-----------------------------------------------
Upon
CASE 091 Faculty Association of Mapua vs. Mapua
G.R. No. 164060
June 15, 2007
Digest by: Angelo Lopez
-----------------------------------------------
Topic: Bargaining Procedure – Duty to Bargain
Ponente: J. Quisimbing
Facts:
1. Private respondent Mapua Institute of Technology (MIT) hired
Arthur Andersen to develop a faculty ranking and
compensation system. On January 29, 2001, in the 5th CBA
negotiation meeting, MIT presented the new faculty ranking
instrument to petitioner Faculty Association of Mapua Institute
of Technology (FAMIT). The latter agreed to the adoption and
implementation of the instrument, with the reservation that
there should be no diminution in rank and pay of the faculty
members. On April 17, 2001, FAMIT and MIT entered into a
new CBA effective June 1, 2001.4 It incorporated the new
ranking for the college faculty in Section 8 of Article V of
CBA.
2. When the CBA took effect, the Vice President for Academic
Affairs issued a memorandum to all deans and subject chairs to
evaluate and re-rank the faculty under their supervision using
the new ranking instrument. Eight factors were to be
considered and given their corresponding weights/points
according to levels attained per factor. Among these were: (1)
educational attainment; (2) professional honors received; (3)
relevant training, etc.
3. After a month, MIT called FAMIT’s attention to what it
perceived to be flaws or omissions in the CBA signed by the
parties. MIT requested for an amendment of CBA annexes.
4. FAMIT rejected the proposal. It said that these changes would
constitute a violation of the ratified 2001 CBA and result in the
diminution of rank and benefits of FAMIT college faculty. It
argued that the proposed amendment in the ranking system for
the college faculty revised the point ranges earlier agreed upon
by the parties and expands the 19 faculty ranks to 23.
learning of the changes, FAMIT opposed the formula.
5. FAMIT brought the matter to NCMB. It ruled against Mapua.
CA reversed.
Issue: WON MIT’s new proposal, regarding faculty ranking and
evaluation, lawful and consistent with the ratified CBA
Ruling:
No, as observed by Office of the Voluntary Arbitrators, the evaluation
system differs from past evaluation practices (e.g., those that give
more weight to tenure and faculty load) such that the system can lead
to a demotion in rank for a faculty member.
Noteworthy, Article 253 of the Labor Code states:
ART. 253. Duty to bargain collectively when there exists a
collective bargaining agreement – When there is a collective
bargaining agreement, the duty to bargain collectively shall
also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve
a written notice to terminate or modify the agreement at least
sixty (60) days prior to its expiration date. It shall be the duty
of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new
agreement is reached by the parties.
Until a new CBA is executed by and between the parties, they are
duty-bound to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement. The law
does not provide for any exception nor qualification on which
economic provisions of the existing agreement are to retain its force
and effect. Therefore, it must be understood as encompassing all the
terms and conditions in the said agreement.
The CBA during its lifetime binds all the parties. The provisions of the
CBA must be respected since its terms and conditions "constitute the
law between the parties." Those who are entitled to its benefits can
invoke its provisions. In the event that an obligation therein imposed is
not fulfilled, the aggrieved party has the right to go to court and ask
redress.14 The CBA is the norm of conduct between petitioner and
private respondent and compliance therewith is mandated by the
express policy of the law.

Dispositive: Petition is Granted.

Doctrine:
Until a new CBA is executed by and between the parties, they are
duty-bound to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement. The law
does not provide for any exception nor qualification on which
economic provisions of the existing agreement are to retain its force
and effect. Therefore, it must be understood as encompassing all the
terms and conditions in the said agreement.
The CBA during its lifetime binds all the parties. The provisions of the
CBA must be respected since its terms and conditions "constitute the
law between the parties."

--------------------------------------------------
CASE 092 Mactan Workers Union v. Aboitiz
GR NO./ SCRA NO. L-30241
Date June 30, 1972
Digest by: Anna Beatrice S.Tarrosa
--------------------------------------------------
Petitioner: Mactan Workers Union And Tomas Ferrer, As President
Thereof
Respondent: DON RAMON ABOITIZ, President, Cebu Shipyard &
Engineering Works, Inc.; EDDIE LIM, as Treasurer; JESUS DIAGO,
Superintendent of the aforesaid corporation; WILFREDO VIRAY, as
Resident Manager of the Shipyard & Engineering Works, Inc.; and the
CEBU SHIPYARD & ENGINEERING WORKS, INC., defendants-
appellees; ASSOCIATION LABOR UNION, intervenor-appellant.
Ponente: FERNANDO, J
Topic: D. The Collective Bargaining Agreement
Beneficiaries
FACTS:
1. Defendant Cebu Shipyard & Engineering Works, Inc. is employing
laborers and employees belonging to two rival labor unions. Seventy-
two of these employees or laborers whose names appear in the
complaint are affiliated with the Mactan Workers Union while the rest
are members of the intervenor Associated Labor Union. The defendant
Cebu Shipyard & Engineering Works, Inc. and the Associated Labor
Union entered into a 'Collective Bargaining Agreement' ... the pertinent
part of which, agrees to give a profit-sharing bonus to its employees
and laborers to be taken from ten per cent (10%) of its net profits or
net income derived from the direct operation of its shipyard and shop
in Lapulapu City and after deducting the income tax and the bonus
annually given to its General Manager and the Superintendent and the
members of the Board of Directors and Secretary of the Corporation,
to be payable in two (2) installments, the first installment being
payable in March and the second installment in June, each year out of
the profits in agreement. In the computation of said ten per cent (10%)
to [be] distributed as a bonus among the employees and laborers of the
[Company] in proportion to their salaries or wages, only the income
derived by the [Company] from the direct operation of its shipyard and
shop in Lapulapu City, as stated herein-above-commencing from the
earnings during the year 1964, shall be included. Said profit-sharing
bonus shall be paid by the [Company] to [Associated Labor Union] to
be delivered by the latter to the employees and laborers concerned and
it shall be the duty of the Associated Labor Union to furnish and
deliver to the [Company] the corresponding receipts duly signed by the
laborers and employees entitled to receive the profit-sharing bonus
within a period of sixty (60) days from the date of receipt by [it] from
the [Company] of the profit-sharing bonus
2.In compliance with the said CBA 1965 the defendant Cebu Shipyard
& Engineering Works, Inc. delivered to the ALU for distribution to the
laborers or employees working with the defendant corporation to the
profit-sharing bonus corresponding to the first installment for the year
1965. Again in June 1965 the defendant corporation delivered to the
ALU in the profit-sharing bonus corresponding to the second
installment for 1965. The members of the Mactan Workers Union
failed to receive their shares in the second installment of bonus
because they did not like to go to the office of the ALU to collect
their shares. In accordance with the terms of the collective bargaining
after 60 days, the uncollected shares of the plaintiff union members
was returned by the ALU to the defendant corporation. At the
same time the defendant corporation was advised by the ALU not to
deliver the said amount to the members of the Mactan Workers Union
unless ordered by the Court, otherwise the ALU will take such step to
protect the interest of its members. Because this warning given by the
intervenor union the defendant corporation did not pay to the plaintiffs
the sum of P4,035.82 which was returned by the Associated Labor
Union, but instead, deposited the said amount with the Labor
Administrator. For the recovery of this amount this case was filed with
the lower court.
CFI- ordering the defendants to deliver to the Associated Labor Union
the sum of P4,035.82 for distribution to the employees of the
defendant corporation who are members of the Mactan Workers
Union; and ordering the intervenor Associated Labor Union, Union.
immediately after receipt of the said amount, to pay the members of
the Mactan Workers Union their corresponding shares in the profit-
sharing bonus for the second installments for the year 1965." 5 DOCTRINE: The labor union who won as sole bargaining agent of
the employees does not act for its members alone. It represents all the
ISSUE/S: employees in such a bargaining unit. Furthermore, what is entitled to
1. WON the ALU as the bargaining agent represents the whole protection is labor, not the labor organization. The latter are merely
bargaining unit or just it members instrumentalities through which their welfare may be promoted and
fostered.
RULING: Whole bargaining unit. The terms and conditions of a
collective bargaining contract constitute the law between the parties.
Those who are entitled to its benefits can invoke its provisions. In the
event that an obligation therein imposed is not fulfilled, the aggrieved
party has the right to go to court for redress. Nor does it suffice as a
defense that the claim is made on behalf of non-members of intervenor
Associated Labor Union, for it is a well-settled doctrine that the
benefits of a collective bargaining agreement extend to the laborers
and employees in the collective bargaining unit, including those who
do not belong to the chosen bargaining labor organization. Any other
view would be a discrimination on which the law frowns. It is
appropriate that such should be the case. the right to be the exclusive
representative of all the employees in an appropriate collective
bargaining unit is vested in the labor union 'designated or selected' for
such purpose 'by the majority of the employees' in the unit
concerned." 9 If it were otherwise, the highly salutory purpose and
objective of the collective bargaining scheme to enable labor to secure
better terms in employment condition as well as rates of pay would be
frustrated insofar as non-members are concerned, deprived as they are
of participation in whatever advantages could thereby be gained. The
labor union that gets the majority vote as the exclusive bargaining
representative does not act for its members alone. It represents all the
employees in such a bargaining unit. It is not to be indulged in any
attempt on its part to disregard the rights of non-members. Yet that is
what intervenor labor union was guilty of, resulting in the complaint
filed on behalf of the laborers, who were in the ranks of plaintiff
Mactan Labor Union.

DISPOSITIVE: In favor of Petitioner. The decision of the lower court

of February 22, 1968 is affirmed. Costs against Associated Labor
--------------------------------------------------
093 Norkis Free and Independent Workers Union v. Norkis
Trading Co.
G.R. No. 157098
June 30, 2005
Digested by: Carl Au
--------------------------------------------------
Petitioner: NORKIS FREE AND INDEPENDENT WORKERS
UNION
Respondents: NORKIS TRADING COMPANY
Ponente: PANGANIBAN, J.
FACTS:
1. On January 27, 1998, a Memorandum of Agreement was
forged between the parties wherein Norkis Trading Corp shall
grant a salary increase to all regular and permanent employees
as follows:
a. Ten pesos per day increase effective August 1, 1997;
b. Ten pesos per day increase effective August 1, 1998. On
March 10, 1998
2. The RTWPB of Region VII issued Wage Order ROVII-06
which established the minimum wage of P165.00, by
mandating a wage increase of five (P5.00) pesos per day
beginning April 1, 1998, thereby raising the daily minimum
wage to P160.00 and another increase of five (P5.00) pesos per
day beginning October 1, 1998, thereby raising the daily
minimum wage to P165.00 per day.
3. In accordance with the Wage Order and Section 2, Article XII
of the CBA, petitioner demanded an across-the-board increase.
4. Respondent, however, refused to implement the Wage Order,
insisting that since it has been paying its workers the new
minimum wage of P165.00 even before the issuance of the
Wage Order, it cannot be made to comply with said Wage
Order.
ISSUE: Whether respondent violated the CBA in its refusal to grant its
employees an across-the-board increase as a result of the passage of
Wage Order No. ROVII-06?
HELD: No. The employees are not entitled to the claimed salary
increase, simply because they are not within the coverage of the Wage
Order, as they were already receiving salaries greater than the
minimum fixed by the Order.
We cannot sustain petitioner, even if we assume that its contention is
right and that the implementation of any government-decreed increase
under the CBA is absolute.
The CBA is no ordinary contract, but one impressed with public
interest. Therefore, it is subject to special orders on wages, such as
those issued by the RTWPB. the implementation of a wage increase
for respondents employees should be controlled by the stipulations of
Wage Order No. ROVII-06.
Concededly, there is an increase necessarily resulting from raising the
minimum wage level, but not across-the-board. Indeed, a “double
burden” cannot be imposed upon an employer except by clear
provision of law. It would be unjust, therefore, to interpret Wage Order
No. ROVII-06 to mean that respondent should grant an across-the-
board increase. Such interpretation of the Order is not sustained by its
text
DOCTRINE: The CBA is no ordinary contract, but one impressed
with public interest. Therefore, it is subject to special orders on wages,
such as those issued by the RTWPB
DISPOSITIVE: WHEREFORE, the Petition is DENIED, and the
assailed Decision and Resolution AFFIRMED. Costs against
petitioner.

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CASE 094 University of San Agustin vs. University of San Agustin
Employees Union-FFW
G.R. No. 177594 | July 23, 2009
Digest by: Kayelyn Lat
---------------------------------------------------------------------------------
Petitioner: University of San Agustin, Inc.
Respondent: University of San Agustin Employees Union-FFW
Ponente: J. Carpio-Morales
Topic: The CBA – Interpretation, Administration and Enforcement
FACTS:
1. July 27, 2000, petitioner forged with the University of San
Agustin Employees Union-FFW (respondent) a Collective
Bargaining Agreement (CBA) effective for five (5) years or
from July, 2000 to July, 2005.
2. Among other things, the parties agreed to include a provision
on salary increases based on the incremental tuition fee
increases or tuition incremental proceeds (TIP) and pursuant to
Republic Act No. 6728, The Tuition Fee Law.
3. It appears that for the School Year 20012002, the parties
disagreed on the computation of the salary increases.
4. Respondent:
- refused to accept petitioner’s proposed across-the-board
salary increase of P1, 500 per month and its subtraction
from the computation of the TIP of the scholarships and
tuition fee discounts it grants to deserving students and its
employees and their dependents
- likewise rejected petitioner’s interpretation of the term
“salary increases” as referring not only to the increase in
salary but also to corresponding increases in other benefits
- the provision in question referred to “salary increases”
alone, hence, the phrase “P1, 500 or 80% of the TIP,
whichever is higher,” should apply only to salary increases
and should not include other increases in benefits received
by employees
5. resort to the existing grievance machinery having failed, the
parties agreed to submit the case to voluntary arbitration.
6. VA Arriola of DOLE-NCMB in favor of respondent:
- The salary increases shall be paid out of 80% of the TIP
should the same be higher than P1, 500
- The existing CBA is the law between the parties, and as it
is not contrary to law, morals and public policy and it
having been shown that the parties entered into it
voluntarily, it should be respected.
- As to petitioner’s deduction of scholarship grants and
tuition fee discounts from the TIP, it is invalid, petitioner
having waived the collection thereof when it granted the
same – a waiver which its employees had nothing to do
with – and the employees should not be made to bear or
suffer from the burden
7. Petitioner filed MR; denied
8. It appealed to CA
9. CA:
- the questioned CBA provision is clear and unambiguous,
hence, it should be interpreted literally to mean that 80% of
the TIP or P1,500, whichever is higher, is to be allotted for
the employees’ salary increases
- by its very nature, the TIP excludes any sum which
petitioner did not obtain or realize, hence, it is only fair that
the same be deducted.
- The appellate court noted, however, that as to scholarship
grants and tuition fee discounts which are fully or partly
subsidized by the government or private institutions and
individuals, petitioner should include them in the TIP
computation.
10. Petitioner’s Motion for Partial Reconsideration of the CA’s
decision on the interpretation of the CBA provision, as well as
 respondent’s MR of the decision on computation of the TIP,
was denied.
11. Hence, the present petition.
Petitioner:
- like the VA, the appellate court erred in interpreting the
questioned provision of the abovequoted Sec. 3, Art. VIIII of
the CBA, since Sec. 5(2) of R.A. 6728 only mandates that 70%
of the TIP of academic institutions is to be set aside for
employees’ salaries, allowances and other benefits, while at
least 20% thereof is to go to the improvement, modernization
of buildings, equipment, libraries and other school facilities.
- the interpretation of the provision that 80% of the TIP should
go to salary increases alone, to the exclusion of other benefits,
is contrary to R.A. 6728
Respondent:
- petitioner never claimed that its consent to the CBA was
vitiated with fraud, mistake or intimidation, and that petitioner
has always been aware of the provisions of R.A. 6728 and was
even assisted by its accountants, internal and external legal
counsels during the CBA negotiations, hence, it can not now
renege on its commitment under Sec. 3. Art. VIII of the CBA.
ISSUE: Whether or not the CBA provision only applies to salary
increases
HELD: YES
RATIO:
It is a familiar and fundamental doctrine in labor law that the CBA is
the law between the parties and they are obliged to comply with its
provisions. If the terms of a contract, in this case the CBA, are clear
and leave no doubt upon the intention of the contracting parties, the
literal meaning of their stipulations shall control.
A reading of the abovequoted provision of the CBA shows that the
parties agreed that 80% of the TIP or at the least the amount of P1,500
is to be allocated for individual salary increases.
The CBA does not speak of any other benefits or increases which
would be covered by the employees’ share in the TIP, except salary
increases. The CBA reflects the incorporation of different provisions to
cover other benefits such as Christmas bonus (Art. VIII, Sec. 1),
service award (Art. VIII, Sec. 5), leaves (Article IX), educational
benefits (Sec. 2, Art. X), medical and hospitalization benefits (Secs. 3,
4 and 5, Art. 10), bereavement assistance (Sec. 6, Art. X), and signing
bonus (Sec. 8, Art. VIII), without mentioning that these will likewise
be sourced from the TIP. Thus, petitioner’s belated claim that the 80%
TIP should be taken to mean as covering ALL increases and not
merely the salary increases as categorically stated in Sec. 3, Art. VIII
of the CBA does not lie.
In the present case, petitioner could have, during the
CBA negotiations, opposed the inclusion of or renegotiated the
provision allotting 80% of the TIP to salary increases alone, as it was
and is not under any obligation to accept respondent’s demands hook,
line and sinker.
The records are thus bereft of any showing that petitioner had made it
clear during the CBA negotiations that it intended to source not only
the salary increases but also the increases in other employee benefits
from the 80% of the TIP. Absent any proof that petitioner’s consent
was vitiated by fraud, mistake or duress, it is presumed that it entered
into the CBA voluntarily, had full knowledge of the contents thereof,
and was aware of its commitments under the contract.
DISPOSITIVE PORTION: Petitioner WON.
DOCTRINE: It is a familiar and fundamental doctrine in labor law
that the CBA is the law between the parties and they are obliged to
comply with its provisions. If the terms of a contract, in this case the
CBA, are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of their stipulations shall
control.
 Article XI, Section 1 (e) (5) of the May 2, 1989 Collective Bargaining
------------------------------------------------------------------------- Agreement 8between petitioner company and the union states:
CASE 095 Pantranco North Express, Inc. v. NLRC
GR No. 95940 Section 1. The COMPANY shall formulate a retirement plan with the
Date: July 24, 1996 following main features:
Digest by: Jen Balmeo
------------------------------------------------------------------------- (e) The COMPANY agrees to grant the retirement benefits herein
provided to regular employees who may be separated from the
Petitioner: Pantranco North Express COMPANY for any of the following reasons:
Respondent: NLRC and Suiga
Ponente: J. Panganiban (5) Upon reaching the age of sixty (60) years or upon completing
Topic: Interpretation, Administration and Enforcement nature. twenty-five (25) years of service to the COMPANY, whichever comes
first, and the employee shall be compulsory retired and paid the
Facts: retirement benefits herein provided."

Private respondent was hired by petitioner in 1964 as a bus conductor. The said Code provides: Art. 287. Retirement . — Any employee may
He eventually joined the Pantranco Employees Association-PTGWO. be retired upon reaching the retirement age established in the
Collective Bargaining Agreement or other applicable employment
He continued in petitioner's employ until August 12, 1989, when he contract. In case of retirement, the employee shall be entitled to
was retired at the age of fifty-two (52) after receive such retirement benefits as he may have earned under existing
having rendered twenty five years' service. The basis of his retirement laws and any collective bargaining or other agreement."
was the compulsory retirement provision of the collective bargaining
agreement between the petitioner and the aforenamed union. The Court agrees with petitioner and the Solicitor General. Art. 287 of
the Labor Code as worded permits employers and employees to fix the
On February 1990, private respondent filed a applicable retirement age at below60 years. Moreover, providing for
complaint for illegal dismissal against petitioner with NLRC. early retirement does not constitute diminution
The complaint was consolidated with two other cases of illegal of benefits. In almost all countries today, early retirement, i.e., before a
dismissal having similar facts and issues, filed by other employees, ge 60, isconsidered a reward for services rendered since it enables an
non-union members. employee to reap the fruits of his labor — particularly retirement
benefits, whether lump-sum or otherwise — at an earlier age, when
Issue: WON the CBA stipulation on compulsory retirement after said employee, in presumably better physical and mental condition,
twenty-five years of service is legal and enforceable. can enjoy them better and longer.

Held: The CBA stipulation is legal and enforceable.
The bone of contention in this case is the provision on compulsory reti
rement after 25years of service.
As a matter of fact, one of the advantages of early retirement is that the
corresponding retirement benefits, usually consisting of a substantial
cash windfall, can early on be put to productive and profitable uses by
way of income-generating investments, thereby affording a more
significant measure of financial security and independence for the
retiree who, up till then, had to contend with life's vicissitudes within
the parameters of his fortnightly or weekly wages. Thus we are now
seeing many CBAs with such early retirement provisions. And the
same cannot be considered a diminution of employment benefits.
Being a product of negotiation, the CBA between the petitioner and the
union intended the provision
on compulsory retirement to be beneficial to the employees-union
members, including herein private respondent. When private
respondent ratified the CBA with the union, he not only agreed to the
CBA but also agreed to conform to and abide by its provisions. Thus,
it cannot be said that he was illegally dismissed when the CBA
provision on compulsory retirement was applied to his case.
Incidentally, we call attention to Republic Act No. 7641, known
as "The Retirement Pay Law", which went into effect on January 7,
1993. Although passed many years after the
compulsory retirement of herein
private respondent, nevertheless, the said Statute sheds light on the
present discussion when it amended
DISPOSITIVE: Pantranco won. Petition granted.
DOCTRINE: A CBA incorporates the agreement reached after
negotiations between employer and bargaining agent with respect to
terms and conditions of employment. A CBA is not an ordinary
contract. "(A)s a labor contract within the contemplation of Article
1700 of the Civil Code of the Philippines which governs the relations
between labor and capital, (it) is not merely contractual in nature but
impressed with public interest, thus it must yield to the common
good. As such, it must be construed liberally rather than narrowly and
technically, and the courts must place a practical and realistic
construction upon it, giving due consideration to the context in which
it is negotiated and purpose which it is intended to serve."

Art. 287 of the Labor Code, to make it read as follows: Retirement . —

Any employee may be retired upon reaching the retirement
age establish in the collective bargaining agreement or other applicable
employment contract. 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”.

The aforequoted provision makes clear the intention and spirit of the la
w to give employers and employees a free hand to determine and agree
upon the terms and conditions of retirement. Providing in a CBA for
compulsory retirement of employees after twenty-five (25) years of
service is legal and enforceable so long as the parties agree to
be governed by such CBA. The law presumes that employees know
what they want and what is good for them absent any showing that
fraud or intimidation was employed to secure their consent thereto.

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CASE 096 DOLE PHILS. INC. VS. PAWIS NG MAKABAYANG
OBRERO
G.R. No. 146650 January 13, 2003
Digested by: Lanz Olives
--------------------------------------------------------------------
Petitioner: DOLE PHILIPPINES, INC.
Respondents: PAWIS NG MAKABAYANG OBRERO (PAMAO-
NFL)
Nature of the Case: a petition for review under rule 45
Ponente: Corona, J.
TOPIC: The Collective Bargaining Agreement; Nature
FACTS:
The petitioner and the respondent executed a CBA for the period
starting February 1996 to February 2001. Under the bonuses and
allowances section of the said CBA, a P10 meal allowance shall be
given to employees who render at least 2 hrs of overtime work and
free meals shall be given after 3 hours of actual overtime work.
Pursuant to this provision, some departments of granted free meals
after exactly 3 ours of work. However, other departments granted free
meals only after more than 3 hours of overtime work.
The respondent filed a complaint against Dole, saying that free meals
should be granted after exactly 3 hrs of overtime work, not after more
than 3 hrs. The parties agreed to settle the dispute to voluntary
arbitration. It was decided in favor of the respondent, directing the
petitioner to grant free meals after exactly 3 hrs of overtime work. CA
affirmed.
ISSUE:
(1) Whether or not free meals should be granted after exactly 3 hrs of
work
(2) Whether or not the petitioner has the right to determine when to
grant free meals and its conditions
RULING:
(1) YES. The same meal allowance provision is found in their
previous CBAs, the 1985-1988 CBA and the 1990-1995 CBA.
However, it was amended in the 1993-1995 CBA, by changing the
phrase “after 3 hrs of overtime work” to “after more than 3 hrs of
overtime work”. In the 1996-2001 CBA, the parties had to negotiate
the deletion of the said phrase in order to revert to the old provision.
Clearly, both parties had intended that free meals should be given after
exactly 3 hrs of overtime work.
The disputed provision is clear and unambiguous, hence the literal
meaning shall prevail. No amount of legal semantics can convince the
Court that “after more than” means the same as “after”.
(2) NO. The exercise of management prerogative is not unlimited. It is
subject to the limitations provided by law. In this case, there was a
CBA, and compliance therewith is mandated by the express policy of
the law.
DISPOSITIVE: PAWIS NG MAKABAYANG OBRERO won.
DOCTRINE:
The exercise of management prerogative is not unlimited. It is subject
to the limitations found in law, a collective bargaining agreement or
the general principles of fair play and justice.9 This situation
constitutes one of the limitations. The CBA is the norm of conduct
between petitioner and private respondent and compliance therewith is
mandated by the express policy of the law.
--------------------------------------------------
097 USAEU-FFW V. CA
GR NO. 169632
March 28, 2006
Digest by: Metha Dawn H. Orolfo
--------------------------------------------------
Petitioner: University Of San Agustin Employees’ Union-Ffw
(USAEU-FFW), And Individual Union Officers Theodore Neil Lasola,
Merlyn Jara, Julius Mario, Flaviano Manalo, Rene Cabalum,
Herminigildo Calzado, Ma. Luz Calzado, Ray Anthony Zuñiga,
Rizalene Villanueva, Rudante Dolar, Rover John Tavarro, Rena Lete,
Alfredo Goriona, Ramon Vacante And Maximo Montero,
Respondent: CA and And University Of San Agustin
Ponente: Garcia
Topic: Interpretation, Administration and Enforcement of CBA
FACTS:
1. Petitioner Union is the duly recognized collective bargaining unit
for teaching and non-teaching rank-and-file personnel of the
University while the other individual petitioners are its officers.
2. On July 27, 2000, the parties entered into a 5-year CBA which,
among other things, provided that the economic provisions thereof
shall have a period of three (3) years or up to 2003.
Complementary to said provisions is Section 3 of Article VIII of
the CBA providing for salary increases for School Years (SY)
2000-2003, such increase to take the form of either a lump sum or
a percentage of the tuition incremental proceeds (TIP).
3. The CBA contained a "no strike, no lockout" clause and a
grievance machinery procedure to resolve management-labor
disputes, including a voluntary arbitration mechanism should the
grievance committee fail to satisfactorily settle such disputes.
4. Pursuant to the CBA, the parties commenced negotiations for the
economic provisions for the remaining two years, i.e., SY2003-
2004 and SY2004-2005. During the negotiations, the parties could
not agree on the manner of computing the TIP, thus the need to
undergo preventive mediation proceedings before the National
Conciliation and Mediation Board (NCMB), Iloilo City.
5. The computation of TIP was not resolved. This development
prompted the Union to declare a bargaining deadlock grounded on
the parties’ failure to arrive at a mutually acceptable position on the
manner of computing the seventy percent (70%) of the net TIP to
be allotted for salary.
6. Thereafter, the Union filed a Notice of Strike before the NCMB
which was expectedly opposed by the University in a Motion to
Strike Out Notice of Strike and to Refer the Dispute to Voluntary
Arbitration, invoking the "No strike, no lockout" clause of the
parties’ CBA. The NCMB, however, failed to resolve the
University’s motion.
7. The Union staged a strike. At 6:45 a.m. of the same day, Sheriffs
Francisco L. Reyes and Rocky M. Francisco had arrived at San
Agustin University to serve the AJO on the Union. At the main
entrance of the University, the sheriffs saw some elements of the
Union at the early stages of the strike. There they met Merlyn Jara,
the Union’s vice president, upon whom the sheriffs tried to serve
the AJO, but who, after reading it, refused to receive the same,
citing Union Board Resolution No. 3 naming the union president
as the only person authorized to do so. The sheriffs explained to
Ms. Jara that even if she refused to acknowledge receipt of the
AJO, the same would be considered served. Sheriff Reyes further
informed the Union that once the sheriffs post the AJO, it would be
considered received by the Union.
8. At approximately 8:45 a.m., the sheriffs posted copies of the AJO
at the main gate of San Agustin University, at the main entrance of
its buildings and at the Union’s office inside the campus. At 9:20
a.m., the sheriffs served the AJO on the University.
9. Notwithstanding the sheriffs’ advice as to the legal implication of
the Union’s refusal to be served with the AJO, the Union went
ahead with the strike.
10. University filed a Petition to Declare Illegal Strike and Loss of
Employment Status7 at the National Labor Relations Commission
(NLRC) Sub-regional Arbitration Branch No. VI in Iloilo City.
ISSUE: WON the CBA clause on no strike no lockout was violated?
RULING: YES.
When the SOLE assumes jurisdiction over a labor dispute in an
industry indispensable to national interest or certifies the same to the
NLRC for compulsory arbitration, such assumption or certification
shall have the effect of automatically enjoining the intended or
impending strike or lockout. Moreover, if one had already taken place,
all striking workers shall immediately return to work and the employer
shall immediately resume operations and readmit all workers under the
same terms and conditions prevailing before the strike or lockout. In
Trans-Asia Shipping Lines, Inc., et al. vs. CA, et al., the Court
declared that when the Secretary exercises these powers, he is granted
great breadth of discretion in order to find a solution to a labor dispute.
The most obvious of these powers is the automatic enjoining of an
impending strike or lockout or the lifting thereof if one has already
taken place. Assumption of jurisdiction over a labor dispute, or 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.
In this case, the AJO was served at 8:45 a.m. of September 19, 2003.
The strikers then should have returned to work immediately. However,
they persisted with their refusal to receive the AJO and waited for their
union president to receive the same at 5:25 p.m. The Union’s defiance
of the AJO was evident in the sheriff’s report:
We went back to the main gate of the University and there NCMB
Director Dadivas introduced us to the Union lawyer, Atty. Mae
Lacerna a former DOLE Regional Director. Atty. Lacerna however
refused to be officially served the Order again pointing to Board
Resolution No. 3 passed by the Union officers. Atty. Lacerna then
informed the undersigned Sheriffs that the Union president will accept
the Order at around 5:00 o’clock in the afternoon. Atty. Lacerna told
the undersigned Sheriff that only when the Union president receives
the Order at 5:00 p.m. shall the Union recognize the Secretary of
Labor as having assumed jurisdiction over the labor dispute.
Thus, we see no reversible error in the CA’s finding that the strike of
September 19, 2003 was illegal. Consequently, the Union officers were
deemed to have lost their employment status for having knowingly
participated in said illegal act.
We likewise find logic in the CA’s directive for the herein parties to
proceed with voluntary arbitration as provided in their CBA. As we see
it, the issue as to the economic benefits, which included the issue on
the formula in computing the TIP share of the employees, is one that
arises from the interpretation or implementation of the CBA. To be
sure, the parties’ CBA provides for a grievance machinery to resolve
any "complaint or dissatisfaction arising from the interpretation or
implementation of the CBA and those arising from the interpretation or
enforcement of company personnel policies." Moreover, the same
CBA provides that should the grievance machinery fail to resolve the
grievance or dispute, the same shall be "referred to a Voluntary
Arbitrator for arbitration and final resolution."
However, through no fault of the University these processes were not
exhausted. It must be recalled that while undergoing preventive
mediation proceedings before the NCMB, the Union declared a
bargaining deadlock, filed a notice of strike and thereafter, went on
strike. The University filed a Motion to Strike Out Notice of Strike and
to Refer the Dispute to Voluntary Arbitration but the motion was not
acted upon by the NCMB. As borne by the records, the University has
been consistent in its position that the Union must exhaust the
grievance machinery provisions of the CBA which ends in voluntary
arbitration.
The University’s stance is consistent with Articles 261 and 262 of the
Labor Code, as amended.

DISPOSITIVE: University of San Agustin won.

DOCTRINE: The University filed a Motion to Strike Out Notice of

Strike and Refer the Dispute to Voluntary Arbitration precisely to call
the attention of the NCMB and the Union to the fact that the CBA
provides for a grievance machinery and the parties’ obligation to
exhaust and honor said mechanism. Accordingly, the NCMB should
have directed the Union to honor its agreement with the University to
exhaust administrative grievance measures and bring the alleged
deadlock to voluntary arbitration. Unfortunately, the NCMB did not
resolve the University’s motion thus paving the way for the strike on
September 19, 2003 and the deliberate circumvention of the CBA’s
grievance machinery and voluntary arbitration provisions.

As we see it, the failure or refusal of the NCMB and thereafter the
SOLE to recognize, honor and enforce the grievance machinery and
voluntary arbitration provisions of the parties’ CBA unwittingly
rendered said provisions, as well as, Articles 261 and 262 of the Labor
Code, useless and inoperative. As here, a union can easily circumvent
the grievance machinery and a previous agreement to resolve
differences or conflicts through voluntary arbitration through the
simple expedient of filing a notice of strike. On the other hand,
management can avoid the grievance machinery and voluntary
arbitration provisions of its CBA by simply filing a notice of lockout.
--------------------------------------------------
CASE 098 ATLAS FARM VS NLRC
G.R. No. 142244
November 18, 2002
Digest by: Michelle Vale Cruz
--------------------------------------------------
Petitioner: ATLAS FARMS, INC.
Respondent: NLRC, JAIME O. DELA PENA and MARCIAL I.
ABION
Ponente:
Topic: CBA: grievance procedure
FACTS:
1. Private respondents Jaime O. dela Pena and Marcial Abion
were both employees of Atlas Farms Inc who were terminated
on separate causes.
2. Dela Pena was allegedly caught urinating and defecating on
company premises not intended for the purpose. On the other
hand, Abion caused the clogging of the fishpond drainage
resulting in damages worth several hundred thousand pesos
when he improperly disposed of the cut grass and other waste
materials into the ponds drainage system.
3. A formal notice was issued directing them to explain within 24
hours why disciplinary action should not be taken against them
for violating company rules and regulations but they refused to
receive the formal notice. Both were terminated on March 20,
1993 and October 27, 1992 respectively. They also
acknowledged receipt of their separation pays.
4. Both private respondents worked seven days a week, including
holidays, without holiday pay, rest day pay, service incentive
leave pay, and night shift differential pay. When terminated,
Abion was receiving a monthly salary of P4,500 while dela
Pena was receiving P180 pesos daily wage, or an average
monthly salary of P5,402.
5. Pea and Abion filed separate complaints for illegal dismissal
that were later consolidated. Both claimed that their
termination from service was due to petitioners suspicion that
they were the leaders in a plan to form a union to compete and
replace the existing management-dominated union.
6. On November 9, 1993, the labor arbiter dismissed their
complaints on the ground that the grievance machinery in the
collective bargaining agreement (CBA) had not yet been
exhausted. Private respondents availed of the grievance
process, but later on refiled the case before the NLRC in
Region IV. They alleged lack of sympathy on petitioners part to
engage in conciliation proceedings.
7. Their cases were consolidated in the NLRC. At the initial
mandatory conference, petitioner filed a motion to dismiss, on
the ground of lack of jurisdiction, alleging private respondents
themselves admitted that they were members of the employees
union with which petitioner had an existing CBA. This being
the case, according to petitioner, jurisdiction over the case
belonged to the grievance machinery and thereafter the
voluntary arbitrator, as provided in the CBA.
8. Labor Arbiter: The labor arbiter dismissed the complaint for
lack of merit, finding that the case was one of illegal dismissal
and did not involve the interpretation or implementation of any
CBA provision. He stated that Article 217 (c) of the Labor
Code was inapplicable to the case. Further, the labor arbiter
found that although both complainants did not substantiate
their claims of illegal dismissal, there was proof that private
respondents voluntarily accepted their separation pay and
petitioners financial assistance.
9. NLRC: Reversed Labor Arbiter
ISSUE: Whether or not the labor arbiter and the NLRC had
jurisdiction to decide complaints for illegal dismissal
RULING: YES. Article 217 of the Labor Code provides that labor
arbiters have original and exclusive jurisdiction over termination
disputes. A possible exception is provided in Article 261 of the Labor
Code, which provides that –
The Voluntary Arbitrator or panel of voluntary arbitrators shall
have original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or
 implementation of the Collective Bargaining Agreement and In the case of Maneja vs. NLRC, we held that the dismissal case does
those arising from the interpretation or enforcement of not fall within the phrase grievances arising from the interpretation or
company personnel policies referred to in the immediately implementation of the collective bargaining agreement and those
preceding article. Accordingly, violations of a Collective arising from the interpretation or enforcement of company personnel
Bargaining Agreement, except those which are gross in policies.
character, shall no longer be treated as unfair labor practice and
shall be resolved as grievances under the Collective Bargaining DISPOSITIVE: Respondents won
Agreement. For purposes of this article, gross violations of
Collective Bargaining Agreement shall mean flagrant and or DOCTRINE: Where the dispute is just in the interpretation,
malicious refusal to comply with the economic provisions of implementation or enforcement stage, it may be referred to the
such agreement. grievance machinery set up in the CBA, or brought to voluntary
arbitration. But, where there was already actual termination, with
The Commission, its Regional Offices and the Regional alleged violation of the
Directors of the Department of Labor and Employment shall
not entertain disputes, grievances or matters under the
exclusive and original jurisdiction of the Voluntary Arbitrator
or panel of Voluntary Arbitrators and shall immediately dispose
and refer the same to the grievance Machinery or Arbitration
provided in the Collective Bargaining Agreement.

Coming to the merits of the petition, the NLRC found that petitioner
did not comply with the requirements of a valid dismissal. For a
dismissal to be valid, the employer must show that: (1) the employee
was accorded due process, and (2) the dismissal must be for any of the
valid causes provided for by law. No evidence was shown that private
respondents refused, as alleged, to receive the notices requiring them
to show cause why no disciplinary action should be taken against
them. Without proof of notice, private respondents who were
subsequently dismissed without hearing were also deprived of a
chance to air their side at the level of the grievance machinery. Given
the fact of dismissal, it can be said that the cases were effectively
removed from the jurisdiction of the voluntary arbitrator, thus
placing them within the jurisdiction of the labor arbiter. Where
the dispute is just in the interpretation, implementation or
enforcement stage, it may be referred to the grievance machinery
set up in the CBA, or brought to voluntary arbitration. But, where
there was already actual termination, with alleged violation of the
employees’ rights, it is already cognizable by the labor arbiter.

--------------------------------------------------
CASE 099 HOLY CROSS OF DAVAO COLLEGE, INC. v. HOLY
CROSS FACULTY UNION-KAMAPI
G.R. No. 156098
June 27, 2005
Digest by: Thea Denilla
--------------------------------------------------
Petitioner: Holy Cross of Davao College, Inc.
Respondent: Holy Cross of Davao Faculty Union - KAMAPI
Ponente: Sandoval-Gutierrez, J.
Topic: Contract Ambiguity
FACTS:
1. Petitioner Holy Cross of Davao College, Inc. is a tertiary level
educational institution at Sta. Ana Avenue, Davao City.
2. Petitioner Holy Cross of Davao College, Inc. and Respondent
Holy Cross of Davao College Faculty Union – KAMAPI executed
a collective bargaining agreement (CBA) providing for a faculty
development scholarship for academic teaching personnel.
3. Petitioner received a letter of invitation for the
1999 Monbusho scholarship grant (In-Service Training for
Teachers) offered and sponsored by the Japanese Government,
through the Japan Information and Cultural Center (JICC).
4. This prompted Jean Legaspi, a permanent English teacher in
petitioner’s high school department, to submit her application.
5. Meantime, petitioner issued policy statement and guidelines on
educational trips abroad for the school year 1998 to 1999.
6. JICC informed Jean Legaspi that she was selected as a recipient of
the scholarship.
7. Consequently, she requested petitioner to allow her to be on study
leave with grant-in aid equivalent to her 18 months salary and
allowance, pursuant to Section 1, Article XIII of the CBA.
8. However, petitioner denied her request, claiming that she is not
entitled to grant-in aid under its "Policy Statement and Guidelines
for Trips Abroad for Professional Growth."
9. Nevertheless, petitioner granted her 12 months study leave without
pay.
10. Before she left for Japan, she asked respondent union KAMPI to
submit to the Grievance Committee petitioner’s refusal to grant her
claim for grant-in aid, but the same was not settled.
11. Respondent filed with the National Conciliation and Mediation
Board (NCMB), Regional Office No. XI, Davao City, a complaint
for payment of grant-in aid against petitioner.
12. NCMB: the Voluntary Arbitrator rendered a Decision ordering
petitioner to pay respondent’s member, Jean A. Legaspi, her grant-
in aid benefits.
13. Petitioner filed an MR but was denied.
14. Petitioner filed with the Court of Appeals a petition for review
under Rule 43.
15. CA: affirmed the voluntary arbitrator’s decision.
16. Hence, this petition for review on certiorari.
ISSUE: Whether or not Jean Legaspi is entitled to grant-in aid benefits
in light of the CBA between the parties.

RULING: 1. Yes, Jean Legaspi is entitled to grant-in aid benefits in
light of the CBA.
Yes, because a careful reading of Section 1, Article XIII of the CBA
provides that:
“xxx Management shall grant to all academic
personnel a grant-in-aid program, where the
academic teaching personnel, whenever
scholarship opportunities should arise, be afforded
a leave of absence to further their studies in
Institutions of Higher Learning with a grant-in-aid
equivalent to their salary and allowance xxx”
Thus, the Court of Appeals did not err in its assailed Decision and
Resolution.
DISPOSITIVE: WHEREFORE, the petition is DENIED. The
assailed Decision dated June 5, 2002 and Resolution dated October 18,
2002 of the Court of Appeals in CA-G.R. SP No. 65507 are
AFFIRMED. Costs against petitioner.
DOCTRINE: Any doubt or ambiguity in the contract (CBA) between
management and the union members should be resolved in favor of the
latter. This is pursuant to Article 1702 of the Civil Code which
provides: "(I)n case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living for
the laborer."

Along the same line, paragraph 2 of petitioner’s Policy Statement and
Guidelines for Trips Abroad for Professional Growth (SY 1998-1999)
reads:
"The school recognizes that educational trips
abroad promote both personal and professional
growth. Hence, employees may travel abroad for
study tours and to attend seminars, conferences,
and other related academic pursuits. The school
may provide financial assistance subject to the
following guidelines: x x x x x x”
Contracts which are not ambiguous are to be interpreted according to
their literal meaning and not beyond their obvious intendment
In Mactan Workers Union vs. Aboitiz, we held that "the terms and
conditions of a collective bargaining contract constitute the law
between the parties. Those who are entitled to its benefits can
invoke its provisions. In the event that an obligation therein imposed
is not fulfilled, the aggrieved party has the right to go to court for
redress."

Moreover, it is said in the CBA that the employee is the official

representative of the school upon recommendation of the office head.
As such, he/she receives regular salary.

The provisions in the CBA state that academic teaching personnel, like
Jean Legaspi, as recipient of a scholarship grant are entitled to a leave
of absence with a grant-in-aid equivalent to their monthly salary
and allowance, provided such grant is to promote their professional
growth or to enhance their studies in institutions of higher learning.
Such provisions need no interpretation for they are clear. Contracts
which are not ambiguous are to be interpreted according to their literal
meaning and not beyond their obvious intendment.

---------------------------------------------------------------------
CASE 100. New Pacific Timber v. NLRC
G.R. No. 124224
March 17, 2000
Digest by: Olive Cachapero
---------------------------------------------------------------------
Topic: Interpretation, Administration and Enforcement; Contract
Duration and Renewal
FACTS:
1) The National Federation of Labor (NFL) was certified as the sole
and exclusive bargaining representative of all the regular rank-and-
file employees of Petitioner New Pacific Timber & Supply Co.,
Inc. (hereinafter referred to as petitioner Company). As such, NFL
started to negotiate for better terms and conditions of employment
for the employees in the bargaining unit which it represented.
However, the same was allegedly met with stiff resistance by
petitioner Company, so that the former was prompted to file a
complaint for unfair labor practice (ULP) against the latter on the
ground of refusal to bargain collectively.
2) LA: declared petitioner Company guilty of ULP and the CBA
proposals submitted by the NFL was declared as the CBA between
the regular rank-and-file employees in the bargaining unit and
petitioner Company. NLRC affirmed. LA directed petitioner
Company to pay 142 employees entitled to the benefits under the
CBA. Petitioner Company complied.
3) A “Petition for Relief” was filed in behalf of 186 of the private
respondents “Mariano J. Akilit and 350 others” claiming that they
were wrongfully excluded from enjoying the benefits under the
CBA since the agreement with NFL and petitioner Company
limited the CBA’s implementation to only the 142 rank-and-file
employees enumerated.
4) NLRC: declaring that the 186 excluded employees “form part and
parcel of the then existing rank-and-file bargaining unit” and were,
therefore, entitled to the benefits under the CBA.
5) Petitioner: According to petitioner, the provision on wage increase
in the 1981 to 1984 CBA between petitioner Company and NFL
provided for yearly wage increases. Logically, these provisions
ended in the year 1984 – the last year that the economic provisions
of the CBA were, pursuant to contract and law, effective. Petitioner
claims that there is no contractual basis for the grant of CBA
benefits such as wage increases in 1985 and subsequent years,
since the CBA stipulates only the increases for the years 1981 to
1984.
1st ISSUE: WON the term of an existing CBA, particularly as to its
economic provisions, can be extended beyond the period stipulated
therein, and even beyond the three-year period prescribed by law, in
the absence of a new agreement.
RULING:
YES. The CBA between petitioner Company and NFL remained in
full force and effect even beyond the stipulated term, in the
absence of a new agreement; and, therefore, that the economic
provisions such as wage increases continued to have legal effect.
Article 253 of the Labor Code explicitly provides:
ART. 253. Duty to bargain collectively when there exists a
collective bargaining agreement. – When there is a collective
bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a
written notice to terminate or modify the agreement at least sixty
(60) days prior to its expiration date. It shall be the duty of both
parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during
the 60-day period and/or until a new agreement is reached by the
parties.
It is clear from the above provision of law that until a new Collective
Bargaining Agreement has been executed by and between the parties,
they are duty-bound to keep the status quo and to continue in full force
and effect the terms and conditions of the existing agreement. The law
does not provide for any exception nor qualification as to which of the
economic provisions of the existing agreement are to retain force and
effect; therefore, it must be understood as encompassing all the terms
and conditions in the said agreement.
In the case at bar, no new agreement was entered into by and between
petitioner Company and NFL pending appeal of the decision in NLRC
Case No. RAB-IX-0334-82; nor were any of the economic provisions
and/or terms and conditions pertaining to monetary benefits in the
existing agreement modified or altered. Therefore, the existing CBA in
its entirety, continues to have legal effect.
In a recent case, the Court had ccasion to rule that Articles 253 and
253-A mandate the parties to keep the status quo and to continue in
full force and effect the terms and conditions of the existing agreement
during the 60-day period prior to the expiration of the old CBA and/or
until a new agreement is reached by the parties. Consequently, the
automatic renewal clause provided for by the law, which is deemed
incorporated in all CBA’s, provides the reason why the new CBA can
only be given a prospective effect.
To rule otherwise, i.e., that the economic provisions of the existing
CBA in the instant case ceased to have force and effect in the year
1984, would be to create a gap during which no agreement would
govern, from the time the old contract expired to the time a new
agreement shall have been entered into. For if, as contended by the
petitioner, the economic provisions of the existing CBA were to have
no legal effect, what agreement as to wage increases and other
monetary benefits would govern at all? None, it would seem, if we are
to follow the logic of petitioner Company. Consequently, the
employees from the year 1985 onwards would be deprived of a
substantial amount of monetary benefits which they could have
enjoyed had the terms and conditions of the CBA remained in force
and effect. Such a situation runs contrary to the very intent and
purpose of Articles 253 and 253-A of the Labor Code which is to curb
labor unrest and to promote industrial peace.
2nd ISSUE: Are employees hired after the stipulated term of a CBA
entitled to the benefits provided thereunder?
RULING:
YES. The benefits under the CBA in the instant case should be
extended to those employees who only became such after the year
1984. To exclude them would constitute undue discrimination and
deprive them of monetary benefits they would otherwise be entitled to
under a new collective bargaining contract to which they would have
been parties. Since in this particular case, no new agreement had been
entered into after the CBA’s stipulated term, it is only fair and just that
the employees hired thereafter be included in the existing CBA. This is
in consonance with our ruling that the terms and conditions of a
collective bargaining agreement continue to have force and effect
beyond the stipulated term when no new agreement is executed by and
between the parties to avoid or prevent the situation where no
collective bargaining agreement at all would govern between the
employer company and its employees.
Dispositive: Respondent won.
Doctrine: Lopez Sugar Corporation vs. Federation of Free Workers,
et.al: Although a CBA has expired, it continues to have legal effects as
between the parties until a new CBA has been entered into. It is the
duty of both parties to the CBA to keep the status quo, and to continue
in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is
reached by the parties

-----------------------------------------------
CASE 101 Rivera vs. Espiritu
G.R. No. 1335547
Jan. 23, 2002
Digest by: Angelo Lopez
-----------------------------------------------
Topic: Collective Bargaining Agreement – Interpretation,
Administration and Enforcement : Contract Duration and Renewal
Ponente: J. Quisimbing
Facts:
1. PAL pilots affiliated with the Airline Pilots Association of the
Philippines (ALPAP) went on a three-week strike, causing
serious losses to the financially beleaguered flag carrier. As a
result, PALs financial situation went from bad to worse. Faced
with bankruptcy, PAL adopted a rehabilitation plan and
downsized its labor force by more than one-third. PALEA went
on strike to protest the retrenchment measures adopted by the
airline, which affected 1,899 union members. The strike ended
four days later, when PAL and PALEA agreed to a more
systematic reduction in PALs workforce and the payment of
separation benefits to all retrenched employees.
2. President Joseph E. Estrada issued Administrative Order No.
16 creating an Inter-Agency Task Force (Task Force) to address
the problems of the ailing flag carrier. PAL management
submitted to the Task Force an offer by private respondent
Lucio Tan, Chairman and Chief Executive Officer of PAL, of a
plan to transfer shares of stock to its employees. One provision
reads:
“xxx 3. In order for PAL to attain (a) degree of
normalcy while we are tackling its problems, we
would request for a suspension of the Collective
Bargaining Agreements (CBAs) for 10 years xxx”
3. The Board of Directors of PALEA voted to accept Tan’s offer
and requested the Task Forces assistance in implementing the
same. Union members, however, rejected Tan’s offer. Under
intense pressure from PALEA members, the unions directors
subsequently resolved to reject Tan’s offer.
4. PALEA informed the Department of Labor and Employment
(DOLE) that it had no objection to a referendum on the Tans
offer. 2,799 out of 6,738 PALEA members cast their votes in
the referendum under DOLE supervision held on September
21-22, 1998. Of the votes cast, 1,055 voted in favor of Tans
offer while 1,371 rejected it. PAL ceased its operations and sent
notices of termination to its employees.
5. The PALEA board again wrote the President proposing the
following terms and conditions, subject to ratification by the
general membership:
4.To assure investors and creditors of industrial
peace, PALEA agrees, subject to the ratification
by the general membership, (to) the suspension of
the PAL-PALEA CBA for a period of ten (10)
years, provided the following safeguards are in
place:
a. PAL shall continue recognizing PALEA as the
duly certified bargaining agent of the regular
rank-and-file ground employees of the Company;
b. The union shop/maintenance of membership
provision under the PAL-PALEA CBA shall be
respected.
6. Among the signatories to the letter were herein petitioners
Rivera, Ramiso, and Aranas, as officers and/or members of the
PALEA Board of Directors. PAL management accepted the
PALEA proposal and the necessary referendum was scheduled.
7. On October 2, 1998, 5,324 PALEA members cast their votes in
a DOLE-supervised referendum. Of the votes cast, 61% were
in favor of accepting the PAL-PALEA agreement, while 34%
rejected it. PAL resumed domestic operations. On the same
date, seven officers and members of PALEA filed this instant
petition to annul the agreement entered into between PAL and
PALEA.
 8. petitioners contend that the controverted PAL-PALEA
agreement is void because it abrogated the right of workers to
self-organization and their right to collective bargaining.
Petitioners claim that the agreement was not meant merely to
suspend the existing PAL-PALEA CBA, which expires on
September 30, 2000, but also to foreclose any renegotiation or
any possibility to forge a new CBA for a decade or up to 2008.
It violates the protection to labor policy laid down by the
Constitution.
Issue:
WON the PAL-PALEA agreement of September 27, 1998, stipulating
the suspension of the PAL-PALEA CBA unconstitutional and contrary
to public policy.
Ruling:
No, a CBA is a contract executed upon request of either the employer
or the exclusive bargaining representative incorporating the agreement
reached after negotiations with respect to wages, hours of work and all
other terms and conditions of employment, including proposals for
adjusting any grievances or questions arising under such agreement.
The primary purpose of a CBA is the stabilization of labor-
management relations in order to create a climate of a sound and stable
industrial peace. In construing a CBA, the courts must be practical and
realistic and give due consideration to the context in which it is
negotiated and the purpose which it is intended to serve.
The assailed PAL-PALEA agreement was the result of voluntary
collective bargaining negotiations undertaken in the light of the severe
financial situation faced by the employer, with the peculiar and unique
intention of not merely promoting industrial peace at PAL, but
preventing the latter’s closure. The Court finds no conflict between
said agreement and Article 253-A of the Labor Code. Article 253-A
has a two-fold purpose. One is to promote industrial stability and
predictability. Inasmuch as the agreement sought to promote industrial
peace at PAL during its rehabilitation, said agreement satisfies the first
purpose of Article 253-A. The other is to assign specific timetables
wherein negotiations become a matter of right and requirement.
Nothing in Article 253-A, prohibits the parties from waiving or
suspending the mandatory timetables and agreeing on the remedies to
enforce the same.
In the instant case, it was PALEA, as the exclusive bargaining agent of
PALs ground employees, that voluntarily entered into the CBA with
PAL. It was also PALEA that voluntarily opted for the 10-year
suspension of the CBA. Either case was the unions exercise of its right
to collective bargaining. The right to free collective bargaining, after
all, includes the right to suspend it.
The acts of public respondents in sanctioning the 10-year suspension
of the PAL-PALEA CBA did not contravene the protection to labor
policy of the Constitution. The agreement afforded full protection to
labor; promoted the shared responsibility between workers and
employers; and the exercised voluntary modes in settling disputes,
including conciliation to foster industrial peace."
Dispositive: Petition is Dismissed.
Doctrine:
The Court finds no conflict between said agreement and Article 253-A
of the Labor Code. Article 253-A has a two-fold purpose. One is to
promote industrial stability and predictability. Inasmuch as the
agreement sought to promote industrial peace at PAL during its
rehabilitation, said agreement satisfies the first purpose of Article 253-
A. The other is to assign specific timetables wherein negotiations
become a matter of right and requirement. Nothing in Article 253-A,
prohibits the parties from waiving or suspending the mandatory
timetables and agreeing on the remedies to enforce the same.

--------------------------------------------------
CASE 102 Meralco v. Sec. Quisimbing
GR NO./ SCRA NO. 127598
Date February 22, 2000
Digest by: Anna Beatrice S. Tarrosa
--------------------------------------------------
Petitioner: MANILA ELECTRIC COMPANY
Respondent: Hon. SECRETARY OF LABOR LEONARDO
QUISUMBING and MERALCO EMPLOYEES and WORKERS
ASSOCIATION (MEWA)
Ponente: YNARES-SANTIAGO, J
Topic: d. Contract Duration and Renewal
FACTS:
1.
The parties are directed to execute a Collective Bargaining
Agreement incorporating the terms and conditions contained in
the unaffected portions of the Secretary of Labor's orders of
August 19, 1996 and December 28, 1996, and the
modifications set forth above. The retirement fund issue is
remanded to the Secretary of Labor for reception of evidence
and determination of the legal personality of the MERALCO
retirement fund.
2.
On the retroactivity of the CBA arbitral award, it is well to
recall that this petition had its origin in the renegotiation of the
parties' 1992-1997 CBA insofar as the last two-year period
thereof is concerned. When the Secretary of Labor assumed
jurisdiction and granted the arbitral awards, there was no
question that these arbitral awards were to be given retroactive
effect. However, the parties dispute the reckoning period when
retroaction shall commence. Petitioner claims that the award
should retroact only from such time that the Secretary of Labor
rendered the award, invoking the 1995 decision in Pier 8
case14 where the Court, citing Union of Filipino Employees v.
NLRC,15 said:
The assailed resolution which incorporated the CBA to be
signed by the parties was promulgated on June 5, 1989, the
expiry date of the past CBA. Based on the provision of Section
253-A, its retroactivity should be agreed upon by the parties.
But since no agreement to that effect was made, public
respondent did not abuse its discretion in giving the said CBA a
prospective effect. The action of the public respondent is
within the ambit of its authority vested by existing law.
3.
On the other hand, the Union argues that the award should
retroact to such time granted by the Secretary, citing the 1993
decision of St. Luke's.16
Finally, the effectivity of the Order of January 28, 1991, must
retroact to the date of the expiration of the previous CBA,
contrary to the position of petitioner. Under the circumstances
of the case, Article 253-A cannot be properly applied to herein
case. As correctly stated by public respondent in his assailed
Order of April 12, 1991 dismissing petitioner's Motion for
Reconsideration —
Anent the alleged lack of basis for the retroactivity provisions
awarded; we would stress that the provision of law invoked by
the Hospital, Article 253-A of the Labor Code, speaks of
agreements by and between the parties, and not arbitral
awards . . .
Therefore, in the absence of a specific provision of law
prohibiting retroactivity of the effectivity of arbitral awards
issued by the Secretary of Labor pursuant to Article 263(g) of
the Labor Code, such as herein involved, public respondent is
deemed vested with plenary and discretionary powers to
determine the effectivity thereof.
ISSUE/S: For how long will the CBA be effective and from when
should it retroact?
RULING: The Court in the January 27, 1999 Decision, stated that the
CBA shall be "effective for a period of 2 years counted from
December 28, 1996 up to December 27, 1999." Parenthetically, this
actually covers a three-year period. Labor laws are silent as to when an
arbitral award in a labor dispute where the Secretary had assumed
jurisdiction by virtue of Article 263 (g) of the Labor Code shall
retroact. 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.18 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. Despite the silence of the law, the Court rules herein that
CBA arbitral awards granted after six months from the expiration of
the last CBA shall retroact to such time agreed upon by both employer
and the employees or their union. Absent such an agreement as to
retroactivity, the award shall retroact to the first day after the six-
month period following the expiration of the last day of the CBA
should there be one. 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.

DISPOSITIVE: (1) the arbitral award shall retroact from December 1,

1995 to November 30, 1997; and (2) the award of wage is increased
from the original amount of One Thousand Nine Hundred Pesos
(P1,900.00) to Two Thousand Pesos (P2,000.00) for the years 1995
and 1996. This Resolution is subject to the monetary advances granted
by petitioner to its rank-and-file employees during the pendency of this
case assuming such advances had actually been distributed to them.
The assailed Decision is AFFIRMED in all other respects

DOCTRINE: Despite the silence of the law, the Court rules herein
that CBA arbitral awards granted after six months from the expiration
of the last CBA shall retroact to such time agreed upon by both
employer and the employees or their union. Absent such an agreement
as to retroactivity, the award shall retroact to the first day after the six-
month period following the expiration of the last day of the CBA
should there be one.

--------------------------------------------------
103. Associated Labor Unions v. NLRC
G.R. No. 74841 & G.R. No. 75667
December 20, 1991
Digested by: Carl Au
--------------------------------------------------
G.R. No. 74841
Petitioner: ASSOCIATED LABOR UNIONS-VIMCONTU, THE
CEBU OIL EMPLOYEES ASSOCIATION, represented by its Acting
President, MIGUEL C. ALIVIADO, and THE MOBIL DAVAO/
COTABATO CHAPTER-ALU, represented by its President, DAVID
C. ONDEVILLA Respondents: THE NATIONAL LABOR
RELATIONS COMMISSION (NLRC), MOBIL OIL PHILIPPINES,
INC., JEAN PIERRE BAILLEUX, CALTEX PHILIPPINES, INC.,
and MOBIL PHILIPPINES, INC.
G.R. No. 75667
Petitioner:ASSOCIATED LABOR UNIONS-VIMCONTU, THE
CEBU OIL EMPLOYEES ASSOCIATION-ALU LOCAL 15,
represented by its President, EMILIO S. SUAREZ, and THE MOBIL
DAVAO/COTABATO CHAPTER-ALU, represented by its President,
DAVID C. ONDEVILLA
Respondents:MOBIL OIL PHILS., INC., JEAN PIERRE
BAILLEUX, CALTEX PHILIPPINES, INC., and MOBIL
PHILIPPINES, INC.
Ponente: Davide Jr., J.
FACTS:
1. A collective bargaining agreement was entered into between
the complainants and Mobil Oil Philippines, Inc. for a period of
three years starting. J.P. Bailiux, President of Mobil Oil
Philippines, Inc., sent letters to the employees, notifying of the
termination of their services effective August 31, 1983 because
of the sale of the respondent firm.
2. The employees accepted their checks for separation pay and
signed quit-claims under protest and subject to the outcome of
this case.
3. Caltex Philippines, Inc. was impleaded as additional
respondent because of its acquisition of the entire marketing
and distribution assets of Mobil Oil Philippines. Mobil
Philippines, Inc. was also made a respondent in view of a
metropolitan daily newspaper announcement that Mobil Oil
Philippines, Inc. will continue to do business under the
corporate name of Mobil Philippines
4. Complainants charge Mobil Oil Philippines, Inc. and J.P.
Bailiux with unfair labor practice for violating their collective
bargaining agreement which, among others, states that "this
Agreement shall be binding upon the parties hereto and their
successors and assigns, and may be assigned by the company
without the previous approval of the Union. However, the latter
will be notified of such assignment when it occurs."
5. In this case, the complainant unions were not notified officially
of such assignment to Caltex Philippines and respondent Mobil
Oil Philippines made announcement in major dailies that the
company shall continue to operate its business.
ISSUE: WON the union could enforce the CBA against the new
owner of the business?
RULING: NO. In a recent case involving these two parties (Mobil
Employees Association, et al. vs. NLRC, et al.) it was held that since
what was effected was cessation of business and that the requirement
of due notice was substantially complied with, the allegations that both
MOPI and Caltex merely intended to evade the provisions of the CBA
cannot be sustained.
There was nothing irregular in the closure by MOPI of its business
operation. Caltex may not be said to have stepped into the picture as an
assignee of the CBA because of the very fact of such closure.
As a rule that unless, expressly assumed, labor contracts are not
enforceable against a transferee of an enterprise, labor contracts being
in personam, thus binding only between the parties.

As a general rule, there is no law requiring a bona fide purchaser of the

assets of an on-going concern to absorb in its employ the employees of
the latter. However, although the purchaser of the assets or enterprise
is not legally bound to absorb in its employ the employees of the seller
of such assets or enterprise, the parties are reliable to the employees if
the transaction between the parties is colored or clothed with bad faith.
The sale or disposition must be motivated by good faith as an element
of exemption from liability.

This flows from the well-recognized principle that is within the

employer's legitimate sphere of management control of the business to
adopt economic policies or make some changes or adjustments in their
organization or operations that would insure profit to itself or protect
the investment of its stockholders. As in the exercise of such
management prerogative, the employer may merge or consolidate its
business with another, or sell or dispose all or substantially all of its
assets and properties which may bring about the dismissal or
termination of its employees in the process.

DOCTRINE: As a rule that unless, expressly assumed, labor contracts

are not enforceable against a transferee of an enterprise, labor
contracts being in personam, thus binding only between the parties.
This flows from the well-recognized principle that is within the
employer's legitimate sphere of management control of the business to
adopt economic policies or make some changes or adjustments in their
organization or operations that would insure profit to itself or protect
the investment of its stockholders.

DISPOSITIVE: WHEREFORE, both Petitions for certiorari are

DISMISSED for lack of merit.
------------------------------------------------------------
CASE 104 Elisco-Elirol Labor Union vs. Noriel
80 SCRA 682 (1977)
Digest by: Kayelyn Lat
------------------------------------------------------------
Petitioner: Elisco-Elirol Labor Union (NAFLU) and its officers and
members of the Board of Directors
Respondent: Carmelo Noriel (BLR), Elizalde Steel Consolidated, Inc.
and NAFLU
Ponente: J. Teehankee
Topic: CBA and Disaffiliation
FACTS:
1. February 1974: Petitioner Elisco-Elirol Labor Union
(NAFLU), negotiated and executed a Collective Bargaining
Agreement with Respondent Elizalde Steel Consolidated, Inc.
2. Upon verification by individual petitioners at the Registration
Division, BLR, Dept of Labor, NAFLU, the contracting party
in said collective bargaining agreement, was not then registered
and therefore not entitled to the benefits and privileges
embodied in said agreement
3. March 3, 1975: members of petitioner union in a general
membership meeting decided in a resolution to register their
union to protect and preserve the integrity and inviolability of
the CBA between NAFLU and Elizalde Steel Consolidated,
Inc.
4. Said resolution of members of petitioner union was passed
upon by the officers and members of the BD at a special
meeting, resolution no. 6 was approved requesting the Acting
Directors, Registration Division, BLR, to register the union
NAFLU
5. By virtue of resolution, petitioner union applied for registration
with BLR
6. May 28, 1975: Certificate of Registration was issued by the
Office.
7. With the issuance of the certificate of registration, petitioner
acquired a personality separate and distinct from any other
labor union
8. Steps were taken by petitioner to enforce the CBA
9. June 10, 1975: At a special meeting called for the purpose, the
general membership of petitioner union decided that their
mother union, the National Federation of Labor Unions, can no
longer safeguard the rights of its members insofar as working
conditions and other terms of employment are concerned and
that the interest and welfare of petitioner can be served best if it
will stay independent and disaffiliated from said mother union,
hence, the general membership adopted a resolution to
disaffiliate from the National Federation of Labor Unions.
10. June 11, 1975: Petitioner, acting through its President Riza,
informed respondents of said disaffiliation by means of a letter,
and subsequently requested respondents to recognize petitioner
as the sole and exclusive bargaining representative of the
employees thereof.
11. Respondent without any reason refused and continues to refuse
to recognize petitioner as the sole and exclusive bargaining
representative of its employees, and, now actually dismissed
the petitioner union’s officers and board members
12. A complaint for unfair labor practice was filed by petitioners
against respondents for the latter’s refusal to bargain
collectively with petitioner
13. By virtue of said refusal of respondent to recognize petitioner
as the sole and exclusive bargaining representative of
employees, petitioners filed a petition before the BLR against
respondents, and NAFLU be ordered to stop from presenting
itself as the collective bargaining agent and pursuant thereto, a
writ of Prelim. Mandatory and Prohibitory Injunction be issued
14. BLR: dismissed petition for lack of merit
 15. On appeal, Director of BLR affirmed dismissal of petitioner
union’s petition
- Appellant is correct. For to grant to the former mother
union (NAFLU) the authority to administer and enforce
their collective bargaining agreement without presumably
any members in the bargaining unit is quite absurd
- But to transfer also to the newly formed union the authority
although the members of the same were the same members
who composed then the local chapter of the mother union is
also a violation of the CBA (union security clause)
16. Hence, this petition.
ISSUE: Whether or not the disaffiliation of the employees from the
mother union and formed into a new one, their status as employees
was terminated
HELD: NO
RATIO:
His error was in 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 UnionNAFLU,
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.
Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc:
“The Court expressly cited and affirmed the basic principle that “(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 ByLaws 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.”
Corollarily, the “substitutionary” doctrine likewise fully supports
petitioner’s stand. Petitioner union to whom the employees owe their
allegiance has from the beginning expressly avowed that it “does not
intend to change and/or amend the provisions of the present collective
bargaining agreement but only to be given the chance to enforce the
same since there is a shift of allegiance in the majority of the
employees at respondent company.”
It need only be mentioned finally that the Secretary of Labor in his
decision of April 23, 1976 and order of January 10, 1977 denying
reconsideration in the sister unfair labor practice case and ordering
respondent corporation to immediately lift the suspension and reinstate
the complainant officers and board members of petitioner union has
likewise adhered to the foregoing basic principles and settled
jurisprudence in contrast to respondent director (as well as therein
respondent NLRC which similarly adhered to the archaic and illogical
view that the officers and board members of petitioner local union
committed an “act of disloyalty” in disaffiliating from the mother
union when practically all its members had so voted to disaffiliate and
the mother union [as mere agent] no longer had any local union or
members to represent), ruling that “(G)ranting arguendo that the
disaffiliation from the NAFLU is a legal cause for expulsion and
dismissal, it could not detract from the fact that only 13 individual
complainants out of almost 700 members who disaffiliated, were
singled out for expulsion and recommended for dismissal. The
actuation of NAFLU conclusively constitutes discrimination. Since the
suspension of complainants was effected at the instance of NAFLU, it
should be held liable to the payment of backwages.

DISPOSITIVE PORTION: Elisco-Elirol Labor Union WON.

DOCTRINE: “(W)hat is paramount, as it is expressly and explicitly

emphasized in an exacting language under the New Constitution, is the
security of tenure of the workers, not the security of the union. To
impress, therefore, such ‘maintenance of membership’—which is
intended for the security of the union rather than the security of tenure
of the workers—as a bar to employees’ changing their affiliation is not
only to infringe on the constitutional right of freedom of association,
but also to trample upon the constitutional right of workers to security
of tenure and to render meaningless whatever ‘adequate social
services’ the State may establish or maintain in the field of
employment ‘to guarantee the enjoyment by the people of a decent
standard of living.’”

-----------------------------------------------------------------------------
CASE 105 Culili v. Eastern Telecommunications Philippines, Inc.,
GR No.165381
February 9, 2011
Digest by: Jen Balmeo
-----------------------------------------------------------------------------
Petitioner: Nelson A. Culili
Respondent: Eastern Telocom. Phil. Inc.
Ponente: J. Leonardo-De Castro
Topic: Definition of Unfair Labor Practice
FACTS:
Nelson Culili was employed as a Technician, and was promoted to
Senior Technician after 15 years. In 1998, due to business troubles and
losses, ETPI implemented a two-phased Right-Sizing Program:
reduction of ETPI’s workforce, then a company-wide reorganization
(transfer, merger, absorption or abolition of departments). ETPI
offered a Special Retirement Program to employees who have been in
service for at least 15 years. Of all the employees who qualified, only
Culili rejected the offer.
The functions of Culili’s unit were absorbed by another department,
and his position was abolished (and was eventually absorbed by
another employee) due to redundancy. Culili wrote to the union
president in protest.
He was informed of his termination from employment through a letter
from the ETPI AVP.
This letter was similar to the memo shown to Culili by the union
president weeks before Culili was dismissed.
Culili claims that ETPI contracted out the services he used to perform
to a labor-only contractor, which not only proved that his functions had
not become unnecessary, but which also violated the CBA + LC.
In addition, neither he nor the DOLE were formally notified of his
termination. He found out about it when he was handed a copy of the
letter, after he was barred from entering ETPI’s premises. ETPI
already decided to dismiss him even prior to the AVP’s letter,
as evidenced by an earlier version of the letter.
ETPI denied hiring outside contractors to perform Culili’s work. It also
denied singling Culili out for termination. The abolition of Culili’s
department and the absorption of its functions by another department
were in line with the Right-Sizing Program’s goals.
Since Culili did not avail of the Special Retirement Program and his
position was subsequently declared redundant, ETPI had no choice but
to terminate Culili. Because there was no more work for him, it was
constrained to serve a final notice of termination, which Culili ignored.
Culili filed a complaint for ULP, illegal dismissal, and money claims
before the LA.-
LC 248(c) – To contract out services or functions being performed by
union members when such will interfere with, restrain or coerce
employees in the exercise of their rights to self-organization.
LC 248(e)– To discriminate in regard to wages, hours of work, and
other terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in this
Code or in any other law shall stop the parties from requiring
membership in a recognized collective bargaining agent as a condition
for employment, except those employees who are already members of
another union at the time of the signing of the collective
bargaining agreement. Employees of an appropriate collective
bargaining unit who are not members of the recognized collective
bargaining agent may be assessed a reasonable fee equivalent to the
dues and other fees paid by members of the recognized collective
bargaining agent, if such non-union members accept the benefits under
the collective agreement: Provided, that the individual authorization
required under Article 242, (o) of this Code shall not apply to the non-
members of the recognized collective bargaining agent.
LA–ETPI GUILTY OF ILLEGAL DISMISSAL AND ULP
(AFFIRMED BY NLRC)
Re: ULP—the contracting out of Culili’s functions to non-union
members violated his rights as a union member;
ETPI was not able to dispute Culili’s claims of discrimination and
subcontracting
The earlier version of the letter was a telling sign of the intention to
dismiss even before declaration of redundancy. The ground that ETPI
was actually invoking was retrenchment, but ETPI stuck to
redundancy since it was easier to prove. ETPI failed to present
reasonable criteria to justify declaration of redundancy.
CA–VALID DISMISSAL, NO ULP
Re: ULP—mere contracting out of services being performed by union
members does not per se amount to ULP unless it interferes with
the employees’ right to self -organization.
Culili’s position validly abolished due to redundancy. ETPI officers
cannot be held liable absent a showing of bad faith of malice.
HOWEVER, ETPI failed to observe due process when it failed
to notify both Culili and DOLE of the termination.
ISSUE: WON Culili’s dismissal can be considered as ULP.
HELD: NO. However, ETPI has to pay nominal damages for non-
compliance with statutory due process, in addition to the mandatory
separation pay [LC 283].
Article 247. Concept of unfair labor practice and procedure for
prosecution thereof.
Unfair labor practices violate the constitutional right of workers
and employees to self-organization, are inimical to the legitimate
interest of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of
freedom and mutual respect, disrupt industrial peace and hinder
the promotion of healthy and stable labor-management relations.
ULP refers to ‘acts that violate the workers' right to organize. The
prohibited acts are related to the workers' right to self organization and
to the observance of a CBA. An employer may only be held liable for
unfair labor practice if it can be shown that his acts affect in whatever
manner the right of his employees to self-organize.
There is no showing that ETPI, in implementing its Right-Sizing
Program, was motivated by ill will, bad faith or malice, or that it was
aimed at interfering with its employees’ right to self -organization. In
fact, ETPI negotiated and consulted with the SEBA before
implementing the program.
By imputing bad faith to ETPI’s actuations, Culili has the burden of
proof to present substantial evidence to support the allegation of
ULP. Culili failed to discharge this burden and his bare allegations
deserve no credit.
DISPOSITIVE: Culili lost. Petition denied.
DOCTRINE: Unfair Labor Practice refers to ‘acts that violate the
workers' right to organize. The prohibited acts are related to the
workers' right to self organization and to the observance of a CBA. An
employer may only be held liable for unfair labor practice if it can be
shown that his acts affect in whatever manner the right of his
employees to self-organize.

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CASE 106 GALAXIE STEEL WORKERS UNION VS. NLRC
G.R. No. 165757 October 17, 2006
Digested by: Lanz Olives
--------------------------------------------------------------------
Petitioners: GALAXIE STEEL WORKERS UNION (GSWU-
NAFLU-KMU), EDUARDO FLORES, BONIFACIO LABACO,
SALVADOR VERDEFLOR, PAULITO NIEVES, NILO
AMENAZOR, BENJAMIN BEDUYA, EUTIQUIO MENESES,
CENON LABACO, DANILO MARANAN, ELISEO LASTIMOSO,
JAMES MADERAS, EFREN LABACO, CESARIO BOLSICO,
DARIO DECALAIN, SAMMY CEDENO, PRUDENCIO DELA
CRUZ, EDGARDO PASTRANA, DANILO BERMUDEZ, BILLY
BLASCO, ROBERTO PEPINO, RUBEN TENOSO, ORLANDO
TUDILLA, JESSIE SACE, JUNE DALAYAT, FRANCISO LABACO,
EDIN DEMAYO, WILFREDO CHENG, JAIME GANDO,
JOSELITO GUANZON, VICTOR DELMUNDO, NATHANIEL
PEROY, ROBERTO VIRTUDAZO, RICARDO HILAGA, RODRIGO
FIRMANEZ, RENE VILLA, VERGELIO ICO, NOLITO
PANUNCIA, ALDRONICO BAHILLO, FLORENCIO
LANZADEROS, ROLLY ROTIL, BENJAMIN ESCANO,
DOMINADOR ABAINCIA, ROMEO LITANG, NELSON PETALIO,
MARIO VILLAMOR, AGUSTIN CONSTANTINO, HERMINIO
AGUSTIN, VICTORIO NEMENZO, MABINI YARCIA, PERCY
ZOSIMO, ANGELITO DELOS REYES, ADVINCULA
ELMEDULAN, GORGONIO BOLORAN, ALAN MONIN, JESSIE
PACALINGGA, and MICHAEL DACLAG
Respondents: NATIONAL LABOR RELATIONS COMMISSION,
GALAXIE STEEL CORPORATION and RICARDO CHENG
Nature of the Case: petition for review
Ponente: Carpio Morales, J.
TOPIC: Unfair Labor Practice; In General; Definition and General
Concept.
FACTS:
On account of serious business losses which occurred in 1997 up to
mid-1999 totaling around P127,000,000.00, Galaxie Steel Workers
Union decided to close down its business operations. It thereafter filed
a written notice with the Department of Labor and Employment
(DOLE) informing the latter of its intended closure and the consequent
termination of its employees effective August 31, 1999. It posted the
notice of closure on the corporate bulletin board.
On September 8, 1999, Galaxie Steel Workers Union and Galaxie
employees filed a complaint for illegal dismissal, unfair labor practice,
and money claims against Galaxie. The Labor Arbiter, NLRC and the
Court of Appeals were unanimous in ruling that Galaxie’s closure or
cessation of business operations was due to serious business losses or
financial reverses, and not because of any alleged anti-union position.
The workers’ union and employees contend that Galaxie did not serve
written notices of the closure of business operations upon them, it
having merely posted a notice on the company bulletin board.
ISSUE:
1) Whether or not the written notice posted by [Galaxie] on the
company bulletin board sufficiently complies with the notice
requirement under Article 283 of the Labor Code.
2) Whether or not [Galaxie] is guilty of unfair labor practice in closing
its business operations shortly after petitioner union filed for
certification election.
RULING:
1) NO.
The requirement of the Labor Code that notice shall be served on the
workers is not complied with by the mere posting of the notice on the
bulletin board.
The mere posting on the company bulletin board does not meet the
requirement under Article 283 of ―serving a written notice on the
workers.‖ The purpose of the written notice is to inform the employees
of the specific date of termination or closure of business operations,
and must be served upon them at least one month before the date of
effectivity to give them sufficient time to make the necessary
arrangements. In order to meet the foregoing purpose, service of the
written notice must be made individually upon each and every
employee of the company.
2) NO
Indeed, Galaxie’s documentary evidence shows that it had been
experiencing serious financial losses at the time it closed business
operations. As aptly found by the Court of Appeals:
The NLRC’s finding on the legality of the closure should be upheld for
it is supported by substantial evidence consisting of the audited
financial statements showing that Galaxie continuously incurred losses
from 1997 up to mid-1999, to wit: P65,753,480.65 in 1997,
P48,429,785.89 in 1998, and P13,204,389.97 in 1999; and of the
various demand notices of payments from creditor banks. Besides, the
petitioners had not presented evidence to the contrary; nor did they
establish that the closure was motivated by Galaxie’s anti-union
stance. True, the union was seeking the holding of a certification
election at the time that Galaxie closed its business operation, but that,
without more, was not sufficient to attribute anti-unionism against
Galaxie. (Underscoring supplied)
Upon the other hand, petitioners failed to present concrete evidence
supporting their claim of unfair labor practice. Unfair labor practice
refers to acts that violate the workers’ right to organize,12 and are
defined in Articles 248 and 261 of the Labor Code. The prohibited acts
relate to the workers’ right to self-organization and to the observance
of Collective Bargaining Agreement without which relation the acts,
no matter how unfair, are not deemed unfair labor practices
DISPOSITIVE: GALAXIE WORKERS UNION et al. partly won.
DOCTRINE: Unfair labor practice refers to acts that violate the
workers’ right to organize, and are defined in Articles 248 and 261 of
the Labor Code. The prohibited acts relate to the workers’ right to self-
organization and to the observance of Collective Bargaining
Agreement without which relation the acts, no matter how unfair, are
not deemed unfair labor practices
Art. 283. Closure of establishment and reduction of personnel. — The
employer may also terminate the employment of any employee due to
the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice
on the workers and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof. In case of termination due
to the installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month pay for every
year of service , whichever is higher. In case of retrenchment to
prevent losses and in cases of closures or cessation of operations of
establishment or under taking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher. A fraction of at least six (6) months shall
be considered one (1) whole year.
 ISSUE/S:
-------------------------------------------------- WON the petitioners are guilty of unfair labor practice?
107 STERLING PRODUCTS INTRNTL V. SEC OF LABOR
GR NO. L-19187 RULING: NO.
February 28, 1963
Digest by: Metha Dawn H. Orolfo In the case of Royal Interocean Lines, et al. vs. CIR, as respondent sol
-------------------------------------------------- was merely an employee and was not connected woth any labor union,
the company cannot be cpnsidered as having committed acts
Petitioner: Sterling Products International Inc. and V. San Pedro constitution unfair labor practice as defined in the Industrial peace act.
Respondent: Loreta C. Sol and Court of Industrial Relations
Ponente: Labrador The term ULP has been defined as any of those acts listed in SEC. 4 of
the act. The respondent has never been found to commit any of the acts
Topic: Unfair Labor Practice – Definition and General Concept mentioned in par. A of sec. 4. Respondent sol was not connected with
any labor organization or to assist, or contribute to labor organization.
FACTS: The company, therefore cannot be considered as having committed an
1. Respondent Loreta Sol chared pettioners and its Radio Director unfair labor practice.
with having committed an unfair labor practice act.
2. That Respondent has been a regular radio monitor of the DISPOSITIVE: Petitioner won.
petitioners and filed a complaint for underpayment, money
equivalent of her vacation leave and Christmas bonus. DOCTRINE: Section 4 of the Industrial Peace Act.
3. The said complaint resulted in her dismissal without just cause
in December 1960.
4. Petitioners aver that the complainant is an independent
contractor whose services were restrained by them to submit
reports of radio monitoring work outside of the petitioner’s
office and that it don’t need the services of the complainant as
independent contractor, that it dismissed the respondents with
good and justifiable reasons in accordance with business
requirements and not engaging in unfair labor practice acts
within the meaning pf Sec 4 (a), subsec 5 of the Industrial
Peace Act.
5. CIR: respondent is only an independent contractor
6. CA: Reversed CIR, because she has an ID as a bona fide
employee, when she purchased a lot she was certified by the
petitioner as employee for the last 5-6 years and she was able
to borrow money from the employees loan association of the
firm.
7.
-------------------------------------------------- Tinsay, operator of said watchmen’s agency, and thatœthe
CASE 108 AMERICAN PRESIDENT LINES INC VS CLAVE operator of the Marine Security Agency then allegedly
G.R. No. L-51641 threatened to cause trouble to the APL, and particularly to
June 29, 1982 Capt. Morris
Digest by: Michelle Vale Cruz 5. On February 6, 1961, respondent union Maritime Security
-------------------------------------------------- Union passed a resolution abolishing itself with the following
reasons: 1) Termination of Contract of the Marine Security
Petitioner: AMERICAN PRESIDENT LINES Agency with the American President Lines. 2) Inability of the
Respondent: Hon. Jacobo Clave (Pres. Exec. Assistant Office of the Marine Security Agency to provide employment 3) Inability of
Pres.), NLRC, Ministry of Labor, Maritime Security Union, Indiv. the members and the Union to provide maintenance in the
Complainnats headed by Julian Advincula and Sheriff Leon Navea coming months.
Ponente: J. Barredo 6. On December 10, 1962, the respondent union passed another
resolution reviving itself.
Topic: Employer-employee relationship: requisites 7. On March 21, 1963, the Maritime Security Union, through
private respondents filed a complaint against the petitioner for
FACTS: unfair labor practice under RA 875. Their complaint, wherein
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entered they charged that the petitioner had refused to negotiate an
Agency for the latter to guard and protect the petitioner’s agreement with them and had discriminated against them with
vessels while they were moored at the port of Manila. The regard to their tenure of employment by dismissing them for no
contract was for one year and may be terminated by either other reason than their membership with the union and union
party upon 30 days’ notice to the other. activities, was lodged with the defunct Court of Industrial
2. The relationship between the petitioner and Marine Security Relations. However, before that court could resolve the case,
Agency is such that it was the latter who hired and assigned the the Labor Code was enacted and the case was transferred to the
guards who kept watching over the petitioner’s vessels. The NLRC under Arbiter Lomabao.
guards were not known to petitioner who dealt only with the 8. Arbiter Lomabao found the petitioner to be an employer of the
agency on matters pertaining to the service of the guards. A private respondents and guilty of ULP against them.
lump sum would be paid by the petitioner to the agency who in 9. The NLRC affirmed with the qualification that only those
turn determined and paid the compensation of the individual complainants who are 60 years old or younger and capacitated
watchmen. to discharge their former duties should be reinstated without
3. After the termination of its contract with Marine Security loss of seniority rights and other privileges, and with three
Agency, the petitioner executed a new contract with the years of backwages; and those who could not be so reinstated
Philippine Scout Veterans Security and Investigation Agency should be given separation pay in addition to their backwages
also for the purpose of having its vessels protected for a term of for three years.
one year. 10. Minister of Labor and Office of the President affirmed the
4. Private respondents protested against the termination. NLRC
Respondents claim that that the termination of the contract was
primarily because of misunderstanding that had intervened ISSUE: WON there existed an employer-employee relationship
between the APL represented by your Capt. Morris, and Mr. A. between the petitioner and the individual watchmen of the Marine
Security Agency who are alleged to be members of the respondent
union?
RULING: NO. Respondents are not employees of petitioner.
In determining the existence of employer-employee relationship, the
following elements are generally considered, namely: (1) the selection
and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the employee’s
conduct — although the latter is the most important element.”
In the light of the foregoing standards, We fail to see how the
complaining watchmen of the Marine Security Agency can be
considered as employees of the petitioner. It is the agency that recruits,
hires, and assigns the work of its watchmen. Hence, a watchman can
not perform any security service for the petitioner’s vessels unless the
agency first accepts him as its watchman. With respect to his wages,
the amount to be paid to a security guard is beyond the power of the
petitioner to determine. Certainly, the lump sum amount paid by the
petitioner to the agency in consideration of the latter’s service is much
more than the wages of any one watchman. In point of fact, it is the
agency that quantifies and pays the wages to which a watchman is
entitled.
Neither does the petitioner have any power to dismiss the security
guards. In fact, We fail to see any evidence in the record that it wielded
such a power. It is true that it may request the agency to change a
particular guard. But this, precisely, is proof that the power lies in the
hands of the agency.
Since the petitioner has to deal with the agency, and not the individual
watchmen, on matters pertaining to the contracted task, it stands to
reason that the petitioner does not exercise any power over the
watchmen’s conduct. Always, the agency stands between the petitioner
and the watchmen; and it is the agency that is answerable to the
petitioner for the conduct of its guards.
There are other considerations that militate against a finding of
employee-employer relationship between the petitioner and the
individual watchmen of the agency. To start with, the contract between
the petitioner and the agency has, by its own terms, expired. Indeed,
after the expiration of the contract with respondent Marine Security
Agency, the petitioner engaged the services of the Philippine Scout
Veterans Security and Investigation Agency for a period of one year
also. In other words, to hold the complaining members of respondent
agency as the employees of the petitioner, and therefore, entitled to
labor benefits as such, would violate the petitioner’s exclusive
prerogative to determine whether it should enter into a security service
contract or not, i.e., whether it should hire others or not.
There is no employer-employee relationship between the petitioner
and the members of the respondent agency, it should necessarily
follow that the petitioner cannot be guilty of unfair labor practice as
charged by the private respondents. Under Republic Act 875, Section
13, an unfair labor practice may be committed only within the context
of an employer-employee relationship.
DISPOSITIVE: American President Lines won
DOCTRINE: In determining the existence of employer-employee
relationship, the following elements are generally considered, namely:
(1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct — although the latter is the most important
element.”

--------------------------------------------------
CASE 109 MARIO TIU v. NLRC and RBS
G.R. No. 123276 / 227 SCRA 680
August 18, 1997
Digest by: Thea Denilla
--------------------------------------------------
Petitioner: Mario Tiu and Jonathan Hayuhay
Respondent: National Labor Relations Commission and Republic
Broadcasting System, Inc. (Channel 7)
Ponente: Padilla, J.
Topic: Burden of Proof
FACTS:
1. Republic Broadcasting System Inc. (RBS) had a collective
bargaining agreement with GMA Channel 7 Employees Union
(GMAEU).
2. After the first quarter of 1991, RBS management noted the
huge amount of overtime expense it incurred during the said
period, which averaged to P363,085.26 monthly.
3. To streamline its operations, the president of RBS created a
committee to formulate guidelines on the availment of leaves
and rendering of overtime work.
4. RBS, through its personnel department, furnished GMAEU a
copy of the new guidelines and requested the latter to comment
thereon. The union did not file any comment.
5. RBS officially issued the implementing guidelines "on the
availment of leaves and rendering of overtime services."
6. GMAEU filed a Notice of Strike with the National Conciliation
and Mediation Board (NCMB) based on unfair labor practices
allegedly committed by RBS.
7. he union struck. On the same day, RBS filed a complaint for
illegal strike and unfair labor practice against GMAEU and its
fourteen (14) officers (hereafter, illegal strike case)
8. LABOR ARBITER: found no factual and legal ground to hold
RBS guilty of unfair labor practices against the Union.
9. NLRC: affirmed the labor arbiter's decision in a resolution
10. Fourteen (14) GMA Channel 7 Employees Union (GMAEU)
officers involved in the strike, ten (10) officers did not appeal
the labor arbiter's decision and opted to avail of the optional
retirement benefits under the collective bargaining agreement
with private respondent Republic Broadcasting System Inc.
(RBS)
11. The remaining four (4) union officers, namely: Mario Tiu, Nani
Hayuhay, Bong Cerezo and Virgilio Santoyo, appealed to the
NLRC.
12. The labor arbiter continued to hear the illegal strike case filed
by RBS against GMAEU.
13. The labor arbiter rendered judgment declaring the strike illegal
and the union officers who knowingly participated in the illegal
strike to have validly lost their employment status.
14. Hence, this petition for certiorari under Rule 65 of the Rules of
Court .
ISSUE
1. Whether or not the NLRC committed grave abuse of discretion
when it upheld the labor arbiter’s decision that petitioners
staged an illegal strike
RULING: 1. No, NLRC was correct in upholding the labor arbiter’s
decision.
No, because the notice of strike filed by the union before the NCMB
on 12 July 1991 contained general allegations that RBS management
committed unfair labor practices by its gross violation of the economic
provisions in their collective bargaining agreement and by alleged acts
of coercion, union interference and discrimination which amounted to
union busting. It is the union, therefore, who had the burden of
proof to present substantial evidence to support these allegations.
The Court affirms the factual finding of the labor arbiter and the
NLRC that" there was no strikeable issue to support respondent's (the
Union) subject strike." The evidence show that the union anchored its
position on alleged unfair labor practices in order to evade not only the
grievance machinery but also the no strike clause in their collective
bargaining agreement with RBS.
strike based on alleged unfair labor practices it did not even bother to
substantiate during the conciliation proceedings. It is not enough that
the union believed that the employer committed acts of unfair labor
practice when the circumstances clearly negate even a prima facie
showing to warrant such a belief.

RBS did not issue its implementing guidelines dated 24 June 1991
concerning the availment of leaves and rendering of overtime services
in an arbitrary manner. The union was promptly informed that RBS'
decision was based on its management prerogative to regulate all
aspects of employment, subject of course to well-defined limitations
imposed by law or by contract.

Even assuming arguendo that in the issuance of said guidelines RBS

may have violated some provisions in the collective bargaining
agreement, there was no palpable showing that the same was
a flagrant and/or malicious refusal to comply with its economic
provisions. (Book V Implementing Rules of the Labor Code, Rule
XIII, Section 1) Hence, the law mandates that said violation "shall not
be considered unfair labor practice and shall not be strikeable."

The bottom line is that the union should have immediately resorted to
the grievance machinery established in their agreement with RBS. In
disregarding said procedure the union leaders who knowingly
participated in the illegal strike "have acted unreasonably, and, as such,
the law cannot interpose its hand to protect them from the
consequences of their behavior" (National labor Union v. Philippine
Match Factory, 70 Phil. 300; United Seamen's Union v. Davao
Shipowner's Association, 20 SCRA 1226)

DISPOSITIVE: WHEREFORE, premises considered, the petition is

hereby DISMISSED, there being no substantial evidence of grave
abuse of discretion amounting to lack or excess of jurisdiction on the
part of the NLRC.

DOCTRINE: In the case at bar, the facts and the evidence did not
establish even at least a rational basis why the union would wield a

---------------------------------------------------------------------
CASE 110. Central Azucarera De Bais Employees Union-NFL v.
Central Azucarera De Bais, Inc.
G.R. No. 186605
November 17, 2010
Digest by: Olive Cachapero
---------------------------------------------------------------------
Topic: ULP; Burden of proof
FACTS:
1) Petitioner Central Azucarera De Bais Employees Union-National
Federation of Labor (CABEU-NF) is a duly registered labor union
and a certified bargaining agent of respondent Central Azucarera
De Bais, Inc. (CAB).
2) CABEU-NFL sent CAB a proposed CBA seeking increases in
the daily wage and vacation and sick leave benefits of the
monthly employees and the grant of leave benefits and 13 th month
pay to seasonal workers.
3) CAB responded with a counter-proposal to the effect that the
bonuses production bonus incentive and special production bonus
and incentives be maintained. In addition, respondent CAB agreed
to execute a pro-rated increase of wages every time the
government would mandate an increase in the minimum wage.
CAB, however, did not agree to grant additional and separate
Christmas bonuses.
4) CAB received an Amended Union Proposal sent by CABEU-NFL
reducing its previous demand regarding wages and bonuses. CAB,
however, maintained its position on the matter. Thus, the
collective bargaining negotiations resulted in a deadlock.
5) CABEU-NFL filed a Notice of Strike with the NCMB. NCMB
then assumed conciliatory-mediation jurisdiction and summoned
the parties to conciliation conferences.
6) CAB replied declared purpose of the requested conciliation
meeting has already been rendered moot and academic because:
(1) the Union has already lost its majority status by reason of the
disauthorization and withdrawal of support thereto by more than
90% of the rank and file employees in the bargaining unit, and (2)
the workers themselves have organized themselves into a new
Union known as Central Azucarera de Bais Employees Labor
Association (CABELA) and after obtaining their registration
certificate and making due representation that it is a duly
organized union representing almost all the rank and file workers
in the Central, had concluded a new CBA with CAB which had
been duly ratified by the rank and file workers constituting 91%
of the collective bargaining unit.
7) NCMB did not pursue further negotiation.
8) CABEU-NFL filed a Complaint for ULP for the formers refusal
to bargain with it.
9) LA: dismissed the complaint. It cannot be said that CAB refused
to negotiate or that it violated its duty to bargain collectively in
light of its active participation in the past CBA negotiations at the
plant level as well as in the NCMB.
10) NLRC: reversed LA and found CAB guilty of ULP. CAB
violated its duty to bargain with complainant when during the
pendency of the conciliation proceedings before the NCMB it
concluded a CBA with another union as a consequence, it refused
to resume negotiation with complainant upon the latter’s demand.
11) CA: absolved CAB of ULP. CABEU-NFL failed in its burden of
proof to present substantial evidence to support the allegation of
unfair labor practice. The assailed Decision and Resolution of
public respondent referred merely to two circumstances which
allegedly support the conclusion that the presumption of good
 faith had been rebutted and that bad faith was extant in
petitioner’s actions. To recall, these circumstances are: (a) the
execution of a supposed CBA with another labor union,
CABELA; and (b) CAB’s sending of the letter to NCMB seeking
to call off the collective bargaining negotiations. These, however,
are not enough to ascribe the very serious offense of ULP upon
petitioner.
ISSUE: WON CAB was guilty of acts constituting unfair labor
practice by refusing to bargain collectively. NO
RULING:
NO. CABEU-NFL, in simply relying on the said letter-response,
failed to substantiate its claim of unfair labor practice to rebut the
presumption of good faith.
on the said letter-response, failed to substantiate its claim of unfair
labor practice to rebut the presumption of good faith.
Dispositive: CAB won.
Doctrine: For a charge of unfair labor practice to prosper, it must be
shown that CAB was motivated by ill will, bad faith, or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good
customs, or public policy, and, of course, that social humiliation,
wounded feelings or grave anxiety resulted x x x in suspending
negotiations with CABEU-NFL. Basic is the principle that good faith
is presumed and he who alleges bad faith has the duty to prove the
same.

For a charge of unfair labor practice to prosper, it must be shown

that CAB was motivated by ill will, bad faith, or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good
customs, or public policy, and, of course, that social humiliation,
wounded feelings or grave anxiety resulted x x x in suspending
negotiations with CABEU-NFL. Notably, CAB believed that CABEU-
NFL was no longer the representative of the workers. It just wanted to
foster industrial peace by bowing to the wishes of the overwhelming
majority of its rank and file workers and by negotiating and
concluding in good faith a CBA with CABELA. Such actions of CAB
are nowhere tantamount to anti-unionism, the evil sought to be
punished in cases of unfair labor practices.

Burden of Proof
Furthermore, basic is the principle that good faith is presumed and he
who alleges bad faith has the duty to prove the same. By imputing bad
faith to the actuations of CAB, CABEU-NFL has the burden of
proof to present substantial evidence to support the allegation of
unfair labor practice. Apparently, CABEU-NFL refers only to the
circumstances mentioned in the letter-response, namely, the execution
of the supposed CBA between CAB and CABELA and the request to
suspend the negotiations, to conclude that bad faith attended CABs
actions. The Court is of the view that CABEU-NFL, in simply relying

----------------------------------------------
CASE 111 Union of Filipro Employees-Drug, Food and Allied
Industries Unions-KMU vs. NLRC
G.R. No. 158930-31
August 22, 2006
Digest by: Angelo Lopez (Facts from Kaye)
--------------------------------------------------------------------------------
Petitioner: Union of Filipro Employees – Drug, Food and Allied
Industries Unions – Kilusang mayo Uno (UFE-DFA-KMU)
Respondent: Nestl Philippines, Inc.
Ponente: J. Chico-Nazario
Topic: Unfair Labor Practice – Requisites: Burden of Proof
FACTS:
1. In consideration of the impending expiration of the existing
CBA between Nestl and UFE-DFA-KMU, Presidents of the
Alabang and Cabuyao Divisions of the Union, Pasco and
Fortuna, informed Nestl of their intent to open our new CB
Negotiation for the year 2001-2004 as early as June 2001
2. Nestl acknowledged receipt of the letter; also informed the
Union that it was preparing its counter-proposal and proposed
ground rules that shall govern the conduct of the CB
negotiations
3. In another letter addressed to Union Cabuyao Division, Nestle
underscored its position that unilateral grants, one-time
company grants, company-initiated policies and programs,
which include, but are not limited to the Retirement Plan,
Incidental Straight Duty Pay and Calling Pay Premium, are by
their very nature not proper subjects of CBA negotiations and
therefore shall be excluded therefrom; clarified that with the
closure of the Alabang Plant, the CBA negotiations will only be
applicable to the covered employees of the Cabuyao Plant;
hence, the Cabuyao Division became the sole bargaining unit
involved
4. Dialogue between the company and union ensued
5. Nestl requested the NCMB to conduct preventive mediation
proceedings between it and the Union
6. Conciliation proceedings nevertheless proved ineffective.
7. Complaining, in essence, of bargaining deadlock pertaining
to economic issues, i.e., retirement (plan), panel
composition, costs and attendance, and CBA, UFE-DFA-
KMU filed a Notice of Strike; One week later, another strike
was filed by the Union, this time predicated on Nestl’s
alleged unfair labor practices i.e., bargaining in bad faith in
that it was setting pre-conditions in the ground rules by
refusing to include the issue of the Retirement Plan in the
CBA negotiations.
8. Nestl filed with the DOLE a Petition for Assumption of
Jurisdiction, praying that Secretary of DOLE assume
jurisdiction over the labor dispute
9. Sec. Sto. Tomas: assumed jurisdiction; strike enjoined
10. Union sought reconsideration; denied
11. Despite efforts by NCMB, employee members of Union went
on strike (Cabuyao Plant)
12. Sec. Sto. Tomas issued yet another Order directing:
- the members of UFE-DFA-KMU to return-to-work within
twenty-four (24) hours from receipt of such Order;
- Nestl to accept back all returning workers under the same
terms and conditions existing preceding to the strike;
- both parties to cease and desist from committing acts
inimical to the on-going conciliation proceedings leading to
the further deterioration of the situation; and
- the submission of their respective position papers within
ten (10) days from receipt thereof.
13. Nestl and Union filed their respective position papers
14. Union filed several pleadings; Eventually filed a petition for
certiorari with application for the issuance of TRO or a WPI
before CA
15. Then acting Sec of DOLE Brion came out with an order
recognizing that the present Retirement Plan at Cabuyao Plant
is a unilateral grant that the parties have expressly so
recognized; all union demands not covered by the provisions of
CBA are denied, etc.
16. Union moved to reconsider; denied
 17. Both parties appealed Basic is the principle that good faith is presumed and he who alleges
18. Hence, these petitions for review on certiorari bad faith has the duty to prove the same. By imputing bad faith unto
the actuations of Nestl, it was UFE-DFA-KMU, therefore, who had the
burden of proof to present substantial evidence to support the
ISSUE: allegation of unfair labor practice.
WON Nestle has burden of proving bad faith

RULING:
No, basic is the principle that good faith is presumed and he who
alleges bad faith has the duty to prove the same. By imputing bad faith
unto the actuations of Nestl, it was UFE-DFA-KMU, therefore, who
had the burden of proof to present substantial evidence to support the
allegation of unfair labor practice. A perusal of the allegations and
arguments raised by UFE-DFA-KMU in the Memorandum will readily
disclose that it failed to discharge said onus probandi as there is still a
need for the presentation of evidence other than its bare contention of
unfair labor practice in order to make certain the propriety or
impropriety of the unfair labor practice charge hurled against Nestl.
Under Rule XIII, Sec. 4, Book V of the Implementing Rules of the
Labor Code:

x x x. In cases of unfair labor practices, the notice of strike shall as far

as practicable, state the acts complained of and the efforts to resolve
the dispute amicably. [Emphasis supplied.]

Except for the assertion put forth by UFE-DFA-KMU, neither the

second Notice of Strike nor the records of these cases substantiate a
finding of unfair labor practice. It is not enough that the union believed
that the employer committed acts of unfair labor practice when the
circumstances clearly negate even a prima facie showing to warrant
such a belief.

DISPOSITIVE: WHEREFORE, in view of the foregoing, the

Petition in G.R. No. 158930-31 seeking that Nestl be declared
to have committed unfair labor practice in allegedly setting a
precondition to bargaining is DENIED.

DOCTRINE:

--------------------------------------------------
CASE 112 Caltex Filipino Managers and Supervisors Assn. v. CIR
GR NO./ SCRA NO. L-30632-33
Date April 11, 1972
Digest by: Anna Beatrice Tarrosa
--------------------------------------------------
Petitioner: CALTEX FILIPINO MANAGERS AND
SUPERVISORS ASSOCIATION
Respondent: COURT OF INDUSTRIAL RELATIONS, CALTEX
(PHILIPPINES), INC., W.E. MENEFEE and B.F. EDWARDS
Ponente: VILLAMOR, J
Topic: PART VII - UNFAIR LABOR PRACTICE
Interpretation
FACTS:
1. The Caltex Filipino Managers and Supervisors' Association is a
labor organization of Filipino managers supervisors in Caltex
(Philippines), Inc., respondent Company in this proceeding. After the
Association was registered as a labor organization it sent a letter to the
Company on January 21, 1965 informing the latter of the former's
registration; the Company replied inquiring on the position titles of the
employees which the Association sought to represent. On February 8,
1965 the Association sent a set of proposals to the Company wherein
one of the demands was the recognition of the Association as the duly
authorized bargaining agency for managers and supervisors in the
Company. To this the Company countered stating that a distinction
exists between representatives of management and individuals
employed as supervisors and that it is Company's belief that
managerial employees are not qualified for membership in a labor
organization; hence, it is digested that the Association institute a
certification proceeding so as to remove any question with regard to
position titles that should be included in the bargaining unit. The
Association felt disinclined to follow the suggestion of the Company 1
and so on February 22, 1965 the Company initiated a certification
proceeding docketed as Case 1484-MC.
2. On March 8, 1965 the Association filed notice to strike giving the
following reasons:
Refusal to bargain in good faith and to act on demands, a copy of
which is enclosed; resort to union-busting tactics in order to
discourage the activities of the undersigned association and its
members, including discrimination and intimidation of officers and
members of the association and circulation of promises of immediate
benefits to be given by the company to its employees, officers and
members of this association or those intending to join the same, if the
employees concerned in due course will vote against the selection of
this association as the exclusive collective bargaining unit for
managers and supervisors of the Company in the petition for
certification the latter filed. (Annex "A" of Annex "A", Petition).
On March 29, 1965, during the hearing of the certification
proceedings, Judge Tabigne cautioned the parties to maintain the status
quo; he specifically advised the employees not to go on strike, making
it clear, however, that in the presence of unfair labor practices they
could go on strike even without any notice. 2
3. On the basis of the strike notice filed on March 8, 1965 and in view
of acts committed by the Company which the Association considered
as constituting unfair labor practice, the Association struck on April
22, 1965, after the efforts exerted by the Bureau of Labor Relations to
settle the differences between the parties failed. Then, through an
"Urgent Petition" dated April 26, 1965 filed as Case No. 1484-MC(1),
or as an incident of the certification election proceedings (Case No.
1484-MC), the Company prayed that the strike of respondent Caltex
Filipino Managers and Supervisors Association be declared illegal;
4. Such urgent petition was frontally met by the Association with a
motion to dismiss questioning the jurisdiction of the industrial court.
The motion to dismiss was opposed by the Company and on May 17,
1965 the trial court denied the same. Not satisfied with the order of
May 17, 1965, the Association moved for its reconsideration before
respondent court en banc.
Because of the settlement between the parties on May 30, 1965 of
some of their disputes, the Association filed with respondent court
under date of June 3, 1965 a manifestation (to which was attached a
copy of the return-to-work agreement signed by the parties on May 30,
1965), to the effect that the issues in Case No. 1484-MC (1) had
become moot and academic. Under date of June 15, 1965 the
Company filed a counter-manifestation disputing the representations of
the Association on the effect of the return-to-work agreement. On the
basis of the manifestation and counter-manifestation, respondent court
en banc issued a resolution on August 24, 1965 allowing the
withdrawal of the Association's motion for reconsideration against the
order of May 17, 1965, on the theory that there was justification for
such withdrawal.
5. Relative to the resolution of August 24, 1965 the Company filed a
motion for clarification which the Association opposed on September
22, 1965, for it contended that such motion was in reality a motion for
reconsideration and as such filed out of time. But respondent court
brushed aside the Association's opposition and proceeded to clarify the
resolution of August 24, 1965 to mean that the Company was not
barred from continuing with Case No. 1484-MC(1)
6. trial court ruled in its order of February 15, 1966 that under the
return-to-work agreement the Company had reserved its rights to
prosecute Case No. 1484-MC(1) and, accordingly, directed that the
case be set for hearing covering the alleged illegality of the strike.
Within the prescribed period the Association filed a motion for
reconsideration of the February 15, 1966 order to which motion the
Company filed its opposition and, in due course, respondent court en
banc issued its resolution dated March 28, 1966 affirming the order.
Appeal from the interlocutory order was elevated by the Association to
this Court in G.R. No. L-25955, but the corresponding petition for
review was summarily "DISMISSED for being premature" under this
court's resolution of May 13, 1966.
ISSUE/S: whether the strike staged by the Association on April 22,
1965 is illegal
RULING: No.
To begin with, we view the return-to-work agreement of May 30, 1965
as in the nature of a partial compromise between the parties and, more
important, a labor contract; consequently, in the latter aspect the same
"must yield to the common good" (Art. 1700, Civil Code of the
Philippines) and "(I)n case of doubt ... shall be construed in favor of
the safety and decent living for the laborer" (Art. 1702, ibid). To our
mind when the Company unqualifiedly bound itself in the return-to-
work agreement that all employees will be taken back "with the same
employee status prior to April 22, 1965," the Company thereby made
manifest its intention and conformity not to proceed with Case No.
1484-MC, (c) relating the illegality of the strike incident. For while it
is true that there is a reservation in the return-to-work agreement as
follows:
6. The parties agree that all Court cases now pending shall continue,
including CIR Case No. 1484-MC.
we think the same is to be construed bearing in mind the conduct and
intention of the parties. The failure to mention Case No. 1484-MC(1)
while specifically mentioning Case No. 1484-MC, in our opinion, bars
the Company from proceeding with the former especially in the light
of the additional specific stipulation that the strikers would be taken
back with the same employee status prior to the strike on April 22,
1965. The records disclose further that, according to Atty. Domingo E.
de Lara when he testified on October 9, 1965, and this is not seriously
disputed by private respondents, the purpose of Paragraph 10 of the
return-to-work agreement was, to quote in part from this witness, "to
secure the tenure of employees after the return-to-work agreement
considering that as I understand there were demotions and suspensions
of one or two employees during the strike and, moreover, there was
this incident Case No. 1484-MC(1)" (see Brief for the Petition pp. 41-
42). To borrow the language of Justice J.B.L. Reyes in Citizens Labor
Union Pandacan Chapter vs. Standard Vacuum Oil Company (G.R.
No. L-7478, May 6, 1955), in so far as the illegality of the strike is
concerned in this proceeding and in the light of the records.
... the matter had become moot. The parties had both abandoned their
original positions and come to a virtual compromise and agreed to
resume unconditionally their former relations. To proceed with the
declaration of illegality would not only breach this understanding,
freely arrived at, but to unnecessarily revive animosities to the
prejudice of industrial peace. (Emphasis supplied)
Conceding arguendo that the illegality incident had not become moot
and academic, we find ourselves unable to agree with respondent court
to the effect that the strike staged by the Association on April 22, 1965
was unjustified, unreasonable and unwarranted that it was declared in
open defiance of an order in Case No. 1484-MC not to strike; and that
the Association resorted to means beyond the pale of the law in the
prosecution of the strike. As adverted to above, the Association filed
its notice to strike on March 8, 1965, giving reasons therefor any one
of which is a valid ground for a strike.
In addition, from the voluminous evidence presented by the
Association, it is clear that the strike of the Association was declared
not just for the purpose of gaining recognition as concluded by
respondent court, but also for bargaining in bad faith on the part of the
Company and by reason of unfair labor practices committed by its
officials. But even if the strike were really declared for the purpose of
recognition, the concerted activities of the officers and members of the
Association in this regard cannot be said to be unlawful nor the
purpose thereof be regarded as trivial. Significantly, in the voluntary
return-to-work agreement entered into between the Company and the
Association, thereby ending the strike, the Company agreed to
recognize for membership in the Association the position titles
mentioned in Annex "B" of said agreement. 3 This goes to show that
striking for recognition is productive of good result in so far as a union
is concerned.
Besides, one of the important rights recognized by the Magna Carta of
Labor is the right to self-organization and we do not hesitate to say
that is the cornerstone of this monumental piece of labor legislation.
Indeed, because of occasional delays incident to a certification
proceeding usually attributable to dilatory tactics employed by the
employer, to a certain extent a union may be justified in resorting to a
strike. We should not be understood here as advocating a strike in
order to secure recognition of a union by the employer. On the whole
we are satisfied from the records that it is incorrect to say that the
strike of the Association was mainly for the purpose of securing
recognition as bargaining agent.
DISPOSITIVE: In favor of petitioners
WHEREFORE, respondent court's resolution en banc dated May 16,
1969, together with the decision dated February 26, 1969, is reversed
and judgment is hereby rendered as follows:
1. In Case No. 1484-MC(1), the Court declares the strike of the Caltex
Filipino Managers and Supervisors' Association as legal in all respects
and, consequently, the forfeit of the employee status of J.J. Mapa,
Dominador Mangalino and Herminigildo Mandanas is set aside. The
Company is hereby ordered to reinstate J.J. Mapa and Dominador
Mangalino to their former positions without loss of seniority and
privileges, with backwages from the time of dismissal on July 1, 1969.
Since Herminigildo Mandanas appears to have voluntarily left the
Company, no reinstatement is ordered as to him.
2. In Case No. 4344-ULP, the Court finds the Company B.F. Edwards
and W.E. Menefee guilty of unfair labor practices and they are
therefore ordered to cease and desist from the same. In this connection,
the Company is furthermore directed to pay backwages to the striking
employees from April 22, 1965 to May 30, 1965 and to pay attorney's
fees which are hereby fixed at P20,000.00.
Costs against private respondents.
DOCTRINE: . What is clearly within the law is the concerted activity
of cessation of work in order that a union's economic demands may be
granted or that an employer cease and desist from the unfair labor
practice. That the law recognizes as a right.
-------------------------------------------
113. Republic Savings Bank v. CIR
G.R. No. L-20303
September 27, 1967
Digested by: Carl Au
--------------------------------------------------
Petitioner: REPUBLIC SAVINGS BANK (now REPUBLIC BANK)
Respondent: COURT OF INDUSTRIAL RELATIONS, ROSENDO
T. RESUELLO, BENJAMIN JARA, FLORENCIO ALLASAS,
DOMINGO B. JOLA, DIOSDADO S. MENDIOLA, TEODORO DE
LA CRUZ, NARCISO MACARAEG and MAURO A. ROVILLOS
Ponente: CASTRO, J.
FACTS:
1. Republic Savings Bank (now Republic Bank or RB) terminated
respondents Resuello, Jola et al, for having written and
published "a patently libelous letter, tending to cause the
dishonor, discredit or contempt not only of officers and
employees and employer bank itself."
2. Respondents had written to the bank president, Ramon Racelis,
a letter-charge, demanding his resignation on the grounds of
immorality, nepotism in the appointment andfavoritism as well
as discrimination in the promotion of RBemployees. CIR ruled
that RB’s act of dismissing the 8 respondent employees
constituted an unfair labor practice within the meaning and
intendment of the Industrial Peace Act (RA 875).RB appealed.
It still maintains that the discharge was for cause.
3. RB argued that CIR should have dismissed the complaint
because the discharge of the respondents had nothing to do
with their union activities as the latter in fact admitted at the
hearing that the writing of the letter-charge was not a "union
action" but merely their "individual" act.
ISSUE/S: WON the dismissal of the 8 employees by RB constituted
unfair labor practice within the meaning and intendment of the
Industrial Peace Act?
RULING: YES. Even assuming that respondents acted in their
individual capacities when they wrote the letter-charge they were
nonetheless protected for they were engaged in concerted activity in
the exercise of their right of self-organization which includes
concerted activity for mutual aid and protection; and interference with
which constitutes an unfair labor practice.
The joining in protests or demands, even by a small group of
employees, if in furtherance of their interests, is a concerted activity
protected by the Industrial Peace Act. It is not necessary that union
activity be involved or that collective bargaining be contemplated.
Instead of stifling criticism, the Bank should have allowed the
respondents to air their grievances. Good faith bargaining required of
the Bank an open mind and a sincere desire to negotiate over
grievances.
The grievance committee, created in the collective bargaining
agreements, would have been an appropriate forum for such
negotiation. Indeed, the grievance procedure is a part of the continuous
process of collective bargaining. It is intended to promote, as it were, a
friendly dialogue between labor and management as a means of
maintaining industrial peace.
DOCTRINE: Even assuming that respondents acted in their
individual capacities when they wrote the letter-charge they were
nonetheless protected for they were engaged in concerted activity in
the exercise of their right of self-organization which includes
concerted activity for mutual aid and protection; and interference with
which constitutes an unfair labor practice.
-------------------------------------------------------------------------------------
CASE 114 Hacienda Fatima vs. National Federation of Sugarcane
Workers-Food and General Trade
G.R. No. 149440 | January 28, 2003
Digest by: Kayelyn Lat
------------------------------------------------------------------------------------
Petitioner: Hacienda Fatima and/or Patricio Villegas, Alfonso Villegas
and Cristine Segura
Respondent: National Federation of Sugarcane Workers-Food and
General Trade
Ponente: J. Panganiban
Topic: Acts Violative of Right to Self-Organization: Interference,
Restraint and Coercion
FACTS:
1. Contrary to the findings of the LA that complainants
(respondents) refused to work and/or were choosy in the kind
of jobs they wanted to perform, the records is replete with
complainants’ persistence and dogged determination in going
back to work.
2. Indeed, it would appear that respondents did not look with
favor workers’ having organized themselves into a union. Thus,
when complainant union was certified as the collective
bargaining representative in the certification elections,
respondents under the pretext that the result was on appeal,
refused to sit down with the union for the purpose of entering
into a collective bargaining agreement.
3. Moreover, the workers including complainants herein were not
given work for more than one month.
4. In protest, complainants staged a strike which was however
settled upon the signing of a Memorandum of Agreement
which stipulated among others that:
(a) The parties will initially meet for CBA negotiations on the 11th
day of January 1991 and will endeavor to conclude the same
within thirty (30) days.
(b) The management will give priority to the women
workers who are members of the union in case work
relative x x x or amount[ing] to gahit and [dipol] arises
(c) Ariston Eruela, Jr. will be given back his normal work
load which is six (6) days in a week The management
will provide fifteen (15) wagons for the workers and
that existing workforce prior to the actual strike will be
given priority. However, in case the said workforce
would not be enough, the management can hire
additional workers to supplement them.
(d) The management will not anymore allow the scabs,
numbering about eighteen (18) workers[,] to work in
the hacienda; and
(e) The union will immediately lift the picket upon signing
of this agreement.’
5. Alleging that complainants failed to load the fifteen wagons,
respondents reneged on its commitment to sit down and
bargain collectively. Instead, respondent employed all means
including the use of private armed guards to prevent the
organizers from entering the premises.
6. Starting September 1991, respondents did not any more give
work assignments to the complainants forcing the union to
stage a strike on January 2, 1992. But due to the conciliation
efforts by the DOLE, another Memorandum of Agreement was
signed by the complainants and respondents
- List of names of affected union members attached shall be
referred to the Hacienda payroll of 1990 and determined
WON concerned members are hacienda workers
- In case conflict or disagreement arises in the determination
of the status of the hacienda works, agree to submit to VA
7. Parties met and the Minutes of the Conciliation Meeting
showed as follows:
- Meeting started at 10AM
- List of employees based on who received their 13th month
pay
- 4 are deemed not employees
 - 12 shall be reinstated immediately upon availability of
work
8. When respondents again reneged on its commitment,
complainants filed the present complaint
9. But, complainants were being accused of refusing to work and
being choosy in the kind of work they have to perform
10. CA:
- while the work of respondents was seasonal in nature, they
were considered to be merely on leave during the offseason
and were therefore still employed by petitioners.
- Moreover, the workers enjoyed security of tenure. Any
infringement upon this right was deemed by the CA to be
tantamount to illegal dismissal.
- The appellate court found neither “rhyme nor reason in
petitioner’s argument that it was the workers themselves
who refused to or were choosy in their work.” As found by
the NLRC, the record of this case is “replete with
complainants’ persistence and dogged determination in
going back to work.”
- Petitioners were guilty of ULP
11. Hence, this petition.
ISSUE: Whether or not petitioner was guilty of unfair labor
practice for interfering with the workers’ right to self-organization
HELD: YES
RATIO:
The Court finds no reason to disturb the CA’s dismissal of what
petitioners claim was their valid exercise of a management
prerogative. The sudden changes in work assignments reeked of bad
faith. These changes were implemented immediately after respondents
had ‘organized themselves into a union and started demanding
collective bargaining. Those who were union members were
effectively deprived of their jobs. Petitioners’ move actually amounted
to unjustified dismissal of respondents, in violation of the Labor Code.
“Where there is no showing of clear, valid and legal cause for the
termination of employment, the law considers the matter a case of
illegal dismissal and the burden is on the employer to prove that the
termination was for a valid and authorized cause.” In the case at bar,
petitioners failed to prove any such cause for the dismissal of
respondents who are regular employees.
The NLRC also found herein petitioners guilty of unfair labor practice.
It ruled as follows:
“Indeed, from respondents’ refusal to bargain, to their acts of
economic inducements resulting in the promotion of those who
withdrew from the union, the use of armed guards to prevent the
organizers to come in, and the dismissal of union officials and
members, one cannot but conclude that respondents did not want a
union in their hacienda—a clear interference in the right of the
workers to self-organization.”
We uphold the CA’s affirmation of the above findings.
DISPOSITIVE PORTION: Respondent WON.
DOCTRINE: The Court finds no reason to disturb the CA’s dismissal
of what petitioners claim was their valid exercise of a management
prerogative. The sudden changes in work assignments reeked of bad
faith. These changes were implemented immediately after respondents
had ‘organized themselves into a union and started demanding
collective bargaining. Those who were union members were
effectively deprived of their jobs. Petitioners’ move actually amounted
to unjustified dismissal of respondents, in violation of the Labor Code.

-------------------------------------------------------------------
CASE 115 Scoty’s Department Store v. Micaller
GR No. L-8116
August 25, 1956
Digest by: Jen Balmeo
-------------------------------------------------------------------
Petitioner: Scoty’s Dept Store
Respondent: Nena Micaller
Ponente: J. Bautista Angelo
Topic: Interrogation
FACTS:
Nena Micaller was employed as a salesgirl in the Scoty's Department
Store situated at 615 Escolta, Manila. This store was owned and
operated by Yu KiLam, Richard Yang, Yu Si Kiao and Helen Yang.
Pursuant to section 5(b) of the Industrial Peace Act, Nena Micaller
filed charges of unfair labor practice against her above employers
alleging that she was dismissed by them because of her membership in
the National Labor Union and that, prior to her separation, said
employers had been questioning their employees regarding their
membership in said union and had interfered with their right to
organize under the law. The employers denied the charge. They
claimed that the complainant was dismissed from the service because
of her misconduct and serious disrespect to the management and her
co employees so much so that several criminal charges were filed
against her with the city fiscal of Manila who, after investigation, filed
the corresponding information’s against her and the same are now
pending trial in court.
The Court of industrial relation ruled in favor of Nina Micaller and
impose fine against the petitioner.
ISSUE: WON the Court of Industrial Relations has jurisdiction to
impose the penalties prescribed in section 25 of Republic Act No.
875.
HELD: NO. This is against the due process guaranteed by
our Constitution. It may be contended that this gap may be sub served
by requiring the Court of Industrial Relations to observe strictly the
rules applicable to criminal cases to meet the requirements of the
Constitution, but this would be tantamount to amending the law which
is not within the province of the judicial branch of our Government.
In conclusion, our considered opinion is that the power to impose the
penalties provided for in section 25 of Republic Act No. 875 is lodged
in ordinary courts, and not in the Court of Industrial Relations,
notwithstanding the definition of the word "Court" contained in
section 2 (a) of said Act. Hence, the decision of the industrial court in
so far as it imposes a fine of P100 upon petitioners is illegal and
should be nullified.
The procedure laid down by law to be observed by the Court of
Industrial Relations in dealing with unfair labor practice cases negates
those constitutional guarantees to the accused. And this is so because,
among other things, the law provides that "the rules of evidence
prevailing in courts of law or equity shall not be controlling and it is
the spirit and intention of this Act that the Court of Industrial Relations
and its members and Hearing Examiners shall use every and all
reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law, or procedure."
It is likewise enjoined that "the Court shall not be bound solely by the
evidence presented during the hearing but may avail itself of all other
means such as (but not limited to) ocular inspections and questioning
of well-informed persons which results must be made a part of the
record". All-this means that an accused may be tried without the right
"to meet the witnesses face to face" and may be convicted merely on
preponderance of evidence and not beyond reasonable doubt
DISPOSITIVE: Department Store won. Decision modified.
DOCTRINE: The power to impose the penalties provided for in
section 25 of Republic Act No. 875 is lodged in ordinary courts, and
not in the Court of Industrial Relations, notwithstanding the definition
of the word "Court" contained in section 2(a) of said Act

--------------------------------------------------------------------
CASE 116 PHILIPPINE STEAM NAVIGATION CO. V. PHIL.
MARINE OFFICERS GUILD,
G.R. Nos. L-20667 and 20669 October 29, 1965
Digested by: Lanz Olives
--------------------------------------------------------------------
Petitioner: PHILIPPINE STEAM NAVIGATION CO
Respondents: PHILIPPINE OFFICERS GUILD, ET AL
Nature of the Case:
Ponente: Bengzon, J.P., J.
TOPIC: Acts that violate right to self-organization; interference,
restraint and coercion; interrogation
FACTS:
PMOG (Philippine Marine Officers Guild) sent PHILSTEAM
(Philippine Steam Navigation Co. Inc.) a set of demands with a request
for collective bargaining. Subsequently, PHILSTEAM transmitted its
answer to PMOG, requiring the latter to first prove its representation
of a majority of PHILSTEAM's employees before its demands will be
considered as requested. PHILSTEAM, on the same date, started
interrogating and investigating its captains, deck officers, and
engineers, to find out directly from them if they had joined PMOG or
authorized PMOG to represent them.
A reply was sent by PMOG to the answer of PHILSTEAM, insisting
that PHILSTEAM consider its requests and demands first before
requiring proof of majority representation. PMOG thereafter filed on a
notice of intention to strike stating as reasons therefor PHILSTEAM's
alleged refusal to bargain and unspecified unfair labor practices. The
Department of Labor brought PHILSTEAM and PMOG to a
conference without any success.
The CSA (Cebu Seamen’s Association) had meanwhile also
transmitted its own set of demands to PHILSTEAM. PHILSTEAM
and CSA met. PHILSTEAM therein recognized CSA as representing
the majority of its employees and proceeded to consider CSA's
demands.
PHILSTEAM and CSA signed a collective bargaining agreement. On
the same date, PMOG declared a strike against PHILSTEAM. Around
46 officers of PHILSTEAM joined PMOG's strike; 15 of these later
returned to work, leaving 31 PHILSTEAM officers on strike. Pier 4 of
the North Harbor of the Port of Manila, where PHILSTEAM vessels
docked, was among the areas picketed during the strike.
CIR (Court of Industrial Relations) held that Philippine Steam
Navigation Company, its agents, successors and assigns, to cease and
desist from interrogating and investigating their employees to
determine whether they have authorized Philippine Marine Officers
Guild or any other labor organization to represent them for the purpose
of collective bargaining, discouraging or trying to discourage any of
such employees from remaining as a member of Philippine Marine
Officers Guild or any other labor organization, and encouraging or
trying to encourage any of such employees to join Cebu Seamen's
Association or any other labor organization, and, in any manner,
interfering with, restraining, or coercing their employees in the
exercise of their right to self-organization and other rights guaranteed
in Section 3 of this Act; and offer all of their striking employees
immediate and full reinstatement to their former or substantially
equivalent positions, without back salaries and without prejudice to
their seniority or other rights and privileges, unless they have found
substantially equivalent employment elsewhere during the pendency of
this case.
PHILSTEAM admits that it initiated and carried out an investigation
of its officers as to their membership in PMOG and whether they had
given PMOG authority to represent them in collective bargaining. The
reason for this, PHILSTEAM would, however, aver, was merely to
ascertain for itself the existence of a duty to bargain collectively with
PMOG, a step allegedly justified by PMOG's refusal to furnish proof
of majority representation.
ISSUE: Whether or not PHILSTEAM committed unfair labor
practice by interrogating its employees

RULING: YES.

The respondent court has found that PHILSTEAM's interrogation of

its employees had in fact interfered with, restrained and coerced the
employees in the exercise of their rights to self-organization (Petition,
Annex A, p. 31). Such finding being upon questions of fact, the same
cannot be reversed herein, because it is fully supported by substantial
evidence.

The rule in this jurisdiction is that subjection by the company of its

employees to a series of questionings regarding their membership in
the union or their union activities, in such a way as to hamper the
exercise of free choice on their part, constitutes unfair labor practice
(Scoty's Department Store vs. Micaller, 52 O.G. 5119). PHILSTEAM's
aforestated interrogation squarely falls under this rule.

DISPOSITIVE: PMOG won.

DOCTRINE: An employer is not denied the privilege of interrogating

its employees as to their union affiliation, provided the same is for a
legitimate purpose and assurance is given by the employer that no
reprisals would be taken against unionists. Nonetheless, any employer
who engages in interrogation does so with notice that he risks a finding
of unfair labor practice if the circumstances are such that his
interrogation restrains or interferes with employees in the exercise of
their rights to self-organization.

--------------------------------------------------
117 THE INSULAR LIFE ASSURANCE CO LTD EMPLOYEES
ASSOCIATION V. THE INSULAR LIFE ASSURANCE CO
GR NO. L-25291
January 30, 1971
Digest by: Metha Dawn H. Orolfo
--------------------------------------------------
Petitioner: The Insular Life Assurance Co., Ltd., Employees
Association-Natu, Fgu Insurance Group Workers And Employees
Association-Natu, And Insular Life Building Employees Association-
Natu
Respondent: The Insular Life Assurance Co., Ltd., Fgu Insurance
Group, Jose M. Olbes And Court Of Industrial Relations
Ponente: Castro
Topic: Picketing – Nature and Purpose of Picket Line
FACTS:
1. In a letter dated September 16, 1957, the Unions jointly
submitted proposals to the Companies for a modified renewal of
their respective collective bargaining contracts which were then
due to expire on September 30, 1957. The parties mutually
agreed and to make whatever benefits could be agreed upon
retroactively effective October 1, 1957.
2. Thereafter, in the months of September and October 1957
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." Several
conciliation conferences were held under the auspices of the
Department of Labor wherein the conciliators urged the
Companies to make reply to the Unions' proposals en toto so that
the said Unions might consider the feasibility of dropping their
demand for union security in exchange for other benefits.
However, the Companies did not make any counter-proposals
but, instead, insisted that the Unions first drop their demand for
union security, promising money benefits if this was done.
3. From April 25 to May 6, 1958, the parties negotiated on the labor
demands but with no satisfactory result due to a stalemate on the
matter of salary increases. On May 13, 1958 the Unions
demanded from the Companies final counter-proposals on their
economic demands, particularly on salary increases. Instead of
giving counter-proposals, the Companies on May 15, 1958
presented facts and figures and requested the Unions to submit a
workable formula which would justify their own proposals,
taking into account the financial position of the former.
Forthwith the Unions voted to declare a strike in protest against
what they considered the Companies' unfair labor practices.
4. On May 20, 1958 the Unions went on strike and picketed the
offices of the Insular Life Building at Plaza Moraga.
5. On May 21, 1958 the Companies through their acting manager
and president, the respondent Jose M. Olbes (hereinafter referred
to as the respondent Olbes), 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:
1. Advise the nearest police officer or security guard of your intention
to do so.
2. Take your meals within the office.
3. 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.
4. Enjoy free coffee and occasional movies.
5. Be paid overtime for work performed in excess of eight hours.
6. 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.
 6. The Unions, however, continued on strike, with the exception of
a few unionists who were convinced to desist by the aforesaid
letter of May 21, 1958.
7. the Companies, again through the respondent Olbes, sent
individually to the strikers a letter (exhibit B), quoted hereunder
in its entirety:
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.
ISSUE/S:
WON respondent company guilty of unfair labor practice and violated
the freedom of picketing of its workers (petitioners)?
RULING: YES.
Indeed, it is an unfair labor practice for an employer operating under a
collective bargaining agreement to negotiate or to attempt to negotiate
with his employees individually in connection with changes in the
agreement. And the basis of the prohibition regarding individual
bargaining with the strikers is that although the union is on strike, the
employer is still under obligation to bargain with the union as the
employees' bargaining representative.
Similar actions are illegal as constituting unwarranted acts of
interference. Thus, the act of a company president in writing letters to
the strikers, urging their return to work on terms inconsistent with their
union membership, was adjudged as constituting interference with the
exercise of his employees' right to collective bargaining. It is likewise
an act of interference for the employer to send a letter to all employees
notifying them to return to work at a time specified therein, otherwise
new employees would be engaged to perform their jobs. 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.
Moreover, since exhibit A is a letter containing promises of benefits to
the employees in order to entice them to return to work, it is not
protected by the free speech provisions of the Constitution. The same
is true with exhibit B since it contained threats to obtain replacements
for the striking employees in the event they did not report for work on
June 2, 1958. The free speech protection under the Constitution is
inapplicable where the expression of opinion by the employer or his
agent contains a promise of benefit, or threats, or reprisal
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.
Likewise violative of the right to organize, form and join labor
organizations are the following acts: the offer of a Christmas bonus to
all "loyal" employees of a company shortly after the making of a
request by the union to bargain; wage increases given for the purpose
of mollifying employees after the employer has refused to bargain with
the union, or for the purpose of inducing striking employees to return
to work; the employer's promises of benefits in return for the strikers'
abandonment of their strike in support of their union; and the
employer's statement, made about 6 weeks after the strike started, to a
group of strikers in a restaurant to the effect that if the strikers returned
to work, they would receive new benefits in the form of
hospitalization, accident insurance, profit-sharing, and a new building
to work in.

DISPOSITIVE: Petitioner won.

DOCTRINE: 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.
-------------------------------------------------- PBMEO representatives that workers who belong to the first
CASE 118 PHILIPPINE BLOOMING MILLS EMPLOYMENT and regular shifts, who without previous leave of absence
ORGANIZATION VS PHILIPPINE BLOOMING MILLS CO., approved by the Company, particularly, the officers present
INC who are the organizers of the demonstration, who shall fail to
G.R. No. L-31195 report for work the following morning (March 4, 1969) shall be
June 5, 1973 dismissed, because such failure is a violation of the existing
Digest by: Michelle Vale Cruz CBA and, therefore, would be amounting to an illegal strike;
-------------------------------------------------- 4. A second meeting took place in the afternoon of March 3,
where the company reiterated their appeal that while the
Petitioner: PHILIPPINE BLOOMING MILLS EMPLOYMENT workers may be allowed to participate, those from the 1st and
ORGANIZATION, NICANOR TOLENTINO, FLORENCIO, regular shifts should not absent themselves to participate,
PADRIGANO RUFINO, ROXAS MARIANO DE LEON, otherwise, they would be dismissed. Since it was too late to
ASENCION PACIENTE, BONIFACIO VACUNA, BENJAMIN cancel the plan, the rally took place and the officers of the
PAGCU and RODULFO MUNSOD PBMEO were eventually dismissed for a violation of the ‘No
Respondent: PHILIPPINE BLOOMING MILLS CO., INC. and Strike and No Lockout’ clause of their Collective Bargaining
COURT OF INDUSTRIAL RELATIONS Agreement.
5. Herein petitioners claim that they did not violate the existing
Topic: Acts Violative of Right to Self-Organization CBA because they gave the respondent Company prior notice
of the mass demonstration on March 4, 1969; that the said mass
FACTS: demonstration was a valid exercise of their constitutional
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Blooming freedom of speech against the alleged abuses of some Pasig
decided to stage a mass demonstration in front of Malacañang policemen; and that their mass demonstration was not a
to express their grievances against the alleged abuses of the declaration of strike because it was not directed against the
Pasig Police to be participated by the first shift (6:00 AM-2:00 respondent firm.
PM) workers as well as those working in the regular shifts 6. The lower court decided in favor of the company and the
(7:00 A.M. to 4:00 PM and 8:00 AM to 5:00 PM) in the officers of the PBMEO were found guilty of bargaining in bad
morning of March 4, 1969; faith.
2. After learning about the planned mass demonstration,
Philippine Blooming Mills Inc., called for a meeting with the ISSUE: Whether or not the workers who joined the strike violated the
leaders of the PBMEO. During the meeting, the planned CBA.
demonstration was confirmed by the union. But it was stressed
out that the demonstration was not a strike against the company RULING: NO. Such was a valid exercise of their constitutional right.
but was in fact an exercise of the laborers inalienable
constitutional right to freedom of expression, freedom of The rights of free expression, free assembly and petition, are not only
speech and freedom for petition for redress of grievances. civil rights but also political rights essential to man's enjoyment of his
3. The company asked them to cancel the demonstration for it life, to his happiness and to his full and complete fulfillment. Thru
would interrupt the normal course of their business which may these freedoms the citizens can participate not merely in the periodic
result in the loss of revenue. The Company also warned the establishment of the government through their suffrage but also in the
administration of public affairs as well as in the discipline of abusive
public officers. The citizen is accorded these rights so that he can
appeal to the appropriate governmental officers or agencies for redress
and protection as well as for the imposition of the lawful sanctions on
erring public officers and employees.
While the Bill of Rights also protects property rights, the primacy of
human rights over property rights is recognized. Because these
freedoms are "delicate and vulnerable, as well as supremely precious
in our society" and the "threat of sanctions may deter their exercise
almost as potently as the actual application of sanctions," they "need
breathing space to survive," permitting government regulation only
"with narrow specificity."
Property and property rights can be lost thru prescription; but human
rights are imprescriptible. If human rights are extinguished by the
passage of time, then the Bill of Rights is a useless attempt to limit the
power of government and ceases to be an efficacious shield against the
tyranny of officials, of majorities, of the influential and powerful, and
of oligarchs — political, economic or otherwise.
In the hierarchy of civil liberties, the rights of free expression and of
assembly occupy a preferred position as they are essential to the
preservation and vitality of our civil and political institutions; and such
priority "gives these liberties the sanctity and the sanction not
permitting dubious intrusions."
The superiority of these freedoms over property rights is underscored
by the fact that a mere reasonable or rational relation between the
means employed by the law and its object or purpose — that the law is
neither arbitrary nor discriminatory nor oppressive — would suffice to
validate a law which restricts or impairs property rights. On the other
hand, a constitutional or valid infringement of human rights requires a
more stringent criterion, namely existence of a grave and immediate
danger of a substantive evil which the State has the right to prevent.
The respondent Court of Industrial Relations, after opining that the
mass demonstration was not a declaration of strike, concluded that by
their "concerted act and the occurrence temporary stoppage of work,"
herein petitioners are guilty bargaining in bad faith and hence violated
the collective bargaining agreement with private respondent Philippine
Blooming Mills Co., inc.. Set against and tested by foregoing
principles governing a democratic society, such conclusion cannot be
sustained. The demonstration held petitioners on March 4, 1969 before
Malacañang was against alleged abuses of some Pasig policemen, not
against their employer, herein private respondent firm, said
demonstrate was purely and completely an exercise of their freedom
expression in general and of their right of assembly and petition for
redress of grievances in particular before appropriate governmental
agency, the Chief Executive, again the police officers of the
municipality of Pasig. They exercise their civil and political rights for
their mutual aid protection from what they believe were police
excesses. As matter of fact, it was the duty of herein private respondent
firm to protect herein petitioner Union and its members fro the
harassment of local police officers. It was to the interest herein private
respondent firm to rally to the defense of, and take up the cudgels for,
its employees, so that they can report to work free from harassment,
vexation or peril and as consequence perform more efficiently their
respective tasks enhance its productivity as well as profits. Herein
respondent employer did not even offer to intercede for its employees
with the local police.
In seeking sanctuary behind their freedom of expression well as their
right of assembly and of petition against alleged persecution of local
officialdom, the employees and laborers of herein private respondent
firm were fighting for their very survival, utilizing only the weapons
afforded them by the Constitution — the untrammelled enjoyment of
their basic human rights. The pretension of their employer that it
would suffer loss or damage by reason of the absence of its employees
from 6 o'clock in the morning to 2 o'clock in the afternoon, is a plea
for the preservation merely of their property rights.
As heretofore stated, the primacy of human rights — freedom of
expression, of peaceful assembly and of petition for redress of
grievances — over property rights has been sustained.
The respondent company is the one guilty of unfair labor practice.
Because the refusal on the part of the respondent firm to permit all its
employees and workers to join the mass demonstration against alleged
police abuses and the subsequent separation of the eight (8) petitioners
from the service constituted an unconstitutional restraint on the
freedom of expression, freedom of assembly and freedom petition for
redress of grievances, the respondent firm committed an unfair labor
practice defined in Section 4(a-1) in relation to Section 3 of Republic
Act No. 875, otherwise known as the Industrial Peace Act. Section 3 of
Republic Act No. 8 guarantees to the employees the right "to engage in
concert activities for ... mutual aid or protection"; while Section 4(a-1)
regards as an unfair labor practice for an employer interfere with,
restrain or coerce employees in the exercise their rights guaranteed in
Section Three."

We repeat that the obvious purpose of the mass demonstration staged

by the workers of the respondent firm on March 4, 1969, was for their
mutual aid and protection against alleged police abuses, denial of
which was interference with or restraint on the right of the employees
to engage in such common action to better shield themselves against
such alleged police indignities. The insistence on the part of the
respondent firm that the workers for the morning and regular shift
should not participate in the mass demonstration, under pain of
dismissal, was as heretofore stated, "a potent means of inhibiting
speech."

Such a concerted action for their mutual help and protection deserves
at least equal protection as the concerted action of employees in giving
publicity to a letter complaint charging bank president with
immorality, nepotism, favoritism and discrimination in the
appointment and promotion of ban employees.

DISPOSITIVE: Petitioners won


--------------------------------------------------
CASE 119 VISAYAN STEVEDORE TRANS. CO. v. CIR
G.R. No. L-21696 / 19 SCRA 426
February 25, 1967
Digest by: Thea Denilla
--------------------------------------------------
Petitioner: Visayan Stevedore Transportation Company
(VISTRANCO) and Rafael Xaudaro
Respondent: Court of Industrial Relations, United Workers’ &
Farmers’ Association (UWFA) Venancio Dano-og, Buenaventura
Agarcio and 137 others
Ponente: Concepcion, C.J.
Topic: Non-Union Membership or Withdrawal from Membership as a
condition of Employment (Yellow-Dog Contract)
FACTS:
1. Visayan Stevedoring Transportation Co. (VISTRANCO) is
engaged in the loading and unloading of vessels, with a branch
office in Hinigaran, Negros Occidental, under the management of
said Rafael Xaudaro.
2. Its workers are supplied by the United Workers and Farmers
Association (UWFA) , a labor organization — whose men
(affiliated to various labor unions) have regularly worked as
laborers of the Company during every milling season since
immediately after World War II up to the milling season
immediately preceding November 11, 1955, when the Company
refused to engage the services of Venancio Dano-og,
Buenaventura, Agarcio and 137 other persons named in the
complaint
3. At the behest of the UWFA and the Complainants, a complaint for
unfair labor practice was, accordingly, filed against the Company
and Xaudaro with the Court of Industrial Relations.
4. In due course, its Presiding Judge issued the order appealed from,
which was affirmed by the CIR sitting en banc.
5. CIR: Petitioners guilty of unfair labor practice as charged, directs
them to cease and desist from such unfair labor practice and to
reinstate the complainants, with back wages from the date they
were laid off until reinstated.
6. Hence, this petition for review by certiorari.
ISSUES:
2. Whether or not there is employer-employee relationship
between the Company and the Complainants
3. Whether or not the Company has been guilty of unfair labor
practice
4. Whether or not the order of reinstatement of Complainants,
with backpay, is a reversible error.
RULING: 1. Yes there is employer-employee relationship.
Yes, because in the performance of their duties, Complainants worked,
however, under the direction and control of the officers of the
Company, whose paymaster, or disbursing officer paid the
corresponding compensation directly to said Complainants, who, in
turn, acknowledged receipt in payrolls of the Company. We have
already held that laborers working under these conditions are
employees of the Company in the same manner as watchmen or
security guards furnished, under similar circumstances, by watchmen
or security agencies, inasmuch as the agencies and/or labor
organizations involved therein merely performed the role of a
representative or agent of the employer in the recruitment of men
needed for the operation of the latter's business.
2. Yes, the company is guilty of unfair labor practice.
Yes, because referring to the unfair labor practice charge against the
Company, the Court finds, with the CIR, that said charge is
substantially borne out by the evidence of record, it appearing that the
workers not admitted to work beginning from November, 1955, were
precisely those belonging to the UWFA and the Xaudaro, the Company
Branch Manager, had told them point-blank that severance of their
connection with the UWFA was the remedy, if they wanted to continue
working with the Company.

3.No, the order of reinstatement of complainants with backpay is not a

reversible error.

No, because as to the payment of back wages, the law explicitly vests
in the CIR discretion to order the reinstatement with back pay of
laborers dismissed due to union activities, and the record does not
disclose any cogent reason to warrant interference with the action
taken by said Court.

DISPOSITIVE: WHEREFORE, the order and resolution appealed

from are hereby affirmed, with costs against petitioners herein. It is so
ordered.

DOCTRINE: Stipulation Prohibiting Employee to Join Union. A

yellow dog contract is an employment contract which prohibits an
employee from joining a labor organization or which requires him to
withdraw from one to which he belongs. Yellow dog contract is
prohibited under Article 248(b) of the Labor Code.

---------------------------------------------------------------------
CASE 120. Bankard, Inc. v. NLRC
G.R. No. 171664
March 6, 2013
Digest by: Olive Cachapero
---------------------------------------------------------------------
Topic: Contracting out to Discourage Unionism
FACTS:
1) Respondent Bankard Employees Union-AWATU (Union) filed
before the National Conciliation and Mediation Board (NCMB) its
first Notice of Strike (NOS), alleging commission of unfair labor
practices by petitioner Bankard, Inc. (Bankard), to wit: 1) job
contractualization; 2) outsourcing/contracting-out jobs; 3)
manpower rationalizing program; and 4) discrimination.
2) Bankard: is of the position that job contractualization or
outsourcing or contracting-out of jobs was a legitimate exercise of
management prerogative and did not constitute ULP. It had to
implement new policies and programs, one of which was the
Manpower Rationalization Program (MRP) to further enhance
its efficiency and be more competitive in the credit card industry.
The MRP was an invitation to the employees to tender their
voluntary resignation, with entitlement to separation pay
equivalent to at least two (2) months salary for every year of
service. Those eligible under the company’s retirement plan would
still receive additional pay. Thereafter, majority of the Phone
Center and the Service Fulfilment Division availed of the MRP.
Thus, Bankard contracted an independent agency to handle its call
center needs.
3) Bankard denied that there was bad faith on its part in bargaining
with the Union. It came up with counter-offers to the Union’s
proposals, but the latter’s demands were far beyond what
management could give. Nonetheless, Bankard continued to
negotiate in good faith CBA was entered into between Bankard and
the Union. The CBA was overwhelmingly ratified by the Union
members. For said reason, Bankard contended that the issue of bad
faith in bargaining had become moot and academic.
4) Union alleged that contractualization started in Bankard in 1995 in
the Records Communications Management Division, particularly
in the mailing unit, which was composed of two (2) employees and
fourteen (14) messengers. They were hired as contractual workers
to perform the functions of the regular employees who had earlier
resigned and availed of the MRP. According to the Union, there
were other departments in Bankard utilizing messengers to perform
work load considered for regular employees, like the Marketing
Department, Voice Authorizational Department, Computer
Services Department, and Records Retention Department. The
Union contended that the number of regular employees had been
reduced substantially through the management scheme of freeze-
hiring policy on positions vacated by regular employees on the
basis of cost-cutting measures and the introduction of a more
drastic formula of streamlining its regular employees through the
MRP.
5) Union averred that Bankard’s proposals were way below their
demands, showing that the management had no intention of
reaching an agreement. It was a scheme calculated to force the
Union to declare a bargaining deadlock.
6) NLRC: declared that the management committed acts considered
as ULP. It ruled that the act of management of reducing its number
of employees thru application of the Manpower Rationalization
Program and subsequently contracting the same to other
contractual employees defeats the purpose or reason for
streamlining the employees. The ultimate effect is to reduce the
number of union members and increasing the number of
contractual employees who could never be members of the union
for lack of qualification. Consequently, the union was effectively
restrained in their movements as a union on their rights to self-
organization. Management had successfully limited and prevented
the growth of the Union and the acts are clear violation of the
provisions of the Labor Code and could be considered as Unfair
 Labor Practice in the light of the provisions of Article 248
paragraph (c) of the Labor Code.
7) NLRC, however, agreed with Bankard that the issue of bargaining
in bad faith was rendered moot and academic by virtue of the
finalization and signing of the CBA between the management and
the Union.
8) CA: agreed with Bankard that job contracting, outsourcing and/or
contracting out of jobs did not per se constitute ULP, especially
when made in good faith and for valid purposes. CA, however,
ruled in this wise: Incontrovertible is the fact that petitioner's acts,
particularly its promotion of the program enticing employees to
tender their voluntary resignation in exchange for financial
packages, resulted to a union dramatically reduced in numbers.
Coupled with the management's policy of "freeze-hiring" of
regular employees and contracting out jobs to contractual workers,
petitioner was able to limit and prevent the growth of the Union, an
act that clearly constituted unfair labor practice.
Article 248(c) of the Labor Code which states that:
Art. 248. Unfair labor practices of employers. – It shall be
unlawful for an employer to commit any of the following unfair
labor practice:
(c) To contract out services or functions being performed by union
members when such will interfere with, restrain or coerce
employees in the exercise of their rights to self-organization;
ISSUE: WON Bankard committed acts considered as ULP.
RULING:
NO. Bankard merely validly exercised its management
prerogative. Not shown to have acted maliciously or arbitrarily, no
act of ULP can be imputed against it.
The Court has ruled that the prohibited acts considered as ULP relate
to the workers’ right to self-organization and to the observance of a
CBA. It refers to "acts that violate the workers’ right to organize."
Without that element, the acts, even if unfair, are not ULP.
The general principle is that the one who makes an allegation has the
burden of proving it. While there are exceptions to this general rule, in
ULP cases, the alleging party has the burden of proving the ULP; and
in order to show that the employer committed ULP under the Labor
Code, substantial evidence is required to support the claim. Such
principle finds justification in the fact that ULP is punishable with both
civil and/or criminal sanctions.
Aside from the bare allegations of the Union, nothing in the records
strongly proves that Bankard intended its program, the MRP, as a tool
to drastically and deliberately reduce union membership. Contrary to
the findings and conclusions of both the NLRC and the CA, there was
no proof that the program was meant to encourage the employees to
disassociate themselves from the Union or to restrain them from
joining any union or organization. There was no showing that it was
intentionally implemented to stunt the growth of the Union or that
Bankard discriminated, or in any way singled out the union members
who had availed of the retirement package under the MRP. True, the
program might have affected the number of union membership
because of the employees’ voluntary resignation and availment of the
package, but it does not necessarily follow that Bankard indeed
purposely sought such result. It must be recalled that the MRP was
implemented as a valid cost-cutting measure, well within the ambit
of the so-called management prerogatives. Bankard contracted an
independent agency to meet business exigencies. In the absence of any
showing that Bankard was motivated by ill will, bad faith or malice, or
that it was aimed at interfering with its employees’ right to self-
organize, it cannot be said to have committed an act of unfair labor
practice.
Unfortunately, the Union, which had the burden of adducing
substantial evidence to support its allegations of ULP, failed to
discharge such burden.
The law on unfair labor practices is not intended to deprive employers
of their fundamental right to prescribe and enforce such rules as they
honestly believe to be necessary to the proper, productive and
profitable operation of their business.

Dispositive: Bankard won.

Doctrine: Contracting out of services is an exercise of business

judgment or management prerogative. Absent any proof that
management acted in a malicious or arbitrary manner, the Court will
not interfere with the exercise of judgment by an employer.