Doctrines ULP

LABOR RELATIONS
DOCTRINES, CBA AND ULP CASES

Page 1 of 41

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE) vs. HON. LEONARDO A.
QUISUMBING G.R. No. 128845 June 1, 2000
Labor Law; Constitutional Law; That public policy abhors inequality and discrimination is beyond
contention.That public policy abhors inequality and discrimination is beyond contention. Our
Constitution and laws reflect the policy against these evils. The Constitution in the Article on Social
Justice and Human Rights exhorts Congress to give highest priority to the enactment of measures
that protect and enhance the right of all people to human dignity, reduce social, economic, and
political inequalities. The very broad Article 19 of the Civil Code requires every person, in the
exercise of his rights and in the performance of his duties, [to] act with justice, give everyone his due,
and observe honesty and good faith.
Same; Same; International law, which springs from general principles of law, likewise proscribes
discrimination.International law, which springs from general principles of law, likewise proscribes
discrimination. General principles of law include principles of equity, i.e., the general principles of
fairness and justice, based on the test of what is reasonable. The Universal Declaration of Human
Rights, the International Covenant on Economic, Social, and Cultural Rights, the International
Convention on the Elimination of All Forms of Racial Discrimination, the Convention against
Discrimination in Education, the Convention (No. 111) Concerning Discrimination in Respect of
Employment and Occupationall embody the general principle against discrimination, the very
antithesis of fairness and justice. The Philippines, through its Constitution, has incorporated this
principle as part of its national laws.
Same; Same; State directed to promote equality of employment opportunities for all.The
Constitution also directs the State to promote equality of employment opportunities for all.
Similarly, the Labor Code provides that the State shall ensure equal work opportunities regardless of
sex, race or creed. It would be an affront to both the spirit and letter of these provisions if the State, in
spite of its primordial obligation to promote and ensure equal employment opportunities, closes its
eyes to unequal and discriminatory terms and conditions of employment.
Same; Same; Discrimination, particularly in terms of wages, is frowned upon by the Labor Code.
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for
example, prohibits and penalizes the payment of lesser compensation to a female employee as against
a male employee for work of equal value. Article 248 declares it an unfair labor practice for an
employer to discriminate in regard to wages in order to encourage or discourage membership in any
labor organization.
Same; Same; If an employer accords employees the same position and rank, the presumption is that
these employees perform equal work.The School contends that petitioner has not adduced evidence
that local-hires perform work equal to that of foreign-hires. The Court finds this argument a little
cavalier. If an employer accords employees the same position and rank, the presumption is that these
employees perform equal work. This presumption is borne by logic and human experience. If the
employer pays one employee less than the rest, it is not for that employee to explain why he receives
less or why the others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the employee is treated
unfairly.
LABOR RELATIONS

Page 2 of 41

Same; Same; The State has the right and duty to regulate the relations between labor and capital.
The Constitution enjoins the State to protect the rights of workers and promote their welfare, to
afford labor full protection. The State, therefore, has the right and duty to regulate the relations
between labor and capital. These relations are not merely contractual but are so impressed with
public interest that labor contracts, collective bargaining agreements included, must yield to the
common good. Should such contracts contain stipulations that are contrary to public policy, courts
will not hesitate to strike down these stipulations. [International School Alliance of Educators vs.
Quisumbing, 333 SCRA 13(2000)]
ACOJE WORKERS' UNION vs. NATIONAL MINES AND ALLIED WORKERS' UNION
(NAMAWU) G.R. No. L-18848 April 23, 1963
Labor unions; Certification election; Voters list may not be contested where petitioner was given an
opportunity to object in the lower court but did not do so.Where the labor unions concerned agreed,
not only to the holding of the election, but also to the use of the company payroll as of a given date as
the basis for determining who are qualified to vote subject to the approval of the lower court, and said
unions were given an opportunity to make comments and observations on said list contained in the
payroll, and petitioning unions representative agreed to abide by whatever ruling the court may make
on the matter of inclusion and exclusion of voters, and, although two other unions and the company
moved for reconsideration of the ruling of the lower court on said matter, the petitioning onion failed
to do so, the petitioner may no longer contest the accuracy of said voters list.
Same; Same; General allegation of duress not sufficient to invalidate election.A general allegation
that workers threatened, coerced, and intimidated to vote for respondent union, without anything to
indicate the number of workers involved, without the supporting affidavit of any of them, and without
an offer to introduce their testimony or the testimony of any of them, was in the light of the
attending circumstances clearly insufficient to warrant the invalidation of the certifica-tion election
in the present case.
Same; Same; Alleged disorder disproven by minutes.As regards the disorder that allegedly
characterized the election, the minutes thereof, stating that said election was peaceful, sufficient to
refute petitioners pretense. [Acoje Workres' Union vs. National Mines and Allied Workers' Union
(NAMAWU), 7 SCRA 730(1963)]
YOKOHAMA TIRE PHILIPPINES, INC vs. YOKOHAMA EMPLOYEES UNION G.R. No.
159553 December 10, 2007
Labor Law; Certification Elections; Dismissals; Without a final judgment declaring the legality of
dismissal, dismissed employees are eligible to participate and vote in certification elections.Section
2, Rule XII, the rule in force during the November 23, 2001 certification election clearly, unequivocally
and unambiguously allows dismissed employees to vote during the certification election if the case
they filed contesting their dismissal is still pending at the time of the election. Here, the votes of
employees with illegal dismissal cases were challenged by petitioner although their cases were still
pending at the time of the certification election on November 23, 2001. These cases were filed on June
27, 2001 and the appeal of the Labor Arbiters February 28, 2003 Decision was resolved by the NLRC
only on August 29, 2003. Even the new rule has explicitly stated that without a final judgment
LABOR RELATIONS

Page 3 of 41

declaring the legality of dismissal, dismissed employees are eligible or qualified voters. [Yokohama
Tire Philippines, Inc. vs. Yokohama Employees Union, 539 SCRA 556(2007)]
SAMAHAN NG MANGGAGAWA SA PACIFIC PLASTIC vs. HON. BIENVENIDO
LAGUESMA G.R. No. 111245 January 31, 1997
Labor Law; Collective Bargaining; Certification Election; In order to have a valid election at least a
majority of all eligible voters in the unit must have cast their votes.The certification election held on
October 6, 1992 is valid. Art. 256 of the Labor Code provides that in order to have a valid election, at
least a majority of all eligible voters in the unit must have cast their votes. The certification election
results show that more than a majority, i.e., 62 out of a total of 98 eligible voters included in the list of
employees obtained from the SSS, cast their votes. Hence, the legal requirement for a valid election
was met.
Same; Same; Same; The policy of the Labor Code of encouraging the holding of a certification election
as the definitive and certain way of ascertaining the choice of employees as to the labor organization
in a collective bargaining unit underscored by the Court.It should ideally be the payroll which
should have been used for the purpose of the election. However, the unjustified refusal of a company to
submit the payroll in its custody, despite efforts to make it produce it, compelled resort to the SSS list
as the next best source of information. After all, the SSS list is a public record whose regularity is
presumed. In Port Workers Union of the Philippines (PWUP) v. Undersecretary of Labor and
Employment, this Court underscored the policy of the Labor Code of encouraging the holding of a
certification election as the definitive and certain way of ascertaining the choice of employees as to the
labor organization in a collective bargaining unit.
Same; Same; Same; Grounds of protests not raised before the close of the proceedings and duly
formalized within five (5) days after the close of the election proceedings are deemed waived.At the
latest, petitioners objection to the use of the SSS should have been raised during the elections and
formalized in its election protest. We agree with private respondent MNMPP in its Opposition to
SAMAHANs election protest dated October 15, 1992 that under the Implementing Rules, grounds of
protests not raised before the close of the proceedings and duly formalized within five (5) days after
the close of the election proceedings are deemed waived.
Same; Same; Same; The representation case shall not be adversely affected by a collective bargaining
agreement registered before or during the last 60 days of a subsisting agreement or during the
pendency of the representation case.Petitioners contention in its Motion for Deferment of Pre-
election Conference was that the CBA between it and the PPC signed during the pendency of the
representation proceedings, rendered the certification election moot and academic. Rule V, Book V of
the Omnibus Rules Implementing the Labor Code, 4 provides: The representation case shall not,
however, be adversely affected by a collective bargaining agreement registered before or during the last
60 days of a subsisting agreement or during the pendency of the representation case.
Same; Same; Same; A CBA which was prematurely renewed is not a bar to the holding of a
certification election.This rule was applied in the case of ALU-TUCP v. Trajano where we held that
the representation case will not be adversely affected by a CBA registered before or during the freedom
period or during the pendency of the representation case. In ALU v. Calleja, we also held that a CBA,
LABOR RELATIONS

Page 4 of 41

which was prematurely renewed, is not a bar to the holding of a certification election. Hence, the CBA
entered into between petitioner and PPC during the pendency of the representation case and after the
filing of the petition for certification election on August 24,1990, cannot possibly prejudice the
certification election nor render it moot.
Same; Same; Same; A certification election can be conducted despite pendency of a petition to cancel
the union registration certificate.With respect to petitioners claim that the proceedings for the
cancellation of MNMPPs union registration was a prejudicial question, suffice it to say that as held
in Association of Court of Appeals Employees vs. Calleja, a certification election can be conducted
despite pendency of a petition to cancel the union registration certificate. For the fact is that at the
time the respondent union filed its petition for certification, it still had the legal personality to perform
such act absent an order directing its cancellation.
[Samahan ng Manggagawa sa Pacific Plastic vs. Laguesma, 267 SCRA 303(1997)]
KIOK LOY vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) G.R. No. L-54334
January 22, 1986
Labor Law; Unfair Labor Practice; Collective Bargaining Agreement; Collective bargaining, concept
of.Collective bargaining which is defined as negotiations towards a collective agreement, 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.
Same; Same; Same; Same; Preconditions for setting in motion mechanics of collective bargaining.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal
duty to initiate contract negotiation. 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.
Same; Same; Same; Same; Companys refusal to make counter-proposal to the unions proposed
collective bargaining agreement, an indication of its bad faith.We are in total conformity with
respondent NLRCs 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. A Companys refusal to make counter proposal if considered in relation to
LABOR RELATIONS

Page 5 of 41

the entire bargaining process, may indicate bad faith and this is specially true where the Unions
request for a counter proposal is left unanswered. Even during the period of compulsory arbitration
before the NLRC, petitioner Companys approach and attitudestalling 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.
Same; Same; Same; Same; When unfair labor practice, committed; Case at bar.The case at bar is
not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald
Publications the 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 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.
Same; Same; Same; Due process; Denial of due process, not a case of, where the employers failure to
be heard was due to the various postponements granted to it and failure to reply to the unions
successive letters to bring the company to the bargaining table.Petitioners 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 latters 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 over-all 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.
Same; Same; Same; Employer should not be allowed with impunity to resort to schemes feigning
negotiations by going through empty gestures; Findings of NLRC of reasonableness of any collective
bargaining agreement, accorded respect.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. 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.
[Kiok Loy vs. NLRC, 141 SCRA 179(1986)]
LABOR RELATIONS

Page 6 of 41

GENERAL MILLING CORPORATION vs HON. COURT OF APPEALS G.R. No. 146728
February 11, 2004
Labor Law; Collective Bargaining Agreements; Unfair Labor Practices; The law mandates that the
representation provision of a CBA should last for five years; Where the company refuses to send a
counter-proposal to the union and to bargain anew on the economic terms of the CBA, it commits an
unfair labor practice.The law mandates that the representation provision of a CBA should last for
five years. The relation between labor and management should be undisturbed until the last 60 days
of the fifth year. Hence, it is indisputable that when the union requested for a renegotiation of the
economic terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent
of the workers, because it was seeking said renegotiation within five (5) years from the date of
effectivity of the CBA on December 1, 1988. The unions proposal was also submitted within the
prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of said
period. It was obvious that GMC had no valid reason to refuse to negotiate in good faith with the
union. For refusing to send a counterproposal to the union and to bargain anew on the economic terms
of the CBA, the company committed an unfair labor practice under Article 248 of the Labor Code,
which provides that: ART. 248. Unfair labor practices of employers.It shall be unlawful for an
employer to commit any of the following unfair labor practice: . . . (g) To violate the duty to bargain
collectively as prescribed by this Code; . . .
Same; Same; Same; The crucial question whether or not a party has met his statutory duty to bargain
in good faith typically turns on the facts of the individual casethere is no per se test of good faith in
bargaining; It bears stressing that the procedure in collective bargaining prescribed by the Code is
mandatory because of the basic interest of the state in ensuring lasting industrial peace.We have
held that the crucial question whether or not a party has met his statutory duty to bargain in good
faith typically turns on the facts of the individual case. There is no per se test of good faith in
bargaining. Good faith or bad faith is an inference to be drawn from the facts. The effect of an
employers or a unions actions individually is not the test of good-faith bargaining, but the impact of
all such occasions or actions, considered as a whole. Under Article 252 abovecited, both parties are
required to perform their mutual obligation to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement. The union lived up to this obligation when it
presented proposals for a new CBA to GMC within three (3) years from the effectivity of the original
CBA. But GMC failed in its duty under Article 252. What it did was to devise a flimsy excuse, by
questioning the existence of the union and the status of its membership to prevent any negotiation. It
bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory
because of the basic interest of the state in ensuring lasting industrial peace.
Same; Same; Same; Where the employer did not even bother to submit an answer to the bargaining
proposals of the union, there is a clear evasion of the duty to bargain collectively.GMCs failure to
make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in
bargaining with the union. Its excuse that it felt the union no longer represented the workers, was
mainly dilatory as it turned out to be utterly baseless. We hold that GMCs refusal to make a counter-
proposal to the unions proposal for CBA negotiation is an indication of its bad faith. Where the
employer did not even bother to submit an answer to the bargaining proposals of the union, there is a
clear evasion of the duty to bargain collectively.
LABOR RELATIONS

Page 7 of 41

Same; Same; Same; Where the ill-timed letters of resignation from the union members indicate that
the employer had interfered with the right of its employees to self-organization, the company may be
found guilty of unfair labor practice.Did GMC interfere with the employees right to self-
organization? The CA found that the letters between February to June 1993 by 13 union members
signifying their resignation from the union clearly indicated that GMC exerted pressure on its
employees. The records show that GMC presented these letters to prove that the union no longer
enjoyed the support of the workers. The fact that the resignations of the union members occurred
during the pendency of the case before the labor arbiter shows GMCs desperate attempts to cast doubt
on the legitimate status of the union. We agree with the CAs conclusion that the ill-timed letters of
resignation from the union members indicate that GMC had interfered with the right of its employees
to self-organization. Thus, we hold that the appellate court did not commit grave abuse of discretion
in finding GMC guilty of unfair labor practice for interfering with the right of its employees to self-
organization.
Same; Same; Same; The general rule is that when a CBA already exists, its provision shall continue to
govern the relationship between the parties, until a new one is agreed upon, unless one of the parties
abuses this grace period by purposely delaying the bargaining process, in which case a departure from
the general rule is warranted.The provision mandates the parties to keep the status quo while they
are still in the process of working out their respective proposal and counter proposal. The general rule
is that when a CBA already exists, its provision shall continue to govern the relationship between the
parties, until a new one is agreed upon. The rule necessarily presupposes that all other things are
equal. That is, that neither party is guilty of bad faith. However, when one of the parties abuses this
grace period by purposely delaying the bargaining process, a departure from the general rule is
warranted.
Same; Same; Same; Under ordinary circumstances, it is not obligatory upon either side of a labor
controversy to precipitately accept or agree to the proposals of the other, but an erring party should not
be allowed to resort with impunity to schemes feigning negotiations by going through empty gestures;
If the company committed unfair labor practice by thwarting the negotiations for new economic terms
of the CBA, the draft CBA proposed by the union may be imposed on the company.Under ordinary
circumstances, it is not obligatory upon either side of a labor controversy to precipitately accept or
agree to the proposals of the other. But an erring party should not be allowed to resort with impunity
to schemes feigning negotiations by going through empty gestures. Thus, by imposing on GMC the
provisions of the draft CBA proposed by the union, in our view, the interests of equity and fair play
were properly served and both parties regained equal footing, which was lost when GMC thwarted the
negotiations for new economic terms of the CBA. The findings of fact by the CA, affirming those of the
NLRC as to the reasonableness of the draft CBA proposed by the union should not be disturbed since
they are supported by substantial evidence. On this score, we see no cogent reason to rule otherwise.
Hence, we hold that the Court of Appeals did not commit grave abuse of discretion amounting to lack
or excess of jurisdiction when it imposed on GMC, after it had committed unfair labor practice, the
draft CBA proposed by the union for the remaining two (2) years of the duration of the original CBA.
Fairness, equity, and social justice are best served in this case by sustaining the appellate courts
decision on this issue. [General Milling Corporation vs. Court of Appeals, 422 SCRA 514(2004)]
SAN PEDRO HOSPITAL OF DIGOS, INC. vs. SECRETARY OF LABOR G.R. No. 104624
October 11, 1996
LABOR RELATIONS

Page 8 of 41

Labor Law; Suspension of Operations; Temporary suspension of operations is recognized as a valid
exercise of management prerogatives provided it is not carried out in order to circumvent the
provisions of the Labor Code or to defeat the rights of the employees under the Code.Temporary
suspension of operations is recognized as a valid exercise of management prerogative provided it is not
carried out in order to circumvent the provisions of the Labor Code or to defeat the rights of the
employees under the Code. The determination to cease or suspend operations is a prerogative of
management that the State usually does not interfere with, as no business can be required to continue
operating at a loss simply to maintain the workers in employment. Such an act would be tantamount
to a taking of property without due process of law, which the employer has a right to resist. But where
it is shown that the closure is motivated not by a desire to prevent further losses, but to discourage the
workers from organizing themselves into a union for more effective negotiations with management, the
State is bound to intervene.
Same; Same; Evidence; Burden of Proof; The burden of proving that a temporary suspension is bona
fide, falls upon the employer.The burden of proving that such a temporary suspension is bonafide,
falls upon the employer. In this instance, petitioner had to establish the fact of its precarious financial
health, that its cessation of operations was really necessitated by its financial condition, and that said
condition would probably be alleviated or improved, or its losses abated, by undertaking such
suspension of operation. Peti-tioner could have at least partly met the foregoing requirements by
submitting its financial statements or records as proof of its financial crisis, since the purported
financial hemorrhage would definitely have been reflected therein. Thus, petitioners unexplained
and continued failure to submit its financial statements could not but raise grave doubts as to the
truth of the claimed financial crisis and the real purpose of the suspension of operations. It is not
enough to merely raise this issue nor to discuss it only in passing. The precarious financial condition
must be established by evidence, e.g., balance sheets and income statements, and the figures therein
must be interpreted and discussed at length. Peti-tioner was recklessly pushing its luck when it
believed that the Secretary could be convinced without first obtaining and examining petitioners
financial statements and the notes thereto. The fact that the conciliator never asked for them is no
sufficient excuse for not presenting the same, as such was petitioners duty.
Same; Same; Same; Same; It is a hornbook rule that employers who contemplate terminating the
services of their workers must base their decisions on more than just flimsy excuses, and this same
principle applies in temporary suspension of operations.It is a hornbook rule that employers who
contemplate terminating the services of their workers must base their decisions on more than just
flimsy excuses, considering that the dismissal of an employee from work involves not only the loss of
his position but, what is more important, his means of livelihood. The same principle applies in
temporary suspension of operations, as in this case, considering that it involves laying off employees
for a period of six months.
Same; Same; If a legitimate, valid and legal suspension of operations does not terminate but merely
suspends the employee-employer relationship, with more reason will an invalid and illegal suspension
of operations not affect the employment relationship.Art. 286 of the Labor Code provides: The bona
fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months
x x x shall not terminate employment. Section 12, Rule 1, Book VI of the Omnibus Rules
Implementing the Labor Code provides that the employer-employee relationship shall be deemed
suspended in case of the suspension of operation referred to above, it being implicitly assumed that
LABOR RELATIONS

Page 9 of 41

once operations are resumed, the employer-employee relationship is revived and restored. If a
legitimate, valid and legal suspension of operations does not terminate but merely suspends the
employee-employer relationship, with more reason will an invalid and illegal suspension of
operations, as in this case, not affect the employment relationship.
Same; Same; Collective bargaining can be conducted, and a new CBA may be entered into, during the
effectivity of a temporary suspension of operations.The foregoing premises considered, it is clear that
there is no basis for petitioner to claim that a new CBA should not be entered into or that collective
bargaining should not be conducted during the effectivity of a temporary suspension of operations. In
this instance, petitioner expressly represented that the suspension was to be for six months only. In the
absence of any other information, the plain and natural presumption will be that petitioner would
resume operations after six months, and therefore, it follows that a new CBA will be needed to govern
the employment relations of the parties, the old one having already expired. Clearly then, under the
circumstances, the respondent Secretary cannot be faulted nor considered to have gravely abused his
discretion for ordering the parties to enter into a new CBA.
Same; Collective Bargaining; Assumption of Jurisdiction; Where an employer refuses to bargain,
without valid and sufficient cause, the Secretary of Labor may, in the exercise of his powers under
Article 263(i) of the Labor Code to decide and resolve labor disputes, properly grant wage increases.
Did the Secretary act in excess of jurisdiction in imposing the wage increases and union shop
provision on the petitioner? We hold that he did not. While petitioner cannot be forced to abandon its
suspension of operations even if said suspension be declared unjustified, illegal and invalid, neither
can petitioner evade its obligation to bargain with the union, using the cessation of its business as
reason therefor. For, as already indicated above, the employer-employee relationship was merely
suspended (and not terminated) for the duration of the temporary suspension. Using the suspension
as an excuse to evade the duty to bargain is further proof of its illegality. It shows abuse of this option
and bad faith on the part of petitioner. And since it refused to bargain, without valid and sufficient
cause, the Secretary in the exercise of his powers under Article 263(i) of the Labor Code to decide and
resolve labor disputes, properly granted the wage increase and imposed the union shop provision.
Same; Same; Same; Backwages; Under Article 263(g) of the Labor Code, the Secretary of Labor is
authorized to penalize an erring employer who refuses to accept returning employees by ordering such
employer to pay backwages.Under Article 263(g) of the Labor Code, the Secretary is authorized to
penalize an erring employer who refuses to accept returning employees by ordering such employer to
pay backwages. This is within his jurisdiction and is warranted by his finding as to the invalidity of
the temporary suspension.
Same; Dismissal of Employees; Business Losses; Business reverses or losses are recognized by law as a
just cause for terminating employment.Business reverses or losses are recognized by law as a just
cause for terminating employment. This Court held in Columbia Development Corporation vs.
Minister of Labor and Employment that: Precisely because reverses in a business venture are
expected, the law recognizes the same as a just cause for terminating an employment [Art. 283(a) of
the Labor Code] and in many instances, this Court has affirmed the right of an employer to lay off or
dismiss employees because of losses in the operation of its business, lack of work and considerable
reduction in the volume of his business. [LVN Pictures and Workers Asso. vs. LVN Pictures, Inc., 35
SCRA 147 and the cases cited therein].
LABOR RELATIONS

Page 10 of 41

Same; Same; Same; Where an employer suffers serious and actual business reverses, management has
the final say as to whether it will continue to risk its capital in its business or not.The losses
registered in 1989, 1990 and 1991 cannot be deemed paltry. Consider also the loss of doctors and
patients prior to the temporary suspension. It is beyond cavil then that petitioner suffered serious and
actual business reverses. In such a case, management has the final say as to whether it will continue
to risk its capital in its business or not. This is properly its prerogative. Since there is basis for the
permanent closure of the business, we cannot read into it any attempt to defeat the rights of its
employees under the law, nor any oppressive and high-handed motives.
Same; Collective Bargaining; An employer which has already decided to close shop cannot be
compelled to enter into a new CBA. Thus, despite the absence of grave abuse of discretion on the
part of the respondent Secretary, this Court cannot impose upon petitioner the directive to enter into a
new CBA with the union for the very simple reason that to do so would be to compel petitioner to
continue its business when it had already decided to close shop, and that would be judicial tyranny on
our part. [San Pedro Hospital of Digos, Inc. vs. Secretary of Labor, 263 SCRA 98(1996)]
SUNDOWNER DEVELOPMENT CORPORATION vs. HON. FRANKLIN M. DRILON G.R.
No. 82341 December 6, 1989
Labor Relations; Collective Bargaining Agreement; Rule that labor contracts are not enforceable
against a transferee of an enterprise unless expressly assumed; Reasons.The rule is that unless
expressly assumed, labor contracts such as employment contracts and collective bargaining
agreements are not enforceable against a transferee of an enterprise, labor contracts being in
personam, thus binding only between the parties. A labor contract merely creates an action in
personam and does not create any real right which should be respected by third parties. This
conclusion draws its force from the right of an employer to select his employees and to decide when to
engage them as protected under our Constitution, and the same can only be restricted by law through
the exercise of the police power.
Same; Same; Same; No duty on the part of petitioner to inform the employees of its lease and purchase
of the assets and properties of Mabuhay; Reasons.Moreover, the court does not subscribe to the
theory of public respondent that petitioner should have informed NUWHRAIN of its lease of the
premises and its purchase of the assets and personal properties of Mabuhay therein so that said
employees could have taken steps to protect their interest. The court finds no such duty on the part of
petitioner and its failure to notify said employees cannot be an indicium of bad faith.
Same; Same; Same; Same; Employer-employee relationship; Petitioner cannot be compelled to absorb
the employees of Mabuhay and to pay them backwages; Reasons.Much less is there any evidence
that petitioner and respondent Mabuhay are joint tortfeasors as found by public respondent. While it
is true that petitioner is using the leased property for the same type of business as that of respondent
Mabuhay, there can be no continuity of the business operations of the predecessor employer by the
successor employer as respondent Mabuhay had not retained control of the business. Petitioner is a
corporation entirely different from Mabuhay. It has no controlling interest whatever in respondent
Mabuhay. Petitioner and Mabuhay have no privity and are strangers to each other. What is obvious is
that the petitioner, by purchasing the assets of respondent Mabuhay in the hotel premises, enabled
Mabuhay to pay its obligations to its employees. There being no employer-employee relationship
LABOR RELATIONS

Page 11 of 41

between the petitioner and the Mabuhay employees, the petition must fail. Petitioner can not be
compelled to absorb the employees of Mabuhay and to pay them backwages. [Sundowner Development
Corporation vs. Drilon, 180 SCRA 14(1989)]
GERARDO F. RIVERA vs. HON. EDGARDO ESPIRITU G.R. No. 135547 : January 23, 2002
Actions; Certiorari; Prohibition; Requisites.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. 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.
Same; Same; Same; Certiorari and Prohibition are not proper where what exists is a contract between
a private firm and one of its labor unions, albeit entered into with the assistance of an Inter-Agency
Task Force created to address the problems between the contracting parties.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.
Same; Same; Same; Contracts; Where the object of the action is actually the nullification of a contract
between an employer and one of its labor unions, the proper remedy is an ordinary civil action for
annulment of contract, an action which properly falls under the jurisdiction of the regional trial
courts, not certiorari or prohibition.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. Neither certiorari nor prohibition is
the remedy in the present case.
Labor Law; Words and Phrases; Collective Bargaining Agreement, Defined; 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, and 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.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. The primary purpose of a CBA is the
stabilization of labor-management relations in order to create a climate of a sound and stable
LABOR RELATIONS

Page 12 of 41

industrial peace. 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.
Same; Collective Bargaining; Article 253-A of the Labor Code has a two-fold purposeone is to
promote industrial stability and predictability, and 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.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.
Same; Same; The right to free collective bargaining, after all, includes the right to suspend it.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.
Same; Same; The acts of the public functionaries in sanctioning the 10-year suspension of the PAL-
PALEA CBA did not contravene the protection to labor policy of the Constitution.The acts of
public respondents in sanctioning the 10-year suspension of the PAL-PALEA 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.
Same; Same; Union Security Clauses; Unfair Labor Practice; The Court is unable to declare the
objective of union security an unfair labor practice.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, 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. 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
LABOR RELATIONS

Page 13 of 41

separately bargain with the employer. For this reason, the law has allowed stipulations 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.
Same; Same; Under Article 253-A of the Labor Code, the representation limit for the exclusive
bargaining agent applies only when there is an extant CBA in full force and effect.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.
Same; Same; The PAL-PALEA agreement dated 27 September 1998 is a valid exercise of the freedom
to contract, and under the principle of inviolability of contracts guaranteed by the Constitution, the
contract must be upheld.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, the contract must be upheld. [Rivera vs. Espiritu, 374
SCRA 351(2002)]
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO vs. HON. MA. NIEVES D.
CONFESOR; G.R. No. 111262 September 19, 1996
Labor Law; Labor Unions; Collective Bargaining; Legislators inclined to have the effectivity of the
CBA for three (3) years insofar as the economic as well as non-economic provisions are concerned.
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 non-economic provisions are concerned, except
representation.
Same; Same; Same; No 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.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.
Same; Same; Same; No merit in petitioner-unions assertion that the employees of Magnolia and
SMFI should still be considered part of the bargaining unit of SMC.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.
Same; Same; Same; Transformation of the companies is a managerial prerogative and business
judgment which the courts can not look into unless it is contrary to law, public policy or morals.
Undeniably, the transformation of the companies was a management prerogative and business
judgment which the courts can not look into unless it is contrary to law, public policy or morals.
Neither can we impute any bad faith on the part of SMC so as to justify the application of the doctrine
of piercing the corporate veil. Ever mindful of the employees interests, management has assured the
concerned employees that they will be absorbed by the new corporations without loss of tenure and
retaining their present pay and benefits according to the existing CBAs.
LABOR RELATIONS

Page 14 of 41

Same; Same; Same; Magnolia and SMFI became distinct entities with separate juridical
personalities.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.
Same; Same; Same; 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.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. Considering the spin-offs, the
companies would consequently have their respective and distinctive concerns in terms of the nature of
work, wages, hours of work and other conditions of employment.
Same; Same; Same; 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.Interests of employees in the different companies perforce differ. SMC is
engaged in the business of beer manufacturing. Magnolia is involved in the manufacturing and
processing of dairy products while SMFI is involved in the production of feeds and the processing of
chicken. The nature of their products and scales of business may require different skills which must
necessarily be commensurated by different compensation packages. The different companies may have
different volumes of work and different working conditions. For such reason, the employees of the
different companies see the need to group themselves together and organize themselves into distinctive
and different groups. It would then be best to have separate bargaining units for the different
companies where the employees can bargain separately according to their needs and according to their
own working conditions. [San Miguel Corporation Employees Union-PTGWO vs. Confesor, 262 SCRA
81(1996)]
LMG CHEMICALS CORPORATION vs. THE SECRETARY OF THE DEPARTMENT OF
LABOR AND EMPLOYMENT G.R. No. 127422 April 17, 2001
Labor Law; Collective Bargaining Agreements; If an employer could grant a wage increase to its
supervisors, there is no valid reason why it should deny the same to union members.Petitioner
company granted its supervisory employees, during the pendency of the negotiations between the
parties, a wage increase of P4,500 per month or P166 per day, more or less. Petitioner justified this by
saying that the said increase was pursuant to its earlier agreement with the supervisors. Hence, the
company had no choice but to abide by such agreement even if it was already sustaining losses as a
result of the strike of the rank-and-file employees. Petitioners actuation is actually a discrimination
against respondent union members. If it could grant a wage increase to its supervisors, there is no
valid reason why it should deny the same to respondent union members. Significantly, while
petitioner asserts that it sustained losses in the first part of 1996, yet during the May 9, 1996
conciliation meeting, it made the offer of P135 daily wage to the said union members.
Same; Same; Assumption of Jurisdiction; The authority of the Secretary of Labor to assume
jurisdiction carries with it the power to determine the retroactivity of the parties CBA.It must be
emphasized that respondent Secretary assumed jurisdiction over the dispute because it is impressed
LABOR RELATIONS

Page 15 of 41

with national interest. As noted by the Secretary, the petitioner corporation was then supplying the
sulfate requirements of MWSS as well as the sulfuric acid of NAPOCOR, and consequently, the
continuation of the strike would seriously affect the water supply of Metro Manila and the power
supply of the Luzon Grid. Such authority of the Secretary to assume jurisdiction carries with it the
power to determine the retroactivity of the parties CBA. 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.
Same; Same; Same; The Court should help labor authorities in providing workers immediate benefits,
without being hampered by arbitration or litigation processes that prove to be not only nerve-wracking
but financially burdensome in the long run.To deprive respondent Secretary of such power and
discretion would run counter to the well-established rule that all doubts in the interpretation of labor
laws should be resolved in favor of labor. In upholding the assailed orders of respondent Secretary,
this Court is only giving meaning to this rule. Indeed, the Court should help labor authorities in
providing workers immediate benefits, without being hampered by arbitration or litigation processes
that prove to be not only nerve-wracking but financially burdensome in the long run. [LMG Chemicals
Corporation vs. Secretary of the Department of Labor and Employment, 356 SCRA 577(2001)]
MANILA ELECTRIC COMPANY vs. Hon. SECRETARY OF LABOR LEONARDO
QUISUMBING G.R. No. 127598 February 22, 2000
Labor Law; Salaries; Bonus; As a rule, a bonus is not a demandable and enforceable obligation; it
may nevertheless be granted on equitable considerations as when the giving of such bonus has been
the companys long and regular practice.As a rule, a bonus is not a demandable and enforceable
obligation; it may nevertheless be granted on equitable considerations as when the giving of such
bonus has been the companys long and regular practice. 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. Thus we have ruled in National Sugar Refineries Corporation vs. NLRC:
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.
Same; Same; Same.In the case at bar, the record shows that 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.
Same; Same; Same; 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.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
LABOR RELATIONS

Page 16 of 41

can no longer be withdrawn by the company as this would amount to a diminution of the employees
existing benefits.
Same; Labor Union; Prohibition to Join Labor Union; Employees holding a confidential position are
prohibited from joining the union of the rank and file employees.Both MERALCO and the Office of
the Solicitor General dispute this ruling because it disregards the rule We have established on the
exclusion of confidential employees from the rank and file bargaining unit. In Pier 8 Arrastre vs.
Confesor and General Maritime and Stevedores Union, we ruled that: Put another way, the
confidential employee does not share in the same community of interests 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, 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.
Same; Job-Contracting; 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.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. 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).
Same; Collective Bargaining Agreement; Article 253-A serves as the guide in determining when the
CBA is to take effect.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 re-negotiated
not later than 3 years after its execution. Any agreement on such other provision 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.
Same; Same; If no agreement is reached within six (6) months from the expiry date of the three (3)
years that follow the CBA execution, the law expressly gives the parties the discretion to fix the
effectivity of the agreement.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 re-negotiated
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 partiesnot anybody elsethe discretion to fix the
effectivity of the agreement.
LABOR RELATIONS

Page 17 of 41

Same; Same; Principle of Hold Over; 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.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.
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. 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. [Manila Electric
Company vs. Quisumbing, 302 SCRA 173(1999)]
FVC LABOR UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS
ORGANIZATION (FVCLU-PTGWO) vs. SAMA-SAMANG NAGKAKAISANG MANGGAGAWA
SA FVC-SOLIDARITY OF INDEPENDENT AND GENERAL LABOR ORGANIZATIONS
(SANAMA-FVC-SIGLO) G.R. No. 176249 November 27, 2009
Labor Law; Labor Unions; Collective Bargaining Agreements (CBAs); The law allows a challenge to
the exclusive representation status of a collective bargaining agent through the filing of a certification
election petition only within 60 days from the FVC Labor Union-Philippine Transport and General
Workers Organization (FVCLU-PTGWO) vs. Sama-Samang Nagkakaisang Manggagawa sa FVC-
Solidarity of Independent and General Labor Organizations (SANAMA-FVC-SIGLO)
expiration of the five-year Collective Bargaining Agreement (CBA).The legal question before us
centers on the effect of the amended or extended term of the CBA on the exclusive representation status
of the collective bargaining agent and the right of another union to ask for certification as exclusive
bargaining agent. The question arises because the law allows a challenge to the exclusive
representation status of a collective bargaining agent through the filing of a certification election
petition only within 60 days from the expiration of the five-year CBA.
Same; Same; Same; By express provision of Article 253-A, the exclusive bargaining status cannot go
beyond five years and the representation status is a legal matter not for the workplace parties to agree
upon.We hold this FVCLU-PTGWO position to be correct, but only with respect to the original five-
year term of the CBA which, by law, is also the effective period of the unions exclusive bargaining
representation status. While the parties may agree to extend the CBAs original five-year term together
with all other CBA provisions, any such amendment or term in excess of five years will not carry with
it a change in the unions exclusive collective bargaining status. By express provision of the above-
quoted Article 253-A, the exclusive bargaining status cannot go beyond five years and the
representation status is a legal matter not for the workplace parties to agree upon. In other words,
despite an agreement for a CBA with a life of more than five years, either as an original provision or
by amendment, the bargaining unions exclusive bargaining status is effective only for five years and
can be challenged within sixty (60) days prior to the expiration of the CBAs first five years. [FVC
Labor Union-Philippine Transport and General Workers Organization (FVCLU-PTGWO) vs. Sama-
LABOR RELATIONS

Page 18 of 41

Samang Nagkakaisang Manggagawa sa FVC-Solidarity of Independent and General Labor
Organizations (SANAMA-FVC-SIGLO), 606 SCRA 198(2009)]
BENGUET CONSOLIDATED, INC. vs. BCI EMPLOYEES and WORKERS UNION-PAFLU;
G.R. No. L-24711 April 30, 1968
Labor law; Principle of substitution, meaning of.The principle of substitution, formulated by the
National Labor Relations Board, counterpart of our Court of Industrial Relations, means that where
there occurs a shift in employees union allegiance after the execution of a collective bargaining
contract with their employer, the employees can change their agentthe labor union, but the collective
bargaining contract which in still subsisting, continues to bind the employees up to its expiration
date. They may, however, bargain for the shortening of said expiration date. And the only
consideration for the substitutionary doctrine is the employees interest in the existing bargaining
agreement; the agents (Unions) interest never enters into the picture.
Same; Same; Under substitutionary doctrine, employees cannot renege on their collective bargaining
contract; Exception.The substitutionary doctrine provides that the employees cannot revoke the
validly executed collective bargaining contract with their employer by the simple expedient of
changing their bargaining agent. The new agent must respect the contract. The employees, thru their
new bargaining agent, cannot renege on the collective bargaining contract, except to negotiate with
management for the shortening hereof.
Same; Same; Same; New collective bargaining agent does not automatically assume all personal
undertakings of deposed union; Substitutionary doctrine, held inapplicable.The Substitutionary
doctrine cannot be invoked to support the claim that a newly certified collective bargaining agent
automatically assumes all personal undertakings, such as the no-strike stipulation in this case,
assumed by the deposed union. When the BBWU bound itself and its officers not to strike, it could not
bind all the rival unions because the BBWU was the agent only of the employees, not of the other
unions which possess distinct personalities.
Same; Same; Same; Same; Liability of labor union or board or committee members for non-fulfillment
of collective bargaining contract.Under Art. 1704 of the Civil Code, in collective bargaining, the
labor union or members of the board or committee signing the contract shall be liable for non-
fulfillment thereof. Where the defendants are not signatories to the contract, nor are they participants
thereof, there can be no liability on their own.
Damages; No liability for damages of labor union, officers or members, in absence of clear proof; Rule
of vicarious liability, Repealed.The rule now is that for a labor union and/or its officers and
members to be liable, there must be clear proof of actual participation in, or authorization or
ratification of the illegal acts. The rule of vicarious liability has since the passage of Republic Act
875 been expressly legislated out.
Agency; Everything binding on agent duly authorized binds principal, not vice-versa.Everything
that is binding on a duly authorized agent, acting as such, is binding on the principal; not vice-versa,
unless there is a mutual agency, or unless the agent expressly binds himself to the party with whom he
contracts, Art. 1897, Civil Code. As here, BBWU the previous agent was the one that expressly bound
LABOR RELATIONS

Page 19 of 41

itself to the other party, Benguet, Union, the new agent did not assume the undertaking of BBWU.
[Benguet Consolidated, Inc. vs. BCI Employees & Workers Union-PAFLU, 23 SCRA 465(1968)]
CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO
SERVICE WORKERS vs. HON. BIENVENIDO E. LAGUESMA; G.R. No. 118915 February 4,
1997
Actions; Due Process; Pleadings and Practice; A party cannot merely anchor its position on erroneous
namestypographical errors which cannot materially alter the substance and merit of an assailed
resolutionjust to attain a reversal of said resolution.Petitioner alleges that public respondent
Undersecretary Laguesma denied it due process when it ruled against the holding of a certification
election. It further claims that the denial of due process can be gleaned from the manner by which the
assailed resolution was written, i.e., instead of the correct name of the mother federation UNIFIED, it
was referred to as UNITED; and that the respondent unions name CMCEA-AFW was referred to as
CMCEA-AFLO. Petitioner maintains that such errors indicate that the assailed resolution was
prepared with indecent haste. We do not subscribe to petitioners contention. The errors pointed to by
petitioner can be classified as mere typographical errors which cannot materially alter the substance
and merit of the assailed resolution. Petitioner cannot merely anchor its position on the
aforementioned erroneous names just to attain a reversal of the questioned resolution. As correctly
observed by the Solicitor General, petitioner is merely nitpicking, vainly trying to make a
monumental issue out of a negligible error of the public respondent.
Same; Same; A party cannot complain of denial of due process when it failed to file its opposition to
oppose the other partys appealPetitioner also assails public respondents findings that the former
capitalize (sic) on the ensuing delay which was caused by the hospital and which resulted in the non-
conclusion of a CBA within the certification year. It further argues that the denial of its motion for a
fair hearing was a clear case of a denial of its right to due process. Such contention of petitioner
deserves scant consideration. A perusal of the record shows that petitioner failed to file its opposition
to oppose the grounds for respondent unions appeal. It was given an opportunity to be heard but lost
it- when it refused to file an appellees memorandum.
Labor Law; Certification Elections; Collective Bargaining; Even if one year had lapsed since the time
of declaration of a final certification result, and there is no collective bargaining deadlock, there is no
grave abuse of discretion committed by the DOLE when it ruled against another certification election
filed by another union where the delay in forging of the CBA could not be attributed to the fault of the
union who won the earlier certification election.While it is true that, in the case at bench, one year
had lapsed since the time of declaration of a final certification result, and that there is no collective
bargaining deadlock, public respondent did not commit grave abuse of discretion when it ruled in
respondent unions favor since the delay in the forging of the CBA could not be attributed to the fault
of the latter, A scrutiny of the records will further reveal that after respondent union was certified as
the bargaining agent of CMC, it invited the employer hospital to the bargaining table by submitting
its economic proposal for a CBA However, CMC refused to negotiate with respondent union and
instead challenged the latters legal personality through a petition for cancellation of the certificate of
registration which eventually reached this Court. The decision affirming the legal status of
respondent union should have left CMC with no other recourse but to bargain collectively, but still it
did not. Respondent union was left with no other recourse but to file a notice of strike against CMC for
LABOR RELATIONS

Page 20 of 41

unfair labor practice with the National Conciliation and Mediation Board. This eventually led to a
strike on April 15, 1993.
Same; Same; Same; Words and Phrases; Deadlock, Defined.In the case of Divine Word University
of Tacloban v. Secretary of Labor and Employment, we had the occasion to define what a deadlock is,
viz: A deadlock is x x x the counterclaim of things producing entire stoppage; x x x. There is a
deadlock when there is a complete blocking or stoppage resulting from the action of equal and opposed
forces x x x. The word is synonymous with the word impasse, which x x x presupposes reasonable
effort at good faith bargaining which, despite noble intentions, does not conclude in agreement
between the parties.'"
Same; Same; Same; Same.If the law proscribes the conduct of a certification election when there is a
bargaining deadlock submitted to conciliation or arbitration, with more reason should it not be
conducted if, despite attempts to bring an employer to the negotiation table by the certified bargaining
agent, there was no reasonable effort in good faith on the part of the employer to bargain collectively.
Same; Same; Same; Same; Section 3, Rule V, Book V of the Implementing Rules of the Labor Code
should be interpreted liberally so as to include a circumstance, e.g. where a CBA could not be
concluded due to the failure of one party to willingly perform its duty to bargain collectively. This is
what is strikingly different between the Kaisahan case and the case at bench for in the latter case,
there was proof that the certified bargaining agent, respondent union, had taken an action to legally
coerce the employer to comply with its statutory duty to bargain collectively, i.e., charging the
employer with unfair labor practice and conducting a strike in protest against the employers refusal
to bargain. It is only just and equitable that the circumstances in this case should be considered as
similar in nature to a bargaining deadlock when no certification election could be held. This is also
to make sure that no floodgates will be opened for the circumvention of the law by unscrupulous
employers to prevent any certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule V,
Book V of the Implementing Rules should be interpreted liberally so as to include a circumstance, e.g.
where a CBA could not be concluded due to the failure of one party to willingly perform its duty to
bargain collectively.
[Capitol Medical Center Alliance of Concerned Employees-Unified Filipino Service Workers vs.
Laguesma, 267 SCRA 503(1997)]
CALTEX REFINERY EMPLOYEES ASSOCIATION (CREA) vs. HON. JOSE S. BRILLANTES
G.R. No. 123782 September 16, 1997
Labor Law; Administrative Law; Factual findings of quasi-judicial agencies, when supported by
substantial evidence, are binding on the Supreme Court and entitled to great respect, considering the
expertise of these agencies in their respective fields.The factual findings of quasi-judicial agencies
(such as the Department of Labor and Employment), when supported by substantial evidence, are
binding on this Court and entitled to great respect, considering the expertise of these agencies in their
respective fields. It is well-established that findings of these administrative agencies are generally
accorded not only respect but even finality.
LABOR RELATIONS

Page 21 of 41

Same; Same; Words and Phrases; Substantial Evidence, Explained.Substantial evidence in labor
cases is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a
conclusion.
Same; Certiorari; The sole office of the writ of certiorari is the correction of errors of jurisdiction
including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction.In
Flores vs. National Labor Relations Commission we explained the role and function of Rule 65 as an
extraordinary remedy: It should be noted, in the first place, that the instant petition is a special civil
action for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is
available only and restrictively in truly exceptional casesthose wherein the action of an inferior
court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on
grounds of jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction
including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It
does not include correction of public respondent NLRCs evaluation of the evidence and factual
findings based thereon, which are generally accorded not only great respect but even finality.
Same; Collective Bargaining; The age-old general rule governing relations between labor and capital,
or management and employee, is a fair days wage for a fair days work.The alleged similarity in
the situation of Caltex and Shell cannot be considered a valid ground for a demand of wage increase,
in the absence of a showing that the two companies are also similar in substantial aspects, as
discussed above. Private respondent is merely asking that an employee should be paid on the basis of
work done. If such employee is absent on a certain day, he should not, as a rule, be paid wages for that
day. And if the employee has worked only for a portion of a day, he is not entitled to the pay
corresponding to a full day. A contrary precept would ultimately result in the financial ruin of the
employer. The age-old general rule governing relations between labor and capital, or management
and employee, is a fair days wage for a fair days work. If no work is performed by the employee,
there can be no wage or pay unless, of course, the laborer was ready, willing and able to work but was
locked out, dismissed, suspended or otherwise illegally prevented from working.
Same; Same; While union members have the right to demand wage increases through their collective
force, it is equally cogent that they should also be able to justify an appreciable increase in wages.
True, union members have the right to demand wage increases through their collective force; but it is
equally cogent that they should also be able to justify an appreciable increase in wages. We observe
that private respondents detailed allegations on productivity are unrebutted. It is noteworthy that
petitioner ignored this argument of private respondent and based its demand for wage increase not on
the ground that they were as productive as the Shell employees. Thus, we cannot attribute grave abuse
of discretion to public respondent.
Same; Same; Assumption of Jurisdiction; The labor secretary should take cognizance of an issue
which is not merely incidental to but essentially involved in the labor dispute itself, or which is
otherwise submitted to him for resolution, and if he does not perform his duty, he commits a grave
abuse of discretion.The disagreement between petitioner and private respondent on the union
security clause should have been definitively resolved by public respondent. The labor secretary should
take cognizance of an issue which is not merely incidental to but essentially involved in the labor
dispute itself, or which is otherwise submitted to him for resolution. In this case, the parties have
submitted the issue of the union security clause for public respondents disposition. But the secretary
LABOR RELATIONS

Page 22 of 41

of labor has given no valid reason for avoiding the said issue; he merely points out that this issue is a
procedural matter. Such vacillation clearly sidesteps the nature of the union security clause as one
intended to strengthen the contracting union and to protect it from the fickleness or perfidy of its own
members. Without such safeguard, group solidarity becomes uncertain; the union becomes gradually
weakened and increasingly vulnerable to company machinations. In this security clause lies the
strength of the union during the enforcement of the collective bargaining agreement. It is this clause
that provides labor with substantial power in collective bargaining. The secretary of labor assumed
jurisdiction over this labor dispute in an industry indispensable to national interest, precisely to settle
once and for all the disputes over which he has jurisdiction at his level. In not performing his duty,
the secretary of labor committed a grave abuse of discretion.
Same; Same; Unions; Although the union has every right to represent its members in the negotiation
regarding the terms and conditions of their employment, it cannot negate their wishes on matters
which are purely personal and individual to them.We hold that public respondent did not commit
grave abuse of discretion in respecting the free and voluntary decision of the employees in regard to
the Provident Plan and the irrevocable one-time option provided for in the New Retirement Plan.
Although the union has every right to represent its members in the negotiation regarding the terms
and conditions of their employment, it cannot negate their wishes on matters which are purely
personal and individual to them. In this case, the forty employees freely opted to be covered by the Old
Plan; their decision should be respected. The company gave them every opportunity to choose, and they
voluntarily exercised their choice. The union cannot pretend to know better; it cannot impose its will
on them.
Same; Same; Grievance Machinery; No particular setup for a grievance machinery is mandated by
law.No particular setup for a grievance machinery is mandated by law. Rather, Article 260 of the
Labor Code, as incorporated by RA 6715, provides for only a single grievance machinery in the
company to settle problems arising from interpretation or implementation of their collective
bargaining agreement and those arising from the interpretation or enforcement of company personnel
policies.
Same; Same; Signing Bonus; A signing bonus may not be demanded as a matter of rightif it is not
agreed upon by the parties or unilaterally offered as an additional incentive by the employer, the
condition for awarding it must be duly satisfied.Although proposed by petitioner, the signing bonus
was not accepted by private respondent. Besides, a signing bonus is not a benefit which may be
demanded under the law. Rather, it is now claimed by petitioner under the principle of maintenance
of existing benefits of the old CBA. However, as clearly explained by private respondent, a signing
bonus may not be demanded as a matter of right. If it is not agreed upon by the parties or unilaterally
offered as an additional incentive by private respondent, the condition for awarding it must be duly
satisfied. In the present case, the condition sine qua non for its granta nonstrikewas not complied
with.
Same; Same; It should be understood that bargaining is not equivalent to an adversarial litigation
where rights and obligations are delineated and remedies appliedit is simply a process of finding a
reasonable solution to a conflict and harmonizing opposite positions into a fair and reasonable
compromise.In the present case, the foregoing requirement has been sufficiently met. Petitioners
claim of grave abuse of discretion is anchored on the simple fact that public respondent adopted
LABOR RELATIONS

Page 23 of 41

largely the proposals of private respondent. It should be understood that bargaining is not equivalent
to an adversarial litigation where rights and obligations are delineated and remedies applied. It is
simply a process of finding a reasonable solution to a conflict and harmonizing opposite positions into
a fair and reasonable compromise. When parties agree to submit unresolved issues to the secretary of
labor for his resolution, they should not expect their positions to be adopted in toto. It is understood
that they defer to his wisdom and objectivity in insuring industrial peace. And unless they can clearly
demonstrate bias, arbitrariness, capriciousness or personal hostility on the part of such public officer,
the Court will not interfere or substitute the said officers judgment with its own. In this case, it is
possible that this Court, or some its members at least, may even agree with the wisdom of petitioners
claims. But unless grave abuse of discretion is cogently shown, this Court will refrain from using its
extraordinary power of certiorari to strike down decisions and orders of quasi-judicial officers
specially tasked by law to settle administrative questions and disputes. This is particularly true in the
resolution of controversies in collective bargaining agreements where the question is rarely one of legal
right or wrongnay, of black and whitebut one of wisdom, cogency and compromise as to what is
possible, fair and reasonable under the circumstances. [Caltex Refinery Employees Association
(CREA) vs. Brillantes, 279 SCRA 218(1997)]
THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-NATU vs. THE
INSULAR LIFE ASSURANCE CO., LTD. G.R. No. L-25291 January 30, 1971
Labor law; Collective bargaining; Unfair labor practice; Notifying absent employees individually
during strike by employer.The act of an employer in notifying absent employees individually during
a strike following unproductive efforts at collective bargaining that the plant would be operated the
next day and that their jobs were open for them should they want to come in has been held to be an
unfair labor practice, as an active interference with the right of collective bargaining through dealing
with the employees individually instead of through their collective bargaining representatives.
Same; Same; Same; When employer negotiates or attempts to negotiate with his employees
individually in connection with changes in the agreement is unfair labor practice.It is an unfair
labor practice for an employer operating under a collective bargaining agreement to negotiate or
attempt to negotiate with his employees individually in connection with changes in the agreement.
And the basis of the prohibition regarding individual bargaining with the strikers is that although
the union is on strike, the employer is still under obligation to bargain with the union as the
employees bargaining representative.
Same; Same; When act of company president in writing letters to strikers urging them to return to
work is an interference with the right to collective bargaining; Individual solicitation is also
interference.Some such similar actions are illegal as constituting unwarranted acts of interference.
Thus, the act of a company president in writing letters to the strikers, urging their return to work on
terms inconsistent with their union membership, was adjudged as a constituting interference with the
exercise of his employees right to collective bargaining. It is likewise an act of interference for the
employer to send a letter to all employees notifying them to return to work at a time specified therein,
otherwise new employees would be engaged to perform their jobs. Individual solicitation of the
employees or visiting their homes, with the employer or his representative urging the employees to
cease union activity or cease striking, constitutes unfair labor practice. All the above-detailed
LABOR RELATIONS

Page 24 of 41

activities are unfair practices because they tend to undermine the concerted activity of the employees,
an activity to which they are entitled free from the employers molestation.
Constitutional law; Freedom of speech; When free speech protection under the Constitution is
inapplicable.Moreover, since exhibit A is a letter containing promises of benefits to the employees in
order to entice them to return to work, it is not protected by the free speech provisions of the
Constitution. The same is true with exhibit B since it contained threats to obtain replacements for the
striking employees in the event they did not report for work on June 2, 1952. The free speech protection
under the Constitution is inapplicable where the expression of opinion by the employer of his agent
contains a promise of benefit, or threats, or reprisal.
Labor law; Unfair labor practice; When strike-breaking or union-busting is unfair labor practice.
When the respondent offered reinstatement and attempted to bribe the strikers with comfortable
cots, free coffee and occasional movies, overtime pay for work performed in excess of eight hours,
and arrangements for their families, so they would abandon the strike and return to work, they were
guilty of strike-breaking and/or union-busting and, consequently, of unfair labor practice. It is
equivalent to an attempt to break a strike for an employer to offer reinstatement to striking employees
individually, when they are represented by a union, since the employees thus offered reinstatement are
unable to determine what the consequences of returning to work would be.
Same: Collective bargaining; Labor unions; Acts violative of right to organize, form and join labor
organizations.Violative of the rights to organize, form and join labor organizations are the following
acts: the offer of a Christmas bonus to all loyal employees of a company shortly after the making of a
request by the union to bargain; wage increases given for the purpose of mollifying employees after the
employer has refused to bargain with the union, or for the purpose of inducing striking employees to
return to work; the employers promises of benefits in return for the strikers abandonment of their
strike in support of the union; and the employers statement, made about 6 weeks after the strike
started, to a group of strikers in a restaurant to the effect that if the strikers returned to work, they
would receive new benefits in the form of hospitalization, accident insurance, profit-sharing, and a
new building to work in.
Same; Unfair labor practice; Employers interference; Test of whether an employer has interfered with
and coerced em-ployees.The test of whether an employer has interfered with and coerced employees
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 right under section 3 of the
Act, and it is not necessary that there be direct evidence that any employee was in fact intimidated or
coerced by statements of threats of the employer if there is a reasonable inference that anti-union
conduct of the employer does have an adverse effect on self-organization and collective bargaining.
Same; Same; The letters should be interpreted according to the totality of conduct doctrine.The
letters, exhibits A and B, should not be considered by themselves alone but should be read in the light
of the preceding and subsequent circumstances surrounding. The letter should be interpreted
according to the totality of conduct doctrine, whereby the culpability of an employers remarks were
to be evaluated not only on the basis of their implicit implications, but were to be appraised against
the background of and in conjunction with collateral circumstances. Under this doctrine expressions
of opinion by an employer which, though innocent in themselves, frequently were held to be culpable
LABOR RELATIONS

Page 25 of 41

because of the circumstances under which they were uttered, the history of the particular employers
labor relations or anti-union bias or because of their connection with an established collateral plan of
coercion or interference.
Same; Same; Discrimination practiced by the companies. Our point of inquiry should therefore be
directed at whether they also complied with the second condition. It is not denied that when the
strikers reported for work on June 2, 1958, 63 members of the Unions were refused readmission
because they had pending criminal charges. However, despite the fact that they were able to secure
their respective clearances 34 officials and union members were still refused readmission on the
alleged ground that they committed acts inimical to the Companies. It is beyond dispute, however,
that non-strikers who also had criminal charges pending against them in fiscals office, arising from
the same incidents whence the criminal charges against the strikers evolved, were readily readmitted
and were not required to secure clearances. This is a clear act of discrimination practiced by the
Companies in the process of rehiring and is therefore a violation of sec. 4(a) (4) of the Industrial Peace
Act.
Same; Same; Discrimination in dismissal of employees constitutes waiver of employers right to
dismiss.So is there an unfair labor practice where the employer, although authorized by the Court
of Industrial Relations to dismiss the employees who participated in an illegal strike, dismissed only
the leaders of the strikers, such dismissal being evidence of discrimination against those dismissed
and constituting a waiver of the employers right to dismiss the striking employees and condonation of
the fault committed by them.
Same; Same; Delayed reinstatement of employees constitutes discrimination.Delayed reinstatement
is a form of discrimination, as is having the machinery of reinstatement in the hands of employees
hostile to the strikers, and reinstating a union official who formerly worked in a unionized plant, to a
job in another mill, which was imperfectly organized.
Same; Same; When failure to report for work after notice to return does not constitute abandonment
nor bar reinstatementAt any rate, it has been held that mere failure to report for work after notice to
return, does not constitute abandonment nor bar reinstatement. In one case, the U.S. Supreme Court
held that the taking back of six of eleven men constituted discrimination although the five strikers
who were not reinstated, all of whom were prominent in the union and in the strike, reported for work
at various times during the next three days, but were told that there were no opening.
Constitutional law; Freedom of speech; When a statement made is but an expression of free speech
protected by the Constitution.Being a union man and one of the strikers, Tongos was expected to
reveal the whole truth on whether or not the respondent Companies were justified in refusing to accede
to union demands. After all, not being one of the supervisors, he was not a part of management. And
his statement if indeed made, is but an expression of free speech protected by the Constitution.
Labor law; Right to strike; When heated altercations and occasional blows exchanged on the picket
line do not affect or diminish the right to strike.We think it must be conceded that some disorder is
unfortunately quite usual in any extensive or long drawn out strike. A strike is essentially a battle
waged with economic weapons. Engaged in it are human beings whose feelings are stirred to the
depths. Rising passions call forth hot words. Hot words lead to blows on the picket line. The
LABOR RELATIONS

Page 26 of 41

transformation from economic to physical combat by those engaged in the contest is difficult to
prevent even when cool heads direct the fight. Violence of this nature, however much it is to be
regretted, must have been in the contemplation of the Congress when it provided in Section 13 of Act
29 USCA Sec. 163, that nothing therein should be construed so as to interfere with or impede or
diminish in any way the right to strike. If this were not so, the rights afforded to employees by the Act
would indeed be illusory. We accordingly recently held that it was not intended by the Act that minor
disorders of this nature would deprive a striker of the possibility of reinstatement.
Same; Unfair labor practice; Spying of the union activities is unfair labor practice.Under the
circumstances, there is good ground to believe that Encarnacion was made to spy on the activities of
the union members. This act of the respondents is considered unjustifiable interference in the union
activities of the petitioners and is unfair labor practice.
Same; Back wages; Strikers are entitled for back pay when strikes arise from unfair labor practice.
The lower court should have ordered the reinstatement of the officials and members of the Unions,
with full back wages from June 2, 1958 to the date of their actual reinstatement to their usual
employment. Because all too clear from the factual and environmental milieu of this case, coupled
with settled decisional law, is that the Unions went on strike because of the unfair labor practices
committed by the respondents, and that when the strikers reported back for workupon the invitation
of the respondentsthey were discriminatory dismissed. The members and officials of the Unions
therefore are entitled to reinstatement with back pay.
Same: Reinstatement; The fact that positions of union members were already filled by replacements is
not a defense to reinstatement.Where the employers unfair labor practice caused or contributed to
the strike or where the lock-out by the employer constitutes an unfair labor practice, the employer
cannot successfully urge as a defense that the striking or locked-out employees position has been filled
by replacement. Under such circumstances, if no job sufficiently and satisfactorily comparable to that
previously held by the aggrieved employee can be found, the employer must discharge the replacement
employee, if necessary, to restore the striking or locked-out worker to his old comparable position, x x x
If the employers improper conduct was an initial cause of the strike, all the strikers are entitled to
reinstatement and the dismissal of replacement employees wherever necessary.
Same; Back pay; Computation; What date should the backpay payable to the unionists be computed.
It is now a settled doctrine that strikers who are entitled to reinstatement are not entitled to back pay
during the period of the strike, even though it is caused by an unfair labor practice. However, if they
offer to return to work under the same conditions just before the strike, the refusal to re-employ or the
imposition of conditions amounting to unfair labor practice is a violation of section 4 (a) (4) of the
Industrial Peace Act and the employer is liable for backpay from the date of the offer. We have
likewise ruled that discriminatorily dismissed employees must receive backpay from the date of the act
of discrimination, that is, from the date of their discharge.
Same; Separation pay; Republic, Act 1052 construed. While Republic Act No. 1052 authorizes a
commercial establishment to terminate the employment of its employee by serving notice on him one
month in advance, or, in the absence thereof, by paying him one month compensation from the date of
the termination of his employment, such Act does not give to the employer a blanket authority to
terminate the employment regardless of the cause or purpose behind such termination. Certainly, it
LABOR RELATIONS

Page 27 of 41

cannot be made use of as a cloak to circumvent a final order of the court or a scheme to trample upon
the right of an employee who has been the victim of an unfair labor practice.
Same; Supreme Court decisions and rulings; Duty of courts, judges and lawyers to reproduce or copy
the same word-for-word and punctuation mark-for-punctuation mark.We must articulate our firm
view that in citing this Courts decisions and rulings, it is the bounden duty of courts, judges and
lawyers to reproduce or copy the same word-for-word and punctuation mark-for-punctuation mark.
Indeed, there is a salient and salutary reason why they should do this. Only from this Tribunals
decisions and rulings do all other courts, as well as lawyers and litigants, take their bearings. This is
because the decisions referred to in article 8 of the Civil Code which reads, Judicial decisions
applying or interpreting the laws or the Constitution shall form a part of the legal system of the
Philippines, are only those enunciated by this Court of last resort. We said in no uncertain terms in
Miranda, et al. vs. Imperial, et al. (77 Phil. 1066) that [O]nly the decisions of this Honorable Court
establish jurisprudence or doctrines in this jurisdiction. Thus, ever present is the danger that if not
faithfully and exactly quoted, the decisions and rulings of this Court may lose their proper and correct
meaning, to the detriment of other courts, lawyers and the public who may thereby be misled. But if
inferior courts and members of the bar meticulously discharge their duty to check and recheck their
citations of authorities culled not only from this Courts decisions but from other sources and make
certain that they are verbatim reproductions down to the last word and punctuation mark, appellate
courts will be precluded from acting on misinformation, as well as be saved precious time in finding
out whether the citations are correct. [The Insular Life Assurance Co., Ltd., Employees Association-
NATU vs. The Insular Life Assurance Co., Ltd., 37 SCRA 244(1971)]
STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE) vs. The Honorable MA.
NIEVES R. CONFESOR G.R. No. 114974 June 16, 2004
Labor Law; Labor Code; Labor Union; Interference, restraints or coercion of employees by the
employer in the exercise of their right to self-organization or the right to form association considered
unfair labor practice; In order to show that the employer committed ULP under the Labor Code,
substantial evidence is required to support such claim.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. 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.
Same; Same; Same; Collective Bargaining Agreement; Words and Phrases; Surface Bargaining
Defined.Surface bargaining is defined as going through the motions of negotiating without any
legal intent to reach an agreement. The resolution of surface bargaining allegations never presents an
LABOR RELATIONS

Page 28 of 41

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. It involves the question of whether an employers conduct
demonstrates an unwillingness to bargain in good faith or is merely hard bargaining.
Same; Same; Same; Same; The duty to bargain does not compel either party to agree to a proposal or
require the making of a concession.The Union has not been able to show that the Bank had done
acts, both at and away from the bargaining table, which tend to show that it did not want to reach an
agreement with the Union or to settle the differences between it and the Union. Admittedly, the parties
were not able to agree and reached a deadlock. However, it is herein emphasized that the duty to
bargain does not compel either party to agree to a proposal or require the making of a concession.
Hence, the parties failure to agree did not amount to ULP under Article 248(g) for violation of the
duty to bargain. [Standard Chartered Bank Employees Union (NUBE) vs. Confesor, 432 SCRA
308(2004)]
CATHAY PACIFIC STEEL CORPORATION vs. HON. COURT OF APPEALS G.R. No. 164561
August 30, 2006
Certiorari; The special civil action for Certiorari is intended for the correction of errors of jurisdiction
only or grave abuse of discretion amounting to lack or excess of jurisdiction.The special civil action
for Certiorari is intended for the correction of errors of jurisdiction only or grave abuse of discretion
amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within
the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion
amounting to lack or excess of jurisdiction.
Same; Requisites; The essential requisites for a Petition for Certiorari under Rule 65 are as follows.
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 function; (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.
Same; Words and Phrases; Excess of Jurisdiction.Excess of jurisdiction as distinguished from
absence of jurisdiction means that an act, though within the general power of a tribunal, board or
officer is not authorized, and invalid with respect to the particular proceeding, because the conditions
which alone authorize the exercise of the general power in respect of it are wanting. Without
jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or
causes, considered either in general or with reference to a particular matter. It means lack of power to
exercise authority. Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an
arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or
gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined
or to act at all in contemplation of law.
LABOR RELATIONS

Page 29 of 41

Same; The general rule is that a writ of certiorari will not issue where the remedy of appeal is
available to the aggrieved party.The general rule is that a writ of certiorari will not issue where the
remedy of appeal is available to the aggrieved party. The remedies of appeal in the ordinary course of
law and that of certiorari under Rule 65 of the Revised Rules of Court are mutually exclusive and not
alternative or cumulative. Time and again this Court reminded members of the bench and bar that
the special civil action of Certiorari cannot be used as a substitute for a lost appeal where the latter
remedy is available. Such a remedy will not be a cure for failure to timely file a Petition for Review on
Certiorari under Rule 45. Nor can it be availed of as a substitute for the lost remedy of an ordinary
appeal, especially if such loss or lapse was occasioned by ones own negligence or error in the choice of
remedies.
Same; Where the issue or question involves or affects the wisdom or legal soundness of the decision,
and not the jurisdiction of the court to render said decision, the same is beyond the province of a
petition for certiorari.Where the issue or question involves or affects the wisdom or legal soundness
of the decision, and not the jurisdiction of the court to render said decision, the same is beyond the
province of a petition for certiorari. It is obvious in this case that the arguments raised by the
petitioners delved into the wisdom or legal soundness of the Decision of the Court of Appeals,
therefore, the proper remedy is a Petition for Review on Certiorari under Rule 45. Consequently, it is
incumbent upon this Court to dismiss this Petition.
Appeals; An issue which was not raised in the trial court cannot be raised for the first time on
appeal.It is settled that an issue which was not raised in the trial court cannot be raised for the first
time on appeal. This principle applies to a special civil action for certiorari under Rule 65. In
addition, petitioners failed to adduced evidence which will prove that, indeed, private respondent was
also a confidential employee. [Cathay Pacific Steel Corporation vs. Court of Appeals, 500 SCRA
226(2006)]
CAINTA CATHOLIC SCHOOL vs. CAINTA CATHOLIC SCHOOL EMPLOYEES UNION
(CCSEU) G.R. No. 151021 May 4, 2006
Appeals; Only questions of law are entertained by the Supreme Court through a petition for review on
certiorari, except when the factual findings of the NLRC and the Court of Appeals are contradictory.
Only questions of law are entertained by this Court through a petition for review on certiorari. There
are, however, well-recognized exceptions such as in this case when the factual findings of the NLRC
and the Court of Appeals are contradictory. A re-evaluation of the records of this case is necessary for
its proper resolution.
Labor Law; Retirement; Retirement is a different specie of termination of employment from dismissal
for just or authorized causes under Articles 282 and 283 of the Labor Code; While in all three cases,
the employee to be terminated may be unwilling to part from service, there are eminently higher
standards to be met by the employer validly exercising the prerogative to dismiss for just or authorized
causes.Pursuant to the existing CBA, the School has the option to retire an employee upon reaching
the age limit of sixty (60) or after having rendered at least twenty (20) years of service to the School,
the last three (3) years of which must be continuous. Retirement is a different specie of termination of
employment from dismissal for just or authorized causes under Articles 282 and 283 of the Labor
Code. While in all three cases, the employee to be terminated may be unwilling to part from service,
LABOR RELATIONS

Page 30 of 41

there are eminently higher standards to be met by the employer validly exercising the prerogative to
dismiss for just or authorized causes. In those two instances, it is indispensable that the employer
establish the existence of just or authorized causes for dismissal as spelled out in the Labor Code.
Retirement, on the other hand, is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter after reaching a certain age agrees and/or
consents to sever his employment with the former.
Same; Same; Collective Bargaining Agreements; By their acceptance of the Collective Bargaining
Agreement (CBA), the Union and its members are obliged to abide by the commitments and
limitations they had agreed to cede to management; A Collective Bargaining Agreement (CBA), as a
labor contract, is not merely contractual in nature but impressed with public interestif the
retirement provisions in the Collective Bargaining Agreement (CBA) run contrary to law, public
morals, or public policy, such provisions may very well be voided.By their acceptance of the CBA,
the Union and its members are obliged to abide by the commitments and limitations they had agreed
to cede to management. The questioned retirement provisions cannot be deemed as an imposition
foisted on the Union, which very well had the right to have refused to agree to allowing management
to retire employees with at least 20 years of service. It should not be taken to mean that retirement
provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and
nullification. A CBA, as a labor contract, is not merely contractual in nature but impressed with
public interest. If the retirement provisions in the CBA run contrary to law, public morals, or public
policy, such provisions may very well be voided. Certainly, a CBA provision or employment contract
that would allow management to subvert security of tenure and allow it to unilaterally retire
employees after one month of service cannot be upheld. Neither will the Court sustain a retirement
clause that entitles the retiring employee to benefits less than what is guaranteed under Article 287 of
the Labor Code, pursuant to the provisions express proviso thereto in the provision.
Same; Same; Same; Under Article 287 of the Labor Code, a Collective Bargaining Agreement (CBA)
may validly accord management the prerogative to optionally retire an employee under the terms and
conditions mutually agreed upon by management and the bargaining union, even if such agreement
allows for retirement at an age lower than the optional retirement age or the compulsory retirement
age; Under ordinary contemplation, a Collective Bargaining Agreement (CBA) provision entitling an
employee to retire after 20 years of service and accordingly collect retirement benefits is reward for
services rendered since it enables an employee to reap the fruits of his laborparticularly retirement
benefits, whether lump-sum or otherwiseat an earlier age, when said employee, in presumably better
physical and mental condition, can enjoy them better and longer.Yet the CBA in the case at bar
contains no such infirmities which must be stricken down. There is no essential difference between the
CBA provision in this case and those we affirmed in Pantranco and Progressive. Twenty years is a
more than ideal length of service an employee can render to one employer. Under ordinary
contemplation, a CBA provision entitling an employee to retire after 20 years of service and
accordingly collect retirement benefits is reward for services rendered since it enables an employee to
reap the fruits of his laborparticularly retirement benefits, whether lump-sum or otherwiseat an
earlier age, when said employee, in presumably better physical and mental condition, can enjoy them
better and longer. We affirm the continued validity of Pantranco and its kindred cases, and thus
reiterate that under Article 287 of the Labor Code, a CBA may validly accord management the
prerogative to optionally retire an employee under the terms and conditions mutually agreed upon by
management and the bargaining union, even if such agreement allows for retirement at an age lower
LABOR RELATIONS

Page 31 of 41

than the optional retirement age or the compulsory retirement age. The Court of Appeals gravely erred
in refusing to consider this case from the perspective of Pantranco, or from the settled doctrine
enunciated therein.
Same; Same; Same; Management Prerogatives; There is perhaps a greater imperative to recognize the
management prerogative on retirement than the prerogative to dismiss employees for just or
authorized causes; There is a greater subjectivity, not to mention factual dispute, attached to the
concepts of just or authorized cause than retirement which normally contemplates merely the
attainment of a certain age or a certain number of years in the service.The law and this Court
frowns upon unfair labor practices by management, including so-called union-busting. Such illegal
practices will not be sustained by the Court, even if guised under ostensibly legal premises. But with
respect to an active unionized employee who claims having lost his/her job for union activities, there
are different considerations presented if the termination is justified under just or authorized cause
under the Labor Code; and if separation from service is effected through the exercise of a duly
accorded management prerogative to retire an employee. There is perhaps a greater imperative to
recognize the management prerogative on retirement than the prerogative to dismiss employees for
just or authorized causes. For one, there is a greater subjectivity, not to mention factual dispute,
attached to the concepts of just or authorized cause than retirement which normally contemplates
merely the attainment of a certain age or a certain number of years in the service. It would be easier
for management desirous to eliminate pesky union members to abuse the prerogative of termination
for such purpose since the determination of just or authorized cause is rarely a simplistic question, but
involves facts highly prone to dispute and subjective interpretation.
Same; Same; Same; Same; The exercise by management of its retirement prerogative is less
susceptible to dubitability as to the question whether an employee could be validly retiredthe only
factual matter to consider then is whether the employee concerned had attained the requisite age or
number of years in service.The exercise by management of its retirement prerogative is less
susceptible to dubitability as to the question whether an employee could be validly retired. The only
factual matter to consider then is whether the employee concerned had attained the requisite age or
number of years in service pursuant to the CBA or employment agreement, or if none, pursuant to
Article 287 of the Labor Code. In fact, the question of the amount of retirement benefits is more likely
to be questioned than the retirement itself. Evidently, it more clearly emerges in the case of retirement
that management would anyway have the right to retire an employee, no matter the degree of
involvement of said employee in union activities.
Same; Same; Same; Same; Our laws protection of the right to organize labor does not translate into
perpetual job security for union leaders by reason of their leadership role alone; The exercise by the
employer of a valid and duly established prerogative to retire an employee does not constitute unfair
labor practice.There is another point that militates against the Union. A ruling in its favor is
tantamount to a concession that a validly drawn management prerogative to retire its employees can
be judicially interfered on a showing that the employee in question is highly valuable to the union.
Such a rule would be a source of mischief, even if narrowly carved out by the Court, for it would imply
that an active union member or officer may be, by reason of his/her importance to the union, somehow
exempted from the normal standards of retirement applicable to the other, perhaps less vital members
of the union. Indeed, our laws protection of the right to organize labor does not translate into
perpetual job security for union leaders by reason of their leadership role alone. Should we entertain
LABOR RELATIONS

Page 32 of 41

such a notion, the detriment is ultimately to the union itself, promoting as it would a stagnating
entrenched leadership. We can thus can comfortably uphold the principle, as reiterated in Philippine
Airlines, that the exercise by the employer of a valid and duly established prerogative to retire an
employee does not constitute unfair labor practice.
Same; Words and Phrases; Managerial Employees; A managerial employee is one who is vested with
powers or prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such
managerial actions; A Dean of Student Affairs exercises managerial functions.Article 212(m) of the
Labor Code defines a managerial employee as one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees, or to effectively recommend such managerial actions. The functions of
the Dean of Student Affairs, as occupied by Llagas, are enumerated in the Faculty Manual. The
salient portions are hereby enumerated: a. Manages the High School Department with the Registrar
and Guidance Counselors (acting as a COLLEGIAL BODY) in the absence of the Director or
Principal. b. Enforces the school rules and regulations governing students to maintain discipline. x x x
x g. Plans with the Guidance Counselors student leadership training programs to encourage dynamic
and responsible leadership among the students and submits the same for the approval of the
Principal/Director. x x x x i. Studies proposals on extracurricular or co-curricular activities and
projects proposed by teachers and students and recommends to the Principal/Director the necessary
approval. j. Implements and supervises activities and projects approved by the Principal/Director so
that the activities and projects follow faithfully the conditions set forth by the Principal/Director in
the approval. k. Assists in the planning, supervising and evaluating of programs of co-curricular
activities in line with the philosophy and objectives of the School for the total development of the
students. l. Recommends to the Principal policies and rules to serve as guides to effective
implementation of the student activity program. x x x x It is fairly obvious from a perusal of the list
that the Dean of Student Affairs exercises managerial functions, thereby classifying Llagas as a
managerial employee.
Same; Same; Supervisory Employees; Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of independent judgment.Supervisory
employees, as defined in Article 212(m) are those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. In the same vein, a reading of the
above functions leads us to conclude that Javier was a supervisory employee. Verily, Javier made
recommendations as to what actions to take in hiring, termination, disciplinary actions, and
management policies, among others. [Cainta Catholic School vs. Cainta Catholic School Employees
Union (CCSEU), 489 SCRA 468(2006)]
PUREFOODS CORPORATION vs. NAGKAKAISANG SAMAHANG MANGGAGAWA NG
PUREFOODS RANK-AND-FILE, ST. THOMAS FREE WORKERS UNION G.R. No. 150896
August 28, 2008
Remedial Law; Civil Procedure; Actions; Certificate of Non-Forum Shopping; When the petitioner is a
corporation, inasmuch as corporate powers are exercised by the board, the certification shall be
LABOR RELATIONS

Page 33 of 41

executed by a natural person authorized by the corporations board of directors; Failure to attach to
the certification any proof of the signatorys authority is a sufficient ground for the dismissal of the
petition.Section 1, Rule 65 of the Rules of Court explicitly mandates that the petition for certiorari
shall be accompanied by a sworn certification of non-forum shopping. When the petitioner is a
corporation, inasmuch as corporate powers are exercised by the board, the certification shall be
executed by a natural person authorized by the corporations board of directors. Absent any authority
from the board, no person, not even the corporate officers, can bind the corporation. Only individuals
who are vested with authority by a valid board resolution may sign the certificate of non-forum
shopping in behalf of the corporation, and proof of such authority must be attached to the petition.
Failure to attach to the certification any proof of the signatorys authority is a sufficient ground for the
dismissal of the petition.
Same; Same; Same; Same; Rules of procedure are mandatory, except only when, for the most
persuasive of reasons, they may be relaxed to relieve a litigant of an injustice not commensurate to the
degree of his thoughtlessness in not complying therewith.We must reiterate that the rules of
procedure are mandatory, except only when, for the most persuasive of reasons, they may be relaxed to
relieve a litigant of an injustice not commensurate to the degree of his thoughtlessness in not
complying therewith. While technical rules of procedure are not designed to frustrate the ends of
justice, they are provided to effect the proper and orderly disposition of cases and effectively prevent
the clogging of court dockets. [Purefoods Corporation vs. Nagkakaisang Samahang Manggagawa ng
Purefoods Rank-and-File, 563 SCRA 471(2008)]
SHELL OIL WORKERS' UNION vs. SHELL COMPANY OF THE PHILIPPINES, LTD.; G.R.
No. L-28607 May 31, 1971
Indrustrial Peace Act; Scope of management prerogative; Effect of collective bargaining agreement.
It is to be admitted that the stand of ShelI Company as to the scope of management prerogative is not
devoid of plausibility if it were not bound by what was stipulated. The growth of industrial democracy
fostered by the institution of collective bargaining with the workers entitled to be represented by a
union of their choice, has no doubt contracted the sphere of what appertains solely to the employer.
What was stipulated in an existing collective bargaining contract certainly precluded Shell Company
from carrying out what otherwise would have been within its prerogative if to do so would be violative
thereof.
Same; Collective bargaining agreement must be respected.The crucial question is whether the then
existing collective bargaining contract running for three years from August 1, 1966 to December 31,
1069 constituted a bar to such a decision reached by management? The answer must be in the
affirmative. As correct stressed in the brief for the petitioner, there was specific coverage concerning
the security guard section in the collective bargaining contract, It is found not only in the body thereof
but in the two appendices concerning the age schedules as well as the premium pay and the night
compensation to which the personnel in such section were entitled. It was thus an assurance of
security of tenure, at least, during the lifetime of the agreement. For what is involved is the integrity of
the agreement reached, terms of which should be binding on both parties. One of them may be
released, but only with the consent of the other. The right to object belongs to the latter; and if
exercised, must be respected. Such a state of affairs should continue during the existence of the
LABOR RELATIONS

Page 34 of 41

contract. Only thus may there be compliance with and fulfillment of the covenants in a valid
subsisting agreement.
Same; Failure to comply constitutes an unfair labor practice.The Shell Company, in failing to
manifest fealty to what was stipulated in an existing collective bargaining contract, was thus guilty of
an unfair labor practice. Such a doctrine first found expression in Republic Savings Bank vs. Court of
Industrial Relations, L-20303, Sept. 27, 1967, 21 SCRA 226.
Same; Right of labor to strike.The unfair labor practice strike called by the Union did have the
impress of validity. Rightly, labor is justified in making use of such a weapon in its arsenal to
counteract what is clearly outlawed by the Industrial Peace Act. That would be one way to assure that
the objectives of unionization and collective bargaining would not be thwarted. It would, of course, file
an unfair labor practice case before the Court of Industrial Relations. It is not precluded, however,
from relying on its own resources to frustrate such an effort on the part of an employer.
Same; When to strike.Necessarily so, the choice as to when such an objective may be attained by
striking likewise belongs to it. There is the rejection of the concept that an outside authority, even if
governmental, should make the decisions for it as to ends which are desirable and how they may be
achieved. The assumption is that labor can be trusted to determine for itself when the right to strike
may be availed of in order to attain a successful fruition in their disputes with management. It is true
that there is a requirement in the Act that before the employees may do so, they must file with the
Conciliation Service of the Department of Labor a notice of their intention to strike. Such a requisite
however, as has been repeatedly declared by this Court, does not have to be complied with in case of
unf air labor practice strike, which certainly is entitled to greater judicial protection if the Industrial
Peace Act is to be rendered meaningful.
Same; How strike to be conducted.What is clearly within the law is the concerted activity of
cessation of work in order that a union's economic demands may be granted or that an employer cease
and desist from an unfair labor practice. That the law recognizes as a right. There is though a
disapproval of the utilization of force to attain such as objective. For implicit in the very concept of a
legal order is the maintenance of peacef ul ways. A strike otherwise valid, if violent in character, may
be placed beyond the pale. Care is to be taken, however, especially where an unf air labor practice is
involved, to avoid stamping it with illegality just because it is tainted by such acts. To avoid
rendering illusory the recognition of the right to strike, responsibility in such a case should be
individual and not collective. A different conclusion would be called for, of course, if the existence of
force while the strike lasts is pervasive and widespread, consistently and deliberately resorted to as a
matter of policy. It could be reasonably concluded then that even if justified as to ends, it becomes
illegal because of the means employed.
Same; State protection to labor.The plain and unqualified constitutional command of protection to
labor should not be lost sight of. The State is thus under obligation to lend its aid and its succor to the
efforts of its labor elements to improve their economic condition. It is now generally accepted that
unionization is a means to such an end. It should be encouraged. Thereby, labor's strength, what
there is of it, becomes solidified. It can bargain as a collectivity. Management then will not always
have the upper hand nor be in a position to ignore its just demands. That, at any rate, is the policy
behind the Industrial Peace Act. The judiciary and administrative agencies in construing it must ever
LABOR RELATIONS

Page 35 of 41

be conscious of Its implications. Only thus may there be f idelity to what is ordained by the f
undamental law. For if it were otherwise, Instead of protection, there would be neglect or disregard.
That is to negate the fundamental principle that the Constitution is the supreme law. [Shell Oil
Workers' Union vs. Shell Company of the Philippines, Ltd., 39 SCRA 276(1971)]
PHILIPPINE AMERICAN CIGAR & CIGARETTE FACTORY WORKERS INDEPENDENT
UNION (NLU) vs. PHILIPPINE AMERICAN CIGAR & CIGARETTE MANUFACTURING
CO., INC. G.R. No. L-18364 February 28, 1963
Labor; Unfair labor practice; Dismissal of employee due to his brothers non-withdrawal of charges
against the employer.If the dismissal of an employee due to the filing of unfair labor practice
charges against the employer is an undue restraint of the freedom to prefer charges for violations of
the labor laws, the dismissal of his brother owing to the non-withdrawal of the charges of the former
would be a greater and more effec-tive restraint upon said freedom, and, hence, constitutes an un-fair
labor practice under Section 4(a)(5), in relation to Section 4(a)(4) of Republic Act No. 875. [Phil.
Amer. Cigar & Cigarette Factory Workers Independent Union vs. Phil. Amer. Cigar & Cigarette Mfg.
Co., Inc., 7 SCRA 375(1963)]
RIZAL CEMENT WORKERS UNION (FFW) vs. MADRIGAL & COMPANY, INC. G.R. No. L-
19767 April 30, 1964
Labor relations; When discrimination constitutes unfair labor practice.Under Republic Act 875, for
discrimination by reason of- union membership to be considered unfair labor practice, the same must
have been committed to encourage or discourage such; membership in the union.
Same; Same; Lockout to prevent sabotage not unfair labor practice.Where the company's refusal to
allow complainant Iaborers to work in the the warehouse and the requirement that they stay out of of
the premises in the meantime while the strike was still going the factory, was because of the
company's apprehension that sabotage might be committed in the warehouse where the products,
machinery and spare parts were stored, and was not intended to induce the complainants to renounce
their union-membership, or as a deterrent for non-members to affiliate therewith, ,nor as a retaliatory
measure for activities in the union or in furtherance of the cause of the union, the company's acts did
not constitute unfair labor practice.
Same; Backwages only from finality of decision where no unfair labor practice committed by
company.Where the lockout was a mere defensive weapon and did not constitute unfair labor
practice, and the factory strikers in the main case were ordered reinstated without back wages, the
complainants in the present incident who appeared to have also joined said strike, are to have no back
wages except from the finality of the decision in the main case. [Rizal Cement Workers Union (FFW)
vs. Madrigal & Company, 10 SCRA 831(1964)]
PICOP RESOURCES, INCORPORATED (PRI) vs. ANACLETO L. TAECA G.R. No. 160828
August 9, 2010
Remedial Law; Appeals; Court of Appeals; Judicial Power; The Court of Appealspursuant to the
exercise of its original jurisdiction over Petitions for Certiorariis specifically given the power to pass
LABOR RELATIONS

Page 36 of 41

upon the evidence, if and when necessary, to resolve factual issues.The power of the Court of
Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as early as in
our decision in St. Martin Funeral Home v. National Labor Relations Commission, 295 SCRA 494
(1998). This Court held that the proper vehicle for such review was a Special Civil Action for
Certiorari under Rule 65 of the Rules of Court, and that this action should be filed in the Court of
Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover, it is already settled
that under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act
Expanding the Jurisdiction of the Court of Appeals, amending for the purpose of Section Nine of
Batas Pambansa Blg. 129 as amended, known as the Judiciary Reorganization Act of 1980), the
Court of Appealspursuant to the exercise of its original jurisdiction over Petitions for Certiorariis
specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues.
Labor Law; Labor Unions; Words and Phrases; Union Security is a generic term, which is applied to
and comprehends closed shop, union shop, maintenance of membership, or any other form of
agreement which imposes upon employees the obligation to acquire or retain union membership as a
condition affecting employment.Union security is a generic term, which is applied to and
comprehends closed shop, union shop, maintenance of membership, or any other form of
agreement which imposes upon employees the obligation to acquire or retain union membership as a
condition affecting employment. There is union shop when all new regular employees are required to
join the union within a certain period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the effective date of
the agreement, or who thereafter become members, must maintain union membership as a condition
for continued employment until they are promoted or transferred out of the bargaining unit, or the
agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which,
by agreement between the employer and his employees or their representatives, no person may be
employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for
the duration of the agreement, remains a member in good standing of a union entirely comprised of or
of which the employees in interest are a part.
Same; Same; Union Security Clause; Termination of Employment; Requisites in terminating the
employment of an employee by enforcing the union security clause.In terminating the employment of
an employee by enforcing the union security clause, the employer needs to determine and prove that:
(1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union
security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union
to expel the employee from the union. These requisites constitute just cause for terminating an
employee based on the union security provision of the CBA.
Same; Same; Same; Collective Bargaining Agreements; Certification Election; An existing Collective
Bargaining Agreement (CBA) cannot constitute a bar to a filing of a petition for certification
election.The last sentence of Article 253 which provides for automatic renewal pertains only to the
economic provisions of the CBA, and does not include representational aspect of the CBA. An existing
CBA cannot constitute a bar to a filing of a petition for certification election. When there is a
representational issue, the status quo provision in so far as the need to await the creation of a new
agreement will not apply. Otherwise, it will create an absurd situation where the union members will
be forced to maintain membership by virtue of the union security clause existing under the CBA and,
thereafter, support another union when filing a petition for certification election. If we apply it, there
LABOR RELATIONS

Page 37 of 41

will always be an issue of disloyalty whenever the employees exercise their right to self-organization.
The holding of a certification election is a statutory policy that should not be circumvented, or
compromised.
Same; Same; Same; Termination of Employment; The employer is bound to exercise caution in
terminating the services of his employees especially so when it is made upon the request of a labor
union pursuant to the Collective Bargaining Agreement; Due process must be observed in dismissing
an employee.We will emphasize anew that the power to dismiss is a normal prerogative of the
employer. This, however, is not without limitations. The employer is bound to exercise caution in
terminating the services of his employees especially so when it is made upon the request of a labor
union pursuant to the Collective Bargaining Agreement. Dismissals must not be arbitrary and
capricious. Due process must be observed in dismissing an employee, because it affects not only his
position but also his means of livelihood. Employers should, therefore, respect and protect the rights of
their employees, which include the right to labor.
Same; Illegal Dismissals; Benefits; An employee who is illegally dismissed is entitled to the twin
reliefs of full backwages and reinstatement; If reinstatement is not viable, separation pay is awarded
to the employee.An employee who is illegally dismissed is entitled to the twin reliefs of full
backwages and reinstatement. If reinstatement is not viable, separation pay is awarded to the
employee. In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the
amount to be awarded shall be equivalent to one month salary for every year of service. [PICOP
Resources, Incorporated (PRI) vs. Taeca, 627 SCRA 56(2010)]
NATIONAL UNION OF WORKERS IN HOTELS RESTAURANTS AND ALLIED
INDUSTRIES vs. NATIONAL LABOR RELATIONS COMMISSION; G.R. No. 179402
September 30, 2008
Labor Law; Collective Bargaining Agreements; Union Security Clause; Closed Shop Clause;
Maintenance of Membership Clause; Words and Phrases; Union security is a generic term which is
applied to and comprehends closed shop, union shop, maintenance of membership or any other
form of agreement which imposes upon employees the obligation to acquire or retain union
membership as a condition affecting employment.Union security is a generic term which is
applied to and comprehends closed shop, union shop, maintenance of membership or any other
form of agreement which imposes upon employees the obligation to acquire or retain union
membership as a condition affecting employment. Article 248(e) of the Labor Code recognizes the
effectivity of a union shop clause: Art. 248. Unfair labor practices of employers. (e) To discriminate in
regard to wages, hours of work, and other terms and conditions of employment in order to encourage
or discourage membership in any labor organization. Nothing in this Code or in any other law shall
prevent the parties from requiring membership in a recognized collective bargaining agent as a
condition for employment, except of those employees who are already members of another union at the
time of the signing of the collective bargaining agreement x x x. (Emphasis supplied.)
Same; Same; Same; Same; Union Shop Clause; The law allows stipulations for union shop and
closed shop as a 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.The law allows stipulations for union
shop and closed shop as a means of encouraging workers to join and support the union of their
LABOR RELATIONS

Page 38 of 41

choice in the protection of their rights and interests vis--vis the employer. By thus promoting
unionism, workers are able 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. In Villar
v. Inciong, 121 SCRA 444 (1983), this Court held that employees have the right to disaffiliate from
their union and form a new organization of their own; however, they must suffer the consequences of
their separation from the union under the security clause of the Collective Bargaining Agreement.
Same; Same; Same; Same; Same; Unfair Labor Practice; Termination of Employment; The dismissal
of an employee by the company pursuant to a labor unions demand in accordance with a union
security agreement does not constitute unfair labor practice.This Court, in Malayang Samahan ng
Manggagawa sa M. Greenfield v. Ramos, 326 SCRA 428 (2000), clearly stated the general rule: the
dismissal of an employee by the company pursuant to a labor unions demand in accordance with a
union security agreement does not constitute unfair labor practice. An employer is not considered
guilty of unfair labor practice if it merely complied in good faith with the request of the certified union
for the dismissal of employees expelled from the union pursuant to the union security clause in the
Collective Bargaining Agreement. In the case at bar, there is even less possibility of sustaining a
finding of guilt for unfair labor practice where respondent did not dismiss the 36 employees, despite
the insistence of HIMPHLU, the sole bargaining agent for the rank and file employees of the Hotel, on
the basis of the union security clause of the Collective Bargaining Agreement. The only act attributed
to the respondent is its issuance of the Notices which, contrary to being an unfair labor practice, even
afforded the employees involved a chance to be heard.
Same; Evidence; Affidavits; The fact that six members of the union signed a single statement, instead
of each member presenting their sincere and individual narrations of events, gives the impression that
it was signed in a perfunctory manner and motivated by a sense of union solidarity.The members of
NUWHRAIN would owe their loyalty to their union, a natural bias which somewhat puts into
question their credibility as witnesses, especially since the success of this case would also redound to
their benefit. The fact that six members of the union signed a single statement, instead of each
member presenting their sincere and individual narrations of events, gives the impression that it was
signed in a perfunctory manner and motivated by a sense of union solidarity. The self-serving
statement signed by six of NUWHRAINs members have very little weight, even if made under oath,
absent any other independent evidence which indicates that the officers of the respondent and the
Hotel made such hostile and coercive utterances that tend to interfere or influence the employees
exercise of the right to self-organization. [National Union of Workers in Hotels, Restaurants and
Allied Industries-Manila Pavillion Hotel Chapter vs. National Labor Relations Commission, 567
SCRA 291(2008)]
COMPLEX ELECTRONICS EMPLOYEES ASSOCIATION (CEEA) vs. THE NATIONAL
LABOR RELATIONS COMMISSION G.R. No. 121315 July 19, 1999
Labor Law; Unfair Labor Practices; Strikes; Words and Phrases; A runaway shop is an industrial
plant moved by its owners from one location to another to escape union labor regulations or state
laws, but the term is also used to describe a plant removed to a new location in order to discriminate
against employees at the old plant because of their union activities.A runaway shop is defined as
an industrial plant moved by its owners from one location to another to escape union labor
regulations or state laws, but the term is also used to describe a plant removed to a new location in
LABOR RELATIONS

Page 39 of 41

order to discriminate against employees at the old plant because of their union activities. It is one
wherein the employer moves its business to another location or it temporarily closes its business for
anti-union purposes. A runaway shop in this sense, is a relocation motivated by anti-union animus
rather than for business reasons. In this case, however, Ionics was not set up merely for the purpose of
transferring the business of Complex. At the time the labor dispute arose at Complex, Ionics was
already existing as an independent company. As earlier mentioned, it has been in existence since July
5, 1984. It cannot, therefore, be said that the temporary closure in Complex and its subsequent
transfer of business to Ionics was for anti-union purposes. The Union failed to show that the primary
reason for the closure of the establishment was due to the union activities of the employees.
Same; Corporation Law; Piercing the Veil of Corporate Fiction; The mere fact that one or more
corporations are owned or controlled by the same or single stockholder is not a sufficient ground for
disregarding separate corporate personalities.The mere fact that one or more corporations are
owned or controlled by the same or single stockholder is not a sufficient ground for disregarding
separate corporate personalities. Thus, in Indophil Textile Mill Workers Union vs. Calica, we ruled
that: [I]n 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 auxiliary 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.
Same; Same; Same; To disregard the separate juridical personality of a corporation, the wrongdoing
must be clearly and convincingly established.Ionics may be engaged in the same business as that of
Complex, but this fact alone is not enough reason to pierce the veil of corporate fiction of the
corporation. Well-settled is the rule that a corporation has a personality separate and distinct from
that of its officers and stockholders. This fiction of corporate entity can only be disregarded in certain
cases such as when it is used to defeat public convenience, justify wrong, protect fraud, or defend
crime. To disregard said separate juridical personality of a corporation, the wrongdoing must be
clearly and convincingly established.
Same; Same; Same; The mere fact that both of the corporations have the same president is not in itself
sufficient to pierce the veil of corporate fiction of the two corporations.As to the additional
documentary evidence which consisted of a newspaper clipping filed by petitioner Union, we agree
with respondent Ionics that the photo/ newspaper clipping itself does not prove that Ionics and
Complex are one and the same entity. The photo/newspaper clipping merely showed that some plants
of Ionics were recertified to ISO 9002 and does not show that there is a relation between Complex and
Ionics except for the fact that Lawrence Qua was also the president of Ionics. However, as we have
stated above, the mere fact that both of the corporations have the same president is not in itself
sufficient to pierce the veil of corporate fiction of the two corporations.
Same; Unfair Labor Practices; Lockouts; Words and Phrases; Lockout is the temporary refusal of
employer to furnish work as a result of an industrial or labor dispute.We, likewise, disagree with
LABOR RELATIONS

Page 40 of 41

the Union that there was in this case an illegal lockout/illegal dismissal. Lockout is the temporary
refusal of employer to furnish work as a result of an industrial or labor dispute. It may be manifested
by the employers act of excluding employees who are union members. In the present case, there was a
complete cessation of the business operations at Complex not because of the labor dispute. It should be
recalled that, before the labor dispute, Complex had already informed the employees that they would
be closing the Lite-On Line. The employees, however, demanded for a separation pay equivalent to one
(1) month salary for every year of service which Complex refused to give. When Complex filed a notice
of closure of its Lite-On Line, the employees filed a notice of strike which greatly alarmed the
customers of Complex and this led to the pull-out of their equipment, machinery and materials from
Complex. Thus, without the much needed equipment, Complex was unable to continue its business. It
was left with no other choice except to shut down the entire business. The closure, therefore, was not
motivated by the union activities of the employees, but rather by necessity since it can no longer
engage in production without the much needed materials, equipment and machinery.
Same; Same; Same; Management Prerogatives; Closure of Establishment; Whether or not an employer
is incurring great losses, it is still one of the managements prerogative to close down its business as
long as it is done in good faith.As to the claim of petitioner Union that Complex was gaining profit,
the financial statements for the years 1990, 1991 and 1992 issued by the auditing and accounting
firm Sycip, Gorres and Velayo readily show that Complex was indeed continuously experiencing
deficit and losses. Nonetheless, whether or not Complex was incurring great losses, it is still one of the
managements prerogative to close down its business as long as it is done in good faith. Thus, in
Catatista, et al. vs. NLRC and Victorias Milling Co., Inc. we ruled: In any case, Article 283 of the
Labor Code is clear that an employer may close or cease his business operations or undertaking even if
he is not suffering from serious business losses or financial reverses, as long as he pays his employees
their termination pay in the amount corresponding to their length of service. It would indeed, be
stretching the intent and spirit of the law if we were to unjustly interfere in managements prerogative
to close or cease its business operations just because said business operations or undertaking is not
suffering from any loss.
Same; Corporation Law; In the absence of malice or bad faith, a stockholder or an officer of a
corporation cannot be made personally liable for corporate liabilities.Going now to the issue of
personal liability of Lawrence Qua, it is settled that in the absence of malice or bad faith, a
stockholder or an officer of a corporation cannot be made personally liable for corporate liabilities. In
the present case, while it may be true that the equipment, materials and machinery were pulled-out of
Complex and transferred to Ionics during the night, their action was sufficiently explained by
Lawrence Qua in his Comment to the petition filed by the Union.
Same; Closure of Establishment; One-Month Notice Requirement; The purpose of the one-month notice
requirement is to enable the proper authorities to determine after hearing whether such closure is
being done in good faith, i.e., for bona fide business reasons.The purpose of the notice requirement is
to enable the proper authorities to determine after hearing whether such closure is being done in good
faith, i.e., for bona fide business reasons, or whether, to the contrary, the closure is being resorted to as
a means of evading compliance with the just obligations of the employer to the employees affected.
Same; Same; Same; While the law acknowledges the management prerogative of closing the business,
it does not, however, allow the business establishment to disregard the requirements of the law.
LABOR RELATIONS

Page 41 of 41

While the law acknowledges the management prerogative of closing the business, it does not, however,
allow the business establishment to disregard the requirements of the law. The case of Magnolia Dairy
Products v. NLRC is quite emphatic about this: The law authorizes an employer, like the herein
petitioners, to terminate the employment of any employee due to the installation of labor saving
devices. The installation of these devices is a management prerogative, and the courts will not
interfere with its exercise in the absence of abuse of discretion, arbitrariness, or maliciousness on the
part of management, as in this case. Nonetheless, this did not excuse petitioner from complying with
the required written notice to the employee and to the Department of Labor and Employment (DOLE)
at least one month before the intended date of termination. This procedure enables an employee to
contest the reality or good faith character of the asserted ground for the termination of his services
before the DOLE. The failure of petitioner to serve the written notice to private respondent and to the
DOLE, however, does not ipso facto make private respondents termination from service illegal so as to
entitle her to reinstatement and payment of backwages. If at all, her termination from service is
merely defective because it was not tainted with bad faith or arbitrariness and was due to a valid
cause.
Same; Same; Separation Pay; In case of closures or cessation of operation of business establishments
not due to serious business losses or financial reverses, the employees are always given separation
benefits.It is settled that in case of closures or cessation of operation of business establishments not
due to serious business losses or financial reverses, the employees are always given separation
benefits. In the instant case, notwithstanding the financial losses suffered by Complex, such was,
however, not the main reason for its closure. Complex admitted in its petition that the main reason for
the cessation of the operations was the pull-out of the materials, equipment and machinery from the
premises of the corporation as dictated by its customers. It was actually still capable of continuing the
business but opted to close down to prevent further losses. Under the facts and circumstances of the
case, we find no grave abuse of discretion on the part of the public respondent in awarding the
employees one (1) month pay for every year of service as termination pay. [Complex Electronics
Employees Association vs. NLRC, 310 SCRA 403(1999)]

Doctrines ULP

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Doctrines ULP

Uploaded by

Copyright:

Available Formats

LABOR RELATIONS

DOCTRINES, CBA AND ULP CASES

You might also like