KIOK LOY v NLRC

Doctrine
Facts
1In a certification election in October 1978, the Union Pambansang Kilusan ng Paggawa, a legitimate labor federation

won and was certified in a resolution dated November 1978 by BLR as the SEBA of the rank-and-file employees of the
Sweden Ice Cream Plant Company.

2On December, the union furnished the company two copies of its proposed CBA and requested the company of its
counter proposals. Without any response, the Union wrote to the Company reiterating its request for collective
bargaining negotiations and for the company’s counter proposals, which were still ignored and remained unacted
upon.

3As a result, the Union filed a notice of strike with the BLR. In conciliation proceedings, all attempts toward amicable
settlement failed prompting the BLR to certify the case to the NLRC for compulsory arbitration.

4The Union submitted its position paper, while the Company did not, and numerous cancellation and reset of the
hearing was set for various reasons, until the Company submitted its position paper in May 1979.

5Set for hearing in June 1979, the Company’s representative failed to appear, and the LA denied the company’s request
for another postponement, ruling that the Company waived its right to present further evidence.

6on July 1979, the LA submitted its report declaring the company guilty of unjust refusal to bargain and found the draft
proposal for CBA submitted by the union as reasonable and declared to be the CBA governing the relationship of the
Union and the Company.
Issue
WHETHER THE CBA APPROVED AND ADOPTED BY THE NLRC IS UNREASONABLE AND LACKS LEGAL BASIS
Ruling
7In its ruling, the Court defined collective bargaining as negotiations toward a collective agreement designed to

stabilize the relation between labor and management and to create a climate of sound and stable industrial peace. It
is a mutual responsibility of the employer and union, characterized as a legal obligation.

8Adding that, Art. 249 (g) declares it an Unfair Labor Practice (ULP) for an employer to refuse “to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of
work, and all other terms and conditions of employment including proposals for adjusting any grievance or question
arising under such an agreement and executing a contract incorporating such agreement, if requested by either party.”

9Accordingly, the Court elucidated that the mechanics of Collective Bargaining is set in motion when the following
jurisdictional preconditions are present:
a) Possession of the status of majority representation of the employees’ representative in accordance with any
of the means of selection or designation provided for by the Labor Code
b) Proof of majority representation
c) A demand to bargain under Art. 251, par. (a) of the Labor Code

10The Court found that all the conditions are present in this case, such that the conduct of the petitioner company in
relation to the negotiations leaves no doubt that the Union has a valid cause to complain, for failing to bargain in good
faith.

11
Thus, the Court upheld the NLRC’s finding that the petitioner is Guilty of ULP, it having been established that the:
1) Respondent union is a duly certified bargaining agent
2) It made a definite request to bargain with a copy of the proposed CBA to the company twice which were left
unacted upon
3) The company made no counter proposal indicative of lack of sincere desire to negotiate.
12Inaddition, the Court found that the company’s approach in compulsory arbitration which stalled the negotiations
by a series of postponements, non-appearance, and undue delay leads to the conclusion of its unwillingness to
negotiate.

13Moreover, the Court denied the petitioner’s contention that the CBA approved and adopted by the NLRC, for lack of
the company’s consent is null. Ruling that, an erring party should not be tolerated and allowed with impunity to resort
to schemes feigning negotiations by empty gestures.

WHEREFORE, the instant petition is DISMISSED.

UNION OF FILIPRO EMPLOYEES-DRUG, FOOD AND ALLIED INDUSTRIES UNIONS – KILUSANG UNO (UFE-DFA-KMU) v
NESTLE PHILIPPINES, INC.
DOCTRINE
ART. 252. Meaning of duty to bargain collectively. – The duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours, of work and all other terms and conditions of employment including proposals
for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any
concession.

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 of conditions of the existing agreement during the 60-day period
and/or until a new agreement is reached by the parties.

PURPOSE OF COLLECTIVE BARGAINING

- To reach an agreement resulting in a contract binding on the parties; but the failure to reach an agreement
after negotiations have continued for a reasonable period does not establish a lack of good faith.

THE DUTY TO BARGAIN DOES NOT INCLUDE THE OBLIGATION TO REACH AN AGREEMENT.
- The statutes invite and contemplate a collective bargaining contract, but they do not compel one.
- All it contemplates is that both parties should approach the negotiation with an open mind and make
reasonable effort to reach a common ground of agreement

Measure of good faith in bargaining

- Cannot be measured thus, the question of good faith may be a question of credibility. The effect of an
employer’s or a union’s individual actions is not the test of good-faith bargaining, but the impact of all such
occasions or actions, considered as a whole, and the inferences fairly drawn therefrom collectively may offer a
basis for the finding of the NLRC

ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. – It shall be unlawful for an employer to commit any of the
following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
(b) To require as a condition of employment that a person or an employee shall not join a labor organization or
shall withdraw from one to which he belongs;
(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 right to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor
organization, including the giving of financial or other support to it or its organizers or supporters;
(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, paragraph (o) of this Code
shall not apply to the nonmembers of the recognized collective bargaining agent; [The article referred to is 241,
not 242. – CAA]
(f) To dismiss, discharge, or otherwise prejudice or discriminate against an employee for having given or being
about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue
in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations
associations or partnerships who have actually participated, authorized or ratified unfair labor practices shall
be held criminally liable. (Emphasis supplied.)

Rule XIII, Sec. 4, Book V of the Implementing Rules of the Labor Code:
“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."

UNFAIR LABOR PRACTICE

- For this to prosper, it must be shown that the employer 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 in disclaiming unilateral grants as proper
subjects in their collective bargaining negotiations.
- A letter by an employer is not tantamount to refusal to bargain

GOOD FAITH IS ALWAYS PRESUMED

- Employers are accorded rights and privileges to assure their self-determination and independence and
reasonable return of capital. This mass of privileges comprises the so-called management prerogatives. In this
connection, the rule is that good faith is always presumed. As long as the company’s exercise of the same is in
good faith to advance its interest and not for purpose of defeating or circumventing the rights of employees
under the law or a valid agreement, such exercise will be upheld

Authority of Secretary of the DOLE

- granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same
accordingly.
- As a matter of necessity, it includes questions incidental to the labor dispute; issues that are necessarily involved
in the dispute itself, and not just to that ascribed in the Notice of Strike or otherwise submitted to him for
resolution.
FACTS
1On April 2001, pending the expiration of the CBA between the petitioner and Nestle in June 2001, the president of the

petitioner union informed Nestle of their intention to open the Collective Bargaining Negotiations for the year 2001 –
2004.

2Nestle acknowledged the letter of intent and prepared its own counter-proposal and the rules by which the
negotiations will be governed. In May 2001, Nestle highlighted its position about:
 1) 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.
2) the CBA Negotiations will cover only the employees of the Cabuyao Plant, in lieu of the closure of the Alabang
Plant. Therefore, the Cabuyao division of the petitioner union became the Sole Bargaining Unit of the CBA
Negotiations.

3On August 2001, Nestle requested the NCMB to conduct preventive mediation proceedings, alleging that in 15
meetings, the parties failed to reach any agreement on the proposed CBA. However, the conciliation proceedings failed
and there was a bargaining deadlock pertaining to economic issues such as:
a) retirement plan, panel composition, costs and attendance, and CBA

4Thereafter, the Union filed 2 notice to strike, one predicated on the bargaining deadlock pertaining to economic issues;
i.e, “retirement plan, panel composition, cost and attendance and the CBA; and the other, predicated on ULP of Nestle
for bargaining in bad faith. by setting pre-conditions in the ground rules and/or refusing to include the issue of the
Retirement Plan in the CBA negotiations. With the Strike approved, the Labor Secretary assumed jurisdiction over the
dispute pursuant to Nestle’s petition and Art. 263 (g) of the Labor Code. Included in the Order of Assumption is the
enjoinment to strike or lockout and for any of the parties to commit any act to aggravate the situation.

5TheSecretary of Labor denied the Union’s motion for reconsideration regarding the assumption order. Thereafter, in
January 2002, the employee-members of the Union went on a strike despite the injunction.

6inview whereof, the Labor Secretary issued another order directing the employees to return to work and for Nestle
to accept back to work returning employees, as well as for both parties to submit their position papers. However, the
union failed to comply with the Order and continued with their strike, prompting the Secretary to seek assistance from
the PNP.

7On February 2002, Nestle and the Union filed their position papers. On their part, Nestle addressed issues relation to
the economic provisions of the CBA and the non-inclusion of the retirement plan, while the Union limited its position
on whether the retirement plan was a mandatory subject in its CBA negotiations.

8Thereafter, the union filed a petition questioning the assumption of the Labor Secretary.

9Meanwhile, the Acting Labor Secretary issued an order on April 2002, regarding the Labor dispute ruling that:
a) the retirement plan was a unilateral grant recognized by the parties and is not a mandatory subject for
bargaining
b) dismissing the charged for ULP
c) directing the parties to secure the best applicable terms of the Nestle and the eight other bargaining units, and
to adopt the same as the CBA
d) all existing provisions of the Cabuyao CBA without counterparts in other CBA’s are maintained
e) the representation for the CBA shall be for a term of five year, whereas all other provisions are subject to
renegotiations not later than three years.

10Thereafter, the Court of Appeals acted on the petitions filed by the Union, granting the same, setting aside the order
and directing the parties to resume CBA negotiations. Dissatisfied, both parties moved for reconsideration
ISSUE:
WON NESTLE IS GUILTY OF ULP FOR ALLEGEDLY BARGAINING IN BAD FAITH
WON THE RETIREMENT PLAN IS A MANDATORY SUBJECT OF THE CBA NEGOTIATIONS
RULING:
Union’s argument
Nestlé’s "refusal to bargain on a very important CBA economic provision constitutes unfair labor practice.” It explains
that Nestlé set as a precondition for the holding of collective bargaining negotiations the non-inclusion of the issue of
Retirement Plan. In its words, "respondent Nestlé Phils., Inc. insisted that the Union should first agree that the
retirement plan is not a bargaining issue before respondent Nestlé would agree to discuss other issues in the CBA."

WON NESTLE IS GUILTY OF ULP FOR ALLEGEDLY BARGAINING IN BAD FAITH

NO. The Court discussed that the purpose of collective bargaining is the reaching of an agreement resulting in a contract
binding on the parties; but the failure to reach an agreement after negotiations have continued for a reasonable period
does not establish a lack of good faith. That Art. 252 and 253 of the Labor Code invite and contemplate a collective
bargaining contract, but it does not compel one. Hence, the duty to bargain does not include the obligation to reach an
agreement. All it contemplates is that both parties should approach the negotiation with an open mind and make
reasonable effort to reach a common ground of agreement.

For a charge of unfair labor practice to prosper, it must be shown that Nestlé 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 in disclaiming unilateral grants as proper
subjects in their collective bargaining negotiations.

In this case, the union merely bases its claim of refusal to bargain on a letter written by Nestlé where the latter laid
down its position. But according to jurisprudence, a letter is not tantamount to refusal to bargain. Thus, in thinking to
exclude the retirement plan from the CBA, Nestle cannot be faulted considering that the same benefit is unilaterally
granted and that 8/9 BUs allegedly agreed to treat the same as a unilaterally granted benefit. Moreover, it cannot be
seen that Nestle exhibited an indifferent attitude towards the collective bargaining because of the following facts:
1. Nestlé’s desire to settle the dispute and proceed with the negotiation being evident in its cry for compulsory
arbitration is proof enough of its exertion of reasonable effort at good-faith bargaining.
2. Nestle never refused to bargain with the union, they merely wanted to exclude the Retirement Plan on the
postulation that it was in the nature of a unilaterally granted benefit. An employer’s steadfast insistence to
exclude a particular substantive provision is no different from a bargaining representative’s perseverance to
include one that they deem of absolute necessity. Hence, the adamant insistence to a point where the
negotiations reach an impasse does not establish bad faith. The management’s firm stand against the issue of
the Retirement Plan did not mean that it was bargaining in bad faith. It had a right to insist on its position to
the point of stalemate.
3. Nestle could have refused to bargain with the union on account of the economic issue but it did not

The Court cited Art. 247 (refer above) and declared that Nestle is accused of violating its duty to bargain collectively (g)
when it imposed a pre-condition to its agreement to discuss and engage in collective bargaining negotiations with the
union. However, a review of the case shows that of the two notices of strike filed, it was only on the second that the
ground of ULP was alleged which contained a general allegation of Nestle’s alleged ULP acts. It is the union, therefore,
who had the burden of proof to present substantial evidence to support their allegations.

Rule XIII, Sec. 4, Book V of the Implementing Rules of the Labor Code states that:
“In cases of unfair labor practices, the notice of strike shall as far as practicable, state the acts complained of and the
efforts to resolve the dispute amicably."

In the instant case, except for the assertion put forth by the union, neither the second notice of strike nor the records
substantiate a finding of ULP. Since good faith of the employer is always presumed pursuant to their right of self-
determination and reasonable ROI, 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.

WON THE RETIREMENT PLAN IS A MANDATORY SUBJECT OF THE CBA NEGOTIATIONS

Nestle’s argument
12Nestle argued that there was an agreement by the parties to not consider the retirement plan as a negotiable item

subject to bargaining such that the benefit would be regarded as a unilateral grant outside the ambit of negotiations.

Union’s argument
13The Union argued that there is nothing in the documents presented which proves that it agreed to treat the
retirement plan as a unilateral grant of the company and outside the scope of the CBA, such that, had it been the
intention of the parties it would have stated so categorically. Concluding that since the retirement plan did not derive
its existence from the letter and MOA, the nature of the retirement plan was not alter or changed by the issuance of
the letter and MOA.

Court’s Ruling:
14the Court explained that a retirement plan is consensual in nature, citing a ruling which states that the inclusion of

the retirement plan in the collective bargaining agreement as part of the package of economic benefits extended by
the company to its employees gives a consensual character such that it may not be terminated or modified at will by
either party.

15Ruling that the fact that the retirement plan is non-contributory (one where the employee contributes nothing), does
not make it a non-issue in the CBA negotiations. Finding further that, since the retirement plan has been an integral
part of the CBA since 1972, the Union’s demand to increase the benefits due the employees under said plan, is a valid
CBA issue.

16
Concluding that the employees do have a vested and demandable right over existing benefits voluntarily granted to
them by their employer. The latter may not unilaterally withdraw, eliminate or diminish such benefits under Art. 100
(LC).

17In relation to the present case, the Court found that the CBA was about to expire which has provisions respecting the
retirement plan, therefore being subject of the existing CBA, the union was only exercising their prerogative to bargain
or renegotiate for the improvement of the terms of the Retirement Plan just like they would for all the other economic,
as well as non-economic benefits previously enjoyed by them.

Citing Art. 252 and 253, LC, the Court concluded that in demanding that the terms of the retirement plan be opened
for renegotiation, the union was acting within their right, declaring a retirement plan to be consensual in character,
and thus negotiable.

3Concluding in sum that:

1) the retirement plan is a valid issue for the parties in collective bargaining negotiations
2) the CA committed a reversible error in limiting the issue to the ground rules
3) nestle is not guilty of ULP

UST FACULTY UNION v UST, REV. FR. ROLANDO DE LA ROSA

Doctrine
ULP Concept:
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 interests of both labor
and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of
freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-
management relations. (Emphasis supplied.)

Substantial evidence
- relevant evidence as a reasonable mind might accept as adequate to support a conclusion
- in ULP cases, the alleging party (whether employer or Union) has the burden of providing substantial evidence
of ULP.

DUTY TO BARGAIN PROVISIONS

ART. 248. Unfair labor practices of employers.––It shall be unlawful for an employer to commit any of the following
unfair labor practice:
(g) To violate the duty to bargain collectively as prescribed by this Code.
ART. 250. Procedure in collective bargaining.––The following procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a
statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from
receipt of such notice;

ART. 252. Meaning of duty to bargain collectively.––The duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals
for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any
concession.
Facts:
This case is connected to the USTFU case that we discussed the other day regarding Union Election.

On Sept. 1996, USTFU wrote a letter to all its members informing them of a GA to be held on Oct. 5 with an agenda
entailing the election of officers. The then incumbent president of the USTFU was Atty. Eduardo Mariño, Jr.

On oct. 2, Dr. Rodel Aligan, OP, Sec. Gen of the UST, issued a memorandum allowing the request of the Faculty Clubs of
UST to hold a convocation on Oct. 4.

Members of the faculties of the university attended the convocation, including members of the USTFU, without the
participation of the members of the UST administration. During the convocation, an election for the officers of the
USTFU was conducted by a group called the Reformist Alliance. Upon learning that the convocation was intended to be
an election, members of the USTFU walked out. Meanwhile, an election was conducted among those present, and Gil
Gamilla and other faculty members (Gamilla Group) were elected as the president and officers of the union. Such
election was communicated to the UST administration in a letter. Hence, there are two groups claiming to be USTFU
officers: the Gamilla Group and the group led by Mariño.

On October 8, 1996, the Mariño Group filed a complaint for ULP against the UST with the Arbitration Branch of the
NLRC. 3 days after, a complaint was filed again by them, with the Med-Arbiter of DOLE, praying for the nullification of
the election of the Gamilla Group as officers of the USTFU.

On December 3, 1996, a CBA was entered into by the Gamilla Group and the UST. The CBA superseded an existing CBA
entered into by the UST and USTFU which was intended for the period of June 1, 1993 to May 31, 1998/ Thereafter,
Gamilla, accompanied by the barangay captain in the area and the Chief Security Officer of the UST, padlocked the
office of the USTFU. Afterwards, an armed security guard of the UST was posted in front of the USTFU office.

On Feb. 11, 1997, the Med-Arb issued a resolution which declared the election of the Gamilla group as null and void
and ordering them to cease and desist from performing the duties and responsibilities of USTFU officers. A series of
appeals followed until it reached the Supreme Court wherein the initial order was affirme. In lieu of this, USTFU filed a
manifestation with the Arbitration Branch informing it of the decision of the Court. The Arbitration Branch, however,
ruled against USTFU, declaring that:
1. USTFU failed to establish with clear and convincing evidence that UST is guilty of ULP. The acts complained of
being:
a) Allegedly calling for a convocation of faculty members which turned out to be an election of officers
for the faculty union
b) Subsequently dealing with the Gamilla Group in establishing a new CBA; and
c) The assistance to the Gamilla Grp in padlocking the USTFU office
The LA explained that the alleged memo merely granted the request of faculty members to hold such convocation and
no member of the UST Admin attended or participated therein. That when the new CBA was entered into, (1) Gamilla
Grp presented sufficient evidence to establish that they had been duly elected as officers of the USTFU; and (2) the
ruling of the med-arbiter that the election of the Gamilla Group was null and void was not yet final and executory; thus,
justifying UST’s dealing and subsequent entering into a CBA with the latter, including helping them in securing USTFU’s
office.

Appeals were denied, hence this petition.

Issues
WON UST is guilty of ULP
Ruling:
Petitioner’s contentions
Respondent UST is guilty of ULP because of the following acts:
1. Atty. Domingo Legaspi, the legal counsel for the UST, conducted a faculty meeting in his office, supplying
derogatory information about the Mariño Group
2. Respondents provided the Gamilla Group with the facilities and forum to conduct elections, in the guise of a
convocation;
3. Respondents transacted business with the Gamilla Group such as the processing of educational and hospital
benefits, deducting USTFU dues from the faculty members without turning over the dues to the Mariño Group
4. Respondent entered into a CBA with the Gamilla grp
Additionally, petitioners claimed that the lower courts ignored vital pieces of evidence.

Court’s ruling
The court explained the concept of ULP as contained in A.247, LC (refer above) and took into consideration the
petitioner’s claim that respondents violated paragraphs (a) “To interfere with, restrain or coerce employees in the
exercise of the right to self-organization" and (d) “To initiate, dominate, assist or otherwise interfere with the formation
or administration of any labor organization, including the giving of financial or other support to it or its organizers or
supporters” of Art. 248 which lays down the acts constituting ULP.

The Court discussed that the general principle is that one who makes an allegation has the burden of proving it. That in
order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the
claim. Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion.

In concluding, the Court stated that In other words, whether the employee or employer alleges that the other party
committed ULP, it is the burden of the alleging party to prove such allegation with substantial evidence. Such principle
finds justification in the fact that ULP is punishable with both civil and/or criminal sanctions.

Given these principles, the Court examined whether the acts of respondent complained by petitioners constituted ULP

As to the alleged derogatory remarks of Atry. Legaspi

The Court ruled in the negative holding that there was no evidence to support said allegation. The alleged evidence to
support petitioner’s claim, the Affidavit dated January 21, 2000 of Yu, is unacceptable being that what may be
derogatory to Yu may not be punishable under the law. There was, therefore, no fact that was established by the
Affidavit. Hence, petitioner failed to present evidence in support of its claim that the respondents committed ULP thru
the acts of Atty. Legaspi.

As to the convocation
The court examined the memorandum sent by the Sec. Gen and ruled that the allegation of petitioner (respondents
required the faculty members to attend the convocation) would rebut such allegation. That in no way can the contents
of the memo be interpreted to mean that faculty members were required to attend the convocation. Not one coercive
term was used in the memorandum to show that the faculty club members were compelled to attend such convocation.
And the phrase "we are allowing them to hold a convocation" negates any idea that the UST would participate in the
proceedings.

Further, even USTFU admitted that not a single UST Admin was present nor participated in said convocation. Hence,
the memo does not support a claim that UST organized the convocation in connivance with the GAmilla Grp.
As to UST’s dealing with the Gamilla Group
The Court declared that the respondent’s acquiescence to bargain with the union through Gamilla Grp constituted ULP.
Such conduct alone, uncorroborated by other overt acts leading to the commission of ULP, does not conclusively show
and establish the commission of such unlawful acts.

That respondent UST cannot be held liable for dealing with Gamilla grp being that the latter represented itself as the
duly elected officials of the union, and pursuant to the mandate of the law (Art. 249, (g), - ULP of employers, Art. 250 –
procedure in collective bargaining, and Art. 252 – Meaning of duty to bargain collectively”) respondents were bound to
deal with them, else they may be held liable for committing ULP.

Additionally, given the fact that at the time of the CBA negotiations, no final decision as to the legality of the elections
were still proclaimed, there was no reason to believe that the members of the Gamilla Group were not the validly
elected officers and directors of USTFU. As such, there was no reason not to recognize the Gamilla Group as the new
officers and directors of USTFU. And as stated in the above-quoted provisions of the Labor Code, the UST was obligated
to deal with the USTFU, as the recognized representative of the bargaining unit, through the Gamilla Group.

That it is not the duty of respondents to inquire into the validity of the election of the Gamilla Group. Such issue is
properly an intra-union controversy subject to the jurisdiction of the med-arbiter of the DOLE. Respondents could not
have been expected to stop dealing with the Gamilla Group on the mere accusation of the Mariño Group that the former
was not validly elected into office.

As to the issue of padlocking

Petitoner alleges that respondents are guilty of ULP because they aided Gamilla group in padlocking and guarding the
USTFU office, thereby preventing the Marino Group from performing its duties. Petitioner presented a certification and
a photograph of a security guard standing before the office to support its contention.

The Court declared that the pieces of evidence fails to support petitioner’s contentions. The certification is not sufficient
evidence of respondent’s participation in the act being that Cardenas was merely present. The certification also
mentioned that the messenger (ng certification, si Sibug) himself also padlocked the office but was not harassed nor
coerced by the padlocking grp. With regard to the photograph, while it shows that there was indeed a security guard
posted, it cannot be used to claim that the presence of the same prevented the Marino grp from performing its duties.

In view of the foregoing, Petitioner failed to present evidence to support its many contentions.

WHEREFORE, petition is DENIED.

FVC LABOR UNION-PH TRANSPORT AND GENERAL WORKERS ORGANIZATION v SAMA-SAMANG NAGKAKAISANG
MANGGAGAWA SA FVC-SOLIDARITY OF INDEPENDENT AND FENERAL LABOR ORGS.
Doctrine

Article 253-A of the Labor Code covers this situation and it provides:
Terms of a collective bargaining agreement. – Any Collective Bargaining Agreement that the parties may enter into,
shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the
majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted
by the Department of Labor and Employment outside of the sixty day period immediately before the date of expiry of
such five-year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement
shall be renegotiated not later than three (3) years after its execution.

Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from
the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact
to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall
agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining
agreement, the parties may exercise their rights under this Code.

Book V, Rule VIII of the Rules Implementing the Labor Code:

Sec. 14. Denial of the petition; grounds. – The Med-Arbiter may dismiss the petition on any of the following grounds:
(b) the petition was filed before or after the freedom period of a duly registered collective bargaining
agreement; provided that the sixty-day period based on the original collective bargaining agreement shall not
be affected by any amendment, extension or renewal of the collective bargaining agreement

The law allows a challenge to the exclusive representation status of a collective bargaining agent through the filing
of a certification election petition only within 60 days from the expiration of the five-year CBA.

EFFECT OF AMENDED OR EXTENDED TERM OF THE CBA ON THE EXCLUSIVE REPRESENTATION STATUS OF THE CBA
AND THE RIGHT OF OTHER UNIONS TO ASK FOR CE AS EXCLUSIVE BARGAINING AGENT
While the parties may agree to extend the CBA’s original five-year term together with all other CBA provisions, any such
amendment or term in excess of five years will not carry with it a change in the union’s exclusive collective bargaining
status. By express provision of the above-quoted Article 253-A, the exclusive bargaining status cannot go beyond five
years and the representation status is a legal matter not for the workplace parties to agree upon. In other words, despite
an agreement for a CBA with a life of more than five years, either as an original provision or by amendment, the
bargaining union’s exclusive bargaining status is effective only for five years and can be challenged within sixty (60) days
prior to the expiration of the CBA’s first five years.
Facts
1on December 1997, the petition FVC Union, the recognized bargaining agent of the rank-and file employees of the FVC

Philippines Company, signed a five-year CBA with the Company (Feb. 1, 1998 – January 30, 2003). Pursuant to the CBA,
the FVC Union and the Company renegotiated the CBA at the end of its 3rd year and modified the CBA’s duration and
extending it by four months. (Feb. 1, 2001 – May 31, 2003)

2On January 21 2003, nine days before the original expiration of the five-year CBA, the respondent SANAMA-SIGLO
filed a petition for certification election for the same rank-and-file unit covered by the FVC Union. Meanwhile, FVC
Union moved to dismiss the petition on the ground that it was made outside the freedom period or outside the sixty-
day freedom period.

Med-Arbiter’s ruling
3On June 2003, the med-arbiter dismissed the petition on the ground that it was filed outside the 60-day freedom

period, counted from the amended period of the CBA.

DOLE Secretary’s Ruling

4On appeal, the DOLE Secretary sustained SANAMA-SIGLO’s position and ordered the conduct of a certification election

in the company.

5On November 2003, DOLE Acting Secretary granted FVC’s motion for reconsideration and dismissed the petition,
holding that the amended CBA which extended the validity of the CBA by four months had been ratified by members
of the bargaining unit, some of whom later organized SANAMA-SIGLO - concluding that, since SANAMA-SIGLO members
accepted and received the benefits arising from the amendments, therefore rationalizing that the members had
accepted the extended term of the CBA and cannot file a petition for certification election based on the original
CBA expiration date.

Court of Appeals’ Ruling

7The CA ruled, calling for a certification election, declaring that while the parties may renegotiate other provisions

(economic and non-economic) under the CBA, such cannot affect the five-year representation aspect of the original
CBA.
8TThat,if the duration of the renegotiated agreement does not coincide with but rather exceeds the original five-year
term, the same will not adversely affect the right of another union to challenge the majority status of the incumbent
bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA.
9Concluding that, in the event a new union wins, such union is required to honor and administer the renegotiated CBA

throughout the excess period.

Issue
WHAT IS THE EFFECT OF THE AMENDED OR EXTENDED TERM OF THE CBA ON THE EXCLUSIVE REPRESENTATION
STATUS OF THE CB AGENT AND THE RIGHT OF ANOTHER UNION TO ASK FOR CERTIFICVATION ELECTION AS
EXCLUSIVE BARGAINING AGENT.
Ruling
Petitioner’s Arguments
10
FVC Union argues that the extension of the CBA term also changed the union’s exclusive bargaining representation
status and effectively moved the reckoning point of the 60-day freedom period, submitting further that, SANAMA-
SIGLO is estopped from questioning the term extension because its members are the same ones who approved the
amendments including the expiration date of the CBA.

Although SAMANA-SIGLO has manifested its abandonment of its challenge to the exclusive bargaining representation
status of FVC, it is necessary that the question of law be resolved since this exclusive representation status issue will
inevitably recur in the future as workplace parties avail of opportunities to prolong workplace harmony by extending
the term of CBAs already in place.

Court’s ruling
In citing Art. 253 of the LC and Sec. 14 of the Book V, Rule VIII of the Rules Implementing the Labor Code (refer above),
the Court found that while FVC union is correct in their position that the original five-year term of the CBA which, by
law, is also the effective period of the union’s exclusive bargaining representation status and while the parties may
agree to extend the CBA’s original five-year term together with all other CBA provisions, any such amendment or term
in excess of five years will not carry with it a change in the union’s exclusive collective bargaining status. By express
provision of the above-quoted Article 253-A, the exclusive bargaining status cannot go beyond five years and the
representation status is a legal matter not for the workplace parties to agree upon. In other words, despite an
agreement for a CBA with a life of more than five years, either as an original provision or by amendment, the bargaining
union’s exclusive bargaining status is effective only for five years and can be challenged within sixty (60) days prior to
the expiration of the CBA’s first five years.

In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of (3)
years or one which does not coincide with the said five-year term and said agreement is ratified by majority of the
members in the bargaining unit, the subject contract is valid and legal and therefore, binds the contracting parties. The
same will however not adversely affect the right of another union to challenge the majority status of the incumbent
bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA.

Prior to January 30, 2001 (original expiration of CBA) the workplace parties sat down for renegotiation but instead of
confining themselves to the economic and non-economic CBA provisions, also extended the life of the CBA for another
four months, i.e., from the original expiry date on January 30, 2003 to May 30, 2003.

As discussed above, this negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWO’s exclusive
bargaining representation status which remained effective only for five years ending on the original expiry date of
January 30, 2003. Thus, sixty days prior to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file
a petition for certification election. Its petition, filed on January 21, 2003 or nine (9) days before the expiration of the
CBA and of FVCLU-PTGWO’s exclusive bargaining status, was seasonably filed.

WHEREFORE, order AFFIRMED.

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO v. CONFESOR, SAN MIGUEL CORPORATION, MAGNOLIA
CORPORATION and SAN MIGUEL FOODS, INC.
Doctrine:

1OnJune 1990, the petitioner union entered into a CBA with SMC to take effect upon the expiration of their previous
CBA, on June 1989,. The CBA provided, among others that:
1. The agreement shall remain in force and effect until June 30, 1992 (of 3 yrs from the effectivity of the new
CBA // June 1989). Hence, 60 days prior to June 30, 1992, either party may initiate negotiations of all
provisions of the Agreement, except insofar as the representation aspect is concerned.
2. Insofar as the representation aspect is concerned, it shall be for (5) years from July 1, 1989 to June 30,
1994. Hence, the freedom period for purposes of such representation shall be sixty (60) days prior to June 30,
1994.

Keeping with their vision and strategy, SMC informed its employees in a letter dated August 1991 that the company
composed of four operating divisions (beer, packaging, feeds and live stocks, and magnolia and agribusiness) would
undergo restructuring.

2That, effective October 1991, Magnolia and Feeds and livestock division were spun-off and became two distinct
corporations namely, Magnolia and San Miguel Foods, Inc. (SMFI), notwithstanding the spin-offs, the CBA remained in
force and effect.

3afterJune 1992, the CBA was renegotiated in accordance with the terms of the CBA and Art. 253-A, with the two
parties submitting their proposals and counter-proposals. During the negotiations, petitioner-union insist that the
bargaining unit of SMC still include the employees of the spun-off corporations Magnolia and SMFI, and that the
renegotiated terms shall be effective only for the remaining period of two years or until June 1994.

4On the other hand, SMC contended that the employees who moved to Magnolia and SMFI, automatically ceased to
be part of the bargaining unit at the SMC, as well as that the CBA should be effective for three more years. Unable to
agree anent the bargaining unit and duration of the CBA, the petitioner declared a deadlock in September 1990.

5OnOctober 1992, a notice of strike was filed against SMC, prompting SMC to request the NCMB to conduct preventive
mediation, however, no settlement was arrived. Thereafter, a strike vote was conducted resulting in favor of a strike,
prompting SMC to file a petition for the Labor Secretary to assume jurisdiction over the labor dispute.

6TheLabor Secretary assumed jurisdiction but the parties still failed to arrive at an agreement, thereafter the parties
submitted their respective position papers and the Secretary issued an order directing that:
1) the renegotiated terms of the CBA shall be effective for a period of three (3) years from June 1992
2) the CBA shall cover only the employees of SMC and not Magnolia and SMFI.

Subsequently, petitioner questioned the above-order and filed a motion for the issuance of a TRO against the holding
of the certification election in Magnolia and SMFI, maintaining that the employees of Magnolia and SMFI fall within
the bargaining unit of SMC.
ISSUES:
WHETHER THE DURATION OF THE RENEGOTIATED TERMS OF THE CBA IS EFFECTIVE FOR THREE YEARS OR TWO
YEARS
WHETHER THE BARGAINING UNIT OF SMC INCLUDES THE EMPLOYEES OF MAGNOLIA AND SMFI
RULING:
Petitioner’s Contention
7petitioner contends that the duration for the non-representation provisions of the CBA should be coterminous with

the term of the bargaining agency which shall be for the remaining two years of the current CBA, contrary to the Labor
Secretary’s order which ruled that the terms shall run for a period of three (3) years.

Court’s ruling
8Citing Art. 253-A, the Court explained that the provision provides that the CBA has a term of five (5) years instead of
three (3) in so far as the representation aspect is concerned, all other provisions of the CBA shall be negotiated not
later than three (3) years after its execution.

9Defining the representation aspect as the identity and majority status of the union that negotiated the CBA as the
exclusive bargaining representative of the appropriate bargaining unit concerned, while all other provision refer to the
rest of the CBA, economic and non-economic, except representation.

10Agreeing with the Secretary of Labor, the Court ruled that the law is clear on the duration of the CBA insofar as the
representation aspect is concerned. Thus, upon consulting the deliberations leading to the legislation, the Court found
that the period of effectivity for three years is given to economic and non-economic provisions, except representation.
This is so to maintain industrial peace and stability by having both management and labor work harmoniously together
without any disturbance.

Thus, no outside union can enter the establishment five (5) years and challenge the status of the incumbent union as
the exclusive bargaining agent, and the terms and conditions of employment (economic and non-economic) cannot be
questioned by the employer nor employees during the period of effectivity of the CBA.

That the CBA is a contract between the parties and the parties must respect the terms and conditions of the agreement.

In the present case, SMC intended to have the terms of the CBA effective for three (3) years reckoned from the
expiration of the old or previous CBA. Citing the oder of the Secretary of labor, which states that: “It is equally true that
once the economic provisions of the CBA expire, the residual representative status of the union is effective for only 2
more years. However, if circumstances warrant that the contract duration which it is soliciting from the company for the
benefit of the workers, shall be a little bit longer than its lifespan, then this Office cannot stand in the way of a more
ideal situation. We must not lose sight of the fact that the primordial purpose of a collective contract is to promote
industrial harmony and stability in the terms and conditions of employment.”, The court ruled that spun off companies
and SMC conceded to face the same union notwithstanding the spin-offs in order to preserve industrial peace during
the infancy of the two corporations. If the union would insist on a shorter renegotiated term, then all the advantages
gained by both parties in this regard, would have gone to naught.

Thus, the Court declared that they do not find any grave abuse of discretion on the part of the Secretary of Labor in
ruling that the effectivity of the renegotiated terms of the CBA shall be for three (3) years.

14Anent the second issue, the petitioner-union’s assertion that the employees of Magnolia and SMFI should still be part
of the bargaining unit of SMC, the court found that the transformation of the companies was a valid exercise of
management prerogative and neither can bad faith be imputed against SMC as the management assured the concerned
employees that they will be absorbed by the new corporations without loss of tenure with retention of pay and
benefits according to their existing CBA.

15Inaddition, they were advised that upon the expiration of the CBAs, new agreements will be negotiated between the
management of the new corporations and the bargaining representatives of the employees concerned. As a result of
the spin-offs:
a) Each of the companies are run by, supervised and controlled by different management teams including
separate human resource/personnel managers.
b) Each Company enforces its own administrative and operational rules and policies and are not
dependent on each other in their operations.
c) Each entity maintains separate financial statements and are audited separately from each other.

16Leadingthe Court to rule that Magnolia and SMFI became distinct entities with separate juridical personalities and
cannot belong to a single bargaining unit.
17Ruling further that, in determining an appropriate bargaining unit, the test of grouping is mutuality or commonality
of interests. Such that, the employees sought to be represented by the collective bargaining agent must have
substantial mutual interests in terms of employment and working conditions.
18Finding that, in consideration of the spin-offs, the companies would have distinctive concerns in terms of the nature

of work, wages, hours of work and other conditions of employment. Interests of employees in the different companies
perforce differ.

19Finding further that SMC (beer manufacturing), Magnolia (processing and manufacturing dairy products), and SMFI
(production of feeds and processing of chicken), thus the nature of their products and scales of business may require
different skills which must necessarily be commensurated by different compensation packages, in addition to the
different volumes of work and working conditions.

20in
consideration of the foregoing, the Court found it best to have separate bargaining units for the different
companies where the employees can bargaining separately according to their needs and working conditions.

WHEREFORE, the petition is DISMISSED.

HONGKONG BANK INDEPENDENT LABOR UNION (HBILU) v HONGKONG AND SHANGHAI BANKING CORPORATION
DOCTRINE
Basis of employees rights to participate in matters affecting their benefits and the sanctity of the CBA

Section 3, Article XIII of the 1987 Constitution.- The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law.

Article 211 of the Labor Code. It is a policy of the State:

a) To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary
arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
(d) To promote the enlightenment of workers concerning their rights and obligations as union members and as
employees;
(g) To ensure the participation of workers in decision and policymaking processes affecting their rights, duties
and welfare

ART. 255. EXCLUSIVE BARGAINING REPRESENTATION AND WORKERS PARTICIPATION IN POLICY AND DECISION-
MAKING.
Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations
as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making process of the
establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare.
For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of
the workers in such labor management councils shall be elected by at least the majority of all employees in said
establishment.

Unauthorized amendment or alteration of CBA by arbitral award, if:

1. It is so unfounded in reason and fact;
2. It is so unconnected with the working and purpose of the agreement;
3. It is without factual support in view of its language, its context, and any other indicia of the parties' intention;
4. It ignores or abandons the plain language of the contract;
5. It is mistakenly based on a crucial assumption which concededly is a nonfact;
6. It is unlawful, arbitrary or capricious; and
 7. It is contrary to public policy.
FACTS
In 2001, the Bangko Sentral ng Pilipinas (BSP) issued the Manual of Regulations for Banks (MoRB), Sec. X338 of which
states that:
“Banks may provide financial assistance to their officers and employees, as part of their fringe benefits program,
to meet housing, transportation, household and personal needs of their officers and employees. Financing plans
and amendments thereto shall be with prior approval of the BSP.”

Pursuant to the provision, respondent company on March 2003, submitted its Financial Assistance Plan (FAP) to the
BSP for approval which was approved by BSP on May 2003. The plan contained a credit checking proviso stating that
“repayment defaults on existing loans and adverse information on outside loans will be considered in the evaluation of
loan application.” This plan was later amended thrice, all of which amendments are approved by BSP.

Meanwhile, petitioner Union, the incumbent bargaining agent of respondent’s R&F employees, entered into a CBA with
the bank covering the period from April 2010 to March 2012 which grants the following salary loans
1. Housing/house improvement Loan
2. Personal loan
3. Car loans
4. Credit ratio

When the CBA was about to expire, the parties started negotiations for a new one to cover the period from April 2012
to March 2017. During the negotiations, respondent proposed amendments to the former CBA allegedly to align the
wordings thereof with its BSP-approved Plan. Respondent proposed the deletion pertaining to credit ratio, and
amendment of Secs 1-3.

Union objected to the proposed amendments, claiming that the insertion would curtail its members’ availment of
salary loans and averring that it violates the existing exceptions set forth in BSP Circular of 2004 and Sec. X338. In view
of union’s objection, the respondent withdrew its proposals and consequently, the CBA remained unchanged.

Despite the withdrawal of proposal, the respondent company sent an email to its employees on April 2012 concerning
the enforcement of the Plan, including the Credit Checking provisions thereof, contending in their email that the
Financial Assistance Plan (FAP) is the official guideline and policy governing Staff Loans and Credit Cards and that with
the strict implementation of the BSP provisions, adverse credit findings may result to disapproval of loan or credit
applications”

In Sept. 2012, a union member (Mananghaya) applied for a loan under the current CBA. His first loan in March 2012
was approved, his application at this time was denied due to adverse findings from the external checks on his credit
background. The union then raised the denial as a grievance issue with the NCMB arguing that the imposition of an
additional requirement (external credit card checking) prior to the approval of any loan application under the CBA, is
not sanctioned under their CBA. The union further asserts that there is no such requirement under the terms of their
CBA. Thus, it cannot be unilaterally imposed by the company.

In response, the respondent countered that the external credit check conducted was merely an implementation of the
ESP-approved plan; adding further that the adoption of the plan is a condition necessary for any loan grant under Sec.
X338 of the MoRB and that the Credit Check policy has e=been in place since 2003, and is a sound practice in the banking
industry to protect the interests of the public and preserve the confidence in banks.
ISSUE
WON RESPONDENT COULD VALIDILY ENFORCE THE CREDIT-CHECKING REQUIREMENT UNDER ITS BSP APPROVED
PLAN IN PROCESSING THE SALARY LOAN APPLICATIONS OF COVERED EPLOYEES EVEN WHEN THE SAID
REQUIREMENT IS NOT RECOGNIZED UNDER THE CBA
RULING
Petitioner’s argument
 1. The company failed to present in court the Plan that was supposedly submitted to the BSP for approval and to
show that the requirement of external credit checking had already been included therein.
2. The plan is not a set of policies for salary loans that came from the BSP, but was devised solely by respondents
3. The union is not privy to the plan and has not been consulted, much less informed, of the impositions therein
prior to its implementation. No proof was offered that said plan had been disseminated to the employees prior
to the April 2012 email blast
4. Implementation of the plan is tantamount to diminution of benefits and a unilateral amendment of the existing
CBA, both proscribed under the Labor Code. Had the parties to the CBA intended to include the external credit
check as an additional condition to the availment of employee salary loans, then it should have been plainly put
in their agreement.

Respondent’s argument
1. The Plan is neither new nor was it issued on a mere whim or caprice. The plan was established as early as 2003,
way before Mananghaya’s application was denied, to conform to Sec. X338 of BSP MoRB. That the loan and
credit accommodations could have only formed part of the employees’ fringe benefit program if they were
extended through a financing scheme (The Plan) approved by the BSP.
2. Dissemination of the Plan via April 2012 was but a reiteration, as opposed to a first publication; that even prior
to the establishment and approval of the Plan in 2003, the then-loan policy already included the requirement
on external credit checking in the processing and evaluation of loan applications in their General Policies on
Loans, cascaded through the Intranet system to HSBC employees on October, 2002. Thus, the union members
cannot feign ignorance of the external credit checking requirement In staff loan applications. The bare denial
of knowledge about it cannot be given any credence.
3. The non-mention of the Plan in the CBA is no justification for the bank to disregard the same in processing
employee loan applications. Provisions of applicable laws, especially those relating to matters affected with
public policy, are deemed written into the contract

COURT’S RULING
The Constitutional Right of Employees to Participate in Matters Affecting their Benefits and the Sanctity of the CBA.
The Court stressed that no less than the basic law of the land guarantees the rights of workers to collective bargaining
and negotiations as well as to participate in policy and decision-making processes affecting their rights and benefits.

The Court cites, Art. 13, Sec. 3, of the Constitution, Article 211 and 255 of the Labor Code (refer above), and declares
that although jurisprudence recognizes the validity of the exercise by an employer of its management prerogative and
will not ordinarily interfere with such, this prerogative is not absolute and is subject to limitations imposed by law,
collective bargaining agreement, and general principles of fair play and justice. That since the CBA is the law between
the parties, they are obliged to comply with its provisions.

Unilateral amendments to the CBA violate Article 253 of the Labor Code
The court explains that a CBA is the negotiated contract between a legitimate labor organization and the employer
concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit, where the
parties comprising it may establish such stipulations, clauses, terms and conditions as they may deem convenient
provided these are not contrary to law, morals, good customs, public order or public policy. Thus, where the provisions
of the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated
by the express policy of law.

Citing jurisprudence, the Court states that 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. And 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. This finds bases under Art. 253 of the Labor Code/

That in the present controversy, it is clear from the arguments and evidence submitted that the Plan was never made
part of the CBA. As a matter of fact, the Union vehemently rejected the Plan’s incorporation into the agreement and
that due to a lack of consensus, the bank withdrew its proposal and agreed to retain the original provisions of the CBA.
Thus, the subsequent implementation of the Plans external credit check provisions in relation to the employee loan
applications is an imposition solely by respondent.

The Court states that tolerating the bank’s conduct would be tantamount to allowing a blatant circumvention of Art.
253 of the LC. It would contravene the express prohibition against the unilateral modification of a CBA during its
subsistence and even thereafter until a new agreement is reached. It would unduly license HSBC to add, modify, and
ultimately further restrict the grant of Salary Loans beyond the terms of the CBA by simply adding stringent
requirements in its Plan, and having the said Plan approved by BSP in the guise of compliance with the MoRB.

22Moreover, the Court found that none of the Plans approved by BSP can be found the requirement for the submission
of an Authority to Conduct Checks Form as well as details on adverse credit finding. Such that, the only documentary
basis of HSBC for proving that the credit checking requirement was existing is the use of the term “reiterate” in its
email.

23Furthermore, the Court also observed that HSBC failed to rebut the petitioner’s evidence that its requirements for
the grant of salary loans changed only after the e-mail, such that prior to the email only four documents are required
in applying for a loan namely, application for personal loan form, authority to deduct form, set-off of retirement fund
form, and promissory note form, leading the Court to believe that the external credit check is a new imposition.

24Thus,the Court concludes that HSBC’s enforcement of credit checking on salary loans under the CBA invalidly
modified the latter’s provisions thereon through the imposition of additional requirements which cannot be found
anywhere in the CBA. Finding that, if the credit checking under the Plan covers salary loans under the CBA, then the
bank should have negotiated for its inclusion, however, the CBA has no reference to the Plan.

25Adding that, based on its actions, HSBC never intended to apply the credit checking under the Plan to salary loans
under the CBA, otherwise it would have enforce such requirement the moment salary loans provisions under the old
CBA were implemented. Thus, HSBC cannot now insist on its imposition on loan applications under the disputed CBA
provision without violating its duty to bargain collectively.

26The Court maintaining that salary loans are not subject to credit checking requirement, found that, Section X338.3
excluded loans and credit accommodations under the bank’s fringe benefits program from the operation of Sec.
X304.1.

27reiterating its ruling that the evidence presented point towards the
fact that the credit checking requirement imposed
by HSBC under the questioned Plan which effectively and undoubtedly modified the CBA provisions on salary loans
was a unilateral imposition violative of HSBC’s duty to bargain collectively and, therefore, invalid.

WHEREFORE, the petition is GRANTED.

DIVINE WORD UNIVERSITY v DIVINE WORD UNIVERSITY EMPLOYEES UNION - ALU

DOCTRINE

Section 3, Rule V, Book V of the Rules Implementing the Labor Code. When to file. In the absence of a collective bargaining
agreement submitted in accordance with Article 231 of the Code, a petition for certification election may be filed at any time.
However, no certification election may be held within one year from the date of issuance of declaration of a final certification
election result. Neither may a representation question be entertained it (sic) before the filing of a petition for certification election,
a bargaining deadlock to which an incumbent or certified bargaining agent is a party has been submitted to conciliation or
arbitration or had become the subject of a valid notice of strike or lockout.’

EMPLOYER AS BYSTANDER
But once an employer has filed said petition, as the petitioner did in this case, its active role ceases and it becomes a
mere bystander. Any uncalled-for concern on the part of the employer may give rise to the suspicion that it is batting
for a company union
WHEN CAN A PCE BE FILED
"ART. 258. When an employer may file petition. — When requested to bargain collectively, an employer may petition
the Bureau for an election. If there is no existing certified collective bargaining agreement in the unit, the Bureau shall,
after hearing, order a certification election.

All certification cases shall be decided within twenty (20) working days

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and regulations
prescribed by the Secretary of Labor
.
Sec. 3. When to file. — In the absence of a collective bargaining agreement duly registered in accordance with Article
231 of the Code, a petition for certification election may be filed at any time. However, no certification election may be
held within one year from the date of issuance of a final certification election result. Neither may a representation
question be entertained if, before the filing of a petition for certification election, a bargaining deadlock to which an
incumbent or certified bargaining agent is a party had been submitted to conciliation or arbitration or had become the
subject of valid notice of strike or lockout.

If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for
certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date
of such agreement
➢ No collective bargaining agreement - employer who is requested to bargain collectively may file a petition for
certification election any time except upon a clear showing that one of these two instances exists
a) the petition is filed within one year from the date of issuance of a final certification election result or
b) when a bargaining deadlock had been submitted to conciliation or arbitration or had become the
subject of a valid notice of strike or lockout.

DEADLOCK
- "counteraction of things producing entire stoppage: a state of inaction or of neutralization caused by the
opposition of persons or of factions (as in government or a voting body): standstill."
- There is a deadlock when there is a "complete blocking or stoppage resulting from the action of equal and
opposed forces; as, the deadlock of a jury or legislature
- synonymous with the word impasse - , "presupposes reasonable effort at good faith bargaining which, despite
noble intentions, does not conclude in agreement between the parties

"ART. 250. Procedure in collective bargaining. — The following procedures shall be observed in collective bargaining
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a
statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from
receipt of such notice.
(b) Should differences arise on the basis of such notice and reply, either party may request for a conference which
shall begin not later than ten (10) calendar days from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own
initiative and immediately call the parties to conciliation meetings. The Board shall have the power to issue
subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to
participate fully and promptly in the conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may
disrupt or impede the early settlement of the disputes; andchanrobles.com.ph : virtual law library
(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a
voluntary arbitrator
FACTS:
Divine Word University Employees Union (DWUEU) was certified as the sole and exclusive bargaining agent of the Divine
Word University. Subsequently, the Divine Union submitted its collective bargaining proposals March 7, 1985
The University replied and requested a preliminary conference. However, two days before the scheduled conference
the DWUEU’s resigned vice-president Mr. Brigido Urminita wrote a letter addressed to the University unilaterally
withdrawing the CBA proposals. Consequently, the preliminary conference was cancelled.

After almost three years, or on March 11, 1988, the DWUEU, which had by then affiliated with the Associated Labor
Union (ALU), requested a conference with the University for the purpose of continuing the collective bargaining
negotiations. A follow-up letter was sent regarding their request but to no avail.

DWUEU -ALU filed with the NCMB of DOLE a notice of strike on the grounds of bargaining deadlock and unfair labor
practice acts, specifically, refusal to bargain, discrimination and coercion on employees.

After the filing of the notice of strike, a conference was held which led to the conclusion of an agreement between the
University and DWUEU-ALU on May 10, 1888. However, it turned out that an hour before the May 10, 1988 agreement
was concluded, the University had filed a petition for certification election

On the other hand, on May 19, 1988, DWUEU-ALU, consonant with the agreement, submitted its collective bargaining
proposals. These were ignored by the University.

Med-Arbiter Milado, acting on the University’s petition for certification election, issued an Order directing the conduct
of a certification election to be participated in by DWUEU-ALU and “no union,” after he found the petition to be “well-
supported in fact and in law.

Said Order prompted the DWUEU-ALU to file with the Secretary of Labor an urgent motion seeking to enjoin Milado
from further acting on the matter of the certification election.

The Divine Word University Independent Faculty and Employees Union (DWUIFEU), which was registered earlier that
day, filed a motion for intervention alleging that it had “at least 20% of the rank and file employees” of the University.

The Secretary of Labor dismissed not only the case filed by DWUEU-ALU for unfair labor practice on the ground of the
union’s failure to prove the commission of the unfair labor practice acts specifically complained of but also the
complaint filed by the University for unfair labor practices and illegal strike for “obvious lack of merit brought about by
its utter failure to submit evidence”

The DWUEU-ALU had filed a second notice of strike charging the University with violation of the return-to-work order
which was previously ordered by the Secretary of Labor and unfair labor practices such as dismissal of union officers,
coercion of employees and illegal suspension

Acting Secretary then concluded that for reneging on the agreement of May 10, 1988 and for its “reluctance and
subscription to legal delay,” the University should be “declared in default.” He also maintained that since under the
circumstances the University cannot claim deprivation of due process, the Office of the Secretary of Labor may rightfully
impose the Union’s May 19, 1988 collective bargaining agreement proposals motu proprio.
ISSUE: Whether or not there was a deadlock or an impasse in the collective bargaining process
RULING:
YES. A thorough study of the records reveals that there was no “reasonable effort at good faith bargaining” especially
on the part of the University. Its indifferent attitude towards collective bargaining inevitably resulted in the failure of
the parties to arrive at an agreement. As it was evident that unilateral moves were being undertaken only by the
DWUEU-ALU, there was no “counteraction” of forces or an impasse to speak of. While collective bargaining should be
initiated by the union, there is a corresponding responsibility on the part of the employer to respond in some manner
to such acts.

However, the Court cannot help but notice that the DWUEU was not entirely blameless in the matter of the delay in
the bargaining process. While it is true that as early as March 7, 1985, said union had submitted its collective bargaining
proposals and that, its subsequent withdrawal by the DWUEU Vice President being unauthorized and therefore
ineffective, the same proposals could be considered as subsisting, the fact remains that said union remained passive
for three years. The records do not show that during this three-year period, it exerted any effort to pursue collective
bargaining as a means of attaining better terms of employment.

It was only after its affiliation with the ALU that the same union, through the ALU Director for Operations, requested an
“initial conference” for the purpose of collective bargaining. That the DWUEU abandoned its collective bargaining
proposals prior to its affiliation with ALU is further confirmed by the fact that in the aforequoted May 10, 1988
agreement with the University, said Union bound itself to submit a new set of proposals on May 13, 1988. Under the
circumstances, the agreement of May 10, 1988 may as well be considered the written notice to bargain referred to in
the aforequoted Art. 250(a) of the Labor Code, which thereby set into motion the machinery for collective bargaining,
as in fact, on May 19, 1988, DWUEU-ALU submitted its collective bargaining proposals.

Be that as it may, the Court is not inclined to rule that there has been a deadlock or an impasse in the collective
bargaining process. As the Court earlier observed, there has not been a “reasonable effort at good faith bargaining” on
the part of the University. While DWUEU-ALU was opening all possible avenues for the conclusion of an agreement, the
record is replete with evidence on the University’s reluctance and thinly disguised refusal to bargain with the duly
certified bargaining agent, such that the inescapable conclusion is that the University evidently had no intention of
bargaining with it. Thus, while the Court recognizes that technically, the University has the right to file the petition for
certification election as there was no bargaining deadlock to speak of, to grant its prayer that the herein assailed Orders
be annulled would put an unjustified premium on bad faith bargaining.

Bad faith on the part of the University is further exemplified by the fact that an hour before the start of the May 10,
1988 conference, it surreptitiously filed the petition for certification election. And yet during said conference, it
committed itself to “sit down” with the Union. Obviously, the University tried to preempt the conference which would
have legally foreclosed its right to file the petition for certification election. In so doing, the University failed to act in
accordance with Art. 252 of the Labor Code which defines the meaning of the duty to bargain collectively as “the
performance of a mutual obligation to meet and convene promptly and expeditiously in good faith.” Moreover, by filing
the petition for certification election while agreeing to confer with the DWUEU-ALU, the University violated the
mandate of Art. 19 of the Civil Code that “(e)very person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good faith.”

Moreover, the University’s unscrupulous attitude towards the DWUEU-ALU is also betrayed by its belated questioning
of the status of the said union. The communications between them afforded the University ample opportunity to raise
the issue of representation if indeed it was doubtful of the DWUEU-ALU’s status as a majority union, but it failed to do
so. On the other hand, in the agreement of May 10, 1988, the University even agreed "to sit down and determine the
number of employees that will represent their bargaining unit." This clearly indicates that the University recognized the
DWUEU-ALU as the bargaining representative of the employees and is, therefore, estopped from questioning the
majority status of the said union

Hence, petitioner’s contention that the DWUEU-ALU’s proposals may not be unilaterally imposed on it on the ground
that a collective bargaining agreement is a contract wherein the consent of both parties is indispensable is devoid of
merit. Kiok Loy vs. NLRC is applicable in the instant case considering that the facts therein have also been indubitably
established in this case. These factors are: (a) the union is the duly certified bargaining agent; (b) it made a definite
request to bargain and submitted its collective bargaining proposals, and (c) the University made no counter proposal
whatsoever. As we said in Kiok Loy, “[a] company’s refusal to make counter proposal if considered in relation to the
entire bargaining process, may indicate bad faith and this is especially true where the Union’s request for a counter
proposal is left unanswered.” Moreover, the Court added in the same case that "it is not obligatory upon either side of
a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be
tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures

WESLAYAN UNIVERSITY-PH v WESLAYAN UNIVERSITY-PH FACULTY

DOCTRINE
FACTS
Wesleyan University-Philippines (Petitioner), a non-stock, non-profit educational institution duly organized and existing
under the laws of the Philippines and Wesleyan University-Philippines Faculty and Staff Association (Respondent), a
duly registered labor organization acting as the sole and exclusive bargaining agent of all rank-and-file faculty and staff
employees of petitioner signed a 5-year CBA9 effective June 1, 2003 until May 31, 2008

A Memorandum providing guidelines on the implementation of vacation and sick leave credits as well as vacation leave
commutation was issued by petitioner, through its President, Atty. Guillermo T. Maglaya (Atty. Maglaya). Respondent
President, Cynthia L. De Lara (De Lara) wrote a letter to Atty. Maglaya informing him that respondent is not amenable
to the unilateral changes made by petitioner and questioning the guidelines for being contrary to the existing practices
and the CBA.

Petitioner advised respondent to file a grievance complaint on the implementation of the vacation and sick leave policy
during their Labor Management Committee (LMC) Meeting. Petitioner announced therein its plan of implementing a
one-retirement policy which was unacceptable to respondent.

Unable to settle their differences at the grievance level, the parties referred the matter to a Voluntary Arbitrator.
Respondent submitted affidavits showing that there is an established practice of giving two retirement benefits: one
from the Private Education Retirement Annuity Association (PERAA) Plan and another from the CBA Retirement Plan.

The Voluntary Arbitrator declared that the one-retirement policy and the Memorandum dated August 16, 2005 is
contrary to law.

Petitioner appealed the case to the CA via a Petition for Review under Rule 43 of the Rules of Court. The CA affirmed
the nullification of the one-retirement policy and the Memorandum dated August 16, 2005 on the ground that these
unilaterally amended the CBA without the consent of respondent. Petitioner moved for reconsideration but the CA
denied the same.
ISSUE:
Whether the one-retirement policy is contrary to law for unilaterally amending the existing CBA between the parties
RULING
Petitioner’s contention
1. There is only one retirement plan as the CBA retirement plan and the PERAA Plan are one and the same. Thus,
there is no established company practice or policy of giving two retirement benefits to its employees
2. That even if two retirement benefits were released, the same were done by mere oversight or mistake as there
is no Board resolution authorizing their release
3. Since these benefits are unauthorized and irregular, it could not have ripened into a company practice or policy.
4. The affidavits submitted by respondents are self-serving declarations. Hence, it should not be given weight and
credence.

Respondent’s argument
1. There are two retirement plans as the PERAA, which have been implemented for more than 30 years, is different
from the CBA retirement plan
2. It has always been the practice of petitioner to give 2 retirement benefits
3. The memorandum issued by respondents is arbitrary and contrary to the CBA and existing practices as it added
qualifications or limitations which were not agreed upon by the parties.

LABOR LAW: non-diminution rule

Article 100 of the Labor Code provides for the Non-Diminution Rule. This rule prohibits the employers from eliminating
or reducing the benefits received by their employees. It applies only if the benefit is based on an express policy, a
written contract, or has ripened into a practice. To be considered a practice, it must be consistently and deliberately
made by the employer over a long period of time. However, this rule admits of an exception and that is when the
practice is due to error in the construction or application of a doubtful or difficult question of law. The error, however,
must be corrected immediately after its discovery; otherwise, the rule on Non-Diminution of Benefits would still apply.
In the case at bar, respondent presented substantial evidence in the form of affidavits supporting its claim that there
are two retirement plans. As gleaned from the affidavits, petitioner has been giving two retirement benefits as early as
1997. Petitioner failed to present any evidence to refute the veracity of said affidavits. Truly, the affidavits of incumbent
employees corroborated by the affidavits od retired employees are more sufficient to show that the granting of the 2
retirement benefits to retiring employees had already ripened into a consistent and deliberate practice.

Moreover, no evidence was shown to prove petitioner contention that there is only one retirement plan as the CBA
Retirement Plan and the PERAA Plan are one and the same. In fact, petitioner’s assertion is negated by the
announcement it made during the LMC Meeting regarding its plan of implementing a "one-retirement plan." For if it
were true that petitioner was already implementing a one-retirement policy, there would have been no need for such
announcement. Equally damaging is the letter-memorandum dated May 11, 2006, entitled "Suggestions on the
defenses we can introduce to justify the abolition of double retirement policy," prepared by the petitioner’s legal
counsel.

Concluding that the benefits are a practice, petitioner cannot, without the consent of respondent, eliminate the two-
retirement policy and implement a one-retirement policy as this would violate the rule on non-diminution of benefits.

Petitioner cannot also contend that the two-retirement policy is illegal or unauthorized and that the benefits were
erroneously given by them. No evidence was presented to support this.

LABOR LAW: collective bargaining agreement cannot be unilaterally changed

The Memorandum dated August 16, 2005 imposes a limitation not agreed upon by the parties nor stated in the CBA.
Hence, it must be struck down.

It is provided in Sections 1 and 2 of Article XII of the CBA that all covered employees are entitled to 15 days sick leave
and 15 days vacation leave with pay every year and that after the second year of service, all unused vacation leave shall
be converted to cash and paid to the employee at the end of each school year, not later than August 30 of each year.
Whereas, it is provided in the Memorandum dated August 16, 2005 that vacation and sick leave credits are not
automatic as leave credits would be earned on a month-to-month basis. The said Memorandum, therefore, limits the
available leave credits of an employee at the start of the school year. Considering that the Memorandum imposes a
limitation not agreed upon by the parties nor stated in the CBA, it must be struck down.

Basic is the rule that when the provisions of the CBA is clear, the literal meaning of the stipulation shall govern. Any
doubt in its interpretation must be resolved in favor of labor.

The present petition for review is DENIED.