Collective Bargaining

B.
Right to collective bargaining

1. Duty to bargain collectively
a) When there is absence of a CBA
b) When there is a CBA
2. Collective Bargaining Agreement
a) Mandatory Provisions of CBA
i. Grievance procedure
ii. Voluntary arbitration
iii. No strike-no lockout clause
iv. Labor management council
b) Duration
i. For economic provisions
ii. For non-economic provisions
iii. Freedom period
3. Union Security
a) Union security clauses; closed shop, union shop, maintenance of membership shop
b) Check-off; union dues, agency fees
4. Unfair Labor Practice in collective bargaining
a) Bargaining in bad faith
b) Refusal to bargain
c) Individual bargaining
d) Blue sky bargaining
e) Surface bargaining
5. Unfair Labor Practice
a) Nature of ULP
b) ULP of employers
c) ULP of labor organizations
2. RIGHT TO COLLECTIVE BARGAINING
A. NATURE, ASPECTS
1. WHEN AN ACT CONSTITUTES ULP.

At the outset, it must be clarified that not all unfair acts constitute ULPs. While an act or decision
of an employer or a union may be unfair, certainly not every unfair act or decision thereof may
constitute ULP as defined and enumerated under the law.
The act complained of as ULP must have a proximate and causal connection with any of the
following 3 rights:
1. Exercise of the right to self-organization;
2. Exercise of the right to collective bargaining; or
3. Compliance with CBA.
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Sans this connection, the unfair acts do not fall within the technical signification of the term
“unfair labor practice.”
A. DUTY TO BARGAIN COLLECTIVELY

Art. 252, Labor Code
Article 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.
Union of Filipino Employees V. Nestle, G.R. No. 158930-31 August 22, 2006, The duty to
bargain collectively is mandated by Articles 252 and 253 of the Labor Code. the purpose of
collective bargaining is the reaching of an agreement resulting in a contract binding on the
parties; but the failure to reach an agreement after negotiations have continued for a reasonable
period does not establish a lack of good faith. The statutes invite and contemplate a collective
bargaining contract, but they do not compel one. The duty to bargain does not include the
obligation to reach an agreement.
The crucial question, therefore, of whether or not a party has met his statutory duty to bargain in
good faith typically turns on the facts of the individual case. As we have said, there is no per se
test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the
facts. To some degree, 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.
While the law makes it an obligation for the employer and the employees to bargain collectively
with each other, such compulsion does not include the commitment to precipitately accept or
agree to the proposals of the other. 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.
In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The
corporation simply wanted to exclude the Retirement Plan from the issues to be taken up during
CBA negotiations, on the postulation that such was in the nature of a unilaterally granted
benefit. 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. Indeed, an adamant insistence on a bargaining position to the point where
the negotiations reach an impasse does not establish bad faith. It is but natural that at
negotiations, management and labor adopt positions or make demands and offer proposals and
counter-proposals. On account of the importance of the economic issue proposed by UFE-DFA-
KMU, Nestle could have refused to bargain with the former – but it did not. And the
management’s firm stand against the issue of the Retirement Plan did not mean that it was
bargaining in bad faith.
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Tabangao Shell v. Pilipinas Shell, G.R. No. 170007, April 7, 2014, the issue in this case is
that Whether or not Shell, in bad faith, violated its duty to bargain for failing to reach an
agreement with the union. While the purpose of collective bargaining is the reaching of an
agreement between the employer and the employee’s union resulting in a binding contract
between the parties, the failure to reach an agreement after negotiations continued for a
reasonable period does not mean lack of good faith. The laws invite and contemplate a
collective bargaining contract but do not compel one. For after all, a CBA, like any contract is a
product of mutual consent and not of compulsion. As such, the duty to bargain does not include
the obligation to reach an agreement. In this light, the corporation’s unswerving position on the
matter of annual lump sum payment in lieu of wage increase did not, by itself, constitute bad
faith even if such position caused a stalemate in the negotiations.
THE DUTY TO BARGAIN COLLECTIVELY INVOLVES TWO (2) SITUATIONS, NAMELY:
1. Duty to bargain collectively in the absence of a CBA under Article 251 of the Labor Code.
2. Duty to bargain collectively when there is an existing CBA under Article 253 of the Labor
Code
A.1 DUTY TO BARGAIN COLLECTIVELY WHEN THERE IS ABSENCE OF A CBA
Article 251. Duty to bargain collectively in the absence of collective bargaining agreements. In
the absence of an agreement or other voluntary arrangement providing for a more expeditious
manner of collective bargaining, it shall be the duty of employer and the representatives of the
employees to bargain collectively in accordance with the provisions of this Code.
In other words, the duty to bargain collectively when there has yet been no CBA in the
bargaining unit where the bargaining agent seeks to operate should be complied with in the
following order:
1. In accordance with any agreement or voluntary arrangement between the employer and
the bargaining agent providing for a more expeditious manner of collective bargaining;
and
2. in its absence, in accordance with the provisions of the Labor Code, referring to Article
250 thereof which lays down the procedure in collective bargaining.1
A.2 DUTY TO BARGAIN COLLECTIVELY WHEN THERE IS A CBA

Article 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.
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Chan Labor Law Pre-Week Notes
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General Milling v. Court of Appeals, G.R. No. 146728, February 11, 2004, the issue in this
case is that whether or not the CA gravely abuse its discretion when it imposed on GMC the
draft CBA proposed by the union for two years commencing from the expiration of the original
CBA.
The Code provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. – ....
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 [prior to its
expiration date] and/or until a new agreement is reached by the parties. (Underscoring
supplied.)
The provision mandates the parties to keep the status quo while they are still in the process of
working out their respective proposal and counter proposal. The general rule is that when a
CBA already exists, its provision shall continue to govern the relationship between the parties,
until a new one is agreed upon. The rule necessarily presupposes that all other things are
equal. That is, that neither party is guilty of bad faith. However, when one of the parties abuses
this grace period by purposely delaying the bargaining process, a departure from the general
rule is warranted.
In Kiok Loy vs. NLRC, we found that petitioner therein, Sweden Ice Cream Plant, refused to
submit any counter proposal to the CBA proposed by its employees’ certified bargaining agent.
We ruled that the former had thereby lost its right to bargain the terms and conditions of the
CBA. Thus, we did not hesitate to impose on the erring company the CBA proposed by its
employees’ union - lock, stock and barrel. Our findings in Kiok Loy are similar to the facts in the
present case, to wit:
… petitioner Company’s approach and attitude – stalling the negotiation by a series of
postponements, non-appearance at the hearing conducted, and undue delay in submitting its
financial statements, lead to no other conclusion except that it is unwilling to negotiate and
reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or
willingness to discuss freely and fully the claims and demands set forth by the Union much less
justify its objection thereto.
Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and Employment,
petitioner therein, Divine Word University of Tacloban, refused to perform its duty to bargain
collectively. Thus, we upheld the unilateral imposition on the university of the CBA proposed by
the Divine Word University Employees Union. We said further:
That being the said case, the petitioner may not validly assert that its consent should be a
primordial consideration in the bargaining process. By its acts, no less than its action which
bespeak its insincerity, it has forfeited whatever rights it could have asserted as an employer.
Applying the principle in the foregoing cases to the instant case, it would be unfair to the union
and its members if the terms and conditions contained in the old CBA would continue to be
imposed on GMC’s employees for the remaining two (2) years of the CBA’s duration. We are
not inclined to gratify GMC with an extended term of the old CBA after it resorted to delaying
tactics to prevent negotiations. Since it was GMC which violated the duty to bargain collectively,
based on Kiok Loy and Divine Word University of Tacloban, it had lost its statutory right to
negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union.
We carefully note, however, that as strictly distinguished from the facts of this case, there was
no pre-existing CBA between the parties in Kiok Loy and Divine Word University of Tacloban.
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Nonetheless, we deem it proper to apply in this case the rationale of the doctrine in the said two
cases. To rule otherwise would be to allow GMC to have its cake and eat it too.
Under ordinary circumstances, 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
allowed to resort with impunity to schemes feigning negotiations by going through empty
gestures. Thus, by imposing on GMC the provisions of the draft CBA proposed by the union, in
our view, the interests of equity and fair play were properly served and both parties regained
equal footing, which was lost when GMC thwarted the negotiations for new economic terms of
the CBA. The findings of fact by the CA, affirming those of the NLRC as to the reasonableness
of the draft CBA proposed by the union should not be disturbed since they are supported by
substantial evidence.
General Milling ILU v. General Milling, G.R. No. 183122, June 15, 2011, Whether the
imposed CBA has full force and effect considering that it was not agreed upon by the Union and
GMC is the issue in this case.
Anent its period of effectivity, Article XIV of the imposed CBA provides that "(t)his Agreement
shall be in full force and effect for a period of five (5) years from 1 December 1991, provided
that sixty (60) days prior to the lapse of the third year of effectivity hereof, the parties shall open
negotiations on economic aspect for the fourth and fifth years effectivity of this Agreement."
Considering that no new CBA had been, in the meantime, agreed upon by GMC and the Union,
we find that the CA’s Special Twentieth Division correctly ruled that, pursuant to Article 253 of
the Labor Code, the provisions of the imposed CBA continues to have full force and effect until
a new CBA has been entered into by the parties. Article 253 mandates 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. In the same manner that it does not provide for any
exception nor qualification on which economic provisions of the existing agreement are to retain
its force and effect, the law does not distinguish between a CBA duly agreed upon by the parties
and an imposed CBA like the one under consideration.
Consequently, insofar as the execution of the 30 January 1998 decision is concerned, the Union
is out on a limb in espousing a computation which extends the benefits of the imposed CBA
beyond the remaining two-year duration of the original CBA. The rule is, after all, settled that an
order of execution which varies the tenor of the judgment or exceeds the terms thereof is a
nullity. Since execution not in harmony with the judgment is bereft of validity, it must conform,
more particularly, to that ordained or decreed in the dispositive portion of the decision sought to
be enforced. Considering that the decision sought to be enforced pertains to the period 1
December 1991 to 30 November 1993, it necessarily follows that the computation of benefits
under the imposed CBA should be limited to covered employees who were in GMC’s employ
during said period of time. While it is true that the provisions of the imposed CBA extend beyond
said remaining two-year duration of the original CBA in view of the parties’ admitted failure to
conclude a new CBA, the corresponding computation of the benefits accruing in favor of GMC’s
covered employees after the term of the original CBA was correctly excluded in the aforesaid 27
October 2005 order issued in RAB VII-06-0475-1992. Rather than the abbreviated pre-
execution proceedings before Executive Labor Arbiter Violeta Ortiz-Bantug, the computation of
the same benefits beyond 30 November 1993 should, instead, be threshed out by GMC and the
Union in accordance with the Grievance Procedure outlined as follows under Article XII of the
imposed CBA.
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B. COLLECTIVE BARGAINING AGREEMENT
What is a CBA?
A “Collective Bargaining Agreement” or “CBA” for short, refers to the negotiated contract
between a duly recognized or certified exclusive bargaining agent of workers and their
employer, concerning wages, hours of work and all other terms and conditions of employment in
the appropriate bargaining unit, including mandatory provisions for grievances and arbitration
machineries. It is executed not only upon the request of the exclusive bargaining representative
but also by the employer.2
What are the essential requisites of CBA?

Prior to any collective bargaining negotiations between the employer and the bargaining union,
the following requisites must first be satisfied:
1. Employer-employee relationship must exist between the employer and the members of the
bargaining unit being represented by the bargaining agent;
2. The bargaining agent must have the majority support of the members of the bargaining unit
established through the modes sanctioned by law; and
3. A lawful demand to bargain is made in accordance with law.3
B.1 MANDATORY PROVISIONS OF THE CBA

1. Grievance Procedure;
2. Voluntary Arbitration;
3. No Strike-No Lockout Clause; and
4. Labor-Management Council (LMC)
1. Grievance Procedure
Octavio v. PLDT, G.R. No. 175492, February 27, 2013, the present controversy involves the
determination of an employee’s salary increases as provided in the CBAs. When Octavio’s
claim for salary increases was referred to the Union-Management Grievance Committee, the
clear intention of the parties was to resolve their differences on the proper interpretation and
implementation of the pertinent provisions of the CBAs. And in accordance with the procedure
prescribed therein, the said committee made up of representatives of both the union and the
management convened. Unfortunately, it failed to reach an agreement. Octavio’s recourse
pursuant to the CBA was to elevate his grievance to the Board of Arbitrators for final decision.
Instead, nine months later, Octavio filed a Complaint before the NLRC. Every Collective
Bargaining Agreement (CBA) shall provide a grievance machinery to which all disputes arising
from its implementation or interpretation will be subjected to compulsory negotiations. This
essential feature of a CBA provides the parties with a simple, inexpensive and expedient system
2
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Chan Labor Law Reviewer (2019)
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of finding reasonable and acceptable solutions to disputes and helps in the attainment of a
sound and stable industrial peace. Under Article 260 of the Labor Code, grievances arising from
the interpretation or implementation of the parties’ CBA should be resolved in accordance with
the grievance procedure embodied therein. It also provides that all unsettled grievances shall be
automatically referred for voluntary arbitration as prescribed in the CBA.
It is settled that "when parties have validly agreed on a procedure for resolving grievances and
to submit a dispute to voluntary arbitration then that procedure should be strictly observed."
Moreover, we have held time and again that "before a party is allowed to seek the intervention
of the court, it is a precondition that he should have availed of all the means of administrative
processes afforded him. Hence, if a remedy within the administrative machinery can still be
resorted to by giving the administrative officer concerned every opportunity to decide on a
matter that comes within his jurisdiction, then such remedy should be exhausted first before the
court’s judicial power can be sought. The premature invocation of the court’s judicial intervention
is fatal to one’s cause of action." "The underlying principle of the rule on exhaustion of
administrative remedies rests on the presumption that when the administrative body, or
grievance machinery, is afforded a chance to pass upon the matter, it will decide the same
correctly." By failing to question the Committee Resolution through the proper procedure
prescribed in the CBA, that is, by raising the same before a Board of Arbitrators, Octavio is
deemed to have waived his right to question the same.
Book V, Rule I, Sec. 1 (u), Implementing Rules (Labor Code)

“Grievance” refers to any question either by the er or union re: interpretation or implementation
of any provision of CBA or interpretation or enforcement of company personnel policies.
Arts. 260-261, Labor Code

Article 260. Grievance machinery and voluntary arbitration. The parties to a Collective
Bargaining Agreement shall include therein provisions that will ensure the mutual observance of
its terms and conditions. They shall establish a machinery for the adjustment and resolution of
grievances arising from the interpretation or implementation of their Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel
policies.
All grievances submitted to the grievance machinery which are not settled within seven (7)
calendar days from the date of its submission shall automatically be referred to voluntary
arbitration prescribed in the Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining Agreement shall name and designate in
advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a
procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators,
preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case
the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall
designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary,
pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which
shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been
selected by the parties as described above.
Article 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. 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
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Collective Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies referred to in the immediately preceding article. Accordingly,
violations of a Collective Bargaining Agreement, except those which are gross (and economic)
in character, shall no longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this article, gross
violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to
comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional 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 Voluntary Arbitration
provided in the Collective Bargaining Agreement.
University of Santo Tomas Faculty Union vs. University of Sto. Tomas G.R. No. 203957,
July 30, 2014, t must be emphasized that the jurisdiction of the Voluntary Arbitrator or Panel of
Voluntary Arbitrators under Article 262 must be voluntarily conferred upon by bothlabor and
management. The labor disputes referred to in the same Article 262 can include all those
disputes mentioned in Article 217 over which the Labor Arbiter has original and exclusive
jurisdiction.
As shown in the above contextual and wholistic analysis of Articles 217, 261, and 262 of the
Labor Code, the National Labor Relations Commission correctly ruled that the Labor Arbiter had
no jurisdiction to hear and decide petitioner’s money-claim underpayment of retirement benefits,
as the controversy between the parties involved an issue "arising from the interpretationor
implementation" of a provision of the collective bargaining agreement. The Voluntary Arbitrator
or Panel of Voluntary Arbitrators has original and exclusive jurisdiction over the controversy
under Article 261 of the Labor Code, and not the Labor Arbiter..We cannot subscribe to
USTFU’s view that the 1996-2001 CBA’s Article X: Grievance Machinery is not applicable to the
present case. When the issue is about the grievance procedure, USTFU insists on a literal
interpretation of the 1996-2001 CBA. Indeed, the present case falls under Section 1’s definition
of grievance:"[a]ny misunderstanding concerning policies and practices directly affecting faculty
members covered by this [collective bargaining] agreement ortheir working conditions in the
UNIVERSITY or any dispute arising as to the meaning, application or violation of any provisions
of this Agreement or any complaint that a covered faculty member may have against the
UNIVERSITY." Section 2 excludes only termination and preventive suspension from the
grievance procedure. USTFU’s focus is on the 1996-2001 CBA’s provisions about the grievance
process rather than the provision about the subject matters covered by the grievance process.
Despite UST’s alleged violation of the economic provisions of the CBA by its insufficient
remittances to the fund, a dispute arising as to the meaning, application or violation of the CBA,
USTFU used Step I in Section 3, and ignored Steps III and IV, to rule out any referral to
voluntary arbitration. USTFU concludes that the 1996-2001 CBA’s provisions on grievance
machinery only refer to a grievance of a faculty member against UST, and that said provisions
do not contemplate a situation where USTFU itself has a grievance against UST.
1. VOLUNTARY ARBITRATION
University of Santo Tomas Faculty Union vs. University of Sto. Tomas G.R. No. 203957,
July 30, 2014, Article 217(c) of the Labor Code provides that the Labor Arbiter shall refer to the
grievance machinery and voluntary arbitration as provided in the CBA those cases that involve
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the interpretation of said agreements. Article 261 of the Labor Code further provides that all
unresolved grievances arising from the interpretation or implementation of the CBA, including
violations of said agreement, are under the original and exclusive jurisdiction of the voluntary
arbitrator or panel of voluntary arbitrators. Excluded from this original and exclusive jurisdiction
is gross violation of the CBA, which is defined in Article 261 as "flagrant and/or malicious refusal
to comply with the economic provisions" of the CBA. San Jose v. NLRC25 provides guidelines
for understanding Articles 217, 261, and 262:
1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators
over the cases enumerated in Articles 217, 261, and 262 can possibly include money claims in
one form or another.
2. The cases where the Labor Arbiters have original and exclusive jurisdiction are enumerated
in Article 217, and that of the Voluntary Arbitrator or Panel of Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an exception as
indicated in the introductory sentence of Article 217 (a), to wit:
"Art. 217. Jurisdiction of Labor Arbiters ... (a) Except as otherwise provided under this Code the
Labor Arbiter shall have original and exclusive jurisdiction to hear and decide ... the following
cases involving all workers..."
The phrase "Except as otherwise provided under this Code" refers to the following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters...
(c) Cases arising from the interpretation or implementation of collective bargaining agreement
and those arising from the interpretation or enforcement of company procedure/policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitrator as may be provided in said agreement.
B. Art. 262. Jurisdiction over other labor disputes. – The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks.
Parenthetically, the original and exclusive jurisdiction of the Labor Arbiter under Article 217 (c),
for money claims is limited only to those arising from statutes or contracts other than a
Collective Bargaining Agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators will
have original and exclusive jurisdiction over money claims "arising from the interpretation or
implementation of the Collective Bargaining Agreement and, those arising fromthe interpretation
or enforcement of company personnel policies," under Article 261.
4. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is provided for in Arts.
261 and 262 of the Labor Code as indicated above.
1. A close reading of Article 261 indicates that the original and exclusive jurisdiction of Voluntary
Arbitrator or Panel of Voluntary Arbitrators is limited only to:
"... unresolved grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company
personnel policies... Accordingly, violations of a collective bargaining agreement, except those
which are gross in character, shall no longer be treated as unfair labor practice and shall be
resolved asgrievances under the Collective Bargaining Agreement. x x x."
2. Voluntary Arbitrators or Panel of Voluntary Arbitrators, however, can exercise jurisdiction
over any and all disputes between an employer and a union and/or individual worker as
provided for in Article 262.
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"Art. 262. Jurisdiction over other labor disputes. - The voluntary arbitrator or panel of voluntary
arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes
including unfair labor practices and bargaining deadlocks."
Philippine Electric Corporation v. CA G.R. No. 168612, December 10, 2014, the issue in this
case is whether or not Voluntary Arbitrator gravely abused its discretion in directing PHILEC to
pay the training allowance based on CBA with PWU. No, the Voluntary Arbitrator did not gravely
abuse its discretion. The Voluntary Arbitrator correctly awarded training allowances based on
the amounts and formula of the CBA. A Collective Bargaining Agreement is “a contract
executed upon the request of either the employer or the exclusive bargaining representative of
the employees incorporating the agreement reached after the negotiations with respect to
wages, hours of work and all other terms and conditions of employment, including proposals for
adjusting any grievances or questions arising under such agreement.” A collective bargaining
agreement being a contract, its provisions “constitute the law between the parties” and must be
complied with in good faith. Therefore, the allowance of the members of the PWU must be
computed based on Article X of their CBA. Moreover, PHILEC allegedly applied the “Modified
SGV” pay grade scale to prevent any salary distortion within PHILEC’s enterprise. This,
however, does not justify PHILEC’s non-compliance with the collective bargaining agreement.
This pay grade scale is not provided in the collective bargaining agreement. It could have
invoked Article 252 of the Labor Code, to incorporate the “Modified SGV” pay grand scales in its
collective bargaining agreement with PWU. But it did not. Therefore, PHILEC cannot insist on
the “Modified SGV” pay grade scale’s application.
3. NO STRIKE-NO LOCKOUT CLAUSE
Alcantara & Sons v. Court of Appeals, G.R. No. 155109, September 29, 2010, The LA, the
NLRC, the CA and the Court are one in saying that the strike staged by the Union, participated
in by the Union officers and members, is illegal being in violation of the no strike-no lockout
provision of the CBA which enjoined both the Union and the company from resorting to the use
of economic weapons available to them under the law and to instead take recourse to voluntary
arbitration in settling their disputes. We, therefore, find no reason to depart from such
conclusion.
Article 264 (a) of the Labor Code lays down the liabilities of the Union officers and members
participating in illegal strikes and/or committing illegal acts, to wit:
ART. 264. PROHIBITED ACTIVITIES

Any worker whose employment has been terminated as a consequence of an unlawful lockout
shall be entitled to reinstatement with full backwages. Any Union officer who knowingly
participates in an illegal strike and any worker or Union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his employment status:
Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient
ground for termination of his employment, even if a replacement had been hired by the
employer during such lawful strike.
Thus, the above-quoted provision sanctions the dismissal of a Union officer who knowingly
participates in an illegal strike or who knowingly participates in the commission of illegal acts
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during a lawful strike. In this case, the Union officers were in clear breach of the above provision
of law when they knowingly participated in the illegal strike.
As to the Union members, the same provision of law provides that a member is liable when he
knowingly participates in the commission of illegal acts during a strike. We find no reason to
reverse the conclusion of the Court that CASI presented substantial evidence to show that the
striking Union members committed the following prohibited acts:
a. They threatened, coerced, and intimidated non-striking employees, officers, suppliers and
customers;
b. They obstructed the free ingress to and egress from the company premises; and
c. They resisted and defied the implementation of the writ of preliminary injunction issued
against the strikers.
The commission of the above prohibited acts by the striking Union members warrants their
dismissal from employment. Here, not only did the Court declare the strike illegal, rather, it also
found the Union officers to have knowingly participated in the illegal strike. Worse, the Union
members committed prohibited acts during the strike.
4. LABOR MANAGEMENT COUNCIL

Article 255. Exclusive bargaining representation and workers’ participation in policy and
decision-making. The labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be the exclusive representative
of the employees in such unit for the purpose of collective bargaining. However, an
individual employee or group of employees shall have the right at any time to present
grievances to their employer.
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 processes 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.
Art. 277 (h), Labor Code

The Ministry shall help promote and gradually develop, with the agreement of labor
organizations and employers, labor-management cooperation programs at appropriate
levels of the enterprise based on the shared responsibility and mutual respect in order to
ensure industrial peace and improvement in productivity, working conditions and the quality
of working life.
In establishments where no legitimate labor organization exists, labor-management
committees may be formed voluntarily by workers and employers for the purpose of
promoting industrial peace. The Department of Labor and Employment shall endeavor to
11
enlighten and educate the workers and employers on their rights and responsibilities
through labor education with emphasis on the policy thrusts of this Code.
B.2 DURATION
1. For economic provisions
2. For non-economic provisions
3. Freedom period
Art. 253-A, Labor Code

Article 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be conducted
by the Department of Labor and Employment outside of the sixty-day period immediately before
the date of expiry of such five-year term of the Collective Bargaining Agreement. All other
provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3)
years after its execution. 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.
General Milling v. Court of Appeals, G.R. No. 146728, February 11, 2004, ART. 253-A.
Terms of a collective bargaining agreement. – Any Collective Bargaining Agreement that the
parties may enter into shall, insofar as the representation aspect is concerned, be for a term of
five (5) years. No petition questioning the majority status of the incumbent bargaining agent
shall be entertained and no certification election shall be conducted by the Department of Labor
and Employment outside of the sixty-day period immediately before the date of expiry of such
five year term of the Collective Bargaining Agreement. All other provisions of the Collective
Bargaining Agreement shall be renegotiated not later than three (3) years after its execution....
The law mandates that the representation provision of a CBA should last for five years. The
relation between labor and management should be undisturbed until the last 60 days of the fifth
year. Hence, it is indisputable that when the union requested for a renegotiation of the economic
terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent of
the workers, because it was seeking said renegotiation within five (5) years from the date of
effectivity of the CBA on December 1, 1988. The union’s proposal was also submitted within the
prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of
said period. It was obvious that GMC had no valid reason to refuse to negotiate in good faith
with the union.
12
FVC Labor Union v. Sanama, G.R. No. 176249, November 27, 2009, The legal question
before us centers on the effect of the amended or extended term of the CBA on the exclusive
representation status of the collective bargaining agent and the right of another union to ask for
certification as exclusive bargaining agent. The question arises because 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.
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.
This Labor Code provision is implemented through Book V, Rule VIII of the Rules Implementing
the Labor Code which states:
Sec. 14. Denial of the petition; grounds. – The Med-Arbiter may dismiss the petition on any of
the following grounds:
xxxx
(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 (underscoring supplied).
xxxx
The root of the controversy can be traced to a misunderstanding of the interaction between a
union’s exclusive bargaining representation status in a CBA and the term or effective period of
the CBA.
FVCLU-PTGWO has taken the view that its exclusive representation status should fully be in
step with the term of the CBA and that this status can be challenged only within 60 days before
the expiration of this term. Thus, when the term of the CBA was extended, its exclusive
bargaining status was similarly extended so that the freedom period for the filing of a petition for
certification election should be counted back from the expiration of the amended CBA term.
We hold this FVCLU-PTGWO position to be correct, but only with respect to the original five-
year term of the CBA which, by law, is also the effective period of the union’s exclusive
bargaining representation status. 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
13
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. As we said in San Miguel Corp. Employees Union–
PTGWO, et al. v. Confesor, San Miguel Corp., Magnolia Corp. and San Miguel Foods, Inc.,
where we cited the Memorandum of the Secretary of Labor and Employment dated February
24, 1994:
In the event however, that the parties, by mutual agreement, enter into a renegotiated contract
with a term of three (3) years or one which does not coincide with the said 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.
In the present case, the CBA was originally signed for a period of five years, i.e., from February
1, 1998 to January 30, 2003, with a provision for the renegotiation of the CBA’s other provisions
at the end of the 3rd year of the five-year CBA term. Thus, prior to January 30, 2001 the
workplace parties sat down for renegotiation but instead of confining themselves to the
economic and non-economic CBA provisions, also extended the life of the CBA for another four
months, i.e., from the original expiry date on January 30, 2003 to May 30, 2003.
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.
Book V, Rule XVII, Secs. 7-8, Implementing Rules (Labor Code)
- Representation status is for 5 years.

- All provisions other than representation shall be renegotiated, as a matter of right, not later
than 3 years after its execution
- Renegotiated CBA shall be ratified and registered
3. FREEDOM PERIOD
Book V, Rule V, Sec. 6, Implementing Rules (Labor Code)
Picop Resources v. Taneca, G.R. No. 160828, August 9, 2010, We are in consonance with
the Court of Appeals when it held that the mere signing of the authorization in support of the
Petition for Certification Election of FFW on March 19, 20 and 21, or before the "freedom
14
period," is not sufficient ground to terminate the employment of respondents inasmuch as the
petition itself was actually filed during the freedom period. Nothing in the records would show
that respondents failed to maintain their membership in good standing in the Union.
Respondents did not resign or withdraw their membership from the Union to which they belong.
Respondents continued to pay their union dues and never joined the FFW.
Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing
an authorization letter to file a petition for certification election as they signed it outside the
freedom period. However, we are constrained to believe that an "authorization letter to file a
petition for certification election" is different from an actual "Petition for Certification Election."
Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW
was filed only on May 18, 2000. Thus, it was within the ambit of the freedom period which
commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is prohibited is the
filing of a petition for certification election outside the 60-day freedom period. This is not the
situation in this case. If at all, the signing of the authorization to file a certification election was
merely preparatory to the filing of the petition for certification election, or an exercise of
respondents’ right to self-organization.
Moreover, PRI anchored their decision to terminate respondents’ employment on Article 253 of
the Labor Code which states that "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 claimed that they are
still bound by the Union Security Clause of the CBA even after the expiration of the CBA; hence,
the need to terminate the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is particularly enlightening. It reads:
Article 256. Representation issue in organized establishments. - In organized establishments,
when a verified petition questioning the majority status of the incumbent bargaining agent is filed
before the Department of Labor and Employment within the sixty-day period before the
expiration of a collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot when the verified petition is supported by the written consent of at least
twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the
employees in the appropriate bargaining unit. To have a valid election, at least a majority of all
eligible voters in the unit must have cast their votes. The labor union receiving the majority of
the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the
unit. When an election which provides for three or more choices results in no choice receiving a
majority of the valid votes cast, a run-off election shall be conducted between the labor unions
receiving the two highest number of votes: Provided, That the total number of votes for all
contending unions is at least fifty per cent (50%) of the number of votes cast.
At the expiration of the freedom period, the employer shall continue to recognize the majority
status of the incumbent bargaining agent where no petition for certification election is filed.
Applying the same provision, it can be said that while it is incumbent for the employer to
continue to recognize the majority status of the incumbent bargaining agent even after the
expiration of the freedom period, they could only do so when no petition for certification election
was filed. The reason is, with a pending petition for certification, any such agreement entered
into by management with a labor organization is fraught with the risk that such a labor union
may not be chosen thereafter as the collective bargaining representative. The provision for
status quo is conditioned on the fact that no certification election was filed during the freedom
period. Any other view would render nugatory the clear statutory policy to favor certification
15
election as the means of ascertaining the true expression of the will of the workers as to which
labor organization would represent them.
C. UNION SECURITY
C.1 Union security clauses; closed shop, union shop, maintenance of membership shop
Picop Resources v. Dequilla, G.R. No. 172666, December 7, 2011, There is no question that
in the CBA entered into by the parties, there is a union security clause. The clause imposes
upon the workers the obligation to join and maintain membership in the company’s recognized
union as a condition for employment.
"Union security" is a generic term, which is applied to and comprehends "closed shop," "union
shop," "maintenance of membership," or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment.
There is union shop when all new regular employees are required to join the union within a
certain period as a condition for their continued employment.
There is maintenance of membership shop when employees, who are union members as of the
effective date of the agreement, or who thereafter become members, must maintain union
membership as a condition for continued employment until they are promoted or transferred out
of the bargaining unit, or the agreement is terminated.
A closed shop, on the other hand, may be defined as an enterprise in which, by agreement
between the employer and his employees or their representatives, no person may be employed
in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for
the duration of the agreement, remains a member in good standing of a union entirely
comprised of or of which the employees in interest are a part.
There is no dispute that private respondents were members of NAMAPRI-SPFL who were
terminated by PICOP due to alleged acts of disloyalty. It is basic in labor jurisprudence that the
burden of proof rests upon management to show that the dismissal of its worker was based on a
just cause.
When an employer exercises its power to terminate an employee by enforcing the union
security clause, it needs to determine and prove the following:
(1) the union security clause is applicable;
(2) the union is requesting for the enforcement of the union security provision in the CBA; and
(3) there is sufficient evidence to support the decision of the union to expel the employee from
the union.
In this case, the resolution thereof hinges on whether PICOP was able to show sufficient
evidence to support the decision of the union to expel private respondents from it.
PICOP basically contends that private respondents were justly terminated from employment for
campaigning, supporting and signing a petition for the certification of FFW, a rival union, before
the 60-day "freedom period" and during the effectivity of the CBA. Their acts constitute an act of
16
disloyalty against the union which is valid cause for termination pursuant to the Union Security
Clause in the CBA.
The Court finds Itself unable to agree.

Considering the peculiar circumstances, the Court is of the view that the acts of private
respondents are not enough proof of a violation of the Union Security Clause which would
warrant their dismissal. PICOP failed to show in detail how private respondents campaigned
and supported FFW. Their mere act of signing an authorization for a petition for certification
election before the freedom period does not necessarily demonstrate union disloyalty. It is far
from being within the definition of "acts of disloyalty" as PICOP would want the Court to believe.
The act of "signing an authorization for a petition for certification election" is not disloyalty to the
union per se considering that the petition for certification election itself was filed during the
freedom period which started on March 22, 2000.
Moreover, as correctly ruled by the CA, the records are bereft of proof of any contemporaneous
acts of resignation or withdrawal of union membership or non-payment of union dues. Neither is
there proof that private respondents joined FFW. The fact is, private respondents remained in
good standing with their union, NAMAPRI-SPFL. This point was settled in the case of PICOP
Resources, Incorporated (PRI) v. Anacleto L. Tañeca, where it was written:
However, as to the third requisite, we find that there is no sufficient evidence to support the
decision of PRI to terminate the employment of the respondents.
PRI alleged that respondents were terminated from employment based on the alleged acts of
disloyalty they committed when they signed an authorization for the Federation of Free Workers
(FFW) to file a Petition for Certification Election among all rank-and-file employees of PRI. It
contends that the acts of respondents are a violation of the Union Security Clause, as provided
in their Collective Bargaining Agreement.
We are unconvinced.
We are in consonance with the Court of Appeals when it held that the mere signing of the
authorization in support of the Petition for Certification Election of FFW on March 19, 20 and 21,
or before the "freedom period," is not sufficient ground to terminate the employment of
respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing
in the records would show that respondents failed to maintain their membership in good
standing in the Union. Respondents did not resign or withdraw their membership from the Union
to which they belong. Respondents continued to pay their union dues and never joined the
FFW.
17
Finally, PICOP insists that Article 253 of the Labor Code applies in this case, not Article 256
thereof. The Court agrees with the CA that its argument is misplaced. This issue was tackled
and settled in the same PICOP Resources, Incorporated (PRI) v. Tañeca case, to wit:
BPI v. BPI Union, G.R. No. 164301, August 10, 2010, Pursuant to the Article and Plan of
Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the
surviving corporation. FEBTC employees, including those in its different branches across the
country, were hired by petitioner as its own employees, with their status and tenure recognized
and salaries and benefits maintained.
Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI Unibank
(hereinafter the "Union," for brevity) is the exclusive bargaining agent of BPI’s rank and file
employees in Davao City. The former FEBTC rank-and-file employees in Davao City did not
belong to any labor union at the time of the merger. Prior to the effectivity of the merger, or on
March 31, 2000, respondent Union invited said FEBTC employees to a meeting regarding the
Union Shop Clause (Article II, Section 2) of the existing CBA between petitioner BPI and
respondent Union.
xxx
In essence, the sole issue in this case is whether or not the former FEBTC employees that were
absorbed by petitioner upon the merger between FEBTC and BPI should be covered by the
Union Shop Clause found in the existing CBA between petitioner and respondent Union.
xxx
Section 2, Article II of the CBA is silent as to how one becomes a "regular employee" of the BPI
for the first time. There is nothing in the said provision which requires that a "new" regular
employee first undergo a temporary or probationary status before being deemed as such under
the union shop clause of the CBA.
"Union security" is a generic term which is applied to and comprehends "closed shop," "union
shop," "maintenance of membership" or any other form of agreement which imposes upon
employment. There is union shop when all new regular employees are required to join the union
within a certain period for their continued employment. There is maintenance of membership
shop when employees, who are union members as of the effective date of the agreement, or
who thereafter become members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the agreement is
terminated. A closed-shop, on the other hand, may be defined as an enterprise in which, by
agreement between the employer and his employees or their representatives, no person may
be employed in any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good standing of a
union entirely comprised of or of which the employees in interest are a part.
18
In the case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc., we ruled that:
It is the policy of the State to promote unionism to enable the workers to negotiate with
management on the same level and with more persuasiveness than if they were to individually
and independently bargain for the improvement of their respective conditions. To this end, the
Constitution guarantees to them the rights "to self-organization, collective bargaining and
negotiations and peaceful concerted actions including the right to strike in accordance with law."
There is no question that these purposes could be thwarted if every worker were to choose to
go his own separate way instead of joining his co-employees in planning collective action and
presenting a united front when they sit down to bargain with their employers. It is for this reason
that the law has sanctioned stipulations for the union shop and the closed shop as a means of
encouraging the workers to join and support the labor union of their own choice as their
representative in the negotiation of their demands and the protection of their interest vis-à-vis
the employer. (Emphasis ours.)
In other words, the purpose of a union shop or other union security arrangement is to guarantee
the continued existence of the union through enforced membership for the benefit of the
workers.
All employees in the bargaining unit covered by a Union Shop Clause in their CBA with
management are subject to its terms.
However, under law and jurisprudence, the following kinds of employees are exempted from its
coverage, namely,
employees who at the time the union shop agreement takes effect are bona fide members of a
religious organization which prohibits its members from joining labor unions on religious
grounds;
employees already in the service and already members of a union other than the majority at the
time the union shop agreement took effect;
confidential employees who are excluded from the rank and file bargaining unit;
and employees excluded from the union shop by express terms of the agreement.
When certain employees are obliged to join a particular union as a requisite for continued
employment, as in the case of Union Security Clauses, this condition is a valid restriction of the
freedom or right not to join any labor organization because it is in favor of unionism. This Court,
on occasion, has even held that a union security clause in a CBA is not a restriction of the right
of freedom of association guaranteed by the Constitution.
Moreover, a closed shop agreement is an agreement whereby an employer binds himself to hire
only members of the contracting union who must continue to remain members in good standing
to keep their jobs. It is "the most prized achievement of unionism." It adds membership and
compulsory dues. By holding out to loyal members a promise of employment in the closed shop,
it wields group solidarity.
Indeed, the situation of the former FEBTC employees in this case clearly does not fall within the
first three exceptions to the application of the Union Shop Clause discussed earlier. No
allegation or evidence of religious exemption or prior membership in another union or
engagement as a confidential employee was presented by both parties. The sole category
therefore in which petitioner may prove its claim is the fourth recognized exception or whether
the former FEBTC employees are excluded by the express terms of the existing CBA between
petitioner and respondent.
xxx
19
The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge
upon the individual employee’s right or freedom of association, is not to protect the union for the
union’s sake. Laws and jurisprudence promote unionism and afford certain protections to the
certified bargaining agent in a unionized company because a strong and effective union
presumably benefits all employees in the bargaining unit since such a union would be in a better
position to demand improved benefits and conditions of work from the employer. This is the
rationale behind the State policy to promote unionism declared in the Constitution, which was
elucidated in the above-cited case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.
In the case at bar, since the former FEBTC employees are deemed covered by the Union Shop
Clause, they are required to join the certified bargaining agent, which supposedly has gathered
the support of the majority of workers within the bargaining unit in the appropriate certification
proceeding. Their joining the certified union would, in fact, be in the best interests of the former
FEBTC employees for it unites their interests with the majority of employees in the bargaining
unit. It encourages employee solidarity and affords sufficient protection to the majority status of
the union during the life of the CBA which are the precisely the objectives of union security
clauses, such as the Union Shop Clause involved herein. We are indeed not being called to
balance the interests of individual employees as against the State policy of promoting unionism,
since the employees, who were parties in the court below, no longer contested the adverse
Court of Appeals’ decision. Nonetheless, settled jurisprudence has already swung the balance
in favor of unionism, in recognition that ultimately the individual employee will be benefited by
that policy. In the hierarchy of constitutional values, this Court has repeatedly held that the right
to abstain from joining a labor organization is subordinate to the policy of encouraging unionism
as an instrument of social justice.
xxx
In sum, this Court finds it reasonable and just to conclude that the Union Shop Clause of the
CBA covers the former FEBTC employees who were hired/employed by BPI during the
effectivity of the CBA in a manner which petitioner describes as "absorption." A contrary
appreciation of the facts of this case would, undoubtedly, lead to an inequitable and very volatile
labor situation which this Court has consistently ruled against.1avv
phi1
In the case of former FEBTC employees who initially joined the union but later withdrew their
membership, there is even greater reason for the union to request their dismissal from the
employer since the CBA also contained a Maintenance of Membership Clause.
A final point in relation to procedural due process, the Court is not unmindful that the former
FEBTC employees’ refusal to join the union and BPI’s refusal to enforce the Union Shop Clause
in this instance may have been based on the honest belief that the former FEBTC employees
were not covered by said clause. In the interest of fairness, we believe the former FEBTC
employees should be given a fresh thirty (30) days from notice of finality of this decision to join
the union before the union demands BPI to terminate their employment under the Union Shop
Clause, assuming said clause has been carried over in the present CBA and there has been no
material change in the situation of the parties.
BPI vs. BPI Union G.R. No. 164301 October 19, 2011, May the "absorbed" FEBTC employees
fell within the definition of "new employees," under the Union Shop Clause, such that they be
required to join respondent union or suffer termination upon request by the union?
20
The court agreed with Justice Brion's view that it is more in keeping with the dictates of social
justice and the State policy of according full protection to labor to deem employment contracts
as automatically assumed by the surviving corporation in a merger, without break in the
continuity of their employment, and even in the absence of an express stipulation in the articles
of merger or the merger plan. By upholding the automatic assumption of the non-surviving
corporations existing employment contracts by the surviving corporation in a merger, the Court
strengthens judicial protection of the right to security of tenure of employees affected by a
merger and avoid confusion regarding the status of their various benefits. However, it shall be
noted that nothing in the Resolution shall impair the right of an employer to terminate the
employment of the absorbed employees for a lawful or authorized cause or the right of such an
employee to resign, retire or otherwise sever his employment, whether before or after the
merger, subject to existing contractual obligations. Although by virtue of the merger BPI steps
into the shoes of FEBTC as a successor employer as if the former had been the employer of the
latters employees from the beginning it must be emphasized that, in reality, the legal
consequences of the merger only occur at a specific date,i.e.,upon its effectivity which is the
date of approval of the merger by the SEC.Thus, the court observed in the Decision that BPI
and FEBTC stipulated in the Articles of Merger that they will both continue their respective
business operations until the SEC issues the certificate of merger and in the event no such
certificate is issued, they shall hold each other blameless for the non-consummation of the
merger. In other words, the obligation of BPI to pay the salaries and benefits of the former
FEBTC employees and its right of discipline and control over them only arose with the effectivity
of the merger. Concomitantly, the obligation of former FEBTC employees to render service to
BPI and their right to receive benefits from the latter also arose upon the effectivity of the
merger. What is material is that all of these legal consequences of the merger took place during
the life of an existing and valid CBA between BPI and the Union wherein they have mutually
consented to include a Union Shop Clause.
BPI-Union v BPI G.R. No. 174912, July 24, 2013, Whether or not the act of BPI to outsource
the cashiering, distribution, and bookkeeping functions to BOMC is in conformity with the law
and the existing CBA.
Yes. Labor Law- only gross violations of the economic provisions of the CBA are treated as
ULP. Otherwise, they are mere grievances.
In the present case, the alleged violation of the union shop agreement in the CBA, even
assuming it was malicious and flagrant, is not a violation of an economic provision in the
agreement. The provisions relied upon by the Union were those articles referring to the
recognition of the union as the sole and exclusive bargaining representative of all rank-and-file
employees, as well as the articles on union security, specifically, the maintenance of
membership in good standing as a condition for continued employment and the union shop
clause. It failed to take into consideration its recognition of the bank’s exclusive rights and
prerogatives, likewise, provided in the CBA, which included the hiring of employees, promotion,
transfers, and dismissals for just cause and the maintenance of order, discipline, and efficiency
in its operations.
The Union, however, insists that jobs being outsourced to BOMC were included in the existing
bargaining unit, thus, resulting in a reduction of several positions in such unit. The reduction
interfered with the employees right to self-organization because the power of a union primarily
depends on its strength in number.
It is incomprehensible how the "reduction of positions in the collective bargaining unit" interferes
with the employees right to self-organization because the employees themselves were neither
transferred nor dismissed from the service. In the case at hand, the union has not presented
21
even an iota of evidence that petitioner bank has started to terminate certain employees,
members of the union. In fact, what appears is that the Bank has exerted utmost diligence, care,
and effort to see to it that no union member has been terminated. In the process of the
consolidation or merger of the two banks which resulted in increased diversification of functions,
some of these non-banking functions were merely transferred to the BOMC without affecting the
union membership.
It is to be emphasized that contracting out of services is not illegal per se. It is an exercise of
business judgment or management prerogative. Absent proof that the management acted in a
malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an
employer. In this case, bad faith cannot be attributed to BPI because its actions were authorized
by CBP Circular No. 1388, Series of 1993 issued by the Monetary Board of the then Central
Bank of the Philippines (now Bangko Sentral ng Pilipinas).
Alabang Country Club v. NLRC, G.R. No. 170287, February 14, 2008, Under the Labor Code,
an employee may be validly terminated on the following grounds: (1) just causes under Art. 282;
(2) authorized causes under Art. 283; (3) termination due to disease under Art. 284; and (4)
termination by the employee or resignation under Art. 285.
Another cause for termination is dismissal from employment due to the enforcement of the
union security clause in the CBA. Here, Art. II of the CBA on Union security contains the
provisions on the Union shop and maintenance of membership shop. There is union shop when
all new regular employees are required to join the union within a certain period as a condition for
their continued employment. There is maintenance of membership shop when employees who
are union members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued employment until they
are promoted or transferred out of the bargaining unit or the agreement is terminated.
Termination of employment by virtue of a union security clause embodied in a CBA is
recognized and accepted in our jurisdiction. This practice strengthens the union and prevents
disunity in the bargaining unit within the duration of the CBA. By preventing member
disaffiliation with the threat of expulsion from the union and the consequent termination of
employment, the authorized bargaining representative gains more numbers and strengthens its
position as against other unions which may want to claim majority representation.
In terminating the employment of an employee by enforcing the union security clause, the
employer needs only to determine and prove that: (1) the union security clause is applicable; (2)
the union is requesting for the enforcement of the union security provision in the CBA; and (3)
there is sufficient evidence to support the union's decision to expel the employee from the
union. These requisites constitute just cause for terminating an employee based on the CBA's
union security provision.
The language of Art. II of the CBA that the Union members must maintain their membership in
good standing as a condition sine qua non for their continued employment with the Club is
unequivocal. It is also clear that upon demand by the Union and after due process, the Club
shall terminate the employment of a regular rank-and-file employee who may be found liable for
a number of offenses, one of which is malversation of Union funds.
xxx
Gleaned from the above, the three respondents were expelled from and by the Union after due
investigation for acts of dishonesty and malversation of Union funds. In accordance with the
22
CBA, the Union properly requested the Club, through the October 18, 2001 letter signed by
Mario Orense, the Union President, and addressed to Cynthia Figueroa, the Club's HRD
Manager, to enforce the Union security provision in their CBA and terminate said respondents.
Then, in compliance with the Union's request, the Club reviewed the documents submitted by
the Union, requested said respondents to submit written explanations, and thereafter afforded
them reasonable opportunity to present their side. After it had determined that there was
sufficient evidence that said respondents malversed Union funds, the Club dismissed them from
their employment conformably with Sec. 4(f) of the CBA.
Considering the foregoing circumstances, we are constrained to rule that there is sufficient
cause for the three respondents' termination from employment.
xxx
In the above case, we pronounced that while the company, under a maintenance of
membership provision of the CBA, is bound to dismiss any employee expelled by the union for
disloyalty upon its written request, this undertaking should not be done hastily and summarily.
The company acts in bad faith in dismissing a worker without giving him the benefit of a hearing.
We cautioned in the same case that the power to dismiss is a normal prerogative of the
employer; however, this power has a limitation. The employer is bound to exercise caution in
terminating the services of the employees especially so when it is made upon the request of a
labor union pursuant to the CBA. Dismissals must not be arbitrary and capricious. Due process
must be observed in dismissing employees because the dismissal affects not only their
positions but also their means of livelihood. Employers should respect and protect the rights of
their employees, which include the right to labor. The CA and the three respondents err in
relying on Malayang Samahan, as its ruling has no application to this case. In Malayang
Samahan, the union members were expelled from the union and were immediately dismissed
from the company without any semblance of due process. Both the union and the company did
not conduct administrative hearings to give the employees a chance to explain themselves. In
the present case, the Club has substantially complied with due process. The three respondents
were notified that their dismissal was being requested by the Union, and their explanations were
heard. Then, the Club, through its President, conferred with said respondents during the last
week of October 2001. The three respondents were dismissed only after the Club reviewed and
considered the documents submitted by the Union vis-à-vis the written explanations submitted
by said respondents. Under these circumstances, we find that the Club had afforded the three
respondents a reasonable opportunity to be heard and defend themselves.
Picop Resources v. Taneca, G.R. No. 160828, August 9, 2010, We now come to the main
issue of whether there was just cause to terminate the employment of respondents.
PRI argued that the dismissal of the respondents was valid and legal. It claimed to have acted in
good faith at the instance of the incumbent union pursuant to the Union Security Clause of the
CBA.
Citing Article 253 of the Labor Code, PRI contends that as parties to the CBA, they are enjoined
to keep the status quo and continue in full force and effect the terms and conditions of the
existing CBA during the 60-day period and/or until a new agreement is reached by the parties.
Petitioner's argument is untenable.
"Union security" is a generic term, which is applied to and comprehends "closed shop," "union
shop," "maintenance of membership," or any other form of agreement which imposes upon
23
employment. There is union shop when all new regular employees are required to join the union
within a certain period as a condition for their continued employment. There is maintenance of
membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a
condition for continued employment until they are promoted or transferred out of the bargaining
unit, or the agreement is terminated. A closed shop, on the other hand, may be defined as an
enterprise in which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of which the employees in interest
are a part.
However, in terminating the employment of an employee by enforcing the union security clause,
the employer needs to determine and prove that: (1) the union security clause is applicable; (2)
the union is requesting for the enforcement of the union security provision in the CBA; and (3)
there is sufficient evidence to support the decision of the union to expel the employee from the
union. These requisites constitute just cause for terminating an employee based on the union
security provision of the CBA.
As to the first requisite, there is no question that the CBA between PRI and respondents
included a union security clause, specifically, amaintenance of membership as stipulated in
Sections 6 of Article II, Union Security and Check-Off. Following the same provision, PRI, upon
written request from the Union, can indeed terminate the employment of the employee who
failed to maintain its good standing as a union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from
PRI, in their letters dated May 16 and 23, 2000, to terminate the employment of respondents
due to their acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no sufficient evidence to support the
decision of PRI to terminate the employment of the respondents.
PRI alleged that respondents were terminated from employment based on the alleged acts of
disloyalty they committed when they signed an authorization for the Federation of Free Workers
(FFW) to file a Petition for Certification Election among all rank-and-file employees of PRI. It
contends that the acts of respondents are a violation of the Union Security Clause, as provided
in their Collective Bargaining Agreement We are unconvinced.
We are in consonance with the Court of Appeals when it held that the mere signing of the
authorization in support of the Petition for Certification Election of FFW on March 19, 20 and 21,
or before the "freedom period," is not sufficient ground to terminate the employment of
respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing
in the records would show that respondents failed to maintain their membership in good
standing in the Union. Respondents did not resign or withdraw their membership from the Union
to which they belong. Respondents continued to pay their union dues and never joined the
FFW.
24
General Milling Corp. v Casio G.R. No. 149552 March 10, 2010, In terminating the
employment of an employee by enforcing the union security clause, the employer needs only to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting
for the enforcement of the union security provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel the employee from the union.These
requisites constitute just cause for terminating an employee based on the union security
provision of the CBA. There is no question that in the present case, the CBA between GMC and
IBM-Local 31 included a maintenance of membership and closed shop clause as can be
gleaned from Sections 3 and 6 of Article II.IBM-Local 31, by written request, can ask GMC to
terminate the employment of the employee/worker who failed to maintain its good standing as a
union member.
It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for
Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to
terminate the employment of Casio,et al. as a necessary consequence of their expulsion from
the union. It is the third requisite that there is sufficient evidence to support the decision of IBM-
Local 31 to expel Casio,et al. which appears to be lacking in this case. Records show that GMC
terminated the employment of Casio,et al. relying upon the Resolution dated February 29, 1992
of Pino,et al. expelling Casio,et al. from IBM-Local 31; Gabianas Letters dated March 10 and 19,
1992 demanding that GMC terminate the employment of Casio,et al. on the basis of the closed
shop clause in the CBA; and the threat of being sued by IBM-Local 31 for unfair labor
practice.The letter made no mention at all of the evidence supporting the decision of IBM-Local
31 to expel Casio,et al. from the union.GMC never alleged nor attempted to prove that the
company actually looked into the evidence of IBM-Local 31 for expelling Casio,et al. and made
a determination on the sufficiency thereof.Without such a determination, GMC cannot claim that
it had terminated the employment of Casio,et al. for just cause. The failure of GMC to make a
determination of the sufficiency of evidence supporting the decision of IBM-Local 31 to expel
Casio,et al. is a direct consequence of the non-observance by GMC of procedural due process
in the dismissal of employees.
The records of this case are absolutely bereft of any supporting evidence to substantiate the
bare allegation of GMC that Casio,et al. were accorded due process by IBM-Local 31.There is
nothing on record that would indicate that IBM-Local 31 actually notified Casio,et al. of the
charges against them or that they were given the chance to explain their side. It was not
established that said letter-complaint charging Casio,et al. with acts inimical to the interest of the
union was properly served upon Casio, that Casio willfully refused to accept the said letter-
notice, or that Casio had the authority to receive the same letter-notice on behalf of the other
employees similarly accused.
25
C.2 CHECK-OFF; UNION DUES, AGENCY FEES
Arts. 241 (o) Labor Code

Other than for mandatory activities under the Code, no special assessments, attorney’s fees,
negotiation fees or any other extraordinary fees may be checked off from any amount due to an
employee without an individual written authorization duly signed by the employee. The
authorization should specifically state the amount, purpose and beneficiary of the deduction;
and 277 (a)
All unions are authorized to collect reasonable membership fees, union dues, assessments and
fines and other contributions for labor education and research, mutual death and hospitalization
benefits, welfare fund, strike fund and credit and cooperative undertakings
Art. 248 (e), Labor Code

Employees of an appropriate 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 bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-
members of the recognized collective bargaining agent;
Del Pilar Academy v. Del Pilar Union, G.R. No. 170112, April 30, 2008 , Whether or not the
UNION is entitled to collect agency fees from non-union members, and if so, whether an
individual written authorization is necessary for a valid check off. Yes. The collection of agency
fees in an amount equivalent to union dues and fees, from employees who are not union
members, is recognized by Article 248(e) of the Labor Code.
Article 248(e) of the Labor Code provides that employees of an appropriate collective bargaining
unit who are not members of the recognized collective bargaining agent may be assessed
reasonable fees equivalent to the dues and other fees paid by the recognized collective
bargaining agent, if such non-union members accept the benefits under the collective
bargaining agreement. Provided, That the individual authorization required under Article 241,
paragraph (o) of this Code shall not apply to the non-members of recognized collective
bargaining agent.
When so stipulated in a collective bargaining agreement or authorized in writing by the
employees concerned, the Labor Code and its Implementing Rules recognize it to be the duty of
the employer to deduct the sum equivalent to the amount of union dues, as agency fees, from
the employees' wages for direct remittance to the union. The system is referred to as check off.
No requirement of written authorization from the non-union employees is necessary if the non-
union employees accept the benefits resulting from the CBA.
26
Accordingly, no requirement of written authorization from the non-union employees is needed to
effect a valid check off. Article 248(e) makes it explicit that Article 241, paragraph
(o),14 requiring written authorization is inapplicable to non-union members, especially in this
case where the non-union employees receive several benefits under the CBA.
Holy Cross of Davao College v. Joaquin, G.R. No. 110007, October 18, 1996, Whether or not
an employer is liable to pay to the union of its employees, the amounts it failed to deduct from
their salaries — as union dues (with respect to union members) or agency fees (as regards
those not union members) — in accordance with the check-off provisions of the collective
bargaining contract (CBA) which it claims to have been automatically extended. NO, A check-off
is a process or device whereby the employer, on agreement with the union recognized as the
proper bargaining representative, or on prior authorization from its employees, deducts union
dues or agency fees from the latter's wages and remits them directly to the union. Its
desirability to a labor organization is quite evident; by it, it is assured of continuous funding.
Indeed, this Court has acknowledged that the system of check-off is primarily for the benefit of
the union and, only indirectly, of the individual laborers. When so stipulated in a collective
bargaining agreement, or authorized in writing by the employees concerned — the Labor Code
and its Implementing Rules recognize it to be the duty of the employer to deduct sums
equivalent to the amount of union dues from the employees' wages for direct remittance to the
union, in order to facilitate the collection of funds vital to the role of the union as representative
of employees in a bargaining unit if not, indeed, to its very existence. And it may be mentioned
in this connection that the right to union dues deducted pursuant to a check-off, pertains to the
local union which continues to represent the employees under the terms of a CBA, and not to
the parent association from which it has disaffiliated. The legal basis of check-off is thus found
in statute or in contract. Statutory limitations on check-offs generally require written
authorization from each employee to deduct wages; however, a resolution approved and
adopted by a majority to the union members at a general meeting will suffice when the right to
check-off has been recognized by the employer, including collection of reasonable assessments
in connection with mandatory activities of the union, or other special assessments and
extraordinary fees. Authorization to effect a check-off of union dues is co-terminous with the
union affiliation or membership of employees. On the other hand, the collection of agency
fees in an amount equivalent to union dues and fees, from employees who are not union
members, is recognized by Article 248 (e) of the Labor Code. No requirement of written
authorization from the non-union employee is imposed. The employee's acceptance of benefits
resulting from a collective bargaining agreement justifies the deduction of agency fees from his
pay and the union's entitlement thereto. In this aspect, the legal basis of the union's right to
agency fees is neither contractual nor statutory, but quasi-contractual, deriving from the
established principle that non-union employees may not unjustly enrich themselves by
benefiting from employment conditions negotiated by the bargaining union.
No provision of law makes the employer directly liable for the payment to the labor organization
of union dues and assessments that the former fails to deduct from its employees' salaries and
wages pursuant to a check-off stipulation. The employer's failure to make the requisite
deductions may constitute a violation of a contractual commitment for which it may incur liability
for unfair labor practice. But it does not by that omission, incur liability to the union for the
aggregate of dues or assessments uncollected from the union members, or agency fees for
non-union employees.Checkoffs in truth impose an extra burden on the employer in the form of
additional administrative and bookkeeping costs. It is a burden assumed by management at the
instance of the union and for its benefit, in order to facilitate the collection of dues necessary for
the latter's life and sustenance. But the obligation to pay union dues and agency fees obviously
27
devolves not upon the employer, but the individual employee. It is a personal obligation not
demandable from the employer upon default or refusal of the employee to consent to a check-
off. The only obligation of the employer under a check-off is to effect the deductions and remit
the collections to the union. The principle of unjust enrichment necessarily precludes recovery of
union dues — or agency fees — from the employer, these being, to repeat, obligations
pertaining to the individual worker in favor of the bargaining union. Where the employer fails or
refuses to implement a check-off agreement, logic and prudence dictate that the union itself
undertake the collection of union dues and assessments from its members (and agency fees
from non-union employees); this, of course, without prejudice to suing the employer for unfair
labor practice. There was thus no basis for the Voluntary Arbitrator to require Holy Cross to
assume liability for the union dues and assessments, and agency fees that it had failed to
deduct from its employees' salaries on the proffered plea that contrary to established practice,
KAMAPI had failed to submit to the college comptroller every 8th day of the month, a list of
employees from whose pay union dues and the corresponding agency fees were to be
deducted.
D. UNFAIR LABOR PRACTICE IN COLLECTIVE BARGAINING
When an act constitutes ULP?

At the outset, it must be clarified that not all unfair acts constitute ULPs. While an act or decision
of an employer or a union may be unfair, certainly not every unfair act or decision thereof may
constitute ULP as defined and enumerated under the law.
The act complained of as ULP must have a proximate and causal connection with any of the
following 3 rights:
1. Exercise of the right to self-organization;
2. Exercise of the right to collective bargaining; or
3. Compliance with CBA.
Sans this connection, the unfair acts do not fall within the technical signification of the term
“unfair labor practice.”4
What are the labor code provisions of ULP?

Under the Labor Code, there are only five (5) provisions related to ULP, to wit:
1. Article 258 [247] which describes the concept of ULPs and prescribes the procedure for their
prosecution;
2. Article 259 [248] which enumerates the ULPs that may be committed by employers;
3. Article 260 [249] which enumerates the ULPs that may be committed by labor organizations;
4. Article 274 [261] which considers violations of the CBA as no longer ULPs unless the same
are gross in character which means flagrant and/or malicious refusal to comply with the
economic provisions thereof.
5. Article 278(c) [263(c)] which refers to union-busting, a form of ULP, involving the dismissal
from
4
28
employment of union officers duly elected in accordance with the union constitution and by-
laws, where the existence of the union is threatened thereby.
What are the elements of ULP?

1. There should exist an employer-employee relationship between the offended party and the
offender; and
2. The act complained of must be expressly mentioned and defined in the Labor Code as an
unfair labor practice. Absent one of the elements aforementioned will not make the act an unfair
labor practice.5
D.1 BARGAINING IN BAD FAITH
Tabangao Shell v. Pilipinas Shell, G.R. No. 170007, April 7, 2014, The final and executory
Decision dated June 8, 2005 of the Secretary of Labor and Employment squarely addressed the
contention of the union that the company was guilty of bargaining in bad faith. The said Decision
correctly characterized the nature of the duty to bargain, that is, it does not compel any party to
accept a proposal or to make any concession. While the purpose of collective bargaining is the
reaching of an agreement between the employer and the employee’s union resulting in a
binding contract between the parties, the failure to reach an agreement after negotiations
continued for a reasonable period does not mean lack of good faith. The laws invite and
contemplate a collective bargaining contract but do not compel one. For after all, a CBA, like
any contract is a product of mutual consent and not of compulsion. As such, the duty to bargain
does not include the obligation to reach an agreement. In this light, the corporation’s unswerving
position on the matter of annual lump sum payment in lieu of wage increase did not, by itself,
constitute bad faith even if such position caused a stalemate in the negotiations, as correctly
ruled by the Secretary of Labor and Employment in the decision dated June 8, 2005.
Union Filipino Workers vs Nestle Gr No. 158930-31 August 22, 2006, Nestlé’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. Construing
arguendo that the content of the aforequoted letter of 29 May 2001 laid down a pre-condition to
its agreement to bargain with UFE-DFA-KMU, Nestlé’s inclusion in its Position Paper of its
proposals affecting other matters covered by the CBA contradicts the claim of refusal to bargain
or bargaining in bad faith. Accordingly, since UFE-DFA-KMU failed to proffer substantial
evidence that would overcome the legal presumption of good faith on the part of Nestlé, the
award of moral and exemplary damages is unavailing.
It must be remembered at all times that the Philippine Constitution, while inexorably committed
towards the protection of the working class from exploitation and unfair treatment, nevertheless
mandates the policy of social justice so as to strike a balance between an avowed predilection
for labor, on the one hand, and the maintenance of the legal rights of capital, the proverbial hen
that lays the golden egg, on the other. Indeed, we should not be unmindful of the legal norm that
justice is in every case for the deserving, to be dispensed with in the light of established facts,
the applicable law, and existing jurisprudence.
5
29
Central Azucarera De Bais Union vs Central Azucarera G.R. No. 186605 November
12,2010, Whether or not CAB is guilty of unfair labor practice? No. The CAB is not guilty of
unfair labor practice. Article 247 of the Labor Code provides that "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."
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.
D.2 REFUSAL TO BARGAIN
De La Salle v. De La Salle Employees Assoc., G.R. No. 169254, August 23, 2012, Whether
or not DLSU is guilty of unfair labor practice when it refused to bargain collectively with the
DLSUEA-NAFTEU in light of the intra-union conflict between DLSUEA-NAFTEU two opposing
factions? Inevitably, G.R. No. 168477 and this petition seek only one relief, that is, to absolve
petitioner from respondent’s charge of committing an unfair labor practice, or specifically, a
violation of Article 248(g) in relation to Article 252 of the Labor Code. In other words, our
previous affirmance of the Court of Appeals finding that petitioner erred in suspending collective
bargaining negotiations with the union and in placing the union funds in escrow considering that
the intra-union dispute between the Aliazas and Baz factions was not a justification therefor is
binding herein.
Petitioner alleged therein that the Secretary of Labor committed grave abuse of discretion by
holding that it (petitioner) was liable for unfair labor practice. Taking a contrary stance to the
findings of the Secretary of Labor, petitioner stressed that it created the escrow accounts for the
benefit of the winning faction and undertook temporary measures in light of the March 19, 2001
and July 6, 2001 Orders of the BLR. Thus, it should not be penalized for taking a hands-off
stance in the intra-union controversy between the Aliazas and Bañez factions.
The law of the case has been defined as the opinion delivered on a former appeal. It means that
whatever is once irrevocably established as the controlling legal rule or decision between the
same parties in the same case continues to be the law of the case, whether correct on general
principles or not, so long as the facts on which such decision was predicated continue to be the
facts of the case before the court. Neither can petitioner seek refuge in its defense that as early
as November 2003 it had already released the escrowed union dues to respondent and
normalized relations with the latter. The fact remains that from its receipt of the July 28, 2003
Decision of the Secretary of Labor in OS-AJ-0015-2003 until its receipt of the November 17,
30
2003 Decision of the Secretary of Labor in OS-AJ-0033-2003, petitioner failed in its duty to
collectively bargain with respondent union without valid reason.
REN Transport Corp. vs. NLRC, et. al. GR No. 188020 & 188252, 27 June 2016, Violation of
the duty to bargain collectively is an unfair labor practice under Article 258(g) of the Labor Code.
An instance of this practice is the refusal to bargain collectively.
It bears stressing that REN had a duty to bargain collectively with SMART. Under Article 263 in
relation to Article 267 of the Labor Code, it is during the freedom period - or the last 60 days
before the expiration of the CBA - when another union may challenge the majority status of the
bargaining agent through the filing of a petition for a certification election. If there is no such
petition filed during the freedom period, then the employer “shall continue to recognize the
majority status of the incumbent bargaining agent where no petition for certification election is
filed.”
In the present case, no petition for certification election challenging the majority status of
SMART was filed during the freedom period, which was from November 1 to December 31,
2004 - the 60-day period prior to the expiration of the five-year CBA. SMART therefore
remained the exclusive bargaining agent of the rank-and-file employees. Given that SMART
continued to be the workers' exclusive bargaining agent, REN had the corresponding duty to
bargain collectively with the former. REN’s refusal to do so constitutes an unfair labor practice.
Consequently, REN cannot avail itself of the defense that SMART no longer represents the
majority of the workers. The fact that no petition for certification election was filed within the
freedom period prevented REN from challenging SMART's existence and membership.
D.3 INDIVIDUAL BARGAINING
Manila Diamond Hotel v. Hotel Employees Union, G.R. No. 158075, June 30, 2006, Article
255 of the Labor Code provides:
31
ART. 255. EXCLUSIVE BARGAINING REPRESENTATION AND WORKERS’ PARTICIPATION
IN POLICY AND DECISION-MAKING
The labor organization designated or selected by the majority of the employees in an
appropriate collective bargaining unit shall be the exclusive representative of the employees in
such unit for the purpose of collective bargaining. However, an individual employee or group of
employees shall have the right at any time to present grievances to their employer.
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. (Emphasis and underscoring supplied)
As the immediately quoted provision declares, only the labor organization designated or
selected by the majority of the employees in an appropriate collective bargaining unit is the
exclusive representative of the employees in such unit for the purpose of collective bargaining.
The union (hereafter referred to as respondent) is admittedly not the exclusive representative of
the majority of the employees of petitioner, hence, it could not demand from petitioner the right
to bargain collectively in their behalf.
Respondent insists, however, that it could validly bargain in behalf of "its members," relying on
Article 242 of the Labor Code. Respondent’s reliance on said article, a general provision on the
rights of legitimate labor organizations, is misplaced, for not every legitimate labor organization
possesses the rights mentioned therein. Article 242 (a) must be read in relation to above-quoted
Article 255.
On respondent’s contention that it was bargaining in behalf only of its members, the appellate
court, affirming the NLRC’s observation that the same would only "fragment the employees" of
petitioner, held that "what [respondent] will be achieving is to divide the employees, more
particularly, the rank-and-file employees of [petitioner] . . . the other workers who are not
members are at a serious disadvantage, because if the same shall be allowed, employees who
are non-union members will be economically impaired and will not be able to negotiate their
terms and conditions of work, thus defeating the very essence and reason of collective
bargaining, which is an effective safeguard against the evil schemes of employers in terms and
conditions of work." This Court finds the observation well-taken.
It bears noting that the goal of the DOLE is geered towards "a single employer wide unit which
is more to the broader and greater benefit of the employees working force." The philosophy is to
avoid fragmentation of the bargaining unit so as to strengthen the employees’ bargaining power
with the management. To veer away from such goal would be contrary, inimical and repugnant
to the objectives of a strong and dynamic unionism.
D.4 BLUE SKY BARGAINING
Standard Chartered v. Confesor, G.R. No. 114974, June 16, 2004, We, likewise, do not agree
that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or
unreasonable proposals. The Bank failed to show that the economic demands made by the
32
Union were exaggerated or unreasonable. The minutes of the meeting show that the Union
based its economic proposals on data of rank and file employees and the prevailing economic
benefits received by bank employees from other foreign banks doing business in the Philippines
and other branches of the Bank in the Asian region.
D.5 SURFACE BARGAINING
Standard Chartered v. Confesor, G.R. No. 114974, June 16, 2004, The Union alleges that the
Bank violated its duty to bargain; hence, committed ULP under Article 248(g) when it engaged
in surface bargaining. It alleged that the Bank just went through the motions of bargaining
without any intent of reaching an agreement, as evident in the Bank’s counter-proposals. It
explained that of the 34 economic provisions it made, the Bank only made 6 economic
counterproposals. Further, as borne by the minutes of the meetings, the Bank, after indicating
the economic provisions it had rejected, accepted, retained or were open for discussion, refused
to make a list of items it agreed to include in the economic package.
Surface bargaining is defined as "going through the motions of negotiating" without any legal
intent to reach an agreement. The resolution of surface bargaining allegations never presents
an easy issue. The determination of whether a party has engaged in unlawful surface
bargaining is usually a difficult one because it involves, at bottom, a question of the intent of the
party in question, and usually such intent can only be inferred from the totality of the challenged
party’s conduct both at and away from the bargaining table. It involves the question of whether
an employer’s conduct demonstrates an unwillingness to bargain in good faith or is merely hard
bargaining.
The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank had
any intention of violating its duty to bargain with the Union. Records show that after the Union
sent its proposal to the Bank on February 17, 1993, the latter replied with a list of its counter-
proposals on February 24, 1993. Thereafter, meetings were set for the settlement of their
differences. The minutes of the meetings show that both the Bank and the Union exchanged
economic and non-economic proposals and counter-proposals.
The Union has not been able to show that the Bank had done acts, both at and away from the
bargaining table, which tend to show that it did not want to reach an agreement with the Union
or to settle the differences between it and the Union. Admittedly, the parties were not able to
agree and reached a deadlock. However, it is herein emphasized that the duty to bargain "does
not compel either party to agree to a proposal or require the making of a concession." Hence,
the parties’ failure to agree did not amount to ULP under Article 248(g) for violation of the duty
to bargain.
We can hardly dispute this finding, for it finds support in the evidence. The inference that
respondents did not refuse to bargain collectively with the complaining union because they
accepted some of the demands while they refused the others even leaving open other demands
for future discussion is correct, especially so when those demands were discussed at a meeting
called by respondents themselves precisely in view of the letter sent by the union on April 29,
1960…
In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank made
bad-faith provisions has no leg to stand on. The records show that the Bank’s counterproposals
on the non-economic provisions or political provisions did not put "up for grabs" the entire work
of the Union and its predecessors. As can be gleaned from the Bank’s counterproposal, there
33
were many provisions which it proposed to be retained. The revisions on the other provisions
were made after the parties had come to an agreement. Far from buttressing the Union’s claim
that the Bank made bad-faith proposals on the non-economic provisions, all these, on the
contrary, disprove such allegations.
E. UNFAIR LABOR PRACTICE
E.1 NATURE OF ULP
Galaxy Steel Workers v. NLRC, G.R. No. 165757, October 17, 2006, 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, 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.
Tunay na Pagkakaisa v. Asia Brewery, G.R. No. 162025, August 3, 2010, Not being
confidential employees, the secretaries/clerks and checkers are not disqualified from
membership in the Union of respondent’s rank-and-file employees. Petitioner argues that
respondent’s act of unilaterally stopping the deduction of union dues from these employees
constitutes unfair labor practice as it "restrained" the workers’ exercise of their right to self-
organization, as provided in Article 248 (a) of the Labor Code.
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. For a
charge of unfair labor practice to prosper, it must be shown that ABI 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" from ABI’s act in discontinuing the union dues deduction from those
employees it believed were excluded by the CBA. Considering that the herein dispute arose
from a simple disagreement in the interpretation of the CBA provision on excluded employees
from the bargaining unit, respondent cannot be said to have committed unfair labor practice that
restrained its employees in the exercise of their right to self-organization, nor have thereby
demonstrated an anti-union stance.
Arts. 247-249, 261, 263 (c), Labor Code
Art. 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
34
respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-
management relations.
Consequently, unfair labor practices are not only violations of the civil rights of both labor and
management but are also criminal offenses against the State which shall be subject to
prosecution and punishment as herein provided.
Subject to the exercise by the President or by the Secretary of Labor and Employment of the
powers vested in them by Articles 263 and 264 of this Code, the civil aspects of all cases
involving unfair labor practices, which may include claims for actual, moral, exemplary and other
forms of damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction of
the Labor Arbiters. The Labor Arbiters shall give utmost priority to the hearing and resolution of
all cases involving unfair labor practices. They shall resolve such cases within thirty (30)
calendar days from the time they are submitted for decision.
Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil
Code.
No criminal prosecution under this Title may be instituted without a final judgment finding that an
unfair labor practice was committed, having been first obtained in the preceding paragraph.
During the pendency of such administrative proceeding, the running of the period of prescription
of the criminal offense herein penalized shall be considered interrupted: Provided, however, that
the final judgment in the administrative proceedings shall not be binding in the criminal case nor
be considered as evidence of guilt but merely as proof of compliance of the requirements
therein set forth.
Art. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any
of the following unfair labor practice:
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 rights 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 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 bargaining agreement: Provided,
that the individual authorization required under Article 242, paragraph (o) of this Code shall not
apply to the non-members of the recognized collective bargaining agent;
35
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 in, authorized or
ratified unfair labor practices shall be held criminally liable.
Art. 249. Unfair labor practices of labor organizations. It shall be unfair labor practice for a labor
organization, its officers, agents or representatives:
a) To restrain or coerce employees in the exercise of their right to self-organization. However, a
labor organization shall have the right to prescribe its own rules with respect to the acquisition or
retention of membership;
b) To cause or attempt to cause an employer to discriminate against an employee, including
discrimination against an employee with respect to whom membership in such organization has
been denied or to terminate an employee on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to other
members;
c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the
representative of the employees;
d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any
money or other things of value, in the nature of an exaction, for services which are not
performed or not to be performed, including the demand for fee for union negotiations;
e) To ask for or accept negotiation or attorney’s fees from employers as part of the settlement of
any issue in collective bargaining or any other dispute; or
f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers, members of
governing boards, representatives or agents or members of labor associations or organizations
who have actually participated in, authorized or ratified unfair labor practices shall be held
criminally liable.
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. 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 those arising from the interpretation or enforcement of
company personnel policies referred to in the immediately preceding article. Accordingly,
violations of a Collective Bargaining Agreement, except those which are gross in character,
shall no longer be treated as unfair labor practice and shall be resolved as grievances under the
Collective Bargaining Agreement. For purposes of this article, gross violations of Collective
Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement.
36
The Commission, its Regional Offices and the Regional 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 Voluntary Arbitration
provided in the Collective Bargaining Agreement.
Art. 263 (c)

In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a
notice of strike or the employer may file a notice of lockout with the Ministry at least 30 day
before the intended date thereof. In cases of unfair labor practice, the period of notice shall be
15 days and in the absence of a duly certified or recognized bargaining agent, the notice of
strike may be filed by any legitimate labor organization in behalf of its members. However, in
case of dismissal from employment of union officers duly elected in accordance with the union
constitution and by-laws, which may constitute union busting, where the existence of the union
is threatened, the 15-day cooling-off period shall not apply and the union may take action
immediately.
PARTIES WHO/WHICH MAY COMMIT ULP.

A ULP may be committed by an employer or by a labor organization. Article 259 [248] describes
the ULPs that may be committed by an employer; while Article 260 [249] enumerates those
which may be committed by a labor organization.
On the part of the employer, only the officers and agents of corporations, associations or
partnerships who have actually participated in or authorized or ratified ULPs are criminally
liable.6
E.2 ULP BY EMPLOYERS
T & H Shopfitters v. Workers Union, G.R. No. 191714, February 26, 2014, Simply put, the
issue for the Court’s resolution is whether ULP acts were committed by petitioners against
respondents in the case at bench.
In support of their position, petitioners stress that T&H Shopfitters and Gin Queen are
corporations separate and distinct from each other. Consequently, T&H Shopfitters and Stinnes
Huang, an officer of T&H Shopfitters, cannot be held liable for ULP for the reason that there is
no employer-employee relationship between the former and respondents. Further, Gin Queen
avers that its decision to implement an enforced rotation of work assignments for respondents
was a management prerogative permitted by law, justified by the decrease in the orders it
received from its customers. It explains that its failure to present concrete proof of its decreasing
orders was due to the impossibility of proving a negative assertion. It also asserts that the
6
Chan Labor Law Pre-Week Reviewer
37
transfer from Castillejos to Cabangan was made in good faith and solely because of the
expiration of its lease contract in Castillejos.
The Court’s Ruling
As to the issue of ULP, petitioners’ argument is utterly without merit.
In the case at bench, petitioners are being accused of violations of paragraphs (a), (c), and (e)
of Article 257 (formerly Article 248) of the Labor Code, to wit:
Article 257. 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;
xxxx
(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;
xxxx
(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.
The concept of ULP is embodied in Article 256 (formerly Article 247) of the Labor Code, which
provides:
Article 256. 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
xxxx
In essence, ULP relates to the commission of acts that transgress the workers’ right to organize.
As specified in Articles 248 [now Article 257] and 249 [now Article 258] of the Labor Code, the
prohibited acts must necessarily relate to the workers' right to self-organization x x x.
In the case of Insular Life Assurance Co., Ltd. Employees Association – NATU v. Insular Life
Assurance Co. Ltd., this Court had occasion to lay down the test of whether an employer has
interfered with and coerced employees in the exercise of their right to self-organization, that is,
whether the employer has engaged in conduct which, it may reasonably be said, tends to
interfere with the free exercise of employees’ rights; and that it is not necessary that there be
direct evidence that any employee was in fact intimidated or coerced by statements of threats of
the employer if there is a reasonable inference that anti-union conduct of the employer does
have an adverse effect on self-organization and collective bargaining.
The questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its
employees, to the exclusion of union members, before the scheduled certification election; 2)
the active campaign by the sales officer of petitioners against the union prevailing as a
bargaining agent during the field trip; 3) escorting its employees after the field trip to the polling
center; 4) the continuous hiring of subcontractors performing respondents’ functions; 5)
assigning union members to the Cabangan site to work as grass cutters; and 6) the
enforcement of work on a rotational basis for union members, all reek of interference on the part
of petitioners.
38
Indubitably, the various acts of petitioners, taken together, reasonably support an inference that,
indeed, such were all orchestrated to restrict respondents’ free exercise of their right to self-
organization. The Court is of the considered view that petitioners’ undisputed actions prior and
immediately before the scheduled certification election, while seemingly innocuous, unduly
meddled in the affairs of its employees in selecting their exclusive bargaining representative. In
Holy Child Catholic School v. Hon. Patricia Sto. Tomas, the Court ruled that a certification
election was the sole concern of the workers, save when the employer itself had to file the
petition x x x, but even after such filing, its role in the certification process ceased and became
merely a bystander. Thus, petitioners had no business persuading and/or assisting its
employees in their legally protected independent process of selecting their exclusive bargaining
representative. The fact and peculiar timing of the field trip sponsored by petitioners for its
employees not affiliated with THS-GQ Union, although a positive enticement, was undoubtedly
extraneous influence designed to impede respondents in their quest to be certified. This cannot
be countenanced.
Not content with achieving a "no union" vote in the certification election, petitioners launched a
vindictive campaign against union members by assigning work on a rotational basis while
subcontractors performed the latter’s functions regularly. Worse, some of the respondents were
made to work as grass cutters in an effort to dissuade them from further collective
action.1Again, this cannot be countenanced.
More importantly, petitioners' bare denial of some of the complained acts and unacceptable
explanations, a mere afte1ihought at best, cannot prevail over respondents' detailed narration of
the events that transpired. At this juncture, it bears to emphasize that in labor cases, the
quantum of proof necessary is substantial evidence, or that amount of relevant evidence as a
reasonable mind might accept as adequate to suppoti a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise.
San Miguel v. Employees Union, G.R. No. 168569, October 5, 2007, perusal of the complaint
shows that, indeed, the particular acts of ULP alleged to have been committed by SMFI were
not specified; neither were the ultimate facts in support thereof. In its Position Paper, however,
the Union detailed the particular acts of ULP attributed to SMFI and the ultimate facts in support
thereof.
xxx
As stated above, the Union, in its Position Paper, mentioned the particular acts of ULP and the
ultimate facts in support thereof. Thus it alleged:
This is a complaint for unfair labor practices pursuant to Article 248 (e) and (i) of the Labor
Code, as amended, which reads:
Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit
any of the following unfair labor practices:
xxxx
(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.
i) to violate a collective bargaining agreement.
and which was committed by herein respondents as follows:
39
1. large scale and wanton unjust discrimination in matters of promotion, particularly upon the
following members of complainant: Ellen Ventura, Julie Geronimo, Ronnie Cruz, Rita Calasin,
Romy de Peralta, Malou Alano, And E. M. Moraleda, all assigned with the Finance Department
or respondent SMFI.
2. gross and blatant violations by respondent SMFI of Section 5, Article III (Job Security) and
Section 4, Article VIII (Grievance Machinery) of the current collective bargaining agreement
(CBA) between complainant and respondent SMFI, which provisions of said CBA are hereunder
quoted for easy reference. (Emphasis and underscoring supplied)
On the questioned promotions, the Union did not allege that they were done to encourage or
discourage membership in a labor organization. In fact, those promoted were members of the
complaining Union. The promotions do not thus amount to ULP under Article 248(e) of the
Labor Code.
As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is
qualified by Article 261 of the Labor Code, the pertinent portion of which latter Article reads:
x x x violations of a Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this article, gross
violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to
comply with the economic provisions of such agreement. (Emphasis and underscoring supplied)
Silva v. NLRC instructs that for a
ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate
jurisdiction, the allegations in the complaint should show prima facie the concurrence of two
things, namely: (1) gross violation of the CBA; AND (2) the violation pertains to the economic
provisions of the CBA. (Emphasis and underscoring supplied)
As reflected in the above-quoted allegations of the Union in its Position Paper, the Union
charges SMFI to have violated the grievance machinery provision in the CBA. The grievance
machinery provision in the CBA is not an economic provision, however, hence, the second
requirement for a Labor Arbiter to exercise jurisdiction of a ULP is not present.
The Union likewise charges SMFI, however, to have violated the Job Security provision in the
CBA, specifically the seniority rule, in that SMFI "appointed less senior employees to positions
at its Finance Department, consequently intentionally by-passing more senior employees who
are deserving of said appointment."
Article 4 of the Labor Code provides that "All doubts in the implementation and interpretation of
the provisions of this Code, including implementing rules and regulations, shall be resolved in
favor of labor." Since the seniority rule in the promotion of employees has a bearing on salary
and benefits, it may, following a liberal construction of Article 261 of the Labor Code, be
considered an "economic provision" of the CBA.
As above-stated, the Union charges SMFI to have promoted less senior employees, thus
bypassing others who were more senior and equally or more qualified. It may not be seriously
disputed that this charge is a gross or flagrant violation of the seniority rule under the CBA, a
ULP over which the Labor Arbiter has jurisdiction.
SMFI, at all events, questions why the Court of Appeals came out with a finding that it (SMFI)
disregarded the seniority rule under the CBA when its petition before said court merely raised a
question of jurisdiction. The Court of Appeals having affirmed the NLRC decision finding that the
Labor Arbiter has jurisdiction over the Union’s complaint and thus remanding it to the Labor
40
Arbiter for continuation of proceedings thereon, the appellate court’s said finding may be taken
to have been made only for the purpose of determining jurisdiction.
De La Salle v. De La Salle Employees Assoc., G.R. No. 169254, August 23, 2012, Inevitably,
G.R. No. 168477 and this petition seek only one relief, that is, to absolve petitioner from
respondent’s charge of committing an unfair labor practice, or specifically, a violation of Article
248(g) in relation to Article 252 of the Labor Code. In other words, our previous affirmance of
the Court of Appeals finding that petitioner erred in suspending collective bargaining
negotiations with the union and in placing the union funds in escrow considering that the intra-
union dispute between the Aliazas and Baz factions was not a justification therefor is binding
herein.
41
Bankard v. NLRC, G.R. No. 171664, March 6, 2013, This case involves determination of
whether or not Bankard committed acts considered as ULP. The underlying concept of ULP is
found in Article 247 of the Labor Code, to wit:
Article 247. Concept of unfair labor practice and procedure for prosecution thereof. -- Unfair
management relations. x x x
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. Thus, 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.
In this case, the Union claims that Bankard, in implementing its MRP which eventually reduced
the number of employees, clearly violated 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:
xxxx
interfere with, restrain or coerce employees in the exercise of their rights to self-organization;
xxxx
Because of said reduction, Bankard subsequently contracted out the jobs held by former
employees to other contractual employees. The Union specifically alleges that there were other
departments in Bankard, Inc. which utilized messengers to perform work load considered for
regular employees like the Marketing Department, Voice Authorizational Department, Computer
Services Department, and Records Retention Department. As a result, the number of union
members was reduced, and the number of contractual employees, who were never eligible for
union membership for lack of qualification, increased.
The general principle is that the one who makes an allegation has the burden of proving
it.1avvphi1 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
42
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.
REN Transport Corp. vs. NLRC, et. al. GR No. 188020 & 188252, 27 June 2016, Violation of
the duty to bargain collectively is an unfair labor practice under Article 258(g) of the Labor Code.
It is during the freedom period, or the last 60 days before the expiration of the CBA, when
another union may challenge the majority status of the bargaining agent through the filing of a
Petition for Certification Election. If there is no such petition filed during the freedom period, then
the employer “shall continue to recognize the majority status of the incumbent bargaining agent
where no Petition for Certification Election is filed.
CEPALCO V. CEPALCO Union, GR No. 211015, June 10,2016, Whether or not CEPALCO’s
contracting out of activities or services being performed by union members constitute unfair
labor practice. Under Article 106 of the Labor Code, as amended, labor-only contracting is an
arrangement where the contractor, who does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others, supplies workers to an
employer and the workers recruited are performing activities which are directly related to the
principal business of such employer.
Labor-only contracting is considered as a form of ULP when the same is devised by the
employer to "interfere with, restrain or coerce employees in the exercise of their rights to self-
organization." Article 259 of the Labor Code, as amended, which enumerates certain prohibited
activities constitutive of ULP, provides:
Article 259. Unfair Labor Practices of Employers. - It shall be unlawful for an employer to commit
any of the following unfair labor practice:
interfere with, restrain or coerce employees in the exercise of their rights to self-organization.
The need to determine whether or not the contracting out of services (or any particular activity
or scheme devised by the employer for that matter) was intended to defeat the workers' right to
self-organization is impelled by the underlying concept of ULP. This is stated in Article 258 of
the Labor Code, as amended, to wit:
Article 258. Concept of Unfair Labor Practice and Procedure for Prosecution Thereof. - Unfair
The Court agrees with the CA that CEPALCO was engaged in labor-only contracting as its
Contract for Meter-Reading Work dated February 19, 2007 and Contract of Service To Perform
Warehousing Works dated January 5, 2010 (subject contracts) with CESCO fit the criteria
provided for in Section 5 of DO 18-02.
43
The foregoing findings notwithstanding, the Court, similar to the CA and the labor tribunals, finds
that CEPALCO's contracting arrangements with CESCO did not amount to ULP. This is
because respondent was not able to present any evidence to show that such arrangements
violated CEPALCO's workers' right to self-organization, which, as above-mentioned, constitutes
the core of ULP. Records do not show that this finding was further appealed by respondent.
Thus, the complaints filed by respondent should be dismissed with finality.
E.3 ULP BY LABOR ORGANIZATIONS

Baptista v. Villanueva, G.R. No. 194709, July 31, 2013, Petitioners submit that the
respondents committed ULP under Article 289 (a) and (b) of the Labor Code. They insist that
they were denied substantive and procedural due process of law when they were expelled from
the RPNEU.
The petition is bereft of merit.
The primary concept of ULP is embodied in Article 247 of the Labor Code, which provides:
Article 247. Concept of unfair labor practice and procedure for prosecution thereof.––Unfair
In essence, ULP relates to the commission of acts that transgress the workers’ right to organize.
As specified in Articles 248 and 249 of the Labor Code, the prohibited acts must necessarily
relate to the workers' right to self-organization and to the observance of a CBA. Absent the said
vital elements, the acts complained, although seemingly unjust, would not constitute ULP.
In the case at bench, petitioners claim that the respondents, as union officers, are guilty of ULP
for violating paragraphs (a) and (b) of Article 249 of the Labor Code, to wit:
ART. 249. UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS.- It shall be unfair labor
practice for a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their rights to self-organization. However,
a labor organization shall have the right to prescribe its own rules with respect to the acquisition
or retention of membership:
(b) To cause or attempt to cause an employer to discriminate against an employee, including
discrimination against an employee with respect to whom membership in such organization has
been denied or to terminate an employee on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to other
members;
Petitioners posit that the procedure that should have been followed by the respondents in
resolving the charges against them was Article XVII, Settlement of Internal Disputes of their
Constitution and By-Laws, specifically, Section 2 thereof, requiring members to put their
grievance in writing to be submitted to their union president, who shall strive to have the parties
settle their differences amicably. Petitioners maintain that any form of grievance would be
referred only to the committee upon failure of the parties to settle amicably.
44
The Court is not persuaded.
Based on RPNEU’s Constitution and By-Laws, the charges against petitioners were not mere
internal squabbles, but violations that demand proper investigation because, if proven, would
constitute grounds for their expulsion from the union. As such, Article X, Investigation
Procedures and Appeal Process of RPNEU’s Constitution and By-Laws, which reads –
SECTION 1. Charge against any member or officer of the Union shall be submitted to the Board
of Directors (BOD) in writing, which shall refer the same, if necessary, to the committee on
Grievance and Investigation. The Committee shall hear any charge and subsequently, forward
its finding and recommendation to the BOD. The BOD has the power to approve or nullify the
recommendation of the Committee on Grievance and Investigation based on the merit of the
appeal.
was correctly applied under the circumstances.
Besides, any supposed procedural flaw in the proceedings before the Committee was deemed
cured when petitioners were given the opportunity to be heard. Due process, as a constitutional
precept, is satisfied when a person was notified of the charge against him and was given an
opportunity to explain or defend himself. In administrative proceedings, the filing of charges and
giving reasonable opportunity for the person so charged to answer the accusations against him
constitute the minimum requirements of due process. The essence of due process is simply to
be heard, or as applied to administrative proceedings, an opportunity to explain one’s side, or
an opportunity to seek a reconsideration of the action or ruling complained of. It cannot be
denied that petitioners were properly notified of the charges filed against them and were equally
afforded the opportunity to present their side.
Next, petitioners point out that they were not given the opportunity to personally face and
confront their accusers, which were violative of their right to examine the complainants and the
supposed charges against them.
Petitioners’ contention is without merit. Mere absence of a one-onone confrontation between the
petitioners and their complainants does not automatically affect the validity of the proceedings
before the Committee. Not all cases necessitate a trial-type hearing. As in this case, what is
indispensable is that a party be given the right to explain one’s side, which was adequately
afforded to the petitioners.
It is well-settled that workers’ and employers’ organizations shall have the right to draw up their
constitutions and rules to elect their representatives in full freedom, to organize their
administration and activities and to formulate their programs. In this case, RPNEU’s Constitution
and By-Laws expressly mandate that before a party is allowed to seek the intervention of the
court, it is a pre-condition that he should have availed of all the internal remedies within the
organization. Petitioners were found to have violated the provisions of the union’s Constitution
and By-Laws when they filed petitions for impeachment against their union officers and for audit
before the DOLE without first exhausting all internal remedies available within their organization.
This act is a ground for expulsion from union membership. Thus, petitioners’ expulsion from the
union was not a deliberate attempt to curtail or restrict their right to organize, but was triggered
by the commission of an act, expressly sanctioned by Section 2.5 of Article IX of the union’s
Constitution and By-Laws.1âw
phi1
For a charge of ULP against a labor organization to prosper, the onus probandi rests upon the
party alleging it to prove or substantiate such claims by the requisite quantum of evidence. In
labor cases, as in other administrative proceedings, substantial evidence or such relevant
45
evidence as a reasonable mind might accept as sufficient to support a conclusion is required.
Moreover, it is indubitable that all the prohibited acts constituting unfair labor practice should
materially relate to the workers' right to self-organization.
Unfortunately, petitioners failed to discharge the burden required to prove the charge of ULP
against the respondents. Aside from their self-serving allegations, petitioners were not able to
establish how they were restrained or coerced by their union in a way that curtailed their right to
self-organization. The records likewise failed to sufficiently show that the respondents unduly
persuaded management into discriminating against petitioners. other than to bring to its
attention their expulsion from the union, which in turn, resulted in the implementation of their
CBA' s union security clause. As earlier stated, petitioners had the burden of adducing
substantial evidence to support its allegations of ULP, which burden they failed to discharge. In
fact, both the NLRC and the CA found that petitioners were unable to prove their charge of ULP
against the respondents.
46
47

Collective Bargaining

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Collective Bargaining

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B.

Right to collective bargaining

2. RIGHT TO COLLECTIVE BARGAINING

1. WHEN AN ACT CONSTITUTES ULP.

A. DUTY TO BARGAIN COLLECTIVELY

A.2 DUTY TO BARGAIN COLLECTIVELY WHEN THERE IS A CBA

What are the essential requisites of CBA?

B.1 MANDATORY PROVISIONS OF THE CBA

Book V, Rule I, Sec. 1 (u), Implementing Rules (Labor Code)

Arts. 260-261, Labor Code

3. NO STRIKE-NO LOCKOUT CLAUSE

ART. 264. PROHIBITED ACTIVITIES

4. LABOR MANAGEMENT COUNCIL

Art. 255, Labor Code

Art. 277 (h), Labor Code

Art. 253-A, Labor Code

Book V, Rule XVII, Secs. 7-8, Implementing Rules (Labor Code)

- Representation status is for 5 years.

Book V, Rule V, Sec. 6, Implementing Rules (Labor Code)

The Court finds Itself unable to agree.

Arts. 241 (o) Labor Code

Art. 248 (e), Labor Code

D. UNFAIR LABOR PRACTICE IN COLLECTIVE BARGAINING

When an act constitutes ULP?

What are the labor code provisions of ULP?

What are the elements of ULP?

D.1 BARGAINING IN BAD FAITH

D.2 REFUSAL TO BARGAIN

D.3 INDIVIDUAL BARGAINING

D.4 BLUE SKY BARGAINING

D.5 SURFACE BARGAINING

E. UNFAIR LABOR PRACTICE

E.1 NATURE OF ULP

Arts. 247-249, 261, 263 (c), Labor Code

Art. 263 (c)

PARTIES WHO/WHICH MAY COMMIT ULP.

E.2 ULP BY EMPLOYERS

E.3 ULP BY LABOR ORGANIZATIONS

Art. 249, Labor Code

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