Part I : Definitions and Policies
Labor Relations
Part I : Definitions and Policy
1.01 DEFINITIONS
1. EMPLOYER AND EMPLOYEE
EMPLOYER
Art. 212 (e)
 “Employer INCLUDES any person acting in
the interest of an employer, directly or
indirectly.”
 “The term shall NOT include any labor
organization or any of its officer or agents
EXCEPT when acting as an employer.”
Note: By using the word “includes” and not
“mean”, Congress did not intend to give a
complete definition of “employer”. But rather
such definition should be complementary to
what is commonly understood as employers.
 The Statutory Definition:
» Not only includes a principal employer,
» BUT ALSO a person acting in behalf of an
employer.
 IMPLICATION: the employer may NOT
necessarily be the owner of the business.
 The Statutory Definition EXCLUDES the
following:
» A labor organization, and
» One acting in behalf of a labor
organization.
 Can a Labor Organization be considered an
employer?
» Yes, but the only instance wherein a labor
organization becomes an employer is
when it is acting as an employer in
relation to its own employees and not as
a labor organization.
» Significance of this is that a Labor
Organization can possibly commit an
Unfair Labor Practice in two ways:
▪ As an Employer, if in relation to its
own employees (Art. 248); or
▪ As a Labor Organization, in relation to
the company(Art. 249).
EMPLOYEE
Art. 212 (f)
 “Employee INCLUDES any person in the
employ1 of an employer. “
 “The term shall NOT be limited to the
employees of a particular employer, UNLESS
this code so explicitly states.”
 “It shall include any individual whose work
HAS CEASED as a result of or in connection
with -- a) Any current labor dispute; or b)
Because of any unfair labor practice -- If he
has NOT obtained any other SUBSTANTIALLY
EQUIVALENT and REGULAR employment.”
Feati University v. Bautista (1966)
Feati University claims that teachers are not
employees of the university and that the contract
1
Employ: To make use of, the use the service of.
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entered between them was only one for lease of
work.
EMPLOYEES: one who is engaged in the service of
another, who performs service for another, who
works for salary or wages.
NYK International Knitwear V. NLRC (2003)
Anent petitioners’ assertion that they cannot
be solidarily liable in this case as there was no
malice or bad faith on their part has no leg to
stand on. What the Court finds apropos is our
disquisition in A.C. Ransom Labor Union-CCLU v.
NLRC, which held that since a corporation is an
artificial person, it must have an officer who can be
presumed to be the employer, being the “person
acting in the interest of the employer.” In other
words the corporation, in the technical sense only,
is the employer. In a subsequent case, we ordered
the corporate officers of the employer corporation
to pay jointly and solidarily the private
respondents’ monetary award. More recently, a
corporation and its president were directed by this
Court to jointly and severally reinstate the illegally
dismissed employees to their former positions and
to pay the monetary awards.
In this case Cathy Ng, admittedly, is the manager
of NYK. Conformably with our ruling in A. C.
Ransom, she falls within the meaning of an
“employer” as contemplated by the Labor Code,
who may be held jointly and severally liable for the
obligations of the corporation to its dismissed
employees. Pursuant to prevailing jurisprudence,
Cathy Ng, in her capacity as manager and
responsible officer of NYK, cannot be exonerated
from her joint and several liability in the payment
of monetary award to private respondent.
Great Southern Etc. V. Acuña (2005)
A thorough scrutiny of the purported
resignation letters reveals the true nature of these
documents. In reality, they are waivers or
quitclaims which are not sufficient to show valid
separation from work or bar respondents from
assailing their termination. The burden of proving
that quitclaims were voluntarily entered into falls
upon the employer. The reason for this rule was
laid down in the landmark case of Cariño vs.
ACCFA.
Acceptance of those benefits would not
amount to estoppel. The reason is plain.
Employer and employee, obviously, do not stand
on the same footing. The employer drove the
employee to the wall. The latter must have to get
hold of money. Because, out of job, he had to face
the harsh necessities of life. He thus found himself
in no position to resist money proffered. His, then,
is a case of adherence, not of choice. One thing
sure, however, is that petitioners did not relent
their claim. They pressed it. They are deemed not
to have waived any of their rights.
2. LABOR ORGANIZATION – LEGITIMATE
LABOR ORGANIZATION
LABOR ORGANIZATION
Art. 212 (g)
 Labor organization means any:
a) Union or Association of employees
b) which exists in whole or in part…
Part I : Definitions and Policies
Labor Relations
c) for the purpose of:
i. Collective bargaining concerning terms
and conditions of employment, or
ii. of Dealing with employers concerning
terms and conditions of employment.
LABOR ORGANIZATION
COMPOSITION : Employees
PURPOSE : Collective Bargaining or of
dealing with employers concerning terms and
conditions of employment.
LEGITIMATE LABOR ORGANIZATION
Art. 212 (h)
 Legitimate Labor Organization means any
labor organization DULY REGISTERED with
DOLE and includes any branch or local
thereof.
 Is the local or branch required to be a
legitimate labor organization, even though
the national union or federation to which its
is affiliated is already a legitimate labor
organization? -- Yes.
Lopez Sugar Corporation v. Secretary of
Labor (1995)
It is not enough that the national union or
federation, but the local or branch should also be a
legitimate labor union either by
1. Direct (independent) registration or
2. By submitting requirements as a local
affiliate of a legitimate labor organization.
REASON: In relation to the employer, the local is
the principal and the national union is the agent.
So if the principal is not legitimate, it does not
matter whether the agent is legitimate or not
because as agent it acts as an extension of the
personality of the principal and not as itself.
 Can a legitimate labor organization be
composed of both rank and file employees
and supervisory employees? -- No.
Toyota Motor Philippines v. Toyota Motors
Philippines Corporation Labor Union
Clearly, based on this provision [Article 245,
Labor Code], a 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 apetition 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.
 Can a union composed of supervisors and
rank and file employees of one company call
for a certification election? – No.
Dunlop v. Secrtary of Labor (1998)
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In this case the SC ruled that the infirmity in
the membership of the respondent union cannot be
remedied in "the pre-election conference thru the
exclusion-inclusion proceedings wherein those
employees who are occupying rank-and-file
positions will be excluded from the list of eligible
voters."
The Secretary of Labor in this case gravely
misappreciated the basic antipathy between the
interest of supervisors and the interest of rank-
and-file employees when he ordered to proceed
with the certification election despite the presence
of both supervisors and rank and file employees in
one union.
3. LABOR DISPUTES
Art. 212 (l)
 LABOR DISPUTES: includes—
1. Any controversy or matter…
2. Concerning
a. Terms or conditions of employment
or
b. The association or representation of
persons in negotiating, fixing,
maintaining, changing or arranging
the terms and conditions of
employment, …
3. regardless of whether the disputants
stand in proximate relation of employer
and employee.
 Can a dispute between contractual employees
(who are not regular employees of the
company) and the company be considered a
labor dispute, despite the absence of
employee-employer relationship? – Yes.
San Miguel Corp. Employees Union-PTGWO v.
Bersamira (1990)
A labor dispute can nevertheless exist
“regardless of whether the disputants stand in the
proximate relationship of employer and employee,”
provided the controversy concerns, among others,
the terms and conditions of employment or a
change or arrangement thereof.
The existence of a labor dispute is not
negatived by the fact that the plaintiffs and
defendants do not stand in the proximate relation
of an employer and employee.
Nestle Philippines, Inc. v. NLRC (1991)
Nestle’s demand for payment of the private
respondents’ amortizations on their car loans, or,
in the alternative, the return of the cars to the
company, is NOT A LABOR DISPUTE, but a civil
dispute. It involves debtor-creditor relations,
rather than employee-employer relations.
Gold City Integrated Port Service, Inc. v.
NLRC (1995)
Note: A strike can only happen when there is a
labor dispute.
In this case a strike occurred. It was an illegal
strike for not complying with formal requisites.
a. A STRIKE, considered as the most effective
weapon of labor is defined as any
temporary stoppage of work by the
concerted action of employees as a
result of an industrial or labor dispute.
Part I : Definitions and Policies
Labor Relations
b. A labor dispute includes any controversy or
matter concerning terms or conditions of
employment of the association or
representation of persons in negotiating,
fixing, maintaining, changing or arranging
the terms and conditions of employment,
regardless of whether or not the disputants
stand in the proximate relation of
employers and employees.
c. Private respondents and their co-workers
stopped working and held the mass action
to press for their wages and other benefits.
What transpired then was clearly a strike,
for the cessation of work by concerted
action resulted from a labor dispute.
1.02 LABOR RELATIONS POLICY
SOURCES FOR THE POLICY
 Art. XIII Sec. 3 1987 Constitution
 Art. III Sec. 8 1987 Constitution
 Art. 211 Labor Code
Art. XIII Sec. 3 (Labor) CONSTITUTION
The STATE shall:
1. Afford FULL PROTECTION to labor,
▪ Local and overseas*
▪ Organized and unorganized,*
2. And PROMOTE FULL EMPLOYMENT and
EQUALITY of employment opportunities
for all.
3. It shall guarantee the RIGHTS OF ALL
WORKERS to (7):
(Labor relations)
▪ Self-organization,
▪ Collective bargaining and negotiations
▪ And peaceful concerted activities,
including
 right to strike IN ACCORDANCE
WITH LAW.*
They shall be entitled to:
(Labor standards)
▪ Security of Tenure
▪ Humane Conditions of Work,
▪ And a Living Wage.*
They shall also:
▪ Participate in policy and decision-
making processes affecting their (1)
rights and (2) benefits as may be
provided by law.*
4. The State promote: the principle of
shared responsibility between workers
and employers.*
5. The State shall promote the preferential
use of VOLUNTARY modes in settling
disputes, including conciliation,
▪ And shall enforce their mutual
compliance therewith to foster
INDUSTRIAL PEACE.*
6. The State shall regulate the relations
between workersand 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.
TAKE NOTE: Those with (*) are the new amendments in
the 1987 Constitution, they were not
included in the 1973 Constitution.
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ARTICLE 211. LABOR CODE.
Declaration of policy. —
A. It is the policy of the State:
a. To promote and emphasize the primacy of
free collective bargaining and
negotiations, including voluntary
arbitration, mediation and conciliation, as
modes of settling labor or industrial
disputes;
b. To promote free trade unionism as an
instrument for the enhancement of
democracy and the promotion of social
justice and development;
c. To foster the free and voluntary
organization of a strong and united labor
movement;
d. To promote the enlightenment of workers
concerning their rights and obligations as
union members and as employees;
e. To provide an adequate administrative
machinery for the expeditious settlement
of labor or industrial disputes;
f. To ensure a stable but dynamic and just
industrial peace; and
g. To ensure the participation of workers in
decision and policy-making processes
affecting their rights, duties and welfare.
B. To encourage a truly democratic method of
regulating the relations between the employers
and employees by means of agreements freely
entered into through collective bargaining,
 no court or administrative agency or official
shall have the power to set or fix wages,
rates of pay, hours of work or other terms
and conditions of employment, except as
otherwise provided under this Code.
Exception to this is Article 263 g which
discusses compulsory arbitration.
1. METHOD FOR DISPUTE SETTLEMENT
KEY CONCEPT: Voluntary and Free
ART. 211 (a)
To promote and emphasize the PRIMACY of free
collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation,
as modes of settling labor or industrial disputes;
ART 3
Declaration of basic policy. — 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.
Kiok Loy v. NLRC (1986)
COLLECTIVE BARGAINING which is defined as
negotiations towards a collective agreement is one
of the democratic frameworks under the New Labor
Code, designed:
1. To stabilize the relation between labor and
management and
2. 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.
Part I : Definitions and Policies
Labor Relations
2. TRADE UNIONISM
ART. 211
b. To promote free trade unionism as an
instrument
» For the enhancement of democracy and
» The promotion of social justice and
development;
c. To foster the free and voluntary organization
of
» a strong and united labor movement;
3. WORKER ENLIGHTENMENT
ART. 211 (d)
To promote the enlightenment of workers
 concerning their rights and obligations
 As union members and
 As employees;
ART 277
Miscellaneous provisions. — (a) All unions are
authorized to collect reasonable membership fees,
union dues, assessments and fines and other
contributions for labor education and research,
mutual death and hospitalization benefits, welfare
fund, strike fund and credit and cooperative
undertakings. (As amended by RA 6715)
Victoria V. Inciong (1988)
This is a matter of responsibility and of
answerability. Petitioner as a union leader, must
see to it that the policies and activities of the union
in the conduct of labor relations are within the
precepts of law and any deviation from the legal
boundaries shall be imputable to the leader. He
bears the responsibility of guiding the union along
the path of law and to cause the union to demand
what is not legally demandable, would foment
anarchy which is a prelude to chaos.
Petitioner should have known and it was his
duty to impart this imputed knowledge to the
members of the union that ernployees and
laborers in non-profit organizations are not
covered by the provisions of the Industrial Peace
Act and the Court of Industrial Relations [in the
case at bar, the CFI] has no jurisdiction to
entertain petitions of labor unions or organizations
of said non-profit organizations for certification as
the exclusive bargaining representatives of said
employees and laborers.
As a strike is an economic weapon at war with
the policy of the Constitution and the law at that
time, a resort thereto by laborers shall be deemed
to be a choice of remedy peculiarly their own, and
outside of the statute, and as such, the strikers
must accept all the risks attendant upon their
choice. If they succeed and the employer
succumbs, the law will not stand in their way in
the enjoyment of the lawful fruits of their victory.
But if they fail, they cannot thereafter invoke the
protection of the law for the consequences of their
conduct unless the right they wished vindicated is
one which the law will, by all means, protect and
enforce.
DO No. 40-03
RULE XX
LABOR EDUCATION AND RESEARCH
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Section 1. Labor education of workers and
employees. - The Department shall develop,
promote and implement appropriate labor
education and research programs on the rights and
responsibilities of workers and employers. It shall
be the duty of every legitimate labor organization
to implement a labor education program for its
members on their rights and obligations as
unionists and as employees.
Section 2. Mandatory conduct of seminars. -
Subject to the provisions of Article 241, it shall be
mandatory for every legitimate labor organization
to conduct seminars and similar activities on
existing labor laws, collective agreements,
company rules and regulations and other relevant
matters. The union seminars and similar activities
may be conducted independently of or in
cooperation with the Department and other labor
education institutions.
Section 3. Special fund for labor education
and research. - Every legitimate labor
organization shall, for the above purpose, maintain
a special fund for labor education and research.
Existing strike funds may, in whole or in part, be
transformed into labor education and research
funds. The labor organization may also periodically
assess and collect reasonable amounts from its
members for such funds.
4. MACHINERY DISPUTE SETTLEMENT
Art. 211e
“To provide an adequate administrative machinery
for the expeditious settlement of labor or industrial
disputes;”
St. Martin Funeral Homes V. NLRC (1998)
The Court is, therefore, of the considered
opinion that ever since appeals from the NLRC to
the Supreme Court were eliminated, the legislative
intendment was that the special civil action of
certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC. The use of
the word "appeal" in relation thereto and in the
instances we have noted could have been a lapsus
plumae because appeals by certiorari and the
original action for certiorari are both modes of
judicial review addressed to the appellate courts.
The important distinction between them, however,
and with which the Court is particularly concerned
here is that the special civil action of certiorari is
within the concurrent original jurisdiction of this
Court and the Court of Appeals; 23 whereas to
indulge in the assumption that appeals by
certiorari to the Supreme Court are allowed would
not subserve, but would subvert, the intention of
Congress as expressed in the sponsorship speech
on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor
therein that some quarters were of the opinion that
recourse from the NLRC to the Court of Appeals as
an initial step in the process of judicial review
would be circuitous and would prolong the
proceedings. On the contrary, as he commendably
and realistically emphasized, that procedure would
be advantageous to the aggrieved party on this
reasoning:
Part I : Definitions and Policies
Labor Relations
On the other hand, Mr. President, to allow
these cases to be appealed to the Court of Appeals
would give litigants the advantage to have all the
evidence on record be reexamined and reweighed
after which the findings of facts and conclusions of
said bodies are correspondingly affirmed, modified
or reversed.
Under such guarantee, the Supreme Court can
then apply strictly the axiom that factual findings
of the Court of Appeals are final and may not be
reversed on appeal to the Supreme Court. A
perusal of the records will reveal appeals which are
factual in nature and may, therefore, be dismissed
outright by minute resolutions. 24
Therefore, all references in the amended
Section 9 of B.P. No. 129 to supposed appeals
from the NLRC to the Supreme Court are
interpreted and hereby declared to mean and refer
to petitions for certiorari under Rule 65.
Consequently, all such petitions should henceforth
be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief
desired.
5. INDUSTRIAL PEACE
Art. 211 (f)
“To ensure a stable but dynamic and just industrial
peace;”
Art 273
STUDY OF LABOR MANAGEMENT RELATIONS.—
The Secretary of Labor shall have the power and it
shall be his duty to inquire into:
a. The existing relations between employers
and employees in the Philippines;
b. The growth of associations of employees
and the effect of such associations upon
employer-employee relations;
c. The extent and results of the methods of
collective bargaining in the determination
of terms and conditions of employment;
d. The methods which have been tried by
employers and associations of employees
for maintaining mutually satisfactorily
relations;
e. Desirable industrial practices which have
been developed through collective
bargaining for settling differences;
f. The possibilities for the adoption of
practical and effective methods of labor-
management cooperation;
g. The possibilities for the adoption of
practical and effective methods of labor-
management cooperation;
h. Any other aspects of employer-employee
relations concerning the promotion of
harmony and understanding between the
parties; and
i. The relevance of labor laws and labor
relations to national development.
The Secretary of Labor shall also inquire into
the causes of industrial unrest and take all the
necessary steps within his power as may be
prescribed by law to alleviate the same, and shall
from time to time recommend the enactment of
such remedial legislation as in his judgment may
be desirable for the maintenance and promotion of
industrial peace.
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6. WORKERS PARTICIPATION IN DECISION
MAKING
Art. 211 (g)
“To ensure the participation of workers in decision
and policy-making processes affecting their rights,
duties, and welfare.
Art. 277 (g)
“The ministry shall help promote and gradually
develop, with the agreement of labor organizations
and employers, labor-management cooperation
programs at appropriate levels of the enterprise
based on shared responsibility and mutual respect
in order to ensure industrial peace and
improvement in productivity, working conditions,
and the quality of working life.”
DO No. 40-03
RULE XXI
LABOR-MANAGEMENT AND OTHER COUNCILS
Section 1. Creation of labor-management and
other councils. - The Department shall promote
the formation of labor-management councils in
organized and unorganized establishments to
enable the workers to participate in policy and
decision-making processes in the establishment,
insofar as said processes will directly affect their
rights, benefits and welfare, except those which
are covered by collective bargaining agreements or
are traditional areas of bargaining.
The Department shall promote other labor-
management cooperation schemes and, upon its
own initiative or upon the request of both parties,
may assist in the formulation and development of
programs and projects on productivity,
occupational safety and health, improvement of
quality of work life, product quality improvement,
and other similar scheme.
In line with the foregoing, the Department
shall render, among others, the following services:
a. Conduct awareness campaigns;
b. Assist the parties in setting up labor-
management structures, functions and
procedures;
c. Provide process facilitators upon request of
the parties; and
d. Monitor the activities of labor-management
structures as may be necessary and
conduct studies on best practices aimed at
promoting harmonious labor-management
relations.
Section 2. Selection of representatives. - In
organized establishments, the workers'
representatives to the council shall be nominated
by the exclusive bargaining representative. In
establishments where no legitimate labor
organization exists, the workers representative
shall be elected directly by the employees at large.
PAL V. NLRC (1993)
Verily, a line must be drawn between
management prerogatives regarding business
operations per se and those which affect the rights
of the employees. In treating the latter,
management should see to it that its employees
are at least properly informed of its decisions or
modes of action. PAL asserts that all its
Part I : Definitions and Policies
Labor Relations
employees have been furnished copies of the Code
(Company Personnel Policies), Public respondents
found to the contrary, which finding, to say the
least is entitled to great respect.
Indeed, industrial peace cannot be achieved if
the employees are denied their just participation in
the discussion of matters affecting their rights.
Thus, even before Article 211 was amended by RA.
6715, it was already declared a policy of the State
to promote the enlightenment of workers
concerning their rights and obligations . . . as
employees. This was, of course, amplified by RA
6715 when it decreed the "participation of workers
in decision and policy making processes affecting
their rights, duties and welfare."
PAL's position that it cannot be saddled with
the "obligation" of sharing management
prerogatives as during the formulation of the
Code, RA 6715 had not yet been enacted, cannot
thus be sustained. While such "obligation" was not
yet founded in law when the Code was formulated,
the attainment of a harmonious labor-
management relationship and the then already
existing state policy of enlightening workers
concerning their rights as employees demand no
less than the observance of transparency in
managerial moves affecting employees' rights.
Manila Electric Co. V. Quisumbing (2000)
A line must be drawn between management
prerogatives regarding business operations per se
and those which affect the rights of employees,
and in treating the latter, the employer should see
to it that its employees are at least properly
informed of its decision or modes of action in order
to attain a harmonious labor-management
relationship and enlighten the workers concerning
their rights.
Contracting out of services is an exercise of
business judgment or management prerogative.
Absent proof that management acted in a
malicious or arbitrary manner, the Court will not
interfere with the exercise of judgment by an
employer.
7. WAGE FIXING
Art. 211B
“To encourage a truly democratic method of
regulating the relations between the employers
and employees by means of agreements freely
entered into through collective bargaining,
No court or administrative agency or official
shall have the power to set or fix wages, rates of
pay, hours of work or other terms and conditions
of employment, except as otherwise provided by
this Code.”
Example of “otherwise provided by this Code”:
i) Strikes in industries indispensable to the
national interest—Compulsory Arbitration.
Art. 263g – this article refers to strikes in
industries indispensable to the national
interest and compulsory arbitration. This
provision allows the Secretary of Labor or
the President to interfere by assuming
jurisdiction or certifying the case to the
NLRC. (See Code)
ii) Fixing of minimum wage
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Sec. 2 Ra 6727
It is hereby declared the policy of the State to
rationalize the fixing of minimum wages and to
promote productivity-improvement and gain-
sharing measures to ensure a decent standard of
living for workers and their families: to guarantee
the rights of labor to its just share in the fruits of
production: to enhance employment generation in
the countryside through industry dispersal: and to
allow business and industry reasonable returns on
investments, expansion and growth.
The State shall promote collective bargaining
as the primary mode of settling wages and other
terms and conditions of employment; and
whenever necessary, the minimum wage rates
shall be adjusted in fair and equitable manner,
considering existing regional disparities in the cost
of living and their socio-economic factors and the
national economic and social development plans.
8. LABOR INJUNCTION
Art. 254
INJUNCTION PROHIBITED – “No temporary or
permanent injunction or restraining order in any
case involving or growing out of labor disputes
shall be issued by any court or other entity, except
as otherwise provided in Article 218 and 264 of
this Code.”
EXCEPTIONS:
 Art. 218 e – This article talks about the
substantial and procedural rights from issuing
an injunction. An injunction may be issued by
the NLRC, not against the strike
» BUT it may be issued against an illegal act
in a strike which may cause substantial
and irreparable damage to the property of
a person. (See Code)
 Art. 264 – This provision talks about the
prohibited activities in a strike, lock-out or
picket which may be enjoined by an
injunction. (See Code)
 RA8791. Section 22. Strikes and Lockouts. -
The banking industry is hereby declared as
indispensable to the national interest and,
» notwithstanding the provisions of any law
to the contrary, any strike or lockout
involving banks,
» if unsettled after seven (7) calendar days
shall be reported by the Bangko Sentral to
the secretary of Labor
▪ who may assume jurisdiction over the
dispute or decide it or
▪ certify the sane to the NLRC for
compulsory arbitration.
» However, the President of the Philippines
may at any time intervene and assume
jurisdiction over such labor dispute in
order to settle or terminate the same.
Rationale for prohibition:
Caltex Filipino Mgrs & Supervisors Assoc. v.
CIR (1972)
1) It is well known that the scheme in Republic
Act No. 875 for achieving industrial peace rests
essentially on a FREE AND PRIVATE AGREEMENT
between the employer and his employees as to the
terms and conditions under which the employer
is to give work and the employees are to furnish
labor, unhampered as far as possible by judicial
Part I : Definitions and Policies
Labor Relations
or administrative intervention. On this premise the
lawmaking body has virtually prohibited the
Part II :
issuance of injunctive relief involving or growing RIGHT TO SELF-ORGANIZATION
out of labor disputes.
2) The prohibition to issue labor injunctions is
designed to give labor a comparable bargaining 2.01 BASIS OF RIGHT
power with capital and must be liberally construed
to that end.
The right to self-organization is granted to the
employee by both the Constitution and by the
9. TRIPARTISM
Labor Code. Thus, it is both constitutionally
guaranteed as well as statutorily guaranteed.
Art. 275 a, b
Being a primordial Constitutional Right, it prevails
Tripartism in labor relations is hereby declared
most of the time over the right to property of the
a state policy. Towards this end, workers and
employer.
employees shall, as far as practicable, be
represented in decision and policy-making bodies
1. THE CONSTITUTION 1987 CONSTITUTION
of the government.
Art. III Sec. 8
 The RIGHT of the people including the PUBLIC
and PRIVATE sectors,
 To FORM UNIONS, ASSOCIATIONS, OR
SOCIETIES
» For purposes NOT contrary to LAW2
 Shall NOT be abridged.

IMPLICATION of the phrase “for purposes not

contrary to law”: The right is subject to legislative
discretion, and may thus be regulated.

1935 Constitution Art. III sec. 6

The right to form associations or societies for
purposes not contrary to law shall not be abridged.

1973 Constitution Art. IV Sec. 7

The right to form associations for purposes not
contrary to law shall not be abridged.

Notice that the word “union” is already included

under the 1987 Constitution. The scope of the right
has also been recognized to include everyone from
the private and public sector.

Art. XIII Sec. 3 (Labor)

The STATE shall guarantee the RIGHTS OF ALL
WORKERS to Self-organization…

2. STATUTORY- LABOR CODE

Art. 243
Coverage and Employees Right to Self-
Organization –
ALL persons employed in:
 Commercial, industrial and agricultural
enterprises and In religious, charitable,
medical, or educational institution 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.

2
Take note: this freedom is subject to legislative
discretion.

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Part II : Right to Self -Organization
Labor Relations
Art. 243 is a grant of general right. It is divided
into two groups.
1st group: ALL persons employed in: commercial,
industrial and agricultural enterprises and in
religious, charitable, medical, or educational
institution whether operating for profit or not;
granted the right to self-organize for the purpose
of collective bargaining.
2nd group: Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and
those without any definite employers . The second
group is granted the right to form labor
organizations for their MUTUAL AID and
PROTECTION.
Nat’l Union of Bank Employees v. Minister of
Labor (1981)
A healthy respect for the freedom of
association demands that acts imputable to
officers or members be not easily visited with
capital punishments against the association itself.
3. ILO CONVENTION NO.48
Standard Chartered Bank Employees Union
(Nube) V. Confesor (2004)
Under the International Labor Organization
Convention (ILO) No. 87 FREEDOM OF
ASSOCIATION AND PROTECTION OF THE RIGHT
TO ORGANIZE to which the Philippines is a
signatory, “workers and employers, without
distinction whatsoever, shall have the right to
establish and, subject only to the rules of the
organization concerned, to job organizations of
their own choosing without previous
authorization.” Workers’ and employers’
organizations shall have the right to draw up their
constitutions and rules, to elect their
representatives in full freedom to organize their
administration and activities and to formulate their
programs. Article 2 of ILO Convention No. 98
pertaining to the Right to Organize and Collective
Bargaining, provides:
Article 2
1. Workers’ and employers’ organizations
shall enjoy adequate protection against
any acts or interference by each other or
each other’s agents or members in their
establishment, functioning or
administration.
2. In particular, acts which are designed to
promote the establishment of workers’
organizations under the domination of
employers or employers’ organizations or
to support workers’ organizations by
financial or other means, with the object
of placing such organizations under the
control of employers or employers’
organizations within the meaning of this
Article.
The aforcited ILO Conventions are
incorporated in our Labor Code, particularly in
Article 243 thereof, which provides:
ART. 243. COVERAGE AND EMPLOYEES’
RIGHT TO SELF-ORGANIZATION. – All
persons employed in commercial,
industrial and agricultural enterprises and
in religious, charitable, medical or
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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.
and Articles 248 and 249 respecting ULP of
employers and labor organizations.
The said ILO Conventions were ratified on
December 29, 1953. However, even as early as the
1935 Constitution, the State had already expressly
bestowed protection to labor as part of the general
provisions. The 1973 Constitution, on the other
hand, declared it as a policy of the state to afford
protection to labor, specifying that the workers’
rights to self-organization, collective bargaining,
security of tenure, and just and humane conditions
of work would be assured. For its part, the 1987
Constitution, aside from making it a policy to
“protect the rights of workers and promote their
welfare,” devotes an entire section, emphasizing
its mandate to afford protection to labor, and
highlights “the principle of shared responsibility”
between workers and employers to promote
industrial peace.
2.02 EXTENT AND SCOPE OF RIGHT
ART. 246
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
choosing3 and
 To engage in lawful concerted activities
» For the same purpose or for their mutual
aid and protection,
» Subject to the provisions of Art 264 of
this Code.
EXAMPLES OF APPLICATION/ EXERCISE OF THE
RIGHT TO SELF-ORGANIZATION:
The right of Self-Organization includes the right
not to exercise it.
 BAR QUESTION (2000): Do workers have
a right not to join a labor organization?
 MIDTERMS/ FINALS QUESTION: Is there a
negative right of self-organization? - Yes
Reyes v. Trajano (92)
Logically, the right NOT to join, affiliate with,
or assist any union, and to disaffiliate or resign
from a labor organization, is subsumed in the right
3
Take note: the italicized phrase is the policy behind
certification of election
Part II : Right to Self -Organization
Labor Relations
to join, affiliate with, or assist any union, and to
maintain membership therein.
The right to form or join a labor organization
necessarily includes the right to refuse or refrain
from exercising said right.
It is self-evident that just as no one should be
denied the exercise of a right granted by law, so
also, no one should be compelled to exercise such
a conferred right. The fact that a person has opted
to acquire membership in a labor union does not
preclude his subsequently opting to renounce such
membership.
A right comprehends at least two broad notions,
namely:
1. First, liberty or freedom, i.e., the absence of
legal restraint, whereby an employee may
act for himself without being prevented by
law;
2. Second, power, whereby 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
The exercise of the right to self-organization
includes the right to withdraw from the
organization.
Central Negros Electric Cooperative vs Sec of
Labor (1991)
In addition, membership in the cooperative is
on a voluntary basis. Hence, withdrawal therefrom
cannot be restricted unnecessarily. The right to
join an organization necessarily includes the
equivalent right not to join the same.
The right of the employees to self-organization is a
compelling reason why their withdrawal from the
cooperative must be allowed. As pointed out by
CURE, the resignation of the member-employees is
an expression of their preference for union
membership over that of membership in the
cooperative.
The right of self-organization includes the right to
raise issues in behalf of the organization.
Union of Supervisors v. Sec. Of Labor (1991)
Moreover, Luna's remarks at the meeting of an
official board are privileged in nature as a valid
exercise of his constitutional freedom of
expression.
He addressed his remarks to the body that has
jurisdiction over the question of management of
the assets of the Provident Fund.
Luna's remarks were intended to protect the
interests of the members of the Provident Fund
from what he honestly believed was a risky
venture on the part of management.
His protests could even be treated as union
activity by the Industrial Peace Act, which assures
the employees' right "to self-organization and to
form, join or assist labor organizations of their own
choosing and to engage in concerted activities for
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the purpose of collective bargaining and other
mutual aid and protection . . ."
This is so because Luna's membership in the PF
Board of Trustees was by virtue of his being
president of the RB Union of Supervisors.
The Provident Fund was itself created as a result of
the union's collective bargaining agreement with
the bank.
His actuations as such should therefore be
considered as legitimate exercise of the employees'
right to self-organization and as an activity for
their mutual aid and protection, aside from being
privileged communication protected by the
constitutional guarantee on free speech. His
remarks were in defense of the interest of the
Provident Fund, part of which comes from the
contribution of the rank and file employees.
The Certification Election is an example of the
exercise of the right to self-organization.
2.03 WORKERS WITH RIGHT OF SELF-
ORGANIZATION
Constitution, Art. 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.
1. ALL EMPLOYEES, GENERALLY
Art. 243
Coverage and Employees Right to Self-
Organization –
All persons
Employed in
 Commercial, industrial and agricultural
enterprises and
 In religious, charitable, medical, or
educational institution
 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.
Take note:
Ambulant -> Moving about, “palipat-lipat”
Intermittent -> Temporary
Itinerant -> Travels from place to place
FEU-Dr. Nicanor Reyes Medical Foundation,
Inc. v FEU-DNRMF Alliance of Fil Workers
(1987)
Under the Art. 244 LC, there is no doubt that
rank and file employees of non-profit medical
institutions are now permitted to form, organize or
join labor unions of their choice for purposes of
collective bargaining.
MEMBERS OF RELIGIOUS GROUPS
Kapatiran sa Meat and Canning Division v
Calleja (1988)
Part II : Right to Self -Organization
Labor Relations
HELD: In Victoriano v Elizalde Rope Workers
Union, the refusal of the members of the INC sect
not to join a labor union for being contrary to their
religious beliefs does not bar the members of the
sect from forming their own union.
The recognition of the tenets of the sect should not
infringe on the basic right of self-organization
granted by the Constitution to workers, regardless
of religious affiliation.
2. GOVERNMENT CORPORATION EMPLOYEES
Art 244
Right of Employees in the Public Service
 Employees of government corporations
ESTABLISHED UNDER THE CORPORATION
CODE
» shall have the right to organize and to
bargain collectively with their respective
employers.
 All other employees in the civil service shall
have the right to form associations for
purposes not contrary to law.
 The labor code is silent as to the right to
strike of employees of GOCC’s established
under the corporation code. But it expressly
grants the right to collectively bargain and to
organize.
 The labor code is silent as to right to strike
and bargain collectively of employees in the
civil service. Anyway, the civil service
employees are not under the coverage of the
Labor Code.
3. SUPERVISORS
Art 245
Ineligibility of managerial employees to join any
labor organization; right of supervisory employees
– SUPREME but merely ADVISORY in character.
Managerial employees are not eligible to join,
assist or form any labor organization.
Take note: “labor organization” is a term that is
strictly defined – it should be for the purpose of
collective bargaining concerning terms and
conditions or dealing with employment concerning
terms and condition of employment. Take note the
law did not say that they cannot form an
association, what the law said is that they cannot
form a “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.
Art 212 m
“Managerial employee” is one who is vested with
powers or prerogatives:
 To lay down and execute management policies
and/ or
 To hire , transfer, suspend, layoff, recall,
discharge, assign, or discipline employees.
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Supervisory employees are those who, in the
interest of the employer,
 Effectively RECOMMENDS such managerial
actions
 If the exercise of such authority is not merely
routinary or clerical in nature
 But requires the use of INDEPENDENT
JUDGMENT.
All employees not falling within any of the above
definitions are considered rank and file employees
for purposes of this book (Book 5: Labor
Relations).
Paper Industries Corp v. Laguesma (2000)
HELD: United Pepsi cola ruling was adopted
here: “Managerial employees are ranked as Top
managers, Middle managers and First Line
Managers. Top and Middle Managers have the
authority to devise, implement and control
strategic and operational policies while the task of
First-Line Managers is simply to ensure that such
policies are carried out by the rank-and-file
employees of an organization.
Under this distinction, “managerial employees”
therefore fall in two (2) categories, namely,
1. The “managers” per se composed of Top
and Middle Managers, and the
2. “supervisors” composed of First-Line
Managers.
Thus, the mere fact that an employee is
designated “manager” does not ipso facto make
him one. Designation should be reconciled with the
actual job description of the employee.
“In this case, a thorough dissection of the job
description of the concerned supervisory
employees and section heads indisputably show
that they are NOT actually managerial employees
BUT ONLY supervisory employees SINCE THEY DO
NOT LAY DOWN COMPANY POLICIES.”
“PICOP’s contention that the subject section
heads and managers exercise the authority to hire
and fire is ambiguous and quiet misleading for the
reason that any authority they exercise is NOT
Theirs is not a FINAL DETERMINATION of the
company policies inasmuch as any action taken by
them on matters relative to hiring, promotion,
transfer, suspension and termination of employees
is still subject to confirmation and approval by
their respective superior.”
“Thus, where such power, which is in effect
RECOMMENDATORY in character, is SUBJECT TO
EVALUATION, REVIEW, and FINAL ACTION by
department heads and other higher executives of
the company. The same, although present, is not
effective and not an exercise of INDEPENDENT
JUDGMENT as required by law.”
Samson v. NLRC (2000)
Given the environmental circumstances of this
case, the acts of petitioner clearly do not constitute
serious misconduct as to justify dismissal. Neither
is his dismissal justified o the ground of loss of
confidence. As a ground for dismissal, the term
“trust and confidence” is restricted to managerial
employees. Petitioner is not a managerial
employee.”
“It is the nature of the employee’s function and
not the nomenclature or title given to his job,
which determines whether he has rank-and-file,
Part II : Right to Self -Organization
Labor Relations
supervisory or managerial status. Petitioner’s
describes of his functions as District Sales
Manager does not mention that petitioner
possesses the power “to lay down policies nor to
hire, transfer, suspend, lay-off, recall, discharge.
Etc.” Absent this crucial element, petitioner cannot
be considered a managerial employee despite his
designation as District Sales Manager.
CRUCIAL ELEMENT for one to be a managerial
employee: “To lay down policies or to hire,
transfer, suspend, lay-off, recall, discharge. Etc.”
Fil-oil Refinery Corporation v. Fil-oil
Supervisory & Confidential Employees
Associaton (1972)
ISSUE: WON supervisors form part of
management and are not considered as employees
entitled to bargain collectively?
Indeed, it is well settled that ‘IN RELATION TO
HIS EMPLOYER,' a foreman or supervisor 'is an
employee within the meaning of the Act' . . . For
this reason, supervisors are entitled to engage in
union activities and any discrimination against
them by reason thereof constitutes an unfair labor
practice."
Supervisory Employees are managerial
employees for the sake of Labor Standards, but
they are a distinct breed from managerial
employees in relation to Labor Relations.
National Sugar Refineries Corp v NLRC (1993)
It is the submission of petitioner that while the
members of respondent union, as supervisors,
may not be occupying managerial positions, they
are clearly officers or members of the managerial
staff because they meet all the conditions
prescribed by law and, hence, they are not entitled
to overtime, rest day and supervisory employees.
Article 212 (m) should be made to apply only to
the provisions on Labor Relations, while the right
of said employees to the questioned benefits
should be considered in the light of the meaning of
a managerial employee and of the officers or
members of the managerial staff, as contemplated
under Article 82 of the Code and Section 2, Rule I
Book III of the implementing rules.
 In other words, for purposes of forming and
joining unions, certification elections,
collective bargaining, and so forth, the union
members are supervisory employees.
 In terms of working conditions and rest
periods and entitlement to the questioned
benefits, however, they are officers or
members of the managerial staff, hence they
are not entitled thereto.
Dunlop vs. Secretary of Labor (1998)
Supervisors can be an appropriate bargaining
unit. The critical issue, however, is whether or not
the respondent union can file a petition for
certification election to represent the supervisory
employees of the petitioner company. The
resolution of this issue depends on whether the
respondent union is composed solely of
supervisory employees or of both supervisory and
rank-and-file employees.
Article 245 of the Labor Code clearly provides
that "supervisory employees shall not be eligible
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for membership in a labor organization of the rank-
and-file employees . . . ."
The TEST of supervisory status as we have
repeatedly ruled is:
 Whether an employee possesses authority to
act in the interest of his employer,
 Which authority should not be merely routinary
or clerical in nature

But requires the use of independent judgment.

Corollary, what determines the nature of
employment is not the employee's title, but his
job description.
It is not decisive that these employees are
monthly paid employees. Their mode of
compensation is usually a matter of convenience
and does not necessarily determine the nature and
character of their job.
Public respondent gravely misappreciates the
basic antipathy between the interest of supervisors
and the interest of rank-and-file employees. Due to
the irreconcilability of their interests, a labor
organization composed of both rank-and-file and
supervisory employees is no labor organization at
all.
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.
 Why can’t supervisors join a union of rank-
and-file?
» The intent of the law is to avoid a
situation where supervisors would merge
with the rank and file, or where the
supervisors' labor organization would
represent conflicting interests, especially
where, as in the case at bar, the
supervisors will be commingling with
those employees whom they directly
supervise in their own bargaining unit.
Members of the supervisory union might
refuse to carry out disciplinary measures
against their co-member rank and file
employees.
» Supervisors have the right to form their
own union or labor organization. What the
law prohibits is a union whose
membership comprises of supervisors
merging with the rank and file employees
because this is where conflict of interests
may arise in the areas of discipline,
collective bargaining and strikes.
United Pepsi Cola v. Laguesma (1998)
Is Art, 245 Constitutional?
When read in relation to this definition in Art.
212(m), it will be seen that Art. 245 faithfully
carries out the intent of the Constitutional
Commission in framing Art. III, §8 of the
fundamental law. Nor is the guarantee of
organizational right in Art. III, §8 infringed by a
Part II : Right to Self -Organization
Labor Relations
ban against managerial employees forming a
union. The right guaranteed in Art. III, §8 is
subject to the condition that its exercise should be
for purposes "not contrary to law."
In the case of Art. 245, there is a rational basis for
prohibiting managerial employees from forming or
joining labor organizations. As Justice Davide, Jr.,
himself a constitutional commissioner, said " 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."
NOTE: Art. 245 prohibit managerial employees to
organize for purpose of collective bargaining. BUT
it does not prevent them for organizing for other
purpose such as for mutual aid and protection.
The basis of this is the fiduciary and confidential
relationship between manager and employer.
4. ALIENS
Art 269
Prohibition Against Aliens; exceptions –
 All aliens, natural or juridical, as well as
foreign organizations are strictly PROHIBITED
from engaging directly or indirectly in all
forms of trade union activities
 Without prejudice to normal contacts
between Philippine labor unions and
recognized international labor centers;
» Provided, however, that aliens working in
the country with VALID PERMITS issued
the DOLE may exercise the right to self-
organization and join or assist labor
organizations of their own choosing for
purposes of collective bargaining ;
» Provided, further, That said aliens are
nationals of a country which grants the
same or similar rights to Filipino workers.
Note: Aliens, generally, have no right to self
organize for purpose of collective bargaining unless
(the following must concur):
a. They have valid permits
b. Reciprocity: That said aliens are nationals
of a country which grants the same or
similar rights to Filipino workers
5. SECURITY GUARDS
Manila Electric vs. Secretary of Labor (1991)
EO 111 has eliminated the disqualification of
security guards from forming labor unions. They
may now join a rank and file organization. The
disqualification in article 245 with regards to
supervisory employees does not include security
guards. The implementing rules which disqualify
security guards from joining rank and file
organization are null and void for being not
germane to the object and purposes of EO 111.
2.04 WORKERS WITHOUT RIGHT OF
SELF-ORGANIZATION FOR PURPOSE OF
COLECTIVE BARGAINING OR DEALING
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WITH EMPLOYERS REGARDING TERMS
AND CONDITIONS OF EMPLOYMENT
1. MANAGERIAL AND CONFIDENTIAL
EMPLOYEES
Managerial employees are NOT eligible to join,
assist or form any labor organization.
Note: The manager’s right to self-organize is NOT
removed, but only limited. It cannot be a labor
organization which has a technical meaning of its
own, being composed of employees (which
excludes managers, as managers are considered
employers under labor relations) and for the
purpose of collective bargaining. At the pain of
being repetitive, it should be emphasized that the
Managerial Employees may for any organization in
accordance with law; however they are expressly
prohibited from forming a “labor organization”.
Is Art. 245 a violation of the right to self-
organization of managerial employees?
No, they are not deprived of the right to
organize. Just like any right, the right to SO is not
an absolute right. It is subject to the police power
of the State, as well as to certain limitations. And
in any case, the mangers are not deprived of the
right to organize and form associations for their
mutual aid and protection, as long as such is not a
“labor organization”, as defined by law.
Remember that the right to join, form,
assist organization and associations should be
exercised for purposes not contrary to law. Such
right is subject to legislative discretion as to the
imposition of a limitation.
Art. 245 LC 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.
Take note: As stated in National Sugar Refineries
Corp v NLRC, The definition of a managerial
employee in Labor relations (Art. 212) is NOT
exactly the same as the definition under labor
standards (Art. 82). Art. 82 is much broader in
scope, while Art. 212 is much narrower in scope
and much more strictly construed.
Sugbuanon Rural Bank vs. Laguesma (2000)
In Tabacalera, we sustained the classification
of a credit and collection supervisor by
management as a managerial/supervisory
personnel. But in that case, the credit and
collection supervisor "had the power to recommend
the hiring and appointment of his subordinates, as
well as the power to recommend any promotion
and/or increase." For this reason he was deemed
to be a managerial employee.
In the present case, however, petitioner failed
to show that the employees in question were
vested with similar powers. At best they only
had recommendatory powers subject to
Part II : Right to Self -Organization
Labor Relations
evaluation, review, and final decision by the bank's
management.
The job description forms submitted by
petitioner clearly show that the union members in
question may not transfer, suspend, lay-off, recall,
discharge, assign, or discipline employees.
Moreover, the forms also do not show that the
Cashiers, Accountants, and Acting Chiefs of the
Loans Department formulate and execute
management policies which are normally expected
of management officers.
Now may the said bank personnel be deemed
confidential employees?
Confidential employees are those who
a. Assist or act in a confidential capacity, in
regard
b. To persons who formulate, determine, and
effectuate management policies [specifically
in the field of labor relations].
The two 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 superior officer; and that officer must handle
the prescribed responsibilities relating to labor
relations.
Art. 245 of the Labor Code does not directly
prohibit confidential employees from engaging in
union activities. However, under the doctrine of
necessary implication, the disqualification of
managerial employees equally applies to
confidential employees. The confidential-employee
rule justifies exclusion of confidential employees
because in the normal course of their duties they
become aware of management policies relating to
labor relations.
SMC Supervisors & Exempt Employees Union
v. Laguesma (1997)
“Criteria to determine who are Confidential
Employees:--
1. Assist or act in a confidential capacity, (this
means that the confidential nature of his job is
not only incidental)
2. To persons who formulate, determine, and
effectuate management policies in the field of
labor relations.
The two criteria are cumulative, and both
must be met if an employee is to be considered a
confidential employee.
RATIONALE: “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.” The broad rationale
behind this rule is that employees should not be
placed in a position involving a potential conflict of
interests.
“Management should not be required to
handle labor matters through employees who are
represented by the union with which the company
is required to deliver and who in the performance
of their duties may obtain advance information of
the company’s position with regard to contract
negotiations, the disposition of grievances, or
other labor relations matter.”
“An important element of the “confidential
employee rule” is --- the employee’s need to use
labor relations information.
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Thus, in determining the confidentiality of
certain employees, a key question frequently
considered is the employee’s necessary access to
confidential labor relations information.”
“It is evident that whatever confidential data
the questioned employees may handle will have to
relate to their functions. From the foregoing
functions, it can be gleaned that the confidential
information said employees have access to
concern’s the employer’s internal business
operations.”
NOTE: “An employee may not be excluded
from appropriate bargaining unit merely
because he has access to confidential
information concerning employer’s internal
business operations and which is NOT RELATED
to the field of labor relations.”
If access is merely incidental, you cannot
classify them as confidential employees. Thus a
phone operator or driver cannot be classified as
a confidential employee for the purpose of
excluding them from joining a union.
It is the policy of the law to encourage self-
organization, thus the coverage of its
application and scope must necessarily be
broad. Thus if you have to limit it, the limitation
must strictly be construed and well justified.
PROHIBITION AND RATIONALE
Pier 8 Arrastre & Stevedoring Services Vs.
Roldan-Confesor (1995)
As to the Foremen:
Foremen are chief and often especially-trained
workmen who work with and commonly are in
charge of a group of employees in an industrial
plant or in construction work. They are the persons
designated by the employer-management to direct
the work of employees and to superintend and
oversee them.
They are representatives of the employer-
management with authority over particular groups
of workers, processes, operations, or sections of a
plant or an entire organization. In the modern
industrial plant, they are at once a link in the chain
of command and the bridge between the
management and labor.
In the performance their work, foremen
definitely use their independent judgment and are
empowered to make recommendations for
managerial action with respect to those employees
under their control. Foremen fall squarely under
the category of supervisory employees, and cannot
be part of rank-and-file unions.
As to legal secretaries:
Legal secretaries are neither managers nor
supervisors.
Their work is basically routinary and clerical.
However, they should be differentiated from
rank-and-file employees because they, are tasked
with, among others, the typing of legal documents,
memoranda and correspondence, the keeping of
records and files, the giving of and receiving
notices and such other duties as required by the
legal personnel of the corporation.
Legal secretaries therefore fall under the
category of confidential employees.
The rationale: Because if these managerial
employees would belong to or be affiliated with
Part II : Right to Self -Organization
Labor Relations
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. This rationale
holds true also for confidential employees who
having access to confidential information, may
become the source of undue advantage. Said
employees may act as a spy or spies of either
party to a collective bargaining agreement. . .
As for the timekeepers and assitant timekeepers:
They are, neither managerial nor supervisory
employees.
They are merely tasked to report those who
commit infractions against company rules and
regulations.
This reportorial function is routinary and
clerical.
They do not determine the fate of those who
violate company policy rules and regulations
function.
It follows that they cannot be excluded from
the subject bargaining unit.
Metrolab Industries, Inc. v. Roldan-Confesor
(1996)
Employees involved in the controversy include
Executive Secretaries of the company’s officers.
Can they join the labor union? NO, they are
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. As such, the rationale behind the
ineligibility of managerial employees to form,
assist or join a labor union equally applies to
them.”
In the collective bargaining process,
managerial employees are supposed to be on the
side of the employer, to act as its representative,
and to see to it that its interest are well protected.
The employer is not assured of such protection if
these employees themselves are union members.
Collective bargaining in such a situation can
become one-sided.”
“Moreover, unionization of confidential
employees for the purpose of collective bargaining
would mean the extension of the law to persons or
individuals who are supposed to act ‘in the interest
of the employers.’ It is not far fetched that in the
course of collective bargaining, they might
jeopardize that interest which they are duty-bound
to protect.”
“Finally, confidential employees cannot be
classified as rank and file. As previously discussed,
the nature of employment is quite distinct from the
rank and file, thus warranting a separate category.
Therefore it is not discrimination to exclude them
from bargaining unit of rank and file.”
Pepsi-Cola Proucts Phil. Inc. v. Sec. of Labor
(1999)
The confidential employees involved in this
case are Credit & Collection Managers and
Accounting Managers.
2. COOPERATIVE MEMBERS
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Cooperative Rural Bank of Davao vs Ferrer-
Calleja (1988)
Under PD 175, a COOPERATIVE is an
organization composed of small producers and of
consumers who voluntarily join together to form
business enterprises which they themselves, own,
control and patronize. A cooperative is different
from an ordinary business concern. Its owners or
members are the ones who run and operate the
business while the others are its employees.
An employee of such a cooperative who is a
member AND CO-OWNER cannot invoke the
right to collective bargaining for certainly an
owner cannot bargain with himself or his co-
owners.
However, insofar as it involves cooperatives
with employees who are NOT members or co-
owners thereof, certainly such employees are
entitled to exercise the rights of all workers to
organization, collective bargaining negotiations,
and others as are enshrined in the Constitution and
existing laws of the country.
Benguet Electric Cooperative, Inc. v Calleja
(1989)
HELD: The employees of a cooperative may
not join or form a labor organization for purposes
of collective bargaining. As members of the
cooperative, they are co-owners. An owner cannot
bargain with himself or his co-owners. The fact the
members-employees 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 purposes of collective
bargaining. It is the fact of ownership of the
cooperative, not involvement in the management
thereof, which disqualifies a member from joining
any labor organization within the cooperative.
3. NON-EMPLOYEE
Rep. Planters Bank General Services
Employees Union v. Laguesma (1996)
HELD: If union members are not employees, no
right to organize for the purpose of bargaining
and to be certified as bargaining agent can be
recognized4. Since the persons involved are not
employees of the company, they are not entitled
to the constitutional right to join or form a labor
organization for purposes of collective bargaining.
2.05 PARTY PROTECTED
Mactan Workers Union vs Aboitiz (1972)
The labor union who won as sole bargaining
agent of the employees does not act for its
members alone. It represents all the employees in
such a bargaining unit. Furthermore, what is
entitled to protection is labor, not the labor
organization. The latter are merely
instrumentalities through which their welfare may
be promoted and fostered.
4
Even if not employees, they still have the right to
organize BUT not for the purpose of collective bargaining.
Since the right to organize is constitutionally protected.
Part II : Right to Self -Organization
Labor Relations
2.06 SANCTIONS FOR VIOLATION OF
RIGHT
Art. 246
Non-abridgment of the 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 purposes of
collective bargaining through representatives of
their own choosing and to engage in lawful
concerted activities for the same purpose or for
their mutual aid and protection, subject to the
provisions of Art. 265 of this Code.
Art. 248
Unfair labor practices of employers--It shall be
unlawful for an employer to commit any of the
following unfair labor practice:
a. To interfere with, restrain or coerce
employees in the exercise of their right to
self-organization;
b. To require as a condition of employment
that a person or an employee shall not join
a labor organization or shall withdraw from
one to which he belongs;5
c. To contract out services or functions being
performed by union members when such
will interfere with, restrain or coerce
employees in the exercise of their rights to
self-organization;
d. To initiate, dominate, assist or otherwise
interfere with the formation or
administration of any labor organization
including giving of financial or other
support to it or its organizers or
supporters;6
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.
Nothing in this Code or in any other law shall
stop the parties from requiring membership in a
recognized collective bargaining agent as a
condition for employment, except those
employees who are already members of
another union at the time of the signing of the
collective bargaining agreement.
Employees of an appropriate collective
bargaining unit who are not members of the
recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the
dues and other fees paid by members of the
recognized collective bargaining agent, if such
non-union members accept the benefits under
the collective agreement:
- Provided, that the individual
authorization required under Art. 242
paragraph (o) of this Code shall not apply
5
Yellow-dog contracting
6
Company unionism
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to the non-members of the recognized
collective bargaining agent;
f. To dismiss, discharge, or otherwise
prejudice or discriminate against an
employee for having given or being about
to give testimony under this Code;
g. To violate the duty to bargain collectively
as prescribed by this Code;
h. To pay negotiation or attorneys fees to the
union or its officers or agents as part of the
settlement of any issue in collective
bargaining or any other dispute; or
i. To violate a collective bargaining
agreement.
The provisions of the preceding paragraph
notwithstanding, only the officers and agents of
corporations, associations or partnerships who
have actually participated in, authorized or ratified
unfair labor practices shall be held criminally liable.
Art. 249
Unfair labor practices of labor organization--It shall
be unfair labor practice for a labor organization, its
officers, agents or representatives:
a. to restrain or coerce employees in the exercise
of their rights to self-organization. However, a
labor organization shall have the right to
prescribe its own rules with respect to the
acquisition or retention of membership;
b. to cause or attempt to cause and employer to
discriminate against an employee, including
- discrimination against an employee with
respect to whom membership in such
organization has been denied or
- to terminate an employee on any ground
other that the usual terms and conditions
under which membership or continuation of
membership is made available to other
members;
c. to violate the duty, or refuse to bargain
collectively with the employer, provided it is
the representative of the employees;
d. to cause or attempt to cause an employer to
pay or deliver or agree to pay or deliver any
money or other things of value, I the nature of
an exaction, for services which are not
performed or not to be performed, including
the demand for fee for union negotiations
e. to ask for or accept negotiations or attorneys
fees from employers as part of the settlement
of any issue in collective bargaining or any
other dispute; or
f. to violate a collective bargaining agreement.
The provisions of the preceding paragraph
notwithstanding, ONLY the officers, members of
governing boards representatives or agents or
members of labor organizations who have actually
participated in, authorized or ratified unfair labor
practices shall be held criminally liable.
Art. 288
Penalties—
Except as otherwise provided in this Code, or
unless the acts complained of hinges on a
Part II : Right to Self -Organization
Labor Relations
question of interpretation or implementation of
ambiguous provision of an existing collective
bargaining agreement,
 any violation of the provisions of this Code
declared to be unlawful or penal in nature
shall be punished with a fine of not less that
P1,000.00 nor more than P10,000.00, or
imprisonment of not less that three months
nor more than three years, or both such fine
and imprisonment at the discretion of the
court.
 In addition to such penalty, any alien found
guilty shall be summarily deported upon
completion of service of sentence.
Any provision of law to the contrary
notwithstanding any criminal offense punished in
this Code shall be under the current jurisdiction of
the Municipal or City Courts and the Courts of First
Instance.
Art. 289
Who are liable when committed by other than
natural person--If the offense is committed by a
corporation, trust, firm, partnership, association or
any other entity the penalty shall be imposed upon
the GUILTY officer or officers of such corporation,
trust, firm, partnership, association or entity.
Part III : LABOR ORGANIZATIONS
3.01 POLICY AND CONTEXT
Art 211
Declaration of policy—It is the policy of the State:
(b) To promote FREE Trade Unionism as an
instrument for
 The enhancement of DEMOCRACY and
 The promotion of SOCIAL JUSTICE and
development.
(c) To foster the FREE and VOLUNTARY
organization of a STRONG and UNITED labor
movement
 If labor unions are to serve and protect the
interest of the workers, then the unions
themselves must be sufficiently strong and
stable to be able to fulfill effectively their
assigned role in society. It is also
incontrovertible that in such a regime of
collective bargaining it is essential that the
negotiations be conducted between parties of
relatively equal strength.
3.02 LABOR ORGANIZATION

Art. 211
Declaration of policy---It is the policy of the State:
(g) To ensure the participation of workers in
decision and policy-making processes affecting
their rights, duties and welfare.

Art. 212 (g)

“LABOR ORGANIZATION” –Means 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.

LABOR ORGANIZATION V. WORKER’S

ORGANIZATION

LABOR WORKER’S
ORGANIZATION ORGANIZATION
Composition: Composition:
Employees Employees

Purpose: collective Purpose: organized for

bargaining or of dealing mutual aid and
with employers protection of its
concerning terms and members or for any
conditions of other legitimate
employment. purpose other than
collective bargaining

 “Labor Organization” is a technical definition; it

is composed of two parts:

1. COMPOSITION: EMPLOYEES

Art. 212 (f)

Employee includes any person in the employ of
an employer.

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Part III : Labor Organizations
Labor Relations
 The term shall not be limited to the employees
of a particular employer, unless this Code
explicitly states so.
 It shall include any individual whose work has
ceased as a result of or in connection with any
current labor dispute or because of any unfair
labor practice if he has not obtained any other
substantially equivalent and regular
employment.
2. PURPOSE
Collective bargaining or of dealing with employers
concerning terms and conditions of employment.
Airline Pilots Association of the Philippines v.
CIR
RA 875 defines labor organization as any
union or association which exists, in whole or in
part, for the purpose of collective bargaining.
There is no condition to the statutory concept of a
labor organization as being limited to the
employees.
Disini: Do not misinterpret the ruling in this case.
In the case at bar the said employees were
dismissed and were challenging their dismissal.
The right to self-organization is still limited to
employees.
MIXED MEMBERSHIP
Dunlop v. Sec. oF Labor (1998)
A labor Organization composed of both rank
and file and supervisory employees is no labor
organization at all. It cannot posses the rights of a
legitimate labor organization.
Art 212
(g) Labor organization means any union or
association of employees which exist in whole
or in part for the purpose of collective
bargaining or of dealing with employers
concerning terms and conditions of
employment.
(h) Legitimate labor union means any labor
organization duly registered with the Dept. Of
Labor and Employment and includes any
branch or local thereof
Disini: A “branch or local” of a Legitimate Labor
organization DOES NOT become a legitimate labor
organization simply by affiliating itself. The rules
require certain requirements to avoid fraud.
(i) Company Union means any labor organization
whose formation function or administration
has been assisted by any act defined as unfair
labor practice by this code.
Disini: A company union is not really a “union”
contemplated by law since it violates the provisions
of Article 248.
DOLE REGISTRATION AS BASIS
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Cebu Seamen’s Assoc., Inc v Ferrer-Calleja
(1992)
The union’s registration with the bureau and
not the SEC makes it a legitimate labor
organization, with the rights and privileges granted
by the Labor Code including the release or custody
of union dues.
Progressive Dev’t v Sec. of Labor (1992)
Art 212 defines a legitimate labor organization
as any labor organization duly registered with the
DOLE and includes any branch or local thereof.
Ordinarily, a labor organization acquires legitimacy
ONLY upon registration with the BLR. The
requirements for registration are in Article 234.
a. “The applicant labor organization shall
acquire legal personality and shall be
entitled to the rights and privileges granted
by law to a legitimate labor organization
UPON issuance of the certificate of
registration based on the requirements in
Article 234.”
i. P50 registration fee
ii. The names of its officers their addresses,
the principal address of the labor org, the
minutes of the organizational meetings
and the list of the workers who
participated in such meetings
iii. The names of all its members comprising
at least 20% of all the Ees of the
bargaining unit it seeks to operate
iv. If the applicant union has been in
existence for 1 or more years, copies of
its annual financial reports; and
v. 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 participating in it.
b. Moreover, section 4 of Rule II, Book V of the
Implementing Rules requires:
i. that the application should be signed by
at least twenty percent (20%) of the
employees in the appropriate bargaining
unit and
ii. be accompanied by a sworn statement of
the applicant union that there is no
certified bargaining agent or, where there
is an existing collective agreement duly
submitted to the DOLE, that the
application is filed during the last sixty
(60) days of the agreement.
 RATIONALE: What is the purpose of the
Law for requiring so many requirements?
Registration is required to protect both labor
and the public against abuses, fraud, or
impostors who pose as organizers, although
not truly accredited agents of the union they
purport to represent.
 Are these registration requirements a
curtailment of the freedom to associate?
NO. These requirements are not restrictions
on the freedom of assembly and of
association. Rather they are merely
conditions sine qua non for the acquisition of
legal personality by a labor org and the
possession of rights and privileges granted by
law to a legit LO.
The Constitution does not guarantee these
rights and privileges much less personality,
which are mere statutory creations—for the
Part III : Labor Organizations
Labor Relations
possession and exercise of which, registration
is required. Such requirement is valid
exercise of police power because the
activities in which Los are engaged in affect
public interest which should be protected.
BUT when an UNREGISTERED union becomes
a branch, local or chapter of a federation,
some of the aforementioned requirements for
registration are no longer required. The
provisions governing UNION AFFILIATION are
found in Rule II, Section 3, Book V. Relevant
portions are as follows: (Take note this part of
the case is no longer seen in the amendments
in the rules by DO. No. 9 which was
promulgated on 1997, this case was decied on
1992)
TAKE NOTE:
Two types of union may become affiliated with a
federation or a national union:
1) A local or chapter of a federation WHICH
DID NOT undergo the rudiments of
registration.
2) An independently registered union may
also be an affiliate of a federation or
national union.
Implicit in the forgoing differentiation is the fact
that a local or chapter need NOT BE
independently registered. By force of law (Art.
212 h) such local or chapter becomes a legitimate
labor organization upon compliance with the
aforementioned provisions of Section 3 (Under
DO. No. 9, its is now Rule IV Book V section 1 &
section 3)
 What requirements imposed by Art. 234
for the registration of an independent
union are OMTTED when it comes to
registration of a local or chapter?
i) The requirement that the application for
registration must be signed by at least
20% of the employees in the appropriate
bargaining unit;
ii) The submission of officers’ addresses,
principal address of the labor organization
the minutes of the organizational
meetings, list of the workers who
participated in such meetings
iii) The submission of the minutes of the
adoption or ratification of the constitution
and by laws and the list of the members
who participated in it.
RATIONALE: Undoubtedly, the intent of the law is
imposing lesser requirements in this case is to
encourage the affiliation of a local union in order to
increase the local union’s bargaining powers
respecting term and conditions of labor.
Although there are few requirements , the
requirements in A 235 regarding certification under
oath still has to be complied with. In the case at
bar, the constitution and by-laws and list of
officers submitted to the BLR, while attested to by
the chapter’s president, were not certified under
oath by the secretary.
 Does such defect (the constitution and
by-laws were not certified under oath)
warrant the withholding of the status of
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legitimacy to the local or chapter? YES. It
is a fatal defect.
RATIONALE: The certification and attestation
requirements are preventive measures against the
commission of fraud.
The rationale for requiring that the submitted
documents and papers be certified under oath
by the secretary or treasurer, as the case may
be, and attested to by the president is
apparent. Upon the approval of the application
for registration, the LO acquires legal
personality and thereby becomes entitled to all
the rights and privileges granted by the law to a
legit L.O. The employer would naturally need
assurance that it is dealing with a bonafide
organization, one which has not submitted false
statements and misrepresentation to the BLR.
a. The inclusion of the certification and
attestation requirements will in a
marked degree allay these
apprehensions of management.
Because the issuance of a false
statement and misrepresentation is a
ground for cancellation of registration
and is also a ground for criminal
charges of perjury.
b. The certification and attestation
requirements are preventive measures
against the commission of fraud.
c. They likewise 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 to use the union for dubious
ends.
Since there are lesser requirements for a local or a
chapter, there is greater reason to exact
compliance with the certification and attestation
requirements. The policy of the law in conferring
greater bargaining power upon labor unions must
be balanced with the policy of providing preventive
measures against the commission of fraud.
MAIN QUESTION of the case: When does a
branch, local or affiliate of a federation
become a legitimate labor organization?7
A local or chapter therefore becomes a
legitimate LO only upon submission of the
following to the BLR:
1. charter certificate within 30 days from its
issuance by the national union; and
2. constitution and By-laws, statement of the
set of officers and books of accounts all of which
must be certified under oath by the secretary
or treasurer of such local chapter and
attested by its president.
Absent compliance with these mandatory
requirements, the local or chapter does not
become a legitimate labor organization.
7
Take note: This is not in the law, but only in the
implementing rules, these requirement were present in
DO. No. 9, but the applicable rules now are DO No. 40-03
series of 2003. See footnotes for pertinent provisions.
Part III : Labor Organizations
Labor Relations
In case at bar, the failure of the secretary of
PDEU-Kilusan to certify the required documents
under oath is fatal to its acquisition of a legitimate
status.
Difference of an oath from an attestation is that in
an oath, you are in effect saying that all that is
contained therein is true and it makes you liable
for perjury. While an attestation merely means
that you have witnessed the fact of it.
San Miguel Foods, Inc. V. Laguesma (1997)
It is important to determine whether or not a
particular labor organization is legitimate since
legitimate labor organizations have exclusive rights
under the law which cannot be exercised by non-
legitimate unions.
ISSUE: Is a CHARTER CERTIFICATE
defective if it NOT certified under oath and
attested to by the organization’s secretary and
president? NO it is not defective.
A charter certificate need NOT be certified
under oath. What is required to be certified under
oath by the secretary or treasurer and attested to
by the local’s president are:
1. the “constitution’s and by-laws
2. Statement of the set of officers
3. The books of accounts
The charter certificate issued by the mother
union need not be certified under oath by the
secretary or treasurer and attested to by the
local’s president.
When does a labor organization acquire
legitimacy?
Ordinarily a labor organization attains the status of
legitimacy only upon the issuance in its name of a
Certificate of Registration by DOLE.
Furusawa v. Secretary of Labor(1997)
The presentation of the Xerox copy of the
certificate of registration to support its claim of
being a duly registered labor organization instead
of the submission of the original certificate is
sufficient proof of its legitimacy, not a fatal defect.
The issuance of the certificate of registration
evidently shows that FEU-IND has complied with
the requirements of Art. 234 of the Labor Code.
Certification proceeding is non-adversarial,
technical rules do not apply.
Laguna Autoparts etc. v. DOLE Secretary
(2005)
Indeed, a local or chapter need not be
independently registered to acquire legal
personality. Sec3, Rule VI of the Implementing
Rules of Book V, as amended by D.O. No. 9 clearly
states —
SEC. 3. Acquisition of legal personality by
local/chapter.— A local/chapter constituted in
accordance with Section 1 of this Rule shall
acquire legal personality from the date of
filing of the complete documents enumerated
therein. Upon compliance with all
documentary requirements, the Regional
Office or Bureau shall issue in favor of the
local/chapter a certificate indicating that it is
included in the roster of legitimate labor
organizations.
As gleaned from the said provision, the task of
determining whether the local or chapter has
submitted the complete documentary
requirements is lodged with the Regional Office or
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the BLR, as the case may be. The records of the
case show that the respondent union submitted the
said documents to Regional Office No. IV and was
subsequently issued the following certificate:
Such legal personality may not be subject to a
collateral attack but only through a separate action
instituted particularly for the purpose of assailing
it. This is categorically prescribed by Section 5,
Rule V of the Implementing Rules of Book V, which
states as follows:
SEC. 5. Effect of registration.— The labor
organization or workers’ association shall be
deemed registered and vested with legal
personality on the date of issuance of its
certificate of registration. Such legal
personality cannot thereafter be subject to
collateral attack but may be questioned only
in an independent petition for cancellation in
accordance with these Rules.[21]
Hence, to raise the issue of the respondent
union’s legal personality is not proper in this case.
The pronouncement of the Labor Relations Division
Chief, that the respondent union acquired a legal
personality with the submission of the complete
documentary requirement, cannot be challenged in
a petition for certification election.
3.03 RATIONALE FOR RIGHT
United Seaman’s Union v Davao Shipowners
Assoc (1967)
A labor organization is wholesome if it serves
its legitimate purpose of promoting the interests of
labor without unnecessary labor disputes.
That is why it is given personality and recognition
in concluding CBAs. But if it is made use of as a
subterfuge, or as a means to subvert valid
commitments, it defeats its own purpose, for it
tends to undermine the harmonious relations
between management and labor.
Guijarno v. CIR (1973)
The state has an obligation to “afford
protection to labor.” xxx That is to carry out the
purpose implicit in one of the five declared
principles, namely the promotion of social justice
“to insure the well being and econmic security of
the people…”
It is then the individual employee, as a
separate, finite human being, with his problems
and his needs, who must be attended to. He is the
beneficiary of the concerns thus made manifest by
the fundamental law.
RATIONALE: Where does that leave a labor
union? Correctly understood, it is nothing but the
means of assuring that such fundamental
objectives would be achieved. It is the
instrumentality through which an individual laborer
who is helpless as against a powerful employer
may, through concerted effort and activity achieve
the goal of economic well-being. Workers
unorganized are weak, workers organized are
strong.
Unions are merely instrumentalities through
which their welfare may be protected and fostered.
That is the raison d’être of labor unions.It is the
instrumentality by which the weak laborer up
against the strong employer, may, by concerted
effort, achieve economic well-being.
Heirs of Cruz v CIR (1969)
In the case at bar, union officers entered
into a compromise concerning backwages of
Part III : Labor Organizations
Labor Relations
member-employees with the employer. The union
is but an agent of the individual workers and it has
the duty to inform the members of the labor
matters entrusted to it. The employer may rely on
the authority of the union to bring the union
members especially in collective bargaining where
the matters to be discussed are still to be observed
but this case is an exception. What is sought here
are backwages and other benefits already earned.
Authority for the union to waive this right to
backwages must be express. In a compromise or
settlement, the individual union members are the
real judgment creditors and are the real parties in
interest.
3.04 LABOR UNION AND GOVERNMENT
REGULATION
1. UNION REGISTRATION AND PROCEDURE
REQUIREMENTS
Art. 234
Requirements of Registration.—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 labor organizations upon issuance of
certificate of registration based on the ff
requirements:
a. P50 registration fee
b. The names of its officers their addresses,
the principal address of the labor org,
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 20% of all the Ees of the bargaining
unit it seeks to operate
d. If the applicant union has been in existence
for 1 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 participating in it.
Art. 237
Additional requirements for federations or national
unions—subject to Art 238, if the applicant for
registration is a federation or a national union it
shall, in addition to the requirements of the
preceding articles submit the ff:
a. Proof of the affiliation of at least 10 locals
or chapters
-- each of which must be a duly recognized
collective bargaining agent in the
establishment or industry in which
operates, supporting the registration of
such applicant federation or national union;
and
b. the names and addresses of the companies
where the locals or chapters operate and
the list o fall the members of each company
involved.
Art 235
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Action of application—The bureau shall act on all
applications for registration within 30 days from
filing.
All requisite documents and papers shall be
certified under oath by the secretary or the
treasurer of the org as the case may be and
attested to by its president.
(See Progressive case in preceding pages)
Pagpalain Hauling Inc. v. Trajano (1999)
The Labor Code DOES NOT require the
submission of books of account in order for a labor
organization to be registered as a legitimate labor
organization.
The requirement that books of account be
submitted as a requisite for registration can be
found only in Book V of the Omnibus Rules
Implementing the Labor code, PRIOR to its
amendment by DO No. 9 Series of 1997.
Specifically, the old Section 3(e, Rule II, of Book V
provided that “the local or chapter of a labor
federation or national union shall have and
maintain a constitution and by-laws, set of officers
and BOOKS OF ACCOUNTS. For reporting
purposes, the procedure governing the reporting of
independently registered union, federations or
national unions shall be observed.”
Since Department Order No. 9 has done away
with the submission of books of accounts as a
requisite for registration, Pagpalain’s only recourse
now is to have said order declared null and void.
The controlling intention in requiring the
submission of books of accounts is the protection
of labor through the minimization of the risk of
fraud and diversion in the handling of union funds.
But this intention can still be realized through
other provisions of the Labor Code. (Example Art.
241 b, g, h, I, j, l, m; Art. 274)
Department Order No. 9 only dispenses with
books of accounts as a requirement for registration
of a local or chapter of a national union or
federation. As provided by Article 241 h and 241 j,
a labor organization must still maintain books of
account, but it need not submit the same as a
requirement for registration.
EFFECT OF REGISTRATION ON FREEDOM OF
ASSOCIATION
PAFLU v. Sec. Of LAbor
The requirement of registration does NOT
curtail the freedoms of assembly and association.
Said freedoms may still be exercised with or
without registration. The latter is merely a
condition sine qua non for the acquisition of legal
personality by labor unions and the possessions of
rights and privileges granted by law. The
constitution does not guarantee these rights and
privileges, much less legal personality, which are
mere statutory creations.
2. ACTIONS OR DENIAL OF APPLICATION
AND REMEDY
Art 235
Action of application—The bureau shall act on all
applications for registration within 30 days from
filing.
Part III : Labor Organizations
Labor Relations
All requisite documents and papers shall be
certified under oath by the secretary or the
treasurer of the org as the case may be and
attested to by its president.
Art. 236
Denial of registration; appeal---The decision of the
Labor Relations Division in the regional office
denying registration may be appealed by the
applicant union to the Bureau within 10 days from
receipt of notice thereof.
Vassar Industries EEs Union v Estrella
(1951)
As long as an applicant union complies with all
of the legal requirements for registration, it
becomes the BLR’s ministerial duty to so register
the union.
Umali v Lovina (1978)
There is no lVawful reason for the respondent
labor official to refuse the registration of the
application of the petitioner’s union and permission
to operate as a legitimate labor org.
It is the duty of the respondent to register the
application and issue the permit upon payment of
required fee, provided for in sec 3 of CA 213, the
investigation to be conducted by him, as required
by law, having been conducted and completed, as
may be inferred from his official statements in
connection therewith.
Purposes, aims, or objectives of Independent
union do not tend “to undermine and destroy the
constituted government or to violate any law or
laws of the Philippines,” which is the only ground
or reason for refusing the registration and
permission to operate as a legitimate labor
organization.
Secretary has neglected the performance of
an act which the law specifically enjoins him to
perform as a duty resulting from his office.
3. RIGHTS OF LEGITIMATE LABOR
ORGANIZATION
Art. 242
A legitimate labor organization shall have the
right:
(a) To acts as the REPRESENTATIVE of its
members for the purpose of COLLECTIVE
BARGAINING.**
(b) To be certified as the EXCLUSIVE
REPRESENTATIVE of ALL THE EMPLOYEES
(whether union member or not) in an
appropriate collective bargaining unit for
purposes of collective bargaining;**
(c) (c) To be furnished by the employer,
upon written request with the ANNUAL
AUDITED FINANCIAL STATEMENTS,
including the balance sheets and the
profit and loss statement, within thirty
(30) calendar days from the date of
receipt of the request, after the union has
been duly recognized by the employer or
certified as the sole and exclusive
bargaining representatives of the
employees in the bargaining unit, or
within 60 calendar days before the
expiration of the existing collective
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bargaining agreement, or during the
collective bargaining negotiation;
(d) To OWN PROPERTY, real or personal, for
the use and benefit of the labor
organization and its members.
(e) To SUE AND BE SUED in its registered
name; and
(f) To undertake ALL activities designed to
benefit the organization and its members
including cooperative, housing welfare
and other projects not contrary to law.
Notwithstanding any provision of a general or
special law to the contrary, the income and the
properties of a legitimate labor organization,
including grants, endowments, gifts, donations and
contributions they may receive from fraternal and
similar organizations, local and foreign, which are
actually, directly and exclusively used for their
lawful purposes, shall be free from taxes, duties
and other assessments.
The exemption provided herein may be withdrawn
only by a special law expressly repealing this
provision.
Acedera vs. Int’l Container Terminal Services,
Inc. (2003)
A labor union is one such party authorized to
represent its members under Article 242(a) of the
Labor Code which provides that a union may act as
the representative of its members for the purpose
of collective bargaining. This authority includes the
power to represent its members for the purpose of
enforcing the provisions of the CBA. That APCWU
acted in a representative capacity "for and in
behalf of its Union members and other employees
similarly situated," the title of the case filed by it at
the Labor Arbiter's Office so expressly states.
While a party acting in a representative
capacity, such as a union, may be permitted to
intervene in a case, ordinarily, a person whose
interests are already represented will not be
permitted to do the same except when there is a
suggestion of fraud or collusion or that the
representative will not act in good faith for the
protection of all interests represented by him.
Protection Technology v. Sec. Of Labor
(1995)
The statutory and regulatory provisions
defining the requirements of registration of
legitimate labor organizations are an exercise of
the overriding police power of the state designed
for the protection of workers against potential
abuses by unions and federations of unions that
recruit them.
A union must comply with all the requirements
of registration as a legitimate labor organization
before it may enjoy the fruits of its certification
election victory and before it may exercise rights of
a legitimate labor organization.
Sugbuanon Rural Bank,Inc. v. Laguesma
(2000)
One of the rights of a legitimate labor
organization under Article 242(b) of the Labor
Code is the right to be certified as the exclusive
representative of all employees in an
appropriate bargaining unit for purposes of
collective bargaining.
Part III : Labor Organizations
Labor Relations
Having complied with the requirements of Art.
234, it is our view that respondent union is a
legitimate labor union. Article 257 of the Labor
Code mandates that a certification election shall
AUTOMATICALLY be conducted by the Med-Arbiter
upon the filing of a petition by a legitimate labor
organization. Nothing is said therein that prohibits
such automatic conduct of the certification election
if the management appeals on the issue of the
validity of the union's registration.
Petitioner argues that giving due course to
respondent union's petition for certification
election would violate the separation of unions
doctrine.
 Note that the petition was filed by
APSOTEU-TUCP, a legitimate labor
organization.
 It was not filed by ALU.
 Nor was it filed by TUCP, which is a
national labor federation of with which
respondent union is affiliated.
Petitioner says that respondent union is a
mere alter ego of ALU. The records show nothing
to this effect. What the records instead reveal is
that respondent union was initially assisted by ALU
during its preliminary stages of organization. A
local union maintains its separate personality
despite affiliation with a larger national federation.
4. CANCELLATION OF REGISTRATION
Art 238
The certificate of registration of any legitimate
labor org whether national or local shall be
 Canceled by the bureau
 If it has reason to believe after due hearing
that the said labor org no longer meets one
or more of the requirements herein
prescribed.
Art. 239
Grounds for cancellation of union registration—the
following shall constitute grounds for cancellation
of union registration:
a. Misrepresentation, false statement or
fraud - in connection with the adoption or
ratification of the consti and by-laws or
amendments thereto, the minutes of
ratification, the list of members who took
part in the ratification of the const. and
by-laws or amendments thereto, the
minutes of ratification, the list of
members who took part in the ratification
b. Failure to submit the documents
mentioned in the preceding paragraph
within 30 days from adoption and
ratification of const. and by-laws or
amendments thereto.
c. Misrepresentation, false statements or
fraud - in connection w/ the election of
officers, 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 within
30 days from election.
d. Failure to submit the annual financial
report to the bureau within 30 days after
the closing of every fiscal year and
misrepresentation, false entries or fraud
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in the preparation of the financial report
itself.
e. Acting as a labor contractor or engaging
in the Cabo system or otherwise engaging
in any activity prohibited by law/
f. Entering into CBAs w/c provide terms and
conditions of employment below minimum
standards established by law.
g. Asking for or accepting atty.’s fees or
negotiation fees from Ers.
h. Other than for mandatory activities under
this code checking of special assessments
or any other fees without duly signed
individual written authorizations of the
members.
i. Failure to submit list of individual
members to the bureau once a year or
whenever required by the bureau; and
j. Failure to comply with requirements under
Art 237 & 238.
Art 241 (j)
Every income or revenue of the org shall be
evidenced by a record showing its source, and
every expenditure of its funds shall be evidenced
by a receipt from the person to whom the payment
is made, which shall state the date, place and
purpose of such payment. Such record or receipt
shall form part of the financial records of the org.
(as amended by Sec 16, RA 6715)
DO No. 40-03 series of 2003
Rule I Sec. 1: (g) "Cancellation Proceedings" refer
to the legal process leading to the revocation of
the legitimate status of a union or workers'
association.
RULE XIV: CANCELLATION OF REGISTRATION
OF LABOR ORGANIZATIONS
Section 1. Where to file. – Subject to the
requirements of notice and due process, the
registration of:
1) Any legitimate independent labor union,
chartered local and workers' association may
be cancelled by the Regional Director, or
2) In the case of federations, national or
industry unions and trade union centers, by
the Bureau Director,
Upon the filing of an independent complaint or
petition for cancellation.
Section 2. Who may file. – Any party-in-interest
may commence a petition for cancellation of
registration,
 except in actions involving violations of Article
241, which can only be commenced by
members of the labor organization concerned.
Section 3. Grounds for cancellation.
The following shall constitute grounds for
cancellation of registration of labor organizations:
(a) 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,
 The list of members, who took part in the
ratification of the constitution and by-laws
or amendments thereto,
Part III : Labor Organizations
Labor Relations
 The minutes of ratification,
 The list of members who took part in the
ratification;
(b) Failure to submit the documents mentioned in
the preceding paragraph
 Within thirty (30) days from adoption or
ratification of the constitution and by-laws or
amendments thereto;
(c) Misrepresentation, false statements or fraud in
connection with
 The election of officers,
 Minutes of the election of officers,
 The list of voters,
Failure to submit these documents together with
the list of the newly elected or appointed officers
and their postal address within thirty (30) days
from election;
(d) Failure to submit the annual financial report to
the Bureau within thirty (30) days after the close
of every fiscal year and misrepresentation, false
entries or fraud in the preparation of the financial
report;
(e) Acting as a labor contractor or engaging in the
"cabo" system, or otherwise engaging in any
activity prohibited by law;
(f) Entering into collective bargaining agreements
which provide for terms and conditions of
employment
 Below minimum standards established by law;
(g) Commission of any of the acts enumerated
under Article 241 of the Labor Code;
 Provided that no petition for cancellation
based on this ground may be granted unless
supported by at least 30% of all the members
of the respondent labor organization;
(h) Asking for or accepting attorney's fees or
negotiation fees from the employer;
(i) Other than for mandatory activities under the
Labor Code, checking off special assessments or
any other fees without duly signed individual
written authorizations of the members;
(j) Failure to submit list of individual members to
the Bureau once a year or whenever required by
the Bureau;
(k) Failure to comply with the requirements of
registration prescribed under Rules III and IV.
Section 4. Action on the petition. - The petition
shall be resolved by the Regional Director in
accordance with Rule XI, unless the petition is
based on paragraphs (d) and (j) of the foregoing
section or non-compliance with the labor
organization's reportorial obligations, in which case
the petition shall be acted upon pursuant to the
following Rule.
RULE XV: CANCELLATION OF REGISTRATION
OF LABOR ORGANIZATIONS DUE TO NON-
COMPLIANCE WITH THE REPORTORIAL
REQUIREMENTS
Section 1. When proper– Where a registered
labor organization in the private sector
 Failed to submit the reports required under
Rule V
 For five (5) consecutive years
 Despite notices for compliance sent by the
Labor Relations Division or the Bureau,
The latter (LRD) may cause the institution of the
administrative process for cancellation of its
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registration, upon its own initiative or upon
complaint filed by any party-in-interest.
Section 5. Conditions for administrative
cancellation of certificate of registration. No
registration of labor organization shall be cancelled
administratively by the Bureau due to non-
compliance with the reportorial requirements
unless:
(a) Non-compliance is for a continuous period of
five (5) years;
(b) The procedures laid down in this Rule were
complied with; and
(c) The labor organization concerned has not
responded to any of the notices sent by the
Bureau, or its notices were returned unclaimed.
PAFLU V. Sec Of Labor (1969)
The obligation to submit FINANCIAL
STATEMENTS, as a condition for the non-
cancellation of a certificate of registration is
reasonable regulation for the benefit of the
members of the organization, considering that the
same generally solicits funds or membership, as
well as oftentimes collects on behalf of its
members, huge amounts of money due to them or
to the organization.
Tablante V. Noriel 845 SCRA 738 (1978)
If the union is engaged in an illegal strike, is
this a ground for cancellation of registration?
No it is not. The phrase “or otherwise engaged
in any activity prohibited by law” should be
construed to mean such activity engaged into by a
union that partakes of the nature of a labor
contractor or Cabo system. Illegal strike per se is
legal.
Alliance of Democratic Labor Organization v.
Laguesma
ADFLO filed an application for registration as a
national federation alleging, among others that it
has 12 affiliates. Later, the Confederation of Labor
and Allied Social Services (CLASS) filed a petition
for the cancellation of the Registration Certificate
issued to ADFLO.
The First Issue: Due Process
The most basic tenet of due process is the
right to be heard, and as applied in administrative
proceedings, an opportunity to explain one's side.
Such opportunity was denied petitioner in this
case.
After petitioner submitted its objections to the
admission of the documentary evidence of CLASS,
the BLR director should have first ruled on their
admissibility. However, without ruling on said offer
and without setting the case for reception of
petitioner's evidence, the said official proceeded to
render judgment affirming its earlier decision to
cancel the registration of ADFLO. This is a gross
violation of petitioner's right to due process.
Under Section 1, Article II of our Constitution,
"no person shall be deprived of life, liberty or
property without due process of law . . ." and
under Article 238 of the Labor Code, "the
certificate of registration of any legitimate labor
organization, whether national or local, shall be
cancelled by the Bureau if it has reason to
believe, after due hearing, that the said labor
Part III : Labor Organizations
Labor Relations
organization no longer meets one or more of the
requirements herein prescribed."
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. A
decision rendered without any hearing is null and
void.
The Second Issue: Substantial Basis
It will be noted that the Director of the Bureau
of Labor Relations never made any ruling on
whether the exhibits submitted by CLASS were
admissible in evidence. That being so, the said
exhibits cannot be made use of in deciding the
case. A decision with absolutely nothing to support
it is a nullity.
5. COLLATERAL ATTACK
Tagaytay Highlands International Golf Club,
Inc. vs. Tagaytay Highlands Employees
Union- (2003)
After a certificate of registration is issued to a
union, its legal personality cannot be subject to
collateral attack. It may be questioned only in an
independent petition for cancellation in accordance
with Section 5 of Rule V, Book IV of the "Rules to
Implement the Labor Code" (Implementing Rules)
which section reads:
Sec. 5. Effect of registration. The labor
organization or workers' association shall be
deemed registered and vested with legal
personality on the date of issuance of its
certificate of registration. Such legal
personality cannot thereafter be subject to
collateral attack, but may be questioned only
in an independent petition for cancellation in
accordance with these Rules.
The inclusion in a union of disqualified
employees is not among the grounds for
cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under
the circumstances enumerated in Sections (a) and
(c) of Article 239 of above-quoted Article 239 of
the Labor Code. The union, having been validly
issued a certificate of registration, should be
considered to have already acquired juridical
personality which may not be assailed collaterally.
3.05 INTERNATIONAL ACTIVITIES OF
UNION – PROHIBITION AND
REGULATION
Art. 269
Prohibition against aliens; exceptions—All aliens,
natural or juridical, as well as foreign orgs are
 strictly prohibited from engaging directly or
indirectly in all forms of trade union activities
without prejudice to normal contacts bet Phil
labor unions and recognized international
labor centers:
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 Provided, however, That aliens working in the
country with valid PERMITS issued by the Dept
of Labor and Employment,
o may exercise the right to self-org and join
or assist labor orgs of their own choosing
for purposes of collective bargaining;
o Provided, further, That said aliens are
nationals of a country which grants the
same or similar rights to Filipino workers.
Art. 270
Regulation of foreign assistance.—
(a) No foreign individual, org or entity may give
any donations, grants or other forms of
assistance, in cash or in kind, directly or
indirectly, to any labor org, group of workers
or any auxiliary thereof, such as cooperatives,
credit unions and institutions engaged in
research, education or communication, in
relation to trade union activities,
 without prior permission by the Sec of
Labor.
“Trade union activities” shall mean:
4. organization, formation and
administration of labor orgs;
5. negotiation and admin of collective
bargaining agreements;
6. all forms of concerted union action;
7. organizing, managing, or assisting
union conventions, meetings, rallies,
referenda, teach-ins, seminars,
conferences and institutes;
8. any form of participation or involvement
in representation proceedings,
representation elections, consent
elections, union elections; and
9. other activities or actions analogous to
foregoing.
(b) This prohibition shall equally apply to foreign
donations, grants or other forms of assistance,
in cash or in kind, given directly or indirectly
to any Eer(s) org to support any activity or
activities affecting trade unions.
(c) The Sec of Labor shall promulgate rules and
regulations to regulate and control the giving
and receiving of such donations, grants, or
other forms of assistance, including the
mandatory reporting of the amounts of the
donations or grants the specific recipients
thereof, the projects or activities proposed to
be supported, and their duration.
Art. 271
Applicability to farm tenants and rural workers—
The provisions of this Title pertaining to foreign
orgs and activities shall be deemed applicable
likewise to all orgs of farm tenants, rural workers,
and the like:
Provided, That in appropriate cases the Sec of
Agrarian Reform shall exercise the powers and
responsibilities vested by this Title in the Sec of
Labor.
3.06 UNION-MEMBER RELATIONS
Art. 241
Part III : Labor Organizations
Labor Relations
Rights and conditions of membership in a labor
org—The following are the rights and conditions of
membership in a labor org.:
A. No arbitrary or excessive initiation fees
shall be required of the members of a legit
labor org nor shall arbitrary, excessive or
oppressive fine and forfeiture be imposed;
B. The members shall be entitled to full and
detailed reports from their officers and
representatives of all financial transactions
s provided for in the constitution and by-
laws of the org;
C. The members shall directly elect their
officers, including those of the national
union or federation, to which they or their
union is affiliated, by secret ballot at
intervals of five (5) years.
No qualification requirements for
candidacy to any position shall be
imposed other than membership in good
standing in subject labor org. The
secretary or any other responsible union
officer shall furnish the Sec of Labor and
Employment with a list of the newly-
elected officers, together with the
appointive officers of agents who are
entrusted with the handling of funds
within thirty (30) calendar days after the
election of officers or from the occurrence
of any change in the list of officers of the
labor org.( as amended by Sec 16, RA
6715)
D. The members shall determine by secret
ballot, after due deliberation, any question
of major policy affecting the entire
membership of the org, unless the nature
of the org or force majeure renders such
secret ballot impractical, in which case the
board of dir of the org may make the
decision in behalf of the general
membership;
E. No labor org shall knowingly admit as
members or continue in membership any
individual who belongs to a subversive org
or who is engaged directly or indirectly in
any subversive activity;
F. No person who has been convicted of a
crime involving moral turpitude shall be
eligible for election as a union officer or for
appointment to any position in the union;
****(Isn’t this in conflict with second part
of letter C)
G. No officer, agent or member of a labor org
shall collect any fees, dues, or other
contributions in its behalf or make any
disbursement of its money or funds unless
he is duly authorized pursuant to its const.
and by-laws;
H. Every payment of fees, dues or other
contributions by member shall be
evidenced by a receipt signed by the officer
or agent making the collection and entered
into the record of the org to be kept and
maintained for the purpose;
I. The funds of the org shall not be applied for
any purpose or object other than those
expressly provided by its consti and by-
laws or those expressly authorized by
written resolution adopted by the majority
of the members at a general meeting duly
called for the purpose;
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J. Every income or revenue of the org shall be
evidenced by a record showing its source,
and every expenditure of its funds shall be
evidenced by a receipt from the person to
whom the payment is made, which shall
state the date, place and purpose of such
payment. Such record or receipt shall form
part of the financial records of the org. (as
amended by Sec 16, RA 6715)
Any action involving the funds of the org
shall prescribe after three(3) years from the
date of submission of the annual financial
report to the Dept of Labor and Employ’t or
from the date the same should have been
submitted as required by law, whichever
comes earlier:
Provided, That this provision shall apply only
to a legit labor org which has submitted the
financial report requirements under this
Code;
Provided, further, that failure of any labor
org to comply with the periodic financial
reports required by law and such rules and
regulations promulgated thereunder six (6)
months after the effectivity of this Act shall
automatically result in the cancellation of
union registration of such labor org.
K. The officers of any labor org shall not be
paid any compensation other than the
salaries and expenses due to their positions
as specifically provided for in its const. and
by-laws, or written resolution duly
authorized by a majority of all the members
at a general membership meeting duly
called for the purpose.
The minutes of the meeting and the list of
participants and ballots cast shall be subject
to inspection by the Sec of Labor or his duly
authorized representatives. Any
irregularities in the approval of the
resolutions shall be a ground for
impeachment or expulsion from the org;
L. The treasurer of any labor org and every
officer thereof who is responsible for the
account of such org or for the collection,
management, disbursement, custody or
control of the funds, moneys and other
properties of the org, shall render to the
org and to its members a true and correct
account of all moneys received and paid by
him since he assumed office or since the
last day on which he rendered such
account, and of all bonds, securities and
other properties of the org entrusted to his
custody or under his control. The rendering
of such account shall be made:
1. At least once a year within thirty (30)
days after the close of its fiscal year;
2. At such other times as may be
required by a resolution of the
majority of the members of the org;
and
3. Upon vacating his office.
The account shall be duly audited and
verified by affidavit and a copy thereof shall be
furnished the Sec of Labor.
M. The books of accounts and other records of
the financial activities of any labor org shall
be open to inspection by any officer or
member thereof during office hours;
Part III : Labor Organizations
Labor Relations
N. No special assessment or other
extraordinary fees may be levied upon the 2. ISSUES
members of a labor org
-- unless authorized by a written ADMISSION AND DISCIPLINE OF MEMBERS
resolution of a majority of all the
members of a
Art. 249 (a)
-- general membership meeting
To restrain or coerce EEs in the exercise of their
-- duly called for the purpose.
rights to self-org. However, a labor org shall have
-- The secretary of the org shall record
the right to prescribe its own rules with respect to
the minutes of the meeting
the acquisition or retention of membership;
-- including the list of all members
present, the votes cast, the purpose
Art. 277
of the special assessment or fees and
Any EE, whether employed for a definite period or
the recipient of such assessments or
not, shall, beginning on his first day of service, be
fees.
considered an EE for purposes of membership in
-- The record shall be attested to b the
any labor union.
president.
O. Other than for mandatory activities under
UST Faculty Union v. Bitonio (1999)
the Code,
The point to be stressed is that the union’s
-- no special assessments, atty.’s fees,
CBL is the fundamental law that governs the
negotiation fees or any other
relationship between and among the members of
extraordinary fees may be checked
the union.
off from any amount due to an
It is where the rights, duties and obligations,
employee
powers, functions and authority of the officers as
-- without an individual written
well as the members are defined. It is the organic
authorization duly signed by the Ee.
law that determines the validity of acts done by
- - The authorization should specifically
any officer or member of the union. Without
state the amount, purpose and
respect for the CBL, a union as a democratic
beneficiary of the deduction; and
institution degenerates into nothing more than a
P. It shall be the duty of any labor
group of individuals governed by mob rule.
organization and its officers to inform its
The importance of a union’s constitution and
members on the provisions of its consti and
by-laws cannot be overemphasized. They embody
by-laws, collective bargaining agreement,
a covenant between a union and its members and
the prevailing labor relations system and all
constitute the fundamental law governing
their rights and obligations under existing
members’ rights and obligations. As such, the
labor laws.
union’s constitution and by-laws should be upheld,
For this purpose, registered labor orgs may
as long as they are not contrary to law, good
assess reasonable dues to finance labor
morals, or public policy.
relations seminars and other labor
education activities.
Salunga v CIR (1967)
Any violation of the above rights and GENERAL RULE: Court cannot compel
conditions of membership shall be ground for voluntary associations to admit thereto a particular
cancellation of union registration or expulsion individual/s. Membership in such groups is a
of officer from office, whichever is appropriate. matter of privilege.
EXCEPTION: However, this general rule does
At least thirty (30%) of all members of a not apply to the case of LABOR UNIONS HOLDING
union or any member or members specially MONOPOLY IN THE SUPPLY LABOR whether in a
concerned may report such violation to the given locality, or as closed-shop agreement.
Bureau. The Bureau shall have the power to The closed-shop or maintenance of
hear and decide any reported violation to membership conditions cause the admission and
mete the appropriate penalty. discipline requirements of the Union to become
affected with public interest. Such unions are not
Criminal and civil liabilities arising from violations entitled to arbitrarily exclude qualified applicants.
of above rights and conditions of membership shall Furthermore, Salunga is not guilty of disloyalty.
continue to be under the jurisdiction of ordinary The anomalies he brought out were all true.
courts. Company is not guilty of unfair labor practice.
Salunga is entitled to reinstatement. If unions may
1. NATURE OF RELATIONSHIP be compelled to admit new members who have the
requisite qualifications, with more reason may the
Heirs of Cruz v CIR courts exercise their coercive power when the
employee involved is a long-standing union
The union is but an AGENT of the individual
member, who owing to provocations of union
workers and it has the duty to inform the members
officers, was impelled to tender his resignation,
of the labor matters entrusted to it. The employer
which he forthwith withdrew or revoked.
may rely on the authority of the union to bring the
union members especially in collective bargaining
where the matters to be discussed are still to be DISINI:
observed but this case is an exception. GENERAL RULE: Labor union is a PRIVATE and
voluntary organization.
EXCEPTION: When union has access to
employment, example: closed-shop agreement.

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Part III : Labor Organizations
Labor Relations
This converts union into one with a public character
and thus the government will have a right to inquire
into the rules or business of the union.
RIGHT TO DISCIPLINE
Villar v Inciong (1983)
When a labor union affiliates with a mother
union, it becomes bound by the laws and
regulations of the parent organization. It becomes
subject to the laws of the superior body under
whose authority the local union functions. The
constitution, by-laws and rules of the parent body,
together with the charter it issues pursuant thereto
to the subordinate union, constitute an enforceable
contract between the parent body and the
subordinate union.
When members of a labor union sow the seeds
of dissension and strife within the union. When
they seek the disintegration and destruction of the
very union to which they belong. They forfeit their
rights to remain as members. PAFLU acted when,
after proper investigation and finding of guilt, it
decided to remove the oppositors from the list of
members of the Amigo Employees Union-PAFLU.
DUE PROCESS RULES
Bugay v Kapisanan ng Manggagawa sa Manila
Railrd (1962)
The union claims that he cannot claim such,
as the findings were based solely on procedural
defects, there being indication of bad faith on the
part of its officers. The Court rules otherwise, as
he was subject to humiliation and mental anguish
with the consequent loss of his good name and
reputation. Such claims could not have been
included in the case before the CIR as it was not
within its jurisdiction. Case remanded.
In this case, Bugay was charged by union
officers of disloyalty and was terminated from
union membership. Bugay was NOT present in ANY
of the investigations. They failed to give notice or
to summons Bugay. And yet the investigations
pushed through. Case remanded.
ELECTION OF OFFICERS---QUALIFICATIONS, MANNER
OF ELECTION, TENURE AND COMPENSATION
Art 241
(c) The members shall directly elect their officers,
including those of the national union or
federation, to which they or their union is
affiliated,
 by secret ballot
 at intervals of five (5) years.
No qualification requirements for candidacy to
any position shall be imposed other than
membership in good standing in subject labor
org.
The secretary or any other responsible union
officer shall furnish the Sec of Labor and
Employ’t with a list of the newly-elected
officers, together with the appointive officers
of agents who are entrusted with the handling
of funds within thirty (30) calendar days after
the election of officers or from the occurrence
of any change in the list of officers of the labor
org.( as amended by Sec 16, RA 6715)
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(f) No person who has been convicted of a crime
involving moral turpitude shall be eligible for
election as a union officer or for appointment
to any position in the union;
(k) The officers of any labor org shall not be paid
any compensation other than the salaries and
expenses due to their positions as specifically
provided for in its consti and by-laws, or
written resolution duly authorized by a
majority of all the members at a general
membership meeting duly called for the
purpose.
The minutes of the meeting and the list of
participants and ballots cast shall be subject to
inspection by the Sec of Labor or his duly
authorized representatives. Any irregularities
in the approval of the resolutions shall be a
ground for impeachment or expulsion from the
org;
QUALIFICATON:
Member in good standing
Not convicted of crime of moral turpitude
MANNER OF ELECTION:
Secret Ballot, Direct election, Interval of 5 years
TENURE:
5 years
COMPENSATION:
Generally none. But allowed if the constitution or
by-laws allow it, or a written resolution by a
majority of all the union members in a general
membership meeting called for that purpose.
VOTERS LIST
Tancinco vs Calleja (1988)
Submission of the employees names with the
BLR as qualified members of the union is not a
condition sine qua non to enable said members to
vote in the election of union’s officers.
Under Article 242, only members of the union
can participate in the election of union officers.
The question of eligibility to vote may be
determined through the use of the applicable
payroll period and employee’s status during the
applicable payroll period---the payroll of the month
next preceding the labor dispute in case of regular
employees and the payroll period at or near the
peak of operations in case of employees in
seasonal industries.
Considering that none of the parties insisted
on the use of the payroll period-list as voting list
and considering that the 51 remaining employees
were correctly ruled to be qualified for
membership, their act of joining the election by
casting their votes is a clear manifestation of their
intention to join the union. They must be
considered ipso facto members.
UST Faculty v. Bitonio (1999)
A union election is held pursuant to the union’s
constitution and by-laws and the right to vote in it
is enjoyed ONLY BY UNION MEMBERS.
A union election should be distinguished from
a certification election, which is the process of
determining, through secret ballot, the sole and
exclusive bargaining agent of the employees in the
appropriate bargaining unit, for purpose of
collective bargaining.
Part III : Labor Organizations
Labor Relations
Specifically, the purpose of a certification
election is to ascertain whether or not a majority
of the employees wish to be represented by a
labor organization and, in the affirmative case, by
which particular labor organization. In a
certification election, ALL employees belonging to
the appropriate bargaining unit can vote.
Therefore, a union member who likewise belongs
to the appropriate bargaining unit is entitled to
vote in said election.
HOWEVER, the reverse is not always true; an
employee belonging to an appropriate unit but who
is not a member of the union cannot vote in the
union election, UNLESS otherwise authorized by
the constitution and by-laws.
DISQUALIFICATION CANDIDATE
Manalad vs Trajano (1989)
Babula disqualified from running for certain
reasons not mentioned in the case.
Court will respect the will of the majority of
the workers who voted Where the people have
elected a man to office, it must be assumed that
they did this with knowledge of his life and
character, and that they disregarded or forgave his
faults or misconduct, if he had been guilty of any.
Lastly, even if the disqualification of Babula et al
could be justified, the candidates of Manalad
certainly cannot be declared as the winners in the
disputed election. The mere fact that they obtained
the second highest number of votes does not
mean that they will thereby be considered as the
elected officers.
EXPULSION REMEDY
Kapisanan vs Trajano (1985)
If herein union officers were guilty of the
alleged acts imputed, BLR pursuant to Article 242
should have meted out the appropriate penalty on
them, i.e., to expel them from the Union, as
prayed for, and not call for a referendum to decide
the issue. The allegations of falsification and
misrepresentation of union officers were not
supported by substantial evidence. The
expenditures appeared to have been made in good
faith. Furthermore, holding of the referendum has
become moot and academic.
Court should never remove a public officer for
acts done prior to his present term of office. To do
otherwise would be to deprive the people of their
right to elect their officers. When the people have
elected a man to office, it must be assumed that
they did this with knowledge of his life and
character, and that they disregarded or forgave his
faults or misconduct, if he had been guilty of any.
ELECTION ISSUES
Rodriguez vs Director (1988)
General elections were attended by grave
irregularities, rendering the elections invalid. The
dates for provincial elections were set but they
were in fact held on another date without prior
notice to all voting members, and without ground
rules duly prescribed.
Undue haste, lack of adequate safeguards to
ensure integrity of the voting, and absence of
notice of the dates of balloting, thus attended the
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elections. A record-breaking voter turnout of 73%,
cannot purge the elections of their grave
infirmities. The elections were closely contested.
Results would obviously have been affected by the
ballots of the 2,056 voters who had been unable to
cast their votes because of lack of notice of actual
dates of the elections.
Free and honest elections are indispensable to
the enjoyment by employees and workers of their
constitutionally protected right to self-organization.
MAJOR POLICY MATTERS
Art. 241 d
The members shall determine by secret ballot,
after due deliberation, any question of major policy
affecting the entire membership of the org,
 Unless the nature of the org or force majeure
renders such secret ballot impractical,
 In which case the board of director of the org
may make the decision in behalf of the general
membership;
Halili v CIR (1985)
Retainer’s contract was not a contract with the
general membership. This violates A242 (d) of the
Labor Code which provides: The members shall
determine by secret ballot, after due deliberation,
any question of major policy affecting the entire
membership of the organization, unless the nature
of the organization or force majeure renders such
secret ballot impractical, in which case the board of
directors of the organization may make the
decision in behalf of the general membership.
UNION FUNDS
 How are union funds protected?
Art. 241
Rights and conditions of membership in a labor
org.—The following are the rights and conditions of
membership in a labor org.
b. The members shall be entitled to full and
detailed reports from their officers and
representatives of all financial transactions is
provided for in the constitution and by-laws of
the org;
g . No officer, agent or member of a labor org
shall collect any fees, dues, or other
contributions in its behalf or make any
disbursement of its money or funds unless he
is duly authorized pursuant to its consti and
by-laws;
h. Every payment of fees, dues or other
contributions by member shall be evidenced
by a receipt signed by the officer or agent
making the collection and entered into the
record of the org to be kept and maintained
for the purpose;
i. The funds of the org shall not be applied for
any purpose or object other than those
expressly provided by its consti and by-laws or
those expressly authorized by written
resolution adopted by the majority of the
members at a general meeting duly called for
the purpose;
j. Every income or revenue of the org shall be
evidenced by a record showing its source, and
every expenditure of its funds shall be
evidenced by a receipt from the person to
whom the payment is made, which shall
Part III : Labor Organizations
Labor Relations
state the date, place and purpose of such
payment. Such record or receipt shall form
part of the financial records of the org. (as
amended by Sec 16, RA 6715)
l. The treasurer of any labor organization and
every officer thereof who is responsible for the
account of such organization for the collection,
management, disbursement, custody or
control of the funds, moneys and other
properties of the organization, shall render to
the organization and to its members a true
and correct account of all moneys received
and paid by him since the last day on which
he rendered such account, and of all bonds,
securities and other properties of the
organization entrusted to his custody or under
his control. The rendering of such account
shall be made:
1. At least once a year within 30 days
after the close of its fiscal year.;
2. At such other times as may be
required by a resolution of the
majority of the members of the
organization; and
3. Upon vacating his office.
The account shall be duly audited and verified
by affidavit and a copy thereof shall be
furnished the Secretary of Labor.
m. The books of accounts and other records of
the financial activities of any labor org shall be
open to inspection by any officer or member
thereof during office hours;
n. No special assessment or other extraordinary
fees may be levied upon the members of a
labor org unless authorized by a written
resolution of a majority of all the members of
a general membership meeting duly called for
the purpose. The secretary of the org shall
record the minutes of the meeting including
the list of all members present, the votes cast,
the purpose of the special assessment or fees
and the recipient of such assessments or fees.
The record shall be attested to b the
president.
o. Other than for mandatory activities under the
Code, no special assessments, atty.’s 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 Ee. The
authorization should specifically state the
amount, purpose and beneficiary of the
deduction;
Art 274
Visitorial Power. –The Sec of Labor and
Employment or his duly authorized representative
is hereby empowered to inquire into the financial
activities of legitimate labor orgs upon filing of a
complaint under oath and duly supported by the
written consent of at least twenty (20%) per cent
of the total membership of the labor org concerned
an to examine their books of accounts and other
records to determine compliance or non-
compliance with the law and the union consti and
by-laws; Provided, That such inquiry or
examination shall not be conducted during the
sixty (60)-day freedom period nor within the thirty
(30) days immediately preceding the date of
election of union officials.
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SOURCE – PAYMENT – ATTORNEY’S FEES
Art. 222
Appearances and fees---a) Non-lawyers may
appear before he Commission or any Labor Arbiter
only:
1. If they represent themselves; or
2. If they represent their organization or
members thereof.
b) No attorney’s fees, negotiation fees or similar
charges of any kind arising from any collective
bargaining negotiations or conclusion of the
collective agreement shall be imposed on any
individual member of the contracting union;
Provided, however, That attorney’s 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.
[Cf. Art. 241 (n)]
Pacific Banking v Clave (!984)
Art 222 guarantees the protection of the Ee
against unwarranted practices that would diminish
his compensation without his knowledge and
consent. There is no doubt that the lawyer is
entitled to his fees but Art 222 ordains that such
must come from the Union funds.
The P14M constitutes the money of the Ees; it
is not union funds. Thus, the atty.’s fees should not
be deducted from the P14M, but from the existing
funds of the union. Furthermore, Presidential
executive assistant had no jurisdiction to make
such adjudication on the attorney’s fees. Case was
appealed to the OPRES with respect to the CBA
terms and conditions. Although the attorney’s fees
were a mere incident, fixing of the same was
outside Presidential executive assistant’s appellate
jurisdiction.
EXAMINATION OF BOOKS
Duyag v Inciong (1980)
Membership of Manalad and Puerto in another
union is a sufficient ground for their removal under
the constitution and by-laws of the union. His
organization of a family-owned corporation
competing with the union headed by him renders it
untenable that he should remain as union
president.
Manalad, Puerto and Leaño violated the rights
and conditions of membership in the union within
the meaning of article 242. Duyag et al are entitled
to the refund of the union dues illegally collected
from them.
The Director of Labor Relations erred in holding
that tenure of union officers, being a “political
question”, is a matter outside his Bureau’s
jurisdiction and should be passed upon by the
union members themselves. After hearing and
even without submitting the matter to the union
members, erring union officials may be removed
by the Director of Labor Relations as clearly
provided in article 242.
The Director should apply the law and not
make policy considerations. The labor officials
should not hesitate to enforce strictly the law
and regulations governing trade unions even if
Part III : Labor Organizations
Labor Relations
that course of action would curtail the so-called
union autonomy and freedom from government
interference. Labor officials should be vigilant and
watchful in monitoring and checking the
administration of union affairs. Director acted
correctly in ordering an examination of the books
and records of the union.
UNION DUES
Rodriguez v Director, BIR (1989)
Old union officers increased union dues from
P21-P50. The resolution was presented to the
general membership for ratification at a
referendum. Those who protested boycotted the
referendum but nevertheless union officers
declared the increase ratified by the referendum.
The resolution increasing the union dues must
be struck down, as illegal and void, arbitrary and
oppressive. It must be discontinued. Resolution of
the union’s Legislative Council does not bear the
signature of at least two-thirds (2/3) of the
members of the Council. Proof is wanting of proper
ratification of the resolution by a majority of the
general union membership at a plebiscite called
and conducted for that purpose. The dues
improperly collected must be refunded.
SOURCE – PAYMENT – SPECIAL ASSESSMENT
Art. 241
n. No special assessment or other extraordinary
fees may be levied upon the members of a
labor org unless authorized by a written
resolution of a majority of all the members of
a general membership meeting duly called for
the purpose. The secretary of the org shall
record the minutes of the meeting including
the list of all members present, the votes cast,
the purpose of the special assessment or fees
and the recipient of such assessments or fees.
The record shall be attested to b the
president.
o. Other than for mandatory activities under the
Code, no special assessments, atty.’s 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 Ee. The
authorization should specifically state the
amount, purpose and beneficiary of the
deduction;
Art. 222
Appearances and Fees.
a. Non-lawyers may appear before the
Commission or any Labor Arbiter only:
1. If they represent themselves; or
2. If they represent their organization or
members thereof.
b. No attorney’s fees, negotiation fees or similar
charges of any kind arising from any collective
bargaining agreement shall be imposed on any
individual member of the contracting union:
Provided, However, that attorney’s 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.
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Palacol v. Calleja (1990)
HELD: Deduction of the 10% special
assessment by the Union was not made in
accordance with the requirements provided by law.
Substantial compliance is not enough.
Employees’ express consent is required, and
must be obtained in accordance with the steps
outlined by law.
Under par (n), 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.
Secretary of the organization must record the
minutes of the meeting which, in turn, must
include the list of all the members present as well
as the votes cast.
Union held local membership meetings on
separate occasions, on different dates and at
various venues. It submitted only minutes of the
local membership meetings when what is required
is a written resolution adopted at the general
meeting.
Minutes of 3 of those local meetings held were
recorded by a union director and not by the union
secretary. The minutes contained no list of the
members present and no record of the votes cast.
Par. (o) requires an individual written authorization
duly signed by every employee in order that a
special assessment may be validly checked-off.
There can be no valid check-off considering
that the majority of the union members had
already withdrawn their individual authorizations.
A withdrawal of individual authorizations is
equivalent to no authorization at all. Documents
containing the disauthorizations have the
signatures of the union members. There is nothing
in the law which requires that the disauthorization
must be in individual form.
Only the collection of a special fund for labor
and education research is mandated. The two
other purposes, purchase of vehicles and other
items for the benefit of the union officers and the
general membership, and the payment of services
rendered by union officers should be supported by
the regular union dues, there being no showing
that the latter are not sufficient to cover the same.
The last stated purpose fall under Art. 222(b).
Art. 222(b) prohibits attorney’s fees, negotiations
fees and similar charges arising out of the
conclusion of a collective bargaining agreement
from being imposed on any individual union
member. The collection of the special assessment
partly for the payment for services rendered by
union officers, consultants and others may not be
in the category of “attorney’s fees or negotiations
fees.” It is an exaction which falls within the
category of a “similar charge,” and within the
coverage of the prohibition.
Gabriel v. Sec. Of Labor (2000)
Art. 241 has three requisites for the validity of the
special assessment for the unions incidental
expenses:
1) Authorization by written resolution of
majority of ALL the members at the
general membership meeting called for
that purpose
2) Secretary’s record of the minutes of the
meetings attested to by the president.
Part III : Labor Organizations
Labor Relations
3) Individual written authorization for check-
off duly signed by the employees
concerned.
ABS-CBN Supervisors Employees Union
Members V. ABS-CBN Broadcasting Corp
(1999)
After a thorough review of the records on
hand, we find that the 3 requisites for the validity
of the 10% special assessment for Union's
incidental expenses, attorney's fees and
representation expenses were met.
It can be gleaned that on July 14, 1989, the
Union held its general meeting, whereat it was
agreed that a 10% special assessment from the
total economic package due to every member
would be checked-off to cover expenses for
negotiation, other miscellaneous expenses and
attorney's fees. The minutes of the said meeting
were recorded by the Union's Secretary and noted
by its President.
On May 24, 1991, said Union held its General
Membership Meeting, wherein majority of the
members agreed that "in as much as the Union
had already paid Atty. P. Pascual the amount of
P500,000.00, the same must be shared by all the
members until this is fully liquidated."
85 members of the same Union executed
individual written authorizations for check-off.
There is then, the presumption that such check-off
authorizations were executed voluntarily by the
signatories thereto.
Petitioners further contend that Article 241 (n)
of the Labor Code, as amended, on special
assessments, contemplates a general meeting
after the conclusion of the CBA. Subject Article
does not state that the general membership
meeting should be called after the conclusion of a
CBA.
In BPIEU-ALU, the petitioners, impugned the
Order of the NLRC, holding that the validity of the
five percent (5%) special assessment for
attorney's fees is contrary to Art. 222, par(b) of
the Labor Code, as amended. The court
ratiocinated, thus:
"The Court reads the aforecited provision
as prohibiting the payment of attorney's
fees only when it is effected through
forced contributions from the workers
from their own funds a distinguished from
the union funds. The purpose of the
provision is to prevent imposition on the
workers of the duty to individually
contribute their respective shares in the
fee to be paid the attorney for his services
on behalf of the union in its negotiations
with the management.
However, the public respondent overlooked
the fact that in the said case, the deduction of the
stipulated 5% of the total economic benefits under
the new CBA was applied only to workers who
gave their individual signed authorizations. The
Court explained:
And significantly, the authorized deduction
affected only the workers who adopted
and signed the resolution and who were
the only ones from whose benefits the
deductions were made by BPI. No similar
deductions were taken from the other
workers who did not sign the resolution
and so were not bound by it."
The inapplicability of Palacol lies in the fact
that it has a different factual milieu from the
present case. In Palacol, the check-off
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authorization was declared invalid because
majority of the Union members had withdrawn
their individual authorizations. In this case, the
majority of the Union members gave their
individual written check-off authorizations for the
10% special assessment. And they have never
withdraw their individual written authorizations for
check-off.
Premises studiedly considered, we are of the
irresistable conclusion and, so find, that the ruling
in BPIEU-ALU vs. NLRC that
1) the prohibition against attorney's fees in
Art. 222, par (b) of the Labor Code
applies only when the payment of
attorney's fees is effected through forced
contributions from the workers; and
2) that no deductions must be taken from
the workers who did not sign the check-
off authorization, applies to the case
under consideration.
MANDATORY ACTIVITY
Art 241(o)
Other than for mandatory activities under the
Code, no special assessments, attys fees,
negotiation fees or any other extraordinary fees
may be checked off from any amount due to an EE
w/o an individual written authorization duly signed
by the EE. The authorization should specifically
state the amount, purpose and beneficiary of the
deduction; and
DEFINITION OF MANDATORY ACTIVITIES:
Judicial process of settling disputes laid down by
the law. Amicable settlements cannot be
considered as a mandatory activity.
Vengco v Trajano (1989)
HELD: Attorney’s fees may not be deducted or
checked off from any amount due to an employee
without his written consent except for mandatory
activities under the Code.
A mandatory activity has been defined as a
judicial process of settling dispute laid down by the
law.
Amicable settlement entered into by the
management and the union can not be considered
as a mandatory activity. Union filed a claim for
emergency cost of living allowance and other
benefits however, case never reached its
conclusion in view of the parties’ agreement. It is
not also shown that Atty. Benjamin Sebastian was
instrumental in forging the said agreement on
behalf of the union members.
This provision envisions a situation where
there is a judicial or administrative proceedings for
recovery of wages. Law allows a deduction for
attorney’s fees of 10% from the total amount due
to a winning party. Fringe benefits received by the
union members consist of back payments of their
unpaid emergency cost of living allowances which
are totally distinct from their wages. Allowances
are benefits over and above the basic salaries of
the employees. Such allowances are excluded from
the concept of salaries or wages. Penalty of
expulsion from the union presidency imposed upon
Timbungco is justified.
Part III : Labor Organizations
Labor Relations
CBA NEGOTIATIONS
Galvadores v Trajano (1986)
HELD: No check-offs from any amounts due
employees may be effected without individual
written authorizations duly signed by the
employees specifically stating the amount, purpose
and beneficiary of the deduction. The required
individual authorizations are wanting. Employees
are vigorously objecting.
Benefits awarded to PLDT employees still
formed part of the collective bargaining
negotiations although placed already under
compulsory arbitration.
This is not the “mandatory activity” under the
Code which dispenses with individual written
authorizations for check-offs. It is a judicial
process of settling disputes laid down by law.
Besides, Article 222 (b) does not except a
CBA, later placed under compulsory arbitration,
from the ambit of its prohibition.
UNION INFORMATION
Art. 241(p)
It shall be the duty of any labor organization and
its officers to inform its members on the provisions
of its constitution and by-laws, collective
bargaining agreement, the prevailing labor
relations system and all their rights and obligations
under existing labor laws.
Continental Cement Corp Labor Union v.
Continental Cement Corp (1990)
Company was engaged in the manufacture of
cement which is a vital industry in which a strike
or lockout is prohibited. The union members
engaged in a lock-out and strike. Even assuming
not engaged in a vital industry, the strike was
illegal. It was not in connection with any
unresolved economic issue in collective bargaining
which is the only ground for which a lawful strike
can be held as found in Section 7 of the Rules and
Regulations implementing PD 823. The issue
concerned merely the implementation of an
arbitration award of the NLRC. Union had a
remedy by applying for a writ of execution to
enforce that award. The strikers did violate the no-
strike policy. They repeatedly defied the orders of
the Director of Labor Relations.
Officers had the duty to guide their members
to respect the law. Instead, they urged them to
violate the law and defy the duly constituted
authorities. Their responsibility is greater than that
of the members.
Their (the officers) dismissal from the service
is a just penalty. It is within the power of the NLRC
to order the removal of the officers.
In Art. 242, it shall be the duty of any labor
organization and its officers to inform its members
on provisions of the constitution and by-laws,
collective bargaining agreement, the prevailing
labor relations system and all their rights and
obligations under existing labor laws.
Any violation of the above rights and
conditions shall be a ground for cancellation of
union registration or expulsion of an officer from
office. The officers misinformed the members and
led them into staging an illegal strike.
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ENFORCEMENT AND REMEDIES – PROCEDURE AND
SANCTIONS
Art. 241, last paragraph
Criminal and civil liabilities arising from violations
of above rights and conditions of membership shall
continue to be under the jurisdiction of ordinary
courts.
Department Order No. 40-03
Series of 2003
RULE XIII
ADMINISTRATION OF TRADE UNION FUNDS
AND ACTIONS
ARISING THEREFROM
Section 2. Visitorial power under Article 274.
- The Regional or Bureau Director may inquire into
 The financial activities of any legitimate
labor organization and
 Examine their books of accounts and
 Other records
To determine compliance with the law and the
organization's constitution and by-laws.
Such examination shall be made upon the filing of
a request or complaint for the conduct of an
accounts examination by
 Any member of the labor organization,
 Supported by the written consent of at
least twenty (20%) percent of its total
membership.
Section 3. Where to file. - A request for
examination of books of accounts of independent
labor unions, chartered locals and workers
associations pursuant to Article 274
 Shall be filed with the Regional Office that
issued its certificate of registration or
certificate of creation of chartered local.
A request for examination of books of accounts of
federations or national unions and trade union
centers pursuant to Article 274
 Shall be filed with the Bureau.
Such request or complaint, in the absence of
allegations pertaining to a violation of Article 241,
 Shall not be treated as an intra-union
dispute and
 The appointment of an Audit Examiner by
the Regional or Bureau Director shall not
be appealable.
Section 4. Actions arising from Article 241. -
Any complaint or petition with allegations of
mishandling, misappropriation or non-accounting
of funds in violation of Article 241
 Shall be treated as an intra-union dispute.
It shall be heard and resolved
 By the Med-Arbiter pursuant to the
provisions of Rule XI.
Section 5. Prescription. - The complaint or
petition for audit or examination of funds and book
of accounts shall prescribe
 Within three (3) years from the date of
submission of the annual financial report
to the Department or
Part III : Labor Organizations
Labor Relations
 From the date the same should have been
submitted as required by law, whichever
comes earlier.
JURISDICTION – EXHAUSTION INTERNAL REMEDIES
Villar v Inciong (1983)
PAFLU had the authority to investigate Villar et
al. When a labor union affiliates with a mother
union, it becomes bound by the laws and
regulations of the parent organization. It becomes
subject to the laws of the superior body under
whose authority the local union functions. The
constitution, by-laws and rules of the parent body,
together with the charter it issues pursuant thereto
to the subordinate union, constitute an enforceable
contract between the parent body and the
subordinate union. When members of a labor
union sow the seeds of dissension and strife within
the union. When they seek the disintegration and
destruction of the very union to which they belong.
They forfeit their rights to remain as members.
PAFLU acted when, after proper investigation and
finding of guilt, it decided to remove the oppositors
from the list of members of the Amigo Employees
Union-PAFLU.
REMEDY
Relief within the union8
Generally, redress must first be sought within the
union itself in accordance with the constitution and
by-laws. (Kapisanan ng mga Manggagawa sa MRR
v. Hernandez, 20 SCRA 109).
Exception:
1) Futility of intra-union remedies
2) Improper expulsion procedure
3) Undue delay in appeal as to constitute
substantial injutsice
4) When the action is for damages
5) Lack of jurisdiction of investigatin body
6) When the action of the administrative agency
is patently illegal, arbitrary and oppresive
7) When the issue involved is purely a question
of law
8) Where the administrative agtency has already
prejudged the case
9) Where the administrative agency was
practically given the oppurtunity to act on the
case but did not.
Kapisanan ng mga Manggagawa sa MRR v.
Hernandez (20 SCRA 109)
Where the exhaustion of remedies within the
union itslef would practically amount to a denial of
justice, or would be illusory or vain, it will not be
insisted upon, as a condition to the right to invoke
the aid of the court, aprticularly where the
property rights of the members are involved.
In the case at bar, the complaint was filed
against the union and it incumbent officer, some of
who were members of the board of directors. The
constitution and by-laws of the union provide that
charges for any violations thereof shall be filed
before the said board. Exhaustion of remedies here
would amount to denial of justice.
8
From Azucena vol. II page 157
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3.07 UNION AFFILIATION: LOCAL AND
PARENT UNION RELATIONS
DO No. 40-03
Series of 2003
RULE III
REGISTRATION OF LABOR ORGANIZATIONS
Section 7. Requirements of affiliation. - The
report of affiliation of independently registered
labor unions with a federation or national union
shall be accompanied by the following documents:
(a) resolution of the labor union's board of
directors approving the affiliation;
(b) minutes of the general membership
meeting approving the affiliation;
(c) the total number of members comprising
the labor union and the names of
members who approved the affiliation;
(d) the certificate of affiliation issued by the
federation in favor of the independently
registered labor union; and
(e) written notice to the employer concerned if
the affiliating union is the incumbent
bargaining agent.
RULE IV
PROVISIONS COMMON TO THE
REGISTRATION OF LABOR ORGANIZATIONS
AND WORKERS ASSOCIATION
Section 1. Attestation requirements. - The
application for registration of labor unions and
workers' associations, notice for change of name,
merger, consolidation and affiliation including all
the accompanying documents,
 shall be certified under oath by its Secretary
or Treasurer, as the case may be, and attested
to by its President.
Section 2. Payment of registration fee. - A
labor union and workers' association shall be
issued a certificate of registration upon payment of
the prescribed registration fee.
Section 8. Effect of registration. - The labor
union or workers' association shall be deemed
registered and vested with legal personality on the
date of issuance of its certificate of registration or
certificate of creation of chartered local.
Such legal personality may be questioned only
through an independent petition for cancellation of
union registration in accordance with Rule XIV of
these Rules, and not by way of collateral attack in
petition for certification election proceedings under
Rule VIII.
1. AFFILIATION: PURPOSE OF; NATURE OF
RELATIONS
Filipino Pipe & Foundry Corporation v. NLRC
(1999)
The mother union, acting for and in behalf of
its affiliate, had the status of an agent while the
local remained the basic unit of the association,
free to serve the common interest of all its
members subject only to restraints imposed by
the constitution and by the by-laws of the
association.
Part III : Labor Organizations
Labor Relations
The same is true even if the local is not a
legitimate labor organization.
Sugbuanon Rural Bank v. Laguesma (2000)
Locals are separate and distinct units primarily
designed to secure and maintain an equality of
bargaining power between the employer and their
employee-members in the economic struggle for
the fruits of the joint productive effort of labor and
capital.
Association of the locals into the national
union was in furtherance of the same end. These
associations are consensual entities capable of
entering into such legal relations with their
members. The essential purpose was the affiliation
of the local unions into a common enterprise to
increase by collective action the common
bargaining power in respect of the terms and
conditions of labor. Yet the locals remained the
basic units of association.
A local union maintains its separate
personality despite affiliation with a larger national
federation.
Tropical Hut v. Tropical Hut (1990)
The right of a local union to disaffiliate from its
mother federaton is well-settled. A local union,
being a SEPARATE and VOLUNTARY association, is
free to serve the interest of all its mebers including
the freedom to disaffiliate when circumstances
warrant. The right is consistent with the
constitutional guarantee of freedom of association.
Alliance v. Samahan (1996)
A local labor union is a separate and distinct
unit primarily designed to secure and maintain an
equality of bargaining power 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 fo agency where the former acts in
representation of the latter.
2. SUPERVISOR – RANK AND FILE UNION
AFFILIATION
RULE-AFFILIATION
Atlas Lithographic v Laguesma (1992)
The definition of managerial employees is
limited to those having authority to hire and fire
while those who only recommend effectively the
hiring and firing or transfers of personnel would be
considered as closer to rank and file employees.
The exclusion, therefor, of middle level executives
from the category of management employees
brought about a third classification, supervisory
employees, who are allowed to form their own
union but are not allowed to join the rank and file
union due to conflicts in interest.
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A local union of supervisory employees may be
allowed to affiliate with a national federation of
labor organizations of rank and file employees.
What the law prohibits is that supervisory
employees join a rank and file union.
The national federation would be representing the
respective interests of the 2 groups separately.
RATIONALE:
De la Salle Med v. Laguesma (1998)
The affiliation of 2 local unions in a company
with the same national federation is not by itself a
negation of their independence since in relation to
an employer, the local unions are considered as
the principal, while the federation is deemed as the
be merely an agent.
Adamson v CIR (1984)
Whether or not a supervisor's union may
affiliate with a federation with which unions of
rank-and-file employees of the same employer are
also affiliated?
Individuals employed as supervisors shall not
be eligible for membership in a labor organization
of employees under their supervision but may form
separate organizations of their own. The
supervisory employees of an employer cannot join
any labor organization of employees under their
supervision but may validly form a separate
organization of their own.
It can’t be construed that personalities of the
3 unions are so merged with the mother federation
that for one difference or another they cannot
pursue their own ways, independently of the
federation.
Adamson and Adamson Supervisory Union and
the Adamson and Adamson, Inc., Salesmen
Association (FFW), have their own respective
constitutions and by-laws. They are separately and
independently registered of each other. Both sent
their separate proposals for collective bargaining
agreements with their employer.
There is nothing in Industrial Peace Act which
provides that a duly registered local union
affiliating with a national union loses its legal
personality, or its independence. Locals are
separate and distinct units primarily designed to
secure and maintain an equality of bargaining
power between the employer and their employee-
members.
Locals remain the basic units of association,
free to serve their own and the common interest of
all. Inclusion of FFW in the registration is merely to
stress that they are its affiliates at the time of
registrations. It does not mean that said local
unions cannot stand on their own.
3. LOCAL UNION DISAFFILIATION
NATURE RIGHT DISAFFILIATION
Volkschel Labor Union v BLR (1985)
HELD: 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
Part III : Labor Organizations
Labor Relations
constitutional guarantee of freedom of association.
Valid reason for disaffiliation:
The disaffiliation was not due to any
opportunist’s motives but rather it was prompted
by the federation’s deliberate and habitual
dereliction of duties. Employees’ grievances were
allegedly left unattended to the detriment of the
employees’ rights and interests. The clear policy is
to conjoin workers and worker groups, not to
dismember them.
Effect of disaffiliaion on right of the federation to
receive dues:
ALUMETAL is entitled to receive the dues from
companies as long as union is affiliated with it and
companies are authorized by their employees to
deduct union dues. Without said affiliation, the
employer has no link to the mother union. The
obligation of an employee to pay union dues is
coterminous with his affiliation or membership.
A contract between an employer and the parent
organization as bargaining agent for the
employees is terminated by the disaffiliation of the
local.
Malayang Samahan v. Ramos (2000)
A local union has the right to disaffiliate from
its mother union or declare its autonomy. A local
union, being a separate and voluntary association,
is free to serve the interests of all its members
including the freedom to disaffiliate or declare its
autonomy from the federation to which it belongs
when circumstances warrant, in accordance with
the constitutional guarantee of freedom of
association.
The purpose of affiliation by a local union with
a mother union or a federation is to increase by
collective action the bargaining power in respect of
the terms and conditions of labor.
Yet the locals remained the basic units of
association, free to serve their own and the
common interest of all, subject to the restraints
imposed by the Constitution and By-Laws of the
Association, and free also to renounce the
affiliation for mutual welfare upon the terms laid
down in the agreement which brought it into
existence.
Thus, a local union which has affiliated itself
with a federation is free to sever such affiliation
anytime and such disaffiliation cannot be
considered disloyalty. In the absence of specific
provisions in the federation's constitution
prohibiting disaffiliation or the declaration of
autonomy of a local union, a local may dissociate
with its parent union.
Phil. Labor Alliance Council v. BLR (1977)
HELD It is indisputable that the present
controversy would not have arisen if there were no
mass disaffiliation from petitioning union. Such a
phenomenon is nothing new in the Philippine labor
movement. Nor is it open to any legal objection. It
is implicit in the freedom of association explicitly
ordained by the Constitution. There is then the
incontrovertible right of any individual to join an
organization of his choice. That option belongs to
him. A workingman is not to be denied that liberty.
He may be, as a matter of fact, more in need of it
if the institution of collective bargaining as an
aspect of industrial democracy is to succeed. No
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obstacle that may possible thwart the desirable
objective of militancy in labor’s struggle for better
terms and conditions is then to be placed on his
way.
Once the fact of disaffiliation has been
demonstrated beyond doubt, as in this case, a
certification election is the most expeditious way of
determining which labor organization is to be the
exclusive bargaining representative.
Parenthetically, it should be stated that a
certification election can still be held even if the
collective agreement were certified, considering
the peculiar facts of the case. Good policy and
equity demand that when an agreement is
renegotiated before the appointed 60-day period,
its certification must still give way to any
representation issue that may be raised within 60-
day period so that the right of employees to
choose a bargaining unit agent and the right of
unions to be chosen shall be preserved.”
Alex Ferrer vs NLRC (1993)
SAMAHAN and Occidental Foundry Corporation
(OFC) entered into a CBA effective for 3 years.
The CBA contained a union security clause. Due to
union politics, a resolution was passed by
SAMAHAN expelling Ferrer, et al. from the
SAMAHAN. Pursuant to the union security clause,
SAMAHAN asked OFC to expel Ferrer, et al.
What actually happened in this case was that
some members, including petitioners, tried to
unseat the SAMAHAN leadership headed by Capitle
due to the latter’s alleged inattention to members’
demands. The intra-union controversy was such
that petitioners even requested the FFW to
intervene to facilitate the enforcement of the said
wage increase.
Ferrer et al. sought the help of the FEDLU only
after they had learned of the termination of their
employment upon the recommendation of Capitle.
Their alleged application with federations other
than the FFW can hardly be considered as
disloyalty to the SAMAHAN, nor may the filing of
such applications denote that Ferrer et al. failed to
maintain in good standing their membership in the
SAMAHAN. The SAMAHAN is a different entity from
FFW, the federation to which it belonged. Neither
may it be inferred that Ferrer et al. sought
disaffiliation from the FFW for petitioners had not
formed a union distinct from that of the SAMAHAN.
Parenthetically, the right of a local union to
disaffiliate from a federation in the absence of any
provision in the federation’s constitution preventing
disaffiliation of a local union is legal Such right is
consistent with the constitutional guarantee of
freedom of association.
Hence, while Ferrer’s act of holding a special
election to oust Capitle, et al. may be considered
as an act of sowing disunity among the SAMAHAN
members, and, perhaps, disloyalty to the union
officials, which could have been dealt with by the
union as a disciplinary matter, it certainly cannot
be considered as constituting disloyalty to the
union.
Faced with a SAMAHAN leadership which they
had tried to remove as officials, it was but a
natural act of self-preservation that Ferrer et al.
fled to the arms of the FEDLU after the union and
the OFC had tried to terminate their
employment. Ferrer should not be made
accountable for such an act.
Part III : Labor Organizations
Labor Relations
RULE – LEGALITY ACT – DISAFFILIATION
Villar vs Inciong (1983)
Although, as a matter of principle, an affiliate
has the right to disaffiliate, this right must respect
the terms of the affiliation agreement.
Had petitioners merely disaffiliated from
Amigo Employees Union-Paflu, there could be no
legal objections thereto for it was there right to do
so. (This means that individual employees may
disaffiliate from a union where they belong.)
But what petitioners did by the very clear
terms of their “Sama-Samang Kapasiayahn” was
to dissafiliate Amigo-Employees Union-PAFLU
(local union) from PAFLU (federation or mother
union),an act they could NOT have done with any
effective consequence because they constituted
the MINORITY in the amigo employees-union
PAFLU. (By implication, this tells us that a local
union can disaffiliate from its mother union if a
majority of the local union decides to do so.)
Liberty Cotton Mills Workers Union vs. Liberty
Cotton Mills (1975)
Facts: A CBA was entered into by the
company and the union who was represented by
PAFLU (mother union). In the CBA a union security
clause was agreed upon. 32 of the 36 members of
the union disaffiliated from PAFLU. PAFLU asked
the company to dismiss or terminate all 32
employees.
HELD: In the CBA PAFLU has been recognized
as the sole bargaining agent for all the employees
of the Company. The PAFLU, acting for and in
behalf of its affiliate, had the status of an agent
while the local union remained the basic unit of the
association free to serve the common interest of
all its members including the freedom to
disaffiliate when the circumstances warrant.
This was clearly stated in its constitution and
by-laws which provided that Liberty Cotton Mills
Workers Union-PAFLU shall remain an affiliate as
long as ten (10) or more of its members evidence
their desire to continue the said local unions
affiliation. Only 4 out of its members remained.
The disaffiliation was valid under the local’s
Constitution and By-Laws. Hence, the dismissal
from employment was unjustified.
Philippine Skylanders, Inc. v. NLRC (2002)
In November 1993 the PSEA, a local labor
union affiliated with the PAFLU. In September,
PAFLU won in the certification election conducted
among the rank and file employees of PSI. Its rival
union, Philippine Skylanders Employees
Association-WATU (PSEA-WATU) immediately
protested the result of the election before the
Secretary of Labor.
Several months later, pending settlement of
the controversy, PSEA sent PAFLU a notice of
disaffiliation citing as reason PAFLU's supposed
deliberate and habitual dereliction of duty toward
its members.
PSEA subsequently affiliated itself with (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.
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Agitated by PSI's recognition of PSEA-NCW, PAFLU
through Serafin Ayroso filed a complaint for unfair
labor practice against PSI.
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?
Jurisdiction
At the outset, let it be noted that the issue of
disaffiliation is an inter-union conflict the
jurisdiction of which properly lies with the Bureau
of Labor Relations (BLR) and not with the Labor
Arbiter.
Nonetheless, with due recognition of this fact, we
deem it proper to settle the controversy at this
instance since to remand the case to the BLR
would only mean intolerable delay for the parties.
Right to disaffiliate
In the landmark case of Liberty Cotton Mills
Workers Union vs. Liberty Cotton Mills, Inc. 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.
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.
Effect of pendency of election protest
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 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.
It was entirely reasonable then for PSI to enter
into a CBA 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.
Legal personality
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. PAFLU might
have forgotten that as 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.
Part III : Labor Organizations
Labor Relations
PERIOD
Part IV : UNION SECURITY
Alliance of Nationalist Union v. Samahang
Generally, a labor union may disaffiliate from Hiring Continued Ground for
Employment Termination
the mother union to form a local or independent
Union Employees After some If they
union ONLY during the 60 day freedom period Shop have time, employee
immediately preceding expiration of CBA. access to employee does not join
EXCEPTION: Shift of allegiance of majority. labor must become the union
market. a member after a
 When to disaffiliate? Can be reasonable
General rule: a labor union may disaffiliate from hired even time, it will
the mother union to form a local or independent if not be grounds
union ONLY during the 60-day freedom period union for
immediately preceding the expiration of the CBA. member. termination
(Tanduay Distillery Labor Union v. NLRC 149 SCRA
After due
470 (1987)) process is
Exception: observed
Closed Employee Must be a If not a
Shop must member all member at
But even before the onset of the freedom become a through-out anytime,
disaffiliation may still be carried out, but such member at grounds for
disaffiliation must be effected by a majority of the the time of termination
members of the bargaining unit. (AWU v. NLRC) hiring
After due
This happens when there is a substantial shift in process is
allegiance on the part of the majority of the observed
members of the union. Maintenan Already a Must If disaffiliates
ce shop member at maintain from union,
the time of membership, grounds for
In such a case, however, the CBA continues to
hiring otherwise it termination
bind members of the new or disaffiliated and shall be a
independent union up to the CBA’s expiration date ground for After due
termination process is
 What is the effect of disaffiliation on observed
union dues?

A local union which has validly withdrawn from its
affiliation with the parent association and which
continues to represent the employees of an
employer is entitled to the check-off dues under a
collective bargaining contract.
Disini: A local union in a general sense acquires
its legitimacy by affiliating with a registered
federation or national union. Will such local lose its
legitimate status when it disaffiliates from the
mother union?
Suggested answer: No, as long as there is no
express prohibition in the charter certificate issued
by the National union or Federation. Right to
associate includes right to disassociate.
4.01 STATUTORY BASIS
Art. 248(e)
UNFAIR LABOR PRACTICE OF EMPLOYERS
 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.
 Nothing in this code or in any other law shall
stop the parties from requiring membership in
a recognized collective bargaining agent as a
condition for employment, EXCEPT those
employees who are already members of
ANOTHER UNION at the time of signing of the
collective bargaining agreement.

Art. 243
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.

4.02 RATIONALE-EMPLOYEE ACTION

Juat v. CIR (1965)

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Part IV : Union Security
Labor Relations
A closed shop agreement has been considered
as one form of union security whereby only union
members can be hired AND workers must remain
union members as a condition of continued
employment.
RATIONALE CLOSED SHOP: The requirement
for employees or workers to
become members of a union as a
condition for employment
redounds to the benefit and
advantage of said employees
because by holding out to loyal
members a promise of
employment in the closed-shop
the union wields group solidarity.
In fact it is said that the closed-
shop contract is the most prized
achievement of unionism.
 To whom is Closed-shop proviso of a CBA
applicable?
Closed-shop proviso of a collective bargaining
agreement entered into between an employer
and a duly authorized labor union is applicable
not only to the employer and a duly
authorized labor union is applicable NOT ONLY
to the
(1) Employees or laborers that are
employed AFTER the collective
bargaining agreement was entered
into.
(2) BUT ALSO to old employees who ARE
NOT members of any labor union at
the time the said collective
bargaining agreement was entered
into.
In other words, if an employee or laborer is
already a member of a labor union different from
the union that entered into a collective bargaining
agreement with the employer providing for a
closed-shop, said employee or worker cannot be
obliged to become a member of that union which
had entered into a CBA with the employer as a
condition for his continued employment.
Guijarno v. CIR (1973)
GENERALLY: a state may NOT compel ordinary
voluntary associations to admit thereto any given
individual, because membership therein may be
accorded or withheld as a matter of privilege.
EXCEPTION: The rule is qualified in respect of
labor unions holding a monopoly in the supply of
labor, either in a given locality, or as regards a
particular employer with which it has a closed-
shop agreement.
Consequently, it is well settled that such
unions are NOT entitled to arbitrarily excluded
qualified applicants for membership, and a closed-
shop provision would not justify the employer in
discharging, or a union in insisting upon the
discharge of, an employee whom he union thus
refuses to admit to membership, without any
reasonable ground thereof.
To further increase the effectiveness of labor
organizations, a closed-shop has been allowed.
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4.03 VALIDITY OF AGREEMENT AND
EFFECT ON FREEDOM OF CHOICE
Tanduay Distillery Labor Union V. NLRC
(1987)
This Court speaking thru Mr. Justice Labrador,
in Victorias Milling Co., Inc., v. Victorias-Manapla
Workers Organization ruled:
"Another reason for enforcing the closed-
shop agreement is the principle of sanctity
or inviolability of contracts guaranteed by
the Constitution. As a matter of principle the
provision of the industrial Peace Act
granting freedom to employees to organize
themselves and select their representative
for entering into bargaining agreements,
should be subordinated to the constitutional
provision protecting the sanctity of
contracts. We can not conceive how
freedom to contract, which should be
allowed to be exercised without limitation
may be subordinated to the freedom of
laborers to choose the organization they
desire to represent them. And even if the
legislature had intend ad to do so and made
such freedom of the laborer paramount to
the sanctity of obligation of contracts, such
attempt to override the constitutional
provision would necessarily and ipso facto
be null and void
The action of the respondent company in
enforcing the terms of the closed-shop agreement
is a valid exercise of its rights and obligations
under the contract. The dismissal by virtue thereof
cannot constitute an unfair labor practice, as it was
in pursuance of an agreement that has been found
to be regular and of a closed-shop agreement
which under our laws is valid and binding.
4.04 CONTRACT DRAFTING AND
INTERPRETATION OF PROVISION–
UNION SECURITY
Rizal Labor Union v. Rizal Cement Co. (1955)
In order for an employer to be bound under a
union security clause in the CBA, to dismiss an
employer for lack of or loss of union membership,
the stipulation must be so clear and unequivocal as
to leave absolutely no room for doubt. There must
be a provision that union members must be in
good standing to keep their job.
TAKE NOTE: Close shop and union shop
provisions are in principle valid and allowed by law.
BUT since their application necessarily involves the
surrender of a portion of a worker’s individual
freedom and could result in loss of his
employment. The terms of specific union clauses
should be construed strictly and doubts should be
resolved against their existence.
Manila Cordage Co. v. CIR (1977)
The CBA provides:
IV MAINTENANCE OF MEMBERSHIP
Both parties agree that all employees of the
COMPANY who are already members of the
UNION at the time of the signing of this
AGREEMENT shall continue to remain members
Part IV : Union Security
Labor Relations
of the UNION for the duration of this
AGREEMENT"
The foregoing stipulation, however, does not
clearly state that maintenance of membership 'in
the Manen Labor Union is a condition of continuous
employment in the Manila Labor Cordage
Company.
In order that the Manila Cordage Company
may be deemed bound to dismiss employees who
do not maintain their membership in the Union,
the stipulation to this effect must be so clear as to
leave no room for doubt thereon An undertaking of
this nature is so harsh that it must be strictly
construed and doubts must be resolved against the
existence of the right to dismiss.
Apparently aware of the deficiency of the
maintenance-of-membership clause, the petitioner
urges that the same should be construed together
with the "Whereas" provision of the contract which
reads: "WHEREAS, the parties hereto nave decided
to enter into an agreement relating to the terms
and conditions of employment and reference to
those employees to whom the provisions of this
AGREEMENT apply."
The said whereas' proviso neither refers to
tenure or duration of employment which is the
dispute in the case at bar but only to terms and
conditions of employment such as working hours,
wages, other benefits and privileges clearly
specified therein. We need not stretch our
imagination too far to know the difference between
or duration of employment from terms and
conditions of employment. Even with the
conjunctive interpretation, these two provisions
can not supplant the omission of said maintenance
of membership clause, let alone cure the defect of
the same.
To construe the stipulations above-quoted as
imposing as a condition to continued employment
in the Manila Cordage Company the maintenance
of membership in the Manco Labor Union is to
violate the natural and constitutional right of the
laborer to organize freely. Such interpretation
would be inconsistent with the constitutional
mandate that the State shall afford protection to
labor.
4.05 COVERAGE – WORKER INCLUSION
AND EXCLUSION
Art. 248 (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.
 Nothing in this Code or in any other law shall
stop the parties from requiring membership in
a recognized collective bargaining agent as a
condition for employment, except those
employees who are already members of
another union at the time of the signing of the
collective bargaining agreement.
o Employees of an appropriate
bargaining unit who are not members
of the recognized collective
bargaining agent may be assessed a
reasonable fee equivalent to the dues
and other fees paid by members of
the recognized collective bargaining
agent, if such non-union members
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accept the benefits under the
collective bargaining agreement:
o Provided, that the individual
authorization required under Article
242, paragraph (o) of this Code shall
not apply to the non-members of the
recognized collective bargaining
agent;
Guijarno v. CIR (1973)
The authoritative doctrine that a closed-shop
provision in a collective bargaining agreement is
not to be given a retroactive effect so as to
preclude its being applied to employees already in
the service is traceable to the leading case of
Confederated Son of Labor vs. Anakan Lumber Co.
A year later, in Freeman Shirt Manufacturing Co.,
Inc. vs. CIR, it was held that a closed-shop
agreement applies only to persons to be hired or to
employees who are not yet members of any labor
organization. It is inapplicable to those already in
the service who are members of another union.
There is nothing unusual in this Court's
adherence with remarkable consistency to the
basic doctrine that a closed-shop provision should
not be applied retroactively. The obligation was
imposed on the State, under the 1935
Constitution, to "afford protection to labor,
especially to working women and minors.
4.06 IMPLEMENTATION–OBLIGATION &
LIABILITIES
Carino v. NLRC (1990)
We believe that the Company should have
given petitioner Cariño an opportunity to explain
his side of the controversy with the Union.
Notwithstanding the Union's Security Clause in
the CBA, the Company should have reasonably
satisfied itself by its own inquiry that the Union
had not been merely acting arbitrarily and
capriciously in impeaching and expelling petitioner
Cariño.
It is OUR considered view that respondent
company is equally liable for the payment of
backwages for having acted in bad faith in
effecting the dismissal of the individual petitioners.
Bad faith on the part of respondent company may
be gleaned from the fact that the petitioner
workers were dismissed hastily and summarily. At
best, it was guilty of a tortious act, for which it
must assume solidary liability, since it apparently
chose to summarily dismiss the workers at the
union's instance secure in the union's contractual
undertaking that the union would hold it "free from
any liability" arising from such dismissal.
While respondent company, under the
Maintenance of Membership provision of the
Collective Bargaining Agreement, is bound to
dismiss any employee expelled by PAFLU for
disloyalty, upon its written request, this
undertaking should not be done hastily and
summarily. The company acted in bad faith in
dismissing petitioner workers without giving them
the benefit of a hearing.
We conclude that the Company had failed to
accord to petitioner Cariño the latter's right to
procedural due process. The right of an
employee to be informed of the charges against
him and to reasonable opportunity to present his
Part IV : Union Security
Labor Relations
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 CBA.
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 temptation of swift and
arbitrary expulsion from membership and hence
dismissal from his job.
IMPLICATION: Even if may union security clause,
due process is still necessary.
Sanyo Phil. Workers Union v. Canizares
(1992)
In the instant case, however, We hold that the
Labor Arbiter and not the Grievance Machinery
provided for in the CBA has the jurisdiction to hear
and decide the complaints of the private
respondents. While it appears that the dismissal of
the private respondents was made upon the
recommendation of PSSLU pursuant to the union
security clause provided in the CBA, We are of the
opinion that these facts do not come within the
phrase "grievances arising from the interpretation
or implementation of the CBA and those arising
from the interpretation or enforcement of company
personnel policies," the jurisdiction of which
pertains to the Grievance Machinery or thereafter,
to a voluntary arbitrator or panel of voluntary
arbitrators.
It need not be mentioned that the parties to a
CBA are the union and the company. Hence, only
disputes involving the union and the company shall
be referred to the grievance machinery or
voluntary arbitrators.
In the instant case, both the union and the
company are united or have come to an
agreement regarding the dismissal of private
respondents. No grievance between them exists
which could be brought to a grievance machinery.
The problem or dispute in the present case is
between the union and the company on the one
hand and some union and non-union members
who were dismissed, on the other hand.
The dispute has to be settled before an
impartial body. The grievance machinery with
members designated by the union and the
company cannot be expected to be impartial
against the dismissed employees. Due process
demands that the dismissed workers grievances be
ventilated before an impartial body. Since there
has already been an actual termination, the matter
falls within the jurisdiction of the Labor Arbiter.
4.07 FINANCIAL SECURITY
CHECK-OFF
Art. 113 b
No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages
of his employees except: for union dues, in cases
where the right of the worker of his union to
check-off has been recognized by the employer OR
authorized in writing by the individual worker
concerned.
CHECK-OFF:
1) Ordinary Union dues
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2) Extraordinary Fees, but can only be
made when authorized by individual
written authorization, duly signed by
each employee concerned.
Art. 241 m,n,o
m. The books of accounts and other records of the
financial activities of any labor org shall be
open to inspection by any officer or member
thereof during office hours;
n. No special assessment or other extraordinary
fees may be levied upon the members of a
labor org:
 unless authorized by a written
resolution
 of a majority of all the members
of a general membership
meeting
 duly called for the purpose.
The secretary of the org shall
record:
 the minutes of the meeting
 including the list of all members
present,
 the votes cast,
 the purpose of the special
assessment or fees and
 the recipient of such
assessments or fees.
The record shall be attested to by the
president. (No need to be under oath)
o. Other than for mandatory activities under the
Code,
no special assessments, atty.’s 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
ABS-CBN Supervisors Employees Union V.
ABS-CBN
A check-off is a process or device whereby the
employer, on agreement with the Union,
recognized as the proper bargaining
representative, OR on PRIOR authorization from its
employees, deduct union dues or agency fees from
the latter’s wages and remit them directly to the
union. Its desirability in a labor organization is
quite evident. It is assured thereby of CONTINOUS
FUNDING. As this Court has acknowledge, the
system of check-off is primarily for the benefit of
the Union and only indirectly, for the individual
employees.
The legal basis of check-off is found in statutes
or in contracts. The statutory limitation on check-
offs are found in Article 241 g : “No officer, agent,
or member of a labor organization shall collect any
fees, dues, or other contributions in its behalf or
make any disbursement of its money or funds
unless he is duly authorized pursuant to its
constitution and by-laws. etc. See also 241 m,n,o.
BAR QUESTION (1997 XI) 5%:
Atty. Facundo Veloso was retained by Welga
Labor Union to represent it in the collective
bargaining negotiations. It was agreed that Atty.
Veloso would be paid the sum of P20,000.00 as
Part IV : Union Security
Labor Relations
attorney’s fees for his assitance in the CBA non-union member accepts the benefit under the
negotiations. CBA…”
After the conclusion of the negotiations, Welga Take note: In the case of agency fee, individual
Labor Union collected from its individual members authorization not applied, or not required. This is
the sum of P100.00 each to pay for Atty. Veloso’s for practical reasons, because the law recognizes
fees and another sum of P100.00 each for services the extreme difficulty of imposing agency fee on
rendered by the union officers. Several members non-union members, more especially to members
of the Welga Labor Union approached you to seek of rival unions.
advice on the following matters: DO No.40-03 Series of 2003
(a) Whether or not the collection of the RULE XIII
amount assessed on the individual members ADMINISTRATION OF TRADE UNION FUNDS
to answer for the attorney’s fees was valid; AND ACTIONS
and ARISING THEREFROM
(b) Whether or not the assessment of
P100.00 from the individual members of the Section 1. Right of union to collect dues and
Welga Laborn Union for services rendered agency fees. - The incumbent bargaining agent
by the union officers in the CBA negotiations shall continue to be entitled to check-off and
was valid. collect dues and agency fees despite the pendency
Suggested Answer: of a representation case, other inter/intra-union
(a) The assessment of P100.00 from each union disputes or related labor relations disputes.
member as attorney’s fees – for union negotiation
is NOT valid. Basis Art. 222 b of the labor code.
(b) The assessment of P100.00 as negotiation
fees charged to each individual union member and
payable to union officers is also not valid, for the
same reason stated above.
Alternative Answer:
(a) The collection of the amount assessed on the
individual members to answer for attorney’s fees
would be valid if it was authorized by a written
resolution of a majority of all the members in a
general membership meeting called for the
purpose.
(b) The assessment of P100.00 from the individual
members of the Welga Labor Union for services
rendered by the union officers in the CBA
negotiations would be valid if it was authorized by
a written resolution of a majority of all the
members in a general membership meeting duly
called for the purpose. (Art. 241n)
DISINI:
Requisites so that special assessment for
union’s incidental expenses is valid

Article 241 speaks of three (3) requisites that must

be complied with in order that the special
assessment for Union’s incidental expenses,
attorney’s fees and representation expenses be
valid and upheld:
1. Authorization by a written of the majority
of all the members at the general meeting for that
purpose.
2. Secretary’s record of the meeting.
3. Individual written authorization for check-
off.

National Brewery and Allied Industries Labor

Union v. San Miguel Corporation (1963)
In this case the SC cited different reasons why
non-union members cannot be compelled to pay
agency fees but this case is overturned by Art. 248
e.

AGENCY FEE now has a statutory basis

Art. 248 e 2nd paragraph: “ …employees of an
appropriate bargaining unit who are not members
of the recognized collective bargaining agent mat
be assessed a reasonable fee equivalent to the
dues and other fees paid by members of a
recognized collective bargaining agent, if such

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Part V : Appropriate Bargaining Unit
Labor Relations
Part V : APPROPRIATE
BARGAINING UNIT
5.01 DEFINITION AND ROLE IN LAW
Art. 255
Exclusive bargaining representation and workers
participation in policy and decision-making [sec.
22 of RA 6715] –
The labor organization designated or selected by
the majority of the Employees in an appropriate
collective bargaining unit
 Shall be the exclusive representative of the
Employees in such unit
 For the purpose of collective bargaining.
However, an individual EE or group of Employees
shall have the right at any time to present
grievances to their ER.
Any provision of law to the contrary
notwithstanding, workers shall have the right,
subject to such rules and regulations as the SOLE
may promulgate,
 to participate in policy and decision-making
processes of the establishment where they are
employed in so far as said processes will
directly affect their RIGHTS, BENEFITS and
WELFARE.
For this purpose, workers and ERs may form
LABOR MGT COUNCILS;
 Provided, that the representatives of the
workers in such labor mgt councils shall be
elected by at least the majority of all
Employees in said establishment.
DO No. 40-03 series of 2003 Rule I
(d) "Bargaining Unit" refers to a group of
employees sharing mutual interests within a
given employer unit, comprised of all or less
than all of the entire body of employees in the
employer unit or any specific occupational or
geographical grouping within such employer
unit.
DISINI: What is the function of an appropriate
bargaining unit?
1. To act as a SOVEREIGN in relation to the CE and
CBA
2. It is an ELECTORAL DISTRICT. It marks the
boundaries of those who may participate in a
certification election.
3. It is an Economic Unit.
From the reading of article 255: its function is to
select or designate a labor organization to represent
them in collective bargaining.
Belyca Corp. vs Calleja (1988)
A proper bargaining unit:
 is a group of employees of a given
employer comprised of all or less than all
of the entire body of employees,
 which the collective interests of all the
employees, consistent with equity to the
employer, indicate to be best suited to
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serve reciprocal rights and duties of the
parties.
To determine proper bargaining unit,
consider,
a) will of the employees (Globe doctrine),
b) affinity and unity of employees’ interest such as
similarity of work, duties and salary,
c) prior collective bargaining history and d)
employment status.
The ultimate test of proper grouping is
substantiality of mutuality of interest.
It must be determined whether or not such
grouping will best assure to the employees the
exercise of their collective bargaining rights.
Thus, the employees of Belyca cannot be
grouped together in one single union. They differ in
working conditions, hours of work, rates of pay, ad
employment status.
5.02 DETERMINATION OF APPROPRIATE
BARGAINING UNIT
1. FACTORS
IN GENERAL
UP v. Ferrer-Calleja (1992)
HELD: A bargaining unit is a group of
Employees, comprised of all or less than all of the
entire body of Employees, which the collective
interest of all the Employees, consistent w/ equity
to the ER, indicate to be the best suited to serve
the reciprocal rights & duties of the parties under
the CB provisions of the law.
In Democratic Labor Assoc v. Cebu
Stevedoring Co., there are factors w/c must be
satisfied & considered in determining the PROPER
UNIT.
Rothenberg mentions:
1) Will of the Employees,
2) Affinity & unity of Employees interest,
such as substantial similarity of works and
duties or similarity of compensation &
working conditions,
3) Prior CB history and
4) Employment status i.e. temporary,
seasonal, & probationary Employees.
The TEST of grouping is COMMUNITY or
MUTUALITY of INTERESTS because the basic test
of an asserted bargaining unit’s ACCEPTABILITY is
won it is fundamentally the combination w/c will
best assure to all Employees the exercise of their
CB rights.
Note: This is related to the policy of the law in
ensuring the right to collective bargain.
DISINI:The law is looking only for what is
PROPER OR APPROPRIATE. The law is NOT looking
for the best.
RATIONALE OF THE COMMUNITY OR
MUTUALITY OF INTEREST TEST:
Greater chance of success for the collective
bargaining process.
Part V : Appropriate Bargaining Unit
Labor Relations
Illustration of Prof.: A group of rank and file of old
employees can be separated from a rank and file
of young employees, especially if the issues
involve in the collective bargaining would be to
choose between salary raise or a pension plan.
The two groups do not have the same interest,
thus it will be harder for them to bargain.
An enlightening appraisal of the problem of
defining an appropriate bargaining unit is given in
the 10th Annual Report of the National Labor
Relations Board wherein it is emphasized that the
factors which said board may consider and weigh
in fixing appropriate units are:
1. The history , extent and type of
organization of employees.
2. The history of their collective bargaining
3. The history, extent and type of
organization of employees in other plants
of the same employer, or other employers
in the same industry;
4. The skill, wages, work and working
conditions of the employees;
5. The desires of the employees;
6. The eligibility of the employees for
membership in the union or unions
involved
7. The relationship between the units or
units proposed and the employer’s
organization, management, and
operation.
In said report, it is likewise emphasized that
the basic test in determining the appropriate
bargaining unit is that a unit, to be appropriate
must affect a grouping of employees who have
substantial, mutual interests in wages, hours,
working conditions and other subjects of collective
bargaining.
Example of application of community of mutual
interest test:
Casual employees were barred from joining union
of the permanent and regular employees.
“Certainly, there is mutuality of interest
among the employees of the sawmill division and
the Logging Division. Their functions mesh with
one another. One group needs the other in the
same way that the company needs them both.
There may be DIFFERENCE as to the nature of
their individual assignments but the distinctions
are not enough to warrant the formation of a
separate bargaining unit.”
In CAB, the university Employees may be
categorized into 2 GEN CLASSES: non-academic
and academic Employees. Thus, there is an
absence of community of interests w/c justifies the
formation of a single CB unit. Teachers would find
very little in common w/ the non-academic
Employees as regards the responsibilities &
functions, working conditions, compensation rates,
social life and interests, the dissimilarity in the
nature of the works & duties. Thus, SEPARATION
of these 2 categories is needed for CB purposes.
ELEMENTS OF AN APPROPRIATE
BARGAINING UNIT:
1. COMPOSITION
* All or less than all of the entire body of
employees
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2. EQUITY
* Of employees: A.k.a = “Collective interest of
employees” consistent with the equity of the
employer.
3. PURPOSE
* “to serve the reciprocal rights & duties of the
parties under the CB provisions of the law.”
HISTORY
San Miguel Corp. v. Laguesma (1994)
HELD: Prior collective bargaining history is not
conclusive or determinative of what constitutes the
appropriate bargaining unit.
The test of grouping is mutuality or
commonality of interest.
The Employees sought to be represented by
CB agent must have substantial mutual interests in
terms of employment and working conditions as
evinced by the type of work they perform.
There is similarity of employment status for all
sales personnel. They have the same duties,
responsibilities, compensation and working
conditions.
SMA can’t insist that each sales office should
constitute one bargaining unit. There is meager
number of sales personnel in each sales office.
Even the whole bargaining unit sought to be
represented only consists of 55 employees. It
would not be for the best interest to fractionalize
them further. It is not the convenience of the
employer that constitutes the determinative factor
in forming the bargaining unit.
DISINI:
Ratio of historical theory: if it worked well
before in the past it will work well again now.
Can you have a permanent bargaining unit?
No. An appropriate bargaining unit depends on the
factors that are influenced by the market place.
The bargaining unit is designed to maintain the
mutuality of interest among the employees in such
unit. Thus a reason to dissolve, change or expand
a certain bargaining unit is when THE INTEREST
BETWEEN GROUPS HAS CHANGED OVER TIME.
GEOGRAPHY – LOCATION
Benguet Consolidated Inc. and Balatok Mining
Co. v. Bobok Lumberjack Assn. (1958)
HELD: The court below is correct in concluding
that the system of having one collective bargaining
unit for each camp should be maintained and
continued for the following reasons: Such system
had operated satisfactorily.
The prime element in determining whether a
given group of employees constitute a proper
bargaining unit is whether it will, without inequity
to the employer, best serve all employees in the
exercise of their bargaining rights.
In the present case the separation between
the camps and the different kinds of work in each
all militate in favor of the present system of
separate bargaining units since the problems and
interest of the workers are peculiar in each
camp or department.
CORPORATE ENTITIES
Part V : Appropriate Bargaining Unit
Labor Relations
7. Lastly it is grave abuse of discretion to treat
Indophil Textile Mills Workers Union v. Calica 2 companies as a single bargaining unit
(1992) when these 2 companies are indubitably
FACTS: The Indophil Textile Mills Workers distinct entities with separate juridical
Union and Indophil Textile executed a CBA which personalities.
provided that the CBA shall apply to the company’s
extensions and expansions. Indophil Acrylic San Miguel ..Union v. Confesor (1996)
(WHICH IS ANOTHER COMPANY) was formed. Its
San Miguel Corporation was originally one
workers unionized and another CBA was executed.
company composed of four operating divisions
Indophil Textile Mills Workers Union claimed that
namely: 1. beer, 2. packaging, 3. magnolia, 4.
Acrylic should be considered an extension of
feeds and livestock. San Miguel Corporation
Indophil textile and therefore the CBA executed by
employees for ALL DIVSIONS were represented by
Indophil textile and the Union should cover
San Miguel Corp employees union-PTGWO. San
Indophil Acrylic.
Miguel underwent a restructuring. As a
ISSUE: WON the operation in INDOPHIL
consequence of this Magnolia and Feeds &
ACRYLIC are extension or expansion of Indophil
livestock Division were spun-off and became two
Textile Mills.
separate and distinct corporation.
HELD: Indophil ACRYLIC is NOT an extension of
ISSUE: WON the employees of the two new
INDOPHIL TEXTILE. Thus the CBA of Indophil
corporations (Magnolia Corp & San Miguel Foods)
textile, cannot apply to Indophil Acrylic.
should still remain in the same bargaining unit and
1. The existence of a bonafide business
be included I the old bargaining unit of the old
relationship between Acrylic and Indophil
SMC?
Textile is not a proof of being a single
HELD: No. Employees in the Magnolia
corporate entity because the services which
Corporation and San Miguel Foods may form a
are supposedly provided by Textile to
separate bargaining unit.
Acrylic are AUXILIARY SERVICES or
1. The transformation of the companies was a
activities which are NOT ESSENTIAL in the
management prerogative and business
actual production of Acrylic. The essential
judgment which the courts cannot look
services are discharged exclusively by
into unless it is contrary to law, public
Acrylic personnel under the control and
policy or morals. Neither can we impute
supervision of Acrylic managers and
any bad faith on the part of SMC to justify
supervisors.
the application of the doctrine of piercing
2. Diatagon Labor Federation v. Ople GR L-
the corporate veil.
44493-94 (1980) :” two corporations cannot
2. Each of the companies are run by,
be treated as single bargaining units even if
supervised and controlled by different
their businesses are related. It submits that
management terms including separate
the fact that there are as many bargaining
human resource/personnel managers.
units as there are companies in a
Each company enforces its own
conglomeration of companies is a positive
administrative and operational rules. Each
proof that a corporation is endowed with a
entity maintains separate financial
legal personality DISTINCTLY ITS OWN,
statements and are audited separately
independent and separate from other
from each other.
corporations.
3. No mutuality of interest anymore between
3. Unlike Indophil Textile, Indophil Acrylic
corporations: Considering the spin-offs,
cannot manufacture textile while Indophil
the companies would consequently have
Textile Cannot buy or import yarn. Thus this
their respective and distinctive concerns
shows that Indophil Acrylic is not an alter
in terms of the nature of work, wages,
ego or an adjunct or business conduit of
hours of work and other conditions of
Indophil Textile because it has a separate
employment. Interests of employees in
legitimate purpose.
the different companies perforce differ.
4. Under the doctrine of piercing the corporate
SMC is engaged in the business of beer
veil, when valid grounds exist, the legal
manufacturing. Magnolia is involved in the
fiction that a corporation is an entity with a
manufacturing and processing of dairy
juridical personality separate and distinct
products while SMFI is involved in the
from another may be disregarded. Doctrine
production of feeds and processing
applies when the fiction defeats public
chicken.
convenience,, justifies wrong, protects fraud
4. The nature of their products and scales of
or defends crime.
business may require different skills which
5. The fact that the businesses are related,
must necessarily be commensurate by
that some of the employees are the same
different compensation packages. The
persons working in the other company and
different companies may have different
the physical plants, offices and facilities are
volumes of work and different working
in the same compound aren’t sufficient to
conditions. For such reason, the
pierce the corporate veil of Acrylic.
employees of the different companies see
6. In Umali vs CA, legal corporate entity is
the need to group themselves together
disregarded only if it is sought to hold the
and organized themselves into distinctive
officers and stockholders directly liable for a
and different groups.
corporate debt or obligation. The union in
this case does not seek to impose a claim
on the members of Acrylic. Take note: “The fact that their businesses are
related and that the 236 employees of Georgia
Pacific International Corporation were originally

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Part V : Appropriate Bargaining Unit
Labor Relations
employees of Lianga Bay Logging Co. Inc. is not a employment and working conditions as evinced by
justification for disregarding their separate the type of work they perform. There is similarity
personalities. Hence, the 236 employees, who are of employment status for all sales personnel. They
now attached to Georgia Pacific International have the same duties, responsibilities,
Corporation, should not be allowed to vote in the compensation and working conditions.
certification election at the Lianga Bay Logging
Corporation, Inc. They should vote at a separate 2. UNIT SEVERANCE AND THE GLOBE
certification election to determine the collective DOCTRINE
bargaining representative of the employees of
Georgia Pacific International Corporation.”
INDUSTRIAL/CRAFTS UNION
MANAGEMENT
Kapisanan ng mga Manggagawa sa Manila
Road Co. v. Yard Crew Union (1960)
Phil. Scouts Veterans v. Torres (1993)
HELD: Because of modern complexities of
This case involved three companies (PSVSIA,
relations b/w employer & union structure, it
GVM, & ASDA) and only one union (UFW).
becomes difficult to determine from the evidence
ISSUE: Whether or not a SINGLE petition for
alone which of the several claimant groups forms
certification election or for recognition as the SOLE
proper bargaining unit. It becomes necessary to
and EXCLUSIVE bargaining agent can validly or
give considerations of the express desire or will of
legally be filed by a labor union in three (3)
the Employees. called the GLOBE DOCTRINE.
corporations each of which has a separate and
This is the practice of the courts to hold a
distinct legal personality instead of filing three (3)
series of elections not for the purpose of granting
separate petitions?
the right of representation to the group garnering
HELD: Yes.
the majority vote but to let employees select on
1. The securities agencies concerned (PSVSIA,
several units to represent them. (Remember: this
GVM, & ASDA) do not exist and operate
is different from a certification election) Factors
separately and distinctly from each other with
which may be considered are history, extent and
different corporate directions and goals. All
type of organization of employees, the history of
the cross-linking of the three agencies’
CB, etc.. This is keeping with the court’s right to
command, control and communication
investigate fully in matters concerning certification
systems indicate their unitary corporate
elections.
personality.
Plebiscite is not to be conducted by the DOLE
a. The security agencies are managed
but by the Court itself. Since this is an
through the Utilities Management
interlocutory order, certiorari is not proper. The
Corporation with all of their employees
claim raised by Kapisanan would only be
drawing their salaries and wages from
entertained on appeal and only after the CIR has
said entity.
ruled on the matter.
b. Agencies have common and interlocking
incorporators and officers.
Mechanical Dep’t Labor Union v CIR (1968)
c. PSVSIA, GVM and ASDA employees have
In view of its findings and the history of union
a single Mutual Benefit System and
representation in the railway company, indicating
followed a single system of compulsory
that bargaining units had been formed through
retirement.
separation of new units from existing ones
d. No explanation was given why the
whenever plebiscites had shown the workers’
security guards of one agency could
desires to have their own representatives, and
easily transfer from one agency to
relying on the “globe doctrine” the employees in
another and then back again by simply
the Caloocan shop should be given a chance to
filling-up a common pro forma slip called
vote on whether their group should be separated
"Request for Transfer".
from that represented by the mechanical
e. PSVSIA, GVM and ASDA always hold
department labor union, and ordered a plebiscite
joint yearly ceremonies such as the "PGA
held for that purpose.
Annual Awards Ceremony".
Technically, the appeal was premature since
f. In emergencies, all PSVSIA Detachment
the result of the ordered plebiscite may be
Commanders were instructed in a
adverse to the creation of a separate bargaining
memorandum to get in touch with the
unit-- however, MDLU seems to have conceded
officers not only of PSVSIA but also of
that the results would favor separation.
GVM and ASDA.
Plebiscite may be held to determine WON the
2. Veil of corporate fiction should be lifted for the
Employees w/in the dept do want a separate
purpose of allowing the employees of the
bargaining agent. The CIR found basic differences
three agencies to form a single labor union.
b/w those in the Rolling Stocks (i.e. Caloocan
Employees need not file three separate
shops) and those of the others. Those in the
petitions for certification election. All of these
Caloocan shops have a community of interests
could be covered in a single petition.
and working conditions. They also perform major
repairs of railway rolling stock; the other units do
San Miguel Corp. v. Laguesma (1994)
only minor repairs. Also, the workers in Caloocan
HELD: Prior collective bargaining history is not
require special skills in the operation of heavy
conclusive or determinative of what constitutes the
equipment, the others do not. Hence, the GLOBE
appropriate bargaining unit. The test of grouping is
DOCTRINE properly applies.
mutuality or commonality of interest. The
Bargaining units had been formed through
Employees sought to be represented by CB agent
separation of new units from existing ones
must have substantial mutual interests in terms of

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Part V : Appropriate Bargaining Unit
Labor Relations
whenever plebiscites had shown the worker’s
desire to have their own representatives.
DISINI: A brief explanation of the GLOBE
DOCTRINE
It is best explained in the context of a market
place and the demand of employment on such
market place. The GLOBE DOCTRINE usually
applies to employees with rare skills or highly
technical ones.
Example given: Case of Pilots and Stewardess.
If ,originally, pilots and stewardesses
belong to ONE bargaining unit (unit A) for the
purpose of collective bargaining, with the use of
the GLOBE DOCTRINE a plebiscite can be held to
determine if the pilot employees would want to
form a separate bargaining unit (unit B).
Illustration:
Unit A (original bargaining unit) : 100 Pilots + 200
Stewardesses = 300 employees
Unit B (proposed new unit): Pilots = 100
employees.
Those in unit B (100 pilots) will vote in a
plebiscite. Their choices will be
(1) To vote for Unit A: this would mean
that they do not wish to separate from the original
bargaining unit.
(2) To vote for Unit B: This would mean
that they would want to form their OWN
bargaining unit, composed of pilots only.
(3) Neither: They do not want the choices
If you have one BIG bargaining unit, most
probably you are grouping together DIFFERENT
SKILLED workers.
Rationale of the Globe Doctrine: highly skilled
workers have to separate to increase their market
value.
Under the Globe Doctrine, will of the employees is
the determinative factor.
3. SIZE OF UNIT AND EFFECT ON RIGHT TO
SELF-ORGANIZATION
Filoil Refinery Corp. v Filoil Supervisory and
Confidential Employees Union (1972)
ISSUE: The right of supervisors and
confidential employees to organize a labor
association and to bargain collectively with their
employer.
HELD: Since the confidential employees are
very few in number and are by practice and
tradition identified with the supervisors in their
role as representatives of management vis-à-vis
the rank and file employees, such identity of
interest has allowed their inclusion in the
bargaining of supervisors for purposes of collective
bargaining in turn as employees in relation to the
company as their employer.
This identity of interest logically calls for their
inclusion in the same bargaining unit and at the
same time fulfills the law’s objective of insuring to
them the full benefit of their right to self-
organization and to collective bargaining, which
could hardly be accomplished if the respondent
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association’s membership were to be broken up
into five separate ineffective tiny units.
Creating fragmentary units would not serve
the interest of industrial peace. The breaking up of
bargaining units into tiny units will greatly impair
their organizational value.
Since the confidential employees are very few
and are identified with the supervisors in their role
as representatives of management vis-a-vis the
rank and file employees, such identity of interest
has allowed their inclusion in the bargaining unit of
supervisors-managers for purposes of collective
bargaining. Industrial court enjoys a wide
discretion in determining the procedure necessary
to insure the fair and free choice of bargaining
representations by employees. Action in deciding
upon an appropriate unit for collective bargaining
purposes is discretionary. Its judgment is entitled
to finality, unless its action is arbitrary or
capricious.
SUPERVISOR UNIT
Dunlop Slazenger v. NLRC (1998)
Supervisors can be an appropriate bargaining
unit.
4. EFFECT OF PRIOR AGREEMENT
General Rubber & Footwear Corp. v BLR,
(1987)
HELD: Monthly paid Employees are not
managerial. The supervisory power of such
Employees consists merely in recommending as to
what managerial actions to take in disciplinary
cases.
They DO NOT FIT into the definition of
managerial Employees laid down in Bulletin
Publishing Corp v. Sanchez. Thus, they are NOT
PROHIBITED from forming a union. It hasn’t been
shown that their responsibilities require the
exercise of discretion and independent judgment or
that they possess power and authority to lay down
or exercise management policies.
The proliferation of unions in an employer unit
is discouraged as a matter of policy unless there
are compelling reasons which would deny a certain
class of employees the right to self-organization for
purposes of collective bargaining. This case does
not fall squarely within the exception.
Monthlies who are rank-and-file have been
historically excluded from the bargaining unit
composed of daily-paid rank-and-filers. It is
unusual to have to deal with 2 collective bargaining
unions but there is no one to blame for creating
the situation. General had sought to
indiscriminately suppress the members right to
self-organization. Exclusion of the members from
the bargaining union of the rank-and-file or from
forming their own union was agreed upon by
corporation with the previous bargaining
representatives.
However, it can never bind subsequent
federations and unions because it is a curtailment
of the right to self-organization guaranteed by the
labor laws. Monthly-paid rank-and-file
employees should be allowed to join the union
of the daily-paid-rank-and-file employees so
Part V : Appropriate Bargaining Unit
Labor Relations
that they can also avail of the CBA benefits or to judgment is entitled to finality, unless its action is
form their own rank-and-file union, without arbitrary or capricious.
prejudice to the certification election that has been
ordered.
5.04 EXCLUSIVE BARGAINING
DLSU v. DLSUEA (2000)
REPRESENTATIVE AND INDIVIDUAL
The University's arguments on the first issue
fail to impress us. The Court agrees with the UNION MEMBER
Solicitor General that the express exclusion of the
computer operators and discipline officers from the Art. 255
bargaining unit of rank-and-file employees in the Exclusive bargaining representation and workers’
1986 collective bargaining agreement does not bar participation in policy and decision-making. The
any re-negotiation for the future inclusion of the labor organization designated or selected by the
said employees in the bargaining unit. During the majority of the employees in an appropriate
freedom period, the parties may not only renew collective bargaining unit shall be the exclusive
the existing collective bargaining agreement but representative of the employees in such unit for
may also propose and discuss modifications or the purpose of collective bargaining. However, an
amendments thereto. individual employee or group of employees shall
With regard to the alleged confidential nature have the right at any time to present grievances to
of the said employees' functions, after a careful their employer.
consideration of the pleadings filed before this
Court, we rule that the said computer operators Any provision of law to the contrary
and discipline officers are not confidential notwithstanding, workers shall have the right,
employees. As carefully examined by the Solicitor subject to such rules and regulations as the
General, the service record of a computer operator Secretary of Labor and Employment may
reveals that his duties are basically clerical and promulgate, to participate in policy and decision-
non-confidential in nature. As to the discipline making processes of the establishment where they
officers, we agree with the voluntary arbitrator are employed insofar as said processes will directly
that based on the nature of their duties, they are affect their rights, benefits and welfare. For this
not confidential employees and should therefore be purpose, workers and employers may form labor-
included in the bargaining unit of rank-and-file management councils: Provided, That the
employees. representatives of the workers in such labor-
The Court also affirms the findings of the management councils shall be elected by at least
voluntary arbitrator that the employees of the the majority of all employees in said
College of St. Benilde should be excluded from establishment.
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.

5.03 DETERMINING AGENCY

Art. 232
Prohibition on Certification Election
[sec. 15 of RA 6715]
The Bureau shall not entertain any petition for
certification election or any other action which
may disturb the administration of duly registered
existing collective bargaining agreements
affecting the parties EXCEPT under Art. 253, 253-
A and 256 of this Code (60 day freedom period)

AGENCY AND FINALITY ORDER

Filoil Refinery Corp. v Filoil Supervisory and

Confidential Employees Union (1972)
Industrial court enjoys a wide discretion in
determining the procedure necessary to insure the
fair and free choice of bargaining representations
by employees, and that its action in deciding upon
an appropriate unit for collective bargaining
purpose is discretionary and that its judgment in
this respect is entitled to almost complete finality,
unless its action is arbitrary or capricious and that
absent any grave abuse of discretion as to justify
the Court’s intervention.
Action in deciding upon an appropriate unit for
collective bargaining purposes is discretionary. Its

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Part VI : Union Representation Establishing Union Majority Status
Labor Relations
Part VI : UNION REPRESENTATION
ESTABLISHING UNION MAJORITY
STATUS
 What are the difference between consent
election, certification election and run-off
election?
Department Order No. 40-03
Series of 2003
Rule I
(h) "Certification Election" or "Consent Election"
refers to the process of determining through secret
ballot the sole and exclusive representative of the
employees in an appropriate bargaining unit for
purposes of collective bargaining or negotiation.
A certification election
 Is ordered by the Department,
While a consent election
 Is voluntarily agreed upon by the parties,
with or without the intervention by the
Department.
(ss) "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 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.
Warren Manufacturing Workers Union vs. The
Bureau Of Labor Relations (1988)
Petitioner: The holding of a certification
election at the bargaining unit is patently
premature and illegal because of the one-year no
certification election rule and the principle of the
Contract Bar Rule.
This contention is untenable.
The records show that petitioner admitted that
what was held on August 25,1985 at the
Company's premises and which became the root of
this controversy, was a consent election and not a
certification election.
Distinguish Consent Election and Certification
Election
As correctly distinguished by private
respondent, a consent election:
 Is an agreed one,
 Its purpose being merely to determine the
issue of majority representation of all the
workers in the appropriate collective
bargaining unit
While a certification election
 Is aimed at determining the sole and
exclusive bargaining agent of all the
employees in an appropriate bargaining
unit for the purpose of collective
bargaining.
From the very nature of consent election,
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 It is a separate and distinct process and
has nothing to do with the import and
effect of a certification election.
 Neither does it shorten the terms of an
existing CBA nor entitle the participants
thereof to immediately renegotiate an
existing CBA although it does not preclude
the workers from exercising their right to
choose their sole and exclusive bargaining
representative after the expiration of the
sixty (60) day freedom period.
It is clearly understood that the certified union
in the said projected election shall respect and
administer the existing CBA at the company until
its expiry date on July 31, 1986.
It is, therefore, unmistakable that the election
thus held on August 25, 1985 was not for the
purpose of determining which labor union should
be the bargaining representative in the negotiation
for a collective contract, there being an existing
collective bargaining agreement yet to expire on
July 31, 1986; but only to determine which labor
union shag administer the said existing contract.
CERTIFICATION ELECTION
 What is the PURPOSE of a certification
election?
It is a means of determining the worker’s choice
of:
1) Whether the want a union to represent
them for collective bargaining OR they
want NO union to represent them at all.
2) And if they choose to have a union
represent them, they will choose WHICH
among the contending union will be the
SOLE and EXCLUSIVE bargaining
representative of the employees in the
appropriate bargaining unit.
1st Level of Choice: Yes Union or No Union
2nd Level of Choice: If “Yes Union” wins,
WHICH union.
UST Faculty Union v. Bitonio (1999)
“Specifically, the purpose of a certification
election is to ascertain whether or not a majority of
the employees (1) wish to be represented by a
labor organization and (2) by which particular labor
organization.”
BACKGROUND POLICIES AND CHARACTERISTICS
BEHIND A CERTIFICATION ELECTION
1. It is not litigation, but a mere investigation of
a non-adversary character
2. It is most DEMOCRATIC and most efficacious/
effective way (Samahang manggagawa sa
permex case) and it is a STATUTORY POLICY
(Belyca Corp. v. Ferrer-Calleja)
3. There can be no direct certification
4. There can be no voluntary recognition
It is NOT a litigation, but a mere investigation
of a non-adversary character
 No determination of rights violated or
asserted.
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
 Determination of worker’s choice only.
IMPLICATION: “Technical rules and objections
should not hamper the correct
ascertainment of the labor union
that has the support and
confidence of the majority of the
workers and is thus entitled to
represent them in bargaining for
the terms and conditions of their
employment.” (Port Workers
Union v. DOLE)
It is most DEMOCRATIC and most efficacious/
effective way and it is a STATUTORY POLICY
IMPLICATION: Thus it should not be
circumvented (George & Peter
Lines, Inc. v. Associated Labor
Union, 134 SCRA 82, 1985).
There should be no obstacle in
conducting the Certificate
election.
There can be NO DIRECT certification
Colgate Palmolive Philippines v. Ople(1988)
ISSUE: WON the secretary of labor can
directly certify a union as the sole and exclusive
bargaining agent?
HELD: NO! He cannot directly certify.
The main purpose of the procedure in Art. 257
- 260 is to aid in ascertaining the majority
representation. The implementing rules pertinent
to these provision are all calculated to ensure that
the certified bargaining rep is the TRUE CHOICE OF
THE EMPLOYEES against all contender.
The constitutional mandate that the State
shall assure the rights of the workers to self-
organization, collective bargaining, security of
tenure and just and humane conditions of work,
should be achieved under a system of law such as
the aforementioned provisions of the pertinent
statute.
When an overzealous official by-passes the
law on the pre-text of retaining a laudable
objective, the intendment or purpose of the law
will lose its meaning as the law itself is
disregarded.
When respondent minister (Sec. Of Labor)
DIRECTLY certified the union, he in fact
DISREGARDED THE PROCEDURE AND ITS LEGAL
REQUIREMENT. There was therefore FAILURE TO
DETERMINE with legal certainty whether the union
indeed enjoyed majority representation.
The holding of a certification election at the
proper time IS NOT NECESSARILY A MERE
FORMALITY. Even in a case where a union has filed
a petition for certification elections, the mere fact
that no opposition is made does NOT warrant a
certification election.
BAR QUESTION (1998, XVIII)
Can the Bureau of Labor Relations certify a union
as the exclusive bargaining representative after
showing proof of majority representation thru
union membership cards without conducting an
election?
SUGGESTED ANSWER:
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The BLR cannot certify a union as the exclusive
collective bargaining representative after showing
proof of majority representation thru union
membership cards without conducting a
certification election.
The Labor Code (in Arts. 256, 257 and 258)
provides only for a certification election as the
mode for determining the exclusive collective
bargaining representative if there is a question of
representation in an appropriate bargaining unit.
Another Suggested Answer:
No, the bureau of labor relations CANNOT certify a
union as the exclusive bargaining representative
without conducting a certification election. (Refer
to doctrine of Colgate Palmolive)
There can be NO VOLUNTARY RECOGNITION
 This has been a debatable topic. Even after
the Supreme Court made the ruling, the DOLE
still included provisions o Voluntary
Recoginition in DO No. 40-03 series of 2003.
So the issue now is which should prevail?
 Azucena in his book recognizes Voluntary
Recognition as valid and welcomes it as a new
development to the law.
Rule I: (bbb) "Voluntary Recognition" refers to
the process by which a legitimate labor union is
recognized by the employer as the exclusive
bargaining representative or agent in a bargaining
unit, reported with the Regional Office in
accordance with Rule VII, Section 2 of these Rules.
Rule VI Section 2. Determination of
representation status; modes. - The
determination of an exclusive bargaining agent
shall be through voluntary recognition in cases
where there is only one legitimate labor
organization operating within the bargaining unit,
or through certification, run-off or consent election
as provided in these Rules.
RULE VII
VOLUNTARY RECOGNITION
Section 1. When and where to file. - In
unorganized establishments with only one
legitimate labor organization, the employer may
voluntarily recognize the representation status of
such a union. Within thirty (30) days from such
recognition, the employer and union shall submit a
notice of voluntary recognition with the Regional
Office which issued the recognized labor union's
certificate of registration or certificate of creation
of a chartered local.
Section 2. Requirements for voluntary
recognition. - The notice of voluntary recognition
shall be accompanied by the original copy and two
(2) duplicate copies of the following documents:
(a) a joint statement under oath of voluntary
recognition attesting to the fact of voluntary
recognition;
(b) certificate of posting of the joint statement of
voluntary recognition for fifteen (15) consecutive
days in at least two (2) conspicuous places in
the establishment or bargaining unit where the
union seeks to operate;
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
(c) the approximate number of employees in the
bargaining unit, accompanied by the names of
those who support the voluntary recognition
comprising at least a majority of the members of
the bargaining unit; and
(d) a statement that the labor union is the only
legitimate labor organization operating within the
bargaining unit.
All accompanying documents of the notice for
voluntary recognition shall be certified under oath
by the employer representative and president of
the recognized labor union.
Section 3. Action on the Notice. - Where the
notice of voluntary recognition is sufficient in form,
number and substance and where there is no other
registered labor union operating within the
bargaining unit concerned, the Regional Office,
through the Labor Relations Division shall, within
ten (10) days from receipt of the notice, record the
fact of voluntary recognition in its roster of
legitimate labor unions and notify the labor union
concerned.
Where the notice of voluntary recognition is
insufficient in form, number and substance, the
Regional Office shall, within the same period,
notify the labor union of its findings and advise it
to comply with the necessary requirements. Where
neither the employer nor the labor union failed to
complete the requirements for voluntary
recognition under Section 2 of this Rule within
thirty (30) days from receipt of the advisory, the
Regional Office shall return the notice for voluntary
recognition together with all its accompanying
documents without prejudice to its re-submission.
Section 4. Effect of recording of fact of
voluntary recognition. - From the time of
recording of voluntary recognition, the recognized
labor union shall enjoy the rights, privileges and
obligations of an existing bargaining agent of all
the employees in the bargaining unit.
Entry of voluntary recognition shall bar the filing of
a petition for certification election by any labor
organization for a period of one (1) year from the
date of entry of voluntary recognition. Upon
expiration of this one-year period, any legitimate
labor organization may file a petition for
certification election in the same bargaining unit
represented by the voluntarily recognized union,
unless a collective bargaining agreement between
the employer and voluntarily recognized labor
union was executed and registered with the
Regional Office in accordance with Rule XVII of
these Rules.
Samahang Manggagawa sa Permex v. Sec of
Labor (1998)
Can an employer voluntarily recognize a union
as the bargaining representative of the
employees?
HELD: NO! It cannot.
The employer (permex) should not have given
its voluntary recognition to the union when the
latter asked for recognition as exclusive collective
bargaining agent of the employees of the
company.
The company did not have the power to
declare the union as the exclusive representative
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of the workers for the purpose of collective
bargaining.
Certification election is the most effective and
the most democratic way of determining which
labor organization can truly represent the working
force in the ABU of the company.
What is the effect if in a certificate election, there
is only one union and that there are no contending
union?
 “Certification election is the best and most
appropriate means of ascertaining the will
of the employees as to their choice of an
exclusive bargaining representative.”
 “That there are no competing unions
involved should not alter that principle,
the freedom of choice by the employer
being the primordial consideration,
besides the fact that the employees can
choose between ALU, the union, and NO
union.” (George & Peter Lines, Inc. v.
ALU, L-51602, 1985; 134 SCRA 82 @
page 86)
 Why is an employer-employee
relationship a PRE-CONDITION before a
petition for certification election can be
entertained?
An employer employee relationship is a pre-
condition since without such relationship,
there will be no duty to bargain on the part of
either the employer or employee.
Thus it will be senseless to go on with a
certification election to choose their bargaining
representative when there is no duty to
collectively bargain anyway. (Allied Free
Workers Union v. Cia Maritima, 19 SCRA 258,
1967)
Reyes v. Trajano (1992)
First issue: Voting No Union
The right of self-organization includes the right
to …. determine which of two or more unions in an
establishment to join, and to engage in concerted
activities with co-workers for purposes of collective
bargaining through representatives of their own
choosing, or for their mutual aid and protection,
i.e., the protection, promotion, or enhancement of
their rights and interests.
Logically, the right NOT to join, affiliate with,
or assist any union, and to disaffiliate or resign
from a labor organization, is subsumed in the right
to join, affiliate with, or assist any union, and to
maintain membership therein. The right to refuse
to join or be represented by any labor
organization is recognized not only by law but also
in the rules drawn up for implementation thereof.
The original Rules on Certification promulgated
by the defunct Court of Industrial Relations
required that the ballots to be used at a
certification election to determine which of two or
more competing labor unions would represent the
employees in the appropriate bargaining unit
should contain:
 Aside from the names of each union,
 An alternative choice of the employee voting,
to the effect that he desires not to be
represented by any union. (A vote for
none, NO UNION)
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
The purpose of a certification election is precisely
the ascertainment of the wishes of the majority of
the employees in the appropriate bargaining unit:
To be or not to be represented by a labor
organization,
And in the affirmative case, by which
particular labor organization.
If the results of the election should disclose
that the majority of the workers do not wish to be
represented by any union, then their wishes must
be respected, and no union may properly be
certified as the exclusive representative of the
workers in the bargaining unit in dealing with the
employer regarding wages, hours and other terms
and conditions of employment.
That the INK employees, as employees in the
same bargaining unit in the true sense of the term,
do have the right of self-organization, is also in
truth beyond question, as well as the fact that
when they voted that the employees in their
bargaining unit should be represented by "NO
UNION," they were simply exercising that right of
self-organization, albeit in its negative aspect.
Second issue: Non-union members are not
excluded from voting in CE
On argument that the petitioners are
disqualified to vote because they "are not
constituted into a duly organized labor union" —
"but members of the INK which prohibits its
followers, on religious grounds, from joining or
forming any labor organization" — and "hence, not
one of the unions which vied for certification as
sole and exclusive bargaining representative," is
specious.
Neither law, administrative rule nor
jurisprudence requires that only employees
affiliated with any labor organization may take part
in a certification election. On the contrary, the
plainly discernible intendment of the law is to
grant the right to vote to all bona fide employees
in the bargaining unit, whether they are members
of a labor organization or not.
From the above case it can be derived that in
a certification election there are two stages
of voting:
First stage:
Whether or not the employees wants to be
represented by a labor organization?
Answerable by Yes or No.
If No wins , then the Certification Election ends.
If Yes wins, then proceed to the Second Stage.
Second Stage:
Which particular labor organization would you like
to represent the bargaining unit?
 What is effect of Receipt of Benefits of
people outside the bargaining unit to the
petition for CE?
Barbizon v. Nagkakaisang Supervisor (1996)
The receipt by petitioner's "supervisor"
employees of certain benefits under the CBA
between BUKLOD and petitioner is not sufficient to
deny the petition for certification election filed by
the labor organization formed by the excluded
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employees. It is not equivalent to and does not
compensate for the denial of the right of the
excluded employees to self-organization and
collective bargaining.
The Supreme Court in previous cases ruled
that the employees excluded from the coverage of
the CBA, who not being excluded by law, have the
right to bargain collectively.
The allegation that some benefits under the
existing CBA were extended to the monthly paid
employees, even if true will not preclude them
from entering into a CBA of their own. Neither is
the inconvenience that may befall petitioner for
having to administer two CBAs an excuse for
depriving the monthly paid employees of their
constitutionally guaranteed right to collective
bargaining.
VENUE OF PETITION: WHERE TO FILE?
Cruz Valle Inc. v. Laguesma (1994)
Petitioner: the petition for certification election
should have been filed with the regional office
which has jurisdiction over the principal office of
the employer in accordance with the IRR of the
Labor Code.
Where to file. A petition for certification
election shall be filed with the Regional Office
which has jurisdiction over the principal office of
the Employer. The petition shall be in writing and
under oath.
The word "jurisdiction" as used in said
provision refers to the venue where the petition for
certification must be filed. Unlike jurisdiction,
which implies the power of the court to decide a
case, venue merely refers to the place where the
action shall be brought. Venue touches more the
convenience of the parties rather than the
substance of the case
Section 1, Rule V, Book V of the Omnibus
Rules Implementing the Labor Code refers only to
cases where the place of work of the employees
and the place of the principal office of the
employer are within the same territorial jurisdiction
of the Regional Office where the petition for
certification election is filed. It does not apply to
the filing of petitions for certification election where
the place of work of the employees and the place
of principal office of the employer are located
within the territorial jurisdictions of different
regional offices.
We assume that in the drafting of the Omnibus
Rules, the Secretary of Labor and Employment
took into consideration the fact that there are
many companies with factories located in places
different from places where the corporate offices
are located.
The worker, being the economically-disadvantaged
party whether as complainant, petitioner or
respondent, as the case may be, the nearest
governmental machinery to settle a labor dispute
must be placed at his immediate disposal and the
employer must in no case be allowed a choice in
favor of another competent agency sitting in
another place to the inconvenience of the worker
For purposes of venue, workplace shall be
understood as the place or locality where the
employee is regularly assigned when the cause of
action arose. It shall include the place where the
employee is supposed to report back after a
temporary detail, assignment or travel. . . .
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
Art. 256
Department Order No. 40-03 ORGANIZED ESTABLISHMENT:
Series of 2003
RULE VIII It is an establishment with:
CERTIFICATION ELECTION a. An existing CBA; or
b. Duly certified bargaining agent.
Section 2. Where to file. - A petition for
certification election shall be filed with the Regional Take note: In relation to the one-year bar rule,
Office which issued the petitioning union's a duly certified bargaining agent is allowed one-
certificate of registration/certificate of creation of year to negotiate for the signing of a CBA, that is
chartered local. why no CE can be filed at this time.
The petition shall be heard and resolved by the
Med-Arbiter. An organized establishment is best distinguished
Where two or more petitions involving the same from an unorganized establishment by the
bargaining unit are filed in one Regional Office, the presence of a bargaining representative since
same shall be automatically consolidated with the according to Art. 257, an unorganized
Med-Arbiter who first acquired jurisdiction. Where establishment is an establishment without a
the petitions are filed in different Regional Offices, bargaining representative.
the Regional Office in which the petition was first
filed shall exclude all others; in which case, the Organized Establishment v. Unorganized
latter shall indorse the petition to the former for Establishment
consolidation. (The distinctions are important because the
requirements are different.)

Art. 256: Art. 257:

ORGANIZED UNORGANIZED

STATUTORY FRAME-WORK AND POLICY Bargaining Existing, has one None

agent
Petition filed Has to be a No need to be
TAKE NOTE: Certification election implements the VERFIED petition verified
policy of right to self-organization and collective Freedom No petition for Not applicable.
bargaining. The right of self-organization includes Period Certification
election EXCEPT No freedom period.
the right of the workers to have a bargaining
within 60 days Can file petition
representative OF THEIR OWN CHOOSING for the before the anytime.
purpose of collective bargaining. expiration of the
collective
bargaining
Statutory Frame-work agreement (See
Art. 253 & 253-A)

Take note how SC

The different entry points to a certification interpreted the
election term “WITHIN”.
Art. 256: Organized Establishments
What is the
Art. 257: Unorganized Establishments
rationale of
Art. 258: Employer-Initiated Certificate freedom period in
Election organized
establishments,
Note: The mechanics of the three why is there none
entry-points are similar and the in unorganized
same. establishments?

It has something
The BARS to a CE: Prevents the happening of to do with
a CE. industrial peace
a. Contract bar rule (Art. 232)
b. Deadlock-bar rule
c. One year bar rule

Note: among all the bar rules, only the contract

bar is actually in the labor code, the other two
are in the implementing rules.

Suspension of CE: Prejudicial question rule

Detailed Discussion of the Framework

Different Entry Points To A Certification Election

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Part VI : Union Representation Establishing Union Majority Status
Labor Relations
Substantial Must be duly NO substantial concluded in defiance of the order of the med-
support rule supported by 25% support rule. arbiter enjoining the parties from entering into a
of ALL THE CBA until the issue on representation is finally
MEMBERS OF THE WHY?
resolved?
APPROPRIATE Intention of law is
BARGAINING to bring in the Article 256 is clear and leaves no room for
UNIT. union, to interpretation. The mere filing of a petition for
implement policy certification election within the freedom period is
Percentage behind Art. 211a. sufficient basis for the respondent Director to order
base: all the holding of a certification election.
members of an The petition for certification election in this
appropriate
case was filed within the freedom period but the
bargaining unit.
petitioner and PASAR hastily concluded a CBA
What is intent and despite the order of the Med-Arbiter enjoining
purpose of law for them from doing so until the issue of
requiring the representation is finally resolved. As pointed out by
substantial public respondent in its comment, the parties were
support rule? in bad faith when they concluded the CBA. Their
Law wants to
act was clearly intended to bar the petition for
know the intention
of the employees. certification election filed by NAFLU.
If they really want A CBA which was prematurely renewed is not
a CE, since they a bar to the holding of a certification election. Such
already have a indecent haste in renewing the CBA despite an
bargaining agent. order enjoining them from doing so is designed to
frustrate the constitutional right of the employees
DISCUSSIONS ON THE FREEDOM PERIOD to self-organization. Moreover, We cannot
countenance the actuation of the petitioner and the
Atlantic Gulf and Pacific Co. Manila, Inc. v. management in this case which is not conducive to
Laguesma (1992) industrial peace.
The Labor Code provides: The renewed CBA cannot constitute a bar to
Art. 232. Prohibition on Certification Election. the instant petition for certification election for the
— The Bureau shall not entertain any petition
very reason that the same was not yet in existence
for certification election or any other action
which may disturb the administration of duly when the said petition was filed. The holding of a
registered existing collective bargaining certification election is a statutory policy that
agreements affecting the parties except under should not be circumvented.
Articles 253, 253-A and 256 of this Code.
Consequently, the existence of a duly DISCUSSION ON THE SUBSTANTIAL SUPPORT
registered Collective Bargaining Agreement RULE IN ORGANIZED ESTABLISHMENTS
between the petitioner and URFA, which is the sole
and exclusive bargaining representative of all the TAKE NOTE: A union that is merely filing a MOTION
regular rank-and-file employees of the petitioner FOR INTERVENTION in a CE filed by another union
including the regular project employees with more need NOT present substantial support. The
than one year of service, bars any other labor substantial support is only needed when filing for a
organization from filing a petition for certification petition for certification election.
election except within the 60-day period prior to
the expiration of the CBA.
 When should the substantial support be
To rule otherwise would negate the legislative
shown or complied with?
intent in the enactment of Article 232 of the Labor
Code which was designed to ensure industrial
It need not be shown at the time of filing of
peace between the employer and its employees
the petition, may be shown within a
during the existence of the collective bargaining
reasonable time thereafter but should be
agreement.
before the election.
Republic Planters Bank Unionv. Laguesma
Port Worker’s Union of the Philippines v.
(1996)
Laguesma
We start with the restatement of the rule that
The holding of a certification election is a
no petition for certification election may be
statutory policy that should not be circumvented.
entertained if filed outside the sixty-day period
In line with this policy the SC holds that the
immediately before the expiration of the collective
administrative rule requiring the SIMULTANEOUS
bargaining agreement.
submission of the 25% consent signatures UPON
the filing of petition for CE should NOT BE
PURPOSE: The purpose of the prohibition
STRICTLY applied to frustrate the determination of
against the filing of a petition for
the legitimate representatives of the workers.
certification election outside the so-
Significantly the rule is not found in article
called freedom period is to ensure
256, the law it seeks to implement.
industrial peace between the
Accordingly, the SC holds that the MERE filing
employer and its employees during
of a petition for certification election within the
the existence of the CBA.
freedom period is sufficient basis for the holding of
a certification election, subject to the submission of
Associated Labor Union v. Calleja (1989)
the consent signatures WITHIN A REASONABLE
Is the contract bar rule applicable where a
PERIOD FROM SUCH FILING.
collective bargaining agreement was hastily

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Part VI : Union Representation Establishing Union Majority Status
Labor Relations
 Is the substantial support rule a
mandatory requirement?
If you strictly follow the letter of the law it
would seem to be mandatory.
If the petition for certification of election
complied with the requirements of the law
including the substantial support requirement,
then it becomes the ministerial duty of the BLR
to conduct a certification election. However, if
the petition does not comply with the
substantial support requirement, the BLR may
exercise its discretion in determining whether
or not a certification election must be
conducted.
Scout Albano Memorial College v. Noriel
(1978)
The BLR in the exercise of sound discretion,
may order a certification election notwithstanding
the failure to meet the 30% requirement. Once
that requisite is complied with, however, the Code
makes clear that "it shall be mandatory for the
Bureau to conduct a certification election for the
purpose of determining the representative of the
employees in the appropriate bargaining unit and
certify the winner as the exclusive collective
bargaining representative of all the employees in
the unit.
 Does a RIVAL union have authority to
VERIFY the signatures in the substantial
support requirement?
No a rival union may not. Only the department
of labor has authority to verify.
“There is no basis for the contention that a
duty is cast on respondent director (secretary
of labor) to allow a rival labor organization to
verify the authenticity of such signatures. The
duty to ascertain whether there was
compliance was on the director of labor.”
(Today’s Knitting Free Workers Union v. Noriel,
75 SCRA 450, 1977)
 What is the effect on a petition of
certification election of the withdrawal
from union membership filed by that
union?
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.
On the contrary the presumption arises that
the withdrawal was not free but was procured
through duress, coercion, or for a valuable
consideration. Hence, the subsequent
disaffiliation of the six (6) employees from the
union will not be counted against or deducted
from the previous number who had signed up
for the CE. (Oriental Tin Can Labor Union v.
Secretary of Labor and Employment 294 SCRA
640, 1998)
Art. 257
UNORGANIZED ESTABLISHMENTS
 When will Art. 257 apply or come into
operation?
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When an establishments is unorganized,
meaning that it has no existing bargaining
agent.
 Who shall file the petition under Art. 257?
A LEGITIMATE labor organization. It cannot be
an unregistered labor organization. This is best
read in relation to Art. 242 which enumerates
the rights granted to a legitimate labor
organization and one of those rights is the
right to be chosen as the exclusive bargaining
representative. This is one way the law
encourages union registration.
 VENUE: Where to file?
BLR region where union is. The one nearer to
the employees.
Art. 258
EMPLOYER-INITIATED PETITION
 When can an employer file a petition?
Only when it is requested to bargain
collectively.
TAKE NOTE: Employer is a TOTAL STRANGER in
the process of Certification Election.
Employer has NO STANDING to file a MOTION TO
DISMISS (Phil. Telephone Telegraph v. SOL)
A company’s interference in the CE creates a
suspicion that it intends to establish a company
union (Oriental Tin Can Labor Union v. Secretary of
Labor).
CONDUCTING AGENCY
Art. 226
Bureau of Labor Relations- The BLR and the Labor
Rels Div in the regional offices of the DOLE shall
have original and exclusive authority to act at
their own initiative and upon request of either or
both parties in all intra-union and inter-union
conflicts, and all disputes grievances or problems
arising from or affecting labor management rels in
all workplaces whether agricultural or non- agri,
except those arising from the implementation or
interpretation of CBAs which shall be the subject
of grievance procedure and voluntary arbitration.
The bureau shall have 15 working days to act on
labor cases before it subject to extension by
agreement of the parties.
Art. 232
Prohibition on CE - The Bureau shall not entertain
any petition on CE or any other action which may
disturb the administration of duly existing CBAs
affecting the parties except under 253, 253-A and
256 of this Code.
Art. 258
When the ER may file a petition - When requested
to bargain collectively, an ER may petition the
Bureau for an election. If there is no existing
certified CBA in the unit, the Bureau shall, after
hearing, order a certification election.
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
All certification cases shall be decided within 20
days.
The Bureau shall conduct a certification election
within 20 days in accordance with the rules and
regulations prescribed by Sec. of Labor.
Art. 259
Appeal from CE orders - any party to an election
may appeal the order or results of the election as
determined by the med arbiter directly to the
SOLE on the ground that the rules and regulations
or parts thereof established by the SOLE for the
conduct of the election have been violated. Such
appeal shall be decided within 15 calendar days.
Ilaw at Buklod ng Manggagawa v. Dir. Of
Labor Relations. 91 SCRA 482
HELD: Referral of the appeal to the Trade
Union Congress of the Philippines (TUCP), a
federation of labor unions is glaringly illegal and
void. The Labor Code never intended that the
Director of Labor Relations should abdicate,
delegate and relinquish his arbitrational
prerogatives in favor of a private person or entity
or to a federation of trade unions. Article 226, 259,
260 are mandatory and should be strictly adhered
to. They are part and parcel of the adequate
administrative machinery established by the Labor
Code for the expeditious settlement of labor
disputes.
The Director's act of referring the appeal is
patent nullification of the policy of the Labor Code
to avoid delay in the adjudication of labor
controversies.
Labor Code never intended that the original
record of a labor case, an official public record,
should be removed from the legitimate custodian
and entrusted to a private person. Delivery of an
official public record to a private person is fraught
with mischievous consequences. Director placed
himself in ridiculous situation of having to beg the
TUCP for the return of the record. Director could
have reconstituted the record and the Director
could have decided the appeal on the basis of the
reconstituted record.
Plum v. Noriel (1982)
HELD: Employees are deprived of the benefits
of a CBA, for management refused to bargain with
the union. A certification election is warranted.
Workers' welfare can be promoted through the
bargaining process. Certification election is the
fairest and most effective way of determining
which labor organization can truly represent the
working force. Will of the majority is controlling.
Director is still empowered to call for a certification
election. Instead of ordering an election, Director
dismissed the appeal of PLUM based on the
decision of the TUCP. This is frowned upon by the
Court.
REQUISITES FOR VALIDITY OF ELECTION
Art. 256
Representation issue in organized establishments -
 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
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certified as the exclusive bargaining agent of
all the workers in the unit.
 When an election which provides for 3 or more
choices results in no choice receiving a
majority of the valid votes cast, a run-off
election shall be conducted between the labor
unions receiving the 2 highest number of
votes. Provided, that total number of votes for
all contending unions is at least 50% of the
number of votes cast.
TEST
Benguet Electric Cooperative, Inc. v
Calleja(1989)
The employees of a cooperative may not join
or form a labor organization for purposes of
collective bargaining. As members of the
cooperative, they are co-owners. An owner cannot
bargain with himself or his co-owners. The fact the
members-employees 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 purposes of collective
bargaining. It is the fact of ownership of the
cooperative, not involvement in the management
thereof, which disqualifies a member from joining
any labor organization within the cooperative.
Only 37 employees are not members of the
cooperative and who are the only employees
eligible to form or join a labor union. However, the
minutes of the certification election show that a
total of 83 employees were allowed to vote. The
certification election is still null and void.
It cannot be determined whether or not 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.
NATURE OF PROCEEDINGS
1. Non-adversalrial
2. Not a litigation
3. Administrative proceedings to
determine worker’s choice.
Young Men Labor Union Stevedores v CIR
(1965)
Certification proceedings are investigatory in
nature. Object of the proceedings is not the
decision of any alleged commission of wrong nor
asserted deprivation of right, but is merely the
determination of proper bargaining units and the
ascertainment of the will and choice and choice of
the employees in respect of the selection of the
bargaining representative. The determination of
the proceeding does not entail the entry of
remedial orders or redress of rights, but
culmination solely in an official designation of
bargaining units and an affirmation of the
employees expressed choice of bargaining agent.
Port Workers Union of the Phils. v Laguesma
(1992)
HELD: There has been substantial compliance
with the requirements of law when they submitted
the required consent signatures several days
after the filing of petition. Article 256 should be
liberally interpreted.
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
Furthermore, CE is a statutory policy that
should not be circumvented and that the CE is the
most democratic and expeditious method by which
the laborers can freely determine the union that
shall act as their representative: The
administrative rule in Bk V, Rule V, Section 6
requiring the simultaneous submission of the 25 %
consent signatures should not be strictly applied so
as to frustrate the determination of the workers’
legit representative. Article 256 is merely
directory. Filing of the petition for CE within the
freedom period is sufficient for the issuance of an
order to conduct the CE. As to the petition for
intervention filed, the percentage requirement
does not apply. It was viable considering that the
principal petitions for CE were valid.
Certification Election–Process and Procedure
DO No. 40-03
WHO may 1) Any legitimate labor organization may
file? file a petition for certification election.
Sec. 1 2) When requested to bargain
collectively, an employer may file a
petition for certification election with the
Regional Office.
3) If there is no existing registered
collective bargaining agreement in the
bargaining unit, the Regional Office shall,
after hearing, order the conduct of a
certification election.
WHERE to A petition for certification election shall
file? be filed with the Regional Office which
Sec. 2 issued the petitioning union's certificate
of registration/certificate of creation of
chartered local.
The petition shall be heard and resolved
by the Med-Arbiter.
Where two or more petitions involving the
same bargaining unit are filed in one
Regional Office, the same shall be
automatically consolidated with the Med-
Arbiter who first acquired jurisdiction.
Where the petitions are filed in different
Regional Offices, the Regional Office in
which the petition was first filed shall
exclude all others; in which case, the
latter shall indorse the petition to the
former for consolidation.
WHEN to A petition for certification election may be
file? filed anytime,
Sec. 3 except:
(a) when a fact of voluntary recognition
has been entered or a valid certification,
consent or run-off election has been
conducted within the bargaining unit
within one (1) year prior to the filing of
the petition for certification election.
Where an appeal has been filed from the
order of the Med-Arbiter certifying the
results of the election, the running of the
one year period shall be suspended until
the decision on the appeal has become
final and executory;
(b) when the duly certified union has
commenced and sustained negotiations in
good faith with the employer in
accordance with Article 250 of the Labor
Code within the one year period referred
to in the immediately preceding
paragraph;
(c) when 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 a valid notice of strike or
lockout;
(d) when a collective bargaining
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agreement between the employer and a
duly recognized or certified bargaining
agent has been registered in accordance
with Article 231 of the Labor Code.
Where such collective bargaining
agreement is registered, the petition may
be filed only within sixty (60) days prior
to its expiry.
 What is a forced intervenor?
Section 7. Forced Intervenor. - The incumbent
bargaining agent shall automatically be one of the
choices in the certification election as forced
intervenor.
POSTING OF NOTICE
Jisscor Independent Union v Torres (1993)
Grounds of a protest may be filed on the spot
or in writing with the representation officer and
shall be contained in the minutes of the
proceedings. Protests not so raised are deemed
waived. The minutes of the certification election
show that JIU only protested against the use of
emblem, visor, pin. Other protests not so raised
are deemed waived.
There is no merit in the argument that the
non-posting of the notice of the certification
election as prescribed misled and confused the
workers regarding the mechanics of the election.
JIU is estopped from raising that issue for it signed
an agreement with JISSCOR to waive the
mandatory 5 days posting of election notices. The
doctrine of estoppel is based on grounds of public
policy, fair dealing, good faith and justice, and its
purpose is to forbid one to speak against his own
act, representations, or commitments to the injury
of one to whom they were directed and who
reasonably relied thereon. The results of the
certification election belie the allegation that the
workers were misinformed about the election out
of 104 eligible voters, 99 were able to cast their
votes and only 3 were spoiled ballots. Nothing in
the records shows that the alleged wearing of
sunvisors and pins, the posting of huge streamers,
as well as the alleged escorting of voters by SMJ-
ALU have unduly pressured, influenced, vitiated, or
in any manner affected the choice of the workers.
VOTING LIST AND VOTERS
Acoje Workers Union v NAMAWU (1963)
Labor unions concerned agreed, not only to
the holding of election, but also to the use of the
Company payroll as the basis for determining who
are qualified to vote subject to the approval of the
lower court. Company presented payroll to said
court. Said labor unions were given an opportunity
to make their comments and observations on the
list of workers contained in the payroll. Court
issued order for the holding of the election and
made its ruling on the question as to who were
qualified to vote. Acoje did not move for a
reconsideration.
EFFECT NON-PARTICIPATION PREVIOUS ELECTION
Reyes v. Trajano (1992)
Furthermore, failure to take part in previous
elections is no bar to the right to participate in
future elections. No law, administrative rule or
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
precedent prescribes forfeiture of the right to vote
by reason of neglect to exercise the right in past
cases.
ALL EMPLOYEES ENTITLED TO VOTE
Airtime Specialists, Inc. v Director of BLR
(1990)
In a certification election, all rank and file
employees in the appropriate bargaining unit are
entitled to vote. Collective bargaining covers all
aspects of the employment relation and the
resultant CBA binds all employees in the
bargaining unit. 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. 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.
Barerra v. CIR (1981)
If it were a labor organization objecting to the
participation in a certification election of a
company-dominated union, as a result of which a
complaint for an unfair labor practice case against
the employer was filed, the status of the latter
union must be first cleared in such a proceeding
before such voting could take place. The reason
that justifies the postponement of a certification
election pending an inquiry, as to the bona fides of
a labor union does not apply in this case.
If management is allowed to have its way, the
result might be to dilute strength of an
organization bent on a more zealous defense of
labor's prerogatives. This is not to say that
management is to be precluded from filing an
unfair labor practice case. It is merely to stress
that such a suit should not be allowed to lend itself
as a means, whether intended or not, to prevent a
truly free expression of the will of the labor group
as to the organization that will represent it.
It is not only the loss of time involved but also
the fear engendered in the mind of an ordinary
employee that management has many weapons in
its arsenal to bring the full force of its undeniable
power against those of its employees dissatisfied
with things as they are. This is one instance that
calls for the application of the maxim, lex
dilationes semper exhorret. Even on the
assumption that the vigorous condemnation of the
strike and the picketing were attended by violence,
it does not automatically follow that thereby the
strikers are no longer entitled to participate in the
certification election for having automatically lost
their jobs.
Philippine Fruits v Torres (211 SCRA 95)
Employees who have been improperly laid off
but who have a present, unabandoned right to or
expectation of reemployment, are eligible to vote
in certification elections. If the dismissal is under
question, employees concerned could still qualify
to vote in the elections. Certification election is the
sole concern of the workers and the employer is
regarded as nothing more than a bystander with
no right to interfere at all in the election. The only
exception here is where the employer has to file a
petition for certification election pursuant to Article
258.
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R. Transport Corp. v Laguesma (227 SCRA
827)
Company argues that the employment status
of the members of CLOP who joined the strike
must first be resolved before a certification election
can be conducted. This is untenable. In Philippine
Fruits v. Torres, employees who have been
improperly laid off but who have a present,
unabandoned right to or expectation of re-
employment, are eligible to vote in certification
elections. Employees who participated in the strike,
legally remain as such, until either the motion to
declare their employment status legally terminated
or their complaint for illegal dismissal is resolved
by the NLRC.
CHALLENGE VOTER
Phil. Telephone & Telegraph Co. v Laguesma
(1993)
PT&T did not possess the legal personality to
file a motion to dismiss. An employer has no
standing to question a certification election since
this is the sole concern of the workers. What PT&T
should have done was to question the inclusion of
any disqualified employee in the certification
election during the exclusion-inclusion proceedings
before the representation officer.
Indeed, this is precisely the purpose of the
exclusion-inclusion proceedings, to determine who
among the employees are entitled to vote and be
part of the bargaining unit sought to be certified.
Evidence presented failed to sufficiently show that
the supervisory employees were in fact performing
managerial functions. While these supervisory
employees did exercise independent judgment
which is not routinary or clerical, their authority
was merely recommendatory in character.
VOTING DAY
Asian Design & Manufacturing Corp v. Calleja
(1989)
Question involving the legality of the strike
which was conducted against ADMACOR is an
independent issue, the resolution of which pertains
to the Labor Arbiter. Issue of the validity of the
certification election pertains solely to BLR.
Resolutions of Director confined itself to the issue
of the validity of the certification election. There
was nothing in the resolutions which contain any
conclusion or ruling by the Bureau that the alleged
strike was legal or illegal. What was resolved was
whether or not there was compliance with the
procedural requirement set by Section 2, Rule VI,
Book VI of the Rules to Implement the Labor Code
that the election shall be set during a regular
business day. The contending parties agreed that
the election should be conducted on that time, a
determined regular business day. This was in
accordance with Section 2, Rule VI Book V, of the
Implementing Rules.
The alleged strike and/or picketing of some
employees at the company's premises which
coincided with the actual conduct of certification
election might, perhaps have affected the actual
performance of works by some employees, but
did not necessarily make said date an irregular
business day of the company.
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
ELECTION CONDUCT
Hercules Industries Inc. v Secretary (1992)
Notice of the certification election had been
issued. Copies of said notice were given and
posted in conspicuous places. Payroll was used as
the basis of the voters' list. Only 15 out of the 98
voters signed their names showing that they
actually voted. These were shown by the minutes
of the pre-election conference. Neither the records
of the case nor the minutes of the certification
election show that Hercules protested the conduct
of the certification election. Protests not so raised
are deemed waived.
PROTEST
Timbungco v. Castro (1990)
Pajares was arguing that the elections where
Timbungco won was invalid because there was no
COMELEC and no tally sheet was prepared which
set out the number of votes that each candidate
got. However, it does not appear that the
dispensing by the membership of the Kapisanan
with certain technical requirements or formalities
in relation to the election had resulted in the
deprivation of any substantial right or prerogative
of anyone, or caused the perpetration of a fraud or
other serious anomaly, or precluded the
expression and ascertainment of the popular will in
the choice of officers. Objections to the elections
have come too late, and they must be deemed in
the premises to have forfeited their right to
impugn.
Protests against elections should be formalized
before the med-arbiter within (5) days from the
close of the election proceedings. Protest was
presented only after the lapse of 2 years after it
was held. No informal protest, oral or written, was
ever presented against the election. There was
tacit acceptance of the regularity of the elections
and the results for during that period of 2 years,
certain significant events took place without demur
or objection of any sort. Timbungco officially made
known to the BLR the Kapisanan's disaffiliation
from the Federacion FOITAF and obtained a new
certificate of registration for the union. He and the
other officers of the Kapisanan negotiated with the
AAATC management and succeeded in bringing
about the execution of a new CBA.
Jisscor Independent Union v Torres (1993)
Grounds of a protest may be filed on the spot
or in writing with the representation officer and
shall be contained in the minutes of the
proceedings. Protests not so raised are deemed
waived. The minutes of the certification election
show that JIU only protested against the use of
emblem, visor, pin. Other protests not so raised
are deemed waived. There is no merit in the
argument that the non-posting of the notice of the
certification election as prescribed misled and
confused the workers regarding the mechanics of
the election. JIU is estopped from raising that
issue for it signed an agreement with JISSCOR to
waive the mandatory 5 days posting of election
notices.
The results of the certification election belie
the allegation that the workers were misinformed
about the election out of 104 eligible voters, 99
were able to cast their votes and only 3 were
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spoiled ballots. Nothing in the records shows that
the alleged wearing of sunvisors and pins, the
posting of huge streamers, as well as the alleged
escorting of voters by SMJ-ALU have unduly
pressured, influenced, vitiated, or in any manner
affected the choice of the workers.
APPEAL
Philippine Fruits and Vegetables Industries v.
Torres (1992)
Requirements in order that a protest filed
would prosper:
(1) The protest must be filed with the
representation officer and made of record
in the minutes of the proceedings before
the close of election proceedings, and
(2) The protest must be formalized before the
Med-Arbiter within five (5) days after the
close of the election proceedings. Phil.
Fruits after filing a manifestation of protest
on election day, only formalized more than
two months after the close of election
proceedings.
ANNULMENT
United Employees Union of Gelmart Inv. v.
Noriel (1975)
General allegation of duress is not sufficient to
invalidate a certification election; it must be shown
by competent and credible proof. Slightest doubt
cannot be entertained that what possesses
significance in a petition for certification is that
through such a device the employees are given the
opportunity to make known who shall have the
right to represent them.
Confederation of Citizens Labor Union v.
Noriel (1982)
Certification election is invalid because of
certain irregularities. Workers on the night shift
and some of those in the afternoon shift were not
able to vote. Out of 1,010 voters only 692 voted
and about 318 failed to vote. Secrecy of the ballot
was not safeguarded. Election supervisors were
remiss in their duties and were apparently
"intimidated" by a union representative.
Participating unions were overzealous in wooing
the employees to vote in their favor by resorting to
such tactics as giving free tricycle rides and T-
shirts. Certification election give the employees
"true representation in their collective bargaining
with an employer". ALU's written protest was
based on the same founds invoked by CCLU in its
protest. That fact alone should have alerted Noriel
to disregard the technicality that CCLU's protest
was not filed on time.
CERTIFICATION OF DESIGNATED MAJORITY UNION
Art. 255
Exclusive bargaining representation and workers
participation in policy and decision-making [sec. 22
of RA 6715] -- The labor organization
designated or selected by the majority of the
EEs in an appropriate collective bargaining unit
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
shall be the exclusive representative of the EEs in
such unit for the purpose of collective bargaining.
However, an individual EE or group of EEs shall
have the right at any time to present grievances to
their ER.
 Any provision of law to the contrary
notwithstanding, workers shall have the right,
subject to such rules and regulations as the
Secretary of Labor and Employment may
promulgate, to participate in policy and
decision-making processes of the
establishment where they are employed in so
far as said processes will directly affect their
RIGHTS, BENEFITS and WELFARE. For this
purpose, workers and ERs may form Labor
Management Councils; Provided, that the
representatives of the workers in such labor
mgt councils shall be elected by at least the
majority of all EEs in said establishment.
Art. 256 Representation issue in organized
establishments - In organized establishments,
when a verified petition questioning the majority
status of the incumbent bargaining agent is filed
before the DOLE within the 60 day period before
the expiration of the CBA, the Med-Arbiter shall
automatically order an election by secret ballot
when the verified petition is supported by the
written consent of at least 25% of all the
employees in the bargaining unit 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 3 or more choices results in
no choice receiving a majority of the valid
votes cast, a run-off election shall be
conducted between the labor unions receiving
the 2 highest number of votes. Provided, that
total number of votes for all contending unions
is at least 50% of the number of votes cast.
 At the expiration of the freedom period, the
ER shall continue to recognize the majority
status of the incumbent bargaining agent
where no petition for certification election has
been filed.
Benguet Electric Cooperative, Inc. v Calleja
(1989)
To have a valid certification elecdtion, 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. In this case, the election is
invalid.
Only 37 employees are not members of the
cooperative and who are the only employees
eligible to form or join a labor union. However, the
minutes of the certification election show that a
total of 83 employees were allowed to vote. The
certification election is still null and void. It cannot
be determined whether or not 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
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membership therein were allowed to vote in the
certification election.
BARS TO THE CERTIFICATION ELECTION
1) Contract bar rule (Art. 253-A/ Art. 233)
2) Deadlock Bar-Rule
3) One-Year Bar rule
Bars to a certification election: PREVENTS a
Certification Election
Suspension Rule: merely POSTPONES a
Certification Election
THE CONTRACT BAR RULE (Art. 232)
GENERAL RULE: The bureau shall NOT entertain
any petition for certification
election.
EXCEPT: (Freedom period)Art. 253,
253-A, 256: Within 60 days
before expiration of the five
year term of the CBA.
TAKE NOTE: The contract bar rule can be
validly invoked only if the
existing CBA contains
substantially those materials
that should be included in the
CBA.
Buklod ng Saulog Transit v. Casalla (1956)
The provisions of the law contemplates a
situation:
1) NOT ONLY when there had been NO
AGREEMENT entered into by and between
employees or laborers and employer or
management as to the terms and
condition of employment.
2) BUT ALSO where there had been an
agreement that leaves out many or the
same matters on which the parties should
have stipulated.
In the present case, the collective bargaining
agreement entered into by and between the
petitioners and company “does not touch in
substantial terms, the rate of pay, wages, hours of
employment and other conditions of employment
of all the employees in the company but seeks to
establish merely a grievance procedure for drivers,
conductors, and inspectors who are members of
the Buklod Saulog. The agreement being
incomplete is no bar to a certification election.
TAKE NOTE: CBA should be complete AT THE
TIME OF FILING of petition for certification
election, even if amended CBA is submitted
wherein the terms and conditions are complete, it
will not bar a petition for CE already filed.
 What if a CBA is not registered but validly
entered into by the parties, will it bar a
petition for CE?
My opinion is it will, but I am not sure. I am
only applying by analogy Trade Union of
Philippines v. Laguesma which says that none
compliance with a procedural requirement
(in this case it was a late filing of the CBA)
should not adversely affect the substantive
validity of the CBA.
Part VI : Union Representation Establishing Union Majority Status
Labor Relations
 What is the effect of an expired CBA on
the contract bar rule?
No petition for CE may be filed after the lapse
of the 60 day freedom period. The old CBA is
extended until a new one is filed. The purpose
is to ensure stability in the relationship of the
workers and the company by preventing
frequent modifications of any CBA earlier
entered into by them in good faith and for the
stipulated original period.
 What if the CBA was suspended?
Under Art. 253-A the representation limit for
the exclusive bargaining agent applies only
when there is an extant CBA in full force and
effect. In the instant case, the parties agreed
to suspend the CBA and put in abeyance the
limit on the representation period. (Rivera v.
Espiritu GR no. 135547 January 23, 2002)
DEADLOCK-BAR RULE
1) Parties must have negotiated in good
faith.
2) Deadlock must have been submitted to
voluntary arbitration or a valid subject of
a valid notice of strike or lock-out.
ONE-YEAR BAR RULE
From time of valid certification election. Not from
time of final resolution of appeal.
DATE OF ELECTION -- DATE ELECTION IS
CERTIFIED -- IF APPEALED, DATE WHEN FINALLY
RESOLVED
SUSPENSION PREJUDICIAL QUESTION RULE
Such charge of company domination is a
prejudicial question that until decided, shall
suspend or bar proceedings for certification
election. If it were a labor organization objecting to
the participation in a certification election of a
company-dominated union, as a result of which a
complaint for an unfair labor practice case against
the employer was filed, the status of the latter
union must be first cleared in such a proceeding
before such voting could take place.
The reason is that the certification election
may lead to the selection of an employer-
dominated or company union as the employees'
bargaining representative, and when the court
finds that said union is employer-dominated in the
unfair labor practice case, the union selected would
be decertified and the whole election proceedings
would be rendered useless and nugatory.'
There would be an impairment of the integrity
of the collective bargaining process if a company-
dominated union were allowed to participate in a
certification election. The timid, the timorous, and
the faint-hearted in the ranks of labor could easily
be tempted to cast their votes in favor of the
choice of management. Should it emerge
victorious, and it becomes the exclusive
representative of labor at the conference table,
there is a frustration of the statutory scheme. It
takes two to bargain. There would be instead a
unilateral imposition by the employer. There is
need therefore to inquire as to whether a labor
organization that aspires to be the exclusive
bargaining representative is company-dominated
before the certification election."
WHAT SUSPENDS: Formal charge of ULP against
the employer for establishing a company union.
WHO MAY ASK FOR SUSPENSION: Only a
union. CE cannot be suspended based on a
pendency of a formal charge of ULP against a labor
organization.

Should be read in relation to Art. 248d: ULP:

“It shall be unlawful for an employer to commit
any of the following unfair labor practice. (d) To
initiate, dominate, assist or otherwise interfere
with the formation or administration of any labor
organization, including the giving of financial or
other support to it or its organizers or supporters.

United CMC Textile Worker’s Union v. BLR

(1984)
The ULP Case herein was filed on August 31,
1978, or anterior to the Certification Case, which
was presented on September 5, 1978. The
pendency of the charge was known to respondent
public official by virtue of the Motion to Dismiss
filed by petitioner as intervenor in the Certification
Case. No allegation has been made that said ULP
Case was instituted in bad faith to forestall the
Certification Case.
RATIONALE for suspension
the reason being, in the words of Mr. Justice
Montemayor, `if there is a union dominated by the
company, to which some of the workers belong, an
election among workers and employees of the
company would not reflect the true sentiment and
wishes of the said workers and employees because
the votes of the members of the dominated union
would not be free.

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Part VII : Collective Bargaining
Labor Relations
Part VII : COLLECTIVE
BARGAINING
IMPLEMENTING PROVISIONS
1. PROCEDURE Art. 250
Art. 251
Cf. Art. 233
2. DUTY TO BARGAIN Art. 252
COLLECTIVELY Art. 253
3. TERMS Art. 253-A
7.01 GENERAL CONCEPTS
1. POLICY DECLARATION
1987 Constitution. Art. 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-
organizations, 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 RESPONSIBILITIES 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.
Labor Code, Art 211 (a)
To promote and emphasize the primacy of FREE
COLLECTIVE BARGAINING and negotiations,
including voluntary arbitration, mediation and
conciliation, as modes of setting labor or industrial
disputes;
Kiok Loy v. NLRC (1986)
Collective bargaining which is defined as
negotiations towards a collective agreement,6 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
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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. "
2. NATURE AND PURPOSE
United Employees Union of Gelmart
Industries v. Noriel (1975)
The institution of collective bargaining is a
prime manifestation of industrial democracy at
work. The two parties to the relationship, labor and
management, make their own rules by coming to
terms. That is to govern themselves in matters
that really count. As labor, however, is composed
of a number of individuals, it is indispensable that
they be represented by a labor organization of
their choice. Thus may be discerned how crucial is
a certification election.
3. WAIVER
Rivera v. Espiritu (2000)
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.” 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. 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;
Part VII : Collective Bargaining
Labor Relations
and the exercised voluntary modes in settling
disputes, including conciliation to foster industrial
peace."
7.02 BARGAINING PROCEDURE
1. PRIVATE PROCEDURE
Art. 251
Duty to bargain collectively in the absence of
collective bargaining agreements. — In the
ABSCENCE of an agreement or other VOLUNTARY
ARRANGEMENT providing for a MORE
EXPEDITIOUS manner of collective bargaining,
 it shall be the duty of the employer and the
representatives of the employees to bargain
collectively in accordance with the provisions of
this Code.
IMPLICATION: Provisions of this code are only
supplementary not mandatory with regards to the
process of collective bargaining. Because it is the
policy of the state to promote the primacy of FREE
collective bargaining. (211a).
 The Labor Code authorizes parties to provide
for their own procedures in Collective
Bargaining but it must be more EXPEDITIOUS
that that provided in Art. 250.
 If they are unable to agree they must follow
procedure in the labor code (Art. 250).
2. CODE PROCEDURE
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;
b. Should differences arise on the basis of such
notice and reply, either party may request
for a conference which shall begin not later
than ten (10) calendar days from the date
of request;
c. If the dispute is not settled, the Board shall
intervene upon request of either or both
parties or at its own initiative and
immediately call the parties to conciliation
meetings.
The Board shall have the power to issue
subpoenas requiring the attendance of the
parties to such meetings.
It shall be the duty of the parties to
participate fully and promptly in the
conciliation meetings the Board may call;
d. During the conciliation proceedings in the
Board, the parties are prohibited from doing
any act which may disrupt or impede the
early settlement of the disputes; and
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e. The Board shall exert all efforts to settle
disputes amicably and encourage the parties
to submit their case to a voluntary
arbitrator.
Art. 251
Duty to bargain collectively in the absence of
collective bargaining agreements---In the absence
of an agreement or other voluntary arrangement
providing for a more expeditious manner of
collective bargaining, it shall be the duty of the
employer and the representatives of the
employees to bargain collectively in accordance
with the provisions of this Code.
Nat’l Union of Restaurant Workers v. CIR
(1964)
In a letter sent by the union containing its
demands, there appears marks, opposite each
demand, such as a check for those demands to
which Mrs. Felisa Herrera was agreeable, a cross
signifying the disapproval of Mrs. Herrera, and a
circle regarding those demands which were left
open for discussion on some future occasion that
the parties may deem convenient. Such markings
were made during the discussion of the demands
in the meeting. That Herrera had agreed to some
of the demands shows that she did not refuse to
bargain collectively. Tres did not refuse to bargain
collectively because they accepted some of the
demands while they refused the others even
leaving open other demands for future discussion.
Those demands were discussed at a meeting.
Under Section 14 of Republic Act 875
whenever a party serves a written notice upon the
employer making some demands the latter shall
reply not later than 10 days from receipt, but this
condition is merely procedural. Its non- compliance
cannot be deemed to be an act of unfair labor
practice.
Tres did not ignore the letter. While Tres
denied the capacity of the complaining union to
bargain collectively, this is because they were of
the impression that before a union could have that
capacity it must first be certified by CIR. This is
what they stated in their answer to the petition for
certification filed by said union. Furthermore,
another union also claimed to represent the
majority of the employees of restaurant.
Art. 250 in summary:
1) All proposal and counter-proposal must be in
writing. No verbal proposal or counter-
proposal.
2) Time periods are provided for by law.
Reply: not later than 10 calendar days from
receipt of notice.
Request for a conference shall begin 10 days
after making such request.
TAKE NOTE: These procedures are DIRECTORY in
nature and not mandatory, failure to comply with
the prescribed time periods will not amount to an
unfair labor practice.
3. CONCILIATION PROCEDURE
Art. 250
Procedure in collective bargaining.
c. If the dispute is not settled, the Board shall
intervene upon request of either or both
Part VII : Collective Bargaining
Labor Relations
parties or at its own initiative and immediately Meaning of duty to bargain collectively. — The duty
call the parties to conciliation meetings. to bargain collectively means the performance of a
The Board shall have the power to issue mutual obligation to meet and convene promptly
subpoenas requiring the attendance of the and expeditiously in good faith for the purpose of
parties to such meetings. negotiating an agreement with respect to wages,
hours of work and all other terms and conditions of
It shall be the duty of the parties to employment including proposals for adjusting any
participate fully and promptly in the grievances or questions arising under such
conciliation meetings the Board may call; agreement and executing a contract incorporating
d. During the conciliation proceedings in the such agreements if requested by either party, but
Board, the parties are prohibited from doing such duty does not compel any party to agree to a
any act which may disrupt or impede the proposal or to make any concession.
early settlement of the disputes; and
e. The Board shall exert all efforts to settle
disputes amicably and encourage the parties
to submit their case to a voluntary arbitrator. Duty to bargain in good faith (Art. 252):
Art. 233
Can be broken down into two components: The
Privileged communication. Information and
positive statement and the Negative Statement.
statements made at conciliation proceedings shall
be treated as privileged communication and shall
1. POSITIVE STATEMENT
not be used as evidence in the Commission.
Conciliators and similar officials shall not testify in
NATURE of duty to bargain: Mutual
any court or body regarding any matters taken up
Obligation
at conciliation proceedings conducted by them.
HOW: to meet and convene
Art. 250e says that : “The Board shall exert all
promptly and
efforts to settle disputes amicably and encourage
expeditiously in good
the parties to submit their case to a voluntary
faith.
arbitrator.” How does the law encourage the
parties to go into conciliation?
PURPOSE: for the purpose of
negotiating an
Privileged Communication (Art. 233)
agreement(CBA)
a. Information and statements made at
NEGOTIABLE ISSUES: with respect to wages,
conciliation proceedings shall be
hours of work and all
treated as privileged communication
other terms and
and shall not be used as evidence in
conditions of
the Commission.
employment including
b. Conciliators and similar officials shall
proposals for adjusting
not testify in any court or body
any grievances or
regarding any matters taken up at
questions arising under
conciliation proceedings conducted by
such agreement
them.
2. NEGATIVE STATEMENT DUTY:
The Board shall have the power to issue
“…but such duty does not compel any party to
subpoenas requiring the attendance of the parties
agree to a proposal or to make any concession. “
to such meetings. It shall be the duty of the
parties to participate fully and promptly in the
3. EXECUTION OF A CONTRACT: Art. 252 also
conciliation meetings the Board may call; (Art. 250
states that it is part of the duty to bargain to
c). This power to subpoenas merely to force the
“execute a contract incorporating such
parties to participate.
agreements if requested by either party.”

During the conciliation proceedings in the Board,

the parties are prohibited from doing any act which
may disrupt or impede the early settlement of the
disputes; (Art. 250d)
7.03 DUTY TO BARGAIN
Art. 251
Duty to bargain collectively in the absence of
collective bargaining agreements. — In the
absence of an agreement or other voluntary
arrangement providing for a more expeditious
manner of collective bargaining, it shall be the
duty of the employer and the representatives of
the employees to bargain collectively in
accordance with the provisions of this Code.
Art. 252
Art. 253
Duty to bargain collectively when there exists a
collective bargaining agreement. —
1. When there is a collective bargaining
agreement, the duty to bargain
collectively shall also mean that neither
party shall terminate or modify such
agreement during its lifetime.
2. However, either party can serve a written
notice to terminate or modify the
agreement at least sixty (60) days prior
to its expiration date.
3. It shall be the duty of both parties to
keep the status quo and to continue in
full force and effect the term and

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Part VII : Collective Bargaining
Labor Relations
conditions of the existing agreement
during the 60-day period and/or until a
new agreement is reached by the parties.
Art. 242
Rights of legitimate labor organizations. — A
legitimate labor organization shall have the right:
c. To be furnished by the employer, upon
written request, with his annual audited
financial statements, including the balance
sheet and the profit and loss statement,
within thirty (30) calendar days from the
date of receipt of the request, after the
union has been duly recognized by the
employer or certified as the sole and
exclusive bargaining representative of the
employees in the bargaining unit, or within
sixty (60) calendar days before the
expiration of the existing collective
bargaining agreement, or during the
collective bargaining negotiation;
DO No.40-03
Seriies of 2003
RULE XVI
COLLECTIVE BARGAINING
Section 2. Disclosure of information. - In
collective bargaining, the parties shall, at the
request of either of them, make available such up-
to-date financial information on the economic
situation of the undertaking, which is normally
submitted to relevant government agencies, as is
material and necessary for meaningful
negotiations. Where the disclosure of some of this
information could be prejudicial to the
undertaking, its communication may be made
condition upon a commitment that it would be
regarded as confidential to the extent required.
The information to be made available may be
agreed upon between the parties to collective
bargaining.
MEANING OF DUTY
Colegio de San Juan de Letran v. Assn. of
Employees (2000)
Noteworthy in Art. 252 of the Labor Code is
the requirement on both parties of the
performance of the mutual obligation to meet and
convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement.
Undoubtedly, the union lived up to this requisite
when it presented its proposals for the CBA to
petitioner on February 7, 1996. On the other hand,
petitioner devised ways and means in order to
prevent the negotiation.
Petitioner's utter lack of interest in bargaining
with the union is obvious in its failure to make a
timely reply to the proposals presented by the
latter. More than a month after the proposals were
submitted by the union, petitioner still had not
made any counter-proposals. This inaction on the
part of petitioner prompted the union to file its
second notice of strike on March 13, 1996.
Petitioner could only offer a feeble explanation that
the Board of Trustees had not yet convened to
discuss the matter as its excuse for failing to file
its reply. This is a clear violation of Article 250 of
the Labor Code governing the procedure in
collective bargaining, to wit:
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Art. 250. Procedure in collective bargaining. -
The following procedures shall be observed in
collective bargaining:
(b) 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.
Kiok Loy v NLRC (1986)
Collective bargaining are negotiations towards
a collective agreement 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.
Article 249, par. (g) 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.
While it is a mutual obligation, the employer is
not under any legal duty to initiate contract
negotiation.
The mechanics of collective bargaining is set in
motion when the following are present: (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.
In this case, Union has a valid cause to
complain against its Company's attitude. Union
made a definite request to bargain, accompanied
with a copy of the proposed CBA to the Company
not only once but twice. Company made no
counter proposal. Even during the period of
compulsory arbitration before the NLRC, Company
stalled the negotiation. Unfair labor practice is
committed when it is shown that employer, after
having been served with a written bargaining
proposal by Union, did not even bother to submit
an answer or reply to the said proposal.
Republic Savings Bank v. CIR (1967)
Collective bargaining does not end with the
execution of an agreement. It is a continuous
process. The duty to bargain imposes on the
parties during the term of their agreement the
mutual obligation "to meet and confer promptly
and expeditiously and in good faith . . . for the
purpose of adjusting any grievances or question
arising under such agreement" and a violation of
this obligation is an unfair labor practice.
DEADLOCK
San Miguel Corporation v. NLRC (1999)
Rule XXII, Section I, of the Rules and
Regulations Implementing Book V the Labor
Code,10 reads:
"Section 1. Grounds for strike and lockout. -- A
strike or lockout may be declared in cases of
Part VII : Collective Bargaining
Labor Relations
bargaining deadlocks and unfair labor
practices. Violations of the collective
bargaining agreements, except flagrant
and/or malicious refusal to comply with
its economic provisions, shall not be
considered unfair labor practice and shall
not be strikeable. No strike or lockout
may be declared on grounds involving
inter-union and intra-union disputes or on
issues brought to voluntary or compulsory
arbitration."
In the case under consideration, the grounds
relied upon by the private respondent union are
non-strikeable. The issues which may lend
substance to the notice of strike filed by the
private respondent union are: collective bargaining
deadlock and petitioner's alleged violation of the
collective bargaining agreement. These grounds,
however, appear more illusory than real.
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:
"x x x 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. x x x
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. x x x"
As regards the alleged violation of the CBA,
we hold that such a violation is chargeable against
the private respondent union. In abandoning the
grievance proceedings and stubbornly refusing to
avail of the remedies under the CBA, private
respondent violated the mandatory provisions of
the collective bargaining agreement.
Abolition of departments or positions in the
company is one of the recognized management
prerogatives. Noteworthy is the fact that the
private respondent does not question the validity
of the business move of petitioner. In the absence
of proof that the act of petitioner was ill-
motivated, it is presumed that petitioner San
Miguel Corporation acted in good faith. In fact,
petitioner acceded to the demands of the private
respondent union by redeploying most of the
employees involved; such that from an original 17
excess employees in BLD, 15 were successfully
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redeployed. In AOC, out of the 17 original excess,
15 were redeployed. In the Magnolia - Manila
Buying Station, out of 18 employees, 6 were
redeployed and only 12 were terminated.
MINUTES OF NEGOTIATION
Samahang Manggagawa sa Top Form v. NLRC
(1998)
The CBA is the law between the contracting
parties the collective bargaining representative and
the employer-company. Compliance with a CBA is
mandated by the expressed policy to give
protection to labor. In the same vein, CBA
provisions should 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. This is founded on the dictum that a CBA is
not an ordinary contract but one impressed with
public interest. It goes without saying, however,
that only provisions embodied in the CBA should
be so interpreted and complied with. Where a
proposal raised by a contracting party does not
find print in the CBA, it is not a part thereof and
the proponent has no claim whatsoever to its
implementation.
Hence, petitioner union’s contention that the
Minutes of the collective bargaining negotiation
meeting forms part of the entire agreement is
pointless. The Minutes reflects the proceedings
and discussions undertaken in the process of
bargaining for worker benefits in the same way
that the minutes of court proceedings show what
transpired therein. At the negotiations, it is but
natural for both management and labor to adopt
positions or make demands and offer proposals
and counter-proposals. However, nothing is
considered final until the parties have reached an
agreement. In fact, one of management’s usual
negotiation strategies is to “x x x agree tentatively
as you go along with the understanding that
nothing is binding until the entire agreement is
reached.” If indeed private respondent promised to
continue with the practice of granting across-the-
board salary increases ordered by the government,
such promise could only be demandable in law if
incorporated in the CBA.
SUSPENSION OF BARGAINING
Colegio de San Juan de Letran v. Assn. of
Employees (2000)
Petitioner, likewise, claims that the suspension
of negotiation was proper since by the filing of the
petition for certification election the issue on
majority representation of the employees has
arose. According to petitioner, the authority of the
union to negotiate on behalf of the employees was
challenged when a rival union filed a petition for
certification election. Citing the case of Lakas Ng
Manggagawang Makabayan v. Marcelo Enterprises,
petitioner asserts that in view of the pendency of
the petition for certification election, it had no duty
to bargain collectively with the union.
We disagree. In order to allow the employer to
validly suspend the bargaining process there must
be a valid petition for certification election
raising a legitimate representation issue. Hence,
the mere filing of a petition for certification
Part VII : Collective Bargaining
Labor Relations
election does not ipso facto justify the suspension o The consequences are different for the
of negotiation by the employer. The petition must refusal to bargain.
first comply with the provisions of the Labor Code o If mandatory issue, refusal to bargain could
and its Implementing Rules. Foremost is that a lead to:
petition for certification election must be filed A case of Unfair Labor Practice
during the sixty-day freedom period. May be a valid ground for a strike or lock-
The "Contract Bar Rule" under Section 3, Rule out
XI, Book V, of the Omnibus Rules Implementing o If permissive issue, refusal to bargain will
the Labor Code, provides that: " .… If a collective NOT produce a case for ULP, NOR will it
bargaining agreement has been duly registered in allow that economic weapons be used.
accordance with Article 231 of the Code, a petition Cannot strike or lock-out.
for certification election or a motion for
intervention can only be entertained within sixty Phil American Mgt Co. v. Phil. American Mgt
(60) days prior to the expiry date of such Employees (1973)
agreement." The rule is based on Article 232, in
Even then, there is an area placed beyond the
relation to Articles 253, 253-A and 256 of the
sphere of bargaining between the parties. Included
Labor Code. No petition for certification election for
therein is the question of minimum wages. It is
any representation issue may be filed after the
understandable why it should be so. For legislation
lapse of the sixty-day freedom period. The old CBA
of that character proceeds on the premise that
is extended until a new one is signed. The rule is
there is a floor below which the amount paid labor
that despite the lapse of the formal effectivity of
should not fall. That is to assure decent living
the CBA the law still considers the same as
conditions. Such an enactment is compulsory in
continuing in force and effect until a new CBA shall
nature; not even the consent of the employees
have been validly executed. Hence, the contract
themselves suffices to defeat its operation. More
bar rule still applies. The purpose is to ensure
plainly put, the question of minimum wage is not
stability in the relationship of the workers and the
negotiable. What the law decrees must be obeyed.
company by preventing frequent modifications of
It is as simple as that.
any CBA earlier entered into by them in good faith
There is to be sure no thought of deviating
and for the stipulated original period.
from the basic concept that the area of free play of
In the case at bar, the lifetime of the previous
bargaining between management and labor is not
CBA was from 1989-1994. The petition for
to be constricted. What cannot be denied,
certification election by ACEC, allegedly a
however, is that neither party in this particular
legitimate labor organization, was filed with the
case is at liberty to agree to an amount lower than
Department of Labor and Employment (DOLE) only
that the law requires as to the wages to be paid.
on May 26, 1996. Clearly, the petition was filed
To that extent, there is no room for offer and
outside the sixty-day freedom period. Hence, the
counter offer. The employer has an obligation to
filing thereof was barred by the existence of a valid
meet. His duty is plain. He must pay what he has
and existing collective bargaining agreement.
to.
Consequently, there is no legitimate
representation issue and, as such, the filing of the
petition for certification election did not constitute Nestle Phil. V NLRC (1991)
a bar to the ongoing negotiation. Reliance, Retirement plan is negotiable. Inclusion of the
therefore, by petitioner of the ruling in Lakas Ng retirement plan in the CBA as part of the package
Manggagawang Makabayan v. Marcelo Enterprises of economic benefits extended by the company to
is misplaced since that case involved a legitimate its employees to provide them a measure of
representation issue which is not present in the financial security after they shall have ceased to be
case at bar. employed in the company, reward their loyalty,
boost their morale and efficiency and promote
7.04 BARGAINABLE ISSUES industrial peace, gives "a consensual character" to
the plan so that it may not be terminated or
modified at will by either party.
BARGAINABLE ISSUES: wages, hours of work and
The fact that the retirement plan is non-
all other terms and conditions of employment
contributory does not make it a non-issue in the
including proposals for adjusting any grievances or
CBA negotiations. Almost all of the benefits
questions arising under such agreement
granted to its employees under the CBA are non-
contributory benefits. Since the retirement plan
 What do we mean by “all other terms and
has been an integral part of the CBA since 1972,
conditions of employment”?
demand to increase the benefits due the
employees is a valid CBA issue. Employees have a
The “other terms and conditions of employment”
vested or demandable right to a non-contributory
to become a mandatory bargainable issue must
retirement plan. It is an existing benefit voluntarily
have a connection between the proposal and the
granted to them by their employer.
nature of the work.
Example of what falls under this statement:
Samahang Manggagawa sa Top Form v. NLRC
Stewardess bargains for better uniforms.
(1998)
Example of what does not fall under this
Indeed, the adamant insistence on a
statement: A company janitor asks for a car.
bargaining position to the point where the
negotiations reach an impasse does not establish
 Importance of determining whether an issue
bad faith. Neither can bad faith be inferred from
is a mandatory bargaining issue or only a
a party's insistence on the inclusion of a
permissive bargaining issue:
particular substantive provision unless it

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Part VII : Collective Bargaining
Labor Relations
concerns trivial matters or is obviously intolerable.
"The question as to what are mandatory and
what are merely permissive subjects of collective
bargaining is of significance on the right of a party
to insist on his position to the point of stalemate. A
party may refuse to enter into a collective
bargaining contract unless it includes a desired
provision as to a matter which is a mandatory
subject of collective bargaining; but a refusal to
contract unless the agreement covers a matter
which is not a mandatory subject is in substance a
refusal to bargain about matters which are
mandatory subjects of collective bargaining; and it
is no answer to the charge of refusal to bargain in
good faith that the insistence on the disputed
clause was not the sole cause of the failure to
agree or that agreement was not reached with
respect to other disputed clauses."
On account of the importance of the economic
issue proposed by petitioner union, it could have
refused to bargain and to enter into a CBA with
private respondent. On the other hand, private
respondent's firm stand against the proposal did
not mean that it was bargaining in bad faith. It
had the right "to insist on (its) position to the point
of stalemate." On the part of petitioner union, the
importance of its proposal dawned on it only after
the wage orders were issued after the CBA had
been entered into.
7.05 THE COLLECTIVE BARGAINING
AGREEMENT
Art. 253-A
Terms of a collective bargaining agreement.
POLITICAL ASPECT: 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 DOLE outside of the sixty-day
period immediately before the date of the expiry of
such five year term of the Collective Bargaining
Agreement.
ECONOMIC ASPECT: All other provisions of the
CBA shall be renegotiated not later than three (3)
years after its execution.
Any agreement on such other provisions
of the CBA entered into within six months from the
expiry of the term of such other provisions as fixed
in such CBA, 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 the retroactivity thereof, In case of a
deadlock in the renegotiation of the CBA, the
parties may exercise their rights under this Code.
DO No. 40-03 series of 2003
Book V Rule XVII
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Section 7. Term of representation status;
contract bar rule. - The representation status of
the incumbent exclusive bargaining agent which is
a party to a duly registered collective bargaining
agreement
 Shall be for a term of five (5) years from the
date of the effectivity of the collective
bargaining agreement.
No petition questioning the majority status of
the incumbent exclusive bargaining agent or
petition for certification election filed outside of
the sixty-day period immediately preceding the
expiry date of such five-year term shall be
entertained by the Department.
The five-year representation status acquired
by an incumbent bargaining agent either
through single enterprise collective bargaining
or multi-employer bargaining
 Shall not be affected by a subsequent
collective bargaining agreement executed
between the same bargaining agent and the
employer during the same five-year period.
Section 8. Re-negotiation of collective
bargaining agreements. - All provisions of a
collective bargaining agreement, except the
representation status of the incumbent bargaining
agent shall,
 As a matter of right, be renegotiated not later
than three (3) years after its execution.
The re-negotiated collective bargaining
agreement shall be ratified and registered with
the same Regional Office where the preceding
agreement was registered. The same
requirements and procedure in the registration
of collective bargaining agreements prescribed
in the preceding rules shall be applied.
DEFINITION
Davao Integrated Port Stevedoring Services
v. Abrquez (93)
A CBA as used in Art. 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, it is not,
however, an ordinary contract to which is applied
the principles of law governing ordinary contracts.
A CBA, as a labor contract within the
contemplation of Article 1700 Civil Code 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.
University of the Immaculate Concepcion v.
Sec. of Labor (2002)
A CBA refers to the negotiated contract
between a legitimate labor organization and the
Part VII : Collective Bargaining
Labor Relations
employer concerning wages, hours of work and all of violation of any provision of this Agreement
other terms and conditions of employment in a or any complaint that any employee may have
against the COMPANY shall constitute a
bargaining unit, including mandatory provisions for
grievance
grievances and arbitration machineries. As in all
The instant case is not a grievance that must
other contracts, there must be clear indications
be submitted to the grievance machinery. What
that the parties reached a meeting of the minds.
are subject of the grievance procedure for
In this case, no CBA could be concluded
adjustment and resolution are grievances arising
because of what the union perceived as illegal
from the interpretation or implementation of the
deductions from the 70% employees' share in the
collective bargaining agreement.
tuition fee increase from which the salary
The acts of petitioner involved a violation of
increases shall be charged. Also, the manner of
the Code of Employee Discipline, particularly the
computing the net incremental proceeds was yet
provision penalizing the immoral conduct of
to be agreed upon by the parties.
employees. Consequently, there was no
Petitioner insisted that a new CBA was
justification for petitioner to invoke the grievance
concluded through the conciliation proceeding
machinery provisions of the Collective Bargaining
before the NCMB on all issues specified in the
Agreement.
notice of strike. Although it is true that the
university and the union may have reached an
REGISTRATION – PERIOD, REQUIREMENTS AND
agreement on the issues raised during the
ACTIONS
collective bargaining negotiations, still no
agreement was concluded by them because,
Art. 231. Registry of unions and file of collective
among other reasons, the DOLE Secretary, who
bargaining agreements.
assumed jurisdiction on January 23, 1995 only was
 The Bureau shall keep a registry of legitimate
set to resolve the distribution of the salary
labor organizations. The Bureau shall also
increase of the covered employees. The Court of
maintain a file of all collective bargaining
Appeals found that "there are many items in the
agreements and other related agreements and
draft-CBA that were not even mentioned in the
records of settlement of labor disputes and
minutes of the July 20, 1994 conference."
copies of orders and decisions of voluntary
Considering the parties failed to reach an
arbitrators.
agreement regarding certain items of the CBA,
o The file shall be open and accessible to
they still have the duty to negotiate a new
interested parties under conditions
collective bargaining agreement in good faith,
prescribed by the Secretary of Labor and
pursuant to the applicable provisions of the Labor
Employment,
Code.
- provided that no specific information
submitted in confidence shall be disclosed
unless authorized by the Secretary,
- or when it is at issue in any judicial
litigation, or when public interest or
national security so requires.
 Within 30 days from the execution of a CBA,
the parties shall submit copies of the same
CONTENTS
directly to the Bureau or the Regional
Offices of the DOLE for registration,
Effect Sub-standard Contract
accompanied with verified proofs of its
posting in two conspicuous places in the
Art. 239
place of work and ratification by the
Grounds for cancellation of union registration. The
majority of all the workers in the bargaining
following shall constitute grounds for cancellation
unit.
of union registration:
o The Bureau or Regional Offices shall act
(f) Entering into collective bargaining
upon the application for registration of
agreements which provide terms and
such Collective Bargaining Agreement
conditions of employment below minimum
within 5 calendar days from receipt
standards established by law;
thereof.
o The Regional Offices shall furnish the
Duration and Re-negotiation
Bureau with a copy of the CBA within 5
days from its submission.
Grievance Procedure
 The Bureau or Regional Office shall assess the
employer for every CBA a registration fee of
Navarro III v. Damasco (1995)
not less than P1,000.00 or in any other
Petitioner was dismissed by the company for
amount as may be deemed appropriate and
violating the Company Code of Conduct. Petitioner
necessary by the Secretary of Labor and
contends that the grievance procedure provided
Employment for the effective and efficient
for in the CBA was not followed; hence, the
administration of the Voluntary Arbitration
Voluntary Arbitrator exceeded his authority when
Program.
he took cognizance of the labor case.
Section 2, Article X of the CBA specifies
o Any amount collected under this
the instances when the grievance machinery provision shall accrue to the Special
may be availed of, thus: Voluntary Arbitration Fund.
Any protest or misunderstanding  The Bureau shall also maintain a file and shall
concerning any ruling, practice or working undertake or assist in the publication of all
conditions in the Company, or any dispute final decisions, orders and awards of the
arising as to the meaning, application or claim

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Part VII : Collective Bargaining
Labor Relations
Secretary of Labor and Employment, Regional
Directors and the Commission.
CONTRACT BENEFICIARIES
 Who are the beneficiaries to a CBA?
All workers in an appropriate bargaining unit
New Pacific Timber and Supply v. NLRC
(2000)
Petitioner Company insists that the rank-and-
file employees hired after the term of the CBA
inspite of their subsequent membership in the
bargaining unit, are not parties to the agreement,
and certainly may not claim the benefits
thereunder.
We do not agree. In a long line of cases, this
Court has held that when a collective bargaining
contract is entered into by the union representing
the employees and the employer, even the non-
member employees are entitled to the benefits of
the contract. To accord its benefits only to
members of the union without any valid reason
would constitute undue discrimination against
nonmembers. It is even conceded, that a laborer
can claim benefits from a CBA entered into
between the company and the union of which he is
a member at the time of the conclusion of the
agreement, after he has resigned from said union.
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 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.
CONTRACT ADMINISTRATION AND ENFORCEMENT
Nature of the Contract
Babcock-Hitachi (Phils.) V. Babcock-Hitachi
(2005)
The basic issue for our resolution is whether
union members are entitled to relocation allowance
in light of the CBA between the parties.
To begin with, any doubt or ambiguity in the
contract between management and the union
members should be resolved in favor of the latter.
This is pursuant to Article 1702 of the Civil Code
which provides: “(I)n case of doubt, all labor
legislation and all labor contracts shall be
construed in favor of the safety and decent living
for the laborer.”
Pertinent are Sections 1 and 2, Article XXI of
the CBA which provide:
“Section 1. The COMPANY shall provide a
relocation allowance of ONE THOUSAND
EIGHT HUNDRED PESOS (P1,800.00) per
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month for employees who will be transferred
from Bauan to Makati. For employees who
will be transferred from Makati to Bauan, the
relocation assistance shall be ONE THOUSAND
FIVE HUNDRED PESOS (P1,500.00).
Section 2. Employees can avail this provision
provided their transfer is on a permanent
basis or for a duration exceeding one (1)
month.”
The above provisions state that employees
transferred from Makati City to Bauan, Batangas
are entitled to a monthly relocation allowance of
P1,500.00, provided their transfer is permanent or
for a period exceeding one month. Such provisions
need no interpretation for they are clear. Contracts
which are not ambiguous are to be interpreted
according to their literal meaning and not beyond
their obvious intendment.
In Mactan Workers Union vs. Aboitiz, we held
that “the terms and conditions of a collective
bargaining contract constitute the law between the
parties. Those who are entitled to its benefits can
invoke its provisions. In the event that an
obligation therein imposed is not fulfilled, the
aggrieved party has the right to go to court for
redress.”
Kimberly Clark Phils. V. Lorredo (1993)
A collective bargaining agreement, just like
any other contract, is respected as the law
between the contracting parties and compliance
therewith in good faith is mandated. Similarly, the
rules embodied in the Civil Code on the proper
interpretation of contracts can very well govern.
The intention of the parties is primodial; if the
terms of the contract are clear, the literal meaning
of the stipulations shall control, but if the words
appear to be contrary to the evident intention of
the parties, the latter shall prevail over the former.
GRIEVANCE PROCEDURE; Dispute issues and
Individual Grievance
Art. 260
Grievance Machinery and Voluntary Arbitration. –
The parties to a CBA shall include therein
provisions that will ensure the mutual observance
of its terms and conditions.
They shall establish a machinery for the
adjustment and resolution of grievances arising
from
(1) the interpretation or implementation of
their CBA and
(2) those arising from the interpretation or
enforcement of company personnel
policies.
All grievances submitted to the grievance
machinery which are not settled within 7 calendar
days from the date of its submission shall
automatically be referred to voluntary arbitration
prescribed in the CBA.
For this purpose, parties to a CBA shall
1) name and designate in advance a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, or include in the agreement a
procedure for the selection of such
Voluntary Arbitrator or panel of
Voluntary Arbitrators preferably from
the listing of qualified Voluntary
Part VII : Collective Bargaining
Labor Relations
Arbitrators duly accredited by the Board.
2) In case the parties fail to select a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the
Voluntary Arbitrator or panel of Voluntary
Arbitrators, as may be necessary,
pursuant to the selection procedure
agreed upon in the CBA, which shall act
with the same force and effect as if the
Voluntary Arbitrator or panel of
Arbitrators has been selected by the
parties as described above.
Art. 255
Exclusive bargaining representation and workers’
participation in policy and decision-making.
 The labor organization designated or selected
by the majority of the employees in an
appropriate collective bargaining unit shall be
the exclusive representative of the employees
in such unit for the purpose of collective
bargaining.
o However, an individual employee or group
of employees shall have the right at any
time to present grievances to their
employer.
Republic Savings Bank v. CIR
Grievance procedure is a part of the
continuous process of collective bargaining. It is
intended to promote a friendly dialogue.
Master Iron Labor Union v. NLRC (1993)
The Corporation's insistence that the hiring of
casual employees is a management prerogative
betrays its attempt to coat with legality the illicit
curtailment of its employees' rights to work under
the terms of the contract of employment and to a
fair implementation of the CBA.
While it is true that an employer's exercise of
management prerogatives, with or without reason,
does not per se constitute unjust discrimination,
such exercise, if clearly shown to be in grave
abuse of discretion, may be looked into by the
courts. Indeed, the hiring, firing, transfer,
demotion, and promotion of employees are
traditionally identified as management
prerogatives. However, they are not absolute
prerogatives. They are subject to limitations found
in law, a collective bargaining agreement, or
general principles of fair play and justice
The Corporation's assertion that it was
exercising a management prerogative in hiring
outside workers being contrary to the contract of
employment which, of necessity, states the
expected wages of the workers, as well as the
CBA, is therefore untenable.
Private respondent's failure to traverse
petitioners' allegations that the NLRC abused its
discretion in holding that the provision on
grievance procedure had not been exhausted
clearly sustains such allegation and upholds the
petitioners' contention that the Corporation
refused to undergo said procedure.
It should be remembered that a grievance
procedure is part of the continuous process of
collective bargaining It is intended to promote a
friendly dialogue between labor and management
as a means of maintaining industrial peace. The
Corporation's refusal to heed petitioners' request
to undergo the grievance procedure clearly
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demonstrated its lack of intent to abide by the
terms of the CBA.
Caltex Refinery Employees Association v.
Brilliantes (1997)
No particular setup for a grievance machinery
is mandated by law. Rather, Article 260 of the
Labor Code, as incorporated by RA 6715, provides
for only a single grievance machinery in the
company to settle problems arising from
"interpretation or implementation of their collective
bargaining agreement and those arising from the
interpretation or enforcement of company
personnel policies.".
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. Their alternatives —
whether to have one or three arbitrators — have
their respective advantages and disadvantages. In
this matter, cost is not the only consideration; full
deliberation on the issues is another, and it is best
accomplished in a hearing conducted by three
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.
PAL v. Santos (1993)
It is clear that the grievance was filed with Mr.
Abad's secretary during his absence. Under Section
2 of the CBA aforequoted, the division head shall
act on the grievance within five (5) days from the
date of presentation thereof, otherwise "the
grievance must be resolved in favor of the
aggrieved party."
It is not disputed that the grievants knew that
division head Abad was then "on leave" when they
filed their grievance which was received by Abad's
secretary. This knowledge, however, should not
prevent the application of the CBA.
Contrary to petitioner's submission, the
grievance of employees is not a matter which
requires the personal act of Mr. Abad and thus
could not be delegated. Petitioner could at least
have assigned an officer-in-charge to look into the
grievance and possibly make his recommendation
to Mr. Abad. It is of no moment that Mr. Abad
immediately looked into the grievance upon
returning to work, for it must be remembered that
the grievants are workingmen who suffered salary
deductions and who rely so much on their meager
income for their daily subsistence and survival.
As respondent NLRC has pointed out, Abad's
failure to act on the matter may have been due to
petitioner's inadvertence, but it is clearly too
much of an injustice if the employees be made to
bear the dire effects thereof. Much as the latter
were willing to discuss their grievance with their
employer, the latter closed the door to this
possibility by not assigning someone else to look
into the matter during Abad's absence. Thus,
private respondents should not be faulted for
Part VII : Collective Bargaining
Labor Relations
believing that the effects of the CBA in their favor
had already stepped into the controversy.
Contract Infirmity
Associated Labor Unions v. Calleja (1989)
Petitioner, however, contends that since the
new CBA had already been ratified overwhelmingly
by the members of the bargaining unit and that
said CBA had already been consummated and the
members of the bargaining unit have been
continuously enjoying the benefits under the said
CBA, no certification election may be conducted.
The reliance on Foamtex case weakens rather
than strengthens petitioner's stand. In Foamtex
the SC affirmed the order of the Med-Arbiter
calling for a certification election on the ground
that although a new CBA was concluded between
the petitioner and the management, only a
certified CBA would serve as a bar to the holding
of a certification election, citing Article 232 of the
Labor Code.
Here, as in Foamtex the CBA was not yet
certified and yet the Court affirmed the order of
the Director of the BLR which dismissed the
petition for certification election filed by the labor
union. The petition for certification election in this
case was filed within the freedom period but the
petitioner and PASAR hastily concluded a CBA
despite the order of the Med-Arbiter enjoining
them from doing so until the issue of
representation is finally resolved. The parties were
in bad faith when they concluded the CBA. A CBA
which was prematurely renewed is not a bar to the
holding of a certification election.
Contract Duration And Renewals
Art. 253-A
Terms of a collective bargaining agreement.
 Any CBA that the parties may enter into shall,
insofar as the representation aspect is
concerned, be for a term of 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 3 years after its execution. Any
agreement on such other provisions of the CBA
entered into within 6 months from the date of
expiry of the term of such other provisions as
fixed in such CBA 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 CBA, the parties may exercise their rights
under this Code.
Manila Electric Co. V. Quisumbing (1999)
In this petition for certiorari, the MERALCO
seeks to annul the orders of the Secretary of Labor
wherein the Secretary required MERALCO and its
rank and file union (MEWA) to execute a CBA for
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the remainder of the parties' 1992-1997 CBA cycle,
and to incorporate in this new CBA the Secretary's
dispositions on the disputed economic and non-
economic issues.
The court reviewed the Secretary’s order and
made the following list of economic and non-
economic issues.
a) ECONOMIC ISSUES:
1) CHRISTMAS BONUS
2) RICE SUBSIDY and RETIREMENT
BENEFITS for RETIREES
- The question squarely brought in this
petition is whether the Secretary can
issue an order that binds the retirement
fund. The company alleges that a
separate and independent trust fund is
the source of retirement benefits for
MERALCO retirees, while the union
maintains that MERALCO controls these
funds and may therefore be compelled to
improve this benefit in an arbitral award.
- The issue requires a finding of fact on the
legal personality of the retirement fund.
In the absence of any evidence on record
indicating the nature of the retirement
fund's legal personality, we rule that the
issue should be remanded to the
Secretary for reception of evidence as
whether or not the MERALCO retirement
fund is a 4separate and independent trust
fund.
- The existence of a separate and
independent juridical entity which controls
an irrevocable retirement trust fund
means that these retirement funds are
beyond the scope of collective bargaining:
they are administered by an entity not a
party to the collective bargaining and the
funds may not be touched without the
trustee's conformity.
- On the other hand, MERALCO control over
these funds means that MERALCO may be
compelled in the compulsory arbitration of
a CBA deadlock where it is the employer,
to improve retirement benefits since
retirement is a term or condition of
employment that is a mandatory subject
of bargaining.
3) GHSIP, HMP BENEFITS FOR
DEPENDENTS and HOUSING EQUITY
LOAN
- Moreover, MERALCO have long been
extending these benefits to the employees
and their dependents that they now
become part of the terms and conditions
of employment. In fact, MERALCO even
pledged to continue giving these benefits.
Hence, these benefits should be
incorporated in the new CBA.
4) SIGNING BONUS
- In contractual terms, a signing bonus is
justified by and is the consideration paid
for the goodwill that existed in the
negotiations that culminated in the
signing of a CBA. Without the goodwill,
the payment of a signing bonus cannot be
justified and any order for such payment,
to our mind, constitutes grave abuse of
discretion.
5) SICK LEAVE RESERVE OF 15 DAYS
Part VII : Collective Bargaining
Labor Relations
6) 40-DAY UNION LEAVE
b) NON-ECONOMIC ISSUES
1) SCOPE OF THE BARGAINING UNIT
2) ISSUE OF UNION SECURITY
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. Court declared that such
consultation requirement will go against
principle of mgt prerogative.
4) UNION REPRESENTATION IN
COMMITTEES
- is worthwhile to note that all the Union
demands and what the Secretary's order
granted is that the Union be allowed to
participate in policy formulation and
decision-making process on matters
affecting the Union members' rights,
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
6) RETROACTIVITY OF THE CBA
- Art. 253-A serves as the guide in
determining when the effectivity of the
CBA at bar is to take effect. It provides
that the representation aspect of the CBA
is to be for a term of 5 years, while
. . . [A]ll other provisions of the
Collective Bargaining Agreement
shall be re-negotiated not later
than 3 years after its execution.
Any agreement on such other
provision of the Collective
Bargaining Agreement entered
into within 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 such agreement is
entered into beyond 6 months,
the parties shall agree on the
duration of the effectivity
thereof. . . . .
- Under these terms, it is clear that the 5-
year term requirement is specific to the
representation aspect. What the law
additionally requires is that a CBA must
be re-negotiated within 3 years "after its
execution." It is in this re-negotiation that
gives rise to the present CBA deadlock.
- If no agreement is reached within 6
months from the expiry date of the 3
years that follow the CBA execution, the
law expressly gives the parties — not
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anybody else — the discretion to fix the
effectivity of the agreement.
- 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.
- 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 reached. 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.
Manila Central Line Corp. v. Manila Central
Line Free Workers Union (1998)
Facts: This case arose out of a collective
bargaining deadlock between petitioner and private
respondent union. The parties’ CBA had expired
on March 15, 1989. As the parties failed to reach
new agreement, private respondent sought the aid
of the NCMB on October 30, 1989, but the
deadlock remained unresolved.
On February 9, 1990, private respondent filed
a “Petition for Compulsory Arbitration” in the
Arbitration Branch for the National Capital Region
of the National Labor Relations Commission. A. On
September 28, 1990, the labor arbiter rendered a
decision embodying provisions for a new CBA.
Petitioner also contends that in ordering a new
CBA to be effective on March 15, 1989, the expiry
date of the old CBA, the labor arbiter acted
contrary to Art. 253-A of the Labor Code.
Held: Art. 253-A refers to CBA’s entered into
by the parties as a result of their mutual
agreement. The CBA in this case, on the other
hand, is part of an arbitral award. As such, it may
be made retroactive to the date of expiration of the
previous agreement.
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.
Indeed, petitioner has not shown that the
question of effectivity was not included in the
general agreement of the parties to submit their
dispute for arbitration. To the contrary, as to the
order of the labor arbiter states, this question was
among those submitted for arbitration by the
parties:
Rivera v. Espiritu (2002)
Petitioners further allege that the 10-year
suspension of the CBA under the PAL-PALEA
Part VII : Collective Bargaining
Labor Relations
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.
The questioned proviso of the agreement reads:
a. PAL shall continue recognizing PALEA as the
duly certified-bargaining agent of the regular
rank-and-file ground employees of the
Company;
Said proviso cannot be construed alone. In
construing an instrument with several provisions, a
construction must be adopted as will give effect to
all. The aforesaid provision must be read within
the context of the next clause, which provides:
b. The ‘union shop/maintenance of
membership’ provision under the PAL-PALEA
CBA shall be respected.
The aforesaid provisions, taken together,
clearly show the intent of the parties to maintain
“union security” during the period of the
suspension of the CBA. Its objective is to assure
the continued existence of PALEA during the said
period. We are unable to declare the objective of
union security an unfair labor practice. It is State
policy to promote unionism to enable workers to
negotiate with management on an even playing
field and with more persuasiveness than if they
were to individually and separately bargain with
the employer. For this reason, the law has allowed
stipulations for “union shop” and “closed shop” as
means of encouraging workers to join and support
the union of their choice in the protection of their
rights and interests vis-à-vis the employer.
Petitioners’ contention that the agreement
installs PALEA as a virtual company union is also
untenable. Under Article 248 (d) of the Labor
Code, a company union exists when the employer
acts “[t]o initiate, dominate, assist or otherwise
interfere with the formation or administration of
any labor organization, including the giving of
financial or other support to it or its organizers or
supporters.” The case records are bare of any
showing of such acts by PAL.
We also do not agree that the agreement
violates the five-year representation limit
mandated by Article 253-A. Under said article, the
representation limit for the exclusive bargaining
agent applies only when there is an extant CBA in
full force and effect. In the instant case, the
parties agreed to suspend the CBA and put in
abeyance the limit on the representation period.
San Miguel Corp Employees Union v. Confesor
(1996)
Article 253-A is a new provision. This was
incorporated by Section 21 of Republic Act No.
6715 (the Herrera-Veloso Law) which took effect
on March 21, 1989. This new provision states that
the CBA has a term of five (5) years instead of
three years, before the amendment of the law as
far as the representation aspect is concerned. All
other provisions of the CBA shall be negotiated not
later than three (3) years after its execution.
The "representation aspect":
- refers to the identity and majority status
of the union that negotiated the CBA as
the exclusive bargaining representative of
the appropriate bargaining unit
concerned.
"All other provisions"
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- simply refers to the rest of the CBA,
economic as well as non-economic
provisions, except representation.
Obviously, the framers of the law wanted to
maintain INDUSTRIAL PEACE and stability by
having both management and labor work
harmoniously together without any disturbance.
Thus, no outside union can enter the establishment
within five (5) years and challenge the status of
the incumbent union as the exclusive bargaining
agent.
Likewise, the terms and conditions of
employment (economic and non-economic) can not
be questioned by the employers or employees
during the period of effectivity of the CBA. The CBA
is a contract between the parties and the parties
must respect the terms and conditions of the
agreement.
Notably, the framers of the law did not give a
fixed term as to the effectivity of the terms and
conditions of employment. It can be gleaned from
their discussions that it was left to the parties to fix
the period.
In the instant case, it is not difficult to
determine the period of effectivity for the non-
representation provisions of the CBA. Taking it
from the history of their CBAs, SMC intended to
have the terms of the CBA effective for three (3)
years reckoned from the expiration of the old or
previous CBA which was on June 30, 1989.
CBA and 3rd Party Applicability Rule
Sundowner Dev’t. Corp. v Drilon (1989)
HELD: Labor contracts such as employment
contracts and CBAs are not enforceable against a
transferee of an enterprise, labor contracts being
in personam, thus binding only between the
parties.
A labor contract merely creates and action in
personam and does not create any real right
which should be respected by third parties. This
conclusion draws its force from the rights of an
employer to select his employees and to decide
when to engage them.
The same can only be restricted by law
through the exercise of police power. There is no
law requiring a bona fide purchaser of assets of an
on-going concern to absorb in its employ the
employees of the latter.
However, although the purchaser of the assets
or enterprise is not legally bound to absorb in its
employ the employers of the seller of such assets
or enterprise, the parties are liable to the
employees if the transaction between the parties is
colored or clothed with bad faith. In the CAB, it is
undisputed that when Mabuhay surrendered the
leased premises to Syjuco and asked Syjuco to
offer same to other lessees it was Syjuco who
found Sundowner and persuaded to lease said
premises. Mabuhay had nothing to do with the
negotiations and consummation of the lease
contract bet Sundowner and Syjuco.
Manlimos v. NLRC (1995)
A change of ownership in a business concern is
not proscribed by law. In Central Azaucarera del
Danao vs. Court of Appeals, this court stated:
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
Part VII : Collective Bargaining
Labor Relations
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 to escape payment of termination
pay. For such a situation is not envisioned in
the law. It strikes at the very concept of
social justice.
In a number of cases on this point, the rule
has been laid down that the sale or disposition
must be motivated by good faith as an element of
exemption from liability. Indeed, an innocent
transferee of a business establishment has no
liability to the employees of the transferor to
continue employing them. Nor is the transferee
liable for past unfair labor practices of the previous
owner, except, when the liability therefor is
assumed by the new employer under the contract
of sale, or when liability arises because of the new
owner's participation in thwarting or defeating the
rights of the employees.
Where such transfer of ownership is in good
faith, the transferee is under no legal duty to
absorb the transferor's employees as there is no
law compelling such absorption.
The most that the transferee may do, for
reasons of public policy and social justice, is to
give preference to the qualified separated
employees in the filling of vacancies in the facilities
of the purchaser.
Disaffiliation: Doctrine of Substitution
Benguet Consolidated, Inc. v BCI Employees
and Workers Union—PAFLU (1968)
It is unquestionable that the seeking of the
union's help by one of its members in connection
with the latter's correct wages constitutes proper
union activity. Consequently, the refusal of the
employer to implement the proper salary scale to
respondent Andrada because he sought the help of
his union in pursuing what he believed was his
right to a salary adjustment, is unfair labor
practice.
Where there occurs a shift in employee’s
union allegiance after the execution of a collective
bargaining contract with their employer, the
employees can change their agent – the labor
union, but the CBA continues to exist.
capital. Association of the locals into the national
union was in furtherance of the same end. These
associations are consensual entities capable of
entering into such legal relations with their
members. The essential purpose was the affiliation
of the local unions into a common enterprise to
increase by collective action the common
bargaining power in respect of the terms and
conditions of labor.
Yet the locals remained the basic units of
association. 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. 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 them up to its expiration date.
Effect f Expiry
New Pacific Timber and Supply Co. Inc v.
NLRC (2000)
WON the terms of an existing CBA particularly
as to the economic provisions, can be extended
beyond the three year period prescribed by law in
the absence of a new agreement?
Until a new CBA 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
agreements.
The law does not provide for an exception nor
qualification as to which of the economic provisions
of the existing agreements are to retain force and
effect, therefore it encompasses all provisions.
The New CBA is given PROSPECTIVE effect
generally since 253 and 253-A provides for an
automatic renewal clause in existing CBAs.
PURPOSE: To avoid creating a gap during
which no agreement would govern. Better for
industrial peace if effectivity of the CBA is longer.

Elisco-Elirol Labor Union v. Noriel (1977)

HELD: Union-NAFLU, consisting of employees
and members of the local union was the principal
party to the agreement.
NAFLU as the mother union" in participating in
the execution of the bargaining agreement acted
merely as agent of the local union freely to serve
the common interest of all its members, including
the freedom to disaffiliate when the circumstances
so warranted.
Locals are separate and distinct units primarily
designed to secure and maintain an equality of
bargaining power between the employer and their
employee-members in the economic struggle for
the fruits of the joint productive effort of labor and

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Part VIII : Unfair Labor Practice
Labor Relations
Part VIII : UNFAIR LABOR
PRACTICE
8.01 INTRODUCTORY CONCEPTS
1. DEFINITION AND GENERAL CONCEPT
Art. 212 (k)
Unfair labor practice" means any unfair labor
practice as expressly defined by the Code.
Art. 247
Concept of unfair labor practice and procedure for
prosecution thereof.
 Unfair labor practices violate the constitutional
right of workers and employees to self-
organization, are inimical to the legitimate
interests of both labor and management,
including their right to bargain collectively and
otherwise deal with each other in an
atmosphere of freedom and mutual respect,
disrupt industrial peace and hinder the
promotion of healthy and stable labor-
management relations.
 Consequently, unfair labor practices are not
only violations of the civil rights of both labor
and management
o but are also criminal offenses against the
State which shall be subject to
prosecution and punishment as herein
provided.
 Subject to the exercise by the President or by
the Secretary of Labor and Employment of the
powers vested in them by Articles 263 and
264 of this Code,
o the civil aspects of all cases involving
unfair labor practices, which may include
claims for actual, moral, exemplary and
other forms of damages, attorney’s fees
and other affirmative relief, shall be under
the jurisdiction of the Labor Arbiters.
o The Labor Arbiters shall give utmost
priority to the hearing and resolution of
all cases involving unfair labor practices.
They shall resolve such cases within thirty
(30) calendar days from the time they are
submitted for decision.
 Recovery of civil liability in the administrative
proceedings shall bar recovery under the Civil
Code.
 No criminal prosecution under this Title may
be instituted without a final judgment finding
that an unfair labor practice was committed,
having been first obtained in the preceding
paragraph.
o During the pendency of such
administrative proceeding, the running of
the period of prescription of the criminal
offense herein penalized shall be
considered interrupted:
o Provided, however, that the final
judgment in the administrative
proceedings shall not be binding in the
criminal case nor be considered as
evidence of guilt but merely as proof of
compliance of the requirements therein
set forth.
Sterling Products Inc. v. Sol (1963)
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The next point at issue is whether or not the
petitioners herein are guilty of unfair labor
practice. Petitioners claim that as respondent Sol
was merely an employee and was not connected
with any labor union, the company cannot be
considered as having committed acts constituting
unfair labor practice as defined in the Industrial
Peace Act, Rep. Act 875.
We find this contention to be well-founded.
The term unfair labor practice has been defined as
any of those acts listed in Sec. 4 of the Act. The
respondent Sol has never been found to commit
any of the acts mentioned in paragraph (a) of Sec.
4. Respondent Sol was not connected with any
labor organization, nor has she ever attempted to
join a labor organization, or to assist, or contribute
to a labor organization. The company, cannot
therefore, be considered as having committed an
unfair labor practice.
DISINI:
 Purpose of the rules on unfair labor
practice: protection of right to self-
organization and/or collective bargaining
 The employee is not only protected
from the employer but also from labor
organization
 Employer is also protected from ULP
committed by a labor organization
 The public is also protected because it
has an interest in continuing industrial
peace.
 Note the difference between the wordings of
Art. 248(a) and Art. 249(a).
Art. 248 (a) – “interfere,
restraint, coerce”
Art. 249(a) – “restraint, coerce”
 “interfere” not included in Art. 249
because any act of a labor
organization amounts to
interference to a right to self-
organization
 Art. 248(a) and Art. 249(a) are the general
grant of protection.
 all other cases of ULP enumerated
under the said provisions are
derivatives of Art. 248(a) and Art.
249(a)
2. CONSTRUCTION
HSBC Employee Union V. NLRC (1997)
Necessarily, a determination of the validity of
the Batik's unilateral Implementation of the JE
Program or the Union's act of engaging in
concerted activities involves all appraisal of their
motives. In cases of this nature, motivations are
seldom expressly avowed, and avowals are not
always candid.
There must thus he a measure of reliance in
the administrative agency. It was incumbent upon
the labor arbiter, in the first instance, to weigh
such expressed motives in determining the effect
of an otherwise equivocal act.
The Labor Code does not undertake the
impossible task of specifying in precise and
unmistakable language each incident which
constitute, an unfair labor practice. Rather, it
leaves to the court the work of applying the law's
general prohibitory language in light of infinite
combinations of events which may be charged
as violative of its terms.
Part VIII : Unfair Labor Practice
Labor Relations
3. LAW NOMENCLATURE AND INTER- The aforecited ILO Conventions are
RELATIONS OF ACTS OF ULP incorporated in our Labor Code, particularly in
Article 243 thereof, which provides:
Art. 212 (k) ART. 243. COVERAGE AND EMPLOYEES’ RIGHT
Unfair labor practice" means any unfair labor TO SELF-ORGANIZATION. – All persons
employed in commercial, industrial and
practice as expressly defined by the Code.
agricultural enterprises and in religious,
Art. 248 charitable, medical or educational institutions
Unfair labor practices of employers. It shall be whether operating for profit or not, shall have
unlawful for an employer to commit any of the the right to self-organization and to form, join,
following unfair labor practice: or assist labor organizations of their own
choosing for purposes of collective bargaining.
a. To interfere with, restrain or coerce employees Ambulant, intermittent and itinerant workers,
self-employed people, rural workers and those
in the exercise of their right to self-
without any definite employers may form labor
organization; organizations for their mutual aid and
protection.
Art. 249 and Articles 248 and 249 respecting ULP of
Unfair labor practices of labor organizations. It employers and labor organizations.
shall be unfair labor practice for a labor Article 248(a) of the Labor Code, considers it
organization, its officers, agents or an unfair labor practice when an employer
representatives: interferes, restrains or coerces employees in
the exercise of their right to self-organization
or the right to form association. The right to
a. To restrain or coerce employees in the
self-organization necessarily includes the right
exercise of their right to self-organization. to collective bargaining.
However, a labor organization shall have the Parenthetically, if an employer interferes in
right to prescribe its own rules with respect the selection of its negotiators or coerces the Union
to the acquisition or retention of to exclude from its panel of negotiators a
membership; representative of the Union, and if it can be
inferred that the employer adopted the said act to
Standard Chartered Bank, etc. v. Confessor yield adverse effects on the free exercise to right
(2004) to self-organization or on the right to collective
"Interference" under Article 248 (a) of the bargaining of the employees, ULP under Article
Labor Code 248(a) in connection with Article 243 of the Labor
The petitioner asserts that the private Code is committed.
respondent committed ULP, i.e., interference in the In order to show that the employer committed
selection of the Union’s negotiating panel, when ULP under the Labor Code, substantial evidence is
Diokno, the Bank’s HR Manager, suggested to the required to support the claim. In the case at bar,
Union President that Umali, Jr., President of the the Union bases its claim of interference on the
NUBE, be excluded from the Union’s negotiating alleged suggestions of Diokno to exclude Umali
panel. from the Union’s negotiating panel.
The Union claims that interference in the The circumstances that occurred during the
choice of the Union’s bargaining panel is negotiation do not show that the suggestion made
tantamount to ULP. by Diokno to Divinagracia is an anti-union conduct
Under the International Labor Organization from which it can be inferred that the Bank
Convention (ILO) No. 87 FREEDOM OF consciously adopted such act to yield adverse
ASSOCIATION AND PROTECTION OF THE RIGHT effects on the free exercise of the right to self-
TO ORGANIZE to which the Philippines is a organization and collective bargaining of the
signatory, "workers and employers, without employees, especially considering that such was
distinction whatsoever, shall have the right to undertaken previous to the commencement of the
establish and, subject only to the rules of the negotiation and simultaneously with Divinagracia’s
organization concerned, to job organizations of suggestion that the bank lawyers be excluded from
their own choosing without previous its negotiating panel.
authorization." The records show that after the initiation of
Workers’ and employers’ organizations shall the collective bargaining process, with the inclusion
have the right to draw up their constitutions and of Umali in the Union’s negotiating panel, the
rules, to elect their representatives in full freedom negotiations pushed through. The complaint was
to organize their administration and activities and made only on August 16, 1993 after a deadlock
to formulate their programs.43 Article 2 of ILO was declared by the Union.
Convention No. 98 pertaining to the Right to It is clear that such ULP charge was merely an
Organize and Collective Bargaining, provides: afterthought. The accusation occurred after the
Article 2 (1) Workers’ and employers’
organizations shall enjoy adequate protection
arguments and differences over the economic
against any acts or interference by each other provisions became heated and the parties had
or each other’s agents or members in their become frustrated. It happened after the parties
establishment, functioning or administration. started to involve personalities.
(2) In particular, acts which are designed to
promote the establishment of workers’
organizations under the domination of 8.02 UNFAIR LABOR PRACTICE:
employers or employers’ organizations or to EMPLOYER AND LABOR ORGANIZATION
support workers’ organizations by financial or ACTS VIOLATING RIGHT OF SELF-
other means, with the object of placing such
organizations under the control of employers
ORGANZATION
or employers’ organizations within the
meaning of this Article. ULP AND MANAGEMENT FUNCTIONS

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Part VIII : Unfair Labor Practice
Labor Relations
Royal InterOcean Lines v. CIR (1960)
"The statute goes no further than to safeguard
the right of employees to self-organization and to
select representatives of their own choosing for
collective bargaining or other mutual protection
without restraint or coercion by their employer.
"The protection of workers' right to self-
organization in no way interfere with employer's
freedom to enforce such rules and orders as are
necessary to proper conduct of his business, so
long as employer's supervision is not for the
purpose of intimidating or coercing his employees
with respect to their self-organization and
representation.
"It is the function of the court to see that the
rights of self- organization and collective
bargaining guaranteed by the Act are amply
secured to the employee, but in its effort to
prevent the prescribed unfair labor practices, the
court must be mindful of the welfare of the honest
employer.
Despite the employees' right to self-
organization, the employer therefore still retains
his inherent right to discipline his employees, his
normal prerogative to hire or dismiss them. The
prohibition is directed only against the use of the
right to employ or discharge as an instrument of
discrimination, interference or oppression because
of one's labor or union activities.
Great Pacific Life Employees Union v. Great
Pacific Life Assurance Corp. (1999)
While an act or decision of an employer may
be unfair, certainly not every unfair act or decision
constitutes unfair labor practice (ULP) as defined
and enumerated under Art. 248 of the Labor
Code.18
There should be no dispute that all the
prohibited acts constituting unfair labor practice in
essence relate to the workers' right to self-
organization. Thus, an employer may be held liable
under this provision if his conduct affects in
whatever manner the right of an employee to self-
organize. The decision of respondent GREPALIFE to
consider the top officers of petitioner UNION as
unfit for reinstatement is not essentially
discriminatory and constitutive of an unlawful labor
practice of employers under the above-cited
provision. Discriminating in the context of the
Code involves either encouraging membership in
any labor organization or is made on account of
the employee's having given or being about to give
testimony under the Labor Code. These have not
been proved in the case at bar.
1. INTERFERENCE, RESTRAINT AND
COERCION
Art. 248
Unfair labor practices of employers. It shall be
unlawful for an employer to commit any of the
following unfair labor practice:
a. To interfere with, restrain or coerce employees
in the exercise of their right to self-
organization;
Art. 277
g. The Ministry shall help promote and gradually
develop, with the agreement of labor
organizations and employers, labor-
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management cooperation programs at
appropriate levels of the enterprise based on
the shared responsibility and mutual respect in
order to ensure industrial peace and
improvement in productivity, working
conditions and the quality of working life.
In establishments where no legitimate labor
organization exists, labor-management
committees may be formed voluntarily by
workers and employers for the purpose of
promoting industrial peace. The Department of
Labor and Employment shall endeavor to
enlighten and educate the workers and
employers on their rights and responsibilities
through labor education with emphasis on the
policy thrusts of this Code.
c.f. Art. 249
Unfair labor practices of labor organizations. It
shall be unfair labor practice for a labor
organization, its officers, agents or
representatives:
a. To restrain or coerce employees in the exercise
of their right to self-organization. However, a
labor organization shall have the right to
prescribe its own rules with respect to the
acquisition or retention of membership;
2. NON-UNION MEMBERSHIP OR
WITHDRAWAL FROM MEMBERSHIP AS
CONDITION EMPLOYMENT
Art. 248
Unfair labor practices of employers.
(b) To require as a condition of employment that a
person or an employee shall not join a labor
organization or shall withdraw from one to which
he belongs;
3. CONTRACTING OUT TO DISCOURAGE
UNIONISM
Art. 248
Unfair labor practices of employers.
(c) To contract out services or functions being
performed by union members when such will
interfere with, restrain or coerce employees in the
exercise of their rights to self-organization;
4. COMPANY DOMINATION UNION
Art. 248
Unfair labor practices of employers.
(d) To initiate, dominate, assist or otherwise
interfere with the formation or administration of
any labor organization, including the giving of
financial or other support to it or its organizers or
supporters;
5. DISCRIMINATION
ENCOURAGE/DISCOURAGE UNIONISM
Art. 248
Unfair labor practices of employers.
(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.
- Nothing in this Code or in any other law
shall stop the parties from requiring
membership in a recognized collective
Part VIII : Unfair Labor Practice
Labor Relations
bargaining agent as a condition for
employment, except those employees who
are already members of another union at
the time of the signing of the collective
bargaining agreement.
- Employees of an appropriate bargaining unit
who are not members of the recognized
collective bargaining agent may be assessed
a reasonable fee equivalent to the dues and
other fees paid by members of the
recognized collective bargaining agent, if
such non-union members accept the
benefits under the collective bargaining
agreement: Provided, that the individual
authorization required under Article 242,
paragraph (o) of this Code shall not apply to
the non-members of the recognized
collective bargaining agent;
Art. 249
Unfair labor practices of labor organizations.
(b) To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination against an employee with respect to
whom membership in such organization has been
denied or to terminate an employee on any ground
other than the usual terms and conditions under
which membership or continuation of membership
is made available to other members;
6. RETALIATION TESTIMONY AGAINST
EMPLOYER
Art. 248
Unfair labor practices of employers.
(f) To dismiss, discharge or otherwise prejudice or
discriminate against an employee for having given
or being about to give testimony under this Code;
7. EXACTION- FEATHERBEDDING
Art. 249
Unfair labor practices of labor organizations.
(b) To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination against an employee with respect to
whom membership in such organization has been
denied or to terminate an employee on any ground
other than the usual terms and conditions under
which membership or continuation of membership
is made available to other members;
NATURE OF ACT
Interrogation
Scoty’s Department Store v. Micaller (1956)
We are afraid that we cannot now look into
points 1 and 2 for they involve questions of fact.
The industrial court has made a careful analysis of
the evidence and has found the petitioners have
really subjected complaint and her co-employees
to a series of questioning regarding their
membership in the union or their union activities
which in contemplation of law are deemed acts
constituting unfair labor practice
Our law on this point is of recent enactment
and so we may find difficulty in determining what
acts or circumstances may institute unfair labor
practice within its purview for lack of appropriate
precedents. However, there are many American
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cases that may be resorted to where been found
guilty of unfair labor practice under similar
circumstances and was given the corresponding
sanction. One of such cases, which in our opinion
is on all fours with the present, is NLRB vs. Harris-
Woodson Co. where the following was held:
As to the Board's finding of interference, there is
abundant evidence of the questioning of employees as
to membership in the union and of anti-union
expressions by the company's superintendent made in
such away as to discourage union membership. The rule
with respect thereto is well settled and was stated by us
recently in the case of NLRB vs. Norfolf-Southern Bus
Corpn. 159 Fed 2d 518, where we said:
"Questioning of employees concerning union
membership and activities and disparaging remarks
by supervisory employees made in such away as to
hamper the exercise of free choice on the part of the
employees, have been uniformly condemned as a
violation of the Act.
As to the discharge of the president of the union, it
appears that she was discharged in the Spring of
1945 at the time when question of union
representation was becoming acute. The Company
contends that the ground of the discharge was
insubordinate language and conduct, and evidence of
a controversy between the employer and the
superintendent was not the true reason for the
discharge, but only a pretext. It was shown that Mrs.
Edler was a competent and efficient employee with a
long record of faithful service, and by the
controversies and even quarrels between the
employees and the superintendent had not therefore
led to discharge. According to Mrs. Edler's testimony,
which was accepted by the Board, the controversy
was a very minor character and furnished to
sufficient justification for the peremptory discharge of
an efficient employee with a long record of service.
Under such circumstances, the Board may very well
have concluded that the true reason for the
discharge was other than the union and her activity
in its behalf.
This is all the more reasonable in view of the
manifest anti-union bias of the company's officers
and superintendent and for the controversy with
regard to the recognition of the union which had
just been revived…
Phil. Steam Navigation Co. v. Phil. Marine
Officer’s Guild (1965)
The acts found by respondent court
constituting the foregoing ULP are (1) the
interrogation and investigation by PHILSTEAM's
supervisory officials of its captains, deck officers
and engineers, to determine whether they had
authorized PMOG to act as their bargaining agent;
(2) the subjection of PMOG to vilification; and (3)
the participation of PHILSTEAM's pier
superintendent in soliciting membership for a
competing union.
PHILSTEAM admits that it initiated and carried
out an investigation of its officers as to their
membership in PMOG and whether they had given
PMOG authority to represent them in collective
bargaining.
o Reason for this according to PHILSTEAM,
was merely to ascertain for itself the
existence of a duty to bargain collectively
with PMOG, a step allegedly justified by
PMOG's refusal to furnish proof of
majority representation.
The asserted reason for the investigation
cannot be sustained. The record discloses that
such investigation was started even before it
received PMOG's reply stating a refusal to
submit proof of majority representation.
Part VIII : Unfair Labor Practice
Labor Relations
An employer is not denied the privilege of
interrogating its employees as to their union
affiliation, provided the same is for a legitimate
purpose and assurance is given by the employer
that no reprisals would be taken against unionists.
Nonetheless, any employer who engages in
interrogation does so with notice that he risks a
finding of unfair labor practice if the circumstances
are such that his interrogation restrains or
interferes with employees in the exercise of their
rights to self-organization. (Blue Flash Express
Co., Inc., 109 NLRB 591.)  BLUE FLASH
DOCTRINE
The respondent court had found that
PHILSTEAM's interrogation of its employees had in
fact interfered with, restrained and coerced the
employees in the exercise of their rights to self-
organization Such finding being upon questions of
fact, the same cannot be reversed herein, because
it is fully supported by substantial evidence.
The rule in this jurisdiction is that subjection
by the company of its employees to a series of
questioning regarding their membership in the
union or their union activities, in such a way as to
hamper the exercise of free choice on their part,
constitutes unfair labor practice (Scoty's
Department Store vs. Micaller). PHILSTEAM's
afore-stated interrogation squarely falls under this
rule.
Polling
Speech
Insular Life Assurance Co. Employees Assn.
v. Insular Life Assurance Co. Ltd (1971)
The respondents contend that the sending of
the letters, exhibits A and B, constituted a
legitimate exercise of their freedom of speech.
We do not agree. The said letters were
directed to the striking employees individually - by
registered special delivery mail at that - without
being coursed through the Unions which were
representing the employees in the collective
bargaining.
"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." (31 Am.
Jur. 563, citing NLRB v. Montgomery Ward & Co.
[CA 9th] 133 F2d 676, 146 ALR 1045)
Indeed, it is an unfair labor practice for an
employer operating under a collective bargaining
agreement to negotiate or to attempt to negotiate
with his employees individually in connection with
changes in the agreement. And the basis of the
prohibition regarding individual bargaining with the
strikers is that although the union is on strike, the
employer is still under obligation to bargain with
the union as the employees' bargaining
representative
Indeed, some such similar actions are illegal
as constituting unwarranted acts of interference.
Thus, the act of a company president in writing
letters to the strikers, urging their return to work
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on terms inconsistent with their union
membership, was adjudged as constituting
interference with the exercise of his employees'
right to collective bargaining (Lighter Publishing,
CCA 7th, 133 F2d 621).
Moreover, since exhibit A is a letter containing
promises of benefits to the employees in order to
entice them to return to work, it is not protected
by the free speech provisions of the Constitution
(NLRB v. Clearfield Cheese Co., Inc., 213 F2d 70).
The letters, exhibits A and B, should not be
considered by themselves alone but should be read
in the light of the preceding and subsequent
circumstances surrounding them. The letters
should be interpreted according to the "totality of
conduct doctrine,"
o whereby the culpability of an employer's
remarks were to be evaluated not only on
the basis of their implicit implications, but
were to be appraised against the
background of and in conjunction with
collateral circumstances.
o Under this 'doctrine' expressions of
opinion by an employer which, though
innocent in themselves, frequently were
held to be culpable because of the
circumstances under which they were
uttered, the history of the particular
employer's labor relations or anti-union
bias or because of their connection with
an established collateral plan of coercion
or interference." (Rothenberg on
Relations, p. 374, and cases cited
therein.)
Espionage
Insular Life Assurance Co. Employees Assn.
v. Insular Life Assurance Co. Ltd (1971)
The lower Court justified the constructive
dismissal of Ibarra allegedly because he committed
acts inimical to the interest of the respondents
when, as president of the union, he advised the
strikers that they could use force and violence to
have a successful picket and that picketing was
precisely intended to prevent the non-strikers and
company clients and customers from entering the
Companies' buildings.
Even if this were true, the record discloses
that the picket line had been generally peaceful,
and that incidents happened only when
management men made incursions into and tried
to break the picket line. At any rate, with or
without the advice of Ibarra, picketing is inherently
explosive.
The picket line being the natural result of the
respondents' ULP, Ibarra's misconduct is at most a
misdemeanor which is not a bar to reinstatement.
Besides, the only evidence presented by the
Companies regarding Ibarra's participation in the
strike was the testimony of one Rodolfo
Encarnacion, a former member of the board of
directors of the petitioner union, who became a
"turncoat" and who likewise testified as to the
union activities of Atty. Lacsina, Ricardo Villaruel
and others - another matter which emphasizes the
respondents' unfair labor practice.
o For under the circumstances, there is
good ground to believe that
Encarnacion was made to spy on the
activities of the union members. This
Part VIII : Unfair Labor Practice
Labor Relations
act of the respondents is considered
unjustifiable interference in the union
activities of the petitioners and is unfair
labor practice.
"It has been held in a great number of
decisions that espionage by an employer of union
activities, or surveillance thereof, are such
instances of interference, restraint or coercion of
employees in connection with their right to
organize, form and join unions as to constitute
unfair labor practice . . .
o 'Nothing is more calculated to interfere
with, restrain and coerce employees in
the exercise of their right to self-
organization than such activity even
where no discharges result. The
information obtained by means of
espionage is invaluable to the employer
and can be used in a variety of cases to
break a union.'
o The unfair labor practice is committed
whether the espionage is carried on by a
professional labor spy or detective, by
officials or supervisory employees of the
employer, or by fellow employees acting
at the request or direction of the
employer, or an ex-employee . . ."
Economic Coercion And Inducement
Insular Life Assurance Co. Employees Assn.
v. Insular Life Assurance Co. Ltd (1971)
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.
Likewise violative of the right to organize,
form and join labor organizations are the following
acts:
o the offer of a Christmas bonus to all
"loyal" employees of a company shortly
after the making of a request by the
union to bargain; wage increases given
for the purpose of mollifying employees
after the employer has refused to bargain
with the union, or for the purpose of
inducing striking employees to return to
work; the employer's promises of benefits
in return for the strikers' abandonment of
their strike in support of their union; and
the employer's statement, made about 6
weeks after the strike started, to a group
of strikers in a restaurant to the effect
that if the strikers returned to work, they
would receive new benefits in the form of
hospitalization, accident insurance, profit-
sharing, and a new building to work in.
"The test of whether an employer has
interfered with and coerced employees within the
meaning of subsection (a) (1) is whether the
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employer has engaged in conduct which it may
reasonably be said tends to interfere with the free
exercise of employees' rights under section 3 of
the Act, and 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."
Union Solicitation And Distribution Of Literature
And Materials
Lechmere, Inc. v. NLRB L. Ed. 2d 79 (1992)
Lechmere did not commit an unfair labor
practice by barring nonemployee union organizers
from its property.
(a) By its plain terms, the NLRA confers rights
only on employees, not on unions or their
nonemployee organizers. Thus, as a rule, an
employer cannot be compelled to allow
nonemployee organizers onto his property.
(b) At least as applied to nonemployee union
organizers, Jean Country is inconsistent with
this Court's past interpretation of 7.
Babcock's teaching is straightforward: 7
simply does not protect nonemployee union
organizers except in the rare case where "the
inaccessibility of employees makes
ineffective the reasonable attempts by
nonemployees to communicate with them
through the usual channels." It is only when
reasonable access to employees is infeasible
that it becomes appropriate to balance 7 and
private property rights.
(c) The facts in this case do not justify
application of Babcock's inaccessibility
exception. Because Lechmere's employees
do not reside on its property, they are
presumptively not "beyond the reach" of the
union's message. Nor does the fact that they
live in a large metropolitan area render them
"inaccessible." Because the union failed to
establish the existence of any "unique
obstacles" that frustrated access to
Lechmere's employees, the Board erred in
concluding that Lechmere committed an
unfair labor practice by barring the non-
employee organizers from its property.
Republic Aviation Corp. v. NLRB 324 US 793
(1945)
The employer, military aircraft manufacturer,
adopted, well before any union activity at the
plant, a general rule against soliciting which read
as follows: 'Soliciting of any type cannot be
permitted in the factory or offices.'
An employee persisted after being warned of
the rule in soliciting union membership in the plant
by passing out application cards to employees on
his own time during lunch periods. The employee
was discharged.
3 other employees were discharged for
wearing union steward buttons in the plant after
being requested to remove the insignia. The union
was at that time active in seeking to organize the
plant.
Held: the Supreme Court held that it was
permissible for the Board to strike the balance in
Part VIII : Unfair Labor Practice
Labor Relations
favor of employees challenging an employer's no-
solicitation policy. The Court affirmed the Board's
conclusion that employees have a presumptive
right to wear union insignia, a right that cannot be
abridged unless the employer is able to establish
that a special circumstance exists, which justifies
banning such insignia.
NLRB v. Babcock & Wilcox Co., 351 U.S. 105
(1956).
The Babcock & Wilcox Co. operated a
manufacturing plant on a 100-acre tract about one
mile from a community of 21,000 people. The
plant buildings were enclosed within a fence,
employee access being through several gates.
Approximately 90% of the employees drove to
work in private cars, and the company maintained
a parking lot for the employees.
Only employees and deliverymen normally
used the parking lot.
The company had a rule forbidding the
distribution of literature on company property.
The Board found that the company's parking
lot and the walkway leading from it to the plant
entrance were the only "safe and practicable"
places in the vicinity of the plant for distribution of
union literature, and held the company guilty of an
unfair labor practice for enforcing the no-
distribution rule and thereby denying union
organizers limited access to company property.
The Board ordered the company to rescind its no-
distribution rule insofar as it related to non-
employee union representatives seeking to
distribute union literature on the parking lot and
walk-way area.
The CA refused enforcement of the Board's
order on the ground that the Act did not authorize
the Board to impose a servitude on an employer's
property where no employee was involved.
SC affirmed on the ground that the availability
of alternative channels of communication made the
intrusion on the employer's property rights ordered
by the Board unwarranted.
Guiding principle for adjusting conflicts
between Sec. 7 rights and property rights:
 "Organization rights are granted to
workers by the same authority, the
National Government, that preserves
property rights. Accommodation between
the two must be obtained with as little
destruction of one as is consistent with
the maintenance of the other.
 The employer may not affirmatively
interfere with organization; the union may
not always insist that the employer aid
organization.
 But when the inaccessibility of employees
makes ineffective the reasonable
attempts by non-employees to
communicate with them through the
usual channels, the right to exclude from
property has been required to yield to the
extent needed to permit communication
of information on the right to organize."
Discrimination
Wise and Co. Inc. v. Wise and Co. inc.
Employees Union, NATU (1989)
The center of controversy in this petition is
whether the grant by management of profit
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sharing benefits to its non-union member
employees is discriminatory against its workers
who are union members?
a. Respondent union can not claim that there is
grave abuse of discretion by the petitioner in
extending the benefits of profit sharing to the
non-union employees as they are two (2)
groups not similarly situated. These nonunion
employees are not covered by the CBA. They
do not derive and enjoy the benefits under the
CBA.
b. The Court holds that it is the prerogative of
management to regulate, according to its
discretion and judgment, all aspects of
employment. This flows from the established
rule that labor law does not authorize the
substitution of the judgment of the employer
in the conduct of its business.
c. The grant by petitioner of profit sharing
benefits to the employees outside the
"bargaining unit" falls under the ambit of its
managerial prerogative. It appears to have
been done hi good faith and without ulterior
motive. More so when as in this case there is a
clause in the CBA where the employees are
classified into those who are members of the
union and those who are not. In the case of
the union members, they derive their benefits
from the terms and conditions of the CBA
contract which constitute the law between the
contracting parties. Both the employer and the
union members are bound by such agreement.
d. However, the court serves notice that it will
not hesitate to strike down any act of the
employer that tends to be discriminatory
against union members. It is only because of
the peculiar circumstances of this case
showing there is no such intention that this
court ruled otherwise.
Run-Away Shop
Complex Electronics Employees Association v.
NLRC (1999)
The Union anchors its position on the fact that
Lawrence Qua is both the president of Complex
and Ionics and that both companies have the same
set of Board of Directors. It claims that business
has not ceased at Complex but was merely
transferred to Ionics, a runaway shop.
Held: The Union's contentions are untenable.
A “runaway shop” is defined as one wherein
the employer moves its business to another
location or it temporarily closes its business for
anti-union purposes. A “runaway shop” in this
sense, is a relocation motivated by anti-union
animus rather than for business reasons.
In this case, however, Ionics was not set up
merely for the purpose of transferring the business
of Complex. At the time the labor dispute arose at
Complex, Ionics was already existing as an
independent company.
The mere fact that one or more corporations
are owned or controlled by the same or single
stockholder is not a sufficient ground for
disregarding separate corporate personalities.
Ionics may be engaged in the same business
as that of Complex, but this fact alone is not
enough reason to pierce the veil of corporate
fiction of the corporation.
Part VIII : Unfair Labor Practice
Labor Relations
Well-settled is the rule that a corporation has
a personality separate and distinct from that of its
officers and stockholders. This fiction of corporate
entity can only be disregarded in certain cases
such as when it is used to defeat public
convenience, justify wrong, protect fraud, or
defend crime.
As very clearly established, the closure was
triggered by the customers' pull-out of their
equipment, machinery and materials, who were
alarmed by the pending labor dispute and the
imminent strike by the union, and as a protection
to their interest pulled-out of business from
Complex who had no recourse but to cease
operation to prevent further losses.
The indiscretion committed by the Union in
filing the notice of strike, which to our mind is not
the proper remedy to question the amount of
benefits due the complainants who will be
retrenched at the closure of the Lite-On Line, gave
a wrong signal to customers of Complex, which
consequently resulted in the loss of employment of
not only a few but to all the of the workers. It
may be worth saying that the right to strike should
only be a remedy of last resort and must not be
used as a show of force against the employer.
8.03 UNFAIR LABOR PRACTICE;
EMPLOYER AND LABOR ORGANIZATION
ACTS VIOLATIVE OF RIGHT TO
COLLECTIVE BARGAINING
1. VIOLATE DUTY TO BARGAIN
Art. 248
Unfair labor practices of employers.
(g) To violate the duty to bargain collectively as
prescribed by this Code;
Art. 249
Unfair labor practices of labor organizations
(c) To violate the duty, or refuse to bargain
collectively with the employer, provided it is
the representative of the employees;
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;
b. Should differences arise on the basis of such
notice and reply, either party may request for
a conference which shall begin not later than
ten (10) calendar days from the date of
request.
c. If the dispute is not settled, the Board shall
intervene upon request of either or both
parties or at its own initiative and immediately
call the parties to conciliation meetings. The
Board shall have the power to issue
subpoenas requiring the attendance of the
parties to such meetings. It shall be the duty
of the parties to participate fully and promptly
in the conciliation meetings the Board may
call;
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d. During the conciliation proceedings in the
Board, the parties are prohibited from doing
any act which may disrupt or impede the early
settlement of the disputes; and
e. The Board shall exert all efforts to settle
disputes amicably and encourage the parties
to submit their case to a voluntary arbitrator.
Art. 251
Duty to bargain collectively in the absence of
collective bargaining agreements.
 In the absence of an agreement or other
voluntary arrangement providing for a more
expeditious manner of collective bargaining, it
shall be the duty of employer and the
representatives of the employees to bargain
collectively in accordance with the provisions
of this Code.
Art. 252
Meaning of duty to bargain collectively.
 The duty to bargain collectively means the
performance of a mutual obligation
o to meet and convene promptly and
expeditiously in good faith for the purpose
of negotiating an agreement with respect
o 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 and executing a contract
incorporating such agreements if
requested by either party but such duty
does not compel any party to agree to a
proposal or to make any concession.
Art. 253
Duty to bargain collectively when there exists a
collective bargaining agreement.
 When there is a collective bargaining
agreement,
o the duty to bargain collectively shall also
mean that neither party shall terminate
nor modify such agreement during its
lifetime.
o However, either party can serve a written
notice to terminate or modify the
agreement at least sixty (60) days prior
to its expiration date.
o 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.
General Milling Corp. v. Court of Appeals
(2004)
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 workers, 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.
Part VIII : Unfair Labor Practice
Labor Relations
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.
2. NEGOTIATION OR ATTORNEY’S FEES
Art. 248
Unfair labor practices of employers.
(h) To pay negotiation or attorney’s fees to the
union or its officers or agents as part of the
settlement of any issue in collective
bargaining or any other dispute; or
3. VIOLATE COLLECTIVE BARGAINING
AGREEMENT
Art. 248
Unfair labor practices of employers
(g) To violate the duty to bargain collectively as
prescribed by this Code;
Art. 249
Unfair labor practices of labor organizations
(f) To violate a collective bargaining agreement
Art. 261
Jurisdiction of Voluntary Arbitrators or panel of
Voluntary Arbitrators.
 x x x. Accordingly, 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. x x x
Singapore Airlines Employees Association v.
NLRC (1984)
Despite a finding of petitioner's entitlement to
her claim for reimbursement, we are not prepared
to pronounce respondent SIA guilty of unfair labor
practice.
SIA's refusal to grant benefits was not a willful
evasion of its obligations under the CBA but was
due to an honest mistake in the belief that the
same is not covered by the aforementioned CBA
provision. An error in interpretation without malice
or bad faith does not constitute unfair labor
practice. We take judicial notice of the fact that
honest differences in construction may arise in the
actual application of contractual provisions.
PAL V. NLRC (1997)
Thus, as of March 21, 1989, violations of
collective bargaining agreements were no longer
deemed unfair labor practices - except those gross
in character - and were considered mere
grievances resolvable through the appropriate
grievance machinery, or voluntary arbitration
provided in the CBA.
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Jurisdiction over such violations was
withdrawn from the Labor Arbiters and vested in
the voluntary arbitrator, the former (including the
Commission itself, its Regional Offices, and the
Regional Directors of the Department of Labor and
Employment) being in fact enjoined not to
"entertain disputes, grievances or matters under
the exclusive and original jurisdiction of the
Voluntary Arbitrators or panel of Voluntary
Arbitrators and *** (instead) immediately dispose
and refer the same to the Grievance Machinery or
Voluntary Arbitration provided in the Collective
Bargaining Agreement."
PAL may not be regarded as precluded from
impugning the jurisdiction of the Arbiter and the
Commission because, at the time that the
proceedings were initiated before the former,
adjudged by him, and thereafter appealed to and
resolved by the latter adversely to PAL, the law
amending their jurisdiction (R.A. 6715) had not
come into effect.
As already observed, it was only after PAL's
motion for reconsideration of November 21,1988
had been filed and was awaiting resolution before
the NLRC that said law became effective, on March
21, 1989. Under the circumstances, no estoppel of
the right to question jurisdiction can be ascribed to
PAL.
8.04 EMPLOYER FUNCTIONS AND ULP
San Miguel Corp. Employees Union v.
Bersamira (1990)
A "labor dispute" as defined in Article 212 (1)
of the Labor Code includes "any controversy or
matter concerning terms and conditions of
employment or the association or representation of
persons in negotiating, fixing, maintaining,
changing, or arranging the terms and conditions of
employment, regardless of whether the disputants
stand in the proximate relation of employer and
employee."
While it is SanMig's submission that no
employer-employee relationship exists between
itself, on the one hand, and the contractual
workers of Lipercon and D'Rite on the other,
o a labor dispute can nevertheless exist
"regardless of whether the disputants
stand in the proximate relationship of
employer and employee" (Article 212 [1],
Labor Code, supra) provided the
controversy concerns, among others, the
terms and conditions of employment or a
"change" or "arrangement" thereof (ibid).
o Put differently, and as defined by law, the
existence of a labor dispute is not
negatived by the fact that the plaintiffs
and defendants do not stand in the
proximate relation of employer and
employee.
That a labor dispute, as defined by the law,
does exist herein is evident. At bottom, what the
Union seeks is to regularize the status of the
employees contracted by Lipercon and D'Rite and,
in effect, that they be absorbed into the working
unit of SanMig. This matter definitely dwells on the
working relationship between said employees vis-
a-vis SanMig.
o Terms, tenure and conditions of their
employment and the arrangement of
those terms are thus involved bringing
Part VIII : Unfair Labor Practice
Labor Relations
the matter within the purview of a labor
dispute.
o Further, the Union also seeks to represent
those workers, who have signed up for
Union membership, for the purpose of
collective bargaining.
Obvious then is that representation and
association, for the purpose of negotiating the
conditions of employment are also involved. In
fact, the injunction sought by SanMig was precisely
also to prevent such representation.
o Again, the matter of representation falls
within the scope of a labor dispute.
Neither can it be denied that the
controversy below is directly connected
with the labor dispute already taken
cognizance of by the NCMB-DOLE (NCMB-
NCR-NS-O1-021-89; NCMB NCR NS-01-
093-83).
As the case is indisputably linked with a labor
dispute, jurisdiction belongs to the labor tribunals.
As explicitly provided for in Article 217 of the Labor
Code, prior to its amendment by R.A. No. 6715 on
21 March 1989, since the suit below was instituted
on 6 March 1989,
o Labor Arbiters have original and exclusive
jurisdiction to hear and decide the
following cases involving all workers
including "
1. unfair labor practice cases;
2. those that workers may file
involving wages, hours of work and
other terms and conditions of
employment; and
3. cases arising from any violation of
Article 265 of this Code, including
questions involving the legality of
striker and lockouts.
The claim of SanMig that the action below is
for damages under Articles 19, 20 and 21 of the
Civil Code would not suffice to keep the case
within the jurisdictional boundaries of regular
Courts.
o That claim for damages is interwoven with
a labor dispute existing between the
parties and would have to be ventilated
before the administrative machinery
established for the expeditious settlement
of those disputes.
o To allow the action filed below to prosper
would bring about "split jurisdiction"
which is obnoxious to the orderly
administration of justice
We recognize the proprietary right of SanMig
to exercise an inherent management prerogative
and its best business judgment to determine
whether it should contract out the performance of
some of its work to independent contractors,
o However, 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 (Section 3, Article
XIII, 1987 Constitution) equally call for
recognition and protection. Those
contending interests must be placed in
proper perspective and equilibrium.
Republic Savings Bank v. CIR (1967)
It is for the Court of Industrial Relations, in
the first instance, to make the determination, "to
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weigh the employer's expressed motive in
determining the effect on the employees of
management's otherwise equivocal act" (NLRB vs.
Stowe Spinning Co., 336 U.S. 226).
For the Industrial Peace Act does not
undertake the impossible task of specifying in
precise and unmistakable language each incident
which constitutes an unfair labor practice, rather, it
leaves to the court the work of applying the Act's
general prohibitory language in the light of infinite
combinations of events which may be charged as
violative of its terms
8.05 MOTIVE, CONDUCT AND PROOF
1. EMPLOYER MOTIVE AND PROOF
Visayan Bicycle Manuf. Co. v. National Labor
Union (1965)
The findings of the CIR to the foregoing effect
are supported by substantial evidence. No reason
obtains to alter the conclusion that Besana and
Rodiel were in reality dismissed because of their
union activities and not because of their violation
of a company rule against fight in the premises or
during working hours.
Furthermore, the so-called violation of
company rules having been brought about by the
company itself, thru the recent employment of
Saturnino Reyes and Silvestre Pacia who provoked
the fight as above indicated, the same cannot be
regarded as a ground to punish the
aforementioned employees.
Such being the case, the dismissal of Besana
and Rodiel constituted unfair labor practice under
Section 4(a) (1) and (4) of Republic Act 875:
Sec. 4. Unfair Labor Practices.-
(a) It shall be unfair labor practice for an
employer:
1) To interfere with, restrain ,or coerce
employees in the exercise of their rights
guaranteed in section three;"
4) To discriminate in regard to hire or
tenure of employment or any term or
condition of employment to encourage or
discourage membership in any labor
organization: . . ."
Rothenberg has this to say:
". . . it can be established that the true and
basic inspiration for the employer's act is
derived from the employee's union affiliations
or activities, the assignment by the employer of
another reason, whatever its semblance or
validity, is unavailing.
Thus, it has been held that the facts disclosed
that the employer's acts in discharging employees
were actually prompted by the employer's
improper interest in the affected employee's union
affiliations and activities, even though the
employer urged that his acts were predicated on
economic necessity, desire to give employment to
more needy persons, lack of work, cessation of
operations, refusal to work overtime, refusal of
non-union employees to work with union
employees, seasonal lay-off, libelous remarks
against management, violation of company rules."
Since the only reason or basis for Besana and
Rodiel's dismissal was in fact their actuation as
officers of VIBEMWU, the dismissal is clearly
discriminatory.
Part VIII : Unfair Labor Practice
Labor Relations
It is this inconsiderate act of power that
makes a subordinate a rebel, it is this malicious
tactic that forces labor to dislike management; this
unjustifiable conduct that creates a gap between
management and labor; and this attitude that
makes the laborer hate the officials of the
company to the detriment of all efforts to
harmonize management and labor for the benefit
of both as envisioned by the Industrial Peace Act.
So plain from the record is the bad faith that
attended the company's deliberate and calculated
act of unfair labor practice that we find in the
present appeal an obvious attempt to delay and
carry on a pretense which this Court can ill afford
to let go without stern disapproval.
Me-Shurn Corp. v. Me-Shurn Workers Union
(2005)
All these factors strongly give credence to the
contention of respondent’s that the real reason
behind the shutdown of the corporation was the
formation of their union. Note that, to constitute
an unfair labor practice, the dismissal need not
entirely and exclusively be motivated by the
union’s activities or affiliations. It is enough that
the discrimination was a contributing factor.
If the basic inspiration for the act of the
employer is derived from the affiliation or activities
of the union, the former’s assignment of another
reason, no matter how seemingly valid, is
unavailing.
Concededly, the determination to cease
operations is a management prerogative that the
State does not usually interfere in. Indeed, no
business can be required to continue operating at
a loss, simply to maintain the workers in
employment. That would be a taking of property
without due process of law.
But where it is manifest that the closure is
motivated not by a desire to avoid further losses,
but to discourage the workers from organizing
themselves into a union for more effective
negotiations with management, the State is bound
to intervene.
2. TOTALITY OF CONDUCT RULE AND EFFECT
OF FAILURE OF ACT
Insular Life Assurance Co. Ltd. Employees v.
Insular Life Assurance Co. (1971)
Totality of Conduct Rule
The letters, exhibits A and B, should not be
considered by themselves alone but should be read
in the light of the preceding and subsequent
circumstances surrounding them. The letters
should be interpreted according to the "totality of
conduct doctrine,
"...whereby the culpability of an employer's
remarks were to be evaluated not only on
the basis of their implicit implications, but
were to be appraised against the background
of and in conjunction with collateral
circumstances.
Under this 'doctrine' expressions of opinion
by an employer which, though innocent in
themselves, frequently were held to be
culpable because of the circumstances under
which they were uttered, the history of the
particular employer's labor relations or anti-
union bias or because of their connection
with an established collateral plan of coercion
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or interference." (Rothenberg on Relations, p.
374, and cases cited therein.)
Effect of Failure of the Act
Interference constituting unfair labor practice
will not cease to be such simply because it was
susceptible of being thwarted or resisted, or that it
did not proximately cause the result intended.
For success of purpose is not, and should not, be
the criterion in determining whether or not a
prohibited act constitutes unfair labor practice.
"The test of whether an employer has
interfered with and coerced employees within the
meaning of subsection (a) (1) is
o whether the employer has engaged in
conduct which it may reasonably be said
tends to interfere with the free exercise of
employees' rights under section 3 of the
Act,
o and 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." (Francisco, Labor
Laws 1956, Vol. II, p. 323, citing NLRB v.
Ford, C.A., 1948, 170 F2d 735).
8.06 ENFORCEMENT, REMEDIES AND
SANCTIONS
1. PARTIES AGAINST WHOM ULP
COMMITTED
Art. 212
(e) "Employer" includes any person acting in the
interest of an employer, directly or indirectly.
The term shall not include any labor
organization or any of its officers or agents
except when acting as employer.
(f) "Employee" includes any person in the employ
of an employer. The term shall not be limited
to the employees of a particular employer,
unless the Code so explicitly states. It shall
include any individual whose work has ceased
as a result of or in connection with any current
labor dispute or because of any unfair labor
practice if he has not obtained any other
substantially equivalent and regular
employment.
(g) "Labor organization" means 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.
2. PARTIES LIABLE FOR ACTS
EMPLOYER
Art. 248
Unfair labor practices of employers.
The provisions of the preceding paragraph
notwithstanding, only the officers and agents of
corporations, associations or partnerships who
have actually participated in, authorized or
ratified unfair labor practices shall be held
criminally liable.
Part VIII : Unfair Labor Practice
Labor Relations
LABOR ORGANIZATION
Art. 249
Unfair labor practices of labor organizations.
The provisions of the preceding paragraph
notwithstanding, only the officers, members of
governing boards, representatives or agents or
members of labor associations or organizations
who have actually participated in, authorized or
ratified unfair labor practices shall be held
criminally liable.
3. PROSECUTION AND PRESCRIPTIVE
PERIOD
CIVIL ASPECT
Art. 247
Concept of unfair labor practice and procedure for
prosecution
 xxx
 Consequently, unfair labor practices are not
only violations of the civil rights of both labor
and management but are also criminal
offenses against the State which shall be
subject to prosecution and punishment as
herein provided.
 Subject to the exercise by the President or by
the Secretary of Labor and Employment of the
powers vested in them by Articles 263 and
264 of this Code,
o the civil aspects of all cases
involving unfair labor practices,
which may include claims for
actual, moral, exemplary and other
forms of damages, attorney’s fees
and other affirmative relief,
- shall be under the jurisdiction of
the Labor Arbiters.
o The Labor Arbiters shall give
utmost priority to the hearing and
resolution of all cases involving
unfair labor practices.
- They shall resolve such cases
within thirty (30) calendar days
from the time they are submitted
for decision.
 Recovery of civil liability in the administrative
proceedings shall bar recovery under the Civil
Code.
CRIMINAL ASPECT
Art. 247
Concept of unfair labor practice and procedure for
prosecution
 xxx
 No criminal prosecution under this Title may
be instituted without a final judgment finding
that an unfair labor practice was committed,
having been first obtained in the preceding
paragraph.
o During the pendency of such
administrative proceeding, the
running of the period of
prescription of the criminal offense
herein penalized shall be
considered interrupted:
o Provided, however, that the final
judgment in the administrative
proceedings shall not be binding in
the criminal case nor be considered
as evidence of guilt but merely as
proof of compliance of the
requirements therein set forth.
Gochangco Workers Union v. NLRC (1988)
Before Batas Blg. 7029 was enacted into law,
unfair labor practices were considered
administrative offenses, and have been held akin
to tort, wherein damages are payable.
We therefore not only order herein the
reinstatement of the petitioner and the payment of
backwages (including cost-of-living allowances) to
them, but impose as well moral and exemplary
damages.
With respect to backwages, we hold the
respondent E.G. Gochangco, Inc. liable, in line with
the recommendation of the Solicitor General and in
accordance with accepted practice, for backwages
equivalent to 3 years without qualification or
deduction.
4. COMPROMISE
Gochangco Workers Union v. NLRC (1988)
In any event, we have held that unfair labor
practice cases are not, in view of the public
interest involved, subject to compromises.
AFP Mutual Benefit Association Inc. v. FP
MBAI-EU (1980)
In labor jurisprudence, it is well-established
that quitclaims and/or complete releases executed
by the employees do not estop them from pursuing
their claims arising from the unfair labor practice of
the employer. The basic reason for this is that such
quitclaims and/or complete releases are against
public policy and, therefore, null and void.
The acceptance of termination pay does not
divest a laborer of the right to prosecute his
employer for unfair labor practice acts.
In the Cariño case, supra, the Supreme Court,
speaking thru Justice Sanchez, said:
"Acceptance of those benefits would not
amount to estoppel. The reason is plain.
Employer and employee, obviously, do not
stand on the same footing. The employer
drove the employee to the wall. The latter
must have to get hold of money Because,
out of job, he had to face the harsh
necessities of life. He thus found himself in
no position to resist money proffered. His
then, is a case of adherence, not of choice.
One thing sure, however, is that petitioners
did not relent their claim. They pressed it.
They are deemed not to have waived any of
their rights. Renuntiatio non praesumitur."
Reformist Union of R.B. Liner, Inc. v. NLRC
(1997)
The agreement entered into by the company
and the union, was in the nature of a compromise
agreement, i.e., "an agreement between two or
more persons, who, for preventing or putting an
end to a lawsuit, adjust their difficulties by mutual
consent in the manner which they agree on, and
which everyone of them prefers to the hope of
gaining, balanced by the danger of losing."

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Part VIII : Unfair Labor Practice
Labor Relations
Thus, in the agreement, each party made
concessions in favor of the other to avoid a
protracted litigation.
While we do not abandon the rule that "unfair
labor practice acts are beyond and outside the
sphere of compromises," the agreement herein
was voluntarily entered into and represents a
reasonable settlement, thus it binds the parties.
On this score, the Labor Code bestows finality
to unvitiated compromise agreements. The private
respondents' cause likewise fails in light of Article
2037 of the Civil Code, which gives compromise
agreements "the effect and authority of res
judicata" upon the parties to the same, even when
effected without judicial approval.
The Labor Arbiter and the NLRC therefore
erroneously reviewed an issue which had already
been laid to rest by the parties themselves and
which, applying the principle of res judicata, they
could no longer relitigate.
DISINI: Did the Reformist case abandon the
doctrine laid down by the court in Gochanco and
AFP Mutual Benefit Association? Note that the
Reformist case involved a compulsory arbitration.
Implication: One may argue that it is only
applicable to a case where the issue on ULP was to
be resolved in a compulsory arbitration and the
parties entered into a compromise agreement.
5. REMEDIES AND SANCTIONS
CIVIL REMEDIES
Art. 247
Concept of unfair labor practice and procedure for
prosecution
 xxx
 Recovery of civil liability in the administrative
proceedings shall bar recovery under the Civil
Code.
 xx
Nueva Ecija I. Electric Coop. Inc. v. NLRC
(2000)
Indisputable is the legal doctrine that the
appeal of a decision involving a monetary award in
labor cases may be perfected "only upon the
posting of a cash or surety bond."
The Labor Code, as amended by Republic Act
No. 6715, clearly provides:
"Art. 223. Appeal - Decisions, awards or orders
of the Labor Arbiter are final and executory
unless appealed to the Commission by any or
both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. . .
xxx
In case of a judgment involving a monetary
award, an appeal by the employer may be
perfected only upon the posting of a cash or
surety bond issued by a reputable bonding
company duly accredited by the Commission in
the amount equivalent to the monetary award
in the judgment appealed from.x x x
Also, the perfection of an appeal within the
reglementary period and in the manner prescribed
by law is jurisdictional, and noncompliance with
such legal requirement is fatal and effectively
renders the judgment final and executory.
However, in a number of cases, this Court
relaxed the rule to resolve controversies on the
merits, specifically, when there are special
meritorious circumstances and issues.
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We relaxed the requirement of posting a
supersedeas bond for the perfection of an appeal,
when there was substantial compliance with the
rule, so that on balance, we made technical
considerations to give way to equity and justice.
Unfair labor practices violate the constitutional
rights of workers and employees to self-
organization, are inimical to the legitimate
interests of both labor and management, including
their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom
and mutual respect; and disrupt industrial peace
and hinder the promotion of healthy and stable
labor-management relations.
For this reason, we find it proper in this case
to impose moral and exemplary damages on
private respondent.
However, the damages awarded by the labor
arbiter, to our mind, are excessive.
In determining the amount of damages
recoverable, the business, social and financial
position of the offended parties and the business
and financial position of the offender are taken into
account.
It is our view that herein private respondents
had not fully acted in good faith.
However, we are cognizant that a cooperative
promotes the welfare of its own members. The
economic benefits filter to the cooperative
members. Either equally or proportionally, they are
distributed among members in correlation with the
resources of the association utilized. Cooperatives
help promote economic democracy and support
community development.
PENAL REMEDIES
Art. 247
Concept of unfair labor practice and procedure for
prosecution
 xxx
 Recovery of civil liability in the administrative
proceedings shall bar recovery under the Civil
Code.
 No criminal prosecution under this Title may
be instituted without a final judgment finding
that an unfair labor practice was committed,
having been first obtained in the preceding
paragraph.
Part IX : Concerted Activities
Labor Relations
Part IX : CONCERTED ACTIVITIES
9.01 BASIS OF RIGHT TO ENGAGE IN
CONCERTED ACTIVITIES
1. CONSTITUTION
Art. XIII. Section 3
 It shall guarantee the rights of all workers to
self- organization, collective bargaining and
negotiations,
o and peaceful concerted activities,
- including the RIGHT TO STRIKE
- in accordance with law.
PURPOSE AND MEANS TEST
 Purpose: For purpose of enforcing right to:
1. Self-Organization (Strikes
against ULP) and
2. Collective bargaining and
negotiations (economic strikes
based on bargaining deadlock)
 Means: Peaceful and in accordance with law
Luzon Marine Dept. Union v. Roldan (1950)
The law does not look with favor upon strikes
and lockouts because of their disturbing and
pernicious effects upon the social order and the
public interests; to prevent or avert them and to
implement section 6, Article XIV of the
Constitution, the law has created several agencies,
namely: the Bureau of Labor, the Department of
Labor, the Labor-Management Advisory Board, and
the Court of Industrial Relations.
Stamford Marketing Corp v. Julian (2004)
Indeed, the right to strike, while
constitutionally recognized, is not without legal
restrictions. The Labor Code regulates the exercise
of said right by balancing the interests of labor and
management in the light of the overarching public
interest. Thus, paragraphs (c) and (f) of Article
263 mandate the following procedural steps to be
followed before a strike may be staged:
 filing of notice of strike, taking of strike vote,
and reporting of the strike vote result to the
Department of Labor and Employment.
 It bears stressing that these requirements are
mandatory, meaning, non-compliance
therewith makes the strike illegal. The evident
intention of the law in requiring the strike
notice and strike-vote report is to reasonably
regulate the right to strike, which is essential
to the attainment of legitimate policy
objectives embodied in the law.
Ilaw at Buklod ng Manggagawa (IBM) v.
NLRC (1991)
Article 263 of the Labor Code, as amended,
declares that in line with "the policy of the State to
encourage free trade unionism and free collective
bargaining, xx Workers shall have the right to
engage in concerted activities for purposes of
collective bargaining or for their mutual benefit
and protection." A similar right to engage in
concerted activities for mutual benefit and
protection is tacitly and traditionally recognized in
respect of employers.
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- The more common of these concerted
activities as far as employees are concerned
are: strikes-the temporary stoppage of work
as a result of an industrial or labor dispute;
picketing-the marching to and fro at the
employer's premises, usually accompanied by
the display of placards and other signs making
known the facts involved in a labor dispute;
and boycotts-the concerted refusal to
patronize an employer's goods or services and
to persuade others to a like refusal.
- On the other hand, the counterpart activity
that management may licitly undertake is the
lockout-the temporary refusal to furnish work
on account of a labor dispute. In this
connection, the same Article 263 provides that
the "right of legitimate labor organizations to
strike and picket and of employer to lockout,
consistent with the national interest, shall
continue to be recognized and respected."
- The legality of these activities is usually
dependent on the legality of the purposes
sought to be attained and the means
employed therefor.
- It goes without saying that these joint or
coordinated activities may be forbidden or
restricted by law or contract.
2. STATUTORY
Art. 263
Strikes, picketing and lockouts.
(b) Workers shall have the right to engage in
concerted activities
o for purposes of collective bargaining or for
their mutual benefit and protection.
 The right of legitimate labor organizations to
strike and picket and of employers to lockout,
o consistent with the national interest, shall
continue to be recognized and respected.
 However, no labor union may strike and no
employer may declare a lockout
o on grounds involving inter-union and
intra-union disputes.
 The Constitution and the law set limitation for
the exercise of the right to strike or lock-out.
It is the most regulated activity.
Constitution In accordance with law
Labor Code Consistent with National Interest
3. INTERNATIONAL COVENANT ON
ECONOMIC, SOCIAL AND CULTURAL
RIGHTS
Article 8
1. The States Parties to the present Covenant
undertake to ensure:
(d) The right to strike, provided that it is
exercised in conformity with the laws of the
particular country.
4. LIMITATIONS
Bisig ng Manggagawa, etc. v. NLRC (1993)
For the first time in our constitutional history,
the fundamental law of our land mandated the
State to ". . . guarantee the rights of all workers to
self-organization, collective bargaining and
negotiations, and peaceful concerted activities,
Part IX : Concerted Activities
Labor Relations
including the right to strike in accordance with
law."
 This constitutional imprimatur given to the
right to strike constitutes signal victory for
labor. Our Constitutions of 1935 and 1973 did
not accord constitutional status to the right to
strike. Even the liberal US Federal
Constitution did not elevate the right to strike
to a constitutional level.
 With a constitutional matrix, enactment of a
law implementing the right to strike was an
inevitability. RA 6715 came into being on
March 21, 1989, an intentional replication of
RA 875.
 In light of the genesis of the right to strike, it
ought to be obvious that the right should be
read with a libertarian latitude in favor of
labor.
 Father Joaquin G. Bernas, S.J.: the
constitutional recognition of the right to strike
does serve as a reminder that injunctions,
should be reduced to the barest minimum."
Article 218 (e) of the Labor Code provides
both the procedural and substantive requirements
which must strictly be complied with before a
temporary or permanent injunction can issue in a
labor dispute.
To be sure, the issuance of an ex parte
temporary restraining order in a labor dispute is
not per se prohibited. Its issuance, however,
should be characterized by care and caution for
the law requires that it be clearly justified by
considerations of extreme necessity, i.e., when the
commission of unlawful acts is causing substantial
and irreparable injury to company properties and
the company is, for the moment, bereft of an
adequate remedy at law.
This is as it ought to be, for imprudently
issued temporary restraining orders can break the
back of employees engaged in a legal strike.
 Often times, they unduly tilt the balance of a
labor warfare in favor of capital. When that
happens, the deleterious effects of a
wrongfully issued, ex parte temporary
restraining order on the rights of striking
employees can no longer be repaired for they
defy simple monetization.
 The immediate need to hear and resolve these
ex parte applications does not provide any
excuse to lower our vigilance in protecting
labor against the issuance of indiscriminate
injunctions. Stated otherwise, it behooves
hearing officer receiving evidence in support
of ex parte injunctions against employees in
strike to take a more active stance in seeing
to it that their right to social justice is in no
way violated despite their absence. This
equalizing stance was not taken in the case
at bar by the public respondent.
Lapanday Workers Union v. NLRC (1995)
Some of the limitations on the exercise of the
right of strike are provided for in paragraphs (c)
and (f) of Article 263 of the Labor Code, as
amended, supra.
 They provide for the procedural steps to be
followed before staging a strike filing of notice
of strike, taking of strike vote, and reporting
of the strike vote result to the Department of
Labor and Employment,
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 In National Federation of Sugar Workers
(NFSW) vs. Overseas, et al., we ruled that
these steps are mandatory in character, thus:
If only the filing of the strike notice and the
strike-vote report would be deemed
mandatory, but not the waiting periods so
specifically and emphatically prescribed by
law, the purposes for which the filing of the
strike notice and strike-vote report is required
cannot be achieved....
9.02 STRIKE ACTIVITY
1. DEFINITION
Art. 212(o)
"Strike" means any temporary stoppage of
work by the concerted action of employees as
a result of an industrial or labor dispute.
Bukluran ng Manggagawa sa Clothman
Knitting Corporation-Solidarity Unions in the
Phil v. CA (2005)
A strike is any temporary stoppage of work by
the concerted action of employees as a result of an
industrial or labor dispute.
A labor dispute includes any controversy or
matter concerning terms or conditions of
employment or the association or representation of
persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of
employment, regardless of whether the disputants
stand in the proximate relation of employer and
employee.
The members and the supporters of the
petitioner union, headed by petitioner Tomaroy,
thru concerted action, caused a temporary
stoppage of work as a result of an industrial
dispute.
The allegation that there can be no work
stoppage because the operation in the Dyeing and
Finishing Division had been shutdown is of no
consequence.
 It bears stressing that the other divisions were
fully operational. There is nothing on record
showing that the union members and the
supporters who formed a picket line in front of
the respondent’s compound were assigned to
the finishing department.
 As can be clearly inferred from the spot
reports, employees from the knitting
department also joined in picket. The
blockade of the delivery of trucks and the
attendance of employees from the other
departments of the respondent meant work
stoppage. The placards that the picketers
caused to be displayed arose from matters
concerning terms or conditions of employment
as well as the association or representation of
persons in negotiating, fixing, maintaining,
changing or arranging the terms and
conditions of employment.
Enriquez v. Zamora (1986)
The pilots' mass action was not a strike
because employees who go on strike do not quit
their employment.
Ordinarily, the relationship of employer and
employee continues until one or the other of the
parties acts to sever the relationship or they
mutually act to accomplish that purpose
Part IX : Concerted Activities
Labor Relations
 As they did not assume the status of strikers,
their "protest retirement/resignation" was not
a concerted activity which was protected by
law [First National Bank of Omaha vs.
N.L.R.B., 413 F. 2d 921].
 Petitioners cannot, therefore, validly claim
that PAL committed an unfair labor practice
because, having voluntarily terminated their
employment relationship with PAL, they were
not dismissed.
Moreover, the issue of whether the
retirement/resignation of ALPAP members on
December 12, 1970 was a concerted activity
protected by law was put to rest in Chavez vs.
Martinez, L-35206 which was decided by this Court
on April 15, 1977 together with Air Line Pilots
Association of the Philippines vs. Court of
Industrial Relations, L-33705. We pronounced
therein that:
 "Parenthetically, contrary to ALPAP [Gaston's]
argument that the pilots'
retirement/resignation was a legitimate
concerted activity, citing Section 2[1] of the
Industrial Peace Act which defines 'Strike' as
'any temporary stoppage of work by the
concerted action of employees as a result of
an industrial dispute', it is worthwhile to
observe that as the law defines it, a strike
means only a `temporary stoppage of work'.
 What the mentioned pilots did, however,
cannot be considered in the opinion of this
Court, as mere 'temporary stoppage of work'.
 What they contemplated was evidently a
permanent cut-off of employment relationship
with their erstwhile employer, the Philippine
Air Lines.
 In any event, the dispute below having been
certified as existing in an industry
indispensable to the national interest, the said
pilots' rank disregard for the compulsory
orders of the industrial court and their daring
and calculating venture to disengage
themselves from that court's jurisdiction, for
the obvious purpose of satisfying their narrow
economic demands to the prejudice of the
public interest, are evident badges of bad
faith.
 A legitimate concerted activity is a matter that
cannot be used to circumvent judicial orders
or be tossed around like a plaything.
 Definitely, neither employers nor employees
should be allowed to make of judicial authority
a now-you've-got-it-now-you-don't affair. The
courts cannot hopefully effectuate and
vindicate the sound policies of the Industrial
Peace Act and all our labor laws if employees,
particularly those who on account of their
highly advanced technical background and
relatively better life status are far above the
general working class spectrum, will be
permitted to defy and invoke the jurisdiction
of the courts whenever the alternative chosen
will serve to feather their pure and simple
economic demands."
Phil. Blooming Mills v. PBM Employees
Organization (1973)
We repeat that the obvious purpose of the
mass demonstration staged by the workers of the
respondent firm on March 4, 1969, was for their
mutual aid and protection against alleged police
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abuses, denial of which was interference with or
restraint on the right of the employees to engage
in such a common action to better shield
themselves against such alleged police indignities.
The insistence on the part of the respondent
firm that the workers for the morning and regular
shifts should not participate in the mass
demonstration, under pain of dismissal, was as
heretofore stated, "a potent means of inhibiting
speech."
Such a concerted action for their mutual help
and protection, deserves at least equal protection
as the concerted action of employees in giving
publicity to a letter complaint charging a bank
president with immorality, nepotism, favoritism
and discrimination in the appointment and
promotion of bank employees.
We further ruled in the Republic Savings Bank
case, supra, that for the employees to come within
the protective mantle of Section 3 in relation to
Section 4(a- 1) of Republic Act No. 875, "it is not
necessary that union activity be involved or that
collective bargaining be contemplated," as long as
the concerted activity is for the furtherance of their
interests.
The collective bargaining agreement which
fixes the working shifts of the employees,
according to the respondent CIR, in effect imposes
on the workers the "duty x x x to observe regular
working hours."
The strained construction of the CIR that such
stipulated working shifts deny the workers the
right to stage a mass demonstration against police
abuses during working hours, constitutes a virtual
tyranny over the mind and life of the workers and
deserves severe condemnation.
Renunciation of the freedom should not be
predicated on such a slender ground.
The respondent firm claims that there was no
need for all its employees to participate in the
demonstration and that they suggested to the
Union that only the first and regular shift from
6:00 A.M. to 2:00 P.M. should report for work in
order that loss or damage to the firm will be
averted.
This stand failed to appreciate the sine qua
non of an effective demonstration especially by a
labor union, namely the complete unity of the
Union members as well as their total presence at
the demonstration site in order to generate the
maximum persuasive force that will gain for them
not only public sympathy for the validity of their
cause but also immediate action on the part of the
corresponding government agencies with
jurisdiction over the issues they raised against the
local police.
The more the participants, the more persons
can be apprised of the purpose of the rally.
Moreover, the absence of one-third of their
members will be regarded as a substantial
indication of disunity in their ranks which will
enervate their position and abet continued alleged
police persecution.
Samahang Manggagawa v. Sulpicio Lines
(2004)
A strike, as defined in Article 212 (o) of the
Labor Code, as amended, means “any temporary
stoppage of work by the concerted action of
employees as a result of an industrial or labor
dispute.” The term “strike” shall comprise not
Part IX : Concerted Activities
Labor Relations
only concerted work stoppages, but also
slowdowns, mass leaves, sitdowns, attempts to
damage, destroy or sabotage plant equipment and
facilities, and similar activities.
Basic Concepts:
1. Initiating Party:
Employer: Lock-out
Union: Strike
2. Cause: Labor dispute
 An inter-union and intra-union dispute cannot
be a valid ground for a strike or lock-out since
a labor dispute is technically defined under
Art. 212.
 Welga ng Bayan (Political Strike) is not a valid
strike under the Labor Code since no labor
dispute is involved. A welga ng bayan for
purpose of lowering oil price is not a valid
strike under the Labor Code but it may be
upheld as a valid exercise of right of speech.
However, the employee may suffer the
consequence of abandonment of work
 Phil. Blooming Mills case does not involve a
right to strike but freedom of
speech/expression.
 Wage distortion are not also a valid ground for
a strike since the law provides for a procedure
to settle wage distortion problems (see Ilaw at
Buklod case)
3. Temporary in Nature
 Employee-Employer relationship continues to
exist. Mere participation in a strike is not a
ground for termination
2. NATURE AND PURPOSE
Phil. Can Co. v. CIR (1950)
Ordinarily, a strike is a coercive measure
resorted to by laborers to enforce their demands.
The idea behind a strike is that a company
engaged in a profitable business cannot afford to
have its production or activities interrupted, much
less, paralyzed.
Any interruption or stoppage of production
spells loss, even disaster. The capital invested in
machinery, factory and other properties connected
with the business would be unproductive during a
strike or the stoppage of the business.
On the other hand, the overhead expenses
consisting of salaries of its officials, including real
estate taxes and license fees continue.
 Knowing this, the strikers by going on strike
seek to interrupt and paralyze the business
and production of the company. The employer
company is on the defensive. It almost
invariably wants the strike stopped and the
strikers back to work so as to resume and
continue production.
 Because of this threat or danger of loss to the
company, it not infrequently gives in to the
demands of the strikers, just so it can
maintain the continuity of its production. Or, if
the strikers refuse to return to work, the
employer company seeks permission from the
court to employ other laborers to take their
places. In such cases, pending determination
of the conflict, especially where public
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interests so require or when the court cannot
promptly decide the case, the strikers are
ordered back to work.
3. EFFECT WORK RELATIONSHIP
Elizalde Rope Factory, Inc. v. SSS (1972)
Although during a strike the worker renders no
work or service and receives no compensation, yet
his relationship as an employee with his employer
is not severed or dissolved.
Strike is the workers' means of expressing
their grievances to employers and enforcing
compliance with their demands made upon them.
And when laborers go on strike, it cannot be said
that, they intend to cut off or terminate their
relationship with their employer.
On the contrary, a strike may improve the
employer-employee relationship by bringing about
better working conditions and more efficient
services. Hence, the petitioner's contention that
Edilberto Tupas ceased to be an employee from 17
September 1957 to the middle of February 1958
when he was on strike, cannot be sustained.
4. TYPES, CHANGES AND CONVERSION
TYPES
a. Unfair Labor Practice
Art. 263
Strikes, picketing and lockouts.
(c) In case of bargaining deadlocks, the duly
certified or recognized bargaining agent may file a
notice of strike or the employer may file a notice of
lockout with the Ministry at least 30 day before the
intended date thereof.
 In cases of unfair labor practice, the
period of notice shall be 15 days and in
the absence of a duly certified or
recognized bargaining agent, the notice
of strike may be filed by any legitimate
labor organization in behalf of its
members.
 However, in case of dismissal from
employment of union officers duly
elected in accordance with the union
constitution and by-laws, which may
constitute union busting, where the
existence of the union is threatened,
the 15-day cooling-off period shall not
apply and the union may take action
immediately.
b. Bargaining Deadlock – Economic
Consolidated Labor Assoc. of the Phil. V.
Marsman and Co. (1984)
An economic strike is defined as one which is
to forge wage or other concessions from the
employer which he is not required by law to grant.
CHANGE IN TYPE
Consolidated Labor Assoc. of the Phil. V.
Marsman and Co. (1984)
Initially the strike staged by the Union was
meant to compel the Company to grant it certain
economic benefits set forth in its proposal for
collective bargaining. The strike was an
economic one, and the striking employees would
Part IX : Concerted Activities
Labor Relations
have a right to be reinstated if, in the interim, the
employer had not hired other permanent workers
to replace them.
For it is recognized that during the pendency
of an economic strike an employer may take steps
to continue and protect his business by supplying
places left vacant by the strikers, and is not bound
to discharge those hired for that purpose upon
election of the strikers to resume their
employment.
But the strike changed its character from the
time the Company refused to reinstate
complainants because of their union activities after
it had offered to admit all the strikers and in fact
did readmit the others. It was then converted into
an unfair labor practice strike.
The Union began the strike because it believed
in good faith that settlement of their demands was
at an impasse and that further negotiations would
only come to naught. It stopped the strike upon
the belief they could go back to work.
 Then it renewed the strike (or it started
a new strike) as a protest against the
discrimination practiced by the
Company.
 Both are valid grounds for going on a
strike.
In an economic strike, the strikers are not
entitled to backpay, since the employer should get
the equivalent day's work for what he pays his
employees. During the time that the strike was an
economic one, complainants had no right to back
pay.
 The Industrial Court could not have
made a finding of unfair labor practice
with respect to such time, as none had
so far been committed.
 This being an unfair labor practice case,
it cannot, therefore, order
reinstatement much less back pay for
that period.
On the other hand, even after the court has
made a finding of unfair labor practice, it still has
the discretion to determine whether or not to grant
back pay.
 Such discretion was not abused when it
denied back wages to complainants,
considering the climate of violence
which attended the strike and picket
that the complainants conducted.
 While the complainants ordered
reinstated did not actively take part in
the acts of violence, their minatory
attitude towards the Company may be
gathered from the fact that from the
very first day of the strike policemen
had to patrol the strike zone in order to
preserve peace.
NON-CONVERSION – STRIKE TO LOCKOUT
Rizal Cement Workers Union v. CIR (1962)
It becomes, therefore, manifest that the
issues raised the by the petitioner center on
whether or not its members, are entitled to back
wages.
Petitioner principally based its claim for back
wages on the theory that there was a lock-out or
"virtual lock-out", which prevented them to work.
The law (Act No. 875), provides:
"SEC.15. Violation of Duty to Bargain
Collectively.-It shall be unlawful for any
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employer to refuse to bargain collectively
with the representative of his employees, or
to declare a lockout without having first
bargained collectively with the
representative of its employees, in
accordance with the provisions of this Act.
Any employee whose work has stopped as a
consequence of such lockout shall be
entitled to backpay. * * *"
It will thus be seen that under the above
provision, the lock-out referred to is that which is
committed by the employer, if it refused to give
work to its workers.
 No finding was made by the CIR on the
question of lockout.
 That there was no lockout is clear from
the observations of the respondent
court, when it said: "the striking union
decided on this question of strike which
was carried out and maintained by
picketing the respondent's cement plant
at Binañgonan, Rizal".
 The offer to return to work made by the
members of the petitioner, did not
make the refusal to accept the same, a
lockout.
 This is so because the case on the
legality or not of the strike was then
pending decision by the CIR and said
Court did not issue any order in
connection with said offer.
 The strike which was open and publicly
declared by the petitioner union on May
27, 1956, can riot be converted into a
pure and simple lockout, by the mere
expedient of filing before the trial court
a notice of offer to return to work,
during the pendency of the labor
dispute. Petitioner alleges that said
refusal to accept them, constituted a
"virtual lockout". T
 The law does not provide for a virtual
lockout. But assuming, that the non-
acceptance of the unconditional offer to
return to work was virtual lockout, still
the circumstances of the case would not
justify the demand that the strikers are
entitled ipso, jure to back wages. This is
so because the respondent court found
that the strike was attended by isolated
acts of violence committed by the
strikers, and stated, in the same
breath, that certain degree of reason
and fairness be accorded.
5. GROUNDS
ALLOWABLE STRIKES
Art. 263
Strikes, picketing and lockouts.
(c) In case of bargaining deadlocks, the duly
certified or recognized bargaining agent may file a
notice of strike or the employer may file a notice of
lockout with the Ministry at least 30 day before the
intended date thereof.
 In cases of unfair labor practice, the
period of notice shall be 15 days and in
the absence of a duly certified or
recognized bargaining agent, the notice
of strike may be filed by any legitimate
labor organization in behalf of its
members.
Part IX : Concerted Activities
Labor Relations
 However, in case of dismissal from
employment of union officers duly elected
in accordance with the union constitution
and by-laws, which may constitute union
busting, where the existence of the union
is threatened, the 15-day cooling-off
period shall not apply and the union may
take action immediately.
PROHIBITED STRIKES
Art. 263 (g)
When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify
the same to the Commission for compulsory
arbitration.
 Such assumption or certification shall
have the effect of automatically enjoining
the intended or impending strike or
lockout as specified in the assumption or
certification order. If one has already
taken place at the time of assumption or
certification, all striking or locked out
employees shall immediately return-to-
work and the employer shall immediately
resume operations and readmit all
workers under the same terms and
conditions prevailing before the strike or
lockout.
 The Secretary of Labor and Employment
or the Commission may seek the
assistance of law enforcement agencies to
ensure compliance with this provision as
well as with such orders as he may issue
to enforce the same.
In line with the national concern for and the
highest respect accorded to the right of patients to
life and health, strikes and lockouts in hospitals,
clinics and similar medical institutions shall, to
every extent possible, be avoided, and all serious
efforts, not only by labor and management but
government as well, be exhausted to substantially
minimize, if not prevent, their adverse effects on
such life and health, through the exercise,
however legitimate, by labor of its right to strike
and by management to lockout.
 In labor disputes adversely affecting the
continued operation of such hospitals,
clinics or medical institutions, it shall be
the duty of the striking union or locking-
out employer to provide and maintain an
effective skeletal workforce of medical
and other health personnel, whose
movement and services shall be
unhampered and unrestricted, as are
necessary to insure the proper and
adequate protection of the life and health
of its patients, most especially emergency
cases, for the duration of the strike or
lockout.
 In such cases, therefore, the Secretary of
Labor and Employment may immediately
assume, within twenty four (24) hours
from knowledge of the occurrence of such
a strike or lockout, jurisdiction over the
same or certify it to the Commission for
compulsory arbitration.
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 For this purpose, the contending parties
are strictly enjoined to comply with such
orders, prohibitions and/or injunctions as
are issued by the Secretary of Labor and
Employment or the Commission, under
pain of immediate disciplinary action,
including dismissal or loss of employment
status or payment by the locking-out
employer of backwages, damages and
other affirmative relief, even criminal
prosecution against either or both of
them.
The foregoing notwithstanding, the President of the
Philippines shall not be precluded from determining
the industries that, in his opinion, are
indispensable to the national interest, and from
intervening at any time and assuming jurisdiction
over any such labor dispute in order to settle or
terminate the same.
Art. 264
Prohibited activities.
(a)No labor organization or employer shall declare
a strike or lockout without first having bargained
collectively in accordance with Title VII of this Book
or
 without first having filed the notice
required in the preceding Article or
 without the necessary strike or lockout
vote first having been obtained and
reported to the Ministry.
No strike or lockout shall be declared after
assumption of jurisdiction by the President or the
Minister or after certification or submission of the
dispute to compulsory or voluntary arbitration or
during the pendency of cases involving the same
grounds for the strike or lockout.
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with full
backwages.
 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 a strike may be declared to
have lost his employment status:
 Provided, That mere participation of a
worker in a lawful strike shall not
constitute sufficient ground for
termination of his employment, even if a
replacement had been hired by the
employer during such lawful strike.
Art. 265
Improved offer balloting.
In an effort to settle a strike, the Department of
Labor and Employment shall conduct a referendum
by secret ballot on the improved offer of the
employer on or before the 30th day of the strike.
When at least a majority of the union members
vote to accept the improved offer the striking
workers shall immediately return to work and the
employer shall thereupon readmit them upon the
signing of the agreement.
In case of a lockout, the Department of Labor and
Employment shall also conduct a referendum by
secret balloting on the reduced offer of the
union on or before the 30th day of the lockout.
Part IX : Concerted Activities
Labor Relations
 When at least a majority of the board of
directors or trustees or the partners
holding the controlling interest in the case
of a partnership vote to accept the
reduced offer, the workers shall
immediately return to work and the
employer shall thereupon readmit them
upon the signing of the agreement.
Ilaw at Buklod ng Manggagawa (IBM) v.
NLRC (1991)
WAGE DISTORTION cannot be a ground for strike.
In the particular instance of "distortions of the
wage structure within an establishment" resulting
from "the application of any prescribed wage
increase by virtue of a law or wage order," Section
3 of Republic Act No. 6727 prescribes a specific,
detailed and comprehensive procedure for the
correction thereof, thereby implicitly excluding,
strikes, lockouts or other concerted activities as
modes of settlement of the issue.
The legislative intent that solution of the
problem of wage distortions shall be sought by
voluntary negotiation or abitration, and not by
strikes, lockouts, or other concerted activities of
the employees or management, is made clear in
the rules implementing RA 6727 issued by the
Secretary of Labor and Employment" pursuant to
the authority granted by Section 13 of the Act. 13
Section 16, Chapter I of these implementing rules,
after reiterating the policy that wage distortions be
first settled voluntarily by the parties and
eventually by compulsory arbitration, declares
that, "Any issue involving wage distortion shall not
be a ground for a strike /lockout. "
Grand Boulevard Hotel v. Grand Labor
Organization (2003)
Under Art. 263, the requisites for a valid strike
are as follows: (a) a notice of strike filed with the
DOLE thirty days before the intended date thereof
or fifteen days in case of ULP; (b) strike vote
approved by a majority of the total union
membership in the bargaining unit concerned
obtained by secret ballot in a meeting called for
that purpose; (c) notice given to the DOLE of the
results of the voting at least seven days before the
intended strike.
The requisite seven-day period is intended to
give the DOLE an opportunity to verify whether the
projected strike really carries the approval of the
majority of the union members.
The notice of strike and the cooling-off period
were intended to provide an opportunity for
mediation and conciliation. The requirements are
mandatory and failure of a union to comply
therewith renders the strike illegal.
A strike simultaneously with or immediately
after a notice of strike will render the requisite
periods nugatory.
Moreover, a strike that is undertaken, despite
the issuance by the SOLE of an assumption or
certification order, becomes a prohibited activity
and, thus, illegal pursuant to Article 264 of the
Labor Code of the Philippines, as amended.
As this Court ruled in Union of Filipro
Employees v. Nestle Philippines, Inc., under Article
264(a) of the said code, once an assumption
certification order is issued by the SOLE, strikes
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are enjoined or if one has already taken place, all
strikers shall immediately return to work:
The respondents’ claim of good faith is not a
valid excuse to dispense with the procedural steps
for a lawful strike.
NO STRIKE CLAUSE
Panay Electric Co. v. NLRC (1995)
It has heretofore been held that a "no strike,
no lock-out" provision in the Collective Bargaining
Agreement ("CBA") is a valid stipulation although
the clause may be invoked by an employer only
when the strike is economic in nature or one which
is conducted to force wage or other concessions
from the employer that are not mandated to be
granted by the law itself.
It would be inapplicable to prevent a strike
which is grounded on unfair labor practice. In this
situation, it is not essential that the unfair labor
practice act has, in fact, been committed; it
suffices that the striking workers are shown to
have acted honestly on an impression that the
company has committed such unfair labor practice
and the surrounding circumstances could wan-ant
such a belief in good faith.
Malayang Samahan ng mga Manggagawa sa
Greenfield v. Ramos (2000)
Another reason why the Labor Arbiter declared
the strike illegal is due to the existence of a no
strike no lockout provision in the CBA. Again, such
a ruling is erroneous. A no strike, no lock out
provision can only be invoked when the strike is
economic in nature, i.e. to force wage or other
concessions from the employer which he is not
required by law to grant. Such a provision cannot
be used to assail the legality of a strike which is
grounded on unfair labor practice, as was the
honest belief of herein petitioners. Again, whether
or not there was indeed unfair labor practice does
not affect the strike.
6. STRIKING PARTY
Art. 263. Strikes, picketing and lockouts.
(b) Workers shall have the right to engage in
concerted activities for purposes of collective
bargaining or for their mutual benefit and
protection.
 The right of legitimate labor organizations
to strike and picket and of employers to
lockout, consistent with the national
interest, shall continue to be recognized
and respected.
 However, no labor union may strike and
no employer may declare a lockout on
grounds involving inter-union and intra-
union disputes.
(c) In case of bargaining deadlocks, the duly
certified or recognized bargaining agent may file a
notice of strike or the employer may file a notice of
lockout with the Ministry at least 30 day before the
intended date thereof.
 In cases of unfair labor practice, the
period of notice shall be 15 days and in
the absence of a duly certified or
recognized bargaining agent, the notice
of strike may be filed by any legitimate
Part IX : Concerted Activities
Labor Relations
labor organization in behalf of its
members.
o However, in case of dismissal from
employment of union officers duly elected
in accordance with the union constitution
and by-laws, which may constitute union
busting, where the existence of the union
is threatened, the 15-day cooling-off
period shall not apply and the union may
take action immediately.
7. PROCEDURAL REQUIREMENTS
EFFORT TO BARGAIN
Art. 264
Prohibited activities.
(a)No labor organization or employer shall declare
a strike or lockout without first having bargained
collectively in accordance with Title VII of this
Book x x x.
Art. 250
Procedure in collective bargaining. The following
procedures shall be observed in collective
bargaining:
f. 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;
g. Should differences arise on the basis of such
notice and reply, either party may request for
a conference which shall begin not later than
ten (10) calendar days from the date of
request.
h. If the dispute is not settled, the Board shall
intervene upon request of either or both
parties or at its own initiative and immediately
call the parties to conciliation meetings. The
Board shall have the power to issue
subpoenas requiring the attendance of the
parties to such meetings. It shall be the duty
of the parties to participate fully and promptly
in the conciliation meetings the Board may
call;
i. During the conciliation proceedings in the
Board, the parties are prohibited from doing
any act which may disrupt or impede the early
settlement of the disputes; and
j. The Board shall exert all efforts to settle
disputes amicably and encourage the parties
to submit their case to a voluntary arbitrator.
Art. 251
Duty to bargain collectively in the absence of
collective bargaining agreements. In the absence
of an agreement or other voluntary arrangement
providing for a more expeditious manner of
collective bargaining, it shall be the duty of
employer and the representatives of the
employees to bargain collectively in accordance
with the provisions of this Code.
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 with respect to wages,
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hours of work and all other terms and conditions of
employment including proposals for adjusting any
grievances or questions arising under such
agreement and executing a contract incorporating
such agreements if requested by either party but
such duty does not compel any party to agree to a
proposal or to make any concession.
FILING OF NOTICE OF INTENTION
Art. 263(c)
In case of bargaining deadlocks, the duly certified
or recognized bargaining agent may file a notice of
strike or the employer may file a notice of lockout
with the Ministry at least 30 day before the
intended date thereof.
In cases of unfair labor practice, the period of
notice shall be 15 days and in the absence of a
duly certified or recognized bargaining agent, the
notice of strike may be filed by any legitimate
labor organization in behalf of its members.
 However, in case of dismissal from
employment of union officers duly elected
in accordance with the union constitution
and by-laws, which may constitute union
busting, where the existence of the union
is threatened, the 15-day cooling-off
period shall not apply and the union may
take action immediately.
(d) The notice must be in accordance with such
implementing rules and regulations as the Minister
of Labor and Employment may promulgate.
(e) During the cooling-off period, it shall be the
duty of the Ministry to exert all efforts at mediation
and conciliation to effect a voluntary settlement.
Should the dispute remain unsettled until the lapse
of the requisite number of days from the
mandatory filing of the notice, the labor union may
strike or the employer may declare a lockout.
OBSERVANCE COOLING-OFF PERIOD
Art. 263(c)
In case of bargaining deadlocks, the duly certified
or recognized bargaining agent may file a notice of
strike or the employer may file a notice of lockout
with the Ministry at least 30 day before the
intended date thereof.
In cases of unfair labor practice, the period of
notice shall be 15 days and in the absence of a
duly certified or recognized bargaining agent, the
notice of strike may be filed by any legitimate
labor organization in behalf of its members.
 However, in case of dismissal from
employment of union officers duly elected
in accordance with the union constitution
and by-laws, which may constitute union
busting, where the existence of the union
is threatened, the 15-day cooling-off
period shall not apply and the union may
take action immediately.
(e) During the cooling-off period,
 it shall be the duty of the Ministry to exert
all efforts at mediation and conciliation
to effect a voluntary settlement.
Part IX : Concerted Activities
Labor Relations
 Should the dispute remain unsettled until
the lapse of the requisite number of days
from the mandatory filing of the notice,
o the labor union may strike or the
employer may declare a lockout.
VOTE, CONDUCT OF AND PERIOD OF VALIDITY
Art. 263 (f)
A decision to declare a strike must be approved by
a majority of the total union membership in the
bargaining unit concerned,
 obtained by secret ballot in meetings or
referenda called for that purpose.
A decision to declare a lockout must be approved
by a majority of the board of directors of the
corporation or association or of the partners in a
partnership,
 obtained by secret ballot in a meeting
called for that purpose.
The decision shall be valid for the duration of the
dispute based on substantially the same grounds
considered when the strike or lockout vote was
taken.
The Ministry may, at its own initiative or upon the
request of any affected party, supervise the
conduct of the secret balloting.
In every case, the union or the employer shall
furnish the Ministry the results of the voting at
least seven days before the intended strike or
lockout, subject to the cooling-off period herein
provided.
Art. 264
Prohibited activities.
(a)No labor organization or employer shall declare
a strike or lockout without first having bargained
collectively in accordance with Title VII of this
Book or
 without first having filed the notice
required in the preceding Article or
 without the necessary strike or lockout
vote first having been obtained and
reported to the Ministry. x x x
Piñero v. NLRC (2004)
There is no doubt that the strike staged by
DUCACOFSA-NAFTEU is illegal for non-compliance
with the strike-vote requirements.
Under Art. 263, the requisites for a valid strike
are as follows:
a. a notice of strike filed with the DOLE
thirty days before the intended date
thereof or fifteen days in case of unfair
labor practice
b. strike vote approved by a majority of the
total union membership in the bargaining
unit concerned obtained by secret ballot
in a meeting called for that purpose;
c. notice given to the DOLE of the results of
the voting at least seven days before the
intended strike.
- These requirements are mandatory and
failure of a union to comply therewith
renders the strike illegal.
Pursuant to Article 264 of the Labor Code, any
union officer who knowingly participates in an
illegal strike and any worker or union officer who
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knowingly participates in the commission of illegal
acts during a strike may be declared to have lost
his employment status.
The Court notes that petitioner Piñero turned
60 years old and retired on March 1, 1996 after 29
years of service, rendering his dismissal from
service moot and academic. However, in view of
the propriety of his termination as a consequence
of the illegal strike, he is no longer entitled to
payment of retirement benefits because he lost his
employment status effective as of the date of the
decision of the Labor Arbiter – October 28, 1994.
An employee who is dismissed for cause is
generally not entitled to any financial assistance.
- Equity considerations, however, provide
an exception.
Although meriting termination of employment,
Piñero’s infraction is not so reprehensible nor
unscrupulous as to warrant complete disregard of
his long years of service. Moreover, he has no
previous derogatory records.
Under the circumstances, social and
compassionate justice dictate that petitioner Piñero
be awarded financial assistance equivalent to one-
half (1/2) month’s pay for every year of service
computed from his date of employment up to
October 28, 1994 when he was declared to have
lost his employment status. Indeed, equities of
this case should be accorded due weight because
labor law determinations are not only secundum
rationem but also secundum caritatem
Samahang Manggagawa etc. v. Sulpicio Lines,
Inc. (2004)
The basic issue for our determination is
whether the strike staged by petitioner’s officers
and members is illegal. Articles 263 and 264 of
the Labor Code, as amended, provide:
“ART. 263. STRIKES, PICKETING AND
LOCKOUTS.
(c) In cases of bargaining deadlocks,
the duly certified or recognized bargaining
agent may file a notice of strike x x x with the
Ministry (now Department) at least 30 days
before the intended date thereof. In cases of
unfair labor practice, the period of notice shall
be 15 days and in the absence of a duly
certified or recognized bargaining agent, the
notice of strike may be filed by any legitimate
labor organization in behalf of its members.
However, in case of dismissal from
employment of union officers duly elected in
accordance with the union constitution and
by-laws, which may constitute union busting
where the existence of the union is
threatened, the 15-day cooling-off period shall
not apply and the union may take action
immediately.
xxx
(f) A decision to declare a strike must be
approved by a majority of the total union
membership in the bargaining unit concerned,
obtained by secret ballot in meetings or
referenda called for that purpose. x x x. The
decision shall be valid for the duration of the
dispute based on substantially the same
grounds considered when the strike or lockout
vote was taken. The Ministry (now
Department) may at its own initiative or upon
the request of any affected party, supervise
the conduct of the secret balloting. In every
case, the union x x x shall furnish the Ministry
(now Department) the results of the voting at
least seven days before the intended strike or
lockout, subject to the cooling-off period herein
Part IX : Concerted Activities
Labor Relations
provided.
x x x.
ART. 264. PROHIBITED ACTIVITIES.
(a) No labor organization or employer shall
declare a strike or lockout without first having
bargained collectively in accordance with Title
VII of this Book or without first having filed
the notice required in the preceding article or
without the necessary strike or lockout vote
first having been obtained and reported to the
Ministry (now Department).
x x x.”
Following are the Implementing Guidelines of
the above provisions issued by the Department of
Labor and Employment:
1. A strike shall be filed with the
Department of Labor and
Employment at least 15 days if the
issues raised are unfair labor
practice or at least 30 days if the
issue involved bargaining deadlock.
However, in case of dismissal from
employment of union officers duly
elected in accordance with the union
constitution and by-laws, which may
constitute union busting where the
existence of the union is threatened,
the 15-day cooling-off period shall
not apply and the union may take
action immediately;
2. The strike shall be supported by a
majority vote of the members of the
union obtained by secret ballot in a
meeting called for the purpose; and
3. A strike vote shall be reported to the
Department of Labor and
Employment at least seven (7) days
before the intended strike.
There is no showing that the petitioner union
observed the 7-day strike ban; and that the results
of the strike vote were submitted by petitioners to
the Department of Labor and Employment at least
seven (7) days before the strike.
We thus hold that for failing to comply with
the mandatory requirements of Article 263 (c) and
(f) of the Labor Code, the strike mounted by
petitioner union on May 20, 1994 is illegal.
In Gold City Integrated Port Service, Inc. vs.
NLRC, we stressed that “the language of the law
leaves no room for doubt that the cooling-off
period and the seven-day strike ban after the
strike-vote report were intended to be
mandatory.”
Capitol Medical Center, Inc. v. NLRC (2005)
We agree with the petitioner that the
respondent Union failed to comply with the second
paragraph of Section 10, Rule XXII of the Omnibus
Rules of the NLRC which reads:
Section 10. Strike or lockout vote. – A
decision to declare a strike must be approved
by a majority of the total union membership in
the bargaining unit concerned obtained by
secret ballot in meetings or referenda called for
the purpose. A decision to declare a lockout
must be approved by a majority of the Board
of Directors of the employer, corporation or
association or the partners obtained by a
secret ballot in a meeting called for the
purpose.
The regional branch of the Board may, at
its own initiative or upon the request of any
affected party, supervise the conduct of the
secret balloting. In every case, the union or
the employer shall furnish the regional branch
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of the Board and notice of meetings referred to
in the preceding paragraph at least twenty-four
(24) hours before such meetings as well as the
results of the voting at least seven (7) days
before the intended strike or lockout, subject
to the cooling-off period provided in this Rule.
Although the second paragraph of Section 10
of the said Rule is not provided in the Labor Code
of the Philippines, nevertheless, the same was
incorporated in the Omnibus Rules Implementing
the Labor Code and has the force and effect of law.
Aside from the mandatory notices embedded
in Article 263, paragraphs (c) and (f) of the Labor
Code, a union intending to stage a strike is
mandated to notify the NCMB of the meeting for
the conduct of strike vote, at least twenty-four
(24) hours prior to such meeting. Unless the
NCMB is notified of the date, place and time of the
meeting of the union members for the conduct of a
strike vote, the NCMB would be unable to
supervise the holding of the same, if and when it
decides to exercise its power of supervision.
In National Federation of Labor v. NLRC, the
Court enumerated the notices required by Article
263 of the Labor Code and the Implementing
Rules, which include the 24-hour prior notice to the
NCMB:
1) A notice of strike, with the
required contents, should be filed with
the DOLE, specifically the Regional
Branch of the NCMB, copy furnished the
employer of the union;
2) A cooling-off period must be
observed between the filing of notice
and the actual execution of the strike
thirty (30) days in case of bargaining
deadlock and fifteen (15) days in case of
unfair labor practice. However, in the
case of union busting where the union’s
existence is threatened, the cooling-off
period need not be observed.
…
4) Before a strike is actually
commenced, a strike vote should be
taken by secret balloting, with a 24-hour
prior notice to NCMB. The decision to
declare a strike requires the secret-
ballot approval of majority of the total
union membership in the bargaining unit
concerned.
5) The result of the strike vote
should be reported to the NCMB at least
seven (7) days before the intended
strike or lockout, subject to the cooling-
off period.
A union is mandated to notify the NCMB of an
impending dispute in a particular bargaining unit
via a notice of strike. Thereafter, the NCMB,
through its conciliator-mediators, shall call the
parties to a conference at the soonest possible
time in order to actively assist them in exploring all
possibilities for amicable settlement. In the event
of the failure in the conciliation/mediation
proceedings, the parties shall be encouraged to
submit their dispute for voluntary arbitration.
However, if the parties refuse, the union may hold
a strike vote, and if the requisite number of votes
is obtained, a strike may ensue.
 The purpose of the strike vote is to ensure
that the decision to strike broadly rests
with the majority of the union members
in general and not with a mere
Part IX : Concerted Activities
Labor Relations
minority, and at the same time,
discourage wildcat strikes, union bossism
and even corruption.
 A strike vote report submitted to the
NCMB at least seven days prior to the
intended date of strike ensures that a
strike vote was, indeed, taken. In the
event that the report is false, the seven-
day period affords the members an
opportunity to take the appropriate
remedy before it is too late.
 The 15 to 30 day cooling-off period is
designed to afford the parties the
opportunity to amicably resolve the
dispute with the assistance of the NCMB
conciliator/mediator, while the seven-day
strike ban is intended to give the DOLE an
opportunity to verify whether the
projected strike really carries the
imprimatur of the majority of the union
member.
The requirement of giving notice of the
conduct of a strike vote to the NCMB at least 24
hours before the meeting for the said purpose is
designed to (a) inform the NCMB of the intent of
the union to conduct a strike vote; (b) give the
NCMB ample time to decide on whether or not
there is a need to supervise the conduct of the
strike vote to prevent any acts of violence and/or
irregularities attendant thereto; and (c) should the
NCMB decide on its own initiative or upon the
request of an interested party including the
employer, to supervise the strike vote, to give it
ample time to prepare for the deployment of the
requisite personnel, including peace officers if need
be.
 Unless and until the NCMB is notified at
least 24 hours of the union’s decision to
conduct a strike vote, and the date, place,
and time thereof, the NCMB cannot
determine for itself whether to supervise
a strike vote meeting or not and insure its
peaceful and regular conduct. The failure
of a union to comply with the requirement
of the giving of notice to the NCMB at
least 24 hours prior to the holding of a
strike vote meeting will render the
subsequent strike staged by the union
illegal.
In this case, the respondent Union failed to
comply with the 24-hour prior notice requirement
to the NCMB before it conducted the alleged strike
vote meeting on November 10, 1997. As a result,
the petitioner complained that no strike vote
meeting ever took place and averred that the
strike staged by the respondent union was illegal.
 Conformably to Article 264 of the Labor
Code and Section 7, Rule XXII of the
Omnibus Rules Implementing the Labor
Code, no labor organization shall declare
a strike unless supported by a majority
vote of the members of the union
obtained by secret ballot in a meeting
called for that purpose. The requirement
is mandatory and the failure of a union to
comply therewith renders the strike
illegal. The union is thus mandated to
allege and prove compliance with the
requirements of the law.
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Bukluran ng Manggagawa sa Clothman
Knitting Corporation- Solidarity Unions in the
Phil. For Employment and Reforms v. CA
(2005)
Clearly, the petitioner union, its officers,
members and supporters staged a strike. In order
for a strike to be valid, the following requirements
laid down in paragraphs (c) and (f) of Article 263
of the Labor Code must be complied with: (a) a
notice of strike must be filed; (b) a strike-vote
must be taken; and (c) the results of the strike-
vote must be reported to the DOLE.
It bears stressing that these requirements are
mandatory, meaning, non-compliance therewith
makes the strike illegal. The evident intention of
the law in requiring the strike notice and strike-
vote report is to reasonably regulate the right to
strike, which is essential to the attainment of
legitimate policy objectives embodied in the law.
Considering that the petitioner union failed to
comply with the aforesaid requirements, the strike
staged on June 11 to 18, 2001 is illegal.
Consequently, the officers of the union who
participated therein are deemed to have lost their
employment status.
8. TEST OF LEGALITY
LEGAL STRIKES
Purpose and Means Test
Luzon Marine Dept Union v. Roldan (1950)
In the case of Rex Taxicab Company vs. Court
of Industrial Relations (70 Phil., 621), wherein this
Supreme Court held that "the employee, tenant or
laborer is inhibited from striking or walking out of
his employment only when so enjoined by the
Court of Industrial Relations,"
 it was also held that "in cases not falling
within the prohibition, the legality or
illegality of a strike depends, first, upon
the purpose for which it is maintained,
and, second, upon the means employed in
carrying it on."
 Thus, if the purpose which the laborers
intend to accomplish by means of a strike
is trivial, unreasonable or unjust, or if in
carrying on the strike the strikers should
commit violence or cause injuries to
persons or damage to property
o the strike, although not prohibited by
injunction, may be declared by the
court illegal, with the adverse
consequences to the strikers.
Caltex Phil. Inc. v. Phil Labor Org. Caltex
Chapter (1953)
Needless to say, Courts are not permitted to
render judgments solely upon the basis of
sympathies and inclinations. Neither are they
authorized, in the guise of affording protection to
labor, to distribute charities at the expense of
natural or juridicial persons, because our
constitutional government assures the latter
against deprivation of their property except in
accordance with the statutes or supplementary
equitable principles.
Part IX : Concerted Activities
Labor Relations
Philippine Marine Officers Guild v. Cia.
Maritima (1968)
Acts of violence in this jurisdiction, when
committed in carrying on a strike are not to be
overlooked in determining its legality or illegality.
 To overlook these acts of violence would
encourage abuses and terrorism and
subvert the purpose of the law which
provides for arbitration and peaceful
settlement of disputes.
 If a strike is unjustified as when it is
declared for trivial, unjust or
unreasonable purpose, the employer may
not be compelled to reinstate the strikers
to their employment. More so, when the
strike is carried on illegally.
San Miguel Corp. v. NLRC (2003)
Pursuant to Article 218 (e), the coercive
measure of injunction may be used to restrain an
actual or threatened unlawful strike. In the case at
bar, petitioner sought a permanent injunction to
enjoin the respondent’s strike. A strike is
considered as the most effective weapon in
protecting the rights of the employees to improve
the terms and conditions of their employment.
However, to be valid, a strike must be pursued
within legal bounds.
One of the procedural requisites that Article
263 of the Labor Code and its Implementing Rules
prescribe is the filing of a valid notice of strike with
the NCMB. Imposed for the purpose of
encouraging the voluntary settlement of disputes,
this requirement has been held to be mandatory,
the lack of which shall render a strike illegal.
Clearly, therefore, applying the aforecited
ruling to the case at bar, when the NCMB ordered
the preventive mediation on May 2, 1994,
respondent had thereupon lost the notices of strike
it had filed. Subsequently, however, it still
defiantly proceeded with the strike while mediation
was ongoing, and notwithstanding the letter-
advisories of NCMB warning it of its lack of notice
of strike.
Such disregard of the mediation proceedings
was a blatant violation of the Implementing Rules,
which explicitly oblige the parties to bargain
collectively in good faith and prohibit them from
impeding or disrupting the proceedings.
Moreover, it bears stressing that Article
264(a) of the Labor Code explicitly states that a
declaration of strike without first having filed the
required notice is a prohibited activity, which may
be prevented through an injunction in accordance
with Article 254. Clearly, public respondent should
have granted the injunctive relief to prevent the
grave damage brought about by the unlawful
strike.
Petitioner herein evinced its willingness to
negotiate with the union by seeking for an order
from the NLRC to compel observance of the
grievance and arbitration proceedings. Respondent
however resorted to force without exhausting all
available means within its reach. Such
infringement of the aforecited CBA provisions
constitutes further justification for the issuance of
an injunction against the strike. As we said long
ago: “Strikes held in violation of the terms
contained in a collective bargaining agreement are
illegal especially when they provide for conclusive
arbitration clauses. These agreements must be
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strictly adhered to and respected if their ends have
to be achieved.
We cannot sanction the respondent-union’s
brazen disregard of legal requirements imposed
purposely to carry out the state policy of
promoting voluntary modes of settling disputes.
The state’s commitment to enforce mutual
compliance therewith to foster industrial peace is
affirmed by no less than our Constitution. Trade
unionism and strikes are legitimate weapons of
labor granted by our statutes. But misuse of these
instruments can be the subject of judicial
intervention to forestall grave injury to a business
enterprise.
Malayang Samahan ng mga Manggagawa sa
Greenfield v. Ramos (2000)
With regard to the issue of the legality or
illegality of the strike, the Labor Arbiter held that
the strike was illegal for the following reasons: (1)
it was based on an intra-union dispute which
cannot properly be the subject of a strike, the right
to strike being limited to cases of bargaining
deadlocks and unfair labor practice (2) it was made
in violation of the "no strike, no lock-out" clause in
the CBA, and (3) it was attended with violence,
force and intimidation upon the persons of the
company officials, other employees reporting for
work and third persons having legitimate business
with the company, resulting to serious physical
injuries to several employees and damage to
company property.
On the submission that the strike was illegal
for being grounded on a non-strikeable issue, that
is, the intra-union conflict between the federation
and the local union, it bears reiterating that when
respondent company dismissed the union officers,
the issue was transformed into a termination
dispute and brought respondent company into the
picture.
Petitioners believed in good faith that in
dismissing them upon request by the federation,
respondent company was guilty of unfair labor
pratice in that it violated the petitioner’s right to
self-organization. The strike was staged to protest
respondent company’s act of dismissing the union
officers.
 Even if the allegations of unfair labor
practice are subsequently found out to be
untrue, the presumption of legality of the
strike prevails.
Guidelines and Balancing of Interest
Shell Oil Workers Union v. Shell Co. of the
Phils (1971)
A strike otherwise valid, if violent in character,
maybe placed beyond the pale. Care is to be
taken, however, especially where an unfair labor
practice is involved, to avoid stamping it with
illegality just because it is tainted by such acts. To
avoid rendering illusory the recognition of the right
to strike, responsibility in such a case should be
individual and not collective. A different conclusion
would be called for, of course, if the existence of
force while the strike lasts is pervasive and
widespread, consistently and deliberately resorted
to as a matter of policy. It could be reasonably
concluded then that even if justified as to ends,
it becomes illegal because of the means
employed'.
Part IX : Concerted Activities
Labor Relations
This is not by any means to condone the
utilization of force by labor to attain its objectives.
It is only to show awareness that in labor conflicts,
the tension that fills the air as well as the feeling
of frustration and bitterness could break out in
sporadic acts of violence.
If there be in this case a weighing of interests
in the balance, the ban the law imposes on unfair
labor practices by management that could provoke
a strike and its requirement that it be conducted
peaceably, it would be, to repeat, unjustified,
considering all the facts disclosed, to stamp the
strike with illegality. It is enough that individual
liability be incurred by those guilty of such acts of
violence that call for loss of employee status. Such
an approach is reflected in our recent decisions.
Almira v. B.F. Goodrich, Phils, Inc. (1974)
Due to the refusal of the management to
consider petitioners' union as the exclusive
bargaining representative, petitioners staged a
strike and picketed the company's premises. In the
course of the mass picketing, illegal and unlawful
acts were committed by the petitioners.
Respondent CIR declared petitioners to have
committed an illegal strike and dismissed the
petitioners.
REASON FOR PENALTY LESS PUNITIVE THAN
DISMISSAL
Where a penalty less punitive would suffice,
whatever missteps may be committed by labor
ought not to be visited with a consequence so
severe. it is not only because of the law's concern
for the workingman.
There is, in addition, his family to consider.
Unemployment brings untold hardships and
sorrows on those dependent on the wage-earner.
The misery and pain attendant on the loss of jobs
then could be avoided if there be acceptance of the
view that under all the circumstances of this case,
petitioners should not be deprived of their means
of livelihood. Nor is this to condone what had been
done by them, For all this while, since private
respondent considered them separated from the
service, they had not been paid.
SECURITY OF TENURE FORTIFIES PROTECTION TO
LABOR
The conclusion that the dismissal of
petitioners in view of their unlawful acts during the
strike is uncalled for is fortified by the stress on
the security of tenure that is a notable feature of
the present Constitution.
ATTENDANT RESPONSIBILITY ON THE WORKING
FORCE AND MANAGEMENT
The basic doctrine underlying the provisions of
the Constitution so solicitous of labor as well as
the applicable statutory norms is that both the
working force and management are necessary
components of the economy. The rights of labor
have been expanded. Concern is evident for its
welfare. The advantages thus conferred, however,
call for attendant responsibilities. The ways of the
law are not to be ignored. Those who seek comfort
from the shelter that it affords should be the last
to engage in activities which negates the very
concept of a legal order as antithetical to force and
coercion. What is equally important is that in the
steps to be taken by it in the pursuit of what it
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believes to be its rights, the advice of those
conversant with the requirements of legal norms
should be sought and should not be ignored. It is
even more important that reason and not violence
should be its milieu.
DEFENSES – GOOD FAITH - ULP
Interwood Employees Assoc. v. Int’l
Hardwood (1956)
Generally, a strike based on a "non-strikeable"
ground is an illegal strike: corollarily, a strike
grounded on ULP is illegal if no such acts actually
exist. As an exception, even if no ULP acts are
committed by the employer, if the employees
believe in good faith that ULP acts exist so as to
constitute a valid ground to strike, then the strike
held pursuant to such belief may be legal.
As a general rule, therefore, where the union
believed that the employer committed ULP and the
circumstances warranted such belief in good faith,
the resulting strike may be considered legal
although, subsequently, such allegations of unfair
labor practices were found to be groundless.
An established caveat, however, is that a mere
claim of good faith would not justify the holding of
a strike under the aforesaid exception as, in
addition thereto, the circumstances must have
warranted such belief. It is, therefore, not enough
that the union believed that the employer
committed acts of ULP when the circumstances
clearly negate even a prima facie showing to
sustain such belief.
PNOC Dockyard v. NLRC (1998)
In resolving that the strike was legal, the labor
tribunal took note of the following facts: (1) the
notice of strike was filed only after the union
members lost hope for the redress of their
grievance arising from their exclusion from the
P2,500 salary increase; (2) the union members
honestly believed that they were discriminated
against, since the company practice in the past
was to grant salary increases to all employees
regardless of whether they were MPTs
(managerial, professional, and technical
employees) or NMPTs (non-managerial,
professional, and technical employees); (3) such
discriminatory grant appeared to be an unfair labor
practice intended to discourage union membership,
since MPTs were non-union members; and (4) the
labor unions complied with the legal requirements
before going on strike, such as the members' strike
vote by secret ballot, the submission of the results
thereof to the National Conciliation and Meditation
Board (NCMB), the filing of a notice to strike and
the observance of the 15-ay cooling-off period.
Respondent Commission opined that the
unions had a reason to regard the salary
discrimination, believed to discourage membership
in the labor organization, as an unfair labor
practice prohibited by Article 248 (e) of the Labor
Code.
Thus, although rejecting that PNOC and its
subsidiaries were guilty of discrimination, the NLRC
reiterated the policy enunciated in several labor
cases "that a strike does not automatically carry
the stigma of illegality even if no unfair labor
Part IX : Concerted Activities
Labor Relations
practice were committed by the employer. It
suffices if such a belief in good faith is entertained
by labor as the inducing factor for staging a
strike."
 Indeed, the presumption of legality
prevails even if the allegation of unfair
labor practice is subsequently found to be
untrue, provided that the union and its
members believed in good faith in the
truth of such averment.
ILLEGAL STRIKES
Basis – Illegality
Art. 263
Strikes, picketing and lockouts.
(b) Workers shall have the right to engage in
concerted activities for purposes of collective
bargaining or for their mutual benefit and
protection.
 The right of legitimate labor organizations
to strike and picket and of employers to
lockout, consistent with the national
interest, shall continue to be recognized
and respected.
 However, no labor union may strike and
no employer may declare a lockout on
grounds involving inter-union and intra-
union disputes.
(c) In case of bargaining deadlocks, the duly
certified or recognized bargaining agent may file a
notice of strike or the employer may file a notice of
lockout with the Ministry at least 30 day before the
intended date thereof.
 In cases of unfair labor practice, the
period of notice shall be 15 days and in
the absence of a duly certified or
recognized bargaining agent, the notice of
strike may be filed by any legitimate labor
organization in behalf of its members.
o However, in case of dismissal from
employment of union officers duly elected
in accordance with the union constitution
and by-laws, which may constitute union
busting, where the existence of the union
is threatened, the 15-day cooling-off
period shall not apply and the union may
take action immediately.
Art. 264
Prohibited activities.
(a)No labor organization or employer shall declare
a strike or lockout without first having bargained
collectively in accordance with Title VII of this
Book or
 without first having filed the notice
required in the preceding Article or
 without the necessary strike or lockout
vote first having been obtained and
reported to the Ministry.
No strike or lockout shall be declared after
assumption of jurisdiction by the President or the
Minister or after certification or submission of the
dispute to compulsory or voluntary arbitration or
during the pendency of cases involving the same
grounds for the strike or lockout.
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Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with full
backwages.
 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 a strike may be declared to
have lost his employment status:
 Provided, That mere participation of a
worker in a lawful strike shall not
constitute sufficient ground for
termination of his employment, even if a
replacement had been hired by the
employer during such lawful strike.
Art. 265
Improved offer balloting.
In an effort to settle a strike, the Department of
Labor and Employment shall conduct a referendum
by secret ballot on the improved offer of the
employer on or before the 30th day of the strike.
When at least a majority of the union members
vote to accept the improved offer the striking
workers shall immediately return to work and the
employer shall thereupon readmit them upon the
signing of the agreement.
In case of a lockout, the Department of Labor and
Employment shall also conduct a referendum by
secret balloting on the reduced offer of the union
on or before the 30th day of the lockout.
 When at least a majority of the board of
directors or trustees or the partners
holding the controlling interest in the case
of a partnership vote to accept the
reduced offer, the workers shall
immediately return to work and the
employer shall thereupon readmit them
upon the signing of the agreement.
Effect of Illegality
Art. 264 (a)
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with full
backwages.
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 a strike may be declared to have lost
his employment status:
 Provided, That mere participation of a
worker in a lawful strike shall not
constitute sufficient ground for
termination of his employment, even if a
replacement had been hired by the
employer during such lawful strike.
San Juan de Dios etc. v. San Juan de Dios
(2004)
Despite the receipt of an order from then
SOLE to return to their respective jobs, the Union
officers and members refused to do so and defied
the same. Consequently, then, the strike staged
by the Union is a prohibited activity under Article
264 of the Labor Code. Hence, the dismissal of
its officers is in order. The respondent
Foundation was, thus, justified in terminating
Part IX : Concerted Activities
Labor Relations
the employment of the petitioner Union’s officers.
Stamford Marketing Corp. v. Julian (2004)
Article 264 of the Labor Code, in providing for
the consequences of an illegal strike, makes a
distinction between union officers and members
who participated thereon. Thus, knowingly
participating in an illegal strike is a valid ground
for termination from employment of a union
officer. The law, however, treats differently mere
union members. Mere participation in an illegal
strike is not a sufficient ground for termination of
the services of the union members. The Labor
Code protects an ordinary, rank-and-file union
member who participated in such a strike from
losing his job, provided that he did not commit an
illegal act during the strike. Thus, absent any
clear, substantial and convincing proof of illegal
acts committed during an illegal strike, an ordinary
striking worker or employee may not be
terminated from work.
With respect to union officers, however, there
is no dispute they could be dismissed for
participating in an illegal strike. Union officers are
duty- bound to guide their members to respect the
law. Nonetheless, as in other termination cases,
union officers must be given the required notices
for terminating an employment, i.e., notice of
hearing to enable them to present their side, and
notice of termination, should their explanation
prove unsatisfactory. Nothing in Article 264 of the
Labor Code authorizes an immediate dismissal of a
union officer for participating in an illegal strike.
The act of dismissal is not intended to happen ipso
facto but rather as an option that can be exercised
by the employer and after compliance with the
notice requirements for terminating an employee.
In this case, petitioners did not give the required
notices to the union officers.
Employment of Strike Breakers
Art. 246 (c)
No employer shall use or employ any strike-
breaker, nor shall any person be employed as a
strike-breaker.
Art. 212(r)
"Strike-breaker" means any person who obstructs,
impedes, or interferes with by force, violence,
coercion, threats, or intimidation any peaceful
picketing affecting wages, hours or conditions of
work or in the exercise of the right of self-
organization or collective bargaining.
Run-Away Shop
Complex Electronics Employees Assoc v.
NLRC (1999)
The Union anchors its position on the fact that
Lawrence Qua is both the president of Complex
and Ionics and that both companies have the same
set of Board of Directors. It claims that business
has not ceased at Complex but was merely
transferred to Ionics, a runaway shop.
Held: The Union's contentions are untenable.
A “runaway shop” is defined as one wherein
the employer moves its business to another
location or it temporarily closes its business for
anti-union purposes. A “runaway shop” in this
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sense, is a relocation motivated by anti-union
animus rather than for business reasons.
In this case, however, Ionics was not set up
merely for the purpose of transferring the business
of Complex. At the time the labor dispute arose at
Complex, Ionics was already existing as an
independent company.
The mere fact that one or more corporations
are owned or controlled by the same or single
stockholder is not a sufficient ground for
disregarding separate corporate personalities.
Ionics may be engaged in the same business
as that of Complex, but this fact alone is not
enough reason to pierce the veil of corporate
fiction of the corporation.
 Well-settled is the rule that a corporation
has a personality separate and distinct
from that of its officers and stockholders.
This fiction of corporate entity can only be
disregarded in certain cases such as when
it is used to defeat public convenience,
justify wrong, protect fraud, or defend
crime.
As very clearly established, the closure was
triggered by the customers' pull-out of their
equipment, machinery and materials, who were
alarmed by the pending labor dispute and the
imminent strike by the union, and as a protection
to their interest pulled-out of business from
Complex who had no recourse but to cease
operation to prevent further losses.
 The indiscretion committed by the Union
in filing the notice of strike, which to our
mind is not the proper remedy to question
the amount of benefits due the
complainants who will be retrenched at
the closure of the Lite-On Line, gave a
wrong signal to customers of Complex,
which consequently resulted in the loss of
employment of not only a few but to all
the of the workers. It may be worth
saying that the right to strike should only
be a remedy of last resort and must not
be used as a show of force against the
employer.
Burden of Economic Loss
Crownwell Commercial Employees &
Laborer’s Union v. CIR (1964)
At the outset, two types of employees involved
in this case must be distinguished, namely, those
who were discriminatorily dismissed for union
activities and those who voluntarily went on strike.
To the first class belong Francisco Gaddi and
Cresenciano Andrada, both of whom, as earlier
shown, had been dismissed for union activities,
and the five salesmen who were virtually locked
out by the company when they were ordered to
put their trucks in the garage. To the second class
belong those who declared a strike on March 11,
1957, following the failure of the company-union
conference to settle their dispute.
Both types of employees are entitled to
reinstatement. Indeed, it is said that striking
employees are entitled to reinstatement whether
or not the strike was the consequence of the
employer's unfair labor practice, unless, where the
strike was not due to any unfair labor practice,
the employer has hired others to take the place
Part IX : Concerted Activities
Labor Relations
of the strikers and has promised them continued
employment,
From this rule, however, must be excepted
those who, although discriminatorily discharged,
must nevertheless be denied reinstatement
because of (1) unlawful conduct or (2) because of
violence. For while the Court of Industrial Relations
has indeed discretion in determining the remedy in
case of unfair labor practice, its discretion is not
unbounded. It cannot exercise its right beyond the
point which the object of "effectuation" of the Act
requires. It can not order the reinstatement of
those convicted of violence upon the employer's
property.
The same thing may be said of the denial of
reinstatement to those who might have found
substantial employment elsewhere. We agree with
the union that under the ruling of Phelps Dodge
Corp. vs. NLRB, 313 U.S. 177, 85 L, ed. 1271 the
mere fact that strikers or dismissed employees
have found such employment elsewhere is not
necessarily a bar to their reinstatement.
Coming now to the question of backpay, the
decision under review directs the company "to
reinstate all the strikers listed in Annex 'A' of the
complaint, without back wages, in view of the
circumstances, as explained on the subject of the
strike, unless they have found substantial
employment elsewhere during the pendency of this
case."
We believe that the denial of backpay may be
justified, although on a different ground. For this
purpose, We shall advert again to the distinction
earlier made between discriminatorily dismissed
employees and those who struck, albeit in protest
against the company's unfair labor practice.
Discriminatorily dismissed employees receive back
pay from the date of the act of discrimination, that
is from the day of their discharge. On this score,
the pay from the date of the act of discrimination,
that is from the day of their discharge. On this
score, the award of backpay to Gaddi, Andrada
and the salesmen may be justified. The salesmen,
as already stated, were practically locked out when
they were ordered to put their trucks in the
garage; they did not voluntarily strike. Hence, the
award of backwages.
In contrast, the rest of the employees struck
as a voluntary act of protest against what they
considered unfair labor practices of the company.
The stoppage of their work was not the direct
consequence of the company's unfair labor
practice. Hence their economic loss should not be
shifted to the employer.
As explained by the NLRB in the case of
American Manufacturing Co., 5 NLRB 443, "When
employees voluntarily go on strike, even if in
protest against unfair labor practices, it has been
our policy not to award them back pay during the
strike.
 However, when the strikers abandon the
practices and the employer either refuses
to reinstate them or imposes upon their
reinstatement new conditions that
constitute unfair labor practices, We are
of the opinion that the considerations
impelling our refusal to award back pay
are no longer controlling.
 Accordingly, We hold that where, as in
this case, an employer refuses to
reinstate strikers except upon their
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acceptance of new conditions that
discriminate against them because of their
union membership or activities, the
strikers who refuse to accept the
conditions and are consequently refused
reinstatement are entitled to be made
whole for any losses of pay the suffered
by reason of the respondent's
discriminatory acts."
 While it is true that the strikers in this
case offered to return to work on March
14, 1957, We find that their offer was
conditional. Their offer was predicated on
the company's observance of the
provisions of the collective bargaining
agreement-the very bone of contention
between the parties by reason of which
the union walked out To be effective so as
to entitle the strikers to backpay, the offer
must have been unconditional. The
strikers must have offered to return to
work under the same conditions under
which they worked just before their strike
so that the company's refusal would have
placed on the latter the blame for their
economic loss. But that is not the case
here. Indeed the offer of the company to
accept the strikers under the conditions
obtaining before the strike (without
prejudice of course to taking up the
grievances of the strikers) can be
considered in its favor in denying
backwages to strikers.
 Nor may it be said that the strikers could
not have offered to return to work
because the company dismissed them
upon their failure to return to work on
March 14, 1957. For the notice given by
the company was merely a "tactical"
threat designed to break the strike and
not really to discharge the striking
employees.
Consolidated Labor Assoc. v. Marsman & Co.
(1964)
We now come to the question of backpay. In
an economic strike, the strikers are not entitled to
backpay, since the employer should get the
equivalent day's work for what he pays his
employees. During the time that the strike was an
economic one, complainants had no right to back
pay. The Industrial Court could not have made a
finding of unfair labor practice with respect to such
time, as none had so far been committed. This
being an unfair labor practice case, it cannot,
therefore, order reinstatement much less back pay
for that period.
On the other hand, even after the court has
made a finding of unfair labor practice, it still has
the discretion to determine whether or not to grant
back pay. Such discretion was not abused when it
denied back wages to complainants, considering
the climate of violence which attended the strike
and picket that the complainants conducted. While
the complainants ordered reinstated did not
actively take part in the acts of violence, their
minatory attitude towards the Company may be
gathered from the fact that from the very first day
of the strike policemen had to patrol the strike
zone in order to preserve peace.
Part IX : Concerted Activities
Labor Relations
SSS v. SSS Supervisors’ Union (1982)
We find for the petitioner based on the
equitable tenet of a "fair day's wage for a fair day's
labor."
"The age-old rule governing the relation
between labor and capital or management and
employee is that of a 'fair day's age for a fair
day's labor.' 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 "as illegally locked out, dismissed or
suspended. It is hardly fair or just for an employee
or laborer to fight or litigate against his employer
on the employer's time."
In this case, the failure to work on the part of
the members of respondent Union was due to
circumstances not attributable to themselves. But
neither should the burden of the economic loss
suffered by them be shifted to their employer, the
SSS, which was equally faultless, considering that
the situation was not a direct consequence of the
employer's lockout or unfair labor practice. Under
the circumstances, it is but fair that each party
must bear his own loss.
"Considering, therefore, that the parties had
no hand or participation in the situation they were
in, and that the stoppage of the work was not the
direct consequence of the company's lockout or
unfair labor practice, 'the economic loss should not
be shifted to the employer.' Justice and equity
demand that each must have to bear its own loss,
thus placing the parties in equal footing where
none should profit front the other there being no
fault of either."
Phil. Interfashion v. NLRC (1982)
The finding of illegal strike was not disputed.
Therefore, the 114 strikers employees who
participated therein are liable for termination. On
the other hand, the finding of illegal lockout was
likewise not disputed. Therefore, the 114
employees affected by the lockout are also subject
to reinstatement.
Petitioner, however, contends that the
application for readmission to work by the 150
strikers constitutes condonation of the lockout
which should likewise bind the 114 remaining
strikers. Suffice it to say that the 150 strikers
acted for themselves, not in behalf of the 114
remaining strikers, and therefore the latter could
not be deemed to have condoned petitioner's
lockout.
The findings show that both petitioner and the
114 strikers are in pari delicto, a situation which
warrants the maintenance of the status quo. This
means that the contending parties must be
brought back to their respective positions before
the controversy; that is, before the strike.
Therefore, the order reinstating the 114 employees
is proper."
With such restoration of the status quo ante it
necessarily follows, as likewise submitted by the
Solicitor General, that the petition must be granted
insofar as it seeks the setting aside of the award of
three months' backwages to the 114 employees
ordered reinstated on the basis of the general rule
that strikers are not entitled to backwages (with
some exceptions not herein applicable, such as
where the employer is guilty of oppression and
union-busting activities and strikers ordered
reinstated are denied such reinstatement and
therefore are declared entitled to backwages from
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the date of such denial). More so, is the principle
of "no work, no pay" applicable to the case at bar,
in view of the undisputed finding of illegality of the
strike.
Improved Offer Balloting and Strikes
Art. 265
Improved offer balloting.
In an effort to settle a strike, the Department of
Labor and Employment shall conduct a referendum
by secret ballot on the improved offer of the
employer on or before the 30th day of the strike.
 When at least a majority of the union
members vote to accept the improved
offer the striking workers shall
immediately return to work and the
employer shall thereupon readmit them
upon the signing of the agreement.
In case of a lockout, the Department of Labor and
Employment shall also conduct a referendum by
secret balloting on the reduced offer of the union
on or before the 30th day of the lockout.
 When at least a majority of the board of
directors or trustees or the partners
holding the controlling interest in the case
of a partnership vote to accept the
reduced offer, the workers shall
immediately return to work and the
employer shall thereupon readmit them
upon the signing of the agreement
9.03 PICKETING
1. NATURE AND PURPOSE OF PICKET LINE
Insular Life Assurance Co. Ltd. Employees v.
Insular Life Assurance Co. Ltd. (1971)
The heated altercations and occasional blows
exchanged on the picket line do not affect or
diminish the right to strike. Persuasive on this
point is the following commentary:
"We think it must be conceded that some
disorder is unfortunately quite usual in any
extensive or long drawn out strike. A strike is
essentially a battle waged with economic
weapons. Engaged in it are human beings
whose feelings are stirred to the depths. Rising
passions call forth hot words. Hot words lead to
blows on the picket line.
The transformation from economic to physical
combat by those engaged in the contest is
difficult to prevent even when cool heads direct
the fight. Violence of this nature, however
much it is to be regretted, must have been in
the contemplation of the Congress when it
provided in Sec. 13 of Act 29 USCA Sec. 163,
that nothing therein should be construed so as
to interfere with or impede or diminish in any
way the right to strike. If this were not co, the
rights afforded to employees by the Act would
indeed be illusory. We accordingly recently held
that it was not intended by the Act that minor
disorders of this nature would deprive a striker
of the possibility of reinstatement." Republic
Steel Corp. v. N. L. R. B., 107 F2d 472, cited in
Mathews, Labor Relations and the Law, p. 378)
Security Bank Employees Union v. Security
Bank and Trust Co. (1968)
Part IX : Concerted Activities
Labor Relations
Moreover, this Court, in Caltex Refinery
Association vs. Lucero, made explicit its
disapproval of an injunction against strikes,
holding that "no Court can issue a restraining
order against union members who plan to hold a
strike even if the same may appear to be illegal."
That is so in view of the unmistakable language
employed in the Industrial Peace Act, with
reference to strikes. The statutory command on
picketing likewise calls for a similar declaration.
The obstacle that bars respondent Bank from
attaining its objective to bar all picketing is indeed
too formidable to surmount. Also, even without
such a categorical mandate expressed in the Act,
the recognition of peaceful picketing as a
constitutional right embraced in the freedom of
expression dating from the 1947 decision of
Mortera vs. Court of Industrial Relations, precludes
the issuance of such a blanket prohibition as that
imposed in the challenged order of respondent
Judge of January 3, 1968.
This is not to say that picketing, like freedom
of expression in general, has no limits. Certainly,
to the extent that it is an instrument of coercion
rather than of persuasion, it cannot rightfully be
entitled to the protection associated with free
speech. Equally so, there can be no indiscriminate
ban on the freedom to disseminate the facts of a
labor dispute and to appeal for public sympathy,
which is the aim of peaceful picketing, without a
transgression of the Constitution, sufficient to oust
a court of jurisdiction, even on the assumption
that it was originally possessed of such a
competence, which was not so in this case as had
been earlier made clear.
Mortera v. CIR (1947)
The prohibition in the order of February 21,
1947, against picketing in any guise or form,
should be understood to cover only illegal
picketing, that is, picketing through the use of
illegal means. Peaceful picketing cannot be
prohibited. It is part of the freedom of speech
guaranteed by the Constitution.
PAFLU V. Cloribel (1969)
The right to picket as a means of
communicating the facts of a labor dispute is a
phase of the freedom of speech guaranteed by the
constitution.6 If peacefully carried out, it can not
be curtailed even in the absence of employer-
employee relationship.
The right is, however, not an absolute one.
While peaceful picketing is entitled to protection as
an exercise of free speech, we believe that courts
are not without power to confine or localize the
sphere of communication or the demonstration to
the parties to the labor dispute, including those
with related interest, and to insulate
establishments or persons with no industrial
connection or having interest totally foreign to the
context of the dispute.
Thus the right may be regulated at the
instance of third parties or "innocent bystanders" if
it appears that the inevitable result of its exercise
is to create an impression that a labor dispute with
which they have no connection or interest exists
between them and the picketing union or
constitute an invasion of their rights.
In one case decided by this Court, we upheld
a trial court's injunction prohibiting the union from
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blocking the entrance to a feed mill located within
the compound of a flour mill with which the union
had a dispute. Although sustained on a different
ground, no connection was found between the two
mills owned by two different corporations other
than their being situated in the same premises. It
is to be noted that in the instances cited, peaceful
picketing has not been totally banned but merely
regulated.
And in one American case, a picket by a labor
union in front of a motion picture theater with
which the union had a labor dispute was enjoined
by the court from being extended in front of the
main entrance of the building housing the theater
wherein other stores operated by third persons
were located.
The present case squarely fits into the
foregoing legal setting. Wellington and Galang are
mere "innocent bystanders." They are entitled to
seek protection of their rights from the courts and
the courts may, accordingly, legally extend the
same. Moreover, PAFLU's right to peacefully picket
METBANK is not curtailed by the injunctions issued
by respondent judge. The picket is merely
regulated to protect the rights of third parties. And
the reason for I his is not farfetched. If the law
fails to afford said protection, men will endeavor to
safeguard their rights by their own might, take the
law in their own hands, and commit acts which
lead to breaches of peace, bloodshed, and
ultimately the final subversion of the law. This
should not be allowed to happen.
2. PICKETING AND LIBEL LAWS
PCIB V. Philnabank Employees (1981)
There is a unique aspect to this action for libel
against the Philippine National Bank Employees'
Association. It was filed by plaintiff PCIB as a result
of placards and signboards along the PNB building
in Escolta, Manila, containing the following: "PCIB
BAD ACCOUNTS TRANSFERRED TO PNB-NIDC?"
There was a labor controversy resulting in a
strike, fortunately lasting only for one day. The
labor union made use of its constitutional right to
picket.
From the time of Mortera vs. CIR, a 1947
decision this Court has been committed to the view
that' peaceful picketing is part of the freedom of
speech guarantee of the Constitution. The latest
case in point where such a principle was reaffirmed
expressly is Associated Labor Union v. Gomez, a
1980 decision.
There is no mention of the other placards but
it is not unlikely that to bolster its claim, mention
was likewise made and in bold letters at that of
such alleged failing of its management. That was
the aim and intent as found by the lower court.
That could not very well be disputed by plaintiff-
appellant. Unfortunately, the offending imputation,
but in the form of a question, was included. It was
due to a former official of plaintiff appellant's bank
who was thereafter named as President of the
Philippine National Bank. Should there be an
automatic attitude of condemnation for such
incident?
If the realistic observation of Justice
Frankfurter in Milk Wagon Drivers Union of Chicago
v. Meadowmoor Dairies be heeded that labor
disputes give rise to strong emotional response,
Part IX : Concerted Activities
Labor Relations
then the decision reached by the lower court
becomes even more acceptable.
 It is a fact of industrial life, both in the
Philippines as in the United States, that in
the continuing confrontation between
labor and management, it is far from
likely that the language employed would
be both courteous and polite. Such being
the case, there is no affront either to
reason or to the law in the complaint for
libel being dismissed. In placing reliance
on the constitutional right of freedom of
expression, this Court once again makes
manifest its adherence to the principle
first announced by Justice Malcolm as
ponente in the leading case of United
States v. Bustos.
 In no uncertain terms, it made clear that
the judiciary, in deciding suits for libel,
must ascertain whether or not the alleged
offending words may be embraced by the
guarantees of free speech and free press.
It cannot be too often said that Bustos
was promulgated as far back as March 8,
1918. A doctrine analogous in character.
3. EMPLOYER-EMPLOYEE RELATIONSHIP
De Leon v. National Labor Union (1957)
PICKETING; ABSENCE OF EMPLOYER-
EMPLOYEE RELATIONSHIP DOES NOT MAKE
PICKETING ILLEGAL.-Picketing peacefully carried
out is not illegal even in the absence of employer-
employee relationship, for peaceful picketing is a
part of the freedom of speech guaranteed by the
Constitution.
4. CURTAILMENT
Free Telephone Workers Union v. PLDT Co.
(1982)
However, with respect to the first error
assigned, petitioner injects a constitutional issue in
that the respondent CIR's order of July 16, 1965
violates the constitutional guarantee of freedom of
speech because it called for the lifting of peaceful
picket lines.
Indeed, it is now well-settled that peaceful
picketing cannot be restrained because the same is
part of the freedom of speech But petitioner fails
to realize that the questioned July 16, 1965 order
of the Court of Industrial Relations did not refer to
peaceful picketing.
In Mortera, supra, where the therein
questioned order partly declared that ". . .
picketing under any guise and form is hereby
prohibited . . .," this Court ruled that the "order of
the Court of Industrial Relations prohibiting
picketing must be understood to refer only to
illegal picketing, that is, picketing through the use
of illegal means. Peaceful picketing cannot be
prohibited. It is part of the freedom of speech
guaranteed by the Constitution. Therefore, the
order of the Court of Industrial Relations must be
understood to refer only to illegal picketing, that
is, picketing through the use of illegal means"
In this case, the questioned order should also
be taken as limited to the lifting of the picket lines
which constituted illegal picketing especially so
because it expressly stated that the petitioner
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union and its officers, agents or symphatizers "are
hereby directed to call off the strike declared on
July 17, 1965, and to lift the picket lines
established in and around the premises of
respondent company's various offices and
installations . . . . The persons manning the picket
lines in these places are hereby enjoined from
impeding and interfering with implementation of
this Order as well as from interfering in any
manner with the operations of respondent.
Nagkakaisang Manggagawa sa Cuizon Hotel
v. Libron (1983)
The above restraining order had to be issued
because as contended in the petition, the order of
the labor arbiter certainly cannot be declared final
and executory upon the mere issuance thereof.
That is manifestly in contravention of the law.
Article 223 of the Labor Code is quite explicit on
the matter, a period of 10 days being granted
either or both to the parties involved from receipt
of any order to appeal to the National Labor
Relations Commission.
Moreover, the wholesale condemnation of
peaceful picketing is likewise clearly bereft of
support in law. As pointed out in a very recent
decision decided this year, PAFLU v. CFI of Rizal:
"It need not be stressed that peaceful picketing is
embraced in freedom of expression. As
emphatically declared in Philippine Commercial &
Industrial Bank v. Philnabank Employees'
Association: 'From the time of Mortera v. Court of
Industrial Relations, a 1947 decision this Court has
been committed to the view that peaceful picketing
is part of the freedom of speech guarantee of the
Constitution.' Reference was made in such opinion
to Associated Labor Union v. Gomez.
In the answer, reference was made to the
alleged commission of acts of violence against non-
striking employees and even against the eighty-
year old "sickly and paralytic President" of
respondent. It is to be understood, of course, that
the peaceful picketing authorized cannot certainly
countenance acts of illegality. The interim
Batasang Pambansa has spoken on the subject
thus: "(e) No person engaged in picketing shall
commit any act of violence, coercion or
intimidation or obstruct the free ingress to or
egress from the employer's premises for lawful
purposes, or obstruct public thoroughfares.
5. RESTRICTIONS, INNOCENT THIRD PARTY
RULE AND LIABILITIES
Liwayway Publishing Co. v. Permanent
Concrete Workers Union (1981)
The first question that strikes Us to be of
determinative significance is whether or not this
case involves or has arisen out of a labor dispute.
If it does, then with certainty, Section 9 of
Republic Act 875, the "Industrial Peace Act," would
apply. if it does not, then the Rules of Court will
govern the issuance of the writ of preliminary
injunction because it will not partake the nature of
a labor injunction which the lower court has no
jurisdiction to issue.
The record before Us reveals that appellant
union and its members picketed the gate leading
to appellee's bodega. This gate is about 200
meters from the gate leading to the premises of
the employer of the appellants.
Part IX : Concerted Activities
Labor Relations
Appellee is not in any way related to the
striking union except for the fact that it is the
sublessee of a bodega in the company's
compound.
The picketers belonging to the appellant
union had stopped and prohibited the truck of the
appellee from entering the compound to load
newsprint from its bodega, the union members
intimidating and threatening with bodily harm the
employees of the appellee who were in the truck.
 In such a factual situation, the query to
be resolved is whether the appellee is a
third party or an "innocent by-stander"
whose right has been invaded and,
therefore, entitled to protection by the
regular courts.
At this juncture, it is well to cite and stress the
pronouncements of the Supreme Court on the
right to picket. Thus, in the case of PAFLU vs.
Cloribel, the SC said:
"The right to picket as a means of
communicating the facts of a labor dispute is a
phase of the freedom of speech guaranteed by
the constitution. If peacefully carried out, it
cannot be curtailed even in the absence of
employer-employee relationship.
The right is, however, not an absolute
one. While peaceful picketing is entitled to
protection as an exercise of free speech, we
believe that courts are not without power to
confine or localize the sphere of
communication or the demonstration to the
parties to the labor dispute, including those
with related interest, and to insulate
establishments or persons with no industrial
connection or having interest totally foreign to
the context of the dispute.
Thus, the right may be regulated at the
instance of third parties or 'innocent
bystanders' if it appears that the inevitable
result of its exercise is to create an impression
that a labor dispute with which they have no
connection or interest exists between them
and the picketing union or constitute an
invasion of their rights.
In one case decided by this Court, we
upheld a trial court's injunction prohibiting the
union from blocking the entrance to a feed mill
located within the compound of a flour mill
with which the union had a dispute. Although
sustained on a different ground, no connection
was found other than their being situated in
the same premises. It is to be noted that in the
instances cited, peaceful picketing has not
been totally banned but merely regulated. And
in one American case, a picket by a labor union
in front of a motion picture theater with which
the union had a labor dispute was enjoined by
the court from being extended in front of the
main entrance of the building housing the
theater wherein other stores operated by third
persons were located."
The same case state clearly and succinctly the
rationalization for the court's regulation of the
right to picket in the following wise and manner:
"Wellington and Galang are mere
'innocent bystanders'. They are entitled to
seek protection of their rights from the courts
and the courts may, accordingly, legally extend
the same. Moreover, PAFLU's right to
peacefully picket METBANK is not curtailed by
the injunctions issued by respondent judge.
The picket is merely regulated to protect the
rights of third parties. And the reason for this
is not farfetched. If the law fails to afford said
protection, men will endeavor to safeguard
their rights by their own might, take the law in
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their own hands, and commit acts which lead
to breaches of the law. This should not be
allowed to happen."
We cannot agree that the above rules cited by
the appellants are controlling in the instant case
for as We said in Phil. Association of Free Labor
Unions (PAFLU), et al. vs. Tan, 99 Phil. 854, that
"with regard to activities that may be enjoined, in
order to ascertain what court has jurisdiction to
issue the injunction, it is necessary to determine
the nature of the controversy,"
 We find and hold that there is no
connection between the appellee
Liwayway Publications, Inc. and the
striking Union, nor with the company
against whom the strikers staged the
strike, and neither are the acts of the
driver of the appellee, its general
manager, personnel manager, the man in-
charge of the bodega and other
employees of the appellee in reaching the
bodega to obtain newsprint therefrom to
feed and supply its publishing business
interwoven with the labor dispute
between the striking Union and the
Permanent Concrete Products company. If
there is a connection between appellee
publishing company and the Permanent
Concrete Products company, it is that
both are situated in the same premises,
which can hardly be considered as
interwoven with the labor dispute pending
in the Court of Industrial Relations
between the strikers and their employer.
The contention of appellants that the court
erred in denying their motion to dismiss on the
ground that the complaint states no cause of
action, is likewise without merit.
 Article 1654 of the New Civil Code cited
by the appellants in support of their
motion to dismiss, which obliges the
lessor, among others, to maintain the
lessee in the peaceful and adequate
enjoyment of the lease for the entire
duration of the contract, and therefore,
the appellee publishing company should
have brought its complaint against the
first sublessee, Don Ramon Roces, and
not against the appellant Union, is not in
point. The acts complained of against the
striking union members are properly
called mere acts of trespass (perturbacion
de mero hecho) such that following the
doctrine laid down in Goldstein vs. Roces,
34 Phil. 562, the lessor shall not be
obliged to answer for the mere fact of a
trespass (perturbacion de mero hecho)
made by a third person in the use of the
estate leased but the lessee shall have a
direct action against the trespasser.
The instant case falls squarely under the
provisions of Article 1664of the New Civil Code
which provides as follows:
 "Art. 1664. The lessor is not obliged to
answer for a mere act of trespass which a
third person may cause on the use of the
thing leased; but the lessee shall have a
direct action against the intruder. There is
a mere act of trespass when the third
person claims no right whatever.
Part IX : Concerted Activities
Labor Relations
MSF Tire and Rubber Inc. v. CA (1999) bargaining, or shall aid or abet such obstruction or
Thus, an "innocent bystander," who seeks to interference.
enjoin a labor strike, must satisfy the court that
aside from the grounds specified in Rule 58 of the
Rules of Court, it is entirely different from, without 9.04 ROLE OF PEACE OFFICERS DURING
any connection whatsoever to, either party to the
STRIKES AND PICKETING
dispute and, therefore, its interests are totally
foreign to the context thereof.
In the case at bar, petitioner cannot be said 1. ESCORTING
not to have such connection to the dispute. As
correctly observed by the appellate court: Art. 264 (d)
 Coming now to the case before us, we No public official or employee, including officers
find that the "negotiation, contract of and personnel of the New Armed Forces of the
sale, and the post transaction" between Philippines or the Integrated National Police, or
Philtread, as vendor, and Siam Tyre, as armed person,
vendee, reveals a legal relation between  shall bring in, introduce or escort in any
them which, in the interest of petitioner, manner,
we cannot ignore. To be sure, the  any individual who seeks to replace
transaction between Philtread and Siam strikers in entering or leaving the
Tyre, was not a simple sale whereby premises of a strike area, or work in place
Philtread ceased to have any proprietary of the strikers.
rights over its sold assets. On the The police force shall keep out of the picket lines
contrary, Philtread remains as 20% owner unless actual violence or other criminal acts occur
of private respondent and 60% owner of therein:
Sucat Land Corporation which was  Provided, That nothing herein shall be
likewise incorporated in accordance with interpreted to prevent any public officer
the terms of the Memorandum of from taking any measure necessary to
Agreement with Siam Tyre, and which maintain peace and order, protect life and
now owns the land were subject plant is property, and/or enforce the law and legal
located. This, together with the fact that order.
private respondent uses the same plant or
factory; similar or substantially the same 2. ARREST AND DETENTION OF LAW
working conditions; same machinery, VIOLATORS
tools, and equipment; and manufacture
the same products as Philtread, lead us to Art. 266
safely conclude that private respondent's Requirement for arrest and detention.
personality is so closely linked to Philtread Except on grounds of national security and public
as to bar its entitlement to an injunctive peace or in case of commission of a crime,
writ. Stated differently, given its close  no union members or union organizers
links with Philtread as to bar its may be arrested or detained for union
entitlement to an injunctive writ. Stated activities without previous consultations
differently, given its close links with with the Secretary of Labor.
Philtread, we find no clear and
unmistakable right on the part of private
respondent to entitle it to the writ of
preliminary injunction it prayed for below.
We stress that that in so ruling, we have not
touched on the issue of . . . whether or not private
respondent is a mere dummy or continuation of
Philtread.
 Although, as petitioner contends, the
corporate fiction may be disregarded
where it is used to defeat public
convenience, justify wrong, protect fraud,
defend crime, or where the corporation is
used as a mere alter-ego or business
conduit, it is not these standards but
those of the "innocent bystander" rule
which govern whether or not petitioner is
entitled to an injunctive writ.

6. PROHIBITED ACTIVITIES- PEACEFUL

PICKETING

Art. 264 (b)

No person shall obstruct, impede, or interfere with,
by force, violence, coercion, threats or
intimidation, any peaceful picketing by employees
during any labor controversy or in the exercise of
the right to self-organization or collective

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Part X : Labor Injunction
Labor Relations
Part X : LABOR INJUNCTION
10.01 DEFINITION AND NATURE
INJUNCTION: An injunction is available as a
remedy for harm for which there is no adequate
remedy at law. Thus it is used to prevent a future
harmful action rather than to compensate for an
injury that has already been occurred, or to
provide relief from harm for which an award of
money damages is not a satisfactory solution or
for which a monetary value is impossible to
calculate. A defendant who violates an injunction is
subject to penalty for contempt. (Webster)
Philippine Airlines, Inc. v. NLRC (1998)
GENERALLY, injunction is a preservative
remedy for the protection of one's substantive
rights or interest. It is not a cause of action in
itself but merely a provisional remedy, an adjunct
to a main suit.
It is resorted to only when there is a pressing
necessity to avoid injurious consequences which
cannot be remedied under any standard of
compensation. The application of the injunctive
writ rests upon the existence of an emergency or
of a special reason before the main case be
regularly heard.
The essential conditions for granting such
temporary injunctive relief are:
1) that the complaint alleges facts which
appear to be sufficient to constitute a
proper basis for injunction and
2) that on the entire showing from the
contending parties, the injunction is
reasonably necessary to protect the legal
rights of the plaintiff pending the
litigation.
Injunction is also a special equitable relief
granted only in cases where there is no plain,
adequate and complete remedy at law.
Article 218 of the Labor Code empowers the
NLRC:
e. To enjoin or restrain any actual or
threatened commission of any or all
prohibited or unlawful acts or to require
the performance of a particular act in any
labor dispute which, if not restrained or
performed forthwith, may cause grave or
irreparable damage to any party or render
ineffectual any decision in favor of such
party
Complementing the above-quoted provision,
Sec. 1, Rule XI of the New Rules of Procedure of
the NLRC, pertinently provides as follows:
Section 1. Injunction in Ordinary Labor Dispute.
- A preliminary injunction or a restraining order may
be granted by the Commission through its divisions
pursuant to the provisions of paragraph (e) of Article
218 of the Labor Code, as amended, when it is
established on the bases of the sworn allegations in
the petition that the acts complained of,
a) involving or arising from any labor
dispute before the Commission, which,
b) if not restrained or performed
forthwith, may cause grave or irreparable
damage to any party or render ineffectual
any decision in favor of such party.
The foregoing ancillary power may be
exercised by the Labor Arbiters:
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 ONLY as an INCIDENT to the cases
pending before them in order to preserve
the rights of the parties during the
pendency of the case,
 BUT excluding labor disputes involving
strikes or lockout.
From the foregoing provisions of law, the
power of the NLRC to issue an injunctive writ
originates from "any labor dispute" upon
application by a party thereof, which application if
not granted "may cause grave or irreparable
damage to any party or render ineffectual any
decision in favor of such party."
The term "LABOR DISPUTE" is defined as "any
controversy or matter concerning terms and
conditions of employment or the association or
representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and
conditions of employment regardless of whether or
not the disputants stand in the proximate relation
of employers and employees."
The term "CONTROVERSY” is likewise defined
as "a litigated question; adversary proceeding in a
court of law; a civil action or suit, either at law or
in equity; a justiciable dispute."
A "justiciable controversy" is "one involving an
active antagonistic assertion of a legal right on one
side and a denial thereof on the other concerning a
real, and not a mere theoretical question or issue."
Taking into account the foregoing definitions,
it is an ESSENTIAL REQUIREMENT that: there must
first be a LABOR DISPUTE between the contending
parties before the labor arbiter.
Why does injunction not apply to the facts of
this case?
In the present case, there is no labor dispute
between the petitioner and private respondents as
there has yet been no complaint for illegal
dismissal filed with the labor arbiter by the private
respondents against the petitioner.
Furthermore, an examination of private
respondents' petition for injunction reveals that it
has no basis since there is no showing of any
urgency or irreparable injury which the private
respondents might suffer.
When is an injury considered irreparable?
An injury is considered irreparable if it is of
such constant and frequent recurrence that no fair
and reasonable redress can be had therefor in a
court of law, or where there is no standard by
which their amount can be measured with
reasonable accuracy, that is, it is not susceptible of
mathematical computation.
It is considered irreparable injury when it
cannot be adequately compensated in damages
due to the nature of the injury itself or the nature
of the right or property injured or when there
exists no certain pecuniary standard for the
measurement of damages.
In the case at bar, the alleged injury which private
respondents stand to suffer by reason of their
alleged illegal dismissal can be adequately
compensated and therefore, there exists no
"irreparable injury," as defined above which would
necessitate the issuance of the injunction sought
for.
 Article 279 of the Labor Code provides
that an employee who is unjustly
dismissed from employment shall be
Part X : Labor Injunction
Labor Relations
entitled to reinstatement, without loss of continued unless restrained but
seniority rights and other privileges, and no injunction or temporary
to the payment of full backwages, restraining order shall be issued
inclusive of allowances, and to other on account of any threat,
benefits or their monetary equivalent prohibited or unlawful act,
computed from the time his compensation except against the person or
was withheld from him up to the time of persons, association or
his actual reinstatement. organization making the threat
or committing the prohibited or
POLICY BEHIND PROHIBITION OF ISSUANCE unlawful act or actually
OF INJUNCTION: authorizing or ratifying the same
It has been the policy of the State to after actual knowledge thereof;
encourage the parties to use the non-judicial
process of negotiation and compromise, mediation 2) That substantial and irreparable
and arbitration. injury to complainants property
 Thus, injunctions may be issued only in cases will follow;
of extreme necessity based on legal grounds
clearly established, after due consultations or 3) That as to each item of relief to
hearing and when all efforts at conciliation are be granted, greater injury will
exhausted which factors, however, are clearly be inflicted upon complainant by
absent in the present case. the denial of relief than will be
inflicted upon defendants by the
granting of relief;
10.02 GENERAL RULE –PROHIBITION
4) That complainant has no
adequate remedy at law; and"
Art. 254
No temporary or permanent injunction or (5) That the public officers charged
restraining order in any case involving or growing with the duty to protect
out of labor disputes shall be issued by any court complainants property are
or other entity, except as otherwise provided in unable or unwilling to furnish
Articles 218 and 264 of this code. adequate protection.
Art. 212 (l) "Such hearing shall be held after
‘LABOR DISPUTE’ includes any controversy or due and personal notice thereof
matters: has been served, in such
 concerning terms or conditions of manner as the Commission shall
employment or the association or direct, to all known persons
 representation of persons in negotiating, against whom relief is sought,
fixing, maintaining, changing or and also to the Chief Executive
arranging the terms and conditions of and other public officials of the
employment, province or city within which the
 regardless of whether the disputants unlawful have been threatened
stand in the proximate relation of or committed charged with the
employer and employee. duty to protect complainant's
property:

Provided, however,
ART. 218
Powers of the Commission. — The Commission
shall have the power and authority:
(e) To enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful
acts or to require the performance of a particular
act in any labor dispute
 which, if not restrained or performed
forthwith, may cause grave or irreparable
damage to any party or render ineffectual
any decision in favor of such party:
 Provided, That no temporary or
permanent injunction in any case
involving or growing out of a labor dispute
as defined in this Code shall be issued
except after hearing the testimony of witnesses,
with opportunity for cross-examination, in support
of the allegations of a complaint made under oath,
and testimony in opposition thereto, if offered, and
only after a finding of fact by the commission, to
the effect:
(1) That prohibited or unlawful acts
have been threatened and will
be committed and will be
a) the complainant "shall also allege that,
unless a temporary restraining order shall be
issued without notice,
a SUBSTANTIAL and
IRREPARABLE INJURY to
complainant's PROPERTY
will be unavoidable;"
b) there is "TESTIMONY under OATH,
sufficient, if sustained, to justify the
Commission in issuing a temporary injunction
upon hearing after notice;"
c) the "temporary restraining order shall be
effective for no longer than twenty (20) days
and shall become void at the expiration of said
twenty (20) days."
d) No such temporary restraining order or
temporary injunction shall be issued except

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Part X : Labor Injunction
Labor Relations
on condition that "complainant shall first file
an undertaking with adequate security in an
amount to be fixed by the Commission
sufficient to recompense those enjoined for
any loss, expense or damage caused by the
improvident or erroneous issuance of such
order or injunction, including all reasonable
costs, together with a reasonable attorney's
fee, and expense of defense against the order
or against the granting of any injunctive relief
sought in the same proceeding and
subsequently denied by the Commission;"
The UNDERTAKING herein mentioned shall be
understood to constitute an agreement into by the
complainant and the surety upon which an order
may be rendered in the same suit or proceeding
against said complainant and surety upon a
hearing to assess damages, of which hearing
complainant and surety shall have reasonable
notice, the said complainant and surety submitting
themselves to the jurisdiction of the Commission
for that purpose.
But nothing herein contained shall deprive any
party having a claim or cause of action under or
upon such undertaking from electing to pursue his
ordinary remedy by suit at law or in equity:
Provided, further, That the reception of evidence
for the application of a writ of injunction may be
delegated by the Commission to any of its Labor
Arbiters who shall conduct such hearings in such
places as he may determine to be accessible to the
parties and their witnesses and shall submit
thereafter his recommendation to the Commission.
Caltex Filipino Managers and Supervisors
Assoc. v. CIR (72)
RATIONALE for prohibition:
1) It is well known that the scheme in
Republic Act No. 875 for achieving
industrial peace rests essentially on a
FREE AND PRIVATE AGREEMENT between
the employer and his employees as to the
terms and conditions under which the
employer is to give work and the
employees are to furnish labor,
unhampered as far as possible by judicial
or administrative intervention. On this
premise the lawmaking body has virtually
prohibited the issuance of injunctive relief
involving or growing out of labor disputes.
2) The prohibition to issue labor injunctions
is designed to give labor a comparable
bargaining power with capital and must
be liberally construed to that end.
GENERAL RULE: there can be no injunction
issued against any strike.
EXCEPT in only one instance, that is, when a
labor dispute arises in an INDUSTRY
INDISPENSABLE TO THE NATIONAL INTEREST and
such dispute is CERTIFIED BY THE PRESIDENT of
the Philippines to the Court of Industrial Relations
in compliance with Sec. 10 of Republic Act No.
875.
Purpose of an injunction in an UNCERTIFIED case:
As a corollary to this, an injunction in an
uncertified case must be based on the strict
requirements of Sec. 9(d) of Republic Act No. 875;
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the purpose of such an injunction is not to enjoin
the strike itself, but only unlawful activities.
In this case Judge Tabigne cautioned the
parties to “maintain the status quo”; he specifically
advised the employees NOT TO GO ON strike.
Will disobedience to the judge’s advice
constitute contempt of court? No. According to SC
what Judge Tabigne stated during said hearing
should be construed what actually it was — an
advice. To say that it was an order would be to
concede that respondent court could validly enjoin
a strike, especially one which is not certified in
accordance with Sec. 10 of Republic Act No. 875.
To adopt the view of respondent court would not
only set at naught the policy of the law as
embodied in the said statute against issuance of
injunctions, but also remove from the hands of
labor unions and aggrieved employees an effective
lawful weapon to either secure favorable action on
their economic demands or to stop unfair labor
practices on the part of their employer.
National Mines and Allied Workers v. Vera
(1984)
An injunction is a proper remedy to prevent a
sheriff from selling the property of one person for
the purpose of paying the debts of another."
Petitioners' reliance on the provision of Art. 254 of
the New Labor Code which prohibits injunctions or
restraining orders in any case involving or growing
out of a 'labor dispute' is not well-taken.
 This has no application to the case at bar.
Civil Case No. 2749 is one which neither
"involves" nor "grows out" of a labor
dispute. What 'involves' or 'grow out' of a
labor dispute is the NLRC case between
petitioners and the judgment debtor,
Philippine Iron Mines.
 The private respondents are not parties to
the said NLRC case. Civil Case. No. 2749
does not put in issue either the fact or
validity of the proceeding in the NLRC
case nor the decision therein rendered,
much less the writ of execution issued
thereunder. It does not seek to enjoin the
execution of the decision against the
properties of the judgment debtor. What
is sought to be tried in Civil Case No.
2749 is whether the NLRC's decision and
writ of execution, above-mentioned, shall
be permitted to be satisfied against
properties of private respondents, and not
of the judgment debtor named in the
NLRC decision and writ of execution. Such
a recourse is allowed under the provisions
of Section 17, Rule 39 of the Rules of
Court.
To sustain petitioners' theory will inevitably
lead to disastrous consequences and lend judicial
imprimatur to deprivation of property without due
process of law.
Simply because a writ of execution was issued
by the NLRC does not authorize the sheriff
implementing the same to levy on anybody's
property. To deny the victim of the wrongful levy,
the recourse such as that availed of by the herein
private respondents, under the pretext that no
court of general jurisdiction can interfere with the
writ of execution issued in a labor dispute, will
be sanctioning a greater evil than that sought to
be avoided by the Labor Code provision in
Part X : Labor Injunction
Labor Relations
question. Certainly, that could not have been the
intendment of the law creating the NLRC. For
wellsettled is the rule that the power of a court to
execute its judgment extends only over properties
unquestionably belonging to the judgment debtor.
Ravago v. Eastern Marine Ltd (2005)
Facts: Petitioner is a seafarer who was hired
on a contractual basis. Shortly after the
termination of his latest contract, he was granted a
vacation leave. During that time, he was hit by a
stray bullet on his left leg which caused permanent
injury. Eastern Marine refused to re-hire him.
Petitioner filed a case for illegal dismissal.
The Labor Arbiter found that Petitioner was
not illegally dismissed. NLRC reversed. On appeal,
CA issued a preliminary injunction.
The petitioner asserts that the CA violated
Article 254 of the Labor Code when it issued a
temporary restraining order, and thereafter a writ
of preliminary injunction, to derail the enforcement
of the final and executory judgment of the Labor
Arbiter as affirmed by the NLRC. On the other
hand, the respondents contend that the issue has
become academic since the CA had already
decided the case on its merits.
Held: The petitioner’s reliance on Article 25 [of
the Labor Code is misplaced. The law proscribes
the issuance of injunctive relief only in those cases
involving or growing out of a labor dispute.
 The case before the NLRC neither involves
nor grows out of a labor dispute. It did
not involve the fixing of terms or
conditions of employment or
representation of persons with respect
thereto.
 In fact, the petitioner’s complaint revolves
around the issue of his alleged dismissal
from service and his claim for backwages,
damages and attorney’s fees. Moreover,
Article 254 of the Labor Code specifically
provides that the NLRC may grant
injunctive relief under Article 218 thereof.
Besides, the anti-injunction policy of the Labor
Code, basically, is freedom at the workplace. It is
more appropriate in the promotion of the primacy
of free collective bargaining and negotiations,
including voluntary arbitration, mediation and
conciliation, as modes of settling labor and
industrial disputes.
Generally, an injunction is a preservative
remedy for the protection of a person’s substantive
rights or interests. It is not a cause of action in
itself but a mere provisional remedy, an
appendage to the main suit. Pressing necessity
requires that it should be resorted to only to avoid
injurious consequences which cannot be remedied
under any measure of consideration. The
application of an injunctive writ rests upon the
presence of an exigency or of an exceptional
reason before the main case can be regularly
heard.
The indispensable conditions for granting such
temporary injunctive relief are:
(a) that the complaint alleges facts which
appear to be satisfactory to establish a proper
basis for injunction, and
(b) that on the entire showing from the
contending parties, the injunction is
reasonably necessary to protect the legal
rights of the plaintiff pending the litigation.
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It bears stressing that in the present case, the
respondents’ petition contains facts sufficient to
warrant the issuance of an injunction under Article
218, paragraph (e) of the Labor Code of the
Philippines. Further, respondents had already
posted a surety bond more than adequate to cover
the judgment award.
10.03 EXCEPTIONS – WHEN INJUCTION
ALLOWED
See Arts. 254, 218(e); 264
Ilaw at Buklod ng Manggagawa v. NLRC
(1991)
HELD: Also untenable is the Union's other
argument that the respondent NLRC Division had
no jurisdiction to issue the temporary restraining
order or otherwise grant the preliminary injunction
prayed for by SMC and that, even assuming the
contrary, the restraining order had been
improperly issued. The Court finds that the
respondent Commission had acted entirely in
accord with applicable provisions of the Labor
Code.
GENERAL RULE:
Article 254 of the Code provides that:
"No temporary or permanent
injunction or restraining order in
any case involving or growing out
of labor disputes shall be issued
by any court or other entity,
except as otherwise provided in
Articles 218 and 264 . . .
EXCEPTIONS:
Article 264 lists down specific "prohibited
activities" which may be forbidden or stopped
by a restraining order or injunction.
Article 218 inter alia enumerates the powers of
the National Labor Relations Commission and lays
down the conditions under which a restraining
order or preliminary injunction may issue, and the
procedure to be followed in issuing the same.
Among the powers expressly conferred on the
Commission by Article 218 is the power to "enjoin
or restrain any actual or threatened commission of
any or all prohibited or unlawful acts or to require
the performance of a particular act in any labor
dispute which,:
 if not restrained or performed forthwith,
may cause grave or irreparable damage to
any party or render ineffectual any
decision in favor of such party . . . ."
10.04 ISSUING AGENCY
1. NATIONAL LABOR RELATIONS
COMMISSION AND ROLE OF THE LABOR
ARBITER
See Art. 218 (e) Above
ROLE OF THE LABOR ARBITER ( Book V Rule XXI
sec. 13)—
…The reception of evidence for the application of
the writ of injunction may be delegated by the
Commission to any Labor Arbiter who shall
submit his recommendations to the
Part X : Labor Injunction
Labor Relations
Commissions for its consideration and resolution.
Nestle Phils. Inc. V. NLRC (1991)
The power of the NLRC to issue writs of
injunction is found in Article 218 of the Labor
Code, which provides:
 The Commission shall have the power and
authority: (e) To enjoin or restrain any
actual or threatened commission of any or
all prohibited or unlawful acts or to
require the performance of a particular
act in any labor dispute which, if not
restrained or performed forthwith, may
cause grave or irreparable damage to any
party or render ineffectual any decision in
favor of such party: . . ."
MAIN POINT OF THE CASE: That power, as the
statute provides, can only be exercised in a LABOR
DISPUTE.
Paragraph (1) of Article 212 of the Labor Code
defines a labor dispute as follows:
"(1) ‘LABOR DISPUTE’ includes any
controversy or matters:
- concerning terms or conditions of
employment or the association or
- representation of persons in
negotiating, fixing, maintaining,
changing or arranging the terms and
conditions of employment,
- regardless of whether the disputants
stand in the proximate relation of
employer and employee."
Nestlés demand for payment of the private
respondents' amortizations on their car loans, or,
in the alternative, the return of the cars to the
company, is not a labor, but a civil, dispute. It
involves debtor-creditor relations, rather than
employee-employer relations.
As noted, the options given to the private
respondents are civil in nature arising from
contractual obligations. There is no labor aspect
involved in the enforcement of those obligations.
The NLRC gravely abused its discretion and
exceeded its jurisdiction by issuing the writ of
injunction to stop the company from enforcing the
civil obligation of the private respondents under
the car loan agreements and from protecting its
interest in the cars which, by the terms of those
agreements, belong to it (the company) until their
purchase price shall have been fully paid by the
employee. The terms of the car loan agreements
are not in issue in the labor case. The rights and
obligations of the parties under those contracts
may be enforced by a separate civil action in the
regular courts, not in the NLRC.
Ilaw at Buklod ng Manggagawa (IBM) v.
NLRC (1991)
GENERAL RULE: Cannot issue EX PARTE
As a rule such restraining orders or injunctions
do not issue ex parte, but only after compliance
with the following requisites, to wit:
a. a HEARING held "after due and
PERSONAL NOTICE thereof has been
served, in such manner as the
Commission shall direct, to all known
persons against whom relief is sought,
and also to the Chief Executive and other
public officials of the province or city
within which the unlawful acts have been
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threatened or committed charged with the
duty to protect complainant's property
b. reception at the hearing of "testimony of
witnesses, with opportunity for cross-
examination, in support of the allegations
of a complaint made under oath," as well
as "testimony in opposition thereto, if
offered . . .;
c. "a finding of fact by the Commission, to
the effect:
1) That prohibited or unlawful acts
have been threatened and will be
committed and will be continued
unless restrained,
 but no injunction or
temporary restraining order
shall be issued on account of
any threat, prohibited or
unlawful act,
 except against the person or
persons, association or
organization making the
threat or committing the
prohibited or unlawful act or
actually authorizing or
ratifying the same after actual
knowledge thereof;
2) That substantial and irreparable
injury to complainant's property
will follow;
3) That as to each item of relief to be
granted, greater injury will be
inflicted upon complainant by the
denial of relief than will be indicted
upon defendants by the granting
of relief;
4) That complainant has no adequate
remedy at law; and
5) That the public officers charged
with the duty to protect
complainant's property are unable
or unwilling to furnish adequate
protection."
EXCEPTION: When it can issue ex parte.
However, a temporary restraining order may
be issued ex parte under the following conditions:
a. the complainant "shall also allege that,
unless a temporary restraining order shall
be issued without notice,
 a SUBSTANTIAL and IRREPARABLE
INJURY to complainant's PROPERTY
will be unavoidable;"
b. there is "TESTIMONY under OATH,
sufficient, if sustained, to justify the
Commission in issuing a temporary
injunction upon hearing after notice;"
c. the "complainant shall first file an
undertaking with adequate security in an
amount to be fixed by the Commission
sufficient to recompense those enjoined
for any loss, expense or damage caused
by the improvident or erroneous issuance
of such order or injunction, including all
reasonable costs, together with a
reasonable attorney's fee, and expense of
defense against the order or against
the granting of any injunctive relief
sought in the same proceeding and
Part X : Labor Injunction
Labor Relations
subsequently denied by the Commission;"
and
d. the "temporary restraining order shall be
effective for no longer than twenty (20)
days and shall become void at the
expiration of said twenty (20) days."
 The reception of evidence "for the
application of a writ of injunction may
be delegated by the Commission to
any of its Labor Arbiters who shall
conduct such hearings in such places
as he may determine to be accessible
to the parties and their witnesses and
shall submit thereafter his
recommendation to the Commission."
The record reveals that the Commission
exercised the power directly and plainly granted to
it by sub-paragraph (e) Article 217 in relation to
Article 254 of the Code, and that it faithfully
observed the procedure and complied with the
conditions for the exercise of that power
prescribed in said sub-paragraph (e).
It acted on SMC's application for immediate
issuance of a temporary restraining order ex parte
on the ground that substantial and irreparable
injury to its property would transpire before the
matter could be heard, on notice; it, however, first
direct SMC Labor Arbiter Carmen Talusan to
receive SMC's testimonial evidence in support of
the application and thereafter submit her
recommendation thereon; it found SMC's evidence
adequate and issued the temporary restraining
order upon bond. No irregularity may thus be
imputed to the respondent Commission in the
issuance of that order.
In any event, the temporary restraining order
had a lifetime of only twenty (20) days and
became void ipso facto at the expiration of that
period.
In view of the foregoing factual and legal
considerations, all irresistibly leading to the basic
conclusion that the concerted acts of the members
of petitioner Union in question are violative of the
law and their formal agreement with the employer,
the latter's submittal, in its counter-petition that
there was, in the premises, a "legal duty and
obligation" on the part of the respondent
Commission "to enjoin the unlawful and prohibited
acts and omissions of petitioner IBM and the
workers complained of" 20 — a proposition with
which, it must be said, the Office of the Solicitor
General concurs, asserting that the "failure of the
respondent commission to resolve the application
for a writ of injunction is an abuse of discretion
especially in the light of the fact that the
restraining order it earlier issued had already
expired" — must perforce be conceded.
2. PROCEDURAL REQUIREMENTS AND RULES
FOR THE ISSUANCE OF LABOR
INJUNCTIONS
Bisig ng Manggagawa, etc. v. NLRC (1993)
Strike has been considered the most effective
weapon of labor in protecting the rights of
employees to improve the terms and conditions of
their employment. It may be that in highly
developed countries, the significance of strike as a
coercive weapon has shrunk in view of the
preference for more peaceful modes of settling
labor disputes.
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In the Philippine milieu where social justice
remains more as a rhetoric than a reality, labor
has vigilantly fought to safeguard the sanctity of
the right to strike. Its struggle to gain the right to
strike has not been easy and effortless.
Hence, on June 17, 1953, Congress gave
statutory recognition to the right to strike when it
enacted RA 875, otherwise known as the Industrial
Peace Act.
For the first time in our constitutional history,
the fundamental law of our land (1987
Constitution) mandated the State to ".. 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." This constitutional
imprimatur given to the right to strike constitutes
signal victory for labor. Our Constitutions of 1935
and 1973 did not accord constitutional status to
the right to strike
RA 6715 came into being on March 21, 1989,
an intentional replication of RA 875. In light of
the genesis of the right to strike, it ought to be
obvious that the right should be read with a
libertarian latitude in favor of labor. In the wise
words of Father Bernas, S.J.. . the constitutional
recognition of the right to strike does serve as a
reminder that injunctions, should be reduced to
the barest minimum".
In the case at bar, the records will show that
the respondent NLRC failed to comply with the
letter and spirit of Article 218 (e), (4) and (5) of
the Labor Code in issuing its Order of May 5, 1992.
 Article 218 (e) of the Labor Code provides
both the procedural and substantive
requirements which must strictly be
complied with before a temporary or
permanent injunction can issue in a labor
dispute
 "Verily, the factual circumstances proven
by the evidence show that there was no
concurrence of the five (5) prerequisites
mandated by Art. 218(e) of the Labor
Code. Thus there is no justification for the
issuance of the questioned Order of
preliminary injunction."
Moreover, the records reveal the continuing
misuse of unfair strategies to secure ex parte
temporary restraining orders against striking
employees.
(a) Petitioner union did not receive any
copy of private respondent's petition
for injunction in Case No. 000249-92
filed on April 8, 1992. Its address as
alleged by the private respondent
turned out to be "erroneous".
(b) Consequently, the petitioner was
denied the right to attend the hearing
held on April 13, 1992 while the
private respondent enjoyed a field
day presenting its evidence ex parte.
(c) On the basis of uncontested evidence,
the public respondent, on the same
day April 13, 1992, temporarily
enjoined the petitioner from
committing certain alleged illegal
acts. Again, a copy of the Order was
sent to the wrong address of the
petitioner. (d) Knowledge
of the Order came to the petitioner
Part X : Labor Injunction
Labor Relations
only when its striking members read
it after it was posted at the struck
areas of the private respondent.
To be sure, the issuance of an ex parte
temporary restraining order in a labor dispute is
not per se prohibited. Its issuance, however,
should be characterized by care and caution for
the law requires that it be clearly justified by
considerations of EXTREME NECESSITY, i.e., when
the commission of unlawful acts is causing
substantial and irreparable injury to company
properties and the company is, for the moment,
bereft of an adequate remedy at law.
This is as it ought to be, for imprudently
issued temporary restraining orders can break the
back of employees engaged in a legal strike.
 Often times, they unduly tilt the balance
of a labor warfare in favor of capital.
When that happens, the deleterious
effects of a wrongfully issued, ex parte
temporary restraining order on the rights
of striking employees can no longer be
repaired for they defy simple
monetization. Moreover, experience
shows that ex parte applications for
restraining orders are often based on
fabricated facts and concealed truths. A
more becoming sense of fairness,
therefore, demands that such ex parte
applications should be more minutely
examined by hearing officers, lest, our
constitutional policy of protecting labor
becomes nothing but a synthetic
shibboleth.
The immediate need to hear and resolve these
ex parte applications does not provide any excuse
to lower our vigilance in protecting labor against
the issuance of indiscriminate injunctions. Stated
otherwise, it behooves hearing officers receiving
evidence in support of ex parte injunctions against
employees in strike to take a more active stance in
seeing to it that their right to social justice is in no
way violated despite their absence. This equalizing
stance was not taken in the case at bar by the
public respondents.
Nor do we find baseless the allegation by
petitioner that the public respondents have
neglected to resolve with reasonable dispatch its
own Petition for Injunction with prayer for a
temporary restraining order dated April 25, 1992.
The petition invoked Article 264 (d) of the
Labor Code to enjoin the private respondent from
using the military and police authorities to escort
scabs at the struck establishment. Sadly
contrasting is the haste with which public
respondents heard and acted on a similar petition
for injunction filed by the private respondent. In
the case of the private respondent, its prayer for
an ex parte temporary restraining order was heard
on April 13, 1992 and it was granted on the same
day. Its petition for preliminary injunction was filed
on April 30, 1992, and was granted on May 5,
1992.
In the case of petitioner, its petition for
injunction was filed on April 24, 1992, and to date,
the records do not reveal whether the public
respondent has granted or denied the same. The
disparate treatment is inexplicable considering that
the subject matters of their petition are of similar
importance to the parties and to the public.
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3. INJUNCTION AND MED-ARBITER
Dinio v. Laguesma (1997)
In the performance of his duties, the public
respondent should not be shackled by stringent
rules, if to do so would result in manifest injustice.
Thus, he cannot, and correctly did not, turn a blind
eye to the arbitrary and haphazard manner by
which the Med-Arbiter issued the subject
temporary restraining order, even though this
issue was not explicitly raised by private
respondents.
There is no question that the issuance of a
temporary restraining order is addressed to the
sound discretion of the Med-Arbiter.
 However, "this discretion should be
exercised based upon the grounds and in
the manner provided by law."
In the case of labor injunctions or temporary
restraining orders, one may issue only in instances
where the complainant or applicant will suffer
grave or irreparable damages as provided in Sec.
5, Rule XVI, Book V of the Omnibus Rules
Implementing the Labor Code:
Sec 5. Injunctions. — No temporary
injunctions or restraining order in any case
involving or growing out of a labor dispute shall
be issued by any court or other entity. On the
other hand, the Office of the President, the
Secretary of Labor, the Commission, the Labor
Arbiter or med-arbiter may enjoin any or all
acts involving or arising from any case pending
before any of said offices or officials which if
not restrained forthwith may cause grave or
irreparable damage to any of the parties to the
case or seriously affect social or economic
stability.
In the instant controversy, the first petition for
injunction and temporary restraining order filed by
petitioners on 29 January 1992 was manifestly
insufficient to show grave or irreparable injury and
it puzzles us to no end how the Med-Arbiter could
have issued the temporary restraining order on
such flimsy basis. For instance, petitioners alleged
that the PCIBEU-Comelec was illegally constituted,
yet, they unhesitatingly participated in the pre-
election process. They announced their candidates
and actively campaigned for them. In the petition
for injunction itself, petitioners even stated that
they filed their certificates of candidacy in
compliance with the directives of the PCIBEU-
Comelec. How can petitioners obey the orders of
the PCIBEU-Comelec and at the same time reject
its authority? This should have put the Med-Arbiter
on guard.
While it is true that the Med-Arbiter has the
authority to issue a writ of preliminary injunction,
or a temporary restraining order against any act
arising from any case pending before him, the
exercise thereof shall always be subject to the test
of reasonableness.
The Med-Arbiter should ascertain that the act
complained of, if not restrained forthwith, may
cause grave or irreparable damage to any of the
parties to the case.
Damage is considered "irreparable":
a) if it is of such constant and frequent
recurrence that no fair or reasonable
redress can be had therefor in a court of
law (Allendorf vs. Abalanson, 38 Phil.
585), or
b) where there is no standard by which
their amount can be measured with
Part X : Labor Injunction
Labor Relations
reasonable accuracy, that is, it is not -- which, if not restrained or
susceptible of mathematical computation performed forthwith, may cause
(SSC vs. Bayona, et al., L-13555, May 30, grave or irreparable damage to
1962). any party or render ineffectual
Measured against such test, the act any decision in favor of such
complained of in the present case such as the party:
conduct of the election as originally set on 31
January 1992 may not be said to cause "grave or II. PROCEDURE for issuance of
irreparable" damage to the petitioner-appellee injunction (also the same for
considering that any complaint or question on the allegations under Art. 264)
conduct of the election maybe the subject of
protest, an administrative remedy available and -- Provided, That no temporary or
convenient to the parties in the case. permanent injunction in any case
On the contrary, considering that the petition involving or growing out of a
for issuance of a writ of injunction was filed barely labor dispute as defined in this
two days before the date set for the conduct of the Code shall be issued
election, when the election materials were already
readied and the other mechanics for election had A. except after hearing the
already been threshed out, to say the least, the testimony of witnesses,
damage that would result would substantially be B. with opportunity for cross-
more, should the election be postponed to another examination, in support of the
indefinite time. allegations of a complaint
It is well to remember that "injunctions or made under oath,
restraining orders are frowned upon as a matter of C. and testimony in opposition
labor relations policy," and as a general reminder: thereto, if offered, and
There is no power the exercise of which is D. only after a finding of fact by
more delicate which requires greater caution, the commission, to the effect:
deliberation, and sound discretion, or (which is)
more dangerous in a doubtful case than the (1) That prohibited or unlawful
issuing of an injunction; it is the strong arm of acts have been threatened
equity that never ought to be extended unless to and will be committed and
cases of great injury, where courts of law cannot will be continued unless
afford an adequate or commensurate remedy in restrained but no injunction
damages. The right must be clear, the injury or temporary restraining
impending or threatened, so as to be averted only order shall be issued on
by the protecting preventive process of injunction. account of any threat,
prohibited or unlawful act,
DISINI: except against the person or
persons, association or
1. Labor Injunction is not the same as the organization making the
injunction under the rules of court. threat or committing the
2. General rule is stated in Art. 254 prohibited or unlawful act or
- The exceptions are in Art. 218 and Art. 264 actually authorizing or
- If you are filing injunction under Art. 218, ratifying the same after
the allegations of the acts committed are actual knowledge thereof;
different from the allegations of acts
committed under Art. 264. BUT the procedure "(2) That substantial and
to follow is the same, Art. 218. irreparable injury to
3. Procedure for issuance of TRO is different from complainants property will
procedure of issuance of Injunction. follow;
- The similarity is in the testimony given.
- But TRO is different because it is valid only "(3) That as to each item of relief
for 20 days. to be granted, greater injury
4. It is important to take note of the BOND filed will be inflicted upon
and what other remedies there are just in complainant by the denial of
case the injunction or TRO is wrongfully relief than will be inflicted
issued. upon defendants by the
granting of relief;
ART. 218
Powers of the Commission. — The Commission "(4) That complainant has no
shall have the power and authority: adequate remedy at law;
and"
I. ALLEGATIONS FOR ART. 218 TO APPLY
(5) That the public officers
(e) To enjoin or restrain any actual charged with the duty to
or threatened commission of any protect complainants
or all prohibited or unlawful acts property are unable or
or to require the performance of unwilling to furnish adequate
a particular act in any labor protection.
dispute

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Part X : Labor Injunction
Labor Relations
E. PERSONAL NOTICE To whom
: "Such hearing shall be held
after due and personal
notice thereof has been
served, in such manner as
the Commission shall direct,
- to all known persons
against whom relief is
sought,
- and also to the Chief
Executive and
- other public officials of the
province or city within which
the unlawful have been
threatened or committed
charged with the duty to
protect complainant's
property:
III. PROCEDURE for issuance of
Temporary Restraining Order
 Provided, however,
a) the complainant "shall also allege that, unless
a temporary restraining order shall be issued
without notice,
- a SUBSTANTIAL and IRREPARABLE INJURY
to complainant's PROPERTY will be
unavoidable;"
shall have reasonable notice, the said
complainant and surety submitting
themselves to the jurisdiction of the
Commission for that purpose.
V. Other Remedies
But nothing herein contained shall
deprive any party having a claim or
cause of action under or upon such
undertaking from electing to pursue his
ordinary remedy by suit at law or in
equity:
VI. Role of the Labor Arbiter
Provided, further, that the
(1) reception of evidence for the application of
a writ of injunction may be delegated by the
Commission to any of its Labor Arbiters who
shall conduct such hearings in such places as
he may determine to be accessible to the
parties and their witnesses and shall
(2) submit thereafter his recommendation to
the Commission.

b) there is "TESTIMONY under OATH, sufficient, if

sustained, to justify the Commission in issuing
a temporary injunction upon hearing after
notice;"

c) the "temporary restraining order shall be

effective for no longer than twenty (20) days
and shall become void at the expiration of said
twenty (20) days."

d) No such temporary restraining order or

temporary injunction shall be issued except on
condition that
- "complainant shall first file an undertaking
with adequate security in an amount to be
fixed by the Commission sufficient to
recompense those enjoined for any loss,
expense or damage caused by the improvident
or erroneous issuance of such order or
injunction, including all reasonable costs,
together with a reasonable attorney's fee, and
expense of defense against the order or
against the granting of any injunctive relief
sought in the same proceeding and
subsequently denied by the Commission;"

IV. The UNDERTAKING WITH

ADEQUATE SECURITY (bond)

A. The UNDERTAKING herein mentioned

shall be understood to constitute an
agreement into by the complainant and
the surety upon which an order may be
rendered in the same suit or proceeding
against said complainant and surety
upon a hearing to assess damages, of
which hearing complainant and surety

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Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
Part XI : ALTERNATIVES TO USE
OF ECONOMIC FORCE:
CONCILIATION AND ARBITRATION
AS MODES OF LABOR DISPUTE
SETTLEMENT
1. CONCILIATION
11.01 POLICY
Art. 211.
Declaration of Policy.
(e)To provide an adequate administrative
machinery for the expeditious settlement of labor
or industrial disputes;
1987 Constitution. Art. XIII, Sec. 3
x x x 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.
11.02 CONCILIATION – AS PART OF
COLLECTIVE BARGAINING PROCESS
Art. 250
Procedure in collective bargaining.
c. If the dispute is not settled, the Board shall
intervene upon request of either or both
parties or at its own initiative and immediately
call the parties to conciliation meetings. The
Board shall have the power to issue
subpoenas requiring the attendance of the
parties to such meetings. It shall be the duty
of the parties to participate fully and promptly
in the conciliation meetings the Board may
call;
d. During the conciliation proceedings in the
Board, the parties are prohibited from doing
any act which may disrupt or impede the early
settlement of the disputes; and
e. The Board shall exert all efforts to settle
disputes amicably and encourage the parties
to submit their case to a voluntary arbitrator.
Art. 233
Privileged communication. Information and
statements made at conciliation proceedings shall
be treated as privileged communication and shall
not be used as evidence in the Commission.
Conciliators and similar officials shall not testify in
any court or body regarding any matters taken up
at conciliation proceedings conducted by them.
11.03 CONCILIATION AGENCY – disputes to an arbitrator or to submit an ongoing
NATIONAL CONCILIATION AND
MEDIATION BOARD
Read: CONCILIATORS HANDBOOK, NCMB, DOLE
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2. ARBITRATION
11.04 IN GENERAL
Chung Fu Industries v. CA (1992)
As early as the 1920's, this Court declared: "In
the Philippines fortunately, the attitude of the
courts toward arbitration agreements is slowly
crystallizing into definite and workable form ... The
rule now is that unless the agreement is such as
absolutely to close the doors of the courts against
the parties, which agreement would be void, the
courts will look with favor upon such amicable
arrangements and will only with great reluctance
interfere to anticipate or nullify the action of the
arbitrator.”
That there was a growing need for a law
regulating arbitration in general was acknowledged
when Republic Act No. 876 (1953), otherwise
known as the Arbitration Law, was passed. "Said
Act was obviously adopted to supplement-not to
supplant-the New Civil Code on arbitration. It
expressly declares that' the provisions of chapters
one and two, Title XIV, Book IV of the Civil Code
shall remain in force."
In recognition of the pressing need for an
arbitral machinery for the early and expeditious
settlement of disputes in the construction industry,
a Construction Industry Arbitration Commission
(CIAC) was created by Executive Order No. 1008,
enacted on February 4, 1985.
In practice nowadays, absent an agreement of
the parties to resolve their disputes via a particular
mode, it is the regular courts that remain to
resolve such matters. However, the parties may
opt for recourse to third parties, exercising their
basic freedom to "establish such stipulations,
clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law,
morals, good customs, public order or public
policy." In such a case, resort to the arbitration
process may be spelled out by them in a contract
in anticipation of disputes that may arise between
them. Or this may be stipulated in a submission
agreement when they are actually confronted by a
dispute. Whatever be the case, such recourse to an
extrajudicial means of settlement is not intended
to completely deprive the courts of jurisdiction. In
fact, the early cases on arbitration carefully spelled
out the prevailing doctrine at the time, thus: ". . .
a clause in a contract providing that all matters in
dispute between the parties shall be referred to
arbitrators and to them alone is contrary to public
policy and cannot oust the courts of jurisdiction."
But certainly, the stipulation to refer all future
dispute to one is valid. Being part of a contract
between the parties, it is binding and enforceable
in court in case one of them neglects, fails or
refuses to arbitrate. Going a step further, in the
event that they declare their intention to refer their
differences to arbitration first before taking
court action, this constitutes a condition
precedent, such that where a suit has been
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
instituted prematurely, the court shall suspend the
same and the parties shall be directed forthwith to
proceed to arbitration.
A court action may likewise be proper where
the arbitrator has not been selected by the parties.
Under present law, may the parties who agree to
submit their disputes to arbitration further provide
that the arbitrators' award shall be final,
unappealable and executory?
Article 2044 of the Civil Code recognizes the
validity of such stipulation, thus:
 "Any stipulation that the arbitrator's award or
decision shall be final is valid, without
prejudice to Articles 2038, 2039 and 2040."
 Similarly, the Construction Industry
Arbitration Law provides that the arbitral
award "shall be final and inappealable except
on questions of law which shall be appealable
to the Supreme Court."16
Under the original Labor Code, voluntary
arbitration awards or decisions were final,
unappealable and executory. "However, voluntary
arbitration awards or decisions on money claims,
involving an amount exceeding One Hundred
Thousand Pesos (P100,000.00) or forty-percent
(40%) of the paid-up capital of the respondent
employer, whichever is lower, may be appealed to
the NLRC on any of the following grounds: (a)
abuse of discretion; and (b) gross incompetence."
It is to be noted that the appeal in the instances
cited were to be made to the National Labor
Relations Commission and not to the courts.
With the subsequent deletion of the above-
cited provision from the Labor Code, the voluntary
arbitrator is now mandated to render an award or
decision within 20 calendar days from the date of
submission of the dispute and such decision shall
be final and executory after 10 calendar days from
receipt of the copy of the award or decision by the
parties.
Where the parties agree that the decision of
the arbitrator shall be final and unappealable as in
the instant case, the pivotal inquiry is whether
subject arbitration award is indeed beyond the
ambit of the court's power of judicial review.
We rule in the negative. It is stated explicitly
under Art. 2044 of the Civil Code that the finality
of the arbitrators' award is not absolute and
without exceptions.
 Where the conditions described in Articles
2038, 2039 and 2040 applicable to both
compromises and arbitrations are obtaining,
the arbitrators' award may be annulled or
rescinded.
 Additionally, under Sections 24 and 25 of the
Arbitration Law, there are grounds for
vacating, modifying or rescinding an
arbitrator's award.
If courts refuse or neglect to inquire into the
factual milieu of an arbitrator's award to determine
whether it is in accordance with law or within the
scope of his authority? How may the power of
judicial review be invoked?
This is where the proper remedy is certiorari
under Rule 65 the Revised Rules of Court. It is to
be borne in mind, however, that this action will lie
only where a grave abuse of discretion or an act
without or in excess of jurisdiction on the part of
the voluntary arbitrator is clearly shown.
 For "the writ of certiorari is an extraordinary
remedy and that certiorari jurisdiction is not
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to be equated with appellate jurisdiction.
 In a special civil action of certiorari, the Court
will not engage in a review of the facts found
nor even of the law as interpreted or applied
by the arbitrator unless the supposed errors
of fact or of law are so patent and gross and
prejudicial as to amount to a grave abuse of
discretion or an exces de pouvoir on the part
of the arbitrator."
Even decisions of administrative agencies
which are declared "final" by law are not exempt
from judicial review when so warranted.
It should be stressed too, that voluntary
arbitrators, by the nature of their functions, act in
a quasi-judicial capacity. It stands to reason,
therefore, that their decisions should not be
beyond the scope of the power of judicial review of
this Court.
LM Power Engineering Corp. v. Capitol
Industrial Construction Groups (2003)
Held: Essentially, the dispute arose from the
parties’ incongruent positions on whether certain
provisions of their Agreement could be applied to
the facts. The instant case involves technical
discrepancies that are better left to an arbitral
body that has expertise in those areas.
 In any event, the inclusion of an arbitration
clause in a contract does not ipso facto divest
the courts of jurisdiction to pass upon the
findings of arbitral bodies, because the
awards are still judicially reviewable under
certain conditions.
The Subcontract of the parties contain an
arbitration clause.
Being an inexpensive, speedy and amicable
method of settling disputes, arbitration -- along
with mediation, conciliation and negotiation -- is
encouraged by the Supreme Court. Aside from
unclogging judicial dockets, arbitration also
hastens the resolution of disputes, especially of the
commercial kind. It is thus regarded as the “wave
of the future” in international civil and commercial
disputes. Brushing aside a contractual agreement
calling for arbitration between the parties would be
a step backward.
Consistent with the above-mentioned policy of
encouraging alternative dispute resolution
methods, courts should liberally construe
arbitration clauses. Provided such clause is
susceptible of an interpretation that covers the
asserted dispute, an order to arbitrate should be
granted. Any doubt should be resolved in favor of
arbitration.
According to petitioner, assuming arguendo
that the dispute is arbitrable, the failure to file a
formal request for arbitration with the Construction
Industry Arbitration Commission (CIAC) precluded
the latter from acquiring jurisdiction over the
question.
Held: Sec 1 of Article II of the old Rules of
Procedure Governing Construction Arbitration
indeed required the submission of a request for
arbitration, as follows. However, the new Rules of
Procedure Governing Construction Arbitration has
dispensed with this requirement and recourse to
the CIAC may now be availed of whenever a
contract “contains a clause for the submission of a
future controversy to arbitration” .
 Clearly, there is no more need to file a
request with the CIAC in order to vest it
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
with jurisdiction to decide a construction
dispute.
The arbitral clause in the Agreement is a
commitment on the part of the parties to submit to
arbitration the disputes covered therein. Because
that clause is binding, they are expected to abide
by it in good faith. And because it covers the
dispute between the parties in the present case,
either of them may compel the other to arbitrate.
11.05 COMPULSORY ARBITRATION
1. DEFINITION AND NATURE OF DISPUTE
SUBJECT TO COMPULSORY ARBITRATION
Compulsory Arbitration is by mandate of law.
While voluntary arbitration is by agreement of
parties.
 What is the type of dispute subject to
compulsory arbitration? Labor disputes in
industry indispensable to the national
interest.
 Who is initiating party? Initiated by the
Secretary of Labor or the President.
Take note that the NLRC has no authority to
initiate. The NLRC only comes into the picture
when the secretary of labor or the President
certifies the case to them.
Art. 263 (g)
Strikes, Picketing, and Lock-outs
When, in his OPINION,
 there exists a LABOR DISPUTE
 causing or likely to cause a STRIKE OR LOCK-
OUT
 in an INDUSTRY INDISPENDSABLE TO THE
NATIONAL INTERESTS,
The Secretary of Labor and Employment MAY
1. assume jurisdiction over the dispute and
decide it OR
2. certify the same to the Commission
(NLRC) for COMPULSORY ARBITRATION.
Such assumption or certification shall have the
effect of:
AUTOMATICALLY enjoining the intended or
impending strike or lock-out as specified in the
assumption or certification order.
If one has already taken place at the time of
assumption or certification,
1. All striking or locked-out employees shall
IMMEDIATELY RETURN TO WORK
2. AND the employer shall IMMEDIATELY
resume operations and READMIT all
workers under the SAME terms and
conditions prevailing before the strike or
lock-out.
The Secretary of Labor and Employment or the
Commission may seek the assistance of law
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enforcement agencies to ensure the compliance
with this provision as well as with such orders as
he may issue to enforce the same.
In line with the national concerns for and highest
respect accorder to the right of patients to life and
health, strikes and lock-outs in HOSPITALS,
CLINICS, and SIMILAR MEDICAL INSTITUTIONS
SHALL, to every extent possible, BE AVOIDED, and
all serious efforts, not only by labor and
management but government as well, be
exhausted to SUBSTANTIALLY MINIMIZE, if not
prevent, their adverse effects on such life and
health, through the exercise, however legitimate,
by labor of its right to strike and by management
to lockout.
In labor disputes adversely affecting the continued
operation of such hospitals, clinics or medical
institutions,
1. it shall be the DUTY of striking union or
locking out employer to provide and
maintain an EFFECTIVE SKELETAL
WORKFORCE of medical and other health
personnel,
2. Whose movement and services shall be
unhampered and unrestricted, as are
necessary to insure the proper and
adequate protection of the life and health
of its patients, most especially emergency
cases, for the duration of the strike or
lockout.
In such cases, therefore, the Secretary of Labor
and Employment may IMMEDIATELY assume,
within twenty four (24) hours from knowledge of
the occurrence of such a strike or lockout,
jurisdiction over the same or certify it to the
Commission for compulsory arbitration.
For this purpose the contending parties are
STRICTLY ENJOINED to comply with such orders,
prohibitions and/or injunctions as are issued by the
Secretary of Labor and Employment or the
Commission, under pain of immediate disciplinary
action, including dismissal or loss of employment
status or payment by the locking-out employer of
back wages, damages and other affirmative relief,
even criminal prosecution against either or both of
them.
The foregoing notwithstanding, the President of the
Philippines shall not be precluded
1. From DETERMINING THE INDUSTRIES
that, in HIS OPINION, are indispensable
to the national interest, and
2. From intervening at any time and
assuming jurisdiction over such labor
dispute in order to settle or terminate the
same.
Sec. 22 RA 8791
Banking institutions are industries indispensable to
the national interest.
PAL v. NLRC (1989)
Neither can proceedings on appeal before the
NLRC en banc be considered as part of the
arbitration proceeding.
In its broad sense, arbitration is the
reference of a dispute to an impartial third
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
person, chosen by the parties or appointed by
statutory authority to hear and decide the case in
controversy [Chan Linte v. Law Union and Rock,
Inc. Co., 42 Phil. 548 (1921)].
When the consent of one of the parties is
enforced by statutory provisions, the proceeding is
referred to as compulsory arbitration.
In labor cases, compulsory arbitration is the
process of settlement of labor disputes by a
government agency which has the authority to
investigate and to make an award which is binding
on all the parties
Under the Labor Code, it is the Labor Arbiter
who is clothed with the authority to conduct
compulsory arbitration on cases involving
termination disputes [Article 217, Pres. Decree No.
442, as amended].
When the Labor Arbiter renders his decision,
compulsory arbitration is deemed terminated
because by then the hearing and determination of
the controversy has ended.
Any appeal raised by an aggrieved party from
the Labor Arbiter's decision is already beyond the
scope of arbitration since in the appeal stage, the
NLRC en banc merely reviews the Labor Arbiter's
decision for errors of fact or law and no longer
duplicates the proceedings before the Labor
Arbiter. Thus, the clause "pending final resolution
of the case by arbitration" should be understood to
be limited only to the proceedings before the Labor
Arbiter, such that when the latter rendered his
decision, the case was finally resolved by
arbitration.
GTE Directories Corp. v. GTE Directories Corp.
Employees Union (1991)
Minister Sanchez decided the dispute in the
exercise of the jurisdiction assumed by his
predecessor in accordance with Article 263 (g) of
the Labor Code.
Even that assumption s is open to question.
The production and publication of telephone
directories, which is the principal activity of GTE,
can scarcely be described as an industry affecting
the national interest. GTE is a publishing firm
chiefly dependent on the marketing and sale of
advertising space for its not inconsiderable
revenues.
Its services, while of value, cannot be deemed
to be in the same category of such essential
activities as "the generation or distribution of
energy" or those undertaken by "banks, hospitals,
and export-oriented industries."
 It cannot be regarded as playing as vital a
role in communication as other mass media.
The small number of employees involved in
the dispute, the employer's payment of "P10
million in income tax alone to the Philippine
government," and the fact that the "top
officers of the union were dismissed during
the conciliation process," obviously do not
suffice to make the dispute in the case at bar
one "adversely affecting the national
interest."
Luzon Development Bank v. Association of
Development Bank Employees (1995)
Compulsory arbitration is a system whereby
the parties to a dispute are compelled by the
government to forego their right to strike and are
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compelled to accept the resolution of their dispute
through arbitration by a third party.
The essence of arbitration remains since a
resolution of a dispute is arrived at by resort to a
disinterested third party whose decision is final and
binding on the parties, but in compulsory
arbitration, such a third party is normally
appointed by the government.
Trans-Asia Shipping Lines, Inc. v. CA (2004)
A cursory reading of the above provision
shows that when the Secretary of Labor assumes
jurisdiction over a labor dispute in an industry
indispensable to national interest or certifies the
same to the NLRC for compulsory arbitration, such
assumption or certification shall have the effect of
automatically enjoining the intended or impending
strike or lockout. Moreover, if one had already
taken place, all striking workers shall immediately
return to work and the employer shall immediately
resume operations and readmit all workers under
the same terms and conditions prevailing before
the strike or lockout.
The powers granted to the Secretary of Labor
under Article 263 (g) of the Labor Code have been
characterized as an exercise of the police power of
the State, with the aim of promoting public good:
When the Secretary exercises these powers, he is
granted “great breadth of discretion” in order to
find a solution to a labor dispute. The most obvious
of these powers is the automatic enjoining of an
impending strike or lockout or the lifting thereof if
one has already taken place.
 Assumption of jurisdiction over a labor
dispute, or as in this case the certification of
the same to the NLRC for compulsory
arbitration, always co-exists with an order for
workers to return to work immediately and
for employers to readmit all workers under
the same terms and conditions prevailing
before the strike or lockout.
That respondent’s business is of national
interest is not disputed. It is engaged in coastwise
shipping services for the transportation of
passengers and cargoes.
 The direct intervention of this Office becomes
imperative on account of the magnitude of
the adverse effect of any work stoppage at
the Company to the regional and national
economy. Under the present state of things,
the exercise of this Office’s power as
embodied under Article 263 (g) of the Labor
Code, as amended, is warranted.
The maritime industry is indubitably imbued
with national interest. Under the circumstances,
the Labor Secretary correctly intervened in the
labor dispute between the parties to this case by
certifying the same to the NLRC for compulsory
arbitration.
Manila Diamond Hotel Employees’ Union v. CA
(2004)
The CA based its decision on this Court’s ruling
in UST v. NLRC. There, the Secretary assumed
jurisdiction over the labor dispute between striking
teachers and the university. He ordered the
striking teachers to return to work and the
university to accept them under the same terms
and conditions.
 However, in a subsequent order, the NLRC
provided payroll reinstatement for the
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striking teachers as an alternative remedy to
actual reinstatement.
 True, this Court held therein that the NLRC
did not commit grave abuse of discretion in
providing for the alternative remedy of
payroll reinstatement. This Court found that
it was merely an error of judgment, which is
not correctible by a special civil action for
certiorari. The NLRC was only trying its best
to work out a satisfactory ad hoc solution to a
festering and serious problem.
However, this Court notes that the UST ruling
was made in the light of one very important fact:
the teachers could not be given back their
academic assignments since the order of the
Secretary for them to return to work was given in
the middle of the first semester of the academic
year.
 The NLRC was, therefore, faced with a
situation where the striking teachers were
entitled to a return to work order, but the
university could not immediately reinstate
them since it would be impracticable and
detrimental to the students to change
teachers at that point in time.
In the present case, there is no showing that
the facts called for payroll reinstatement as an
alternative remedy. A strained relationship
between the striking employees and management
is no reason for payroll reinstatement in lieu of
actual reinstatement.
Petitioner correctly points out that labor
disputes naturally involve strained relations
between labor and management, and that in most
strikes, the relations between the strikers and the
non-strikers will similarly be tense. Nevertheless,
the government must still perform its function and
apply the law, especially if, as in this case, national
interest is involved.
Whether the Court of Appeals erred in ruling
that the Secretary did not commit any grave abuse
of discretion in ordering payroll reinstatement in
lieu of actual reinstatement?
This question is answered by the nature of
Article 263(g).
As a general rule, the State encourages an
environment wherein employers and employees
themselves must deal with their problems in a
manner that mutually suits them best. This is the
basic policy embodied in Article XIII, Section 3 of
the Constitution, which was further echoed in
Article 211 of the Labor Code.
 Hence, a voluntary, instead of compulsory,
mode of dispute settlement is the general
rule.
However, Article 263(g), which allows the
Secretary of Labor to assume jurisdiction over a
labor dispute involving an industry indispensable
to the national interest, provides an exception:
(g) When, in his opinion, there exists a
labor dispute causing or likely to cause a
strike or lockout in an industry indispensable
to the national interest, the Secretary of
Labor and Employment may assume
jurisdiction over the dispute and decide it or
certify the same to the Commission for
compulsory arbitration. Such assumption or
certification shall have the effect of
automatically enjoining the intended or
impending strike or lockout as specified in the
assumption or certification order. If one has
already taken place at the time of assumption
or certification, all striking or locked out
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employees shall immediately return to work
and the employer shall immediately resume
operations and readmit all workers under the
same terms and conditions prevailing before
the strike or lockout. x x x
This provision is viewed as an exercise of the
police power of the State. A prolonged strike or
lockout can be inimical to the national economy
and, therefore, the situation is imbued with public
necessity and involves the right of the State and
the public to self-protection.
Under Article 263(g), all workers must
immediately return to work and all employers must
readmit all of them under the same terms and
conditions prevailing before the strike or lockout.
 This Court must point out that the law uses
the precise phrase of “under the same terms
and conditions,” revealing that it
contemplates only actual reinstatement.
 This is in keeping with the rationale that any
work stoppage or slowdown in that particular
industry can be inimical to the national
economy. It is clear that Article 263(g) was
not written to protect labor from the excesses
of management, nor was it written to ease
management from expenses, which it
normally incurs during a work stoppage or
slowdown.
It is, therefore, evident from the foregoing
that the Secretary’s subsequent order for mere
payroll reinstatement constitutes grave abuse of
discretion amounting to lack or excess of
jurisdiction.
Even in the exercise of his discretion under
Article 236(g), the Secretary must always keep in
mind the purpose of the law. Time and again, this
Court has held that when an official by-passes the
law on the asserted ground of attaining a laudable
objective, the same will not be maintained if the
intendment or purpose of the law would be
defeated.
2. RATIONALE FOR COMPULSORY
ARBITRATION
National Federation of Labor v. MOLE (1983)
"The very nature of a return-to-work order
issued in a certified case lends itself to no other
construction.
 The certification attests to the urgency of the
matter, affecting as it does an industry
indispensable to the national interest. The
order is issued in the exercise of the court's
compulsory power of arbitration, and
therefore must be obeyed until set aside.
 To say that its effectivity must await
affirmance on a motion for reconsideration is
not only to emasculate it but indeed to defeat
its import, for by then the deadline fixed for
the return to work would, in the ordinary
course, have already passed and hence can
no longer be affirmed insofar as the time
element is concerned."
It is quite apparent, therefore, why this case
calls for prompt decision. After this long lapse of
time, respondent Zamboanga Wood Products, Inc.
had failed to abide by the clear and mandatory
requirement of the law.
It would negate the very purpose of a
compulsory arbitration, which precisely is
intended to call a halt to a pending strike by
requiring that the status quo prior to its
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Labor Relations
declaration be preserved, if one of the parties fails
to live up to such a norm. The inconsistencies
between what was sought by private respondent,
namely, compulsory arbitration, and the failure to
admit the striking employees back to work in the
meantime, cannot be countenanced. As noted
earlier, time is of the essence as far as the eighty-
one petitioners are concerned.
Phil. School of Business Administration v.
Noriel(1988)
In the opinion of Acting Secretary Noriel, the
labor dispute adversely affected the national
interest, affecting as it did some 9,000 students.
He was authorized by law to assume jurisdiction
over the labor dispute, after finding that it
adversely affected the national interest. This power
is expressly granted by Art. 263(g) of the Labor
Code.
 Acting Secretary Noriel did exactly what he
was supposed to do under the Labor Code.
Petitioner contends that the Acting Secretary
erred when he found that the strike staged by
respondent union and its members, who had
already been restrained by the RTC from picketing
and barricading the main gate of the school, was a
fit subject of a return to work order.
However, the Court finds that no error was made
by the Acting Secretary.
 The RTC had no jurisdiction over the subject
matter of the case filed by some PSBA
students, involving as it does a labor dispute
over which the labor agencies had exclusive
jurisdiction. That the regular courts have no
jurisdiction over labor disputes and to issue
injunctions against strikes is well-settled.
It may also be added that due to petitioner's
intransigent refusal to attend the conciliation
conferences called after the union struck,
assumption of jurisdiction by the Secretary of
Labor and the issuance of a return-to-work order
had become the only way of breaking the deadlock
and maintaining the status quo ante pending
resolution of the dispute.
The Solicitor General was correct when he
stated that by assuming jurisdiction over the labor
dispute, the Acting Secretary of Labor merely
provided for a formal forum for the parties to
ventilate their positions with the end in view of
settling the dispute.
It is, therefore, error for the petitioners to
allege that by the mere act of certifying a labor
dispute for compulsory arbitration and issuing a
return to work order, the Minister of Labor and
Employment thereby "enters the picture on the
side of the Company," and violates the freedom of
expression of workers engaged in picketing, "in
utter subversion of the constitutional rights of
workers."
As contended by the SolGen, "there can be no
such unconstitutional application (of BP 227)
because all that Minister has done is to certify the
labor dispute for arbitration and thereafter
personally assume jurisdiction over it. He has not
rendered any decision; he has not favored one
party over the other.
The exercise of the power, to be in full accord
with the Constitution, must be with a view to the
protection of labor:
 . . . It must be stressed anew, however, that
the power of compulsory arbitration, while
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allowable under the [1973] Constitution, and
quite understandable in labor disputes
affected with a national interest, to be free
from the taint of unconstitutionality, must be
exercised in accordance with the
constitutional mandate of protection to labor.
The arbiter then is called upon to take due
care that in the decision to be reached, there is no
violation of "the rights of workers to self-
organization, collective bargaining, security of
tenure, and just and humane conditions of work."
[Art. II, Sec. 9, 1973 Constitution.]
 It is of course manifest that there is such
unconstitutional application if a law "fair on
its face and impartial in appearance is applied
and administered by a public authority with
an evil eye and an unequal hand." [Yick Wo
v. Hopkins, 118 U.S. 356, 372 (1886).] It
does not even have to go that far. An
instance of unconstitutional application would
be discernible if what is ordained by the
fundamental law, the protection of law, is
ignored or disregarded.
Manila Cordage Company v. CIR (1971)
The purpose of a presidential certification is
nothing more than to bring about soonest, thru
arbitration by the industrial court, a fair and just
solution of the differences between an employer
and his workers regarding the terms and
conditions of work in the industry concerned which
in the opinion of the President involves the national
interest, so that the damage such employer-worker
dispute might cause upon the national interest
may be minimized as much as possible, if not
totally averted by avoiding the stoppage of work as
a result of a strike or lock out or any lagging of the
activities of the industry or the possibility of these
contingencies which might cause detriment to such
national interest.
This is the foundation of that court's
jurisdiction in what may be termed as a
certification case.
Naturally, if the employer and the workers are
able to arrive at an amicable settlement by free
and voluntary collective bargaining preferably thru
a labor union, before the court is able to use its
good offices, it is but in consonance with the
objective of the Industrial Peace Act to promote
unionism and free collective bargaining that the
court should step out of the picture and declare its
function in the premises at an end, except as it
may become necessary to determine whether or
not the agreement forged by the parties is not
contrary to law, morals or public policy.
3. PROCESS INITIATION – CERTIFICATION
OF DISPUTE
1) Initiating Party
a) Secretary DOLE
b) President
Union of Filipino Employees v. Nestle
Philippines (1990)
The assumption of jurisdiction by the
Secretary of Labor over labor disputes causing or
likely to cause a strike or lockout in an industry
indispensable to the national interest is in the
nature of a POLICE POWER measure.
It cannot be denied that the private
respondent is engaged in an undertaking
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Labor Relations
affected with public interest being one of the
largest manufacturers of food products.
The compelling consideration of the
Secretary's assumption of jurisdiction is the fact
that
 a prolonged strike or lockout is inimical to the
national economy and
 thus, the need to implement some measures
to suppress any act which will hinder the
company's essential productions is
indispensable for the promotion of the
COMMON GOOD.
Under this situation, the Secretary's
certification order for compulsory arbitration which
was intended for the immediate formulation of an
already delayed CBA was proper.
Corollary, the NLRC was thereby charged with
the task of implementing the certification order for
compulsory arbitration.
 As the implementing body, its authority did
not include the power to amend the
Secretary's order.
For the same reason, We rule that the prayer
to declare the respondent company guilty of acts
of unfair labor practice when it allegedly resorted
to practices designed to delay the collective
bargaining negotiations cannot be subsumed in
this petition, it being beyond the scope of the
certification order.
Petitioner argues that because of the public
respondent's actuation in this regard, it committed
grave abuse of discretion as it allowed multiplicity
of suits and splitting causes of action which are
barred by procedural rule.
What is compulsory arbitration?
"When the consent of one of the parties is
enforced by statutory provisions, the proceeding is
referred to as compulsory arbitration In labor
cases, compulsory arbitration is the process of
settlement of labor disputes by a government
agency which has the authority to investigate and
to make an award which is binding on all the
parties.
When sitting in a compulsory arbitration
certified to by the Secretary of Labor, the NLRC is
 not sitting as a judicial court
 but as an administrative body charged
with the duty to implement the order of
the Secretary.
In this case, Its function only is to formulate
the terms and conditions of the CBA and cannot go
beyond the scope of the order.
Moreover, the Commission is further tasked to
act within the earliest time possible and with the
end in view that its action would not only serve the
interests of the parties alone, but would also have
favorable implications to the community and to the
economy as a whole.
In view of the avowed but limited purpose of
respondent's assumption of jurisdiction over this
compulsory arbitration case, it cannot be faulted in
not taking cognizance of other matters that would
defeat this purpose.
Int’l Pharmaceuticals Inc. v. Secretary of
DOLE (1992)
The foregoing provisions persuade us that the
Secretary did not gravely abuse his discretion
when he issued the questioned orders.
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As early as 1913, this Court laid down in
Herrera vs. Baretto, et al. “the fundamental
normative rule that jurisdiction is the authority to
hear and determine a cause - the right to act in a
case.
 However, this should be distinguished
from the exercise of jurisdiction. The
authority to decide a case at all and not
the decision rendered therein is what
makes up jurisdiction. Where there is
jurisdiction over the person and the
subject matter, the decision of all other
questions arising in the case is but an
exercise of that jurisdiction.
In the present case, the Secretary was
explicitly granted by Art. 263(g) of the Labor Code
the authority to assume jurisdiction over a labor
dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national
interest, and decide the same accordingly.
Necessarily, this authority to assume jurisdiction
over the said labor dispute must include and
extend to
 all questions and controversies arising
therefrom,
 including cases over which the labor
arbiter has exclusive jurisdiction.
Moreover, Art. 217 is not without, but
contemplates, exceptions thereto. This is evident
from the opening proviso therein reading "(e)xcept
as otherwise provided under this Code . . ." Plainly,
Article 263(g) was meant to make both the
Secretary (or the various regional directors) and
the labor arbiters share jurisdiction, subject to
certain conditions.
Otherwise, the Secretary would not be able to
effectively and efficiently dispose of the primary
dispute. To hold the contrary may even lead to the
absurd and undesirable result wherein the
Secretary and the labor arbiter concerned may
have diametrically opposed rulings.
 As we have said, "(i)t is fundamental that
a statute is to be read in a manner that
would breathe life into it, rather than
defeat it.
In fine, the issuance of the assailed orders is
within the province of the Secretary as authorized
by Article 263(g) of the Labor Code and Article
217(a) (1) and (5) of the same Code, taken
conjointly and rationally construed to subserve the
objective of the jurisdiction vested in the
Secretary.
Our pronouncement on this point should be
distinguished from the situation which obtained
and our consequent ruling in Servando's, Inc. vs.
Sec of Labor wherein we referred to the
appropriate labor arbiter a case previously decided
by the Secretary.
 The said case was declared to be within
the exclusive jurisdiction of the labor
arbiter since the aggregate claims of each
of the employees involved exceeded
P5,000.00.
 In Servando, the Secretary invoked his
visitorial and enforcement powers to
assume jurisdiction over the ease, the
exclusive and original jurisdiction of which
belongs to the labor arbiter. We said that
to uphold the Secretary would empower
him, under his visitorial powers, to hear
and decide an employee's claim of
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Labor Relations
more than P5,000.00. We held that he
could not do that and we, therefore,
overruled him.
In the present case, however, by virtue of
Article 263(g) of the Labor Code, the Secretary has
been conferred jurisdiction over cases which would
otherwise be under the original and exclusive
jurisdiction of labor arbiters.
There was an existing labor dispute as a result of a
deadlock in the negotiation for a CBA and the
consequent strike, over which the Secretary
assumed jurisdiction pursuant to Article 263(g) of
the Labor Code.
 The three NLRC cases were just offshoots
of the stalemate in the negotiations and
the strike.
 We, therefore, uphold the Secretary's
order to consolidate the NLRC cases with
the labor dispute pending before him and
his subsequent assumption of jurisdiction
over the said NLRC cases for him to be
able to competently and efficiently
dispose of the dispute in its totality.
Feati University v. Bautista(1966)
"It thus appears that when in the opinion of
the President a labor dispute exists in an industry
indispensable to national interest and he certifies it
to the Court of Industrial Relations the latter
acquires jurisdiction to act thereon in the manner
provided by law.
Thus the court may take either of the
following courses:
a. it may issue an order forbidding
employees to strike or the employer to
lockout its employees, or, failing in this,
b. it may issue an order fixing the terms and
conditions of employment. It has no other
alternative. It can throw the case out in
the assumption that the certification was
erroneous.
". . . The fact, however, is that because of the
strike declared by the members of the minority
union which threatens a major industry the
President deemed it wise to certify the controversy
to the Court of Industrial Relations for
adjudication.
This is the power that the law gives to the
President the propriety of its exercise being a
matter that only devolves upon him.
The same is not the concern of the industrial
court. What matters is that by virtue of the
certification made by the President the case was
placed under the jurisdiction of said court."
To certify a labor dispute to the CIR is the
prerogative of the President under the law, and
this Court will not interfere in, much less curtail,
the exercise of that prerogative.
The jurisdiction of the CIR in a certified case is
exclusive (Rizal Cement Co., Inc. vs. Rizal Cement
Workers Union (FFW), et al., G. R. L-12747, July
30, 1960).
 Once the jurisdiction is acquired pursuant
to the presidential certification, the CIR
may exercise its broad powers as
provided in Commonwealth Act 103. All
phases of the labor dispute and the
employer-employee relationship may be
threshed out before the CIR, and the CIR
may issue such order or orders as may be
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necessary to make effective the exercise
of its jurisdiction.
 The parties involved in the case may
appeal to the Supreme Court from the
order or orders thus issued by the CIR.
And so, in the instant case, when the
President took into consideration that the
University "has some 18,000 students and
employed approximately 500 faculty members,"
that "the continued disruption in the operation of
the University will necessarily prejudice the
thousand of students", and that "the dispute
affects the national interest", and certified the
dispute to the CIR, it is not for the CIR nor this
Court to pass upon the correctness of the reasons
of the President in certifying the labor dispute to
the CIR.
4. ARBITRATION AGENCIES
St. Scholastica’s College v. Torres (1992)
An issue that is not part of the dispute may be
ruled on a compulsory arbitration case if it was
submitted by the parties.
The issue on whether respondent SECRETARY
has the power to assume jurisdiction over a labor
dispute and its incidental controversies, causing or
likely to cause a strike or lockout in an industry
indispensable to the national interest, was already
settled in International Pharmaceuticals, Inc.
Secretary of Labor and Employment. Therein, We
ruled that:
". . . [T]he Secretary was explicitly granted
by Article 263 (g) of the Labor Code the
authority to assume jurisdiction over a labor
dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
national interest, and decide the same
accordingly. Necessarily, this authority to
assume jurisdictional over the said labor
dispute must include and extend to all
questions and controversies arising
therefrom, including cases over which the
Labor Arbiter has exclusive jurisdiction."
At first glance, the rulings above stated seem
to run counter to that of PAL v. Secretary or Labor
and Employment, which was, cited by petitioner.
But the conflict is only apparent, not real.
 To recall, We ruled in the latter case
that the jurisdiction of the Secretary
of Labor and Employment in
assumption and/or certification cases
is limited to the issues that are
involved in the disputes or to those
that are submitted to him for
resolution.
 The seeming difference is, however,
reconcilable. Since the matter on the
legality or illegality of the strike was
never submitted to him for resolution,
he was thus found to have exceeded
his jurisdiction when he restrained
the employer from taking disciplinary
action against employees who staged
an illegal strike.
Before the Secretary of Labor and Employment
may take cognizance of an issue which is merely
incidental to the labor dispute, therefore, the same
must be involved in the labor dispute itself, or
otherwise submitted to him for resolution.
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
 If it was not, as was the case in PAL and
he nevertheless acted on it, that
assumption of jurisdiction is tantamount
to a grave abuse of discretion.
 Otherwise, the ruling in International
Pharmaceuticals, Inc. v. Secretary of
Labor and Employment, supra, will apply.
The submission of an incidental issue of a
labor dispute, in assumption and/or certification
cases, to the Secretary of Labor and Employment
for his resolution is thus one of the instances
referred to whereby the latter may exercise
concurrent jurisdiction together with the Labor
Arbiters.
Effect of non-compliance with return to work order
Non-compliance with the certification order of
the Sec of Labor or a return to work order of the
Commission shall be considered an illegal act
committed in the course of the strike or lookout
and shall authorize the Sec of Labor or the
Commission, as the case may be, to enforce the
same under pain or loss of employment status or
entitlement to full employment benefits from the
locking-out employer or backwages, damages
and/or other positive and/or affirmative reliefs,
even to criminal prosecution against the liable
parties . . ."
Private respondent UNION maintains that the
reason they failed to immediately comply with the
return-to-work order was because they questioned
the assumption of jurisdiction of respondent
SECRETARY.
 They were of the impression that being an
academic institution, the school could not
be considered an industry indispensable
to national interest, and that pending
resolution of the issue, they were under
no obligation to immediately return to
work.
This position of the UNION is simply flawed.
Article 263 (g) provides that if a strike has already
taken place at the time of assumption, "all striking
. . . employees shall immediately return to work."
This means that by its very terms, a return-to-
work order is immediately effective and executory
notwithstanding the filing of a motion for
reconsideration
It must be strictly complied with even during
the pendency of any petition questioning its
validity (Union of Filipro Employees v. Nestle'
Philippines, Inc., supra)
 After all, the assumption and/or
certification order is issued in the exercise
of respondent SECRETARY's compulsive
power of arbitration and, until set aside,
must therefore be immediately complied
with.
The rationale for this rule is explained in
University of Sto. Tomas v. NLRC,
 "To say that the return-to-work order
effectivity must wait affirmance in a
motion for reconsideration is not only to
emasculate it but indeed to defeat its
import, for by then the deadline fixed for
the return to work would, in the ordinary
course, have already passed and hence
can no longer be affirmed insofar as the
time element is concerned."
Moreover, the assumption of jurisdiction by
the Secretary of Labor over labor disputes
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involving academic institutions was already upheld
in Philippine School of Business Administration v.
Noriel where We ruled thus:
 "There is no doubt that the on-going labor
dispute at the school adversely affects the
national interest.
Respondent UNION's failure to immediately
comply with the return-to-work order of 5
November 1990, therefore, cannot be condoned.
The respective liabilities of striking union
officers and members who failed to immediately
comply with the return-to-work order is outlined in
Art. 264 of the Labor Code which provides that any
declaration of a strike or lockout after the
Secretary of Labor and Employment has assumed
jurisdiction over the labor dispute is considered an
illegal act. Any worker or union officer who
knowingly participates in a strike defying a return-
to-work order may, consequently, "be declared to
have lost his employment status."
 Thus, we held in Sarmiento v. Tuico,
supra, that by insisting on staging the
restrained strike and defiantly picketing
the company premises to prevent the
resumption of operations, the strikers
have forfeited their right to be readmitted,
having abandoned their positions, and so
could be validly replaced.
The sympathy of the Court which, as a rule, is
on the side of the laboring classes (Reliance Surety
& Insurance Co., Inc. v. NLRC), cannot be
extended to the striking union officers and
members in the instant petition. There was willful
disobedience not only to one but two return-to-
work orders.
 Considering that the UNION consisted
mainly of teachers, who are supposed to
be well-lettered and well-informed, the
Court cannot overlook the plain arrogance
and pride displayed by the UNION in this
labor dispute.
 It is clear from the provisions above
quoted that from the moment a worker
defies a return-to-work order, he is
deemed to have abandoned his job. It is
already in itself knowingly participating in
an illegal act. Otherwise, the worker will
just simply refuse to return to his work
and cause a standstill they refused to
discharge or allow the management to fill
(Sarmiento v. Tuico, supra).
 Suffice it to say, in Federation of Free
Workers v. Inciong, supra, the workers
were terminated from work after defying
the return-to-work order for only nine (9)
days. It is indeed inconceivable that an
employee, despite a return-to-work order,
will be allowed in the interim to stand
akimbo and wait until five (5) orders shall
have been issued for their return before
they report back to work. This is absurd.
5. EFFECT OF CERTIFICATION AND
VIOLATION OF ORDER
Sarmiento v. Tuico (1988)
The law itself provides that "such assumption
or certification shall have the effect of
automatically enjoining the intended or
impending strike. If one has already taken place
at the time of assumption or certification, all
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
striking or locked out employees shall immediately
return to work and the employer shall immediately
resume operations and readmit all workers under
the same terms and conditions prevailing before
the strike or lockout."
It must be stressed that while one purpose of
the return-to-work order is to protect the workers
who might otherwise be locked out by the
employer for threatening or waging the strike, the
more important reason is to prevent impairment of
the national interest in case the operations of the
company are disrupted by a refusal of the strikers
to return to work as directed.
In the instant case, stoppage of work in the
firm will be hurtful not only to both the employer
and the employees. More particularly, it is the
national economy that will suffer because of the
resultant reduction in our export earnings and our
dollar reserves, not to mention possible
cancellation of the contracts of the company with
foreign importers. It was particularly for the
purpose of avoiding such a development that the
labor dispute was certified to the NLRC, with the
return-to-work order following as a matter of
course under the law.
It is also important to emphasize that the
return-to-work order not so much confers a right
as it imposes a duty; and while as a right it may
be waived, it must be discharged as a duty even
against the worker's will.
 Returning to work in this situation is not a
matter of option or voluntariness but of
obligation. The worker must return to his
job together with his co-workers so the
operations of the company can be
resumed and it can continue serving the
public and promoting its interest. That is
the real reason such return can be
compelled.
Not a violation of right against involuntary
servitude
So imperative is the order in fact that it is not
even considered violative of the right against
involuntary servitude, as this Court held in
Kaisahan ng Mga Manggagawa sa Kahoy v.
Gotamco Sawmills. The worker can of course give
up his work, thus severing his ties with the
company, if he does not want to obey the order;
but the order must be obeyed if he wants to retain
his work even if his inclination is to strike.
If the worker refuses to obey the return-to-
work order, can it be said that he is just
suspending the enjoyment of a right and he is
entitled to assert it later as and when he sees fit?
In the meantime, is the management required to
keep his position open, unable to employ
replacement to perform the work the reluctant
striker is unwilling to resume because he is still
manning the picket lines?
While the ATC has manifested its willingness
to accept most of the workers, and has in fact
already done so, it has balked at the demand of
the remaining workers to be also allowed to return
to work. Its reason is that these persons, instead
of complying with the return-to-work order, as
most of the workers have done, insisted on staging
the restrained strike and defiantly picketed the
company premises to prevent the resumption of
operations.
 By so doing, the ATC submits, these
strikers have forfeited their right to be
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readmitted, having abandoned their
positions, and so could be validly
replaced.
One other point that must be underscored is
that the return-to-work order is issued pending the
determination of the legality or illegality of the
strike. It is not correct to say that it may be
enforced only if the strike is legal and may be
disregarded if the strike is illegal, for the purpose
precisely is to maintain the status quo while the
determination is being made.
 Otherwise, the workers who contend that
their strike is legal can refuse to return to
their work and cause a standstill in the
company operations while retaining the
positions they refuse to discharge or allow
the management to fill. Worse, they will
also claim payment for work not done, on
the ground that they are still legally
employed although actually engaged in
activities inimical to their employer's
interest.
Accordingly, the Court holds that the return-
to-work order should benefit only those workers
who complied therewith and, regardless of the
outcome of the compulsory arbitration
proceedings, are entitled to be paid for work they
have actually performed.
 Conversely, those workers who refused to
obey the said order and instead waged
the restrained strike are not entitled to be
paid for work not done or to
reinstatement to the positions they have
abandoned by their refusal to return
thereto as ordered.
Telefunken Semi-Conductor Employees Union
v. CA (2000)
It is clear from Art. 263 that the moment the
Secretary of Labor assumes jurisdiction over a
labor dispute in an industry indispensable to
national interest, such assumption shall have the
effect of automatically enjoining the intended or
impending strike.
 It was not even necessary for the
Secretary of Labor to issue another order
directing them to return to work. The
mere issuance of an assumption order by
the Secretary of Labor automatically
carries with it a return-to-work order,
even if the directive to return to work is
not expressly stated in the assumption
order.
 However, petitioners refused to
acknowledge this directive of the
Secretary of Labor on September 8, 1995
thereby necessitating the issuance of
another order expressly directing the
striking workers to cease and desist from
their actual strike, and to immediately
return to work but which directive the
herein petitioners opted to ignore.
In this connection, Article 264(a) of the Labor
Code clearly provides that:
Article 264. Prohibited Activities.
(a) x x x No strike or lock out shall be declared
after the assumption of jurisdiction by the
President or the Secretary or after certification or
submission of the dispute to compulsory or
voluntary arbitration or during the pendency of
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
cases involving the same grounds for the strike
or lockout.
Any union officer who knowingly participates in
illegal strike and any worker or union officer
who knowingly participates in the commission
of illegal acts during a strike may be declared to
have lost his employment status: Provided,
that mere participation of a worker in a lawful
strike shall not constitute sufficient ground for
termination of his employment even if a
replacement had been hired by the employer
during such lawful strike.
The rationale of this prohibition is that once
jurisdiction over the labor dispute has been
properly acquired by the competent authority, that
jurisdiction should not be interfered with by the
application of the coercive processes of a strike.
 We have held in a number of cases
that defiance to the assumption and
return-to-work orders of the
Secretary of Labor after he has
assumed jurisdiction is a valid ground
for loss of the employment status of
any striking union officer or member.
Having thus resolved the threshold issue as
hereinabove discussed, it necessarily follows that
the strike of the Union cannot be viewed as
anything but illegal for having been staged in open
and knowing defiance of the assumption and
return-to-work orders. The necessary
consequence thereof are also detailed by the
Supreme Court in its various rulings. In Marcopper
Mining Corp. v. Brillantes (254 SCRA 595), the
High Tribunal stated in no uncertain terms that –
“by staging a strike after the assumption of
jurisdiction or certification for arbitration, workers
forfeited their right to; be readmitted to work,
having abandoned their employment, and so could
be validly replaced.”
Disini: RULES REGARDING RETURN TO WORK
ORDER
1) The moment there is Presidential (or by
Secretary of Labor) assumption of jurisdiction,
whether a return to work order is issued or not,
the return to work order is an integral part of the
assumption of jurisidiction. (Sarmiento v. Tuico)
2) A return to work order does not violate the
Involuntary Servitude clause (Sarmiento v. Tuico)
3) A return-to-work order must be complied with
as a matter of duty not just a right.
4) A return-to-work order may be appealed but
even pending appeal the return-to-work order
must still be followed.
5) According to the Bagiou Colleges case: If there
is doubt, take note of the duty to comply. One
merely has to file a motion for clarification.
TAKE NOTE: The extent of authority of the
compulsory arbitration are those that may be
necessary to settle the dispute.
6. AWARDS AND ORDERS
Art. 263
Strikes, picketing and lockouts.
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i. The Secretary of Labor and Employment, the
Commission or the voluntary arbitrator shall decide
or resolve the dispute, as the case may be. The
decision of the President, the Secretary of Labor
and Employment, the Commission or the voluntary
arbitrator shall be final and executory ten (10)
calendar days after receipt thereof by the parties.
Art. 277
i. To ensure speedy labor justice, the periods
provided in this Code within which decisions or
resolutions of labor relations cases or matters
should be rendered shall be mandatory. For this
purpose, a case or matter shall be deemed
submitted for decision or resolution upon the filing
of the last pleading or memorandum required by
the rules of the Commission or by the Commission
itself, or the Labor Arbiter, or the Director of the
Bureau of Labor Relations or Med-Arbiter, or the
Regional Director.
Upon expiration of the corresponding period, a
certification stating why a decision or resolution
has not been rendered within the said period shall
be issued forthwith by the Chairman of the
Commission, the Executive Labor Arbiter, or the
Director of the Bureau of Labor Relations or Med-
Arbiter, or the Regional Director, as the case may
be, and a copy thereof served upon the parties.
Despite the expiration of the applicable mandatory
period, the aforesaid officials shall, without
prejudice to any liability which may have been
incurred as a consequence thereof, see to it that
the case or matter shall be decided or resolved
without any further delay.
Telefunken Semi-Conductor Employees Union
v. CA (2000)
SOLE OFFICE OF THE WRIT OF CERTIORARI IS
THE CORRECTION OF ERRORS OF JURISDICTION
INCLUDING THE COMMISSION OF ABUSE OF
DISCRETION AMOUNTING TO LACK OF
JURISDICTION,”
As regards the third assigned error, petitioners
contend that a resolution of a petition for certiorari
under Rule 65 of the Rules of Court should include
the correction of the Secretary of Labor’s
evaluation of the evidence and factual findings
thereon pursuant to the doctrine laid down in
Meralco v. The Honorable Secretary of Labor
Leonardo A. Quisumbing. That contention is
misplaced. In that case, we ruled that:
“The extent of judicial review over the
Secretary of Labor’s arbitral award is not
limited to a determination of grave abuse in
the manner of the secretary’s exercise of his
statutory powers. This Court is entitled to,
and must – in the exercise of its judicial
power – review the substance of the
Secretary’s award when grave abuse of
discretion is alleged to exist in the award,
i.e., in the appreciation of and the
conclusions the Secretary drew from the
evidence presented.”
However, this Court’s “review of the
substance” does not mean a re-calibration of the
evidence presented before the DOLE but only a
determination of whether the Secretary of Labor’s
award passed the test of reasonableness when he
arrived at his conclusions made thereon. Thus,
we declared in Meralco, that:
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Labor Relations
“In this case we believe that the more
appropriate and available standard and one
does not require a constitutional
interpretation—is simply the standard of
reasonableness. In layman’s terms,
reasonableness implies the absence of
arbitrariness; in legal parlance, this translates
into the exercise of proper discretion and to
the observance of due process. Thus, the
question we have to answer in deciding this
case is whether the Secretary’s actions have
been reasonable in light of the parties positions
and the evidence they presented.”
The main thrust of a petition for certiorari
under Rule 65 of the Rules of Court is only the
correction of errors of jurisdiction including the
commission of grave abuse of discretion
amounting to lack or excess of jurisdiction.
 However, for this Court to properly
exercise the power of judicial review over
a decision of an administrative agency,
such as the DOLE, it must first be shown
that the tribunal, board or officer
exercising judicial or quasi-judicial
functions has indeed acted without or in
excess of its or his jurisdiction, and that
there is no appeal, or any plain, speedy
and adequate remedy in the ordinary
course of law. In the absence of any
showing of lack of jurisdiction or grave
abuse tantamount to lack or excess of
jurisdiction, judicial review may not be
had over an administrative agency’s
decision. We have gone over the records
of the case at bar and we see no cogent
basis to hold that the Secretary of Labor
has abused his discretion.
“THAT TECHNICAL RULES OF EVIDENCE
PREVAILING IN THE COURTS OF LAW AND EQUITY
HAVE NO ROOM IN ADMINISTRATIVE AND/OR
QUASI-JUDICIAL PROCEEDINGS.”
The contention of petitioners that they should
have been allowed to present evidence when their
demurrer to evidence was denied by the Secretary
of Labor, is untenable.
The record shows that in the hearing of
September 22, 1998 attended by the parties, Atty.
Lita V. Aglibut, Hearing Officer, of the public
respondent’s office, who presided over the hearing
directed the parties to submit their respective
position papers together with the affidavits and
documentary evidence within ten (10) days.
 While the Company submitted its position
paper together with supporting evidence
and rested its case for resolution, herein
petitioners, however, submitted only its
position paper but without attaching
thereto any supporting documentary
evidence.
 Petitioners chose to rely on the Rules of
Court by filing a demurrer to evidence in
the hope of a favorable decision and
disregarded our resolution in G.R. No.
127215 ordering the Secretary of Labor
to determine with dispatch the legality of
the strike.
 The fact that the Hearing Officer of DOLE
admitted their demurrer to evidence is
not a valid excuse for them not to comply
with the directive to submit their position
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paper and to attach thereto affidavits and
documentary evidence within 10 days.
 Petitioners’ non-compliance with that
directive should not be ascribed as the
fault of the Sec of Labor when he denied
their demurrer to evidence and forthwith
rendered decision on the illegality of the
strike.
 A party who has availed of the
opportunity to present his position paper
cannot claim to have been denied due
process.
 The requirements of due process are
satisfied when the parties to a labor case
are given the opportunity to submit
position papers wherein they are
supposed to attach all the documents that
would prove their claim in the event it will
be decided that no further hearing should
be conducted or that hearing was not
necessary.
The grant of plenary powers to the Secretary
of Labor under Art. 263(g) makes it incumbent for
him to bring about soonest, a fair and just solution
to the differences between the employer and the
employees so that the damage such labor dispute
might cause upon the national interest may be
minimized as much as possible, if not totally
averted, by avoiding stoppage of work or any
lagging of the activities of the industry or the
possibility of these contingencies which might
cause detriment to such national interest.
NEGATING THE PETITIONERS’ VESTED RIGHT TO
BACKWAGES
Since, as correctly found by the Secretary of
Labor, the strikers were not illegally dismissed, the
COMPANY is under no obligation to pay backwages
to them. It is simply inconsistent, nay, absurd, to
award backwages when there is no finding of
illegal dismissal (Filflex Industrial and
Manufacturing Corporation, 286 SCRA 245) when
the record shows that the striking workers did not
comply with lawful orders for them to return to
work during said periods of time.
 In fact, the Secretary of Labor observed
that while “it was obligatory on the part of
both parties to restore, in the meantime,
the status quo obtaining in the
workplace”, the same “was not possible
considering the strikers had defied the
return-to-work Order of this Office”. With
such blatant disregard by the strikers of
official edicts ordering their “temporary
reinstatement”, there is no basis to award
them backwages corresponding to said
time frames. Otherwise, they will recover
something they have not or could not
have earned by their willful defiance of
the return-to-work order, a patently
incongruous and unjust situation (Santos
v. National Labor Relations Commission,
154 SCRA 166).
The same view holds with respect to the
award of financial assistance or separation pay.
The assumption for granting financial assistance or
separation pay, which is, that there is an illegally
dismissed employee and that illegally dismissed
employee would otherwise have been entitled to
reinstatement, is not present in the case at
bench.
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Labor Relations
 We are of course aware that financial
assistance may be allowed as a measure
of social justice in exceptional
circumstances and as an equitable
concession. We are likewise mindful that
financial assistance is allowed only in
those instances where the employee is
validly dismissed for causes other than
serious misconduct or those reflecting on
his moral character
o However, the attendant facts
show that such exceptional
circumstances do not obtain in
the instant cases to warrant the
grant of financial assistance to
the striking workers.
o To our mind, the strikers’ open
and willful defiance of the
assumption order dated
September 16, 1995 constitute
serious misconduct as well as
reflective of their moral
character, hence, granting
financial assistance to them is
not and cannot be justified
Interphil Laboratories Union v. Interphil
Laboratories (2001)
On the matter of the authority and jurisdiction
of the Secretary of Labor and Employment to rule
on the illegal strike committed by petitioner union,
it is undisputed that the petition to declare the
strike illegal before Labor Arbiter was filed long
before the Secretary of Labor issued the
assumption order on 14 February 1994.
 However, it cannot be denied that the
issues of "overtime boycott" and "work
slowdown" amounting to illegal strike
before Labor Arbiter are intertwined with
the labor dispute before the Labor
Secretary.
 In fact, petitioner union even asked Labor
Arbiter to suspend the proceedings before
him and consolidate the same with the
case before the Secretary of Labor. When
Acting Labor Secretary Brillantes ordered
Labor Arbiter Caday to continue with the
hearing of the illegal strike case, the
parties acceded and participated in the
proceedings, knowing fully well that there
was also a directive for Labor Arbiter
Caday to thereafter submit his report and
recommendation to the Secretary. As the
appellate court pointed out, the
subsequent participation of petitioner
union in the continuation of the hearing
was in effect an affirmation of the
jurisdiction of the Secretary of Labor.
The appellate court also correctly held that the
question of the Secretary of Labor’s jurisdiction
over labor and labor-related disputes was already
settled in International Pharmaceutical, Inc. vs.
Hon. Secretary of Labor and ALU where the Court
declared:
 In the present case, the Secretary was
explicitly granted by Article 263(g) of the
Labor Code the authority to assume
jurisdiction over a labor dispute causing
or likely to cause a strike or lockout in an
industry indispensable to the national
interest, and decide the same accordingly.
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Necessarily, this authority to assume
jurisdiction over the said labor dispute
must include and extend to all questions
and controversies arising therefrom,
including cases over which the labor
arbiter has exclusive jurisdiction.
Petitioner union maintained that the Labor
Arbiter and the appellate court disregarded the
"parol evidence rule" when they upheld the
allegation of respondent company that the work
schedule of its employees was from 6 a.m. to 6
p.m. and from 6 pm to 6 am.
 The reliance on the parol evidence rule is
misplaced. In labor cases pending before
the Commission or the Labor Arbiter, the
rules of evidence prevailing in courts of
law or equity are not controlling.
 Rules of procedure and evidence are not
applied in a very rigid and technical sense
in labor cases. Hence, the Labor Arbiter is
not precluded from accepting and
evaluating evidence other than, and even
contrary to, what is stated in the CBA.
7. OPTION – SUBMIT CASE VOLUNTARY
ARBITRATION AFTER CERTIFICATION
Art. 263
Strikes, picketing and lockouts.
(h) Before or at any stage of the compulsory
arbitration process, the parties may opt to submit
their dispute to voluntary arbitration.
8. COMPULSORY ARBITRATION AND LABOR
RIGHTS
Philtread Workers Union v. Confessor (1997)
Petitioners contend that Article 263 (g) of the
Labor Code violates the workers’ right to strike
which is provided for by Section 3, Article XIII of
the Constitution. The assailed order of the
Secretary of Labor, which enjoins the strike, is an
utter interference of the workers’ right to self-
organization, to manage their own affairs, activities
and programs, and therefore is illegal. The order
is likewise contrary to Article 3 of the International
Labor Organization Convention No. 87, which
specifically prohibits public authorities from
interfering in purely union matters, viz.:
“Article 3.
1. Workers’ and Employers’
organizations shall have the right to
draw up their constitutions and rules, to
elect their representatives in full
freedom, to organize their
administration and activities and to
formulate their programs.
2. The public authorities shall refrain
from any interference which would
restrict this right or impede the lawful
exercise thereof.
A cursory reading of Article 263 (g) allegedly
shows that the power of the Secretary of Labor to
assume jurisdiction or to certify a dispute for
compulsory arbitration is strictly restricted to cases
involving industries that are indispensable to
national interest.
Petitioners posit that the instant labor dispute
does not adversely affect the national interest.
The tire industry has long ceased to be a
government protected industry and, moreover,
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
Philtread Tire and Rubber Corporation is not
indispensable to the national interest. The strike
in Philtread will not adversely affect the supply of
tires in the market and the supply of imported
tires is more than sufficient to meet the market
requirements.
Held: The petition is devoid of merit. On the
issue of the constitutionality of Article 263 (g), the
same had already been resolved in Union of
Filipino Employees vs. Nestle Philippines, Inc., to
wit:
 “In the case at bar, no law has ever been
passed by Congress expressly repealing
Articles 263 and 264 of the Labor Code.
Neither may the 1987 Constitution be
considered to have impliedly repealed the
said Articles considering that there is no
showing that said articles are inconsistent
with the said Constitution. Moreover, no
court has ever declared that the said
articles are inconsistent with the 1987
Constitution.
 On the contrary, the continued validity
and operation of Articles 263 and 264 of
the Labor Code has been recognized by
no less than the Congress of the
Philippines when the latter enacted into
law R.A. 6715, otherwise known as
Herrera law, Section 27 of which
amended paragraphs (g) and (l) of Article
263 of the Labor Code.
 At any rate, it must be noted that Articles
263 (g) and 264 of the Labor Code have
been enacted pursuant to the police
power of the State, which has been
defined as the power inherent in a
government to enact laws, within
constitutional limits, to promote the
order, safety, health, morals and general
welfare of society (People vs. Vera Reyes,
67 Phil. 190).
Article 263 (g) of the Labor Code does not
violate the workers’ constitutional right to strike.
The foregoing article clearly does not interfere with
the workers’ right to strike but merely regulates
it, when in the exercise of such right, national
interests will be affected.
 The rights granted by the Constitution are
not absolute.
 They are still subject to control and
limitation to ensure that they are not
exercised arbitrarily. The interests of
both the employers and employees are
intended to be protected and not one of
them is given undue preference.
The Secretary of Labor acts to maintain
industrial peace. Thus, his certification for
compulsory arbitration is not intended to impede
the workers’ right to strike but to obtain a speedy
settlement of the dispute.
We do not agree with the petitioners that the
respondent company is not indispensable to
national interest considering that the tire industry
has already been liberalized. Philtread supplies
22% of the tire products in the country. Moreover,
it employs about 700 people. As observed by the
Secretary of Labor, viz.:
 “The Company is one of the tire
manufacturers in the country employing
more or less 700 workers. Any work
disruption thereat, as a result of a labor
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dispute will certainly prejudice the
employment and livelihood of its workers
and their dependents. Furthermore, the
labor dispute may lead to the possible
closure of the Company and loss of
employment to hundreds of its workers.
This will definitely aggravate the already
worsening unemployment situation in the
country and discourage foreign and
domestic investors from further investing
in the country. There is no doubt,
therefore, that the labor dispute in the
Country is imbued with national interest.
 At this point in time when all government
efforts are geared towards economic
recovery and development by encouraging
both foreign and domestic investments to
generate employment, we cannot afford
to derail the same as a result of a labor
dispute considering that there are
alternative dispute resolution machineries
available to address labor problems of this
nature.
11.05 VOLUNTARY ARBITRATION
1. DEFINED
Manila Central Line Corp. v. manila Central
Line Free Workers Union (1998)
Despite the fact that it agreed with the union
to submit their dispute to the labor arbiter for
arbitration, petitioner questions the jurisdiction of
the labor arbiter to render the decision in question.
Petitioner contends that the policy of the law now
is to encourage resort to conciliation and voluntary
arbitration as Art 250(e) of the Labor Code
provides.
 Indeed, the Labor Code formerly provided
that if the parties in collective bargaining
fail to reach an agreement, the BLR
should call them to conciliation meetings
and, if its efforts were not successful,
certify the dispute to a labor arbiter for
compulsory arbitrarion.
But this was changed by R.A.6715 which took
effect on March 21, 1989.
 Art 250(e) of the Labor Code now
provides that if effects of conciliation fail,
the Board shall “encourage the parties to
submit their case to a voluntary
arbitrator.” With specific reference to
cases involving deadlocks in collective
bargaining, Art. 262 provides:
 Jurisdiction over other labor disputes
– The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon
agreement of the parties, shall also
hear and decide all other labor
disputes including unfair labor
practices and bargaining deadlocks.
This is what the parties did in this case. After
the Board failed to resolve the bargaining deadlock
between parties, the union filed a petition for
compulsory arbitration in the Arbitration Branch of
the NLRC. Petitioner joined the petition and the
case was submitted for decision.
 Although the union’s petition was for
“compulsory arbitration,” the
subsequent agreement of petitioner to
submit the matter for arbitration in
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effect made the arbitration a voluntary
one.
 The essence of voluntary arbitration, after
all is that it is by agreement of the
parties, rather than compulsion of law,
that a matter is submitted for arbitration.
It does not matter that the person chosen
as arbitrator is a labor arbiter who, under
Art 217 of the Labor Code, is charged
with the compulsory arbitration of certain
labor cases. There is nothing in the law
that prohibits these labor arbiters from
also acting as voluntary arbitrators as
long as the parties agree to have him
hear and decide their dispute.
Moreover, petitioner must be deemed to be
estopped from questioning the authority of Labor
Arbiter, to act as voluntary arbitrator and render a
decision in this case. Petitioner agreed together
with the union, to refer their dispute for arbitration
to him. It was only after the decision was
rendered that petitioner raised the question of lack
of jurisdiction.
2. BASIS FOR VOLUNTARY ARBITRATION
AND RATIONALE
1987 Constitution. Art. XIII, Sec. 3
x x x 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.
3. PROCESS ENCOURAGEMENT/PROMOTION
Establishing Machinery Dispute Settlement –
Collective Bargaining Agreement and Time
Frame
Art. 260
Grievance Machinery and Voluntary Arbitration.—
The parties to a Collective Bargaining Agreement
shall include therein provisions that will ensure the
mutual observance of its terms and conditions.
They shall establish a machinery for the
adjustment and resolution of grievances arising
from the interpretation of their Collective
Bargaining Agreement and those arising from the
interpretation or enforcement of company
personnel policies.
All grievances submitted to the grievance
machinery which are not settled within 7 month
calendar days from the date of its submission shall
automatically be referred to voluntary arbitration
prescribed in the Collective Bargaining Agreement.
xxx
4. ARBITRABLE ISSUES
Art. 261
Jurisdiction of Voluntary Arbitrators or panel of
Voluntary Arbitrators.—
The voluntary arbitrators shall have ORIGINAL
AND EXCLUSIVE jurisdiction to hear and decide all
unresolved grievances arising from the
interpretation or implementation of the Collective
Bargaining Agreement and those arising from the
interpretation and enforcement of company
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personnel policies referred to in the immediately
preceding article.
 Accordingly, violations of a CBA,
except those which are gross in
character, shall no longer be treated
as unfair labor practice and shall be
resolved as grievances under the
CBA.
 For purposes of this article, gross
violations of CBA shall mean flagrant
and/ or malicious refusal to comply
with the economic provisions of such
agreement.
The Commission, its Regional Offices and the
Regional Directors of the apartment of Labor and
employment shall not entertain disputes and
grievances or matters under the exclusive and
original jurisdiction of the Voluntary Arbitrators or
panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the
Grievance machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement.
Art. 262
Jurisdiction over other labor disputes.—
The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties,
 shall also hear and decide all other
labor disputes including unfair labor
practices and bargaining deadlocks.
Rights Disputes v. Interest Disputes
Rights disputes: Claim for violation of a specific
right (Arising from a contract,
ex: CBA or company policies).
Voluntary Arbitrator has original
and exclusive jurisdiction over
this matters.
Interest Disputes: These ponders on the questions
“what should be included in the
CBA.” Strictly speaking, the
parties may choose a voluntary
arbitrator to decide on terms and
conditions of employment, but
that is impracticable because it
will be a value judgment of the
arbitrator and not the parties.
5. ARBITRATOR
SELECTION
Art. 260
x x x. For this purpose, parties to a Collective
Bargaining Agreement shall name and designate in
advance a Voluntary Arbitrator or panel of
Voluntary Arbitrators,
 or include in the agreement the
procedure for the selection of such
Voluntary Arbitrator or panel of
voluntary Arbitrators, preferably from
the listing of qualified Voluntary
Arbitrators duly accredited by the
Board.
 In case the parties fail to select a
Voluntary Arbitrators, the Board shall
designate the Voluntary Arbitrators,
as may be necessary, pursuant to
the selection procedure agreed
upon in the Collective Bargaining
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Agreement, which shall act with the
same force and effect as if the
Arbitrator or panel of Arbitrators has
been selected by the parties as
prescribed.
JURISDICTION
Viviero v. Court of appeals (2000)
Private respondents attempt to justify the
conferment of jurisdiction over the case on the
Voluntary Arbitrator on the ground that the issue
involves the proper interpretation and
implementation of the Grievance Procedure found
in the CBA.
They point out that when petitioner sought the
assistance of his Union to avail of the grievance
machinery, he in effect submitted himself to the
procedure set forth in the CBA regarding
submission of unresolved grievances to a
Voluntary Arbitrator.
Held: The argument is untenable. The case is
primarily a termination dispute.
 It is clear from the claim/assistance
request form submitted by petitioner to
AMOSUP that he was challenging the
legality of his dismissal for lack of cause
and lack of due process.
 The issue of whether there was proper
interpretation and implementation of the
CBA provisions comes into play only
because the grievance procedure provided
for in the CBA was not observed after he
sought his Union’s assistance in
contesting his termination.
 Thus, the question to be resolved
necessarily springs from the primary issue
of whether there was a valid termination;
without this, then there would be no
reason to invoke the need to interpret
and implement the CBA provisions
properly.
In San Miguel Corp. v. National Labor
Relations Commission this Court held that the
phrase "all other labor disputes" may include
termination disputes provided that the agreement
between the Union and the Company states "in
unequivocal language that [the parties] conform to
the submission of termination disputes and unfair
labor practices to voluntary arbitration."
 Ergo, it is not sufficient to merely say that
parties to the CBA agree on the principle
that "all disputes" should first be
submitted to a Voluntary Arbitrator. There
is a need for an express stipulation in the
CBA that illegal termination disputes
should be resolved by a Voluntary
Arbitrator or Panel of Voluntary
Arbitrators, since the same fall within a
special class of disputes that are generally
within the exclusive original jurisdiction of
Labor Arbiters by express provision of
law.
 Absent such express stipulation, the
phrase "all disputes" should be construed
as limited to the areas of conflict
traditionally within the jurisdiction of
Voluntary Arbitrators, i.e., disputes
relating to contract-interpretation,
contract-implementation, or interpretation
or enforcement of company personnel
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policies. Illegal termination disputes - not
falling within any of these categories -
should then be considered as a special
area of interest governed by a specific
provision of law.
Ludo and Luym Corp v. Saornido (2003)
Petitioner contends that the appellate court
gravely erred when it upheld the award of benefits
which were beyond the terms of submission
agreement. Petitioner asserts that the arbitrator
must confine its adjudication to those issues
submitted by the parties for arbitration, which in
this case is the sole issue of the date of
regularization of the workers. Hence, the award of
benefits by the arbitrator was done in excess of
jurisdiction.
On the matter of the benefits, respondents
argue that the arbitrator is empowered to award
the assailed benefits because notwithstanding the
sole issue of the date of regularization, standard
companion issues on reliefs and remedies are
deemed incorporated. Otherwise, the whole
arbitration process would be rendered purely
academic and the law creating it inutile.
The jurisdiction of Voluntary Arbitrator or
Panel of Voluntary Arbitrators and Labor Arbiters is
clearly defined and specifically delineated in the
Labor Code. The pertinent provisions of the Labor
Code, read:
Art. 217. Jurisdiction of Labor Arbiters and
the Commission. --- (a) Except as otherwise
provided under this Code the Labor Arbiters
shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar
days after the submission of the case by the
parties for decision without extension, even in
the absence of stenographic notes, the
following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases:
2. Termination disputes;
3. If accompanied with a claim for
reinstatement, those cases that
workers may file involving wage, rates
of pay, hours of work and other terms
and conditions of employment;
4. Claims for actual, moral, exemplary
and other forms of damages arising
from the employer-employee relations;
xxx
Art. 261. Jurisdiction of Voluntary Arbitrators
or panel of Voluntary Arbitrators. — The
Voluntary Arbitrator or panel of Voluntary
Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the Collective Bargaining
Agreement and those arising from the
interpretation or enforcement of company
personnel policies referred to in the
immediately preceding article. Accordingly,
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.
The Commission, its Regional Offices and the
Regional Directors of the Department of Labor
and Employment shall not entertain disputes,
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
grievances or matters under the exclusive and
original jurisdiction of the Voluntary Arbitrator
or panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to
the Grievance Machinery or Voluntary
Arbitration provided in the Collective
Bargaining Agreement.
Art. 262. Jurisdiction over other labor
disputes. — The Voluntary Arbitrator or panel
of Voluntary Arbitrators, upon agreement of
the parties, shall also hear and decide all
other labor disputes including unfair labor
practices and bargaining deadlocks.”
In construing the above provisions, we held in
San Jose vs. NLRC, that the jurisdiction of the
Labor Arbiter and the Voluntary Arbitrator or Panel
of Voluntary Arbitrators over the cases
enumerated in the Labor Code, Articles 217, 261
and 262, can possibly include money claims in one
form or another.
Comparatively, in Reformist Union of R.B. Liner,
Inc. vs. NLRC, compulsory arbitration has been
defined both as “the process of settlement of labor
disputes by a government agency which has the
authority to investigate and to make an award
which is binding on all the parties, and as a mode
of arbitration where the parties are compelled to
accept the resolution of their dispute through
arbitration by a third party .”
While a voluntary arbitrator is not part of the
governmental unit or labor department’s
personnel, said arbitrator renders arbitration
services provided for under labor laws. Generally,
the arbitrator is expected to decide only those
questions expressly delineated by the submission
agreement.
 Nevertheless, the arbitrator can assume
that he has the necessary power to make
a final settlement since arbitration is the
final resort for the adjudication of
disputes.
 In one case, the SC stressed that “xxx the
Voluntary Arbitrator had plenary
jurisdiction and authority to interpret the
agreement to arbitrate and to determine
the scope of his own authority subject
only, in a proper case, to the certiorari
jurisdiction of this Court. The Arbitrator,
as already indicated, viewed his authority
as embracing not merely the
determination of the abstract question of
whether or not a performance bonus was
to be granted but also, in the affirmative
case, the amount thereof.
By the same token, the issue of regularization
should be viewed as two-tiered issue. While the
submission agreement mentioned only the
determination of the date or regularization, law
and jurisprudence give the voluntary arbitrator
enough leeway of authority as well as adequate
prerogative to accomplish the reason for which the
law on voluntary arbitration was created – speedy
labor justice. It bears stressing that the
underlying reason why this case arose is to settle,
once and for all, the ultimate question of whether
respondent employees are entitled to higher
benefits. To require them to file another action for
payment of such benefits would certainly
undermine labor proceedings and contravene the
constitutional mandate providing full protection to
labor.
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PROCEDURE
Art. 262-A
Procedures -
The voluntary Arbitrators or panel of Voluntary
Arbitrators shall have the power to hold hearings,
receive evidences and take whatever action is
necessary to resolve the issue or issues subject of
dispute, including efforts to effect a voluntary
settlement between parties.
All parties to the dispute shall be entitled to attend
the arbitration proceedings. The attendance of any
third party or the exclusion of any witness from the
proceedings shall be determined by the Voluntary
Arbitrator or panel of Voluntary Arbitrators.
Hearing may be adjourned for a cause or upon
agreement by the parties.
Unless the parties agreed otherwise, it shall be
mandatory for the Voluntary Arbitrators or panel of
Voluntary Arbitrators to render an award or
decision within twenty ?(20) calendar days from
the date of submission of the dispute to voluntary
arbitration.
The award or decision shall contain the facts and
the law on which it is based. It shall be final and
executory after ten (10) calendar days from receipt
of the copy of the award or its decision by the
parties. Upon motion of any interested party, the
Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region where
the movant resides, in case of the absence or
incapacity of the voluntary arbitrator or panel of
voluntary arbitrators for any reason, may issue a
writ of execution requiring wither the sheriff of the
Commission or regular Courts or any public official
whom the parties may designate in the submission
agreement to execute the final decision, order, or
award.
NATURE OF OFFICE AND FUNCTION
Nippon Paint Employees Union v. CA (2004)
In the case of Luzon Development Bank vs.
Association of Luzon Development Bank
Employees, this Court ruled that a voluntary
arbitrator partakes of the nature of a “quasi-
judicial instrumentality” and is within the ambit of
Section 9(3) of the Judiciary Reorganization Act, as
amended, which provides:
(3) Exclusive appellate jurisdiction
over all final judgments,
decisions, resolutions, orders or
awards of Regional Trial Courts
and quasi-judicial agencies,
instrumentalities, boards or
commissions, including the
Securities and Exchange
Commission, the Employees’
Compensation Commission and
the Civil Service Commission,
except those falling within the
appellate jurisdiction of the
Supreme Court in accordance
with the Constitution, the Labor
Code of the Philippines under
Presidential Decree No. 442, as
amended, the provisions of this Act,
and of subparagraph (1) of the
third paragraph and subparagraph
(4) of the fourth paragraph of
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Labor Relations
Section 17 of the Judiciary Act
of 1948.
As such, the decisions of a voluntary arbitrator
fall within the exclusive appellate jurisdiction of the
Court of Appeals. Indeed, this Court took this
decision into consideration in approving the 1997
Rules of Civil Procedure, the pertinent provision of
which states as follows:
SECTION 1. Scope. — This Rule shall apply
to appeals from judgments or final orders of
the Court of Tax Appeals and from awards,
judgments, final orders or resolutions of or
authorized by any quasi-judicial agency in
the exercise of its quasi-judicial functions.
Among these agencies are the Civil Service
Commission, Central Board of Assessment
Appeals, Securities and Exchange
Commission, Office of the President, Land
Registration Authority, Social Security
Commission, Civil Aeronautics Board,
Bureau of Patents, Trademarks and
Technology Transfer, National Electrification
Administration, Energy Regulatory Board,
National Telecommunications Commission,
Department of Agrarian Reform under
Republic Act No. 6657, Government Service
Insurance System, Employees
Compensation Commission, Agricultural
Inventions Board, Insurance Commission,
Philippine Atomic Energy Commission, Board
of Investments, Construction Industry
Arbitration Commission, and voluntary
arbitrators authorized by law.
It is elementary in remedial law that the use
of an erroneous mode of appeal is cause for
dismissal of the petition for certiorari and it has
been repeatedly stressed that a petition for
certiorari is not a substitute for a lost appeal.
 This is due to the nature of a Rule 65
petition for certiorari which lies only
where there is “no appeal,” and “no plain,
speedy and adequate remedy in the
ordinary course of law.” As previously
ruled by this Court:
x x x We have time and again reminded
members of the bench and bar that a
special civil action for certiorari under
Rule 65 lies only when "there is no appeal
nor plain, speedy and adequate remedy in
the ordinary course of law." Certiorari can
not be allowed when a party to a case
fails to appeal a judgment despite the
availability of that remedy, certiorari not
being a substitute for lost appeal. The
remedies of appeal and certiorari are
mutually exclusive and not alternative or
successive.
The fact that the NPEU used the Rule 65 modality
as a substitute for a lost appeal is made plainly
manifest by: a) its filing the said petition 45 days
after the expiration of the 15-day reglementary
period for filing a Rule 43 appeal; and b) its
petition which makes specious allegations of
“grave abuse of discretion” but asserts the failure
of the voluntary arbitrator to properly appreciate
facts and conclusions of law.
This salutary rule has been disregarded on
occasion by this Court in instances where valid and
compelling circumstances warrant. However, NPEU
has not provided this Court any compelling reason
why it must disregard the mandate of the Rules of
Court.
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6. AWARDS AND ORDERS
Art. 262-A
xxx
The award or decision shall contain the facts and
the law on which it is based. It shall be final and
executory after ten (10) calendar days from receipt
of the copy of the award or its decision by the
parties.
Upon motion of any interested party,
 the Voluntary Arbitrator or panel of
Voluntary Arbitrators or the Labor
Arbiter in the region where the
movant resides, in case of the
absence or incapacity of the voluntary
arbitrator or panel of voluntary
arbitrators for any reason,
 may issue a writ of execution
requiring the sheriff of the
Commission or regular Courts or any
public official whom the parties may
designate in the submission
agreement to execute the final
decision, order, or award.
Davao Integrated v. Abarquez (1993)
Moreover, petitioner-company's objection to
the authority of the Voluntary Arbitrator to direct
the commutation of the unenjoyed portion of the
sick leave with pay benefits of intermittent workers
in his decision is misplaced. Article 261 of the
Labor Code is clear.
 The questioned directive of the herein
public respondent is the necessary
consequence of the exercise of his arbitral
power as Voluntary Arbitrator under
Article 261 of the Labor Code "to hear and
decide all unresolved grievances arising
from the interpretation or implementation
of the Collective Bargaining Agreement."
 We, therefore, find that no grave abuse of
discretion was committed by public
respondent in issuing the award
(decision). Moreover, his interpretation of
Sections 1 and 3, Article VIII of the 1989
CBA cannot be faulted with and is
absolutely correct.
Citibank Employees Union v. MOLE (1980)
The position of respondent Minister is that
assuming the final and executory character of the
award in question, the same could still be modified
or set aside, as contended by the Solicitor General
in his comment dated August 6, 1979, in
consequence or by reason of the supervening acts
of respondent Minister, citing, in support of such
contention, the cases of Ocampo vs. Sanchez, in
which the SCruled that
"when after judgment has been rendered
and the latter has become final, facts and
circumstances transpire which render its
execution impossible or unjust; the
interested party may ask to modify or later
judgment to harmonize the same with
justice and the facts
Held: After mature deliberation, We have
arrived at the conclusion that the respondent's
position is not well taken.
The situation before Us in the instant case
has no parity with those obtaining in the
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
instances where this Court sanctioned departure
from the terms of a final and executory judgment
by reason of supervening events that would make
literal execution in whole or in part of such
judgment unjust and inequitable. It should be
clear to anyone conversant with the elementary
principles of collective bargaining and the
constitutional injunction assuring the rights of
workers thereto (Sec. 9, Article II, Constitution of
the Philippines) that the terms and conditions of a
collective bargaining agreement constitute the
sacred law between the parties as long as they do
not contravene public order, interest or policy.
 We might say that the prohibition in the
Constitution's Bill of Rights against the
passage or promulgation of any law
impairing the obligation of contracts
applies with perhaps greater force to
collective bargaining agreements,
considering that these deal with the rights
and interests of labor to which the charter
explicitly affords protection. (Sec. 9.
Article 11.)
The award of the arbitrator in this case is not
to be equated with a judicial decision.
In effect, when in relation to a controversy as
to working conditions, which necessarily include
the amount of wages, allowances, bonuses,
overtime pay, holiday pay, etc., the parties submit
their differences to arbitration, they do not seek
any judicial pronouncement technically as such:
 they are merely asking the arbitrator to
fix for them what would be the fair and
just condition or term regarding the
matter in dispute that should govern
further collective bargaining relations
between them.
 Stated differently, the arbitrator's award
when stipulated by the parties to be
conclusive becomes part and parcel of the
CBA. Viewed in this sense, which We are
fully convinced is most consistent with the
principles of collective bargaining, the
subsequent or supervening facts referred
to by the Solicitor General consisting of
acts of none other than the respondent
Minister may not be invoked to alter,
modify, reform, much less abrogate, the
new terms, so to speak, of the collective
bargaining inserted by virtue of the award
of the arbitrator. To do otherwise would
violate the prescription of the Constitution
against impairment of the obligation of
contracts.
We hold that regardless of any law anterior or
posterior to the Arbitrator's award, the collective
bargaining agreement in this case has been
correspondingly amended in a manner that is
unalterable, immovable and immutable like the
rock of Gibraltar, during the lifetime of the said
collective bargaining agreement.
See: Ludo and Luym v. Saornido, supra
7. FINALITY AND EXECUTION OF AWARDS
Imperial Textile Miles, etc. Calica (1992)
When the parties submitted their grievance to
arbitration, they expressly agreed that the decision
of the Voluntary Arbitrator would be final,
executory and unappealable.
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 In fact, even without this stipulation, the
first decision had already become so by
virtue of Article 263 of the Labor Code
making voluntary arbitration awards or
decisions final and executory.
The philosophy underlying this rule was
explained by Judge Freedman in the case of La
Vale Plaza, Inc., v. R.S. Noonan, Inc. thus:
 It is an equally fundamental common law
principle that once an arbitrator has made
and published a final award, his authority
is exhausted and he is functus officio and
can do nothing more in regard to the
subject matter of the arbitration. The
policy which lies behind this is an
unwillingness to permit one who is not a
judicial officer and who acts informally
and sporadically, to re-examine a final
decision which he has already rendered,
because of the potential evil of outside
communication and unilateral influence
which might affect a new conclusion. The
continuity of judicial office and the
tradition which surround judicial conduct
is lacking in the isolated activity of an
arbitrator, although even here the vast
increase in the arbitration of labor
disputes has created the office of the
specialized provisional arbitrator.
(Washington-Baltimore N.G., Loc. 35 v.
Washington Post Co., 442 F. 2d 1234
(19711, pp. 1238-1239)
The case of The Consolidated Bank & Trust
Corporation (SOLIDBANK) v. Bureau of Labor
Relations, et al., this Court held that the Voluntary
Arbitrator lost jurisdiction over the case submitted
to him the moment he rendered his decision.
Therefore, he could no longer entertain a motion
for reconsideration of the decision for its reversal
or modification. Thus:
 By modifying the original award,
respondent arbitrator exceeded his
authority as such, a fact he was well
aware of, as shown by his previous
Resolution of Inhibition wherein he
refused to act on the Union's motion for
reconsideration of the award or decision.
It is true that the present rule makes the
voluntary arbitration award final and executory
after ten calendar days from receipt of the copy of
the award or decision by the parties.
 Presumably, the decision may still be
reconsidered by the Voluntary Arbitrator
on the basis of a motion for
reconsideration duly filed during that
period, Such a provision, being
procedural, may be applied retroactively
to pending actions as have herein a
number cases.
 However, it cannot b e applied to a case
in which the decision had become final
before the new provision took effect, as in
the case at bar.
 RA 6715, which introduced amended
Article 262-A of the Labor Code became
effective on March 11, 1989. The first
decision of the Voluntary Arbitrator was
rendered on July 12, 1988, when the law
in force was Article 263 of the Labor
Code, which provided that: Voluntary
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Labor Relations
arbitration awards or decisions shall be five thousand pesos (P5,000.00)
final, unappealable, and executory. regardless of whether accompanied with
a claim for reinstatement.
 The above-quoted provision did not
expressly fix the time when the Voluntary
It will thus be noted that the Jurisdiction
Arbitrator's decision or award would
conferred by law on a voluntary arbitrator or a
become final. We have held, however,
panel of such arbitrators is quite limited compared
that it would assume the attribute of
to the original jurisdiction of the labor arbiter and
finality upon its issuance, subject only to
the appellate jurisdiction of the NLRC for that
judicial review in appropriate cases.
matter.
 The public respondent exceeded his
The state of our present law relating to
authority when he acted on the Union's
voluntary arbitration provides that "the award or
motion for consideration and reversed his
decision of the Voluntary Arbitrator x x x shall be
original decision. Corollarily his second
final and executory after ten (10) calendar days
decision dated December 14, 1988,
from receipt of the copy of the award or decision
having been rendered in violation of law,
by the parties,"
must be considered null and void and of
 while the "decision, awards, or orders of
no force and effect whatsoever.
the Labor Arbiter are final and executory
unless appealed to the Commission by
8. APPEAL
any or both parties within ten (10)
calendar days from receipt of such
Luzon Development Bank v. Assoc of Luzon
decisions, awards, or orders."
Dev’t Employees (1995)
 Hence, while there is an express mode of
In the Philippine context, the parties to a CBA
appeal from the decision of a labor
are required to include therein provisions for a
arbiter, Republic Act No. 6715 is silent
machinery for the resolution of grievances arising
with respect to an appeal from the
from the interpretation or implementation of the
decision of a voluntary arbitrator.
CBA or company personnel policies.
Yet, past practice shows that a decision or
For this purpose, parties to a CBA shall name
award of a voluntary arbitrator is, more often than
and designate therein a voluntary arbitrator or a
not, elevated to the Supreme Court itself on a
panel of arbitrators, or include a procedure for
petition for certiorari, in effect equating the
their selection, preferably from those accredited by
voluntary arbitrator with the NLRC or the Court of
the National Conciliation and Mediation Board
Appeals.
(NCMB).
 In the view of the Court, this is illogical
Article 261 of the Labor Code accordingly
and imposes an unnecessary burden upon
provides for exclusive original jurisdiction of such
it.
voluntary arbitrator or panel of arbitrators over (1)
 In Volkschel Labor Union, et al. v. NLRC et
the interpretation or implementation of the CBA
al. on the settled premise that the
and (2) the interpretation or enforcement of
judgments of courts and awards of quasi-
company personnel policies. Article 262 authorizes
judicial agencies must become final at
them, but only upon agreement of the parties, to
some definite time, this Court ruled that
exercise jurisdiction over other labor disputes.
the awards of voluntary arbitrators
On the other hand, a labor arbiter under
determine the rights of parties; hence,
Article 217 of the Labor Code has jurisdiction over
their decisions have the same legal effect
the following enumerated cases:
as judgments of a court.
"x x x- (a) Except as otherwise provided
 In Oceanic Bic Division (FFW), et al. v.
under this Code the Labor Arbiters shall have Romero, et al., this Court ruled that "a
original and exclusive jurisdiction to hear voluntary arbitrator by the nature of her
and decide, within thirty (30) calendar days functions acts in a quasi-judicial capacity."
after the submission of the case by the  Under these rulings, it follows that the
parties for decision without extension, even voluntary arbitrator, whether acting solely
in the absence of stenographic notes, the
or in a panel, enjoys in law the status of a
following cases involving all workers,
whether agricultural or non-agricultural:
quasi-judicial agency but independent of,
1. Unfair labor practice cases; and apart from, the NLRC since his
2. Termination disputes; decisions are not appealable to the latter.
3. If accompanied with a claim for Sec. 9 of BP Blg. 129, as amended by RA
reinstatement, those cases that 7902, provides that the Court of Appeals shall
workers may file involving wages, rates exercise: (B) Exclusive appellate jurisdiction over
of pay, hours of work and other terms
all final judgments, decisions, resolutions, orders
and conditions of employment;
4. Claims for actual, moral, exemplary and
or awards of Regional Trial Courts and quasi-
other forms of damages arising from judicial agencies, instrumentalities, boards or
the employer-employee relations; commissions, including the Securities and
5. Cases arising from any violation of Exchange Commission, the Employees
Article 264 of this Code, including Compensation Commission and the Civil Service
questions involving the legality of Commission, except those falling within the
strikes and lockouts,
appellate jurisdiction of the Supreme Court in
6. Except claims for Employees
Compensation, Social Security,
accordance with the Constitution, the Labor Code
Medicare and maternity benefits, all of the Philippines under Presidential Decree No.
other claims, arising from employer- 442, as amended, the provisions of this Act, and of
employee relations, including those of subparagraph (1) of the third paragraph and
persons in domestic or household subparagraph (4) of the fourth paragraph of
service, involving an amount exceeding Section 17 of the Judiciary Act of 1948.

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Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
Assuming arguendo that the voluntary
arbitrator or the panel of voluntary arbitrators may
not strictly be considered as a quasi-judicial
agency, board or commission, still both he and the
panel are comprehended within the concept of a
"quasi-judicial instrumentality."
 It may even be stated that it was to meet
the very situation presented by the quasi
judicial functions of the voluntary
arbitrators here, as well as the
subsequent arbitrator/arbitral tribunal
operating under the Construction Industry
Arbitration Commission, that the broader
term "Instrumentalities" was purposely
included in the above-quoted provision.
 An "Instrumentality" is anything used as a
means or agency. Thus, the terms
governmental "agency" or
instrumentality" are synonymous in the
sense that either of them is a means by
which a government acts, or by which a
certain government act or function is
performed.
 The voluntary arbitrator no less performs
a state function pursuant to a
governmental power delegated to him
under the provisions therefor in the Labor
Code and he falls, therefore, within the
contemplation of the term
instrumentality" in Sec. 9 of BP 129.
 The fact that his functions and powers are
provided for in the Labor Code does not
place him within the exceptions to said
Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein.
o It will be noted that, although the
Employees Compensation
Commission is also provided for in
the Labor Code, Circular No. 1-9 1,
which is the forerunner of the present
Revised Administrative Circular No.
1-95, laid down the procedure for the
appealability of its decisions to the
Court of Appeals under the foregoing
rationalization, and this was later
adopted by Republic Act No. 7902 in
amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the
voluntary arbitrator or panel of arbitrators should
likewise be appealable to the Court of Appeals, in
line with the procedure outlined in Revised
Administrative Circular No. 1-95, just like those of
the quasijudicial agencies, boards and
commissions enumerated therein.
This would be in furtherance of, and
consistent with, the original purpose of Circular
No. 1-91 to provide a uniform procedure for the
appellate review of adjudications of all quasi-
judicial entities18 not expressly excepted from the
coverage of Sec. 9 of B.P. 129 by either the
Constitution or another statute.
 Nor will it run counter to the legislative
intendment that decisions of the NLRC be
reviewable directly by the Supreme Court
since, precisely, the cases within the
adjudicative competence of the voluntary
arbitrator are excluded from the
jurisdiction of the NLRC or the labor
arbiter.
 In the same vein, it is worth mentioning
that under Section 22 of Republic Act No.
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876, also known as the Arbitration Law,
arbitration is deemed a special proceeding
of which the court specified in the contract
or submission, or if none be specified, the
Regional Trial Court for the province or
city in which one of the parties resides or
is doing business, or in which the
arbitration is held, shall have jurisdiction,
A party to the controversy may, at any
time within one (1) month after an award
is made, apply to the court having
jurisdiction for an order confirming the
award and the court must grant such
order unless the award is vacated,
modified or corrected.19
In effect, this equates the award or decision of
the voluntary arbitrator with that of the regional
trial court. Consequently, in a petition for certiorari
from that award or decision, the Court of Appeals
must be deemed to have concurrent jurisdiction
with the Supreme Court. As a matter of policy, this
Court shall henceforth remand to the Court of
Appeals petitions of this nature for proper
disposition.
Unicraft Industries Int’l v. CA (2001)
More specifically, petitioners contend that the
Court of Appeals committed grave abuse of
discretion in affirming the award of separation pay
in favor of private respondent workers, considering
that the respondent court was not in possession of
the records and evidence that would support its
ruling.
It is at once clear from the records that
petitioners were not able to present evidence
before the Voluntary Arbitrator. This is plainly
evident from the Stipulation entered into by the
parties and submitted to the Court of Appeals,
which pertinently states:
b) The case will be referred back to
Voluntary Arbitrator Calipay so that
petitioners will be granted their day in court
to prove their case, the hearing thereat to
treat the following issues:
(1) Whether or not the complainants
mentioned in Exhibit J of the
Decision really filed their
complaints before the NLRC;
(2) Whether or not complainants were
dismissed; if so, whether or not
their dismissals were valid;
(3) Whether or not complainants are
entitled to separation pay, money
claims, attorney’s fees and
litigation costs specified in the
decision, Annex A of the petition;
amd
(4) Whether or not Robert Dino, Cristina
Dino and Michael Dino can be held
liable for the claims of
complainants.
The foregoing is an acknowledgment by both
parties that the proceedings before the Voluntary
Arbitrator have not been completed.
 Despite this, the Court of Appeals
rendered the assailed resolution ordering
the immediate execution of the award of
separation pay and attorney’s fees.
 Prior to that, Voluntary Arbitrator Calipay
filed a comment contending that he had
lost jurisdiction over the case after he
rendered judgment. While under the
Part XI : Alternatives to Use of Economic Force: Conciliation And Arbitration
Labor Relations
law decisions of voluntary arbitrators are
accorded finality, the same may still be 9. COSTS
subject to review, such as here where
there was a violation of petitioners’ right Art. 262-B. Cost of Voluntary Arbitration and
to due process and to be heard. Voluntary Arbitrators fee.—
xxx The parties to a Collective Bargaining Agreement
Inspite of statutory provisions making “final” shall provide therein a proportionate sharing
the decisions of certain administrative agencies, scheme on the cost of the voluntary arbitration
we have taken cognizance of petitions questioning including the Voluntary Arbitrators fee.
these decisions where want of jurisdiction, grave
abuse of discretion, violation of due process, denial The fixing of the fee of the Voluntary Arbitrators,
of substantive justice, or erroneous interpretation whether shouldered wholly by the parties or
of the law where brought to our attention. subsidized by the special voluntary arbitration
The right of due process is fundamental in our fund, shall take into account the following factors:
legal system and we adhere to this principle not a. Nature of the case
for reasons of convenience or merely to comply b. Time consumed in hearing the case
with technical formalities but because of a strong c. Professional Standing of the Voluntary
conviction that every man must have his day in Arbitrator
court. Capacity to Pay of the parties.
Even the Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings, in Rule VI,
Section 6 thereof, explicitly mandates voluntary
arbitrators to observe the requirements of
procedural due process:
 Section 6. Arbitration Hearing. --- In the
conduct of hearing, the arbitrator shall
provide the parties adequate
opportunities to be heard. He shall
control the proceedings and see to it that
proper decorum is observed. He must
render a ruling of the issue/s raised in the
course of the proceedings. He must treat
all significant aspects of the proceedings
as confidential in nature unless
confidentiality is waived by the parties.
At this juncture, it may not be amiss to
restate our previous reminder to labor tribunals in
the weighing of the rights and interest of
employers and employees, viz:

 While the intendment of our laws is

to favor the employee, it in no way
implies that the employer is not
entitled to due process. For a
tribunal such as the NLRC to
wantonly disregard the employer’s
constitutional right to be heard is a
matter that cause great concern to
the Court. Such an action can only
result in public mistrust of our entire
legal system, and we strongly remind
the NLRC of their duty to uphold an
inspire confidence in the same.

It bears stressing that the award of separation

pay carries with it the inevitable conclusion that
complainants were illegally dismissed. That
finding of the Voluntary Arbitrator, however, was
premature and null and void for the reasons
above-stated. Therefore, there is a need to
remand the case to the Voluntary Arbitrator, as
originally stipulated by the parties, to allow
petitioners to present evidence in their behalf.
The Court of Appeals, thus, committed grave
abuse of discretion amounting to lack of
jurisdiction when it ordered the immediate
execution of the Voluntary Arbitrator’s award of
separation pay and attorney’s fees,
notwithstanding that the same was null and void
for violation of petitioner’s right to due process of
law.

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