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SamahanngManggagawasaHanjinvsBLR, G.R. No. 211145, Oct. 14, 2015
FACTS: SamahanngManggagawasaHanjin Shipyard (Samahan) filed an application for
registration of its name with DOLE with the list of names of a total of 120 officers and
members, signatures of the attendees of the meeting, copy of their Consi and by-laws. The
DOLE Regional Ofice No. 3, City of San Fernand, Pampanga, issued the corresponding
certificate of registration. Respondent Hanjin Heavy Industries and Construction Co., Ltd.
Philippines (Hanjin) prayed for the cancellation of registration of Samahan on the ground that
its members do not fall under any of the times of workers enumerated in Art 249. Hanjin
claimed that one third (1/3) of the members of the association had definite employers and
that only ambulant, intermittent, itinerant, rural workers, self-employed, and those without
definite employers may form a workers' association.Hanjin also claimed that Samahan
misrepresented itself when Samahan made it appear that its members where all qualified to
become members of the worker’s association. Samahan did not respond to the pleading
hence the DOLE Regional Director cancelled the certificate of registration.
The BLR granted Samahan’s appeal and reversed the ruling of the Regional Director. The
ruling made mention of the name of Samahan which uses the word “sa” rather than “ng”
meaning Hardin Shipyard was a location and do not pertain to the corporation. On MR, the
BLR affirmed its decision but instructed Samahan to remove “Hanjin Shipyard” from the
name. On Appeal, CA reversed the decision of BLR ruling that since 57/120 were actually
working in Hanjin, Samahan misrepresented itself in its preamble which created the
impression that all its members were employees of Hanjin. Butat any rate, removing “Hanjin
Shipyard” from the name would not prejudice or impair the right to self organization because
it could adopt other appropriate names.
ISSUES: (1) WON Samahan can form a worker’s association of employees.
(2) WON Removing “Hanjin Shipyard” from the name by reason of the
company’s property right over the company name “Hanjin” is proper.
HELD: (1) More often than not, the right to self-organization connotes unionism.  consistently limited to the regular rank-and-file employees paid on a daily or piece-rate basis.
Workers, however, can also form and join a workers' association as well as labor-
management councils. Expressed in the highest law of the land is the right of all workers to
self-organization. This is imbued in Section 3, Article XIII and Section 8, Article III of the 1987
Constitution and in relation thereto to Article 3 of the Labor Code.
A union refers to any labor organization in the private sector organized for collective
bargaining and for other legitimate purpose, while a workers' association is an organization of
workers formed for the mutual aid and protection of its members or for any legitimate purpose
other than collective bargaining. Many associations or groups of employees, or even
combinations of only several persons, may qualify as a labor organization yet fall short of
constituting a labor union. While every labor union is a labor organization, not every labor
organization is a labor union. The difference is one of organization, composition and
operation.
A cursory reading of the law demonstrates that a common element between unionism and
the formation of LMCs is the existence of an employer-employee relationship. In contrast, the
existence of employer-employee relationship is not mandatory in the formation of workers'
association.  KNITJOY. It does not bar the holding of a certification election to determine their sole
Right to choose whether to form or join a union or workers' association belongs to workers
themselves. The right to form or join a labor organization necessarily includes the right to
refuse or refrain from exercising the said right. It is self-evident that just as no one should be
denied the exercise of a right granted by law, so also, no one should be compelled to
exercise such a conferred right. There is no provision in the Labor Code that states that
employees with definite employers may form, join or assist unions only.
Furthermore, the position that Samahan's members cannot form the association because
they are not covered by the second sentence of Article 243 (now 249) is incorrect. There is
nothing in the Article 243 as well as in Rule 2 of Department Order (D.O.) No. 40-03, Series
of 2003, which provides that workers, with definite employers, cannot form or join a workers'
association for mutual aid and protection. Thus, the Court agrees with Samahan's argument
that the right to form a workers' association is not exclusive to ambulant, intermittent and
itinerant workers. Furthermore, the Court concludes that misrepresentation, to be a ground
for the cancellation of the certificate of registration, must be done maliciously and
deliberately.
(2) Yes it is proper. As there is no provision under our labor laws which speak of
the use of name by a workers' association, the Court refers to the Corporation Code, which
governs the names of juridical persons. The policy underlying the prohibition in Section 18
against the registration of a corporate name which is "identical or deceptively or confusingly
similar" to that of any existing corporation or which is "patently deceptive" or "patently
confusing" or "contrary to existing laws," is the avoidance of fraud upon the public which
would have occasion to deal with the entity concerned, the evasion of legal obligations and
duties, and the reduction of difficulties of administration and supervision over corporations.
For the same reason, it would be misleading for the members of Samahan to use "Hanjin
Shipyard" in its name as it could give the wrong impression that all of its members are
employed by Hanjin. Hence the SC reinstated the decision of BLR as modified by its
November 28, 2011 Resolution
Knitjoy Manufacturing, Inc. vs Ferrer-Calleja, G.R. No. 81883, Sept. 23, 1992
FACTS: Petitioner KNITJOY had a collective bargaining agreement (CBA) with the
Federation of Filipino Workers (FFW). The bargaining unit covered only the regular rank-and-
file employees of KNITJOY paid on a daily or piece-rate basis. It did not include regular rank-
and-file office and production employees paid on a monthly basis. Prior to the expiration of
the CBA, the Trade Union of the Philippines and Allied Services (TUPAS) filed a petition for
the holding of a certification election among KNITJOY’s regular rank-and-file employees paid
on a daily and piece-rate basis. CFW (Confederation of Filipino Workers) won; thereafter
negotiations for the CBA started between Knitjoy and CFW.
During the pendency of the negotiations, Knitjoy Monthly Employees Union (KMEU) filed a
petition for certification election in which the Knitjoy Monthly Employees Association and
Confederation of Citizens Labor Union (KMEA-CCLU) and CFW intervened. The petition was
dismissed by the Med-Arbiter instructing them to work towards the formation of a single union
in the company. Upon appeal, the Director of BLR reversed the Med-Arbiter’s order.
ISSUES: (1) WON allowing the creation of a separate existing bargaining unit will abet the
proliferation of unions hence disregarding CFW as the sole and exclusive bargaining agent.
(2) WON the scope of the new CBA binds KMEU and the acceptance by all the
members of KMEU of all the benefits of the CBA constitute an over act of ratification.
HELD: (1) The suggested bias of the Labor Code in favor of the one company-one union
policy is not without exceptions. The present Article 245 of the Labor Code expressly allows
supervisory employees who are not performing managerial functions to join, assist or form
their separate union but bars them from membership in a labor organization of the rank-and-
file employees. This provision obviously allows more than one union in a company.
The right to form a union or association or to self-organization comprehends two (2) broad
notions, to wit: (a) the liberty or freedom, i.e., the absence of restraint which guarantees that
the employee may act for himself without being prevented by law, and (b) the power, by
virtue of which an employee may, as he pleases, join or refrain from joining an association.
Furthermore, it is not denied that in the bargaining history of KNITJOY, the CBA has been
On the other hand, the rank-and-file employees paid on a monthly basis were never included
within its scope. Thus, the negotiations between CFW and KNITJOY following such a
certification could only logically refer to the rank-and-file employees paid on a daily or piece-
rate basis.
(2) No. Considering that (a) the TUPAS solicited certification election was strictly
confined to the rank-and-file employees who are paid on a daily or piece-rate basis, (b) the
results of the election must also necessarily confine the certified union’s representation to the
group it represents and (c) the issue of the plight of the monthly-paid employees was still
pending, KNITJOY and CFW clearly acted with palpable bad faith and malice in including
within the scope of the new CBA these monthly-paid employees. Thus was effected a
conspiracy to defeat and suppress the right of the KMEU and its members to bargain
collectively and negotiate for themselves, to impose upon the latter a contract the negotiation
for which they were not even given notice of, consulted or allowed to participate in, and to
oust from the BLR the pending appeal on the certification issue. In the latter case, KNITJOY
and CFW are guilty of contumacious conduct. It goes without saying then that the new CBA
cannot validly include in its scope or coverage the monthly-paid rank-and-file employees of
bargaining agent, and the negotiation for and the execution of a subsequent CBA between
KNITJOY and the eventual winner in said election. 
GSIS vsKapisananngmgaMangagawasa GSIS, G.R. No. 170132, Dec 6, 2006
FACTS: A 4-day mass action started on October 4, 2004 where participants were GSIS
personnel including Kapisanan mg mgaManggagawasa GSIS (KMG or the Union), a public
sector union of GSIS rank-and-file employees. While Pasay Mayor issued a rally permit, the
GSIS employees was not covered by a priod approved leave.
The GSIS Investigating Unit manager chaged some 110 KMG members for grave misconduct
and conduct prejudicial to the best interest of the service. KMG filed suit to prevent the
suspension of members of KMG claiming that they have a right to rally for their union's
cause.
ISSUE: WON Winston Garcia (GSIS president) have cause to suspend members of
KMG.
HELD: Yes. It should be stressed right off that the civil service encompasses all
branches and agencies of the Government, including government-owned or controlled
corporations (GOCCs) with original charters, like the GSIS, or those created by special law.
As such, employees of covered GOCCs are part of the civil service system and are subject to
circulars, rules and regulations issued by the Civil Service Commission (CSC) on discipline,
attendance and general terms/conditions of employment, inclusive of matters involving self-
organization, strikes, demonstrations and like concerted actions.
The question that immediately comes to the fore, therefore, is whether or not the mass action
staged by or participated in by said GSIS employees partook of a strike or prohibited
concerted mass action. With the view we take of the events that transpired on October 4-7,
2004, what respondents members launched or participated in during that time partook of a
strike or, what contextually amounts to the same thing, a prohibited concerted activity. The
phrase prohibited concerted activity refers to any collective activity undertaken by
government employees, by themselves or through their employees organization, with the
intent of effecting work stoppage or service disruption in order to realize their demands or
force concessions, economic or otherwise; it includes mass leaves, walkouts, pickets and
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acts of similar nature. This was shown when 48% of employees took to the streets on the first
day, leaving the other employees to fend for themselves in a government office.
For, as articulated earlier, any collective activity undertaken by government employees with
the intent of effecting work stoppage or service disruption in order to realize their demands or
force concessions, economic or otherwise, is a prohibited concerted mass action and
doubtless actionable administratively.
The appellate court faulted petitioner Garcia for not first taping existing grievance machinery
and other modes of settlement agreed upon in the GSIS-KMG Collective Negotiations
Agreement (CAN) before going full steam ahead with his formal charges. If the finger of
blame, therefore, is to be pointed at someone for non-exhaustion of less confrontational
remedies, it should be at the respondent union for spearheading a concerted mass action
without resorting to available settlement mechanism. As it were, it was KMG, under Atty.
Alberto Velasco, which opened fire first. That none of the parties bothered to avail of the
grievance procedures under the GSIS-KMG CNA should not be taken against the GSIS. At
best, both GSIS management and the Union should be considered as in pari delicto.
United Pepsi-Cola Supervisory Union vsLaguesma, G.R. No. 122226, Mar 25, 1998
FACTS: Petitioner is a union of supervisory employees. It appears that on March 20,
1995 the union filed a petition for certification election on behalf of the route managers at
Pepsi-Cola Products Philippines, Inc. However, its petition was denied by the med-arbiter
and, on appeal, by the Secretary of Labor and Employment, on the ground that the route
managers are managerial employees and, therefore, ineligible for union membership.
Petitioner filed a motion for reconsideration, pressing for resolution its contention that the first
sentence of Art. 245 of the Labor Code, so far as it declares managerial employees to be
ineligible to form, assist or join unions, contravenes Art. III, §8 of the Constitution which
provides:
The right of the people, including those employed in the public and private sectors, to form
unions, associations, or societies for purposes not contrary to law shall not be abridged.
ISSUES: (1) WON the route managers at Pepsi-Cola Products Philippines, Inc. are
managerial employees.
(2) WON Art. 245, insofar as it prohibits managerial employees from forming,
joining or assisting labor unions, violates Art. III, §8 of the Constitution.
HELD: (1) Yes. The term "manager" generally refers to "anyone who is responsible for
subordinates and other organizational resources."
FIRST-LINE MANAGERS — The lowest level in an organization at which individuals are
responsible for the work of others is called first-line or first-level management. First-line
managers direct operating employees only; they do not supervise other managers.
Examples of first-line managers are the "foreman" or production supervisor in a
manufacturing plant, the technical supervisor in a research department, and the clerical
supervisor in a large office. First-level managers are often called supervisors.
MIDDLE MANAGERS — The term middle management can refer to more than one level in
an organization. Middle managers direct the activities of other managers and
sometimes also those of operating employees. Middle managers' principal
responsibilities are to direct the activities that implement their organizations' policies
and to balance the demands of their superiors with the capacities of their subordinates.
A plant manager in an electronics firm is an example of a middle manager.
TOP MANAGERS — Composed of a comparatively small group of executives, top
management is responsible for the overall management of the organization. It
establishes operating policies and guides the organization's interactions with its
environment. Typical titles of top managers are "chief executive officer," "president,"
and "senior vice-president." Actual titles vary from one organization to another and are
not always a reliable guide to membership in the highest management classification.
"Managerial employees" may therefore be said to fall into two distinct categories: the
"managers" per se, who compose the former group described above, and the "supervisors"
who form the latter group. Whether they belong to the first or the second category, managers,
vis-a-vis employers, are, likewise, employees.
To qualify as managerial employee, there must be a clear showing of the exercise of
managerial attributes under paragraph (m), Article 212 of the Labor Code as amended.
Designations or titles of positions are not controlling. (m) - "Managerial employee" is one who
is vested with powers or prerogatives to lay down and execute management policies and/or
to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of the employer, effectively recommend
such managerial actions if the exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment. All employees not falling within any of
the above definitions are considered rank-and-file employees for purposes of this Book.
That distinction is evident in the work of the route managers which sets them apart from
supervisors in general. Unlike supervisors who basically merely direct operating employees in
line with set tasks assigned to them, route managers are responsible for the success of the
company's main line of business through management of their respective sales teams. Such
management necessarily involves the planning, direction, operation and evaluation of their
individual teams and areas which the work of supervisors does not entail.
(2) No. Art. 245 (which superseded Art. 246) of the Labor Code is the result of
the amendment of the Labor Code in 1989 by R.A. No. 6715, otherwise known as the
Herrera-Veloso Law. Unlike the Industrial Peace Act or the provisions of the Labor Code
which it superseded, R.A. No. 6715 provides separate definitions of the terms "managerial"
and "supervisory employees". Although the definition of "supervisory employees" seems to
have been unduly restricted to the last phrase of the definition in the Industrial Peace Act, the
legal significance given to the phrase "effectively recommends" remains the same. In fact, the
distinction between top and middle managers, who set management policy, and front-line
supervisors, who are merely responsible for ensuring that such policies are carried out by the
rank and file, is articulated in the present definition. When read in relation to this definition in
Art. 212(m), it will be seen that Art. 245 faithfully carries out the intent of the Constitutional
Commission in framing Art. III, §8 of the fundamental law. Nor is the guarantee of
organizational right in Art. III, §8 infringed by a ban against managerial employees forming a
union. The right guaranteed in Art. III, §8 is subject to the condition that its exercise should be
for purposes "not contrary to law." In the case of Art. 245, there is a rational basis for
prohibiting managerial employees from forming or joining labor organizations.
The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured of
their loyalty to the Union in view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in Union membership. After
all, those who qualify as top or middle managers are executives who receive from their
employers information that not only is confidential but also is not generally available to the
public, or to their competitors, or to other employees. It is hardly necessary to point out that to
say that the first sentence of Art. 245 is unconstitutional would be to contradict the decision in
that case.
Republic vs. Kawashima TextimeMfg, G.R. No. 160352, July 23, 2008
FACTS:Kawashima Free Workers Union-PTGWO Local Chapter No. 803 (KFWU) filed a
petition for certification election. Respondent filed a MTD on the ground that KFWU did not
acquire any legal personality because its membership of mixed rank and file and supervisory
employees. Med-Arbiter Bactin found KFWU's legal personality defective and dismissed the
petition for certification election. DOLE reversed the decision while CA reverted to the
previous decision of the Med-Arbiter.
ISSUE: (1) WON mixed membership is a ground for dismissal of a petition for
certification election.
(2) WON the legitimacy of a duly registered labor organization can be collaterally
attacked in a petition for certification election thru a MTD filed by employer.
HELD: (1) R.A. No. 9482 should answer this. A new provision, Article 245-A is inserted
into the Labor Code to read as follows:
"Art. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. - The
inclusion as union members of employees outside the bargaining unit shall not be a ground
for the cancellation of the registration of the union. Said employees are automatically deemed
removed from the list of membership of said union." Moreover, under Section 4, a pending
petition for cancellation of registration will not hinder a legitimate labor organization from
initiating a certification election. Furthermore, under Section 12 of R.A. No. 9481, employers
have no personality to interfere with or thwart a petition for certification election filed by a
legitimate labor organization (Employer as Bystander rule).
However, R.A. No. 9481 took effect only on June 14, 2007; hence, it applies only to labor
representation cases filed on or after said date. As the petition for certification election
subject matter of the present petition was filed by KFWU on January 24, 2000, R.A. No. 9481
cannot apply to it. R.A. No. 875 is controlling in this case.
Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the
legitimacy of the labor organization. It may be observed that nothing is said of the effect of
such ineligibility upon the union itself or on the status of the other qualified members thereof
should such prohibition be disregarded. Considering that the law is specific where it intends
to divest a legitimate labor union of any of the rights and privileges granted to it by law, the
absence of any provision on the effect of the disqualification of one of its organizers upon the
legality of the union, may be construed to confine the effect of such ineligibility only upon the
membership of the supervisor. In other words, the invalidity of membership of one of the
organizers does not make the union illegal, where the requirements of the law for the
organization thereof are, nevertheless, satisfied and met.
Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court,
citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be
a legitimate labor organization. Not being one, an organization which carries a mixture of
rank-and-file and supervisory employees cannot possess any of the rights of a legitimate
labor organization, including the right to file a petition for certification election for the purpose
of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order
allowing a certification election, to inquire into the composition of any labor organization
whenever the status of the labor organization is challenged on the basis of Article 245 of the
Labor Code.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by
Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the
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requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules - that the petition for
certification election indicate that the bargaining unit of rank-and-file employees has not been
mingled with supervisory employees - was removed. Instead, what the 1997 Amended
Omnibus Rules requires is a plain description of the bargaining unit. All said, while the latest
issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, had already set the tone for
it. Toyota and Dunlop no longer hold sway in the present altered state of the law and the
rules. Hence, Court reverses the ruling of the CA and reinstates that of the DOLE granting
the petition for certification election of KFWU.
(2) Except when it is requested to bargain collectively, an employer is a mere
bystander to any petition for certification election; such proceeding is non-adversarial and
merely investigative, for the purpose thereof is to determine which organization will represent
the employees in their collective bargaining with the employer. 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.
San Miguel Corp. Supervisors & Exempt Employees Union vs. Laguesma, G.R. No. 110399,
Aug 15, 1997
FACTS: Petitioner union filed before the Department of Labor and Employment (DOLE) a
Petition for Direct Certification or Certification Election among the supervisors and exempt
employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and
Otis. Med-Arbiter ordered the conduct of certification election which respondent San Miguel
Corporation pointed out that Med-Arbiter should not have grouped together the three
separate plants into one bargaining unit and in including supervisory levels 3 and above
whose positions are confidential in nature. Undersecretary Laguesma granted the
reconsideration and directed the conduct of separate certification elections. Upon San
Miguel's MR, a further Order was issued declaraingthat S3 and S4 Supervisors and the so-
called exempt employees are admittedly confidential employees and therefore, they are not
allowed to form, join or assist a labor union for purposes of collective bargaining following the
above court's ruling. Consequently, they are not allowed to participate in the certification
election.
ISSUES: (1) WON Supervisory employees 3 and 4 and the exempt employees of the
company are considered confidential employees, hence ineligible from joining a union.
(2) WON they should constitute an appropriate single bargaining unit.
HELD: (1) No. There is no question that the said employees, supervisors and the
exempt employees, are not vested with the powers and prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss
employees. They are, therefore, not qualified to be classified as managerial employees who,
under Article 245 of the Labor Code, are not eligible to join, assist or form any labor
organization. In the very same provision, they are not allowed membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
(2) Yes. Confidential employees are those who (1) assist or act in a confidential
capacity, (2) to persons who formulate, determine, and effectuate management policies in the
field of labor relations. The two criteria are cumulative, and both must be met if an employee
is to be considered a confidential employee — that is, the confidential relationship must exist
between the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations.
The exclusion from bargaining units of employees who, in the normal course of their duties,
become aware of management policies relating to labor relations is a principal objective
sought to be accomplished by the ''confidential employee rule." The broad rationale behind
this rule is that employees should not be placed in a position involving a potential conflict of
interests. An important element of the "confidential employee rule" is the employee's need to
use labor relations information. Thus, in determining the confidentiality of certain employees,
a key question frequently considered is the employee's necessary access to confidential
labor relations information. Granting arguendo that an employee has access to confidential
labor relations information but such is merely incidental to his duties and knowledge thereof is
not necessary in the performance of such duties, said access does not render the employee
a confidential employee.
In the case at bar, supervisors 3 and above may not be considered confidential employees
merely because they handle "confidential data" as such must first be strictly classified as
pertaining to labor relations for them to fall under said restrictions. The information they
handle are properly classifiable as technical and internal business operations data which, to
our mind, has no relevance to negotiations and settlement of grievances wherein the
interests of a union and the management are invariably adversarial. Since the employees are
not classifiable under the confidential type, this Court rules that they may appropriately form a
bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they
are confidential employees, jurisprudence has established that there is no legal prohibition
against confidential employees who are not performing managerial functions to form and join
a union.
An appropriate bargaining unit may be defined as "a group of employees of a given
employer, comprised of all or less than all of the entire body of employees, which the
collective interest of all the employees, consistent with equity to the employer, indicate to be
best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law."
In light of these considerations, the Solicitor General has opined that separate bargaining
units in the three different plants of the division will fragmentize the employees of the said
division, thus greatly diminishing their bargaining leverage. The fact that the three plants are
located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro
Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be
completely disregarded if the communal or mutual interests of the employees are not
sacrificed as demonstrated. Neither are there regional differences that are likely to impede
the operations of a single bargaining representative.
Sugbuanan Rural Bank vs. Laguesma, G.R. No. 116194, February 2, 2000
FACTS:Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-registered
banking institution with principal office in Cebu City and a branch in Mandaue City. Private
respondent SRBI Association of Professional, Supervisory, Office, and Technical Employees
Union (APSOTEU) is a legitimate labor organization affiliated with the Trade Unions
Congress of the Philippines (TUCP).1âwphi1.nêt
On October 8, 1993, the DOLE Regional Office in Cebu City granted Certificate of
Registration No. R0700-9310-UR-0064 to APSOTEU-TUCP, hereafter referred to as the
union.
On October 26, 1993, the union filed a petition for certification election of the supervisory
employees of SRBI. It alleged, among others, that: (1) APSOTEU-TUCP was a labor
organization duly-registered with the Labor Department; (2) SRBI employed 5 or more
supervisory employees; (3) a majority of these employees supported the petition: (4) there
was no existing collective bargaining agreement (CBA) between any union and SRBI; and (5)
no certification election had been held in SRBI during the past 12 months prior to the petition.
On October 28, 1993, the Med-Arbiter gave due course to the petition. The pre-certification
election conference between SRBI and APSOTEU-TUCP was set for November 15, 1993.
On November 12, 1993, SRBI filed a motion to dismiss the union’s petition. It sought to
prevent the holding of a certification election on two grounds. First, that the members of
APSOTEU-TUCP were in fact managerial or confidential employees.
ISSUES: (1) Whether or not the members of the respondent union are managerial
employees and/or highly-placed confidential employees, hence prohibited by law from joining
labor organizations and engaging in union activities.
(2) Whether or not the Med-Arbiter may validly order the holding of a certification
election upon the filing of a petition for certification election by a registered union, despite the
petitioner’s appeal pending before the DOLE Secretary against the issuance of the union’s
registration.
HELD: (1) Petitioner’s explanation does not state who among the employees has access to
information specifically relating to its labor to relations policies. Even Cashier Patricia Maluya,
who serves as the secretary of the bank’s Board of Directors may not be so classified.
Confidential employees are those who (1) assist or act in a confidential capacity, in regard (2)
to persons who formulate, determine, and effectuate management policies [specifically in the
field of labor relations].9 The two criteria are cumulative, and both must be met if an
employee is to be considered a confidential employee — that is, the confidential relationship
must exist between the employee and his superior officer; and that officer must handle the
prescribed responsibilities relating to labor relations.
Art. 245 of the Labor Code does not directly prohibit confidential employees from engaging in
union activities. However, under the doctrine of necessary implication, the disqualification of
managerial employees equally applies to confidential employees. The confidential-employee
rule justifies exclusion of confidential employees because in the normal course of their duties
they become aware of management policies relating to labor relations. It must be stressed,
however, that when the employee does not have access to confidential labor relations
information, there is no legal prohibition against confidential employees from forming,
assisting, or joining a union.
(2) One of the rights of a legitimate labor organization under Article 242(b) of the
Labor Code is the right to be certified as the exclusive representative of all employees in an
appropriate bargaining unit for purposes of collective bargaining. Having complied with the
requirements of Art. 234, it is our view that respondent union is a legitimate labor union.
Article 257 of the Labor Code mandates that a certification election shall automatically be
conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor
organization.16 Nothing is said therein that prohibits such automatic conduct of the
certification election if the management appeals on the issue of the validity of the union’s
registration. On this score, petitioner’s appeal was correctly dismissed.
Coca-Cola vs. IlocosProf’l&Tech’l Employees Union, G.R. No. 193798, Sept 9, 2015
FACTS: Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic corporation
duly organized and operating under the Philippine laws. It is primarily engaged in the
beverage business, which includes the manufacture of carbonated soft drinks. On the other
hand, respondent Ilocos Professional and Technical Employees Union (IPTEU) is a
 4
registered independent labor organization with address at CCBPI Ilocos Plant in Barangay
Catuguing, San Nicolas, Ilocos Norte.
On July 9, 2007, IPTEU filed a verified Petition for certification election seeking to represent a
bargaining unit consisting of approximately twenty-two (22) rank-and-file professional and
technical employees of CCBPI Ilocos Norte Plant. CCBPI prayed for the denial and dismissal
of the petition, arguing that the some members are supervisory and confidential employees;
hence, ineligible for inclusion as members of IPTEU.
ISSUE: WON the members are confidential employees and should be exempt.
HELD: No. Even if the 16 challenged voters may have access to information which are
confidential from the business standpoint, the exercise of their right to self-organization could
not be defeated because their common functions do not show that there exist a confidential
relationship within the realm of labor relations.
In this case, organizational charts, detailed job descriptions, and training programs were
presented by CCBPI before the Mediator-Arbiter, the SOLE, and the CA. Despite these, the
Mediator-Arbiter ruled that employees who encounter or handle trade secrets and financial
information are not automatically classified as confidential employees. It was admitted that
the subject employees encounter and handle financial as well as physical production data
and other information which are considered vital and important from the business operations'
standpoint. Nevertheless, it was opined that such information is not the kind of information
that is relevant to collective bargaining negotiations and settlement of grievances as would
classify them as confidential employees. The SOLE, which the CA affirmed, likewise held that
the questioned voters do not have access to confidential labor relations information.
Central Negros Electric Cooperative vs. DOLE, G.R. No. 94045, September 13, 1991
FACTS: On August 15, 1987, CENECO entered into a collective bargaining agreement with
CURE, a labor union representing its rank-and-file employees, providing for a term of three
years retroactive to April 1, 1987 and extending up to March 31, 1990. On December 28,
1989, CURE wrote CENECO proposing that negotiations be conducted for a new collective
bargaining agreement (CBA).
On January 18, 1990, CENECO denied CURE’s request on the ground that, under applicable
decisions of the Supreme Court, employees who at the same time are members of an electric
cooperative are not entitled to form or join a union.
Prior to the submission of the proposal for CBA renegotiation, CURE members, in a general
assembly held on December 9, 1989, approved Resolution No. 35 whereby it was agreed
that ‘tall union members shall withdraw, retract, or recall the union members’ membership
from Central Negros Electric Cooperative, Inc. in order to avail (of) the full benefits under the
existing Collective Bargaining Agreement entered into by and between CENECO and CURE,
and the supposed benefits that our union may avail of under the renewed CBA.
However, the withdrawal from membership was denied by CENECO on February 27, 1990
under Resolution No. 90.
Issue: WON the employees of CENECO who withdrew their membership from the
cooperative are entitled to form or join CURE for purposes of the negotiations for a collective
bargaining agreement proposed by the latter.
Held:The right of the employees to self-organization is a compelling reason why their
withdrawal from the cooperative must be allowed. As pointed out by CURE, the resignation of
the member- employees is an expression of their preference for union membership over that
of membership in the cooperative. The avowed policy of the State to afford fall protection to
labor and to promote the primacy of free collective bargaining mandates that the employees’
right to form and join unions for purposes of collective bargaining be accorded the highest
consideration.
Thus, member employees of a cooperative may withdraw as members of the cooperative in
order to join labor union. Membership in a cooperative is voluntary; inherent in it is the right
not to join.
___________________________
NOTES: (San Jose Electric Service Cooperative vs. Ministry of Labor)
1. A cooperative, therefore, is by its nature different from an ordinary business concern being
run either, by persons, partnerships or corporations. Its owners and/or members are the ones
who run and operate the business while the others are its employees.
2. An employee therefore of such a cooperative who is a member and co-owner thereof
cannot invoke the right to collective bargaining for certainly an owner cannot bargain with
himself or his co-owners. Employees of cooperatives who are themselves members of the
cooperative have no right to form or join labor organizations for purposes of collective
bargaining for being themselves co-owners of the cooperative.
3. However, in so far as it involves cooperatives with employees who are not members or co-
owners thereof, certainly such employees are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as are enshrined in the
Constitution and existing laws of the country.
Int’l Catholic Immigration Commission vs. Calleja, G.R. No. 85750, September 28, 1990
FACTS: ICMC an accredited refugee processing center in Morong Bataan, is a non-profit
agency involved in international humanitarian and voluntary work. It is duly registered with the
United Nations Economic and Social Council (ECOSOC) and enjoys Consultative status II. It
has the activities parallel to those of the International Committee for Migrtion (ICM) and the
International Committee of the Red Cross (ICRC).
On July 14, 1986, Trade Union of the Philippines and Allied Services (TUPAS) filed with the
then Ministry of Labor and Employment a Petition for Certification Election among the rank
and file members employed by the ICMC. The latter opposed the petition on the ground that it
enjoys diplomatic immunity.
In the second case, the International Rice Research Institute was a fruit of memorandum of
understanding between the Philippine government and the Ford and Rochefeller
Foundations. It was intended to be an autonomous, philanthropic tax-free, non-profit, non
stock organization designed to carry out the principal objective of conducting “ basic research
on the rice plant.”
It was organized and registered with the SEC as a private corporation subject to all laws and
regulations. However, by virtue of P.D no. 1620, IRRI was granted the status, prerogatives,
privileges and immunities of an international organization.
The KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR
ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE (Kapisanan) filed a petition for
direct certification election with regional office of the Department of Labor and Employment.
IRRI opposed the petition invoking Pres. Decree no.1620 conferring upon it the status of an
international organization and granting it immunity from all civil, criminal, and administrative
proceedings under Philippine laws. The Med-Arbiter upheld the opposition on the basis of PD
1620 and dismissed the petition for direct certification.
On appeal by BLR Director, set aside the med-arbiter’s decision and contends that
immunities and privileges granted to IRRI do not include exemption from coverage of our
labor laws.
ISSUES: (1) Whether or not the grant of diplomatic privileges and immunities to ICMC
extends to immunity from the application of Philippine labor laws.
(2) Whether or not the Secretary of Labor committed grave abuse of discretion in
dismissing the petition for certification election filed by Kapisanan.
HELD: (1) Yes. It is a recognized principle of international law and under our system of
separation of powers that diplomatic immunity is essentially a political question and courts
should refuse to look beyond a determination by the executive branch of the government, and
where the plea of diplomatic immunity is recognized and affirmed by the executive branch of
the government as in the case at bar, it is then the duty of the courts to accept the claim of
immunity upon appropriate suggestion by the principal law officer of the government . . . or
other officer acting under his direction. Hence, in adherence to the settled principle that
courts may not so exercise their jurisdiction . . . as to embarrass the executive arm of the
government in conducting foreign relations, it is accepted doctrine that in such cases the
judicial department of (this) government follows the action of the political branch and will not
embarrass the latter by assuming an antagonistic jurisdiction.
Employees are not without recourse whenever there are disputes to be settled because each
specialized agency shall make provision for appropriate modes of settlement of disputes out
of contracts or other disputes of private character to which the specialized agency is a party.
Moreover, pursuant to article IV of memorandum of abuse of privilege by ICMC, the
government is free to withdraw the privileges and immunities accorded.
(2) No. There are basically three propositions underlying the grant of
international immunities to international organizations. These principles, contained in the ILO
Memorandum are stated thus: 1) international institutions should have a status which protects
them against control or interference by any one government in the performance of functions
for the effective discharge of which they are responsible to democratically constituted
international bodies in which all the nations concerned are represented; 2) no country should
derive any national financial advantage by levying fiscal charges on common international
funds; and 3) the international organization should, as a collectivity of States members, be
accorded the facilities for the conduct of its official business customarily extended to each
other by its individual member States.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their
international character and respective purposes. The objective is to avoid the danger of
partiality and interference by the host country in their internal workings. The exercise of
jurisdiction by the Department of Labor in these instances would defeat the very purpose of
immunity, which is to shield the affairs of international organizations, in accordance with
international practice, from political pressure or control by the host country to the prejudice of
member States of the organization, and to ensure the unhampered performance of their
functions.
Neither are the employees of IRRI without remedy in case of dispute with management as, in
fact, there had been organized a forum for better management-employee relationship as
evidenced by the formation of the Council of IRRI Employees and Management (CIEM)
wherein "both management and employees were and still are represented for purposes of
maintaining mutual and beneficial cooperation between IRRI and its employees." The
existence of this Union factually and tellingly belies the argument that Pres. Decree No. 1620,
which grants to IRRI the status, privileges and immunities of an international organization,
deprives its employees of the right to self-organization.
NUWHRAIN vs. Sec. of Labor, G.R. No. 181531, July 31, 2009
 5
FACTS: A certification election was conducted on June 16, 2006 among the rank-and-file
employees of respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following
results:
EMPLOYEES IN VOTERS’ LIST = 353
TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU =169
NO UNION = 1 be certified as the sole and exclusive bargaining agent of all the workers in the appropriate
SPOILED = 3
SEGREGATED = 22
In view of the significant number of segregated votes, contending unions, petitioner,
NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union
(HIMPHLU), referred the case back to Med-Arbiter to decide which among those votes would
be opened and tallied. 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 and, pursuant to
the existing Collective Bargaining Agreement (CBA), such employees cannot vote. It bears
noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a probationary
employee, was counted.
Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes, specially
those cast by the 11 dismissed employees and those cast by the six supposedly supervisory
employees of the Hotel.
Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment
(SOLE), arguing that the votes of the probationary employees should have been opened
considering that probationary employee Gatbonton’s vote was tallied. And petitioner averred
that respondent HIMPHLU, which garnered 169 votes, should not be immediately certified as
the bargaining agent, as the opening of the 17 segregated ballots would push the number of
valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered
would be one vote short of the majority which would then become 169.
Secretary affirmed the decision of the med-arbiter. In fine, the SOLE concluded that the
certification of HIMPHLU as the exclusive bargaining agent was proper.
ISSUES: (1) whether employees on probationary status at the time of the certification
elections should be allowed to vote
(2) whether HIMPHLU was able to obtain the required majority for it to be
certified as the exclusive bargaining agent.
HELD: (I)On the first issue, the Court rules in the affirmative.
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. As Airtime Specialists,
Inc. v. Ferrer-Calleja holds:
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.” (Emphasis supplied)
For purposes of this section (Rule II, Sec. 2 of Department Order No. 40-03, series of 2003),
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.
(Emphasis supplied)
The provision in the CBA disqualifying probationary employees from voting cannot override
the Constitutionally-protected right of workers to self-organization, as well as the provisions of
the Labor Code and its Implementing Rules on certification elections and jurisprudence
thereon.
A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they
are not contrary to law, morals, good customs, public order or public policy.
(2) 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.
Prescinding from the Court’s ruling that all the probationary employees’ votes should be
deemed valid votes while that of the supervisory employees should be excluded, it follows
that the number of valid votes cast would increase – from 321 to 337. Under Art. 256 of the
Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters shall
bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able
to obtain a majority vote. The position of both the SOLE and the appellate court that the
opening of the 17 segregated ballots will not materially affect the outcome of the certification
election as for, so they contend, even if such member were all in favor of petitioner, still,
HIMPHLU would win, is thus untenable.
It bears reiteration that 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. The opening of the segregated but valid votes has thus become
material.
To be sure, the conduct of a certification election has a two-fold objective: to determine the
appropriate bargaining unit and to ascertain the majority representation of the bargaining
representative, if the employees desire to be represented at all by anyone. It is not simply the
determination of who between two or more contending unions won, but whether it effectively
ascertains the will of the members of the bargaining unit as to whether they want to be
represented and which union they want to represent them.
Having declared that no choice in the certification election conducted obtained the required
majority, it follows that a run-off election must be held to determine which between HIMPHLU
and petitioner should represent the rank-and-file employees.
____________
NOTES:
A run-off election refers to an election between the labor unions receiving the 2 highest
number of votes in a certification or consent election with 3 or more choices, where such a
certified or consent election results in none of the 3 or more choices receiving the majority of
the valid votes cast; provided that the total number of votes for all contending unions is at
least 50% of the number of votes cast.
Heirs of Teodulo M. Cruz vs. CIR, G.R. No. L-23331-32, December 27, 1969
FACTS: June 21, 1952, the Santiago Labor Union, composed of workers of the Santiago
Rice Mill, a business enterprises engaged in the, buying. and milling of palay at Santiago,
Isabela, and owned and operated by King Hong Co., Inc., filed before the respondent Court
of Industrial Relations (CIR) cases for petition for overtime pay, premium pay for night,
Sunday and holiday work, and for reinstatement of workers illegally laid off. CIR favored the
union by a split decision of 3-2 vote. The case reached the Supreme Court but the SC still
favored the union. The SC remanded the records for enforcement by respondent CIR. In
examination of books, said CIR’s Chief Examiner filed his Partial Report regarding the
computation of the benefits rendered in the case in favor of the Union.
Petitioners claim that in this computation of the Examiner did not, include the claims of 70
other laborers whose total claims (for back wages), at the rate of P6,300.00 each and would
be P441,000.00. Therefore, the correct. grand total amount due the laborers would be
864,756.74.
The trial judge took no action on the latest Urgent Motion of the union, wherein it emphasized
that respondent, with Court’s action rejecting its appeal, no longer had any excuse for
refusing to comply with the deposit Order. Instead, an unscheduled conference was called
and held on October 31, 1963 in the chambers of the trial judge, and attended by
representatives of respondent firm, including their counsels of record and the President of the
union and 8 directors of the union. Four of these nine union representatives, including the
union president himself, had no claims or awards whatever under the judgment. Said union
officials were not assisted by counsel, as petitioner Mary Concepcion, counsel of record of
the union, was not present, not having been notified of the conference.
In this conference respondent firm made again the same offer to settle and quitclaim the
judgment in favor of the union members for the same amount of P110,000.00, which offer
had already been ‘rejected by the union at the earlier conference held on June 25, 1963. But
this time, respondent and the directors of the union decided to settle the case amicably with
the payment by the firm of the same amount of P110,000.00 which was deposited with the
Court’s disbursing officer “immediately upon the signing of the settlement which will be
prepared by the respondent firm through its counsel.”
One of the union director together with 49 of its members questioned the amicable settlement
that took place. They claim that the Board of Directors did not have any express authority of
the members of the Santiago Labor Union to enter into any compromise for the sum of
P110,000.00, that it was tainted by apparent bad faith on the part of the President of the
Union, that the amount of P110,000.00 is unconscionable, considering, that the total claims of
the members of the union is more than P400,000.00.
 6
ISSUE: Whether the amicable settlement is valid.
HELD: NO. Petitioners were not accorded due process of law. The union was deprived of the
assistance of its counsel. The lack or due deliberation and caution in the trial judge’s instant
approval of the settlement is seen from the stipulations therein that the union thereby waived
and quitclaimed any and all claims which it may have against the respondent, as well as the
claim of each and every one of the members of the union against respondent, when precisely
the authority of the union board members to enter into any such compromise or settlement
was under express challenge by petitioner Magalpo, a board member herself which the trial
judge completely disregarded.
Petitioners were deprived of the formal conference on the and of their right to be assisted by
the union counsel as expressly requested, so that a fair hearing could be accorded
petitioners and an opportunity afforded them to air their serious charges of bad faith and lack
authority against the Union leadership. Certainly, all these serious questions and charges
made by petitioners could have been threshed out and verified, if the formal conference had
been held with the presence of union counsel.
The transcript of the conference is deficient and does not reflect the actual discussions and
proceedings. This is to be deplored, for in a matter of such great importance, especially
where the union officials were unassisted by counsel in an unscheduled conference, care
should be taken by the trial judge that the proceedings are faithfully recorded.
We find the forcing through of the settlement arbitrary, unfair and unconscionable.
Another reason for striking down the settlement is the lack of any express or specific authority
of the president and majority. of the union board of directors to execute the same and scale
down the estimated P423,756.74 judgment liability of respondent firm in favor of the
individual union members to P110,000.00. On the contrary, petitioner board member
Magalpo timely challenged the authority or the union board to execute any such settlement,
expressly informing the trial judge that the union had specifically appointed an entity in
Manila, the “CREAM, Inc.,” as its attorney in-fact and “exclusive authorized representative for
the evaluation, adjustment and -liquidation or its claim against respondent. These union
members have repudiated the former union president, Maylem and his board of directors, for
having betrayed the union members, and the new union leadership.
The authority of the union, to execute a settlement of the judgment award in favor of the
individual union members, cannot be presumed but must be expressly granted.
Just as this Court has stricken down unjust exploitation of laborers by oppressive employers,
so will it strike down their unfair treatment by their own unworthy leaders. The Constitution
enjoins the State to afford protection to labor. Fair dealing is equally demanded of unions as
well as of employers in their dealings with employees. The union has been evolved as an
organization of collective strength for the protection of labor against the unjust exactions of
capital, but equally important is the requirement of fair dealing between the union and its
members, which is fiduciary in nature, and arises out of two factors: “one is the degree of
dependence of the individual employee on the union organization; the other, a corollary of the
first, is the comprehensive power vested in the union with respect to the individual.” The
union may, be considered but the agent of its members for the purpose of securing for them
fair and just wages and good working conditions and is subject to the obligation of giving the
members as its principals all information relevant to union and labor matters entrusted to it.
The union leadership in the case at bar was recreant in its duty towards the union members
in apparently having failed to disclose to the union members the full situation of their
judgment credit against respondent, to wit, that they were in the advantageous position of
being able to require enforcement of the respondent court’s P200,000.00-deposit order, and
in presuming that it had authority to waive and quitclaim the estimated P423,756.74-judgment
credit of the union members for the unconscionable amount of P110,000.00, which had
already been previously rejected by the workers. Respondent firm could not claim that it dealt
in good faith with the union officials, for it hastily executed the purported settlement
notwithstanding the serious charges of bad faith against the union leadership, and the non-
holding of the scheduled conference where the union leaders, at their express request, could
be duly assisted by union counsel.
The interests of the individual worker can be better protected on the whole by a strong union
aware of its moral and legal obligations to represent the rank and file faithfully and secure for
them the best wages and working terms and conditions in the process of collective
bargaining. As has been aptly pointed out, the will of the majority must prevail over that of the
minority in the process, for “under the philosophy of collective responsibility, an employer who
bargains in good faith should be entitled to rely upon the promises and agreements of the
union representatives with whom he must deal. under the compulsion of, law and contract.
The ‘collective bargaining process should be carried on between parties who can mutually
respect and rely upon the authority of each other.” Where, however, collective bargaining
process is not involved, and what is at stake are back wages already earned by the individual
workers by way of overtime, premium and differential pay, and final judgment has been
rendered in their favor, as in the present case, the real parties in interest with direct material
interest, as against the union which has only served as a vehicle for collective action to
enforce their just claims, are the individual workers themselves. Authority of the union to
waive or quitclaim all or part of the judgment award in favor of the individual workers cannot
be lightly presumed but must be expressly granted, and the employer, as judgment debtor,
must deal in all good faith with the union as the agent of the individual workers. The Court in
turn should certainly verify and assure itself of the fact and extent of the authority of the union
leadership to execute any compromise or settlement of the judgment on behalf of the
individual workers who are the real judgment creditors.
The settlement in the case at bar was precipitately approved without verification of the union
boards authority to execute the compromise settlement and that there was no such authority.
Victoriano vs. Elizalde Rope Workers’ Union, G.R. No. L-25246, September 12, 1974
FACTS: Benjamin Victoriano (Appellee), a member of the religious sect known as the
“Iglesiani Cristo”, had been in the employ of the Elizalde Rope Factory, Inc. (Company) since
1958. He was a member of the Elizalde Rope Workers’ Union (Union) which had with the
Company a CBA containing a closed shop provision which reads as follows: “Membership in
the Union shall be required as a condition of employment for all permanent employees
workers covered by this Agreement.”
Under Sec 4(a), par 4, of RA 975, prior to its amendment by RA 3350, the employer was not
precluded “from making an agreement with a labor organization to require as a condition of
employment membership therein, if such labor organization is the representative of the
employees.” On June 18, 1961, however, RA 3350 was enacted, introducing an amendment
to par 4 subsection (a) of sec 4 of RA 875, as follows: “xxx but such agreement shall not
cover members of any religious sects which prohibit affiliation of their members in any such
labor organization”.
Being a member of a religious sect that prohibits the affiliation of its members with any labor
organization, Appellee presented his resignation to appellant Union. The Union wrote a
formal letter to the Company asking the latter to separate Appellee from the service because
he was resigning from the Union as a member. The Company in turn notified Appellee and
his counsel that unless the Appellee could achieve a satisfactory arrangement with the Union,
the Company would be constrained to dismiss him from the service.
Appellee filed an action for injunction to enjoin the Company and the Union from dismissing
Appellee. The Union invoked the “union security clause” of the CBA and assailed the
constitutionality of RA 3350 and contends it discriminatorily favors those religious sects which
ban their members from joining labor unions.
ISSUE:Whether Appellee has the freedom of choice in joining the union or not.
HELD:YES. The Constitution and RA 875 recognize freedom of association. Sec 1 (6) of Art
III of the Constitution of 1935, as well as Sec 7 of Art IV of the Constitution of 1973, provide
that the right to form associations or societies for purposes not contrary to law shall not be
abridged. Section 3 of RA 875 provides that employees shall have the right to self-
organization and to form, join of assist labor organizations of their own choosing for the
purpose of collective bargaining and to engage in concerted activities for the purpose of
collective bargaining and other mutual aid or protection. What the Constitution and the
Industrial Peace Act recognize and guarantee is the “right” to form or join associations. A
right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the
absence of legal restraint, whereby an employee may act for himself without being prevented
by law; and second, power, whereby an employee may, as he pleases, join or refrain from
joining an association. It is, therefore, the employee who should decide for himself whether
he should join or not an association; and should he choose to join, he himself makes up his
mind as to which association he would join; and even after he has joined, he still retains the
liberty and the power to leave and cancel his membership with said organization at any time.
The right to join a union includes the right to abstain from joining any union. The law does not
enjoin an employee to sign up with any association.
The right to refrain from joining labor organizations recognized by Section 3 of the Industrial
Peace Act is, however, limited. The legal protection granted to such right to refrain from
joining is withdrawn by operation of law, where a labor union and an employer have agreed
on a closed shop, by virtue of which the employer may employ only members of the collective
bargaining union, and the employees must continue to be members of the union for the
duration of the contract in order to keep their jobs. By virtue of a closed shop agreement,
before the enactment of RA 3350, if any person, regardless of his religious beliefs, wishes to
be employed or to keep his employment he must become a member of the collective
bargaining union. Hence, the right of said employee not to join the labor union is curtailed and
withdrawn.
To that all-embracing coverage of the closed shop arrangement, RA No.3350 introduced an
exception, when it added to Section 4 (a) (4) of the Industrial Peace Act the following proviso:
“but such agreement shall not cover members of any religious sects which prohibit affiliation
of their members in any such labor organization”. Republic Act No. 3350 merely excludes
ipso jure from the application and coverage of the closed shop agreement the employees
belonging to any religious sects which prohibit affiliation of their members with any labor
organization. What the exception provides is that members of said religious sects cannot be
compelled or coerced to join labor unions even when said unions have closed shop
agreements with the employers; that in spite of any closed shop agreement, members of said
religious sects cannot be refused employment or dismissed from their jobs on the sole
ground that they are not members of the collective bargaining union. It does not prohibit the
members of said religious sects from affiliating with labor unions. It still leaves to said
members the liberty and the power to affiliate, or not to affiliate, with labor unions. If,
notwithstanding their religious beliefs, the members of said religious wets prefer to sign up
with the labor union, they can do so. If in deference and fealty to their religious faith, they
refuse to sign up, they can do so; the law does not coerce them to join; neither does the law
prohibit them from joining, and neither may the employer or labor union compel them to join.
The Company was partly absolved by law from the contractual obligation it had with the
Union of employing only Union members in permanent positions. It cannot be denied,
therefore, that there was indeed an impairment of said union security clause.
 7
The prohibition to impair the obligation of contracts is not absolute and unqualified. The
prohibition is general. The prohibition is not to be read with literal exactness, for it prohibits
unreasonable impairment only. In spite of the constitutional prohibition, the State continues to
possess authority to safeguard the vital interests of its people. Legislation appropriate to
safeguarding said interests may modify or abrogate contracts already in effect. For not only
are existing laws read into contracts in order to fix the obligations as between the parties, but
the reservation of essential attributes of sovereign power is also read into contracts as a
postulate of the legal order. The contract clause of the Constitution. must be not only in
harmony with, but also in subordination to, in appropriate instances, the reserved power of
the state to safeguard the vital interests of the people. This has special application to
contracts regulating relations between capital and labor which are not merely contractual, and
said labor contracts, for being impressed with public interest, must yield to the common good.
The purpose to be achieved by RA 3350 is to insure freedom of belief and religion, and to
promote the general welfare by preventing discrimination against those members of religious
sects which prohibit their members from joining labor unions, confirming thereby their natural,
statutory and constitutional right to work, the fruits of which work are usually the only means
whereby they can maintain their own life and the life of their dependents.
The individual employee, at various times in his working life, is confronted by two aggregates
of power collective labor, directed by a union, and collective capital, directed by management.
The union, an institution developed to organize labor into a collective force and thus protect
the individual employee from the power of collective capital, is, paradoxically, both the
champion of employee rights, and a new source of their frustration. Moreover, when the
Union interacts with management, it produces yet a third aggregate of group strength from
which the individual also needs protection – the collective bargaining relationship.
The free exercise of religious profession or belief is superior to contract rights. In case of
conflict, the latter must yield to the former.
The purpose of RA 3350 is to serve the secular purpose of advancing the constitutional right
to the free exercise of religion, by averting that certain persons be refused work, or be
dismissed from work, or be dispossessed of their right to work and of being impeded to
pursue a modest means of livelihood, by reason of union security agreements. To help its
citizens to find gainful employment whereby they can make a living to support themselves
and their families is a valid objective of the state. The Constitution even mandated that “the
State shall afford protection to labor, promote full employment and equality in employment,
ensure equal work opportunities regardless of sex, race or creed and regulate the relation
between workers and employers.”
The primary effects of the exemption from closed shop agreements in favor of members of
religious sects that prohibit their members from affiliating with a labor organization, is the
protection of said employees against the aggregate force of the collective bargaining
agreement, and relieving certain citizens of a burden on their religious beliefs; and by
eliminating to a certain extent economic insecurity due to unemployment, which is a serious
menace to the health, morals, and welfare of the people of the State, the Act also promotes
the well-being of society. It is our view that the exemption from the effects of closed shop
agreement does not directly advance, or diminish, the interests of any particular religion.
Although the exemption may benefit those who are members of religious sects that prohibit
their members from joining labor unions, the benefit upon the religious sects is merely
incidental and indirect.
The purpose of RA 3350 was not to grant rights to labor unions. The rights of labor unions
are amply provided for in Republic Act No. 875 and the new Labor Code.
The Act does not require as a qualification, or condition, for joining any lawful association
membership in any particular religion or in any religious sect; neither does the Act require
affiliation with a religious sect that prohibits its members from joining a labor union as a
condition or qualification for withdrawing from a labor union. Joining or withdrawing from a
labor union requires a positive act Republic Act No. 3350 only exempts members with such
religious affiliation from the coverage of closed shop agreements. So, under this Act, a
religious objector is not required to do a positive act-to exercise the right to join or to resign
from the union. He is exempted ipso jure without need of any positive act on his part.
Flora vs. Oximana, G.R. No. L-19745, January 31, 1964, 10 SCRA 212
FACTS: In 1926, Oximana was convicted of the crime of abusosdeshonestos (moral
turpitude) for which he was sentenced to 3 years 6 months and 25 days imprisonment which
he served until December 4, 1930. As a consequence, a complaint was lodged against him
before the Court of Industrial Relations on February 2, 1961 by a prosecutor of said court
seeking as president of the union on the strength of the previous of Section 17(e) of Republic
Act 875. In this complaint, the union was made party respondent because of complainant's
desire to restrain Oximana from performing the duties and functions of his office as president
and to have a new election held for the purpose of electing a new qualified president.
When the case was called for hearing, the parties submitted a stipulation of facts wherein,
among other things, it was agreed that on April 1, 1961 the President of the Philippines
granted Oximana full, absolute and plenary pardon for the crime he had committed in 1926,
thereby restoring him to the full enjoyment of his civil and political rights, one of which is the
holding of the position now disputed by complainants.
ISSUE: WON Oximana can be disqualified as president due to the offense he was convicted
of.
HELD: No. It has been held that "A full and complete pardon, granted after conviction,
removes all penalties and legal disabilities, and restores the defendant to all his civil rights."
Continuing, the court went on to say that "pardon completely destroys the effect of the
judgment ... (and) 'obliterates, in legal contemplation, the offense itself; and hence its effect is
to make the offender a new man'" (Stephens v. State of ex rel. Goldsberry, 11 Okl. 262, 239
P. 450). In a similar vein, this Court, thru Mr. Justice Laurel, stated that "an absolute pardon
not only blots out the crime committed but removes all disabilities resulting from the
conviction; and that when granted after the term of imprisonment has expired, absolute
pardon removes all that is left of the consequences of the conviction;" (Pelobello v. Palatino,
72 Phil. 441).
Tancinco vs. Pura Ferrer-Calleja, G.R. No. 78131, January 20, 1988
FACTS: The union's Vice-President, Carlos Dalmacio was promoted to the position of
Department Head, thereby disqualifying him for union membership. Said incident, among
others led to a strike spearheaded by Lacanilao group, respondents herein. Another group
however, led by herein petitioners staged a strike inside the company premises. After four (4)
days the strike was settled. An agreement was entered saying that all monthly-paid
employees shall be United under one union, the ITM Monthly Employees Association (ITM-
MEA), to be affiliated with ANGLO and that the management of ITM recognizes ANGLO as
the sole and exclusive bargaining agent of all the monthly-paid employees. However both
parties failed to agree on the list of voters. In a pre-election conference, attendees made a
unilateral ruling excluding some 56 employees consisting of the Manila office employees,
members of IglesianiKristo, non-time card employees, drivers of Mrs. Salazar and the
cooperative employees of Mrs. Salazar.
During the elction, Lacanilao won with 3 votes margin over Tancino prompting petitioners to
make a protest and count the votes of the 56 employees. The Med Arbiter directed the
opening and counting of the 56 segregated votes. Private respondents categorized the
challenged voters into four groups namely, the Manila Employees, that they are personal
employees of Mr. Lee; the IglesianiKristo, that allowing them to vote will be anomalous since
it is their policy not to participate in any form of union activities; the non-time card employees,
that they are managerial employees; and the employees of the cooperative as non-ITM
employees.
ISSUE: WON the exclusion of said voters are arbitrary, whimsical and without legal basis.
HELD: Yes. The public respondent ruled to set aside the Resolution of July 25, 1986 of the
Med-Arbiter based on its own findings that 51 of the 56 disenfranchised voters were not yet
union members at the time of the election of union officers on May 26, 1986 on the ground
that their names do not appear in the records of the Union submitted to the Labor
Organization Division of the Bureau of Labor on April 24, 1986. The finding does not have a
leg to stand on. Submission of the employees names with the BLR as qualified members of
the union is not a condition sine qua non to enable said members to vote in the election of
union's officers. It finds no support in fact and in law.
In the case before Us, considering that none of the parties insisted on the use of the payroll
period-list as voting list and considering further that the 51 remaining employees were
correctly ruled to be qualified for membership, their act of joining the election by casting their
votes on May 26, 1986 after the May 10, 1986 agreement is a clear manifestation of their
intention to join the union. They must therefore be considered ipso facto members thereof
Said employees having exercised their right to unionism by joining ITM-MEA their decision is
paramount. Their names could not have been included in the list of employee submitted on
April 24, 1986 to the Bureau of Labor for the agreement to join the union was entered into
only on May 10, 1986. Indeed the election was supervised by the Department of Labor where
said 56 members were allowed to vote. Private respondents never challenged their right to
vote then.
Manalad vs. Trajano, G.R. Nos. 72772-73, June 28, 1989
FACTS: The parties are employees of United Dockhandlers, Inc, rival groups in the
Associated Port Checkers and Workers' Union (APCWU) Petitioner led by Ricardo R.
Manalad, with respondent Pablo B. Babula heading the group of private
respondents.Although qualifications have been earlier questioned, Manalad et al won the
elections for APCWU officerson November 26, 1984. Babula et al filed petition for review and
on July 3, 1985, the court promulgated aresolution to dismiss petition for lack of merit and
have petitioner Babula et al vacant APCWU offices and turnover management to Director of
the Bureau of Labor Relations, all for immediate execution, to be followed by a special
elections to be held on July 20, 1985 (to be held under the personal supervision of Director
Trajano and his staff). Babula et al were alleged to refuse compliance with the above
resolution as documented in the petition filed by Manalad et al. The July 20 1985 special
election was held having Babula et al as winners and duly elected officials of
APCWU.Manalad et al filed petition to disqualify Babula et al as winners due to their non-
compliance to the July 3 1985 resolution, but Director Trajano dismissed their petition and
proclaimed Babula et al as the winners of the July 20, 1985 special elections. Manalad et al,
then, filed petition to SC to reverse resolution of Trajano, have Babula et al disqualified and
annul the July 20 1985 elections/conduct re-elections.In 1988, when 3-year term for the
disputed 1985 election expired, a new set of officers for ACPWU has been elected despite
motion for RTO. Manalad et al prayed for the annulment of 1988 elections.
ISSUE:Whether or not motion for annulment of 1988 elections is moot and academic
 8
HELD: Yes. The court found the motion for annulment of the 1988 ACPWU elections moot
and academic for the ff reasons: A) It is pointless and unrealistic to insist on annulling an
election of officers whose terms had already expired. We must consequently abide by our
consistent ruling that where certain events or circumstances have taken place during the
pendency of the case which would render the case moot and academic, the petition should
be dismissed. B) The court respects the will of the majority of the workers who voted in the
November 28, 1988 elections. C) Contentions of petitioners do not adequately establish the
basis for contempt but respondents have satisfactorily answered the averments thereon. D)
Obtaining the second highest number of votes does not mean that they will thereby be
considered as the elected officers if the true winners are disqualified.
Del Pilar Academy vs. Del Pilar Academy Employees’ Union, G.R. No. 170112, Ap 30, 2008
FACTS: In September 1994, the Del Pilar Academy and the Del Pilar Academy Employees
Union entered into a collective bargaining agreement where it was agreed that:
a. the employees, teaching and non-teaching staff, shall have a salary increase;
b. the teaching staff shall have a maximum load of 23 hours per week in teaching;
c. any overload shall be paid extra;
d. there shall be an increase in the longevity pay;
e. teaching staff who have rendered service for 6 consecutive semester are entitled to
receive pay during summer breaks;
f. non-union members who have rendered at least 1 year of service shall be entitled to 15
days leave with pay.
Since the new CBA benefits non-union members, the union asked Del Pilar to deduct agency
fees from the salaries of non-union members. Del Pilar refused to do so hence a labor case
was filed by the union.
In its defense, Del Pilar avers that it cannot collect agency fees because the non-union
members refused to provide Del Pilar a check off authorization to make deductions from their
salaries; and that further, the non-union members are not benefited because regardless of
the CBA, employees are going to be given a salary increase pursuant to a program by the
DECS which mandates all private schools to provide for salary increase based on tuition
profits.
ISSUE: Whether or not the Union is entitled to collect agency fees from non-union members,
and if so whether an individual written authorization is necessary for a valid check off.
HELD: Yes and No. The collection of AGENCY FEES in an amount equivalent to union dues
and fees, from employees who are not union members, is recognized by Article 248(e) of the
Labor Code. When so stipulated in a collective bargaining agreement or authorized in writing
by the employees concerned, the Labor code and its Implementing Rules recognize it to be
the duty of the employer to deduct the sum equivalent to the amount of union dues, as
agency fees, from the employee's wages for direct remittance to the union. The system is
referred to as CHECK OFF. No requirement of written authorization from the non-union
employees is necessary if the non-union employees accept the benefits resulting from the
CBA.
Del Pilar admitted failure to deduct the agency fees from the salaries of non-union
employees, but justifies the non-deduction by the absence of individual written authorization.
It posits that Article 248(e) is inapplicable considering that its employees derived no benefits
from the CBA. The annual salary of its employee is a benefit mandated by law, and not
derived from the CBA - this argument cannot be sustained.
Contrary to what Del Pilar wants to portray, the grant of annual salary increase is not the only
provision in the CBA that benefited the non-union employees. The union negotiated teaching
hour limitations, additional compensation for overload units, payment of longevity pay, etc.
These provisions in the CBA surely benefited the non-union employees, justifying the
collection of and the union's entitlement to agency fees.
Accordingly, no requirement of written authorization for the non-union employees is needed
to effect a valid check off. Article 248(e) makes it explicit that Article 241(o), requiring written
authorization is inapplicable to non-union employees, especially in this case where the non-
union employees receive several benefits under the CBA.
Gabriel vs. Sec. of Labor, G.R. No. 115949, March 16, 2000
FACTS: Petitioners comprise the Executive Board of the SolidBank Union, the duly
recognized collective bargaining agent for the rank and file employees of Solid Bank
Corporation. Private respondents are members of said union.
The Union decided to retain the service of Atty. Ignacio Lacsina as union counsel and
approved a resolution providing that 10% of the total economic benefits that may be secured
through the negotiations be given to Atty. Lacsina as attorney's fees. It also contained an
authorization for SolidBank Corporation to check-off said attorney's fees from the first lump
sum payment of benefits to the employees under the new CBA and to turn over said amount
to Atty. Lacsina and/or his duly authorized representative. The bank then, on request of the
union, made payroll deductions for attorney's fees from the CBA benefits paid to the union
members in accordance with the abovementioned resolution.
Private respondents instituted a complaint against the petitioners and the union counsel
before the Department of Labor and Employment (DOLE) for illegal deduction of attorney's
fees as well as for quantification of the benefits in the 1992 CBA.
ISSUE: WON the attorney's fees should be refunded to those union members who have not
signified their conformity to the check-off of attorney's fees.
HELD: Yes. Petitioners argue that the General Membership Resolution authorizing the bank
to check-off attorney's fee from the first lump sum payment of the legal benefits to the
employees under the new CBA satisfies the legal requirements for such assessment. Private
respondents, on the other hand, claim that the check-off provision in question is illegal
because it was never submitted for approval at a general membership meeting called for the
purpose and that it failed to meet the formalities mandated by the Labor Code.
In check-off, the employer, on agreement with the Union, or on prior authorization from
employees, deducts union dues or agency fees from the latter's wages and remits them
directly to the union. It assures continuous funding; for the labor organization. As this Court
has acknowledged, the system of check-off is primarily for the benefit of the union and only
indirectly for the individual employees.
Art. 241 has three (3) requisites for the validity of the special assessment for union's
incidental expenses, attorney's fees and representation expenses. These are: 1)
authorization by a written resolution of the majority of all the members at the general
membership meeting called for the purpose; (2) secretary's record of the minutes of the
meeting; and (3) individual written authorization for check off duly signed by the employees
concerned.
Clearly, attorney's fees may not be deducted or checked off from any amount due to an
employee without his written consent.
After a thorough review of the records, we find that the General Membership Resolution of
October 19, 1991 of the SolidBank Union did not satisfy the requirements laid down by law
and jurisprudence for the validity of the ten percent (10%) special assessment for union's
incidental expenses, attorney's fees and representation expenses. There were no individual
written check off authorizations by the employees concerned and so the assessment cannot
be legally deducted by their employer.
From all the foregoing, we are of the considered view that public respondent did not act with
grave abuse of discretion in ruling that the workers through their union should be made to
shoulder the expenses incurred for the services of a lawyer. And accordingly the
reimbursement should be charged to the union's general fund or account. No deduction can
be made from the salaries of the concerned employees other than those mandated by law.
Verceles vs. BLR-DOLE, G.R. No. 152322, February 15, 2005
FACTS: The case arose from a memorandum filed by Petitoners against Private Respondent
for allegedly spreading false rumors and creating disinformation among the members of the
said association.
The rumors, according to Petitioners happened when Private respondents, in filing a
complaint before the DOLE-NCR complained of petitioners’ refusal to render financial and
other reports, and deliberate refusal to call general and special meetings. According to the
findings of CA, the financial statements for the years 1995 up to 1997 were submitted to
DOLE-NCR only on 06 February 1998 while that for the year 1998 was submitted only on 16
March 1999. The last association’s meeting was conducted on 21 April 1995, and the copy of
the minutes thereon was submitted to BLR-DOLE only on 24 February 1998.
Petitioners do not hide the fact that they belatedly submitted their financial reports and the
minutes of their meetings to the DOLE.
Petitioners’ Contention: The issue of belatedly submitting these reports, according to the
petitioners, had been rendered moot and academic by their eventual compliance. Besides,
this has been the practice of the association. Moreover, the petitioners likewise maintain that
the passage of General Assembly Resolution No. 10 dated 10 December 1997 and
Resolution No. 8, Series of 2000, following the application of the principle that the sovereign
majority rules, cured any liability that may have been brought about by their belated actions.
ISSUE: Whether or not the non-holding of meetings and non-submission of reports by
the petitioners moot and academic, and whether the decision to hold meetings and submit
reports contradict and override the sovereign will of the majority?
HELD: No. This issue was precipitated by the Court of Appeals decision affirming the order of
DOLE Regional Director Maximo B. Lim for the petitioners to hold a general membership
meeting wherein they make open and available the union’s/association’s books of accounts
and other documents pertaining to the union funds, and to regularly conduct special and
general membership meetings in accordance with the union’s constitution and by-laws.
The passage of General Assembly Resolution No. 10 dated 10 December 1997 and
Resolution No. 8, Series of 2000, which supposedly cured the lapses committed by the
association’s officers and reiterated the approval of the general membership of the acts and
collateral actions of the association’s officers cannot redeem the petitioners from their
predicament. The obligation to hold meetings and render financial reports is mandated by
UEEA’s constitution and by-laws. This fact was never denied by the petitioners. Their
 9
eventual compliance, as what happened in this case, shall not release them from the
obligation to accomplish these things in the future.
Prompt compliance in rendering financial reports together with the holding of regular
meetings with the submission of the minutes thereon with the BLR-DOLE and DOLE-NCR
shall negate any suspicion of dishonesty on the part of UEEA’s officers. This is not only true
with UEEA, but likewise with other unions/associations, as this matter is imbued with public
interest. Undeniably, transparency in the official undertakings of union officers will bolster
genuine trade unionism in the country.
ISAE vs. Quisumbing, G.R. No. 128845, June 1, 2000
FACTS: Private respondent International School, Inc. (School), pursuant to PD 732, is a
domestic educational institution established primarily for dependents of foreign diplomatic
personnel and other temporary residents. The decree authorizes the School to employ its
own teaching and management personnel selected by it either locally or abroad, from
Philippine or other nationalities, such personnel being exempt from otherwise applicable laws
and regulations attending their employment, except laws that have been or will be enacted for
the protection of employees. School hires both foreign and local teachers as members of its
faculty, classifying the same into two: (1) foreign-hires and (2) local-hires.
The School grants foreign-hires certain benefits not accorded local-hires. Foreign-hires are
also paid a salary rate 25% more than local-hires.
When negotiations for a new CBA were held on June 1995, petitioner ISAE, a legitimate labor
union and the collective bargaining representative of all faculty members of the School,
contested the difference in salary rates between foreign and local-hires. This issue, as well as
the question of whether foreign-hires should be included in the appropriate bargaining unit,
eventually caused a deadlock between the parties.
ISAE filed a notice of strike. Due to the failure to reach a compromise in the NCMB, the
matter reached the DOLE which favored the School. Hence this petition.
ISSUE: Whether the foreign-hires should be included in bargaining unit of local- hires.
HELD: NO. The Constitution, Article XIII, Section 3, specifically provides that labor is entitled
to “humane conditions of work.” These conditions are not restricted to the physical workplace
– the factory, the office or the field – but include as well the manner by which employers treat
their employees.
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 248
declares it an unfair labor practice for an employer to discriminate in regard to wages in order
to encourage or discourage membership in any labor organization.
The Constitution enjoins the State to “protect the rights of workers and promote their welfare,
In Section 18, Article II of the constitution mandates “to afford labor full protection”. The State
has the right and duty to regulate the relations between labor and capital. These relations are
not merely contractual but are so impressed with public interest that labor contracts,
collective bargaining agreements included, must yield to the common good.
However, foreign-hires do not belong to the same bargaining unit as the local-hires.
A bargaining unit is a group of employees of a given employer, comprised of all or less than
all of the entire body of employees, consistent with equity to the employer indicate to be the
best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.
The factors in determining the appropriate collective bargaining unit are (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees’ interest, such as
substantial similarity of work and duties, or similarity of compensation and working conditions
(Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of
employment status. 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.
In the case at bar, it does not appear that foreign-hires have indicated their intention to be
grouped together with local-hires for purposes of collective bargaining. The collective
bargaining history in the School also shows that these groups were always treated
separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although
foreign-hires perform similar functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-hires such as housing,
transportation, shipping costs, taxes and home leave travel allowances. These benefits are
reasonably related to their status as foreign-hires, and justify the exclusion of the former from
the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either
group the exercise of their respective collective bargaining rights.
San Miguel vs. Laguesma, G.R. No. 100485, September 21, 1994
FACTS: North Luzon Magnnolia Sales Labor Union (Union) filed with the DOLE a certification
election among all the regular sales personnel of Magnolia Dairy Products in the North Luzon
Sales Area. Petitioner opposed the petition and questioned the appropriateness of the
bargaining unit sought to be represented by respondent union. It claimed that its bargaining
history in its sales offices, plants and warehouses is to have a separate bargaining unit for
each sales office. The petition was heard with Atty. Batallarepreseting petitioner. Atty. Batalla
withdrew petitioner's opposition to a certification election. Petitioner appealed claiming
AttyBatalla was only authorized to agree to the holding of certification elections subject to the
following conditions: (1) there would only be one general election; (2) in this general election,
the individual sales offices shall still comprise separate bargaining units.
ISSUE: (1) WON Union represents an appropriate bargaining unit.
(2) WON petitioner is bound by its lawyer's act of agreeing to consider the sales
personnel in the north Luzon sales area as one bargaining unit.
HELD: (1) Yes. A bargaining unit is a "group of employees of a given employer,
comprised of all or less than all of the entire body of employees, consistent with equity to the
employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law." The fundamental factors in determining
the appropriate collective bargaining unit are: (1) the will of the employees (Globe Doctrine);
(2) affinity and unity of the employees' interest, such as substantial similarity of work and
duties, or similarity of compensation and working conditions (Substantial Mutual Interests
Rule); (3) prior collective bargaining history; and (4) similarity of employment status. The
existence of a prior collective bargaining history is neither decisive nor conclusive in the
determination of what constitutes an appropriate bargaining unit. Indeed, 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 perform.
(2) Yes. Petitioner claims that Atty. Batalla was merely a substitute lawyer for
Atty. Christine Ona, who got stranded in Legaspi City. Atty. Batalla was allegedly unfamiliar
with the collective bargaining history of its establishment. Petitioner claims it should not be
bound by the mistake committed by its substitute lawyer. Insofar as the alleged "mistake" of
the substitute lawyer is concerned, we find that this mistake was the direct result of the
negligence of petitioner's lawyers. It will be noted that Atty. Ona was under the supervision of
two (2) other lawyers, Attys. Jacinto de la Rosa, Jr. and George C. Nograles. There is nothing
in the records to show that these two (2) counsels were likewise unavailable at that time.
Instead of deferring the hearing, petitioner's counsels chose to proceed therewith. Indeed,
prudence dictates that, in such case, the lawyers allegedly actively involved in SMC's labor
case should have adequately and sufficiently briefed the substitute lawyer with respect to the
matters involved in the case and the specific limits of his authority. Unfortunately, this was not
done in this case. The negligence of its lawyers binds petitioner.
Legend International vs. KMI. Independent, G.R. No. 169754, February 23, 2011
FACTS: KML filed with the Med-Arbitration Unit of the DOLE, San Fernando, Pampanga, a
Petition for Certification Election. LEGEND moved to dismiss the petition alleging that KML is
not a legitimate labor organization because its membership is a mixture of rank and file and
supervisory employees in violation of Article 245 of the Labor Code. KML argued that even if
41 of its members are indeed supervisory employees and therefore excluded from its
membership, the certification election could still proceed because the required number of the
total rank and file employees necessary for certification purposes is still sustained. KML also
claimed that its legitimacy as a labor union could not be collaterally attacked in the
certification election proceedings but only through a separate and independent action for
cancellation of union registration.
The Med-Arbiter rendered judgment dismissing for lack of merit the petition for certification
election. Since Article 245 of the Labor Code expressly prohibits supervisory employees from
joining the union of rank and file employees, the Med-Arbiter concluded that KML is not a
legitimate labor organization.
The Office of the Secretary of DOLE rendered its Decision granting KML’s appeal thereby
reversing and setting aside the Med-Arbiter’s Decision. The Office of the Secretary of DOLE
held that KML’s legitimacy as a union could not be collaterally attacked. It declared that any
violation of the provision of Article 245 does not ipso facto render the existence of the labor
organization illegal.
LEGEND filed a Petition for Certiorari with the Court of Appeals , which found no grave abuse
of discretion on the part of the Office of the Secretary of DOLE. LEGEND filed a Petition for
Certiorari with the Court of Appeals. held that the issue on the legitimacy of KML as a labor
organization has already been settled with finality in Case No. RO300-0108-CP-001. The
March 26, 2002 Decision of the Bureau of Labor Relations upholding the legitimacy of KML
as a labor organization had long become final and executory for failure of LEGEND to appeal
the same.
ISSUE: Whether or not the the CA erred in denying the petition for certiorari.
HELD: The petition is partly meritorious. LABOR LAW: Certification election
Records show that (in the cancellation of registration case) LEGEND has timely filed on
September 6, 2002 a petition forcertiorari before the Court of Appeals which was docketed as
CA-G.R. SP No. 72659 assailing the March 26, 2002 Decision of the Bureau of Labor
Relations.
However, a certification election may still be conducted during the pendency of the
cancellation proceedings. This is because at the time the petition for certification was filed,
the petitioning union is presumed to possess the legal personality to file the same. There is
therefore no basis for LEGEND’s assertion that the cancellation of KML’s certificate of
registration should retroact to the time of its issuance or that it effectively nullified all of KML’s
activities, including its filing of the petition for certification election and its demand to
 10
collectively bargain. Also, the legitimacy of the legal personality of KML cannot be collaterally
attacked in a petition for certification election proceeding.
Algire vs. de Mesa, G.R. No. 97622, October 19, 1994
Facts: Universal Robina Textile Monthly Salaried Employees Union (URTMSEU) filed a
petition for the holding of an election of union officers to represent the union in the collective
bargaining agreement with the management of Universal robina Textile. The employees were
to choose between Algire, et al. and de Mesa et al.
Issue: Whether the election held was a consent election
Held: Yes, it was. The election held on November 15, 1990 was a consent election and not a
certification election. It was an agreed one, the purpose being merely to determine the issue
of majority representation of all the workers in the appropriate collective bargaining unit. It is a
separate and distinct process and has nothing to do with the import and effort of a
certification election.
Warren Manufacturing Workers Union vs. BLR, G.R. No. 76185, March 30, 1988
FACTS: On June 13, 1985, Philippine Agricultural, Commercial and Industrial Workers Union
(PACIWU) filed a petition for certification election, alleging compliance with the jurisdictional
requirements.
On July 7, 1985, petitioner thru counsel filed a motion to dismiss the petition on the ground
that there exists a C.B.A. between the respondent and the Warren Mfg. Union which took
effect upon its signing on July 16, 1985 and to expire on July 31, 1986.
While the petition was under hearing, PACIWU filed a Notice of Strike and on conciliation
meeting, a Return-to-Work Agreement was signed and stipulating that to resolve the issue of
union representation at Warren Mfg. Corp., parties have agreed to the holding of a consent
election among the rank and file on August 25, 1985 at the premises of the company to be
supervised by MOLE. It is clearly understood that the certified union in the said projected
election shall respect and administer the existing CBA at the company until its expiry date on
July 31, 1986.
On 12 August 1985, an Order was issued by BLR, directing that a consent election be held
among the rank and file workers of the company, with the following contending unions:
1. Philippine Agricultural, Commercial and Industrial Workers Union (PACIWU);
2. Warren Mfg. Workers Union (WMWU);
3. No Union.
On August 25, 1985, said consent election was held, and yielded the following results:
PACIWU—- 94
WMWU—-193
On June 5, 1986, the PACIWU filed a petition for certification election followed by the filing of
a petition for the same purposes by the SamahanngManggagawasa Warren Manufacturing
Corporation-Alliance of Nationalist and Genuine Labor Organizations (Anglo for short) which
petitions were both opposed by Warren Manufacturing Corporation on the grounds that
neither petition has 30% support; that both are barred by the one-year no certification election
law and the existence of a duly ratified CBA.
The Med-Arbiter-NCR, MOLE ordered on August 18, 1986 the holding of a certification
election within 20 days from receipt to determine the exclusive bargaining representative of
all the rank and file employees of the Warren Manufacturing Corporation, with the choices:
1. Philippine Agricultural, Commercial and Industrial Workers Union (PACIWU);
2. Warren Mfg. Workers Union;
3. SamahanngManggagawasa Warren Mfg. Corporation-ANGLO; and
4. No Union.
Both Warren Manufacturing Corporation and petitioner filed separate motions treated as
appeals by the BLR which was dismissed. Hence, this petition solely by WMWU. Petitioner
invoked the one-year no certification election rule and the principle of the Contract Bar Rule.
ISSUE: Whether the Certification Election should be granted.
HELD: YES. The records show that petitioner admitted that what was held on August 25,
1985 at the Company’s premises and which became the root of this controversy, was a
consent election and not a certification election. A consent election is an agreed one, its
purpose being merely to determine the issue of majority representation of all the workers in
the appropriate collective bargaining unit while a certification election is aimed at determining
the sole and exclusive bargaining agent of all the employees in an appropriate bargaining unit
for the purpose of collective bargaining. From the very nature of consent election, it is a
separate and distinct process and has nothing to do with the import and effect of a
certification election. Neither does it shorten the terms of an existing CBA nor entitle the
participants thereof to immediately renegotiate an existing CBA although it does not preclude
the workers from exercising their right to choose their sole and exclusive bargaining
representative after the expiration of the 60 day freedom period.
The election held on August 25, 1985 was not for the purpose of determining which labor
union should be the bargaining representative in the negotiation for a collective contract,
there being an existing collective bargaining agreement yet to expire on July 31, 1986; but
only to determine which labor union shall administer the said existing contract.
Article 257 of the New Labor Code expressly states that No certification election issue shall
be entertained if a collective agreement which has been submitted in accordance with Article
231 of the Code exists between the employer and a legitimate labor organization except
within 60 days prior to the expiration of the life of such certified collective bargaining
agreement. There should be no obstacle to the right of the employees to petition for a
certification election at the proper time.
As aforestated, the existing collective bargaining agreement was due to expire on July 31,
1986. The Med-Arbiter found that the petition and intervention were supported by more than
30% of the members of the bargaining unit. Because of this, Article 258 of the Labor Code
makes it mandatory for the BLR to conduct a certification election. Once it has been verified
that the petition for certification election has the support of at least 30% of the employees in
the bargaining unit, it must be granted. It becomes under the circumstances, ‘mandatory’ .
UST Faculty Union vs. Gamilla, G.R. No. 131235, November 16, 1999
FACTS: Private Responednts are duly elected officers of the UST Faculty Union (USTFU).
The union has a subsisting five-year CBA with UST. The petitioners on the other hand,
questioned before the Med-Arbiter, that the COMELEC was not constituted in accordance
with USTFU’s constitution and by-laws (CBL) and that no rules had been issued to govern
the conduct of the 05 October 1996 election. Med-Arbiter issued a TRO enjoining the conduct
of elections. However, a general faculty assembly was held as scheduled. The general
assembly was attended by members of the USTFU and, as admitted by the appellants, also
by “non-USTFU members [who] are members in good standing of the UST Academic
Community Collective Bargaining Unit”. On this occasion, appellants were elected as
USTFU’s new set of officers by acclamation and clapping of hands.
On 03 December 1996, appellants and UST allegedly entered into another CBA covering the
period from 01 June 1996 to 31 May 2001. Said CBA was ratified by a majority of the UST
faculty community.
ISSUE: WON the election of the officers in this case was valid
HELD: NO. The importance of a union’s constitution and bylaws cannot be overemphasized.
They embody a covenant between a union and its members and constitute the fundamental
law governing the members’ rights and obligations. As such, the union’s constitution and
bylaws should be upheld, as long as they are not contrary to law, good morals or public
policy.
A union election is held pursuant to the union’s constitution and bylaws, and the right to vote
in it is enjoyed only by union members. A union election should be distinguished from a
certification election, which is the process of determining, through secret ballot, the sole and
exclusive bargaining agent of the employees in the appropriate bargaining unit, for purposes
of collective bargaining. Specifically, the purpose of a certification election is to ascertain
whether or not a majority of the employees wish to be represented by a labor organization
and, in the affirmative case, by which particular labor organization.
In a certification election, all employees belonging to the appropriate bargaining unit can vote.
Therefore, a union member who likewise belongs to the appropriate bargaining unit is entitled
to vote in said election. However, the reverse is not always true; an employee belonging to
the appropriate bargaining unit but who is not a member of the union cannot vote in the union
election, unless otherwise authorized by the constitution and bylaws of the union. Verily,
union affairs and elections cannot be decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4, 1996 election
cannot properly be called a union election, because the procedure laid down in the USTFU’s
CBL for the election of officers was not followed. It could not have been a certification election
either, because representation was not the issue, and the proper procedure for such election
was not followed. The participation of non-union members in the election aggravated its
irregularity.
Oriental Tin Can & Metal Sheet vs. Laguesma, G.R. No. 116779, August 28, 1998
FACTS: Oriental Tin Can and Metal Sheet Manufacturing Company, Inc. (the company) is
engaged in the manufacture of tin can containers and metal sheets. On March 3, 1994, it
entered into a collective bargaining agreement (CBA) with petitioner Oriental Tin Can Labor
Union (OTCLU) as the existing CBA was due to expire on April 15, 1994. Four days later, 248
of the company’s rank-and-file employees authorized the Federation of Free Workers (FFW)
to file a petition for certification election. On March 10, 1994, however, 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.
On March 18, 1994, armed with Charter Certificate No. IV-MEE-089, respondent Oriental Tin
Can Workers Union — Federation of Free Workers (OTCWU-FFW) filed a petition for
certification election with the National Capital Region office of the Department of Labor and
Employment (DOLE), pursuant to Article 256 of the Labor Code. Purporting to represent the
regular rank-and-file employees of the company, the petition was accompanied by the
“authentic signatures” of 25% of the employees/workers in the bargaining unit.
 11
The above petition for certification elections was opposed by the OTCLU. For its part, the
company filed a comment alleging inter alia that the new CBA was ratified by 897 out of the
1,020 rank-and-file employees within the bargaining unit. 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 certification election was allowed.
ISSUE: WON the company has a personality to challenge the conduct of a certification
elections.
HELD: NONE. It is a well-established rule that certification elections are exclusively the
concern of employees; hence, the employer lacks the legal personality to challenge the
same. Law and policy demand that employers take a strict, hands-off stance in certification
elections. The bargaining representative of employees should be chosen free from any
extraneous influence of management. A labor bargaining representative, to be effective, must
owe its loyalty to the employees alone and to no other.
The only instance when an employer may concern itself with employee representation
activities is when it has to file the petition for certification election because there is no existing
CBA in the unit and it was requested to bargain collectively, pursuant to Article 258 of the
Labor code. 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.
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.
NOTE: It is uncontroverted that the petition for certification election in this case was filed on
March 18, 1994, twenty-eight days before the expiration of the existing CBA on April 15,
1994, and well within the 60-day period provided for by the Code. The OTCLU, however, is
concerned with the effect of the employees’ ratification of the new CBA on the timely filing of
the petition for certification election. Would such ratification nullify the petition?
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. This is clearly provided for in the
aforequoted Section 4, Rule V, Book V of the Omnibus Rules Implementing the Labor Code.
The reason behind this rule is obvious. A petition for certification election is not necessary
where the employees are one in their choice of a representative in the bargaining process.
Moreover, said provision of the Omnibus Rules manifests the intent of the legislative authority
to allow, if not encourage, the contending unions in a bargaining unit to hold a certification
election during the freedom period. The agreement prematurely signed by the union and the
company during the freedom period does not affect the petition for certification election filed
by another union.
As regards the 25% support requirement, the same has been met. As previously held by the
SC, once the required percentage requirement has been reached, the employees’ withdrawal
from union membership (waiver in this case) taking place after the filing of the petition for
certification election will not affect the petition. On the contrary, the presumption arises that
the withdrawal was not free but was procured through duress, coercion or for a valuable
consideration. Hence, the subsequent disaffiliation of the 6 employees from the union will not
be counted against or deducted from the previous number who had signed up for certification
SAMMA-LIKHA vs. SAMMA Corporation, G.R. No. 167141, March 13, 2009
FACTS: Petitioner, SAMMA-LIKHA filed a petition for certification election in the Department
of Labor and Employment (DOLE), which the respondent moved for the dismissal of said
petition.
In an order, med-arbiter Arturo Cosuco ordered the dismissal of the petition on the following
grounds:
(1) lack of legal personality for failure to attach the certificate of registration
purporting to show its legal personality;
(2) prohibited mixture of rank-and-file and supervisory employees and
(3) failure to submit a certificate of non-forum shopping.
Petitioner then moved for reconsideration where Labor Acting Secretary Manuel Imson,
treating the motion as an appeal, rendered a decision reversing the order of the med-arbiter.
He ruled that the legal personality of a union cannot be collaterally attacked but may only be
questioned in an independent petition for cancellation of registration.
Respondent filed a petition for certiorari in the CA assailing the resolution of the Secretary of
Labor but the CA reversed the same.Hence, this petition.
ISSUES: (1) whether a certificate for non-forum shopping is required in a petition for
certification election;
(2) whether petitioner’s motion for reconsideration which was treated as an
appeal by the Secretary of Labor should not have been given due course for failure to attach
proof of service on respondent and
3) whether petitioner had the legal personality to file the petition for certification
election.
HELD: (1)The CA erred in declaring that a certificate of non-forum shopping was
required in a petition for certification election.Notably, under the Labor Code and the rules
pertaining to the form of the petition for certification election, there is no requirement for a
certificate of non-forum shopping.
(2) As to the treatment of Motion for Reconsideration as an Appeal, the motion
was properly treated as an appeal because it substantially complied with the formal
requisites.
(3) The Court agrees with the petitioner that the erroneous inclusion of one
supervisory employee in the union of rank-and-file employees was not a ground to impugn its
legitimacy as a legitimate labor organization which had the right to file a petition for
certification election.
Oriental Tin Can & Metal Sheet vs. Laguesma, G.R. No. 116751, August 28, 1998
FACTS: Oriental Tin Can and Metal Sheet Manufacturing Company, Inc. (the company) is
engaged in the manufacture of tin can containers and metal sheets. On March 3, 1994, it
entered into a collective bargaining agreement (CBA) with petitioner Oriental Tin Can Labor
Union (OTCLU) as the existing CBA was due to expire on April 15, 1994. Four days later, 248
of the company’s rank-and-file employees authorized the Federation of Free Workers (FFW)
to file a petition for certification election. On March 10, 1994, however, 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.
On March 18, 1994, armed with Charter Certificate No. IV-MEE-089, respondent Oriental Tin
Can Workers Union — Federation of Free Workers (OTCWU-FFW) filed a petition for
certification election with the National Capital Region office of the Department of Labor and
Employment (DOLE), pursuant to Article 256 of the Labor Code. Purporting to represent the
regular rank-and-file employees of the company, the petition was accompanied by the
“authentic signatures” of 25% of the employees/workers in the bargaining unit.
The above petition for certification elections was opposed by the OTCLU. For its part, the
company filed a comment alleging inter alia that the new CBA was ratified by 897 out of the
1,020 rank-and-file employees within the bargaining unit. 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 certification election was allowed.
ISSUE: WON the company has a personality to challenge the conduct of a certification
elections.
HELD: NONE. It is a well-established rule that certification elections are exclusively the
concern of employees; hence, the employer lacks the legal personality to challenge the
same. Law and policy demand that employers take a strict, hands-off stance in certification
elections. The bargaining representative of employees should be chosen free from any
extraneous influence of management. A labor bargaining representative, to be effective, must
owe its loyalty to the employees alone and to no other.
The only instance when an employer may concern itself with employee representation
activities is when it has to file the petition for certification election because there is no existing
CBA in the unit and it was requested to bargain collectively, pursuant to Article 258 of the
Labor code. 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.
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.
_____________________________________
NOTE: It is uncontroverted that the petition for certification election in this case was filed on
March 18, 1994, twenty-eight days before the expiration of the existing CBA on April 15,
1994, and well within the 60-day period provided for by the Code. The OTCLU, however, is
concerned with the effect of the employees’ ratification of the new CBA on the timely filing of
the petition for certification election. Would such ratification nullify the petition?
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. This is clearly provided for in the
aforequoted Section 4, Rule V, Book V of the Omnibus Rules Implementing the Labor Code.
The reason behind this rule is obvious. A petition for certification election is not necessary
 12
where the employees are one in their choice of a representative in the bargaining process.
Moreover, said provision of the Omnibus Rules manifests the intent of the legislative authority
to allow, if not encourage, the contending unions in a bargaining unit to hold a certification
election during the freedom period. The agreement prematurely signed by the union and the
company during the freedom period does not affect the petition for certification election filed
by another union.
As regards the 25% support requirement, the same has been met. As previously held by the
SC, once the required percentage requirement has been reached, the employees’ withdrawal
from union membership (waiver in this case) taking place after the filing of the petition for
certification election will not affect the petition. On the contrary, the presumption arises that
the withdrawal was not free but was procured through duress, coercion or for a valuable
consideration. Hence, the subsequent disaffiliation of the 6 employees from the union will not
be counted against or deducted from the previous number who had signed up for certification
R. Transport Corp. vs. Laguesma, G.R. No. 106830, November 16, 1993
FACTS: On January 4, 1991, respondent Christian Labor Organization of the Philippines
(CLOP), filed with the Med-Arbitration Unit of the DOLE a petition for certification election
among the rank and file employees of the petitioner R Transport Corporation.
On April 8, 1991, Med-Arbiter A. Dizon dismissed the petition on the ground that the
bargaining unit sought to be represented by respondent did not include all the eligible
employees of petitioner but only the drivers, conductors and conductresses to the exclusion
of the inspectors, inspectresses, dispatchers, mechanics and washerboys.
On May 10, 1991, respondent. CLOP rectified its mistake and filed a second petition for
certification election,which included all the rank and file employees of the company, who hold
non-managerial. and non-supervisorial positions.
On July 3, 1991, Med-Arbiter R. Parungo rendered a decision, which ordered that a
certification election among the regular rank and file workers of petitioner company be
conducted.
On October 16, 1991, the Associated Labor Unions (ALU-TUCP) filed a motion for
intervention (NCR OD-M-91-01-002) and alleged that it has members in the proposed
bargaining unit. Subsequently, the National Federation of Labor Unions (NAFLU) filed a
separate petition for certification election (NCR-OD-M-91-10-058) and a motion to
consolidate related cases to avoid confusion.
Petitioner argued that the second petition for a certification election by respondent CLOP,
NAFLU and ALU-TUCP were barred at least for a period of one year from the time the first
petition of CLOP was dismissed pursuant to Section Rule V, Book V of the Omnibus Rules
Implementing the Labor Code as amended.
ISSUE: WON the first petition bars the certification election for one year based on
Certification-bar-rule.
HELD: No. Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code as
amended provides as follows:
When to file — In the absence of collective bargaining agreement duly registered in
accordance with Article 231 of the Code, a petition for certification election may be filed any
time. However, no certification election may be held within one year from the date of the
issuance of a final certification election result (Emphasis supplied).
The phrase "final certification election result" means that there was an actual conduct of
election i.e. ballots were cast and there was a counting of votes. In this case, there was no
certification election conducted precisely because the first petition was dismissed, on the
ground of a defective petition which did not include all the employees who should be properly
included in the collective bargaining unit.
St. James School of Quezon City vsSamahangManggagawasa St. James School of Quezon
City, G.R. No. 151326, November 23, 2005
FACTS: Respondent SamahangManggagawa filed a petition for a certification election to
determine the collective bargaining representative of the motorpool, construction and
transportation employees of St. James School of QC. The certification election was held at
the DOLE office in which there were 149 eligible voters. 84 cast their votes. St. James filed a
protest challenging the 84 votes, alleging that it had 179 rank and file employees and none of
them voted in the certification election. It argued that those who voted were not its regular
employees but construction workers of an independent contractor.
ISSUES: 1. WON the formation of the labor union was valid
2. WON the certification election was valid
HELD: 1. Yes. The records show that prior to the holding of a certification election, St.
James filed a petition for cancellation of SamahangManggagawa on the ground of lack of
employer-employee relations between the union members and St. James. This went all the
way up to the CA which ruled that the independent contractor is a labor only contractor, and
thus, an agent of St. James which is the real employer.
2. Yes. St. James has five campuses. The members of the Samahan are
employees of the TandangSora campus. The Samahan seeks to represent the motor pool,
construction, and transportation employees of the T. Sora campus. Thus, the computation of
the quorum should be based on it, not on the total number of employees in all five campuses
of St. James.
Phil Scout Veterans Security vs. Torres, G.R. No. 92357, July 21, 1993
FACTS:On April 6, 1989, private respondent labor union, PGA Brotherhood Association –
Union of Filipino Workers (UFW), hereinafter referred to as “the Union ” filed a petition for
Direct Certification/Certification Election among the rank and file employees of Philippine
Scout Veterans Security and Investigation Agency (PSVSIA), GVM Security and
Investigations Agency, Inc. (GVM). andAbaquin Security and Detective Agency, Inc. (ASDA).
These three agencies were collectively referred to by private respondent Union as the “PGA
Security Agency,” which is actually the first letters of the corporate names of the agencies.
On April 11, 1989, summons was issued to the management of PSVSIA, GVM, ASDA (PGA
Security Agency) at 82 E. Rodriquez Avenue, Quezon City.
On April 11, 26, 1986, petitioners filed a single comment alleging therein that the said three
security agencies have separate and distinct corporate personalities while PGA Security
Agency is not a business or corporate entity and does not possess any personality
whatsoever; the petition was unclear as to whether the rank-and-file employees mentioned
therein refer to those of the three security agencies collectively and if so, the labor union
cannot seek a certification election in three separate bargaining units in one petition.
Issue: WON petitioners can interfere with the certification election proceeding.
Held:Except where the employer has to file a petition for certification election pursuant to
Article 258 of the Labor Code because of a request to bargain collectively, it has nothing to
do with a certification election which is the sole concern of the workers. Its role in a
certification election has aptly been described in Trade Unions of the Philippines and Allied
Services (TUPAS) v. Trajano, as that of a mere by-stander. It has no legal standing in a
certification election as it cannot oppose the petition or appeal the Med-Arbiter’s orders
related thereto. An employer that involves itself in a certification election lends suspicion to
the fact that it wants to create a company union.
This Court’s disapprobation of management interference in certification elections is even
more forceful in Consolidated Farms, Inc. v. Noriel, where we held:
On a matter that should be the exclusive concern of labor, the choice of a collective
bargaining representative, the employer is definitely an intruder. His participation, to say the
least, deserves no encouragement. This Court should be the last agency to lend support to
such an attempt at interference with a purely internal affair of labor.
DHL Philippines Corp. vs. BuklodngManggagawang DHL Philippines Corp., G.R. No.
152094, July 22, 2004
Facts:
Tagaytay Highlands International Golf Club vs. Tagaytay Highlands Employees’ Union, G.R.
No. 142000, January 22, 2003
FACTS: On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)–Philippine
Transport and General Workers Organization (PTGWO) representing majority of the rank-
and-file employees of THIGCI, filed a petition for certification election before the DOLE.
THIGCI, opposed THEU’s petition on the ground that the list of union members submitted by
it was defective and fatally flawed as it included the names and signatures of supervisors,
resigned, terminated and absent without leave (AWOL) employees, as well as employees of
The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the
192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI.
THIGCI also alleged that some of the signatures in the list of union members were secured
through fraudulent and deceitful means, and submitted copies of the handwritten denial and
withdrawal of some of its employees from participating in the petition. THEU asserted that it
had complied with all the requirements for valid affiliation and inclusion in the roster of
legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997,on
account of which it was duly granted a Certification of Affiliation by DOLE on October 10,
1997 and that Section 5, Rule V of said Department Order provides that the legitimacy of its
registration cannot be subject to collateral attack, and for as long as there is no final order of
cancellation, it continues to enjoy the rights accorded to a legitimate organization.
ISSUE: W/N supervisory employees are prohibited from joining a labor union.
HELD: NO. The statutory authority for the exclusion of supervisory employees in a rank-and-
file union, and vice-versa, is Article 245 of the Labor Code, to wit:
Article 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees 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.
While above-quoted Article 245 expressly prohibits supervisory employees from joining a
rank-and-file union, they were not prohibited from forming, assisting and joining their own
union.
 13
As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie
given, as found by the court a quo, its failure to present substantial evidence that the assailed
employees are actually occupying supervisory positions.
While petitioner submitted a list of its employees with their corresponding job titles and
ranks,24 there is nothing mentioned about the supervisors’ respective duties, powers and
prerogatives that would show that they can effectively recommend managerial actions which
require the use of independent judgment.25
As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:
Designation should be reconciled with the actual job description of subject employees x
xxThe mere fact that an employee is designated manager does not necessarily make him
one. Otherwise, there would be an absurd situation where one can be given the title just to be
deprived of the right to be a member of a union. In the case of National Steel Corporation vs.
Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that:
What is essential is the nature of the employee’s function and not the nomenclature or title
given to the job which determines whether the employee has rank-and-file or managerial
status or whether he is a supervisory employee. (Emphasis supplied).
Acoje Workers Union vs. NAMAWU, G.R. No. L-18848, April 23, 1943
FACTS:Department of Labor, through the BLR, conducted on June 9, 1961, a “consent
election” among the workers of the Acoje Mining Company at Santa Cruz, Zambales, in
which 5 labor unions participated, namely, the Acoje United Workers’ Union, the Acoje Labor
Union (PELTA), the Acoje Labor Union (PLUM), respondent National Mines and Allied
Workers’ Union (NAMAWU), and petitioner Acoje Workers’ Union. NAMAWU won in the said
election.
Petitioner Union — which had been defeated by respondent Union by a margin of 282 votes
— had filed a motion to invalidate said election upon several grounds. After hearing, the
lower court issued, on July 21, 1961, the order appealed from holding that said motion was
without merit, and certifying respondent Union NAMAWU as the sole and exclusive
bargaining agent of all the workers of the Company. MR of petitioner was denied, hence this
present appeal by certiorari, and petitioner now maintains that the lower court should have
invalidated the aforementioned election for the same was “the result of acts of terrorism,
force, threat and intimidation employed by” agents of respondent Union. The petitioner also
questioned the list of qualified voters that was used during the election which was based on
the payroll of the employees.
ISSUE:Can a payroll be used as the basis for qualified employee- voters?
HELD:YES. It appears that labor unions concerned agreed, not only to the holding of the
aforementioned election, but also to the use of the Company payroll of March 31, 1961, as
the basis for determining who are qualified to vote subject to the approval of the lower court.
The Company presented its aforementioned payroll to said court and stated that the labor
unions had been furnished copy thereof, at least 3 days prior thereto. Said labor unions were
given an opportunity to make their comments and observations on the list of workers
contained in the payroll and to ask or suggest the inclusion or exclusion of names therein or
therefrom. Petitioner’s representative then stated that it would abide by whatever ruling
the court may make on the matter of inclusion and exclusion of voters. Indeed, on May 19,
1961, the court issued the corresponding order for the holding of the election and made its
ruling on the question as to who were qualified to vote, and petitioner did not move for a
reconsideration of said ruling. Hence, petitioner may no longer contest the accuracy of the
aforementioned voters list.
As to the allegation of petitioner that there are many cases where the workers were
threatened, coerced and intimidated to vote for the NAMAWU, is but a general allegation,
without anything to indicate the number of workers involved, without the supporting affidavit
of any of them, and without an offer to introduce their testimony or the testimony of any of
them was. Petitioner’s contention is insufficient to warrant the invalidation of the
aforementioned election.
Yokohama Tire Phils. Vs. Yokohama Employees Union, G.R. No. 159553, December 10,
2007
FACTS: On October 7, 1999, respondent Yokohama Employees Union (Union) filed a petition
for certification election among the rank-and-file employees of Yokohama. Upon appeal from
the Med-Arbiters order dismissing the petition, the Secretary of the Department of Labor and
Employment (DOLE) ordered an election with (1) Yokohama Employees Union and (2) No
Union as choices.[3] The election held on November 23, 2001 yielded the following result:
YOKOHAMA EMPLOYEES UNION - 131
NO UNION - 117
SPOILED - 2
-----
250
VOTES CHALLENGED BY [YOKOHAMA] - 78
VOTES CHALLENGED BY [UNION] - 73
------
TOTAL CHALLENGED VOTES - 151
TOTAL VOTES CAST - 401[4]
Yokohama challenged 78 votes cast by dismissed employees. On the other hand, the Union
challenged 68 votes cast by newly regularized rank-and-file employees and another five (5)
votes by alleged supervisor-trainees.
The CA held that the 78 employees who contested their dismissal were entitled to vote under
Article 212 (f) of the Labor Code and Section 2, Rule XII of the rules implementing Book V of
the Labor Code. However, it disallowed the votes of the 68 newly regularized employees
since they were not included in the voters list submitted during the July 12, 2001 pre-election
conference.
ISSUE: WON the votes of the 78 employees who were dismissed but their cases for illegal
dismissal were challeged, should be allowed
HELD: YES. Section 2, Rule XII, the rule in force during the November 23, 2001 certification
election clearly, unequivocally and unambiguously allows dismissed employees to vote
during the certification election if the case they filed contesting their dismissal is still pending
at the time of the election.
Even the new rule has explicitly stated that without a final judgment declaring the legality of
dismissal, dismissed employees are eligible or qualified voters. Thus,
RULE IX
CONDUCT OF CERTIFICATION ELECTION
Section 5. Qualification of voters; inclusion-exclusion. . . . 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, unless his/her dismissal was declared valid in a final
judgment at the time of the conduct of the certification election.
XXX
SamahanngManggagawasa Pacific Plastic vs. Laguesma, G.R. No. 111245, January 31,
1997
FACTS: Petitioner SAMAHAN and respondent MNMPP are labor unions of rank and file
employees at the Pacific Plastic Corporation (PPC) in Valenzuela, Metro Manila. On August
24, 1990, MNMPP filed a Petition for Certification Election, alleging that there were more or
less 130 rank and file employees at the PPC whom it was seeking to represent. SAMAHAN
countered by seeking the cancellation of MNMPPs union registration. As a result, MNMPPs
petition to be certified as the bargaining agent was dismissed. MNMPP appealed to the
Secretary of Labor who, on March 5, 1991, reversed the decision of the Med-Arbiter and
ordered the holding of a certification election among the rank and file employees of the PPC.
The PPC filed a Motion for Reconsideration but its motion was denied. Accordingly, the
representation officer of the Secretary of Labor held a pre-election conference on May 6,
1991, during which the PPC was required to submit the list of its rank and file employees
based on the company payroll three (3) months prior to the filing of the petition. Respondent
company failed to submit the list even after three DOLE orders. Meanwhile, on September
23, 1991, SAMAHAN and MNMPP agreed to hold the certification election on October 29,
1991 on the basis of the list of employees submitted by MNMPP, without prejudice to the
submission by petitioner SAMAHAN of its own list on October 17, 1991. Thereafter, they
agreed to postpone election to await the list of employees requested from the Social Security
System.
The Certification Election was held on October 6, 1992 with 62 votes cast out of 98 Eligible
voters on the list of SSS.
ISSUE: WON the SSS lists indicating 98 covered employees can be used as substitute for
three (3) monthly payrolls required for the purpose of determining the qualified voters and the
majority vote needed in an election.
HELD: Yes. It should ideally be the payroll which should have been used for the purpose of
the election. However, the unjustified refusal of a company to submit the payroll in its
custody, despite efforts to make it produce it, compelled resort to the SSS list as the next
best source of information. After all, the SSS list is a public record whose regularity is
presumed. In Port Workers Union of the Philippines (PWUP) v. Undersecretary of Labor and
Employment, this Court underscored the policy of the Labor Code of encouraging the holding
of a certification election as the definitive and certain way of ascertaining the choice of
employees as to the labor organization in a collective bargaining unit.
Petitioners objection to the use of the SSS should have been raised during the elections and
formalized in its election protest. The SC agrees with private respondent MNMPP in its
Opposition to SAMAHANs election protest dated October 15, 1992 that under the
Implementing Rules, grounds of protests not raised before the close of the proceedings and
duly formalized within five (5) days after the close of the election proceedings are deemed
waived.
Cirtek Employees Labor Union-FFW vs. Cirtek Electronics, G.R. No. 190515, June 6, 2011
Facts: This resolves the motion for reconsideration and supplemental motion for
reconsideration filed by respondent, Cirtek Electronics, Inc., of the Court’s Decision dated
November 15, 2010.
 14
Respondent-movant maintains that the Secretary of Labor cannot insist on a ruling beyond
the compromise agreement entered into by the parties; and that, as early as February 5,
2010, petitioner Union had already filed with the Department of Labor and Employment
(DOLE) a resolution of disaffiliation from the Federation of Free Workers resulting in the
latter’s lack of personality to represent the workers in the present case.
Issue: WON petitioner lost its personality to represent the workers because of its disaffiliation
from the Federation of Free Workers.
Held:The issue of disaffiliation is an intra-union dispute which must be resolved in a different
forum in an action at the instance of either or both the FFW and the Union or a rival labor
organization, not the employer.
Indeed, as respondent-movant itself argues, a local union may disaffiliate at any time from its
mother federation, absent any showing that the same is prohibited under its constitution or
rule. Such, however, does not result in it losing its legal personality altogether. Verily, Anglo-
KMU v. Samahan Ng MgaManggagawangNagkakaisaSa Manila Bay Spinning Mills At J.P.
Coats enlightens:
A local labor union is a separate and distinct unit primarily designed to secure and maintain
an equality of bargaining power between the employer and their employee-members. A local
union does not owe its existence to the federation with which it is affiliated. It is a separate
and distinct voluntary association owing its creation to the will of its members. The mere act
of affiliation does not divest the local union of its own personality, neither does it give the
mother federation the license to act independently of the local union. It only gives rise to a
contract of agency where the former acts in representation of the latter. (emphasis and
underscoring supplied)
MR denied.
Philippine Skylanders, Inc. vs. NLRC, G.R. No. 127374, January 31, 2002
FACTS: In November 1993 the Philippine Skylanders Employees Association (PSEA), a local
labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU), won in
the certification election conducted among the rank and file employees of Philippine
Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees Association-WATU
(PSEA-WATU) immediately protested the result of the election before the Secretary of Labor.
Several months later, PSEA sent PAFLU a notice of disaffiliation. PSEA subsequently
affiliated itself with the National Congress of Workers (NCW), changed its name to Philippine
Skylanders Employees Association – National Congress of Workers (PSEA-NCW), and to
maintain continuity within the organization, allowed the former officers of PSEA-PAFLU to
continue occupying their positions as elected officers in the newly-formed PSEA-NCW. On 17
March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was
immediately registered with the Department of Labor and Employment. Meanwhile,
apparently oblivious to PSEA’s shift of allegiance, PAFLU Secretary General SerafinAyroso
wrote Mariles C. Romulo requesting a copy of PSI’s audited financial statement. On 30 July
1994 PSI through its personnel manager Francisco Dakila denied the request citing as
reason PSEA’s disaffiliation from PAFLU and its subsequent affiliation with NCW.
Issue: WON PSEA’s disaffiliation is legitimate.
Held: At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the
jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not with the
Labor Arbiter. We upheld the right of local unions to separate from their mother federation on
the ground that as separate and voluntary associations, local unions do not owe their creation
and existence to the national federation to which they are affiliated but, instead, to the will of
their members. Yet the local unions remain the basic units of association, free to serve their
own interests subject to the restraints imposed by the constitution and by-laws of the national
federation, and free also to renounce the affiliation upon the terms laid down in the
agreement which brought such affiliation into existence. There is nothing shown in the
records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate
from the federation nor were there any conditions imposed for a valid breakaway. As such,
the pendency of an election protest involving both the mother federation and the local union
did not constitute a bar to a valid disaffiliation. It was entirely reasonable then for PSI to enter
into a collective bargaining agreement with PSEA-NCW. As PSEA had validly severed itself
from PAFLU, there would be no restrictions which could validly hinder it from subsequently
affiliating with NCW and entering into a collective bargaining agreement in behalf of its
members. Policy considerations dictate that in weighing the claims of a local union as against
those of a national federation, those of the former must be preferred. Parenthetically though,
the desires of the mother federation to protect its locals are not altogether to be shunned. It
will however be to err greatly against the Constitution if the desires of the federation would be
favored over those of its members. That, at any rate, is the policy of the law. For if it were
otherwise, instead of protection, there would be disregard and neglect of the lowly
workingmen.
Tropical Hut Employees Union vs. Tropical Hut, G.R. No. L-43495-99, January 20, 1999
FACTS: January 2, 1968, the rank and file workers of the Tropical Hut Food Market
Incorporated, referred to herein as respondent company, organized a local union called the
Tropical Hut Employees Union, known for short as the THEU, elected their officers, adopted
their constitution and by-laws and immediately sought affiliation with the National Association
of Trade Unions (NATU). On January 3, 1968, the NATU accepted the THEU application for
affiliation. Following such affiliation with NATU, Registration Certificate No. 5544-IP was
issued by the Department of Labor in the name of the Tropical Hut Employees Union —
NATU. It appears, however, that NATU itself as a labor federation, was not registered with
the Department of Labor.
Collective Bargaining Agreement was concluded between the parties on April 1, 1968, the
term of which expired on March 31, 1971.
Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective
bargaining agent for all its workers and employees in all matters concerning wages, hours of
work, and other terms and conditions of employment.
Sec. 1 —. . . Employees who are already members of the UNION at the time of the signing of
this Agreement or who become so thereafter shall be required to maintain their membership
therein as a conditionof continued employment. xxx
Sec. 3—Any employee who is expelled from the UNION for joining another federation or
forming another union, or who fails or refuses to maintain his membership therein as
required, . . . shall, upon written request of the UNION be discharged by the COMPANY.
May 21, 1971, respondent company and THEU-NATU entered into a new Collective
Bargaining Agreement which ended on March 31, 1974. This new CBA incorporated the
previous union-shop security clause and the attached checkoff authorization form.
NATU received a letter dated December 15, 1973, jointly signed by the incumbent officers of
the local union informing the NATU that THEU was disaffiliating from the NATU federation.
Secretary of the THEU, NemesioBarro, made an announcement in an open letter to the
general membership of the THEU, concerning the latter’s disaffiliation from the NATU and its
affiliation with the Confederation of General Workers (CGW). The letter was passed around
among the members of the THEU-NATU, to which around one hundred and thirtyseven (137)
signatures appeared as having given their consent to and acknowledgment of the decision to
disaffiliate the THEU from the NATU.
THEU-CGW held its annual election of officers, with Jose Encinas elected as President. On
January 3, 1974, Encinas, in his capacity as THEU-CGW President, informed the respondent
company of the result of the elections. On January 9, 1974, PacificoRosal, President of the
Confederation of General Workers (CGW), wrote a letter in behalf of complainant THEU-
CGWto the respondent company demanding the remittance of the union dues collected by
the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this was refused by the
respondent company.
A request made by the NATU federation to the respondent company to dismiss him (Encinas)
in view of his violation of Section 3 of Article III of the Collective Bargaining Agreement. At the
request of NATU, respondent company applied for clearance with the Secretary of Labor to
dismiss the other officers and members of THEU-CGW. The company also suspended them
effective that day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual
complainants against private respondents for unfair labor practices.
Acting as temporary chairman, presided over the election of officers of the remaining THEU-
NATU in an emergency meeting pending the holding of a special election to be called at a
later date.THEU-CGW asked the employees to affirm their membership. Some did not
abideso theywere informed that they will be dismissed under the CBA.
President/General Manager of respondent company, upon Dilag’s request, suspended twenty
four (24) workers on March 5, 1974,another thirty seven (37) on March 8, 1974 and two (2)
more on March 11, 1974, pending approval by the Secretary of Labor of the application for
their dismissal.
Labor Arbiter, Arbitrator Daniel Lucas issued an orderdated March 21, 1974, holding that the
issues raised by the parties became moot and academic with the issuance of NLRC Order
dated February 25, 1974 in NLRC Case No. LR-2670, which directed the holding of a
certification election among the rank and file workers of the respondent company between
the THEU-NATU and THEUCGW. He also ordered: a) the reinstatement of all complainants;
b) for the respondent company to cease and desist from committing further acts of dismissals
without previous order from the NLRC and for the complainant Tropical Hut Employees
UNION-CGW to file representation cases on a case to case basis during the freedom period
provided for by the existing CBA between the parties.
NLRC reversed the decision. Secretary of Labor rendered a decision affirming the findings of
the Commission.
ISSUE: 1) whether or not the petitioners failed to exhaust administrative remedies when
they immediately elevated the case to this Court without an appeal having been made to the
Office of the President;
2) whether or not the disaffiliation of the local union from the national federation
was valid; and
3) whether or not the dismissal of petitioner employees resulting from their
unions disaffiliation for the mother federation was illegal and constituted unfair labor practice
on the part of respondent company and federation
RULING: 1) remedy of appeal from the Secretary of Labor to the Office of the President is
not a mandatory requirement before resort to courts can be had, but an optional relief
provided by law to parties seeking expeditious disposition of their labor disputes. Failure to
avail of such relief shall not in any way served as an impediment to judicial intervention. And
where the issue is lack of power or arbitrary or improvident exercise thereof, decisions of the
 15
Secretary of Labor may be questioned in acertiorariproceeding without prior appeal to the
President.
2) local union, being a separate and voluntary association, is free to serve the
interest of all its members including the freedom to disaffiliate when circumstances warrant.
This right is consistent with the constitutional guarantee of freedom of association. All
employees enjoy the right to self organization and to form and join labor organizations of their
own choosing for the purpose of collective bargaining and to engage in concerted activities
for their mutual aid or protection. This is a fundamental right of labor that derives its existence
from the Constitution.
The inclusion of the word NATU after the name of the local union THEU in the registration
with the Department of Labor is merely to stress that the THEU is NATU’s affiliate at the time
of the registration. It does not mean that the said local union cannot stand on its own. Neither
can it be interpreted to mean that it cannot pursue its own interests independently of the
federation. A local union owes its creation and continued existence to the will of its members
and not to the federation to which it belongs. When the local union withdrew from the old
federation to join a new federation, it was merely exercising its primary right to labor
organization for the effective enhancement and protection of common interests. In the
absence of enforceable provisions in the federation’s constitution preventing disaffiliation of a
local union a local may sever its relationship with its parent. Nothing in the constitution and by
laws of THEU NATU, prohibits the disaffiliation from NATU. Besides NATU is not even
recognized as a national federation.
3) When the THEU disaffiliated from its mother federation, the former did not
lose its legal personality as the bargaining union under the CBA. Moreover, the union security
clause embodied in the agreements cannot be used to justify thedismissals meted to
petitioners since it is not applicable to the circumstances obtaining in this case. The CBA
imposes dismissal only in case an employee is expelled from the union for joining another
federation or for forming another union or who fails or refuses to maintain membership
therein. The case at bar does not involve the withdrawal of merely some employees from the
union but of the whole THEU itself from its federation. Clearly, since there is no violation of
the union security provision in theCBA, there was no sufficient ground to terminate the
employment of petitioners.
Elisco-Elirol Labor Union (NAFLU) vs. Noriel, G.R. No. L-41995, December 29, 1977
Facts: Elisco-Elirol Labor Union (NAFLU) negotiated and executed a CBA with Elizalde Steel
Consolidated Inc. However, Elisco-Elirol then was not yet a registered union. In order to be
able to execute the CBA, they had the union registered, which was granted. They likewise
moved to disaffiliate themselves with NAFLU. Elizalde, however, refused to recognized them
as the SEBA and it dismissed the officers of the union because of the union security clause in
the CBA. Elisco-Elirol filed a complaint for unfair labor practice with the BLR. The BLR
dismissed.
Issue: Whether or not Elisco-Elirol is the SEBA
Held: YES. The error of BLR is not perceiving that the employees and members of the local
union did not form a new union but merely registered the local union as was their right.
Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of employees and members of the
local union was the principal party to the agreement. NAFLU as the mother union" in
participating in the execution of the bargaining agreement with respondent company acted
merely as agent of the local union, which remained the basic unit of the association existing
principally and freely to serve the common interest of all its members, including the freedom
to disaffiliate when the circumstances so warranted as in the present case.
"(T)he locals are separate and distinct units primarily designed to secure and maintain an
equality of bargaining power between the employer and their employee-members in the
economic struggle for the fruits of the joint productive effort of labor and capital; and the
association of the locals into the national union (as PAFLU) was in furtherance of the same
end. These associations are consensual entities capable of entering into such legal relations
with their members. The essential purpose was the affiliation of the local unions into a
common enterprise to increase by collective action the common bargaining power in respect
of the terms and conditions of labor. Yet the locals remained the basic units of association,
free to serve their own and the common interest of all, subject to the restraints imposed by
the Constitution and By-Laws of the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought it into existence."
(Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills Inc.)
Such maintenance of the membership clause could not be so distorted.. What is paramount
is the security of tenure of the workers and not the security of the union.
S.S. Ventures International, Inc. vs. S.S. Ventures Labor Union, G.R. No. 161690, July 23,
2008
FACTS:Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA- registered export firm
with principal place of business at Phase I-PEZA- Bataan Export Zone, Mariveles, Bataan, is
in the business of manufacturing sports shoes. Respondent S.S. Ventures Labor Union
(Union) is a labor organization registered with the DOLE.
March 21, 2000, the Union filed with DOLE-Region III a petition for certification election in
behalf of the rank-and-file employees
August 21, 2000, Ventures filed a Petition to cancel the Union’s certificate of registration
alleging that the Union deliberately and maliciously included the names of more or less 82
former employees no longer connected with Ventures in its list of members who attended the
organizational meeting and in the adoption/ratification of its constitution and by-laws; that No
organizational meeting and ratification actually took place; and the Union’s application for
registration was not supported by at least 20% of the rank-and-file employees of Ventures.
Regional Director of DOLE- Region III favored Ventures and resolved to Cancel the
Certificate of the union. On appeal, the BLR Director granted the Union’s appeal and
reversing the decision of RD. Ventures went to the CA. The CA dismissed Ventures’ petition
as well as the MR. Hence, this petition for review
ISSUE:Whether the registration of the Union must be cancelled.
HELD:NO. The right to form, join, or assist a union is specifically protected by Art. XIII,
Section 3 of the Constitution and such right, according to Art. III, Sec. 8 of the Constitution
and Art. 246 of the Labor Code, shall not be abridged. Once registered with the DOLE, a
union is considered a legitimate labor organization endowed with the right and privileges
granted by law to such organization. While a certificate of registration confers a union with
legitimacy with the concomitant right to participate in or ask for certification election in a
bargaining unit, the registration may be canceled or the union may be decertified as the
bargaining unit, in which case the union is divested of the status of a legitimate labor
organization. Among the grounds for cancellation is the commission of any of the acts
enumerated in Art. 239(a) of the Labor Code, such as fraud and misrepresentation in
connection with the adoption or ratification of the union’s constitution and like documents.
The Court, has in previous cases, said that to decertify a union, it is not enough to show that
the union includes ineligible employees in its membership. It must also be shown that there
was misrepresentation, false statement, or fraud in connection with the application for
registration and the supporting documents, such as the adoption or ratification of the
constitution and by-laws or amendments thereto and the minutes of ratification of the
constitution or by-laws, among other documents.
The evidence presented by Ventures consist mostly of separate hand-written statements of
82 employees who alleged that they were unwilling or harassed signatories to the attendance
sheet of the organizational meeting. However these evidence was presented seven months
after the union filed its petition for cancellation of registration. Hence these statements
partake of the nature of withdrawal of union membership executed after the Union’s filing of a
petition for certification election on March 21, 2000. We have said that the employees’
withdrawal from a labor union made before the filing of the petition for certification election is
presumed voluntary, while withdrawal after the filing of such petition is considered to be
involuntary and does not affect the same. Now then, if a withdrawal from union membership
done after a petition for certification election has been filed does not vitiate such petition, it is
but logical to assume that such withdrawal cannot work to nullify the registration of the union.
The Court is inclined to agree with the CA that the BLR did not abuse its discretion nor
gravely err when it concluded that the affidavits of retraction of the 82 members had no
evidentiary weight.
The registration or the recognition of a labor union after it has submitted the corresponding
papers is not ministerial on the part of the BLR. It becomes mandatory for the BLR to check if
the requirements under Art. 234 of the Labor Code have been sedulously complied with. If
the union’s application is infected by falsification and like serious irregularities, especially
those appearing on the face of the application and its attachments, a union should be denied
recognition as a legitimate labor organization. The issuance to the Union of Certificate of
Registration, in the case at bar, necessarily implies that its application for registration and the
supporting documents thereof are prima facie free from any vitiating irregularities.
The relevance of the 82 individuals’ active participation in the Union’s organizational meeting
and the signing ceremonies thereafter comes in only for purposes of determining whether or
not the Union, even without the 82, would still meet what Art. 234(c) of the Labor Code
requires to be submitted, requiring that the union applicant must file the names of all its
members comprising at least twenty percent (20%) of all the employees in the bargaining unit
where it seeks to operate.
In its union records on file with this Bureau, respondent union submitted the names of 542
members. This number easily complied with the 20% requirement, be it 1,928 or 2,202
employees in the establishment. Even subtracting the 82 employees from 542 leaves 460
union members, still within 440 or 20% of the maximum total of 2,202 rank-and-file
employees of the employer Venture.
Whatever misgivings the petitioner may have with regard to the 82 dismissed employees is
better addressed in the inclusion-exclusion proceedings during a pre-election conference.
The issue surrounding the involvement of the 82 employees is a matter of membership or
voter eligibility. It is not a ground to cancel union registration.
For fraud and misrepresentation to be grounds for cancellation of union registration under
Article 239, the nature of the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members.
Kiok Loy vs. NLRC, G.R. No. 54334, January 22, 1986
Doctrine: 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.
 16
Facts:The PambansangKilusangPaggawa, a legitimate late labor federation, won and was
subsequently certified in a resolution by the Bureau of Labor Relations as the sole and
exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant.
The Union furnished the Company with two copies of its proposed collective bargaining
agreement. At the same time, it requested the Company for its counter proposals. Both
requests were ignored and remained unacted upon by the Company.
Thereafter, the Union filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on
ground of unresolved economic issues in collective bargaining.
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But
all attempts towards an amicable settlement failed.
The case was brought to the National Labor Relations Commission (NLRC) for compulsory
arbitration pursuant to Presidential Decree No. 823, as amended. But the Company
requested for a lot of postponements. NLRC ruled that respondent Sweden Ice Cream is
guilty of unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article 249),
of P.D. 442, as amended.
Issue: Whether the Company is guilty of unfair labor practice for refusal to bargain
Held: Yes. Petition dismissed for lack of merit. Collective bargaining 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.
Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to
refuse "to meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work, and all other terms and
conditions of employment including proposals for adjusting any grievance or question arising
under such an agreement and executing a contract incorporating such agreement, if
requested by either party.
The mechanics of collective bargaining are set in motion only when the following jurisdictional
preconditions are present, namely,
(1) possession of the status of majority representation of the employees'
representative in accordance with any of the means of selection or designation
provided for by the Labor Code;
(2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New Labor Code.
A Company's refusal to make counter proposal if considered in relation to the entire
bargaining process, may indicate bad faith since the Union's request for a counter proposal is
left unanswered. Besides, petitioner Company's approach and attitude-stalling the negotiation
by a series of postponements, non-appearance at the hearing conducted, and undue delay in
submitting its financial statements, lead to no other conclusion except that it is unwilling to
negotiate and reach an agreement with the Union.
General Milling Corp. vs. CA, G.R. No. 146728, February 11, 2004
FACTS: In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling
Corporation (GMC) employed 190 workers. They were all members of private respondent
General Milling Corporation Independent Labor Union. On April 28, 1989, GMC and the union
concluded a collective bargaining agreement (CBA) which included the issue of
representation effective for a term of three years. The day before the expiration of the CBA,
the union sent GMC a proposed CBA, with a request that a counter-proposal be submitted
within ten (10) days. However, GMC had received collective and individual letters from
workers who stated that they had withdrawn from their union membership, on grounds of
religious affiliation and personal differences. Believing that the union no longer had standing
to negotiate a CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the union’s officers, RitoMangubat and Victor
Lastimoso. The letter stated that it felt there was no basis to negotiate with a union which no
longer existed, but that management was nonetheless always willing to dialogue with them
on matters of common concern and was open to suggestions on how the company may
improve its operations. In answer, the union officers wrote a letter dated December 19, 1991
disclaiming any massive disaffiliation or resignation from the union and submitted a
manifesto, signed by its members, stating that they had not withdrawn from the union.
NLRC held that the action of GMC in not negotiating was ULP.
ISSUE: WON the company (GMC) should have entered into collective bargaining with the
union
HELD: The law mandates that the representation provision of a CBA should last for five
years. The relation between labor and management should be undisturbed until the last 60
days of the fifth year. Hence, it is indisputable that when the union requested for a
renegotiation of the economic terms of the CBA on November 29, 1991, it was still the
certified collective bargaining agent of the workers, because it was seeking said renegotiation
within five (5) years from the date of effectivity of the CBA on December 1, 1988. The union’s
proposal was also submitted within the prescribed 3-year period from the date of effectivity of
the CBA, albeit just before the last day of said period. It was obvious that GMC had no valid
reason to refuse to negotiate in good faith with the union. For refusing to send a counter-
proposal to the union and to bargain anew on the economic terms of the CBA, the company
committed an unfair labor practice under Article 248 of the Labor Code.
ART. 253-A. Terms of a collective bargaining agreement. – Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated
not later than three (3) years after its execution….
ART. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to
commit any of the following unfair labor practice:
(g) To violate the duty to bargain collectively as prescribed by this Code;
Under Article 252 abovecited, both parties are required to perform their mutual obligation to
meet and convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement. The union lived up to this obligation when it presented proposals for a new CBA
to GMC within three (3) years from the effectivity of the original CBA. But GMC failed in its
duty under Article 252. What it did was to devise a flimsy excuse, by questioning the
existence of the union and the status of its membership to prevent any negotiation.
ART. 250. Procedure in collective bargaining. – The following procedures shall be observed
in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written
notice upon the other party with a statement of its proposals. The other party
shall make a reply thereto not later than ten (10) calendar days from receipt of
such notice.
GMC’s failure to make a timely reply to the proposals presented by the union is indicative of
its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer
represented the workers, was mainly dilatory as it turned out to be utterly baseless.
Failing to comply with the mandatory obligation to submit a reply to the union’s proposals,
GMC violated its duty to bargain collectively, making it liable for unfair labor practice.
San Pedro Hospital of Digos vs. Secretary of Labor, G.R. No. 104624, October 11, 2006
FACTS: Petitioner had a three-year collective bargaining agreement (CBA) covering the
period December 15, 1987 until December 15, 1990, with herein private respondent,
NagkabiusangMamumuosa San Pedro Hospital of Digos — National Federation of Labor
(NAMASAP-NFL), the exclusive bargaining agent of the hospital’s rank-and-file workers. After
the parties failed to reach agreement on the issues of raising wages, the union during the
meeting of February 19, 1991 declared a deadlock.
On February 20, 1991, respondent union saturated petitioner’s premises with streamers and
picketed the hospital. The operations of the hospital having come to a grinding halt, the
hospital management considered the union actions as tantamount to a strike. On May 28,
1991, respondent union struck. Despite the NCMB’s call for a conciliation conference, nurses
and nurse aides who were members of the union abandoned their respective department and
joined the picket line a week later. Doctors began leaving the hospital and the number of
patients dwindled. The last patient was discharged on June 10, 1991.
On June 12, 1991, a “Notice of Temporary Suspension of Operation” was issued by petitioner
hospital and submitted to the local office of the NCMB on June 14, 1991. Then Secretary of
Labor Nieves Confessor assumed jurisdiction over the labor dispute and issued an order
directing all workers to return to work. However, this order was received by petitioner only on
June 20, 1991. In the meantime, it had already notified the DOLE via its letter dated June 13,
1991, which was received by the DOLE on June 14, 1991, that it would temporarily suspend
operations for six (6) months effective June 15, 1991, or up to December 15, 1991. Petitioner
thus refused the return of its striking workers on account of such suspension of operations.
ISSUE: WON the Secretary can validly compel the employer to enter into a new CBA even
during temporary suspension of operations (what if in permanent closure?)
HELD: Temporary suspension of operations is recognized as a valid exercise of management
prerogative provided it is not carried out in order to circumvent the provisions of the Labor
Code or to defeat the rights of the employees under the Code. The determination to cease or
suspend operations is a prerogative of management that the State usually does not interfere
with, as no business can be required to continue operating at a loss simply to maintain the
workers in employment. Such an act would be tantamount to a taking of property without due
process of law, which the employer has a right to resist. But where it is shown that the
closure is motivated not by a desire to prevent further losses, but to discourage the workers
from organizing themselves into a union for more effective negotiation with management, the
State is bound to intervene.
The burden of proving that such a temporary suspension is bona fide falls upon the employer.
In this instance, petitioner had to establish the fact of its precarious financial health, that its
cessation of operation was really necessitated by its financial condition, and that said
condition would probably be alleviated or improved, or its losses abated, by undertaking such
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suspension of operation. The fact that the conciliator never asked for them is no sufficient
excuse for not presenting the same, as such was petitioner’s duty. Neither is it acceptable for
petitioner to allege that latest financial statement (for the year 1991) were still being prepared
by its accountants and not yet ready for submission, since the financial statement for the prior
years 1989 and 1990 would have sufficed.
It is a hornbook rule that employers who contemplate terminating the services of their
workers must base their decisions on more than just flimsy excuses, considering that the
dismissal of an employee from work involves not only the loss of his position but, what is
more important, his means of livelihood. The same principle applies in temporary suspension
of operations, as in this case, considering that it involves laying off employees for a period of
six months. Petitioner, having wretchedly failed to justify by even the most rudimentary proof
its temporary suspension of operations, must bear the consequences thereof. We thus hold
that the Secretary of Labor and Employment did not act with grave abuse of discretion in
finding the temporary suspension unjustified and illegal.
The order of the secretary in ordering the hospital to enter into a new CBA was valid.
Secretary was of the impression that petitioner would operate again after the lapse of the six-
month suspension of operations on December 16, 1991, and so ordered the parties to enter
into and formalize a new CBA to govern their relations upon resumption of operations. On the
other hand, the aforequoted portion of the Order must be understood in the context of the
Secretary’s finding that the temporary suspension was only for circumventing the return-to-
work order, but in spite of which he held that he could not order petitioner to continue
operations as “this would infringe on its inherent right to manage and conduct its own
business affairs”; he thus ordered instead the payment of backwages to the returning workers
who were refused admittance by petitioner on June 21, 1991. And as above adverted to, he
also ordered the parties to execute a new CBA to govern their relations upon the expiry of the
period of suspension and the resumption of normal operations.
Did the Secretary act in excess of jurisdiction in imposing the wage increase and union shop
provision on the petitioner? We hold that he did not. While petitioner cannot be forced to
abandon its suspension of operations even if said suspension be declared unjustified, illegal
and invalid, neither can petitioner evade its obligation to bargain with the union, using the
cessation of its business as reason therefor. For, as already indicated above, the employer-
employee relationship was merely suspended (and not terminated) for the duration of the
temporary suspension. Using the suspension as an excuse to evade the duty to bargain is
further proof of its illegality. It shows abuse of this option and bad faith on the part of
petitioner. And since it refused to bargain, without valid and sufficient cause, the Secretary in
the exercise of his powers under Article 263(i) of the Labor Code to decide and resolve labor
disputes, properly granted the wage increase and imposed the union shop provision.
Notwithstanding that respondent Secretary did not act with grave abuse of discretion in
issuing the challenged Orders, we cannot ignore the supervening event which occurred after
December 15, 1991, i.e., the subsequent permanent cessation of petition of petitioner on
account of losses. Thus, despite the absence of grave abuse of discretion on the part of the
respondent Secretary, this Court cannot impose upon petitioner the directive to enter into a
new CBA with the union for the very simple reason that to do so would be to compel
petitioner to continue its business when it had already decided to close shop, and that would
be judicial tyranny on our part.
Sundowner Development Corp. vs. Drilon, G.R. No. 82341, December 6, 1989
FACTS: Hotel Mabuhay leased the premises belonging to Syjuco. However, due to non-
payment of rentals, a case for ejectment was filed and Hotel Mabuhay offered to amicably
settle by surrendering the premises and to sell its assets and property to any interested party,
to which Syjuco acceded.
Mabuhay offered to sell its assets and personal properties in the premises to petitioner to
which petitioner agreed. A deed of assignment of said assets and personal properties was
executed by Mabuhay on April 29,1987 in favor of petitioner.
On same date Syjuco formally turned over the possession of the leased premises to
petitioner who actually took possession and occupied the same on May 1, 1987.
On May 4, 1987, respondent National Union of Workers in Hotel, Restaurant and Allied
Services (NUWHRAIN for short) picketed the leased premises, barricaded the entrance to the
leased premises and denied petitioner's officers, employees and guests free access to and
egress from said premises. Respondent NUWHRAIN on July 13, 1987 filed its position paper
alleging connivance between Mabuhay and petitioner in selling the assets and closing the
hotel to escape its obligations to the employees of Mabuhay and so it prays that petitioner
accept the workforce of Mabuhay and pay backwages from April 15,1986 to April 28,1987,
the day Mabuhay stopped operation.
ISSUE: Whether or not the purchaser of the assets of an employer corporation can be
considered a successor employer of the latter's employees.
HELD: The absorption of the employees of Hotel Mabuhay may not be imposed on
Sundowner, who has no liability whatsoever to the employees of Hotel Mabuhay and its
responsibility if at all, is only to consider them for re-employment in the operation of the
business in the same premises. There can be no implied acceptance of the employees of
Hotel Mabuhay by petitioner as it is expressly provided in the agreement that petitioner has
no commitment or duty to absorb them.
The rule is that unless expressly assumed. labor contracts such as employment contracts
and CBAs are not enforceable against a transferee of an enterprise, labor contracts being IN
PERSONAM, thus, binding only between the parties. A labor contract merely creates an
action in personam and does not create an real right which should be respected by third
parties. This conclusion draws its force from the right of an employer to select his employees
and to decide when to engage them as protected under our Constitution and the same can
only be restricted by law through the exercise of police power.
As a general rule, there is no law requiring a bona fide purchaser of assets of an on-going
concern to absorb in its employ the employees of the latter. However, although the purchaser
is not legally bound to absorb in its employ the employees of the seller, the parties are liable
to the employees if the transaction between is clothed with bad faith.
Rivera vs. Espiritu, G.R. No. 135547, January 23, 2002
FACTS: PAL was suffering from a difficult financial situation in 1998. It was faced with
bankruptcy and was forced to adopt a rehabilitation plan and downsized its labor force by
more than 1/3. PALEA (PAL Employees Association) went on a four-day strike to protest
retrenchment measures in July 1998. PAL ceased operations on Sep 23, 1998.
PALEA board again wrote the President on Sep 28, 1998. Among others, it proposed the
suspension of the PAL-PALEA CBA for a period of ten years, subject to certain conditions.
PALEA members accepted such terms through a referendum on Oct 2, 1998. PAL resumed
domestic operations on Oct 7, 1998.
Seven officers and members of PALEA filed instant petition to annul the Sep 27, 1998
agreement entered into between PAL and PALEA.
Issue: WON negotiations may be suspended for 10 years.
Held: YES. CBA negotiations may be suspended for 10 years.
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.
SMC-Union vs. Confesor, G.R. No. 111262, September 19, 1996
FACTS: On June 28, 1990, petitioner-union San Miguel Corporation Employees Union —
PTGWO entered into a CBA with private respondent San Miguel Corporation (SMC) to take
effect upon the expiration of the previous CBA or on June 30, 1989.
This CBA provided, among others, that:
ARTICLE XIV
DURATION OF AGREEMENT
Sec. 1. This Agreement which shall be binding upon the parties hereto and their respective
successors-in-interest, shall become effective and shall remain in force and effect until June
30, 1992.
Sec. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this
Agreement insofar as the representation aspect is concerned, shall be for five (5) years from
July 1, 1989 to June 30, 1994. Hence, the freedom period for purposes of such
representation shall be sixty (60) days prior to June 30, 1994.
Sec. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all
provisions of this Agreement, except insofar as the representation aspect is concerned. If no
agreement is reached in such negotiations, this Agreement shall nevertheless remain in force
up to the time a subsequent agreement is reached by the parties.
Meanwhile, effective October 1, 1991, 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). Notwithstanding the spin-offs, the CBA
remained in force and effect.
After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA and
Article 253-A of the Labor Code. Negotiations started sometime in July, 1992 with the two
parties submitting their respective proposals and counterproposals.
During the negotiations, the petitioner-union insisted that the bargaining unit of SMC should
still include the employees of the spun-off corporations: Magnolia and SMFI; and that the
renegotiated terms of the CBA shall be effective only for the remaining period of two years or
until June 30, 1994.
 18
SMC, on the other hand, contended that the members/employees who had moved to
Magnolia and SMFI, automatically ceased to be part of the bargaining unit at the SMC.
Furthermore, the CBA should be effective for three years in accordance with Art. 253-A of the
Labor Code.
Unable to agree on these issues with respect to the bargaining unit and duration of the CBA,
petitioner-union declared a deadlock on September 29, 1990.
(Notice of strike…Secretary assumed jurisdiction)
Secretary’s decision: the CBA shall be effective for the period of 3 years from June 30, 1992;
and that such CBA shall cover only the employees of SMC and not of Magnolia and SMFI.
ISSUES: 1) Whether or not the duration of the renegotiated terms of the CBA is to be
effective for three years of for only two years; and 2) Whether or not the bargaining unit of
SMC includes also the employees of the Magnolia and SMFI.
HELD: We agree with the Secretary of Labor.
Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads:
Art. 253-A. Terms of a CBA. — Any CBA that the parties may enter into shall, insofar as the
representation aspect is concerned, be for a term of 5 years. No petition questioning the
majority status of the incumbent bargaining agent shall be entertained and no certification
election shall be conducted by the Department of Labor and Employment outside of the sixty-
day period immediately before the date of expiry of such five year term of the CBA. All other
provisions of the CBA shall be renegotiated not later than 3 years after its execution. Any
agreement on such other provisions of the CBA entered into within 6 months from the date of
expiry of the term of such other provisions as fixed in such CBA, shall retroact to the day
immediately following such date. If any such agreement is entered into beyond six months,
the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the
renegotiation of the CBA, the parties may exercise their rights under this Code. (Emphasis
supplied.)
The “representation aspect” refers to the identity and majority status of the union that
negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining
unit concerned. “All other provisions” simply refers to the rest of the CBA, economic as well
as non-economic provisions, except representation.
The law is clear and definite on the duration of the CBA insofar as the representation aspect
is concerned, but is quite ambiguous with the terms of the other provisions of the CBA. It is a
cardinal principle of statutory construction that the Court must ascertain the legislative intent
for the purpose of giving effect to any statute.
(as usual mahabang conversation ng mga framers)
Obviously, the framers of the law wanted to maintain industrial peace and stability by having
both management and labor work harmoniously together without any disturbance. Thus, no
outside union can enter the establishment within 5 years and challenge the status of the
incumbent union as the exclusive bargaining agent. Likewise, 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. The CBA is a contract between the
parties and the parties must respect the terms and conditions of the agreement. Notably, the
framers of the law did not give a fixed term as to the effectivity of the terms and conditions of
employment. It can be gleaned from their discussions that it was left to the parties to fix the
period.
The issue as to the term of the non-representation provisions of the CBA need not
belaboured. 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.
Thus, we do not find any grave abuse of discretion on the part of the Secretary of Labor in
ruling that the effectivity of the renegotiated terms of the CBA shall be for 3 years.
II. Undeniably, the transformation of the companies was a management prerogative and
business judgment which the courts can not look into unless it is contrary to law, public policy
or morals. Neither can we impute any bad faith on the part of SMC so as to justify the
application of the doctrine of piercing the corporate veil.18 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. 19 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.
Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical
personalities. Thus, they can not belong to a single bargaining unit.
Moreover, 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. 22 Considering the spin-offs, the
companies would consequently have their respective and distinctive concerns in terms of the
nature of work, wages, hours of work and other conditions of employment. Interests of
employees in the different companies perforce differ. 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.
LMG Chemicals Corp vs. Secretary of Labor, G.R. No. 127422, April 17, 2001
FACTS: LMG Chemicals Corp, (petitioner) is a domestic corp engaged in the manufacture
and sale of various kinds of chemical substances, including aluminum sulfate which is
essential in purifying water, and technical grade sulfuric acid used in thermal power plants.
Petitioner has three divisions, namely: the Organic Division, Inorganic Division and the
Pinamucan Bulk Carriers. There are two unions within petitioner’s Inorganic Division. One
union represents the daily paid employees and the other union represents the monthly paid
employees. Chemical Workers Union, respondent, is a duly registered labor organization
acting as the collective bargaining agent of all the daily paid employees of petitioner’s
Inorganic Division.
Sometime in December 1995, the petitioner and the respondent started negotiation for a new
CBA as their old CBA was about to expire. They were able to agree on the political provisions
of the new CBA, but no agreement was reached on the issue of wage increase. The
economic issues were not also settled.
With the CBA negotiations at a deadlock (Strike…Secretary assumed jurisdiction)
Secretary of Labor and Employment granted an increase of P140 (higher than the offer of
petitioner-company of P135). Also, as to the effectivity of the new CBA…Sec held:
3. Effectivity of the new CBA
Article 253-A of the Labor Code, as amended, provides that when no new CBA is signed
during a period of six months from the expiry date of the old CBA, the retroactivity period
shall be according to the parties’ agreement, Inasmuch as the parties could not agree on this
issue and since this Office has assumed jurisdiction, then this matter now lies at the
discretion of the Secretary of labor and Employment. Thus the new Collective Bargaining
Agreement which the parties will sign pursuant to this Order shall retroact to January 1, 1996.
petitioner contends that public respondent committed grave abuse of discretion when he
ordered that the new CBA which the parties will sign shall retroact to January 1, 1996
ISSUE: Whether or not the new CBA shall retroact?
HELD: Petitioner insists that public respondent’s discretion on the issue of the date of the
effectivity of the new CBA is limited to either: (1) leaving the matter of the date of effectivity of
the new CBA is limited to either: (1) leaving the matter of the date of effectivity of the new
CBA to the agreement of the parties or (2) ordering that the terms of the new CBA be
prospectively applied.
It must be emphasized that respondent Secretary assumed jurisdiction over the dispute
because it is impressed with national interest. As noted by the Secretary, “the petitioner corp
was then supplying the sulfate requirements of MWSS as well as the sulfuric acid of
NAPOCOR, and consequently, the continuation of the strike would seriously affect the water
supply of Metro Manila and the power supply of the Luzon Grid.” Such authority of the
Secretary to assume jurisdiction carries with it the power to determine the retroactivity of the
parties’ CBA.
It is well settled in our jurisprudence that the authority of the Secretary of Labor to assume
jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to national interest includes and extends to all questions and controversies
arising therefrom. The power is plenary and discretionary in nature to enable him to
effectively and efficiently dispose of the primary dispute.
This Court held in St. Luke’s Medical Center, Inc. vs. Torres:
Therefore in the absence of the specific provision of law prohibiting retroactivity of the
effectivity of the arbitral awards issued by the Secretary of Labor pursuant to Article 263(g) of
the Labor Code, such as herein involved, public respondent is deemed vested with plenary
powers to determine the effectivity thereof.”
MERALCO vs. Quisumbing, G.R. No. 127598, January 27, 1999
FACTS: The court directed the parties to execute a CBA incorporating the terms among
which are the following modifications among others: Wages: PhP 1,900 for 1995-1996;
Retroactivity: December 28, 1996-Dec. 1999, etc. Dissatisfied, some members of the union
filed a motion for intervention/reconsideration. Petitioner warns that is the wage increase of
Php2,000.00 per month as ordered is allowed, it would pass the cost covering such increase
to the consumers through an increase rate of electricity. On the retroactivity of the CBA
arbitral award, the parties reckon the period as when retroaction shall commence.
 19
ISSUE: Whether or not retroactivity of arbitral awards shall commence at such time as
granted by Secretary.
RULING: In St. Luke’s Medical vs Torres, a deadlock developed during CBA negotiations
between management unions. The Secretary assumed jurisdiction and ordered the
retroaction of the CBA to the date of expiration of the previous CBS. The Court ratiocinated
thus: In the absence of a specific provision of law prohibiting retroactive of the effectivity of
arbitral awards issued by the Secretary pursuant to article 263(g) of the Labor Code, public
respondent is deemed vested with the plenary and discretionary powers to determine the
effectivity thereof.
In general, a CBA negotiated within six months after the expiration of the existing CBA
retroacts to the day immediately following such date and if agreed thereafter, the effectivity
depends on the agreement of the parties. On the other hand, the law is silent as to the
retroactivity of a CBA arbitral award or that granted not by virtue of the mutual agreement of
the parties but by intervention of the government. In the absence of a CBA, the Secretary’s
determination of the date of retroactivity as part of his discretionary powers over arbitral
awards shall control.
Wherefore, the arbitral award shall retroact from December 1, 1995 to November 30, 1997;
and the award of wage is increased from Php1,900 to Php2,000.
FVC-Labor Union-PTGWO vs. SANAMA-FVC-SIGLO, G.R. No. 176249, Novber 27, 2009
Facts:On December 22, 1997, the petitioner FVCLU-PTGWO –the recognized bargaining
agent of the rank-and-fileemployees of the FVC Philippines, Incorporated – signed a
five-year collective bargaining agreement with the company. The five-year CBA period
was from February 1, 1998 to January 30, 2003. At the end of the 3rd year of the five-year
term and pursuant to the CBA, FVCLU-PTGWO and the company entered into the
renegotiation of the CBA and modified, among other provisions, the CBA’s duration. Article
XXV, Section 2 of the renegotiated CBA provides that “this re-negotiation
agreement shall take effect beginning February 1, 2001 and until May 31, 2003” thus
extending the original five-year period of the CBA by four (4) months. On January 21, 2003,
nine (9) days before the January 30, 2003 expiration of the originally-agreed five-year
CBA term (and four [4] months and nine [9] days away from theexpiration of the amended
CBA period), the respondent Sama-Samang Nagkakaisang Manggagawasa FVC-Solidarity
of Independent and General Labor Organizations (SANAMA-SIGLO) filed before
the Department of Labor and Employment (DOLE) a petition for certification election for the
same rank-and-file unit covered by the FVCLU-PTGWO CBA. FVCLU-PTGWO moved
to dismiss the petition on the ground that the certification election petition was filed
outside the freedom period or outside of the sixty (60) days before the expiration of the CBA
on May 31, 2003.
Issue:Was the certification election filed within the freedom period?
Ruling:Yes. While the parties may agree to extend the CBA’s original five-year term
together with all other CBA provisions, any such amendment or term in excess of five
years will not carry with it a change in the union’s exclusive collective
bargaining status. By express provision of Article 253-A, the exclusive bargaining status
cannot go beyond five years and the representation status is a legal matter not for
the workplace parties to agree upon. In other words, despite an agreement for a CBA with a
life of more than five years, either as an original provision or by amendment, the
bargaining union’s exclusive bargaining status is effective only for five years and can be
challenged within sixty (60) days prior to the expiration of the CBA’s first five years. In the
present case, the CBA was originally signed for a period of five years, i.e., from
February 1, 1998 to January 30, 2003, with a provision for the renegotiation of the CBA’s
other provisions at the end of the 3rd year of the five-year CBA term. Thus, prior to January
30, 2001 the workplace parties sat down for renegotiation but instead of confining
themselves to the economic and non-economic CBA provisions, also extended the life of the
CBA for another four months, i.e., from the original expiry date on January 30, 2003
to May 30, 2003. This negotiated extension of the CBA term has no legal effect on the
FVCLU-PTGWO’s exclusive bargaining representation status which remained effective
only for five years ending on the original expiry date of January 30, 2003. Thus, sixty days
prior to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a petition
for certification election. Its petition, filed on January 21, 2003 or nine (9) days before the
expiration of the CBA and of FVCLU-PTGWO’s exclusive bargaining status, was seasonably
filed.
Benguet Consolidated, Inc., vs. BCI Employees and Workers’ Union, G.R. No. L-24711, April
30, 1968
FACTS: On June 23, 1959, the Benguet-Balatoc Workers Union (“BBWU”), for and in behalf
of all Benguet Consolidated, Inc (BENGUET) employees in its mines and milling
establishment located at Balatoc, Antamok and Acupan, Mt. Province, entered into a
Collective Bargaining Contract (CONTRACT) with BENGUET. The CONTRACT was
stipulated to be effective for a period of 4-1/2 years, or from June 23, 1959 to December 23,
1963. It likewise embodied a No-Strike, No-Lockout clause.
3 years later, or on April 6, 1962, a certification election was conducted by the Department of
Labor among all the rank and file employees of BENGUET in the same collective bargaining
units. BCI EMPLOYEES & WORKERS UNION (UNION) obtained more than 50% of the total
number of votes, defeating BBWU. The Court of Industrial Relations certified the UNION as
the sole and exclusive collective bargaining agent of all BENGUET employees as regards
rates of pay, wages, hours of work and such other terms and conditions of employment
allowed them by law or contract.
Later on, the UNION filed a notice of strike against BENGUET. UNION members who were
BENGUET employees in the mining camps at Acupan, Antamok and Balatoc, went on strike.
The strike was attended by violence, some of the workers and executives of the BENGUET
were prevented from entering the premises and some of the properties of the BENGUET
were damaged as a result of the strike. Eventually, the parties agreed to end the dispute.
BENGUET and UNION executed the AGREEMENT. PAFLU placed its conformity thereto.
About a year later or on January 29, 1964, a collective bargaining contract was finally
executed between UNION-PAFLU and BENGUET.
Meanwhile, BENGUET sued UNION, PAFLU and their Presidents to recover the amount the
former incurred for the repair of the damaged properties resulting from the strike. BENGUET
also argued that the UNION violated the CONTRACT which has a stipulation not to strike
during the effectivity thereof.
Defendants unions and their presidents defended that: (1) they were not bound by the
CONTRACT which BBWU, the defeated union, had executed with BENGUET; (2) the strike
was due, among others, to unfair labor practices of BENGUET; and (3) the strike was lawful
and in the exercise of the legitimate rights of UNION-PAFLU under Republic Act 875.
The trial court dismissed the complaint on the ground that the CONTRACT, particularly the
No-Strike clause, did not bind defendants. BENGUET interposed the present appeal.
ISSUE: Did the Collective Bargaining Contract executed between Benguet and BBWU on
June 23, 1959 and effective until December 23, 1963 automatically bind UNION-PAFLU upon
its certification, on August 18, 1962, as sole bargaining representative of all BENGUET
employees
RULING: NO. BENGUET erroneously invokes the so-called “Doctrine of Substitution”
referred to in General Maritime Stevedore’s Union v. South Sea Shipping Lines where it was
ruled that:
“We also hold that where the bargaining contract is to run for more than two years, the
principle of substitution may well be adopted and enforced by the CIR to the effect that after
two years of the life of a bargaining agreement, a certification election may be allowed by the
CIR, that if a bargaining agent other than the union or organization that executed the
contract, is elected, said new agent would have to respect said contract, but that it may
bargain with the management for the shortening of the life of the contract if it considers it too
long, or refuse to renew the contract pursuant to an automatic renewal clause.”
BENGUET’s reliance upon the Principle of Substitution is totally misplaced. This principle,
formulated by the NLRB as its initial compromise solution to the problem facing it when there
occurs a shift in employees’ union allegiance after the execution of a bargaining contract with
their employer, 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‘ (principal) interest in the existing bargaining agreement. The agent’s (union)
interest never entered the picture. The majority of the employees, as an entity under the
statute, is the true party in interest to the contract, holding rights through the agency of the
union representative. Thus, any exclusive interest claimed by the agent is defeasible at the
will of the principal. The “substitutionary” doctrine only provides that the employees cannot
revoke the validly executed collective bargaining contract with their employer by the simple
expedient of changing their bargaining agent. And it is in the light of this that the phrase “said
new agent would have to respect said contract” must be understood. It only means that the
employees, thru their new bargaining agent, cannot renege on their collective bargaining
contract, except of course to negotiate with management for the shortening thereof.
The “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. When BBWU bound itself and its officers not to strike, it could not have
validly bound also all the other rival unions existing in the bargaining units in question. BBWU
was the agent of the employees, not of the other unions which possess distinct personalities.
UNION, as the newly certified bargaining agent, could always voluntarily assume all the
personal undertakings made by the displaced agent. But as the lower court found, there was
no showing at all that, prior to the strike, UNION formally adopted the existing CONTRACT as
its own and assumed all the liabilities imposed by the same upon BBWU. Defendants were
neither signatories nor participants in the CONTRACT.
Everything binding on a duly authorized agent, acting as such, is binding on the principal; not
vice-versa, unless there is mutual agency, or unless the agent expressly binds himself to the
party with whom he contracts. Here, 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.
Capitol Medical Center Alliance of Concerned Employees vs. Laguesma, G.R. No. 118015,
Feb 4, 1997
 20
FACTS: Respondent union filed petition for certification election. The Med-Arbiter granted the
petition for certification election. Respondent Capitol Medical Center (CMC) appealed to the
Office of the Secretary. But the Order granting the certification election was affirmned.
On December 9, 1992, elections were held with respondent union garnering 204 votes, 168
in favor of no union and 8 spoiled ballots out of a total of 380 votes cast. Med-Arbiter issued
an Order certifying respondent union as the sole and exclusive bargaining representative of
the rank and file employees at CMC.
Respondent CMC again appealed to the Office of the Secretary of Labor the result of the
election, it was denied. MR also denied. Respondent CMC’s contention was the supposed
pendency of its petition for cancellation of respondent union’s certificate of registration. In the
said case, the Med-Arbiter therein issued an Order which declared respondent union’s
certificate of registration as null and void. However, this order was reversed on appeal by the
Officer-in-Charge of the BLR in her Order. The said Order dismissed CMC’s motion for
cancellation of the certificate of registration of respondent union and declared that it was not
only a bona fide affiliate or local of a federation, but a duly registered union as well.
Respondent union, after being declared as the certified bargaining agent of the rank-and-file
employees of respondent CMC, presented proposals for the negotiation of a CBA. However,
CMC contended that CBA negotiations should be suspended in view of the Order declaring
the registration of respondent union as null and void. In spite of the refusal of respondent
CMC, respondent union still persisted in its demand for CBA negotiations, claiming that it has
already been declared as the sole and exclusive bargaining agent of the rank-and-file
employees of the hospital.
Due to respondent CMC’s refusal to bargain collectively, respondent union filed a notice of
strike and later staged a strike on April 15, 1993. The case was certified to the NLRC for
compulsory arbitration.
It is at this point that petitioner union, on March 24, 1994, filed a petition for certification
election among the regular rank-and-file employees of the Capitol Medical Center Inc. It
alleged in its petition that: 1) three hundred thirty one (331) out of the four hundred (400) total
rank-and-file employees of respondent CMC signed a petition to conduct a certification
election; and 2) that the said employees are withdrawing their authorization for the said union
to represent them as they have joined and formed the union Capitol Medical Center Alliance
of Concerned Employees (CMC-ACE). They also alleged that a certification election can now
be conducted as more that 12 months have lapsed since the last certification election was
held.
Respondent union opposed the petition and moved for its dismissal. It contended that it is the
certified bargaining agent of the rank-and-file employees of the Hospital, which was
confirmed by the Secretary of DOLE and by this Court. It also alleged that it was not
negligent in asserting its right as the certified bargaining agent for it continuously demanded
the negotiation of a CBA with the hospital despite the latter’s avoidance to bargain
collectively.
May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for
certification election among the rank and file employees. On appeal by respondent union, the
public respondent Laguesma reversed and favored the respondent union. Hence this petition.
ISSUE: Was there a bargaining deadlock between CMC and respondent union.
RULING: While it is true that one year had lapsed since the time of declaration of a final
certification result, and that there is no collective bargaining deadlock, public respondent did
not commit grave abuse of discretion when it ruled in respondent union’s favor since the
delay in the forging of the CBA could not be attributed to the fault of the latter.
After respondent union was certified as the bargaining agent of CMC, it invited the employer
hospital to the bargaining table by submitting its economic proposal for a CBA. However,
CMC refused to negotiate with respondent union and instead challenged the latter’s legal
personality through a petition for cancellation of the certificate of registration which eventually
reached this Court. The decision affirming the legal status of respondent union should have
left CMC with no other recourse but to bargain collectively; but still it did not. Respondent
union was left with no other recourse but to file notice of strike against CMC for unfair labor
practice with the NCMB. This eventually led to a strike.
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.
Although there is no “deadlock” in its strict sense as there is no “counteraction” of forces
present in this case nor “reasonable effort at good faith bargaining,” such can be attributed to
CMC’s fault as the bargaining proposals of respondent union were never answered by CMC.
In fact, what happened in this case is worse than a bargaining deadlock for CMC employed
all legal means to block the certification of respondent union as the bargaining agent of the
rank-and-file; and use it as its leverage for its failure to bargain with respondent union. We
can only conclude that CMC was unwilling to negotiate and reach an agreement with
respondent union. CMC has not at any instance shown willingness to discuss the economic
proposals given by respondent union.
It is only just and equitable that the circumstances in this case should be considered as
similar in nature to a “bargaining deadlock” when no certification election could be held. This
is also to make sure that no floodgates will be opened for the circumvention of the law by
unscrupulous employers to prevent any certified bargaining agent from negotiating a CBA.
Thus, Section 3, Rule V, Book V of the Implement Rules should be interpreted liberally so as
to include a circumstance, e.g. where a CBA could not be concluded due to the failure of one
party to willingly perform its duty to bargain collectively.
Caltex Refinery Employees Assoc. vs. Brillantes, G.R. No. 123782, September 17, 1997
FACTS: Anticipating the expiration of their CBA on July 31, 1995, petitioner and private
respondent negotiated the terms and conditions of employment to be contained in a new
CBA. The negotiation between the two parties was participated in by the NCMB and the
Office of the Secretary of Labor and Employment. Some items in the new CBA were amicably
arrived at and agreed upon, but others were unresolved.
To settle the unresolved issues, eight meetings between the parties were conducted.
Because the parties failed to reach any significant progress in these meetings, petitioner
declared a deadlock. On July 24, 1995, petitioner filed a notice of strike. 6 conciliation
meetings conducted by the NCMB failed, failed. Marathon meetings at the plant level, but this
remedy proved also unavailing.
Secretary assumed jurisdiction and ordered “Accordingly, any strike or lockout, whether
actual or intended, is hereby enjoined.”xxx But the members of petitioner defied them and
continued their mass action (despite repeated orders)
Thereafter, the contending parties filed their position papers pertaining to unresolved issues.
Because of the strike, private respondent terminated the employment of some officers of
petitioner union. The legality of these dismissals brought additional contentious issues.
Again, the parties tried to resolve their differences through conciliation. Failing to come to any
substantial agreement, the parties decided to refer the problem to the secretary of labor and
employment.
(guys, what the SC did in this case, is to decide upon the conflicting issues ng parties with
regard dun sa CBA kaya nilagay ko na lang lahat)
ISSUE: (1) petitioner questions public respondent’s resolution of five issues in the CBA,
specifically on wage increase, union security clause, retirement benefits or application of the
new retirement plan, signing bonus and grievance and arbitration machineries; and
(2) Whether or not the Honorable Secretary of Labor and Employment committed grave
abuse of discretion in resolving the instant labor dispute.
HELD: The petition is partly meritorious.
(1) 1. Wage Increase. Petitioner maintains that the salaries of Shell Refinery employees be
used as a “reference point” in upgrading the compensation of private respondent’s
employees because these two companies are in the “same industry and their refineries are
both in Batangas.” Thus, the wage increase of petitioner’s members should be
“15%/15%/15%.” Private respondent counters with a “proposed 9% 7% 7% increase for the
same period with automatic adjustment should the increase fall short of the inflation rate.
The alleged “similarity” in the situation of Caltex and Shell cannot be considered a valid
ground for a demand of wage increase, in the absence of a showing that the two companies
are also similar in “substantial aspects,” as discussed above.
True, union members have the right to demand wage increases through their collective force;
but it is equally cogent that they should also be able to justify an appreciable increase in
wages. We observe that private respondent’s detailed allegations on productivity are
unrebutted. It is noteworthy that petitioner ignored this argument of private respondent and
based its demand for wage increase not on the ground that they were as productive as the
Shell employees. Thus, we cannot attribute grave abuse of discretion to public respondent.
2. Union Security Clause. Petitioner argues that in spite of the provisions on the “union
security clause,” it may expel a member only on any of three grounds: non-payment of dues,
subversion, or conviction for a crime involving moral turpitude. If the employee’s act does not
constitute any of these three grounds, the member would continue to be employed by private
respondent. Thus, the disagreement between petitioner and private respondent on this issue
is not only “procedural” but also “substantial.”
We agree with petitioner. The disagreement between petitioner and private respondent on
the union security clause should have been definitively resolved by public respondent. The
labor secretary should take cognizance of an issue which is not merely incidental to but
essentially involved in the labor dispute itself, or which is otherwise submitted to him for
resolution. The secretary of labor assumed jurisdiction over this labor dispute in an industry
indispensable to national interest, precisely to settle once and for all the disputes over which
he has jurisdiction at his level. In not performing his duty, the secretary of labor committed a
grave abuse of discretion.
3. New Retirement Plan. Petitioner contends that “40 of its members who are still covered by
the Old Retirement Plan because they were not able to exercise the option to shift to the New
Retirement Plan, for one reason or another, when such option was given in the past” are
included in the New Retirement Plan.
 21
We hold that public respondent did not commit grave abuse of discretion in respecting the
free and voluntary decision of the employees in regard to the Provident Plan and the
irrevocable one-time option provided for in the New Retirement Plan. Although the union has
every right to represent its members in the negotiation regarding the terms and conditions of
their employment, it cannot negate their wishes on matters which are purely personal and
individual to them. In this case, the forty employees freely opted to be covered by the Old
Plan; their decision should be respected. The company gave them every opportunity to
choose, and they voluntarily exercised their choice. The union cannot pretend to know better;
it cannot impose its will on them.
4. Grievance Machinery and Arbitration. Petitioner contends that public respondent “derailed
the grievance and arbitration scheme proposed by the Union.” Petitioner’s recommendation
for a “single arbitrator is based on the proposition that if voluntary arbitration should be
resorted to at all, this recourse should entail the least possible expense.”
No particular setup for a grievance machinery is mandated by law. Rather, Article 260 of the
Labor Code, as incorporated by RA 6715, provides for only a single grievance machinery in
the company to settle problems arising from “interpretation or implementation of their CBA
and those arising from the interpretation or enforcement of company personnel policies.”
We believe that the procedure described by public respondent sufficiently complies with the
minimum requirement of the law. Public respondent even provided for two steps in hearing
grievances prior to their referral to arbitration. The parties will decide on the number of
arbitrators who may hear a dispute only when the need for it arises. Even the law itself does
not specify the number of arbitrators. . In this matter, cost is not the only consideration; full
deliberation on the issues is another, and it is best accomplished in a hearing conducted by
three arbitrators. In effect, the parties are afforded the latitude to decide for themselves the
composition of the grievance machinery as they find appropriate to a particular situation. At
bottom, we cannot really impute grave abuse of discretion to public respondent on this issue.
5. Signing Bonus. Petitioner asseverates that the “signing bonus is an existing benefit
embodied in the old CBA.” 42 It explains that public respondent erred in removing the award
of a signing bonus xxx
Although proposed by petitioner, 45 the signing bonus was not accepted by private
respondent. 46 Besides, a signing bonus is not a benefit which may be demanded under the
law. Rather, it is now claimed by petitioner under the principle of “maintenance of existing
benefits” of the old CBA. However, as clearly explained by private respondent, a signing
bonus may not be demanded as a matter of right. If it is not agreed upon by the parties or
unilaterally offered as an additional incentive by private respondent, the condition for
awarding it must be duly satisfied. In the present case, the condition sine qua non for its grant
— a non-strike — was not complied with. In fact, private respondent categorically sated in its
counter-proposal — to the exclusion of those agreed upon before — that the new CBA would
constitute the only agreement between the parties.
(2). In the present case, the foregoing requirement has been sufficiently met. Petitioner’s
claim of grave abuse of discretion is anchored on the simple fact that public respondent
adopted largely the proposals of private respondent. It should be understood that bargaining
is not equivalent to an adversarial litigation where rights and obligations are delineated and
remedies applied. It is simply a process of finding a reasonable solution to a conflict and
harmonizing opposite positions into a fair and reasonable compromise. When parties agree
to submit unresolved issues to the secretary of labor for his resolution, they should not expect
their positions to be adopted in toto. It is understood that they defer to his wisdom and
objectivity in insuring industrial peace. And unless they can clearly demonstrate bias,
arbitrariness, capriciousness or personal hostility on the part of such public officer, the Court
will not interfere or substitute the said officer’s judgment with its own.
University of the East vs. Pepanio, G.R. No. 193897, January 13, 2013
FACTS: In 1992, DECS issued the Revised Manual of Regulations for Private Schools, which
requires college faculty members to have a master's degree as a minimum educational
qualification for acquiring regular status.
University of the East hired respondent Mariti D. Bueno (Bueno) in 1997 and respondent
Analiza F. Pepanio (Pepanio) in 2000, both on a semester-to-semester basis to teach in its
college. During this time, the 1994 CBA was still in force. It provided that UE shall extend only
semester-to-semester appointments to college faculty staffs who did not possess the
minimum qualifications. Meantime, DECS-CHED-TESDA-DOLE Joint Order 1 was issued
which provides that “teaching or academic personnel who do not meet the minimum
academic qualifications shall not acquire tenure or regular status.”
Then in 2001, UE and the faculty union entered into a new CBA that would have the school
extend probationary full-time appointments to full-time faculty members who did not yet have
the required postgraduate degrees provided that the latter would obtain such requirement
during their probationary period. Hence, UE extended probationary appointments to Bueno
and Pepanio. The two, however, failed to obtain post-graduate degrees.
UE informed Bueno and Pepanio that their probationary status is about to expire since they
lack the required post-graduate qualification. However, Bueno and Pepanio demanded that
they should be considered as regular employees since they were hired in 1997 and 2000,
when what was in force was the 1994 CBA which did not require a master’s degree before
attaining regular status. UE did not heed to their demands.
Thus, they filed a case for illegal dismissal before the Labor Arbiter. The LA ruled in their
favor. Dissatisfied, UE appealed to the NLRC. The NLRC reversed the LA’s ruling.
On petition for certiorari, the Court of Appeals rendered a Decision reinstating the LA’s
Decision by reason of technicality. This prompted UE to file the present petition.
ISSUE: Whether or not Bueno and Pepanio were validly terminated from their employment?
HELD: Petition is granted. LABOR LAW: collective bargaining agreement
The policy requiring postgraduate degrees of college teachers was provided in the Manual of
Regulations as early as 1992. Indeed, recognizing this, the 1994 CBA provided even then
that UE was to extend only semester- to-semester appointments to college faculty staffs, like
Bueno and Pepanio, who did not possess the minimum qualifications for their positions.
Besides, as the Court held in Escorpizo v. University of Baguio, a school CBA must be read
in conjunction with statutory and administrative regulations governing faculty qualifications.
Such regulations form part of a valid CBA without need for the parties to make express
reference to it. While the contracting parties may establish such stipulations, clauses, terms
and conditions, as they may see fit, the right to contract is still subject to the limitation that the
agreement must not be contrary to law or public policy.
Here, UE gave Bueno and Pepanio more than ample opportunities to acquire the
postgraduate degree required of them. But they did not take advantage of such opportunities.
Justice, fairness, and due process demand that an employer should not be penalized for
situations where it had little or no participation or control.
Insular Life Assurance Employees Asso. v. Insular Life, G. R. No. L-25291, Jan 30, 1971
FACTS: The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU Insurance
Group Workers & Employees Association-NATU, and Insular Life Building Employees
Association-NATU (hereinafter referred to as the Unions), while still members of the
Federation of Free Workers (FFW), entered into separate CBAs with the Insular Life
Assurance Co., Ltd. and the FGU Insurance Group (hereinafter referred to as the
Companies).
Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia; the latter was
formerly the secretary-treasurer of the FFW and acting president of the Insular Life/FGU
unions and the Insular Life Building Employees Association. Garcia, as such acting president,
in a circular issued in his name and signed by him, tried to dissuade the members of the
Unions from disaffiliating with the FFW and joining the National Association of Trade Unions
(NATU), to no avail.
Enaje and Garcia soon left the FFW and secured employment with the Anti-Dummy Board of
the Department of Justice. Thereafter, the Companies hired Garcia in the latter part of 1956
as assistant corporate secretary and legal assistant in their Legal Department. Enaje was
hired as personnel manager of the Companies, and was likewise made chairman of the
negotiating panel for the Companies in the collective bargaining with the Unions.
Unions jointly submitted proposals to the Companies; negotiations were conducted on the
Union’s proposals, but these were snagged by a deadlock on the issue of union shop, as a
result of which the Unions filed on January 27, 1958 a notice of strike for “deadlock on
collective bargaining.” The issue was dropped subsequently (in short, nagkasundo). But, the
parties negotiated on the labor demands but with no satisfactory result due to a stalemate on
the matter of salary increases.
Meanwhile, 87 unionists were reclassified as supervisors without increase in salary nor in
responsibility while negotiations were going on in the Department of Labor after the notice to
strike was served on the Companies. These employees resigned from the Unions.
On May 21, 1958 the Companies through their acting manager and president, sent to each of
the strikers a letter (exhibit A) quoted verbatim as follows:
We recognize it is your privilege both to strike and to conduct picketing.
However, if any of you would like to come back to work voluntarily, you may:
Advise the nearest police officer or security guard of your intention to do so.
Take your meals within the office.
Make a choice whether to go home at the end of the day or to sleep nights at the
office where comfortable cots have been prepared.
Enjoy free coffee and occasional movies.
Be paid overtime for work performed in excess of eight hours.
Be sure arrangements will be made for your families.
The decision to make is yours — whether you still believe in the motives of the
strike or in the fairness of the Management.
Unions, however, continued on strike, with the exception of a few unionists who were
convinced to desist by the aforesaid letter
From the date the strike was called on May 21, 1958, until it was called off on May 31, 1958,
some management men tried to break thru the Unions’ picket lines xxx succeeded in
penetrating the picket lines in front of the Insular Life Building, thus causing injuries to the
picketers and also to the strike-breakers due to the resistance offered by some picketers.
 22
Alleging that some non-strikers were injured and with the use of photographs as evidence,
the Companies then filed criminal charges against the strikers with the City Fiscal’s Office of
Manila.xxx
Another letter was sent by the company to the individual strikers:
The first day of the strike was last 21 May 1958.
Our position remains unchanged and the strike has made us even more
convinced of our decision.
We do not know how long you intend to stay out, but we cannot hold your
positions open for long. We have continued to operate and will continue to do so
with or without you.
If you are still interested in continuing in the employ of the Group Companies,
and if there are no criminal charges pending against you, we are giving you until
2 June 1958 to report for work at the home office. If by this date you have not yet
reported, we may be forced to obtain your replacement.
Before, the decisions was yours to make.
So it is now.
Incidentally, all of the more than 120 criminal charges filed against the members of the
Unions, except 3, were dismissed by the fiscal’s office and by the courts. These three cases
involved “slight physical injuries” against one striker and “light coercion” against two others.
At any rate, because of the issuance of the writ of preliminary injunction against them as well
as the ultimatum of the Companies giving them until June 2, 1958 to return to their jobs or
else be replaced, the striking employees decided to call off their strike and to report back to
work on June 2, 1958.
*However, before readmitting the strikers, the Companies required them not only to secure
clearances from the City Fiscal’s Office of Manila but also to be screened by a management
committee among the members of which were Enage and Garcia. The screening committee
initially rejected 83 strikers with pending criminal charges. However, all non-strikers with
pending criminal charges which arose from the breakthrough incident were readmitted
immediately by the Companies without being required to secure clearances from the fiscal’s
office. Subsequently, when practically all the strikers had secured clearances from the fiscal’s
office, the Companies readmitted only some but adamantly refused readmission to 34
officials and members of the Unions who were most active in the strike, on the ground that
they committed “acts inimical to the interest of the respondents,” without however stating the
specific acts allegedly committed. Some 24 of the above number were ultimately notified
months later that they were being dismissed retroactively as of June 2, 1958 and given
separation pay checks computed under Rep. Act 1787, while others (ten in number) up to
now have not been readmitted although there have been no formal dismissal notices given to
them.
CIR prosecutor filed a complaint for unfair labor practice against the Companies under
Republic Act 875. The complaint specifically charged the Companies with (1) interfering with
the members of the Unions in the exercise of their right to concerted action, by sending out
individual letters to them urging them to abandon their strike and return to work, with a
promise of comfortable cots, free coffee and movies, and paid overtime, and, subsequently,
by warning them that if they did not return to work on or before June 2, 1958, they might be
replaced; and (2) discriminating against the members of the Unions as regards readmission
to work after the strike on the basis of their union membership and degree of participation in
the strike.
ISSUE: Whether or not respondent company is guilty of ULP
HELD: YES. The act of an employer in notifying absent employees individually during a strike
following unproductive efforts at collective bargaining that the plant would be operated the
next day and that their jobs were open for them should they want to come in has been held to
be an unfair labor practice, as an active interference with the right of collective bargaining
through dealing with the employees individually instead of through their collective bargaining
representatives.
Although the union is on strike, the employer is still under obligation to bargain with the union
as the employees’ bargaining representative.
Individual solicitation of the employees or visiting their homes, with the employer or his
representative urging the employees to cease union activity or cease striking, constitutes
unfair labor practice. All the above-detailed activities are unfair labor practices because they
tend to undermine the concerted activity of the employees, an activity to which they are
entitled free from the employer’s molestation.
Indeed, when the respondents offered reinstatement and attempted to “bribe” the strikers with
“comfortable cots,” “free coffee and occasional movies,” “overtime” pay for “work performed in
excess of eight hours,” and “arrangements” for their families, so they would abandon the
strike and return to work, they were guilty of strike-breaking and/or union-busting and,
consequently, of unfair labor practice. It is equivalent to an attempt to break a strike for an
employer to offer reinstatement to striking employees individually, when they are represented
by a union, since the employees thus offered reinstatement are unable to determine what the
consequences of returning to work would be.
ULP also: (super short cut na to) Hiring of Enage and Garcia with attractive compensations;
respondents reclassified 87 employees as supervisors without increase in salary or in
responsibility, in effect compelling these employees to resign from their unions; respondents,
thru their president and manager, respondent Jose M. Olbes, brought three truckloads of
non-strikers and others, escorted by armed men, who, despite the presence of eight
entrances to the three buildings occupied by the Companies, entered thru only one gate less
than two meters wide and in the process, crashed thru the picket line posted in front of the
premises of the Insular Life Building. This resulted in injuries on the part of the picketers and
the strike-breakers; respondents brought against the picketers criminal charges, only three of
which were not dismissed, and these three only for slight misdemeanors. As a result of these
criminal actions, the respondents were able to obtain an injunction from the court of first
instance restraining the strikers from stopping, impeding, obstructing, etc. the free and
peaceful use of the Companies’ gates, entrance and driveway and the free movement of
persons and vehicles to and from, out and in, of the Companies’ buildings.
Verily, the above actuations of the respondents before and after the issuance of the letters,
exhibit A and B, yield the clear inference that the said letters formed of the respondents
scheme to preclude if not destroy unionism within them.
II. The respondents did not merely discriminate against all the strikers in general. They
separated the active from the less active unionists on the basis of their militancy, or lack of it,
on the picket lines. Unionists belonging to the first category were refused readmission even
after they were able to secure clearances from the competent authorities with respect to the
criminal charges filed against them.
It is noteworthy that — perhaps in an anticipatory effort to exculpate themselves from charges
of discrimination in the readmission of strikers returning to work — the respondents delegated
the power to readmit to a committee.
III. Anent the third assignment of error, the record shows that not a single dismissed striker
was given the opportunity to defend himself against the supposed charges against him. As
earlier mentioned, when the striking employees reported back for work on June 2, 1958, the
respondents refused to readmit them unless they first secured the necessary clearances; but
when all, except three, were able to secure and subsequently present the required
clearances, the respondents still refused to take them back.
Indeed, the individual cases of dismissed officers and members of the striking unions do not
indicate sufficient basis for dismissal.
Standard Chartered Bank Employees Union vs. Confesor, GR No. 114974, Jun 16, 2004
FACTS: Before the commencement of the negotiation for the new CBA between the bank
and the Union, the Union, through Divinagracia, suggested to the Bank’s Human Resource
Manager and head of the negotiating panel, Cielito Diokno, that the bank lawyers should be
excluded from the negotiating team. The Bank acceded. Meanwhile, Diokno(head of the
negotiating team for the bank) suggested to Divinagracia that Jose P. Umali, Jr., the
President of the National Union of Bank Employees (NUBE), the federation to which the
Union was affiliated, be excluded from the Union’s negotiating panel. However, Umali was
retained as a member thereof.
There was deadlock in the negotiations. Both parties alleged ULP. Bank alleged that the
Union violated its no strike- no lockout clause by filing a notice of strike before the NCMB.
Considering that the filing of notice of strike was an illegal act, the Union officers should be
dismissed. Union alleged unfair labor practice when the bank allegedly interfered with the
Union’s choice of negotiator. It argued that, Diokno’s suggestion that the negotiation be
limited as a “family affair” was tantamount to suggesting that Federation President Jose
Umali, Jr. be excluded from the Union’s negotiating panel. It further argued that, damage or
injury to the public interest need not be present in order for unfair labor practice to prosper.
The Union also contended that the Bank merely went through the motions of collective
bargaining without the intent to reach an agreement
ISSUE: (1) WON there was interference; (2) WON the bank committed “surface bargaining”
HELD: (1) NONE. 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. Parenthetically, 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. In
the case at bar, the Union bases its claim of interference on the alleged suggestions of
Diokno to exclude Umali from the Union’s negotiating panel.
The circumstances that occurred during the negotiation do not show that the suggestion
made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that
the Bank consciously adopted such act to yield adverse effects on the free exercise of the
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right to self-organization and collective bargaining of the employees, especially considering
that such was undertaken previous to the commencement of the negotiation and
simultaneously with Divinagracia’s suggestion that the bank lawyers be excluded from its
negotiating panel.
The records show that after the initiation of the collective bargaining process, with the
inclusion of Umali in the Union’s negotiating panel, the negotiations pushed through. The
complaint was made only on August 16, 1993 after a deadlock was declared by the Union on
June 15, 1993.
It is clear that such ULP charge was merely an afterthought. The accusation occurred after
the arguments and differences over the economic provisions became heated and the parties
had become frustrated. It happened after the parties started to involve personalities. As the
public respondent noted, passions may rise, and as a result, suggestions given under less
adversarial situations may be colored with unintended meanings. Such is what appears to
have happened in this case.
(2) NO. Surface bargaining is defined as “going through the motions of negotiating” without
any legal intent to reach an agreement.”
The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under
Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went
through the motions of bargaining without any intent of reaching an agreement, as evident in
the Bank’s counter-proposals. It explained that of the 34 economic provisions it made, the
Bank only made 6 economic counterproposals. Further, as borne by the minutes of the
meetings, the Bank, after indicating the economic provisions it had rejected, accepted,
retained or were open for discussion, refused to make a list of items it agreed to include in
the economic package.
The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank
had any intention of violating its duty to bargain with the Union. Records show that after the
Union sent its proposal to the Bank on February 17, 1993, the latter replied with a list of its
counter-proposals on February 24, 1993. Thereafter, meetings were set for the settlement of
their differences. The minutes of the meetings show that both the Bank and the Union
exchanged economic and non-economic proposals and counter-proposals.
The Union has not been able to show that the Bank had done acts, both at and away from
the bargaining table, which tend to show that it did not want to reach an agreement with the
Union or to settle the differences between it and the Union. Admittedly, the parties were not
able to agree and reached a deadlock. However, 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 under Article 248(g) for violation of
the duty to bargain.
NOTE: (on the allegation of the bank’s refusal to give certain information) The Union, did not,
as the Labor Code requires, send a written request for the issuance of a copy of the data
about the Bank’s rank and file employees. Moreover, as alleged by the Union, the fact that
the Bank made use of the aforesaid guestimates, amounts to a validation of the data it had
used in its presentation.
Cathay Pacific Steel vs. CA, G. R. No. 164561, August 30, 2006
FACTS: Cathay Pacific Steel Corporation (CAPASCO), a domestic corporation engaged in
the business of manufacturing steel products. Tomondong was the Assistant to the Personnel
Manager for its Cainta. Thereafter, he was promoted to the position of
Personnel/Administrative Officer, and later to that of Personnel Superintendent. The
supervisory personnel of CAPASCO launched a move to organize a union among their ranks,
later known as private respondent CUSE. Private respondent Tamondong actively involved
himself in the formation of the union and was even elected as one of its officers after its
creation. Consequently, CAPASCO sent a memo to Tamondong requiring him to explain and
to discontinue from his union activities, with a warning that a continuance thereof shall
adversely affect his employment in the company. Tamondong ignored said warning and
made a reply letter invoking his right as a supervisory employee to join and organize a labor
union. Thereafter CAPASCO terminated the employment of Tamondong on the ground of
loss of trust and confidence, citing his union activities as acts constituting serious disloyalty to
the company. Tamondong challenged his dismissal for being illegal and as an act involving
unfair labor practice by filing a Complaint for Illegal Dismissal and Unfair Labor Practice
before the NLRC. Though he admitted his active role in the formation of a union composed of
supervisory personnel in the company, he claimed that such was not a valid ground to
terminate his employment because it was a legitimate exercise of his constitutionally
guaranteed right to self-organization. CAPASCO contended that Tamondong's position as
Personnel Superintendent and the functions actually performed by him in the company
makes him a managerial employee, thus, under the law he was prohibited from joining a
union as well as from being elected as one of its officers. The LA ruled in favor of Tamonding
finding CAPASCO guilty of UPL and Illegal dismissal. On appeal, the NLRC only modified the
ruling by dismissing the complaints for UPL and Illegal dismissal and also the award for
damages but ordered the payment of backwages to Tamondong. Petitioners filed a Motion
for Clarification and Partial Reconsideration, while, Tamondong filed a Motion for
Reconsideration of the said NLRC Decision, but the NLRC affirmed its original Decision. On
petititon, the Court of Appeals granted the nullification of the decision of the NLR. Hence, this
present Petition for Certiorari.
ISSUE: WON the CA committed grave abuse of discretion in finding petitioner guilty of illegal
dismissal and UPL?
RULING: No. The special civil action for Certiorari is intended for the correction of errors of
jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its
principal office is only to keep the inferior court within the parameters of its jurisdiction or to
prevent it from committing such a grave abuse of discretion amounting to lack or excess of
jurisdiction. The essential requisites for a Petition for Certiorari under Rule 65 are:
(1) the writ is directed against a tribunal, a board, or an officer exercising judicial
or quasi-judicial function;
(2) such tribunal, board, or officer has acted without or in excess of jurisdiction,
or with grave abuse of discretion amounting to lack or excess of jurisdiction; and
(3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary
course of law.
In the case, petitioners failed to meet the third requisite for the proper invocation of Petition
for Certiorari that there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law. They simply alleged that the Court of Appeals gravely abuse its
discretion which amount to lack or excess of jurisdiction in rendering the assailed Decision
and Resolution. They did not bother to explain why an appeal cannot possibly cure the errors
committed by the appellate court. Where the issue or question involves or affects the wisdom
or legal soundness of the decision, and not the jurisdiction of the court to render said
decision, the same is beyond the province of a petition for certiorari. In any event, granting
arguendo, that the present petition is proper, still it is dismissible. The Court of Appeals
cannot be said to have acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in annulling the Decision of the NLRC because the findings of the Court of
Appeals that private respondent Tamondong was indeed a supervisory employee and not a
managerial employee, thus, eligible to join or participate in the union activities of private
respondent CUSE, were supported by evidence on record. Tamondong may have possessed
enormous powers and was performing important functions that goes with the position of
Personnel Superintendent, nevertheless, there was no clear showing that he is at liberty, by
using his own discretion and disposition, to lay down and execute major business and
operational policies for and in behalf of CAPASCO.
Cainta Catholic Sch. vs. Cainta Catholic Sch. Emp. Union, G.R. No. 15102, May 2, 2006
FACTS: On 15 October 1993, petitioner school retired Llagas and Javier, President and Vice-
president of respondent union, respectively, who had rendered more than twenty (20) years
of continuous service, pursuant to Section 2, Article X of the CBA, to wit:
An employee may be retired, either upon application by the employee himself or by the
decision of the Director of the School, upon reaching the age of sixty (60) or after having
rendered at least twenty (20) years of service to the School the last three (3) years of which
must be continuous.
Because of the foregoing, the union filed a Notice of Strike with the NCMB and later staged a
strike and picketed in the school’s entrance. Later, the union filed a complaint for unfair labor
practice against petitioner school before the NLRC.
The School avers that the retirement of Llagas and Javier was clearly in accordance with a
specific right granted under the CBA. The School justifies its actions by invoking our rulings
in Pantranco North Express, Inc. v. NLRC and Bulletin Publishing Corporation v. Sanchez
that no unfair labor practice is committed by management if the retirement was made in
accord with management prerogative or in case of voluntary retirement, upon approval of
management.
The Union, on the other hand, argues that the retirement of the two union officers is a mere
subterfuge to bust the union.
ISSUE: Whether or not the retirement of Llagas and Javier is legal.
HELD: The SC held that the termination of employment of Llagas and Javier was valid,
arising as it did from a management prerogative granted by the mutually-negotiated CBA
between the School and the Union.
Pursuant to the existing CBA, the School has the option to retire an employee upon reaching
the age limit of sixty (60) or after having rendered at least twenty (20) years of service to the
School, the last three (3) years of which must be continuous. Retirement is different specie of
termination of employment from dismissal for just or authorized causes under Articles 282
and 283 of the Labor Code. While in all three cases, the employee to be terminated may be
unwilling to part from service, there are eminently higher standards to be met by the employer
validly exercising the prerogative to dismiss for just or authorized causes. In those two
instances, it is indispensable that the employer establish the existence of just or authorized
causes for dismissal as spelled out in the Labor Code. Retirement, on the other hand, is the
result of a bilateral act of the parties, a voluntary agreement between the employer and the
employee whereby the latter after reaching a certain age agrees and/or consents to sever his
employment with the former.
Article 287 of the Labor Code, as amended, governs retirement of employees, stating:
ART. 287. Retirement. – Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or other
applicable employment contract.
 24
In case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements: Provided, however, That
an employee’s retirement benefits under any collective bargaining agreement
and other agreements shall not be less than those provided herein.
In the absence of a retirement plan or agreement providing for
retirement benefits of employees in the establishment, an employee upon
reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years
which is hereby declared the compulsory retirement age, who has served at least
five (5) years in the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months being considered as one whole year.
By their acceptance of the CBA, the Union and its members are obliged to abide by the
commitments and limitations they had agreed to cede to management. The questioned
retirement provisions cannot be deemed as an imposition foisted on the Union, which very
well had the right to have refused to agree to allowing management to retire retire
employees with at least 20 years of service.
It should not be taken to mean that retirement provisions agreed upon in the CBA are
absolutely beyond the ambit of judicial review and nullification. A CBA, as a labor contract, is
not merely contractual in nature but impressed with public interest. If the retirement
provisions in the CBA run contrary to law, public morals, or public policy, such provisions may
very well be voided. Certainly, a CBA provision or employment contract that would allow
management to subvert security of tenure and allow it to unilaterally “retire” employees after
one month of service cannot be upheld. Neither will the Court sustain a retirement clause that
entitles the retiring employee to benefits less than what is guaranteed under Article 287 of the
Labor Code, pursuant to the provision’s express proviso thereto in the provision.
Yet the CBA in the case at bar contains no such infirmities which must be stricken down.
Twenty years is a more than ideal length of service an employee can render to one employer.
Under ordinary contemplation, a CBA provision entitling an employee to retire after 20 years
of service and accordingly collect retirement benefits is “reward for services rendered since it
enables an employee to reap the fruits of his labor — particularly retirement benefits, whether
lump-sum or otherwise — at an earlier age, when said employee, in presumably better
physical and mental condition, can enjoy them better and longer.”
A CBA may validly accord management the prerogative to optionally retire an employee
under the terms and conditions mutually agreed upon by management and the bargaining
union, even if such agreement allows for retirement at an age lower than the optional
retirement age or the compulsory retirement age.
Purefoods vs. Nagkakaisang Samahang Manggagawa ng Purefoods, G.R. No. 150896,
August 28, 2008
Facts: Three labor organizations and a federation are respondents in this case NAGSAMA-
Purefoods, the exclusive bargaining agent of the rank-and-file workers of Purefoods, STFWU,
(Sto. Tomas, Batangas); and PGFWU (Sta. Rosa, Laguna). These organizations were
affiliates of the respondent federation, Purefoods Unified Labor Organization (PULO). The
three labor organizations manifested their desire to re-negotiate the collective bargaining
agreement, submitting their respective demands and proposals and authorizing a negotiating
panel which included among others a PULO representative. While Purefoods formally
acknowledged receipt of the union’s proposals, but refused to negotiate with the unions
should a PULO representative be in the panel which resulted in a deadlock. However, the
petitioner company concluded a new CBA with another union in its farm in Malvar, Batangas
and terminated the service of regular rank-and file workers in Sto Tomas. The farm manager,
supervisors and electrical workers of the Sto. Tomas farm, who were members of another
union, were nevertheless retained by the company in its employ. The 4 respondent labor
organizations jointly instated a complaint for Unfair Labor Practice, illegal lockout/dismissal
and damages.
Issue: WON the refusal of Purefoods to recognized PULO as a labor organizations’ affiliation
constituted undue interference in, and restraint on the exercise of the employees’ right to self-
organization and free collective bargaining
Held: Yes! It is crystal clear that the closure of the Sto. Tomas farm was made in bad faith.
Badges of bad faith are evident from the following acts of the petitioner: it unjustifiably
refused to recognize the STFWU’s and the other unions’ affiliation with PULO; it concluded a
new CBA with another union in another farm during the agreed indefinite suspension of the
collective bargaining negotiations; it surreptitiously transferred and continued its business in a
less hostile environment; and it suddenly terminated the STFWU members, but retained and
brought the non-members to the Malvar farm. Petitioner presented no evidence to support
the contention that it was incurring losses or that the subject farm’s lease agreement was pre-
terminated. Ineluctably, the closure of the Sto. Tomas farm circumvented the labor
organization’s right to collective bargaining and violated the members’ right to security of
tenure.
Shell Oil Workers Union vs. Shell Oil Company, G.R. No. L-28607, May 31, 1971
FACTS: Respondent Shell Company of the Philippines (COMPANY) dissolved its security
guard section stationed at its Pandacan Installation, notwithstanding its (guard section)
continuance and that such is assured by an existing collective bargaining contract. The
respondent company transferred 18 security guards to its other department and consequently
hired a private security agency to undertake the work of said security guards. This resulted in
a strike called by petitioner Shell Oil Workers’ Union (UNION), The President certified it to
respondent Court of Industrial Relations (CIR). CIR declared the strike illegal on the ground
that such dissolution was a valid exercise of a management prerogative. Thus this appeal is
taken.
Petitioner argued that the 18 security guards affected are part of the bargaining unit and
covered by the existing collective bargaining contract, as such, their transfers and eventual
dismissals are illegal being done in violation of the existing contract. The Company
maintained that in contracting out the security service and redeploying the 18 security guards
affected, it was merely performing its legitimate prerogative to adopt the most efficient and
economical method of operation, that said action was motivated by business consideration in
line with past established practice and made after notice to and discussion with the Union,
that the 18 guards concerned were dismissed for wilfully refusing to obey the transfer order,
and that the strike staged by the Union is illegal.
ISSUE: Whether the existing collective bargaining contract on maintaining security guard
section, among others, constitute a bar to the decision of the management to contract out
security guards.
RULING: YES. The strike was legal because there was a violation of the collective bargaining
agreement by Company. It was part of the CBA that the Security Guard Section will remain.
Yet, the Company did not comply with the stipulation in CBA. It was thus an assurance of
security of tenure, at least, during the lifetime of the agreement. For what is involved is the
integrity of the agreement reached, the terms of which should be binding on both parties
The stand of Shell Company as to the scope of management prerogative is not devoid of
plausibility, management prerogative of the Company would have been valid if it were not
bound by what was stipulated in CBA. The freedom to manage the business remains with
management. It cannot be denied the faculty of promoting efficiency and attaining economy
by a study of what units are essential for its operation. To it belongs the ultimate
determination of whether services should be performed by its personnel or contracted to
outside agencies. However, while management has the final say on such matter, the labor
union is not to be completely left out.
An unfair labor practice is committed by a labor union or its agent by its refusal ‘to bargain
collectively with the employer’. Collective bargaining does not end with the execution of an
agreement, being a continuous process, the duty to bargain necessarily imposing on the
parties the obligation to live up to the terms of such a collective bargaining agreement if
entered into, it is undeniable that non-compliance therewith constitutes an unfair labor
practice.
The right to self-organization guarded by the Industrial Peace Act explicitly includes the right
“to engage in concerted activities for the purpose of collective bargaining and to the mutual
aid or protection.” The employee, tenant or laborer is inhibited from striking or walking out of
his employment only when so enjoined by the CIR and after a dispute has been submitted
thereto and pending award or decision by the court of such dispute.
In the present case, the employees or laborers may strike before being ordered not to do so
and before an industrial dispute is submitted to the CIR, subject to the power of the latter,
after hearing when public interest so requires or when the dispute cannot, in its opinion, be
promptly decided or settled, to order them to return to work, with the consequence that if the
strikers fail to return to work, when so ordered, the court may authorize the employer to
accept other employees or laborers.” Thus a strike may not be staged only when, during the
pendency of an industrial dispute, the CIR has issued the proper injunction against the
laborers (section 19, Commonwealth Act No. 103, as amended).
————-
**NOTE:
BELIEF IN GOOD FAITH THAT EMPLOYER COMMITTED UNFAIR LABOR PRACTICE
RENDERS STRIKE LEGAL:
It is not even required that there be in fact an unfair labor practice committed by the
employer. It suffices, if such a belief in good faith is entertained by labor, as the inducing
factor for staging a strike. So it was declared: “As a consequence, we hold that the strike in
question had been called to offset what petitioners were wanted in believing in good faith to
be unfair labor practices on the part of Management, that petitioners were not bound,
therefore, to wait for the expiration of thirty (30) days from notice of strike before staging the
same, that said strike was not, accordingly, illegal and that the strikers had not thereby lost
their status as employees of respondents herein.”
BPI Employees Union-Davao City-FUBU vs. BPI, G.R. No. 174912, July 24, 2013
FACTS: BPI Operations Management Corporation (BOMC), which was created pursuant to
Central Bank Circular No. 1388, Series of 1993 (CBP Circular No. 1388, 1993), and primarily
engaged in providing and/or handling support services for banks and other financial
institutions, is a subsidiary of the Bank of Philippine Islands (BPI) operating and functioning
as an entirely separate and distinct entity.
A service agreement between BPI and BOMC was initially implemented in BPIs Metro Manila
branches. In this agreement, BOMC undertook to provide services such as check clearing,
delivery of bank statements, fund transfers, card production, operations accounting and
control, and cash servicing, conformably with BSP Circular No. 1388. Not a single BPI
employee was displaced and those performing the functions, which were transferred to
BOMC, were given other assignments.
The Manila chapter of BPI Employees Union (BPIEU-Metro ManilaFUBU) then filed a
complaint for unfair labor practice (ULP). The Labor Arbiter (LA) decided the case in favor of
 25
the union. The decision was, however, reversed on appeal by the NLRC. BPIEU-Metro
Manila-FUBU filed a petition for certiorari before the CA which denied it, holding that BPI
transferred the employees in the affected departments in the pursuit of its legitimate
business.
The service agreement was likewise implemented in Davao City. Later, a merger between
BPI and Far East Bank and Trust Company (FEBTC) took effect on April 10, 2000 with BPI
as the surviving corporation. Thereafter, BPIs cashiering function and FEBTCs cashiering,
distribution and bookkeeping functions were handled by BOMC. Consequently, twelve (12)
former FEBTC employees were transferred to BOMC to complete the latters service
complement.
BPI Davaos rank and file collective bargaining agent, BPI Employees Union-Davao City-
FUBU (Union), objected to the transfer of the functions and the twelve (12) personnel to
BOMC contending that the functions rightfully belonged to the BPI employees and that the
Union was deprived of membership of former FEBTC personnel who, by virtue of the merger,
would have formed part of the bargaining unit represented by the Union pursuant to its union
shop provision in the CBA.
ISSUE: Whether or not the act of BPI to outsource the cashiering, distribution and
bookkeeping functions to BOMC is in conformity with the law and the existing CBA.
HELD: Yes. Labor Law- only gross violations of the economic provisions of the CBA are
treated as ULP. Otherwise, they are mere grievances.
In the present case, the alleged violation of the union shop agreement in the CBA, even
assuming it was malicious and flagrant, is not a violation of an economic provision in the
agreement. The provisions relied upon by the Union were those articles referring to the
recognition of the union as the sole and exclusive bargaining representative of all rank-and-
file employees, as well as the articles on union security, specifically, the maintenance of
membership in good standing as a condition for continued employment and the union shop
clause. It failed to take into consideration its recognition of the banks exclusive rights and
prerogatives, likewise provided in the CBA, which included the hiring of employees,
promotion, transfers, and dismissals for just cause and the maintenance of order, discipline
and efficiency in its operations.
The Union, however, insists that jobs being outsourced to BOMC were included in the
existing bargaining unit, thus, resulting in a reduction of a number of positions in such unit.
The reduction interfered with the employees right to self-organization because the power of a
union primarily depends on its strength in number.
It is incomprehensible how the "reduction of positions in the collective bargaining unit"
interferes with the employees right to self-organization because the employees themselves
were neither transferred nor dismissed from the service. In the case at hand, the union has
not presented even an iota of evidence that petitioner bank has started to terminate certain
employees, members of the union. In fact, what appears is that the Bank has exerted utmost
diligence, care and effort to see to it that no union member has been terminated. In the
process of the consolidation or merger of the two banks which resulted in increased
diversification of functions, some of these non-banking functions were merely transferred to
the BOMC without affecting the union membership.
It is to be emphasized that contracting out of services is not illegal per se. It is an exercise of
business judgment or management prerogative. Absent proof that the management acted in
a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by
an employer. In this case, bad faith cannot be attributed to BPI because its actions were
authorized by CBP Circular No. 1388, Series of 1993 issued by the Monetary Board of the
then Central Bank of the Philippines (now Bangko Sentral ng Pilipinas).
Philippine American Cigar and Cigarette Factory Workers vs. Philippine American Cigar, G.R.
No.L-18364, February 28, 1963
FACTS: October 23, 1958, Apolonio San Jose’s brother, Francisco San Jose, who is also a
regular worker of the respondent and a member of the complainant union, filed a charge for
ULP against herein respondent, which case is still pending.
Subsequent to the filing of the said charge, the respondent by its manager Chue Yiong,
summoned and advised union president Lazaro Peralta that if Francisco San Jose will not
withdraw his charge against the company, the company will also dismiss his brother Apolonio
San Jose, to which the union president replied that should not be the attitude of the company
because Apolonio has nothing to do with his brother’s case.
On January 24, 1959, respondent did dismiss Apolonio San Jose without just and valid cause
and in gross violation of the operative CBA between the complainant union and respondent
corporation.
ISSUE: Whether the dismissal of a relative of an employee who filed an action against the
employer is an ULP.
RULING: YES. Section 4(a) (5) of Republic Act No. 875, provides that :
“(a) It shall be ULP for an employer:
… (5) To dismiss, discharge, or otherwise prejudice or discriminate against an
employee for having filed charges or for having given or being about to give testimony under
this Act.”
Although the cited law pertains to the specific employee who filed a case or given a testimony
against the employer, it should be construed in line with the spirit and purpose of said Section
4 and of the legislation of which it forms part — namely, to assure absolute freedom of the
employees and laborers to establish labor organizations and unions, as well as to prefer
charges before the proper organs of the Government for violations of our labor laws.
If the dismissal of an employee due to the filing by him of said charges would be and is an
undue restraint upon said freedom, the dismissal of his brother owing to the non-withdrawal
of the charges of the former, would be and constitute as much a restraint upon the same
freedom. In fact, it may be greater and more effective restraint thereto. Indeed, a complainant
may be willing to risk the hazards of a possible and even probable retaliatory action by the
employer in the form of a dismissal or another discriminatory act against him personally,
considering that nobody is perfect, that everybody commits mistakes and that there is always
a possibility that the employer may find in the records of any employee, particularly if he has
long been in the service, some act or omission constituting a fault or negligence which may
be an excuse for such dismissal or discrimination. Yet, such complainant may not withstand
the pressure that would result if his brother or another member of his immediate family were
threatened with such action unless the charges in question were withdrawn.
What is prohibited to be done directly shall not be allowed to be accomplished indirectly.
Thus in the Matter of Quidnick Dye Works Inc. and Federation of Dyers, Finishers, Printers
and Bleachers of America (2 NLRB 963) it was held that the dismissal of a laborer on account
of union activities of his brother constituted an ULP.
The discharge of relatives of an employee who has himself been discriminately discharged,
for no other reason than the relation, is itself a discriminatory discharge, in violation of the
Act. An illustration is Memphis Furniture Co. (3 NLRB 26 [1937]), “where the evidence
indicated that the sole reason for the dismissal of a female employee was that she was the
wife of an employee who has been discharged. It was held that the discharge under the
circumstances was discriminatory and a violation of the Act, even though discharged female
employee was not herself a member of any union. The respondent thus made union
membership and activities a bar to the employment not only of the union member himself but
of members of his family as well. A more effective mode of discouraging of union affiliation
could hardly be found then the knowledge that such activities put not merely the union
member’s employment but that of those closely related to him in jeopardy.“
In addition to violating Section 4(a) (5) of Republic Act No. 875, the discharge of Apolonio
San Jose is, therefore, an ULP.
Rizal Cement Workers vs. Madrigal, G.R. No. L-19767, April 30, 1964
Facts: The petitioner Union staged a strike at the plant of the respondent Rizal Cement Co.,
Inc. in Binangonan, Rizal. In the early morning of the following day, that is, on May 28, 1956,
Candido de Leon warehouseman-encargado at the Bodega Tanque, received a telephone
call from one Johnny de Leon, manager of the respondent Rizal Cement Co., Inc., with the
information that the Union staged a strike against the company on the previous day, May 27,
1956, in Binangonan, Rizal De Leon further informed him that he should take precautionary
measures in protecting the properties of the company stored at the Bodega Tanque because
of the strikers caused damage to the factory in Binangonan and sabotage might occur. For
this reason, he was advised by the manager to request the members of the Union to stay
meanwhile outside the premises of the Bodega Tanque. What he did in the morning of May
28, 1956 was to station himself at the gate of the compound. When the workers arrived for
work at 7:00 a.m., he did not allow the 21 complaining workers who are members of the
Union to enter the gate and allowed only those who are not members of said Union.
Upon refusal of Candido de Leon to allow the complaining workers to work on that day, the
Union, sent a letter to the manager of the Bodega alleging discrimination. The manager sent
a reply denying such allegation.
Issue: WON there was discrimination against the employees who are not allowed to work in
the Bodega.
Held: It is not herein controverted that the complainants were locked out or denied work by
the respondent Company. However, for the discrimination by reason of union membership to
be considered an unfair labor practice, the same must have been committed to courage or
discourage such membership in the union.
This cannot be said of the act of the Company complained of. As clearly established by the
evidence, its refusal to all complainants to work and requirement that the latter stay out of the
premises in the meantime was borne out of the Company’s justified apprehension and fear
that sabotage might be committed in the warehouse where the products machinery and spare
parts were stored, as has been the case in Binangonan. It has never been shown that the act
of the Company was intended to induce the complainants to renounce their union-
membership or as a deterrent for non-members to affiliate therewith, nor as a retaliatory
measure for activities in the union or in furtherance of the cause of the union.
PICOP vs. Taneca, G.R. No. 160828, August 9, 2010
Facts: Respondents were regular rank-and-file employees of PRI and bona fide members of
Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-
SPFL), which is the collective bargaining agent for the rank-and-file employees of petitioner
PRI. PRI has a CBA with NAMAPRI-SPFL. The CBA contained the following union security
provisions:
Article II- Union Security and Check-Off
 26
Section 6. Maintenance of membership.
6.1 All employees within the appropriate bargaining unit who are members of the UNION at
the time of the signing of this AGREEMENT shall, as a condition of continued employment by
the COMPANY, maintain their membership in the UNION in good standing during the
effectivity of this AGREEMENT.
6.3 The COMPANY, upon the written request of the UNION and after compliance with the
requirements of the New Labor Code, shall give notice of termination of services of any
employee who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of this Article
Atty. Fuentes sent a letter to the management of PRI demanding the termination of
employees who allegedly campaigned for, supported and signed the Petition for Certification
Election of the Federation of Free Workers Union (FFW) during the effectivity of the CBA.
NAMAPRI-SPFL considered said act of campaigning for and signing the petition for
certification election of FFW as an act of disloyalty and a valid basis for termination for a
cause in accordance with its Constitution and By-Laws, and the terms and conditions of the
CBA, specifically Article II, Sections 6.1 and 6.2 on Union Security Clause.
On October 16, 2000, PRI served notices of termination for causes to employees whom
NAMAPRIL-SPFL sought to be terminated on the ground of “acts of disloyalty” committed
against it when respondents allegedly supported and signed the Petition for Certification
Election of FFW before the “freedom period” during the effectivity of the CBA. A Notice dated
October 21, 2000 was also served on the DOLE, Caraga Region.
Respondents then accused PRI of ULP.
Issue: WON respondents were validly terminated.
Held: “Union security” is a generic term, which is applied to and comprehends “closed shop,”
“union shop,” “maintenance of membership,” or any other form of agreement which imposes
upon employees the obligation to acquire or retain union membership as a condition affecting
employment. There is union shop when all new regular employees are required to join the
union within a certain period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the
effective date of the agreement, or who thereafter become members, must maintain union
membership as a condition for continued employment until they are promoted or transferred
out of the bargaining unit, or the agreement is terminated. A closed shop may be defined as
an enterprise in which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of which the employees in
interest are a part.
However, in terminating the employment of an employee by enforcing the union security
clause, the employer needs to determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the union security provision in
the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the
employee from the union. These requisites constitute just cause for terminating an employee
based on the union security provision of the CBA.
As to the first requisite, there is no question that the CBA between PRI and respondents
included a union security clause. Secondly, it is likewise undisputed that NAMAPRI-SPFL, in
two (2) occasions demanded from PRI, in their letters dated May 16 and 23, 2000, to
terminate the employment of respondents due to their acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no sufficient evidence to support the
decision of PRI to terminate the employment of the respondents.
The mere signing of the authorization in support of the Petition for Certification Election of
FFW on March 19, 20 and 21, or before the “freedom period,” is not sufficient ground to
terminate the employment of respondents inasmuch as the petition itself was actually filed
during the freedom period. Nothing in the records would show that respondents failed to
maintain their membership in good standing in the Union. Respondents did not resign or
withdraw their membership from the Union to which they belong. Respondents continued to
pay their union dues and never joined the FFW.
NUWHRAIN vs. NLRC, G.R. No. 179402, September 30, 2008
FACTS: Petitioner NUWHRAIN is a legitimate labor organization composed of rank-and-file
employees of the Hotel, while respondent Acesite Philippines Hotel Corporation is the owner
and operator of said Hotel.
The Hotel entered into a Collective Bargaining Agreement with HI-MANILA PAVILION
HOTEL LABOR UNION (HIMPHLU), the exclusive bargaining agent of the rank-and-file
employees of the Hotel. Both parties consented that the representation aspect and other non-
economic provisions of the Collective Bargaining Agreement were to be effective for five
years or until 30 June 2005; and the economic provisions of the same were to be effective for
three years or until 30 June 2003. The parties subsequently re-negotiated the economic
provisions of the Collective Bargaining Agreement and extended the term of their effectivity
for another two years or until 30 June 2005.5
During the 60-day freedom period which preceded the expiration of the Collective Bargaining
Agreement, starting on 1 May 2005 and ending on 30 June 2005, the Hotel and HIMPHLU
negotiated the extension of the provisions of the existing Collective Bargaining Agreement for
two years, effective 1 July 2005 to 30 June 2007. The parties signed the Memorandum of
Agreement on 20 May 2005 and the employees ratified it on 27 May 2005.
On 21 June 2005, NUWHRAIN was accorded by the Labor Relations Division of the
Department of Labor and Employment (DOLE) the status of a legitimate labor organization.
Thereafter, NUWHRAIN exercised the right to challenge the majority status of the incumbent
union, HIMPHLU, by filing a Petition for Certification Election on 28 June 2005.
On 5 July 2007, the Industrial Relations Division of the DOLE allowed the registration of the
Memorandum of Agreement executed between HIMPHLU and the Hotel, extending the
effectivity of the existing Collective Bargaining Agreement for another two years.
After the lapse of the 60-day freedom period, but pending the disposition of the Petition for
Certification Election filed by NUWHRAIN, HIMPHLU served the Hotel with a written demand
dated 28 July 200510 for the dismissal of 36 employees following their expulsion from
HIMPHLU for alleged acts of disloyalty and violation of its Constitution and by-laws. An
Investigation Report11 was attached to the said written demand, stating that the 36
employees, who were members of HIMPHLU, joined NUWHRAIN, in violation of Section 2,
Article IV of the Collective Bargaining Agreement, which provided for a union security
clause.12 On 1 August 2005, the Hotel issued Disciplinary Action Notices13 (Notices) to the
36 employees identified in the written demand of HIMPHLU. The Notices directed the 36
employees to submit a written explanation for their alleged acts of disloyalty and violation of
the union security clause for which HIMPHLU sought their dismissal.
NLRC decided that there was no unfair labor practice.NUWHRAIN filed a Motion for
Reconsideration of the foregoing NLRC Resolution. It was denied by the NLRC in another
Resolution dated 30 June 2006.20 Thus, NUWHRAIN filed a Petition for Certiorari before the
Court of Appeals, docketed as C.A. G.R. SP No. 96171.
In the meantime, on 16 June 2006, the Certification Election for regular rank and file
employees of the Hotel was held, which HIMPHLU won. It was accordingly certified as the
exclusive bargaining agent for rank and file employees of the Hotel. On 30 May 2007, the
Court of Appeals promulgated its Decision2 upholding the Resolution of the NLRC. It
declared that the Hotel had acted prudently when it issued the Notices to the 36 employees
after HIMPHLU demanded their dismissal. It clarified that these Notices did not amount to the
termination of the employees concerned but merely sought their explanation on why the
union security clause should not be applied to them. The appellate court also gave credence
to the denial by the officers of the respondent and the Hotel that they made statements
favoring HIMPHLU over NUWHRAIN during the reconciliatory conferences. The Court of
Appeals further noted that the unhampered organization and registration of NUWHRAIN
negated its allegation that the Hotel required its employees not to join a labor organization as
a condition for their employment.
NUWHRAIN’s Motion for Reconsideration of the aforementioned Decision of the Court of
Appeals was denied by the same court in a Resolution. Hence, the present Petition, in which
NUWHRAIN makes the following assignment of errors:
ISSUE: Whether the dismissal of the subject employees in accordance with CBA’s Union
Security Clause deemed unfair labor practice.
HELD: No. NUWHRAIN maintains that the respondent committed unfair labor practice when
(1) the Hotel issued the Notices to the 36 employees, former members of HIMPHLU, who
switched allegiance to NUWHRAIN; and (2) the officers of the respondent and the Hotel
allegedly uttered statements during the reconciliatory conferences indicating their preference
for HIMPHLU and their disapproval of NUWHRAIN. This argument is specious.
“Union security” is a generic term which is applied to and comprehends “closed shop,” “union
shop,” “maintenance of membership” or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment. Article 248(e) of the Labor Code recognizes the effectivity of a union shop
clause:
The law allows stipulations for “union shop” and “closed shop” as a means of encouraging
workers to join and support the union of their choice in the protection of their rights and
interests vis-à-vis the employer. By thus promoting unionism, workers are able to negotiate
with management on an even playing field and with more persuasiveness than if they were to
individually and separately bargain with the employer. In Villar v. Inciong, this Court held that
employees have the right to disaffiliate from their union and form a new organization of their
own; however, they must suffer the consequences of their separation from the union under
the security clause of the Collective Bargaining Agreement.
In the present case, the Collective Bargaining Agreement includes a union security provision.
To avoid the clear possibility of liability for breaching the union security clause of the
Collective Bargaining Agreement and to protect its own interests, the only sensible option left
to the Hotel, upon its receipt of the demand of HIMPHLU for the dismissal of the 36
employees, was to conduct its own inquiry so as to make its own findings on whether there
was sufficient ground to dismiss the said employees who defected from HIMPHLU. The
issuance by the respondent of the Notices requiring the 36 employees to submit their
explanations to the charges against them was the reasonable and logical first step in a fair
investigation. It is important to note that the Hotel did not take further steps to terminate the
36 employees. Instead, it arranged for reconciliatory conferences between the contending
unions in order to avert the possibility of dismissing the 36 employees for violation of the
union security clause of the Collective Bargaining Agreement.
 27
This Court, in Malayang Samahan ng Manggagawa sa M. Greenfield v. Ramos clearly stated
the general rule: the dismissal of an employee by the company pursuant to a labor union’s
demand in accordance with a union security agreement does not constitute unfair labor
practice. An employer is not considered guilty of unfair labor practice if it merely complied in
good faith with the request of the certified union for the dismissal of employees expelled from
the union pursuant to the union security clause in the Collective Bargaining Agreement. In the
case at bar, there is even less possibility of sustaining a finding of guilt for unfair labor
practice where respondent did not dismiss the 36 employees, despite the insistence of
HIMPHLU, the sole bargaining agent for the rank and file employees of the Hotel, on the
basis of the union security clause of the Collective Bargaining Agreement. The only act
attributed to the respondent is its issuance of the Notices which, contrary to being an unfair
labor practice, even afforded the employees involved a chance to be heard.
In all, respondent had not committed any act which would constitute unfair labor practice.
BPI vs. BPI Employees Union-Davao Chapter, G.R. No. 164301, August 10, 2010
FACTS: In 2000, Far East Bank (FEB) was absorbed by the Bank of the Philippine Islands
(BPI). Now BPI has an existing Union Shop Clause agreement with the BPI Employees
Union-Davao Chapter-Federation of Unions in BPI Unibank (BPI Union) whereby it is a pre-
condition that new employees must join the union before they can be regularized otherwise
they will not have a continued employment. By reason of the failure of the FEB employees to
join the union, BPI Union recommended to BPI their dismissal. BPI refused. The issue went
to voluntary arbitration where BPI won but the Court of Appeals reversed the Voluntary
Arbitrator. BPI appealed to the Supreme Court.
ISSUE: Whether or not the Union Shop agreement violated the constitutional right of security
of tenure of the FEB employees absorbed by BPI.
HELD: No. As a general rule, the State protects the workers right to security of tenure. An
employee’s services can only be terminated upon just and authorized causes. In this case,
the presence of a Union Shop Clause in the CBA between BPI and BPI Union must be
respected. Failure of an employee to join the union pursuant to the clause is an authorized
cause for BPI not to continue employing the employee concerned – and BPI must respect
that provision of the CBA. In the hierarchy of labor rights, unionism is favored over security of
tenure. A contrary interpretation of the Union Shop Clause would dilute its efficacy and put
the certified union that is supposedly being protected thereby at the mercy of management.
Nevertheless, the FEB employees are still entitled to the twin notice rule – this is to afford
them ample opportunity to whether or not join the union.
Complex Electronics Employees Association vs. Complex Electronics, G.R. No. 122136, July
19, 1999
FACTS: Due to losses on production of the petitioner, it was constrained to cease operations.
In the evening of April 6, 1992, the machinery, equipment and materials being used for
production at Complex were pulled-out from the company premises and transferred to the
premises of Ionics Circuit, Inc. (Ionics) at Cabuyao, Laguna. The following day, a total
closure of company operation was effected at Complex.
A complaint was, thereafter, filed with the Labor Arbitration Branch of the NLRC for unfair
labor practice, illegal closure/illegal lockout, money claims for vacation leave, sick leave,
unpaid wages, 13th month pay, damages and attorney’s fees. The Union alleged that the
pull-out of the machinery, equipment and materials from the company premises, which
resulted to the sudden closure of the company was in violation of Section 3 and 8, Rule XIII,
Book V of the Labor Code of the Philippines and the existing CBA. Ionics was impleaded as a
party defendant because the officers and management personnel of Complex were also
holding office at Ionics with Lawrence Qua as the President of both companies.
The Union anchors its position on the fact that Lawrence Qua is both the president of
Complex and Ionics and that both companies have the same set of Board of Directors. It
claims that business has not ceased at Complex but was merely transferred to Ionics, a
runaway shop. To prove that Ionics was just a runaway shop, petitioner asserts that out of
the 80,000 shares comprising the increased capital stock of Ionics, it was Complex that owns
majority of said shares with P1,200,000.00 as its capital subscription and P448,000.00 as its
paid up investment, compared to P800,000.00 subscription andP324,560.00 paid-up owing to
the other stockholders, combined. Thus, according to the Union, there is a clear ground to
pierce the veil of corporate fiction.
ISSSUE: WON Ionics is merely a runaway shop
HELD: NO. A “runaway shop” is defined as an industrial plant moved by its owners from one
location to another to escape union labor regulations or state laws, but the term is also used
to describe a plant removed to a new location in order to discriminate against employees at
the old plant because of their union activities. It is one wherein the employer moves its
business to another location or it temporarily closes its business for anti-union purposes. A
“runaway shop” in this sense, is a relocation motivated by anti-union animus rather than for
business reasons.
In this case, however, Ionics was not set up merely for the purpose of transferring the
business of Complex. At the time the labor dispute arose at Complex, Ionics was already
existing as an independent company. As earlier mentioned, it has been in existence since
July 5, 1984 (8 years prior to the dispute). It cannot, therefore, be said that the temporary
closure in Complex and its subsequent transfer of business to Ionics was for anti-union
purposes. The Union failed to show that the primary reason for the closure of the
establishment was due to the union activities of the employees.
The mere fact that one or more corporations are owned or controlled by the same or single
stockholder is not a sufficient ground for disregarding separate corporate personalities. Mere
ownership by a single stockholder or by another corporation of all or nearly all of the capital
stock of a corporation is not of itself sufficient ground for disregarding the separate corporate
personality.
At first glance after reading the decision a quo, it would seem that the closure of respondent’s
operation is not justified. However, a deeper examination of the records along with the
evidence, would show that the closure, although it was done abruptly as there was no
compliance with the 30-day prior notice requirement, said closure was not intended to
circumvent the provisions of the Labor Code on termination of employment. The closure of
operation by Complex on April 7, 1992 was not without valid reasons. Customers of
respondent alarmed by the pending labor dispute and the imminent strike to be foisted by the
union, as shown by their strike vote, directed respondent Complex to pull-out its equipment,
machinery and materials to other safe bonded warehouse. Respondent being mere
consignees of the equipment, machinery and materials were without any recourse but to
oblige the customers’ directive. The pull-out was effected on April 6, 1992. We can see here
that Complex’s action, standing alone, will not result in illegal closure that would cause the
illegal dismissal of the complainant workers. Hence, the Labor Arbiter’s conclusion that since
there were only 2 of respondent’s customers who have expressed pull-out of business from
respondent Complex while most of the customer’s have not and, therefore, it is not justified to
close operation cannot be upheld. The determination to cease operation is a prerogative of
management that is usually not interfered with by the State as no employer can be required
to continue operating at a loss simply to maintain the workers in employment. That would be
taking of property without due process of law which the employer has the right to resist.
Octavio vs. PLDT, G.R. No. 175492, February 27, 2013
Facts: PLDT and Gabay ng Unyon sa Telekominaksyon ng mga Superbisor (GUTS) entered
into a CBA covering the period January 1, 1999 to December 31, 2001 (CBA of 1999-2001).
On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary status.
He became a member of GUTS.
On May 31, 2002, PLDT and GUTS entered into another CBA covering the period January 1,
2002 to December 31, 2004 (CBA of 2002-2004). Claiming that he was not given the salary
increases of P2,500.00 effective January 1, 2001 and P2,000.00 effective January 1, 2002,
Octavio wrote the President of GUTS, Adolfo Fajardo (Fajardo). Acting thereon and on similar
grievances from other GUTS members, Fajardo wrote the PLDT Human Resource Head to
inform management of the GUTS members’ claim for entitlement to the across-the-board
salary increases.
The committee denied the claims of Octavio. Octavio filed before the Arbitration Branch of the
NLRC a Complaint for payment of said salary increases.
PLDT countered that the issues advanced by Octavio had already been resolved by the
Union-Management Grievance Committee when it denied his claims through the Committee
Resolution. Moreover, the grant of across-the board salary increase for those who were
regularized starting January 1, 2002 and the exclusion thereto of those who were regularized
on January 1, 2001, do not constitute an act of unfair labor practice as would result in any
discrimination or encourage or discourage membership in a labor organization. In fact, when
the Union-Management Grievance Committee came up with the Committee Resolution, they
considered the same as the most practicable and reasonable solution for both management
and union. At any rate, the said Committee Resolution had already become final and
conclusive between the parties for failure of Octavio to elevate the same to the proper forum.
In addition, PLDT claimed that the NLRC has no jurisdiction to hear and decide Octavio’s
claims.
Issue: WON the decision of the Grievance Committee is binding.
Held: Yes. It is settled that "when parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then that procedure should be
strictly observed." Moreover, we have held time and again that "before a party is allowed to
seek the intervention of the court, it is a precondition that he should have availed of all the
means of administrative processes afforded him. Hence, if a remedy within the administrative
machinery can still be resorted to by giving the administrative officer concerned every
opportunity to decide on a matter that comes within his jurisdiction, then such remedy should
be exhausted first before the court’s judicial power can be sought. The premature invocation
of the court’s judicial intervention is fatal to one’s cause of action." "The underlying principle
of the rule on exhaustion of administrative remedies rests on the presumption that when the
administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it
will decide the same correctly."
By failing to question the Committee Resolution through the proper procedure prescribed in
the CBA, that is, by raising the same before a Board of Arbitrators, Octavio is deemed to
have waived his right to question the same. Clearly, he departed from the grievance
procedure mandated in the CBA and denied the Board of Arbitrators the opportunity to pass
upon a matter over which it has jurisdiction. Hence, and as correctly held by the CA,
Octavio’s failure to assail the validity and enforceability of the Committee Resolution makes
the same binding upon him. On this score alone, Octavio’s recourse to the labor tribunals
below, as well as to the CA, and, finally, to this Court, must therefore fail.
Goya Inc. vs Goya Employees’ Union, G.R. No. 170054, January 21, 2013
FACTS: Sometime in January 2004, petitioner Goya, Inc. (Company) hired contractual
employees from PESO Resources Development Corporation (PESO) to perform temporary
and occasional services in its factory. This prompted respondent Goya, Inc. Employees
 28
Union–FFW (Union) to request for a grievance conference on the ground that the contractual
workers do not belong to the categories of employees stipulated in the existing Collective
Bargaining Agreement (CBA).The Union asserted that the hiring of contractual employees
from PESO is not a management prerogative and in gross violation of the CBA tantamount to
unfair labor practice (ULP). It noted that the contractual workers engaged have been
assigned to work in positions previously handled by regular workers and Union members, in
effect violating Section 4, Article I of the CBA, which provides for three categories of
employees in the Company.
During the hearing on July 1, 2004, the Company and the Union manifested before Voluntary
Arbitrator (VA) Bienvenido E. Laguesma that amicable settlement was no longer possible;
hence, they agreed to submit for resolution the solitary issue of "[w]hether or not the
Company is guilty of unfair labor acts in engaging the services of PESO, a third party service
provider, under the existing CBA, laws, and jurisprudence."
On October 26, 2004, VA Laguesma dismissed the Union’s charge of ULP for being purely
speculative and for lacking in factual basis, but the Company was directed to observe and
comply with its commitment under the CBA.
ISSUE: WON the VA professed an order was not covered by the sole issue submitted for
voluntary arbitration
HELD: No. The VA ruled on a matter that is covered by the sole issue submitted for voluntary
arbitration. Resultantly, 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. Indeed, the opinion of the VA is germane to, or, in the words of the CA, "interrelated
and intertwined with," the sole issue submitted for resolution by the parties.
Generally, the arbitrator is expected to decide only those questions expressly delineated by
the submission agreement. Nevertheless, the arbitrator can assume that he has the
necessary power to make a final settlement since arbitration is the final resort for the
adjudication of disputes. The succinct reasoning enunciated by the CA in support of its
holding, that the Voluntary Arbitrator in a labor controversy has jurisdiction to render the
questioned arbitral awards, deserves our concurrence, thus:
In general, the arbitrator is expected to decide those questions expressly stated and limited in
the submission agreement. However, since arbitration is the final resort for the adjudication of
disputes, the arbitrator can assume that he has the power to make a final settlement. Thus,
assuming that the submission empowers the arbitrator to decide whether an employee was
discharged for just cause, the arbitrator in this instance can reasonably assume that his
powers extended beyond giving a yes-or-no answer and included the power to reinstate him
with or without back pay.
In one case, the Supreme Court stressed that "xxx the Voluntary Arbitrator had plenary
jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of
his own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. The
Arbitrator, as already indicated, viewed his authority as embracing not merely the
determination of the abstract question of whether or not a performance bonus was to be
granted but also, in the affirmative case, the amount thereof.
By the same token, the issue of regularization should be viewed as two-tiered issue. While
the submission agreement mentioned only the determination of the date or regularization, law
and jurisprudence give the voluntary arbitrator enough leeway of authority as well as
adequate prerogative to accomplish the reason for which the law on voluntary arbitration was
created – speedy labor justice. It bears stressing that the underlying reason why this case
arose is to settle, once and for all, the ultimate question of whether respondent employees
are entitled to higher benefits. To require them to file another action for payment of such
benefits would certainly undermine labor proceedings and contravene the constitutional
mandate providing full protection to labor.
Honda Cars vs Honda Cars Technical Specialist, G.R. No. 204142, November 19, 2014
Facts: Honda Cars Inc., and the company’s supervisors and technical specialists’ union,
Honda Cars Technical Specialists and Supervisory Union entered into a collective bargaining
agreement for the period April 1, 2006 to March 31, 2011. Prior to the execution of the CBA,
the union members were receiving P3,300.00 a month as transportation allowance; on
September3, 2005, they entered into a Memorandum of Agreement converting the
transportation allowance into a monthly gasoline allowance at 125 liters each for official
business purposes and travel from home to office. Claiming that the gasoline allowance is
similar to the company policy for manages and assistant vice-presidents that “in the event the
gas allowance is not fully consumed, the gasoline not used may be converted to cash,
subject to whatever tax is applicable”, the company deducted from union members
withholding tax corresponding to the conversion to cash of their unused gasoline allowance,
since the company considered it as part of compensation subject to income tax. The union
on the other hand claimed that the gasoline allowance is a “negotiated item” under Article XV
Section 15 of the new CBA on fringe benefits, thus it resulted to a grievance which was not
resolved by the CBA grievance procedure. They submitted the issue to a panel of voluntary
arbitrators as required by the CBA.
The Panel of Voluntary Arbitrators then rendered a decision declaring that the cash
conversion of the unused gasoline allowance is a fringe benefit subject to the fringe benefit
tax, not to income tax, thus the deductions made by the company shall be considered as
advances subject to refund in future remittances of withholding tax.
On appeal, the CA Eight Division denied the appeal and affirmed with modification the
Voluntary Arbitrators’ decision. While the CA agreed that the cash conversion is a fringe
benefit, it does not necessarily mean that it is subject to the fringe benefit tax, as it explained
that Section 33 (A) of the National Internal Revenue Code (NIRC) of 1997 imposed a fringe
benefit tax, effective January 1, 2000 and thereafter, on the grossed-up monetary value of
fringe benefit furnished or granted to the employee (except rank-and-file employees) by the
employer (unless the fringe benefit is required by the nature of, or necessary to the trade,
business or profession of the employer, or when the fringe benefit is for the convenience or
advantage of the employer). Since the gasoline allowance was mainly for the benefit of the
company, it is not subject to fringe benefit tax.
The company elevated the case to the Supreme Court. It assails the finding of both the
arbitrators and the CA that the cash conversion of the unused portion of gasoline allowance
is a fringe benefit, not a part of compensation income. Even assuming the same is a fringe
benefit, the union has no cause of action for the refund of tax withheld and paid to the BIR.
Citing Section 204 of the NIRC, the company contends that an action for the refund of an
erroneous withholding and payment of taxes should be in the nature of a tax refund claim
with the BIR. It further contends that when it withheld the income tax due from the cash
conversion of the unused gasoline allowance of the union members, it was simply acting as
an agent of the government for the collection and payment of taxes due from the members.
Issue: Whether or not the union has a cause of action for refund to tax withheld by the
company on the cash conversion of the unused portion of the gasoline allowance of its
members.
Ruling: We partly grant the petition. The Voluntary Arbitrator has no jurisdiction to settle tax
matters
The Labor Code vests the Voluntary Arbitrator original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies[ LABOR CODE, Article 261.]. Upon agreement of the parties, the
Voluntary Arbitrator shall also hear and decide all other labor disputes, including unfair labor
practices and bargaining deadlocks.1
In short, the Voluntary Arbitrator’s jurisdiction is limited to labor disputes. Labor dispute
means “any controversy or matter concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining, changing, or
arranging the terms and conditions of employment, regardless of whether the disputants
stand in the proximate relation of employer and employee.”2
The issues raised before the Panel of Voluntary Arbitrators are: (1) whether the cash
conversion of the gasoline allowance shall be subject to fringe benefit tax or the graduated
income tax rate on compensation; and (2) whether the company wrongfully withheld income
tax on the converted gas allowance.
The Voluntary Arbitrator has no competence to rule on the taxability of the gas allowance and
on the propriety of the withholding of tax. These issues are clearly tax matters, and do not
involve labor disputes. To be exact, they involve tax issues within a labor relations setting as
they pertain to questions of law on the application of Section 33 (A) of the NIRC. They do not
require the application of the Labor Code or the interpretation of the MOA and/or company
personnel policies. Furthermore, the company and the union cannot agree or compromise on
the taxability of the gas allowance. Taxation is the State’s inherent power; its imposition
cannot be subject to the will of the parties.
Under paragraph 1, Section 4 of the NIRC, the CIR shall have the exclusive and original
jurisdiction to interpret the provisions of the NIRC and other tax laws, subject to review by the
Secretary of Finance. Consequently, if the company and/or the union desire/s to seek
clarification of these issues, it/they should have requested for a tax ruling3 from the Bureau of
Internal Revenue (BIR). Any revocation, modification or reversal of the CIR’s ruling shall not
be given retroactive application if the revocation, modification or reversal will be prejudicial to
the taxpayers, except in the following cases:
(a) Where the taxpayer deliberately misstates or omits material facts from his return or any
document required of him by the BIR;
(b) Where the facts subsequently gathered by the BIR are materially different from the facts
on which the ruling is based; or
(c) Where the taxpayer acted in bad faith.4
On the other hand, if the union disputes the withholding of tax and desires a refund of the
withheld tax, it should have filed an administrative claim for refund with the CIR. Paragraph 2,
Section 4 of the NIRC expressly vests the CIR original jurisdiction over refunds of internal
revenue taxes, fees or other charges, penalties imposed in relation thereto, or other tax
matters.
The union has no cause of action against the company
Under the withholding tax system, the employer as the withholding agent acts as both the
government and the taxpayer’s agent. Except in the case of a minimum wage earner, every
employer has the duty to deduct and withhold upon the employee’s wages a tax determined
in accordance with the rules and regulations to be prescribed by the Secretary of Finance,
upon the CIR’s recommendation.5 As the Government’s agent, the employer collects tax and
 29
serves as the payee by fiction of law.6 As the employee’s agent, the employer files the
necessary income tax return and remits the tax to the Government.7
Based on these considerations, we hold that the union has no cause of action against the
company. The company merely performed its statutory duty to withhold tax based on its
interpretation of the NIRC, albeit that interpretation may later be found to be erroneous. The
employer did not violate the employee’s right by the mere act of withholding the tax that may
be due the government.8
Moreover, the NIRC only holds the withholding agent personally liable for the tax arising from
the breach of his legal duty to withhold, as distinguished from his duty to pay tax. 9 Under
Section 79 (B) of the NIRC, if the tax required to be deducted and withheld is not collected
from the employer, the employer shall not be relieved from liability for any penalty or addition
to the unwithheld tax.
Thus, if the BIR illegally or erroneously collected tax, the recourse of the taxpayer, and in
proper cases, the withholding agent, is against the BIR, and not against the withholding
agent10. The union’s cause of action for the refund or non-withholding of tax is against the
taxing authority, and not against the employer. Section 229 of the NIRC provides:
Sec.229. Recovery of Tax Erroneously or Illegally Collected. – No suit or proceeding shall be
maintained in any court for the recovery of any national internal revenue tax hereafter alleged
to have been erroneously or illegally assessed or collected, or of any penalty claimed to have
been collected without authority, or of any sum alleged to have been excessively or in any
manner wrongfully collected, until a claim for refund or credit has been duly filed with the
Commissioner; but such suit or proceeding may be maintained, whether or not such tax,
penalty, or sum has been paid under protest or duress.
Ace Navigation Co. Inc., vs Fernandez, G.R. No. 197309, October 10, 2012
It bears stressing at this point that we are upholding the jurisdiction of the voluntary arbitrator
or panel of voluntary arbitrators over the present dispute, not only because of the clear
language of the parties’ CBA on the matter; more importantly, we so uphold the voluntary
arbitrator’s jurisdiction, in recognition of the State’s express preference for voluntary modes of
dispute settlement, such as conciliation and voluntary arbitration as expressed in the
Constitution, the law and the rules. It is settled that when the parties have validly agreed on a
procedure for resolving grievances and to submit a dispute to voluntary arbitration then that
procedure should be strictly observed.
Interphil Laboratories Employees Union vs. Interphil Laboratories, G.R. No. 142824,
December 19, 2001
Facts: Petitioner is the sole and exclusive bargaining agent of the rank-and-file employees of
Respondent. They had a CBA.
Prior to the expiration of the CBA, respondent company was approached by the petitioner,
through its officers. The Union inquired about the stand of the company regarding the
duration of the CBA which was set to expire in a few months. Salazar told the union officers
that the matter could be best discussed during the formal negotiations which would start
soon.
All the rank-and-file employees of the company refused to follow their regular two-shift work
schedule. The employees stopped working and left their workplace without sealing the
containers and securing the raw materials they were working on.
To minimize the damage the overtime boycott was causing the company, Salazar
immediately asked for a meeting with the union officers. In the meeting, Enrico Gonzales, a
union director, told Salazar that the employees would only return to their normal work
schedule if the company would agree to their demands as to the effectivity and duration of
the new CBA. Salazar again told the union officers that the matter could be better discussed
during the formal renegotiations of the CBA. Since the union was apparently unsatisfied with
the answer of the company, the
overtime boycott continued. In addition, the employees started to engage in a work slowdown
campaign during the time they were working, thus substantially delaying the production of the
company.
Respondent company filed with the National NLRC a petition to declare illegal petitioner
union’s “overtime boycott” and “work slowdown” which, according to respondent company,
amounted to illegal strike. It also filed with Office Secretary of Labor a petition for assumption
of jurisdiction. Secretary of Labor Nieves Confesor issued an assumption order over the labor
dispute.
Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo
A. Quisumbing. Then Secretary Quisumbing approved and adopted the report in his Order,
finding illegal strike on the part of petitioner Union.
Issue: WON the Labor Secretary has jurisdiction to rule over an illegal strike.
Held: On the matter of the authority and jurisdiction of the Secretary of Labor and
Employment to rule on the illegal strike committed by petitioner union, it cannot be denied
that the issues of “overtime boycott” and “work slowdown” amounting to illegal strike before
Labor Arbiter Caday are intertwined with the labor dispute before the Labor Secretary.
The appellate court also correctly held that the question of the Secretary of Labor and
Employment’s jurisdiction over labor-related disputes was already settled in International
Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated Labor Union (ALU) where
the Court declared:
In the present case, the Secretary was explicitly granted by Article 263(g) of the Labor Code
the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, and decide the same accordingly.
Necessarily, this authority to assume jurisdiction over the said labor dispute must include and
extend to all questions and controversies arising therefrom, including cases over which the
labor arbiter has exclusive jurisdiction.
Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptions thereto.
This is evident from the opening proviso therein reading ‘(e)xcept as otherwise provided
under this Code x x x.’ Plainly, Article 263(g) of the Labor Code was meant to make both the
Secretary (or the various regional directors) and the labor arbiters share jurisdiction, subject
to certain conditions. Otherwise, the Secretary would not be able to effectively and efficiently
dispose of the primary dispute. To hold the contrary may even lead to the absurd and
undesirable result wherein the Secretary and the labor arbiter concerned may have
diametrically opposed rulings. As we have said, ‘it is fundamental that a statute is to be read
in a manner that would breathe life into it, rather than defeat it.
In fine, the issuance of the assailed orders is within the province of the Secretary as
authorized by Article 263(g) of the Labor Code and Article 217(a) and (5) of the same Code,
taken conjointly and rationally construed to subserve the objective of the jurisdiction vested in
the Secretary.
NUWHRAIN-APL-IUF Dusit Hotel Nikko Chapter vs. CA, G.R. No. 163942, Nov. 11, 2008
Facts: Because of the collective bargaining deadlock, petitioner Union staged a strike against
the Hotel, herein private respondent. This strike was declared illegal by the SC.
Issue: The effects of an illegal strike on employees.
Held: Regarding the Union officers and members’ liabilities for their participation in the illegal
picket and strike, Article 264(a), paragraph 3 of the Labor Code provides that “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 x x x.” The law makes a distinction between union officers
and mere union members. Union officers may be validly terminated from employment for their
participation in an illegal strike, while union members have to participate in and commit illegal
acts for them to lose their employment status. Thus, it is necessary for the company to
adduce proof of the participation of the striking employees in the commission of illegal acts
during the strikes.
Clearly, the 29 Union officers may be dismissed pursuant to Art. 264(a), par. 3 of the Labor
Code which imposes the penalty of dismissal on “any union officer who knowingly
participates in an illegal strike.” We, however, are of the opinion that there is room for
leniency with respect to the Union members. It is pertinent to note that the Hotel was able to
prove before the NLRC that the strikers blocked the ingress to and egress from the Hotel. But
it is quite apparent that the Hotel failed to specifically point out the participation of each of the
Union members in the commission of illegal acts during the picket and the strike. For this
lapse in judgment or diligence, we are constrained to reinstate the 61 Union members.
Further, we held in one case that union members who participated in an illegal strike but were
not identified to have committed illegal acts are entitled to be reinstated to their former
positions but without backwages.
Club Filipino vs. Bautista, G.R. No. 168406, July 13, 2009
Facts: Petitioner and the union had a CBA which expired on May 31, 2000. Within the
freedom period, the union made several demands for negotiation but the company replied
that it could not muster a quorum, thus no CBA negotiations could be held. In order to compel
the company to negotiate, union filed a request for preventive mediation with NCMB but
again failed. On April 2001, a notice of strike was filed by the union and thereafter, a strike
was held. Petitioner filed before the NLRC a petition to declare the strike illegal. The LA, in its
decision, declared that the strike is illegal. On appeal, the NLRC decision is affirmed the LA
decision. Upon elevation to CA, the court set aside the ruling of the LA and NLRC as far as
other respondent but dismissed the other respondent. Hence, this petition.
Issue: Whether the strike staged by respondent is legal.
Ruling: The court ruled in affirmative. It is undisputed that the notice of strike was filed by the
union without attaching the counter-proposal of the company. In cases of bargaining
deadlocks, the notice shall, as far as practicable, further state the unresolved issues in the
bargaining negotiations and be accompanied by the written proposals of the union, the
counter-proposals of the employer and the proof of a request for conference to settle
differences. In cases of unfair labor practices, the notice shall, as far as practicable, state the
acts complained of, and efforts taken to resolve the dispute amicable. Any notice which does
not conform with the requirements of this and the foregoing section shall be deemed as not
having been filed and the party concerned shall be so informed by the regional branch of the
Board. The union cannot be faulted for its omission. The union could not have attached the
counter- proposal of the company in the notice of strike it submitted to the NCMB as there
was no such counter- proposal. The union filed a notice of strike, after several request for
negotiation proved futile. It was only after two weeks, when the company formally responded
to the union by submitting the first part of its counter-proposal. Nowhere in the ruling of the
LA can we find any discussion of how respondents, as union officers, knowingly participated
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in the alleged illegal strike. Thus, even assuming Arguendo that the strike was illegal, their
automatic dismissal had no basis.
Santa Rosa CocaCola Plant Ph. Union v CocaCola Bottlers, GR No. 164302, Jan 24, ‘07
Facts: The Sta. Rosa Coca-Cola Plant Employees Union (Union) is the sole and exclusive
bargaining representative of the regular daily paid workers and the monthly paid non-
commission-earning employees of the Coca-Cola Bottlers Philippines, Inc. (Company) in its
Sta. Rosa, Laguna plant.
Upon the expiration of the CBA, the Union informed the Company of its desire to renegotiate
its terms. The CBA meetings commenced on July 26, 1999, where the Union and the
Company discussed the ground rules of the negotiations. The Union insisted that
representatives from the Alyansa ng mga Unyon sa Coca-Cola be allowed to sit down as
observers in the CBA meetings. The Union officers and members also insisted that their
wages be based on their work shift rates. For its part, the Company was of the view that the
members of the Alyansa were not members of the bargaining unit. The Alyansa was a mere
aggregate of employees of the Company in its various plants; and is not a registered labor
organization. Thus, an impasse ensued.
On August 30, 1999, the Union, its officers, directors and six shop stewards filed a “Notice of
Strike” with the NCMB.
The Union decided to participate in a mass action organized by the Alyansa in front of the
Company’s premises. Thus, the Union officers and members held a picket along the front
perimeter of the plant on September 21, 1999. As a result, all of the 14 personnel of the
Engineering Section of the Company did not report for work, and 71 production personnel
were also absent. As a result, only one of the three bottling lines operated during the day
shift. All the three lines were operated during the night shift with cumulative downtime of five
(5) hours due to lack of manning, complement and skills requirement. The volume of
production for the day was short by 60,000 physical cases versus budget.
On October 13, 1999, the Company filed a “Petition to Declare Strike Illegal”
Issue: WON the strike, dubbed by petitioner as picketing, is illegal.
Held: Article 212(o) of the Labor Code defines strike as a temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute. In Bangalisan v.
CA, the Court ruled that “the fact that the conventional term ‘strike’ was not used by the
striking employees to describe their common course of action is inconsequential, since the
substance of the situation, and not its appearance, will be deemed to be controlling.”
Picketing involves merely the marching to and fro at the premises of the employer, usually
accompanied by the display of placards and other signs making known the facts involved in a
labor dispute. As applied to a labor dispute, to picket means the stationing of one or more
persons to observe and attempt to observe. The purpose of pickets is said to be a means of
peaceable persuasion.
The basic elements of a strike are present in this case. They marched to and fro in front of
the company’s premises during working hours. Thus, petitioners engaged in a concerted
activity which already affected the company’s operations. The mass concerted activity
constituted a strike.
For a strike to be valid, the following procedural requisites provided by Art 263 of the Labor
Code must be observed: (a) a notice of strike filed with the DOLE 30 days before the
intended date thereof, or 15 days in case of unfair labor practice; (b) strike vote 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, (c) notice given to the DOLE of the results of the
voting at least seven days before the intended strike. These requirements are mandatory and
the failure of a union to comply therewith renders the strike illegal. It is clear in this case that
petitioners totally ignored the statutory requirements and embarked on their illegal strike.
MSF Tire & Rubber, Inc., vs CA, G.R. No. 128632, August 5, 1999
Facts: Respondent Union filed a notice of strike in the NCMB charging (Phildtread) with unfair
labor practice. Thereafter, they picketed and assembled outside the gate of Philtread’s plant.
Philtread, on the other hand, filed a notice of lockout. Subsequently, the Secretary of Labor
assumed jurisdiction over the labor dispute and certified it for compulsory arbitration.
During the pendency of the labor dispute, Philtread entered into a Memorandum of
Agreement with Siam Tyre whereby its plant and equipment would be sold to a new
company, herein petitioner, 80% of which would be owned by Siam Tyre and 20% by
Philtread, while the land on which the plant was located would be sold to another company,
60% of which would be owned by Philtread and 40% by Siam Tyre.
Petitioner then asked respondent Union to desist from picketing outside its plant. As the
respondent Union refused petitioner’s request, petitioner filed a complaint for injunction with
damages before the RTC. Respondent Union moved to dismiss the complaint alleging lack of
jurisdiction on the part of the trial court.
Petitioner asserts that its status as an “innocent bystander” with respect to the labor dispute
between Philtread and the Union entitles it to a writ of injunction from the civil courts.
Issue: WON petitioner has shown a clear legal right to the issuance of a writ of injunction
under the “innocent bystander” rule.
Held: In Philippine Association of Free Labor Unions (PAFLU) v. Cloribel, this Court, through
Justice J.B.L. Reyes, stated the “innocent bystander” rule as follows:
The right to picket as a means of communicating the facts of a labor dispute is a phase of the
freedom of speech guaranteed by the constitution. If peacefully carried out, it cannot be
curtailed even in the absence of employer-employee relationship.
The right is, however, not an absolute one. While peaceful picketing is entitled to protection
as an exercise of free speech, we believe the courts are not without power to confine or
localize the sphere of communication or the demonstration to the parties to the labor dispute,
including those with related interest, and to insulate establishments or persons with no
industrial connection or having interest totally foreign to the context of the dispute. Thus the
right may be regulated at the instance of third parties or “innocent bystanders” if it appears
that the inevitable result of its exercise is to create an impression that a labor dispute with
which they have no connection or interest exists between them and the picketing union or
constitute an invasion of their rights.
Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the court it is
entirely different from, without any connection whatsoever to, either party to the dispute and,
therefore, its interests are totally foreign to the context thereof.
In the case at bar, petitioner cannot be said not to have such connection to the dispute. We
find that the “negotiation, contract of sale, and the post transaction” between Philtread, as
vendor, and Siam Tyre, as vendee, reveals a legal relation between them which, in the
interest of petitioner, we cannot ignore. To be sure, the transaction between Philtread and
Siam Tyre, was not a simple sale whereby Philtread ceased to have any proprietary rights
over its sold assets. On the contrary, Philtread remains as 20% owner of private respondent
and 60% owner of Sucat Land Corporation which was likewise incorporated in accordance
with the terms of the Memorandum of Agreement with Siam Tyre, and which now owns the
land were subject plant is located. This, together with the fact that private respondent uses
the same plant or factory; similar or substantially the same working conditions; same
machinery, tools, and equipment; and manufacture the same products as Philtread, lead us
to safely conclude that private respondent’s personality is so closely linked to Philtread as to
bar its entitlement to an injunctive writ.
Univ. of the Immaculate Conception vs. Sec. of Labor, G.R. No. 178085, Sept 14, 2015
PLDT vs. Manggagawa ng Komunikasyon sa Pilipinas, G.R. No. 161783, July 13, 2005
FACTS: Petitioner Philippine Long Distance Telephone Co., Inc. (PLDT) is a domestic
corporation engaged in the telecommunications business. Private respondent Manggagawa
ng Komunikasyon sa Pilipinas (MKP) is a labor union of rank and file employees in PLDT.
The members of respondent union learned that a redundancy program would be
implemented by the petitioner. Thereupon it filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB) on 04 November 2002. The Notice fundamentally
contained the following:
UNFAIR LABOR PRACTICES, to wit:
1. PLDT’s abolition of the Provisioning Support Division, in violation of the duty to
bargain collectively with MKP in good faith.
2. PLDT’s unreasonable refusal to honor its commitment before this Honorable
Office that it will provide MKP its comprehensive plan/s with respect to personnel
downsizing / reorganization and closure of exchanges. Such refusal violates its duty to
bargain collectively with MKP in good faith.
3. PLDT’s continued hiring of “contractual”, “temporary”, “project” and “casual”
employees for regular jobs performed by union members, resulting in the decimation of the
union membership and in the denial of the right to self-organization to the concerned
employees.
4. PLDT’s gross violation of the legal and CBA provisions on overtime work and
compensation.
5. PLDT’s gross violation of the CBA provisions on promotions and job grade re-
evaluation or reclassification.
On 11 November 2002, another Notice of Strike was filed by the private respondent, which
contained the following: UNFAIR LABOR PRACTICES, to wit: PLDT’s alleged restructuring of
its GMM Operation Services.
A number of conciliation meetings, conducted by the NCMB, National Capital Region, were
held between the parties. However, these efforts proved futile.
On 23 December 2002, the private respondent staged a strike. On 31 December 2002, three
hundred eighty three (383) union members were terminated from service pursuant to PLDT’s
redundancy program.
On 02 January 2003, the Secretary, Patricia Sto. Tomas, issued an Order[4] in NCMB- NCR-
NS-11-405-02 and NCMB-NCR-NS-11-412-02. Portions of the Order are reproduced
hereunder:
xxx Accordingly, the strike staged by the Union is hereby enjoined. All striking workers are
hereby directed to return to work within twenty four (24) hours from receipt of this Order,
 31
except those who were terminated due to redundancy. The employer is hereby enjoined to
accept the striking workers under the same terms and conditions prevailing prior to the strike.
The parties are likewise directed to cease and desist from committing any act that might
worsen the situation. xxx
ISSUE: WHETHER THE SUBJECT ORDERS OF THE SECRETARY OF THE DOLE
EXCLUDING FROM THE RETURN-TO-WORK ORDER THE WORKERS DISMISSED DUE
TO THE REDUNDANCY PROGRAM OF PETITIONER, ARE VALID OR NOT.
RULING: Valid. . . . Assumption of jurisdiction over a labor dispute, or as in this case the
certification of the same to the NLRC for compulsory arbitration, always co-exists with an
order for workers to return to work immediately and for employers to readmit all workers
under the same terms and conditions prevailing before the strike or lockout.
Time and again, this Court has held that when an official bypasses the law on the asserted
ground of attaining a laudable objective, the same will not be maintained if the intendment or
purpose of the law would be defeated.
One last piece. Records would show that the strike occurred on 23 December 2002. Article
263(g) directs that the employer must readmit all workers under the same terms and
conditions prevailing before the strike. Since the strike was held on the aforementioned date,
then the condition prevailing before it, which was the condition present on 22 December
2002, must be maintained.
Undoubtedly, on 22 December 2002, the members of the private respondent who were
dismissed due to alleged redundancy were still employed by the petitioner and holding their
respective positions. This is the status quo that must be maintained.
Capitol Medical Center vs. Trajano, G.R. No. 155690, June 30, 2005
FACTS: Petitioner is a hospital with address at Panay Avenue corner Scout Magbanua
Street, Quezon City. Upon the other hand, Respondent is a duly registered labor union acting
as the certified collective bargaining agent of the rank-and-file employees of petitioner
hospital.
Respondent sent petitioner a letter requesting a negotiation of their Collective Bargaining
Agreement (CBA).
Petitioner, however, challenged the union’s legitimacy and refused to bargain with
respondent. Subsequently petitioner filed with the (BLR), Department of Labor and
Employment, a petition for cancellation of respondent’s certificate of registration.
For its part, respondent filed with the (NCMB), National Capital Region, a notice of strike.
Respondent alleged that petitioner’s refusal to bargain constitutes unfair labor practice.
Despite several conferences and efforts of the designated conciliator-mediator, the parties
failed to reach an amicable settlement.
Respondent staged a strike.
Former Labor Secretary Leonardo A. Quisumbing, now Associate Justice of this Court,
issued an Order assuming jurisdiction over the labor dispute and ordering all striking workers
to return to work and the management to resume normal operations, thus:
xxx all striking workers are directed to return to work within twenty-four (24) hours from
the receipt of this Order and the management to resume normal operations and accept
back all striking workers under the same terms and conditions prevailing before the
strike. Further, parties are directed to cease and desist from committing any act that may
exacerbate the situation.
Moreover, parties are hereby directed to submit within 10 days from receipt of this Order
proposals and counter-proposals leading to the conclusion of the collective bargaining
agreement in compliance with aforementioned Resolution of the Office as affirmed by the
Supreme Court. xxx
ISSUE: Whether or not Secretary of Labor cannot exercise his powers under Article 263 (g)
of the Labor Code without observing the requirements of due process.
RULING: The discretion to assume jurisdiction may be exercised by the Secretary of Labor
and Employment without the necessity of prior notice or hearing given to any of the parties.
The rationale for his primary assumption of jurisdiction can justifiably rest on his own
consideration of the exigency of the situation in relation to the national interests.
xxx In labor disputes adversely affecting the continued operation of such hospitals, clinics or
medical institutions, it shall be the duty of the striking union or locking-out employer to provide
and maintain an effective skeletal workforce of medical and other health personnel, whose
movement and services shall be unhampered and unrestricted, as are necessary to insure
the proper and adequate protection of the life and health of its patients, most especially
emergency cases, for the duration of the strike or lockout. In such cases, therefore, the
Secretary of Labor and Employment is mandated to immediately assume, within twenty-four
(24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the
same or certify it to the Commission for compulsory arbitration. For this purpose, the
contending parties are strictly enjoined to comply with such orders, prohibitions and/or
injunctions as are issued by the Secretary of Labor and Employment or the Commission,
under pain of immediate disciplinary action, including dismissal or loss of employment status
or payment by the locking-out employer of backwages, damages and other affirmative relief,
even criminal prosecution against either or both of them.
The foregoing notwithstanding, the President of the Philippines shall not be precluded from
determining the industries that, in his opinion, are indispensable to the national interest, and
from intervening at any time and assuming jurisdiction over any such labor dispute in order to
settle or terminate the same.xxx
Phimco vs. Brillantes, G.R. No. 120751, March 17, 1999
FACTS: On March 9, 1995, the private respondent, Phimco Industries Labor Association
(PILA), duly certified collective bargaining representative of the daily paid workers of the
petitioner PHIMCO filed a notice of strike with the NCMB against PHIMCO, a corporation
engaged in the production of matches, after a deadlock in the collective bargaining and
negotiation. Parties failed to resolve their differences PILA (during the conciliation
conferences), composed of 352 members, staged a strike.
PHIMCO sent notice of termination to some 47 workers including several union officers.
Secretary Brillantes assumed jurisdiction over the labor dispute; issued a return-to-work
order.
Hence, petitioner files this petition.
ISSUE: whether or not the public respondent acted with grave abuse of discretion amounting
to lack or excess of jurisdiction in assuming jurisdiction over subject labor dispute.
HELD: YES, the petition is impressed with merit.
Art. 263, paragraph (g) of the Labor Code, provides:
(g) When, in his opinion, there exist 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 . . .
The Labor Code vests in the Secretary of Labor the discretion to determine what industries
are indispensable to the national interest. Accordingly, upon the determination by the
Secretary of Labor that such industry is indispensable to the national interest, he will assume
jurisdiction over the labor dispute in the said industry. 8 This power, however, is not without
any limitation.
It stressed in the case of Free telephone Workers Union vs. Honorable Minister of Labor and
Employment, et al., 10 the limitation set by the legislature on the power of the Secretary of
Labor to assume jurisdiction over a labor dispute, thus:
xxx cannot be any clearer, the coverage being limited to “strikes or lockouts adversely
affecting the national interest. 11
In this case at bar, however, the very admission by the public respondent draws the labor
dispute in question out of the ambit of the Secretary’s prerogative, to wit.
While the case at bar appears on its face not to fall within the strict categorization of cases
imbued with “national interest”, this office believes that the obtaining circumstances warrant
the exercise of the powers under Article 263 (g) of the Labor Code, as amended. 12
The private respondent did not even make any effort to touch on the indispensability of the
match factory to the national interest. It must have been aware that a match factory, though
of value, can scarcely be considered as an industry “indispensable to the national interest” as
it cannot be in the same category as “generation and distribution of energy, or those
undertaken by banks, hospitals, and export-oriented industries.” 13 Yet, the public
respondent assumed jurisdiction thereover.
To uphold the action of the public respondent under the premises would be stretching too far
the power of the Secretary of Labor as every case of a strike or lockout where there are
inconveniences in the community, or work disruptions in an industry though not indispensable
to the national interest, would then come within the Secretary’s power. It would be practically
allowing the Secretary of Labor to intervene in any Labor dispute at his pleasure.
This is precisely why the law sets and defines the standard: even in the exercise of his power
of compulsory arbitration under Article 263 (g) of the Labor Code, the Secretary must follow
the law.
FEU-NRMF vs FEU-NRMF Employees Association, G.R. No. 168362, October 12, 2006
FACTS: In 1994, petitioner FEU-NRMF (a medical institution organized and existing under
the Philippine laws), and respondent union (a legitimate labor organization and is the duly
recognized representative of the rank and file employees of petitioner), entered into a CBA
that will expire on 30 April 1996. In view of the forthcoming expiry, respondent union sent a
letter-proposal to petitioner FEU-NRMF stating their economic and non-economic proposals
for the negotiation of the new CBA.
Petitioner FEU-NRMF rejected respondent union’s demands and proposed to maintain the
same provisions of the old CBA reasoning that due to financial constraints, it cannot afford to
accede to a number of their demands. In an effort to arrive at a compromise, subsequent
conciliation proceedings were conducted before the NCMB, but the negotiation failed.
 32
Respondent union filed a Notice of Strike before NCMB on the ground of bargaining
deadlock. Union staged a strike.
Petitioner FEU-NRMF filed a Petition for the Assumption of Jurisdiction or for Certification of
Labor Dispute with the NLRC, underscoring the fact that it is a medical institution engaged in
the business of providing health care for its patients. Secretary of Labor granted the petition
and an Order assuming jurisdiction over the labor dispute was issued, thereby prohibiting any
strike or lockout and enjoining the parties from committing any acts which may exacerbate
the situation.
On September 6, 1996, Francisco Escuadra, the NLRC process server, certified that, on
September 5, 1996 at around 4:00 P.M., he attempted to serve a copy of the Assumption of
Jurisdiction Order (AJO) to the union officers but since no one was around at the strike area,
he just posted copies of the said Order at several conspicuous places within the premises of
the hospital.
Striking employees continued holding a strike until 12 September 1996, claiming that they
had no knowledge that the Secretary of Labor already assumed jurisdiction over the pending
labor dispute as they were not able to receive a copy of the AJO.
The Secretary of Labor issued another Order directing all the striking employees to return to
work and the petitioner FEU-NRMF to accept them under the same terms and conditions
prevailing before the strike. A Return to Work Agreement was executed by the disputing
parties. Subsequently, petitioner FEU-NRMF filed a case before the NLRC, contending that
respondent union staged the strike in defiance of the AJO, hence, it was illegal. LA declared
the strike illegal and allowed dismissal of union officers for conducting the strike in defiance of
the AJO. Respondent union filed an Appeal before the NLRC. NLRC affirmed in toto the
Decision of the LA. Respondent union filed MR, it was denied. Respondent union brought a
Petition for Certiorari before CA. CA granted the Petition and reversed the Resolutions of
NLRC. Petitioner filed MR but it was denied. Hence this petition.
ISSUE: Whether the service of the AJO was validly effected by the process server so as to
bind the respondent union and hold them liable for the acts committed subsequent to the
issuance of the said Order.
RULING: No. The process server resorted to posting the Order when personal service was
rendered impossible since the striking employees were not present at the strike area. This
mode of service, however, is not sanctioned by either the NLRC Revised Rules of Procedure
or the Revised Rules of Court.
The pertinent provisions of the NLRC Revised Rules of Procedure read:
“Section 6. Service of Notices and Resolutions.
(a) Notices or summons and copies of orders, shall be served on the parties to the case
personally by the Bailiff or duly authorized public officer within 3 days from receipt thereof or
by registered mail; Provided that in special circumstances, service of summons may be
effected in accordance with the pertinent provisions of the Rules of Court; Provided further,
that in cases of decisions and final awards, copies thereof shall be served on both parties
and their counsel or representative by registered mail; Provided further, that in cases where a
party to a case or his counsel on record personally seeks service of the decision upon inquiry
thereon, service to said party shall be deemed effected upon actual receipt thereof; Provided
finally, that where parties are so numerous, service shall be made on counsel and upon such
number of complainants, as may be practicable, which shall be considered substantial
compliance with Article 224(a) of the Labor Code, as amended.”
An Order issued by the Secretary of Labor assuming jurisdiction over the labor dispute is not
a final judgment for it does not dispose of the labor dispute with finality. Consequently, the
rule on service of summons and orders, and not the proviso on service of decisions and final
awards, governs the service of the Assumption of Jurisdiction Order.
Under the NLRC Revised Rules of Procedure, service of copies of orders should be made by
the process server either personally or through registered mail. However, due to the urgent
nature of the AJO and the public policy underlying the injunction carried by the issuance of
the said Order, service of copies of the same should be made in the most expeditious and
effective manner, without any delay, ensuring its immediate receipt by the intended parties as
may be warranted under the circumstances. Thus, personal service is the proper mode of
serving the AJO.
Personal service effectively ensures that the notice desired under the constitutional
requirement of due process is accomplished. If, however, efforts to find the party concerned
personally would make prompt service impossible, service may be completed by substituted
service, that is, by leaving a copy, between the hours of eight in the morning and six in the
evening, at the party’s or counsel’s residence, if known, with a person of sufficient age and
discretion then residing therein (RULE 12 of Rev Rules of Court).
Substituted service derogates the regular method of personal service. It is therefore required
that statutory restrictions for effecting substituted service must be strictly, faithfully and fully
observed. Failure to comply with this rule renders absolutely void the substituted service
along with the proceedings taken thereafter. The underlying principle of this rigid requirement
is that the person, to whom the orders, notices or summons are addressed, is made to
answer for the consequences of the suit even though notice of such action is made, not upon
the party concerned, but upon another whom the law could only presume would notify such
party of the pending proceedings.
In the case at bar, presumption of receipt of the copies of the Assumption of Jurisdiction
Order AJO could not be taken for granted considering the adverse effect in case the parties
failed to heed to the injunction directed by such Order. Defiance of the assumption and
return-to-work orders of the Secretary of Labor after he has assumed jurisdiction is a valid
ground for the loss of employment status of any striking union officer or member.
Employment is a property right of which one cannot be deprived of without due process. Due
process here would demand that the respondent union be properly notified of the Assumption
of Jurisdiction Order of the Secretary of Labor enjoining the strike and requiring its members
to return to work. Thus, there must be a clear and unmistakable proof that the requirements
prescribed by the Rules in the manner of effecting personal or substituted service had been
faithfully complied with. Merely posting copies of the AJO does not satisfy the rigid
requirement for proper service outlined by the above stated rules. Needless to say, the
manner of service made by the process server was invalid and irregular. Respondent union
could not therefore be adjudged to have defied the said Order since it was not properly
apprised thereof. Accordingly, the strike conducted by the respondent union was valid under
the circumstances.
Union of Filipro Employees vs. NLRC, G.R. No. 91025, December 19, 1990
FACTS: On June 22, 1988, the petitioner Union of the Filipro Employees, the sole and
exclusive bargaining agent of all rank-and-file employees of Nestle Philippines, (private
respondent) filed a Notice of Strike at the DOLE raising the issues of CBA deadlock and
unfair labor practice. Private respondent assailed the legal personality of the proponents of
the said notice of strike to represent the Nestle employees, before the NCMB. This
notwithstanding, the NCMB proceeded to invite the parties to attend the conciliation meetings
and to which private respondent failed to attend contending that it will deal only with a
negotiating panel duly constituted and mandated in accordance with the UFE Constitution
and By-laws. Thereafter, Company terminated from employment all UFE Union officers, and
all the members of the negotiating panel for instigating and knowingly participating in a strike
staged at the Makati, Alabang, Cabuyao and Cagayan de Oro on September 11, 1987
without any notice of strike filed and a strike vote obtained for the purpose. The union filed a
complaint for illegal dismissal. LA upheld the validity of the dismissal; NLRC en banc
affirmed. Subsequently, company concluded separate CBAs with the general membership of
the union at Cebu/Davao and Cagayan de Oro units; Assailing the validity of these
agreements, the union filed a case of ULP against the company with the NLRC-NCR
Arbitration Branch Efforts to resolve the dispute amicably were taken by the NCMB but
yielded negative result. Petitioner filed a motion asking the Secretary of Labor to assume
jurisdiction over the dispute of deadlock in collective bargaining between the parties. On
October 28, 1988, Labor Secretary Franklin Drilon “certified” to the NLRC the said dispute
between the UFE and Nestle, Philippines.. which reads as follows: xxx “The NLRC is further
directed to call all the parties immediately and resolve the CBA deadlock within twenty (20)
days from submission of the case for resolution.” Second Division of the NLRC promulgated
a resolution granting wage increase and other benefits to Nestle’s employees, ruling on non-
economic issues, as well as absolving the private respondent of the Unfair Labor Practice
charge. Petitioner finds said resolution to be inadequate and accordingly, does not agree
therewith. It filed a motion for reconsideration, denied. Hence, this petition.
ISSUE: WON WHETHER OR NOT THE SECOND DIVISION OF THE NLRC ACTED
WITHOUT JURISDICTION IN RENDERING THE ASSAILED RESOLUTION, THE SAME
BEING RENDERED ONLY BY A DIVISION OF THE PUBLIC RESPONDENT AND NOT BY
EN BANC;
HELD: This case was certified on October 28, 1988 when existing rules prescribed that, it is
incumbent upon the Commission en banc to decide or resolve a certified dispute. However,
R.A. 6715 took effect during the pendency of this case. Aside from vesting upon each division
the power to adjudicate cases filed before the Commission, said Act further provides that the
divisions of the Commission shall have exclusive appellate jurisdiction over cases within their
respective territorial jurisdiction. Section 5 of RA 6715 provides as follows: xxxx The
Commission may sit en banc or in five (5) divisions, each composed of three (3) members.
The Commission shall sit en banc only for purposes of promulgating rules and regulations
governing the hearing and disposition of cases before any of its divisions and regional
branches and formulating policies affecting its administration and operations. The
Commission shall exercise its adjudicatory and all other powers, functions and duties through
its divisions. xxxx In view of the enactment of Republic Act 6715, the aforementioned rules
requiring the Commission en banc to decide or resolve a certified dispute have accordingly
been repealed. Confirmed in Administrative Order No. 36 (Series of 1989) promulgated by
the Secretary under his delegated rule-making power. Moreover, it is to be emphasized and it
is a matter of judicial notice that since the effectivity of R.A. 6715, many cases have already
been decided by the 5 divisions of the NLRC. We find no legal justification in entertaining
petitioner’s claim considering that the clear intent of the amendatory provision is to expedite
the disposition of labor cases filed before the Commission. To rule otherwise would not be
congruous to the proper administration of justice. ACCORDINGLY, PREMISES
CONSIDERED, the petition is DISMISSED. The Resolutions of the NLRC, dated June 5,
1989 and August 8, 1989 are AFFIRMED, except insofar as the ruling absolving the private
respondent of unfair labor practice which is declared SET ASIDE.
OWWA vs. Chavez, G.R. No. 169802, June 8, 2007
FACTS: OWWA traces its beginnings to 1 May 1977, when the Welfare and Training Fund for
Overseas main objective, inter alia, of providing social and welfare services to OFW,
including insurance coverage, social work, legal and placement assistance, cultural and
remittances services, and the like.
On 1 May 1980, PD 1694 was signed into law, formalizing the operations of a comprehensive
Welfare Fund (Welfund), as authorized and created under Letter of Instructions No. 537. On
16 January 1981, PD 1809 was promulgated, amending certain provisions of PD 1694.
 33

Subsequently, EO 126 was passed renaming the Welfare Fund as the OWWA. On January
9, 2004, as there was yet no formal OWWA structure duly approved by the DBM and CSC,
the OWWA Board of Trustees passed Resolution No. 001, Series of 2004, depicting the
organizational structure and staffing pattern of the OWWA.
On March 24, 2004, DBM Secretary Emilia T. Boncodin approved the organizational structure
and staffing pattern of the OWWA. In her approval thereof, she stated that the total funding
requirements for the revised organizational structure shall be P107,546,379 for 400 positions.
On May 31, 2004, an advisory was given to the officials and employees of the OWWA that
the DBM had recently approved OWWA’s also placement staffing pattern.
On June 3, 2004, DOLE Secretary Sto. Tomas issued Administrative Order No. 171 creating
a Placement Committee to evaluate qualifications of employees, and to recommend their
appropriate placement in the new organizational chart, functional statements and staffing
pattern of the OWWA.
On June 18, 2004, DOLE Acting Secretary Imson issued Administrative Order No. 186,
Series of 2004, prescribing the guidelines on the placement of personnel in the new staffing
pattern of the OWWA. Herein respondents filed a complaint to nullify the organizational
structure with Prayer for the Issuance of a Writ of Preliminary Injunction against petitioner
OWWA and its Board of Trustees. According to the respondents, the resulting decrease in
the number of employees due to Organizational Structure will result in the constructive
dismissal of at least 110 employees. Meanwhile, the deployment of the regular central office
personnel to the regional offices will displace the said employees, as well as their families.
Respondents challenged the validity of the new organizational structure of the OWWA. In
fine, they contended that the same is null and void; hence, its implementation should be
prohibited.
The UNION it filed a notice of strike on the grounds of bargaining deadlock and ULP. During
the thirty (30) day cooling-off period, two union members were dismissed by petitioner.
Consequently, the UNION went on strike.
On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor, issued an Order
assuming jurisdiction over the labor dispute.
On March 10, 1995, the UNION filed another notice of strike, this time citing as a reason the
UNIVERSITY’s termination of the individual respondents. The UNION alleged that the
UNIVERSITY’s act of terminating the individual respondents is in violation of the Order of the
Secretary of Labor.
On March 28, 1995, the Secretary of Labor issued another Order reiterating the directives
contained in the January 23, 1995 Order. Hence, the UNIVERSITY was directed to reinstate
the individual respondents under the same terms and conditions prevailing prior to the labor
dispute.
The UNIVERSITY filed a MR. In the Order dated August 18, 1995, then Acting Secretary
Jose S. Brilliantes denied the MR, but modified the two previous Orders by adding:
Anent the Union’s Motion, we find that superseding circumstances would not warrant the
physical reinstatement of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement until the validity of their
termination is finally resolved.
Issue: WON payroll reinstatement, instead of actual reinstatement, is proper.

RTC granted respondents’ prayer for a writ of preliminary injunction. Petitioner, thru OSG and Held: With respect to the Secretary’s Order allowing payroll reinstatement instead of actual
the RTC to restrain, for the meantime, the implementation of OWWA’s reorganization to reinstatement for the individual respondents herein, an amendment to the previous Orders
prevent injury until after the main case is heard and decided. Petitioner, thru OSG filed the issued by her office, the same is usually not allowed. Article 263(g) of the Labor Code
instant petition. aforementioned states that all workers must immediately return to work and all employers
must readmit all of them under the same terms and conditions prevailing before the strike or
lockout. The phrase “under the same terms and conditions” makes it clear that the norm is
ISSUE: Whether CA erred in affirming the RTC in its grant of the assailed writ of preliminary
actual reinstatement. This is consistent with the idea that any work stoppage or slowdown in
injunction.
that particular industry can be detrimental to the national interest.
RULING: No. Section 1, Rule 58 of the Rules of Court, defines a preliminary injunction as an
In ordering payroll reinstatement in lieu of actual reinstatement, then Acting Secretary of
order granted at any stage of an action prior to the judgment or final order requiring a party or
Labor Jose S. Brillantes said:
a court, an agency or a person to refrain from a particular act or acts. It persists until it is
dissolved or until the termination of the action without the court issuing a final injunction. To
Anent the Union’s Motion, we find that superseding circumstances would not warrant the
be entitled to an injunctive writ, and an urgent and paramount necessity for the writ to prevent
physical reinstatement of the twelve (12) terminated employees. Hence, they are hereby
serious damage. A writ of evidence required to justify the issuance of a writ of preliminary
ordered placed under payroll reinstatement until the validity of their termination is finally
injunction in the hearing thereon need not be conclusive or complete.
resolved.
Preliminary injunction is merely a provisional remedy, an adjunct to the main case subject to
As an exception to the rule, payroll reinstatement must rest on special circumstances that
the latter’s outcome, the sole objective of which is to preserve the status quo until the trial
render actual reinstatement impracticable or otherwise not conducive to attaining the
court hears fully the merits of the case. The status quo usually preserved by a preliminary
purposes of the law.
injunction is the last actual, peaceable and uncontested status which preceded the actual
controversy. The status quo ante litem is the state of affairs which is existing at the time of
The “superseding circumstances” mentioned by the Acting Secretary of Labor no doubt refer
the filing of the case. The trial court must not make use of its injunctive power to alter such
to the final decision of the panel of arbitrators as to the confidential nature of the positions of
status. In the case at bar, the RTC did not maintain the status quo when it issued the writ of
the twelve private respondents, thereby rendering their actual and physical reinstatement
preliminary injunction. Rather, it effectively restored the situation prior to the status quo, in
impracticable and more likely to exacerbate the situation. The payroll reinstatement in lieu of
effect, disposing the issue of the main case without trial on the merits. What was preserved
actual reinstatement ordered in these cases, therefore, appears justified as an exception to
by the RTC was the state OWWA, and the subsequent administrative orders pursuant to its
the rule until the validity of their termination is finally resolved. This Court sees no grave
passing. The RTC forgot that what is imperative in preliminary injunction cases is that the
abuse of discretion on the part of the Acting Secretary of Labor in ordering the same.
writ cannot be effectuated to establish new relations between the parties.
Furthermore, the issue has not been raised by any party in this case.
Courts should avoid issuing a writ of preliminary injunction which would in effect dispose of
Manila Diamond Hotel Employees’ Union vs CA, G.R.No. 140518, December 16, 2004
the main case without trial. In this case, the RTC also did not maintain the status quo but
Facts: The Union filed a petition for a certification election, which was dismissed by the
restored the landscape before the implementation of OWWA’s reorganization. In thus
DOLE. Despite the dismissal of their petition, the Union sent a letter to the Hotel informing the
issuing by the trial court. What was done by the RTC was quite simply a disposition of the
latter of its desire to negotiate for a collective bargaining agreement. The Hotel, however,
case without trial. Furthermore, we find that the RTC similarly prejudged the validity of the
refused to negotiate with the Union, citing the earlier dismissal of the Union’s petition for
issuances released by the OWWA Board of Trustees, as well as the other governmental
certification by DOLE.
bodies, which approved the organizational structure and staffing pattern of the OWWA. This
Court is not convinced that respondents were able to show a clear and unmistakable legal
Failing to settle the issue, the Union staged a strike against the Hotel. Numerous
right to warrant their entitlement to the writ. A mere blanket allegation that they are all
confrontations followed, further straining the relationship between the Union and the Hotel.
officers and employees of the OWWA without a showing of how they stand to be directly
The Hotel claims that the strike was illegal and dismissed some employees for their
injured a right in esse. There was no showing that Respondents are the employees who are
participation in the allegedly illegal concerted activity. The Union, on the other hand, accused
in grave danger of being displaced due to the reorganization. Injunction is not a remedy to
the Hotel of illegally dismissing the workers.
protect or enforce contingent, abstract, or future rights; it will not issue to protect aright not in
esse and which may never arise, or to restrain an action which did not give rise to a cause of
A Petition for Assumption of Jurisdiction under Article 263(g) of the Labor Code was later filed
action. Indeed, the question as to the validity of the OWWA reorganization remains the
by the Union before the Secretary of Labor. Thereafter, Secretary of Labor Trajano issued an
subject in the main case pending before the trial court. Its annulment is outside the realm of
Order directing the striking officers and members of the Union to return to work within twenty-
the instant Petition.
four (24) hours and the Hotel to accept them back under the same terms and conditions
prevailing prior to the strike.
Univ. of the Immaculate Conception vs. Sec. of Labor, G.R. Nos. 151379, Jan 14, 2005
Facts: This case stemmed from the collective bargaining negotiations between petitioner
After receiving the above order the members of the Union reported for work, but the Hotel
University of Immaculate Concepcion, Inc. (UNIVERSITY) and respondent The UIC Teaching
refused to accept them and instead filed a Motion for Reconsideration of the Secretary’s
and Non- Teaching Personnel and Employees Union (UNION). The UNION, as the certified
Order.
bargaining agent of all rank and file employees of the UNIVERSITY, submitted its collective
bargaining proposals to the latter on February 16, 1994. However, one item was left
Acting on the motion for reconsideration, then Acting Secretary of Labor Español modified the
unresolved and this was the inclusion or exclusion of some positions in the scope of the
one earlier issued by Secretary Trajano and instead directed that the strikers be reinstated
bargaining unit.
only in the payroll.
 34

Issue: WON payroll reinstatement is proper in lieu of actual reinstatement under Article
263(g) of the Labor Code.

Held: Payroll reinstatement in lieu of actual reinstatement is not sanctioned under the
provision of the said article.

The Court noted the difference between UST vs. NLRC and the instant case. In UST case
the teachers could not be given back their academic assignments since the order of the
Secretary for them to return to work was given in the middle of the first semester of the
academic year.

The NLRC was, therefore, faced with a situation where the striking teachers were entitled to a
return to work order, but the university could not immediately reinstate them since it would be
impracticable and detrimental to the students to change teachers at that point in time.

In the present case, there is no similar compelling reason that called for payroll reinstatement
as an alternative remedy. A strained relationship between the striking employees and
management is no reason for payroll reinstatement in lieu of actual reinstatement.

Under Article 263(g), all workers must immediately return to work and all employers must
readmit all of them under the same terms and conditions prevailing before the strike or
lockout.

The Court pointed out that the law uses the precise phrase of “under the same terms and
conditions,” revealing that it contemplates only actual reinstatement. This is in keeping with
the rationale that any work stoppage or slowdown in that particular industry can be inimical to
the national economy.

The Court reiterates that Article 263(g) was not written to protect labor from the excesses of
management, nor was it written to ease management from expenses, which it normally incurs
during a work stoppage or slowdown. This law was written as a means to be used by the
State to protect itself from an emergency or crisis. It is not for labor, nor is it for management.

Porcello vs. Rudolf Lietz, G.R. No. 196539, October 10, 2012
Pacific Consultants vs. Schonfeld, G.R. No. 166920, February 19, 2007
Balite vs. SS Ventures International, Inc, G.R. No. 195109, February 4, 2015
SMART Comm vs. Solidum, G.R. Nos. 197763/197836, December 7, 2015
Milan vs. NLRC, G.R. No. 202961, February 4, 2015
Michelin Asia Application Center, Inc. vs Ortiz, G.R. No. 189861, November 19, 2014
Baronda vs. Court of Appeals, G.R. No. 161006, October 14, 2015
Montero vs. Times Transportation, G.R. No. 190828, March 16, 2015
One Shipping Corp vs. Peñafiel, G.R. No. 192406, January 21, 2015