A.

DEFINITION
KIOK LOY vs. NLRC and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)
FACTS: In a certification election, KILUSAN, a legitimate late labor federation, won and was subsequently
certified in a resolution by the BLR as the sole and exclusive bargaining agent of the rank-and-file employees of
Sweden Ice Cream Plant (Company).
Thereafter, the Union furnished the Company with copies of its proposed CBA. At the same time, it
requested the Company for its counter proposals. The request were ignored and remained unacted upon by the
Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union filed a
“Notice of Strike”, with the BLR on ground of unresolved economic issues in collective bargaining.
The NLRC rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent [company] is hereby declared guilty of unjustified refusal to bargain, in violation of
Section (g) Article 248 (now Article 249), of P.D. 442, as amended. xx

ISSUE: Did the NLRC act with grave abuse of discretion?

HELD: NO
Collective bargaining which is defined as negotiations towards a collective agreement, is one of the
democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and
management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the
employer and the Union and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor
Code makes it an unfair labor practice for an employer to refuse “to meet and convene promptly and expeditiously
in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms
and conditions of employment including proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if requested by either party.
We are in total conformity with respondent NLRC’s pronouncement that petitioner Company is GUILTY
of unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified
bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed CBA, to the
Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no
counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. A Company’s
refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and
this is especially true where the Union’s request for a counter proposal is left unanswered. Even during the period of
compulsory arbitration before the NLRC, petitioner Company’s approach and attitude-stalling the negotiation by a
series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial
statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the
Union.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the
Union has a valid cause to complain against its (Company’s) attitude, the totality of which is indicative of the
latter’s disregard of, and failure to live up to, what is enjoined by the Labor Code — to bargain in good faith.
NOTES: While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty
to initiate contract negotiation. The mechanics of collective bargaining is set in motion only when the
following jurisdictional preconditions are present, namely,
(1) possession of the status of majority representation of the employees’ representative in accordance with any of the
means of selection or designation provided for by the Labor Code;
(2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New Labor Code . … all of which preconditions are
undisputedly present in the instant case

B. Importance of Collective Bargaining:

The collective bargaining advances the mutual understanding between the two parties i.e., employees and
employers.
The role of collective bargaining may be evaluated from the following point of view:
(1) From Management Point of View:
The main object of the organization is to get the work done by the employees at work at minimum cost and thus earn
a high rate of profits. Maximum utilization of workers is a must for the effective management. For this purpose co-
operation is required from the side of the employees and collective bargaining is a device to get and promote co-
operation. The labor disputes are mostly attributable to certain direct or indirect causes and based on rumors, and
misconceptions. Collective bargaining is the best remedial measure for maintaining the cordial relations.
(2) From Labor and Trade Union Point of View:
Labor has poor bargaining power. Individually a worker has no existence because labor is perishable and therefore,
the employers succeed in exploiting the laborers.
The working class in united form becomes a power to protect its interests against the exploitation of the employers
through the process of collective bargaining.
The collective bargaining imposes certain restrictions upon the employer. Unilateral action is prevented. All
employees are treated on equal footings. The conditions of employment and rates of wages as specified in the
agreement can be changed only through negotiations with labor. Employer is not free to make and enforce decisions
at his will.
Collective bargaining can be made only through the trade unions. Trade unions are the bargaining agents for the
workers. The main function of the trade unions is to protect the economic and non- economic interests of workers
through constructive programs and collective bargaining is one of the devices to attain that objective through
negotiations with the employers, Trade unions may negotiate with the employer for better employment opportunities
and job security through collective bargaining.
(3) From Government Point of View:
Government is also concerned with the process of collective bargaining. Government passes and implements several
labor legislations and desires it to be implemented in their true sense. If any person violates the rules and laws, it
enforces them by force.
Collective bargaining prevents the Government from using the force because an amicable agreement can be reached
between employer and employees for implementing the legislative provisions. Labor problems shall be minimized
through collective bargaining and industrial peace shall be promoted in the country without any force.
Collective bargaining is a peaceful settlement of any dispute between worker and employers and therefore it
promotes industrial peace and higher productivity resulting an increase in the Gross National Product or the national
income of the country.

C. COLLECTIVE BARGAINING VS COLLECTIVE NEGOTIATION

Collective Bargaining, as the name suggests, is a group action involving negotiation between the
representative of employees and the management, on the matters relating to employment, so as to arrive at an
agreement. The collective agreement is an understanding, on account of the terms and conditions under which the
service is to be carried on.
Negotiation refers to a process which allows the people of different interest to arrive at a mutually
acceptable agreement on an issue, but at the same time seeking to increase the benefit to be gained for their interest
group. The basic objective of negotiation is to reconcile the differences between employer and employees and to
suggest ways of fulfilling their expectations.
Collective Bargaining refers to the rights of the employees in the private sector. Negotiation refers to
the rights of employees in the government or public sector, on terms and conditions not fixed by law
D. CONSTITUTIONAL PROVISIONS
Article II, Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.
Article III, Sec. 8. The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for purposes not contrary to law shall not be abridged. (It includes both the
right to associate and the right not to associate)
Article IX-B, Sec. 2(5). The right to self-organization shall not be denied to government employees.
Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the preferential
use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share
in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and
growth. (Protection to labor clause)

E. CIVIL CODE PROVISIONS ON COLLECTIVE BARGAINING

Art 1700. The relations between capital and labor are not merely contractual. They are so impressed with
public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the
special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions,
hours of labor and similar subjects.
Art 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or
convenience of the public.
Art. 1704. In collective bargaining, the labor union or members of the board or committee signing the
contract shall be liable for non-fulfillment thereof.

F. Collective Bargaining as part of the employees’ right to self-organization

Art 3. The State shall afford protection to labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the
rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of
work.
Art. 218. Declaration of Policy (See LC renumbered)
Art. 253. Coverage and employees’ right to self-organization. All persons employed in commercial,
industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions, whether
operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of
their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers may form labor organizations for their
mutual aid and protection..
Art. 257. Non-abridgment of right to self-organization. It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-
organization. Such right shall include the right to form, join, or assist labor organizations for the purpose of
collective bargaining through representatives of their own choosing and to engage in lawful concerted activities for
the same purpose for their mutual aid and protection, subject to the provisions of Article 264 of this Code.

PAL v NLRC
Facts: PAL completely revised its 1966 Code of Discipline. The Code was circulated among the employees and was
immediately implemented, and some employees were forthwith subjected to the disciplinary measures embodied
therein. The Philippine Airlines Employees Association (PALEA) filed a complaint before the National Labor
Relations Commission (NLRC). PALEA contended that PAL, by its unilateral implementation of the Code, was
guilty of unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code.
PALEA alleged that copies of the Code had been circulated in limited numbers; that being penal in nature the Code
must conform with the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and
prejudicial to the rights of the employees. It prayed that implementation of the Code be held in abeyance; that PAL
should discuss the substance of the Code with PALEA; that employees dismissed under the Code be reinstated and
their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice and be ordered
to pay damages PAL asserted its prerogative as an employer to prescribe rules and regulations regarding employees'
conduct in carrying out their duties and functions, and alleging that by implementing the Code, it had not violated
the collective bargaining agreement (CBA) or any provision of the Labor Code. Assailing the complaint as
unsupported by evidence, PAL maintained that Article 253 of the Labor Code cited by PALEA referred to the
requirements for negotiating a CBA which was inapplicable as indeed the current CBA had been negotiated.
Issue: W/N the formulation of a Code of Discipline among employees is a shared responsibility of the employer and
the employees.
Ruling: Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature
of its business cannot be overemphasized. In fact, being a local monopoly in the business demands the most
stringent of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted
cannot be properly implemented in the absence of full cooperation of the employees. Such cooperation cannot be
attained if the employees are restive on account, of their being left out in the determination of cardinal and
fundamental matters affecting their employment.

The PRINCIPLE OF CO-DETERMINATION states that it is a joint responsibility of the employer and the
employee to establish terms and conditions of employment. In establishing such terms and conditions of
employment, the employer and the employee must take into consideration existing laws and regulations.
Participation in policy and decision making processes affecting their rights and benefits as may be provided by law

G. Parties to Collective Bargaining

Diamond Hotel vs Diamond Hotel Employees Union

An ordinary striking worker cannot be dismissed for mere participation in an illegal strike unless there be a
proof that he committed illegal acts during a strike.
FACTS: The Diamond Hotel Employee’s Union (the union) filed a petition for Certification Election before the
DOLE-National Capital Region (NCR) seeking certification as the exclusive bargaining representative of its
members. The DOLE-NCR denied said petition as it failed to comply with the legal requirements.
The Union later notified petitioner hotel of its intention to negotiate for collective
bargaining agreement (CBA). The Human Resource Department of Diamond Hotel rejected the notice and advised
the union since it was not certified by the DOLE as the exclusive bargaining agent, it could not be recognized as
such. Since there was a failure to settle the dispute regarding the bargaining capability of the union, the union went
on to file a notice of strike due to unfair labor practice (ULP) in that the hotel refused to bargain with it and the rank-
and-file employees were being harassed and prevented from joining it. In the meantime, Kimpo filed a complaint for
ULP against petitioner hotel.
After several conferences, the union suddenly went on strike. The following day, the National Union of
Workers in the Hotel, Restaurant and Allied Industries (NUWHRAIN) joined the strike and openly extended its
support to the union. The some of the entrances were blocked by the striking employees. The National Labor
Relations Commission (NLRC) representative who conducted an ocular inspection of the Hotel premises confirmed
in his Report that the strikers obstructed the free ingress to and egress from the Hotel. The NLRC thus issued a
Temporary Restraining Order (TRO) directing the strikers to immediately “cease and desist from obstructing the
free ingress and egress from the Hotel premises. During the implementation of the order, the striking employees
resisted and some of the guards tasked to remove the barricades were injured. The NLRC declared that the strike
was illegal and that the union officers and members who participated were terminated on the grounds of
participating in an illegal strike.
The union contended that the strike was premised on valid ground and that it had the capacity to negotiate
the CBA as the representatives of the employees of Diamond Hotel. The union contended that their dismissal is
tantamount to an unfair labor practice and union busting.
On appeal, the Court of Appeals affirmed the NLRC Resolution dismissing the complaints of Mary Grace, Agustin
and Rowena and of the union. It modified the NLRC Resolution, however, by ordering the reinstatement with back
wages of union members.
ISSUE:
Whether or not the dismissal of the union members is valid on the grounds of participating in an illegal strike
HELD:
Even if the purpose of a strike is valid, the strike may still be held illegal where the means employed are illegal.
Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are
injurious to the rights to property renders a strike illegal. And so is picketing or the obstruction to the free use of
property or the comfortable enjoyment of life or property, when accompanied by intimidation, threats, violence, and
coercion as to constitute nuisance.
As the appellate court correctly held, the union officers should be dismissed for staging and participating in
the illegal strike, following paragraph 3, Article 264(a) of the Labor Code which provides that “. . .any union officer
who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the
commission of illegal acts during strike may be declared to have lost his employment status . . .”
An ordinary striking worker cannot, thus be dismissed for mere participation in an illegal strike. There must
be proof that he committed illegal acts during a strike, unlike a union officer who may be dismissed by mere
knowingly participating in an illegal strike and/or committing an illegal act during a strike.
*W/n petitioner’s refusal to bargain with responded can be considered a ULP to justify the strike.
NO. The burden of proof is on the union to prove its allegations by substantial evidence. The petition only contains
general allegations. While the union continues to accuse the hotel of violations the former’s constitutional right to
organize by busting the union, the Court noted that the facts and evidence failed to establish a rational basis for the
union to stage a strike when the union could have substantiated it during the conciliatory meeting. The union’s
principal ground for the strike was the refusal of the Hotel Management to bargain collectively with the Union for
the benefit of the latter’s members. Petitioner Union is not a certified bargaining unit to negotiate a CBA.

Bautista vs Inciong
FACTS:
Petitioner was employed by Associated Labor Unions(ALU) as organizer. Bautista went on leave and when he went
back to work, he was informed that he was already terminated. The Director ruled in favor of Bautista. The Deputy
Minister of Labor, however, set aside the order of the Director finding that his membership coverage with the SSS w
hich shows that respondent ALU is the one paying the employer’s share in the premiums is not conclusive proof that
respondent is the petitioner’s employer because such payments were performed by the respondent as a favor for all t
hose who were performing full time union activities with it to entitle them to SSS benefits. He then ruled that there
was no employer-
employee relationship between ALU and Bautista by the fact that ALU is not an entity for profit but a duly registere
d labor union whose sole purpose is the representation of its bonafide organization units.

ISSUE:Whether or not there can be employer-employee relationship between a labor union and its member.

HELD:Yes, the mere fact that the respondent is a labor union does not mean that it cannot be considered an employ
er of the persons who work for it.Moreover, the four elements in determining the existence of an employer-
employee relationship was present in the case at bar. The Regional Director correctly found that the petitioner was a
n employee of the respondent union as reflected in the latter’s individual payroll sheets and shown by the petitioner’
s membership with the Social Security System (SSS) and the respondent union’s share of remittances in the petitione
r’s favor. Bautista was selected and hired by the union. ALU had the power to dismiss him as indeed it dismissed hi
m. And definitely, the Union tightly controlled the work of Bautista as one of its organizers.