C. ALCANTARA & SONS, INC. vs. COURT OF APPEALS et al.

G.R. No. 155109 March 14, 2012 J. Peralta

FACTS:

The negotiation between CASI and the Union on the economic provisions of the CBA ended in a deadlock prompting
the union to stage a strike which was found illegal by the LA. The Union officers were deemed to have forfeited their
enrolment while the Union members were reinstated without backwages with no proof that they actually committed
illegal acts during the strike. The LA refused to reinstate the dismissed Union members in which the NLRC affirmed
the LA insofar as it declared the strike illegal but considered the Union members to have been validly dismissed. The
CA annulled the decision of the NLRC. The CASI elevated the case to the SC. During the pendency of the case, the
affected Union members filed with the LA a motion for reinstatement pending appeal and the computation of
backwages. The LA awarded separation pay. The NLRC denied the Union members claim for separation pay and the
CA held that reinstatement pending appeal applies only to illegal dismissal cases. When elevated to the SC, the court
ruled in favor of the Union.

ISSUES:
(1) Whether or not the petitioner is liable to pay the accrued wages of the dismissed employees?
(2) Whether or not the Court erred in awarding separation pay to the dismissed union officers and employees?

LAW APPLICABLE:
Labor Code

RULING:
1. YES. They are liable to pay the accrued wages.

Records show that the LA found the strike illegal and sustained the dismissal of the Union officers, but ordered
the reinstatement of the striking Union members for lack of evidence showing that they committed illegal acts
during the illegal strike. This decision, however, was later reversed by the NLRC. Pursuant to Article 223 of the
Labor Code and well-established jurisprudence, the decision of the LA reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, pending appeal. The
employee shall either be admitted back to work under the same terms and conditions prevailing prior to his
dismissal or separation, or, at the option of the employee, merely reinstated in the payroll. It is obligatory on the
part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until
reversal by the higher court. If the employer fails to exercise the option of re-admitting the employee to work or
to reinstate him in the payroll, the employer must pay the employee’s salaries during the period between the
LAs order of reinstatement pending appeal and the resolution of the higher court overturning that of the LA.

2. YES. The court erred in awarding separation pay.

Separation pay may be given as a form of financial assistance when a worker is dismissed in cases such as the
installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing or cessation of
operation of the establishment, or in case the employee was found to have been suffering from a disease such
that his continued employment is prohibited by law. It is a statutory right defined as the amount that an employee
receives at the time of his severance from the service and is designed to provide the employee with the
wherewithal during the period that he is looking for another employment. It is oriented towards the immediate
future, the transitional period the dismissed employee must undergo before locating a replacement job. As a
general rule, when just causes for terminating the services of an employee exist, the employee is not entitled to
separation pay because lawbreakers should not benefit from their illegal acts. The rule, however, is subject to
exceptions.

In the case at bar, not only did the Court declare the strike illegal, rather, it also found the Union officers to have
knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts during the
strike. Thus, the awards of separation pay as a form of financial assistance is deleted.

OPINION:

I respectfully agree with the court’s decision in awarding the employees their accrued wages and the fact that
they did not sustain the awarding of separation pay as the Labor Code as it is only fair not to give a person who
has done illegal acts an amount which is not due to them.
 AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES vs. PHILIPPINE AIRLINES, INC.
G.R. No. 168382 June 6, 2011 J. Del Castillo

FACTS:

PAL allegedly committed a ULP. The LLO within the PAL, ALPAP, filed a notice of strike against PAL and DOLE. The
DOLE Secretary assumed jurisdiction over the dispute. The strikes and lockouts were prohibited and enjoined PAL
and ALPAP from doing any act to complicate the situation. The DOLE secretary reiterated the prohibition however,
ALPAP still staged a strike. The DOLE secretary issued a return-to-work order but the ALPAP officers and members
reported back much later hence PAL refused to accept the pilots returning for work. ALPAP filed a complaint for
illegal lockout against the PAL where they state they only received the return-to-work order in a much later date.
The NLRC ruled that the DOLE Secretary has the authority to resolve all incidents attendant to his return-to-work
order. The DOLE secretary held the strike to be illegal and pronounced that all those who disobeyed the return-to-
work order have lost their employment status. ALPAP’s motion for reconsideration and appeal was denied. Later on,
the SC held that those who participate in the strike to have lost their employment status.

ISSUE:
Whether or not the termination of the employees is valid.

LAW APPLICABLE:
Labor Code

RULING:
YES. The the termination of the employees is valid.

The records reveals that in NCMB NCR NS 12-514-97, the DOLE Secretary declared the ALPAP officers and members
to have lost their employment status based on either of two grounds, viz: their participation in the illegal strike on
June 5, 1998 or their defiance of the return-to-work order of the DOLE Secretary. The records of the case unveil the
names of each of these returning pilots. The logbookwith the heading "Return To Work Compliance/ Returnees"
bears their individual signature signifying their conformity that they were among those workers who returned to
work only on June 26, 1998 or after the deadline imposed by DOLE. From this crucial and vital piece of evidence, it
is apparent that each of these pilots is bound by the judgment. Besides, the complaint for illegal lockout was filed on
behalf of all these returnees. Thus, a finding that there was no illegal lockout would be enforceable against them. In
fine, only those returning pilots, irrespective of whether they comprise the entire membership of ALPAP, are bound
by the June 1, 1999 DOLE Resolution.

OPINION:
As much as the Labor Code is ruled in favor of lavor, it is still not an entitlement to commit illegal acts done by the
empoloyee which can have them disqualified of their rights.
 MAGDALA MULTIPURPOSE & LIVELIHOOD COOP. vs. KILUSANG MANGGAGAGAWA NG LGS, ET AL.
G.R. Nos. 191138-39 October 29, 2011Velasco, Jr.
FACTS:

KMLMS held a strike-vote one day before its registration was granted. It later staged a strike where several illegal
acts were committed. The company argued that the strike was illegal, and all participating union members should
be declared to have forfeited their employment. SC ruled in favor of the company. The mandatory notice of strike
and the conduct of the strike-vote report were ineffective for having been filed and conducted before KMLMS
acquired legal personality as an LLO.

ISSUE:
Whether or not the strike is illegal.

LAW APPLICABLE:
Labor Code

RULING:
YES. The strike is illegal.

There is no question that the May 6, 2002 strike was illegal, first, because when KMLMS filed the notice of strike on
March 5 or 14, 2002, it had not yet acquired legal personality and, thus, could not legally represent the eventual
union and its members. And second, similarly when KMLMS conducted the strike-vote on April 8, 2002, there was
still no union to speak of, since KMLMS only acquired legal personality as an independent LLO only on April 9, 2002
or the day after it conducted the strike-vote. These factual findings are undisputed and borne out by the records.

Consequently, the mandatory notice of strike and the conduct of the strike-vote report were ineffective for having
been filed and conducted before KMLMS acquired legal personality as an LLO, violating Art. 263(c), (d) and (f) of the
Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code.

OPINION:
I agree with the court that no strike can be made when the union is not yet registered because these are the times
the law must be followed as it is only fair that a union to have a legal personality and comply with the requisites
provided by the Labor Code before it could be afforded the protection of the labor code.
 JAILE OLISA et al. vs. NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 160302 September 27, 2010 J. Bersamin

FACTS:

Officers and 200 members of the Union walked out of PINA’s premises and proceeded to the barangay office to show
support for an employee and officer of the union who was charged with oral defamation. They went back to work
afterwards. As of result of such, PINA preventively suspended all officers of the Union and later on terminated them.
PINA filed a complaint for ULP where the Labor Arbiter ruled that there was an illegal walkout and that all union
officers except Canete lost their employment. The union filed a notice of strike claiming PINA was guilty of union
busting through the constructive dismissal of its officers. They held a strike vote were 190 members voted to strike.
PINA countered such by charging the petitioners with ULP and abandonment of work, claiming they had violated the
CBA. The LA declared the strike illegal. Such was reiterated by the NLRC but found no abandonment. The CA
sustained the NLRC and explained the petitioners were not entitled to full back wages.

ISSUE:
Whether or not the petitioners are entitled to back wages.

LAW APPLICABLE:
Labor Code

RULING:
NO. The petitioners are not entitled to backwages.

As a general rule, backwages are granted to indemnify a dismissed employee for his loss of earnings during the whole
period that he is out of his job. Considering that an illegally dismissed employee is not deemed to have left his
employment, he is entitled to all the rights and privileges that accrue to him from the employment. The grant of
backwages to him is in furtherance and effectuation of the public objectives of the Labor Code, and is in the nature
of a command to the employer to make a public reparation for his illegal dismissal of the employee in violation of
the Labor Code.

That backwages are not granted to employees participating in an illegal strike simply accords with the reality that
they do not render work for the employer during the period of the illegal strike.

With respect to backwages, the principle of a “fair day’s wage for a fair day’s labor” remains as the basic factor in
determining the award thereof. If there is no work performed by the employee there can be no wage or pay unless,
of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or
otherwise illegally prevented from working.

OPINION:
The principle of fair day’s wage for a fair day’s labor is akin to the principle of unjust enrichment in where one must
not receive what is not due to him that in Labor Law, one must not be given wages if he doesn’t do his hard earn
unless of course the exceptions of law stand.
 TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY vs. ASIA BREWERY, INC.
G.R. No. 162025 August 3, 2010 J. Villarama Jr.

FACTS:

Asia Brewery entered into a CBA with BLMA. Those employees excluded in the CBA confidential and executive
secretaries and purchasing and quality control staff. A dispute arose with the Asia Brewery management stopped
deducting union dues from 81 employees, believing that their membership in the union violated the CBA. They were
sampling inspectors and machine gauge technicians who were both part of the Quality Control Staff, and secretaries
and clerks directly under the respective division managers.

ISSUE:
Whether or not the employees in question can be excluded from the bargaining unit?

LAW APPLICABLE:
Labor Code

RULING:
NO. The employees are not excluded from the bargaining unit.

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. 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.

OPINION:
The reason that confidential employees are excluded from the bargaining unit is because of the fact that their relation
with the employer can have an effect with the dealings of the company and with the union.
VISAYAS COMMUNITY MEDICAL CENTER (VCMC) formerly known as METRO CEBU COMMUNITY HOSPITAL
(MCCH) vs. ERMA YBALLE et al.
GR No. 154113 December 7, 2011 J. Villarama Jr.

FACTS:

Nava, Canen, Gerona, Bongcaras, Remocaldo, Alsado and Baz’s union membership were suspended for serious
violation of the Constitution and By-Laws. Upon the request of Atty. Alforque, MCCH granted a one-day union leave
with pay for 12 union members. The next day, several union members led by Nava launched a series of mass actions.
For their continued picketing activities despite warning, more than 100 striking employees were dismissed. Despite
such, the striking union members held more mass actions. Because of the adverse effects to the hospital operations
and to confined patients, MCCHI filed a petition for injunction where a TRO was issued. Several complaints for illegal
dismissal and ULP were filed by the terminated employees against MCCHI. The LA dismissed the complaints for ULPs
in which the NLRC upheld the decision of the LA. The CA likewise denied their claims on the ground that only 47 out
of 88 petitioners signed the certification against forum shopping.

ISSUE:
Whether or not the employees were illegally dismissed.

LAW APPLICABLE:
Labor Code

RULING:
NO. The employees were not illegally dismissed.

Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL had not registered as a labor
organization, having submitted only its charter certificate as an affiliate or local chapter of NFL. Not being a
legitimate labor organization, NAMA-MCCH-NFL is not entitled to those rights granted to a legitimate labor
organization under Art. 242.

Aside from the registration requirement, it is only the labor organization designated or selected by the majority
of the employees in an appropriate collective bargaining unit which is the exclusive representative of the
employees in such unit for the purpose of collective bargaining, as provided in Art. 255. NAMA-MCCH-NFL is not
the labor organization certified or designated by the majority of the rank-and-file hospital employees to
represent them in the CBA negotiations but the NFL, as evidenced by CBAs concluded in 1987, 1991 and 1994.

Even assuming that NAMA-MCCH-NFL had validly disaffiliated from its mother union, NFL, it still did not possess
the legal personality to enter into CBA negotiations. A local union which is not independently registered cannot,
upon disaffiliation from the federation, exercise the rights and privileges granted by law to legitimate labor
organizations; thus, it cannot file a petition for certification election. Besides, the NFL as the mother union has
the right to investigate members of its local chapter under the federations Constitution and By-Laws, and if found
guilty to expel such members. MCCHI therefore cannot be faulted for deferring action on the CBA proposal
submitted by NAMA-MCCH-NFL in view of the union’s leadership conflict with the national federation. We have
held that 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 federation and the local union or a rival labor organization, not the
employer.

OPINION:

I respectfully agree with the court’s decision in the case at bar. It is only right that for a union or legitimate labor
organization to have recognition as one that is legitimate and that can be accorded protection of the Labor Code
and the CBA is that it meets the requisites provided by the Labor Code.
VISAYAS COMMUNITY MEDICAL CENTER (VCMC) formerly known as METRO CEBU COMMUNITY HOSPITAL
(MCCH) vs. ERMA YBALLE et al.
GR No. 154113 December 7, 2011 J. Villarama Jr.

FACTS:

Nava, Canen, Gerona, Bongcaras, Remocaldo, Alsado and Baz’s union membership were suspended for serious
violation of the Constitution and By-Laws. Upon the request of Atty. Alforque, MCCH granted a one-day union leave
with pay for 12 union members. The next day, several union members led by Nava launched a series of mass actions.
For their continued picketing activities despite warning, more than 100 striking employees were dismissed. Despite
such, the striking union members held more mass actions. Because of the adverse effects to the hospital operations
and to confined patients, MCCHI filed a petition for injunction where a TRO was issued. Several complaints for illegal
dismissal and ULP were filed by the terminated employees against MCCHI. The LA dismissed the complaints for ULPs
in which the NLRC upheld the decision of the LA. The CA likewise denied their claims on the ground that only 47 out
of 88 petitioners signed the certification against forum shopping.

ISSUE:
Whether or not the employees were illegally dismissed.

LAW APPLICABLE:
Labor Code

RULING:
NO. The employees were not illegally dismissed.

Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL had not registered as a labor
organization, having submitted only its charter certificate as an affiliate or local chapter of NFL. Not being a
legitimate labor organization, NAMA-MCCH-NFL is not entitled to those rights granted to a legitimate labor
organization under Art. 242.

Aside from the registration requirement, it is only the labor organization designated or selected by the majority
of the employees in an appropriate collective bargaining unit which is the exclusive representative of the
employees in such unit for the purpose of collective bargaining, as provided in Art. 255. NAMA-MCCH-NFL is not
the labor organization certified or designated by the majority of the rank-and-file hospital employees to
represent them in the CBA negotiations but the NFL, as evidenced by CBAs concluded in 1987, 1991 and 1994.

Even assuming that NAMA-MCCH-NFL had validly disaffiliated from its mother union, NFL, it still did not possess
the legal personality to enter into CBA negotiations. A local union which is not independently registered cannot,
upon disaffiliation from the federation, exercise the rights and privileges granted by law to legitimate labor
organizations; thus, it cannot file a petition for certification election. Besides, the NFL as the mother union has
the right to investigate members of its local chapter under the federations Constitution and By-Laws, and if found
guilty to expel such members. MCCHI therefore cannot be faulted for deferring action on the CBA proposal
submitted by NAMA-MCCH-NFL in view of the union’s leadership conflict with the national federation. We have
held that 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 federation and the local union or a rival labor organization, not the
employer.

OPINION:

I respectfully agree with the court’s decision in the case at bar. It is only right that for a union or legitimate labor
organization to have recognition as one that is legitimate and that can be accorded protection of the Labor Code
and the CBA is that it meets the requisites provided by the Labor Code.
 SUPREME STEEL CORPORATION v. NAGKAKAISANG MANGGAGAWA NG SUPREME INDEPENDENT UNION
(NMS-IND-APL)
G.R. No. 185556 March 28, 2011 J. Nachura

FACTS:

Respondent union filed a notice of strike with the NCMB on the ground that petitioner violated provisions of the CBA.
The parties failed to settle their dispute. The Secretary of Labor certified the case to the NLRC for compulsory
arbitration. Generally, the NLRC ruled in favor more of the respondents than the petitioner. The petitioner appealed
to the CA which it dismissed.

According to the CA, petitioner failed to show that the NLRC committed grave abuse of discretion in finding that it violated
certain provisions of the CBA. With regard to wage increase, The CA concluded that, based on the wording of the CBA,
which uses the words "general increase" and "over and above," it cannot be said that the parties have intended the
anniversary increase to be given in lieu of the CBA wage increase. The CA declared that the withdrawal of the COLA under
Wage Order No. RBIII-10 from the employees who were not minimum wage earners amounted to a diminution of benefits
because such grant has already ripened into a company practice. Based on the principle of liberal construction of the CBA,
the CA likewise sustained the NLRCs rulings on the issues pertaining to medical expenses, the shuttle service, time-off for
attendance in grievance meetings/hearings, and time-off due to brownouts. Finally, the CA affirmed the NLRCs finding
that Madayag’s dismissal was illegal. It emphasized that the burden to prove that the employee’s disease is of such nature
or at such stage that it cannot be cured within a period of six months rests on the employer, who failed to prove such.

ISSUE:
Whether or not the CA erred in its decision.

LAW APPLICABLE:
Labor Code

RULING:
YES, but partially.

It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and compliance
therewith is mandated by the express policy of the law. If the terms of CBA are clear and there is no doubt as to the
intention of the contracting parties, the literal meaning of its stipulation shall prevail. Moreover, the CBA must be
construed liberally rather than narrowly and technically and the Court must place a practical and realistic
construction upon it. Any doubt in the interpretation of any law or provision affecting labor should be resolved in
favor of labor. Upon these well-established precepts, the CAs findings and conclusions on all the issues are sustained,
except the issue pertaining to the denial of the COLA under Wage Order No. RBIII-10 and 11 to the employees who
are not minimum wage earners, which respondent avers as a diminution of benefits.

Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the employees.
There is diminution of benefits when it is shown that:

(1) The grant or benefit is founded on a policy or has ripened into a practice over a long period of time;
(2) The practice is consistent and deliberate;
(3) The practice is not due to error in the construction or application of a doubtful or difficult question of law; and
(4) The diminution or discontinuance is done unilaterally by the employer.

OPINION:
The CBA is an important document that exists in Labor Law because it serves as the contract between the employer
and the union in it. It binds both parties and both must comply with its provisions religiously.
 THE HERITAGE HOTEL MANILA vs. NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND
ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC)
G.R. No. 178296 January 12, 2011 J. Nachura

FACTS:

Respondent union’s petition for certification election was granted. Later on, petitioner found out that the union failed
to submit to the BLR its annual financial report for several years and the list of its memers since it filed its registration
papers in 1995. Petitioner thus filed for a cancellation of registration of respondent union on the ground of non-
submission of the aforementioned documents. However, the petition for certification election still proceeded. The
regional Director of DOLE-NCR and Dole NCR held that the constitutionally guaranteed freedom of association and
right of workers to self-organization outweighed the non-compliance done by the union to garner that status as a
legitimate labor organization.

ISSUE:
Whether or not the failure of the union to comply with all of the requirements for a certification election is fatal to the
petition for certification election.

LAW APPLICABLE:
Labor Code

RULING:
NO. Such is not a ground for the dismissal of the petition for certification election.

No, the noncompliance should not be a ground for the cancellation. Articles 238 and 239 of the Labor Code provide
that failure to file financial reports and the list of its members are grounds for the cancellation of Union Organization.
However, consideration must be taken of the fundamental rights guaranteed by Article XIII, Section 3 of the
Constitution, i.e., the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities. Labor authorities should bear in mind that registration confers upon a union the status of
legitimacy and the concomitant right and privileges granted by law to a legitimate labor organization, particularly
the right to participate in or ask for certification election in a bargaining unit. Thus, the cancellation of a certificate
of registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it loses
– as a rule – its rights under the Labor Code.
Furthermore, that the Labor Code’s provisions on cancellation of union registration and on reportorial requirements
have been recently amended by Republic Act (R.A.) No. 9481, An Act Strengthening the Workers’ Constitutional Right
to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the
Labor Code of the Philippines, which says that failure to file financial reports and list of union members shall not be
a ground for cancellation of union registration but shall subject the erring officers or members to suspension,
expulsion from membership, or any appropriate penalty.

OPINION:
I submit to the decision rendered by the court in the case at bar. As it was pronounced several times, mere
technicalities must never defeat a worker’s right to self-organization and freedom of association as if they are to be
impeded by mere technicalities, then true justice and the protection of the law shall almost always never be accorded
as to who it is due.
 LEGEND INTERNATIONAL RESORTS LIMITED vs. KILUSANG MANGGAGAWA NG LEGENDA (KML-
INDEPENDENT),
G.R. No. 169754 February 23, 2011 J. Del Castillo
FACTS:

KML filed for a petition for certification election. Legend moved to dismiss such alleging that KML is not a legitimate
labor organization because its membership is a mixture of rank and file and supervisory employees. In their defense,
KML claims that even if such is the case, the number of supervisory employees won’t defeat the required number of
total rank and file employees needed for the certification election more so its legitimacy as a labor union cannot be
collaterally attacked in the certification election proceedings but through a separate action. The Med-Arbiter ruled
in favor of Legend, dismissing the certification for petition election. The Office of the Secretary of DOLE reversed the
said decision stating that KML’s legitimacy could not be collaterally attacked and any violations of Article 245 of the
Labor Code does not automatically render a labor organization’s existence illegal. The CA dismissed an appeal filed
by Legend and further claimed that the legitimacy of KML was already upheld in another case.

ISSUE:
Whether or not Pabalan the certification election may proceed.

LAW APPLICABLE:
Labor Code

RULING:
YES. The certification election may still proceed.

Records show that (in the cancellation of registration case) LEGEND has timely filed on September 6, 2002 a petition
forcertiorari before the Court of Appeals which was docketed as CA-G.R. SP No. 72659 assailing the March 26, 2002
Decision of the Bureau of Labor Relations.

However, a certification election may still be conducted during the pendency of the cancellation proceedings. This is
because at the time the petition for certification was filed, the petitioning union is presumed to possess the legal
personality to file the same. There is therefore no basis for LEGEND’s assertion that the cancellation of KML’s
certificate of registration should retroact to the time of its issuance or that it effectively nullified all of KML’s
activities, including its filing of the petition for certification election and its demand to collectively bargain. Also, the
legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election
proceeding.

OPINION:
The legitimacy of a labor organization should not be subject to a collateral attack in another proceeding as it would
impair the presumption of legitimacy given to the said labor organization if the said legitimacy can be attacked in
another proceeding.
 GERARDO F. RIVERA et al vs. HON. EDGARDO ESPIRITU
G.R. No. 135547 January 23, 2002 J. Quisumbing

FACTS:

PAL was suffering from a difficult financial situation in that it was forced to adopt a rehabilitation plan and downsize
its labor force by more than 33%. PALEA went on a 4-day strike to protest to such but PAL cease to operate later on.
PALEA later on proposed the suspension of the PAL-PALEA CBA for ten years subject to certain conditions. PALEA,
in general, accepted such, Later on, PAL resumed domestic operations. Seven officers and members of PALEA filed a
petition to annul the agreement made between PAL and PALEA.

ISSUE:
Whether or not the CBA can be suspended for a period of 10 years.

LAW APPLICABLE:
Labor Code

RULING:
YES. The CBA can be suspended for a period of 10 years.

A CBA is "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."18
The primary purpose of a CBA is the stabilization of labor-management relations in order to create a climate of a sound
and stable industrial peace.19 In construing a CBA, the courts must be practical and realistic and give due consideration
to the context in which it is negotiated and the purpose which it is intended to serve.

The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations undertaken in the light
of the severe financial situation faced by the employer, with the peculiar and unique intention of not merely promoting
/industrial peace at PAL, but preventing the latter’s closure. We find no conflict between said agreement and Article 253-
A of the Labor Code. Article 253-A has a two-fold purpose. One is to promote industrial stability and predictability.
Inasmuch as the agreement sought to promote industrial peace at PAL during its rehabilitation, said agreement satisfies
the first purpose of Article 253-A. The other is to assign specific timetables wherein negotiations become a matter of right
and requirement. Nothing in Article 253-A, prohibits the parties from waiving or suspending the mandatory timetables
and agreeing on the remedies to enforce the same.

In the instant case, it was PALEA, as the exclusive bargaining agent of PAL’s ground employees that voluntarily entered
into the CBA with PAL. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA. Either case was the
union’s exercise of its right to collective bargaining. The right to free collective bargaining, after all, includes the right to
suspend it.

The acts of public respondents in sanctioning the 10-year suspension of the PAL-PALEA CBA did not contravene the
"protection to labor" policy of the Constitution. The agreement afforded full protection to labor; promoted the shared
responsibility between workers and employers; and the exercised voluntary modes in settling disputes, including
conciliation to foster industrial peace."

Petitioners further allege that the 10-year suspension of the CBA under the PAL-PALEA agreement virtually installed PALEA
as a company union for said period, amounting to unfair labor practice, in violation of Article 253-A of the Labor Code
mandating that an exclusive bargaining agent serves for five years only.

OPINION:
The protection to labor is not absolute. When such protection of labor would make it gravely unfair for management
to actually operate its establishment, such protection of labor would not stand as the Labor Code is not always in
favor of Labor especially if such company is suffering financial losses.