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Chapter Seven

WHO MAY UNIONIZE


FOR PURPOSES OF COLLECTIVE BARGAINING

LABOR RELATIONS LAW


TOPICS PER SYLLABUS
A. Right to self-organization
1. Who may unionize for purposes of collective
bargaining
a) Who cannot form, join or assist labor
organizations
2. Bargaining unit
a) Test to determine the constituency of an
appropriate bargaining unit
3. Bargaining agent1
a) Voluntary recognition
(i) Requirements
b) Certification election
(i) In an unorganized establishment
(ii) In an organized establishment
c) Run-off election
(i) Requirements
d) Re-run election
e) Consent election
4. Other relevant matters2
a) Affiliation and disaffiliation of the local union
from the mother union
(i) Substitutionary doctrine
b) Union dues and special assessments
(i) Requirements for validity
c) Agency fees
(i) Requisites for assessment
A.
RIGHT TO SELF-ORGANIZATION 3
1. CONSTITUTIONAL BASES.
Under the 1987 Constitution, it is mandated
that the State affirms labor as a primary social
economic force. It shall protect the rights of workers and
promote their welfare.4
Consequently, the State is required to guarantee
the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with
law.5
Further, the Constitution declares that the right of
the people, including those employed in the public and
private sectors, to form unions, associations, or
societies for purposes not contrary to law, shall not be
abridged.6
2. LEGAL BASES.
The Labor Code declares as a basic policy that the
State:
(1) shall assure the rights of workers, inter alia, to
self-organization and collective bargaining;7
(2) shall promote free trade unionism as an
instrument for the enhancement of democracy and the
promotion of social justice and development; and
(3) shall foster the free and voluntary organization
of a strong and united labor movement.8
1.

1. PERSONS WHO MAY JOIN, FORM OR ASSIST A


LABOR ORGANIZATION FOR COLLECTIVE
BARGAINING PURPOSES.
The following are eligible to join, form or assist a
labor organization:
In the private sector:
1. All persons employed in commercial, industrial
and agricultural enterprises;9
2. Employees of government-owned or controlled
corporations without
original
charters established under the Corporation
Code;10
3. Employees of religious, charitable, medical or
educational institutions, whether operating for
profit or not;11
4. Front-line managers, commonly known as
supervisory
employees [See
discussion
below];12
5. Alien employees [See discussion below];
6. Working children [See discussion below];
7. Homeworkers [See discussion below];
8. Employees of cooperatives [See discussion
below]; and
9. Employees of legitimate contractors not with
principal but with the contractor [See
discussion below].
In the public sector:
All rank-and-file employees of all branches,
subdivisions, instrumentalities, and agencies of
government, including government-owned and/or
controlled corporations with original charters, can
form, join or assist employees organizations of
their own choosing.13
a. Right of front-line managers or supervisors to
join a union.
There is no prohibition in the law or in the
implementing rules regarding the right of supervisory
employees to organize a labor organization or workers
association of their own. They are, however, not allowed to
become members of a labor union composed of rank-and-file
employees. This is clear under Article 245 of the Labor
Code.14 In case there is mixed membership of supervisors
and rank-and-file employees in one union, the new rule
enunciated in Article 245-A15 of the Labor Code, unlike in the
old law, is that it cannot be invoked as a ground for the
cancellation of the registration of the union. The employees
so improperly included are automatically deemed removed
from the list of members of said union. In other words, their
removal from the said list is by operation of law.
b. Right of alien employees to join a union.
For an alien employee to exercise his right to selforganize, the following requisites should be complied with:
(1) He should have a valid working permit issued by
the DOLE; and
(2) He is a national of a country which grants the
same or similar rights to Filipino workers or
which has ratified either ILO Convention No.
8716 or ILO Convention No. 98, as certified by

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the Philippine Department of Foreign Affairs


(DFA) .17
c. Right of working children to self-organization.
Working children have the same freedom as adults
to join the collective bargaining union of their own choosing
in accordance with existing law. Under P.D. No. 603,18 it is
clearly provided that neither management nor any collective
bargaining union shall threaten or coerce working children to
join, continue or withdraw as members of such union.19
d. Right of homeworkers to self-organization.
Homeworkers have the right to form, join or assist
organizations of their own choosing in accordance with
law.20 The registration of homeworkers organizations or
associations following the requirements prescribed by law
will vest legal personality thereto.21
e. Right of members or employees of
cooperatives to self-organization.
Members of a cooperative have no right to form or
join labor organizations for purposes of collective bargaining
for being themselves co-owners of the cooperative. This
prohibition covers employees of the cooperative who are at
the same time members thereof.22
However, insofar as the cooperatives employees
who are not members or co-owners thereof are concerned,
they are entitled to exercise their right to self-organization
and collective bargaining as guaranteed in the Constitution
and existing laws. It is the fact of ownership of the
cooperative and not involvement in the management thereof
which disqualifies a member from joining any labor
organization within the cooperative. Thus, irrespective of the
degree of their participation in the actual management of the
cooperative, all members thereof cannot form, assist or join a
labor organization for the purpose of collective bargaining.23
But employee-members of a cooperative may
withdraw as members of the cooperative for purposes of
joining a labor union.24
f. Right of employees of legitimate contractors
to self-organization.
A contractual employee of a legitimate independent
contractor is entitled to all the rights and privileges due a
regular employee as provided in the Labor Code including
the right to self-organization, collective bargaining and
peaceful concerted action.25 But this right cannot be
exercised and invoked against the principal but only against
the independent contractor which employed them.
2. EMPLOYEES WHO ARE ALLOWED TO ORGANIZE A
LABOR ORGANIZATION ONLY FOR MUTUAL AID AND
PROTECTION BUT NOTFOR COLLECTIVE
BARGAINING PURPOSES.
Ambulant, intermittent and other workers, the selfemployed, rural workers and those without any definite
employers may form labor organizations for their mutual aid
and
protection
and
other
legitimate
purposes except collective bargaining.26 The reason for this
rule is that these persons have no employers with whom they
can collectively bargain.
(a)
WHO CANNOT FORM, JOIN OR ASSIST
LABOR ORGANIZATIONS
1. PERSONS NOT ALLOWED TO FORM, JOIN OR ASSIST
LABOR ORGANIZATIONS.
a. In the private sector.
1. Managerial employees; and
2. Confidential employees.
b. In the public sector.

The following are not eligible to form employees


organizations:
1. High-level employees whose functions are
normally considered as policy-making or
managerial or whose duties are of a highly
confidential nature;27
2. Members of the Armed Forces of the
Philippines;
3. Police officers;
4. Policemen;
5. Firemen; and
6. Jail guards.28
2. RIGHT OF MANAGERIAL EMPLOYEES TO JOIN A
UNION.
a. Types of managerial employees for purposes
of exercising right to self-organization.
There are 3 types of managerial employees:
1. Top Management
2. Middle Management
3. First-Line Management (also called
supervisory level) 29
Top Management. This is composed of a
comparatively small group of executives. It is responsible for
the overall management of the organization. It establishes
operating policies and guides the organizations interactions
with its environment. Typical titles of top managers are chief
executive officer, president, or senior vice-president.
Actual titles vary from one organization to another and are
not always a reliable guide to membership in the highest
management classification.
Middle Management. This refers to more than
one level in an organization. Middle managers direct the
activities of other managers and sometimes also those of
operating employees. The middle managers principal
responsibilities are to direct the activities that implement their
organizations policies and to balance the demands of their
superiors with the capacities of their subordinates. A plant
manager in an electronic firm is an example of a middle
manager.
First-Line Management. This is the lowest level
in an organization at which individuals are responsible for the
work of others. First-line managers direct operating
employees only; they do not supervise other managers.
Examples of first-line managers are the foreman or
production supervisor in a manufacturing plant, the technical
supervisor in a research department, and the clerical
supervisor in a large office. First-level managers are often
called supervisors.
Based on the above classification, managerial
employees may fall into two (2) distinct categories: namely:
1.
The
managers per
se composed
of top and middle managers; and
2.
The
supervisors
composed
of firstline managers.
b. Not all managerial employees are prohibited
from forming, joining or assisting a union.
No. 1. above are absolutely prohibited from forming,
joining or assisting any labor unions for purposes of
collective bargaining.30
Only No. 2 above are allowed to form, join or assist
a labor organization for purposes of collective bargaining.
3. RIGHT OF CONFIDENTIAL EMPLOYEES TO JOIN A
UNION.
a. Confidential employee rule.
Within the context of labor relations, confidential
employees are those who meet the following criteria:
(1) They assist or act in a confidential capacity;

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(2) To persons or officers who formulate, determine,


and
effectuate
management
policies
specifically in the field of labor relations .
The two (2) criteria are cumulative and both must
be met if an employee is to be considered a confidential
employee that would deprive him of his right to form, join or
assist a labor organization.31
A confidential employee may be a rank-and-file or
supervisory employee but because in the normal course of
his duties, he becomes aware of management
policies relating to labor relations, he is not allowed to
assist, form or join a rank-and-file union or supervisory union,
as the case may be. His exclusion from the bargaining unit is
justified under the confidential employee rule. To allow
him to join a union would give rise to a potential conflict of
interest. Management should not be required to handle labor
relations matters through employees who are represented by
the union with which the company is required to deal and
who, in the normal performance of their duties, may obtain
advance information on the companys position with regard
to collective bargaining negotiations, the disposition of
grievances, or other labor relations matters.32
However, the mere access of an employee to
confidential
labor
relations
information
which
is
merely incidental to his duties and, therefore, knowledge
thereof is not necessary in the performance of said duties,
does not make such employee a confidential employee. If
access to confidential labor relations information is to be a
factor in the determination of an employees confidential
status, such information must relate to the employers labor
relations policies. Therefore, access to information which is
regarded by the employer to be confidential from the
business standpoint, such as financial information or
technical trade secrets, will not render an employee a
confidential employee. An employee may not be excluded
from an appropriate bargaining unit merely because he has
access to confidential information concerning the employers
internal business operations which isnot related to the field
of labor relations.33
Thus, even a bank cashier who also serves as the
secretary of the board of directors may not be classified as a
confidential employee disqualified to join a union. True, the
board of directors is responsible for corporate policies, the
exercise of corporate powers and the general management
of the business and affairs of the corporation. As secretary of
the banks governing body, the employee serves the banks
management, but could not be deemed to have access to
confidential information specifically relating to the banks
labor relations policies, absent a clear showing on this
matter.34
b. Doctrine of necessary implication.
The doctrine of necessary implication is the
legal basis for the ineligibility of a confidential employee
to join a union. The disqualification of managerial and
confidential employees from joining a bargaining unit of rankand-file employees or supervisory employees is already wellentrenched in jurisprudence. While Article 245 of the Labor
Code limits the ineligibility to join, assist or form a labor
organization to managerial employees, jurisprudence has
extended this prohibition to confidential employees or those
who, by reason of their positions or nature of work, are
required to assist or act in a fiduciary manner to managerial
employees and, therefore, are likewise privy to sensitive and
highly confidential records.35
Article 245 of the Labor Code does not directly
prohibit confidential employees from engaging in union
activities. Their disqualification proceeds merely from the
application of the doctrine of necessary implication because
what Article 245 singles out as ineligible to join, assist or

form any labor organization are managerial employees. By


necessary implication, confidential employees are similarly
disqualified. This doctrine states that what is implied in a
statute is as much a part thereof as that which is
expressed.36
Simply stated, in the collective bargaining process,
managerial employees are supposed to be on the side of the
employer to act as its representatives and to see to it that its
interests are well protected. The employer is not assured of
such protection if managerial employees themselves are
union members. Collective bargaining in such a situation can
become one-sided. It is the same reason why the positions
of confidential employees are included in the disqualification
found in Article 245 as if such disqualification was written in
the provision. If confidential employees could unionize in
order to bargain for advantages for themselves, then they
could be governed by their own motives rather than the
interest of the employer. Moreover, unionization of
confidential employees for the purpose of collective
bargaining would mean the extension of the law to persons
or individuals who are supposed to act in the interest of the
employers. It is not far-fetched that in the course of the
collective bargaining negotiations, they might jeopardize that
interest which they are duty-bound to protect.
c. Cases where confidential employees were not
allowed to join unions.
Based on jurisprudence, the following are
considered confidential employees under the confidential
employee rule:
1. Accounting personnel and radio and telegraph
operators;37
2. Division secretaries, all Staff of General
Management,
Personnel
and
Industrial
Relations Department, Secretaries of Audit, EDP
and Financial Systems;38
3. Legal secretaries who are tasked with, among
others, the typing of legal documents,
memoranda and correspondence, the keeping of
records and files, the giving of and receiving
notices, and such other duties as required by the
legal personnel of the corporation.39
4. Executive secretaries of the General Manager
and the executive secretaries of the Quality
Assurance Manager, Product Development
Manager, Finance Director, Management
System Manager, Human Resources Manager,
Marketing Director, Engineering Manager,
Materials Manager and Production Manager
were also considered confidential employees
since they have access to vital labor
information.40
d. Cases where confidential employees were
allowed to join unions.
Confidential employees are not absolutely
prohibited from joining unions. This is the correct view since
confidential employees are allowed to join unions in some
cases.
For instance, in Southern Philippines Federation
of Labor v. Ferrer-Calleja,41 the inclusion of the confidential
rank-and-file employees in the bargaining unit of rank-andfile employees was upheld by the Supreme Court. Much
earlier, the High Court proclaimed in Filoil Refinery
Corporation v. Filoil Supervisory and Confidential
Employees Association, 42 that confidential rank-and-file
employees may join the union of supervisors, especially in a
situation where the confidential employees are very few in
number and are, by practice and tradition, identified with the
supervisors in their role as representatives of
management vis--vis the rank-and-file employees. Such

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identity of interest has allowed their inclusion in the


bargaining unit of supervisors for purposes of collective
bargaining. They remain employees in relation to the
company as their employer. This identity of interest logically
calls for their inclusion in the same bargaining unit and at the
same time fulfills the laws objective of insuring to them the
full benefit of their right to self-organization and to collective
bargaining which could hardly be accomplished if the
respondent associations membership were to be broken up
into five separate ineffective tiny units.
Jurisprudence, therefore, has established that there
is no legal prohibition against confidential employees who
are not performing managerial functions to form and join a
union.43
e. Some principles on the right to selforganization.
Any employee, whether employed for a
definite period or not, shall, beginning on the
first day of his service, be eligible for
membership in any labor organization.44
Right to join a union cannot be made subject
of a CBA stipulation.45
The separation of unions doctrine46 has
already been rendered nugatory by the latest
amendment of Article 245 of the Labor Code
introduced by R. A. No. 948147 which added the
phrase: The rank-and-file union and the
supervisors union operating within the
same establishment may join the same
federation or national union. This doctrine
prohibits the situation where the supervisory
union and the rank-and-file union operating
within the same establishment are both
affiliated with one and the same federation
because of the possible conflict of interest
which may arise in the areas, inter alia, of
discipline, collective bargaining and strike.
f. Some principles on government employees
right to self-organization.
The labor organization in the government
sector is technically called an employees
organization.48
Registration of employees organizations is
made with both Civil Service Commission
(CSC) and the Bureau of Labor Relations
(BLR) of the Department of Labor and
Employment (DOLE) . Once registered, it is
technically called a registered employees
organization.49 In the private sector, this is
theoretically known as a legitimate labor
organization. Cancellation of registration of
an employees organization is likewise made by
both the CSC and the BLR.
The sole and exclusive bargaining union is
called
an accredited
employees
organization.50 In the private sector, this is
in principle known as a recognized or certified
collective bargaining agent.
The unit where the government employees
organization seeks to operate and represent is
called organizational
unit. It
is
the
employers unit consisting of rank-and-file
employees unless circumstances otherwise
require.51 In the private sector, this is
technically known as bargaining unit.
Rights and privileges of a registered
employees organization. Upon the issuance

of the certificate of registration, the employees


organization shall have the following rights and
privileges:
a. To be certified, subject to the conditions
prescribed in the Rules and Regulations to
Govern the Exercise of the Right of
Government
Employees
to
SelfOrganization, as the sole representative of
the rank-and-file employees with the right to
negotiate for them.
b. To undertake all other activities not contrary
to law or public policy for the furtherance
and protection of the interests of its
members.52
Selection of the sole and exclusive
representative. The duly registered employees
organization having the support of the majority of
the employees in the appropriate organizational
unit should be designated as the sole and
exclusive representative of the employees.53 It is
designated as such through modes similar to
private sectors selection of sole and exclusive
bargaining agent through any of the following 3
modes:
a. Voluntary recognition upon a showing that no
other employees organization is registered or
is seeking registration in the organizational
unit, based on the records of the BLR, and
that the said organization has the majority
support of the rank-and-file employees in the
organizational unit.54
b. Certification election.55
c. Run-off election in cases where there are at
least three (3) contending organizations and
none received a majority of the valid votes
cast. Only the two (2) registered employees
organizations receiving the largest and
second largest number of votes in the first
voting shall be voted on.56
The right to strike is absolutely prohibited in
the government sector.57
2.
BARGAINING UNIT
1. BARGAINING UNIT, MEANING.
A bargaining unit refers to a group of employees
sharing mutual interests within a given employer unit,
comprised of all or less than all of the entire body of
employees in the employer unit or any specific occupational
or geographical grouping within such employer unit.58 It may
also refer to the group or cluster of jobs or positions within
the employers establishment that supports the labor
organization which is applying for registration.
It is a legal collectivity for collective bargaining
purposes whose members have substantially mutual
bargaining interests in the terms and conditions of
employment as will ensure to all employees their collective
bargaining rights. To be appropriate, a bargaining unit must
involve a grouping of employees who have substantial,
mutual interests in wages, hours of work, working conditions
and other subjects of collective bargaining.59
2. NO HARD AND FAST RULE TO DETERMINE A
BARGAINING UNIT.
There is no hard and fast rule in determining an
appropriate bargaining unit. The test whether the designation
of a bargaining unit is appropriate is whether it will best
assure to all employees the exercise of their collective
bargaining rights. There should be a community of interest

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which should be reflected in groups having substantial


similarity of work and duties or similarity of compensation
and working conditions, among other criteria.60
(a)
TEST TO DETERMINE THE CONSTITUENCY
OF AN APPROPRIATE BARGAINING UNIT
1. TESTS IN DETERMINING
BARGAINING UNIT.

AN

APPROPRIATE

Based on jurisprudence,61 there are certain tests


which may be used in determining the appropriate collective
bargaining unit, to wit:
(1) Community or mutuality of interest doctrine;
(2) Globe doctrine;
(3) Collective bargaining history doctrine; and
(4) Employment status doctrine.
2. COMMUNITY
DOCTRINE.

OR

MUTUALITY

OF

INTEREST

Under this doctrine, the employees sought to be


represented by the collective bargaining agent must have
community or mutuality of interest in terms of employment
and working conditions as evinced by the type of work they
perform. It is characterized by similarity of employment
status, same duties and responsibilities and substantially
similar compensation and working conditions.62
San Miguel Corporation v. Laguesma. 63 - The
Supreme Court applied this principle in the petition of the
union which seeks to represent the sales personnel in the
various Magnolia sales offices in Northern Luzon. Petitioner
took the position that each sales office should constitute one
bargaining unit. In disagreeing to this proposition of
petitioner, the High Court said: What greatly militates
against this position (of the company) is the meager number
of sales personnel in each of the Magnolia sales offices in
Northern Luzon. Even the bargaining unit sought to be
represented by respondent union in the entire Northern
Luzon sales area consists only of approximately fifty-five (55)
employees. Surely, it would not be for the best interest of
these employees if they would further be fractionalized. The
adage there is strength in number is the very rationale
underlying the formation of a labor union.
San Miguel Corporation Supervisors and
Exempt Employees Union v. Laguesma.64 - The fact that
the three (3) plants comprising the bargaining unit are
located in three (3) different places, namely, in Cabuyao,
Laguna, in Otis, Pandacan, Metro Manila, and in San
Fernando,
Pampanga,
was
declared
immaterial.
Geographical location can be completely disregarded if the
communal or mutual interests of the employees are not
sacrificed. The distance among the three (3) plants is not
productive of insurmountable difficulties in the administration
of union affairs. Neither are there regional differences that
are likely to impede the operations of a single bargaining
representative.
University of the Philippines v. Ferrer-Calleja,65 All non-academic rank-and-file employees of the University
of the Philippines in Diliman, Quezon City, Padre Faura,
Manila, Los Banos, Laguna and the Visayas were allowed to
participate in a certification election as one bargaining unit.
St. James School of Quezon City v. Samahang
Manggagawa sa St. James School of Quezon
City.66 - Respondent union sought to represent the rank-andfile employees (consisting of the motor pool, construction
and transportation employees) of petitioner-schools Tandang
Sora campus. Petitioner-school opposed it by contending
that the bargaining unit should not only be composed of said
employees but must include administrative, teaching and

office personnel in its five (5) campuses. The Supreme


Court disagreed with said contention. The motor pool,
construction and transportation employees of the Tandang
Sora campus had 149 qualified voters at the time of the
certification election, hence, it was ruled that the 149
qualified voters should be used to determine the existence of
a quorum during the election. Since a majority or 84 out of
the 149 qualified voters cast their votes, a quorum existed
during the certification election. The computation of the
quorum should be based on the rank-and-file motor pool,
construction and transportation employees of the Tandang
Sora campus and not on all the employees in petitioners five
(5) campuses. Moreover, the administrative, teaching and
office personnel are not members of the union. They do not
belong to the bargaining unit that the union seeks to
represent.
3. GLOBE DOCTRINE.
This principle is based on the will of the employees.
It is called Globe doctrine because this principle was first
enunciated in the United States case of Globe Machine and
Stamping Co.,67 where it was ruled, in defining the
appropriate bargaining unit, that in a case where the
companys production workers can be considered either as a
single bargaining unit appropriate for purposes of collective
bargaining or as three (3) separate and distinct bargaining
units, the determining factor is the desire of the workers
themselves. Consequently, a certification election should be
held separately to choose which representative union will be
chosen by the workers.68
International School Alliance of Educators
[ISAE] v. Quisumbing.69 - The Supreme Court ruled here
that foreign-hired teachers do not belong to the bargaining
unit of the local-hires because the former have not indicated
their intention to be grouped with the latter for purposes of
collective bargaining. Moreover, the collective bargaining
history of the school also shows that these groups were
always treated separately.
4. COLLECTIVE BARGAINING HISTORY DOCTRINE.
This principle puts premium to the prior collective
bargaining history and affinity of the employees in
determining the appropriate bargaining unit. However, the
existence of a prior collective bargaining history has been
held as neither decisive nor conclusive in the determination
of what constitutes an appropriate bargaining unit.70
National Association of Free Trade Unions v.
Mainit Lumber Development Company Workers
Union.71 - It was ruled here that there is mutuality of interest
among the workers in the sawmill division and logging
division as to justify their formation of a single bargaining
unit. This holds true despite the history of said two divisions
being treated as separate units and notwithstanding their
geographical distance from each other.
San Miguel Corporation v. Laguesma. 72 - Despite
the collective bargaining history of having a separate
bargaining unit for each sales office, the Supreme Court
applied the principle of mutuality or commonality of interests
in holding that the appropriate bargaining unit is comprised of
all the sales force in the whole of Northern Luzon.
5. EMPLOYMENT STATUS DOCTRINE.
The determination of the appropriate bargaining unit
based on the employment status of the employees is
considered an acceptable mode.73For instance, casual
employees and those employed on a day-to-day basis,
according to the Supreme Court in Philippine Land-Air-Sea
Labor Union v. CIR,74 do not have the mutuality or
community of interest with regular and permanent
employees. Hence, their inclusion in the bargaining unit
composed of the latter is not justified. Confidential
employees, by the very nature of their functions, assist and
act in a confidential capacity to, or have access to

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confidential matters of, persons who exercise managerial


functions in the field of labor relations. As such, the rationale
behind the ineligibility of managerial employees to form,
assist or join a labor union equally applies to them. Hence,
they cannot be allowed to be included in the rank-and-file
employees bargaining unit.75 The rationale for this inhibition
is that if these managerial employees would belong to or be
affiliated with a union, the latter might not be assured of their
loyalty to the union in view of evident conflict of interest. The
union can also become company-dominated with the
presence of managerial employees in its membership.76
Belyca
Corporation
v.
FerrerCalleja.77 - This involves a corporation engaged in piggery
and poultry raising, planting of agricultural crops and
operation of supermarts and cinemas. The Supreme Court
ruled that it is beyond question that the employees of the
livestock-agro division of the corporation perform work
entirely
different
from
those
being
performed
by employees in the supermarts and cinemas. The
differences among them lie in their working conditions, hours
of work, rates of pay, including the categories of their
positions and employment status. As stated by petitioner in
its position paper, due to the nature of the business in which
its livestock-agro division is engaged, very few of its
employees therein are permanent, the overwhelming
majority of whom are seasonal and casual and not regular
employees. Definitely, they have very little in common with
the employees of the supermarts and cinemas. To lump all
its employees in its integrated business concerns cannot
result in an efficacious bargaining unit comprised of
constituents enjoying a community or mutuality of interest.
Undeniably, the rank-and-file employees of the livestock-agro
division fully constitute a bargaining unit that satisfies both
requirements of classification according to employment
status and of substantial similarity of work and duties which
will ultimately assure its members the exercise of their
collective bargaining rights.78
3.
BARGAINING AGENT
1. EXCLUSIVE BARGAINING AGENT.
The
term exclusive
bargaining
representative or exclusive bargaining agent refers to a
legitimate labor union duly recognized 79 or certified80as the
sole and exclusive bargaining representative or agent of all
the employees in a bargaining unit.81
A labor union recognized or certified as the sole
and exclusive bargaining agent means that it shall remain
as such during the existence of the CBA, to the exclusion of
other labor organizations, and no petition questioning its
majority status shall be entertained nor shall certification
election be conducted outside of the 60-day freedom period
immediately before the expiry date of the 5-year term of the
CBA.82
The moment a union is recognized or certified, what
the bargaining union represents are not only its members but
also its non-members who are included in the bargaining
unit.83
The designation of a bargaining union, however,
does not deprive an individual employee or group of
employees to exercise their right at any time to present
grievances directly to their employer, with or without the
intervention of the bargaining union.84
2. A NON-RECOGNIZED OR NON-CERTIFIED UNION
CANNOT COLLECTIVELY BARGAIN WITH EMPLOYER.
Under Article 255 of the Labor Code, it is clear that
only the labor organization duly recognized or selected by
the majority of the employees in an appropriate collective

bargaining unit is the exclusive representative of all the


employees in such unit for purposes of collective bargaining.
Philippine Diamond Hotel and Resort, Inc.
[Manila Diamond Hotel] v. Manila Diamond Hotel
Employees Union. 85 In this case, the respondent union is
admittedly not the exclusive representative of the majority of
the employees of petitioner, hence, it could not demand from
the petitioner the right to bargain collectively in their behalf.
3. MODES OF DETERMINING THE
EXCLUSIVE BARGAINING AGENT.

SOLE

AND

The following are the modes:


1. Voluntary recognition;
2. Certification election;
3. Consent election;
4. Run-off election;86
5. Re-run election.87
These modes are discussed below in accordance
with the order of presentation prescribed in the syllabus.
(a)
VOLUNTARY RECOGNITION
(i)
REQUIREMENTS
1. VOLUNTARY RECOGNITION, DEFINED.
Voluntary recognition refers to the process by
which a legitimate labor union is voluntarily recognized by
the employer as the exclusive bargaining representative or
agent in a bargaining unit and reported as such with the
Regional Office in accordance with the Rules to Implement
the Labor Code.88
2. VOLUNTARY RECOGNITION, WHEN PROPER.
Voluntary recognition is proper only in cases where
there is only one legitimate labor organization existing and
operating in a bargaining unit. It cannot be done in case
there are two or more unions in contention.
3. REQUIREMENTS FOR VOLUNTARY RECOGNITION.
The notice of voluntary recognition should be
accompanied by the original copy and two (2) duplicate
copies of the following documents:
(a) A joint statement under oath attesting to the fact
of voluntary recognition;
(b) Certificate of posting of the joint statement of
voluntary
recognition
for
fifteen
(15)
consecutive days in at least two (2)
conspicuous places in the establishment or
bargaining unit where the union seeks to
operate;
(c) The approximate number of employees in the
bargaining unit, accompanied by the names of
those who support the voluntary recognition
comprising at least a majority of the members
of the bargaining unit; and
(d) A statement that the labor union is the only
legitimate labor organization operating within
the bargaining unit.
It is further required that all accompanying
documents of the notice of voluntary recognition should be
certified under oath by the employer-representative and
president of the recognized labor union.89
4. VOLUNTARY RECOGNITION OF A UNION MADE
DURING
PENDENCY
OF
A
PETITION
FOR

56

CERTIFICATION ELECTION
UNION, NOT VALID.

FILED

BY

ANOTHER

The voluntary recognition by the employer of a


union while a petition for certification election filed by a rival
union is pending does not have any valid effect. Thus, it was
held in Me-Shurn Corporation v. Me-Shurn Workers
Union FSM,90 that the results of the certification election
where the petitioner-union lost cannot be said to constitute a
repudiation by the affected employees of said unions right to
represent them, in view of the discriminatory acts committed
by the employer against the said union prior to the holding of
the certification election - acts that included the employers
immediate grant of exclusive recognition to another union as
a bargaining agent despite the pending petition for
certification election.
5. NOTICE OF VOLUNTARY RECOGNITION, WHEN AND
WHERE FILED.
Within thirty (30) days from such voluntary
recognition, the employer and the union should submit a
notice of voluntary recognition to the DOLE Regional Office
which issued the recognized labor unions certificate of
registration or, in the case of local chapter, where the charter
certificate and the other documents required under Article
234-A were submitted and filed.91
(b)
CERTIFICATION ELECTION
1. CERTIFICATION ELECTION, MEANING.
Certification election refers to the process of
determining through secret ballot the sole and exclusive
bargaining agent of the employees in an appropriate
bargaining unit for purposes of collective bargaining or
negotiations.
A certification election is conducted only upon the
order of the Med-Arbiter of the Bureau of Labor Relations
(BLR) of the Department of Labor and Employment (DOLE) .
92

It is the most democratic method of determining the


choice of the employees of their bargaining representative.93
It is not a litigation proceeding in the sense in
which this term is commonly understood. It is a
mere investigation of a non-adversary fact-finding
character in which the DOLE plays the part of a
disinterested investigator seeking merely to ascertain the
desires of the employees as to the matter of representation.
It is not, therefore, bound by the technical rules of
evidence.94
In case of doubt, the petition should be resolved in
favor of the holding of a certification election.95
2. WHO MAY FILE A PETITION FOR CERTIFICATION
ELECTION.
The petition may be filed by:
1. A legitimate labor organization which may be:
(a) an independent union; or
(b) a national union or federation which has
already issued a charter certificate to its
local chapter participating in the certification
election;96 or
(c) a local chapter which has been issued a
charter certificate by the national union or
federation.97
2. An employer, when requested by a labor
organization to bargain collectively and its
majority status is in doubt.98

3. RULES PROHIBITING THE FILING OF PETITION FOR


CERTIFICATION ELECTION (BAR RULES) .
a. General rule.
The general rule is that in the absence of a CBA
duly registered in accordance with Article 231 of the Labor
Code, a petition for certification election may be filed at any
time.99
b. Bar rules.
No certification election may be held under the
following rules:
1. Certification year bar rule;
2. Negotiations bar rule;
3. Bargaining deadlock bar rule; or
4. Contract bar rule.
1. CERTIFICATION YEAR BAR RULE.
Under this rule, a petition for certification election
may not be filed within one (1) year:
1. from the date the fact of voluntary recognition
has been entered; or
2. from the date a valid certification, consent, runoff or re-run election has been conducted within
the bargaining unit.100
Where an appeal has been filed from the order of
the Med-Arbiter certifying the results of the election, the
running of the one (1) year period shall be suspended until
the decision on the appeal has become final and
executory.101
2. NEGOTIATIONS BAR RULE.
Under this rule, no petition for certification election
should be entertained while the sole and exclusive
bargaining agent and the employer have commenced and
sustained negotiations in good faith within the period of one
(1) year from the date of a valid certification, consent, run-off
or re-run election or from the date of voluntary recognition.
Once the CBA negotiations have commenced and
while the parties are in the process of negotiating the terms
and conditions of the CBA, no challenging union is allowed to
file a petition for certification election that would disturb the
process and unduly forestall the early conclusion of the
agreement.
It must be noted that there is no law or rule that
imposes a particular restrictive period within which the
parties should conclude the CBA. In other words, the
negotiation process may last for months, even years, and
during the period of negotiations, no petition for certification
election may be filed.
3. BARGAINING DEADLOCK BAR RULE.
Under this rule, a petition for certification election
may not be entertained when a bargaining deadlock to which
an incumbent or certified bargaining agent is a party has
been submitted to conciliation or arbitration or has become
the subject of a valid notice of strike or lockout.102
Collective bargaining deadlock refers to a situation
where there is a failure in the collective bargaining
negotiations between the collective bargaining agent and the
employer resulting in an impasse or stalemate.103 Despite
their efforts at bargaining in good faith, the parties have
failed to resolve the issues and it appears that there are no
other definite options or plans in sight to break it. Simply
stated, there is a deadlock when there is a complete blocking
or stoppage in the negotiation resulting from the action of
equal and opposing forces.104
Kaisahan ng Manggagawang Pilipino [KAMPILKATIPUNAN] v. Trajano.105 - The bargaining deadlock-bar

56

rule was not applied here because for more than four (4)
years after it was certified as the exclusive bargaining agent
of all the rank-and-file employees, it did not take any action
to legally compel the employer to comply with its duty to
bargain collectively, hence, no CBA was executed. Neither
did it file any unfair labor practice suit against the employer
nor did it initiate a strike against the latter. Under the
circumstances, a certification election may be validly ordered
and held.
Even if there is no actual deadlock, if the
circumstances are similar to a deadlock, the
bargaining deadlock bar rule applies.
The case in point is Capitol Medical Center
Alliance of Concerned Employees-Unified Filipino
Service Workers v. Laguesma.106- Distinguishing this case
from said case of Kaisahan, the High Court cited the fact that
the bargaining agent here has taken legal actions to legally
coerce the employer to comply with its statutory duty to
bargain collectively. It has charged the employer with unfair
labor practice and conducted a strike to protest 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.
4. CONTRACT BAR RULE.
a. Concept.
Under this rule, a petition for certification election
may not be filed when a CBA between the employer and a
duly recognized or certified bargaining agent has been
registered with the Bureau of Labor Relations (BLR) in
accordance with the Labor Code.107 Where the CBA is duly
registered, a petition for certification election may be filed
only within the 60-day freedom period prior to its expiry. 108
The purpose of this rule is to ensure stability in the
relationship of the workers and the employer by preventing
frequent modifications of any CBA earlier entered into by
them in good faith and for the stipulated original period.109
b. Justifications for the rule.
The reasons for this rule are as follows:
1. Certification election may only be entertained
within the 60-day freedom period. Any petition
filed before or after this period should be
dismissed outright.110
2. When there exists a CBA, it is the duty of both
parties to keep the status quo and to continue in
full force and effect the terms and conditions
thereof during the 60-day freedom period and/or
until a new agreement is reached by them.111
3. At the expiration of the 60-day freedom period,
the employer should continue to recognize the
majority status of the incumbent bargaining
agent where no petition for certification election
challenging such majority status is filed by any
other union.112
c. When contract bar rule does not apply.
The contract-bar rule does not apply in the following
cases:
1. Where there is an automatic renewal provision in
the CBA but prior to the date when such
automatic renewal became effective, the
employer seasonably filed a manifestation with
the Bureau of Labor Relations of its intention to
terminate the said agreement if and when it is
established that the bargaining agent does not

represent anymore the majority of the workers in


the bargaining unit.113
2. Where the CBA, despite its due registration, is
found in appropriate proceedings that: (a) it
contains provisions lower than the standards
fixed by law; or (b) the documents supporting its
registration are falsified, fraudulent or tainted
with misrepresentation.114
3. Where the CBA does not foster industrial stability,
such as contracts where the identity of the
representative is in doubt since the employer
extended direct recognition to the union and
concluded a CBA therewith less than one (1)
year from the time a certification election was
conducted where the no union vote won. This
situation obtains in a case where the company
entered into a CBA with the union when its
status as exclusive bargaining agent of the
employees has not been established yet.115
4. Where the CBA was registered before or during
the last sixty (60) days of a subsisting
agreement or during the pendency of a
representation case.116 It is well-settled that the
60-day freedom period based on the original
CBA should not be affected by any amendment,
extension or renewal of the CBA for purposes of
certification election.117
4. REQUIREMENTS FOR VALIDITY OF CERTIFICATION
ELECTION.
a. Requisites for the validity of the petition for
certification election.
The following requisites should concur:
1. The union should be legitimate which means that
it is duly registered and listed in the registry of
legitimate labor unions of the BLR or that its
legal personality has not been revoked or
cancelled with finality.
2. In case of organized establishments, the petition
for certification election is filed during (and not
before or after) the 60-day freedom period of a
duly registered CBA.
3. In case of organized establishments, the petition
complied with the 25% written support of the
members of the bargaining unit.
4. The petition is filed not in violation of any of the
four (4) bar rules [See above discussion
thereof].
b. Two (2) kinds of majorities.
The process of certification election requires two (2)
kinds of majority votes, viz:
1. Number of votes required for the validity of
the process of certification election itself. In
order to have a valid certification election, at
least a majority of all eligible voters in the
appropriate bargaining unit must have cast
their votes.118
2. Number of votes required to be certified as
the collective bargaining agent. To be
certified as the sole and exclusive bargaining
agent, the union should obtain a majority of the
valid votes cast.119
c. Example on how to reckon the majorities.
To illustrate the proper reckoning of majority votes,
in a bargaining unit composed of 100 employees,
the first thing to determine is how many votes should be
validly cast in order to have a valid certification election.

56

The second issue is how many votes should a union garner


in order to be declared winner and thus be proclaimed as the
sole and exclusive bargaining agent of all the employees in
the bargaining unit.
Following the rule enunciated in Article 256, in order
to have a valid certification election, majority of the 100
employees or at least 51 employees should cast their votes.
In order to win the election, a contending union should be
able to garner the majority of the valid votes cast. So, if only
51 employees cast their votes, the majority thereof or at least
26 employees should vote for the winning union. This
illustration is necessary to dispel the notion that in a
bargaining unit composed of 100 employees, at least 51
employees should vote for the winning union. As clearly
shown in this illustration, a vote of 26 would suffice in order
to be certified as the sole and exclusive bargaining agent.
d. Failure of election.
There is failure of election when the number
of votes cast in a certification or consent election is less
than the majority of the number of eligible voters and
there are no challenged votes that could materially
change the results of the election.120
The effect of failure of election is the holding of
another election within six (6) months from the date of
declaration of the failure of election.121
e. Proclamation and certification of the result of
the certification election.
Within twenty-four (24) hours from the final canvass
of votes, there being a valid election, the Election Officer
shall transmit the records of the case to the Med-Arbiter who
shall, within the same period from receipt of the minutes and
results of election, issue an order proclaiming the results of
the election and certifying the union which obtained the
majority of the valid votes cast as the sole and exclusive
bargaining agent in the subject bargaining unit, under any of
the following conditions:
(1) No protest was filed or, even if one was filed, the
same was not perfected within the five (5) day
period for perfection of the protest;
(2) No challenge or eligibility issue was raised or,
even if one was raised, the resolution of the
same will not materially change the results of
the elections.
The winning union shall have the rights, privileges
and obligations of a duly certified collective bargaining agent
from the time the certification is issued.122
5. SOME PRINCIPLES ON CERTIFICATION ELECTION.
The pendency of a petition to cancel the certificate of
registration of a union participating in a certification
election does not stay the conduct thereof.123
The pendency of an unfair labor practice case filed
against a labor organization participating in the
certification election does not stay the holding thereof.124
Direct certification as a method of selecting the
exclusive bargaining agent of the employees
is not allowed.125 This is because the conduct of a
certification election is still necessary in order to arrive in
a manner definitive and certain concerning the choice of
the labor organization to represent the workers in a
collective bargaining unit.126
No certification election in entities immune from
suit is allowed.127
The No Union vote is always one of the choices in a
certification election. Where majority of the valid votes
cast results in No Union obtaining the majority, the
Med-Arbiter shall declare such fact in the order.128

The right to vote starts from first day of


employment. Any employee, whether employed for a
definite period or not, shall, beginning on his first day of
service, already be considered an employee for
purposes of membership in any labor union, hence,
eligible to participate in a certification election. 129
Consequently, all employees - whether probationary
or permanent or regular - may be allowed to
participate in the certification election. The law does not
make any distinction. It merely mentions the term
employees. 130
Only persons who have direct employment
relationship with the employer may vote in the
certification election, regardless of their period of
employment.131
Challenging of votes, grounds. An authorized
representative of any of the contending unions and the
employer may challenge a vote before it is deposited in
the ballot box only on any of the following grounds:
(a) That there is no employer-employee relationship
between the voter and the employer; or
(b) That the voter is not a member of the appropriate
bargaining unit which petitioner seeks to represent.132
Spoiled ballots are not reckoned to determine
majority.133
Protest; when perfected. The protesting party must
have its protest recorded in the minutes of the election
proceeding and should formalize it with the Med-Arbiter,
together with the specific grounds, arguments and
evidence, within five (5) days after the close of the
election proceedings. If not recorded in the minutes and
formalized within the said prescribed period, the protest
shall be deemed dropped.134
A protest cannot be filed by a labor union which
is not a participant in the certification election.135
(i)
CERTIFICATION ELECTION
IN AN UNORGANIZED ESTABLISHMENT136
1. UNORGANIZED ESTABLISHMENT, MEANING.
As distinguished from organized establishment, an
unorganized establishment is an employer entity where
there is no recognized or certified collective bargaining union
or agent.137
A company or an employer-entity, however, may still
be considered an unorganized establishment even if there
are unions in existence therein for as long as not one of them
is duly certified as the sole and exclusive bargaining
representative of the employees in the particular bargaining
unit it seeks to operate and represent.
Further, a company remains unorganized even if
there is a duly recognized or certified bargaining agent for
rank-and-file employees, for purposes of the petition for
certification election filed by supervisors. The reason is that
the bargaining unit composed of supervisors is separate and
distinct from the unionized bargaining unit of rank-and-file
employees. Hence, being unorganized, the 25% required
minimum support of employees within the bargaining unit of
the supervisors need not be complied with.138
2. AUTOMATIC CONDUCT OF A CERTIFICATION
ELECTION UPON FILING OF THE PETITION FOR
CERTIFICATION ELECTION.
In case of a petition filed by a legitimate
organization involving an unorganized establishment, the
Med-Arbiter is required to immediately order the conduct of a

56

certification election upon filing of a petition for certification


election by a legitimate labor organization. 139 The twenty-five
percent (25%) minimum support of the employees in the
bargaining unit which is required in organized
establishments is not necessary in the case of unorganized
establishments. The obvious purpose is to make it easy for
employees to self-organize - a policy which is enunciated in
the Constitution and labor laws.
(ii)
CERTIFICATION ELECTION
IN AN ORGANIZED ESTABLISHMENT140
1. REQUISITES FOR THE CONDUCT OF A
CERTIFICATION ELECTION IN AN ORGANIZED
ESTABLISHMENT.
Under Article 256, the Med-Arbiter is required
to automatically order the conduct of a certification election
by secret ballot in an organized establishment as soon as the
following requisites are fully met:
1. That a petition questioning the majority status of
the incumbent bargaining agent is filed before
the DOLE within the 60-day freedom period;
2. That such petition is verified; and
3. That the petition is supported by the written
consent of at least twenty-five percent (25%) of
all the employees in the bargaining unit.141
2. WRITTEN CONSENT OF AT LEAST 25% OF ALL THE
EMPLOYEES IN THE BARGAINING UNIT.
The 25% requirement may not be strictly enforced.
Compliance therewith need not be established with absolute
certainty. Even if the statutory requirement of 25% of the
labor force asking for certification election has not been
strictly complied with, the Med-Arbiter is still empowered to
order its conduct for the purpose of ascertaining which of the
contending labor organizations should be chosen as the
exclusive bargaining agent.142
(c)
RUN-OFF ELECTION
(i)
REQUIREMENTS
1. RUN-OFF ELECTION, MEANING.
A run-off election refers to an election between
the labor unions receiving the two (2) highest number of
votes in a certification election or consent election with three
(3) or more choices, where such a certification election or
consent election results in none of the three (3) or more
choices receiving the majority of the valid votes cast,
provided that the total number of votes for all contending
unions is at least fifty percent (50%) of the number of votes
cast.143
2. WHEN CONDUCTED.
If there are no objections or challenges which, if
sustained, can materially alter the results, the Election
Officer should motu proprio conduct a run-off election within
ten (10) days from the close of the election proceedings
between the labor unions receiving the two highest number
of votes. For obvious reason, the choice of No Union
should not be included in the run-off election. Notice of the
conduct of a run-off election should be posted by the Election
Officer at least five (5) days before the actual date thereof.144
3. QUALIFICATION OF VOTERS IN THE RUN-OFF
ELECTION.
The same voters list used in the certification election or
consent election should be used in the run-off election. The

ballots in the run-off election should provide as choices the


unions receiving the highest and second highest number of
the votes cast. The labor union receiving the greater number
of valid votes cast should be certified as the winner.145
(d)
RE-RUN ELECTION
1. RULE ON RE-RUN ELECTION, NOT FOUND IN THE
LABOR CODE.
This mode of choosing the sole and exclusive
bargaining unit is not expressly provided in the Labor Code
or in its implementing rules. The circumstances which would
justify the holding of a re-run election are not set out in the
law.
2. JUSTIFICATIONS FOR HOLDING OF RE-RUN
ELECTION.
A re-run election may be justified if certain
irregularities have been committed during the conduct of the
certification election such as, inter alia,disenfranchisement
of the voters, lack of secrecy in the voting,
fraud or bribery, in which case, the certification election
should be invalidated. Such invalidation would necessitate
the conduct of a re-run election among the contending
unions to determine the true will and desire of the employeeelectorates.
3. RELEVANT JURISPRUDENCE.
Philippine jurisprudence has not exactly referred to
the holding of another certification election as re-run
election but the situations for such re-holding of the
certification election as described in some cases, may be
deemed descriptive of this term.
Confederation of Citizens Labor Unions v.
Noriel. 146 - In ordering, inter alia, the conduct of another runoff certification election inside the premises of the company,
the Supreme Court disposed as follows:
We hold that the certification election is
invalid because of certain irregularities such as
that (1) the workers on the night shift (ten p.m.
to six a.m.) and some of those in the afternoon
shift were not able to vote, so much so that out
of 1,010 voters only 692 voted and about 318
failed to vote (p. 88, Rollo) ; (2) the secrecy of
the ballot was not safeguarded; (3) the election
supervisors were remiss in their duties and
were apparently "intimidated" by a union
representative and (4) the participating unions
were overzealous in wooing the employees to
vote in their favor by resorting to such tactics
as giving free tricycle rides and T-shirts.
The purpose of a certification election is to
give the employees "true representation in their
collective bargaining with an employer" (51
C.J.S. 969) . That purpose was not achieved in
the run-off election because many employees
or union members were not able to
vote and the employer, through apathy or
deliberate intent, did not render assistance in
the holding of the election.147
National Federation of Labor v. The Secretary of
Labor. 148 This involves a certification election among the
rank-and-file employees of the Hijo Plantation, Inc. resulting
in the choice of no union. In ordering a re-run election, the
Supreme Court declared:
xxx As this Court stressed in LVN Pictures,
Inc. v. Phil. Musicians Guild,149 it is essential
that the employees must be accorded an
opportunity to freely and intelligently determine
which labor organization shall act in their
behalf. The workers in this case were denied

56

this opportunity. Not only were a substantial


number of them disfranchised, there were, in
addition,
allegations
of fraud and other
irregularities which put in question the integrity
of the election. Workers wrote letters and made
complaints protesting the conduct of the
election. The Report of Med-Arbiter Pura who
investigated these allegations found the
allegations of fraud and irregularities to be true.
150

In one case this Court invalidated a


certification election upon a showing of
disfranchisement, lack of secrecy in the voting
and bribery. We hold the same in this case. The
workers right to self-organization as enshrined
in both the Constitution and Labor Code would
be rendered nugatory if their right to choose
their collective bargaining representative were
denied. Indeed, the policy of the Labor Code
favors the holding of a certification election as
the most conclusive way of choosing the labor
organization to represent workers in a
collective bargaining unit. In case of doubt, the
doubt should be resolved in favor of the holding
of a certification election. 151
4. RE-RUN ELECTION VS. FAILURE OF ELECTION.
Re-run election should be distinguished from
a failure of election. In re-run election, there is a valid
certification election but because of certain circumstances,
the election is nullified and another one is ordered to truly
reflect the will and sentiment of the electorate-employees in
the choice of their bargaining representative.
In failure of election, the number of votes cast in
the certification or consent election is less than the majority
of the number of eligible voters and there are no challenged
votes that could materially change the results
thereof.152 Consequently, a motion for the immediate holding
of another certification or consent election within six (6)
months from the date of declaration of the failure of election
may be filed. Within twenty-four (24) hours from receipt of
such motion, the Election Officer should immediately
schedule the conduct of such election within fifteen (15) days
from receipt of the motion and cause the posting of the
notice of certification election at least ten (10) days prior to
the scheduled date of election in two (2) most conspicuous
places in the establishment. The same guidelines and list of
voters shall be used in the election.153

separate and distinct process from certification election and


has nothing to do with the import and effect of the latter.155
By law, as a result of the consent election, the right
to be the exclusive representative of all the employees in an
appropriate collective bargaining unit is vested in the labor
union designated or selected for such purpose by the
majority of the employees in the unit concerned.156
3. CONSENT ELECTION MAY BE AGREED UPON BY THE
PARTIES TO A PENDING CERTIFICATION ELECTION
CASE.
During the preliminary conference that the MedArbiter is required to conduct in a certification election
proceeding, he is required to determine if the contending
labor unions are willing to submit themselves to a consent
election. In case the contending unions agree to a consent
election, the Med-Arbiter is not allowed to issue a formal
order calling for the conduct of a certification election.
Instead, he should enter the fact of the agreement on the
conduct of the conent election in the minutes of the hearing
which should then be signed by the parties and attested to
by the Med-Arbiter.157
4. HOLDING OF A CONSENT ELECTION DURING THE
PENDENCY OF A PETITION FOR CERTIFICATION
ELECTION.
Where a petition for certification election has been
filed and upon the intercession of the Med-Arbiter, the parties
mutually agree to hold a consent election, the results thereof
shall constitute a bar to the holding of a certification election
for one (1) year from the holding of such consent election.
Where an appeal has been filed from the results of the
consent election, the running of the one-year period
is suspended until the decision on appeal has become final
and executory.158
5. HOLDING OF A CONSENT ELECTION WHERE THERE
IS NO PETITION FOR CERTIFICATION ELECTION
FILED.
Where no petition for certification election is filed
but the parties themselves agree to hold a consent election
with the intercession of the DOLE Regional Office, the
results thereof shall constitute a bar to the filing of a petition
for certification election.159
4.
OTHER RELEVANT MATTERS
(a)

(e)
CONSENT ELECTION
1. CONSENT ELECTION, MEANING.
A consent election refers to the process of
determining through secret ballot the sole and exclusive
representative of the employees in an appropriate bargaining
unit for purposes of collective bargaining and negotiation. It
is voluntarily agreed upon by the parties, with or without the
intervention of the DOLE.154

AFFILIATION AND DISAFFILIATION OF THE


LOCAL UNION FROM THE MOTHER UNION
1. AFFILIATION.
a. Mother union.
In relation to an affiliate, the federation or national
union is commonly known as the mother union. This term
is not found in law but oftentimes, the Supreme Court uses
this term to describe a federation or a national union.
b. Affiliate.
An affiliate refers to:
(1)
An independent union affiliated
with
a
federation or a national union; or
(2) A local chapter160 which has been subsequently
granted independent registration but did not
disaffiliate from the federation or national union
which created it.161
c. A chartered local/local chapter, not an

2. CONSENT ELECTION VS. CERTIFICATION ELECTION.


A consent electionis one mutually agreed upon by
the parties, with or without the intervention of the DOLE, its
purpose being merely to determine the issue of majority
representation of all the workers in an appropriate collective
bargaining unit; while a certification election is one which is
ordered by the DOLE. The purpose for both electoral
exercise is the same, i.e., to determine the sole and
exclusive bargaining agent of all the employees in an
appropriate bargaining unit for the purpose of collective
bargaining. From the very nature of consent election, it is a

affiliate.
Based on the above definition and description,
technically, a local chapter created through the mode of
chartering by a mother union162 under Article 234-A of the

56

Labor Code, cannot be properly called an affiliate if it has


not acquired any independent registration of its own.
d. Purpose of affiliation.
The purpose is to further strengthen the collective
bargaining leverage of the affiliate. No doubt, the purpose of
affiliation by a local union with a mother union (federation or
national union) is to increase by collective action its
bargaining power in respect of the terms and conditions of
labor.163
e. Contract of agency.
The mother union,164 acting for and in behalf of its
affiliate, has the status of an agent while the local union
remains the principal the basic unit of the association free
to serve the common interest of all its members subject only
to the restraints imposed by the constitution and by-laws of
the association.165
f. Some principles on affiliation.
Independent legal personality of an affiliate
union is not affected by affiliation.166
The affiliate union is a separate and distinct
voluntary association owing its creation to the will
of its members. It does not give the mother
federation the license to act independently of the
affiliate union.167
The fact that the local chapter is not a legitimate
labor organization does not affect the principalagent relationship.168
Affiliate union becomes subject of the rules of
the federation or national union.169
The appendage of the acronym of the
federation or national union after the name of the
affiliate union in the registration with the DOLE
does not change the principal-agent relationship
between them. Such inclusion of the acronym is
merely to indicate that the local union is affiliated
with the federation or national union at the time of
the registration. It does not mean that the affiliate
union cannot independently stand on its own.170
The fact that it was the federation which
negotiated the CBA does not make it the
principal and the affiliate or local union which
it represents, the agent.171
However, if it was the federation which
negotiated all the CBAs in the establishment, the
local chapter cannot negotiate the renewal of the
CBA without the consent and participation of the
federation.172
The fact that it was the name of the
federation that was particularly mentioned as the
bargaining party in the CBA without specifying the
local union does not have any effect on the right
of the federation to participate in the bargaining
process.173
It is the local union and not the
federation/national union with which it is affiliated
that has the right to administer and enforce the
CBA with the employer.174
In case of illegal strike, the local union, not
the mother union, is liable for damages.175
2. DISAFFILIATION.
a. Right to disaffiliate.

The right of the affiliate union to disaffiliate from its


mother federation or national union is a constitutionallyguaranteed right which may be invoked by the former at any
time. It is axiomatic that an affiliate union is a separate and
voluntary association free to serve the interest of all its
members - consistent with the freedom of association
guaranteed in the Constitution.176
b. Disaffiliation of independently-registered
union and local chapter, distinguished.
The disaffiliation of an independently-registered
union does not affect its legitimate status as a labor
organization. However, the same thing may not be said of a
local chapter which has no independent registration since its
creation was effected pursuant to the charter certificate
issued to it by the federation or national union. 177 Once a
local chapter disaffiliates from the federation or national
union which created it, it ceases to be entitled to the rights
and privileges granted to a legitimate labor organization.
Hence, it cannot, by itself, file a petition for certification
election.178
c. Some principles on disaffiliation.
Disaffiliation does not divest an affiliate union
of its legal personality.179
Disaffiliation of an affiliate union is not an act of
disloyalty.180
Disaffiliation for purposes of forming a new
union does not terminate the status of the
members thereof as employees of the
company. By said act of disaffiliation, the
employees who are members of the local union
did not form a new union but merely exercised
their right to register their local union. The local
union is free to disaffiliate from its mother
union.181
Disaffiliation
should
be
approved
the majority of the union members.182

by

Disaffiliation terminates the right to checkoff federation dues. The obligation to check-off
federation dues is terminated with the valid
disaffiliation of the affiliate union from the
federation with which it was previously
affiliated.183
Disaffiliation does not affect the CBA. It does
not operate to amend it or change the
administration of the contract.184
As a general rule, a labor union may disaffiliate
from the mother union to form an independent
union only during the 60-day freedom period
prior to the expiration of the existing CBA. It is
not, however, legally impossible to effect the
disaffiliation prior to the freedom period,
provided that the same is approved by the
majority of the members of the bargaining unit.
Under this situation, the CBA continues to bind
the members of the new or disaffiliated and
independent union up to the expiration
thereof.185
Disaffiliating from the federation and entering
into a CBA with the employer does not
constitute an unfair labor practice.186
Disaffiliation is not a violation of the union
security clause.187
Election protest involving both the mother
federation and local union is not a bar to
disaffiliation.188
The issue of affiliation or disaffiliation is an
inter-union conflict the jurisdiction of which

56

properly lies with the Bureau of Labor Relations


IBLR) and not with the Labor Arbiter.189
(i)
SUBSTITUTIONARY DOCTRINE
1. CHANGE OF BARGAINING
DURING THE LIFE OF A CBA.

REPRESENTATIVE

Based
on
Philippine
jurisprudence,
the
substitutionary doctrine was conceived during the time when
the law has not fixed the lifetime of the CBA as is now
provided in Article 253-A of the Labor Code. The uncertainty
on when and how should the majority status of the
bargaining agent may be challenged by way of a certification
election was thus the lingering problem hounding the labor
front.
Thus, in General Maritime Stevedores Union of
the Philippines v. South Sea Shipping Line, 190 the July 28,
1957 CBA between respondent company and the United
Seamens Union of the Philippines (USUP) , has been
continuously automatically renewed after every two years so
much so that at the time of the writing of the High Courts
decision in this case, it would appear that the CBA will still be
effective up to July 28, 1961, that is to say, about a year
therefrom. According to the claim of the petitioners, the
bargaining agreement of July 28, 1957 was but a renewal of
the same or similar agreement of July 1955, so that the
bargaining agreement has been in existence for about five
years, which is too long a period within which a certification
election has not been held. And because of the automatic
renewal clause provided in the CBA, the time when the
challenge should be made continues to pose a problem. This
led the Supreme Court to analyze cases decided by the
National Labor Relations Board (NLRB) of the United States,
which was the equivalent at that time of the Court of
Industrial Relations (CIR) and the present-day National
Labor Relations Commission (NLRC) . It thus concluded:
After reviewing the cases decided by the
NLRB of the United States and our own cases,
we have arrived at the conclusion that it is
reasonable and proper that when there is a
bargaining contract for more than a year, it is
too early to hold a certification election within a
year from the effectivity of said bargaining
agreement; also that a two-year bargaining
contract is not too long for the purpose of
barring a certification election. For this purpose,
a bargaining agreement may run for three,
even four years, but in such case, it is equally
advisable that to decide whether or not within
those three or four years, a certification election
should not be held, may well be left to the
sound discretion of the CIR, considering the
conditions involved in the case, particularly, the
terms and conditions of the bargaining contract.
We also hold that where the bargaining
contract is to run for more than two years,
the principle of substitution may well be
adopted and enforced by the CIR to the effect
that after two years of the life of bargaining
agreement, a certification election may be
allowed by the CIR; that if a bargaining agent
other than the union or organization that
executed the contract, is elected, said new
agent would have to respect said contract, but
that it may bargain with the management for
the shortening of the life of the contract if it
considers it too long, or refuse to renew the
contract pursuant to an automatic renewal
clause.191

In Benguet Consolidated, Inc. v. BCI Employees


& Workers Union, (PAFLU) ,192 a CBA was concluded
on June 23, 1959 between petitioner company and BenguetBalatoc Workers Union (BBWU) , effective for a period of 41/2 years, or from June 23, 1959 to December 23, 1963. It
likewise embodied a No-Strike, No-Lockout clause. About
three years later, or on April 6, 1962, before the expiration of
the CBA, a certification election was conducted by the
Department of Labor among all the rank-and-file employees
of petitioner in the same collective bargaining units. Another
union, herein respondent BCI Employees & Workers UnionPAFLU (UNION-PAFLU) obtained more than 50% of the total
number of votes, defeating BBWU, and accordingly, the CIR,
on August 18, 1962, certified UNION-PAFLU as the sole
and exclusive collective bargaining agent of all employees of
petitioner company. One of the issues raised in the instant
case is whether the CBA executed between Benguet and
BBWU on June 23, 1959 and effective until December 23,
1963 automatically
binds
UNION-PAFLU
upon
its
certification, on August 18, 1962, as sole bargaining
representative of all employees of petitioner.
Petitioner invoked the afore-quoted ruling
in General Maritime193 in support of its contention that the
CBA then existing was binding on the new bargaining agent
UNION PAFLU. The Supreme Court, however, ruled that
such invocation is not persuasive because the above-quoted
pronouncement in General Maritime was obiter dictum. The
only issue in said case was whether a CBA which had
practically run for five (5) years constituted a bar to
certification proceedings. It was held that it did not and
accordingly directed the court a quo to order certification
election. With that, nothing more was necessary for the
disposition of the case. Moreover, the pronouncement
adverted to was rather premature. The possible certification
of a union different from that which signed the bargaining
contract was a mere contingency then since the elections
were still to be held. Clearly, the Court was not called upon to
rule on the possible effects of such proceedings on the
bargaining agreement. It further held:
But worse, BENGUETs reliance upon
the Principle
of
Substitution is
totally
misplaced. This principle, formulated by the
NLRB as its initial compromise solution to the
problem facing it when there occurs a shift in
employees union allegiance after the execution
of a bargaining contract with their employer,
merely states that even during the effectivity
of a collective bargaining agreement
executed between employer and employees
thru their agent, the employees can change
said agent but the contract continues to
bind them up to its expiration date. They
may bargain however for the shortening of
said expiration date.
In
formulating
the substitutionary
doctrine, the only consideration involved was
the employees interest in the existing
bargaining agreement. The agents interest
never entered the picture. In fact, the
justification for said doctrine was:
. . .that the majority of the
employees, as an entity under the
statute, is the true party in interest
to the contract, holding rights
through the agency of the union
representative. Thus, any exclusive
interest claimed by the agent is
defeasible at the will of the
principal. . .
Stated otherwise, the substitutionary
doctrine only provides that the employees

56

cannot revoke the validly executed


collective bargaining contract with their
employer by the simple expedient of
changing their bargaining agent. And it is in
the light of this that the phrase said new
agent would have to respect said
contract must be understood. It only means
that the employees, thru their new
bargaining agent, cannot renege on their
collective bargaining contract, except of
course to negotiate with management for
the shortening thereof. 194

the sole and exclusive bargaining agent which negotiated it


may be questioned as when there exist extraordinary
circumstances which affect its standing in terms of
membership, structure and others as may have been
occasioned by union schism or split which completely
changes the situation of the employer and the bargaining
agent. A petition for certification election may thus be filed
to determine which of the unions has the majority status.
The union certified as the new sole and exclusive
bargaining agent will thus substitute the previous one as a
party to the existing CBA. This is allowed under the same
substitutionary doctrine.

2. EFFECT OF SUBSTITUTIONARY DOCTRINE ON THE


DEPOSED UNIONS PERSONAL UNDERTAKINGS.
In case of change of bargaining agent under the
substitutionary doctrine, the new bargaining agent is not
bound by the personal undertakings of the deposed union
like the no strike, no lockout clause in a CBA which is the
personal undertaking of the bargaining agent which
negotiated it. Thus in Benguet, it was pronounced:
The substitutionary
doctrine,
therefore, cannot be invoked to support the
contention that a newly certified collective
bargaining agent automatically assumes all
the personal undertakings like the nostrike stipulation here in the collective
bargaining agreement made by the deposed
union. When BBWU bound itself and its
officers not to strike, it could not have validly
bound also all the other rival unions existing in
the bargaining units in question. BBWU was
the agent of the employees, not of the other
unions
which
possess
distinct
personalities. To
consider
UNION
contractually bound to the no-strike stipulation
would therefore violate the legal maxim
that res inter alios acta alios nec prodest
nec nocet.
Of course, UNION, as the newly certified
bargaining agent, could always voluntarily
assume all the personal undertakings made by
the displaced agent. But as the lower court
found, there was no showing at all that, prior to
the strike, UNION formally adopted the existing
CONTRACT as its own and assumed all the
liabilities imposed by the same upon BBWU.
3. SOME PRINCIPLES ON SUBSTITUTIONARY
DOCTRINE.
The substitutionary doctrine cannot be invoked to
subvert an existing CBA, in derogation of the principle of
freedom of contract. The substitution of a bargaining
agent cannot be allowed if the purpose is to subvert an
existing CBA freely entered into by the parties. Such act
cannot be sanctioned in law or in equity as it is in
derogation of the principle underlying the freedom of
contract and good faith in contractual relations.195
The substitutionary doctrine is applicable also to a
situation where the local union, which was created
through the process of chartering 196 by the mother
union,197 disaffiliates from the latter after it secured an
independent registration. The local union will thus be
substituted to that of the federation which negotiated the
CBA as in Elisco-Elirol Labor Union [NAFLU] v.
Noriel,198 where petitioner union was created through
the mode of chartering by the National Federation of
Labor Unions (NAFLU) and later, it secured its
independent registration with the BLR and disaffiliated
with NAFLU by virtue of a resolution by its general
membership.
Substitutionary doctrine in cases of union schism or
split. During the lifetime of the CBA, the majority status of

(b)
UNION DUES AND SPECIAL ASSESSMENTS199
(i)
REQUIREMENTS FOR VALIDITY
1. RIGHT OF UNION
ASSESSMENTS.

TO

COLLECT

DUES

AND

All unions are authorized to collect reasonable


amounts of:
1. membership fees;
2. union dues;
3. assessments;
4. fines;
5. contributions for labor education and research,
mutual death and hospitalization benefits,
welfare fund, strike fund and credit and
cooperative undertakings;200 and
6. agency fees.201
2. REQUISITES FOR VALIDITY OF UNION DUES AND
SPECIAL ASSESSMENTS.
The following requisites must concur in order for
union dues and special assessments for the unions
incidental expenses, attorneys fees and representation
expenses to be valid, namely:
(a) Authorization by a written resolution of the
majority of all the members at a general
membership meeting duly called for the
purpose;
(b) Secretarys record of the minutes of said
meeting; and
(c) Individual written authorizations for check-off
duly signed by the employees concerned.202
3. ASSESSMENT FOR ATTORNEYS FEES,
NEGOTIATION FEES AND SIMILAR CHARGES.
As far as attorneys fees, negotiation fees or similar
charges are concerned, the rule is that no such attorneys
fees, negotiation fees or similar charges of any kind arising
from the negotiation or conclusion of the CBA shall be
imposed on any individual member of the contracting union.
Such fees may be charged only against the union funds in an
amount to be agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the contrary is
deemed null and void.203 Clearly, what is prohibited is the
payment of attorneys fees when it is effected through forced
contributions from the workers from their own funds as
distinguished from the union funds.204
4. CHECK-OFF OF UNION DUES AND ASSESSMENTS.
Check-off means a method of deducting from the
employees pay at prescribed periods, any amount due for
fees, fines or assessments.205 It is a process or device
whereby the employer, on agreement with the union
recognized as the proper bargaining representative, or on
prior authorization from its employees, deducts union dues

56

and assessments from the latters wages and remits them


directly to the union.206
5. INDIVIDUAL
REQUIRED.

WRITTEN

AUTHORIZATION,

WHEN

The law strictly prohibits the check-off from any


amount due an employee who is a member of the union, of
any union dues, special assessment, attorneys fees,
negotiation fees or any other extraordinary fees other than
for mandatory activities under the Labor Code, without the
individual written authorization duly signed by the employee.
Such authorization must specifically state the amount,
purpose and beneficiary of the deduction.207 The purpose of
the individual written authorization is to protect the
employees from unwarranted practices that diminish their
compensation without their knowledge or consent.208
6. INDIVIDUAL WRITTEN AUTHORIZATION, WHEN NOT
REQUIRED.
In the following
authorization is not required:

cases,

individual

written

a. Assessment from non-members of the bargaining


agent of agency fees which should be
equivalent to the dues and other fees paid by
members of the recognized bargaining agent, if
such non-members accept the benefits under
the CBA.209
b. Deductions for fees for mandatory activities such
as labor relations seminars and labor education
activities.210
c. Check-off for union service fees authorized by
law.211
d. Deductions for withholding tax mandated under
the National Internal Revenue Code.
e. Deductions for withholding of wages because of
employees debt to the employer which is
already due.212
f. Deductions made pursuant to a judgment against
the worker under circumstances where the
wages may be the subject of attachment or
execution but only for debts incurred for food,
clothing, shelter and medical attendance.213
g. Deductions from wages ordered by the court.
h. Deductions authorized by law such as for
premiums for PhilHealth, social security, PagIBIG, employees compensation and the like.
7. SOME PRINCIPLES
ASSESSMENTS.

ON

UNION

DUES

AND

Check-off for a special assessment is not valid after the


withdrawal of the individual written authorizations.214
Unlike in authorization for union dues and assessments,
disauthorization does not require that it be written
individually. The fact that the disauthorizations were
collective in form consisting of randomly procured
signatures and under loose sheets of paper, is of no
moment for the simple reason that the documents
containing the disauthorizations have the signatures of
the union members. Such retractions were valid. There
is nothing in the law which requires that the
disauthorizations must be in individual form.215
The right of the incumbent bargaining representative to
check off and to collect dues is not affected by the
pendency of a representation case or an intra-union
dispute.216
Approval of the union dues and assessments by the
majority of all the members of the union is
required.217 The Labor Code218 and the Rules to
Implement the Labor Code219 disallow a deduction for

special assessment which was passed by a mere board


resolution of the directors, and not by the majority of all
the members of the union. Also, a written authorization
duly signed individually by the employees concerned is
a conditionsine qua non therefor. Employees are
protected by law from unwarranted practices that have
for their object the diminution of the hard-earned
compensation due them.
(c)
AGENCY FEES220
(i)
REQUISITES FOR ASSESSMENT
1. NATURE OF AGENCY FEE - NEITHER CONTRACTUAL
NOR STATUTORY BUT QUASI-CONTRACTUAL.
The bargaining agent which successfully negotiated
the CBA with the employer is given the right to collect a
reasonable fee, called agency fee from its non-members who are employees covered by the bargaining unit being
represented by the bargaining agent - in case
they accept the benefits under the CBA. It is called agency
fees because by availing of the benefits of the CBA, they, in
effect, recognize and accept the bargaining union as their
agent as well.
According to Holy Cross of Davao College, Inc. v.
Joaquin,221 payment of agency fees to the certified collective
bargaining agent which successfully negotiated the CBA is
but a reasonable requirement recognized by law. The
collection of agency fees in an amount equivalent to the
union dues and fees, from employees who are not
bargaining union members, is recognized by Article 248(e) of
the Labor Code. The employees acceptance of benefits
resulting from a CBA justifies the deduction of agency fees
from his pay and the unions entitlement thereto. In this
aspect, the legal basis of the union's right to agency fees
is neither contractual nor statutory, but quasi-contractual,
deriving from the established principle that non-bargaining
union employees may not unjustly enrich themselves by
benefiting from employment conditions negotiated by the
bargaining agent.
2. A NON-BARGAINING UNION MEMBER HAS THE
RIGHT TO ACCEPT OR NOT THE BENEFITS OF THE
CBA.
There is no law that compels a non-bargaining
union member to accept the benefits provided in the CBA.
He has the freedom to choose between accepting and
rejecting the CBA itself by not accepting any of the benefits
flowing therefrom. Consequently, if a non-bargaining union
member does not accept or refuses to avail of the CBAbased benefits, he is not under any obligation to pay the
agency fees since, in effect, he does not give recognition to
the status of the bargaining union as his agent.
3. LIMITATION ON THE AMOUNT OF AGENCY FEE.
The bargaining union cannot capriciously fix the
amount of agency fees it may collect from its non-members.
Article 248(e) of the Labor Code expressly sets forth the
limitation in fixing the amount of the agency fees, thus:
(1) It should be reasonable in amount; and
(2) It should be equivalent to the dues and other
fees paid by members of the recognized
collective bargaining agent.222
Thus, any agency fee collected in excess of this
limitation is a nullity.
4. NON-MEMBERS OF THE CERTIFIED BARGAINING
AGENT NEED NOT BECOME MEMBERS THEREOF.

56

The employees who are not members of the


certified bargaining agent which successfully concluded the
CBA are not required to become members of the latter. Their
acceptance of the benefits flowing from the CBA and their act
of paying the agency fees do not make them members
thereof.
5. CHECK-OFF OF AGENCY FEES.
Check-off of agency fees is a process or device
whereby the employer, upon agreement with the bargaining
union, deducts agency feesfrom the wages of nonbargaining union members who avail of the benefits from the
CBA and remits them directly to the bargaining union.223

When stipulated in a CBA, or authorized in writing by the


employees concerned - the Labor Code and its Implementing
Rules recognize it to be the duty of the employer to deduct
sums equivalent to the amount of union dues from the
employees' wages for direct remittance to the union, in order
to facilitate the collection of funds vital to the role of the union
as representative of the employees in the bargaining unit if
not, indeed, to its very existence.

------------oOo-----------Chapter Seven

6. ACCRUAL OF RIGHT OF BARGAINING UNION TO


DEMAND CHECK-OFF OF AGENCY FEES.
The right of the bargaining union to demand checkoff of agency fees accrues from the moment the nonbargaining union member accepts and receives
the benefits from the CBA. This is the operative fact that
would trigger such liability.224
7. NO INDIVIDUAL WRITTEN AUTHORIZATION BY NONBARGAINING UNION MEMBERS REQUIRED.
To effect the check-off of agency fees, no individual
written authorization from the non-bargaining union members
who accept the benefits resulting from the CBA is
necessary.225
8. EMPLOYERS DUTY TO CHECK-OFF AGENCY FEES.
It is the duty of the employer to deduct or checkoff the sum equivalent to the amount of agency fees from
the non-bargaining union members' wages for direct
remittance to the bargaining union. 226
9. THE NON-BARGAINING UNION MEMBERS WHO ARE
PAYING AGENCY FEES TO THE BARGAINING UNION
REMAIN LIABLE TO PAY UNION DUES TO THEIR OWN
UNION.
The fact that the non-members of the bargaining
union who are members of the minority union are paying
agency fees to the former does not free them from their
obligation as members to continue paying their union dues
and special assessments to their union (minority union) .
There is no law that puts a stop to such obligation simply
because their union failed to be recognized or certified as the
collective bargaining agent. Union dues are required for the
continued existence and viability of their union. Hence, they
are obligated to pay two (2) kinds of dues:
(1) Union dues and special assessments to their
own union; and
(2) Agency fee to the bargaining agent.
This is clear from a reading of Article 241 227 which
does not qualify that the right to collect union dues and
assessments, on the part of the union, and the obligation to
pay the same, on the part of its members, are extinguished
the moment the union is unsuccessful in its quest to become
the sole and exclusive bargaining agent of the employees in
the bargaining unit where it seeks to operate.
10. MINORITY UNION CANNOT DEMAND FROM THE
EMPLOYER TO GRANT IT THE RIGHT TO CHECKOFF OF UNION DUES AND ASSESSMENTS FROM
THEIR MEMBERS.
The obligation on the part of the employer to
undertake the duty to check-off union dues and special
assessments holds and applies only to the bargaining agent
and not to any other union/s (called Minority Union/s) . This
is clear from the manner by which the Supreme Court
described check-off in the case of Holy Cross of Davao
College, Inc. v. Joaquin,228 that it is on the basis of the
agreement with the union which is recognized as the proper
bargaining representative that the employer is obligated to
perform its task of checking off union dues or agency fees.

LABOR RELATIONS LAW


TOPICS PER SYLLABUS
B. Right to collective bargaining
1. Duty to bargain collectively
a) When there is absence of a CBA
b) When there is a CBA
2. Collective Bargaining Agreement (CBA)
a) Mandatory provisions of CBA
(i) Grievance procedure
(ii) Voluntary arbitration
(iii) No strike-no lockout clause
(iv) Labor management council
b) Duration
(i) For economic provisions
(ii) For non-economic provisions
(iii) Freedom period
3. Union Security
a) Union security clauses; closed shop, union
shop, maintenance of membership shop, etc.
b) Check-off; union dues, agency fees
4. Unfair Labor Practice in collective bargaining
a) Bargaining in bad faith
b) Refusal to bargain
c) Individual bargaining
d) Blue sky bargaining
e) Surface bargaining
5. Unfair Labor Practice (ULP)
a) Nature of ULP
b) ULP of employers
c) ULP of labor organizations

B.
RIGHT TO COLLECTIVE BARGAINING
1. CONSTITUTIONAL FOUNDATION.
The right of all workers to collective bargaining and
negotiations

is

right

duly

guaranteed

under

the

Constitution. Thus, it is expressly provided in Section 3,


Article XIII thereof that the State, among others, shall
guarantee the rights of all workers to collective bargaining
and negotiations.
2. STATE POLICY.
It is the policy of the State to promote and
emphasize the primacy of free and responsible exercise of
the right to self-organization and collective bargaining, either
through single enterprise level negotiations or through the
creation of a mechanism by which different employers and

56

recognized or certified labor unions in their establishments


bargain collectively.1
1.
DUTY TO BARGAIN COLLECTIVELY2
1. MEANING OF DUTY TO BARGAIN COLLECTIVELY.
The duty to bargain collectively means the
performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of
work and all other terms and conditions of employment,
including proposals for adjusting any grievances or questions
arising under such agreement and executing a contract
incorporating such agreements if requested by either party
but such duty does not compel any party to agree to a
proposal or to make any concession.3
The duty does not compel any party to agree
blindly to a proposal nor to make concession. While the
law imposes on both the employer and the bargaining union
the mutual duty to bargain collectively, the employer is not
under any legal obligation to initiate collective bargaining
negotiations.4
2. ULTIMATE GOAL IS TO CONCLUDE A CBA.
Obviously, the ultimate purpose of collective
bargaining is to reach an agreement resulting in a contract
binding on the parties; but the failure to reach an agreement
after negotiations continued for a reasonable period does not
establish a lack of good faith. The statutes invite and
contemplate a collective bargaining contract, but they do not
compel one. The duty to bargain does not include the
obligation to reach an agreement.5
3. BARGAINING, NOT EQUIVALENT TO ADVERSARIAL
LITIGATION.
Caltex Refinery Employees Association [CREA]
v. Brillantes. 6 - 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.
4. TWO (2) SITUATIONS CONTEMPLATED.
The duty to bargain collectively involves two (2)
situations, namely:
1. Duty to bargain collectively in the absence of a
CBA under Article 251 of the Labor Code.7
2. Duty to bargain collectively when there is an
existing CBA under Article 253 of the Labor
Code.8
(a)
DUTY TO BARGAIN COLLECTIVELY
WHEN THERE IS ABSENCE OF A CBA9
1. HOW DUTY SHOULD BE DISCHARGED WHEN THERE
IS NO CBA YET.
The duty to bargain collectively when there has yet
been no CBA in the bargaining unit where the bargaining
agent seeks to operate should be complied with in the
following order:
First, in accordance with any agreement or
voluntary arrangement providing for a more expeditious
manner of collective bargaining; and
Secondly, in its absence, in accordance with the
provisions of the Labor Code, referring to Article 250 thereof
which lays down the procedure in collective bargaining.10
2. RATIONALE.

Clearly, the law gives utmost premium and extends


due respect to the voluntary arrangement between the
parties on how they will discharge their respective duties to
bargain collectively before resort to the procedure laid down
in the Labor Code may be made. In other words, it is only
when there is no such voluntary arrangement that the
procedure laid down in Article 250 of the Labor Code should
be followed. What is essentially required, however, is that the
employer and the bargaining union should promptly meet,
convene and confer in good faith for collective bargaining
purposes.
(b)
DUTY TO BARGAIN COLLECTIVELY
WHEN THERE IS A CBA11
1. CONCEPT.
When there is a collective bargaining agreement,
the duty to bargain collectively shall mean that neither party
shall terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to terminate
or modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep
the status quo and to continue in full force and effect the
terms and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by
the parties.12
2. FREEDOM PERIOD.
The last sixty (60) days of the 5-year lifetime of a
CBA immediately prior to its expiration is called the freedom
period. It is denominated as such because it is the only
time when the law allows the parties to freely serve a notice
to terminate, alter or modify the existing CBA. It is also the
time when the majority status of the bargaining agent may be
challenged by another union by filing the appropriate petition
for certification election.13
3. AUTOMATIC RENEWAL CLAUSE.
a.

Automatic
renewal
clause
incorporated in all CBAs.

deemed

Pending the renewal of the CBA, the parties are


bound to keep the status quo and to treat the terms and
conditions embodied therein still in full force and effect during
the 60-day freedom period and/or until a new agreement is
negotiated and ultimately concluded and reached by the
parties. This principle is otherwise known as the automatic
renewal clause which is mandated by law and therefore
deemed incorporated in all CBAs.14
For its part, the employer cannot discontinue the
grant of the benefits embodied in the CBA which just expired
as it is duty-bound to maintain the status quo by continuing
to give the same benefits until a renewal thereof is reached
by the parties. On the part of the union, it has to observe and
continue to abide by its undertakings and commitments
under the expired CBA until the same is renewed.
For example, the union security clause must
continue to be in effect even after the expiration of the CBA.
Otherwise, there would be a gap during which no agreement
would govern from the time the old agreement expired to the
time a new agreement is concluded by the parties.15
b. Some principles.
If unchallenged, the majority status of the
existing
bargaining
agent
should
be
respected. A petition for certification election
challenging the majority status of the existing
bargaining agent should be filed within
and notbefore or after - the 60-day freedom
period. Upon the expiration of the said period and
no petition for certification election is filed by a

56

challenging union, the employer is duty-bound to


continue to recognize the majority status of the
incumbent bargaining agent.16
All the terms and conditions of the CBA are
deemed automatically renewed. The law does
not provide for any exception or qualification on
which economic provisions of the existing CBA
are to retain their force and effect. Therefore, the
automatic renewal of its provisions must be
understood as encompassing all the terms and
conditions of the CBA. 17

1. Employer-employee relationship must exist


between the employer and the members of the
bargaining unit being represented by the
bargaining agent;26
2. The bargaining agent must have the majority
support of the members of the bargaining unit
established through the modes sanctioned by
law;27 and
3. A lawful demand to bargain is made in
accordance with law.28
3. SOME PRINCIPLES ON CBA.

4. KIOK LOY DOCTRINE.


This doctrine is based on the ruling In Kiok Loy v.
NLRC, where the petitioner, Sweden Ice Cream Plant,
refused to submit any counter-proposal to the CBA proposed
by its employees certified bargaining agent. The High Court
ruled that the employer had thereby lost its right to bargain
the terms and conditions of the CBA. Thus, the CBA
proposed by the union was imposed lock, stock and barrel
on the erring company.
18

The Kiok Loy case epitomizes the classic case of


negotiating a CBA in bad faith consisting of the employers
refusal to bargain with the collective bargaining agent by
ignoring all notices for negotiations and requests for counterproposals. Such refusal to send a counter-proposal to the
union and to bargain on the economic terms of the CBA
constitutes an unfair labor practice under Article 248(g) 19 of
the Labor Code.20
5. OTHER CASES AFTER KIOK LOY.
The ruling that the CBA proposed by the bargaining
union may be adopted as the new CBA if employer refused
to negotiate has been reiterated in the following cases:

CBA is the law between the parties during its


lifetime and thus must be complied with in good
faith.29 It lays down the norms of conduct between the
parties and compliance therewith is mandated by the
express policy of the law.30 It incorporates the
agreement reached after negotiations between the
employer and the bargaining agent with respect to the
terms and conditions of employment.31
Being the law between the parties, any violation
thereof can be subject of redress in court. 32
Non-impairment of obligations of contract. A
contract is the law between the parties and courts have
no choice but to enforce such contract so long as it is
not contrary to law, morals, good customs or public
policy. Otherwise, courts would be interfering with the
freedom of contract of the parties. Simply put, courts
cannot stipulate for the parties or amend the latters
agreement, for to do so would be to alter the real
intention of the contracting parties. The function of
courts is to give force and effect to the intention of the
parties.33

1. Divine Word University of Tacloban v.


Secretary of Labor and Employment, 21 where
the university refused to perform its duty to
bargain collectively; hence, the High Tribunal
upheld the unilateral imposition on the university
of the CBA proposed by the Divine Word
University Employees Union.

Unilateral changes in the CBA are


allowed without the consent of both parties.34

2. General Milling Corporation v. CA, 22 where the


Supreme Court imposed on the employer the
draft CBA proposed by the union for the last two
(2) years commencing from the expiration of the
3-year term of the original CBA. This was
because of the employers refusal to counterpropose to the unions proposals which was
declared as an unfair labor practice under Article
248(g) [23 of the Labor Code.

Automatic Incorporation Clause law is presumed


part of the CBA.37

2.
COLLECTIVE BARGAINING AGREEMENT (CBA)
1. CBA.
A Collective Bargaining Agreement or CBA for
short, refers to the negotiated contract between a duly
recognized or certified exclusive bargaining agent of workers
and their employer, concerning wages, hours of work and all
other terms and conditions of employment in the appropriate
bargaining unit, including mandatory provisions for
grievances and arbitration machineries.24 It is executed not
only upon the request of the exclusive bargaining
representative but also by the employer.25
2.
ESSENTIAL
REQUISITES
OF
COLLECTIVE
BARGAINING.
Prior to any collective bargaining negotiations
between the employer and the bargaining union, the
following requisites must first be satisfied:

not

Management rights and prerogatives are limited by the


CBA.35
CBA is not an ordinary contract as it is impressed with
public interest.36

The benefits derived from the CBA and the law are
separate and distinct from each other.38
Workers are allowed to negotiate wage increases
separately and distinctly from legislated wage
increases. It is provided under Article 125 of the Labor
Code that no Wage Order should be construed to
prevent workers in particular firms or enterprises or
industries from bargaining for higher wages with their
respective employers. This is usually the case because
all CBA negotiations are conducted for the purpose of
effecting increases in wages and other benefits over and
above the rates provided for by law. Obviously, the
parties do not sit down and negotiate a CBA for the
purpose of reducing existing benefits way below what
the law mandates.
The parties may validly agree in the CBA to reduce
wages and benefits of employees provided such
reduction does not go below the minimum
standards. 39
Entering into a CBA which contains terms and
conditions of employment below minimum standards
established by law shall, despite its registration, not
constitute a bar to the conduct of a certification election.

56

Ratification of the CBA by majority of all the workers


in the bargaining unit makes the same binding on all
employees therein.40
Employees entitled to CBA benefits. The following
are entitled to the benefits of the CBA:
(1) Members of the bargaining union;
(2) Non-members of the bargaining union but are
members of the bargaining unit;41
(3) Members of the minority union/s who paid agency
fees to the bargaining union;42 and
(4) Employees hired after the expiration of the CBA.43
Pendency of a petition for cancellation of union
registration is not a prejudicial question before CBA
negotiation may proceed. 44
CBA should be construed liberally. 45 If the terms of
a CBA are clear and there is no doubt as to the intention
of the contracting parties, the literal meaning of its
stipulation shall prevail.46
(a)
MANDATORY PROVISIONS OF CBA47
1. MANDATORY STIPULATIONS OF THE CBA.
The Syllabus mentions 4 provisions that are
mandatorily required to be stated in the CBA, to wit:
1. Grievance Procedure;48
2. Voluntary Arbitration;49
3. No Strike-No Lockout Clause; and

voluntary arbitration as the terminal step, which are intended


to resolve all issues arising from the implementation and
interpretation of their collective agreement. 54 It is that part of
the CBA which provides for a peaceful way of settling
differences and misunderstanding between the parties.55
The
procedure and grievance
interchangeably.

terms grievance
machinery may be used
(ii)

VOLUNTARY ARBITRATION
1. VOLUNTARY ARBITRATION.
Voluntary arbitration refers to the mode of
settling labor-management disputes in which the parties
select a competent, trained and impartial third person who is
tasked to decide on the merits of the case and whose
decision is final and executory.56
2. VOLUNTARY ARBITRATOR.
A Voluntary Arbitrator refers to any person who
has been accredited as such by the National Conciliation and
Mediation Board (NCMB or Board) , or any person named
or designated in the CBA by the parties as their Voluntary
Arbitrator, or one chosen by the parties with or without the
assistance of the NCMB pursuant to a selection procedure
agreed upon in the CBA or one appointed by the NCMB in
case either of the parties to the CBA refuses to submit to
voluntary arbitration. This term includes a panel of Voluntary
Arbitrators.57

If these provisions are not reflected in the CBA, its


registration will be denied by the BLR.

A Voluntary Arbitrator is not an employee,


functionary or part of the government or of the Department of
Labor and Employment, but he is authorized to render
arbitration services provided under labor laws.58

(i)

(iii)

4. Labor-Management Council (LMC) .50

GRIEVANCE PROCEDURE
1. GRIEVANCE OR GRIEVABLE ISSUE.
A grievance or grievable
issue is
any
question raised by either the employer or the union regarding
any of the following issues or controversies:
1. The interpretation or implementation of
the CBA;
2. The interpretation or enforcement of company
personnel policies; or
3. Any claim by either party that the other party
is violating any provisions of the CBA or
company personnel policies.51
In order to be grievable, the violations of the CBA
should be ordinary and not gross in character; otherwise,
they shall be considered as unfair labor practice
(ULP). Gross violation of the CBA is defined as flagrant
and/or malicious refusal by a party thereto to comply with the
economic provisions thereof. 52 If what is violated, therefore,
is a non-economic or a political provision of the CBA, the
same shall not be considered as unfair labor practice and
may thus be processed as a grievable issue in accordance
with and following the grievance machinery laid down in the
CBA.
2. GRIEVANCE MACHINERY.
Grievance machinery refers to the mechanism
for the adjustment and resolution of grievances arising from
the interpretation or implementation of a CBA and those
arising from the interpretation or enforcement of company
personnel policies.53
3. GRIEVANCE PROCEDURE.
Grievance procedure refers to the internal rules
of procedure established by the parties in their CBA with

NO STRIKE, NO LOCKOUT CLAUSE


1. SIGNIFICANCE OF THE CLAUSE.
A No Strike, No Lockout clause in the CBA is an
expression of the firm commitment of the parties thereto that,
on the part of the union, it will not mount a strike during the
effectivity of the CBA, and on the part of the employer, that it
will not stage a lockout during the lifetime thereof. It has
heretofore
been
held
that
a No
Strike,
No
Lockout provision in the CBA is a valid stipulation although
the clause may be invoked by an employer only when the
strike is economic in nature or one which is conducted to
force wage or other concessions from the employer that are
not mandated to be granted by the law itself. It does not bar
strikes grounded on unfair labor practices. 59
The same rule also applies in case of lockout. The
said clause may only be invoked by the union in case the
ground for the lockout iseconomic in nature but it
may not be so cited if the ground is unfair labor
practice committed by the union.
2. EFFECT OF VIOLATION OF THE CLAUSE.
The Supreme Court consistently ruled in a long line
of cases that a strike is illegal if staged in violation of the said
clause in the CBA especially when conclusive arbitration
clause is provided therein.60 Thus, in C. Alcantara & Sons,
Inc. v. CA,61 it was declared that a strike may be regarded as
invalid although the labor union has complied with the strict
requirements for staging one as provided in Article 263 of the
Labor Code when the same is held contrary to an existing
agreement, such as a no strike, no lockout provision that
enjoins both the union and the company from resorting to the
use of economic weapons available to them under the law

56

and to instead take recourse to voluntary arbitration in


settling their disputes.
In National Union of Workers in the Hotel,
Restaurant and Allied Industries [NUWHRAIN-APL-IUF]
Dusit Hotel Nikko Chapter v. The Hon. CA, 62 the strike
which arose out of a bargaining deadlock in the CBA
negotiations with the Hotel was declared as an economic
strike upon which the no strike/work stoppage and
lockout prohibition in the CBA is squarely applicable and
legally binding.63
In Interphil Laboratories Employees Union-FFW
v.
Interphil
Laboratories,
Inc., 64 the overtime
boycott and work slowdownconducted by the employees
were considered an illegal strike, the same being in violation
of the CBA which prohibits the union or employees, during
the existence of the CBA, to stage a strike or engage in
slowdown or interruption of work.65
(iv)
LABOR-MANAGEMENT COUNCIL
1. CREATION OF LMC, CONSTITUTIONALLY AND
LEGALLY JUSTIFIED.
The Labor-Management Council (LMC) whose
creation is mandated under the Labor Code,66 is meant to
implement the constitutionally mandated right of workers to
participate in policy and decision-making processes of the
establishment where they are employed insofar as said
processes will directly affect their rights, benefits and
welfare.67
The LMC is mandated to be created
both organized and unorganized establishments.

in

2. SELECTION OF REPRESENTATIVES TO LMC.


In organized establishments,
the
workers
representatives to the committee or council should be
nominated by the exclusive bargaining representative.
In establishments where no legitimate labor organization
exists, the workers representative should be elected directly
by the employees at large.
3. LABOR-MANAGEMENT COUNCIL (LMC) VS.
GRIEVANCE MACHINERY (GM).
To avoid confusion and possible major legal
complication, a clear distinction line should be drawn
between LMC and GM. The following may be cited:
1. Constitutional origin. The creation of the LMC
is based on the constitutional grant to workers of the right to
participate in policy and decision-making processes under
the 1st paragraph, Section 3, Article XIII of the 1987
Constitution, thus:
It shall guarantee the rights of all
workers to self-organization, collective
bargaining and negotiations, and peaceful
concerted activities, including the right to
strike in accordance with law. They shall
be entitled to security of tenure, humane
conditions of work, and a living wage.They
shall also participate in policy and
decision-making processes affecting
their rights and benefits as may be
provided by law. 68
The creation of a GM, on the other hand, is based
on a different constitutional provision, the 2nd paragraph,
Section 3, Article XIII of the 1987 Constitution, which
provides as follows:
The State shall promote the
principle of shared responsibility between
workers
and
employers
and

the preferential use of voluntary modes


in
settling
disputes ,
including
conciliation, and shall enforce their mutual
compliance therewith to foster industrial
peace. 69
2. Legal anchor. - The creation of LMC is provided
under Article 255 of the Labor Code; while the formation of a
GM is mandated under Article 260 of the same Code.
3. Compulsory provision in the CBA. - Both LMC
and GM are compulsorily required to be embodied in the
CBA in order for it to be considered a valid agreement.
4. Purpose for creation. - The LMC is created for
the purpose of affording workers the right to participate in
policy and decision-making processes in matters affecting
their rights, benefits and welfare; while that of the GM is to
resolve disputes and grievances arising from such policies or
decisions
or
more
specifically,
to
adjust
and
resolve grievances arising from (1) the interpretation or
implementation of the CBA or (2) the interpretation or
enforcement of company personnel policies.70
5. Nature of functions. - The LMC is in the nature
of a preventive mechanism meant to prevent and avoid
disputes or grievances by co-determining the proper policies
that should be implemented by the employer in respect of the
workers rights, benefits and welfare; while a GM is an
adjudicatory mechanism which is set into motion only when a
dispute or grievance occurs.
6. Nature of cognizable issues. The LMC
performs non-adversarial and non-adjudicatory tasks as it
concerns itself only with policy formulations and decisions
affecting the workers rights, benefits and welfare and not
violations or transgressions of any policy, rule or regulation;
while that of the GM is adversarial and adjudicatory in
character since its jurisdiction is confined to resolving and
deciding disputes and grievances between management and
the workers arising from violations or transgressions of
existing policies, rules or regulations. In other words, the
LMC does not resolve grievable or contentious issues;
the GM does.
A case illustrative of this principle is the 2011 case
of Cirtek Employees Labor Union-Federation of Free
Workers v. Cirtek Electronics, Inc.71 The CBA negotiation
between petitioner union and respondent company was
deadlocked resulting in the staging of a strike by the former.
The DOLE Secretary assumed jurisdiction over the labor
dispute
but
before
he
could
rule
on
the
controversy, respondent created a Labor-Management
Council (LMC) through which it concluded with the remaining
officers of petitioner a Memorandum of Agreement (MOA)
providing for daily wage increases of P6.00 per day effective
January 1, 2004 and P9.00 per day effective January 1,
2005. Petitioner submitted the MOA to the DOLE Secretary,
alleging that the remaining officers signed the MOA under
respondents assurance that should the Secretary order a
higher award of wage increase, respondent would comply.
Respecting the MOA, petitioner posits that it was
surreptitiously entered into [in] bad faith, it having been
forged without the assistance of the Federation of Free
Workers or counsel, adding that respondent could have
waited for the Secretarys resolution of the pending CBA
deadlock or that the MOA could have been concluded before
representatives of the DOLE Secretary. As found by the
DOLE Secretary, the MOA came about as a result of the
constitution, at respondent's behest, of the LMC which, he
reminded the parties, should not be used as an avenue for
bargaining but for the purpose of affording workers to
participate in policy and decision-making.
Hence, the
agreements embodied in the MOA were not the proper
subject of the LMC deliberation or procedure but of CBA
negotiations and, therefore, deserving little weight.

56

7. Kind of establishment where it is required to


be set up. The classification of the establishment, whether
organized or unorganized, is not material as far as LMC is
concerned since it is required to be established in all
establishments whether organized or unorganized; while
the GM is required only in case of organized establishments
since it is mandated to be stipulated in the CBA.
8. Composition. - The representatives of the
workers to the LMC may or may not be nominated by the
recognized or certified bargaining agent, depending on
whether the establishment is organized or unorganized.
Thus,
in organized establishments,
the
workers
representatives to the LMC should be nominated by the
exclusive bargaining agent. In establishments where no
legitimate labor organization exists, the workers
representatives should be elected directly by the employees
of the establishment at large; while those in the GM are
nominated solely by the bargaining agent.72
9. Procedure. - The LMC does not involve any
specific procedure prescribed by law to govern its
proceedings; while the GM is required to follow a multi-step
procedure starting from a discussion of the grievance
between the employee and the union steward, on the one
hand, and the foreman and supervisor, on the other, and
ending with the highest decision-making officials of the
company,
reflecting
the
hierarchy
of
command
responsibility.73
10. Appeals. The LMC does not make any
decisions since no dispute or grievance is cognizable by it,
hence, any policy formulations are not appealable to any
office or authority; while the decision of the GM on any
dispute or grievance should be elevated to voluntary
arbitration if not resolved with finality by the GM within seven
(7) calendar days from the date of submission, thus:
All grievances submitted to the
grievance machinery which are not settled
within seven (7) calendar days from the
date of its submission shall automatically
be referred to voluntary arbitration
prescribed in the Collective Bargaining
Agreement.
While strictly speaking, such elevation to voluntary
arbitration may not be considered an appeal as this term is
technically defined in law, jurisprudence or rules, this is
clearly the intention behind the law since it is required that
the unresolved dispute or grievance be automatically
elevated to a Voluntary Arbitrator or panel of Voluntary
Arbitrators for voluntary arbitration purposes if unresolved
within the said 7-day period.
(b)
DURATION OF CBA
(i)
FOR ECONOMIC PROVISIONS
(ii)
FOR NON-ECONOMIC PROVISIONS
1. TERMS OF A CBA.
The terms of a CBA are classified into two (2) , viz:
(a) Representation aspect 5 years which is the
lifetime of a CBA;
(b) All other provisions Subject to renegotiation
after first 3 years of the 5-year lifetime of CBA.74
2. REPRESENTATION ASPECT.
The phrase representation aspect in Article 253-A
of the Labor Code refers to the identity and majority status of

the bargaining agent that successfully negotiated the CBA as


the exclusive bargaining representative of the employees in
the appropriate bargaining unit concerned.75
The 5-year representation status of the incumbent
exclusive bargaining agent should be reckoned from the
effectivity of the CBA. This means that no petition for
certification election questioning its majority status may be
entertained during the lifetime of the CBA except within the
60-day freedom period immediately preceding the expiry
date of the 5-year term.
Suspension of CBA for a period longer than 5
years, held valid.
The case of Rivera v. Espiritu,76 is in point. It was
held here that the suspension of the CBA between PAL and
PALEA for ten (10) years77 in order to resolve the strike is not
violative of the Constitution or the law. This is so because the
right to free collective bargaining includes the right to
suspend it.78 There is nothing in Article 253-A which prohibits
the parties from waiving or suspending the mandatory
timetables and agreeing on the remedies to enforce the
same.
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. The
suspension agreement 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.79 The agreement afforded full protection to labor;
promoted the shared responsibility between workers and
employers; and exercised the voluntary modes in settling
disputes, including conciliation to foster industrial peace.80
3. RE-NEGOTIATION OF ALL PROVISIONS OTHER THAN
THE REPRESENTATION ASPECT OF THE CBA
SHOULD BE MADE AFTER FIRST 3 YEARS FROM
EFFECTIVITY.
Considering that the five (5) year period is quite
long during which the economic situations of the parties may
have already changed, Article 253-A recognizes the need for
the parties to re-assess and re-negotiate all the provisions of
the CBA, except its representation aspect, after the lapse of
the first three (3) years of its 5-year lifetime. Such renegotiation, however, should only pertain to the terms and
conditions of the parties relationship for the last remaining
two (2) years of the CBAs 5-year term. 81 This re-negotiation
process may be invoked by any of the parties as a matter of
right.82
4. ALL OTHER PROVISIONS, REFER TO BOTH
ECONOMIC AND NON-ECONOMIC PROVISIONS.
The phrase all other provisions mentioned in
Article 253-A simply refers to all the provisions of the
CBA irrespective of whether they are economic or noneconomic in nature. The only item excepted therefrom is
the representation status of the incumbent exclusive
bargaining agent which may only be questioned during the
60-day freedom period.83
The phrase not later than three years (or not later
than the third year),84 means that all the economic and noneconomic provisions of the CBA other than the
representation aspect may be re-negotiated before the end
of the third year.85
5. RETROACTIVITY OF THE CBA.

56

The application of the rules on retroactivity depends


on any of the following two (2) situations:
(a)

When the CBA is voluntarily concluded by the


parties; or

(b)

When the CBA is concluded through arbitral


award.

6.RULE WHEN VOLUNTARILY CONCLUDED BY THE


PARTIES IN THE NEGOTIATING TABLE.
(a) The effectivity of the CBA shall retroact to the
day immediately after the date of expiry of the
old CBA in case the new CBA is concluded and
entered into within six (6) months from the said
expiry date.86
(b) If the new CBA is entered into beyond six (6)
months from the expiry date of the old CBA, the
parties are given the right to negotiate the
duration of the retroactivity thereof.87
7. RULE ON RETROACTIVITY IN CASE OF CONCLUSION
OF CBA THROUGH ARBITRAL AWARD.
a. No law on retroactivity in case of CBA arbitral
awards.
The law is silent as to the retroactivity of a CBA
secured through arbitral award or that granted not by virtue
of the mutual agreement of the parties but by intervention of
the government.88
b. Variations in the application of the
retroactivity rule.
The rule laid down by the Supreme Court in cases
involving this particular issue of retroactivity varies from case
to case. Basically, the rule, based on jurisprudence, may be
restated in the following manner:
(1) Prospectivity rule;89
(2) Retroactivity rule which makes the CBA
retroactively effective to:
(a) the date of the expiration of the previous
CBA;90 and
(b) the first day after the six-month period
following the expiration of the last day of the
CBA.91
(iii)
FREEDOM PERIOD92
1. 60-DAY FREEDOM PERIOD.
When there is an existing CBA, the parties thereto
are bound to observe the terms and conditions therein set
forth until its expiration. Neither party is allowed to terminate
nor modify such agreement during its lifetime. The only time
the parties are allowed to terminate or modify the agreement
is within the so-called freedom period of at least sixty (60)
days prior to its expiration date by serving a notice to that
effect.
2. REASON IT IS CALLED FREEDOM PERIOD.
The last 60 days of the 5-year lifetime of a CBA
immediately prior to its expiration is called the freedom
periodbecause:
(a)

(b)

it is the only time when the law allows the


parties to freely serve a notice to terminate,
alter or modify the existing CBA; and
it is also the time when the majority status of
the bargaining agent may be challenged by
another union by filing the appropriate petition
for certification election.93

3. RULE ON FILING OF CERTIFICATION ELECTION VIS-VIS FREEDOM PERIOD.

In a petition involving an organized establishment or


enterprise where the majority status of the incumbent
collective bargaining union is questioned by a legitimate
labor organization, the Med-Arbiter shall immediately
order the conduct of a certification election if the petition is
filedduring the last sixty (60) days of the CBA. Any petition
filed before or after the 60-day freedom period shall be
dismissed outright.94
The 60-day freedom period based on the original
collective bargaining agreement shall not be affected by any
amendment, extension or renewal of the CBA for purposes of
certification election.95
4. AUTOMATIC RENEWAL CLAUSE.
A petition for certification election challenging the
majority status of the existing bargaining agent should be
filed within and not before or after- said 60-day freedom
period. Upon the expiration of the said period and no petition
for certification election is filed by a challenging union, the
employer is duty-bound to continue to recognize the majority
status of the incumbent bargaining agent. 96 Negotiation for a
new CBA may even validly commence between the
incumbent bargaining agent and the employer during the 60day freedom period if no challenge to the bargaining agents
majority status is posed by another union.
3.
UNION SECURITY
1. NATURE AND PURPOSE OF UNION SECURITY
CLAUSE.
The stipulation in a CBA based on the second
sentence of paragraph [e] of Article 248 of the Labor Code
commonly known as the union security clause allows the
parties thereto to enter into an agreement requiring
membership in the bargaining agent which successfully
negotiated said CBA as a condition for continued
employment with the exception of employees who are
already members of another union at the time of the signing
of the CBA.
Union security is a generic term which is applied
to and comprehends closed shop, union shop,
maintenance of membership or any other form of
agreement which imposes upon the employees the
obligation to acquire or retain union membership as a
condition to their continued employment. In other words, the
purpose of a union security arrangement is to guarantee the
continued existence of the union through enforced
membership for the benefit of the workers.97 The employer
under this clause recognizes that the membership of
employees in the union which negotiated the CBA should be
maintained and continued as a condition for employment or
retention of employment. The obvious purpose is to
safeguard and ensure the unions continued existence and
to strengthen and protect it from the fickleness or perfidy of
its own members. Without this clause, the existence of the
union is always subject to uncertainty as its members may
resign anytime resulting in the decimation of its ranks. The
union becomes gradually weakened and increasingly
vulnerable to company machinations. In this security clause
lies the strength of the union during the enforcement of the
CBA. It is this clause that provides labor with substantial
power in collective bargaining.98
The law therefore allows stipulations for union shop,
closed shop or other forms of union security 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. 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.99

56

2. THE RIGHT NOT TO JOIN A UNION IS NOT ABSOLUTE


SINCE IT MAY BE RESTRICTED.
The right of an employee not to join a union is not
absolute and must give way to the collective good of all
members of the bargaining unit. When certain employees are
obliged to join a particular union as a requisite for continued
employment, as in the case of a union security clause, this
condition is a valid restriction on the freedom or right not to
join any labor organization because it is in favor of unionism.
Time and again, it has been ruled that the individual
employees right not to join a union may be validly restricted
by a union security clause in a CBA. Theoretically, there is
nothing in law or jurisprudence to prevent an employer and a
union from stipulating that existing employees (who already
attained regular and permanent status but who are not
members of any union) are to be included in the coverage of
a union security clause. Even Article 248(e) of the Labor
Code only expressly exempts old employees who already
have a union from inclusion in a union security clause.100
3. UNION SECURITY CLAUSE DOES NOT VIOLATE
CONSTITUTIONAL RIGHT TO FREEDOM OF
ASSOCIATION.
A union security clause in a CBA is not a violation or
a restriction of the employees right to freedom of association
guaranteed by the Constitution. In Peoples Industrial and
Commercial Employees and Workers Organization v.
Peoples Industrial and Commercial Corporation,101 it was
recognized that [l]abor, being the weaker in economic power
and resources than capital, deserves protection that is
actually substantial and material.
The rationale for upholding the validity of union
shop clauses in a CBA, even if they impinge upon the
individual employees right or freedom of association, is not
to protect the union for the unions sake.
Laws and
jurisprudence promote unionism and afford certain protection
to the certified bargaining agent in a unionized company
because a strong and effective union presumably benefits all
employees in the bargaining unit since such a union would
be in a better position to demand improved benefits and
conditions of work from the employer. This is the rationale
behind the State policy to promote unionism declared in the
Constitution. Nonetheless, settled jurisprudence has already
swung the balance in favor of unionism, in recognition that
ultimately the individual employee will be benefited by that
policy. In the hierarchy of constitutional values, the High
Court has repeatedly held that the right to abstain from
joining a labor organization is subordinate to the policy of
encouraging unionism as an instrument of social justice.102
4. EMPLOYEES EXEMPTED FROM COVERAGE OF
UNION SECURITY CLAUSE.
All employees in the bargaining unit covered by a
Union Security Clause in their CBA with the employer are
subject to its terms. However, under law and established
jurisprudence, the following kinds of employees are
exempted from its coverage, namely:
1. Employees who, at the time the union security
agreement takes effect, are bona-fide members
of a religious organization which prohibits its
members from joining labor unions on religious
grounds;103

4. Supervisory employees who are excluded from


becoming members of the rank-and-file union
and vice-versa;106 and
5. Employees excluded from the union security
clause by express terms of the agreement.107
(a)
UNION SECURITY CLAUSES:
CLOSED SHOP, UNION SHOP, MAINTENANCE OF
MEMBERSHIP SHOP, ETC.
1.
CLASSIFICATION
ARRANGEMENTS.

OF

UNION

SECURITY

Generally, a union security clause may take the


form of:
1. Closed-shop agreement;
2. Maintenance of membership agreement;
3. Union shop agreement;
4. Modified union shop agreement;
5. Exclusive bargaining agreement;
6. Bargaining for members only agreement;
7. Agency shop agreement; or
8. Preferential hiring agreement.
Modification of arrangements.
The above classification admits of certain modified
types which the parties may agree upon in the CBA
depending on the peculiar requirements of the situation.
2. CLOSED-SHOP AGREEMENT.
A closed-shop may be defined as a scheme in
which, by agreement between the employer and its
employees through their bargaining union/agent, no person
may be employed unless he or she is, becomes, and, for the
duration of the agreement, remains a member in good
standing of the bargaining union.108 Basically, this kind of
agreement stipulates the undertaking by the employer not to
hire or employ any person who is not a member of the
bargaining union. Once employed, it is required that the said
person should remain a member of the bargaining union in
good standing as a condition for continued employment, at
least during the whole duration of the CBA. This requirement
for employees or workers to become members of a union as
a condition for employment redounds to the benefit and
advantage of said employees because by holding out to loyal
members a promise of employment in the closed shop, the
union wields group solidarity. In fact, it is said that the
closed shop contract is the most prized achievement of
unionism.109
3. MAINTENANCE OF MEMBERSHIP AGREEMENT.
There

is

maintenance

of

membership

agreement when employees, who are union members as of


the effective date of the agreement, or who thereafter
become members, must maintain union membership as a
condition for continued employment until they are promoted

2. Employees already in the service and already


members of a union other than the bargaining
agent at the time the union security agreement
took effect;104

or transferred out of the bargaining unit, or the agreement is

3. Confidential employees who are excluded from


the rank-and-file or supervisory bargaining
unit;105

continued union membership compulsory for: (1) those who

terminated.110 Its role is to protect the unions current


membership.

By its express terms, it covers and renders

were already union members at the time the CBA was


signed; and (2) the new employees who will become regular

56

during the life of the CBA. This form of union security clause

259(e) [248(e)
arrangement.

is considered the mildest because it does not require non-

9. PREFERENTIAL HIRING AGREEMENT.

members of the bargaining union to join the latter but simply


stipulates that those who are its members at the time of the
execution of the CBA and those who may, after its execution,
on their own, voluntarily join the bargaining agent, should
maintain their membership in good standing therein for the
whole duration of the CBA as a condition for their continued
employment with the employer until they are promoted or
transferred out of the bargaining unit or the agreement is
terminated. Simply put, employees who are not members of
the bargaining agent at the time of the execution of the CBA
are not, in any manner, bound to become members of the
bargaining agent. Employees hired after the execution of the
CBA are likewise not duty-bound to join the bargaining agent.
They may or may not join it.111
4. UNION SHOP AGREEMENT.
There is union shop when all new regular
employees are required to join the union within a certain
period as a condition for their continued employment. 112 Its
role is to compel the membership of those who are not yet
union members. Under this scheme, the employer is given
the freedom to hire and employ any person who is not a
member of the bargaining agent. Once such person
becomes an employee, he is required to become a member
of the bargaining agent and to remain as such member in
good standing for the whole period of the effectivity of the
CBA as a condition for his continued employment.
5. MODIFIED UNION SHOP AGREEMENT.
Employees under this arrangement who are not
union members at the time of the signing or execution of the
CBA are not required to join the bargaining union. However,
any and all workers hired or employed after the signing or
execution of the CBA are required to join the bargaining
union.
6. EXCLUSIVE BARGAINING AGENT AGREEMENT.
The union which negotiated and concluded the CBA
with management is considered and recognized as the sole
and exclusive bargaining agent of all the covered employees
in the bargaining unit, whether they be members or not of the
said agent.
7. BARGAINING FOR MEMBERS ONLY AGREEMENT.
Under this arrangement, the union which negotiated
and concluded the CBA with management is recognized as
the bargaining agent only for its own members.113
8. AGENCY SHOP AGREEMENT.
Under this scheme, there is no requirement for nonmembers of the bargaining agent to become its members.
However, it is required that such non-union members should
pay to the bargaining agent an agency fee as a condition for
their continued employment. The third sentence of Article

of

the

Labor

Code

validates

this

It is the principal feature of this arrangement that


the employer gives preference in hiring to the members of
the bargaining agent under equal circumstances and
qualifications. Once hired or employed, they are required to
maintain their membership in good standing in the bargaining
agent for the duration of the CBA as a condition for their
continued employment.
10. DISMISSAL DUE TO VIOLATION OF UNION
SECURITY CLAUSE.
a. Requisites for valid termination based on
union security clause.
The following are the requisites that the employer
should comply prior to terminating the employment of an
employee by virtue of the enforcement of the union security
clause:
(1) The union security clause is applicable;
(2) The union is requesting for the enforcement of
the union security provision in the CBA; and
(3) There is sufficient evidence to support the
unions decision to expel the employee from
the union.114
The foregoing requisites constitute a just cause for
terminating an employee based on the CBAs union security
provision.115
b. The due process afforded by the union prior
to expulsion is different from the due process
required prior to termination of employment.
The distinction is not hard to comprehend. The due
process afforded by the union is meant solely and
exclusively to address the issue of validity of the termination
of the membership of the employee in the union; while that
required of the employer is aimed at addressing the issue of
validity of the employees termination of employment. Hence,
it is complete error on the part of the employer to adopt as its
own due process what has been earlier afforded by the union
to the erring employee without conducting its own
independent and separate due process.
Thus, in declaring the illegality of the dismissal of
petitioner in Cario v. NLRC,116 the Supreme Court noted in
regard to the involvement of the company in his dismissal,
that the company, upon being formally advised in writing of
the expulsion of petitioner Cario from the union, in turn
simply issued a termination letter to Cario, the termination
being made effective the very next day. The Company should
have given petitioner Cario an opportunity to explain his
side of the controversy with the union. Notwithstanding the
union security clause in the CBA, the company should have
reasonably satisfied itself by its own inquiry that the union
had not been merely acting arbitrarily and capriciously in
impeaching and expelling petitioner Cario. Had the
company taken the trouble to investigate the acts and
proceedings of the union, it could have very easily
determined that the union had acted arbitrarily in impeaching
and expelling from its ranks petitioner Cario. The company
offered the excuse that the union had threatened to go on
strike if its request had not been forthwith granted. Assuming
that such a threat had in fact been made, if a strike was in
fact subsequently called because the company had insisted
on conducting its own inquiry, the Court considers that such
would have been prima facie an illegal strike. The company
also pleaded that for it to inquire into the lawfulness of the

56

acts of the union in this regard would constitute interference


by the company in the administration of union affairs. We do
not believe so, said the Supreme Court.117
11. SOME PRINCIPLES ON TERMINATION DUE TO
VIOLATION OF UNION SECURITY CLAUSE.
Dismissal based on union security clause may only
be valid if it is expressly provided therein as the penalty
for its violation. A dismissal founded on a union security
clause which does not explicitly authorize it for its
violation constitutes an unfair labor practice.118
Employer is obligated to act upon being demanded
by the union to terminate the employment of its errant
members.119
Members of the minority union cannot be
compelled to join the bargaining union. The union
security clause therefore does not cover employees
who are members of the union/s120 other than the
bargaining union.121 Not being so covered, they cannot
be dismissed for violation of said clause.122
Non-retroactivity of union security clause (closedshop) as to cover employees who are not members of
any labor organization at the time of effectivity of the
CBA.123
Exception to the non-retroactivity rule is when nonmembers of any other labor organization at the time of
effectivity of the CBA may be compelled to join the
bargaining union.124
The employer has the right to be reimbursed for
payment of any claims arising out of dismissals
demanded by the union under the union security
clause. Such right of reimbursement may be invoked:
(1) By express provision in the CBA to that effect; or
(2) By securing it through judicial directive.
(b)

The argument cannot be sustained, said the


Supreme Court, thus:
Contrary to what DEL PILAR wants to
portray, the grant of annual salary increase is
not the only provision in the CBA that benefited
the non-union employees. The UNION
negotiated for other benefits, namely,
limitations on teaching assignments to 23 hours
per week, additional compensation for overload
units or teaching assignments in excess of the
23 hour per week limit, and payment of
longevity pay. It also negotiated for entitlement
to summer vacation leave with pay for two (2)
months for teaching staff who have rendered
six (6) consecutive semesters of service. For
the non-teaching personnel, the UNION worked
for their entitlement to fifteen (15) days leave
with pay. These provisions in the CBA surely
benefited the non-union employees, justifying
the collection of, and the UNIONs entitlement
to, agency fees.
Accordingly, no requirement of written
authorization from the non-union employees is
needed to effect a valid check off. Article 259(e)
[248(e) ] makes it explicit that Article 250 [241],
paragraph (o) , requiring written authorization is
inapplicable to non-union members, especially
in this case where the non-union employees
receive several benefits under the CBA.
[NOTE: This sub-topic is also
extensively discussed under the
topic VII.
LABOR
RELATIONS
LAW, 4. Other relevant matters xxx
(b) Union dues and special
assessments (i) Requirements for
validity (c) Agency fees (i)
Requisites for assessment, supra]
4.

CHECK-OFF; UNION DUES, AGENCY FEES


1. CHECK-OFF OF AGENCY FEE, DIFFERENT FROM
CHECK-OFF OF UNION DUES AND ASSESSMENTS.
Check-off of agency fee does not require the
execution by the non-bargaining union members of individual
written authorizations;125 while such is an indispensable
requisite for check-off of union dues and special
assessments
from
members
of
the
bargaining
union.126 Article 248(e) of the Labor Code makes it explicit
that paragraph [o] of Article 241 thereof requiring individual
written authorization is inapplicable to non-bargaining union
members who receive benefits from the CBA.127
2. RELEVANT JURISPRUDENCE.
Petitioner in Del Pilar Academy v. Del Pilar
Academy Employees Union,128 admitted its failure to
deduct the agency fees from the salaries of non-union
employees, but justifies the non-deduction by the absence of
individual written authorization. It posits that Article 248(e) is
inapplicable considering that its employees derived no
benefits from the CBA. The annual salary increase of its
employee is a benefit mandated by law, and not derived from
the CBA. According to petitioner, the Department of
Education, Culture and Sports (DECS) required all
educational institutions to allocate at least 70% of tuition fee
increases for the salaries and other benefits of teaching and
non-teaching personnel; that even prior to the execution of
the CBA in September 1994, petitioner was already granting
annual salary increases to its employees. Besides, the nonunion employees objected to the deduction; hence, a written
authorization is indispensable to effect a valid check off.

UNFAIR LABOR PRACTICE


IN COLLECTIVE BARGAINING
(a)
BARGAINING IN BAD FAITH
1. BASIC PRINCIPLES.
It is essential that the employer and the employees
should both act in good faith. Collective bargaining is not
merely going through the motions of negotiating a CBA. A
party must not have a predetermined resolve not to budge
from an initial position. It is not surface bargaining
accompanied by a purpose to defeat it. It is not shadow
boxing to a draw. But it is not necessarily incompatible with
stubbornness. Good faith bargaining requires that claims
made by either bargainer should be honest claims. It would
not be far-fetched to reach the conclusion that bargaining
lacks good faith when an employer mechanically repeats
claim of inability to pay without making the slightest effort to
substantiate the claim.129
Where an 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.130
2. MAKING A PROMISE DURING THE CBA
NEGOTIATIONS, NOT AN INDICATION OF BAD FAITH.
Promises made by management during the CBA
negotiations may not be considered an indication of bad faith
or a scheme of feigning to undertake the negotiation
proceedings through empty promises. The union has, under
the law, the right and opportunity to insist on the foreseeable

56

fulfillment of the companys promises by demanding their


incorporation in the CBA. As held in Samahang
Manggagawa sa Top Form Manufacturing-United
Workers
of
the
Philippines
SMTFM-UWP]
v.
NLRC,131 because the proposal was never embodied in the
CBA, the promise has remained just that, a promise, the
implementation of which cannot be validly demanded under
the law.
3. ADAMANT STANCE RESULTING IN AN IMPASSE, NOT
AN INDICIUM OF BAD FAITH.

A party to a fully-concluded CBA may be compelled


to sign it, especially if said refusal to sign is the only
remaining hitch to its being implemented. Such refusal is
considered an unfair labor practice.139

The adamant insistence on a bargaining position to


the point where the negotiations reach an impasse does not
establish bad faith. Neither can bad faith be inferred from a
partys insistence on the inclusion of a particular substantive
provision unless it concerns trivial matters or is obviously
intolerable.132
4. PARTIES HAVE NO OBLIGATION TO PRECIPITATELY
AGREE TO THE PROPOSALS OF EACH OTHER.
While the law makes it an obligation for the
employer and the employees to bargain collectively with
each other, such compulsion does not include the
commitment to precipitately accept or agree to the proposals
of the other. All it contemplates is that both parties should
approach the negotiation with an open mind and make
reasonable effort to reach a common ground of
agreement.133
5. ALLEGATIONS OF BAD FAITH WIPED OUT WITH THE
SIGNING OF THE CBA.
With the execution of the CBA, bad faith bargaining
can no longer be imputed upon any of the parties thereto. All
provisions in the CBA are supposed to have been jointly and
voluntarily incorporated therein by the parties. The CBA is
proof enough that the company exerted reasonable effort at
good faith bargaining.134

To negotiate or attempt to negotiate with individual


workers rather than with the certified bargaining agent is an
unfair labor practice. For instance, 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, it being an active interference
with the right of collective bargaining through dealing with the
employees individually instead of through their collective
bargaining representatives. 140

(b)
REFUSAL TO BARGAIN
1. FAILURE OR REFUSAL OF MANAGEMENT TO GIVE
COUNTER-PROPOSALS TO THE UNIONS DEMANDS.
The failure of the employer to submit its counterproposals to the demands of the bargaining union does not,
by itself, constitute refusal to bargain. 135 However, it is
different if the employer refuses to submit an answer or
reply to the written bargaining proposals of the certified
bargaining union. In this case, unfair labor practice is
committed. 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.136
In General Milling Corporation v. CA, 137 the
Supreme Court found the petitioner guilty of unfair labor
practice under Article 248 [g] for refusing to send a counterproposal to the union and to bargain anew on the economic
terms of the CBA.
Similarly, in the earlier case of Colegio de San
Juan de Letran v. Association of Employees and Faculty
of Letran,138 the petitioner school was declared guilty of
unfair labor practice when it failed to make a timely reply to
the proposals of the certified bargaining union more than a
month after the same were submitted to it. In explaining its
failure to reply, the school merely offered the feeble excuse
that its Board of Trustees had not yet convened to discuss
the matter. Clearly, its actuation showed a lack of sincere
desire to negotiate the CBA thereby rendering it guilty of
unfair labor practice.
2. REFUSAL OF A PARTY TO SIGN THE CBA.

(c)
INDIVIDUAL BARGAINING
1. EMPLOYERS ACT OF NEGOTIATING WITH UNION
MEMBERS INDIVIDUALLY, A ULP.

In Insular Life Assurance Co. , Ltd. , Employees


Association-NATU v. Insular Life Assurance Co. , Ltd. ,
141
respondent company, through its president, sent two (2)
sets of letters to the individual strikers during the strike. The
first contained promises of benefits to the employees in order
to entice them to return to work; while the second contained
threats to obtain replacements for the striking employees in
the event they did not report for work on June 2, 1958. The
respondents contend that the sending of the letters
constituted a legitimate exercise of their freedom of speech.
The Supreme Court, however, disagreed. The said letters
were directed to the striking employees individually - by
registered special delivery mail at that - without being
coursed through the unions which were representing the
employees in collective bargaining. Moreover, the sending of
these letters is not protected by the free speech provision of
the Constitution. The free speech protection under the
Constitution is inapplicable where the expression of opinion
by the employer or his agent contains a promise of benefit or
threats or reprisal.142
2. UNION CANNOT VALIDLY BARGAIN IN BEHALF OF
ITS MEMBERS ONLY.
Respondent union in Philippine Diamond Hotel
and Resort, Inc. [Manila Diamond Hotel] v. Manila
Diamond Hotel Employees Union, 143 insists that it could
validly bargain in behalf of its members only. The Supreme
Court, however, ruled that the same would only fragment the
employees of petitioner. What respondent union will be
achieving is to divide the employees, more particularly, the
rank-and-file employees of petitioner hotel. The other
workers who are not members are at a serious
disadvantage, because if the same shall be allowed,
employees who are non-union members will be economically
impaired and will not be able to negotiate their terms and
conditions of work, thus defeating the very essence and
reason of collective bargaining which is an effective
safeguard against the evil schemes of employers in terms
and conditions of work. Petitioners refusal to bargain then
with respondent cannot be considered an unfair labor
practice to justify the staging of the strike.144
(d)
BLUE-SKY BARGAINING
1. CONCEPT.
Blue-sky
bargaining means
making
exaggerated or unreasonable proposals.145 This kind of
unfair labor practice act may only be committed by the
bargaining union.

56

In Standard Chartered Bank Employees Union


[NUBE] v. Confesor,146 the minutes of the meeting show that
the union based its economic proposals on data of rank-andfile employees and the prevailing economic benefits received
by bank employees from other foreign banks doing business
in the Philippines and other branches of the bank in the
Asian region. Hence, it cannot be said that the union was
guilty of an unfair labor practice for blue-sky bargaining.

1. Article 247 which describes the concept of ULPs


and prescribes the procedure for their
prosecution;

(e)

4. Article 261 which considers violations of the CBA


as no longer ULPs unless the same are gross in
character which means flagrant and/or malicious
refusal to comply with the economic provisions
thereof.

2. Article 248 which enumerates the ULPs that may


be committed by employers;
3. Article 249 which enumerates the ULPs that may
be committed by labor organizations;

SURFACE BARGAINING
1. CONCEPT.
Surface bargaining is defined as going through
the motions of negotiating without any legal intent to reach
an agreement. This kind of unfair labor practice may only be
committed by the employer.
According to the same case of Standard Chartered
Bank, it involves the question of whether an employers
conduct demonstrates an unwillingness to bargain in good
faith or is merely hard bargaining. There can be no surface
bargaining, absent any evidence that management 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.
Here, admittedly, the parties were not able to agree and thus
reached a deadlock. However, it must be 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 does not amount to an unfair
labor practice under Article 248(g) of the Labor Code.147
5.
UNFAIR LABOR PRACTICE
(ULP)
(a)
NATURE OF ULP
1. WHEN AN ACT CONSTITUTES ULP.

5. Article 263 [c] which refers to union-busting, a


form of ULP, involving the dismissal from
employment of union officers duly elected in
accordance with the union constitution and bylaws, where the existence of the union is
threatened thereby.
4. PARTIES WHO/WHICH MAY COMMIT ULP.
A ULP may be committed by an employer or by a
labor organization. Article 248 describes the ULPs that may
be committed by an employer; while Article 249 enumerates
those which may be committed by a labor organization.
On the part of the employer, only the officers and
agents of corporations, associations or partnerships who
have actually participated in or authorized or ratified ULPs
are criminally liable.151
On the part of the union, only the officers, members
of governing boards, representatives or agents or members
of labor associations or organizations who have actually
participated in or authorized or ratified the ULPs
are criminally liable.152
5. ELEMENTS OF ULP.
Before an employer or labor organization may be
said to have committed ULP, the following elements must
concur:

At the outset, it must be clarified that not all unfair


acts constitute ULPs. While an act or decision of an
employer or a union may be unfair, certainly not every unfair
act or decision thereof may constitute ULP as defined and
enumerated under Articles 248 and 249 of the Labor Code.148
The act complained of as ULP must have a
proximate and causal connection with the following:
1. Exercise of the right to self-organization;
2. Exercise of the right to collective bargaining; or
3. Compliance with CBA.
Sans this connection, the unfair acts do not fall
within the technical signification of the term unfair labor
practice.149
2. THE ONLY ULP WHICH MAY OR MAY NOT BE
RELATED TO THE EXERCISE OF THE RIGHT TO SELFORGANIZATION AND COLLECTIVE BARGAINING.
The only ULP which is the exception as it may or
may not relate to the exercise of the right to self-organization
and collective bargaining is the act described under Article
248 [f], i.e. , to dismiss, discharge or otherwise prejudice or
discriminate against an employee for having given or being
about to give testimony under the Labor Code.150

1. There should exist an employer-employee


relationship between the offended party and the
offender; and
2. The act complained of must be expressly
mentioned and defined in the Labor Code as an
unfair labor practice.
Absent one of the elements aforementioned will not
make the act an unfair labor practice.
The first requisite is necessary because ULP may
only be committed in connection with the right to selforganization and collective bargaining by employees.
Necessarily, there must be an employment relationship in
order for the organizational right to be validly and lawfully
invoked.
The second requisite should be present since the
Labor Code itself requires that the ULP be expressly defined
by this Code. If an act is not covered by any of the grounds
expressly mentioned in the law, it cannot be deemed a ULP
act.
6. ASPECTS OF ULP.
Under Article 247, a ULP has two (2) aspects,
namely:

3. LABOR CODE PROVISIONS ON ULP.

1. Civil aspect; and

Under the Labor Code, there are only five (5)


provisions related to ULP, to wit:

2. Criminal aspect.
The civil aspect of an unfair labor practice includes
claims for actual, moral and exemplary damages, attorneys

56

fees and other affirmative reliefs.153 Generally, these civil


claims should be asserted in the labor case before the Labor
Arbiters who have original and exclusive jurisdiction over
unfair labor practices.154 The criminal aspect, on the other
hand, can only be asserted before the regular court.

(h) To pay negotiation or attorneys fees to


the union or its officers or agents as
part of the settlement of any issue in
collective bargaining or any other
dispute; or

(b)

(i) To violate a collective bargaining


agreement.

ULP OF EMPLOYERS 155


1. ENUMERATION OF SPECIFIC ULP ACTS OF
EMPLOYERS.
Article 248. Unfair Labor Practices of
Employers. It shall be unlawful for an
employer to commit any of the following unfair
labor practices:
(a)

To interfere with, restrain or


coerce employees in the exercise of
their right to self-organization;

(b)

To require as a condition of
employment that a person or an
employee shall not join a labor
organization or shall withdraw from one
to which he belongs;

(c) To contract out services or functions


being performed by union members
when such will interfere with, restrain or
coerce employees in the exercise of
their rights to self-organization;
(d)

To initiate, dominate, assist or


otherwise interfere with the formation or
administration
of
any
labor
organization, including the giving of
financial or other support to it or its
organizers or supporters;

(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 stop
the parties from requiring membership
in a recognized collective bargaining
agent as a condition for employment,
except those employees who are
already members of another union at
the time of the signing of the collective
bargaining agreement. Employees of
an appropriate bargaining unit who are
not members of the recognized
collective bargaining agent may be
assessed a reasonable fee equivalent
to the dues and other fees paid by
members of the recognized collective
bargaining agent, if such non-union
members accept the benefits under the
collective
bargaining
agreement:
Provided,
that
the
individual
authorization required under Article
242, paragraph (o) of this Code shall
not apply to the non-members of the
recognized collective bargaining agent;
(f) To dismiss, discharge or otherwise
prejudice or discriminate against an
employee for having given or being
about to give testimony under this
Code;
(g)

To violate the duty to bargain


collectively as prescribed by this Code;

The provisions of the preceding paragraph


notwithstanding, only the officers and agents of
corporations, associations or partnerships who
have actually participated in, authorized or
ratified unfair labor practices shall be held
criminally liable.156
I.
INTERFERENCE WITH, RESTRAINT OR COERCION OF
EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT TO SELFORGANIZATION
1. TEST OF
COERCION.

INTERFERENCE,

RESTRAINT

OR

The terms interfere,restrain and coerce are


very broad that any act of management that may reasonably
tend to have an influence or effect on the exercise by the
employees of their right to self-organize may fall within their
meaning and coverage. According to the Supreme Court
in Insular Life Assurance Co.,
Ltd., Employees
Association-NATU v. Insular Life Assurance Co.,
Ltd.,157 the test of whether an employer has interfered with or
restrained or coerced employees within the meaning of the
law is whether the employer has engaged in conduct which
may reasonably tend to interfere with the free exercise of the
employees rights. It is not necessary that there be direct
evidence that any employee was in fact intimidated or
coerced by the statements or threats of the employer if there
is a reasonable inference that the anti-union conduct of the
employer does have an adverse effect on the exercise of the
right to self-organization and collective bargaining.
However the act is called or denominated - whether
as interference, restraint or coercion, or as a discriminatory
discharge, or as a refusal to bargain, or even as a
combination of any or all of these - is of no consequence.
What is important is that the act constitutes an unfair labor
practice.158Determining the validity of an employers act
involves an appraisal of his motives. However, motivations
are seldom expressly avowed and avowals are not always
candid. There must be a measure of reliance on the
appraisal of evidence by the administrative agency. It is for
the labor tribunal, in the first instance, to weigh the
employers expressed motive in determining the effect on the
employees of managements otherwise equivocal act.
The significant point to consider, for a charge of
unfair labor practice to prosper, is that it must be shown that
the employers act was motivated by ill will, bad faith, or
fraud, or was oppressive to labor, or done in a manner
contrary to morals, good customs, or public policy, and, of
course, that social humiliation, wounded feelings or grave
anxiety resulted. 159 It bears emphasis, however, that
according to jurisprudence, basic is the principle that good
faith is presumed and he who alleges bad faith has the duty
to prove the same. By imputing bad faith to the actuations of
the employer, the employee has the burden of proof to
present substantial evidence to support the allegation of
unfair labor practice. Should he fail to discharge this burden,
his bare allegations deserve no credit.160
2. TOTALITY OF CONDUCT DOCTRINE.
In ascertaining whether the act of the employer
constitutes interference with, restraint or coercion of the
employees exercise of their right to self-organization and

56

collective bargaining, the totality of conduct doctrine may


be applied.

which the management preferred. The act of the petitioners

The totality of conduct doctrine means that


expressions of opinion by an employer, though innocent in
themselves, may be held to constitute an unfair labor
practice 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. An expression which may be permissibly
uttered by one employer, might, in the mouth of a more
hostile employer, be deemed improper and consequently
actionable as an unfair labor practice.161 The past conduct of
the employer and like considerations, coupled with an
intimate connection between the employers action and the
union affiliation or activities of the particular employee or
employees taken as a whole, may raise a suspicion as to the
motivation for the employers conduct. The failure of the
employer to ascribe a valid reason therefor may justify an
inference that his unexplained conduct in respect of the
particular employee or employees was inspired by the latters
union membership and activities.162

was an unfair labor practice prohibited by Article 248 of the

If the totality of conduct of the employer shows an


evident attempt to restrain the employees from fully
exercising their rights under the law, this cannot be done
under the Labor Code. The employer will be declared guilty
of unfair labor practice.163 Further, it bears underscoring that
an employer may be held guilty of unfair labor practice
constituting an interference with the employees right to selforganization even before the union is registered.164

The ill-timed letters of resignation from the union members

3. INTERFERENCE IN THE EMPLOYEES RIGHT TO


SELF-ORGANIZATION.

Sugarcane Workers Food and General Trade, 167 the

Labor Code.
In General

Milling

Corporation

v.

CA, 166 the

Supreme Court considered the act of the employer in


presenting the letters between February to June 1993 by
thirteen (13) union members signifying their resignation from
the union clearly indicative of the employers pressure on its
employees. The records show that the employer 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 the employers desperate
attempt to cast doubt on the legitimate status of the union.

indicate that the employer had interfered with the right of its
employees to self-organization. Because of such act, the
employer was declared guilty of unfair labor practice.
In Hacienda Fatima v. National Federation of

Supreme Court upheld the factual findings of the NLRC and

a. Interference is always ULP.

the Court of Appeals that from the employers refusal to

The judicial dictum is that any act of interference by

bargain to its acts of economic inducements resulting in the

the employer in the exercise by employees of their right to

promotion of those who withdrew from the union, the use of

self-organization constitutes an unfair labor practice. This is

armed guards to prevent the organizers to come in, and the

the very core of ULP.

dismissal of union officials and members, one cannot but

In Carmelcraft Corporation v. NLRC,165 petitioner


company invoked as reason to justify the cessation of its
operations the fact that it sustained losses in the amount of
P1,603.88 as of December 31, 1986. There is no report,

conclude that the employer did not want a union in its


hacienda - a clear interference in the right of the workers to
self-organization. Hence, the employer was held guilty of
unfair labor practice.

however, of its operations during the period after that date,

In De Leon v. NLRC and Fortune Tobacco

that is, during the succeeding seven and a half months

Corporation,168 the Supreme Court held that based on the

before it decided to close its business. Significantly, the

facts, there is sufficient ground to conclude that respondents

company is capitalized at P3 million. Considering such a

were guilty of interfering with the right of petitioners to self-

substantial investment, a loss in the paltry sum of less than

organization which constitutes an unfair labor practice under

P2,000.00 could hardly be considered serious enough to call

Article 248(a) of the Labor Code. Petitioners who are security

for the closure of the company. This justification is hardly

guards, have been employed with Fortune Integrated

credible; in fact, it is preposterous when viewed in the light of

Services, Inc. (FISI) since the 1980s and have since been

the other relevant circumstances. The real reason for the

posted at the premises of Fortune Tobacco Corporation

decision of the petitioners to cease operations was the

(FTC) in its main factory plant, tobacco redrying plant and

establishment of respondent Carmelcraft Employees Union.

warehouse. It appears from the records that FISI, while

It was apparently unwelcome to the corporation, which would

having its own corporate identity, was a mere instrumentality

rather shut down than deal with the union. The company had

of FTC, tasked to provide protection and security in the

in fact suggested that it might decide not to close the

company premises. The records show that the two

business if the employees were to affiliate with another union

corporations had identical stockholders and the same

56

business address. FISI also had no other clients except FTC


and other companies belonging to the Lucio Tan group of
companies. Moreover, the early payslips of petitioners show
that their salaries were initially paid by FTC. To enforce their
rightful benefits under the laws on labor standards,
petitioners formed a union which was later certified as the
bargaining agent of all the security guards. On February 1,
1991, the stockholders of FISI sold all their participations in
the corporation to a new set of stockholders which renamed
the corporation as Magnum Integrated Services, Inc. (MISI) .
On October 15, 1991, FTC, without any reason, preterminated its contract of security services with MISI and
contracted two other agencies to provide security services
for its premises. This resulted in the displacement of
petitioners. As MISI had no other clients, it failed to give new
assignments to petitioners. Petitioners have remained
unemployed since then. All these facts indicate a concerted
effort on the part of respondents to remove petitioners from
the company and thus abate the growth of the union and
block its actions to enforce their demands in accordance with
the labor standards laws.
It was likewise held in Insular Life Assurance Co. ,
Ltd. , Employees Association-NATU v. Insular Life Assurance
Co. , Ltd. ,169 that it is an act of interference for the employer
to send individual letters 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
activities are unfair labor practices because they tend to
undermine the concerted activity of the employees, an
activity to which they are entitled free from the employer's
molestation.
b. Formation of a union is never a valid ground to
dismiss.
In ruling in Mark Roche International v.
NLRC,170 that
the
private
respondents
were
not
constructively dismissed but illegally dismissed, it was
established that it was the filing of the petition for certification
election and organization of a union within the company
which led petitioners to dismiss private respondents and not
petitioners' allegations of absence or abandonment by
private respondents. Evidently, it was after receiving the
notice of hearing of the petition for certification election on
October 27, 1992 that petitioners immediately told private
respondents that they were no longer employed.
The
formation of a labor union has never been a ground for valid
termination, and where there is an absence of clear, valid
and legal cause, the law considers the termination illegal.171

What transpired in the 2014 case of T & H


Shopfitters Corp. /Gin Queen Corp. v. T & H Shopfitters
Corp. /Gin Queen Workers Union,172 also indicates unfair
labor practice on the part of the employer. Here, a day after
the initial meeting to form the union, 173 petitioners barred 17
employees from entering petitioners factory premises
located in Castillejos, Zambales, and ordered them to
transfer to T&H Shopfitters warehouse at Subic Bay
Freeport Zone (SBFZ) purportedly because of its expansion.
Afterwards, the said 17 employees were repeatedly ordered
to go on forced leave due to the unavailability of work. They
were not given regular work assignments while
subcontractors were continuously hired to perform their
functions.
After the conduct of a certification election was
ordered by the DOLE, the efforts of petitioners at preventing
respondent union from being certified as a bargaining agent
intensified. Petitioners relocated its office and workers to
Cabangan, Zambales which respondents discovered was a
talahiban or grassland. The union officers and members
were made to work as grass cutters in Cabangan, under the
supervision of a Barangay Captain. Due to these
circumstances, the employees assigned in Cabangan did not
report for work. As a consequence, the THS-GQ Union
president was made to explain why he should not be
terminated for insubordination. The other employees who
likewise failed to report in Cabangan were meted out with
suspension.
A day before the certification election, petitioners
sponsored a field trip to Iba, Zambales, for its employees.
The officers and members of the THS-GQ Union were
purportedly excluded from the field trip. On the evening of
the field trip, a sales officer of petitioners campaigned
against the union in the forthcoming certification election. On
the day of the certification election, the employees were
escorted from the field trip to the polling center in Zambales
to cast their votes. Due to the heavy pressure exerted by
petitioners, the votes for no union prevailed. The following
week after the certification elections were held, petitioners
retrenched THG-GQ union officers and members assigned at
the Zambales plant. Respondents claimed that the
workweeks of those employees in the SBFZ plant were
drastically reduced to only three (3) days in a month.
The Supreme Court declared that all the acts of
petitioners described above, taken together, constitute unfair
labor practice. Such were all orchestrated to restrict
respondents free exercise of their right to self-organization.
Petitioners undisputed actions prior to and immediately
before the scheduled certification election, while seemingly
innocuous, unduly meddled in the affairs of its employees in
selecting their exclusive bargaining representative.
c. It is ULP to dismiss a union officer or an employee for
his union activities.
Article 263(c) of the Labor Code provides that it is
an act of union-busting to dismiss from employment any
union officers who were duly elected in accordance with the
union constitution and by-laws where the existence of the
union is threatened. Union-busting is an unfair labor practice.
In Colegio de San Juan de Letran v. Association
of Employees and Faculty of Letran, 174 the outright
termination for alleged insubordination of the union president
while the CBA negotiation was on-going was declared as an
act of union-busting as it interfered with the employees right
to self-organization. The factual backdrop of the termination
of the union president leads to no other conclusion but that
she was dismissed in order to strip the union of a leader who
would fight for the right of her co-workers at the bargaining
table.

56

In Cathay Pacific Steel Corp. v. Hon. CA, 175 the act of


the employer in dismissing a supervisory employee (Personnel
Superintendent) on account of his union activities related to the
formation of the supervisory union was held an unfair labor
practice.

Paragraph [b] of Article 248 describes what is


commonly known as yellow dog contract. It is one which
exacts from workers as a condition of employment that they

According to Samahang Manggagawa ng Via


Mare v. Noriel,176 to dismiss union members in order to
ensure the defeat of the union in the certification election is
an unfair labor practice.

shall not join or belong to a labor organization, or attempt to

4. INTERFERENCE IN INTRA-UNION DISPUTE.

of a labor organization.

Petitioners, in De la Salle University and Dr.


Quebengco v. De la Salle University Employees
Association (DLSUEA-NAFTEU) ,177were declared liable for
unfair labor practice for which they were ordered to pay
respondent union nominal damages in the amount of
P250,000 and attorney's fees in the amount of P50,000
because of their act of temporarily doing the following at the
height of an intra-union dispute involving the election of
officers of respondent union:
(1) Establishing a savings account for the union
where all collected union dues and agency fees
will be deposited and held in trust; and
(2) Discontinuing normal relations with any group
within the union including the incumbent set of
officers.
The said act of petitioners was precipitated by the
request of one of the contending groups in respondent union
for them "to please put on escrow all union dues/agency fees
and whatever money considerations deducted from salaries
of concerned co-academic personnel until such time that an
election of union officials has been scheduled and
subsequent elections has been held. " Petitioners' move
drew respondent union to file a complaint against petitioners
for unfair labor practice, claiming that petitioners unduly
interfered with its internal affairs and discriminated against its
members. The Supreme Court found the said act of
petitioners constitutive of interference, an unfair labor
practice act, because pending the final resolution of the intraunion dispute, respondent's officers remained duly
authorized to conduct union affairs. It bears noting that at the
time petitioners' questioned moves were adopted, there was
a valid and existing CBA between the parties. It thus
behooved petitioners to observe the terms and conditions
thereof bearing on union dues and representation. It is
axiomatic in labor relations that a CBA entered into by a
legitimate labor organization and an employer becomes the
law between the parties, compliance with which is mandated
by express policy of the law.
But in the earlier case of Arellano University
Employees and Workers Union v. CA, 178 the act of the
employer in withholding the union dues and death benefits
was not considered an unfair labor practice because it was
made on the request of union members in the light of their
gripes against the union and its officers. The employer even
deposited the amounts corresponding to the union dues and
death benefits with the Department of Labor and
Employment where the parties could settle the issues among
themselves. The employer therefore cannot be faulted for
unfair labor practice as it in good faith merely heeded the
request of union members.
II.
YELLOW DOG CONTRACT
1. GENERAL DESCRIPTION OF A YELLOW DOG
CONTRACT.

organize one during their period of employment or that they


shall withdraw therefrom in case they are already members

2. COMMON STIPULATIONS IN A YELLOW DOG


CONTRACT.
A typical yellow dog contract embodies the following
stipulations:
(1) A representation by the employee that he is not
a member of a labor organization;
(2) A promise by the employee that he will not join a
union; and
(3) A promise by the employee that upon joining a
labor organization, he will quit his employment.
The act of the employer in imposing such a
condition constitutes unfair labor practice under Article
248(b) of the Labor Code. Such stipulation in the contract is
null and void.
III.
CONTRACTING OUT OF SERVICES AND FUNCTIONS
1. GENERAL RULE.
Paragraph [c] of Article 248 describes when the act
of the employer of contracting out of services or functions
being performed by union members is considered an unfair
labor practice.
As a general rule, the act of an employer in having
work or certain services or functions being performed by
union members contracted out is not per se an unfair labor
practice. This is so because contracting-out of a job, work or
service is clearly an exercise by the employer of its business
judgment and its inherent management rights and
prerogatives. Hiring of workers is within the employers
inherent freedom to regulate its business and is a valid
exercise of its management prerogative subject only to
special laws and agreements on the matter and the fair
standards of justice. The employer cannot be denied the
faculty of promoting efficiency and attaining economy by a
study of what units are essential for its operation. It has the
ultimate right to determine whether services should be
performed by its personnel or contracted to outside
agencies.179
2. WHEN CONTRACTING-OUT BECOMES ULP.
It is only when the contracting out of a job, work or
service being performed by union members will interfere
with, restrain or coerce employees in the exercise of their
right to self-organization that it shall constitute an unfair labor
practice.180 Thus, it is not unfair labor practice to contract out
work for reasons of business decline, inadequacy of facilities
and equipment, reduction of cost and similar reasonable
grounds. The court usually refuses to substitute its judgment
for that of the business decision of the employer in
ascertaining the validity or legality of the motivation for the
contracting out of services.

56

In Shell Oil Workers Union v. Shell Oil Company


of the Philippines, Ltd. ,181 the Supreme Court ruled that the
contracting out of security services to an outside private
security agency to undertake the work of the company
security guards who were re-assigned to other sections of
the company, is violative of the existing CBA. It could have
been purely an exercise of management prerogative on the
part of the company if it were not bound by what was
stipulated in the CBA to continue to maintain a security guard
section at least during the lifetime of the agreement.
Another instance where the employer was declared
guilty of unfair labor practice consequent to contracting out of
services is the 2012 case ofDigital Telecommunications
Philippines, Inc. v. Digitel Employees Union (DEU) . 182 In
this case, petitioner closed Digiserv, a department of the
company, to outsource its call center operation. While losses
may have been a valid reason to close down its operations in
the light of the decline in the volume of transaction of
operator-assisted call services as supported by Financial
Statements for the years 2003 and 2004, during which
Digiserv incurred a deficit of P163,624.00 and P164,055.00,
respectively, it was, however, made in bad faith. In declaring
petitioner guilty of unfair labor practice, the Supreme Court
cited the case of St. John Colleges, Inc. v. St. John
Academy Faculty and Employees Union, 183 where the
closure of petitioners high school department occasioned by
the CBA deadlock and its subsequent reopening one year
later was declared an unfair labor practice act. It was then
held that the closure was done by petitioner school to defeat
the affected employees security of tenure. In this case, the
closure of Digiserv was made after the DOLE Secretary had
issued the first assumption order to enjoin an impending
strike. When Digiserv effected the dismissal of the affected
employees, the union filed another notice of strike.
Significantly, the Secretary of Labor ordered that the second
notice of strike be subsumed by the previous assumption
order. Thus, it was held that as in St. John, bad faith was
manifested by the timing of the closure of Digiserv and the
rehiring of some employees to Interactive Technology
Solutions, Inc. (I-tech) , a corporate arm of Digitel. The
assumption order directs employees to return to work and
the employer to reinstate the employees. The existence of
the assumption order should have prompted Digitel to
observe the status quo. Instead, Digitel proceeded to close
down Digiserv. The Secretary of Labor had to subsume the
second notice of strike in the assumption order. This order
notwithstanding, Digitel proceeded to dismiss the employees.
The timing of the creation of I-tech is dubious. It
was incorporated on 18 January 2005 while the labor
dispute within Digitel was pending. I-techs primary purpose
was to provide call center/customer contact service, the
same service provided by Digiserv. It conducts its business
inside the Digitel office at 110 E. Rodriguez Jr. Avenue,
Bagumbayan, Quezon City. The former head of Digiserv,
Ms. Teresa Taniega, is also an officer of I-tech. Thus, when
Digiserv was closed down, some of the employees
presumably non-union members were rehired by I-tech.
Thus, the closure of Digiserv pending the existence of an
assumption order coupled with the creation of a new
corporation performing similar functions as Digiserv leaves
no iota of doubt that the target of the closure are the union
member-employees. These factual circumstances prove that
Digitel terminated the services of the affected employees to
defeat their security of tenure. The termination of service
was not a valid retrenchment; it was an illegal dismissal of
employees.
In ruling that the closure of Digiserv to outsource its
operations to I-tech constitutes an unfair labor practice act
under Article 248(c) of the Labor Code, the Supreme Court
pronounced:

It needs to be mentioned too that the


dismissal constitutes an unfair labor practice
under Article 248(c) of the Labor Code which
refers to contracting out services or functions
being performed by union members when such
will interfere with, restrain or coerce employees
in the exercise of their rights to selforganization. At the height of the labor dispute,
occasioned by Digitels reluctance to negotiate
with the Union, I-tech was formed to provide,
as it did provide, the same services performed
by Digiserv, the Union members nominal
employer.
xxx
Indeed, while we have found that the
closure of Digiserv was undertaken in bad faith,
badges thereof evident in the timing of
Digiservs closure, hand in hand, with I-techs
creation, the closure remains a foregone
conclusion. There is no finding, and the Union
makes no such assertion, that Digiserv and Itech are one and the same corporation. The
timing of Digiservs closure and I-techs ensuing
creation is doubted, not the legitimacy of I-tech
as a business process outsourcing corporation
providing both inbound and outbound services
to
an
expanded
local
and
international clientele.
The finding of unfair labor practice hinges
on Digitels contracting-out certain services
performed by union member-employees to
interfere with, restrain or coerce them in the
exercise of their right to self-organization.
The primordial issue in the 2013 case of BPI
Employees Union-Davao City -FUBU (BPIEU-Davao CityFUBU) v. Bank of the Philippine Islands (BPI), 184 is
whether or not the act of respondent BPI to outsource the
cashiering, distribution and bookkeeping functions to BPI
Operations Management Corporation (BOMC) is in
conformity with the law and the existing CBA. Particularly in
dispute is the validity of the transfer of twelve (12) former
FEBTC employees to BOMC, instead of being absorbed in
BPI after the corporate merger. Petitioner union claims that a
union shop agreement is stipulated in the existing CBA. It is
unfair labor practice for employer to outsource the positions
in the existing bargaining unit, citing the case of Shell Oil
Workers Union v. Shell Oil Company of the Philippines,
Ltd.185
A finding of ULP necessarily requires the alleging
party to prove it with substantial evidence. Unfortunately, the
union failed to discharge this burden. Consequently, in ruling
that respondent BPI did not commit ULP, the Supreme Court
cited the following ratiocinations:
(1) The unions reliance on the Shell Oil case is
misplaced. The rule now is covered by Article 261 of the
Labor Code. Clearly, only gross violations of the economic
provisions of the CBA are treated as ULP. Otherwise, they
are mere grievances. In the present case, the alleged
violation of the union shop agreement in the CBA, even
assuming it was malicious and flagrant, is not a violation of
an economic provision in the agreement.
(2) The provisions relied upon by the union were
those articles referring to the recognition of the union as the
sole and exclusive bargaining representative of all rank-andfile employees, as well as the articles on union security,
specifically, the maintenance of membership in good
standing as a condition for continued employment and the
union shop clause. It failed to take into consideration its
recognition of the banks exclusive rights and prerogatives,
likewise provided in the CBA, which included the hiring of

56

employees, promotions, transfers, and dismissals for just


cause and the maintenance of order, discipline and efficiency
in its operations.
(3) The union, however, insists that jobs being
outsourced to BOMC were included in the existing
bargaining unit, thus, resulting in a reduction of a number of
positions in such unit. The reduction interfered with the
employees right to self-organization because the power of a
union primarily depends on its strength in number. It is
incomprehensible how the reduction of positions in the
collective bargaining unit interferes with the employees right
to self-organization because the employees themselves were
neither transferred nor dismissed from the service. As the
NLRC clearly stated: In the case at hand, the union has not
presented even an iota of evidence that petitioner bank has
started to terminate certain employees who are members of
the union. In fact, what appears is that the Bank has exerted
utmost diligence, care and effort to see to it that no union
member has been terminated. In the process of the
consolidation or merger of the two banks which resulted in
increased diversification of functions, some of these nonbanking functions were merely transferred to the BOMC
without affecting the union membership. BPI stresses that
not a single employee or union member was or would be
dislocated or terminated from their employment as a result of
the Service Agreement. Neither had it resulted in any
diminution of salaries and benefits nor led to any reduction of
union membership. As far as the twelve (12) former FEBTC
employees are concerned, the union failed to substantially
prove that their transfer, made to complete BOMCs service
complement, was motivated by ill will, anti-unionism or bad
faith so as to affect or interfere with the employees right to
self-organization.
(4) It is to be emphasized that contracting out of
services is not illegal per se. It is an exercise of business
judgment or management prerogative. Absent proof that the
management acted in a malicious or arbitrary manner, the
Court will not interfere with the exercise of judgment by an
employer. In this case, bad faith cannot be attributed to BPI
because its actions were authorized by CBP Circular No.
1388, Series of 1993 issued by the Monetary Board of the
then Central Bank of the Philippines (now Bangko Sentral ng
Pilipinas) .
IV.

If warranted by circumstances, a CBA may be


suspended for more than the usual 5-year lifetime thereof.
During the period of suspension, the parties may mutually
agree that the exclusive bargaining unions status shall
continue to be recognized as such. The question is, does this
prolonged recognition tantamount to making the union
company-dominated? This poser was answered in the
negative in Rivera v. Espiritu,189 where the CBA between
the management of Philippine Airlines (PAL) and the
bargaining union, Philippine Airlines Employees Association
(PALEA) , with expiry date of September 30, 2000, was
mutually agreed by the parties to be suspended until 2008, to
prevent the closure of PAL because of severe financial
losses. It was accordingly stipulated in the agreement of
suspension that:
a.
PAL
shall
continue
recognizing PALEA as the duly
certified-bargaining agent of the
regular rank-and-file ground employees
of the Company;
Petitioners allege that the 10-year suspension of
the CBA under the PAL-PALEA agreement virtually installed
PALEA as a company union for said period, amounting to
unfair labor practice, in violation of Article 253-A of the Labor
Code mandating that an exclusive bargaining agent serves
for five years only. The Supreme Court, however, disagreed
and pronounced 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.
4. ILLUSTRATIVE CASES OF COMPANY UNION.

1. COMPANY INITIATED, DOMINATED OR ASSISTED


UNION.

In Kapisanan Ng Mga Manggagawa Ng Alak v.


Hamilton Distillery Company,190 there were two unions
existing in the company, namely: Kapisanan ng mga
Manggagawa ng Alak (NAFLU) , and respondent Hamilton
Workers' Union, (Workers' Union) . The company preferred
the latter union over the former. It asked the president of the
former to dissolve NAFLU and when he refused, he was
dismissed. Subsequently, some members of NAFLU
resigned therefrom and joined the Workers' Union because
otherwise they would be dismissed by the Company and
those who remained affiliated with NAFLU were allowed to
work only two (2) days a week. Later, 52 employees who are
members of NAFLU were also terminated for refusing to join
the Workers Union. Because of these circumstances, the
Supreme Court declared that the Workers Union is a
company union.

Paragraph [d] of Article 248 considers it an unfair


labor practice to initiate, dominate, assist or otherwise
interfere with the formation or administration of any labor
organization, including the giving of financial or other support
to it or its organizers or supporters. Such union is
calledcompany union as its formation, function or
administration has been assisted by any act defined as unfair
labor practice under the Labor Code.186

In Oceanic Air Products v. CIR,191 several


employees were forced by company officers to join a union.
No member of the union had been dismissed despite the
implementation of a retrenchment policy which resulted in
the dismissal of other employees who are officers and
members of another union. After the dismissals, the
company hired several laborers. All these circumstances
indicate that the union is company-dominated.

2. ULP CHARGE OF COMPANY DOMINATION AGAINST


UNION, A PREJUDICIAL QUESTION THAT BARS
HOLDING OF CERTIFICATION ELECTION.

In Philippine American Cigar and Cigarette


Factory Workers Independent Union v. Philippine
American Cigar and Cigarette Manufacturing Co. , 192 it
was pronounced that one indication that the union is
company-dominated is the act of the employer in securing
authorization cards from employees and by immediately
granting the union exclusive recognition as a bargaining
agent and entering into a contract therewith although it was
not the duly authorized representative of the employees.
Another is when the union approached the management
rather than the employees in getting the union organized and
management extended the requested assistance to the
union. The acts of the company in soliciting membership and
allowing union activities to be held during working time and

COMPANY UNION

While generally, the pendency of an unfair labor


practice case filed against a labor organization participating
in the certification election does not stay the holding
thereof,187 however, the pendency of a formal charge of
company domination against one of the unions which is
participating in the certification election is a prejudicial
question that bars the holding thereof until its final
resolution.188
3. SUSPENSION OF CBA FOR A LONG PERIOD DOES
NOT MAKE THE UNION COMPANY-DOMINATED.

56

coercing employees to join the union under threat of


dismissal or demotion are clear indicia of company
domination.
193

In Rizal Cement Workers Union v. Madrigal and


Co. ,

200

it was held that for discrimination by reason of union

In Davao Free Workers Front v. CIR, the


following acts of respondent employer, 7-UP Bottling
Company of the Philippines at its Davao branch, were cited
as indicia that the union was company-dominated: It refused
to bargain with petitioner union; it interfered with and coerced
its members to vote for its hand-picked candidate as
president of petitioner union; it required the members of
petitioner union to join the Seven-Up Employees Association,
a newly organized labor union obviously sponsored and
favored by it with which it immediately executed a CBA
granting the members of such new union fringe benefits
while refusing to bargain with petitioner union regarding the
renewal of their just-expired contract and instead foisting
upon petitioner union its unilateral version of a CBA; and it
filed a notice of lock-out and refused entry to members of
petitioner union when the latter refused to accept its
unilateral contract version. These union-busting and
discriminatory acts led petitioner union justifiably to declare a
strike against respondents unfair labor practices.

membership to be considered an unfair labor practice, the

In Progressive Development Corporation v.


CIR,194 several employees were dismissed because of their
refusal to resign from their union and join the other union
being supported and aided by the company. It was ruled that
their dismissal because of their union activities is unfair labor
practice.
V.

renounce their union membership or as a deterrent for non-

same must have

been committed

to encourage or

discourage such membership in the union. Here, this cannot


be said of the act of the company complained of. As clearly
established by evidence, the refusal to allow the employees
to work and the requirement that they should stay out of the
premises in the meantime while the strike was still going on
in the factory was borne out of the companys justified
apprehension and fear that sabotage might be committed in
the warehouse where the products, machinery and spare
parts were stored. It has never been shown that the act of
the company was intended to induce the employees to

members to affiliate therewith, nor as a retaliatory measure


for the activities of the union or in the furtherance of the
cause of the union.
In Manila Pencil Co. , Inc. v. CIR, 201 it was ruled
that even assuming that business conditions justify the

DISCRIMINATION

dismissal of employees, it is an unfair labor practice of

1. CONCEPT.

employer to dismiss permanently only union members and

Discrimination has been defined as the failure to


treat all persons equally when no reasonable distinction can
be found between those favored and those not
favored.195 There is discrimination only when one is denied
privileges which are granted to others under similar
conditions and circumstances.196 Thus, before a claim for
discrimination can prosper, it must be established that first,
there is no reasonable distinction or classification that can be
obtained between persons belonging to the same class
and, second, persons belonging to the same class have not
been treated alike.197 It must be stressed, however, that
discrimination per se is not unlawful. There can be no
discrimination where the employees concerned are not
similarly situated.198

not non-unionists.
In Manila Railroad Co. v. Kapisanan ng mga
Manggagawa sa Manila Railroad Co., 202 the nonregularization of long-time employees because of their
affiliation with the union while new employees were
immediately regularized was declared an act of
discrimination.
In Luzon Stevedoring Corporation v. CIR,203 it
was pronounced that the disapproval of the application for
leave of absence with pay does not necessarily indicate
discrimination, unless it could be shown that such
disapproval was due to the employees union membership or
activity.
In AHS/Philippines
Employees
Union
v.
NLRC,204 the employer transferred the union president from
the main office in Manila to Cebu at the time when the union
was still being organized. It was held that the uneven
application of its marketing plan resulting in the said transfer
of the union president is patently an act of discrimination
constitutive of unfair labor practice.

2.
DISCRIMINATION
DISTINGUISHED.
Discrimination

AND

should

be

CLASSIFICATION,

distinguished

from

classification. While discrimination is considered an unfair


labor practice, classification is not because it merely
differentiates the employees in accordance with their
respective jobs and accords them the appropriate levels of
pay or benefits due them by reason thereof.
3. COVERAGE OF PROHIBITION.
What is prohibited as unfair labor practice under the
law is 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.199
4. MATERIALITY OF
DISCRIMINATORY ACT.

PURPOSE

OF

ALLEGED

In Bondoc v. CIR,205 the employee charged his


employer as having discriminated against him in the grant of
promotion because he was not a member of any labor union.
The Supreme Court held that the employees contention that
he was discriminated against to force him to join a labor
organization is untenable because he failed to mention any
specific union. Moreover, it is not believable for the employer
to harass and oppress an employee to force him to join a
union, for it cannot be comprehended how his joining a union
would benefit his employer.
5. DISMISSING ONLY A FEW BUT NOT ALL OF THE
ERRING EMPLOYEES, EFFECT.
Employees have no right to continue working upon
their own terms while rejecting the standards desired by their
employer. It is not an unfair labor practice for employer to

56

dismiss employees who engage in slowdown. This holds true


even if the employer dismissed only some of the employees
who participated in the slowdown where such dismissal is
made to serve as an example to stop the slowdown and not
for discriminatory reasons.206

In Davao Free Workers Front v. CIR,209 involving a


valid strike occasioned by the ULP of the employer, it was
held that requiring medical examination as a condition
precedent for reinstatement or return to work is not proper.
This is so because the filing and pendency of an unfair labor
practice case as in the case at bar presupposes a continuing
employer-employee relationship and when the case is
decided in favor of the workers, this relationship is in law
deemed to have continued uninterruptedly notwithstanding
their unlawful dismissal or the lawful strike and stoppage of
work and, hence, seniority and other privileges are preserved
in their favor. To require them to undergo a physical or
medical examination as a precondition of reinstatement or
return to work simply because of the long pendency of their
case which is due to no fault of theirs would not only defeat
the purpose of the law and the constitutional and statutory
mandates to protect labor but would work to their unfair
prejudice as aggrieved parties and give an undue advantage
to employers as the offenders who have the means and
resources to wage attrition and withstand the bane of
protracted litigation. Hence, the aggrieved workers may be
subjected to periodic physical or medical examination as old
reinstated workers, but not as a precondition to their
reinstatement or return to work with the important
consequence that if they are found to be ill or suffering from
some disability, they would be entitled to all the benefits that
the laws and company practices provide by way of
compensation, medical care, disability benefits and
gratuities, etc. to workers.

upon presentation by them of certification of their physical


fitness for work by a government physician.
7. RECALL OF SOME BUT NOT ALL STRIKERS, EFFECT.
Recall of workers clearly falls within the ambit of
management prerogative.212 The employer can exercise this
prerogative without fear of any liability so long as it is done in
good faith for the advancement of its interest and not for the
purpose of defeating or circumventing the rights of its
employees under special laws or valid agreements. It is valid
as long as it is not performed in a malicious, harsh,
oppressive, vindictive or wanton manner or out of malice or
spite.
InGreat Pacific Life Employees Union v. Great
Pacific Life Assurance Corporation,213 it was ruled that the
act of the respondent company in opting to reinstate all the
strikers except Domingo and de la Rosa is an option taken in
good faith for the just and lawful protection and advancement
of its interest. Readmitting the union members to the
exclusion of Domingo and de la Rosa was nothing less than
a sound exercise of management prerogative, an act of selfpreservation in fact, designed to insure the maintenance of
peace and order in the company premises. The dismissal of
Domingo and de la Rosa who had shown their capacity for
unmitigated mischief was intended to avoid a recurrence of
the violence that attended the fateful strike.
8. DISCRIMINATION IN GRANT OF BONUS.
In a case decided by the NLRC, Philippine
Blooming Mills Employees Organization [PAFLU] v.
Philippine Blooming Mills Co., Inc.,214 the employer
reserved its right under the CBA to grant better bonus to
those who are exceptionally good or efficient. It was held that
it is neither discriminatory nor an unfair labor practice for said
employer to give such bonus to non-union members, it being
clear that many union members were also given the bonus
and it was purely a valid exercise of management
prerogative.
But in Manila Hotel Co. v. Pines Hotel Employees
Association,215 it was enunciated that there was unjust
discrimination when management departed from its previous
practice of dividing equally to all employees certain
percentage of its net profit as Christmas bonus - giving only
to its employees in the operation where there was no union
and not giving any to its unionized establishments.
9. RUNAWAY SHOP.
A runaway shop is a form of discriminatory act of
the employer. Technically, it is defined as an industrial plant
moved by its owners from one location to another to escape
union labor regulations or state laws. The term is also used
to describe a plant moved to a new location in order to
discriminate against employees at the old plant because of
their union activities.216 A runaway shopin this sense is a
relocation motivated by anti-union animus rather than for
legitimate business reasons.217

d. When physical fitness is declared a valid precondition for re-admission to work.


In contrast to the said Davao Free Workers case,
is Mercury Drug Co., Inc. v. CIR,210 where it was held that
an employer should not be compelled to reinstate an
employee who is no longer physically fit for the job from
which he was ousted. However, the employee can be
reinstated after securing a certification of his physical fitness
from a government physician. In accordance with
this Mercury Drug ruling, it was likewise ruled in Jackbilt
Concrete Block Co., Inc. v. Norton & Harrison Co. and
Jackbilt Concrete Block Co. Labor Union-NLU, 211 that the
strikers, before they can be reinstated, should undergo the
required usual physical and medical examinations by
petitioners company physician to determine their fitness for
continued work and employment. Thus, the petitioners were
directed to immediately reinstate the strikers formerly found
to have been suffering from tuberculosis and other illness

In A. C. Ransom Labor Union-CCLU v.


NLRC,218 the run-away corporation was declared liable not
only for the backwages but also for the reinstatement of the
terminated employees of A. C. Ransom (Phils. ) Corporation.
In so holding, the Supreme Court declared that aggravating
Ransom's clear evasion of payment of its financial
obligations
is
the
organization
of
a "run-away
corporation," the Rosario Industrial Corporation, in 1969 at
the time the unfair labor practice case was pending before
the Court of Industrial Relations (CIR) by the same persons
who were the officers and stockholders of Ransom, engaged
in the same line of business as Ransom, producing the same
line of products, occupying the same compound, using the
same machineries, buildings, laboratory, bodega and sales
and accounts departments used by Ransom and which is still
in existence. Both corporations were close corporations
owned and managed by members of the same family. Its
organization proved to be a convenient instrument to avoid

6. IMPOSITION OF CONDITIONS ON RETURNING


STRIKERS, EFFECT.
a. Requiring to fill up forms, valid.
The act of the employer in requesting returning
strikers to fill up forms to indicate the date of their availability
for work is not an unfair labor practice.207
b. Promise not to destroy company property,
valid.
In the same vein, the requirement by the company
that returning strikers should promise not to destroy
company property and no acts of reprisal should be made
against union members who did not participate in the strike is
not an unfair labor practice. It is an act of self-preservation,
designed to maintain industrial peace in the company
premises.208
c. Medical examination as pre-condition to readmission for work, not proper.

56

payment of backwages and the reinstatement of the 22


workers. This is another instance where the fiction of
separate and distinct corporate entities should be
disregarded. It is very obvious that the second corporation
seeks the protective shield of a corporate fiction whose veil
in the present case could, and should, be pierced as it was
deliberately and maliciously designed to evade its financial
obligation to its employees.
VI.
FILING OF CHARGES OR GIVING OF TESTIMONY
1. CONCEPT.
Under paragraph [f] of Article 248 of the Labor
Code, it is an unfair labor practice for an employer to
dismiss, discharge or otherwise prejudice or discriminate
against an employee for having given or being about to give
testimony under the Labor Code.219
2. THE ONLY ULP NOT REQUIRED TO BE RELATED TO
EMPLOYEES EXERCISE OF THE RIGHT TO SELFORGANIZATION AND COLLECTIVE BARGAINING.
It must be underscored that Article 248(f) is the only
unfair labor practice that need not be related to the exercise
by the employees of their right to self-organization and
collective bargaining.220
In Philippine American Cigar and Cigarette
Factory Workers Independent Union v. Philippine
American Cigar and Cigarette Manufacturing Co., 221 the
employer dismissed the brother of an employee who filed a
case against it. The Supreme Court ruled that such act of the
employer constitutes unfair labor practice. Although Section
4[a] 5 of R.A. No. 875222 would seem to refer only to the
dismissal of the one who filed charges against the company
as constituting an unfair labor practice, the legislative intent
is to assure absolute freedom of the employees to establish
labor organizations and unions as well as to proffer charges
for violation of labor laws. If the dismissal of an employee
due to the filing by him of said charges would be and is an
undue restraint upon said freedom, the dismissal of his
brother owing to the non-withdrawal of the charges of the
former would be and constitute as much, in fact a greater
and more effective, restraint upon the same freedom. What
is prohibited to be done directly shall not be allowed to be
accomplished indirectly.
In Itogon-Suyoc Mines, Inc. v. Baldo, 223 it was
declared that an unfair labor practice was committed by the
employer when it dismissed the worker who had testified in
the hearing of a certification election case despite its prior
request for the employee not to testify in the said proceeding
accompanied with a promise of being reinstated if he
followed said request.224
VII.
CBA-RELATED ULPs
1. THREE (3) CBA-RELATED ULPs.
Article 248 enunciates three (3) CBA-related unfair
labor practices, to wit:
1. To violate the duty to bargain collectively as
prescribed in the Labor Code.225
2. To pay negotiation or attorneys fees to the union
or its officers or agents as part of the settlement
of any issue in collective bargaining or any other
dispute.226
3. To violate a collective bargaining agreement.227

B. Right to collective bargaining; 1. Duty to bargain


collectively; (a) When there is absence of a CBA; (b)
When there is a CBA, supra.
Nos. 2 and 3 above will be discussed
hereunder seriatim.
VII-A.
PAYMENT OF NEGOTIATION AND ATTORNEYS FEES
1. WHEN PAYMENT CONSIDERED ULP.
Article 248(h) of the Labor Code considers as an
unfair labor practice the act of the employer in paying
negotiation fees or attorneys fees to the union or its officers
or agents as part of the settlement of any issue in collective
bargaining or any other dispute.
2. NEGOTIATION FEES VS. ATTORNEYS FEES.
To enlighten further, the term negotiation fees is
different from attorneys fees. The law uses negotiation
fees to justify payment of fees to non-lawyers who are not
entitled to attorneys fees.
The inclusion in Article 222(b) 228 of negotiation fees
or similar charges of any kind is meant to address the issue
of fees that should be paid to non-lawyers who assist the
contracting union in its CBA negotiations and dealings with
the employer. Being non-lawyers, they cannot be paid nor
are they entitled to attorneys fees.
This principle has been affirmed in Philippine
Association of Free Labor Unions (PAFLU) v. Binalbagan
Isabela Sugar Company,229 where the sole issue was
whether a non-lawyer can recover attorney's fees for legal
services rendered. The Court of Industrial Relations (CIR) in
this case awarded 25% of the backwages as compensation
for professional services rendered in the case, 10% of which
was ordered paid to Quintin Muning, a non-lawyer, and the
rest to two (2) lawyers. This award to Quintin Muning is
sought to be voided. In so voiding, the Supreme Court
considered it immoral and cannot be justified. An award by a
court of attorney's fees is no less immoral in the absence of a
contract, as in the present case.
The existence of an attorney-client relationship is a
condition to the recovery of attorney's fees. Such a
relationship cannot exist unless the client's representative in
court be a lawyer. Since respondent Muning is not one, he
cannot establish an attorney-client relationship with his
individual clients, or with PAFLU, and he cannot, therefore,
recover attorney's fees.
The fact that non-lawyers are allowed to appear in
labor proceedings does not justify their entitlement to
attorneys fees.230 A lawyer cannot share his attorneys fees
with a non-lawyer in situations where a lawyer engaged by
the union works with, or is assisted by, non-lawyers, like
union organizers or federation representatives who may lay a
claim for their services alongside the lawyer. This is
proscribed under the Code of Professional Responsibility for
Lawyers,231 thus:
Rule 9.02 - A lawyer shall not divide or
stipulate to divide a fee for legal services with
persons not licensed to practice law, xxx
Hence, in this situation, the fees of the lawyer
should properly be denominated as attorneys fees and
those of the non-lawyers, as negotiation fees or similar
charges.
3. ATTORNEYS FEES AND NEGOTIATION FEES
SHOULD BE PAID FROM UNION FUNDS.

No. 1 above is discussed earlier under a separate


topic in the syllabus entitled VII. Labor Relations Law xxx

56

Article 222(b) of the Labor Code requires that such


attorneys fees, negotiation fees or similar charges should be
paid from the union funds. These fees cannot be collected
from the individual employees.232 Any contract, agreement or
arrangement of any sort to the contrary shall be null and
void.233
Clearly, Article 222(b) prohibits the payment of
attorneys
fees
only
when
it
is
effected
through forced contributions from the workers from theirown
funds as distinguished from the union funds. The purpose of
the provision is to prevent imposition on the workers of the
duty to individually contribute their respective shares in the
fees to be paid the attorney for his services on behalf of the
union in its negotiations with the employer.234 This is so
because it is the union, not the employees, which is
obligated to the lawyer.235
4. COUNTERPART PROVISION IN ARTICLE 249(e) .
On the part of the union, asking for or accepting
attorneys fees or negotiation fees from the employer as part
of the settlement of any issue in collective bargaining or any
other dispute is considered an unfair labor practice under
Article 249(e) of the Labor Code.
VII-B.
VIOLATION OF THE CBA
1. CORRELATION.
Article 248(i) of the Labor Code should be read in
relation to Article 261 thereof. Under Article 261, as
amended,236 violations of a CBA, except those which are
gross in character, shall no longer be treated as an unfair
labor practice and shall be resolved as grievances under the
CBA. Gross violations of CBA shall mean flagrant and/or
malicious refusal to comply with the economic provisions of
such agreement.237
2. CASE LAW.
The act of the employer in refusing to implement the
negotiated wage increase stipulated in the CBA, which
increase is intended to be distinct and separate from any
other benefits or privileges that may be forthcoming to the
employees, is an unfair labor practice.238
Refusal for a considerable number of years to give
salary adjustments according to the improved salary scales
in the CBA is an unfair labor practice.239
The act of the employer in permitting non-union
members to participate in the service charges, contrary to
the stipulation in the CBA, is an unfair labor practice.240
VIII.
BURDEN OF PROOF
IN ULP CASES UNDER ARTICLE 248
In unfair labor practice cases against employers, it
is the union which has the burden to present substantial
evidence to support its allegation of unfair labor practice
committed by the employer. It is not enough that the union
believed that the employer committed unfair labor practice
when the circumstances clearly negate even a prima
facie showing to warrant such a belief.241
IX.

PERSONS CRIMINALLY LIABLE


FOR ULPs OF EMPLOYER
As provided under the last paragraph of Article 248,
only the officers and agents of corporations, associations or
partnerships who have actually participated in, authorized or
ratified unfair labor practice shall be held criminally liable
therefor. Absent any such participation, authorization or
ratification, the officers and agents of said entities cannot be
held personally liable for unfair labor practice.
(c)
ULP OF LABOR ORGANIZATIONS
1. ENUMERATION OF ULPs OF LABOR
ORGANIZATIONS.
Article 249. Unfair Labor Practices of
Labor Organizations. - It shall be unfair labor
practice for a labor organization, its officers,
agents or representatives:
(a) To restrain or coerce employees in
the exercise of their right to selforganization.
However,
a
labor
organization shall have the right to
prescribe its own rules with respect to
the acquisition or retention of
membership;
(b) To cause or attempt to cause an
employer to discriminate against an
employee, including discrimination
against an employee with respect to
whom
membership
in
such
organization has been denied or to
terminate an employee on any ground
other than the usual terms and
conditions under which membership or
continuation of membership is made
available to other members;
(c) To violate the duty, or refuse to
bargain collectively with the employer,
provided it is the representative of the
employees;
(d) To cause or attempt to cause an
employer to pay or deliver or agree to
pay or deliver any money or other
things of value, in the nature of an
exaction, for services which are not
performed or not to be performed,
including the demand for fee for union
negotiations;
(e) To ask for or accept negotiation or
attorneys fees from employers as part
of the settlement of any issue in
collective bargaining or any other
dispute; or
(f) To violate a collective bargaining
agreement.
The provisions of the preceding paragraph
notwithstanding, only the officers, members of
governing boards, representatives or agents or
members of labor associations or organizations
who have actually participated in, authorized or
ratified unfair labor practices shall be held
criminally liable.242
I.
RESTRAINT AND COERCION OF EMPLOYEES

56

IN THE EXERCISE OF THEIR RIGHT TO SELFORGANIZATION

membership or continuation of membership is made


available to other members.
2. COUNTERPART PROVISION.

1. UNION MAY INTERFERE WITH BUT NOT RESTRAIN OR


COERCE EMPLOYEES IN THE EXERCISE OF THEIR
RIGHT TO SELF-ORGANIZE.
Under Article 249(a) , it is ULP for a labor
organization, its officers, agents or representatives to restrain
or coerce employees in the exercise of their right to selforganization. Compared to similar provision of Article 248(a)
of the Labor Code, notably lacking is the use of the
word interfere in the exercise of the employees right to selforganize. The significance in the omission of this term lies in
the grant of unrestricted license to the labor organization, its
officers, agents or representatives to interfere with the
exercise by the employees of their right to self-organization.
Such interference is not unlawful since without it, no labor
organization can be formed as the act of recruiting and
convincing the employees is definitely an act of interference.
It becomes unlawful within the context of paragraph [a] of
Article 249 only when it amounts to restraint or coercion
which is expressly prohibited thereunder.
2. RIGHT TO PRESCRIBE OWN RULES NOT ONLY ON

This ground is the counterpart of the ULP of


employers under Article 248(e) which consists in the act of
discriminating against an employee 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. If the act of discrimination committed by the
employer was instigated by the union, both the employer and
the union may be declared guilty of unfair labor practice.
III.
DUTY OF UNION TO BARGAIN COLLECTIVELY
1. CONCEPT.
Under Article 249(c) , it is ULP for a duly certified
sole and exclusive bargaining union, its officers, agents or
representatives to refuse or violate the duty to bargain
collectively with the employer. This is the counterpart
provision of Article 248(g) respecting the violation by the
employer of its duty to bargain collectively.
2. PURPOSE.

union to prescribe in the same rules with respect to the loss

The obvious purpose of the law is to ensure that the


union will negotiate with management in good faith and for
the purpose of concluding a mutually beneficial agreement
regarding the terms and conditions of their employment
relationship. For instance, it is unfair labor practice for a labor
organization to demand that the employer should negotiate a
CBA with it at a time when it has yet to be certified as the
sole and exclusive bargaining agent of the employees since
the certification election case is still pending. This act
violates the employers right to collectively bargain only with
the sole and exclusive representative of the majority of its
workers.244

of membership therein through various modes allowed by

IV.

ACQUISITION OR RETENTION OF MEMBERSHIP BUT


THE LOSS THEREOF.
Under the same provision, a labor organization is
granted the right to prescribe its own rules with respect to
the acquisition or retention of membership. Although not
expressly mentioned in the law, it is equally the right of the

law, such as resignation, expulsion or impeachment. These


rules are normally embodied in the constitution and by-laws
of the labor organization. Pursuant to this right, the labor
organization can prescribe the proper qualifications for
membership therein as well as the rules and regulations to
be followed by its members in order to retain their
membership in good standing therein.
3. THE RULES MUST BE REASONABLE.
The rules, to be valid, must be reasonable and
within the bounds of the law. Thus, the labor organization
in M. D. Transit v. de Guzman,243 was declared to have
committed unfair labor practice when it expelled a member
just because he filed charges against the union officers.
II.
DISCRIMINATION
1. CONCEPT.
Under Article 249(b) , it is ULP for a labor
organization, its officers, agents or representatives to cause
or attempt to cause an employer to discriminate against an
employee, including discrimination against an employee with
respect to whom membership in such organization has been
denied, or to terminate an employee on any ground other
than the usual terms and conditions under which

ANTI-FEATHERBEDDING DOCTRINE
1. CONCEPT.
Under Article 249(d) , it is ULP for a labor
organization, its officers, agents or representatives to cause
or attempt to cause an employer to pay or deliver or agree to
pay or deliver any money or other things of value, in the
nature of an exaction, for services which are not performed
or not to be performed, including the demand for fee for
union negotiations.
This practice of the union is commonly known as
featherbeddingas it unduly and unnecessarily maintains or
increases the number of employees used or the amount of
time consumed to work on a specific job. This is done by the
employees to unduly secure their jobs in the face of
technological advances or as required by minimum health
and safety standards, among other justifications. These
featherbedding practices have been found to be wasteful and
without legitimate justifications.
2. DEMAND FOR PAYMENT OF STANDBY SERVICES.
A union commits an unfair labor practice under this
provision by causing or attempting to cause an employer to
pay or agree to pay for standby services. Payments for
standing-by, or for the substantial equivalent of standingby, are not payments for services performed within the
meaning of the law. When an employer received a bonafide offer of competent performance of relevant services, it
remains for the employer, through free and fair negotiation,
to determine whether such offer should be accepted and
what compensation should be paid for the work done.245

56

A unions demand for a contract calling for


payments for the presence of one of its members at a jobsite
when no unionists work was being done therein, and when
the employer indicated that it had no need for such labor,
coupled with a strike to make the employer respond to such
demand, is an exaction within the meaning of this law, and
the demand is considered not a bona-fide offer of competent
performance of relevant services.246
A unions demand that a theater corporation employ
maintenance men at its theater is also an arguable violation
of the anti-featherbedding provision of the law where
maintenance men employed at other theaters under union
compulsion did little or no actual work, but were merely
present on the premises during working hours.247
3. DEMAND FOR PAYMENT OF MADE WORK.
Where work is actually done by an employee with
the employers consent, the unions demand that the
employee be compensated for time spent in doing the work
does not violate the law.248 The law leaves to collective
bargaining the determination of what work, if any,
including bona-fidemade work, shall be included as
compensable services and what rate of compensation shall
be paid for it.249
A musicians union has been held not to have
violated the anti-featherbedding provision by refusing to
permit a union band to perform at the opening game of the
baseball season, refusing to permit a union organist to play
at the home games, and picketing the baseball stadium, in
order to force the owner of the baseball team to hire a union
band to play at all weekend home games; or by refusing to
consent to appearances of travelling bands in a theater
unless the theater manager also employs a local orchestra in
connection with certain programs where the local orchestra
is to perform actual and not token services, even though the
theater manager does not need or want to employ the local
orchestra.250
Similarly, a printers union does not violate the antifeatherbedding provision by securing payment of wages to
printers from newspapers for setting bogus - duplicate
forms for local advertisements although the newspaper
already has cardboard matrices to be used as molds for
metal casting from which to print the same advertisements
even though the bogus is ordinarily not used but is melted
down immediately.251
4. DEMAND FOR PAYMENT OF WORK ALREADY
COMPENSATED.
The anti-featherbedding provision has been held
not to bar a union from demanding payment for work for
which the employer has already paid another person. Hence,
a union has been held not guilty of an unfair labor practice in
demanding payment to it of an amount equal to the wages
paid by the employer to a non-union employee for work to
which the unions members were entitled. If the work is
actually done by employees, there can be no conflict with the
anti-featherbedding provision, regardless of whether or not
the persons receiving payment are the ones who performed
the work.252
V.
DEMAND OR ACCEPTANCE
OF NEGOTIATION FEES OR ATTORNEYS FEES
1. CONCEPT.
Under Article 249(e) , it is ULP for a labor
organization, its officers, agents or representatives to ask for
or accept negotiation fees or attorneys fees from employers
as part of the settlement of any issue in collective bargaining
or any other dispute.
2. COUNTERPART PROVISION.

This is the counterpart provision of Article 248(h)


regarding the payment, on the part of the employer, of
negotiation fees or attorneys fees to the union or its officers
or agents as part of the settlement of any issue in collective
bargaining or any other dispute.
3. RATIONALE BEHIND THE PROHIBITION.
The reason for this policy of the law is to prevent
undue influence by the employer on the independence of the
union in its decision over any issues it may have with the
former. Moreover, it is possible that the matter of fixing the
amount of negotiation fees or attorneys fees alone would
present a problem much complicated than the more
substantive issues involving the terms and conditions and
welfare of the workers.
VI.

VIOLATION OF THE CBA


1. CONCEPT.
Under Article 249(f) , it is ULP for a labor
organization, its officers, agents or representatives to violate
a CBA.
2. COUNTERPART PROVISION.
This is the counterpart provision of Article 248(i)
regarding the employers act of violating a CBA. But it must
be noted that under Article 261 of the Labor Code, violation
of the CBA is generally considered merely a grievable issue.
It becomes an unfair labor practice only if the violation is
gross in character which means that there is flagrant and/or
malicious refusal to comply with the economic (as
distinguished from non-economic) stipulations in the CBA.
This principle applies not only to the employer but to the
labor organization as well.
VII.

CRIMINAL LIABILITY FOR ULPs OF LABOR


ORGANIZATION
1. PERSONS LIABLE.
Article 249 is explicit in its provision on who should
be held liable for ULPs committed by labor organizations. It
states that only the officers, members of governing boards,
representatives or agents or members of labor associations
or organizations who have actually participated in, authorized
or ratified unfair labor practices shall be held criminally liable.
2. THE LAW SPEAKS ONLY OF CRIMINAL LIABILITY.
The same provision clearly provides only for the
criminal culpability of those involved in the commission of
ULP by labor organizations. There is nothing therein that
holds any of the persons so held liable for the civil aspect
thereof which may take the form of damages.
For instance, if after expelling a member, the
bargaining union recommends to the employer his
termination pursuant to the union security provision of the
CBA, and the employer approves the same and later on, the
court declares that the dismissal was illegally effected,
normally, the employer is held liable only for the
reinstatement aspect and the union is ordered to pay not
only the resulting backwages but damages as well. As far as
the personal liability of the union officers and the other
persons mentioned in the law is concerned, there is no

56

provision that can hold them therefor. The silence of the law
on this point can only be construed that they are not so liable
therefor.

------------oOo-----------Chapter Seven
LABOR RELATIONS LAW
TOPICS PER SYLLABUS
C. Right to peaceful concerted activities
1. Forms of concerted activities
2. Who may declare a strike or lockout?
3. Requisites for a valid strike
4. Requisites for a valid lockout
5. Requisites for lawful picketing
6. Assumption of jurisdiction by the DOLE Secretary
or Certification of the labor dispute to the NLRC
for compulsory arbitration
7. Nature of assumption order or certification order
8. Effect of defiance of assumption or certification
orders
9. Illegal strike
a) Liability of union officers
b) Liability of ordinary workers
c) Liability of employer
d) Waiver of illegality of strike
10. Injunctions
a) Requisites for labor injunctions
b) Innocent bystander rule
C.
RIGHT TO PEACEFUL CONCERTED ACTIVITIES 1

1. CONSTITUTIONAL FOUNDATION.
The following constitutional tenets are relevant in
connection with the exercise of workers of their right to strike
and picket:
1. Section 18, Article II [Declaration of Principles
and State Policies], 1987 Constitution:
The State affirms labor as a primary
social economic force. It shall protect the
rights of workers and promote their welfare.
2. Section 4, Article III [Bill of Rights], 1987
Constitution:
No law shall be passed abridging the
freedom of speech, of expression, or of the
press, or the right of the people peaceably
to assemble and petition the government for
redress of grievances.
3. Section 3 (Labor) , Article XIII [Social Justice and
Human Rights], 1987 Constitution:
The State shall xxx guarantee the rights
of all workers to self-organization, collective
bargaining and negotiations, and peaceful
concerted activities, including the right
to strike in accordance with law. xxx
2. STATE POLICY ON FREE TRADE UNIONISM AND
FREE COLLECTVE BARGAINING.
It is the policy of the State to encourage free trade
unionism and free collective bargaining. Pursuant thereto,

workers shall have the right to engage in concerted activities


for purposes of (a) collective bargaining or (b) for their
mutual benefit and protection. In the same vein, the
employer may conduct a lockout to redress its grievance
against the commission by the certified bargaining union of
unfair labor practice or to resolve a bargaining impasse.
Under the law, the right of legitimate labor
organizations to strike and picket and of employers to lockout
consistent with the national interest should continue to be
recognized and respected.2
3. EXISTENCE OF AN INDUSTRIAL OR LABOR DISPUTE
NECESSARY.
A strike or lockout may only be justified if there
exists an industrial or labor dispute. As defined in law, the
term industrial or labor disputeincludes any controversy or
matter concerning the terms and conditions of employment
or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the
terms and conditions of employment regardless of whether
the disputants stand in the proximate relation of employer
and employee. 3 In legal parlance, an actual existing labor
dispute subject of a notice of strike or lockout or a case of
actual strike or lockout is referred to as a conciliation case.4
1.
FORMS OF CONCERTED ACTIVITIES
1. FORMS OF CONCERTED ACTIVITIES.
There are three (3) forms of concerted activities,
namely:
1. Strike;
2. Lockout; and
3. Picketing.
2. STRIKE.
a. Definition.
Strike means any temporarystoppage of work by
the concerted action of the employees as a result of
an industrial or labor dispute.5
b. Forms and classification of strikes.
A strike may be classified:
1. As to nature:
a. Legal strike - one called for a valid purpose
and conducted through means allowed by
law.6
b. Illegal strike - one staged for a purpose not
recognized by law or, if for a valid purpose, it
is conducted through means not sanctioned
by law.7
c. Economic strike - one declared to demand
higher wages, overtime pay, holiday pay,
vacation pay, etc.8 It is one which is declared
for the purpose of forcing wage or other
concessions from the employer for which he is
not required by law to grant.9
d. Unfair labor practice (ULP) or political strike one
called
to
protest
against
the
employers unfair labor practices enumerated
in Article 248 of the Labor Code, including
gross violation of the CBA under Article 261
and union-busting under Article 263(c) of the
Labor Code.10
e. Slowdown strike - one staged without the
workers quitting their work but by merely
slackening or reducing their normal work
output.11 It is also called a strike on the
installment plan. 12

56

f. Mass leaves - One where the employees


simultaneously filed leaves of absence based
on various reasons such as, inter alia,
vacation and sick leaves.13
g. Wildcat
strike one
declared
and
staged without the majority approval of the
recognized bargaining agent.14
h. Sitdown strike - one where the workers stop
working but do not leave their place of work.15
i. Overtime boycott one involving the act of the
workers in refusing to render overtime work in
violation of the CBA, resorted to as a means
to coerce the employer to yield to their
demands.16
j. Boycott of products one which involves the
concerted refusal to patronize an employer's
goods or services and to persuade others to a
like refusal.17
k. Attempts to damage, destroy or sabotage plant
equipment and facilities and similar activities;18
l. The sporting by the workers of closely
cropped hair or cleanly shaven heads after
their union filed a notice of strike as a
result of a CBA deadlock is a form of illegal
strike.19
2. As to coverage:
a. General strike one which covers and extends
over a whole province or country. In this kind
of strike, the employees of various companies
and industries cease to work in sympathy with
striking workers of another company. It is also
resorted to for the purpose of putting pressure
on the government to enact certain laborrelated measures such as mandated wage
increases or to cease from implementing a
law which workers consider inimical to their
interest. It is also mounted for purposes of
paralyzing or crippling the entire economic
dispensation.
b. Particular strike one which covers a
particular establishment or employer or one
industry involving one union or federation.
3. As to purpose:
a. Economic strike.20
b. Unfair labor practice strike or political strike.21
4. As to the nature of the strikers action:
a. Partial strike one which consists of
unannounced work stoppages such as
slowdowns,
walkouts
or
unauthorized
extension of rest periods.
b. Sit-down strike.22
c. Slowdown strike.23
5. As to the extent of the interest of strikers:
a. Primary strike refers to a strike conducted by
the workers against their employer, involving a
labor dispute directly affecting them.
b. Secondary strike - refers to a strike staged by
the workers of an employer involving an issue
which does not directly concern or affect their
relationship
but
rather,
by
some
circumstances affecting the workers such as
when the employer persists to deal with a third
person against whom the workers have an
existing grievance. Workers stage this kind of
strike to secure the economic assistance of
their employer to force the third person to

yield to the union on the issues involving it


and said third person.
c. Sympathy strike - refers to a strike where the
strikers have no demands or grievances or
labor dispute of their own against their
employer but nonetheless stage the strike for
the purpose of aiding, directly or indirectly,
other strikers in other establishments or
companies, without necessarily having any
direct relation to the advancement of the
strikers interest. This is patently an illegal
strike.24 An example of asympathy strike is
the welga ng bayan where workers refuse
to render work to join a general strike which
does not involve a labor or industrial dispute
between the strikers and the employer struck
against but it is staged in pursuit of certain
ends such as reduction in the electric power
rates, increase in the legislated wages, etc.
3. LOCKOUT.
Lockout means the temporaryrefusal by an
employer to furnish work as a result of an industrial or labor
dispute.25
It consists of the following:
1. Shutdowns;
2. Mass retrenchment and dismissals initiated by
the employer.26
3. The employers act of excluding employees who
are union members.27
4. PICKETING.
Picketing is the act of workers in peacefully
marching to and fro before an establishment involved in a
labor dispute generally accompanied by the carrying and
display of signs, placards and banners intended to inform the
public about the dispute.28
2.
WHO MAY DECLARE A STRIKE OR LOCKOUT?
1. WHO MAY DECLARE A STRIKE?
a. Proper party.
Only a legitimate labor organization may declare a
strike. For obvious reason, the employer cannot.
b. Basic requirements.
As to the personality of the union, the following
requirements should be shown before a strike may be validly
declared and staged:
a. The union should be legitimate. A strike
conducted by a union which has not been shown
to be a legitimate labor organization is illegal.29
b. In organized establishment
where
there
is a certified bargaining agent, only the
recognized or certified collective bargaining
union can validly stage a strike.30 A minority
union cannot stage a strike. A strike
conducted by a minority union is patently illegal
because no labor dispute which will justify the
conduct of a strike may exist between the
employer and a minority union. To permit the
unions picketing activities would be to flaunt at
the will of the majority.31
c. In unorganized establishment where there is no
certified bargaining agent, any legitimate labor
organization in the establishment may declare a
strike but only on the ground of unfair labor
practice.32 The only other ground of bargaining
deadlock cannot be invoked in support of a

56

strike in an unorganized establishment for the


simple reason that no CBA can be negotiated
and concluded absent such recognized or
certified collective bargaining agent. In this
situation, the existence of a bargaining deadlock
is an impossibility.33
2. WHO MAY DECLARE A LOCKOUT?
a. Proper party.
Only the employer can declare and stage a lockout.
For obvious reason, no union can.

All the foregoing requisites, although procedural in


nature, are mandatory and failure of the union to comply
with any of them would render the strike illegal.36
I.
FIRST REQUISITE:
EXISTENCE OF VALID AND FACTUAL GROUND/S
1. VALID GROUNDS.
The law recognizes only two (2) grounds in support
of a valid strike,37 viz:
1.

Collective bargaining deadlock (Economic


Strike); and/or
2. Unfair labor practice (Political Strike).38

b. Grounds.
The employer may declare a lockout based on any
of the two (2) grounds that may similarly be invoked by the
union in staging a strike, i.e., (1) bargaining deadlock; and/or
(2) unfair labor practice.34
3. WHO MAY STAGE A PICKET?
Although not mentioned in the syllabus, it is
important to discuss this point. Distinctively, in case of
picketing, the absence of employment relationship between
the employer and the picketers or some of them does not
affect its validity. Picketing, if peacefully carried out, cannot
be prohibited even in the absence of employer-employee
relationship.35
3.
REQUISITES FOR A VALID STRIKE
1. REQUISITES FOR A VALID STRIKE.
a. Procedural but mandatory requisites.
In accordance with Article 263 and pertinent
prevailing jurisprudence, a strike, in order to be valid and
legal, must conform to the following procedural requisites:
1st requisite -

It must be based on a valid and


factual ground;
2nd requisite - A notice of strike must be filed with
the NCMB-DOLE;
3rd requisite - A notice must be served to the
NCMB-DOLE at least twenty-four
(24) hours prior to the taking of the
strike vote by secret balloting,
informing said office of the decision
to conduct a strike vote, and the
date,
place,
and
time
thereof;
4th requisite - A strike vote must be taken where a
majority of the members of the
union obtained by secret ballot in a
meeting called for the purpose,
must approve it;
5th requisite A strike vote report should be
submitted to the NCMB-DOLE at
least seven (7) days before the
intended date of the strike;
6th requisite - Except in cases of union-busting,
the cooling-off period of 15 days, in
case of unfair labor practices of the
employer, or 30 days, in case of
collective bargaining
deadlock,
should be fully observed; and
7th requisite - The 7-day waiting period/strike ban
reckoned after the submission of
the strike vote report to the NCMBDOLE should also be fully observed
in all cases.

A strike not based on any of these two grounds is


illegal.39
2. SOME PRINCIPLES ON THE FIRST REQUISITE.
Violation of CBA, except when gross, is not an
unfair labor practice, hence, may not be cited
as ground for a valid strike. Ordinary violation
of a CBA is no longer treated as an unfair labor
practice but as a mere grievance which should
be processed through the grievance machinery
and voluntary arbitration.40
Inter-union or intra-union dispute is not a valid
ground.41
Violation of labor standards is not a valid
ground.42
Wage distortion is not a valid ground.43
II.
SECOND REQUISITE:
FILING OF A NOTICE OF STRIKE
1. NOTICE OF STRIKE.
No labor organization shall declare a strike without
first having filed a notice of strike.44
2. WHERE FILED.
A notice of strike is filed with the National
Conciliation and Mediation Board (NCMB) of the Department
of Labor and Employment (DOLE).45
III.
THIRD REQUISITE:
SERVICE OF A 24-HOUR PRIOR NOTICE
In the 2005 case of Capitol Medical Center, Inc. v.
NLRC,46 it was imposed as additional requisite that a 24-hour
notice must be served to the NCMB-DOLE prior to the taking
of the strike vote by secret balloting, informing it of the
unions decision to conduct a strike vote as well as the date,
place, and time thereof.
IV.
FOURTH REQUISITE:
CONDUCT OF A STRIKE VOTE
1. MAJORITY APPROVAL OF THE STRIKE.
No labor organization shall declare a strike without
the necessary strike vote first having been obtained and
reported to the NCMB-DOLE.47
A decision to declare a strike must be approved by
a majority of the total union membership in the bargaining
unit concerned, obtained by secret ballot in meetings or
referenda called for that purpose.48 This process is
called strike vote balloting. 49
2. PURPOSE.

56

The purpose of a strike vote is to ensure that the


decision to strike broadly rests with the majority of the union
members in general and not with a mere minority. At the
same time, it is meant to discourage wildcat strikes, union
bossism and even corruption.50
3. DURATION OF THE VALIDITY OF THE MAJORITY
APPROVAL OF A STRIKE.
The majority decision to stage a strike is valid for
the duration of the dispute based on substantially the same
grounds considered when the strike vote was taken.51
V.
FIFTH REQUISITE:
SUBMISSION OF THE STRIKE VOTE TO NCMB-DOLE
1. PURPOSE FOR REQUIRING A STRIKE VOTE REPORT.
The evident intention of the law in mandatorily
requiring the submission of the strike vote report is to
reasonably regulate the right to strike which is essential to
the attainment of legitimate policy objectives embodied in the
law. Verily, mere substantial compliance with a mandatory
provision will not suffice. Strict adherence to the mandate of
the law is required.52
2. WHEN TO SUBMIT THE STRIKE VOTE REPORT.
The strike vote report should be submitted to the
NCMB-DOLE at least seven (7) days before the actual
staging of the intended strike, subject to the observance of
the cooling-off periods provided under the law.53
VI.
SIXTH REQUISITE:
OBSERVANCE OF THE COOLING-OFF PERIOD
1. GENERAL RULE.
The cooling-off periods provided under the law
before the intended date of the actual mounting of the strike
are as follows:
1. In case of bargaining deadlock, the cooling-off
period is thirty (30) days from the filing of the
notice of strike; or
2. In case of unfair labor practice, the cooling-off
period is fifteen (15) days from the filing of the
notice of strike.54
2. EXCEPTION: IN CASE OF UNION-BUSTING.
In case of an unfair labor practice involving the
dismissal from employment of union officers (not ordinary
members) duly elected in accordance with the union
constitution and by-laws which may constitute union-busting
because the existence of the union is threatened by reason
of such dismissal, the 15-day cooling-off period does not
apply and the union may take action immediately after the
strike vote is conducted and the results thereof duly
submitted to the regional branch of the NCMB.55
In cases of union-busting, only the 15-day coolingoff period need not be observed; all the other requisites must
be fully complied with.56

VII.
SEVENTH REQUISITE:
7-DAY WAITING PERIOD OR STRIKE BAN
1. PURPOSE OF THE 7-DAY WAITING PERIOD OR
STRIKE BAN.
The seven (7) day waiting period is intended to give
the NCMB-DOLE an opportunity to verify whether the
projected strike really carries the approval of the majority of
the union members.59
2. WAITING PERIOD/STRIKE BAN VS. COOLING-OFF
PERIOD.
The 7-day waiting period or strike ban is a distinct
and separate requirement from the cooling-off period
prescribed by law. The latter cannot be substituted for the
former and vice-versa.60
The cooling-off period is counted from the time of
the filing of the notice of strike. The 7-day waiting
period/strike ban, on the other hand, is reckoned from the
time the strike vote report is submitted to the NCMB-DOLE.
Consequently, a strike is illegal for failure to comply
with the prescribed mandatory cooling-off period and the 7day waiting period/strike ban after the submission of the
report on the strike vote.61
3. BOTH MUST BE COMPLIED WITH SEPARATELY AND
DISTINCTLY FROM EACH OTHER.
The requirements of cooling-off period and 7-day
waiting period/strike ban must both be complied with. The
labor union may take the strike vote and report the same to
the NCMB-DOLE within the statutory cooling-off period. In
this case, the 7-day waiting period/strike ban should be
counted from the day following the expiration of the coolingoff period. A contrary view would certainly defeat and render
nugatory the salutary purposes behind the distinct
requirements of cooling-off period and the waiting
period/strike ban.62
Example: In a case where the notice of strike
grounded on ULP is filed on October 1, 2014, and the strike
vote is taken within the cooling-off period, say, on October 5,
2014 and the strike vote report showing majority support for
the intended strike is submitted to the NCMB-DOLE the
following day, October 6, 2014, the question is when can the
union legally stage the strike?
Following the above principle, the answer obviously
is on October 24, 2014 or any day thereafter. This is so
because the 15-day cooling-off period for ULP expires on
October 1663 and adding the 7-day strike ban which should
be counted from the day following the expiration of the
cooling-off period, the 7th day would be on October 23, 2014.
Obviously, the strike cannot be conducted on the 7 th day but
rather after the lapse thereof; hence, it is only on October
24, 2014 and onwards that the union may lawfully conduct
the strike.
4. SOME PRINCIPLES ON COOLING-OFF PERIOD AND 7DAY WAITING PERIOD.

3. RECKONING OF THE COOLING-OFF PERIODS.

A strike staged on the same day the notice of


strike is filed is patently illegal.64

The start of the cooling-off periods should be


reckoned from the time the notice of strike is filed with the
NCMB-DOLE, a copy thereof having been served on the
other party concerned.57

A strike mounted on the same day the strike vote


report is submitted to the NCMB-DOLE is likewise
illegal.65

4. PURPOSE OF THE COOLING-OFF PERIODS.

Deficiency of even one (1) day of the cooling-off


period and 7-day strike ban is fatal.66

The purpose of the cooling-off periods is to provide


an opportunity for mediation and conciliation of the dispute
by the NCMB-DOLE with the end in view of amicably settling
it.58

One-day strike without complying with the 7-day


strike ban is illegal.67
4.
REQUISITES FOR A VALID LOCKOUT

56

1. SUBSTANTIALLY SIMILAR REQUISITES AS IN


STRIKE.
With a slight, insignificant variation, the procedural
but mandatory requisites for a valid strike discussed above
are substantially similar to those applicable for valid lockout.
For purposes of ease and clarity, the same are presented as
follows:
1st requisite - It must be based on a valid and
factual ground;
2nd requisite - A notice of lockout must be filed
with the NCMB-DOLE;
3rd requisite - A notice must be served to the
NCMB-DOLE at least twenty-four (24) hours prior
to the taking of the lockout vote by secret
balloting, informing said office of the decision to
conduct a lockout vote, and the date, place, and
time thereof;
4th requisite - A lockout vote must be taken
where a majority of the members of the Board of
Directors of the corporation or association or of
the partners in a partnership obtained by secret
ballot in a meeting called for the purpose, must
approve it;
5th requisite - A lockout vote report should be
submitted to the NCMB-DOLE at least seven (7)
days before the intended date of the lockout;
6th requisite - The cooling-off period of 15 days,
in case of unfair labor practices of the labor
organization, or 30 days, in case of collective
bargaining deadlock, should be fully observed;
and
7th requisite - The 7-day waiting period/lockout
ban reckoned after the submission of the
lockout vote report to the NCMB-DOLE should
also be fully observed in all cases.
5.

REQUISITES FOR LAWFUL PICKETING


1. THE REQUISITES FOR A VALID STRIKE ARE NOT
APPLICABLE TO PICKETING.
The seven (7) requisites for a valid strike discussed
above do not apply to picketing.
2. REQUISITES FOR LAWFUL PICKETING.
The most singular requirement to make picketing
valid and legal is that it should be peacefully conducted.
This is articulated in paragraph (e) of Article 264 of the Labor
Code in this wise:
(e) No person engaged in picketing shall
commit any act of violence, coercion or
intimidation or obstruct the free ingress to or
egress from the employers premises for lawful
purposes, or obstruct public thoroughfares.
Based on the foregoing provision, the requisites
may be summed up as follows:
1. The picket should be peacefully carried out;
2. There should be no act of violence, coercion or
intimidation attendant thereto;
3. The ingress to (entrance) or egress from (exit)
the company premises should not be obstructed;
and
4. Public thoroughfares should not be impeded.68
3. RIGHT TO PICKET IS PROTECTED BY THE
CONSTITUTION AND THE LAW.
Unlike a strike which is guaranteed under the
Constitutional provision on the right of workers to conduct

peaceful concerted activities under Section 3, Article XIII


thereof, the right to picket is guaranteed under the freedom
of speech and of expression and to peaceably assemble to
air grievances under Section 4, Article III (Bill of Rights)
thereof.69
The right to picket is likewise guaranteed as part of
the right to engage in concerted activities for purposes of
collective bargaining for their mutual benefit and
protection. 70
4. EFFECT OF THE USE OF FOUL LANGUAGE DURING
THE CONDUCT OF THE PICKET.
In the event the picketers employ discourteous and
impolite language in their picket, such may not result in, or
give rise to, libel or action for damages.71
5. PICKETING VS. STRIKE.
(a) To strike is to withhold or to stop work by the
concerted action of employees as a result of an industrial or
labor dispute. The work stoppage may be accompanied by
picketing by the striking employees outside of the company
compound.
(b) While a strike focuses on stoppage of work,
picketing focuses on publicizing the labor dispute and its
incidents to inform the public of what is happening in the
company being picketed.
(c) A picket simply means to march to and fro in
front of the employers premises, usually accompanied by
the display of placards and other signs making known the
facts involved in a labor dispute. It is but one strike activity
separate and different from the actual stoppage of work.
Phimco Industries, Inc. v. Phimco Industries
Labor Association (PILA) . 72 - While the right of employees
to publicize their dispute falls within the protection of freedom
of expression and the right to peaceably assemble to air
grievances, these rights are by no means absolute.
Protected picketing does not extend to blocking ingress to
and egress from the company premises. That the picket
was moving, was peaceful and was not attended by actual
violence may not free it from taints of illegality if the picket
effectively blocked entry to and exit from the company
premises.
6. WHEN PICKET CONSIDERED A STRIKE.
In distinguishing between a picket and a strike, the
totality of the circumstances obtaining in a case should be
taken into account.
Santa Rosa Coca-Cola Plant Employees Union v.
Coca-Cola Bottlers Phils. , Inc. 73 - Petitioners contend that
what they conducted was a mere picketing and not a strike.
In disagreeing to this contention, the High Court emphasized
that it is not an issue in this case that there was a labor
dispute between the parties as petitioners had notified the
respondent of their intention to stage a strike, and not merely
to picket. Petitioners insistence to stage a strike is evident
in the fact that an amended notice of strike was filed even as
respondent moved to dismiss the first notice. The basic
elements of a strike are present in this case: 106 members of
petitioner Union, whose respective applications for leave of
absence on September 21, 1999 were disapproved, opted
not to report for work on said date, and gathered in front of
the company premises to hold a mass protest action.
Petitioners deliberately absented themselves and instead
wore red ribbons and carried placards with slogans such
as: YES KAMI SA STRIKE, PROTESTA KAMI, SAHOD,
KARAPATAN
NG
MANGGAGAWA
IPAGLABAN,
CBA-WAG BABOYIN, STOP UNION BUSTING. They
marched to and fro in front of the companys premises during
working hours. Thus, petitioners engaged in a concerted
activity which already affected the companys operations.

56

The mass concerted activity obviously constitutes a strike.


Moreover, the bare fact that petitioners were given a Mayors
permit is not conclusive evidence that their action/activity did
not amount to a strike. The Mayors description of what
activities petitioners were allowed to conduct is
inconsequential. To repeat, what is definitive of whether the
action staged by petitioners is a strike and not merely a
picket is the totality of the circumstances surrounding the
situation.
Petitioner union, in the 2011 case of Leyte
Geothermal Power Progressive Employees Union-ALUTUCP v. Philippine National Oil Company Energy
Development Corporation,74 contends that there was no
stoppage of work; hence, they did not strike. Euphemistically,
petitioner union avers that it only engaged in picketing, and
maintains that without any work stoppage, [its officers and
members] only engaged in xxx protest activity. The
Supreme Court, however, ruled that it was a strike and not
picketing or protest activity that petitioner union staged. It
found the following circumstances in support of this finding:

1. He may assume jurisdiction over the labor


dispute and decide it himself; or
2. He may certify it to the NLRC for compulsory
arbitration, in which case, it will be the NLRC
which shall hear and decide it.76
This power may be exercised by the DOLE
Secretary even before the actual staging of a strike or
lockout since Article 263(g) does not require the existence of
a strike or lockout but only of a labor dispute involving
national interest.77
2. WHAT CONSTITUTES A NATIONAL INTEREST CASE?
The Labor Code vests in the DOLE Secretary the
discretion to determine what industries are indispensable to
the national interest. Accordingly, upon the determination by
the DOLE Secretary that such industry is indispensable to
the national interest, he has authority to assume jurisdiction
over the labor dispute in the said industry or certify it to the
NLRC for compulsory arbitration.78

(1) Petitioner union filed a Notice of Strike on


December 28, 1998 with the DOLE grounded on
respondents purported unfair labor practices,i.e. ,refusal to
bargain collectively, union busting and mass termination.
On even date, petitioner union declared and staged a strike.

Past issuances of the DOLE Secretary have not


made nor attempted to mention specifically what the
industries indispensable to the national interest are. It was
only in Department Order No. 40-H-13, Series of 2013,79 that
certain industries were specifically named, thus:

(2) The DOLE Secretary intervened and issued a


Return-to-Work Order dated January 4, 1999, certifying the
labor dispute to the NLRC for compulsory arbitration. The
Order indicated the following facts: (1) filing of the notice of
strike; (2) staging of the strike and taking control over
respondents facilities of its Leyte Geothermal Project on the
same day petitioner union filed the notice of strike; (3)
attempts by the NCMB to forge a mutually acceptable
solution proved futile; and (4) in the meantime, the strike
continued with no settlement in sight placing in jeopardy the
supply of much needed power supply in the Luzon and
Visayas grids.

Section
16.
Industries
Indispensable to the National Interest.
For the guidance of the workers and
employers in the filing of petition for
assumption of jurisdiction, the following
industries/services are hereby recognized
as deemed indispensable to the national
interest:
a. Hospital sector;
b. Electric power industry;
c. Water supply services, to
exclude small water supply
services such as bottling and
refilling stations;
d. Air traffic control; and
e. Such other industries as may
be recommended by the
National Tripartite Industrial
Peace Council (TIPC) .

(3) Petitioner union itself, in its pleadings, used the


word strike.
(4) Petitioner unions asseverations are belied by
the factual findings of the NLRC, as affirmed by the CA thus:
The failure to comply with the mandatory requisites for the
conduct of strike is both admitted and clearly shown on
record. Hence, it is undisputed that no strike vote was
conducted; likewise, the cooling-off period was not observed
and that the 7-day strike ban after the submission of the
strike vote was not complied with since there was no strike
vote taken.
In fine, petitioner unions bare contention that it did
not hold a strike cannot trump the factual findings of the
NLRC that petitioner union indeed struck against respondent.
In fact, and more importantly, petitioner union failed to
comply with the requirements set by law prior to holding a
strike.
6.
ASSUMPTION OF JURISDICTION BY THE DOLE
SECRETARY OR CERTIFICATION OF THE LABOR
DISPUTE TO THE NLRC FOR COMPULSORY
ARBITRATION75
1. WHEN DOLE SECRETARY MAY ASSUME OR CERTIFY
A LABOR DISPUTE.
Article 263(g) of the Labor Code provides that when
in the opinion of the DOLE Secretary, the labor dispute
causes or will likely to cause a strike or lockout in an industry
indispensable to the national interest, he is empowered to do
either of two (2) things:

Obviously, the above enumerated industries are not


exclusive as other industries may be considered
indispensable to the national interest based on the
appreciation and discretion of the DOLE Secretary or as may
be recommended by TIPC.
3. DIFFERENT RULE ON STRIKES AND LOCKOUTS IN
HOSPITALS, CLINICS AND MEDICAL INSTITUTIONS.
As a general rule, strikes and lockouts in hospitals,
clinics and similar medical institutions should be avoided.80
In case a strike or lockout is staged, it shall be the
duty of the striking union or locking-out employer to provide
and maintain an effectiveskeletal workforce of medical and
other health personnel whose movement and services shall
be unhampered and unrestricted as are necessary to insure
the proper and adequate protection of the life and health of
its patients, most especially emergency cases, for the
duration of the strike or lockout.81
The
DOLE
Secretary
may
immediately
assume, within twenty four (24) hours from knowledge of the
occurrence of such a strike or lockout, jurisdiction over the
same or certify it to the NLRC for compulsory arbitration.82
4. SOME PRINCIPLES ON ASSUMPTION/CERTIFICATION
POWER OF THE DOLE SECRETARY.

56

Prior notice and hearing are not required in the


issuance of the assumption or certification order.83
When the DOLE Secretary exercises the powers under
Article 263(g) , he is granted great breadth of
discretion in order to find a solution to a labor
dispute.84 It necessarily includes and extends to all
questions and controversies that may have arisen from
the labor dispute over which he assumed jurisdiction,
including those cases falling under the original and
exclusive jurisdiction of Labor Arbiters. 85 It also includes
matters incidental to the labor dispute, i.e. , issues that
are necessarily involved in the dispute itself, not just to
those ascribed in the notice of strike or otherwise
submitted to him for resolution.86
The DOLE Secretary may seek the assistance of law
enforcement agencies like the Philippine National Police
to ensure compliance with the provision thereof as well
as with such orders as he may issue to enforce the
same.
5. RETURN-TO-WORK ORDER.
a. It is always part of assumption/certification
order even if not expressly stated therein.
The moment the DOLE Secretary assumes
jurisdiction over a labor dispute involving national interest or
certifies it to the NLRC for compulsory arbitration, such
assumption or certification has the effect of automatically
enjoining the intended or impending strike or, if one has
already been commenced, of automatically prohibiting its
continuation. The mere issuance of an assumption or
certification order automatically carries with it a return-towork order, even if the directive to return to work is not
expressly stated therein.87 It is thus not necessary for the
DOLE Secretary to issue another order directing the strikers
to return to work.
It is error therefore for striking workers to continue
with their strike alleging absence of a return-to-work order
since
Article
263(g)
is
clear
that
once
an
assumption/certification order is issued, strikes are enjoined
or, if one has already taken place, all strikers should
immediately return to work.88
b. Nature of return-to-work order.
Return-to-work order is compulsory in character. It is
not offensive to the constitutional provision against
involuntary servitude.89 It must be discharged as a duty even
against the workers will. The worker must return to his job
together with his co-workers so that the operation of the
company can be resumed and it can continue serving the
public and promoting its interest. It is executory in character
and should be strictly complied with by the parties even
during the pendency of any petition questioning its validity in
order to maintain the status quo while the determination is
being made.90
c. Some principles on return-to-work order.
The issue of legality of strike is immaterial in
enforcing the return-to-work order.91
Return-to-work order is a limitation on employers
exercise of management prerogatives.92
Upon assumption or certification, the parties
should revert to the status quo ante litem which
refers to the state of things as it was before the
labor dispute or the state of affairs existing at the
time of the filing of the case. It is the last actual,
peaceful and uncontested status that preceded
the actual controversy.93
Retrenched or redundant employees whose
termination brought about the labor dispute are
included in the return-to-work order.94

To implement the return-to-work order, the norm


is
actual
reinstatement.
However, payroll
reinstatement in lieu of actual reinstatement may
properly
be
resorted
to when special
circumstances exist
that
render
actual
reinstatement impracticable or otherwise not
conducive to attaining the purposes of the law.
Examples:
University of Sto. Tomas v. NLRC,95 where the
teachers ordered to return to work could not be
given back their academic assignments since the
return-to-work order of the DOLE Secretary was
issued in the middle of the first semester of the
academic year. The Supreme Court affirmed the
validity of the payroll reinstatement order of the
NLRC96 and ruled that the NLRC did not commit
grave abuse of discretion in providing for the
alternative remedy of payroll reinstatement. It
observed that the NLRC was only trying its best
to work out a satisfactory ad hocsolution to a
festering and serious problem.
University of Immaculate Concepcion, Inc. v.
The Honorable Secretary of Labor,97 where, by
virtue of the special circumstances in this case
involving the final decision of the panel of
arbitrators as to the confidential nature of the
positions of the twelve (12) private respondents,
the employees actual and physical reinstatement
was rendered impracticable and more likely to
exacerbate the situation.
The payroll
reinstatement in lieu of actual reinstatement,
therefore, appears justified as an exception to the
rule until the validity of their termination is finally
resolved.
Non-waiver of demands upon voluntary return to
work. The act of the strikers in voluntarily
returning to work does not result in the waiver of
their original demands. Such act of returning to
work only means that they desisted from the
strike which desistance is a personal act of the
strikers and cannot be used against the union
and interpreted as a waiver by it of its original
demands for which the strike was adopted as a
weapon.98
Filing of a motion for reconsideration does
not affect the enforcement of a return-to-work
order which is immediately executory.99
The extension of the return-to-work order and
the admission of all striking workers by the
company, cannot in any way be considered a
waiver that the union officers can use to negate
liability for their illegal actions of defying the first
return-to-work order and for commission of illegal
acts in the course of the strike.100
7.
NATURE OF ASSUMPTION ORDER
OR CERTIFICATION ORDER
1. A POLICE POWER MEASURE.
The power to issue assumption or certification
orders is an extraordinary authority granted to the
President and to his alter ego, the DOLE Secretary, the
exercise of which should be strictly limited to national interest
cases.101
It is in the nature of a police power measure. This
is done for the promotion of the common good considering
that a prolonged strike or lockout can be inimical to the
national economy. The DOLE Secretary is mandated to act
to maintain industrial peace. Thus, his assuming jurisdiction

56

over a labor dispute or his certification thereof to the NLRC


for compulsory arbitration is not intended to impede the
workers right to strike but to obtain a speedy settlement of
the dispute.102

a. University of San Agustin Employees UnionFFW v. The CA. 110 - The period of defiance was
less than nine (9) hours from 8:45 a.m. to 5:25
p.m. on September 19, 2003.

Having been enacted pursuant to the police power


of the State, Article 263 [g] requires that the powers
thereunder be exercised only in labor disputes involving
industries indispensable to the national interest. 103 A
prolonged strike or lockout can be inimical to the national
economy and, therefore, the situation is imbued with public
necessity and involves the right of the State and the public to
self-protection.104

b. Federation of Free Workers v. Inciong. 111 - The


period of defiance was only nine (9) days.

2. GRANT OF ASSUMPTION/CERTIFICATION POWER IS


FOR THE PROTECTION OF THE STATE, NOT OF
LABOR OR OF EMPLOYER.
The exercise of the power is in keeping with the
rationale that any work stoppage or slowdown in that
particular industry can be inimical to the national economy. It
is clear that Article 263(g) was not written to protect labor
from the excesses of management, nor was it written to ease
management from expenses, which it normally incurs during
a work stoppage or slowdown. It is an error to view the
assumption order of the DOLE Secretary as a measure to
protect the striking workers from any retaliatory action from
the employer. This law was written as a means to be used by
the State to protect itself from an emergency or crisis. It is
not for labor, nor is it for management.105
8.

c. Sarmiento v. Tuico.112 - The period of defiance


was for five (5) months.
4. SOME PRINCIPLES ON DEFIANCE OF THE
ASSUMPTION/CERTIFICATION ORDER.
The assumption/certification order may be served at
any time of the day.113
No practice of giving 24 hours to strikers within
which to return to work. There is no law or
jurisprudence recognizing this practice.114
The defiant workers, besides being dismissed, may be
subject of criminal prosecution as well.115
The defiant strikers could be validly replaced.116
The refusal to acknowledge receipt of the
assumption/certification orders and other processes
is an apparent attempt to frustrate the ends of justice,
hence, invalid. The union cannot be allowed to thwart
the efficacy of the said orders issued in the national
interest through the simple expediency of refusing to
acknowledge receipt thereof.117
9.

EFFECT OF DEFIANCE OF
ASSUMPTION OR CERTIFICATION ORDERS
1. DEFIANCE OF THE ORDER, A VALID GROUND TO
DISMISS.
The defiance by the union, its officers and
members of the Labor Secretary's assumption of jurisdiction
or certification order constitutes a valid ground for
dismissal.106
The following are the justifications:
1. A strike that is undertaken after the issuance by
the DOLE Secretary of an assumption or
certification order becomes a prohibited
activityand thus illegal. The defiant striking
union officers and members, as a result, are
deemed to have lost their employment statusfor
having knowingly participated in an illegal
strike.
2. From the moment a worker defies a return-towork order, he is deemed to have abandoned
his job.107
3. By so defying, the workers have forfeited their
right to be readmitted to work.108
2. ALL DEFIANT STRIKERS, REGARDLESS OF
WHETHER THEY ARE OFFICERS OR ORDINARY
MEMBERS, ARE DEEMED DISMISSED.
Once the DOLE Secretary assumes jurisdiction
over a labor dispute or certifies it to the NLRC for compulsory
arbitration, such jurisdiction should not be interfered with by
the application of the coercive processes of a strike or
lockout. Any defiance thereof is a valid ground for the loss
of employment status.109
3. PERIOD OF DEFIANCE OF THE RETURN-TO-WORK
ORDER, NOT MATERIAL.
The length of time within which the return-to-work
order was defied by the strikers is not significant in
determining their liability for the legal consequences thereof.
The following cases are illustrative of this rule:

ILLEGAL STRIKE
1. WHEN IS A STRIKE CONSIDERED ILLEGAL?
A strike is illegal if it is declared and staged:
1)

Without complying with the procedural but


mandatory requisites.

2)

For unlawful purpose such as to compel the


dismissal of an employee118 or to force
recognition of the union119 or for trivial and
puerile purpose120 or to circumvent contracts and
judicial orders.121

3)

Based on non-strikeable or invalid grounds


such as:
a)
b)
c)
d)

4)

Inter-union or intra-union disputes.122


Simple violation of CBA in contrast to gross
violation thereof which is deemed ULP.123
Violation of labor standards.124
Legislated
distortion) . 125

wage

orders

(wage

Without first having bargained collectively.126

5)

In violation of the no strike, no lockout clause


in the CBA.127

6)

Without submitting the issues to the grievance


machinery or voluntary arbitration or failing to
exhaust the steps provided therein.128

7)

While conciliation and mediation proceeding is


on-going at the NCMB.129

8)

Based on issues already brought to voluntary


or compulsory arbitration.130

9)

During the pendency of a case involving the


same ground/s cited in the notice of strike.131

56

10)

In defiance of an assumption or certification


or return-to-work order.132

11)

In violation of a temporary restraining order


or an injunction order.133

12)

After the conversion of the notice of strike


into a preventive mediation case.134

13)

Against the prohibition by law.135

14)

By a minority union.136

15)

By an illegitimate union.137

16)

By dismissed employees.138

17)

18)

In violation of the company code of conduct


which prohibits inciting or participating in
riots, disorders, alleged strikes or concerted
actions detrimental to [Toyotas] interest, The
penalty for which is dismissal.139
As protest rallies in front of government
offices such as in the following cases:
Toyota Motor Phils. Corp. Workers
Association [TMPCWA] v. NLRC,140 where
the Supreme Court ruled that the protest
rallies staged by the employees from February
21 to 23, 2001 in front of the offices of the
Bureau of Labor Relations (BLR) and the
DOLE Secretary constitute illegal strike and
not legitimate exercise of their right to
peaceably assemble and petition the
government for redress of grievances. It was
illegal for having been undertaken without
satisfying the mandatory pre-requisites for a
valid strike under Article 263 of the Labor
Code.
The ruling in Toyota141 was cited in Solidbank
Corporation v. Gamier,142 as basis in
declaring the protest action of the employees
of petitioner Solidbank which was staged in
front of the Office of the DOLE Secretary in
Intramuros, Manila, as constitutive of illegal
strike since it paralyzed the operations of the
bank. The protest action in this case was
conducted because of the CBA deadlock.

19)

As welga ng bayan which is in the nature of


a general strike as well as an extended
sympathy strike.143

20)

In violation of the rules on picketing such as


the commission of any of the following
prohibited acts:
(a)

Obstructing, impeding or interfering with,


by force, violence, coercion, threats or
intimidation, any peaceful picketing by
employees during any labor controversy
or in the exercise of their right to selforganization or collective bargaining, or
aiding or abetting such obstruction or
interference.

(b)

Conducting a stationary picket and


using means like placing of objects to
constitute permanent blockade or to
effectively close points of entry or exit in
company premises.

(c)

Committing any act of violence,


coercion or intimidation by any picketer.

(d)

Obstructing the free ingress to or egress


from the employers premises for lawful
purposes.

(e)

Obstructing public thoroughfares while


engaged in picketing.144
(a)

LIABILITY OF UNION OFFICERS145


(b)
LIABILITY OF ORDINARY WORKERS146
These two topics will be discussed jointly because of
their close interrelation.
1. PARTICIPATION IN LAWFUL STRIKE.
The declaration or actual conduct of a strike does
not result in the severance of the employment relationship
nor a renunciation thereof. The employment relationship is
merely suspended during the period of work stoppage.147
An employee who participates in a lawful strike is
not deemed to have abandoned his employment but is
merely exercising his right to self-organization precisely to
protect his rights as an employee and/or to obtain better
working conditions.148
Such participation should not
constitute sufficient ground for the termination of his
employment even if a replacement has already been hired by
the employer during such lawful strike.149
2. PARTICIPATION IN ILLEGAL STRIKE.
a. Distinction in the liability between union
officers and ordinary union members.
1. Union officers.
The mere finding or declaration of illegality of the
strike will result in the termination of all union officers who
knowingly participated in the illegal strike.150 Unlike ordinary
members, it is not required, for purposes of termination, that
the officers should commit an illegal act during the strike.151
However, the 2012 case of Naranjo v. Biomedica
Health Care, Inc. ,152 instructs that absent any showing that
the employees are union officers, they cannot be dismissed
based solely on the illegality of the strike.
Thus, in the 2011 case of Fadriquelan v. Monterey
Foods Corporation,153the Supreme Court took pains in
assessing the evidence to ascertain the individual culpability
of the unin officers based on their participation in the illegal
slowdown strike which was staged after the DOLE Secretary
has issued an assumption of jurisdiction order.
To illustrate how the knowing participation of
union officers may be ascertained and established, the
following factors were taken into account in another 2011
case, Abaria v. NLRC,154 which led to the declaration that
they knowingly participated in the illegal strike:
(1) Their persistence in holding picketing activities
despite the declaration by the NCMB that their union was not
duly registered as a legitimate labor organization and
notwithstanding the letter from the federations155 legal
counsel informing them that their acts constituted disloyalty
to the national federation; and
(2) Their filing of the notice of strike and conducting
a strike vote despite the fact that their union has no legal
personality to negotiate with their employer 156 for collective
bargaining purposes.
2. Ordinary union members.
The mere finding or declaration of illegality of a
strike will not result in termination of ordinary union
members. For an ordinary union member to suffer
termination, it must be shown by clear evidence that he has
committed illegal acts during the strike.157
b. Reason for the distinction.

56

The reason for this distinction is that the union


officers have the duty to guide their members to respect the
law. If instead of doing so, the officers urged the members to
violate the law and defy the duly constituted authorities, their
dismissal from the service is a just penalty or sanction for
their unlawful act. Their responsibility as main players in an
illegal strike is greater than that of the ordinary union
members and, therefore, limiting the penalty of dismissal
only to the former for their participation in an illegal strike is
in order.158
c. Some principles on illegality of a strike.
For purposes of identifying the union officers,
the certifications as to the union officers issued
by the Chief of the Labor Organization Division
of the Bureau of Labor Relations (BLR), being
public records, enjoy the presumption of
regularity and deserve weight and probative
value. Thus, in the absence of a clear and
convincing evidence that said certifications are
flawed, they should be taken on their face
value.159
The fact that the employees are signatories to
the CBA does not in itself sufficiently establish
their status as union officers during the illegal
strike. Neither were their active roles during the
bargaining negotiations be considered as
evidence of their being union officers.160
Only the union officers during the period of
illegal strike are liable.161 If the employees acted
as union officers after the strike, they may not
be held liable and, therefore, could not be
terminated in their capacity as such.162
Shop
stewards are
union
officers.163 Hence, they should be terminated
upon the declaration of the illegality of the
strike.164
Union officers may be dismissed despite
the fact that the illegal strike was staged
only for 1 day165 or even for less than 10
hours.166 This holds true in cases of defiance of
the assumption/ certification order issued in
national interest cases.
If the dispositive portion of the decision failed
to mention the names of union officers, resort
should be made to the text of the decision.167
Wholesale forfeiture of employment status is
not allowed. The mere filing of charges against
an employee for alleged illegal acts during a
strike does not by itself justify his dismissal.
The charges must be proved in an investigation
duly called for that purpose, where the
employee should be given an opportunity to
defend himself. This holds true even if the
alleged ground constitutes a criminal offense.168
No wholesale dismissal of strikers
allowed. The
employer
cannot
just
unceremoniously dismiss a hundred of its
employees in the absence of clear and
convincing proof that these people were indeed
guilty of the acts charged and then, afterwards,
go to court to seek validation of the dismissal it
whimsically executed. That certainly cannot
be allowed.169
3. PARTICIPATION IN THE COMMISSION OF ILLEGAL
ACTS DURING A STRIKE.
a. Legality or illegality of strike, immaterial.

As far as liability for commission of illegal acts


during the strike is concerned, the issue of legality or
illegality of the strike is irrelevant. As long as the union
officer or member commits an illegal act in the course of the
strike, be it legal or illegal, his employment can be validly
terminated.170
b. Meaning of illegal acts.
The term illegal acts under Article 264(a) may
encompass a number of acts that violate existing labor or
criminal laws, such as the following:
(1)

Violation of Article 264(e) of the Labor Code


which provides that [n]o person engaged in
picketing shall commit any act of violence,
coercion or intimidation or obstruct the free
ingress to or egress from the employers
premises for lawful purposes, or obstruct public
thoroughfares.

(2)

Commission of crimes and other unlawful acts


in carrying out the strike.171

(3)

Violation of any order, prohibition, or injunction


issued by the DOLE Secretary or NLRC in
connection with the assumption of jurisdiction
or certification order under Article 263(g) of the
Labor Code.172

This enumeration is not exclusive as jurisprudence


abounds where the term illegal acts has been interpreted
and construed to cover other breaches of existing laws.
c. Mere substantial evidence required to hold
strikers guilty of commission of illegal acts.
While in all cases, it is required that the striker must
be identified, proof beyond reasonable doubt, however, is not
required; substantial evidence available under the attendant
circumstances suffices to justify the imposition of the penalty
of dismissal on participating workers and union
officers.173 Liability for illegal acts should be determined on
an individual basis. For this purpose, the individual
identity of the union members who participated in the
commission of illegal acts may be proved thru affidavits and
photographs.174 Simply referring to them as strikers, or
complainants in this case is not enough to justify their
dismissal.175
Photographs alone, however, will not suffice.
In Arellano University Employees and Workers Union v.
CA, 176 while the university adduced photographs showing
the strikers picketing outside its premises, it failed to identify
who they were. It thus failed to meet the substantiality of
evidence test applicable in dismissal cases.
d. Some principles on commission of illegal
acts in the course of the strike.
Only members who are identified as having
participated in the commission of illegal acts
are liable. Those who did not participate should
not be blamed therefor.177
To effectively hold ordinary union members
liable, those who participated in the
commission of illegal acts must not only be
identified but the specific illegal acts they each
committed
should
be
described
with
particularity.178
The heated altercations and occasional blows
exchanged in the picket line do not affect or
diminish the right to strike.179
Exchange of hot words in the picket line is not
an illegal act that would impede or diminish the
right to strike.180

56

Use of slanderous, libelous and obscene


language during the strike or lockout is a
prohibited act.181

Strikers who failed to report for work without proper


justification and despite the order reinstating them to their job
are deemed to have forfeited their right to reinstatement.189

If violence was committed by both employer


and employees, the same cannot be cited as a
ground to declare the strike illegal.182

d. Employer who fails to reinstate strikers who


were ordered reinstated by the Labor
Arbiter is
liable
to
pay
thembackwages reckoned
from
Labor
Arbiters issuance of the reinstatement order
up to its reversal by the NLRC. 190

Dismissal of the criminal case filed by reason


of the illegal acts committed in the course of
the strike does not extinguish liability under the
Labor Code.183
4. CIVIL AND CRIMINAL LIABILITIES OF PERSONS
COMMITTING ANY OF THE PROHIBITED ACTS UNDER
ARTICLE 264.
a. Where filed.
Any person performing any of the prohibited
activities mentioned in Article 264 of the Labor Code may be
charged before the appropriate civil and criminal courts.184
b. Rule in case person charged or convicted is
an alien.
If the person so convicted is a foreigner, he shall be
subjected to immediate and summary deportation and will be
permanently barred from re-entering the country without the
special permission of the President of the Philippines.185
c. Prosecution under the Labor Code bars
prosecution under the Revised Penal Xode.
If the act is, at the same time, a violation of the
Revised Penal Code, a prosecution under the Labor Code
will preclude prosecution for the same act under the Revised
Penal Code, or vice-versa.186
(c)
LIABILITY OF EMPLOYER 187
The discussion below on the liability of the
employer is divided into two (2) parts, namely:
(1)
(2)

Liability of employer in case of strike; and


Liability of employer in case of illegal lockout.
I.

LIABILITY OF EMPLOYER IN CASE OF STRIKE


1. LIABILITY FOR REINSTATEMENT OF STRIKERS.
a. Reinstatement, when proper.
Reinstatement (without backwages) of ordinary
rank-and-file union members who did not participate in the
commission of illegal acts during the conduct of the illegal
strike may be ordered.
b. No reinstatement for strikers who committed
illegal acts.
The strikers who committed illegal acts during and
in the course of a strike may be terminated. They are not
entitled to be reinstated. Additionally, they may be held
criminally liable therefor.188
c. Strikers who failed to return to work forfeit
reinstatement.

2. SEPARATION PAY IN LIEU OF REINSTATEMENT IN


STRIKE CASES.
a. Separation pay in lieu of reinstatement, when
proper.
In strike cases, the award of separation pay in lieu
of reinstatement is proper only when the strikers did not
participate in the commission of illegal acts in the course
thereof.191
Separation pay is made an alternative relief in lieu
of reinstatement in certain circumstances, like: (a) when
reinstatement can no longer be effected in view of the
passage of a long period of time or because of the realities of
the situation; (b) reinstatement is inimical to the employers
interest; (c) reinstatement is no longer feasible; (d)
reinstatement does not serve the best interests of the parties
involved; (e) the employer is prejudiced by the workers
continued employment; (f) facts that make execution unjust
or inequitable have supervened; or (g) strained relations
between the employer and employee.192
For example, because their participation in the
commission of illegal acts in the course of the strike was not
established by substantial evidence, sixty-one (61) ordinary
union members were ordered reinstated in Dusit Hotel
Nikko .193 However, in view of the possibility that the Hotel
might have already hired regular replacements for the said
61 employees, the Hotel was given the option to pay
separation pay in lieu of reinstatement computed at one (1)
month pay for every year of service, a fraction of at least six
(6) months being considered one year of service.
If reinstatement is no longer possible given the
lapse of considerable time from the occurrence of the strike,
say, seventeen (17) years, as in the case of G & S
Transport Corp. v. Infante, 194 the award of separation pay of
one (1) month salary for each year of service, in lieu of
reinstatement, was held to be in order.
Following this ruling, the same separation pay of
one (1) month salary for every year of service, in lieu of
reinstatement, was awarded to similarly situated strikers
in Escario v. NLRC. 195 The employer here manifested that
the reinstatement of the petitioners would not be feasible
because: (a) it would inflict disruption and oppression upon
the employer; (b) petitioners [had] stayed away for more
than 15 years; (c) its machines had depreciated and had
been replaced with newer, better ones; and (d) it now sold
goods through independent distributors, thereby abolishing
the positions related to sales and distribution. Under these
circumstances, the grant of separation pay in lieu of
reinstatement of the petitioners was proper.196
b. Separation pay as financial assistance, when
not proper.
In a slew of cases, the High Tribunal refrained from
awarding separation pay or financial assistance to union
officers and members who were separated from service due
to their participation in, or commission of, illegal acts during
the strikes. The reason is that the participation of strikers in
the commission of illegal acts during the conduct of a strike
is considered serious misconduct that would not justify the
award of separation pay as a form of financial assistance.197

56

In Toyota
Motor
Phils.
Corp.
Workers
Association [TMPCWA] v. NLRC,198 the High Court
refrained from awarding separation pay or financial
assistance to union officers and members who were
separated from service due to their participation in or
commission of illegal acts during the strike.
In Pilipino Telephone Corporation v. Pilipino
Telephone Employees Association (PILTEA) , 199 the
validity of the dismissal of the union officers who participated
in the illegal strike and openly defied the assumption order
issued by the DOLE Secretary was upheld and
consequently, no separation pay or financial assistance was
granted.200
In Sukhothai Cuisine and Restaurant v. CA, 201 the
strike was held illegal because it violated the agreement
providing for arbitration. The union officers who participated
in, and the union members who committed illegal acts during
the illegal strike were declared to have lost their employment
status and were not awarded any separation pay or financial
assistance.202
In Grand Boulevard Hotel v. Genuine Labor
Organization of Workers in Hotel, Restaurant and Allied
Industries, 203 the validity of the dismissal of the union
officers who participated in the illegal strike without awarding
separation pay was affirmed, despite the urging by the NLRC
that the company should give financial assistance to the
dismissed employees.
In Interphil Laboratories Union-FFW v. Interphil
Laboratories, Inc. ,204 the legality of the dismissal of the
union officers who led the concerted action in refusing to
render overtime work and causing work slowdowns was
affirmed and no separation pay or financial assistance was
allowed.
In Chua v. NLRC,205 the Supreme Court deleted the
NLRCs award of separation benefits to an employee who
participated in the unlawful and violent strike which resulted
in multiple deaths and extensive property damage.
c. Separation pay in lieu of reinstatement by
reason of considerable lapse of time.
While reinstatement is the standard relief for an
illegally dismissed employee, however, because of the
considerable period that had elapsed from the time of the
illegal dismissal, separation pay of one (1) month salary for
each year of service but without backwages, should be
awarded instead. This was the standard ruling in the
following illustrative cases:
(1) G & S Transport206 where seventeen (17) years
had elapsed since respondents were illegally dismissed;
(2) Association of Independent Unions in the
Philippines [AIUP] v. NLRC,207 where more than eight (8)
years had passed since the petitioners therein staged a
strike and were found to have been unlawfully terminated;
(3) Abaria v. NLRC,208 where 15 years had
elapsed from the onset of the labor dispute, not to mention
the strained relations that ensued plus the fact that
replacements have already been hired by the employerhospital.
3. BACKWAGES IN STRIKE CASES.
a. Award of backwages, discretionary on labor
court.
Albeit generally, the strikers are not entitled to
backwages, however, the labor court has the discretion to
determine whether or not to grant it depending on the
peculiar circumstances of each case. This is so because the
right to backwages is not absolute.209
b. If the strike is illegal, no backwages should
be paid.

Thus,

in

the

case

of Arellano

Employees and Workers Union v. CA,

210

University

where the strike

was declared illegal, petitioner-union members who were


found not to have participated in the commission of illegal
acts during the strike were ordered reinstated to their former
positions but without backwages. If reinstatement is no
longer possible, they should receive separation pay of one
(1) month for every year of service in accordance with
existing jurisprudence. With respect to the union officers,
their mere participation in the illegal strike warrants their
dismissal.
InDusit Hotel Nikko,211 it was held that the union
members who participated in an illegal strike but were not
identified to have committed illegal acts are entitled to be
reinstated
to
their
former
positions but
without
backwages.212
In Telefunken,213 petitioners claimed the payment of
backwages. In denying it, the Supreme Court affirmed the
finding of the Court of Appeals that with the blatant disregard
by the strikers of official edicts ordering their temporary
reinstatement, there is no basis to award them backwages
corresponding to said time frames. Otherwise, they will
recover something they have not or could not have earned
by their willful defiance of the return-to-work order, a patently
incongruous and unjust situation. It is simply inconsistent,
nay, absurd, to award backwages when there is no finding of
illegal dismissal and when the record shows that the striking
workers did not comply with the lawful orders for them to
return to work during said periods of time.
c. The principle of no work, no pay applies.
Employees who participated in a strike, irrespective
of whether it is legal or illegal, are not entitled to their wages
during the period of strike pursuant to the principle of a fair
days wage for a fair days labor. Simply stated, the strikers
are not so entitled because they performed no work during
the strike. Verily, it is neither fair nor just that the dismissed
employees should litigate against their employer on the
latters time.214
The applicability of this rule to strike situations has
been affirmed in Solidbank.215 Thus, it was held that while
the acts of respondents did not merit their dismissal from
employment because it has not been substantially proved
that they committed any illegal act while participating in the
illegal strike, they are nonetheless not entitled to any
backwages based on the principle of no work, no pay.
This was also the holding in the 2011 case
of Abaria v. NLRC,216 and in the 2014 case of Visayas
Community Medical Center (VCMC) v. Yballe, 217 which
arose from the same illegal strike case decided
in Abaria. The rule was reiterated that for the exception to
apply that ordinary strikers who did not participate in the
commission of illegal acts in the course of the strike are
entitled to backwages, it is required that the strike be legal, a
situation that does not obtain in the case at bar, since the
strike herein was declared illegal.
d. Rule on entitlement to backwages in case of
economic strike.
The rule is that backwages should not be awarded
in an economic strike based on the principle that a fair days
wage accrues only for a fair days labor.218
e. Rule on entitlement to backwages in case of
ULP strike.

56

Even in cases of unfair labor practice strikes, award


of backwages rests on the courts discretion and only in
exceptional instances. It is the policy that when employees
voluntarily go on strike, even if in protest against unfair labor
practices, no backwages during the strike should be
awarded.219
In Cromwell
Commercial
Employees
and
Laborers Union (PTUC) v. CIR,220 the Supreme Court
made a distinction between two (2) types of employees
involved in an unfair labor practice strike:
(1) Those who are discriminatorily dismissed for
union
activities
and
therefore entitled
to backwages from the date of the act of
discrimination, that is, from the day of their
discharge; and
(2) Those who voluntarily go on strike as a form of
protest against what they considered an unfair
labor practice of their employer and therefore
are held generally not entitled to backwages.
Cromwell ordains that even if the strike is declared
legal because it was occasioned by the unfair labor practices
of the employer, the strikers who struck as a voluntary act of
protest against what they considered unfair labor practices of
their employer are not entitled to backwages since the
stoppage of their work was not the direct consequence of the
companys unfair labor practice. Their economic loss should
not be shifted to the employer. In regard to those who were
discriminatorily discharged, they are entitled to receive
backwages from the date of the act of discrimination, that is,
from the day of their discharge.
f. Exceptions to the no backwages rule.
Jurisprudential law recognizes several exceptions to
the no backwages rule, viz:
(1) When the employees did not participate in the
strike but were practically locked-out by the
employer.221
(2) When the employer is guilty of the grossest form
of unfair labor practice.222
(3) When the employer committed discrimination in
the rehiring of strikers - refusing to readmit those
against whom there were pending criminal
cases while admitting non-strikers who were
also criminally charged in court.223
g. Abandonment of strike to voluntarily return to
work, effect on entitlement to backwages.
When strikers abandon the strike and apply for
reinstatement despite the existence of valid grounds but the
employer either refuses to reinstate them or imposes upon
their reinstatement new conditions that constitute unfair labor
practice, the strikers who refuse to accept the new conditions
and are consequently refused reinstatement are entitled to
the losses of pay they may have suffered by reason of the
employers discriminatory acts reckoned from the time they
were refused reinstatement.224
As held in many cases, workers who staged a
voluntary unfair labor practice strike and who later offered to
return to work unconditionally but the employer refused to
reinstate them are entitled to backwages. 225 But in G & S
Transport Corp. v. Infante, 226 while it was found that
respondents expressed their intention to report back to work,
the refusal of the employer to admit them back to work was
held justified and thus should not result in the grant of
backwages to them. This is based on the rule that if there
is no work performed by the employee, there can be no
payment of any wage to him. The exception is when the
laborer was able, willing and ready to work but was illegally
locked out, suspended or dismissed or otherwise illegally

prevented from working. This exception, however, should not


apply to a case such as this since the strike was illegal.
In Philippine Diamond Hotel and Resort, Inc.
[Manila Diamond Hotel] v. Manila Diamond Hotel
Employees Union,227respondent union urged the Supreme
Court to apply the exceptional rule enunciated in Philippine
Marine228 and similar cases where the employees
unconditionally offered to return to work and were thus
entitled to backwages. It argued that there was such an offer
on its part to return to work but the hotel screened the
returning strikers and refused to readmit those whom it found
to have perpetrated prohibited acts during the strike.
It was held, however, that for the exception
in Philippine Marine to apply, it is required that the following
conditions should be present:
(1) That the strike was legal;
(2) That there was an unconditional offer to return to
work, and
(3) That the strikers were refused reinstatement.
Resultantly, if the offer to return to work made by
the strikers is conditional in that it was based on the
employers compliance with the provisions of the CBA - the
very reason for the strike - the returning strikers are not
entitled to backwages. To be so entitled, the offer to return to
work must be unconditional, that is, to return to work under
the same terms and conditions under which they worked
prior to their strike.229 However, where the unconditional offer
to return to work was not implemented because of the
injunction issued by the Supreme Court, it was held that the
employer is not duty-bound to give backwages.230
h. Agreement on strike duration pay.
There is no legal impediment for the employer and
the union to enter into an agreement that during periods of
strike, the strikers should be paid their regular wages or that
their absence from work be charged to their unused vacation
leaves or other leave benefits.
i. Remedy of strikers is to ask for
reimbursement from their union.
A worker who absents himself from work as a result
of a strike must seek reimbursement for his wages from his
union which declared the strike or he might have his absence
charged against his unused vacation leave.231
4. ATTORNEYS FEES.
The strikers whose dismissal is declared illegal are
entitled to attorneys fees by reason of their being compelled
to litigate in order to seek redress and protect their rights.
The legal basis for such grant is Article 2208 (2) of the Civil
Code.232 But this entitlement to attorneys fees is available
only to those who appealed from the decision of the Court of
Appeals which did not include the award of attorneys fees.233
5. EFFECT OF COMPROMISE SETTLEMENT DURING
PENDENCY OF CASE.
The amounts received by illegally dismissed strikers
by way of compromise settlement under any release, waiver
or quitclaim should be deducted from the total separation pay
due to each of them as may be awarded in the
case.234 However, if some of the strikers have entered into
compromise agreements with their employer and the same
have been duly approved by the Court, they should be
excluded from any monetary awards rendered in the case.235

56

6. EFFECT OF DEFIANCE BY AN EMPLOYER OF THE


RETURN-TO-WORK ORDER.
In case of non-compliance by the employer with the
return-to-work order issued in connection with the
assumption/certification of the labor dispute, he may be held
liable to pay backwages, damages and/or other affirmative
reliefs, including criminal prosecution.236 Employers who
refuse to readmit returning workers may be held liable upon
filing of the proper petition for the payment of wages and
other benefits from the date of actual refusal until the
workers are readmitted.237
Contempt citation. In addition to the reliefs granted
under the law, the DOLE Secretary may cite any defiant
party in contempt pursuant to the power vested in him under
the provisions of the Labor Code.238
II.
LIABILITY OF EMPLOYER IN CASE OF ILLEGAL
LOCKOUT
1. RELIEFS AVAILABLE TO ILLEGALLY LOCKED-OUT
EMPLOYEES.
In case of an illegal lockout, any worker whose
employment has been terminated as a consequence thereof
shall be reinstated with payment of full backwages and other
benefits.239
2. RULE IN CASE BOTH PARTIES ACTED IN PARE
DELICTO.
a. Effect when both parties have acted in pari
delicto.
If both parties have acted in pari delicto in that the
employer is guilty of illegal lockout and the union is culpable
for illegal strike, the dismissal of the striking employees is
unwarranted and their reinstatement should be ordered as a
matter of course. This doctrine in labor cases is not a novel
concept. It has been applied as early as 1982 in the case
of Philippines Interfashion, Inc. v. NLRC. 240
Subsequently, in the 1997 case of Philippine
Airlines, Inc. v. Brillantes,241 while it was duly proved that
the employees participated in the strike in defiance of
the order of the DOLE Secretary, however, the records
clearly established that the employer, Philippine Airlines,
Inc. , had terminated the employment of 183 union officers
and members in violation of the order issued by the
Secretary. This constitutes an exception to the unequivocal
rule that employees who defied the order of the Secretary
are deemed to have lost their employment status.
The same rule was applied in another 1997 strike
case, First City Interlink Transportation Co. , Inc. v. The
Hon. Secretary Confesor,242 where it was declared that as
both the employer and the employees were, in a sense, at
fault or inpari delicto, the non-returning employees should be
considered entitled to reinstatement, provided they did not
participate in the commission of illegal acts. But since
reinstatement is no longer feasible, they should be given
separation pay in lieu thereof.
The 2011 case of Automotive Engine Rebuilders,
Inc. (AER) v. Progresibong Unyon ng mga Manggagawa
sa AER,243 lately applied the in pare delicto doctrine. Both
parties here filed charges against each other, blaming the
other party for violating labor laws. Petitioner AER filed a
complaint against respondent union (Unyon) and its 18
members for illegal concerted activities. It likewise
suspended 7 union members who tested positive for illegal
drugs. On the other hand, Unyon filed a countercharge
accusing AER of unfair labor practice, illegal suspension and
illegal dismissal. In other words, AER claims that Unyon was
guilty of staging an illegal strike while Unyon claims that AER
committed an illegal lockout. However, since both AER and
Unyon are at fault or in pari delicto, it was ruled that they

should be restored to their respective positions prior to the


illegal strike and illegal lockout. Nonetheless, if reinstatement
is no longer feasible, the concerned employees should be
given separation pay up to the date set for the return of the
complaining employees in lieu of reinstatement.244
b. Employer must come to court with clean
hands.
The in pare delicto doctrine simply requires that the
party seeking relief from the court should come with clean
hands. For instance, in affirming the validity of mere
suspension rather than dismissal of the employees in the
same Philippine Airlines245 case , the High Court
emphasized that the employer which seeks the dismissal of
the employees who defied the DOLE Secretarys return-towork order should come to court with clean hands. It noted
the fact that the employer has itself violated the courts cease
and desist order when it terminated en masse the
employment of 183 officers and members of the union.
Moreover, the Supreme Court invoked in the same case its
judicial prerogative to resolve disputes in such a way as to
render to each interested party the most judicious solution.
c. The proper relief in in pare delicto cases.
In its 2013 Resolution on the Motion for
Reconsideration filed by the union in the same case
of Automotive Engine,246 the Supreme Court distinguished
the proper relief available to the strikers who were in pare
delicto with the employer and those that were not. It held that
the
former
are
entitled
to
reinstatement
but without backwages; while the latter should be reinstated
and given their backwages with interest at the rate of six
percent (6%) per annum which shall be increased to twelve
percent (12%) after the finality of the judgment.
The strikers who were deemed in this case as
having been in pare delicto with the employer were the ones
who were charged by the employer for conducting the illegal
strike. Technically, as no charges for illegal strike were filed
by the employer against some of the employees, they cannot
be among those found guilty of illegal strike. Thus, they
cannot be considered in pari delicto. They should therefore
be reinstated and given their backwages.
(d)
WAIVER OF ILLEGALITY OF STRIKE
1. WAIVER, MEANING.
A waiver is
a
voluntary
and
intentional
relinquishment or abandonment of a known legal right or
privilege. A waiver, to be valid and effective, must be
couched in clear and unequivocal terms which leave no
doubt as to the intention of a party to give up a right or
benefit which legally pertains to him. For instance, the
management prerogative to discipline employees and
impose punishment is a legal right which cannot, as a
general rule, be impliedly waived.247
2. EMPLOYERS ACT OF CONDONATION.
An employers act of condonation or forgiveness of
the effects of a wrongful act committed by an employee is an
effective waiver of his right to discipline or dismiss the latter.
Condonation may be express or implied. While the
inaction of an employer may not be considered as an implied
act of condonation if there is no clear proof that he has
knowledge of the employees wrongful act, however, if such
inaction occurs after the discovery of such wrongful act so as
to give the impression or inference that the employer has
condoned the same, the employer can no longer invoke such
wrongful act as a ground to terminate the employee.
It should be underscored, however, that the
condonation of one wrongful act does not, in any way,

56

involve the condonation of other wrongful acts for which the


employer may still proceed against the erring employee.
When grant of separation benefits not
considered condonation.
Interphil Laboratories Employees Union-FFW v.
Interphil Laboratories, Inc.248 - In this illegal strike case, the
act of the employer in paying substantial separation package
to the union officers during the pendency of the illegal strike
case was held not an act of condonation of their illegal acts
committed during the strike. The reason cited is that at the
time the union officers obtained their separation benefits,
they were still considered employees of the company, the
illegal strike case which resulted in the loss of their
employment status not having been finally resolved yet.
Hence, the employer may be said to be merely complying
with its legal obligations. The employer could have withheld
these benefits pending the final resolution of the case. Yet,
considering perhaps the financial hardships experienced by
its employees and the economic situation prevailing, it chose
to let its employees avail of their separation benefits. The
gesture of the employer should be viewed not as an act of
condonation but as an act of generosity for which it should
not be punished.
3. VOLUNTARY REINSTATEMENT CONSTITUTES A
WAIVER OF THE ILLEGALITY OF THE STRIKE.

growing out of labor disputes shall be issued by


any court or other entity, except as otherwise
provided in Articles 218 and 264 of this Code.
The reason for prohibiting the issuance of a
temporary or permanent injunction or restraining order in any
case involving or growing out of labor disputes, except in the
specified cases mentioned in the law, is to afford more or
less equal bargaining power to labor in dealing with the
employer. The prohibition must be liberally construed in favor
of the workingman as the same involves not merely
procedural but substantive rights.255
This anti-injunction policy would result in more
freedom in the workplace. It is more appropriate in the
promotion of the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and
conciliation as modes of settling labor and industrial
disputes.256
2. GENERAL RULE.
The general rule is that no temporary injunction or
restraining order in any case involving or growing out of a
labor dispute shall be issued by any court or other entity.257
3. EXCEPTIONS REFERRED TO IN ARTICLE 254.

In Citizens Labor Union v. Standard Vacuum Oil


Co.,249 the act of the employer in inviting the workers to
return to their posts without making any reference to the
pending case involving the issue of the illegality of the strike
or imposing any condition or alteration of the terms of their
employment was deemed a waiver of its right to consider the
strikers as wrongdoers. More so in this case when such
invitation was accepted by the strikers. By said act, the
parties may be said to have both abandoned their original
positions and come to a virtual compromise to resume
unconditionally their former relations.

Article 254 excepts the situations contemplated in


Articles 218 and 264 of the Labor Code.

To proceed with the declaration of the illegality of


the strike would not only breach this understanding which
was freely arrived at but would unnecessarily revive
animosities to the prejudice of industrial peace. When an
employer therefore accedes to the peaceful settlement
brokered by the NLRC, by agreeing to accept all the
employees who had not yet returned to work, it thereby
waives the issue of the illegality of the strike.250

The second exception, on the other hand, is when


the labor organization or the employer engages in any of the
prohibited activities listed in Article 264 in connection with
strikes, lockouts and picketing. The commission of said
prohibited activities in the course of the strike or lockout may
be properly forbidden or stopped by a restraining order or
injunction.258

4. COMPLIANCE WITH RETURN-TO-WORK ORDER


DOES NOT MEAN WAIVER OF ILLEGALITY OF
STRIKE; EXCEPTION.
A return-to-work order does not have the effect of
rendering as moot and academic the issue of the legality of
the strike.251
However, according to Trans-Asia Shipping Lines,
Inc. Unlicensed Crews Employees Union Associated
Labor Unions [TASLI-ALU] v. CA, 252 an employer may be
considered to have waived its right to proceed against the
striking employees for alleged commission of illegal acts
during the strike when, during a conference before the
Chairman of the NLRC, it agreed to reinstate them and
comply fully with the return-to-work order issued by the
DOLE Secretary.253
10.
INJUNCTIONS254
1. RATIONALE BEHIND THE POLICY PROHIBITING
ISSUANCE OF INJUNCTION.
The Labor Code provides:
Article 254. Injunction Prohibited. No
temporary or permanent injunction or
restraining order in any case involving or

Under the first exception, Article 218(e) expressly


confers upon the Commission (NLRC) the power to enjoin
or restrain actual and threatened commission of any or all
prohibited or unlawful acts, or to require the performance of a
particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage
to any party or render ineffectual any decision in favor of
such party xxx.

(a)
REQUISITES FOR LABOR INJUNCTIONS
1. INDISPENSABLE CONDITIONS FOR GRANT OF
INJUNCTIVE RELIEF.
The following are the indispensable conditions for
granting the temporary injunctive relief:
(a) That the complaint alleges facts which appear to
be satisfactory to establish a proper basis for
injunction; and
(b) That on the entire showing from the contending
parties, the injunction is reasonably necessary to
protect the legal rights of the plaintiff pending the
litigation.259
It must be further emphasized that injunction may
only issue upon strict compliance with the statutory
requirements.260
2. EXISTENCE OF A LABOR DISPUTE NECESSARY.
The case of Ravago v. Esso Eastern Marine,
Ltd. ,261 is instructive in that the law proscribes the issuance
of injunctive relief only in those cases involving or growing
out of a labor dispute. The petitioners complaint merely
revolves around the issue of his alleged dismissal from
service and his claim for backwages, damages and

56

attorneys fees. Consequently, it was held that the said case


before the NLRC neither involves nor grows out of a labor
dispute. It does not involve the fixing of the terms and
conditions of employment or the representation of persons
with respect thereto. This means that if the rights and
obligations of the parties under certain contracts are not at
issue in a labor case, the same may be enforced in a civil
action in the regular courts, not in the NLRC.262
I.

have granted the injunctive relief to prevent the grave


damage brought about by the unlawful strike.265
In the earlier case of San Miguel Corporation v.
NLRC,266 where the same issue of NLRCs duty to enjoin an
unlawful strike was raised, the Supreme Court ruled that the
NLRC committed grave abuse of discretion when it denied
the petition for injunction to restrain the union from declaring
a strike based on non-strikeable grounds.

INJUNCTION IN PICKETING, STRIKE OR LOCKOUT


CASES

In ILaw at Buklod ng Manggagawa [IBM] v.


267

1. PROHIBITION ON INJUNCTION AGAINST STRIKES


AND LOCKOUTS.

NLRC,

As a general rule, strikes and lockouts that are


validly declared enjoy the protection of the law and cannot be
enjoined unless illegal acts are committed or threatened to
be committed in the course thereof. In the case of strikes,
this policy applies even if the strike appears to be illegal in
nature. The rationale for this policy is the protection extended
to the right to strike under the Constitution and the law. It is
basically treated as a weapon that the law guarantees to
employees for the advancement of their interest and for their
protection.263

the law. Failure to promptly issue an injunction by the NLRC

2. EXCEPTIONS WHEN THE STRIKE ITSELF MAY BE


ENJOINED.
However, in some cases, injunctions issued to
enjoin the conduct of the strike itself and not only the
commission of illegal or prohibited acts in the course thereof,
were held to be valid. For instance, in San Miguel
Corporation v. NLRC,264 the Supreme Court ruled that
injunction may be issued not only against the commission of
illegal acts in the course of the strike but against the strike
itself. In this case, the notice of strike filed by the union has
been converted into a preventive mediation case. Having
been so converted, a strike can no longer be staged based
on said notice. Upon such conversion, the legal effect is that
there is no more notice of strike to speak of. When the
NCMB ordered the preventive mediation, the union had
thereupon lost the notice of strike it had filed. However, the
NCMB which effected the conversion has, under the law, no
coercive powers of injunction. Consequently, petitioner
company in the instant case sought recourse from the NLRC.
The NLRC, however, issued a TRO only for the free ingress
to and egress from petitioners plants, but did not enjoin the
conduct of the unlawful strike itself. It ignored the fatal lack of
notice of strike consequent to the conversion thereof into a
preventive mediation case. Article 264(a) of the Labor Code
explicitly states that a declaration of strike without first having
filed the required notice is a prohibited activity which may be
prevented through an injunction in accordance with Article
254 of the same Code. Clearly, public respondent should

it was held that it is the legal duty and obligation

of the NLRC to enjoin a partial strike staged in violation of

was likewise held therein to be an abuse of discretion.


In Bulletin Publishing v. Sanchez,268 an injunction
was allowed against the strike which was staged to compel
the employer to ignore the law. The reason is that when
trade unionism and strikes are used in violation of the law,
misuse thereof can be the subject of judicial intervention.
3. REGULAR COURTS ARE PROHIBITED FROM ISSUING
INJUNCTION AGAINST STRIKES OR LOCKOUT.
It bears stressing that all the cases cited above
involve the issuance of restraining order or injunction by the
NLRC pursuant to the exercise of its injunctive power. In
contrast, regular courts are absolutely prohibited to grant any
injunctive relief in cases of strikes or lockouts.
The best illustrative case on this point
is Associated Labor Unions (ALU-TUCP) v. Hon.
Borromeo and Belyca Corporation. 269 As a consequence
of a controversy arising from charges of unfair labor practice
against the private respondent, Belyca Corporation, a firm
engaged in livestock farming, the petitioner filed a notice of
strike with the then Ministry of Labor and Employment. Later,
it filed a complaint for various offenses against the private
respondent ranging from unfair labor practice to nonpayment of the minimum wages. It subsequently conducted
a strike. On the same date of the strike, the private
respondent commenced suit for injunction with the
respondent Regional Trial Court (RTC) presided by Hon.
Antonio V. Borromeo. It alleged that the petitioner had
obstructed free ingress to the firm's premises, preventing
workers of Belyca farms from entering the business
establishments . . . preventing said workers from giving feeds
and/or food to the hogs and fowls which would kill all of said
hogs and fowls if not attended to this very day . . . On the
same day, the respondent judge issued a temporary
restraining order (TRO) commanding herein defendants [the
striking workers], their agents and/or representatives to allow
plaintiff [the private-respondent) or workers or authorized
representatives free passage to and from Belyca Farms,
located at Kalasungay Malaybalay, Bukidnon to feed
plaintiffs seven thousand five hundred (7,500) hogs and
eight thousand (8,000) fowls. The petitioner filed a motion
for reconsideration (to lift TRO as well as for the dismissal of
the case on the ground of lack of jurisdiction) . Respondent
judge, however, denied the motion. He later extended the
TRO for another 20 days for the sake of justice and
fairness.
In ruling that the RTC had acted without jurisdiction
when it issued the TRO, the Supreme Court cited the
following justifications:
(1) The courts of law have no jurisdiction to act on
labor cases or various incidents arising therefrom. That is

56

basic and elementary. Jurisdiction to try and adjudicate such


cases pertains exclusively to the proper labor officials of the
Department of Labor, particularly the Labor Arbiter under
Article 217 of the Labor Code.
(2) Well-established jurisprudence is to the effect
that the regular courts have no jurisdiction.270
(3) The reason for such exclusive jurisdiction is that
since picketing and strikes may be mere incidents or
consequences of an unfair labor practice, it is but proper that
a Writ of Injunction prayed for in connection with that labor
dispute originate from the [labor] court having jurisdiction
over the main case inasmuch as it is that [labor] court that
has cognizance of all relevant facts.271

employer-employee relationship with the picketing strikers,


may apply for injunction with the regular courts (not with the
NLRC) to enjoin the conduct of the picket.
Because of the absence of such employeremployee relationship, the NLRC cannot entertain such
application for injunction from innocent bystanders. Only
the employer of the picketers can apply for injunctive relief
from the NLRC.

------------oOo------------

(4) The respondent judge cannot enjoin acts carried


out as a consequence of the strike without unavoidably ruling
on the legality of the strike itself. (The strike can continue. It
does not mean that this Court has ruled on the legality or
illegality of the said strike. ) To say indeed that the workers
had obstructed free passage to the strike-bound firm, is, by
necessity, to say that the strike was illegal, notwithstanding
the judge's own words of caution (that he was not ruling on
the legality or illegality of the strike) . For under the Labor
Code: (E) No person engaged in picketing shall commit any
act of violence, coercion, or intimidation or obstruct the free
ingress to or egress from the employer's premises for lawful
purposes, or obstruct public thoroughfares. 272
II.
INJUNCTION IN PICKETING CASES
1. PROHIBITION ON INJUNCTION AGAINST PEACEFUL
PICKETING.
As a general rule, injunction cannot be issued
against the conduct of picketing by the workers. Under our
constitutional set up, picketing is considered part of the
freedom
of
speech
duly
guaranteed
by
the
Constitution.273 However,
excepted
from
this
legal
proscription are the situations mentioned below.
2. EXCEPTIONS.
Under the following circumstances, picketing may
be enjoined by the NLRC:
(1) Where picketing is carried out through the use of
illegal means;274
(2) Where picketing involves the use of violence
and other illegal acts;275
(3) Where picketing affects the rights of third parties
and injunction becomes necessary to protect
such rights.276
(b)
INNOCENT BYSTANDER RULE
1. WHEN INJUNCTION ON PICKETING IS ALLOWED
THROUGH THE REGULAR COURTS AND NOT
THROUGH THE NLRC.
In situations where the picket affects not only the
employer but also the business operations of other
establishments owned by third parties, an injunction may be
secured by the latter from the regular courts to enjoin the
picket. Picketing strikers cannot prevent employees of other
companies from using the same premises being picketed. A
picketing labor union has no right to prevent employees of
another company which is not their employer, from getting in
and out of its rented premises, otherwise, it will be held liable
for damages for its acts against an innocent bystander.277
Under the Innocent Bystander Rule, the thirdparty employers or innocent bystanders who have no

56