Essence of the certification process

The essence of the certification process is that every labor organization be given
the opportunity in a free and honest election to make good its claim that it should
be the exclusive collective bargaining representative (Lakas Ng Manggagawang
Pilipino v. Benguet Consolidated, Inc.) In the case at bar, PAFLU was given the
opportunity but lost in a fair election. The implementing rule favors the Union, as it
obtained a majority of the valid votes cast, as the law prescribed.

Representative certified as long as it attains majority of the valid votes, and not
majority of all employees

It is a well-settled rule that a representative will be certified even though less than a
majority of all the employees in the unit cast ballots in favor of the union. It is enough
that the union be designated by a majority of the valid ballots, and this is so even
though only a small proportion of the eligible voters participates.

Collective Bargaining Regime is part of the objective of industrialization;

Preventing a proctracted process

The objective of industrialization – which can only thrive if there is a stable structure of
law and order in the productive sector developed – is best attained in a collective
bargaining regime, which is a manifestation of industrial democracy at work, if there be
no undue obstacles placed in the way of the choice of a bargaining representative. To
insist on the absolute majority where there are various unions and where the possibility
of invalid ballots may not be ruled out, would be to frustrate that goal. For the probability
of a long drawn-out, protracted process is not easy to dismiss. It is to avoid such a
contingency that there is this explicit pronouncement in the implementing rule. It speaks
categorically, it must therefore be obeyed.

Allied Workers case not controlling; cannot be basis for abuse of discretion

The doctrine or pronouncement of the Court in Allied Workers Association case

provides that spoiled ballots, i.e., those which are defaced, torn or marked (Rules for
Certification Elections, Rule II, sec. 2[j]) should be counted in determining the majority
since they are nevertheless votes cast by those who are qualified to do so. These rules
were promulgated under the authority of the then prevailing Industrial Peace Act, which
is no longer in force, having been superseded by the present Labor Code which took
effect on 1 November 1974. In the case at bar, the certification election is governed by
the present Labor Code and the Rules issued thereunder. There is no showing that the
rules conflict with the governing statute, and thus, the Director must be upheld as he
merely complied with the rules when he considered only the “valid votes.”
Construction placed by the office charged with implementing and enforcing the
provisions of a Code should be given controlling weight.

The principle that the contemporaneous construction of a statute by the executive

officers of the government, whose duty it is to execute it, is entitled to great respect, and
should ordinarily control the construction of the statute by the courts, is so firmly
embedded in our jurisprudence that no authorities need be cited to support it (Pennoyer
v. McConnaughy). Courts will and should respect the contemporaneous construction
placed upon a statute by the executive officers whose duty it is to enforce it, and unless
such interpretation is clearly erroneous will ordinarily be controlled thereby (Molina v.
Rafferty).

B. RIGHT TO COLLECTIVE BARGAINING

B.1 GENERAL CONCEPTS

Constitutional Policies
[The State] shall guarantee the rights of workers to self-organization, collective
bargaining and negotiations. […] [1987 Constitution, Art. XIII, Sec. 3]
The State shall promote the principle of shared responsibilities between workers and
employers […] and shall enforce their mutual compliance therewith to foster industrial
peace. [1987 Constitution, Art. XIII, Sec. 3]

Statutory Policies
To promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation, as modes of
setting labor or industrial disputes. [Art. 218 (a)]
It is the policy of the State to promote and emphasize the primacy of free and
responsible exercise of the right to self-organization and collective bargaining, either
through single enterprise level negotiations or through the creation of a mechanism by
which different employers and recognized certified labor unions in their establishments
bargain collectively. [Book V, Rule XVI, §1]

To encourage a truly democratic method of regulating the relations between the

employers and employees by means of agreements freely entered into through
collective bargaining, no court or administrative agency or official shall have the power
to set or fix wages, rates of pay, hours of work or other terms and conditions of
employment, except as otherwise provided under this Code [Art. 218 (b)]

Definition, Nature, and Purpose

‘Collective bargaining, which is defined as negotiations towards a collective agreement,
is one of the democratic frameworks under the Labor Code designed to stabilize the
relations between labor and management and to create a climate of sound and stable
industrial peace. It is a mutual responsibility of the employer and the Union and is
characterized as a legal obligation.” [Kiok Loy v. NLRC, 1986]

The institution of collective bargaining is a prime manifestation of industrial

democracy at work. The two parties to the relationship, labor and management,
make their own rules by coming to terms to govern themselves in matters that
really count. [United Employees Union of Gelmart Industries v. Noriel, 1975]

Waiver of Right to Collectively Bargain

The right to free collective bargaining includes the right to suspend it. [Rivera v.
Espiritu, 2000]

B.2 DUTY TO BARGAIN COLLECTIVELY

I. IN GENERAL
Definition
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 agreement if required by either party but such duty does not compel any
party to agree to a proposal or to make any concession. [Art. 263]

Jurisdictional Preconditions of Duty to Bargain

Possession of the status of majority representation of the employees’
representative in accordance with any of the means of selection or designation
provided for by the Code
 Proof of majority representation by the representative labor organization
Demand to bargain by the labor organization [Art. 250(a)]
The employer is only bound to bargain with the appropriate collective bargaining agent.
An employer asked by a labor organization (which is not the SEBA of the
establishment) to bargain collectively may file a petition for certification election to
ascertain the will of the bargaining unit or it may voluntarily recognize the labor
organization in proper circumstances.

Meaning of Bargaining in Good Faith

[T]here is no per se test of good faith in bargaining. Good faith or bad faith is an
inference to be drawn from the facts. [Kiok Loy v NLRC, 1986]
[T]he failure to reach an agreement after negotiations have continued for a reasonable
period does not establish a lack of good faith. The laws invite and contemplate a
collective bargaining contract, but they do not compel one. [Tabangao Shell Refinery
Employees Association vs. Pilipinas Shell Petroleum Corporation, 2014]

Duty to Bargain does not include:

Any legal duty on the part of the employer to initiate contract negotiation [Kiok Loy v
NLRC, 1986]
The obligation to reach an agreement. While the law makes it an obligation for the
employer and the employees to bargain collectively with each other, such compulsion
does not include the commitment to precipitately accept or agree to the proposals of the
other. All it contemplates is that both parties should approach the negotiation with an
open mind and make reasonable effort to reach a common ground of agreement.
[Union of Filipro Employees v. Nestle, 2008]
II. WHEN THERE IS AN ABSENCE OF A CBA
In the absence of an agreement or other voluntary arrangement providing for a
more expeditious manner of collective bargaining,
it shall be the duty of employer and the
representatives of the employees to bargain collectively in accordance with the
provisions of this Code. (Art. 262)

WHEN THERE IS A CBA

General Rule
The duty to bargain collectively shall also mean that neither party shall terminate
nor modify such agreement during its lifetime. [Art. 264]
In case a new union becomes the majority union while the CBA is still existing, the
said CBA continues to bind the members of the new (or disaffiliated) union up to the
CBA’s expiration date.
 Substitutionary doctrine - the change of bargaining representative does not
terminate the currently existing CBA. The new bargaining agent has to respect
such CBA until a new one is duly executed [Elisco-Elirol Labor Union v Noriel,
1977].
Exception
At least sixty (60) days prior to the expiration of the collective bargaining
agreement, either party can serve a written notice to terminate or modify the
agreement. Note: During this 60-day period, a verified petition questioning the
majority status of the incumbent bargaining agent may also be filed.

Effect on existing CBA

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. [Art. 264]

B.3 BARGAINING PROCEDURE

General Rule
Private Procedure - The bargaining procedure shall be governed by the parties’
agreement or voluntary arrangement, provided it is a more expeditious manner of
collective bargaining. [Art. 262]
Rationale - It is the policy of the state to promote the primacy of free collective
bargaining [Art. 218 (a)]
Exception
Labor Code Procedure – In absence of a private agreement, the collective
bargaining procedure under Art. 261 shall be followed.
i. Written notice and statement of proposals. When a party desires to negotiate
an agreement, it shall serve a written notice upon the other party with a statement
of its proposals.
. Reply. The other party shall make a reply thereto not later than ten (10)
calendar days from receipt of such notice.
. Conference. Should differences arise on the basis of such notice and reply, either
party may request for a conference which shall begin not later than ten (10)
calendar days from the date of request.
iv. Board intervention and
conciliation. If the dispute is not settled, the NCMB shall intervene upon request
of either or both parties or at its own initiative and immediately call the parties to
conciliation meetings. The NCMB shall have the power to issue subpoenas
requiring the attendance of the parties to such meetings. It shall be the duty of the
parties to participate fully and promptly in the conciliation meetings the Board may
call;
v. Voluntary arbitration. The NCMB shall exert all efforts to settle disputes amicably
and encourage the parties to submit their case to a voluntary arbitrator.
vi. Prohibition against disruptive
acts. During the conciliation proceedings in the Board, the parties are
prohibited from doing any act which may disrupt or impede the early
settlement of the disputes.

. Deadlock. When the parties have reached an impasse in negotiations, either

or both of them may declare a “deadlock” which is a ground to file a petition for
preventive mediation or a notice of strike or notice of lockout with the NCMB.

Period to Reply; Bad Faith

The period to reply is merely procedural, and non-compliance cannot be
automatically deemed to be an Unfair Labor Practice (“ULP”). [National Union of
Restaurant Workers vs. CIR, 1964]
Failure to Reply as Indicia of Bad Faith
[The employer’s] refusal to make a counter-proposal 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. It is guilty of ULP. [General Milling Corp. v. CA, 2004]

Bargainable Issues
Mandatory Bargainable Issues
Wages
Hours of work
All other terms and conditions of employment including proposals for adjusting
any grievances or questions arising under such agreement [Art. 263]
Examples:
Vacations and holidays
Bonuses
Seniority, Transfer, and Layoffs
Employee workloads
Work rules and regulations
Union security arrangements
Pension and insurance benefits for active employees
(2) Permissive Issues:
a. Unilateral benefits extended by the employer [cf., Union of Filipino Employees-
Drug v. Nestle, 2008]
A collective bargaining agreement refers to the negotiated contract between a legitimate
labor organization and the employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit […]. As in all 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. [Manila Fashions v. NLRC, 1996]

Test for Mandatory Bargainable Issues

The NEXUS Between the Nature of Employment and the Nature of the Demand:
For “other terms and conditions of employment” to become a mandatory bargainable
issue, they must have a connection between the proposal and the nature of the work.
In order for a matter to be subject to mandatory collective bargaining, it must materially
or significantly affect the terms and conditions of employment. Whether the agreement
concerns a mandatory subject of bargaining depends not on its form, but on its practical
effect. [Azucena]

Importance of Determining the character of the Bargaining Issue

"The question as to what are mandatory and what are merely permissive subjects of
collective bargaining is of significance on the right of a party to insist on his position
to the point of stalemate. A party may refuse to enter into a collective bargaining
contract unless it includes a desired provision as to a matter which is a mandatory
subject of collective bargaining. But a refusal to contract unless the agreement
covers a matter which is not a mandatory subject is in substance a refusal to
bargain about matters which are mandatory subjects of collective bargaining; and it
is no answer to the charge of refusal to bargain in good faith that the insistence on
the disputed clause was not the sole cause of the failure to agree or that agreement
was not reached with respect to other disputed clauses.”

Such refusal will not be deemed as an unfair labor practice. However, if a party
refuses to contract based on an issue which is not a mandatory bargainable issue,
the party will be guilty of ULP. [Samahang Manggagawa sa Top Form v. NLRC,
1998]

Minutes of Negotiation
Where a proposal raised by a contracting party does not find print in the CBA, it is
not a part thereof and the proponent has no claim whatsoever to its implementation.
The Minutes [only] reflects the proceedings and discussions undertaken in the
process of bargaining for worker benefits in the same way that the minutes of court
proceedings show what transpired therein. At the negotiations, it is but natural for
both management and labor to adopt positions or make demands and offer
proposals and counter-proposals. However, nothing is considered final until the
parties have reached an agreement. [Samahang Manggagawa sa Top Form v
NLRC, 1998]

Suspension of Bargaining Negotiations

The mere filing of a petition for certification election does not ipso facto justify the
suspension of negotiation by the employer. In order to allow the employer to validly
suspend the bargaining process there must be a valid petition for certification
election raising a legitimate representation issue. [Colegio de San Juan de Letran v.
Association of Employees, 2000]

Bargaining Deadlock
A “deadlock” is defined as the “counteraction of things producing entire stoppage: a
state of inaction or of neutralization caused by the opposition of persons or of
factions: a standstill. There is a deadlock when there is a “complete blocking or
stoppage resulting from the action of equal and opposed forces.” The word is
synonymous with the word impasse which, within the meaning of the American
federal labor laws, “presupposes reasonable effort at good faith bargaining which,
despite noble intentions, does not conclude in agreement between the parties.”
[Divine World Tacloban v Secretary of Labor, 1992]
Collective Bargaining Deadlock is defined as the situation between the labor and the
management of the company where there is failure in the collective bargaining
negotiations resulting in a stalemate. [San Miguel Corp. v NLRC, 1999].

Privileged Communication in Conciliation Proceedings

Information and statements made at conciliation proceedings shall be treated as
privileged communication and shall not be used as evidence in the Commission.
Conciliators and similar officials shall not testify in any court or body regarding any
matters taken up at conciliation proceedings conducted by them. [Art. 233]

Rationale
a person is entitled to ‘buy his or her peace’ without danger of being prejudiced in
case his or her efforts fail offers for compromise are irrelevant because they are not
intended as admissions by the parties making them [Pentagon Steel v. CA, 2009]
 COLLECTIVE BARGAINING AGREEMENT (CBA)

I. GENERAL CONCEPTS

Definition

Collective Bargaining Agreement - 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. [Book V Rule I § 1(j)]

Nature of the CBA

It is a familiar and fundamental doctrine in labor law that the collective bargaining
agreement (CBA) constitute the law between the parties and they are obliged to
comply with its provisions. [Zuellig Pharma Corporation vs. Alice Sibal, 2013]
However, although it is a rule that contract freely entered between the parties
should be respected, said rule is not absolute. “The relations between capital and
labor are not merely contractual. They are so impressed with public interest that
labor contracts must yield to the common good.” [Civil Code, Art. 1700]

Beneficiaries of the CBA

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. [Art. 267]
The CBA benefits all workers in a collective bargaining unit. 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. [New Pacific Timber and Supply v. NLRC, 2000]
To accord its benefits only to members of the union without any valid reason would
constitute undue discrimination against non-members.

Contract Interpretation
In case of doubt, all labor legislation and all labor contracts shall be construed in
favor of the safety and decent living for the laborer. {Art. 1702]
[A]s a labor contract within the contemplation of Article 1700 of the Civil Code of
the Philippines which governs the relations between labor and capital, [it] is not
merely contractual in nature but impressed with public interest, thus it must yield to
the common good. As such, it must be construed liberally rather than narrowly and
technically, and the courts must place a practical and realistic construction upon it,
giving due consideration to the context in which it is negotiated and purpose which
it is intended to serve. [Davao Integrated Port Stevedoring Services vs. Abarquez,
1993]
General Rule: [W]here the CBA is clear and unambiguous, it becomes the law between
the parties and compliance therewith is mandated by the express policy of the law.
[Zuellig Pharma Corporation v Alice Sibal, 2013]
Exception: If the words appear to be contrary to the evident intention of the parties, the
latter shall prevail over the former. [Kimberly Clark Phils. V. Lorredo, 1993]

II. MANDATORY PROVISIONS OF CBA

(1) Grievance Procedure

The parties to a Collective Bargaining Agreement shall include therein:
Provisions that will ensure the mutual observance of its terms and conditions.
A machinery for the adjustment and resolution of grievances arising from:
The interpretation or implementation of their CBA; and
those arising from the interpretation or enforcement of company personnel
policies.
All grievances submitted to the grievance machinery which are not settled within 7
calendar days from the date of its submission shall be automatically referred to
voluntary arbitration prescribed in the CBA. [Art. 273]
It should be remembered that a grievance procedure is part of the continuous process
of collective bargaining. It is intended to promote a friendly dialogue between labor and
management as a means of maintaining industrial peace. [Master Iron Labor Union v.
NLRC, 1993]
No particular setup for a grievance machinery is required by law. [Art. 273] of, as
incorporated by R.A. 6715, only mandates that the parties to the CBA establish a
machinery 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. [Caltex Refinery Employees
Association v. Brillantes, 1997]

Voluntary Arbitration Constitutional Basis

The State shall promote the principle of shared responsibility between workers
and employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to
foster industrial
peace. [1987 Constitution. Art. XIII Section 3]
Who is a voluntary arbitrator
 A “voluntary arbitrator” is any person accredited by the National Conciliation and
Mediation Board or any person named or designated in the Collective Bargaining
Agreement by the parties to act as their Voluntary Arbitrator, or one chosen with
or without the assistance of the National Conciliation and Mediation Board,
pursuant to a selection procedure agreed upon in the Collective Bargaining
Agreement, or any official that may be authorized by the Secretary of Labor and
Employment to act as Voluntary Arbitrator upon the written request and
agreement of the parties to a labor dispute [Art. 219 (n)]
Automatic Referral If Grievance Machinery Fails
All grievances submitted to the grievance machinery which are not settled within 7
calendar days from the date of its submission shall automatically be referred to
voluntary arbitration prescribed in the CBA. [Art. 273]
Provision for Voluntary Arbitration in the CBA
Parties to a CBA shall:
a. Name and designate in advance a Voluntary Arbitrator or panel of
Voluntary Arbitrators, OR
b. 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 Voluntary Arbitrator or panel
of Arbitrators procedure agreed upon in the CBA, which shall act with the same force
and effect as if the has been selected by the parties as described above. [Art. 273]
Voluntary Arbitration as a Condition Precedent
The stipulation to refer all future disputes to an arbitrator or to submit an ongoing
dispute to one is valid. Being part of a contract between the parties, it is binding and
enforceable in court in case one of them neglects, fails or refuses to arbitrate. Going a
step further, in the event that they declare their intention to refer their differences to
arbitration first before taking court action, this constitutes a condition precedent, such
that where a suit has been instituted prematurely, the court shall suspend the same and
the parties shall be directed forthwith to proceed to arbitration. A court action may
likewise be proper where the arbitrator has not been selected by the parties. [Chung Fu
Industries v. CA, 1992]
Arbitrable Issues
interpretation or implementation of the CBA [Art. 274]
interpretation or enforcement of company personnel policies [Art. 274]
violations of CBA provision which are not gross in character (gross being
flagrant/malicious refusal to comply with the economic provisions of the CBA) [Art.
2274]
 all other labor disputes including ULP and bargaining deadlock, if the parties agree
[Art. 275]
Wage distortions arising from application of any wage orders in organized
establishments [Art. 124]
Unresolved grievances arising from the interpretation and implementation of the
productivity incentives program under RA 6971 [Book V, Rule XIX, Sec. 4]
In general, the arbitrator [“VA”] is expected to decide those questions expressly
stated and limited in the submission agreement. However, since arbitration is the
final resort for the adjudication of disputes, the arbitrator can assume that he has the
power to make a final settlement. The VA has plenary jurisdiction and authority to
interpret the CBA and to determine the scope of his or her own authority. Subject to
judicial review, this leeway of authority and adequate prerogative is aimed at
accomplishing the rationale of the law on voluntary arbitration – speedy labor
justice. [Goya, Inc. vs. Goya, Inc. Employees Union-FFW, 2013]
Procedure of Voluntary Arbitration
All parties shall be entitled to attend the arbitration proceedings.
The hearing may be adjourned for cause or upon agreement by the parties.
Unless the parties agree otherwise, it shall be mandatory for voluntary arbitrator
or panel of voluntary arbitrators to render an award or decision within twenty (20)
calendar days from the date of submission for resolution [Book V, Rule XIX, Sec. 6]
Powers of voluntary arbitrators during arbitration proceeding
hold hearings
receive evidence
take whatever action is necessary to resolve the issue or issues subject of
dispute, including efforts to effect a voluntary settlement between parties
determine attendance of any third parties
determine exclusion of any witness
issue writ of execution for sheriff of NLRC or regular courts to execute the final
decision, order, or award (Art 276)

Finality of the final decision, Order, or Award

 [T]he award or decision of the Voluntary Arbitrator […] shall be final and executory
after 10 calendar days from receipt of the copy of the award or decision by the parties.
[…] (Art. 276)

Motion for Reconsideration

The absence of a categorical language in Art.
[then Art. 262-A] does not preclude the filing of a motion for reconsideration of the
VAs decision within the 10-day period. [Teng v Pahagac, G.R. 169704, (Nov. 17, 2010)]
Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be
availed of, the filing of a motion for reconsideration is a condition sine qua non to
afford an opportunity for the correction of the error or mistake complained of. So also,
considering that a decision of the Secretary of Labor is subject to judicial review only
through a special civil action of certiorari and, as a rule, cannot be resorted to without
the aggrieved party having exhausted administrative remedies through a motion for
reconsideration, the aggrieved party, must be allowed to move for a reconsideration of
the same so that he can bring a special civil action for certiorari before the Supreme
Court. [PIDLTRANCO Service Enterprises Inc v PWU – AGLO, GR No. 180962, (Feb
26, 2014)]

The rule, therefore, is that a Voluntary Arbitrator’s award or decision shall be appealed
before the Court of Appeals within 10 days from receipt of the award or decision.
Should the aggrieved party choose to file a motion for reconsideration with the
Voluntary Arbitrator, the motion must be filed within the same 10-day period since a
motion for reconsideration is filed "within the period for taking an appeal." [PHILEC v
Court of Appeals, GR No. 168612, (Dec 10, 2014)]

Appeal
While there is an express mode of appeal from the decision of a labor arbiter, Republic
Act No. 6715 is silent with respect to an appeal from the decision of a voluntary
arbitrator.

Assuming arguendo that the voluntary arbitrator or the panel of voluntary

arbitrators may not strictly be considered as a quasi- judicial agency, board or
commission, still both he and the panel are comprehended within the concept of a
"quasi-judicial instrumentality." A fortiori, the decision or award of the voluntary
arbitrator or panel of arbitrators should likewise be appealable to the Court of
Appeals. [Luzon Development Bank v. Assoc of Luzon Dev’t Employees, 1995]
The decisions of the voluntary arbitrator are akin to those of the Regional Trial
Court, and therefore should first be appealed to the Court of Appeals before being
elevated to [the Supreme Court]. [Centro Escolar University Faculty and Allied
Workers Union v. Court of Appeals, 2006]
Costs
The parties to a Collective Bargaining Agreement shall provide therein a
proportionate sharing scheme on the cost of the voluntary arbitration including the
Voluntary Arbitrators fee. […] [Art. 277]
Voluntary Arbitrator's Fee
The fixing of the fee of the Voluntary Arbitrators, whether shouldered wholly by
the parties or subsidized by the special voluntary arbitration fund, shall take into
account the following factors:
nature of the case
time consumed in hearing the case
professional standing of the voluntary arbitrator
capacity to pay of the parties. [Art. 277]

(3) No Strike -No Lockout Clause

"no strike, no lock-out" provision in the CBA is a valid stipulation although the
clause may be invoked by an employer only when the strike is economic in nature
or one which is conducted to force wage or other concessions from the employer
that are not mandated to be granted by the law itself. It would be inapplicable to
prevent a strike which is grounded on unfair labor practice. [Panay Electric Co. v.
NLRC, 1995; Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos,
2000]
(4) Labor Management Council
Any provision of law to the contrary notwithstanding, workers shall have the right,
subject to such rules and regulations as the Secretary of Labor and Employment may
promulgate, to participate in policy and
decision-making processes of the establishment where they are employed insofar as
said processes will directly affect their rights, benefits and welfare. For this purpose,
workers and employers may form labor-management councils. […] [Art. 267]
Selection of Representatives
In organized establishments, the workers’ representatives to the council shall be
nominated by the exclusive bargaining representative. In establishments where no
legitimate labor organization exists, the workers representative shall be elected directly
by the employees at large. [Book V, Rule XXI, Sec. 2]

ADMINISTRATION AND ENFORCEMENT OF CBA

Substandard CBA

A CBA that falls below the minimum standards required by law is prohibited .
Nonetheless, RA 9481 removed substandard CBAs as a ground for the cancellation of
registration of union registration. Note: A substandard CBA cannot bar a petition for
certification election under the contract-bar rule.

Ratification

The agreement negotiated by the employees’ bargaining agent should be posted in two
conspicuous places in the place of work and should be ratified or approved by the
majority of all workers in the bargaining unit. [Art. 237; Book V, Rule XVII, Sec. 2 (c)]

“[T]he posting of copies of the collective bargaining agreement is the responsibility of

the employer. […] The purpose of the requirement is precisely to inform the employees
in the bargaining unit of the contents of said agreement so that they could intelligently
decide whether to accept the same or not.” [Associated Labor Unions v Ferrer-Calleja,
1989]

Effect of Non - ratification

General Rule: The collective bargaining agreement should be ratified by the majority of
all the members of the bargaining unit. Non-compliance with this requirement renders
the CBA ineffective. [Associated Trade Unions v. Trajano, 1988]
 Exception: Even if there was no ratification, the CBA will not be invalid or void
considering that the employees have enjoyed benefits from it.

“[The employees] cannot receive benefits under provisions favourable to them

and later insist that the CBA is void simply because other provisions turn out not to the
liking of certain employees.” [Planters Products Inc. v. National Labor Relations
Commission, 1989]

Note: Ratification of the CBA by the employees in the bargaining unit is not needed
when the CBA is a product of an arbitral award as a result of voluntary arbitration under
Art. 275 or from the secretary’s assumption of jurisdiction or certification under Art. 278
(g).

To require ratification of the CBA in case of arbitral awards will be inconsistent with the
nature of arbitration, which entails submission to the judgment of an impartial third
person. The settlement device would be circuitous and the very nature of arbitration
would be contradicted if the arbitrator’s decision, would be dependent on the
employees’ acceptance.

Registration

Within thirty (30) days from the execution of a Collective Bargaining Agreement, the
parties shall submit copies of the same directly to the Bureau or the Regional Offices of
the Department of Labor and Employment for registration […]. [Art. 237]

Requirements for Registration

The application for CBA registration shall be accompanied by the original and two (2)
duplicate copies of the following documents which must be certified under oath by the
representative(s) of the employer(s) and labor union(s) concerned:

The collective bargaining agreement

A statement that the collective bargaining agreement was posted in at least two
(2) conspicuous places in the

establishment or establishments concerned for at least five (5) days before its
ratification

A statement that the collective bargaining agreement was ratified by the majority
of the employees in the bargaining unit of the employer or employees concerned. [Book
V, Rule XVII, Sec. 2]
Confidentiality of registered CBA or Parts Thereof

General rule: CBA is not confidential

Exceptions:

1. confidentiality authorized by Secretary of Labor

2. when it is at issue in any judicial litigation

3. public interest or national security requires [Art. 237]

Effect of Unregistered CBA

An unregistered CBA is binding upon the parties but cannot serve as a bar to a petition
for certification election under the contract-bar rule.

IV. EFFECTIVITY AND DURATION OF COLLECTIVE BARGAINING

AGREEMENT

CBA Effectivity

If it is the first ever CBA, the effectivity date is whatever date the parties agree on.

If it is renegotiated CBA, the effectivity date depends upon the duration of conclusion.

If it is concluded within 6 months from the expiry date, the new CBA will retroact
to the date following the expiry date [Illustration: expiry date:

December 13; renegotiations concluded on November 30: effectivity date: December

14].

If the renegotiated CBA is concluded beyond 6 months from the expiry date, the
matter of retroaction and effectivity is left with the parties.

Hold Over Principle

[In the absence of a new CBA], [i]t shall be the duty of the 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. [Art. 264]

The last sentence of Article 264, which provides for automatic renewal [upon expiry],
pertains only to the economic provisions of the CBA, and does not include
representational aspect of the CBA. A [CBA which continues to take effect beyond its
expiration date] cannot constitute a bar to a filing of petition for certification election.
When there is a representational issue, the status quo provision insofar as the need to
await the creation of a new agreement will not apply. Otherwise, it will create an absurd
situation where the union members will be forced to maintain membership by virtue of
the union security clause existing under the CBA and, thereafter, support another union
when filing a petition for certification election. If we apply it, there will always be an issue
of disloyalty whenever the employees exercise their right to self-organization. The
holding of a certification election is a statutory policy that should not be circumvented, or
compromised. [PICOP Resources, Inc. v. Taneca et al., 2010]

Arbitrated CBA

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. [Manila
Electric Company vs. Quisumbing, 1999]

[O]n the other hand, [when the CBA is only] part of an arbitral award [,] […] it may be
made retroactive to the date of expiration of the previous agreement. 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 Art. 263(g), the latter is deemed
vested with plenary and discretionary powers to determine the effectivity thereof.
[Manila Central Line Corp. v. Manila Central Line Free Workers Union, 1998]

CBA Duration

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 Department of Labor and
Employment outside of the sixty-day period immediately before the date of expiry of
such five-year term of the Collective Bargaining Agreement. All other provisions of the
Collective Bargaining Agreement shall be renegotiated not later than three (3) years
after its execution. Any agreement on such other provisions of the Collective Bargaining
Agreement entered into within six (6) months from the date of expiry of the term of such
other. [Art. 259-A]

CBA Duration for economic provisions 3 years.

CBA Duration for non-economic provisions 5 years for representational or

political issues.

CBA Duration: Freedom Period

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
sixty-day period immediately before the date of the expiry of such five year term of the
Collective Bargaining Agreement. [Contract-bar rule]

CBA and 3rd Party Applicability

Labor contracts such as employment contracts and CBAs are not enforceable against
a transferee of an enterprise, labor contracts being in personam, is 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 liable to the employees if the transaction between the parties is colored or clothed
with bad faith. [Sundowner Dev’t. Corp. v. Drilon, 1989]

General Rule: An innocent transferee of a business establishment has no liability to

the employees of the transferor to continue employing them. Nor is the transferee liable
for past unfair labor practices of the previous owner.

Exception: When the liability therefore is assumed by the new employer under the
contract of sale, or when liability arises because of the new owner's participation in
thwarting or defeating the rights of the employees. The most that the transferee may do,
for reasons of public policy and social justice, is to give preference to the qualified
separated employees in the filling of vacancies in the facilities of the purchaser.
[Manlimos v. NLRC, 1995]