Professional Documents
Culture Documents
Labor Arbitration (From Procedure To Conciliation
Labor Arbitration (From Procedure To Conciliation
SUMMARY: NURW filed a complaint for ULP against Tres Hermanas Restaurant, specifically against Mrs. Felisa
Herrera, for 3 grounds: (1)refusal to bargain with them, (2) that NURW be a company union first before the ER
entered CBA with them; (3) that ER terminated one MARTIN BRIONES for union activities. Court found that the said
allegations are baseless. On first allegation, it was found that upon the demand to negotiate by the union, the ERs
called a meeting with them in a restaurant in QC and negotiated the demands of the Union, making some markings
on the proposals ( if agreeable; if not agreeable; if open for discussions). This fact shows that the ER was
agreeable to negotiations. The fact that it did not give a reply to its demands is merely procedural and could not be
deemed an ULP with the efforts to negotiate shown by the ER. As to the 2nd allegation, it appears that another
union - International Labor and Marine Union of the Philippines – claimed to represent majority of the workers in
the company so the ER wanted to make sure that the union had capacity to be the authorized bargaining unit. As
to the third contention, it was found that other active members of the union were not terminated so the
termination of Briones could not have been based on union activities.
lawphil
Today is
Thursda
y, July
01, 2004
FACTS
- Pambansang Kilusan ng Paggaw a (Kilusan), a legitimate labor federation, w on cert election and w as certified by the BLR as the sole and
exclusive bargaining agent of the rank-and-file employees of Sw eden Ice Cream Plant (Company).
- Kilusan then gave the Company tw o copies of its proposed CBA. It requested the Company for its counter proposals. There w as n o response
from Company. Kilusan again requested the Company for collective bargaining negotiations and for the Company to furnish them w ith its
counter proposals. Both requests were ignored and remained unacted upon by the Company.
-Kilusan on Feb 14, 1979, filed a "Notice of Strike", w ith the BLR on ground of unresolved economic issues in collective barga ining.
-Conciliation proceedings follow ed but all attempts tow ards an amicable settlement failed. BLR certified the case to the NLRC for compulsory
arbitration. The case w as reset/postponed several times (mostly Company‟s “request”).
-Then in the scheduled hearing on June 4, 1979, the Company's representative, Mr. Ching, w ho w as supposed to be examined, failed to
appear. The Company‟s counsel requested for another postponement. The labor arbiter denied. He ruled that the Company has w aived its
right to present further evidence and, therefore, considered the case submitted for resolution.
- NLRC held: Sw eden Ice Cream guilty of unjustified refusal to bargain. The draft proposal for a CBA w as found to be reasonable under the
premises, and declared to be the collective agreement w /c should govern the relationship betw een the parties.
-Petitioner: …its right to procedural due process has been violated w hen it w as precluded from presenting further evidence in support of i ts
stand and w hen its request for further postponement w as denied.
…that the NLRC‟s finding of unfair labor practice for refusal to bargain is not supported by law and the evidence considering that it w as only on
May 24. 1979 w hen the Union furnished them w ith a copy of the proposed CBA and it w as only then that they came to know of the Union's
demands; … that CBA approved and adopted by the NLRC is unreasonable and lacks legal basis.
ISSUE/S
1) WON company‟s right to due process has been violated
2) WON company is guilty of ULP
3) WON CBA is reasonable
HELD
1) NO
-Considering the various postponements granted in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual
support. As herein earlier stated, petitioner had not even honored respondent union w ith any reply to the latter's successive letters, all geared
tow ards bringing the Company to the bargaining table.. Certainly, the moves and overall behavior of company w ere in total der ogation of the
policy enshrined in the Labor Code w hich is aimed tow ards expediting settlement of economic disputes. Hence, the Court is not prepared to
affix its imprimatur to such an illegal scheme and dubious maneuvers.
2) YES
- Article 249, par. (g) LC 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 w ith respect to w ages, 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 incorpor ating such
agreement, if requested by either party."
-Collective bargaining w hich is defined as negotiations tow ards a collective agreement, is designed to stabilize the relation betw een 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.
- While it is a mutual obligation of the parties to bargain, the employer, how ever, is not under any legal duty to initiate contract negotiation.
-The mechanics of collective bargaining is set in motion only w hen the ff. jurisdictional preconditions are present, namely, ( 1) possession of the
status of majority representation of the employees' representative in accordance w ith any of the means of selection or design ation provided for
by the LC; (2) proof of majority representation; and (3) a demand to bargain under Art 251, par. (a) of the Labor Code . . . all of w hich
preconditions are undisputedly present in the instant case.
-From the over-all conduct of petitioner company, Kilusan has a valid cause to complain against Company's attitude, the totality of w hich is
indicative of the latter's disregard of, and failure to live up to, w hat is enjoined by the Labor Code ---- to bargain in good faith.
-Company is GUILTY of unfair labor practice. (1) respondent Union w as a duly certified bargaining agent; (2) it made a definit e request to
bargain, accompanied w ith a copy of the proposed CBA, to the Company not only once but tw ice w hich were left unanswered and u nacted
upon; and (3) the Company made no counter proposal w hatsoever all of w hich conclusively indicate lack of a sincere desire to negotiate. Even
during the period of compulsory arbitration before the NLRC, Company's stalled the negotiation by a series of postponements, non-appearance
at the hearing conducted
-Herald Delivery Carriers Union (PAFLU) vs. Herald Publications: "unfair labor practice is committed w hen it is show n that the respondent
employer, after having been served w ith a w ritten bargaining proposal by the petitioning Union, did not even bother to submit an answ er or
reply to the said proposal. This doctrine w as reiterated in Bradman vs. CIR: "w hile the law does not compel the parties to reach an agreement,
it does contemplate that both parties w ill approach the negotiation w ith an open mind and make a reasonable effort to reach a common ground
of agreement".
3) YES
- The instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, w hic h authorizes
the said body to determine the reasonableness of the terms and conditions of employment embodied in any CBA. To that extent, utmost
deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing agreement by the employee s and
management must be accorded due respect by this Court.
Summary: College refused to bargain, arguing that a new group of union filed a petition for certification
election.
*Ers in Sweden Ice cream and Divine Word University closed down!!!
*sir commented on chances of granting continuance: if you are from a big law firm, the court would
least likely allow the continuance on the ground that there are many counsels in the law firm!
*on 10-day period: hard to come up with a counterproposal w/n 10-day period. So can ask for additional
time. Should acknowledge receipt first of receipt plus request that additional time may be given to give
counterproposal. Most definitely not refusal to bargain in GF.
-can also reply w/n 10 day period, saying what the ER considers approved and then segregate the issues
into political and economic issues. When it's time to start negotiations, normally the parties deal with
political issues first on the justification that they are less controversial and agreement can be reached on
those points easier than in economic issues like wages and other benefits like sick leave, vacation leave,
• In Suarez, note that the SC kept on referring to the case of UE and Otiz Elevator Case. These cases can be
used as arguments ifo of the position that, yes, it is possible for the employees to receive BOTH
retirement and separation benefits:
○ UE: Faculty and administrative personnel were dismissed. SC found there was illegal dismissal. In
Labor Court, there was a claim for both retirement and separation benefits. SC also granted these.
It is strongly recommended that the employer already state in the retirement plan WON both
benefits can be recovered, or WON receipt of one benefit would cancel out receipt of the other.
○ Otis Elevator: Ees who have been illegally dismissed by the company were entitled also to
retirement benefits and separation benefits
-as a result of these rules, ERs changed their retirement plans to provide merely 1 benefit. Not both.
Almario v. PAL
-Almario, then 39 years old, was qualified to fly a Boeing 737. He qualified to fly an Air Bus 300, but
which required additional training, the cost of which was P800k at the expense of PAL.
-He qualified, but resigned from PAL 8 months after.
-PAL argued that he should reimburse the company, based on the PROHIBITIVE TRAINING COSTS
PRINCIPLE in the CBA. Almario alleged no such provision is found in the CBA
RTC: for Almario. No provision in the CBA
CA: there is a provision in the CBA
SC: There is a provision in the CBA, and the CBA is the law between the parties.
-court explained the rationale why PAL provided that at a certain age, pilots are no longer entitled for
promotion because of the costs of training them - which cannot be recovered by PAL because they
would retire soon.
-court also said there would be unjust enrichment on the part of Almario if he resigned.
-There ER-EE relationship BUT PAL went to the RTC. WHY? No relief from Labor Code, but from a
contract
-Almario vigorously denied having signed any agreement providing that he should serve 3 years for the
training which PAL paid for. He was right, but SC still held that he was liable.
*as a consequence of this Almario case, management wisened up by pointing out in black and white that
when the company trains you, you have to serve them for a certain number of years, or else reimburse
the company for the training costs - like that in call centers
BELLOSILLO, J.:
On 15 March 1993 respondent Nagkakaisang Manggagawa ng Manila Fashions, Inc., through its
president, respondent Nonito Zamora, filed a complaint before the Labor Arbiter on behalf of its one
hundred and fifty (150) members who were regular employees of petitioner Manila Fashions, Inc.
The complaint charged petitioner with non-compliance, with Wage Order No NCR-02 and 02-A
mandating a P12- increase in wages effective 8 January 1991. As a result, complainants' basic pay,
13th month pay, service incentive leave pay, legal holiday pay, night shift differential and overtime
pay were all underpaid.
Petitioner countered that the failure to comply with the pertinent Wage Order was brought about by
the tremendous losses suffered by it which were aggravated when the workers staged a strike on
account of the non-adjustment of their basic pay. To forestall continuous suspension/closure of
business operations, which petitioner did for three (3) months, the strikers sent a notice that they
were willing to condone the implementation of the increase. The condonation was distinctly stated in
Sec. 3, Art. VIII, of the Collective Bargaining Agreement (CBA) dated 4 February 1992, which was
voluntarily entered into by the parties and represents a reasonable settlement —
Sec. 3. The Union realizes the company's closeness to insolvency and, as such, sympathizes with
the company's financial condition. Therefore, the Union has agreed, as it hereby agrees, to condone
the implementation of Wage Order No. NCR-02 and 02-A.
The complainants admitted the existence of the aforementioned provision in the CBA; however they
denied the validity thereof inasmuch as it was not reached after due consultation with the members.
The Labor Arbiter sustained the claim that the subject provision of the CBA was void but based its
conclusion on a different ground —
. . . While it is true that both union officers/members and (petitioner) signed the agreement, however, the
same is not enforceable since said agreement is null and void, it being contrary to law. It is only the
Tripartite Wage Productivity Board of (the) Department of Labor and Employment (DOLE) that could
approve exemption (of) an establishment from coverage of (a) Wage Order . . . 1
Thus on 30 June 1993 petitioner was adjudged liable to each of the complainants for underpayment
of salary, 13th month pay, vacation leave pay and legal holiday pay in the total amount of
P900,012.00. All other claims were dismissed for lack of merit. 2
Both parties were unsatisfied with the decision, prompting them to seek relief from respondent
National Labor Relations Commission (NLRC). The basis of petitioner's appeal was that the ruling
was not in accordance with the facts and the law. On the part of the private respondents, they
assailed the computation of the award erroneous.
Respondent NLRC was not persuaded by petitioner. On the other hand, the appeal of private
respondents was no longer considered as it was filed beyond the reglementary period. Thus on 31
May 1994 the disputed decision was affirmed. 3
Was the condonation of the implementation of Wage Order No. NCR-02 and 02-A contained in Sec.
3, Art. VIII, of the CBA valid?
Petitioner maintains that the condonation is valid. In support thereof, it invokes cases decided by this
Court applying the rule that if the agreement was voluntarily entered into and represents a
reasonable settlement it is binding on the parties and may not be disowned simply because of a
change of mind. 4 Granting the CBA provision is indeed void, petitioner offers the alternative
argument that the computation of the award was erroneous and arbitrary.
We sustain the decision of the Labor Arbiter as affirmed by respondent NLRC that the condonation
appearing in Sec. 3, Art. VIII, of the CBA did not exempt petitioner from compliance with Wage Order
No. NCR-02 and 02-A..
Text-only version
These search terms are highlighted: republic savings bank vs court industrial relations 1967
lawphil
Today is
Thursday
, July 01,
2004
CASTRO, J.:
The vital issue in this case is whether the dismissal of the eight (8)
respondent employees by the petitionerRepublic Bank (hereinafter referred to as
the Bank) constituted an unfair labor practice within the meaning and intendment of
the Industrial Peace Act (Republic Act 875).
The Court of Industrial Relations (CIR) found it did and its decision is now on
appeal before us. The Bank maintains that the discharge was for cause.
The Bank had in its employ the respondents Rosendo T. Resuello, Benjamin
Jara, Florencio Allasas, Domingo B. Jola, Diosdado S. Mendiola, Teodoro de la
Cruz, Narciso Macaraeg and Mauro A. Rovillos. On July 12, 1958 it discharged
Jola and, a few days after (July 18, 1958), the rest of respondents, for having
written and published "a patently libelous letter . . . tending to cause the dishonor,
discredit or contempt not only of officers and employees of this bank, but also of
your employer, the bank itself."
The letter referred to was a letter-charge which the respondents had written
to the bank president, demanding his resignation on the grounds of immorality,
nepotism in the appointment and favoritism as well as discrimination in the
promotion of bank employees. The letter, dated July 9, 1958, is hereunder
reproduced in full:
Mr. Ramon Racelis
President, Republic Savings Bank
Man ila
"Dear Mr. President:
Footnotes
1
Mariano v. Royal Interocean Lines, Case 527-ULP.
2Royal Interocean Lines v. CIR, L-11745, Oct. 31, 1960.
3Note 2, supra.
4
L-10130, Sept. 30, 1957.
5Section 3 of the industrial Peace Act provides: "Employees' Right to Self-
Organization. — Employees shall have the right to self-organization and to form, join or
assist labor organizations of their own choosing for the purpose of collective bargaining
through representatives of their own choosing and to engage in concerted activities for
the purpose of collective bargaining and other mutual aid or protection. 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."
6
Annot., 6 A.L.R. 2d 416 (1949).
7167 F. 2d 983 (7th Cir 1948).
8Industrial Peace Act, sec. 13.
9
NLRB v. Highland Shoe, Inc., 119 F. 2d 218 (1st Cir. 1941); NLRB v. Bachelder, 120 F.
2d 574 (7th Cir. 1941).
10The Duty to Bargain Collectively During the Term of an Existing Agreement, 63 Harv. L.
GRIÑO-AQUINO, J.:p
Nestlé Philippines, Inc., by this petition for certiorari, seeks to annul, on the ground of grave abuse of
discretion, the decision dated August 8, 1989 of the National Labor Relations Commission (NLRC),
Second Division, in Cert. Case No. 0522 entitled, "In Re: Labor Dispute of Nestlé Philippines, Inc."
insofar as it modified the petitioner's existing non-contributory Retirement Plan.
Four (4) collective bargaining agreements separately covering the petitioner's employees in its:
1. Alabang/Cabuyao factories;
2. Makati Administration Office. (Both Alabang/Cabuyao factories and Makati office were
represented by the respondent, Union of Filipro Employees [UFE]);
3. Cagayan de Oro Factory represented by WATU; and
4. Cebu/Davao Sales Offices represented by the Trade Union of the Philippines and Allied Services
(TUPAS),
all expired on June 30, 1987.
Thereafter, UFE was certified as the sole and exclusive bargaining agent for all regular rank-and-file
employees at the petitioner's Cagayan de Oro factory, as well as its Cebu/Davao Sales Office.
In August, 1987, while the parties, were negotiating, the employees at Cabuyao resorted to a
"slowdown" and walk-outs prompting the petitioner to shut down the factory. Marathon collective
bargaining negotiations between the parties ensued.
On September 2, 1987, the UFE declared a bargaining deadlock. On September 8, 1987, the
Secretary of Labor assumed jurisdiction and issued a return to work order. In spite of that order, the
union struck, without notice, at the Alabang/Cabuyao factory, the Makati office and Cagayan de Oro
factory on September 11, 1987 up to December 8, 1987. The company retaliated by dismissing the
union officers and members of the negotiating panel who participated in the illegal strike. The NLRC
affirmed the dismissals on November 2, 1988.
On January 26, 1988, UFE filed a notice of strike on the same ground of CBA deadlock and unfair
labor practices. However, on March 30, 1988, the company was able to conclude a CBA with the
union at the Cebu/Davao Sales Office, and on August 5, 1988, with the Cagayan de Oro factory
workers. The union assailed the validity of those agreements and filed a case of unfair labor practice
against the company on November 16, 1988.
After conciliation efforts of the National Conciliation and Mediation Board (NCMB) yielded negative
results, the dispute was certified to the NLRC by the Secretary of Labor on October 28, 1988.
After the parties had filed their pleadings, the NLRC issued a resolution on June 5, 1989, whose
pertinent disposition regarding the union's demand for liberalization of the company's retirement plan
for its workers, provides as follows:
xxx xxx xxx
7. Retirement Plan
The company shall continue implementing its retirement plan modified as follows:
a) for fifteen years of service or less — an amount equal to 100% of the employee's monthly salary
for every year of service;
b) more than 15 but less than 20 years — 125% of the employee's monthly salary for every year of
service;
c) 20 years or more — 150% of the employee's monthly salary for every year of service. (pp.
58-59,Rollo.)
Both parties separately moved for reconsideration of the decision.
ROMERO, J.:
From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon
Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue:
Whether or not the company has violated the Collective Bargaining Agreement provision and the
Memorandum of Agreement dated April 1994, on promotion.
At a conference, the parties agreed on the submission of their respective Position Papers on
December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received
ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its Position
Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no
Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision
disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective Bargaining
Agreement provision nor the Memorandum of Agreement on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary
Arbitrator and to prohibit her from enforcing the same.
In labor law context, arbitration is the reference of a labor dispute to an impartial third person for
determination on the basis of evidence and arguments presented by such parties who have bound
themselves to accept the decision of the arbitrator as final and binding.
Arbitration may be classified, on the basis of the obligation on which it is based, as either
compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled by the
government to forego their right to strike and are compelled to accept the resolution of their dispute
through arbitration by a third party. 1The 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.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant
to a voluntary arbitration clause in their collective agreement, to an impartial third person for a final
and binding resolution. 2Ideally, arbitration awards are supposed to be complied with by both parties
without delay, such that once an award has been rendered by an arbitrator, nothing is left to be done
by both parties but to comply with the same. After all, they are presumed to have freely chosen
arbitration as the mode of settlement for that particular dispute. Pursuant thereto, they have chosen
a mutually acceptable arbitrator who shall hear and decide their case. Above all, they have mutually
agreed to de bound by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to
include therein provisions for a machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company personnel policies. 3 For this purpose,
parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators, or
include a procedure for their selection, preferably from those accredited by the National Conciliation
and Mediation Board (NCMB). Article 261 of the Labor Code accordingly provides for exclusive
original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the interpretation or
implementation of the CBA and (2) the interpretation or enforcement of company personnel policies.
Article 262 authorizes them, but only upon agreement of the parties, to exercise jurisdiction over
other labor disputes.
On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the
following enumerated cases:
MENDOZA, J.:
This is a petition for review on certiorari of the decision, dated October 8, 1992 and order dated
November 12, 1992, of Undersecretary of Labor and Employment Bienvenido Laguesma, ordering a
certification election to be conducted among the employees of respondent company.
The facts of the case are as follows. On January 15, 1991, a certification election was conducted
among employees of respondent Permex Producer and Exporter Corporation (hereafter referred to
as Permex Producer). The results of the elections were as follows:
REGALADO, J.:
Petitioner Associated Labor Unions (ALU, for brevity) instituted this special civil action
for certiorari and prohibition to overturn the decision of the respondent direcstor 1 dated December
10, 1986, which ordered the holding of a certification election among the rank-and-file workers of the
private respondent GAW Trading, Inc. The averments in the petition therefor, which succinctly but
sufficiently detail the relevant factual antecedents of this proceedings, justify their being quoted in
full, thus:
1. The associated Labor Unions (ALU) thru its regional Vice-Presidents Teofanio C. Nuñez, in a
letter dated May 7, 1986 (ANNEX C) informed GAW Trading, Inc. that majority of the latter's
employees have authorized ALU to be their sole and exclusive bargaining representative, and
requested GAW Trading Inc., in the same Letter for a conference for the execution of an initial
Collective Bargaining Agreement (CBA);
2. GAW Trading Inc. received the Letter of ALU aforesaid on the same day of May 7, 1986 as
acknowledged thereunder and responded (sic) ALU in a letter dated May 12, 1986 (Annex D)
indicating its recognition of ALU as the sole and exclusive bargaining agent for the majority of its
employees and for which it set the time for conference and/or negotiation at 4:00 P.M. on May 12,
1986 at the Pillsbury Office, Aboitiz Building Juan Luna Street, Cebu City;
3. On the following day of May13, 1986, ALU in behalf of the majority of the employees of GAW
Trading Inc. signed and excuted the Collective Bargaining (ANNEX F) ...
4. On May 15, 1986, ALU in behalf of the majority of the employees of GAW Trading Inc. and GAW
Trading Inc. signed and executed the Collective Bargaining Agreements (ANNEX F) . . . .
5. In the meantime, at about 1:00 P.M. of May 9, 1986, the Southern Philippines Federation of Labor
(SPFL) together with Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a ... Strike ... after it
failed to get the management of GAW Trading Inc. to sit for a conference respecting its demands
presented at 11: A.M. on the same day in an effort to pressure GAW Trading Inc. to make a
turnabout of its standign recognition of ALU as the sole and exclusive bargaining representative of
its employees, as to which strike GAW Trading Inc. filed a petition for Restraining Order/Preliminary
Injunction, dfated June 1, 1986 (Annex H) and which strike Labor Arbiter Bonifacio B. Tumamak held
as illegal in a decision dated August 5, 1986 (ANNEX I);
6. On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU) Federation ... filed a Certification
Election petition (ANNEX J), but as found by Med-Arbiter Candido M. Cumba in its (sic) Order dated
Ju ne 11, 1986 (ANNEX K), without having complied (sic) the subscription requirement for which it
was merely considered an intervenor until compliance thereof in the other petition for direct
recogbnition as bargaining agent filed on MAy 28, 1986 by southern Philippines Federation of Labor
(SPFL) as found in the same order (ANNEX K);
7. Int he meantime, the Collective Bargaining Agreement executed by ALU and GAW Trading Inc.
(ANNEX F) was duly filed May 27, 1986 with the Ministry of Labor and Employment in Region VII,
Cebu city;
8. Nevertheless, Med-Arbiter Candido M. Cumba in his order of June 11, 1986 (Annex K) ruled for
the holding of a ceritfication election in all branches of GAW Trading Inc. in Cebu City, as to which
ALU filed a Motion for Reconsideration dated June 19, 1986 (ANNEX L) which was treated as an
appeal on that questioned Order for which reason the entire record of subject certification case was
Footnotes
1 Rollo, 25-27; Annex A. Petition.
2 Ibid., 8-11.
3 Ibid., 11; Annex S. Petition.
4 Kick Loy vs. National Labor Relations Commission, 141 SCRA 179,185 (1986).
5 Rollo, 9, 34; Annex D, Petition.
6 Ibid., 37.
7 Colgate Palmolive Philippines, Inc. vs. Hon. Blas F. Ople, et al., G.R. No. 73691, June 30, 1988.
8 Sec. l (a), Rule IX, Book V, Implementing Rules of B.P. 130.
MEDIALDEA, J.:
This is a petition for certiorari seeking the nullification of the resolution issued by the respondent
Director of the Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside the
order of the Med-Arbiter dated February 8, 1989 denying the motion to dismiss the petition and
directing the conduct of a certification election among the rank and file employees or workers of the
Dacongcogon Sugar and Rice Milling Co. situated at Kabankalan, Negros Occidental.
The antecedent facts giving rise to the controversy at bar are as follows:
Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP) is
a legitimate national labor organization duly registered with the Department of Labor and
Employment. Respondent Honorable Pura Ferrer-Calleja is impleaded in her official capacity as the
Director of the Bureau of Labor Relations of the Department of Labor and Employment, while private
respondent National Federation of Sugar Workers (NFSW-FGT-KMU) is a labor organization duly
registered with the Department of Labor and Employment.
Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros
Occidental employs about five hundred (500) workers during milling season and about three
hundred (300) on off-milling season.
On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon entered
into a collective bargaining agreement (CBA) for a term of three (3) years, which was to expire on
November 14, 1987.
When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for its
renewal. The CBA was extended for another three (3) years with reservation to negotiate for its
amendment, particularly on wage increases, hours of work, and other terms and conditions of
employment.
However, a deadlock in negotiation ensued on the matter of wage increases and optional retirement.
In order to obviate friction and tension, the parties agreed on a suspension to provide a cooling-off
period to give them time to evaluate and further study their positions. Hence, a Labor Management
Council was set up and convened, with a representative of the Department of Labor and
Employment, acting as chairman, to resolve the issues.
On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or
certification election among the rank and file workers of Dacongcogon.
On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the
following grounds, to wit:
I
The Petition was filed out of time;
II
There is a deadlocked (sic) of CBA negotiation between forced intervenor and respondent-central.
(Rollo, p. 25)
On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed.
By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by private
respondent NFSW-FGT-KMU and directed the conduct of certification election among the rank and
file workers of Dacongcogon, the dispositive portion of which provides as follows:
WHEREFORE, premises considered, the Motion to Dismiss the present petition is, as it is hereby
DENIED. Let therefore a certification election among the rank and file employees/workers of the
ISSUE
WON the SOLE committed grave abuse of discretion amounting to lack of jurisdiction in dismissing the union‟s charge of unfair labor
practice.
HELD
NO.
- Surface bargaining: “going through the motions of negotiating” w ithout any legal intent to reach an agreement.
- The resolution of surface bargaining allegations never presents an easy issue. The determination of whether a party has engaged
in unlawful surface bargaining is usually a difficult one because it involves, at bottom, a question of the intent of the party in
question, and usually such intent can only be inferred from the totality of the challenged party’s conduct both at and away from the
bargaining table. It involves the question of w hether an employer‟s conduct demonstrates an unw illingness to bargain in good faith
or is merely hard bargaining.
- The minutes of meetings do not show that the Bank had any intention of violating its duty to bargain w ith the Union. Records show
that after the Union sent its proposal to the Bank, the latter replied w ith a list of its counter-proposals. Thereafter, meetings w ere set
for the settlement of their differences. The minutes of the meetings show that both the Bank and the Union exchanged economic
and non-economic proposals and counter-proposals.
- The Union has not been able to show that the Bank had done acts, both at and aw ay from the bargaining table, w hich tend to show
that it did not w ant to reach an agreement w ith the Union or to settle the differences between it and the Union. Admittedly, the
parties w ere not able to agree and reached a deadlock. How ever, it is herein emphasized that the duty to bargain “does not compel
either party to agree to a proposal or require the making of a concession.” Hence, the parties‟ failure to agree did not amount to ULP
under Article 248(g) for violation of the duty to bargain.
- The inference that respondents did not refuse to bargain collectively w ith the complaining union because they accepted some of
the demands w hile they refused the others even leaving open other demands for future discussion is correct, especially so when
those demands w ere discussed at a meeting called by respondents themselves precisely in view of the letter sent by the union
- The Court also does not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or
unreasonable proposals.
- The Bank failed to show that the economic demands made by the Union w ere exaggerated or unreasonable. The minutes of the
meeting show that the Union based its economic proposals on data of rank and file employees and the prevailing economic benefits
received by bank employees from other foreign banks doing business in the Philippines and other branches of the Bank in the Asian
region.
Disposition Resolutions of the SOLE are AFFIRMED.
allowance, death assistance, additional ½ month in midyear allowance, additional 2.5% in the teller’s
guarantee fund; profit-sharing provision, improvements in leave benefits, i.e., maternity, vacation,
sick, emergency and union leave; introduction of paternity leave, marriage leave, birthday leave and
loyalty leave; extension of the enjoyment of salary increments from 35 to 40 years of service;
provision for meal and shift allowances; increase in overtime, weekend, holiday and shift allowances;
increase emergency premiums, increase in availments of housing corresponding lowering of interest
rates and eligibility requirements, and deletion of the current rules on availment; improvement of
gratuities to a maximum of 175% and increase of medical benefits (Rollo, p. 142).
7
Eddie L. Divinagracia, Rogelio Fernando, Nancy G. Sagum, Rebecca Gabay, Ray Michael Quimpo,
Reyel G. Vargas, Cipriano Garcia, Alberto Diaz, Ed De Mesa and Jose P. Umali, Jr.
8 The Bank’s counterproposal centered on union recognition and scope (appropriate bargaining
agreement), union security and check-off (maintenance of membership), new employees, collection
of union dues, job security, hiring of next of kin, temporary personnel, redundancies, closure and
relocation, management prerogative, uniforms and grievance procedures. With respect to the
counterproposals on all economic provisions, the Bank said that it is open for discussion. (Rollo, p.
144).
9
Rollo, p. 142.
10 Pinky Diokno (sometimes referred to as Cielito Diokno), Jose S. Ho, Rene Padlan, Rolando
or both labor and management, where neither concedes anything and demands the impossible." It
actually is not collective bargaining at all. (Harold S. Roberts, Robert’s Dictionary of Industrial
Relations (Revised Edition, 1971, p. 51);Rollo, p. 671.
28 Rollo, pp. 670-676.
29
Id. at 463-464.
30
Id. at 459-460.
31 2 SCRA 924 (1961).
32 Rollo, pp. 562-611.
33
Id. at 10.
34
Id. at 23.
35 Id. at 24.
36 280 NLRB No. 80 280 NLRB No. 8
37
214 NLRB No. 062.
38 Section 8.a . It shall be unfair labor practice for an employer-(1)To interfere with, restrain or coerce
Sec. 6. The State shall afford protection to labor, especially to working women and minors, and shall
regulate the relations between landowner and tenant, and between labor and capital in industry and
in agriculture. The State may provide for compulsory arbitration.
45 Section 9, Article II of the 1973 Constitution provides:
Sec. 9. The State shall afford protection to labor, promote full employment and equality in
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. The
State may provide for compulsory arbitration.
46 Section 18, Article II of the 1987 Constitution provides:
Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.
47
Section 3, Article XIII on Social Justice and Human Rights reads as follows:
LABOR
Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized
and unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor
to its just share in the fruits of production and the right of enterprises to reasonable return on
investments, and to expansion and growth.
48
Rubberworld (Phils.), Inc. vs. NLRC, 175 SCRA 450 (1989).
49 Rollo, p. 462.
50 K-Mart Corporation vs. National Labor Relations Board, 626 F.2d 704 (1980).
51
Luck Limousine, 312 NLRB 770, 789 (1993).
52
Queen Mary Restaurants Corp. and Q.M. Foods, Inc. vs. National Labor Relations Board, 560
F.2d 403 (1977).
53 Eastern Maine Medical Center vs. National Labor Relations Board, 658 F.2d 1 (1981).
54
National Union of Restaurant Workers (PTUC) vs. Court of Industrial Relations, 10 SCRA 843
(1964).
55 K-Mart Corporation vs. NLRB, supra.
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, assailing the
Resolution 1 of the National Labor Relations Commission in NLRC NCR CASE NO. 00094-90, which
dismissed the complaint of SanMiguel Corporation (SMC), seeking to dismiss the notice of strike
given by the private respondent union and to compel the latter to comply with the provisions of the
Collective Bargaining Agreement (CBA) 2 on grievancemachinery, arbitration, and the no-strike
clause, with prayer for the issuance of a temporary restraining order.
The antecedent facts are as follows:
In July 1990, San Miguel Cooperation, alleging the need to streamline its operations due to financial
loses, shut down some of its plants and declared 55 positions as redundant listed as follows:
seventeen (17) employees in the Business Logistics Division ("BLD"), seventeen (17) in the Ayala
Operations Center (AOC), and eighteen (18) in the Magnolia-Manila Buying Station ("Magnolia-
MBS"). 3 Consequently, the private respondent union filed severalgrievance cases for the said
retrenched employees, praying for the redeployment of the said employees to the other divisions of
the company.
The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of the parties'
1990 Collective Bargaining Agreement providing for the following procedures, to wit:
Sec.5. Processing of Grievance. — Should a grievance arise, an earnest effort shall be made to
settle the grievance expeditiously in accordance with the following procedures:
Step 1. — The individual employee concerned and the Union Directors, or the Union Steward shall,
first take up the employee's grievance orally with his immediate superior. If no satisfactory
agreement or adjustment of the grievance is reached, the grievance shall, within twenty (20)
working days from the occurrence of the cause or event which gave rise to the grievance, be filed in
writing with the Department Manager or the next level superior who shall render his decision within
ten (10) working days from the receipt of the written grievance. A copy of the decision shall be
furnished the Plant Personnel Officer.
Step 2. — If the decision in Step 1 is rejected, the employee concerned may elevate or appeal this in
writing to the Plant Manager/Director or his duly authorized representative within twenty (20) working
days from the receipt of the Decision of the Department Manager, Otherwise, the decision in Step 1
shall be deemed accepted by the employee.
The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the necessity, of
conducting grievance meetings. If necessary, the Plant Manager/Director and the Plant Personnel
Officer shall meet the employee concerned and the Union Director/Steward on such date(s) as may
be designated by the Plant Manager. In every plant/office, Grievance Meetings shall be scheduled
at least twice a month.
The Plant Manager shall give his written comments and decision within ten (10) working days after
his receipt of such grievance or the date of submission of the grievance for resolution, as the case
may be. A copy of his Decision shall be furnished the Employee Relations Directorate.
Step 3. — If no satisfactory adjustment is arrived at Step 2, the employee may appeal the Decision
to the Conciliation Board as provided under Section 6 hereof, within fifteen (15) working days from
the date of receipt of the decision of the Plant Manager/Director or his designate. Otherwise, the
decision in Step 2 shall be deemed accepted by the employee.
The Conciliation Board shall meet on the grievance in such dates as shall be designated by the
Division/Business Unit Manager or his representative. In every Division/Business
Unit, GrievanceMeetings of the Conciliation Board shall be scheduled at least once a month.
The Conciliation Board shall have fifteen (15) working days from the date of submission of
ROMERO, J.:
The issue in this petition for certiorari is whether or not an employer committed an unfair labor
practice by bargaining in bad faith and discriminating against its employees. The charge arose from
the employer's refusal to grant across-the-board increases to its employees in implementing Wage
Orders Nos. 01 and 02 of the Regional Tripartite Wages and Productivity Board of the National
Capital Region (RTWPB-NCR). Such refusal was aggravated by the fact that prior to the issuance of
said wage orders, the employer allegedly promised at the collective bargaining conferences to
implement any government-mandated wage increases on an across-the-board basis.
Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers of the Philippines
(SMTFM) was the certified collective bargaining representative of all regular rank and file employees
of private respondent Top Form Manufacturing Philippines, Inc. At the collective bargaining
negotiation held at the Milky Way Restaurant in Makati, Metro Manila on February 27, 1990, the
parties agreed to discuss unresolved economic issues. According to the minutes of the meeting,
Article VII of the collective bargaining agreement was discussed. The following appear in said
Minutes:
Art. VII, Wages
Sect. 1. — Defer —
Sect. 2. Status quo
Sec. 3. Union proposed that any future wage increase given by the government should be
implemented by the company across-the-board or non-conditional.
Management requested the union to retain this provision since their sincerity was already proven when the P25.00 wage increase was
granted across-the-board. The union acknowledges management's sincerity but they are worried that in case there is a new set of
management, they can just show their CBA. The union decided to defer this provision. 1
In their joint affidavit dated January 30, 1992, 2 union members Salve L. Barnes, Eulisa Mendoza,
Lourdes Barbero and Concesa Ibañez affirmed that at the subsequent collective bargaining negotiations,
the union insisted on the incorporation in the collective bargaining agreement (CBA) of the union proposal
on "automatic across-the-board wage increase." They added that:
11. On the strength of the representation of the negotiating panel of the company and the above
undertaking/promise made by its negotiating panel, our union agreed to drop said proposal relying
on the undertakings made by the officials of the company who negotiated with us, namely, Mr.
William Reynolds, Mr. Samuel Wong and Mrs. Remedios Felizardo. Also, in the past years, the
company has granted to us government mandated wage increases on across-the-board basis.
On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an increase of P17.00
per day in the salary of workers. This was followed by Wage Order No. 02 dated December 20, 1990
providing for a P12.00 daily increase in salary.
As expected, the union requested the implementation of said wage orders. However, they demanded that
the increase be on an across-the-board basis. Private respondent refused to accede to that demand.
Instead, it implemented a scheme of increases purportedly to avoid wage distortion. Thus, private
respondent granted the P17.00 increase under Wage Order No. 01 to workers/employees receiving
salary of P125.00 per day and below. The P12.00 increase mandated by Wage Order No. 02 was granted
to those receiving the salary of P140.00 per day and below. For employees receiving salary higher than
P125.00 or P140.00 per day, private respondent granted an escalated increase ranging from P6.99 to
P14.30 and from P6.00 to P10.00, respectively. 3
On October 24, 1991, the union, through its legal counsel, wrote private respondent a letter demanding
that it should "fulfill its pledge of sincerity to the union by granting an across-the-board wage increases
FIRST DIVISION
[G.R. No. 119293. June 10, 2003]
SAN MIGUEL CORPORATION, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, Second Division, ILAW AT BUKLOD NG
MANGGAGAWA (IBM), respondents.
DECISION
AZCUNA, J.:
Before us is a petition for certiorari and prohibition seeking to set aside the
decision of the Second Division of the National Labor Relations Commission
(NLRC) in Injunction Case No. 00468-94 dated November 29, 1994,[1] and its
resolution dated February 1, 1995 [2] denying petitioner‟s motion for reconsideration.
Petitioner San Miguel Corporation (SMC) and respondent Ilaw at Buklod ng
Manggagawa (IBM), exclusive bargaining agent of petitioner‟s daily-paid rank and
file employees, executed a Collective Bargaining Agreement (CBA) under which
they agreed to submit all disputes to grievance and arbitration proceedings. The
CBA also included a mutually enforceable no-strike no-lockout agreement. The
pertinent provisions of the said CBA are quoted hereunder:
ARTICLE IV
GRIEVANCE MACHINERY
Section 1. - The parties hereto agree on the principle that all disputes between labor and management may
be solved through friendly negotiation;. . . that an open conflict in any form involves losses to the parties,
and that, therefore, every effort shall be exerted to avoid such an open conflict. In furtherance of the
foregoing principle, the parties hereto have agreed to establish a procedure for the adjustment of
grievances so as to (1) provide an opportunity for discussion of any request or complaint and (2) establish
procedure for the processing and settlement of grievances.
xxx xxx xxx
ARTICLE V
ARBITRATION
Section 1. Any and all disputes, disagreements and controversies of any kind between the COMPANY
and the UNION and/or the workers involving or relating to wages, hours of work, conditions of
employment and/or employer-employee relations arising during the effectivity of this Agreement or any
renewal thereof, shall be settled by arbitration through a Committee in accordance with the procedure
established in this Article. No dispute, disagreement or controversy which may be submitted to the
grievance procedure in Article IV shall be presented for arbitration until all the steps of the grievance
procedure are exhausted.
xxx xxx xxx
ARTICLE VI
STRIKES AND WORK STOPPAGES
Section 1. The UNION agrees that there shall be no strikes, walkouts, stoppage or slowdown of work,
boycotts, secondary boycotts, refusal to handle any merchandise, picketing, sit-down strikes of any kind,
sympathetic or general strikes, or any other interference with any of the operations of the COMPANY
during the term of this Agreement.
Section 2. The COMPANY agrees that there shall be no lockout during the term of this Agreement so
long as the procedure outlined in Article IV hereof is followed by the UNION.[3]
On April 11, 1994, IBM, through its vice-president Alfredo Colomeda, filed with the
National Conciliation and Mediation Board (NCMB) a notice of strike, docketed as
NCMB-NCR-NS-04-180-94, against petitioner for allegedly committing: (1) illegal
dismissal of union members, (2) illegal transfer, (3) violation of CBA, (4)
contracting out of jobs being performed by union members, (5) labor-only
SECOND DIVISION
[G.R. No. 135547. January 23, 2002]
GERARDO F. RIVERA, ALFRED A. RAMISO, AMBROCIO PALAD,
DENNIS R. ARANAS, DAVID SORIMA, JR., JORGE P. DELA ROSA,
and ISAGANI ALDEA, petitioners, vs. HON. EDGARDO ESPIRITU in
his capacity as Chairman of the PAL Inter-Agency Task Force created
under Administrative Order No. 16; HON. BIENVENIDO LAGUESMA in
his capacity as Secretary of Labor and Employment; PHILIPPINE
AIRLINES (PAL), LUCIO TAN, HENRY SO UY, ANTONIO V. OCAMPO,
MANOLO E. AQUINO, JAIME J. BAUTISTA, and ALEXANDER O.
BARRIENTOS, respondents.
DECISION
QUISUMBING, J.:
In this special civil action for certiorari and prohibition, petitioners charge public
respondents with grave abuse of discretion amounting to lack or excess of
jurisdiction for acts taken in regard to the enforcement of the agreement dated
September 27, 1998, between Philippine Airlines (PAL) and its union, the PAL
Employees Association (PALEA).
The factual antecedents of this case are as follows:
On June 5, 1998, PAL pilots affiliated with the Airline Pilots Association of the
Philippines (ALPAP) went on a three-week strike, causing serious losses to the
financially beleaguered flag carrier. As a result, PAL‟s financial situation went from
bad to worse. Faced with bankruptcy, PAL adopted a rehabilitation plan and
downsized its labor force by more than one-third.
On July 22, 1998, PALEA went on strike to protest the retrenchment measures
adopted by the airline, which affected 1,899 union members. The strike ended four
days later, when PAL and PALEA agreed to a more systematic reduction in PAL‟s
work force and the payment of separation benefits to all retrenched employees.
On August 28, 1998, then President Joseph E. Estrada issued Administrative
Order No. 16 creating an Inter-Agency Task Force (Task Force) to address the
problems of the ailing flag carrier. The Task Force was composed of the
Departments of Finance, Labor and Employment, Foreign Affairs, Transportation
and Communication, and Tourism, together with the Securities and Exchange
Commission (SEC). Public respondent Edgardo Espiritu, then the Secretary of
Finance, was designated chairman of the Task Force. It was “empowered to
summon all parties concerned for conciliation, mediation (for) the purpose of
arriving at a total and complete solution of the problem.”[1] Conciliation meetings
were then held between PAL management and the three unions representing the
airline‟s employees,[2] with the Task Force as mediator.
On September 4, 1998, PAL management submitted to the Task Force an offer by
private respondent Lucio Tan, Chairman and Chief Executive Officer of PAL, of a
plan to transfer shares of stock to its employees. The pertinent portion of said plan
reads:
1. From the issued shares of stock within the group of Mr. Lucio Tan‟s holdings, the ownership of 60,000
fully paid shares of stock of Philippine Airlines with a par value of PHP5.00/share will be transferred in
favor of each employee of Philippine Airlines in the active payroll as of September 15, 1998. Should any
KAPUNAN, J.:
May the term of a Collective Bargaining Agreement (CBA) as to its economic provisions be extended
beyond the term expressly stipulated therein, and, in the absence of a new CBA, even beyond the
three-year period provided by law? Are employees hired after the stipulated term of a CBA entitled to
the benefits provided thereunder?
These are the issues at the heart of the instant petition for certiorari with prayer for the issuance of
preliminary injunction and/or temporary restraining order filed by petitioner New Pacific Timber &
Supply Company, Incorporated against the National Labor Relations Commission (NLRC), et. al.,
and the National Federation of Labor, et. al.
The antecedents facts, as found by the NLRC, are as follows:
The National Federation of Labor (NFL, for brevity) was certified as the sole and exclusive
bargaining representative of all the regular rank-and-file employees of New Pacific Timber & Supply
Co., Inc. (hereinafter referred to as petitioner Company). 1 As such, NFL started to negotiate for
better terms and conditions of employment for the employees in the bargaining unit which it
represented. However, the same was allegedly met with stiff resistance by petitioner Company, so
that the former was prompted to file a complaint for unfair labor practice (ULP) against the latter on
the ground of refusal to bargain collectively. 2
On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order declaring (a)
herein petitioner Company guilty of ULP; and (b) the CBA proposals submitted by the NFL as the
CBA between the regular rank-and-file employees in the bargaining unit and petitioner Company. 3
Petitioner Company appealed the above order to the NLRC. On November 15, 1989, the NLRC
rendered a decision dismissing the appeal for lack of merit. A motion for reconsideration thereof
was, likewise, denied in a Resolution, dated November 12, 1990. 4
Unsatisfied, petitioner Company filed a petition for certiorari with this Court. But the Court dismissed
said petition in a Resolution, dated January 21, 1991. 5
Thereafter, the records of the case were remanded to the arbitration branch of origin of the
execution of Labor Arbiter Abdulwahid's Order, dated March 31, 1987, granting monetary benefits
consisting of wage increases, housing allowances, bonuses, etc. to the regular rank-and-file
employees. Following a series of conferences to thresh out the details of computation, Labor Arbiter
Reynaldo S. Villena issued an Order, dated October 18, 1993, directing petitioner Company to pay
the 142 employees entitled to the aforesaid benefits the respective amounts due them under the
CBA. Petitioner Company complied; and the corresponding quitclaims were executed. The case was
considered closed following NFL's manifestation that it will no longer appeal the October 18, 1993
Order of Labor Arbiter Villena. 6
However, notwithstanding such manifestation, a "Petition for Relief" was filed in behalf of 186 of the
private respondents "Mariano J. Akilit and 350 others" on May 12, 1994. In their petition, they
claimed that they were wrongfully excluded from enjoying the benefits under the CBA since the
agreement with NFL and petitioner Company limited the CBA's implementation to only the 142 rank-
and-file employees enumerated. They claimed that NFL's misrepresentations had precluded them
from appealing their exclusion. 7
Treating the petition for relief as an appeal, the NLRC entertained the same. On August 4, 1994,
said commission issued a resolution 8 declaring that the 186 excluded employees "form part and
parcel of the then existing rank-and-file bargaining unit" and were, therefore, entitled to the benefits
under the CBA. The NLRC held, thus:
WHEREFORE, the appeal is hereby granted and the Order of the Labor arbiter dated October 18,
1993 is hereby. Set Aside and Vacated. In lieu hereof, a new Order is hereby issued directing
SO ORDERED.
Davide, Jr., C.J., Puno and Ynares-Santiago, JJ., concur.
Pardo, J., is on official business abroad.
Footnotes
1 Rollo, p. 42.
2 Ibid.
3 Id., at 42.
4 Id., at 43.
5 Id., at 43.
KAPUNAN, J.:
This is a petition for certiorari assailing the Order of the Secretary of Labor rendered on February 15,
1993 involving a labor dispute at San Miguel Corporation.
The facts are as follows:
On June 28, 1990, petitioner-union San Miguel Corporation Employees Union — PTGWO entered
into a Collective Bargaining Agreement (CBA) with private respondent San Miguel Corporation
(SMC) to take effect upon the expiration of the previous CBA or on June 30, 1989.
This CBA provided, among others, that:
ARTICLE XIV
DURATION OF AGREEMENT
Sec. 1. This Agreement which shall be binding upon the parties hereto and their respective
successors-in-interest, shall become effective and shall remain in force and effect until June 30,
1992.
Sec. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this Agreement
insofar as the representation aspect is concerned, shall be for five (5) years from July 1, 1989 to
June 30, 1994. Hence, the freedom period for purposes of such representation shall be sixty (60)
days prior to June 30, 1994.
Sec. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all provisions of this
Agreement, except insofar as the representation aspect is concerned. If no agreement is reached in such
negotiations, this Agreement shall nevertheless remain in force up to the time a subsequent agreement is
reached by the parties. 1
In keeping with their vision and long term strategy for business expansion, SMC management
informed its employees in a letter dated August 13, 1991 2 that the company which was composed of
four operating divisions namely: (1) Beer, (2) Packaging, (3) Feeds and Livestocks, (4) Magnolia and
Agri-business would undergo a restructuring. 3
Effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-off and became
two separate and distinct corporations: Magnolia Corporation (Magnolia) and San Miguel Foods, Inc.
(SMFI). Notwithstanding the spin-offs, the CBA remained in force and effect.
After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA and Article
253-A of the Labor Code. Negotiations started sometime in July, 1992 with the two parties
submitting their respective proposals and counterproposals.
During the negotiations, the petitioner-union insisted that the bargaining unit of SMC should still
include the employees of the spun-off corporations: Magnolia and SMFI; and that the renegotiated
terms of the CBA shall be effective only for the remaining period of two years or until June 30, 1994.
SMC, on the other hand, contended that the members/employees who had moved to Magnolia and
SMFI, automatically ceased to be part of the bargaining unit at the SMC. Furthermore, the CBA
should be effective for three years in accordance with Art. 253-A of the Labor Code.
Unable to agree on these issues with respect to the bargaining unit and duration of the CBA,
petitioner-union declared a deadlock on September 29, 1990.
On October 2, 1992, a Notice of Strike was filed against SMC.
In order to avert a strike, SMC requested the National Conciliation and Mediation Board (NCMB) to
conduct preventive mediation. No settlement was arrived at despite several meetings held between
the parties.
On November 3, 1992, a strike vote was conducted which resulted in a "yes vote" in favor of a strike.
Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical
personalities. Thus, they can not belong to a single bargaining unit as held in the case of Diatagon
Labor Federation Local 110 of the ULGWP v. Ople. 21 We elucidate:
The fact that their businesses are related and that the 236 employees of the Georgia Pacific
International Corporation were originally employees of Lianga Bay Logging Co., Inc. is not a
justification for disregarding their separate personalities. Hence, the 236 employees, who are now
attached to Georgia Pacific International Corporation, should not be allowed to vote in the
certification election at the Lianga Bay Logging Co., Inc. They should vote at a separate certification
election to determine the collective bargaining representative of the employees of Georgia Pacific
International Corporation.
Petition-union's attempt to include the employees of Magnolia and SMFI in the SMC bargaining unit
so as to have a bigger mass base of employees has, therefore, no more valid ground.
Moreover, in determining an appropriate bargaining unit, the test of grouping is mutuality or
commonality of interests. The employees sought to be represented by the collective bargaining
agent must have substantial mutual interests in terms of employment and working conditions as
evinced by the type of work they performed. 22 Considering the spin-offs, the companies would
consequently have their respective and distinctive concerns in terms of the nature of work, wages,
hours of work and other conditions of employment. Interests of employees in the different companies
perforce differ. SMC is engaged in the business of the beer manufacturing. Magnolia is involved in
the manufacturing and processing of diary products 23 while SMFI is involved in the production of
feeds and the processing of chicken. 24 The nature of their products and scales of business may
require different skills which must necessarily be commensurated by different compensation
packages. The different companies may have different volumes of work and different working
conditions. For such reason, the employees of the different companies see the need to group
themselves together and organize themselves into distinctive and different groups. It would then be
best to have separate bargaining units for the different companies where the employees can bargain
QUIASON, J.:
This is a petition for certiorari to reverse the Decision dated August 16, 1991 of the Voluntary
Arbitrator, respondent Israel D. Damasco, declaring as valid the separation from employment of
petitioner.
We dismiss the petition.
I
Petitioner was employed as typist of private respondent at its plant in Quezon, Bukidnon.
At about 5:00 P.M. of November 27, 1990, petitioner went to visit Mercy Baylas, a co-employee, at
the ladies' dormitory inside the compound of private respondent. Upon seeing petitioner, Baylas hid
behind the divider at the reception room. Rosemarie Basa and Isabel Beleno, co-boarders of Baylas,
told petitioner that Baylas was not at the dormitory and advised him to stop courting her because she
had no feelings towards him. Afterwards, the two left leaving petitioner alone in the room. When he
peeped behind the divider, he saw Baylas, who stood up without answering his greetings and ran
towards her room. He followed, and after taking hold of her left hand, pulled her towards him. The
force caused her to fall on the floor. He then placed himself on top of her. She resisted and futilely
struggled to free herself from his grasp. Sonia Armada, the dormitory housekeeper, responded to
Baylas' shouts for help. Armada saw petitioner embracing and kissing Baylas. She tried to separate
petitioner from Baylas but to no avail. So she went outside and asked Basa and Beleno to help
Baylas. She also asked the help of Edmundo Subong.
Basa and Beleno tried to pull petitioner away from Baylas, but it was Subong who was able to free
Baylas from petitioner.
According to the medical report issued by Dr. Letecia P. Maraat, Baylas complained of pains on her
shoulder and left foot.
On December 5, 1990, petitioner was informed of the complaint against him and was placed under
preventive suspension. Nolito S. Densing, Jr. was instructed to investigate the incident. In his report
dated December 26, 1990, Densing recommended that the maximum penalty be meted out against
petitioner. On January 5, 1991, petitioner was dismissed from the service for having violated
paragraph 3.B (Conduct and Behavior) of the Code of Employee Discipline, which provides:
1. Inflicting or attempting to inflict bodily injury, in any form, on fellow employee, with a penalty of
dismissal.
2. Immoral conduct within company premises, regardless of whether or not committed during
working time, punishable by reprimand to dismissal, depending on the prejudice caused by such act
to the company.
3. Improper conduct and acts of gross discourtesy or disrespect to fellow employees at any time
within the company premises punishable by reprimand to dismissal, depending on the gravity of the
offense.
4. Knowingly giving false or untruthful statements or concealing material facts in an investigation
conducted by authorized representative of the company, punishable by dismissal ( Rollo, pp. 47-48).
On March 18, 1991, the President of the Mindanao Sugar Workers Union, for and in behalf of
petitioner, and Jaime J. Javier, Personnel Officer of private respondent, agreed to submit the case of
petitioner to voluntary arbitration.
At the initial conference on March 27, 1991, petitioner, represented by his counsel, agreed to limit
the issues to be submitted to the Voluntary Arbitrator to the following:
1. Whether or not the grievance procedure in the CBA for bringing a case before the Voluntary
Arbitrator had been followed;
2. Whether petitioner's dismissal was legal; and
lawphil
Today is
Thursda
y, July
01, 2004
VITUG, J.:
A Voluntary Arbitrator's decision which is final and unappealable, as a rule, 1 is assailed in this
special civil action for certiorari under Rule 65 of the Rules of Court. Since the voluntary arbitrator
regrettably has not expounded on what appears to be the threshold issue, we have decided to
accept for consideration the petition.
Petitioner Kimberly-Clark Philippines, Inc. (KCPI), seeks to set aside the Resolutions of 15 October
1991 and 21 November 1991 of public respondent Voluntary Arbitrator Danilo Lorredo, holding that
the nephew of a retired employee should be employed by KCPI as his replacement pursuant to
Section 1, Article XX, of their Collective Bargaining Agreement ("CBA").
The pertinent provisions of the CBA, 2 relevant to the controversy, is hereinafter quoted:
Art. XX — Resignation, Retirement, Disability and Death.
Sec. 1. The COMPANY agrees to employ, the immediate member of the family of an employee
provided qualified, upon the employee's resignation, retirement, disability or death. In case of
resignation, however, employment of an immediate member of the family of an employee may be
allowed provided the employee has rendered a service of ten (10) years and above and the
resignation is not a forced resignation. For the purpose of this section, the phrase "immediate
member of the family of an employee" shall refer to the employee's legitimate children and in default
thereof to the employee's collateral relative within the third civil degree. The recommendee of the
retired/resigned employee shall, if qualified, be hired on probationary status.
Danilo L. Guerrero, an employee assigned as Operator B in KCPI's Finishing Section, voluntarily
resigned on 02 January 1991, after thirteen (13) years and three (3) months of employment with the
petitioner corporation. 3
Pursuant to Section I, Article XX, of the aforementioned CBA, Guerrero, through the Union,
recommended for hiring his nephew (name undisclosed from the records), who is a collateral relative
within the third civil degree.
In a letter, dated 16 April 1991, 4 KCPI informed the Union, through its President, that it could not act
favorably on Guerrero's recommendee "(i)n as much as Mr. Danilo L. Guerrero has legitimate
children . . .", namely: Joanne Guerrero (ten years of age), Mary Anne Guerrero (seven years of
age) and Dianne Guerrero (three years of age). The private respondent argued that, since
Guerrero's legitimate children are still minors, he could validly recommend for hiring his nephew.
Failing to agree on the proper interpretation of Article XX, Section 1, of the CBA and after exhausting
remedies through the grievance machinery, the parties agreed to submit their dispute for voluntary
arbitration.
A submission agreement 5 was the filed with the National Conciliation and Mediation Board, Regional
Branch No. IV. Arbitrator Danilo Lorredo was assigned to resolve the central issue of how the above
cited CBA provision should be construed. 6
On 15 October 1991, after hearing and the submission of position papers, reply, rejoinder and
counter-rejoinder, the voluntary arbitrator rendered his disputed resolution, 7 the pertinent portions of
which read:
xxx xxx xxx
Indeed the issue that needs resolution is not whether the Union's or the Company's interpretation is
correct. What should be resolved is whether or not the implementation of the questioned provision of
the CBA is well within the spirit of the provision. The relationships of the replacements with the
retired employees should control. They are within the covered provision. Admittedly, they were hired
# Footnotes
ed., p. 342.
SECOND DIVISION
TSPIC CORPORATION, Petitioner, vs. TSPIC EMPLOYEES UNION (FFW), representing MARIA
FE FLORES, FE CAPISTRANO, AMY DURIAS,[1] CLAIRE EVELYN VELEZ, JANICE OLAGUIR,
JERICO ALIPIT, GLEN BATULA, SER JOHN HERNANDEZ, RACHEL NOVILLAS, NIMFA ANILAO,
ROSE SUBARDIAGA, VALERIE CARBON, OLIVIA EDROSO, MARICRIS DONAIRE, ANALYN
AZARCON, ROSALIE RAMIREZ, JULIETA ROSETE, JANICE NEBRE, NIA ANDRADE, CATHERINE
YABA, DIOMEDISA ERNI,[2] MARIO SALMORIN, LOIDA COMULLO,[3] MARIE ANN DELOS
SANTOS,[4] JUANITA YANA, and SUZETTE DULAY, Respondents.
DEC I SI ON
In this Petition for Review on C ertiorari under Rule 45, petitioner TSPIC C orporation (TSPIC) seeks to annul and
set aside the October 22, 2003 Decision[5] and April 23, 2004 Resolution[6] of the C ourt of Appeals (C A) in C A-
G.R. SP No. 68616, which affirmed the September 13, 2001 Decision[7] of Accredited Voluntary Arbitrator
Josephus B. Jimenez in National C onciliation and Mediation Board C ase No. JBJ-AVA-2001-07-57.
TSPIC is engaged in the business of designing, manufacturing, and marketing integrated circuits to serve the
communication, automotive, data processing, and aerospace industries. Respondent TSPIC Employees Union
(FFW) (Union), on the other hand, is the registered bargaining agent of the rank-and-file employees of TSPIC.
The respondents, Maria Fe Flores, Fe C apistrano, Amy Durias, C laire Evelyn Velez, Janice Olaguir, Jerico Alipit,
Glen Batula, Ser John Hernandez, Rachel Novillas, Nimfa Anilao, Rose Subardiaga, Valerie C arbon, Olivia
Edroso, Maricris Donaire, Analyn Azarcon, Rosalie Ramirez, Julieta Rosete, Janice Nebre, Nia Andrade,
C atherine Yaba, Diomedisa Erni, Mario Salmorin, Loida C omullo, Marie Ann Delos Santos, Juanita Yana, and
Suzette Dulay, are all members of the Union.
In 1999, TSPIC and the Union entered into a C ollective Bargaining Agreement (C BA)[8] for the years 2000 to
2004. The C BA included a provision on yearly salary increases starting January 2000 until January 2002.
Section 1, Article X of the C BA provides, as follows:
Section 1. Salary/ Wage Increases.––Employees covered by this Agreement shall be granted
salary/wage increases as follows:
a) Effe ctive January 1, 2000, all employees on re gular status and within the bargaining unit on or before
said date shall be granted a salary incre ase equivalent to te n percent (10%) of their basic monthly
salary as of December 31, 1999.
b) Effe ctive January 1, 2001, all employees on re gular status and within the bargaining unit on or before
said date shall be granted a salary incre ase equivalent to twe lve (12%) of their basic monthly salary as
of De ce mber 31, 2000.
c) Effe ctive January 1, 2002, all employees on re gular status and within the bargaining unit on or before
said date shall be granted a salary incre ase equivalent to e leven perce nt (11%) of their basic monthly
salary as of December 31, 2001.
The wage salary increase of the first year of this Agreement shall be over and above the wage/salary
increase, including the wage distortion adjustment, granted by the C OMPANY on November 1, 1999 as
per Wage Order No. NC R-07.
The wage/salary increases for the years 2001 and 2002 shall be deemed inclusive of the mandated
minimum wage increases under future Wage Orders, that may be issued after Wage Order No. NC R -07,
and shall be considered as correction of any wage distortion that may have been brought about by the
said future Wage Orders. Thus the wage/salary increases in 2001 and 2002 shall be deemed as
compliance to future wage orders after Wage Order No. NC R-07.
The C BA also provided that employees who acquire regular employment status within the year but after the
effectivity of a particular salary increase shall receive a proportionate part of the increase upon attainment of
their regular status. Sec. 2 of the C BA provides:
SEC TION 2. Regularization Increase.––A covered daily paid employee who acquires regular status
within the year subsequent to the effectivity of a particular salary/wage increase mentioned in Section 1
above shall be granted a salary/wage increase in proportionate basis as follows:
R e gularization Period Equiva lent Increase
- 1 st Q uarter 100%
- 2 nd Q uarte r 75%
- 3 rd Q uarter 50%
- 4 th Q uarter 25%
Thus, a daily paid employee who becomes a regular employee covered by this Agreement only on May 1,
2000, i.e., during the second quarter and subsequent to the January 1, 2000 wage increase under this
Agreement, will be entitled to a wage increase equivalent to seventy -five percent (75%) of ten percent
(10%) of his basic pay. In the same manner, an employee who acquires regular status on December 1,
2000 will be entitled to a salary increase equivalent to twenty -five percent (25%) of ten percent (10%)
of his last basic pay.
On the other hand, any monthly-paid employee who acquires regular status within the term of the
Agreement shall be granted regularization increase equivalent to 10% of his regular basic salary.
Then on October 6, 2000, the Regional Tripartite Wage and Productivity Board, National C apital Region, issued
Wage Order No. NC R-08[10] (WO No. 8) which raised the daily minimum wage from PhP 223.50 to PhP 250
effective November 1, 2000. C onformably, the wages of 17 probationary employees, namely: Nimfa Anilao,
Rose Subardiaga, Valerie Carbon, Olivia Edroso, Maricris Donaire, Analyn Azarcon, Rosalie Ramirez, Julieta
Rosete, Janice Nebre, Nia Andrade, C atherine Yaba, Diomedisa Erni, Mario Salmorin, Loida Comullo, Marie Ann
Delos Santos, Juanita Yana, and Suzette Dulay (second group), were increased to PhP 250.00 effective
November 1, 2000.
On various dates during the last quarter of 2000, the above named 17 employees attained regular
employment[11] and received 25% of 10% of their salaries as granted under the provision on regularization
increase under Article X, Sec. 2 of the C BA.
In January 2001, TSPIC implemented the new wage rates as mandated by the C BA. As a result, the nine
employees (first group), who were senior to the above-listed recently regularized employees, received less
wages.
On January 19, 2001, a few weeks after the salary increase for the year 2001 became effective, TSPIC’s
Human Resources Department notified 24 employees,[12]namely: Maria Fe Flores, Janice Olaguir, Rachel
Novillas, Fe C apistrano, Jerico Alipit, Amy Durias, Glen Batula, Claire Evelyn Velez, Ser John Hernandez, Nimfa
Anilao, Rose Subardiaga, Valerie C arbon, Olivia Edroso, Maricris Donaire, Analyn Azarcon, Rosalie Ramirez,
Julieta Rosete, Janice Nebre, Nia Andrade, C atherine Yaba, Diomedisa Erni, Mario Salmorin, Loida C omullo, and
Marie Ann Delos Santos, that due to an error in the automated payroll system, they were overpaid and the
overpayment would be deducted from their salaries in a staggered basis, starting February 2001. TSPIC
explained that the correction of the erroneous computation was based on the crediting provision of Sec. 1, Art.
X of the C BA.
The Union, on the other hand, asserted that there was no error and the deduction of the alleged overpayment
from employees constituted diminution of pay. The issue was brought to the grievance machinery, but TSPIC
and the Union failed to reach an agreement.
C onsequently, TSPIC and the Union agreed to undergo voluntary arbitration on the solitary issue of whether or
not the acts of the management in making deductions from the salaries of the affected employees constituted
diminution of pay.
On September 13, 2001, Arbitrator Jimenez rendered a Decision, holding that the unilateral deduction made by
TSPIC violated Art. 100[13] of the Labor C ode. The falloreads:
WHEREFORE, in the light of the law on the matter and on the facts adduced in evidence, judgment is
hereby rendered in favor of the Union and the named individual employees and against the company,
thereby ordering the [TSPIC] to pay as follows:
1) to the sixteen (16) newly re gularized employees named above, the amount of P12,642.24 a m onth or
a total of P113,780.16 for nine (9) months or P7,111.26 for e ach of them as we ll as an additional
The parties are hereby directed to comply with their joint voluntary commitment to abide by this Award
and thus, submit to this Office jointly, a written proof of voluntary compliance with this DEC ISION within
ten (10) days after the finality hereof.
SO ORDERED.[14]
TSPIC filed a Motion for Reconsideration which was denied in a Resolution dated November 21, 2001.
Aggrieved, TSPIC filed before the C A a petition for review under Rule 43 docketed as C A-G.R. SP No. 68616.
The appellate court, through its October 22, 2003 Decision, dismissed the petition and affirmed in toto the
decision of the voluntary arbitrator. The C A declared TSPIC’s computation allowing PhP 287 as daily wages
to the newly regularized employees to be correct, noting that the computation conformed to WO No. 8 and the
provisions of the C BA. According to the C A, TSPIC failed to convince the appellate court that the deduction was
a result of a system error in the automated payroll system. The C A explained that when WO No. 8 took effect
on November 1, 2000, the concerned employees were still probationary employees who were receiving the
minimum wage of PhP 223.50. The C A said that effective November 1, 2000, said employees should have
received the minimum wage of PhP 250. The C A held that when respondents became regular employees on
November 29, 2000, they should be allowed the salary increase granted them under the C BA at the rate of
25% of 10% of their basic salary for the year 2000; thereafter, the 12% increase for the year 2001 and the
10% increase for the year 2002 should also be made applicable to them.[15]
TSPIC filed a Motion for Reconsideration which was denied by the C A in its April 23, 2004 Resolution.
TSPIC filed the instant petition which raises this sole issue for our resolution: Does the TSPIC ’s decision to
deduct the alleged overpayment from the salaries of the affected members of the Union constitute diminution of
benefits in violation of the Labor C ode?
TSPIC maintains that the formula proposed by the Union, adopted by the arbitrator and affirmed by the C A, was
flawed, inasmuch as it completely disregarded the “crediting provision†contained in the last paragraph
of Sec. 1, Art. X of the C BA.
It is familiar and fundamental doctrine in labor law that the C BA is the law between the parties and they are
obliged to comply with its provisions.[16] We said so in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa
sa Honda:
A collective bargaining agreement or C BA refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other terms and conditions of
employment in a bargaining unit. As in all contracts, the parties in a C BA may establish such stipulations,
clauses, terms and conditions as they may deem convenient provided these are not contrary to law,
morals, good customs, public order or public policy. Thus, where the C BA is clear and unambiguous, it
becomes the law between the parties and compliance therewith is mandated by the express policy of the
law.[17]
Moreover, if the terms of a contract, as in a C BA, are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of their stipulations shall control.[18] However, sometimes, as in this
case, though the provisions of the C BA seem clear and unambiguous, the parties sometimes arrive at conflicting
interpretations. Here, TSPIC wants to credit the increase granted by WO No. 8 to the increase granted under
the C BA. According to TSPIC, it is specifically provided in the C BA that “the salary/wage increase for the
year 2001 shall be deemed inclusive of the mandated minimum wage increases under future wage orders that
may be issued after Wage Order No. 7.†The Union, on the other hand, insists that the “creditingâ€
provision of the C BA finds no application in the present case, since at the time WO No. 8 was issued, the
probationary employees (second group) were not yet covered by the C BA, particularly by its crediting provision.
As a general rule, in the interpretation of a contract, the intention of the parties is to be pursued.[19] Littera
necat spiritus vivificat. An instrument must be interpreted according to the intention of the parties. It is the
duty of the courts to place a practical and realistic construction upon it, giving due consideration to the context
Paragraph (b) of Sec. 1 of Art. X of the C BA provides for the general agreement that, effective January 1, 2001,
all employees on regular status and within the bargaining unit on or before said date shall be granted a salary
increase equivalent to twelve (12%) of their basic monthly salary as of December 31, 2000. The 12% salary
increase is granted to all employees who (1) are regular employees and (2) are within the bargaining unit.
Second paragraph of (c) provides that the salary increase for the year 2000 shall not include the increase in
salary granted under WO No. 7 and the correction of the wage distortion for November 1999.
The last paragraph, on the other hand, states the specific condition that the wage/salary increases for the years
2001 and 2002 shall be deemed inclusive of the mandated minimum wage increases under future wage orders,
that may be issued after WO No. 7, and shall be considered as correction of the wage distortions that may be
brought about by the said future wage orders. Thus, the wage/salary increases in 2001 and 2002 shall be
deemed as compliance to future wage orders after WO No. 7.
Paragraph (b) is a general provision which allows a salary increase to all those who are qualified. It, however,
clashes with the last paragraph which specifically states that the salary increases for the years 2001 and 2002
shall be deemed inclusive of wage increases subsequent to those granted under WO No. 7. It is a familiar rule
in interpretation of contracts that conflicting provisions should be harmonized to give effect to all.[21] Likewise,
when general and specific provisions are inconsistent, the specific provision shall be paramount to and govern
the general provision.[22] Thus, it may be reasonably concluded that TSPIC granted the salary increases under
the condition that any wage order that may be subsequently issued shall be credited against the previously
granted increase. The intention of the parties is clear: As long as an employee is qualified to receive the 12%
increase in salary, the employee shall be granted the increase; and as long as an employee is granted the 12%
increase, the amount shall be credited against any wage order issued after WO No. 7.
Respondents should not be allowed to receive benefits from the C BA while avoiding the counterpart crediting
provision. They have received their regularization increases under Art. X, Sec. 2 of the C BA and the yearly
increase for the year 2001. They should not then be allowed to avoid the crediting provision which is an
accompanying condition.
Respondents attained regular employment status before January 1, 2001. WO No. 8, increasing the minimum
wage, was issued after WO No. 7. Thus, respondents rightfully received the 12% salary increase for the year
2001 granted in the C BA; and consequently, TSPIC rightfully credited that 12% increase against the increase
granted by WO No. 8.
Proper formula for computing the salaries for the year 2001
(1) With regard to the first group of respondents who attained regular employment status before the effectivity
of WO No. 8, the computation is as follows:
for 2001 and the incre ase granted under W O No. 8 ............. PhP 14.67
W a ge ra te by De cember 2000 ............................ PhP 250.00
Plus total difference betwe en the wa ge increase for 2001
for 2001 and the incre ase gra nted under W O No. 8 ........................ PhP 14.68
W a ge ra te by De cember 2000 ............................ PhP 250.00
Plus total difference betwe en the wa ge increase for 2001
C ompute the increase in salary after the implementation of WO No. 8 by subtracting the minimum wage before
WO No. 8 from the minimum wage per the wage order to arrive at the wage increase, thus:
for 2001 and the incre ase gra nted under W O No. 8 ..................... PhP 4.25
W age rate after re gularization increase .......................................... PhP 256.25
Plus total difference betwe en the wa ge increase and
Diminution of benefits
TSPIC also maintains that charging the overpayments made to the 16 respondents through staggered
deductions from their salaries does not constitute diminution of benefits.
Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the
employees. There is diminution of benefits when it is shown that: (1) the grant or benefit is founded on a policy
or has ripened into a practice over a long period; (2) the practice is consistent and deliberate; (3) the practice
is not due to error in the construction or application of a doubtful or difficult question of law; and (4) the
diminution or discontinuance is done unilaterally by the employer.[27]
As correctly pointed out by TSPIC , the overpayment of its employees was a result of an error. This error was
immediately rectified by TSPIC upon its discovery. We have ruled before that an erroneously granted benefit
may be withdrawn without violating the prohibition against non-diminution of benefits. We ruled in Globe-
Mackay Cable and Radio Corp. v. NLRC:
Absent clear administrative guidelines, Petitioner C orporation cannot be faulted for erroneous application
of the law. Payment may be said to have been made by reason of a mistake in the construction or
application of a “doubtful or difficult question of lawâ€. (Article 2155, in relation to Article 2154 of
the C ivil C ode). Since it is a past error that is being corrected, no vested right may be said to have arisen
nor any diminution of benefit under Article 100 of the Labor C ode may be said to have resulted by virtue
of the correction.[28]
Here, no vested right accrued to individual respondents when TSPIC corrected its error by crediting the salary
increase for the year 2001 against the salary increase granted under WO No. 8, all in accordance with the C BA.
Hence, any amount given to the employees in excess of what they were entitled to, as computed above, may
be legally deducted by TSPIC from the employees’ salaries. It was also compassionate and fair that TSPIC
deducted the overpayment in installments over a period of 12 months starting from the date of the initial
deduction to lessen the burden on the overpaid employees. TSPIC, in turn, must refund to individual
respondents any amount deducted from their salaries which was in excess of what TSPIC is legally allowed to
deduct from the salaries based on the computations discussed in this Decision.
As a last word, it should be reiterated that though it is the state’s responsibility to afford protection to labor,
this policy should not be used as an instrument to oppress management and capital.[29] In resolving disputes
between labor and capital, fairness and justice should always prevail. We ruled in Norkis Union v. Norkis
Trading that in the resolution of labor cases, we have always been guided by the State policy enshrined in the
C onstitution: social justice and protection of the working class. Social justice does not, however, mandate that
every dispute should be automatically decided in favor of labor. In any case, justice is to be granted to the
deserving and dispensed in the light of the established facts and the applicable law and doctrine.[30]
WHEREFORE, premises considered, the September 13, 2001 Decision of the Labor Arbitrator in National
C onciliation and Mediation Board C ase No. JBJ-AVA-2001-07-57 and the October 22, 2003 C A Decision in C A-
G.R. SP No. 68616 are herebyAFFIRMED with MODIFICATION. TSPIC is hereby ORDERED to pay
respondents their salary increases in accordance with this Decision, as follows:
Name of Employee Daily Wage No. of Working Days in a No. of Months in a Total Salary for
Rate Month Year 2001
Nim fa Anilao 260.5 26 12 81,276.00
R ose Subardiaga 260.5 26 12 81,276.00
Va le rie C arbon 260.5 26 12 81,276.00
O livia Edroso 260.5 26 12 81,276.00
Ma ricris Donaire 260.5 26 12 81,276.00
Analyn Azarcon 260.5 26 12 81,276.00
R osalie Ramirez 260.5 26 12 81,276.00
Julie ta R osete 260.5 26 12 81,276.00
Janice Ne bre 260.5 26 12 81,276.00
Nia Andra de 260.5 26 12 81,276.00
C a therine Yaba 260.5 26 12 81,276.00
Diom edisa Erni 260.5 26 12 81,276.00
Ma rio Sa lmorin 260.5 26 12 81,276.00
Loida Camullo 260.5 26 12 81,276.00
Ma rie Ann De los 260.5 26 12 81,276.00
Sa ntos
Jua nita Yana 260.5 26 12 81,276.00
Suze tte Dulay 260.5 26 12 81,276.00
Je rico Alipit 264.67 26 12 82,577.04
Gle n Ba tula 264.67 26 12 82,577.04
Se r John Hernandez 264.68 26 12 82,580.16
R a chel Novillas 264.68 26 12 82,580.16
Am y Duria s 270.26 26 12 84,321.12
C la ire Evelyn Ve lez 270.26 26 12 84,321.12
Ja nice Olaguir 270.26 26 12 84,321.12
Ma ria Fe Flores 275.85 26 12 86,065.20
Fe C a pistra no 275.85 26 12 86,065.20
The award for attorney’s fees of ten percent (10%) of the total award isMAINTAINED.
SO ORDERED.
[4] Also appears as Mary Ann delos Santos in some parts of the records.
Rollo, pp. 31-39-A. Penned by Associate Justice C onrado M. Vasquez, Jr., and concurred in by Associate
[5]
“Providing an Increase in the Daily Minimum Wage in the National C apital Region, and Its Implementing
[10]
Rules: Rules Implementing Wage Order No. NC R-08,†approved on October 25, 2000.
Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be
[13]
construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the
time of promulgation of this C ode.
Centro Escolar University Faculty and Allied Workers Union-Independent v. Court of Appeals, G.R. No.
[16]
[17] G.R. No. 145561, June 15, 2005, 460 SC RA 187, 190-191.
[20]Marcopper Mining Corporation v. NLRC, G.R. No. 103525, March 29, 1996, 255 SC RA 322, 333;
citing Davao Integrated Port Stevedoring Services v. Abarquez, G.R. No. 102132, March 19, 1993, 220 SC RA
197.
[21] C IVIL C ODE, Art. 1374; RULES OF C OURT, Rule 130, Sec. 11.
Rollo, p. 537. It appears from the records that they attained regular employment status on July 31, 2000
[23]
Id. It appears from the records that they attained regular employment status on August 21, 2000 with a
[24]
Id. It appears from the records that respondents Amy Durias and C laire Evelyn Velez attained regular
[25]
employment status on April 11, 2000, while Janice Olaguir on April 18, 2000, all with a basic wage rate of PhP
240.26.
Id. It appears from the records that respondent Maria Fe Flores attained regular employment status on
[26]
February 22, 2000, while Fe C apistrano on March 22, 2000, both with a basic wage rate of PhP 245.85.
[27] C .A. Azucena, THE LABOR C ODE WITH C OMMENTS AND CASES 222 (2004).
[29] Agabon v. NLRC, G.R. No. 158693, November 17, 2004, 442 SC RA 573, 614.
[30] G.R. No. 157098, June 30, 2005, 462 SC RA 485, 497.
THIRD DIVISION
[G.R. No. 156260. March 10, 2005]
BABCOCK-HITACHI (PHILS.), INC., petitioner, vs. BABCOCK-HITACHI (PHILS.), INC., MAKATI
EMPLOYEES UNION (BHPIMEU), respondent.
DECI SION
SANDOVAL-GUTIERREZ, J.:
At bar is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assailing the Decision[1] dated May 14, 2002 and Resolution[2] dated November 26, 2002
rendered by the Court of Appeals in CA-G.R. SP No. 65260, entitled “Babcock-Hitachi (Phils.), Inc. vs.
Babcock-Hitachi (Phils.), Inc., Makati Employees Union (BHPIMEU).”
The facts as borne by the records are:
Babcock-Hitachi (Phils.), Inc., petitioner, is a manufacturing corporation, with branches at Makati City
and Bauan, Batangas.
Sometime in December 1997, petitioner, to improve the operating efficiency and coordination among its
various departments, formulated a plan to transfer the Design Department from its Makati office to
Bauan, Batangas.
With this development, petitioner, on February 24, 1999, sent separate notices to Justiniano G. Iniego,
Xavier Aguila and Bonifacio B. Vergara, who occupied Engineer 1 positions at the Design Department,
of their re-assignment and transfer to Bauan, Batangas effective April 1, 1999. This prompted them to
claim for their relocation allowance provided by Sections 1 and 2, Article XXI of the collective
bargaining agreement (CBA).[3]
However, petitioner refused to implement the CBA, claiming that the affected employees are not entitled
to relocation allowance under Policy Statement No. BHPI-G-044A dated October 1, 1996[4]considering
that they are residents of Bauan or its adjacent towns.[5]
Thus, the affected union members (Justiniano Iniego, et al.), represented by Babcock-Hitachi (Phils.),
Inc., Makati Employees Union, respondent, filed with the National Conciliation and Mediation Board
(NCMB) a complaint for payment of relocation allowance against petitioner. In a Submission Agreement
dated March 18, 1999, the parties stipulated to submit the case for voluntary arbitration.
On July 25, 2000, after the parties submitted their pleadings and position papers, the Voluntary Arbitrator
rendered a Decision ordering petitioner to pay respondent‟s concerned members their relocation
allowances. Petitioner then filed a motion for reconsideration but was denied in a Resolution dated May
30, 2001.
Thereafter, petitioner filed with the Court of Appeals a petition for review with prayer for issuance of a
temporary restraining order and/or writ of preliminary injunction.
On May 14, 2002, the Appellate Court promulgated its Decision affirming the Voluntary Arbitrator‟s
assailed Decision. The Court of Appeals ratiocinated as follows:
“After a thorough study of the case at hand, we are convinced that the affected employees are entitled to
the relocation allowance provided for in the Collective Bargaining Agreement (CBA) entered into and
signed by both the Union and petitioner Company on July 18, 1997. We share the posture adopted by the
Voluntary Arbitrator in rejecting petitioner‟s arguments that the affected employees are not entitled to
relocation allowance. Pursuant to the basic and irrefragable rule that in carrying out and interpreting the
provisions of the Labor Code and its implementing rules and regulations, the workingman‟s welfare
should be the primordial and paramount consideration. Undoubtedly, this rule must likewise find
application in the interpretation and meaning of the CBA entered into by both the parties, for the same is
the law between the parties. x x x.
xx x xxx
In the case before this Court, petitioner Company‟s contention that the policy statement they issued still
finds application in the present CBA is misplaced. With the advent of the new CBA dated July 18, 1997,
the policy statement, which previously finds application can no longer be controlling in the present
situation. Had it been the intent of the proponents of the CBA, then it could have been incorporated in the
agreement or contract, otherwise, it contravenes the very essence and purpose of the CBA. Obviously,
the purpose of collective bargaining agreement is the reaching of an agreement resulting in a contract
binding on the parties.
Moreover, the policy statement being invoked by petitioner Company is not a part of the contract or CBA,
thus, it cannot remain in full force and effect even beyond the stipulated term, especially, in the light of
[1] Penned by Justice Perlita J. Tria Tirona, and concurred in by Justices Buenaventura J. Guerrero
(retired) and Rodrigo V. Cosico, Annex “A” of the Petition, Rollo at 31-43.
[2] Annex “B”, id. at 44-45.
[3] “ARTICLE XXI
RELOCATION ASSISTANCE
THIRD DIVISION
[G.R. No. 123782. September 16, 1997]
CALTEX REFINERY EMPLOYEES ASSOCIATION
(CREA), petitioner, vs. HON. JOSE S. BRILLANTES, in his
capacity as Acting Secretary of the Department of Labor and
Employment, and CALTEX (PHILIPPINES), Inc., respondents.
RESOLUTI ON
PANGANIBAN, J.:
Unless shown to be clearly whimsical, capricious or arbitrary, the orders or
resolutions of the secretary of labor and employment resolving conflicts on
what should be the contents of a collective bargaining agreement will be
respected by this Court. We realize that, oftentimes, such orders and
resolutions are based neither on definitive shades of black or white, nor on
what is legally right or wrong. Rather, they are grounded largely on what is
possible, fair and reasonable under the peculiar circumstances of each case.
The Facts
Anticipating the expiration of their Collective Bargaining Agreement on July
31, 1995, petitioner and private respondent negotiated the terms and
conditions of employment to be contained in a new CBA. The negotiation
between the two parties was participated in by the National Conciliation and
Meditation Board (NCMB) and the Office of the Secretary of Labor and
Employment. Some items in the new CBA were amicably arrived at and
agreed upon, but some others were unresolved.
To settle the unresolved issues, eight meetings between the parties were
conducted. Because the parties failed to reach any significant progress in
these meetings, petitioner declared a deadlock. On July 24, 1995, petitioner
filed a notice of strike. Six (6) conciliation meetings conducted by the NCMB
failed to settle the parties‟ differences. Then, the parties held marathon
meetings at the plant level, but this remedy proved also unavailing.
During a strike vote on August 16, 1995, the members of petitioner opted for
a walkout. Private respondent then filed with the Department of Labor and
Employment (DOLE) a petition for assumption of jurisdiction in accordance
with Article 263 (g) of the Labor Code.
In an Order dated August 22, 1995, public respondent assumed jurisdiction
“over the entire labor dispute at Caltex (Philippines) Inc.,” with the following
disposition: [6]
“WHEREFORE ABOVE PREMISES CONSIDERED, this Office hereby assumes jurisdiction over
the entire labor dispute at Caltex (Philippines) Inc. pursuant to Article 263 (g) of the Labor Code, as
amended.
Accordingly, any strike or lockout, whether actual or intended, is hereby enjoined.
The parties are further directed to cease and desist from committing any and all acts which might
exacerbate the situation.
To expedite the resolution of the instant dispute, the parties are further directed to submit their
respective position papers and evidence within ten (10) days from receipt hereof.”
In defiance of the above Order expressly restraining any strike or lockout,
petitioner began a strike and set up a picket in the premises of private
respondent on August 25, 1995. Thereafter, several company notices
directing the striking employees to return to work were issued, but the
members of petitioner defied them and continued their mass action.
In the course of the strike, DOLE Undersecretary Bienvenido Laguesma
interceded and conducted several conciliation meetings between the
contending parties. He was able to convince the members of the union to
return to work and to enter into a memorandum of agreement with private
respondent. On September 9, 1995, the picket lines were finally
lifted. Thereafter, the contending parties filed their position papers pertaining
to unresolved issues. [7]
Because of the strike, private respondent terminated the employment of some
officers of petitioner union. The legality of these dismissals brought additional
contentious issues.[8]
Again, the parties tried to resolve their differences through
conciliation. Failing to come to any substantial agreement, the parties
stopped further negotiation and, on September 13, 1995, decided to refer the
problem to the secretary of labor and employment: [9]
“It appearing that the possibility of an amicable settlement appears remote, the parties agreed to
submit their respective position paper and evidence simultaneously on 27 September 1995 at the
Office of the Secretary. The parties further agreed that there will be no extension of time for filing
The Issues
Petitioner does not specifically pinpoint the issues it wants the Court to rule
upon. It appears, however, that petitioner questions public respondent‟s
resolution of five issues in the CBA, specifically on wage increase, union
security clause, retirement benefits or application of the new retirement plan,
signing bonus and grievance and arbitration machineries.
Private respondent, on the other hand, submits this lone issue: [10]
“Whether or not the Honorable Secretary of Labor and Employment committed grave abuse of
discretion in resolving the instant labor dispute.”
1. Wage Increase
The main assailed Order dated October 9, 1995 resolved the ticklish demand
for wage increase as follows: [15]
“With this in mind and taking into view similar factors as financial capacity, position in the
industry, package of existing benefits, inflation rate, seniority, and maintenance of the wage
differentiation between and among the various classes of employees within the entire Company,
this Office hereby finds the following improved benefits fair, reasonable and equitable:
1. Wage Increases
Effective August 1, 1995 - 14%
Effective August 1, 1996 - 14%
Effective August 1, 1997 - 13%
2. meal subsidy - P15.00”
In denying the motions for reconsideration/clarification of the above award,
public respondent rules in the challenged Order dated November 21, 1995: [16]
“First, on the matter of wages, we find no compelling reasons to alter or modify our award after
having sufficiently passed upon the same arguments raised by both parties in our previous
Order. The subsequent agreement on a package of wage increases at Shell Company, adverted to
by the Union as the usual yardstick for purposes of developing its own package of improved wage
increases, would not be sufficient basis to grant the same increases to the Union members herein
considering that other factors, among which is employment size, were carefully taken into
account. While it is true that inflation has direct impact on wage increases, it is not quite accurate
to state that inflation „as of September 1995‟ is already registered at 11.8%. The truth of the matter
is that the average inflation for the first ten (10) months was only 7.496% and Central Bank
projections indicate that it will take a 13.5% inflation for November and December to record an
average inflation of 8.5% for the year. We, therefore, maintain the reasonableness of the package
of wage increases that we awarded.”
Petitioner belittles the awarded increases. It insists that the increase should
be ruled on the basis of four factors: “(a) the economic needs of the [u]nion‟s
members; (b) the [c]ompany‟s financial capacity; (c) the bargaining history
between the [u]nion and the [c]ompany; and (d) the traditional parity in wages
between Caltex and Shell Refinery Employees.” [17]
Petitioner contends that the “inflation rate rose to 11.8% in September [1995],
rose further in October, and is still a double-digit figure at the time of this
writing.” Therefore, public respondent‟s so-called “improved benefits” are in
reality “retrogressive.” [18]
Petitioner tries to show private respondent‟s “immense financial capacity” by
citing Caltex‟s “Banaba Housing Up-grading” which would cost “not less
than P200,000,000.00” [19]Petitioner does “not begrudge” private respondent‟s
“pampering of its [r]efinery [m]anagers and supervisors,” but asks that the
rank and file employees be “not left too far behind.” [20]
Petitioner maintains that the salaries of Shell Refinery employees be used as
a “reference point” in upgrading the compensation of private respondent‟s
employees because these two companies are in the “same industry and their
refineries are both in Batangas.” Thus, the wage increase of petitioner‟s
5. Signing Bonus
The public respondent’s contested resolution on the ―signing bonus‖ in the
Order dated November 21, 1995 reads: [41]
“Fifth, specifically on the issue of whether the signing bonus is covered under the „maintenance of
existing benefits‟ clause, we find that a clarification is indeed imperative. Despite the expressed
provision for a signing bonus in the previous CBA, we uphold the principle that the award for a
signing bonus should partake the nature of an incentive and premium for peaceful negotiations and
amicable resolution of disputes which apparently are not present in the instant case. Thus, we are
constrained to rule that the award of signing bonus is not covered by the „maintenance of existing
benefits‟ clause.”
Petitioner asseverates that the ―signing bonus is an existing benefit embodied
in the old CBA.‖ [42] It explains that public respondent erred in removing the
award of a signing bonus which is ―given not only as an incentive for peaceful
negotiations and amicable settlement of disputes but also as an extra award
to the workers following the settlement of a CBA dispute by whatever
means.‖ [43]
Private respondent disagrees, contending that a signing bonus is not awarded
when CBA negotiations ―result in a strike.‖ There are two reasons
therefor: First, ―the grant of a signing bonus is a matter of discretion and
cannot be demanded as a matter of right;‖ and second, the signing bonus is
meant as an incentive for a peaceful negotiation. Once these negotiations
result in a strike, an illegal one at that, the basis or rationale for such an
award is lost.‖ [44]
Although proposed by petitioner, [45] the signing bonus was not accepted by
private respondent. [46] Besides, a signing bonus is not a benefit which may be
demanded under the law. Rather, it is now claimed by petitioner under the
principle of ―maintenance of existing benefits‖ of the old CBA. However, as
Epilogue
We have carefully reviewed the assailed Orders. Other than his failure to rule
on the issue of union security, the secretary of labor cannot be indicted for
grave abuse of discretion amounting to want or excess of jurisdiction.
“Basically, there is grave abuse of discretion amounting to lack of jurisdiction where the respondent
board, tribunal or officer exercising judicial functions exercised its judgment in a capricious,
whimsical, arbitrary or despotic manner. However, it has also been said that grave abuse is
committed when “the lower court acted capriciously, and whimsically or the petitioner‟s contention
appears to be clearly tenable or the broader interest of justice or public policy [so] require x x
x.” Also, grave abuse of discretion is committed when the board, tribunal or officer exercising
judicial function fails to consider evidence adduced by the parties.” [49]
In Saballa vs. National Labor Relations Commission, [50] we ruled on how a
decision of an administrative body must be drawn:
“The Court has previously held that judges and arbiters should draw up their decisions and
resolutions with due care, and make certain that they truly and accurately reflect their conclusions
and their final dispositions. x x x The same thing goes for the findings of fact made by the NLRC,
as it is a settled rule that such findings are entitled to great respect and even finality when supported
by substantial evidence; otherwise, they shall be struck down for being whimsical and capricious
and arrived at with grave abuse of discretion. It is a requirement of due process and fair play that
the parties to a litigation be informed of how it was decided, with an explanation of the factual and
legal reasons that led to the conclusions of the court. A decision that does not clearly and distinctly
state the facts and the law of which it is based leaves the parties in the dark as to how it was reached
and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the
court for review by a higher tribunal.”
In the present case, the foregoing requirements has been sufficiently
met. Petitioner’s claim of grave abuse of discretion is anchored on the simple
[1] With National Conciliation and Mediation Board case number NCMB-RBIV-NS-07-088-95.
[2] Rollo, pp. 164-178.
[3] Ibid., p. 178.
[11] Association of Marine Officers and Seamen of Reyes and Lim Co. vs. Laguesma, 239 SCRA
460, 465, December 27, 1994, citing Loadstar Shipping Co., Inc. vs. Gallo, G.R. No. 102845,
February 4, 1994; PAL Employees’ Association vs. Ferrer-Calleja, 162 SCRA 426.
[12] Villanueva, Sr. vs. Leogardo, Jr. 215 SCRA 835, 838, November 20, 1992, citing Special Events
& Central Shipping Office Workers Union vs. San Miguel Corp., 122 SCRA 557.
[13] Madlos vs. National Labor Relations Commission, 254 SCRA 248, 257, March 4, 1996, citing
Section 5, Rule 133, Rules of Court. See Rase vs. NLRC, 237 SCRA 523 (1994).
[14] 253 SCRA 494, 497, February 9, 1996, per Panganiban, J., citing Sajonas vs. NLRC, 183 SCRA
182, March 15, 1990; Special Events & Central Shipping Office Workers Union vs. San Miguel
Corporation, supra, and Yap vs. Inciong, 186 SCRA 664, June 21, 1990.
[15] Ibid., p. 172.
[25] Saballa vs. National Labor Relations Commission, 260 SCRA 697, 709, August 22, 1996 per
Panganiban, J. citing Lopez Sugar Corporation vs. Federation of Free Workers, 189 SCRA 179,
190, August 30, 1990.
[26] Comment, pp. 12-13; Rollo, pp. 292-293.
[27] Social Security System vs. SSS Supervisor’s Union, 117 SCRA 746, 749, October 23, 1982,
citing J.P. Heilbronn Co. vs. National Labor Union, 92 Phil. 577 (1953).
[28] Rollo, p. 20.
[31] ―Article 249. Unfair labor practices of labor organizations. – It shall be unfair labor practice for a
[33] St. Scholastica’s College vs. Torres, 210 SCRA 565, 571, June 29, 1992.
[49] Philippine Airlines, Inc. vs. Confessor, 231 SCRA 41-42, March 10, 1994, per Nocon, J.
MELO, J.:
The petition for certiorari before us seeks to annul and to set aside the decision of the
National Labor Relations Commission (Second Division) dated July 12, 1986 which affirmed that
of Labor Arbiter Fernando V. Cinco declaring illegal the strike staged by petitioners and terminating
the employment of the individual petitioners.
The Master Iron Works Construction Corporation (Corporation for brevity) is a duly organized
corporate entity engaged in steel fabrication and other related business activities. Sometime in
February 1987, the Master IronLabor Union (MILU) entered into a collective barganing agreement
(CBA) with the Corporation for the three-year period between December 1, 1986 and November 30,
1989 (Rollo, p. 7). Pertinent provisions of the CBA state:
Sec. 1. That there shall be no strike and no lockout, stoppage or shutdown of work, or any other
interference with any of the operation of the COMPANY during the term of this AGREEMENT,
unless allowed and permitted by law.
Sec. 2. Service Allowance — The COMPANY agrees to continue the granting of service allowance
of workers assigned to work outside the company plant, in addition to his daily salary, as follows:
(a) For those assigned to work outside the plant within Metro Manila, the service allowance shall be
P12.00;
(b) For those assigned to work outside Metro Manila, the service allowance shall be P25.00/day;
(c) The present practice of conveying to and from jobsites of workers assigned to work outside of the
company plant shall be maintained.
Right after the signing of the CBA, the Corporation subcontracted outside workers to do the usual
jobs done by its regular workers including those done outside of the company plant. As a result, the
regular workers were scheduled by the management to work on a rotation basis allegedly to prevent
financial losses thereby allowing the workers only ten (10) working days a month (Rollo, p. 8). Thus,
MILU requested implementation of the grievance procedure which had also been agreed upon in the
CBA, but the Corporation ignored the request.
Consequently, on April 8, 1987, MILU filed a notice of strike (Rollo,
p. 54) with the Department of Labor and Employment. Upon the intervention of the DOLE, through
one Atty. Bobot Hernandez, the Corporation and MILU reached an agreement whereby the
Corporation acceded to give back the usual work to its regular employees who are members of
MILU (Rollo, p. 55).
Notwithstanding said agreement, the Corporation continued the practice of hiring outside workers.
When the MILU president, Wilfredo Abulencia, insisted in doing his regular work of cutting steel bars
which was being done by casual workers, a supervisor reprimanded him, charged him with
insubordination and suspended him for three (3) days (Rollo, pp. 9 & 51-52). Upon the request of
MILU, Francisco Jose of the DOLE called for conciliation conferences. The Corporation, however,
insisted that the hiring of casual workers was a management prerogative. It later ignored subsequent
# Footnotes
1 The Solicitor General at first refused to file a comment on the petition in view of his stand which is
contrary to that of the NLRC (Rollo, p. 81). Hence, the NLRC itself was directed to file comment on
the petition in the Resolution of June 20, 1990 (Rollo, p. 83). The NLRC's Legal Division filed two
motions for extension of time to file comment (Rollo, pp. 86 & 90). However, in the Resolution of
November 14, 1990 (Rollo, p. 110), the Court noted the private respondent's manifestation and
motion "pending filing of comment by the Solicitor General on the petition." The NLRC Legal Division
REGALADO, J.:
The instant petition for certiorari seeks to set aside the decision of The National Labor Relations
Commission (NLRC) in NLRC Case No. 4-1206-85, promulgated on December 11,
1986, 1 containing the following disposition:
WHEREFORE, in view of the foregoing consideration, the Decision appealed from is set aside and
another one entered, declaring the suspension of complainants to be illegal and consequently,
respondent PAL is directed to pay complainants their salaries corresponding to the respective period(s) of
their suspension, and to delete the disciplinary action from complainants' service records. 2
These material facts recited in the basic petition are virtually undisputed and we reproduce the same
hereunder:
1. Individual respondents are all Port Stewards of Catering Sub-Department, Passenger Services
Department of petitioner. Their duties and responsibilities, among others, are:
Prepares meal orders and checklists, setting up standard equipment in accordance with the
requirements of the type of service for each flight; skiing, binning, and inventorying of Commissary
supplies and equipment.
2. On various occasions, several deductions were made from their salary. The deductions
represented losses of inventoried items charged to them for mishandling of company properties . . .
which respondents resented. Such that on August 21, 1984, individual respondents, represented by
the union, made a formal notice regarding the deductions to petitioner thru Mr. Reynaldo Abad,
Manager for Catering. . . .
3. As there was no action taken on said representation, private respondents filed a formal grievance
on November 4, 1984 pursuant to the grievance machinery Step 1 of the Collective Bargaining
Agreement between petitioner and the union. . . . The topics which the union wanted to be discussed
in the said grievance were the illegal/questionable salary deductions and inventory of bonded goods
and merchandise being done by catering service personnel which they believed should not be their
duty.
4. The said grievance was submitted on November 21, 1984 to the office of Mr. Reynaldo Abad,
Manager for Catering, who at the time was on vacation leave. . . .
5. Subsequently, the grievants (individual respondents) thru the shop steward wrote a letter on
December 5, 1984 addressed to the office of Mr. Abad, who was still on leave at the time, that
inasmuch as no reply was made to their grievance which "was duly received by your secretary" and
considering that petitioner had only five days to resolve the grievance as provided for in the CBA,
said grievance as believed by them (private respondents) was deemed resolved in their favor. . . .
6. Upon Mr. Abad's return on December 7, 1984, he immediately informed the grievants and
scheduled a meeting on December 12, 1984. . . .
7. Thereafter, the individual respondents refused to conduct inventory works. Alberto Santos, Jr. did
not conduct ramp inventory on December 7, 10 and 12. Gilbert Antonio did not conduct ramp
inventory on December 10. In like manner, Regino Duran and Houdiel Magadia did not conduct the
same on December 10 and 12.
8. At the grievance meeting which was attended by some union representatives, Mr. Abad resolved
the grievance by denying the petition of individual respondents and adopted the position that
inventory of bonded goods is part of their duty as catering service personnel, and as for the salary
deductions for losses, he rationalized:
1. It was only proper that employees are charged for the amount due to mishandling of company
property which resulted to losses. However, loss may be cost price 1/10 selling price.
9. As there was no ramp inventory conducted on the mentioned dates, Mr. Abad, on January 3,
# Footnotes
1 Per Presiding Commissioner Edna Bonto-Perez and Commissioners Daniel M. Lucas, Jr. and
Mirasol V. Corleto.
2 Original Record, 119.
* Private respondents were meted the penalty of suspension without pay as follows: Alberto Santos,
Jr., from January 15 to April 5, 1985 (Exh. H, Original Record, 45); Regino Duran, from January 15
to February 4, 1985 (Exh. I, ibid., 46); Gilbert Antonio, from January 15 to 21, 1985 (Exh. J, ibid.,
47); and Houdiel Magadia, from January 15 to February 4, 1985 (Exh. K, ibid., 48).
3 Petition, 2-5; Rollo, 3-6.
4 Pan Pacific Industrial Sales, Inc. vs. NLRC, et al., 194 SCRA 633 (1991).
5 Exhibit S; Original Record, 57.
6 Petition, 8; Rollo, 9.
7 Ibid., 8-9; Rollo, 9-10.
8 Ibid., 9, Rollo, 10.
9 Reliance Surety and Insurance Co., Inc. vs. NLRC, et al., 193 SCRA 365 (1991).
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, assailing
the Resolution 1 of the National Labor Relations Commission in NLRC NCR CASE NO.
00094-90, which dismissed the complaint of San Miguel Corporation (SMC), seeking to
dismiss the notice of strike given by the private respondent union and to compel the
latter to comply with the provisions of the Collective Bargaining Agreement (CBA) 2 on
grievance machinery, arbitration, and the no-strike clause, with prayer for the issuance
of a temporary restraining order.
The antecedent facts are as follows:
In July 1990, San Miguel Cooperation, alleging the need to streamline its operations due
to financial loses, shut down some of its plants and declared 55 positions as redundant
listed as follows: seventeen (17) employees in the Business Logistics Division ("BLD"),
seventeen (17) in the Ayala Operations Center (AOC), and eighteen (18) in the
Magnolia-Manila Buying Station ("Magnolia-MBS"). 3 Consequently, the private
respondent union filed several grievance cases for the said retrenched employees,
praying for the redeployment of the said employees to the other divisions of the
company.
The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of
the parties' 1990 Collective Bargaining Agreement providing for the following
procedures, to wit:
Sec.5. Processing of Grievance. — Should a grievance arise, an earnest effort shall be
made to settle the grievance expeditiously in accordance with the following procedures:
Step 1. — The individual employee concerned and the Union Directors, or the Union
Steward shall, first take up the employee's grievance orally with his immediate superior.
If no satisfactory agreement or adjustment of the grievance is reached, the grievance
shall, within twenty (20) working days from the occurrence of the cause or event which
gave rise to the grievance, be filed in writing with the Department Manager or the next
level superior who shall render his decision within ten (10) working days from the receipt
of the written grievance. A copy of the decision shall be furnished the Plant Personnel
Officer.
Step 2. — If the decision in Step 1 is rejected, the employee concerned may elevate or
appeal this in writing to the Plant Manager/Director or his duly authorized representative
within twenty (20) working days from the receipt of the Decision of the Department
Manager, Otherwise, the decision in Step 1 shall be deemed accepted by the employee.
The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the
necessity, of conducting grievance meetings. If necessary, the Plant Manager/Director
and the Plant Personnel Officer shall meet the employee concerned and the Union
Director/Steward on such date(s) as may be designated by the Plant Manager. In every
plant/office, Grievance Meetings shall be scheduled at least twice a month.
The Plant Manager shall give his written comments and decision within ten (10) working
days after his receipt of such grievance or the date of submission of the grievance for
resolution, as the case may be. A copy of his Decision shall be furnished the Employee
Relations Directorate.
Step 3. — If no satisfactory adjustment is arrived at Step 2, the employee may appeal
Company through the hiring office of the Union and that membership in good standing with the
Union shall be a strict requirement as a condition of employment of all unlicensed members
employed by the said Company . . ."
"Upon written notification by the Union that an unlicensed member of the crew is no longer in good
standing with the UNION, the COMPANY shall immediately dismiss such crew member from
employment; provided, however, that the UNION shall assume all the responsibilities and shall
answer for any and all liabilities that may arise by virtue of such dismissal." [Paragraphs 1 and 2,
was renewed, and also when respondents herein filed their answer to the instant petition
for certiorari.
3 Petitioners here were not members of either the Philippine Labor Federation or the General
FELICIANO, J.:
In this Petition, petitioner Lopez Sugar Corporation seeks reversal of the Decision dated 2 July 1986
of public respondent National labor Relations Commission ("NLRC") which affirmed the decision of
the Labor Arbiter dated 30 September 1983. The Labor Arbiter (a) had denied petitioner's application
to retrench some of its employees and (b) had ordered the reinstatement of twenty-seven (27)
employees and to pay them full backwages from the time of termination until actual reinstatement.
Petitioner, allegedly to prevent losses due to major economic problems, and exercising its privilege
under Article XI, Section 2 of its 1975-1977 Collective Bargaining Agreement ("CBA") entered into
between petitioner and private respondent Philippine Labor Union Association ("PLUA-NACUSIP"),
caused the retrenchment and retirement of a number of its employees.
Thus, on 3 January 1980, petitioner filed with the Bacolod District Office of the then Ministry of Labor
and Employment ("MOLE") a combined report on retirement and application for clearance to
retrench, dated 28 December 1979, 1 affecting eighty six (86) of its employees. This was docketed
as NLRC Case Ne. A-217-80. Of these eighty-six (86) employees, fifty-nine (59) were retired
effective 1 January 1980 and twenty-eight (27) were to be retrenched effective 16 January 1980 "in
order to prevent losses."
Also, on 3 January 1980, private respondent Federation of Free Workers ("FFW"), as the certified
bargaining agent of the rank-and-file employees of petitioner, filed with the Bacolod District Office of
the MOLE a complaint dated 27 December 1979 for unfair labor practices and recovery of union
dues docketed as NLRC Case No. A-198-80. In said complainant, FFW claimed that the
terminations undertaken by petitioner were violative of the security of tenure of its members and
were intended to "bust" the union and hence constituted an unfair labor practice. FFW claimed that
after the termination of the services of its members, petitioner advised 110 casuals to report to its
personnel office. FFW further argued that to justify retrenchment, serious business reverses must be
"actual, real and amply supported by sufficient and convincing evidence." FFW prayed for
reinstatement of its members who had been retired or retrenched.
Petitioner denied having hired casuals to replace those it had retired or retrenched. It explained that
the announcement calling for 110 workers to report to its personnel office was only for the purpose
of organizing a pool of extra workers which could be tapped whenever there were temporary
vacancies by reason of leaves of absence of regular workers.
On 22 January 1980, another report on retirement affecting an additional twenty-five (25) employees
effective 1 February 1980 was filed by petitioner. 2
On 3 March 1980, petitioner filed its Position Paper in NLRC Case No. A-217-80 contending that
certain economic factors jeopardizing its very existence rendered the dismissals necessary.
Petitioner explained:
As a business firm, the Applicant must earn [a] fair return of (sic) its investment. Its income is
generated from the sales of the Central's shares of sugar and molasses production. It has however
no control of the selling price of both products. It is of common knowledge that for the past years the
price of sugar has been very low. In order to survive, the Applicant has effected several forms of
cost reduction. Now that there is hope in the price of sugar the applicant is again faced with two
major economic problems, i.e., the stoppage of its railway operation and the spiralling cost of
production.
The Applicant was forced to stop its railway operation because the owners of the land upon which
the Applicant's railway lines traverse are no longer willing to allow the Applicant to make further use
of portions of their lands. . . .
The other economic problem that confronted the Applicant is the rising cost of labor, materials,
supplies, equipment, etc. These two major economic problems the rising cost of production and the
stoppage of its railway facilities, put together pose a very serious threat against the economic
survival of the Applicant. In view of this, the Applicant was constrained to touch on the last phase of
Footnotes
1 Rollo, pp. 38-39; Annexes "A" and "A-l" of Petition.
2 Id., pp. 40-41; Annexes "B" and "B-1" of the Petition.
3 Id., pp. 46-48; Annex "E" of Petition.
4 Id., pp. 86-100; Annex "J" of Petition.
5 Id., pp. 114-119; Annex "L" of Petition.
6 Id., p. 20.
7 Indino v. National Labor Relations Commission, et al., G.R. No. 80352, September 29, 1989.
8 153 SCRA 639 (1987); See also Camara Shoes v. Kapisanan ng Manggagawa sa Camara
Shoes,173 SCRA 127 (1989); and Indino v. National Labor Relation Commision, supra.
9 153 SCRA at 651.
10 Rollo, p. 98.
11 Mamerto v. Inciong, 118 SCRA 265 (1982); Atlas Consolidated Mining and Development Corp. v.
National Labor Relations Commission, 167 SCRA 758 (1988); Reyes v. Minister of Labor, 170
SCRA 134 (1989); Bristol Laboratories Employees Association-DFA, et al. v. National Labor
Relations Commission, et al., G.R. No. 87974, 2 July 1990.
12 In its Petition, petitioner alleged that:
1. Based on its sugar mills' rated capacity of 7,500 to 8,000 tons of cane per day, petitioner's
production figures were as follows:
Crop Year Cane Deliveries Rate of Degree Sugar Rate
(CY) inTons Increase Mill Recoveries Increase
MENDOZA, J.:
This is a petition for certiorari to set aside the resolution dated October 10, 1991 of the National
Labor Relations Commission in NLRC NCR Case No. 000977-90, dismissing the appeal of
petitioner Manila Central LineCorporation from the order of Labor Arbiter Donato G. Quinto, Jr. in
NLRC NCR Case No. 02-00813-90, as well as the resolution dated March 11, 1993 of the NLRC,
denying reconsideration.
This case arose out of a collective bargaining deadlock between petitioner and private
respondent ManilaCentral Line Free Workers Union-National Federation of Labor. The parties'
collective bargaining agreement had expired on March 15, 1989. As the parties failed to reach a new
agreement, private respondent sought the aid of the National Conciliation and Mediation Board 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. At
the initial hearing before the labor arbiter, the parties declared that conciliation efforts before the
NCMB had terminated and it was their desire to submit the case for compulsory arbitration.
Accordingly, they were required to submit their position papers and proposals, which they did, and in
which they indicated portions of their respective proposals to which they agree, leaving the rest for
arbitration. 1
On September 28, 1990, the labor arbiter rendered a decision embodying provisions for a new
collective bargaining agreement. The dispositive portion of his decision reads:
WHEREFORE, the petitioner UNION and the respondent COMPANY are directed to execute and
formalize their new five-year collective bargaining agreement (CBA) retroactive to the date of expiry
of the 1986-1989 CBA by adopting the provisions in the aforementioned text which incorporated
therein in the dispositions set forth by this Arbitrator within thirty (30) days from receipt of this
Decision.
SO ORDERED. 2
Petitioner appealed, but its appeal was denied by the NLRC in its questioned resolution of October
10, 1991. On March 11, 1993, the NLRC denied petitioner's motion for reconsideration. Hence, this
petition with the following assignment of errors:
a) The NLRC erred in affirming the Labor Arbiter's decision —
1. increasing the commission rate, the incentive pay, the salaries and wage of the fixed income
employees covered by the CBA;
2. granting P500.00 signing bonus to the complaint-appellee; and
3. holding that the effectivity of the renegotiated CBA shall be retroactive to March 15, 1989, the
expiry date of the old CBA.
b) There are serious errors in the findings of facts of the Labor Arbiter which were unqualified
affirmed by the NLRC and which justify the review by this Honorable SUPREME COURT;
c) The NLRC erred in upholding the jurisdiction of the Labor Arbiter; and
d) The NLRC erred in affirming the finalization of the CBA by the Labor Arbiter in disregard of the
provisions agreed upon by the parties.
The petition is without merit. We shall deal with these contentions in the order they are presented,
with the exception of the argument concerning the jurisdiction of the Labor Arbiter (par. (c)), which
we shall treat first since it raises a threshold question.
First. 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
GANCAYCO, J.:
The principal issue in this case is whether or not the purchaser of the assets of an employer
corporation can be considered a successor employer of the latter's employees.
Private respondent Hotel Mabuhay, Inc. (Mabuhay for short,) leased the premises belonging to
Santiago Syjuco, Inc. (Syjuco for short) located at 1430 A. Mabini St., Ermita, Manila. However, due
to non-payment of rentals, a case for ejectment was filed by Syjuco against Mabuhay in the
Metropolitan Trial Court of Manila. Mabuhay offered to amicably settle the case by surrendering the
premises to Syjuco and to sell its assets and personal property to any interested party.
Syjuco offered the said premises for lease to petitioner. The negotiation culminated with the
execution of the lease agreement on April 16, 1987 to commence on May 1, 1987 and to expire on
April 30,1992. 1 Mabuhay offered to sell its assets and personal properties in the premises to
petitioner to which petitioner agreed. A deed of assignment of said assets and personal properties
was executed by Mabuhay on April 29,1987 in favor of petitioner. 2
On same date Syjuco formally turned over the possession of the leased premises to petitioner who
actually took possession and occupied the same on May 1, 1987.
On May 4, 1987, respondent National Union of Workers in Hotel, Restaurant and Allied Services
(NUWHRAIN for short) picketed the leased premises, barricaded the entrance to the leased
premises and denied petitioner's officers, employees and guests free access to and egress from said
premises. Thus, petitioner wrote a letter-complaint to Syjuco.
A complaint for damages with preliminary injunction and/or temporary restraining order was filed by
petitioner on May 7, 1987 with the Regional Trial Court of Manila docketed as Civil Case No.
87-40436. On the same day, the Executive Judge of said court issued a restraining order against
respondent NUWHRAIN and its officers and members as prayed for in the petition. Nevertheless,
NUWHRAIN maintained their strike on the subject premises but filed an answer to the complaint.
On May 14, 1987, an order was issued by public respondent Secretary of Labor assuming
jurisdiction over the labor dispute pursuant to Article 263(g) of the Labor Code as amended and in
the interim, requiring all striking employees to return to work and for respondent Mabuhay to accept
all returning employees pending final determination of the issue of the absorption of the former
employees of Mabuhay. The parties were also directed to submit their respective position papers
within ten (10) days from receipt of the order.
On May 25, 1987, Mabuhay submitted its position paper alleging among others that it had sold all its
assets and personal properties to petitioner and that there was no sale or transfer of its shares
whatsoever and that Mabuhay completely ceased operation effective April 28,1987 and surrendered
the premises to petitioner so that there exists a legal and physical impossibility on its part to comply
with the return to work order specifically on absorption.
On June 26, 1987, petitioner in order to commence its operation, signed a tri-partite agreement so
the workers may lift their strike, by and among petitioner, respondents NUWHRAIN and Mabuhay
whereby the latter paid to respondent NUWHRAIN the sum of P 638,000.00 in addition to the first
payment in the sum of P 386,447.11, for which reason respondent NUWHRAIN agreed to lift the
picket . 3
Respondent NUWHRAIN on July 13, 1987 filed its position paper alleging connivance between
Mabuhay and petitioner in selling the assets and closing the hotel to escape its obligations to the
employees of Mabuhay and so it prays that petitioner accept the workforce of Mabuhay and pay
backwages from April 15,1986 to April 28,1987, the day Mabuhay stopped operation.
On the other hand, petitioner filed a "Partial Motion for Reconsideration and Position Paper," alleging
that it was denied due process; that there were serious errors in the findings of fact which would
Footnotes
1 Annex B to petition.
2 Annex C to petition.
3 Annex K to petition.
4 Annex N to petition.
5 Fernando vs. Angat Labor Union, 5 SCRA 248, 251 (1962).
6 Visayan Transportation Co., Inc. vs. Java, 93 Phil. 962, 967-968 (1953).
7 MDII Supervisors & Confidential Employees Association vs. Presidential Assistant on Legal affairs,
79 SCRA 40 (1977).
8 Majestic and Republic Theaters Employees' Association vs. CIR, 4 SCRA 457, 460 (1962); Cruz
vs. PAFLU, 42 SCRA 68, 77-78 (1971).
9 Annex C to petition, page 27, Rollo.
10 Annex K to petition; page 54, Rollo.
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Petitioners filed their answer on September 28, 1963 denying the alleged
discrimination against respondent Andrada and the alleged unjust refusal on their
part to implement the wage scale under the Collective Bargaining Agreements.
Issues having been joined, trial was conducted. On March 23, 1965,
Associate Judge Amando Bugayong before whom the hearings were made,
rendered decision finding petitioners guilty of unfair labor practice based on the
Accordingly, petitioners were ordered "to implement the salary scale with
respect to the daily wage of complainant Donaciano S. Andrada from 1954 until his
wage reaches the level as embodied in the collective bargaining agreements
between the Benguet-Balatoc Workers Union, the complainant labor organization,
and the respondent company."
Petitioners subsequently moved for reconsideration, which the lower
court, en banc, denied altho one of the five judges dissented. They then elevated
the case to this Court for review by way of certiorari. Pending the appeal and at
petitioners' instance, this Court issued preliminary injunction to prevent immediate
execution of the judgment.
Petitioners' principal submission, in the first three errors assigned, is that they
were held liable for discriminating against respondent Andrada in 1954 on account
of militant union activities which, however, were conducted in 1958. This is
erroneous on two counts. First, what was charged was not discrimination committed
in 1954 alone but rather continuing acts of discrimination committed "starting 1954"
as alleged in par. 3 of the complaint for unfair labor practice. The charge of
discrimination, consisting in petitioners' refusal to implement the proper salary scale
as to respondent Andrada is adequately supported by the following findings of the
court a quo. In August, 1954, Andrada's category was changed to clerk first class
but he received no salary adjustment unlike the other employees. In 1955, after he
was transferred to the Purchasing Department and was assigned to perform the
work done by one Ramon Alvia who held the category of bodeguero (with a higher
pay rate) respondent Andrada still received no corresponding pay increase. In July,
1962, there was a general pay hike but Andrada was not benefitted.
Second, the militant union activity, involved is not Andrada's having been
elected as Union District Governor and Steward and his actuations as such, but
rather Andrada's having sought the help of his union in pursuing what he believed
was his right to salary adjustment. It should be noted that the damaging statement
on this score 3imputed to co-petitioners Stanley Willimont and Eugene Kneebone by
respondent Andrada in his testimony to which the court a quo gave credence, were
never denied or controverted by them. And 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.
The claim that respondent Andrada was guilty of laches is without merit. The
discriminations, from 1954 to 1962, were continuing. Moreover, as counsel for
respondents correctly points out, the unfair labor practice charge was filed only in
1963 because respondent's complaint was first coursed thru a series of conciliation
meetings between the union and petitioner company.
In this connection, petitioner's final submission that respondent's complaint
had already been satisfactorily settled in the grievance proceedings as the latter
himself admitted is not borne out in the portion of Andrada's testimony reproduced
in Annex D of the petition. What could be inferred therefrom is that respondent
Andrada, who was on a monthly wage basis, refused to be classified on a daily
wage basis. But as the lower court found, 4respondent was justified in so refusing,
since; an employee on a daily wage basis gets less than one on the monthly basis
assuming the pay rate to be the same. This finding of the court is based on the
admission of Willimont, one co-petitioner company's own officials.
In fine, this Court finds that the findings of fact below furnish satisfactory
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TEEHANKEE, J.:
The Court sets aside respondent director's appealed resolution and rules in
accordance with the prevailing law and settled jurisprudence that the petitioner
union consisting of the members-employees of respondent corporation is the
principal party to the collective bargaining agreement (rather than the respondent
mother union which is merely its agent) and is therefore entitled to be recognized
as the sole and exclusive bargaining representative entitled to administer and
enforce the collective bargaining agreement with the employer corporation.
The undisputed antecedent facts which gave rise to the present petition are stated
in the petition as follows:
2. That sometime on February 1974, petitioner-Elisco Elirol Labor Union (NAFLU),
negotiated and executed a collective bargaining agreement with respondent-Elizalde
Steel Consolidated, Inc. 1
3. That upon verification by individual petitioners at the Registration division,
Bureau of Labor Relations, Department of Labor, the Elisco-Elirol Labor Union
(NAFLU), the contracting party in said collective bargaining agreement, was not
then registered and therefore not entitled to the benefits and privileges embodied
in said collective bargaining agreement; thus on March 3, 1975, the member of
petitioner-appellant union in a general membership meeting decided in a
resolution to register their union to protect and preserve the integrity and
inviolability of the collective bargaining agreement between the Elisco-Elirol Labor
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PUNO, J.:
Petitioner corporation and private respondent labor union entered into a three -
year Collective Bargaining Agreement (CBA) with expiry date on November 27,
1991. During the freedom period the National Federation of Labor Unions
(NAFLU) questioned the majority status of Private respondent through a petition
for certification election. The election conducted on February 27, 1992 was won
by private respondent. On March 19, 1992, private respondent was certified as
the sole and exclusive bargaining agent of petitioner's rank-and-file employees.
On June 22, 1992, private respondent's CBA proposals were received by
petitioner. Counter-proposals were made by petitioner. Negotiations collapsed,
and on August 24, 1992, private-respondent filed a Notice of Strike with the
National Conciliation and Mediation Board (NCMB). The NCMB tried but failed to
settle the parties' controversy.
On September 30, 1992, public respondent Secretary of Labor assumed
jurisdiction over the dispute. She resolved the bargaining deadlock between the
parties through an Order, dated March 4, 1993, which reads, in part:
xxx xxx xxx
A. The non-economic issues
1. Scope/coverage of the CBA. Article I of the 1988 CBA provides:
The Company recognizes the Union as the sole and exclusive collective
bargaining representative of all the stevedores, dockworkers, gang bosses,
foremen, rank and file employees working at Pier 8, North Harbor and its offices
and said positions are [sic] listed in ANNEX "A" hereof.
As such representative the UNION is designated as the collective bargaining
agent with respect to and concerning the terms and conditions of employment and
the interpretations and implementation of the provisions and conditions of this
COMPANY UNION
5
. Vacation and sick leave 17 days vacation and sick leave i) For all covered employees
17 days sick leave per year and 17 days sick than gang
of service
of service
years of service up to 10
years of service
years of service
except that:
days; and
pay, as follows:
of immediate member of
operators.
in a calendar year
calendar year
Footnotes
1 Order of the Secretary of Labor and Employment, dated March 4,
1993. See Annex "A" to Petition, p. 27- 47 of Rollo.
2 Rollo, pp. 6-7.
3 See Philippine Appliance Corporation v. Laguesma, 226 SCRA 730 (1993);
Pagkakaisa ng mga Manggagawa sa Triumph International-United Lumber and
General Workers of the Philippines v. Ferrer-Calleja, 181 SCRA 119 (1990). See
also Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12 (1992);
Philtranco Service Enterprises v. Bureau of Labor Relations, 174 SCRA 338
(1989).
4 See Southern Philippines Federation of Labor (SPFL) v. Calleja, 172 SCRA 676
(1989).
5 See Ballentine's Law Dictionary, 3rd Edition (1969); Webster's Third New
International Dictionary (1971).
6 Black's Law Dictionary, 6th Edition (1990).
7 Webster's Third New International Dictionary (1971).
8 See Black's Law Dictionary, 6th Edition (1990).
9 210 SCRA 471 (1989).
10 National Congress of Unions in the Sugar Industry of the Philippines v. Ferrer -
Calleja, 205 SCRA 478 (1992).
11 Rollo, pp. 44-45.
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KAPUNAN, J.:
May the term of a Collective Bargaining Agreement (CBA) as to its economic
provisions be extended beyond the term expressly stipulated therein, and, in the
absence of a new CBA, even beyond the three -year period provided by law? Are
employees hired after the stipulated term of a CBA entitled to the benefits provided
thereunder?
These are the issues at the heart of the instant petition for certiorari with prayer for
the issuance of preliminary injunction and/or temporary restraining order filed by
petitioner New Pacific Timber & Supply Company, Incorporated against the
National Labor Relations Commission (NLRC), et. al., and the National Federation
of Labor, et. al.
The antecedents facts, as found by the NLRC, are as follows:
The National Federation of Labor (NFL, for brevity) was certified as the sole and
exclusive bargaining representative of all the regular rank -and-file employees of
New Pacific Timber & Supply Co., Inc. (hereinafter referred to as petitioner
Company). 1 As such, NFL started to negotiate for better terms and conditions of
employment for the employees in the bargaining unit which it represented.
However, the same was allegedly met with stiff resistance by petitioner Company,
so that the former was prompted to file a complaint for unfair labor practice (ULP)
against the latter on the ground of refusal to bargain collectively. 2
On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an
order declaring (a) herein petitioner Company guilty of ULP; and (b) the CBA
proposals submitted by the NFL as the CBA between the regular rank -and-file
employees in the bargaining unit and petitioner Company. 3
Petitioner Company appealed the above order to the NLRC. On November 15,
1989, the NLRC rendered a decision dismissing the appeal for lack of merit. A
motion for reconsideration thereof was, likewise, denied in a Resolution, dated
SO ORDERED.
Davide, Jr., C.J., Puno and Ynares-Santiago, JJ., concur.
Pardo, J., is on official business abroad.
Footnotes
1 Rollo, p. 42.
2 Ibid.
3 Id., at 42.
4 Id., at 43.
5 Id., at 43.
REVISED PAGE
Until a new CBA is 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 agreement. The
law does not provide for any exception nor qualification on which economic provisions of the existing
agreement are to retain its force and effect. Therefore, it must be understood as encompassing all
the terms and conditions in the said agreement.13
The CBA during its lifetime binds all the parties. The provisions of the CBA must be respected since
its terms and conditions "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 and ask redress. 14 The CBA is the norm of conduct
between petitioner and private respondent and compliance therewith is mandated by the express
policy of the law.15
On the second issue, FAMIT avers that MIT unilaterally modified the CBA formula in determining the
salary of a high school faculty. MIT counters that it is entitled to consider the actual number of
teaching hours to arrive at a fair and just salary of its high school faculty.
Again, we are in agreement with FAMIT‟s submission. We rule that MIT cannot adopt its unilateral
interpretation of terms in the CBA. It is clear from the provisions of the 2001 CBA that the salary of a
high school faculty member is based on a rate per load and not on a rate per hour basis. Section 2,
Article VI of the 2001 CBA provides:
xx x x
Section 2. The INSTITUTE shall pay the following rate per load for high school faculty according to
corresponding faculty rank, to wit:
· 25% increase in per rate/load for all high school faculty members effective November 2000.
· 10% increase in per rate/load for all permanent high school faculty members effective June
2001.16 (Emphasis supplied.)
In our view, there is no room for unilateral change of the formula by MIT. Needless to stress, the
Labor Code is specific in enunciating that in case of doubt in the interpretation of any law or
provision affecting labor, such should be interpreted in favor of labor. 17 The appellate court
committed a grave error in the interpretation of the CBA provision and the governing law.
WHEREFORE, the instant petition is GRANTED. The Decision dated August 21, 2003 and the
Resolution dated June 3, 2004 of the Court of Appeals denying the motion for reconsideration
are REVERSED and SET ASIDE. The decision of the Office of the Voluntary Arbitrators
is REINSTATED. MIT‟s unilateral change in the ranking of college faculty from 19 levels to 23 levels,
and the computation of high school faculty salary from rate per load to rate per hour basis
is DECLARED NULL AND VOID for being violative of the parties‟ CBA and the applicable law.
156098, June 27, 2005, 461 SCRA 319, 327, citing Mactan Workers Union v. Aboitiz, No. L-30241,
June 30, 1972, 45 SCRA 577, 581.
15 Dole Philippines, Inc. v. Pawis ng Makabayang Obrero, G.R. No. 146650, January 13, 2003, 395
11 February 1999, 303 SCRA 113; Cesario A. Azucena, Jr., II The Labor Code with Comments and
Cases 210 (5th ed. 2004) [The Labor Code with Comments and Cases].
24 Rollo, pp. 880-886.
25 Unicorn Safety Glass, Inc. v. Basarte, G.R. No. 154689, 25 November 2004, 444 SCRA
287; Benguet Electric Cooperative v. Fianza, G.R. No. 158606, 9 March 2004, 425 SCRA 41.
26
II The Labor Code with Comments and Cases 214.
27 ART. 261, Labor Code. 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.
28 Rollo, pp. 110-112.
29
Allied Banking Corp. v. NLRC, G.R. No. 116128, 12 July 1996, 258 SCRA 724.
30
Telefunken Semiconductors Employees Union-FFW v. Sec. of Labor and Employment, 347 Phil.
447 (1997); St. Scholastica's College v. Torres, G.R. No. 100158, 29 June 1992, 210 SCRA 565.
31 Rollo, p. 444.
32
Id. at 35.
33 Id. at 1006.
34 Id. at 996.
35
Id. at 38-39.
36
Asian Transmission Corporation v. NLRC, G.R. No. 88725, 22 November 1989, 179 SCRA 582.
37 Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel, Restaurant and Allied
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P 395,160.2
1
=========
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The other claims are
dismissed.
11 Docketed as CA-G.R. SP No. 89587; rollo, pp. 117-143.
12 Supra note 2, p. 154.
13
Supra note 4, pp. 178-180.
14
Sec. 27. Offer of compromise not admissible. – In civil cases, an offer of
compromise is not an admission of any liability, and is not admissible in evidence
against the offeror.
15 G.R. Nos. 158190-91, June 21, 2006, 401 SCRA 604, 626 -627.
16 32 C.J.S. Evidence § 522.
17 Marshall v. Taylor, 168 Mo. 9, 240, 248, 153 S.W. 527; Perkins v. Concord R.
Co., 44 H.H. 223; Pirie v. Wyld, 11 Ont. 422; New Country Corp. v. Toronto Gravel
Road, etc. C., 3 Ant. 584.
18 15 A.L.R.3d 13, §2 (a).
19
Supra note 16.
20
Hanjin Engineering and Construction Co., Ltd. v. Court of Appeals, G.R. No.
165910, April 10, 2006 487 SCRA 78; Aliten v. U-Need Lumber & Hardware, G.R.
No. 168931, September 12, 2006, 501 SCRA 577.
21 Hantex Trading Co., Inc., et al. v. Court of Appeals, G.R. No. 148241, September
1999, 317 SCRA 420; Dagupan Bus Company v. National Labor Relations
Commission, G.R. No. 94291, November 9, 1990, 191 SCRA 328.
24 Duldulao v. Court of Appeal, G.R. No. 164893, March 1, 2007, 517 SCRA 191;
Heirs of the Late Panfilo V. Pajarillo v. Court of Appeals, G.R. Nos. 155056 -57,
October 19, 2007, 537 SCRA 96.
25
Supra note 19.
26
Big AA Manufacturer v. Antonio, et al., G.R. No. 160854, March 3, 2006, 484
SCRA 33.
27
G.R. No. 143204, June 26, 2001, 359 SCRA 686.
28 See Ruperto Suldao v. Cimech System Construction, Inc., et al., G.R. No.