is
employees, to deal with each other with open and inherent in collective bargaining; even the most
fair minds and sincerely endeavor to fight the rudimentary form of collective bargaining involves a
obstacles in the process to stabilize employer- transfer of certain issues, be it only wages, from
employee relationship. the area of unilateral to the area of bilateral
decision-making.
1.1a CBA Defined
It provides an opportunity for the exchange of
A collective bargaining agreement (CBA), as used in information tending to enhance the understanding
Article 252 of the Labor Code, refers to a contract of the parties for each other problems and
executed upon request of either the employer or objectives, both where they differ and where they
the exclusive bargaining representative are identical.
incorporating the agreement reached after
negotiations with respect to wages, hours of work Moreover—and this is very important—it provides
and all other terms and conditions of employment, an orderly procedure by which each side can seek
including proposals for adjusting any grievances or to present to the other the best possible case for
questions arising under such agreement. the satisfaction of its particular demands.

While the terms and conditions of a CBA constitute the It elicits the consent of those who will have to live
law between the parties, it is not, however, an ordinary under the terms of any agreement derived from the
contract to which is applied the principles of law bargaining process. Stability is an important
governing ordinary contracts. A CBA, as a labor contract element in employment, and “consent assures
within the contemplation of Article 1700 of the Civil Code
stability because parties who have accepted an
of the Philippines which governs the relations between
labor and capital, is not merely contractual in nature but
agreement will live by its terms.”
impressed with public interest, thus, it must yield to the
common good. As such, it must be construed liberally 2. EMERGENCE OF COLLECTIVE BARGAINING
rather than narrowly and technically, and the courts
must place a practical and realistic construction upon it, First in Great Britain, but not much later in other
giving due consideration to the context in which it is countries, working men sought to protect
negotiated and purpose which it is intended to serve. themselves against the harsh effects of new
machines, new methods of production, new
A CBA is more than a contract; it is a generalized divisions of labor and new intensities of competition
code to govern a myriad of cases which the by forming organizations capable of representing
draftsmen wholly anticipate. It covers the whole their interests as a group vis-à-vis employees and
employment relationship and prescribes the rights the State.
and duties of the parties.
2.1 Originator
1.2 Rationale
The credit for coining the expression belongs to
By “collective bargaining” the employee shares Beatrice Webb, who first used it in 1891 in her
through his chosen representatives in fixing the study on “The Cooperative Movement in Great
Britain.”



LABOR RELATIONS: Azucena Vol. II
mechanics of collective bargaining is set in motion
In non-English speaking countries, particularly on only when the following jurisdictional preconditions
the European continent, where the process of are present, namely:
collective bargaining has an equally long history, the (1) possession of the status of majority
emphasis was placed on the term “collective representation of the employees' representative in
agreement” because during the early period the accordance with any of the means of selection or
workers aimed not so much at establishing the designation provided for by the Labor Code;
procedure of bargaining itself as at having such
agreements recognized and enforced as legally (2) proof of majority representation; and
binding contracts.
(3) a demand to bargain under Article 251, par. (a)
2.2 Adoption in the Philippines of the New Labor Code.

In the Philippines the idea of collective bargaining An employer’s duty to recognize and bargain
first gained formal and official recognition through collectively with a union as the collective bargaining
Commonwealth Act No. 213, approved by President representative of his employees does not arise until
Manuel L. Quezon on November 21, 1936. after the union requests the employer to bargain.
Hence, an employer is not in default respecting the
But it is the Industrial Peace Act (RA No. 875, duty to bargain until a request therefor has been
approved by President Elpidio Quirino on June 17, made.
1953), that defined collective bargaining and
outlined its procedure. It is essential to the right of a putative bargaining agent
to represent the employees that it be the delegate of a
3. PARTIES TO COLLECTIVE BARGAINING majority of the employees and, conversely, an employer
is under duty to bargain collectively only when the
bargaining agent is representative of the majority of the
The duty to bargain collectively arises only between
employees. A natural consequence of these principles is
the “employer” and its “employees”. Where neither that the employer has the right to demand of the
party is an “employer” nor an "employee" of the asserted bargaining agent proof of its representation of
other, no such duty would exist. Needless to add, its employees. Having the right to demonstration of this
where there is no duty to bargain collectively the fact, it is not an 'unfair labor practice' for an employer to
refusal to bargain violates no right. refuse to negotiate until the asserted bargaining agent
has presented reasonable proof of majority
The parties, then, to collective bargaining as representation. It is necessary however, that such
traditionally understood, are the employer and the demand be made in good faith and not merely as a
employees represented by their labor union. pretext or device for delay or evasion. The employer's
right is however to reasonable proof.

Article. 212. (j) "Bargaining representative" means a

legitimate labor organization whether or not employed 4.1 Bargaining with Minority Union, ULP
by the employer.
Where a majority representative has been
The bargaining representative of the employees is designated, it is an unfair labor practice, [for the
an entity—the union—and not the officers of the employer] as a refusal of collective bargaining, to
union. deal and negotiate with the minority
representative.
4. JURISDICTIONAL PRECONDITIONS OF
COLLECTIVE BARGAINING On the union side, where there exists a legitimate
issue as to which of several unions is the legitimate
While it is a mutual obligation of the parties to representative of employees, it is ULP for one of the
bargain, the employer, however, is not under any unions to stage a strike and demand that the
legal duty to initiate contract negotiation. The employer sit down with it for collective bargaining.



LABOR RELATIONS: Azucena Vol. II
5. WHEN BARGAINING SHOULD BEGIN
Section 4. Procedure in single enterprise bargaining - A
If the three jurisdictional preconditions are present, recognized or certified labor union that desires to
the collective bargaining should begin within the 12 negotiate with its employer shall submit such intention in
writing to the employer, together with its proposals for
months following the determination and
collective bargaining.
certification of the employees’ exclusive bargaining

representative. This period is known as the
The recognized or certified labor union and its
“certification year.”
employer may adopt such procedures and

processes they may deem appropriate and
The employer’s duty to bargain during the
necessary for the early termination of their
certification year has been held to extend
negotiations. They shall name their respective
throughout the entire year. Absent unusual
representatives to the negotiation, schedule the
circumstances, an employer commits an unfair
number and frequency of meetings, and agree on
labor practice by refusing to bargain with the union
wages, benefits and other terms and conditions of
during its certification year, notwithstanding the
work for all employees covered in the bargaining
repudiation of the union by a majority of its
unit.
employees before the expiration of the one-year

period. The rule is the same whether the union lost
7. MULTI-EMPLOYER BARGAINING
its majority as a result of the employer’s unfair

labor practices or through no fault of the employer.
Collective bargaining may take place at the national,

industry, or enterprise level.
A union which has been certified by the NLRB as a

bargaining representative for a particular unit
The Philippines so far has tried only enterprise-
enjoys an irrefutable presumption of a majority
level, or decentralized bargaining.
status for one year, absent special circumstances.

Following the expiration of the one-year
7.1 Rationale of Multi-employer Bargaining
certification period, there continues to be a

presumption in favor of a union majority, though
When a number of employees join forces for
the presumption is rebuttable. Employee turnover
purposes of collective bargaining, the unit structure
does not constitute “unusual circumstances”
is described as a multi-employer bargaining unit.
shortening the period.
The structure may consist of an association

representing employers, or even a whole industry,
6. SINGLE ENTERPRISE BARGAINING PROCEDURE
or it may be composed of only a few employers who
BROADLY DESCRIBED
bargain as a group, or through an association.


The law gives primacy to free collective bargaining
Competitive pressures are the dominant forces that
(Art. 211) and allows the parties to devise their
encourage both unions and employers to enter into
bargaining rules (Art. 251). This is the basic reason
multi-employer or industry-wide bargaining
the bargaining procedure is governed primarily by
relationships. Small employers in highly competitive
agreement of the parties.
and labor-intensive fields may find it easier to

operate with uniformity of labor cost.
In the presence of validly agreed procedure, the

Labor Code procedure applies suppletorily only.
The multi-employer unit is particularly

advantageous to both sides in industries composed
D.O. No. 40-03 supplements the codal provisions:
of many small, financially weak employers.


Section 3. When single enterprise bargaining available. -
Any voluntarily recognized or certified labor union may
Multi-employer bargaining provides both
demand negotiations with its employer for terms and management and unions with significant cost
conditions of work covering employees in the bargaining savings in negotiation of labor agreements. It is
unit concerned. cheaper to negotiate one master multi-employer


LABOR RELATIONS: Azucena Vol. II
agreement than a number of single-employer
agreements. 1) the names of the labor unions who desire to avail of
multi-employer bargaining;
There are, however, other considerations than
2) each labor union in the employer unit;
costs, such as intra-organizational issues, that the

parties take into account before opting for multi- 3) the fact that each of the labor unions are the
employer units. Multi-employer bargaining may not incumbent exclusive bargaining agents for their
only overlook the needs of various employee respective employer units;
groups, but also ignore particular requirements of
individual employers. 4) the duration of the collective bargaining agreements,
if any, entered into by each labor union with their
What may be readily acceptable to one employer respective employers.
may be considered as financially disastrous by
another. Legitimate labor unions who are members of the same
registered federation, national, or industry union are

exempt from execution of this written agreement.
To arrive at multi-employer agreements is much
more difficult than to arrive at single-employer (b) The legitimate labor unions who desire to bargain
contracts. The expanded size of the unit composed with multi-employers shall send a written notice to this
of many heterogeneous groups leads to intensive effect to each employer concerned. The written
intra-organizational bargaining both on the union’s agreement stated in the preceding paragraph, or the
and on the employer’s side. At times, these intra- certificates of registration of the federation, national, or
organizational pressures may lead to lengthy delays industry union, shall accompany said notice.
in negotiations and even to breakdown of
bargaining. Employers who agree to group themselves or use their
existing associations to engage in multiemployer

bargaining shall send a written notice to each of their
7.2 Multi-employer Bargaining Procedure (D.O. No. counterpart legitimate labor unions
40-03) indicating their desire to engage in multi-employer
bargaining. Said notice shall indicate the following:
Section 5. When multi-employer bargaining available. - A
legitimate labor union(s) and employers may agree in 1) the names of the employers who desire to avail of
writing to come together for the purpose of collective multi-employer bargaining;
bargaining, provided:
(a) only legitimate labor unions who are incumbent 2) their corresponding legitimate labor organizations;
exclusive bargaining agents may participate and
negotiate in multi-employer bargaining; 3) the fact that each corresponding legitimate union is
any incumbent exclusive bargaining agent;
(b) only employers with counterpart legitimate labor
unions who are incumbent bargaining agents may 4) the duration of the current collective bargaining
participate and negotiate in multi-employer bargaining; agreement, if any, entered into by each employer with
and the counterpart legitimate labor union.

(c) only those legitimate labor unions who pertain to (c) Each employer or concerned labor union shall express
employer units who consent to multi-employer its willingness or refusal to participate in multi-employer
bargaining may participate in multi-employer bargaining. bargaining in writing, addressed to its corresponding
exclusive bargaining agent or employer. Negotiations
Section 6. Procedure in multi-employer bargaining. - may commence only with regard to respective employers
Multi-employer bargaining may be initiated by the labor and labor unions who consent to participate in multi-
unions or by the employers. employer bargaining;
(a) Legitimate labor unions who desire to negotiate with
their employers collectively shall execute a written (d) During the course of negotiations, consenting
agreement among themselves, which shall contain the employers and the corresponding legitimate labor unions
following: shall discuss and agree on the following:



LABOR RELATIONS: Azucena Vol. II
party shall terminate nor modify such agreement
1) the manner by which negotiations shall proceed; during its lifetime. However, either party can serve
a written notice to terminate or modify the
2) the scope and coverage of the negotiations and the agreement at least sixty (60) days prior to its
agreement; and
expiration date. It shall be the duty of both parties

3) where appropriate, the effect of the negotiations on
to keep the status quo and to continue in full force
current agreements or conditions of employment among and effect the terms and conditions of the existing
the parties. agreement during the 60-day period and/or until a
new agreement is reached by the parties.
Section 7. Posting and registration of collective ________
bargaining agreement. - Two (2) signed copies of
collective bargaining agreement reached through multi- 1. DUTY TO BARGAIN DEFINED
employer bargaining shall be posted for at least five ( 5)
days in two conspicuous areas in each workplace of the The law contemplates and defines two situations
employer units concerned. Said collective bargaining
when the duty to bargain exists: Situation one,
agreement shall affect only those employees in the
bargaining units who have ratified it.
when there is yet no collective bargaining
agreement (Art. 252), and Situation two, where a
The same collective bargaining agreement shall be CBA exists (Art. 253).
registered with the Department in accordance with the
following Rule. For Situation One, the duty to bargain means in
essence the mutual obligation of the employer and
7.4 Optional the employees’ majority union to meet and
convene.
Under D.O. No. 40-03 multi-employer bargaining is
purely optional for employers and unions. The purposes of the meeting and convening are:

Unlike other bargaining units, the multi-employer (1) to negotiate an agreement on the subjects of:
unit is based primarily on the consent of the firms
involved. (a) wages, (b) hours of work, and (c) all other terms
________ and conditions of employment including proposals
for adjusting grievances or questions arising under
Article 252. Meaning of duty to bargain collectively. such agreement; and
– The duty to bargain collectively means the
performance of a mutual obligation to meet and (2) to execute a contract incorporating such
convene promptly and expeditiously in good faith agreement if requested by either party.
for the purpose of negotiating an agreement with
respect to wages, hours of work and all other terms The kind of compliance required is prompt,
and conditions of employment including proposals expeditious, and in good faith.
for adjusting any grievances or questions arising
under such agreement and executing a contract The limitations or reservations of the duty are that
incorporating such agreements if requested by it does not compel any party to agree to a proposal
either party but such duty does not compel any or to make a concession.
party to agree to a proposal or to make any
concession. For Situation Two, the duty to bargain means all of
________ the above and, additionally, the obligation not to
terminate or modify the CBA during its lifetime. But
Article 253. Duty to bargain collectively when there 60 days before the CBA expires, either party may
exists a collective bargaining agreement. – When notify the other in writing that it desires to
there is a collective bargaining agreement, the duty terminate or modify the agreement. During the 60-
to bargain collectively shall also mean that neither day period and until a new agreement is reached,



LABOR RELATIONS: Azucena Vol. II
the CBA remains in full force and effect; the parties that refusal by an employer to bargain collectively
are duty-bound to keep the status quo. The law with his employees constitutes “interference” with
therefore provides for automatic renewal or the latter’s right of self-organization.
extension of the CBA. This 60-day period under Art.
253 refers to submission of proposals to renegotiate 2.1 Unresolved Petition for Union Cancellation
the nonrepresentational provisions of the CBA. It
does not always coincide with the 60-day period 2.2 Selling the Company
mentioned in Articles 253-A and 256 pertaining to
“freedom period” to resolve representation contest If an employer is guilty of unfair labor practice when
between unions he directly discharges his employees to forestall a
demand for collective bargaining, he certainly
1.1 Four Forms of ULP in Bargaining should not be allowed to evade responsibility if he
indirectly causes that discharge by selling to a
(1) failure to meet and convene; (2) evading the company that he knows is unwilling to accept his
mandatory subjects of bargaining; (3) bad faith in employees.
bargaining, including failure or refusal to execute
the collective agreement, if requested; and (4) gross The basic rule is that if the transfer of assets and
violation of the CBA. employees from one employer to another leaves
intact the identity of the employing enterprise, the
2. FIRST U.L.P. IN BARGAINING: FAILURE OR transferor’s duty to recognize and bargain with an
REFUSAL TO MEET AND CONVENE incumbent union devolves upon the transferee as
“successor employer.” That means that an acquiring
An employer is guilty of an unfair labor practice in employer is a successor to the bargaining
refusing to bargain with the representative of a obligations of his predecessor if there is a continuity
majority of his employees. To bargain in good faith, in the business operation. Only a high degree of
an employer must not only meet and confer with enterprise continuity will justify imposing
the union which represents his employees, but also obligations under a contract with the union to
must recognize the union for the purpose of which the new employer was not a party.
collective bargaining. In addition, he must recognize
the union as the bargaining representative of all the A mere change in ownership of a business is
employees in the appropriate bargaining unit, even insufficient to alter a union’s status as bargaining
if they are not all members of the union. representative.

The duty to bargain extends beyond the period of 2.3 Successor Employer: Continuity and Identity
contract negotiations, and applies to labor-
management relations during the term of the In making the determination as to whether an
agreement. Since a collective bargaining agreement employer is successor, the NLRB looks to the totality
does not define all the rights and obligations of the of circumstances to determine whether there has
employer and his employees, negotiation of been a substantial and material alteration in the
grievances is part and parcel of the bargaining employing enterprise. If there is a substantial and
process. material alteration in the employing enterprise, the
new employer need not bargain with the incumbent
The failure of refusal of an employer to bargain union.
collectively with his employees constitutes an
enjoinable unfair labor practice not only under the 2.4 Conversion to Independent Franchise or
subdivision of the Act dealing expressly with Operation
“collective bargaining,” but also under the
subsection making it an “unfair labor practice” to: A decision to withdraw capital from a company-
“interfere with, restrain or coerce employees in the operated facility and relinquish the operating
exercise” of their guaranteed rights, on the theory control to an independent dealership lies very much



LABOR RELATIONS: Azucena Vol. II
at the core of entrepreneurial control, and hence is (4) the rank-and-file unit includes supervisors or
not a mandatory subject of bargaining inappropriate otherwise;

2.5 Do Economic Exigencies Justify Refusal to (5) the demand for recognition and bargaining is
Bargain? made within the year following a certification
election in which the clear choice was no union and
An employer has been held not guilty of a refusal to no ad interim significant change has taken place in
bargain by adamantly rejecting the union’s the unit;
economic demands where he is operating at a loss,
on a low profit margin, or in a depressed industry, (6) the union makes unlawful bargaining demands.
as long as he continues to negotiate.
2.7 Alleged Interference in the Selection of the
2.6 Acts not Deemed Refusal to Bargain Union’s Negotiation Panel

The duty to bargain is not violated by: In order to show that the employer committed ULP
under the Labor Code, substantial evidence is required to
(1) adoption of an adamant bargaining position in support the claim. Substantial evidence has been defined
good faith, particularly when the company is as such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.
operating at a loss;


2.8 Non-reply to Proposal; CBA Imposed on
(2) refusal to bargain over demands for commission
Employer
of unfair labor practices;


Collective bargaining, designed to stabilize the relation
(3) refusal to bargain during period of illegal strike. between labor and management and to create a climate
of sound and stable industrial peace. It is a legal
If a union engages in an illegal strike, the employer obligation, so much so that Article 248 of the Labor Code
has no obligation to bargain until he is notified that makes it an unfair labor practice for an employer to
the illegal strike has been terminated. refuse "to meet and convene promptly and expeditiously
in good faith for the purpose of negotiating an
Where, pursuant to an honest doubt, the employer agreement with respect to wages, hours of work, and all
has demanded additional proof or acquisition of an other terms and conditions of employment.
official certification of bargaining agency, there is
We agree with the pronouncement that it is not
no obligation or duty on the employer’s part to
obligatory upon either side of a labor controversy to
enter into negotiations until the demanded proof is precipitately accept or agree to the proposals of the
presented pending the certification proceedings, other. But an erring party should not be tolerated and
unless it can be established that the demand lacks allowed with impunity to resort to schemes feigning
in good faith and is intended as an obstruction to negotiations by going through empty gestures.
negotiations.
2.8a Repetition in Divine Word University
Neither is the duty to bargain violated where:
“A company’s refusal to make counter proposal if
(1) there is no request for bargaining; considered in relation to the entire bargaining process,
may indicate bad faith and this is especially true where
(2) the union seeks recognition for an the Union’s request for a counter proposal is left
inappropriately large unit; unanswered.” Moreover, the Court added in the same
case that “it is not obligatory upon either side of a labor

controversy to precipitately accept or agree to the
(3) the union seeks to represent some persons who proposals of the other. But an erring party should not be
are excluded from the Act; tolerated and allowed with impunity to resort to
schemes feigning negotiations by going through empty
gestures.”



LABOR RELATIONS: Azucena Vol. II

3. SECOND U.L.P. IN BARGAINING: EVADING THE (4) Bonuses;
MANDATORY SUBJECTS
(5) Pensions and retirement plans;
It is the obligation of the employer and the
employees’ representative to bargain with each (6) Seniority;
other with respect to “wages, hours, and other
terms and conditions of employment.” They are (7) Transfer;
statutory or “mandatory” proposals. An employer’s
refusal to negotiate a mandatory subject of (8) Lay-offs;
bargaining is an unfair labor practice although the
employer has every desire to reach agreement and (9) Employee workloads;
earnestly and in all good faith bargains to that end.
On the other hand, an employer’s duty to bargain is (10) Work rules and regulations;
limited to the mandatory bargaining subjects; as to
other matters, he is free to bargain or not to (11) Rent of company houses;
bargain.
(12) Union security arrangements.
A mere remote, direct, or incidental impact is
insufficient to render a subject a mandatory subject 3.1a Wage Agreement; “Solomonic” Approach
of bargaining; in order for a matter to be subject to
mandatory collective bargaining, it must materially We take note of the "middle ground" approach
or significantly affect the terms or conditions of employed by the Secretary in this case which. we do not
employment. necessarily find to be the best method of resolving a
wage dispute. Merely finding the midway point between
the demands of the company and the union, and
3.1 Wages and Employment Conditions
"splitting the difference" is a simplistic solution that fails
to recognize that the parties may already be at the limits
The term “wages,” as used in 29 USCS Sec. 158(d), of the wage levels they can afford. It may lead to the
has been held to include not only compensation but danger too that neither of the parties will engage in
also other emoluments of value furnished by the principled bargaining; the company may keep its position
employer to his employees. Under our Labor Code, artificially low while the union presents an artificially high
“wage” refers to remuneration or earnings, position, on the fear that a "Solomonic" solution cannot
however designated, capable of being expressed in be avoided. Thus, rather than encourage agreement, a
terms of money, etc. "middle ground approach" instead promotes a "play
safe" attitude that leads to more deadlocks than to
Since the passage of the Taft-Hartley Act, the National successfully negotiated CBAs.
Labor Relations Board has held that industrial pensions,
group insurance, and merit increases all are matters 3.2 Workloads and Work Rules
about which employers must bargain collectively.
Employee workloads are a mandatory subject of
The following are examples of matters considered bargaining. Employer rules concerning coffee
as mandatory subjects of bargaining: breaks, lunch periods, smoking, employee
discipline, and dress are also mandatory subjects of
(1) Wages and other types of compensation, bargaining, as are plant safety rules and general
including merit increases; regulations.

(2) Working hours and working days, including work Company rules relating to safety and work practices
shifts; come within the meaning of the phrase “other
terms and conditions of employment” as used in
(3) Vacations and holidays; the Act and, therefore, constitute a mandatory
subject of collective bargaining.


LABOR RELATIONS: Azucena Vol. II
3.6 No-Lockout Clause; Clause Fixing Contractual
3.2a Code of Conduct Term

Work rules and regulations are commonly compiled An employer’s statutory duty to bargain requires
into a booklet usually called “Code of Discipline” or him to negotiate over the union’s proposal that
“Code of Conduct.” Such dos and don’ts for their agreement include a clause binding him not to
employees of the enterprise are work rules, forming lock out the employees. An employer’s refusal to
part of terms and conditions of employment, that bargaining over the duration of the contract to be
are proper subjects of collective bargaining. Hardly entered into is also an unfair labor practice. But an
may the employer contend that they are “non- employer’s obligation to enter into a collective
negotiable” matters. bargaining agreement does not require that the
employer enter into an unalterable obligation for an
3.3 Management Prerogatives Clause extended period of time, and many collective
bargaining agreements contain a clause permitting
An employer does not commit an unfair labor termination or modification by either party upon
practice by insisting, to the point of a bargaining prescribed notice.
impasse, on the inclusion in the contract of a
management prerogatives clause, even though 3.7 Signing Bonus
some of the matters covered by the clause are
“conditions of employment” which are mandatory Signing bonus is a grant motivated by goodwill
subjects of bargaining under 29 USCS Sec. 158(d). created when a CBA is successfully negotiated and
Thus, an employer’s insistence that its decisions signed between the employer and the union.
regarding hiring and tenure of employment should Where goodwill does not exist, why ask for a signing
not be reviewable by arbitration is not a refusal to bonus?
bargain.
In contractual terms, a signing bonus is justified by and is
3.4 Union Discipline Clause the consideration paid for the goodwill that existed in
the negotiations that culminated in the signing of a CBA.
An employer may bargain to an impasse over his Without the goodwill, the payment of a signing bonus
cannot be justified and any order for such payment, to
proposal that the union eliminate a piecework
our mind, constitutes grave abuse of discretion.
ceiling imposed by a union rule which subjects
In short, if the reason behind a signing bonus is
members to discipline for exceeding the production
absent, no signing bonus need be given.
quota. However, an employer’s insistence to the

point of a bargaining impasse on the union’s
3.8 No Duty to Agree Even on Mandatory Subjects
withdrawal of fines imposed on member-employees

who crossed a picket line around the employer’s
The Act does not compel agreements between
plant is an unlawful refusal to bargain, since the
employers and employees, and neither party is
right not to withdraw fines is an internal union
legally obligated to yield even on a mandatory
affairs, a matter involving relations between
bargaining subject. Where the subject of the
employees and their unions, and therefore not a
dispute is a mandatory bargaining subject, either
mandatory bargaining item.
party may bargain to an impasse as long as he

bargains in good faith. The duty to bargain does not
3.5 Arbitration, Strike-Vote, or No-Strike Clause
obligate a party to make concessions or yield a

position fairly held. Hence, an employer’s adamant
An employer may lawfully bargain to an impasse
insistence on a bargaining position is not necessarily
over his proposal that the collective bargaining
a refusal to bargain in good faith.
agreement include an arbitration clause or a no-

strike clause which prohibits the employees from
Even if the negotiating party thumbs down the
striking during the life of the agreement.
other party’s proposals, there is no violation of the



LABOR RELATIONS: Azucena Vol. II
duty to bargain—hence, no ULP—as long as the significance on the right of a party to insist on his
negative reply can be explained in good faith. position to the point of stalemate. A party may refuse to
enter into a collective bargaining contract unless it
3.9 Non-mandatory Subjects includes a desired provision as to a matter which is a
mandatory subject of collective bargaining; but a refusal

to contract unless the agreement covers a matter which
An employer cannot insist, to the point of creating a is not a mandatory subject is in substance a refusal to
bargaining impasse, on the inclusion of a provision bargain about matters which are mandatory subjects of
outside the scope of the statutory bargaining collective bargaining, and it is no answer to the charge of
subjects, even if he acts in good faith. On the other refusal to bargain in good faith that the insistence on the
hand, it is lawful to insist on the inclusion of a disputed clause was not the sole cause of the failure to
provision in a collective bargaining agreement if the agree or that agreement was not reached with respect to
provision is within the scope of a statutory subject other disputed clauses.
of bargaining.
Stated in another way, the ruling means that
An employer bargains to an impasse over a non- bargaining to the point of deadlock may or may not
mandatory bargaining subject when he refuses to amount to bargaining in bad faith depending on
reach any agreement with the union unless the whether the insistence refers to a mandatory or a
union capitulates to him on that subject. However, non-mandatory subject of bargaining.
it has been held that a bargaining impasse may be
reached over a non-mandatory bargaining subject The reason is that the duty to bargain requires
although that subject is not the sole cause for the meeting and convening on terms and conditions of
parties’ failure to agree. When a subject under employment but does not require assent to the
discussion is not mandatory, it may be discussed if other party’s proposals.
both parties agree, but a strike or lockout may not
be used to compel a negotiation or agreement. Over a non-mandatory subject, on the other hand, a
party may not insist on bargaining to the point of
While most matters that might be discussed or impasse, otherwise his insistence can be construed
proposed in collective bargaining are likely to bear as bargaining in bad faith. It may be construed as
some relation, even if tenuous, to “wage, hours, evasion of the duty to bargain; such evasion is ULP.
and other terms and conditions of employment,”
not all proposals that somehow respond to a The above rulings do not mean that non-mandatory
problem that is customarily bargained about may subjects cannot be proposed or that the proponent
themselves be insisted upon to impasse. By once cannot demand serious discussion of such proposal.
bargaining and agreeing on a permissive subject of What the rulings forbid is the posture of making
bargaining, the parties do not make the subject a settlement on a non-mandatory subject a
mandatory topic of future bargaining. precondition to the discussion or settlement of a
mandatory subject. If a non-mandatory subject is
3.10 Bargaining to the Point of Impasse: Not proposed and agreed upon, the agreeing party, by
necessarily Bad Faith itself, is binding.

The adamant insistence on a bargaining position to 3.11 When Is There Deadlock or Impasse?
the point where the negotiations reach an impasse
does not establish bad faith. Neither can bad faith A bargaining impasse over an issue exists where
be inferred from a party’s insistence on the good faith bargaining on the part of the parties has
inclusion of a particular substantive provision unless failed to resolve the issue and there are no definite
it concerns trivial matters or is obviously plans for further efforts to break the deadlock.
intolerable.
“Impasse,” within the meaning of the federal labor
The question as to what are mandatory and what are laws, presupposes reasonable effort at good faith
merely permissive subjects of collective bargaining is of bargaining which, despite noble intentions, does



LABOR RELATIONS: Azucena Vol. II
not conclude in an agreement between the parties. Art. 217 of the Labor Code, is charged with the
In the NLRB’s view, whether a bargaining impasse compulsory arbitration of certain labor cases. There is
exists is a matter of judgment dependent on such nothing in the law that prohibits these labor arbiters
factors as the bargaining history, the parties’ good from also acting as voluntary arbitrators as long as the
parties agree to have him hear and decide their dispute.
faith in negotiations, the length of the negotiations,

the importance of the issue or issues as to which
4. THIRD U.L.P. IN BARGAINING: BAD FAITH
there is disagreement, and the contemporaneous

understanding of the parties as to the state of
Bargaining deadlock may be precipitated not only
negotiations.
by hard-line positions on mandatory or non-

mandatory subjects. It may also arise because of
3.11a Duty to Bargain When There Is Deadlock or
lack of good faith in bargaining.
Impasse


Good-faith bargaining demands more than sterile
Deadlock does not mean the end of bargaining. It
and repetitive discussion of formalities precluding
signals rather the need to continue the bargaining
actual negotiation, more than formal replies which
with the assistance of a third party as conciliator or
constitute in effect a refusal to treat with the union,
arbitrator whose first aim is to get the parties back
and more than a willingness to enter upon a sterile
to the negotiating table and help them craft a win-
discussion of union-management differences. It
win solution.
requires a sincere effort to reach agreement,

although it does not require agreement itself.
3.11b Strike or Lockout in Case of Deadlock
Moreover, the duty to bargain does not end with

the negotiation of the agreement.
Bargaining may proceed smoothly—and this is the

wish of most negotiation panels—but it may also be
The duty to bargain collectively may be violated
marred by insinuations, misunderstandings, and
without a general failure of subjective good faith,
apparently irreconcilable bargaining positions.
and there is no occasion to consider the issue of
Deadlock develops. In fact, deadlock may occur
good faith if a party refuses even to negotiate in
anytime for various reasons such as unacceptability
fact about any of the mandatory subjects. AN
of a proposal or counter proposal, grandstanding of
employer cannot be guilty of a refusal to bargain if
a negotiator, autocratic or arrogant stance, or
the union is not itself bargaining in good faith.
imprecise wording of a stipulation.


4.1 Determination of Good Faith
The law (Art. 263) recognizes bargaining deadlock

as a valid reason to declare a strike or lockout.
The crucial question whether or not a party has met his
Strike/ lockout presents a major deviation from the statutory duty to bargain in good faith typically turns on
preferred smooth route of bargaining. At this point the facts of the individual case. There is no per se test of
of bargaining scenario, strike/ lockout is supposed good faith in bargaining. Good faith or bad faith is an
to be a method of resolving an impasse, a device to inference to be drawn from the facts and is largely a
constrain the parties to end an impasse and go back matter for the NLRB’s expertise. To some degree, the
to the negotiation table. But strike/ lockout, while question of good faith may be a question of credibility.
meant to be a solution, frequently becomes a
problem in itself. A fair criterion of good faith in collective bargaining
requires that the parties involved deal with each
Although the union's petition was for "compulsory other with open and fair mind and sincerely
arbitration," the subsequent agreement of petitioner to endeavor to overcome obstacles or difficulties
submit the matter for arbitration in effect made the existing between them to the end that employment
arbitration a voluntary one. The essence of voluntary relations may be established and obstruction to the
arbitration, after all, is that it is by agreement of the free flow of commerce prevented. Mere pretended
parties, rather than compulsion of law, that a matter is
bargaining will not suffice; neither must the mind
submitted for arbitration. It does not matter that the
person chosen as arbitrator is a labor arbiter who, under
be hermetically sealed against the thought of



LABOR RELATIONS: Azucena Vol. II
entering into an agreement. To do less that is and without consulting the majority
required by the standards of good faith and conduct representative.”
is a refusal to bargain collectively and violates the
spirit and intent of the Act. Nonetheless, the prior adjudication of bad faith on
an earlier occasion is not itself substantial evidence
4.2 When Can Bargaining in Bad Faith Occur? of present bad faith.

Bargaining in bad faith is considered ULP under Art, As the Court held in the case of Kiok Loy v. NLRC, 141
248(g). But if one will be charged with bargaining in SCRA 179, 186 (1986), the company's refusal to make
bad faith, the charge should be raised while the counter-proposal to the union's proposed CBA is an
bargaining is in progress. When the bargaining is indication of its bad faith.
finished and the CBA has been executed voluntarily
by the parties, a charge of bargaining in bad faith is 4.3a Bad Faith: Surface Bargaining; Shifting
too late and untenable. Bargaining Positions; Blue Sky Bargaining

With the execution of the CBA, bad faith bargaining can “Surface bargaining,” which means a sophisticated
no longer be imputed upon any of the parties thereto. All pretense in the form of apparent bargaining, does
provisions in the CBA are supposed to have been jointly not satisfy the statutory duty to bargain. The duty is
and voluntarily incorporated therein by the parties. This not discharged by merely meeting together or
is not a case where private respondent exhibited an simply manifesting a willingness to talk. It requires
indifferent attitude towards collective bargaining more than a willingness to enter upon a sterile
because the negotiations were not the unilateral activity discussion of union-management differences.
of petitioner union. The CBA is proof enough that private Collective bargaining is not simply an occasion for
respondent exerted "reasonable effort at good faith
purely formal meetings between management and
bargaining."

labor while each maintains an attitude of “take it or
The union’s proposal, not being part of the signed leave it,” but presupposes a desire to reach an
contract, cannot serve as basis of holding the ultimate agreement to enter into a collective
management guilty of bad faith in bargaining or in bargaining contract. An employer’s proposals which
implementing their contract as signed. could not be offered with any reasonable
expectation that they would be accepted by the
4.3 Instances of Bad Faith: Delay of, or Imposing union constitute surface bargaining.
Time Limit on, Negotiations
Repeated shifts in position and attitude on the part
An unwarranted delay in negotiations may be of an employer whenever a tentative agreement is
evidence of bad faith on the part of the employer. reached are evidence of a refusal to bargain
However, an employer has been held not guilty of collectively in good faith. It has also been held that
bad faith for failing to complete a collective an employer cannot reject a union’s acceptance of
bargaining contract during a 3-year period, where the employer’s counter offer on the ground that the
many conferences had been held during the period, union had earlier rejected the offer.
even though the employer had insisted on a no-
strike clause and had raised wages during Surface bargaining is defined as "going through the
negotiations for the purpose of meeting motions of negotiating" without any legal intent to reach
competition. an agreement. The resolution of surface bargaining
allegations never presents an easy issue. The
determination of whether a party has engaged in
The National Labor Relations Board of the United
unlawful surface bargaining is usually a difficult one
States reported that “lack of good faith is indicated because it involves, at bottom, a question of the intent of
where the employer engages in unfair labor the party in question, and usually such intent can only be
practices while bargaining with the union; where it inferred from the totality of the challenged party’s
engages in dilatory tactics during negotiations; or conduct both at and away from the bargaining table. It
where it institutes a wage cut by unilateral action involves the question of whether an employer’s conduct
demonstrates an unwillingness to bargain in good faith


LABOR RELATIONS: Azucena Vol. II
or is merely hard bargaining. x x x We, likewise, do not movement. But whichever way it is proposed to go,
agree that the Union is guilty of ULP for engaging in blue- the proposed changes require honest explanation.
sky bargaining or making exaggerated or unreasonable
proposals. What was excluded from the old CBA may be
proposed for inclusion in the forthcoming CBA, or
4.3b Bad Faith: Inflexible Demands; Strike Amid vice-versa. Negotiation precisely contemplates
Negotiation proposals and counter-proposals.

4.3c Bad Faith: Boulwarism; Take-It-or-Leave-It 4.5 Giving of Information
Bargaining
Part of good-faith bargaining, and a method to
The new plan was threefold. As negotiations approached,
expedite the process, is supplying of information to
the Company would use its local management personnel
on the desires of the work force on the type and level of
the other party, as required by law. It should be
benefits; these were then translated into specific recalled that under Art. 242 one of the rights of a
proposals, whose cost and effectiveness were researched legitimate labor organization which is certified as
in order to determine an attractive bargaining offer the exclusive bargaining agent, is to ask for and be
within the Company's means; the Company then furnished with the employer’s annual audited
attempted to "sell" its proposals to its employees and the financial statements, including the balance sheet
general public through a publicity campaign in plant and the profit and loss statement. Such information
newspapers, bulletins, letters, television and radio is crucial in bargaining.
announcements and personal contacts. The Company
announced in negotiations that it rejected the usual
An employer is under a duty, upon request of the
“horse trading” approach to bargaining, with each side
eventually compromising initial unreasonable positions;
bargaining representative, to provide information
it advertised its initial proposals as “fair” and “firm.” relevant to the issues at the bargaining table.
Though willing to accept Union suggestions based on Refusal to provide relevant information after the
facts it might have overlooked, the Company refused to same has been requested constitutes per se
change its position simply because the Union disagreed violation of the duty to bargain. Relevant
with it. information or data may include information
concerning the employees in the bargaining unit,
We have already indicated that one of the central tenets such as their names, addresses, and seniority
of "the Boulware approach" is that the "product" or standing, or concerning the financial status of the
"firm, fair offer" must be marketed vigorously to the
employer, especially where needed to substantiate
"consumers" or employees, to convince them that the
Company, and not the Union, is their true representative.
claims of inability to pay.

The aim, in a word, was to deal with the Union through 5. FOURTH U.L.P. IN BARGAINING: GROSS
the employees, rather than with the employees through VIOLATION OF THE CONTRACT
the Union.
At this stage, the negotiations are over; the
4.4 Not Bad Faith to Propose Modifications to the document has been signed, sealed, and delivered.
Expiring CBA Implementation should follow. But at this stage the
collective bargaining process is not yet over, and
It is not bad-faith bargaining when a party proposes the duty to bargain is still operative because such
modifications to the expiring CBA. The second duty further requires faithful adherence to the
sentence of Article 253 explicitly refers to serving a contractual provisions. Violation of the contract
written notice “to terminate or modify” the amounts to ULP, if the violation is “gross.”
agreement. Modification may mean addition to,
subtraction from, or other ways of changing the 6. RATIFICATION BY THE CBU; MANDATORY
contents or phraseology of contents of the expiring REQUIREMENTS
CBA. It does not connote a one-direction



LABOR RELATIONS: Azucena Vol. II
The agreement negotiated by the employees’ The preceding comment, however, does not mean
bargaining agent should be ratified or approved by that the arbitral award is beyond question.
the majority of all the workers in the bargaining Certiorari on proper grounds is available.
unit.
6.3 Ratified but Unsigned
The proper ratifying group is not just the majority
union but the majority of all the workers in the Lack of the purely ministerial act of signing the
bargaining unit represented in the negotiation. formal contract did not obviate the fact that there
was a binding contract.
The ratification and the manner of doing it are
mandatory. 6.4 Unratified but Implemented

The Implementing Rules require posting of the CBA The parties to a collective agreement are required to
in two conspicuous places for five days. In one case, furnish copies to the appropriate Regional Office with
the CBA was not posted for at least five days in two accompanying proof of ratification by the majority of all
conspicuous places in the establishment before the workers in the bargaining unit. This was not done in
the case at bar. But we do not declare the CBA invalid or
ratification, to enable the workers to clearly inform
void considering that the employees have enjoyed
themselves of its provisions. Moreover, the CBA benefits from it. They cannot receive benefits under
submitted to the MOLE did not carry the sworn provisions favorable to them and later insist that the CBA
statement of the union secretary, attested by the is void simply because other provisions turn out not to
union president, that the CBA had been duly posted the liking of certain employees. It is iniquitous to receive
and ratified, as required by the Implementing Rules benefits from a CBA and later on disclaim its validity.
and Regulations. The court ruled that these
requirements being mandatory, non-compliance 7. EXECUTION OF CONTRACT
therewith rendered the said CBA ineffective.
A party to a collective bargaining may be required
6.1 Invalid Ratification to sign a contract where the agreement has been
reached by the parties and only one party’s refusal
6.2 When Ratification Not Needed to execute a contract is preventing its being carried
into effect. Such refusal is an unfair labor practice
Ratification of the CBA by the employees in the
bargaining unit is not needed when the CBA is a 7.1 Unwritten or Unsigned Agreement
product of an arbitral award by appropriate
government authority or by a voluntary arbitrator. American courts have held that a collective
The arbitral award may result from voluntary bargaining agreement is valid though not reduced
arbitration under Art.262 or from the secretary’s to writing or signed, if neither party requests a
assumption of jurisdiction or certification of the written instrument.
dispute to the NLRC, under Art. 263(g).
7.2 Effect of Signing on Other Disputes
In any of those situations the CBA still needs to be
posted in two conspicuous places in the workplace, 8. REGISTRATION OF C.B.A.
but the posting is for the information of, and not
ratification by, the employees affected. Moreover, The collective agreement, having been properly
the CBA has to be registered with the DOLE regional ratified, should be registered with the DOLE
office. Regional Office where the bargaining union is
registered or where it principally operates. Art. 231
To require ratification of the CBA in case of arbitral requires the registration within thirty (3) calendar
awards will be inconsistent with the nature of days from execution of the agreement. Multi-
arbitration as a dispute-settlement device. employer collective bargaining agreements shall be
filed with the Bureau.



LABOR RELATIONS: Azucena Vol. II
Article 253-A. Terms of a collective bargaining
It is believed that failure to register the CBA does agreement. – Any Collective Bargaining Agreement
not make it invalid or unenforceable. Its non- that the parties may enter into shall, insofar as the
registration, however, renders the contract-bar rule representation aspect is concerned, be for a term of
inoperative. five (5) years. No petition questioning the majority
status of the incumbent bargaining agent shall be
8.1 Requirements for Registration entertained and no certification election shall be
conducted by the Department of Labor and
Section 2. Requirements for registration. - The Employment outside of the sixty-day period
application for CBA registration shall be accompanied by immediately before the date of expiry of such five-
the original and two (2) duplicate copies of the following year term of the Collective Bargaining Agreement.
documents which must be certified under oath by the All other provisions of the Collective Bargaining
representative(s) of the employer(s) and labor union(s)
Agreement shall be renegotiated not later than
concerned

three (3) years after its execution.
(a) the collective bargaining agreement;
Any agreement on such other provisions of the
(b) a statement that the collective bargaining agreement Collective Bargaining Agreement entered into
was posted in at least two (2) conspicuous places in the within six (6) months from the date of expiry of the
establishment or establishments concerned for at least term of such other provisions as fixed in such
five (5) days before its ratification; and Collective Bargaining Agreement, shall retroact to
the day immediately following such date. If any
(c) a statement that the collective bargaining agreement such agreement is entered into beyond six months,
was ratified by the majority of the employees in the
the parties shall agree on the duration of
bargaining unit of the employer or employers concerned.

retroactivity thereof. In case of a deadlock in the
No other document shall be required in the registration renegotiation of the Collective Bargaining
of collective bargaining agreements Agreement, the parties may exercise their rights
under this Code. (As amended by Section 21,
The application may be denied if the supporting Republic Act No. 6715, March 21, 1989).
documents are incomplete or not verified under ________
oath. The denial, if by the Regional office, is
appealable to the Bureau within ten (10) days or to 1. DURATION OF A C.B.A.
the Secretary if the denial is by the Bureau.
RA No. 9715 (March 21, 2989) has introduced
9. AUTOMATIC RENEWAL OF CBA through Art. 253-A a significant change in setting
the durations or terms of a CBA at five years for the
The parties shall continue the CBA in “full force and “representation aspect” and not more than three
effect” until they reach a new agreement. years for “all other provisions.” The “representation
aspect” refers to the identity and majority status of
It is clear from the above provision of law that until a the union that negotiated the CBA as the exclusive
new Collective Bargaining Agreement has been executed representative of the bargaining unit. “All other
by and between the parties, they are duty-bound to keep provisions: simply refers to the rest of the CBA,
the status quo and to continue in full force and effect the economic as well as non-economic other than
terms and conditions of the existing agreement. The law representational.
does not provide for any exception nor qualification as to
which of the economic provisions of the existing
The conference agreed to make the “terms and
agreement are to retain force and effect, therefore, it
must be understood as encompassing all the terms and
conditions” or “economic” provision of the CBA
conditions in the said agreement. good only for three years so as to protect the
________ economic gains of the workers.



LABOR RELATIONS: Azucena Vol. II
Obviously, the framers of the law wanted to maintain December 31 and the new one is concluded on, say,
industrial peace and stability by having both March 31, its effectivity date is January 1. If, on the
management and labor work harmoniously together other hand, the new agreement is concluded after
without any disturbance. Thus, no outside union can June 30, then the matter of retroaction and the
enter the establishment within five (5) years and
possible retroactive date are left to the parties.
challenge the status of the incumbent union as the
exclusive bargaining agent. Likewise, the terms and

conditions of employment (economic and non-economic) When, precisely, is the date an agreement is
cannot be questioned by the employers or employees “concluded” or “entered into”?
during the period of effectivity of the CBA. The CBA is a
contract between the parties and the parties must The determining point is the date the parties agreed, not
respect the terms and conditions of the agreement. the date they signed. Art. 253-A refers merely to an
Notably, the framers of the law did not give a fixed term "agreement" which, according to Black's Law Dictionary
as to the effectivity of the terms and conditions of is "a coming together of minds; the coming together in
employment. It can be gleaned from their discussions accord of two minds on a given proposition." This is
that it was left to the parties to fix the period. similar to Art. 1305 of the Civil Code's definition of
"contract" as "a meeting of minds between two
The issue as to the term of the non-representation persons." The two terms, "agreement" and "contract,"
provisions of the CBA need not belabored especially are indeed similar, although the former is broader than
when we take note of the Memorandum of the Secretary the latter because an agreement may not have all the
of Labor dated February 24, 1994. In said memorandum, elements of a contract. As in the case of contracts,
the Secretary of Labor had occasion to clarify the term of however, agreements may be oral or written. Hence,
the renegotiated terms of the CBA vis-a-vis the term of even without any written evidence of the Collective
the bargaining agent, to wit: Bargaining Agreement made by the parties, a valid
agreement existed in this case from the moment the
As a matter of policy the parties are encourages (sic) to minds of the parties met on all matters they set out to
enter into a renegotiated CBA with a term which would discuss, as provided under Art. 1315 of the Civil Code.
coincide (sic) with the aforesaid five (5) year term of the
bargaining representative. 2.1 Effectivity of CBA Concluded After Six Months
from Expiration of Old CBA
In the event however, that the parties, by mutual
agreement, enter into a renegotiated contract with a Significantly, the law does not specifically cover the
term of three (3) years or one which does not coincide
situation where six months have elapsed but the
with the said 5-year term, and said agreement is ratified
by majority of the members in the bargaining unit, the
parties have reached no agreement with respect to
subject contract is valid and legal and therefore, binds effectivity. In this eventuality, we hold that any
the contracting parties. The same will however not provision of law should then apply, for the law
adversely affect the right of another union to challenge abhors a vacuum.
the majority status of the incumbent bargaining agent
within sixty (60) days before the lapse of the original five One such provision is the principle of hold over, i.e., that
(5) year term of the CBA. in the absence of a new CBA, the parties must maintain
the status quo and must continue in full force and effect
2. EFFECTIVITY AND RETROACTIVITY OF A C.B.A. the terms and conditions of the existing agreement until
a new agreement is reached. In this manner, the law
If the CBA is the very first for the bargaining unit, prevents the existence of a gap in the relationship
between the collective bargaining parties. Another legal
the Code does not state any rule on the CBA’s
principle that should apply is that in the absence of an
effectivity date. The parties have to decide it for agreement between the parties, then, an arbitrated CBA
themselves. But if the ensuing CBA is renewal, takes on the nature of any judicial or quasi-judicial
modification or renegotiation of an expiring one, award; it operates and may be executed only
the Code offers a formula for the effectivity date. prospectively unless there are legal justifications for its
Article 253-A provides that the ensuing agreement, retroactive application.
if entered into within six (6) months from expiry of
the old one, shall retroact to the date following 3. EXTENSION OF EFFECTIVITY OF C.B.A., WHEN
such expiry date; thus, if the CBA expired on VALID


LABOR RELATIONS: Azucena Vol. II
adequate or commensurate remedy in damages. The
3.1 Ten-Year Suspension of CBA right must be clear, the injury impending or threatened,
________ so as to be averted only by protection preventive process
of injunction.
Article 254. Injunction prohibited. – No temporary
or permanent injunction or restraining order in any 1.1 Reason of the No-Injunction Policy
case involving or growing out of labor disputes shall
be issued by any court or other entity, except as The labor injunction is an employer’s most effective
otherwise provided in Articles 218 and 264 of this remedy in labor dispute. However narrow its scope
Code. (As amended by Batas Pambansa Bilang 227, and form, the issuance of an injunction for any
June 1, 1982). purpose in a labor dispute will generally tip the
________ scales of the controversy. The issuance of an
injunction in the early phases of a strike can
1. NO-INJUNCTION POLICY critically sway the balance of the economic struggle
against the union. Enforced by the court’s contempt
An injunction may require or restrain the doing of powers, even a preliminary injunction is an effectual
an act. strike-breaking weapon because so much time
ordinarily elapses between the issuance of a
Article 254 announces the policy that labor disputes preliminary injunction and the time when a final
are generally not subject to injunction. If the rule decree can be reviewed on appeal.
were otherwise, it would contradict the declared
policy, under Article 211(a), “to promote and 1.2 Injunction Issued by Regular Court, When
emphasize the primacy of free collective bargaining Proper
and negotiations, including voluntary arbitration,
mediation and conciliation, as modes of settling Regular courts are without authority to issue
labor or industrial disputes.” injunction orders in cases involving or originating
from labor disputes even if the complaint was filed
The policy, basically, is freedom at the workplace. by non-striking employees and the employer was
The law, true to the tenets of free enterprise also made a respondent to the action or even if the
system, allows management and labor to fashion complainant was a customer of the strike-bound
the contents and incidents of their relationship. If employer or a sister company of the strike-bound
there is dispute between the parties, the employer, whose premises were picketed by the
responsibility to solve it devolves upon them strikers.
primarily, not upon the government. Government
The court may issue an injunction, whether temporary or
intervention is the exception rather than the rule.
permanent, as provided in said section of Republic Act
This anti-injunction policy applies even as regards 875, only in a case involving or growing out of a labor
wage-fixing by the wage commission or regional dispute.
wage boards. ________

Moreover, any injunctive order in “non-national Article 255. Exclusive bargaining representation and
interest” disputes can be directed only against the workers’ participation in policy and decision-
illegal acts being committed in connection with the making. – The labor organization designated or
labor dispute; it cannot be directed against the selected by the majority of the employees in an
dispute itself. appropriate collective bargaining unit shall be the
exclusive representative of the employees in such
There is no power the exercise of which is more delicate unit for the purpose of collective bargaining.
which requires grater caution, deliberation, and sound
However, an individual employee or group of
discretion, or (which is) more dangerous in a doubtful
case than the issuing of an injunction; it is the strong arm
employees shall have the right at any time to
of equity that never ought to be extended unless to cases present grievances to their employer.
of great injury, where courts of law cannot afford an


LABOR RELATIONS: Azucena Vol. II
Any provision of law to the contrary issues that affect both management and the
notwithstanding, workers shall have the right, workers.
subject to such rules and regulations as the
Secretary of Labor and Employment may 1.1 Employees’ Participation in Formulating the
promulgate, to participate in policy and decision- Code of Discipline
making processes of the establishment where they
are employed insofar as said processes will directly Indeed, it was only on March 2, 1989, with the approval
affect their rights, benefits and welfare. For this of Republic Act No. 6715, amending Article 211 of the
purpose, workers and employers may form labor- Labor Code, that the law explicitly considered it a State
management councils: Provided, That the policy "(t)o ensure the participation of workers in
decision and policy-making processes affecting the rights,
representatives of the workers in such labor-
duties and welfare." However, even in the absence of
management councils shall be elected by at least said clear provision of law, the exercise of management
the majority of all employees in said establishment. prerogatives was never considered boundless.
(As amended by Section 22, Republic Act No. 6715,
March 21, 1989). Verily, a line must be drawn between management
________ prerogatives regarding business operations per se and
those which affect the rights of the employees. In
1. WORKERS’ PARTICIPATORY RIGHT: ITS treating the latter, management should see to it that its
CONSTITUTIONAL MEANING employees are at least properly informed of its decisions
or modes action.
The crucial question is: what is the meaning or
extent of the workers’ right to participate in policy 2. WORKERS’ PARTICIPATION AS THE REAL
and decision-making? OBJECTIVE; THE LMC

Enlightening in this regard are the deliberations of Article 255 deals with the crucial concept of
the 1986 Constitutional Commission. They reveal employee participation. The law, while promoting
that the intention was to refer to participation in collective bargaining, really aims at employee
grievance procedures and voluntary modes of participation in policy and decision-making.
settling disputes and not to formulation of Collective Bargaining is just one of the forms of
corporate programs or policies. employee participation. Despite so much interest in
and promotion of collective bargaining, it is
There are three levels in which employees could incorrect to say that the device which secures
influence management in their decision-making, industrial democracy is collective bargaining and no
and one would be at the corporate level. This would other. And it is equally misleading to say that
refer to strategic policies pertaining to the mergers, collective bargaining is the end-goal of employee
acquisitions, pricing and marketing policies, representation. Rather, the real aim is employee
disposition of profits and the like. The second level participation in whatever form it may appear—
would be the plant or department level. It is here bargaining or no bargaining, union or no union.
where administrative decisions are made. Decisions
made in this level may refer to hiring, firing, and This is why Art. 255, second sentence, reserves the
promotion of employees, cost and quality control, right of an individual employee or group of
resource allocations, achievement of target quotas, employees (unionized or ununionized, or inside or
etc. And the third will be the shop-floor level. It is outside a union) to present grievances to their
here where the so-called operating decisions are employer at any time. Effectively voicing one’s
made. Decisions made in this level usually refer to grievance is reserved and hallowed by law, with or
scheduling of work, safety regulations, work without collective bargaining.
methods, training of new employees. So these are
the different levels in which we hope there would But individual representation in dealing or
be this democratic participation of workers in vital bargaining with the employer is weak. For this
reason the law provides another forum—the labor-



LABOR RELATIONS: Azucena Vol. II
management council aside from or instead of a employee can choose to handle personally his
union. An LMC is versatile. It can exist where there defense, unassisted by any representative (Art.
is no union or co-exist with a union. One thing it 277[b]). The second sentence of Art. 255 is meant
cannot and must not do is to replace a union. While to be an exception to the exclusiveness of the
a labor union is hamstrung by such legal representative role of the labor organization. Such
prescriptions as formal registration, limited individual right cannot be taken away even by a
bargaining unit, majority status, mandatory and union’s constitution and by-laws.
non-mandatory subjects, etc., an LMC need not be
held back by any of these. It can represent American jurisprudence holds that notwithstanding
employees across the enterprise, present a union’s obligation as exclusive bargaining
grievances regardless of the grievant’s rank, and representative to process the grievances of all
proffer proposals unhindered by formalities. It can bargaining unit employees, individual employees
also handle projects and programs whoever is the may at any time present grievances directly to the
proponent, form committees for myriad purposes, employer for adjustment without the intervention
instill discipline and improve productivity. of the bargaining representative, and without
subjecting the employer to liability for refusing to
The LMC, in short, can deal with the employer on bargain with the union. However, the adjustment of
matters affecting the employees’ rights, benefits the grievances must be consistent with the terms of
and welfare. “Dealing with the employer,” we have the current collective bargaining contract or
seen, is broader, freer, and (from the employer’s agreement. Moreover, the bargaining
viewpoint) less threatening method than collective representative must be given the opportunity to be
bargaining. present at the meeting between the employer and
employee.
2.1 Department’s Promotion of LMC and Other
Councils 4. COLLECTIVE BARGAINING UNIT (CBU) DEFINED

Section 1. Creation of labor-management and other At the enterprise level there are three democratic
councils. - The Department shall promote the formation devices, statutorily embedded, to advance the
of labor-management councils in organized and cause of industrial peace, namely: airing of
unorganized establishments to enable the workers to grievance even by an individual employee directly
participate in policy and decision-making processes in the
to the employer anytime; participation in policy and
establishment, insofar as said processes will directly
affect their rights, benefits and welfare, except those
decision-making by employees, whether unionized
which are covered by collective bargaining agreements or not; and collective bargaining with the employer
or are traditional areas of bargaining. by unionized employees.

3. INDIVIDUAL GRIEVANCE The collective bargaining that the law envisions
occurs between the employer and the employees
As briefly indicated above, the presence of an comprised in an “appropriate” collective bargaining
employees’ organization,--a union, an LMC or other unit (CBU) represented by a union. As initially
forum—does not replace the individual employee’s explained in Art. 234, the “CBU” is that group of
right to pursue grievances. Each employee retains jobs and jobholders represented by the recognized
the right to deal with his or her employer, and vice- or certified union when it bargains with the
versa. The labor organization is a representative of employer. The “group” may comprise all the
the collective employees, but this fact does not supervisors or, separately, all the rank-and-file
mean that an employee can act only through the population in the company. Or it may be less than
representative. For these reasons, the law (rt. 255) all of these two categories, although the law prefers
explicitly preserves and respects the right of an to have only one grouping per category in one
individual employee or any group of employees to enterprise because the more solid the unit, the
directly present grievances to their employers at stronger its bargaining capacity. But if a single unit
any time. Even when under investigation, an (only one for all supervisors or only one for all rank-



LABOR RELATIONS: Azucena Vol. II
and-file) is not feasible, the law allows subgroups as and duties or similarity of compensation and working
bargaining units, provided only that each sub-group conditions.
is “appropriate.” It is appropriate if its members
share substantially common concerns and interests. In making judgments about “community of interest”
in these different settings, the Board will look to
As defined in D.O. No. 40-03 which is now the such factors as: (1) similarity in the scale and
revised Book V of the Rules Implementing the Labor manner of determining earnings; (2) similarity in
Code, “bargaining unit” refers to a group of employment benefits, hours of work and other
employees sharing mutual interests within a given terms and conditions of employment; (3) similarity
employer unit, comprised of all or less than all of in the kinds of work performed; (4) similarity in the
the entire body of employees in the employer unit qualifications, skills and training of the employees;
or any specific occupational or geographical (5) frequency of contact or interchange among the
grouping within such employer unit. employees; (6) geographic proximity; (7) continuity
or integration of production processes; (8) common
Within one unit there may be one or more unions. supervision and determination of labor-relations
The bargaining unit therefore is not the same as, policy; (9) history of collective bargaining; (10)
and usually a bigger group than, a union. But only desires of the affected employees; or (11) extent of
one union should represent the whole CBU in union organization.
bargaining with the employer. The chosen union is
called the bargaining agent, its principal being the Geographical location can be completely
CBU members themselves. disregarded if the communal or mutual interests of
the employees are not sacrificed.
The bargaining union has to be the majority union,
the one where majority of the CBU members 5.1 Bargaining History Not Decisive Factor
belong.
The basic test of an asserted bargaining unit's
“Representative union,” “bargaining union,” acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the
“majority union,” “bargaining agent,” and
exercise of their collective bargaining rights.
“bargaining representative” are one and the same.

It refers to the union that represents the CBU in
5.2 Exclusion of Confidential Employees
bargaining or dealing with the employer.

By the very nature of their functions, they assist and act
5. APPROPRIATENESS OF BARGAINING UNIT; in a confidential capacity to, or have access to
FACTORS CONSIDERED confidential matters of, persons who exercise managerial
functions in the field of labor relations. As such, the
The determination of what constitutes a proper rationale behind the ineligibility of managerial employees
bargaining unit lies primarily in the discretion of the to form, assist or join a labor union equally applies to
Bureau, since no individual factor is given by law decisive them.
weight. But while the determination of the appropriate
collective bargaining unit (CBU) is a primary function of 5.3 Temporary or Part-Time Employees
the Bureau, it is subject to the legal requirement that
proper consideration should be given to all legally
The NLRB has been upheld in excluding temporary
relevant factors.

employees from bargaining units of workers in
The basic test of an asserted bargaining unit's certain jobs. In determining whether temporary or
acceptability is whether or not it is fundamentally the part-time employees are sufficiently identified with
combination which will best assure to all employees the the regular employees, so as to be properly
exercise of their collective bargaining rights. Industrial included in the bargaining unit, one of the
experience indicates that the most efficacious bargaining important factors considered by the NLRB is the
unit is one which is comprised of constituents enjoying a reasonable likelihood that the temporary or part-
community of interest. This community of interest is time employees will eventually become adequately
reflected in groups having substantial similarity of work


LABOR RELATIONS: Azucena Vol. II
identified in employment with the other members would be taken into consideration in reaching a
of the bargaining unit. decision.

5.4 Seasonal Employees 7. SINGLE OR “EMPLOYER UNIT” IS FAVORED

The full-time seasonal employees who have a It has been the policy of the Bureau of Labor
reasonable expectation of substantial seasonal Relations to encourage the formation of an
employment from year to year have been held employer unit unless circumstances otherwise
properly included in the unit, but part-time seasonal require. In other words, one employer enterprise
employees who receive none of the fringe benefits constitutes only one bargaining unit. The more solid
enjoyed by full-time employees have insufficient the employees are, the stronger is their bargaining
common interest with the full-time employees to be capacity.
included in the same bargaining unit.
The proliferation of unions in an employer unit is
5.5 Probationary Employees discouraged as a matter of policy unless there are
compelling reasons which would deny a certain
The fact that an employee is given a classification class of employees the right to self-organization for
such as beginner, trainee or probationary purposes of collective bargaining.
employee, and the fact that contemplation of
permanent tenure is subject to satisfactory Single plant units are presumed to be appropriate
completion of an initial trial period, are insufficient for purposes of collective bargaining.
to warrant such employee’s exclusion from a
bargaining unit. Moreover, the eligibility of Instead of forming another bargaining unit, the law
probationary employees does not turn on the requires them to be members of the existing one. The
proportion of such employees who, willingly or not, ends of unionism are better served if all the rank-and-file
fail to continue to work for the employer employees with substantially the same interests and who
invoke their right to self-organization are part of a single
throughout the trial period.
unit so that they can deal with their employer with just
one and yet potent voice. The employees' bargaining
6. REFERENDUM WHERE INTERESTS ARE power with management is strengthened thereby.
DISSIMILAR
7.1 Exception to One-unit Policy
The decision then of the Executive Labor Arbiter in
merely directing the holding of a referendum “to The “one unit-one company” rule is not without
determine the will of the service engineers, sales exception. The exclusion of the subject employees
representatives as to their inclusion or exclusion in from the rank-and-file bargaining unit and the CBA
the bargaining unit” is the most appropriate is definitely a “compelling reason,” for it completely
procedure that conforms with their right to form, deprived them of the chance to bargain collectively
assist or join a labor union or organization. with petitioner and are thus left with no recourse
but to group themselves into a separate and distinct
6.1 Desire of the Employees; The Globe Doctrine bargaining unit and form their own organization.

The desires of the employees are relevant to the The usual exception, of course, is where the employer
determination of the appropriate bargaining unit. unit has to give way to the other units like the craft unit,
The relevancy of the wishes of employees plant unit, or a subdivision thereof; the recognition of
concerning their inclusion or exclusion from a these exceptions takes into account the policy to assure
proposed bargaining unit is inherent in the basic employees of the fullest freedom in exercising their
right to self organization. While the desires of the rights. Otherwise stated, the one company-one union
employees with respect to their inclusion in a policy must yield to the right of the employees to form
unions or associations for purposes not contrary to law,
bargaining unit is not controlling, it is a factor which
to self-organization and to enter into collective



LABOR RELATIONS: Azucena Vol. II
bargaining negotiations, among others, which the to be represented in bargaining with the employer;
Constitution guarantees. and (3) the employees who will be covered by the
resulting CBA.
8. TWO COMPANIES WITH RELATED BUSINESSES
Distinguishing the CBU from the union is important
Two corporations cannot be treated as a single because—
bargaining unit even if their businesses are related.
1. in a CE the voters are the CBU, whether union or
8.1 Subsidiaries and Spun-Off Corporations non-union members;

Subsidiaries or corporations formed out of former 2. in CBA ratification the voters are the unit, not just
divisions of a mother company following a bona fide the union members;
reorganization may constitute separate bargaining
units. 3. in strike voting, the voters are the members of
the union, not all of the unit.
Moreover, in determining an appropriate bargaining unit, ________
the test of grouping is mutuality or commonality of
interests. The employees sought to be represented by
Article 256. Representation Issue in Organized
the collective bargaining agent must have substantial
mutual interests in terms of employment and working
Establishments. - In organized establishments, when
conditions as evinced by the type of work they a verified petition questioning the majority status of
performed. Considering the spin-offs, the companies the incumbent bargaining agent is filed by any
would consequently have their respective and distinctive legitimate labor organization including a national
concerns in terms of the nature of work, wages, hours of union or federation which has already issued a
work and other conditions of employment. Interests of charter certificate to its local chapter participating
employees in the different companies perforce differ. in the certification election or a local chapter which
SMC is engaged in the business of the beer has been issued a charter certificate by the national
manufacturing. Magnolia is involved in the union or federation before the Department of Labor
manufacturing and processing of dairy products while
and Employment within the sixty (60)-day period
SMFI is involved in the production of feeds and the
processing of chicken. The nature of their products and
before the expiration of the collective bargaining
scales of business may require different skills which must agreement, the Med-Arbiter shall automatically
necessarily be commensurated by different order an election by secret ballot when the verified
compensation packages. The different companies may petition is supported by the written consent of at
have different volumes of work and different working least twenty-five percent (25%) of all the employees
conditions. For such reason, the employees of the in the bargaining unit to ascertain the will of the
different companies see the need to group themselves employees in the appropriate bargaining unit. To
together and organize themselves into distinctive and have a valid election, at least a majority of all
different groups. It would then be best to have separate eligible voters in the unit must have cast their votes.
bargaining units for the different companies where the
The labor union receiving the majority of the valid
employees can bargain separately according to their
needs and according to their own working conditions.
votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit.
9. SUMMATION OF SIGNIFICANCE When an election which provides for three or more
choices results in no choice receiving a majority of
It is helpful to reiterate that the bargaining unit is the valid votes cast, a run-off election shall be
not the same as the union; in fact, there may be conducted between the labor unions receiving the
several unions (majority and minority) in one two highest number of votes: Provided, That the
bargaining unit. Determining the scope or total number of votes for all contending unions is at
“membership” of the bargaining unit is significant least fifty percent (50%) of the number of votes
and far-reaching because it leads to the cast. In cases where the petition was filed by a
determination also of: (1) the employees who can national union or federation, it shall not be required
vote in the certification election; (2) the employees


LABOR RELATIONS: Azucena Vol. II
to disclose the names of the local chapter’s officers Article 258-A. Employer as Bystander. - In all cases,
and members. whether the petition for certification election is
filed by an employer or a legitimate labor
At the expiration of the freedom period, the organization, the employer shall not be considered
employer shall continue to recognize the majority a party thereto with a concomitant right to oppose
status of the incumbent bargaining agent where no a petition for certification election. The employer’s
petition for certification election is filed. (As participation in such proceedings shall be limited to:
amended by Section 23, Republic Act No. 6715,
March 21, 1989 and Section 10, Republic Act No. (1) being notified or informed of petitions of such
9481 which lapsed into law on May 25, 2007 and nature; and
became effective on June 14, 2007).
________ (2) submitting the list of employees during the pre-
election conference should the Med-Arbiter act
Article 257. Petitions in Unorganized favorably on the petition. (As amended by Section
Establishments. - In any establishment where there 12, Republic Act No. 9481 which lapsed into law on
is no certified bargaining agent, a certification May 25, 2007 and became effective on June 14,
election shall automatically be conducted by the 2007).
Med-Arbiter upon the filing of a petition by any ________
legitimate labor organization, including a national
union or federation which has already issued a Article 259. Appeal from certification election
charter certificate to its local/chapter participating orders. – Any party to an election may appeal the
in the certification election or a local/chapter which order or results of the election as determined by
has been issued a charter certificate by the national the Med-Arbiter directly to the Secretary of Labor
union or federation. In cases where the petition was and Employment on the ground that the rules and
filed by a national union or federation, it shall not regulations or parts thereof established by the
be required to disclose the names of the local Secretary of Labor and Employment for the conduct
chapter’s officers and members. (As amended by of the election have been violated. Such appeal
Section 24, Republic Act No. 6715, March 21, 1989 shall be decided within fifteen (15) calendar days.
and Section 11, Republic Act No. 9481 which lapsed (As amended by Section 25, Republic Act No. 6715,
into law on May 25, 2007 and became effective on March 21, 1989).
June 14, 2007). ________
________
1. DETERMINING THE BARGAINING UNION:
Article 258. When an employer may file petition. – OVERVIEW OF THE METHODS
When requested to bargain collectively, an
employer may petition the Bureau for an election. If To bargain with the employer, the employees in the
there is no existing certified collective bargaining collective bargaining unit (CBU) can be represented
agreement in the unit, the Bureau shall, after by one and only one union which has to be a
hearing, order a certification election. legitimate labor organization duly designated or
selected by the employees in the CBU.
All certification cases shall be decided within twenty
(20) working days. Under the Code a “bargaining representative” is
defined as a “legitimate labor organization or any
The Bureau shall conduct a certification election officer or agent of such organization whether or not
within twenty (20) days in accordance with the rules employed by the employer.” The Implementing
and regulations prescribed by the Secretary of Rules, however, as amended by D.O. No. 40-03
Labor. drops the “officer or agent” as it states: “Exclusive
________ bargaining representative means any legitimate
labor union duly recognized or certified as the sole



LABOR RELATIONS: Azucena Vol. II
and exclusive bargaining representative or agent of union won, if any. Hence, the election is
all the employees in a bargaining unit.” appropriately called “certification election.”

The selection of such bargaining agent may take Where one casting of votes is not decisive enough
place in an organized or an unorganized to elect a union, the election officials may require a
establishment. “Organized establishment” refers to run-off election if certain other conditions exist, as
an enterprise where there exists a recognized or explained below.
certified sole and exclusive bargaining agent. The
employer company is “unorganized” where no But a certification election, a run-off election, or a
union has yet been duly recognized or certified as consent election is needed only when two or more
bargaining representative. Art. 256 speaks of an unions are vying for the “office” of exclusive
organized firm; Art. 257, of the unorganized. bargaining representative (EBR). Where there is but
one union in the bargaining unit and there is ample
Whether the proceedings take place in an organized proof that that union carries the majority of the
or an unorganized bargaining unit, and whether the employees, the law allows the employer to
proceedings are called consent election or voluntarily recognize such union. Voluntary
certification election, the objective is the same, recognition does away with the more tedious
namely, to identify the union that will represent the electoral contest between unions.
employees in bargaining with the employer. Until
this representation dispute is resolved, no CBA can There are, therefore, three methods to determine
be entered into. the bargaining union: (1) voluntary recognition; (2)
certification election with or without run-off; and
In an unorganized establishment, the employer may (3) consent election.
voluntarily recognize the bargaining agent. If there
are obstacles to this, the petition to hold an election 2. FIRST METHOD: VOLUNTARY RECOGNITION
may be filed anytime by any legitimate labor (V.R.)
organization (LLO), except within 12 months from a
previous CE, run-off, or consent election. The employer’s voluntary recognition of the
employees’ union significantly facilitates the
In an organized establishment, on the other hand, bargaining process. The employees, especially the
voluntary recognition is not possible. A petition to union leaders and organizers, rejoice when they are
hold a CE has to be filed within the “freedom able to convince the employer to voluntarily
period” which means the last sixty (60) days of the recognize and subsequently bargain with their
fifth year of the expiring CBA; in other words, the union. But VR requires three concurrent conditions.
contest between unions comes at intervals of
roughly four years and ten months. The petition First, voluntary recognition is possible only in an
may be filed by any LLO, but the petition must have unorganized establishment. In an organized setting
the written support of at least twenty-five percent the employer cannot voluntarily recognized any
(25%) of the employees in the bargaining unit. The new union because the law (Art. 256) requires him
25% initial support indicates that the petitioner has to continue recognizing and dealing with the
a fair chance of winning and that the petition is not incumbent union as long as it has not been properly
just a nuisance. replaced by another union.

Conceivably but rarely an employer may also file a Second, only one union is asking for recognition; if
petition for a CE. there are two or more unions asking to be
recognized the employer cannot recognize any of
The election is conducted under the supervision and them; the rivalry must be resolved through an
control of DOLE officials. It ends up with a formal election;
and official statement of results, certifying which



LABOR RELATIONS: Azucena Vol. II
Third, the union voluntarily recognized should be record the fact of voluntary recognition in its roster of
the majority union as indicated by the fact that legitimate labor unions and notify the labor union
members of the bargaining unit did not object to concerned.
the projected recognition. If no objection is raised,
Where the notice of voluntary recognition is insufficient
the recognition will proceed, the DOLE will be
in form, number and substance, the Regional Office shall,
informed and CBA negotiation will commence. If within the same period, notify the labor union of its
objection is raised, the recognition is barred, and a findings and advise it to comply with the necessary
certification election or consent election will have requirements. Where neither the employer nor the labor
to take place. union failed to complete the requirements for voluntary
recognition under Section 2 of this Rule within thirty (30)
2.1 VR Under D.O. No. 40-03 days from receipt of the advisory, the Regional Office
shall return the notice for voluntary recognition together
Section 1. When and where to file. - In unorganized with all its accompanying documents without prejudice
establishments with only one legitimate labor to its re-submission.
organization, the employer may voluntarily recognize the
representation status of such a union. Within thirty (30) Section 4. Effect of recording of fact of voluntary
days from such recognition, the employer and union shall recognition. - From the time of recording of voluntary
submit a notice of voluntary recognition with the recognition, the recognized labor union shall enjoy the
Regional Office which issued the recognized labor union's rights, privileges and obligations of an existing bargaining
certificate of registration or certificate of creation of a agent of all the employees in the bargaining unit.
chartered local.
Entry of voluntary recognition shall bar the filing of a
Section 2. Requirements for voluntary recognition. - The petition for certification election by any labor
notice of voluntary recognition shall be accompanied by organization for a period of one (1) year from the date of
the original copy and two (2) duplicate copies of the entry of voluntary recognition. Upon expiration of this
following documents: one-year period, any legitimate labor organization may
file a petition for certification election in the same
(a) a joint statement under oath of voluntary recognition bargaining unit represented by the voluntarily recognized
attesting to the fact of voluntary recognition; union, unless a collective bargaining agreement between
the employer and voluntarily recognized labor union was
(b) certificate of posting of the joint statement of executed and registered with the Regional Office in
voluntary recognition for fifteen (15) consecutive days in accordance with Rule XVII of these Rules.
at least two (2) conspicuous places in the establishment
or bargaining unit where the union seeks to operate; Simply said, the last paragraph means that the
employer and the union should conclude and
(c) the approximate number of employees in the register a CBA within one year from the voluntary
bargaining unit, accompanied by the names of those who recognition, otherwise, the recognition will lapse
support the voluntary recognition comprising at least a and a rival union may petition for a certification
majority of the members of the bargaining unit; and
election.

(d) a statement that the labor union is the only legitimate

labor organization operating within the bargaining unit. 3. SECOND METHOD: CERTIFICATION ELECTION
(C.E.)
All accompanying documents of the notice for voluntary
recognition shall be certified under oath by the employer Whenever there is doubt as to whether a particular
representative and president of the recognized labor union represents the majority of the rank-and-file
union. employees, in the absence of a legal impediment, the
holding of a certification election is the most democratic
Section 3. Action on the Notice. - Where the notice of method of determining the employees' choice of their
voluntary recognition is sufficient in form, number and bargaining representative. It is the appropriate means
substance and where there is no other registered labor whereby controversies and disputes on representation
union operating within the bargaining unit concerned, may be laid to rest, by the unequivocal vote of the
the Regional Office, through the Labor Relations Division employees themselves.
shall, within ten (10) days from receipt of the notice,



LABOR RELATIONS: Azucena Vol. II
Exercising their suffrage through the medium of the A union election is held pursuant to the union's
secret ballot, they can select the exclusive bargaining constitution and bylaws, and the right to vote in it is
representative that, emboldened by their confidence and enjoyed only by union members. A union election should
strengthened by their support shall fight for their rights be distinguished from a certification election, which is
at the conference table. That is how union solidarity is the process of determining, through secret ballot, the
achieved and union power is increased in the free sole and exclusive bargaining agent of the employees in
society. Hence, rather than being inhibited and delayed, the appropriate bargaining unit, for purposes of
the certification election should be given every collective bargaining. Specifically, the purpose of a
encouragement under the law, that the will of the certification election is to ascertain whether or not a
workers may be discovered and, through their freely majority of the employees wish to be represented by a
chosen representatives, pursued and realized. labor organization and, in the affirmative case, by which
particular labor organization.
3.1 Fact-Finding
In a certification election, all employees belonging to the
In labor legislation, certification proceedings is not a appropriate bargaining unit can vote. Therefore, a union
member who likewise belongs to the appropriate
litigation in the sense in which the term is ordinarily
bargaining unit is entitled to vote in said election.
understood, but an investigation of non-adversary However, the reverse is not always true; an employee
and fact finding character. As such, it is not bound belonging to the appropriate bargaining unit but who is
by technical rules of evidence. not a member of the union cannot vote in the union
election, unless otherwise authorized by the constitution
The law does not contemplate the holding of a and bylaws of the union. Verily, union affairs and
certification election unless the preliminary inquiry elections cannot be decided in a non-union activity.
shows a reasonable doubt as to which of the
contending unions represents a majority, or unless The winners in a union election become officers and
ten per centum of the laborers demand this representatives of the union only. The winner in a
election. But these grounds necessarily depend on certification election is an entity, a union, which
the weight of the evidence adduced by the rival becomes the representative of the whole
unions, and this weight, in turn, cannot be bargaining unit that includes even the members of
determined properly if the right to cross the defeated unions.
examination is denied.
3.2 Direct Certification No Longer Allowed
Certification proceedings directly involve only two
issues: (a) proper composition and constituency of Even in a case where a union has filed a petition for
the bargaining unit; and (b) veracity of majority certification election, the mere fact that there was
membership claims of the competing unions so as no opposition does not warrant a direct
to identify the one union that will serve as the certification.
bargaining representative of the entire bargaining
unit. The holding of a certification election at the proper time
is not necessarily a mere formality as there was a
But some of the employees may not want to have a compelling legal reason not to directly and unilaterally
certify a union whose legitimacy is precisely the object of
union; hence, “No Union” is one of the choices
litigation in a pending cancellation case filed by certain
(“candidates”) named in the ballot. If “No Union” "concerned salesmen," who also claim majority status.
wins, the company pr the bargaining unit remains
ununionized for at least 12 months, the period The direct certification originally allowed under Article
known as the 12-month bar. After that period, a 257 of the Labor Code has apparently been discontinued
petition for a CE may be filed again. as a method of selecting the exclusive bargaining agent
of the workers. This amendment affirms the superiority
3.1a Certification Election Differentiated from of the certification election over the direct certification
Union Election which is no longer available now under the change in said
provision.



LABOR RELATIONS: Azucena Vol. II
3.3 Who Files Petition for CE
Whether petitioner or intervenor, the union has to
Any legitimate labor organization or any employer, be an LLO.
when requested to bargain collectively while the
majority status of the union is in doubt, may file a If the petition for certification election was filed by the
petition for certification election (PCE) federation which is merely an agent, the petition is
deemed to be filed by the chapter, the principal, which
In an unorganized establishment one a petition is must be a legitimate labor organization. The chapter
cannot merely rely on the legitimate status of the mother
filed by a legitimate labor organization, the Med-
union.
arbiter shall automatically order the conduct of a
certification election. The tenor of Article 257 is one Where the constitution, by-laws and the list of members
of command, so such order is not appealable. To who supposedly ratified the same were not attested to
make it appealable will contradict the objective by the union president, and the constitution and by-laws
stated in Article 211, to promote free trade were not verified under oath, the local union has no
unionism. But the application of Article 257 has to personality to file a petition for certification election it
be initiated by a genuine petition from a legitimate not being a legitimate labor organization. The petition
labor organization. Indeed, the law did not reduce should be dismissed.
the Med-Arbiter to an automaton which can
A union that has no legal personality to file a petition for
instantly be set to impulse by the mere filing of a
CE has no personality either to file a petition-in-
petition for certification election. He is still tasked intervention.
to satisfy himself that all the conditions of the law
are met, and among the legal requirements is that 3.4 Where to File the Petition for CE
the petitioning union must be a legitimate labor
organization in good standing. A petition for certification election (PCE) shall be
filed with the Regional Office which issued the
In an organized establishment the incumbent petitioning union’s certificate of registration or
bargaining agent, of course, will not file a PCE certificate of creation of chartered local. The
because it will not contest its own incumbency. The petition shall be heard and resolved by the Med-
filer will most likely be a union that was defeated in Arbiter.
the CE held some five years before. In any such
petition the incumbent union is a necessary party, a Where two or more petitions involving the same
forced intervenor. But even so, it does not thereby bargaining unit are filed in one Regional Office, the
lose its representative status; it remains the sole same shall be automatically consolidated with the
bargaining representative until it is replaced by Med-Arbiter who first acquired jurisdiction. Where
another. And until so replaced it has the right to the petitions are filed in different Regional Offices,
retain the recognition by the employer. the Regional Office in which the petitions are first
filed shall exclude all others; in which case, the
The employer, says Article 258, may file a PCE when latter shall indorse the petition to the former for
it has been asked to bargain. If this happens, the consolidation.
holding of the CE becomes mandatory if there is no
existing registered collective bargaining agreement. 3.5 When to File the Petition
However, instead of itself filing a petition, the
employer usually lets the unions interplead to The proper time to file a petition for CE depends on
determine who among them will bargain with the whether the CBU has a CBA or not. If it has no CBA ,
employer. the petition may be filed anytime outside the 12-
month bar. If it has a CBA, it can be filed only within
Other unions which are interested in joining a the last 60 days of the fifth year of the CBA.
certification election may file a motion for
intervention. Such motion is governed by the same 3.6 Action on the Petition: Preliminary Conference
rules that apply to a PCE.


LABOR RELATIONS: Azucena Vol. II
The preliminary conference shall determine the used as a basis for extending the 15-day period
following: within which to terminate the same.

(a) the bargaining unit to be represented; Within ten (10) days from the date of the last
hearing, the Med-arbiter shall issue a formal order
(b) contending labor unions; denying or granting the petition. In organized
establishments, however, no order or decision shall
(c) possibility of a consent election; be issued by the Med-arbiter during the freedom
period.
(d) existence of any of the bars to certification
election under Section3 of D.O. No. 40-03; The reason for the last-mentioned rule is that
during the entire 60-day freedom period, up to its
(e) such other matters as may be relevant for the last day, the door should remain open for any union
final disposition of the case. to file a PCE or a motion for intervention.

If at the preliminary conference the unions agree to 3.8 Action on the Petition: Denial; Grounds
hold a consent election, then the PCE will no longer
be heard and the unions will instead prepare for the The Med-arbiter, after due hearing may dismiss the
consent election. petition on any of the following grounds:

If the unions fail to agree to hold a consent election, (1) Not an LLO
the Med-arbiter proceeds to consider the petition.
He may deny and dismiss, or he may grant, the (2) Twelve-month Bar
petition. Denial or grant of the petition is always
appealable to the Secretary. Never appealable, (3) Negotiation Bar or Deadlock Bar
however, is the approval of a PCE in an unorganized
(ununionized) bargaining unit, the reason being that (4) No 25% Support
the law wants the ununionized unionized.
(5) Contract Bar; PCE Filed Outside the Freedom
3.7 Action on the Petition: Hearings and Pleadings Period

If the contending unions fail to agree to a consent The first three grounds are applicable to
election during the preliminary conference, the establishments with or without a CBA; the last two
Med-arbiter may conduct as many hearings as he are pertinent only to an establishment with a CBA
may deem necessary. But the conduct of the about to expire on its fifth year.
hearings cannot exceed fifteen (15) days from the
date of the scheduled preliminary conference/ 3.8a Ground 1: Petitioner not an LLO
hearing. After that time the petition shall be
considered submitted for decision. The Med-arbiter Excepting Article 258, only a legitimate labor
shall have control of the proceedings. organization (LLO) can file a petition for certification
Postponements or continuances are discouraged. election. Thus, if the petitioning union is not listed
in the DOLE’s list of LLOs or it has no CBA registered
The failure of any party to appear in the hearing(s) in the DOLE, these facts raise doubt as to its being
when notified or to file its pleadings shall be an LLO, and the med-arbiter may dismiss the PCE.
deemed a waiver of its right to be heard. The Med-
arbiter, however, upon the agreement of the But even if the union is listed as LLO or is a party to
parties for meritorious reasons, may allow the a CBA, its legitimacy may still be questioned in a
cancellation of scheduled hearing(s). The separate and independent petition for cancellation
cancellation of any scheduled hearing(s) shall not be to be heard and decided by the BLR Director or the
Regional Director himself.



LABOR RELATIONS: Azucena Vol. II
voluntary recognition of the union by the employer.
Does the filing of a petition to cancel the Thus, if an election had been held but not one of
petitioner’s registration cause the suspension or the unions won a PCE may be filed again but only
dismissal of the PCE? No, the mere filing foes not. after 12 months. The law does not want more than
To serve as a ground for dismissal of a PCE, the legal one election in a 12-month period. The same bar
personality of the petitioner should have been applies if “No Union” won in the previous election.
revoked or cancelled “with finality.”
On the other hand, if a union has won, such union
The filing or pendency of any inter/intra-union dispute and the employer must within 12 months start
and other related labor relations dispute is not a negotiating a collective agreement. If they fail to do
prejudicial question to any petition for certification so, they are defeating the employees’ wish to have
election and shall not be a ground for the dismissal of a a CBA; hence, the union or unions that lost can
petition for certification election or suspension of
petition again for a certification election after 12
proceedings for certification election.
months from the last election so as to replace the

unproductive bargaining agent which, perhaps, is
The justification for this rule is that the employees’
cavorting with the employer.
opportunity to choose a bargaining agent can easily

be blocked or forestalled by an employer through
Ordinarily, a bargaining agent who failed to secure a CBA
the simple expedience of questioning the legitimacy within 12 months could be suspected as a tool of
of the petitioner union. management and should deserve to be replaced. But if
circumstances show that the cause of not having
Suspension of Proceedings: “Company Union” concluded a CBA was not the union’s fault, such union
Charge should not be blamed, and a CE should not be authorized
even though no CBA has been concluded despite passage
A complaint for unfair labor practice may be considered a of twelve months. The situation takes the nature of a
prejudicial question in a proceeding for certification “deadlock bar.”
election when it is charged therein that one or more
labor unions participating in the election are being aided, The 12-month prohibition presupposes that there was an
or are controlled, by the company or employer. The actual conduct of election i.e. ballots were cast and there
reason is that the certification election may lead to the was a counting of votes. In this case, there was no
selection of an employer-dominated or company union certification election conducted precisely because the
as the employees’ bargaining representative, and when first petition was dismissed, on the ground of a defective
the court finds that said union is employer-dominated in petition which did not include all the employees who
the unfair labor practice case, the union selected would should be properly included in the collective bargaining
be decertified and the whole election proceedings would unit, the certification year bar does not apply.
be rendered useless and nugatory.
Neither does this bar apply if in fact there was a
NONETHELESS, a certification election cannot be failure of election because less than majority of the
stayed during the pendency of unfair labor practice CBU members voted. In that case, another PCE may
charge against a union filed by the employer. be filed within six (6) months.

Similarly, certification election may be ordered An election held less than a year after an invalid
despite pendency of a petition to cancel the union’s election is not barred. Also not barred would be a
registration certificate founded on alleged illegal second election held among a group of employees
strike by the union. who had not participated in the first election and
had not been given the opportunity to be
3.8b Ground 2: The 12-month Bar (certification year represented as part of the unit in the first election.
bar)
A radical change in the size of a bargaining unit
No petition for a CE may be filed within one year within a short period of time, raising a question as
from the date of a valid certification, consent, or to the majority status of the certified
run-off election or from the date of entry of a representative, may also prompt the NLRB to


LABOR RELATIONS: Azucena Vol. II
entertain a petition for an election during the intentions, does not conclude in agreement between the
certification year. parties."

The one-year rule does not apply to a unit If the law proscribes the conduct of a certification
election when there is a bargaining deadlock submitted
clarification petition filed during the certification
to conciliation or arbitration, with more reason should it
year. not be conducted if, despite attempts to bring an
employer to the negotiation table by the "no reasonable
In a CE, the “No Union” choice won. Within 12 effort in good faith" on the employer certified bargaining
months from that election the employer voluntarily agent, there was to bargain collectively. It is only just and
recognized a new union and then concluded with it equitable that the circumstances in this case should be
a CBA. Is the 12-month bar violated? Are the considered as similar in nature to a "bargaining
recognition and the CBA valid? deadlock" when no certification election could be held.

Excepted from the contract-bar rule are certain types of “Deadlock Bar” Rule, When Not Applicable; Artificial
contracts which do not foster industrial stability, such as Deadlock
contracts where the identity of the representative is in
doubt. Any stability derived from such contracts must be The deadlock that bars a CE must be genuine and
subordinated to the employees' freedom of choice not a drama. One indicator that it is genuine is the
because it does not establish the kind of industrial peace submission of the deadlock to a third-party
contemplated by the law.
conciliator or arbitrator. Another is that the

deadlock is the subject of a valid notice of strike or
In other words, the court strongly doubted that the
lockout. An artificial deadlock—a deadlock
union voluntarily recognized by the employer was
prearranged or preserved by collusion of the
really the employees’ choice. Most probably, it was
employer and the majority union—is deception of
a company union.
the workers, hence, not a barrier to a petition for a

CE.
3.8c Ground 3: Negotiation or Deadlock Bar


3.8d Ground 4: 25 Percent Support to PCE
Neither will a PCE prosper if the negotiation is

caught in a deadlock. The deadlock does not erase
Article 256 requires that the petition for a CE in an
that fact that there is negotiation which is a barrier
organized establishment which may be filed within
to holding a certification election. The parties
the “freedom period” should be supported by at
should be allowed to try to resolve their deadlock;
least twenty-five percent (25%) of the bargaining
replacing the negotiating union will not help.
unit.


The “Deadlock Bar” Rule simply provides that a
The support requirement is explained by
petition for certification election can only be
government policy to favor the self-organization of
entertained if there is no pending bargaining
workers. In a company still unorganized the workers
deadlock submitted to conciliation or arbitration or
should find it easy to organize, but one a union has
had become the subject of a valid notice of strike or
established itself as the employees’ representative,
lockout. The principal purpose is to ensure stability
it should not be so easy for another union to
in the relationship of the workers and the
replace the incumbent. Trying to so will disturb the
management.
peace in the enterprise. To justify the disturbance, it

must appear that a sizeable portion of the
A "deadlock" is the counteraction of things producing
entire stoppage; there is a deadlock when there is a
employees—at least 25%—desires to have a new
complete blocking or stoppage resulting from the action union. Without this minimum support the challenge
of equal and opposed forces. The word is synonymous to the incumbent looks like a nuisance.
with the word impasse, which "presupposes reasonable
effort at good faith bargaining which, despite noble The CBU, Not the Enterprise



LABOR RELATIONS: Azucena Vol. II
If a company’s rank-and-file employees are that withdrawals made before the filing of the petition
unionized but the supervisors are not, does the are presumed voluntary unless there is convincing proof
supervisors’ petition need the 25% minimum to the contrary, whereas withdrawals made after the
support? filing of the petition are deemed involuntary.


The reason for such distinction is that if the withdrawal
NO, because the company is considered or retraction is made before the filing of the petition, the
unorganized. The petition for CE involves only the names of employees supporting the petition are
supervisors, not the rank-and-file. Insofar as the supposed to be held secret to the opposite party.
supervisors are concerned, the “establishment” is Logically, any such withdrawal or retraction shows
considered ununionized. Hence the requirement for voluntariness in the absence of proof to the contrary.
25% support to the petition does not apply. Moreover, it becomes apparent that such employees had
not given consent to the filing of the petition, hence the
In other words, in deciding whether the 25% subscription requirement has not been met.
requirement is applicable or not, the law considers
When the withdrawal or retraction is made after the
the CBU involved, not the whole enterprise. This,
petition is filed, the employees who are supporting the
again, makes it easy for workers to unionize, a basic petition become known to the opposite party since their
objective of labor relations law. names are attached to the petition at the time of filing.
Therefore, it would not be unexpected that the opposite
Election Despite Lack of 25 Percent Support party would use foul means for the subject employees to
withdrawal their support.
Even in the situation where the 25% is needed. This
requirement may be relaxed. 3.8e Ground 5: PCE Filed Outside the Freedom
Period; the Contract Bar
Compliance with the said requirement need not even be
established with absolute certainty. The Court has This means that there exists in the bargaining unit a
consistently ruled that "even conceding that the CBA still in effect at the time the PCE is filed. The
statutory requirement of 30% of the labor force asking ban spans a period of five years, excluding,
for a certification election had not been strictly complied
however, the last sixty (60) days of the fifth (last)
with, respondent Director is still empowered to order
that it be held precisely for the purpose of ascertaining
year of the CBA.
which of the, contending labor organizations shall be the
exclusive collective bargaining agent." The contract bar rule prohibits the filing of a petition for
certification election during the existence of a collective
bargaining agreement except within the freedom period,
Effect of Withdrawal of Signatories
as it is called, when the said agreement is about to
expire. The purpose, obviously, is to ensure stability in
If a petition for a certification election lacks the 25% the relationships of the workers and the management by
support because a sizeable number of union preventing frequent modifications of any collective
members has withdrawn their membership, may bargaining agreement earlier entered into by them in
the petition still be granted? Or must it be good faith and for the stipulated original period.
dismissed? A critical fact to consider is whether the
withdrawal happened before or after the filing of The “freedom period” under Articles 253-A and 256
the petition. If it happened before the filing, the is different from and ought not to be mistaken for
withdrawal is presumed voluntary and it does not the other sixty-day period mentioned in Art. 253.
affect the propriety of the petition; if after, the The latter speaks of the right of the parties to
withdrawal is deemed involuntary (perhaps propose modifications to the existing CBA, as an
pressured by the employer) and it does not exception to the rule that the CBA cannot be
necessarily cause the dismissal of the petition modified during its lifetime. To clarify terms, the
sixty days in Art. 253 may be called “renegotiation
The presumption would arise that the withdrawal was notice period” or simply “notice/proposal period,”
procured through duress, coercion or for valuable in contrast to the “freedom period” under Arts.
consideration. In other words, the distinction must be 253-A and 256.


LABOR RELATIONS: Azucena Vol. II
The contract-bar rule applies. Whether or not the
The notice period is the last 60 days of the second CBA was indeed surreptitiously registered is a
or third year of the nonrepresentational provisions; factual matter whose determination is outside the
the freedom period is the last 60 days of the CBA’s ambit of a petition for certiorari.
fifth year of the representational aspect. The notice
period is an economic event involving the employer Contract-Bar Rule Not Applied: (a) Defective CBA
and the bargaining union; the freedom period is a
political event involving only the unions and the To be a bar to a certification election, the CBA must be
employees. The two periods, of course, may adequate in that it comprises substantial terms and
coincide on the fifth year of the CBA. conditions of employment.

Registered CBA (b) Referendum to Register on Independent Union

To bar a certification election it is no longer This referendum is neither union disaffiliation nor
severance; it is not disallowed by law even while a CBA
necessary that the CBA be “certified”; it is enough
exists.
that it is registered in accordance with Art. 231.


(c) CBA Signed Before or Within Freedom Period
Contract-Bar Rule Applied: Extended CBA Under
Despite Injunctive Order
Deadlock

A collective bargaining agreement which was
No petition for certification election may be filed prematurely renewed is not a bar to the holding of a
before the onset of the freedom period not after certification election. Such indecent haste in renewing
such period. The old CBA is extended until a new the CBA despite an order enjoining them from doing so is
one is signed. designed to frustrate the constitutional right of the
employees to self-organization. Moreover, We cannot
Section 6, Rule V, Book V of the implementing Rules countenance the actuation of the petitioner and the
provides that a petition for certification election or a management in this case which is not conducive to
motion for intervention can only be entertained within industrial peace.
sixty days prior to the expiry date of an existing collective
bargaining agreement. Otherwise put, the rule prohibits Validity of CBA Signed During Representation
the filing of a petition for certification election during the Dispute
existence of a collective bargaining agreement except
within the freedom period, as it is called, when the said It is true that the contract-bar rule does not apply during
agreement is about to expire. the “freedom period”; i.e., within that period a petition
for CE may be entertained. But it is equally true that the
Article 253 of the Labor Code provides that: "it shall be petition for CE does not bar the employer and the
the duty of both parties to keep the status quo and to incumbent union from renegotiating and renewing the
continue in full force and effect the terms and conditions expiring CBA. In other words, a CBA may be renegotiated
of the existing agreement during the 60-day period before, during, or after the 60-day freedom period. But if
and/or until a new agreement is reached by the parties." during such period a PCE is filed, the Med-arbiter can
Despite the lapse of the formal effectivity of the CBA the order the suspension of the renegotiation until the
law still considers the same as continuing in force and representation proceedings finally end.
effect until a new CBA shall have been validly executed.
Hence, the contract bar rule still applies.
The law is attempting a balancing feat. By allowing a

PCE during the freedom period the law preserves
Contract-Bar Rule Applied: Unproved Surreptitious
democratic between unions, and, in the same
Registration of CBA
breadth, by allowing CBA renegotiation during the

same freedom period, the law safeguards the
Even if the existing CBA is registered surreptitiously,
opportunity to possibly upgrade the employees’
as alleged by the petitioner union, but no evidence
employment condition.
is presented proving the alleged surreptitious

registration, the petition for CE cannot be granted.


LABOR RELATIONS: Azucena Vol. II
The question may be asked: What would be the registration and execution of collective bargaining
effect on the renegotiated CBA if a union other than agreements shall be heard and resolved by the
the one that executed it should win the CE? In a Regional Director in an independent petition for
pertinent case, it was held that the union thus cancellation of the union’s registration. They are
certified would have to respect the contract, but not reasons for the Med-arbiter to suspend hearing
that it may bargain with the management to the PCE. However, the Med-arbiter himself may rule
shorten the life of the contract if it is too long. on the objection if the pending union is not found in
the Department’s roster of legitimate labor
When a collective bargaining agreement is entered into organizations or an alleged collective bargaining
at a time when the petition for certification election had agreement is unregistered with the Department.
already been filed by a union and was then pending
resolution, the said CBA cannot be deemed permanent, 3.9a Authority to Decide Existence of Employer-
precluding the commencement of negotiations by
Employee Relationship; Med-Arbiter’s Order
another union with the management. In the meantime
however, so as not to deprive the workers of the benefits
Appealable to Secretary
of the said agreement, it shall be recognized and given
effect on a temporary basis, subject to the results of the Does the Med-arbiter or the Secretary of Labor and
certification election. The agreement may be continued Employment have the authority to determine the
in force if the union is certified as the exclusive existence of an employer-employee relationship
bargaining representative of the workers or may be between the parties in a petition for certification
rejected and replaced in the event that the rival emerges election?
as the winner.
All issues pertaining to the existence of employer-
But in a 2005 decision the Court took one step employee relationship or to eligibility to union
further. It invalidated the hasty recognition of a membership shall be resolved in the order or
union and the signing of a CBA with that union decision ranting or denying the petition for
where such acts were done while there was a certification election. In other words, those issues
pending petition for certification election by do not stall the PCE and they are not grounds for
another union. dismissing a PCE.

Basic to the contract bar rule is the proposition that the It is absurd to suggest that the med-arbiter and Secretary
delay of the right to select representatives can be of Labor cannot make their own independent finding as
justified only where stability is deemed paramount. to the sentence of such relationship and must have to
Excepted from the contract bar rule are certain types of rely and wait for such a determination by the labor
contracts which do not foster industrial stability, such as arbiter or NLRC in a separate proceeding. For then, given
contracts where the Identity of the representative is in a situation where there is no separate complaint filed
doubt. Any stability derived from such contracts must be with the labor arbiter, the med-arbiter and/or the
subordinated to the employees' freedom of choice Secretary of Labor can never decide a certification
because it does not establish the type of industrial peace election case or any labor-management dispute properly
contemplated by the law. brought before them as they have no authority to
determine the existence of an employer-employee
A CBA automatically renewed usually operates as a bar to relationship. Such a proposition is, to say the least,
a certification election. But it is not a bar if the employer anomalous.
has served notice that it will terminate the contract if
and when the union no longer represents the majority of Once there is a determination as to the existence of such
the employees. a relationship, the med-arbiter can then decide the
certification election case. 9 As the authority to
3.9 Invalid Grounds for the Denial/Suspension of determine the employer-employee relationship is
the Petition necessary and indispensable in the exercise of
jurisdiction by the med-arbiter, his finding thereon may
Questions pertaining to the validity of petitioning only be reviewed and reversed by the Secretary of Labor
union’s certificate of registration, or its legal who exercises appellate jurisdiction under Article 259 of
personality as a labor organization, or the validity of the Labor Code, as amended.



LABOR RELATIONS: Azucena Vol. II
The order granting the conduct of a certification election
It is apparent that incidental to the power of the in an organized establishment and the decision
med-arbiter to hear and decide representation dismissing or denying the petition, whether in an
cases is the power to determine who the eligible organized or unorganized establishment, may be
voters are. In so doing, it is axiomatic that the med- appealed to the Office of the Secretary within ten (10)
days from receipt thereof.
arbiter should determine the legality of the

employees' membership in the union. The appeal shall be verified under oath and shall consist
of a memorandum of appeal, specifically stating the
3.10 Action on the Petition: Is the Employer a grounds relied upon by the appellant with the supporting
Bystander? See Art. 258-A arguments and evidence.

3.10a Employer a Bystander; Cannot Oppose PCE In short, denial of any petition for CE is always
appealable, but never appealable is the approval of
3.11 Action on the Petition: Approval any PCE in an enterprise still ununionized. The
reason is sound and simple: the law wants to
Section 13. Order/Decision on the petition. - Within ten unionized the ununionized.
(10) days from the date of the last hearing, the Med-
Arbiter shall issue a formal order granting the petition or Section 18. Where to file appeal. - The memorandum of
a decision denying the same. In organized appeal shall be filed in the Regional Office where the
establishments, however, no order or decision shall be petition originated, copy furnished the contending
issued by the Med-Arbiter during the freedom period. unions and the employer, as the case may be. Within
twenty-four (24) hours from receipt of the appeal, the
The order granting the conduct of a certification election Regional Director shall cause the
shall state the following: transmittal thereof together with the entire records of
the case to the Office of the Secretary.
(a) the name of the employer or establishment;
Section 19. Finality of Order/Decision. - Where no appeal
(b) the description of the bargaining unit; is filed within the ten-day period, the Med-Arbiter shall
enter the finality of the order/decision in the records of
(c) a statement that none of the grounds for dismissal the case and cause the transmittal of the records of the
enumerated in the succeeding paragraph exists; petition to the Regional Director.

(d) the names of contending labor unions which shall Section 20. Period to Reply. - A reply to the appeal may
appear as follows: petitioner union/s in the order in be filed by any party to the petition within ten (10) days
which their petitions were filed, forced intervenor, and from receipt of the memorandum of appeal. The reply
no union; and shall be filed directly with the Office of the Secretary.

(e) a directive upon the employer and the contending Section 21. Decision of the Secretary. - The Secretary
union(s) to submit within ten (10) days from receipt of shall have fifteen (15) days from receipt of the entire
the order, the certified list of employees in the records of the petition within which to decide the appeal.
bargaining unit, or where necessary, the payrolls The filing of the memorandum of appeal from the order
covering the members of the bargaining unit for the last or decision of the Med-Arbiter stays the holding of any
three (3) months prior to the issuance of the order certification election.

3.12 Appeal of Order Granting or Denying Petition The decision of the Secretary shall become final and
executory after ten (10) days from receipt thereof by the
Section 17. Appeal. - The order granting the conduct of a parties. No motion for reconsideration of the decision
certification election in an unorganized establishment shall be entertained.
shall not be subject to appeal. Any issue arising
therefrom may be raised by means of protest on the Section 22. Transmittal of records to the Regional Office.
conduct and results of the certification election. - Within forty-eight (48) hours from notice of receipt of
decision by the parties and finality of the decision, the
entire records of the case shall be remanded to the
Regional Office of origin for implementation.


LABOR RELATIONS: Azucena Vol. II
Implementation of the decision shall not be stayed furnished notices of subsequent pre-election
unless restrained by the appropriate court. conferences and to attend the same.

May a certification election be held legally upon Section 4. Minutes of pre-election conference. - The
petition of Union B while a petition for CE by Union Election Officer shall keep the minutes of matters raised
A is pending on appeal at the Office of the and agreed upon during the pre-election conference. The
parties shall acknowledge the completeness and
Secretary? No, the appeal should first be resolved.
correctness of the entries in the minutes by affixing their
signatures thereon. Where any of the parties refuse to
3.13 Conducting the CE sign the minutes, the Election Officer shall note such fact
in the minutes, including the reason for refusal to sign
3.13a Pre-election Conference the same. In all cases, the parties shall be furnished a
copy of the minutes.
Section 1. Raffle of the case. - Within twenty-four (24)
hours from receipt of the notice of entry of final The pre-election conference shall be completed within
judgment granting the conduct of a certification election, thirty (30) days from the date of the first hearing.
the Regional Director shall cause the raffle of the case to
an Election Officer who shall have control of the pre- Section 6. Posting of Notices. - The Election Officer shall
election conference and election proceedings. cause the posting of notice of election at least ten (10)
days before the actual date of the election in two (2)
Section 2. Pre-election conference. - Within twenty-four most conspicuous places in the company premises. The
(24) hours from receipt of the assignment for the notice shall contain:
conduct of a certification election, the Election Officer (a) the date and time of the election;
shall cause the issuance of notice of preelection
conference upon the contending unions and the (b) names of all contending unions;
employer, which shall be scheduled within ten (10) days
from receipt of the assignment. (c) the description of the bargaining unit and the list of
eligible and challenged voters.
The pre-election conference shall set the mechanics for
the election and shall determine, among others, the The posting of the notice of election, the information
following: required to be included therein and the duration of
(a) date, time and place of the election, which shall not posting cannot be waived by the contending unions or
be later than forty-five (45) days from the date of the the employer.
first pre-election conference, and shall be on a regular
working day and within the employer's premises, unless 3.13b Conducting the CE: The Voters
circumstances require otherwise;
One of the matters the pre-election conference
(b) list of eligible and challenged voters;
threshes out is the list of voters.

(c) number and location of polling places or booths and

the number of ballots to be prepared with appropriate Section 5. Qualification of voters; inclusion-exclusion. -
translations, if necessary; All employees who are members of the appropriate
bargaining unit sought to be represented by the
(d) name of watchers or representatives and their petitioner at the time of the issuance of the order
granting the conduct of a certification election shall be
alternates for each of the parties during election;
eligible to vote.

(e) mechanics and guidelines of the election.
The list of voters should be based on the employer-
Section 3. Waiver of right to be heard. - Failure of any certified list of employees in the CBU or payrolls. If
party to appear during the pre-election conference the employer does not submit the list or payrolls,
despite notice shall be considered as a waiver to be the union may submit its own list.
present and to question or object to any of the
agreements reached in said pre-election conference. Even the list of employees submitted to the SSS
Nothing herein, however, shall deprive the non- may be used as basis to comprise the list of voters
appearing party or the employer of its right to be
for the CE. “It should ideally be the payroll which


LABOR RELATIONS: Azucena Vol. II
should have been used for the purpose of the In a certification election all rank-and-file employees in
election. However, the unjustified refusal of a the appropriate bargaining unit are entitled to vote. This
company to submit the payroll in its custody, principle is clearly stated in Art. 255 of the Labor Code
despite efforts to make it produce it, compelled which states that the "labor organization designated or
selected by the majority of the employees in an
resort to the SSS list as the next best source of
appropriate bargaining unit shall be the exclusive
information. After all, the SSS list is a public record representative of the employees in such unit for the
whose regularity is presumed.” purpose of collective bargaining."

Only the employees who are directly employed by Collective bargaining covers all aspects of the
the employer and working along the activities to employment relation and the resultant CBA negotiated
which the employer is engaged and linked by by the certified union binds all employees in the
employer-employee relationship are qualified to bargaining unit. Hence, all rank-and-file employees,
participate in the certification election, “irrespective probationary or permanent, have a substantial interest in
of the period of their employment.” the selection of the bargaining representative. The Code
makes no distinction as to their employment status as

basis for eligibility in supporting the petition for
Employees of an independent contractor who certification election. The law refers to "all" the
undertakes to do a piece of work for his account employees in the bargaining unit. All they need to be
and responsibility, with minimum interference on eligible to support the petition is to belong to the
the part of the other contracting party (indirect "bargaining unit.".
employer), not being laborers or employees of the
latter, are not qualified to participate therein. INK Believers May Vote

In case of disagreement over the voters' list or over the In the CE all members of the unit, whether union
eligibility of voters, all contested voters shall be allowed members or not, have the right to vote. Union
to vote. But their votes shall be segregated and sealed in membership is not a prerequisite. If majority of the
individual envelopes in accordance with Sections 10 and
unit members do not want a union, as expressed in
11 of this Rule.
the CE, such majority decision must be respected.


Dismissed Employee
Logically, the right NOT to join, affiliate with, or assist any
union, and to disaffiliate or resign from a labor
An employee who has been dismissed from work organization, is subsumed in the right to join, affiliate
but has contested the legality of the dismissal in a with, or assist any union, and to maintain membership
forum of appropriate jurisdiction at the time of the therein. The right to form or join a labor organization
issuance of the order for the conduct of a necessarily includes the right to refuse or refrain from
certification election shall be considered a qualified exercising said right. It is self-evident that just as no one
voter, unless his/her dismissal was declared final should be denied the exercise of a right granted by law,
judgment at the time of the conduct of the so also, no one should be compelled to exercise such a
certification election. conferred right. The fact that a person has opted to
acquire membership in a labor union does not preclude

his subsequently opting to renounce such membership.
In Philippine jurisprudence it is now settled that

employees who have been improperly laid off but who
The purpose of a certification election is precisely the
have a present, unabandoned right to or expectation of
ascertainment of the wishes of the majority of the
re-employment, are eligible to vote in certification
employees in the appropriate bargaining unit: to be or
elections. 10 Thus, and to repeat, if the dismissal is under
not to be represented by a labor organization, and in the
question, as in the case now at bar whereby a case of
affirmative case, by which particular labor organization. If
illegal dismissal and/or unfair labor practice was filed, the
the results of the election should disclose that the
employees concerned could still qualify to vote in the
majority of the workers do not wish to be represented by
elections.
any union, then their wishes must be respected, and no
union may properly be certified as the exclusive
Probationary Employee representative of the workers in the bargaining unit in
dealing with the employer regarding wages, hours and



LABOR RELATIONS: Azucena Vol. II
other terms and conditions of employment. The minority If a ballot is torn, defaced or left unfilled in such a
employees — who wish to have a union represent them manner as to create doubt or confusion or to identify the
in collective bargaining — can do nothing but wait for voter, it shall be considered spoiled. If the voter
another suitable occasion to petition for a certification inadvertently spoils a ballot, he/she shall return it to the
election and hope that the results will be different. They Election Officer who shall destroy it and give him/her
may not and should not be permitted, however, to another ballot.
impose their will on the majority — who do not desire to
have a union certified as the exclusive workers' benefit in Section 10. Challenging of votes. - An authorized
the bargaining unit — upon the plea that they, the representative of any of the contending unions and
minority workers, are being denied the right of self- employer may challenge a vote before it is deposited in
organization and collective bargaining. the ballot box only on any of the following grounds:
(a) that there is no employer-employee relationship
The respondents' argument that the petitioners are between the voter and the company;
disqualified to vote because they "are not constituted
into a duly organized labor union" — "but members of (b) that the voter is not a member of the appropriate
the INK which prohibits its followers, on religious bargaining unit which petitioner seeks to represent.
grounds, from joining or forming any labor organization"
— and "hence, not one of the unions which vied for Section 11. Procedure in the challenge of votes. - When a
certification as sole and exclusive bargaining vote is properly challenged, the Election Officer shall
representative," is specious. Neither law, administrative place the ballot in an envelope which shall be sealed in
rule nor jurisprudence requires that only employees the presence of the voter and the representatives of the
affiliated with any labor organization may take part in a contending unions and employer. The Election Officer
certification election. On the contrary, the plainly shall indicate on the envelope the voter's name, the
discernible intendment of the law is to grant the right to union or employer challenging the voter, and the ground
vote to all bona fide employees in the bargaining unit, for the challenge. The sealed envelope shall then be
whether they are members of a labor organization or signed by the Election Officer and the representatives of
not. the contending unions and employer. The Election
Officer shall note all challenges in the minutes of the
3.13c Conducting the CE: The Voting election and shall be responsible for consolidating all
envelopes containing the challenged votes. The
Section 7. Secrecy and sanctity of the ballot. - To ensure envelopes shall be opened and the question of eligibility
secrecy of the ballot, the Election Officer, together with shall be passed upon only if the number of segregated
the authorized representatives of the contending unions voters will materially alter the results of the election.
and the employer, shall before the start of the actual
voting, inspect the polling place, the ballot boxes and the Section 12. On-the-spot questions. - The Election Officer
polling booths. shall rule on any question relating to and raised during
the conduct of the election. In no case, however, shall
Section 8. Preparation of ballots. - The Election Officer the election officer rule on any of the grounds for
shall prepare the ballots in English and Filipino or the challenge specified in the immediately preceding section.
local dialect, corresponding to the number of voters and
a reasonable number of extra ballots. All ballots shall be Section 13. Protest; when perfected. - Any party-in-
signed at the back by the Election Officer and authorized interest may file a protest based on the conduct or
representative of each of the contending unions and mechanics of the election. Such protests shall be
employer. Failure or refusal to sign the ballots shall be recorded in the minutes of the election proceedings.
considered a waiver thereof and the Election Officer shall Protests not so raised are deemed waived.
enter the fact of such refusal or failure in the records of
the case as well as the reason for the refusal or failure to The protesting party must formalize its protest with the
sign. Med-Arbiter, with specific grounds, arguments and
evidence, within five (5) days after the close of the
Section 9. Marking of votes. - The voter must put a cross election proceedings. If not recorded in the minutes and
(O) or check (P) mark in the square opposite the name formalized within the prescribed period, the protest shall
of the union of his choice or "No Union" if he/she does be deemed dropped.
not want to be represented by any union.
Section 15. Conduct of election and canvass of votes. -
The election precincts shall open and close on the date



LABOR RELATIONS: Azucena Vol. II
and time agreed upon during the pre-election 3.13e Who Wins in CE: Proclamation and
conference. The opening and canvass shall proceed Certification
immediately after the precincts have closed. Failure of
any party or the employer or his/her/their representative Section 20. Proclamation and certification of the result of
to appear during the election proceedings shall be the election. - Within twenty-four (24) hours from final
considered a waiver to be present and to question the canvass of votes, there being a valid election, the
conduct thereof. Election Officer shall transmit the records of the case to
the Med-Arbiter who shall, within the same period from
ULP in Relation to Election receipt of the minutes and results of election, issue an
order proclaiming the results of the election and
The employer deserves our strongest condemnation for certifying the union which obtained a majority of the
ignoring the petitioners' request for permission for some valid votes cast as the sole and exclusive bargaining
time out to attend to the hearing of their petition before agent in the subject bargaining unit, under any of the
the med-arbiter. It is not only an act of arrogance, but a following conditions:
brazen interference as well with the employees right to
self-organization, contrary to the prohibition of the Labor (a) no protest was filed or, even if one was filed, the
Code against unfair labor practices. same was not perfected within the five-day period for
perfection of the protest;
It is unfair labor practice for the company to suspended
the workers on the ground of "abandonment of work" on (b) no challenge or eligibility issue was raised or, even if
the day on which the pre-election conference had been one was raised, the resolution of the same will not
scheduled. It is the employee’s right to hold a materially change the results of the elections.
certification election, the exercise of which is their sole
prerogative. The winning union shall have the rights, privileges and
obligations of a duly certified collective bargaining agent
A company commits unfair labor practice where it issued from the time the certification is issued.
suspension and termination orders while the employees
are in the midst of a certification election preliminary to Where majority of the valid votes cast results in "No
a labor management conference "to normalize Union" obtaining the majority, the Med-Arbiter shall
employer-employee relations." declare such fact in the order.

3.13d Conducting the CE: Canvassing of Votes Section 16. Certification of Collective Bargaining Agent. -
The union which obtained a majority of the valid votes
The voting shall close on the date and time agreed cast shall be certified as the sole and exclusive bargaining
upon in the pre-election conference. Canvassing agent of all the employees in the appropriate bargaining
unit within five (5) days from the day of the election,
shall immediately follow.
provided no protest is recorded in the minutes of the
election.
Section 14. Canvassing of votes. - The votes shall be

counted and tabulated by the Election Officer in the
presence of the representatives of the contending
3,13f Failure of Election: Motion for a Remedial
unions. Upon completion of the canvass, the Election Election
Officer shall give each representative a copy of the
minutes of the election proceedings and results of the Section 17. Failure of election. - Where the number of
election. The ballots and the tally sheets shall be sealed votes cast in a certification or consent election is less
in an envelope and signed by the Election Officer and the than the majority of the number of eligible voters and
representatives of the contending unions and there are no material challenged votes, the Election
transmitted to the Med-Arbiter, together with the Officer shall declare a failure of election in the minutes of
minutes and results of the election, within twenty-four the election proceedings.
(24) hours from the completion of the canvass.
Section 18. Effect of failure of election. - A failure of
Where the election is conducted in more than one election shall not bar the filing of a motion for the
region, consolidation of results shall be made within immediate holding of another certification or consent
fifteen (15) days from the conduct thereof. election within six (6) months from date of declaration of
failure of election.



LABOR RELATIONS: Azucena Vol. II
4. the total number of votes for all the unions is at
Section 19. Action on the motion. - Within twenty-four least 50% of the valid votes cast.
(24) hours from receipt of the motion, the Election
Officer shall immediately schedule the conduct of 5. there is no unresolved challenge of voter or
another certification or consent election within fifteen
election protest.
(15) days from receipt of the motion and cause the
posting of the notice of certification election at least ten

(10) days prior to the scheduled date of election in two 3.14 Appeal to Secretary as to Election Result—See
(2) most conspicuous places in the establishment. The D.O. No. 40-E-03 (dated 30 November 2005)
same guidelines and list of voters shall be used in the
election. 3.15 Election Irregularities, Protest by Employer

3.13g Run-off Election The manner in which the election was held could make
the difference between industrial strife and industrial
Section 1. When proper. - When an election which harmony in the company. What an employer is
provides for three (3) or more choices results in none of prohibited from doing is to interfere with the conduct of
the contending unions receiving a majority of the valid the certification election for the purpose of influencing
votes cast, and there are no objections or challenges its outcome. But certainly an employer has an abiding
which if sustained can materially alter the results, the interest in seeing to it that the election is clean, peaceful,
Election Officer shall motu propio conduct a run-off orderly and credible.
election within ten (10) days from the close of the
election proceedings between the labor unions receiving 4. THIRD METHOD: CONSENT ELECTION
the two highest number of votes; provided, that the total
number of votes for all contending unions is at least fifty Like a CE, its purpose is the same, namely, to find
(50%) percent of the number of votes cast. out which union should serve as the bargaining
agent. The difference is that a certification is
"No Union" shall not be a choice in the run-off election.
ordered by the Department while a consent

Notice of run-off elections shall be posted by the Election
election is voluntarily agreed upon by the parties,
Officer at least five (5) days before the actual date of run- with or without the intervention of the Department.
off election.
Two or more unions are involved in a consent
Section 2. Qualification of voters. - The same voters' list election. And like certification election, consent
used in the certification election shall be used in the run- election may take place in an unorganized or
off election. The ballots in the run-off election shall organized establishment.
provide as choices the unions receiving the highest and
second highest number of the votes cast. The labor union 4.1 Effect of Consent Election
receiving the greater number of valid votes cast shall be

certified as the winner, subject to Section 20, Rule IX.
Section 23. Effects of consent election. - Where a petition
for certification election had been filed, and upon the
To summarize, a run-off election is proper if five intercession of the Med-Arbiter, the parties agree to hold
concurrent conditions exist, namely: a consent election, the results thereof shall constitute a
1. a valid election took place because majority of bar to the holding of a certification election for one (1)
the CBU members voted. year from the holding of such consent election. Where an
appeal has been filed from the results of the consent
2. the election presented a least three choices, e.g., election, the running of the one-year period shall be
Union One, Union Two, and No Union, meaning suspended until the decision on appeal has become final
there are at least two union “candidates.” and executory.


Where no petition for certification election was filed but
3. not one of the unions obtained the majority ofthe the parties themselves agreed to hold a consent election
valid votes. with the intercession of the Regional Office, the results
thereof shall constitute a bar to another petition for
certification election.



LABOR RELATIONS: Azucena Vol. II
May a minority union charge the employer with
5. THE WINNER AS SOLE AND EXCLUSIVE ULP? Yes. It can file an individual or group
REPRESENTATIVE complaint for ULP. It can even engage in peaceful
concerted activity. But it cannot resort to work
Collective bargaining contemplates the stoppage or strike because strike is reserved, under
representation of the collective bargaining interests Article 263, to an exclusive bargaining
of all the employees in the particular bargaining representative (i.e., the majority union), if there is
unit by a properly selected bargaining agent. The one.
selection of a bargaining agent by a majority of such
employees, under express provisions of the Act, 5.3 Is the Bargaining Union a Majority Union?
constitutes the agent as the representative of all
the employees within the particular bargaining unit. The minority union’s entitlement to protection
The Act provides that such bargaining agent shall be gains greater force and respect if it is remembered
the “exclusive” representative of the employees. that the bargaining union does not always comprise
The term “exclusive” was interpreted under the the numerical majority in the bargaining unit.
original Act to mean that the employer must treat
with the representative to the exclusion of all other Article 256 requires, for a union to win a CE, only a
claiming bargaining agents. majority of the valid votes cast. The majority of the
valid votes may be lesser that the majority of the
5.1 Exclusive Bargaining Agent Represents Even the employees in the bargaining unit.
Minority Union
Article 256 therefore does not support Article 255;
On the part of the union that won in the certification in fact, they are incongruent. Whereas Article 255
election, it becomes, and is certified as, the exclusive requires selection by majority of the unit members,
bargaining agent of all the workers in the bargaining unit. Article 256 requires only majority of the valid votes
It represents even the members of the minority union. cast. The result may be a bargaining agent that does

not carry the mandate of the majority of the
However, although the union has every right to
represent its members in the negotiation regarding the
employees.
terms and conditions of their employment, it cannot
negate their wishes on matters which are purely personal 5.4 May the Bargaining Agent Represent Retired
and individual to them. Employees?

5.2 Protection and Capacity of the Loser; the Duty In pursuing their claim for retirement benefits
of Fair Representation under the CBA, the claimant retirees are
represented by the union of which they were
What if the majority union neglects the interest of former members.
the employees in the minority union? The majority ________
union in such case will be violating its duty of fair
representation. This duty obligates the majority Title VII-A
union to serve the interest of all members of the GRIEVANCE MACHINERY
whole bargaining unit without hostility or AND VOLUNTARY ARBITRATION
discrimination.
Article. 260. Grievance machinery and voluntary
What can the minority do? The minority union, arbitration. - The parties to a Collective Bargaining
although a loser in the election, does not lose its Agreement shall include therein provisions that will
character as a lawful labor organization entitled to ensure the mutual observance of its terms and
protection under Article 246 which makes it conditions. They shall establish a machinery for the
unlawful for any person to abridge the right to self- adjustment and resolution of grievances arising
organization. (see also Article 255) from the interpretation or implementation of their
Collective Bargaining Agreement and those arising



LABOR RELATIONS: Azucena Vol. II
from the interpretation or enforcement of company to-day working out of plant problems is its
personnel policies. administrative or judicial aspects.

All grievances submitted to the grievance Strengthening the binding force of the CBA, Art. 248
machinery which are not settled within seven (7) considers as unfair labor practice any act that
calendar days from the date of its submission shall violates an existing collective bargaining agreement.
automatically be referred to voluntary arbitration But this law must be related to Art, 261 which limits
prescribed in the Collective Bargaining Agreement. that kind of ULP to “gross violations” only.

For this purpose, parties to a Collective Bargaining 2. C.B.A., LAW BETWEEN THE PARTIES
Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary The provisions of the collective bargaining agreement
Arbitrators, or include in the agreement a must be respected since its terms and conditions
procedure for the selection of such Voluntary "constitute the law between the parties." Those who are
Arbitrator or panel of Voluntary Arbitrators, entitled to its benefits can invoke its provisions. In the
event that an obligation therein imposed is not fulfilled,
preferably from the listing of qualified Voluntary
the aggrieved party has the right to go to court for
Arbitrators duly accredited by the Board. In case the redress.
parties fail to select a Voluntary Arbitrator or panel
of Voluntary Arbitrators, the Board shall designate Unilaterally formulated rules and policy can neither
the Voluntary Arbitrator or panel of Voluntary contradict nor undermine the CBA provisions.
Arbitrators, as may be necessary, pursuant to the
selection procedure agreed upon in the Collective Since the collective bargaining agreement is considered
Bargaining Agreement, which shall act with the the law between the parties, containing as it does the
same force and effect as if the Arbitrator or panel of agreed terms of employment of the employee with his
Arbitrators has been selected by the parties as employer, unilaterally imposed orders or rules qualifying
described above. the terms contained in the agreement are subordinate to
________ the CBA. At most, such rules, such as the rules on trips
abroad formulated by petitioner [school] a few months
1. CONTRACT ADMINISTRATION AS PART OF THE before Legaspi’s application, are merely suppletory and
can neither contradict nor undermine the terms found in
DUTY TO BARGAIN
the CBA.


Collective bargaining is not an end in itself. It is a
2.1 Construing the Contract
means to an end, which is the making of collective

agreements stabilizing employment relations for a The CBA being a contract, the rules embodied in the Civil
period of time with results advantageous both to Code on interpretation of contracts should govern. The
the worker and the employer. intent of the parties should be ascertained by
considering relevant provisions of the said CBA. The
However narrowly it may canalize its course, the intention of the parties is primordial; if the terms of the
execution of a contract does not complete contract are clear, the literal meaning of the stipulations
collective bargaining. Piece rates and work shall control, but if the words appear to be contrary to
assignments frequently require day-to-day the evident intention of the parties, the latter shall
adjustments; periodic decisions must be made prevail over the former.

concerning such matters as shop rules, job content,
Any doubts or ambiguity in the contract between
and the letting of subcontracts. There will be management and the union members should be resolved
ambiguities in the agreement to be clarified and in the light of Article 1702 of the Civil Code that: In case
gaps be filled. In other words, the duty to bargain of doubt, all labor legislation and all labor contracts shall
continues into the contract administration stage. be construed in favor of the safety and decent living for
the laborer. This is also in consonance with the principle
In effect, therefore, “contract negotiations are the enunciated in the Labor Code that all doubts should be
legislative process of collective bargaining; the day- resolved in favor of the worker.



LABOR RELATIONS: Azucena Vol. II
large classes of its members," and "a union member who
But contracts which are not ambiguous are to be is employed under an agreement between the union and
interpreted according to their literal meaning and should his employer is bound by the provisions thereof, since it
not be interpreted beyond their obvious intendment. is a joint and several contract of the members of the
union entered into by the union as their agent."
Compliance with a CBA is mandated by the expressed
policy to give protection to labor. In the same vein, CBA 4.1 Persons Entitled to Benefits
provisions should be "construed liberally rather than
narrowly and technically, and the courts must place a It is true that whatever benefits the majority union
practical and realistic construction upon it, giving due obtains from the employer accrue to its members as well
consideration to the context in which it is negotiated and as to non-members. For the benefits of a collective
purpose which it is intended to serve." This is founded on bargaining agreement are extended to all employees
the dictum that a CBA is not an ordinary contract but one regardless of their membership in the union because to
impressed with public interest. It goes without saying, withhold the same from the non-members would be to
however, that only provisions embodied in the CBA discriminate against them.
should be so interpreted and complied with.
It is even conceded that a laborer can claim benefits from
2.2 Proposal Contained in Minutes but Not in the a collective bargaining agreement entered into between
CBA Itself the company and the union of which he is a member at
the time of the conclusion of the agreement, even after
A proposal mentioned in the negotiation but not he has resigned from said union.
embodied in the collective bargaining contract itself
is not part of the CBA. It cannot serve as basis of a 4.2 Managers Not Entitled to CBA Benefits;
charge of violating the CBA or of bargaining in bad Exception
faith.
Managers, who are not allowed to unionize to
2.3 “Zipper Clause” bargain collectively with the employer, cannot claim
the benefits contained in the CBA negotiated by the
A device to forestall negotiation proposals after the workers under them. They cannot obtain indirectly
CBA has been signed is the “zipper clause.” It is a what they cannot do directly.
stipulation in a CBA indicating that issues that could
have been negotiated but not contained in the CBA Accordingly, managerial employees cannot, in the
cannot be raised for negotiation when the CBA is absence of an agreement to the contrary, be allowed to
share in the concessions obtained by the labor union
already in effect. In short, the CBA is a complete
through collective negotiation. Otherwise, they would be
agreement; negotiation is closed, as a zipper does. exposed to the temptation of colluding with the union
during the negotiations to the detriment of the
3. LAW DEEMED WRITTEN IN CONTRACT employer.

The principle is thus well-settled that an existing law However, there is nothing to prevent the employer from
enters into and forms part of a valid contract granting benefits to managerial employees equal to or
without the need for the parties expressly making higher than those afforded to union members. There can
reference to it. Only thus could its validity insofar as be no conflict of interest where the employer himself
some of its provisions are concerned be assured. voluntarily agrees to grant such benefits to managerial
employees. In the case at bar, at the beginning of

petitioner's employment, he was told that those who are
4. BINDING EFFECT OF AGREEMENT not covered by the CBA would nevertheless be entitled
to benefits which would be, if not higher, at least
A collective bargaining agreement entered into by equivalent to those provided in the CBA. That private
officers of a union, as agent of the members, and an respondents made such a promise to petitioner is not
employer, gives rise to valid enforceable contractual denied by them.
relations, against the individual union members in
matters that affect them peculiarly, and against the
4.3 Effect of Collective Agreement on the Individual
union in matters that affect the entire membership or
Contracts of Employment


LABOR RELATIONS: Azucena Vol. II

When a collective agreement is concluded between Section 80. Effects of merger or consolidation. - The
a labor union and an employer, the members of the merger or consolidation shall have the following effects:
labor union are precluded from entering into
individual contracts of employment. But if the xxx

agreement merely fixes wages and working
5. The surviving or consolidated corporation shall be
conditions, the employer may enter into particular responsible and liable for all the liabilities and obligations
contracts of employment with his employees even of each of the constituent corporations in the same
though both are bound by the general contract as manner as if such surviving or consolidated corporation
to wages and working conditions. had itself incurred such liabilities or obligations; and any
pending claim, action or proceeding brought by or
5. ENFORCEABILITY AGAINST TRANSFEREE OF against any of such constituent corporations may be
ENTERPRISE prosecuted by or against the surviving or consolidated
corporation. The rights of creditors or liens upon the
5.1 Purchase of Assets property of any of such constituent corporations shall
not be impaired by such merger or consolidation. (n)

The rule is that unless expressly assumed, labor contracts

such as employment contracts and collective bargaining 5.4 Wiley Doctrine
agreements are not enforceable against a transferee of
an enterprise, labor contracts being in personam, thus The disappearance by merger of a corporate
binding only between the parties. A labor contract employer which has entered into a collective
merely creates an action in personally and does not bargaining agreement with a union does not
create any real right which should be respected by third automatically terminate all rights of the employees
parties. This conclusion draws its force from the right of covered by the agreement, even though the merger
an employer to select his employees and to decide when is for genuine business reasons. Under the Wiley
to engage them as protected under our Constitution, and
doctrine, a duty to arbitrate arising from a collective
the same can only be restricted by law through the
exercise of the police power.
bargaining agreement survives the employer’s
ceasing to do business as a separate entity after its
As a general rule, there is no law requiring a bona fide merger with a substantially large corporation, so as
purchaser of assets of an on-going concern to absorb in to be binding on the larger corporation, where
its employ the employees of the latter. relevant similarity and continuity of operations
across the change in ownership is evidenced by the
5.2 Exceptions wholesale transfer of the smaller corporation’s
employees to the larger corporation’s plant. If a
Although the purchaser of the assets or enterprise is not contractual duty to arbitrate survives the
legally bound to absorb in its employ the employers of employer’s merger into another corporate
the seller of such assets or enterprise, the parties are employer, question as to the effect of the merger
liable to the employees if the transaction between the on the rights of the employees covered by the
parties is colored or clothed with bad faith.
agreement—the former employees of the merged

employer—are arbitrable if questions as to those
5.3 Merger and Consolidation
rights would have been arbitrable before the

merger.
Merger takes place when two or more corporations

join into a single corporation which is one of the
But a duty to arbitrate arising from collective
merging corporations; the separate existence of the
bargaining agreement does not survive in every
other constituent corporations ceases.
case in which the ownership or corporate structure
Consolidation occurs when two or more
of an enterprise is changed. It does not survive
corporations join into a new single corporation; the
where there is lack of any substantial continuity of
separate existence of all the constituent
identity in the business enterprise before and after
corporations ceases, except that of the consolidated
a change, or where the union abandons its right to
corporation.
arbitration by failing to make its claims known.


LABOR RELATIONS: Azucena Vol. II
stipulation would therefore violate the legal maxim that
6. CHANGE OF BARGAINING AGENT; res inter alios nec prodest nec nocet.
SUBSTITUTIONARY DOCTRINE
7. GRIEVANCES
How does disaffiliation affect the CBA?
A grievance is defined as “any question by either
The agreement is binding on the parties for the period the employer or the union regarding the
therein specified. The employees cannot revoke the interpretation or application of the collective
validly executed collective bargaining contract with their bargaining agreement or company personnel
employer by the simple expedient of changing their policies or any claim by either party that the other
bargaining representative. Thus, when there occurs a party is violating any provision of the CBA or
shift in employees' union allegiance after the execution company personnel policies.”
of a bargaining contract with their employer, and the

employees change their bargaining representative, the
contract continues to bind them up to its expiration date.
If the term grievance is to be applied in the loose or
The new agent, however, may bargain for the shortening generic sense, any dispute or controversy
of the contract period. respecting terms and conditions of employment
which an employee or group of employees may
In formulating the "substitutionary" doctrine, the only present to the employer can be a grievance, even
consideration involved was the employees' interest in without a union or CBA.
the existing bargaining agreement. The agent's interest
never entered the picture. In fact, the justification 9 for The expansion of the original and exclusive
said doctrine was: jurisdiction of voluntary arbitrators to include

questions arising from the interpretation and
xxx that the majority of the employees, as an entity under
the statute, is the true party in interest to the contract,
enforcement of company personnel policies has the
holding rights through the agency of the union effect of widening the meaning and interpretation
representative. Thus, any exclusive interest claimed by of a grievance to include a situation where there is
the agent is defeasible at the will of the principal.... no collective bargaining agent and no CBA.
(Emphasis supplied)
Personnel policies are guiding principles stated in
Stated otherwise, the "substitutionary" doctrine only broad, long-range terms that express the
provides that the employees cannot revoke the validly philosophy or beliefs of an organization’s top
executed collective bargaining contract with their authority regarding personnel matters.
employer by the simple expedient of changing their

bargaining agent. And it is in the light of this that the
phrase "said new agent would have to respect said
They deal with matters affecting efficiency and well-
contract" must be understood. It only means that the being of employees and include, among others, the
employees, thru their new bargaining agent, cannot procedures in administration of wages, benefits,
renege on their collective bargaining contract, except of promotions, transfer and other personnel
course to negotiate with management for the shortening movements which are usually not spelled out in the
thereof. collective agreement. The usual source of
grievances, however, is the rules and regulations
The "substitutionary" doctrine, therefore, cannot be governing disciplinary actions.
invoked to support the contention that a newly certified
collective bargaining agent automatically assumes all the
7.1 By-passing the Grievance Machinery: ULP
personal undertakings — like the no-strike stipulation
here — in the collective bargaining agreement made by

the deposed union. When BBWU bound itself and its All grievances arising from the implementation or
officers not to strike, it could not have validly bound also interpretation of the collective bargaining
all the other rival unions existing in the bargaining units agreement and/or interpretation and enforcement
in question. BBWU was the agent of the employees, not of company personnel policies are compulsorily
of the other unions which possess distinct personalities. subject to the grievance of machinery.
To consider UNION contractually bound to the no-strike



LABOR RELATIONS: Azucena Vol. II
Upholding the requirement, the Court has ruled
that the grievance procedure provided in the CBA Contrary to the finding of the Court of Appeals, voluntary
should be adhered to by the parties. Refusal or arbitration as a mode of settling the dispute was not
failure to do so is an unfair labor practice, because forced upon respondents. Both parties indeed agreed to
submit the issue of validity of the dismissal of petitioner
the grievance procedure is part of the continuous
to the jurisdiction of the voluntary arbitrator by the
process of collective bargaining. It is intended to Submission Agreement duly signed by their respective
promote friendly dialogue between labor and counsels. As the voluntary arbitrator had jurisdiction over
management as a means of maintaining industrial the parties' controversy, discussion of the second issue is
peace. no longer necessary.

Before an aggrieved employee may resort to the The employee’s waiver of her option to submit her case
courts to enforce his individual rights under a to grievance machinery did not amount to relinquishing
bargaining contract, the employee must exhaust all her right to avail herself of voluntary arbitration.
the remedies available to him under such contract.
And a court should not entertain any complaint by 7.3 Structure and Procedure
an aggrieved employee until proper use has been
made of the contract grievance procedure agreed In the absence of applicable provision in the collective
bargaining agreement, a grievance committee shall be
upon by employer and the bargaining
created within ten (10) days from signing of the collective
representative. bargaining agreement. The committee shall be composed
of at least two (2) representatives each from the
The grievance machinery under the agreement is members of the bargaining unit and the employer, unless
the very heart of industrial self0government. otherwise agreed upon by the parties. The
representatives from among the members of the
May a grievance be brought to voluntary arbitration bargaining unit shall be designated by the union.
without passing through the grievance procedure
under the CBA? Section 2. Procedure in handling grievances. - In the
absence of a specific provision in the collective
bargaining agreement or existing company practice
This appears to be proscribed by the Labor Code
prescribing for the procedures in handling grievance, the
which directs the parties to a CBA to establish a following shall apply:
grievance machinery for the adjustment and
resolution of grievances arising from the (a) An employee shall present this grievance or complaint
interpretation or enforcement of company orally or in writing to the shop steward. Upon receipt
personnel policies. thereof, the shop steward shall verify the facts and
determine whether or not the grievance is valid.
In view, however, of the State policy to encourage
voluntary arbitration of all other labor-management (b) If the grievance is valid, the shop steward shall
disputes, it is submitted that a grievance may be immediately bring the complaint to the employee's
immediate supervisor. The shop steward, the employee
brought directly to voluntary arbitration without
and his immediate supervisor shall exert efforts to settle
passing through the grievance machinery, especially the grievance at their level.
when the latter has been proven to be ineffective in
the past, or when the parties inadvertently failed to (c) If no settlement is reached, the grievance shall be
include a grievance machinery provision in their referred to the grievance committee which shall have ten
CBA. (10) days to decide the case.

7.2 Waiver of Grievance Machinery Procedure and Where the issue involves or arises from the
Submission to VA interpretation or implementation of a provision in the
collective bargaining agreement, or from any order,
Article 262 of the Labor Code provides that upon memorandum, circular or assignment issued by the
agreement of the parties, the voluntary arbitrator can appropriate authority in the establishment, and such
hear and decide all other labor disputes. issue cannot be resolved at the level of the shop steward



LABOR RELATIONS: Azucena Vol. II
or the supervisor, the same may be referred immediately final disposition of the matter involved, select a judge of
to the grievance committee. their own choice and by consent submit their
controversy to him for determination. Under voluntary
8. VOLUNTARY ARBITRATION arbitration, on the other hand, referral of a dispute by
the parties is made, pursuant to a voluntary arbitration
Section 3. Submission to voluntary arbitration. - Where clause in their collective agreement, to an impartial third
grievance remains unresolved, either party may serve person for a final and binding resolution.
notice upon the other of its decision to submit the issue
to voluntary arbitration. The notice shall state the issue Ideally, arbitration awards are supposed to be complied
or issues to be arbitrated, copy thereof furnished the with by both parties without delay, such that once an
board or the voluntary arbitrator or panel of voluntary award has been rendered by an arbitrator, nothing is left
arbitrators named or designated in the collective to be done by both parties but to comply with the same.
bargaining agreement. If the party upon whom the After all, they are presumed to have freely chosen
notice is served fails or refuses to respond favorably arbitration as the mode of settlement for that particular
within seven (7) days from receipt thereof, the voluntary dispute. Pursuant thereto, they have chosen a mutually
arbitrator or panel of voluntary arbitrators designated in acceptable arbitrator who shall hear and decide their
the collective bargaining agreement shall commence case. Above all, they have mutually agreed to de bound
voluntary arbitration proceedings. Where the collective by said arbitrator's decision.
bargaining agreement does not so designate, the board
shall call the parties and appoint a voluntary arbitrator or Compulsory arbitration is a system whereby the parties
panel of voluntary arbitrators, who shall thereafter to a dispute are compelled by the government to forego
commence arbitration proceedings in accordance with their right to strike and are compelled to accept the
the proceeding paragraph. resolution of their dispute through arbitration by a third
party. 1 The essence of arbitration remains since a
In instances where parties fail to select a voluntary resolution of a dispute is arrived at by resort to a
arbitrator or panel of voluntary arbitrators, the regional disinterested third party whose decision is final and
branch of the Board shall designate the voluntary binding on the parties, but in compulsory arbitration,
arbitrator or panel of voluntary arbitrators, as may be such a third party is normally appointed by the
necessary, which shall have the same force and effect as government.
if the parties have selected the arbitrator.
In Philippine context, the “judge” in voluntary arbitration
is called arbitrator, while that in compulsory is labor
The parties to a CBA will decide on the number of
arbiter. The jurisdiction of a VA is stated in Articles 261
arbitrators who may hear a dispute only when the and 262 while that of an LA is in Article 217.
need for it arises. Even the law itself does not
specify the number of arbitrators. Their alternatives 8.1 Voluntary Arbitration: A Private Judicial System
— whether to have one or three arbitrators — have
their respective advantages and disadvantages. In A voluntary arbitrator “is not a public tribunal
this matter, cost is not the only consideration; full imposed upon the parties by a superior authority
deliberation on the issues is another, and it is best which the parties are obliged to accept. He has no
accomplished in a hearing conducted by three general character to administer justice for a
arbitrators. In effect, the parties are afforded the community which transcends the parties. He is
latitude to decide for themselves the composition rather part of a system of self-government created
of the grievance machinery as they find appropriate by and confined to the parties.”
to a particular situation.
The primary function of voluntary labor arbitration
Labor arbitration is the reference of a labor dispute is to provide (1) a process for the orderly disposition
to a third party for determination on the basis of of disputes and (2) a foundation for stable labor-
evidence and arguments presented by such parties, management relations.
who are bound to accept the decision.
8.2 Voluntary Arbitration: A Master Procedure
Voluntary arbitration has been defined as a contractual

proceeding whereby the parties to any dispute or
controversy, in order to obtain a speedy and inexpensive


LABOR RELATIONS: Azucena Vol. II
In labor-management relations voluntary The preferred method of selection is by mutual
arbitration is a master procedure. Any and all kinds agreement of the parties. Alternative methods
of labor disputes may be submitted to, settled, or include the selection or appointment by an
resolved through voluntary arbitration, if the parties administrative agency like the NCMB.
so desire. Money claims, bargaining deadlocks,
strike or lockout, employment termination, and Parties in general may choose between the use of a
even questions about existence or absence of temporary (when a dispute is already at hand;
employer-employee relationship, may be resolved specific) or permanent arbitrator (before a dispute
by the parties—with finality—by availing arises; for a period of time, usually during the life of
themselves of voluntary arbitration. the CBA). They have also a choice as to the number
of arbitrators, either a sole arbitrator or a panel of
As a master procedure voluntary arbitration takes arbitrators or Arbitration Board.
precedence over other dispute settlement devices
(i.e., cases before the labor arbiter or Secretary of 11. DISTINGUISHED FROM A COURT OF LAW
Labor or the NLRC)
Court of Law Arbitration
A dispute pending in voluntary arbitration (or Formal Informal
compulsory arbitration, for that matter) cannot be Follow precedents Not obliged
the subject of a strike or lockout notice. Rules of evidence Not observed
observed
9. WHO MAY BE ACCREDITED AS VOLUNTARY Decisions may be No comparable appeal
ARBITRATOR appealed to the higher recourse
court
The following are the minimum criteria for accreditation Hear a great variety of Hear only industrial
as voluntary arbitrator:
cases disputes

1. A Filipino citizen residing in the Philippines;
Services of a lawyer is Not essential
essential due to
2. A holder of at least a Bachelor’s Degree in any field of complexity
behavioral or applied sciences or equivalent educational
training short of a Bachelor’s Degree; Arbitration, in sum, is a non-technical and relatively
inexpensive procedure for obtaining a quick
3. At least five (5) years experience in the field of Labor- solution to industrial disputes by persons who have
Management relations; specialized knowledge of labor management

relations.
4. Completion of a training course on voluntary
________
arbitration conducted by the Board; and

5. A person of good moral character, noted for Article. 261. Jurisdiction of Voluntary Arbitrators or
impartiality, probity, and has not been civilly, criminally panel of Voluntary Arbitrators. - The Voluntary
and administratively adjudged guilty of any offense Arbitrator or panel of Voluntary Arbitrators shall
involving moral turpitude as evidenced by a duly sworn have original and exclusive jurisdiction to hear and
affidavit. decide all unresolved grievances arising from the
interpretation or implementation of the Collective
10. HOW VOLUNTARY ARBITRATOR IS CHOSEN Bargaining Agreement and those arising from the
interpretation or enforcement of company
A voluntary arbitrator is chosen by the parties personnel policies referred to in the immediately
themselves (preferably accredited by the NCMB). preceding article. Accordingly, violations of a
The choice is usually influenced by the trust in the Collective Bargaining Agreement, except those
person’s fairness and knowledge of the dynamics, which are gross in character, shall no longer be
including law, of labor-management relation. treated as unfair labor practice and shall be
resolved as grievances under the Collective


LABOR RELATIONS: Azucena Vol. II
Bargaining Agreement. For purposes of this article,
gross violations of Collective Bargaining Agreement The aforecited provisions of law cannot be read in
shall mean flagrant and/or malicious refusal to isolation or separately. They must be read as a whole and
comply with the economic provisions of such each Article of the Code reconciled one with the other.
agreement. An analysis of the provisions of Articles 217, 261, and 262
indicates, that:


The Commission, its Regional Offices and the 1. The jurisdiction of the Labor Arbiter and Voluntary
Regional Directors of the Department of Labor and Arbitrator or Panel of Voluntary Arbitrators over the
Employment shall not entertain disputes, cases enumerated in Articles 217, 261 and 262, can
grievances or matters under the exclusive and possibly include money claims in one form or another.
original jurisdiction of the Voluntary Arbitrator or
panel of Voluntary Arbitrators and shall 2. The cases where the Labor Arbiters have original and
immediately dispose and refer the same to the exclusive jurisdiction are enumerated in Article 217, and
Grievance Machinery or Voluntary Arbitration that of the Voluntary Arbitrator or Panel of Voluntary
provided in the Collective Bargaining Agreement. Arbitrators in Article 261.

________
3. The original and exclusive jurisdiction of Labor Arbiters
is qualified by an exception as indicated in the
Article. 262. Jurisdiction over other labor disputes. - introductory sentence of Article 217 (a), to wit:
The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties, shall Art. 217. Jurisdiction of Labor Arbiters . . . (a) Except as
also hear and decide all other labor disputes otherwise provided under this Code the Labor Arbiter
including unfair labor practices and bargaining shall have original and exclusive jurisdiction to hear and
deadlocks. decide . . . the following cases involving all workers. . . .
________
The phrase "Except as otherwise provided under this
Code" refers to the following exceptions:
1. ARBITRABLE DISPUTES

A. Art. 217. Jurisdiction of Labor Arbiters . . .
In the field of labor relations, arbitration applies to
two kinds of disputes: (1) contract-negotiation xxx
disputes; and (2) contract-interpretation disputes.
Contract negotiation disputes are disputes as to the (c) Cases arising from the interpretation or
terms of a collective bargaining agreement. Where implementation of collective bargaining agreement and
there is an existing agreement to arbitrate such those arising from the interpretation or enforcement of
disputes, and a bargaining deadlock or impasse has company procedure/policies shall be disposed of by the
arisen, the disputants submit to an impartial Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitrator as may be provided
outsider for settlement the collective bargaining
in said agreement.
issue which they had been unable to settle by
themselves, whether or not aided by conciliators. B. Art. 262. Jurisdiction over other labor disputes. — The
Contract interpretation disputes are disputes arising Voluntary Arbitrator or panel of Voluntary Arbitrators,
under an existing collective bargaining agreement, upon agreement of the parties, shall also hear and decide
involving such matters as the interpretation and all other labor disputes including unfair labor practices
application of the contract, or alleged violation of and bargaining deadlocks.
its provisions.
4. The jurisdiction of Voluntary Arbitrator or Panel of
Arbitration of contract negotiation disputes is often Voluntary Arbitrators is provided for in Arts. 261 and 262
of the Labor Code as indicated above.
known as arbitration of “interest,” while arbitration

of contract interpretation disputes is known as A. A close reading of Article 261 indicates that the
arbitration of “grievance” or “rights.” original and exclusive jurisdiction of Voluntary Arbitrator
or Panel of Voluntary Arbitrators is limited only to:
2. JURISDICTION OF L.A. AND V.A.



LABOR RELATIONS: Azucena Vol. II
. . . unresolved grievances arising from the interpretation from the interpretation or implementation of their
or implementation of the Collective Bargaining Collective Bargaining Agreement and those arising from
Agreement and those arising from the interpretation or the interpretation or enforcement of company personnel
enforcement of company personnel policies . . . policies." It is further provided in said article that the
Accordingly, violations of a collective bargaining parties to a CBA shall name or designate their respective
agreement, except those which are gross in character, representatives to the grievance machinery and if the
shall no longer be treated as unfair labor practice and grievance is not settled in that level, it shall automatically
shall be resolved as grievances under the Collective be referred to voluntary arbitrators (or panel of
Bargaining Agreement. . . . . voluntary arbitrators) designated in advance by the
parties. It need not be mentioned that the parties to a
B. Voluntary Arbitrators or Panel of Voluntary CBA are the union and the company. Hence, only
Arbitrators, however, can exercise jurisdiction over any disputes involving the union and the company shall be
and all disputes between an employer and a union referred to the grievance machinery or voluntary
and/or individual worker as provided for in Article 262. arbitrators.

It must be emphasized that the jurisdiction of the Article 261 of the Labor Code which grants to voluntary
Voluntary Arbitrator or Panel of Voluntary Arbitrators arbitrators original and exclusive jurisdiction to hear and
under Article 262 must be voluntarily conferred upon by decide all unresolved grievances arising from the
both labor and management. The labor disputes referred interpretation or implementation of the collective
to in the same Article 262 can include all those disputes bargaining agreement and those arising from the
mentioned in Article 217 over which the Labor Arbiter interpretation or enforcement of company personnel
has original and exclusive jurisdiction. policies. Note the phrase "unresolved grievances." In the
case at bar, the termination of petitioner is not an
As shown in the above contextual and wholistic analysis unresolved grievance.
of Articles 217, 261, and 262 of the Labor Code, the
National Labor Relations Commission correctly ruled that Article 260 further provides that the parties to a CBA
the Labor Arbiter had no jurisdiction to hear and decide shall name or designate their respective representative
petitioner's money-claim-underpayment of retirement to the grievance machinery and if the grievance is
benefits, as the controversy between the parties involved unsettled in that level, it shall automatically be referred
an issue "arising from the interpretation or to the voluntary arbitrators designated in advance by the
implementation" of a provision of the collective parties to a CBA of the union and the company. It can
bargaining agreement. The Voluntary Arbitrator or Panel thus be deduced that only disputes involving the union
of Voluntary Arbitrators has original and exclusive and the company shall be referred to the grievance
jurisdiction over the controversy under Article 261 of the machinery or voluntary arbitrators.
Labor Code, and not the Labor Arbiter.
2.1a “Policies,” “Rules,” “Procedures”
2.1 Jurisdiction over Termination Disputes
Policies are formulated by management even
The preference or bias of the law in favor of before a company opens for business in order to
voluntary arbitration justifies the view that guide the men in the operational level, the line
employment termination disputes, arising from CBA manager or supervisor as to the scope of their
or personnel policy implementation, are cognizable activities, authority and responsibility, and to
by a voluntary arbitrator and not a labor arbiter. enable them to arrive at sound decisions. Policies
Such termination cases, if filed with a labor arbiter, are valuable in fixing definite objectives for the
is to be dismissed for lack of jurisdiction and organization. Policy statements are also needed to
referred to the concerned NCMB Regional Branch allow subordinate executives to make fair and
for appropriate action. consistent decisions on recurrent problems. They
promote uniformity of action and prevent
Article 260 of the Labor Code on grievance machinery conflicting decisions especially as regards labor
and voluntary arbitrator states that "(t)he parties to a matter.”
Collective Bargaining Agreement shall include therein
provisions that will ensure the mutual observance of its
Company policies must be issued by top
terms and conditions. They shall establish a machinery
for the adjustment and resolution of grievances arising
management which is responsible for making major



LABOR RELATIONS: Azucena Vol. II
policies that are by nature company-wide in of voluntary arbitrators shall have exclusive and original
application. jurisdiction to hear and decide all grievances arising from
the implementation or interpretation of the collective
Minor policies, better known as rules and bargaining agreements and those arising from the
interpretation or enforcement of company personnel
procedures, are the extension of major policies and
policies which remain unresolved after exhaustion of the
are usually formulated by minor executives or grievance procedure.
department managers. Rules are specific guides
intended to govern conduct and action of operating They shall also have exclusive and original jurisdiction, to
supervisors and employees in the performance of hear and decide wage distortion issues arising from the
their designated activities. Procedures are made to application of any wage orders in organized
specify ways or methods of carrying out policies and establishments, as well as unresolved grievances arising
rules. A procedure tells what work or task to do, from the interpretation and implementation of the
how to do it, and when to do it. productivity incentive programs under RA 6971.

Upon agreement of the parties, any other labor dispute
2.2 Jurisdiction over CBA Violations
may be submitted to a voluntary arbitrator or panel of
voluntary arbitrators. Before or at any stage of the
CBA violations not constituting ULP are likewise compulsory arbitration process, the parties may opt to
cognizable by a voluntary arbitrator if not resolved submit their dispute to voluntary arbitration.
through the grievance machinery. If the violations,
however, are “gross” in character, these are to be The National Labor Relations Commission, its regional
treated as unfair labor practice which, following Art. branches and Regional Directors of the Department of
217 (a-1), are to be heard and decided by a labor Labor and Employment shall not entertain disputes,
arbiter. grievances or matters under the exclusive and original
jurisdiction of the voluntary arbitrator or panel of
voluntary arbitrators and shall immediately dispose and
The law wants the industrial players to resolve their
refer the same to the appropriate grievance machinery
differences by and among themselves as much as or voluntary arbitration provided in the collective
possible. And if they need help, they are likewise bargaining agreement.
free to agree where that help may come from.
2.4 Dispute over Company’s Drug Abuse Policy
For a ULP case to be cognizable by the Labor Arbiter, and
the NLRC to exercise its appellate jurisdiction, the A union’s petition to enjoin implementation of the
allegations in the complaint should show prima facie the company’s drug policy is a labor dispute beyond RTC’s
concurrence of two things, namely: (1) gross violation of jurisdiction. It is a personnel policy dispute within the
the CBA; AND (2) the violation pertains to the economic jurisdiction of a VA.
provisions of the CBA.

3. HOW VOLUNTARY ARBITRATION IS INITIATED
Unsubstantiated conclusions of bad faith and unjustified
refusal to re-employ petitioners, to our mind, do not

constitute gross violation of the CBA for purposes of Voluntary arbitration may be initiated either by 1) a
lodging jurisdiction with the Labor Arbiter and the NLRC. Submission or 2) by a Demand or Notice invoking a
Although evidentiary matters are not required (and even collective agreement arbitration clause. Sometimes
discouraged) to be alleged in complaint, still, sufficient both instruments are used in a case.
details supporting the conclusion of bad faith and unjust
refusal to re-employ petitioners must be indicated. Submission is sometimes called a “Stipulation” or an
Furthermore, it is even doubtful if the CBA provision on “Agreement to Arbitrate.” It is used where there is
re-employment fits into the accepted notion of an no previous agreement to arbitrate. The
economic provision of the CBA.
Submission, which must be signed by both parties,

describes an existing dispute; it often names the
2.3 Other Cases
arbitrator, procedures in the hearing and it

sometimes contains considerable details of the
Section 4. Jurisdiction of voluntary arbitrator or panel of
voluntary arbitrators. - The voluntary arbitrator or panel
arbitrator’s authority and other matters which the



LABOR RELATIONS: Azucena Vol. II
parties wish to control. Submission is more Generally, the arbitrator is expected to decide only
appropriate in interest disputes since collective those questions expressly delineated by the
agreement generally do not provide for the submission agreement. Nevertheless, the arbitrator
arbitration of such disputes that may arise in the can assume that he has the necessary power to
future. Submission is often entered into after the make a final settlement since arbitration is the final
dispute has materialized and the issues can already resort for adjudication of disputes.
be defined.
The issue of regularization should be viewed as two-
However, Demand or Notice of Intent to Arbitrate is tiered issue. While the submission agreement mentioned
more applicable to rights dispute because collective only the determination of the date or regularization, law
agreements are required under RA 6715 to provide and jurisprudence give the voluntary arbitrator enough
leeway of authority as well as adequate prerogative to
for a grievance procedure and a voluntary
accomplish the reason for which the law on voluntary
arbitration clause with respect to disputes arising arbitration was created – speedy labor justice. It bears
from the application or interpretation of the stressing that the underlying reason why this case arose
agreement. Thus, there is an “agreement to is to settle, once and for all, the ultimate question of
arbitrate” future dispute that may arise under and whether respondent employees are entitled to higher
during the term of the CBA. If a dispute is covered benefits. To require them to file another action for
by such an arbitration clause, arbitration may be payment of such benefits would certainly undermine
initiated unilaterally by one party by serving upon labor proceedings and contravene the constitutional
the other a written demand or notice of intent to mandate providing full protection to labor.
arbitrate.
4. POWERS OF THE ARBITRATOR
3.1 The Submission Agreement; Extent of
Arbitrator’s Authority The study of collective bargaining agreements
discloses different types of arbitration clauses with
Although the contract may establish the breadth of varying degrees of power granted to the arbitration.
the arbitrator’s power and the limits of his This power may be very limited or unusually broad
authority, his power may be more sharply defined in scope.
in the submission agreement. Frequently, the
parties jointly formulate in writing the specific