CASE NO.

1(ian pogi)- Bad faith; inflexible demands; strie amid negotiation

Lakas ng Manggagawang Makabayan vs Marcelo Enterprises
G.R. No. L-38258 November !" !82
#$stice G$errero
!rior to the labor disp"te bet#een $aas and the management of %ar&elo Companies' the
latter had existing &olle&ti(e bargaining agreements (CBAs) #ith the lo&al "nions then existing
#ithin the appropriate bargaining "nits'. )hese existing CBAs #ere entered into b* and bet#een
the parties #hile the aforestated lo&al "nions #ere then affiliated #ith a national federation' the
!hilippine So&ial Se&"rit* $abor +nion (!SS$+). ,hen the aforestated CBAs of the said lo&al
"nions #ere nearing their respe&ti(e expiration dates' the general sit"ation #ithin the rans of
labor #as far from "nited.
)he management of respondent %ar&elo Steel Corporation re&ei(ed letters and proposals
re-"esting the negotiation of a ne# CBAs together #ith a draft thereof' from the lo&al "nions
#hose CBAs are abo"t to expire.
)he management of all the respondent %ar&elo Companies also re&ei(ed a letter from
$A.AS informing management of the affiliation of the %ar&elo +nited $abor +nion (%+$+)
#ith it. /n&l"ded therein #as a 10-points demand for p"rposes of the re-"ested &olle&ti(e
bargaining #ith management.
Confronted #ith a problem of #hom to re&ogni1e as the bargaining representati(e of all
its #orers' the management of all the respondent %ar&elo Companies "nderstandabl* dealt
#ith the problem b* s"ggesting to all to settle the -"estion b* filing a petition %or certi%ication
election before the Co"rt of /nd"strial 2elations' #ith an ass"ran&e that the management #ill
abide b* #hate(er orders the ind"strial &o"rt ma* iss"e thereon.
!SS$+ dem"rred to management3s stand and informed them of its intention to file an
"nfair labor pra&ti&e &ase be&a"se of management3s ref"sal to bargain #ith it' pointedl* stating
that it #as #ith the !SS$+ that the existing CBAs #ere entered into. !SS$+' %+E,A' and
&omplainant $A.AS e(ent"all* s"bmitted their respe&ti(e Noti&es of Strie before the B$2
alleging as reasons therefore harassment of "nion offi&ers and members d"e to "nion affiliation
and ref"sal to bargain.
%+E,A filed a petition for dire&t &ertifi&ation before the ind"strial &o"rt. )here being no
other "nion or interested person appearing before the &o"rt ex&ept the %+E,A' and finding
that %+E,A represented more than the ma4orit* of the #orers in respondent %ar&elo )ire and
2"bber Corporation' the &o"rt granted the petition and &ertified %+E,A of !a"lino $a1aro as
the sole and ex&l"si(e bargaining representati(e of all the reg"lar #orers in said respondent.
$etters of proposal for &olle&ti(e bargaining #ere sent b* !r"den&io 5alandoni of $A.AS
to all the respondent %ar&elo &ompanies. )he management replied expressing their &onformit*
to sit do#n in &onferen&e on the points to be negotiated as soon as $A.AS &an present
e(iden&e of a"thorit* to represent the emplo*ees of respondent &orporations in said &onferen&e.
)he re&ords dis&lose that it #as in the atmosphere of &onstant reser(ation on the part of
management as to the -"estion of representation re&ognition that &omplainant $A.AS and
management sat do#n for CBA negotiations.
6o"r &onferen&es #ere thereafter &ond"&ted b"t the %anagement3s offers #ere not
a&&epted b* &omplainant $A.AS #ho insisted on the grant of all its e&onomi& demands and in
all of the %ar&elo Companies. Onl* the e&onomi& proposals of &omplainant $A.AS #ere the
matters taen "p in all these CBA &onferen&es.
$ess than a #ee after the fo"rth CBA &onferen&e' the &omplainant $A.AS de&lared a
strie against all the respondent %ar&elo Companies. A&ts of (iolen&e and (andalism attended
the pi&eting. /ngress and egress at the respondents3 premises #ere s"&&essf"ll* blo&ed.
2espondent #as able to se&"re an in4"n&tion. )he follo#ing da*' a 72et"rn to ,or Agreement7
#as exe&"ted. B* (irt"e of this agreement' the respondent %ar&elo Companies res"med
operations and the striers #ent ba& to #or. After the res"mption of normal b"siness' the
management of the respondent %ar&elo Companies' the &omplainant $A.AS together #ith the
lo&al $nions res$me& t'eir bargaining negotiations. 6inall*' the negotiations rea&hed its final
stage #hen the management of respondents %ar&elo 2"bber and $atex !rod"&ts' /n&. and
%ar&elo Steel Corporation ga(e the &omplainant $A.AS a &op* of management3s drafts of the
&olle&ti(e bargaining proposals for %6,+ and +N,+' respe&ti(el*.
+nexpe&tedl* and #itho"t filing a noti&e of strie' &omplainant $A.AS de&lared another
strie against the respondent %ar&elo Companies res"lting in the &omplete paral*1ation of the
b"siness of said respondents. Be&a"se of this se&ond strie' &on&iliation &onferen&es #ere again
set for #hi&h neither &omplainant $A.AS nor the lo&al "nions appeared.
)hese then &onstit"te the fa&t"al ba&gro"nd #hen the &omplainant $A.AS' filed before
the respondent &o"rt a &harge for "nfair labor pra&ti&e against the respondent %ar&elo
Companies' alleging non-readmission of the striing members
())*E+ ,ON the emplo*er (%ar&elo Companies) is g"ilt* of +$!. 8No. (it9s the other #a*
aro"nd)
,EL-+
No. On the &ontrar*' it is the "nion #hi&h is g"ilt* of +$! for not onl* is there no
e(iden&e #hi&h sho#s that the respondent %ar&elo Companies #ere seeing for an opport"nit*
to dis&harge these emplo*ees for "nion a&ti(ities' or to dis&riminate against them be&a"se of
s"&h a&ti(ities' b"t there is affirmati(e e(iden&e to establish the &ontrar* &on&l"sion.
Contrar* to the pretensions of &omplainant $A.AS' the respondent %ar&elo Companies
did not ignore the demand for &olle&ti(e bargaining. Neither did the &ompanies ref"se to bargain
at all. ,hat it did #as to apprise $A.AS of the existing con%licting &eman&s %or recognition
as the bargaining representati(e in the appropriate "nits in(ol(ed' and s"ggested the settlement
of the iss"e b* means of the filing of a petition for &ertifi&ation ele&tion before the Co"rt of
/nd"strial 2elations. )his #as not onl* the legall* appro(ed pro&ed"re b"t #as di&tated b* the
fa&t that there #as indeed a legitimate representation iss"e.
/n the fa&e of these fa&ts and in &onformit* #ith the existing 4"rispr"den&e' ,e hold that
there existed no &$ty to bargain collectively wit' t'e complainant L./.) on the part of
said &ompanies. And pro&eeding from this basis' it follo#s that all a&ts (the stries) instigated
b* &omplainant $A.AS #ere &al&"lated' designed and intended to &ompel the respondent
%ar&elo Companies to re&ogni1e or bargain #ith it not#ithstanding that it #as an "n&ertified
"nion. )hese &on&erted a&ti(ities exe&"ted and &arried into effe&t at the instigation and
moti(ation of $A.AS are all illegal and (iolati(e of the emplo*er9s basi& right to bargain
&olle&ti(el* onl* #ith the representati(e s"pported b* the ma4orit* of its emplo*ees in ea&h of
the bargaining "nits
(t is also evi&ent %rom t'e recor&s t'at t'e c'arge o% bargaining in ba& %ait' imp$te& to
t'e respon&ent companies" is 'ar&ly cre&ible. (n %act" s$c' c'arge is vali& as only against
t'e complainant L./.). 0'e parties 'a& a total o% %ive 152 con%erences %or p$rposes o%
collective bargaining. /t is #orth &onsidering that the first strie #as staged less than a #ee
after the fo"rth CBA &onferen&e and #itho"t an* benefit of an* pre(io"s strie noti&e. /n this
&onne&tion' it m"st be stated that the noti&e of strie &o"ld not ha(e been the strie noti&e for
the first strie be&a"se it #as alread* #ithdra#n. )h"s' from these stated fa&ts &an be seen that
the first strie #as held #hile the parties #ere in the pro&ess of negotiating. Nor &an it be
s"stained that the respondent %ar&elo Companies bargained in bad faith sin&e there #ere
proposals offered b* them' b"t the &omplainant $A.AS stood pat on its position that all of their
e&onomi& demands sho"ld be met and that all of these demands sho"ld be granted in all of the
respondent %ar&elo Companies.
0'e companies3 re%$sal to acce&e to t'e &eman&s o% L./.) appears to be 4$sti%ie& since
t'ere is no s'owing t'at t'ese companies were in t'e same state o% %inancial an& economic
a%%airs. 0'ere is reason to believe t'at t'e %irst strike was stage& only %or t'e p$rpose o%
compelling t'e respon&ent Marcelo 5ompanies to acce&e to t'e in%le6ible &eman&s o% t'e
complainant L./.). )he re&ords f"rther establish that after the res"mption of normal
operations follo#ing the first strie and the &onse-"ent 2et"rn-to-#or Agreement' the striing
"nions led b* &omplainant $A.AS and the management of the respondent %ar&elo Companies
res"med their bargaining negotiations.
.ll o% t'ese %acts s'ow t'at it was complainant L./.)" an& not t'e respon&ent Marcelo
5ompanies" w'ic' re%$se& to negotiate in t'e pen&ing collective bargaining process. .ll
t'at t'e %acts s'ow is t'at t'e bargaining position o% complainant L./.) was in%le6ible
an& t'at it was in tine wit' t'is $ncompromising attit$&e t'at t'e strikes were &eclare&'
signifi&antl* after noti&e that management did not or &o"ld not meet all of their 10-points
demand.
5ase No. 2+ 1E&$2 $nresolve& petition %or $nion cancellation
5.7(08L ME-(5.L 5EN0ER" (N5. (s. ,8N. 5RE)EN5(.N8 9. 0R.#.N8
G.R. No. 55:!; #$ne 3;" 2;;5
).N-8<.L-G*0(ERRE=" J.:
Capitol %edi&al Center' /n&.' petitioner' is a hospital #ith address at !ana* A(en"e
&orner S&o"t %agban"a Street' :"e1on Cit*. +pon the other hand' Capitol %edi&al Center
Emplo*ees Asso&iation-Allian&e of 6ilipino ,orers' respondent' is a d"l* registered labor
"nion a&ting as the &ertified &olle&ti(e bargaining agent of the ran-and-file emplo*ees of
petitioner hospital. 2espondent "nion' thro"gh its president 5aime N. /babao' sent petitioner a
letter re-"esting a negotiation of their Colle&ti(e Bargaining Agreement (CBA). /n its repl*'
petitioner' &hallenging the "nion9s legitima&*' ref"sed to bargain #ith respondent. S"bse-"entl*'
petitioner filed #ith the B"rea" of $abor 2elations (B$2) a petition for cancellation of
respondent9s &ertifi&ate of registration .
6or its part' respondent filed #ith the National Con&iliation and %ediation Board
(NC%B)' a noti&e of strie. 2espondent alleged that petitioner9s re%$sal to bargain &onstit"tes
"nfair labor pra&ti&e. ;espite se(eral &onferen&es and efforts of the designated &on&iliator-
mediator' the parties failed to rea&h an ami&able settlement. 2espondent staged a strie.
6ormer Labor )ecretary $eonardo A. :"is"mbing iss"ed an Order ass"ming 4"risdi&tion o(er
the labor disp"te and ordering all striing #orers to ret"rn to #or and the management to
res"me normal operations. )he parties #ere also dire&ted to s"bmit #ithin 1< da*s from re&eipt
of the Order proposals and &o"nter-proposals leading to the &on&l"sion of the &olle&ti(e
bargaining agreement. !etitioner then filed a motion for re&onsideration (%2) b"t #as denied.
)he petitioner filed #ith the S"preme Co"rt a petition for certiorari assailing the $abor
Se&retar*9s Orders b"t #as referred the petition to the Co"rt of Appeals for its appropriate
a&tion and disposition. )he Appellate Co"rt rendered a ;e&ision affirming the Orders of the
Se&retar* of $abor. )he petitioner9s motion for re&onsideration #as denied. =en&e' this petition
for re(ie# on certiorari. (SEC 8 CA 8 SC)
Meantime, the Regional Director issued an Order denying the petition for cancellation of
respondent unions certificate of registration which was affirmed by the Director of the Bureau
of Labor Relations. (2; 8 B$2)
(ss$es+
1. ,hether an emplo*er is allo#ed to s"spend or ref"se to bargain d"ring the penden&* of a
petition for the &an&ellation of the "nion9s registration. >N8.?
>. ,hether the Se&retar* of $abor &an exer&ise his po#ers "nder Arti&le >?@ (g) of the $abor
Code #itho"t obser(ing the re-"irements of d"e pro&ess. >@E)?
R$ling+
1. As aptl* stated b* the Soli&itor Aeneral in his &omment on the petition' the Se&retar* of
$abor &orre&tl* r"led that the pen&ency o% a petition %or cancellation o% $nion registration
&oes not precl$&e collective bargaining. 7)hat there is a pending &an&ellation pro&eedings
against the respondent +nion is not a bar to set in motion the me&hani&s of &olle&ti(e
bargaining. /f a &ertifi&ation ele&tion ma* still be ordered despite the penden&* of a petition to
&an&el the "nion9s registration &ertifi&ate more so sho"ld the &olle&ti(e bargaining pro&ess
&ontin"e despite its penden&*. )he Co"rt emphasi1ed that the ma4orit* stat"s of the respondent
+nion is not affe&ted b* the penden&* of the !etition for Can&ellation pending against it. +nless
its &ertifi&ate of registration and its stat"s as the &ertified bargaining agent are re(oed' the
=ospital is' b* express pro(ision of the la#' d"t* bo"nd to &olle&ti(el* bargain #ith the +nion.
>. /n Magnolia Poultry mployees !nion "s. #anche$' the Co"rt held that the dis&retion to
ass"me 4"risdi&tion ma* be exer&ised b* the )ecretary of $abor and Emplo*ment wit'o$t the
ne&essit* of prior notice or 'earing gi(en to an* of the parties. )he rationale for his primar*
ass"mption of 4"risdi&tion &an 4"stifiabl* rest on his o#n &onsideration of the exigen&* of the
sit"ation in relation to the national interests.
Arti&le >?@ (g) of the $abor Code' as amended' pro(idesB
7A2). >?@. Stries' !i&eting and $o&o"ts. 8
x x x x x x
(g) ,hen' in his opinion' there exists a labor disp"te &a"sing or liel* to &a"se a strie or
lo&o"t in an ind"str* indispensable to the national interest' the Se&retar* of $abor and
Emplo*ment ma* ass"me 4"risdi&tion o(er the disp"te and de&ide it or &ertif* the same to the
Commission for &omp"lsor* arbitration. S"&h ass"mption or &ertifi&ation shall ha(e the effe&t
of a"tomati&all* en4oining the intended or impending strie or lo&o"t as spe&ified in the
ass"mption or &ertifi&ation order. /f one has alread* taen pla&e at the time of ass"mption or
&ertifi&ation' all striing or lo&ed o"t emplo*ees shall immediatel* res"me operations and
readmit all #orers "nder the same terms and &onditions pre(ailing before the strie or lo&o"t.
)he Se&retar* of $abor and Emplo*ment or the Commission ma* see the assistan&e of la#
enfor&ement agen&ies to ens"re &omplian&e #ith this pro(ision as #ell as #ith s"&h orders as he
ma* iss"e to enfor&e the same.
x x x. /n labor disp"tes ad(ersel* affe&ting the &ontin"ed operation of s"&h hospitals' &lini&s or
medi&al instit"tions' it shall be the d"t* of the striing "nion or lo&ing-o"t emplo*er to pro(ide
and maintain an effe&ti(e seletal #orfor&e of medi&al and other health personnel' #hose
mo(ement and ser(i&es shall be "nhampered and "nrestri&ted' as are ne&essar* to ins"re the
proper and ade-"ate prote&tion of the life and health of its patients' most espe&iall* emergen&*
&ases' for the d"ration of the strie or lo&o"t. (n s$c' cases" t'ere%ore" t'e )ecretary o%
Labor an& Employment is man&ate& to imme&iately ass$me" wit'in twenty-%o$r 12A2
'o$rs %rom knowle&ge o% t'e occ$rrence o% s$c' a strike or locko$t" 4$ris&iction over t'e
same or certi%y it to t'e 5ommission %or comp$lsory arbitration. 6or this p"rpose' the
&ontending parties are stri&tl* en4oined to &ompl* #ith s"&h orders' prohibitions andCor
in4"n&tions as are iss"ed b* the Se&retar* of $abor and Emplo*ment or the Commission' "nder
pain of immediate dis&iplinar* a&tion' in&l"ding dismissal or loss of emplo*ment stat"s or
pa*ment b* the lo&ing-o"t emplo*er of ba&#ages' damages and other affirmati(e relief' e(en
&riminal prose&"tion against either or both of them.
@. 5EN alleged interferen&e in the sele&tion of the "nion9s negotiating panel NO;
S"rfa&e bargaining NO;
bl"e-s* bargaining NO
)0.N-.R- 5,.R0ERE- 9.N/ EM7L8@EE) *N(8N 1N*9E2 (s.
0'e ,onorable M.. N(E<E) R. 58NBE)8R" in 'er capacity as )E5RE0.R@ 8B
L.98R .N- EM7L8@MEN0C an& t'e )0.N-.R- 5,.R0ERE- 9.N/
G.R. No. A!DA #$ne :" 2;;A
)he Ban and the +nion signed a D-*ear CBA #ith a pro(ision to renegotiate the terms
thereof on the third *ear. !rior to the expiration of the @-*ear period b"t #ithin the ?< freedom
period' the +nion initiated the negotiations. Before the &ommen&ement of the negotiation' the
+nion' thro"gh ;i(inagra&ia' s"ggested to the Ban9s ="man 2eso"r&e %anager and head of
the negotiating panel' Cielito ;iono' t'at t'e bank lawyers s'o$l& be e6cl$&e& %rom t'e
negotiating team. )he Ban a&&eded.
%ean#hile' ;iono s"ggested to ;i(inagra&ia that 5ose !. +mali' 5r.' the !resident of the
National +nion of Ban Emplo*ees (N+BE)' the federation to #hi&h the +nion #as affiliated'
be ex&l"ded from the +nion9s negotiating panel. =o#e(er' +mali #as retained as a member
thereof. ;iono s"ggested that the negotiation be ept a 7famil* affair.7
)here #ere pro(isions on #hi&h the +nion and the Ban &o"ld not agree. )emporaril*'
the notation 7;E6E22E;7 #as pla&ed therein. )o#ards the end of the meeting' the +nion
manifested that the same sho"ld be &hanged to 7;EA;$OC.E;7. ;iono stated that' in order
for the Ban to mae a better offer' the +nion sho"ld &learl* identif* #hat it #anted to be
in&l"ded in the total e&onomi& pa&age. +mali replied that it was impossible to do so because
the Ban%s counter&proposal was unacceptable. 'e furthered asserted that it would ha"e been
easier to bargain if the atmosphere was the same as before, where both panels trusted each
other.
Ex&ept for the pro(isions on signing bon"s and "niforms' the +nion and the Ban failed
to agree on the remaining e&onomi& pro(isions of the CBA. )he +nion de&lared a &ea&lock
an& %ile& a Notice o% )trike before the NC%B.
On the other hand' the Ban filed a &omplaint for +$! and ;amages before the
Arbitration Bran&h of the N$2C in %anila. )he Ban alleged that the +nion (iolated its d"t* to
bargain' as it did not bargain in good faith. /t &ontended that the +nion demanded (s* high
e&onomi& demands'7 indi&ati(e of bl$e-sky bargaining. 6"rther' the +nion violate& its no
strike- no locko$t cla$se b* filing a noti&e of strie before the NC%B. Considering that the
filing of noti&e of strie #as an illegal a&t' the +nion offi&ers sho"ld be dismissed.
Se&retar* of $abor and Emplo*ment (SO$E) Nieves R. 5on%esor+ dismissed the &harges
of +$! of both the +nion and the Ban' explaining that both parties failed to s"bstantiate their
&laims. =e stated that +$! &harges #o"ld prosper onl* if sho#n to ha(e dire&tl* pre4"di&ed the
p"bli& interest.
)he Ban and the +nion signed the CBA. /mmediatel* thereafter' the #age in&rease #as
effe&ted and the signing bon"ses based on the in&reased #age #ere distrib"ted to the emplo*ees
&o(ered b* the CBA.
0'e *nion+
- /t arg"ed that' ;iono9s s"ggestion that the negotiation be limited as a 7famil* affair7 #as
tantamo"nt to s"ggesting that 6ederation !resident 5ose +mali' 5r. be ex&l"ded from the
+nion9s negotiating panel.
- /t f"rther arg"ed that &ontrar* to the r"ling of the p"bli& respondent' damage or in4"r* to the
p"bli& interest need not be present in order for "nfair labor pra&ti&e to prosper.
- 1)$r%ace bargaining2 )he +nion &ontended that the Ban merel* #ent thro"gh the motions of
&olle&ti(e bargaining #itho"t the intent to rea&h an agreement' and made bad faith proposals
#hen it anno"n&ed that the parties sho"ld begin from a &lean slate. /t explained that of the @E
e&onomi& pro(isions it made' the Ban onl* made ? e&onomi& &o"nterproposals.
- )he +nion also a&&"sed the Ban of ref"sing to dis&lose material and ne&essar* data' e(en
after a re-"est #as made b* the +nion to (alidate its 7guestimates.7
0'e 9ankB
- the +nion #as estopped' &onsidering that it signed the CBA on.
- /t asserted that &ontrar* to the +nion9s allegations' it #as the +nion that &ommitted +$! #hen
negotiator 5ose +mali' 5r. h"rled in(e&ti(es at the Ban9s head negotiator' Cielito ;iono' and
demanded that she be ex&l"ded from the Ban9s negotiating team.
- the +nion engaged in bl$e-sky bargaining and isolated the no strie-no lo&o"t &la"se of the
existing CBA.
())*E)+
#hether or not the +nion #as able to s"bstantiate its &laim of "nfair labor pra&ti&e against the
Ban arising from the latter9s alleged Einter%erenceE #ith its &hoi&e of negotiator ("mali part);
s$r%ace bargaining; maing bad faith non-e&onomi& proposals (not &ompelled to agree);
and ref"sal to f"rnish the +nion #ith &opies of the rele(ant data (no #ritten re-"est) (NO)
=E$;B
(N0ERBEREN5E
/f an emplo*er interferes in the sele&tion of its negotiators or &oer&es the +nion to
ex&l"de from its panel of negotiators a representati(e of the +nion' and if it &an be inferred that
the emplo*er adopted the said a&t to *ield ad(erse effe&ts on the free exer&ise to right to self-
organi1ation or on the right to &olle&ti(e bargaining of the emplo*ees' +$! "nder Arti&le >EF(a)
in &onne&tion #ith Arti&le >E@ of the $abor Code is &ommitted. /n order to sho# that the
emplo*er &ommitted +$! "nder the $abor Code' s"bstantial e(iden&e is re-"ired to s"pport the
&laim. S"bstantial e(iden&e has been defined as s"&h rele(ant e(iden&e as a reasonable mind
might a&&ept as ade-"ate to s"pport a &on&l"sion.
)he &ir&"mstan&es that o&&"rred d"ring the negotiation &o N80 s'ow that the s"ggestion
made b* ;iono to ;i(inagra&ia is an anti-"nion &ond"&t from #hi&h it &an be inferred that the
Ban &ons&io"sl* adopted s"&h a&t to *ield ad(erse effe&ts on the free exer&ise of the right to
self-organi1ation and &olle&ti(e bargaining of the emplo*ees' espe&iall* &onsidering that s"&h
#as "ndertaen pre(io"s to the &ommen&ement of the negotiation and sim"ltaneo"sl* #ith
;i(inagra&ia9s s"ggestion that the ban la#*ers be ex&l"ded from its negotiating panel. )he
re&ords sho# that after the initiation of the &olle&ti(e bargaining pro&ess' #ith the in&l"sion of
+mali in the +nion9s negotiating panel' the negotiations p"shed thro"gh. /t is &lear that s"&h
+$! &harge #as merel* an aftertho"ght. )he a&&"sation o&&"rred after the arg"ments and
differen&es o(er the e&onomi& pro(isions be&ame heated and the parties had be&ome fr"strated.
/t happened after the parties started to in(ol(e personalities. /f at all' the s"ggestion made b*
;iono to ;i(inagra&ia sho"ld be &onstr"ed as part of the normal relations and inno&ent
&omm"ni&ations' #hi&h are all part of the friendl* relations bet#een the +nion and Ban.
)*RB.5E 9.RG.(N(NG
)$r%ace bargaining is &e%ine& as Egoing t'ro$g' t'e motions o% negotiatingE wit'o$t
any legal intent to reac' an agreement. )he determination of #hether a part* has engaged in
"nla#f"l s"rfa&e bargaining is "s"all* a diffi&"lt one be&a"se it in(ol(es' at bottom' a -"estion
of the intent of the part* in -"estion' and "s"all* s"&h intent &an onl* be inferred from the
totalit* of the &hallenged part*9s &ond"&t both at and a#a* from the bargaining table. /t in(ol(es
the -"estion of #hether an emplo*er9s &ond"&t demonstrates an "n#illingness to bargain in
good faith or is merel* hard bargaining.
)he min"tes of meetings from &o N80 s'ow that the Ban had an* intention of (iolating
its d"t* to bargain #ith the +nion. 2e&ords sho# that after the +nion sent its proposal to the
Ban on 6ebr"ar* 10' 1GG@' the latter replied #ith a list of its &o"nter-proposals on 6ebr"ar* >E'
1GG@. )hereafter' meetings #ere set for the settlement of their differen&es. )he +nion has not
been able to sho# that the Ban had done a&ts' both at and a#a* from the bargaining table'
#hi&h tend to sho# that it did not #ant to rea&h an agreement #ith the +nion or to settle the
differen&es bet#een it and the +nion. Admittedl*' the parties #ere not able to agree and rea&hed
a &ea&lock. =o#e(er' it is herein emphasi1ed that the &$ty to bargain E&oes not compel
eit'er party to agree to a proposal or reF$ire t'e making o% a concession.E =en&e' the
parties9 fail"re to agree did not amo"nt to +$! "nder Arti&le >EF(g) for (iolation of the d"t* to
bargain.
Re%$sal to %$rnis' in%ormation
)he +nion failed to s"bstantiate its &laim that the Ban ref"sed to f"rnish the information
it needed. ,hile the ref"sal to f"rnish re-"ested information is in itself an "nfair labor pra&ti&e'
and also s"pports the inferen&e of s"rfa&e bargaining' +mali re-"ested the Ban to (alidate its
guestimates on the data of the ran and file. =o#e(er' +mali failed to p"t his re-"est in #riting
as pro(ided for in Arti&le >E>(&) of the $abor Code. 0'e *nion" &i& N80" as t'e Labor 5o&e
reF$ires" sen& a written reF$est %or t'e iss$ance o% a copy o% t'e &ata abo$t t'e 9ank3s
rank an& %ile employees. %oreo(er' as alleged b* the +nion' the fa&t that the Ban made "se
of the aforesaid g"estimates' amo"nts to a (alidation of the data it had "sed in its presentation.
Grave .b$se o% -iscretion
,hile it is tr"e that a sho#ing of pre4$&ice to p$blic interest is not a reF$isite %or *L7
&harges to prosper' it &annot be said that the p"bli& respondent a&ted in &apri&io"s and
#himsi&al exer&ise of 4"dgment' e-"i(alent to la& of 4"risdi&tion or ex&ess thereof. Neither
#as it sho#n that the p"bli& respondent exer&ised its po#er in an arbitrar* and despoti& manner
b* reason of passion or personal hostilit*.
Estoppel
)he appro(al of the CBA and the release of signing bon"s &o not ne&essaril* mean that
the +nion #ai(ed its +$! &laim against the Ban d"ring the past negotiations. After all' the
&on&l"sion of the CBA #as in&l"ded in the order of the SO$E' #hile the signing bon"s #as
in&l"ded in the CBA itself. %oreo(er' the +nion t#i&e filed a motion for re&onsideration
respe&ting its +$! &harges against the Ban before the SO$E.
9l$e-)ky 9argaining
)he +nion is NO) g"ilt* of +$! for engaging in bl"e-s* bargaining or maing
exaggerated or "nreasonable proposals. )he Ban failed to sho# that the e&onomi& demands
made b* the +nion #ere exaggerated or "nreasonable. )he min"tes of the meeting sho# that
the +nion based its e&onomi& proposals on data of ran and file emplo*ees and the pre(ailing
e&onomi& benefits re&ei(ed b* ban emplo*ees from other foreign bans doing b"siness in the
!hilippines and other bran&hes of the Ban in the Asian region.
5ase No. A+ 1E&$2 non reply to proposal is an indi&ation of its bad faithC
59. impose& on employer
/(8/ L8@" &oing b$siness $n&er t'e name an& style )GE-EN (5E 5RE.M 7L.N0 (s.
N.0(8N.L L.98R REL.0(8N) 58MM())(8N 1NLR52 an& 7.M9.N).NG
/(L*).N NG 7.GG.G. 1/(L*).N2
G.R. No. L-5A33A" #an$ary 22" !8:
5*E<.)" J.:
)he !ambansang .il"sang !agga#a (+nion)' a legitimate late labor federation' #as
&ertified in a resol"tion b* the B"rea" of $abor 2elations as the sole and ex&l"si(e bargaining
agent of the ran-and-file emplo*ees of S#eden /&e Cream !lant (Compan*). )he +nion
f"rnished the Compan* #ith t#o &opies of its proposed &olle&ti(e bargaining agreement. At the
same time' it re-"ested the Compan* for its &o"nter proposals. Eli&iting no response to the
aforesaid re-"est' the +nion again #rote the Compan* reiterating its re-"est for &olle&ti(e
bargaining negotiations and for the Compan* to f"rnish them #ith its &o"nter proposals. Both
re-"ests #ere ignored and remained "na&ted "pon b* the Compan*.
)he +nion filed a 7Noti&e of Strie7' #ith the B"rea" of $abor 2elations (B$2) on
gro"nd of "nresol(ed e&onomi& iss"es in &olle&ti(e bargaining. Con&iliation pro&eedings then
follo#ed d"ring the thirt*-da* stat"tor* &ooling-off period. B"t all attempts to#ards an
ami&able settlement failed' prompting the B"rea" of $abor 2elations to &ertif* the &ase to the
National $abor 2elations Commission (N$2C) for &omp"lsor* arbitration p"rs"ant to
!residential ;e&ree No. F>@' as amended. )he labor arbiter' Andres 6idelino' to #hom the &ase
#as assigned' set the initial hearing for April >G' 1G0G. 6or fail"re ho#e(er' of the parties to
s"bmit their respe&ti(e position papers as re-"ired' the said hearing #as &an&elled and reset to
another date. %ean#hile' the +nion s"bmitted its position paper. )he Compan* did not' and
instead re-"ested for a resetting #hi&h #as granted. )he Compan* #as dire&ted ane# to s"bmit
its finan&ial statements for the *ears 1G0?' 1G00' and 1G0F.
Bad faithB )he &ase #as f"rther reset d"e to the #ithdra#al of the Compan*3s &o"nsel of
re&ord. On %a* >E' 1G0F' Att*. 6ort"nato !anganiban formall* entered his appearan&e as
&o"nsel for the Compan* onl* to re-"est for another postponement allegedl* for the p"rpose of
a&-"ainting himself #ith the &ase. %ean#hile' the Compan* s"bmitted its position paper on
%a* >F' 1G0G. ,hen the &ase #as &alled for hearing on 5"ne E' 1G0G as s&hed"led' the
Compan*3s representati(e' %r. Ching' #ho #as s"pposed to be examined' failed to appear.
Att*. !anganiban then re-"ested for another postponement #hi&h the labor arbiter
denied. =e also r"led that the Compan* has #ai(ed its right to present f"rther e(iden&e and'
therefore' &onsidered the &ase s"bmitted for resol"tion. $abor arbiter Andres 6idelino s"bmitted
its report to the National $abor 2elations Commission.
)he N$2C rendered its de&ision de&laring the respondent S#eden /&e Cream g"ilt* of
"n4"stified ref"sal to bargain' in (iolation of Se&tion (g) Arti&le >EF (no# Arti&le >EG)' of !.;.
EE>' as amended. 6"rther' the &ra%t proposal for a &olle&ti(e bargaining agreement sent b* the
+nion to the respondent #as de&lared to be the &olle&ti(e agreement #hi&h sho"ld go(ern the
relationship bet#een the parties. !etitioner assailed the aforesaid de&ision #ith the SC
&ontending that the N$2C a&ted #itho"t or in ex&ess of its 4"risdi&tion or #ith gra(e ab"se of
dis&retion amo"nting to la& of 4"risdi&tion in rendering the &hallenged de&ision #hi&h #as
dismissed the petition for la& of merit. +pon motion of the petitioner' ho#e(er' the 2esol"tion
of dismissal #as re&onsidered and the petition #as gi(en d"e &o"rse.
(ss$e+
,hether the Compan*9s ref"sal to mae &o"nter-proposal to the "nion9s proposed &olle&ti(e
bargaining agreement is an indi&ation of its bad faith. >@E).?
R$ling+
Colle&ti(e bargaining #hi&h is defined as negotiations to#ards a &olle&ti(e agreement'

is one of
the demo&rati& frame#ors "nder the Ne# $abor Code' designed to stabili1e the relation
bet#een labor and management and to &reate a &limate of so"nd and stable ind"strial pea&e. /t is
a m"t"al responsibilit* of the emplo*er and the +nion and is &hara&teri1ed as a legal obligation.
So m"&h so that Arti&le >EG' par. (g) of the $abor Code maes it an "nfair labor pra&ti&e for an
emplo*er to ref"se 7to meet and &on(ene promptl* and expeditio"sl* in good faith for the
p"rpose of negotiating an agreement #ith respe&t to #ages' ho"rs of #or' and all other terms
and &onditions of emplo*ment in&l"ding proposals for ad4"sting an* grie(an&e or -"estion
arising "nder s"&h an agreement and exe&"ting a &ontra&t in&orporating s"&h agreement' if
re-"ested b* either part*.
,hile it is a m"t"al obligation of the parties to bargain' the emplo*er' ho#e(er' is not "nder an*
legal d"t* to initiate &ontra&t negotiation.

)he me&hani&s of &olle&ti(e bargaining is set in
motion onl* #hen the follo#ing 4"risdi&tional pre&onditions are present' namel*'
(1) possession o% t'e stat$s o% ma4ority representation of the emplo*ees3 representati(e in
a&&ordan&e #ith an* of the means of sele&tion or designation pro(ided for b* the $abor Code;
(>) proo% of ma4orit* representation; and
(@) a &eman& to bargain "nder Arti&le >D1' par. (a) of the Ne# $abor Code . ...
all of #hi&h pre&onditions are "ndisp"tedl* present in the instant &ase.
)he SC #as in total &onformit* #ith respondent N$2C3s prono"n&ement that petitioner
Compan* is A+/$)H of "nfair labor pra&ti&e. /t has been ind"bitabl* established that
(1) respondent +nion #as a d"l* &ertified bargaining agent;
(>) it made a definite re-"est to bargain' a&&ompanied #ith a &op* of the proposed Colle&ti(e
Bargaining Agreement' to the Compan* not onl* on&e b"t t#i&e #hi&h #ere left "nans#ered
and "na&ted "pon; and
(@) the Compan* made no &o"nter proposal #hatsoe(er all of #hi&h &on&l"si(el* indi&ate la&
of a sin&ere desire to negotiate.
A Compan*3s re%$sal to make co$nter proposal if &onsidered in relation to the entire
bargaining pro&ess' ma* indi&ate bad faith and this is espe&iall* tr"e #here the +nion3s re-"est
for a &o"nter proposal is left "nans#ered. E(en d"ring the period of &omp"lsor* arbitration
before the N$2C' petitioner Compan*3s approa&h and attit"de-stalling the negotiation b* a
series of postponements" non-appearance at the hearing &ond"&ted' and $n&$e &elay in
s$bmitting its %inancial statements ' lead to no other &on&l"sion ex&ept that it is "n#illing to
negotiate and rea&h an agreement #ith the +nion. !etitioner has not at an* instan&e' e(in&ed
good faith or #illingness to dis&"ss freel* and f"ll* the &laims and demands set forth b* the
+nion m"&h less 4"stif* its opposition thereto.
5ase No. 5 1ian2 same kiok H 59. impose& on employer
-ivine Gor& *niversity o% 0acloban vs. )ecretary o% Labor an& Employment
G.R. No. !!5 )eptember " !!2
#$stice Romero
-ivine Gor& *niversity Employees *nion 1-G*E*2 was certi%ie& as t'e sole an&
e6cl$sive bargaining agent o% t'e -ivine Gor& *niversity (+ni(ersit* for bre(it*). ;,+E+
s"bmitted its &olle&ti(e bargaining proposals. 0'e *niversity replie& an& reF$este& a
preliminary con%erence. =o#e(er' t#o da*s before the s&hed"led &onferen&e' ;,+E+9s
resigned (i&e-president %r. Brigido +rminita (or +rmeneta) #rote a letter addressed to the
+ni(ersit* "nilaterall* #ithdra#ing the CBA proposals. 5onseF$ently" t'e preliminary
con%erence was cancelle&.
After almost @ *ears' ;,+E+' #hi&h had b* then affiliated #ith the Asso&iated $abor
+nion' re-"ested a &onferen&e #ith the +ni(ersit* for the p"rposes of &ontin"ing the &olle&ti(e
bargaining negotiations. )he +ni(ersit* persisted in maintaining silen&e.
-G*E*-.L* %ile& wit' t'e N5M9 o% t'e -8LE a notice o% strike on t'e gro$n&s
o% bargaining &ea&lock an& $n%air labor practice acts" speci%ically" re%$sal to bargain"
&iscrimination an& coercion on 1sic2 employees. )he &onferen&es #hi&h #ere held after the
filing of the noti&e of strie led to the &on&l"sion of an agreement bet#een the +ni(ersit* and
;,+E+-A$+. =o#e(er' it t"rned o"t that an ho"r before the agreement #as &on&l"ded' the
+ni(ersit* had filed a petition for &ertifi&ation ele&tion #ith the 2egion I/// offi&e of the
;epartment of $abor and Emplo*ment.
8n t'e ot'er 'an&" -G*E*-.L*" consonant wit' t'e agreement" s$bmitte& its
collective bargaining proposals. 0'ese were ignore& by t'e *niversity. )hereafter' thro"gh
the (NC%B) of 2egion I///' marathon &on&iliation &onferen&es #ere &ond"&ted b"t to no a(ail.
=en&e' the Se&retar* of $abor 6ranlin ;rilon iss"ed an Order ass"ming 4"risdi&tion o(er the
labor disp"te and dire&ting all striing #orers to report ba& to #or #ithin t#ent*-fo"r (>E)
ho"rs and the management to a&&ept them ba& "nder the same terms and &onditions pre(ailing
prior to the #or stoppage.
())*E+ ,ON the &omplaint for +$! filed b* the +nion is #ith merit.
,EL-+
!etitioner9s "nd"e interest in the resol"tion of the ;,+-/6E+9s motion for inter(ention
be&omes signifi&ant sin&e a &ertifi&ation ele&tion is the sole &on&ern of emplo*ees ex&ept #here
the emplo*er itself has to file a petition %or certi%ication election. B"t on&e an employer has
filed said petition' as the petitioner did in this &ase' its a&ti(e role &eases and it be&omes a mere
bystan&er. An* "n&alled-for &on&ern on the part of the emplo*er ma* gi(e rise to the s"spi&ion
that it is batting for a &ompan* "nion.
.n employer w'o is reF$este& to bargain collectively may %ile a petition %or
certi%ication election any time e6cept $pon a clear s'owing t'at one o% t'ese two instances
e6ists+
1a2 the petition is filed #ithin one year from the date of iss"an&e of a final &ertifi&ation ele&tion
res"lt or
1b2 #hen a bargaining &ea&lock had been s"bmitted to &on&iliation or arbitration or had
be&ome the s"b4e&t of a (alid noti&e of strie or lo&o"t.
,hile there is no -"estion that the petition for &ertifi&ation ele&tion #as filed b* the herein
petitioner after almost fo"r *ears from the time of the &ertifi&ation ele&tion and' therefore' there
is no -"estion as to the timeliness of the petition' the problem appears to lie in the fa&t that the
Se&retar* of $abor had fo"nd that a bargaining &ea&lock e6ists.
. >&ea&lock? is &e%ine& as t'e >co$nteraction o% t'ings pro&$cing entire stoppage+ a
state o% inaction or o% ne$traliIation ca$se& by t'e opposition o% persons or o% %actions 1as
in government or a voting bo&y2+ stan&still.? )here is a deadlo& #hen there is a J&omplete
blo&ing or stoppage res"lting from the a&tion of e-"al and opposed for&es; as' the deadlo& of
a 4"r* or legislat"re.K )he #ord is s*non*mo"s #ith the #ord impasse #hi&h' #ithin the
meaning of the Ameri&an federal labor la#s' Jpres"pposes reasonable effort at good faith
bargaining #hi&h' despite noble intentions' does not &on&l"de in agreement bet#een the
parties.K
A thoro"gh st"d* of the re&ords re(eals that t'ere was no >reasonable e%%ort at goo&
%ait' bargaining? specially on t'e part o% t'e *niversity. /ts indifferent attit"de to#ards
&olle&ti(e bargaining ine(itabl* res"lted in the fail"re of the parties to arri(e at an agreement.
As it #as e(ident that "nilateral mo(es #ere being "ndertaen onl* b* the ;,+E+-A$+' there
#as no J&o"ntera&tionK of for&es or an impasse to spea of. ,hile &olle&ti(e bargaining sho"ld
be initiated b* the "nion' there is a &orresponding responsibilit* on the part of the emplo*er to
respond in some manner to s"&h a&ts. )his is a &lear from the pro(isions of the $abor Code
Arti&le >D<(a) #hi&h statesB a.) #hen a part* desires to negotiate an agreement' it shall ser(e a
#ritten noti&e "pon the other part* #ith a statement of its proposals. )he other part* shall mae
a reply thereto not later than 1< &alendar da*s from re&eipt of s"&h noti&e.
=en&e' petitioner3s &ontention that the ;,+E+-A$+3s proposals ma* not be "nilaterall*
imposed on it on the gro"nd that a &olle&ti(e bargaining agreement is a &ontra&t #herein the
&onsent of both parties is indispensable is de(oid of merit.
A similar arg"ment had alread* been disregarded in the &ase of .io $o* (. N$2C'
#here #e "pheld the order of the N$2C de&laring the $nions &ra%t 59. proposal as t'e
collective agreement w'ic' s'o$l& govern t'e relations'ip between t'e parties. .io $o*
(s. N$2C is appli&able in the instant &ase' &onsidering that the fa&t therein ha(e also been
ind"bitabl* established in this &ase. )hese fa&tors areB
(a) the "nion is the d"l* &ertified bargaining agent;
(b) it made a definite re-"est to bargain s"bmitted its &olle&ti(e bargaining proposals' and
(&) the +ni(ersit* made no f"rther proposal #hatsoe(er.
As #e said in .io $o* (. N$2C' a &ompan*3s ref"sal to mae &o"nter proposal if &onsidered
in relation to the entire bargaining pro&ess' ma* indi&ate bad faith and this is espe&iall* tr"e
#here the +nion3s re-"est for a &o"nter proposal is left "nans#ered
?. 5EN 8 solomoni&; "nion dis&ipline &la"se
M.N(L. ELE50R(5 58M7.N@ (s. 0,E ,8N8R.9LE )E5RE0.R@ 8B L.98R
LE8N.R-8 J*()*M9(NG .N- MER.L58 EM7L8@EE) .N- G8R/ER)
.))85(.0(8N 1MEG.2
G.R. No. 2D5!8 #an$ary 2D" !!!
%E,A informed %E2A$CO of its intention to re-negotiate the terms and &onditions of
their existing 1GG>-1GG0 CBA &o(ering the remaining period of t#o *ears. %E2A$CO
signified its #illingness to re-negotiate and formed a CBA negotiating panel for the p"rpose.
)hereafter' &olle&ti(e bargaining negotiations pro&eeded. =o#e(er' despite the series of
meetings bet#een the negotiating panels of %E2A$CO and %E,A' the parties failed to arri(e
at 7terms and &onditions a&&eptable to both of them.7 %E,A filed a Noti&e of Strie #ith the
NC2 Bran&h of the NC%B of the ;O$E on the gro"nds of bargaining deadlo& and +$!. )he
NC%B then &ond"&ted a series of &on&iliation meetings b"t the parties failed to rea&h an
ami&able settlement. 6a&ed #ith the imminen&e of a strie' %E2A$CO filed an +rgent !etition
#ith the ;O$E pra*ing that the Se&retar* ass"me 4"risdi&tion o(er the labor disp"te and to
en4oin the striing emplo*ees to go ba& to #or. )he $abor Se&retar* granted the petition.
/SS+EB #hether the Se&retar*3s a&tions ha(e been reasonable in light of the parties positions
and the e(iden&e the* presented
=E$;B
)he Se&retar* of $abor3s stat"tor* po#er "nder Art. >?@ (g) of the $abor Code to ass"me
4"risdi&tion o(er a labor disp"te in an ind"str* indispensable to the national interest' and' to
render an a#ard on &omp"lsor* arbitration' does not exempt the exer&ise of this po#er from the
4"di&ial re(ie#.
,e find' based on o"r &onsideration of the parties3 positions and the e(iden&e on re&ord' that the
Se&retar* of $abor disregarded and misappre&iated e(iden&e' parti&"larl* #ith respe&t to the
#age a#ard. )he Se&retar* of $abor apparentl* also a&ted arbitraril* and e(en #himsi&all* in
&onsidering a n"mber of legal points; e(en the Soli&itor Aeneral himself &onsidered that the
)ecretary gravely ab$se& 'is &iscretion on at least three ma4or pointsB
(a) on the signing bon"s iss"e;
(b) on the in&l"sion of &onfidential emplo*ees in the ran and file bargaining "nit' and
(&) in mandating a "nion se&"rit* 7&losed-shop7 regime in the bargaining "nit.
,ages
,e find after &onsidering the re&ords that the Se&retar* gra(el* ab"sed his dis&retion in
maing this #age a#ard be&a"se he disregarded e(iden&e on re&ord. ,here he &onsidered
%E2A$CO3s e(iden&e at all' he apparentl* misappre&iated this e(iden&e in fa(or of &laims that
do not ha(e e(identiar* s"pport. )o o"r mind' the %E2A$CO pro4e&tion had e(er* reason to be
reliable be&a"se it #as based on a&t"al and "ndisp"ted fig"res for the first six months of 1GG?.
On the other hand' the "nion pro4e&tion #as based on a spe&"lation of H"letide &ons"mption
that the "nion failed to s"bstantiate. /n fa&t' as against the "nion3s "ns"bstantiated H"letide
&ons"mption &laim' %E2A$CO add"&ed e(iden&e in the form of histori&al &ons"mption data
sho#ing that a length* &ons"mption does not tend to rise d"ring the Christmas period.
,hile ,e do not see to en"merate in this de&ision the fa&tors that sho"ld affe&t #age
determination' #e m"st emphasi1e that a &olle&ti(e bargaining disp"te s"&h as this one re-"ires
d"e &onsideration and proper balan&ing of the interests of the parties to the disp"te and of those
#ho might be affe&ted b* the disp"te. )o o"r mind' the best #a* in approa&hing this tas
holisti&all* is to &onsider the a(ailable ob4e&ti(e fa&ts' in&l"ding' #here appli&able' fa&tors s"&h
as the bargaining histor* of the &ompan*' the trends and amo"nts of arbitrated and agreed #age
a#ards and the &ompan*3s pre(io"s CBAs' and ind"str* trends in general. As a r"le'
affordabilit* or &apa&it* to pa* sho"ld be taen into a&&o"nt b"t &annot be the sole *ardsti& in
determining the #age a#ard' espe&iall* in a p"bli& "tilit* lie %E2A$CO. (n consi&ering a
p$blic $tility" t'e &ecision maker m$st always take into acco$nt t'e Ep$blic interestE
aspects o% t'e case;
%E2A$CO3s in&ome and the amo"nt of mone* a(ailable for operating expenses L in&l"ding
labor &osts L are s"b4e&t to State reg"lation. ,e m"st also eep in mind that high operating
&osts #ill &ertainl* and e(ent"all* be passed on to the &ons"ming p"bli& as %E2A$CO has
bl"ntl* #arned in its pleadings.
Mi&&le Gro$n& approac'
,e do not ne&essaril* find to be the best method of resol(ing a #age disp"te. %erel*
finding the mid#a* point bet#een the demands of the &ompan* and the "nion' and 7splitting the
differen&e7 is a simplisti& sol"tion that fails to re&ogni1e that the parties ma* alread* be at the
limits of the #age le(els the* &an afford. /t ma* lead to the danger too that neither of the parties
#ill engage in prin&ipled bargaining; the &ompan* ma* eep its position artifi&iall* lo# #hile
the "nion presents an artifi&iall* high position' on the fear that a 7Solomoni&7 sol"tion &annot
be a(oided. )h"s' rather than en&o"rage agreement' a 7middle gro"nd approa&h7 instead
promotes a 7pla* safe7 attit"de that leads to more deadlo&s than to s"&&essf"ll* negotiated
CBAs.
)he re&ord sho#s that %E2A$CO' thro"gho"t its long *ears of existen&e' #as ne(er
remiss in its obligation to#ards its emplo*ees. /n fa&t' as a manifestation of its strong
&ommitment to the promotion of the #elfare and #ell-being of its emplo*ees' it has &onsistentl*
impro(ed their &ompensation pa&age.
E&onomi& /ss"es.
1. C=2/S)%AS BON+S
As a r"le' a bon"s is not a demandable and enfor&eable obligation; it ma* ne(ertheless be
granted on e-"itable &onsiderations as #hen the gi(ing of s"&h bon"s has been the &ompan*3s
long and reg"lar pra&ti&e. )o be &onsidered a Ereg$lar practice"E the gi(ing of the bon"s
sho"ld ha(e been done o(er a long period of time' and m"st be sho#n to ha(e been &onsistent
and deliberate. )he re&ord sho#s that %E2A$CO' aside from &ompl*ing #ith the reg"lar 1@th
month bon"s' has f"rther been gi(ing its emplo*ees an additional Christmas bon"s at the tail-
end of the *ear sin&e 1GFF. )he &onsiderable length of time %E2A$CO has been gi(ing the
spe&ial grants to its emplo*ees indi&ates a "nilateral and (ol"ntar* a&t on its part' to &ontin"e
gi(ing said benefits no#ing that s"&h a&t #as not re-"ired b* la#. /ndeed' a &ompan* pra&ti&e
fa(orable to the emplo*ees has been established and the pa*ments made b* %E2A$CO
p"rs"ant thereto ripened into benefits en4o*ed b* the emplo*ees. Conse-"entl*' the gi(ing of
the spe&ial bon"s can no longer be wit'&rawn b* the &ompan* as this #o"ld amo"nt to a
dimin"tion of the emplo*ee3s existing benefits. A one-month spe&ial bon"s is s"ffi&ient' this
being merel* a genero"s a&t on the part of %E2A$CO.
>. 2/CE S+BS/;H and 2E)/2E%EN) BENE6/)S for 2E)/2EES
)he iss"e re-"ires a finding of fa&t on the legal personalit* of the retirement f"nd. /n the
absen&e of an* e(iden&e on re&ord indi&ating the nat"re of the retirement f"nd3s legal
personalit*' #e r"le that the iss"e sho"ld be remanded to the Se&retar* for re&eption of e(iden&e
as #hether or not the %E2A$CO retirement f"nd is a separate and independent tr"st f"nd. )he
existen&e of a separate and independent 4"ridi&al entit* #hi&h &ontrols an irre(o&able retirement
tr"st f"nd means that these retirement f"nds are be*ond the s&ope of &olle&ti(e bargainingB the*
are administered b* an entit* not a part* to the &olle&ti(e bargaining and the f"nds ma* not be
to"&hed #itho"t the tr"stee3s &onformit*.
@. E%!$OHEES3 COO!E2A)/IE
)he formation of a &ooperati(e is a p"rel* (ol"ntar* a&t "nder this la#' and no part* in
an* &ontext or relationship is re-"ired b* la# to set "p a &ooperati(e or to pro(ide the f"nds
therefor.
E. A=S/!' =%! BENE6/)S 6O2 ;E!EN;EN)S and =O+S/NA E:+/)H $OAN
)he A=S/!' =%! benefits for dependents and the ho"sing e-"it* loan ha(e been the
s"b4e&t of bargaining and arbitral a#ards in the past. ,e do not see an* reason #h* %E2A$CO
sho"ld not no# bargain on these benefits. %E2A$CO ha(e long been extending these benefits
to the emplo*ees and their dependents that the* no# be&ome part of the terms and &onditions of
emplo*ment.
D. S/AN/NA BON+S
)he signing bon"s is a grant moti(ated b* the good#ill generated #hen a CBA is
s"&&essf"ll* negotiated and signed bet#een the emplo*er and the "nion. /n the present &ase' this
good#ill does not exist. ,itho"t the good#ill' the pa*ment of a signing bon"s &annot be
4"stified and an* order for s"&h pa*ment' to o"r mind' &onstit"tes gra(e ab"se of dis&retion.
?. 2E;-C/2C$E-2A)E A$$O,ANCE
An 2C2 allo#an&e is an amo"nt' not in&l"ded in the basi& salar*' that is granted b* the
&ompan* to an emplo*ee #ho is promoted to a higher position grade b"t #hose a&t"al basi&
salar* at the time of the promotion alread* ex&eeds the maxim"m salar* for the position to
#hi&h he or she is promoted. As an allo#an&e' it applies onl* to spe&ifi& indi(id"als #hose
salar* le(els are "ni-"e #ith respe&t to their ne# and higher positions. )he integration of the
2C2 allo#an&e in the basi& salar* of the emplo*ees had &onsistentl* been raised in the past
CBAs (1GFG and 1GG>) ,e do not see an* reason #h* it sho"ld not be in&l"ded in the present
CBA. 6or p"rposes of "niformit*' #e affirm the Se&retar*3s order on the integration of the 2C2
allo#an&e in the basi& salar* of the emplo*ees.
0. S/C. $EAIE 2ESE2IE O6 1D ;AHS
)he si& lea(e reser(e is red"&ed to 1D da*s' #ith an* ex&ess &on(ertible to &ash at the
end of the *ear. )he emplo*ee has the option to a(ail of this &ash &on(ersion or to a&&"m"late
his si& lea(e &redits "p to >D da*s for &on(ersion to &ash at his retirement or separation from
the ser(i&e. )his arrangement is' in fa&t' benefi&ial to %E2A$CO.
F. E<-;AH +N/ON $EAIE
)he thirt* (@<) da*s "nion lea(e granted b* the Se&retar* &onstit"te s"ffi&ient time #ithin
#hi&h the "nion &an &arr* o"t its "nion a&ti(ities s"&h as b"t not limited to the ele&tion of "nion
offi&ers' sele&tion or ele&tion of appropriate bargaining agents' &ond"&t referend"m on "nion
matters and other "nion-related matters in f"rtheran&e of "nion ob4e&ti(es.
G. =/A= IO$)AAEC=/A= !O$EC)O,/NA A$$O,ANCE
)he in&rease in the high-(oltage allo#an&e (from !ED.<< to !DD.<<)' high-pole allo#an&e
(from !@<.<< to !E<.<<)' and to#ing allo#an&e is 4"stified &onsidering the hea(* ris the
emplo*ees &on&erned are exposed to. )he high-(oltage allo#an&e is granted to an emplo*ee
#ho is a"thori1ed b* the &ompan* to a&t"all* perform #or on or near energi1ed bare lines and
b"s' #hile the high-pole allo#an&e is gi(en to those a"thori1ed to &limb poles on a height of at
least ?< feet from the gro"nd to #or thereat. )he to#ing allo#an&e' on the other hand' is
granted to the sto&man dri(ers #ho to# trailers #ith long poles and e-"ipment on board.
1<. BENE6/)S 6O2 CO$$EC)O2S
)he Se&retar*3s r"ling on the (a) l"n&h allo#an&e; (b) dis&onne&tion fee for delin-"ent
a&&o"nts; (&) (ol"ntar* performan&e of other #or at the instan&e of the Compan*; (d) bob&at
belt bags; and (e) red"&tion of -"ota and %A!$ d"ring t*phoons and other for&e ma)eure
e(ents' reasonable &onsidering the riss taen b* the &ompan* personnel in(ol(ed' the nat"re of
the emplo*ees3 f"n&tions and responsibilities and the pre(ailing standard of li(ing.
Non-e&onomi& iss"es.
1. SCO!E O6 )=E BA2AA/N/NA +N/)
Emplo*ees holding a &onfidential position are prohibited from 4oining the "nion of the
ran and file emplo*ees.
*. +##! O, !-+O- #.!R+/0
)he Se&retar* gra(el* ab"sed his dis&retion #hen he ordered a "nion shop. )he
maintenan&e of membership regime sho"ld go(ern at %E2A$CO.
@. )=E CON)2AC)/NA O+) /SS+E
/t is a prerogati(e that management en4o*s s"b4e&t to #ell-defined legal limitations. As
#e ha(e pre(io"sl* held' the &ompan* &an determine in its best b"siness 4"dgment #hether it
sho"ld &ontra&t o"t the performan&e of some of its #or for as long as the emplo*er is
moti(ated b* good faith' and the &ontra&ting o"t m"st not ha(e been resorted to &ir&"m(ent the
la# or m"st not ha(e been the res"lt of mali&io"s or arbitrar* a&tion. =en&e' #e r"le that the
Se&retar*3s added re-"irement' being "nreasonable' restri&ti(e and potentiall* disr"pti(e sho"ld
be str"& do#n.
E. +N/ON 2E!2ESEN)A)/ON /N CO%%/))EES
/t is #orth#hile to note that all the +nion demands and #hat the Se&retar*3s order granted is
that the +nion be allo#ed to parti&ipate in poli&* form"lation and de&ision-maing pro&ess on
matters affe&ting the +nion members3 rights' d"ties and #elfare as re-"ired in Arti&le >11 (A)
(g) of the $abor Code. And this &an onl* be done #hen the +nion is allo#ed to ha(e
representati(es in the Safet* Committee' +niform Committee and other &ommittees of a similar
nat"re. Certainl*' s"&h parti&ipation b* the +nion in the said &ommittees is not in the nat"re of a
&o-management &ontrol of the b"siness of %E2A$CO. ,hat is granted b* the Se&retar* is
parti&ipation and representation. )h"s' there is no impairment of management prerogati(es.
D. /NC$+S/ON O6 A$$ )E2%S AN; CON;/)/ONS /N )=E CBA
)he Se&retar* a&ted in ex&ess of the dis&retion allo#ed him b* la# #hen he ordered the
in&l"sion of benefits' terms and &onditions that the la# and the parties did not intend to be
refle&ted in their CBA.
?. 2E)2OAC)/I/)H O6 )=E CBA
/f no agreement is rea&hed #ithin ? months from the expir* date of the @ *ears that
follo# the CBA exe&"tion' the la# expressl* gi(es the parties L not an*bod* else L the
dis&retion to fix the effe&ti(it* of the agreement. Signifi&antl*' the la# does not spe&ifi&all*
&o(er the sit"ation #here ? months ha(e elapsed b"t no agreement has been rea&hed #ith
respe&t to effe&ti(it*. /n this e(ent"alit*' #e hold that an* pro(ision of la# sho"ld then appl* for
the la# abhors a (a&""m.
One s"&h pro(ision is the principle o% 'ol& over' i.e.' that in the absen&e of a ne# CBA' the
parties m"st maintain the status 1uo and m"st &ontin"e in f"ll for&e and effe&t the terms and
&onditions of the existing agreement "ntil a ne# agreement is rea&hed. /n this manner' the la#
pre(ents the existen&e of a gap in the relationship bet#een the &olle&ti(e bargaining parties.
Another legal prin&iple that sho"ld appl* is that in the absen&e of an agreement bet#een the
parties' then' an arbitrate& 59. takes on t'e nat$re o% any 4$&icial or F$asi-4$&icial
awar&; it operates and ma* be exe&"ted onl* respe&ti(el* "nless there are legal 4"stifi&ations
for its retroa&ti(e appli&ation.
Conse-"entl*' #e find no s"ffi&ient legal gro"nd on the other 4"stifi&ation for the retroa&ti(e
appli&ation of the disp"ted CBA' and therefore hold that the CBA sho"ld be effe&ti(e for a term
of > *ears &o"nted from ;e&ember >F' 1GG? (the date of the Se&retar* of $abor3s disp"ted order
on the parties3 motion for re&onsideration) "p to ;e&ember >0' 1GGG.
5ase No. D+ 1E&$2 .ollecti"e Bargaining 2greements3 2 .B2 which is part of an arbitral
award may be made retroacti"e to the date of e4piration of the pre"ious agreement since 2rt.
*56&2 of the Labor .ode refers to .B2s entered into by the parties as a result of their mutual
agreement, not to arbitral awards.
M.N(L. 5EN0R.L L(NE 58R78R.0(8N (s. M.N(L. 5EN0R.L L(NE BREE
G8R/ER) *N(8N-N.0(8N.L BE-ER.0(8N 8B L.98R an& t'e N.0(8N.L
L.98R REL.0(8N) 58MM())(8N
G.R. No. ;!383" #$ne 5" !!8
MEN-8=." J.:
B.50)+
)his &ase arose o"t of a &olle&ti(e bargaining deadlo& bet#een petitioner and pri(ate
respondent %anila Central $ine 6ree ,orers +nion-National 6ederation of $abor. )he parties3
&olle&ti(e bargaining agreement had expired on %ar&h 1D' 1GFG. As the parties failed to rea&h a
ne# agreement' pri(ate respondent so"ght the aid of the National Con&iliation and %ediation
Board on O&tober @<' 1GFG' b"t the deadlo& remained "nresol(ed.
On 6ebr"ar* G' 1GG<' pri(ate respondent filed a 7!etition for Comp"lsor* Arbitration7 in the
Arbitration Bran&h for the National Capital 2egion of the National $abor 2elations
Commission. At the initial hearing before the labor arbiter' the parties de&lared that &on&iliation
efforts before the NC%B had terminated and it #as their desire to s"bmit the &ase for
&omp"lsor* arbitration.
On September >F' 1GG<' the labor arbiter rendered a de&ision dire&ting the petitioner +N/ON
and the respondent CO%!ANH to exe&"te and formali1e their ne# fi(e-*ear &olle&ti(e
bargaining agreement (CBA) retroa&ti(e to the date of expir* of the 1GF?-1GFG CBA.
!etitioner appealed' b"t its appeal #as denied b* the N$2C. )he N$2C denied petitioner3s
motion for re&onsideration.
())*E+
,hether N$2C erred in affirming the $abor Arbiter3s de&ision holding that the effe&ti(it* of the
renegotiated CBA shall be retroa&ti(e to %ar&h 1D' 1GFG' the expir* date of the old CBA.
R*L(NG+
>N8.?
Art. >D@-A refers to &olle&ti(e bargaining agreements entered into b* the parties as a res"lt of
their m"t"al agreement. )he CBA in this &ase' on the other hand' is part of an arbitral a#ard. As
s"&h' it ma* be made retroa&ti(e to the date of expiration of the pre(io"s agreement.
/ndeed' petitioner has not sho#n that the -"estion of effe&ti(it* #as not in&l"ded in the general
agreement of the parties to s"bmit their disp"te for arbitration. )o the &ontrar*' as the order of
the labor arbiter states' this -"estion #as among those s"bmitted for arbitration b* the parties.
As regards the 7Effe&ti(it* and ;"ration7 &la"se' the &ompan* proposes that the &olle&ti(e
bargaining agreement shall tae effe&t onl* "pon its signing and shall remain in f"ll for&e and
effe&t for a period of fi(e *ears. /he union proposes that the agreement shall ta%e effect
retroacti"e to March 75, 7898, the e4piration date of the old .B2.
And after an e(al"ation of the parties3 respe&ti(e &ontention and arg"ment thereof' it is belie(ed
that of the "nion is fair and reasonable. (t is t'e observation o% t'is .rbitrator t'at in almost
s$bseF$ent 59.s" t'e e%%ectivity o% t'e renegotiate& 59." $s$ally an& most o%ten is ma&e
e%%ective retroactive to t'e &ate w'en t'e imme&iately procee&ing 59. e6pires so as to
give a semblance o% contin$ity. ,ence" %or t'is partic$lar case" it is believe& t'at t'ere is
not'ing wrong a&opting t'e stan& o% t'e $nion" t'at is t'at t'is 59. be ma&e retroactive
e%%ective Marc' 5" !8!.
5ase No. 8 1ian2
NEG 7.5(B(5 0(M9ER K )*77L@ 58M7.N@" 58." (N5. vs NLR5
G.R. No. 2A22A Marc' D" 2;;;
#$stice /ap$nan
B.50)
)he National 6ederation of $abor (N6$' for bre(it*) #as &ertified as the sole and ex&l"si(e
bargaining representati(e of all the reg"lar ran-and-file emplo*ees of Ne# !a&ifi& )imber M
S"ppl* Co.' /n&. N6$ started to negotiate for better terms and &onditions of emplo*ment for the
emplo*ees in the bargaining "nit #hi&h it represented. =o#e(er' the same #as allegedl* met
#ith stiff resistan&e b* petitioner Compan*' so that the former #as prompted to file a &omplaint
for "nfair labor pra&ti&e (+$!) against the latter on the gro"nd of ref"sal to bargain &olle&ti(el*.
$AB Compan* is g"ilt* of +$!.
Compan* appealed to N$2C.
N$2C dismissed the appeal for la& of merit.
+nsatisfied' petitioner Compan* filed a petition for certiorari #ith SC. B"t the Co"rt dismissed
said petition
2e&ords remanded to arbitration bran&h of origin of the exe&"tion of $abor Arbiter
Abd"l#ahid3s Order.
$AB dire&ting petitioner Compan* to pa* the 1E> emplo*ees entitled to the aforesaid benefits
the respe&ti(e amo"nts d"e them "nder the CBA. !etitioner Compan* &omplied; and the
&orresponding -"it&laims #ere exe&"ted.
Not#ithstanding s"&h manifestation' a 7!etition for 2elief7 #as filed in behalf of 1F? of the
pri(ate respondents 7%ariano 5. Ailit and @D< others7
Arg"ments of pri(ate respondentsB the* #ere #rongf"ll* ex&l"ded from en4o*ing the benefits
"nder the CBA sin&e the agreement #ith N6$ and petitioner Compan* limited the CBA3s
implementation to onl* the 1E> ran-and-file emplo*ees en"merated. )he* &laimed that N6$3s
misrepresentations had pre&l"ded them from appealing their ex&l"sion.
N$2CB the 1F? ex&l"ded emplo*ees 7form part and par&el of the then existing ran-and-file
bargaining "nit7 and #ere' therefore' entitled to the benefits "nder the CBA. %2 #as filed b*
petitioner b"t to no a(ail.
=en&e the instant petition.
())*E+
(1) %a* the term of a Colle&ti(e Bargaining Agreement (CBA) as to its e&onomi& pro(isions be
extended be*ond the term expressl* stip"lated therein' and' in the absen&e of a ne# CBA' e(en
be*ond the three-*ear period pro(ided b* la#N -HES
(>) Are emplo*ees hired after the stip"lated term of a CBA entitled to the benefits pro(ided
there"nderN -HES
,EL-+
1. /t is &lear from the abo(e pro(ision of la# that $ntil a new 5ollective 9argaining
.greement 'as been e6ec$te& by an& between t'e parties" t'ey are &$ty-bo$n& to keep t'e
stat$s F$o an& to contin$e in %$ll %orce an& e%%ect t'e terms an& con&itions o% t'e e6isting
agreement. )he la# does not pro(ide for an* ex&eption nor -"alifi&ation as to #hi&h of the
e&onomi& pro(isions of the existing agreement are to retain for&e and effe&t; therefore' it m"st
be "nderstood as en&ompassing all the terms and &onditions in the said agreement. )o r"le
other#ise #o"ld be to &reate a gap d"ring #hi&h no agreement #o"ld go(ern.
>. /n a long line of &ases' this Co"rt has held that #hen a &olle&ti(e bargaining &ontra&t is
entered into b* the "nion representing the emplo*ees and the emplo*er' e(en the non-member
emplo*ees are entitled to the benefits of the &ontra&t. )o a&&ord its benefits onl* to members of
the "nion #itho"t an* (alid reason #o"ld &onstit"te "nd"e dis&rimination against nonmembers.
/t is e(en &on&eded' that a laborer &an &laim benefits from a CBA entered into bet#een the
&ompan* and the "nion of #hi&h he is a member at the time of the &on&l"sion of the agreement'
after he has resigned from said "nion.
G. 5EN
).N M(G*EL 58R78R.0(8N EM7L8@EE) *N(8N-70GG8" represente& by its
7resi&ent R.@M*N-8 ,(78L(08" #R. (s. ,8N. M.. N(E<E) -. 58NBE)8R"
)ecretary o% Labor" -ept. o% Labor K Employment" ).N M(G*EL 58R78R.0(8N"
M.GN8L(. 58R78R.0(8N 1Bormerly" Magnolia 7lant2 an& ).N M(G*EL B88-)"
(N5. 1Bormerly" 9-Meg 7lant2
G.R. No. 2:2 )eptember !" !!:
6AC)SB
San %ig"el Corporation Emplo*ees +nion L !)A,O entered into a Colle&ti(e
Bargaining Agreement (CBA) #ith pri(ate respondent San %ig"el Corporation (S%C). )he
&ompan* #hi&h #as &omposed of fo"r operating di(isions namel*B (1) Beer' (>) !a&aging' (@)
6eeds and $i(esto&s' (E) %agnolia and Agri-b"siness #o"ld "ndergo a restr"&t"ring. %agnolia
and 6eeds and $i(esto& ;i(ision #ere sp"n-off and be&ame t#o separate and distin&t
&orporationsB %agnolia Corporation (%agnolia) and San %ig"el 6oods' /n&. (S%6/).
Not#ithstanding the spin-offs' the CBA remained in for&e and effe&t.
*nionB insisted that the bargaining "nit of S%C sho"ld still in&l"de the emplo*ees of the sp"n-
off &orporationsB %agnolia and S%6/; and that the renegotiated terms of the CBA shall be
effe&ti(e onl* for the remaining period of t#o *ears or "ntil 5"ne @<' 1GGE.
)M5B &ontended that the membersCemplo*ees #ho had mo(ed to %agnolia and S%6/'
a"tomati&all* &eased to be part of the bargaining "nit at the S%C. 6"rthermore' the CBA sho"ld
be effe&ti(e for three *ears in a&&ordan&e #ith Art. >D@-A of the $abor Code.
+nable to agree on these iss"es #ith respe&t to the bargaining "nit and d"ration of the
CBA' petitioner-"nion de&lared a deadlo&. A Noti&e of Strie #as filed against S%C. /n order
to a(ert a strie' S%C re-"ested the NC%B to &ond"&t pre(enti(e mediation. No settlement
#as arri(ed at despite se(eral meetings held bet#een the parties. S%C' %agnolia and S%6/
filed a petition #ith the Se&retar* of $abor pra*ing that the latter ass"me 4"risdi&tion o(er the
labor disp"te in a (ital ind"str*. )he Se&retar* of $abor iss"ed the assailed Order dire&ting'
among others' that the renegotiated terms of the CBA shall be effe&ti(e for the period of three
(@) *ears from 5"ne @<' 1GG>; and that s"&h CBA shall &o(er onl* the emplo*ees of S%C and
not of %agnolia and S%6/.
OAn "rgent motion for lea(e to inter(ene in the &ase #as filed b* the Samahan ng
%ala*ang %anggaga#a-San %ig"el Corporation-6ederation of 6ree ,orers (S%%-S%C-
66,) thro"gh its a"thori1ed representati(e' Elmer S. Armando' alleging that it is one of the
&ontending parties ad(ersel* affe&ted b* the temporar* restraining order. /t then pra*ed for the
lifting of the temporar* restraining order. $ie#ise' Efren Carreon' A&ting !resident of the
S%CE+-!)A,O' filed a petition for the #ithdra#alCdismissal of the petition &onsidering that
the )2O 4eopardi1ed the emplo*ees3 right to &on&l"de a ne# CBA. At the same time' he
&hallenged the legal personalit* of %r. 2a*m"ndo =ipolito' 5r. to represent the +nion as its
president #hen the latter #as alread* offi&iall* dismissed from the &ompan*.P
/ss"esB
1) ,hether or not the d"ration of the renegotiated terms of the CBA is to be effe&ti(e for @
*ears of for onl* > *ears (@ HEA2S)
>) ,hether or not the bargaining "nit of S%C in&l"des also the emplo*ees of the %agnolia and
S%6/ (NO)
1. Arti&le >D@-A is a ne# pro(ision. )his #as in&orporated b* Se&tion >1 of 2ep"bli& A&t
No. ?01D (the =errera-Ieloso $a#) #hi&h too effe&t on %ar&h >1' 1GFG. )his ne# pro(ision
states that the CBA has a term of fi(e 152 years instead of three *ears' before the amendment of
the la# as far as the representation aspe&t is &on&erned. All other pro(isions of the CBA shall
be negotiated not later than three 132 years after its exe&"tion. )he Erepresentation aspectE
refers to the identit* and ma4orit* stat"s of the "nion that negotiated the CBA as the ex&l"si(e
bargaining representati(e of the appropriate bargaining "nit &on&erned. E.ll ot'er provisionsE
simpl* refers to the rest of the CBA' e&onomi& as #ell as non-e&onomi& pro(isions' ex&ept
representation.
)he framers of the la# #anted to maintain ind"strial pea&e and stabilit* b* ha(ing both
management and labor #or harmonio"sl* together #itho"t an* dist"rban&e. )h"s' no o"tside
"nion &an enter the establishment #ithin fi(e (D) *ears and &hallenge the stat"s of the
in&"mbent "nion as the ex&l"si(e bargaining agent. $ie#ise' the terms and &onditions of
emplo*ment (e&onomi& and non-e&onomi&) &an not be -"estioned b* the emplo*ers or
emplo*ees d"ring the period of effe&ti(it* of the CBA. )he CBA is a &ontra&t bet#een the
parties and the parties m"st respe&t the terms and &onditions of the agreement.
)aing it from the histor* of their CBAs' S%C intended to ha(e the terms of the CBA
effe&ti(e for three (@) *ears re&oned from the expiration of the old or pre(io"s CBA
>. %agnolia and S%6/ #ere sp"n-off to operate as distin&t &ompanies. )he transformation
of the &ompanies #as a management prerogati(e and b"siness 4"dgment #hi&h the &o"rts
&annot loo into "nless it is &ontrar* to la#' p"bli& poli&* or morals. Neither &an #e imp"te an*
bad faith on the part of S%C so as to 4"stif* the appli&ation of the do&trine of pier&ing the
&orporate (eil. (n&$bitably" t'ere%ore" Magnolia an& )MB( became &istinct entities wit'
separate 4$ri&ical personalities. 0'$s" t'ey cannot belong to a single bargaining $nit.
%oreo(er' in determining an appropriate bargaining "nit' the test of gro"ping is
m$t$ality or commonality o% interests. )he emplo*ees so"ght to be represented b* the
&olle&ti(e bargaining agent m"st ha(e s"bstantial m"t"al interests in terms of emplo*ment and
#oring &onditions as e(in&ed b* the t*pe of #or the* performed. Considering the spin-offs'
the &ompanies #o"ld &onse-"entl* ha(e their respe&ti(e and distin&ti(e &on&erns in terms of the
nat"re of #or' #ages' ho"rs of #or and other &onditions of emplo*ment. /nterests of
emplo*ees in the different &ompanies perfor&e differ. )he nat"re of their prod"&ts and s&ales of
b"siness ma* re-"ire different sills #hi&h m"st ne&essaril* be &ommens"rated b* different
&ompensation pa&ages. )he different &ompanies ma* ha(e different (ol"mes of #or and
different #oring &onditions. 6or s"&h reason' the emplo*ees of the different &ompanies see the
need to gro"p themsel(es together and organi1e themsel(es into distin&ti(e and different
gro"ps. /t #o"ld then be best to ha(e separate bargaining "nits for the different &ompanies
#here the emplo*ees &an bargain separatel* a&&ording to their needs and a&&ording to their o#n
#oring &onditions.
5ase No. ;+ 1E&$2 2rticle *56&2 of the Labor .ode has a two&fold purpose:one is to
promote industrial stability and predictability, and the other is to assign specific timetables
wherein negotiations become a matter of right and re1uirement3 -othing in 2rticle *56&2
prohibits the parties from wai"ing or suspending the mandatory timetables and agreeing on the
remedies to enforce the same
GER.R-8 B. R(<ER." et al. (s. ,8N. E-G.R-8 E)7(R(0*
G.R. No. 355AD" #an$ary 23" 2;;2
J*()*M9(NG" J.:
B.50)+
!A$ pilots affiliated #ith the Airline !ilots Asso&iation of the !hilippines (A$!A!) #ent on a
three-#ee strie' &a"sing serio"s losses to the finan&iall* beleag"ered flag &arrier. As a res"lt'
!A$9s finan&ial sit"ation #ent from bad to #orse. 6a&ed #ith banr"pt&*' !A$ adopted a
rehabilitation plan and do#nsi1ed its labor for&e b* more than one-third.
!A$ Emplo*ees Asso&iation (!A$EA) #ent on strie to protest the retren&hment meas"res
adopted b* the airline' #hi&h affe&ted 1'FGG "nion members. )he strie ended fo"r da*s later'
#hen !A$ and !A$EA agreed to a more s*stemati& red"&tion in !A$9s #or for&e and the
pa*ment of separation benefits to all retren&hed emplo*ees.
!"bli& respondent Edgardo Espirit"' then the Se&retar* of 6inan&e' #as designated &hairman of
the )as 6or&e. /t #as 7empo#ered to s"mmon all parties &on&erned for &on&iliation' mediation
(for) the p"rpose of arri(ing at a total and &omplete sol"tion of the problem. 7 Con&iliation
meetings #ere then held bet#een !A$ management and the three "nions representing the
airline9s emplo*ees' #ith the )as 6or&e as mediator.
!A$ management s"bmitted to the )as 6or&e an offer b* pri(ate respondent $"&io )an'
Chairman and Chief Exe&"ti(e Offi&er of !A$' of a plan to transfer shares of sto& to its
emplo*ees.
*n&er intense press$re %rom 7.LE. members" t'e $nion3s &irectors s$bseF$ently
resolve& to re4ect 0an3s o%%er.
!A$ &eased its operations and sent noti&es of termination to its emplo*ees.
!A$EA offered a 1<-*ear moratori"m on stries and similar a&tions and a #ai(er of some of the
e&onomi& benefits in the existing CBA. 0an" 'owever" re4ecte& t'is co$nter-o%%er.
)he !A$EA board proposed terms and &onditions' s"b4e&t to ratifi&ation b* the general
membership' in&l"ding the s"spension of the !A$-!A$EA CBA for a period of ten (1<) *ears'
pro(ided that !A$ shall &ontin"e re&ogni1ing !A$EA as the d"l* &ertified bargaining agent of
the reg"lar ran-and-file gro"nd emplo*ees of the Compan*.
!A$ management a&&epted the !A$EA proposal and the ne&essar* referend"m #as s&hed"led.
Of the (otes &ast' ?1Q #ere in fa(or of a&&epting the !A$-!A$EA agreement' #hile @EQ
re4e&ted it.
6i(e da*s later' !A$ res"med domesti& operations. On the same date' se(en offi&ers and
members of !A$EA filed this instant petition to ann"l the agreement entered into bet#een !A$
and !A$EA.
7etitioner3s claims+
R !etitioners &ontended that the &ontro(erted !A$-!A$EA agreement is (oid be&a"se it
abrogated the right of #orers to self-organi1ation and their right to &olle&ti(e bargaining.
!etitioners &laim that the agreement #as not meant merel* to s"spend the existing !A$-!A$EA
CBA' #hi&h expires on September @<' ><<<' b"t also to fore&lose an* renegotiation or an*
possibilit* to forge a ne# CBA for a de&ade or "p to ><<F. /t (iolates the 7prote&tion to labor7
poli&* laid do#n b* the Constit"tion.
R !etitioners s"bmitted that a 1<-*ear CBA s"spension is inordinatel* long' #a* be*ond the
maxim"m stat"tor* life of a CBA' pro(ided for in Arti&le >D@-A. B* agreeing to a 1<-*ear
s"spension' !A$EA' in effe&t' abdi&ated the #orers9 &onstit"tional right to bargain for another
CBA at the mandated time.
())*E+
/s the !A$-!A$EA agreement stip"lating the s"spension of the !A$-!A$EA CBA
"n&onstit"tional and &ontrar* to p"bli& poli&*N
R*L(NG+
>N8.?
A CBA is 7a &ontra&t exe&"ted "pon re-"est of either the emplo*er or the ex&l"si(e bargaining
representati(e in&orporating the agreement rea&hed after negotiations #ith respe&t to #ages'
ho"rs of #or and all other terms and &onditions of emplo*ment' in&l"ding proposals for
ad4"sting an* grie(an&es or -"estions arising "nder s"&h agreement.7 )he primar* p"rpose of a
CBA is the stabili1ation of labor-management relations in order to &reate a &limate of a so"nd
and stable ind"strial pea&e. /n &onstr"ing a CBA' the &o"rts m"st be pra&ti&al and realisti& and
gi(e d"e &onsideration to the &ontext in #hi&h it is negotiated and the p"rpose #hi&h it is
intended to ser(e.
)he assailed !A$-!A$EA agreement #as the res"lt of (ol"ntar* &olle&ti(e bargaining
negotiations "ndertaen in the light of the se(ere finan&ial sit"ation fa&ed b* the emplo*er' #ith
the pe&"liar and "ni-"e intention of not merel* promoting ind"strial pea&e at !A$' b"t
pre(enting the latter9s &los"re.
0'e 5o$rt %o$n& no con%lict between sai& agreement an& .rticle 253-. o% t'e Labor 5o&e.
.rticle 253-. 'as a two-%ol& p$rpose. 8ne is to promote in&$strial stability an&
pre&ictability. /nasm"&h as the agreement so"ght to promote ind"strial pea&e at !A$ d"ring its
rehabilitation' said agreement satisfies the first p"rpose of Arti&le >D@-A. )he other is to assign
spe&ifi& timetables #herein negotiations be&ome a matter of right and re-"irement. Nothing in
Arti&le >D@-A' prohibits the parties from #ai(ing or s"spending the mandator* timetables and
agreeing on the remedies to enfor&e the same.
/n the instant &ase' it #as !A$EA' as the ex&l"si(e bargaining agent of !A$9s gro"nd
emplo*ees' that (ol"ntaril* entered into the CBA #ith !A$. /t #as also !A$EA that (ol"ntaril*
opted for the 1<-*ear s"spension of the CBA. Either &ase #as the "nion9s exer&ise of its right to
&olle&ti(e bargaining. 0'e rig't to %ree collective bargaining" a%ter all" incl$&es t'e rig't to
s$spen& it.
)he a&ts of p"bli& respondents in san&tioning the 1<-*ear s"spension of the !A$-!A$EA CBA
did not &ontra(ene the 7prote&tion to labor7 poli&* of the Constit"tion. )he agreement afforded
f"ll prote&tion to labor; promoted the shared responsibilit* bet#een #orers and emplo*ers; and
the exer&ised "oluntary modes in settling disp"tes' in&l"ding &on&iliation to foster ind"strial
pea&e.
)he Co"rt did not agree that the agreement (iolates the fi(e-*ear representation limit mandated
b* Arti&le >D@-A. +nder said arti&le' the representation limit for the ex&l"si(e bargaining agent
applies onl* #hen there is an extant CBA in f"ll for&e and effe&t. /n the instant &ase' the parties
agreed to s"spend the CBA and p"t in abe*an&e the limit on the representation period.
(n s$m" t'e 7.L-7.LE. agreement is a vali& e6ercise o% t'e %ree&om to contract. *n&er
t'e principle o% inviolability o% contracts g$arantee& by t'e 5onstit$tion" t'e contract
m$st be $p'el&.
5.)E N8. 1ian2
/nit4oy Man$%act$ring vs 7$ra Berrer-5alle4a
G.R. No. 8883. )eptember 23" !!2
#$stice -avi&e" #r.
B.50)+
!etitioner .N/)5OH had a &olle&ti(e bargaining agreement (CBA) #ith the 6ederation of
6ilipino ,orers (66,). )he bargaining "nit &o(ered onl* the reg"lar ran-and-file emplo*ees
of .N/)5OH paid on a dail* or pie&e-rate basis. /t did not in&l"de reg"lar ran-and-file offi&e
and prod"&tion emplo*ees paid on a monthl* basis. )he CBA expired on 1D 5"ne 1GF0. !rior to
its expiration' the 66, #as split into t#o (>) fa&tionsLthe 5ohnn* )an and the Aran1amende1
fa&tions. )he latter e(ent"all* be&ame the Confederation of 6ilipino ,orers (C6,).
Also prior to the expiration of the CBA' the )rade +nion of the !hilippines and Allied
Ser(i&es ()+!AS) filed a petition for the holding of a &ertifi&ation ele&tion among .N/)5OH9s
reg"lar ran-and-file emplo*ees paid on a dail* and pie&e-rate basis. Ex&l"ded #ere the reg"lar
ran-and-file emplo*ees paid on a monthl* basis. /n the &ertifi&ation ele&tion &ond"&ted on 1<
5"ne 1GF0' C6, emerged as the #inner; thereafter' negotiations for a ne# CBA bet#een C6,
and .N/)5OH &ommen&ed.
;"ring penden&* of negotiations' pri(ate respondent .%E+ filed a petition for
&ertifi&ation ele&tion among .N/)5OH9s reg"lar ran-and-file monthl* paid emplo*ees )he
.nit4o* %onthl* Emplo*ees Asso&iation and Confederation of Citi1ens $abor +nion (.%EA-
CC$+)' another "nion existing in the said &ompan*' and petitioner C6, inter(ened therein.
)he petition #as dismissed b* the %ed Arbiter.
.%E+ appealed. !"bli& respondent re(ersed the order of the %ed Arbiter.
.nit4o* and C6, filed separate %2s b"t p"bli& respondent denied on the prin&ipal
gro"nd that altho"gh the monthl*-paid ran-and-file emplo*ees #ere allegedl* in&l"ded
#ithin the s&ope of the ne# CBA' the* are not barred from forming a separate bargaining
"nit.
+nfa1ed b* their defeat before the B$2' .N/)5OH and C6, separatel* filed the instant
petitions.
())*E)+
1. ,hether or not petitioner .N/)5OH9s monthl*-paid reg"lar ran-and-file emplo*ees &an
&onstit"te an appropriate bargaining "nit separate and distin&t from the existing "nit &omposed
of dail* or pie&e-rate paid reg"lar ran-and-file emplo*ee -HES
>. ,hether or not the in&l"sion in the &o(erage of the ne# CBA bet#een .N/)5OH and C6,
of the monthl*-paid ran-and-file emplo*ees bars the holding of &ertifi&ation ele&tion among
the said monthl* paid emplo*ees. -NO
,EL-+
0'e present .rticle 2A5 o% t'e Labor 5o&e e6pressly allows s$pervisory employees
w'o are not per%orming managerial %$nctions to 4oin" assist or %orm t'eir separate $nion
b$t bars t'em %rom members'ip in a labor organiIation o% t'e rank-an&-%ile employees.
/t readsB JA2). >ED. +neligibility of managerial employees to )oin any labor organi$ation3
right of super"isory employees.:Managerial employees are not eligible to )oin, assist or form
any labor organi$ation. #uper"isory employees shall not be eligible for membership in a labor
organi$ation of the ran%&and&file employees but may )oin, assist or form separate labor
organi$ations of their own.;
0'is provision obvio$sly allows more t'an one $nion in a company. E(en Se&tion
>(&)' 2"le I' Boo I of the /mplementing 2"les and 2eg"lations of the $abor Code' #hi&h
sees to implement the poli&*' also re&ogni1es ex&eptions. /t readsB JSEC. >. ,ho ma* file.L
An* legitimate labor organi1ation or the emplo*er' #hen re-"ested to bargain &olle&ti(el*' ma*
file the petition. )he petition' #hen filed b* a legitimate labor organi1ation shall &ontain' among
othersB x x x (&) des&ription of the bargaining "nit #hi&h shall be the emplo*er "nit "nless
&ir&"mstan&es other#ise re-"ire; x x x.K
)he "s"al ex&eption' of &o"rse' is #here the emplo*er "nit has to gi(e #a* to the other
"nits lie the &raft "nit' plant "nit' or a s"bdi(ision thereof; the re&ognition of these ex&eptions
taes into a&&o"nt the poli&* to ass"re emplo*ees of the f"llest freedom in exer&ising their
rights. Other#ise stated' the one &ompan*-one "nion poli&* m"st *ield to the right of the
emplo*ees to form "nions or asso&iations for p"rposes not &ontrar* to la#' to self- organi1ation
and to enter into &olle&ti(e bargaining negotiations' among others' #hi&h the Constit"tion
g"arantees.
6"rthermore' it is not denied that in the bargaining histor* of .N/)5OH' the CBA has
been &onsistentl* limited to the reg"lar ran-and-file emplo*ees paid on a dail* or pie&e-rate
basis. On the other hand' the ran-and-file emplo*ees paid on a monthl* basis #ere ne(er
in&l"ded #ithin its s&ope. 2espondent .%E+9s membership is limited to the latter &lass of
emplo*ees; .%E+ does not see to dislodge C6, as the ex&l"si(e bargaining representati(e
for the former. )he re&ords f"rther dis&lose that in the &ertifi&ation soli&ited b* )+!AS and
d"ring the ele&tions #hi&h follo#ed thereafter' res"lting in the &ertifi&ation of C6, as the
ex&l"si(e bargaining representati(e' the monthl*-paid emplo*ees #ere expressl* ex&l"ded.
)h"s' the negotiations bet#een C6, and .N/)5OH follo#ing s"&h a &ertifi&ation &o"ld onl*
logi&all* refer to the ran-and-file emplo*ees paid on a dail* or pie&e-rate basis. Clearl*
therefore' .N/)5OH and C6, re&ogni1e that insofar as the monthl*-paid emplo*ees are
&on&erned' the latter9s &onstit"ting a separate bargaining "nit #ith the appropriate "nion as sole
bargaining representati(e' &an neither be pre(ented nor a(oided #itho"t infringing on these
emplo*ees9 rights to form a "nion and to enter into &olle&ti(e bargaining negotiations. Stated
differentl*' /N(0#8@ an& 5BG recogniIe t'e %act t'at t'e e6isting bargaining $nit in t'e
%ormer is notLan& 'as never beenLt'e employer $nit. Ai(en this histori&al and fa&t"al
setting' KMEU had the unquestioned and undisputed right to seek certification as the
exclusive bargaining representative for the monthlypaid rankandfile employees .
1>. 5EN
(N-87,(L 0EM0(LE M(LL G8R/ER) *N(8N-70GG8 (s. <8L*N0.R@
.R9(0R.08R 0E8-8R(58 7. 5.L(5. an& (N-87,(L 0EM0(LE M(LL)" (N5.
G.R. No. !:A!; Bebr$ary 3" !!2
6AC)SB
/ndophil )extile %ill ,orers +nion-!)A,O and pri(ate respondent /ndophil )extile %ills'
/n&. exe&"ted a CBA. /n 1GG< or a *ear after the #orers of A&r*li& ha(e been "nioni1ed and a
CBA exe&"ted' the petitioner "nion &laimed that the plant fa&ilities b"ilt and set "p b* A&r*li&
sho"ld be &onsidered as an extension or expansion of the fa&ilities of pri(ate respondent
Compan* p"rs"ant to the CBA.
7etitionerNs contentions+ A&r*li& is part of the /ndophil bargaining "nit. /t #as a de(ise of
respondent Compan* to e(ade the appli&ation of the CBA bet#een petitioner +nion and
respondent Compan*. )he arti&les of in&orporation of the t#o &orporations establish that the
t#o entities are engaged in the same ind of b"siness' #hi&h is the man"fa&t"re and sale of
*arns of (ario"s &o"nts and inds and of other materials of indred &hara&ter or nat"re. )he t#o
&orporations ha(e pra&ti&all* the same in&orporators' dire&tors and offi&ers. /n fa&t' of the total
sto& s"bs&ription of /ndophil A&r*li&' 0<Q of the total s"bs&ription as s"bs&ribed to b*
respondent Compan*.
Respon&ent+ s"bmits that it is a 4"ridi&al entit* separate and distin&t from A&r*li&. )he
existen&e of a bonafide b"siness relationship bet#een A&r*li& and pri(ate respondent is not a
proof of being a single &orporate entit* be&a"se the ser(i&es #hi&h are s"pposedl* pro(ided b*
it to A&r*li& are a"xiliar* ser(i&es or a&ti(ities #hi&h are not reall* essential in the a&t"al
prod"&tion of A&r*li&. /t also pointed o"t that the essential ser(i&es are dis&harged ex&l"si(el*
b* A&r*li& personnel "nder the &ontrol and s"per(ision of A&r*li& managers and s"per(isors.
)he parties 4ointl* re-"ested the p"bli& respondent to a&t as (ol"ntar* arbitrator in the
resol"tion of the pending labor disp"te pertaining to the proper interpretation of the CBA
pro(ision.
/SS+EB #hether or not the operations in /ndophil A&r*li& Corporation are an extension or
expansion of pri(ate respondent Compan* and
#hether or not the ran-and-file emplo*ees #oring at /ndophil A&r*li& sho"ld be re&ogni1ed as
part of' andCor #ithin the s&ope of the bargaining "nit
=E$;B
;e&isions of (ol"ntar* arbitrators are to be gi(en the highest respe&t and a &ertain
meas"re of finalit*' b"t this is not a hard and fast r"le' it does not pre&l"de 4"di&ial re(ie#
thereof #here #ant of 4"risdi&tion' gra(e ab"se of dis&retion' (iolation of d"e pro&ess' denial of
s"bstantial 4"sti&e' or erroneo"s interpretation of the la# #ere bro"ght to o"r attention.
/t sho"ld be emphasi1ed that in rendering the s"b4e&t arbitral a#ard' the (ol"ntar*
arbitrator )eodori&o Cali&a' a professor of the +.!. Asian $abor Ed"&ation Center' no# the
/nstit"te for /nd"strial 2elations' fo"nd that the existing la# and 4"rispr"den&e on the matter'
s"pported the pri(ate respondent3s &ontentions. Contrar* to petitioner3s assertion' p"bli&
respondent &ited fa&ts and the la# "pon #hi&h he based the a#ard. =en&e' p"bli& respondent
did not ab"se his dis&retion.
+nder the &octrine o% piercing t'e veil o% corporate entity' #hen (alid gro"nds
therefore exist' the legal fi&tion that a &orporation is an entit* #ith a 4"ridi&al personalit*
separate and distin&t from its members or sto&holders ma* be disregarded. /n s"&h &ases' the
&orporation #ill be &onsidered as a mere asso&iation of persons. )he members or sto&holders
of the &orporation #ill be &onsidered as the &orporation' that is liabilit* #ill atta&h dire&tl* to
the offi&ers and sto&holders. )he do&trine applies #hen the &orporate fi&tion is "sed to defeat
p"bli& &on(enien&e' 4"stif* #rong' prote&t fra"d' or defend &rime' or #hen it is made as a shield
to &onf"se the legitimate iss"es' or #here a &orporation is the mere alter ego or b"siness &ond"it
of a person' or #here the &orporation is so organi1ed and &ontrolled and its affairs are so
&ond"&ted as to mae it merel* an instr"mentalit*' agen&*' &ond"it or ad4"n&t of another
&orporation.
,hile #e do not dis&o"nt the possibilit* of the similarities of the b"sinesses of pri(ate
respondent and A&r*li&' neither are #e in&lined to appl* the do&trine in(oed b* petitioner in
granting the relief so"ght. )he fa&t that the b"sinesses of pri(ate respondent and A&r*li& are
related' that some of the emplo*ees of the pri(ate respondent are the same persons manning and
pro(iding for a"xilliar* ser(i&es to the "nits of A&r*li&' and that the ph*si&al plants' offi&es and
fa&ilities are sit"ated in the same &ompo"nd' it is o"r &onsidered opinion that these fa&ts are not
s"ffi&ient to 4"stif* the pier&ing of the &orporate (eil of A&r*li&. )he legal &orporate entit* is
disregarded onl* if it is so"ght to hold the offi&ers and sto&holders dire&tl* liable for a
&orporate debt or obligation. /n this &ase' petitioner does not see to impose a &laim against the
members of the A&r*li&.
=en&e' the A&r*li& not being an extension or expansion of pri(ate respondent' the ran-
and-file emplo*ees #oring at A&r*li& sho"ld not be re&ogni1ed as part of' andCor #ithin the
s&ope of the petitioner' as the bargaining representati(e of pri(ate respondent.