Labor
Relations Week 3
RIGHT TO SELF ORGANIZATION
BENGUET ELECTRIC COOPERATIVE, INC.,
petitioner, vs. HON. PURA FERRER-CALLEJA,
Director of the Bureau of Labor Relations, and
BENECO EMPLOYEES LABOR UNION,
respondents.
Facts:
On June 21, 1985 Beneco Worker's Labor Union-Association
of Democratic Labor Organizations (hereinafter referred to as
BWLU- ADLO) filed a petition for direct certification as the sole
and exclusive bargaining representative of all the rank and file
employees of Benguet Electric Cooperative, Inc. (hereinafter
referred to as BENECO) at Alapang, La Trinidad, Benguet
alleging, inter alia, that BENECO has in its employ two
hundred and fourteen (214) rank and file employees; that one
hundred and ninety-eight (198) or 92.5% of these employees
have supported the filing of the petition; that no certification
election has been conducted for the last 12 months; that there
is no existing collective bargaining representative of the rank
and file employees sought to represented by BWLU- ADLO;
and, that there is no collective bargaining agreement in the
cooperative.
An opposition to the petition was filed by the Beneco
Employees Labor Union (hereinafter referred to as BELU)
contending that it was certified as the sole and exclusive
bargaining representative of the subject workers pursuant to an
order issued by the med-arbiter on October 20,1980; that
pending resolution by the National Labor Relations
Commission are two cases it filed against BENECO involving
bargaining deadlock and unfair labor practice; and, that the
pendency of these cases bars any representation question.
BENECO, on the other hand, filed a motion to dismiss the
petition claiming that it is a non-profit electric cooperative
engaged in providing electric services to its members and
patron-consumers in the City of Baguio and Benguet Province;
and, that the employees sought to be represented by BWLU-
ADLO are not eligible to form, join or assist labor organizations
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
of their own choosing because they are members and joint
owners of the cooperative
Decision of Med Arbiter:
issued an order giving due course to the petition for
certification election. However, the med-arbiter limited the
election among the rank and file employees of petitioner who
are non-members thereof and without any involvement in the
actual ownership of the cooperative.
Alleging that the BLR director committed grave abuse of
discretion amounting to lack or excess of jurisdiction BENECO
filed the instant petition for certiorari. In his Comment the
Solicitor General agreed with BENECO's stance and prayed
that the petition be given due course. In view of this
respondent director herself was required by the Court to file a
Comment. On April 19, 1989 the Court gave due course to the
petition and required the parties to submit their respective
memoranda
Issue:
WON respondent director committed grave abuse of discretion
in certifying respondent BELU as the sole and exclusive
bargaining representtative of the rank and file employees of
BENECO.
HELD:
YES.
Private respondent BELU concurs with the above contention of
respondent director and, additionally, claims that since
membership in petitioner cooperative is only nominal, the rank
and file employees who are members thereof should not be
deprived of their right to self-organization.
The above contentions are untenable. Contrary to respondents'
claim, the fact that the members-employees of petitioner do not
participate in the actual management of the cooperative does
not make them eligible to form, assist or join a labor
organization for the purpose of collective bargaining with
petitioner. The Court's ruling in the Davao City case that
murallos • david • Mendoza, s | 1
members of cooperative cannot join a labor union for purposes
of collective bargaining was based on the fact that as members
of the cooperative they are co-owners thereof. As such, they
cannot invoke the right to collective bargaining for "certainly an
owner cannot bargain with himself or his co-owners."
[Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja,
et al., supra]. It is the fact of ownership of the cooperative, and
not involvement in the management thereof, which disqualifies
a member from joining any labor organization within the
cooperative. Thus, irrespective of the degree of their
participation in the actual management of the cooperative, all
members thereof cannot form, assist or join a labor
organization for the purpose of collective bargaining.
Respondent union further claims that if nominal ownership in a
cooperative is "enough to take away the constitutional
protections afforded to labor, then there would be no hindrance
for employers to grant, on a scheme of generous profit sharing,
stock bonuses to their employees and thereafter claim that
since their employees are not stockholders [of the corporation],
albeit in a minimal and involuntary manner, they are now also
co-owners and thus disqualified to form unions." To allow this,
BELU argues, would be "to allow the floodgates of destruction
to be opened upon the rights of labor which the Constitution
endeavors to protect and which welfare it promises to
promote." [Comment of BELU, p. 10; Rollo, p. 100].
The above contention of respondent union is based on the
erroneous presumption that membership in a cooperative is
the same as ownership of stocks in ordinary corporations.
While cooperatives may exercise some of the rights and
privileges given to ordinary corporations provided under
existing laws, such cooperatives enjoy other privileges not
granted to the latter [See Sections 4, 5, 6, and 8, Pres. Decree
No. 175; Cooperative Rural Bank of Davao City v. Ferrer-
Calleja, supra]. Similarly, members of cooperatives have rights
and obligations different from those of stockholders of ordinary
corporations. It was precisely because of the special nature of
cooperatives, that the Court held in the Davao City case that
members-employees thereof cannot form or join a labor union
for purposes of collective bargaining. The Court held that:
A cooperative ... is by its nature different from an ordinary
business concern being run either by persons, partnerships, or
corporations. Its owners and/or members are the ones who run
and operate the business while the others are its employees.
As above stated, irrespective of the number of shares owned
by each member they are entitled to cast one vote each in
deciding upon the affairs of the cooperative. Their share capital
earn limited interest. They enjoy special privileges as-
exemption from income tax and sales taxes, preferential right
to supply their products to State agencies and even exemption
from the minimum wage laws.
An employee therefore of such a cooperative who is a member
and co-owner thereof cannot invoke the right to collective
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
bargaining for certainly an owner cannot bargain with himself
or his co-owners.
It is important to note that, in her order dated September 2,
1985, med-arbiter Elnora V. Balleras made a specific finding
that there are only thirty-seven (37) employees of petitioner
who are not members of the cooperative and who are,
therefore, the only employees of petitioner cooperative eligible
to form or join a labor union for purposes of collective
bargaining [Annex "A" of the Petition, p. 12; Rollo, p. 22].
However, the minutes of the certification election [Annex "C" of
the Petition: Rollo, p. 28] show that a total of eighty-three (83)
employees were allowed to vote and of these, forty-nine (49)
voted for respondent union. Thus, even if We agree with
respondent union's contention that the thirty seven (37)
employees who were originally non-members of the
cooperative can still vote in the certification election since they
were only "forced and compelled to join the cooperative on
pain of disciplinary action," the certification election held on
October 1, 1986 is still null and void since even those who
were already members of the cooperative at the time of the
issuance of the med-arbiter's order, and therefore cannot claim
that they were forced to join the union were allowed to vote in
the election.
Article 256 of the Labor Code provides, among others, that:
To have a valid, election, at least a majority of all eligible voters
in the unit must have cast their votes. The labor union
receiving the majority of the valid votes cast shall be certified
as the exclusive bargaining agent of all workers in the unit . . .
[Italics supplied.]
In this case it cannot be determined whether or not respondent
union was duly elected by the eligible voters of the bargaining
unit since even employees who are ineligible to join a labor
union within the cooperative because of their membership
therein were allowed to vote in the certification election.
Considering the foregoing, the Court finds that respondent
director committed grave abuse of discretion in certifying
respondent union as the sole and exclusive bargaining
representative of the rank and file employees of petitioner
cooperative.
REPUBLIC OF THE PHILIPPINES, represented
by the SOCIAL SECURITY COMMISSION and
SOCIAL SECURITY SYSTEM vs. ASIAPRO
COOPERATIVE
November 23, 2007
Facts: Respondent Asiapro, as a cooperative, is composed of
owners-members. Under its by-laws, owners-members are of
two categories, to wit: (1) regular member, who is entitled to all
the rights and privileges of membership; and (2) associate
member, who has no right to vote and be voted upon and shall
murallos • david • Mendoza, s | 2
be entitled only to such rights and privileges provided in its by-
laws. Its primary objectives are to provide savings and credit
facilities and to develop other livelihood services for its owners-
members. In the discharge of the aforesaid primary objectives,
respondent cooperative entered into several Service Contracts
with Stanfilco - a division of DOLE Philippines, Inc. and a
company based in Bukidnon. The owners-members do not
receive compensation or wages from the respondent
cooperative. Instead, they receive a share in the service
surplus which the respondent cooperative earns from different
areas of trade it engages in, such as the income derived from
the said Service Contracts with Stanfilco. The owners-
members get their income from the service surplus generated
by the quality and amount of services they rendered, which is
determined by the Board of Directors of the respondent
cooperative.
In order to enjoy the benefits under the Social Security Law of
1997, the owners-members of the respondent cooperative,
who were assigned to Stanfilco requested the services of the
latter to register them with petitioner SSS as self-employed and
to remit their contributions as such. Also, to comply with
Section 19-A of Republic Act No. 1161, as amended by
Republic Act No. 8282, the SSS contributions of the said
owners-members were equal to the share of both the employer
and the employee.
On 26 September 2002, however, petitioner SSS through its
Vice-President for Mindanao Division, Atty. Eddie A. Jara, sent
a letter to the respondent cooperative, addressed to its Chief
Executive Officer (CEO) and General Manager Leo G. Parma,
informing the latter that based on the Service Contracts it
executed with Stanfilco, respondent cooperative is actually a
manpower contractor supplying employees to Stanfilco and for
that reason, it is an employer of its owners-members working
with Stanfilco. Thus, respondent cooperative should register
itself with petitioner SSS as an employer and make the
corresponding report and remittance of premium contributions
in accordance with the Social Security Law of 1997. On 9
October 2002, respondent cooperative, through its counsel,
sent a reply to petitioner SSS’s letter asserting that it is not an
employer because its owners-members are the cooperative
itself; hence, it cannot be its own employer. Again, on 21
October 2002, petitioner SSS sent a letter to respondent
cooperative ordering the latter to register as an employer and
report its owners-members as employees for compulsory
coverage with the petitioner SSS. Respondent cooperative
continuously ignored the demand of petitioner SSS.
Accordingly, petitioner SSS, on 12 June 2003, filed a Petition
before petitioner SSC against the respondent cooperative and
Stanfilco praying that the respondent cooperative or, in the
alternative, Stanfilco be directed to register as an employer
and to report respondent cooperative’s owners-members as
covered employees under the compulsory coverage of SSS
and to remit the necessary contributions in accordance with the
Social Security Law of 1997. The same was docketed as SSC
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Case No. 6-15507-03. Respondent cooperative filed its Answer
with Motion to Dismiss alleging that no employer-employee
relationship exists between it and its owners-members, thus,
petitioner SSC has no jurisdiction over the respondent
cooperative. Stanfilco, on the other hand, filed an Answer with
Cross-claim against the respondent cooperative.
On 17 February 2004, petitioner SSC issued an Order denying
the Motion to Dismiss filed by the respondent cooperative. The
respondent cooperative moved for the reconsideration of the
said Order, but it was likewise denied in another Order issued
by the SSC dated 16 September 2004.
Aggrieved by the aforesaid Decision, petitioner SSS moved for
a reconsideration, but it was denied by the appellate court in its
Resolution dated 20 March 2006. Hence, this Petition.
Petitioner’s contention: SSC has jurisdiction over the petition-
complaint filed before it by petitioner SSS as it involved an
issue of whether or not a worker is entitled to compulsory
coverage under the SSS Law. Petitioners avow that Section 5
of Republic Act No. 1161, as amended by Republic Act No.
8282, expressly confers upon petitioner SSC the power to
settle disputes on compulsory coverage, benefits, contributions
and penalties thereon or any other matter related thereto.
Likewise, Section 9 of the same law clearly provides that SSS
coverage is compulsory upon all employees. Thus, when
petitioner SSS filed a petition-complaint against the respondent
cooperative and Stanfilco before the petitioner SSC for the
compulsory coverage of respondent cooperative’s owners-
members as well as for collection of unpaid SSS contributions,
it was very obvious that the subject matter of the aforesaid
petition-complaint was within the expertise and jurisdiction of
the SSC.
Respondent’s contention: Court of Appeals correctly ruled that
petitioner SSC acted with grave abuse of discretion when it
assumed jurisdiction over the petition-complaint without
determining first if there was an employer-employee
relationship between the respondent cooperative and its
owners-members. Respondent cooperative claims that the
question of whether an employer-employee relationship exists
between it and its owners-members is a legal and not a factual
issue as the facts are undisputed and need only to be
interpreted by the applicable law and jurisprudence.
Issue/s:
Whether the petitioner SSC has jurisdiction over the petition-
complaint filed before it by petitioner SSS against the
respondent cooperative.
Whether the respondent cooperative is estopped from
assailing the jurisdiction of petitioner SSC since it had already
filed an Answer with Motion to Dismiss before the said body.
Ruling:
murallos • david • Mendoza, s | 3
Yes. Having declared that there is an employer-employee
relationship between the respondent cooperative and its
owners-member, we conclude that the petitioner SSC has
jurisdiction over the petition-complaint filed before it by the
petitioner SSS. This being our conclusion, it is no longer
necessary to discuss the issue of whether the respondent
cooperative was estopped from assailing the jurisdiction of the
petitioner SSC when it filed its Answer with Motion to Dismiss.
It bears stressing, too, that a cooperative acquires juridical
personality upon its registration with the Cooperative
Development Authority.38 It has its Board of Directors, which
directs and supervises its business; meaning, its Board of
Directors is the one in charge in the conduct and management
of its affairs.39 With that, a cooperative can be likened to a
corporation with a personality separate and distinct from its
owners-members. Consequently, an owner-member of a
cooperative can be an employee of the latter and an employer-
employee relationship can exist between them.
Philips Industrial Development vs. NLRC
210 SCRA 339
DOCTRINES:
CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO SELF-
ORGANIZATION; VIOLATED WHEN NLRC HELD THAT
SERVICE ENGINEERS AND SALES REPRESENTATIVES
INCLUDED IN BARGAINING UNIT FOR RANK AND FILE
EMPLOYEES. — As regards the service engineers and the
sales representatives, in holding that they are included in the
bargaining unit for the rank and file employees of PIDI, the
NLRC practically forced them to become members of PEO-
FFW or to be subject to its sphere of influence, it being the
certified bargaining agent for the subject bargaining unit. This
violates, obstructs, impairs and impedes the service engineers'
and the sales representatives' constitutional right to form
unions or associations and to self-organization. In Victoriano
vs. Elizalde Rope Workers' Union, this Court already ruled: ". . .
an employee may, as he pleases, join or refrain from joining an
association. It is, therefore, the employee who should decide
for himself whether he should join or not an association; and
should he choose to join, he himself makes up his mind as to
which association he would join; and even after he has joined,
he still retains the liberty and the power to leave and cancel his
membership with said organization at any, time. It is clear,
therefore, that the right to join a union includes the right to
abstain from joining any union. Inasmuch as what both the
Constitution and the Industrial Peace Act have recognized, and
guaranteed to the employee, is the 'right' to join associations of
his choice, it would be absurd to say that the law also imposes,
in the same breath, upon the employee the duty to join
associations. The law does not enjoin an employee to sign up
with any association." The decision then of the Executive Labor
Arbiter in merely directing the holding of a referendum "to
determine the will of the service engineers, sales
representatives as to their inclusion or exclusion in (sic) the
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
bargaining unit" is the most appropriate procedure that
conforms with their right to form, assist or join a labor union or
organization.
LABOR AND SOCIAL LEGISLATION; LABOR
ORGANIZATION; COVERAGE; SUPERVISORY
EMPLOYEES; RULE. — It must be stressed that service
engineers and sales representatives holding supervisory
positions or functions are concerned, take into account the
present Article 245 of the Labor Code which, as amended by
R.A. No. 6715, now reads: "ARTICLE 245. Ineligibility of
managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not
eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in
a labor organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their own."
Facts:
Petitoner (PIDI) is a domestic corporation engaged in the
manufacturing and marketing of electronic products. Since
1971, it had a total of six (6) collective bargaining agreements
(CBAs) with private respondent Philips Employees
Organization-FFW (PEO-FFW), registered labor union and the
certified bargaining agent of all the rank and file employees of
PIDI.
In the first CBA (1971-1974), the supervisors referred to in R.A.
No. 875, confidential employees, security guards, temporary
employees and sales representatives were excluded from the
bargaining unit.
In the second to the fifth CBAs (1975-1977; 1978-1980; 1981-
1983; and 1984-1986), the sales force, confidential employees
and heads of small units, together with the managerial
employees, temporary employees and security personnel,
were specifically excluded from the bargaining unit. The
confidential employees are the division secretaries of
light/telecom/data and consumer electronics, marketing
managers, secretaries of the corporate planning and business
manager, fiscal and financial system manager and audit and
EDP manager, and the staff of both the General Management
and the Personnel Department. 2
In the sixth CBA covering the years 1987 to 1989, it was
agreed upon, among others, that the subject of inclusion or
exclusion of service engineers, sales personnel and
confidential employees in the coverage of the bargaining unit
would be submitted for arbitration.
Pursuant thereto, PEO-FFW filed a petition before the Bureau
of Labor Relations (BLR) praying for an order "directing the
parties to select a voluntary arbitrator in accordance with its
rules and regulations." prcd
murallos • david • Mendoza, s | 4
As the parties failed to agree on a voluntary arbitrator, the BLR
endorsed the petition to the Executive Labor Arbiter of the
National Capital Region for compulsory arbitration pursuant to
Article 228 of the Labor Code. the case was assigned to
Executive Labor Arbiter Arthur Amansec.
Labor Arbiter Amansec rendered a decision ordering the
respondent to conduct a referendum to determine the will of
the service engineers, sales representatives as to their
inclusion or exclusion in the bargaining unit. It further declared
that the Division Secretaries and all Staff of general
management, personnel and industrial relations department,
secretaries of audit, EDP, financial system are confidential
employees and as such are hereby deemed excluded in the
bargaining unit.
PEO-FFW appealed from the decision to the NLRC.
the On Appeal, NLRC rendered the questioned decision
ordering that the decision of LA Amansec be SET ASIDE and a
new one entered declaring respondent company's Service
Engineers, Sales Force, division secretaries, all Staff of
General Management, Personnel and Industrial Relations
Department, Secretaries of Audit, EDP and Financial Systems
are included within the rank and file bargaining unit.
The reversal is anchored on the respondent NLRC's
conclusion that based on Article 245 of the Labor Code, as
amended:
". . . all workers, except managerial employees and security
personnel, are qualified to join or be a part of the bargaining
unit . . ."
It further ruled that: The Executive Labor Arbiter's directive that
the service engineers and sales representatives to (sic)
conduct a referendum among themselves is erroneous
inasmuch as it arrogates unto said employees the right to
define what the law means. It would not be amiss to state at
this point that there would be no one more interested in
excluding the subject employees from the bargaining unit than
management and that it would not be improbable for the latter
to lobby and/or exert pressure on the employees concerned,
thus agitating unrest among the rank-and-file. Likewise, the
Executive Labor Arbiter's declaration that the Division
Secretaries and all Staff of general management, personnel
and industrial relations department, secretaries of audit, EDP
and financial system 'are confidential employees and as such
are hereby deemed excluded in (sic) the bargaining unit' is
contrary to law for the simple reason that the law, as earlier
quoted, does not mention them as among those to be excluded
from the bargaining unit only (sic) managerial employees and
security guards. As a matter of fact, supervisory unions have
already been dissolved and their members who do not fall
within the definition of managerial employees have become
eligible to join or assist the rank-and-file organization." 6
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
ISSUES:
1. Won the NLRC committed grave abuse of discretion
amounting to lack of jurisdiction in holding that service
engineers, sales representatives and confidential employees of
petitioner are qualified to be part of the existing bargaining unit
2. Won the NLRC committed grave abuse of discretion
amounting to lack of jurisdiction in not applying the time
honored 'globe doctrine.
RULING:
1. Yes. The division secretaries; the staff members of
General Management, Personnel and the Industrial Relations
Department; and the secretaries of Audit, EDP and Financial
Systems, are disqualified from joining the PEO-FFW as they
are confidential employees. NLRC committed grave abuse of
discretion amounting to lack of jurisdiction in holding that
service engineers, sales representatives and confidential
employees of petitioner are qualified to be part of the existing
bargaining unit. They cannot even form a union of their own
for, as held in Golden Farms, Inc. vs. Ferrer-Calleja, the
rationale for the disqualification of managerial employees from
joining unions holds true also for confidential employees. As
regards the sales representatives and service engineers,
however, there is no doubt that they are entitled to join or form
a union, as they are not disqualified by law from doing so.
Considering that they have interests dissimilar to those of the
rank and file employees comprising the existing bargaining unit
all these employees, with the exception of the service
engineers and the sales force personnel, are confidential
employees. Their classification as such is not seriously
disputed by PEO-FFW; the five (5) previous CBAs between
PIDI and PEO-FFW explicitly considered them as confidential
employees. By the very nature of their functions, they assist
and act in a confidential capacity to, or have access to
confidential matters of, persons who exercise managerial
functions in the field of labor relations. 12 As such, the
rationale behind the ineligibility of managerial employees to
form, assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, 13
this Court elaborated on this rationale, thus:
The rationale for this inhibition has been stated to be, because
if these managerial employees would belong to or be affiliated
with a Union, the latter might not be assured of their loyalty to
the Union in view of evident conflict of interests. The Union can
also become company-dominated with the presence of
managerial employees in Union membership."
The decision then of the Executive Labor Arbiter in merely
directing the holding of a referendum "to determine the will of
the service engineers, sales representatives as to their
inclusion or exclusion in (sic) the bargaining unit" is the most
murallos • david • Mendoza, s | 5
appropriate procedure that conforms with their right to form,
assist or join a labor union or organization. However, since this
decision was rendered before the effectivity of R.A. No. 6715, it
must now be stressed that its future application to the private
parties in this case should, insofar as service engineers and
sales representatives holding supervisory positions or
functions are concerned, take into account the present Article
245 20 of the Labor Code which, as amended by R.A. No.
6715, now reads:
"ARTICLE 245. Ineligibility of managerial employees to join any
labor organization; right of supervisory employees. —
Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-
file employees but may join, assist or form separate labor
organizations of their own." (emphasis supplied)
2. NO. GLOBE DOCTRINE; NOT APPLICABLE IN
CASE AT BAR. — Since the only issue is the subject
employees' inclusion in or exclusion from the bargaining unit in
question, and PIDI never questioned the decision of the
Executive Labor Arbiter, the Globe Doctrine finds no
application. Besides, this doctrine applies only in instances of
evenly balanced claims by competitive groups for the right to
be established as the bargaining unit, which do not obtain in
this case.
GOLDEN FARMS, INC., petitioner, vs. THE
HONORABLE SECRETARY OF LABOR and THE
PROGRESSIVE FEDERATION OF LABOR,
respondents.
PUNO, J:
Facts:
Petitioner Golden Farms, Inc., is a corporation engaged in the
production and marketing of bananas for export. On February
27, 1992, private respondent Progressive Federation of Labor
(PFL) filed a petition before the Med-Arbiter praying for the
holding of a certification election among the monthly paid office
and technical rank-and-file employees of petitioner Golden
Farms.
PETITIONER: moved to dismiss the petition on three (3)
grounds. First, respondent PFL failed to show that it was
organized as a chapter within petitioner's establishment.
Second, there was already an existing collective bargaining
agreement between the rank-and-file employees represented
by the National Federation of Labor (NFL) and petitioner. And
third, the employees represented by PFL had allegedly been
disqualified by this Court from bargaining with management in
Golden Farms, Inc., vs. Honorable Director Pura Ferrer-
Calleja.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
RESPONDENT: PFL opposed petitioner's Motion to Dismiss. It
countered that the monthly paid office and technical employees
should be allowed to form a separate bargaining unit because
they were expressly excluded from coverage in the Collecting
Bargaining Agreement (CBA) between petitioner and NFL. It
also contended that the case invoked by petitioner was
inapplicable to the present case.
PETITIONER; REPLY: argued that the monthly paid office and
technical employees should have joined the existing collective
bargaining unit of the rank-and-file employees if they are not
managerial employees.
MED-ARBITER: granted the petition and ordered that a
certification election be conducted.
PET: Appealed, denied: lack of merit. Motion for recon, denied.
THUS, certiorari.
Issue:
1. WON the creation of an additional bargaining unit for certain
rank and file employees will not only split the existing one but
will also negate the principle of res judicata.
Held:
The monthly paid office and technical rank-and-file employees
of petitioner Golden Farms enjoy the constitutional right to self-
organization and collective bargaining. A "bargaining unit” has
been defined as a group of employees of a given employer,
comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees,
consistent with equity to the employer, indicate to be the best
suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law. The
community or mutuality of interest is therefore the essential
criterion in the grouping. "And this is so because 'the basic test
of an asserted bargaining unit's acceptability is whether or not
it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights.’”
In the case at bench, the evidence established that the monthly
paid rank-and-file employees of petitioner primarily perform
administrative or clerical work. In contradistinction, the
petitioner's daily paid rank-and-file employees mainly work in
the cultivation of bananas in the fields. It is crystal clear the
monthly paid rank-and-file employees of petitioner have very
little in common with its daily paid rank-and-file employees in
terms of duties and obligations, working conditions, salary
rates, and skills.
To be sure, the said monthly paid rank-and-file employees
have even been excluded from the bargaining unit of the daily
paid rank-and-file employees. This dissimilarity of interests
warrants the formation of a separate and distinct bargaining
unit for the monthly paid rank-and-file employees of the
murallos • david • Mendoza, s | 6
petitioner. To rule otherwise would deny this distinct class of
employees the right to self-organization for purposes of
collective bargaining. Without the shield of an organization, it
will also expose them to the exploitations of management.
Petitioner next contends that these monthly paid office and
technical employees are managerial employees. They
allegedly include those in the accounting and personnel
department, cashier, and other employees holding positions
with access to classified information. We are not persuaded.
The monthly paid office and technical employees, accountants,
and cashiers of the petitioner are not managerial employees
for they do not participate in policy-making but are given cut
out policies to execute and standard practices to observe. In
the main, the discharge of their duties does not involve the use
of independent judgment.
Our decision in Golden Farms, Inc., vs. Honorable Pura Ferrer-
Calleja, op. cit., does not pose any obstacle in holding a
certification election among petitioner's monthly paid rank-and
file employees. The issue brought to fore in that case was
totally different, i.e., whether or not petitioner's confidential
employees, considering the nature of their work, should be
included in the bargaining unit of the daily paid rank-and-file
employees. In the case at bench, the monthly paid rank-and-
file employees of petitioner are being separated as a
bargaining unit from its daily paid rank-and-file and employees,
on the ground that they have different interest to protect. The
principle of res judicata is, therefore, inapplicable.
Finally, we note that it was Petitioner Company that filed the
motion to dismiss the petition for election. The general rule is
that an employer has no standing to question a certification
election since this is the sole concern of the workers. Law and
policy demand that employers take a strict, hands-off stance in
certification elections. The bargaining representative of
employees should be chosen free from any extraneous
influence of management. A labor bargaining representative, to
be effective, must owe its loyalty to the employees alone and
to no other.
Sungbuanon Rural Bank vs. NLRC
324 SCRA 425
Tunay na Pagkakaisa ng Manggagawa sa Asia
Brewery vs. Asia Brewery
G.R. No. 162025, 03 August 2010
Facts:
Respondent Asia Brewery, Inc. (ABI) is engaged in the
manufacture, sale and distribution of beer, shandy, bottled
water and glass products. ABI entered into a Collective
Bargaining Agreement (CBA),[4] effective for five (5) years
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
from August 1, 1997 to July 31, 2002, with Bisig at Lakas ng
mga Manggagawa sa Asia-Independent (BLMA-
INDEPENDENT), the exclusive bargaining representative of
ABIs rank-and-file employees. On October 3, 2000, ABI and
BLMA-INDEPENDENT signed a renegotiated CBA effective
from August 1, 2000 to 31 July 2003.
Subsequently, a dispute arose when ABIs management
stopped deducting union dues from eighty-one (81)
employees, believing that their membership in BLMA-
INDEPENDENT violated the CBA. Eighteen (18) of these
affected employees are QA Sampling Inspectors/Inspectresses
and Machine Gauge Technician who formed part of the Quality
Control Staff. Twenty (20) checkers are assigned at the
Materials Department of the Administration Division, Full
Goods Department of the Brewery Division and Packaging
Division. The rest are secretaries/clerks directly under their
respective division managers.[7]
BLMA-INDEPENDENT claimed that ABIs actions restrained
the employees right to self-organization and brought the matter
to the grievance machinery. As the parties failed to amicably
settle the controversy, BLMA-INDEPENDENT lodged a
complaint before the National Conciliation and Mediation Board
(NCMB). The parties eventually agreed to submit the case for
arbitration to resolve the issue of [w]hether or not there is
restraint to employees in the exercise of their right to self-
organization.
Decision of Voluntary Arbitrator:
Sustained the BLMA-INDEPENDENT after finding that the
records submitted by ABI showed that the positions of the
subject employees qualify under the rank-and-file category
because their functions are merely routinary and clerical. He
noted that the positions occupied by the checkers and
secretaries/clerks in the different divisions are not managerial
or supervisory, as evident from the duties and responsibilities
assigned to them. With respect to QA Sampling
Inspectors/Inspectresses and Machine Gauge Technician, he
ruled that ABI failed to establish with sufficient clarity their
basic functions as to consider them Quality Control Staff who
were excluded from the coverage of the CBA. Accordingly, the
subject employees were declared eligible for inclusion within
the bargaining unit represented by BLMA-INDEPENDENT
CA: Reversed the Voluntary Arbitrator,stating that the disputed
employees are not those eligible as provided for by the CBA
ISSUE:
WON checkers and secretaries/clerks of respondent company
are confidential employees and may thus be excluded from the
CBA
HELD:
murallos • david • Mendoza, s | 7
NO.
Although Article 245 of the Labor Code limits the ineligibility to
join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to
confidential employees or those who by reason of their
positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are
likewise privy to sensitive and highly confidential records.[14]
Confidential employees are thus excluded from the rank-and-
file bargaining unit. The rationale for their separate category
and disqualification to join any labor organization is similar to
the inhibition for managerial employees because if allowed to
be affiliated with a Union, the latter might not be assured of
their loyalty in view of evident conflict of interests and the
Union can also become company-denominated with the
presence of managerial employees in the Union membership.
[15] Having access to confidential information, confidential
employees may also become the source of undue advantage.
Said employees may act as a spy or spies of either party to a
collective bargaining agreement.
It is rather curious that there would be several
secretaries/clerks for just one (1) department/division
performing tasks which are mostly routine and clerical.
Respondent insisted they fall under the Confidential and
Executive Secretaries expressly excluded by the CBA from the
rank-and-file bargaining unit. However, perusal of the job
descriptions of these secretaries/clerks reveals that their
assigned duties and responsibilities involve routine activities of
recording and monitoring, and other paper works for their
respective departments while secretarial tasks such as
receiving telephone calls and filing of office correspondence
appear to have been commonly imposed as additional duties.
[23] Respondent failed to indicate who among these numerous
secretaries/clerks have access to confidential data relating to
management policies that could give rise to potential conflict of
interest with their Union membership. Clearly, the rationale
under our previous rulings for the exclusion of executive
secretaries or division secretaries would have little or no
significance considering the lack of or very limited access to
confidential information of these secretaries/clerks. It is not
even farfetched that the job category may exist only on paper
since they are all daily-paid workers. Quite understandably,
petitioner had earlier expressed the view that the positions
were just being reclassified as these employees actually
discharged routine functions.
We thus hold that the secretaries/clerks, numbering about forty
(40), are rank-and-file employees and not confidential
employees.
With respect to the Sampling Inspectors/Inspectresses and the
Gauge Machine Technician, there seems no dispute that they
form part of the Quality Control Staff who, under the express
terms of the CBA, fall under a distinct category. But we
disagree with respondents contention that the twenty (20)
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
checkers are similarly confidential employees being quality
control staff entrusted with the handling and custody of
company properties and sensitive information.
Again, the job descriptions of these checkers assigned in the
storeroom section of the Materials Department, finishing
section of the Packaging Department, and the decorating and
glass sections of the Production Department plainly showed
that they perform routine and mechanical tasks preparatory to
the delivery of the finished products.[24] While it may be
argued that quality control extends to post-production phase --
proper packaging of the finished products -- no evidence was
presented by the respondent to prove that these daily-paid
checkers actually form part of the companys Quality Control
Staff who as such were exposed to sensitive, vital and
confidential information about [companys] products or have
knowledge of mixtures of the products, their defects, and even
their formulas which are considered trade secrets. Such
allegations of respondent must be supported by evidence.
Confidential employees are defined as those who (1) assist or
act in a confidential capacity, (2) to persons who formulate,
determine, and effectuate management policies in the field of
labor relations. The two (2) criteria are cumulative, and both
must be met if an employee is to be considered a confidential
employee that is, the confidential relationship must exist
between the employee and his supervisor, and the supervisor
must handle the prescribed responsibilities relating to labor
relations. The exclusion from bargaining units of employees
who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal
objective sought to be accomplished by the confidential
employee rule.[26] There is no showing in this case that the
secretaries/clerks and checkers assisted or acted in a
confidential capacity to managerial employees and obtained
confidential information relating to labor relations policies. And
even assuming that they had exposure to internal business
operations of the company, respondent claimed, this is not per
se ground for their exclusion in the bargaining unit of the daily-
paid rank-and-file employees.
Not being confidential employees, the secretaries/clerks and
checkers are not disqualified from membership in the Union of
respondents rank-and-file employees. Petitioner argues that
respondents act of unilaterally stopping the deduction of union
dues from these employees constitutes unfair labor practice as
it restrained the workers exercise of their right to self-
organization, as provided in Article 248 (a) of the Labor Code.
DELA SALLE UNIVERSITY, petitioner, vs. DELA
SALLE UNIVERSITY EMPLOYEES
ASSOCIATION (DLSUEA) and BUENAVENTURA
MAGSALIN, respondents.
Facts:
murallos • david • Mendoza, s | 8
Dela Salle University (hereinafter referred to as UNIVERSITY)
and Dela Salle University Employees Association-National
Federation of Teachers and Employees Union (DLSUEA-
NAFTEU), which is composed of regular non-academic rank
and file employees, entered into a collective bargaining
agreement with a life span of three (3) years, that is, from
December 23, 1986 to December 22, 1989. 5 During the
freedom period, or 60 days before the expiration of the said
collective bargaining agreement, the Union initiated
negotiations with the University for a new collective bargaining
Agreement which, however, turned out to be unsuccessful,
hence, the Union filed a Notice of Strike with the National
Conciliation and Mediation Board, National Capital Region.
After several conciliation-mediation meetings, five (5) out of the
eleven (11) issues raised in the Notice of Strike were resolved
by the parties. A partial collective bargaining agreement was
thereafter executed by the parties. the parties entered into a
Submission Agreement, identifying the remaining six (6)
unresolved issues for arbitration, namely: "(1) scope of the
bargaining unit, (2) union security clause, (3) security of tenure,
(4) salary increases for the third and fourth years of the
collective bargaining agreement, (5) indefinite union leave,
reduction of the union president’s workload, special leave, and
finally, (6) duration of the agreement." The parties appointed
Buenaventura Magsalin as voluntary arbitrator. the voluntary
arbitrator rendered the assailed decision.
In the said decision, the voluntary arbitrator, on the first issue
involving the scope of the bargaining unit, ruled that "…the
Computer Operators assigned at the CSC [Computer Services
Center], just like any other Computer Operators in other units,
[should be] included as members of the bargaining unit," after
finding that "[e]vidently, the Computer Operators are presently
doing clerical and routinary work and had nothing to do with
[the] setting of management policies for the University, as [may
be] gleaned from the duties and responsibilities attached to the
position and embodied in the CSC [Computer Services Center]
brochure. They may have, as argued by the University, access
to vital information regarding the University’s operations but
they are not necessarily confidential." Regarding the discipline
officers, the voluntary arbitrator ". . . believes that this type of
employees belong (sic) to the rank-and-file on the basis of the
nature of their job." With respect to the employees of the
College of St. Benilde, the voluntary arbitrator found that the
College of St. Benilde has a personality separate and distinct
from the University and thus, held ". . . that the employees
therein are outside the bargaining unit of the University’s rank-
and-file employees."
On the second issue regarding the propriety of the inclusion of
a union shop clause in the collective bargaining agreement, in
addition to the existing maintenance of membership clause, the
voluntary arbitrator opined that a union shop clause ". . . is not
a restriction on the employee’s right of (sic) freedom of
association but rather a valid form of union security while the
CBA is in force and in accordance with the Constitutional policy
to promote unionism and collective bargaining and
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
negotiations. The parties therefore should incorporate such
union shop clause in their CBA."
Subsequently, both parties filed their respective motions for
reconsideration which, however, were not entertained by the
voluntary arbitrator "pursuant to existing rules and
jurisprudence governing voluntary arbitration cases."
the University filed with the Second Division of this Court, a
petition for certiorari with temporary restraining order and/or
preliminary injunction assailing the decision of the voluntary
arbitrator, as having been rendered "in excess of jurisdiction
and/or with grave abuse of discretion." Subsequently the Union
also filed a petition for certiorari with the First Division. Without
giving due course to the petition pending before each division,
the First and Second Divisions separately resolved to require
the respondents in each petition, including the Solicitor
General on behalf of the voluntary arbitrator, to file their
respective Comments. Upon motion by the Solicitor General
both petitions were consolidated and transferred to the Second
Division.
According to the Solicitor General, the employees of the
College of St. Benilde should have been included in the
bargaining unit of the rank-and-file employees of the University.
33 The Solicitor General came to this conclusion after finding ".
. . sufficient evidence to justify the Union's proposal to consider
the University and the CSB [College of St. Benilde] as only one
entity because the latter is but a mere integral part of the
University,"
Issue:
Whether or not the voluntary arbitrator committed grave abuse
of discretion in rendering the assailed decision, particularly, in
resolving the following issues:
Whether the computer operators assigned at the University’s
Computer Services Center and the University’s discipline
officers may be considered as confidential employees and
should therefore be excluded from the bargaining unit which is
composed of rank and file employees of the University, and
whether the employees of the College of St. Benilde should
also be included in the same bargaining unit;
Whether a union shop clause should be included in the parties'
collective bargaining agreement, in addition to the existing
maintenance of membership clause;
Held:
1. The Court agrees with the Solicitor General that the express
exclusion of the computer operators and discipline officers
from the bargaining unit of rank-and-file employees in the 1986
collective bargaining agreement does not bar any re-
negotiation for the future inclusion of the said employees in the
bargaining unit. During the freedom period, the parties may not
murallos • david • Mendoza, s | 9
only renew the existing collective bargaining agreement but
may also propose and discuss modifications or amendments
thereto. With regard to the alleged confidential nature of the
said employees’ functions, after a careful consideration of the
pleadings filed before this Court, we rule that the said
computer operators and discipline officers are not confidential
employees. As carefully examined by the Solicitor General, the
service record of a computer operator reveals that his duties
are basically clerical and non-confidential in nature. 52 As to
the discipline officers, we agree with the voluntary arbitrator
that based on the nature of their duties, they are not
confidential employees and should therefore be included in the
bargaining unit of rank-and-file employees.
The Court also affirms the findings of the voluntary arbitrator
that the employees of the College of St. Benilde should be
excluded from the bargaining unit of the rank-and-file
employees of Dela Salle University, because the two
educational institutions have their own separate juridical
personality and no sufficient evidence was shown to justify the
piercing of the veil of corporate fiction.
2. We affirm the ruling of the voluntary arbitrator for the
inclusion of a union shop provision in addition to the existing
maintenance of membership clause in the collective bargaining
agreement. As the Solicitor General asserted in his
consolidated Comment, the University's reliance on the case of
Victoriano vs. Elizalde Rope Workers’ Union 56 is clearly
misplaced. In that case, we ruled that ". . . the right to join a
union includes the right to abstain from joining any union. . .
The right to refrain from joining labor organizations recognized
by Section 3 of the Industrial Peace Act is, however, limited.
The legal protection granted to such right to refrain from joining
is withdrawn by operation of law, where a labor union and an
employer have agreed on a closed shop, by virtue of which the
employer may employ only members of the collective
bargaining union, and the employees must continue to be
members of the union for the duration of the contract in order
to keep their jobs.
San Miguel Corp. Supervisors and Exempt Union v. Laguesma
G.R. No. 110399 August 15, 1997
FACTS:
San Miguel Corporation Supervisors and Exempt Union (SMC
Union) filed before DOLE a Petition for Certification Election
among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of Cabuyao (Laguna), San
Fernando (Pampanga) and Otis (Pandacan, Manila).
Med-Arbiter Reynante issued an Order ordering their conduct
of certification as one bargaining unit.
Appeal: San Miguel Corp. then filed with the DOLE a Notice of
Appeal pointing out Med-Arbiter’s error in grouping together all
3 separate plants into one bargaining unit, and in including
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
supervisory levels 3 and 4 whose positions are confidential in
nature.
Undersecretary Laguesma: Granted. The remand of the case
to the Med-Arbiter is ordered for determination of the true
classification of each of the employees sought to be included in
the appropriate bargaining unit.
1st MR: SMC Union filed a MR.
Undersecretary Laguesma: granted. Directed the conduct of
separate certification elections among the supervisors ranked
as supervisory levels 1 to 4 (S1 to S4) and the exempt
employees in each of the 3 plants.
2nd MR: San Miguel Corp. filed a MR.
Undersecretary Laguesma: granted.
Applied Philips Industrial Development, Inc. v. NLRC 
Confidential employees, like managerial employees, are not
allowed to form, join or assist a labor union for purposes of
collective bargaining.
Applying in the case at bar, S3 and S4 and the so-called
exempt employees are admittedly confidential employees and
therefore they are not allowed to form, join or assist a labor
union for purposes of collective bargaining. Thus, S3, S4 and
the so-called exempt employees are excluded from those who
could participate in the certification election.
ISSUE 1:
Whether or not S3, S4 and the exempt employees of the
company are considered confidential employees, hence
ineligible from joining a union
HELD: NO.
S3, S4 and the exempt employees are NOT vested with the
powers and prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, layoff,
recall, discharge or dismiss employees.
They are therefore not qualified to be classified as managerial
employees who under Art. 245 of the Labor Code, are not
eligible to join, assist or form any labor organization. Under the
same Article, they are not allowed membership in a labor
organization of the rank-and-file employees BUT may join,
assist or form separate labor organizations of their own. The
only question is whether they are confidential employees or
not. Confidential employees are those who (1) assist or act in a
confidential capacity, (2) to persons who formulate, determine,
and effectuate management policies in the field of labor
relations. The 2 criteria are cumulative, and both must be met.
murallos • david • Mendoza, s | 10
The confidential relationship must exist between the thus greatly diminishing their bargaining leverage. This will
employees and his supervisor, and the supervisor must handle clearly frustrate the provisions of the Labor Code and the
the prescribed responsibilities relating to labor relations. Thus, mandate of the Constitution.
to determine WON a confidential employee, the question is:
WON he has necessary access to confidential information with DECISION: WHEREFORE, the assailed Order or
respect to his employer’s relations policies. Access to Undersecretary Laguesma is hereby SET ASIDE and the
information which is regarded by the employer to be Order of the Med-Arbiter is REINSTATED under which a
confidential from the business standpoint such as financial certification election among the supervisors (level 1 to 4) and
information or technical trade secrets will not render an exempt employees of the San Miguel Corporation Magnolia
employee a confidential employee. Rationale for exclusion Poultry Products Plants of Cabuyao, San Fernando, and Otis
from bargaining unit: These employees become aware of as one bargaining unit is ordered conducted.
management policies relating to labor relations in the normal
course of their duties. Therefore, they should not be placed in German Agency for Technical Cooperation
a position involving a potential conflict of interests.
(GTZ) vs. CA,
If these managerial employees would belong to or be affiliated
GR No. 152318, 16 April 2009
with a Union, the latter might not be assured of their loyalty to
the Union in view of evident conflict of interest. The Union can
also become company-dominated with the presence of
managerial employees in Union membership. PHILIPS INDUSTRIAL DEVELOPMENT, INC., vs.
NLRC and PHILIPS EMPLOYEES
In the case at bar, S3, S4 and the exempt employees handle
ORGANIZATION
confidential data or documents which relate to product
formulation, product standards and product specification (e.g.
FACTS:
decision to discontinue/temporarily stop shift operations
oversee the quality control function at the processing lines in
Philips Industrial Development, Inc. (PIDI) had six collective
the storage of chicken, maintenance of sanitation and hygiene
bargaining agreements with the Union. In the 6th CBA it was
throughout the plant) which by no means relate to “labor
agreed that the subject of inclusion or exclusion of service
relations”.
engineers, sales personnel and confidential employees in the
coverage of the bargaining unit would be submitted for
The information they handle are properly classifiable as
arbitration. But since the parties failed to agree on a voluntary
technical and internal business operations data which has no
arbitrator, the BLR endorsed the petition to the Executive Labor
relevance to negotiations and settlement of grievances wherein
Arbiter—thus it was assigned to LA Amansec. LA Amansec
the interests of a union and the management are invariably
decided that such personnel are excluded from the bargaining
adversarial. Thus, they are not confidential employees and
unit. Thus, the Union appealed to the NLRC, which reversed
may appropriately form a bargaining unit for purposes of
the decision of LA Amansec, allowing such personnel within
collective bargaining.
the rank-and-file bargaining unit. Thus, this petition.
SUB-ISSUE: If they are not confidential employees, do the
ISSUE:
employees of the 3 plants constitute an appropriate single
bargaining unit. – YES.
W/N Security personnel are eligible for membership in Unions.
RATIO:
HELD:
The employees in the instant case have “community or
NO. NLRC committed grave abuse of discretion when it
mutuality of interest”. which is the standard in determining the
reversed the decision of LA Amansec. Under Section 245 of
proper constituency of a collective bargaining unit.
the Labor Code, security guards and other personnel
employed for the protection and security of the person,
They all belong to the Magnolia Poultry Division of San Miguel
properties, and premises of the employer are not eligible for
Corporation. Although they belong to 3 different plants, they
membership in any labor organization. It was explained that as
perform work of the same nature, receive the same wages and
confidential employees their loyalty to the Union may not be
compensation, and most importantly, share a common stake in
assured on the ground of conflict of interest. Added to that, the
concerted activities. The fact that the 3 plants are located in 3
Union will become company-dominated with the presence of
different places is immaterial.
these employees—something which is against the mere
ideology of what a Union should be.
Moreover, separate bargaining units in the 3 different plants of
the division will fragmentize the employees of the said division,
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 11

LABOR ORGANIZATION
SAN MIGUEL CORP VS MANDAUE PACKAGING
PLANTS PRODUCTS
FACTS:
On 15 June 1998, respondent, identifying itself as an affiliate of
Federation of Free Workers (FFW), filed a petition for
certification election with the DOLE Regional Office No. VII. In
the petition, respondent stated that it sought to be certified and
to represent the permanent rank-and-file monthly paid
employees of the petitioner.The petition was assigned to
Mediator-Arbiter Achilles V. Manit of the DOLE. Petitioner filed
a motion to dismiss the petition for certification election on the
sole ground that herein respondent is not listed or included in
the roster of legitimate labor organizations.
On 3 August 1998, the Chief of Labor Relations Division of
DOLE Regional Office No. VII issued a Certificate of Creation
of Local/Chapter No. ITD. I-ARFBT-058/98, certifying that from
30 July 1998, respondent has acquired legal personality as a
labor organization/workers association, it having submitted all
the required documents.Opting not to file a comment on the
Motion to Dismiss,[7] respondent instead filed a Position Paper
wherein it asserted that it had complied with all the necessary
requirements for the conduct of a certification election, and that
the ground relied upon in the Motion to Dismiss was a mere
technicality.[8]
In turn, petitioner filed a Comment, wherein it reiterated that
respondent was not a legitimate labor organization at the time
of the filing of the petition. Petitioner also propounded that
contrary to respondents objectives of establishing an
organization representing rank-and-file employees, two of
respondents officers, namely Vice-President Emannuel L.
Rosell and Secretary Bathan, were actually supervisory
employees. In support of this allegation, petitioner attached
various documents evidencing the designation of these two
officers in supervisory roles, as well as their exercise of various
supervisory functions.
Petitioner cited Article 245 of the Labor Code, which provides
that supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file
employees. On 20 August 1998, petitioner filed a petition to
cancel the union registration of respondent. However, this
petition was denied, and such denial was subsequently
affirmed by the Court of Appeals in a decision that has since
become final. Respondent promptly appealed the order of the
MED ARBITER and it was granted.
ISSUE:
WON respondent acquires legal personality?
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
WON the inclusion of the two alleged supervisory employees in
appellee unions membership amounts to fraud,
misrepresentation, or false statement within the meaning of
Article 239(a) and (c) of the Labor Code.
HELD:
YES. There is no doubt that on 15 June 1998, or the date
respondent filed its petition for certification election, attached
thereto were respondents constitution, the names and
addresses of its officers, and the charter certificate issued by
the national union FFW. The Court likewise sees no
impediment in deeming respondent as having acquired legal
personality as of 15 June 1998, the fact that it was the
local/chapter itself, and not the FFW, which submitted the
documents required under Section 1, Rule VI of Department
Order No. 9. The evident rationale why the rule states that it is
the federation or national union that submits said documents to
the Bureau or Regional Office is that the creation of the
local/chapter is the sole prerogative of the federation or
national union, and not of any other entity. Certainly, a putative
local/chapter cannot, without the imprimatur of the federation
or national union, claim affiliation with the larger unit or source
its legal personality therefrom.
In the ordinary course, it should have been FFW, and not
respondent, which should have submitted the subject
documents to the Regional Office. Nonetheless, there is no
good reason to deny legal personality or defer its conferral to
the local/chapter if it is evident at the onset that the federation
or national union itself has already through its own means
established the local/chapter. In this case, such is evidenced
by the Charter Certificate dated 9 June 1998, issued by FFW,
and attached to the petition for certification election. The
Charter Certificate expressly states that respondent has been
issued the said certificate to operate as a local or chapter of
the [FFW]. The Charter Certificate expressly acknowledges
FFWs intent to establish respondent as of 9 June 1998.[44]
This being the case, we consider it permissible for respondent
to have submitted the required documents itself to the
Regional Office, and proper that respondents legal personality
be deemed existent as of 15 June 1998, the date the complete
documents were submitted.
The Labor Code defines a labor organization as any union or
association of employees which exists in whole or in part for
the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment,
[14] and a legitimate labor organization as any labor
organization duly registered with the DOLE, including any
branch or local thereof.[15] Only legitimate labor organizations
may file a petition for certification election.[16] Article 234 of the
Labor Code enumerates the requirements for registration of an
applicant labor organization, association, or group of unions or
workers in order that such entity could acquire legal personality
and entitlement to the rights and privileges granted by law to
legitimate labor organizations. These include a registration fee
murallos • david • Mendoza, s | 12
of fifty pesos (P50.00); a list of the names of the members and
officers, and copies of the constitution and by-laws of the
applicant union.
Preliminarily, we should note that a less stringent procedure
obtains in the registration of a local or chapter than that of a
labor organization. Undoubtedly, the intent of the law in
imposing lesser requirements in the case of a branch or local
of a registered federation or national union is to encourage the
affiliation of a local union with a federation or national union in
order to increase the local union's bargaining powers
respecting terms and conditions of labor.[Department Order
No. 40, now in effect, has eased the requirements by which a
local/chapter may acquire legal personality. Interestingly,
Department Order No. 40 no longer uses the term
local/chapter, utilizing instead chartered local, which is defined
as a labor organization in the private sector operating at the
enterprise level that acquired legal personality through the
issuance of a charter certificate by a duly registered federation
or national union, and reported to the Regional Office.[25]
Clearly under the present rules, the first step to be undertaken
in the creation of a chartered local is the issuance of a charter
certificate by the duly registered federation or national union.
Said federation or national union is then obligated to report to
the Regional Office the creation of such chartered local,
attaching thereto the charter certificate it had earlier issued.
Assuming that Bathan is a supervisory employee, this does not
prove the existence of fraud, false statement or
misrepresentation. Because good faith is presumed in all
representations, an essential element of fraud, false statement
and misrepresentation in order for these to be actionable is
intent to mislead by the party making the representation. In this
case, there is no proof to show that Bathan, or appellee union
for that matter, intended to mislead anyone. If this was
appellee unions intention, it would have refrained from using a
more precise description of the organization instead of
declaring that the organization is composed of rank and file
monthlies. Hence, the charge of fraud, false statement or
misrepresentation cannot be sustained.
WHEREFORE, the Petition is DENIED. Costs against
petitioner. SO ORDERED.
SMCC-SUPER vs. Charter Chemical and
Coating Corp.
FACTS:
SMCC filed a petition for certification election among the
regular rank-and-file employees of the respondent company,
Charter Chemical, with the Mediation Arbitration Unit of the
DOLE, NCR.

NO. Under the law, a managerial employee is one who is

Charter Chemical filed an Answer with Motion to dismiss on the
vested with powers or prerogatives to lay down and execute
ground that petitioner union is not a legitimate labor
management policies and/or to hire, transfer, suspend, layoff,
organization because of (1) failure to comply with the
recall, discharge, assign or discipline employees. A supervisory
documentation requirements set by law, and (2) the inclusion
employee is one who, in the interest of the employer,
of supervisory employees within the union.
effectively recommends managerial actions if the exercise of
such recommendatory authority is not merely routinary or
The Med-Arbiter held that the list of membership of petitioner
clerical in nature but requires the use of independent judgment.
union consisted of 12batchman, mill operator and lead man
Finally, all employees not falling within the definition of
who performed supervisory functions. Under Article245 of the
managerial or supervisory employee are considered rank-and-
Labor Code, said supervisory employees are prohibited from
file employees. It is also well-settled that the actual functions of
joining petitioner union which seeks to represent the rank-and-
an employee, not merely his job title, are determinative in
file employees of respondent company.
classifying such employee as managerial, supervisory or rank
and file.
As a result, not being a legitimate labor organization, petitioner
union has no right to file a petition for certification election for
In the case of Emmanuel Rossell, appellants evidence shows
the purpose of collective bargaining. The DOLE, however,
that he undertakes the filling out of evaluation reports on the
ruled that there was no independent evidence presented to
performance of mechanics, which in turn are used as basis for
establish respondent company's claim that some members of
reclassification. Given a ready and standard form to
petitioner union were holding supervisory positions and that it
accomplish, coupled with the nature of the evaluation, it would
complied with all the documentation requirements and
appear that his functions are more routinary than
consequently allowed the certification election. The CA gave
recommendatory and hardly leave room for independent
credence to the findings of the Med-Arbiter that petitioner union
judgment. In the case of Noel Bathan, appellants evidence
failed to comply with the documentation requirements under
does not show his job title although it shows that his
the Labor Code. It, likewise, upheld the Med- Arbiter’s finding
recommendations on disciplinary actions appear to have
that petitioner union consisted of both rank-and-file and
carried some weight on higher management. On this limited
supervisory employees.
point, he may qualify as a supervisory employee within the
meaning of the law. This may, however, be outweighed by his
ISSUE:
other functions which are not specified in the evidence.

Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 13
WON the mixture of rank-and-file and supervisory employees
in petitioner union nullifies its legal personality as a legitimate
labor organization.
HELD:
NO.
R.A. No. 6715 omitted specifying the exact effect of any
violation of the prohibition (on the co-mingling of supervisory
and rank-and-file employees) would bring about on the
legitimacy of a labor organization.
While there is a prohibition against the mingling of supervisory
and rank-and-file employees in one labor organization, the
Labor Code does not provide for the effects thereof. Thus, after
a labor organization has been registered, it may exercise all
the rights and privileges of a legitimate labor organization. Any
mingling between supervisory and rank-and-file employees in
its membership cannot affect its legitimacy for that is not
among the grounds for cancellation of its registration, unless
such mingling was brought about by misrepresentation, false
statement or fraud under Article 239 of the Labor Code.
TAKATA (PHILIPPINES) CORPORATION,
Petitioner, vs. BUREAU OF LABOR RELATIONS
and SAMAHANG LAKAS MANGGAGAWA NG
TAKATA (SALAMAT), Respondents.
FACTS:
On July 7, 2009, petitioner filed with the Department of Labor
and Employment (DOLE) Regional Office a Petition3 for
Cancellation of the Certificate of Union Registration of
Respondent Samahang Lakas Manggagawa ng Takata
(SALAMA1) on the ground that the latter is guilty of
misrepresentation, false statement and fraud with respect to
the number of those who participated in the organizational
meeting, the adoption and ratification of its Constitution and
By-Laws, and in the election of its officers. It contended that in
the May 1, 2009 organizational meeting of respondent, only 68
attendees signed the attendance sheet, and which number
comprised only 17% of the total number of the 396 regular
rank- and-file employees which respondent sought to
represent, and hence, respondent failed to comply with the
20% minimum membership requirement. Petitioner insisted
that the document "Pangalan ng mga Kasapi ng Unyon" bore
no signatures of the alleged 119 union members; and that
employees were not given sufficient information on the
documents they signed; that the document "Sama-Samang
Pahayag ng Pagsapi" was not submitted at the time of the filing
of respondent's application for union registration; that the 119
union members were actually only 117; and, that the total
number of petitioner's employees as of May 1, 2009 was 470,
and not 396 as respondent claimed.4
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Respondent denied the charge and claimed that the 119 union
members were more than the 20% requirement for union
registration. The document "Sama-Samang Pahayag ng
Pagsapi sa Unyon" which it presented in its petition for
certification election5 supported their claim of 119 members.
Respondent also contended that petitioner was estopped from
assailing its legal personality as it agreed to a certification
election and actively participated in the pre-election conference
of the certification election proceedings.6 Respondent argued
that the union members were informed of the contents of the
documents they signed and that the 68 attendees to the
organizational meeting constituted more than 50% of the total
union membership, hence, a quo rumexisted for the conduct of
the said meeting.7
DECISION OF DOLE Regional Director: issued a Decision8
granting the petition for cancellation of respondent's certificate
of registration
Dissatisfied, respondent, through Bukluran ng Manggagawang
Pilipino (BMP) Paralegal Officer, Domingo P. Mole, filed a
Notice and Memorandum of Appeal10 with the Bureau of Labor
Relations (BLR). However, on September 28,2009,
respondent, through its counsels, Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed
an Appeal Memorandum with Formal Entry of Appearance11 to
the Office of the DOLE Secretary, which the latter eventually
referred to the BLR. Petitioner filed an Opposition to the
Appeals12 praying for their dismissal on the ground of forum
shopping as respondent filed two separate appeals in two
separate venues; and for failing to avail of the correct remedy
within the period; and that the certificate of registration was
tainted with fraud, misrepresentation and falsification.
In its Answer,13 respondent claimed that there was no forum
shopping as BMP's Paralegal Officer was no longer authorized
to file an appeal on behalf of respondent as the latter's link with
BMP was already terminated and only the Union President was
authorized to file the appeal; and that it complied with
Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal
Memorandum with Formal Entry of Appearance and petitioner's
Answer, the BLR rendered its Decision14 reversing the Order
of the Regional Director
ISSUE:
WON the union’s certification should be revoked?
Held:
It does not appear in Article 234 (b) of the Labor Code that the
attendees in the organizational meeting must comprise 20% of
the employees in the bargaining unit. In fact, even the
Implementing Rules and Regulations of the Labor Code does
murallos • david • Mendoza, s | 14
not so provide. It is only under Article 234 (c) that requires the
names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it
seeks to operate. Clearly, the 20% minimum requirement
pertains to the employees’ membership in the union and not to
the list of workers who participated in the organizational
meeting. Indeed, Article 234 (b) and (c) provide for separate
requirements, which must be submitted for the union's
registration, and which respondent did submit. Here, the total
number of employees in the bargaining unit was 396, and 20%
of which was about 79. Respondent submitted a document
entitled "Pangalan ng Mga Kasapi ng Unyon" showing the
names of 119 employees as union members, thus respondent
sufficiently complied even beyond the 20% minimum
membership requirement. Respondent also submitted the
attendance sheet of the organizational meeting which
contained the names and signatures of the 68 union members
who attended the meeting. Considering that there are 119
union members which are more than 20% of all the employees
of the bargaining unit, and since the law does not provide for
the required number of members to attend the organizational
meeting, the 68 attendees which comprised at least the
majority of the 119 union members would already constitute a
quorum for the meeting to proceed and to validly ratify the
Constitution and By-laws of the union. There is, therefore, no
basis for petitioner to contend that grounds exist for the
cancellation of respondent's union registration. For fraud and
misrepresentation to be grounds for cancellation of union
registration under Article 239 of the Labor Code, the nature of
the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union
members.22
Petitioner's claim that the alleged union members signed
documents without adequate information is not persuasive.
The one who alleges a fact has the burden of proving it and a
mere allegation is not evidence.23 In fact, we note that not one
of those listed in the document denominated as "Pangalan ng
Mga Kasaping Unyon" had come forward to deny their
membership with respondent. Notably, it had not been rebutted
that the same union members had signed the document
entitled "Sama-Samang Pahayag ng Pagsapi," thus,
strengtheningtheir desire to be members of the respondent
union.
Petitioner claims that in the list of members, there was an
employee whose name appeared twice and another employee
who was merely a project employee. Such could not be
considered a misrepresentation in the absence of showing that
respondent deliberately did so for the purpose of increasing
their union membership. In fact, even if those two names were
not included in the list of union members, there would still be
117 members which was still more than 20% of the 396 rank-
and-file employees.
As to petitioner's argument that the total number of its
employees as of May 1, 2009 was 470, and not396 as
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
respondent claimed, still the 117 union members comprised
more than the 20% membership requirement for respondent's
registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of
Labor and Employment,24 we said:
For the purpose of de-certifying a union such as respondent, it
must be shown that there was misrepresentation, false
statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the
list of voters, or failure to submit these documents together
with the list of the newly elected-appointed officers and their
postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list of
those who participated in the organizational meeting would not,
to our mind, provide a valid reason to cancel respondent’s
certificate of registration. The cancellation of a union’s
registration doubtless has an impairing dimension on the right
of labor to self-organization. For fraud and misrepresentation to
be grounds for cancellation of union registration under the
Labor Code, the nature of the fraud and misrepresentation
must be grave and compelling enough to vitiate the consent of
a majority of union members.
MARIWASA SIAM CERAMICS, INC. vs. THE
SECRETARY OF THE DEPARTMENT OF LABOR
AND EMPLOYMENT, CHIEF OF THE BUREAU
OF LABOR RELATIONS, DEPARTMENT OF
LABOR AND EMPLOYMENT, REGIONAL
DIRECTOR OF DOLE REGIONAL OFFICE
NUMBER IV-A & SAMAHAN NG MGA
MANGGAGAWA SA MARIWASA SIAM
CERAMICS, INC. (SMMSC-INDEPENDENT)
G.R. No. 183317 December 21, 2009
Facts:
On May 2005, private respondent Samahan Ng Mga
Manggagawa Sa Mariwasa Siam Ceramics, Inc. (SMMSC-
Independent) was issued a Certificate of Registration as a
legitimate labor organization by the Department of Labor and
Employment (DOLE), Region IV-A. On June 2005, petitioner
Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation
of Union Registration against private respondent, claiming that
the latter violated Article 234 of the Labor Code for not
complying with the 20% requirement and that it committed
massive fraud and misrepresentation in violation of Article 239
of the same code.
The Regional Director of DOLE IV-A issued an Order granting
the petition, revoking the registration of respondent, and
murallos • david • Mendoza, s | 15
delisting it from the roster of active labor unions. SMMSC-
Independent appealed to the Bureau of Labor Relations. BLR
ruled in favor of the respondent, thus, they remain in the roster
of legitimate labor organizations.
The petitioner appealed and insisted that private respondent
failed to comply with the 20% union membership requirement
for its registration as a legitimate labor organization because of
the disaffiliation from the total number of union members of
102 employees who executed affidavits recanting their union
membership
Hence, this petition for review on certiorari under Rule 45 of
the Rules of Court.
Issue/s:
Whether or not there was failure to comply with the 20% union
membership requirement.
Whether or not the withdrawal of 31 union members affected
the petition for certification election insofar as the 30%
requirement is concerned.
Ruling:
On the first issue, while it is true that the withdrawal of support
may be considered as a resignation from the union, the fact
remains that at the time of the union’s application for
registration, the affiants were members of respondent and they
comprised more than the required 20% membership for
purposes of registration as a labor union. Article 234 of the
Labor Code merely requires a 20% minimum membership
during the application for union registration. It does not
mandate that a union must maintain the 20% minimum
membership requirement all throughout its existence.
On the second issue, it appears undisputedly that the 31 union
members had withdrawn their support to the petition before the
filing of said petition. The distinction must be that withdrawals
made before the filing of the petition are presumed voluntary
unless there is convincing proof to the contrary, whereas
withdrawals made after the filing of the petition are deemed
involuntary. Therefore, following jurisprudence, the employees
were not totally free from the employer’s pressure and so the
voluntariness of the employees’ execution of the affidavits
becomes suspect.
The cancellation of a union’s registration doubtless has an
impairing dimension on the right of labor to self-organization.
For fraud and misrepresentation to be grounds for cancellation
of union registration under the Labor Code, the nature of the
fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Eagle Ridge Golf and Country Club vs. Court of
Appeals and Eagle Ridge Employees Union
(EREU), G.R. No. 178989, 18 March 2010-Santos
GROUNDS FOR CANCELLATION OF UNION
REGISTRATION
DOCTRINE:
We have in precedent cases said that the employees'
withdrawal from a labor union made before the filing of the
petition for certification election is presumed voluntary, while
withdrawal after the filing of such petition is considered to be
involuntary and does not affect the same. Now then, if a
withdrawal from union membership done after a petition for
certification election has been filed does not vitiate such
petition, is it not but logical to assume that such withdrawal
cannot work to nullify the registration of the union?
FACTS:
Petitioner Eagle Ridge is a corporation engaged in the
business of maintaining golf courses. It had, at the end of CY
2005, around 112 rank-and-file employees. On December 6,
2005, at least 20% of Eagle Ridge’s rank-and file employees—
the percentage threshold required under Article 234(c) of the
Labor Code for union
registration—had a meeting where they organized themselves
into an independent labor union, named "Eagle Ridge
Employees Union" (EREU or Union), elected a set of officers,
and ratified their constitution and by-laws.
On December 19, 2005, EREU formally applied for registration
before the Department of Labor and Employment (DOLE)
Regional Office IV (RO IV). In time, DOLE RO IV granted the
application. The EREU then filed a petition for certification
election in Eagle Ridge Golf & Country Club. Eagle Ridge
opposed this petition, followed by its filing of a petition for the
cancellation of the application. Eagle Ridge’s petition ascribed
misrepresentation, false statement, or fraud to EREU in
connection with the adoption of its constitution and by-laws, the
numerical composition of the Union, and the election of its
officers.
Petitoner’s contention: Petitioner alleged that the EREU
declared in its application for registration having 30 members,
when the minutes of its December 6, 2005 organizational
meeting showed it only had 26 members. The
misrepresentation was exacerbated by the discrepancy
between the certification issued by the Union secretary and
president that 25 members actually ratified the constitution and
by-laws on December 6, 2005 and the fact that 26 members
affixed their signatures on the documents, making one
signature a forgery. Finally, petitioner contended that five
employees who attended the organizational meeting had
murallos • david • Mendoza, s | 16
manifested the desire to withdraw from the union. The five
executed individual affidavits or Sinumpaang Salaysay on
February 15, 2006, attesting that they arrived late at said
meeting which they claimed to be drinking spree; that they did
not know that the documents they signed on that occasion
pertained to the organization of a union; and that they now
wanted to be excluded from the Union. The withdrawal of the
five, Eagle Ridge maintained, effectively reduced the union
membership to 20 or 21, either of which is below the
mandatory minimum 20% membership requirement under Art.
234(c) of the Labor Code. Reckoned from 112 rank-and-file
employees of Eagle Ridge, the required number would be 22
or 23 employees.
Respondent’s contention: As a counterpoint, EREU alleged
that discrepancies are not real for before filing of its application
on December 19, 2005, four additional employees joined the
union on December 8, 2005, thus raising the union
membership to 30 members as of December 19, 2005; that the
understatement by one member who ratified the constitution
and by-laws was a typographical error, which does not make it
either grave or malicious warranting the cancellation of the
union’s registration; that the retraction of 5 union members
should not be given any credence for the reasons that:
(a) the sworn statements of the five retracting union members
sans other affirmative evidence presented hardly qualify as
clear and credible evidence considering the joint affidavits of
the other members attesting to the orderly conduct of the
organizational meeting;
(b) the retracting members did not deny signing the union
documents;
(c) it can be presumed that "duress, coercion or valuable
consideration" was brought to bear on the retracting members;
and
(d) once the required percentage requirement has been
reached, the employees’ withdrawal from union membership
taking place after the filing of the petition for certification
election will not affect the petition.
After due proceedings, the DOLE Regional Director, focusing
on the question of misrepresentation, issued an Order finding
for Eagle Ridge. Aggrieved, the Union appealed to the BLR,
which affirmed the appealed order of the DOLE Regional
Director. Undeterred by successive set backs, EREU
interposed a motion for reconsideration which was granted.
Eagle Ridge sought but was denied reconsideration. Eagle
Ridge thereupon went to the CA, which dismissed the petition
for certiorari. The CA later denied Eagle Ridge’s motion for
reconsideration, hence the recourse with the SC.
ISSUE:
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Whether there was fraud in the application to merit the
cancellation of the EREU’s registration
SC RULING:
NO, a scrutiny of the records fails to show any
misrepresentation, false statement, or fraud committed by
EREU to merit cancellation of its registration. The Supreme
Court succinctly explained this decision in eight points:
First . The Union submitted the required documents attesting to
the facts of the organizational meeting on December 6, 2005,
the election of its officers, and the adoption of the Union’s
constitution and by-laws.
Second. The members of the EREU totaled 30 employees
when it applied on December 19, 2005 for registration. The
Union thereby complied with the mandatory minimum 20%
membership requirement under Art. 234(c). Of note is the
undisputed number of 112 rank-and-file employees in Eagle
Ridge, as shown in the Sworn Statement of the Union
president and secretary and confirmed by Eagle Ridge in its
petition for cancellation.
Third. The Union has sufficiently explained the discrepancy
between the number of those who attended the organizational
meeting showing 26 employees and the list of union members
showing 30. The difference is due to the additional four
members admitted two days after the organizational meeting
as attested to by their duly accomplished Union Membership
form.
Fourth. In its futile attempt to clutch at straws, Eagle Ridge
assails the inclusion of the additional four members allegedly
for not complying with what it termed as "the sine qua non
requirements" for union member applications under the Union’s
constitution and by-laws, specifically Sec. 2 of Art. IV. We are
not persuaded. Any seeming infirmity in the application and
admission of union membership, most especially in cases of
independent labor unions, must be viewed in favor of valid
membership. The right of employees to self-organization and
membership in a union must not be trammeled by undue
difficulties. In this case, when the Union said that the four
employee-applicants had been admitted as union members, it
is enough to establish the fact of admission of the four that
they had duly signified such desire by accomplishing the
membership form. The fact, as pointed out by Eagle Ridge,
that the Union, owing to its scant membership, had not yet fully
organized its different committees evidently shows the direct
and valid acceptance of the four employee applicants rather
than deter their admission— as erroneously asserted by Eagle
Ridge.
Fifth. The difference between the number of 26 members, who
ratified the Union’s constitution and by-laws, and the 25
members shown in the certification of the Union secretary as
having ratified it, is, as shown by the factual antecedents, a
murallos • david • Mendoza, s | 17
typographical error. It was an insignificant mistake committed registration. This amounts to a clear circumvention of the law
without malice or prevarication. The list of those who attended and cannot be countenanced.
the organizational meeting shows 26 members, as evidenced
by the signatures beside their handwritten names. The Heritage Hotel Manila vs. National Union of
Workers in the Hotel, Restaurant and Allied
Sixth. In the more meaty issue of the affidavits of retraction
executed by six union members, we hold that the probative
Industries-Heritage Hotel Manila Supervisors
value of these affidavits cannot overcome those of the Chapter (NUWHRAIN-HHMSC)
supporting affidavits of 12 union members and their counsel as G.R. No. 178296, 12 January 2011
to the proceedings and the conduct of the organizational
meeting on December 6, 2005. The DOLE Regional Director
and the BLR OIC Director obviously erred in giving credence to
the affidavits of retraction, but not according the same Rural Bank of Alaminos Employees Union vs.
treatment to the supporting affidavits. The six affiants of the NLRC
affidavits of retraction were not presented in a hearing before
317 SCRA 669 (1999)
the Hearing Officer (DOLE Regional Director), as required
under the Rules Implementing Book V of the Labor Code
Facts:
covering Labor Relation. It is settled that affidavits partake the
nature of hearsay evidence, since they are not generally
With the appointment of one Benefredo Quinto to the position
prepared by the affiant but by another who uses his own
of internal auditor, which position he had held since January 1,
language in writing the affiant’s statement, which may thus be
1976, Ismael P. Tamayo, Sr., who had been with Rural Bank of
either omitted or misunderstood by the one writing them. For
Alaminos, Inc. (RBAI for brevity) since it started operations in
their non-presentation and consonant to the above-quoted rule,
September of 1956, feeling shortchanged, filed on June 3,
the six affidavits of retraction are inadmissible as evidence
1988 a complaint aginst RBAI for illegal dismissal.
against the Union in the instant case.

In an effort to buy peace, that is, to settle the case amicably,

Seventh. The fact that six union members, indeed, expressed
RBAI agreed on a compromise agreement dated July 13, 1988
the desire to withdraw their membership through their affidavits
to reinstate Ismael P. Tamayo, Sr. to the position of internal
of retraction will not cause the cancellation of registration on
auditor.
the ground of violation of Art. 234(c) of the Labor Code
requiring the mandatory minimum 20% membership of rank-
Claiming that his services were not actually needed, RBAI
and- file employees in the employees’ union. The six retracting
terminated effective January 1, 1989 Ismael P. Tamayo, Sr.s
union members clearly severed and withdrew their union
services. This led to the filing on March 27, 1989 of a complaint
membership. The query is whether such separation from the
for illegal dismissal by Ismael P. Tamayo, Sr. against Rural
Union can detrimentally affect the registration of the Union. We
Bank of Alaminos, Inc. docketed as NLRC Case No. SUB-
answer in the negative. Twenty percent (20%) of 112 rank-and-
RAB-01-03-7-0049-89.
file employees in Eagle Ridge would require a union
membership of at least 22 employees (112 x 205 = 22.4).
Subsequent to its certification on December 12, 1989 as the
When the EREU filed its application for registration on
sole bargaining agent of the employees of RBAI, the Rural
December 19, 2005, there were clearly 30 union members.
Bank of Alaminos Employees Union (hereinafter called the
Thus, when the certificate of registration was granted, there is
Union) submitted sometime in February 1989 proposals with
no dispute that the Union complied with the mandatory 20%
respect to salary/wage increases.
membership requirement. With the withdrawal of six union
members, there is still compliance with the mandatory
RBAIs counter-proposals not (sic) acceptable to it, the Union,
membership requirement under Art. 234(c), for the remaining
which had earlier filed a notice of strike on March 3, 1989, went
24 union members constitute more than the 20% membership
on strike on April 3, 1989.
requirement of 22 employees.

Its position being that the strike staged by the Union is illegal
Eighth. Finally, it may not be amiss to note, given the factual
and in violation of Article 248 (e) of the Labor Code, RBAI
antecedents of the instant case, that Eagle
instituted a petition for the declaration of the strike as illegal
and for actual damages it incurred by way of loss of earnings
Ridge has apparently resorted to filing the instant case for
to the tune of P30,000.00 per day. This petition was docketed
cancellation of the Union’s certificate of registration to bar the
as NLRC CASE NO. SUB-RAB-01-04-7-0059-89.
holding of a certification election. This can be gleaned from the
fact that the grounds it raised in its opposition to the petition for
The Union, assailing the alleged constructive dismissal of its
certification election are basically the same grounds it resorted
members brought about or resulting from the strike, lodged
to in the instant case for cancellation of EREU’s certificate of
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 18
against RBAI a complaint for unfair labor practice with prayer
for moral and exemplary damages. This complaint has been
docketed as NLRC CASE NO. SUB-RAB-01-06-7-0097-89.
The identity of the parties led the Labor Arbiter, Ricardo N.
Olairez, to consolidate the three (3) aforementioned cases.
Decision of LA:
• Ismael P. Tamayos was illegally dismissed for being a
regular employee and ordered to be reinstated
• The strike staged by the Union was legal and not in
violation of any provision of the Labor Code.
• The bank accountable for the full backwages and
other benefits due the Union members who he found to have
been constructively dismissed during the strike.
NLRC DECISION
ISSUES:
1.WON THE STRIKE IS ILLEGAL?
2. WON THE LA SHOULD HAVE CROSS EXAMINE THE
PETITIONER?
HELD:
1. NO. IT IS LEGAL
Obviously, the Union had duly observed the mandatory
cooling-off period such that the strike it eventually undertook
complied with what is required by the Labor Code. Hence, Our
finding that the strike is legal.
It is well-settled that when findings of fact by the labor arbiter
are sufficiently supported by the evidence on record, the same
must be accorded due respect by this Court.[1] More so when
such findings by the Labor Arbiter are affirmed by the NLRC on
appeal. Since the NLRC found the strike conducted by the
Union legal, the Court finds no justifiable reason for the
Commission to remand Case No. 0059-89 to the Labor Arbiter
for further proceedings. The allegation of unfair labor practice
and the claim for damages proceed from and are
consequences of the strike, the findings of which are based on
the legality or illegality thereof. The strike thus being adjudged
as legal, the charges of unfair labor practice and damages are
thereby negated and bereft of any basis. Therefore, the NLRC
gravely abused its discretion when it ordered the remand of
NLRC Case No. 0059-89 to the Labor Arbiter for further
proceedings.
Anent the second assigned error which pertains to NLRC Case
No. 0097-89, the case instituted by the Union against the
respondent Bank for unfair labor practice with damages, the
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Court believes, and so holds, that the remand of said case was
in order.
NLRC Case No. 0097-89 charged RBAI with unfair labor
practice and the Labor Arbiter concluded that the Bank
employed all available means to further delay the resolution of
the dispute, thus creating a scenario of an illegal lock-out.
A lock-out means the temporary refusal of an employer to
furnish work as a result of an industrial or labor dispute.[2] As
correctly found by the NLRC, in the case under consideration
evidence of illegal lock-out is wanting such that there can be
no conclusive determination by the NLRC as to the charge.
Petitioners failed to present sufficient proof to support the
allegation of illegal lock-out. No evidence was adduced by the
Union to show that the Bank really refused them employment
during the pendency of the strike. As to the allegation that the
Bank was interfering with and restraining the employees in the
exercise of their right to self-organization, suffice it to state that
filing a petition for cancellation of the Unions registration is not
per se an act of unfair labor practice. It must be shown by
substantial evidence that the filing of the petition for
cancellation of union registration by the employer was aimed to
oppress the Union. Consequently, the NLRC was right in
ordering the remand of Case No.0097-89 for further
proceedings.
2. NO
As regards the third assigned error, petitioners maintain that
the NLRC acted with grave abuse of discretion in remanding
NLRC Case No. 0049-89 for further proceedings because the
Labor Arbiter denied respondent Banks right to cross-examine
petitioner Ismael Tamayo, Sr. Respondent NLRC, on the other
hand, ruled that the Labor Arbiter should have granted
respondent Bank the right to cross-examine the said petitioner
on the veracity of the allegations in his unverified position
paper, and it was grave abuse of discretion not to allow
respondent Bank to cross-examine petitioner Tamayo.
In a long line of cases, this Court has held that the holding of a
trial is discretionary on the part of the Labor Arbiter, and it
cannot be demanded as a matter of right by the parties[6] The
absence of a formal hearing or trial before the Labor Arbiter is
no cause for a party to impute grave abuse of discretion.[7]
The submission of position papers and memoranda in labor
cases satisfies the requirements of due process, and a
decision rendered on the basis of the position papers which
were found to be sufficient, meets the requirements of a fair
and open hearing.[8] Thus, in the case under scrutiny, the
Labor Arbiter did not act with grave abuse his discretion in not
conducting a formal hearing or trial and in basing his decision
solely on the position papers submitted by the parties. The fact
that the position paper submitted by petitioner Tamayo was not
verified is of no moment. Succinct and clear is the ruling of this
Court that the lack of a verification of a position paper is only a
murallos • david • Mendoza, s | 19
formal and not a jurisdictional defect.[9] It is not fatal and could
be easily corrected by requiring an oath.
Petitioners allegation is not meritorious. It is axiomatic that
notice to counsel is notice to parties and when a party is
represented by counsel, notices should be made upon the
counsel of record at his given address, to which notices of all
kinds emanating from the court should be sent.[11] In the
appeal before the respondent Commission, it was Atty. Teofilo
Humilde who entered appearance in behalf of the Union and
petitioner Tamayo. It was thus reasonable for the NLRC to
send a copy of the NLRC Resolution to the said lawyer. Since
the said resolution was received by counsel on February 26,
1991 and the motion for reconsideration was filed only on
March 13, 1991, the denial by the NLRC was in order, the ten-
day period for filing a motion for reconsideration having lapsed.
SAN MIGUEL CORPORATION EMPLOYEES
UNION–PHILIPPINE TRANSPORT AND
GENERAL WORKERS ORGANIZATION
(SMCEU–PTGWO), petitioner, vs. SAN MIGUEL
PACKAGING PRODUCTS EMPLOYEES UNION–
PAMBANSANG DIWA NG MANGGAGAWANG
PILIPINO (SMPPEU–PDMP), respondent.
Facts:
Petitioner is the incumbent bargaining agent for the bargaining
unit comprised of the regular monthly-paid rank and file
employees of the three divisions of San Miguel Corporation
(SMC), namely, the San Miguel Corporate Staff Unit (SMCSU),
San Miguel Brewing Philippines (SMBP), and the San Miguel
Packaging Products (SMPP), in all offices and plants of SMC,
including the Metal Closure and Lithography Plant in Laguna. It
had been the certified bargaining agent for 20 years — from
1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa
ng Manggagawang Pilipino (PDMP). PDMP issued Charter
Certificate No. 112 to respondent on 15 June 1999. In
compliance with registration requirements, respondent
submitted the requisite documents to the BLR for the purpose
of acquiring legal personality. Upon submission of its charter
certificate and other documents, respondent was issued
Certificate of Creation of Local or Chapter PDMP-01 by the
BLR on 6 July 1999. Thereafter, respondent filed with the Med-
Arbiter of the DOLE Regional Officer in the National Capital
Region (DOLE-NCR), three separate petitions for certification
election to represent SMPP, SMCSU, and SMBP. All three
petitions were dismissed, on the ground that the separate
petitions fragmented a single bargaining unit.
Petitioner filed with the DOLE-NCR a petition seeking the
cancellation of respondent's registration and its dropping from
the rolls of legitimate labor organizations. In its petition,
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
petitioner accused respondent of committing fraud and
falsification, and non-compliance with registration requirements
in obtaining its certificate of registration. It raised allegations
that respondent violated Articles 239 (a), (b) and (c) 10 and
234 (c) 11 of the Labor Code.Moreover, petitioner claimed that
PDMP is not a legitimate labor organization, but a trade union
center, hence, it cannot directly create a local or chapter.
DOLE-NCR Regional Director Maximo B. Lim issued an Order
dismissing the allegations of fraud and misrepresentation, and
irregularity in the submission of documents by respondent.
Regional Director Lim further ruled that respondent is allowed
to directly create a local or chapter. However, he found that
respondent did not comply with the 20% membership
requirement and, thus, ordered the cancellation of its certificate
of registration and removal from the rolls of legitimate labor
organizations. Respondent appealed to the BLR.
While the BLR agreed with the findings of the DOLE Regional
Director dismissing the allegations of fraud and
misrepresentation, and in upholding that PDMP can directly
create a local or a chapter, it reversed the Regional Director's
ruling that the 20% membership is a requirement for
respondent to attain legal personality as a labor organization.
Petitioner thereafter filed a Motion for Reconsideration with the
BLR.
Issue:
W/N SM Packing Employees met the requirements and thus,
must remain a legitimate labor organization
Held:
No. A legitimate labor organization is defined as "any labor
organization duly registered with the Department of Labor and
Employment, and includes any branch or local thereof." The
mandate of the Labor Code is to ensure strict compliance with
the requirements on registration because a legitimate labor
organization is entitled to specific rights under the Labor Code,
and are involved in activities directly affecting matters of public
interest. Registration requirements are intended to afford a
measure of protection to unsuspecting employees who may be
lured into joining unscrupulous or fly-by-night unions whose
sole purpose is to control union funds or use the labor
organization for illegitimate ends. Legitimate labor
organizations have exclusive rights under the law which cannot
be exercised by non-legitimate unions, one of which is the right
to be certified as the exclusive representative of all the
employees in an appropriate collective bargaining unit for
purposes of collective bargaining. The acquisition of rights by
any union or labor organization, particularly the right to file a
petition for certification election, first and foremost, depends on
whether or not the labor organization has attained the status of
a legitimate labor organization.
murallos • david • Mendoza, s | 20
A perusal of the records reveals that respondent is registered
with the BLR as a "local" or "chapter" of PDMP and was issued
Charter Certificate No. 112 on 15 June 1999. Hence,
respondent was directly chartered by PDMP.
The applicable Implementing Rules enunciates a two-fold
procedure for the creation of a chapter or a local. The first
involves the affiliation of an independent union with a
federation or national union or industry union. The second,
finding application in the instant petition, involves the direct
creation of a local or a chapter through the process of
chartering.
A duly registered federation or national union may directly
create a local or chapter by submitting to the DOLE Regional
Office or to the BLR two copies of the following:
(a) A charter certificate issued by the federation or national
union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapter's officers, their addresses,
and the principal office of the local/chapter; and
(c) The local/chapter's constitution and by-laws; Provided, That
where the local/chapter's constitution and by-laws is the same
as that of the federation or national union, this fact shall be
indicated accordingly.
All the foregoing supporting requirements shall be certified
under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President.
The Implementing Rules stipulate that a local or chapter may
be directly created by a federation or national union. A duly
constituted local or chapter created in accordance with the
foregoing shall acquire legal personality from the date of filing
of the complete documents with the BLR. 29 The issuance of
the certificate of registration by the BLR or the DOLE Regional
Office is not the operative act that vests legal personality upon
a local or a chapter under Department Order No. 9. Such legal
personality is acquired from the filing of the complete
documentary requirements enumerated in Section 1, Rule VI.
Petitioner insists that Section 3 of the Implementing Rules, as
amended by Department Order No. 9, violated Article 234 of
the Labor Code when it provided for less stringent
requirements for the creation of a chapter or local. This Court
disagrees.
Article 234 of the Labor Code provides that an independent
labor organization acquires legitimacy only upon its registration sa Industriya ng Kapatirang Haligi ng Alyansa (SAMMA-LIKHA)
with the BLR:
Any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to legitimate DOLE; (2) it sought to represent all the rank-and-file
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal
address of the labor organization, the minutes of the
organizational meetings and the list of the workers who
participated in such meetings;
(c) The names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit
where it seeks to operate;
(d) If the applicant union has been in existence for one or more
years, copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the
applicant union, minutes of its adoption or ratification, and the
list of the members who participated in it. (Italics supplied.)
It is emphasized that the foregoing pertains to the registration
of an independent labor organization, association or group of
unions or workers.
However, the creation of a branch, local or chapter is treated
differently. This Court, in the landmark case of Progressive
Development Corporation v. Secretary, Department of Labor
and Employment, 31 declared that when an unregistered union
becomes a branch, local or chapter, some of the
aforementioned requirements for registration are no longer
necessary or compulsory. Whereas an applicant for registration
of an independent union is mandated to submit, among other
things, the number of employees and names of all its members
comprising at least 20% of the employees in the bargaining
unit where it seeks to operate, as provided under Article 234 of
the Labor Code and Section 2 of Rule III, Book V of the
Implementing Rules, the same is no longer required of a
branch, local or chapter. 32 The intent of the law in imposing
less requirements in the case of a branch or local of a
registered federation or national union is to encourage the
affiliation of a local union with a federation or national union in
order to increase the local union's bargaining powers
respecting terms and conditions of labor.
SAMMA-LIKHA vs. SAMA Corp.
G.R. No. 167141, 13 Mar 2009
FACTS:
Petitioner Samahan ng mga Manggagawa sa Samma– Lakas
filed a petition for certification election on July 24, 2001 in the
Department of Labor and Employment (DOLE), Regional
Office IV. It claimed that: (1) it was a local chapter of the LIKHA
Federation, a legitimate labor organization registered with the
murallos • david • Mendoza, s | 21
employees of respondent Samma Corporation; (3) there was
no other legitimate labor organization representing these rank-
and-file employees; (4) respondent was not a party to any
collective bargaining agreement and (5) no certification or
consent election had been conducted within the employer unit
for the last 12 months prior to the filing of the petition.
Respondent moved for the dismissal of the petition arguing
that (1) LIKHA Federation failed to establish its legal
personality; (2) petitioner failed to prove its existence as a local
chapter; (3) it failed to attach the certificate of non-forum
shopping and (4) it had a prohibited mixture of supervisory and
rank-and-file employees.
Med-arbiter ordered the dismissal. , Acting Secretary Manuel
G. Imson, treating the motion for reconsideration as an appeal,
rendered a decision reversing the order of the med-arbiter. He
ruled that the legal personality of a union cannot be collaterally
attacked but may only be questioned in an independent
petition for cancellation of registration. Thus, he directed the
holding of a certification election among the rank-and-file
employees of respondent, subject to the usual pre-election
conference and inclusion-exclusion proceedings. CA reversed.
Hence, this petition.
ISSUE:
Whether a certificate for non-forum shopping is required in a
petition for certification election
HELD:
NO
In ruling against petitioner, the CA declared that under
Administrative Circular No. 04-94, a certificate of non-forum
shopping was required in a petition for certification election.
The circular states:
The complaint and other initiatory pleadings referred to and
subject of this Circular are the original civil complaint,
counterclaim, cross-claim, third (fourth, etc.) party complaint, or
complaint-in-intervention, petition, or application wherein a
party asserts his claim for relief. (Emphasis supplied)
According to the CA, a petition for certification election asserts
a claim, i.e., the conduct of a certification election. As a result,
it is covered by the circular.
We disagree.
The requirement for a certificate of non-forum shopping refers
to complaints, counter-claims, cross-claims, petitions or
applications where contending parties litigate their respective
positions regarding the claim for relief of the complainant,
claimant, petitioner or applicant. A certification proceeding,
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
even though initiated by a “petition,” is not a litigation but an
investigation of a non-adversarial and fact-finding character.
Such proceedings are not predicated upon an allegation of
misconduct requiring relief, but, rather, are merely of an
inquisitorial nature. The Board’s functions are not judicial in
nature, but are merely of an investigative character. The object
of the proceedings is not the decision of any alleged
commission of wrongs nor asserted deprivation of rights but is
merely the determination of proper bargaining units and the
ascertainment of the will and choice of the employees in
respect of the selection of a bargaining representative. The
determination of the proceedings does not entail the entry of
remedial orders to redress rights, but culminates solely in an
official designation of bargaining units and an affirmation of the
employees’ expressed choice of bargaining agent.
Under the omnibus rules implementing the Labor Code as
amended by D.O. No. 9, it is supposed to be filed in the
Regional Office which has jurisdiction over the principal office
of the employer or where the bargaining unit is principally
situated. The rules further provide that where two or more
petitions involving the same bargaining unit are filed in one
Regional Office, the same shall be automatically consolidated.
Hence, the filing of multiple suits and the possibility of
conflicting decisions will rarely happen in this proceeding and,
if it does, will be easy to discover.
Notably, under the Labor Code and the rules pertaining to the
form of the petition for certification election, there is no
requirement for a certificate of non-forum shopping either in
D.O. No. 9, series of 1997 or in D.O. No. 40-03, series of 2003
which replaced the former.
Considering the nature of a petition for certification election
and the rules governing it, we therefore hold that the
requirement for a certificate of non-forum shopping is
inapplicable to such a petition.
Legend International Resorts vs. Kilusang
Manggagawa ng Legenda
GR 169754, 23 February 2011
CRUZ VS. CALLEJA
188 SCRA 520
FACTS:
In 1984, the Allied Bank Employees Union (ABEU), which was
then a mere chapter of the National Union of Bank Employees
(NUBE), elected its officers, whose term of office would expire
on February 10, 1987.
murallos • david • Mendoza, s | 22
Before the expiration of the old CBA between the ABEU and
Allied Bank on June 30, 1984, the ABEU negotiated for a new
CBA. However, because the Union and the Bank could not
agree on major economic proposals, a bargaining deadlock
ensued.
ABEU filed a Notice of Strike on November 26, 1984. Labor
Minister Blas Ople assumed jurisdiction over the labor dispute
on December 19, 1984.
In defiance of the Minister's return-to-work order, the Union
declared a strike on January 3, 1985 and established picket
lines at the Bank's Head Office and Binondo Branch.
On January 31, 1985, Minister Ople issued an Order resolving
the deadlock issues in the collective bargaining and in effect
drew up a new CBA for the parties. The 3-year term of the new
CBA would expire on January 31, 1988. The union asked for
reconsideration, and on February 11, 1985, continued its strike.
Two hundred seventy (270) striking officers and employees of
ABEU (among them were the private respondents) were
dismissed by the Bank for abandonment of work and
commission of illegal acts.
On March 4, 1985, the Bank filed in the Arbitration Branch,
NCR, NLRC, a petition to declare the strike illegal. llcd
Upon receipt of the Resolution dated March 7, 1985 modifying
Minister Ople's order dated January 31, 1985, the ABEU on
March 8, 1985 lifted its picket lines and announced its intention
to return to work. However, the Bank refused to admit the
strikers.
On March 19, 1985, a referendum was conducted by the ABEU
to ratify the 1985-1988 CBA incorporating the additional
benefits awarded in the March 7, 1985 resolution. A majority
voted for ratification.
On July 15, 1985, the Bank filed a motion praying for the
issuance of an order directing the Union to hold a general
membership meeting for the purpose of designating union
representatives who would sign the CBA inasmuch as the
Union's officers had already been dismissed by the Bank.
On November 11, 1985, the NUBE issued a special resolution
creating an ABEU Interim Board tasked to sign the new CBA
with the Bank in lieu of the union officers who had been
dismissed by the Bank. **
In January, 1987, the Interim Board commenced negotiations
with the Bank for a one-year extension of the CBA which was
expiring on January 31, 1988. A drive for the extension of the
CBA began in March 1987 for the referendum would take place
on June 23, 1987. However, the Interim Board also submitted
to the referendum the matter of extending for one year the term
of office of the Interim Board, in effect, postponing for one year
the election of the regular officers of the Union. The
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
overwhelming majority of the union members voted yes in the
referendum. The postponement of the election did not sit well
with the ousted officers led by private respondent Rolando
Ocampo. On June 23, 1987, they filed in the Office of Labor
Secretary Franklin Drilon a letter-petition against the
postponement of the election of the officers of the Union and to
nullify the one-year extension of the CBA.
After the referendum result was announced on July 3, 1987,
the Bank granted a P600 "signing bonus" to all the employees.
Private respondents and other employees stationed in the
Strata Building in Pasig, Metro Manila, collected the signing
bonus but, in protest, they deposited it in the Equitable Banking
Corporation, payable to Allied Bank through Secretary Drilon.
The Office of the Secretary of Labor forwarded the letter-
petition of respondent Rolando Ocampo to the National Capital
Region, DOLE, Manila, which subsequently treated it as a
formal petition, docketed as Case No. NCR-OP-M-8-611-87.
cdll
After the hearing of the petition and the submission of the
parties' position papers, the Med-Arbiter, on January 4, 1988,
issued an order directing the Union to call a general
membership meeting where the manner of conducting the
election could be discussed before fixing the date of the
election. The order declared null and void the one-year
extension of the CBA from February 1, 1988 to January 31,
1989.
Petitioners filed a motion for reconsideration (which was
treated as an appeal) of the order of the Med-Arbiter. In a
resolution dated January 6, 1988, the Interim Board appointed
a Comelec which, on January 8, 1988, issued a resolution
setting the election of officers on February 10, 1988.
On motion of Ocampo, et al, the Bureau of Labor Relations
issued on February 9, 1988, a temporary restraining order
enjoining petitioners, including the Union's Comelec, from
proceeding with the election on February 10, 1988. However,
despite the restraining order, the Union held the election on
February 10, 1988 as scheduled. Petitioners were declared the
winners in the election.
The private respondents filed a motion to cite respondents
(petitioners herein) for contempt. prLL
On March 2, 1989, the public respondent, Director Pura Calleja
of the BLR, issued a resolution whose dispositive portion reads
as follows:
"WHEREFORE, premises considered, the election conducted
in Allied Bank Employees Union on February 10, 1988 is
hereby declared null and void.
"Another election is hereby ordered conducted in accordance
with the express tenor of the Med-Arbiter's Order dated 4
murallos • david • Mendoza, s | 23
January 1988, that a general membership meeting shall first be
held where the mechanics of the election shall be fully
threshed out.
"In the meantime, the officers who were elected on 10
February 1988 and whose election to office we now declare
null and void are hereby temporarily charged with the
safekeeping of the union funds subject to accounting before
the new set of officers which shall be elected in accordance
with this Order.
"The respondent Bank is likewise enjoined to observe absolute
neutrality during these activities, they being purely an internal
affair of the union."
ISSUE:
Whether or not the extension of the CBA was valid
HELD:
There is no merit in the petitioners' contention that the public
respondent gravely abused her discretion in annulling the
February 10, 1988 election of officers. The public respondent
correctly noted that in ordering the postponement of the
election for one year (in effect extending their term of office for
one year), the ABEU Interim Board "overstepped its bounds"
for it was constituted and authorized only "to sign for and in
behalf of the union the Collective Bargaining Agreement with
the Bank and administer the CBA and the operation of the
union." (p. 27, Rollo.)
"Instead of calling a regular election of officers of ABEU on 11
February 1987, as mandated by the Union's Constitution and
by-laws, respondents submitted in a 'referendum' the extension
of their term of office for yet another year, from 11 February
1987 to 10 February 1988.
"From the very inception the referendum process initiated by
the Interim Board was improper. The results therefrom are
therefore, invalid. It may be true, that the task of administering
the operation of the union was given to the ABEU-Interim
Board at the time it was constituted, to fill in the vacuum in the
local union's leadership during that time. Nonetheless said task
could not be exercised beyond the regular term of the regular
officers. Stated simply, the exercise of said task is only
coterminous with the term of the regular officers, in whose
shoes, the members of the ABEU-Interim Board merely
stepped into.
"When the term of the union's regular officers expired on
February 11, 1987 the election of officers should have been
held, in accordance with the provision of the union constitution
and by laws. With the expiration of the term of the regular
officers, the term of the ABEU-Interim Board, expired too. In YES. It is important to note that substantial compliance is not
calling the referendum therefore, the ABEU-Interim Board enough in view of the fact that the special assessment will
clearly overstepped its bounds." (pp. 27- 28, Rollo.) diminish the compensation of the union members. Their
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
The second issue regarding the validity of the one-year
extension of the CBA, as observed by the BLR, has become
moot and academic. The public respondent's view that the
one-year extension was also null and void is not quite correct
for the extension was approved by the Union in a referendum
which was properly supervised by the Department of Labor. It
was accepted by the Bank which gave a "signing bonus" to the
employees who voted for it. Since the holding of the
referendum was within the authority of the Interim Board "to
administer the CBA and operate the union," and the extension
was acceptable to both of the parties to the agreement, and did
not violate any law, it is valid and binding on them.
WHEREFORE, the instant petition for certiorari is dismissed for
lack of merit. No costs.
PALACOL vs. PURA FERRER-CALLEJA
FACTS:
The Union concluded a new collective bargaining agreement
with Coca-Cola Bottlers. Among the benefits grated was a
general salary increase to be given in lump-sum including a re-
computation of actual commissions earned based on the new
rates of increase. Thus, the President of the Union submitted
to Coca-Cola the ratification of the Union to deduct union dues
equivalent to P10.00 every payday (or P20.00 every month)
and, in addition, 10% by way of special assessment, from the
CBA lump-sum pay granted to the union members. The
Union’s purpose for the special assessment was to put up a
cooperative and credit union, to purchase vehicles and other
items for the benefit of the officers and the members, and for
the payment of services rendered by union officers,
consultants, etc. It also stated that the allocation shall be at the
discretion of the incumbent Union President. Unexpectedly,
several members (572) withdrew their votes claiming that even
if they have ratified it, they are not deauthorizing it. Thus, the
company filed an action for interpleader with the Bureau of
Labor Relations (BLR) in order to resolve the conflicting claims
of the parties. The Union, then, countered that the deductions
not only have the popular indorsement and approval of the
general membership, but it was likewise complied with the
legal requirements. Med-Arbiter Cruz agreed with the Union
and asked the Company to remit the amount it had kept in
trust. The BLR then reversed the MA’s decision. Thus, this
petition.
ISSUE:
W/N a special assessment requires express consent of all
Union members.
HELD:
murallos • david • Mendoza, s | 24
express consent is required, and this consent must be
obtained in accordance with the steps outlined by law. No
shortcuts is allowed.
REQUISITE: The Union must submit to the Company a written
resolution of a majority of all the members at a general
membership meeting duly called for the purpose. The
secretary of the organization must record the minutes of the
meeting, which must include the list of all the members present
as well as the votes cast.
GABRIEL VS. SEC OF LABOR
FACTS:
Petitioners comprise the Executive Board of the SolidBank
Union, the duly recognized collective bargaining agent for the
rank and file employees of Solid Bank Corporation. Private
respondents are members of said union.
DOLE’s RESOLUTION: The appeal of respondents Evangeline
Gabriel, et. al., is hereby partially granted and the Order of the
Med-Arbiter dated 22 April 1993 is hereby modified as follows:
(1) that the ordered refund shall be limited to those union
members who have not signified their conformity to the check-
off of attorneys fees; and (2) the directive on the payment of
5% attorneys fees should be deleted for lack of basis.
Petitioners argue that the General Membership Resolution
authorizing the bank to check-off attorneys fee from the first
lump sum payment of the benefits to the employees under the
new CBA satisfies the legal requirements for such assessment.
[9] Private respondents, on the other hand, claim that the
check-off provision in question is illegal because it was never
submitted for approval at a general membership meeting called
for the purpose and that it failed to meet the formalities
mandated by the Labor Code

Sometime in October 1991, the unions Executive Board ISSUE:

decided to retain anew the service of Atty. Ignacio P. Lacsina
(now deceased) as union counsel in connection with the Did the public respondent act with grave abuse of discretion in
negotiations for a new Collective Bargaining Agreement (CBA). issuing the challenged order? WON the check-off was legal?
Accordingly, on October 19, 1991, the board called a general
membership meeting for the purpose. At the said meeting, the HELD:
majority of all union members approved and signed a
resolution confirming the decision of the executive board to From all the foregoing, we are of the considered view that
engage the services of Atty. Lacsina as union counsel. As public respondent did not act with grave abuse of discretion in
approved, the resolution provided that ten percent (10%) of the ruling that the workers through their union should be made to
total economic benefits that may be secured through the shoulder the expenses incurred for the services of a lawyer.
negotiations be given to Atty. Lacsina as attorneys fees. It also And accordingly the reimbursement should be charged to the
contained an authorization for SolidBank Corporation to check- unions general fund or account. No deduction can be made
off said attorneys fees from the first lump sum payment of from the salaries of the concerned employees other than those
benefits to the employees under the new CBA and to turn over mandated by law.
said amount to Atty. Lacsina and/or his duly authorized
representative.[2]The new CBA was signed on February 21, WHEREFORE, the petition is DENIED. The assailed Order
1992. The bank then, on request of the union, made payroll dated June 3, 1994, of respondent Secretary of Labor signed
deductions for attorneys fees from the CBA benefits paid to the by Undersecretary Bienvenido E. Laguesma is AFFIRMED. No
union members in accordance with the abovementioned pronouncement as to costs.
resolution.
Article 241 has three (3) requisites for the validity of the special
On October 2, 1992, private respondents instituted a complaint assessment for unions incidental expenses, attorneys fees and
against the petitioners and the union counsel before the representation expenses. These are: 1) authorization by a
Department of Labor and Employment (DOLE) for illegal written resolution of the majority of all the members at the
deduction of attorneys fees as well as for quantification of the general membership meeting called for the purpose; (2)
benefits in the 1992 CBA.[3] Petitioners, in response, moved secretarys record of the minutes of the meeting; and (3)
for the dismissal of the complaint citing litis pendentia, forum individual written authorization for check off duly signed by the
shopping and failure to state a cause of action as their employees concerned. Sce dp
grounds.[
Clearly, attorneys fees may not be deducted or checked off
MED-ARBITER’s DECISION: WHEREFORE, premises from any amount due to an employee without his written
considered, the Respondents Union Officers and Counsel are consent. After a thorough review of the records, we find that
hereby directed to immediately return or refund to the the General Membership Resolution of October 19, 1991 of the
Complainants the illegally deducted amount of attorneys fees SolidBank Union did not satisfy the requirements laid down by
from the package of benefits due herein complainants under law and jurisprudence for the validity of the ten percent (10%)
the aforesaid new CBA special assessment for unions incidental expenses, attorneys
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 25
fees and representation expenses. There were no individual
written check off authorizations by the employees concerned
and so the assessment cannot be legally deducted by their
employer. In check-off, the employer, on agreement with the
Union, or on prior authorization from employees, deducts union
dues or agency fees from the latters wages and remits them
directly to the union.[11] It assures continuous funding for the
labor organization. As this Court has acknowledged, the
system of check-off is primarily for the benefit of the union and
only indirectly for the individual employees.[12] The pertinent
legal provisions on check-offs are found in Article 222 (b) and
Article 241 (o) of the Labor Code.
Article 222 (b) states:
"No attorneys fees, negotiation fees or similar charges of any
kind arising from any collective bargaining negotiations or
conclusions of the collective agreement shall be imposed on
any individual member of the contracting union: Provided,
however, that attorneys fees may be charged against union
funds in an amount to be agreed upon by the parties. Any
contract, agreement or arrangement of any sort to the contrary
shall be null and void." (Underscoring ours)
Article 241 (o) provides:
"Other than for mandatory activities under the Code, no special
assessment, attorneys fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due to
an employee without an individual written authorization duly
signed by the employee. The authorization should specifically
state the amount, purpose and beneficiary of the deduction."
Volkschel Labor Union vs. BLR
FACTS:
Petitioner was once affiliated with the Associated Labor Union
for Metal Workers (ALUMETAL). On August 1, 1975, both
unions, using the name Volkschel Labor Union Associated
Labor Union for Metal Workers, jointly entered into a collective
bargaining agreement with respondent companies. One of the
subjects dealt with is the payment of union dues.
A majority of petitioner's members decided to disaffiliate from
respondent federation in order to operate on its own as an
independent labor group.
Confronted with the predicament of whether or not to continue
deducting from employees' wages and remitting union dues to
respondent, ALUMETAL which wrote respondent companies
advising them to continue deducting union dues and remitting
them to said federation, respondent companies sought the
legal opinion of the respondent Bureau as regards the
controversy between the two unions. On November 11, 1976,
Several months later, pending settlement of the controversy,
Med-Arbiter George A. Eduvalla of respondent Bureau
PSEA sent PAFLU a notice of disaffiliation citing as reason
rendered a Resolution which in effect found the disaffiliation
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
legal but at the same time gave the opinion that, petitioner's
members should continue paying their dues to ALUMETAL in
the concept of agency fees.
From the said Resolution, of the Med-Arbiter both petitioner
and respondent ALUMETAL appealed to the Director of
respondent Bureau. Petitioner' contended that the Med-
Arbiter's opinion to the effect that petitioner's members
remained obligated to pay dues to respondent ALUMETAL was
inconsistent with the dispositive finding that petitioner's
disaffiliation from ALUMETAL was valid. ALUMETAL, on the
other hand, assailed the Resolution in question asserting that
the disaffiliation should have been declared contrary to law.
ISSUE:
Whether or not petitioner union’s disaffiliation from respondent
federation valid.
HELD:
YES. The right of a local union to disaffiliate from its mother
union is well-settled. A local union, being a separate and
voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when
circumstances warrant. This right is consistent with the
Constitutional guarantee of freedom of association (Article IV,
Section 7, Philippine Constitution).
Petition is GRANTED. Assailed resolutions are REVERSED
and SET ASIDE.
PHILIPPINE SKYLANDERS, INC., MARILES C.
ROMULO and FRANCISCO DAKILA, petitioners,
vs. NATIONAL LABOR RELATIONS
COMMISSION, LABOR ARBITER EMERSON
TUMANON, PHILIPPINE ASSOCIATION OF
FREE LABOR UNIONS (PAFLU) SEPTEMBER
(now UNIFIED PAFLU) and SERAFIN AYROSO,
respondents.
FACTS:
On November 1993 the Philippine Skylanders Employees
Association (PSEA), a local labor union affiliated with the
Philippine Association of Free Labor Unions (PAFLU)
September (PAFLU), won in the certification election
conducted among the rank and file employees of Philippine
Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately
protested the result of the election before the Secretary of
Labor.
murallos • david • Mendoza, s | 26
PAFLU's supposed deliberate and habitual dereliction of duty
toward its members. Attached to the notice was a copy of the
resolution adopted and signed by the officers and members of
PSEA authorizing their local union to disaffiliate from its mother
federation.
PSEA subsequently affiliated itself with the National Congress
of Workers (NCW), changed its name to Philippine Skylanders
Employees Association - National Congress of Workers
(PSEA-NCW), and to maintain continuity within the
organization, allowed the former officers of PSEA-PAFLU to
continue occupying their positions as elected officers in the
newly-forged PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective
bargaining agreement with PSI which was immediately
registered with the Department of Labor and Employment.
Meanwhile, apparently oblivious to PSEA's shift of allegiance,
PAFLU Secretary General Serafin Ayroso wrote Mariles C.
Romulo requesting a copy of PSI's audited financial statement.
Ayroso explained that with the dismissal of PSEA-WATUs
election protest the time was ripe for the parties to enter into a
collective bargaining agreement.
On 30 July 1994 PSI through its personnel manager Francisco
Dakila denied the request citing as reason PSEA's disaffiliation
from PAFLU and its subsequent affiliation with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through
Serafin Ayroso filed a complaint for unfair labor practice
against PSI, its president Mariles Romulo and personnel
manager Francisco Dakila. PAFLU alleged that aside from
PSIs refusal to bargain collectively with its workers, the
company through its president and personnel manager, was
also liable for interfering with its employees' union activities.[6]
Two (2) days later or on 6 October 1994 Ayroso filed another
complaint in behalf of PAFLU for unfair labor practice against
Francisco Dakila. Through Ayroso PAFLU claimed that Dakila
was present in PSEA's organizational meeting thereby
confirming his illicit participation in union activities. Ayroso
added that the members of the local union had unwittingly
fallen into the manipulative machinations of PSI and were lured
into endorsing a collective bargaining agreement which was
detrimental to their interests.[7] The two (2) complaints were
thereafter consolidated.
On 1 February 1995 PAFLU amended its complaint by
including the elected officers of PSEA-PAFLU as additional
party respondents. PAFLU averred that the local officers of
PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas,
Sharon Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix,
Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa
Mortel, Teofilo Quirong, Leonardo Reyes, Manuel Cadiente,
and Herminia Riosa, were equally guilty of unfair labor practice
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
since they brazenly allowed themselves to be manipulated and
influenced by petitioner Francisco Dakila.[8]
PSI, its president Mariles C. Romulo, and its personnel
manager Dakila moved for the dismissal of the complaint on
the ground that the issue of disaffiliation was an inter-union
conflict which lay beyond the jurisdiction of the Labor Arbiter.
On the other hand, PSEA-NCW took the cudgels for its officers
who were being sued in their capacities as former officers of
PSEA-PAFLU and asserted that since PSEA was no longer
affiliated with PAFLU, Ayroso or PAFLU for that matter had no
personality to file the instant complaint. In support of this
assertion, PSEA-NCW submitted in evidence a Katunayan
signed by 111 out of 120 rank and file employees of PSI
disauthorizing Ayroso or PAFLU from instituting any action in
their behalf.[9
Decision of LA:
Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid
and held PSI, PSEA-PAFLU and their respective officers guilty
of unfair labor practice. The Decision explained that despite
PSEA-PAFLU's status as the sole and exclusive bargaining
agent of PSI's rank and file employees, the company knowingly
sanctioned and confederated with Dakila in actively assisting a
rival union. This, according to the Labor Arbiter, was a classic
case of interference for which PSI could be held responsible.
As PSEA-NCW's personality was not accorded recognition, its
collective bargaining agreement with PSI was struck down for
being invalid. Ayroso's legal personality to file the complaint
was sustained on the ratiocination that under the Labor Code
no petition questioning the majority status of the incumbent
bargaining agent shall be entertained outside of the sixty (60)-
day period immediately before the expiry date of such five (5)-
year term of the collective bargaining agreement that the
parties may enter into
Decision of NLRC:
NLRC upheld the Decision of the Labor Arbiter and conjectured
that since an election protest questioning PSEA-PAFLU's
certification as the sole and exclusive bargaining agent was
pending resolution before the Secretary of Labor, PSEA could
not validly separate from PAFLU, join another national
federation and subsequently enter into a collective bargaining
agreement with its employer-company.
ISSUE:
WON may PSEA, which is an independent and separate local
union, validly disaffiliate from PAFLU pending the settlement of
an election protest questioning its status as the sole and
exclusive bargaining agent of PSI's rank and file employees?
HELD:
YES
murallos • david • Mendoza, s | 27
The right of a local union to disaffiliate from its mother
federation is not a novel thesis unillumined by case law. In the
landmark case of Liberty Cotton Mills Workers Union vs.
Liberty Cotton Mills, Inc.[16] we upheld the right of local unions
to separate from their mother federation on the ground that as
separate and voluntary associations, local unions do not owe
their creation and existence to the national federation to which
they are affiliated but, instead, to the will of their members. The
sole essence of affiliation is to increase, by collective action,
the common bargaining power of local unions for the effective
enhancement and protection of their interests. Admittedly,
there are times when without succor and support local unions
may find it hard, unaided by other support groups, to secure
justice for themselves.
Yet the local unions remain the basic units of association, free
to serve their own interests subject to the restraints imposed by
the constitution and by-laws of the national federation, and free
also to renounce the affiliation upon the terms laid down in the
agreement which brought such affiliation into existence.
Such dictum has been punctiliously followed since then.[17]
Upon an application of the aforecited principle to the issue at
hand, the impropriety of the questioned Decisions becomes
clearly apparent. There is nothing shown in the records nor is it
claimed by PAFLU that the local union was expressly forbidden
to disaffiliate from the federation nor were there any conditions
imposed for a valid breakaway. As such, the pendency of an
election protest involving both the mother federation and the
local union did not constitute a bar to a valid disaffiliation.
Neither was it disputed by PAFLU that 111 signatories out of
the 120 members of the local union, or an equivalent of 92.5%
of the total union membership supported the claim of
disaffiliation and had in fact disauthorized PAFLU from
instituting any complaint in their behalf. Surely, this is not a
case where one (1) or two (2) members of the local union
decided to disaffiliate from the mother federation, but it is a
case where almost all local union members decided to
disaffiliate.
It was entirely reasonable then for PSI to enter into a collective
bargaining agreement with PSEA-NCW. As PSEA had validly
severed itself from PAFLU, there would be no restrictions
which could validly hinder it from subsequently affiliating with
NCW and entering into a collective bargaining agreement in
behalf of its members.
There is a further consideration that likewise argues for the
granting of the petitions. It stands unchallenged that PAFLU
instituted the complaint for unfair labor practice against the
wishes of workers whose interests it was supposedly
protecting. The mere act of disaffiliation did not divest PSEA of
its own personality; neither did it give PAFLU the license to act
independently of the local union. Recreant to its mission,
PAFLU cannot simply ignore the demands of the local chapter
and decide for its welfare. PAFLU might have forgotten that as
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
an agent it could only act in representation of and in
accordance with the interests of the local union. The complaint
then for unfair labor practice lodged by PAFLU against PSI,
PSEA and their respective officers, having been filed by a party
which has no legal personality to institute the complaint, should
have been dismissed at the first instance for failure to state a
cause of action.
Policy considerations dictate that in weighing the claims of a
local union as against those of a national federation, those of
the former must be preferred. Parenthetically though, the
desires of the mother federation to protect its locals are not
altogether to be shunned. It will however be to err greatly
against the Constitution if the desires of the federation would
be favored over those of its members. That, at any rate, is the
policy of the law. For if it were otherwise, instead of protection,
there would be disregard and neglect of the lowly workingmen.
CIRTEK EMPLOYEES LABOR UNION-
FEDERATION OF FREE WORKERS vs. CIRTEK
ELECTRONICS, INC.
Facts:
This resolves the motion for reconsideration and supplemental
motion for reconsideration filed by respondent, Cirtek
Electronics, Inc., of the Court’s Decision dated November 15,
2010. Respondent-movant maintains that the Secretary of
Labor cannot insist on a ruling beyond the compromise
agreement entered into by the parties; and that, as early as
February 5, 2010, petitioner Union had already filed with the
Department of Labor and Employment (DOLE) a resolution of
disaffiliation from the Federation of Free Workers resulting in
the latter’s lack of personality to represent the workers in the
present case.
Issue:
WON petitioner lost its personality to represent the workers
because of its disaffiliation from the Federation of Free
Workers.
Whether the Secretary of Labor is empowered to give arbitral
awards in the exercise of his authority to assume jurisdiction
over labor disputes.
Held:
The issue of disaffiliation is an intra-union dispute which must
be resolved in a different forum in an action at the instance of
either or both the FFW and the Union or a rival labor
organization, not the employer.
Indeed, as respondent-movant itself argues, a local union may
disaffiliate at any time from its mother federation, absent any
showing that the same is prohibited under its constitution or
murallos • david • Mendoza, s | 28
rule. Such, however, does not result in it losing its legal
personality altogether. Verily, Anglo-KMU v. Samahan Ng Mga
Manggagawang Nagkakaisa Sa Manila Bay Spinning Mills At
J.P. Coats enlightens:
A local labor union is a separate and distinct unit primarily
designed to secure and maintain an equality of bargaining
power between the employer and their employee-members. A
local union does not owe its existence to the federation with
which it is affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its members. The
mere act of affiliation does not divest the local union of its own
personality, neither does it give the mother federation the
license to act independently of the local union. It only gives rise
to a contract of agency where the former acts in representation
of the latter.
In the present case, the findings of the Secretary of Labor and
the appellate court on whether the MOA is valid and binding
are conflicting, the former giving scant consideration thereon,
and the latter affording it more weight.
As found by the Secretary of Labor, the MOA came about as a
result of the constitution, at respondent’s behest, of the Labor-
Management Council (LMC) which, he reminded the parties,
should not be used as an avenue for bargaining but for the
purpose of affording workers to participate in policy and
decision-making. Hence, the agreements embodied in the
MOA were not the proper subject of the LMC deliberation or
procedure but of CBA negotiations and, therefore, deserving
little weight.
The appellate court, held, however, that the Secretary did not
have the authority to give an arbitral award higher than what
was stated in the MOA. The conflicting views drew the Court to
re-evaluate the facts as borne by the records, an exception to
the rule that only questions of law may be dealt with in an
appeal by certiorari under Rule 45.
Motion for Reconsideration was denied.
UNFAIR LABOR PRACTICES
Insular Life Assurance Co. Ltd., Employees
Association-NATU vs. Insular Life Assurance
Co., Ltd, 37 SCRA 244 (1971)-Santos
FACTS:
The Insular Life Assurance Co., Ltd., Employees Association-
NATU, FGU Insurance Group Workers & Employees
Association-NATU, and Insular Life Building Employees
Association-NATU (hereinafter referred to as the Unions), while
still members of the Federation of Free Workers (FFW),
entered into separate CBAs with the Insular Life Assurance
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Co., Ltd. and the FGU Insurance Group (hereinafter referred to
as the Companies).
Two of the lawyers of the Unions then were Felipe Enaje and
Ramon Garcia; the latter was formerly the secretary-treasurer
of the FFW and acting president of the Insular Life/FGU unions
and the Insular Life Building Employees Association. Garcia,
as such acting president, in a circular issued in his name and
signed by him, tried to dissuade the members of the Unions
from disaffiliating with the FFW and joining the National
Association of Trade Unions (NATU), to no avail.
Enaje and Garcia soon left the FFW and secured employment
with the Anti-Dummy Board of the Department of Justice.
Thereafter, the Companies hired Garcia in the latter part of
1956 as assistant corporate secretary and legal assistant in
their Legal Department. Enaje was hired as personnel
manager of the Companies, and was likewise made chairman
of the negotiating panel for the Companies in the collective
bargaining with the Unions.
Unions jointly submitted proposals to the Companies;
negotiations were conducted on the Union’s proposals, but
these were snagged by a deadlock on the issue of union shop,
as a result of which the Unions filed on January 27, 1958 a
notice of strike for “deadlock on collective bargaining.” The
issue was dropped subsequently (in short, nagkasundo). But,
the parties negotiated on the labor demands but with no
satisfactory result due to a stalemate on the matter of salary
increases.
Meanwhile, 87 unionists were reclassified as supervisors
without increase in salary nor in responsibility while
negotiations were going on in the Department of Labor after
the notice to strike was served on the Companies. These
employees resigned from the Unions.
On May 21, 1958 the Companies through their acting manager
and president, sent to each of the strikers a letter (exhibit A)
quoted verbatim as follows:
“We recognize it is your privilege both to strike and to conduct
picketing. However, if any of you would like to come back to
work voluntarily, you may:
1. Advise the nearest police officer or security guard of
your intention to do so.
2. Take your meals within the office.
3. Make a choice whether to go home at the end of the
day or to sleep nights at the office where comfortable cots
have been prepared.
4. Enjoy free coffee and occasional movies.
murallos • david • Mendoza, s | 29
5. Be paid overtime for work performed in excess of
eight hours.
6. Be sure arrangements will be made for your families.
The decision to make is yours — whether you still believe in
the motives of the strike or in the fairness of the Management.”
Unions, however, continued on strike, with the exception of a
few unionists who were convinced to desist by the aforesaid
letter From the date the strike was called on May 21, 1958,
until it was called off on May 31, 1958, some management
men tried to break thru the Unions’ picket lines xxx succeeded
in penetrating the picket lines in front of the Insular Life
Building, thus causing injuries to the picketers and also to the
strike-breakers due to the resistance offered by some
picketers.
Alleging that some non-strikers were injured and with the use
of photographs as evidence, the Companies then filed criminal
charges against the strikers with the City Fiscal’s Office of
Manila.xxx
Another letter was sent by the company to the individual
strikers: The first day of the strike was last 21 May 1958.
“Our position remains unchanged and the strike has made us
even more convinced of our decision.
We do not know how long you intend to stay out, but we
cannot hold your positions open for long. We have continued to
operate and will continue to do so with or without you.
If you are still interested in continuing in the employ of the
Group Companies, and if there are no criminal charges
pending against you, we are giving you until 2 June 1958 to
report for work at the home office. If by this date you have not
yet reported, we may be forced to obtain your replacement.
Before, the decisions was yours to make. So it is now.”
Incidentally, all of the more than 120 criminal charges filed
against the members of the Unions, except 3, were dismissed
by the fiscal’s office and by the courts. These three cases
involved “slight physical injuries” against one striker and “light
coercion” against two others.
At any rate, because of the issuance of the writ of preliminary
injunction against them as well as the ultimatum of the
Companies giving them until June 2, 1958 to return to their
jobs or else be replaced, the striking employees decided to call
off their strike and to report back to work on June 2, 1958.
However, before readmitting the strikers, the Companies
required them not only to secure clearances from the City
Fiscal’s Office of Manila but also to be screened by a
management committee among the members of which were
Enage and Garcia. The screening committee initially rejected
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
83 strikers with pending criminal charges. However, all non-
strikers with pending criminal charges which arose from the
breakthrough incident were readmitted immediately by the
Companies without being required to secure clearances from
the fiscal’s office. Subsequently, when practically all the strikers
had secured clearances from the fiscal’s office, the Companies
readmitted only some but adamantly refused readmission to 34
officials and members of the Unions who were most active in
the strike, on the ground that they committed “acts inimical to
the interest of the respondents,” without however stating the
specific acts allegedly committed. Some 24 of the above
number were ultimately notified months later that they were
being dismissed retroactively as of June 2, 1958 and given
separation pay checks computed under Rep. Act 1787, while
others (ten in number) up to now have not been readmitted
although there have been no formal dismissal notices given to
them.
CIR prosecutor filed a complaint for unfair labor practice
against the Companies under Republic Act 875. The complaint
specifically charged the Companies with (1) interfering with the
members of the Unions in the exercise of their right to
concerted action, by sending out individual letters to them
urging them to abandon their strike and return to work, with a
promise of comfortable cots, free coffee and movies, and paid
overtime, and, subsequently, by warning them that if they did
not return to work on or before June 2, 1958, they might be
replaced; and (2) discriminating against the members of the
Unions as regards readmission to work after the strike on the
basis of their union membership and degree of participation in
the strike.
ISSUE:
Whether or not respondent company is guilty of ULP
HELD:
YES
The act of an employer in notifying absent employees
individually during a strike following unproductive efforts at
collective bargaining that the plant would be operated the next
day and that their jobs were open for them should they want to
come in has been held to be an unfair labor practice, as an
active interference with the right of collective bargaining
through dealing with the employees individually instead of
through their collective bargaining representatives.
Although the union is on strike, the employer is still under
obligation to bargain with the union as the employees’
bargaining representative. Individual solicitation of the
employees or visiting their homes, with the employer or his
representative urging the employees to cease union activity or
cease striking, constitutes unfair labor practice. All the above-
detailed activities are unfair labor practices because they tend
to undermine the concerted activity of the employees, an
murallos • david • Mendoza, s | 30
activity to which they are entitled free from the employer’s
molestation.
Indeed, when the respondents offered reinstatement and
attempted to “bribe” the strikers with “comfortable cots,” “free
coffee and occasional movies,” “overtime” pay for “work
performed in excess of eight hours,” and “arrangements” for
their families, so they would abandon the strike and return to
work, they were guilty of strike-breaking and/or union-busting
and, consequently, of unfair labor practice. It is equivalent to an
attempt to break a strike for an employer to offer reinstatement
to striking employees individually, when they are represented
by a union, since the employees thus offered reinstatement are
unable to determine what the consequences of returning to
work would be.
ULP also: (super short cut na to) Hiring of Enage and Garcia
with attractive compensations; respondents reclassified 87
employees as supervisors without increase in salary or in
responsibility, in effect compelling these employees to resign
from their unions; respondents, thru their president and
manager, respondent Jose M. Olbes, brought three truckloads
of non-strikers and others, escorted by armed men, who,
despite the presence of eight entrances to the three buildings
occupied by the Companies, entered thru only one gate less
than two meters wide and in the process, crashed thru the
picket line posted in front of the premises of the Insular Life
Building. This resulted in injuries on the part of the picketers
and the strike-breakers; respondents brought against the
picketers criminal charges, only three of which were not
dismissed, and these three only for slight misdemeanors. As a
result of these criminal actions, the respondents were able to
obtain an injunction from the court of first instance restraining
the strikers from stopping, impeding, obstructing, etc. the free
and peaceful use of the Companies’ gates, entrance and
driveway and the free movement of persons and vehicles to
and from, out and in, of the Companies’ buildings.
Verily, the above actuations of the respondents before and
after the issuance of the letters, exhibit A and B, yield the clear
inference that the said letters formed of the respondents
scheme to preclude if not destroy unionism within them.
II. The respondents did not merely discriminate against all the
strikers in general. They separated the active from the less
active unionists on the basis of their militancy, or lack of it, on
the picket lines. Unionists belonging to the first category were
refused readmission even after they were able to secure
clearances from the competent authorities with respect to the
criminal charges filed against them.
It is noteworthy that — perhaps in an anticipatory effort to
exculpate themselves from charges of discrimination in the
readmission of strikers returning to work — the respondents
delegated the power to readmit to a committee.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
III. Anent the third assignment of error, the record shows that
not a single dismissed striker was given the opportunity to
defend himself against the supposed charges against him. As
earlier mentioned, when the striking employees reported back
for work on June 2, 1958, the respondents refused to readmit
them unless they first secured the necessary clearances; but
when all, except three, were able to secure and subsequently
present the required clearances, the respondents still refused
to take them back.
Indeed, the individual cases of dismissed officers and
members of the striking unions do not indicate sufficient basis
for dismissal.
SIMEON DE LEON, et al., petitioners, vs . NATIONAL
LABOR RELATIONS COMMISSION (NLRC), and FORTUNE
TOBACCO CORPORATION and/or MAGNUM INTEGRATED
SERVICES, INC. (formerly FORTUNE INTEGRATED
SERVICES, INC.), respondents.
PUNO, J:
Facts:
On August 23, 1980, Fortune Tobacco Corporation (FTC) and
Fortune Integrated Services, Inc. (FISI) entered into a contract
for security services where the latter undertook to provide
security guards for the protection and security of the former.
The petitioners were among those engaged as security guards
pursuant to the contract.
On February 1, 1991, the incorporators and stockholders of
FISI sold out lock, stock and barrel to a group of new
stockholders by executing for the purpose a "Deed of Sale of
Shares of Stock". On the same date, the Articles of
Incorporation of FISI was amended changing its corporate
name to Magnum Integrated Services, Inc. (MISI). A new by-
laws was likewise adopted and approved by the Securities and
Exchange Commission on June 4, 1993.
On October 15, 1991, FTC terminated the contract for security
services which resulted in the displacement of some five
hundred eighty two (582) security guards assigned by
FISI/MISI to FTC, including the petitioners in this case. FTC
engaged the services of two (2) other security agencies, Asian
Security Agency and Ligalig Security Services, whose security
guards were posted on October 15, 1991 to replace FISI's
security guards.
Sometime in October 1991, the Fortune Tobacco Labor Union,
an affiliate of the National Federation of Labor Unions
(NAFLU), and claiming to be the bargaining agent of the
security guards, sent a Notice of Strike to FISI/MISI. On
November 14, 1991, the members of the union which include
petitioners picketed the premises of FTC. The Regional Trial
Court of Pasig, however, issued a writ of injunction to enjoin
the picket. On November 29, 1991, Simeon de Leon, together
murallos • david • Mendoza, s | 31
with sixteen (16) other complainants instituted the instant case
before the Arbitration Branch of the NLRC.
PETITIONERS: alleged that they were regular employees of
FTC which was also using the corporate names Fortune
Integrated Services, Inc. and Magnum Integrated Services, Inc.
They were assigned to work as security guards at the
company's main factory plant, its tobacco redrying plant and
warehouse. They averred that they performed their duties
under the control and supervision of FTC's security
supervisors. Their services, however, were severed in October
1991 without valid cause and without due process. Petitioners
claimed that their dismissal was part of respondents' design to
bust their newly-organized union which sought to enforce their
rights under the Labor Standards law.
RESPONDENT FTC: maintained that there was no employer-
employee relationship between FTC and petitioners.
It said that at the time of the termination of their services,
petitioners were the employees of MISI which was a separate
and distinct corporation from FTC. Hence, petitioners had no
cause of action against FTC.
RESPONDENT FISI: denied the charge of illegal dismissal and
unfair labor practice.
It argued that petitioners were not dismissed from service but
were merely placed on floating status pending re-assignment
to other posts. It alleged that the temporary displacement of
petitioners was not due to its fault but was the result of the
pretermination by FTC of the contract for security services.
LA: respondents liable for the charges. Rejecting FTC's
argument that there was no employer-employee relationship
between FTC and petitioners, he ruled that FISI and FTC
should be considered as a single employer.
He observed that not long after the stockholders of FISI sold all
their stocks to a new set of stockholders, FTC, terminated the
contract of security services and engaged the services of two
other security agencies. FTC did not give any reason for the
termination of the contract. The Labor Arbiter gave credence to
petitioners' theory that respondents' precipitate termination of
their employment was intended to bust their union.
On Appeal, NLRC: reversed and set aside the decision of the
Labor Arbiter.
First, it held that the Labor Arbiter erred in applying the "single
employer" principle and concluding that there was an
employer-employee relationship between FTC and FISI on one
hand, and petitioners on the other hand. It found that at the
time of the termination of the contract of security services on
October 15, 1991, FISI which, at that time, had been renamed
Magnum Integrated Services, Inc. had a different set of
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
stockholders and officers from that of FTC. They also had
separate offices. The NLRC held that the principle of "single
employer" and the doctrine of piercing the corporate veil could
not apply under the circumstances.
It further ruled that the proximate cause for the displacement of
petitioners was the termination of the contract for security
services by FTC on October 15, 1991. FISI could not be
faulted for the severance of petitioners' assignment at the
premises of FTC. Consequently, the NLRC held that the
charge of illegal dismissal had no basis. As regards the charge
of unfair labor practice, the NLRC found that petitioners who
had the burden of proof failed to adduce any evidence to
support their charge of unfair labor practice against
respondents.
Issue:
WON respondents were guilty of Unfair Labor Practice
Held:
An examination of the facts of this case reveals that there is
sufficient ground to conclude that respondents were guilty of
interfering with the right of petitioners to self-organization which
constitutes unfair labor practice under Article 248 of the Labor
Code. 8 Petitioners have been employed with FISI since the
1980s and have since been posted at the premises of FTC —
its main factory plant, its tobacco redrying plant and
warehouse. It appears from the records that FISI, while having
its own corporate identity, was a mere instrumentality of FTC,
tasked to provide protection and security in the company
premises. The records show that the two corporations had
identical stockholders and the same business address. FISI
also had no other clients except FTC and other companies
belonging to the Lucio Tan group of companies. Moreover, the
early payslips of petitioners show that their salaries were
initially paid by FTC.
To enforce their rightful benefits under the laws on Labor
Standards, petitioners formed a union which was later certified
as bargaining agent of all the security guards. On February 1,
1991, the stockholders of FISI sold all their participation in the
corporation to a new set of stockholders which renamed the
corporation Magnum Integrated Services, Inc. On October 15,
1991, FTC, without any reason, preterminated its contract of
security services with MISI and contracted two other agencies
to provide security services for its premises. This resulted in
the displacement of petitioners. As MISI had no other clients, it
failed to give new assignments to petitioners. Petitioners have
remained unemployed since then. All these facts indicate a
concerted effort on the part of respondents to remove
petitioners from the company and thus abate the growth of the
union and block its actions to enforce their demands in
accordance with the Labor Standards laws.
murallos • david • Mendoza, s | 32
We are not persuaded by the argument of respondent FTC
denying the presence of an employer-employee relationship.
We find that the Labor Arbiter correctly applied the doctrine of
piercing the corporate veil to hold all respondents liable for
unfair labor practice and illegal termination of petitioners'
employment. It is a fundamental principle in corporation law
that a corporation is an entity separate and distinct from its
stockholders and from other corporations to which it is
connected. However, when the concept of separate legal entity
is used to defeat public convenience, justify wrong, protect
fraud or defend crime, the law will regard the corporation as an
association of persons, or in case of two corporations, merge
them into one. The separate juridical personality of a
corporation may also be disregarded when such corporation is
a mere alter ego or business conduit of another person.
In the case at bar, it was shown that FISI was a mere adjunct
of FTC. FISI, by virtue of a contract for security services,
provided FTC with security guards to safeguard its premises.
However, records show that FISI and FTC have the same
owners and business address, and FISI provided security
services only to FTC and other companies belonging to the
Lucio Tan group of companies. The purported sale of the
shares of the former stockholders to a new set of stockholders
who changed the name of the corporation to Magnum
Integrated Services, Inc. appears to be part of a scheme to
terminate the services of FISI's security guards posted at the
premises of FTC and bust their newly-organized union which
was then beginning to become active in demanding the
company's compliance with Labor Standards laws. Under
these circumstances, the Court cannot allow FTC to use its
separate corporate personality to shield itself from liability for
illegal acts committed against its employees. Thus, we find that
the termination of petitioners' services was without basis and
therefore illegal.
Hacienda Fatima vs. National Federation of
Sugarcane Workers-Food and General Trade
G.R. No. 149440, 28 January 2003
Prince Transport, Inc. vs. Garcia, et al. G.R. No.
167291, 12 January 2011
FACTS:
Respondents alleged in their respective position papers and
other related pleadings that they were employees of Prince
Transport, Inc. (PTI), a company engaged in the business of
transporting passengers by land; respondents were hired
either as drivers, conductors, mechanics or inspectors, except
for respondent Diosdado Garcia (Garcia), who was assigned
as Operations Manager; in addition to their regular monthly
income, respondents also received commissions equivalent to
8 to 10% of their wages; sometime in October 1997, the said
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
commissions were reduced to 7 to 9%; this led respondents
and other employees of PTI to hold a series of meetings to
discuss the protection of their interests as employees; these
meetings led petitioner Renato Claros, who is the president of
PTI, to suspect that respondents are about to form a union; he
made known to Garcia his objection to the formation of a
union; in December 1997, PTI employees requested for a cash
advance, but the same was denied by management which
resulted in demoralization on the employees' ranks; later, PTI
acceded to the request of some, but not all, of the employees;
the foregoing circumstances led respondents to form a union
for their mutual aid and protection; in order to block the
continued formation of the union, PTI caused the transfer of all
union members and sympathizers to one of its sub-companies,
Lubas Transport (Lubas); despite such transfer, the schedule
of drivers and conductors, as well as their company
identification cards, were issued by PTI; the daily time records,
tickets and reports of the respondents were also filed at the
PTI office; and, all claims for salaries were transacted at the
same office; later, the business of Lubas deteriorated because
of the refusal of PTI to maintain and repair the units being used
therein, which resulted in the virtual stoppage of its operations
and respondents' loss of employment.
Petitioners, on the other hand, denied the material allegations
of the complaints contending that herein respondents were no
longer their employees, since they all transferred to Lubas at
their own request; petitioners have nothing to do with the
management and operations of Lubas as well as the control
and supervision of the latter's employees; petitioners were not
aware of the existence of any union in their company and
came to know of the same only in June 1998 when they were
served a copy of the summons in the petition for certification
election filed by the union; that before the union was registered
on April 15, 1998, the complaint subject of the present petition
was already filed; that the real motive in the filing of the
complaints was because PTI asked respondents to vacate the
bunkhouse where they (respondents) and their respective
families were staying because PTI wanted to renovate the
same.
DECISION OF LA:
• Dismissing the complaints for Unfair Labor Practice
• Dismissing the complaint for illegal dismissal against
the respondents Prince Transport, Inc. and/or Prince Transport
Phils. Corporation,
The Labor Arbiter ruled that petitioners are not guilty of unfair
labor practice in the absence of evidence to show that they
violated respondents right to self-organization. The Labor
Arbiter also held that Lubas is the respondents employer and
that it (Lubas) is an entity which is separate, distinct and
independent from PTI. Nonetheless, the Labor Arbiter found
that Lubas is guilty of illegally dismissing respondents from
their employment.
murallos • david • Mendoza, s | 33
NLRC: RULED IN FAVOR OF PETITIONERS
CA: ruled that petitioners are guilty of unfair labor practice; that
Lubas is a mere instrumentality, agent conduit or adjunct of
PTI; and that petitioners act of transferring respondents
employment to Lubas is indicative of their intent to frustrate the
efforts of respondents to organize themselves into a union.
ISSUE:
WON the petitioners are guilty of Unfair labor practice
Held:
Yes.
As to whether petitioners are guilty of unfair labor practice, the
Court finds no cogent reason to depart from the findings of the
CA that respondents transfer of work assignments to Lubas
was designed by petitioners as a subterfuge to foil the formers
right to organize themselves into a union. Under Article 248 (a)
and (e) of the Labor Code, an employer is guilty of unfair labor
practice if it interferes with, restrains or coerces its employees
in the exercise of their right to self-organization or if it
discriminates in regard to wages, hours of work and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization.
Indeed, evidence of petitioners' unfair labor practice is shown
by the established fact that, after respondents' transfer to
Lubas, petitioners left them high and dry insofar as the
operations of Lubas was concerned. The Court finds no error
in the findings and conclusion of the CA that petitioners
withheld the necessary financial and logistic support such as
spare parts, and repair and maintenance of the transferred
buses until only two units remained in running condition. This
left respondents virtually jobless.
T & H Shopfitters Corp./Gin Queen Corp. v. T &
H Shopfitters Corp./Gin Queen Workers Union
Facts:
The T&H Shopfitters Corporation/Gin Queen Corporation
workers union (THS-GQ Union) and Elpidio Zaldivar, Darios
Gonzales, William Domingo, Bobby Castillo, Jimmy M. Pascua,
Germano M. Bajo, Rico L. Manzano, Allan L. Callorina, 6
Romeo Blanco, Gilbert M. Garcia, Carlos F. Gerillo, Eduardo A.
Grande, Edilbrando Marticio, Vivencio Susano, Rolando
Garcia, Jr., Michael Fababier, Rowell Madriaga, Presnil
Tolentino, Marvin Ventura, Francisco Rivares, Placido
Petitioners sponsored a field trip to Iba, Zambales, for its
Tolentino, and Rolando Romero (respondents), all of whom are
employees. The officers and members of the THS-GQ Union
officers and/or members of THS-GQ union, filed their
were purportedly excluded from the field trip. On the evening of
Complaint for Unfair Labor Practice (ULP) by way of union
the field trip, a certain Angel Madriaga, a sales officer of
busting, and Illegal Lockout, with moral and exemplary
petitioners, campaigned against the union in the forthcoming
damages and attorney's fees, against T&H Shopfitters
certification election. The following day the employees were
Corporation (T&H Shopfitters) and Gin Queen Corporation (Gin
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Queen) (collectively referred to as "petitioners"), before the
Labor Arbiter (LA).
Respondents treated T&H Shopfitters and Gin Queen as a
single entity and their sole employer. In their desire to improve
their working conditions, respondents and other employees of
petitioners held their first formal meeting discuss the formation
of a union. The following day, seventeen (17) employees were
barred from entering petitioners' factory premises located in
Castillejos, Zambales, and ordered to transfer to T&H
Shopfitters' warehouse at Subic Bay Freeport Zone (SBFZ)
purportedly because of its expansion. Afterwards, the said
seventeen (17) employees were repeatedly ordered to go on
forced leave due to the unavailability of work.
The Department of Labor and Employment (DOLE), Regional
Office No. III issued a certificate of registration in favor of THS-
GQ Union.
Respondents contended that the affected employees were not
given regular work assignments, while subcontractors were
continuously hired to perform their functions. This development
prompted respondents to seek the assistance of the National
Conciliation and Mediation Board. Subsequently, an agreement
between petitioners and THS-GQ Union was reached.
Petitioners agreed to give priority to regular employees in the
distribution of work assignments. Respondents averred,
however, that petitioners never complied with its commitment
but instead hired contractual workers.
THS-GQ Union filed a petition for certification election. On July
12, 2004, an order was issued to hold the certification election
in both T&H Shopfitters and Gin Queen. Eventually, the
certification election was scheduled on October 11, 2004.
Meanwhile, through a memorandum, petitioner Ben Huang
(Huang), Director for Gin Queen, informed its employees of the
expiration of the lease contract between Gin Queen and its
lessor in Castillejos, Zambales and announced the relocation
of its office and workers to Cabangan, Zambales. Some of the
respondents, who visited the site in Cabangan, discovered that
it was a "talahiban" or grassland. Later, the said union officers
and members were made to work as grass cutters in
Cabangan, under the supervision of a certain Barangay
Captain Greg Pangan. Due to these circumstances, the
employees assigned in Cabangan did not report for work. As a
consequence, the THS-GQ Union president was made to
explain why he should not be terminated for insubordination.
The other employees who likewise failed to report in Cabangan
were meted out with suspension.
murallos • david • Mendoza, s | 34
escorted from the field trip to the polling center in Zambales to
cast their votes. the remaining employees situated at the SBFZ
plant cast their votes as well. Due to the heavy pressure
exerted by petitioners, the votes for "no union" prevailed. On
the THS-GQ Union filed its protest with respect to the
certification election proceedings.
Respondents averred that the following week after the
certification elections were held, petitioners retrenched THG-
GQ Union officers and members assigned at the Zambales
plant. Respondents claimed that the work weeks of those
employees in the SBFZ plant were drastically reduced to only
three (3) days in a month. In its defense, Gin Queen, claiming
that it is a corporation separate and distinct from T&H
Shopfitters, stressed that respondents were all employees. Gin
Queen claimed that due to the decrease in orders from its
customers, they had to resort to cost cutting measures to avoid
anticipated financial losses. Thus, it assigned work on a
rotational basis. It was of the impression that the employees,
who opposed its economic measures, were merely motivated
by spite in filing the complaint for ULP against it.
The LA dismissed respondents' complaint and all their money
claims for lack of merit. Aggrieved, respondents appealed to
the NLRC. In its July 24, 2007 Decision, the NLRC reversed
the LA decision and ruled in favor of respondents. Petitioners
filed a motion for reconsideration but the NLRC denied the
same. Dissatisfied with the adverse ruling, petitioners instituted
a petition for certiorari under Rule 65 of the Rules of Court
before the CA arguing grave abuse of discretion on the part of
the NLRC in reversing the LA decision.
Issue:
Whether or not ULP acts were committed by petitioners
against respondents
Held:
As to the issue of ULP, petitioners' argument is utterly without
merit.
In the case at bench, petitioners are being accused of
violations of paragraphs (a), (c), and (e) of Article 257 (formerly
Article 248) of the Labor Code,13 to wit:
Article 257. Unfair labor practices of employers. — It shall be
unlawful for an employer to commit any of the following unfair
labor practices:
(a) To interfere with, restrain or coerce employees in the
exercise of their right to self-organization;
xxx xxx xxx
(c) To contract out services or functions being performed by
union members when such will interfere with, restrain, or
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
coerce employees in the exercise of their right to self-
organization;
xxx xxx xxx
(e) To discriminate in regard to wages, hours of work, and
other terms and conditions of employment in order to
encourage or discourage membership in any labor
organization. . . .
In the case of Insular Life Assurance Co., Ltd. Employees
Association — NATU v. Insular Life Assurance Co. Ltd., 16 this
Court had occasion to lay down the test of whether an
employer has interfered with and coerced employees in the
exercise of their right to self-organization, that is, whether the
employer has engaged in conduct which, it may reasonably be
said, tends to interfere with the free exercise of employees'
rights; and that it is not necessary that there be direct evidence
that any employee was in fact intimidated or coerced by
statements of threats of the employer if there is a reasonable
inference that anti-union conduct of the employer does have an
adverse effect on self-organization and collective bargaining.
Indubitably, the various acts of petitioners, taken together,
reasonably support an inference that, indeed, such were all
orchestrated to restrict respondents' free exercise of their right
to self-organization. The Court is of the considered view that
petitioners' undisputed actions prior and immediately before
the scheduled certification election, while seemingly
innocuous, unduly meddled in the affairs of its employees in
selecting their exclusive bargaining representative. In Holy
Child Catholic School v. Hon. Patricia Sto. Tomas, the Court
ruled that a certification election was the sole concern of the
workers, save when the employer itself had to file the
petition . . ., but even after such filing, its role in the certification
process ceased and became merely a bystander. Thus,
petitioners had no business persuading and/or assisting its
employees in their legally protected independent process of
selecting their exclusive bargaining representative. The fact
and peculiar timing of the field trip sponsored by petitioners for
its employees not affiliated with THS-GQ Union, although a
positive enticement, was undoubtedly extraneous influence
designed to impede respondents in their quest to be certified.
This cannot be countenanced.
More importantly, petitioners' bare denial of some of the
complained acts and unacceptable explanations, a mere
afterthought at best, cannot prevail over respondents' detailed
narration of the events that transpired. At this juncture, it bears
to emphasize that in labor cases, the quantum of proof
necessary is substantial evidence, 18 or that amount of
relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise. In fine, mindful
of the nature of the charge of ULP, including its civil and/or
criminal consequences, the Court finds that the NLRC, as
murallos • david • Mendoza, s | 35
correctly sustained by the CA, had sufficient factual and legal declaring the unions draft CBA proposal as the collective
bases to support its finding of ULP. agreement which should govern the relationship between the
parties. Kiok Loy vs. NLRC is applicable in the instant case,
Divine World vs. Secretary of labor, 213 SCRA considering that the fact therein have also been indubitably
established in this case. These factors are: (a) the union is the
759 (1992)
duly certified bargaining agent; (b) it made a definite request to
bargain submitted its collective bargaining proposals, and (c)
FACTS:
the University made no further proposal whatsoever. As we
said in Kiok Loy v. NLRC, a company's refusal to make counter
Divine Word University Employees Union (DWUEU) is the sole
proposal if considered in relation to the entire bargaining
and bargaining agent of the Divine Word University. Sometime
process, may indicate bad faith and this is especially true
in 1985, DWUEU submitted its collective bargaining proposals.
where the Union's request for a counter proposal is left
The University replied and requested a preliminary conference
unanswered.
which unfortunately did not take place due to the alleged
withdrawal of the CBA proposals. Because of this, the union
"Moreover, the Court added in the same case that "it is not
filed a notice of strike on the grounds of bargaining deadlock
obligatory upon either side of a labor controversy to
and unfair labor practice. Then, an agreement between the
precipitately accept or agree to the proposal of the other. But
University and DWUEU-ALU were held after the filing of the
an erring party should not be tolerated and allowed with
notice of strike. DWUEU-ALU, consonant with the agreement,
impunity to resort to schemes feigning negotiations by going
submitted its collective bargaining proposals but were ignored
through empty gestures
by the University.

RATIO:
ISSUE:

Petitioner failed to show any justification for the Court to depart

WON the complaint for unfair labor practice filed by the Union
from the ruling of the appellate court.
is with merit.

Petitioner is guilty of violating Art. 250, and 252 of the Labor

HELD:
Code
YES. A thorough study of the records reveals that there was no
Art. 250. Procedure in collective bargaining.—The following
"reasonable effort at good faith bargaining" Especially on the
procedures shall be observed in collective bargaining: (a)
part of the University.
When a party desires to negotiate an agreement, it shall serve
a written notice upon the other party with a statement of its
Its indifferent towards collective bargaining inevitably resulted
proposals. The other party shall make a reply thereto not later
in the failure of the parties to arrive at an agreement. As it was
than ten (10) calendar days from receipt of such notice.
evident that unilateral moves were being undertaken only by
the DWUEU-ALU, there was no counteraction of forces or an
Art. 252. Meaning of duty to bargain collectively.—The duty to
impasse to speak of.
bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in
While collective bargaining should be initiated by the union,
good faith for the purpose of negotiating an agreement…
there is a corresponding responsibility on the part of the
employer to respond in some manner to such acts.
Petitioner violated Art. 250 by not filing any reply or counter
proposal when union submitted their proposals
This is a clear from the provisions of the Labor Code Art.
250(a) of which states:
Employees Union of Bayer Phils. Vs. Bayer
when a party desires to negotiate an agreement, it shall serve Philippines
a written notice upon the other party with a statement of its GR No. 162943, 06 Dec 2010
proposals. The other party shall make a reply thereto not later
than 10 calendar days from receipt of such notice.

Hence, petitioner's contention that the DWUEU-ALU's TABANGAO SHELL REFINERY EMPLOYEES
proposals may not be unilaterally imposed on it on the ground ASSOCIATION vs. PILIPINAS SHELL
that a collective bargaining agreement is a contract wherein
the consent of both parties is indispensable is devoid of merit.
PETROLEUM CORPORATION

A similar argument had already been disregarded in the case FACTS:

of Kiok Loy v. NLRC, where we upheld the order of the NLRC
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 36
On the parties’ 41st meeting, the company proposed the to resolve all matters within the dispute that gave rise to or
declaration of a deadlock and recommended that the help of a which arose out of the strike or lockout; it includes and extends
third party be sought. The union filed a Notice of Strike in the to all questions and controversies arising from or related to the
NCMB, alleging bad faith bargaining on the part of the dispute, including cases over which the labor arbiter has
company. The NCMB immediately summoned the parties for exclusive jurisdiction.
the mandatory conciliation-mediation proceedings but the
parties failed to reach an amicable settlement. The DOLE-Sec SALUNGA vs. COURT OF INDUSTRIAL
assumed jurisdiction over the dispute of the parties. The RELATIONS
Secretary ruled that the company is not guilty of bargaining in
bad faith and also proceeded to decide on the matter of the
FACTS:
wage increase and other economic issues of the new CBA.
Salunga was a member of the Union since 1953, and an
The union questioned the Secretary’s assumption of
employee of the company since 1948. However, when he
jurisdiction over the labor dispute between the union and the
tendered resignation from the Union, the Union then informed
company on the ground that the “Secretary erred in assuming
the company that resignation from such would result in his
jurisdiction over the ‘CBA’ case when it is not the subject
termination from the company as well. Salunga then revoked
matter of the notice of strike” because the case was “all about
his resignation from the Union upon knowing, advising them to
‘ULP’ in the form of bad faith bargaining.” For the union, the
continue to deduct fees from his salary. However, the Union
DOLE-Sec should not have touched the issue of the CBA as
continued to say that Salunga’s membership could no longer
there was no CBA deadlock at that time, and should have
be reinstated. Thus, Salunga sought the intention of PAFLU’s
limited the assumption of jurisdiction to the charge of unfair
national president, to which the Union was affiliated, for a
labor practice for bargaining in bad faith.
review of the Union’s actions. But the president declined,
stating that they did not find any ground to review such. Thus,
ISSUE:
his termination will take effect. Then, a prosecutor of the Court
of Industrial Relations insisted that Salunga proceed to file
Whether or not the Secretary of Labor and Employment’s
against the Union for unfair labor practice. Thus, this petition.
assumption of jurisdiction is limited to the subject of strike.
ISSUE:
HELD:
W/N the Company is guilty of unfair labor practice.
No. The labor dispute between the union and the company
concerned the unresolved matters between the parties in
HELD:
relation to their negotiations for a new CBA. The power of the
DOLE-Sec to assume jurisdiction over this dispute includes
NO. The company was not guilty at all as it was even reluctant
and extends to all questions and controversies arising from the
—if not unwilling—to discharge Salunga. When the Union first
said dispute, such as, but not limited to the union’s allegation
informed it of the petitioner’s resignation and urged the
of bad faith bargaining. It also includes and extends to the
implementation of its removal, the company even advised
various unresolved provisions of the new CBA such as
Salunga to withdraw his resignation from the Union to be able
compensation, particularly the matter of annual wage increase
to keep his employment. To reiterate, the company found it to
or yearly lump sum payment in lieu of such wage increase,
be unfair for Salunga to be treated such.
whether or not there was deadlock in the negotiations.

As there is already an existing controversy on the matter of

wage increase, the DOLE-Sec need not wait for a deadlock in
the negotiations to take cognizance of the matter. That is the
significance of the power of the DOLE-Sec under Article 263(g)
of the Labor Code to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry
indispensable to the national interest. Article 263(g) is both an
extraordinary and a preemptive power to address an
extraordinary situation – a strike or lockout in an industry
indispensable to the national interest. This grant is not limited
to the grounds cited in the notice of strike or lockout that may
have preceded the strike or lockout; nor is it limited to the
incidents of the strike or lockout that in the meanwhile may
have taken place. As the term “assume jurisdiction” connotes,
the intent of the law is to give the Labor Secretary full authority
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
MANILA MANDARIN EMPLOYEES UNION,
petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, and MELBA C. BELONCIO,
respondents.
FACTS
Private respondent, Melba C. Beloncio, an employee of Manila
Mandarin Hotel since 1976 and at the time of her dismissal,
assistant head waitress at the hotel's coffee shop, was
expelled from the petitioner Manila Mandarin Employees Union
for acts allegedly inimical to the interests of the union. The
union demanded the dismissal from employment of Beloncio
on the basis of the union security clause of their collective
murallos • david • Mendoza, s | 37
bargaining agreement and the Hotel acceded by placing
Beloncio on forced leave effective August 10, 1984.
The union security clause of the collective bargaining
agreement provides: Section 2. Dismissals.b) Members of the
Union who cease to be such members and/or who fail to
maintain their membership in good standing therein by reason
of their resignation from the Union and/or by reason of their
expulsion from the Union in accordance with the Constitution
and By-Laws of the Union, for non-payment of union dues and
other assessment for organizing, joining or forming another
labor organization shall, upon written notice of such cessation
of membership or failure to maintain membership in the Union
and upon written demand to the company by the Union, be
dismissed from employment by the Company after complying
with the requisite due process requirement; ...
Two days before the effective date of her forced leave or on
August 8, 1984, Beloncio filed a complaint for unfair labor
practice and illegal dismissal against herein petitioner-union
and Manila Mandarin Hotel Inc. before the NLRC, Arbitration
Branch.
Petitioner-union filed a motion to dismiss on grounds that the
complainant had no cause of action against it and the NLRC
had no jurisdiction over the subject matter of the complaint.
This motion was denied by the Labor Arbiter. After the hearings
that ensued and the submission of the parties' respective
position papers, the Labor Arbiter held that the union was guilty
of unfair labor practice when it demanded the separation of
Beloncio. The union was then ordered to pay all the wages and
fringe benefits due to Beloncio from the time she was on forced
leave until actual reinstatement, and to pay P30,000.00 as
exemplary damages and P10,000.00 as attorney's fees. The
charge against the hotel was dismissed. The Union then
appealed to the respondent NLRC which modified the Labor
Arbiter's decision as earlier stated.A subsequent motion for
reconsideration and a second motion for reconsideration were
denied. Hence, this present petition.
ISSUE:
WON THE RESPONDENT ERRED IN ITS DECISION that the
present controversy involved an intra-union conflicts which it
must have jurisdiction?
HELD:
NO. The dispute is not purely intra-union but involves an
interpretation of the collective bargaining agreement (CBA)
provisions and whether or not there was an illegal dismissal.
Under the CBA, membership in the union may be lost through
expulsion only if there is non-payment of dues or a member
organizes, joins, or forms another labor organization. The
charge of disloyalty against Beloncio arose from her emotional
remark to a waitress who happened to be a union steward,
"Wala akong tiwala sa Union ninyo." The remark was made in
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
the course of a heated discussion regarding Beloncio's efforts
to make a lazy and recalcitrant waiter adopt a better attitude
towards his work.
The Court finds nothing in the records that indicates reversible
error, much less grave abuse of discretion, in the NLRC's
findings of facts.It is a well-settled principle that findings of
facts quasi-judicial agencies like the NLRC, which have
acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect but at
times even finality if such findings are supported by substantial
evidence. (Akay Printing Press vs. Minister of Labor and
Employment, 140 SCRA 381; Alba Patio de Makati vs. Alba
Patio de Makati Employees Association, 128 SCRA 253;
Dangan vs. National Labor Relations Commission, 127 SCRA
706; De la Concepcion vs. Mindanao Portland Cement
Corporation, 127 SCRA 647).
The petitioner now questions the decision of the National Labor
Relations Commission ordering the reinstatement of the private
respondent and directing the Union to pay the wages and
fringe benefits which she failed to receive as a result of her
forced leave and to pay attorney's fees.
We find no error in the questioned decision.The Hotel would
not have compelled Beloncio to go on forced leave were it not
for the union's insistence and demand to the extent that
because of the failure of the hotel to dismiss Beloncio as
requested, the union filed a notice of strike with the Ministry of
Labor and Employment on August 17, 1984 on the issue of
unfair labor practice. The hotel was then compelled to put
Beloncio on forced leave and to stop payment of her salary
from September 1, 1984.
Furthermore, as provided for in the collective bargaining
agreement between the petitioner-the Union and the Manila
Mandarin Hotel "the Union shall hold the Company free and
blameless from any and all liabilities that may arise" should the
employee question the dismissal, as has happened in the case
at bar.
The collective bargaining agreement in this case contains a
union security clause — a closed-shop agreement.A closed-
shop agreement is an agreement whereby an employer binds
himself to hire only members of the contracting union who
must continue to remain members in good standing to keep
their jobs. It is "the most prized achievement of unionism." It
adds membership and compulsory dues. By holding out to
loyal members a promise of employment in the closed-shop, it
welds group solidarity. (National Labor Union vs. Aguinaldo's
Echague, Inc., 97 Phil. 184). It is a very effective form of union
security agreement.
WHEREFORE, the petition is hereby DISMISSED
General Santos Coca-cola Plant Free Workers
Union-TUPAS vs. Coca- Cola Botters
murallos • david • Mendoza, s | 38
FACTS:
Sometime in the late 1990s, CCBPI experienced a significant
decline in profitability due to the Asian economic crisis,
decrease in sales, and tougher competition. To curb the
negative effects on the company, it implemented three waves
of an Early Retirement Program and also there was an inter-
office memorandum mandating to put on hold all requests for
hiring to fill in vacancies in both regular and temporary
positions in Head Office and in the Plants. This prompted
petitioner to negotiate with the Labor Management Committee
for filling up the vacancies with permanent employees. No
resolution was reached on the matter. Faced with the freeze
hiring directive, CCBPI Gen San engaged the services of JLBP
Services Corporation, a company in the business of providing
labor and manpower services, including janitorial services,
messengers, and office workers to various private and
government offices.
unfair labor practice as this was not directed at the members’
right to self-organization.
Both the NLRC and the CA found that petitioner was unable to
prove its charge of unfair labor practice. It was the Union that
had the burden of adducing substantial evidence to support its
allegations of unfair labor practice, which burden it failed to
discharge.
WHEREFORE, the foregoing premises considered, the Petition
is DENIED. The assailed Decision and Resolution of the Court
of Appeals are AFFIRMED.
Manila Mining Corp. Employees Association, et
al. vs. Manila Mining corp, et al.
G.R. Nos. 178222-23, 29 September 2010
Facts:

Petitioner then filed with the National Conciliation and

Respondent Manila Mining Corporation (MMC) is a publicly-
Mediation Board a Notice of Strike on the ground of alleged
listed corporation engaged in large-scale mining for gold and
unfair labor practice committed by CCBPI Gen San for
copper ore. MMC is required by law to maintain a tailings
contracting-out services regularly performed by union
containment facility to store the waste material generated by its
members. The Secretary of Labor issued an order enjoining
mining operations. Consequently, MMC constructed several
the threatened strike and certifying the dispute to the NLRC
tailings dams to treat and store its waste materials. One of
for compulsory arbitration. The NLRC ruled that CCBPI was
these dams was Tailings Pond No. 7 (TP No. 7), which was
not guilty of unfair labor practice for contracting out jobs to
constructed in 1993 and was operated under a permit issued
JLBP. Petitioner filed a motion for reconsideration which the
by the Department of Environment and Natural Resources
NLRC denied. The CA also denied the petition for certiorari as
(DENR), through its Environmental Management Bureau
well as the motion for reconsideration. Hence, this petition.
(EMB) in Butuan City, Agusan del Norte.[3]

ISSUE:
On 10 January 2000, eleven (11) rank-and-file employees of
MMC, who later became complainants before the labor arbiter,
WON the act of contracting-out services from JLBP constitutes
attended the organizational meeting of MMC-Makati
unfair labor practices.
Employees Association-Federation of Free Workers Chapter
(Union). On 3 March 2000, the Union filed with the Department
HELD:
of Labor and Employment (DOLE) all the requirements for its
registration. The Union acquired its legitimate registration
The petition is bereft of merit. Hence, the Court deny the
status on 30 March 2000. Subsequently, it submitted letters to
Petition.
MMC relating its intention to bargain collectively. On 11 July
2001, the Union submitted its Collective Bargaining Agreement
The issues raised by petitioner of whether JLBP is an
(CBA) proposal to MMC.
independent contractor, whether CCBPI’s contracting-out of
jobs to JLBP amounted to unfair labor practice, and whether
Upon expiration of the tailings permit on 25 July 2001, DENR-
such action was a valid exercise of management prerogative,
EMB did not issue a permanent permit due to the inability of
call for a re-examination of evidence, which is not within the
MMC to secure an Environmental Compliance Certificate
ambit of this Court’s jurisdiction.
(ECC). An essential component of an ECC is social
acceptability or the consent of the residents in the community
The CA squarely addressed the issue of job contracting in its
to allow TP No. 7 to operate, which MMC failed to obtain.[4]
assailed Decision and Resolution. The CA itself examined the
Hence, it was compelled to temporarily shut down its mining
facts and evidence of the parties and found that, based on the
operations, resulting in the temporary lay-off of more than 400
evidence, CCBPI did not engage in labor-only contracting and,
employees in the mine site.
therefore, was not guilty of unfair labor practice.
On 30 July 2001, MMC called for the suspension of
The NLRC found – and the same was sustained by the CA –
negotiations on the CBA with the Union until resumption of
that the company’s action to contract-out the services and
mining operations.[5]
functions performed by Union members did not constitute
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 39
Among the employees laid-off, complainants Samuel Zuiga,
Myrna Maquio, Doroteo Torre, Arsenio Mark Perez, Edmundo
Galvez, Diana Ruth Rellores, Jonathan Araneta, Teresita
Lagman, Reynaldo Anzures, Gerardo Opena, and Edwin
Tuazon, together with the Union filed a complaint before the
labor arbiter[6] on even date praying for reinstatement,
recognition of the Union as the sole and exclusive
representative of its rank-and-file employees, and payment of
moral and exemplary damages and attorneys fees.[7]
In their Position Paper,[8] complainants challenged the validity
of their lay-off on the averment that MMC was not suffering
from business losses. They alleged that MMC did not want to
bargain collectively with the Union, so that instead of
submitting their counterproposal to the CBA, MMC decided to
terminate all union officers and active members. Petitioners
questioned the timing of their lay-off, and alleged that first,
there was no showing that cost-cutting measures were taken
by MMC; second, no criteria were employed in choosing which
employees to lay-off; and third, the individuals laid-off were
those who signed the attendance sheet of the union
organizational meeting. Petitioners likewise claimed that they
were denied due process because they were not given a 30-
day notice informing them of the lay-off. Neither was the DOLE
informed of this lay-off, as mandated by law.[9]
Respondents justified the temporary lay-off as bona fide in
character and a valid management prerogative pending the
issuance of the permit to continuously operate TP No. 7.
The labor arbiter ruled in favor of MMC and held that the
temporary shutdown of the mining operation, as well as the
temporary lay-off of the employees, is valid.[10]
On appeal, the National Labor Relations Commission (NLRC)
modified the judgment of the labor arbiter and ordered the
payment of separation pay equivalent to one month pay for
every year of service. It ratiocinated that the temporary lay-off,
which exceeded more than six (6) months, had the effect of
severance of the employer-employee relationship.
Issue:
WON lay-off is illegal or can it be considered as unfair labor
practice.
HELD:
NEITHER
For a charge of unfair labor practice to prosper, it must be
shown that the employer was motivated by ill-will, bad faith or
fraud, or was oppressive to labor. The employer must have
acted in a manner contrary to morals, good customs, or public
policy causing social humiliation, wounded feelings or grave
anxiety. While the law makes it an obligation for the employer
and the employees to bargain collectively with each other, such
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
compulsion does not include the commitment to precipitately
accept or agree to the proposals of the other. All it
contemplates is that both parties should approach the
negotiation with an open mind and make reasonable effort to
reach a common ground of agreement.[22]
The Union based its contention on the letter request by MMC
for the suspension of the collective bargaining negotiations
until it resumes operations.[23] Verily, it cannot be said that
MMC deliberately avoided the negotiation. It merely sought a
suspension and in fact, even expressed its willingness to
negotiate once the mining operations resume. There was valid
reliance on the suspension of mining operations for the
suspension, in turn, of the CBA negotiation. The Union failed to
prove bad faith in MMCs actuations.
Even as we declare the validity of the lay-off, we cannot say
that MMC has no obligation at all to the laid-off employees. The
validity of its act of suspending its operations does not excuse
it from paying separation pay.
MMC seeks refuge in Article 286 which provides:
ART. 286. When employment not deemed terminated. ─ The
bona fide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months, or the
fulfillment by the employee of a military or civic duty shall not
terminate employment. In all such cases, the employer shall
reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not
later than one (1) month from the resumption of operations of
his employer or from his relief from the military or civic duty.
Article 286 of the Labor Code allows the bona fide suspension
of operations for a period not exceeding six (6) months. During
the suspension, an employee is not deemed terminated. As a
matter of fact, the employee is entitled to be reinstated once
the employer resumes operations within the 6-month period.
However, Article 286 is silent with respect to the rights of the
employee if the suspension of operations lasts for more than 6
months. Thus is bred the issue regarding the responsibility of
MMC toward its employees.
MMC subscribes to the view that for purposes of determining
employer responsibility, an employment should likewise not be
deemed terminated, should the suspension of operation go
beyond six (6) months as long as the continued suspension is
due, as in this case, to a cause beyond the control of the
employer.
The decision to suspend operation ultimately lies with the
employer, who in its desire to avert possible financial losses,
declares, as here, suspension of operations.
Article 283 of the Labor Code applies to MMC and it provides:
murallos • david • Mendoza, s | 40
 ARTICLE 283. Closure of establishment and reduction of
personnel. - The employer may also terminate the employment
of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking
unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof. In case of
termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or
to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses
and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1)
whole year.
Said provision is emphatic that an employee, who was
dismissed due to cessation of business operation, is entitled to
the separation pay equivalent to one (1) month pay or at least
one-half (1/2) month pay for every year of service, whichever is
higher. And it is jurisprudential that separation pay should also
be paid to employees even if the closure or cessation of
operations is not due to losses.
The Court is not impressed with the claim that actual severe
financial losses exempt MMC from paying separation benefits
to complainants. In the first place, MMC did not appeal the
decision of the Court of Appeals which affirmed the NLRCs
award of separation pay to complainants. MMCs failure had
the effect of making the awards final so that MMC could no
longer seek any other affirmative relief. In the second place,
the non-issuance of a permit forced MMC to permanently
cease its business operations, as confirmed by the Court of
Appeals. Under Article 283, the employer can lawfully close
shop anytime as long as cessation of or withdrawal from
business operations is bona fide in character and not impelled
by a motive to defeat or circumvent the tenurial rights of
employees, and as long as he pays his employees their
termination pay in the amount corresponding to their length of
service. The cessation of operations, in the case at bar is of
such nature. It was proven that MMC stopped its operations
precisely due to failure to secure permit to operate a tailings
pond. Separation pay must nonetheless be given to the
separated employees.
CERTIFICATION ELECTION
NATIONAL UNION OF WORKERS IN HOTELS,
RESTAURANTS AND ALLIED INDUSTRIES-
MANILA PAVILION HOTEL CHAPTER
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
vs.SECRETARY OF LABOR AND EMPLOYMENT,
BUREAU OF LABOR RELATIONS, HOLIDAY INN
MANILA PAVILION HOTEL LABOR UNION AND
ACESITE PHILIPPINES HOTEL CORPORATION
Facts:
A certification election was conducted on June 16, 2006 among
the rank-and-file employees of respondent Holiday Inn Manila
Pavilion Hotel (the Hotel) with the following results:
EMPLOYEES IN VOTERS’ LIST = 353
TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22
In view of the significant number of segregated votes,
contending unions, petitioner, NUHWHRAIN-MPHC, and
respondent Holiday Inn Manila Pavillion Hotel Labor Union
(HIMPHLU), referred the case back to Med-Arbiter Ma.
Simonette Calabocal to decide which among those votes
would be opened and tallied. Eleven (11) votes were initially
segregated because they were cast by dismissed employees,
albeit the legality of their dismissal was still pending before the
Court of Appeals. Six other votes were segregated because
the employees who cast them were already occupying
supervisory positions at the time of the election. Still five other
votes were segregated on the ground that they were cast by
probationary employees and, pursuant to the existing
Collective Bargaining Agreement (CBA), such employees
cannot vote. It bears noting early on, however, that the vote of
one Jose Gatbonton (Gatbonton), a probationary employee,
was counted.
By Order of August 22, 2006, Med-Arbiter Calabocal ruled for
the opening of 17 out of the 22 segregated votes, specially
those cast by the 11 dismissed employees and those cast by
the six supposedly supervisory employees of the Hotel.
Petitioner, which garnered 151 votes, appealed to the
Secretary of Labor and Employment (SOLE), arguing that the
votes of the probationary employees should have been opened
considering that probationary employee Gatbonton’s vote was
tallied. And petitioner averred that respondent HIMPHLU,
which garnered 169 votes, should not be immediately certified
as the bargaining agent, as the opening of the 17 segregated
ballots would push the number of valid votes cast to 338 (151 +
169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered
would be one vote short of the majority which would then
become 169.
By the assailed Resolution of January 22, 2007, the Secretary
of Labor and Employment (SOLE), through then Acting
Secretary Luzviminda Padilla, affirmed the Med-Arbiter’s
murallos • david • Mendoza, s | 41
Order. It held that pursuant to Section 5, Rule IX of the
Omnibus Rules Implementing the Labor Code on exclusion
and inclusion of voters in a certification election, the
probationary employees cannot vote, as at the time the Med-
Arbiter issued on August 9, 2005 the Order granting the
petition for the conduct of the certification election, the six
probationary employees were not yet hired, hence, they could
not vote.
The SOLE further held that, with respect to the votes cast by
the 11 dismissed employees, they could be considered since
their dismissal was still pending appeal.
As to the votes cast by the six alleged supervisory employees,
the SOLE held that their votes should be counted since their
promotion took effect months after the issuance of the above-
said August 9, 2005 Order of the Med-Arbiter, hence, they
were still considered as rank-and-file.
Respecting Gatbonton’s vote, the SOLE ruled that the same
could be the basis to include the votes of the other
probationary employees, as the records show that during the
pre-election conferences, there was no disagreement as to his
inclusion in the voters’ list, and neither was it timely challenged
when he voted on election day, hence, the Election Officer
could not then segregate his vote.
The SOLE further ruled that even if the 17 votes of the
dismissed and supervisory employees were to be counted and
presumed to be in favor of petitioner, still, the same would not
suffice to overturn the 169 votes garnered by HIMPHLU.
In fine, the SOLE concluded that the certification of HIMPHLU
as the exclusive bargaining agent was proper.
Petitioner’s motion for reconsideration having been denied by
the SOLE by Resolution of March 22, 2007, it appealed to the
Court of Appeals.
By the assailed Decision promulgated on November 8, 2007,
the appellate court affirmed the ruling of the SOLE. It held that,
contrary to petitioner’s assertion, the ruling in Airtime
Specialist, Inc. v. Ferrer Calleja5 stating that in a certification
election, all rank-and-file employees in the appropriate
bargaining unit, whether probationary or permanent, are
entitled to vote, is inapplicable to the case at bar. For, the
appellate court continued, the six probationary employees
were not yet employed by the Hotel at the time the August 9,
2005 Order granting the certification election was issued. It
thus held that Airtime Specialist applies only to situations
wherein the probationary employees were already employed
as of the date of filing of the petition for certification election.
Respecting Gatbonton’s vote, the appellate court upheld the
SOLE’s finding that since it was not properly challenged, its
inclusion could no longer be questioned, nor could it be made
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
the basis to include the votes of the six probationary
employees.
The appellate court brushed aside petitioner’s contention that
the opening of the 17 segregated votes would materially affect
the results of the election as there would be the likelihood of a
run-off election in the event none of the contending unions
receive a majority of the valid votes cast. It held that the
"majority" contemplated in deciding which of the unions in a
certification election is the winner refers to the majority of valid
votes cast, not the simple majority of votes cast, hence, the
SOLE was correct in ruling that even if the 17 votes were in
favor of petitioner, it would still be insufficient to overturn the
results of the certification election.
Petitioner’s motion for reconsideration having been denied by
Resolution of January 25, 2008, the present recourse was
filed.
Petitioner’s contention:
1. Inclusion of Jose Gatbonton’s vote but excluding the vote of
the six other probationary employees violated the principle of
equal protection and is not in accord with the ruling in Airtime
Specialists, Inc. v. Ferrer-Calleja;
2. The time of reckoning for purposes of determining when the
probationary employees can be allowed to vote is not August
9, 2005 – the date of issuance by Med-Arbiter Calabocal of the
Order granting the conduct of certification elections, but March
10, 2006 – the date the SOLE Order affirmed the Med-Arbiter’s
Order.
3. Even if the votes of the six probationary employees were
included, still, HIMPHLU could not be considered as having
obtained a majority of the valid votes cast as the opening of the
17 ballots would increase the number of valid votes from 321
to 338, hence, for HIMPHLU to be certified as the exclusive
bargaining agent, it should have garnered at least 170, not
169, votes.
Issue/s:
Whether employees on probationary status at the time of the
certification elections should be allowed to vote
Whether HIMPHLU was able to obtain the required majority for
it to be certified as the exclusive bargaining agent.
Ruling:
On the first issue, the Court rules in the affirmative.
The inclusion of Gatbonton’s vote was proper not because it
was not questioned but because probationary employees have
the right to vote in a certification election. The votes of the six
murallos • david • Mendoza, s | 42
other probationary employees should thus also have been
counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds:
In a certification election, all rank and file employees in the
appropriate bargaining unit, whether probationary or
permanent are entitled to vote. This principle is clearly stated in
Art. 255 of the Labor Code which states that the "labor
organization designated or selected by the majority of the
employees in an appropriate bargaining unit shall be the
exclusive representative of the employees in such unit for
purposes of collective bargaining." Collective bargaining covers
all aspects of the employment relation and the resultant CBA
negotiated by the certified union binds all employees in the
bargaining unit. Hence, all rank and file employees,
probationary or permanent, have a substantial interest in 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 certification election. The law
refers to "all" the employees in the bargaining unit. All they
need to be eligible to support the petition is to belong to the
"bargaining unit."
As to whether HIMPHLU should be certified as the exclusive
bargaining agent, the Court rules in the negative. It is well-
settled that under the so-called "double majority rule," for there
to be a valid certification election, majority of the bargaining
unit must have voted AND the winning union must have
garnered majority of the valid votes cast.
Prescinding from the Court’s ruling that all the probationary
employees’ votes should be deemed valid votes while that of
the supervisory employees should be excluded, it follows that
the number of valid votes cast would increase – from 321 to
337. Under Art. 256 of the Labor Code, the union obtaining the
majority of the valid votes cast by the eligible voters shall be
certified as the sole and exclusive bargaining agent of all the
workers in the appropriate bargaining unit. This majority is 50%
+ 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes.
Clearly, HIMPHLU was not able to obtain a majority vote. The
position of both the SOLE and the appellate court that the
opening of the 17 segregated ballots will not materially affect
the outcome of the certification election as for, so they contend,
even if such member were all in favor of petitioner, still,
HIMPHLU would win, is thus untenable.
It bears reiteration that the true importance of ascertaining the
number of valid votes cast is for it to serve as basis for
computing the required majority, and not just to determine
which union won the elections. The opening of the segregated
but valid votes has thus become material. To be sure, the
conduct of a certification election has a two-fold objective: to
determine the appropriate bargaining unit and to ascertain the
majority representation of the bargaining representative, if the
employees desire to be represented at all by anyone. It is not
simply the determination of who between two or more
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
contending unions won, but whether it effectively ascertains
the will of the members of the bargaining unit as to whether
they want to be represented and which union they want to
represent them.
Having declared that no choice in the certification election
conducted obtained the required majority, it follows that a run-
off election must be held to determine which between
HIMPHLU and petitioner should represent the rank-and-file
employees.
A run-off election refers to an election between the labor
unions receiving the two (2) highest number of votes in a
certification or consent election with three (3) or more choices,
where such a certified or consent election results in none of the
three (3) or more choices receiving the majority of the valid
votes cast; provided that the total number of votes for all
contending unions is at least fifty percent (50%) of the number
of votes cast.8 With 346 votes cast, 337 of which are now
deemed valid and HIMPHLU having only garnered 169 and
petitioner having obtained 151 and the choice "NO UNION"
receiving 1 vote, then the holding of a run-off election between
HIMPHLU and petitioner is in order.
Petition is granted.
Mariwasa Siam Ceramics vs. Sec of Labor et al
GR 183317, 21 December 2009
DOCTRINE:
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 bargaining unit where it seeks to operate is
one of the requirements of registration of a labor organization.
FACTS:
Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics,
Inc was issued a Certificate of Registration as a legitimate
labor organization. Mariwasa Siam Ceramics, Inc. filed a
Petition for Cancellation of Union Registration against
respondent, claiming that the latter violated Article 234 of the
Labor Code for not complying with the 20% requirement, and
that it committed massive fraud and misrepresentation in
violation of Article 239. The petitioner insists that respondent
failed to comply with the 20% union membership requirement
for its registration as a legitimate labor organization because of
the disaffiliation from the total number of union members of
102 employees who executed affidavits recanting their union
membership. Respondent asserts that it had a total of 173
union members at the time it applied for registration.
REGIONAL DIRECTOR: revoked the registration of
respondent
murallos • david • Mendoza, s | 43
BLE DIRECTOR: reversed and set aside the regional director’s
decision
CA: denied the petition for lack of merit
ISSUE:
WON there was failure to comply with the 20% union
requirement
WON the withdrawal of 31 union members affected the petition
for certification election insofar as the 30% requirement is
concerned.
SC RULING:
1. NO. While it is true that the withdrawal of support may
be considered as a resignation from a union, fact remain that
at the time of the union’s application for registration, the
affiants were members of the respondent and they comprised
more than the required 20% membership for the purposes of
registration as a labor union. Art 234 of the labor Code merely
requires a 20% minimum membership requirement during the
application for union registration. It does not mandate that the
union must maintain that 20% minimum membership
requirement al throughout its existence.
2. It appears undisputedly that the 31 union members
had withdrawn their support to the petition before filing of said
petition. The distinction must be that withdrawals before filing
of the petition are presumed voluntary unless there is
convincing proof to the contrary, whereas withdrawals made
after the filing of the petition are deemed involuntary.
Therefore, following jurisprudence, the employees were not
tatally free from the employers pressure and so voluntariness
of the employees’ execution of the affidavits becomes suspect.
The cancellation of the union’s registration has an impairing
dimension on the right to labor organization. For fraud and
misrepresentation to be grounds for cancellation of union
registration under the Labor Code, the nature of fraud and
misrepresentation must be grave and compelling to vitiate the
consent of majority of the union members.
TOYOTA MOTOR PHILIPPINES CORPORATION,
petitioner, vs. TOYOTA MOTOR PHILIPPINES
CORPORATION LABOR UNION AND THE
SECRETARY OF LABOR AND EMPLOYMENT,
respondents.
KAPUNAN, J:
Facts:
On November 26, 1992, the Toyota Motor Philippines
Corporation Labor Union (TMPCLU[Respondent]) filed a
petition for certification election with the Department of Labor,
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
National Capital Region, for all rank-and-file employees of the
Toyota Motor Corporation[Petitioner].
PETITIONER: filed a Position Paper on February 23, 1993
seeking the denial of the issuance of an Order directing the
holding of a certification election on two grounds: first, that the
respondent union, being "in the process of registration" had no
legal personality to file the same as it was not a legitimate
labor organization as of the date of the filing of the petition; and
second, that the union was composed of both rank-and-file and
supervisory employees in violation of law.
Attached to the position paper was a list of union members and
their respective job classifications, indicating that many of the
signatories to the petition for certification election occupied
supervisory positions and were not in fact rank-and-file
employees.
MED-ARBITER; Paterno D. Adap: dismissed respondent
union's petition for certification election for lack of merit.
In his March 8, 1993 Order, the Med-Arbiter found that the
labor organization's membership was composed of supervisory
and rank-and-file employees in violation of Article 245 of the
Labor Code, 4 and that at the time of the filing of its petition,
respondent union had not even acquired legal personality yet.
APPEAL; THE OFFICE OF THE SECRETARY OF LABOR: Set
aside the Med-Arbiter's Order of March 3, 1993, and directed
the holding of a certification election among the regular rank-
and-file employees of Toyota Motor Corporation.
PETITIONER; MOTION FOR RECONSIDERATION: reiterating
its claim that as of the date of filing of petition for certification
election, respondent TMPCLU had not yet acquired the status
of a legitimate labor organization as required by the Labor
Code, and that the proposed bargaining unit was inappropriate.
SECRETARY OF LABOR; MR: set aside its earlier resolution
and remanded the case to the Med-Arbiter concluding that the
issues raised by petitioner both on appeal and in its motion for
reconsideration were factual issues requiring further hearing
and production of evidence.
MED-ARBITER; Brigida C. Fodrigon; SEPT. 28, 1994:
respondent TMPCLU could not have "acquire[d] legal
personality at the time of the filing of (its) petition."
SECRETARY OF LABOR; APR. 20, 1996: issued a new
Resolution, "directing the conduct of a certification election
among the regular rank-and-file employees of the Toyota Motor
Philippines Corporation.
Hence, this special civil action for certiorari, where petitioner
contends that "the Secretary of Labor and Employment
committed grave abuse of discretion amounting to lack or
murallos • david • Mendoza, s | 44
excess of jurisdiction in reversing, contrary to law and facts the
findings of the Med-Arbiters.”
Issue:
WON the inclusion of the prohibited mix of rank-and-file and
supervisory employees in the roster of members and officers of
the union cannot be cured by a simple inclusion-exclusion
proceeding; YES
WON the respondent union had no legal standing at the time of
the filing of its petition for certification election.
Held:
The purpose of every certification election is to determine the
exclusive representative of employees in an appropriate
bargaining unit for the purpose of collective bargaining. A
certification election for the collective bargaining process is one
of the fairest and most effective ways of determining which
labor organization can truly represent the working force. In
determining the labor organization which represents the
interests of the workforce, those interests must be, as far as
reasonably possible, homogeneous, so as to genuinely reach
the concerns of the individual members of a labor organization.
In Belyca Corporation v. Ferrer Calleja, we defined the
bargaining unit as "the legal collectivity for collective bargaining
purposes whose members have substantially mutual
bargaining interests in terms and conditions of employment as
will assure to all employees their collective bargaining rights."
This in mind, the Labor Code has made it a clear statutory
policy to prevent supervisory employees from joining labor
organizations consisting of rank-and-file employees as the
concerns which involve members of either group are normally
disparate and contradictory.
Labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot,
for any guise or purpose, be a legitimate labor organization.
Not being one, an organization which carries a mixture of rank-
and-file and supervisory employees cannot possess any of the
rights of a legitimate labor organization, including the right to
file a petition for certification election for the purpose of
collective bargaining. It becomes necessary, therefore, anterior
to the granting of an order allowing a certification election, to
inquire into the composition of any labor organization
whenever the status of the labor organization is challenged on
the basis of Article 245 of the Labor Code.
The Labor Code, in requiring separate unions among rank-
and-file employees on one hand, and supervisory employees
on the other, seeks to avoid. 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 functions, become the alter ego of management in
the making and the implementing of key decisions at the sub-
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
managerial level. Certainly, it would be difficult to find unity or
mutuality of interests in a bargaining unit 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 a unit will best advance to
all employees within the unit the proper exercise of their
collective bargaining rights.
In the case at bar, as respondent union's membership list
contains the names of at least twenty-seven (27) supervisory
employees in Level Five positions, the union could not, prior to
purging itself of its supervisory employee members, attain the
status of a legitimate labor organization. Not being one, it
cannot possess the requisite personality to file a petition for
certification election. The foregoing discussion, therefore,
renders entirely irrelevant, the technical issue raised as to
whether or not respondent union was in possession of the
status of a legitimate labor organization at the time of filing,
when, as petitioner vigorously claims, the former was still at the
stage of processing of its application for recognition as a
legitimate labor organization. The union's composition being in
violation of the Labor Code's prohibition of unions composed of
supervisory and rank-and-file employees, it could not possess
the requisite personality to file for recognition as a legitimate
labor organization.
In April 1997, when TMPCEWU filed a Petition for Certification
Election, TMPCLU was allowed to file a Motion to Intervene on
the ground that the Supreme Court decision holding TMPCLU
not a legitimate labor organization and therefore without
personality to file a petition for certification election had not
ripened into a final and executory judgment.
The issue now, after the finality of above decision, when
TMPCEWU revived its Petition for Certification Election, can
TMPCLU again file its Petition-in-Intervention?
The Court ruled in the negative and reiterates the fact that
TMPCLU had no valid certificate of registration and therefore
no legal personality to file a Petition for Certification Election,
and in the absence of any attempt on its part to rectify the legal
infirmity, likewise the disputed Petition-in-Intervention.
TMPCLU may have alleged an already issued certificate of
registration in its favor but the Court believes the same had
already been impugned on the ground that the application is
vitiated by irregularities. Rightly therefore, TMPCLU is denied
recognition as a legitimate labor organization.
Tagaytay Highlands Intl. Golf Club, Inc. vs.
Tagaytay Highlands Employees Union –
PGTWO
395 SCRA 699 (22 Jan 2003)
murallos • david • Mendoza, s | 45
FVC Labor Union-PGTWO vs. Sama Samang CBA and cannot now file a petition for certification election
Nagkakaisang Manggagawa sa FVC-SILO based on the original CBA expiration date.
GR 176249, 27 November 2009
CA Ruling:
Facts:
It set aside the challenged DOLE Secretary decisions and
reinstated her earlier ruling calling for a certification election.
On December 22, 1997, the petitioner FVCLU-PTGWO the
recognized bargaining agent of the rank-and-file employees of
Issue:
the FVC Philippines, Incorporated (company) signed a five-
year collective bargaining agreement (CBA) with the company.
Won there is a certification of election?
The five-year CBA period was from February 1, 1998 to
January 30, 2003.[5] At the end of the 3rd year of the five-year
Held:
term and pursuant to the CBA, FVCLU-PTGWO and the
company entered into the renegotiation of the CBA and
Yes.
modified, among other provisions, the CBAs duration. Article
XXV, Section 2 of the renegotiated CBA provides that this re-
FVCLU-PTGWO has taken the view that its exclusive
negotiation agreement shall take effect beginning February 1,
representation status should fully be in step with the term of
2001 and until May 31, 2003 thus extending the original five-
the CBA and that this status can be challenged only within 60
year period of the CBA by four (4) months.
days before the expiration of this term. Thus, when the term of
the CBA was extended, its exclusive bargaining status was
On January 21, 2003, nine (9) days before the January 30,
similarly extended so that the freedom period for the filing of a
2003 expiration of the originally-agreed five-year CBA term
petition for certification election should be counted back from
(and four [4] months and nine [9] days away from the
the expiration of the amended CBA term.
expiration of the amended CBA period), the respondent Sama-
Samang Nagkakaisang Manggagawa sa FVC-Solidarity of
We hold this FVCLU-PTGWO position to be correct, but only
Independent and General Labor Organizations (SANAMA-
with respect to the original five-year term of the CBA which, by
SIGLO) filed before the Department of Labor and Employment
law, is also the effective period of the unions exclusive
(DOLE) a petition for certification election for the same rank-
bargaining representation status. While the parties may agree
and-file unit covered by the FVCLU-PTGWO CBA. FVCLU-
to extend the CBAs original five-year term together with all
PTGWO moved to dismiss the petition on the ground that the
other CBA provisions, any such amendment or term in excess
certification election petition was filed outside the freedom
of five years will not carry with it a change in the unions
period or outside of the sixty (60) days before the expiration of
exclusive collective bargaining status. By express provision of
the CBA on May 31, 2003.
the above-quoted Article 253-A, the exclusive bargaining status
cannot go beyond five years and the representation status is a
Ruling of the Med Arbiter:
legal matter not for the workplace parties to agree upon. In
other words, despite an agreement for a CBA with a life of
dismissed the petition on the ground that it was filed outside
more than five years, either as an original provision or by
the 60-day period counted from the May 31, 2003 expiry date
amendment, the bargaining unions exclusive bargaining status
of the amended CBA.[6] SANAMA-SIGLO appealed the Med-
is effective only for five years and can be challenged within
Arbiters Order to the DOLE Secretary, contending that the filing
sixty (60) days prior to the expiration of the CBAs first five
of the petition on January 21, 2003 was within 60-days from
years. As we said in San Miguel Corp. Employees
the January 30, 2003 expiration of the original CBA term.
UnionPTGWO, et al. v. Confesor, San Miguel Corp., Magnolia
Corp. and San Miguel Foods, Inc.,[22] where we cited the
DOLE Secretary Ruling:
Memorandum of the Secretary of Labor and Employment
dated February 24, 1994:
She first ruled that there is certification of election but upon
appeal she reversed her decision
In the event however, that the parties, by mutual agreement,
enter into a renegotiated contract with a term of three (3) years
The Acting Secretary held that the amended CBA (which
or one which does not coincide with the said five-year term and
extended the representation aspect of the original CBA by four
said agreement is ratified by majority of the members in the
[4] months) had been ratified by members of the bargaining
bargaining unit, the subject contract is valid and legal and
unit some of whom later organized themselves as SANAMA-
therefore, binds the contracting parties. The same will however
SIGLO, the certification election applicant. Since these
not adversely affect the right of another union to challenge the
SANAMA-SIGLO members fully accepted and in fact received
majority status of the incumbent bargaining agent within sixty
the benefits arising from the amendments, the Acting Secretary
(60) days before the lapse of the original five (5) year term of
rationalized that they also accepted the extended term of the
the CBA.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 46
In the present case, the CBA was originally signed for a period
of five years, i.e., from February 1, 1998 to January 30, 2003,
with a provision for the renegotiation of the CBAs other
provisions at the end of the 3rd year of the five-year CBA term.
Thus, prior to January 30, 2001 the workplace parties sat down
for renegotiation but instead of confining themselves to the
economic and non-economic CBA provisions, also extended
the life of the CBA for another four months, i.e., from the
original expiry date on January 30, 2003 to May 30, 2003.
As discussed above, this negotiated extension of the CBA term
has no legal effect on the FVCLU-PTGWOs exclusive
bargaining representation status which remained effective only
for five years ending on the original expiry date of January 30,
2003. Thus, sixty days prior to this date, or starting December
2, 2002, SANAMA-SIGLO could properly file a petition for
certification election. Its petition, filed on January 21, 2003 or
nine (9) days before the expiration of the CBA and of FVCLU-
PTGWOs exclusive bargaining status, was seasonably filed.
We thus find no error in the appellate courts ruling reinstating
the DOLE order for the conduct of a certification election. If this
ruling cannot now be given effect, the only reason is SANAMA-
SIGLOs own desistance; we cannot disregard its manifestation
that the members of SANAMA themselves are no longer
interested in contesting the exclusive collective bargaining
agent status of FVCLU-PTGWO.This recognition is fully in
accord with the Labor Codes intent to foster industrial peace
and harmony in the workplace.
COLLECTIVE BARGAINING
DIVINE WORD UNIVERSITY OF TACLOBAN,
petitioner, vs. SECRETARY OF LABOR AND
EMPLOYMENT and DIVINE WORD UNIVERSITY
EMPLOYEES UNION-ALU, respondents.
Facts:
Med-Arbiter Bienvenido C. Elorcha certified the Divine Word
University Employees Union (DWUEU) as the sole and
exclusive bargaining agent of the Divine Word University
(University for brevity). DWUEU submitted its collective
bargaining proposals. the University replied and requested a
preliminary conference. However, two days before the
scheduled conference DWUEU's resigned vice-president Mr.
Brigido Urminita (or Urmeneta) wrote a letter addressed to the
University unilaterally withdrawing the CBA proposals.
Consequently, the preliminary conference was cancelled.
After almost three years, DWUEU, which had by then affiliated
with the Associated Labor Union, requested a conference with
the University for the purpose of continuing the collective
bargaining negotiations. Not having heard from the University,
DWUEU-ALU sent a follow-up letter reiterating its request for a
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
conference and warning the University against committing acts
of interference through its various meetings with both the
academic and non-academic employees regarding their union
affiliation and activities. Despite the letter, the University
persisted in maintaining silence.
DWUEU-ALU filed with the National Conciliation and Mediation
Board of the Department of Labor and Employment a notice of
strike on the grounds of bargaining deadlock and unfair labor
practice acts, specifically, refusal to bargain, discrimination and
coercion on (sic) employees.
The conferences which were held after the filing of the notice
of strike led to the conclusion of an agreement between the
University and DWUEU-ALU on May 10, 1888. However, it
turned out that an hour before the May 10, 1988 agreement
was concluded, the University had filed a petition for
certification election with the Region VIII office of the
Department of Labor and Employment.
DWUEU-ALU, consonant with the agreement, submitted its
collective bargaining proposals. These were ignored by the
University. Thereafter, through the National Conciliation and
Mediation Board (NCMB) of Region VIII, marathon conciliation
conferences were conducted but to no avail. Hence, then
Secretary of Labor Franklin M. Drilon, exercising his powers
under Art. 263(g) of the Labor Code, issued an Order
assuming jurisdiction over the labor dispute and directing all
striking workers to report back to work within twenty-four (24)
hours and the management to accept them back under the
same terms and conditions prevailing prior to the work
stoppage. The Secretary also designated the NCMB to hear
the case and to submit its report thereon.
On the same day, Med-Arbiter Rodolfo S. Milado, acting on the
University's petition for certification election, issued an Order
directing the conduct of a certification election to be
participated in by DWUEU-ALU and "no union," after he found
the petition to be "well-supported in fact and in law." Said
Order prompted the DWUEU-ALU to file with the Secretary of
Labor an urgent motion seeking to enjoin Milado from further
acting on the matter of the certification election. the Labor
Secretary granted said motion and directed Milado to hold in
abeyance any and all certification election proceedings at the
University pending the resolution of the labor dispute.
The NCMB of Region VIII conducted hearings on the case
from October 17-18, 1988. On October 26, 1988, the Divine
Word University Independent Faculty and Employees Union
(DWUIFEU), which was registered earlier that day, filed a
motion for intervention alleging that it had "at least 20% of the
rank and file employees" of the University.
Exercising once again his extraordinary powers under Art.
263(g) of the Labor Code, the Secretary consolidated "the
entire labor dispute including all incidents arising therefrom, or
necessarily related thereto" in his Order of May 23, 1989 13
murallos • david • Mendoza, s | 47
and the following cases were "subsumed or consolidated to the
labor dispute": the petition for certification election docketed as
MED-ARB-Case No. 5-04-88, the DWUEU's complaint
docketed as NLRC Case No. 8-0321-88, and the University's
complaint docketed as NLRC Case No. 8-0323-88.
Issue:
Whether or not a certification election should have been
ordered by the Secretary of Labor
Held:
"ART. 258. When an employer may file petition. — When
requested to bargain collectively, an employer may petition the
Bureau for an election. If there is no existing certified collective
bargaining agreement in the unit, the Bureau shall, after
hearing, order a certification election.
All certification cases shall be decided within twenty (20)
working days.
The Bureau shall conduct a certification election within twenty
(20) days in accordance with the rules and regulations
prescribed by the Secretary of Labor.
Sec. 3. When to file. — In the absence of a collective
bargaining agreement duly registered in accordance with
Article 231 of the Code, a petition for certification election may
be filed at any time. However, no certification election may be
held within one year from the date of issuance of a final
certification election result. Neither may a representation
question be entertained if, before the filing of a petition for
certification election, a bargaining deadlock to which an
incumbent or certified bargaining agent is a party had been
submitted to conciliation or arbitration or had become the
subject of valid notice of strike or lockout. (Emphasis supplied)
If a collective bargaining agreement has been duly registered
in accordance with Article 231 of the Code, a petition for
certification election or a motion for intervention can only be
entertained within sixty (60) days prior to the expiry date of
such agreement."
there is no question as to the timeliness of the petition, the
problem appears to lie in the fact that the Secretary of Labor
had found that a bargaining deadlock exists.
A "deadlock" is defined as the "counteraction of things
producing entire stoppage: a state of inaction or of
neutralization caused by the opposition of persons or of
factions (as in government or a voting body): standstill." 21
There is a deadlock when there is a "complete blocking or
stoppage resulting from the action of equal and opposed
forces; as, the deadlock of a jury or legislature." 22 The word is
synonymous with the word impasse 23 which, within the
meaning of the American federal labor laws, "presupposes
reasonable effort at good faith bargaining which, despite noble
intentions, does not conclude in agreement between the
parties."
A thorough study of the records reveals that there was no
"reasonable effort at good faith bargaining" specially on the
part of the University. Its indifferent attitude towards collective
bargaining inevitably resulted in the failure of the parties to
arrive at an agreement. As it was evident that unilateral moves
were being undertaken only by the DWUEU-ALU, there was no
"counteraction" of forces or an impasse to speak of. While
collective bargaining should be initiated by the union, there is a
corresponding responsibility on the part of the employer to
respond in some manner to such acts.
The Court is not inclined to rule that there has been a deadlock
or an impasse in the collective bargaining process. As the
Court earlier observed, there has not been a "reasonable effort
at good faith bargaining" on the part of the University. While
DWUEU-ALU was opening all possible avenues for the
conclusion of an agreement, the record is replete with
evidence on the University's reluctance and thinly disguised
refusal to bargain with the duly certified bargaining agent, such
that the inescapable conclusion is that the University evidently
had no intention of bargaining with it. Thus, while the Court
recognizes that technically, the University has the right to file
the petition for certification election as there was no bargaining
deadlock to speak of, to grant its prayer that the herein
assailed Orders be annulled would put an unjustified premium
on bad faith bargaining

These provisions make it plain that in the absence of a Colegio de San Juan de Letran vs. Association
collective bargaining agreement, an employer who is of Employees and Faculty of Letran
requested to bargain collectively may file a petition for
340 SCRA 587 (2000)
certification election any time except upon a clear showing that
one of these two instances exists: (a) the petition is filed within
FACTS:
one year from the date of issuance of a final certification
election result or (b) when a bargaining deadlock had been
Then president of respondent union Association of Employees
submitted to conciliation or arbitration or had become the
and Faculty of Letran, Salvador Abtria initiated the
subject of a valid notice of strike or lockout.
renegotiation of the last 2 years of the 5 year CBA with
petitioner Letran. The union elected a new set of officers that
While there is no question that the petition for certification
year where private respondent Eleanor Ambas emerged as the
election was filed by the herein petitioner after almost four
newly elected president, she then proceeded to initiate the
years from the time of the certification election and, therefore,
renegotiation of the CBA but Letran claimed that the CBA was
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 48
already prepared for signing. The parties submitted the
disputed CBA to a referendum where it was rejected. Petitioner
accused the union officers of bargaining in bad faith before the
NLRC, the Labor Arbiter ruled for the petitioner but on appeal
this decision was reversed.
The parties then agreed to disregard the unsigned CBA and
start negotiation on a new 5 year CBA, they submitted their
proposals which was received by the Board of Trustees of the
petitioner. Ambas was then informed of a change in her work
schedule to which she protested and requested for the issue to
be brought to a grievance machinery under the old CBA. Due
to petitioner’s inaction, the union filed a notice to strike, the
parties then met to discuss the ground rules on the negotiation
but the petitioner stopped negotiations upon learning that a
new group of employees filed for a petition for certification
election – because of this, the union finally struck
Secretary of Labor assumed jurisdiction and ordered all the
striking employees to return to work and for the petitioner to
accept them back – petitioner accepted everyone EXCEPT
Ambas prompting them to file pleadings.
Labor Secretary declared the petitioner guilty of unfair labor
practices and ordered the reinstatement of Ambas and back
wages, the petitioner filed an MR which was denied, and then
sought for a petition for review before the CA which dismissed
the petition and affirmed the Labor Sec. decision
Hence petition
ISSUE(S):
Is petitioner guilty of unfair labor practices when it suspended
negotiations
HELD:
Yes. Petition is denied for lack of merit..
Petitioner failed to show any justification for the Court to depart
from the ruling of the appellate court.
Petitioner is guilty of violating Art. 250, and 252 of the Labor
Code
Art. 250. Procedure in collective bargaining.—The following
procedures shall be observed in collective bargaining: (a)
When a party desires to negotiate an agreement, it shall serve
a written notice upon the other party with a statement of its
proposals. The other party shall make a reply thereto not later
than ten (10) calendar days from receipt of such notice.
Art. 252. Meaning of duty to bargain collectively.—The duty to
bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement…
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Petitioner violated Art. 250 by not filing any reply or counter
proposal when union submitted their proposals. Petitioner
likewise violated Art 252 when it delayed the negotiations
numerous times, and showed complete lack of interest to
negotiate the CBA
Standard Chertered Bank Employees Union
(NUBE) vs. Secretary Nieves Confessor and
Standard Chartered Bank
GR No. 11497, 16 June 2004
INSULAR LIFE ASSURANCE EMPLOYEES-
NATO VS. INSULAR LIFE ASSURANCE LTD
FACTS:
The Insular Life Assurance Co., Ltd., Employees Association-
NATU, FGU Insurance Group Workers & Employees
Association-NATU, and Insular Life Building Employees
Association-NATU (hereinafter referred to as the Unions), while
still members of the Federation of Free Workers (FFW),
entered into separate CBAs with the Insular Life Assurance
Co., Ltd. and the FGU Insurance Group (hereinafter referred to
as the Companies).
Two of the lawyers of the Unions then were Felipe Enaje and
Ramon Garcia; the latter was formerly the secretary-treasurer
of the FFW and acting president of the Insular Life/FGU unions
and the Insular Life Building Employees Association. Garcia,
as such acting president, in a circular issued in his name and
signed by him, tried to dissuade the members of the Unions
from disaffiliating with the FFW and joining the National
Association of Trade Unions (NATU), to no avail.
Enaje and Garcia soon left the FFW and secured employment
with the Anti-Dummy Board of the Department of Justice.
Thereafter, the Companies hired Garcia in the latter part of
1956 as assistant corporate secretary and legal assistant in
their Legal Department. Enaje was hired as personnel
manager of the Companies, and was likewise made chairman
of the negotiating panel for the Companies in the collective
bargaining with the Unions.
Unions jointly submitted proposals to the Companies;
negotiations were conducted on the Union’s proposals, but
these were snagged by a deadlock on the issue of union shop,
as a result of which the Unions filed on January 27, 1958 a
notice of strike for “deadlock on collective bargaining.” The
issue was dropped subsequently (in short, nagkasundo). But,
the parties negotiated on the labor demands but with no
satisfactory result due to a stalemate on the matter of salary
increases.
murallos • david • Mendoza, s | 49
Meanwhile, 87 unionists were reclassified as supervisors
without increase in salary nor in responsibility while
negotiations were going on in the Department of Labor after
the notice to strike was served on the Companies. These
employees resigned from the Unions.
On May 21, 1958 the Companies through their acting manager
and president, sent to each of the strikers a letter (exhibit A)
quoted verbatim as follows:
We recognize it is your privilege both to strike and to conduct
picketing.
However, if any of you would like to come back to work
voluntarily, you may:
Advise the nearest police officer or security guard of your
intention to do so.
Take your meals within the office.
Make a choice whether to go home at the end of the day or to
sleep nights at the office where comfortable cots have been
prepared.
Enjoy free coffee and occasional movies.
Be paid overtime for work performed in excess of eight hours.
Be sure arrangements will be made for your families.
The decision to make is yours — whether you still believe in
the motives of the strike or in the fairness of the Management.
Unions, however, continued on strike, with the exception of a
few unionists who were convinced to desist by the aforesaid
letter
From the date the strike was called on May 21, 1958, until it
was called off on May 31, 1958, some management men tried
to break thru the Unions’ picket lines xxx succeeded in
penetrating the picket lines in front of the Insular Life Building,
thus causing injuries to the picketers and also to the strike-
breakers due to the resistance offered by some picketers.
Alleging that some non-strikers were injured and with the use
of photographs as evidence, the Companies then filed criminal
charges against the strikers with the City Fiscal’s Office of
Manila.xxx
Another letter was sent by the company to the individual
strikers:
The first day of the strike was last 21 May 1958.
Our position remains unchanged and the strike has made us
even more convinced of our decision.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
We do not know how long you intend to stay out, but we
cannot hold your positions open for long. We have continued to
operate and will continue to do so with or without you.
If you are still interested in continuing in the employ of the
Group Companies, and if there are no criminal charges
pending against you, we are giving you until 2 June 1958 to
report for work at the home office. If by this date you have not
yet reported, we may be forced to obtain your replacement.
Before, the decisions was yours to make.
So it is now.
Incidentally, all of the more than 120 criminal charges filed
against the members of the Unions, except 3, were dismissed
by the fiscal’s office and by the courts. These three cases
involved “slight physical injuries” against one striker and “light
coercion” against two others.
At any rate, because of the issuance of the writ of preliminary
injunction against them as well as the ultimatum of the
Companies giving them until June 2, 1958 to return to their
jobs or else be replaced, the striking employees decided to call
off their strike and to report back to work on June 2, 1958.
* However, before readmitting the strikers, the Companies
required them not only to secure clearances from the City
Fiscal’s Office of Manila but also to be screened by a
management committee among the members of which were
Enage and Garcia. The screening committee initially rejected
83 strikers with pending criminal charges. However, all non-
strikers with pending criminal charges which arose from the
breakthrough incident were readmitted immediately by the
Companies without being required to secure clearances from
the fiscal’s office. Subsequently, when practically all the strikers
had secured clearances from the fiscal’s office, the Companies
readmitted only some but adamantly refused readmission to 34
officials and members of the Unions who were most active in
the strike, on the ground that they committed “acts inimical to
the interest of the respondents,” without however stating the
specific acts allegedly committed. Some 24 of the above
number were ultimately notified months later that they were
being dismissed retroactively as of June 2, 1958 and given
separation pay checks computed under Rep. Act 1787, while
others (ten in number) up to now have not been readmitted
although there have been no formal dismissal notices given to
them.
CIR prosecutor filed a complaint for unfair labor practice
against the Companies under Republic Act 875. The complaint
specifically charged the Companies with (1) interfering with the
members of the Unions in the exercise of their right to
concerted action, by sending out individual letters to them
urging them to abandon their strike and return to work, with a
promise of comfortable cots, free coffee and movies, and paid
overtime, and, subsequently, by warning them that if they did
murallos • david • Mendoza, s | 50
not return to work on or before June 2, 1958, they might be
replaced; and (2) discriminating against the members of the
Unions as regards readmission to work after the strike on the
basis of their union membership and degree of participation in
the strike.
ISSUE:
Whether or not respondent company is guilty of ULP
HELD:
YES. The act of an employer in notifying absent employees
individually during a strike following unproductive efforts at
collective bargaining that the plant would be operated the next
day and that their jobs were open for them should they want to
come in has been held to be an unfair labor practice, as an
active interference with the right of collective bargaining
through dealing with the employees individually instead of
through their collective bargaining representatives.
Although the union is on strike, the employer is still under
obligation to bargain with the union as the employees’
bargaining representative.
Individual solicitation of the employees or visiting their homes,
with the employer or his representative urging the employees
to cease union activity or cease striking, constitutes unfair
labor practice. All the above-detailed activities are unfair labor
practices because they tend to undermine the concerted
activity of the employees, an activity to which they are entitled
free from the employer’s molestation.
Indeed, when the respondents offered reinstatement and
attempted to “bribe” the strikers with “comfortable cots,” “free
coffee and occasional movies,” “overtime” pay for “work
performed in excess of eight hours,” and “arrangements” for
their families, so they would abandon the strike and return to
work, they were guilty of strike-breaking and/or union-busting
and, consequently, of unfair labor practice. It is equivalent to an
attempt to break a strike for an employer to offer reinstatement
to striking employees individually, when they are represented
by a union, since the employees thus offered reinstatement are
unable to determine what the consequences of returning to
work would be.
ULP also: (super short cut na to) Hiring of Enage and Garcia
with attractive compensations; respondents reclassified 87
employees as supervisors without increase in salary or in
responsibility, in effect compelling these employees to resign
from their unions; respondents, thru their president and
manager, respondent Jose M. Olbes, brought three truckloads
of non-strikers and others, escorted by armed men, who,
despite the presence of eight entrances to the three buildings
occupied by the Companies, entered thru only one gate less
than two meters wide and in the process, crashed thru the
picket line posted in front of the premises of the Insular Life
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Building. This resulted in injuries on the part of the picketers
and the strike-breakers; respondents brought against the
picketers criminal charges, only three of which were not
dismissed, and these three only for slight misdemeanors. As a
result of these criminal actions, the respondents were able to
obtain an injunction from the court of first instance restraining
the strikers from stopping, impeding, obstructing, etc. the free
and peaceful use of the Companies’ gates, entrance and
driveway and the free movement of persons and vehicles to
and from, out and in, of the Companies’ buildings.
Verily, the above actuations of the respondents before and
after the issuance of the letters, exhibit A and B, yield the clear
inference that the said letters formed of the respondents
scheme to preclude if not destroy unionism within them.
II. The respondents did not merely discriminate against all the
strikers in general. They separated the active from the less
active unionists on the basis of their militancy, or lack of it, on
the picket lines. Unionists belonging to the first category were
refused readmission even after they were able to secure
clearances from the competent authorities with respect to the
criminal charges filed against them.
It is noteworthy that — perhaps in an anticipatory effort to
exculpate themselves from charges of discrimination in the
readmission of strikers returning to work — the respondents
delegated the power to readmit to a committee.
III. Anent the third assignment of error, the record shows that
not a single dismissed striker was given the opportunity to
defend himself against the supposed charges against him. As
earlier mentioned, when the striking employees reported back
for work on June 2, 1958, the respondents refused to readmit
them unless they first secured the necessary clearances; but
when all, except three, were able to secure and subsequently
present the required clearances, the respondents still refused
to take them back.
Indeed, the individual cases of dismissed officers and
members of the striking unions do not indicate sufficient basis
for dismissal.
CAPITOL MEDICAL CENTER ALLIANCE OF
CONCERNED EMPLOYEES-UNIFIED FILIPINO
SERVICE WORKERS vs. HON. BIENVENIDO E.
LAGUESMA, Undersecretary of the Department
of Labor and Employment
FACTS:
Med-Arbiter Abdullah issued an Order which granted the
Union’s petition for certification election among the rank-and-
file employees of Capitol Medical Center. CMC, then,
questioned the legal status of the Union’s affiliation with the
Alliance of Filipino Workers. To correct any infirmity, the Union
murallos • david • Mendoza, s | 51
registered itself independently and withdrew the petition, which
was granted by MA Abdullah. Thus, the Union filed another
petition with MA Cruz. CMC appealed once again after
knowing that MA Cruz granted the certification election. When
elections were finally held, MA Cruz issued an Order certifying
the Union as the sole and exclusive bargaining representative
of the rank-and-file employees of CMC. CMC, unsatisfied,
appealed once again. However, the Secretary of Labor denied
such. After, a subsequent motion for reconsideration was filed
—which was also denied afterwards. CMC contended that MA
Adap issued an Order declaring the Union’s certificate null and
void. Due to CMC’s refusal to bargain, the Union filed a Notice
to Strike. The Secretary of Labor assumed jurisdiction over the
case and issued an order certifying the same to the NLRC.
Then, MA Fadrigon issued an Order granting the petition for
certification election among the rank-and-file employees. Since
no certification election was held, there was no bargaining
deadlock. Thus, this petition.
ISSUE:
W/N the Secretary of Labor committed grave abuse of
discretion in dismissing the petition for certification election,
and in directing the hospital to negotiate a CBA with the Union.
HELD:
NO. A scrutiny of the records revealed that after the Union was
certified as a bargaining agent of CMC, it invited the employer
hospital to the bargaining table by submitting its economic
proposal for a CBA. However, it was CMC who refused to
negotiate, and instead, challenged the Union’s legal
personality through a petition for cancellation of the certificate
of registration. The Union then was left with no other recourse
but to file a notice of strike.
SAN MIGUEL FOODS INC. VS. SAN MIGUEL
CORPORATION EMPLOYEES UNION-PTWGO
FACTS:
At the time material to the case, respondent, San Miguel
Corporation Employees Union PTWGO (the Union), was the
sole bargaining agent of all the monthly paid employees of
petitioner San Miguel Foods, Incorporated (SMFI). On
November 9, 1992, some employees of SMFIs Finance
Department, through the Union represented by Edgar
Moraleda, brought a grievance against Finance Manager
Gideon Montesa (Montesa), for discrimination, favoritism,
unfair labor practices, not flexible [sic], harassment, promoting
ISSUE:
divisiveness and sectarianism, etc.,[1] before SMFI Plant
Operations Manager George Nava in accordance with Step 1
WON respondents complaint is one for unfair labor practice
of the grievance machinery adopted in the Collective
(ULP) over which a Labor Arbiter has jurisdiction.
Bargaining Agreement (CBA) forged by SMFI and the Union.
The Union sought the 1. review, evaluat[ion] & upgrad[ing of]
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
all Finance staff and 2. promot[ion of] G.Q. Montesa to other
SMC affiliate[s] & subsidiaries.[2]
At the grievance meeting held on January 14, 1993, SMFI
informed the Union that it planned to address the grievance
through a work management review which would be completed
by March 1993, hence, it asked the finance personnel to give it
their attention and cooperation.
The work management review was not completed by March
1993, however, prompting the Union to, on March 26, 1993,
elevate the grievance to Step 2. Almost nine months after the
grievance meeting was held or on October 6, 1993, SMFI
rendered a Decision on Step 1 Grievance stating that it was
still in the process of completing the work management review,
[4] hence, the Unions requests could not be granted
The Union thereupon filed a complaint on October 20, 1993
before the National Labor Relations Commission (NLRC),
Arbitration Branch, against SMFI,[5] its President Amadeo P.
Veloso, and its Finance Manager Montesa for unfair labor
practice, [and] unjust discrimination in matters of promotion . . .
[6] It prayed that SMFI et al. be ordered to promote the therein
named employees with the corresponding pay increases or
adjustment including payment of salary differentials plus
attorneys fees[,] and to cease and desist from committing the
same unjust discrimination in matters of promotion.
Instead of filing a position paper as required by the Labor
Arbiter, SMFI et al. filed a motion to dismiss,[8] contending that
the issues raised in the complaint were grievance issues and,
therefore, should be resolved in the grievance machinery
provided in [the] collective bargaining agreements [sic] of the
parties or in the mandated provision of voluntary arbitration
which is also provided in the CBA.[9] The Union opposed the
motion to dismiss. In its Position Paper, the Union specified
acts of ULP of SMFI.
The Labor Arbiter granted SMFI et al.s motion to dismiss and
ordered the remand of the case to the grievance machinery for
completion of the proceedings.[11] The Union appealed the
said order to the NLRC by Motion for
Reconsideration/Appeal[12] which its Second Division granted
and accordingly ordered the Labor Arbiter to continue the
proceedings on the Unions complaint.[13] SMFI et al. filed a
Motion for Reconsideration of the NLRC order but it was
denied, hence, they filed a petition for certiorari with this Court.
After the parties and the Solicitor General had filed their
respective pleadings, this Court, by Resolution of January 25,
1999, referred the case to the Court of Appeals pursuant to St.
Martin Funeral Homes v. NLRC.
murallos • david • Mendoza, s | 52
HELD:
NO. A perusal of the complaint shows that, indeed, the
particular acts of ULP alleged to have been committed by
SMFI were not specified; neither were the ultimate facts in
support thereof. In its Position Paper, however, the Union
detailed the particular acts of ULP attributed to SMFI and the
ultimate facts in support thereof. Section 7, Rule V of the New
Rules of Procedure of the NLRC provides:
Nature of Proceedings. The proceedings before the Labor
Arbiter shall be non-litigious in nature. Subject to the
requirements of due process, the technicalities of law and
procedure and the rules obtaining in the courts of law shall not
strictly apply thereto. The Labor Arbiter may avail himself of all
reasonable means to ascertain the facts of the controversy
speedily, including ocular inspection and examination of well-
informed persons. (Emphasis and underscoring supplied)
Article 4 of the Labor Code provides that All doubts in the
implementation and interpretation of the provisions of this
Code, including implementing rules and regulations, shall be
resolved in favor of labor. Since the seniority rule in the
promotion of employees has a bearing on salary and benefits,
it may, following a liberal construction of Article 261 of the
Labor Code, be considered an economic provision of the CBA.
As above-stated, the Union charges SMFI to have promoted
less senior employees, thus bypassing others who were more
senior and equally or more qualified. It may not be seriously
disputed that this charge is a gross or flagrant violation of the
seniority rule under the CBA, a ULP over which the Labor
Arbiter has jurisdiction. SMFI, at all events, questions why the
Court of Appeals came out with a finding that it (SMFI)
disregarded the seniority rule under the CBA when its petition
before said court merely raised a question of jurisdiction. The
Court of Appeals having affirmed the NLRC decision finding
that the Labor Arbiter has jurisdiction over the Unions
complaint and thus remanding it to the Labor Arbiter for
continuation of proceedings thereon, the appellate courts said
finding may be taken to have been made only for the purpose
of determining jurisdiction. As for the alleged ULP committed
under Article 248(i), for violation of a CBA, this Article is
qualified by Article 261 of the Labor Code, the pertinent portion
of which latter Article reads:
x x x violations of a Collective Bargaining Agreement, except
those which are gross in character, shall no longer be treated
as unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement. For purposes of
this article, gross violations of Collective Bargaining Agreement
shall mean flagrant and/or malicious refusal to comply with the
economic provisions of such agreement. (Emphasis and
underscoring supplied)
Silva v. NLRC instructs that for a ULP case to be cognizable by
the Labor Arbiter, and the NLRC to exercise its appellate
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
jurisdiction, the allegations in the complaint should show prima
facie the concurrence of two things, namely: (1) gross violation
of the CBA; AND (2) the violation pertains to the economic
provisions of the CBA.[17](Emphasis and underscoring
supplied) WHEREFORE, the Petition is DENIED.
San Miguel Food vs. SMC Employees Union
FACTS:
Respondent Union, was the bargaining agent of all the monthly
paid employees of petitioner San Miguel Foods, Incorporated
(SMFI). When some employees of SMFIs Finance Department,
through the Union, brought a grievance against Finance
Manager Gideon Montesa, for discrimination, favoritism, ULP,
not flexible, harassment, promoting divisiveness and
sectarianism, etc., before SMFI Plant Operations Manager
George Nava in accordance with the with Step 1 of the
grievance machinery adopted in the Collective Bargaining
Agreement.
SMFI failed to act on the complaint which prompted San
Miguel Corporation Employees Union PTWGO (the Union) to
file a case with the National Labor Relations Commission
against SMFI, its President Amadeo Veloso and Montesa. It
prayed that SMFI et al. be ordered to promote the therein
named employees with the corresponding pay increases or
adjustment including payment of salary differentials plus
attorney’ s fees, and to cease and desist from committing the
same unjust discrimination in matters of promotion.
SMFI filed a motion to dismiss on the alleged ground that the
grievance issue should be resolved in the grievance machinery
provided in the collective bargaining. The Union opposed the
motion to dismiss. The NLRC dismissed the complaint. On
appeal, the Court of Appeals affirmed the NLRC’s decision.
Hence, this petition.
ISSUE:
WON complaints for violation of seniority rule under the CBA
falls within the Labor Arbiter’s jurisdiction.
HELD:
As for the alleged ULP committed under Article 248 (i), for
violation of a CBA, this Article is qualified by Article 261 of the
Labor Code, provides that violations of a Collective Bargaining
Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved
as grievances under the Collective Bargaining Agreement.
As reflected in the above-quoted allegations of the Union in its
Position Paper, the Union charges SMFI to have violated the
grievance machinery provision in the CBA. The grievance
machinery provision in the CBA is not an economic provision,
murallos • david • Mendoza, s | 53
however, hence, the second requirement for a Labor Arbiter to
exercise jurisdiction of a ULP is not present.
The Union likewise charges SMFI, however, to have violated
the Job Security provision in the CBA, specifically the seniority
rule, in that SMFI “appointed less senior employees to
positions at its Finance Department, consequently intentionally
by-passing more senior employees who are deserving of said
appointment.
As above-stated, the Union charges SMFI to have promoted
less senior employees, thus bypassing others who were more
senior and equally or more qualified. It may not be seriously
disputed that this charge is a gross or flagrant violation of the
seniority rule under the CBA, a ULP over which the Labor
Arbiter has jurisdiction.
SMFI, at all events, questions why the Court of Appeals came
out with a finding that it (SMFI) disregarded the seniority rule
under the CBA when its petition before said court merely raised
a question of jurisdiction. The Court of Appeals having affirmed
the NLRC decision finding that the Labor Arbiter has
jurisdiction over the Union complaint and thus remanding it to
the Labor Arbiter for continuation of proceedings thereon, the
appellate court said finding may be taken to have been made
only for the purpose of determining jurisdiction.
COLLECTIVE BARGAINING
AGREEMENT
Davao Integrated Port Stevedoring vs.
Abarquez
220 SCRA 197
FACTS:
Petitioner Davao Integrated Port Stevedoring Services
(petitioner-company) and private respondent ATU-TUCP
(Union), the exclusive collective bargaining agent of the rank
and file workers of petitioner-company, entered into a collective
bargaining agreement (CBA) on October 16, 1985 which,
under Sections 1 and 3, Article VIII thereof, provide for sick
leave with pay benefits each year to its employees who have
rendered at least one (1) year of service with the company,
The conditions for the availment of the herein vacation and sick
leaves shall be in accordance with the above provided
Sections 1 and 2 hereof, respectively."
During the effectivity of the CBA of October 16, 1985 until three
(3) months after its renewal on April 15, 1989, or until July
1989 (a total of three (3) years and nine (9) months), all the
field workers of petitioner who are members of the regular
labor pool and the present regular extra labor pool who had
rendered at least 750 hours up to 1,500 hours were extended
sick leave with pay benefits. Any unenjoyed portion thereof at
the end of the current year was converted to cash and paid at
the end of the said one-year period pursuant to Sections 1 and
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
3, Article VIII of the CBA. The number of days of their sick
leave per year depends on the number of hours of service per
calendar year in accordance with the schedule provided in
Section 3, Article VIII of the CBA.
The commutation of the unenjoyed portion of the sick leave
with pay benefits of the intermittent workers or its conversion to
cash was, however, discontinued or withdrawn when petitioner-
company under a new assistant manager, Mr. Benjamin Marzo
(who replaced Mr. Cecilio Beltran, Jr. upon the latter's
resignation in June 1989), stopped the payment of its cash
equivalent on the ground that they are not entitled to the said
benefits under Sections 1 and 3 of the 1989 CBA.
The Union objected to the said discontinuance of commutation
or conversion to cash of the unenjoyed sick leave with pay
benefits of petitioner's intermittent workers contending that it is
a deviation from the true intent of the parties that negotiated
the CBA; that it would violate the principle in labor laws that
benefits already extended shall not be taken away and that it
would result in discrimination between the non-intermittent and
the intermittent workers of the petitioner-company.
Upon failure of the parties to amicably settle the issue on the
interpretation of Sections 1 and 3, Article VIII of the 1989 CBA,
the Union brought the matter for voluntary arbitration before
the National Conciliation and Mediation Board, Regional
Arbitration Branch XI at Davao City by way of complaint for
enforcement of the CBA. The parties mutually designated
public respondent Ruben Abarquez, Jr. to act as voluntary
arbitrator.
After the parties had filed their respective position papers, 2
public respondent Ruben Abarquez, Jr. issued on September
10, 1991 an Award in favor of the Union ruling that the regular
intermittent workers are entitled to commutation of their
unenjoyed sick leave with pay benefits under Sections 1 and 3
of the 1989 CBA,
Petitioner-company disagreed with the aforementioned ruling
of public respondent, hence, the instant petition.
Petitioner-company argued that it is clear from the language
and intent of the last sentence of Section 1, Article VIII of the
1989 CBA that only the regular workers whose work are not
intermittent are entitled to the benefit of conversion to cash of
the unenjoyed portion of sick leave, thus: ". . . And provided,
however, that only those regular workers of the Company
whose work are not intermittent are entitled to the herein sick
leave privilege."
Petitioner-company further argued that while the intermittent
workers were paid the cash equivalent of their unenjoyed sick
leave with pay benefits during the previous management of Mr.
Beltran who misinterpreted Sections 1 and 3 of Article VIII of
the 1985 CBA, it was well within petitioner-company's rights to
rectify the error it had committed and stop the payment of the
said sick leave with pay benefits. An error in payment,
according to petitioner-company, can never ripen into a
practice
murallos • david • Mendoza, s | 54
ISSUE:WON ONLY THOSE WHO ARE regular workers whose
work are not intermittent are entitled to the benefit of
conversion to cash of the unenjoyed portion of sick leave?
HELD:
NO.
A collective bargaining agreement (CBA), as used in Article
252 of the Labor Code, refers to a contract executed upon
request of either the employer or the exclusive bargaining
representative incorporating the agreement reached after
negotiations with respect to wages, hours of work and all other
terms and conditions of employment, including proposals for
adjusting any grievances or questions arising under such
agreement.
While the terms and conditions of a CBA constitute the law
between the parties, 3 it is not, however, an ordinary contract
to which is applied the principles of law governing ordinary
contracts. 4 A CBA, as a labor contract within the
contemplation of Article 1700 of the Civil Code of the
Philippines which governs the relations between labor and
capital, is not merely contractual in nature but impressed with
public interest, thus, it must yield to the common good. As
such, it must be construed liberally rather than narrowly and
technically, and the courts must place a practical and realistic
construction upon it, giving due consideration to the context in
which it is negotiated and purpose which it is intended to serve.
5 benefit should be distinguished from the variable number of
It is thus erroneous for petitioner to isolate Section 1, Article
VIII of the 1989 CBA from the other related section on sick
leave with pay benefits, specifically Section 3 thereof, in its
attempt to justify the discontinuance or withdrawal of the
privilege of commutation or conversion to cash of the
unenjoyed portion of the sick leave benefit to regular
intermittent workers. The manner they were deprived of the
privilege previously recognized and extended to them by
petitioner-company during the lifetime of the CBA of October
16, 1985 until three (3) months from its renewal on April 15,
1989, or a period of three (3) years and nine (9) months, is not
only tainted with arbitrariness but likewise discriminatory in
nature. Petitioner-company is of the mistaken notion that since
the privilege of commutation or conversion to cash of the
unenjoyed portion of the sick leave with pay benefits is found in
Section 1, Article VIII, only the regular non-intermittent workers
and no other can avail of the said privilege because of the
proviso found in the last sentence thereof.
It must be noted that the 1989 CBA has two (2) sections on
sick leave with pay benefits which apply to two (2) distinct
classes of workers in petitioner's company, namely: (1) the
regular non-intermittent workers or those workers who render a
daily eight-hour service to the company and are governed by
Section 1, Article VIII of the 1989 CBA; and (2) intermittent field
workers who are members of the regular labor pool and the
present regular extra labor pool as of the signing of the
agreement on April 15, 1989 or those workers who have
irregular working days and are governed by Section 3, Article
VIII of the 1989 CBA.
It is not disputed that both classes of workers are entitled to PT&T vs. NLRC
sick leave with pay benefits provided they comply with the 245 SCRA 193 (1995)
conditions set forth under Section 1 in relation to the last
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
paragraph of Section 3, to wit: (1) the employee-applicant must
be regular or must have rendered at least one year of service
with the company; and (2) the application must be
accompanied by a certification from a company-designated
physician.
Sick leave benefits, like other economic benefits stipulated in
the CBA such as maternity leave and vacation leave benefits,
among others, are by their nature, intended to be replacements
for regular income which otherwise would not be earned
because an employee is not working during the period of said
leaves. 6 They are non-contributory in nature, in the sense that
the employees contribute nothing to the operation of the
benefits. 7 By their nature, upon agreement of the parties, they
are intended to alleviate the economic condition of the workers.
After a careful examination of Section 1 in relation to Section 3,
Article VIII of the 1989 CBA in light of the facts and
circumstances attendant in the instant case, we find and so
hold that the last sentence of Section 1, Article VIII of the 1989
CBA, invoked by petitioner-company does not bar the regular
intermittent workers from the privilege of commutation or
conversion to cash of the unenjoyed portion of their sick leave
with pay benefits, if qualified. For the phrase "herein sick leave
privilege," as used in the last sentence of Section 1, refers to
the privilege of having a fixed 15-day sick leave with pay
which, as mandated by Section 1, only the non-intermittent
workers are entitled to. This fixed 15-day sick leave with pay
days of sick leave, not to exceed 15 days, extended to
intermittent workers under Section 3 depending on the number
of hours of service rendered to the company, including
overtime pursuant to the schedule provided therein. It is only
fair and reasonable for petitioner-company not to stipulate a
fixed 15-day sick leave with pay for its regular intermittent
workers since, as the term "intermittent" implies, there is
irregularity in their work-days. Reasonable and practical
interpretation must be placed on contractual provisions.
Interpetatio fienda est ut res magis valeat quam pereat. Such
interpretation is to be adopted, that the thing may continue to
have efficacy rather than fail. 8
We find the same to be a reasonable and practical distinction
readily discernible in Section 1, in relation to Section 3, Article
VIII of the 1989 CBA between the two classes of workers in the
company insofar as sick leave with pay benefits are
concerned. Any other distinction would cause discrimination on
the part of intermittent workers contrary to the intention of the
parties that mutually agreed in incorporating the questioned
provisions in the 1989 CBA.
Public respondent correctly observed that the parties to the
CBA clearly intended the same sick leave privilege to be
accorded the intermittent workers in the same way that they
are both given the same treatment with respect to vacation
leaves - non-commutable and non-cumulative. If they are
treated equally with respect to vacation leave privilege, with
more reason should they be on par with each other with
respect to sick leave privileges.
murallos • david • Mendoza, s | 55
FACTS
Grace de Guzman was initially hired by petitioner as a reliever,
specifically as a Supernumerary Project Worker, for a fixed
period from November 21, 1990 until April 20, 1991 vice one
C.F. Tenorio who went on maternity leave.[1] Under the Reliever
Agreement which she signed with petitioner company, her
employment was to be immediately terminated upon expiration
of the agreed period. Thereafter, from June 10, 1991 to July 1,
1991, and from July 19, 1991 to August 8, 1991, private
respondents services as reliever were again engaged by
petitioner, this time in replacement of one Erlinda F. Dizon who
went on leave during both periods.[2] After August 8, 1991, and
pursuant to their Reliever Agreement, her services were
terminated.
On September 2, 1991, private respondent was once more
asked to join petitioner company as a probationary employee,
the probationary period to cover 150 days. In the job
application form that was furnished her to be filled up for the
purpose, she indicated in the portion for civil status therein that
she was single although she had contracted marriage a few
months earlier, that is, on May 26, 1991.[3]
It now appears that private respondent had made the same
representation in the two successive reliever agreements
which she signed on June 10, 1991 and July 8, 1991. When
petitioner supposedly learned about the same later, its branch
supervisor in Baguio City, Delia M. Oficial, sent to private
respondent a memorandum dated January 15, 1992 requiring
her to explain the discrepancy. In that memorandum, she was
reminded about the companys policy of not accepting married
women for employment.[4]
In her reply letter dated January 17, 1992, private respondent
stated that she was not aware of PT&Ts policy regarding
married women at the time, and that all along she had not
deliberately hidden her true civil status.[5] Petitioner
nonetheless remained unconvinced by her
explanations. Private respondent was dismissed from the
company effective January 29, 1992,[6] which she readily
contested by initiating a complaint for illegal dismissal, coupled
with a claim for non-payment of cost of living allowances
(COLA), before the Regional Arbitration Branch of the National
Labor Relations Commission in Baguio City.
At the preliminary conference conducted in connection
therewith, private respondent volunteered the information, and
this was incorporated in the stipulation of facts between the
parties, that she had failed to remit the amount of P2,380.75 of
her collections. She then executed a promissory note for that
amount in favor of petitioner.[7] All of these took place in a
formal proceeding and with the agreement of the parties and/or
their counsel.
On November 23, 1993, Labor Arbiter Irenarco R. Rimando
handed down a decision declaring that private respondent,
who had already gained the status of a regular employee, was
illegally dismissed by petitioner.Her reinstatement, plus
payment of the corresponding back wages and COLA, was
correspondingly ordered, the labor arbiter being of the firmly
expressed view that the ground relied upon by petitioner in
dismissing private respondent was clearly insufficient, and that
it was apparent that she had been discriminated against on
account of her having contracted marriage in violation of
company rules.
On appeal to the National Labor Relations Commission
(NLRC), said public respondent upheld the labor arbiter and, in
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
its decision dated April 29, 1994, it ruled that private
respondent had indeed been the subject of an unjust and
unlawful discrimination by her employer, PT&T. However, the
decision of the labor arbiter was modified with the qualification
that Grace de Guzman deserved to be suspended for three
months in view of the dishonest nature of her acts which
should not be condoned. In all other respects, the NLRC
affirmed the decision of the labor arbiter, including the order for
the reinstatement of private respondent in her employment with
PT&T.
ISSUE: WON THE COMPANY POLICY IS VALID?
HELD:
NO.
ART. 136. Stipulation against marriage. - It shall be unlawful for
an employer to require as a condition of employment or
continuation of employment that a woman shall not get
married, or to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of
marriage.
This provision had a studied history for its origin can be traced
to Section 8 of Presidential Decree No. 148, [31] better known as
the Women and Child Labor Law, which amended paragraph
(c), Section 12 of Republic Act No. 679,[32] entitled An Act to
Regulate the Employment of Women and Children, to Provide
Penalties for Violations Thereof, and for Other Purposes. The
forerunner to Republic Act No. 679, on the other hand, was Act
No. 3071 which became law on March 16, 1923 and which
regulated the employment of women and children in shops,
factories, industrial, agricultural, and mercantile establishments
and other places of labor in the then Philippine Islands.
It would be worthwhile to reflect upon and adopt here the
rationalization in Zialcita, et al. vs. Philippine Air Lines,[33] a
decision that emanated from the Office of the President. There,
a policy of Philippine Air Lines requiring that prospective flight
attendants must be single and that they will be automatically
separated from the service once they marry was declared void,
it being violative of the clear mandate in Article 136 of the
Labor Code with regard to discrimination against married
women. Thus:
Of first impression is the incompatibility of the respondents
policy or regulation with the codal provision of law. Respondent
is resolute in its contention that Article 136 of the Labor Code
applies only to women employed in ordinary occupations and
that the prohibition against marriage of women engaged in
extraordinary occupations, like flight attendants, is fair and
reasonable, considering the pecularities of their chosen
profession.
We cannot subscribe to the line of reasoning pursued by
respondent. All along, it knew that the controverted policy has
already met its doom as early as March 13, 1973 when
Presidential Decree No. 148, otherwise known as the Women
and Child Labor Law, was promulgated. But for the timidity of
those affected or their labor unions in challenging the validity of
the policy, the same was able to obtain a momentary
reprieve. A close look at Section 8 of said decree, which
amended paragraph (c) of Section 12 of Republic Act No. 679,
murallos • david • Mendoza, s | 56
reveals that it is exactly the same provision
reproduced verbatim in Article 136 of the Labor Code, which
was promulgated on May 1, 1974 to take effect six (6) months
later, or on November 1, 1974.
It cannot be gainsaid that, with the reiteration of the same
provision in the new Labor Code, all policies and acts against it
are deemed illegal and therefore abrogated. True, Article 132
enjoins the Secretary of Labor to establish standards that will
ensure the safety and health of women employees and in
appropriate cases shall by regulation require employers to
determine appropriate minimum standards for termination in
special occupations, such as those of flight attendants, but that
is precisely the factor that militates against the policy of
respondent. The standards have not yet been established as
set forth in the first paragraph, nor has the Secretary of Labor
issued any regulation affecting flight attendants.
It is logical to presume that, in the absence of said standards
or regulations which are as yet to be established, the policy of
respondent against marriage is patently illegal. This finds
support in Section 9 of the New Constitution, which provides:
Sec. 9. The State shall afford protection to labor, promote full
employment and equality in employment, ensure equal work
opportunities regardless of sex, race, or creed, and regulate
the relations between workers and employees. The State shall
assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions
of work x x x.
Moreover, we cannot agree to the respondents proposition that
termination from employment of flight attendants on account of
marriage is a fair and reasonable standard designed for their
own health, safety, protection and welfare, as no basis has
been laid therefor. Actually, respondent claims that its concern
is not so much against the continued employment of the flight
attendant merely by reason of marriage as observed by
the Secretary of Labor, but rather on the consequence of
marriage-pregnancy. Respondent discussed at length in the
instant appeal the supposed ill effects of pregnancy on flight
attendants in the course of their employment. We feel that this
needs no further discussion as it had been adequately
explained by the Secretary of Labor in his decision of May 2,
1976.
In a vain attempt to give meaning to its position, respondent
went as far as invoking the provisions of Articles 52 and 216 of
the New Civil Code on the preservation of marriage as an
inviolable social institution and the family as a basic social
institution, respectively, as bases for its policy of non-marriage.
In both instances, respondent predicates absence of a flight
attendant from her home for long periods of time as
contributory to an unhappy married life. This is pure conjecture
not based on actual conditions, considering that, in this modern
world, sophisticated technology has narrowed the distance
from one place to another. Moreover, respondent overlooked
the fact that married flight attendants can program their lives to
adapt to prevailing circumstances and events.
Article 136 is not intended to apply only to women employed in
ordinary occupations, or it should have categorically expressed
so. The sweeping intendment of the law, be it on special or
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
ordinary occupations, is reflected in the whole text and
supported by Article 135 that speaks of non-discrimination on
the employment of women.
The judgment of the Court of Appeals in Gualberto, et al. vs.
Marinduque Mining & Industrial Corporation[34] considered as
void a policy of the same nature. In said case, respondent, in
dismissing from the service the complainant, invoked a policy
of the firm to consider female employees in the project it was
undertaking as separated the moment they get married due to
lack of facilities for married women. Respondent further
claimed that complainant was employed in the project with an
oral understanding that her services would be terminated when
she gets married. Branding the policy of the employer as an
example of discriminatory chauvinism tantamount to denying
equal employment opportunities to women simply on account
of their sex, the appellate court struck down said employer
policy as unlawful in view of its repugnance to the Civil Code,
Presidential Decree No. 148 and the Constitution.
Under American jurisprudence, job requirements which
establish employer preference or conditions relating to the
marital status of an employee are categorized as a sex-plus
discrimination where it is imposed on one sex and not on the
other. Further, the same should be evenly applied and must not
inflict adverse effects on a racial or sexual group which is
protected by federal job discrimination laws. Employment rules
that forbid or restrict the employment of married women, but do
not apply to married men, have been held to violate Title VII of
the United States Civil Rights Act of 1964, the main federal
statute prohibiting job discrimination against employees and
applicants on the basis of, among other things, sex.[35]
Further, it is not relevant that the rule is not directed against all
women but just against married women. And, where the
employer discriminates against married women, but not
against married men, the variable is sex and the discrimination
is unlawful.[36] Upon the other hand, a requirement that a
woman employee must remain unmarried could be justified as
a bona fide occupational qualification, or BFOQ, where the
particular requirements of the job would justify the same, but
not on the ground of a general principle, such as the
desirability of spreading work in the workplace. A requirement
of that nature would be valid provided it reflects an inherent
quality reasonably necessary for satisfactory job
performance. Thus, in one case, a no-marriage rule applicable
to both male and female flight attendants, was regarded as
unlawful since the restriction was not related to the job
performance of the flight attendants.
RFM CORPORATION-FLOUR DIVISION and SFI
FEEDS DIVISION VS KASAPIAN NG MANGGA-
GAWANG PINAGKAISA-RFM (KAMPI-NAFLU-
KMU) and SANDIGAN AT UGNAYAN NG
MANGGAGAWANG PINAGKAISA-SFI (SUMAPI-
NAFLU-KMU)
G.R. No. 162324 (February 04, 2009)
Facts:
Petitioner RFM Corporation, a domestic corporation entered
into collective bargainingagreements (CBAs) with the Kasapian
ng Manggagawang Pinagkaisa-RFM (KAMPI-NAFLU-KMU)
murallos • david • Mendoza, s | 57
and Sandigan at Ugnayan ng Manggagawang Pinagkaisa-SFI
(SUMAPI-NAFLU-KMU).
Under the CBA, RFM agreed to make payment to all daily paid
employees on Black Saturday, November 1 and December 31
if declared as special holidays by the national government.
During the first year of the effectivity of the CBAs in 2000,
December 31 which fell on a Sunday was declared by the
national government as a special holiday. Respondent unions
thus claimed payment of their members’ salaries, invoking the
CBA provision. RFM refused the claims for payment, averring
that December 31, 2000 was not compensable as it was a rest
day. The controversy resulted in a deadlock, drawing the
parties to submit the same for voluntary arbitration.
The Voluntary Arbitrator (VA) declared that the provision of the
CBA is clear, ruling in favor of KAMPI- NAFLU-KMU and
SUMAPI-NAFLU-KMU and ordered RFM to pay their salaries.
The Court of Appeals (CA) affirmed the decision.
ISSUE:
Whether or not the employees are entitled to the questioned
salary according to the provision of the CBA
HELD:
If the terms of a CBA are clear and have no doubt upon the
intention of the contracting parties, as in the herein questioned
provision, the literal meaning thereof shall prevail. That is
settled. As such, the daily-paid employees must be paid their
regular salaries on the holidays which are so declared by the
national government, regardless of whether they fall on rest
days.
Holiday pay is a legislated benefit enacted as part of the
Constitutional imperative that the State shall afford protection
to labor. Its purpose is not merely “to prevent diminution of the
monthly income of the workers on account of work
interruptions. In other words, although the worker is forced to
take a rest, he earns what he should earn, that is, his holiday
pay.”
The CBA is the law between the parties, hence, they are
obliged to comply with its provisions. Indeed, if petitioner and
respondents intended the provision in question to cover
payment only during holidays falling on work or weekdays, it
should have been so incorporated therein.
RFM maintains, however, that the parties failed to foresee a
situation where the special holiday would fall on a rest day. The
Court is not persuaded. The Labor Code specifically enjoins
that in case of doubt in the interpretation of any law or
provision affecting labor, it should be interpreted in favor of
labor.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
San Miguel Corp. vs. NLRC
204 SCRA 1 (1999)
Doctrine:
LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS;
COLLECTIVE BARGAINING AGREEMENT; COLLECTIVE
BARGAINING DEADLOCK; DEFINED; NOT PRESENT IN
CASE AT BAR. — Collective Bargaining Deadlock is defined
as "the situation between the labor and the management of the
company where there is failure in the collective bargaining
negotiations resulting in a stalemate". This situation, is non-
existent in the present case since there is a Board assigned on
the third level (Step 3) of the grievance machinery to resolve
the conflicting views of the parties. Instead of asking the
Conciliation Board composed of five representatives each from
the company and the union, to decide the conflict, petitioner
declared a deadlock, and thereafter, filed a notice of strike. For
failing to exhaust all the steps in the grievance machinery and
arbitration proceedings provided in the Collective Bargaining
Agreement, the notice of strike should have been dismissed by
the NLRC and private respondent union ordered to proceed
with the grievance and arbitration proceedings. In the case of
Liberal Labor Union vs. Phil. Can Co., the court declared as
illegal the strike staged by the union for not complying with the
grievance procedure provided in the collective bargaining
agreement, ruling that: ". . . the main purpose of the parties in
adopting a procedure in the settlement of their disputes is to
prevent a strike. This procedure must be followed in its entirety
if it is to achieve its objective . . . strikes held in violation of the
terms contained in the collective bargaining agreement are
illegal, specially when they provide for conclusive arbitration
clauses. These agreements must be strictly adhered to and
respected if their ends have to be achieved. . .)
Facts:
San Miguel Corporation (SMC), which allegedly needed to
streamline its operations due to financial losses shut down
some of its plants and declared 55 positions as redundant.
Consequently, the private respondent union (SMCEU) filed
several grievance cases for the said retrenched employees,
praying for the redeployment of the said employees to the
other divisions of the company. During the grievance
proceedings, however, most of the employees were
redeployed, while others accepted early retirement. As a result,
only 17 employees remained when the parties proceeded to
the third level of the grievance procedure. The private
respondent filed with the National Conciliation and Mediation
Board (NCMB) of the Department of Labor and Employment
(DOLE) a notice of strike. Petitioner, on the other hand, moved
to dismiss the notice of strike, but the NCMB failed to act on
the motion. Petitioner SMC filed a complaint with the
respondent NLRC praying for the dismissal of the notice of
strike, and an order compelling the respondent union to submit
to grievance and arbitration the issue listed in the notice of
strike, and the recovery of the expenses of litigation.
murallos • david • Mendoza, s | 58
Respondent NLRC came out with a minute resolution
dismissing the complaint. Aggrieved by the resolution,
petitioner found its way to this Court via the present petition.
Issue: whether or not notice of strike should be dismissed
Ruling:
Yes. In the case under consideration, the grounds relied upon
by the private respondent union are non-strikeable. Their
grounds appear more illusory than real. The Court held that the
violation of the CBA is chargeable against the private
respondent union. The Supreme Court granted the instant
petition. SMCEU-PTGWO was directed to complete the third
level of the Grievance Procedure and proceed with the
Arbitration proceedings if necessary.
MALAYANG SAMAHAN NG MGA
MANGGAGAWA SA M. GREENFIELD (MSMG-
UWP), et al., petitioners vs. vs. HON.
CRESENCIO J. RAMOS, NATIONAL LABOR
RELATIONS COMMISSION, M. GREENFIELD (B),
INC., et al., respondents
PURISIMA, J:
Disclaimer: Mahaba talaga tong case na to, nadigest ko na to for
corpo, but yung facts talaga niya is about labor, so yung may ***** sa
facts yun yung start ng labor problem nila hahahaha.
Summary: Pursuant to a union security clause in the CBA between
petitioner local union, affiliated with ULGWP, and respondent M.
Greenfield (B), Inc., the dismissal of several union officers and
employees was sought after being expelled from the federation. The
company either suspended and terminated petitioners without any
prior administrative investigation. Strikes were thereafter held
characterized with violence but attributable to both management and
the employees. In the unfair labor practice case challenging their
dismissal, the Labor Arbiter rendered judgment finding the termination
valid and that the act of disaffiliation and declaration of autonomy
constitutes disloyalty. This was affirmed on appeal by the NLRC, First
Division. A commissioner from the Third Division was designated when
one commissioner from the First Division retired and the other inhibited
himself from sitting on the case. Petitioners moved for reconsideration,
but was denied.
Facts:
The labor union or the “local union” is an affiliate of ULGWP or
the “federation.” The collective bargaining agreement names
its parties as “M. GREENFIELD, INC. (B)” (the company) and
“MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M.
GREENFIELD (B) (THE LABOR UNION)/UNITED LUMBER
AND GENERAL WORKERS OF THE PHILIPPINES
(ULGWP).”
The CBA contained in Article II:
A Union Security clause:
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
“SECTION 1. COVERAGE AND SCOPE. All employees who
are covered by this Agreement and presently members of the
UNION shall remain members of the UNION for the duration of
this Agreement as a condition precedent to continued
employment with the COMPANY.”
“SECTION 4. DISMISSAL. Any such employee mentioned in
Section 2 hereof, who fails to maintain his membership in the
UNION for non-payment of UNION dues, for resignation and
for violation of UNION’s Constitution and By-Laws and any
new employee as defined in Section 2 of this Article shall upon
written notice of such failure to join or to maintain membership
in the UNION and upon written recommendation to the
COMPANY by the UNION, be dismissed from the employment
by the COMPANY; provided, however, that the UNION shall
hold the COMPANY free and blameless from any and all
liabilities that may arise should the dismissed employee
question, in any manner, his dismissal; provided, further that
the matter of the employee’s dismissal under this Article may
be submitted as a grievance under Article XIII and, provided,
finally, that no such written recommendation shall be made
upon the COMPANY nor shall COMPANY be compelled to act
upon any such recommendation within the period of sixty (60)
days prior to the expiry date of this Agreement conformably to
law."
On September 12, 1986, a local union election was held under
the auspices of the federation wherein petitioner, Beda
Magdalena Villanueva, and the otherunion officers were
proclaimed as winners.
On March 21, 1987, a Petition for Impeachment was filed with
the federation by the defeated candidates in the local union
election.
On June 16, 1987, the federation conducted an audit of the
local union funds. The investigation did not yield any
unfavorable result and the local union officers were cleared of
the charges of anomaly in the custody, handling and
disposition of the union funds.
The 14 defeated candidates filed a Petition for
Impeachment/Expulsion of the local union officers with the
DOLE NCR on November 5, 1987. The same was dismissed
on March 2, 1988, by Med-Arbiter Renato Parungo for failure
to substantiate the charges and to present evidence in support
of the allegations.
On April 17, 1988, the local union held a general membership
meeting at the Caruncho Complex in Pasig. Several union
members failed to attend the meeting, prompting the Executive
Board to create a committee tasked to investigate the non-
attendance of several union members in the said assembly,
pursuant to Sections 4 and 5, Article V of the Constitution and
By-Laws of the union, which read:
murallos • david • Mendoza, s | 59
"Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi
paglahok sa lahat ng hakbangin ng unyon ng sinumang kasapi
o pinuno ay maaaring maging sanhi ng pagtitiwalag o
pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat araw
na nagkulang.”
“Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa
natatapos ang pulong ay ituturing na pagliban at maparusahan
ito ng alinsunod sa Article V, Seksyong 4 ng Saligang Batas na
ito. Sino mang kasapi o pisyales na mahuli and dating sa
takdang oras ng di lalampas sa isang oras ay magmumulta ng
P25.00 at babawasin sa sahod sa pamamagitan ng salary
deduction at higit sa isang oras ng pagdating ng huli ay
ituturing na pagliban.”
On June 27, 1988, the local union wrote the company a letter
requesting it to deduct the union fines from the wages/salaries
of those union members who failed to attend the general
membership meeting.
The Secretary General of the national federation disapproved
the resolution of the local union imposing the P50.00 fine. The
local union officers protested such action by the Federation.
On July 11, 1988, the Federation wrote the company a letter
advising the latter not to deduct the fifty-peso fine from the
salaries of the union members requesting that: "x x x any and
all future representations by [the local union] affecting a
number of members be first cleared from the federation before
corresponding action by the Company."
The following day, the company sent a reply to the local union’s
request in a letter, stating that it cannot deduct fines from the
employees’ salary without going against certain laws. The
company suggested that the union refer the matter to the
proper government office for resolution in order to avoid
placing the company in the middle of the issue.
The imposition of P50.00 fine became the subject of bitter
disagreement between the Federation and the local union
culminating in the latter’s declaration of general autonomy from
the former through Resolution No. 10 passed by the local
executive board and ratified by the general membership on
July 16, 1988.
In retaliation, the federation asked the company to stop the
remittance of the local union’s share in the education funds
effective August 1988.
This was objected to by the local union which demanded that
the education fund be remitted to it in full.
The company was thus constrained to file a Complaint for
Interpleader with a Petition for Declaratory Relief with the Med-
Arbitration Branch of the Department of Labor and
Employment.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
The Med-Arbiter ruled:
1. That the [Federation] through its local union officers shall
administer the [CBA].
2. That [the company] shall remit the P10,000.00 monthly labor
education program fund to the [federation] subject to the
condition that it shall use the said amount for its intended
purpose.
3. That the Treasurer of the [local union] shall be authorized to
collect from the 356 union members the amount of P50.00 as
penalty for their failure to attend the general membership
assembly on April 17, 1988. However, if petitioner-labor union
Officers could present the individual written authorizations of
the 356 union members, then the company is obligedto deduct
from the salaries of the 356 union members the P50.00 fine.
On appeal, Director Pura-Ferrer Calleja modified the Med-
Arbiter’s ruling: “the company should remit the amount of five
thousand pesos (P5,000.00) of the P10,000.00 monthly labor
education program fund to [the Federation] and the other
P5,000.00 to [the local union], both unions to use the same for
its intended purpose."
Meanwhile, on September 2, 1988, several local unions filed a
Petition for Audit and Examination of the federation and
education funds of [the Federation] which was granted by Med-
Arbiter Rasidali Abdullah on December 25, 1988.
On September 30, 1988, the officials of [the Federation] called
a Special National Executive Board Meeting at Nasipit, Agusan
del Norte where a Resolution was passed placing the [local
union] under trusteeship and appointing Cesar Clarete as
administrator.
On October 27, 1988, Clarete as administrator wrote the
company informing the latter of its designation of a certain
Alfredo Kalingking as local union president and "disauthorizing"
the incumbent union officers from representing the employees.
Petitioners protested this action by the national federation in a
letter to the company dated November 11, 1988.
On November 13, 1988, the petitioner union officers received
identical letters from the administrator requiring them to explain
within 72 hours why they should not be removed from their
office and expelled from union membership.
On November 26, 1988, petitioners replied:
(a) Questioning the validity of the alleged National Executive
Board Resolution placing their union under trusteeship;
(b) Justifying the action of their union in declaring a general
autonomy from [the federation] due to the latter’s inability to
murallos • david • Mendoza, s | 60
give proper educational, organizational and legal services to its
affiliates and the pendency of the audit of the federation funds;
(c) Advising that their union did not commit any act of disloyalty
as it has remained an affiliate of [the federation];
(d) Giving [the federation] a period of five (5) days to cease
and desist from further committing acts of coercion,
intimidation and harassment.
However, as early as November 21, 1988, the officers were
expelled from the [federation].
On the same day, the federation advised the company of the
expulsion of the 30 union officers and demanded their
separation from employment pursuant to the Union Security
Clause in their CBA. This demand was reiterated twice,
through letters dated February 21 and March 4, 1989,
respectively, to the company.
Thereafter, the Federation filed a Notice of Strike with the
National Conciliation and Mediation Board to compel the
company to effect the immediate termination of the expelled
union officers.
*****On March 7, 1989, under the pressure of a threatened
strike, the company terminated the 30 union officers from
employment, serving them identical copies of the termination
letter.
On that same day, the expelled union officers assigned in the
first shift were physically or bodily brought out of the company
premises by the company’s security guards. Likewise, those
assigned to the second shift were not allowed to report for
work. This provoked some of the members of the local union to
demonstrate their protest for the dismissal of the said union
officers. Some union members left their work posts and walked
out of the company premises.
The Federation, having achieved its objective, withdrew the
Notice of Strike filed with the NCMB.
On March 8, 1989, the petitioners filed a Notice of Strike with
the NCMB, DOLE, Manila, alleging the following grounds for
the strike:
(a) Discrimination
(b) Interference in union activities
(c) Mass dismissal of union officers and shop stewards
(d) Threats, coercion and intimidation
(e) Union busting
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
The following day, March 9, 1989, a strike vote referendum
was conducted and out of 2, 103 union members who cast
their votes, 2,086 members voted to declare a strike.
On March 10, 1989, the 30 dismissed union officers filed an
urgent petition with the Office of the Secretary of the
Department of Labor and Employment praying for the
suspension of the effects of their termination from employment.
However, the petition was dismissed by then Secretary
Franklin Drilon on April 11, 1989: "At this point in time, it is
clear that the dispute at M. Greenfield is purely an intra-union
matter. No mass lay-off is evident as the terminations have
been limited to those allegedly leading the secessionist group
leaving PETITIONER-LABOR UNION-THE FEDERATION to
form a union under the KMU. xxx"
On March 13 and 14, 1989, a total of 78 union shop stewards
were placed under preventive suspension by the company.
This prompted the local union members to again stage a walk-
out and resulted in the official declaration of strike at around
3:30 in the afternoon of March 14, 1989. The strike was
attended with violence, force and intimidation on both sides
resulting to physical injuries to several employees, both striking
and non-striking, and damage to company properties.
The employees who participated in the strike and allegedly
figured in the violent incident were placed under preventive
suspension by the company. The company also sent return-to-
work notices to the home addresses of the striking employees
thrice successively, on March 27, April 8 and April 31, 1989,
respectively. However, the company admitted that only 261
employees were eventually accepted back to work. Those who
did not respond to the return-to- work notice were sent
termination letters dated May 17, 1989.
On August 7, 1989, the petitioners filed a verified complaint
with the Arbitration Branch, National Capital Region, DOLE,
Manila, charging private respondents of unfair labor practice
which consists of union busting, illegal dismissal, illegal
suspension, interference in union activities, discrimination,
threats, intimidation, coercion, violence, and oppresion.
After the filing of the complaint, the lease contracts on the
company’s office and factory at Merville Subdivision,
Parañaque expired and were not renewed. Upon demand of
the owners of the premises, the company was compelled to
vacate its office and factory. Thereafter, the company
transferred its administration and account/client servicing
department at AFP-RSBS Industrial Park in Taguig, Metro
Manila. For failure to find a suitable place in Metro Manila for
relocation of its factory and manufacturing operations, the
company was constrained to move the said departments to
Tacloban, Leyte. Hence, on April 16, 1990, the company
accordingly notified its employees of a temporary shutdown in
operations. Employees who were interested in relocating to
Tacloban were advised to enlist on or before April 23, 1990.
murallos • david • Mendoza, s | 61
On December 15, 1992, finding the termination to be valid in
compliance with the union security clause of the collective
bargaining agreement, Labor Arbiter Cresencio Ramos
dismissed the complaint.
Petitioners then appealed to the NLRC. During its pendency,
Commissioner Romeo Putong retired from the service, leaving
only two commissioners, Commissioner Vicente Veloso III and
Hon. Chairman Bartolome
Carale in the First Division. When Commissioner Veloso
inhibited himself from the case, Commissioner Joaquin
Tanodra of the Third Division was temporarily designated to sit
in the First Division for the proper disposition of the case. The
First Division affirmed the Labor Arbiter’s disposition and
denied the MR.
Petitioners contend that
• their dismissal from work was effected in an arbitrary,
hasty, capricious and illegal manner because it was
undertaken by the company without any prior administrative
investigation;
• had the company conducted prior independent
investigation it would have found that their expulsion from the
union was unlawful similarly for lack of prior administrative
investigation;
• the federation cannot recommend the dismissal of the
union officers because it was not a principal party to the
collective bargaining agreement between the company and the
union;
• public respondents acted with grave abuse of
discretion when they declared petitioners’ dismissals as valid
and the union strike as illegal and in not declaring that
respondents were guilty of unfair labor practice.
Private respondents, on the other hand, maintain that
• the thirty dismissed employees who were former
officers of the federation have no cause of action against the
company, the termination of their employment having been
made upon the demand of the federation pursuant to the union
security clause of the CBA;
• the expelled officers of the local union were accorded
due process of law prior to their expulsion from their federation;
• the strike conducted by the petitioners was illegal for
noncompliance with the requirements; that the employees who
participated in the illegal strike and in the commission of
violence thereof were validly terminated from work;
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
• petitioners were deemed to have abandoned their
employment when they did not respond to the three return to
work notices sent to them;
• petitioner labor union has no legal personality to file
and prosecute the case for and on behalf of the individual
employees as the right to do so is personal to the latter; and
• the officers of the company cannot be liable because
as mere corporate officers, they acted within the scope of their
authority.
Issue:
WON respondent company was justified in dismissing
petitioner employees merely upon the labor federation's
demand for the enforcement of the union security clause
embodied in their collective bargaining agreement
Held:
Although this Court has ruled that union security clauses
embodied in the collective bargaining agreement may be
validly enforced and that dismissals pursuant thereto may
likewise be valid, this does not erode the fundamental
requirement of due process. The reason behind the
enforcement of union security clauses which is the sanctity and
inviolability of contracts cannot override one's right to due
process.
In the case under scrutiny, petitioner union officers were
expelled by the federation for allegedly committing acts of
disloyalty and/or inimical to the interest of ULGWP and in
violation of its Constitution and By-laws. Upon demand of the
federation, the company terminated the petitioners without
conducting a separate and independent investigation.
Respondent company did not inquire into the cause of the
expulsion and whether or not the federation had sufficient
grounds to effect the same. Relying merely upon the
federation's allegations, respondent company terminated
petitioners from employment when a separate inquiry could
have revealed if the federation had acted arbitrarily and
capriciously in expelling the union officers. Respondent
company's allegation that petitioners were accorded due
process is belied by the termination letters received by the
petitioners which state that the dismissal shall be immediately
effective.
As held in the cited case of Cariño, "the right of an employee to
be informed of the charges against him and to reasonable
opportunity to present his side in a controversy with either the
company or his own union is not wiped away by a union
security clause or a union shop clause in a collective
bargaining agreement. An employee is entitled to be protected
not only from a company which disregards his rights but also
from his own union the leadership of which could yield to the
murallos • david • Mendoza, s | 62
temptation of swift and arbitrary expulsion from membership
and mere dismissal from his job."
While respondent company may validly dismiss the employees
expelled by the union for disloyalty under the union security
clause of the collective bargaining agreement upon the
recommendation by the union, this dismissal should not be
done hastily and summarily thereby eroding the employees'
right to due process, self-organization and security of tenure.
The enforcement of union security clauses is authorized by law
provided such enforcement is not characterized by
arbitrariness, and always with due process. Even on the
assumption that the federation had valid grounds to expel the
union officers, due process requires that these union officers
be accorded a separate hearing by respondent company.
Palacol vs. Calleja
2 Feb. 1990
HOLY CROSS OF DAVAO COLLEGE, INC.,
petitioner, vs. HON. JEROME JOAQUIN, in his
capacity as Voluntary Arbitrator, and HOLY
CROSS OF DAVAO COLLEGE UNION
KALIPUNAN NG MANGGAGAWANG PILIPINO
(KAMAPI), respondents.
Facts:
A collective bargaining agreement, effective from June 1, 1986
to May 31, 1989 was entered into between petitioner Holy
Cross of Davao College, Inc. (hereafter Holy Cross), an
educational institution, and the affiliate labor organization
representing its employees, respondent Holy Cross of Davao
College Union-KAMAPI (hereafter KAMAPI). Shortly before the
expiration of the agreement, KAMAPI President Jose Lagahit,
wrote Holy Cross under date of April 12, 1989 expressing his
unions desire to renew the agreement, withal seeking its
extension for two months, or until July 31, 1989, on the ground
that the teachers were still on summer vacation and union
activities necessary or incident to the negotiation of a new
agreement could not yet be conducted.[1] Holy Cross
President Emilio P. Palma-Gil replied that he had no objection
to the extension sought, it being allowable under the collective
bargaining agreement.[2]
On July 24, 1989, Jose Lagahit convoked a meeting of the
KAMAPI membership for the purpose of electing a new set of
union officers, at which Rodolfo Gallera won election as
president. To the surprise of many, and with resultant
dissension among the membership, Galera forthwith initiated
discussions for the unions disaffiliation from the KAMAPI
Federation.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Galleras group subsequently formed a separate organization
known as the Holy Cross of Davao College Teachers Union,
and elected its own officers. For its part, the existing union,
KAMAPI, sent to the School its proposals for a new collective
bargaining contract; this it did on July 31, 1989, the expiry date
of the two-month extension it had sought.[3]
Holy Cross thereafter stopped deducting from the salaries and
wages of its teachers and employees the corresponding union
dues and special assessment (payable by union members),
and agency fees (payable by non-members), in accordance
with the check-off clause of the CBA,[4] prompting KAMAPI, on
September 1, 1989, to demand an explanation.
In the meantime, there ensued between the two unions a full-
blown action on the basic issue of representation, which was to
last for some two years. It began with the filing by the new
union (headed by Gallera) of a petition for certification election
in the Office of the Med-Arbiter.[5] KAMAPI responded by filing
a motion asking the Med-Arbiter to dismiss the petition. On
August 31, 1989, KAMAPI also advised Holy Cross of the
election of a new set of officers who would also comprise its
negotiating panel.[6]
The Med-Arbiter denied KAMAPIs motion to dismiss, and
ordered the holding of a certification election. On appeal,
however, the Secretary of Labor reversed the Med-Arbiters
ruling and ordered the dismissal of the petition for certification
election, which action was eventually sustained by this Court in
appropriate proceedings.
After its success in the certification election case KAMAPI
presented, on April 11, 1991, revised bargaining proposals to
Holy Cross;[7] and on July 11, 1991, it sent a letter to the
School asking for its counter-proposals. The School replied,
that it did not know if the Supreme Court had in fact affirmed
the Labor Secretarys decision in favor of KAMAPI as the
exclusive bargaining representative of the School employees,
whereupon KAMAPIs counsel furnished it with a copy of the
Courts resolution to that effect; and on September 7, 1991,
KAMAPI again wrote to Holy Cross asking for its counter-
proposals as regards the terms of a new CBA.
In response, Holy Cross declared that it would take no action
towards a new CBA without a definitive ruling on the proper
interpretation of Article I of the old CBA which should have
expired on May 31, 1989 (but, as above stated, had been
extended for two months at the KAMAPIs request). Said Article
provides inter alia for the automatic extension of the CBA for
another period of three (3) years counted from its expiration, if
the parties fail to agree on a renewal, modification or
amendment thereof. It appears, in fact, that the opinion of the
DOLE Regional Director on the meaning and import of said
article I had earlier been sought by the College president,
Emilio Palma Gil.[8]
murallos • david • Mendoza, s | 63
KAMAPI then sent another letter to Holy Cross, this time
accusing it of unfair labor practice for refusing to bargain
despite the formers repeated demands; and on the following
day, it filed a notice of strike with the National Mediation and
Conciliation Board..[9]
KAMAPI and Holy Cross were ordered to appear before
Conciliator-Mediator Agapito J. Adipen on October 2, 1991.
Several conciliation meetings were thereafter held between
them, and when these failed to bring about any amicable
settlement, the parties agreed to submit the case to voluntary
arbitration.[10] Both parties being of the view that the dispute
did indeed revolve around the interpretation of 1 and 2 of
Article I of the CBA, they submitted position papers explicitly
dealing with the following issues presented by them for
resolution to the voluntary arbitrator
The Voluntary Arbitrators conclusion:
petitioner Holy Cross had, in light of the evidence on record,
failed to negotiate with KAMAPI, adjudged as the collective
bargaining agent of the schools permanent and regular
teachers -- is a conclusion of fact that the Court will not review,
the inquiry at bar being limited to the issue of whether or not
said Voluntary Arbitrator had acted without or in excess of his
jurisdiction, or with grave abuse of discretion; nor does the
Court see its way clear, after analyzing the record, to
pronouncing that reasoned conclusion to have been made so
whimsically, capriciously, oppressively, or unjustifiably -- in
other words, attended by grave abuse of discretion amounting
to lack or excess of jurisdiction -- as to call for extension of the
Courts correcting hand through the extraordinary writ of
certiorari. Said finding should therefore be, and is hereby,
sustained.
Issue: won an employer is liable to pay to the union of its
employees, the amounts it failed to deduct from their salaries --
as union dues (with respect to union members) or agency fees
(as regards those not union members) -- in accordance with
the check-off provisions of the collective bargaining contract
(CBA) which it claims to have been automatically extended.
HELD:
No
A check-off is a process or device whereby the employer, on
agreement with the union recognized as the proper bargaining
representatives, or on prior authorization from its employees,
deducts union dues or agency fees from the latter's wages and
remits them directly to the union.[16] Its desirability to a labor
organization is quite evident; by it, it is assured of continuous
funding. Indeed, this Court has acknowledged that the system
of check-off is primarily for the benefit of the union and, only
indirectly, of the individual laborers.[17] When stipulated in a
collective bargaining agreement, or authorized in writing by the
employees concerned -- the labor Code and its Implementing
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Rules recognize it to be the duty of the employer to deduct
sums equivalent to the amount of union dues from the
employees' wages for direct remittance to the union, in order to
facilitate the collection of funds vital to the role of the union as
representative of employees in a bargaining unit to the role of
the union as representative of employees in a bargaining unit if
not, indeed, to its very existence. And it may be mentioned in
this connection that the right to union dues deducted pursuant
to a check of, pertains to the local union which continues to
represent the employees under the terms of a CBA, and not to
the parent association from which it has dissaffiliated.
The legal basis of check-off is thus found in statute or in
contract.[19] Statutory limitations on check-offs generally
require written authorization from each employee to deduct
wages; however, a resolution approved and adopted by a
majority of the union members at a general meeting will suffice
when the right to check-off has been recognized by the
employer, including collection of reasonable assessments in
connection with mandatory activities of the union, or other
special assessments and extraordinary fees.[20]
Authorization to effect a check-off of union dues is co-
terminous with the union affiliation or membership of
employees.[21] On the other hand, the collection of agency
fees in an amount equivalent to union dues and fees, from
employees who are not union members, is recognized by
Article 248 (e) of the Labor Code. No requirement of written
authorization from the non-union employee is imposed. The
employees acceptance of benefits resulting from a collective
bargaining agreement justifies the deduction of agency fees
from his pay and the unions entitlement thereto. In this aspect,
the legal basis of the unions right to agency fees is neither
contractual nor statutory, but quasi-contractual, deriving from
the established principle that non-union employees may not
unjustly enrich themselves by benefiting from employment
conditions negotiated by the bargaining union.[22]
No provision of law makes the employer directly liable for the
payment to the labor organization of union dues and
assessments that the former fails to deduct from its employees
salaries and wages pursuant to a check-off stipulation. The
employers failure to make the requisite deductions may
constitute a violation of a contractual commitment for which it
may incur liability for unfair labor practice.[23] But it does not
by that omission, incur liability to the union for the aggregate of
dues or assessments uncollected from the union members, or
agency fees for non-union employees.
Check-offs in truth impose as extra burden on the employer in
the form of additional administrative and bookkeeping costs. It
is a burden assumed by management at the instance of the
union and for its benefit, in order to facilitate the collection of
dues necessary for the latters life and sustenance. But the
obligation to pay union dues and agency fees obviously
devolves not upon the employer, but the individual employee. It
is a personal obligation not demandable from the employer
murallos • david • Mendoza, s | 64
upon default or refusal of the employer to consent to a check-
off. The only obligation of the employer under a check-off is to
effect the deductions and remit the collections to the union.
The principle of unjust enrichment necessarily precludes
recovery of union dues -- or agency fees -- from the employer,
these being, to repeat, obligations pertaining to the individual
worker in favor of the bargaining union. Where the employer
fails or refuses to implement a check-off agreement, logic and
prudence dictate that the union itself undertake the collection
of union dues and assessments from its members (and agency
fees from non-union employees); this, of course, without
prejudice to suing the employer for unfair labor practice.
There was thus no basis for the Voluntary Arbitrator to require
Holy Cross to assume liability for the union dues and
assessments, and agency fees that it had failed to deduct from
its employees salaries on the proffered plea that contrary to
established practice, KAMAPI had failed to submit to the
college comptroller every 8th day of the month, a list of
employees from whose pay union dues and the corresponding
agency fees were to be deducted.
BANK OF THE PHILIPPINE ISLANDS, petitioner,
vs. BPI EMPLOYEES UNION-DAVAO CHAPTER-
FEDERATION OF UNIONS IN BPI UNIBANK,
respondent.
Facts:
The Bangko Sentral ng Pilipinas approved the Articles of
Merger executed on January 20, 2000 by and between BPI,
herein petitioner, and FEBTC. 5 This Article and Plan of Merger
was approved by the Securities and Exchange Commission on
April 7, 2000.
Pursuant to the Article and Plan of Merger, all the assets and
liabilities of FEBTC were transferred to and absorbed by BPI
as the surviving corporation. FEBTC employees, including
those in its different branches across the country, were hired by
petitioner as its own employees, with their status and tenure
recognized and salaries and benefits maintained.
Respondent BPI Employees Union-Davao Chapter-Federation
of Unions in BPI Unibank (hereinafter the "Union," for brevity)
is the exclusive bargaining agent of BPI's rank and file
employees in Davao City. The former FEBTC rank-and-file
employees in Davao City did not belong to any labor union at
the time of the merger. Prior to the effectivity of the merger, or
on March 31, 2000, respondent Union invited said FEBTC
employees to a meeting regarding the Union Shop Clause
(Article II, Section 2) of the existing CBA between petitioner
BPI and respondent Union.
After the meeting called by the Union, some of the former
FEBTC employees joined the Union, while others refused.
Later, however, some of those who initially joined retracted
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
their membership. Respondent Union then sent notices to the
former FEBTC employees who refused to join, as well as those
who retracted their membership, and called them to a hearing
regarding the matter. When these former FEBTC employees
refused to attend the hearing, the president of the Union
requested BPI to implement the Union Shop Clause of the CBA
and to terminate their employment pursuant thereto. 10
After two months of management inaction on the request,
respondent Union informed petitioner BPI of its decision to
refer the issue of the implementation of the Union Shop Clause
of the CBA to the Grievance Committee. However, the issue
remained unresolved at this level and so it was subsequently
submitted for voluntary arbitration by the parties.
Voluntary Arbitrator Rosalina Letrondo-Montejo, in a Decision
12 dated November 23, 2001, ruled in favor of petitioner BPI's
interpretation that the former FEBTC employees were not
covered by the Union Security Clause of the CBA between the
Union and the Bank on the ground that the said employees
were not new employees who were hired and subsequently
regularized, but were absorbed employees "by operation of
law" because the "former employees of FEBTC can be
considered assets and liabilities of the absorbed corporation."
The Voluntary Arbitrator concluded that the former FEBTC
employees could not be compelled to join the Union, as it was
their constitutional right to join or not to join any organization.
Respondent Union filed a Motion for Reconsideration, but the
Voluntary Arbitrator denied the same in an Order dated March
25, 2002. Dissatisfied, respondent then appealed the Voluntary
Arbitrator's decision to the Court of Appeals.
Issue:
Whether or not the former FEBTC employees that were
absorbed by petitioner upon the merger between FEBTC and
BPI should be covered by the Union Shop Clause found in the
existing CBA between petitioner and respondent Union
Held:
"Union security" is a generic term which is applied to and
comprehends "closed shop," "union shop," "maintenance of
membership" or any other form of agreement which imposes
upon employees the obligation to acquire or retain union
membership as a condition affecting employment. There is
union shop when all new regular employees are required to
join the union within a certain period for their continued
employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of
the agreement, or who thereafter become members, must
maintain union membership as a condition for continued
employment until they are promoted or transferred out of the
bargaining unit or the agreement is terminated. A closed-shop,
on the other hand, may be defined as an enterprise in which,
by agreement between the employer and his employees or
murallos • david • Mendoza, s | 65
their representatives, no person may be employed in any or
certain agreed departments of the enterprise unless he or she
is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of
which the employees in interest are a part.
All employees in the bargaining unit covered by a Union Shop
Clause in their CBA with management are subject to its terms.
However, under law and jurisprudence, the following kinds of
employees are exempted from its coverage, namely,
employees who at the time the union shop agreement takes
effect are bona fide members of a religious organization which
prohibits its members from joining labor unions on religious
grounds; employees already in the service and already
members of a union other than the majority at the time the
union shop agreement took effect; confidential employees who
are excluded from the rank and file bargaining unit; and
employees excluded from the union shop by express terms of
the agreement.
When certain employees are obliged to join a particular union
as a requisite for continued employment, as in the case of
Union Security Clauses, this condition is a valid restriction of
the freedom or right not to join any labor organization because
it is in favor of unionism. This Court, on occasion, has even
held that a union security clause in a CBA is not a restriction of
the right of freedom of association guaranteed by the
Constitution.
Moreover, a closed shop agreement is an agreement whereby
an employer binds himself to hire only members of the
contracting union who must continue to remain members in
good standing to keep their jobs. It is "the most prized
achievement of unionism." It adds membership and
compulsory dues. By holding out to loyal members a promise
of employment in the closed shop, it wields group solidarity.
Indeed, the situation of the former FEBTC employees in this
case clearly does not fall within the first three exceptions to the
application of the Union Shop Clause discussed earlier. No
allegation or evidence of religious exemption or prior
membership in another union or engagement as a confidential
employee was presented by both parties. The sole category
therefore in which petitioner may prove its claim is the fourth
recognized exception or whether the former FEBTC employees
are excluded by the express terms of the existing CBA
between petitioner and respondent.
Olvido vs. CA
536 SCRA 81, (2007)
NOTE: Petitioners were regular employees of respondent
Sicaltek Manufacturing, Inc.
Petitioners R. Olvido, Suico, and Macasinag were also the Appellate court ruled that the dismissal was not attended by
President, Vice-President, and Sergeant-at-Arms, respectively, bad faith.
of respondent Sicaltek Employees Union-ADFLO (SEU-
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
ADFLO) while the other petitioners were the founding or
original members thereof.
FACTS:
Olvido, Suico, and Macasinag, with the assistance of
respondent Antonio C. Cedilla, President of their Federation,
ADFLO, filed a complaint for illegal lay-off, illegal deductions,
non-payment of overtime pay, premium pay for holiday, service
incentive leave pay, 13th month pay, and night shift differential
pay.
In the meantime, SEU-ADFLO filed a petition for certification
election on August 28, 1992. During the certification
proceedings, ADFLO and Sicaltek agreed that SEU-ADFLO
will withdraw the labor case in exchange for the company's
voluntary recognition of SEU-ADFLO as the sole bargaining
agent of its employees. The Med-Arbiter issued an order
certifying SEU-ADFLO as the sole bargaining agent of
Sicaltek's rank-and-file employees.
ADFLO then prepared a motion to dismiss the labor case, but
petitioners refused to sign it. Thus, ADFLO barred R. Olvido
and Suico from attending and participating in the initial
negotiations of the new Collective Bargaining Agreement
(CBA). This prompted petitioners to disaffiliate from SEU-
ADFLO. They formed another union, the Sicaltek Workers
Union (SWU), and filed a petition for certification election on
October 5, 1992. The petition was, however, dismissed due to
the earlier certification order by the Med-Arbiter. SWU
appealed to the Secretary of Labor and Employment, but the
appeal was also denied.
Sicaltek and SEU-ADFLO concluded their new CBA made
effective on October 1, 1992. SEU-ADFLO, through its new
President, respondent Dina Villagracia, forthwith demanded
that Sicaltek dismiss petitioners as provided in the Modified
Union Shop Provision in the CBA, due to falsification and
disloyalty. Sicaltek required petitioners to explain in writing why
they should not be dismissed. Petitioners countered that the
demand for their dismissal was pure harassment since the
certification issue between the two unions was still pending at
the time with the Secretary of Labor and Employment while the
falsification charge had no basis.
Sicaltek dismissed petitioners. Petitioners then filed a
complaint for unfair labor practice, illegal dismissal, damages,
and attorney's fees.
The Labor Arbiter dismissed the complaint for lack of merit. On
appeal, the NLRC reversed the decision of the Labor Arbiter. It
ordered petitioners' reinstatement to their former positions but
without backwages.
murallos • david • Mendoza, s | 66
ISSUE:
Whether or not Sicaltek is guilty of unfair labor practice
HELD:
YES
It has been the jurisprudential rule for quite some time that the
employer is not considered guilty of unfair labor practice if it
merely complied in good faith with the request of the certified
union for the dismissal of employees expelled from the union
pursuant to the union security clause in the CBA. Hence, the
company may not be ordered to grant either backwages or
financial assistance in the form of separation pay as a form of
penalty.
However, we have recently ruled that this doctrine is
inconsistent with Article 279 of the Labor Code, as amended by
Republic Act No. 6715. It is now provided in the Labor Code
that an employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
Thus, where reinstatement is adjudged, the award of
backwages and other benefits continues beyond the date of
the Labor Arbiter's decision ordering reinstatement and
extends up to the time said order of reinstatement is actually
carried out.
DECISION: Petitioners are hereby awarded full backwages
and other allowances, without qualifications and diminutions,
computed from the time they were illegally dismissed up to the
time they are actually reinstated. Let this case be remanded to
the Labor Arbiter for proper computation of the full backwages
due petitioners, in accordance with Article 279 of the Labor
Code, as expeditiously as possible
Inguillo vs. First Philippines Scales Inc.
588 SCRA 471 (2009)
CALTEX REFINERY EMPLOYEES ASSOCIATION
vs. BRILLANTES
FACTS:
1. Anticipating the expiration of their Collective Bargaining
Agreement on July 31, 1995, petitioner and private respondent
negotiated the terms and conditions of employment to be
contained in anew CBA. Some items in the new CBA were
amicably arrived at and agreed upon, but others were
unresolved.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
2. To settle the unresolved issues, eight meetings between the
parties were conducted. Because the parties failed to reach
any significant progress in these meetings, petitioner declared
a deadlock. On July 24, 1995, petitioner filed a notice of strike.
Six (6) conciliation meetings conducted by the NCMB failed to
settle the parties' differences. Then, the parties held marathon
meetings at the plant level, but this remedy proved also
unavailing.
3. During a strike vote on August 16, 1995, the members of
petitioner opted for a walkout. Private respondent then filed
with (DOLE) a petition for assumption of jurisdiction in
accordance with Article 263 (g) of the Labor Code.
4. In an Order dated August 22, 1995, public respondent
assumed jurisdiction "over the entire labor dispute at Caltex
(Philippines) Inc.," The parties are further directed to cease
and desist from committing any and all acts which might
exacerbate the situation.5. In defiance of the above Order
expressly restraining any strike or lockout, petitioner began a
strike and set up a picket in the premises of private respondent
on August 25, 1995. Thereafter, several company notices
directing the striking employees to return to work were issued,
but the members of petitioner defied them and continued their
mass action.
6. In the course of the strike, DOLE Undersecretary
Bienvenido Laguesma interceded and conducted several
conciliation meetings between the contending parties. He was
able to convince the members of the union to return to work
and to enter into a memorandum of agreement with private
respondent. On September 9, 1995, the picket lines were
finally lifted. Thereafter, the contending parties filed their
position papers pertaining to unresolved issues.
7. Because of the strike, private respondent terminated the
employment of some officers of petitioner union. The legality of
these dismissals brought additional contentious issues.
8. Again, the parties tried to resolve their differences through
conciliation. Failing to come to any substantial agreement, the
parties stopped further negotiation and, on September 13,
1995,decided to refer the problem to the secretary of labor and
employment:
ISSUE: Whether or not the Honorable Secretary of Labor and
Employment committed grave abuse of discretion in resolving
the instant labor dispute.
HELD:
1. Wage Increase : It is noteworthy that petitioner ignored this
argument of private respondent and based its demand for
wage increase not on the ground that they were as productive
as the Shell employees. Thus, we cannot attribute grave abuse
of discretion to public respondent.
murallos • david • Mendoza, s | 67
2. Union Security Clause: The secretary of labor assumed
jurisdiction over this labor dispute in an industry indispensable
to national interest, precisely to settle once and for all the
disputes over which he has jurisdiction at his level. In not
performing his duty, the secretary of labor committed a grave
abuse of discretion.
3. New Retirement Plan : We hold that public respondent did
not commit grave abuse of discretion in respecting the free and
voluntary decision of the employees in regard to the Provident
Plan and the irrevocable one-time option provided for in the
New Retirement Plan. The company gave them every
opportunity to choose, and they voluntarily exercised their
choice. The union cannot pretend to know better; it cannot
impose its will on them.
4. Grievance Machinery and Arbitration : We believe that the
procedure described by public respondent sufficiently complies
with the minimum requirement of the law. Public respondent
even provided for two steps in hearing grievances prior to their
referral to arbitration. The parties will decide on the number of
arbitrators who may hear a dispute only when the need for it
arises. Even the law itself does not specify the number of
arbitrators. In effect, the parties are afforded the latitude to
decide for themselves the composition of the grievance
machinery as they find appropriate to a particular situation. At
bottom, we cannot really impute grave abuse of discretion to
public respondent on this issue.
BPI vs. BPI Employees Union-Metro Manila
FACTS:
Bank of the Philippine Islands Employees Union-Metro Manila
is a legitimate labor organization and the sole and exclusive
bargaining representative of all regular rank-and-file
employees of BPI. The Union and BPI have an existing CBA,
which provides for loan benefits at relatively low interest rates.
However, BPI suddenly issued a “no negative data bank policy”
for the implementation or availment of the manpower loans,
which the Union objected to. Such objection resulted in a labor-
management dialogue, which left both parties unsatisfied with
the result. Thus, the parties raised it to the Voluntary Arbitrator.
The VA disapproved the new policy, having BPI appeal to the
Court of Appeals. But BPI did not get what it wanted. Thus, this
petition.
ISSUE:
W/N BPI can implement such policy even if it is not in the CBA.
HELD:
NO. A CBA refers to the negotiated contract between the
legitimate labor organization and the employer concerning
wages, hours of work, and all other terms and conditions of
employment. As in all other contracts, there must be clear
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
indications that the parties reached a meeting of the minds.
Therefore, the terms and conditions of a CBA constitute the
law between the parties. In this case, there was no provision
regarding the new policy that BPI was trying to push through. It
must be remembered that negotiations between an employer
and a union transpire before they agree on the terms and
conditions contained in the CBA. If the petitioner, indeed,
intended to include a “no negative data bank policy” in the
CBA, it should have been presented such proposal to the
Union during their negotiations.
PHILIPPINE JOURNALISTS, INC., Petitioner, vs.
JOURNAL EMPLOYEES UNION (JEU), FOR ITS
UNION MEMBER, MICHAEL ALFANTE,
Respondents.
FACTS:
Complainant Judith Pulido alleged that she was hired by
respondent as proofreader on 10 January 1991; that she was
receiving a monthly basic salary of P-15,493.66 plus P-155.00
longevity pay plus other benefits provided by law and their
Collective Bargaining Agreement; that on 21 February 2003, as
union president, she sent two letters to President Gloria
Arroyo, regarding their complaint of mismanagement being
committed by PIJ executive; that sometime in May 2003, the
union was furnished with a letter by Secretary Silvestre Afable,
Jr. head of Presidential Management Staff (PMS), endorsing
their letter-complaint to Ombudsman Simeon V. Marcelo; that
respondents took offense and started harassments to
complainant union president; that on 30 May 2003,
complainant received a letter from respondent Fundador
Soriano, International Edition managing editor, regarding
complainant’s attendance record; that complainant submitted
her reply to said memo on 02 June 2003; that on 06 June
2003, complainant received a memorandum of reprimand; that
on 04 July 2003, complainant received another memo from Mr.
Soriano, for not wearing her company ID, which she replied the
next day 05 July 2003; that on 04 August 2003, complainant
again received a memo regarding complainant’s tardiness; that
on 05 August 2003, complainant received another
memorandum asking her to explain why she should not be
accused of fraud, which she replied to on 07 August 2003; and
that on the same day between 3:00 to 4:00 P.M., Mr. Ernesto
"Estong" San Agustin, a staff of HRD handed her termination
paper. Complainant added that in her thirteen (13) years with
the company and after so many changes in its management
and executives, she had never done anything that will cause
them to issue a memorandum against her or her work attitude,
more so, reasons to terminate her services; that she got
dismissed because she was the Union President who was very
active in defending and pursuing the rights of her union
members, and in fighting against the abuses of respondent
Corporate Officers; and that she got the ire of respondents
when the employees filed a complaint against the Corporate
murallos • david • Mendoza, s | 68
Officers before Malacañang and which was later indorsed to
the Office of the Ombudsman.
The second complainant Michael L. Alfante alleged that he
started to work with respondents as computer technician at
Management Information System under manager Neri
Torrecampo on 16 May 2000; that on 15 July 2001, he was
regularized receiving a monthly salary of ₱9,070.00 plus other
monetary benefits; that sometime in 2001, Rico Pagkalinawan
replaced Torrecampo, which was opposed by complainant and
three other co-employees; that Pagkalinawan took offense of
their objection; that on 22 October 2002, complainant Alfante
received a memorandum from Pagkalinawan regarding his
excessive tardiness; that on 10 June 2003, complainant Alfante
received a memorandum from Executive Vice-President Arnold
Banares, requiring him to explain his side on the evaluation of
his performance submitted by manager Pagkalinawan; that
one week after complainant submitted his explanation, he was
handed his notice of dismissal on the ground of "poor
performance"; and that complainant was dismissed effective 28
July 2003.
Complainant Alfante submitted that he was dismissed without
just cause.In both instances, respondents maintained that they
did not commit any act of unfair labor practices; that they did
not commit acts tantamount to interfering, restraining, or
coercing employees in the exercise of their right to self-
organization. Respondents deny liabilities as far as
complainants’ monetary claims are concerned. Concerning
violations of the provision on wage distortion under Wage
Order No. 9, respondents stressed that complainants were not
affected since their salary is way over the minimum wage.
LA’s DECISION: WHEREFORE, foregoing premises
considered, judgment is hereby rendered, finding complainant
Judith Pulido to have been illegally dismissed. As such, she is
entitled to reinstatement and backwages from 07 August 2003
up to her actual or payroll reinstatement. To date,
complainant’s backwages is ₱294,379.54.Respondent
Philippine Journalist, Inc. is hereby ordered to pay complainant
Judith Pulido her backwages from 07 August 2003 up to her
actual or payroll reinstatement and to reinstate her to her
former position without loss of seniority right. Respondent is
further ordered to submit a report to this Office on
complainant’s reinstatement ten (10) days from receipt of this
decision. The charge of illegal dismissal by Michael Alfante is
hereby dismissed for lack of merit.The charge of unfair labor
practice is dismissed for lack of basis
Issue:
In view of the entry of judgment issued in G.R. No. 192478,
JEU and Alfante’s submissions on the illegality of his dismissal,
the non-payment of his rest days, and the violation of Minimum
Wage Order No. 9 shall no longer be considered and passed
upon.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
The sole remaining issue is whether or not petitioner’s denial of
respondents’ claims for funeral and bereavement aid granted
under Section 4, Article XIII of their CBA constituted a
diminution of benefits in violation of Article 100 of the Labor
Code.
Ruling:
The petition for review lacks merit. The nature and force of a
CBA are delineated in Honda Phils., Inc. v. Samahan ng
Malayang Manggagawa sa Honda,20 thuswise: A collective
bargaining agreement (or CBA) refers to the negotiated
contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other terms
and conditions of employment in a bargaining unit. As in all
contracts, the parties in a CBA may establish such stipulations,
clauses, terms and conditions as they may deem convenient
provided these are not contrary to law, morals, good customs,
public order or public policy. Thus, where the CBA is clear and
unambiguous, it becomes the law between the parties and
compliance therewith is mandated by the express policy of the
law.
Accordingly, the stipulations, clauses, terms and conditions of
the CBA, being the law between the parties, must be complied
with by them. The literal meaning of the stipulations of the
CBA, as with every other contract, control if they are clear and
leave no doubt upon the intention of the contracting parties.
The argument of petitioner that the grant of the funeral and
bereavement benefit was not voluntary but resulted from its
mistaken interpretation as to who was considered a legal
dependent of a regular employee deserves scant
consideration. To be sure, no doubtful or difficult question of
law was involved inasmuch as the several cogent statutes
existing at the time the CBA was entered into already defined
who were qualified as the legal dependents of another.
Moreover, the voluntariness of the grant of the benefit became
even manifest from petitioner’s admission that, despite the
memorandum it issued in 200033 in order to "correct" the
interpretation of the term legal dependent, it still approved in
2003 the claims for funeral and bereavement aid of two
employees, namely: (a) Cecille Bulacan, for the death of her
father; and (b) Charito Cartel, for the death of her mother,
based on its supposedly mistaken interpretation.
It is further worthy to note that petitioner granted claims for
funeral and bereavement aid as early as 1999, then issued a
memorandum in 2000 to correct its erroneous interpretation of
legal dependent under Section 4, Article XIII of the CBA. This
notwithstanding, the 2001-2004 CBA35 still contained the
same provision granting funeral or bereavement aid in case of
the death of a legal dependent of a regular employee without
differentiating the legal dependents according to the
employee's civil status as married or single. The continuity in
the grant of the funeral and bereavement aid to regular
employees for the death of their legal dependents has
murallos • david • Mendoza, s | 69
undoubtedly ripened into a company policy. With that, the
denial of Alfante's qualified claim for such benefit pursuant to
Section 4, Article XIII of the CBA violated the law prohibiting
the diminution of benefits. WHEREFORE, the Court AFFIRMS
the decision promulgated on February 5, 201 0; and ORDERS
petitioner to pay the costs of suit.
Mitsubishi Motors Phils. Salaried Employee
Union (MMPSEU) vs. Mitsubishi Motors Phils
Corp
FACTS:
The parties’ CBA covering the period August 1, 1996 to July
31, 1999 provides for the hospitalization insurance benefits for
the covered dependents.
Each employee shall pay one hundred pesos (₱100.00) per
month through salary deduction as his share in the payment of
the insurance premium for the above coverage with the
balance of the premium to be paid by the COMPANY. If the
COMPANY is self-insured the one hundred pesos (₱100.00)
per employee monthly contribution shall be given to the
COMPANY.
When the CBA expired on July 31, 1999, the parties executed
another CBA effective August 1, 1999 to July 31, 2002
incorporating the same provisions on dependents’
hospitalization insurance benefits but in the increased amount
of ₱50,000.00. The room and board expenses, as well as the
doctor’s call fees, were also increased to ₱375.00.
On separate occasions, three members of MMPSEU, namely,
Ernesto Calida (Calida), Hermie Juan Oabel (Oabel) and
Jocelyn Martin (Martin), filed claims for reimbursement of
hospitalization expenses of their dependents.
MMPC paid only a portion of their hospitalization insurance
claims, not the full amount. In the case of Calida, his wife,
Lanie, was confined at Sto. Tomas University Hospital from
September 4 to 9, 1998 due to Thyroidectomy. The medical
expenses incurred totalled ₱29,967.10. Of this amount,
₱9,000.00 representing professional fees was paid by
MEDICard Philippines, Inc. (MEDICard) which provides health
maintenance to Lanie. MMPC only paid ₱12,148.63. It did not
pay the ₱9,000.00 already paid by MEDICard and the
₱6,278.47 not covered by official receipts. It refused to give to
Calida the difference between the amount of medical expenses
of ₱27,427.10 which he claimed to be entitled to under the
CBA and the ₱12,148.63 which MMPC directly paid to the
hospital.
This prompted the MMPSEU President to write the MMPC
President demanding full payment of the hospitalization
benefits. Alleging discrimination against MMPSEU union
members, she pointed out that full reimbursement was given in
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
a similar claim filed by Luisito Cruz (Cruz), a member of the
Hourly Union. In a letter-reply, MMPC, through its Vice-
President for Industrial Relations Division, clarified that the
claims of the said MMPSEU members have already been paid
on the basis of official receipts submitted. It also denied the
charge of discrimination and explained that the case of Cruz
involved an entirely different matter since it concerned the
admissibility of certified true copies of documents for
reimbursement purposes, which case had been settled through
voluntary arbitration.
ISSUE:
WON CA ERRED WHEN IT REVERSED THE DECISION OF
THE VOLUNTARY ARBITRATOR.
RULING:
The Petition has no merit.
The Voluntary Arbitrator based his ruling on the opinion of Atty.
Funk that the employees may recover benefits from different
insurance providers without regard to the amount of benefits
paid by each. According to him, this view is consistent with the
theory of the collateral source rule.
The collateral source rule is designed to strike a balance
between two competing principles of tort law: (1) a plaintiff is
entitled to compensation sufficient to make him whole, but no
more; and (2) a defendant is liable for all damages that
proximately result from his wrong. A plaintiff who receives a
double recovery for a single tort enjoys a windfall; a defendant
who escapes, in whole or in part, liability for his wrong enjoys a
windfall. Because the law must sanction one windfall and deny
the other, it favors the victim of the wrong rather than the
wrongdoer.
Thus, the tortfeasor is required to bear the cost for the full
value of his or her negligent conduct even if it results in a
windfall for the innocent plaintiff.
National Union Of Workers In Hotel Restaurant
and Allied Industries (NUWHRAIN) – Philippine
Plaza Chapter Vs. Philippines Plaza Inc.
G.R. No. 177524, 23 July 2014
FACTS:
The Union is the collective bargaining agent of the rank-and-
file employees of respondent Philippine Plaza Holdings, Inc.
(PPHI).
The distributable amount will beshared equally by all HOTEL
employees, including managerial employees but excluding
expatriates, with three shares to be given to PPHI Staff and
three shares to the UNION (one for the national and two for the
local funds) that may be utilized by them for purposes for which
the UNION may decide.
murallos • david • Mendoza, s | 70
These provisions merely reiterated similar provisions found in entitlement to the payment of service charges from the entries
the PPHIUnion’s earlier collective bargaining agreement specified in its audit reports (specified entries/transactions).
executed on August 29, 1995.7
RULING OF NLRC:
On February 25, 1999, the Union’s Service Charge Committee
informed the Union President, through an audit report (1st In its decision16 of July 4, 2005, the NLRC reversed the LA’s
audit report),8 of uncollected service charges for the last decision and considered the specified entries/transactions as
quarter of 1998 amounting to ₱2,952,467.61. Specifically, the "service chargeable."
audit report referred to the service charges from the following
items: (1) "Journal Vouchers;" (2) "Banquet Other Revenue;"
and (3) "Staff and Promo." The Union presented this audit RULING OF CA:
report to the PPHI’s management during the February 26,
1999 Labor Management Cooperation Meeting (LMCM).9 The The CA granted the PPHI’s petition in its January 31, 2007
PPHI’s management responded that the Hotel Financial decision.19 It affirmed the LA’s decision but ordered the PPHI to
Controller would need to verify the audit report. pay the Union the amount of ₱80,063.88 as service charges
that it found was due under the circumstances. The CA
Through a letter dated June 9, 1999,10 the PPHI admitted declared that no service charges were due from the specified
liability for ₱80,063.88 out of the ₱2,952,467.61 thatthe Union entries/transactions; either these constituted "negotiated
claimed as uncollected service charges. The PPHI denied the contracts" and "special rates" that Section 68 of the CBA
rest of the Union’s claims because: (1) they were exempted explicitly excludes from the coverage of service charges, or
from the service charge being revenues from "special they were cited bases that the Union failed to sufficiently prove
promotions" (revenue from the Westin Gold Card sales) or
"negotiated contracts" (alleged revenue from the Maxi-Media ISSUE: Union may collect from the PPHI, under the terms
contract); (2) the revenues did not belong to the PPHI but to of the CBA, its share of the service charges
third-party suppliers; and (3) no revenue was realized from
HELD:
these transactions as they were actually expenses incurred for
the benefit of executives or by way of good-will to clients and NO.
government officials.
The PPHI did not violate Article 96 of the Labor Code when
During the July 12, 1999 LMCM,11 the Union maintained its they refused the Union’s claim for service charges on the
position on uncollected service charges so that a deadlock on specified entries/transactions
the issue ensued. The parties agreed to refer the matter to a
third party for the solution. They considered two options – Article 96 of the Labor Code provides for the minimum
voluntary arbitration or court action – and promised to get back percentage distribution between the employer and the
to each other on their chosen option. employees of the collected service charges, and its integration
inthe covered employees’ wages in the event the employer
In its formal reply (to the PPHI’sJune 9, 1999 letter) dated July terminates its policy of providing for its collection. It pertinently
21, 1999 (2nd audit report),12 the Union modified its claims. It reads:
claimed uncollected service charges from: (1) "Journal
Vouchers - Westin Gold Revenue and Maxi-Media" (F&B and Art. 96. Service Charges.
Rooms Barter); (2) "Banquet and Other Revenue;" and (3)
"Staff and Promo."
x x x In case the service charge is abolished, the share of the
covered employees shall be considered integrated in their
On August 10, 2000, the Union’s Service Charge Committee wages.
made another service charge audit report for the years 1997,
1998 and 1999 (3rd audit report).13 This 3rd audit report
reflected total uncollected service charges of ₱5,566,007.62 This last paragraph of Article 96 of the Labor Code presumes
from the following entries: (1) "Journal Vouchers;" (2) the practice of collecting service charges and the employer’s
"Guaranteed No Show;" (3) "Promotions;" and (4) "F & B termination of this practice. When this happens, Article 96
Revenue." The Union President presented the 3rd audit report requires the employer to incorporate the amount that the
to the PPHI on August 29, 2000. employees had been receiving as share of the collected
service charges into their wages. Incases where no service
charges had previously been collected (as where the employer
When the parties failed to reachan agreement, the Union, on never had any policy providing for collection of service charges
May 3, 2001, filed before the LA (Regional Arbitration Branch or had never imposed the collection of service charges on
of the NLRC) a complaint14 for non-payment of specified certain specified transactions), Article 96 will not operate.
service charges. The Union additionally charged the PPHI with
unfair labor practice (ULP) under Article 248 of the Labor
In this case, the CA found that the PPHI had not in fact been
Code, i.e., for violation of their collective bargaining agreement.
collecting services charges on the specified
entries/transactions that we pointed out as either falling under
In its decision15 dated April 30, 2002, the LA dismissed the "negotiated contracts" and/or "special rates" or did not involve
Union’s complaint for lack of merit. The LA declared that the a "sale of food, beverage, etc." Accordingly, Article 96 of the
Union failed to show, by law, contract and practice, its Labor Code finds no application in this case; the PPHI did not
abolish or terminate the implementation of any company policy
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 71
providing for the collection of service charges on specified
entries/transactions that could have otherwise rendered it liable
to pay an amount representing the covered employees’ share
in the alleged abolished service charges.
The Union’s claim for service charges for the year 1997 and
the early months of 1998 could not have yet prescribed at the
time it filed its complaint on May 3, 2001; Article 1155 of the
Civil Code applies suppletorily to Article 291 of the Labor Code
Article 291 (now Article 305)32 of the Labor Code states that "all
money claims arising from employer-employee relations x x x
shall be filed within three (3) years from the time the cause of
action accrued; otherwise, they shall forever be barred."
[Emphasis supplied]
Like other causes of action, the prescriptive period for money
claims under Article 291 of the Labor Code is subject to
interruption. And, in the absence of an equivalent Labor
Codeprovision for determining whether Article 291’s three-year
prescriptive period may be interrupted, Article 1155 of the Civil
Code33 may be applied. Thus, the period of prescription of
money claims under Article 291 is interrupted by: (1) the filing
of an action; (2) a written extrajudicial demand by the creditor;
and (3) a written acknowledgment of the debt by the debtor.
In the present petition, the facts indisputably showed that as
early as 1998, the Union demanded, via the 1st audit report,
from the PPHI the payment and/or distribution of the alleged
uncollected service charges for the year 1997. From thereon,
the parties went through negotiations (LCMC) to settle and
reconcile on their respective positions and claims.
Under these facts – the Union’s written extrajudicial demand
through its 1st audit report and the successive negotiation
meetings between the Union and the PPHI – the running of the
three-year prescriptive period under Article 291 of the Labor
Code could have effectively been interrupted. Consequently,
the Union’s claims for the alleged uncollected service charges
for the year 1997 could not have yet prescribed at the time it
filed its complaint on May 3, 2001.
This non-barring effect of prescription, notwithstanding (i.e.,
that the running of the three-year prescriptive period had
effectively been interrupted – by the Union's written
extrajudicial demand on the PPHI), the CA, as it affirmed the
LA, still correctly denied the Union's claims for the alleged
uncollected and/or undistributed service charges on the
specified entries/transactions for the year 1997 and the early
part of 1998. As the CA found and discussed in its decision,
and with which we agree as amply supported by factual and
legal bases, the nature of these specified entries/transactions
as either excepted from the collection of service charges or not
constituting a "sale of food, beverage, etc.," and the Union's
failure to support its claims by sufficient evidence warranted,
without doubt, the denial of the Union's action.
In sum, we find the CA's denial of the Union's claim for service
charges from the specified entries/transactions legally correct
and to be well supported by the facts and the law. The CA
correctly reversed for grave abuse of discretion the NLRC's
decision.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
ASSOCIATED LABOR UNIONS (ALU) vs. HON.
PURA FERRER-CALLEJA, as Director of the
Bureau of Labor Relations, Ministry of Labor
and Employment; PHILIPPINE SOCIAL
SECURITY LABOR UNION (PSSLU); SOUTHERN
PHILIPPINES FEDERATION OF LABOR (SPFL)
and GAW TRADING, INC.
G.R. No. L-77282 May 5, 1989
Facts:
Several days before the expiration of the CBA between
petitioner ALU and the Philippine Associated Smelting and
Refining Corporation (PASAR), private respondent National
Federation of Labor Unions (NAFLU) filed a petition for
certification election with the Bureau of Labor Relations
Regional Office in Tacloban city.
Petitioner sought the dismissal of the petition on the ground
that NAFLU failed to present the necessary signatures in
support of its petition.
Issues:
Whether or not the holding of certification elections in
organized establishments is mandated only where a petition is
filed questioning the majority status of the incumbent union,
and that it is only after establishing that a union has indeed a
considerable support that a certification election should be
ordered.
Ruling:
No. Reasoning in cases of organized establishments where
there exists a certified bargaining agent, what is essential is
whether the petition for certification election wasfiled within the
sixty-day freedom period. Article 256 of the Labor Code, as
amended by Executive Order No. 111, provides:
ART. 256. Representation issue in organized establishments.
In organized establishments, when a petition questioning the
majority status of the incumbentbargaining agent is filed before
the Department within the sixty-day period before the
expiration of the collective bargaining agreement, the Med-
Arbiter shall automatically order an election by secret ballot to
ascertain the will of the employees in the appropriate
bargaining unit. To have a valid election, at least a majority of
all eligible voters in the unit must have cast their votes. The
labor union receiving the majority of the valid votes cast shall
be certified as the exclusive bargaining agent of all the workers
in the unit.
When an election which provides for three or more choices
results in no choice receiving a majority of the valid votes cast,
murallos • david • Mendoza, s | 72
a run-off election shall be conducted between the choices
receiving the two highest number of votes.
Article 256 is clear. The mere filing of a petition for certification
election within the freedom period is sufficient basis for the
respondent Director to order the holding of a certification
election.
Was the petition filed by NAFLU instituted within the freedom
period? The record speaks for itself. The previous CBA entered
into by petitioner ALU was due to expire on April 1, 1987. The
petition for certification was filed by NAFLU on March 23, 1987,
well within the freedom period.
METROPOLITAN BANK & TRUST COMPANY
EMPLOYEES UNIONALU-TUCP and ANTONIO V.
BALINANG, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION (2nd Division) and
METROPOLITAN BANK & TRUST COMPANY,
respondents.
VITUG, J:
Facts:
On 25 May 1989, the bank entered into a collective bargaining
agreement with the MBTCEU, granting a monthly P900 wage
increase effective 01 January 1989, P600 wage increase
effective 01 January 1990, and P200 wage increase effective
01 January 1991. The MBTCEU had also bargained for the
inclusion of probationary employees in the list of employees
who would benefit from the first P900 increase but the bank
had adamantly refused to accede thereto. Consequently, only
regular employees as of 01 January 1989 were given the
increase to the exclusion of probationary employees.
Barely a month later, or on 01 July 1989, Republic Act 6727
[increase in the minimum wage of 25.00 per day, included yung
mga nakakareceive ng 100.00 above the minimum,
makakareceive din sila ng 25.00], "an act to rationalize wage
policy determination by establishing the mechanism and proper
standards therefor, . . .fixing new wage rates, providing wage
incentives for industrial dispersal to the countryside, and for
other purposes," took effect.
Pursuant to the provisions, the bank gave the P25 increase per
day, or P750 a month, to its probationary employees and to
those who had been promoted to regular or permanent status
before 01 July 1989 but whose daily rate was P100 and below.
The bank refused to give the same increase to its regular
employees who were receiving more than P100 per day and
recipients of the P900 CBA increase.
Contending that the bank's implementation of Republic Act
6727 resulted in the categorization of the employees into:
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
(a) the probationary employees as of 30 June 1989 and regular
employees receiving P100 or less a day who had been
promoted to permanent or regular status before 01 July 1989,
and
(b) the regular employees as of 01 January 1989, whose pay
was over P100 a day, and that, between the two groups, there
emerged a substantially reduced salary gap, the MBTCEU
sought from the bank the correction of the alleged distortion in
pay.
In order to avert an impending strike, the bank petitioned the
Secretary of Labor to assume jurisdiction over the case or to
certify the same to the National Labor Relations Commission
(NLRC) under Article 263 (g) of the Labor Code.
LABOR ARBITER; Eduardo J. Carpio: disagreed with the
bank's contention that the increase in its implementation of
Republic Act 6727 did not constitute a distortion because "only
143 employees or 6.8% of the bank's population of a total of
2,108 regular employees" benefited. He stressed that "it is not
necessary that a big number of wage earners within a
company be benefited by the mandatory increase before a
wage distortion may be considered to have taken place," it
being enough, he said, that such increase "result(s) in the
severe contraction of an intentional quantitative difference in
wage rates between employee groups." Since the "subjective
quantitative difference" between wage rates had been reduced
from P900.00 to barely P150.00, correction of the wage
distortion pursuant to Section 4(c) of the Rules Implementing
Republic Act 6727 should be made.
The respondent is hereby directed to restore to complainants
and their members the Nine Hundred (P900.00) Pesos CBA
wage gap they used to enjoy over non-regular employees as of
January 1, 1989 by granting them a Seven Hundred Fifty
(P750.00) Pesos monthly increase effective July 1, 1989.
APPEAL; NLRC: reversed LA. A wage distortion can arise only
in a situation where the salary structure is characterized by
intentional quantitative differences among employee groups
determined or fixed on the basis of skills, length of service, or
other logical basis of differentiation and such differences or
distinctions are obliterated or contracted by subsequent wage
increases.
PETITIONER; MR: Denied.
PETITIONER; CERTIORARI: charging the NLRC with grave
abuse of discretion by its refusal (a) "to acknowledge the
existence of a wage distortion in the wage or salary rates
between and among the employee groups of the respondent
bank as a result of the bank's partial implementation" of
Republic Act 6727 and (b) to give due course to its claim for an
across-the-board P25 increase under Republic Act No. 6727
Issue:
murallos • david • Mendoza, s | 73
WON a wage distortion exists as a consequence of the grant of
a wage increase to certain employees
WON the benefits provided under the CBA be equated with
those granted by law.
Held:
The term "wage distortion", under the Rules Implementing
Republic Act 6727, is defined, thus: "(p) Wage Distortion
means a situation where an increase in prescribed wage rates
results in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and
among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure
based on skills, length of service, or other logical bases of
differentiation."
In this case, the majority of the members of the NLRC, as well
as its dissenting member, agree that there is a wage distortion
arising from the bank's implementation of the P25 wage
increase; they do differ, however, on the extent of the distortion
that can warrant the adoption of corrective measures required
by the law. The "intentional quantitative differences" in wage
among employees of the bank has been set by the CBA to
about P900 per month as of 01 January 1989. It is intentional
as it has been arrived at through the collective bargaining
process to which the parties are thereby concluded.
The Solicitor General, in recommending the grant of due
course to the petition, has correctly emphasized that the
intention of the parties, whether the benefits under a collective
bargaining agreement should be equated with those granted
by law or not, unless there are compelling reasons otherwise,
must prevail and be given effect. In keeping then with the
intendment of the law and the agreement of the parties
themselves, along with the often repeated rule that all doubts
in the interpretation and implementation of labor laws should
be resolved in favor of labor, we must approximate an
acceptable quantitative difference between and among the
CBA agreed work levels.
Benguet Consolidated vs. BCI Ees Union
23 SCRA 46
NATIONAL BREWERY & ALLIED INDUSTRIES
LABOR UNION OF THE PHILIPPINES, plaintiff-
appellant, vs.SAN MIGUEL BREWERY, INC.,
THE INDEPENDENT SAN MIGUEL BREWERY
WORKERS' ASSOCIATION and ALL OTHER
UNKNOWN NON-UNION WORKERS OF THE
SAN MIGUEL BREWERY, INC., defendants-
appellees.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Facts:
Appellant National Brewery & Allied Industries Labor Union of
the Philippines is the bargaining representative of all regular
workers paid on the daily basis and of route helpers of San
Miguel Brewery, Inc.
On October 2, 1959, it signed a collective bargaining
agreement with the company, which provided, among other
things, that —
The COMPANY will deduct the UNION agency fee from the
wages of workers who are not members of the UNION,
provided the aforesaid workers authorized the COMPANY to
make such deductions in writing or if no such authorization is
given, if a competent court direct the COMPANY to make such
deduction.
Alleging that it had obtained benefits for all workers in the
company and that "defendant Independent S.M.B. Workers'
Association refused and still refuses to pay UNION AGENCY
FEE to the plaintiff UNION and defendant COMPANY also
refuses and still refuses to deduct the UNION AGENCY FEE
from the wages of workers who are not members of the plaintiff
UNION and remit the same to the latter," the union brought suit
in the Court of First Instance of Manila on November 17, 1960
for the collection of union agency fees under the bargaining
contract.
The lower court, in dismissing the complaint, held that there
was nothing in the Industrial Peace Act (Republic Act No. 875)
which would authorize the collection of agency fees and that
neither may such collection be justified under the rules of quasi
contract because the workers had not neglected their business
so as to warrant the intervention, of an officious manager. The
trial court also held the rules of agency inapplicable because
there was no agreement between the union and the workers
belonging to the other union as to the payment of fee nor was
there, said the court, any allegation in the complaint that the
amount of P4.00, which the union sought to collect from each
employee, was the expense incurred by the union in
representing him.
Its motion for reconsideration having been denied, the union
appealed to this Court.
The right of employees "to self-organization and to form, join or
assist labor organizations of their own choosing" (Sec. 3,
Republic Act No. 875) is a fundamental right that yields only to
the proviso that "nothing in this Act or statute of the Republic of
the Philippines shall preclude an employer from making an
agreement with a labor organization to require as a condition of
employment membership therein, if such labor organization is
the representative of the employees as provided in Section
twelve." (Sec. 4[a] [4])
Issue:
murallos • david • Mendoza, s | 74
WON agreement is a permissible form of union security under
Section 4(a)(4) as contended by the union?
Held:
In the case of General Motors Corp., 130 NLRB 481, the
National Labor Relations Board was faced with a similar
question. In that case, the union proposed to the company that
employees represented by it and new employees hired
thereafter be required as a condition of continued employment
after 30 days, following the date of the supplementary
agreement or of their initial employment (whichever was later)
to pay to the union a sum equal to the initiation fee and a
monthly sum equal to the regular dues required of union
members at each location. The company contended that the
clause was illegal under Section 7 and Section 8(a) (1) of the
National Labor Relations Act, as amended.1
In upholding the company's contention the Board held:
. . . any union-security agreement, including one providing for
an agency shop, necessarily interferes with the Section 7 right
of employees to refrain from assisting a labor organization, and
encourages membership in a labor organization. Such an
agreement is therefore clearly unlawful under Section 8(a) (1)
and (3), unless it is saved by the proviso to Section 8(a) (3) of
the Act. That proviso permits an employer to make an
agreement with a labor organization "to require as a condition
of employment membership therein on or after the thirtieth day
following the beginning of such employment or the effective
date of such agreement, whichever is later .. [Emphasis
supplied] There is, however, no other provision in the Act which
specifically legalizes the interference and encouragement
inherent in an agency-shop arrangement, and the only
question here is whether such an arrangement can be lawful
under the National Labor Relations Act in a State like Indiana,
where it is clear that an agreement requiring literal membership
is prohibited by State law. To hold the agency shop lawful, one
would have to conclude that Congress intended the word
"membership" in Sections 7 and 8(a)(3) to encompass not only
literal membership, but also other relationships between
employees and the union in the picture, while at the same time
intending that the same word in Section 14(b)
It may be argued that the Board reached this conclusion in
view of the right-to-work law of Indiana and that a different
result might have been reached where, as in the Philippines,
there is no right-to-work law. But the basic principle underlying
the decision in that case equally applies here, namely, that
where the parties are not free to require of employees
membership in a union as a condition of employment, neither
can they require a lesser form of union security. "For one
cannot waive a right he does not have." And herein lies the
error into which the union has fallen in arguing that the agency
shop agreement in this case can be justified under Section 4 The National Federation of Labor (NFL, for brevity) was
(a) (4) because "the lesser must of necessity be included in the
certified as the sole and exclusive bargaining representative of
greater." all the regular rank-and-file employees of New Pacific Timber &
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
For although a closed-shop agreement may validly be entered
into under Section 4 (a) (4) of the Industrial Peace Act
(National Labor Union v. Aguinaldo's Echague, Inc., 51 O.G. p.
2899, We held that the same cannot be made to apply to
employees who, like the employees in this case, are already in
the service and are members of another union. (Freeman Shirt
Mfg. Co. v. Court of Industrial Relations, G.R. No. L-16561,
January 28, 1961.) Hence, if a closed shop agreement cannot
be applied to these employees, neither may an agency fee, as
a lesser form of union security, be imposed upon them.
It is true, as the union claims, that whatever benefits the
majority union obtains from the employer accrue to its
members as well as to nonmembers. But this alone does not
justify the collection of agency fee from non-members. For the
benefits of a collective bargaining agreement are extended to
all employees regardless of their membership in the union
because to withhold the same from the nonmembers would be
to discriminate against them. (International Oil Factory Workers
Union (FFW) v. Martinez, et al., G.R. No. L-15560, Dec. 31,
1960).
Moreover, when a union bids to be the bargaining agent, it
voluntarily assumes the responsibility of representing all the
employees in the appropriate bargaining unit. That is why
Section 12 of the law states that "The labor organization
designated or selected for the purpose of collective bargaining
by the majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of all
employees in such unit for the purpose of collective bargaining
in respect to rates of pay, wages, hours of employment, or
other conditions of employment."
The union's contention, that nonmembers are "free riders" who
should be made to pay for benefits received by them is
answered in the concurring opinion of Mr. Jenkin in the
General Motors case, supra at 498, thus: This statement of the
limits to permissible encouragement of union membership
restricts unions, in contractually guaranteeing their own
financial security against "free riders," to agreements of the
types contemplated by Congress, i.e., "permitted union shop"
or "maintenance of membership contract," both being
agreements explicitly "requiring membership.
NEW PACIFIC TIMBER & SUPPLY COMPANY,
CO., INC., petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, MUSIB M. BUAT,
LEON G. GONZAGA, JR., ET AL., NATIONAL
FEDERATION OF LABOR, MARIANO AKILIT and
350 OTHERS, respondents
Facts:
murallos • david • Mendoza, s | 75
Supply Co., Inc. (hereinafter referred to as petitioner
Company). 1 As such, NFL started to negotiate for better terms
and conditions of employment for the employees in the
bargaining unit which it represented. However, the same was
allegedly met with stiff resistance by petitioner Company, so
that the former was prompted to file a complaint for unfair labor
practice (ULP) against the latter on the ground of refusal to
bargain collectively.
On March 31, 1987, then Executive Labor Arbiter Hakim S.
Abdulwahid issued an order declaring (a) herein petitioner
Company guilty of ULP; and (b) the CBA proposals submitted
by the NFL as the CBA between the regular rank-and-file
employees in the bargaining unit and petitioner Company. 3
Petitioner Company appealed the above order to the NLRC.
On November 15, 1989, the NLRC rendered a decision
dismissing the appeal for lack of merit. A motion for
reconsideration thereof was, likewise, denied in a Resolution,
dated November 12, 1990. Unsatisfied, petitioner Company
filed a petition for certiorari with this Court. But the Court
dismissed said petition in a Resolution, dated January 21,
1991.
Thereafter, the records of the case were remanded to the
arbitration branch of origin for the execution of Labor Arbiter
Abdulwahid’s Order, dated March 31, 1987, granting monetary
benefits consisting of wage increases, housing allowances,
bonuses, etc. to the regular rank-and-file employees. Following
a series of conferences to thresh out the details of
computation, Labor Arbiter Reynaldo S. Villena issued an
Order, dated October 18, 1993, directing petitioner Company to
pay the 142 employees entitled to the aforesaid benefits the
respective amounts due them under the CBA. Petitioner
Company complied; and, the corresponding quitclaims were
executed.
However, notwithstanding such manifestation, a "Petition for
Relief" was filed in behalf of 186 of the private respondents
"Mariano J. Akilit and 350 others” on May 12, 1994. In their
petition, they claimed that they were wrongfully excluded from
enjoying the benefits under the CBA since the agreement with
NFL and petitioner Company limited the CBA's implementation
to only the 142 rank-and-file employees enumerated. They
claimed that NFL's misrepresentations had precluded them
from appealing their exclusion. Treating the petition for relief as
an appeal, the NLRC entertained the same. On August 4,
1994, said commission issued a resolution 8 declaring that the
186 excluded employees "form part and parcel of the then
existing rank-and-file bargaining unit" and were, therefore,
entitled to the benefits under the CBA.
Issue:
May the term of a Collective Bargaining Agreement (CBA) as
to its economic provisions be extended beyond the term
expressly stipulated therein, and, in the absence of a new
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
CBA, even beyond the three-year period provided by law? Are
employees hired after the stipulated term of a CBA entitled to
the benefits provided thereunder?
Held:
Article 253 of the Labor Code explicitly provides:
ARTICLE 253. Duty to bargain collectively when there exists a
collective bargaining agreement. — When there is a collective
bargaining agreement, the duty to bargain collectively shall also mean
that neither party shall terminate nor modify such agreement during its
lifetime. However, either party can serve a written notice to terminate
or modify the agreement at least sixty (60) days prior to its expiration
date. It shall be the duty of both parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is
reached by the parties.(Italics supplied.)
It is clear from the above provision of law that until a new
Collective Bargaining Agreement has been executed by and
between the parties, they are duty-bound to keep the status
quo and to continue in full force and effect the terms and
conditions of the existing agreement. The law does not provide
for any exception nor qualification as to which of the economic
provisions of the existing agreement are to retain force and
effect; therefore, it must be understood as encompassing all
the terms and conditions in the said agreement.
In the case at bar, no new agreement was entered into by and
between petitioner Company and NFL pending appeal of the
decision in NLRC Case No. RAB-IX-0334-82; nor were any of
the economic provisions and/or terms and conditions
pertaining to monetary benefits in the existing agreement
modified or altered. Therefore, the existing CBA in its entirety,
continues to have legal effect.
In the same vein, the benefits under the CBA in the instant
case should be extended to those employees who only
became such after the year 1984. To exclude them would
constitute undue discrimination and deprive them of monetary
benefits they would otherwise be entitled to under a new
collective bargaining contract to which they would have been
parties. Since in this particular case, no new agreement had
been entered into after the CBA's stipulated term, it is only fair
and just that the employees hired thereafter be included in the
existing CBA. This is in consonance with our ruling that the
terms and conditions of a collective bargaining agreement
continue to have force and effect even beyond the stipulated
term when no new agreement is executed by and between the
parties to avoid or prevent the situation where no collective
bargaining agreement at all would govern between the
employer company and its employees
General Milling Corporation-Independent Labor
Union (GMC-ILU) vs. General Milling
Corporation/General Milling Corporation
murallos • david • Mendoza, s | 76
G.R. No. 183122
General Milling Corporation/General Milling
Corporation vs. General Milling Corporation-
Independent Labor Union (GMC-ILU), et al.
G.R. No. 183889
FACTS: On 28 April 1989, GMC and the Union entered into a
collective bargaining agreement (CBA) which provided, among
other terms, the latter’s representation of the collective
bargaining unit for a three-year term made to retroact to 1
December 1988. On 29 November 1991 or one day before the
expiration of the subject CBA, the Union sent a draft CBA
proposal to GMC, with a request for counter-proposals from
the latter. In view of GMC’s failure to comply with said request,
the Union commenced the complaint for unfair labor practice
which was dismissed for lack of merit. On appeal, said
dismissal was reversed and set aside in the 30 January 1998
decision rendered by the NLRC, the dispositive portion of
which states:
“WHEREFORE, premises considered, the instant
appeal is hereby GRANTED. The Decision dated December
21, 1993 is hereby VACATED and SET ASIDE and a new one
issued ordering the imposition upon the respondent company
of the complainant union[‘s] draft CBA proposal for the
remaining two years duration of the original CBA which is from
December 1, 1991 to November 30, 1993…
SO ORDERED.”
Since the abovementioned decision was reconsidered and set
aside by the NLRC, the Union filed the petitions for certiorari
before the CA, which in turn reversed and set aside the
NLRC’s resolution and reinstated the aforesaid 30 January
1998 decision. Aggrieved by the CA’s resolution denying its
motion for reconsideration, GMC elevated the case to this
Court via the petition for review on certiorari. In a decision
dated 11 February 2004 rendered by the Court’s then Second
Division, the CA’s 30 January 1998 decision and 26 October
2000 resolution were affirmed, upon the following findings and
conclusions, to wit:
“GMC’s failure to make a timely reply to the proposals
presented by the union is indicative of its utter lack of interest
in bargaining with the union. Its excuse that it felt the union no
longer represented the worker, was mainly dilatory as it turned
out to be utterly baseless.
We hold that GMC’s refusal to make a counter proposal to the
union’s proposal for CBA negotiation is an indication of its bad
faith. Where the employer did not even bother to submit an
answer to the bargaining proposals of the union, there is a
clear evasion of the duty to bargain collectively.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
Failing to comply with the mandatory obligation to submit a
reply to the union’s proposals, GMC violated its duty to bargain
collectively, making it liable for unfair labor practice. Perforce,
the Court of Appeals did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction in finding that GMC
is, under the circumstances, guilty of unfair labor practice.
(I)t would be unfair to the union and its members if the terms
and conditions contained in the old CBA would continue to be
imposed on GMC’s employees for the remaining two (2) years
of the CBA’s duration. We are not inclined to gratify GMC with
an extended term of the old CBA after it resorted to delaying
tactics to prevent negotiations. Since it was GMC which
violated the duty to bargain collectively, it had lost its statutory
right to negotiate or renegotiate the terms and conditions of the
draft CBA proposed by the union.”
xxxx
Under ordinary circumstances, it is not obligatory upon either
side of a labor controversy to precipitately accept or agree to
the proposals of the other. But an erring party should not be
allowed with impunity to schemes feigning negotiations by
going through empty gestures. Thus, by imposing on GMC the
provisions of the draft CBA proposed by the union, in our view,
the interests of equity and fair play were properly served and
both the parties regained equal footing, which was lost when
GMC thwarted the negotiations for new economic terms of the
CBA. With the ensuing finality of the foregoing decision, the
Union filed a motion for issuance of a writ of execution dated
21 March 2005, to enforce the claims of the covered
employees which it computed in the sum of P433,786,786.36
and to require GMC to produce said employee’s time cards for
the purpose of computing their overtime pay, night shift
differentials and labor standard benefits for work rendered on
rest days, legal holidays and special holidays. GMC filed a
petition for review on certiorari.
ISSUE:
Whether the imposed CBA has full force and effect considering
that it was not agreed upon by the Union and GMC.
HELD:
Anent its period of effectivity, Article XIV of the imposed CBA
provides that "(t)his Agreement shall be in full force and effect
for a period of five (5) years from 1 December 1991, provided
that sixty (60) days prior to the lapse of the third year of
effectivity hereof, the parties shall open negotiations on
economic aspect for the fourth and fifth years effectivity of this
Agreement." Considering that no new CBA had been, in the
meantime, agreed upon by GMC and the Union, we find that
the CA correctly ruled in CA-G.R. CEB-SP No. 02226 that,
pursuant to Article 253 of the Labor Code, the provisions of the
imposed CBA continues to have full force and effect until a new
CBA has been entered into by the parties. Article 253
murallos • david • Mendoza, s | 77
mandates the parties to keep the status quo and to continue in
full force and effect the terms and conditions of the existing
agreement during the 60-day period prior to the expiration of
the old CBA and/or until a new agreement is reached by the
parties. In the same manner that it does not provide for any
exception nor qualification on which economic provisions of the
existing agreement are to retain its force and effect, the law
does not distinguish between a CBA duly agreed upon by the
parties and an imposed CBA like the one under consideration.
FVC Labor union – Phil Transport and General
Workers Org. (PVCLU-PTGWO) vs. Sama-
samang Nagkakaisang Manggagawa sa FVC-
Solidarity of Independent and General Labor
Organization (SANAMA-FVC-SIGLO)
GR 176249, 27 Nov 2009
UNION OF FILIPRO EMPOYEES VS. NLRC
FACTS:
On June 22, 1988, the petitioner Union of the Filipro
Employees, the sole and exclusive bargaining agent of all
rank-and-file employees of Nestle Philippines, (private
respondent) filed a Notice of Strike at the DOLE raising the
issues of CBA deadlock and unfair labor practice. Private
respondent assailed the legal personality of the proponents of
the said notice of strike to represent the Nestle employees,
before the NCMB. This notwithstanding, the NCMB proceeded
to invite the parties to attend the conciliation meetings and to
which private respondent failed to attend contending that it will
deal only with a negotiating panel duly constituted and
mandated in accordance with the UFE Constitution and By-
laws. Thereafter, Company terminated from employment all
UFE Union officers, and all the members of the negotiating
panel for instigating and knowingly participating in a strike
staged at the Makati, Alabang, Cabuyao and Cagayan de Oro
on September 11, 1987 without any notice of strike filed and a
strike vote obtained for the purpose. The union filed a
complaint for illegal dismissal. LA upheld the validity of the
dismissal; NLRC en banc affirmed. Subsequently, company
concluded separate CBAs with the general membership of the
union at Cebu/Davao and Cagayan de Oro units; Assailing the
validity of these agreements, the union filed a case of ULP
against the company with the NLRC-NCR Arbitration Branch
Efforts to resolve the dispute amicably were taken by the
NCMB but yielded negative result. Petitioner filed a motion
asking the Secretary of Labor to assume jurisdiction over the
dispute of deadlock in collective bargaining between the
parties. On October 28, 1988, Labor Secretary Franklin Drilon
“certified” to the NLRC the said dispute between the UFE and
Nestle, Philippines.. which reads as follows: xxx “The NLRC is
further directed to call all the parties immediately and resolve
the CBA deadlock within twenty (20) days from submission of
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
the case for resolution.” Second Division of the NLRC
promulgated a resolution granting wage increase and other
benefits to Nestle’s employees, ruling on non-economic issues,
as well as absolving the private respondent of the Unfair Labor
Practice charge. Petitioner finds said resolution to be
inadequate and accordingly, does not agree therewith. It filed a
motion for reconsideration, denied. Hence, this petition.
ISSUE:
WON whether or not the second division of the NLRC acted
without jurisdiction in rendering the assailed resolution, the
same being rendered only by a division of the public
respondent and not by en banc
HELD:
This case was certified on October 28, 1988 when existing
rules prescribed that, it is incumbent upon the Commission en
banc to decide or resolve a certified dispute. However, R.A.
6715 took effect during the pendency of this case. Aside from
vesting upon each division the power to adjudicate cases filed
before the Commission, said Act further provides that the
divisions of the Commission shall have exclusive appellate
jurisdiction over cases within their respective territorial
jurisdiction. Section 5 of RA 6715 provides as follows: xxxx The
Commission may sit en banc or in five (5) divisions, each
composed of three (3) members. The Commission shall sit en
banc only for purposes of promulgating rules and regulations
governing the hearing and disposition of cases before any of
its divisions and regional branches and formulating policies
affecting its administration and operations. The Commission
shall exercise its adjudicatory and all other powers, functions
and duties through its divisions. xxxx In view of the enactment
of Republic Act 6715, the aforementioned rules requiring the
Commission en banc to decide or resolve a certified dispute
have accordingly been repealed. Confirmed in Administrative
Order No. 36 (Series of 1989) promulgated by the Secretary
under his delegated rule-making power. Moreover, it is to be
emphasized and it is a matter of judicial notice that since the
effectivity of R.A. 6715, many cases have already been
decided by the 5 divisions of the NLRC. We find no legal
justification in entertaining petitioner’s claim considering that
the clear intent of the amendatory provision is to expedite the
disposition of labor cases filed before the Commission. To rule
otherwise would not be congruous to the proper administration
of justice. ACCORDINGLY, PREMISES CONSIDERED, the
petition is DISMISSED. The Resolutions of the NLRC, dated
June 5, 1989 and August 8, 1989 are AFFIRMED, except
insofar as the ruling absolving the private respondent of unfair
labor practice which is declared SET ASIDE
MANILA ELECTRIC COMPANY vs. SECRETARY
OF LABOR LEONARDO QUISIMBING and
MEWA
murallos • david • Mendoza, s | 78
FACTS:
Meralco Employees and Workers Association (MEWA)
informed Meralco of its intention to re-negotiate the terms and
conditions of their existing 1992-1997 Collective Bargaining
Agreement (CBA). Meralco signified, thus subsequently
created a CBA negotiating panel for such purpose. However,
despite the numerous meetings held, MEWA and Meralco
failed to agree on something. Thus, MEWA filed a Notice to
Strike with the NCMB of the DOLE. Such strike was grounded
on the bargaining deadlock and unfair labor practice. When the
NCMB conducted a series of conciliation, neither parties
reached a settlement. Meralco then prayed for the Secretary of
Labor to assume jurisdiction over the fact that an imminent
strike was about to happen. Added to that Meralco also prayed
to enjoin the striking employees to go back to work. The Labor
Secretary granted the petition. MEWA then sent its side of the
CBA. Thus, Meralco filed a motion for reconsideration, which
alleged that the Secretary committed grave abuse of discretion
amounting to lack or excess of jurisdiction. Meralco also filed a
supplement to the motion for reconsideration, alleging that the
Secretary did not properly appreciate the effect of the awarded
wages and benefits on Meralco’s financial viability to MEWA’s
orders. MEWA also filed a motion asking the Secretary to
reconsider its Order. Thus, this petition.
ISSUES:
(1) W/N the Secretary committed grave abuse of
discretion amounting to GADALEJ.
(2) W/N bonus is demandable.
(3) W/N Meralco is required to fund the cooperative.
(4) W/N the signing bonus is legal.
(5) W/N confidential employees are excluded from the
rank-and-file bargaining unit.
HELD:
(1) YES. It was clear that the Meralco projection had
every reason to be reliable because it was based on actual and
undisputed figures for the first six months of 1996. On the other
hand, the union projection was based on a speculation of the
Yuletide consumption that the union failed to substantiate.
While the Secretary is not expected to accept the company
offered figures wholesale in determining a wage award, the
Supreme Court found it a grave abuse of discretion to
completely disregard data that is based on actual and
undisputed record of financial performance in favor of the third-
hand and unfounded claims the Secretary eventually relied
upon. It must be noted that collective bargaining requires due
consideration and proper balancing of the interests of the
parties to the dispute and of those who might be affected by it.
The middle ground approach is not the best method of
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
resolving a wage dispute as rather than encourage agreement,
it promotes a play safe attitude that leads to more deadlocks.
(2) As a general rule, NO. However, in this case, YES.
Record shows that Meralco has further been giving its
employees additional Christmas bonus at the end of the year
since 1988. It was shown that it was voluntarily and
continuously given, thus it has already ripened into a company
practice favorable to the employees. Thus, it can no longer be
withdrawn by the company as this would amount to a
diminution of the employee’s existing benefits.
(3) NO. The Supreme Court sees nothing in the
Cooperative Law—whether implied or express—that requires
employers to provide funds, by loan or otherwise, that
employees can use to form cooperatives. The formation of
cooperatives is purely a voluntary act, and no party in any
context or relationship is required by law to set up a
cooperative or to provide the funds therefor. The Supreme
Court reiterated that in an absence of an agreement by the
collective bargaining parties that is a bargainable term or
condition of employment, to be a term or condition of
employment that can be imposed on the parties on compulsory
arbitration.
(4) In this case, NO. The signing bonus is a grant
motivated by the goodwill generated when a CBA is
successfully negotiated. In this case, goodwill does not exist.
Since the two parties failed to reconcile their differences,
Meralco bluntly invoked the jurisdiction of the Secretary in the
resolution of the labor dispute, whatever goodwill existed
between them disappeared.
(5) YES. A confidential employee does not share in the
same community of interests that might otherwise make him
eligible to join his rank-and-file co-workers precisely because
of conflict of interest.
MANILA ELECTRIC COMPANY VS. THE
HONORABLE SECRETARY OF LABOR
LEONARDO QUISUMBING AND MERALCO
EMPLOYEES AND WORKERS ASSOCIATION
(MEWA)
FACTS:
MEWA is the duly recognized labor organization of the rank-
and-file employees of MERALCO. On September 7, 1995,
MEWA informed MERALCO of its intention to re-negotiate the
terms and conditions of their existing 1992-1997 Collective
Bargaining Agreement (CBA) covering the remaining period of
two years starting from December 1, 1995 to November 30,
1997.[1] MERALCO signified its willingness to re-negotiate
through its letter dated October 17, 1995[2] and formed a CBA
negotiating panel for the purpose. On November 10, 1995,
MEWA submitted its proposal[3] to MERALCO, which, in turn,
murallos • david • Mendoza, s | 79
presented a counter-proposal. Thereafter, collective bargaining
negotiations proceeded. However, despite the series of
meetings between the negotiating panels of MERALCO and
MEWA, the parties failed to arrive at terms and conditions
acceptable to both of them. On April 23, 1996, MEWA filed a
Notice of Strike with the National Capital Region Branch of the
National Conciliation and Mediation Board (NCMB) of the
Department of Labor and Employment (DOLE) which was
docketed as NCMB-NCR-NS-04-152-96, on the grounds of
bargaining deadlock and unfair labor practices. The NCMB
then conducted a series of conciliation meetings but the parties
failed to reach an amicable settlement. Faced with the
imminence of a strike, MERALCO on May 2, 1996, filed an
Urgent Petition[4] with the Department of Labor and
Employment which was docketed as OS-AJ No. 0503[1]96
praying that the Secretary assume jurisdiction over the labor
dispute and to enjoin the striking employees to go back to
work. The Labor Secretary granted the petition through its
Order[5] of May 8, 1996, the dispositive portion of which reads:
WHEREFORE, premises considered, this Office now assumes
jurisdiction over the labor dispute obtaining between the parties
pursuant to Article 263 (g) of the Labor Code.Accordingly, the
parties are here enjoined from committing any act that may
exacerbate the situation. To speed up the resolution of the
dispute, the parties are also directed to submit their respective
Position Papers within ten (10) days from receipt.
Undersecretary Jose M. Espanol, Jr. is deputized to conduct
conciliation conferences between the parties to bridge their
differences and eventually hammer out a solution that is
mutually acceptable. He shall be assisted by the Legal Service.
SO ORDERED.
MERALCO filed a supplement to the motion for reconsideration
on September 18, 1995, alleging that the Secretary of Labor
did not properly appreciate the effect of the awarded wages
and benefits on MERALCOs financial viability.
MEWA likewise filed a motion asking the Secretary of Labor to
reconsider its Order on the wage increase, leaves,
decentralized filing of paternity and maternity leaves, bonuses,
retirement benefits, optional retirement, medical, dental and
hospitalization benefits, short swing and payroll treatment. On
its political demands, MEWA asked the Secretary to rule its
proposal to institute a Code of Discipline for its members and
the unions representation in the administration of the Pension
Fund.
The unions position is anchored on two premises:
First, no reviewable abuse of discretion could have attended
the Secretarys arbitral award because the Secretary complied
with constitutional norms in rendering the dispute award. The
union posits that the yardstick for comparison and for the
determination of the validity of the Secretarys actions should
be the specific standards laid down by the Constitution itself.
To the union, these standards include the State policy on the
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
promotion of workers welfare,[9] the principle of distributive
justice,[10] the right of the State to regulate the use of property,
[11] the obligation of the State to protect workers, both
organized and unorganized, and insure their enjoyment of
humane conditions of work and a living wage, and the right of
labor to a just share in the fruits of production.[12]
Second, no reversible abuse of discretion attended the
Secretarys decision because the Secretary took all the relevant
evidence into account, judiciously weighed them, and rendered
a decision based on the facts and law. Also, the arbitral award
should not be reversed given the Secretarys expertise in his
field and the general rule that findings of fact based on such
expertise is generally binding on this Court.
To put matters in proper perspective, we go back to basic
principles. The Secretary of Labors statutory power under Art.
263 (g) of the Labor Code to assume jurisdiction over a labor
dispute in an industry indispensable to the national interest,
and, to render an award on compulsory arbitration, does not
exempt the exercise of this power from the judicial review that
Sec. 1, Art. 8 of the Constitution mandates. This constitutional
provision states: Judicial power includes the duty of the courts
of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the government.
ISSUE:
WON DOLE ERRED IN established practice of giving
Christmas bonuses that has ripened to the status of being a
term and condition of employment.
HELD:
YES. In the case at bar, the record shows the MERALCO,
aside from complying with the regular 13th month bonus, has
further been giving its employees an additional Christmas
bonus at the tail-end of the year since 1988. While the special
bonuses differed in amount and bore different titles, it can not
be denied that these were given voluntarily and continuously
on or about Christmas time. The considerable length of time
MERALCO has been giving the special grants to its employees
indicates a unilateral and voluntary act on its part, to continue
giving said benefits knowing that such act was not required by
law. Indeed, a company practice favorable to the employees
has been established and the payments made by MERALCO
pursuant thereto ripened into benefits enjoyed by the
employees. Consequently, the giving of the special bonus can
no longer be withdrawn by the company as this would amount
to a diminution of the employees existing benefits.[34]We can
not, however, affirm the Secretarys award of a two-month
special Christmas bonus to the employees since there was no
recognized company practice of giving a two-month special
grant. The two-month special bonus was given only in 1995 in
murallos • david • Mendoza, s | 80
recognition of the employees prompt and efficient response
during the calamities. Instead, a one-month special bonus, We
believe, is sufficient, this being merely a generous act on the
part of MERALCO.
1. SCOPE OF THE BARGAINING UNIT
The Secretary’s ruling on this issue states that:
a. Scope of the collective bargaining unit. The union is
demanding that the collective bargaining unit shall be
composed of all regular rank and file employees hired by the
company in all its offices and operating centers through its
franchise and those it may employ by reason of expansion,
reorganization or as a result of operational exigencies.The law
is that only managerial employees are excluded from any
collective bargaining unit and supervisors are now allowed to
form their own union (Art. 254 of the Labor Code as amended
by R.A. 6715). We grant the union demand.
Both MERALCO and the Office of the Solicitor General dispute
this ruling because if disregards the rule We have established
on the exclusion of confidential employee from the rank and file
bargaining unit.
2. ISSUE OF UNION SECURITY
The Secretary in his Order of August 19, 1996,[42] ruled that:
Union recognition and security. The union is proposing that it
be recognized by the Company as sole and exclusive
bargaining representative of the rank and file employees
included in the bargaining unit for the purpose of collective
bargaining regarding rates of pay, wages, hours of work and
other terms and conditions of employment. For this reason, the
Company shall agree to meet only with the Union officers and
its authorized representatives on all matters involving the
Union as an organization and all issues arising from the
implementation and interpretation of the new CBA. Towards
this end, the Company shall not entertain any individual or
group of individuals on matters within the exclusive domain of
the Union.
Additionally, the Union is demanding that the right of all rank
and file employees to join the Union shall be recognized by the
Company. Accordingly, all rank and file employees shall join
the union.
MERALCO objected to this ruling on the grounds that: (a) it
was never questioned by the parties; (b) there is no evidence
presented that would justify the restriction on employee's union
membership; and (c) the Secretary cannot rule on the union
security demand because this is not a mandatory subject for
collective bargaining agreement.
We agree with MERALCOs contention.
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
An examination of the records of the case shows that the union
did not ask for a closed shop security regime; the Secretary in
the first instance expressly stated that a maintenance of
membership clause should govern; neither MERALCO nor
MEWA raised the issue of union security in their respective
motions for reconsideration of the Secretarys first disputed
order; and that despite the parties clear acceptance of the
Secretarys first ruling, the Secretary motu proprio reconsidered
his maintenance of membership ruling in favor of the more
stringent union shop regime.
Under these circumstances, it is indubitably clear that the
Secretary gravely abused his discretion when he ordered a
union shop in his order of December 28, 1996. The distinctions
between a maintenance of membership regime from a closed
shop and their consequences in the relationship between the
union and the company are well established and need no
further elaboration. Consequently, We rule that the
maintenance of membership regime should govern at
MERALCO in accordance with the Secretarys order of August
19, 1996 which neither party disputed.
3. THE CONTRACTING OUT ISSUE
This issue is limited to the validity of the requirement that the
union be consulted before the implementation of any
contracting out that would last for 6 months or more.
Proceeding from our ruling in San Miguel Employees Union-
PTGWO vs Bersamina,[43] (where we recognized that
contracting out of work is a proprietary right of the employer in
the exercise of an inherent management prerogative) the issue
we see is whether the Secretary’s consultation requirement is
reasonable or unduly restrictive of the companys management
prerogative. We note that the Secretary himself has considered
that management should not be hampered in the operations of
its business when he said that:
We feel that the limitations imposed by the union advocates
are too specific and may not be applicable to the situations that
the company and the union may face in the future. To our
mind, the greater risk with this type of limitation is that it will
tend to curtail rather than allow the business growth that the
company and the union must aspire for. Hence, we are for the
general limitations we have stated above because they will
allow a calibrated response to specific future situations the
company and the union may face.[44]Additionally, We
recognize that contracting out is not unlimited; rather, it is a
prerogative that management enjoys subject to well-defined
legal limitations. As we have previously held, the company can
determine in its best business judgment whether it should
contract out the performance of some of its work for as long as
the employer is motivated by good faith, and the contracting
out must not have been resorted to circumvent the law or must
not have been the result of malicious or arbitrary action.[45]
The Labor Code and its implementing rules also contain
specific rules governing contracting out (Department of Labor
Order No. 10, May 30, 1997, Sections. 1-25).
murallos • david • Mendoza, s | 81
Given these realities, we recognize that a balance already exist
in the parties relationship with respect to contracting out;
MERALCO has its legally defined and protected management
prerogatives while workers are guaranteed their own protection
through specific labor provisions and the recognition of limits to
the exercise of management prerogatives. From these
premises, we can only conclude that the Secretarys added
requirement only introduces an imbalance in the parties
collective bargaining relationship on a matter that the law
already sufficiently regulates. Hence, we rule that the
Secretarys added requirement, being unreasonable, restrictive
and potentially disruptive should be struck down.
4. UNION REPRESENTATION IN COMMITTEES
As regards this issue, We quote with approval the holding of
the Secretary in his Order of December 28, 1996, to wit:
We see no convincing reason to modify our original Order on
union representation in committees. It reiterates what the
Article 211 (A)(g) of the Labor Codes provides: To ensure the
participation of workers in decision and policy-making
processes affecting their rights, duties and welfare. Denying
this opportunity to the Union is to lay the claim that only
management has the monopoly of ideas that may improve
management strategies in enhancing the Companys growth.
What every company should remember is that there might be
one among the Union members who may offer productive and
viable ideas on expanding the Companys business horizons.
The unions participation in such committees might just be the
opportune time for dormant ideas to come forward. So, the
Company must welcome this development (see also PAL v.
NLRC, et. al., G.R. 85985, August 13, 1995). It must be
understood, however, that the committees referred to here are
the Safety Committee, the Uniform Committee and other
committees of a similar nature and purpose involving
personnel welfare, rights and benefits as well as duties.
We do not find merit in MERALCOs contention that the above-
quoted ruling of the Secretary is an intrusion into the
management prerogatives of MERALCO. It is worthwhile to
note that all the Union demands and what the Secretarys order
granted is that the Union be allowed to participate in policy
formulation and decision-making process on matters affecting
the Union members right, duties and welfare as required in
Article 211 (A)(g) of the Labor Code. And this can only be done
when the Union is allowed to have representatives in the
Safety Committee, Uniform Committee and other committees
of a similar nature. Certainly, such participation by the Union in
the said committees is not in the nature of a co-management
control of the business of MERALCO. What is granted by the
Secretary is participation and representation.Thus, there is no
impairment of management prerogatives.
5. INCLUSION OF ALL TERMS AND CONDITIONS IN
THE CBA
Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
MERALCO also decries the Secretarys ruling in both the
assailed Orders that- All other benefits being enjoyed by the
companys employees but which are not expressly or impliedly
repealed in this new agreement shall remain subsisting and
shall likewise be included in the new collective bargaining
agreement to be signed by the parties effective December 1,
1995.[46] claiming that the above-quoted ruling intruded into
the employers freedom to contract by ordering the inclusion in
the new CBA all other benefits presently enjoyed by the
employees even if they are not incorporated in the new CBA.
This matter of inclusion, MERALCO argues, was never
discussed and agreed upon in the negotiations; nor presented
as issues before the Secretary; nor were part of the previous
CBAs between the parties.
We agree with MERALCO.
The Secretary acted in excess of the discretion allowed him by
law when he ordered the inclusion of benefits, terms and
conditions that the law and the parties did not intend to be
reflected in their CBA. To avoid the possible problems that the
disputed orders may bring, we are constrained to rule that only
the terms and conditions already existing in the current CBA
and was granted by the Secretary (subject to the modifications
decreed in this decision) should be incorporated in the CBA,
and that the Secretarys disputed orders should accordingly be
modified.
6. RETROACTIVITY OF THE CBA- Finally, MERALCO
also assails the Secretarys order that the effectivity of the new
CBA shall retroact to December 1, 1995, the date of the
commencement of the last two years of the effectivity of the
existing CBA. This retroactive date, MERALCO argues, is
contrary to the ruling of this Court in Pier 8 Arrastre and
Stevedoring Services, Inc. vs. Roldan-Confessor[47] which
mandates that the effective date of the new CBA should be the
date the Secretary of Labor has resolved the labor disputes.
On the other hand, MEWA supports the ruling of the Secretary
on the theory that he has plenary power and discretion to fix
the date of effectivity of his arbitral award citing our ruling in St.
Lukes Medical Center, Inc. vs. Torres.[48] MEWA also
contends that if the arbitral award takes effect on the date of
the Secretary Labors ruling on the parties motion for
reconsideration (i.e., on December 28, 1996), an anomaly
situation will result when CBA would be more than the 5-year
term mandated by Article 253-A of the Labor Code.
Significantly, the law does not specifically cover the situation
where 6 months have elapsed but no agreement has been
reached with respect to effectivity. In this eventuality, we hold
that any provision of law should then apply for the law abhors a
vacuum.[50]
One such provision is the principle of hold over, i.e., that in the
absence of a new CBA, the parties must maintain the status
quo and must continue in full force and effect the terms and
conditions of the existing agreement until a new agreement is
murallos • david • Mendoza, s | 82
reached.[51] In this manner, the law prevents the existence of
a gap in the relationship between the collective bargaining
parties. Another legal principle that should apply is that in the
absence of an agreement between the parties, then, an
arbitrated CBA takes on the nature of any judicial or quasi-
judicial award; it operates and may be executed only
respectively unless there are legal justifications for its
retroactive application.

Consequently, we find no sufficient legal ground on the other

justification for the retroactive application of the disputed CBA,
and therefore hold that the CBA should be effective for a term
of 2 years counted from December 28, 1996 (the date of the
Secretary of Labors disputed order on the parties motion for
reconsideration) up to December 27, 1999.

WHEREFORE, the petition is granted and the orders of public

respondent Secretary of Labor dated August 19, 1996 and
December 28, 1996 are set aside to the extent set forth above.
The parties are directed to execute a Collective Bargaining
Agreement incorporating the terms and conditions contained in
the unaffected portions of the Secretary of Labors order of
August 19, 1996 and December 28, 1996, and the
modifications set forth above. The retirement fund issue is
remanded to the Secretary of Labor for reception of evidence
and determination of the legal personality of the MERALCO
retirement fund.

SO ORDERED.

Lucban-alcaraz • carelo • santos • Enriquez • marquez • Mendoza, E • labampa • mesa • vendivil • Jimenez •
murallos • david • Mendoza, s | 83