G.R.

1982

No.

L-38258 MANGGAGAWANG

November MAKABAYAN

19, (LAKAS),

LAKAS NG 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,

G.R. 1982

No.

L-38260

November

19,

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

GUERRERO, J.:

Separate appeals by certiorari from the Decision of the Court of Industrial Relations (Manila) dated July 20, 1973, as well as the Resolution of the court en banc dated January 24, 1974 denying the reconsideration thereof rendered in ULP Case No. 4951 entitled, "Lakas ng Manggagawang Makabayan, Petitioner, versus Marcelo Enterprises and Marcelo Tire and Rubber Corporation, Marcelo Rubber and Latex Products, Marcelo Steel Corporation, Polaris Marketing Corporation, and Marcelo Chemical and Pigment Corporation, Respondents. "

The antecedent facts as found by the respondent Court of Industrial Relations embodied in the appealed Decision are correct, supported as they are by the evidence on record. Nevertheless, We find it necessary to make a re-statement of the facts that are integrated and inter-related, drawn from the voluminuous records of these cases which are herein jointly decided, since it would only be from a statement of all the relevant facts of the cases made in all fullness, collectively and comprehensively, can the intricate issues posed in these appeals be completely and judiciously resolved.

It appears that prior to May 23, 1967, the date which may be stated as the start of the labor dispute between Lakas ng Manggagawang Makabayan (hereinafter referred to as complainant LAKAS) and the management of the Marcelo Tire and Rubber Corporation, Marcelo Rubber and Latex Products, Inc., Polaris Marketing Corporation, Marcelo Chemical and Pigment Corporation, and the Marcelo Steel Corporation (Nail Plan) (hereinafter referred to as respondent Marcelo Companies) the Marcelo Companies had existing collective bargaining agreements (CBAs) with the local unions then existing within the appropriate bargaining units, viz: (1) the respondent Marcelo Tire and Rubber Corporation, with the Marcelo Camelback Tire and Foam Union (MACATIFU); (2) the respondent Marcelo Rubber and Latex Products, Inc., with the Marcelo Free Workers Union (MFWU); and (3) the respondent Marcelo Steel Corporation with the United Nail Workers Union (UNWU). These existing CBAs were entered into by and between the parties while the aforestated local unions were then affiliated with a national federation, the Philippine Social Security Labor Union (PSSLU). It is well to note from the records that when the aforestated CBAs of the said local unions were nearing their respective expiration dates (March 15,1967) for MACATIFU and UNWU, and June 5, 1967 for MFWU), the general situation within the ranks of labor was far from united. The MACATIFU in respondent Marcelo Tire and Rubber Corporation, then headed by Augusto Carreon, did not enjoy the undivided support of all the workers of the respondent corporation, as there existed a rival union, the Marcelo United Employees and Workers Association (MUEWA) whose president was then Paulino Lazaro. As events would later develop, the members of the MACATIFU of Augusto Carreon joined the MUEWA of Paulino Lazaro, after the latter filed a petition for direct certification which was granted by the industrial court's Order of July 5, 1967 recognizing and certifying MUEWA as the sole and exclusive bargaining representative of all the

regular workers of the respondent corporation. The union rivalry between MACATIFU and MUEWA did not, however, end with the Order of July 5. 1967, but more than ever developed into a more pressing problem of union leadership because Augusto Carreon also claimed to be the president of the MUEWA by virtue of the affiliation of his MACATIFU members with MUEWA. The records also reveal that even the ranks of MFWU in respondent Marcelo Rubber and Latex Products, Inc. was divided between those supporting Ceferino Ramos and Cornelio Dizon who both claimed the presidency in said union. Only the UNWU in respondent Marcelo Steel Corporation was then enjoying relative peace as Jose Roque was solely recognized as the union's president. The events that followed are hereinafter stated in chronological order for a clearer understanding of the present situation.

On March 14, 1967, the management of respondent Marcelo Steel Corporation received a letter requesting the negotiation of a new CBA together with a draft thereof, from the PSSLU president, Antonio Diaz, for and in behalf of UNWU whose CBA was to expire the following day. Similar letters and proposals were, likewise, sent to the management of respondent Marcelo Tire and Rubber Corporation for and in behalf of MACATIFU, and to respondent Marcelo Rubber and Latex Products for and in behalf of MFWU, whose respective CBAs were both to expire on June 5, 1967.

However, on that very same day of March 14, 1967, the management of respondent Marcelo Tire and Rubber Corporation received a letter from the UNWU president, Jose Roque, disauthorizing the PSSLU from representing his union.

Then, on April 14, 1967, Paulino Lazaro of MUEWA requested negotiation of a new CBA with respondent Marcelo Tire and Rubber Corporation, submitting therewith his union's own proposals.

Again, on May 3, 1967, the management of respondents Marcelo Tire and Rubber Corporation and Marcelo Rubber and Latex Products, Inc., received another letter requesting negotiation of new CBAs also for and in behalf of the MACATIFU and the MFWU from J.C. Espinas & Associates.

Finally, on May 23, 1967, the management of all the respondent Marcelo Companies received a letter from Prudencio Jalandoni, the alleged president of the complainant LAKAS. In this letter of May 23, 1967, the complainant LAKAS informed

management of the affiliation of the Marcelo United Labor Union (MULU) with it. Included therein was a 17-points demand for purposes of the requested collective bargaining with management.

Confronted with a problem of whom to recognize as the bargaining representative of all its workers, the management of all the respondent Marcelo Companies understandably dealt with the problem in this wise, viz: (1) it asked proof of authority to represent the MFWU and the MACATIFU from J.C. Espinas & Associates; and (2) in a letter dated May 25, 1967, it apprised PSSLU, Paulino Lazaro of MUEWA and complainant LAKAS of the fact of the existing conflicting demands for recognition as the bargaining representative in the appropriate units involved, consequently suggesting to all to settle the question by filing a petition for certification election before the Court of Industrial Relations, with an assurance that the management will abide by whatever orders the industrial court may issue thereon.

PSSLU demurred to management's stand and informed them of its intention to file an unfair labor practice case because of management's refusal to bargain with it, pointedly stating that it was with the PSSLU that the existing CBAs were entered into. Again, as events later developed, on or about the middle of August 1981, PSSLU filed a Notice of Strike which became the subject of conciliation with the respondent companies. In the case of MUEWA, Paulino Lazaro threatened that his union will declare a strike against respondent Marcelo Tire and Rubber Corporation. On the other hand, complainant LAKAS for MULU filed on June 13, 1967 before the Bureau of Labor Relations a Notice of Strike against all the respondent Marcelo Companies, alleging as reasons therefore harrassment of union officers and members due to union affiliation and refusal to bargain. This aforestated Notice of Strike was, however, withdrawn on July 14, 1967.

In the meantime, as stated earlier in this Decision, the MUEWA filed a petition for direct certification before the industrial court. There being no other union or interested person appearing before the court except the MUEWA, and finding that MUEWA represented more than the majority of the workers in respondent Marcelo Tire and Rubber Corporation, the court granted the petition and by Order of July 5, 1967, certified MUEWA of Paulino Lazaro as the sole and exclusive bargaining representative of all the regular workers in said respondent.

On July 11, 1967, Augusto Carreon of MACATIFU wrote the management of respondent Marcelo Tire and Rubber Corporation expressly stating that no one was yet authorized to submit proposals for and in behalf of the union for the renewal of its CBA, adding that "(a)ny group representing our Union is not authorized and should not be entertained."

On July 14, 1967, as earlier stated, the Notice of Strike filed by complainant LAKAS was withdrawn pursuant to a Memorandum Agreement signed on the same day by management and LAKAS.

Thereafter, or on July 20, 1967, letters of proposal for collective bargaining were sent by Prudencio Jalandoni of LAKAS to all the respondent Marcelo companies. In answer thereto, management wrote two (2) letters, both dated July 24, 1967, addressed to Jalandoni, expressing their conformity to sit down in conference on the points to be negotiated as soon as LAKAS can present evidence of authority to represent the employees of respondent corporations in said conference. The records disclose that it was in the atmosphere of constant reservation on the part of management as to the question of representation recognition that complainant LAKAS and management sat down for CBA negotiations.

The first conference was held on August 14, 1967, followed by one on August 16, 1967 whereby management, in formal reply to union's economic demands, stated its willingness to give pay adjustments and suggested renewal of other provisions of the old CBAs. A third conference was set although no one from LAKAS or the local unions appeared. On August 29, 1967, the fourth conference was held where, from a letter dated August 30, 1967 from Jose Delfin of Management to Jose B. Roque of UNWU, can be inferred that in the conference of August 29, 1967, the management with respect to respondent Marcelo Steel Corporation, agreed to give pay adjustments from P0.15 to P0.25 to meritorious cases only, and to increase its contribution to the retirement fund from 1-1/2% to 3% provided the employees' contribution will be increased from 1% to 2%. Management likewise suggested the renewal of the other provisions of the existing CBA. Management's offers were not accepted by complainant LAKAS who insisted on the grant of all its economic demands and in all of the Marcelo Companies.

As it would later appear during the trial of the ULP case below, and as found as a fact by the respondent court, only the economic proposals of complainant LAKAS were the matters taken up in all these CBA conferences.

Less than a week after the fourth CBA conference, or on September 4, 1967, the complainant LAKAS declared a strike against all the respondent Marcelo Companies. Acts of violence and vandalism attended the picketing. Ingress and egress at the respondents' premises were successfully blocked. One worker, Plaridel Tiangco, was manhandled by the strikers and was hospitalized. Windows of the Chemical Plant were badly damaged. As a consequence, ten (10) strikers were later charged before the Municipal Court of Malabon, Rizal, four of whom were convicted while the others were at large.

On September 13, 1967, the respondent Marcelo Companies obtained a writ of preliminary injunction from the Court of First Instance of Rizal enjoining the strikers from preventing the ingress and egress at the respondents' premises. The following day, a "Return to Work Agreement" (Exhibit "A") was executed by and among the management, represented by Jose P. Marcelo and Jose A. Delfin, and the local unions, together with complainant LAKAS, represented by Prudencio Jalandoni for LAKAS, Jose B. Roque for UNWU, Cornelio Dizon for MFWU and Augusto Carreon for MUEWA, the representations of the latter two, however, being expressly subjected by management to non-recognition. Aside from providing for the immediate lifting of the picket lines, the agreement, more pertinently provides, to wit,

4. The management agrees to accept all employees who struck without discrimination or harassment consistent with an orderly operation of its various plants, provided it is understood that management has not waived and shall continue to exercise freely its rights and prerogatives to punish, discipline and dismiss its employees in accordance with law and existing rules and regulations that cases filed in court will be allowed to take their normal course.

By virtue of this agreement, the respondent Marcelo Companies resumed operations and the strikers went back to work. As found by the respondent court, all strikers were admitted back to work, except four (4) namely, Wilfredo Jarquio, Leonardo Sakdalan, Jesus Lim and Arlington Glodeviza, who chose not to report for work because of the criminal charges filed against them before the municipal court of Malabon and because of the administrative investigation conducted by

management in connection with the acts of violence and vandalism committed during the September 4 strike. Together with Jesus Lim, three other strikers who reported for work and were admitted, namely, Jose Roque, Alfredo Cabel and Ramon Bataycan, were convicted in said criminal case.

After the resumption of normal business, the management of the respondent Marcelo Companies, the complainant LAKAS together with the local unions resumed their bargaining negotiations subject to the conditions earlier mentioned. On October 4, 1967, the parties met and discussed the bargaining unit to be covered by the CBA in case one is entered into, union shop arrangement, check-off, waiver of the employer of the notice requirement in case of employees' separation, separation pay in cash equivalent to 12-days pay for every year of service, retirement plan, and one or two years duration of the CBA. It was also agreed in that meeting not to negotiate with respect to respondent Marcelo Tire and Rubber Corporation inasmuch as a CBA had already been entered into by management with the MUEWA of Paulino Lazaro, the recently certified union in said respondent.

Finally, on October 13, 1967, the negotiations reached its final stage when the management of respondents Marcelo Rubber and Latex Products, Inc. and Marcelo Steel Corporation gave the complainant LAKAS a copy of management's drafts of the collective bargaining proposals for MFWU and UNWU, respectively.

Unexpectedly and without filing a notice of strike, complainant LAKAS declared another strike against the respondent Marcelo Companies on November 7, 1967, resulting in the complete paralyzation of the business of said respondents. Because of this second strike, conciliation conferences were again set by the Conciliation Service Division of the Department of Labor on November 8, November 23, and December 4, 1967. On the last aforementioned date, however, neither complainant LAKAS nor the local unions appeared.

Instead, on December 13, 1967, Prudencio Jalandoni of complainant LAKAS, in behalf of the striking unions, coursed a letter (Exhibit "B") to Jose P. Marcelo of management advising that, "on Monday, December 18, 1967, at 7:00 o'clock in the morning, all your striking workers and employees will return to work under the same terms and conditions of employment before the strike." The letter was attested to by Cornelio Dizon for MFWU, Jose Roque for UNWU and Augusto Carreon for MUEWA. On December 15,1967, the Bureau of Labor Relations was informed by

the complainant LAKAS who requested for the Bureau's representative to witness the return of the strikers to their jobs.

The records reveal that in the meantime, prior to December 13, 1967, some of the strikers started going back to work and were admitted; and that as early as December 4, 1967, the management started posting notices at the gates of the respective premises of the respondents for strikers to return back to work, Similar notices were also posted on December 18 and December 27, 1967.

Upon their return, the reporting strikers were requested to fill up a certain form (Exhibit "49") wherein they were to indicate the date of their availability for work in order that they may be scheduled. According to the respondent Marcelo Companies, this requirement was asked of the strikers for legitimate business reasons within management prerogative. Several of the strikers filled up the required form and were accordingly scheduled for work. The remaining others, led and supported by complainant LAKAS, refused and insisted that they be all admitted back to work without complying with the aforestated requirement, alleging that the same constituted a "screening" of the striking workers. As matters stood, Management refused to forego the requirement; on the other hand, the remaining strikers demanded to be readmitted without filing up the form for scheduling.

These then constitute the factual background when the complainant LAKAS, represented by its counsel, Atty. Benjamin C. Pineda, on December 26, 1967 , filed before the respondent court a charge for unfair labor practice against the respondent Marcelo Companies, alleging non- readmission of the striking members of the three (3) affiliated local unions despite the unconditional offer to return to work after the strike of November 7, 1967. Based on the allegations of the foregoing charge and after a preliminary investigation conducted by the acting Prosecutor of said respondent court, the acting Chief Prosecutor, Atty. Antonio Tria Tirona, filed on February 12, 1968 the instant complaint under authority of Section 5(b) of Republic Act 875, otherwise known as the Industrial Peace Act.

The Complaint below alleges, among others, to wit:

1. That complainant is a legitimate labor organization, with its affiliates, namely: Marcelo Free Workers Union, United Nail Workers Union, and Marcelo United Employees Unions, whose members listed in Annexes "A", "B", and "C" of this complaint are considered employees of respondent within the meaning of the Act;

2. ...

xxx xxx xxx xxx xxx xxx 3. That individual complaints listed in Annexes "A", "B", and "C" of this complaint are members of the Marcelo United Employees and Workers Association, Marcelo Free Workers Union, and United Nail Workers Union, respectively; that the members of the Marcelo United Employees and Workers Union are workers of respondent Marcelo Tire and Rubber Corporation; that the members of the Marcelo Free Workers Union compose the workers of the Marcelo Rubber and Latex Products, Polaris Marketing Corporation, and the members of the United Nail Workers Union compose the workers of the Marcelo Steel Corporation (Nail Plant);

4. That each of the aforesaid local unions, before their affiliation with the complainant union LAKAS, had a collective bargaining agreement with respondents; that after the expiration of the collective bargaining agreement above-mentioned and after the above-mentioned local unions affiliated with the complainant LAKAS, the said federation sent to respondents' president, Jose P. Marcelo, on May 23, 1967, a letter, requesting for a negotiation for collective bargaining, together with union proposals thereof, but respondents refused;

5. That after respondents knew of the affiliation of the aforementioned local unions with the LAKAS, the said respondents, thru their officers and agents began harassing the union members, discriminated against them by transferring some of its officers and members from one section to another in such a way that their work was reduced to manual labor, and by suspending them without justifiable cause. in spite of long years of service with said respondents;

6. That as a result of the abovementioned unfair labor practice of respondents, and after complainant sent communication thereto, protesting against the acts of the above-mentioned, complainant decided to stage a strike on September 4, 1967, after filing a notice of strike with the Department of Labor;

7. That on September 14, 1967, however, Jose P. Marcelo, and Jose A. Delfin, president and vice-president of the respondents, respectively, on one hand and the presidents of the three local unions above-mentioned and the national president of complainant union on the other, entered into a Return-to-Work Agreement. providing among others, as follows:

4. The management agrees to accept all employees who struck without discrimination or harassment consistent with an orderly operation of its various plants provided it is understood that management has not waived and shall continue to exercise freely its rights and prerogatives to punish, discipline and dismiss its employees in accordance with law and existing rules and regulations and that cases filed in Court will be allowed to take their normal course.

8. That, contrary to the above Return-to-Work agreement, and in violation thereof, respondents refused to admit the members of the three striking local unions; that in admitting union members back to work, they were screened in spite of their long employment with respondent, but respondents gave preference to the casual employees;

9. That, because of the refusal of the respondents to accept some union members, in violation of the above-mentioned Return-to-Work agreement and refusal of respondents to bargain in good faith with complainant, the latter, together with the members of the three local unions above-mentioned, again staged a strike on November 7, 1967;

10. That on December 13, 1967, complainant sent a letter to respondents that the members of the striking unions abovementioned offered to return to work on December 18, 1967 without any condition, but respondents likewise refused, and still continue to refuse to reinstate them up to the present;

11. That here to attached are the list of names of the members of the three local unions above-mentioned who were not admitted back to work by respondents, marked as Annexes "A ", "B ", and "C and made as an integral part of this complaint;

12. That the union members listed in Annexes "A", "B", and "C" hereof were not able to secure substantial employment in spite of diligent efforts exerted by them;

13. That the above unfair labor practice acts of respondents are in violation of Section 4, subsections 1, 4 and 6 in relation to Sections 13, 14 and 15 of Republic Act No. 875.

The complaint prayed "that after due hearing, judgment be rendered, declaring respondents guilty of unfair labor practice, and

(a) Ordering respondents to cease and desist from further committing the acts complained of; (b) Ordering respondents to comply with the Return-to-Work agreement dated September 14, 1967, and to admit back to work the workers listed in annexes "A", "B " and "C" hereof, with back wages, without loss of seniority rights and privileges thereof;

(c) Ordering respondents to bargain in good faith with complainant union; and

(d) Granting complainant and its complaining members thereof such other affirmative reliefs and remedies equitable and proper, in order to effectuate the policies of the Industrial Peace Act.

On March 16, 1968, after an Urgent Motion for Extension of Time to File Answer, the respondents filed their Answer denying the material allegations of the Complaint and alleging as affirmative defenses,

I. That the Collective Bargaining Agreement between respondent Marcelo Steel Corporation and the United Nail Workers Union expired on March 15, 1967; The Collective Bargaining Agreement between the United Rubber Workers Union (which eventually became the Marcelo Free Workers Union) and the respondent Marcelo Rubber and Latex Products, Inc., expired on June 5, 1967; the Collective Bargaining Agreement between Marcelo Camelback Tire and Foam Union and the Marcelo Tire and Rubber Corporation expired on June 5, 1967;

II. That on May 23, 1967, one Mr. Prudencio Jalandoni of complainant addressed a communication to Mr. Jose P. Marcelo of respondents informing him of the alleged affiliation of the Marcelo United Labor Union with complainant and submitting a set of collective bargaining proposal to which counsel for respondents replied suggesting that a petition for certification election be filed with the Court of Industrial Relations in view of the several demands for representation recognition;

III. That the transfers of workers from one job to another were made in accordance with needs of the service. Respondents afforded union officers and members affected by the transfers the privilege to watch out for vacancies and select positions they prefer to be in. No suspensions without justifiable cause were made as alleged in the Complaint;

IV. That between May 23, 1967, the date of their first demand for negotiations, and September 4, 1967, the start of the first strike, proposals and counter- proposals were had. Respondents are not aware of whether or not a notice of strike was filed with the Court of Industrial Relations;

V. That Mr. Jose P. Marcelo is the President of Marcelo Rubber and Latex Products, Inc., Marcelo Tire and Rubber Corporation, and Marcelo Steel Corporation, while Mr. Jose A. Delfin is the acting Personnel Manager of respondent Marcelo Rubber and Latex Products, Inc., Marcelo Tire and Rubber Corporation, Marcelo Steel Corporation and Marcelo Chemical and Pigment Corporation; VI. That respondents did not refuse to admit members of the striking union. Only four (4) workers who had criminal cases filed against them voluntarily failed to report to the Personnel Department for administrative investigation;

VII. That after September 14, 1967, all workers of the different respondent corporations returned to work except the four mentioned in the preceding paragraph hereof who have pending criminal cases; between September 14, 1967, and November 7, 1967 another strike was declared without justifiable cause;

VIII. That on November 28, 1967, respondent obtained an injunction from the Court of First Instance of Rizal, Caloocan City Branch, against the illegal picketing of

the local unions; in the first week of December, 1967, the striking workers began returning to work; on December 13, 1967, a letter was received from complainant advising respondents that its striking workers were calling off, lifting the picket line and returning to work, that from the first week of December, 1967, respondents invited the striking workers desiring to return to work to fill out an information sheet stating therein their readiness to work and the exact dates they were available so that proper scheduling could be done; a number of workers showed no interest in reporting to work; management posted in the Checkpoint, Bulletin Boards, and the gates notices calling all workers to return to work but a number of workers obviously were not interested in returning anymore;

IX. That respondents posted several times lists of names of workers who had not returned to work with the invitation to return to work, but they did not return to work;

X. That a number of workers in the list Annexes "A", "B" and "C" have resigned after they found more profitable employment elsewhere;

XI. That the local unions referred to in the Complaint if they ever had affiliated with complainant union had subsequently disaffiliated therefrom;

XII. That the strikes called and declared by the striking unions were illegal; XIII. That the local unions were bargaining in bad faith with respondents, and praying for the dismissal of the Complaint as well as for the declaration of illegality of the two (2) strikes called by the striking unions.

Thereafter, the trial commenced. Then on October 24, 1968, a development occurred which gave a peculiar aspect to the case at bar. A Manifestation and Motion signed by the respective officers and members of the MUEWA, headed by Paulino Lazaro, was filed by the said union, alleging, to wit,

l. That the above-entitled case purportedly shows that the Marcelo United Employees and Workers Association is one of the Complainants being represented by the Petitioner Lakas ng Manggagawang Makabayan (LMM); 2. That it likewise appears in the above-entitled case that the services of the herein Petitioner was sought by a certain Augusto Carreon together with his cohorts who are not members of the Marcelo United Employees and Workers Association much less connected with the Marcelo Tire and Rubber Corporation wherein the Marcelo United Employees and Workers Association has an existing Collective Bargaining Agreement;

3. That to set the records of this Honorable Court straight, the undersigned officers and members of the Marcelo United Employees and Workers Association respectfully manliest that the aforesaid organization has no complaint whatsoever against any of the Marcelo Enterprises;

4. ...

5. ..., the Complaint filed by the Petitioner in the above-entitled case in behalf of the Marcelo United Employees and Workers Association is without authority from the latter and therefore the officers and/or representatives of the petitioning labor organization should be cited for Contempt of Court;

6. ...., the Complaint filed by the Petitioner in the above-entitled case in behalf of the Marcelo United and Employees and Workers Association should be considered as withdrawn;

xxx xxx xxx

This was followed by another Manifestation and Motion flied on November 6, 1968 and signed by the officers and members of the UNWU, headed by its President, Juan Balgos, alleging, to wit,

1. That the above-entitled case purportedly shows that the United Nail Workers Union is being represented by the Petitioner Lakas ng Manggagawang Makabayan for the alleged reason that the former is one of the affiliates of the latter;

2. That on January 15, 1968, all the Officers and members of the United Nail Workers Union disaffiliated from the herein Petitioning labor organization for the reason that Petitioning labor organization could not serve the best interest of the Officers and members of the United Nail Workers Union and as such is a stumbling block to a harmonious labor- management relations within all the Marcelo enterprises; ...

3. That the filing of the above-entitled case by the herein Petitioning labor organization was made over and above the objections of the officers and members of the United Nail Workers Union;

4. That in view of all the foregoing, the Officers and members of the United Nail Workers Union do hereby disauthorize the Petitioner of the above-entitled case (Re:: Lakas ng Manggagawang Makabayan) from further representing the United Nail Workers Union in the above-entitled case; 5. That in view further of the fact that the filing of the above-entitled case was made over and above the objections of the Officers and members of the United Nail Workers Union, the latter therefore manifest their intention to cease and desist as they hereby ceased and desisted from further prosecuting the above- entitled case in the interest of a harmonius labor-management relation within the Marcelo Enterprises;

xxx xxx xxx

Likewise, a Manifestation and Motion signed by the Officers and members of the MFWU, headed by its president, Benjamin Maaol, dated October 28, 1968 and filed November 6, 1968, stated the same allegations as the Manifestation and Motion filed by the UNWU quoted above, except that the disaffiliation of the MFWU from LAKAS was made effective January 25, 1968. The Resolutions of Disaffiliation of both MFWU and UNWU were attached to these Manifestations.

On November 19, 1968, complainant LAKAS filed an Opposition to these Manifestations and Motions, materially alleging that, to wit:

1. That complainants respectfully stated that when Charge No. 2265 was filed on December 26, 1967 in this case, giving rise to the instant complaint, the alleged officers of the union-movants were not yet officers on the filing of said Charge No. 2265,...

2. That the alleged officers and members who signed the three (3) Manifestations and Motions are the very employees who were accepted back to work by the respondents during the strike by the complainants on September 4, 1967 and November 7, 1967, and the said alleged officers and members who signed the said manifestations and motions are still working up to the present in the establishments of the respondents.

3. That precisely because of the acceptance back to work of these alleged officers and members of the union-movants, and the refusal of respondents to accept back to work all the individual complainants in this case mentioned in Annexes "A", "B" and "C" of the instant complaint, inspite of the offer to return to work by the complainants herein made to the respondents without any conditions at the time of the strike, as per complainants' letter of December 13, 1967 (Exh. "B", for the complainants), which fact precisely gave rise to the filing of this case.

xxx xxx xxx

On January 31, 1969, after the submission of their respective Memoranda on the motions asking for the dismissal and withdrawal of the complaint, the Court of Industrial Relations issued an Order deferring the resolution of the Motions until after the trial on the merits. To this Order, two separate Motions for Reconsideration were filed by the respondent companies and the movant-unions, which motions were, however, denied by the court en banc by its Resolution dated March 5, 1969.

After the trial on the merits of the case, and after submission by the parties of their respective memoranda, the respondent court rendered on July 20, 1973 the Decision subject of these petitions. On the motions for dismissal or withdrawal of the complaint as prayed for by MUEWA, UNWU and MFWU, the respondent court denied the same on the ground that the instant case was filed by the Lakas ng Manggagawang Makabayan for and in behalf of the individual employees concerned and not for the movants who were not authorized by said individual complainants to ask for the dismissal. On the merits of the case, while the Decision contained opinions to the effect that the respondent Marcelo Companies were not remiss in their obligation to bargain, and that the September 4, 1967 strike as well as the November 7, 1967 strike, were economic strikes, and were, therefore, illegal because of lack of the required notices of strike before the strikes were declared in both instances, the Decision, nevertheless, on the opinion that the "procedure of scheduling adopted by the respondents was in effect a screening of those who were to be readmitted," declared respondent Marcelo Companies guilty of unfair labor practice in discriminating against the employees named in Annexes "A", "B", and "C" by refusing to admit them back to work other strikers were admitted back to work after the strike of November 7, 1967. The dispositive portion of the appealed Decision states, to wit,

WHEREFORE, in view of all the foregoing, respondents should be, as they are hereby, declared guilty of unfair labor practice only for the discrimination on terms or conditions of employment as hereinbefore discussed in connection with the return of the strikers complainants back to work after the second strike, and, therefore, ordered to pay the individual complainants appearing in Annexes "A", "B" and "C" of the Complaint, except Arlington Glodeviza, Jesus Lim, Wilfredo Jarquio, Leonardo Sakdalan, Jose Roque, Alfredo Cabel, and those still working, were dismissed for cause, whose contracts expired or who had resigned as above indicated, their back wages from December l8, 1967but only up to June 29, 1970 when this case was submitted for decision, without reinstatement, minus their earnings elsewhere for the same period.

As to those who died without having been re-employed, the back wages shall be from December 18, 1967 up to the date of their demise, as indicated in the body of this Decision, but not beyond June 20, 1970, likewise less their earnings elsewhere.

The Chief Auditing Examiner of this Court, or his duly authorized representative, is hereby directed to proceed to the premises of respondent companies to examine their books, payrolls, vouchers and other pertinent papers or documents as may be necessary to compute the back wages due the individual complainant in line with this Decision, and to submit his Report thereon not later than twenty (20) days after completion of such examination for further disposition of the Court.

SO ORDERED.

On August 9, 1973, counsel for respondent Marcelo Companies filed a Motion for Reconsideration of the above Decision assigning as errors, to wit,

I. The trial court erred in not finding that complainant Lakas ng Manggagawang Makabayan (Lakas) has no authority to file and/or to prosecute the Complaint against respondents in representation of the local unions and/or individual complainants and/or members of local unions in their individual capacities and in not dismissing the complaint on that ground upon motions of the local unions concerned and/or their members.

II. The trial court erred in finding that respondent discriminated against individual complainants who were not readmitted to work after the November 7, 1967 strike while others were able to return to their former employment and in holding that the procedure adopted by respondents was in effect a screening of those who were readmitted and in finding respondents guilty of unfair labor practice by reason thereof. "

On August 14, 1973, the individual complainants who had earlier disauthorized the counsel of record, Atty. Benjamin Pineda, from further representing them and from amicably settling their claims, on their own behalf filed their arguments in support of their Motion for Reconsideration, through a newly retained counsel, Atty. Pablo B. Castillon. Assigned as errors are, to wit,

I. The findings of the trial court excluding some of the employees from the aforementioned Decision as well as from the benefits resulting therefrom is not in accordance with law and the facts.

II. The findings of the trial court declaring the strikes of September 4 and November 7, 1967 as illegal for being an economic strike is not in accordance with law and the facts adduced in this case.

III. The Honorable trial court in ordering the reduction of the back wages, without reinstatement, appears to have departed from the substantial evidence rule and established jurisprudence.

By Resolution of January 24, 1974, the Court en banc denied the two (2) Motions for Reconsideration filed by both the respondent Marcelo Companies and the individual complainants. On February 19, 1974 and on February 20, 1974, both parties filed their respective Notices of Appeals. Hence, these petitions.

In L-38258, the petition filed by complainant Lakas ng Manggagawang Makabayan (LAKAS), the following were assigned as reversible errors, to wit,

I. The respondent court erred in finding the strikes of September 4 and November 7, 1967 to be economic strikes and declaring the said strikes illegal for non-compliance with the procedural requirement of Section 14(d) of Republic Act 875, although its illegality was condoned or waived because of the Return-to- Work agreement on the first strike, and the discriminatory rehiring of the striking employees after the second strike.

II. The respondent court erred in denying reinstatement to the striking complainants in Case No. 4951-ULP, and limiting the computation of their backwages from December 18, 1967 to June 29, 1970 only, despite its findings of unfair labor practice against private respondents herein as a consequence of the discriminatory rehiring of the striking employees after the November 7, 1967 strike. III. The respondent court erred in excluding the other individual complainants, except those who are still working, those who resigned on or before December

18, 1967, and those whose employment contract expired, and denying to these individual complainants the benefits resulting therefrom.

On the other hand, in L-38260 which is the petition filed by respondents Marcelo Enterprises, Marcelo Tire and Rubber Corporation, Marcelo Rubber & Latex Products, Marcelo Steel Corporation, Marcelo Chemical & Pigment Corporation, and Polaris Marketing Corporation, the following is the alleged assignment of errors, to wit,

I. Respondent court erred in not finding that respondent Lakas ng Manggagawang Makabayan (LAKAS) had no authority to file and/or to prosecute the complaint against the petitioners herein in representation of the local unions and/or individual complainants and/or members of local unions in their individual capacities and in not dismissing the complaint in Case No. 4951-ULP of respondent court on that ground upon motions of the local unions concerned and/or their officers and members.

II. Respondent court erred in finding that petitioners herein discriminated against individual complainants in Case No. 4951-ULP of respondent court who were not readmitted to work after the November 7, 1967 strike, while others were able to return to their former employment and in holding that the procedure adopted by petitioners herein was in effect a screening of those who were readmitted and in finding petitioners herein guilty of unfair labor practice by reasons thereof.

III. Respondent court erred in rendering judgment ordering petitioners herein to pay individual complainants in Case No. 4951-ULP of respondent court backwages from December 18, 1967, to June 29, 1970, minus their earnings elsewhere, except those who have resigned, those who have been dismissed for cause, those whose contracts have expired and those who are already working.

IV. Respondent court erred in holding that petitioners herein have waived their right to declare the strikes of September 4, 1967 and November 7, 1967, illegal.

From the aforecited assignments of errors respectively made in both petitions before Us, We find that there are only two basic issues posed for Our resolution, viz: (1) whether or not the complaint filed by LAKAS against the Marcelo Companies can

be sustained, in view of the alleged fact that its authority to file and prosecute the same has been squarely raised in issue at the first instance before the respondent court; and (2) whether or not the Marcelo Companies are guilty of unfair labor practice, for which they should be made liable for backwages and be obliged to reinstate the employees appearing in Annexes "A", "B", and "C " of the complaint, taking into consideration the prayer of LAKAS anent the correct payment of said backwages and the non-exclusion of some employees from the benefits arising from the appealed Decision.

The first issue poses a procedural question which We shall dwell on after a resolution of the second issue, this latter issue being of greater significance to the correct determination of the rights- of all parties concerned as it treats of the merits of the present petitions.

Hence, anent the second issue of whether or not the complaint for unfair labor practice can be sustained, this Court rules in favor of the respondent Marcelo Companies and consequently, the appealed Decision is reversed. This reversal is inevitable after this Court has pored through the voluminuous records of the case as well as after applying the established jurisprudence and the law on the matters raised. We are not unmindful of the plight of the employees in this case but We consider it oppressive to grant their petition in G.R. No. L38258 for not only is there no evidence which shows that the respondent Marcelo Companies were seeking for an opportunity to discharge these employees for union activities, or to discriminate against them because of such activities, but there is affirmative evidence to establish the contrary conclusion.

The present controversy is a three-sided conflict, although focus has been greatly placed upon an alleged labor dispute between complainant LAKAS and the respondent Marcelo Companies. It would bear emphasizing, however, that what had been patently disregarded by the respondent industrial court and the parties alike, is the fact that LAKAS had never been the bargaining representative of any and an of the local unions then existing in the respondent Marcelo Companies.

Contrary to the pretensions of complainant LAKAS, the respondent Marcelo Companies did not ignore the demand for collective bargaining contained in its letter of June 20, 1967. Neither did the companies refuse to bargain at all. What it did was to apprise LAKAS of the existing conflicting demands for recognition as the

bargaining representative in the appropriate units involved, and suggested the settlement of the issue by means of the filing of a petition for certification election before the Court of Industrial Relations. This was not only the legally approved procedure but was dictated by the fact that there was indeed a legitimate representation issue. PSSLU, with whom the existing CBAs were entered into, was demanding of respondent companies to collectively bargain with it; so was Paulino Lazaro of MUEWA, J.C. Espinas & Associates for MACATIFU and the MFWU, and the complainant LAKAS for MULU which we understand is the aggrupation of MACATIFU, MFWU and UNWU. On top of all of these, Jose Roque of UNWU disauthorized the PSSLU from representing his union; and similarly, Augusta Carreon of MACATIFU itself informed management as late as July 11, 1967 or after the demand of LAKAS that no group representing his Union "is not authorized and should not be entertained. "

Indeed, what We said in Philippine Association of Free Labor Unions (PAFLU) vs. The Bureau of Labor Relations,69 SCRA 132, applies as well to this case.

..., in a situation like this where the issue of legitimate representation in dispute is viewed for not only by one legitimate labor organization but two or more, there is every equitable ground warranting the holding of a certification election. In this way, the issue as to who is really the true bargaining representative of all the employees may be firmly settled by the simple expedient of an election.

The above-cited case gives the reason for the need of determining once and for all the true choice of membership as to who should be their bargaining representative, which is that, "(E)xperience teaches us, one of the root causes of labor or industrial disputes is the problem arising from a questionable bargaining representative entering into CBA concerning terms and conditions of employment. "

Respecting the issue of representation and the right of the employer to demand reasonable proof of majority representation on the part of the supposed or putative bargaining agent, the commentaries in Rothenberg on Labor Relations, pp. 42943 1, are forceful and persuasive, thus: It is essential to the right of a putative bargaining agent to represent the employees that it be the delegate of a majority of the employees and, conversely, an employer is under duty to bargain collectively only when the bargaining agent is representative of the majority of the employees. A natural consequence of these principles is that the employer has the right to demand of the asserted bargaining

agent proof of its representation of its employees. Having the right to demonstration of this fact, it is not an 'unfair labor practice' for an employer to refuse to negotiate until the asserted bargaining agent has presented reasonable proof of majority representation. It is necessary however, that such demand be made in good faith and not merely as a pretext or device for delay or evasion. The employer's right is however to reasonable proof. ...

... Although an employer has the undoubted right to bargain with a bargaining agent whose authority has been established, without the requirement that the bargaining agent be officially certified by the National Labor Relations Board as such, if the informally presented evidence leaves a real doubt as to the issue, the employer has a right to demand a certification and to refuse to negotiate until such official certification is presented."

The clear facts of the case as hereinbefore restated indusputably 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 bargain collectively with The complainant LAKAS on the part of said companies. And proceeding 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 , designed 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 respondent Marcelo Tire and Rubber Corporation, to bargain with it despite the fact that the MUEWA of Paulino Lazaro vas 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 ire all illegal and violative of the employer's basic right to bargain collectively only with the representative supported by the majority of its employees in each of the bargaining units. This Court is not unaware of the present predicament of the employees involved but much as We sympathize with those who have been misled and so lost their jobs through hasty, ill-advised and precipitate moves, We rule that the facts neither substantiate nor support the finding that the respondent Marcelo Companies are guilty of unfair labor practice.

There are also other facts which this Court cannot ignore. the complaint of LAKAS charge that after their first strike of September 4, 1967, management and the

striking employees entered into a Return-to-Work Agreement but that it was violated by the respondent companies who "refused to admit the members of the three striking local unions ... and gave reference to the casual employees." (No. 8, Complaint). It is also alleged that the strike of November 7, 1967 was staged "because of the refusal of the respondents to accept some union members ... and refusal of respondents to bargain in good faith with complainant" (No. 9, Complaint). We find however, that in making these charges, complainant LAKAS lacked candor, truth and fidelity towards the courts. It is a fact found by the respondent court, and as revealed by he records of the case, that the respondent Marcelo Companies did not violate the terms of the Return-to-Work Agreement negotiated after the first strike. All of the strikers were admitted back to work except four (4) who opted not to report for work because of the administrative investigation conducted in connection with the acts of violence perpetrated during the said strike.

It is also evident from the records that the charge of bargaining in bad faith imputed to the respondent companies, is hardly credible. In fact, such charge is valid as only against the complainant LAKAS. The parties had a total of five (5) conferences for purposes of collective bargaining. It is worth considering that the first strike of September 4, 1967 was staged less than a week after the fourth CBA conference and without any benefit of any previous strike notice. In this connection, it must be stated that the notice of strike filed on June 13, 1967 could not have been the strike notice for the first strike because it was already withdrawn on July 14, 1967. Thus, from these stated facts can be seen that the first strike was held while the parties were in the process of negotiating. Nor can it be sustained that the respondent Marcelo Companies bargained in bad faith since there were proposals offered by them, but the complainant LAKAS stood pat on its position that all of their economic demands should be met and that all of these demands should be granted in all of the respondent Marcelo Companies. The companies' refusal to accede to the demands of LAKAS appears to be justified since there is no showing that these companies were in the same state of financial and economic affairs. There is reason to believe that the first strike was staged only for the purpose of compelling the respondent Marcelo Companies to accede to the inflexible demands of the complainant LAKAS. The records further establish that after the resumption of normal operations following the first strike and the consequent Return-to-Work Agreement, the striking unions led by complainant LAKAS and the management of the respondent Marcelo Companies resumed their bargaining negotiations. And that on October 13, 1967, complainant LAKAS sent the final drafts of the collective bargaining proposals for MFWU and UNWU. The second strike of November 7, 1967 was then staged immediately after which strike, as before, was again lacking of a strike notice. All of these facts show that it was complainant LAKAS, and not

the respondent Marcelo Companies, which refused to negotiate in the pending collective bargaining process. AR that the facts show is that the bargaining position of complainant LAKAS was inflexible and that it was in line with this uncompromising attitude that the strikes were declared, significantly after notice that management did not or could not meet all of their 17-points demand.

Respondent court, upholding the contention of petitioner LAKAS that after the second strike, the respondent Marcelo Companies, despite the strikers' unconditional offer to return to work, refused to readmit them without "screening" which LAKAS insists to be "discriminatory hiring of the striking employees, " declared that although the two strikes were illegal, being economic strikes held in violation of the strike notice requirement, nevertheless held the Marcelo Companies guilty of unfair labor practice in discriminating against the complaining employees by refusing to readmit them while other strikers were admitted back to work. We do not agree.

It is the settled jurisprudence that it is an unfair labor practice for an employer not to reinstate, or refuse re-employment of members of union who abandon their strike and make unconditional offer to return to work. 1 As indeed Exhibit "B" presents an unconditional offer of the striking employees to return to work under the same terms and conditions of employment before the strike, the question then confronting Us is whether or not on the part of the respondent companies, there was refusal to reinstate or re-employ the strikers. We find as a fact that the respondent Marcelo Companies did not refuse to reinstate or re- employ the strikers, as a consequence of which We overrule the finding of unfair labor practice against said companies based on the erroneous conclusion )f the respondent court. It is clear from the records that even before the unconditional offer to return to work contained in , Exhibit "B" was made, the respondent Marcelo Companies had already posted notices for the strikers to return back to work.

It is true that upon their return, the strikers were required to fill up a form (Exhibit "49") wherein they were to indicate the date of their availability for work. But We are more impressed and are persuaded to accept as true the contention of the respondent Marcelo Companies that the aforestated requirement was only for purposes of proper scheduling of the start of work for each returning striker. It must be noted that as a consequence of the two strikes which were both attended by widespread acts of violence and vandalism, the businesses of the respondent companies were completely paralyzed. It would hardly be justiciable to demand of the respondent companies to readmit all the returning workers in

one big force or as each demanded readmission. There were machines that were not in operating condition because of long disuse during the strikes. Some of the machines needed more than one worker to operate them so that in the absence of the needed team of workers, the start of work by one without his teammates would necessarily be useless, and the company would be paying for his time spent doing no work. Finally, We take judicial cognizance of the fact that companies whose businesses were completely paralyzed by major strikes cannot resume operations at once and in the same state or force as before the strikes.

But what strikes Us most in lending credence to respondents' allegation that Exhibit "49" was not meant to screen the strikers, is the fact that an of the returning strikers who filled up the form were scheduled for work and consequently started with their jobs. It is only those strikers who refused or failed to fill-up the required form, like the herein complaining employees, who were not scheduled for work and consequently have not been re- employed by the respondent Marcelo Companies. Even if there was a sincere belief on their part that the requirement of Exhibit "49" was a ruse at "screening" them, this fear would have been dispelled upon notice of the fact that each and all of their co-strikers who rued up the required form were in fact scheduled for work and started to work. The stoppage of their work was not, therefore, the direct consequence of the respondent companies' complained act, Hence, their economic loss should not be shifted to the employer. 2

It was never the state policy nor Our judicial pronouncement that the employees' right to self- organization and to engage in concerted activities for mutual aid and protection, are absolute or be upheld under an circumstances. Thus, in the case of Royal Interocean Lines, et al. vs. CIR, 3 We cited these authorities giving adequate panoply to the rights of employer, to wit:

The protection of workers' right to self-organization in no way interfere with employer's freedom to enforce such rules and orders as are necessary to proper conduct of his businesses, so long as employer's supervision is not for the purpose of intimidating or coercing his employees with respect to their self- organization and representation. (National Relations Board vs. Hudson Motor Car Co., C.C.A., 1942, 123 F 2d. 528). "

It is the function of the court to see that the rights of self-organization and collective bargaining guaranteed by the Act are amply secured to the employee, but in its effort to prevent the prescribed unfair labor practice, the court must be mindful of the welfare of the honest employer (Martel Mills Corp. vs. M.L.R.L., C.C.A., 1940,11471 F2d. 264)."

In Pagkakaisang Itinataguyod ng mga Manggagawa sa Ang Tibay (PIMA), Eliseo Samson, et al., vs. Ang Tibay, Inc., et al., L-22273, May 16, 1967, 20 SCRA 45, We held that the exaction, by the employer, from the strikers returning to work, of a promise not to destroy company property and not to commit acts of reprisal against union members who did not participate in the strike, cannot be considered an unfair labor practice because it was not intended to discourage union membership. It was an act of a self- preservation designed to insure peace and order in the employer's premises. It was also held therein that what the Industrial Peace Act regards as an unfair labor practice is the discrimination committed by the employer in regard to tenure of employment for the purpose of encouraging or discouraging union membership.

In the light of the above ruling and taking the facts and circumstances of the case before Us in relation to the requirement by the respondent companies in the filling up of Exhibit "49", We hold and rule that the requirement was an act of selfpreservation, designed to effect cost-savings as well as to insure peace and order within their premises. Accordingly, the petition in G. R. No. L38258 should be dismissed, it having failed to prove, substantiate and justify the unfair labor practice charges against the respondent Marcelo Companies.

Now to the procedural question posed in the first issue brought about by the respondent court's denial of the motions to withdraw the complaint respectively filed by MUEWA, UNWU and MFWU. In their petition (G.R. L-38260) the respondent Marcelo Companies maintain that the respondent court erred in not dismissing the complaint even as it knew fully well that the very authority of LAKAS to represent the labor unions who had precisely disaffiliated from the LAKAS, was open to serious question and was being ventilated before it. On the other hand, the respondent court rationalized the denial of the aforestated motions to withdraw by holding that the complaint was filed by LAKAS on behalf of the individual employees whose names were attached to the complaint and hence, that the local unions who were not so authorized by these individual employees, cannot withdraw the said complaint. The lower court's opinion is erroneous.

Firstly, LAKAS cannot bring any action for and in behalf of the employees who were members of MUEWA because, as intimated earlier in this Decision, the said local union was never an affiliate of LAKAS. What appears clearly from the records is that it was Augusto Carreon and his followers who joined LAKAS, but then Augusto Carreon was not the recognized president of MUEWA and neither he nor his followers can claim any legitimate representation of MUEWA. Apparently, it is this split faction of MUEWA, headed by Augusta Carreon, who is being sought to be represented by LAKAS. However, it cannot do so because the members constituting this split faction of MUEWA were still members of MUEWA which was on its own right a duly registered labor union. Hence, any suit to be brought for and in behalf of them can be made only by MUEWA, and not LAKAS. It appearing then that Augusta Carreon and his cohorts did not disaffiliate from MUEWA nor signed any individual affiliation with LAKAS, LAKAS bears no legal interest in representing MUEWA or any of its members.

Nor will the lower court's opinion be availing with respect to the complaining employees belonging to UNWU and MFWU. Although it is true, as alleged by LAKAS, that when it filed the charge on December 26, 1967, the officers of the movant unions were not yet then the officers thereof, nevertheless, the moment MFWU and UNWU separated from and disaffiliated with 'LAKAS to again exercise its rights as independent local unions, registered before as such, they are no longer affiliates of LAKAS, as what transpired here. Naturally, there would no longer be any reason or occasion for LAKAS to continue representing them. Notable is the fact that the members purportedly represented by LAKAS constitute the mere minority of the movant unions, as may be inferred from the allegations of the movant unions as well as the counter-allegations of LAKAS filed below. As such, they cannot prevail or dictate upon the will of the greater majority of the unions to which they still belong, it appearing that they never disaffiliated from their unions; or stated in another way, they are bound by the action of the greater majority.4

In NARIC Workers' Union vs. CIR, 5 We ruled that, "(a) labor union would go beyond the limits of its legitimate purposes if it is given the unrestrained liberty to prosecute any case even for employees who are not members of any union at all. A suit brought by another in representation of a real party in interest is defective." Under the uncontroverted facts obtaining herein, the aforestated ruling is applicable, the only difference being that, here, a labor federation seeks to represent members of a registered local union never affiliated with it and members

of registered local unions which, in the course of the proceedings before the industrial court, disaffiliated from it.

This is not to say that the complaining employees were without any venue for redress. Under the aforestated considerations, the respondent court should have directed the amendment of the complaint by dropping LAKAS as the complainant and allowing the suit to be further prosecuted in the individual names of those who had grievances. A class suit under Rule 3, Section 12 of the Rules of Court is authorized and should suffice for the purpose.

In fairness to the complaining employees, however, We treated their Motion for Reconsideration of the Decision subject of appeal as curing the defect of the complaint as the said motion expressly manifested their collective desire to pursue the complaint for and in their own behalves and disauthorizing LAKAS' counsel from further representing them. And We have also treated their petition before Us in the same manner, disregarding the fact that LAKAS remained the petitioning party, as it appears from the verification that the petition in L38258 was for and in behalf of the complaining employees. The merits of their petition, however, fall short of substantiating the charge of unfair labor practice against the respondent Marcelo Companies. On the other hand, the appeal of the Marcelo Companies in L-38260 must be upheld and sustained.

WHEREFORE, upon the foregoing considerations, the petition in L-38258 is dismissed and the petition in L-38260 is granted. The decision of the Court of Industrial Relations is hereby REVERSED and SET ASIDE and a new judgment is rendered holding that the respondent Marcelo Companies are not guilty of unfair labor practice.

No costs.

SO ORDERED. [G.R. No. 155690. June 30, 2005]

CAPITOL MEDICAL CENTER, INC., petitioner, vs. HON. CRESENCIANO B. TRAJANO, in his capacity as Secretary of the Department of Labor and Employment, and CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-AFW, respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision[1] dated September 20, 2001 and the Resolution[2] dated October 18, 2002 rendered by the Court of Appeals in CA-G.R. SP No. 53479, entitled Capitol Medical Center, Inc. vs. Hon. Cresenciano B. Trajano, in his capacity as Secretary of the Department of Labor and Employment and Capitol Medical Center Employees Association-AFW.

The factual antecedents as gleaned from the records are:

Capitol Medical Center, Inc., petitioner, is a hospital with address at Panay Avenue corner Scout Magbanua Street, Quezon City. Upon the other hand, Capitol Medical Center Employees Association-Alliance of Filipino Workers, respondent, is a duly registered labor union acting as the certified collective bargaining agent of the rankand-file employees of petitioner hospital.

On October 2, 1997, 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 unions 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 respondents certificate of registration, docketed as NCR-OD-9710-006-IRD.[3]

For its part, on October 29, 1997, respondent filed with the National Conciliation and Mediation Board (NCMB), National Capital Region, a notice of strike, docketed as NCMB-NCR- NS-10-453-97. Respondent alleged that petitioners refusal to bargain constitutes unfair labor practice. Despite several conferences and efforts of the designated conciliator-mediator, the parties failed to reach an amicable settlement.

On November 28, 1997, 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:

WHEREFORE, this Office assumes jurisdiction over the labor disputes at Capitol Medical Center pursuant to Article 263 (g) of the Labor Code, as amended. Consequently, all striking workers are directed to return to work within twenty-four (24) hours from the receipt of this Order and the management to resume normal operations and accept back all striking workers under the same terms and conditions prevailing before the strike. Further, parties are directed to cease and desist from committing any act that may exacerbate the situation. Moreover, parties are hereby directed to submit within 10 days from receipt of this Order proposals and counter-proposals leading to the conclusion of the collective bargaining agreement in compliance with aforementioned Resolution of the Office as affirmed by the Supreme Court.

SO ORDERED.

Petitioner then filed a motion for reconsideration but was denied in an Order dated April 27,

1998.

On June 23, 1998, petitioner filed with this Court a petition for certiorari assailing the Labor Secretarys Orders. Pursuant to our ruling in St. Martin Funeral Home vs.The National Labor Relations Commission, et al.,[4] we referred the petition to the Court of Appeals for its appropriate action and disposition.

Meantime, on October 1, 1998, the Regional Director, in NCR-OD-9710-006-IRD, issued an Order denying the petition for cancellation of respondent unions certificate of registration.[5]

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

Anent the first issue raised by the petitioner, We find the same untenable. The public respondent acted well within his duty to order the petitioner hospital to bargain collectively, for it was the surest way to end the dispute. In LMG Chemicals Corporation vs. Secretary of the Department of Labor and Employment, the Hon. Leonardo A. Quisumbing and Chemical Workers Union (G.R. No. 127422, April 17, 2001), the Supreme Court made the following pronouncement, to wit:

It is well settled in our jurisprudence that the authority of the Secretary of Labor to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest includes and extends to all questions and controversies arising therefrom. The power is plenary and discretionary in nature to enable him to effectively and efficiently dispose of the primary dispute.

xxx

xxx

Indeed, We find no grave abuse of discretion on the part of respondent Secretary of Labor whose power is plenary and includes the resolution of all controversies arising from the labor dispute. In fact, he was merely following the directive laid

down by the Supreme Court (Decision dated February 4, 1997) in the case of Capitol Medical Center Alliance of Concerned Employees-Unified Filipino Service Workers (CMC-ACE-UFSW) vs. Hon. Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment, Capitol Medical Center Employees Association-Alliance of Filipino Workers and Capitol Medical Center Incorporated and Dra. Thelma Clemente, President, ordering petitioner hospital to collectively bargain with the Capitol Medical Center Employees Association-Alliance of Filipino Workers (private respondent herein) the certified bargaining agent.

As earlier mentioned, the petition for cancellation was dismissed by the regional director in a decision dated September 30, 1998. x x x.

xxx

xxx

Said decision by the regional director was affirmed by the Director of the Bureau of Labor Relations in a resolution dated December 29, 1998, dismissing the appeal of the petitioner hospital from the said DOLE-NCRs decision.

Finally, the petition for certiorari (docketed as CA-G.R. SP No. 52736) entitled Capitol Medical Center, Inc. vs. Hon. Benedictor R. Bitonio, Jr., in his capacity as Director of the Bureau of Labor Relations, Department of Labor and Employment; Hon. Maximo B. Lim in his capacity as Regional Director, National Capital Region, Department of Labor and Employment and Capitol Medical Center Employees Association (CMCEA-AFW), was dismissed in a decision dated January 11, 2001. The motion for reconsideration which was subsequently filed was denied on March 23, 2001.

xxx

xxx

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 certification, 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 respondent as the certified bargaining agent in spite of several petitions for cancellation filed against it.

xxx

xxx

Secondly, We are inclined to agree with the public respondents statement that the primary assumption of jurisdiction may be exercised by this Office even without the necessity of prior notice or hearing given to any of the parties disputants. (page 56 of the Rollo).

xxx

xxx

We are also not convinced by the arguments raised by the petitioner with respect to its third assigned error. This Court fails to see any supervening event that would render the execution of the decision of public respondent impossible. The petitioner asserts that the respondent union has lost its legitimacy, but at every turn it has been ruled by the various labor administrative officials that the respondent union is legitimate. It has failed to convince the labor administrative officials, We are likewise not persuaded. Unless and until the Certificate of Registration of the union is cancelled, it (union) remains the certified bargaining agent and the Hospital has the duty to enter into a collective bargaining agreement with it.

xxx

xxx

WHEREFORE, premises considered, the instant petition is DENIED, hereby AFFIRMING the two assailed orders, dated December 4, 1997 and April 27, 1998, of the public respondent in OS-AJ-0024-97 (NCMB-NCR-NS-10-453-97).

SO ORDERED.

On October 18, 2002, the Court of Appeals issued a Resolution denying petitioners motion

for reconsideration. Hence, this petition for review on certiorari.

Petitioner contends that its petition for the cancellation of respondent unions certificate of registration involves a prejudicial question that should first be settled before the Secretary of Labor could order the parties to bargain collectively.

We are not persuaded.

As aptly stated by the Solicitor General in his comment on the petition, the Secretary of Labor correctly ruled that the pendency of a petition for cancellation of union registration does not preclude collective 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 unions 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 respondent 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. Bienvenido 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 respondents certificate

of registration. This Order became final and executory and recorded in the BLRs Book of Entries of Judgments on June 3, 1999.

Petitioner also maintains that the Secretary of Labor cannot exercise his powers under Article 263 (g) of the Labor Code without observing the requirements of due process.

Article 263 (g) of the Labor Code, as amended, provides:

ART. 263. Strikes, Picketing and Lockouts.

xxx

xxx

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same.

x x x. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the duty of the striking union or locking-out employer to provide and maintain an effective skeletal workforce of medical and other health personnel, whose movement and services shall be unhampered and unrestricted, as are necessary to insure the proper and adequate

protection of the life and health of its patients, most especially emergency cases, for the duration of the strike or lockout. In such cases, therefore, the Secretary of Labor and Employment is mandated to immediately assume, within twenty-four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission for compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both of them.

The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in his opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any such labor dispute in order to settle or terminate the same.

xxx

x x x.

In Magnolia Poultry Employees Union vs. Sanchez,[6] 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 justifiably rest on his own consideration of the exigency of the situation in relation to the national interests.

In sum, petitioners submissions are bereft of merit.

WHEREFORE, the petition is DENIED. The assailed Decision dated September 20, 2001 and the Resolution dated October 18, 2002 of the Court of Appeals in CA-G.R. SP No. 53479 are AFFIRMED. Costs against petitioner.

SO ORDERED. [G.R. No. 114974. June 16, 2004]

STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE), petitioner, vs. The Honorable MA. NIEVES R. CONFESOR, in her capacity as SECRETARY OF LABOR AND EMPLOYMENT; and the STANDARD CHARTERED BANK, respondents.

D E C I S I O N CALLEJO, SR., J.:

This is a petition for certiorari under Rule 65 of the Rules of Court filed by the Standard Chartered Bank Employees Union, seeking the nullification of the October 29, 1993 Order[1] of then Secretary of Labor and Employment Nieves R. Confesor and her resolutions dated December 16, 1993 and February 10, 1994.

The Antecedents

Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation doing business in the Philippines. The exclusive bargaining agent of the rank and file employees of the Bank is the Standard Chartered Bank Employees Union (the Union, for brevity).

In August of 1990, the Bank and the Union signed a five-year collective bargaining agreement (CBA) with a provision to renegotiate the terms thereof on the third year. Prior to the expiration of the three-year period[2] but within the sixty-day freedom period, the Union initiated the negotiations. On February 18, 1993, the Union, through its President, Eddie L. Divinagracia, sent a letter[3]containing its proposals[4] covering political provisions[5] and thirty-four (34) economic provisions.[6] Included therein was a list of the names of the members of the Unions negotiating panel.[7]

In a Letter dated February 24, 1993, the Bank, through its Country Manager Peter H. Harris, took note of the Unions proposals. The Bank attached its counter-proposal to the non- economic provisions proposed by the Union.[8] The Bank posited that it would be in a better position to present its counter-proposals on the economic items after the Union had presented its justifications for the economic proposals.[9] The Bank, likewise, listed the members of its negotiating panel.[10] The parties agreed to set meetings to settle their differences on the proposed CBA.

Before the commencement of the negotiation, the Union, through Divinagracia, suggested to the Banks Human Resource Manager and head of the negotiating panel, Cielito Diokno, that the bank lawyers should be excluded from the negotiating team. The Bank acceded.[11] Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the National Union of Bank Employees (NUBE), the federation to which the Union was affiliated, be excluded from the Unions negotiating panel.[12] However, Umali was retained as a member thereof.

On March 12, 1993, the parties met and set the ground rules for the negotiation. Diokno suggested that the negotiation be kept a family affair. The proposed noneconomic provisions of the CBA were discussed first.[13] Even during the final reading of the non-economic provisions on May 4, 1993, there were still provisions on which the Union and the Bank could not agree. Temporarily, the notation DEFERRED was placed therein. Towards the end of the meeting, the Union manifested that the same should be changed to DEADLOCKED to indicate that such items remained unresolved. Both parties agreed to place the notation DEFERRED/DEADLOCKED.[14]

On May 18, 1993, the negotiation for economic provisions commenced. A presentation of the basis of the Unions economic proposals was made. The next meeting, the Bank made a similar presentation. Towards the end of the Banks presentation, Umali requested the Bank to validate the Unions guestimates, especially the figures for the rank and file staff.[15] In the succeeding meetings, Umali chided the Bank for the insufficiency of its counter-proposal on the provisions on salary increase, group hospitalization, death assistance and dental benefits. He reminded the Bank, how the Union got what it wanted in 1987, and stated that if need be, the Union would go through the same route to get what it wanted.[16]

Upon the Banks insistence, the parties agreed to tackle the economic package item by item. Upon the Unions suggestion, the Bank indicated which provisions it would accept, reject, retain and agree to discuss.[17] The Bank suggested that the Union prioritize its economic proposals, considering that many of such economic provisions remained unresolved. The Union, however, demanded that the Bank make a revised itemized proposal.

In the succeeding meetings, the Union made the following proposals:

Wage Increase: 1st Year Reduced from 45% to 40% 2nd Year - Retain at 20% Total = 60%

Group Hospitalization Insurance: Maximum disability benefit reduced from P75,000.00 to P60,000.00 per illness annually

Death Assistance: For the employee -- Reduced from P50,000.00 to P45,000.00 For Immediate Family Member -- Reduced from P30,000.00 to P25,000.00

Dental and all others -- No change from the original demand.[18]

In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank would not make the necessary revisions on its counter-proposal, it would be best to seek a third party assistance.[19] After the break, the Bank presented its revised counter-proposal[20] as follows:

Wage Increase : 1st Year from P1,000 to P1,050.00 2nd Year P800.00 no change

Group Hospitalization Insurance From: P35,000.00 per illness To : P35,000.00 per illness per year

Death Assistance For employee From: P20,000.00 To : P25,000.00 Dental Retainer Original offer remains the same[21]

The Union, for its part, made the following counter-proposal:

Wage Increase: 1st Year - 40% 2nd Year - 19.5%

Group Hospitalization Insurance From: P60,000.00 per year To : P50,000.00 per year

Dental: Temporary Filling/ P150.00 Tooth Extraction Permanent Filling 200.00 Prophylaxis 250.00 Root Canal From P2,000 per tooth To: 1,800.00 per tooth

Death Assistance: For Employees: From P45,000.00 to P40,000.00 For Immediate Family Member: From P25,000.00 to P20,000.00.[22]

The Unions original proposals, aside from the above-quoted, remained the same. Another set of counter-offer followed:

Management Wage Increase 1st Year P1,050.00 2nd Year 850.00

Union

40% 19.0%[23]

Diokno stated that, in order for the Bank to make a better offer, the Union should clearly identify what it wanted to be included in the total economic package. Umali replied that it was impossible to do so because the Banks counter-proposal was unacceptable. He furthered asserted that it would have been easier to bargain if the atmosphere was the same as before, where both panels trusted each other. Diokno requested the Union panel to refrain from involving personalities and to instead focus on the negotiations.[24] He suggested that in order to break the impasse, the Union should prioritize the items it wanted to iron out. Divinagracia stated that the Bank should make the first move and make a list of items it wanted to be included in the economic package. Except for the provisions on signing bonus and uniforms, the Union and the Bank failed to agree on the remaining economic provisions of the CBA. The Union declared a deadlock[25]and filed a Notice of Strike before the National Conciliation and Mediation Board (NCMB) on June 21, 1993, docketed as NCMB-NCR-NS-06380-93.[26]

On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the Arbitration Branch of the National Labor Relations Commission (NLRC) in Manila, docketed as NLRC Case No. 00-06-04191-93 against the Union on June 28, 1993. The Bank alleged that the Union violated its duty to bargain, as

it did not bargain in good faith. It contended that the Union demanded sky high economic demands, indicative of blue-sky bargaining.[27] Further, the Union violated its no strike- no lockout clause by filing a notice of strike before the NCMB. Considering that the filing of notice of strike was an illegal act, the Union officers should be dismissed. Finally, the Bank alleged that as a consequence of the illegal act, the Bank suffered nominal and actual damages and was forced to litigate and hire the services of the lawyer.[28]

On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R. Confesor, pursuant to Article 263(g) of the Labor Code, issued an Order assuming jurisdiction over the labor dispute at the Bank. The complaint for ULP filed by the Bank before the NLRC was consolidated with the complaint over which the SOLE assumed jurisdiction. After the parties submitted their respective position papers, the SOLE issued an Order on October 29, 1993, the dispositive portion of which is herein quoted:

WHEREFORE, the Standard Chartered Bank and the Standard Chartered Bank Employees Union NUBE are hereby ordered to execute a collective bargaining agreement incorporating the dispositions contained herein. The CBA shall be retroactive to 01 April 1993 and shall remain effective for two years thereafter, or until such time as a new CBA has superseded it. All provisions in the expired CBA not expressly modified or not passed upon herein are deemed retained while all new provisions which are being demanded by either party are deemed denied, but without prejudice to such agreements as the parties may have arrived at in the meantime.

The Banks charge for unfair labor practice which it originally filed with the NLRC as NLRC-NCR Case No. 00-06-04191-93 but which is deemed consolidated herein, is dismissed for lack of merit. On the other hand, the Unions charge for unfair labor practice is similarly dismissed.

Let a copy of this order be furnished the Labor Arbiter in whose sala NLRC-NCR Case No. 0006-04191-93 is pending for his guidance and appropriate action.[29]

The SOLE gave the following economic awards:

1.

Wage Increase:

a) To be incorporated to present salary rates: Fourth year : 7% of basic monthly salary Fifth year : 5% of basic monthly salary based on the 4th year adjusted salary

b)

Additional fixed amount:

Fourth year : P600.00 per month Fifth year : P400.00 per month

2. a) c)

Group Insurance Hospitalization : P45,000.00 b) Accident : P130,000.00 Life : P130,000.00

3.

Medicine Allowance

Fourth year : P5,500.00 Fifth year : P6,000.00

4.

Dental Benefits

Provision of dental retainer as proposed by the Bank, but without diminishing existing benefits

5.

Optical Allowance

Fourth year: P2,000.00 Fifth year : P2,500.00

6.

Death Assistance

a) b)

Employee : P30,000.00 Immediate Family Member : P5,000.00

7.

Emergency Leave Five (5) days for each contingency

8. a) b)

Loans Car Loan : P200,000.00 Housing Loan : It cannot be denied that the costs attendant to having ones

own home have tremendously gone up. The need, therefore, to improve on this benefit cannot be overemphasized. Thus, the management is urged to increase the existing and allowable housing loan that the Bank extends to its employees to an amount that will give meaning and substance to this CBA benefit.[30]

The SOLE dismissed the charges of ULP of both the Union and the Bank, explaining that both parties failed to substantiate their claims. Citing National Labor Union v. Insular-Yebana Tobacco Corporation,[31] the SOLE stated that ULP charges would prosper only if shown to have directly prejudiced the public interest.

Dissatisfied, the Union filed a motion for reconsideration with clarification, while the Bank filed a motion for reconsideration. On December 16, 1993, the SOLE issued a Resolution denying the motions. The Union filed a second motion for reconsideration, which was, likewise, denied on February 10, 1994.

On March 22, 1994, the Bank and the Union signed the CBA.[32] Immediately thereafter, the wage increase was effected and the signing bonuses based on the increased wage were distributed to the employees covered by the CBA.

The Present Petition

On April 28, 1994, the Union filed this petition for certiorari under Rule 65 of the Rules of Procedure alleging as follows:

A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THE UNIONS CHARGE OF UNFAIR LABOR PRACTICE IN VIEW OF THE CLEAR EVIDENCE OF RECORD AND ADMISSIONS PROVING THE UNFAIR LABOR PRACTICES CHARGED.[33]

B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON OTHER UNFAIR LABOR PRACTICES CHARGED.[34] C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THE CHARGES OF UNFAIR LABOR PRACTICES ON THE GROUND THAT NO PROOF OF INJURY TO THE PUBLIC INTEREST WAS PRESENTED.[35]

The Union alleges that the SOLE acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it found that the Bank did not commit unfair labor practice when it interfered with the Unions choice of negotiator. It argued that, Dioknos suggestion that the negotiation be limited as a family affair was tantamount to suggesting that Federation President Jose Umali, Jr. be excluded from the Unions negotiating panel. It further argued that contrary to the ruling of the public respondent, damage or injury to the public interest need not be present in order for unfair labor practice to prosper.

The Union, likewise, pointed out that the public respondent failed to rule on the ULP charges arising from the Banks surface bargaining. The Union contended that the Bank merely went through the motions of collective bargaining without the intent to reach an agreement, and made bad faith proposals when it announced that the parties should begin from a clean slate. It argued that the Bank opened the political provisions up for grabs, which had the effect of diminishing or obliterating the gains that the Union had made.

The Union also accused the Bank of refusing to disclose material and necessary data, even after a request was made by the Union to validate its guestimates.

In its Comment, the Bank prayed that the petition be dismissed as the Union was estopped, considering that it signed the Collective Bargaining Agreement (CBA) on April 22, 1994. It asserted that contrary to the Unions allegations, it was the Union that committed ULP when negotiator Jose Umali, Jr. hurled invectives at the Banks head negotiator, Cielito Diokno, and demanded that she be excluded from the Banks negotiating team. Moreover, the Union engaged in blue-sky bargaining and isolated the no strike-no lockout clause of the existing CBA.

The Office of the Solicitor General, in representation of the public respondent, prayed that the petition be dismissed. It asserted that the Union failed to prove its ULP charges and that the public respondent did not commit any grave abuse of discretion in issuing the assailed order and resolutions.

The Issues

The issues presented for resolution are the following: (a) whether or not the Union was able to substantiate its claim of unfair labor practice against the Bank arising from the latters alleged interference with its choice of negotiator; surface bargaining; making bad faith non- economic proposals; and refusal to furnish the Union with copies of the relevant data; (b) whether or not the public respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction when she issued the assailed order and resolutions; and, (c) whether or not the petitioner is estopped from filing the instant action.

The Courts Ruling

The petition is bereft of merit. Interference under Article 248 (a) of the Labor Code

The petitioner asserts that the private respondent committed ULP, i.e., interference in the selection of the Unions negotiating panel, when Cielito Diokno, the Banks Human Resource Manager, suggested to the Unions President Eddie L. Divinagracia that Jose P. Umali, Jr., President of the NUBE, be excluded from the Unions negotiating panel. In support of its claim, Divinagracia executed an affidavit, stating that prior to the commencement of the negotiation, Diokno approached him and suggested the exclusion of Umali from the Unions negotiating panel, and that during the first meeting, Diokno stated that the negotiation be kept a family affair.

Citing the cases of U.S. Postal Service[36] and Harley Davidson Motor Co., Inc., AMF,[37] the Union claims that interference in the choice of the Unions bargaining panel is tantamount to ULP.

In the aforecited cases, the alleged ULP was based on the employers violation of Section 8(a)(1) and (5) of the National Labor Relations Act (NLRA),[38] which pertain to the interference, restraint or coercion of the employer in the employees exercise of their rights to self- organization and to bargain collectively through representatives of their own choosing; and the refusal of the employer to bargain collectively with the employees representatives. In both cases, the National Labor Relations Board held that upon the employers refusal to engage in negotiations with the Union for collective-bargaining contract when the Union includes a person who is not an employee, or one who is a member or an official of

other labor organizations, such employer is engaged in unfair labor practice under Section 8(a)(1) and (5) of the NLRA.

The Union further cited the case of Insular Life Assurance Co., Ltd. Employees Association NATU vs. Insular Life Assurance Co., Ltd.,[39] wherein this Court said that the test of whether an employer has interfered with and coerced employees in the exercise of their right to selforganization within the meaning of subsection (a)(1) is whether the employer has engaged in conduct which it may reasonably be said, tends to interfere with the free exercise of employees rights under Section 3 of the Act.[40] Further, it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that antiunion conduct of the employer does have an adverse effect on self-organization and collective bargaining.[41]

Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF ASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the Philippines is a signatory, workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to job organizations of their own choosing without previous authorization.[42] Workers and employers organizations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom to organize their administration and activities and to formulate their programs.[43] Article 2 of ILO Convention No. 98 pertaining to the Right to Organize and Collective Bargaining, provides:

Article 2

1. Workers and employers organizations shall enjoy adequate protection against any acts or interference by each other or each others agents or members in their establishment, functioning or administration.

2. In particular, acts which are designed to promote the establishment of workers organizations under the domination of employers or employers organizations or to support workers organizations by financial or other means, with the object of placing such organizations under the control of employers or employers organizations within the meaning of this Article.

The aforcited ILO Conventions are incorporated in our Labor Code, particularly in Article 243 thereof, which provides:

ART. 243. COVERAGE AND EMPLOYEES RIGHT TO SELF-ORGANIZATION. All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical or educational institutions whether operating for profit or not, shall have the right to self- organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection.

and Articles 248 and 249 respecting ULP of employers and labor organizations.

The said ILO Conventions were ratified on December 29, 1953. However, even as early as the 1935 Constitution,[44] the State had already expressly bestowed protection to labor as part of the general provisions. The 1973 Constitution,[45] on the other hand, declared it as a policy of the state to afford protection to labor, specifying that the workers rights to self-organization, collective bargaining, security of tenure, and just and humane conditions of work would be assured. For its part, the 1987 Constitution, aside from making it a policy to protect the rights of workers and promote their welfare,[46] devotes an entire section, emphasizing its mandate to afford protection to labor, and highlights the principle of shared responsibility between workers and employers to promote industrial peace.[47]

Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer interferes, restrains or coerces employees in the exercise of their right to self-organization or the right to form association. The right to self-organization necessarily includes the right to collective bargaining.

Parenthetically, if an employer interferes in the selection of its negotiators or coerces the Union to exclude from its panel of negotiators a representative of the Union, and if it can be inferred that the employer adopted the said act to yield adverse effects on the free exercise to right to self-organization or on the right to collective bargaining of the employees, ULP under Article 248(a) in connection with Article 243 of the Labor Code is committed.

In order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the claim. Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[48] In the case at bar, the Union bases its claim of interference on the alleged suggestions of Diokno to exclude Umali from the Unions negotiating panel.

The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that the Bank consciously adopted such act to yield adverse effects on the free exercise of the right to self-organization and collective bargaining of the employees, especially considering that such was undertaken previous to the commencement of the negotiation and simultaneously with Divinagracias suggestion that the bank lawyers be excluded from its negotiating panel. The records show that after the initiation of the collective bargaining process, with the inclusion of Umali in the Unions negotiating panel, the negotiations pushed through. The complaint was made only on August 16, 1993 after a deadlock was declared by the Union on June 15, 1993.

It is clear that such ULP charge was merely an afterthought. The accusation occurred after the arguments and differences over the economic provisions became heated and the parties had become frustrated. It happened after the parties started to involve personalities. As the public respondent noted, passions may rise, and as a result, suggestions given under less adversarial situations may be colored with unintended meanings.[49] Such is what appears to have happened in this case.

The Duty to Bargain

Collectively

If at all, the suggestion made by Diokno to Divinagracia should be construed as part of the normal relations and innocent communications, which are all part of the friendly relations between the Union and Bank.

The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went through the motions of bargaining without any intent of reaching an agreement, as evident in the Banks counter-proposals. It explained that of the 34 economic provisions it made, the Bank only made 6 economic counterproposals. Further, as borne by the minutes of the meetings, the Bank, after indicating the economic provisions it had rejected, accepted, retained or were open for discussion, refused to make a list of items it agreed to include in the economic package.

Surface bargaining is defined as going through the motions of negotiating without any legal intent to reach an agreement.[50] The resolution of surface bargaining allegations never presents an easy issue. The determination of whether a party has engaged in unlawful surface bargaining is usually a difficult one because it involves, at bottom, a question of the intent of the party in question, and usually such intent can only be inferred from the totality of the challenged partys conduct both at and away from the bargaining table.[51] It involves the question of whether an employers conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining.[52]

The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank had any intention of violating its duty to bargain with the Union. Records show that after the Unionsent its proposal to the Bank on February 17, 1993, the latter replied with a list of its counter-proposals on February 24, 1993. Thereafter, meetings were set for the settlement of their differences. The minutes of the meetings show that both the Bank and the Union exchanged economic and non-economic proposals and counter-proposals.

The Union has not been able to show that the Bank had done acts, both at and away from the bargaining table, which tend to show that it did not want to reach an

agreement with the Union or to settle the differences between it and the Union. Admittedly, the parties were not able to agree and reached a deadlock. However, it is herein emphasized that the duty to bargain does not compel either party to agree to a proposal or require the making of a concession.[53] Hence, the parties failure to agree did not amount to ULP under Article 248(g) for violation of the duty to bargain.

We can hardly dispute this finding, for it finds support in the evidence. The inference that respondents did not refuse to bargain collectively with the complaining union because they accepted some of the demands while they refused the others even leaving open other demands for future discussion is correct, especially so when those demands were discussed at a meeting called by respondents themselves precisely in view of the letter sent by the union on April 29, 1960[54]

In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank made bad faith provisions has no leg to stand on. The records show that the Banks counter- proposals on the non-economic provisions or political provisions did not put up for grabs the entire work of the Union and its predecessors. As can be gleaned from the Banks counter- proposal, there were many provisions which it proposed to be retained. The revisions on the other provisions were made after the parties had come to an agreement. Far from buttressing theUnions claim that the Bank made bad-faith proposals on the non-economic provisions, all these, on the contrary, disprove such allegations.

We, likewise, find that the Union failed to substantiate its claim that the Bank refused to furnish the information it needed.

While the refusal to furnish requested information is in itself an unfair labor practice, and also supports the inference of surface bargaining,[55] in the case at bar, Umali, in a meeting dated May 18, 1993, requested the Bank to validate its guestimates on the data of the rank and file. However, Umali failed to put his request in writing as provided for in Article 242(c) of the Labor Code:

Article 242. Rights of Legitimate Labor Organization

(c) To be furnished by the employer, upon written request, with the annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representatives of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective negotiation;

The Union, did not, as the Labor Code requires, send a written request for the issuance of a copy of the data about the Banks rank and file employees. Moreover, as alleged by the Union, the fact that the Bank made use of the aforesaid guestimates, amounts to a validation of the data it had used in its presentation.

No Grave Abuse of Discretion On the Part of the Public Respondent

The special civil action for certiorari may be availed of when the tribunal, board, or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law for the purpose of annulling the proceeding.[56] Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility which must be so patent and gross as to amount to an invasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Mere abuse of discretion is not enough.[57]

While it is true that a showing of prejudice to public interest is not a requisite for ULP charges to prosper, it cannot be said that the public respondent acted in capricious and whimsical exercise of judgment, equivalent to lack of jurisdiction or excess thereof. Neither was it shown that the public respondent exercised its power in an arbitrary and despotic manner by reason of passion or personal hostility.

Estoppel not Applicable In the Case at Bar

The respondent Bank argues that the petitioner is estopped from raising the issue of ULP when it signed the new CBA.

Article 1431 of the Civil Code provides:

Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

A person, who by his deed or conduct has induced another to act in a particular manner, is barred from adopting an inconsistent position, attitude or course of conduct that thereby causes loss or injury to another.[58]

In the case, however, the approval of the CBA and the release of signing bonus do not necessarily mean that the Union waived its ULP claim against the Bank during the past negotiations. After all, the conclusion of the CBA was included in the order of the SOLE, while the signing bonus was included in the CBA itself. Moreover, the Union twice filed a motion for reconsideration respecting its ULP charges against the Bank before the SOLE.

The Union Did Not Engage In Blue-Sky Bargaining

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or unreasonable proposals.[59] The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. The minutes of the meeting show that the Union based its economic proposals on data of rank and file employees and the

prevailing economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the Bank in the Asian region.

In sum, we find that the public respondent did not act with grave abuse of discretion amounting to lack or excess of jurisdiction when it issued the questioned order and resolutions. While the approval of the CBA and the release of the signing bonus did not estop the Union from pursuing its claims of ULP against the Bank, we find that the latter did not engage in ULP. We, likewise, hold that the Union is not guilty of ULP.

IN LIGHT OF THE FOREGOING, the October 29, 1993 Order and December 16, 1993 and February 10, 1994 Resolutions of then Secretary of Labor Nieves R. Confesor are AFFIRMED. The Petition is hereby DISMISSED.

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

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), respondents. Ablan and Associates for petitioner. Abdulcadir T. Ibrahim for private respondent.

CUEVAS, J.:

Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g) of Article 249 2 of the New Labor Code, 3 and declared the draft proposal of the Union for a collective bargaining agreement as the governing collective bargaining agreement between the employees and the management.

The pertinent background facts are as follows:

In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for short), a legitimate late labor federation, won and was subsequently certified in a resolution dated November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive bargaining agent of the rank-andfile employees of Sweden Ice Cream Plant (Company for short). The Company's motion for reconsideration of the said resolution was denied on January 25, 1978.

Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies of its proposed collective bargaining agreement. At the same time, it requested the Company for its counter proposals. Eliciting no response to the aforesaid request, the Union again wrote the Company reiterating its request for collective bargaining negotiations and for the Company to furnish them with its counter proposals. Both requests were ignored and remained unacted upon by the Company.

Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic issues in collective bargaining. 5

Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to certify the case to the National Labor Relations Commission (NLRC) for compulsory arbitration pursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case was assigned, set the initial hearing for April 29, 1979. For failure however, of the

parties to submit their respective position papers as required, the said hearing was cancelled and reset to another date. Meanwhile, the Union submitted its position paper. The Company did not, and instead requested for a resetting which was granted. The Company was directed anew to submit its financial statements for the years 1976, 1977, and 1978.

The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as counsel for the Company only to request for another postponement allegedly for the purpose of acquainting himself with the case. Meanwhile, the Company submitted its position paper on May 28, 1979.

When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty. Panganiban then requested for another postponement which the labor arbiter denied. He also ruled that the Company has waived its right to present further evidence and, therefore, considered the case submitted for resolution.

On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations Commission. On July 20, 1979, the National Labor Relations Commission rendered its decision, the dispositive portion of which reads as follows:

WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended. Further, the draft proposal for a collective bargaining agreement (Exh. "E ") hereto attached and made an integral part of this decision, sent by the Union (Private respondent) to the respondent (petitioner herein) and which is hereby found to be reasonable under the premises, is hereby declared to be the collective agreement which should govern the relationship between the parties herein.

SO ORDERED. (Emphasis supplied)

Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor Relations Commission acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in rendering the challenged decision. On August 4, 1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however, the Resolution of dismissal was reconsidered and the petition was given due course in a Resolution dated April 1, 1981.

Petitioner Company now maintains that its right to procedural due process has been violated when it was precluded from presenting further evidence in support of its stand and when its request for further postponement was denied. Petitioner further contends that the National Labor Relations Commission's finding of unfair labor practice for refusal to bargain is not supported by law and the evidence considering that it was only on May 24, 1979 when the Union furnished them with a copy of the proposed Collective Bargaining Agreement and it was only then that they came to know of the Union's demands; and finally, that the Collective Bargaining Agreement approved and adopted by the National Labor Relations Commission is unreasonable and lacks legal basis.

The petition lacks merit. Consequently, its dismissal is in order. Collective bargaining which is defined as negotiations towards a collective agreement, 6 is one of the democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. So much so that 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.

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. 7 The mechanics of collective bargaining is 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 accordance 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 . ... all of which preconditions are undisputedly present in the instant case.

From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the Union has a valid cause to complain against its (Company's) attitude, the totality of which is indicative of the latter's disregard of, and failure to live up to, what is enjoined by the Labor Code to bargain in good faith.

We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed Collective Bargaining Agreement, to the Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. 8 A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is specially true where the Union's request for a counter proposal is left unanswered. 9 Even during the period of compulsory arbitration before the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its opposition thereto.10

The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications 11the rule had been laid down that "unfair labor practice is committed when it is shown that the respondent employer, after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal This doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while the law does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation with

an open mind and make a reasonable effort to reach a common ground of agreement As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the issue of due process claiming, that it was denied the right to be heard and present its side when the Labor Arbiter denied the Company's motion for further postponement.

Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had not even honored respondent Union with any reply to the latter's successive letters, all geared towards bringing the Company to the bargaining table. It did not even bother to furnish or serve the Union with its counter proposal despite persistent requests made therefor. Certainly, the moves and overall behavior of petitioner-company were in total derogation of the policy enshrined in the New Labor Code which is aimed towards expediting settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.

Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which was approved and adopted by the NLRC is a total nullity for it lacks the company's consent, much less its argument that once the Collective Bargaining Agreement is implemented, the Company will face the prospect of closing down because it has to pay a staggering amount of economic benefits to the Union that will equal if not exceed its capital. Such a stand and the evidence in support thereof should have been presented before the Labor Arbiter which is the proper forum for the purpose.

We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures. 13 More so, as in the instant case, where the intervention of the National Labor Relations Commission was properly sought for after conciliation efforts undertaken by the BLR failed. The instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to determine the reasonableness of the terms and conditions of employment embodied in any Collective Bargaining Agreement. To that extent, utmost deference to its findings of

reasonableness of any Collective Bargaining Agreement as the governing agreement by the employees and management must be accorded due respect by this Court.

WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27, 1980, is LIFTED and SET ASIDE.

No pronouncement as to costs. SO ORDERED. [G.R. No. 127598. January 27, 1999]

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

D E C I S I O N MARTINEZ, J.:

In this petition for certiorari, the Manila Electric Company (MERALCO) seeks to annul the orders of the Secretary of labor dated August 19, 1996 and December 28, 1996, wherein the Secretary required MERALCO and its rank and file union- the Meralco Workers Association (MEWA) to execute a collective bargaining agreement (CBA) for the remainder of the parties 1992-1997 CBA cycle, and to incorporate in this new CBA the Secretarys dispositions on the disputed economic and non-economic issues.

MEWA is the duly recognized labor organization of the rank-and-file employees of

MERALCO.

On September 7, 1995, MEWA informed MERALCO of its intention to re-negotiate the terms and conditions of their existing 1992-1997 Collective Bargaining Agreement (CBA) covering the remaining period of two years starting from December 1, 1995 to November 30, 1997.[1] MERALCO signified its willingness to re-negotiate through its letter dated October 17, 1995[2] and formed a CBA negotiating panel for the purpose. On November 10, 1995, MEWA submitted its proposal[3] to MERALCO, which, in turn, presented a counter- proposal. Thereafter, collective bargaining negotiations proceeded. However, despite the series of meetings between the negotiating panels of MERALCO and MEWA, the parties failed to arrive at terms and conditions acceptable to both of them.

On April 23, 1996, MEWA filed a Notice of Strike with the National Capital Region Branch of the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment (DOLE) which was docketed as NCMB-NCR-NS-04-152-96, on the grounds of bargaining deadlock and unfair labor practices. The NCMB then conducted a series of conciliation meetings but the parties failed to reach an amicable settlement. Faced with the imminence of a strike, MERALCO on May 2, 1996, filed an Urgent Petition[4] with the Department of Labor and Employment which was docketed as OS-AJ No. 0503[1]96 praying that the Secretary assume jurisdiction over the labor dispute and to enjoin the striking employees to go back to work.

The Labor Secretary granted the petition through its Order[5] of May 8, 1996, the dispositive portion of which reads:

WHEREFORE, premises considered, this Office now assumes jurisdiction over the labor dispute obtaining between the parties pursuant to Article 263 (g) of the Labor Code. Accordingly, the parties are here enjoined from committing any act that may exacerbate the situation. To speed up the resolution of

the dispute, the parties are also directed to submit their respective Position Papers within ten (10) days from receipt. Undersecretary Jose M. Espanol, Jr. is deputized to conduct conciliation conferences between the parties to bridge their differences and eventually hammer out a solution that is mutually acceptable. He shall be assisted by the Legal Service.

SO ORDERED.

Thereafter, the parties submitted their respective memoranda and on August 19, 1996, the Secretary resolved the labor dispute through an Order,[6] containing the following awards:

ECONOMIC DEMANDS

Wage increase - P2,300.00 for the first year covering the period from December 1, 1995 to November 30, 1996 - P2,200.00 for the second year covering the period December 1, 1996 to November 30, 1997.

Red Circle Rate (RCR) Allowance- all RCR allowances (promotional increases that go beyond the maximum range of a job classification salary) shall be integrated into the basic salary of employees effective December 1, 1995.

Longevity Allowance- the integration of the longevity allowance into the basic wage is denied; the present policy is maintained.

Longevity Increase- the present longevity bonus is maintained but the bonus shall be incorporated into the new CBA.

Sick Leave- MEWAs demand for upgrading is denied; the companys present policy is maintained. However, those who have not used the sick leave benefit during a particular year shall be entitled to a one-day sick leave incentive.

Sick leave reserve- the present reserve of 25 days shall be reduced to 15 days; the employee has the option either to convert the excess of 10 days to cash or let it remain as long as he wants. In case he opts to let it remain, he may later on convert it to cash at his retirement or separation.

Vacation Leave - MEWAs demand for upgrading denied & the companys present policy is maintained which must be incorporated into the new CBA but scheduled vacation leave may be rounded off to one full day at a time in case of a benefit involving a fraction of a day.

Union Leave- of MEWAs officers, directors or stewards assigned to perform union duties or legitimate union activity is increased from 30 to 40 Mondays per month.

Maternity, Paternity and Funeral leaves- the existing policy is to be maintained and must be incorporated in the new CBA unless a new law granting paternity leave benefit is enacted which is superior to what the company has already granted.

Birthday Leave - unions demand is granted. If birthday falls on the employees rest day or on a non-working holiday, the worker shall be entitled to go on leave with pay on the next working day. Group Hospitalization & Surgical Insurance Plan (GHSIP) and Health Maintenance Plan (HMP)- present policy is maintained insofar as the cost sharing is concerned70% for the Company and 30% for MEWA.

Health Maintenance Plan (HMP) for dependents - subsidized dependents increased from three to five dependents.

Longevity Bonus- is increased from P140.00 to P200.00 for every year of service to be received by the employee after serving the Company for 5 years.

Christmas Bonus and Special Christmas Grant- MEWAs demand of one month salary as Christmas Bonus and two months salary as Special Christmas Grant is granted and to be incorporated in the new CBA.

Midyear Bonus- one months pay to be included in the CBA.

Anniversary Bonus - unions demand is denied.

Christmas Gift Certificate - company has the discretion as to whether it will give it to its employees.

Retirement Benefits:

a.

Full retirement-present policy is maintained;

b.

one cavan of rice per month is granted to retirees;

c.

special retirement leave and allowance-present policy is maintained;

d. HMP coverage for retirees- HMP coverage is granted to retirees who have not reached the age of 70, with MERALCO subsidizing 100% of the monthly premium; those over 70 are entitled to not more than 30 days of hospitalization at the J.F. Cotton Hospital with the company shouldering the entire cost.

e.

HMP coverage for retirees dependents is denied

f.

Monthly pension of P3,000.00 for each retiree is denied.

g.

Death benefit for retirees beneficiaries is denied.

Optional retirement - unions demand is denied; present policy is maintained; employee is eligible for optional retirement if he has rendered at least 18 years of service.

Dental, Medical and Hospitalization Benefits- grant of all the allowable medical, surgical, dental and annual physical examination benefits, including free medicine whenever the same is not available at the JFCH.

Resignation benefits- unions demand is denied. Night work- union demand is denied but present policy must be incorporated in CBA.

Shortswing- work in another shift within the same day shall be considered as the employees work for the following day and the employee shall be given additional four (4) hours straight time and the applicable excess time premium if he works beyond 8 hours in the other shift.

High Voltage allowance- is increased from P45.00 to P55.00 to be given to any employee authorized by the Safety Division to perform work on or near energized bare lines & bus including stockman drivers & crane operators and other crew members on ground.

High Pole Allowance- is increased from P30.00 to P40.00 to be given to those authorized to climb poles up to at least 60 ft. from the ground. Members of the team including stockman drivers, crane operators and other crew members on the ground, are entitled to this benefit.

Towing Allowance- where stockmen drive tow trailers with long poles and equipment on board, they shall be entitled to a towing allowance of P20.00 whether they perform the job on regular shift or on overtime.

Employees Cooperative- a loan of P3 M seed money is granted to the proposed establishment of a cooperative, payable in twenty (20) years starting one year from the start of operations. Holdup Allowance- the union demand is denied; the present policy shall be maintained. Meal and Lodging Allowance- shall be increased effective December 1, 1995 as follows: Breakfast - from P25.00 to P35.00 Lunch Dinner Lodging - from P35.00 to P45.00 - from P35.00 to P45.00 - from P135.00 to P180.00 a night in all MERALCO franchise areas

Payroll Treatment for Accident while on Duty- an employee shall be paid his salary and allowance if any is due plus average excess time for the past 12 months from the time of the accident up to the time of full recovery and placing of the employee back to normal duty or an allowance of P2,000.00, whichever is higher.

Housing and Equity Assistance Loan- is increased to P60,000.00; those who have already availed of the privilege shall be allowed to get the difference.

Benefits for Collectors:

a. Company shall reduce proportionately the quota and monthly average product level (MAPL) in terms of equivalent bill assignment when an employee is on sick leave and paid vacation leave.

b. When required to work on Saturdays, Sundays and holidays, an employee shall receive P60.00 lunch allowance and applicable transportation allowance

as determined by the Company and shall also receive an additional compensation to one day fixed portion in addition to lunch and transportation allowance. c. The collector shall be entitled to an incentive pay of P25.00 for every delinquent account disconnected.

d. When a collector voluntarily performs other work on regular shift or overtime, he shall be entitled to remuneration based on his computed hourly compensation and the reimbursement of actually incurred transportation expenses.

e.

Collectors shall be provided with bobcat belt bags every year

f. to

Collectors cash bond shall be deposited under his capital contribution

MESALA.

g. Collectors quota and MAPL shall be proportionately reduced during typhoons, floods, earthquakes and other similar force majeure events when it is impossible for a collector to perform collection work.

Political Demands:

a. Scope of the collective bargaining unit- the collective bargaining unit shall be composed of all regular rank-and-file employees hired by the company in all its offices and operative centers throughout its franchise area and those it may employ by reason of expansion, reorganization or as a result of operational exigencies.

b.

Union recognition and security -

i. The union shall be recognized by the Company as sole and exclusive bargaining representative of the rank-and-file employees included in the bargaining unit. The Company shall agree to meet only with Union officers and its authorized

representatives on all matters involving the Union and all issues arising from the implementation and interpretation of the new CBA.

ii. The union shall meet with the newly regularized employees for a period not to exceed four (4) hours, on company time, to acquaint the new regular employees of the rights, duties and benefits of Union membership.

iii. The right of all rank-and-file employees to join the union shall be recognized in accordance with the maintenance of membership principle as a form of union security.

c.

Transfer of assignment and job security-

i. No transfer of an employee from one position to another shall be made if motivated by considerations of sex, race, creed, political and religious belief, seniority or union activity.

ii. If the transfer is due to the reorganization or decentralization, the distance from the employees residence shall be considered unless the transfer is accepted by the employee. If the transfer is extremely necessary, the transfer shall be made within the offices in the same district.

iii. Personnel hired through agencies or contractors to perform the work done by covered employees shall not exceed one month. If extension is necessary, the union shall be informed. But the Company shall not permanently contract out regular or permanent positions that are necessary in the normal operation of the Company.

d. Check off Union Dues- where the union increases its dues as approved by the Board of Directors, the Company shall check off such increase from the salaries of union members after the union submits check off authorizations signed by majority of the members. The Company shall honor only those individual authorizations

signed by the majority of the union members and collectively submitted by the union to the Companys Salary Administration.

e. Payroll Reinstatement- shall be in accordance with Article 223, p. 3 of the Labor Code.

f. Union Representation in Committees- the union is allowed to participate in policy formulation and in the decision-making process on matters affecting their rights and welfare, particularly in the Uniform Committee, the Safety Committee and other committees that may be formed in the future.

Signing Bonus- P4,000.00 per member of the bargaining unit for the conclusion of the CBA

Existing benefits already granted by the Company but which are not expressly or impliedly repealed in the new agreement shall remain subsisting and shall be included in the new agreement to be signed by the parties effective December 1, 1995.

On August 30, 1996, MERALCO filed a motion for reconsideration[7] alleging that the Secretary of Labor committed grave abuse of discretion amounting to lack or excess of jurisdiction:

1. in awarding to MEWA a package that would cost at least P1.142 billion, a package that is grossly excessive and exorbitant, would not be affordable to MERALCO and would imperil its viability as a public utility affected with national interest.

2. in ordering the grant of a P4,500.00 wage increase, as well as a new and improved fringe benefits, under the remaining two (2) years of the CBA for the rankand-file employees.

3. in ordering the incorporation into the CBA of all existing employee benefits, on the one hand, and those that MERALCO has unilaterally granted to its employees by virtue of voluntary company policy or practice, on the other hand.

4. in granting certain political demands presented by the union. 5. in ordering the CBA to be effective December 1995 instead of August 19, 1996 when he resolved the dispute.

MERALCO filed a supplement to the motion for reconsideration on September 18, 1995, alleging that the Secretary of Labor did not properly appreciate the effect of the awarded wages and benefits on MERALCOs financial viability.

MEWA likewise filed a motion asking the Secretary of Labor to reconsider its Order on the wage increase, leaves, decentralized filing of paternity and maternity leaves, bonuses, retirement benefits, optional retirement, medical, dental and hospitalization benefits, short swing and payroll treatment. On its political demands, MEWA asked the Secretary to rule its proposal to institute a Code of Discipline for its members and the unions representation in the administration of the Pension Fund.

On December 28, 1996, the Secretary issued an Order[8] resolving the parties separate motions, the modifications of the August 19, 1996 Order being highlighted hereunder: 1) Effectivity of Agreement - December 1, 1995 to November 30, 1997. Economic Demands

2) Wage Increase:

First year -

P2,200.00 per month; Second year - P2,200.00 per month.

3) Integration of Red Circle Rate (RCR) and Longevity Allowance into Basic Salary -the RCR allowance shall be integrated into the basic salary of employees as of August 19, 1996 (the date of the disputed Order).

4) Longevity Bonus - P170 per year of service starting from 10 years of continuous service.

5) Vacation Leave - The status quo shall be maintained as to the number of vacation leave but employees scheduled vacation may be taken one day at a time in the manner that this has been provided in the supervisory CBA.

6) Sick Leave Reserve - is reduced to 15 days, with any excess payable at the end of the year. The employee has the option to avail of this cash conversion or to accumulate his sick leave credits up to 25 days for conversion to cash at retirement or separation from the service.

7) Birthday Leave - the grant of a day off when an employees birthday falls on a non- working day is deleted.

8) Retirement Benefits for Retirees - The benefits granted shall be effective on August 19, 1996, the date of the disputed order up to November 30, 1997, which is the date the CBA expires and shall apply to those who are members of the bargaining unit at the time the award is made.

One sack of rice per quarter of the year shall be given to those retiring between August 19, 1996 and November 30, 1997. On HMP Coverage for Retirees- The parties maintain the status quo, that is, with the Company complying with the present arrangement and the obligations to retirees as is.

9) Medical, Dental and Hospitalization Benefits - The cost of medicine unavailable at the J.F. Cotton Hospital shall be in accordance with MERALCOs Memorandum dated September 14, 1976.

10) GHSIP and HMP for Dependents - The number of dependents to be subsidized shall be reduced from 5 to 4 provided that their premiums are proportionately increased.

11) Employees Cooperative - The original award of P3 million pesos as seed money for the proposed Cooperative is reduced to P1.5 million pesos.

12) Shortswing - the original award is deleted.

13) Payroll Treatment for Accident on Duty - Company ordered to continue its present practice on payroll treatment for accident on duty without need to pay the excess time the Union demanded.

Political Demands:

14) Scope of the collective bargaining unit - The bargaining unit shall be composed of all rank and file employees hired by the Company in accordance with the original Order.

15) Union recognition and security - The incorporation of a closed shop form of union security in the CBA; the Company is prohibited from entertaining individuals or groups of individuals only on matters that are exclusively within the domain of the union; the Company shall furnish the union with a complete list of newly regularized employees within a week from regularization so that the Union can meet these employees on the Unions and the employees own time.

16) Transfer of assignment and job security - Transfer is a prerogative of the Company but the transfer must be for a valid business reason, made in good faith and must be reasonably exercised. The CBA shall provide that No transfer of an employee from one position to another, without the employees written consent, shall be made if motivated by considerations of sex, race, creed, political and religious belief, age or union activity.

17) Contracting Out - The Company has the prerogative to contract out services provided that this move is based on valid business reasons in accordance with law, is made in good faith, is reasonably exercised and, provided further that if the contracting out involves more than six months, the Union must be consulted before its implementation.

18) Check off of union dues

In any increase of union dues or contributions for mandatory activities, the union must submit to the Company a copy of its board resolution increasing the union dues or authorizing such contributions; If a board resolution is submitted, the Company shall deduct union dues from all union members after a majority of the union members have submitted their individual written authorizations. Only those check-off authorizations submitted by the union shall be honored by the Company.

With respect to special assessments, attorneys fees, negotiation fees or any other extraordinary fees, individual authorizations shall be necessary before the company may so deduct the same.

19) Union Representation in Committees - The union is granted representation in the Safety Committee, the Uniform Committee and other committees of a similar nature and purpose involving personnel welfare, rights and benefits as well as duties.

Dissatisfied, petitioner filed this petition contending that the Secretary of Labor gravely abused his discretion:

1). . . in awarding wage increases of P2,200.00 for 1996 and P2,200.00 for 1997;

2) . . . in awarding the following economic benefits:

a. b. c. d.

Two months Christmas bonus; Rice Subsidy and retirement benefits for retirees; Loan for the employees cooperative; Social benefits such as GHSIP and HMP for dependents, employees

cooperative and housing equity assistance loan; e. Signing bonus; Sick leave reserve of 15

f. Integration of the Red Circle Rate Allowance g. days h. i. and j. Benefits for collectors The 40-day union leave; High pole/high voltage and towing allowance;

3) . . . in expanding the scope of the bargaining unit to all regular rank and file employees hired by the company in all its offices and operating centers and those it may employ by reason of expansion, reorganization or as a result of operational exigencies;

4) . . . in ordering for a closed shop when his original order for a maintenance of membership arrangement was not questioned by the parties;

5) . . . in ordering that Meralco should consult the union before any contracting out for more than six months;

6) . . . in decreeing that the union be allowed to have representation in policy and decision making into matters affecting personnel welfare, rights and benefits as well as duties;

7) . . . in ruling for the inclusion of all terms and conditions of employment in the collective bargaining agreement; 8) . . . in exercising discretion in determining the retroactivity of the CBA;

Both MEWA and the Solicitor General; on behalf of the Secretary of Labor, filed their comments to the petition. While the case was also set for oral argument on Feb 10, 1997, this hearing was cancelled due to MERALCO not having received the comment of the opposing parties. The parties were instead required to submit written memoranda, which they did. Subsequently, both petitioner and private respondent MEWA also filed replies to the opposing parties Memoranda, all of which We took into account in the resolution of this case.

The union disputes the allegation of MERALCO that the Secretary abused his discretion in issuing the assailed orders arguing that he acted within the scope of the powers granted him by law and by the Constitution. The union contends that any judicial review is limited to an examination of the Secretarys decisionmaking/discretion - exercising process to determine if this process was attended by some capricious or whimsical act that constitutes grave abuse; in the absence of such abuse, his findings - considering that he has both jurisdiction and expertise to make them - are valid.

The unions position is anchored on two premises:

First, no reviewable abuse of discretion could have attended the Secretarys arbitral award because the Secretary complied with constitutional norms in rendering the dispute award. The union posits that the yardstick for comparison and for the

determination of the validity of the Secretarys actions should be the specific standards laid down by the Constitution itself. To the union, these standards include the State policy on the promotion of workers welfare,[9] the principle of distributive justice,[10] the right of the State to regulate the use of property,[11] the obligation of the State to protect workers, both organized and unorganized, and insure their enjoyment of humane conditions of work and a living wage, and the right of labor to a just share in the fruits of production.[12]

Second, no reversible abuse of discretion attended the Secretarys decision because the Secretary took all the relevant evidence into account, judiciously weighed them, and rendered a decision based on the facts and law. Also, the arbitral award should not be reversed given the Secretarys expertise in his field and the general rule that findings of fact based on such expertise is generally binding on this Court.

To put matters in proper perspective, we go back to basic principles. The Secretary of Labors statutory power under Art. 263 (g) of the Labor Code to assume jurisdiction over a labor dispute in an industry indispensable to the national interest, and, to render an award on compulsory arbitration, does not exempt the exercise of this power from the judicial review that Sec. 1, Art. 8 of the Constitution mandates. This constitutional provision states:

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government.

Under this constitutional mandate, every legal power of the Secretary of Labor under the Labor Code, or, for that matter, any act of the Executive, that is attended by grave abuse of discretion is subject to review by this Court in an appropriate proceeding. To be sure, the existence of an executive power alone - whether granted by statute or by the Constitution - cannot exempt the executive action from judicial oversight, interference or reversal when grave abuse of discretion is, or is alleged to be, present. This is particularly true when constitutional norms are cited as the applicable yardsticks since this Court is the final interpreter of the meaning and intent of the Constitution.[13]

The extent of judicial review over the Secretary of Labors arbitral award is not limited to a determination of grave abuse in the manner of the secretarys exercise of his statutory powers. This Court is entitled to, and must - in the exercise of its judicial power - review the substance of the Secretarys award when grave abuse of discretion is alleged to exist in the award, i.e., in the appreciation of and the conclusions the Secretary drew from the evidence presented.

The natural and ever present limitation on the Secretarys acts is, of course, the Constitution. And we recognize that indeed the constitutional provisions the union cited are State policies on labor and social justice that can serve as standards in assessing the validity of a Secretary of Labors actions. However, we note that these provisions do not provide clear, precise and objective standards of conduct that lend themselves to easy application. We likewise recognize that the Constitution is not a lopsided document that only recognizes the interests of the working man; it too protects the interests of the property owner and employer as well.[14]

For these reasons - and more importantly because a ruling on the breadth and scope of the suggested constitutional yardsticks is not absolutely necessary in the disposition of this case - we shall not use these yardsticks in accordance with the time-honored practice of avoiding constitutional interpretations when a decision can be reached using non-constitutional standards. We have repeatedly held that one of the essential requisites for a successful judicial inquiry into constitutional questions is that the resolution of the constitutional question must be necessary in deciding the case.[15]

In this case we believe that the more appropriate and available standard - and one does not require a constitutional interpretation - is simply the standard of reasonableness. In laymans terms, reasonableness implies the absence of arbitrariness;[16] in legal parlance, this translates into the exercise of proper discretion and to the observance of due process. Thus, the question we have to answer in deciding this case is whether the Secretarys actions have been reasonable in light of the parties positions and the evidence they presented.

MEWAs second premise - i.e., that the Secretary duly considered the evidence presented - is the main issue that we shall discuss at length below. Additionally, MEWA implied that we should take great care before reading an abuse of discretion

on the part of the Secretary because of his expertise on labor issues and because his findings of fact deserve the highest respect from this Court.

This Court has recognized the Secretary of Labors distinct expertise in the study and settlement of labor disputes falling under his power of compulsory arbitration. [17] It is also well- settled that factual findings of labor administrative officials, if supported by substantial evidence, are entitled not only to great respect but even to finality.[18] We, therefore, have no difficulty in accepting the unions caveat on how to handle a Secretary of Labors arbitral award.

But at the same time, we also recognize the possibility that abuse of discretion may attend the exercise of the Secretarys arbitral functions; his findings in an arbitration case are usually based on position papers and their supporting documents (as they are in the present case), and not on the thorough examination of the parties contending claims that may be present in a court trial and in the face-to-face adversarial process that better insures the proper presentation and appreciation of evidence.[19] There may also be grave abuse of discretion where the board, tribunal or officer exercising judicial function fails to consider evidence adduced by the parties.[20]Given the parties positions on the justiciability of the issues before us, the question we have to answer is one that goes into the substance of the Secretarys disputed orders: Did the Secretary properly consider and appreciate the evidence presented before him?

We find, based on our consideration of the parties positions and the evidence on record, that the Secretary of Labor disregarded and misappreciated evidence, particularly with respect to the wage award. The Secretary of Labor apparently also acted arbitrarily and even whimsically in considering a number of legal points; even the Solicitor General himself considered that the Secretary gravely abused his discretion on at least three major points: (a) on the signing bonus issue; (b) on the inclusion of confidential employees in the rank and file bargaining unit, and (c) in mandating a union security closed-shop regime in the bargaining unit.

We begin with a discussion on the wages issue. The focal point in the consideration of the wage award is the projected net income for 1996 which became the basis for the 1996 wage award, which in turn - by extrapolation - became the basis for the (2nd Year) 1997 award. MERALCO projected that the net operating income for

1996 was 14.7% above the 1999 level or a total net operating income of 4.171 Billion, while the union placed the 1996 net operating income at 5.795 Billion.

MERALCO based its projection on the increase of the income for the first 6 months of 1996 over the same period in 1995. The union, on the other hand, projected that the 1996 income would increase by 29% to 35% because the consumption of electric power is at its highest during the last two quarters with the advent of the Yuletide season. The union likewise relied heavily on a newspaper report citing an estimate by an all Asia capital financial analyst that the net operating income would amount to 5.795 Billion.[21]

Based essentially on these considerations, the Secretary made the following computations and ordered his disputed wage award:

Projected net operating Income for 1996 5,795,000,000

Principals and interests

1,426,571,703

Dividends at 1995 rate

1,636,949,000

Net amount left with the Company

2,729,479,297

Add: Tax credit equivalent to 35% of labor cost

231,804,940

Companys net operating income

2,961,284,237

For 1997, the projected income is P7,613,612 which can easily absorb the incremental increase of P2,200 per month or a total of P4,500 during the last year of the CBA period.

xxx

xxx

xxx

An overriding aim is to estimate the amount that is left with the Company after the awarded wages and benefits and the companys customary obligations are paid. This amount can be the source of an item not found in the above computations but which the Company must provide for, that is - the amount the company can use for expansion.

Considering the expansion plans stated in the Companys Supplement that calls for capital expenditures of 6 billion, 6.263 billion and 5.802 billion for 1996, 1997 and 1998 respectively, We conclude that our original award of P2,300 per month for the first year and P2,200 for the second year will still leave much by way of retained income that can be used for expansion.[22] (Underscoring ours.)

We find after considering the records that the Secretary gravely abused his discretion in making this wage award because he disregarded evidence on record. Where he considered MERALCOs evidence at all, he apparently misappreciated this evidence in favor of claims that do not have evidentiary support. To our mind, the MERALCO projection had every reason to be reliable because it was based on actual and undisputed figures for the first six months of 1996.[23] On the other hand, the union projection was based on a speculation of Yuletide consumption that the union failed to substantiate. In fact, as against the unions unsubstantiated Yuletide consumption claim, MERALCO adduced evidence in the form of historical consumption data showing that a lengthy consumption does not tend to rise during the Christmas period.[24] Additionally, the All-Asia Capital Report was nothing more than a newspaper report that did not show any specific breakdown or computations. While the union claimed that its cited figure is based on MERALCOs 10-year income stream,[25] no data or computation of this 10-year stream appear in the record.

While the Secretary is not expected to accept the company-offered figures wholesale in determining a wage award, we find it a grave abuse of discretion to completely disregard data that is based on actual and undisputed record of financial

performance in favor of the third-hand and unfounded claims the Secretary eventually relied upon. At the very least, the Secretary should have properly justified his disregard of the company figures. The Secretary should have also reasonably insured that the figure that served as the starting point for his computation had some substantial basis.

Both parties extensely discussed the factors that the decision maker should consider in making a wage award. While We do not seek to enumerate in this decision the factors that should affect wage determination, we must emphasize that a collective bargaining dispute such as this one requires due consideration and proper balancing of the interests of the parties to the dispute and of those who might be affected by the dispute. To our mind, the best way in approaching this task holistically is to consider the available objective facts, including, where applicable, factors such as the bargaining history of the company, the trends and amounts of arbitrated and agreed wage awards and the companys previous CBAs, and industry trends in general. As a rule, affordability or capacity to pay should be taken into account but cannot be the sole yardstick in determining the wage award, especially in a public utility like MERALCO. In considering a public utility, the decision maker must always take into account the public interest aspects of the case; MERALCOs income and the amount of money available for operating expenses - including labor costs - are subject to State regulation. We must also keep in mind that high operating costs will certainly and eventually be passed on to the consuming public as MERALCO has bluntly warned in its pleadings.

We take note of the middle ground approach employed by the Secretary in this case which we do not necessarily find to be the best method of resolving a wage dispute. Merely finding the midway point between the demands of the company and the union, and splitting the difference is a simplistic solution that fails to recognize that the parties may already be at the limits of the wage levels they can afford. It may lead to the danger too that neither of the parties will engage in principled bargaining; the company may keep its position artificially low while the union presents an artificially high position, on the fear that a Solomonic solution cannot be avoided. Thus, rather than encourage agreement, a middle ground approach instead promotes a play safe attitude that leads to more deadlocks than to successfully negotiated CBAs. After considering the various factors the parties cited, we believe that the interests of both labor and management are best served by a wage increase of P1,900.00 per month for the first year and another P1,900.00 per month for the second year of the two-year CBA term. Our reason for this is that these increases sufficiently protects the interest of the worker as they are roughly 15% of the monthly average salary of

P11,600.00.[26]They likewise sufficiently consider the employers costs and its overall wage structure, while at the same time, being within the range that will not disrupt the wage trends in Philippine industries.

The records shows that MERALCO, throughout its long years of existence, was never remiss in its obligation towards its employees. In fact, as a manifestation of its strong commitment to the promotion of the welfare and well-being of its employees, it has consistently improved their compensation package. For instance, MERALCO has granted salary increases[27] through the collective bargaining agreement the amount of which since 1980 for both rank-and-file and supervisory employees were as follows:

AMOUNT OF CBA INCREASES CBACOVER AGE RANK-AND-FILE 1980 48.91% 1981 1982 56.25 TOTAL 1983 1984 1985 TOTAL 1986 1987 1988 TOTAL 1989 SUPERVISORY 230.00 210.00 200.00 640.00 320.00 350.00 370.00 1,040.00 860.00 640.00 600.00 2,100.00 1,100.00 AMOUNT 342.50 322.50 312.50 977.50 432.50 462.50 482.50 1,377.50 972.50 752.50 712.50 2,437.50 1,212.50

DIFFERENCE

PERCENT 112.50 112.50 112.50 337.50 112.50 112.50 112.50 337.50 112.50 112.50 112.50 337.50 112.50 52.73 35.16 32.14 30.41 32.45 13.08 17.58 18.75 16.07 10.23 53.57

1990 1991 TOTAL 1992 1993 1994 TOTAL

1,200.00 1,300.00 3,600.00 1,400.00 1,350.00 1,150.00 3,900.00

1,312.50 1,412.50 3,937.50 1,742.50 1,682.50 1,442.50 4,867.50

112.50 112.50 337.50 342.50 332.50 292.50 967.50

9.38 8.65 9.38 24.46 24.63 25.43 24.81

Based on the above-quoted table, specifically under the column RANK-AND-FILE, it is easily discernible that the total wage increase of P3,800.00 for 1996 to 1997 which we are granting in the instant case is significantly higher than the total increases given in 1992 to 1994, or a span of three (3) years, which is only P3,900.00 a month. Thus, the Secretarys grant of P2,200.00 monthly wage increase in the assailed order is unreasonably high a burden for MERALCO to shoulder.

We now go to the economic issues.

1. CHRISTMAS BONUS

MERALCO questions the Secretarys award of Christmas bonuses on the ground that what it had given its employees were special bonuses to mark or celebrate special occasions, such as when the Asia Money Magazine recognized MERALCO as the best managed company in Asia. These grants were given on or about Christmas time, and the timing of the grant apparently led the Secretary to the conclusion that what were given were Christmas bonuses given by way of a company practice on top of the legally required 13th month pay.

The Secretary in granting the two-month bonus, considered the following factual finding, to wit:

We note that each of the grant mentioned in the commonly adopted table of grants has a special description. Christmas bonuses were given in 1988 and 1989. However, the amounts of bonuses given differed. In 1988, it was P1,500. In 1989, it was month salary. The use of Christmas bonus title stopped after 1989. In 1990, what was given was a cash gift of months salary. The grants thereafter bore different titles and were for varying amounts. Significantly, the Company explained the reason for the 1995 bonuses and this explanation was not substantially contradicted by the Union.

What comes out from all these is that while the Company has consistently given some amount by way of bonuses since 1988, these awards were not given uniformly as Christmas bonuses or special Christmas grants although they may have been given at or about Christmas time.

xxx

xxx

xxx

The Company is not therefore correct in its position that there is not established practice of giving Christmas bonuses that has ripened to the status of being a term and condition of employment. Regardless of its nomenclature and purpose, the act of giving this bonus in the spirit of Christmas has ripened into a Company practice.[28]

It is MERALCOs position that the Secretary erred when he recognized that there was an established practice of giving a two-month Christmas bonus based on the fact that bonuses were given on or about Christmas time. It points out that the established practice attributed to MERALCO was neither for a considerable period of time nor identical in either amount or purpose. The purpose and title of the grants were never the same except for the Christmas bonuses of 1988 and 1989, and were not in the same amounts.

We do not agree.

As a rule, a bonus is not a demandable and enforceable obligation;[29] it may nevertheless be granted on equitable consideration[30] as when the giving of such bonus has been the companys long and regular practice.[31] To be considered a regular practice, the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate.[32] Thus we have ruled in National Sugar Refineries Corporation vs. NLRC:[33]

The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not covered by the law requiring payment thereof.

In the case at bar, the record shows the MERALCO, aside from complying with the regular 13th month bonus, has further been giving its employees an additional Christmas bonus at the tail-end of the year since 1988. While the special bonuses differed in amount and bore different titles, it can not be denied that these were given voluntarily and continuously on or about Christmas time. The considerable length of time MERALCO has been giving the special grants to its employees indicates a unilateral and voluntary act on its part, to continue giving said benefits knowing that such act was not required by law.

Indeed, a company practice favorable to the employees has been established and the payments made by MERALCO pursuant thereto ripened into benefits enjoyed by the employees. Consequently, the giving of the special bonus can no longer be withdrawn by the company as this would amount to a diminution of the employees existing benefits.[34]

We can not, however, affirm the Secretarys award of a two-month special Christmas bonus to the employees since there was no recognized company practice of giving a two-month special grant. The two-month special bonus was given only in 1995 in recognition of the employees prompt and efficient response during the calamities. Instead, a one-month special bonus, We believe, is sufficient, this being merely a generous act on the part of MERALCO.

2. RICE SUBSIDY and RETIREMENT BENEFITS for RETIREES

It appears that the Secretary of Labor originally ordered the increase of the retirement pay, rice subsidy and medical benefits of MERALCO retirees. This ruling was reconsidered based on the position that retirees are no longer employees of the company and therefore are no longer bargaining members who can benefit from a compulsory arbitration award. The Secretary, however, ruled that all members of the bargaining unit who retire between August 19, 1996 and November 30, 1997 (i.e., the term of the disputed CBA under the Secretarys disputed orders) are entitled to receive an additional rice subsidy.

The question squarely brought in this petition is whether the Secretary can issue an order that binds the retirement fund. The company alleges that a separate and independent trust fund is the source of retirement benefits for MERALCO retirees, while the union maintains that MERALCO controls these funds and may therefore be compelled to improve this benefit in an arbitral award.

The issue requires a finding of fact on the legal personality of the retirement fund. In the absence of any evidence on record indicating the nature of the retirement funds legal personality, we rule that the issue should be remanded to the Secretary for reception of evidence as whether or not the MERALCO retirement fund is a separate and independent trust fund. The existence of a separate and independent juridical entity which controls an irrevocable retirement trust fund means that these retirement funds are beyond the scope of collective bargaining: they are administered by an entity not a party to the collective bargaining and the funds may not be touched without the trustees conformity.

On the other hand, MERALCO control over these funds means that MERALCO may be compelled in the compulsory arbitration of a CBA deadlock where it is the employer, to improve retirement benefits since retirement is a term or condition of employment that is a mandatory subject of bargaining.

3. EMPLOYEES COOPERATIVE

The Secretarys disputed ruling requires MERALCO to provide the employees covered by the bargaining unit with a loan of 1.5 Million as seed money for the employees formation of a cooperative under the Cooperative Law, R.A. 6938. We see nothing in this law - whether expressed or implied - that requires employers to provide funds, by loan or otherwise, that employees can use to form a cooperative. The formation of a cooperative is a purely voluntary act under this law, and no party in any context or relationship is required by law to set up a cooperative or to provide the funds therefor. In the absence of such legal requirement, the Secretary has no basis to order the grant of a 1.5 million loan to MERALCO employees for the formation of a cooperative. Furthermore, we do not see the formation of an employees cooperative, in the absence of an agreement by the collective bargaining parties that this is a bargainable term or condition of employment, to be a term or condition of employment that can be imposed on the parties on compulsory arbitration.

4. GHSIP, HMP BENEFITS FOR DEPENDENTS and HOUSING EQUITY LOAN

MERALCO contends that it is not bound to bargain on these benefits because these do not relate to wages, hours of work and other terms and conditions of employment hence, the denial of these demands cannot result in a bargaining impasse.

The GHSIP, HMP benefits for dependents and the housing equity loan have been the subject of bargaining and arbitral awards in the past. We do not see any reason why MERALCO should not now bargain on these benefits. Thus, we agree with the Secretarys ruling:

x x x Additionally and more importantly, GHSIP and HMP, aside from being contributory plans, have been the subject of previous rulings from this Office as bargainable matters. At this point, we cannot do any less and must recognize that GHSIP and HMP are matters where the union can demand and negotiate for improvements within the framework of the collective bargaining system.[35]

Moreover, MERALCO have long been extending these benefits to the employees and their dependents that they now become part of the terms and conditions of

employment. In fact, MERALCO even pledged to continue giving these benefits. Hence, these benefits should be incorporated in the new CBA.

With regard to the increase of the housing equity grant, we find P60,000.00 reasonable considering the prevailing economic crisis.

5. SIGNING BONUS

On the signing bonus issue, we agree with the positions commonly taken by MERALCO and by the Office of the Solicitor General that the signing bonus is a grant motivated by the goodwill generated when a CBA is successfully negotiated and signed between the employer and the union. In the present case, this goodwill does not exist. In the words of the Solicitor General:

When negotiations for the last two years of the 1992-1997 CBA broke down and the parties sought the assistance of the NCMB, but which failed to reconcile their differences, and when petitioner MERALCO bluntly invoked the jurisdiction of the Secretary of Labor in the resolution of the labor dispute, whatever goodwill existed between petitioner MERALCO and respondent union disappeared. xxx.[36]

In contractual terms, a signing bonus is justified by and is the consideration paid for the goodwill that existed in the negotiations that culminated in the signing of a CBA. Without the goodwill, the payment of a signing bonus cannot be justified and any order for such payment, to our mind, constitutes grave abuse of discretion. This is more so where the signing bonus is in the not insignificant total amount of P16 Million.

6. RED-CIRCLE-RATE ALLOWANCE

An RCR allowance is an amount, not included in the basic salary, that is granted by the company to an employee who is promoted to a higher position grade but whose actual basic salary at the time of the promotion already exceeds the maximum salary for the position to which he or she is promoted. As an allowance, it applies only to specifics

individuals whose salary levels are unique with respect to their new and higher positions. It is for these reasons that MERALCO prays that it be allowed to maintain the RCR allowance as a separate benefit and not be integrated in the basic salary.

The integration of the RCR allowance in the basic salary of the employees had consistently been raised in the past CBAs (1989 and 1992) and in those cases, the Secretary decreed the integration of the RCR allowance in the basic salary. We do not see any reason why it should not be included in the present CBA. In fact, in the 1995 CBA between MERALCO and the supervisory union (FLAMES), the integration of the RCR allowance was recognized. Thus, Sec. 4 of the CBA provides:

All Red-Circle-Rate Allowance as of December 1, 1995 shall be integrated in the basic salary of the covered employees who as of such date are receiving such allowance. Thereafter, the company rules on RCR allowance shall continue to be observed/applied.[37]

For purposes of uniformity, we affirm the Secretarys order on the integration of the RCR allowance in the basic salary of the employees.

7. SICK LEAVE RESERVE OF 15 DAYS

MERALCO assails the Secretarys reduction of the sick leave reserve benefit from 25 days to 15 days, contending that the sick leave reserve of 15 days has reached the lowest safe level that should be maintained to give employees sufficient buffer in the event they fall ill.

We find no compelling reason to deviate from the Secretarys ruling that the sick leave reserve is reduced to 15 days, with any excess convertible to cash at the end of the year. The employee has the option to avail of this cash conversion or to accumulate his sick leave credits up to 25 days for conversion to cash at his retirement or separation from the service. This arrangement is, in fact, beneficial to MERALCO. The latter admits that the diminution of this reserve does not seriously

affect MERALCO because whatever is in reserve are sick leave credits that are payable to the employee upon separation from service. In fact, it may be to MERALCOs financial interest to pay these leave credits now under present salary levels than pay them at future higher salary levels.[38]

8. 40-DAY UNION LEAVE

MERALCO objects to the demand increase in union leave because the union leave granted to the union is already substantial. It argues that the union has not demonstrated any real need for additional union leave.

The thirty (30) days union leave granted by the Secretary, to our mind, constitute sufficient time within which the union can carry out its union activities such as but not limited to the election of union officers, selection or election of appropriate bargaining agents, conduct referendum on union matters and other unionrelated matters in furtherance of union objectives. Furthermore, the union already enjoys a special union leave with pay for union authorized representatives to attend work education seminars, meetings, conventions and conferences where union representation is required or necessary, and Paid-Time-off for union officers, stewards and representatives for purpose of handling or processing grievances.

9. HIGH VOLTAGE/HIGH POLE/TOWING ALLOWANCE MERALCO argues that there is no justification for the increase of these allowances. The personnel concerned will not receive any additional risk during the life of the current CBA that would justify the increase demanded by the union. In the absence of such risk, then these personnel deserve only the same salary increase that all other members of the bargaining unit will get as a result of the disputed CBA. MERALCO likewise assails the grant of the high voltage/high pole allowance to members of the team who are not exposed to the high voltage/high pole risks. The risks that justify the higher salary and the added allowance are personal to those who are exposed to those risks. They are not granted to a team because some members of the team are exposed to the given risks.

The increase in the high-voltage allowance (from P45.00 to P55.00), high-pole allowance (from P30.00 to P40.00), and towing allowance is justified considering the heavy risk the employees concerned are exposed to. The high-

voltage allowance is granted to an employee who is authorized by the company to actually perform work on or near energized bare lines and bus, while the high-pole allowance is given to those authorized to climb poles on a height of at least 60 feet from the ground to work thereat. The towing allowance, on the other hand, is granted to the stockman drivers who tow trailers with long poles and equipment on board. Based on the nature of the job of these concerned employees, it is imperative to give them these additional allowances for taking additional risks. These increases are not even commensurate to the danger the employees concerned are subjected to. Besides, no increase has been given by the company since 1992.[39]

We do not, however, subscribe to the Secretarys order granting these allowances to the members of the team who are not exposed to the given risks. The reason is obvious- no risk, no pay. To award them the said allowances would be manifestly unfair for the company and even to those who are exposed to the risks, as well as to the other members of the bargaining unit who do not receive the said allowances.

10.

BENEFITS FOR COLLECTORS

MERALCO opposes the Secretarys grant of benefits for collectors on the ground that this is grossly unreasonable both in scope and on the premise it is founded.

We have considered the arguments of the opposing parties regarding these benefits and find the Secretarys ruling on the (a) lunch allowance; (b) disconnection fee for delinquent accounts; (c) voluntary performance of other work at the instance of the Company; (d) bobcat belt bags; and (e) reduction of quota and MAPL during typhoons and other force majeure events, reasonable considering the risks taken by the company personnel involved, the nature of the employees functions and responsibilities and the prevailing standard of living. We do not however subscribe to the Secretarys award on the following:

(a) Reduction of quota and MAPL when the collector is on sick leave because the previous CBA has already provided for a reduction of this demand. There is no need to further reduce this.

(b) Deposit of cash bond at MESALA because this is no longer necessary in view of the fact that collectors are no longer required to post a bond.

We shall now resolve the non-economic issues.

1. SCOPE OF THE BARGAINING UNIT

The Secretarys ruling on this issue states that: a. Scope of the collective bargaining unit. The union is demanding that the collective bargaining unit shall be composed of all regular rank and file employees hired by the company in all its offices and operating centers through its franchise and those it may employ by reason of expansion, reorganization or as a result of operational exigencies. The law is that only managerial employees are excluded from any collective bargaining unit and supervisors are now allowed to form their own union (Art. 254 of the Labor Code as amended by R.A. 6715). We grant the union demand.

Both MERALCO and the Office of the Solicitor General dispute this ruling because if disregards the rule We have established on the exclusion of confidential employee from the rank and file bargaining unit.

In Pier 8 Arrastre vs. Confesor and General Maritime and Stevedores Union,[40] we ruled that:

Put another way, the confidential employee does not share in the same community of interest that might otherwise make him eligible to join his rank and file co-workers, precisely because of a conflict in those interests.

Thus, in Metrolab Industries vs. Roldan-Confesor,[41] We ruled:

..that the Secretarys order should exclude the confidential employees from the regular rank and file employees qualified to become members of the MEWA bargaining unit.

From the foregoing disquisition, it is clear that employees holding a confidential position are prohibited from joining the union of the rank and file employees.

2. ISSUE OF UNION SECURITY

The Secretary in his Order of August 19, 1996,[42] ruled that:

b. Union recognition and security. The union is proposing that it be recognized by the Company as sole and exclusive bargaining representative of the rank and file employees included in the bargaining unit for the purpose of collective bargaining regarding rates of pay, wages, hours of work and other terms and conditions of employment. For this reason, the Company shall agree to meet only with the Union officers and its authorized representatives on all matters involving the Union as an organization and all issues arising from the implementation and interpretation of the new CBA. Towards this end, the Company shall not entertain any individual or group of individuals on matters within the exclusive domain of the Union.

Additionally, the Union is demanding that the right of all rank and file employees to join the Union shall be recognized by the Company. Accordingly, all rank and file employees shall join the union.

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These demands are fairly reasonable. We grant the same in accordance with the maintenance of membership principle as a form of union security."

The Secretary reconsidered this portion of his original order when he said in his December

28, 1996 order that: x x x. when we decreed that all rank and file employees shall join the Union, we were actually decreeing the incorporation of a closed shop form of union security in the CBA between the parties. In Ferrer v. NLRC, 224 SCRA 410, the Supreme Court ruled that a CBA provision for a closed shop is a valid form of union security and is not a restriction on the right or freedom of association guaranteed by the Constitution, citing Lirag v. Blanco, 109 SCRA 87.

MERALCO objected to this ruling on the grounds that: (a) it was never questioned by the parties; (b) there is no evidence presented that would justify the restriction on employee's union membership; and (c) the Secretary cannot rule on the union security demand because this is not a mandatory subject for collective bargaining agreement.

We agree with MERALCOs contention.

An examination of the records of the case shows that the union did not ask for a closed shop security regime; the Secretary in the first instance expressly stated that a maintenance of membership clause should govern; neither MERALCO nor MEWA raised the issue of union security in their respective motions for reconsideration of the Secretarys first disputed order; and that despite the parties clear acceptance of the Secretarys first ruling, the Secretary motu proprio reconsidered his maintenance of membership ruling in favor of the more stringent union shop regime.

Under these circumstances, it is indubitably clear that the Secretary gravely abused his discretion when he ordered a union shop in his order of December 28, 1996. The distinctions between a maintenance of membership regime from a closed shop and their consequences in the relationship between the union and the company are well established and need no further elaboration.

Consequently, We rule that the maintenance of membership regime should govern at MERALCO in accordance with the Secretarys order of August 19, 1996 which neither party disputed.

3. THE CONTRACTING OUT ISSUE

This issue is limited to the validity of the requirement that the union be consulted before the implementation of any contracting out that would last for 6 months or more. Proceeding from our ruling in San Miguel Employees Union-PTGWO vs Bersamina,[43] (where we recognized that contracting out of work is a proprietary right of the employer in the exercise of an inherent management prerogative) the issue we see is whether the Secretarys consultation requirement is reasonable or unduly restrictive of the companys management prerogative. We note that the Secretary himself has considered that management should not be hampered in the operations of its business when he said that:

We feel that the limitations imposed by the union advocates are too specific and may not be applicable to the situations that the company and the union may face in the future. To our mind, the greater risk with this type of limitation is that it will tend to curtail rather than allow the business growth that the company and the union must aspire for. Hence, we are for the general limitations we have stated above because they will allow a calibrated response to specific future situations the company and the union may face.[44]

Additionally, We recognize that contracting out is not unlimited; rather, it is a prerogative that management enjoys subject to well-defined legal limitations. As we have previously held, the company can determine in its best business judgment whether it should contract out the performance of some of its work for as long as the employer is motivated by good faith, and the contracting out must not have been resorted to circumvent the law or must not have been the result of malicious or arbitrary action.[45] The Labor Code and its implementing rules also contain specific rules governing contracting out (Department of Labor Order No. 10, May 30, 1997, Sections. 1-25).

Given these realities, we recognize that a balance already exist in the parties relationship with respect to contracting out; MERALCO has its legally defined and protected management prerogatives while workers are guaranteed their own protection through specific labor provisions and the recognition of limits to the exercise of management prerogatives. From these premises, we can only conclude that the Secretarys added requirement only introduces an imbalance in the parties collective bargaining relationship on a matter that the law already sufficiently

regulates. Hence, we rule that the Secretarys added requirement, being unreasonable, restrictive and potentially disruptive should be struck down.

4. UNION REPRESENTATION IN COMMITTEES

As regards this issue, We quote with approval the holding of the Secretary in his Order of December 28, 1996, to wit:

We see no convincing reason to modify our original Order on union representation in committees. It reiterates what the Article 211 (A)(g) of the Labor Codes provides: To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare. Denying this opportunity to the Union is to lay the claim that only management has the monopoly of ideas that may improve management strategies in enhancing the Companys growth. What every company should remember is that there might be one among the Union members who may offer productive and viable ideas on expanding the Companys business horizons. The unions participation in such committees might just be the opportune time for dormant ideas to come forward. So, the Company must welcome this development (see also PAL v. NLRC, et. al., G.R. 85985, August 13, 1995). It must be understood, however, that the committees referred to here are the Safety Committee, the Uniform Committee and other committees of a similar nature and purpose involving personnel welfare, rights and benefits as well as duties.

We do not find merit in MERALCOs contention that the above-quoted ruling of the Secretary is an intrusion into the management prerogatives of MERALCO. It is worthwhile to note that all the Union demands and what the Secretarys order granted is that the Union be allowed to participate in policy formulation and decision-making process on matters affecting the Union members right, duties and welfare as required in Article 211 (A)(g) of the Labor Code. And this can only be done when the Union is allowed to have representatives in the Safety Committee, Uniform Committee and other committees of a similar nature. Certainly, such participation by the Union in the said committees is not in the nature of a comanagement control of the business of MERALCO. What is granted by the Secretary is participation and representation. Thus, there is no impairment of management prerogatives.

5. INCLUSION OF ALL TERMS AND CONDITIONS IN THE CBA

MERALCO also decries the Secretarys ruling in both the assailed Orders that-

All other benefits being enjoyed by the companys employees but which are not expressly or impliedly repealed in this new agreement shall remain subsisting and shall likewise be included in the new collective bargaining agreement to be signed by the parties effective December 1, 1995.[46] claiming that the above-quoted ruling intruded into the employers freedom to contract by ordering the inclusion in the new CBA all other benefits presently enjoyed by the employees even if they are not incorporated in the new CBA. This matter of inclusion, MERALCO argues, was never discussed and agreed upon in the negotiations; nor presented as issues before the Secretary; nor were part of the previous CBAs between the parties.

We agree with MERALCO.

The Secretary acted in excess of the discretion allowed him by law when he ordered the inclusion of benefits, terms and conditions that the law and the parties did not intend to be reflected in their CBA.

To avoid the possible problems that the disputed orders may bring, we are constrained to rule that only the terms and conditions already existing in the current CBA and was granted by the Secretary (subject to the modifications decreed in this decision) should be incorporated in the CBA, and that the Secretarys disputed orders should accordingly be modified.

6. RETROACTIVITY OF THE CBA

Finally, MERALCO also assails the Secretarys order that the effectivity of the new CBA shall retroact to December 1, 1995, the date of the commencement of the last two years of the effectivity of the existing CBA. This retroactive date, MERALCO

argues, is contrary to the ruling of this Court in Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan- Confessor[47] which mandates that the effective date of the new CBA should be the date the Secretary of Labor has resolved the labor disputes.

On the other hand, MEWA supports the ruling of the Secretary on the theory that he has plenary power and discretion to fix the date of effectivity of his arbitral award citing our ruling in St. Lukes Medical Center, Inc. vs. Torres.[48] MEWA also contends that if the arbitral award takes effect on the date of the Secretary Labors ruling on the parties motion for reconsideration (i.e., on December 28, 1996), an anomaly situation will result when CBA would be more than the 5-year term mandated by Article 253-A of the Labor Code.

However, neither party took into account the factors necessary for a proper resolution of this aspect. Pier 8, for instance, does not involve a mid-term negotiation similar to this case, while St. Lukes does not take the hold over principle into account, i.e., the rule that although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. [49]

Article 253-A serves as the guide in determining when the effectivity of the CBA at bar is to take effect. It provides that the representation aspect of the CBA is to be for a term of 5 years, while

x x x [A]ll other provisions of the Collective Bargaining Agreement shall be renegotiated not later than 3 years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within 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 such agreement is entered into beyond 6 months, the parties shall agree on the duration of the effectivity thereof. x x x.

Under these terms, it is clear that the 5-year term requirement is specific to the representation aspect. What the law additionally requires is that a CBA must be renegotiated within 3 years after its execution. It is in this re-negotiation that gives rise to the present CBA deadlock.

If no agreement is reached within 6 months from the expiry date of the 3 years that follow the CBA execution, the law expressly gives the parties - not anybody else the discretion to fix the effectivity of the agreement.

Significantly, the law does not specifically cover the situation where 6 months have elapsed but no agreement has been reached with respect to effectivity. In this eventuality, we hold that any provision of law should then apply for the law abhors a vacuum.[50]

One such provision is the principle of hold over, i.e., that in the absence of a new CBA, the parties must maintain the status quo and must continue in full force and effect the terms and conditions of the existing agreement until a new agreement is reached.[51] In this manner, the law prevents the existence of a gap in the relationship between the collective bargaining parties. Another legal principle that should apply is that in the absence of an agreement between the parties, then, an arbitrated CBA takes on the nature of any judicial or quasi-judicial award; it operates and may be executed only respectively unless there are legal justifications for its retroactive application.

Consequently, we find no sufficient legal ground on the other justification for the retroactive application of the disputed CBA, and therefore hold that the CBA should be effective for a term of 2 years counted from December 28, 1996 (the date of the Secretary of Labors disputed order on the parties motion for reconsideration) up to December 27, 1999.

WHEREFORE, the petition is granted and the orders of public respondent Secretary of Labor dated August 19, 1996 and December 28, 1996 are set aside to the extent set forth above. The parties are directed to execute a Collective Bargaining Agreement incorporating the terms and conditions contained in the unaffected portions of the Secretary of Labors order of August 19, 1996 and December 28, 1996, and the modifications set forth above. The retirement fund issue is remanded to the Secretary of Labor for reception of evidence and determination of the legal personality of the MERALCO retirement fund.

SO ORDERED.

Davide, Jr., C.J. (Chairman), Melo, Kapunan, and Pardo, JJ., concur. [G.R. No. 109383. June 15, 1998]

MANILA CENTRAL LINE CORPORATION, petitioner, vs. MANILA CENTRAL LINE FREE WORKERS UNION-NATIONAL FEDERATION OF LABOR and the NATIONAL LABOR RELATIONS COMMISSION, respondents.

D E C I S I O N MENDOZA, J.:

This is a petition for certiorari to set aside the resolution dated October 10, 1991 of the National Labor Relations Commission in NLRC NCR Case No. 000977-90, dismissing the appeal of petitioner Manila Central Line Corporation from the order of Labor Arbiter Donato G. Quinto, Jr., in NLRC NCR Case No. 02-00813-90, as well as the resolution dated March 11, 1993 of the NLRC, denying reconsideration.

This case arose out of a collective bargaining deadlock between petitioner and private respondent Manila Central Line Free Workers Union-National Federation of Labor. The parties collective bargaining agreement had expired on March 15, 1989. As the parties failed to reach new agreement, private respondent sought the aid of the National Conciliation and Mediation Board on October 30, 1989, but the deadlock remained unresolved.

On February 9, 1990, private respondent filed a Petition for Compulsory Arbitration in the Arbitration Branch for the National Capital Region of the National Labor Relations Commission. At the initial hearing before the labor arbiter, the parties declared that conciliation efforts before the NCMB had terminated and it was their desire to submit the case for compulsory arbitration. Accordingly, they were required to submit their position papers and proposals, which they did, and in which they indicated portions of their respective proposals to which they agreed, leaving the rest for arbitration.[1]

On September 28, 1990, the labor arbiter rendered a decision embodying provisions for a new collective bargaining agreement. The dispositive portion of his decision reads:

WHEREFORE, the petitioner UNION and the respondent COMPANY are directed to execute and formalize their new five-year collective bargaining agreement (CBA) retroactive to the date of expiry of the 1986-1989 CBA by adopting the provisions in the aforementioned test which incorporated therein in the disposition set forth by this Arbitrator within thirty (30) days from receipt of this Decision

SO ORDERED.[2]

Petitioner appealed, but its appeal was denied by the NLRC in its questioned resolution of October 10, 1991. On March 11, 1993, the NLRC denied petitioners motion for reconsideration. Hence, this petition with the following assignment of errors:

a) The NLRC erred in affirming the Labor Arbiters decision

1. increasing the commission rate, the incentive pay, the salaries and wages of the fixed income employees covered by the CBA. 2. granting P500.00 signing bonus to the complainant-appellee; and

3. holding that the effectivity of the renegotiated CBA shall be retroactive to March 15, 1989, the expiry date of the old CBA

b) There are serious errors in the findings of facts of the Labor Arbiter which were unqualified affirmed by the NLRC and which justify the review by this Honorable SUPREME COURT.

c)

The NLRC erred in upholding the jurisdiction of the Labor Arbiter; and

d) The NLRC erred in affirming the finalization of the CBA by the Labor Arbiter in disregard of the provisions agreed upon by the parties.

The petition is without merit. We shall deal with these contentions in the order they are presented, with the exception of the argument concerning the jurisdiction of the Labor Arbiter (par. (c)), which we shall treat first since it raises a threshold question.

First. Despite the fact that it agreed with the union to submit their dispute to the labor arbiter for arbitration, petitioner questions the jurisdiction of the labor arbiter to render the decision in question. Petitioner contends that the policy of the law now is to encourage resort to conciliation and voluntary arbitration as Art 250(e) of the Labor Code provides.

Indeed, the Labor Code formerly provided that if the parties in collective bargaining fail to reach an agreement, the Bureau of Labor Relations should call them to conciliation meetings and, if its efforts were not successful, certify the dispute to a labor arbiter for compulsory arbitrarion.[3] But this was changed by R.A.No. 6715 which took effect on March 21, 1989. Art 250(e) of the Labor Code now provides that if effects of conciliation fail, the Board shall encourage the parties to submit their case to a voluntary arbitrator. With specific reference to cases involving deadlocks in collective bargaining, Art. 262 provides:

Jurisdiction over other labor disputes The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.

This is what the parties did in this case. After the Board failed to resolve the bargaining deadlock between parties, the union filed a petition for compulsory arbitration in the Arbitration Branch of the NLRC. Petitioner joined the petition and the case was submitted for decision. Although the unions petition was for compulsory arbitration, the subsequent agreement of petitioner to submit the matter for arbitration in effect made the arbitration a voluntary one. The essence of

voluntary arbitration, after all is that it is by agreement of the parties, rather than compulsion of law, that a matter is submitted for arbitration.[4] It does not matter that the person chosen as arbitrator is a labor arbiter who, under Art 217 of the Labor Code, is charged with the compulsory arbitration of certain labor cases. There is nothing in the law that prohibits these labor arbiters from also acting as voluntary arbitrators as long as the parties agree to have him hear and decide their dispute.

Moreover, petitioner must be deemed to be estopped from questioning the authority of Labor Arbiter Donato G. Quinto, Jr., to act as voluntary arbitrator and render a decision in this case. Petitioner agreed together with the union, to refer their dispute for arbitration to him. It was only after the decision was rendered that petitioner raised the question of lack of jurisdiction. Even then, petitioner did so only for the first time in a supplemental memorandum

of appeal to the NLRC.[5] As the NLRC, through Commissioner Romeo B. Putong held, it was too late in the day for petitioner to do this.[6]

Indeed, it is inconsistent for petitioner to contend, on the other hand, that this case should have been resolved through voluntary arbitration and, on the other, to follow the procedure for compulsory arbitration and, appealing the decision of the labor arbiter to the NLRC and subsequently questioning the latters decision in Luzon Development Bank v. Luzon Development Bank Employees Association,[7] this case, considered as a special civil action for certiorari to set aside the decision of a voluntary arbitrator, should have been referred, as a matter of policy, to the Court of Appeals. However, it was not evident in the beginning from a cursory consideration of the pleadings that what actually took place in the labor agency was a proceeding for voluntary arbitration. Accordingly, so as not to delay the disposition of this case, we have thought on balance that this case should be retained and decided on the merits.

Second. In par. (a) (1) and par. (b) of its assignment of errors, petitioner questions factual findings of the labor arbiter and the NLRC. Such findings are generally held to be binding, and even final, so long as they are substantially supported by evidence in the record of the case.[8] This is especially so where, as here, the agency and a subordinate one which heard the case in the first instance are in full agreement as to the facts.[9]

The decisions of both the NLRC and the labor arbiter contain an exhaustive discussion of the issues, belying petitioners claim that they did not fully consider the evidence and appreciate what it claims are the dire economic straits it is in. This is evident from the following portion of the labor arbiters order dated September 28, 1990, which NLRC adopted:

From the foregoing allegations of the parties and as expound (sic), discussed and/or argued by them in their respective position paper, the disagreement, or deadlock, as we say it, focus (sic) and centers on the so called economic issues particularly on the provisions on Salaries and Wages.

Petitioner-Union proposed that the commission for drivers, conductors and conductresses shall be 10% and 8%, respectively of their gross collections. In addition, as incentive pay, it proposed that drivers, conductors and conductresses shall be entitled to incentive pay as follows: (a) For a quota of P2,600.00, the incentive should be P40.00; (b) for a quota of P2,875.00, the incentive should be P50.00 and (c) for a quota of P3,155.00 the incentive pay should be P60.00.

Further, petitioner-Union, insofar as the fixed income employees are concerned, they proposed that they should be granted a salary/wage increase as follows: (a) effective March 15, 1989 P12.00; (b) Effective March 15, 1990 P10.00; and (c) effective March 15, 1991 P8.00.

Respondent, on the other hand, proposes that the commission for drivers and conductor/tresses shall be 8.5% and 6.5% of their gross collection, respectively. And in addition, these drivers and conductors/tresses shall be entitled to an incentive pay based on the following quota, to wit: (a) for a quota of P3,276.00, the incentive pay is P35.00; (b) for a quota of P3,635.00, it is P45.00; and for a quoa of P3,994.00, it is P55.00. Respondent management has no proposal insofar as grant of increase/s to fixed income employees subject of the bargaining unit.

As noted at present under the old CBA, the commission for drivers and conductor/tresses is 8%

and 6%, respectively. During and in the negotiation, respondent proposes to raise this rate by .5% thus making it 8.5 and 6.5 respectively. Respondent in proposing an increase of .5% justifies the same by saying that such is only what it can afford as it had been incurring financial losses as shown by Financial Statement it submitted in evidence. This was rejected by the union which proposes that the rate of the commission be raised to 10% and 8% respectively, from 8% and 6%, or an increase by 2% respectively. The union debunked the claim fo the respondent-company that it had been financially suffering and had claim (sic) that it had earned profit in all the years that it had been under operation.

A look at the parties proposal and counter-proposal shows that the union was demanding that the rate be increased to 10% and 8% from the old rate of 8% and 6% or an increase of 2% while that of the company effectively increase the rate by .5% to make the rate at 8.5% and 6.5%. From this, it appears that the disagreement lies on how much would the increase equivalent to at least 25% for the drivers and at least 33% for the conductor/tresses, while that which proposed (sic) by the company shows an increase of at least 6% and 8% respectively. The difference between the parties proposal and counter-proposal is at least 19% and 25%, respectively. With this disagreement in this difference, it is thought of to be practical and reasonable to meet at the middle of the difference in the rate by dividing the same into two. Hence, the increase in the rate should be from the present 8% and 6% to 8.75% and 6.75%. However, in order to make the increase realistic it is opined that it should be rounded off to the nearest full number that is to 9% and 7%, respectively.

As regards the incentive pay, the following appears:

OLD CBA PROPOSAL

RESPONDENTS PROPOSAL

UNIONS

QUOTA INCENTIVE QUOTA INCENTIVE P2,800.00 P 35.00 P2,600.00 P40.00 3,100.00 50.00 3,400.00 60.00 45.00 55.00

INCENTIVE QUOTA P3,276.00 P35.00 45.00 55.00 2,600.00 3,155.00

3,635.00 3,994.00

As can be gleaned from the above respondent raised the quota but maintained the rate for the incentive pay, while the union lowers (sic) the quota and raises (sic) the rate for the incentive. To the mind of this arbitrator, he deems it proper and fair for both parties, to adopt the quota as proposed by the respondent and the rate for the incentive pay as proposed by the union. It is believe (sic) that such is fair and reasonable because as appearing in the parties proposal and counter proposal, it would seem that they are trying to out-wit each other. Hence, such would be as follows:

Quota

Rate of Incentive Pay

P3,276.00

P40.00

3,635.00

50.00

3,994.00

60.00

Another issue where the parties are in statements (sic) is the matter of increase in the salary and wages of the fixed income employees covered by the CBA. The Union proposes an increase of P12.00, P10.00 and P8.00 to be spread in the threeyear period, while the company did not submit a proposal for an increase claiming that it cannot afford to give any increase as it had suffered financial difficulty. However, as already discussed earlier where it is found that respondent, as shown by its financial statement, is not really in the verge of financial collapse, it is

believed that it is reasonable and fair to the parties, particularly to the union that increase would be mandated. However, we could not adopt in toto the proposal of the union. Instead, we are to adopt the increase as provided under the old CBA, that is, P6.00 for the first year, P5.00 for the second year and P4.00 for the third year.[10]

Petitioner contends, however, that the labor arbiter has a duty to indicate in his order every relevant proof necessary to show that the opposing partys evidence is superior to that of petitioner. This is not so. The quantum of proof required in proceedings before administrative agencies is substantial evidence, not overwhelming or preponderant evidence.[11] The quoted portion of the labor arbiters order shows that the proposals of the parties as well as petitioners financial statements were carefully considered by him in arriving at his judgment. As the Solicitor General states:

Nor did respondent NLRC overlook the protestations of the COMPANY that it is suffering from gargantuan economic trouble. This assertion, however, was sufficiently refuted by the UNION by presenting proof that the COMPANY had acquired a bus terminal area in Tunasan. Moreover, the COMPANY had just imported machines to recondition their old buses. Also, as can be seen in the 1992 Financial Statement of the COMPANY had just imported machines to recondition their old buses. Also, as can be seen in the1992 Financial Statement of the COMPANY, it acquired new buses worth P2,400,000.00. These facts verify the findings of the Labor Arbiter that the COMPANY is not on the verge of financial collapse.Also, the COMPANY had offered an increase of .5% but in the same breath, it claims that it can hardly maintain the commission rate of 8% and 6%. There is a contradiction of facts right there and then, which considerably weakens its assertions

The increase in commission rate will not really affect the income of the COMPANY. By their very nature, commissions will only be given to the employees if the COMPANY receives more income. They are given in the form of incentives or encouragement so that employees would be inspired to put a little more industry on their particular tasks. This is unlike salaries and wages which are fixed amounts and which should be given to the employees regardless of whether the COMPANY is making any collection or not. Therefore, the employees are merely asking a percentage of the earnings of the COMPANY, which they, through their efforts, helped produce.

As regards the incentive pay increase, the COMPANYs financial position was also taken into consideration. It appears that the COMPANY and the UNION were trying to outwit each other in their respective proposals. Thus, the position adopted by the Labor Arbiter - - increasing the quota and the amount of incentive is a middle ground which is fair to both parties.

The increase in salaries and wages was premised on the findings of the Labor Arbiter that the COMPANY was not on the verge of financial collapse and that an increase would be mandated, particularly taking into consideration the inflation or increase in the cost of living in the subsequent years after the CBA was finalized. In adopting the wage increase rates provided in the old CBA, the financial condition of the COMPANY as well as the needs of the employees were taken into consideration. When conclusions of the Labor Arbiter are sufficiently corroborated by the evidence on record, the same should be respected by the appellate tribunals since he is in a better position to assess or evaluate the credibility of the contending parties [CDCP Tollways Operation Employees and Workers Union v. NLRC, 211 SCRA 58).[12]

Nor is the grant of a P500.00 signing bonus to employees unreasonable or arbitrary. The amount is a modest sum, to be given by petitioner only once, in order to make employees finally agree to the new CBA. In ordering payment of this amount, the labor arbiter acted in accordance with Art. 262-A of the Labor Code which provides in part: Procedures. The voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold hearings, receive evidence and take whatever action is necessary to resolve the issue or issues subject to dispute, including efforts to effect a voluntary settlement between parties. (emphasis added)

Third. Petitioner also contends that in ordering a new CBA to be effective on March 15, 1989, the expiry date of the old CBA, the labor arbiter acted contrary to Art. 253-A of the Labor Code. This provision states, among others, that:

Any agreement on such other provision of the Collective Bargaining Agreement entered into within six (6) months from the date of the 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.

Art. 253-A refers to collective bargaining agreements entered into by the parties as a result of their mutual agreement. The CBA in this case, on the other hand, is part of an arbitral award. As such, it may be made retroactive to the date of expiration of the previous agreement. As held in St. Lukes Medical Center, Inc. v. Torres:

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

Anent the alleged lack of basis for the retroactivity to provisions awarded, we would stress that the provision of law invoked by the Hospital. Article 253-A of the Labor Code, speaks of agreements by and between the parties, and not arbitral awards . . . (p. 818 Rollo).

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. [13]

Indeed, petitioner has not shown that the question of effectivity was not included in the general agreement of the parties to submit their dispute for arbitration. To the contrary, as to the order of the labor arbiter states, this question was among those submitted for arbitration by the parties:

As regards the Effectivity and Duration clause, the company proposes that the collective bargaining agreement shall take effect only upon its signing and shall remain in full force and effect for a period of five years. The union proposes that the agreement shall take effect retroactive to March 15, 1989, the expiration date of the old CBA.

And after an evaluation of the parties respective contention and argument thereof, it is believed that the union is fair and reasonable. It is the observation of this Arbitrator that in almost subsequent CBAs, the effectivity of the renegotiated CBA, usually and most often is made effective retroactive to the date when the immediately proceeding CBA expires so as to give a semblance of continuity. Hence, for this particular case, it is believed that there is nothing wrong adopting the stand of the union, that is that this CBA be made retroactive effective March 15, 1989.[14]

Fourth. It is finally contended that the labor arbiter disregarded many provisions of the old CBA which the parties had retained, improved and agreed upon, with the result that the CBA finalized by the Honorable Labor Arbiter does not reflect the true intention of the parties.[15] Petitioner does not specify, however, what provisions of the old CBA were disregarded by the labor arbiter. Consequently, this allegation should simply be dismissed.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED. [G.R. No. 109383. June 15, 1998]

MANILA CENTRAL LINE CORPORATION, petitioner, vs. MANILA CENTRAL LINE FREE WORKERS UNION-NATIONAL FEDERATION OF LABOR and the NATIONAL LABOR RELATIONS COMMISSION, respondents.

D E C I S I O N MENDOZA, J.:

This is a petition for certiorari to set aside the resolution dated October 10, 1991 of the National Labor Relations Commission in NLRC NCR Case No. 000977-90, dismissing the appeal of petitioner Manila Central Line Corporation from the order of Labor Arbiter Donato G. Quinto, Jr., in NLRC NCR Case No. 02-00813-90, as well as the resolution dated March 11, 1993 of the NLRC, denying reconsideration.

This case arose out of a collective bargaining deadlock between petitioner and private respondent Manila Central Line Free Workers Union-National Federation of Labor. The parties collective bargaining agreement had expired on March 15, 1989. As the parties failed to reach new agreement, private respondent sought the aid of the National Conciliation and Mediation Board on October 30, 1989, but the deadlock remained unresolved.

On February 9, 1990, private respondent filed a Petition for Compulsory Arbitration in the Arbitration Branch for the National Capital Region of the National Labor Relations Commission. At the initial hearing before the labor arbiter, the parties declared that conciliation efforts before the NCMB had terminated and it was their desire to submit the case for compulsory arbitration. Accordingly, they were required to submit their position papers and proposals, which they did, and in which they indicated portions of their respective proposals to which they agreed, leaving the rest for arbitration.[1]

On September 28, 1990, the labor arbiter rendered a decision embodying provisions for a new collective bargaining agreement. The dispositive portion of his decision reads:

WHEREFORE, the petitioner UNION and the respondent COMPANY are directed to execute and formalize their new five-year collective bargaining agreement (CBA)

retroactive to the date of expiry of the 1986-1989 CBA by adopting the provisions in the aforementioned test which incorporated therein in the disposition set forth by this Arbitrator within thirty (30) days from receipt of this Decision

SO ORDERED.[2]

Petitioner appealed, but its appeal was denied by the NLRC in its questioned resolution of October 10, 1991. On March 11, 1993, the NLRC denied petitioners motion for reconsideration. Hence, this petition with the following assignment of errors:

a) The NLRC erred in affirming the Labor Arbiters decision

1. increasing the commission rate, the incentive pay, the salaries and wages of the fixed income employees covered by the CBA. 2. granting P500.00 signing bonus to the complainant-appellee; and

3. holding that the effectivity of the renegotiated CBA shall be retroactive to March 15, 1989, the expiry date of the old CBA

b) There are serious errors in the findings of facts of the Labor Arbiter which were unqualified affirmed by the NLRC and which justify the review by this Honorable SUPREME COURT.

c)

The NLRC erred in upholding the jurisdiction of the Labor Arbiter; and

d) The NLRC erred in affirming the finalization of the CBA by the Labor Arbiter in disregard of the provisions agreed upon by the parties.

The petition is without merit. We shall deal with these contentions in the order they are presented, with the exception of the argument concerning the jurisdiction of the Labor Arbiter (par. (c)), which we shall treat first since it raises a threshold question.

First. Despite the fact that it agreed with the union to submit their dispute to the labor arbiter for arbitration, petitioner questions the jurisdiction of the labor arbiter to render the decision in question. Petitioner contends that the policy of the law now is to encourage resort to conciliation and voluntary arbitration as Art 250(e) of the Labor Code provides.

Indeed, the Labor Code formerly provided that if the parties in collective bargaining fail to reach an agreement, the Bureau of Labor Relations should call them to conciliation meetings and, if its efforts were not successful, certify the dispute to a labor arbiter for compulsory arbitrarion.[3] But this was changed by R.A.No. 6715 which took effect on March 21, 1989. Art 250(e) of the Labor Code now provides that if effects of conciliation fail, the Board shall encourage the parties to submit their case to a voluntary arbitrator. With specific reference to cases involving deadlocks in collective bargaining, Art. 262 provides:

Jurisdiction over other labor disputes The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.

This is what the parties did in this case. After the Board failed to resolve the bargaining deadlock between parties, the union filed a petition for compulsory arbitration in the Arbitration Branch of the NLRC. Petitioner joined the petition and the case was submitted for decision. Although the unions petition was for compulsory arbitration, the subsequent agreement of petitioner to submit the matter for arbitration in effect made the arbitration a voluntary one. The essence of voluntary arbitration, after all is that it is by agreement of the parties, rather than compulsion of law, that a matter is submitted for arbitration.[4] It does not matter that the person chosen as arbitrator is a labor arbiter who, under Art 217 of the Labor Code, is charged with the compulsory arbitration of certain labor cases. There is nothing in the law that prohibits these labor arbiters from also acting as voluntary arbitrators as long as the parties agree to have him hear and decide their dispute.

Moreover, petitioner must be deemed to be estopped from questioning the authority of Labor Arbiter Donato G. Quinto, Jr., to act as voluntary arbitrator and render a decision in this case. Petitioner agreed together with the union, to refer their dispute for arbitration to him. It was only after the decision was rendered that petitioner raised the question of lack of jurisdiction. Even then, petitioner did so only for the first time in a supplemental memorandum

of appeal to the NLRC.[5] As the NLRC, through Commissioner Romeo B. Putong held, it was too late in the day for petitioner to do this.[6]

Indeed, it is inconsistent for petitioner to contend, on the other hand, that this case should have been resolved through voluntary arbitration and, on the other, to follow the procedure for compulsory arbitration and, appealing the decision of the labor arbiter to the NLRC and subsequently questioning the latters decision in Luzon Development Bank v. Luzon Development Bank Employees Association,[7] this case, considered as a special civil action for certiorari to set aside the decision of a voluntary arbitrator, should have been referred, as a matter of policy, to the Court of Appeals. However, it was not evident in the beginning from a cursory consideration of the pleadings that what actually took place in the labor agency was a proceeding for voluntary arbitration. Accordingly, so as not to delay the disposition of this case, we have thought on balance that this case should be retained and decided on the merits.

Second. In par. (a) (1) and par. (b) of its assignment of errors, petitioner questions factual findings of the labor arbiter and the NLRC. Such findings are generally held to be binding, and even final, so long as they are substantially supported by evidence in the record of the case.[8] This is especially so where, as here, the agency and a subordinate one which heard the case in the first instance are in full agreement as to the facts.[9]

The decisions of both the NLRC and the labor arbiter contain an exhaustive discussion of the issues, belying petitioners claim that they did not fully consider the evidence and appreciate what it claims are the dire economic straits it is in. This is evident from the following portion of the labor arbiters order dated September 28, 1990, which NLRC adopted:

From the foregoing allegations of the parties and as expound (sic), discussed and/or argued by them in their respective position paper, the disagreement, or deadlock, as we say it, focus (sic) and centers on the so called economic issues particularly on the provisions on Salaries and Wages.

Petitioner-Union proposed that the commission for drivers, conductors and conductresses shall be 10% and 8%, respectively of their gross collections. In addition, as incentive pay, it proposed that drivers, conductors and conductresses shall be entitled to incentive pay as follows: (a) For a quota of P2,600.00, the incentive should be P40.00; (b) for a quota of P2,875.00, the incentive should be P50.00 and (c) for a quota of P3,155.00 the incentive pay should be P60.00.

Further, petitioner-Union, insofar as the fixed income employees are concerned, they proposed that they should be granted a salary/wage increase as follows: (a) effective March 15, 1989 P12.00; (b) Effective March 15, 1990 P10.00; and (c) effective March 15, 1991 P8.00.

Respondent, on the other hand, proposes that the commission for drivers and conductor/tresses shall be 8.5% and 6.5% of their gross collection, respectively. And in addition, these drivers and conductors/tresses shall be entitled to an incentive pay based on the following quota, to wit: (a) for a quota of P3,276.00, the incentive pay is P35.00; (b) for a quota of P3,635.00, it is P45.00; and for a quoa of P3,994.00, it is P55.00. Respondent management has no proposal insofar as grant of increase/s to fixed income employees subject of the bargaining unit.

As noted at present under the old CBA, the commission for drivers and conductor/tresses is 8% and 6%, respectively. During and in the negotiation, respondent proposes to raise this rate by .5% thus making it 8.5 and 6.5 respectively. Respondent in proposing an increase of .5% justifies the same by saying that such is only what it can afford as it had been incurring financial

losses as shown by Financial Statement it submitted in evidence. This was rejected by the union which proposes that the rate of the commission be raised to 10% and 8% respectively, from 8% and 6%, or an increase by 2% respectively. The union debunked the claim fo the respondent-company that it had been financially suffering and had claim (sic) that it had earned profit in all the years that it had been under operation.

A look at the parties proposal and counter-proposal shows that the union was demanding that the rate be increased to 10% and 8% from the old rate of 8% and 6% or an increase of 2% while that of the company effectively increase the rate by .5% to make the rate at 8.5% and 6.5%. From this, it appears that the disagreement lies on how much would the increase equivalent to at least 25% for the drivers and at least 33% for the conductor/tresses, while that which proposed (sic) by the company shows an increase of at least 6% and 8% respectively. The difference between the parties proposal and counter-proposal is at least 19% and 25%, respectively. With this disagreement in this difference, it is thought of to be practical and reasonable to meet at the middle of the difference in the rate by dividing the same into two. Hence, the increase in the rate should be from the present 8% and 6% to 8.75% and 6.75%. However, in order to make the increase realistic it is opined that it should be rounded off to the nearest full number that is to 9% and 7%, respectively.

As regards the incentive pay, the following appears:

OLD CBA PROPOSAL

RESPONDENTS PROPOSAL

UNIONS

QUOTA INCENTIVE QUOTA INCENTIVE P2,800.00 P 35.00 P2,600.00 P40.00 3,100.00 50.00 45.00

INCENTIVE QUOTA P3,276.00 P35.00 45.00 2,600.00

3,635.00

3,400.00 60.00

55.00

3,994.00

55.00

3,155.00

As can be gleaned from the above respondent raised the quota but maintained the rate for the incentive pay, while the union lowers (sic) the quota and raises (sic) the rate for the incentive. To the mind of this arbitrator, he deems it proper and fair for both parties, to adopt the quota as proposed by the respondent and the rate for the incentive pay as proposed by the union. It is believe (sic) that such is fair and reasonable because as appearing in the parties proposal and counter proposal, it would seem that they are trying to out-wit each other. Hence, such would be as follows:

Quota

Rate of Incentive Pay

P3,276.00

P40.00

3,635.00

50.00

3,994.00

60.00

Another issue where the parties are in statements (sic) is the matter of increase in the salary and wages of the fixed income employees covered by the CBA. The Union proposes an increase of P12.00, P10.00 and P8.00 to be spread in the threeyear period, while the company did not submit a proposal for an increase claiming that it cannot afford to give any increase as it had suffered financial difficulty. However, as already discussed earlier where it is found that respondent, as shown by its financial statement, is not really in the verge of financial collapse, it is believed that it is reasonable and fair to the parties, particularly to the union that increase would be mandated. However, we could not adopt in toto the proposal of the union. Instead, we are to adopt the increase as provided under the old CBA, that is, P6.00 for the first year, P5.00 for the second year and P4.00 for the third year.[10]

Petitioner contends, however, that the labor arbiter has a duty to indicate in his order every relevant proof necessary to show that the opposing partys evidence is superior to that of petitioner. This is not so. The quantum of proof required in proceedings before administrative agencies is substantial evidence, not overwhelming or preponderant evidence.[11] The quoted portion of the labor arbiters order shows that the proposals of the parties as well as petitioners financial statements were carefully considered by him in arriving at his judgment. As the Solicitor General states:

Nor did respondent NLRC overlook the protestations of the COMPANY that it is suffering from gargantuan economic trouble. This assertion, however, was sufficiently refuted by the UNION by presenting proof that the COMPANY had acquired a bus terminal area in Tunasan. Moreover, the COMPANY had just imported machines to recondition their old buses. Also, as can be seen in the 1992 Financial Statement of the COMPANY had just imported machines to recondition their old buses. Also, as can be seen in the1992 Financial Statement of the COMPANY, it acquired new buses worth P2,400,000.00. These facts verify the findings of the Labor Arbiter that the COMPANY is not on the verge of financial collapse.Also, the COMPANY had offered an increase of .5% but in the same breath, it claims that it can hardly maintain the commission rate of 8% and 6%. There is a contradiction of facts right there and then, which considerably weakens its assertions

The increase in commission rate will not really affect the income of the COMPANY. By their very nature, commissions will only be given to the employees if the COMPANY receives more income. They are given in the form of incentives or encouragement so that employees would be inspired to put a little more industry on their particular tasks. This is unlike salaries and wages which are fixed amounts and which should be given to the employees regardless of whether the COMPANY is making any collection or not. Therefore, the employees are merely asking a percentage of the earnings of the COMPANY, which they, through their efforts, helped produce.

As regards the incentive pay increase, the COMPANYs financial position was also taken into consideration. It appears that the COMPANY and the UNION were trying to outwit each other in their respective proposals. Thus, the position adopted by the Labor Arbiter - - increasing the quota and the amount of incentive is a middle ground which is fair to both parties.

The increase in salaries and wages was premised on the findings of the Labor Arbiter that the COMPANY was not on the verge of financial collapse and that an increase would be mandated, particularly taking into consideration the inflation or increase in the cost of living in the subsequent years after the CBA was finalized. In adopting the wage increase rates provided in the old CBA, the financial condition of the COMPANY as well as the needs of the employees were taken into consideration. When conclusions of the Labor Arbiter are sufficiently corroborated by the evidence on record, the same should be respected by the appellate tribunals since he is in a better position to assess or evaluate the credibility of the contending parties [CDCP Tollways Operation Employees and Workers Union v. NLRC, 211 SCRA 58).[12]

Nor is the grant of a P500.00 signing bonus to employees unreasonable or arbitrary. The amount is a modest sum, to be given by petitioner only once, in order to make employees finally agree to the new CBA. In ordering payment of this amount, the labor arbiter acted in accordance with Art. 262-A of the Labor Code which provides in part: Procedures. The voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold hearings, receive evidence and take whatever action is necessary to resolve the issue or issues subject to dispute, including efforts to effect a voluntary settlement between parties. (emphasis added)

Third. Petitioner also contends that in ordering a new CBA to be effective on March 15, 1989, the expiry date of the old CBA, the labor arbiter acted contrary to Art. 253-A of the Labor Code. This provision states, among others, that:

Any agreement on such other provision of the Collective Bargaining Agreement entered into within six (6) months from the date of the 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.

Art. 253-A refers to collective bargaining agreements entered into by the parties as a result of their mutual agreement. The CBA in this case, on the other hand, is part of an arbitral award. As such, it may be made retroactive to the date of expiration of the previous agreement. As held in St. Lukes Medical Center, Inc. v. Torres:

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

Anent the alleged lack of basis for the retroactivity to provisions awarded, we would stress that the provision of law invoked by the Hospital. Article 253-A of the Labor Code, speaks of agreements by and between the parties, and not arbitral awards . . . (p. 818 Rollo).

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. [13]

Indeed, petitioner has not shown that the question of effectivity was not included in the general agreement of the parties to submit their dispute for arbitration. To the contrary, as to the order of the labor arbiter states, this question was among those submitted for arbitration by the parties:

As regards the Effectivity and Duration clause, the company proposes that the collective bargaining agreement shall take effect only upon its signing and shall remain in full force and effect for a period of five years. The union proposes that the agreement shall take effect retroactive to March 15, 1989, the expiration date of the old CBA.

And after an evaluation of the parties respective contention and argument thereof, it is believed that the union is fair and reasonable. It is the observation of this Arbitrator that in almost subsequent CBAs, the effectivity of the renegotiated CBA, usually and most often is made effective retroactive to the date when the immediately proceeding CBA expires so as to give a semblance of continuity. Hence, for this particular case, it is believed that there is nothing wrong adopting the stand of the union, that is that this CBA be made retroactive effective March 15, 1989.[14]

Fourth. It is finally contended that the labor arbiter disregarded many provisions of the old CBA which the parties had retained, improved and agreed upon, with the result that the CBA finalized by the Honorable Labor Arbiter does not reflect the true intention of the parties.[15] Petitioner does not specify, however, what provisions of the old CBA were disregarded by the labor arbiter. Consequently, this allegation should simply be dismissed.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED. [G.R. No. 111262. September 19, 1996]

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its President RAYMUNDO HIPOLITO, JR., petitioner, 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.

D E C I S I O N KAPUNAN, J.:

This is a petition for certiorari assailing the Order of the Secretary of Labor rendered on February 15, 1993 involving a labor dispute at San Miguel Corporation.

The facts are as follows:

On June 28, 1990, petitioner-union San Miguel Corporation Employees Union PTGWO entered into a Collective Bargaining Agreement (CBA) with private respondent San Miguel Corporation (SMC) to take effect upon the expiration of the previous CBA or on June 30, 1989.

This CBA provided, among others, that: ARTICLE XIV DURATION OF AGREEMENT

SECTION 1. This Agreement which shall be binding upon the parties hereto and their respective successors-in-interest, shall become effective and shall remain in force and effect until June 30, 1992.

SEC. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this Agreement insofar as the representation aspect is concerned, shall be for five (5) years from July 1, 1989 to June 30, 1994. Hence, the freedom period for purposes of such representation shall be sixty (60) days prior to June 30, 1994.

SEC. 3. 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, this Agreement shall nevertheless remain in force up to the time a subsequent agreement is reached by the parties.[1]

In keeping with their vision and long term strategy for business expansion, SMC management informed its employees in a letter dated August 13, 1991[2]that the company which was composed of four operating divisions namely: (1) Beer, (2)

Packaging, (3) Feeds and Livestocks, (4) Magnolia and Agri-business would undergo a restructuring.[3]

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.

Unable to agree on these issues with respect to the bargaining unit and duration of the CBA, petitioner-union declared a deadlock on September 29, 1990.

On October 2, 1992, a Notice of Strike was filed against SMC.

In order to avert a strike, SMC requested the National Conciliation and Mediation Board (NCMB) to conduct preventive mediation. No settlement was arrived at despite several meetings held between the parties.

On November 3, 1992, a strike vote was conducted which resulted in a yes vote in favor of a strike.

On November 4, 1992, private respondents SMC, Magnolia and SMFI filed a petition with the Secretary of Labor praying that the latter assume jurisdiction over the labor dispute in a vital industry.

As prayed for, the Secretary of Labor assumed jurisdiction over the labor dispute on November 10, 1992.[4] Several conciliation meetings were held but still no agreement/settlement was arrived at by both parties.

After the parties submitted their respective position papers, the Secretary of Labor issued the assailed Order on February 15, 1993 directing, among others, that the renegotiated terms of the CBA shall be effective for the period of three (3) years from June 30, 1992; and that such CBA shall cover only the employees of SMC and not of Magnolia and SMFI.

Dissatisfied, petitioner-union now comes to this Court questioning this Order of the Secretary of Labor.

Subsequently, on March 30, 1995,[5] petitioner-union filed a Motion for Issuance of a Temporary Restraining Order or Writ of Preliminary Injunction to enjoin the holding of the certification elections in the different companies, maintaining that the employees of Magnolia and SMFI fall within the bargaining unit of SMC.

On March 29, 1995, the Court issued a resolution granting the temporary restraining order prayed for.[6]

Meanwhile, an urgent motion for leave to intervene[7]in the case was filed by the Samahan ng Malayang Manggagawa-San Miguel Corporation-Federation of Free

Workers (SMM-SMC- FFW) through its authorized representiative, Elmer S. Armando, alleging that it is one of the contending parties adversely effected by the temporary restraining order.

The Intervenor cited the case of Daniel S.L. Borbon v. Hon. Bienvenido B. Laguesma,[8] G.R. No. 101766, March 5, 1993, where the Court recognized the separation of the employees of Magnolia from the SMC bargaining unit. It then prayed for the lifting of the temporary restraining order.

Likewise, Efren Carreon, Acting President of the SMCEU-PTGWO, filed a petition for the withdrawal/dismissal of the petition considering that the temporary restraining order jeopardized the employees right to conclude a new CBA. At the same time, he challenged the legal personality of Mr. Raymundo Hipolito, Jr. to represent the Union as its president when the latter was already officially dismissed from the company on October 4, 1994.

Amidst all these pleadings, the following primordial issues arise:

1) Whether or not the duration of the renegotiated terms of the CBA is to be effective for three years or for only two years; and

2) Whether or not the bargaining unit of SMC includes also the employees of Magnolia and SMFI.

Petitioner-union contends that the duration for the non-representation provisions of the CBA should be coterminous with the term of the bargaining agency which in effect shall be for the remaining two years of the current CBA, citing a previous decision of the Secretary of Labor on December 14, 1992 in the matter of the labor dispute at Philippine Refining Company.[9]

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 parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining agreement, the parties may exercise their rights under this Code. (underlining supplied.)

Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act No. 6715 (the Herrera-Veloso Law) which took effect on March 21, 1989. This new provision states that the CBA has a term of five (5) years instead of three years, before the amendment of the law as far as the representation aspect is concerned. All other provisions of the CBA shall be negotiated not later than three (3) years after its execution. The representation aspect refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining unit concerned. All other provisions simply refers to the rest of the CBA, economic as well as non-economic provisions, except representation.[10] As the Secretary of Labor herself observed in the instant case, the law is clear and definite on the duration of the CBA insofar as the representation aspect is concerned, but is quite ambiguous with the terms of the other provisions of the CBA. It is a cardinal principle of statutory construction that the Court must ascertain the legislative intent for the purpose of giving effect to any statute. The

history of the times and state of the things existing when the act was framed or adopted must be followed and the conditions of the things at the time of the enactment of the law should be considered to determine the legislative intent.[11] We look into the discussions leading to the passage of the law:

THE CHAIRMAN (REP. VELASCO): . . . the CBA, insofar as the economic provisions are concerned . . .

THE CHAIRMAN (SEN. HERRERA): Maximum of three years? THE CHAIRMAN (SEN. VELOSO): Maximum of three years. THE CHAIRMAN (SEN. HERRERA): Present practice? THE CHAIRMAN (REP. VELOSO): In other words, after three years puwede nang magnegotiate in that CBA for the remaining two years.

THE CHAIRMAN (REP. HERRERA): You can negotiate for one year, two years or three years but assuming three years which, I think, thats the likelihood. . . . THE CHAIRMAN (REP. VELOSO): Yes. THE CHAIRMAN (SEN. HERRERA): Three years, the new union, assuming there will be a change of agent, at least he has one year to administer and to adjust, to develop rapport with the management. Yan ang importante.

You know, for us na nagne-negotiate, and hazard talaga sa negotiation, when we negotiate with somebody na hindi natin kilala, then, we are governed by our biases na ito ay destroyer ng Labor; ang mga employer, ito bayaran ko lang ito okay na. Yan ang nangyayari, but let us give that allowance for one year to let them know. Actually, ang thrust natin ay industrial peace, and there can be no industrial peace if you encourage union to fight each other. Yan ang problema.[12]

xxx

xxx

xxx

HON. ISIDRO: Madali iyan, kasi these two periods that are mentioned in the CBA seem to provide some doubts later on in the implementation. Sabi kasi rito, insofar as representation issue is concerned, seven years ang lifetime . . .

HON. CHAIRMAN HERRERA: Five years.

HON. ISIDRO: Five years, all the others three years.

HON. CHAIRMAN HERRERA: No. Ang three years duon sa terms and conditions, not later than three years.

HON. ISIDRO: Not later than three years, so within three years you have to make a new CBA.

HON. CHAIRMAN HERRERA: Yes.

HON. ISIDRO: That is again for purposes of renewing the terms, three years na naman iyan then, seven years . . . HON. CHAIRMAN HERRERA: Not later than three years.

HON. ISIDRO: Assuming that they usually follow the period three years nang three years, but under this law with respect to representation five years, ano? Now, after three years, nagkaroon ng bagong terms, tapos na iyong term, renewed na iyong terms, ang karapatan noon sa representation issue mayroon pang two years left.

HON. CHAIRMAN HERRERA: One year na lang because six years nang lahat, three plus three.

HON ISIDRO: Hindi, two years pa rin ang natitira, eh. Three years pa lang ang natatapos. So, another CBA was formed and this CBA mayroon na naman siyang bagong five years with respect to representation issue.

HON. CHAIRMAN HERRERA: Hindi. Hindi na. Ganito iyan. Iyong terms and conditions for three years.

HON. ISIDRO: Yes.

HON. CHAIRMAN HERRERA: On the third year you can start negotiating to change the terms and conditions.

HON. ISIDRO: Yes.

HON. CHAIRMAN HERRERA: Assuming you will follow the practice . . . HON. ISIDRO: Oo. HON. CHAIRMAN HERRERA: But on the fifth year, ang representation status now can be questioned, so baka puwedeng magkaroon ng certification election. If the incumbent union loses, then the new union administers the contract for one year to give him time to know his counterpart the employer, before he can negotiate for a new term. Iyan ang advantage.

HON. ISIDRO: Kasi, when the CBA has only a three-year lifetime with respect to the terms and conditions and then, so you have to renew that in three years you renew for another three years, mayroon na naman another five years iyong ano . . .

HON. ANIAG: Hindi, ang natitira duon sa representation two years na lang. HON. CHAIRMAN HERRERA: Two years na lang sa representation. HON. ANIAG: So that if they changed the union, iyong last year. . . .

HON. CHAIRMAN HERRERA: Iyon lang, that you have to administer the contract. Then, voluntary arbitration na kayo and then mayroon ka nang probisyon retroact on the date of the expiry date. Pagnatalo and incumbent unyon, mag-aassume and new union, administer the contract. As far as the term ang condition, for one year, and that will give him time and the employer to know each other.

HON. JABAR: Boy, let us be realistic. I think if a new union wins a certification election, it would not want to administer a CBA which has not been negotiated by the union itself.

HON. CHAIRMAN HERRERA: That is not true, Hon. This is true because what is happening now in the country is that the term ng contract natin, duon din mageexpire ang representation. Iyon and nangyari. That is where you have the gulo. Ganoon and nangyari. So, ang nangyari diyan, pag-mayroon certification election, expire ang contract, ano ang usual issue - company union. I can you (sic) give you more what the incumbent union is giving. So ang mangyayari diyan, pag-negotiate mo hardline na agad.

HON. CHAIRMAN VELOSO: Mon, for four years?

HON. ISIDRO: Ang tingin ko lang dito, iyong distinction between the terms and the representation aspect why do we have to distinguish between three and five? Whats wrong with having a uniform expiration period?

HON. CHAIRMAN HERRERA: Five years. HON. ISIDRO: Puro three years. HON. CHAIRMAN HERRERA: That is what we are trying to avoid because ang reality diyan, Mart, pagpasok mo sa kumpanya, mag-ne-negotiate ka ng six months, thats the average, aabot pa minsan ng one year. Pagkatapos ng negotiation mo, signing kayo. There will be an allowed period of one year. Third year na, uumpisahan naman ang organizations, papasok na ang ibang unyon because the reality in Trade Union committee, they organize, we organize. So, actually, you have only industrial peace for one year, effective industrial peace. That is what we are trying to change. Otherwise, we will continue to discourage the investors and the union will never grow because every other year it has to use its money for the certification election. Ang grabe pang practice diyan, mag-a-advance ang

federation for three years union dues para panggastos lang sa certification election. That is what we are trying to avoid.

HON. JABAR: Although there are unions which really get advances.

HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga unyon, ganoon ang mangyayari. And I think our responsibility here is to create a legal framework to promote industrial peace and to develop responsible and fair labor movement.

HON. CHAIRMAN VELOSO: In other words, the longer the period of the effectivity . . . x x x HON. CHAIRMAN VELOSO. (continuing) . . in other words, the longer the period of effectivity of the CBA, the better for industrial peace.

HON. CHAIRMAN HERRERA: representation status. HON. CHAIRMAN VELOSO: Only on HON. CHAIRMAN HERRERA: the representations. HON. CHAIRMAN VELOSO: But on the economic issues. HON. CHAIRMAN HERRERA: You have to review that. The parties will have to review that.

HON. CHAIRMAN VELOSO: At least on second year.

HON. CHAIRMAN HERRERA: Not later than 3 years ang karamihan ng mga, mag- negotiate when the company is (interrupted)[13]

xxx

From the aforesaid discussions, the legislators were more inclined to have the period of effectivity for three (3) years insofar as the economic as well as noneconomic provisions are concerned, except representation.

Obviously, the framers of the law wanted to maintain industrial peace and stability by having both management and labor work harmoniously together without any disturbance. Thus, no outside union can enter the establishment within five (5) years and challenge the status of the incumbent union as the exclusive bargaining agent. Likewise, the terms and conditions of employment (economic and noneconomic) can not be questioned by the employers or employees during the period of effectivity of the CBA. The CBA is a contract between the parties and the parties must respect the terms and conditions of the agreement.[14] Notably, the framers of the law did not give a fixed term as to the effectivity of the terms and conditions of employment. It can be gleaned from their discussions that it was left to the parties to fix the period.

In the instant case, it is not difficult to determine the period of effectivity for the non- representation provisions of the CBA. Taking it from the history of their CBAs, SMC intended to have the terms of the CBA effective for three (3) years reckoned from the expiration of the old or previous CBA which was on June 30, 1989, as it provides:

SECTION 1. This Agreement which shall be binding upon the parties hereto and their respective successors-in-interest, shall become effective and shall remain in force and effect until June 30, 1992.

The argument that the PRC case is applicable is indeed misplaced. We quote with favor the Order of the Secretary of Labor in the light of SMCs peculiar situation as compared with PRCs company situation.

It is true that in the Philippine Refining Company case (OS-AJ-0031-91 (sic), Labor Dispute at Philippine Refining Company), we ruled that the term of the renegotiated provisions of the CBA should coincide with the remaining term of the agency. In doing so, we placed premium on the fact that PRC has only two (2) unions and no other union had yet executed a renewed term of 3 years. Nonetheless, in ruling for a shortened term, we were guided by our considered perception that the said term would improve, rather than ruin, the general welfare of both the workers and the company. It is equally true that once the economic provisions of the CBA expire, the residual representative status of the union is effective for only 2 more years. However, if circumstances warrant that the contract duration which it is soliciting from the company for the benefit of the workers, shall be a little bit longer than its lifespan, then this Office cannot stand in the way of a more ideal

situation. We must not lose sight of the fact that the primordial purpose of a collective contract is to promote industrial harmony and stability in the terms and conditions of employment. To our mind, this objective cannot be achieved without giving due consideration to the peculiarities and unique characteristics of the employer. In the case at bar, there is no dispute that the mother corporation (SMC) spun-off two of its divisions and thereby gave birth to two (2) other entities now known as Magnolia Corporation and San Miguel Foods, Inc. In order to effect a smooth transition, the companies concerned continued to recognize the existing unions as the bargaining agents of their respective bargaining units. In the meantime, the other unions in these companies eventually concluded their CBA negotiations on the remaining term and all of them agreed on a 3-year cycle. Notably, the following CBAs were forged incorporating a term of 3years on the renegotiated provisions, to wit:

1. SMC -

daily-paid employees union (IBM)

2. SMF Plant.

monthly-paid employees and daily-paid employees at the Cabuyao

There is a direct link between the voluntary recognition by the company of the continuing representative status of the unions after the aforementioned spin-offs and the stand of the company for a 3-year renegotiated cycle when the economic provisions of the existing CBAs expired, i.e., to maintain stability and avoid confusion when the umbilical cord of the two divisions were severed from their parent. These two cannot be considered independently of each other for they were intended to reinforce one another. Precisely, the company conceded to face the same union notwithstanding the spin-offs in order to preserve industrial peace during the infancy of the two corporations. If the union would insist on a shorter renegotiated term, then all the advantages gained by both parties in this regard, would have gone to naught. With this in mind, this office feels that it will betray its mandate should we order the parties to execute a 2-year renegotiated term for then chaos and confusion, rather than tranquility, would be the order of the day. Worse, there is a strong likelihood that such a ruling might spawn discontent and possible mass actions against the company coming from the other unions who had already agreed to a 3-year renegotiated terms. If this happens, the purpose of this Offices intervention into the parties controversy would have been defeated.[15]

The issue as to the term of the non-representation provisions of the CBA need not belabored especially when we take note of the Memorandum of the Secretary of Labor dated February 24, 1994 which was mentioned in the Resolution

of Undersecretary Bienvenido Laguesma on January 16, 1995 in the certification election case involving the SMC employees.[16] In said memorandum, the Secretary of Labor had occasion to clarify the term of the renegotiated terms of the CBA vis-a-vis the term of the bargaining agent, to wit:

As a matter of policy the parties are encourages (sic) to enter into a renegotiated CBA with a term which would coincidde (sic) with the aforesaid five (5) year term of the bargaining representative.

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.

With respect to the second issue, there is, likewise, no merit in petitioner-unions 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. Management saw the need for these transformations in keeping with its vision and long term strategy as it explained in its letter addressed to the employees dated August 13, 1991:

x x x As early as 1986, we announced the decentralization program and spoke of the need for structures that can react fast to competition, a changing environment, shorter product life cycles and shifts in consumer preference. We further stated

in the 1987 Annual Report to Stockholders that San Miguels businesses will be more autonomous and self sufficient so as to better acquire and master new technologies, cope with a labor force with different expertises and expectations, and master and satisfy the changing needs of our customers and end- consumers. As subsidiaries, Magnolia and FLD will gain better industry focus and flexibility, greater awareness of operating results, and speedier, more responsive decision making.

xxx

We only have to look at the experience of Coca-Cola Bottlers Philippines, Inc., since this company was organized about ten years ago, to see the benefits that arise from restructuring a division of San Miguel into a more competitive organization. As a stand-alone enterprise, CCBPI engineered a dramatic turnaround and has sustained its sales and market share leadership ever since.

We are confident that history will repeat itself, and the transformation of Magnolia and FLD will be successful as that of CCBPI.[17]

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.[18] 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.[20]

Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical personalities. Thus, they can not belong to a single bargaining unit as held in the case of Diatagon Labor Federation Local 110 of the ULGWP v. Ople.[21] We elucidate:

The fact that their businesses are related and that the 236 employees of Georgia Pacific International Corporation were originally employees of Lianga Bay Logging Co., Inc. is not a justification for disregarding their separate personalities. Hence, the 236 employees, who are now attached to Georgia Pacific International Corporation, should not be allowed to vote in the certification election at the Lianga Bay Logging Co., Inc. They should vote at a separate certification election to determine the collective bargaining representative of the employees of Georgia Pacific International Corporation.

Petitioner-unions 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 performed.[22] Considering the spinoffs, 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[23] while SMFI is involved in the production of feeds and the processing of chicken.[24] 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.

We reiterate what we have explained in the case of University of the Philippines v. Ferrer- Calleja[25] that:

[T]here are various factors which must be satisfied and considered in determining the proper constituency of a bargaining unit. No one particular factor is itself decisive of the determination. The weight accorded to any particular factor varies in accordance with the particular question or questions that may arise in a given case. What are these factors? Rothenberg mentions a good number, but the most pertinent to our case are: (1) will of the employees (Globe Doctrine); (2) affinity and unit of employees interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees x x.

xxx

An enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the 10th Annual Report of the National Labor Relations Board wherein it is emphasized that the factors which said board may consider and weigh in fixing appropriate units are: the history, extent and type of organization of employees; the history of their collective bargaining; the history, extent and type of organization of employees in other plants of the same employer, or other employers in the same industry; the skill wages, work, and working conditions of the employees; the desires of the employees; the eligibility of the employees for membership in the union or unions involved; and the relationship between the unit or units proposed and the employers organization, management, and operation x x.

x x In said report, it is likewise emphasized that the basic test in determining the appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162) x x.

Finally, we take note of the fact that the separate interests of the employees of Magnolia and SMFI from those of SMC has been recognized in the case of Daniel Borbon v. Laguesma.[26]We quote:

Even assuming in gratia argumenti that at the time of the election they were regular employees of San Miguel, nonetheless, these workers are no longer connected with San Miguel Corporation in any manner because Magnolia has ceased to be a division of San Miguel Corporation and has been formed into a separate corporation with a personality of its own (p. 305, Rollo). This development, which was brought to our attention by private respondents, necessarily renders moot and academic any further discourse on the propriety of the elections which petitioners impugn via the present recourse (p. 319, Rollo).

In view of all the foregoing, we do not find any grave abuse of discretion on the part of the Secretary of Labor in rendering the assailed Order.

WHEREFORE, the petition is DISMISSED for lack of merit. The Temporary Restraining Order issued on March 29, 1995 is lifted.

SO ORDERED. [G.R. No. 135547. January 23, 2002]

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. BIENVENIDO LAGUESMA in his capacity as Secretary of Labor and Employment; PHILIPPINE AIRLINES (PAL), LUCIO TAN, HENRY SO UY, ANTONIO V. OCAMPO, MANOLO E. AQUINO, JAIME J. BAUTISTA, and ALEXANDER O. BARRIENTOS,respondents.

D E C I S I O N QUISUMBING, J.:

In this special civil action for certiorari and prohibition, petitioners charge public respondents with grave abuse of discretion amounting to lack or excess of jurisdiction for acts taken in regard to the enforcement of the agreement dated September 27, 1998, between Philippine Airlines (PAL) and its union, the PAL Employees Association (PALEA).

The factual antecedents of this case are as follows:

On June 5, 1998, PAL pilots affiliated with the Airline Pilots Association of the Philippines (ALPAP) went on a three-week strike, causing serious losses to the financially beleaguered flag carrier. As a result, PALs financial situation went from bad to worse. Faced with bankruptcy, PAL adopted a rehabilitation plan and downsized its labor force by more than one-third.

On July 22, 1998, PALEA went on strike to protest the retrenchment measures adopted by the airline, which affected 1,899 union members. The strike ended four days later, when PAL and PALEA agreed to a more systematic reduction in PALs work force and the payment of separation benefits to all retrenched employees.

On August 28, 1998, then President Joseph E. Estrada issued Administrative Order No. 16 creating an Inter-Agency Task Force (Task Force) to address the problems of the ailing flag carrier. The Task Force was composed of the Departments of Finance, Labor and Employment, Foreign Affairs, Transportation and Communication, and Tourism, together with the Securities and Exchange Commission (SEC). Public respondent Edgardo Espiritu, then the Secretary of Finance, was designated chairman of the Task Force. It was empowered to summon all parties concerned for conciliation, mediation (for) the purpose of arriving at a total and complete solution of the problem.[1] Conciliation meetings were then held between PAL management and the three unions representing the airlines employees,[2] with the Task Force as mediator.

On September 4, 1998, PAL management submitted to the Task Force an offer by private respondent Lucio Tan, Chairman and Chief Executive Officer of PAL, of a plan to transfer shares of stock to its employees. The pertinent portion of said plan reads:

1. From the issued shares of stock within the group of Mr. Lucio Tans holdings, the ownership of 60,000 fully paid shares of stock of Philippine Airlines with a par value of PHP5.00/share will be transferred in favor of each employee of Philippine Airlines in the active payroll as of September 15, 1998. Should any share-owning employee leave PAL, he/she has the option to keep the shares or sells (sic) his/her shares to his/her union or other employees currently employed by PAL. 2. The aggregate shares of stock transferred to PAL employees will allow them three (3) members to (sic) the PAL Board of Directors. We, thus, become partners in the boardroom and together, we shall address and find solutions to the wide range of problems besetting PAL.

3. In order for PAL to attain (a) degree of normalcy while we are tackling its problems, we would request for a suspension of the Collective Bargaining Agreements (CBAs) for 10 years.[3]

On September 10, 1998, the Board of Directors of PALEA voted to accept Tans offer and requested the Task Forces assistance in implementing the same. Union members, however, rejected Tans offer. Under intense pressure from PALEA members, the unions directors subsequently resolved to reject Tans offer.

On September 17, 1998, PAL informed the Task Force that it was shutting down its operations effective September 23, 1998, preparatory to liquidating its assets and paying off its creditors. The airline claimed that given its labor problems, rehabilitation was no longer feasible, and hence, the airline had no alternative but to close shop.

On September 18, 1998, PALEA sought the intervention of the Office of the President in immediately convening the parties, the PAL management, PALEA, ALPAP, and FASAP, including the SEC under the direction of the Inter-Agency Task Force, to prevent the imminent closure of PAL.[4]

On September 19, 1998, PALEA informed the Department of Labor and Employment (DOLE) that it had no objection to a referendum on the Tans offer. 2,799 out of 6,738 PALEA members cast their votes in the referendum under DOLE supervision held on September 21-22, 1998. Of the votes cast, 1,055 voted in favor of Tans offer while 1,371 rejected it.

On September 23, 1998, PAL ceased its operations and sent notices of termination to its employees.

Two days later, the PALEA board wrote President Estrada anew, seeking his intervention. PALEA offered a 10-year moratorium on strikes and similar actions and a waiver of some of the economic benefits in the existing CBA.[5] Tan, however, rejected this counter- offer.

On September 27, 1998, the PALEA board again wrote the President proposing the following terms and conditions, subject to ratification by the general membership:

1. Each PAL employee shall be granted 60,000 shares of stock with a par value of P5.00, from Mr. Lucio Tans shareholdings, with three (3) seats in the PAL Board and an additional seat from government shares as indicated by His Excellency;

2. Likewise, PALEA shall, as far as practicable, be granted adequate representation in committees or bodies which deal with matters affecting terms and conditions of employment;

3. To enhance and strengthen labor-management relations, the existing LaborManagement Coordinating Council shall be reorganized and revitalized, with adequate representation from both PAL management and PALEA;

4. To assure investors and creditors of industrial peace, PALEA agrees, subject to the ratification by the general membership, (to) the suspension of the PAL-PALEA CBA for a period of ten (10) years, provided the following safeguards are in place: a. PAL shall continue recognizing PALEA as the duly certified bargaining agent of the regular rank-and-file ground employees of the Company;

b. The union shop/maintenance of membership provision under the PAL-PALEA CBA shall be respected.

c.

No salary deduction, with full medical benefits.

5. PAL shall grant the benefits under the 26 July 1998 Memorandum of Agreement forged by and between PAL and PALEA, to those employees who may opt to retire or be separated from the company.

6. PALEA members who have been retrenched but have not received separation benefits shall be granted priority in the hiring/rehiring of employees.

7. In the absence of applicable Company rule or regulation, the provisions of the Labor Code shall apply.[6]

Among the signatories to the letter were herein petitioners Rivera, Ramiso, and Aranas, as officers and/or members of the PALEA Board of Directors. PAL

management accepted the PALEA proposal and the necessary referendum was scheduled.

On October 2, 1998, 5,324 PALEA members cast their votes in a DOLEsupervised referendum. Of the votes cast, 61% were in favor of accepting the PALPALEA agreement, while 34% rejected it.

On October 7, 1998, PAL resumed domestic operations. On the same date, seven officers and members of PALEA filed this instant petition to annul the September 27, 1998 agreement entered into between PAL and PALEA on the following grounds:

PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND EXCEEDED THEIR JURISDICTION IN ACTIVELY PURSUING THE CONCLUSION OF THE PAL-PALEA AGREEMENT AS THE CONSTITUTIONAL RIGHTS TO SELF-ORGANIZATION AND COLLECTIVE BARGAINING, BEING FOUNDED ON PUBLIC POLICY, MAY NOT BE WAIVED, NOR THE WAIVER, RATIFIED.

II

PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND EXCEEDED THEIR JURISDICTION IN PRESIDING OVER THE CONCLUSION OF THE PAL-PALEA AGREEMENT UNDER THREAT OF ABUSIVE EXERCISE OF PALS MANAGEMENT PREROGATIVE TO CLOSE BUSINESS USED AS SUBTERFUGE FOR UNION-BUSTING.

The issues now for our resolution are:

(1) Is an original action for certiorari and prohibition the proper remedy to annul the PAL-PALEA agreement of September 27, 1998;

(2) Is the PAL-PALEA agreement of September 27, 1998, stipulating the suspension of the PAL-PALEA CBA unconstitutional and contrary to public policy? Anent the first issue, petitioners aver that public respondents as functionaries of the Task Force, gravely abused their discretion and exceeded their jurisdiction when they actively pursued and presided over the PAL-PALEA agreement.

Respondents, in turn, argue that the public respondents merely served as conciliators or mediators, consistent with the mandate of A.O. No. 16 and merely supervised the conduct of theOctober 3, 1998 referendum during which the PALEA members ratified the agreement. Thus, public respondents did not perform any judicial and quasi-judicial act pertaining to jurisdiction. Furthermore, respondents pray for the dismissal of the petition for violating the hierarchy of courts doctrine enunciated in People v. Cuaresma[7] and Enrile v. Salazar.[8]

Petitioners allege grave abuse of discretion under Rule 65 of the 1997 Rules of Civil Procedure. The essential requisites for a petition for certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.[9] For writs of prohibition, the requisites are: (1) the impugned act must be that of a tribunal, corporation, board, officer, or person, whether exercising judicial, quasi-judicial or ministerial functions; and (2) there is no plain, speedy, and adequate remedy in the ordinary course of law. [10]

The assailed agreement is clearly not the act of a tribunal, board, officer, or person exercising judicial, quasi-judicial, or ministerial functions. It is not the act of public respondents Finance Secretary Edgardo Espiritu and Labor Secretary Bienvenido Laguesma as functionaries of the Task Force. Neither is there a judgment, order, or resolution of either public respondents involved. Instead, what exists is a contract between a private firm and one of its labor unions, albeit entered into with the assistance of the Task Force. The first and second requisites for certiorari and prohibition are therefore not present in this case.

Furthermore, there is available to petitioners a plain, speedy, and adequate remedy in the ordinary course of law. While the petition is denominated as one for certiorari and prohibition, its object is actually the nullification of the PAL-PALEA agreement.

As such, petitioners proper remedy is an ordinary civil action for annulment of contract, an action which properly falls under the jurisdiction of the regional trial courts.[11] Neither certiorari nor prohibition is the remedy in the present case.

Petitioners further assert that public respondents were partial towards PAL management. They allegedly pressured the PALEA leaders into accepting the agreement. Petitioners ask this Court to examine the circumstances that led to the signing of said agreement. This would involve review of the facts and factual issues raised in a special civil action for certiorari which is not the function of this Court.[12]

Nevertheless, considering the prayer of the parties principally we shall look into the substance of the petition, in the higher interest of justice[13] and in view of the public interest involved, inasmuch as what is at stake here is industrial peace in the nations premier airline and flag carrier, a national concern.

On the second issue, petitioners contend that the controverted PAL-PALEA agreement is void because it abrogated the right of workers to self-organization[14] and their right to collective bargaining.[15] Petitioners claim that the agreement was not meant merely to suspend the existing PAL-PALEA CBA, which expires on September 30, 2000, but also to foreclose any renegotiation or any possibility to forge a new CBA for a decade or up to 2008. It violates the protection to labor policy[16] laid down by the Constitution. Article 253-A of the Labor Code reads:

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

Under this provision, insofar as representation is concerned, a CBA has a term of five years, while the other provisions, except for representation, may be negotiated not later than three years after the execution.[17] Petitioners submit that a 10-year CBA suspension is inordinately long, way beyond the maximum statutory life of a CBA, provided for in Article 253-A. By agreeing to a 10-year suspension, PALEA, in effect, abdicated the workers constitutional right to bargain for another CBA at the mandated time.

We find the argument devoid of merit.

A CBA is a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement.[18] The primary purpose of a CBA is the stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace.[19] In construing a CBA, the courts must be practical and realistic and give due consideration to the context in which it is negotiated and the purpose which it is intended to serve.[20]

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

In the instant case, it was PALEA, as the exclusive bargaining agent of PALs ground employees, that voluntarily entered into the CBA with PAL. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA. Either case was the unions exercise of its right to collective bargaining. The right to free collective bargaining, after all, includes the right to suspend it. The acts of public respondents in sanctioning the 10-year suspension of the PALPALEA CBA did not contravene the protection to labor policy of the Constitution. The agreement afforded full protection to labor; promoted the shared responsibility between workers and employers; and the exercised voluntary modes in settling disputes, including conciliation to foster industrial peace."[21]

Petitioners further allege that the 10-year suspension of the CBA under the PALPALEA agreement virtually installed PALEA as a company union for said period, amounting to unfair labor practice, in violation of Article 253-A of the Labor Code mandating that an exclusive bargaining agent serves for five years only.

The questioned proviso of the agreement reads:

a. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of the regular rank-and-file ground employees of the Company;

Said proviso cannot be construed alone. In construing an instrument with several provisions, a construction must be adopted as will give effect to all. Under Article 1374 of the Civil Code,[22]contracts cannot be construed by parts, but clauses must be interpreted in relation to one another to give effect to the whole. The legal effect of a contract is not determined alone by any particular provision disconnected from all others, but from the whole read together.[23] The aforesaid provision must be read within the context of the next clause, which provides:

b. The union shop/maintenance of membership provision under the PAL-PALEA CBA shall be respected.

The aforesaid provisions, taken together, clearly show the intent of the parties to maintain union security during the period of the suspension of the CBA. Its objective is to assure the continued existence of PALEA during the said period. We are unable to declare the objective of union security an unfair labor practice. It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. For this reason, the law has allowed stipulations for union shop and closed shop as means of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis--vis the employer.[24]

Petitioners contention that the agreement installs PALEA as a virtual company union is also untenable. Under Article 248 (d) of the Labor Code, a company union exists when the employer acts [t]o initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters. The case records are bare of any showing of such acts by PAL.

We also do not agree that the agreement violates the five-year representation limit mandated by Article 253-A. Under said article, the representation limit for the exclusive bargaining agent applies only when there is an extant CBA in full force and effect. In the instant case, the parties agreed to suspend the CBA and put in abeyance the limit on the representation period.

In sum, we are of the view that the PAL-PALEA agreement dated September 27, 1998, is a valid exercise of the freedom to contract. Under the principle of inviolability of contracts guaranteed by the Constitution,[25] the contract must be upheld. WHEREFORE, there being no grave abuse of discretion shown, the instant petition is DISMISSED. No pronouncement as to costs.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur. G.R. No. 96490 February 3, 1992

INDOPHIL petitioner, vs.

TEXTILE

MILL

WORKERS

UNION-PTGWO,

VOLUNTARY ARBITRATOR TEODORICO P. CALICA and INDOPHIL TEXTILE MILLS, INC., respondents.

Romeo C. Lagman for petitioner.

Borreta, Gutierrez & Leogardo for respondent Indophil Textile Mills, Inc.

MEDIALDEA, J.:

This is a petition for certiorari seeking the nullification of the award issued by the respondent Voluntary Arbitrator Teodorico P. Calica dated December 8, 1990 finding that Section 1 (c), Article I of the Collective Bargaining Agreement between Indophil Textile Mills, Inc. and Indophil Textile Mill Workers Union-PTGWO does not extend to the employees of Indophil Acrylic Manufacturing Corporation as an extension or expansion of Indophil Textile Mills, Incorporated.

The antecedent facts are as follows:

Petitioner Indophil Textile Mill Workers Union-PTGWO is a legitimate labor organization duly registered with the Department of Labor and Employment and the exclusive bargaining agent of all the rank-and-file employees of Indophil Textile Mills, Incorporated. Respondent Teodorico P. Calica is impleaded in his official capacity as the Voluntary Arbitrator of the National Conciliation and Mediation Board of the Department of Labor and Employment, while private respondent Indophil Textile Mills, Inc. is a corporation engaged in the manufacture, sale and

export of yarns of various counts and kinds and of materials of kindred character and has its plants at Barrio Lambakin. Marilao, Bulacan.

In April, 1987, petitioner Indophil Textile Mill Workers Union-PTGWO and private respondent Indophil Textile Mills, Inc. executed a collective bargaining agreement effective from April 1, 1987 to March 31, 1990.

On November 3, 1967 Indophil Acrylic Manufacturing Corporation was formed and registered with the Securities and Exchange Commission. Subsequently, Acrylic applied for registration with the Board of Investments for incentives under the 1987 Omnibus Investments Code. The application was approved on a preferred nonpioneer status.

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 plant facilities and installations and to any extension and expansion thereat. (Rollo, p.4)

In other words, it is the petitioner's contention that Acrylic is part of the Indophil bargaining unit.

The petitioner's contention was opposed by private respondent which submits that it is a juridical entity separate and distinct from Acrylic.

The existing impasse led the petitioner and private respondent to enter into a submission agreement on September 6, 1990. The parties jointly requested the public respondent to act as voluntary arbitrator in the resolution of the pending labor dispute pertaining to the proper interpretation of the CBA provision.

After the parties submitted their respective position papers and replies, the public respondent Voluntary Arbitrator rendered its award on December 8, 1990, the dispositive portion of which provides as follows:

PREMISES CONSIDERED, it would be a strained interpretation and application of the questioned CBA provision if we would extend to the employees of Acrylic the coverage clause of Indophil Textile Mills CBA. Wherefore, an award is made to the effect that the proper interpretation and application of Sec. l, (c), Art. I, of the 1987 CBA do (sic) not extend to the employees of Acrylic as an extension or expansion of Indophil Textile Mills, Inc. (Rollo, p.21)

Hence, this petition raising four (4) issues, to wit:

1. WHETHER OR NOT THE RESPONDENT ARBITRATOR ERRED IN INTERPRETING SECTION 1(c), ART I OF THE CBA BETWEEN PETITIONER UNION AND RESPONDENT COMPANY.

2. WHETHER OR NOT INDOPHIL ACRYLIC IS A SEPARATE AND DISTINCT ENTITY FROM RESPONDENT COMPANY FOR PURPOSES OF UNION REPRESENTATION.

3. WHETHER OR NOT THE RESPONDENT ARBITRATOR GRAVELY ABUSED HIS DISCRETION AMOUNTING TO LACK OR IN EXCESS OF HIS JURISDICTION.

4. WHETHER OR NOT THE RESPONDENT ARBITRATOR VIOLATED PETITIONER UNION'S CARDINAL PRIMARY RIGHT TO DUE PROCESS. (Rollo, pp. 6-7)

The central issue submitted for arbitration is whether or not the operations in Indophil Acrylic Corporation are an extension or expansion of private respondent

Company. Corollary to the aforementioned issue is the question of whether or not the rank-and-file employees working at Indophil Acrylic should be recognized as part of, and/or within the scope of the bargaining unit. Petitioner maintains that public respondent Arbitrator gravely erred in interpreting Section l(c), Article I of the CBA in its literal meaning without taking cognizance of the facts adduced that the creation of the aforesaid Indophil Acrylic is but a devise of respondent Company to evade the application of the CBA between petitioner Union and respondent Company.

Petitioner stresses that the articles of incorporation of the two corporations establish that the two entities are engaged in the same kind of business, which is the manufacture and sale of yarns of various counts and kinds and of other materials of kindred character or nature.

Contrary to petitioner's assertion, the public respondent through the Solicitor General argues that the Indophil Acrylic Manufacturing Corporation is not an alter ego or an adjunct or business conduit of private respondent because it has a separate legitimate business purpose. In addition, the Solicitor General alleges that the primary purpose of private respondent is to engage in the business of manufacturing yarns of various counts and kinds and textiles. On the other hand, the primary purpose of Indophil Acrylic is to manufacture, buy, sell at wholesale basis, barter, import, export and otherwise deal in yarns of various counts and kinds. Hence, unlike private respondent, Indophil Acrylic cannot manufacture textiles while private respondent cannot buy or import yarns.

Furthermore, petitioner emphasizes that the two corporations have practically the same incorporators, directors and officers. In fact, of the total stock subscription of Indophil Acrylic, P1,749,970.00 which represents seventy percent (70%) of the total subscription of P2,500,000.00 was subscribed to by respondent Company.

On this point, private respondent cited the case of Diatagon Labor Federation v. Ople, G.R. No. L-44493-94, December 3, 1980, 10l SCRA 534, which ruled that two corporations cannot be treated as a single bargaining unit even if their businesses are related. It submits that the fact that there are as many bargaining units as there are companies in a conglomeration of companies is a positive proof that a corporation is endowed with a legal personality distinctly its own, independent and separate from other corporations (see Rollo, pp. 160-161).

Petitioner notes that the foregoing evidence sufficiently establish that Acrylic is but an extension or expansion of private respondent, to wit:

(a) the two corporations have their physical plants, offices and facilities situated in the same compound, at Barrio Lambakin, Marilao, Bulacan;

(b) many of private respondent's own machineries, such as dyeing machines, reeling, boiler, Kamitsus among others, were transferred to and are now installed and being used in the Acrylic plant;

(c) the services of a number of units, departments or sections of private respondent are provided to Acrylic; and

(d) the employees of private respondent are the same persons manning and servicing the units of Acrylic. (see Rollo, pp. 12-13) Private respondent insists that the existence of a bonafide business relationship between Acrylic and private respondent is not a proof of being a single corporate entity because the services which are supposedly provided by it to Acrylic are auxiliary services or activities which are not really essential in the actual production of Acrylic. It also pointed out that the essential services are discharged exclusively by Acrylic personnel under the control and supervision of Acrylic managers and supervisors.

In sum, petitioner insists that the public respondent committed grave abuse of discretion amounting to lack or in excess of jurisdiction in erroneously interpreting the CBA provision and in failing to disregard the corporate entity of Acrylic.

We find the petition devoid of merit.

Time and again, We stress that the decisions of voluntary arbitrators are to be given the highest respect and a certain measure of finality, but this is not a hard and fast rule, it does not preclude judicial review thereof where want of jurisdiction, grave

abuse of discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the law were brought to our attention. (see Ocampo, et al. v. National Labor Relations Commission, G.R. No. 81677, 25 July 1990, First Division Minute Resolution citing Oceanic Bic Division (FFW) v. Romero, G.R. No. L43890, July 16, 1984, 130 SCRA 392)

It should be emphasized that in rendering the subject arbitral award, the voluntary arbitrator Teodorico Calica, a professor of the U.P. Asian Labor Education Center, now the Institute for Industrial Relations, found that the existing law and jurisprudence on the matter, supported the private respondent's contentions. Contrary to petitioner's assertion, public respondent cited facts and the law upon which he based the award. Hence, public respondent did not abuse his discretion.

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 of 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. (Umali et al. v. Court of Appeals, G.R. No. 89561, September 13, 1990, 189 SCRA 529, 542)

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 respondent 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.

All premises considered, the Court is convinced that the public respondent Voluntary Arbitrator did not commit grave abuse of discretion in its interpretation of Section l(c), Article I of the CBA that the Acrylic is not an extension or expansion of private respondent.

ACCORDINGLY, the petition is DENIED and the award of the respondent Voluntary Arbitrator are hereby AFFIRMED.

SO ORDERED.

Narvasa, C.J., Cruz and Grino-Aquino, JJ., concur.

THIRD DIVISION [G.R. No. 91915. September 11, 1992.] DIVINE WORD UNIVERSITY OF TACLOBAN, Petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT and DIVINE WORD UNIVERSITY EMPLOYEES UNION-ALU, Respondents. DECISION ROMERO, J.:

Assailed in this petition for certiorari for being violative of the "constitutional right of employees to self-organization which includes the right to form, join or assist labor organizations of their own choosing for purposes of collective bargaining," 1 are the Orders of May 23, 1989 and January 17, 1990 issued by then Secretary of Labor and Employment Franklin H. Drilon and Acting Secretary of Labor and Employment Dionisio D. de la Serna, respectively. Culled from the records are the following facts which led to the filing of the instant petition: On September 6, 1984, Med-Arbiter Bienvenido C. Elorcha certified the Divine Word University Employees Union (DWUEU) as the sole and exclusive bargaining agent of the Divine Word University (University for brevity). On March 7, 1985, DWUEU submitted its collective bargaining proposals. On March 26, 1985, the University replied and requested a preliminary conference to be held on May 28, 1985. However, two days before the scheduled conference or on May 26, 1985, DWUEU's resigned vice-president Mr. Brigido Urminita (or Urmeneta) wrote a letter addressed to the University unilaterally withdrawing the CBA proposals. Consequently, the preliminary conference was cancelled. 2 After almost three years, or on March 11, 1988, DWUEU, which had by then affiliated with the Associated Labor Union, 3 requested a conference with the University for the purpose of continuing the collective bargaining negotiations. 4 Not having heard from the University, DWUEU-ALU sent a follow-up letter on March 23, 1988 reiterating its request for a conference and warning the University against committing acts of interference through its various meetings with both the academic and non-academic employees regarding their union affiliation and activities. Despite the letter, the University persisted in maintaining silence. On April 25, 1988, DWUEU-ALU filed with the National Conciliation and Mediation Board of the Department of Labor and Employment a notice of strike on the grounds of bargaining deadlock and unfair labor practice acts, specifically, refusal to bargain, discrimination and coercion on (sic) employees. 5 The conferences which were held after the filing of the notice of

strike led to the conclusion of an agreement between the University and DWUEU-ALU on May 10, 1888 with the following terms: "1. Union will submit their (sic) CBA proposals on Friday, May 13, 1988 for whatever action management will take. 2. Union and management agrees (sic) to sit down and determine (sic) the number of employees that will represent their bargaining unit. 3. Conciliation proceedings is (sic) temporarily suspended until the parties inform this office of further development. 4. The issues of discrimination: re Ms. Colinayo and Ms. Cinco Flores is settled. 5. Issue (sic) on coercion and refusal to bargain shall be subject of continuing dialogue. 6. Atty. Jacinto shall be given 10 days notice in the next conciliation meeting." 6 However, it turned out that an hour before the May 10, 1988 agreement was concluded, the University had filed a petition for certification election with the Region VIII office of the Department of Labor and Employment. 7 On the other hand, on May 19, 1988, DWUEU-ALU, consonant with the agreement, submitted its collective bargaining proposals. These were ignored by the University. Thereafter, through the National Conciliation and Mediation Board (NCMB) of Region VIII, marathon conciliation conferences were conducted but to no avail. Hence, on August 25, 1988, then Secretary of Labor Franklin M. Drilon, exercising his powers under Art. 263(g) of the Labor Code, issued an Order assuming jurisdiction over the labor dispute and directing all striking workers to report back to work within twenty-four (24) hours and the management to accept them back under the same terms and conditions prevailing prior to the work stoppage. The Secretary also designated the NCMB to hear the case and to submit its report thereon. 8 On the same day, Med-Arbiter Rodolfo S. Milado, acting on the University's petition for certification election, issued an Order directing the conduct of a certification election to be participated in by DWUEU-ALU and "no union," after he found the petition to be "wellsupported in fact and in law." 9 Said Order prompted the DWUEU-ALU to file with the Secretary of Labor an urgent motion seeking to enjoin Milado from further acting on the matter of the certification election. On September 20, 1988, the Labor Secretary granted said motion and directed Milado to hold in abeyance any and all certification election proceedings at the University pending the resolution of the labor dispute. 10 The Labor Secretary's Order, predicated on his extraordinary powers under Art. 263 (g) of the Labor Code, conformed with this Court s Resolution of October 29, 1987 in the Bulletin Today cases (G.R. Nos. 79276 and 79883) where the issue of strong disagreement among the parties on the question of representation was deemed subsumed in the labor dispute certified for compulsory arbitration. The Secretary added:

"Underscoring the necessity to conform with this settled doctrine is the fact that the dispute over which this Office assumed jurisdiction arose from the alleged continued refusal by the University to negotiate a CBA with the Union despite the latter's certification as exclusive bargaining agent in 1984. Necessarily related thereto is the representativity issue raised by the University in its certification election petition. The resolution of these issues in one proceeding is, in the words of the Supreme Court, 'meet and proper in view of the very special circumstances obtaining in this case, and will prevent split jurisdiction and that multiplicity of proceedings which the law abhors' (24 December 1987 [should be December 17, 1987] resolution of the Supreme Court in the Bulletin Today cases, supra). Moreover, to allow a certification election to proceed at this point in time might further rupture the already strained labor-management relations pervading at the University. The assumption order issued by this Office merely served as a temporary bond to hold together such a fragile relationship. More importantly, the projected election hastily decreed would preempt the proper resolution of the issues raised and pursued so zealously by the employees that prompted them to stage their strike." 11 The NCMB of Region VIII conducted hearings on the case from October 17-18, 1988. On October 26, 1988, the Divine Word University Independent Faculty and Employees Union (DWUIFEU), which was registered earlier that day, filed a motion for intervention alleging that it had "at least 20% of the rank and file employees" of the University. 12 Exercising once again his extraordinary powers under Art. 263(g) of the Labor Code, the Secretary consolidated "the entire labor dispute including all incidents arising therefrom, or necessarily related thereto" in his Order of May 23, 1989 13 and the following cases were "subsumed or consolidated to the labor dispute": the petition for certification election docketed as MED-ARB-Case No. 5-04-88, the DWUEU's complaint docketed as NLRC Case No. 8-032188, and the University's complaint docketed as NLRC Case No. 8-0323-88. Thus, in said Order of May 23, 1989, the Secretary of Labor resolved these issues: "(1) whether there was refusal to bargain and an impasse in bargaining; (2) whether the complaints for unfair labor practices against each other filed by both parties, including the legality of the strike with the NLRC, which later on was subsumed by the assumption Order, are with merits; and, (3) whether or not the certification election can be passed upon by this Office." On the first issue, the Secretary of Labor said: "It is a matter of record that when the Union filed its Notice of Strike (Exh. A) two of the issues it raised were bargaining deadlock and refusal to bargain. It is also worth mentioning that the CBA proposals by the Union were submitted on March 7, 1985 (Exh. 9) after Med-Arbiter Bienvenido Elorcha issued a certification election Order dated September 6, 1984 (Exh. 4). An examination of the CBA proposals submitted by the Union of the University showed there was (sic) some negotiations that has (sic) taken place as indicated on the handwritten notations made in the CBA proposal (Exh. F). The said proposals include among others, union scope, union recognition, union security, union rights, job security, practices and privileges, terms and conditions of work, leave of absence, hours of work, compensation salary and wages, workers'

rights and safety, workers' education, retirement longevity pay, strike and lockouts and grievance machinery. The said CBA proposals were indorsed by DWU President to Atty. Generosa R. Jacinto, Divine Word University legal counsel together with a copy of the Union CBA proposals. The submission of the CBA proposals and the reply letter of the DWU counsel, dated March 26, 1985 to the Union indicated that the CBA negotiations process was set into motion. DWU's counsel even suggested that the preliminary conference between the union and the university be scheduled on 28 May 1985 at 2:30 P.M. which unfortunately did not take place due to the alleged withdrawal of the CBA proposals. Undeniably, the Union and the DWU have not been able to conclude a CBA since its certification on 6 September 1984 by then Med-Arbiter Bienvenido Elorcha. But the nonconclusion of a CBA within one year, as in this case, does not automatically authorize the holding of a certification election when it appears that a bargaining deadlock issue has been submitted to conciliation by the certified bargaining agent. The records show that the Notice of Strike was filed by the Union on 25 April 1988, citing bargaining deadlock as one of the grounds (Annex '1'), while the Petition for Certification Election was filed by the DWU on 10 May 1988. The filing of the notice of strike was precipitated by the University's act of not replying to the Union's letters of March 11 and March 23, 1988. This being the case, Section 3, Rule V, Book V of the Rules Implementing the Labor Code applies and we quote: 'Sec. 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 it (sic) before the filing of a petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party has been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.' Clearly, a bargaining deadlock exists and as a matter of fact this is being conciliated by the National Conciliation and Mediation Board at the time the University filed its Petition for Certification Election on 10 May 1988. In fact the deadlock remained unresolved and was in fact mutually agreed upon to be conciliated further by the NCMB as per items 1 and 5 of the 'Agreement' (Exhibit 'L'). The aforequoted rule clearly barred the Med-Arbiter from further entertaining the petition for certification election. Furthermore, the various communications sent to the University by the Union prior to the filing of the notice of strike was enough opportunity for the former to raise the issue of representation if it really casts doubt to the majority status of the Union. More importantly, if DWU indeed doubted the status of the union, how come it entered into an agreement with the latter on May 10, 1988. Apparently, the move to file the petition on the same day was an afterthought on the part of the University which this Office considers as fatal." 14

The same Order dismissed not only the case filed by DWUEU-ALU for unfair labor practice on the ground of the union's failure to prove the commission of the unfair labor practice acts specifically complained of (NLRC Case No. 8-0321-88) but also the complaint filed by the University for unfair labor practices and illegal strike for "obvious lack of merit brought about by its utter failure to submit evidence" (NLRC Case No. 8-0323-88). Citing the Bulletin Today cases, the said Order pronounced as untenable the University s claim that the assumption Order earlier issued by the Office of the Secretary of Labor merely held in abeyance the holding of a certification election and that the representation issue was not deemed consolidated by virtue of the said assumption Order. Accordingly, the Order has this dispositive portion: "WHEREFORE, ALL THE FOREGOING PREMISES CONSIDERED, the Divine Word University of Tacloban and the Divine Word University Employees Union are hereby directed to enter into a collective bargaining agreement by adopting the Union's CBA proposals sent to the DWU President on 19 May 1988 (Exhibit '6'). DWU is hereby warned that any unwarranted delay in the execution of the collective bargaining agreement will be construed as an unfair labor practice act. Moreover, the petition for certification election filed by the University is hereby dismissed for lack of merit and the Order of Med-Arbiter Rodolfo Milado set aside. Likewise, NLRC CASES Nos. 8-0321-88 and 8-0323 filed by the Union and the DWU, respectively, are hereby dismissed for lack of merit. SO ORDERED." 15 The University filed a motion for the reconsideration of said Order. It was opposed by the DWUEU-ALU. However, since on May 5, 1989 the DWUEU-ALU had filed a second notice of strike charging the University with violation of the return-to-work order of the Secretary of Labor and unfair labor practices such as dismissal of union officers, coercion of employees and illegal suspension, 16 the Office of the Secretary called for a series of conciliation and mediation conferences between the parties. At the July 5, 1989 conference, the University agreed to submit its proposals on how to settle amicably the labor dispute on or before July 17, 1989. On said date, however, the University failed to appear. Instead, its representative phoned in a request for the resetting of the conference purportedly because its Board of Directors had failed to muster a quorum. Hence, after so informing ALU's Eastern Visayas Vice-President, the conference was rescheduled for July 19, 1989. The University once again failed to appear. In view of the University's intransigence, the DWUEU-ALU pursued its second notice of strike on November 24, 1989. Four days later, the University filed with the Office of the Secretary of Labor a motion praying that said Office assume jurisdiction over the dispute or certify the same to the NLRC for compulsory arbitration on the ground that the strike affected not only the University but also its other academic and non-academic employees, the students and their parents. On December 4, 1989, the Office of the Secretary of Labor received a Resolution passed by the students of the University urging said Office's assumption of jurisdiction over the labor dispute and the earliest resolution of the case.

Consequently, on December 29, 1989, Secretary Drilon issued an Order reiterating the August 28, 1988 Order which assumed jurisdiction over the labor dispute. He ordered all striking workers to return to work within 24 hours and the University to accept them back under the same terms and conditions of employment; deemed the issues raised in the May 5, 1989 notice of strike as "subsumed in this case"; ordered the Director of Regional Office No. VIII to hear the issues raised in said notice of strike and to submit his findings and recommendations within ten days from submission of the case by the parties, and enjoined the parties to cease and desist from any act that may "aggravate the employer-employee relationship." On January 17, 1990, Acting Secretary of Labor Dionisio L. de la Serna, "dismissed" for lack of merit the University's motion for reconsideration and affirmed the Order of May 23, 1989. He noted the fact that the March 7, 1985 collective bargaining proposals of the DWUEU had not been validly withdrawn as the union's Vice-President had resigned and the withdrawal was signed only by three of the eight members of the Executive Board of said union. Granting that the withdrawal was valid, the Acting Secretary believed that it did not "exculpate the University from the duty to bargain with the Union" because the collective bargaining processes had been "set in motion from the time the CBA proposals was (sic) received by the University until the impasse took place on account of its failure to reply to the Union's letters pursuing its CBA Proposals dated March 11 and 23, 1988." On the University's assertion that no negotiations took place insofar as the March 7, 1985 collective bargaining proposals are concerned, the Acting Secretary found that: ". . . The records indicate otherwise Conciliation meetings were conducted precisely to discuss the CBA proposals the Union submitted to the University on March 7, 1985. As a matter of fact, the University admitted the existence of the deadlock when a provision was incorporated in the agreement it signed on May 10, 1988 with the Union which reads: 'a. That on the matter of Bargaining Deadlock 1. Union will submit their (renewed) CBA proposals on Friday May 13, 1988 for whatever action management will take. 2. Union and Management agree to sit down and determine the number of employees that will represent (constitute) their bargaining unit; xxx xxx xxx' On account of the deadlock regarding the March 7, 1985 CBA proposals, it was agreed that the Union submit a renewed CBA proposal which it did on May 19, 1988. The records indicate that no response was made by the University. The uncooperative posture of the University to respond and continue with the negotiations could very well be explained when one (1) hour prior to the start of the conciliation on May 10, 1988, the University filed a Petition for Certification with (sic) Regional Office. The surreptitious filing of the petition and at the same time cunningly entering into an agreement which required the Union to submit a renewed CBA proposal, is patently negotiating in bad faith. The University should have candidly and timely raised the issue

of representation, if it believed that such issue was valid, not by entering into an agreement. The May 10, 1988 Agreement only served to falsely heighten the expectations of the Union and this Office that a mutually acceptable settlement of the dispute was in the offing. This Office cannot tolerate such actuations by the University." 17 The Acting Secretary then concluded that for reneging on the agreement of May 10, 1988 and for its "reluctance and subscription to legal delay," the University should be "declared in default." He also maintained that since under the circumstances the University cannot claim deprivation of due process, the Office of the Secretary of Labor may rightfully impose the Union's May 19, 1988 collective bargaining agreement proposals motu proprio. On the University's contention that the motion for intervention of the DWU-IFEU was not resolved, the Acting Secretary ruled that said motion was in effect denied when the petition for certification election filed by the University was dismissed in the Order of May 23, 1989. Hence, the University had recourse to instant petition. In its petition for certiorari and prohibition with preliminary injunction filed on February 9, 1990, the University raises as grounds therefor the following: "A. Respondent Secretary committed grave and patent abuse of discretion amounting to lack of jurisdiction in issuing his order dated 17 January 1990 finally denying petitioner's motion for reconsideration in the face of the order dated 29 December 1989 and subsequent acts of DOLE official subsuming the second notice of strike with the first notice of strike. B. In the absence of a certified CBA and there having been no certification election held in petitioner unit for more than five (5) years, a certification election is mandatory. C. Respondent Secretary committed grave and patent abuse of discretion in issuing his orders dated 23 May 1989 and 17 January 1990 disregarding evidence on record, provisions of law and established jurisprudence. D. Petitioner was denied due process." 18 Citing the dispositive portion of the December 29, 1989 Order of the Secretary of Labor which states that the issues raised in the May 5, 1989 notice of strike "are ordered subsumed in this case" and elaborating on the meaning of the word "subsume," i.e., "to include within a larger class, group, order, etc.," 19 the petitioner University argues that the Secretary of Labor "cannot resolve petitioner's and (intervenor) DWU-IFEU's motions for reconsideration (in the NS. 1) of the Order dated 23 May 1989 until the proceedings in the subsumed NS. 2 are terminated." It opines that since the Regional Director is an extension of the Secretary of Labor, the latter should have waited for the recommendation of the former on the issues in notices of strike nos. 1 and 2 before the he issued the Order of January 17, 1990. We agree with the Acting Secretary of Labor's observation that the action for intervention had in effect been denied by the dismissal of the petition for certification election in the May 23, 1989 Order. The sub silencio treatment of the motion for intervention in said Order does not mean that

the motion was overlooked. It only means, as shown by the findings of facts in the same Order, that there was no necessity for the holding of a certification election wherein the DWU-IFEU could participate. In this regard, petitioner's undue interest in the resolution of the DWU-IFEU's motion for intervention becomes significant since a certification election is the sole concern of employees except where the employer itself has to file a petition for certification election. But once an employer has filed said petition, as the petitioner did in this case, its active role ceases and it becomes a mere bystander. Any uncalled-for concern on the part of the employer may give rise to the suspicion that it is batting for a company union. 20 Petitioner's contention that the Acting Secretary of Labor should have deferred the issuance of the Order of January 17, 1990 until after his receipt of the Regional Director's recommendation on the notices of strike is, under the circumstances, untenable. Ideally, a single decision or order should settle all controversies resulting from a labor dispute. This is in consonance with the principle of avoiding multiplicity of suits. However, the exigencies of a case may also demand that some matters be threshed out and resolved ahead of the others. Any contrary interpretation of the Secretary of Labor's powers under Art. 263(g) of the Labor Code on this matter would only result in confusion and delay in the resolution of the manageable aspects of the labor dispute. In this case, resolution of the motion for reconsideration at the earliest possible time was urgently needed to set at rest the issues regarding the first notice of strike, the certification election and the unfair labor practice cases filed by the University and the DWUEU-ALU. The nature of the business of the University demanded immediate and effective action on the part of the respondent public officials. Otherwise, not only the contending parties in the dispute would be adversely affected but more importantly, the studentry and their parents. It should be emphasized that on January 17, 1990, the second notice of strike could not have been resolved as yet considering that at that time, Regional Director Teddy S. Cabeltes was still conducting the conference between the parties in pursuance of the directive in the Order of December 19, 1989. The Secretary, or for that matter, the Acting Secretary, could not have intended the efforts of the Regional Director to be inutile or fruitless. Thus, when he set aside the issues raised in the second notice of strike, the Acting Secretary was acting in accordance with the exigencies of the circumstances of the case. Hardly can it be said to be an abuse of his discretion. On the issue of whether or not a certification election should have been ordered by the Secretary of Labor, pertinent are the following respective provisions of the Labor Code and Rule V, Book V of the Implementing Rules and Regulations of the same Code: "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. (Emphasis 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 conciliation 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. 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): standstill." 21 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." 22 The word is synonymous with the word impasse 23 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." 24 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. This is clear from the provisions of the Labor Code Art. 250(a) of which states: "ART. 250. Procedure in collective bargaining. The following procedures shall be observed in collective bargaining: (a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than

ten (10) calendar days from receipt of such notice. (b) Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than ten (10) calendar days from the date of request. (c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call; (d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and (e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator." Considering the procedure outlined above, the Court cannot help but notice that the DWUEU was not entirely blameless in the matter of the delay in the bargaining process. While it is true that as early as March 7, 1985, said union had submitted its collective bargaining proposals and that, its subsequent withdrawal by the DWUEU Vice-President being unauthorized and therefore ineffective, the same proposals could be considered as subsisting, the fact remains that said union remained passive for three years. The records do not show that during this three-year period, it exerted any effort to pursue collective bargaining as a means of attaining better terms of employment. It was only after its affiliation with the ALU that the same union, through the ALU Director for Operations, requested an "initial conference" for the purpose of collective bargaining. 25 That the DWUEU abandoned its collective bargaining proposals prior to its affiliation with ALU is further confirmed by the fact that in the aforequoted May 10, 1988 agreement with the University, said Union bound itself to submit a new set of proposals on May 13, 1988. Under the circumstances, the agreement of May 10, 1988 may as well be considered the written notice to bargain referred to in the aforequoted Art. 250(a) of the Labor Code, which thereby set into motion the machinery for collective bargaining, as in fact, on May 19, 1988, DWUEU-ALU submitted its collective bargaining proposals. Be that as it may, the Court is not inclined to rule that there has been a deadlock or an impasse in the collective bargaining process. As the Court earlier observed, there has not been a "reasonable effort at good faith bargaining" on the part of the University. While DWUEU-ALU was opening all possible avenues for the conclusion of an agreement, the record is replete with evidence on the University's reluctance and thinly disguised refusal to bargain with the duly certified bargaining agent, such that the inescapable conclusion is that the University evidently had no intention of bargaining with it. Thus, while the Court recognizes that technically, the University has the right to file the petition for certification election as there was no bargaining deadlock to speak of, to grant its prayer that the herein assailed Orders be annulled would put an unjustified premium on bad faith bargaining.

Bad faith on the part of the University is further exemplified by the fact that an hour before the start of the May 10, 1988 conference, it surreptitiously filed the petition for certification election. And yet during said conference, it committed itself to "sit down" with the Union. Obviously, the University tried to preempt the conference which would have legally foreclosed its right to file the petition for certification election. In so doing, the University failed to act in accordance with Art. 252 of the Labor Code which defines the meaning of the duty to bargain collectively as "the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith." Moreover, by filing the petition for certification election while agreeing to confer with the DWUEU-ALU, the University violated the mandate of Art. 19 of the Civil Code that "(e)very person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith." Moreover, the University's unscrupulous attitude towards the DWUEU-ALU is also betrayed by its belated questioning of the status of the said union. The communications between them afforded the University ample opportunity to raise the issue of representation if indeed it was doubtful of the DWUEU-ALU's status as a majority union, but it failed to do so. On the other hand, in the agreement of May 10, 1988, the University even agreed "to sit down and determine the number of employees that will represent their bargaining unit." This clearly indicates that the University recognized the DWUEU-ALU as the bargaining representative of the employees and is, therefore, estopped from questioning the majority status of the said union. Hence, petitioner's contention that the DWUEU-ALU's proposals may not be unilaterally imposed on it on the ground that a collective bargaining agreement is a contract wherein the consent of both parties is indispensable is devoid of merit. A similar argument had already been disregarded in the case of Kiok Loy v. NLRC, 26 where we upheld the order of the NLRC declaring the union's draft CBA proposal as the collective agreement which should govern the relationship between the parties. Kiok Loy v. NLRC is applicable in the instant case considering that the facts therein have also been indubitably established in this case. These factors are: (a) the union is the duly certified bargaining agent; (b) it made a definite request to bargain and submitted its collective bargaining proposals, and (c) the University made no counter proposal whatsoever. As we said in Kiok Loy, "[a] company's refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is especially true where the Union's request for a counter proposal is left unanswered." 27 Moreover, the Court added in the same case that "it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures." 28 That being the case, the petitioner may not validly assert that its consent should be a primordial consideration in the bargaining process. By its acts, no less than its inaction which bespeak its insincerity, it has forfeited whatever rights it could have asserted as an employer. We, therefore, find it superfluous to discuss the two other contentions in its petition. WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. This decision is immediately executory. Costs against the petitioner.

SO ORDERED. Bidin, Davide, Jr. and Melo, JJ., concur. Gutierrez, Jr., J., is on leave.