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DAVAO INTEGRATED v ABARQUEZ

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, thus:

Section 1. Sick Leaves — The Company agrees to grant 15 days sick leave with pay each year to
every regular non-intermittent worker who already rendered at least one year of service with the
company. However, such sick leave can only be enjoyed upon certification by a company designated
physician, and if the same is not enjoyed within one year period of the current year, any unenjoyed
portion thereof, shall be converted to cash and shall be paid at the end of the said one year period.
And provided however, that only those regular workers of the company whose work are not
intermittent, are entitled to the herein sick leave privilege.

xxx xxx xxx

Section 3. — All intermittent field workers of the company who are members of the Regular Labor Pool
shall be entitled to vacation and sick leaves per year of service with pay under the following schedule
based on the number of hours rendered including overtime, to wit:

Upon its renewal on April 15, 1989, the provisions for sick leave with pay benefits were reproduced
under Sections 1 and 3, Article VIII of the new CBA, but the coverage of the said benefits was
expanded to include the "present Regular Extra Labor Pool as of the signing of this Agreement."

During the effectivity of the CBA 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 3, Article VIII of the CBA however it was discontinued upon the assumption of the new
assistant manager Mr. Benjamin Marzo on the ground that they are not entitled to the said benefits
under Sections 1 and 3 of the 1989 CBA.

Issue: W/N intermittent field workers are entitled to sick leave privilege and the commutation of the
unenjoyed portion of the sick leave

Ruling: It is 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.

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 sick leave with pay benefits provided they
comply with the conditions set forth under Section 1 in relation to the last 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.

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. 9 Besides, if the intention were otherwise, during its
renegotiation, why did not the parties expressly stipulate in the 1989 CBA that regular intermittent
workers are not entitled to commutation of the unenjoyed portion of their sick leave with pay benefits?
KIMBERLY CLARK PHILIPPINES v LORREDO

Facts: Petitioner Kimberly-Clark Philippines, Inc. (KCPI), seeks to set aside the Resolutions of 15
October 1991 and 21 November 1991 of public respondent Voluntary Arbitrator Danilo Lorredo,
holding that the nephew of a retired employee should be employed by KCPI as his replacement
pursuant to Section 1, Article XX, of their Collective Bargaining Agreement ("CBA").

The pertinent provisions of the CBA,2 relevant to the controversy, is hereinafter quoted:

Art. XX — Resignation, Retirement, Disability and Death.

Sec. 1. The COMPANY agrees to employ, the immediate member of the family of an employee provided
qualified, upon the employee's resignation, retirement, disability or death. In case of resignation, however,
employment of an immediate member of the family of an employee may be allowed provided the employee
has rendered a service of ten (10) years and above and the resignation is not a forced resignation. For the
purpose of this section, the phrase "immediate member of the family of an employee" shall refer to the
employee's legitimate children and in default thereof to the employee's collateral relative within the third civil
degree. The recommendee of the retired/resigned employee shall, if qualified, be hired on probationary status.

Danilo L. Guerrero, an employee assigned as Operator B in KCPI's Finishing Section, voluntarily


resigned on 02 January 1991, after thirteen (13) years and three (3) months of employment with the
petitioner corporation. Pursuant to Section I, Article XX, of the aforementioned CBA, Guerrero, through
the Union, recommended for hiring his nephew (name undisclosed from the records), who is a
collateral relative within the third civil degree.

KCPI informed that it could not act favorably on Guerrero's recommendee "(i)n as much as Mr. Danilo
L. Guerrero has legitimate children. The private respondent argued that, since Guerrero's legitimate
children are still minors, he could validly recommend for hiring his nephew.

Issue: W/N Guerrero can recommend his nephew as his replacement

Ruling: The company has agreed in its CBA with the employees "to employ (an) immediate member
of the family provided qualified upon the employee's resignation, retirement, disability or death." This
is its basic covenant. Covered by the term "(an) immediate member of the family" are the employee's
legitimate children and, in default thereof, a collateral relative within the third civil degree; it is thus a
definition by inclusion. As we see it, the phrase "in default thereof" has not been intended or
contemplated by the parties as having a preclusive effect within the group. It simply sets a priority on
who can possibly be recommendees for employment. The employee, in fine, need not be childless at
all for him to be allowed to nominate a third degree collateral relative; otherwise, his ability to designate
such relative is all but suddenly lost by the birth of an only child and regained by the latter's demise.
This situation could not have been intended.

We take note, furthermore, that KCPI is not obligated to unconditionally accept the recommendee
since the latter must still meet the required employment standards theretofore set by it. And even when
the recommendee is qualified, he, nonetheless, shall be hired only, pursuant to the agreement, on a
"probationary status," an added measure, we assume, to further prove his worth for eventual regular
employment. The company is not, therefore, left without its own safeguards under the agreement.
MINDANAO TERMINAL AND BROKERAGE SERVICE v. CONFESOR
Facts: This is a petition for certiorari to set aside the order of respondent Honorable
Secretary of Labor and Employment, declaring (1) wage increases granted by petitioner
to its employees not creditable as compliance by the company with future mandated wage
increases, and (2) the increases to be retroactive, in the case of the fourth year wage
increase, to August 1, 1992 to be implemented until July 31, 1993 and, in the case of the
fifth year wage increase, to August 1, 1993 to be implemented until the expiration of the
CBA on July 31, 1994.

Petitioner Mindanao Terminal and Brokerage Service, Inc., (hereafter referred to as


the Company) and respondent Associated Labor Unions, (hereafter referred to as the
Union) entered into a collective bargaining agreement for a period of five (5) years,
starting on August 1, 1989 and ending July 31, 1994.
On the third year of the CBA on August 1, 1992, the Company and the Union met to
renegotiate the provisions of the CBA for the fourth and fifth years. The parties, however,
failed to resolve some of their differences, as a result of which a deadlock developed.
On November 12, 1992, a formal notice of deadlock was sent to the Company on the
following issues: wages, vacation leave, sick leave, hospitalization, optional retirement,
13th month pay and signing bonus which was later resolved on Dec.8, 1992. The
agreement left only one issue for resolution of the parties, namely, retirement. But no
sooner had he stated this than the Company claimed that the wage increases which it
had agreed to give to the employees should be creditable as compliance with future
mandated wage increases. In addition, it maintained that such increases should not be
retroactive.
Reacting to this development, the Union again filed a Notice of Strike. As conciliation
proved futile, the Company petitioned respondent Secretary of Labor and Employment
(hereafter Secretary of Labor) to assume jurisdiction over the dispute.
The Secretary of Labor held that the wage increases for the fourth and fifth years of
the CBA were not to be credited as compliance with future mandated increases. In
addition, the fourth year wage increase was to be retroactive to August 1992 and was to
be implemented until July 31, 1993, while the fifth year wage increase was to take effect
on August 1, 1993 until the expiration of the CBA. Hence, the petition for certiorari.
Issue: W/N Sec of Labor erred in its decision
Ruling: The petition is without merit. Art. 253-A of the Labor Code reads:

Terms of a collective bargaining agreement. - Any Collective Bargaining Agreement


that the parties may enter into shall, insofar as the representation aspect is concerned,
be for a term of five (5) years.No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective
Bargaining Agreement. All other provisions of the Collective Bargaining Agreement
shall be renegotiated not later than three (3) years after its execution. Any agreement
on such other provisions of the Collective Bargaining Agreement entered into within
six (6) months from the date of expiry of the term of such other provisions as fixed in
such Collective Bargaining Agreement, shall retroact to the day immediately following
such date. If any such agreement is entered into beyond six months, the parties shall
agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation
of the collective bargaining agreement, the parties may exercise their rights under this
Code.

The Secretary of Labor found that as early as January 14, 1993, well within the six
(6) month period provided by law, the Company and the Union have perfected their
agreement.[7] The claim of petitioner to the contrary notwithstanding, this is a finding of an
administrative agency which, in the absence of evidence to the contrary, must be
affirmed.
Moreover, the order of the Secretary of Labor may be considered in the nature of an
arbitral award, pursuant to Art. 263(g) of the Labor Code, and, therefore, binding on the
parties. After all, the Secretary of Labor assumed jurisdiction over the dispute because
petitioner asked the Secretary of Labor to do so after the NCMB failed to make the parties
come to an agreement. It is also conceded that the industry in which the petitioner is
engaged is vital to the national interest. As stated in the Order issued by the Secretary of
Labor on March 10, 1993:[8]

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the


effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263(g)
of the Labor Code, such as herein involved, public respondent is deemed vested with
plenary and discretionary powers to determine the effectivity thereof.
MANLIMOS V. NLRC

Facts: The petitioners were among the regular employees of the Super Mahogany Plywood
Corporation, a domestic corporation organized in 1988 and based in Butuan City. They had been hired
as patchers, taper-graders, and receivers-dryers. On 1 September 1991, a new owner/management
group headed by Alfredo Roxas acquired complete ownership of the corporation. The petitioners were
advised of such change of ownership; however, the petitioners continued to work for the new owner
and were considered terminated, with their conformity, only as of December 1991 when they received
their separation pay, 13th month pay, and all other benefits due them computed as of the said month.
Each of them then executed on 17 December 1991 a Release and Waiver which they acknowledged
before Atty. Nolasco Discipulo, Hearing Officer of the Butuan City District Office of the Department of
Labor and Employment (DOLE).

On 27 December 1991, the new owner caused the publication of a notice for the hiring of workers,
indicating therein who of the separated employees could be accepted on probationary basis. The
petitioners then filed their applications for employment. For their alleged absence without leave, Perla
Cumpay and Virginia Etic were considered, as of 4 May 1992, to have abandoned their work.

Petitioners filed a complaint against the private respondent for "non-payment of wages, underpayment
of wages, incentive leave pay, non-payment of holiday pay, overtime pay, 13th month pay, separation
pay, reinstatement with back wages, illegal termination and damages."

Labor Arbiter ruled in favour of the petitioners which was reversed by the NLRC. Hence this petition.

Issue: W/N the NLRC committed grave abuse of discretion by revesing the Labor Arbiter’s decision.

Ruling: There can be no controversy for it is a principle well-recognized, that it is within the employer's
legitimate sphere of management control of the business to adopt economic policies or make some
changes or adjustments in their organization or operations that would insure profit to itself or protect
the investment of its stockholders. As in the exercise of such management prerogative, the employer
may merge or consolidate its business with another, or sell or dispose all or substantially all of its
assets and properties which may bring about the dismissal or termination of its employees in the
process. Such dismissal or termination should not however be interpreted in such a manner as to
permit the employer the very concept of social justice.

Since the petitioners were effectively separated from work due to a bona fide change of ownership
and they were accordingly paid their separation pay, which they freely and voluntarily accepted, the
private respondent corporation was under no obligation to employ them; it may, however, give them
preference in the hiring. The private respondent in fact hired, but on probationary basis, all the
petitioners, except Rosario Cuarto. The non-hiring of Cuarto was legally permissible.

The hiring of employees on a probationary basis is an exclusive management prerogative. The


employer has the right or privilege to choose who will be hired and who will be denied employment. It
is within the exercise of this right that the employers may set or fix a probationary period within which
it may test and observe the employee's conduct before hiring him permanently.15

A different conclusion would have to be reached with respect to Perla Cumpay and Virginia Etic. They
were dismissed and were not accorded due process hence they must be entitled to reinstatement and
back wages.
ELISCO ELIROL LABOR UNION (NAFLU) v NORIEL

Facts: Petitioner-Elisco Elirol Labor Union (NAFLU), negotiated and executed a collective bargaining
agreement with respondent-Elizalde Steel Consolidated, Inc but it was not yet registered to Bureau of
Labor Relations and therefore not entitled to the benefits and privileges embodied in said collective
bargaining agreement. Thus on March 3, 1975, the member of petitioner-appellant union in a general
membership meeting decided in a resolution to register their union to protect and preserve the integrity and
inviolability of the collective bargaining agreement between the Elisco-Elirol Labor Union (NAFLU) and the
Elizalde Steel Consolidated, Inc.

On May 28, 1975, Certificate of Registration was issued in favour of local union giving them a
personality separate and distinct from any other labor union. On June 11, 1975, petitioner informed
the company of their disaffiliation from their mother union named National Federation of Labor Unions,
and subsequently requested respondents to recognize petitioner as the sole and exclusive bargaining
representative of the employees thereof.

Respondent without any justifiable reason refused and continues to refuse to recognize petitioner as
the sole and exclusive bargaining representative of its employees.

Issue: W/N local union is the sole and exclusive bargaining representative of its employees

Ruling: Yes, local union should be the sole and exclusive bargaining representative of the employees
of respondent corporation.

1. Respondent director correctly perceived in his Resolution that "to grant to the former mother union
(NAFLU) the authority to administer and enforce their collective bargaining agreement without
presumably any members in the bargaining unit is quite absurd" but fell unto the grave error of holding
that "When the employees disaffiliated from the mother union and formed themselves into a new union,
their status as employees was also terminated."

His error was in not perceiving that the employees and members of the local union did not form a new
union but merely registered the local union as was their right. Petitioner Elisco-Elirol Labor Union-
NAFLU, consisting of employees and members of the local union was the principal party to the
agreement. NAFLU as the "mother union" in participation in the execution of the bargaining agreement
with respondent company acted merely as agent of the local union, which remained the basic unit of
the association existing principally and freely to serve the common interest of all its members, including
the freedom to disaffiliated when the circumstances so warranted as in the present case.

Corollarily, the "substitutionary" doctrine likewise fully supports petitioner's stand. Petitioner union to
whom the employees owe their allegiance has from the beginning expressly avowed that it "does not
intend to change and/or amend the provisions of the present collective bargaining agreement but only
to be given the chance to enforce the same since there is a shift of allegiance in the majority of the
employees at respondent company."

... This principle, formulated by the NLRB as its initial compromise solution to the
problem facing it when there occurs a shift in employees' union allegiance after the
execution of a bargaining contract with their employer, merely states that even during
the effectivity of a collective bargaining agreement executed between employer and
employees thru their agent, the employees can change said agent but the contract
continues to bind then up to its expiration date. They may bargain however for the
shortening of said expiration date.

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