SAN MIGUEL CORPORATION EMPLOYEES UNION vs SAN MIGUEL CORPORATION, MAGNOLIA CORPORATION

Magnolia and Feeds and Livestock Division were spun-off and became two separate and distinct corporations: Magnolia
Corporation (Magnolia) and San Miguel Foods Inc. (SMFI)

• All other provisions of the CBA shall be negotiated not later than three (3) years after its execution
• no outside union can enter the establishment within five (5) years and challenge the status of the incumbent union
as the exclusive bargaining agent.
• the terms and conditions of employment (economic and non-economic) can not be questioned by the employers
or employees during the period of effectivity of the CBA
• We must not lose sight of the fact that the primordial purpose of a collective contract is to promote industrial
harmony and stability in the terms and conditions of employment

the parties, by mutual agreement, enter into a renegotiated contract with a term of three (3) years or one which does not
coincide with the said 5-year term, and said agreement is ratified by majority of the members in the bargaining unit, the
subject contract is valid and legal and therefore, binds the contracting parties

Ever mindful of the employees’ interests, management has assured the concerned employees that they will be absorbed
by the new corporations without loss of tenure and retaining their present pay and benefits according to the existing CBAs

They were advised that upon the expiration of the CBAs, new agreements will be negotiated between the management of
the new corporations and the bargaining representatives of the employees concerned

Magnolia and SMFI became distinct entities with separate juridical personalities. Thus, they can not belong to a single
bargaining unit

• in determining an appropriate bargaining unit, the test of grouping is mutuality or commonality of interests
• The employees sought to be represented by the collective bargaining agent must have substantial mutual
interests in terms of employment and working conditions as evinced by the type of work they performed
• The nature of their products and scales of business may require different skills which must necessarily be
commensurated by different compensation packages. The different companies may have different volumes of
work and different working conditions. For such reason, the employees of the different companies see the need to
group themselves together and organize themselves into distinctive and different groups.
• It would then be best to have separate bargaining units for the different companies where the employees can
bargain separately according to their needs and according to their own working conditions
• the basic test in determining the appropriate bargaining unit is that a unit, to be appropriate, must affect a
grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other
subjects of collective bargaining

DAVAO INTEGRATED PORT STEVEDORING SERVICES vs ABARQUEZ

• While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary
contract to which is applied the principles of law governing ordinary contracts.

It must be noted that the 1989 CBA has two (2) sections on sick leave with pay benefits which apply to two (2) distinct
classes of workers in petitioner's company, namely: (1) the regular nonintermittent workers or those workers who render a
daily eight-hour service to the company, (2) intermittent field workers who are members of the regular labor pool and the
present regular extra labor pool as of the signing of the agreement on April 15, 1989 or those workers who have irregular
working days

all the field workers of petitioner who are members of the regular labor pool and the present regular extra labor pool who
had rendered at least 750 hours up to 1,500 hours were extended sick leave with pay benefits. Any unenjoyed portion
thereof at the end of the current year was converted to cash and paid at the end of the said one-year period

The commutation of the unenjoyed portion of the sick leave with pay benefits of the intermittent workers or its conversion
to cash was, however, discontinued or withdrawn when petitioner-company under a new assistant manager

• the said privilege of commutation or conversion to cash, being an existing benefit, the petitioner-company may not
unilaterally withdraw, or diminish such benefits.
• these may be deemed to have ripened into company practice or policy which cannot be peremptorily withdrawn.
• A collective bargaining agreement (CBA) refers to a contract executed upon request of either the employer or the
exclusive bargaining representative incorporating the agreement reached after negotiations with respect to
wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any
grievances or questions arising under such agreement.
 • A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which
governs the relations between labor and capital, is not merely contractual in nature but impressed with public
interest, thus, it must yield to the common good

HOLY CHILD CATHOLIC SCHOOL vs HCCS CHILD TEACHERS AND EMPLOYEES LABOR UNION (PIGLAS)

a petition for certification election was filed by private respondent Pinag-Isang Tinig at Lakas ng Anakpawis – Holy Child
Catholic School Teachers and Employees Labor Union (HCCS-TELU-PIGLAS)

Petitioner raised that members of private respondent do not belong to the same class; it is not only a mixture of
managerial, supervisory, and rank-and-file employees – as three (3) are vice-principals, one (1) is a department
head/supervisor, and eleven (11) are coordinators – but also a combination of teaching and non-teaching personnel – as
twenty-seven (27) are non-teaching personnel.

It insisted that, for not being in accord with Article 24510 of the Labor Code, private respondent is an illegitimate labor
organization lacking in personality to file a petition for certification election

• “bargaining unit” as a group of employees sharing mutual interests within a given employer unit comprised of all
or less than all of the entire body of employees in the employer unit or any specific occupational or geographical
grouping within such employer unit.
• This definition has provided the “community or mutuality of interest” test as the standard in determining the
constituency of a collective bargaining unit

We agree with the Med-Arbiter that there are differences in the nature of work, hours and conditions of work and salary
determination between the teaching and non-teaching personnel of [petitioner]

We do not, however, agree with the Med-Arbiter that these differences are substantial enough to warrant the dismissal of
the petition

• “inappropriateness of the bargaining unit sought to be represented is not a ground for the dismissal of the
petition.”

Corollary, [private respondent] can continue to exist as a legitimate labor organization with the combined teaching and
non-teaching personnel in its membership and representing both classes of employees in separate bargaining
negotiations and agreements.

As to the purported commingling of managerial, supervisory, and rank-and-file employees in private respondent’s
membership, it held that the Toyota ruling is inapplicable because the vice-principals, department head, and coordinators
are neither supervisory nor managerial employees

While it may be true that they wield power over other subordinate employees of the petitioner, it must be stressed[,]
however[,] that their functions are not confined with policy-determining such as hiring, firing, and disciplining of
employees, salaries, teaching/working hours, other monetary and non-monetary benefits

an employer is not a party-in-interest in a certification election; thus, petitioner does not have the requisite right to protect
even by way of restraining order or injunction.

• the “Bystander Rule” is already well entrenched in this jurisdiction. It has been consistently held in a number of
cases that a certification election is the sole concern of the workers, except when the employer itself has to file
the petition
• The employer clearly lacks the personality to dispute the election and has no right to interfere at all therein
• the demand of the law and policy for an employer to take a strict, hands-off stance in certification elections is
based on the rationale that the employees’ bargaining representative should be chosen free from any extraneous
influence of the management; that, to be effective, the bargaining representative must owe its loyalty to the
employees alone and to no other.
• Employees' right to self-organization. - Employees shall have the right to self-organization and to form, join or
assist labor organizations of their own choosing for the purpose of collective bargaining through representatives of
their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual
aid or protection. Individuals employed as supervisors shall not be eligible for membership in a labor organization
of employees under their supervision but may form separate organizations of their own.
• Under Section 15, the only instance when a labor organization loses its legitimacy is when it violates its duty to
bargain collectively; but there is no word on whether such mingling would also result in loss of legitimacy.
• Sec. 1. Who may join unions - Supervisory employees and security guards shall not be eligible for membership in
a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of
their own
 • Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain collectively,
may file the petition.
• The petition, when filed by a legitimate labor organization, shall contain the description of the bargaining unit
which shall be the employer unit unless circumstances otherwise require; and provided further, that the
appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or
security guards.
• the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a
legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership
cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such
mingling was brought about by misrepresentation, false statement or fraud
• it must be stressed that petitioner cannot collaterally attack the legitimacy of private respondent by praying for the
dismissal of the petition for certification election
• Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for
certification election
• The choice of their representative is the exclusive concern of the employees; the employer cannot have any
partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an
appeal from it; not even a mere allegation that some employees participating in a petition for certification election
are actually managerial employees will lend an employer legal personality to block the certification election.
• The employer's only right in the proceeding is to be notified or informed thereof
• Article 212(g) of the Labor Code defines a labor organization as "any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms
and conditions of employment."
• In determining the proper collective bargaining unit and what unit would be appropriate to be the collective
bargaining agency, several factors that should be considered, to wit: (1) will of employees (Globe Doctrine); (2)
affinity and unity of employees' interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as
temporary, seasonal and probationary employees.
• the test of the grouping is community or mutuality of interest, because “the basic test of an asserted bargaining
unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees
the exercise of their collective bargaining rights.
• A bargaining unit is a group of employees sought to be represented by a petitioning union. Such employees need
not be members of a union seeking the conduct of a certification election. A union certified as an exclusive
bargaining agent represents not only its members but also other employees who are not union members.

the teaching and non-teaching personnel of [petitioner] school must form separate bargaining units. Thus, the order for
the conduct of two separate certification elections, one involving teaching personnel and the other involving non-teaching
personnel.

• the purpose of a certification election is precisely to ascertain the majority of the employees’ choice of an
appropriate bargaining unit – to be or not to be represented by a labor organization and, if in the affirmative case,
by which one

PHILIPPINE AIRLINES vs PALEA

Part of said agreement required petitioner PAL to pay its rank and file employees the following bonuses:

Section 4 – 13th Month Pay (Mid-year Bonus) & Section 5 – Christmas Bonus

petitioner PAL informed respondent PALEA that rank and file employees who were regularized after 30 April 1988 were
not entitled to the 13th month pay as they were already given their Christmas bonuses on 9 December 1988

respondent PALEA filed a labor complaint16 for unfair labor practice against petitioner PAL

• well-settled is the rule that all doubts should be resolved in favor of labor. To rule otherwise is a betrayal of our
zealous commitment to uphold the constitutional provision affording protection to labor

petitioner PAL misrepresented that the 13th month pay or mid-year bonus is the same as the Christmas bonus when, in
actuality, the latter is entirely different as it is a benefit paid under the provisions of the CBA, while the former is one
mandated by law

All employees in PAL are entitled to the same benefit as they are within the same collective bargaining unit and the
entitlement to such benefit spills over to even non-union members.

• It is a well-settled doctrine that the benefits of a CBA extend to the laborers and employees in the collective
bargaining unit, including those who do not belong to the chosen bargaining labor organization. Otherwise, it
would be a clear case of discrimination.
 • to be entitled to the benefits under the CBA, the employees must be members of the bargaining unit, but not
necessarily of the labor organization designated as the bargaining agent

the allegation of petitioner PAL that the non-regular employees do not belong to the collective bargaining unit and are thus
not covered by the CBA is unjustified and unsubstantiated

• There is no showing that the non-regular status of the concerned employees by said cut-off date sufficiently
distinguishes their interests from those of the regular employees so as to exclude them from the collective
bargaining unit and the benefits of the CBA

petitioner PAL alleges that their 13th month pay shall be the same as their Christmas bonus and will be paid according to
the terms governing the latter.

it is crystal clear that petitioner PAL is claiming an exemption from payment of the 13th month pay or mid-year bonus
provided in the CBA under the guise of paying the Christmas bonus which it claims to be the equivalent of the 13th month
pay

• Presidential Decree No. 851 mandates the payment of the 13th month pay to uniformly provide the low-paid
employees with additional income. It does not intend, however, to preclude the employers from voluntarily
granting additional bonuses that will benefit their employees.

If the Christmas bonus was included in the 13th month pay, then there would be no need for having a specific provision on
Christmas bonus in the CBA. The intention is clear therefore that the bonus provided in the CBA was meant to be in
addition to the legal requirement

The non-regular rank and file employees of petitioner PAL as of 30 April 1988, are not actually seeking more benefits than
what the other member-employees of the same bargaining unit are already enjoying. They are only requesting that all
members of the bargaining unit be treated equally and afforded the same privileges and benefits as agreed upon between
respondent PALEA and petitioner PAL in the CBA

NATIONAL UNION OF WORKERS IN HOTELS vs SOLE, HOLIDAY INN

A certification election was conducted on June 16, 2006 among the rank-and-file employees of respondent Holiday Inn
Manila Pavilion Hotel (the Hotel)

Eleven (11) votes were initially segregated because they were cast by dismissed employees, albeit the legality of their
dismissal was still pending before the Court of Appeals. Six other votes were segregated because the employees who
cast them were already occupying supervisory positions at the time of the election. Still five other votes were segregated
on the ground that they were cast by probationary employees

however, that the vote of one Jose Gatbonton (Gatbonton), a probationary employee, was counted

The inclusion of Gatbonton's vote was proper not because it was not questioned but because probationary employees
have the right to vote in a certification election. The votes of the six other probationary employees should thus also have
been counted

• In a certification election, all rank and file employees in the appropriate bargaining unit, whether probationary or
permanent are entitled to vote
• This principle is clearly stated in Art. 255 of the Labor Code which states that the "labor organization designated
or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive
representative of the employees in such unit for purposes of collective bargaining."
• Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the
certified union binds all employees in the bargaining unit. Hence, all rank and file employees, probationary or
permanent, have a substantial interest in the selection of the bargaining representative.
• The Code makes no distinction as to their employment status as basis for eligibility in supporting the petition for
certification election. The law refers to "all" the employees in the bargaining unit. All they need to be eligible to
support the petition is to belong to the "bargaining unit."
• Section 2. Who may join labor unions and workers' associations. - All persons employed in commercial, industrial
and agricultural enterprises, including employees of government owned or controlled corporations without original
charters
o supervisory employees shall not be eligible for membership in a labor union of the rank-andfile
employees but may form, join or assist separate labor unions of their own.
o Managerial employees shall not be eligible to form, join or assist any labor unions for purposes of
collective bargaining
• For purposes of this section, any employee, whether employed for a definite period or not, shall beginning on the
first day of his/her service, be eligible for membership in any labor organization.
 • All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers and those
without any definite employers may form labor organizations for their mutual aid and protection and other
legitimate purposes except collective bargaining.
• Section 5. Qualification of voters; inclusion-exclusion. - All employees who are members of the appropriate
bargaining unit sought to be represented by the petitioner at the time of the issuance of the order granting the
conduct of a certification election shall be eligible to vote.
o An employee who has been dismissed from work but has contested the legality of the dismissal in a
forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a
certification election shall be considered a qualified voter

the votes of the six supervisory employees must be excluded because at the time the certification elections was
conducted, they had ceased to be part of the rank and file, their promotion having taken effect two months before the
election.

As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules in the negative. It is well-
settled that under the so-called "double majority rule," for there to be a valid certification election, majority of the
bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast.

• Under Art. 256 of the Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters
shall be certified as the sole and exclusive bargaining agent of all the workers in the appropriate bargaining unit.
• the true importance of ascertaining the number of valid votes cast is for it to serve as basis for computing the
required majority, and not just to determine which union won the elections
• To be sure, the conduct of a certification election has a two-fold objective: (1) to determine the appropriate
bargaining unit and (2) to ascertain the majority representation of the bargaining representative, if the employees
desire to be represented at all by anyone

UNION OF FILIPRO EMPLOYEES vs NESTLE

UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of Nestlé belonging to the
latter’s Alabang and Cabuyao plants

despite fifteen (15) meetings between them, the parties failed to reach any agreement on the proposed CBA.

UFE-DFA-KMU filed a Notice of Strike, complaining, in essence, of a bargaining deadlock pertaining to economic issues,
i.e., "retirement (plan), panel composition, costs and attendance, and CBA"

another Notice of Strike was filed by the union, this time predicated on Nestlé’s alleged unfair labor practices, that is,
bargaining in bad faith by setting pre-conditions in the ground rules and/or refusing to include the issue of the Retirement
Plan in the CBA negotiations

Nestlé addressed several issues concerning economic provisions of the CBA as well as the non-inclusion of the issue of
the Retirement Plan in the collective bargaining negotiations

• 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
• ART. 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.
• Obviously, the purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on
the parties; but the failure to reach an agreement after negotiations have continued for a reasonable period does
not establish a lack of good faith
• The duty to bargain does not include the obligation to reach an agreement, as there is no per se test of good faith
in collective bargaining

This is not a case where the employer exhibited an indifferent attitude towards collective bargaining, because the
negotiations were not the unilateral activity of the bargaining representative. Nestlé’s desire to settle the dispute and
proceed with the negotiation being evident in its cry for compulsory arbitration is proof enough of its exertion of reasonable
effort at good-faith bargaining.

Nestle never refused to bargain collectively with UFE-DFA-KMU. The corporation simply wanted to exclude the
Retirement Plan from the issues to be taken up during CBA negotiations, on the postulation that such was in the nature of
a unilaterally granted benefit.

• It is but natural that at negotiations, management and labor adopt positions or make demands and offer proposals
and counter-proposals
And the management’s firm stand against the issue of the Retirement Plan did not mean that it was bargaining in bad
faith. It had a right to insist on its position to the point of stalemate.

• ART. 247. CONCEPT OF UNFAIR LABOR PRACTICE - Unfair labor practices violate the constitutional right of
workers and employees to self-organization, are inimical to the legitimate interests of both labor and
management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of
freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor
management relations.

Nestlé 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.

• In cases of unfair labor practices, the notice of strike shall as far as practicable, state the acts complained of and
the efforts to resolve the dispute amicably."

In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the second Notice of Strike nor the records
of these cases substantiate a finding of unfair labor practice.

Nestlé’s inclusion in its Position Paper of its proposals affecting other matters covered by the CBA negates the claim of
refusal to bargain or bargaining in bad faith

STANDARD CHARTERED BANK EMPLOYEES UNION vs CONFESOR, SC BANK

the Bank and the Union signed a five year collective bargaining agreement (CBA) with a provision to renegotiate the terms
thereof on the third year.

Prior to the expiration of the three-year period but within the sixty day freedom period, the Union initiated the negotiations.

The Bank attached its counter-proposal to the non-economic provisions proposed by the Union

Before the commencement of the negotiation, the Union suggested to the Banks Human Resource Manager and head of
the negotiating panel, Cielito Diokno, that the bank lawyers should be excluded from the negotiating team

the parties met and set the ground rules for the negotiation but there were still provisions on which the Union and the
Bank could not agree. So, both parties agreed to place the notation DEFERRED/DEADLOCKED.

the Union suggested that if the Bank would not make the necessary revisions on its counter-proposal, it would be best to
seek a third party assistance

The Union declared a deadlock and filed a Notice of Strike

the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages. The Bank alleged that the Union violated its duty
to bargain, as it did not bargain in good faith. It contended that the Union demanded sky high economic demands,
indicative of blue-sky bargaining

• the National Labor Relations Board held that upon the employers refusal to engage in negotiations with the Union
for collective-bargaining contract when the Union includes a person who is not an employee, or one who is a
member or an official of other labor organizations, such employer is engaged in unfair labor practice
• Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer interferes, restrains or
coerces employees in the exercise of their right to self-organization or the right to form association.The right to
self-organization necessarily includes the right to collective bargaining.
• If an employer interferes in the selection of its negotiators or coerces the Union to exclude from its panel of
negotiators a representative of the Union, and if it can be inferred that the employer adopted the said act to yield
adverse effects on the free exercise to right to self-organization or on the right to collective bargaining of the
employees, ULP under Article 248(a) in connection with Article 243 of the Labor Code is committed
• In order to show that the employer committed ULP under the Labor Code, substantial evidence is required to
support the claim. Substantial evidence has been defined as such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion

The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under Article 248(g) when it engaged
in surface bargaining

• Surface bargaining is defined as going through the motions of negotiating without any legal intent to reach an
agreement

The minutes of the meetings show that both the Bank and the Union exchanged economic and non-economic proposals
and counter-proposals.
 • it is herein emphasized that the duty to bargain does not compel either party to agree to a proposal or require the
making of a concession. Hence, the parties failure to agree did not amount to ULP for violation of the duty to
bargain.
• Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction, or where the power is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility

The respondent Bank argues that the petitioner is estopped from raising the issue of ULP when it signed the new CBA.

In the case, however, the approval of the CBA and the release of signing bonus do not necessarily mean that the Union
waived its ULP claim against the Bank during the past negotiations. After all, the conclusion of the CBA was included in
the order of the SOLE, while the signing bonus was included in the CBA itself

In sum, we find that the public respondent did not act with grave abuse of discretion amounting to lack or excess of
jurisdiction when it issued the questioned order and resolutions. While the approval of the CBA and the release of the
signing bonus did not estop the Union from pursuing its claims of ULP against the Bank, we find that the latter did not
engage in ULP. We, likewise, hold that the Union is not guilty of ULP for Blue sky bargaining.

KIOK LOY vs NLRC, KILUSAN

the Union furnished the Company with two copies of its proposed collective bargaining agreement, and it requested the
Company for its counter proposals, Eliciting no response to the aforesaid request

the Union filed a "Notice of Strike", on ground of unresolved economic issues in collective bargaining.

• Collective bargaining which is defined as negotiations towards a collective agreement, is one of the democratic
frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to
create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union
and is characterized as a legal obligation
• While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to
initiate contract negotiation

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

petitioner Company is GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union was
a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed
Collective Bargaining Agreement, to the Company not only once but twice which were left unanswered and unacted upon;
and (3) the Company made no counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to
negotiate

• A Company’s refusal to make counter proposal if considered in relation to the entire bargaining process, may
indicate bad faith and this is specially true where the Union’s request for a counter proposal is left unanswered

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

• unfair labor practice is committed when it is shown that the respondent employer, after having been served with a
written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said
proposal.
• while the law does not compel the parties to reach an agreement, it does contemplate that both parties will
approach the negotiation with an open mind and make a reasonable effort to reach a common ground of
agreement

TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION vs SHELL

The union proposed a 20% annual across-the-board basic salary increase for the next three years that would be covered
by the new CBA

In lieu of the annual salary increases, the company made a counter-proposal to grant all covered employees a lump sum
amount of ₱80,000.00 yearly for the three-year period of the new CBA

The company explained that the lump sum amount was based on its affordability for the corporation
the union lowered its proposal to 12% annual across-the-board increase for the next three years. For its part, the
company increased its counter-proposal to a yearly lump sum payment of ₱88,000.00 for the next three years.

The company provided the union with a copy of the company’s audited financial statements. However, the union remained
unconvinced and asked for additional documents

The union requested for a copy of the comparison of the salaries of its members and those from allied industries. The
company denied the request on the ground that the requested information was entrusted to the company under a
confidential agreement

the union manifested that the company was bargaining in bad faith.

the company proposed the declaration of a deadlock and recommended that the help of a third party be sought.

the union filed a Notice of Strike alleging bad faith bargaining on the part of the company. Then, the company filed a
Petition for Assumption of Jurisdiction

• ART. 263. Strikes, picketing, and lockouts

• g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the Commission for compulsory arbitration.

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

The Secretary of Labor and Employment found that the intended strike would likely affect the company’s capacity to
provide petroleum products to the company’s various clientele

The Secretary of Labor and Employment further observed that a strike by the union would certainly have a negative
impact on the price of commodities. Convinced that such a strike would have adverse consequences on the national
economy, the Secretary of Labor and Employment ruled that the labor dispute between the parties would cause or likely
to cause a strike in an industry indispensable to the national interest. Thus, the Secretary of Labor and Employment
assumed jurisdiction over the dispute of the parties

if at the time of service of this Order a strike has already commenced, the employees are directed to immediately return to
work within twenty-four (24) hours from receipt thereof

The union contended that the issue is the unfair labor practice of the company in the form of bad faith bargaining and not
the CBA deadlock

• the authority of the Secretary of Labor and Employment under Article 263(g) of the Labor Code to assume
jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to
national interest includes questions and controversies arising from the said dispute, including cases over which
the Labor Arbiter has exclusive jurisdiction.

Thus, as the Secretary of Labor and Employment found the company’s business to be one that is indispensable to
national interest, she had authority to assume jurisdiction over all of the company’s labor disputes, including the economic
issues

the Secretary of Labor and Employment held that there was already deadlock although the ground for the first Notice of
Strike was unfair labor practice for bargaining in bad faith

• CBA meetings showing "reasonable efforts at good faith bargaining" without arriving at a CBA – show that there
was effectively a bargaining deadlock between the parties
• The duty to bargain does not compel any party to accept a proposal, or make any concession, as recognized by
Article 252 of the Labor Code, as amended.
• The purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on the parties;
however, the failure to reach an agreement after negotiations continued for a reasonable period does not
establish a lack of good faith.

Thus, the Company’s insistence on a bargaining position to the point of stalemate does not establish bad faith

• A ‘deadlock’ is the counteraction of things producing entire stoppage; 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 ‘presupposes reasonable effort at good faith bargaining which, despite noble
intentions, does not conclude in agreement between the parties.’
• the failure to reach an agreement after negotiations continued for a reasonable period does not mean lack of
good faith
 • a CBA, like any contract is a product of mutual consent and not of compulsion

the corporation’s unswerving position on the matter of annual lump sum payment in lieu of wage increase did not, by itself,
constitute bad faith even if such position caused a stalemate in the negotiations

• the absence of the parties’ mutual declaration of deadlock does not mean that there was no deadlock. At most, it
would have been simply a recognition of the prevailing status quo between the parties

ASSOCIATED LABOR UNIONS vs CALLEJA, GAW TRADING

The associated Labor Unions (ALU) informed GAW Trading, Inc. that majority of the latter's employees have authorized
ALU to be their sole and exclusive bargaining representative

ALU in behalf of the majority of the employees of GAW Trading Inc. signed and executed the Collective Bargaining

Southern Philippines Federation of Labor (SPFL) together with Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook
a ... Strike ... after it failed to get the management of GAW Trading Inc. to sit for a conference respecting its demands to
make a turnabout of its standing recognition of ALU as the sole and exclusive bargaining representative of its employees

to make a turnabout of its standing recognition of ALU as the sole and exclusive bargaining representative of its
employees

GAW Lumad Labor Union (GALLU-PSSLU) Federation ... filed a Certification Election petition without having complied the
subscription requirement for which it was merely considered an intervenor

Med-Arbiter ruled for the holding of a ceritfication election in all branches of GAW Trading Inc.

Bureau of Labor Relations Director granted ALU's appeal (Motion for Reconsideration) on the ground that the CBA has
been effective and valid and the contract bar rule applicable

Public respondent ordered the holding of a certification election ruling that the "contract bar rule" relied upon by her
predecessor does not apply in the present controversy.

According to the decision of said respondent, the collective bargaining agreement involved herein is defective because it
"was not duly submitted in accordance with Section I, Rule IX, Book V of the Implementing Rules of Batas Pambansa Blg.
130."

There is no proof tending to show that the CBA has been posted in at least two conspicuous places in the 1 establishment
at least five days before its ratification and that it has been ratified by the majority of the employees in the bargaining unit.

Evidently, there was precipitate haste on the part of respondent company in recognizing petitioner union, which
recognition appears to have been based on the self-serving claim of the latter that it had the support of the majority of the
employees in the bargaining unit.

Furthermore, at the time of the supposed recognition, the employer was obviously aware that there were other unions
existing in the unit

An additional infirmity of the collective bargaining agreement involved was the failure to post the same in at least two (2)
conspicuous places in the establishment at least five days before its ratification

• the posting of copies of the collective bargaining agreement is the responsibility of the employer which can easily
comply with the requirement through a mere mechanical act
• The purpose of the requirement is precisely to inform the employees in the bargaining unit of the contents of said
agreement so that they could intelligently decide whether to accept the same or not.
• The contract is intended for all employees and not only for the members of the purpoted representative alone

Another potent reason for annulling the disputed collective bargaining is the finding of respondent director that one
hundred eighty-one( 181) of the two hundred eighty-one (281) workers who "ratified" the same now " strongly and
vehemently deny and/or repudiate the alleged negotiations and ratification of the CBA.

the inapplicability of the contract bar rule is further underscored by the fact that when the disputed agreement was filed
before the Labor Regional Office on May 27, 1986, a petition for certification election had already been filed on May 19,
1986

Although the petition was not supported by the signatures of thirty percent (30%) of the workers in the bargaining unit, the
same was enough to initiate said certification election
PORT WORKERS UNION OF THE PHILIPPINES

International Container Terminal Services, Inc. (ICTSI) because its collective bargaining agreement with private
respondents Associate Port Checkers and Workers Union (APCWU), the incumbent union, was due to expire

Sandigan ng Manggagawa sa Daungan (SAMADA) filed a petition for certification election.

petitioner Port Workers Union of the Philippines (PWUP) filed a petition for intervention. Still another petition for
certification election was filed by the Port Employees Association and Labor Union (PEALU)

The petitions of SAMADA and PEALU were consolidated for joint decision. APCWU filed a motion to dismiss them on the
ground that they did not comply with the requirement set

PWUP appealed that Article 256 of the Labor Code did not require the written consent to be submitted simultaneously
with the petition for certification election.

The petitioner argues that under this article, the Med-Arbiter should automatically order election by secret ballot when the
petition is supported by at least 25% of all employees in the bargaining unit.

SAMADA and PEALU substantially complied with the law when they submitted the required consent signatures several
days after filing the petition.

APCWU questions PWUP's personality in these proceedings in view of the lack of consent signatures in its petition, and
argues as well that the petitioner has no authority to represent SAMADA or PEALU, which had not appealed.

The private respondent maintains that the ratification of the new CBA by the majority of the workers was an affirmation of
their membership in the union that negotiated that agreement.

• The certification election is the most democratic and expeditious method by which the laborers can freely
determine the union that shall act as their representative in their dealings with the establishment where they are
working
• the administrative rule requiring the simultaneous submission of the 25% consent signatures upon the filing of
petition for certification election should not be strictly applied to frustrate the determination of the legitimate
representative of the workers

It is not denied that the petition to intervene filed by PWUP did not carry the 25% consent signatures, but that the
requirement is in fact not applicable to a petition in intervention

• As long as the motion for intervention has been properly and timely filed and the intervention would not cause any
injustice to anyone, it should not be denied and this is so even if the eventual purpose of the Motion for
Intervention is to participate in the Certification Election

The above-quoted decision affirms the right of PWUP to call for the holding of the election although it was initially only an
intervenor.

The petition for intervention was viable at the time it was filed because the principal petitions had complied with the
requirement for the consent signatures as specified by Article 256.

• any stability that does not establish the type of industrial peace contemplated by the law must be subordinated to
the employees' freedom to choose their real representative.

That case required, first, ratification of the CBA, the second, affirmation of membership in the negotiating union. The
second requirement has not been established in the case at bar as the record does not show that the majority of the
workers, besides ratifying the new CBA, have also formally affiliated with APCWU.

As the new CBA was entered into at the time when the representation case was still pending, it follows that it cannot be
recognized as the final agreement between the ICTSI and its workers.

There was indeed grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public respondents
when they dismissed the petitions for certification election because the consent signatures had not been submitted
simultaneously with the petition.

The issue of majority representation thus remains open and awaits settlement.

Following the rulings above-quoted, we hereby declare that the newly-concluded CBA cannot constitute a bar to the
holding of a certification election

• The certification election is the best method of determining the will of the workers on the crucial question of who
shall represent them in their negotiations with the management for a collective bargaining agreement that will best
protect and promote their interests.
BENGUET vs BCI EMPLOYEES & WORKERS UNION

[BCI Employees & Workers Union ("UNION") and the Philippine Association of Free Labor Unions ("PAFLU")]

Benguet-Balatoc Workers Union ("BBWU") entered into a Collective Bargaining Contract, Exh. "Z" ("CONTRACT") with
BENGUET. It became effective for a period of four and a half (4-1/2) years. It likewise embodied a No-Strike, No-Lockout
clause.

three years later, a certification election was conducted by the Department of Labor among all the rank and file employees
of BENGUET

UNION obtained more than 50% of the total number of votes, defeating BBWU, which certifies UNION as the sole and
exclusive collective bargaining agent of all BENGUET employees. UNION members who were BENGUET employees
went on strike.

strike staged by UNION and its members, BENGUET had to incur expenses for the rehabilitation of mine openings, repair
of mechanical equipment, and other miscellaneous expenses

BENGUET sued UNION, PAFLU and their respective Presidents to recover said amount and said that they breached their
undertaking in the existing CONTRACT not to strike during the effectivity

the trial court rendered judgment dismissing the complaint on the ground that the CONTRACT, particularly the No-Strike
clause, did not bind defendants.

• Substitutionary Doctrine - merely states that even during the effectivity of a collective bargaining agreement
executed between employer and employees thru their agent, the employees can change said agent but the
contract continues to bind them up to its expiration date. They may bargain however for the shortening of said
expiration date
• In formulating the "substitutionary" doctrine, the only consideration involved was the employees’ interest in the
existing bargaining agreement. The agent’s interest never entered the picture.
• the "substitutionary" doctrine only provides that the employees cannot revoke the validly executed collective
bargaining contract with their employer by the simple expedient of changing their bargaining agent.
• The "substitutionary" doctrine cannot be invoked to support the contention that a newly certified collective
bargaining agent automatically assumes all the personal undertakings — like the no-strike stipulation here — in
the collective bargaining agreement made by the deposed union

there was no showing at all that, prior to the strike, UNION formally adopted the existing CONTRACT as its own and
assumed all the liabilities imposed by the same upon BBWU.

it was the previous agent who expressly bound itself to the other party, BENGUET. UNION, the new agent, did not
assume this undertaking of BBWU.

Since defendants were not contractually bound by the no-strike clause in the CONTRACT, for the simple reason that they
were not parties thereto, they could not be liable for breach of contract to plaintiff.

• "PRINCIPLE OF SUBSTITUTION" - where there occurs a shift in employees’ union allegiance after the execution
of a collective bargaining contract with their employer, the employees can change their agent - the labor union,
but the collective bargaining contract which is still subsisting, continues to bind the employees up to its expiration
date. They may, however, bargain for the shortening of said expiration date.
• THE "Substitutionary doctrine" provides that the employees cannot revoke the validly executed collective
bargaining contract with their employer by the simple expedient of changing their bargaining agent

ORIENTAL TIN CAN LABOR UNION vs SOLE, OTCWU-FFW, ORIENTAL TIN CAN

Oriental Tin Can entered into a collective bargaining agreement (CBA) with petitioner Oriental Tin Can Labor Union
(OTCLU) as the existing CBA was due to expire

248 of the company's rank-and-file employees authorized the Federation of Free Workers (FFW) to file a petition for
certification election

this petition was repudiated via a written waiver by 115 of the signatories who, along with other employees totalling 897,
ratified the CBA on the same date
OTCLU filed a manifestation and motion praying for the dismissal of the petition for certification election on the ground
that it was not endorsed by at least 25% of the employees of the bargaining unit. Some of the employees who initially
signed the petition had allegedly withdrawn in writing

The OTCLU then filed a motion to dismiss and/or position paper reiterating its position that the petition did not comply with
the 25% signature requirement and maintaining that the new CBA was a bar to a certification election.

the present petition was filed during the freedom period and no registered CBA in the respondent establishment could be
invoked (to) pose as a bar to the holding of a certification election. In other words, when the said CBA was registered
there was a pending representation case

• Sec. 4. Effects of early agreements. — The representation case shall not, however, be adversely affected by a
collective bargaining agreement registered before or during the last sixty (60) days of a subsisting agreement or
during the pendency of the representation case.
• After filing the petition, the role of the employer ceases and it becomes a mere bystander.
• The company's interference in the certification election below by actively opposing the same is manifestly
uncalled-for and unduly creates a suspicion that it intends to establish a company union
• An official certification becomes necessary where the bargaining agent fails to present adequate and reasonable
proof of its majority authorization and where the employer demands it, or when the employer honestly doubts the
majority representation of several contending bargaining groups.
• The designation or selection of the bargaining representative without, however, going through the process set out
by law for the conduct of a certification election applies only when representation is not in issue.
• There is no problem if a union is unanimously chosen by a majority of the employees as their bargaining
representative, but a question of representation arising from the presence of more than one union in a bargaining
unit aspiring to be the employees' representative, can only be resolved by holding a certification election under
the supervision of the proper government authority.
• If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to
the expiry date of such agreement."
• The law dictates a negative reply. The filing of a petition for certification election during the 60-day freedom period
gives rise to a representation case that must be resolved even though a new CBA has been entered into within
that period.
• once the required percentage requirement has been reached, the employees' withdrawal from union membership
taking place after the filing of the petition for certification election will not affect the petition
• the administrative rule requiring the simultaneous submission of the 25% consent signatures upon the filing of the
petition for certification election should not be strictly applied to frustrate the determination of the legitimate
representative of the workers
• the mere filing of a petition for certification election within the freedom period is sufficient basis for the issuance of
an order for the holding of a certification election, subject to the submission of the consent signatures within a
reasonable period from such filing