97. G.R. No.

90426 December 15, 1989

SIME DARBY PILIPINAS, INC. vs. MAGSALIN
Facts: On 13 June 1989 Sime Darby and SDEA executed a Collective Bargaining Agreement (CBA) providing, among others, that, A
performance bonus shall be granted, the amount of which [is] to be determined by the Company depending on the return of [sic]
capital investment as reflected in the annual financial statement. SDSEA-ALU demanded the implementation of a provision Identical
to the above contained in their own CBA with petitioner. Petitioner called both SDEA and SDEA-ALU to a meeting and explained that it
was unable to grant the performance bonus corresponding to the fiscal year 1988-1989 on the ground that the workers' performance
during said period did not justify the award of such bonus. SDEA filed with the NCMB an urgent request for preventive conciliation
between private respondent and petitioner.
In conciliation meeting both parties agreed to submit their dispute to voluntary arbitration. They agreed to submit the issue of
performance bonus to voluntary arbitration" and that "the decision/award of the voluntary arbitrator shall be respected and
implemented by the parties as final and executory, in accordance with the law."
Voluntary Arbitrator issued an award which declared respondent union entitled to a performance bonus equivalent to 75% of the
monthly basic pay of its members. In that award, the Voluntary Arbitrator held that a reading of the CBA provision on the performance
bonus would show that said provision was mandatory hence the only issue to be resolved was the amount of performance bonus.
Petitioner filed a motion for reconsideration which motion was not entertained by the Voluntary Arbitrator upon the ground that the
Voluntary Arbitrator had automatically lost jurisdiction over the arbitration case upon the issuance of the award.
Issue: WON VA gravely abused his discretion in holding that the grant of performance bonus was mandatory and that the only issue
before him was the amount of the bonus. WON the award by the Arbitrator of a performance bonus amounting to seventy five percent
(75%) of the basic monthly salary of members of private respondent union itself constituted a grave abuse of discretion or an act
without or in excess of jurisdiction.
Ruling: 1. Voluntary Arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the
scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. The Arbitrator, as already
indicated, viewed his authority as embracing not merely the determination of the abstract question of whether or not a performance
bonus was to be granted but also, in the affirmative case, the amount thereof. Analysis of the relevant provisions of the CBA between
the parties and examination of the record of the instant case lead us to the conclusion that the Arbitrator's reading of the scope of his
own authority must be sustained. Article X, Section 1 of the CBA is, grammatically speaking, cast in mandatory terms: "A
performance bonus shall be granted ..." The CBA provision goes on, however, immediately to say that the amount of the performance
bonus "[is] to be determined by the Company." Thus, notwithstanding the literal or grammatical tenor of Article X, Section 1, as a
practical matter, only the issue relating to the amount of the bonus to be declared appears important. Not much reflection is needed
to show that the critical issue is the scope of authority of the company to determine the amount of any bonus to be granted. If the
company's discretionary authority were to be regarded as unlimited and if the company may declare in any event a merely nominal
bonus, the use of mandatory language in Article X, Section 1, would seem largely illusory and cosmetic in effect.
2. Article X, Section 1 of the CBA does not in express terms identify whose performance is to appraised in determining an appropriate
amount to be awarded as performance bonus. The Court considers that it is the performance of the company as a whole, and not
merely the production or manufacturing performance of its employees, which is relevant in that determination. The CBA provision
refers to the return on investment of the company (ROI). The return on the stockholders' investment, as we understand it, relates
basically to the net profits shown by the company and therefore to many more factors than simply the extent to which production
targets were achieved or the rise and fall of the manufacturing efficiency ratios. Among those factors would be the cost of production,
the quality of the products, the cost of money, the debt-equity ratio, the cost of sales, the level of taxes due and payable, the gross
revenues realized, and so forth.
The Voluntary Arbitrator, upon the other hand, explicitly considered the net earnings of petitioner Sime Darby in 1988 (P
100,000,000.00) and in the first semester of 1989 (P 95,377,507.00) as well as the increase in the company's retained earnings from
P 265,729,826.00 in 1988 to P 324, 370,372.00 as of 30 June 1989. Thus, the Arbitrator impliedly or indirectly took into account the
return on stockholders' investment realized for the fiscal year 1988-1989. It should also be noted that the relevant CBA provision does
not specify a minimum rate of return on investment (ROI) which must be realized before any particular amount of bonus may or
should be declared by the company.
The Voluntary Arbitrator also took into account, again in an indirect manner, the performance of Sime Darby's employees by referring
in his award to "the total labor cost incurred by the Compan. Hence, the Voluntary Arbitrator of a bonus amounting to seventy-five
percent (75%) of the basic monthly salary cannot be said to be merely arbitrary or capricious or to constitute an excess de pouvoir.
Petition for Certiorari is DISMISSED for lack of merit.
98. G.R. No. 94960 March 8, 1993

IMPERIAL TEXTILE MILLS, INC. vs. HON. VLADIMIR P.L. SAMPANG

Facts: On March 20, 1987, Imperial Textile Mills, Inc. and Imperial Textile Mills-Monthly Employees Association (the Union) entered
into a collective bargaining agreement providing across-the-board salary increases and other benefits retroactive to November 1,
1986. On August 21, 1987, they executed another agreement on the job classification and wage standardization plan. This was also
to take effect retroactively on November 1, 1986. A dispute subsequently arose in the interpretation of the two agreements. The
parties then submitted it to arbitration and designated public respondent Vladimir P.L. Sampang as the Voluntary Arbitrator. The
understanding was that his decision would be final, executory and inappealable.
The Company maintained that the wage of a particular employee subject of possible adjustment on base pay should be the pay with
the first year CBA increase already integrated therein. The Union argued that the CBA increases should not be included in adjusting
the wages to the base pay level, as it was separate and distinct from the increases resulting from the job classification and
standardization scheme.
Voluntary Arbitrator rendered a decision upholding the formula used by the Company. Voluntary Arbitrator rendered another decision,
this time in favor of the Union.
Company appealed to the NLRC. The appeal was dismissed for lack of jurisdiction. The reason was that the original rule allowing
appeal if the Voluntary Arbitrator's award was more than P100,000.00 had already been repealed by BP 130. Moreover, under Article
262-A of the Labor Code, as amended, awards or decisions of voluntary arbitrators become final and executory after calendar 10 days
from notice thereof to the parties.
Issue: WON VA erred in vacating his first decision
Ruling: When the parties submitted their grievance to arbitration, they expressly agreed that the decision of the Voluntary Arbitrator
would be final, executory and inappealable. In fact, even without this stipulation, the first decision had already become so by virtue of
Article 263 of the Labor Code making voluntary arbitration awards or decisions final and executory.
La Vale Plaza, Inc., v. R.S. Noonan, Inc. ruled that: It is an equally fundamental common law principle that once an arbitrator has
made and published a final award, his authority is exhausted and be is functus officio and can do nothing more in regard to the
subject matter of the arbitration. The policy which lies behind this is an unwillingness to permit one who not a is judicial officer and
who acts informally and sporadically, to re-examine a final decision which he has already rendered, because of the potential evil of
outside communication and unilateral influence which might affect a new conclusion. The continuity of judicial office and the tradition
which surround judicial conduct is lacking in the isolated activity of an arbitrator, although even here the vast increase in the
arbitration of labor disputes has created the office of the specialized provisional arbitrator.
This Court held that the Voluntary Arbitrator lost jurisdiction over the case submitted to him the moment be rendered his decision.
Therefore, he could no longer entertain a motion for reconsideration of the decision for its reversal or modification. Thus by modifying
the original award, respondent arbitrator exceeded his authority as such, a fact he was well aware of, as shown by his previous
Resolution of Inhibition wherein he refused to act on the Union's motion for reconsideration of the award or decision.
An award should be regarded as the judgment of a court of last resort, so that all reasonable presumptions should be
ascertained in its favor and none to overthrow it. Otherwise, arbitration proceedings, instead of being a quick and
easy mode of obtaining justice, would be merely an unnecessary step in the course of litigation, causing delay and
expenses, but not finally settling anything. Notwithstanding the natural reluctance of the courts to interfere with
matters determined by the arbitrators. they will do so in proper cases where the law ordains them.
The power and authority of the Voluntary Arbitrator to act in the case commences from his appointment and acceptance to act as
such under the submission agreement of the Parties and terminates upon his rendition of his decision or award which is accorded the
benefits of the doctrine of res judicata as in judgments of our regular courts of law. Since the power and authority of the arbitrator to
render a valid award, order or resolution rest upon the continuing mutual consent of the parties, and there is none shown here, the
Voluntary Arbitrator has no choice but to decline to rule on the pleadings submitted by the parties.
It is true that the present rule makes the voluntary arbitration award final and executory after ten calendar days from receipt of the
copy of the award or decision by the parties. Presumably, the decision may still be reconsidered by the Voluntary Arbitrator on the
basis of a motion for reconsideration duly filed during that period. Such a provision, being procedural, may be applied retroactively to
pending actions as we have held in a number of cases. However, it cannot be applied to a case in which the decision had become
final before the new provision took effect, as in the case at bar. 6 R.A. 6715, which introduced amended Article 262-A of the Labor
Code, became effective on March 21, 1989. The first decision of the Voluntary Arbitrator was rendered on July 12, 1988, when the law
in force was Article 263 of the Labor Code, which provided that Voluntary arbitration awards or decisions shall be final, inappealable,
and executory.
The decision of the Voluntary Arbitrator dated December 14, 1988, is SET ASIDE.

99. G.R. No. L-43825 May 9, 1988

CONTINENTAL MARBLE CORP. and FELIPE DAVID vs. NATIONAL LABOR RELATIONS COMMISSION
Facts: Private respondent Rodito Nasayao claimed that sometime in May 1974, he was appointed plant manager of the petitioner
corporation, with an alleged compensation of P3,000.00, a month, or 25% of the monthly net income of the company, whichever is
greater, and when the company failed to pay his salary for the months of May, June, and July 1974, Rodito Nasayao filed a complaint
with the National Labor Relations Commission, Branch IV, for the recovery of said unpaid varies. Petitioners denied that Rodito
Nasayao was employed in the company. They claimed that the undertaking agreed upon by the parties was a joint venture, a sort of
partnership, wherein Rodito Nasayao was to keep the machinery in good working condition and, in return, he would get the contracts
from end-users for the installation of marble products, in which the company would not interfere. In addition, private respondent
Nasayao was to receive an amount equivalent to 25% of the net profits that the petitioner corporation would realize, should there be
any. Petitioners alleged that since there had been no profits during said period, private respondent was not entitled to any amount.
The case was submitted for voluntary arbitration. However, the herein petitioners challenged the arbitrator's capacity to try and
decide the case fairly and judiciously and asked him to desist from further hearing the case. Respondent arbitrator refused and
rendered judgment in favor of the complainant.
Petitioners appealed to the National Labor Relations Commission on grounds that the labor arbiter gravely abused his discretion in
persisting to hear and decide the case notwithstanding petitioners' request for him to desist therefrom: and that the appealed
decision is not supported by evidence. NLRC dismissed the appeal on the ground that the decision appealed from is final,
unappealable and immediately executor.
Issue: WON the judgment or award of the voluntary arbitrator is final, unappealable and immediately executory, and may not be
reviewed by the Court.
Ruling: The question of the finality and unappealability of a decision and/or award of a voluntary arbitrator had been laid to rest
in Oceanic Bic Division (FFW) vs. Romero, and reiterated in Mantrade FMMC Division Employees and Workers Union vs.
Bacungan. The Court therein ruled that it can review the decisions of voluntary arbitrators, thus- We agree with the petitioner that the
decisions of voluntary arbitrators must be given the highest respect and as a general rule must be accorded a certain measure of
finality. This is especially true where the arbitrator chosen by the parties enjoys the first rate credentials of Professor Flerida Ruth
Pineda Romero, Director of the U.P. Law Center and an academician of unquestioned expertise in the field of Labor Law. It is not
correct, however, that this respect precludes the exercise of judicial review over their decisions. Article 262 of the Labor Code making
voluntary arbitration awards final, inappealable, and executory except where the money claims exceed P l 00,000.00 or 40% of paidup capital of the employer or where there is abuse of discretion or gross incompetence refers to appeals to the National Labor
Relations Commission and not to judicial review. Inspite of statutory provisions making 'final' the decisions of certain administrative
agencies, we have taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of discretion,
violation of due process, denial of substantial justice, or erroneous interpretation of the law were brought to our attention. There is no
provision for appeal in the statute creating the Sandiganbayan but this has not precluded us from examining decisions of this special
court brought to us in proper petitions. ...
The Court further said: A voluntary arbitrator by the nature of her fucntions acts in quasi-judicial capacity. There is no reason why her
decisions involving interpretation of law should be beyond this Court's review. Administrative officials are presumed to act in
accordance with law and yet we do hesitate to pass upon their work where a question of law is involved or where a showing of abuse
of authority or discretion in their official acts is properly raised in petitions for certiorari.
The foregoing pronouncements find support in Section 29 of Republic Act No. 876, otherwise known as the Arbitration Law, which
provides: Sec. 29. Appeals An appeal may be taken from an order made in a proceeding under this Act, or from a judgment entered
upon an award through certiorari proceedings, but such appeals shall be limited to questions of law. The proceedings upon such an
appeal, including the judgment thereon shall be governed by the Rules of Court in so far as they are applicable.
While the Court has accorded great respect for, and finality to, findings of fact of a voluntary arbitrator and administrative agencies
which have acquired expertise in their respective fields, like the Labor Department and the National Labor Relations
Commission, their findings of fact and the conclusions drawn therefrom have to be supported by substantial evidence. ln that instant
case, the finding of the voluntary arbitrator that Rodito Nasayao was an employee of the petitioner corporation is not supported by
the evidence or by the law. There is nothing in the record which would support the claim of Rodito Nasayao that he was an employee
of the petitioner corporation. He was not included in the company payroll, nor in the list of company employees furnished the Social
Security System. Most of all, the element of control is lacking.
In the instant case, it appears that the petitioners had no control over the conduct of Rodito Nasayao in the performance of his work.
He decided for himself on what was to be done and worked at his own pleasure. He was not subject to definite hours or conditions of
work and, in turn, was compensated according to the results of his own effort. He had a free hand in running the company and its
business, so much so, that the petitioner Felipe David did not know, until very much later, that Rodito Nasayao had collected old
accounts receivables, not covered by their agreement, which he converted to his own personal use. It was only after Rodito Nasayao

had abandoned the plant following discovery of his wrong- doings, that Felipe David assumed management of the plant. Absent the
power to control the employee with respect to the means and methods by which his work was to be accomplished, there was no
employer-employee relationship between the parties. Hence, there is no basis for an award of unpaid salaries or wages to Rodito
Nasayao.
100. G.R. No. 120319 October 6, 1995
LUZON DEVELOPMENT BANK vs. ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA
Facts: From a submission agreement of LDB and ALDBE arose an arbitration case to resolve the following issue: Whether or not the
company has violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April 1994, on
promotion.
Parties agreed on the submission of their respective Position Papers on December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as
Voluntary Arbitrator, received ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its Position Paper
despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no Position Paper had been filed by LDB.
On May 24, 1995, the Voluntary Arbitrator rendered a decision that the Bank has not adhered to the Collective Bargaining Agreement
provision nor the Memorandum of Agreement on promotion.
Issue: WON the decision of VA can be set aside.
Ruling: Arbitration is the reference of a labor dispute to an impartial third person for determination on the basis of evidence and
arguments presented by such parties who have bound themselves to accept the decision of the arbitrator as final and binding.
Arbitration may be compulsory or voluntary. Compulsory arbitration is a system whereby the parties to a dispute are compelled by
the government to forego their right to strike and are compelled to accept the resolution of their dispute through arbitration by a third
party. The essence of arbitration remains since a resolution of a dispute is arrived at by resort to a disinterested third party whose
decision is final and binding on the parties, but in compulsory arbitration, such a third party is normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a voluntary arbitration
clause in their collective agreement, to an impartial third person for a final and binding resolution. Ideally, arbitration awards are
supposed to be complied with by both parties without delay, such that once an award has been rendered by an arbitrator, nothing is
left to be done by both parties but to comply with the same. After all, they are presumed to have freely chosen arbitration as the
mode of settlement for that particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear
and decide their case. Above all, they have mutually agreed to de bound by said arbitrator's decision.
Parties to a CBA are required to include therein provisions for machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company personnel policies. For this purpose, parties to a CBA shall name and
designate therein a voluntary arbitrator or a panel of arbitrators, or include a procedure for their selection, preferably from those
accredited by the National Conciliation and Mediation Board (NCMB). Article 261 of the Labor Code accordingly provides for exclusive
original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the interpretation or implementation of the CBA and
(2) the interpretation or enforcement of company personnel policies. Article 262 authorizes them, but only upon agreement of the
parties, to exercise jurisdiction over other labor disputes.
It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators is quite limited
compared to the original jurisdiction of the labor arbiter and the appellate jurisdiction of the National Labor Relations Commission
(NLRC) for that matter. The state of our present law relating to voluntary arbitration provides that "(t)he award or decision of the
Voluntary Arbitrator . . . shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by
the parties," while the "(d)ecision, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission
by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders." Hence, while there is an
express mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the
decision of a voluntary arbitrator.
In Volkschel Labor Union, et al. v. NLRC, et al., on the settled premise that the judgments of courts and awards of quasi-judicial
agencies must become final at some definite time, this Court ruled that the awards of voluntary arbitrators determine the rights of
parties; hence, their decisions have the same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et
al., 9 this Court ruled that "a voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity." Under these rulings, it
follows that the voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but
independent of, and apart from, the NLRC since his decisions are not appealable to the latter.
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall exercise:

(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial
Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and
Exchange Commission, the Employees Compensation Commission and the Civil Service Commission, except those
falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of
the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1)
of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered as a quasijudicial agency, board or commission, still both he and the panel are comprehended within the concept of a "quasi-judicial
instrumentality." It may even be stated that it was to meet the very situation presented by the quasi-judicial functions of the
voluntary arbitrators here, as well as the subsequent arbitrator/arbitral tribunal operating under the Construction Industry Arbitration
Commission, 11 that the broader term "instrumentalities" was purposely included in the above-quoted provision.
An "instrumentality" is anything used as a means or agency. Thus, the terms governmental "agency" or "instrumentality" are
synonymous in the sense that either of them is a means by which a government acts, or by which a certain government act or
function is performed. The word "instrumentality," with respect to a state, contemplates an authority to which the state delegates
governmental power for the performance of a state function. An individual person, like an administrator or executor, is a judicial
instrumentality in the settling of an estate, 15 in the same manner that a sub-agent appointed by a bankruptcy court is an
instrumentality of the court, 16 and a trustee in bankruptcy of a defunct corporation is an instrumentality of the state. 17
The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under the provisions
therefor in the Labor Code and he falls, therefore, within the contemplation of the term "instrumentality" in the aforequoted Sec. 9 of
B.P. 129. The fact that his functions and powers are provided for in the Labor Code does not place him within the exceptions to said
Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It will be noted that, although the Employees
Compensation Commission is also provided for in the Labor Code, Circular No. 1-91, which is the forerunner of the present Revised
Administrative Circular No. 1-95, laid down the procedure for the appealability of its decisions to the Court of Appeals under the
foregoing rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of
Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies,
boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform procedure for the
appellate review of adjudications of all quasi-judicial entities 18 not expressly excepted from the coverage of Sec. 9 of B.P. 129 by
either the Constitution or another statute. Nor will it run counter to the legislative intendment that decisions of the NLRC be
reviewable directly by the Supreme Court since, precisely, the cases within the adjudicative competence of the voluntary arbitrator
are excluded from the jurisdiction of the NLRC or the labor arbiter.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration
is deemed a special proceeding of which the court specified in the contract or submission, or if none be specified, the Regional Trial
Court for the province or city in which one of the parties resides or is doing business, or in which the arbitration is held, shall have
jurisdiction. A party to the controversy may, at any time within one (1) month after an award is made, apply to the court having
jurisdiction for an order confirming the award and the court must grant such order unless the award is vacated, modified or
corrected. 19
In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial court. Consequently, in a petition
for certiorari from that award or decision, the Court of Appeals must be deemed to have concurrent jurisdiction with the Supreme
Court. As a matter of policy, this Court shall henceforth remand to the Court of Appeals petitions of this nature for proper disposition.
101. G.R. No. L-20303

September 27, 1967

REPUBLIC SAVINGS BANK vs. COURT OF INDUSTRIAL RELATIONS

Facts: The Bank had in its employ the respondents Rosendo T. Resuello, Benjamin Jara, Florencio Allasas, Domingo B. Jola, Diosdado
S. Mendiola, Teodoro de la Cruz, Narciso Macaraeg and Mauro A. Rovillos. On July 12, 1958 it discharged Jola and, a few days after
(July 18, 1958), the rest of respondents, for having written and published "a patently libelous letter . . . tending to cause the dishonor,
discredit or contempt not only of officers and employees of this bank, but also of your employer, the bank itself."
The letter referred to was a letter-charge which the respondents had written to the bank president, demanding his resignation on the
grounds of immorality, nepotism in the appointment and favoritism as well as discrimination in the promotion of bank employees.

Copies of this letter were admittedly given to the chairman of the board of directors of the Bank, and the Governor of the Central
Bank.
At the instance of the respondents, prosecutor A. Tirona filed a complaint in the CIR on September 15, 1958, alleging that the Bank's
conduct violated section 4(a) (5) of the Industrial Peace Act which makes it an unfair labor practice for an employer "to dismiss,
discharge or otherwise prejudice or discriminate against an employee for having filed charges or for having given or being about to
give testimony under this Act."
The Bank moved for the dismissal of the complaint, contending that respondents were discharged not for union activities but for
having written and published a libelous letter against the bank president. The court denied the motion on the basis of its decision in
another case in which it ruled that section 4(a) (5) applies to cases in which an employee is dismissed or discriminated against for
having filed "any charges against his employer." Whereupon the case was heard.
In 1960, however, this Court overruled the decision of the CIR in the Royal Interocean case and held that "the charge, the filing of
which is the cause of the dismissal of the employee, must be related to his right to self-organization in order to give rise to unfair
labor practice on the part of the employer," because "under subsection 5 of section 4(a), the employee's (1) having filed charges or
(2) having given testimony or (3) being about to give testimony, are modified by 'under this Act' appearing after the last item." The
Bank therefore renewed its motion to dismiss, but the court held the motion in abeyance and proceeded with the hearing.
On July 4, 1962 the court rendered a decision finding the Bank guilty of unfair labor practice and ordering it to reinstate the
respondents, with full back wages and without loss of seniority and other privileges. This decision was affirmed by the court en
banc on August 9, 1962.
Issue: WON the dismissal of the eight (8) respondent employees by the petitioner Republic Bank Constituted an unfair labor practice
within the meaning and intendment of the Industrial Peace Act. The Court of Industrial Relations found it did and its decision is now on
appeal before us. The Bank maintains that the discharge was for cause.
Ruling: It will avail the Bank none to gloat over this admission of the respondents. Assuming that the latter acted in their individual
capacities when they wrote the letter-charge they were nonetheless protected for they were engaged in concerted activity, in the
exercise of their right of self-organization that includes concerted activity for mutual aid and protection, interference with
which constitutes an unfair labor practice under section 4(a)(1). This is the view of some members of this Court. For, as has been
aptly stated, the joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is a
concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that collective
bargaining be contemplated.
Indeed, when the respondents complained against nepotism, favoritism and other management practices, they were acting within an
area marked out by the Act as a proper sphere of collective bargaining. Even the reference to immorality was not irrelevant as it
was made to support the respondents' other charge that the bank president had failed to provide wholesome working conditions, let
alone a good moral example, for the employees by practicing discrimination and favoritism in the appointment and promotion of
certain employees on the basis of illicit relations or blood relationship with them.
Other members of this Court agreed with the CIR that the Bank's conduct violated section 4(a) (5) which makes it an unfair labor
practice for an employer to dismiss an employee for having filed charges under the Act. Some other members of this Court believe,
without necessarily expressing approval of the way the respondents expressed their grievances, that what the Bank should have done
was to refer the letter-charge to the grievance committee. This was its duty, failing which it committed an unfair labor practice under
section 4(a) (6). For collective bargaining does not end with the execution of an agreement. It is a continuous process. The duty to
bargain imposes on the parties during the term of their agreement the mutual obligation "to meet and confer promptly and
expeditiously and in good faith . . . for the purpose of adjusting any grievances or question arising under such agreement" 8 and a
violation of this obligation is, by section 4 (a) (6) and (b) (3) an unfair labor practice. As Professors Cox and Dunlop point out:
Collective bargaining . . . normally takes the form of negotiations when major conditions of employment to be written into an
agreement are under consideration and of grievance committee meetings and arbitration when questions arising in the
administration of an agreement are at stake.
Instead of stifling criticism, the Bank should have allowed the respondents to air their grievances. Good faith bargaining required of
the Bank an open mind and a sincere desire to negotiate over grievances. The grievance committee, created in the collective
bargaining agreements, would have been an appropriate forum for such negotiation. Indeed, the grievance procedure is a part of the
continuous process of collective bargaining. It is intended to promote, as it were, a friendly dialogue between labor and management
as a means of maintaining industrial peace.
In final sum and substance, this Court is in unanimity that the Bank's conduct, identified as an interference with the employees' right
of self-organization, or as a retaliatory action, and/or as a refusal to bargain collectively, constituted an unfair labor practice within
the meaning and intendment of section 4(a) of the Industrial Peace Act.