MODULE VIII- LABOR LAW REV

By: JMC

CBA CASES

Rivera et al vs Hon. Espiritu et al, GR No.135547, 23 January

2002(constitutionality of suspension of the PAL-PALEA CBA)

Is the PAL-PALEA agreement of September 27, 1998, stipulating the suspension

of the PAL-PALEA CBA unconstitutional and contrary to public policy?

YES. CBA negotiations may be suspended for 10 years. The acts of public
respondents in sanctioning the 10-year suspension of the PAL-PALEA CBA did
not contravene the "protection to labor" policy of the Constitution.

The assailed PAL-PALEA agreement was the result of voluntary collective

bargaining negotiations undertaken in the light of the severe financial situation
faced by the employer, with the peculiar and unique intention of not merely
promoting industrial peace at PAL, but preventing the latter’s closure.

There is no conflict between said agreement and Article 253-A of the Labor Code.
CBA under Article 253-A of the Labor Code has a two-fold purpose. One is to
promote industrial stability and predictability. Inasmuch as the agreement
sought to promote industrial peace, at the PAL during its rehabilitation, said
agreement satisfied the first purpose of said article. The other purpose is to
assign specific timetable, wherein negotiations become a matter of right and
requirement. Nothing in Article 253-A prohibits the parties from waiving or
suspending the mandatory timetable and agreeing on the remedies to enforce
the same.

Taken together, clearly show the intent of the parties to maintain "union security"
during the period of the suspension of the CBA. Its objective is to assure the
continued existence of PALEA during the said period. We are unable to declare the
objective of union security an unfair labor practice. We also do not agree that the
agreement violates the five-year representation limit mandated by Article 253-A.
Under said article, the representation limit for the exclusive bargaining agent
applies only when there is an extant CBA in full force and effect. In the... instant
case, the parties agreed to suspend the CBA and put in abeyance the limit on the
representation period.

Digital Communications Phils, Inc. vs Digitel Employees Union, et al, GR No.

184903, 10 October 2012 (CN negotiation during pendency of a petition for
cancellation of union registration)

Whether or not an employer commits ULP when it closed down one of its
enterprises resulting to the dismissal of the union members pending the
assumption order of the Secretary of Labor regarding its duty to bargain.
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Yes. Bad faith was manifested by the timing of the closure of Digiserv and the
rehiring of some employees to Interactive Technology Solutions, Inc. (I-tech), a
corporate arm of Digitel. The timing of the creation of I-tech is dubious. It was
incorporated while the labor dispute within Digitel was pending. I-tech’s primary
purpose was to provide call center/customer contact service, the same service
provided by Digiserv. It conducts its business inside the Digitel office. The former
head of Digiserv is also an officer of I-tech. Thus, when Digiserv was closed down,
some of the employees presumably non-union members were rehired by I-tech.

Thus, the closure of Digiserv pending the existence of an assumption order coupled
with the creation of a new corporation performing similar functions as Digiserv
leaves no iota of doubt that the target of the closure are the union member-
employees. These factual circumstances prove that Digitel terminated the services
of the affected employees to defeat their security of tenure. The termination of
service was not a valid retrenchment; it was an illegal dismissal of employees.

It needs to be mentioned too that the dismissal constitutes an unfair labor

practice under Article 248(c) of the Labor Code which refers to contracting
out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their rights to
self-organization.

Prior to the cessation of Digiserv’s operations, the Secretary of Labor had

issued the first and second assumption order. The effects of the assumption
order issued by the Secretary of Labor are two-fold. It enjoins an impending
strike on the part of the employees and orders the employer to maintain the
status quo. There is no doubt that Digitel defied the assumption order by
abruptly closing down Digiserv. The closure of a department is not illegal per
se. What makes it unlawful is when the closure is undertaken in bad faith. In
St. John Colleges, Inc. v. St. John Academy Faculty and Employees Union, bad
faith was evidenced by the timing of and reasons for the closure and the timing of
and reasons for the subsequent opening.

GSIS Family Bank Employees Union vs Secretary Cesar Villanueva, GR

210773, 23 January 2019 (Is the CBA the proper mode of determining the
terms and conditions of employment of the rank- and-file employees?

Is the CBA the proper mode of determining the terms and conditions of
employment of the rank-and-file employees?

GSIS Family Bank is limited by law in negotiating economic terms with their
employees. While the right to self-organization is absolute, the right of government
employees to collective bargaining and negotiation is subject to limitation.
 MODULE VIII- LABOR LAW REV
By: JMC

Collective bargaining is a series of negotiations between an employer and a

representative of the employees to regulate the various aspects of the employer-
employee relationship such as working hours, working conditions, benefits,
economic provisions, and others. Relations between private employers and their
employees are subject to the minimum requirements of wage laws, labor, and
welfare legislation. Beyond these requirements, private employers and their
employees are at liberty to establish the terms and conditions of their employment
relationship. In contrast with the private sector, the terms and conditions of
employment of government workers are fixed by the legislature; thus, the
negotiable matters in the public sector are limited to terms and conditions of
employment that are not fixed by law... instead of a collective bargaining
agreement or negotiation, government employees must course their petitions
for a change in the terms and conditions of their employment through the
Congress for the issuance of new laws, rules, or regulations to that effect:
Government employees may, therefore, through their unions or associations, either
petition the Congress for the betterment of the terms and conditions of employment
which are within the ambit of legislation or negotiate with the appropriate
government agencies for the improvement of those which are not fixed by law.

Societe Internationale de Telecommunicatios Aeronautiques (SITA) et al vs

Huliganga, GR No. 215504, 20 August 2018 (CBA Retirement; managerial
employees)

Whether the new and additional economic benefits arising from the CBA as
amendments to the Employee Regulations Manual has ripened into a company
practice entitling even managerial employees to the CBA-based benefits.

No. It is an indisputable fact that Huliganga was a managerial employee of SITA

and, as such, he is not entitled to retirement benefits exclusively granted to the
rank-and-file employees under the CBA. It must be remembered that under Article
245 of the Labor Code, managerial employees are not eligible to join, assist or
form any labor organization. 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 Labor Arbiter, therefore, did not commit any error when it applied the said
provisions and ruled that Huliganga failed to sufficiently establish that there is an
established company practice of extending the benefits of the CBA to managerial
employees, thus:

Along this vein, it should be stressed that before his retirement on 31 December
2008, complainant occupies the position of Country Operating Officer of
respondent SITA. It is beyond dispute that complainant is occupying the highest
managerial position in the country for his employer SIT A. Now, Article 245 of the
Labor Code expressly states that "managerial employees are not eligible to join,
 MODULE VIII- LABOR LAW REV
By: JMC

assist or form any labor organization." An exception to this prohibition is

when the employer extends the CBA benefits to the managerial employee as a
matter of policy or established practice. Complainant failed to present
evidence to justify his claim. He failed to sufficiently establish that there is an
established company practice of extending the CBA concessions to managerial
employees. To be considered as a company practice, the act of extending the
benefits of the CBA to managerial employees must have been practiced for a
long period of time and must be shown to be consistent and deliberate.

To be considered a company practice, the giving of the benefits should have been
done over a long period of time, and must be shown to have been consistent and
deliberate. The test or rationale of this rule on long practice requires an indubitable
showing that the employer agreed to continue giving the benefits knowing fully
well that said employees are not covered by the law requiring payment thereof.

To prove that the giving of the benefits claimed by Huliganga had been a company
practice, he presented the affidavit of Delia M. Beaniza who was the
Administrative Assistant to the Country Manager/Representative stating that SITA
had adopted the formulation provided in the CBA to its managerial employees. The
NLRC, however, is correct in ruling that the said affidavit deserves scant
consideration because Beaniza lacks the competency to determine what is
considered as a company practice, thus:

Huliganga, therefore, failed to substantially establish that there is an

established company practice of extending CBA concessions to managerial
employees. Again, to be considered a company practice or policy, the act of
extending benefits of the CBA to managerial employees must have been
practiced for a long period of time and must be shown to be consistent and
deliberate.

It must also be remembered that factual findings of labor officials who are deemed
to have acquired expertise in matters within their respective jurisdictions are
generally accorded not only respect, but even finality, and are binding on the
courts. In this case, the CA erred in disregarding the factual findings of the Labor
Arbiter and the NLRC.

Manila Hotel Corporation vs De Leon, GR 219774, 23 July 24 2018

(entitlement of managerial employees to CBA benefits)

Whether a former employee who was retired 12 years before the new CBA
benefit granting 2.5 factor is competent to testify to prove practice applying the
benefit to managerial employees.

No. Because respondent is a managerial employee, petitioner's CBA with its rank-
and-file employees does not apply to her. Furthermore, as the CA held, there is
 MODULE VIII- LABOR LAW REV
By: JMC

nothing in petitioner's submissions showing that respondent had assented to be

covered by the CBA's retirement provisions. Thus, in the absence of an agreement
to the contrary, managerial employees cannot be allowed to share in the
concessions obtained by the labor union through collective negotiation. Otherwise,
they would be exposed to the temptation of colluding with the union during the
negotiations to the detriment of the employer.

Sonedco Workers Free Labor Union et al vs Universal Robina Corp et al, GR

No. 220383, 05 July 2017 (wage increase)

Whether a wage increase withheld by the employer as part of its ULP against a
member not included in the Collective Bargaining Agreement demandable.

Yes, petitioners, who refused to sign the 2007 and 2008 waivers, are entitled to the
wage increase and other economic benefits as a continuing employee benefit
notwithstanding the 2009 CBA.

After SONEDCO Workers Free Labor Union was again declared as the exclusive
bargaining representative in the August 20, 2008 certification election, the 2009
Collective Bargaining Agreement was created to cover 2009 to 2013. Since the
2009 Collective Bargaining Agreement did not include the years 2007 and 2008,
the alleged purpose of the waivers, which was to prevent double compensation,
was already served. It would be unfair for the employees to still not receive the
benefits for 2007 and 2008 simply because they refused to sign a waiver that
was already moot.

However, there is no need for the continuation of the wage increase for 2007 and
2008 since the 2009 CBA contains wage increase provisions for 2009 to 2013. As
explained in Samahang Manggagawa sa Top Form Manufacturing v. National
Labor Relations Commission, if a proposal is not printed in the collective
bargaining agreement, it cannot be demanded:

The CBA is the law between the contracting parties — the collective
bargaining representative and the employer-company. Compliance with a
CBA is mandated by the expressed policy to give protection to labor. In the
same vein, CBA provisions should be "construed liberally rather than
narrowly and technically, and the courts must place a practical and realistic
construction upon it, giving due consideration to the context in which it is
negotiated and purpose which it is intended to serve." This is founded on the
dictum that a CBA is not an ordinary contract but one impressed with public
interest. It goes without saying, however, that only provisions embodied in the
CBA should be so interpreted and complied with. Where a proposal raised by a
contracting party does not find print in the CBA, it is not a part thereof and the
proponent has no claim whatsoever to its implementation.
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If petitioners wanted the wage increase for 2007 and 2008 to be carried on, the
proper recourse would have been to demand that this be included in the 2009
Collective Bargaining Agreement.

BDO Unibank, Inc vs Nerbes et al, GR No. 208735, 19 July 2017 (union leave)

Whether Nerbes and Suravilla's refusal to report to work despite the bank's
order for them to do so constitutes disobedience of such a willful character as to
justify their dismissal from service.

No. Refusal to return to work was not characterized by a wrongful and perverse
attitude to warrant valid dismissal on the ground of willful disobedience requires
the concurrence of twin requisites: (1) the employee's assailed conduct must have
been willful or intentional, the willfulness being characterized by a wrongful and
perverse attitude; and (2) the order violated must have been reasonable, lawful,
made known to the employee and must pertain to the duties which he had been
engaged to discharge.

In this case, Nerbes and Suravilla's failure to report for work despite the
disapproval of their application for leave was clearly intentional. However, though
their refusal to do so may have been intentional, such was not characterized by a
wrongful and perverse attitude or with deliberate disregard of their duties as
such. At the time Nerbes and Suravilla notified the bank of their intent to
avail of their union leaves, they were already proclaimed as winners and in
fact took their respective oaths of office. Following the terms of the parties'
CBA, which has the strength of law as between them, Nerbes and Suravilla, as
duly-elected union officers, were entitled to take their union leaves. That Nerbes
and Suravilla were indeed entitled to such privilege is tacitly recognized by the
bank itself when it continued to pay them their full salaries, despite not reporting
for work, from March 22, 2004 until June 15, 2004.

Nerbes and Suravilla's belief that they are entitled to immediately assume their
positions as union officers and thereby entitled to union leaves is not completely
bereft of basis.

For one, they based the exercise of such privilege on the existing CBA, the terms
of which the bank has not demonstrated to be inapplicable.

For another, it was only upon being proclaimed as winners did they assume their
respective positions which, under Department Order No. 09, take place
immediately. The Court finds that the penalty of dismissal in this case is harsh
and severe. Not every case of insubordination or willful disobedience by an
employee reasonably deserves the penalty of dismissal because the penalty to
be imposed on an erring employee must be commensurate with the gravity of
his or her offense. It is settled that notwithstanding the existence of a just cause,
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dismissal should not be imposed, as it is too severe a penalty, if the employee had
been employed for a considerable length of time in the service of his or her
employer, and such employment is untainted by any kind of dishonesty and
irregularity. We note that aside from the subject incident, Nerbes and Suravilla
were not previously charged with any other offense or irregularity. Considering the
surrounding facts, termination of Nerbes and Suravilla's services was a
disproportionately heavy penalty.

An illegally dismissed employee is entitled to reinstatement and backwages; in

lieu of reinstatement, separation pay is awarded. Having found that Nerbes
was illegally dismissed, he is necessarily entitled to reinstatement to his former
position without loss of seniority and the payment of backwages pursuant to
Section 279 of the Labor Code.

Benson Industries Employees Union et al vs Benson Industries, Inc., GR

200746, 06 August 2014 (Separation pay)

Whether the petitioners are entitled to additional separation benefits equivalent

to four (4) days of work for every year of service as stated in their CBA.

Yes. In computing the amount of separation benefits due to petitioners, the

basis should be the provision of the existing CBA between Benson and the
Union which explicitly states that should the employees be terminated through
no fault of their own, they should be awarded separation benefits at the rate of
19 days for every year of service. In this regard, the VA opined that the
provisions of the CBA should be given effect because it expresses the latest
agreement of the union and the company, not to mention the fact that it gives more
benefits to the employees.

While serious business losses generally exempt the employer from paying
separation benefits, it must be pointed that the exemption only pertains to the
obligation of the employer under Article 297 of the Labor Code. This is because of
the law’s express parameter that mandates payment of separation benefits "in case
of closures or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses."

In this case, it is undisputed that a CBA was forged by the employer, Benson,
and its employees, through the Union, to govern their relations effective July
1, 2005 to June 30, 2010.It is equally undisputed that Benson agreed to and
was thus obligated under the CBA to pay its employees who had been
terminated without any fault attributable to them separation benefits at the
rate of 19 days for every year of service.

The postulation that Benson had closed its establishment and ceased operations due
to serious business losses cannot be accepted as an excuse to clear itself of any
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liability since the ground of serious business losses is not, unlike Article 297 of the
Labor Code, considered as an exculpatory parameter under the aforementioned
CBA.

Clearly, Benson, with full knowledge of its financial situation, freely and
voluntarily entered into such agreement with petitioners. Hence, having failed to
show that the subject CBA provision on separation benefits is contrary to law,
morals, public order orpublic policy, or that the same can be interpreted as one
with a condition – for instance, that the parties actually contemplated non-payment
of separation benefits in the event of closure due to serious business losses – the
Court is constrained to reinstate the October 24, 2008 VA Decision ordering
Benson to pay each of the petitioners separation benefits in "an amount equivalent
to four (4) days for every year of service based on the latest rate of pay of the
[individual petitioner] concerned, subject to whatever legally valid deductions
chargeable against [said individual petitioner], whenever applicable. All given,
business losses are a feeble ground for petitioner to repudiate its obligation under
the CBA. The rule is settled that any benefit and supplement being enjoyed by the
employees cannot be reduced, diminished, discontinued or eliminated by the
employer. The principle of non-diminution of benefits is founded on the
constitutional mandate to protect the rights of workers and to promote their welfare
and to afford labor full protection.

Zuellig Pharma Corp vs Alice Sibal et al, GR 173587, 15 July 2013 (Recovery
of both Retirement pay and Severance Pay)

In the determination of full backwages, will the award include the benefits and
allowances granted under the CBA, if any?

A collective bargaining agreement [or CBA] refers to the negotiated contract

between a legitimate labor organization and the employer concerning wages, hours
of work and all other terms and conditions of employment in a bargaining unit. As
in all contracts, the parties in a CBA may establish such stipulations, clauses, terms
and conditions as they may deem convenient provided these are not contrary to
law, morals, good customs, public order or public policy. Thus, where 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.30

Here, and as discussed above, the parties’ CBA provides in no uncertain terms
that whatever amount of money the employees will receive as retirement
gratuity shall be chargeable against separation pay. It is the unequivocal
manifestation of their agreement that acceptance of retirement gratuity
forecloses receipt of separation pay and vice versa. The CBA likewise
exclusively enumerates departing employees who are entitled to the monetary
equivalent of their unused sick leave. These agreements must prevail and be
given full effect.
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The Release and Quitclaim executed by each of the respondents remains valid.

It is true that quitclaims executed by employees are often frowned upon as contrary
to public policy. But that is not to say that all waivers and quitclaims are invalid as
against public policy.31 Quitclaims will be upheld as valid if the following
requisites are present: "(1) the employee executes a deed of quitclaim voluntarily;
(2) there is no fraud or deceit on the part of any of the parties; (3) the consideration
of the quitclaim is credible and reasonable; and, (4) the contract is not contrary to
law, public order, public policy, morals or good customs or prejudicial to a third
person with a right recognized by law."

In this case, there is no showing that Zuellig coerced or forced respondents to sign
the Release and Quitclaim. In fact, there is no allegation that Zuellig employed
fraud or deceit in making respondents sign the Release and Quitclaim. On the other
hand, respondents declared that they had received the separation pay in full
settlement of all claims arising from their employment with Zuellig. For which
reason, they have remised, released and discharged Zuellig.

United Coconut Chemicals vs Victoriano Valmores, GR 201018, 12 July

2017(inclusion of CBA-benefits in the Computation of Backwages)

In the determination of full backwages, will the award include the benefits and
allowances granted under the CBA, if any?

The base figure to be used in reckoning full backwages is the salary rate of the
employee at the time of his dismissal. The amount does not include the increases or
benefits granted during the period of his dismissal because time stood still for him
at the precise moment of his termination, and move forward only upon his
reinstatement. Hence, the respondent should only receive backwages that included
the amounts being received by him at the time of his illegal dismissal but not the
benefits granted to his co-employees after his dismissal.

The Court is also aware of the reality that salary increases and benefits are not
automatically given to the worker, but are given subject to conditions. As such, the
respondent's claim for the increases in salary, meal subsidy, safety incentive pay,
SOFA, financial grant and medical assistance for the period from 1997 until 2007,
and one-time CBA increase, should be excluded from his backwages.

CBA allowances and benefits that the respondent was regularly receiving before
his illegal dismissal on February 22, 1996 should be added to the base figure of
₱11, 194.00. This is because Article 279 of the Labor Code decrees that the
backwages shall be "inclusive of allowances, and to his other benefits or their
monetary equivalent." Considering that the law does not distinguish between the
benefits granted by the employer and those granted under the CBA, he should not
be denied the latter benefits.
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Goya, Inc vs Goya, Inc Employees Union-FFW, GR No. 170054, 21 January

2013 (CBA terms; management prerogative)

Whether or not the Company is guilty of unfair labor practice in engaging the
services of PESO, a third party service provider, under existing CBA, laws, and
jurisprudence

This management prerogative of contracting out services, however, is not without

limitation. In contracting out services, the management must be motivated by good
faith and the contracting out should not be resorted to circumvent the law or must
not have been the result of malicious arbitrary actions. In the case at bench, the
CBA of the parties has already provided for the categories of the employees in the
Company’sestablishment. These categories of employees particularly with respect
to casual employees serve as limitation to the Company’s prerogative to outsource
parts of its operations especially when hiring contractual employees. As stated
earlier, the work to be performed by PESO was similar to that of the casual
employees. With the provision on casual employees, the hiring of PESO
contractual employees, therefore, is not in keeping with the spirit and intent of
their CBA.

The CA did not commit serious error when it sustained the ruling that the hiring of
contractual employees from PESO was not in keeping with the intent and spirit of
the CBA. In this case, a complete and final adjudication of the dispute between the
parties necessarily called for the resolution of the related and incidental issue of
whether the Company still violated the CBA but without being guilty of ULP as,
needless to state, ULP is committed only if there is gross violation of the
agreement.

Hongkong Bank Independent Labor Union vs Hongkong and Shanghai

Banking Corp Ltd., GR 218390, 28 February 2018 (CBA Terms)

Whether or not HSBC could validly enforce the credit-checking requirement

under its BSP- approved Plan in processing the salary loan applications of
covered employees even when the said requirement is not recognized under the
CBA.

In the present controversy, it is clear from the arguments and evidence submitted
that the Plan was never made part of the CBA. As a matter of fact, HBILU
vehemently rejected the Plan's incorporation into the agreement. Due to this lack of
consensus, the bank withdrew its proposal and agreed to the retention of the
original provisions of the CBA. The subsequent implementation of the Plan's
external credit check provisions in relation to employee loan applications under
Article XI of the CBA was then an imposition solely by HSBC.
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In this respect, this Court is of the view that tolerating HSBC's conduct would be
tantamount to allowing a blatant circumvention of Article 253 of the Labor Code.
It would contravene the express prohibition against the unilateral modification of a
CBA during its subsistence and even thereafter until a new agreement is reached. It
would unduly license HSBC to add, modify, and ultimately further restrict the
grant of Salary Loans beyond the terms of the CBA by simply adding stringent
requirements in its Plan, and having the said Plan approved by BSP in the guise of
compliance with the MoRB.

HSBC' s defense, that there was no modification of the CBA since the external
credit check has been a long-standing policy of the Bank applied to all of its
employees, is unconvincing. Noteworthy is that the bank failed to submit in
evidence the very Plan that was supposedly approved by the BSP in 2003.
Nevertheless, even if We were to rely on the later versions of the Plan approved by
the BSP, Our ruling will not change.

Philippine Geothermal, Inc. Employees Union (PGIEU) vs Chevron

Geothermal Phils Holdings, Inc., GR 207252, 24 January 2018 (Wage Increase
and CBA Violation)

Is the of granting wage increase of P1,500.00 to Lanao and Cordovales at a time

when they had not yet attained regular status violate the existing terms of the
CBA?

The apparent increase in Lanao and Cordovales' salaries as compared to the other
company workers who also have the same salary/pay grade with them should not
be interpreted to mean that they were given a premature increase for November 1,
2008, thus resulting to a wage distortion. The alleged increase in their salaries was
not a result of the erroneous application of Article VII and Annex D of the CBA,
rather, it was because when they were hired by respondent in 2009, when the
hiring rates were relatively higher as compared to those of the previous years.
Verily, the setting and implementation of such various engagement rates were
purely an exercise of the respondent's business prerogative in order to attract or
lure the best possible applicants in the market and which We will not interfere
with, absent any showing that it was exercised in bad faith.

Mr. Robert Gawat was regularized on April 16, 2007 having been hired on October
16, 2007 while Mr. Lanao as shown in the Company's position paper was
regularized on January 1, 2010, having been hired only on July 1, 2009. At the
time of Mr. Gawat's hiring, the hiring rate for Pay Grade 12 was P31,800.00. On
April 16, 2007, Mr. Gawat was given a CBA salary increase under the 2002-2007
CBA of P1,700.00 per month which increased his pay to P33,500.00 per month.
He received another CBA salary increase of P1,500.00 under the 2007-2012 CBA
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on November 1, 2008, thus increasing his pay to P35,000.00. On November 1,

2009, he received another salary increase of P1,500.00 under the 2007-2012 CBA
which further increased his pay to P36,500.00 per month until the present.

On the other hand, when Mr. Lanao was hired on July 9, 2009, the hiring rate at the
time for employees falling under Pay Grade 12 was already P35,000.00, having
been adjusted by the company in accordance with market and industry practice. On
January 1, 2010, Mr. Lanao was regularized and as dictated by the CBA, he was
given a CBA salary increase of P1,500.00 per month effective January 1, 2010
which increased his monthly pay at the present to P36,500.00.[21] (Emphasis and
underlining Ours)

As shown above, the respondent never violated the CBA and in fact, complied
with it to the letter. Clearly, the petitioner only used the respondent's alleged
violation of the CBA when its true gripe is related to the respondent's
prerogative of setting the hiring rate of the employees over which the
petitioner neither has the personality nor the privilege to meddle or interfere
with.

Mindanao Polytechnic College et al vs Mindanao Polytechnic College Faculty

Association, GR No. 233899, 02 September 2020

May a collective bargaining agreement be given full force and effect upon its
expiration?

It must be stressed at this point that the CBA binds all the parties. In the event that
an obligation imposed therein is not fulfilled, the aggrieved party has the right to
go to court and ask redress. Considering that no new CBA has been agreed upon
by both petitioners and respondent~ the provisions of the old CBA continue to
have full force and effect until a new one is entered into by them.

In the case at bar, no new agreement was entered into by and between petitioner
Company and NFL pending appeal of the decision in NLRC Case No. RAB-IX-
0334-82; nor were any of the economic provisions and/or terms and conditions
pertaining to monetary benefits in the existing agreement modified or altered.
Therefore, the existing CBA in its entirety, continues to have legal effect. In a
recent case, the Court had occasion to rule that Articles 253 and 253-A mandate
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 prior to
the expiration of the old CBA and/or until a new agreement is reached by the
parties. Consequently, the automatic renewal clause provided for by the law,
which is deemed incorporated in all CBA's, provides the reason why the new
CBA can only be given a prospective effect.
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STRIKES AND LOCKOUTS CASES

Ergonomic Systems Phils, Inc vs Enaje et al, GR No. 195163, 13 December

2017 (Illegal Strike; Liability of Union Officers and Members; Relief for
Illegally Dismissed Union Members: Rule and Exceptions)

Whether a strike held without seeking a strike vote and submitting a report
thereon to the DOLE is valid.

A strike is deemed illegal for failure to take a strike vote and to submit a report
thereon to the NCMB.

A strike is the most powerful weapon of workers in their struggle with

management in the course of setting their terms and conditions of employment. As
such, it either breathes life to or destroys the union and its members.

Procedurally, for a strike to be valid, it must comply with Article 27830 of the
Labor Code, which requires that: (a) a notice of strike be filed with the NCMB 30
days before the intended date thereof, or 15 days in case of unfair labor practice;
(b) a strike vote be approved by a majority of the total union membership in the
bargaining unit concerned, obtained by secret ballot in a meeting called for that
purpose; and (c) a notice be given to the NCMB of the results of the voting at least
seven days before the intended strike. These requirements are mandatory, and the
union's failure to comply renders the strike illegal.

The union filed a notice of strike on 20 February 2002. The strike commenced on
21 February 2002. The strike vote was taken on 2 April 2002 and the report
thereon was submitted to the NCMB on 4 April 2002. Indeed, the first requisite or
the cooling-off period need not be observed when the ground relied upon for the
conduct of strike is union busting. Nevertheless, the second and third requirements
are still mandatory. In this case, it is apparent that the union conducted a strike
without seeking a strike vote and without submitting a report thereon to the DOLE.
Thus, the strike which commenced on 21 February 2002 was illegal.

Bigg’s Inc vs Joy Boncacas et al, GR No. 200487, 06 March 2019 (No
Backwages Rule and Exceptions

May backwages be awarded to dismissed employees who participated in an

illegal strike and eventually reinstated?

Court deletes the award of backwages in conformity with jurisprudence that

backwages are not granted to dismissed employees who participated in an illegal
strike even if they are later reinstated. In Escario v. NLRC (Escario), the Court
held:
 MODULE VIII- LABOR LAW REV
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Conformably with the long honored principle of a fair day's wage for a fair day's
labor, employees dismissed for joining an illegal strike are not entitled to
backwages for the period of the strike even if they are reinstated by virtue of their
being merely members of the striking union who did not commit any illegal act
during the strike.

Jurisprudential law, however, recognizes several exceptions to the "no backwages

rule," to wit: when the employees were illegally locked to thus compel them to
stage a strike; when the employer is guilty of the grossest form of ULP; when the
employer committed discrimination in the rehiring of strikers refusing to readmit
those against whom there were pending criminal cases while admitting non-strikers
who were also criminally charged in court; or when the workers who staged a
voluntary ULP strike offered to return to work unconditionally but the employer
refused to reinstate them. Not any of these or analogous instances is, however,
present in the instant case.

Respondent urges this Court to apply the exceptional rule enunciated in Philippine
Marine Officers' Guild v. Compañia Maritima and similar cases where the
employees unconditionally offered to return to work, it arguing that there was such
an offer on its part to return to work but the Hotel screened the returning strikers
and refused to readmit those whom it found to have perpetrated prohibited acts
during the strike.

It must be stressed, however, that for the exception in Philippine Marine Officers'
Guild to apply, it is required that the strike must be legal. None of the exceptions
mentioned above is existing in these cases and, as found by the Court, both strikes
conducted by the union were illegal. Thus, the listed employees are not entitled to
backwages despite the CA's order of reinstatement.

Ilagan et al vs MERALCO, GR No. 211746 (Illegal strike; No Backwages

Rule)

May backwages be awarded to dismissed employees who participated in an

illegal strike and eventually reinstated?

Nevertheless, the Court agrees with the finding of the CA that Arnaldo L. Gregorio
and Edwin N. Reyes should be reinstated without backwages. They are not
entitled to backwages in view of the illegality of the said strike.

It can now therefore be concluded that the acts of respondents do not merit their
dismissal from employment because it has not been substantially proven that they
committed any illegal act while participating in the illegal strike.

With respect to backwages, the principle of a "fair day's wage for a fair day's
labor" remains as the basic factor in determining the award thereof. If there is no
work performed by the employee there can be no wage or pay unless, of course,
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By: JMC

the laborer was able, willing and ready to work but was illegally locked out,
suspended or dismissed or otherwise illegally prevented from working. While it
was found that respondents expressed their intention to report back to work, the
latter exception cannot apply in this case. In Philippine Marine Officers' Guild v.
Compania Maritima, as affirmed in Philippine Diamond Hotel and Resort v.
Manila Diamond Hotel Employees Union, the Court stressed that for this exception
to apply, it is required that the strike be legal, a situation that does not obtain in
the case at bar. Under the circumstances, reinstatement without backwages
suffices.

PAL, Inc vs Airline Pilots Association of the Philippines, et al, GR No. 200088,
26 February 2018 (Jurisdiction over damages arising from a labor strike)

Whether the NLRC and the labor arbiter have jurisdiction over PAL’s claims
against the respondent- workers for damages incurred as a consequence of the
latter's actions during the illegal strike.

Yes. Labor tribunals have jurisdiction over actions for damages arising from a
labor strike.

The Court ruled in favor of the labor union and nullified the proceedings before the
trial court. The Court opined that the complaint for damages is deeply rooted in the
labor dispute between the parties and thus should be dismissed by the regular court
for lack of jurisdiction. The Court stressed that the wordings of Article 217 of the
Labor Code is explicit and clear enough to mean that exclusive jurisdiction over
suits for damages arising from a strike belongs to the labor arbiter.

Jurisprudence dictates that where the plaintiffs cause of action for damages arose
out of or was necessarily intertwined with an alleged unfair labor practice, the
jurisdiction is exclusively with the labor tribunal. Likewise, where the damages
separately claimed by the employer were allegedly incurred as a consequence of
strike or picketing of the union, such complaint for damages is deeply rooted in the
labor dispute between the parties and within the exclusive jurisdiction of the labor
arbiter. Consequently, the same should be dismissed by ordinary courts for lack of
jurisdiction.

From the foregoing, it is clear that the regular courts do not have jurisdiction
over PAL's claim of damages, the same being intertwined with its labor
dispute with the respondents over which the SOLE had assumed jurisdiction.
It is erroneous, therefore, for the CA to even suggest that PAL's complaint should
have been ventilated before the trial court.

HSBC Employees Union vs NLRC, GR No. 156635, 11 January 2016

What are the sanctions for illegalstrike on the following?

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By: JMC

a. Union officers who knowingly participate in an illegal strike;

b. Union officers and members who did not knowingly participate in an illegal
strike;

c. Union officers and members who knowingly participate in the commission of

illegal acts during a strike.

Any worker whose employment has been terminated as a consequence of any

unlawful lockout shall be entitled to reinstatement with full backwages. Any union
officer who knowingly participates in an illegal strike and any worker or union
officer who knowingly participates in the commission of illegal acts during a strike
may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the
employer during such lawful strike, (emphasis supplied)

Conformably with Article 264, we need to distinguish between the officers and
the members of the union who participate in an illegal strike. The officers may
be deemed terminated from their employment upon a finding of their
knowing participation in the illegal strike, but the members of the union shall
suffer the same fate only if they are shown to have knowingly participated in
the commission of illegal acts during the strike. Article 264 expressly requires
that the officer must have knowingly participated in the illegal strike.

Note that the verb "participates" is preceded by the adverb "knowingly." This
reflects the intent of the legislature to require "knowledge" as a condition sine qua
non before a union officer can be dismissed from employment for participating in
an illegal strike. The provision is worded in such a way as to make it very difficult
for employers to circumvent the law by arbitrarily dismissing employees in the
guise of exercising management prerogative. This is but one aspect of the State's
constitutional and statutory mandate to protect the rights of employees to self-
organization.

Club Filipino, Inc et al vs Bautista et al, GR No. 168406

Is the NLRC’s decision on the illegal dismissal case res judicata on the illegal
strike case?

The NLRC’s Decision on the illegal dismissal case was not res judicata on the
illegal strike case.
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By: JMC

Res judicata "literally means ‘a matter adjudged; a thing judicially acted upon or
decided; [or] a thing or matter settled by judgment.’" Res judicata" lays the rule
that an existing final judgment or decree rendered on the merits, and without fraud
or collusion, by a court of competent jurisdiction, upon any matter within its
jurisdiction,is conclusive of the rights of the parties or their privies, in all other
actions or suits in the same or any other judicial tribunal of concurrent jurisdiction
on the points and matters in issue in the first suit."

Res judicata has two (2) aspects. The first is bar by prior judgment that precludes
the prosecution of a second action upon the same claim, demand or cause of
action.84 The second aspect is conclusiveness of judgment, which states that
"issues actually and directly resolved in a former suit cannot again be raised in any
future case between the same parties involving a different cause of action."

The elements of res judicata are:

(1) the judgment sought to bar the new action must be final;

(2) the decision must have been rendered by a court having jurisdiction over the
subject matter and the parties;

(3) the disposition of the case must be a judgment on the merits; and

(4) there must be as between the first and second action identity of parties, subject
matter, and causes of action.

The first three (3) elements of res judicata are present in this case.

The NLRC’s judgment on the illegal dismissal case is already final with
respondents not having appealed the Decision within the reglementary period.

The Labor Arbiter, who has the exclusive original jurisdiction to hear, try, and
decide illegal dismissal cases, decided the case. The Labor Arbiter’s Decision was
heard on appeal by the NLRC, which has exclusive appellate jurisdiction over all
cases decided by Labor Arbiters.

The Labor Arbiter’s judgment was on the merits. Based on the facts presented by
the parties, the Labor Arbiter ruled that petitioner Club Filipino, Inc.’s
retrenchment program was valid.

The fourth element of res judicata, however, is absent. Although the cases
have substantially identical parties and subject matter of the dismissal of
respondents, the cause of action for declaration of illegal strike and the cause
of action for illegal dismissal are different.

Tabangao Shell Refinery Employees Association vs Pilipinas Shell Petroleum

Corp., GR No. 170007, 07 April 2014
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By: JMC

Is the union correct in contending that the Secretary of Labor and Employment
should not have touched the issue of the CBA as there was no CBA deadlock at
that time, and should have limited the assumption of jurisdiction to the charge of
unfair labor practice for bargaining in bad faith?

Thus, the labor dispute between the union and the company concerned the
unresolved matters between the parties in relation to their negotiations for a new
CBA. The power of the Secretary of Labor and Employment to assume jurisdiction
over this dispute includes and extends to all questions and controversies arising
from the said dispute, such as, but not limited to the union’s allegation of bad faith
bargaining. It also includes and extends to the various unresolved provisions of the
new CBA such as compensation, particularly the matter of annual wage increase or
yearly lump sum payment in lieu of such wage increase, whether or not there was
deadlock in the negotiations. Indeed, nowhere does the Order dated September 20,
2004 of the Secretary of Labor and Employment mention a CBA deadlock. What
the union viewed as constituting the inclusion of a CBA deadlock in the
assumption of jurisdiction was the inclusion of the economic issues, particularly
the company’s stance of yearly lump sum payment in lieu of annual wage increase,
in the directive for the parties to submit their respective position papers.

Everything considered, therefore, the Secretary of Labor and Employment

committed no abuse of discretion when she assumed jurisdiction over the
labor dispute of the union and the company.