ANALYSIS

After thirteen years of a long-drawn-out litigation between

Employees

Union

of

Bayer

Philippines

(EUBP-FFW)

and

Bayer

Philippines Inc., the dispute between the two finally reached the
Supreme Court. In the December 6, 2010 decision penned by Associate
Justice Martin Villarama, the Court found Bayer Philippines guilty of
unfair labor practice. It ordered the Company to remit to EUBP-FFW
union fees erroneously turned over to Avelina Remigio and Anastacia
Villareal, officers of the other union, Reformed Employees Union of
Bayer Philippines (REUBP). In addition, Bayer was also ordered to pay
nominal damages.
But in order to fully appreciate the nature and the complexity of
the case, it is not enough to delve only into what is reflected in the
records of the Supreme Court. After the discussion of the Court
decision, it is also proper to look into how the controversy was dealt
with in accordance to the Convention on the Organization for Economic
Cooperation

and

Development

(OECD).

Bayer

Philippines

is

subsidiary of Bayer AG, a corporation domiciled in Germany. Since

Germany is a signatory to the Convention, there are considerations as
to

its

compliance

with

the

OECD

Guidelines

on

Multinational

Enterprises, which will also be discussed.

What is the OECD?
The

OECD

is

an

international

organization

that

helps

governments tackle the economic, social, and governance challenges

of a globalised economy.1 This includes labor relations as regards
corporations that have subsidiaries in different countries. Conflict of
interest matters for governments because it ensures that the integrity

1 About the OECD. ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT.

<http://www.oecd.org/general/organisationforeuropeaneconomicco-operation.htm> 30 May 2016.

of government decision-making is not compromised by public officials

private interests.
The

OECD

helps

countries

modernize

their

approach

for

managing conflict of interest by mapping risks and positions within the

public service. Hence, the OECD has developed Guidelines for
Managing Conflict of Interest in the Public Service, which was approved
in June 2003. It reflects a consensus by member countries as good
practice.
The
principles

OECD
and

Guidelines

standards

contain

for

recommendations

responsible

business

providing

conduct

for

multinational corporations operation in or from countries adhered to

the Declaration. The Guidelines are legally non-binding however, the
countries

adhering

to

the

Guidelines

make

commitment

to

implement them, in pursuance to the objective of the OECD, which is

to ensure that the operations of private enterprises are in harmony
with government policies. This is to strengthen the basis of mutual
confidence between private corporations and the societies in which
they operate, not just in one country but all over the world.
Germany is a member country of the OECD. As such, Bayer AG,
being a German corporation, falls within the ambit of the OECD
Guidelines.
EUBP v. Bayer Philippines in the OECD
The facts of the case, in relation to this particular section of the
Guidelines, was raised to the National Contact Point of Germany when
the case was brought before the OECD. The specific issue at the focus
of attention was the legality of dismissal for operational reasons of
union representatives and members of the EUBP-FFW in the years from
2000 to 20002. EUBP-FFW also claimed entitlement vis--vis Bayer

Philippines to the union membership dues transferred by that company

to the REUBP union, which was retroactively found to be unlawful.
The case was brought by the EUBP-FFW to the Confederation of
German Trade Unions (in German, the Deutscher Gewerkschaftsbund,
or the DB, for short). It represents the member unions in contact with
the government authorities, the political parties and the employers'
organizations. Together, they raised the controversy to the National
Contact Point of Germany, which is the arm provided for by the OECD
structure for handling inquiries and resolution of issues. On June 27,
2003, the German National Contact Point (NCP) received a complaint
from DGB against Bayer AG. According to the DGB and the EUBP-FFW,
the General Policies (Section II) and the principles underlying
Employment and Industrial Relations (Section V) of the OECD
Guidelines, in particular the principle of bona fide negotiations had not
been observed.
Section V of the Guidelines focuses on Employment and
Industrial Relations.2 It provides that:
Enterprises should, within the framework of applicable
law, regulations and prevailing labour relations and
employment practices and applicable international labour
standards:
xxx
3. Promote consultation and co-operation between
employers and workers and their representatives on
matters of mutual concern.
4. a) Observe standards of employment and industrial
relations not less favourable than those observed by
comparable employers in the host country.
b) When multinational enterprises operate in developing
countries, where comparable employers may not exist,
provide the best possible wages, benefits and conditions
2 OECD Guidelines for Multinational Enterprises (2011 Edition). ORGANIZATION FOR ECONOMIC COOPERATION
AND DEVELOPMENT. <http://www.oecd.org/daf/inv/mne/48004323.pdf> 30 May 2016.

of work, within the framework of government policies.

These should be related to the economic position of the
enterprise, but should be at least adequate to satisfy the
basic needs of the workers and their families.
xxx
7. In the context of bona fide negotiations with workers
representatives on conditions of employment, or while
workers are exercising a right to organise, not threaten to
transfer the whole or part of an operating unit from the
country concerned nor transfer workers from the
enterprises' component entities in other countries in order
to influence unfairly those negotiations or to hinder the
exercise of a right to organise.
8. Enable authorised representatives of the workers in
their employment to negotiate on collective bargaining or
labour-management relations issues and allow the parties
to consult on matters of mutual concern with
representatives of management who are authorised to
take decisions on these matters. x x x

The DGB argued that a subsidiary of Bayer AG in the Philippines

had unlawfully recognized one of two competing company unions as a
contracting party to a collective bargaining agreement in the period
from 1998 to 2002. Included also in the complaint were allegations
raised in the Philippine proceedings: (a) violation of the collective
bargaining agreement executed between Bayer Philippines and EUBPFFW, (b) violation of RA 6715, which provides for the jurisdiction of
The

German

NCP

accepted

the

complaint

and

reviewed

statements from the parties. In July 2004, the NCP held discussions
with DGB; it met with both parties at the German Federal Ministry of
Economics and Labor in October 2004.
The purpose of the meeting was to facilitate information
exchange with a view toward reaching an agreement acceptable to all
parties DGB (the German Union), EUFP-FFW (the affected Philippine
union), and Bayer AG. After additional discussions in May to June 2007,

the NCP closed the case and issued a joint statement in accordance
with the OECD Guidelines.
The NCP mediations held on May to June 2007 resulted in the
issuing of a joint statement 3 committing the parties in the Philippines,
namely Bayer Philippines, EUBP-FFW, and the former union president,
Juanito Facundo.
Bayer AG asserted that Bayer-Philippines management never
intended to obstruct union activities by EUBP-FFW and expressed
regret that EUBP-FFW and DGB had a different impression. Bayer AG
said that this controversy could have been avoided if all involved had
been more willing to cooperate and reached out more to one another.
Given the financial losses incurred by EUBP-FFW (through the
loss of its share of union membership dues from 1998 to 2002), Bayer
Philippines offered to repay the union on the condition that the latter
drop all its claims and legal measures against Bayer Philippines
relating to the (now undisputed) transfer of union membership dues to
REUBP from 1998 to 2002.
In the case of the sole pending individual labor court proceeding
(filed by the former EUBP President against Bayer Philippines), a
settlement had already been reached (taking into account the ruling of
the Court of Appeals of January 30, 2006). The settlement provided for
the reinstatement of the former union president with the payment of
all claims and remuneration since his termination in 2000, and
damages. All parties committed themselves to end the controversy
with an amicable settlement of the proceedings.
EUBP v. Bayer Philippines and the Supreme Court Decision
3 "Statement by the German National Contact Point for the OECD Guidelines for Multinational Enterprises
on a Specific Instance brought by the DGB against Bayer AG." OECD ACCESS RESULTS. 29 June 2009.
<https://www.oecd.org/corporate/mne/39243615.pdf> 31 May 2016.

It appears, however, that despite the mediations held through the

OECD measures, the case against Bayer Philippines was still pursued
by the Union. The statement was reached on June 2007, but the
Supreme Court decision was arrived at on December 2010. The SC
decision also does not appear to have any mention of the mediation
proceedings that was held between the parties. The statement of the
German National Contact Point acknowledges that the settlement took
into consideration the Court of Appeals ruling of January 30, 2006.
This is perhaps because in the OECD, the primary corporation
involved is Bayer AG, which is separate and distinct from Bayer
Philippines, the defendant in the Philippine case. As far as the OECD is
concerned, it is Germany who is its signatory. Being the German
corporation, Bayer AG is the one held accountable under the
Guidelines. In this scenario, it can be assumed that Bayer AGs only
responsibility is to acknowledge the lapse in judgment on the part of
Bayer Philippines when violated the CBA with the subsisting exclusive
bargaining agent. It brought the parties together by recognizing the
complaint filed through the OECD channels. But it had no obligation to
pay the EUBP-FFW as it was not the party liable. It was its subsidiary
that committed the violations. Hence, it was only proper that Bayer
Philippines was held liable. As the Labor Code provides that cases of
unfair labor practice cannot be compromised, the negotiations would
not have erased the liability of the local company as regards the EUBPFFW.
It is interesting to note that in both avenues pursued by the
parties, the union EUBP-FFW emerged successful. In the mediation
proceedings in the OECD, Bayer AG acknowledged the oversight by its
subsidiary, given the circumstances between the two unions. As a
result, Bayer Philippines offered to pay the union its due and the
losses. On the other hand, in the Supreme Court decision, it was found

that the company, Bayer Philippines, committed unfair labor practice

when it violated the CBA by not remitting the union dues to them and
by entering into another CBA with another union, the REUBP, while the
1997 2011 CBA with EUBP was still subsisting.
In the end, the plight of the laborers was resolved in their favor.
Both channels were able to elucidate clearly how it was the corporation
that violated the agreement between the parties, and how it was the
employees that were disadvantaged for more than a decade. The only
downside is that it took far too long almost thirteen years for its
resolution. But in the end, consistent with the State policy that full
protection should be afforded to laborers, the result of this case ended
up working greatly in accord with the employees interests.