76. Nestle Philippines vs NLRC, G.R. No.
91231, February 04, 1991 shall be paid by the Company to ALU to be delivered by the latter to the employees." The
DOCTRINE: The fact that the retirement plan is non-contributory, i.e., that the
employees contribute nothing to the operation of the plan, does not make it a non-issue in
the CBA negotiations.
FACTS:
Nestle and the Union of Filipro Employees (UFE) conducted collective bargaining
negotiations. UFE made a proposal to modify the existing retirement plan by including a
provision for early retirement. Nestle countered that said plan should just be maintained
since it is still adequate for the needs its employees and competitive with those existing in
the industry. UFE thereafter modified its proposal, but Nestle was adamant.
Consequently, the impasse on the retirement plan became one of the issues certified to
the NLRC for compulsory arbitration.
Nestle argued that since its retirement plan is non-contributory, it (Nestle) has
the sole and exclusive prerogative to define the terms of the plan. At most the company
can only be directed to maintain the same but not to change its terms. It should be left to
the discretion of the company on how to improve or modify the same
ISSUE:
Whether the non-contributory retirement plan may be the subject of CBA
negotiations? YES
HELD:
The fact that the retirement plan is non-contributory, i.e., that the employees
contribute nothing to the operation of the plan, does not make it a non-issue in the CBA
negotiations. As a matter of fact, almost all of the benefits that the petitioner has granted
to its employees under the CBA - salary increases, rice allowances, midyear bonuses, 13th
and 14th month pay, seniority pay, medical and hospitalization plans, health and dental
services, vacation, sick other leaves with pay - are non-contributory benefits. Since the
retirement plan has been an integral part of the CBA since 1972, the Union's demand to
increase the benefits due the employees under said plan, is a valid CBA issue.
Moreover, the inclusion of the retirement plan in the CBA as part of the package
of economic benefits extended by the company to its employees to provide them a
measure of financial security after they shall have ceased to be employed in the company,
reward their loyalty, boost their morale and efficiency and promote industrial peace, gives
"a consensual character" to the plan so that it may not be terminated or modified at will by
either party.
77. Mactan Workers Union vs Aboitiz, GR No. L-30241, Jun 30, 1972
DOCTRINE: It is a well-settled doctrine that the benefits of a CBA extend to the
employees in the collective bargaining unit, including those who do not belong to the
chosen bargaining labor organization.
FACTS:
There are two rival labor unions namely, Mactan Workers Union (MWU) and
Associated Labor Union (ALU). The company and the Associated Labor Union entered into
a CBA, the pertinent part of which states “The Company agrees to give a profit-sharing
bonus to its employees to be taken from 10% of its net profits. Said profit-sharing bonus
members of MWU failed to receive their shares of bonus because the company was
advised by ALU not to deliver the said amount to the members of MWU unless ordered by
the Court.
ISSUES:
Whether the member of MWU are entitled to their share in the profit-sharing
bonus? YES
HELD:
It is a well-settled doctrine that the benefits of a CBA extend to the laborers and
employees in the collective bargaining unit, including those who do not belong to the
chosen bargaining labor organization. The labor union that gets the majority vote as the
exclusive bargaining representative does not act for its members alone. It represents all
the employees in such a bargaining unit. It is not to be indulged in any attempt on its part
to disregard the rights of non-members. Yet that is what ALU was guilty of, resulting in
the complaint filed on behalf of the employees, who were in the ranks of MWU.
78. Juat vs CIR, G.R. No. L-20764, November 29, 1965
DOCTRINE: It should be declared, therefore, as a settled doctrine, that the closed-shop
provision of a CBA applies to old employees who are non-members of any labor union at
the time the CBA was entered into.
FACTS:
On December 27, 1960, a CBA was entered into between the Bulaklak
Publications and the Busocope Labor Union. The CBA contains a closed shop provision,
which states “All employees who on January 1, 1960 are members of the Union and those
who become members after that date shall, as a condition of employment, maintain their
membership in the Union for the duration of this Agreement. All employees who on
January 1, 1961 are not yet members of the Union shall, as a condition of maintaining
their employment, become members of such union.”
Juat was employed with the Bulaklak Publications since 1953. However, he was
not a member of any labor union when the CBA was entered into, and in fact he had never
been a member of any labor union.
ISSUES:
Whether a closed-shop provision applies to old employees (those employed
before the CBA was executed)? YES
HELD:
A distinction has to be made. A closed-shop agreement applies only to persons to
be hired or to employees who are not yet members of any labor organization. It is
inapplicable to those already in the service who are members of another union. To hold
otherwise, i.e., the employees in a company who are members of a minority union may be
compelled to disaffiliate from their union and join the majority or contracting union, would
render nugatory the right of all employees to self-organization and to form, join or assist
labor organization of their own choosing
It should be declared, therefore, as a settled doctrine, that the closed-shop
proviso of a CBA entered into between an employer and a duly authorized labor union
applies, and should be applied, to old employees who are non-members of any labor union
at the time the CBA was entered into. In other words, the old employees can be obliged
by his employer to join the labor union which had entered into a CBA that provides for a
closed-shop as a condition for his continuance in his employment, otherwise his refusal to
join the contracting labor union would constitute a justifiable basis for his dismissal.
It being established Juat, although an old employee of the Bulaklak Publications,
was not a member of any labor union at the time when the CBA in question was entered
into he could be obliged by Bulaklak Publications to become a member of the Busocope
Labor Union. And because he refused to join the Busocope Labor Union, Bulaklak
Publications was justified in dismissing him from the service on the ground that he had
refused to join said union.
79. Ferrer vs NLRC
GR# 100898 July 5, 1993
Doctrine: A CBA is the law between the company and the union and compliance
therewith is mandated by the express policy to give protection to labor. Said policy should
be given paramount consideration unless otherwise provided for by law. A CBA provision
for a closed shop is a valid form of union security and it is not a restriction on the right or
freedom of association guaranteed by the Constitution. However, in the implementation of
the provisions of the CBA, both parties thereto should see to it that no right is violated or
impaired. In the case at bar, while it is true that the CBA between OFC and the SAMAHAN
provided for the dismissal of employees who have not maintained their membership in the
union, the manner in which the dismissal was enforced left much to be desired in terms of
respect for the right of petitioners to procedural due process.
Facts: Petitioners were regular and permanent employees of the Occidental Foundry
Corporation (OFC) in Malanday, Valenzuela, Metro Manila which was under the
management of Hui Kam Chang. As piece workers, petitioners' earnings ranged from P110
to P140 a day. They had been in the employ of OFC for about ten years at the time of
their dismissal in 1989. The Samahang Manggagawa ng Occidental Foundry Corporation-
FFW (SAMAHAN) and the OFC entered into a collective bargaining agreement (CBA) which
would be effective for the three-year period between October 1, 1988 and September 30,
1991. Petitioner Alex Ferrer and the SAMAHAN, filed in the Department of Labor and
Employment (DOLE), a complaint for the expulsion from SAMAHAN of the following
officers: Genaro Capitle (president), Jesus Tumagan (vice-president), Godofredo Pacheco
(auditor), and Marcelino Pacheco (board member) (Case No. NCR-00-M-89-11-01). The
complaint was founded on said officers' alleged inattentiveness to the economic demands
of the workers. However, petitioners Diaz and Alex Ferrer withdrew the petition.
Petitioners conducted a special election of officers of the SAMAHAN. Said election was,
however, later questioned by the FFW. Nonetheless, the elected set of officers tried to
dissuade the OFC from remitting union dues to the officers led by Capitle who were allied
with the FFW. Later, however, Romulo Erlano, one of the officers elected at the special
election, manifested to the DOLE that he was no longer objecting to the remittance of
union dues to the officers led by Capitle. Petitioners' move to stage a strike based on
economic demands was also later disowned by members of the SAMAHAN.
The intraunion squabble came to a head when, on September 11, 1989, a resolution
expelling petitioners from the SAMAHAN was issued by the aforesaid union officials headed
by Capitle, together with board members George Ignas, Pio Domingo, and Jaime Baynado
Although petitioners received this letter weeks after its date, it appears that on that same
date, they had learned about their dismissal from employment as shown by the letter also
dated September 13, 1989 which they sent the Federation of Democratic Labor Unions
(FEDLU). Thereafter, on various dates, petitioners sent individual letters to Hui Kam Chang
professing innocence of the charges levelled against them by the SAMAHAN and the FFW
and pleading that they be reinstated.
Both the Labor Arbiter and NLRC dismissed the complaint citing management prerogative
and is not considered unfair labor practice.
Issue: Whether or not the CBA was complied with?
Ruling: No, the CBA was not complied with.
No hearing ("pandinig") was ever conducted by the SAMAHAN to look into petitioners'
explanation of their moves to oust the union leadership under Capitle, or their subsequent
affiliation with FEDLU. While it is true that petitioners' actions might have precipitated
divisiveness and, later, showed disloyalty to the union, still, the SAMAHAN should have
observed its own constitution and by-laws by giving petitioners an opportunity to air their
side and explain their moves. If, after an investigation the petitioners were found to have
violated union rules, then and only then should they be subjected to proper disciplinary
measures.
What aggravated the situation in this case is the fact that OFC itself took for granted that
the SAMAHAN had actually conducted an inquiry and considered the CBA provision for the
closed shop as self-operating that, upon receipt of a notice that some members of the
SAMAHAN had failed to maintain their membership in good standing in accordance with
the CBA, it summarily dismissed petitioners.
The need for a company investigation is founded on the consistent ruling of this Court that
the twin requirements of notice and hearing which are essential elements of due process
must be met in employment-termination cases. The employee concerned must be notified
of the employer's intent to dismiss him and of the reason or reasons for the proposed
dismissal. The hearing affords the employee an opportunity to answer the charge or
charges against him and to defend himself therefrom before dismissal is effected.
80. MSMG-UWP vs Ramos
GR# 113907 February 28, 2000
Doctrine: Although this Court has ruled that union security clauses embodied in the
collective bargaining agreement may be validly enforced and that dismissals pursuant
thereto may likewise be valid, this does not erode the fundamental requirement of due
process. The reason behind the enforcement of union security clauses which is the sanctity
and inviolability of contracts14 cannot override one's right to due process.
Facts: The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B)
(MSMG), hereinafter referred to as the "local union", is an affiliate of the private
respondent, United Lumber and General Workers of the Philippines (ULGWP), referred to
as the "federation". They entered into a CBA with a closed shop provision. On September
30, 1988, the officials of ULGWP called a Special National Executive Board Meeting at
Nasipit, Agusan del Norte where a Resolution was passed placing the MSMG under
trusteeship and appointing respondent Cesar Clarete as administrator.
 On October 27, 1988, the said administrator wrote the respondent company
informing the latter of its designation of a certain Alfredo Kalingking as local union
president and "disauthorizing" the incumbent union officers from representing the
employees. This action by the national federation was protested by the petitioners in a
letter to respondent company dated November 11, 1988.
The federation advised respondent company of the expulsion of the 30 union
officers and demanded their separation from employment pursuant to the Union Security
Clause in their collective bargaining agreement. This demand was reiterated twice, through
letters dated February 21 and March 4, 1989, respectively, to respondent company.
Thereafter, the Federation filed a Notice of Strike with the National Conciliation and
Mediation Board to compel the company to effect the immediate termination of the
expelled union officers. On March 7, 1989, under the pressure of a threatened strike,
respondent company terminated the 30 union officers from employment without
conducting any investigation. Hence, they were terminated from work using the Union
security clause. The thirty (30) dismissed union officers filed an urgent petition, docketed
as Case No. NCMB-NCR-NS-03-216-89, with the Offfice of the Secretary of the Department
of Labor and Employment praying for the suspension of the effects of their termination
from employment. However, the petition was dismissed by then Secretary Franklin Drilon
citing an intra-union matter. On March 13 and 14, 1989, a total of 78 union shop stewards
were placed under preventive suspension by respondent company. This prompted the
union members to again stage a walk-out and resulted in the official declaration of strike
at around 3:30 in the afternoon of March 14, 1989. The strike was attended with violence,
force and intimidation on both sides resulting to physical injuries to several employees,
both striking and non-striking, and damage to company properties.
Issue: Whether or not the dismissal using the Union Security clause is valid?
Ruling: No, the dismissal is not valid.
This Court pronounced that while the company, under a maintenance of
membership provision of the collective bargaining agreement, is bound to dismiss any
employee expelled by the union for disloyalty upon its written request, this undertaking
should not be done hastily and summarily. The company acts in bad faith in dismissing a
worker without giving him the benefit of a hearing.
In the case under scrutiny, petitioner union officers were expelled by the
federation for allegedly committing acts of disloyalty and/or inimical to the interest of
ULGWP and in violation of its Constitution and By-laws. Upon demand of the federation,
the company terminated the petitioners without conducting a separate and independent
investigation. Respondent company did not inquire into the cause of the expulsion and
whether or not the federation had sufficient grounds to effect the same. Relying merely
upon the federation's allegations, respondent company terminated petitioners from
employment when a separate inquiry could have revealed if the federation had acted
arbitrarily and capriciously in expelling the union officers. Respondent company's allegation
that petitioners were accorded due process is belied by the termination letters received by
the petitioners which state that the dismissal shall be immediately effective.
As held in the aforecited case of Cariño, "the right of an employee to be
informed of the charges against him and to reasonable opportunity to present his side in a
controversy with either the company or his own union is not wiped away by a union
security clause or a union shop clause in a collective bargaining agreement. An employee
is entitled to be protected not only from a company which disregards his rights but also
from his own union the leadership of which could yield to the temptation of swift and
arbitrary expulsion from membership and mere dismissal from his job.
While respondent company may validly dismiss the employees expelled by the
union for disloyalty under the union security clause of the collective bargaining agreement
upon the recommendation by the union, this dismissal should not be done hastily and
summarily thereby eroding the employees' right to due process, self-organization and
security of tenure. The enforcement of union security clauses is authorized by law
provided such enforcement is not characterized by arbitrariness, and always with due
process. Even on the assumption that the federation had valid grounds to expel the union
officers, due process requires that these union officers be accorded a separate hearing by
respondent company.
81. MBTC Employees Union vs NLRC
GR#102636 September 10, 1993
Doctrine: Whether the benefits under a collective bargaining agreement should be
equated with those granted by law or not, unless there are compelling reasons otherwise,
must prevail and be given effect. In keeping then with the intendment of the law and the
agreement of the parties themselves, along with the often repeated rule that all doubts in
the interpretation and implementation of labor laws should be resolved in favor of labor.
Facts: On 25 May 1989, the bank entered into a collective bargaining agreement with the
MBTCEU, granting a monthly P900 wage increase effective 01 January 1989, P600 wage
increase 01 January 1990, and P200 wage increase effective 01 January 1991. The
MBTCEU had also bargained for the inclusion of probationary employees in the list of
employees who would benefit from the first P900 increase but the bank had adamantly
refused to accede thereto. Consequently, only regular employees as of 01 January 1989
were given the increase to the exclusion of probationary employees. Barely a month later,
Republic Act 6727, "an act to rationalize wage policy determination be establishing the
mechanism and proper standards thereof, fixing new wage rates, providing wage
incentives for industrial dispersal to the countryside, and for other purposes," took effect.
Pursuant to the above provisions, the bank gave the P25 increase per day, or
P750 a month, to its probationary employees and to those who had been promoted to
regular or permanent status before 01 July 1989 but whose daily rate was P100 and
below. The bank refused to give the same increase to its regular employees who were
receiving more than P100 per day and recipients of the P900 CBA increase. Contending
that the bank's implementation of Republic Act 6727 resulted in the categorization of the
employees into (a) the probationary employees as of 30 June 1989 and regular employees
receiving P100 or less a day who had been promoted to permanent or regular status
before 01 July 1989, and (b) the regular employees as of 01 July 1989, whose pay was
over P100 a day, and that, between the two groups, there emerged a substantially
reduced salary gap, the MBTCEU sought from the bank the correction of the alleged
distortion in pay. In order to avert an impeding strike, the bank petitioned the Secretary of
Labor to assume jurisdiction over the case or to certify the same to the National Labor
Relations Commission (NLRC) under Article 263 (g) of the Labor Code. The parties
ultimately agreed to refer the issue for compulsory arbitration to the NLRC.
The LA ruled that the CBA should govern the wage increase, while the NLRC
reversed the ruling of the LA. Hence the Petition.
Issue: Whether or not there is wage distortion?
Ruling: Yes, there is wage distortion.
 The definition of "wage distortion," aforequoted, shows that such distortion can
so exist when, as a result of an increase in the prescribed wage rate, an "elimination or
severe contraction of intentional quantitative differences in wage or salary rates" would
occur "between and among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation." In mandating an adjustment, the law did
not require that there be an elimination or total abrogation of quantitative wage or salary
differences; a severe contraction thereof is enough. As has been aptly observed by
Presiding Commissioner Edna Bonto-Perez in her dissenting opinion, the contraction
between personnel groupings comes close to eighty-three (83%), which cannot, by any
stretch of imagination, be considered less than severe.
The "intentional quantitative differences" in wage among employees of the bank
has been set by the CBA to about P900 per month as of 01 January 1989. It is intentional
as it has been arrived at through the collective bargaining process to which the parties are
thereby concluded. The Solicitor General, in recommending the grant of due course to the
petition, has correctly emphasized that the intention of the parties, whether the benefits
under a collective bargaining agreement should be equated with those granted by law or
not, unless there are compelling reasons otherwise, must prevail and be given effect.
82. RAZON, INC. (formerly known as Metro Services, Inc.) vs.THE HONORABLE
SECRETARY OF LABOR AND EMPLOYMENT (DOLE) and MARINA PORT
SERVICES, INC. (MARINA)
DOCTRINE: By absorbing ERI/MPSI employees and honoring the terms and conditions in
the collective bargaining agreement between ERI/MPSI and the employees, MARINA did
not assume the responsibility of ERI/MPSI to pay separation pay to its employees. As
correctly put by public respondent, Paragraph 7, insofar as it refers to employees' benefits,
should be applied prospectively with respect to MARINA. This conclusion is supported by
Paragraph 14 of Permit No. 104286 granted to MARINA which states:
14. Grantee shall be responsible for all obligations, liabilities or claims arising out
of any transactions or undertakings in connection with their cargo handling operations as
of the actual date of transfer thereof to grantee."
FACTS: Petitioner E. Razon, Inc. (ERI) is a corporation organized in 1962 principally to bid
for the right tooperate arrastre services in Manila. They acquired rights to operate Manila’s
south harbor starting 1974. (The company was later renamed MPSI)
On July 19, 1986 or two years before the expiration of the eight-year term, the
PPA cancelled the management contract for alleged violations thereof. PPA took over the
cargo-handling operations as well as all the equipment of MPSI
Two days later or on July 21, 1986, the PPA issued Permit No. 104286 for cargo-
handling services to Marina Port Services, Inc. (MARINA). The latter began the arrastre
services and required all workers of ERI/MPSI to accomplish individual information sheets.
Weeks later, the bulk of the 2,700 employees concerned discovered that they had been
hired by MARINA as new employees effective July 21, 1986. Hence, they clamored for the
payment of their separation pay but both the MARINA and ERI/MPSI refused to be liable
therefor.
Secretary took jurisdiction. He held that it was MPSI’s liability to pay the
separation pay, even if MARINA assumed the liabilities of MPSI. This was because such
liability was personal (in personam), hence not enforceable against a successor-emloyer.
ISSUE: WON MARINA assumed liability for paying the employees’ separation pay
HELD: NO. By absorbing ERI/MPSI employees and honoring the terms and conditions in
the collective bargaining agreement between ERI/MPSI and the employees, MARINA did
not assume the responsibility of ERI/MPSI to pay separation pay to its employees. The fact
that a couple of days later, the PPA, without public bidding, issued to MARINA, permit to
operate, does not imply that MARINA stepped into the shoes of ERI/MPSI as if there were
absolute identity between them.
There is no privity of contract between ERI/MPSI and MARINA so as to make the
latter a common or even substitute employer that it should be burdened with the
obligations of the former.
Admittedly, the consequent separation from the employment of its employees
was not of the ERI/MPSI’s own making. However, it may not validly lay such consequence
on the lap of MARINA which, like itself, had no hand in the termination of the management
contract by the PPA.
83. BENGUET CONSOLIDATED, INC. vs. BCI EMPLOYEES & WORKERS UNION-
PAFLU, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, CIPRIANO CID
and JUANITO GARCIA
DOCTRINE: "substitutionary" doctrine only provides that the employees cannot revoke
the validly executed collective bargaining contract with their employer by the simple
expedient of changing their bargaining agent. And it is in the light of this that the phrase
"said new agent would have to respect said contract" must be understood. It only means
that the employees, thru their new bargaining agent, cannot renege on their collective
bargaining contract, except of course to negotiate with management for the shortening
thereof. The doctrine cannot be invoked to support the contention that a newly certified
collective bargaining agent automatically assumes all the personal undertakings in the
collective bargaining agreement made by the deposed union.
Facts: The Benguet-Balatoc Workers Union (BBWU) entered into a Collective Bargaining
Contract with Benguet Consolidated, Inc (BENGUET). It became effective for a period of 4-
½ years, and itembodied a No-Strike, No-Lockout clause. 3 years later, a certification
election was conducted among all the rank and file employees of BENGUET. BCI
Employees & Workers Union (UNION) defeated BBWU. CIR certified UNION as the sole
and exclusive collective bargaining agent of all BENGUET employees. A Notice of Strike
was filed, and the UNION members who were BENGUET employees went on strike. Picket
lines were formed, and the picketers, resorted to threats and intimidation, and use of force
and violence. Some of the properties of BENGUET were also damaged. Eventually, the
parties agreed to end the dispute. BENGUET and UNION executed an agreement. PAFLU
placed its conformity thereto and said agreement was attested to by the Director of the
BLR. A collective bargaining contract was executed between UNION-PAFLU and BENGUET.
As a result of the strike staged by UNION and its members, BENGUET had to incur
expenses for the repair of the damaged properties. BENGUET sued UNION, PAFLU and
their Presidents before the CFI on the sole premise that said defendants breached their
undertaking in the existing contract not to strike. The unions and their presidents put up
the following defenses: (1) they were not bound by the contract which BBWU, the
defeated union, had executed with BENGUET; (2) the strike was due to unfair labor
practices of BENGUET; and (3) the strike was lawful and in the exercise of the legitimate
rights of UNION-PAFLU. CFI dismissed the complaint on the ground that the contract did
not bind defendants.
Issue: Whether or not the contract executed between BENGUET and BBWU automatically
bind UNION-PAFLU upon its certification as sole bargaining representative of all BENGUET
employees.
Ruling: BENGUET invoked the "Doctrine of Substitution" referred to in General Maritime
Stevedores' Union v. South Sea Shipping Lines where it stated that, if bargaining agent
other than the union or organization that executed the contract, is elected, said the agent
should respect the said contract. The statement was obiter dictum. BENGUET's reliance
upon the Principle of Substitution is totally misplaced. The "substitutionary" doctrine
only provides that the employees cannot revoke the validly executed collective bargaining
contract with their employer by the simple expedient of changing their bargaining agent.
And it is in the light of this that the phrase "said new agent would have to respect said
contract" must be understood. It only means that the employees, thru their new
bargaining agent, cannot renege on their collective bargaining contract, except of course
to negotiate with management for the shortening thereof. The doctrine cannot be invoked
to support the contention that a newly certified collective bargaining agent automatically
assumes all the personal undertakings in the collective bargaining agreement made by the
deposed union.
When BBWU bound itself and its officers not to strike, it could not have validly
bound also all the other rival unions existing in the bargaining units in question. BBWU
was the agent of the employees, not of the other unions which possess distinct
personalities. The UNION could always voluntarily assume all the personal undertakings
made by the displaced agent. But as the lower court found, there was no showing at all
that, prior to the strike, UNION formally adopted the existing contract as its own and
assumed all the liability ties imposed by the same upon BBWU. Everything binding on a
duly authorized agent is binding on the principal; not vice-versa, unless there is a mutual
agency, or unless the agent expressly binds himself to the party with whom he contracts.
In the case at bar, it was BBWU who expressly bound itself to BENGUET. UNION, the new
agent, did not assume this undertaking of BBWU. Since defendants were not contractually
bound by the no-strike clause, for the simple reason that they were not parties thereto,
they could not be liable for breach of contract to plaintiff. The judgment of the lower court
appealed from is hereby affirmed.
84. SANYO PHILIPPINES WORKERS UNION-PSSLU LOCAL CHAPTER NO. 109 v.
POTENCIANO S. CANIZARES, GR No. 101619, 1992-07-08
DOCTRINE: Article 260 of the Labor Code on grievance machinery and voluntary
arbitrator states that "(t)he parties to a Collective Bargaining Agreement shall include
therein provisions that will ensure the mutual observance of its terms and conditions. They
shall establish a machinery for the adjustment and resolution of grievances arising from
the interpretation or implementation of their Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel policies".
Facts: Sanyo Philippines Workers Union-PSSLU Local Chapter PSSLU had an existing
CBA with Sanyo Philippines Inc. (Sanyo, for short) effective July 1, 1989 to June 30, 1994.
The same CBA contained a union security clause
All members of the union covered by this agreement must retain their
membership in good standing in the union as condition of his/her continued employment
with the company.
Management of Sanyo that the following employees were notified that their
membership with PSSLU were cancelled for anti-union, activities, economic sabotage,
threats, coercion and intimidation, disloyalty and for joining another union
On March 4, 1991, PSSLU through its national and local presidents, wrote
another letter to Sanyo recommending the dismissal of the following non-union workers.
They were engaged and were still engaging in anti-union activities; 2) they willfully
violated the pledge of cooperation with PSSLU which they signed and executed on
February 14, 1990; and 3) they threatened and were still threatening with bodily... harm
and even death the officers of the union. Also recommended for dismissal were the
following union members who allegedly joined, supported and sympathized with a minority
union... the dismissed employees filed a complaint (pp. 32-35, Rollo) with the NLRC for
illegal dismissal.
PSSLU filed a motion to dismiss the complaint alleging that the Labor Arbiter was
without jurisdiction over the case... the NLRC Labor Arbiter had jurisdiction over the case
which was a termination dispute pursuant... to Article 217 (2) of the Labor Code
Issues: the NLRC Labor Arbiter had jurisdiction over the case which was a termination
dispute pursuant... to Article 217 (2) of the Labor Code;
Labor Arbiter and not the Grievance Machinery provided for in the CBA has the jurisdiction
to hear and decide the complaints of the private respondents.
Ruling:
Article 217 of the Labor Code defines the jurisdiction of the Labor Arbiter.
Under paragraph (c) of the same article, it is expressly provided that "cases arising from
the interpretation or implementation of collective bargaining agreements and those arising
from the interpretation and... enforcement of company personnel policies shall be disposed
of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
The reference to a Grievance Machinery and Voluntary Arbitrators for the adjustment or
resolution of grievances arising from the interpretation or implementation of their CBA and
those arising from the interpretation or enforcement of company personnel policies is...
mandatory
The failure of the parties to the CBA to establish the grievance machinery and its
unavailability is not an excuse for the Labor Arbiter to assume jurisdiction over disputes
arising from the implementation and enforcement of a provision in the CBA.
We hold that the Labor Arbiter and not the Grievance Machinery provided for in the CBA
has the jurisdiction to hear and decide the complaints of the private respondents.
In the instant case, however, We hold that the Labor Arbiter and not the Grievance
Machinery provided for in the CBA has the jurisdiction to hear and decide the complaints of
the private respondents.
That the parties to a CBA... are the union and the company. Hence, only disputes involving
the union and the company shall be referred to the grievance machinery or voluntary
arbitrators.
In the instant case, both the union and the company are united or have come to an
agreement regarding the dismissal of private respondents. No grievance between them
exists which could be brought to grievance machinery.
The problem or dispute in the present case is between... the union and the company on
the one hand and some union and non-union members who were dismissed, on the other
hand. The dispute has to be settled before an impartial body.
The grievance machinery with members designated by the union and the company cannot
be expected to be... impartial against the dismissed employees
Since there has already been an actual termination, the matter falls within the jurisdiction
of the Labor Arbiter.
85. VIVIERO vs CA
G.R. No. 138938 October 24, 2000
Doctrine: Absent an express stipulation in the CBA, the phrase “all disputes” should be
construed as limited to the areas of conflict traditionally within the jurisdiction of Voluntary
Arbitrators, i.e., disputes relating to contract-interpretation, contract-implementation, or
interpretation or enforcement of company personnel policies— illegal termination disputes
in the absence of an express CBA provision, do not fall within any of these categories, and
are within the exclusive original jurisdiction of Labor Arbiters by express provision of law.
When the parties have validly agreed on a procedure for resolving grievances and to
submit a dispute to voluntary arbitration then that procedure should be strictly observed.
Where under the CBA, both Union and the employer are responsible for selecting an
impartial arbitrator or for convening an arbitration committee, yet neither made a move
towards this end, the employee should not be
deprived of his legitimate recourse because of the refusal of both Union and the employer
to follow the grievance procedure
FACTS: Petitioner Vivero, a licensed seaman, is a member of the Associated Marine
Officers and Seamen's Union of the Philippines (AMOSUP). On grounds of very poor
performance and conduct, refusal to perform his job, refusal to report to the Captain or
the vessel’s Engineers or cooperate with other ship officers about the problem in cleaning
the cargo holds or of the shipping pump and his dismal relations with the Captain of the
vessel, complainant was repatriated on 15 July 1994.
Complainant filed a complaint for illegal dismissal at Associated Marine Officers’ and
Seaman’s Union of the Philippines (AMOSUP) of which complainant was a member.
Pursuant to Article XII of the Collective Bargaining Agreement, grievance proceedings were
conducted; however, parties failed to reach and settle the dispute amicably, thus, on 28
November 1994, complainant filed [a] complaint with the Philippine Overseas Employment
Administration (POEA).
While the case was pending before the POEA, private respondents filed a Motion to
Dismiss on the ground that the POEA had no jurisdiction over the case considering
petitioner Vivero's failure to refer it to a Voluntary Arbitration Committee in accordance
with the CBA between the parties. Labor Arbiter on the basis of the pleadings and
documents available on record, rendered a decision dismissing the Complaint for want of
jurisdiction. The NLRC set aside the decision of the Labor Arbiter on the ground that the
record was clear that petitioner had exhausted his remedy by submitting his case to the
Grievance Committee of AMOSUP. Considering however that he could not obtain any
settlement he had to ventilate his case before the proper forum, i.e., the Philippine
Overseas Employment Administration. The Court of Appeals ruled in favor of private
respondents. It held that the CBA "is the law between the parties and compliance
therewith is mandated by the express policy of the law.
ISSUE: whether the NLRC is deprived of jurisdiction over illegal dismissal cases whenever
a CBA provides for grievance machinery and voluntary arbitration proceedings?
RULINGS: No.
The instant case is a termination dispute falling under the original and exclusive
jurisdiction of the Labor Arbiter, and does not specifically involve the application,
implementation or enforcement of company personnel policies contemplated in Policy
Instruction No. 56. Consequently, Policy Instruction No. 56 does not apply in the case at
bar.
In this case, however, while the parties did agree to make termination disputes
the proper subject of voluntary arbitration, such submission remains discretionary upon
the parties
The use of the word "may" shows the intention of the parties to reserve the right
to submit the illegal termination dispute to the jurisdiction of the Labor Arbiter, rather than
to a Voluntary Arbitrator. Petitioner validly exercised his option to submit his case to a
Labor Arbiter when he filed his Complaint before the proper government agency.
In the case at bar, the dispute was never brought to a Voluntary Arbitrator for
resolution; in fact, petitioner precisely requested the Court to recognize the jurisdiction of
the Labor Arbiter over the case. The Court had held in San Miguel Corp. v. NLRC28 that
neither officials nor tribunals can assume jurisdiction in the absence of an express legal
conferment. In the same manner, petitioner cannot arrogate into the powers of Voluntary
Arbitrators the original and exclusive jurisdiction of Labor Arbiters over unfair labor
practices, termination disputes, and claims for damages, in the absence of an express
agreement between the parties in order for Art. 262 of the Labor Code to apply in the case
at bar. In other words, the Court of Appeals is correct in holding that Voluntary Arbitration
is mandatory in character if there is a specific agreement between the parties to that
effect. It must be stressed however that, in the case at bar, the use of the word "may"
shows the intention of the parties to reserve the right of recourse to Labor Arbiters.
The CBA clarifies the proper procedure to be followed in situations where the
parties expressly stipulate to submit termination disputes to the jurisdiction of a Voluntary
Arbitrator or Panel of Voluntary Arbitrators. For when the parties have validly agreed on a
procedure for resolving grievances and to submit a dispute to voluntary arbitration then
that procedure should be strictly observed. Non-compliance therewith cannot be excused,
as petitioner suggests, by the fact that he is not well-versed with the "fine prints" of the
CBA. It was his responsibility to find out, through his Union, what the provisions of the
CBA were and how they could affect his rights.
At this late stage of the proceedings, it would not serve the ends of justice if this
case is referred back to a Voluntary Arbitrator considering that both the AMOSUP and
private respondents have submitted to the jurisdiction of the Labor Arbiter by filing their
respective Position Papers and ignoring the grievance procedure set forth in their CBA.

86. LUDO & LUYM CORPORATION vs FERDINAND SAORNIDO as voluntary
arbitrator and LUDO EMPLOYEES UNION (LEU)
G.R. No. 140960 January 20, 2003
DOCTRINE: While the arbitrator is expected to decide only those questions expressly
delineated by the submission agreement, he can assume that he has the necessary power
to make a final settlement since arbitration is the final resort for the adjudication of
disputes.
Even if the submission agreement mentioned only the determination of the date
of regularization, law and jurisprudence give the voluntary arbitrator enough leeway of
authority as well as adequate prerogative to accomplish the reason for which the law on
voluntary arbitration was created- speedy labor justice- and to settle, once and for all, the
ultimate question of whether the employees are entitled to higher benefits.
FACTS: In the course of its business operations, LUDO engaged the arrastre services of
Cresencio Lu Arrastre Services (CLAS) for the loading and unloading of its finished
products at the wharf. The arrastre workers were subsequently hired, on different dates,
as regular rank-and-file employees of LUDO every time the latter needed additional
manpower services. Said employees thereafter joined respondent union, the LUDO
Employees Union (LEU), which acted as the exclusive bargaining agent of the rank-and-file
employees. Said employees thereafter joined respondent union, the LUDO Employees
Union (LEU), which acted as the exclusive bargaining agent of the rank-and-file
employees.
On April 13, 1992, respondent union entered into a collective bargaining
agreement with LUDO which provides certain benefits to the employees, the amount of
which vary according to the length of service rendered by the availing employee.
Thereafter, the union requested LUDO to include in its members’ period of service the time
during which they rendered arrastre services to LUDO through the CLAS so that they could
get higher benefits. LUDO failed to act on the request. Thus, the matter was submitted
for voluntary arbitration.
The Voluntary Arbitrator finds the claims of the complainants meritorious. The CA
likewise affirmed in toto the decision of the Voluntary Arbitrator.
Petitioner contends that the money claim in this case is barred by prescription.
Respondents, for their part, aver that the three-year prescriptive period is reckoned only
from the time the obligor declares his refusal to comply with his obligation in clear and
unequivocal terms. In this case, respondents maintain that LUDO merely promised to
review the company records in response to respondents’ demand for adjustment in the
date of their regularization without making a categorical statement of refusal.
ISSUE: 1. whether or not a Voluntary Arbitrator can award benefits not claimed in the
submission agreement? Yes
2. whether or not money claim in this case is barred by prescription? No
RULINGS: 1. While a voluntary arbitrator is not part of the governmental unit or labor
department’s personnel, said arbitrator renders arbitration services provided for under
labor laws.
Generally, the arbitrator is expected to decide only those questions expressly
delineated by the submission agreement. Nevertheless, the arbitrator can assume that he
has the necessary power to make a final settlement since arbitration is the final resort for
the adjudication of disputes. The succinct reasoning enunciated by the CA in support of its
holding, that the Voluntary Arbitrator in a labor controversy has jurisdiction to render the
questioned arbitral awards, deserves our concurrence, thus in general, the arbitrator is
expected to decide those questions expressly stated and limited in the submission
agreement. However, since arbitration is the final resort for the adjudication of disputes,
the arbitrator can assume that he has the power to make a final settlement. Thus,
assuming that the submission empowers the arbitrator to decide whether an employee
was discharged for just cause, the arbitrator in this instance can reasonable assume that
his powers extended beyond giving a yes-or-no answer and included the power to
reinstate him with or without back pay.
In one case, the Supreme Court stressed that "xxx the Voluntary Arbitrator had
plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine
the scope of his own authority subject only, in a proper case, to the certiorari jurisdiction
of this Court. The Arbitrator, as already indicated, viewed his authority as embracing not
merely the determination of the abstract question of whether or not a performance bonus
was to be granted but also, in the affirmative case, the amount thereof.
2. The cause of action accrues until the party obligated refuses xxx to
comply with his duty. Being warded off by promises, the workers not having decided to
assert [their] right[s], [their] causes of action had not accrued…"
Since the parties had continued their negotiations even after the matter was
raised before the Grievance Procedure and the voluntary arbitration, the respondents had
not refused to comply with their duty. They just wanted the complainants to present some
proofs. The complainant’s cause of action had not therefore accrued yet. Besides, in the
earlier voluntary arbitration case aforementioned involving exactly the same issue and
employees similarly situated as the complainants’, the same defense was raised and
dismissed by Honorable Thelma Jordan, Voluntary Arbitrator.
In fact, the respondents’ promised to correct their length of service and grant
them the back CBA benefits if the complainants can prove they are entitled rendered the
former in estoppel, barring them from raising the defense of laches or prescription. To
hold otherwise amounts to rewarding the respondents for their duplicitous representation
and abet them in a dishonest scheme against their workers.
87. SIME DARBY PILIPINAS, INC., vs MAGSALIN
G.R. No. 90426 December 15, 1989
DOCTRINE: The award of a Voluntary Arbitrator is final and executory after ten calendar
days from receipt of the award by the parties. The voluntary arbitrator had plenary
jurisdiction and authority to interpret the agreement, to arbitrate and to determine the
scope of his own authority. The Labor Code and its Implementing Rules thus clearly reflect
the important public policy of encouraging recourse to voluntary arbitration and of
shortening the arbitration process by rendering the arbitral award non- appealable to the
NLRC. The result is that a voluntary arbitral award may be modified and set aside only
upon the same grounds on which a decision of the NLRC itself may be modified or set
aside, by this Court.
FACTS: Petitioner Sime Darby and private respondent SDEA executed a Collective
Bargaining Agreement (CBA) providing, among others, that’s a performance bonus shall be
granted, the amount of which [is] to be determined by the Company depending on the
return of [sic] capital investment as reflected in the annual financial statementThe
petitioner however called both respondent SDEA and SDEA-ALU to a meeting wherein the
former explained that it was unable to grant the performance bonus corresponding to the
fiscal year 1988-1989 on the ground that the workers' performance during said period did
not justify the award of such bonus. The parties were called to a conciliation meeting and
in such meeting, both parties agreed to submit their dispute to voluntary arbitration.
The Voluntary Arbitrator on 17 August 1989 issued an award which declared
respondent union entitled to a performance bonus equivalent to 75% of the monthly basic
pay of its members. In that award, the Voluntary Arbitrator held that a reading of the CBA
provision on the performance bonus would show that said provision was mandatory hence
the only issue to be resolved was the amount of performance bonus.
In this Petition for Certiorari, Petitioner also argues that even if a performance
bonus were justified, the Voluntary Arbitrator gravely abused his discretion in giving an
award of 75% of the monthly basic rate without any evidence of the basis used in arriving
at such an award. It is insisted that under the relevant CBA provision, the company
determines the amount of the bonus if the same be justified. Petitioner also alleged that
respondent Arbitrator gravely erred when he based the award on the company's retained
earnings the level of which represents earnings accumulated during prior years and not
merely during the fiscal year 1988-1989.
ISSUE: whether or not the Voluntary Arbitrator acted with grave abuse of discretion or
without or in excess of jurisdiction in passing upon both the question of whether or not a
performance bonus is to be granted by petitioner Sime Darby to the private respondents
and the further question of the amount thereof? No
RULINGS: One point needs to be stressed at the outset: the award of a Voluntary
Arbitrator is final and executory after ten (10) calendar days from receipt of the award by
the parties. It must be borne in mind that the writ of certiorari is an extraordinary remedy
and that certiorari jurisdiction is not to be equated with appellate jurisdiction. In a special
civil action of certiorari, the Court will not engage in a review of the facts found nor even
of the law as interpreted or applied by the Arbitrator unless the supposed errors of fact or
of law are so patent and gross and prejudicial as to amount to a grave abuse of discretion
or an excess de pouvoir on the part of the Arbitrator.4 The Labor Code and its
Implementing Rules thus clearly reflect the important public policy of encouraging recourse
to voluntary arbitration and of shortening the arbitration process by rendering the arbitral
award non- appealable to the NLRC. The result is that a voluntary arbitral award may be
modified and set aside only upon the same grounds on which a decision of the NLRC itself
may be modified or set aside, by this Court.
It is thus essential to stress that the Voluntary Arbitrator had plenary jurisdiction
and authority to interpret the agreement to arbitrate and to determine the scope of his
own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. The
Arbitrator, as already indicated, viewed his authority as embracing not merely the
determination of the abstract question of whether or not a performance bonus was to be
granted but also, in the affirmative case, the amount thereof.
The Voluntary Arbitrator, upon the other hand, explicitly considered the net
earnings of petitioner Sime Darby in and 1989 as well as the increase in the company's
retained earnings in 1988 and as of 30 June 1989. Thus, the Arbitrator impliedly or
indirectly took into account the return on stockholders' investment realized for the fiscal
year 1988-1989. It should also be noted that the relevant CBA provision does not specify a
minimum rate of return on investment (ROI) which must be realized before any particular
amount of bonus may or should be declared by the company. Furthermore, any award to
be rendered must likewise take into account the total labor cost incurred by the Company.
It should not merely be confined to those pertaining to the members of the Sime Darby
Employees Association but necessarily include that which shall be paid and granted to all
other employees of Sime Darby this year.
The Voluntary Arbitrator also took into account, again in an indirect manner, the
performance of Sime Darby's employees by referring in his award to "the total labor cost
incurred by the Company".
On balance, we believe and so hold that the award of the Voluntary Arbitrator of
a bonus amounting to seventy-five percent (75%) of the basic monthly salary cannot be
said to be merely arbitrary or capricious or to constitute an excess de pouvoir.
88. LUZON DEVELOPMENT BANK vs. ASSO. OF LDB EMPLOYEES and GARCIA
G.R. No. 120319 October 6, 1995
DOCTRINE: Article 261 of the Labor Code accordingly provides for exclusive original
jurisdiction of such voluntary arbitrator or panel of arbitrators over
(1) the interpretation or implementation of the CBA and
(2) the interpretation or enforcement of company personnel policies.
Article 262 authorizes them, but only upon agreement of the parties, to exercise
jurisdiction over other labor disputes.
On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction
over the following enumerated cases:
. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in the absence
of stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving
the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.
FACTS: From a submission agreement of the LDB and the Association of Luzon
Development Bank Employees (ALDBE) arose an arbitration case to resolve the following
issue: Whether or not the company has violated the CBA provision and the MOA on
promotion.
At a conference, the parties agreed on the submission of their respective Position Papers.
Atty. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE’s Position Paper ;
LDB, on the other hand, failed to submit its Position Paper despite a letter from the
Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no Position Paper had
been filed by LDB.
Without LDB’s Position Paper, the Voluntary Arbitrator rendered a decision disposing as
follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the CBA provision
nor the MOA on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the
Voluntary Arbitrator and to prohibit her from enforcing the same.
ISSUE: WON a voluntary arbiter’s decision is appealable to the CA and not the SC
HELD: The jurisdiction conferred by law on a voluntary arbitrator or a panel of such
arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the
appellate jurisdiction of the NLRC for that matter. The “(d)ecision, awards, or orders of the
Labor Arbiter are final and executory unless appealed to the Commission …” Hence,
while there is an express mode of appeal from the decision of a labor arbiter, Republic Act
No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often
than not, elevated to the SC itself on a petition for certiorari, in effect equating the
voluntary arbitrator with the NLRC or the CA. In the view of the Court, this is illogical and
imposes an unnecessary burden upon it.
NOTES:
1. In labor law context, arbitration is the reference of a labor dispute to an impartial third
person for determination on the basis of evidence and arguments presented by such
parties who have bound themselves to accept the decision of the arbitrator as final and
binding. Arbitration may be classified, on the basis of the obligation on which it is based,
as either compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled by the
government to forego their right to strike and are compelled to accept the resolution of
their dispute through arbitration by a third party. 1 The essence of arbitration remains
since a resolution of a dispute is arrived at by resort to a disinterested third party whose
decision is final and binding on the parties, but in compulsory arbitration, such a third
party is normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties is
made, pursuant to a voluntary arbitration clause in their collective agreement, to an
impartial third person for a final and binding resolution. 2 Ideally, arbitration awards are
supposed to be complied with by both parties without delay, such that once an award has
been rendered by an arbitrator, nothing is left to be done by both parties but to comply
with the same. After all, they are presumed to have freely chosen arbitration as the mode
of settlement for that particular dispute. Pursuant thereto, they have chosen a mutually
acceptable arbitrator who shall hear and decide their case. Above all, they have mutually
agreed to de bound by said arbitrator’s decision.
UNFAIR LABOR PRACTICE
89. G.R. No. L-25291 January 30, 1971
THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-NATU,
FGU INSURANCE GROUP WORKERS and EMPLOYEES ASSOCIATION-NATU, and
INSULAR LIFE BUILDING EMPLOYEES ASSOCIATION-NATU, vs. THE INSULAR
LIFE ASSURANCE CO., LTD., FGU INSURANCE GROUP, JOSE M. OLBES and
COURT OF INDUSTRIAL RELATIONS
DOCTRINE: The act of an employer in notifying absent employees individually during a
strike following unproductive efforts at collective bargaining that the plant would be
operated the next day and that their jobs were open for them should they want to come in
has been held to be an unfair labor practice, as an active interference with the right of
collective bargaining through dealing with the employees individually instead of through
their collective bargaining representatives.
FACTS: The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU Insurance
Group Workers & Employees Association-NATU, and Insular Life Building Employees
Association-NATU (hereinafter referred to as the Unions), while still members of the
Federation of Free Workers (FFW), entered into separate CBAs with the Insular Life
Assurance Co., Ltd. and the FGU Insurance Group (hereinafter referred to as the
Companies).
Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia; tried to
dissuade the members of the Unions from disaffiliating with the FFW and joining the
National Association of Trade Unions (NATU), to no avail.
Enaje and Garcia soon left the FFW and secured employment with the Anti-Dummy Board
of the Department of Justice. Thereafter, the Companies hired Garcia in the latter part of
1956 as assistant corporate secretary and legal assistant in their Legal Department. Enaje
was hired as personnel manager of the Companies, and was likewise made chairman of
the negotiating panel for the Companies in the collective bargaining with the Unions.
Unions jointly submitted proposals to the Companies; negotiations were conducted on the
Union’s proposals, but these were snagged by a deadlock on the issue of union shop, as a
result of which the Unions filed on January 27, 1958 a notice of strike for “deadlock on
collective bargaining.” The issue was dropped subsequently (in short, nagkasundo). But,
the parties negotiated on the labor demands but with no satisfactory result due to a
stalemate on the matter of salary increases.
Meanwhile, 87 unionists were reclassified as supervisors without increase in salary nor in
responsibility while negotiations were going on in the Department of Labor after the notice
to strike was served on the Companies. These employees resigned from the Unions.
On May 21, 1958 the Companies through their acting manager and president, sent to each
of the strikers a letter. Unions, however, continued on strike, with the exception of a few
unionists who were convinced to desist by the aforesaid letter. Alleging that some non-
strikers were injured and with the use of photographs as evidence, the Companies then
filed criminal charges against the strikers with the City Fiscal’s Office of Manila.xxx
Another letter was sent by the company to the individual strikers: If you are still interested
in continuing in the employ of the Group Companies, and if there are no criminal charges
pending against you, we are giving you until 2 June 1958 to report for work at the home
office. If by this date you have not yet reported, we may be forced to obtain your
replacement. Before, the decisions was yours to make. So it is now.
Incidentally, all of the more than 120 criminal charges filed against the members of the
Unions, except 3, were dismissed by the fiscal’s office and by the courts. These three
cases involved “slight physical injuries” against one striker and “light coercion” against two
others.
* However, before readmitting the strikers, the Companies required them not only to
secure clearances from the City Fiscal’s Office of Manila but also to be screened by a
management committee among the members of which were Enage and Garcia.
CIR prosecutor filed a complaint for unfair labor practice against the Companies under
Republic Act 875. The complaint specifically charged the Companies with (1) interfering
with the members of the Unions in the exercise of their right to concerted action, by
sending out individual letters to them urging them to abandon their strike and return to
work, with a promise of comfortable cots, free coffee and movies, and paid overtime, and,
subsequently, by warning them that if they did not return to work on or before June 2,
1958, they might be replaced; and (2) discriminating against the members of the Unions
as regards readmission to work after the strike on the basis of their union membership and
degree of participation in the strike.
ISSUE: Whether or not respondent company is guilty of ULP
HELD: YES. The act of an employer in notifying absent employees individually during a
strike following unproductive efforts at collective bargaining that the plant would be
operated the next day and that their jobs were open for them should they want to come in
has been held to be an unfair labor practice, as an active interference with the right of
collective bargaining through dealing with the employees individually instead of through
their collective bargaining representatives.
Although the union is on strike, the employer is still under obligation to bargain with the
union as the employees’ bargaining representative.
Individual solicitation of the employees or visiting their homes, with the employer or his
representative urging the employees to cease union activity or cease striking, constitutes
unfair labor practice. All the above-detailed activities are unfair labor practices because
they tend to undermine the concerted activity of the employees, an activity to which they
are entitled free from the employer’s molestation.
Indeed, when the respondents offered reinstatement and attempted to “bribe” the strikers
with “comfortable cots,” “free coffee and occasional movies,” “overtime” pay for “work
performed in excess of eight hours,” and “arrangements” for their families, so they would
abandon the strike and return to work, they were guilty of strike-breaking and/or union-
busting and, consequently, of unfair labor practice. It is equivalent to an attempt to break
a strike for an employer to offer reinstatement to striking employees individually, when
they are represented by a union, since the employees thus offered reinstatement are
unable to determine what the consequences of returning to work would be.
ULP also: (super short cut na to) Hiring of Enage and Garcia with attractive
compensations; respondents reclassified 87 employees as supervisors without increase in
salary or in responsibility, in effect compelling these employees to resign from their
unions; respondents, thru their president and manager, respondent Jose M. Olbes,
brought three truckloads of non-strikers and others, escorted by armed men, who, despite
the presence of eight entrances to the three buildings occupied by the Companies, entered
thru only one gate less than two meters wide and in the process, crashed thru the picket
line posted in front of the premises of the Insular Life Building. This resulted in injuries on
the part of the picketers and the strike-breakers; respondents brought against the
picketers criminal charges, only three of which were not dismissed, and these three only
for slight misdemeanors. As a result of these criminal actions, the respondents were able
to obtain an injunction from the court of first instance restraining the strikers from
stopping, impeding, obstructing, etc. the free and peaceful use of the Companies’ gates,
entrance and driveway and the free movement of persons and vehicles to and from, out
and in, of the Companies’ buildings.
90. G.R. Nos. L-20667 and 20669 October 29, 1965
PHILIPPINE STEAM NAVIGATION CO., vs. PHILIPPINE OFFICERS GUILD, ET
AL.,
DOCTRINE: The rule in this jurisdiction is that subjection by the company of its
employees to a series of questionings regarding their membership in the union or their
union activities, in such a way as to hamper the exercise of free choice on their part,
constitutes unfair labor practice. The respondent court has found that PHILSTEAM's
interrogation of its employees had in fact interfered with, restrained and coerced the
employees in the exercise of their rights to self organization.
FACTS: PHILSTEAM is engaged in inter-island shipping, PMOG is a labor-union affiliated
with Federation of Free Workers (FFW) representing and which represented some of
PHILSTEAM’s officers. The Cebu Seamen’s Association (CSA) is another labor union that
represents some of PHILSTEAM’s officers. PMOG sent PHILSTEAM a set of demands with a
request for collective bargaining but PHILSTEAM required PMOG to first prove its
representation of a majority of PHILSTEAM’s employees before its demands will be
considered. PHILSTEAM started interrogating and investigating its captains, deck officers,
and engineers, to find out directly from them if they had joined PMOG or authorized PMOG
to represent them. PMOG filed a notice of intention to strike stating PHILSTEAM’s alleged
refusal to bargain and unspecified ULP. The CSA also transmitted its own set of demands
to PHILSTEAM where the latter considered its demands. PHILSTEAM and CSA signed a
CBA. On that same day, PMOG declared a strike against PHILSTEAM
Issue: Whether or not PHILSTEAM committed ULP.
Held: The acts found by respondent court constituting the foregoing unfair labor practice
are: (1) the interrogation and investigation by PHILSTEAM's supervisory officials of its
captains, deck officers and engineers, to determine whether they had authorized PMOG to
act as their bargaining agent; (2) the subjection of PMOG to vilification; and (3) the
participation of PHILSTEAM's pier superintendent in soliciting membership for a competing
union. PHILSTEAM admits that it initiated and carried out an investigation of its officers as
to their membership in PMOG and whether they had given PMOG authority to represent
them in collective bargaining. The reason for this, PHILSTEAM was merely to ascertain for
itself the existence of a duty to bargain collectively with PMOG, a step allegedly justified by
PMOG's refusal to furnish proof of majority representation. The asserted reason for the
investigation cannot be sustained. The record discloses that such investigation was started
by PHILSTEAM even before it received PMOG's reply stating a refusal to submit proof of
majority representation. Specifically, the investigation was put under way on June 29,
1954 the same day PHILSTEAM sent its request that PMOG submit proof of majority
representation whereas, PHILSTEAM knew of PMOG's refusal to furnish said proof only on
July 6, 1954, when it received PMOG's reply letter. PMOG's refusal to submit evidence
showing it represented a majority had nothing to do with PHILSTEAM's decision to carry
out the investigation. An employer is not denied the privilege of interrogating its
employees as to their union affiliation, provided the same is for a legitimate purpose and
assurance is given by the employer that no reprisals would be taken against unionists.
Nonetheless, any employer who engages in interrogation does so with notice that he risks
a finding of unfair labor practice if the circumstances are such that his interrogation
restrains or interferes with employees in the exercise of their rights to self-organization.
The rule in this jurisdiction is that subjection by the company of its employees to a series
of questionings regarding their membership in the union or their union activities, in such a
way as to hamper the exercise of free choice on their part, constitutes unfair labor
practice. The respondent court has found that PHILSTEAM's interrogation of its employees
had in fact interfered with, restrained and coerced the employees in the exercise of their
rights to self organization.
91. Judric Canning Corp vs Inciong
G.R. No. L- 51494. August 19, 1982
DOCTRINES: Dismissal of employees for soliciting signatures to form a union within the
company constitutes unfair labor practice. Interference with formation of a labor union
violative of employees’ right to self-organization.
FACTS: private respondents are employees of Judric and members of United Lumber and
General Workers of the Philippines (ULGWP). They alleged that Judric did not allow them
to report for work due to their union activities because they were soliciting membership in
a union yet to be organized in the company and their time cards were removed. They filed
an unfair labor practice case. Judric denied that it did not allow the private respondents,
and countered that it was them who failed to report for work and abandoned their
positions. It further stated that it don’t have any knowledge regarding the union activities.
Ministry of Labor ordered Judric to reinstate the private respondents. Judric filed an MR
but was dismissed.
ISSUE: WON Judric committed ULP
HELD: Yes. Under Article 248(a) of the Labor Code of the Philippines, to interfere with,
restrain, or organization is an unfair labor practice on the part of the employer. Paragraph
(d) of said Article also considers it an unfair labor practice for an employer “to initiate,
dominate, assist or otherwise interfere with the formation or administration of any labor
organization, including the giving of financial or other support to it.
92. Wise & Co Inc vs Wise & Co Inc Employees Union
G.R. No. 87672. October 13, 1989
DOCTRINES: There can be no discrimination where the employees concerned are not
similarly situated.
FACTS: Management issued a memorandum circular introducing a profit sharing scheme
for its managers and supervisors, the scheme was made for the non-union members.
WCEU wrote petitioner asking for participation in the said scheme, but was denied on the
ground that it strictly adheres to the CBA. There was a negotiation of the CBA wherein
petitioner advised WCEU that they are considering to include those employees covered by
the CBA to its profit sharing. There was no agreement reached, thus, a deadlock.
Petitioner then, distributed the profit sharing benefit not only to managers and supervisors
but also to all other rank and file employees not covered by the CBA. WCEU filed a notice
of strike and alleged that the petitioner is guilty of ULP. Voluntary Arbitrator ordered
petitioner to extend the scheme to the members of WCEU.
ISSUE: WON Wise & Co is guilty of ULP on the ground of discrimination
HELD: No. There can be no discrimination committed by petitioner thereby as the
situation of the union employees are different and distinct from the non-union employees.
Indeed, discrimination per se is not unlawful. There can be no discrimination where the
employees concerned are not similarly situated. Respondent union cannot claim that there
is grave abuse of discretion by the petitioner in extending the benefits of profit sharing to
the non-union employees as they are 2 groups not similarly situated. These non-union
employees are not covered by the CBA. They do not derive and enjoy the benefits under
the CBA.
93. Balmar Farms vs NLRC
G.R. No. 73504. October 15, 1991
DOCTRINES: Balmar's refusal to bargain collectively with ALU is a clear act of ULP. Article
248 enumerates ULP committed by employers, (g) to violate the duty to bargain
collectively as prescribed by this Code.
FACTS: Balmar is engaged in planting of bananas. Med arbiter issued an order certifying
Associated Labor Union as its sole and exclusive bargaining representative. President of
Balmar Farms Employees Association sent a letter to Regional Director of Ministry of Labor
wherein Balmar was furnished a copy stating that the former is disregarding ALU as its
representative and requests Balmar that it transacts directly with them. ALU sent a letter
to Balmar attaching proposals for CBA, the latter replied stating that it cannot enter into a
CBA because of the letter of BFEA. ALU sent another letter stating that it shall be
recognized as the bargaining representative. Balmar replied that BFEA requested that the
transactions will be between them and not ALU. ALU filed a case of ULP for Balmar’s
refusal to bargain. LA favored ALU stating Balmar is guilty of ULP. NLRC affirmed LA’s
decision.
ISSUE: WON Balmar is guilty of ULP on the ground that it refuses to bargain with ALU
HELD: Yes. The purpose of certification election is to give the employees true
representation in their collective bargaining with an employer. In the bargaining process,
the workers and employer shall be represented by their exclusive bargaining
representatives. The labor organization designated or selected by the majority of
employees in an appropriate collective bargaining unit, shall be the exclusive
representative of the employees in such unit for the purpose of collective bargaining.
Balmar’s refusal to bargain collectively with ALU is a clear act of unfair labor practice.
Article 248 (Labor Code, as amended), enumerates unfair labor practices committed by
employers such as for them, (g) to violate the duty to bargain collectively as prescribed by
this Code.
94. Alhambra Industries, Inc. vs. Court of Industrial Relations
No. L-25984. October 30, 1970
DOCTRINE: Employer’s refusal to bargain collectively constitutes an unfair labor practice.
FACTS: The complaint for unfair labor practice for violation of section 4(a) subsections (4)
and (6) of the Industrial Peace Act, was filed by the acting prosecutor of respondent court
against petitioner, upon the charges of respondent union that 15 of the union members,
employed as drivers and helpers of petitioner, were being discriminated against by
petitioner’s not affording them the benefits and privileges enjoyed by all the other
employees for no justifiable reason other than their union membership; and that the union
had asked petitioner to negotiate with respect to said fifteen drivers and helpers who were
being excluded from the benefits of their subsisting collective bargaining agreement, but
petitioner refused to do so. The union prayed for a desistance order and that petitioner be
ordered to bargain collectively in good faith and to grant the drivers and helpers the same
benefits and privileges extended to and enjoyed by all its other employees.
Petitioner denied the unfair labor practice imputed to it and countered that the
fifteen drivers and helpers were not its employees, but separate and independent
employees of its salesmen and propagandists who exercised discretion and control over
their selection, employment, compensation, suspension and dismissal.
ISSUE: WON the company’s failure to comply with its duty to bargain amounted to the
commission of an unfair labor practice.
HELD: Yes. Petitioner’s failure to comply with its duty under the collective bargaining
agreement to extend the privileges, rights and benefits thereof to the drivers and helpers
as its actual employees clearly amounted to the commission of an unfair labor practice.
And consequently respondent court properly ordered in its judgment that said
drivers and helpers “should be given and/or extended all the privileges, rights and benefits
that are given to all the other regular employees retroactive as of the effectivity of the first
agreement of March 14, 1962 up to the present.” In so ordering, respondent court was but
discharging its function under section 5(c) of the Act, supra, to order the cessation of an
unfair labor practice and “take such affirmative action as will effectuate the policies of this
Act.”
Failure on petitioner’s part to live up in good faith to the terms of its collective
bargaining agreement by denying the privileges and benefits thereof to the fifteen drivers
and helpers through its device of trying to pass them off as ‘employees’ of its salesmen
and propagandists was a serious violation of petitioner’s duty to bargain collectively and
constituted unfair labor practice in any language.
95. Salanga vs. Court of Industrial Relations
No. L-22456. September 27, 1967
DOCTRINE: When company was not guilty of unfair labor practice.
Right of employee dismissed from service due to unfair labor practice.
FACTS: Petitioner had, since 1948, been an employee of the Company, which, on October
2, 1959, entered with the Union, of which respondent John de Castillo is the president,
into a collective bargaining agreement.
Section 3 of the CBA reads:
“The company agrees to require as a condition of employment of those workers
covered by this agreement who either are members of the UNION on the date of the
signing of this agreement, or may join the UNION during the effectivity of this agreement,
that they shall not voluntarily resign from the UNION earlier than thirty (30) days before
the expiry date of this agreement as provided in Article XIII hereof, provided, however,
that nothing herein contained shall be construed to require the company to enforce any
sanction whatsoever against any employee or worker who fails to retain his membership in
the UNION as hereinbefore stated, for any cause other than voluntary resignation of non-
payment of regular union dues on the part of said employee or worker.”
Petitioner was a member of the Union since 1953. He tendered his resignation
from the Union, which accepted it on August 26, 1961, and transmitted it to the Company
on August 29, 1961, with a request for the immediate implementation of said section 3.
The Union told the Company that petitioner’s membership could not be
reinstated and insisted on his separation from the service, conformably with the stipulation
above-quoted.
At petitioner’s behest, on or about December 7. 1961, a prosecutor of the Court
of Industrial Relations commenced, therefore, the present proceedings, for unfair labor
practice, against the Union.
Although petitioner had resigned from the Union and the latter had accepted the
resignation, the former had, soon later—upon learning that his withdrawal from the Union
would result in his separation from the Company, owing to the closed-shop provision
above referred to—revoked or withdrawn said resignation, and the Union refused to
consent thereto without any just cause therefor.
ISSUE: WON the company committed unfair labor practice towards the petitioner.
HELD: NO. In the case at bar, the company was reluctant—if not unwilling—to discharge
petitioner. When the union first informed it of petitioner’s resignation and urged
implementation of Section 3 of the bargaining contract, the company advised petitioner of
its provisions, thereby intimating that he had to withdraw his resignation in order to keep
his employment. Besides, the company notified the union that it would not take any action
on the case and would consider petitioner still a member of the union. When the latter,
thereafter, insisted on petitioner’s discharge, the company still demurred and explained
that it was not taking sides and that its stand was prompted merely by “humane”
considerations, springing from the belief that petitioner had resigned from the union
without realizing its effect upon his employment. And, as the union reiterated its demand,
the company notified petitioner that it had no other alternative but to terminate his
employment, and dismissed him from the service, although with “regret”. Under the
circumstances, the company was not “unfair” to petitioner.
Having been dismissed from the service owing to an unfair labor practice on the
part of the union, petitioner is entitled to reinstatement as member of the union and to his
former or substantially equivalent position in the company, without prejudice to his
seniority and/or rights and privileges, and with back pay, which back pay shall be borne
exclusively by the union. In the exercise of its sound judgment and discretion, the lower
court may, however, take such measures as it may deem best, including the power to
authorize the company to make deductions for petitioner’s benefit, from the sums due to
the union by way of check off or otherwise.
96. United Restauror's Employees & Labor Union vs. Torres
No. L-24993. December 18, 1968
DOCTRINE: Collective bargaining unit; In whom vested; Consent election.
Where petition for certiorari to annul writ of preliminary injunction has become moot and
academic because petitioner lost in a consent election and is no longer a proper collective
bargaining unit.
FACTS: The case arose from a verified complaint for injunction with prayer for preliminary
injunction filed by Delta Development Corporation (Delta), against the Union on January
16, 1965.
Delta is the owner of the Makati commercial center situated at Makati, Rizal. It is
in the business of leasing portions thereof. The center has its own thoroughfares,
pedestrian lanes, parking areas for the benefit of customers and clients of its lessees.
The Union is an association of some employees of Suló Restaurant, a lessee of
Delta. On January 8, 1965, the Union sought permission from Delta to conduct picketing
activities "on the private property of plaintiff surrounding Suló Restaurant."
Delta denied the request because it "may be held liable for any incident that may
happen in the picket lines, since the picketing would be conducted on the private property
owned by plaintiff." Despite the denial, the Union picketed on Delta's property surrounding
Suló Restaurant on January 16 and continued to conduct said activity.
No employer-employee relationship exists between Delta and the Union
members.
Delta moved to dismiss the proceeding at bar on the ground that it has become
moot and academic. It averred that the Union lost in the consent election conducted by
the Department of Labor and that in said election cases, a rival union—Suló Employees
Labor Union (SELU, for short)—was certified by CIR as the exclusive bargaining
representative of all the employees of Suló Restaurant pursuant to CIR's order.
ISSUE: whether the case at bar is already moot and academic
HELD: YES. Verily, the Union can no longer demand collective bargaining. For, it became
the minority union. As matters stand, said right properly belongs to SELU, which
commands the majority. By law, the right to be the exclusive representative of all the
employees in an appropriate collective bargaining unit is vested in the labor union
"designated or selected" for such purpose "by the majority of the employees" in the unit
concerned. SELU has the right as well as the obligation to hear, voice out and seek
remedies for the grievances of all Suló employees, including employees who are members
of petitioner Union, regarding the "rates of pay, wages, hours of employment, or other
conditions of employment."
Indeed, petitioner Union's concerted activities designed to be recognized as the
exclusive bargaining agent of Suló employees must come to a halt. Collective bargaining
cannot be the appropriate objective of petitioning Union's continuation of their concerted
activities. To allow said Union to continue picketing for the purpose of drawing the
employer to the collective bargaining table would obviously be to disregard the results of
the consent election. To further permit the Union's picketing activities would be to flaunt at
the will of the majority.
97. Manila Mandarin Employees Union vs. NLRC
No. L-76989. September 29,1987
DOCTRINE: A closed-shop agreement is an agreement whereby an employer binds
himself to hire only members of the contracting union who must continue to remain
members in good standing to keep their jobs. It is "the most prized achievement of
unionism." It adds membership and compulsory dues. By holding out to loyal members a
promise of employment in the closed-shop, it welds group solidarity.
A closed-shop is a valid form of union security.
FACTS: Melba C. Beloncio, an employee of Manila Mandarin Hotel since 1976 and at the
time of her dismissal, assistant head waitress at the hotel's coffee shop, was expelled from
the petitioner Manila Mandarin Employees Union for acts allegedly inimical to the interests
of the union. The union demanded the dismissal from employment of Beloncio on the
basis of the union security clause of their collective bargaining agreement and the Hotel
acceded by placing Beloncio on forced leave effective August 10,1984.
The union security clause of the collective bargaining agreement provides:
"Section 2. Dismissals,
x x x x x
b) Members of the Union who cease to be such members and/or who fail to maintain
their membership in good standing therein by reason of their resignation from the Union,
and/or by reason of their expulsion from the Union, in accordance with the Constitution
and By-Laws of the Union, for non-payment of union dues and other assessment, for
organizing, joining or forming another labor organization shall, upon written notice of such
cessation of membership or failure to maintain membership in the Union and upon written
demand to the company by the Union, be dismissed from employment by the Company
after complying with the requisite due process requirement; x x x" (Italics supplied)"
(Rollo, p. 114)

The charge of disloyalty against Beloncio arose from her emotional remark to a
waitress who happened to be a union steward, "Wala akong tiwala sa Union ninyo." The
remark was made in the course of a heated discussion regarding Beloncio's efforts to
make a lazy and recalcitrant waiter adopt a better attitude towards his work.

Two days before the effective date of her forced leave or on August 8, 1984,
Beloncio filed a complaint for unfair labor practice and illegal dismissal against herein
petitioner-union and Manila Mandarin Hotel, Inc. before the NLRC, Arbitration Branch.

ISSUE: WON there was an unfair labor practice in this case

HELD: YES. A union member may not be expelled from her union, and consequently from
her job, for personal or impetuous reasons or for causes foreign to the closed-shop
agreement and in a manner characterized by arbitrariness and whimsicality.
Necessarily, when the hotel decides the recommended dismissal, its acts would
be subject to scrutiny. Particularly, it will be asked whether it violates or not the existing
CBA. Certainly, violations of the CBA would be unfair labor practice.

The Hotel would not have compelled Beloncio to go on forced leave were it not
for the union's insistence and demand to the extent that because of the failure of the hotel
to dismiss Beloncio as requested, the union filed a notice of strike with the Ministry of
Labor and Employment on August 17,1984 on the issue of unfair labor practice. The hotel
was then compelled to put Beloncio on forced leave and to stop payment of her salary
from September 1,1984.

It is natural for a union to desire that all workers in a particular company should
be its dues-paying members. Since it would be difficult to insure 100 percent membership
on a purely voluntary basis and practically impossible that such total membership would
continuously be maintained purely on the merits of belonging to the union. the labor
movement has evolved the system whereby the employer is asked, on the strength of
collective action, to enter into what are now familiarly known as "union security"
agreements.

The collective bargaining agreement in this case contains a union security

clause—a closed-shop agreement. This Court has held that a closed-shop is a valid form of
union security, and such a provision in a collective bargaining agreement is not a
restriction of the right of freedom of association guaranteed by the Constitution.

The Court stresses, however, that union security clauses are also governed by
law and by principles of justice, fair play, and legality. Union security clauses cannot be
used by union officials against an employer, much less their own members, except with a
high sense of responsibility, fairness, prudence, and judiciousness.