98 Kiok Loy v. NLRC, G.R. No.
L-54334 January 22, 1986 Commission's finding of unfair labor practice for refusal to bargain is
Facts: After winning the certification election, the Union furnished two copies of
its proposed CBA to the Company. Also, it requested the Company for its
counter proposals. This and the subsequent requests were ignored and
remained unacted upon by the Company.
The Union then filed “a Notice of Strike”
The conciliation proceedings and attempt to settle failed. This promoted the
BLR the case to the NLRC.
In the BLR, the Union submitted its position paper. The Company did not and
resuested for the resetting instead.
The case was reset, and further reset when Atty. Dela Cruz, the counsel of
record of the Company, withdrawed. Atty. Fortunato Panganiban formally
entered his appearance as counsel for the Company only to request for another
postponement allegedly for the purpose of acquainting himself with the case.
Meanwhile, the Company submitted its position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the
Company's representative, Mr. Ching, who was supposed to be examined, failed
to appear. Atty. Panganiban then requested for another postponement which
the labor arbiter denied. He also ruled that the Company has waived its right to
present further evidence and, therefore, considered the case submitted for
resolution.
LA submitted its report to the NLRC.
NLRC- Company is guilty of unjustified refusal of CBA.
Issue:
Whether or not there the decision as issued due to GADALEJ because there is a
violation of due process?
 Petitioner Company maintains that its right to procedural due process
has been violated when it was precluded from presenting further
evidence in support of its stand and when its request for further
postponement was denied.
 Petitioner further contends that the National Labor Relations
not supported by law and the evidence considering that it was only on
May 24, 1979 when the Union furnished them with a copy of the
proposed CBA and it was only then that they came to know of the
Union's demands; and finally, that the CBA approved and adopted by
the National Labor Relations Commission is unreasonable and lacks
legal basis.
 As a last-ditch attempt to effect a reversal of the decision sought to be
reviewed, petitioner also capitalizes on the issue of due process
claiming, that it was denied the right to be heard and present its side
when the Labor Arbiter denied the Company's motion for further
postponement.
Held: No. 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.
We are in total conformity with respondent NLRC's pronouncement.
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. 9 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. Petitioner has
not at any instance, evinced good faith or willingness to discuss freely and fully
the claims and demands set forth by the Union much less justify its opposition
thereto.
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.
Neither are WE persuaded by petitioner-company's stand that the CBA which
was approved and adopted by the NLRC is a total nullity for it lacks the
company's consent, much less its argument that once the CBA is implemented,
the Company will face the prospect of closing down because it has to pay a
staggering amount of economic benefits to the Union that will equal if not
exceed its capital. Such a stand and the evidence in support thereof should have
been presented before the Labor Arbiter which is the proper forum for the
purpose.
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 employment 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 management must be accorded due respect by this Court.
99 Manila Fashions v. NLRC, 264 SCRA 104 (1996)
FACTS:
1. On 15 March 1993 respondent union through its president, Nonito Zamora,
filed before LA a complaint charging petitioner with non-compliance with
Wage Order No. NCR-02 and 02-A mandating a P12 — increase in wages
effective 8 January 1991. As a result, complainants’ basic pay, 13th month
pay, SIL pay, legal holiday pay, night shift differential and OT pay were all
underpaid.
2. Petitioner countered that the failure to comply with the pertinent Wage
Order was brought about by the tremendous losses suffered by it which
were aggravated when the workers staged a strike on account of the non-
adjustment of their basic pay. To forestall continuous suspension/closure of
business operations, which petitioner did for three (3) months, the strikers
sent a notice that they were willing to condone the implementation of the
increase. The condonation was distinctly stated in Sec. 3, Art. VIII, of the
CBA dated 4 February 1992, which was voluntarily entered into by the
parties and represents a reasonable settlement — Sec. 3. The Union realizes
the company’s closeness to insolvency and, as such, sympathizes with the
company’s financial condition. Therefore, the Union has agreed, as it hereby
agrees, to condone the implementation of Wage Order No. NCR-02 and 02-
A.
3. The complainants admitted the existence of the aforementioned provision
in the CBA; however they denied the validity thereof inasmuch as it was not
reached after due consultation with the members.
4. LA sustained the claim that the subject provision of the CBA was void but
based its conclusion on a different ground — While it is true that both
union officers/members and (petitioner) signed the agreement, however,
the same is not enforceable since said agreement is null and void, it being
contrary to law. It is only the Tripartite Wage Productivity board of the
DOLE that could approve exemption (of) an establishment from coverage of
(a) Wage Order.
5. Thus on 30 June 1993 petitioner was adjudged liable for underpayment of
P900,012.00. All other claims were dismissed for lack of merit.
6. On appeal, NLRC was not persuaded by petitioner. On the other hand, the
appeal of private respondents was no longer considered as it was filed
beyond the reglementary period. Thus on 31 May 1994 the disputed
decision was affirmed.
ISSUE: Was the condonation of the implementation of Wage Order No.. NCR-02
and 02-A contained in Sec. 3, Art. VIII, of the CBA valid? NO
HELD/RATIO:
1. NO. NLRC that the condonation appearing in Sec. 3, Art. VIII, of the CBA did
not exempt petitioner from compliance with Wage Order No. NCR-02 and
02-A.
2. A CBA refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all
other terms and conditions of employment in a bargaining unit, including
mandatory provisions for grievances and arbitration machineries. As in all
other contracts, the parties in a CBA may establish such stipulations,
clauses, terms and conditions as they may deem convenient provided they
are not contrary to law, morals, good customs, public order or public policy.
Section 3, Art. VIII, of the CBA is a void provision because by agreeing to
condone the implementation of the Wage Order the parties thereby
contravened its mandate on wage increase of P12.00 effective 8 January
1991. Also, as stated by the LA, it is only the Tripartite Wage Productivity
Board of the DOLE that could approve exemption of an establishment from
coverage of a Wage Order.
3. If petitioner is a financially distressed company then it should have applied
for wage exemption so that it could meet its labor costs without
endangering its viability or its very existence upon which both management
and labor depend for a living. The Office of the Solicitor General emphasizes
the point that parties to a CBA may not, by themselves, set a wage lower
than the minimum wage. To do so would render nugatory the purpose of a
wage exemption, not to mention the possibility that employees may be
duped or be unwittingly put in a position to accept a lower wage.
4. The cases that petitioner relies on are simply inapplicable because, unlike
the present case which involves a stipulation in the CBA in contravention of
law, they are concerned with compromise settlements as a means to end
labor disputes recognized by Art. 227 of the Labor Code and considered not
against public policy by doctrinal rules established by this Court.
 100 Union of Filipro Employees-Drug (UFE-DFA-KMU) v. Nestle
RULING: Petition is DISMISSED. The order of NLRC which affirmed decision LA
awarding P900,012.00 to complainants is AFFIRMED. G.R. No. 158930-31, August 22, 2006

 FACTS:

1. Before the expiration of the existing CBA between Nestlé and UFE-

DFAKMU, a Letter of Intent, informed Nestlé of their intent to open new
Collective Bargaining Negotiation for the next 3 years. 
2. Nestlé acknowledged receipt of the letter and informed that it was 
preparing its own counterproposal. In another letter, Nestlé 

underscored its position that “unilateral grants, one-time company gra
nts, company-initiated policies and programs, 

which include, but are not limited to the Retirement Plan, Incidental Str
aight Duty Pay and Calling Pay Premium, are by their very nature not pr
oper subjects of CBA negotiations and therefore shall be excluded there
from.” 

3. Despite 15 meetings between them, the parties failed to reach any 
agreement on the proposed CBA. So, the company requested the 

NCMB to conduct preventive mediation proceedings between them.

Conciliation proceedings nevertheless proved ineffective.

4. The union argued that Nestlé’s “refusal to bargain on a very 
important CBA economic provision constitutes unfair labor practice” w
hen it allegedly set as a precondition for the holding of collective 
bargaining negotiations the non-inclusion of the issue of Retirement 
Plan.
5. On 26 November 2001, in view of the looming strike, Nestle filed with
the DOLE a Petition for Assumption of Jurisdiction, fundamentally
praying that the Secretary of the DOLE, Hon. Patricia A. Sto. Tomas,
assume jurisdiction over the current labor dispute as mandated by
Article 263 (g) of the Labor Code, as amended, thereby effectively
enjoining any impending strike at the Nestle Cabuyao Plant in Laguna.
6. On 29 November 2001, Sec. Sto. Tomas issued an Order assuming
jurisdiction over the subject labor dispute between the parties.
7. Accordingly, any strike or lockout is hereby enjoined. The parties are
directed to cease and desist from committing any act that might lead to
the further deterioration of the current labor relations situation.
8. The parties are further directed to meet and convene for the discussion
 of the union proposals and company counter-proposals before the
National Conciliation and Mediation Board (NCMB) who is hereby
designated as the delegate/facilitator of this Office for this purpose. The
NCMB shall report to this Office the results of this attempt at
conciliation and delimitation of the issues within thirty (30) days from
the parties receipt of this Order, in no case later than December 31,
2001. If no settlement of all the issues is reached, this Office shall
thereafter define the outstanding issues and order the filing of position
papers for a ruling on the merits.
9. UFE-DFA-KMU sought reconsideration of the Assumption of
Jurisdiction Order.  1.
10. Despite the injunction contained in Sec. Sto. Tomas Assumption of
Jurisdiction Order and conciliation efforts by the NCMB, the employee
members of UFE-DFA-KMU at the Nestle Cabuyao Plant went on strike.
11. Notwithstanding the Return-To-Work Order, the members of UFE-DFA-
KMU continued with their strike and refused to go back to work as
instructed. Thus, Sec. Sto. Tomas sought the assistance of the Philippine
National Police (PNP) for the enforcement of said order.
12. At the hearing, Nestle and UFE-DFA-KMU filed their respective position
papers. In its position paper, Nestle addressed several issues allegedly
pertaining to the current labor dispute, i.e., economic provisions of the
CBA as well as the non-inclusion of the issue of the Retirement Plan in
the collective bargaining negotiations. UFE-DFA-KMU, in contrast,
limited itself to tackling the solitary issue of whether or not the
retirement plan was a mandatory subject in its CBA negotiations with
the company on the contention that the Order of Assumption of
Jurisdiction covers only the issue of Retirement Plan.
13. Then Acting Secretary of the DOLE, Hon. Arturo D. Brion, came out with
an Order ruling that the present Retirement Plan at the
Nestle Cabuyao Plant is a unilateral grant that the parties have
expressly so recognized and is therefore not a mandatory subject for
bargaining. UFE-DFA-KMU went to the CA via petition for certiorari
seeking to annul this order which was granted.
14. Dissatisfied, both parties separately moved for the reconsideration of
the abovequoted decision with Nestl basically assailing that part of the
decision finding the DOLE Secretary to have gravely abused her
discretion when she ruled that the Retirement Plan is not a valid issue
for collective bargaining negotiations; while UFE-DFA-KMU questions,
in essence, the appellate courts decision in absolving Nestle of the
charge of unfair labor practice.
ISSUES:
(1) WON the Retirement Plan was a proper subject to be included in the CBA
negotiations between the parties— YES
(2) WON that the assumption powers of the Secretary of Labor and
Employment should have been limited merely to the grounds alleged in the
second Notice of Strike— NO
(3) WON Nestle was guilty of unfair labor practice despite allegedly setting a
pre-condition to bargaining the non-inclusion of the Retirement Plan as an
issue in the collective bargaining negotiations— NO
RATIO:
 
With regard to the non-inclusion of the Retirement Plan in the CBA
negotiations between Nestl and UFE-DFA-KMU (Cabuyao Division): By
way of background, the parties therein resorted to a slowdown and
walked out of the factory prompting the management to shut down its
operations. Collective bargaining negotiations were conducted but a
deadlock was subsequently declared. The Secretary of Labor assumed
jurisdiction over the labor dispute and issued a return-to-work order.
The NLRC thereafter issued its resolution modifying Nestle’s existing
non-contributory Retirement Plan. The company filed a petition
for certiorari alleging grave abuse of discretion on the part of the NLRC
as Nestl was arguing that since its Retirement Plan is non-contributory,
it should be a non-issue in CBA negotiations. Nestle had the sole and
exclusive prerogative to define the terms of the plan as the employees
had no vested and demandable rights thereon the grant of such not
being a contractual obligation but simply gratuitous. In a ruling
contrary to Nestle’s position, this Court, through Madame Justice Grio-
Aquino, declared that:
 
The company’s [Nestle] contention that its retirement plan is non-negotiable, is
not well-taken. The NLRC correctly observed that the inclusion of the
retirement plan in the collective bargaining agreement 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 (citation omitted).
 
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 Unions demand to increase the
benefits due the employees under said plan, is a valid CBA issue. Employees do
have a vested and demandable right over existing benefits voluntarily granted
to them by their employer. The latter may not unilaterally withdraw, eliminate
or diminish such benefits (Art. 100, Labor Code; other citation omitted).
In the case at bar, it cannot be denied that the CBA that was about to expire at
that time contained provisions respecting the Retirement Plan. As the latter
benefit was already subject of the existing CBA, the members of UFE-DFA-KMU
were only exercising their prerogative to bargain or renegotiate for the
improvement of the terms of the Retirement Plan just like they would for all the
other economic, as well as non-economic benefits previously enjoyed by them.
Precisely, the purpose of collective bargaining is the acquisition or attainment of
the best possible covenants or terms relating to economic and non-economic
benefits granted by employers and due the employees. The Labor Code has
actually imposed as a mutual obligation of both parties, this duty to bargain
collectively.
And, in demanding that the terms of the Retirement Plan be opened for
renegotiation, the members of UFE-DFA-KMU are acting well within their rights
as we have, indeed, declared that the Retirement Plan is consensual in
character; and so, negotiable. Contrary to the claim of Nestle that the categorical
mention of the terms unilateral agreement in the letter and the MOA signed by
the representatives of UFE-DFA-KMU, had, for all intents and purposes worked
to estop UFE-DFA-KMU from raising it as an issue in the CBA negotiations, our
reading of the same, specifically Paragraph 6 and subparagraph 6.2:
6.    Additionally, the COMPANY agree to extend the following unilateral grants
which shall not form part of the Collective Bargaining Agreement (CBA):
6.2. Review for improvement of the COMPANYs Retirement Plan and the
reference on the Retirement Plan in the Collective Bargaining Agreement signed
on 4 July 1995 shall be maintained hardly persuades us that the members of
UFE-DFA-KMU have agreed to treat the Retirement Plan as a benefit the terms
of which are solely dependent on the inclination of the Nestle and remove the
subject benefit from the ambit of the CBA. The characterization unilaterally
imposed by Nestle on the Retirement Plan cannot operate to divest the
employees of their vested and demandable right over existing benefits
voluntarily granted by their employer.
2. As regards the scope of the assumption powers of the Secretary of the
DOLE, the appellate court ruled that Sec. Sto. Tomas assumption of
jurisdiction powers should have been limited to the disagreement on
the ground rules of the collective bargaining negotiations. Declaring the
Secretary of the DOLE to have acted with grave abuse of discretion for
ruling on substantial matters or issues and not restricting itself merely
on the ground rules, the appellate court and UFE-DFA-KMU would have
us treat the subject labor dispute in a piecemeal fashion. Based on the
Notices of Strike filed by UFE-DFA-KMU, the Secretary of the DOLE
rightly decided on matters of substance. Further, it is a fact that during
the conciliation meetings before the NCMB, but prior to the filing of the
notices of strike, the parties had already delved into matters affecting
the meat of the collective bargaining agreement. The appellate courts
reliance on the statement of the representative of Nestle in ruling that
the labor dispute had yet to progress from the discussion of the ground
rules of the CBA negotiations is clearly misleading; hence, erroneous.
 
Nevertheless, granting for the sake of argument that the meetings undertaken
by the parties had not gone beyond the discussion of the ground rules, the issue
of whether or not the Secretary of the DOLE could decide issues incidental to
the subject labor dispute had already been answered in the affirmative.
Secretary Sto. Tomas correctly assumed jurisdiction over the questions
incidental to the current labor dispute and those matters raised by the
parties. In any event, the query as to whether or not the Retirement Plan is to be
included in the CBA negotiations between the parties ineluctably dictates upon
the Secretary of the DOLE to go into the substantive matter of the CBA
negotiations.
 
3. Lastly, the third issue pertains to the alleged reversible error
committed by the Court of Appeals in holding, albeit impliedly, Nestl
free and clear from any unfair labor practice. UFE-DFA-KMU argues
that Nestls refusal to bargain on a very important CBA economic
provision constitutes unfair labor practice.[52] It explained that Nestl
set as a precondition for the holding of collective bargaining
negotiations the non-inclusion of the issue of Retirement Plan. In its
words, respondent Nestl Phils., Inc. insisted that the Union should first
 agree that the retirement plan is not a bargaining issue before
respondent Nestl would agree to discuss other issues in the CBA.[53] It
then concluded that the Court of Appeals committed a legal error in not
ruling that respondent company is guilty of unfair labor practice. It also
committed a legal error in failing to award damages to the petitioner
for the ULP committed by the respondent.

Nestle is accused of violating its duty to bargain collectively when it purportedly

imposed a pre-condition to its agreement to discuss and engage in collective
bargaining negotiations with UFE-DFA-KMU. A meticulous review of the record
and pleadings of the cases at bar shows that, of the two notices of strike filed by
UFE-DFA-KMU before the NCMB, it was only on the second that the ground of
unfair labor practice was alleged. Worse, the 7 November 2001 Notice of Strike
merely contained a general allegation that Nestl committed unfair labor practice
by bargaining in bad faith for supposedly setting pre-condition in the ground
rules (Retirement issue).[56] On the contrary, Nestl, in its Position Paper, did
not confine itself to the issue of the non-inclusion of the Retirement Plan but
extensively discussed its stance on other economic matters pertaining to the
CBA.

Basic is the principle that good faith is presumed and he who alleges bad faith
has the duty to prove the same. By imputing bad faith unto the actuations of
Nestle, it was UFE-DFA-KMU, therefore, who had the burden of proof to present
substantial evidence to support the allegation of unfair labor practice. A perusal
of the allegations and arguments raised by UFE-DFA-KMU in the Memorandum
(in G.R. Nos. 158930-31) will readily disclose that it failed to discharge
said onus probandi as there is still a need for the presentation of evidence other
than its bare contention of unfair labor practice in order to make certain the
propriety or impropriety of the unfair labor practice charge hurled against
Nestl.

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.
101 109 SAMAHAN NG MANGGAGAWA SA TOP FORM MANUFACTURING v.
NLRC, Hon. De Vera and Top Form Manufacturing
G.R. No. 113856. September 7, 1998;
Bargainable issues; minutes of negotiation
Facts:
1. SMTFM was the certified collective bargaining representative of all regular
rank and file employees of respondent Top Form Manufacturing Inc.
2. At the CB negotiations at Milky Way Restaurant, Makati, the parties agreed
to discuss unresolved economic issues (wages): “Union proposed that any
future wage increase given by the government should be implemented by the
company across-the-board or non-conditional.”
3. Management requested the union to retain this provision since their
sincerity was already proven when the P25.00 wage increase was granted
across-the-board. The union acknowledged management’s sincerity but
they are worried that in case there is a new set of management, they can
just show their CBA. The union decided to defer this provision.
4. RTWPB-NCR issued Wage Order 1 granting an increase of 17php per day in
the salary of workers. This was followed by Wage Order 2 providing for a
12php daily increase in salary.
5. The union requested the implementation of said wage orders and
demanded that increase be on an across-the-board basis. Top Form refused
and instead implemented a scheme of increases purportedly to avoid wage
distortion.
6. Hence, Top Form granted the 17php increase to workers receiving 125 per
day and below. The 12php increase was granted to those receiving 140 per
day and below. For those receiving higher than 125 or 140, Top Form
granted an escalated increase ranging from 6.99 to 14.30 and 6 to 10,
respectively.
7. The union demanded that it should fulfill its pledge of sincerity by granting
the across-the-board wage increases. Union reiterated that it had agreed to
retain the old provision of CBA. Respondent still refused.
8. Union then filed a complaint with NLRC alleging that Top Form’s act of
reneging on its promise/undertaking constitutes an act of ULP through
bargaining in bad faith. Charged respondent with violation of Art 247 and
Art 100 of LC.
9. Top Form contended that its act is to avoid wage distortion. It also asserted
that there was no agreement to the effect that future wage increases
mandated by the government should be implemented on an across-the-
board basis. Otherwise, that agreement would have been incorporated and
expressly stipulated in the CBA.
10. The same CBA provided that during its effectivity, the parties “each
voluntarily and unqualifiedly waives the right, and each agrees that the
other shall not be obligated, to bargain collectively, with respect to any
subject or matter not specifically referred to or covered by this Agreement,
even though such subject or matter may not have been within the
knowledge or contemplation of either or both of the parties at the time they
negotiated or signed this Agreement.
11. LA: dismissed complaint for lack of merit. Union proposal was not adopted
in the existing CBA was due to the fact that it was the union itself which
decided for its deferment.
12. SMTFM appealed to NLRC.
13. NLRC dismissed appeal. MR also denied by NLRC.
ISSUE/S: WON respondent committed ULP in its refusal to grant across-the-
board wage increases.
HELD: NO. Petition dismissed. Resolutions affirmed.
RATIO:
1. If there was indeed a promise or undertaking on the part of private
respondent to obligate itself to grant an automatic across-the-board
wage increase, petitioner union should have requested or demanded
that such “promise or undertaking” be incorporated in the CBA.
a. 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.”
b. Article 252 also states that the duty to bargain “does not compel
any party to agree to a proposal or make any concession.”
c. 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.
2. The CBA is the law between the contracting parties which is impressed
with public interest.
a. Compliance with a CBA is mandated by the expressed policy to give
protection to labor.
b. It should be construed liberally, However, only provisions in the
CBA should be so interpreted and complied with.
i. Hence, petitioner union’s contention that the Minutes of
the collective bargaining negotiation meeting forms part of
the entire agreement is pointless.
ii. 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.
c. Moreover, 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.
d. Reliance in Kiok Loy v. NLRC is misplaced.
e. In the case at bench, pets simply assert that private respondent
committed “acts of unfair labor practices by virtue of its
 contractual commitment made during the collective bargaining
process.”
i. The mere fact, however, that the proposal in question was
not included in the CBA indicates that no contractual
commitment thereon was ever made by private respondent
as no agreement had been arrived at by the parties.
3. 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.
a. The adamant insistence on a bargaining position to the point where
the negotiations reach an impasse does not establish bad faith.
b. 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.
4. Top Form did not also violate Art 100 of LC on diminution of benefits
prohibition.
a. Article 100 of the Labor Code on prohibition against elimination or
diminution of benefits provides that “(n)othing in this Book shall
be construed to eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time of promulgation
of this Code”
b. Granted that private respondent had granted an across-the-board
increase pursuant to Republic Act No. 6727, that single instance
may not be considered an established company practice. Petitioner
union’s argument in this regard is actually tied up with its claim
that the implementation of Wage Orders Nos. 01 and 02 by private
respondent resulted in wage distortion.
102 Caltex Refinery Employees Association (CREA) v. Brillantes
Topic: Labor Code Procedure
Facts:
1. CREA and Caltex negotiated for the terms and conditions of their new CBA.
Despite meetings, both parties failed to reach any significant progress so the
petitioner declared a deadlock. Members opted for a walkout during a strike
vote and the DOLE assumed jurisdiction. Any strike and lockout is enjoined but
in defiance of the order, CREA began a strike and its officers refused to return to
work.
2. In the course of the strike, DOLE Undersecretary Laguesma interceded. He
was able to convince the members of the union to return to work. However,
because of the strike, Caltex terminated the employment of some officers of
petitioner union.
3. DOLE resolved the deadlock. The Order stated “the parties are directed to
execute a new collective bargaining agreement embodying therein the
appropriate dispositions above spelled out including those subject of previous
agreements. Provisions in the old CBA, or existing benefits subject of Company
policy or practice not otherwise modified or improved herein are deemed
maintained. New demands not otherwise touched upon or disposed of are
hereby denied. Moreover, pursuant to the Agreement reached by the parties on
13 September 1995 for this Office to commence the proceedings concerning the
legality of strike and the termination of the union officers, after the resolution of
the CBA issues, both parties are hereby directed to submit their position papers
and evidence within ten (10) days from receipt of a copy of this Order.”
Issues:
Petitioner: does not specifically pinpoint the issues but it appears that
petitioner questions public respondent’s resolution
Private respondent: “Whether or not the Honorable Secretary of Labor and
Employment committed grave abuse of discretion in resolving the instant labor
dispute.”
Ruling: The petition is partly meritorious.
There are 5 issues: wage increase, union security clause, new retirement plan,
grievance machinery and arbitration, and signing bonus
1. Issue re: Wage Increase- The age-old general rule governing relations between
labor and capital, or management and employee, is “a fair day’s wage for a fair
day’s work.” If no work is performed by the employee, there can be no wage or
pay unless, of course, the laborer was ready, willing and able to work but was
locked out, dismissed, suspended or otherwise illegally prevented from
working. True, union members have the right to demand wage increases
through their collective force; but it is equally cogent that they should also be
able to justify an appreciable increase in wages.
2. Union Security Clause - The disagreement between petitioner and private
respondent on the union security clause should have been definitively resolved
by DOLE. The labor secretary should take cognizance of an issue which is not
merely incidental to but essentially involved in the labor dispute itself, or which
is otherwise submitted to him for resolution. In this case, the parties have
submitted the issue of the union security clause for public respondent’s
disposition. But the secretary of labor has given no valid reason for avoiding the
said issue; he merely points out that this issue is a procedural matter. Such
vacillation clearly sidesteps the nature of the union security clause as one
intended to strengthen the contracting union and to protect it from the
fickleness or perfidy of its own members. Without such safeguard, group
solidarity becomes uncertain; the union becomes gradually weakened and
increasingly vulnerable to company machinations. In this security clause lies the
strength of the union during the enforcement of the collective bargaining
agreement.
3. New Retirement Plan – DOLE did not commit grave abuse of discretion in
respecting the free and voluntary decision of the employees in regard to the
Provident Plan and the irrevocable one-time option provided for in the New
Retirement Plan. Although the union has every right to represent its members
in the negotiation regarding the terms and conditions of their employment, it
cannot negate their wishes on matters which are purely personal and individual
to them. In this case, the forty employees freely opted to be covered by the Old
Plan; their decision should be respected. The company gave them every
opportunity to choose, and they voluntarily exercised their choice. The union
cannot pretend to know better; it cannot impose its will on them.
4. Grievance Machinery and Arbitration (TOPIC)
DOLE’s contested resolution on “grievance and arbitration machineries” -
Seventh, we are constrained to take a closer look at the existing procedure
concerning grievance in relation to the modifications being proposed by the
Union. In this regard, we affirm our resolution to shorten the periods to
process/resolve grievances based on existing practice from (45) days to (30) days
at the first step and (10) days to seven (7) days at the second step which is the
level of the VP for manufacturing. We further reviewed the steps through which a
grievance may be processed and in line with the principle to expedite the early
resolution of grievances, we find that the establishment of a joint Council as an
additional step in the grievance procedure, may only serve to protract the
proceeding and, therefore, no longer necessary. Instead, the unresolved grievance,
if, not settled within (7) days at the level of the VP for Manufacturing, shall
automatically be referred by both parties to voluntary arbitration in accordance
with R.A. 6715. As to the number of Arbitrators for which the Union proposes to
employ only one instead of a panel of three Arbitrators, we find it best to leave the
matter to the agreement of both parties. Finally, we hereby advise the parties that
the list of accredited voluntary arbitrators is now being maintained and
disseminated by the National Conciliation and Meditation Board and no longer by
the Bureau of Labor Relations.”
Petitioner: contends that DOLE “derailed the grievance and arbitration scheme
proposed by the Union.”
Caltex: the disposition on the grievance machinery is likewise “fair and
reasonable under the circumstances and in fact was merely a reiteration of the
(u)nion’s position during the conciliation meetings conducted by
[40]
Undersecretary Bienvenido Laguesma.”
SC: No particular setup for a grievance machinery is mandated by law.
Rather, Article 2601 of the Labor Code, as incorporated by RA 6715, provides for
only a single grievance machinery in the company to settle problems arising
from “interpretation or implementation of their collective bargaining agreement
and those arising from the interpretation or enforcement of company personnel
policies.”
We believe that the procedure described by public respondent sufficiently
complies with the minimum requirement of the law. Public respondent even
provided for two steps in hearing grievances prior to their referral to
arbitration. The parties will decide on the number of arbitrators who may hear
a dispute only when the need for it arises. Even the law itself does not specify
the number of arbitrators. Their alternatives – whether to have one or three
arbitrators – have their respective advantages and disadvantages. In this
matter, cost is not the only consideration; full deliberation on the issues is
1 Article 260. Grievance Machinery and Voluntary Arbitration. The parties to a Collective Bargaining Agreement shall
include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a
machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their
Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel
policies. All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from
the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining
Agreement.
For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary
Arbitrators or panel of voluntary arbitrators, include in the agreement a procedure for the selection of such Voluntary
Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited
by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall
designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection
procedure agreed upon in the Collective Bargaining Agreement, which shall act with same force and effect as if the
Arbitrator or panel of Arbitrators has been selected by the parties as described above.”
another, and it is best accomplished in a hearing conducted by three arbitrators.
In effect, the parties are afforded the latitude to decide for themselves the
composition of the grievance machinery as they find appropriate to a particular
situation. At bottom, we cannot really impute grave abuse of discretion to public
respondent on this issue.
5. Signing Bonus- The parties acknowledge that during the negotiations which
resulted in the execution of this Agreement, each of them had the unlimited
opportunity to make demands and proposals with respect to any and all
subjects and matters proper for collective bargaining and not prohibited by law;
and the parties further acknowledge that the understandings and agreements
arrived at by them after the exercise of that right and unlimited opportunity are
fully set forth in this Agreement. Therefore, the COMPANY and the UNION
during the life of this Agreement, each voluntarily and unqualifiedly waives the
right and each agrees that the other shall not be obligated to bargain collectively
with respect to any subject or matter referred to or covered in this Agreement
or with respect to any subject or matter not specifically referred to or covered
in this Agreement even though such subject or matter may not have been within
the knowledge or contemplation of either or both parties at the time they
negotiated or signed this Agreement.”
103 J. TABIGUE v. INTERNATIONAL COPRA EXPORT CORPORATION
(INTERCO)
G.R. No. 183335 December 23, 2009
FACTS:
 Juanito Tabigue and his 19 co-petitioners, all employees of respondent
International Copra Export Corporation (INTERCO), filed a Notice of
Preventive Mediation with the Department of Labor and Employment –
National Conciliation and Mediation Board (NCMB) Davao against
INTERCO for violation of Collective Bargaining Agreement and failure
to sit on the grievance conference/meeting.
 As the parties failed to reach a settlement before the NCMB, petitioners
requested to elevate the case to voluntary arbitration. The NCMB thus
set a date for the parties to agree on a Voluntary Arbitrator.
 Before the parties could finally meet, INTERCO presented a letter from
the Union president, Mr. Tan saying that the petitioners are not duly
authorized by Union board to represent the Union.
 Petitioners soon sent union president Tan and respondent’s plant
manager Tangente a Notice to Arbitrate
 The parties having failed to arrive at a settlement, NCMB Director
Yosores wrote petitioner and plant manager of the lack of willingness
of both parties to submit to voluntary arbitration, which willingness is a
pre-requisite to submit the case thereto; and that under the CBA forged
by the parties, the union is an indispensable party to a voluntary
arbitration but that since Tan informed respondent that the union had
not authorized petitioners to represent it, it would be absurd to bring
the case to voluntary arbitration. He ruled that the demand of to submit
the issues to voluntary arbitration CAN NOT BE GRANTED. He thus
advised petitioners to avail of the compulsory arbitration process to
enforce their rights.
 On MR by petitioners, NCMB ruled that the NCMB “has no rule-making
power to decide on issues, NCMB only facilitates settlement among the
parties to labor disputes.”
 Petitioners appealed with the CA which was dismissed, ruling that
there is nonpayment of docket, fees, lack of verification, incomplete
signatures in the verification, non-attachment of the assailed decision
and that NCMB being not a quasi judicial agency, its decisions are not
appealable by Rule 43.
ISSUE: Whether the workers, without the union, may submit issues to
voluntary arbitration? NO
HELD: NO. As per CBA, in case of any dispute arising from the interpretation or
implementation of CBA Agreement or any matter affecting the relations of
Labor and Management, the UNION and the COMPANY agree to exhaust all
possibilities of conciliation through the grievance machinery. The committee
shall resolve all problems submitted to it within fifteen days after the problems
have been discussed by the members. If the dispute or grievance cannot be
settled by the Committee, or if the committee failed to act on the matter within
the period of fifteen days, the UNION and the COMPANY agree to submit the
issue to Voluntary Arbitration.
The decision of the Arbitrator shall be final and binding upon the parties.
However, the Arbitrator shall not have the authority to change any provisions of
the Agreement. The cost of arbitration shall be borne equally by the parties.
Petitioners have not, however, been duly authorized to represent the union.
Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or
designate their respective representatives to the grievance machinery and if the
grievance is unsettled in that level, it shall automatically be referred to the
voluntary arbitrators designated in advance by parties to a CBA. Consequently
only disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators.
104 NUWHRAIN-APL-IUF DUSIT HOTEL NIKKO CHAPTER V. CA
FACTS:
1. The Union is the CBA of the rank and file employees of Dusit Hotel
a. A five star hotel located in Makati
b. Owned by Philippine Hoteliers, Inc.
2. Fujimoto (general manager) and Alves (director of human resources) were
impleaded in their official capacitates
3. Union submitted its CBA negotiation to the hotel
4. They failed to arrive at mutually acceptable terms and conditions –
deadlock
5. Union filed notice of strike with National Conciliation and Mediation Board
(NCMB)
a. Conciliation hearings were unsuccessful
6. Strike vote was conducted – it was decided that the Union would strike
7. Union held a general assembly at its office basement
a. Some members sported closely cropped hair or cleanly shaven
heads
8. The next day, more male Union members came to work sporting the same
hairstyle
9. Hotel prevented theses workers from entering the hotel; they violated the
Hotel’s grooming standards
10. Union stages a picket outside the hotel premises
11. Later, other workers were also prevented from entering the hotel causing
them to join the picket
The labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be the
exclusive representative of the employees in such unit for the purpose of
collective bargaining. However, an individual employee or group of
employees shall have the right at any time to present grievances to their
employer.” But the right of any employee or group of employees to, at any
time, present grievances to the employer does not imply the right to
submit the same to voluntary arbitration.
*jurisdiction issue: Considering that NCMB is not a quasi-judicial agency
exercising quasi-judicial functions but merely a conciliatory body for the
purpose of facilitating settlement of disputes between parties, its decisions or
that of its authorized officer cannot be appealed either through a Petition for
Review under Rule 43 or under Rule 65 of the Revised Rules of Court. The
petition is DENIED.
12. Hotel experienced severe lack of manpower which forced them to
temporarily cease operations in three restaurants
13. Hotel issued notices preventively suspending the union members
a. Violation of duty to bargain
b. Illegal picket
c. ULP
d. Violation of hotel’s grooming standard
e. Illegal strike
f. Commission of illegal acts during illegal strike
14. Union filed with NCMB a second notice of strike on the ground of ULP and
violation of the Labor Code on illegal lockout
15. Meanwhile, the union submitted their explanations to the charges alleged
by the hotel, they continued to stage a picket inside the hotel’s compound
16. Hotel terminated the services of:
a. 29 union officers
b. 61 members
17. Suspended 88 employees
18. Union declared a strike
a. Engaged in picketing at the premises of the hotel
b. Unlawfully blocked the ingress and egress of the hotel
19. Union filed its third notice of strike with NCMB on the ground of ULP and
union-busting
20. SOLE assumed jurisdiction and certified the case to the NLRC for
compulsory arbitration
a. Hotel to reinstate the workers (payroll reinstatement)
21. Hotel directed some to return to work while others were not but they were
 placed under payroll reinstatement
22. Unhappy with the SOLE’s order, the Union moved for reconsideration –
denied
23. Union filed pet cert with CA
24. Meanwhile, NLRC ordered hotel and Union to execute CBA within 30 days
from receipt of decision
a. There was an illegal strike in which illegal acts were committed
BECAUSE IT FAILED TO COMPLY WITH THE MANDATORY 30-DAY
PERIOD AND THE SEVEN_DAY STRIKE BAN COOLING-OFF as the
strike occurred only 29 days after submission of the notice of strike
and only 4 days after submission of the strike vote
b. Strike violated the “no strike, no lockout” provision of the CBA
25. Union filed MR with NLRC – denied
26. Union filed pet cert with CA
27. CA dismissed the petition in fact no. 23
28. CA affirmed NLRC regarding fact no. 26
ISSUE: Whether or not the union conducted an illegal strike. YES.
RATIO:
 Payroll reinstatement was valid, It is obviously impracticable for the Hotel
to actually reinstate the employees who shaved their heads or cropped
their hair because this was exactly the reason they were prevented from
working in the first place
 In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. NLRC, we
cited the various categories of an illegal strike, to wit:
o When it is contrary to a specific prohibition of law, such as strike by
employees performing governmental functions; or
o When it violates a specific requirement of law[, such as Article 263
of the Labor Code on the requisites of a valid strike]; or
o When it is declared for an unlawful purpose, such as inducing the
employer to commit an unfair labor practice against non-union
employees; or
o When it employs unlawful means in the pursuit of its objective,
such as a widespread terrorism of non-strikers [for example,
prohibited acts under Art. 264(e) of the Labor Code]; or
o When it is declared in violation of an existing injunction[, such as
injunction, prohibition, or order issued by the DOLE Secretary and
the NLRC under Art. 263 of the Labor Code]; or
o When it is contrary to an existing agreement, such as a no-strike
clause or conclusive arbitration clause
 The Union is liable for conducting illegal strike for the following reasons:
o Violation of hotel’s grooming standards
 Union's concerted violation of the Hotel's Grooming
Standards which resulted in the temporary cessation and
disruption of the Hotel's operations is an unprotected act
and should be considered as an illegal strike.
o Violated the CBA's "No Strike, No Lockout" provision
o Violated the Union's duty and responsibility to bargain in good
faith
 Violated LC which prohibits the commission of any act
which will disrupt or impede the early settlement of the
labor disputes that are under conciliation
o Union failed to observe the mandatory 30-day cooling-off period
and the seven-day strike ban
o Union committed illegal acts in the conduct of its strike
 Formed human barricades and obstructed the driveway of
the Hotel. There is no merit in the Union's argument that it
was not its members but the Hotel's security guards and
the police officers who blocked the driveway (shown by
pictures)
 Clearly, the 29 Union officers may be dismissed. LC - "any union officer who
knowingly participates in an illegal strike." We, however, are of the opinion
that there is room for leniency with respect to the Union members
o Hotel was able to prove that the strikers blocked the ingress to and
egress from the Hotel. But it is quite apparent that the Hotel failed
to specifically point out the participation of each of the Union
members
 Union members who participated in an illegal strike but were not identified
to have committed illegal acts are entitled to be reinstated to their former
positions but without backwages
105 P.I. MANUFACTURING, INCORPORATED, vs. P.I. MANUFACTURING
SUPERVISORS AND FOREMAN ASSOCIATION and the NATIONAL LABOR
UNION
G.R. No. 167217, February 04, 2008
Topic: Duty to Bargain

FACTS:
Petitioner P.I. Manufacturing, Incorporated is a domestic corporation engaged
in the manufacture and sale of household appliances. Respondent P.I.
Manufacturing Supervisors and Foremen Association (PIMASUFA) is an
organization of petitioner’s supervisors and foremen, joined in this case by its
federation, the National Labor Union (NLU).
December 10, 1987, R.A. No. 6640 was passed providing an increase in the
statutory minimum wage and salary rates of employees and workers in the
private sector, to which it is increased by P10.00 per day, except non-
agricultural workers and employees outside Metro Manila who shall receive an
increase of P11.00 per day: Provided, That those already receiving above the
minimum wage up to P100.00 shall receive an increase of P10.00 per
day. Excepted from the provisions of this Act are domestic helpers and persons
employed in the personal service of another.
December 18, 1987, petitioner and respondent PIMASUFA entered into a new
CBA (1987 CBA) whereby the supervisors were granted an increase of P625.00
per month and the foremen, P475.00 per month. The increases were made
retroactive to May 12, 1987, or prior to the passage of R.A. No. 6640, and every
year thereafter until July 26, 1989.
January 26, 1989, respondents PIMASUFA and NLU filed a complaint with NLRC
charging petitioner with violation of R.A. No. 6640. Respondents attached to
their complaint a numerical illustration of wage distortion resulting from the
implementation of R.A. No. 6640.
LA favored respondents ordering Petitioner to give members of respondent
PIMASUFA wage increases equivalent to 13.5% of their basic pay they were
receiving prior to December 14, 1987. On appeal by petitioner, the NLRC
affirmed
LA’s judgment. Petitioner filed a petition for certiorari with Court. However, SC
referred the petition to CA. CA affirmed the Decision of the NLRC with
modification by raising the 13.5% wage increase to 18.5%. M.R. was denied.
Petitioner went to SC but it favored respondents. Hence this MR.
ISSUES:
1. Whether the implementation of R.A. No. 6640 resulted in a wage distortion
2. Whether such distortion was cured or remedied by the 1987 CBA.
RULING:
1. Yes. R.A. No. 6727, otherwise known as the Wage Rationalization Act,
explicitly defines“wage distortion”as: “a situation where an increase in
prescribed wage rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates 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.”
Otherwise stated, wage distortion means the disappearance or virtual
disappearance of pay differentials between lower and higher positions in an
enterprise because of compliance with a wage order. The increase in the wage
rates by virtue of R.A. No. 6640 resulted in wage distortion or the elimination of
the intentional quantitative differences in the wage rates of the supervisor
employees of petitioner.
2. Yes. Wage distortions were cured or remedied when respondent PIMASUFA
entered into the 1987 CBA with petitioner after the effectivity of R.A. No. 6640.
The 1987 CBA increased the monthly salaries of the supervisors by P625.00 and
the foremen, by P475.00, effective May 12, 1987. These increases re
established and broadened the gap, not only between the supervisors and the
foremen, but also between them and the rank-and-file employees. Significantly,
the 1987 CBA wage increases almost doubled that of the P10.00 increase under
R.A. No. 6640.
The P625.00/month means P24.03 increase per day for the supervisors, while
the P475.00/month means P18.26 increase per day for the foremen. Such gap as
re-established by virtue of the CBA is more than a substantial compliance with
R.A. No. 6640. CA erred in not taking into account the provisions of the CBA. The
provisions of the CBA should be read in harmony with the wage orders, whose
benefits should be given only to those employees covered thereby.
To require petitioner to pay all the members of respondent PIMASUFA a wage
increase of 18.5%, over and above the negotiated wage increases provided
under the 1987 CBA, is highly unfair and oppressive to the former. It was not
the intention of R.A. No. 6640 to grant an across-the-board increase in pay to all
the employees of petitioner. Only those receiving wages P100.00 and below are
entitled to the P10.00 wage increase. The apparent intention of the law is only
to upgrade the salaries or wages of the employees specified therein. Almost all
of the members of respondent PIMASUFA have been receiving wage rates above
P100.00 and, therefore, not entitled to the P10.00 increase. Only 3 of them are
receiving wage rates below P100.00, thus, entitled to such increase.
To compel employers simply to add on legislative increases in salaries or
allowances without regard to what is already being paid, would be to penalize
employers who grant their workers more than the statutory prescribed
minimum rates of increases. Clearly, this would be counter-productive so far as
securing the interests of labor is concerned.
It must be stressed that a CBA constitutes the law between the
parties when freely and voluntarily entered into it has not been shown that
respondent PIMASUFA was coerced or forced by petitioner to sign the 1987
CBA. All of its 13 officers signed the CBA with the assistance of respondent NLU.
They signed it fully aware of the passage of R.A. No. 6640. The duty to bargain
requires that the parties deal with each other with open and fair
minds. Respondents cannot invoke the beneficial provisions of the 1987
CBA but disregard the concessions it voluntary extended to petitioner. The
goal of collective bargaining is the making of agreements that will stabilize
business conditions and fix fair standards of working conditions.
Respondents’ posture contravenes this goal.
WHEREFORE, we GRANT petitioner’s MR.
106 Colegio De San Juan De Letran vs. Association of Employees and
Faculty of Letran (AEFL)G.R. No. 141471. September 18, 2000.
Topic: Duty to Bargain
FACTS:
1. In December 1992, then President of the union Salvador Abtria initiated the
renegotiation of its CBA with Letran for the last 2 years of the CBA’s 5 year
lifetime from 1989 to 1994. On the same year, an election for the new set of
officers was held, with Eleanor Ambas emerging as the new President.
2. Ambas wanted to continue the renegotiation of the CBA but Letran claimed
that the CBA was already prepared for signing. The CBA was submitted for
referendum, which was subsequently rejected by the members of the union.
Letran then accused the union for bargiaining in bad faith before the NLRC. LA
ruled in favor of Letran, but NLRC reversed the decision.
3. In January 1996, the union notified NCMB of its intention to strike due to
Letran’s refusal to collectively bargain. The parties subsequently agreed to
disregard the unsigned CBA and start to negotiate for a new CBA starting 1994-
1999. The union submitted its proposal, which then was allegedly forwarded to
the Board of Trustees of Letran.
4. On February 15, 1996, Ambas was informed thru a letter that her work
schedule has been changed – from Mon to Fri to Tues to Sat. Ambas protested
and requested to submit the issue to a grievance machinery under the old CBA.
This was unacted upon.

5. The union submitted its notice of strike. The parties met before the NCMB to
discuss the rules for negotiation, but after this, Ambas was dismissed for her
alleged insubordination. During the period of negotiations, Letran stopped
negotiating on the ground that it learned that a new group of employees had
filed a petition for certification election.
6. On June 18, 1996, the union finally struck. SOLE assumed jurisdiction;
ordered the return to work and was readmitted by Letran, except for Ambas.
The union now alleged ULP. SOLE ruled in favor of the union.
ISSUE: WON Letran is guilty of ULP by refusing to bargain with the union – YES
HELD:
Article 252 of the LC provided the requirement on both parties of the
performance of the mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement. AEFL
lived up to this requisite when it presented its proposals for the CBA to Letran.
On the other hand, Letran devised ways and means in order to prevent the
negotiation.
Letran’s utter lack of interest in bargaining with the union is obvious in its
failure to make a timely reply to the proposals presented by the latter. More
than a month after the proposals were submitted by the union, Letran still had
not made any counter-proposals. This inaction on the part of Letran prompted
the union to file its second notice of strike on March 13, 1996. Letran 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 LC governing the procedure in collective
bargaining, which provides that “X x x (a) When a party desires to negotiate an
agreement, it shall serve a written notice upon the other party with a statement
of its proposals. The other party shall make a reply thereto not later than ten (10)
calendar days from receipt of such notice.”
As the Court 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 this case, Letran’s actuation show a lack of sincere desire to
negotiate rendering it guilty of ULP.
Moreover, the series of events that transpired after the filing of the first notice
of strike show Letran’s resort to delaying tactics to ensure that negotiation
would not push through. Thus, on February 15, 1996, or barely a few days after
the union proposals for the new CBA were submitted, the union president was
informed by her superior that her work schedule was being changed from Mon
to Fri to Tues to Sat. A request from the union president that the issue be
submitted to a grievance machinery was subsequently denied. Thereafter,
Letran and the union met on March 27, 1996 to discuss the ground rules for
negotiation. However, just two days later, or on March 29, 1996, Letran
dismissed the union president for alleged insubordination. In its final attempt to
thwart the bargaining process, Letran suspended the negotiation on the ground
that it allegedly received information that a new group of employees called the
Association of Concerned Employees of Colegio (ACEC) had filed a petition for
certification election. Clearly, Letran tried to evade its duty to bargain
collectively.
Letran argues that since it has already submitted the union’s proposals to the
Board of Trustees and that a series of conferences had already been undertaken
to discuss the ground rules for negotiation such should already be considered as
acts indicative of its intention to bargain. As pointed out earlier, the evidence on
record belie the assertions of Letran.

107 FACULTY ASSOCIATION OF MAPUA v. CA
Duty to Bargain
FACTS:
1. In July 2000, Mapua Institute of Technology (MIT) hired Arthur Andersen to
develop a faculty ranking and compensation system. MIT presented the new
faculty ranking instrument to FAMIT (the Union).
2. FAMIT agreed to the adoption and implementation of the instrument, with
the reservation that there should be no diminution in rank and pay of the
faculty members.
3. On April 17, 2001, the union and MIT entered into a new CBA. It
incorporated the new faculty ranking system with the stipulation that there
shall be no diminution in the existing rank and the policy ‘same rank, same
pay’ shall apply
4. When the CBA took effect, the Vice President for Academic Affairs issued a
memorandum to all deans and subject chairs to evaluate and re-rank the
faculty under their supervision using the new ranking instrument. Eight
factors were considered: educational attainment, professional honors
received, relevant training, relevant professional experience, scholarly work
and creative efforts, award winning works, officership in relevant technical
and professional organizations, and administrative positions held at MIT.
5. After a month, MIT called FAMIT’s attention to what it perceived to be flaws
or omissions in the CBA. MIT called for an amendment in the Annexes
containing the ranking sheet of the faculty. FAMIT rejected the proposal. It
said that these changes would constitute a violation of the ratified 2001
CBA and result in the diminution of rank and benefits of FAMIT college
faculty. It argued that the proposed amendment in the ranking system for
the college faculty revised the point ranges earlier agreed upon by the
parties and expands the 19 faculty ranks to 23.
6. Meanwhile, MIT instituted curriculum changes that resulted in changes in
the number of hours for certain subjects
7. MIT adopted a new formula for determining the pay rates of the high school
faculty: Rate/Load x Total Teaching Load = Salary where total teaching load
equals number of classes multiplied by hours of service per week divided by 3
hours
8. FAMIT also opposed the formula. Also unknown to FAMIT was the fact that
MIT has not been implementing relevant provisions in the 2001 CBA,
specifically pertaining to a ‘rate per load’ according to rank policy
9. MIT maintained that it was within its right to change the pay formula used.
10. FAMIT brought the matter to the National Conciliation and Mediation Board
for mediation.
11. The Panel of Voluntary Arbitrators ruled in favor of the petitioner. CA
reversed, hence the petition.
ISSUE: WON MAPUA may alter, change, or modify unilaterally the provisions of
the CBA.
HELD: NO. Petition granted.
RATIO:
1. The new point range system proposed by MIT is an unauthorized
modification of the CBA. It is made up of a faculty classification that is
substantially different from the one originally incorporated in the current
CBA between the parties.
2. Thus, the proposed system contravenes the existing provisions of the CBA,
hence, violative of the law between the parties.
3. As observed by the Office of the Voluntary Arbitrators, the system gives
more weight to tenure and faculty load such that the system can lead to a
demotion in rank for a faculty member.
4. Art. 253 [259] of the Labor Code states that it shall be the duty of both parties
to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a
new agreement is reached by the parties
5. Until a new CBA is executed, the parties are duty bound to keep the status
quo. The law does not provide for any exception nor qualification on which
economic provisions of the existing agreement are to retain its force and
effect. Therefore, it must be understood as encompassing all the terms and
conditions in the said agreement.
6. The CBA constitutes the law between the parties. The CBA is the norm of
conduct between petitioner and private respondent and compliance
therewith is mandated by the express policy of the law.
7. RE: the imposition of the new formula
 It is clear from the provisions of the 2001 CBA that the salary of a
high school faculty member is based on a rate per load and not on a
rate per hour basis.
 Thus, there is no room for unilateral change.
  The labor code is clear that in case of doubt in the interpretation of 9. The lower court ordered the company to deliver the sum of money to
provisions affecting labor, such should be interpreted in favor of ALU for distribution to the members of MWU their corresponding
labor. CA committed a grave error in the interpretation of the CBA shares.
provision and the governing law. 10. ALU filed an appeal. According to ALU, the LC did nothing except to
require literal compliance with the terms of the CBA.
ISSUE:

1. Whether ALU and Cebu Shipyard violated the CBA- YES

2. Whether ALU represent only its members and not the entire workforce-
NO

HELD:

 The terms and conditions of a collective bargaining contract constitute

the law between the parties. Those who are entitled to its benefits can
108 Mactan Workers Union v. Aboitiz G.R. No. L-30241 June 30, 1972. invoke its provisions. In the event that an obligation therein imposed is
Fernando, J. Topic: Collective Bargaining Agreement; Beneficiaries not fulfilled, the aggrieved party has the right to go to court for
redress.  
FACTS:  It is a well-settled doctrine that the benefits of a collective bargaining
agreement extend to the laborers and employees in the collective
1. The employees of Cebu Shipyard & Engineering Works, Inc. belong to bargaining unit, including those who do not belong to the chosen
two rival labor union. 72 EEs are from Mactan Workers Union (Mactan bargaining labor organization.  Any other view would be a
Union) and the rest of the EEs are members of Associated Labor Union discrimination on which the law frowns. It is appropriate that such
(ALU). should be the case.
2. Cebu Shipyard and ALU entered into a CBA, Cebu Shipyard agreed to  The labor union that gets the majority vote as the exclusive bargaining
give a profit-sharing bonus to its EEs and laborers to be taken from representative does not act for its members alone. It represents all the
10% of its net income. employees in such a bargaining unit. It is not to be indulged in any
3. The bonus is payable in 2 installments (March and June), in proportion attempt on its part to disregard the rights of non-members. Yet that is
to their salaries. what intervenor labor union was guilty of, resulting in the complaint
4. Cebu Shipyard will pay the profit sharing bonus to ALU. ALU has the filed on behalf of the laborers, who were in the ranks of plaintiff Mactan
duty to deliver the bonus to the EEs and the laborers. If there are Labor Union.
undistributed bonus, ALU should return it to Cebu Shipyard.
5. The first and second installment for the year was delivered to ALU.
However, the members of Mactan Union failed to receive their shares in
the 2nd installment because they don't like to go to the office of ALU to
collect their share.
6. In accordance with the CBA, the uncollected shares of Mactan Union
Members were returned to Cebu Shipyard. At the same time, the
Company was advised by ALU not to deliver the amount to members of
Mactan Union unless ordered by the Court, otherwise ALU will take
such step to protect its members.
7. Because of the warning from ALU, the company deposited the amount
of P4,035.82 with the Labor Administrator.
8. Mactan filed a case with the lower court to recover the amount.
110 NORKIS FREE AND INDEPENDENT WORKERS UNION, Petitioner, vs.
NORKIS TRADING COMPANY, INC. Respondent.
G.R. No. 157098; June 30, 2005
TOPIC: The CBA: Interpretation, Administration and Enforcement

FACTS:
1. On January 27, 1998, a Memorandum of Agreement was forged
between the parties wherein Norkis Trading Corp shall grant a salary
increase to all regular and permanent employees as follows:
a. Ten pesos per day increase effective August 1, 1997;
b. Ten pesos per day increase effective August 1, 1998. On March
10, 1998
2. The RTWPB of Region VII issued Wage Order ROVII-06 which
established the minimum wage of P165.00, by mandating a wage
increase of five (P5.00) pesos per day beginning April 1, 1998, thereby
raising the daily minimum wage to P160.00 and another increase of five
(P5.00) pesos per day beginning October 1, 1998, thereby raising the
daily minimum wage to P165.00 per day.
3. In accordance with the Wage Order and Section 2, Article XII of the CBA,
petitioner demanded an across-the-board increase.
4. Respondent, however, refused to implement the Wage Order, insisting
that since it has been paying its workers the new minimum wage of
P165.00 even before the issuance of the Wage Order, it cannot be made
to comply with said Wage Order.

ISSUE: Whether respondent violated the CBA in its refusal to grant its
employees an across-the-board increase as a result of the passage of Wage
Order No. ROVII-06? (NO)

HELD:

 The employees are not entitled to the claimed salary increase, simply
because they are not within the coverage of the Wage Order, as they
were already receiving salaries greater than the minimum fixed by the
Order.

 We cannot sustain petitioner, even if we assume that its contention is

right and that the implementation of any government-decreed increase
under the CBA is absolute.

 The CBA is no ordinary contract, but one impressed with public

interest. Therefore, it is subject to special orders on wages, such as
those issued by the RTWPB. the implementation of a wage increase
for respondents employees should be controlled by the stipulations of
 Wage Order No. ROVII-06.

 Concededly, there is an increase necessarily resulting from raising the

minimum wage level, but not across-the-board. Indeed, a “double
burden” cannot be imposed upon an employer except by clear
provision of law. It would be unjust, therefore, to interpret Wage Order
No. ROVII-06 to mean that respondent should grant an across-the-
board increase. Such interpretation of the Order is not sustained by its
text

111 University of San Agustin Inc v. University of San Agustin Employees

Petition is DENIED.
Union-FFW

Facts:
1. The University entered into a CVA with respondent USAU-FFW effective
for 5 years from July 2000-2005.
2. The parties agreed to include a provision on salary increases based on
the incremental tuition fee increases or tuition incremental proceeds
(TIP) and pursuant to RA 6728.

Section 3. Salary Increases.·The following shall be the increases under this

Agreement.
SY 2000-2001·P2,000.00 per month, across the board.
SY 2001-2002·P1,500.00 per month or 80% of the TIP, whichever is higher,
across the board.
SY 2002-2003·P1,500.00 per month or 80% of the TIP, whichever is higher,
across the board.

3. On the SY 2001-2002, the parties disagreed on the computation of the

salary increase.
a. petitioner proposed across-the-board salary increase of P1,500
per month and its subtraction from the computation of the TIP
of the scholarships and tuition fee discounts it grants to
deserving students and its employees and their dependents.
b. Petitioner’s interpretation of the term “salary increases” as
referring not only to the increase in salary but also to
corresponding increases in other benefits.
c. Respondent argued that the provision in question referred to
“salary increases” alone, hence, the phrase “P1,500.00 or 80%
of the TIP, whichever is higher,” should apply only to salary
increases and should not include the other increases in
benefits received by employees.
4. Having failed to the existing grievance machinery, the parties agreed to
submit the case to voluntary arbitration (VA)
5. VA found for respondent, holding that the salary increase shall be paid
 out of the 80% of the TIP should the same be higher than 1,500.
Further, the CBA is the law between the parties, hence it should be
respected.
a. As to petitioner’s deduction of scholarship grants and tuition
fee discounts from the TIP, the VA ruled that it is invalid,
petitioner having waived the collection thereof when it granted
the same·a waiver which its employees had nothing to do
with·and the employees should not be made to bear or suffer
from the burden.
6. CA sustained VA’s interpretation of the CBA but reversed its findings on
the TIP computation. CA held that is should be literally mean that 80%
of the TIP or 1,500 whichever is higher, is to be allotted for the EE’s
salary increases.
7. Hence this petition
a. Petitioner maintained that the provision of the CBA, since RA
6728 only mandates that 70% of the TIP of academic
institution is to be set aside for EE’s salaries, allowances, and
other benefits, while at least 20% is to go to the improvement,
modernization of buildings equipment, libraries and other
school facilities.
b. That the interpretation of the provision that 80% of the TIP
should go to salary increases alone is contrary to RA 6728
c. Hence the RA is the law between the parties and not the CBA
Art. 252 of the Labor Code is clear on the matter:
ART. 252. Meaning of duty to bargain collectively.·The duty to bargain
collectively means the performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours, of work and all other
terms and conditions of employment including proposals for adjusting any
grievances or questions arising under such agreement and executing a contract
incorporating such agreements if requested by either party but such duty does
not compel any party to agree to a proposal or to make any concession.
The records are thus bereft of any showing that petitioner had made it clear
during the CBA negotiations that it intended to source not only the salary
increases but also the increases in other employee benefits from the 80% of the
TIP. Absent any proof that petitioner’s consent was vitiated by fraud, mistake or
duress, it is presumed that it entered into the CBA voluntarily, had full
knowledge of the contents thereof, and was aware of its commitments under the
contract.

Issue: WON the 80% is allotted to the salary increase alone

Held: YES

Ratio:
It is a familiar and fundamental doctrine in labor law that the CBA is the law
between the parties and they are obliged to comply with its provisions. If the
terms of a contract, in this case the CBA, are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of their stipulations shall
control.

A reading of the above-quoted provision of the CBA shows that the parties
agreed that 80% of the TIP or at the least the amount of P1,500 is to be allocated
for individual salary increases.

The CBA does not speak of any other benefits or increases which would be
covered by the employees’ share in the TIP, except salary increases.

In the present case, petitioner could have, during the CBA negotiations, opposed
the inclusion of or renegotiated the provision allotting 80% of the TIP to salary
increases alone, as it was and is not under any obligation to accept respondent’s
demands hook, line and sinker.

112 Pantranco North Express v. NLRC
GR 95940, July 24, 1996
Facts:
 Pantranco hired Urbano Suñ iga as a bus conductor in 1964
 He was a member of the Pantranco Employees Association-PTGWO
 He was retired in 1989, at the age of 52, after having served 25 years
 This was because the CBA provided for compulsory retirement after 25
years
 Suñ iga filed a case for illegal dismissal against Pantranco
 LA ruled in favor of Suñ iga, illegal dismissal was present
 NLRC affirmed the LA decision
 Pantranco files a petition for certiorari with the SC
Issue: WAS THE CBA PROVISION FOR COMPULSORY RETIREMENT LEGAL
AND ENFORCEABLE?
Held: YES. Thus, Suñiga was not illegally dismissed.
 The CBA provision provides that compulsory retirement occurs after 25
years of service or upon reaching the age of 60 years, whichever comes first.
 This provision is in consonance with Art. 287 of the Labor Code: any
employee may be retired upon reaching the retirement age established in
the CBA or other applicable employment contract.
 The SC also noted the comment of the OSG, which stated that the provision
is also in accord with Book 6, Rule 1, Section 13 of the Omnibus Rules,
which provide that: in the absence of any CBA, an employee may be retired
upon reaching the age of 60 years old.
 Also, a lower retirement age is not contrary to law because it does not
diminish the employee’s benefits, in fact, it is a reward of employment.
 As a matter of fact, one of the advantages of early retirement is that the
corresponding retirement benefits, usually consisting of a substantial cash
windfall, can early on be put to productive and profitable uses by way of
income-generating investments, providing financial security and
independence for the retiree.
 More importantly, Suñ iga is bound by the CBA, because the CBA binds not
only the union but also its members.
 A CBA is the product of negotiation, and its provisions are intended by the
union to be beneficial to the employees.
 When Suñ iga ratified the CBA with the union, he not only agreed to the CBA
but also agreed to conform to and abide by its provisions.
 Hence, he cannot say that he was illegally dismissed when the CBA
provision on compulsory retirement was applied to his case.
RE: Discussion on RA 7641, aka the Retirement Pay Law, which amended
Art. 287 LC
 The SC discussed the Retirement Pay Law, even though it went into effect
after the events of the case, because the law sheds light on the discussion
 In the law, it states that the retirement age can be agreed upon in the CBA
 The passage of this law makes it clear that the spirit of the law is to give
employers and employees a free hand to determine the terms and
conditions of retirement.
 Providing in a CBA for compulsory retirement after 25 years of service is
thus legal and enforceable so long as the parties agree to be governed by the
CBA
 The law presumes that employees know what they want and what is good
for them absent any showing that fraud or intimidation was employee to
secure their consent thereto.
RE: Jurisdiction of Labor Arbiter. Upheld.
 SC held that the LA had jurisdiction over the initial complaint, which is a
complaint for illegal dismissal. Although it involved the interpretation of the
CBA (which is within the jurisdiction of voluntary arbiters/panel of
voluntary arbitrators), such CBA issue is only corollary to the complaint of
illegal dismissal.
 Moreover, there was no dispute between the union and Pantranco, since
both have agreed to the CBA and its provisions. It was only Suñ iga who
 questioned the compulsory retirement. 113 Dole Phils. Inc. v. Pawis ng Makabayang Obrero (PAMAO-NFL)
 As such, this is a “termination dispute” well within the jurisdiction of Labor
Arbiters. FACTS

1. A new CBA for Feb 1996-2001 was executed by Dole and PAMAO-NFL.
2. It includes a provision on meal allowance:
a. Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a
MEAL ALLOWANCE of TEN PESOS (P10.00) to all employees
who render at least TWO (2) hours or more of actual overtime
work on a workday, and FREE MEALS, as presently practiced,
not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3)
hours of actual overtime work.
3. Some departments of Dole reverted to the previous practice of granting
free meals after exactly three hours of actual overtime work. However,
other departments continued the practice of granting free meals only
after more than three hours of overtime work.
4. PAMAO-NF; filed a complaint before NCMB alleging that dole refused to
comply w the provisions of CBA because it granted free meals only to
those who rendered OT for more than 3hrs and no those who rendered
exactly three hrs.
5. They agreed to submit to Voluntary Arbitration. VA decided in favor of
PAMAO-NFL. Ordering dole to extend free meal who did an OT even for
exactly 3hrs.
6. Dole – MR, denied. CA affirmed. Hence, this petition.
7. Dole asserts that the phrase after three hours of actual overtime work
should be interpreted to mean after more than three hours of actual
overtime work.
8. PAMAO-NFL see it as meaning after exactly three hours of actual
overtime work.
ISSUE: How many hours of overtime work must a Dole employee render to be
entitled to the free meal ?

HELD: After exactly, or no less than, three hours of actual overtime work.

RATIO:

Review of past CBAs:

A. 1990-1995:
Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL
ALLOWANCE of EIGHT PESOS (P8.00) to all employees who render at
least TWO (2) hours or more of actual overtime work on a workday,
and FREE MEALS, as presently practiced, not exceeding SIXTEEN PESOS
(P16.00) after THREE (3) hours of actual overtime work.
B. Amended, Supplement:
Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL
SUBSIDY of NINE PESOS (P9.00) to all employees who render at least
TWO (2) hours or more of actual overtime work on a workday, and
FREE MEALS, as presently practiced, not exceeding TWENTY ONE
PESOS (P21.00) after more than THREE (3) hours of actual overtime
work (Section 3, as amended).
 The phrase more than was neither in the 1985-1988 CBA nor in the
original 1990-1995 CBA. It was inserted only in the 1993-1995 CBA
Supplement. But said phrase is again absent in Section 3 of Article XVIII
of the 1996-2001 CBA, which reverted to the phrase after three (3)
hours.
 The omission of the phrase more than between after and three hours in
the present CBA spells a big difference.
 Clearly then, the reversion to the wording of previous CBAs can only
mean that the parties intended that free meals be given to
employees after exactly, or no less than, three hours of actual overtime
work.
 The disputed provision of the CBA is clear and unambiguous. The terms
are explicit and the language of the CBA is not susceptible to any other
interpretation. Hence, the literal meaning of free meals after three (3)
hours of overtime work shall prevail, which is simply that an employee
shall be entitled to a free meal if he has rendered exactly, or no less
than, three hours of overtime work, not after more than or in excess of
three hours overtime work.
 The exercise of management prerogative is not unlimited. It is subject
to the limitations found in law, a collective bargaining agreement or the
general principles of fair play and justice. This situation constitutes one
of the limitations. The CBA is the norm of conduct between petitioner
and private respondent and compliance therewith is mandated by the
express policy of the law.
114 USAEU-FFW (and individual union officers) v. CA and UNIVERSITY OF
SAN AGUSTIN
FACTS:
1. University of San Agustin (University) is a non-stock, non-profit educational
institution. Petitioner Union is the duly recognized CB unit for teaching and
non-teaching rank-and-file personnel of the University.
2. July 2000, parties entered into a 5-year CBA which provided that the
economic provisions thereof shall have a period of 3 years (up to 2003);
providing for salary increases for School Years (SY) 2000-2003, such
increase to take the form of either a lump sum or a percentage of the tuition
incremental proceeds (TIP).
3. CBA contained a "no strike, no lockout" clause and a grievance machinery
procedure to resolve disputes, including a voluntary arbitration mechanism
should the grievance fail to settle disputes.
4. Pursuant to the CBA, the parties commenced negotiations for the economic
provisions for the remaining 2 years, SY2003-04 and SY2004-05.
5. The parties could not agree on the manner of computing the TIP, thus the
need to undergo preventive mediation proceedings before NCMB.
6. The impasse (computation of TIP) was not resolved. This prompted the
Union to declare a bargaining deadlock grounded on the parties’ failure
agree on the manner of computing the allotted for salary and other benefits.
7. Thereafter, Union filed a Notice of Strike which was opposed by the
University, invoking the "No strike, no lockout" clause of the parties’ CBA.
The NCMB, however, failed to resolve the University’s motion.
8. Both parties requested for SOLE to assume jurisdiction. Upon SOLE’s
assumption, any strike was enjoined.
9. The day after, Union staged a strike. On the same day, at 6:45 am, Sheriffs
arrived at the University’s premises to serve the Assumption Jurisdiction
Order (of SOLE) on the Union.
10. At the main entrance of the University, the sheriffs saw some elements of
the Union at the early stages of the strike. There they saw the Union’s VP,
upon whom the sheriffs tried to serve the AJO, but refused to receive the
same, citing Union Board Resolution 3 naming the Union president as the
only person authorized to do so. The sheriffs explained to the VP that even
if she refused to acknowledge receipt of the AJO, the same would be
considered served, by mere posting.
11. At 8 am, the sheriffs posted copies of the AJO at the main gate, main
entrance of its buildings and at the Union’s office inside the campus.
Notwithstanding such, Union went ahead with the strike.
12. At around 5 p.m., the Union president arrived and received the AJO.
13. Thereafter, University filed a Petition to Declare Illegal Strike and Loss of
Employment Status, which the University requested to be consolidated with
case before the SOLE, which was granted.
14. SOLE’s Decision: petition to declare the strike illegal is hereby dismissed.
Consequently, there is no basis to declare loss of employment status on the
part of the striking union members.
15. The University elevated the matter to the CA.
16. CA partially granted University’s petition. While the CA affirmed the SOLE’s
decision on the economic issues, particularly the formula to be used in
computing the share in TIP, it, however, reversed the SOLE’s ruling as to the
legality of the strike, saying that the strike held is illegal, hence, the union
officers are deemed to have lost their employment status.
17. Both parties filed MR.
18. In the meantime, University served notices of termination to the union
officers.
19. The Union filed with the NCMB a second notice of strike, this time on
ground of alleged union busting.
20. CA, acting on the MRs, ruled that the SOLE was wrong in resolving the
economic issues because that said issues were proper subject of the
grievance machinery as said in the CBA. It directed the parties to refer the
economic issues to voluntary arbitration. Also, CA, stood firm in its finding
that the strike was illegal and its officers have lost their employment status.
ISSUES:
1. WON CA erred in declaring the strike illegal, and in declaring the Union
officers as deemed to have lost their employment status? NO.
2. WON CA erred in directing to refer the economic issues of the labor dispute
to voluntary arbitration? NO.
HELD:
1. The SOLE was remiss in disregarding the sheriff’s report. The sheriff’s
report stated the union officers’ refusal to receive the AJO when served on
them. The Union’s Board Resolution which gave sole authority to its
president to receive the AJO must not be allowed to circumvent the
standard operating procedure of the Office of the USec for Labor Relations
which considers AJOs as duly served upon posting of copies thereof on
designated places.
2. The procedure was adopted in order to prevent the thwarting of AJOs by
the simple refusal of the parties to receive the same, as in this case. The
Union cannot feign ignorance of this procedure because its counsel Laserna
was a former RD of DOLE.
3. The AJO was issued by the SOLE pursuant to Art 263(g) LC: “… Such
assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in
the assumption or certification order. If one has already taken place at
the time of assumption or certification, all striking or locked out
employees shall immediately return to work and the employer shall
immediately resume operations and readmit all workers under the
same terms and conditions prevailing before the strike or lockout…”
4. Conclusively, SOLE assumes jurisdiction over a labor dispute in an industry
indispensable to national interest or certifies the same to the NLRC for
compulsory arbitration, such assumption or certification shall have the
effect of automatically enjoining the intended or impending strike or
lockout.
5. Moreover, if one had already taken place, all striking workers shall
immediately return to work and the employer shall immediately
resume operations and re-admit all workers under the same terms
and conditions prevailing before the strike or lockout.
6. In this case, the AJO was served at 8:45 am. The strikers then should have
returned to work immediately.
7. Thus, there is no reversible error in the CA’s finding that the strike was
illegal and that the Union officers were deemed to have lost their
employment status for having participated in said illegal act.
8. The Union’s assertion of a well settled practice that the SOLE always gives
24 to the striking workers within which to return to work, offers no refuge,
as it has no legal basis.
SECOND ISSUE
1. The parties’ CBA provides for a grievance machinery to resolve any
complaint arising from the interpretation or implementation of the CBA
and company personnel policies. Moreover, the same CBA provides that
should the grievance machinery fail to, the same shall be referred to a
Voluntary Arbitrator.
2. However, through no fault of University these processes were not
exhausted. While undergoing preventive mediation proceedings before
NCMB, the Union declared a bargaining deadlock, filed a notice of strike and
went on strike. As borne by the records, the University has been consistent
in its position that the Union must exhaust the grievance machinery
provisions of the CBA.
3. University’s stance is consistent with Arts. 261 and 262 of LC which
provide:
ART. 261- The Voluntary Arbitrator or panel of Voluntary Arbitrators shall
have original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the CBA
and those arising from the interpretation or enforcement of company
personnel policies… Accordingly, violations of CBA, except those which
are gross in character, shall no longer be treated as ULP and shall be
resolved as grievances under the CBA. ...gross violations of CBA shall mean
flagrant and/or malicious refusal to comply with the economic provisions of
such agreement.
NLRC shall not entertain disputes, grievances or matters under the
exclusive and original jurisdiction of the voluntary arbitrator…
ART. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator
or panel of Voluntary Arbitrators, upon agreement of the parties, shall also
hear and decide all other labor disputes including ULP and bargaining
 deadlocks.
4. The University and Union agreed that practically all disputes, including
bargaining deadlocks, shall be referred to the grievance machinery which
ends in voluntary arbitration. Moreover, no strike or no lockout shall ensue
while the matter is being resolved.
5. NCMB should have directed the Union to honor its agreement with the
University to exhaust administrative grievance measures and bring the
alleged deadlock to voluntary arbitration.
6. Failure or refusal of the NCMB and SOLE to recognize, honor and enforce
the grievance machinery and voluntary arbitration provisions of the CBA
unwittingly rendered said provisions, as well as, Arts. 261 and 262 of LC,
useless and inoperative.
7. In Liberal Labor Union, SC viewed that the main purpose in adopting a
procedure in the settlement of their disputes is to prevent a strike or
lockout. Thus, this procedure must be followed in its entirety if it is to
achieve its objective.
8. SC is not unmindful of International Pharmaceuticals, that the SOLE’ s
jurisdiction over labor disputes must include and extend to all questions
and controversies arising therefrom. However, SC are inclined to treat the
present case as an exception to that holding. For, the NCMB’s inaction on
the University’s “Motion to Strike Out Notice of Strike and to Refer the
Dispute to Voluntary Arbitration” veritably forced it to seek and submit to
the jurisdiction of the SOLE. Considering that the CBA contained a no strike,
no lockout and grievance machinery and voluntary arbitration clauses, the
NCMB, under its very own Manual of Procedures in the Settlement and
Disposition of Conciliation and Preventive Mediation Cases, should have
declared as not duly filed the Union’s Notice of Strike and thereafter, should
have referred the labor dispute to voluntary arbitration.
9. Section 6(c)(i), Rule VI, of the NCMB’s Manual: Action on Notices Involving
Issues Cognizable by the Grievance Machinery, Voluntary Arbitration or the
National Labor Relations Commission:...(i) Disputes arising from the
interpretation or implementation of a CBA or from the interpretation
or enforcement of company personnel policies shall be referred to the
grievance machinery as provided for under Art. 261
10. Whether the notice of strike or lockout involves inter-union or intra-union
disputes, violation of labor standards laws or issues cognizable by the
grievance machinery, voluntary arbitration or the NLRC, the initial step is
for the NCMB to consider the notice of strike as not duly filed.
11. The peculiar facts of the instant case show that the University was
deprived of a remedy that would have enjoined the Union strike and
was left without any recourse except to seek the jurisdiction of the
SOLE.
12. Following Liberal, SC will not allow the no strike, no lockout, grievance
machinery and voluntary arbitration clauses found in CBAs to be
circumvented by the simple expedient of filing of a notice of strike or
lockout. A similar circumvention made possible by the inaction of the
NCMB on the University’s motion will not be countenanced. To rule
otherwise would render meaningless Articles 261 and 262 of the Labor
Code, as amended, as well as the voluntary arbitration clauses found in
CBAs.
115 Atlas Farms, Inc. v. National Labor Relations Commission, G.R. No.
142244,
[November 18, 2002], 440 PHIL 620-636
Grievance Procedure
Facts:
1. Private respondent Jaime O. dela Peñ a was employed as a veterinary
aide by petitioner Atlas Farms, Inc., in December 1975.
2. On March 3, 1993, Peñ a was allegedly caught urinating and defecating
on company premises not intended for the purpose. The farm manager
of petitioner issued a formal notice directing him to explain within 24
hours why disciplinary action should not be taken against him for
violating company rules and regulations. Peñ a refused, however, to
receive the formal notice.
3. On March 20, 1993, a notice of termination with payment of his
monetary benefits was sent to him. He duly acknowledged receipt of his
separation pay of P13,918.67. Co-respondent Martial I. Abion was a
carpenter/mason and a maintenance man whose employment by
petitioner commenced on October 8, 1990.
4. He allegedly caused the clogging of the fishpond drainage resulting in
damages worth several hundred thousand pesos when he improperly
disposed of the cut grass and other waste materials into the pond's
drainage system. Petitioner sent a written notice to Abion, requiring
him to explain what happened, otherwise, disciplinary action would be
taken against him. He refused to receive the notice and give an
explanation.
5. The company terminated his services on October 27, 1992. He
acknowledged receipt of a written notice of dismissal, with his
separation pay. Thereafter, Peñ a and Abion filed separate complaints
for illegal dismissal that were later consolidated. Both claimed that
their termination from the service was due to petitioner's suspicion
that they were the leaders in a plan to form a union to compete and
replace the existing management-dominated union.
6. The labor arbiter dismissed their complaints on the ground that the
 grievance machinery in the collective bargaining agreement (CBA) had
not yet been exhausted. Private respondents availed of the grievance
process, but later on refiled the case before the NLRC in Region IV. They
alleged "lack of sympathy" on petitioner's part to engage in conciliation
proceedings.
7. Their cases were consolidated in the NLRC. At the initial mandatory
conference, petitioner filed a motion to dismiss on the ground of lack of
jurisdiction, alleging private respondents themselves admitted that
they were members of the employees' union with which petitioner had
an existing CBA.
8. According to petitioner, jurisdiction over the case belonged to the
grievance machinery and thereafter the voluntary arbitrator, as
provided in the CBA. The labor arbiter dismissed the complaint for lack
of merit, finding that the case was one of illegal dismissal and did not
involve the interpretation or implementation of any CBA provision.
9. Private respondents appealed to the National Labor Relations
Commission (NLRC), which reversed the labor arbiter's decision.
Dissatisfied with the NLRC ruling, petitioner went to the Court of
Appeals by way of a petition for certiorari under Rule 65, seeking
reinstatement of the labor arbiter's decision. The appellate court
denied the petition and affirmed the NLRC resolution.
Issue: WON the NLRC is correct.
Ruling: Yes. The Court pointed out that private respondents went to the
NLRC only after the labor arbiter dismissed their original complaint for
illegal dismissal.
Given the circumstances, private respondents acted within their legal rights
in finding another avenue for the redress of their grievances. The Court also
upheld the NLRC in concluding that private respondents had already
exhausted the remedies under the grievance procedure and in ruling that it
was petitioner who failed to show proof that it took steps to convene the
grievance machinery after the labor arbiter first dismissed the complaint
for illegal dismissal and directed the parties to avail of the grievance
procedure under Article VII of the existing CBA.
Private respondents could not be faulted for attempting to find an impartial
forum, after petitioner failed to listen to them and after the intercession of
the labor arbiter proved futile. Petitioner also did not comply with the
requirements of a valid dismissal. Considering the illegality of the dismissal,
the cases were then effectively removed from the jurisdiction of the
voluntary arbitrator, thus placing them within the jurisdiction of the labor
arbiter. The Court emphasized that where the dispute is just in the
interpretation, implementation or enforcement stage, it may be referred to
the grievance machinery set up in the CBA, or brought to voluntary
arbitration. But, where there was already actual termination, with alleged
violation of the employee's rights, it is already cognizable by the labor
arbiter.
Records show, however, that private respondents sought without success to
avail of the grievance procedure in their CBA. On this point, petitioner
maintains that by so doing, private respondents recognized that their cases
still fell under the grievance machinery. According to petitioner, without
having exhausted said machinery, the private respondents filed their action
before the NLRC, in a clear act of forum-shopping. However, it is worth
pointing out that private respondents went to the NLRC only after the labor
arbiter dismissed their original complaint for illegal dismissal. Under these
circumstances private respondents had to find another avenue for redress.
We agree with the NLRC that it was petitioner who failed to show proof that
it took steps to convene the grievance machinery after the labor arbiter first
dismissed the complaints for illegal dismissal and directed the parties to
avail of the grievance procedure under Article VII of the existing CBA. They
could not now be faulted for attempting to find an impartial forum, after
petitioner failed to listen to them and after the intercession of the labor
arbiter proved futile. The NLRC had aptly concluded in part that private
respondents had already exhausted the remedies under the grievance
procedure. It erred only in finding that their cause of action was ripe for
arbitration.
Appeal denied. Dela Pena and Abion won.
116 Holy Cross of Davao College, Inc. v. Holy Cross Faculty Union- KAMAPI,
Facts:
In 1998, petitioner received a letter of invitation for the
1999 Monbusho scholarship grant (In-Service Training for Teachers) [4] offered
and sponsored by the Japanese Government, through the Japan Information and
Cultural Center (JICC).
This prompted Jean Legaspi, a permanent English teacher in petitioners
high school department, to submit her application.
 Meantime in 1999, petitioner issued policy statement and guidelines on
educational trips abroad for the school year 1998 to 1999.
In a letter, JICC informed Jean Legaspi that she was selected as a recipient
of the scholarship. Consequently, she requested petitioner to allow her to be
on study leave with grant-in aid equivalent to her 18 months salary and
allowance, pursuant to Section 1, Article XIII of the CBA. However, petitioner
denied her request, claiming that she is not entitled to grant-in aid under its
Policy Statement and Guidelines for Trips Abroad for Professional Growth.
Nevertheless, petitioner granted her 12 months study leave without pay from
October 1999 to September 2000.
Before she left for Japan, she asked respondent union KAMPI to submit to
the Grievance Committee petitioners refusal to grant her claim for grant-in aid,
but the same was not settled.
Thus, respondent filed with the NCMB, R.O. XI, Davao City, a complaint for
payment of grant-in aid against petitioner. In a Submission Agreement (2000)
the parties stipulated to submit the case for voluntary arbitration.
In 2001, after the parties submitted their pleadings and position papers,
the Voluntary Arbitrator rendered a Decision ordering petitioner to pay
respondents member, Jean A. Legaspi, her grant-in aid benefits.
CA- affirmed VA’s decision
Issue:
Whether or not petitioner should grant the benefits?- YES
Held:
The terms of the CBA are clear and leave little room for further interpretation.
In this case, the provision on faculty development operated both to grant and
limit the rights of the parties. As such, while the provision obliges petitioner to
provide grant-in aid programs to its faculty, it also requires such faculty to be
bound in employment to petitioner for a certain period of time, all in the
recognized need to increase the competence of the schools faculty. Legaspi
satisfied all the requirements under the CBA. She agreed to keep her part of the
bargain under the terms of the CBA. Despite her increased professional
competence after undergoing foreign training, she bound herself to continue
working for petitioner for at least two years for every year of scholarship study.
Of course, petitioner asseverates that far from deviating from the terms of the
CBA, petitioner in fact merely enforces its terms, in that Section 1 of Article XIII
specifies what petitioner calls the substantive conditions for availment of the
benefit, to wit: that the course must be related to her functions with petitioner
and that it must be in the pursuit of a higher degree. None of these conditions,
according to petitioner, was satisfied by the Monbusho scholarship because the
training will be conducted in a foreign language and will only lead to the grant
of a certificate of completion and not a masters or higher degree.
Even on these ratiocinations, however, petitioner still fails to persuade this
court. Contrary to petitioners insistence, Legaspis foreign training is clearly
related to her work with petitioner and will lead to an advancement in her
qualifications for her job.
First of all, we stress that it is petitioners president herself who, presumably
after determining the worth of allowing its faculty to undergo an in-service
training in a premier foreign institution, immediately advertised the availability
of the scholarship..
Second. a cursory examination of the contents of the course manifests its
relevance to Legaspis work with petitioner. The training program which focuses
on areas such as (a) Educational Management, (b) Methods of Education (e.g.
Teaching-Learning Process System, Curriculum Development, Educational
Evaluation), (c) Study of Special Subjects and others obviously relates to
enhancing Legaspis effectiveness as a teacher.  
Further, while no degree but only a certificate will be conferred on Legaspi, she
should not be barred from availing of the benefits under the CBA. Indeed, the
CBA merely states higher studies and did not specify to which trainings the
benefit will apply. If the CBA intended that such trainings be confined to those
which will formally grant degrees as petitioner contends, the agreement should
have so stated. Contrary thereto, however, the CBA provides the award of grant-
in aid benefits to faculty members who will pursue higher studies. The term is
so broad as to include programs that would grant certificates and not degrees.
In any case, the unassailable truth is that the certificate which is granted by a
premier foreign institute, is an added higher qualification in favor of Legaspi in
recognition of her increased competence in handling her classes under
petitioners auspices.
In any event, the construction of any ambiguity in the CBA, such as which course
would be relevant to Legaspis job, and whether such course comprises higher
studies should be made in favor of the employee, Legaspi, in consonance with
the rule that labor laws and agreements should be construed in favor of the
working man.
WHEREFORE, the assailed decision is hereby AFFIRMED. Costs against
petitioner.
117 New Pacific Timber & Supply Co. v. NLRC
G.R. No. 124224. March 17, 2000. Kapunan J.
TOPIC: CBA; Contract Duration and Renewal
FACTS:
1. National Federation of Labor (NFL) was certified as the sole and
exclusive bargaining representative of all rank and file EEs of New
Pacific.
2. New Pacific resisted the negotiations with NFL. Hence, a case for ULP
was filed against the company.
3. The LA, NLRC and SC held that New Pacific was guilty of ULP.
4. When the case was remanded to the arbitration branch, an Order was
issued to pay the 142 EEs entitled to receive benefits under the CBA.
5. The case was considered closed. However, a “Petition for Relief” was
filed in behalf of the 186 private respondents. In their petition, they
claimed that they wrongfully excluded from enjoying the benefits under
the CBA since the agreement with NFL and New Pacific limited the the
CBA’s implementation to only 142 rand and file EEs.
6. The NLRC entertained the petition, treating it as an appeal. It issued a
resolution declaring the excluded EEs “form part and parcel of the the
existing bargaining unit” and were, therefore, entitled to the benefits
under the CBA.
7. Meanwhile, 4 separate groups of the private respondent, filed
individual money claims with the NLRC. However, it was denied. The
NLRC ordered New Pacific to pay the aggregate amount of
P13,559,510.37.
8. Hence, the instant petition.
9. New Pacific: 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 under it, even if
they subsequently become members of the bargaining unit.
ISSUE: Whether the term of an existing CBA, particularly as to is economic
provisions, can be extended beyond the period stipulated, and even beyond the
3 year period prescribed by law, in the absence of a new agreement- YES
HELD:
sART. 253. Duty to bargain collectively when there exists a collective bargaining
agreement. - When there is a collective bargaining agreement, the duty to
bargain collectively shall also mean that neither party shall terminate nor modify
such agreement during its lifetime. However, either party can serve a written
notice to terminate or modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep the status quo and
to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is
reached by the parties. 
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.
In a long line of cases, this Court has held that when a collective bargaining
contract is entered into by the union representing the employees and the
employer, even the non-member employees are entitled to the benefits of the
contract. To accord its benefits only to members of the union without any valid
reason would constitute undue discrimination against nonmembers. [22] 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
118 Rivera v. Espiritu (2002)
FACTS:
PAL pilots affiliated with the Airline Pilots Association of the Philippines went
on a 3-week strike, causing serious losses to PAL. Faced with bankruptcy, PAL
adopted a rehabilitation plan and downsized its labor force. Consequently,
PALEA went on a strike to protest the retrenchment measure adopted by PAL.
The strike, however, ended when the parties agreed to a more systematic
reduction of the work force.
Estrada issued AO 16, creating an Inter-Agency Task Force to address the
problems of PAL, with Espiritu as the chairman. PAL management submitted to
the Task Force an offer by Lucio Tan, chairman and CEO of PAL, of a plan to
transfer shares of stock to its employees (plus a provision requesting the
suspension of the CBA for 10 years). PALEA, nevertheless, rejected the offer.
PAL thereafter informed the Task Force that as rehabilitation was no longer
feasible, it was left with no other choice but to shut down its operations,
preparatory to liquidating its assets and paying off its creditors.
PALEA sought the intervention of the OP to prevent the imminent closure of
PAL. PALEA also informed DOLE that it agreed to a referendum on Tan’s offer.
Majority of the members, however, rejected it. PAL thus ceased it operations.
PALEA again sought Estrada’s intervention, further offering a 10-year
moratorium on strikes and similar actions, as well as waiver of some of the
economic benefits existing in the CBA. But Tan rejected the same.
PALEA 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. Meanwhile, 7
officers and members of PALEA filed this petition to annul the PAL-PALEA
agreement.
ISSUE: W/N September 27, 1998 PAL-PALEA agreement is valid. YES.
HELD/RATIO:
The primary purpose of a CBA is the stabilization of labor-management
relations in order to create a climate of a sound and stable industrial peace. In
construing a CBA, the courts must be practical and realistic and give due
consideration to the context in which it is negotiated and the purpose which it is
intended to serve.
The assailed PAL-PALEA agreement was the result of voluntary collective
bargaining negotiations undertaken in the light of the severe financial situation
faced by the employer, with the peculiar and unique intention of not merely
promoting industrial peace at PAL, but preventing the latters closure. We find
no conflict between said agreement and Article 253-A of the Labor Code. Article
253-A has a two-fold purpose. One is to promote industrial stability and
predictability. Inasmuch as the agreement sought to promote industrial peace at
PAL during its rehabilitation, said agreement satisfies the first purpose of
Article 253-A. The other is to assign specific timetables wherein negotiations
become a matter of right and requirement. Nothing in Article 253-A, prohibits
the parties from waiving or suspending the mandatory timetables and agreeing
on the remedies to enforce the same.
In the instant case, it was PALEA, as the exclusive bargaining agent of PALs
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 unions exercise of its right to collective bargaining. The right to free
collective bargaining, after all, includes the right to suspend it.
Petitioners contention that the agreement installs PALEA as a virtual company
union is also untenable. Under Article 248 (d) of the Labor Code, a company
union exists when the employer acts [t]o initiate, dominate, assist or otherwise
interfere with the formation or administration of any labor organization,
including the giving of financial or other support to it or its organizers or
supporters. The case records are bare of any showing of such acts by PAL.
We also do not agree that the agreement violates the five-year representation
limit mandated by Article 253-A. Under said article, the representation limit for
the exclusive bargaining agent applies only when there is an extant CBA in full
force and effect. In the instant case, the parties agreed to suspend the CBA and
put in abeyance the limit on the representation period.
119 MANILA ELECTRIC COMPANY (MERALCO) vs. HON. SEC. OF LABOR
LEONARDO QUISUMBING and MERALCO EMPLOYEES AND WORKERS
ASSOCIATION (MEWA)
[G.R. No. 127598. August 1, 2000]; YNARES-SANTIAGO, J.
FACTS:
1. Meralco filed with this Court, on March 17, 2000, a "Motion for Partial
Modification (Re: Resolution Dated 22 February 2000)"
2. Petitioner alleges that the resolution is logically flawed because:
 while it alludes to the Sec.’s discretionary powers only in the
absence of a CBA, Article 253-A of the Labor Code always
presupposes the existence of a prior or subsisting CBA; hence,
the exercise by the Sec. of his discretionary powers will never
come to pass. 
 Second, petitioner claims that the Resolution contravenes the
jurisprudential rule laid down in the cases of Union of Filipro
Employees v. NLRC, Pier 8 Arrastre and Stevedoring Services
v. Roldan-Confesor, and St. Luke s Medical Center v. Torres. 
 Third, petitioner contends that the Court erred in holding
that the effectivity of CBA provisions are automatically
retroactive. Petitioner invokes that the Decision dated
January 27, 1999, which was modified in the assailed
Resolution, that in the absence of an agreement between
 the parties, an arbitrated CBA takes on the nature of any
judicial or quasi-judicial award; it operates and may be
executed only prospectively unless there are legal
justifications for its retroactive application. 
 Fourth, petitioner assigns as error this Courts interpretation
of certain acts of petitioner as consent to the retroactive
application of the arbitral award.  case, it is believed that there is nothing wrong adopting the stand of the union,
 Fifth, petitioner contends that the Resolution is internally
flawed because when it held that the award shall retroact to
the first day after the six-month period following the
expiration of the last day of the CBA, the reckoning date
should have been June 1, 1996, not December 1, 1995, which
is the last day of the three-year lifetime of the economic
provisions of the CBA.
ISSUE: When shall the renegotiated CBA take effect?—The effectivity of the
renegotiated CBA, usually and most often is made effective retroactive to
the date when the immediately preceding CBA expires so as to give a
semblance of continuity.
RATIO: ART. 253-A. Terms of a collective bargaining agreement. --- Any
Collective Bargaining Agreement that the parties may enter into shall, insofar as
the representation aspect is concerned, be for a term of five (5) years. No
petition questioning the majority status of the incumbent bargaining agent shall
be entertained and no certification election shall be conducted by the DOLE
outside of the 60-day period immediately before the date of expiry of such 5-
year term of the Collective Bargaining Agreement. All other provisions of the
CBA shall be renegotiated not later than three (3) years after its execution. Any
agreement on such other provisions of the 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 CBA, shall retroact to the day immediately
following such date. If any such agreement is entered into beyond six months,
the parties shall agree on the duration of retroactivity thereof. In case of a
deadlock in the renegotiation of the collective bargaining agreement, the
parties may exercise their rights under this Code.
As regards the "Effectivity and Duration" clause, the company proposes that
the CBA shall take effect only upon its signing and shall remain in full force and
effect for a period of five years. The union proposes that the agreement shall
take effect retroactive to March 15, 1989, the expiration date of the old CBA.
And after an evaluation of the parties’ respective contention and argument
thereof, it is believed that that of the union is fair and reasonable. It is the
observation of this Arbitrator that in almost subsequent CBAs, the
effectivity of the renegotiated CBA, usually and most often is made
effective retroactive to the date when the immediately preceding CBA
expires so as to give a semblance of continuity. Hence, for this particular
that is that this CBA be made retroactive effective March 15, 1989.
In Union of Filipro Employees v. NLRC: that any agreement on such other
provisions of the CBA shall be given retroactive effect only when it is entered
into within six (6) months from its expiry date. If the agreement was entered
into outside the six (6) month period, then the parties shall agree on the
duration of the retroactivity thereof. "The assailed resolution which
incorporated the CBA to be signed by the parties was promulgated June 5, 1989,
and hence, outside the 6-month period from June 30, 1987, the expiry date of
the past CBA. Based on the provision of Section 253-A, its retroactivity should
be agreed upon by the parties. But since no agreement to that effect was made,
public respondent did not abuse its discretion in giving the said CBA a
prospective effect. The action of the public respondent is within the ambit of its
authority vested by existing laws."
In Lopez Sugar Corporation v. Federation of Free Workers: although a CBA has
expired, it continues to have legal effects as between the parties until a new CBA
has been entered into.
Respondent MEWA invokes the ruling in St. Lukes Medical Center, Inc. v. Torres:
the Sec. of Labor has plenary and discretionary powers to determine the
effectivity of arbitral awards. Thus, respondent maintains that the arbitral
award in this case should be made effective from December 1, 1995 to
November 30, 1997. The ruling in the St. Luke’s case: Art. 253-A refers to CBAs
entered into by the parties as a result of their mutual agreement. The CBA in
this case, on the other hand, is part of an arbitral award. As such, it may be made
retroactive to the date of expiration of the previous agreement. Under the
circumstances of the case, Article 253-A cannot be properly applied to herein
case. Anent the alleged lack of basis for the retroactivity provisions awarded, we
would stress that the provision of law invoked by the Hospital, Article 253-A of
the Labor Code, speaks of agreements by and between the parties, and not
arbitral awards. Therefore, in the absence of a specific provision of law
prohibiting retroactivity of the effectivity of arbitral awards issued by the
Secretary of Labor pursuant to Article 263(g) of the Labor Code, such as herein
involved, public respondent is deemed vested with plenary and discretionary
powers to determine the effectivity thereof. Indeed, petitioner has not shown
that the question of effectivity was not included in the general agreement of the
parties to submit their dispute for arbitration.
In resolving the MR in this case, this Court took into account the fact that
petitioner belongs to an industry imbued with public interest. As such, this
Court can not ignore the enormous cost that petitioner will have to bear as a
consequence of the full retroaction of the arbitral award to the date of expiry of
the CBA, and the inevitable effect that it would have on the national economy.
On the other hand, under the policy of social justice, the law bends over
backward to accommodate the interests of the working class on the humane
justification that those with less privilege in life should have more in law.
Balancing these two contrasting interests, this Court turned to the dictates of
fairness and equitable justice and thus arrived at a formula that would address
the concerns of both sides. Hence, this Court held that the arbitral award in this
case be made to retroact to the first day after the six-month period following the
expiration of the last day of the CBA, i.e., from June 1, 1996 to May 31, 1998.
This Court, therefore, maintains the foregoing rule in the assailed
Resolution pro hac vice. It must be clarified, however, that consonant with this
rule, the two-year effectivity period must start from June 1, 1996 up to May 31,
1998, not December 1, 1995 to November 30, 1997.
During the interregnum between the expiration of the economic provisions of
the CBA and the date of effectivity of the arbitral award, it is understood that the
hold-over principle shall govern: "It shall be the duty of both parties to keep the
status quo and to continue in full force and effect the terms and conditions of
the existing agreement during the 60-day freedom period and/or until a new
agreement is reached by the parties." 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.
Motion for Partial Modification is GRANTED. February 22, 2000 Resolution is
PARTIALLY MODIFIED: (a) the arbitral award shall retroact to the two-year
period from June 1, 1996 to May 31, 1998; (b) the increased wage award of Two
Thousand Pesos (P2,000.00) shall be paid to the rank-and-file employees during
the said two-year period.
120 ASSOCIATED LABOR UNIONS V. NLRC
TOPIC: CBA: Interpretation, Administration and Enforcement: CBA and 3rd Party
Liability
FACTS:
1. (2 consolidated petitions for certiorari, filed within four 4 days from
each other)
2. A CBA was entered into between the complainants and the respondent
Mobil Oil Philippines, Inc. for a period of 3 years starting from April 1,
1982 to March 31, 1985.
3. On August 5, 1983, respondent J.P. Bailiux, President of Mobil Oil
Philippines, Inc. sent letters to the employees, notifying of (sic) the
termination of their services effective August 31, 1983 because of the
sale of the respondent firm.
4. On September 13, 1983, complainant employee accepted their checks
for separation pay and signed quit-claims under protest and subject to
the outcome of this case.
5. Caltex Philippines, Inc. was impleaded as additional respondent
because of its acquisition of the entire marketing and distribution
assets of Mobil Oil Philippines. Mobil Philippines, Inc. was also made a
respondent in view of a metropolitan daily newspaper announcement
that Mobil Oil Philippines, Inc. will continue to do business under the
corporate name of Mobil Philippines, Inc. and that this newly formed
company will market chemicals and special products such as solvents,
process products, waxes and industrial asphalt, fuels and lubricants for
the international marine and aviation industries.
6. Complainants charge respondent Mobil Oil Philippines, Inc. and J.P.
Bailiux with ULP for violating their CBA which, among others, states
that "this Agreement shall be binding upon the parties hereto and their
successors and assigns, and may be assigned by the company without
the previous approval of the Union. However, the latter will be notified
of such assignment when it occurs." In this case, the complainant
unions were not notified officially of such assignment to Caltex
Philippines and respondent Mobil Oil Philippines made announcement
in major dailies that the company shall continue to operate its business.
ISSUE: Whether the union could enforce the CBA against the new owner of the
business (NO)
HELD:
 The issue raised has already been passed upon and resolved by this
Court in another almost identical case, Mobil Employees Association, et
al. vs. NLRC, it was held that since what was effected was cessation of
business and that the requirement of due notice was substantially
 complied with, the allegations that both MOPI and Caltex merely
intended to evade the provisions of the CBA cannot be sustained.
 There was nothing irregular in the closure by MOPI of its business
operation. Caltex may not be said to have stepped into the picture as an
assignee of the CBA because of the very fact of such closure.
 As a rule that unless, expressly assumed, labor contracts are not
enforceable against a transferee of an enterprise, labor contracts
being in personam, thus binding only between the parties.
 As a general rule, there is no law requiring a bona fide purchaser of the
assets of an on-going concern to absorb in its employ the employees of
the latter. However, although the purchaser of the assets or enterprise
is not legally bound to absorb in its employ the employees of the seller
of such assets or enterprise, the parties are reliable to the employees if
the transaction between the parties is colored or clothed with bad faith.
The sale or disposition must be motivated by good faith as an element
of exemption from liability.
 This flows from the well-recognized principle that it is within the
employer's legitimate sphere of management control of the
business to adopt economic policies or make some changes or
adjustments in their organization or operations that would insure
profit to itself or protect the investment of its stockholders. As in
the exercise of such management prerogative, the employer may merge
or consolidate its business with another, or sell or dispose all or
substantially all of its assets and properties which may bring about the
dismissal or termination of its employees in the process.
BOTH PETITIONS DISMISSED.
121 ELISCO-ELIROL LABOR UNION vs.CARMELO NORIEL ELIZALDE STEEL
CONSOLIDATED, INC. and NATIONAL FEDERATION OF LABOR UNIONS
(NAFLU)
Topic: CBA and Disaffiliation  Yet the locals remained the basic units of association, free to serve their own
Facts:
1. Petitioner Elisco Elirol Labor Union negotiated and executed a CBA
with Elizalde Steel Consolidated, Inc. Upon their verification, petitioner
was not registered a registered union and was not entitled to rights and
privileges granted to it. In order to be able to execute the CBA, they had
the union registered, which was granted. Also, the general membership
of petitioner union decided that their mother union, the National
Federation of Labor Unions, can no longer safeguard the rights of its
members insofar as working conditions and other terms of
employment are concerned and that the interest and welfare of
petitioner can be served best if it will stay independent and disaffiliated
from said mother union, hence, the general membership adopted a
resolution to disaffiliate from the National Federation of Labor Unions.
Respondent without any justifiable reason refused and continues to
refuse to recognize petitioner as the sole and exclusive bargaining
representative of its employees, and, now actually dismissed the
petitioner union's officers and board members. In this connection, a
complaint for unfair labor practice was filed by petitioners against
respondents for the latter's refusal to bargain collectively with
petitioner.
Issue: Whether or not Elisco-Elirol is the sole and exclusive bargaining agent of
Elizalde
Held: YES. The error of BLR is not perceiving that the employees and members
of the local union did not form a new union but merely registered the local
union as was their right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting
of employees and members of the local union was the principal party to the
agreement. NAFLU as the mother union" in participating in the execution of the
bargaining agreement with respondent company acted merely as agent of the
local union, which remained the basic unit of the association existing principally
and freely to serve the common interest of all its members, including the
freedom to disaffiliate when the circumstances so warranted as in the present
case. 
"(T)he locals are separate and distinct units primarily designed to secure and
maintain an equality of bargaining power between the employer and their
employee-members in the economic struggle for the fruits of
the joint productive effort of labor and capital; and the association of the
locals 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 affiliation of the
local unions into a common enterprise to increase by collective action
the common bargaining power in respect of the terms and conditions of labor.
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." (Liberty Cotton Mills Workers Union vs. Liberty
Cotton Mills Inc.) 
Such maintenance of the membership clause could not be so distorted.. What is
paramount is the security of tenure of the workers and not the security of the
union.