RIGHT TO COLLECTIVE BARGAINING/DUTY TO BARGAING COLLECTIVELY

Means the performance of 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.

There are two situations contemplated in the duty to bargain collectively:

1. In the absence of a CBA – Article 262 of the Labor Code

2. When there is an existing CBA – Article 264 of the Labor Code

HOW DUTY SHOULD BE DISCHARGED WHEN THERE IS NO CBA YET/IN THE

ABSENCE OF A CBA

In the absence of an agreement or the other voluntary arrangement providing for a more
expeditious manner of collective bargaining, it shall be the duty of the employer and the
representative of the employers to bargain collectively in accordance with the
provisions of the Labor Code (Article 261 of the LC/procedure in collective bargaining).

WHEN THERE IS AN EXISTING CBA

When there is a CBA, it shall mean that neither party shall terminate nor modify such
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/freedom period and/or until a new agreement is reached.

FREEDOM PERIOD

The last sixty days of the 5-year lifetime of the CBA immediately prior to its expiration
period is the freedom period.

It is named as such because it is the only time when the law allows the parties to freely
serve notice to terminate, alter or modify the existing CBA. It is also the time when the
majority status of the bargaining agent may be challenged by another union by filing
the appropriate petition for certification election.

AUTOMATIC RENEWAL CLAUSE

Pending the renewal of the CBA, the parties are bound to keep the status quo ante and to
treat the terms and conditions embodied therein still in full force and effect during the 60-
day freedom period and/or until a new agreement is negotiated and ultimately concluded
and reached by the parties. This principle is known as the automatic renewal clause which
is mandated by law and is deemed incorporated in all CBAs.

During this time, the employer cannot discontinue the grant of benefits embodied in the
CBA because precisely it is duty bound to keep the status quo ante thereof by continuing to
give the same benefits until renewal is reached by the parties.

For the union, it has to continue with its undertakings and commitments in the CBA until a
renewal is reached.

In the case of Kiok Loy v. NLRC, G.R. No. L-54334, Jan. 22, 1986, the petitioner the
Sweden Ice Cream Plan refused to submit any counter-proposal to the CBA proposed by its
employees’ certified bargaining agent. The High Court ruled that the employer had thereby
lost its right to bargain the terms and conditions of the CBA. Thus, the CBA proposed by the
union was imposed lock, stock and barrel on the company.

The Kiok Loy doctrine epitomizes the classic case of negotiating the CBA in bad faith
consisting of employer’s refusal to bargain with the collective bargaining agent by ignoring
all notices for negotiations and requests for counter-proposals. Such refusal to send a
counter-proposal to the union and to bargain on the economic terms of the CBA constitutes
an unfair labor practice under Article 248 (g) of the Labor Code.

COLLECTIVE BARGAINING AGREEMENT

It 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.

REQUISITES OF COLLECTIVE BARGAINING

Before any negotiations between the bargaining union and the employment may ensue the
following requisites must concur:

a. Employer-employee relationship must exist between the employer and the

bargaining union and the members of the bargaining unit being represented by
the bargaining agent;
b. The bargaining agent must have the support of the members of the bargaining
unit established through the modes sanctioned by law;
c. A lawful demand to bargain is made in accordance with law.

IMPORTANT PRINCIPLES ON CBA

1. CBA is the law between the parties during its lifetime and thus must be complied
with in good faith. Any violation thereof can be the subject of redress in court. Those
who are entitled to the benefits under the CBA can invoke its provisions.
2. Non-impairment of obligations of contract. A contract is the law between the
parties and courts have no choice but to enforce such contract so long as it is not
contrary to law, morals, good customs or public policy. Otherwise, courts would be
interfering with the freedom of the parties to contract. (Norton Resources and
Development Corporation v. All Asia Bank Corporation, G.R. No. 162523, Nov. 25,
2009)
3. CBA is not an ordinary contract as it is invested with public interest. (Cirtek
Employees Labor Union FFW v. Cirtek Electronics, Inc. G.R. No. 190515, Nov. 15,
2010)
4. Automatic Incorporation Clause – law is presumed part of the CBA. (Lakas nf
Manggagawang Makabayan v. Abiera, G.R. No. L-29474, Dec. 19, 1970; Davao
Integrated Port Stevedoring Services v. Abarquez, 220 SCRA 197, 204)
5. The benefits derived from the CBA and the law are separate and distinct from
each other. (Meycauayan Colleges v. Drilon, G.R. No. 81144, May 7, 1990)
6. Workers are allowed to negotiate wage increases separately and distinctly
from legislated wage increases. The parties may validly agree in the CBA to
reduce wages and benefits of employees provided such reduction does not go
below the minimum standards. (Octavio v. PLDT, G.R. No. 175492, Feb. 27,
2013)
7. Employees entitled to CBA benefits: (New Pacific Timber & Supply Co. Inc. v.
NLRC, G.R. No. 124224, March 17, 2000)
a. Members of the bargaining union
b. Non-members of the bargaining union but are members of the bargaining unit
c. Members of the minority union who paid agency fees to bargaining union
d. Employees hired after the expiration of the CBA
8. Pendency of a petition for cancellation of union registration is not a prejudicial
question before CBA negotiation may proceed. (Capitol Medical Center, Inc. v.
Trajano, G.R. No. 155690, June 30, 2005)
9. CBA should be construed liberally.

MANDATORY PROVISIONS OF CBA

If these provisions are not reflected in the CBA, its registration will be denied by the
BLR, viz:
1. Grievance Procedure
2. Voluntary Arbitration
3. No Strike-No Lockout Clause
4. Labor Management Council
GRIEVANCE OR GRIEVABLE ISSUE

Any question raised either by either the employer or the union regarding any of the
following issues:

1. Interpretation or implementation of the CBA

2. Interpretation or implementation of company policies
3. Any claim by either party that the other is violating any provisions of the CBA or
company personnel policies

Violations of the CBA in order to be grievable must be ordinary in character and not gross,
otherwise it will be considered unfair labor practice(ULP).

There is gross violation of the CBA when it is flagrant and/or malicious refusal by a
party thereto to comply with the economic provisions thereof.

Violation pertaining to non-economic or political provision of the CBA shall not be

considered as ULP and hence may be processed as a grievable in accordance with the and
following the grievance machinery laid down in the CBA.

GRIEVANCE MACHINERY v GRIEVANCE PROCEDURE

Grievance machinery is the mechanism for adjustment and resolution of grievances arising
from the interpretation or implementation of the CBA and those arising from the
interpretation or enforcement of company personnel policies.

Grievance Procedure is the internal rules of procedure established by the parties in their
CBA with voluntary arbitration as the terminal step, which are intended to resolve all issues
arising from the implementation and interpretation of their collective agreement. It is that
part of the CBA which provides for a peaceful way of settling differences and
misunderstanding between the parties.

Grievance machinery and grievance procedure may be used interchangeably.

VOLUNTARY ARBITRATION

Voluntary arbitration is the mode of settling labor management disputes in which the parties
select a competent, trained and impartial third person who is tasked to decide on the merits
of the case and whose decision is final and executory

Voluntary arbitrator refers to any person who has been mutually named or designated by
the parties to the CBA (employer and bargaining agent) to hear and decide the cases
between them; he is not an employee, functionary or part of the government or of the
Department of Labor and Employment, but he is authorized to render arbitration services
provided under labor laws.

“NO STRIKE, NO LOCKOUT” CLAUSE

“No strike, no lockout clause in the CBA is an expression of the commitment of the parties
that, on the part of the union it will no mount a strike during the effectivity of the CBA, and
on the part of the employer, that it will not stage a lockout during the lifetime thereof.

This may be invoked by an employer ONLY when the strike is economic in nature or one
which is conducted to force wage or concessions from the employer that are not mandated
to be granted by the law. It does not bar strikes grounded on ULP.The same rule applies in
case of lockout.

LABOR-MANAGEMENT COUNCIL

The Labor-Management Council (LMC) under the Labor Code, is meant to implement the
constitutionally mandated right of workers 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. This is the body that implements the policy
of co-determination in the Constitution.
The LMC is mandated to be created in both organized and unorganized establishments.

SELECTION OF REPRESENTATIVES TO LMC

a. In organized establishments, the workers’ representatives to the committee or
council should be nominated by the exclusive bargaining representative.
b. In establishments where no legitimate labor organization exists, the workers’
representative should be elected directly by the employees at large.

LABOR-MANAGEMENT COUNCIL (LMC) VS. GRIEVANCE MACHINERY (GM)

Constitutional origin – The creation of the LMC is based on the constitutional grant to
workers of the right to participate in policy and decision-making processes under the 1st
paragraph, Section 3, Article XIII of the 1987 Constitution, thus:
“It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right
to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in policy
and decision-making processes affecting their rights and benefits as may be
provided by law.”
The creation of a GM, on the other hand, is based on a different constitutional provision,
the 2nd paragraph, Section 3, Article XIII of the 1987 Constitution, which provides as
follows:
“The State shall promote the principle of shared responsibility between workers
and employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to foster
industrial peace.”

PURPOSE FOR CREATION

The LMC is created for the purpose of affording workers the right to participate in policy
and decision-making processes in matters affecting their rights, benefits and welfare;
while that of the GM is to resolve disputes and grievances arising from such policies or
decisions or more specifically, to adjust and resolve grievances arising from (1) the
interpretation or implementation of the CBA or (2) the interpretation or enforcement of
company personnel policies.

NATURE OF FUNCTIONS
The LMC is in the nature of a preventive mechanism meant to prevent and avoid disputes
or grievances by co-determining the proper policies that should be implemented by the
employer in respect of the workers’ rights, benefits and welfare; while a GM is an
adjudicatory mechanism which is set into motion only when a dispute or grievance occurs.

NATURE OF COGNIZABLE ISSUES

The LMC performs non-adversarial and non-adjudicatory tasks as it concerns itself only
with policy formulations and decisions affecting the workers’ rights, benefits and welfare
and not violations or transgressions of any policy, rule or regulation; while that of the GM
is adversarial and adjudicatory in character since its jurisdiction is confined to resolving
and deciding disputes and grievances between management and the workers arising from
violations or transgressions of existing policies, rules or regulations. In other words, the
LMC does not resolve grievable or contentious issues; the GM does.

COMPOSITION
The representatives of the workers to the LMC may or may not be nominated by the
recognized or certified bargaining agent, depending on whether the establishment is
organized or unorganized. Thus, in organized establishments, the workers’
representatives to the LMC should be nominated by the exclusive bargaining agent. In
establishments where no legitimate labor organization exists, the workers’ representatives
should be elected directly by the employees of the establishment at large; while those in
the GM are nominated solely by the bargaining agent.
DURATION OF CBA
The terms of a CBA are classified into two

1. Representation aspect – 5 years which is the lifetime of a CBA;

2. All other provisions – Subject to renegotiation after first 3 years of the 5-year
lifetime of CBA.
Representation aspect refers to the identity and majority status of the bargaining agent
that successfully negotiated the CBA as the exclusive bargaining representative of the
employees in the appropriate bargaining unit concerned.
The 5-year representation status of the incumbent exclusive bargaining agent should be
reckoned from the effectivity of the CBA. This means that no petition for certification
election questioning its majority status may be entertained during the lifetime of the CBA
except within the 60-day freedom period immediately preceding the expiry date of the 5-
year term.
Read on Rivera v. Espiritu , G.R. No. 135547, Jan. 23, 2002

RETROACTIVITY OF THE CBA

The application of the rules on retroactivity depends on any of the following two (2)
situations:
1. When the CBA is voluntarily concluded by the parties; or
2. When the CBA is concluded through arbitral award.
RULE WHEN VOLUNTARILY CONCLUDED BY THE PARTIES IN THE NEGOTIATING
TABLE
1. The effectivity of the CBA shall retroact to the day immediately after the date of
expiry of the old CBA in case the new CBA is concluded and entered into within six
(6) months from the said expiry date.
2. If the new CBA is entered into beyond six (6) months from the expiry date of the old
CBA, the parties are given the right to negotiate the duration of the retroactivity
thereof.
RULE ON RETROACTIVITY IN CASE OF CONCLUSION OF CBA THROUGH
ARBITRAL AWARD

1. No law on retroactivity in case of CBA arbitral awards.

2. The law is silent as to the retroactivity of a CBA secured through arbitral award or
that granted not by virtue of the mutual agreement of the parties but by intervention
of the government.

VARIATIONS IN THE APPLICATION OF THE RETROACTIVITY RULE

The rule laid down by the Supreme Court in cases involving this particular issue of
retroactivity varies from case to case. Basically, the rule, based on jurisprudence, may be
restated in the following manner:

(1) Prospectivity rule;

(2) Retroactivity rule which makes the CBA retroactively effective to:
(a) the date of the expiration of the previous CBA; and
(b) the first day after the six-month period following the expiration of the last day
of the CBA.

FREEDOM PERIOD
60-DAY FREEDOM PERIOD
When there is an existing CBA, the parties thereto are bound to observe the terms and
conditions therein set forth until its expiration. Neither party is allowed to terminate nor
modify such agreement during its lifetime. The only time the parties are
allowed to terminate or modify the agreement is within the so-called “freedom period” of at
least sixty (60) days prior to its expiration date by serving a notice to that effect.”
REASON IT IS CALLED “FREEDOM PERIOD”
The last 60 days of the 5-year lifetime of a CBA immediately prior to its expiration is called
the “freedom period” because:
(a) it is the only time when the law allows the parties to freely serve a notice to
terminate, alter or modify the existing CBA; and
(b) it is also the time when the majority status of the bargaining agent may be
challenged by another union by filing the appropriate petition for certification
election.
RULE ON FILING OF CERTIFICATION ELECTION VIS-À-VIS FREEDOM PERIOD
In a petition involving an organized establishment or enterprise where the majority status
of the incumbent collective bargaining union is questioned by a legitimate labor
organization, the Med-Arbiter shall immediately order the conduct of a certification election
if the petition is filed during the last sixty (60) days of the CBA. Any petition filed before or
after the 60- day freedom period shall be dismissed outright.
The 60-day freedom period based on the original collective bargaining agreement shall
not be affected by any amendment, extension or renewal of the CBA for purposes of
certification election.
AUTOMATIC RENEWAL CLAUSE
A petition for certification election challenging the majority status of the existing bargaining
agent should be filed within – and not before or after - said 60-day freedom period. Upon
the expiration of the said period and no petition for certification election is filed by a
challenging union, the employer is duty-bound to continue to recognize the majority status
of the incumbent bargaining agent. Negotiation for a new CBA may even validly
commence between the incumbent bargaining agent and the employer during the 60-day
freedom period if no challenge to the bargaining agent’s majority status is posed by
another union.

UNION SECURITY
NATURE AND PURPOSE OF UNION SECURITY CLAUSE.
The “union security clause” allows the parties thereto to enter into an agreement requiring
compulsory membership in the bargaining agent which successfully negotiated said CBA as
a condition for continued employment with the exception of employees who are already
members of another union at the time of the signing 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 the employees the obligation to acquire or retain union membership as a condition to
their continued employment. In other words, the purpose of a union security arrangement is
to guarantee the continued existence of the union through enforced membership for the
benefit of the workers.
Without this clause, the existence of the union is always subject to uncertainty as its
members may resign anytime resulting in the decimation of its ranks. The union becomes
gradually weakened and increasingly vulnerable to company machinations. In this security
clause lies the strength of the union during the enforcement of the CBA. It is this clause that
provides labor with substantial power in collective bargaining.
THE RIGHT NOT TO JOIN A UNION IS NOT ABSOLUTE SINCE IT MAY BE
RESTRICTED.
The right of an employee not to join a union is not absolute and must give way to the
collective good of all members of the bargaining unit. When certain employees are obliged
to join a particular union as a requisite for continued employment, as in the case of a union
security clause, this condition is a valid restriction on the freedom or right not to join any
labor organization because it is in favor of unionism.
UNION SECURITY CLAUSE DOES NOT VIOLATE CONSTITUTIONAL RIGHT TO
FREEDOM OF ASSOCIATION.
A union security clause in a CBA is not a violation or a restriction of the employee’s right to
freedom of association guaranteed by the Constitution. Labor, being the weaker in
economic power and resources than capital, deserves protection that is actually substantial
and material.
EMPLOYEES EXEMPTED FROM COVERAGE OF UNION SECURITY CLAUSE.
All employees in the bargaining unit covered by a Union Security Clause in their CBA with
the employer are subject to its terms. However, under law and established jurisprudence,
the following kinds of employees are exempted from its coverage, namely:
Employees who, at the time the union security agreement takes effect, are bona-fide
members of a religious organization which prohibits its members from joining labor unions
on religious grounds;
Employees who are already members of a union other than the bargaining agent at the
time the union security agreement took effect;
Confidential employees who are excluded from the rank-and-file or supervisory bargaining
unit;
Supervisory employees who are excluded from becoming members of the rank-and-file
union and vice-versa; and
Employees excluded from the union security clause by express terms of the agreement
UNION SECURITY CLAUSES
CLASSIFICATION OF UNION SECURITY
ARRANGEMENTS.
Generally, a union security clause may take the form of:
1. Closed-shop agreement;
2. Maintenance of membership agreement;
3. Union shop agreement;
4. Modified union shop agreement;
5. Exclusive bargaining agreement;
6. Bargaining for members only agreement;
7. Agency shop agreement; or
8. Preferential hiring agreement.
Modification of arrangements
The above classification admits of certain modified types which the parties may agree
upon in the CBA depending on the peculiar requirements of the situation.

CLOSED-SHOP AGREEMENT
A “closed-shop” may be defined as a scheme in which, by agreement between the
employer and its employees through their bargaining union/agent, no person may be
employed unless he or she is, becomes, and, for the duration of the agreement,
remains a member in good standing of the bargaining union. Basically, this kind of
agreement stipulates the undertaking by the employer not to hire or employ any person
who is not a member of the bargaining union. Once employed, it is required that the
said person should remain a member of the bargaining union in good standing as a
condition for continued employment, at least during the whole duration of the CBA.

MAINTENANCE OF MEMBERSHIP AGREEMENT

There is “maintenance of membership agreement” 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. Its role is to protect the union’s current membership. By its express terms, it
covers and renders continued union membership compulsory for: (1) those who were
already union members at the time the CBA was signed; and (2) the new employees
who will become regular during the life of the CBA.

UNION SHOP AGREEMENT

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. Its role is to
compel the membership of those who are not yet union members. Under this scheme,
the employer is given the freedom to hire and employ any person who is not a member
of the bargaining agent. Once such person becomes an employee, he is required to
become a member of the bargaining agent and to remain as such member in good
standing for the whole period of the effectivity of the CBA as a condition for his
continued employment.

MODIFIED UNION SHOP AGREEMENT

Employees under this arrangement who are not union members at the time of the
signing or execution of the CBA are not required to join the bargaining union. However,
any and all workers hired or employed after the signing or execution of the CBA are
required to join the bargaining union.

EXCLUSIVE BARGAINING AGENT AGREEMENT

The union which negotiated and concluded the CBA with management is considered
and recognized as the sole and exclusive bargaining agent of all the covered
employees in the bargaining unit, whether they be members or not of the said agent.

BARGAINING FOR MEMBERS ONLY AGREEMENT

Under this arrangement, the union which negotiated and concluded the CBA with
management is recognized as the bargaining agent only for its own members.
 AGENCY SHOP AGREEMENT
Under this scheme, there is no requirement for non-members of the bargaining agent to
become its members. However, it is required that such non-union members should pay
to the bargaining agent an agency fee as a condition for their continued employment.

PREFERENTIAL HIRING AGREEMENT

It is the principal feature of this arrangement that the employer gives preference in hiring
to the members of the bargaining agent under equal circumstances and qualifications.
Once hired or employed, they are required to maintain their membership in good
standing in the bargaining agent for the duration of the CBA as a condition for their
continued employment.

DISMISSAL DUE TO VIOLATION OF UNION SECURITY CLAUSE

a. Requisites for valid termination based on union security clause
The following are the requisites that the employer should comply prior to terminating the
employment of an employee by virtue of the enforcement of the union security clause:
(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.

The foregoing requisites constitute a just cause for terminating an employee based on the
CBA’s union security provision.

The due process afforded by the union prior to expulsion is different from the
due process required prior to termination of employment.

The distinction is not hard to comprehend. The due process afforded by the union is
meant solely and exclusively to address the issue of validity of the termination of the
membership of the employee in the union; while that required of the employer is aimed
at addressing the issue of validity of the employee’s termination of employment. Hence,
it is complete error on the part of the employer to adopt as its own due process what
has been earlier afforded by the union to the erring employee without conducting its
own independent and separate due process.

Thus, in declaring the illegality of the dismissal of petitioner in Cariño v. NLRC, the
Supreme Court noted in regard to the involvement of the company in his dismissal, that
the company, upon being formally advised in writing of the expulsion of petitioner
Cariño from the union, in turn simply issued a termination letter to Cariño, the
termination being made effective the very next day. The Company should have given
petitioner Cariño an opportunity to explain his side of the controversy with the union.
Notwithstanding the union security clause in the CBA, the company should have
reasonably satisfied itself by its own inquiry that the union had not been merely acting
arbitrarily and capriciously in impeaching and expelling petitioner Cariño. Had the
company taken the trouble to investigate the acts and proceedings of the union, it could
have very easily determined that the union had acted arbitrarily in impeaching and
expelling from its ranks petitioner Cariño.

PRINCIPLES ON TERMINATION DUE TO VIOLATION OF UNION SECURITY CLAUSE

 Employer is obligated to act upon being demanded by the union to terminate the
employment of its errant members.

 Members of the minority union cannot be compelled to join the bargaining union.
The union security clause therefore does not cover employees who are members of
the union/s other than the bargaining union. Not being so covered, they cannot be
dismissed for violation of said clause.

 The employer has the right to be reimbursed for payment of any claims arising out
of dismissals demanded by the union under the union security clause. Such right of
reimbursement may be invoked:
 (1) By express provision in the CBA to that effect; or
(2) By securing it through judicial directive.

CHECK-OFF, UNION DUES, AGENCY FEES

CHECK-OFF OF AGENCY FEE, DIFFERENT FROM CHECK-OFF OF UNION DUES
AND ASSESSMENTS.
Check-off of agency fee does not require the execution by the non-bargaining
union members of individual written authorizations; while such is an indispensable
requisite for check-off of union dues and special assessments from members of the
bargaining union.