CASE NO.

1
G.R. No. 84433. June 2, 1992
ALEXANDER REYES et. al., vs. CRESENCIANO B. TRAJANO, et.al.,

TOPIC: Who are entitled to vote in a certification election; Iglesia Ni Kristo Members are also allowed to vote
in a certification election; The right to self organize includes the right not to be part of any labor organization.

FACTS:

A certification election was authorized to be conducted among the employees of TriUnion Industries Corpora-
tion. The competing unions were the Tri-Union Employees Union-Organized Labor Association in Line Indus-
tries and Agriculture (TUEUOLALIA), and Trade Union of the Philippines and Allied Services (TUPAS). Of the
348 workers initially deemed to be qualified voters, only 240 actually took part in the election. Among the 240
employees who cast their votes were 141 members of the lNK (Iglesia Ni Kristo).

The ballots provided for three (3) choices. They provided for votes to be cast, of course, for either of the two
(2) contending labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and, conformably with established rule
and practice, for (c) a third choice: "NO UNION.” The final tally of the votes showed the following results;
TUPAS-1; TUEU-OLALIA-95; NO UNION-1; SPOILED-1; CHALLENGED-141.

The challenged votes were those cast by the 141 INK members. They were segregated and excluded from the
final count in virtue of an agreement between the competing unions, reached at the pre-election conference
that the INK members should not be allowed to vote "because they are not members of any union and refused
to participate in the previous certification elections.”

ISSUE: Whether or not INK members should not be allowed to vote in the certification election.

HELD: NO. They should be allowed to vote.

The comment that "if the workers who are members of the Iglesia ni Kristo in the exercise of their religious
belief opted not to join any labor organization as a consequence of which they themselves can not have a
bargaining representative, then the right to be represented by a bargaining agent should not be denied to
other members of the bargaining unit, “ does not hold water.

Guaranteed to all employees or workers is the "right to selforganization and to form, join, or assist labor
organizations of their own choosing for purposes of collective bargaining." This is made plain by no less than
three provisions of the Labor Code of the Philippines. Article 243 of the Code.

The right of self-organization includes the right to organize or affiliate with a labor union or determine which
of two or more unions in an establishment to join, and to engage in concerted activities with co-workers for
purposes of collective bargaining through representatives of their own choosing, or for their mutual aid and
protection, i.e., the protection, promotion, or enhancement of their rights and interests.

Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign
from a labor organization, is subsumed in the right to join, affiliate with, or assist any union, and
to maintain membership therein. The right to form or join a labor organization necessarily in-
cludes the right to refuse or refrain from exercising said right. It is self-evident that just as no
one should be denied the exercise of a right granted by law, so also, no one should be compelled
to exercise such a conferred right. The fact that a person has opted to acquire membership in a
labor union does not preclude his subsequently opting to renounce such membership.

The right to refuse to join or be represented by any labor organization is recognized not only by the law but
also in the rules drawn up for implementation thereof. The original Rules on Certification promulgated by the
defunct Court of Industrial Relations required that the ballots to be used at a certification election to determine
which of two or more competing labor unions would represent the employees in the appropriate bargaining
unit should contain, aside from the names of each union, an alternative choice of the employee voting, to the
effect that he desires not to be represented by any union. And where only one union was involved, the ballots
were required to state the question—"Do you desire to be represented by said union?"—as regards
which the employees voting would mark an appropriate square, one indicating the answer, "Yes,"
the other, "No."
To be sure, the present implementing rules no longer explicitly impose the requirement that the ballots at a
certification election include a choice for "NO UNION.”

That the INK employees, as employees in the same bargaining unit in the true sense of the term,
do have the right of selforganization, is also in truth beyond question, as well as the fact that
when they voted that the employees in their bargaining unit should be represented by "NO UN-
ION," they were simply exercising that right of self-organization, albeit in its negative aspect.

The respondents' argument that the petitioners are disqualified to vote because they "are not constituted into
a duly organized labor union"—"but members of the INK which prohibits its followers, on religious grounds,
from joining or forming any labor organization"—and "hence, not one of the unions which vied for certification
as sole and exclusive bargaining representative," is specious. Neither law, administrative rule nor jurisprudence
requires that only employees affiliated with any labor organization may take part in a certification election. On
the contrary, the plainly discernible intendment of the law is to grant the right to vote to all bona fide employ-
ees in the bargaining unit, whether they are members of a labor organization or not. ###

Case #02 New Pacific Timber vs. NLRC March 17, 2000

Topic: Period and Coverage of CBA

NEW PACIFIC TIMBER SUPPLY COMPANY, CO., INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMIS-
SION, MUSIB M. BUAT, LEON G. GONZAGA, JR., ET AL., NATIONAL FEDERATION OF LABOR, MARIANO
AKILIT and 350 OTHERS, respondents.

G.R. No. 124224. March 17, 2000

FACTS:
The National Federation of Labor was the sole and exclusive bargaining representative for the rank and file
employees of petitioner. NFL started to negotiate for better terms and conditions of employment; which
were met with resistance by Petitioner Company. The NFL filed a complaint for ULP on the ground of refusal
to bargain collectively. LA issued an order declaring the company guilty of ULP and ordering the CBA pro-
posals submitted by the NFL as the CBA between parties. Later, 186 of private respondents claiming they
were wrongfully excluded from the benefits under the CBA filed a petition for relief. Petitioner asserts that
private respondents are not parties to the agreement and may not claim benefits thereunder. As for the CBA,
petitioner maintains that the force and effect of the CBA’s terms are limited to only three years and cannot
extend to terms and conditions which ceased to have force and effect.

ISSUES:
1. Whether or not the terms of an existing CBA as to its economic provisions can be extended beyond the
period stipulated therein, even beyond the three-year period prescribed by law, in the absence of a new
agreement.
2. Whether or not the rank and file employees hired after the term of the CBA, considering their subsequent
membership in the bargaining unit, are parties to the agreement and may claim benefits thereunder

HELD:
1. Yes. It is clear from Art. 253 that until a new CBA has been executed by and between the parties; they are
duly bound to keep the status quo and to continue in full force and effect the terms and conditions of the
existing agreement. In the case at bar, no new agreement was entered between the parties pending appeal
of the decision in the NLRC. Consequently, the employees from to the year 1985 (after expiration of the CBA)
onwards would be deprived of a substantial amount of monetary benefits if the terms and conditions of the
CBA were not to remain in force and effect which runs counter to the intent of the Labor Cod to curb labor
unrest and promote industrial peace.

2. Yes. When a CBA is entered into by the union representing the employees and the employer, even the
non-union members are entitled to the benefits of the contract. A laborer can claim benefits from a CBA
entered into the company and the union of which he is a member at the time of the conclusion of the agree-
ment even after he has resigned from said union. Therefore, the benefits under the CBA should be extended
to those who only became such after it expired; to exclude them would constitute undue discrimination.

CASE NO. 3
Manila Electric Company VS Quisumbing

G.R. No. 127598. January 27, 1999

CASE TITLE: MANILA ELECTRIC COMPANY, petitioner, vs. THE HONORABLE SECRETARY OF
LABOR LEONARDO QUISUMBING and MERALCO EMPLOYEES AND WORKERS ASSOCIATION
(MEWA), respondents

TOPIC:
U.L.P.: CONTRACTING OUT (ARTICLE 248[c])
Article 248(c) considers it ULP for an employer to contract out services or
functions being performed by union members when such act will interfere with,
restrain, or coerce employees in the exercise of their right to self-organization.
Contracting out, itself, is not ULP; it is the ill intention that makes it so.

SUMMARY:

The Secretary of Labor imposed upon the management the

duty to consult the union before implementing a j o b contracting out that
would last for six months or more. The Court invalidated the imposition while
noting that contracting out is subject to specific legal limitations.

FACTS:

Respondent union MEWA is the duly recognized labor organization of the rank-and-file
employees of MERALCO.The parties had a pending case before the Secretary of Labor
who rendered a decision ordering that they execute the CBA incorporating the modifi-
cations made by the Secretary. The parties in this case were ordered by the Sec. of
Labor to execute a collective bargaining agreement (CBA) wherein. The CBA allowed
for the increase in the wages of the employees concerned.

MERALCO filed this petition arguing that an increase in wages will result in higher
rates of electricity which will be passed to the consumers. The Union likewise asks for
reconsideration in so far as the 1999 decision denied them the benefit of being
granted loans to set up a cooperative. Finally, the Union questions the right given to
MERALCO in contracting out jobs without need to consult the Union.

ISSUE/S:

(1) Whether contracting without need to consult Union is a valid provision.

 (2) Whether grant of arbitral awards retroactive.
(3) WON increase in wages will result in higher prices of electricity

RULING:

(1) Yes, the employer is allowed to contract out services for six months or
more. However, a line must be drawn between management prerogatives
regarding business operations per se and those which affect the rights of
employees, and in treating the latter, the employer should see to it that its
employees are at least properly informed of its decision or modes of action
in order to attain a harmonious labor-management relationship and en-
lighten the workers concerning their rights. Hiring of workers is within the
employer’s inherent freedom to regulate and is a valid exercise of its man-
agement prerogative subject only to special laws and agreements on the
matter and the fair standards of justice. While there should be mutual con-
sultation, eventually deference is to be paid to what management decides.

(2) CBA arbitral awards granted after six months from the expiration of the last
CBA shall retroact to such time agreed upon by both employer and the em-
ployees or their union. Absent such an agreement as to retroactivity, the
award shall retroact to the first day after the six-month period following the
expiration of the last day of the CBA should there be one. In the absence of
a CBA, the Secretary’s determination of the date of retroactivity as part of
his discretionary powers over arbitral awards shall control.

(3) This is a non sequitur. An increase in the prices of electric current needs the
approval of the appropriate regulatory government agency and does not au-
tomatically result from a mere increase in the wages. Collective bargaining
disputes "requires due consideration and proper balancing of the interests of
the parties to the dispute and of those who might be affected by the dis-
pute."It should be noted that the relations between labor and capital is im-
pressed with public interest which must yield to the common good. Neither
party should act oppressively against the other or impair the interest or con-
venience of the public.

CASE 4

St. Lukes Medical Center vs. Torres

Facts: Private respondent SLMCEA-AFW brought to the attention of petitioner via a letter dated July 4, 1990
that the 1987-1990 was about to expire and manifested in the process that private respondent wanted to
renew the CBA. This development triggered round-table talks on which occasions petitioner proposed, among
other items, a maximum across-the-board monthly salary increase of P375.00 per employee, to which proposal
private respondent demanded a P1,500.00 hike or 50% increase based on the latest salary rate of each
employee, whichever is higher.

A deadlock on issues, especially that bearing on across-the-board monthly and meal allowances followed and
to pre-empt the impending strike as voted upon by a majority of private respondent's membership, petitioner
lodged the petition below. The Secretary of Labor immediately assumed jurisdiction and the parties submitted
their respective pleadings.

On January 28, 1991, public respondent Secretary of Labor issued the Order now under challenge. Said Order
contained a disposition on both the economic and non-economic issues raised in the petition. One of the
rulings in the order is the granting of the retroactive effect to the enforceability of the CBA.
Petitioner argues that the Order of January 28, 1991 is violative of Article 253-A of the Labor Code, particularly
its provisions on retroactivity. Said Article pertinently provides:

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 the collective
bargaining agreement, shall retroact to the day immediately following such date. If any such agree-
ment 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.

Petitioner argues that in granting retroactive effect to the enforceability of the CBA, public respondent com-
mitted an act contrary to the above provision of law, pointing out that the old CBA expired on July 30, 1990
and the questioned order was issued on January 28, 1991. Petitioner theorizes that following Article 13 of the
Civil Code which provides that there are 30 days in one month, the questioned Order of January 28, 1991 was
issued beyond the six-month period.

Private respondent agrees with the Labor Secretary's view that Article 253-A of the Labor Code does not apply
to arbitral awards such as those involved in the instant case. According to private respondent, Article 253-A
of the Labor Code is clear and plain on its face as referring only to collective bargaining agreements entered
into by management and the certified exclusive bargaining agent of all rank-and-file employees therein within
six (6) months from the expiry of the old CBA.

Issue: Whether or not the CBA should be given retroactive effect.

Ruling: The effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the
previous CBA, contrary to the position of petitioner. Under the circumstances of the case, Article 253-A cannot
be property applied to herein case. As correctly stated by public respondent in his assailed Order of April 12,
1991 dismissing petitioner's Motion for Reconsideration —

Anent the alleged lack of basis for the retroactivity provisions awarded, we would stress that the
provision of law invoked by the Hospital, Article 253-A of the Labor Code, speak of agreements by
and between the parties, and not arbitral awards . . .

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral
awards issued by the Secretary of Labor pursuant to Article 263 (g) of the Labor Code, such as herein involved,
public respondent is deemed vested with plenary and discretionary powers to determine the effectivity thereof.
 CASE NO. 5
G.R. No. 111262. September 19, 1996
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO vs. HON. MA. NIEVES D. CONFESOR,
Secretary of Labor, Dept. of Labor & Employment, SAN MIGUEL CORPORATION, MAGNOLIA
CORPORATION (Formerly, Magnolia Plant) and SAN MIGUEL FOODS, INC. (Formerly, B-Meg
Plant), respondents

TOPIC: Employees of Spun-off companies are no longer part of the original company’s bargaining unit.

FACTS:

Petitioner-union San Miguel Corporation Employees Union-PTGWO entered into a CBA with private respondent
San Miguel Corporation (SMC) to take effect upon the expiration of the previous CBA or on June 30, 1989.
The CBA provided that the representation aspect shall be for five years, or from July 1, 1989 to June 30, 1994,
with a 6o day freedom period. Also, sixty (60) days prior to June 30, 1992 either party may initiate negotiations
of all provisions of this Agreement, except insofar as the representation aspect is concerned. If no agreement
is reached in such negotiations, the Agreement shall nevertheless remain in force up to the time a subsequent
agreement is reached by the parties.

While the CBA is in force, SMC management informed its employees in a letter dated August 13, 1991 that
the company which was composed of four operating divisions namely: (1) Beer, (2) Packaging, (3) Feeds and
Livestocks, (4) Magnolia and Agribusiness would undergo a restructuring. Effective October 1, 1991, Magnolia
and Feeds and Livestock Division were spun-off and became two separate and distinct corporations: Magnolia
Corporation (Magnolia) and San Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA remained
in force and effect.

After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA and Article 253-A of
the Labor Code. Negotiations started sometime in July, 1992 with the two parties submitting their respective
proposals and counterproposals. During the negotiations, the petitioner-union insisted that the bargaining unit
of SMC should still include the employees of the spun-off corporations: Magnolia and SMFI; and that the
renegotiated terms of the CBA shall be effective only for the remaining period of two years or until June 30,
1994.

SMC, on the other hand, contended that the members/employees who had moved to Magnolia and SMFI,
automatically ceased to be part of the bargaining unit at the SMC. Furthermore, the CBA should be effective
for three years in accordance with Art. 253-A of the Labor Code.

ISSUE: (A) Whether or not the duration of the renegotiated terms of the CBA is to be effective for three years
or for only two years. (B) Whether or not the employees from the spun-off corporations should still be included
in the present bargaining unit.

HELD:

A. NO.

Petitioner-union contends that the duration for the non-representation provisions of the CBA should be coter-
minous with the term of the bargaining agency which in effect shall be for the remaining two years of the
current CBA.

However, the Secretary of Labor, in her questioned Order of February 15, 1993 ruled that the renegotiated
terms of the CBA at SMC should run for a period of three (3) years. We agree with the Secretary of Labor.
Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads:

ART. 253-A. Terms of a Collective Bargaining Agreement.—Any Collective Bargaining Agreement that the par-
ties 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 certi-
fication 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.

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 5-year term, and said agreement is ratified by
majority of the members in the bargaining unit, the subject contract is valid and legal and therefore, binds the
contracting parties. 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.

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

B. NO.

With respect to the second issue, there is, likewise, no merit in petitioner-union’s assertion that the employees
of Magnolia and SMFI should still be considered part of the bargaining unit of SMC.

Magnolia and SMFI were spun-off to operate as distinct companies on October 1, 1991.

Undeniably, the transformation of the companies was a management prerogative and business judgment
which the courts can not look into unless it is contrary to law, public policy or morals. Neither can we impute
any bad faith on the part of SMC so as to justify the application of the doctrine of piercing the corporate veil.
Ever mindful of the employees’ interests, management has assured the concerned employees that they will
be absorbed by the new corporations without loss of tenure and retaining their present pay and benefits
according to the existing CBAs.19 They were advised that upon the expiration of the CBAs, new agreements
will be negotiated between the management of the new corporations and the bargaining representatives of
the employees concerned. As a result of the spin-offs:

1. Each of the companies are run by, supervised and controlled by different management teams including
separate human resource/personnel managers.
2. Each Company enforces its own administrative and operational rules and policies and are not dependent
on each other in their operations.
3. Each entity maintains separate financial statements and are audited separately from each other.

Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical personalities. Thus,
they can not belong to a single bargaining unit.

Petitioner-union’s attempt to include the employees of Magnolia and SMFI in the SMC bargaining unit so as to
have a bigger mass base of employees has, therefore, no more valid ground.

Moreover, in determining an appropriate bargaining unit, the test of grouping is mutuality or commonality of
interests. The employees sought to be represented by the collective bargaining agent must have substantial
mutual interests in terms of employment and working conditions as evinced by the type of work they per-
formed. Considering the spin-offs, the companies would consequently have their respective and distinctive
concerns in terms of the nature of work, wages, hours of work and other conditions of employment. Interests
of employees in the different companies perforce differ. SMC is engaged in the business of beer manufacturing.
Magnolia is involved in the manufacturing and processing of dairy products while SMFI is involved in the
production of feeds and the processing of chicken. The nature of their products and scales of business may
require different skills which must necessarily be commensurated by different compensation packages. The
different companies may have different volumes of work and different working conditions. For such reason,
the employees of the different companies see the need to group themselves together and organize themselves
into distinctive and different groups. It would then be best to have separate bargaining units for the different
companies where the employees can bargain separately according to their needs and according to their own
working conditions. ###
Case #06 Rivera vs. Espiritu Jan. 23 2002

Topic: CBA Negotiation Suspension

GERARDO F. RIVERA, ALFRED A. RAMISO, AMBROCIO PALAD, DENNIS R. ARANAS, DAVID SORIMA, JR.,
JORGE P. DELA ROSA, and ISAGANI ALDEA, petitioners, vs. HON. EDGARDO ESPIRITU in his capacity as
Chairman of the PAL Inter-Agency Task Force created under Administrative Order No. 16; HON. BIEN-
VENIDO LAGUESMA in his capacity as Secretary of Labor and Employment; PHILIPPINE AIRLINES (PAL), LU-
CIO TAN, HENRY SO UY, ANTONIO V. OCAMPO, MANOLO E. AQUINO, JAIME J. BAUTISTA, and ALEXANDER
O. BARRIENTOS, respondents.

G.R. No. 135547. January 23, 2002

FACTS:

PAL was suffering from a difficult financial situation in 1998. It was faced with bankruptcy and was forced to
adopt a rehabilitation plan and downsized its labor force by more than 1/3. PALEA (PAL Employees Associa-
tion) went on a four-day strike to protest retrenchment measures in July 1998. PAL ceased operations on Sep
23, 1998.

PALEA board again wrote the President on Sep 28, 1998. Among others, it proposed the suspension of the
PAL-PALEA CBA for a period of ten years, subject to certain conditions. PALEA members accepted such terms
through a referendum on Oct 2, 1998. PAL resumed domestic operations on Oct 7, 1998.

Seven officers and members of PALEA filed instant petition to annul the Sep 27, 1998 agreement entered
into between PAL and PALEA.

ISSUE:
Whether or not negotiations may be suspended for 10 years.

HELD:
YES. CBA negotiations may be suspended for 10 years.

The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations undertaken
in the light of the severe financial situation faced by the employer, with the peculiar and unique intention of
not merely promoting industrial peace at PAL, but preventing the latter’s closure.

There is no conflict between said agreement and Article 253-A of the Labor Code. CBA under Article 253-A
of the Labor Code has a two-fold purpose. One is to promote industrial stability and predictability. Inasmuch
as the agreement sought to promote industrial peace, at the PAL during its rehabilitation, said agreement
satisfied the first purpose of said article. The other purpose is to assign specific timetable, wherein negotia-
tions become a matter of right and requirement. Nothing in Article 253-A prohibits the parties from waiving
or suspending the mandatory timetable and agreeing on the remedies to enforce the same.

CASE NO. 7
NAFTU VS Mainit Lumber

G.R. No. 79526. December 21, 1990.*

CASE TITLE:NATIONAL ASSOCIATION OF FREE TRADE UNIONS (NAFTU), petitioner, vs. MAINIT LUMBER
DEVELOPMENT COMPANY WORKERS UNION-UNITED LUMBER AND GENERAL WORKERS OF THE PHILIP-
PINES. (MALDECOWU-ULGWP), respondents.

TOPIC: Bargaining History Not Decisive Factor

FACTS:

On January 28, 1985, private respondent Mainit Lumber Development Company

Workers Union-United Lumber and General Workers of the Philippines, MALDECOWU-
ULGWP (ULGWP, for short), a legitimate labor organization filed with Regional Office
No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a petition for certi-
fication election to determine the sole and exclusive collective bargaining representa-
tive among the rank and file workers/employees of Mainit Lumber Development Com-
pany Inc. (MALDECO), a duly organized, registered and existing corporation engaged
in the business of logging and saw-mill operations employing approximately 136 rank
and file employees/workers. The case was scheduled for hearing two (2) times. Dur-
ing the first scheduled hearing on February 20, 1985, the counsel for compulsory in-
tervenor (now petitioner), National Association of Free Trade Union (NAFTU) re-
quested for postponement on the ground that he was leaving for abroad. During the
scheduled hearing of March 13, 1985, they, however, agreed to submit simultane-
ously their respective position papers within twenty (20) days.

Petitioner ULGWP, private respondent herein, in its petition and position paper al-
leged, among others: (1) that there was no certification election conducted within 12
months prior to the filing of the petition; (2) that the petition was filed within the 60
day freedom period, i.e. CBA expired on February 28, 1985; (3) that the petition is
supported by the signatures of 101 rank and file employees out of a total of 201 em-
ployees of the employer or more than thirty percent (30%) than that required by law

On April 11, 1985, the Med-Arbiter granted the petition for certification election. On
April 26, 1985, NAFTU appealed the decision of the Med-Arbiter on the ground that
MALDECO was composed of two (2) bargaining units, the Sawmill Division and the
Logging Division, but both the petition and decision treated these separate and dis-
tinct units only as one

On April 28, 1986, the Bureau of Labor Relations affirmed the decision. Thus, a certifi-
cation election was held on separate dates at the employer’s sawmill division and log-
ging area respectively. In said election MALDECOWU-ULGWP garnered a total vote of
146 while NAFTU garnered a total of 2 votes

On July 26, 1986, NAFTU filed an election protest alleging massive vote buying ac-
companied with grave and serious threat force and intimidation on the lives of 25 ap-
plicants as stated in a Joint Affidavit attached thereto

MALDECO filed its Manifestation on August 3, 1986, which corroborated petitioner’s

stand. Attached to the said Manifestation was a joint affidavit executed by thirty five
(35) of its employees/workers
On September 3, 1986, private respondent filed its position paper. On September 8,
1986 petitioner filed its opposition to private respondent’s position paper. On Septem-
ber 24, 1986, the Med-Arbiter dismissed the election protest.

On October 10, 1986, petitioner NAFTU appealed the order of the Med-Arbiter to the
Bureau of Labor Relations in Manila which denied the appeal and the two motions for
reconsideration.

ISSUE:

Whether the existence of a bargaining history is a conclusive or decisive fac-

tor in determining the appropriate bargaining unit.

RULING:

In the case at bar, petitioner alleges that the employer MALDECO was composed of
two bargaining units, the Sawmill Division in Butuan City and the Logging Division, in
Zapanta Valley, Kitcharao, Agusan Norte, about 80 kilometers distant from each other
and in fact, had then two separate CBA’s, one for the Sawmill Division and another for
the Logging Division, both the petition and decision referred only to one bargaining
unit; that from 1979 to 1985, the Ministry of Labor and Employment recognized the
existence of two (2) separate bargaining units at MALDECO, one for its Logging Divi-
sion and another for its Sawmill Division.
Significantly, out of two hundred and one (201) employees of MALDECO, one hundred
seventy five (175) consented and supported the petition for certification election,
thereby confirming their desire for one bargaining representative
Moreover, while the existence of a bargaining history is a factor that may be reckoned
with in determining the appropriate bargaining unit, the same is not decisive or con-
clusive. Other factors must be considered. The test of grouping is community or mu-
tuality of interests. This is so because “the basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the combination which will best as-
sure to all employees the exercise of their collective bargaining rights.” (Democratic
Labor Association v. Cebu Stevedoring Company, Inc., et al., 103 Phil. 1103 [1958]).
Certainly, there is a mutuality of interest among the employees of the Sawmill Divi-
sion and the Logging Division. Their functions mesh with one another. One group
needs the other in the same way that the company needs them both. There may be
difference as to the nature of their individual assignments but the distinctions are not
enough to warrant the formation of a separate bargaining unit.

CASE 8

Pagkakaisa ng mga Mangagawa sa Triumph vs. Calleja

Facts: The petitioner is the recognized collective bargaining agent of the rank-and-file employees of Triumph
International with which the latter has a valid and existing collective bargaining agreement effective up to
September 24, 1989.

On November 25, 1987, a petition for certification election was filed by the respondent union with the Depart-
ment of Labor and Employment. However, a motion to dismiss the petition for certification election was filed
by Triumph International on the grounds that the respondent union cannot lawfully represent managerial
employees and that the petition cannot prosper by virtue of the contract-bar rule.
The Labor Arbiter issued an order granting the petition for certification election and directing the holding of a
certification election to determine the sole and exclusive bargaining representative of all monthly-paid admin-
istrative, technical, confidential and supervisory employees of Triumph International. On appeal, the CA af-
firmed the Labor Arbiter’s order with certain modifications that the subject employees sought to be represented
by the petitioner union are given the option whether to join the existing bargaining unit composed of daily
paid rank-and-file employees. If they opt to join, the pertinent provision of the existing CBA should be amended
so as to include them in its coverage.

In this petition, petitioner argues that the members of respondent union are managerial employees who are
expressly excluded from joining, assisting or forming any labor organization under Art. 245 of the Labor Code.

Issue: (1) Whether or not the public respondent gravely abused its discretion in ordering the immediate
holding of a certification election among the workers sought to be represented by the respondent union; (2)
whether or not the contract-bar rule applies to the present case.

Ruling:

1. NO. In the determination of whether or not the members of respondent union are managerial employees,
we accord due respect and, therefore, sustain the findings of fact made by the public respondent pursuant
to the time-honored rule that findings of fact of quasi-judicial agencies like the Bureau of Labor Relations
which are supported by substantial evidence are binding on us and entitled to great respect considering
their expertise in their respective fields. According to the Med-Arbiter, while the functions, and we may
add, the titles of the personnel sought to be organized appear on paper to involve an apparent exercise
of managerial authority, the fact remains that none of them discharge said functions. The petitioner has
failed to show reversible error insofar as this finding is concerned.

The test of ‘supervisory’ or ‘managerial status’ depends on whether a person possesses authority to act in
the interest of his employer in the matter specified in Article 212 (K) of the Labor Code and Section 1 (m)
of its Implementing Rules and whether such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. Thus, where such recommendatory powers as in the case at
bar, are subject to evaluation, review and final action by the department heads and other higher executives
of the company, the same, although present, are not effective and not an exercise of independent judg-
ment as required by law.

The public respondent, in its factual findings, found that the supervisory employees sought to be repre-
sented by the respondent union are not involved in policy-making and their recommendatory powers are
not even instantly effective since the same are still subject to review by at least three managerial heads
(department manager, personnel manager and general manager) before final action can be taken. Hence,
it is evidently settled that the said employees do not possess a managerial status. The fact that their work
designations are either managers or supervisors is of no moment considering that it is the nature of their
functions and not the said nomenclatures or titles of their jobs which determines their statuses.

2. YES. Rule V Section 3, Book V of the Implementing Rules and Regulations of the Labor Code is written in
plain and simple terms. It provides in effect that if a collective bargaining agreement validly exists, a
petition for certification election can only be entertained within sixty (60) days prior to the expiry date of
said agreement. Respondent union’s petition for certification election was filed on November 25, 1987. At
the time of the filing of the said petition, a valid and existing CBA was present between petitioner and
Triumph International. The CBA was effective up to September 24, 1989. There is no doubt that the
respondent union’s CBA constituted a bar to the holding of the certification election as petitioned by the
respondent union with public respondent. The members of the respondent union should wait for the
proper time.

The CBA in this case expired on September 24, 1989. If a new CBA with the same provisions as the old
one has been executed, its terms should be amended so as to conform to the tenor of this decision.
 CASE NO. 9
G.R. No. 96490. February 3,1992.*
INDOPHIL TEXTILE MILL WORKERS UNION-PTGWO, petitioner, vs. VOLUNTARY ARBITRATOR
TEODORICO P. CALICA AND INDOPHIL TEXTILE MILLS, INC., respondents.

TOPIC: Piercing the vail of corporate fiction to prevent unfair labor practice (Not applicable in the case)

FACTS:

Petitioner Indophil Textile Mill Workers Union-PTGWO and private respondent Indophil Textile Mills, Inc. exe-
cuted a collective bargaining agreement effective from April 1, 1987 to March 31, 1990. On November 3, 1987,
Indophil Acrylic Manufacturing Corporation was formed and registered with the Securities and Exchange Com-
mission. In 1988, Acrylic became operational and hired workers according to its own criteria and standards.
Sometime in July, 1989, the workers of Acrylic unionized and a duly certified collective bargaining agreement
was executed.

In 1990 or a year after the workers of Acrylic have been unionized and a CBA executed, the petitioner union
claimed that the plant facilities built and set up by Acrylic should be considered as an extension or expansion
of the facilities of private respondent Company. pursuant to Section 1(c), Article I of the CBA, to wit.

"c) This Agreement shall apply to the Company's facilities and installations and to any extension and expansion
thereat."

In other words, it is the petitioner's contention that Acrylic is part of the Indophil bargaining unit. The peti-
tioner's contention was opposed by private respondent which submits that it is a juridical entity separate and
distinct from Acrylic.

ISSUE: Whether or not Acrylic and Indophil are one and the same corprations.

HELD: NO. Under the doctrine of piercing the veil of corporate entity, when valid grounds therefore exist, the
legal fiction that a corporation is an entity with a juridical personality separate and distinct from its members
or stockholders may be disregarded. In such cases, the corporation will be considered as a mere association
of persons. The members or stockholders or the corporation will be considered as the corporation, that is
liability will attach directly to the officers and stockholders. The doctrine applies when the corporate fiction is
used to defeat public convenience, justify wrong, protect fraud, or defend crime, or when it is made as a shield
to confuse the legitimate issues, or where a corporation is the mere alter ego or business conduit of a person,
or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely
an instrumentality, agency, conduit or adjunct of another corporation.

In the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic, alleging that the creation
of the corporation is a devise to evade the application of the CBA between petitioner Union and private re-
spondent Company. While we do not discount the possibility of the similarities of the businesses of private
respondent and Acrylic, neither are we inclined to apply the doctrine invoked by petitioner in granting the
relief sought. The fact that the businesses of private respondent and Acrylic are related, that some of the
employees of the private respondent are the same persons manning and providing for auxilliary services to
the units of Acrylic, and that the physical plants, offices and facilities are situated in the same compound, it is
our considered opinion that these facts are not sufficient to justify the piercing of the corporate veil of Acrylic.

In the same case of Umali, et al. v. Court of Appeals (supra), We already emphasized that "the legal corporate
entity is disregarded only if it is sought to hold the officers and stockholders directly liable for a corporate debt
or obligation." In the instant case, petitioner does not seek to impose a claim against the members of the
Acrylic.
Furthermore, We already ruled in the case of Diatagon Labor Federation Local 110 of the ULGWP v. Ople
(supra) that it is grave abuse of discretion to treat two companies as a single bargaining unit when these
companies are indubitably distinct entities with separate juridical personalities.

Hence, the Acrylic not being an extension or expansion of private respondent, the rank-and-file employees
working at Acrylic should not be recognized as part of, and/or within the scope of the petitioner, as the
bargaining representative of private respondent. ###

Case#10 Phil. Airlines Employees Association vs. Calleja June 22, 1998

Topic: Certification Election

PHILIPPINE AIRLINES EMPLOYEES' ASSOCIATION (PALEA), petitioner, vs. HON. PURA FERRER-CALLEJA, Di-
rector of the Bureau of Labor Relations, PHILIPPINE AIRLINES NON-MANAGERIAL EMPLOYEES ASSOCIA-
TION (PANOMEA-FUR), and PHILIPPINE AIRLINES, INC., respondents.

G.R. No. 76673 June 22, 1988

FACTS:
A certification election was held on Apr. 27,1977 wherein petitioner Philippine Airlines Employees Associa-
tion (PALEA) won and was recognized by the Bureau of Labor Relations (BLR) as the exclusive bargaining
agent of all the rank and file employees of the Philippine Airlines, Inc. In 1980, respondent Philippine Airline
Non-Managerial Employees’ Association (PANOMEA-FUR) filed a petition for certification election among the
“administrative, supervisory, licensed mechanics, technical and confidential employees of PAL, alleging inter-
alia that there is no other union existing in the proposed bargaining unit nor is there a certified collective
bargaining agreement which maybe a bar to the petition.

PALEA and PAL filed separate motions for reconsideration of the BLR’s resolution granting PANOMEA’s peti-
tion. While PAL and PALEA’s motions for reconsideration were pending resolution by the BLR director, the
licensed mechanics whom PANOMEA sought to represent, filed their own petition for certification election
under the name of PAL Licensed / Amalgamated Federation of Labor of the Philippines (PALMA-AFL).

In October 1985, the BLR Director dismissed the petition of the licensed mechanics only (PALMA-AFL), ex-
cluding the administrative, supervisor, technical & confidential employees, ruling that the existing law did
not allow the creation of a separate bargaining unit for the licensed mechanics. However, in April 1986, the
BLR Director ordered the holding of certification election among the administrative, supervisory, licensed
mechanics, technical & confidential employees of PAL.

PALEA claims that it is the exclusive bargaining representative of all the rank & file employees and that
PANOMEA seeks to dismember or fragmentize the already existing bargaining unit so that another one may
be created.

ISSUES:

1. Whether or not the BLR committed grave abuse of its discretion?

2. Whether or not PANOMEA’s petition is meritorious?

HELD:

1. No, the BLR did not commit grave abuse of its discretion when it ruled that the present CBA between
PALEA and PAL covers only the rank & file employees but not the licensed mechanics, administrative, super-
visory, technical & confidential employees of PAL. The court held that as a rule, factual findings of the BLR
which are supported by substantial evidence are binding and must be respected by the courts.
2. Yes, PANOMEA’s petition for certification election has merits. The Court held that whenever there is doubt
as to whether a particular union represents the majority of the rank & file employees, in the absence of legal
impediment, the holding of certification election is the most democratic method of determining the employ-
ees’ choice of their bargaining representative.

CASE NO. 11
UST VS Bitonio

G.R. No. 131235. November 16, 1999.*

CASE TITLE:UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA
POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES,
CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA GABO, MAFEL YSRAEL, LAURA
ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP
AGUINALDO, BENEDICTA ALAVA and LEONCIO CASAL, petitioners, vs. Dir. BENEDICTO ERNESTO R. BITO-
NIO, JR. of the Bureau of Labor Relations, Med-Arbiter TOMAS F. FALCONITIN of The National Capital Re-
gion, Department of Labor and Employment (DOLE), EDUARDO J. MARIÑO, JR., MA. MELVYN ALAMIS,
NORMA COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY CURA,
FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA REDOBLADO,
RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents.

TOPIC: Election of Union Officers

FACTS:

The petitioners, who are mostly disgruntled union members, claim that
the numerous anomalies allegedly committed by the union officers impelled them to
elect a new set of USTFU officers before the end of the term of the incumbents. They
assert that such exercise was pursuant to their right to self-organization. But the Med-
Arbiter of DOLE declared the election null and void on the ground that the election
was initiated and conducted not in accordance with the union's constitution and by-
laws. On appeal, the BLR Director upheld the Med-Arbiter's decision.

ISSUE:

Whether the members’ frustration over the performance of the union officers, as well
as their fears of a “fraudulent” election to be held under the latter’s supervision, could
justify the disregard of the union’s constitution and by-laws.

RULING:

NO, Petitioners' frustration over the performance of [the incumbent union

officers], as well as their fears of a "fraudulent" election to be held under the latter's
supervision, could not justify the method they chose to impose their will on the union.
Director Bitonio aptly elucidated: "The constitutional right to self-organization is better
understood in the context of ILO Convention No. 97 (Freedom of Association and Pro-
tection of Right to Organize), to which the Philippines is signatory. Article 3 of the
Convention provides that worker's organizations shall have the right to draw up their
constitution and rules and to elect their representatives in full freedom, free from any
interference from public authorities. The freedom conferred by the provision is expan-
sive; the responsibility imposed on union members to respect the constitution and
rules they themselves draw up equally so. The point to be stressed is
that the union's CBL is the fundamental law that governs die relationship between and
among the members of die union. It is where the rights, duties and obligations, pow-
ers, functions and authority of the officers as well as the members are defined. It is
the organic law that determines the validity of acts done by any officer or member of
the union. Without respect for die CBL, a union as a democratic institution degener-
ates into nothing more than a group of individuals governed by mob rule."
We agree with the solicitor general's observation that the act of suspending
the constitution when the questioned election was held is an implied admission that
the election held on that date [October 4,1996] could not be considered valid under
the existing USTFU constitution x x x .
The ratification of the new CBA executed between the petitioners and the
University of Santo Tomas management did not validate the void October 4, 1996
election. Ratified were the terms of the new CBA, not the issue of union leadership—a
matter that should be decided only by union members in die proper forum at the
proper time and after observance of proper procedure.

CASE 12

Samahan ng mga Manggagawa sa Phermex vs. Secretary of Labor

Facts: On January 15, 1991, a certification election was conducted among employees of respondent Permex
Producer and Exporter Corporation. The results of the elections were as follows:

National Federation of Labor (NFL) - 235

No Union - 466
Spoiled Ballots - 18
Marked Ballots - 9
Challenged Ballots - 7

However, some employees of Permex Producer formed a labor organization known as the Samahang Mang-
gagawa sa Permex (SMP) which they registered with the Department of Labor and Employment. The union
later affiliated with the Philippine Integrated Industries Labor Union (PIILU).

SMP-PIILU wrote the respondent company requesting recognition as the sole and exclusive bargaining repre-
sentative of employees at the Permex Producer and was granted. They then entered into a CBA. A year
later, National Federation of Labor (NFL) filed a petition for certification election but was dismissed. Two ar-
guments are put forth in support of the petition. First, it is contended that petitioner has been recognized by
the majority of the employees at Permex Producer as their sole collective bargaining agent. Petitioner argues
that when a group of employees constituting themselves into an organization and claiming to represent a ma-
jority of the work force requests the employer to bargain collectively, the employer may do one of two things.

First, if the employer is satisfied with the employees’ claim the employer may voluntarily recognize the union
by merely bargaining collectively with it. The formal written confirmation is ordinarily stated in the collec-
tive bargaining agreement.

Second, if on the other hand, the employer refuses to recognize the union voluntarily, it may petition the
Bureau of Labor Relations to conduct a certification election. If the employer does not submit a petition for cer-
tification election, the union claiming to represent the employees may submit the petition so that it may be
directly certified as the employees’ representative or a certification election may be held.

The petitioner also contends that under Arts. 253, 253-A and 256 of the Labor Code and Book V, Rule 5, §3
of its Implementing Rules and Regulations, a petition for certification election or motion for intervention may
be entertained only within 60 days prior to the date of expiration of an existing collective bargaining agree-
ment.

Issues: (1) Whether or not the employer has the power to declare a union as the exclusive representative of
its workers for the purpose of collective bargaining; (2) whether or not the contract-bar rule applies in the
instant case.

Ruling:

1. NO. The company did not have the power to declare the union the exclusive representative of the workers
for the purpose of collective bargaining. Indeed, petitioner’s contention runs counter to the trend towards
the holding of certification election. By virtue of Executive Order No. 111, which became effective on
March 4, 1987, the direct certification previously allowed under the Labor Code had been discontinued as
a method of selecting the exclusive bargaining agents of the workers. Certification election is the most
effective and the most democratic way of determining which labor organization can truly represent the
working force in the appropriate bargaining unit of a company.

2. NO. The purpose of the rule is to ensure stability in the relationships of the workers and the management
by preventing frequent modifications of any collective bargaining agreement earlier entered into by them
in good faith and for the stipulated original period. Excepted from the contract-bar rule are certain types
of contracts which do not foster industrial stability, such as contracts where the identity of the representa-
tive is in doubt. Any stability derived from such contracts must be subordinated to the employees’ freedom
of choice because it does not establish the kind of industrial peace contemplated by the law. Such situation
obtains in this case. The petitioner entered into a CBA with Permex Producer when its status as exclusive
bargaining agent of the employees had not been established yet.

CASE No. 13
G.R. No. 75810. September 9, 1991 .*

KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPILKATIPUNAN), petitioner, vs. HON. CRES-

ENCIANO B. TRAJANO, in his capacity as Director, Bureau of Labor Relations, and VIRON GAR-
MENTS MFG., CO., INC., respondents.

FACTS:

The propriety of holding a certification election is the issue in the special civil action of certiorari at bar.

By virtue of a Resolution of the BLR dated February 27, 1981, NAFLU was declared the exclusive bargaining
representative of all rank-and-file employees of Viron Garments Manufacturing Co., Inc. (VIRON).

More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino
(KAMPILKatipunan) filed with the Bureau of Labor Relations a petition for certification election among the
employees of VIRON. The petition allegedly counted with the support of more than thirty percent (30%) of
the workers at VIRON.

NAFLU opposed the petition. The MedArbiter however ordered that a certification election be held at VIRON
as prayed for, after ascertaining that KAMPIL had complied with all the requirements of law and that since the
certification of NAFLU as sole bargaining representative in 1981, no collective bargaining agreement had been
executed between it and VIRON.

NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985,
it was in process of collective bargaining with VIRON; that there was in fact a deadlock in the negotiations
which had prompted it to file a notice of strike; and that these circumstances constituted a bar to the petition
for election in accordance with Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code,1
reading as follows:
“SEC;. 3. 3. When to file.—In the absence of a collective bargaining agreement submitted in accordance with
Article 231 of the Code, a petition for certification election may be filed at any time. However, no certification
election may be held within one year from the date of issuance of declaration of a final certification election
result. Neither may a representation question be entertained if, before the filing of a petition for certification
election, a bargaining deadlock to which incumbent or certified bargaining agent is a .party had been submitted
to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60) days
prior to the expiry date of such agreement.”

ISSUE: Whether or not KAMPIL’s petition for certification election is barred because, before its filing, a bar-
gaining deadlock between VIRON and NAFLU, as the incumbent bargaining agent, had been submitted to
conciliation or arbitration or had become the subject of a valid notice of strike or lockout, in accordance with
Section 3, Rule V, Book V of the Omnibus Rules.

HELD: NO.

Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such
“bargaining deadlock x x (which) had been submitted to conciliation or arbitration or had become the subject
of a valid notice of strike or lockout.” To be sure, there are in the record assertions by NAFLU that its attempts
to bring VIRON to the negotiation table had been unsuccessful because of the latter’s recalcitrance, and un-
fulfilled promises to bargain collectively; but there is no proof that’ it had taken any action to legally coerce
VIRON to comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor
practice; but it did not. It could have gone on a legitimate strike in protest against VIRON’s refusal to bargain
collectively and compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to
bargain collectively had been delayed by continuing challenges to the resolution pronouncing it the sole bar-
gaining representative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact
prevent initiation of the bargaining process between it and VIRON.

The stark, incontrovertible fact is that from February 27, 1981—when NAFLU was proclaimed the exclusive
bargaining representative of all VIRON employees—to April 11, 1985—when KAMPIL filed its petition for cer-
tification election—or a period of more than four (4) years, no collective bargaining agreement was ever
executed, and no deadlock ever arose from negotiations between NAFLU and VIRON resulting in conciliation
proceedings or the filing of a valid strike notice.

The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain
and for violation of terms and conditions of employment, which was settled by the parties’ agreement, and to
another strike staged on December 6,1986 in connection with a claim of violation of said agreement, a dispute
which has since been certified for compulsory arbitration by the Secretary of Labor & Employment.4 Obviously,
however, these activities took place after the initiation of the certification election case by KAMPIL, and it was
grave abuse of discretion to have regarded them as precluding the holding of the certification election thus
prayed for. ###

Case#14 Union of Filipro Employees vs. Nestle March 3, 2008

Topic: Setting of a precondition for the holding of collective bargaining negotiations

UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS - KILUSANG MAYO UNO
(UFE-DFA-KMU), petitioner, vs. NESTLÉ PHILIPPINES, INCORPORATED, respondent.

G.R. Nos. 158930-31 March 3, 2008

NESTLÉ PHILIPPINES, INCORPORATED, petitioner, vs. UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND
ALLIED INDUSTRIES UNIONS - KILUSANG MAYO UNO (UFE-DFA-KMU), respondent.
G.R. Nos. 158944-45 March 3, 2008

FACTS:

UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of Nestlé. On April
2001, the existing CBA was to end on 5 June 2001, so the Union informed respondent company of the intent
to open a new CBA for the year 2001-2004. Nestle said that it was preparing its own proposal. Dialogue
ensued but the parties failed to reach any agreement on the economic conditions of the CBA; even concilia-
tion proceedings failed. Nestle refused to bargain, setting a precondition for the holding of collective bar-
gaining negotiations the non-inclusion of the issue of Retirement Plan.

On October 2001, UFE-DFA-KMU filed a Notice of Strike predicated on Nestlé's alleged unfair labor practices,
that is, bargaining in bad faith by setting pre-conditions in the ground rules and/or refusing to include the
issue of the Retirement Plan in the CBA negotiations.

On November 2001, Nestle filed a Petition for Assumption of Jurisdiction with the Secretary of the DOLE over
the current dispute in order to effectively enjoin any impending strike by the members of the UFE-DFA-KMU.
Secretary assumed jurisdiction over the case and issued an order to enjoin any strike. On January 2002, de-
spite said order, the employee members of UFE-DFA-KMU at Nestlé's Cabuyao Plant went on strike On March
2002, the case was brought before CA with the Court ruling grave abuse of discretion on the part of the
Secretary of DOLE. In order to finally settle the dispute, then Acting Secretary of the DOLE issued an order
calling for the execution of the CBA among other things. The CA ruled that there was a grave abuse of discre-
tion.

ISSUE:
Whether or not Nestle’s setting of a precondition for the holding of collective bargaining negotiations is a
form of Unfair Labor Practice.

HELD:

NO. ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. — It shall be unlawful for an employer to commit
any of the following unfair labor practices:
(g) To violate the duty to bargain collectively as prescribed by this Code

In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the second Notice of Strike
nor the records of these cases substantiate a finding of Unfair labor practice. It is not enough that the union
believed that the employer committed acts of unfair labor practice when the circumstances clearly negate
even a prima facie showing to warrant such a belief.

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. Herein, no proof was presented to exemplify bad faith on the part of Nestlé apart from mere alle-
gation. Construing arguendo that the content of the afore quoted 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 pro-
posals affecting other matters covered by the CBA negates 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.

CASE NO. 15
Samahan Manggagawa sa Top Form VS NLRC
 G.R. No. 113856. September 7, 1998.*

SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING-UNITED WORKERS OF THE PHIL-

IPPINES (SMTFM-UWP), its officers and members, petitioners, vs. NATIONAL LABOR RELA-
TIONS COMMISSION, HON. JOSE G. DE VERA and TOP FORM MANUFACTURING PHIL., INC., re-
spondents.

TOPIC:
Proposal Contained in Minutes but Not in the CBA Itself
A proposal mentioned in the negotiation minutes but not embodied in
the collective bargaining contract itself is not part of the CBA. It cannot serve as basis
of a charge of violating the CBA or of bargaining in bad faith.

FACTS:

The union charged the employer with ULP through bargaining in bad
faith when the employer refused to implement across-the-board the wage increases
mandated by Wage Orders Nos. 01 and 02. The union alleged that during the CBA ne-
gotiation the management panel committed itself to an across-the-board implementa-
tion of government-mandated wage increase. But nowhere does the CBA mention
such alleged promise or commitment.

ISSUE:

Whether the union’s contention that the Minutes of the collective bargaining negotia-
tion meeting forms part of the entire agreement is pointless.

Ruling:

Yes, The Court affirmed the dismissal of the union's complaint. Through
Justice Romero, the Supreme Court explains its ruling:

To start with, if there was indeed a promise or undertaking on the part

of private respondent to obligate itself to grant an automatic across-the-board
wage increase, petitioner union should have requested or demanded that such
"promise or undertaking" be incorporated in the CBA. After all, petitioner
union has the means under the law to compel private respondent to incorporate
this specific economic proposal in the CBA. It could have invoked Article
252 of the Labor Code defining "duty to bargain"; thus, the duty includes
"executing a contract incorporating such agreement if requested by either
party." Petitioner union's assertion that it had insisted on the incorporation of
the same proposal may have a factual basis considering the allegations in the
aforementioned joint affidavit of its members. However, Article 252 also states
that the duty to bargain "does not compel any party to agree to a proposal or
make any concession." Thus, petitioner union may not validly claim that the proposal
embodied in the Minutes of the negotiation forms part of the CBA that it finally en-
tered into with private respondent.

Where a proposal raised by a contracting party does not find print in the
CBA, it is not a part thereof and the proponent has no claim whatsoever to its
implementation. Hence, petitioner union's contention that the Minutes of the collective
bargaining negotiation meeting forms part of the entire agreement is pointless.
The Minutes reflects the proceedings and discussions undertaken in the process
of bargaining for worker benefits in the same way that the minutes of court
proceedings show what transpired therein. At the negotiations, it is but natural for
both management and labor to adopt positions or make demands and offer proposals
and counter-proposals. However, nothing is considered final until the parties have
reached an agreement. In fact, one of management's usual negotiation strategies is to
"x x x agree tentatively as you go along with the understanding that nothing is bind-
ing until the entire agreement is reached." If indeed private respondent promised to
continue with the practice of granting across-the-board salary increases ordered by
the government, such promise could only be demandable in law if incorporated in the
CBA.
Moreover, by making such promise, private respondent may not be considered
in bad faith or at the very least, resorting to the scheme of feigning to undertake the
negotiation proceedings through empty promises. As earlier stated, petitioner union
had, under the law, the right and the opportunity to insist on the foreseeable fulfil-
ment of the private respondent's promise by demanding its incorporation in the CBA.
Because the proposal was never embodied in the CBA, the promise has remained just
that, a promise, the implementation of which cannot be validly demanded under the
law.

CASE 16

Colegio de San Juan De Letran vs. Association of Employees

Facts: During the renegotiation of the respondent unions Collective Bargaining Agreement with the petitioner,
Eleonor Ambas emerged as the newly elected President of the union. Ambas wanted to continue the renego-
tiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already prepared for signing
by the parties. However, the union members rejected the said CBA. Thereafter, petitioner accused the union
officers of bargaining in bad faith before the NLRC. The Labor Arbiter decided in favor of the petitioner. This
decision was reversed on appeal with the NLRC.

The parties later agreed to disregard the unsigned CBA and to start negotiation on new five-year CBA. During
the pendency of approval of proposals, Ambas was informed that her work schedule was being changed. Am-
bas protested and requested management to submit the issue to a grievance machinery under the old CBA.

After the petitioner’s inaction on the CBA, the union filed a notice to strike. After meeting with the NCMB to
discuss the ground rules for renegotiation, Ambas received a letter dismissing her for alleged insubordina-
tion. The petitioner then ceased negotiations when it received news that another labor organization had filed
a petition for certification.

The union finally struck, but the Secretary of Labor and Employment ordered them to return to work and for
petitioner to accept them back. The Secretary of Labor and Employment later rendered judgement that the
petitioner had been guilty of unfair labor practice. The Court of Appeals affirmed the findings of the former.

Issues: (1) whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it
unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon mere
information that a petition for certification has been filed by another legitimate labor organization; (2) whether
or not the suspension of the negotiation was proper since the authority of the union to negotiate on behalf of
the employees was challenged when a rival union filed a petition for certification election; and (3) whether
the termination of the union president amounts to an interference of the employees’ right to self-organization.

Ruling:
1. YES. Article 252 of the Labor Code defines the meaning of the phrase “duty to bargain collectively,” as
follows:

Art. 252. Meaning of duty to bargain collectively.—The duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement with respect to wages, hours of work and all other
terms and conditions of employment including proposals for adjusting any grievances or questions
arising under such agreement and executing a contract incorporating such agreements if re-
quested by either party but such duty does not compel any party to agree to a proposal or to
make any concession.

Noteworthy in the above definition is the requirement on both parties of the performance of the mutual
obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement. Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL) lived up
to this requisite when it presented its proposals for the CBA to petitioner on February 7, 1996. On the
other hand, petitioner devised ways and means in order to prevent the negotiation.

Petitioner’s utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply
to the proposals presented by the latter. More than a month after the proposals were submitted by the
union, petitioner still had not made any counter-proposals. This inaction on the part of petitioner prompted
the union to file its second notice of strike on March 13, 1996. Petitioner could only offer a feeble expla-
nation that the Board of Trustees had not yet convened to discuss the matter as its excuse for failing to
file its reply. This is a clear violation of Article 250 of the Labor Code governing the procedure in collective
bargaining, x x x. As we have held in the case of Kiok Loy vs. NLRC, the company’s refusal to make
counter-proposal to the union’s proposed CBA is an indication of its bad faith. Where the employer did not
even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the
duty to bargain collectively. In the case at bar, petitioner’s actuation shows a lack of sincere desire to
negotiate rendering it guilty of unfair labor practice.

It is also the contention of the petitioner that by the filing of the petition for certification election the issue
on majority representation of the employees has arose. According to petitioner,

2. NO. In order to allow the employer to validly suspend the bargaining process there must be a valid petition
for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for
certification election does not ipso facto justify the suspension of negotiation by the employer. The petition
must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost is that a
petition for certification election must be filed during the sixty-day freedom period. The “Contract Bar
Rule” under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides
that: “If a collective bargaining agreement has been duly registered in accordance with Article 231 of the
Code, a petition for certification election or a motion for intervention can only be entertained within sixty
(60) days prior to the expiry date of such agreement.” The rule is based on Article 232, in relation to
Articles 253, 253-A and 256 of the Labor Code. No petition for certification election for any representation
issue may be filed after the lapse of the sixty-day freedom period. The old CBA is extended until a new
one is signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still considers
the same as continuing in force and effect until a new CBA shall have been validly executed. Hence, the
contract bar rule still applies. The purpose is to ensure stability in the relationship of the workers and the
company by preventing frequent modifications of any CBA earlier entered into by them in good faith and
for the stipulated original period.

In the case at bar, the lifetime of the previous CBA was from 1989-1994. The petition for certification
election by ACEC, allegedly a legitimate labor organization, was filed with the Department of Labor and
Employment (DOLE) only on May 26, 1996. Clearly, the petition was filed outside the sixty-day freedom
period. Hence, the filing thereof was barred by the existence of a valid and existing collective bargaining
agreement. Consequently, there is no legitimate representation issue and, as such, the filing of the petition
for certification election did not constitute a bar to the ongoing negotiation.

3. YES. The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was
dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the
bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten (10)
years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years her
 working schedule was from Monday to Friday. However, things began to change when she was elected as
union president and when she started negotiating for a new CBA. Thus, it was when she was the union
president and during the period of tense and difficult negotiations when her work schedule was altered
from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was
changed, she was outrightly dismissed for alleged insubordination.

CASE NO. 17
G.R. No. 77282. May 5, 1989. *

ASSOCIATED LABOR UNIONS (ALU), petitioner, vs. HON. PURA FERRER-CALLEJA, as Director of
the Bureau of Labor Relations, Ministry of Labor and Employment; PHILIPPINE SOCIAL SECU-
RITY LABOR UNION (PSSLU); SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL); and
GAW TRADING, INC., respondents.

TOPIC: Defective CBA

FACTS:

Petitioner ALU instituted this special civil action for certiorari and prohibition to overturn the decision of the
respondent director which ordered the holding of a certification election among the rank-and-file workers of
the private respondent GAW Trading, Inc.

Facts showed that ALU informed GAW Trading, Inc. that majority of the latter’s employees have authorized
ALU to be their sole and exclusive bargaining representative, and requested GAW Trading Inc., in the same
Letter for a conference for the execution of an initial CBA. GAW Trading Inc. responded indicating its recogni-
tion of ALU as the sole and exclusive bargaining agent for the majority of its employees.

Thereafter, ALU in behalf of the majority of the employees of GAW Trading Inc. and GAW Trading Inc. signed
and executed the CBA.

Now, GAW Lumad Labor Union (GALLU-PSSLU) Federation filed a Certification Election petition.

In the meantime, the Collective Bargaining Agreement executed by ALU and GAW Trading Inc. was duly filed.
Nevertheless, Med-Arbiter ruled for the holding of a certification election in all the branches of GAW Trading
Inc. in Cebu City, as to which ALU filed a Motion for Reconsideration dated which was treated as an appeal on
that questioned Order for which reason the entire record of subject certification case was forwarded to the
Director, Bureau of Labor Relations.

Public respondent ordered the holding of a certification election, ruling that the “contract bar rule” relied upon
by her predecessor does not apply in the present controversy. According to the decision of said respondent,
the collective bargaining agreement involved herein is defective because it “was not duly submitted in accord-
ance with Section I, Rule IX , Book V of the Implementing Rules of Batas Pambansa Blg. 130.” It was further
observed that “(t)here is no proof tending to show that the CBA has been posted in at least two conspicuous
places in the establishment at least five days before its ratification and that it has been ratified by the majority
of the employees in the bargaining unit.”

ISSUE: Whether or not the collective bargaining agreement is defective, hence no legal effect, that is the
contract bar rule did not set in.

HELD. YES.
A careful consideration of the facts culled from the records of this case, especially the allegations of petitioner
itself as hereinabove quoted, yields the conclusion that the collective bargaining agreement in ques-
tion is indeed defective, hence unproductive of the legal effects attributed to it by the former
director in his decision which was subsequently and properly reversed.

We have previously held that the mechanics of collective bargaining are set in motion only when the following
jurisdictional preconditions are present, namely, (1) possession of the status of majority representation by the
employees’ representative in accordance with any of the means of selection and/or designation provided for
by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251,
paragraph (a), of the New Labor Code. 4 In the present case, the standing of petitioner as an exclusive
bargaining representative is dubious, to say the least. It may be recalled that respondent company, in a letter
dated May 12, 1986 and ad dressed to petitioner, merely indicated that it was “not against the desire of (its)
workers” and required petitioner to present proof that it was supported by the majority thereof in a meeting
to be held on the same date. 5 The only express recognition of petitioner as said employees’ bargaining
representative that We see in the records is in the collective bargaining agreement entered into two days
thereafter. Evidently, there was precipitate haste on the part of respondent company in recogniz-
ing petitioner union, which recognition appears to have been based on the self-serving claim of
the latter that it had the support of the majority of the employees in the bargaining unit. Further-
more, at the time of the supposed recognition, the employer was obviously aware that there were other unions
existing in the unit. As earlier stated, respondent company’s letter is dated May 12, 1986 while the two other
unions, Southern Philippine Federation of Labor (hereafter, SPFL) and Philippine Social Security Labor Union
(PSSLU, for short), went on strike earlier on May 9, 1986. The unusual promptitude in the recognition of
petitioner union by respondent company as the exclusive bargaining representative of the workers in GAW
Trading, Inc. under the fluid and amorphous circumstances then obtaining, was decidedly unwarranted and
improvident.

It bears mention that even in cases where it was the then Minister of Labor himself who directly
certified the union as the bargaining representative, this Court voided such certification where
there was a failure to properly determine with legal certainty whether the union enjoyed a ma-
jority representation. In such a case, the holding of a certification election at a proper time would
not necessarily be a mere formality as there was a compelling reason not to directly and unilat-
erally certify a union.

An additional infirmity of the collective bargaining agreement involved was the failure to post the same in
at least two (2) conspicuous places in the establishment at least five days before its ratification. 8 Petitioner’s
rationalization was that “(b)ecause of the real existence of the illegal strike staged by SPFL in all the stores of
GAW Trading, Inc. it had become impossible to comply with the posting requirement in so far as the realization
of its purpose is concerned as there were no impartial members of the unit who could be apprised of the CBA’s
contents.” This justification is puerile and unacceptable.

In the first place, the posting of copies of the collective bargaining agreement is the responsibility of the
employer which can easily comply with the requirement through a mere mechanical act. The fact that there
were “no impartial members of the unit” is immaterial. The purpose of the requirement is precisely to inform
the employees in the bargaining unit of the contents of said agreement so that they could intelligently decide
whether to accept the same or not. The assembly of the members of ALU wherein the agreement in question
was allegedly explained does not cure the defect. The contract is intended for all the employees and not only
for the members of the purported representative alone. It may even be said that the need to inform the non-
members of the terms thereof is more exigent and compelling since, in all likelihood, their contact with the
persons who are supposed to represent them is limited. Moreover, to repeat, there was an apparent and
suspicious hurry in the formulation and finalization of said collective bargaining accord. In the aforementioned
letter where respondent company required petitioner union to present proof of its support by the employees,
the company already suggested that petitioner ALU at the same time submit the proposals that it intended to
embody in the projected agreement. This was on May 12, 1986, and promptly on the following day the nego-
tiating panel furnished respondent company final copies of the desired agreement which, with equal dispatch,
was signed on May 15, 1986.

Another potent reason for annulling the disputed collective bargaining agreement is the finding
of respondent director that one hundred eighty-one (181) of the two hundred eighty-one (281)
workers who “ratified” the same now “strongly and vehemently deny and/or repudiate the al-
leged negotiation and ratification of the CBA.” Although petitioner claims that only seven (7) of
the repudiating group of workers belong to the total number who allegedly ratified the agree-
ment, nevertheless such unsubstantiated contention weighed against the factual findings of the
respondent director cannot negate the fact that the controverted contract will not promote in-
dustrial stability. The Court has long since declared that:

“x x x Basic to the contract bar rule is the proposition that the delay of the right to select representatives can
be justified only where stability is deemed paramount. Excepted from the contract bar rule are certain types
of contracts which do not foster industrial stability, such as contracts where the identity of the representative
is in doubt. Any stability derived from such contracts must be subordinated to the employees’ freedom of
choice because it does not establish the type of industrial peace contemplated by the law.” ###

Case#18 Kiok Loy vs. NLRC Jan. 22 1986

Topic: Unfair Labor Practice for Refusal to Bargain

KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN), respond-
ents.

G.R. No. L-54334 January 22, 1986

FACTS:
The Pambansang Kilusang Paggawa, a legitimate late labor federation, won and was subsequently certified
in a resolution by the Bureau of Labor Relations as the sole and exclusive bargaining agent of the rank-and-
file employees of Sweden Ice Cream Plant. The Union furnished the Company with two copies of its proposed
collective bargaining agreement. At the same time, it requested the Company for its counter proposals. Both
requests were ignored and remained unacted upon by the Company.

Thereafter, the Union filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unre-
solved economic issues in collective bargaining. Conciliation proceedings then followed during the thirty-day
statutory cooling-off period. But all attempts towards an amicable settlement failed.

The case was brought to the National Labor Relations Commission (NLRC) for compulsory arbitration pursu-
ant to Presidential Decree No. 823, as amended. But the Company requested for a lot of postponements.
NLRC ruled that respondent Sweden Ice Cream is guilty of unjustified refusal to bargain, in violation of Section
(g) Article 248 (now Article 249), of P.D. 442, as amended.

ISSUE:
Whether the Company is guilty of unfair labor practice for refusal to bargain.

HELD:
YES. Collective bargaining is one of the democratic frameworks under the New Labor Code, designed to sta-
bilize the relation between labor and management and to create a climate of sound and stable industrial
peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation.

Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse "to meet
and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with
respect to wages, hours of work, and all other terms and conditions of employment including proposals for
adjusting any grievance or question arising under such an agreement and executing a contract incorporating
such agreement, if requested by either party.
The mechanics of collective bargaining are set in motion only when the following jurisdictional preconditions
are present, namely,
(1) possession of the status of majority representation of the employees' representative in accord-
ance with any of the means of selection or designation provided for by the Labor Code;
(2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New Labor Code.

A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may
indicate bad faith since the Union's request for a counter proposal is left unanswered. Besides, petitioner
Company's approach and attitude-stalling the negotiation by a series of postponements, non-appearance at
the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion
except that it is unwilling to negotiate and reach an agreement with the Union.

CASE NO. 19
LAKAS VS Marcelo Enterprises

No. L-38258. November 19, 1982.*

LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS), petitioner, vs. MARCELO ENTERPRISES and

MARCELO TIRE & RUBBER CORP., MARCELO RUBBER AND LATEX PRODUCTS, MARCELO STEEL
CORPORATION, MARCELO CHEMICAL & PIGMENT CORP., POLARIS MARKETING CORPORATION
and THE COURT OF INDUSTRIAL RELATIONS, respondents.
No. L-38260. November 19, 1982.*

MARCELO TIRE & RUBBER CORPORATION, MARCELO RUBBER & LATEX PRODUCTS, INC., MAR-
CELO STEEL CORPORATION, POLARIS MARKETING CORPORATION, MARCELO CHEMICAL AND
PIGMENT CORP., MARCELO ENTERPRISES, under which name or style they are also known, pe-
titioners, vs. LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS) AND THE HONORABLE COURT
OF INDUSTRIAL RELATIONS, respondents.

TOPIC:
Bargaining with Minority Union, U L P
Where a majority representative has been designated, it is an unfair labor
practice, [for the employer] as a refusal of collective bargaining, to deal and
negotiate with the minority representative to the exclusion of the majority
representative. And even though no majority representative has been designated, one who bargains with
a minority representative does so at his peril since the subsequent appearance of a properly designated
majority representative may oblige the employer to negotiate with the latter despite the antecedent ne-
gotiations with or commitments to the minority representative.
On the union side, where there exists a legitimate issue as to which of
several unions is the legitimate representative of employees, it is ULP for one of
the unions to stage a strike and demand that the employer sit down with it for
collective bargaining.

FACTS:
On May 23, 1967, the Lakas had existing CBAs within the bargaining units in the re-
spective companies comprising Marcelo Companies. The said CBAs were entered into
while they were affiliated with a national federation, Phil Social Security Labor Union.
Two of the CBAs were about to expire in May and June 1967. The other one faced
conflict as there was a rival union.

On March 14, 1967, the management of Marcelo Steel received a letter requesting ne-
gotiation of a new CBA from PSSLU in behalf of UNWU. There were also proposals
from the unions in Marcelo Tire and Marcelo Rubber as the existing CBA was about to
expire. Same day, the union Marcelo Tire disauthorized PSSLU as their agent. After-
wards, the rival union submitted its own proposals. Another requests were received on
May 3, 1967 and May 23, 1967 from two different unions.

As the management was confused as to which of the union really represents the work-
ers, the president asked for the proof of authorization from the unions and they were
informed of the conflicting claims and suggested that they file for certification election
and the decision of the court shall be followed and respected.

PSSLU refused the suggestion of the management and said that they will file ULP for
refusing to bargain with them. All of the unuons subsequently filed a Notice of Strike.
MUEWA was certified as the bargaining agent as it represents the majority of the
workers in Marcelo Tire and that there were no oppositions from the other union or in-
terested persons.
Notices of Strike were withdrawn and the management agreed to sit down in a confer-
ence for the bargaining. On the fourth conference, Lakas declared a strike against
Marcelo Companies. Acts of violence and vandalism attended by picketing, the prem-
ises were blocked, windows of the plants were badly damaged. Cases were filed
against the strikers and a Return to Work order was agreed upon. Marcelo Companies
resumed its operations and strikers went back to work.
Marcelo Companies and Lakas resumed their bargaining negotiations.
On Oct. 13, 1967 the negotiations reached its final stage. Then Lakas declared an-
other strike without filing a notice of strike resulting to complete paralyzation of the
business.
Notices to return to work were posted and some of the strikers started working again.
The management required the workers to fill up forms so that they may be given a
schedule. However, the workers refused and insisted that they be admitted without
complying to the said requirement.
Lakas then filed a ULP case based on the alleged fact of non readmission of striking
members.
The trial court ruled that the Marcelo Companies were not remiss in their obligation to
bargain and that the strikes conducted were illegal. However, it was decided that
there was ULP in not readmitting all the strikers.

ISSUE:

Whether or not Marcelo Companies are guilty of ULP

RULING:

NO, the SC ruled in favor of Marcelo Companies. Lakas was not the bargaining repre-
sentative, yet the management did not ignore the demand for collective bargaining
neither it was refused.
Marcelo Companies may rightfully demand for reasonable proof of majority represen-
tation on the part of the supposed or putative bargaining agent as it is a natural con-
sequence of the employer’s duty to bargain with the bargaining agent who represents
the majority of the workers. It is, however, necessary that such demand is made in
good faith and not as a pretext of delay or evasion.
Marcelo Companies did not commit ULP. The facts of the case shows that the strikers
were readmitted to work and the form required was intended for proper scheduling
and not to prevent workers from coming back to work. It is only those who did not re-
port back to work who are not readmitted.
The clear facts of the case indisputably show that a legitimate representation
issue confronted the respondent Marcelo Companies. In the face of these facts and in
conformity with the existing jurisprudence, We hold that there existed no duty to bar-
gain collectively with the complainant LAKAS on the part of said companies. And pro-
ceeding from this basis, it follows that all acts instigated by complainant LAKAS such
as the filing of the Notice of Strike on June 13, 1967 (although later withdrawn) and
the two strikes of September 4, 1967 and November 7, 1967 were calculated, de-
signed and intended to compel the respondent Marcelo Companies to recognize or
bargain with it notwithstanding that it was an uncertified union, or in the case of re-
spondent Marcelo Tire and Rubber Corporation, to bargain with it despite the fact that
the MUEWA of Paulino Lazaro was already certified as the sole bargaining agent in
said respondent company.
These concerted activities, executed and carried into effect at the instigation
and motivation of LAKAS, are all illegal and violative of the employer's basic right to
bargain collectively only with the representative supported by the majority of its em-
ployees in each of the bargaining units.

CASE 20

Capitol Medical Center vs. Trajano

Facts: The respondent union, through its president Jaime N. Ibabao, sent petitioner a letter requesting a
negotiation of their Collective Bargaining Agreement (CBA).

In its reply dated October 10, 1997, petitioner, challenging the union’s legitimacy, refused to bargain with
respondent. Subsequently or on October 15, 1997, petitioner filed with the Bureau of Labor Relations (BLR),
Department of Labor and Employment, a petition for cancellation of respondent’s certificate of registration.

For its part, on October 29, 1997, respondent filed with the National Conciliation and Mediation Board (NCMB),
National Capital Region, a notice of strike. Respondent alleged that petitioner’s refusal to bargain constitutes
unfair labor practice. Despite several conferences and efforts of the designated conciliator-mediator, the par-
ties failed to reach an amicable settlement. Thus, respondent staged a strike.

On December 4, 1997, former Labor Secretary Leonardo A. Quisumbing, now Associate Justice of this Court,
issued an Order assuming jurisdiction over the labor dispute and ordering all striking workers to return to work
and the management to resume normal operations, thus:

Meantime, the Regional Director issued an Order denying the petition for cancellation of respondent union’s
certificate of registration.

On September 20, 2001, the Appellate Court rendered a Decision affirming the Orders of the Secretary of
Labor. The Court of Appeals held:

xxxxxx

In order to allow an employer to validly suspend the bargaining process, there must be a valid petition
for certification election. The mere filing of a petition does not ipso facto justify the suspension of
negotiation by the employer (Colegio de San Juan de Letran vs. Association of Employees and Faculty
of Letran and Eleanor Ambas, G.R. No. 141471, September 18, 2000). If pending a petition for certi-
fication, the collective bargaining is allowed by the Supreme Court to proceed, with more reason
should the collective bargaining (in this case) continue since the High Court had recognized the re-
spondent as the certified bargaining agent in spite of several petitions for cancellation filed against it.

xxxxxx

Issues: (1) Whether the petition for the cancellation of respondent union’s certificate of registration
involves a prejudicial question that should first be settled before the Secretary of Labor could order the
parties to bargain collectively; and (2) whether or not the Secretary of Labor may assume jurisdiction over
the case without the necessity of prior notice or hearing given to any of the parties.

Ruling:

1. NO. As aptly stated by the Solicitor General in his comment on the petition, the Secretary of Labor cor-
rectly ruled that the pendency of a petition for cancellation of union registration does not preclude collec-
tive bargaining, thus:

"That there is a pending cancellation proceedings against the respondent Union is not a bar to
set in motion the mechanics of collective bargaining. If a certification election may still be ordered
despite the pendency of a petition to cancel the union’s registration certificate (National Union of
Bank Employees vs. Minister of Labor, 110 SCRA 274), more so should the collective bargaining
process continue despite its pendency. We must emphasize that the majority status of the re-
spondent Union is not affected by the pendency of the Petition for Cancellation pending against
it. Unless its certificate of registration and its status as the certified bargaining agent are revoked,
the Hospital is, by express provision of the law, duty bound to collectively bargain with the Union.
Indeed, no less than the Supreme Court already ordered the Hospital to collectively bargain with
the Union when it affirmed the resolution of this Office dated November 18, 1994 directing the
management of the Hospital to negotiate a collective bargaining agreement with the Union. That
was the categorical directive of the High Court in its Resolution dated February 4, 1997 in Capitol
Medical Center Alliance of Concerned Employees-United Filipino Service Worker vs. Hon. Bien-
venido E. Laguesma, et al., G.R. No. L-118915."

Moreover, as mentioned earlier, during the pendency of this case before the Court of Appeals, the
Regional Director, in NCR-OD-9710-006-IRD, issued an Order on October 1, 1998 denying the petition
for cancellation of respondent’s certificate of registration. This Order became final and executory and
recorded in the BLR’s Book of Entries of Judgments on June 3, 1999

2. In Magnolia Poultry Employees Union vs. Sanchez, we held that the discretion to assume jurisdiction
may be exercised by the Secretary of Labor and Employment without the necessity of prior notice or
hearing given to any of the parties. The rationale for his primary assumption of jurisdiction can justi-
fiably rest on his own consideration of the exigency of the situation in relation to the national interests.

——o0o——

Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give
up (Galatians 6:9)

CASE NO. 21
G.R. No. 91915. September 11, 1992.*
DIVINE WORD UNIVERSITY OF TACLOBAN, petitioner, vs. SECRETARY OF LABOR AND EMPLOY-
MENT and DIVINE WORD UNIVERSITY EMPLOYEES UNION-ALU, respondents.

TOPIC: When is there a deadlock; When can a certification election be filed

FACTS:

In 1984, Divine Word University Employees Union (DWUEU) was certified as the sole and exclusive bargaining
agent of the Divine Word University (University). In 1985, DWUEU submitted its collective bargaining pro-
posals. The University replied and requested a preliminary conference. However, such conference was can-
celled because the vice president of DWUEU sent a letter to the University unilaterally withdrawing the CBA
proposals.

After almost three years, or in 1988, DWUEU, which had by then affiliated with ALU, requested a conference
with the University to continuing the collective bargaining negotiations. The University did not answer.
DWUEU-ALU filed a notice of strike on grounds of deadlock. A conference was then made after the notice. An
agreement was executed.

However, it turned out that an hour before the agreement was concluded, the University had filed a petition
for certification election with DOLE. On the other hand, DWUEU-ALU, consonant with the agreement, submit-
ted its collective bargaining proposals. These were ignored by the University. The employees then proceeded
with the strike, over which the Secretary of labor assumed jurisdiction, to settle the matter. Now, the university
insist on an order to conduct a certification election.

ISSUE: Whether or not a deadlock exist; Whether or not a certification election should have been ordered.

HELD: NO.

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

(For further reading):

When employer can file a certification Election

“ART. 258. When an employer may file petition.—When requested to bargain collectively, an employer may
petition the Bureau for an election. If there is no existing certified collective bargaining agreement in the unit,
the Bureau shall, after hearing, order a certification election.

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

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and
regulations prescribed by the Secretary of Labor.

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

If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60) days
prior to the expiry date of such agreement.”

These provisions make it plain that in the absence of a collective bargaining agreement, an employer who is
requested to bargain collectively may file a petition for certification election any time except upon a clear
showing that one of these two instances exists: (a) the petition is filed within one year from the date of
issuance of a final certification election result or (b) when a bargaining deadlock had been submitted to con-
ciliation or arbitration or had become the subject of a valid notice of strike or lockout.

While there is no question that the petition for certification election was filed by the herein petitioner after
almost four years from the time of the certification election and, therefore, there is no question as to the
timeliness of the petition, the problem appears to lie in the fact that the Secretary of Labor had found that a
bargaining deadlock exists.

Deadlock (Note, that there is not finding of deadlock in the case at bar)
A “deadlock” is defined as the “counteraction of things producing entire stoppage: a state of inaction or of
neutralization caused by the opposition of persons or of factions (as in government or a voting body): stand-
still.” There is a deadlock when there is a “complete blocking or stoppage resulting from the action of equal
and opposed forces; as, the deadlock of a jury or legislature.” The word is synonymous with the word impasse
which, within the meaning of the American federal labor laws, “presupposes reasonable effort at good faith
bargaining which, despite noble intentions, does not conclude in agreement between the parties.”

A thorough study of the records reveals that there was no “reasonable effort at good faith bargaining” specially
on the part of the University. Its indifferent attitude towards collective bargaining inevitably resulted in the
failure of the parties to arrive at an agreement. As it was evident that unilateral moves were being undertaken
only by the DWUEU-ALU, there was no “counteraction” of forces or an impasse to speak of. While collective
bargaining should be initiated by the union, there is a corresponding responsibility on the part of the employer
to respond in some manner to such acts.

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

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

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

END