CASE NO.

G.R. No. 84433. June 2, 1992

ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138 others, petitioners, vs.
CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor Relations, Med-Arbiter PATER-
NO ADAP, and TRI-UNION EMPLOY-EES UNION, et al., respondents

FACTS:

The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano Trajano) sustained the denial by the
Med Arbiter of the right to vote of one hundred forty-one (141) members of the "Iglesia ni Kristo" (INK), all
employed in the same company, at a certification election at which two (2) labor organizations were contesting
the right to be the exclusive representative of the employees in the bargaining unit.

The certification election was authorized to be conducted by the Bureau of Labor Relations among the employ-
ees of TriUnion Industries Corporation on October 20, 1987. The competing unions were the Tri-Union Em-
ployees Union-Organized Labor Association in Line Industries and Agriculture (TUEUOLALIA), and Trade
Union of the Philippines and Allied Services (TUPAS). Of the 348 workers initially deemed to be qualified vot-
ers, only 240 actually took part in the election, conducted under the supervision of the Bureau of Labor Rela-
tions, Among the 240 employees who cast their votes were 141 members of the lNK.

The final tally of the votes showed the following results;

TUPAS-1; TUEU-OLALIA-95; NO UNION-1; SPOILED-1; CHALLENGED-141

The challenged votes were those cast by the 141 INK members. They were segregated and excluded from the
final count in virtue of an agreement between the competing unions, reached at the pre-election conference that
the INK members should not be allowed to vote "because they are not members of any union and refused to
participate in the previous certification elections."

The INK employees promptly made known their protest to the exclusion of their votes. TUEU-OLALIA op-
posed the petition. It contended that the petitioners "do not have legal personality to protest the results of the
election," because "they are not members of either contending unit, but ** of the INK" which prohibits its fol-
lowers, on religious grounds, from joining or forming any labor organization **."

The Med-Arbiter saw no merit in the INK employees' petition. By Order, he certified the TUEUOLALIA as the
sole and exclusive bargaining agent of the rank-and-file employees. In that Order he decided the fact that "reli-
gious belief was (being) utilized to render meaningless the rights of the non-members of the Iglesia ni Kristo to
exercise the rights to be represented by a labor organization as the bargaining agent," and declared the petition-
ers as "not possessed of any legal personality to institute this present cause of action" since they were not parties
to the petition for certification election.

The petitioners brought the matter up on appeal to the Bureau of Labor Relations. Assistant Labor Secretary
Cresenciano B. Trajano, denied the appeal. He opined that the petitioners are "bereft of legal personality to
protest their alleged disenfranchisement" since they "are not constituted into a duly of ganized labor union,
hence, not one of the unions which vied for certification as sole and exclusive bargaining representative." He
also pointed out that the petitioners "did not participate in previous certification elections in the company for the
reason that their religious beliefs do not allow them to form, join or assist labor organizations.”

ISSUE: WON the members of the INC should not be allowed to vote because they refused to participate in the
previous certification elections.
RULING:

The right to self-organization includes the right not to form or join a union.—Logically, the right NOT to join,
affiliate with, or assist any union, and to disaffiliate or resign from a labor organization, is subsumed in the right
to join, affiliate with, or assist any union, and to maintain membership therein. The right to form or join a labor
organization necessarily includes the right to refuse or refrain from exercising said right. The fact that a person
has opted to acquire membership in a labor union does not preclude his subsequently opting to renounce such
membership.

The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the em-
ployees in the appropriate bargaining unit: to be or not to be represented by a labor organization. If the results of
the election should disclose that the majority of the workers do not wish to be represented by any union, then
their wishes must be respected, and no union may properly be certified as the exclusive representative of the
workers in the bargaining unit. The minority employees—who wish to have a union represent them in collective
bargaining—can do nothing but wait for another suitable occasion to petition for a certification election and
hope that the results will be different. As repeatedly stated, the right of self-organization embraces not only the
right to form, join or assist labor organizations, but the concomitant, converse right NOT to form, join or assist
any labor union.

INK employees have the right to participate in a certification election and vote for "No Union."That the INK
employees, as employees in the same bargaining unit in the true sense of the term, do have the right of self-or-
ganization, as well as the fact that when they voted that the employees in their bargaining unit should be repre-
sented by "NO UNION," they were simply exercising that right of self-organization. The respondents' argument
that the petitioners are disqualified to vote because they are not constituted into a duly organized labor union and
hence, not one of the unions which vied for certification as sole and exclusive bargaining representative is spe-
cious. Neither law, administrative rule nor jurisprudence requires that only employees affiliated with any labor
organization may take part in a certification election. On the contrary, the plainly discernible intendment of the
law is to grant the right to vote to all bona fide employees in the bargaining unit, whether they are members of a
labor organization or not,

Failure to take part in previous elections no bar to right to participate in future elections.—Neither does the con-
tention that petitioners should be denied the right to vote because they "did not participate in previous certifica-
tion elections in the company for the reason that their religious beliefs do not allow them to form, join or assist
labor organizations," persuade acceptance. No law, administrative rule or precedent prescribes forfeiture of the
right to vote by reason of neglect to exercise the right in past certification elections. In denying the petitioners'
right to vote upon these egregiously fallacious grounds, the public respondents exercised their discretion whim-
sically, capriciously and oppressively and gravely abused the same.

——o0o——

CASE NO. 2

G.R. No. 124224. March 17, 2000

NEW PACIFIC TIMBER & SUPPLY COMPANY, INC., petitioner, vs. NATIONAL LABOR RELA-
TIONS COMMISSION, MUSIB M. BUAT, LEON G. GONZAGA, JR., ET AL., NATIONAL FEDERA-
TION OF LABOR, MARIANO AKILIT and 350 OTHERS, respondents
FACTS:

The National Federation of Labor (NFL, for brevity) was certified as the sole and exclusive bargaining represen-
tative of all the regular rank-and-file employees of New Pacific Timber & Supply Co., Inc. (hereinafter referred
to as petitioner Company). 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 resis-
tance 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.

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.

Labor Arbiter Abdulwahid’s Order granting monetary benefits consisting of wage increases, housing al-
lowances, bonuses, etc. to the regular rank-and-file employees. Directing petitioner Company to pay the 142
employees entitled to the aforesaid benefits the respective amounts due them under the CBA. Petitioner Compa-
ny complied; and, the corresponding quitclaims were executed.

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.

Treating the petition for relief as an appeal, the NLRC entertained the same. Commission issued a resolution
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.

Petitioner argues that the private respondents are not entitled to the benefits under the CBA because employees
hired after the term of a CBA are not parties to the agreement, and therefore, may not claim benefits thereunder,
even if they subsequently become members of the bargaining unit.

ISSUES:
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 pro-
vided by law? Are employees hired after the stipulated term of a CBA entitled to the benefits provided thereun-
der?

HELD:

Petitioner’s contentions are untenable.

Until a new Collective Bargaining Agreement has been executed by and between the parties, they are duty
bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing
agreement.—It is clear from the above provision of law that until a new Collective Bargaining Agreement has
been executed by and between the parties, they are duty-bound to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement. The law does not provide for any exception
nor qualification as to which of the economic provisions of the existing agreement are to retain force and effect;
therefore, it must be understood as encompassing all the terms and conditions in the said agreement.

When a collective bargaining contract is entered into by the union representing the employees and the employer,
even the non-member employees are entitled to the benefits of the contract.—In a long line of cases, this Court
has held that when a collective bargaining contract is entered into by the union representing the employees and
the employer, even the non-member employees are entitled to the benefits of the contract. To accord its benefits
only to members of the union without any valid reason would constitute undue discrimination against nonmem-
bers. It is even conceded, that a laborer can claim benefits from a CBA entered into between the company and
the union of which he is a member at the time of the conclusion of the agreement, after he has resigned from
said union.

——o0o——

CASE NO. 3

G.R. No. 127598. January 27, 1999

MANILA ELECTRIC COMPANY, petitioner, vs. THE HONORABLE SECRETARY OF LABOR

LEONARDO QUISUMBING and MERALCO EMPLOYEES AND WORKERS ASSOCIATION
(MEWA), respondents

Labor Law; Salaries; Bonus; As a rule, a bonus is not a demandable and enforceable obligation; it may neverthe-
less be granted on equitable considerations as when the giving of such bonus has been the company’s long and
regular practice.—As a rule, a bonus is not a demandable and enforceable obligation; it may nevertheless be
granted on equitable considerations as when the giving of such bonus has been the company’s long and regular
practice. To be considered a “regular practice,” the giving of the bonus should have been done over a long peri-
od of time, and must be shown to have been consistent and deliberate. Thus we have ruled in National Sugar
Refineries Corporation vs. NLRC: “The test or rationale of this rule on long practice requires an indubitable
showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not
covered by the law requiring payment thereof.”

Same; Same; Same.—In the case at bar, the record shows that MERALCO, aside from complying with the regu-
lar 13th month bonus, has further been giving its employees an additional Christmas bonus at the tail-end of the
year since 1988. While the special bonuses differed in amount and bore different titles, it can not be denied that
these were given voluntarily and continuously on or about Christmas time. The considerable length of time
MERALCO has been giving the special grants to its employees indicates a unilateral and voluntary act on its
part, to continue giving said benefits knowing that such act was not required by law.

Same; Same; Same; The giving of the special bonus can no longer be withdrawn by the company as this would
amount to a diminution of the employee’s existing benefits.—Indeed, a company practice favorable to the em-
ployees has been established and the payments made by MERALCO pursuant thereto ripened into benefits en-
joyed by the employees. Consequently, the giving of the special bonus can no longer be withdrawn by the com-
pany as this would amount to a diminution of the employee’s existing benefits.

Same; Labor Union; Prohibition to Join Labor Union; Employees holding a confidential position are prohibited
from joining the union of the rank and file employees.—Both MERALCO and the Office of the Solicitor Gener-
al dispute this ruling because it disregards the rule We have established on the exclusion of confidential employ-
ees from the rank and file bargaining unit. In Pier 8 Arrastre vs. Confesor and General Maritime and Stevedores
Union, we ruled that: “Put another way, the confidential employee does not share in the same ‘community of
interests’ that might otherwise make him eligible to join his rank and file co-workers, precisely because of a
conflict in those interests.” Thus, in Metrolab Industries vs. Roldan-Confesor, We ruled: “. . . . that the Secre-
tary’s order should exclude the confidential employees from the regular rank and file employees qualified to
become members of the MEWA bargaining unit.” From the foregoing disquisition, it is clear that employees
holding a confidential position are prohibited from joining the union of the rank and file employees.

Same; Job-Contracting; The company can determine in its best business judgment whether it should contract out
the performance of some of its work for as long as the employer is motivated by good faith, and the contracting
out must not have been resorted to circumvent the law or must not have been the result of malicious or arbitrary
action.—We recognize that contracting out is not unlimited; rather, it is a prerogative that management enjoys
subject to well-defined legal limitations. As we have previously held, the company can determine in its best
business judgment whether it should contract out the performance of some of its work for as long as the em-
ployer is motivated by good faith, and the contracting out must not have been resorted to circumvent the law or
must not have been the result of malicious or arbitrary action. The Labor Code and its implementing rules also
contain specific rules governing contracting out (Department of Labor Order No. 10, May 30, 1997, Sections 1-
25).

Same; Collective Bargaining Agreement; Article 253-A serves as the guide in determining when the CBA is to
take effect.—Article 253-A serves as the guide in determining when the effectivity of the CBA at bar is to take
effect. It provides that the representation aspect of the CBA is to be for a term of 5 years, while “x x x [A]ll oth-
er provisions of the Collective Bargaining Agreement shall be re-negotiated not later than 3 years after its exe-
cution. Any agreement on such other provision of the Collective Bargaining Agreement entered into within 6
months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining
Agreement shall retroact to the day immediately following such date. If such agreement is entered into beyond 6
months, the parties shall agree on the duration of the effectivity thereof. x x x.”

Same; Same; If no agreement is reached within six (6) months from the expiry date of the three (3) years that
follow the CBA execution, the law expressly gives the parties the discretion to fix the effectivity of the agree-
ment.—Under these terms, it is clear that the 5-year term requirement is specific to the representation aspect.
What the law additionally requires is that a CBA must be re-negotiated within 3 years “after its execution.” It is
in this re-negotiation that gives rise to the present CBA deadlock. If no agreement is reached within 6 months
from the expiry date of the 3 years that follow the CBA execution, the law expressly gives the parties—not any-
body else—the discretion to fix the effectivity of the agreement.

Same; Same; Principle of Hold Over; In the absence of a new CBA, the parties must maintain the status quo and
must continue in full force and effect the terms and conditions of the existing agreement until a new agreement
is reached.—Significantly, the law does not specifically cover the situation where 6 months have elapsed but no
agreement has been reached with respect to effectivity. In this eventuality, we hold that any provision of law
should then apply for the law abhors a vacuum. One such provision is the principle of hold over, i.e., that in the
absence of a new CBA, the parties must maintain the status quo and must continue in full force and effect the
terms and conditions of the existing agreement until a new agreement is reached. In this manner, the law pre-
vents the existence of a gap in the relationship between the collective bargaining parties. Another legal principle
that should apply is that in the absence of an agreement between the parties, then, an arbitrated CBA takes on
the nature of any judicial or quasi-judicial award; it operates and may be executed only respectively unless there
are legal justifications for its retroactive application.

FACTS:

This is a petition for certiorari, MERALCO seeking to annul the orders of Secretary Quisumbing wherein peti-
tioner is required and its’s Rank and File (RnF) union – MEWA to execute a CBA for the remainder of the par-
ties 1992-1997 CBA cycle, and to incorporate in this new CBA the Secretary’s dispositions on the disputed eco-
nomic and non-economic issues.

MEWA informed MERALCO of its intention to re-negotiate the terms of the 1992-97 CBA covering the re-
maining period of 2 years. MERALCO was willing and entered to negotiations, however, both parties failed
arrive in terms acceptable to both parties.

MERALCO petitioned with DOLE praying that the Secretary assume jurisdiction over the labor dispute and to
enjoin the striking employees to go back to work.
 Secretary granted the petition where the cause of his decision is pursuant to Article 263(g) of the Labor Code
and deputizing USEC. Espanol, Jr. to conduct conciliation conferences between the parties. Thereafter, both
parties submitted their memoranda in which Economic Demands (such as wages, Red Circle Rate (RCR) Al-
lowances etc. were generally granted except for resignation benefits, night work) and Political Demands (such
as scope of the collective bargaining unit, union recognition and security, transfer of assignment and job securi-
ty) were granted.
MERALCO filed MR alleging that the Sec. of Labor committed grave abuse of discretion amounting to
lack or excess of jurisdiction in: (1) awarding MEWA P1.142B that would imperil MERALCO’s viability as a
public utility; (2) granting wage increase; (3) incorporation into the CBA of all existing employee benefits; (4)
granting certain political demands presented by the union; and (5) in ordering the CBA to be effect of Dec 1995
instead of Aug 19, 1996 when he resolved the dispute.

Issue: W/N there is a grave abuse of discretion on the part of the Secretary of Labor.

Ruling: The Secretary of Labor disregarded and misappreciated evidence, particularly with respect to the wage
award. The Secretary apparently also acted arbitrarily and even whimsically in considering several legal points;
even the Solicitor General himself considered that the Secretary gravely abused his discretion on at least three
major points: (a) on the signing bonus issue; (b) on the inclusion of confidential employees in the rank and file
bargaining unit, and (c) in mandating a union security closed-shop regime in the bargaining unit.

Doctrine: While We do not seek to enumerate in this decision the factors that should affect wage determination,
we must emphasize that a collective bargaining dispute such as this one requires consideration and proper bal-
ancing of the interests of the parties to the dispute and of those who might be affected by the dispute. To our
mind, the best way in approaching this task holistically is to consider the available objective facts, including,
where applicable, factors such as the bargaining history of the company, the trends and amounts of arbitrated
and agreed wage awards and the companies previous CBAs, and industry trends in general. As a rule, affordabil-
ity, or capacity to pay should be considered but cannot be the sole yardstick in determining the wage award,
especially in public utility like MERALCO. In considering a public utility, the decision maker must always con-
sider the public interest aspects of the case; MERALCOs income and the amount of money available for operat-
ing expenses - including labor costs - are subject to State regulation. We must also keep in mind that high oper-
ating costs will certainly and eventually be passed on to the consuming public as MERALCO has bluntly
warned in its pleadings.

——o0o——

CASE. NO. 4

G.R. No. 99395. June 29, 1993

ST. LUKE’S MEDICAL CENTER, INC., petitioner, vs. HON. RUBEN O. TORRES and ST. LUKE’S
MEDICAL CENTER ASSOCIATION-ALLIANCE OF FILIPINO WORKERS (“SLMCEA-AFW”), re-
spondents

Labor Law; Labor Code; Considering public respondent’s expertise on the subject and his observance of the
cardinal principles of due process, the assailed order deserves to be accorded great respect by this Court.—We
rule that the Order, particularly in its disposition on the economic issues, was not arbitrarily imposed by public
respondent. A perusal of the Order shows that public respondent took into consideration the parties’ respective
contentions, a clear indication that he was keenly aware of their contrary positions. Both sides having been
heard, they were allowed to present their respective evidence. The due process requirement was thus clearly
observed. Considering public respondent’s expertise on the subject and his observance of the cardinal principles
of due process, the assailed Order deserves to be accorded great respect by this Court.

Same; Same; Labor Organization; A duly registered local union affiliated with a national union or federation
does not lose its legal personality or independence.—Only the collective bargaining agent, the local union
SLMCEA in this case, possesses legal standing to negotiate with petitioner. A duly registered local union affili-
ated with a national union or federation does not lose its legal personality or independence.

FACTS:

Sec. Torres, the Secretary of Labor issued an Order requiring St. Luke medical Center and St. Luke Medical
Center Employees Association-Alliance of Filipino Workers (SLMCEA-AFW) to execute and finalize their
1990-1993 CBA. And he further instructed the parties to incorporate in the new CBA the disposition on eco-
nomic and non-economic issues spelled out in said Order.

This new CBA (1990-1993 CBA) will retroact to the date of expiration of the previous CBA (1987-1990 CBA).

Before 1987-1990 CBA expired, there is an internal squabble in AFW resulted to splitting of leadership, and
later on the filing of case in the Dept. of Labor as to that internal conflict (whether who among De Prado and
Diwa is the leader and authorized to collect federation dues). (This however, later ruled in favor of Del Prado).

Pending resolution of the above case, SLMCEA-AFW brought to the attention of St. Luke Medical Center man-
ifesting that they wanted to renew the CBA before it expire.

This triggered a round table talks on which St. Lukes Medical Center proposed a maximum across the board
monthly salary increase of P375 per employee. On the other hand SLMCEA-AFW proposed a P1500 hike or
50% increase based on thelatest salary rate of each employee, whichever is higher.

That talks that then ensued between petitioner and private respondent were disturbed anew when the other wing
in the AFW headed by Purita Ramirez, expressed its objections to the on-going negotiations, and when a peti-
tion for certification election was filed by the Association of Democratic Labor Organization of petitioner. How-
ever, private respondent emerged victorious after the elections and was thus certified as the exclusive bargaining
entity of petitioner's rank and file employees.However, SLMCEA-AFW wrote St. Lukes Medical Center to re-
sume their negotiations concerning union’s proposed CBA.

St. Lukes Medical Center express willingness to negotiate a new CBA for the rank and file employees. Negotia-
tions thus resumed. However, there is a deadlock on issue especially the issue on the across-the-board monthly
and meal allowances.

Because of the impending strike, petitioner lodged a petition to Secretary of Labor:

Secretary of Labor issued the Order containing the decisions both in the economic and non-
economic issues:

First year — P1,140.00 broken down as follows: P510.00 in compliance with the government
mandated daily salary increase of P17.00; and P630.00 CBA across the board monthly salary
increase.

Second year — P700.00 across the board monthly salary increase.

Third year — P700.00 across the board monthly salary increase.

It is understood that the second and third year salary increases shall not be chargeable to future
government mandated wage increases. (p. 47, Rollo.)
St. Lukes contended that the above amount will grossly inflated St. Luke’s net income. That if it is sustained, the
total wage increases and benefits will be excessive and unreasonable, considering the aggregate amount is more
than its projected income for the next 3 years.

Also, the granting of retroactive effect to the enforceability of the CBA is violative of Section 253-A of
the Labor Code which states that:

Any agreement on such other provisions of the collective bargaining agreement

entered into within six (6) months from the date of expiry of the term of such other
provisions as fixed in the collective bargaining agreement, shall retroact to the day
immediately following such date. If any such agreement is entered into beyond six
months, the parties shall agree on the duration of retroactivity thereof. In case of a
deadlock in the renegotiation of the collective bargaining agreement, the parties
may exercise their rights under this Code.

Petitioners pointing out that the questioned order from Secretary of Labor was issued beyond the 6
month period period requirement.

Here are the contention of SLMCEA-AFW:

a. The amount thus ordered are well within the means of the St. Lukes because the reported net
income for the past 3 years are actually understated.
b. The aggregate amount of more than a 190 million as computed by petitioner is excessive
c. That the base of computing aggregate amount should be for qualified 1000 employee only and
not 1264 employee (as the basis of computation of St. Lukes Medical Center). Thus, petitioner's
version that it will have to pay P194,403,000.00 is not true because this will be drastically
reduced by 40% to 60% in real terms due to a smaller number of employees covered
d. the government-decreed wage increases abovementioned already form part of the
P1,140.00 wage and meal allowance increases, not to mention the strict cost-cutting
measures and practices on overtime and expense items adopted by petitioner since 1990.

RULING:

With respect to public respondent's ruling that the CBA awards should be given retroactive effect, private re-
spondent agrees with the Labor Secretary's view that Article 253-A of the Labor Code does not apply to arbitral
awards such as those involved in the instant case. According to private respondent, Article 253-A of the Labor
Code is clear and plain on its face as referring only to collective bargaining agreements entered into by man-
agement and the certified exclusive bargaining agent of all rank-and-file employees therein within six (6)
months from the expiry of the old CBA.

Petitioner assails the Order of January 28, 1991 on three grounds:

(a) unreasonable and baselessness; (b) prematurity; and (c) violation of Article 253-A of the Labor
Code.

The Order, particularly in its disposition on the economic issues, was not arbitrarily imposed by NLRC. A pe-
rusal of the Order shows that NLRC took into consideration the parties' respective contentions, a clear indication
that he was keenly aware of their contrary positions. Both sides having been heard, they were allowed to present
their respective evidence. The due process requirement was thus clearly observed. Considering public respon-
dent's expertise on the subject and his observance of the cardinal principles of due process, the assailed Order
deserves to be accorded great respect by this Court.
In resolving the economic issues, NLRC merely adopted in toto St. Lukes' proposals. Consequently, St. Lukes
cannot now claim that the awards are unreasonable and baseless. Neither can it deny having made such propos-
als, as it attempted to do in its Motion for Reconsideration of the challenged Order before public respondent and
which it continues to pursue in the instant petition. It is too late in the day for such pretense, especially so be-
cause St. Lukes failed to controvert private respondent's allegation contained in its Comment to the petition be-
fore the Labor Secretary that petitioner had offered as its last proposal said salary and meal allowance increases.
As correctly pointed out by public respondent, petitioner failed, when it had the chance, to rebut the same in its
Reply to said Comment, considering that the resolution of the labor dispute at that was still pending. Any objec-
tion on this point is thus deemed waived.

We do not see merit in petitioner's theory that the awards were granted prematurely. In its effort to persuade this
Court along this point, petitioner denies having negotiated with private respondent SLMCEA-AFW. Petitioner
collectively refers to all the talks conducted with private respondent as mere informal negotiations due to the
representation issue involving AFW. Petitioner thus argues that in the absence of any formal negotiations, no
collective bargaining could have taken place. Public respondent, petitioner avers, should have required the par-
ties instead to negotiate rather than prematurely issuing his order.

It is immaterial whether the representation issue within AFW has been resolved with finality or not. Said squab-
ble could not possibly serve as a bar to any collective bargaining since AFW is not the real party-in-interest to
the talks; rather, the negotiations were confined to petitioner and the local union SLMCEA which is affiliated to
AFW. Only the collective bargaining agent, the local union SLMCEA in this case, possesses legal standing to
negotiate with petitioner. A duly registered local union affiliated with a national union or federation does not
lose its legal personality or independence (T)he locals are separate and distinct units primarily designed to se-
cure and maintain an equality of bargaining power between the employer and their employee-members in the
economic struggle for the fruits of the joint productive effort of labor and capital; and the association of the lo-
cals into the national union (as PAFLU) was in furtherance of the same end. These associations are consensual
entities capable of entering into such legal relations with their members. The essential purpose was the affilia-
tion of the local unions into a common enterprise to increase by collective action the common bargaining power
in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to
serve their own and the common interest of all, subject to the restraints imposed by the Constitution and By-
Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in
the agreement which brought it into existence.

Appending "AFW" to the local union's name does not mean that the federation absorbed the latter. No such
merger can be construed. Rather, what is conveyed is the idea of affiliation, with the local union and the larger
national federation retaining their separate personalities.

Petitioner cannot pretend to be unaware of these legal principles since they enjoy the benefit of legal advice
from their distinguished counsel. Thus, we are constrained to agree with the position of the Solicitor General
that petitioner conveniently used the representation issue within AFW to skirt entering into bargaining negotia-
tions with the private respondent.

It must be recalled that immediately after the deadlock in the talks, it was petitioner which filed a petition with
the Secretary of Labor for the latter to assume jurisdiction over the labor dispute. Inneffect, petitioner submitted
itself to the public respondent's authority and recognized the latter’s power to settle the labor dispute pursuant to
article 263(g) of the Labor Code granting him the power and authority to decide the dispute. It cannot, therefore,
be said that public respondent's decision to grant the awards is premature and pre-emptive of the parties' right to
collectively bargain, simply because the Order of January 28, 1991 was unfavorable to one or the other party,

It is a settled rule that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his
opponent and after failing to obtain such relief, repudiate or question that same jurisdiction.
Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the previ-
ous CBA, contrary to the position of petitioner. Under the circumstances of the case, Article 253-A cannot be
properly applied to herein case.

——o0o——

CASE NO. 5

G.R. No. 111262. September 19, 1996

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its President RAY-

MUNDO HIPOLITO, JR., petitioner, vs. HON. MA. NIEVES D. CONFESOR, Secretary of Labor, Dept.
of Labor & Employment, SAN MIGUEL CORPORATION, MAGNOLIA CORPORATION (Formerly,
Magnolia Plant) and SAN MIGUEL FOODS, INC. (Formerly, B-Meg Plant), respondents

Labor Law; Labor Unions; Collective Bargaining; Legislators inclined to have the effectivity of the CBA for
three (3) years insofar as the economic as well as non-economic provisions are concerned.—From the aforesaid
discussions, the legislators were more inclined to have the period of effectivity for three (3) years insofar as the
economic as well as non-economic provisions are concerned, except representation.

Same; Same; Same; No grave abuse of discretion on the part of the Secretary of Labor in ruling that the effectiv-
ity of the renegotiated terms of the CBA shall be for three (3) years.—Thus, we do not find any grave abuse of
discretion on the part of the Secretary of Labor in ruling that the effectivity of the renegotiated terms of the CBA
shall be for three (3) years.

Same; Same; Same; No merit in petitioner-union’s assertion that the employees of Magnolia and SMFI should
still be considered part of the bargaining unit of SMC.—With respect to the second issue, there is, likewise, no
merit in petitioner-union’s assertion that the employees of Magnolia and SMFI should still be considered part of
the bargaining unit of SMC.

Same; Same; Same; Transformation of the companies is a managerial prerogative and business judgment which
the courts can not look into unless it is contrary to law, public policy or morals.—Undeniably, the transforma-
tion of the companies was a management prerogative and business judgment which the courts can not look into
unless it is contrary to law, public policy or morals. Neither can we impute any bad faith on the part of SMC so
as to justify the application of the doctrine of piercing the corporate veil. Ever mindful of the employees’ inter-
ests, management has assured the concerned employees that they will be absorbed by the new corporations
without loss of tenure and retaining their present pay and benefits according to the existing CBAs.

Same; Same; Same; Magnolia and SMFI became distinct entities with separate juridical personalities.—Indu-
bitably, 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.

Same; Same; Same; The employees sought to be represented by the collective bargaining agent must have sub-
stantial mutual interests in terms of employment and working conditions as evinced by the type of work they
performed.—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. 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.
Same; Same; Same; It would then be best to have separate bargaining units for the different companies where
the employees can bargain separately according to their needs and according to their own working conditions.—
Interests of employees in the different companies perforce differ. SMC is engaged in the business of beer manu-
facturing. Magnolia is involved in the manufacturing and processing of dairy products while SMFI is involved
in the production of feeds and the processing of chicken. The nature of their products and scales of business may
require different skills which must necessarily be commensurated by different compensation packages. The dif-
ferent 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 compa-
nies where the employees can bargain separately according to their needs and according to their own working
conditions.

Facts:
Petitioner-union San Miguel Corporation Employees Union - PTGWO entered into a CBA with San Miguel
Corporation (SMC) to take effect upon the expiration of the previous CBA or on June 30, 1989. The CBA pro-
vided that: (Sec 1) Agreement which shall remain in force and effect until June 30, 1992 (Sec 2) the term of this
Agreement insofar as the representation aspect is concerned, shall be for 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 and (Sec 3) 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. Magnolia and Feeds and Livestock Divi-
sion of SMC 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. During the negotiations, the petitioner-union insisted that the bargaining unit of SMC should still
include the employees of the spun-off corporations and that the renegotiated terms of the CBA shall be effective
only for the remaining period of 2 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 3 years in accordance with Art. 253-A of the
Labor Code. Unable to agree on these issues, petitioner-union declared a deadlock. 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.
SMC, Magnolia and SMFI filed a petition with the Secretary of Labor praying that the latter assume jurisdiction
over the labor dispute in a vital industry. As prayed for, the Secretary of Labor assumed jurisdiction over the
labor dispute. Several conciliation meetings were held but still no agreement/settlement was arrived at. After the
parties submitted their respective position papers, the Secretary of Labor issued the assailed Order directing,
among others, that the renegotiated terms of the CBA shall be effective for the period of 3 years from June 30,
1992; and that such CBA shall cover only the employees of SMC and not of Magnolia and SMFI. Petitioner-
union questioned the Order of the Secretary of Labor. It also filed a Motion for Issuance of a Temporary Re-
straining Order or Writ of Preliminary Injunction to enjoin the holding of the certification elections in the differ-
ent companies, maintaining that the employees of Magnolia and SMFI fall within the bargaining unit of SMC.
The Court issued a resolution granting the temporary restraining order prayed for.

Issues:
1) Whether or not the duration of the renegotiated terms of the CBA is to be effective for 3 years or for only 2y
years; and
2) Whether or not the bargaining unit of SMC includes also the employees of Magnolia and SMFI.

Held:
Court agree with the Secretary of Labor for both issues.
1. Art. 253-A of the Labor Code states that the CBA has a term of 5 years instead of 3 years, before the amend-
ment of the law as far as the representation aspect is concerned. All other provisions of the CBA shall be negoti-
ated not later than 3 years after its execution. The representation aspect refers to the identity and majority status
of the union that negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining
unit concerned. All other provisions simply refers to the rest of the CBA, economic as well as non-economic
provisions, except representation. The law is clear and definite on the duration of the CBA insofar as the repre-
sentation aspect is concerned, but is quite ambiguous with the terms of the other provisions of the CBA. It is a
cardinal principle of statutory construction that the Court must ascertain the legislative intent for the purpose of
giving effect to any statute. The legislators were more inclined to have the period of effectivity for 3 years inso-
far as the economic as well as noneconomic provisions are concerned, except representation. The framers of the
law wanted to maintain industrial peace and stability by having both management and labor work harmoniously
together without any disturbance. The CBA is a contract between the parties and the parties must respect the
terms and conditions of the agreement. Notably, the framers of the law did not give a fixed term as to the effec-
tivity of the terms and conditions of employment. It can be gleaned from their discussions that it was left to the
parties to fix the period. Taking it from the history of their CBAs, SMC intended to have the terms of the CBA
effective for 3 years reckoned from the expiration of the previous CBA which was on June 30, 1989, as it pro-
vides shall become effective until June 30,1992. As a matter of policy the parties are encouraged to enter into a
renegotiated CBA with a term which would coincide with the aforesaid 5 year term of the bargaining representa-
tive. In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term
of 3 years or one which does not coincide with the said 5-year term, and said agreement is ratified by majority of
the members in the bargaining unit, the subject contract is valid and legal and therefore, binds the contracting
parties. Thus, the renegotiated terms of the CBA shall be for 3 years.2. No. Magnolia and SMFI were spun-off
to operate as distinct companies on October 1,1991. Undeniably, the transformation of the companies was a
management prerogative and business judgment unless it is contrary to law, public policy or morals. Neither can
we impute any bad faith on the part of SMC so as to justify the application of the doctrine of piercing the corpo-
rate veil. Ever mindful of the employees’ interests, management has assured the concerned employees that they
will be absorbed by the new corporations without loss of tenure and retaining their present pay and benefits ac-
cording to the existing CBAs. They were advised that upon the expiration of the CBAs, new agreements will be
negotiated between the management of the new corporations and the bargaining representatives of the employ-
ees concerned. Therefore, Magnolia and SMFI became distinct entities with separate juridical personalities.
Thus, they cannot belong to a single bargaining unit. Petitioner-unions 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 mu-
tual interests in terms of employment and working conditions as evidenced by the type of work they performed.
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 compa-
nies perforce differ. The nature of their products and scales of business may require different skills which must
necessarily be commensurate by different compensation packages. It would then be best to have separate bar-
gaining units for the different companies where the employees can bargain separately according to their needs
and according to their own working conditions.

Petition is DISMISSED for lack of merit. The Temporary Restraining Order issued is lifted.

Notes:

Art. 253-A of the Labor Code as amended which reads:

ART. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining Agreement that the par-
ties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No
petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certifica-
tion election shall be conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining Agreement. All other
provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its
execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within
six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargain-
ing Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into
beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the
renegotiation of the collective bargaining agreement, the parties may exercise their rights under this Code. Arti-
cle 253-A is a new provision. This was incorporated by Section 21 of Republic Act No.6715 (the Herrera-Veloso
Law) which took effect on March 21, 1989.

——o0o——

CASE NO. 6

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 ES-
PIRITU in his capacity as Chairman of the PAL InterAgency Task Force created under Administrative
Order No. 16; HON. BIENVENIDO LAGUESMA in his capacity as Secretary of Labor and Employ-
ment; PHILIPPINE AIRLINES (PAL), LUCIO TAN, HENRY SO UY, ANTONIO V. OCAMPO,
MANOLO E. AQUINO, JAIME J. BAUTISTA, and ALEXANDER O. BARRIENTOS, respondents.

Labor Law; Words and Phrases; Collective Bargaining Agreement, Defined; The primary purpose of a CBA is
the stabilization of labor-management relations in order to create a climate of a sound and stable industrial
peace, and in construing a CBA, the courts must be practical and realistic and give due consideration to the con-
text in which it is negotiated and the purpose which it is intended to serve.—A CBA is “a contract executed
upon request of either the employer or the exclusive bargaining representative incorporating the agreement
reached after negotiations with respect to wages, hours of work and all other terms and conditions of employ-
ment, including proposals for adjusting any grievances or questions arising under such agreement.” The primary
purpose of a CBA is the stabilization of labor-management relations in order to create a climate of a sound and
stable industrial peace. In construing a CBA, the courts must be practical and realistic and give due considera-
tion to the context in which it is negotiated and the purpose which it is intended to serve.

Same; Collective Bargaining; Article 253-A of the Labor Code has a two-fold purpose—one is to promote in-
dustrial stability and predictability, and the other is to assign specific timetables wherein negotiations become a
matter of right and requirement; Nothing in Article 253-A prohibits the parties from waiving or suspending the
mandatory timetables and agreeing on the remedies to enforce the same.—The assailed PAL-PALEA agreement
was the result of voluntary collective bargaining negotiations undertaken in the light of the severe financial situ-
ation faced by the employer, with the peculiar and unique intention of not merely promoting industrial peace at
PAL, but preventing the latter’s closure. We find no conflict between said agreement and Article 253-A of the
Labor Code. Article 253-A has a two-fold purpose. One is to promote industrial stability and predictability.
Inasmuch as the agreement sought to promote industrial peace at PAL during its rehabilitation, said agreement
satisfies the first purpose of Article 253-A. The other is to assign specific timetables wherein negotiations be-
come a matter of right and requirement. Nothing in Article 253-A, prohibits the parties from waiving or sus-
pending the mandatory timetables and agreeing on the remedies to enforce the same.

Same; Same; The right to free collective bargaining, after all, includes the right to suspend it.—In the instant
case, it was PALEA, as the exclusive bargaining agent of PAL’s ground employees, that voluntarily entered into
the CBA with PAL. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA. Either
case was the union’s exercise of its right to collective bargaining. The right to free collective bargaining, after
all, includes the right to suspend it.

Same; Same; The acts of the public functionaries in sanctioning the 10-year suspension of the PAL-PALEA
CBA did not contravene the “protection to labor” policy of the Constitution.—The acts of public respondents in
sanctioning the 10-year suspension of the PAL-PALEA CBA did not contravene the “protection to labor” policy
of the Constitution. The agreement afforded full protection to labor; promoted the shared responsibility between
workers and employers; and the exercised voluntary modes in settling disputes, including conciliation to foster
industrial peace.

Same; Same; Union Security Clauses; Unfair Labor Practice; The Court is unable to declare the objective of
union security an unfair labor practice.—The questioned proviso of the agreement reads: a. PAL shall continue
recognizing PALEA as the duly certified bargaining agent of the regular rank-and-file ground employees of the
Company. Said proviso cannot be construed alone. In construing an instrument with several provisions, a con-
struction must be adopted as will give effect to all. Under Article 1374 of the Civil Code, contracts cannot be
construed by parts, but clauses must be interpreted in relation to one another to give effect to the whole. The
legal effect of a contract is not determined alone by any particular provision disconnected from all others, but
from the whole read together. The aforesaid provision must be read within the context of the next clause, which
provides: b. The ‘union shop/maintenance of membership’ provision under the PAL-PALEA CBA shall be re-
spected. The aforesaid provisions, taken together, clearly show the intent of the parties to maintain “union secu-
rity” during the period of the suspension of the CBA. Its objective is to assure the continued existence of
PALEA during the said period. We are unable to declare the objective of union security an unfair labor practice.
It is State policy to promote unionism to enable workers to negotiate with management on an even playing field
and with more persuasiveness than if they were to individually and separately bargain with the employer. For
this reason, the law has allowed stipulations “union shop” and “closed shop” as means of encouraging workers
to join and support the union of their choice in the protection of their rights and interests vis-à-vis the employer.

Same; Same; Under Article 253-A of the Labor Code, the representation limit for the exclusive bargaining agent
applies only when there is an extant CBA in full force and effect.—We also do not agree that the agreement vio-
lates the five-year representation limit mandated by Article 253-A. Under said article, the representation limit
for the exclusive bargaining agent applies only when there is an extant CBA in full force and effect. In the in-
stant case, the parties agreed to suspend the CBA and put in abeyance the limit on the representation period.

FACTS:
-PAL was suffering from a difficult financial situation in 1998. It was faced with bankruptcy and was forced to
adopt a rehabilitation plan and downsized its labor force by more than 1/3. PAL pilots went on a three-week
strike in June 1998. PALEA (PAL Employees Association) went on a four-day strike to protest retrenchment
measures in July 1998.

-President Estrada issued A.O. No. 16, creating an Inter-Agency Task Force (Task Force) to address PAL’s prob-
lems. Espiritu, then Sec of Finance, was chairman of the Task Force. Task Force was empowered to summon all
parties concerned for conciliation, mediation for the purpose of arriving at a total and complete solution of the
problem.

-PAL management submitted to the Task Force an offer by Lucio Tan, which was subsequently rejected.

-PAL then informed the Task Force that rehabilitation was no longer feasible and there was no alternative but to
close shop.

-PAL ceased operations on Sep 23, 1998.

-PALEA board wrote President Estrada to seek his intervention on Sep 25, 1998. PALEA offered a 10-year
moratorium on strikes and similar actions and a waiver of some of the economic benefits in the existing CBA.
Tan, however, rejected this counter-offer.

-PALEA board again wrote the President on Sep 28, 1998. Among others, it proposed the suspension of the
PAL-PALEA CBA for a period of ten years, subject to certain conditions.

-PALEA members accepted such terms through a referendum on Oct 2, 1998.

-PAL resumed domestic operations on Oct 7, 1998.

-Seven officers and members of PALEA filed instant petition to annul the Sep 27, 1998 agreement entered into
between PAL and PALEA.

ISSUE:
W/N CBA negotiations may be suspended for ten years

HELD:
YES. CBA negotiations may be suspended for ten years.

-The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations undertaken
in the light of the severe financial situation faced by the employer, with the peculiar and unique intention of not
merely promoting industrial peace at PAL, but preventing the latter's closure. There is no conflict between said
agreement and Article 253-A of the Labor Code. Article 253-A has a two-fold purpose. One is to promote indus-
trial stability and predictability. Inasmuch as the agreement sought to promote industrial peace at PAL during its
rehabilitation, said agreement satisfies the first purpose of Article 253-A. The other is to assign specific timeta-
bles wherein negotiations become a matter of right and requirement. Nothing in Article 253A, prohibits the par-
ties from waiving or suspecting the mandatory timetables and agreeing on the remedies to enforce the same.

-It was PALEA, as the exclusive bargaining agent of PAL 's ground employees, that voluntarily entered into the
CBA with PAL. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA. Either case
was the union's exercise of its right to collective bargaining. The right to free collective bargaining, after all,
includes the right to suspend it.

-The acts of public respondents in sanctioning the 10-year suspension of the PAL-PALEA CBA did not contra-
vene the “protection to labor” policy of the Constitution. The agreement afforded full protection to labor; pro-
moted the shared responsibility between workers and employers; and they exercised voluntary modes in settling
disputes, including conciliation to foster industrial peace.

——o0o——

CASE NO. 7

G.R. No. 79526. December 21, 1990.*

NATIONAL ASSOCIATION OF FREE TRADE UNIONS (NAFTU), petitioner, vs. MAINIT LUMBER
DEVELOPMENT COMPANY WORKERS UNION-UNITED LUMBER AND GENERAL WORKERS
OF THE PHILIPPINES. (MALDECOWU-ULGWP), respondents.

FACTS:

Private respondent Mainit Lumber Development Company Workers Union-United Lumber and General Workers
of the Philippines, MALDECOWU-ULGWP (ULGWP, for short), a legitimate labor organization duly regis-
tered with the Ministry of Labor and Employment filed a petition for certification election to determine the sole
and exclusive collective bargaining representative among the rank and file workers/employees of Mainit Lum-
ber Development Company Inc. (MALDECO), a duly organized, registered and existing corporation engaged in
the business of logging and saw-mill operations.
Petitioner ULGWP, private respondent herein, in its petition and position paper alleged, among others: (1) that
there was no certification election conducted within 12 months prior to the filing of the petition; (2) that the peti-
tion was filed within the 60 day freedom period, i.e. CBA expired on February 28, 1985; (3) that the petition is
supported by the signatures of 101 rank and file employees out of a total of 201 employees of the employer or
more than thirty percent (30%) than that required by law.

The Med-Arbiter granted the petition for certification election. NAFTU appealed the decision of the Med-Ar-
biter on the ground that MALDECO was composed of two (2) bargaining units, the Sawmill Division and the
Logging Division, but both the petition and decision treated these separate and distinct units only as one.

The Bureau of Labor Relations affirmed the decision. Thus, a certification election was held on separate dates at
the employer's sawmill division and logging area respectively. In said election MALDECOWU-ULGWP gar-
nered a total vote of 146 while NAFTU garnered a total of 2 votes.

ISSUE:

I. WHETHER OR NOT IT WAS RIGHT FOR THE MED-ARBITER TO CHANGE THE EMPLOYER FROM
TWO SEPARATE BARGAINING UNITS TO ONLY ONE.

RULING:
Significantly, out of two hundred and one (201) employees of MALDECO, one hundred seventy five (175) con-
sented and supported the petition for certification election, thereby confirming their desire for one bargaining
representative.

Moreover, while the existence of a bargaining history is a factor that may be reckoned with in determining the
appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of
grouping is community or mutuality of interests. This is so because "the basic test of an asserted bargaining
unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees
the exercise of their collective bargaining rights.”

Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging Divi-
sion. Their functions mesh with one another. One group needs the other in the same way that the company needs
them both. There may be difference as to the nature of their individual assignments but the distinctions are not
enough to warrant the formation of a separate bargaining unit.

——o0o——

CASE NO. 8

G.R. No. 85915. January 17, 1990. *

PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH INTERNATIONAL-UNITED LUMBER

AND GENERAL WORKERS OF THE PHILIPPINES (PMTI-ULGWF), petitioner, vs. PURA FERRER-
CALLEJA, DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND THE CONFEDERATION
OF FILIPINO WORKERS (CFW), PROGRESSIVE EMPLOYEES UNION (PEU-TIPI), respondents.

Labor Law; Evidence; Factual findings of quasi-judicial agencies like the Bureau of Labor Relations which are
supported by substantial evidence binding upon the Court and entitled to great respect.—In the determination of
whether or not the members of respondent union are managerial employees, we accord due respect and, there-
fore, sustain the findings of fact made by the public respondent pursuant to the time-honored rule that findings
of fact of quasi-judicial agencies like the Bureau of Labor Relations which are supported by substantial evidence
are binding on us and entitled to great respect considering their expertise in their respective fields.

Same; Managerial employees, definition of.—“Managerial employee” is one who is vested with powers or pre-
rogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, dis-
charge, assign or discipline employees, or to effectively recommend such managerial action. All employees not
falling within this definition are considered rank and file employees for purposes of this Book.

Same; Same; Test of supervisory or managerial status depends on whether a person possesses authority to act in
the interest of his employer and whether such authority is not merely routinary or clerical in nature but requires
the use of independent judgment.“The test of ‘supervisory’ or ‘managerial status’ depends on whether a person
possesses authority to act in the interest of his employer in the matter specified in Article 212 (k) of the Labor
Code and Section 1 (m) of its Implementing Rules and whether such authority is not merely routinary or clerical
in nature, but requires the use of independent judgment. Thus, where such recommendatory powers as in the
case at bar, are subject to evaluation, review and final action by the department heads and other higher execu-
tives of the company, the same, although present, are not effective and not an exercise of independent judgment
as required by law (National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963]).”

Same; Same; Same; Findings that the supervisory employees sought to be represented by the respondent union
do not possess a managerial status settled.—The public respondent, in its factual findings, found that the super-
visory employees sought to be represented by the respondent union are not involved in policy-making and their
recom-mendatory powers are not even instantly effective since the same are still subject to review by at least
three managerial heads (department manager, personnel manager and general manager) before final action can
be taken. Hence, it is evidently settled that the said employees do not possess a managerial status. The fact that
their work designations are either managers or supervisors is of no moment considering that it is the nature of
their functions and not the said nomenclatures or titles of their jobs which determines their statuses.

Same; Same; Labor Organization; Managerial employees prohibited from joining, assisting or forming any labor
organization.—Art. 245 of the aforementioned Code prohibits managerial employees from joining, assisting or
forming any labor organization. Hence, employees who had then formed supervisory unions were classified
either as managerial or rank-and-file depending on their functions in their respective work assignments.

Same; Same; Same; Same; Managerial employees may join, assist or form a separate labor organization of their
own.—Section 18 of the same Act retains the provision on the ineligibility of managerial employees to join any
labor organization. However, the right of supervisory employees to form their own union is revived under the
said section which states, in part, to wit: “x x x Supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of
their own.”

Same; Same; Same; Findings that the employees sought to be represented by the respondent union are rank-and-
file employees adopted.—Thus, the right of supervisory employees to organize under the Industrial Peace Act is
once more recognized under the present amendments to the Labor Code. (see Adamson & Adamson, Inc., v. The
Court of Industrial Relations, 127 SCRA 268 [1984]). In the absence of any grave abuse of discretion on the part
of the public respondent as to the status of the members of the respondent union, we adopt its findings that the
employees sought to be represented by the respondent union are rank-and-file employees.

Same; Same; Same; Same; Court impelled to disallow the holding of a certification election among the workers
sought to be represented by the respondent union for want of any proof that the right of said workers to self-or-
ganization is being suppressed.—In the case at bar, there is no dispute that the petitioner is the exclusive bar-
gaining representative of the rank-and-file employees of Triumph International. A careful examination of the
records of this case reveals no evidence that rules out the commonality of interests among the rank-and-file
members of the petitioner and the herein declared rank-and-file employees who are members of the respondent
union. Instead of forming another bargaining unit, the law requires them to be members of the existing one. The
ends of unionism are better served if all the rank-and-file employees with substantially the same interests and
who invoke their right to self-orgnization are part of a single unit so that they can deal with their employer with
just one and yet potent voice. The employees’ bargaining power with management is strengthened thereby.
Hence, the circumstances of this case impel us to disallow the holding of a certification election among the
workers sought to be represented by the respondent union for want of proof that the right of said workers to self-
organization is being suppressed.

Same; Same; Same; Same; Same; Respondent union’s CBA constituted a bar to the holding of the certification
election as petitioned by the respondent union with public respondent.—Anent the correlative issue of whether
or not the contract-bar rule applies to the present case, Rule V, Section 3, Book V of the Implementing Rules
and Regulations of the Labor Code is written in plain and simple terms. It provides in effect that if a collective
bargaining agreement validly exists, a petition for certification election can only be entertained within sixty (60)
days prior to the expiry date of said agreement. Respondent union’s petition for certification election was filed
on November 25, 1987. At the time of the filing of the said petition, a valid and existing CBA was present be-
tween petitioner and Triumph International. The CBA was effective up to September 24, 1989. There is no
doubt that the respondent union’s CBA constituted a bar to the holding of the certification election as petitioned
by the respondent union with public respondent.

FACTS:
The petitioner is the recognized collective bargaining agent of the rank-and-file employees of Triumph In-
ternational with which the latter has a valid and existing CBA effective up to September 24, 1989. On No-
vember 25, 1987, a petition for certification election was filed by the respondent union with the DOLE. A mo-
tion to dismiss the petition for certification election was filed by Triumph International on the grounds that the
respondent union cannot lawfully represent managerial employees and that the petition cannot prosper by virtue
of the contract-bar rule. On the same grounds, the petitioner, as intervenor, filed its opposition to the petition oil
February 18, 1988.

ISSUE: whether or not the public respondent gravely abused its discretion in ordering the immediate holding of
a certification election among the workers sought to be represented by the respondent union.

HELD:
Members of respondent union are rank and file and not managerial employees
In the determination of whether or not the members of respondent union are managerial employees, we accord
due respect and, therefore, sustain the findings of fact made by the public respondent pursuant to the time-hon-
ored rule that findings of fact of quasi-judicial agencies like the Bureau of Labor Relations which are supported
by substantial evidence are binding on us and entitled to great respect considering their expertise in their respec-
tive fields. According to the Med-Arbiter, while the functions, and we may add, the titles of the personnel sought
to be organized appear on paper to involve an apparent exercise of managerial authority, the fact remains that
none of them discharge said functions. The petitioner has failed to show reversible error insofar as this finding is
concerned.
The petitioner further argues that while it has recognized those signatories and employees occupying the posi-
tions of Assistant Manager, Section Chief, Head Supervisor and Supervisor as managerial employees under the
existing CBA, in the event that they are declared as rank-and-file employees in the present case they are not
precluded from joining and they should join the petitioner. We find the aforesaid contention of the petitioner
meritorious in the absence of a showing that there are compelling reasons such as the denial of the right to join
the petitioner which is the certified bargaining unit to the members of respondent union or that there are substan-
tial distinctions warranting the recognition of a separate group of rank-and-file employees even as there is an
existing bargaining agent for rank and file employees.
The public respondent, in its factual findings, found that the supervisory employees sought to be represented by
the respondent union are not involved in policy-making and their recommendatory powers are not even instantly
effective since the same are still subject to review by at least three managerial heads (department manager, per-
sonnel manager and general manager) before final action can be taken. Hence, it is evidently settled that the said
employees do not possess a managerial status. The fact that their work designations are either managers or su-
pervisors is of no moment considering that it is the nature of their functions and not the said nomenclatures or
titles of their jobs which determines their statuses.
There is no dispute that the petitioner is the exclusive bargaining representative of the rank-and-file employees
of Triumph International. A careful examination of the records of this case reveals no evidence that rules out the
commonality of interests among the rank-and-file members of the petitioner and the herein declared rank-and-
file employees who are members of the respondent union. Instead of forming another bargaining unit, the law
requires them to be members of the existing one. The ends of unionism are better served if all the rank-and-file
employees with substantially the same interests and who invoke their right to self-organization are part of a sin-
gle unit so that they can deal with their employer with just one and yet potent voice. The employees' bargaining
power with management is strengthened thereby. Hence, the circumstances of this case impel us to disallow the
holding of a certification election among the workers sought to be represented by the respondent union for want
of proof that the right of said workers to self-organization is being suppressed.
Contract Bar Rule
If a collective bargaining agreement validly exists, a petition for certification election can only be entertained
within sixty (60) days prior to the expiry date of said agreement. Respondent union's petition for certification
election was filed on November 25, 1987. At the time of the filing of the said petition, a valid and existing CBA
was present between petitioner and Triumph International. The CBA was effective up to September 24, 1989.
There is no doubt that the respondent union's CBA constituted a bar to the holding of the certification election as
petitioned by the respondent union with public respondent. The members of the respondent union should wait
for the proper time.

——o0o——

CASE NO. 9

G.R. No. 96490. February 3,1992.*

INDOPHIL TEXTILE MILL WORKERS UNION-PTGWO, petitioner, vs. VOLUNTARY ARBITRA-

TOR TEODORICO P. CALICA AND INDOPHIL TEXTILE MILLS, INC., respondents.

Labor Law; Evidence; Rule that decisions of voluntary arbitrators are to be given the highest respect and a cer-
tain measure of finality is not a hard and fast rule.—Time and again, We stress that the decisions of voluntary
arbitrators are to be given the highest respect and a certain measure of finality, but this is not a hard and fast rule,
it does not preclude judicial review thereof where want of jurisdiction, grave abuse of discretion, violation of
due process, denial of substantial justice, or erroneous interpretation of the law were brought to our attention.

Same; Same; Same; It is grave abuse of discretion to treat two companies as a single bargaining unit when these
companies are indubitably distinct entities with separate juridical personalities.
PETITION for certiorari to review the award issued by the Voluntary Arbitrator.

FACTS:

Petitioner Indophil Textile Mill Workers Union-PTGWO is a legitimate labor organization duly registered with
the Department of Labor and Employment and the exclusive bargaining agent of all the rank-and-file employees
of Indophil Textile Mills, Incorporated. Respondent Teodorico P. Calica is impleaded in his official capacity as
the Voluntary Arbitrator of the National Conciliation and Mediation Board of the Department of Labor and Em-
ployment, while private respondent Indophil Textile Mills, Inc. is a corporation engaged in the manufacture, sale
and export of yarns of various counts and kinds and of materials of kindred character and has its plants at Barrio
Lambakin, Marilao, Bulacan.

In April, 1987, petitioner Indophil Textile Mill Workers Union-PTGWO and private respondent Indophil Textile
Mills, Inc. executed a collective bargaining agreement.

On November 3, 1987, Indophil Acrylic Manufacturing Corporation was formed and registered with the Securi-
ties and Exchange Commission.
Acrylic became operational and hired workers according to its own criteria and standards. Sometime in July,
1989, the workers of Acrylic unionized and a duly certified collective bargaining agreement was executed.

In 1990 or a year after the workers of Acrylic have been unionized and a CBA executed, the petitioner union
claimed that the plant facilities built and set up by Acrylic should be considered as an extension or expansion of
the facilities of private respondent Company

In other words, it is the petitioner's contention that Acrylic is part of the Indophil bargaining unit.The petitioner's
contention was opposed by private respondent which submits that it is a juridical entity separate and distinct
from Acrylic.

The parties jointly requested the public respondent to act as voluntary arbitrator in the resolution of the pending
labor dispute pertaining to the proper interpretation of the CBA provision.

The public respondent Voluntary Arbitrator rendered its award, an award is made to the effect that the proper
interpretation and application of Sec. 1, (c), Art. I, of the 1987 CBA do (sic) not extend to the employees of
Acrylic as an extension or expansion of Indophil Textile Mills, Inc.

Petitioner maintains that public respondent Arbitrator gravely erred in interpreting Section 1(c), Article I of the
CBA in its literal meaning without taking cognizance of the facts adduced that the creation of the aforesaid In-
dophil Acrylic is but a devise of respondent Company to evade the application of the CBA between petitioner
Union and respondent Company.

ISSUE:

WHETHER OR NOT THE RESPONDENT ARBITRATOR ERRED IN INTERPRETING SECTION 1(c),

ART I OF THE CBA BETWEEN PETITIONER UNION AND RESPONDENT COMPANY.

HELD:

We find the petition devoid of merit.

Time and again, We stress that the decisions of voluntary arbitrators are to be given the highest respect and a
certain measure of finality, but this is not a hard and fast rule, it does not preclude judicial review thereof where
want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice, or erro-
neous interpretation of the law were brought to our attention.

It should be emphasized that in rendering the subject arbitral award, the voluntary arbitrator Teodorico Calica, a
professor of the U.P. Asian Labor Education Center, now the Institute for Industrial Relations, found that the
existing law and jurisprudence on the matter, supported the private respondent's contentions. Contrary to peti-
tioner's assertion, public respondent cited facts and the law upon which he based the award. Hence, public re-
spondent did not abuse his discretion.

——o0o——

CASE NO. 10

No. L-76673. June 22, 1988.*

PHILIPPINE AIRLINES EMPLOYEES’ ASSOCIATION (PALEA), petitioner, vs. HON. PURA FER-
RER-CALLEJA, Director of the Bureau of Labor Relations, PHILIPPINE AIRLINES NON-MANAGE-
RIAL EMPLOYEES ASSOCIATION (PANOMEA-FUR), and PHILIPPINE AIRLINES, INC., respon-
dents.
Labor Law; Bureau of Labor Relations; Factual findings of the Bureau of Labor Relations which are supported
by substantial evidence are binding on the court and must be respected.—The rule is that factual findings of the
Bureau of Labor Relations which are supported by substantial evidence are binding on this court and must be
respected (Asian Design and Manufacturing Corp. vs. Deputy Minister of Labor, 142 SCRA 79). The Bureau of
Labor Relations found that the present CBA between PALEA and PAL covers only the rank and file employees
but not the licensed mechanics, administrative, supervisory, technical and confidential employees of PAL. The
petition failed to prove that PANOMEA’s petition lacked the support of 30% of the employees.

Same; Labor Union; Right to self-organizations; Employees have a constitutional right to choose their own bar-
gaining representa-tive.—Employees have a constitutional right to choose their own bargaining representative.
The holding of a certification election is a statutory policy that should not be circumvented.

Same; Same; Same; Same; The holding of a certification election is the most democratic method of determining
the employees’ choice of their bargaining representative.—Whenever there is doubt as to whether a particular
union represents the majority of the rank-and-file employees, in the absence of a legal impediment, the holding
of a certification election is the most democratic method of determining the employees’ choice of their bargain-
ing representative. It is the appropriate means whereby controversies and disputes on representation may be laid
to rest, by the unequivocal vote of the employees themselves. In lifting the restraining order which her predeces-
sor had issued, and ordering that the certification election proceed, respondent Ferrer-Calleja opened the door
for the employees to express their choice.

FACTS:

A certification election was held on Apr. 27,1977 wherein petitioner Philippine Airlines Employees
Association (PALEA) won and was recognized by the Bureau of Labor Relations (BLR) as the exclusive bar-
gaining agent of all the rank and file employees of the Philippine Airlines, Inc.

In 1980, respondent Philippine Airline Non-Managerial Employees’ Association (PANOMEA-FUR)

filed a petition for certification election among the “administrative, supervisory, licensed mechanics, technical
and confidential employees of PAL , alleging inter-alia that there is no other union existing in the proposed bar-
gaining unit nor is there a certified collective bargaining agreement which maybe a bar to the petition.

PALEA and PAL filed separate motions for reconsideration of the BLR’s resolution granting
PANOMEA’s petition.

While PAL and PALEA’s motions for reconsideration were pending resolution by the BLR director, the
licensed mechanics whom PANOMEA sought to represent, filed their own petition for certification election un-
der the name of PAL Licensed / Amalgamated Federation of Labor of the Philippines (PALMA-AFL).

In October 1985, the BLR Director dismissed the petition of the licensed mechanics only (PALMA-
AFL), excluding the administrative, supervisor, technical & confidential employees, ruling that the existing law
did not allow the creation of a separate bargaining unit for the licensed mechanics.

However, in April 1986, the BLR Director ordered the holding of certification election among the ad-
ministrative, supervisory, licensed mechanics, technical & confidential employees of PAL.

In this petition for certiorari, petitioner PALEA alleges that the BLR director erred in ordering the certi-
fication election. PALEA claims that it is the exclusive bargaining representative of all the rank & file employ-
ees and that PANOMEA seeks to dismember or fragmentize the already existing bargaining unit so that another
one may be created.
ISSUES:

1. W/N the BLR committed grave abuse of its discretion?

2. W/N PANOMEA’s petition is meritorious?

HELD:

1. No, the BLR did not commit grave abuse of its discretion when it ruled that the present CBA be-
tween PALEA and PAL covers only the rank & file employees but not the licensed mechanics, ad-
ministrative, supervisory, technical & confidential employees of PAL.

The court held that as a rule, factual findings of the BLR which are supported by substantial evidence are bind-
ing and must be respected by the courts.

2. Yes, PANOMEA’s petition for certification election has merits. The Court held that whenever there
is doubt as to whether a particular union represents the majority of the rank & file employees, in the
absence of legal impediment, the holding of certification election is the most democratic method of
determining the employees’ choice of their bargaining representative.

——o0o——

CASE NO. 11

G.R. No. 131235. November 16, 1999.*

UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA
POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO,
CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA
GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS,
CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and
LEONCIO CASAL, petitioners, vs. Dir. BENEDICTO ERNESTO R. BITONIO, JR. of the Bureau of
Labor Relations, Med-Arbiter TOMAS F. FALCONITIN of The National Capital Region, Department of
Labor and Employment (DOLE), EDUARDO J. MARIÑO, JR., MA. MELVYN ALAMIS, NORMA
COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY
CURA, FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA,
NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents.

Labor Law; Actions; Certiorari; Pleadings and Practice; Hierarchy of Courts; Challenges against rulings of the
labor secretary and those acting on his behalf, like the director of labor relations, shall be acted upon by the
Court of Appeals, which has concurrent jurisdiction with the Supreme Court over petitions for certiorari.—At
the outset, the Court stresses that National Federation of Labor (NFL) v. Laguesma has held that challenges
against rulings of the labor secretary and those acting on his behalf, like the director of labor relations, shall be
acted upon by the Court of Appeals, which has concurrent jurisdiction with this Court over petitions for certio-
rari. However, inasmuch as the memoranda in the instant case have been filed prior to the promulgation and
finality of our Decision in NFL, we deem it proper to resolve the present controversy directly, instead of re-
manding it to the Court of Appeals. Having disposed of the foregoing procedural matter, we now tackle the is-
sues in the present case seriatim.

Same; Right to Self-Organization; Unions; Employees have the right to form, join or assist labor organizations
for the purpose of collective bargaining or for their mutual aid and protection.—Self-organization is a funda-
mental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form,
join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection.
Whether employed for a definite period or not, any employee shall be considered as such, beginning on his first
day of service, for purposes of membership in a labor union.

Same; Same; Same; To become a union member, an employee must, as a rule, not only signify the intent to be-
come one, but also to take some positive steps to realize that intent.—Corollary to this right is the prerogative
not to join, affiliate with or assist a labor union. Therefore, to become a union member, an employee must, as a
rule, not only signify the intent to become one, but also take some positive steps to realize that intent. The pro-
cedure for union membership is usually embodied in the union’s constitution and bylaws. An employee who
becomes a union member acquires the rights and the concomitant obligations that go with this new status and
becomes bound by the union’s rules and regulations.

Same; Same; Same; Members’ frustration over the performance of the union officers, as well as their fears of a
“fraudulent” election to be held under the latter’s supervision, could not justify the disregard of the union’s con-
stitution and by-laws.—Petitioners claim that the numerous anomalies allegedly committed by the private re-
spondents during the latter’s incumbency impelled the October 4, 1996 election of the new set of USTFU offi-
cers. They assert that such exercise was pursuant to their right to self-organization. Petitioners’ frustration over
the performance of private respondents, as well as their fears of a “fraudulent” election to be held under the lat-
ter’s supervision, could not justify the method they chose to impose their will on the union. Director Bitonio
aptly elucidated: “The constitutional right to self-organization is better understood in the context of ILO Con-
vention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is signa-
tory. Article 3 of the Convention provides that workers’ organizations shall have the right to draw up their con-
stitution and rules and to elect their representatives in full freedom, free from any interference from public au-
thorities. The freedom conferred by the provision is expansive; the responsibility imposed on union members to
respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the union’s
CBL is the fundamental law that governs the relationship between and among the members of the union. It is
where the rights, duties and obligations, powers, functions and authority of the officers as well as the members
are defined. It is the organic law that determines the validity of acts done by any officer or member of the union.
Without respect for the CBL, a union as a democratic institution degenerates into nothing more than a group of
individuals governed by mob rule.”

Same; Same; Same; Words and Phrases; “Union Election” and “Certification Election,” Distinguished; An em-
ployee belonging to the appropriate bargaining unit but who is not a member of the union cannot vote in the
union election, unless otherwise authorized by the constitution and by-laws of the union—union affairs and
elections cannot be decided in a non-union activity.—A union election is held pursuant to the union’s constitu-
tion and by-laws, and the right to vote in it is enjoyed only by union members. A union election should be dis-
tinguished from a certification election, which is the process of determining, through secret ballot, the sole and
exclusive bargaining agent of the employees in the appropriate bargaining unit, for purposes of collective bar-
gaining. Specifically, the purpose of a certification election is to ascertain whether or not a majority of the em-
ployees wish to be represented by a labor organization and, in the affirmative case, by which particular labor
organization. In a certification election, all employees belonging to the appropriate bargaining unit can vote.
Therefore, a union member who likewise belongs to the appropriate bargaining unit is entitled to vote in said
election. However, the reverse is not always true; an employee belonging to the appropriate bargaining unit but
who is not a member of the union cannot vote in the union election, unless otherwise authorized by the constitu-
tion and by-laws of the union. Verily, union affairs and elections cannot be decided in a non-union activity.

Same; Same; Same; A union’s constitution and by-laws embody a covenant between a union and its members
and constitute the fundamental law governing the members’ rights and obligations.—The importance of a
union’s constitution and by-laws cannot be overemphasized. They embody a covenant between a union and its
members and constitute the fundamental law governing the members’ rights and obligations. As such, the
union’s constitution and by-laws should be upheld, as long as they are not contrary to law, good morals or public
policy.
Same; Same; Same; Collective Bargaining Agreements; Ratification of a new Collective Bargaining Agreement
executed between the new officers of the union and management does not have the effect of validating a void
union election—the ratification refers only to the terms of the new Collective Bargaining Agreement, not the
issue of union leadership.—The ratification of the new CBA executed between the petitioners and the University
of Santo Tomas management did not validate the void October 4, 1996 election. Ratified were the terms of the
new CBA, not the issue of union leadership—a matter that should be decided only by union members in the
proper forum at the proper time and after observance of proper procedures.

Facts:
• Private Respondents are duly elected officers of the UST Faculty Union (USTFU)
• The secretary general of USTFU posted a notice addressed to all USTFU members announcing a general
assembly to be held on 05 October 1996
o Among others, the general assembly was called to elect USTFU's next set of officers.
• On 02 October 1996, the secretary general of UST, upon the request of the various UST faculty club presi-
dents, issued notices allowing all faculty members to hold a convocation on 04 October 1996
o Denominated as a general faculty assembly, the convocation was supposed to discuss the "state of the
unratified USTUSTFU CBA" and "status and election of USTFU officers"
• The convocation was held as scheduled (Oct. 4, 1996)
o The general assembly was attended by members of the USTFU and, as admitted by the appellants,
also by "nonUSTFU members who are members in good standing of the UST Academic Community
Collective Bargaining Unit"
o On this occasion, appellants were elected as USTFU's new set of officers by acclamation and clapping
of hands
o Upon a motion of one Atty. Lopez, admittedly not a member of USTFU, that the USTFU Constitution
and By-Laws (CBL) and "the rules of the election be suspended and that the election be held [on] that
day"
• Respondents filed the instant petition seeking injunctive reliefs and the nullification of the results
• Subsequently, petitioners and UST allegedly entered into another CBA covering the period from 01 June
1996 to 31 May 2001
• The med-arbiter issued a TRO against petitioners
• Public respondent, director of the BLR agreed with the med-arbiter that the Oct. 4 election was void
Issue:
1. WoN the October 4 election was valid. – NO
2. WoN the suspension of the CBL was valid. – NO
Held:
1) The election was not valid
a) The right to vote in the union is enjoyed only by union members
• A union election should be distinguished from a certification election, which is the process of deter-
mining, through secret ballot, the sole and exclusive bargaining agent of the employees in the appro-
priate bargaining unit, for purposes of collective bargaining
• Specifically, the purpose of a certification election is to ascertain whether or not a majority of the em-
ployees wish to be represented by a labor organization and, in the affirmative case, by which particular
labor organization
• In a certification election, all employees belonging to the appropriate bargaining unit can vote
• A union member who likewise belongs to the appropriate bargaining unit is entitled to vote in said
election. However, the reverse is not always true; an employee belonging to the appropriate bargaining
unit but who is not a member of the union cannot vote in the union election, unless otherwise autho-
rized by the constitution and bylaws of the union.
• In this case, non-members participated in the assembly and in the voting
b) The election did not follow the procedures imposed by the CBL
 • The union's CBL is the fundamental law that governs the relationship between and among the members
of the union. It is where the rights, duties and obligations, powers, functions and authority of the offi-
cers as well as the members are defined
• First, the assembly was not called by the USTFU. It was merely a convocation of faculty clubs, It was
not convened in accordance with the provision on general membership meetings. It was in fact a gath-
ering that was called and participated in by management and nonunion members
• Second, there was no commission on elections to oversee the election, as mandated by Sections 1 and 2
of Article IX of the USTFU's CBL
• Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX of
the USTFU's CBL, as well as Article 241 (c) of the Labor Code
2) The suspension of the CBL was not valid
• Petitioners contend that the October 4, 1996 assembly "suspended" the union's CBL. They aver that the
suspension and the election that followed were in accordance with their "constituent and residual pow-
ers as members of the collective bargaining unit to choose their representatives for purposes of collec-
tive bargaining."
• The general faculty assembly was not the proper forum to conduct the election of USTFU officers. Not
all who attended the assembly were members of the union; some, apparently, were even disqualified
from becoming union members, since they represented management
• The person who moved for the suspension of USTFU's CBL was not a member of USTFU. Allowing a
nonunion member to initiate the suspension of a union's CBL, and nonunion members to participate in
a union election on the premise that the union's CBL had been suspended in the meantime, is incompat-
ible with the freedom of association and protection of the right to organize
• The grievances of the petitioners could have been brought up and resolved in accordance with the pro-
cedure laid down by the union's CBL

——o0o——

CASE NO. 12

G.R. No. 107792. March 2, 1998.*

SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILUTUCP), petitioners, vs. THE SECRETARY

OF LABOR, NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER AND EXPORTER
CORPORATION, respondents.

Labor Law; Labor Unions; An employer does not have the power to declare a union as the exclusive representa-
tive of its workers for the purpose of collective bargaining.—In accordance with this ruling, Permex Producer
should not have given its voluntary recognition to SMP-PIILU-TUCP when the latter asked for recognition as
exclusive collective bargaining agent of the employees of the company. The company did not have the power to
declare the union the exclusive representative of the workers for the purpose of collective bargaining.

Same; Same; Certification Elections; Certification election is the most effective and the most democratic way of
determining which labor organization can truly represent the working force in the appropriate bargaining unit of
a company.—Indeed, petitioner’s contention runs counter to the trend towards the holding of certification elec-
tion. By virtue of Executive Order No. 111, which became effective on March 4, 1987, the direct certification
previously allowed under the Labor Code had been discontinued as a method of selecting the exclusive bargain-
ing agents of the workers. Certification election is the most effective and the most democratic way of determin-
ing which labor organization can truly represent the working force in the appropriate bargaining unit of a com-
pany.

Same; Same; Same; It is not enough that a union has the support of the majority of the employees.—But it is not
enough that a union has the support of the majority of the employees. It is equally important that everyone in the
bargaining unit be given the opportunity to express himself.
FACTS:

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 fol-
lows:

National Federation of Labor (NFL)- 235; No Union- 466; Spoiled Ballots- 18; Marked Ballots- 9; Chal-
lenged Ballots- 7

However, some employees of Permex Producer formed a labor organization known as the Samahang Mangga-
gawa sa Permex (SMP) which they registered with the Department of Labor and Employment on March 11,
1991. The union later affiliated with the Philippine Integrated Industries Labor Union (PIILU).

Samahang Manggagawa sa PermexPhilippine Integrated Industries Labor Union (SMP-PIILU), wrote the re-
spondent company requesting recognition as the sole and exclusive bargaining representative of employees at
the Permex Producer. Permex Producer recognized SMP-PIILU and entered into a collective bargaining agree-
ment with it. The CBA was ratified between by the majority of the rank and file employees of Permex Producer.
It was certified by the DOLE.

Respondent NFL filed a petition for certification election, but it was dismissed by Med-Arbiter. Respondent
NFL then appealed the order to the Secretary of Labor and Employment. The Secretary of Labor, set aside the
order of the Med-Arbiter and ordered a certification election to be conducted among the rank and file employees
at the Permex Producer.

ISSUE:
1. WON the employer have the power to declare the union as the EBR of the workers.
2. WON the order of the Public Respondent of the conduct of certification election valid.

HELD:

Permex Producer should not have given its voluntary recognition to SMP-PIILU-TUCP when the latter asked
for recognition as exclusive collective bargaining agent of the employees of the company. The company did not
have the power to declare the union the exclusive representative of the workers for the purpose of collective
bargaining.

Certification election is the most effective and the most democratic way of determining which labor organization
can truly represent the working force in the appropriate bargaining unit of a company.

The Contract Bar Rule is not applicable in this case. The purpose of the rule is to ensure stability in the relation-
ships of the workers and the management by preventing frequent modifications of any collective bargaining
agreement earlier entered into by them in good faith and for the stipulated original period. The petitioner entered
into a CBA with Permex Producer when its status as exclusive bargaining agent of the employees had not been
established yet.

——o0o——

CASE No. 13

G.R. No. 75810. September 9, 1991 .*

KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPILKATIPUNAN), petitioner, vs. HON. CRES-
ENCIANO B. TRAJANO, in his capacity as Director, Bureau of Labor Relations, and VIRON GAR-
MENTS MFG., CO., INC., respondents.

Labor Law; Labor Organization; The prohibition imposed by law on the holding of a certification election with-
in one year from the date of issuance of declaration of a final certification election result can have no application
to the case at bar.—It is evident that the prohibition imposed by law on the holding of a certification election
“within one year from the date of issuance of declaration of a final certification election result"—in this case
from February 27, 1981, the date of the Resolution declaring NAFLU the exclusive bargaining representative of
rank-and-file workers of VIRON—can have no application, to the case at bar. That one-year period—known as
the “certification year” during which the certified union is required to negotiate with the employer, and certifica-
tion election is prohibited—has long since expired.

Same; Same; Same; Fact that prior to the filing of the petition for election in this case, there was no such bar-
gaining deadlock which had been submitted to conciliation or arbitration or had been become the subject of a
valid notice of strike or lockout certain.—Again it seems fairly certain that prior to the filing of the petition for
election in this case, there was no such “bargaining deadlock x x (which) had been submitted to conciliation or
arbitration or had become the subject of a valid notice of strike or lockout.” To be sure, there are in the record
assertions by NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful because
of the latter’s recalcitrance, and unfulfilled promises to bargain collectively; but there is no proof that it had tak-
en any action to legally coerce ce VIRON to comply with its statutory duty to bargain collectively. It could have
charged VIRON with unfair labor practice; but it did not. It could have gone on a legitimate strike in protest
against VIRON’s refusal to bargain collectively and compel it to do so; but it did not. There are assertions by
NAFLU, too, that its attempts to bargain collectively had been delayed by continuing challenges to the resolu-
tion pronouncing it the sole bargaining representative in VIRON; but there is no adequate substantiation thereof,
or of how it did in fact prevent initiation of the bargaining process between it and VIRON.

Facts:

February 27, 1981, the National Federation of Labor Unions (NAFLU) was declared the exclusive bargaining
representative of all rank-and-file employees of Viron Garments Manufacturing Co., Inc. (VIRON).
April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino KAMPIL Katipunan filed with the Bu-
reau of Labor Relations a petition for certification election among the employees of VIRON. The petition al-
legedly counted with the support of more than thirty percent (30%) of the workers at VIRON.
NAFLU opposed the petition. The Med-Arbiter however ordered, on June 14, 1985, that a certification election
be held at VIRON as prayed for, after ascertaining that KAMPIL had complied with all the requirements of law
and that since the certification of NAFLU as sole bargaining representative in 1981, no collective bargaining
agreement had been executed between it and VIRON.
NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985,
it was in process of collective bargaining with VIRON; that there was in fact a deadlock in the negotiations
which had prompted it to file a notice of strike; and that these circumstances constituted a bar to the petition for
election.
Issue:
Whether or not KAMPIL's petition for certification election is barred because, before its filing, a bar-
gaining deadlock between VIRON and NAFLU, had been submitted to conciliation or arbitration or had be-
come the subject of a valid notice of strike or lockout.

Held:
It seems fairly certain that prior to the filing of the petition for election in this case, there was no such "bargain-
ing deadlock ... (which) had been submitted to conciliation or arbitration or had become the subject of a valid
notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to bring
VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance and unfulfilled
promises to bargain collectively; but there is no proof that it had taken any action to legally coerce VIRON to
comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice;
but it did not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively
and compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain collec-
tively had been delayed by continuing challenges to the resolution pronouncing it the sole bargaining represen-
tative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of the
bargaining process between it and VIRON.
——oOo——

CASE NO. 14

G.R. Nos. 158930-31. March 3, 2008.*

UNION OF FILIPRO EMPLOYEES-DRUG, FOOD AND ALLIED INDUSTRIES UNIONS-KILU-

SANG MAYO UNO (UFE-DFA-KMU), petitioner, vs. NESTLÉ PHILIPPINES, INCORPORATED, re-
spondent.
G.R. Nos. 158944-45. March 3, 2008.*
NESTLÉ PHILIPPINES, INCORPORATED, petitioner, vs. UNION OF FILIPRO EMPLOYEES-
DRUG, FOOD AND ALLIED INDUSTRIES UNIONS-KILUSANG MAYO UNO (UFE-DFA-KMU), re-
spondent.

Labor Law; Collective Bargaining Agreement; The purpose of collective bargaining is the reaching of an
agreement resulting in a contract binding on the parties; The duty to bargain does not include the obligation to
reach an agreement.—The purpose of collective bargaining is the reaching of an agreement resulting in a con-
tract binding on the parties; but the failure to reach an agreement after negotiations have continued for a reason-
able period does not establish a lack of good faith. The statutes invite and contemplate a collective bargaining
contract, but they do not compel one. The duty to bargain does not include the obligation to reach an agreement.

Same; Same; There is no per se test of good faith in bargaining.—The crucial question, therefore, of whether or
not a party has met his statutory duty to bargain in good faith typically turns on the facts of the individual case.
As we have said, there is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be
drawn from the facts. To some degree, the question of good faith may be a question of credibility. The effect of
an employer’s or a union’s individual actions is not the test of good-faith bargaining, but the impact of all such
occasions or actions, considered as a whole, and the inferences fairly drawn therefrom collectively may offer a
basis for the finding of the NLRC.

Same; Same; While the law makes it an obligation for the employer and the employees to bargain collectively
with each other, such compulsion does not include the commitment to precipitately accept or agree to the pro-
posals of the other.—For a charge of unfair labor practice to prosper, it must be shown that Nestlé was motivat-
ed by ill will, “bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good cus-
toms, or public policy, and, of course, that social humiliation, wounded feelings, or grave anxiety resulted x x x”
in disclaiming unilateral grants as proper subjects in their collective bargaining negotiations. While the law
makes it an obligation for the employer and the employees to bargain collectively with each other, such compul-
sion does not include the commitment to precipitately accept or agree to the proposals of the other. All it con-
templates is that both parties should approach the negotiation with an open mind and make reasonable effort to
reach a common ground of agreement.

FACTS:

UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of Nestlé belong-
ing to the latter’s Alabang and Cabuyao plants. Despite fifteen (15) meetings between them, the parties failed to
reach any agreement on the proposed CBA. The union then filed a case for unfair labor practice against Nestlé.
ISSUE:Was Nestlé guilty of unfair labor practice?

HELD: NO. [citing Arts. 252 and 253 of the Labor Code]

[T]he purpose of collective bargaining is the reaching of an agreement resulting in a contract binding
on the parties; but the failure to reach an agreement after negotiations have continued for a reasonable period
does not establish a lack of good faith.  The statutes invite and contemplate a collective bargaining contract, but
they do not compel one.  The duty to bargain does not include the obligation to reach an agreement.

The crucial question, therefore, of whether or not a party has met his statutory duty to bargain in good
faith typically turns on the facts of the individual case.  As we have said, there is no per se test of good faith in
bargaining.  Good faith or bad faith is an inference to be drawn from the facts.  To some degree, the question of
good faith may be a question of credibility.  The effect of an employer’s or a union’s individual actions is not the
test of good-faith bargaining, but the impact of all such occasions or actions, considered as a whole, and the
inferences fairly drawn therefrom collectively may offer a basis for the finding of the NLRC.

For a charge of unfair labor practice to prosper, it must be shown that Nestlé was motivated by ill will,
“bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public
policy, and, of course, that social humiliation, wounded feelings, or grave anxiety resulted x x x” in disclaiming
unilateral grants as proper subjects in their collective bargaining negotiations.  While the law makes it an obliga-
tion for the employer and the employees to bargain collectively with each other, such compulsion does not in-
clude the commitment to precipitately accept or agree to the proposals of the other.  All it contemplates is that
both parties should approach the negotiation with an open mind and make reasonable effort to reach a common
ground of agreement.

[in citing Art. 247 and 248 (g)]

In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the second Notice of Strike nor
the records of these cases substantiate a finding of unfair labor practice. It is not enough that the union believed
that the employer committed acts of unfair labor practice when the circumstances clearly negate even a prima
facie showing to warrant such a belief. (Tiu v. National Labor Relations Commission, G.R. No. 123276, 18 Au-
gust 1997, 277 SCRA 681, 688.)

Employers are accorded rights and privileges to assure their self-determination and independence and reason-
able return of capital. (Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470 SCRA
125, 136.) This mass of privileges comprises the so-called management prerogatives. (Capitol Medical Center,
Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) In this connection, the rule is that
good faith is always presumed. As long as the company’s exercise of the same is in good faith to advance its
interest and not for purpose of defeating or circumventing the rights of employees under the law or a valid
agreement, such exercise will be upheld. (Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September
2005, 470 SCRA 125, 136.)

There is no per se test of good faith in bargaining. (Hongkong Shanghai Banking Corporation Employees Union
v. National Labor Relations Commission, G.R. No. 125038, 6 November 1997, 281 SCRA 509, 518.) Good
faith or bad faith is an inference to be drawn from the facts. (Hongkong Shanghai Banking Corporation Em-
ployees Union v. National Labor Relations Commission, G.R. No. 125038, 6 November 1997, 281 SCRA 509,
518.) Herein, no proof was presented to exemplify bad faith on the part of Nestlé apart from mere allegation.
Construing arguendo that the content of the aforequoted letter of 29 May 2001 laid down a pre-condition to its
agreement to bargain with UFE-DFA-KMU, Nestlé’s inclusion in its Position Paper of its proposals affecting
other matters covered by the CBA negates the claim of refusal to bargain or bargaining in bad faith. According-
ly, since UFE-DFA-KMU failed to proffer substantial evidence that would overcome the legal presumption of
good faith on the part of Nestlé, the award of moral and exemplary damages is unavailing.
——o0o——
CASE NO. 15

G.R. No. 113856. September 7, 1998.*

SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING-UNITED WORKERS OF THE

PHILIPPINES (SMTFM-UWP), its officers and members, petitioners, vs. NATIONAL LABOR RELA-
TIONS COMMISSION, HON. JOSE G. DE VERA and TOP FORM MANUFACTURING PHIL., INC.,
respondents.

Labor Law; Collective Bargaining Agreements; Minutes; If there was indeed a promise or undertaking on the
part of the employer to obligate itself to grant an automatic across-the-board wage increase, the union should
have requested or demanded that such “promise or undertaking” be incorporated in the CBA; A union may not
validly claim that a proposal embodied in the Minutes of the negotiation forms part of the CBA that it finally
entered into with the employer.—The basic premise of this argument is definitely untenable. To start with, if
there was indeed a promise or undertaking on the part of private respondent to obligate itself to grant an auto-
matic across-the-board wage increase, petitioner union should have requested or demanded that such “promise
or undertaking” be incorporated in the CBA. After all, petitioner union has the means under the law to compel
private respondent to incorporate this specific economic proposal in the CBA. It could have invoked Article 252
of the Labor Code defining “duty to bargain,” thus, the duty includes “executing a contract incorporating such
agreements if requested by either party.” Petitioner union’s assertion that it had insisted on the incorporation of
the same proposal may have a factual basis considering the allegations in the aforementioned joint affidavit of
its members. However, Article 252 also states that the duty to bargain “does not compel any party to agree to a
proposal or make any concession.” Thus, petitioner union may not validly claim that the proposal embodied in
the Minutes of the negotiation forms part of the CBA that it finally entered into with private respondent.

Same; Same; Same; A CBA is not an ordinary contract but one impressed with public interest; Only provisions
embodied in the CBA should be so interpreted and complied with—where a proposal raised by a contracting
party does not find print in the CBA, it is not a part thereof and the proponent has no claim whatsoever to its
implementa-tion.—The CBA is the law between the contracting parties—the collective bargaining representa-
tive and the employer-company. Compliance with a CBA is mandated by the expressed policy to give protection
to labor. In the same vein, CBA provisions should be “construed liberally rather than narrowly and technically,
and the courts must place a practical and realistic construction upon it, giving due consideration to the context in
which it is negotiated and purpose which it is intended to serve.” This is founded on the dictum that a CBA is
not an ordinary contract but one impressed with public interest. It goes without saying, however, that only pro-
visions embodied in the CBA should be so interpreted and complied with. Where a proposal raised by a con-
tracting party does not find print in the CBA, it is not a part thereof and the proponent has no claim whatsoever
to its implementation.

Same; Same; Same; The union’s contention that the Minutes of the collective bargaining negotiation meeting
forms part of the entire agreement is pointless—the Minutes reflects the proceedings and discussions undertaken
in the process of bargaining for worker benefits in the same way that the minutes of court proceedings show
what transpired therein; If an employer promised something in the negotiations, such promise could only be
demandable in law if incorporated in the CBA.—Hence, petitioner union’s contention that the Minutes of the
collective bargaining negotiation meeting forms part of the entire agreement is pointless. The Minutes reflects
the proceedings and discussions undertaken in the process of bargaining for worker benefits in the same way
that the minutes of court proceedings show what transpired therein. At the negotiations, it is but natural for both
management and labor to adopt positions or make demands and offer proposals and counter-proposals. Howev-
er, nothing is considered final until the parties have reached an agreement. In fact, one of management’s usual
negotiation strategies is to “x x x agree tentatively as you go along with the understanding that nothing is bind-
ing until the entire agreement is reached.” If indeed private respondent promised to continue with the practice of
granting across-the-board salary increases ordered by the government, such promise could only be demandable
in law if incorporated in the CBA.
Same; Same; Same; Where a proposal was never embodied in the CBA, the promise has remained just that, a
promise, the implementation of which cannot be validly demanded under the law.—By making such promise,
private respondent may not be considered in bad faith or at the very least, resorting to the scheme of feigning to
undertake the negotiation proceedings through empty promises. As earlier stated, petitioner union had, under the
law, the right and the opportunity to insist on the foreseeable fulfillment of the private respondent’s promise by
demanding its incorporation in the CBA. Because the proposal was never embodied in the CBA, the promise
has remained just that, a promise, the implementation of which cannot be validly demanded under the law.

Same; Same; With the execution of a CBA, bad faith bargaining can no longer be imputed upon any of the par-
ties thereto.—With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the
parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily incorporated therein
by the parties. This is not a case where private respondent exhibited an indifferent attitude towards collective
bargaining because the negotiations were not the unilateral activity of petitioner union. The CBA is proof
enough that private respondent exerted “reasonable effort at good faith bargaining.”

Same; Same; Bad faith cannot be inferred from a party’s insistence on the inclusion of a particular substantive
provision unless it concerns trivial matters or is obviously intolerable.—Indeed, the adamant insistence on a
bargaining position to the point where the negotiations reach an impasse does not establish bad faith. Neither
can bad faith be inferred from a party’s insistence on the inclusion of a particular substantive provision unless it
concerns trivial matters or is obviously intolerable. “The question as to what are mandatory and what are merely
permissive subjects of collective bargaining is of significance on the right of a party to insist on his position to
the point of stalemate. A party may refuse to enter into a collective bargaining contract unless it includes a de-
sired provision as to a matter which is a mandatory subject of collective bargaining; but a refusal to contract
unless the agreement covers a matter which is not a mandatory subject is in substance a refusal to bargain about
matters which are mandatory subjects of collective bargaining; and it is no answer to the charge of refusal to
bargain in good faith that the insistence on the disputed clause was not the sole cause of the failure to agree or
that agreement was not reached with respect to other disputed clauses.”

Facts:
➢ 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
➢ On February 27, 1990, A the collective bargaining negotiation was held.
➢ The parties agreed to discuss unresolved economic issues. According to the minutes of the meeting,
Article VII of the collective bargaining agreement was discussed.
o In the minutes of the meeting, across the board wage increase was tackled but it was not
stated anymore in the CBA since the union dropped such proposals relying to the undertak-
ings made by the officials of the company
➢ 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 the issue of this case

Issues:
(1) whether or not private respondent committed an unfair labor practice in its refusal to grant across-the-
board wage increases in implementing Wage Orders Nos. 01 and 02, which was stated in the minutes
of the meeting on their discussions on February 27, 1990?
(2) whether or not an employer committed an unfair labor practice by bargaining in bad faith and dis-
criminating against its employees?
(3) whether or not there was a significant wage distortion of the wage structure in private respondent as a
result of the manner by which said wage orders were implemented?
Held:
1. No. Since the across-the-board wage increase is not part of the CBA
 a. The petitioner’s main point that the Minutes of the collective bargaining negotiation meeting
forms part of the entire agreement is pointless, it could only be demandable in law if incor-
porated in the CBA, but in this case it was not.
b. The Minutes only reflects the proceedings and discussions undertaken in the process of bar-
gaining for worker benefits in the same way that the minutes of court proceedings show what
transpired therein. 
c. If indeed private respondent promised to continue with the practice of granting across-the-
board salary increases ordered by the government, such promise could only be demandable
in law if incorporated in the CBA.
d. Moreover, petitioner union had the right and the opportunity to insist on the foreseeable ful-
fillment of the private respondent's promise by demanding its incorporation in the CBA but
they did not.
i. Because the proposal was never embodied in the CBA, the promise has remained
just that, a promise, the implementation of which cannot be validly demanded under
the law.
2. No. With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the
parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily incorpo-
rated therein by the parties. This is not a case where private respondent exhibited an indifferent atti-
tude towards collective bargaining because the negotiations were not the unilateral activity of peti-
tioner union. The CBA is proof enough that private respondent exerted "reasonable effort at good
faith bargaining."
a. Moreover, private respondent may not be considered in bad faith since As earlier said, peti-
tioner union had, under the law, the right and the opportunity to insist on
the foreseeable fulfillment of the private respondent's promise by demanding its incorpora-
tion in the CBA. Because the proposal was never embodied in the CBA, the promise has
remained just that, a promise, the implementation of which cannot be validly demanded un-
der the law.
b.
3. Since it is a question of fact, the NLRC has the jurisdiction. As such, the factual findings of the NLRC
are generally accorded not only respect but also finality provided that its decisions are supported by
substantial evidence and devoid of any taint of unfairness or arbitrariness. 
a. the NLRC Decision in this case which was penned by the dissenter in that case, Presiding
Commissioner Edna Bonto-Perez, unanimously ruled that no wage distortions marred private
respondents implementation of the wage orders.
i. On the issue of wage distortion, there was a meaningful implementation of Wage
Orders Nos. 01 and 02. This debunks the claim that there was wage distortion as
could be shown by the itemized wages implementation quoted above. It should be
noted that the itemization has not been successfully traversed by the appellants
ii. the petitioners contention on the issue of wage distortion and the resulting allegation
of discrimination against the private respondents employees are anchored on its
dubious position that private respondents promise to grant an across-the-board in-
crease in government-mandated salary benefits reflected in the Minutes of the nego-
tiation is an enforceable part of the CBA.

——o0o——

CASE NO. 16

G.R. No. 141471. September 18, 2000.*

COLEGIO DE SAN JUAN DE LETRAN, petitioner, vs. ASSOCIATION OF EMPLOYEES AND FAC-
ULTY OF LETRAN and ELEONOR AMBAS, respondents.
Labor Law; Collective Bargaining; Words and Phrases; “Duty to Bargain Collectively,” Defined.—As regards
the first issue, Article 252 of the Labor Code defines the meaning of the phrase “duty to bargain collectively,” as
follows: Art. 252. Meaning of duty to bargain collectively.—The duty to bargain collectively means the perfor-
mance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employ-
ment including proposals for adjusting any grievances or questions arising under such agreement and executing
a contract incorporating such agreements if requested by either party but such duty does not compel any party to
agree to a proposal or to make any concession.

Same; Same; An employer’s utter lack of interest in bargaining with the union is a clear violation of Article 250
of the Labor Code governing the procedure in collective bargaining, and a company’s refusal to make counter-
proposal to the union’s proposed CBA is an indication of its bad faith.—Petitioner’s utter lack of interest in bar-
gaining with the union is obvious in its failure to make a timely reply to the proposals presented by the latter.
More than a month after the proposals were submitted by the union, petitioner still had not made any counter-
proposals. This inaction on the part of petitioner prompted the union to file its second notice of strike on March
13, 1996. Petitioner could only offer a feeble explanation that the Board of Trustees had not yet convened to
discuss the matter as its excuse for failing to file its reply. This is a clear violation of Article 250 of the Labor
Code governing the procedure in collective bargaining, x x x As we have held in the case of Kiok Loy vs.
NLRC, the company’s refusal to make counter-proposal to the union’s proposed CBA is an indication of its bad
faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union,
there is a clear evasion of the duty to bargain collectively. In the case at bar, petitioner’s actuation show a lack of
sincere desire to negotiate rendering it guilty of unfair labor practice.

Same; Same; Certification Elections; In order to allow the employer to validly suspend the bargaining process
there must be a valid petition for certification election raising a legitimate representation issue.—In order to al-
low the employer to validly suspend the bargaining process there must be a valid petition for certification elec-
tion raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does
not ipso facto justify the suspension of negotiation by the employer. The petition must first comply with the pro-
visions of the Labor Code and its Implementing Rules. Foremost is that a petition for certification election must
be filed during the sixty-day freedom period.

Same; Same; Same; Contract Bar Rule; Under the “Contract Bar Rule,” if a collective bargaining agreement has
been duly registered in accordance with Article 231 of the Labor Code, a petition for certification election or a
motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agree-
ment; The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as
continuing in force and effect until a new CBA shall have been validly executed.—The “Contract Bar Rule”
under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides that: “. . . . If a
collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition
for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the
expiry date of such agreement.” The rule is based on Article 232, in relation to Articles 253, 253-A and 256 of
the Labor Code. No petition for certification election for any representation issue may be filed after the lapse of
the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite the
lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until
a new CBA shall have been validly executed. Hence, the contract bar rule still applies. The purpose is to ensure
stability in the relationship of the workers and the company by preventing frequent modifications of any CBA
earlier entered into by them in good faith and for the stipulated original period.

Same; Same; Same; Unfair Labor Practices; An employer who sternly refuses to bargain in good faith with the
employee union is guilty of unfair labor practice.—In the case at bar, the lifetime of the previous CBA was from
1989-1994. The petition for certification election by ACEC, allegedly a legitimate labor organization, was filed
with the Department of Labor and Employment (DOLE) only on May 26, 1996. Clearly, the petition was filed
outside the sixty-day freedom period. Hence, the filing thereof was barred by the existence of a valid and exist-
ing collective bargaining agreement. Consequently, there is no legitimate (representation issue and, as such, the
filing of the petition for certification election did not constitute a bar to the ongoing negotiation. Reliance, there-
fore, by petitioner of the ruling in Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises is misplaced
since that case involved a legitimate representation issue which is not present in the case at bar. Significantly, the
same petition for certification election was dismissed by the Secretary of Labor on October 25, 1996. The dis-
missal was upheld by this Court in a Resolution, dated April 21, 1997. In view of the above, there is no doubt
that petitioner is guilty of unfair labor practice by its stern refusal to bargain in good faith with respondent
union.

Same; Same;Management Prerogatives; Illegal Dismissals; While the right of an employer to terminate the ser-
vices of an employee for a just or authorized cause is recognized, nevertheless, the dismissal of employees must
be made within the parameters of law and pursuant to the tenets of equity and fair play.—To justify the dis-
missal, petitioner asserts that the union president was terminated for cause, allegedly for insubordination for her
failure to comply with the new working schedule assigned to her, and pursuant to its managerial prerogative to
discipline and/or dismiss its employees. While we recognize the right of the employer to terminate the services
of an employee for a just or authorized cause, nevertheless, the dismissal of employees must be made within the
parameters of law and pursuant to the tenets of equity and fair play. The employer’s right to terminate the ser-
vices of an employee for just or authorized cause must be exercised in good faith. More importantly, it must not
amount to interfering with, restraining or coercing employees in the exercise of their right to self-organization
because it would amount to, as in this case, unlawful labor practice under Article 248 of the Labor Code.

Same; Same; Same; Right to Self-organization; The right to self-organization of employees must not be inter-
fered with by the employer on the pretext of exercising management prerogative of disciplining its employees.
—In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming the findings
of the Secretary of Labor and Employment. The right to self-organization of employees must not be interfered
with by the employer on the pretext of exercising management prerogative of disciplining its employees. In this
case, the totality of conduct of the employer shows an evident attempt to restrain the employees from fully exer-
cising their rights under the law. This cannot be done under the Labor Code.

Facts:

During the renegotiation of the respondent unions Collective Bargaining Agreement with the petitioner, Eleonor
Ambas emerged as the newly elected President of the union. Ambas wanted to continue the renegotiation of the
CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already prepared for signing by the par-
ties. However, the union members rejected the said CBA.  Thereafter, petitioner accused the union officers of
bargaining in bad faith before the NLRC. The Labor Arbiter decided in favor of the petitioner.  This decision
was reversed on appeal with the NLRC.

The parties later agreed to disregard the unsigned CBA and to start negotiation on new five-year CBA. During
the pendency of approval of proposals, Ambas was informed that her work schedule was being changed.  Ambas
protested and requested management to submit the issue to a grievance machinery under the old CBA. 

After the petitioner’s inaction on the CBA, the union filed a notice to strike.  After meeting with the NCMB to
discuss the ground rules for renegotiation, Ambas received a letter dismissing her for alleged insubordination. 
The petitioner then ceased negotiations when it received news that another labor organization had filed a petition
for certification.

The union finally struck, but the Secretary of Labor and Employment ordered them to return to work and for
petitioner to accept them back.  The Secretary of Labor and Employment later rendered judgement that the peti-
tioner had been guilty of unfair labor practice. The Court of Appeals affirmed the findings of the former.

Issue(s):
 1. Whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it uni-
laterally suspended the ongoing negotiations for a new CBA; and
2. Whether the termination of the union president amounts to an interference of the employees’ right to
self-organization.

Held:

The Supreme Court found the petition unmeritorious.

1. The petitioner’s failure to act upon the submitted CBA proposal within the ten-day period exemplified
in Article 250 of the Labor Code is a clear violation of the governing procedure of collective bargain-
ing.  As the Court has held in Kiok Loy vs. NLRC, the company’s refusal to make counter-proposal to
the union’s proposed CBA is an indication of bad faith.  Moreover, the succeeding events are obvious
signs that the petitioner had merely been employing delaying tactics to the passage of the proposed
CBA.  Moreover, in order to allow the employer to validly suspend the bargaining process, there must
be a valid petition for certification election raising a legitimate representation issue.  Hence, the mere
filing of a petition for certification election does not ipso facto justify the suspension of negotiation by
the employer.
2. The factual backdrop of the termination of Ambas led the Court to no other conclusion that she was
dismissed in order to strip the union of a leader who would fight for the right of her co-workers in the
bargaining table.  While the Court recognizes the right of the employer to terminate the services of an
employee for a just or authorized cause, nevertheless, the dismissal of employees must be made within
the parameters of aw and pursuant to the tenets of equity and fair play.  Even assuming arguendo that
Ambas was guilty of insubordination, such disobedience was not a valid ground to terminate her em-
ployment.  When the exercise of the management to discipline its employees tends to interfere with the
employees’ right to self-organization, it amounts to union-busting and is therefore a prohibited act.

——o0o——

CASE NO. 17

G.R. No. 77282. May 5, 1989. *

ASSOCIATED LABOR UNIONS (ALU), petitioner, vs. HON. PURA FERRER-CALLEJA, as Director of
the Bureau of Labor Relations, Ministry of Labor and Employment; PHILIPPINE SOCIAL SECURITY
LABOR UNION (PSSLU); SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL); and GAW
TRADING, INC., respondents.

Labor Law; Labor Relations; Unions; Collective Bargaining; Certification election; Mechanics of collective
bargaining are set in motion only when the jurisdictional preconditions have been complied with. ___ We have
previously held that the mechanics of collective bargaining are set in motion only when the following jurisdic-
tional preconditions are present, namely, (1) possession of the status of majority representation by the employ-
ees’ representative in accordance with any of the means of selection and/or designation provided for by the La-
bor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, paragraph (a) of
the New Labor Code. In the present case, the standing of petitioner as an exclusive bargaining representative is
dubious, to say the least. It may be recalled that respondent company, in a letter dated May 12, 1986 and ad-
dressed to petitioner, merely indicated that it was “not against the desire of (its) workers” and required petitioner
to present proof that it was supported by the majority thereof in a meeting to be held on the same date. The only
express recognition of petitioner as said employees’ bargaining representative that We see in the records is in the
collective bargaining agreement entered into two days thereafter. Evidently, there was precipitate haste on the
part of respondent company in recognizing petitioner union, which recognition appears to have been based on
the self-serving claim of the latter that it had the support of the majority of the employees in the bargaining unit.
Furthermore, at the time of the supposed recognition, the employer was obviously aware that there were other
unions existing in the unit. As earlier stated, respondent company’s letter is dated May 12, 1986 while the two
other unions, Southern Philippine Federation of Labor (hereafter, SPFL) and Philippine Social Security Labor
Union (PSSLU, for short), went on strike earlier on May 9, 1986. The unusual promptitude in the recognition of
petitioner union by respondent company as the exclusive bargaining representative of the workers in GAW
Trading, Inc., under the fluid and amorphous circumstances then obtaining, was decidedly unwarranted and im-
provident.

Same; Same; Same; Same; Same; Failure to properly determine with legal certainty whether the union enjoyed
majority representation may be a ground to nullify the certification. ___ It bears mention that even in cases
where it was the then Minister of Labor himself who directly certified the union as the bargaining representative,
this Court voided such certification where there was a failure to properly determine with legal certainty whether
the union enjoyed a majority representation. In such a case, the holding of a certification election at a proper
time would not necessarily be a mere formality as there was a compelling reason not to directly and unilaterally
certify a union.

Same; Same; Same; Same; Same; Failure to post the Collective Bargaining Agreement in at least 2 conspicuous
places in the establishment is an additional infirmity. ___ An additional infirmity of the collective bargaining
agreement involved was the failure to post the same in at least two (2) conspicuous places in the establishment
at least five days before its ratification. Petitioner’s rationalization was that “(b)ecause of the real existence of
the illegal strike staged by SPFL in all the stores of GAW Trading, Inc. it had become impossible to comply with
the posting requirement in so far as the realization of its purpose is concerned as there were no impartial mem-
bers of the unit who could be apprised of the CBA’s contents.” This justification is puerile and unacceptable. In
the first place, the posting of copies of the collective bargaining agreement is the responsibility of the employer
which can easily comply with the requirement through a mere mechanical act. The fact that there were “no im-
partial members of the unit” is immaterial. The purpose of the requirement is precisely to inform the employees
in the bargaining unit of the contents of said agreement so that they could intelligently decide whether to accept
the same or not. The assembly of the members of ALU wherein the agreement in question was allegedly ex-
plained does not cure the defect.

Same; Same; Same; Same; Same; Contract Bar Rule; Repudiation made by some of the workers of the alleged
negotiation and ratification of the CBA is a ground to annul the same. ___ Another potent reason for annulling
the disputed collective bargaining agreement is the finding of respondent director that one hundred eighty-one
(181) of the two hundred eighty-one (281) workers who “ratified” the same now “strongly and vehemently deny
and/or repudiate the alleged negotiation and ratification of the CBA”. Although petitioner claims that only seven
(7) of the repudiating group of workers belong to the total number who allegedly ratified the agreement, never-
theless such unsubstantiated contention weighed against the factual findings of the respondent director cannot
negate the fact that the controverted contract will not promote industrial stability. The Court has long since de-
clared that: “x x x Basic to the contract bar rule is the proposition that the delay of the right to select representa-
tives can be justified only where stability is deemed paramount. Excepted from the contract bar rule are certain
types of contracts which do not foster industrial stability, such as contracts where the identity of the representa-
tive is in doubt. Any stability derived from such contracts must be subordinated to the employees’ freedom of
choice because it does not establish the type of industrial peace contemplated by the law.”

FACTS
• Petitioner ALU, through a letter dated May 7, 1986, informed GAW Trading, Inc. that majority of the lat-
ter's employees have authorized ALU to be their sole and exclusive bargaining agent (SEBA), and request-
ed a conference with GAW for the execution of an initial Collective Bargaining Agreement (CBA).
• ALU received a letter dated May 12th from GAW, which letter set the meeting on the same date. The fol-
lowing day, May 13th, ALU transmitted to GAW copies of the proposed CBA. 2 days later, ALU and
GAW executed the CBA.
• In the meantime, on May 9th, 2 unions in the company (SPFL and NAMGAW) went on 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 standing
recognition of ALU as the sole and exclusive bargaining representative of its employees.
• After the signing of the CBA, one of the striking unions filed a petition for certification election.
• Med-Arbiter ruled for the holding of a certification election in all branches of GAW Trading Inc. as to
which ALU filed a Motion for Reconsideration.
• Bureau of Labor Relations granted ALU's appeal (Motion for Reconsideration) and set aside the ques-
tioned Med-Arbiter Order on the ground that the CBA has been effective and valid and the contract bar
rule applicable.
ISSUE:
Whether or not the contract bar rule applies.
HELD:
NO. The subject CBA is defective. The mechanics of collective bargaining are set in motion only when the fol-
lowing jurisdictional preconditions are present, namely, (1) possession of the status of majority representation
by the employees' representative; (2) proof of majority representation; and (3) a demand to bargain. The stand-
ing of ALU as SEBA is dubious, to say the least. The only express recognition of ALU as SEBA in the records is
in the CBA. There was precipitate haste on the part of GAW in recognizing ALU, which recognition appears to
have been based on the self-serving claim of ALU that it had the support of the majority of the employees in the
bargaining unit. At the time of the supposed recognition, GAW was obviously aware that there were other
unions existing in the unit. Respondent company's letter is dated May 12, 1986 while the two other unions, went
on strike earlier on May 9, 1986. An additional infirmity of the collective bargaining agreement involved was
the failure to post the same in at least two (2) conspicuous places in the establishment at least five days before
its ratification. Also, about 64% of the workers who "ratified" the CBA now strongly repudiate the alleged nego-
tiation and ratification of the CBA.
The order for the conduct of a certification election among the rank-and-file workers of respondent GAW Trad-
ing Inc. is AFFIRMED.
——o0o——

CASE NO. 18

No. L-54334. January 22, 1986.*

KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAM-BANSANG KILUSAN NG PAG-
GAWA (KILUSAN), respondents.

Labor Law; Unfair Labor Practice; Collective Bargaining Agreement; Collective bargaining, concept of.—Col-
lective bargaining which is defined as negotiations towards a collective agreement, is one of the democratic
frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to
create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union
and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an
unfair labor practice for an employer to refuse “to meet and convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and condi-
tions of employment including proposals for adjusting any grievance or question arising under such an agree-
ment and executing a contract incorporating such agreement, if requested by either party.”

Same; Same; Same; Same; Preconditions for setting in motion mechanics of collective bargaining.—While it is
a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate con-
tract negotiation. The mechanics of collective bargaining is set in motion only when the following jurisdictional
preconditions are present, namely, (1) possession of the status of majority representation of the employees’ rep-
resentative in accordance with any of the means of selection or designation provided for by the Labor Code; (2)
proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor
Code . . . . all of which preconditions are undisputedly present in the instant case.
Same; Same; Same; Same; Company’s refusal to make counter-proposal to the union’s proposed collective bar-
gaining agreement, an indication of its bad faith.—We are in total conformity with respondent NLRC’s pro-
nouncement that petitioner Company is GUILTY of unfair labor practice. It has been indubitably established
that (1) respondent Union was a duly certified bargaining agent; (2) it made a definite request to bargain, ac-
companied with a copy of the proposed Collective Bargaining Agreement, to the Company not only once but
twice which were left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoev-
er all of which conclusively indicate lack of a sincere desire to negotiate. A Company’s refusal to make counter
proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is specially
true where the Union’s request for a counter proposal is left unanswered. Even during the period of compulsory
arbitration before the NLRC, petitioner Company’s approach and attitude—stalling the negotiation by a series of
postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements,
lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Peti-
tioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and de-
mands set forth by the Union much less justify its opposition thereto.

Same; Same; Same; Same; When unfair labor practice, committed; Case at bar.—The case at bar is not a case of
first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications the rule had been
laid down that “unfair labor practice is committed when it is shown that the respondent employer, after having
been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an an-
swer or reply to the said proposal. This doctrine was reiterated anew in Bradman vs. Court of Industrial Rela-
tions wherein it was further ruled that “while the law does not compel the parties to reach an agreement, it does
contemplate that both parties will approach the negotiation with an open mind and make a reasonable effort to
reach a common ground of agreement”.

Same; Same; Same; Due process; Denial of due process, not a case of, where the employer’s failure to be heard
was due to the various postponements granted to it and failure to reply to the union’s successive letters to bring
the company to the bargaining table.—Petitioner’s aforesaid submittal failed to impress Us. 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 with any
reply to the latter’s successive letters, all geared towards bringing the Company to the bargaining table. It did
not even bother to furnish or serve the Union with its counter proposal despite persistent requests made therefor.
Certainly, the moves and over-all behavior of petitioner-company were in total derogation of the policy en-
shrined in the New Labor Code which is aimed towards expediting settlement of economic disputes. Hence, this
Court is not prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.

Same; Same; Same; Employer should not be allowed with impunity to resort to schemes feigning negotiations
by going through empty gestures; Findings of NLRC of reasonableness of any collective bargaining agreement,
accorded respect.—We agree with the pronouncement that it is not obligatory upon either side of a labor contro-
versy to precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated
and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures. More
so, as in the instant case, where the intervention of the National Labor Relations Commission was properly
sought for after conciliation efforts undertaken by the BLR failed.

The instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as
amended, which authorizes the said body to determine the reasonableness of the terms and conditions of em-
ployment embodied in any Collective Bargaining Agreement. To that extent, utmost deference to its findings of
reasonableness of any Collective Bargaining Agreement as the governing agreement by the employees and man-
agement must be accorded due respect by this Court.
FACTS: In a certification election, KILUSAN, a legitimate late labor federation, won and was subsequently
certified in a resolution by the BLR as the sole and exclusive bargaining agent of the rank-and-file employees of
Sweden Ice Cream Plant (Company).
Thereafter, the Union furnished  the Company with copies of its proposed CBA. At the same time, it requested
the Company for its counter proposals. The request were ignored and remained unacted upon by the Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union filed a “No-
tice of Strike”, with the BLR on ground of unresolved economic issues in collective bargaining.
The NLRC rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent [company] is hereby declared guilty of unjustified refusal to bargain, in violation
of Section (g) Article 248 (now Article 249), of P.D. 442, as amended. xx

ISSUE: Did the NLRC act with grave abuse of discretion?

HELD: NO
Collective bargaining which is defined as negotiations towards a collective agreement, is one of the democratic
frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to
create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union
and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an
unfair labor practice for an employer to refuse “to meet and convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and condi-
tions of employment including proposals for adjusting any grievance or question arising under such an agree-
ment and executing a contract incorporating such agreement, if requested by either party.
We are in total conformity with respondent NLRC’s pronouncement that petitioner Company is GUILTY of
unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified bargain-
ing agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed CBA, to the Com-
pany not only once but twice which were left unanswered and unacted upon; and (3) the Company made no
counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate.  A Compa-
ny’s refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad
faith and this is specially true where the Union’s request for a counter proposal is left unanswered.  Even during
the period of compulsory arbitration before the NLRC, petitioner Company’s approach and attitude-stalling the
negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submit-
ting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an
agreement with the Union.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that
the Union has a valid cause to complain against its (Company’s) attitude, the totality of which is indicative of
the latter’s disregard of, and failure to live up to, what is enjoined by the Labor Code — to bargain in good faith.
NOTES: While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal
duty to initiate contract negotiation.  The mechanics of collective bargaining is set in motion only when the fol-
lowing jurisdictional preconditions are present, namely,
(1) possession of the status of majority representation of the employees’ representative in accordance with any
of the means of selection or designation provided for by the Labor Code;
(2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New Labor Code . … all of which preconditions are
undisputedly present in the instant case.

——o0o——

CASE NO. 19

No. L-38258. November 19, 1982.*

LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS), petitioner, vs. MARCELO ENTERPRISES

and MARCELO TIRE & RUBBER CORP., MARCELO RUBBER AND LATEX PRODUCTS,
MARCELO STEEL CORPORATION, MARCELO CHEMICAL & PIGMENT CORP., POLARIS
MARKETING CORPORATION and THE COURT OF INDUSTRIAL RELATIONS, respondents.
No. L-38260. November 19, 1982.*

MARCELO TIRE & RUBBER CORPORATION, MARCELO RUBBER & LATEX PRODUCTS, INC.,
MARCELO STEEL CORPORATION, POLARIS MARKETING CORPORATION, MARCELO
CHEMICAL AND PIGMENT CORP., MARCELO ENTERPRISES, under which name or style they are
also known, petitioners, vs. LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS) AND THE
HONORABLE COURT OF INDUSTRIAL RELATIONS, respondents.

Labor Law; There is no evidence that the management of Marcelo group of companies was guilty of ULP in
asking the returning strikers to fill up forms on when they are available for work.—Hence, anent the second
issue of whether or not the complaint for unfair labor practice can be sustained, this Court rules in favor of the
respondent Marcelo Companies and consequently, the appealed Decision is reversed. This reversal is inevitable
after this Court has pored through the voluminuous records of the case as well as after applying the established
jurisprudence and the law on the matters raised.We are not unmindful of the plight of the employees in this case
but We consider it oppressive to grant their petition in G.R.No.L-38258, for not only is there no evidence which
shows that the respondent Marcelo Companies were seeking for an opportunity to discharge these employees for
union activities, or to discriminate against them because of such activities, but there is affirmative evidence to
establish the contrary conclusion.

Same; Management’s suggestion that union file necessary complaint in court in view of fact that there are sever-
al unions claiming to represent employees does not constitute failure or refusal to bargain in good faith to said
union’s demands.—Contrary to the pretensions of complainant LAKAS, the respondent Marcelo Companies did
not ignore the demand for collective bargaining contained in its letter of June 20, 1967. Neither did the compa-
nies refuse to bargain at all. What it did was to apprise LAKAS of the existing conflicting demands for recogni-
tion as the bargaining representative in the appropriate units involved, and suggested the settlement of the issue
by means of the filing of a petition for certification election before the Court of Industrial Relations. This was
not only the legally approved procedure but was dictated by the fact that there was indeed a legitimate represen-
tation issue. PSSLU, with whom the existing CB As were entered into, was demanding of respondent companies
to collectively bargain with it; so was Paulino Lazaro of MUEWA, J.C. Espinas & Associates for MACATIFU
and the MFWU, and the complainant LAKAS for MULU which we understand is the aggrupation of MACATI-
FU, MFWU and UNWU. On top of all of these, Jose Roque of UNWU disauthorized the PSSLU from repre-
senting his union; and similarly, Augusto Carreon of MACATIFU itself informed management as late as July 11,
1967 or after the demand of LAKAS that no group representing his Union “is not authorized and should not be
entertained.”

Same; Where there exists a legitimate issue as to which of several unions is the legitimate representative of em-
ployees, it is ULP for one of the unions to stage a strike and demand that employer sit down with it for collec-
tive bargaining.—The clear facts of the case as hereinbefore restated indisputably show that a legitimate repre-
sentation issue confronted the respondent Marcelo Companies. In the face of these facts and in conformity with
the existing jurisprudence, We hold that there existed no duty to bargain collectively with the complainant
LAKAS on the part of said companies. And proceeding from this basis, it follows that all acts instigated by
complainant LAKAS such as the filing of the Notice of Strike on June 13, 1967 (although later withdrawn) and
the two strikes of September 4, 1967 and November 7, 1967 were calculated, designed and intended to compel
the respondent Marcelo Companies to recognize or bargain with it notwithstanding that it was an uncertified
union, or in the case of respondent Marcelo Tire and Rubber Corporation, to bargain with it despite the fact that
the MUEWA of Paulino Lazaro was already certified as the sole bargaining agent in said respondent company.
These concerted activities executed and carried into effect at the instigation and motivation of LAKAS are all
illegal and violative of the employer’s basic right to bargain collectively only with the representative supported
by the majority of its employees in each of the bargaining units. This Court is not unaware of the present
predicament of the employees involved but much as We sympathize with those who have been misled and so
lost then-jobs through hasty, ill-advised and precipitate moves, We rule that the facts neither substantiate nor
support the finding that the respondent Marcelo Companies are guilty of unfair labor practice.

Same; Employer not guilty of bad faith where it not with union’s officers and offered suggestions on how to
resolve their dif-ferences.—It is also evident from the records that the charge of bargaining in bad faith imputed
to the respondent companies, is hardly credible. In fact, such charge is valid as only against the complainant
LAKAS. The parties had a total of five (5) conferences for purposes of collective bargaining. It is worth consid-
ering that the first strike of September 4, 1967 was staged less than a week after the fourth CBA conference and
without any benefit of any previous strike notice. In this connection, it must be stated that the notice of strike
filed on June 13, 1967 could not have been the strike notice for the first strike because it was already withdrawn
on July 14, 1967. Thus, from these stated facts can be seen that the first strike was held while the parties were in
the process of negotiating. Nor can it be sustained that the respondent Marcelo Companies bargained in bad
faith since there were proposals offered by them, but the complainant LAKAS stood pat on its position that all
of their economic demands should be met and that all of these demands should be granted in all of the respon-
dent Marcelo Companies. The companies’ refusal to accede to the demands of LAKAS appears to be justified
since there is no showing that these companies were in the same state of financial and economic affairs. There is
reason to believe that the first strike was staged only for the purpose of compelling the respondent Marcelo
Companies to accede to the inflexible demands of the complainant LAKAS. The records further establish that
after the resumption of normal operations following the first strike and the consequent Return-to-work Agree-
ment, the striking unions led by complainant LAKAS and the management of the respondent Marcelo Compa-
nies resumed their bargaining negotiations. And that on October 13, 1967, complainant LAKAS sent the final
drafts of the collective bargaining proposals for MFWU and UNWU. The second strike of November 7, 1967
was then staged immediately after which strike, as before, was again lacking of a strike notice. All of these facts
show that it was complainant LAKAS, and not the respondent Marcelo Companies, which refused to negotiate
in the pending collective bargaining process. All that the facts show is that the bargaining position of com-
plainant LAKAS was inflexible and that it was in tine with this uncompromising attitude that the strikes were
declared, significantly after notice that management did not or could not meet all of their 17-points demand.

Same; Employer may be justified in requiring a reasonable scheduling of working hours of returning striking
employees and inquiring into their time availabilities.—But We are more impressed and are persuaded to accept
as true the contention of the respondent Marcelo Companies that the aforestated requirement was only for pur-
poses of proper scheduling of the start of work for each returning strikers. It must be noted that as a conse-
quence of the two strikes which were both attended by widespread acts of violence and vandalism, the business-
es of the respondent companies were completely paralyzed. It would hardly be justiciable to demand of the re-
spondent companies to readmit all the returning workers in one big force or as each demanded readmission.
There were machines that were not in operating condition because of long disuse during the strikes. Some of the
machines needed more than one worker to operate them so that in the absence of the needed team of workers,
the start of work by one without his teammates would necessarily be useless, and the company would be paying
for his time spent doing no work. Finally, We take judicial cognizance of the fact that companies whose busi-
nesses were completely paralyzed by major strikes cannot resume operations at once and in the same state or
force as before the strikes.

Same; Same.—But what strikes Us most in lending credence to respondents’ allegation that Exhibit “49” was
not meant to screen the strikers, is the fact that all of the returning strikers who filled up the form were sched-
uled for work and consequently started with their jobs.It is only those strikers who refused or failed to fill-up the
required form, like the herein complaining employees, who were not scheduled for work and consequently have
not been re-employed by the respondent Marcelo Companies. Even if there was a sincere belief on their part that
the requirement of Exhibit “49” was a ruse at “screening” them, this fear would have been dispelled upon notice
of the fact that each and all of their co-strikers who filled up the required form were in fact scheduled for work
and started to work. The stoppage of their work was not, therefore, the direct consequence of the respondent
companies’ complained act. Hence, their economic loss should not be shifted to the employer.
Same; Right to engage in concerted activities is not an absolute one.—It was never the state policy nor Our judi-
cial pronouncement that the employees’ rights to self-organization and to engage in concerted activities for mu-
tual aid and protection, are absolute or be upheld under all circumstances.

Same; Action; A labor union cannot bring an action on behalf of employees who are members of another union
even if said employees signed the complaint.—Firstly, LAKAS cannot bring any action for and in behalf of the
employees who were members of MUEWA because, as intimated earlier in this Decision, the said local union
was never an affiliate of LAKAS. What appears clearly from the records is that it was Augusto Carreon and his
followers who joined LAKAS, but then Augusto Carreon was not the recognized president of MUEWA and nei-
ther he nor his followers can claim any legitimate representation of MUEWA. Apparently, it is this split faction
of MUEWA, headed by Augusto Carreon, who is being sought to be represented by LAKAS. However, it cannot
do so because the members constituting this split faction of MUEWA were still members of MUEWA which was
on its own right a duly registered labor union. Hence, any suit to be brought for and in behalf of them can be
made only by MUEWA, and not LAKAS. It appearing then that Augusto Carreon and his cohorts did not disaf-
filiate from MUEWA nor signed any individual affiliation with LAKAS, LAKAS bears no legal interest in rep-
resenting MUEWA or any of its members.

FACTS:

On May 23, 1967, the Lakas had existing CBAs within the bargaining units in the respective companies com-
prising Marcelo Companies. The said CBAs were entered into while they were affiliated with a national federa-
tion, Phil Social Security Labor Union.
Two of the CBAs were about to expire in May and June 1967. The other one faced conflict as there was a rival
union.
On March 14, 1967, the management of Marcelo Steel received a letter requesting negotiation of a new CBA
from PSSLU in behalf of UNWU. There were also proposals from the unions in Marcelo Tire and Marcelo
Rubber as the existing CBA was about to expire. Same day, the union oin Marcelo Tire disauthorized PSSLU as
their agent. Afterwards, the rival union submitted ita own proposals.
Another requests were received on May 3, 1967 and May 23, 1967 from two different unions.
As the management was confused as to which of the union really represents the workers, the president asked for
the proof of authorization from the unions and they were informed of the conflicting claims and suggested that
they file for certification election and the decision of the court shall be followed and respected.
PSSLU refused the suggestion of the management and said that they will file ULP for refusing to bargain with
them. All of the unuons subsequently filed a Notice of Strike.
MUEWA was certified as the bargaining agent as it represents the majority of the workers in Marcelo Tire and
that there were no oppositions from the other union or interested persons.
Notices of Strike were withdrawn and the management agreed to sit down in a conference for the bargaining.
On the fourth conference, Lakas declared a strike against Marcelo Companies. Acts of violence and vandalism
attended by picketing, the premises were blocked, windows of the plants were bad.y damaged.
Cases were filed against the strikers and a Return to Work order was agreed upon. Marcelo Companies resumed
its operations and strikers went back to work.
Marcelo Companies and Lakas resumed their bargaining negotiations.
On Oct. 13, 1967 the negotiations reached its final stage. Then Lakas declared another strike without filing a
notice of strike resulting to complete paralyzation of the business.
Notices to return to work were posted and some of the strikers started working again. The management required
the workers to fill up forms so that they may be given a schedule. However, the workers refused and insisted
that they be admitted without complying to the said requirement.
Lakas then filed a ULP case based on the alleged fact of non readmission of striking members.
The trial court ruled that the Marcelo Companies were not remiss in their obligation to bargain and that the
strikes conducted were illegal. However, it was decided that there was ULP in not readmitting all the strikers.
ISSUE:

-Whether or not Marcelo Companies are guilty of ULP

-legitimate representation

HELD:

The SC ruled in favor of Marcelo Companies. Lakas was not the bargaining representative, yet the management
did not ignore the demand for collective bargaining neither it was refused.
Marcelo Companies may rightfully demand for reasonable proof of majority representation on the part of the
supposed or putative bargaining agent as it is a natural consequence of the employer’s duty to bargain with the
bargaining agent who represents the majority of the workers. It is, however, necessary that such demand is made
in good faith and not as a pretext of delay or evasion.
Marcelo Companies did not commit ULP. The facts of the case shows that the strikers were readmitted to work
and the form required was intended for proper scheduling and not to prevent workers from coming back to
work. It is only those who did not report back to work who are not readmitted.
——o0o——

CASE NO. 20

G.R. No. 155690. June 30, 2005.*

CAPITOL MEDICAL CENTER, INC., petitioner, vs. HON. CRESENCIANO B. TRAJANO, in his ca-
pacity as Secretary of the Department of Labor and Employment, and CAPITOL MEDICAL CENTER
EMPLOYEES ASSOCIATION-AFW, respondents.

Labor Law; Collective Bargaining; The pendency of a petition for cancellation of union registration does not
preclude collective bargaining.—As aptly stated by the Solicitor General in his comment on the petition, the
Secretary of Labor correctly ruled that the pendency of a petition for cancellation of union registration does not
preclude collective bargaining.

Same; Same; The discretion to assume jurisdiction may be exercised by the Secretary of Labor and Employment
without the necessity of prior notice or hearing given to any of the parties.—In Magnolia Poultry Employees
Union vs. Sanchez, we held that the discretion to assume jurisdiction may be exercised by the Secretary of La-
bor and Employment without the necessity of prior notice or hearing given to any of the parties. The rationale
for his primary assumption of jurisdiction can justifiably rest on his own consideration of the exigency of the
situation in relation to the national interests.

Facts: Capitol Medical Center, Inc., petitioner, is a hospital with address at Panay Avenue corner Scout Mag-
banua Street, Quezon City. Upon the other hand, Capitol Medical Center Employees Association-Alliance of
Filipino Workers, respondent, is a duly registered labor union acting as the certified collective bargaining agent
of the rank-and-file employees of petitioner hospital.
On October 2, 1997, respondent union, through its president Jaime N. Ibabao, sent petitioner a letter requesting
a negotiation of their Collective Bargaining Agreement (CBA).
In its reply dated October 10, 1997, petitioner, challenging the union’s legitimacy, refused to bargain with re-
spondent. Subsequently or on October 15, 1997, petitioner filed with the Bureau of Labor Relations (BLR), De-
partment of Labor and Employment, a petition for cancellation of respondent’s certificate of registration, dock-
eted as NCR-OD-9710-006-IRD.3
For its part, on October 29, 1997, respondent filed with the National Conciliation and Mediation Board
(NCMB), National Capital Region, a notice of strike, docketed as NCMB-NCR-NS-10-453-97. Respondent
alleged that petitioner’s refusal to bargain constitutes unfair labor practice. Despite several conferences and ef-
forts of the designated conciliator-mediator, the parties failed to reach an amicable settlement.Thus, respondent
staged a strike.
On December 4, 1997, former Labor Secretary Leonardo A. Quisumbing, now Associate Justice of this Court,
issued an Order assuming jurisdiction over the labor dispute and ordering all striking workers to return to work
and the management to resume normal operations, thus:
Meantime, on October 1, 1998, the Regional Director, in NCR-OD-9710-006-IRD, issued an Order denying the
petition for cancellation of respondent union’s certificate of registration.5
On September 20, 2001, the Appellate Court rendered a Decision affirming the Orders of the Secretary of Labor.
The Court of Appeals held:
xxxxxx
In order to allow an employer to validly suspend the bargaining process, there must be a valid petition for certi-
fication election. The mere filing of a petition does not ipso facto justify the suspension of negotiation by the
employer (Colegio de San Juan de Letran vs. Association of Employees and Faculty of Letran and Eleanor Am-
bas, G.R. No. 141471, September 18, 2000). If pending a petition for certification, the collective bargaining is
allowed by the Supreme Court to proceed, with more reason should the collective bargaining (in this case) con-
tinue since the High Court had recognized the respondent as the certified bargaining agent in spite of several
petitions for cancellation filed against it.
xxxxxx
Issue: Whether the petition for the cancellation of respondent union’s certificate of registration involves a preju-
dicial question that should first be settled before the Secretary of Labor could order the parties to bargain collec-
tively.
Held: No.
As aptly stated by the Solicitor General in his comment on the petition, the Secretary of Labor correctly ruled
that the pendency of a petition for cancellation of union registration does not preclude collective bargaining,
thus:
"That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a peti-
tion to cancel the union’s registration certificate (National Union of Bank Employees vs. Minister of Labor, 110
SCRA 274), more so should the collective bargaining process continue despite its pendency. We must emphasize
that the majority status of the respondent Union is not affected by the pendency of the Petition for Cancellation
pending against it. Unless its certificate of registration and its status as the certified bargaining agent are re-
voked, the Hospital is, by express provision of the law, duty bound to collectively bargain with the Union. In-
deed, no less than the Supreme Court already ordered the Hospital to collectively bargain with the Union when
it affirmed the resolution of this Office dated November 18, 1994 directing the management of the Hospital to
negotiate a collective bargaining agreement with the Union. That was the categorical directive of the High Court
in its Resolution dated February 4, 1997 in Capitol Medical Center Alliance of Concerned Employees-United
Filipino Service Worker vs. Hon. Bienvenido E. Laguesma, et al., G.R. No. L-118915."
Moreover, as mentioned earlier, during the pendency of this case before the Court of Appeals, the Regional Di-
rector, in NCR-OD-9710-006-IRD, issued an Order on October 1, 1998 denying the petition for cancellation of
respondent’s certificate of registration. This Order became final and executory and recorded in the BLR’s Book
of Entries of Judgments on June 3, 1999.

——o0o——

CASE NO. 21

G.R. No. 91915. September 11, 1992.*

DIVINE WORD UNIVERSITY OF TACLOBAN, petitioner, vs. SECRETARY OF LABOR AND EM-
PLOYMENT and DIVINE WORD UNIVERSITY EMPLOYEES UNION-ALU, respondents.

Labor Laws; Bargaining Representatives; Certification election; Role of employer.—xxx [Petitioner’s undue
interest in the resolution of the DWU-IFEU’s motion for intervention becomes significant since a certification
election is the sole concern of employees except where the employer itself has to file a petition for certification
election. But once an employer has filed said petition, as the petitioner did in this case, its active role ceases and
it becomes a mere bystander. Any uncalled-for concern on the part of the employer may give rise to the suspi-
cion that it is batting for a company union.

Same; Same; Same; Same; Bargaining deadlock presupposes reasonable effort at good faith bargaining.—xxx
[A]n employer who is requested to bargain collectively may file a petition for certification election any time
except upon a clear showing that one of these two instances exists: (a) the petition is filed within one year from
the date of issuance of a final certification election result or (b) when a bargaining deadlock had been submitted
to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. While there is no
question that the petition for certification election was filed by the herein petitioner after almost four years from
the time of the certification election and, therefore, there is no question as to the timeliness of the petition, the
problem appears to lie in the fact that the Secretary of Labor had found that a bargaining deadlock exists. A
“deadlock” is defined as the “counteraction of things producing entire stoppage: a state of inaction or of neutral-
ization caused by the opposition of persons or of factions (as in government or a voting body): standstill.” There
is a deadlock when there is a “complete blocking or stoppage resulting from the action of equal and opposed
forces; as, the deadlock of a jury or legislature.” The word is synonymous with the word impasse which, within
the meaning of the American federal labor laws, “presupposes reasonable effort at good faith bargaining which,
despite noble intentions, does not conclude in agreement between the parties.” A thorough study of the records
reveals that there was no “reasonable effort at good faith bargaining” specially on the part of the University. Its
indifferent attitude towards collective bargaining inevitably resulted in the failure of the parties to arrive at an
agreement.

FACTS:

• Divine Word University Employees Union (DWUEU) is the sole and bargaining agent of the Divine
Word University. Sometime in 1985, DWUEU submitted its collective bargaining proposals. The
University replied and requested a preliminary conference which unfortunately did not take place due
to the alleged withdrawal of the CBA proposals.

• Because of this, the union filed a notice of strike on the grounds of bargaining deadlock and unfair
labor practice.

• Then, an agreement between the University and DWUEU-ALU were held after the filing of the notice
of strike.

• DWUEU-ALU, consonant with the agreement, submitted its collective bargaining proposals but were
ignored by the University.

ISSUE: WON the complaint for unfair labor practice filed by the Union is with merit.

HELD:

A thorough study of the records reveals that there was no "reasonable effort at good faith bargaining" specially
on the part of the University.

Its indifferent towards collective bargaining inevitably resulted in the failure of the parties to arrive at an agree-
ment. As it was evident that unilateral moves were being undertaken only by the DWUEU-ALU, there was no
counteraction of forces or an impasse to speak of.
While collective bargaining should be initiated by the union, there is a corresponding responsibility
on the part of the employer to respond in some manner to such acts.

This is a clear from the provisions of the Labor Code Art250(a) of which states:
a) when a party desires to negotiate an agreement, it shall serve a written notice upon the other
party with a statement of its proposals. The other party shall make a reply thereto not later than
10 calendar days from receipt of such notice.

Hence, petitioner's contention that the DWUEU-ALU's proposals may not be unilaterally imposed on it on the
ground that a collective bargaining agreement is a contract wherein the consent of both parties is indis-
pensable is devoid of merit.

A similar argument had already been disregarded in the case of Kiok Loy v. NLRC, where we upheld the
order of the NLRC declaring the unions draft CBA proposal as the collective agreement which should govern
the relationship between the parties. Kiok Loy vs. NLRC is applicable in the instant case, considering that the
fact therein have also been indubitably established in this case. These factors are: (a) the union is the duly certified bar-
gaining agent; (b) it made a definite request to bargain submitted its collective bargaining proposals, and (c) the Univer-
sity made no further proposal whatsoever. As we said in Kiok Loy v. NLRC, a company's refusal to make
counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is es-
pecially true where the Union's request for a counter proposal is left unanswered.

"Moreover, the Court added in the same case that "it is not obligatory upon either side of a labor controversy to precipitately ac-
cept or agree to the proposal of the other. But an erring party should not be tolerated and allowed with impunity to resort to
schemes feigning negotiations by going through empty gestures.

——o0o——
END