Collective Bargaining History

CB History vs. Mutuality of Interest

1. NAFTU vs. Mainit December 21, 1990.] 192 SCRA 59
p2
2. Philippine Land-Air-Sea Labor Union vs. CIR, GR No. L-14656, November 29, 1960)
p5
3. Belyca Corporation vs. Ferrer-Calleja (GR No. 77395, Nov. 1988)
p6
Cases, Bargaining Deadlock Rule:
4. KaisahanngManggagawang Pilipino (Kampil-Katipunan) vs. Trajano (GR No. 75810, Sept. 1991) p9
5. Capitol Medical Center Alliance of Concerned Employees-USFW vs. Laguesma (GR No. 118915, Feb.
1997)
p11
Posting of CBA
6. Mandatory requirement; non-compliance will result in ineffectiveness of CBA (ATU vs. Trajano, 1988) p14
7. ALU vs. Ferrer-Calleja, May 1989)
p16
Refusal to Negotiate
8. General Milling Corporation vs. CA,
p18
9. Kiok Loy vs. NLRC
10. Divine Word University of Tacloban vs. SOLE
CBA concluded through arbitral award
11. LMG Chemicals Corporation vs. Secretary of DOLE, (GR No. 127422, April 2001)
p24
Interplay of Jurisdiction, Labor Arbiters vs. Voluntary Arbitrators
12. San Jose vs. NLRC & Ocean Terminal Services (GR 121227, Aug. 1998)
p30
13. San Miguel Corporation vs. NLRC
14. Sanyo Philippines Workers Union vs. Canizares, GR No. 101619, July 1992
p39
Premature Strikes
15. Insurefco Paper Pulp Project Workers Union vs. Insular Sugar Refinery Corporation, 95 Phil. 161
16. Almeda vs. CIR, 97 Phil. 306
17. National Labor Union vs. Phimco., 70 Phil 300
18. Union of the Philippine Education Employees (NLU) vs. PECO, L-4423, March 31, 1952)
Invalid Grounds for Strike
19. Filcon Manufacturing Corporation vs. Lakas Manggagawa sa Filcon-Lakas Manggagawa Labor Center
[LMF-LMLC], G. R. No. 150166, July 26, 2004)..
20. Union of Filipro Employees, vs. Nestle Philippines, Inc., G. R. No. 88710-13, Dec. 19, 1990).Issues already
brought before grievance machinery or voluntary arbitration.
Project Employees
21. Exodus International Construction Corporation, et al. v. Guillermo Biscocho, et al., G.R. No. 166109, Feb.
2011
Validity of Fixed Period Employment:
22. Lynvil Fishing Enterprises, Inc. vs. Andres G. Ariola, et al., G.R. No. 181974, Feb. 2012
Probationary Employment
23. Canadian Opportunities Unlimited, Inc. vs. Bart Q. Dalangin, Jr., G.R. No. 172223, February 6, 2012.
24. Armando Ailing vs. Jose B. Feliciano, Manuel F. San Mateo III, et al., G.R. No. 185829. April 25, 2012.
Management Prerogatives
25. Philippine Industrial Security Agency Corporation vs. Aguinaldo, G. R. No. 149974, June 15, 2005)
26. Mendoza vs. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004
27. Deles, Jr. vs. NLRC, G. R. No. 121348, March 9, 2000).
28. Mendoza vs. Rural Bank of Lucban, G.R. No. 155421, 07 July 2004).
Extent of management prerogatives
29. Philippine Airlines, Inc. vs. NLRC, G. R. No. 115785, Aug. 4, 2000
30. Sime Darby Pilipinas, Inc. vs. NLRC, G.R. No. 119205, 15 April 1998, 289 SCRA 86)
31. Sentinel Security Agency, Inc. vs. NLRC, G. R. No. 122468, Sept. 3, 1998
32. Mendoza vs. Rural Bank of Lucban, G. R. No. 155421, July 7, 2004)
33. Benguet Electric Cooperative vs. Fianza, G. R. No. 158606, March 9, 2004
Basic elements of justice and fair play adhered to.
34. The Philippine American Life and General Insurance Co. vs. Gramaje, G. R. No. 156963, Nov. 11, 2004;
Globe Telecom, Inc. vs. Florendo-Flores, G. R. No. 150092, Sept. 27, 2002).
Transfer
35. William EndeliseoBarroga vs. Data Center College of the Philippines, et al., G.R. No. 174158, June 2011
No vested right in position
36. OSS Security & Allied Services, Inc., vs. NLRC, G. R. No. 112752, Feb. 9, 2000
37. Tan vs. NLRC, 299 SCRA 169, 180 [1998]
38. Chu vs. NLRC, G. R. No. 106107, June 2, 1994

[G.R. No. 79526 : December 21, 1990.]

192 SCRA 598
NATIONAL ASSOCIATION OF FREE TRADE UNIONS (NAFTU), Petitioner, vs. MAINIT
LUMBER DEVELOPMENT COMPANY WORKERS UNION-UNITED LUMBER AND GENERAL
WORKERS OF THE PHILIPPINES. (MALDECOWU-ULGWP), Respondents.

DECISION

PARAS, J.:

This is a petition for Certiorari to annul and set aside the resolution ** of the public
respondent Bureau of Labor Relation dated January 29,1987 in BLR Case No. A-5-99-85 entitled:
IN RE: Petition for Direct Certification or Certification Election, Mainit Lumber Development
Company Workers Union-United Lumber and General Workers of the Philippines (MALDECOWUULGWP), petitioner-appellee vs. Mainit Lumber and Development Company, Inc. (MALDECO),
respondent; National Association of Free Trade Unions (NAFTU), compulsory intervenor-appellant,
affirming the Order of the Med-Arbiter date September 24, 1986 and denying petitioner's motion
for reconsideration.
The facts are as follows:
On January 28, 1985, private respondent Mainit Lumber Development Company Workers UnionUnited Lumber and General Workers of the Philippines, MALDECOWU-ULGWP (ULGWP, for short),
a legitimate labor organization duly registered with the Ministry ofLabor and Employment under
Registry No. 2944-IP, filed with Regional Office No. 10, Ministry of Labor and Employment at
Cagayan de Oro City, a petition for certification election to determine the sole and exclusive
collective bargaining representative among the rank and file workers/employees of Mainit Lumber
Development Company Inc. (MALDECO), a duly organized, registered and existing corporation
engaged in the business of logging and saw-mill operations employing approximately 136 rank
and file employees/workers (Rollo, p. 11; Petition; Annex "A"). The case was scheduled for
hearing two (2) times. During the first scheduled hearing on February 20, 1985, the counsel for
compulsory intervenor (now petitioner), National Association of Free Trade Union (NAFTU)
requested for postponement on the ground that he was leaving for abroad. During the scheduled
hearing of March 13, 1985, they, however, agreed to submit simultaneously their respective
position papers within twenty (20) days (Rollo, p. 17; Petition; Annex "D").
Petitioner ULGWP, private respondent herein, in its petition and position paper alleged, among
others: (1) that there was no certification election conducted within 12 months prior to the filing
of the petition; (2) that the petition was filed within the 60 day freedom period, i.e. CBA expired
on February 28, 1985; (3) that the petition is supported by the signatures of 101 rank and file
employees out of a total of 201 employees of the employer or more than thirty percent (30%)
than that required by law (Rollo, p. 13; Petition; Annex "B").
:-cralaw

On April 11, 1985, the Med-Arbiter granted the petition for certification election. On April 26,
1985, NAFTU appealed the decision of the Med-Arbiter on the ground that MALDECO was
composed of two (2) bargaining units, the Sawmill Division and the Logging Division, but both the
petition and decision treated these separate and distinct units only as one (Rollo, p. 20; Petition;
Annex "E").
On April 28, 1986, the Bureau of Labor Relations affirmed the decision (Rollo, p. 26; Petition;
Annex "J"). Thus, a certification election was held on separate dates at the employer's sawmill
division and logging area respectively. In said election MALDECOWU-ULGWP garnered a total vote
of 146 while NAFTU garnered a total of 2 votes (Rollo, p. 42; Petition; Annex "O").
On July 26, 1986, NAFTU filed an election protest alleging massive vote buying accompanied with
grave and serious threat force and intimidation on the lives of 25 applicants as stated in a Joint
Affidavit attached thereto (Rollo, p. 28; Petition; Annexes "K", "K-3").
MALDECO filed its Manifestation on August 3, 1986, which corroborated petitioner's stand.
Attached to the said Manifestation was a joint affidavit executed by thirty five (35) of its
employees/workers (Rollo, p. 33; Petition; Annexes "L", "L-1").
On September 3, 1986, private respondent filed its position paper (Rollo, p. 36; Petition; Annex
"I"). On September 8, 1986 petitioner filed its opposition to private respondent's position paper

(Rollo, p. 39; Petition; Annex "N"). On September 24, 1986, the Med-Arbiter dismissed the
election protest (Rollo, p. 42; Petition; Annex "O").
On October 10, 1986, petitioner NAFTU appealed the order of the Med-Arbiter to the Bureau of
Labor Relations in Manila (Rollo, p. 46) which denied the appeal (Rollo, p. 48) and the two
motions for reconsideration (Rollo, pp. 51, 55).
Hence, this petition.
The issues raised in this petition are:
I
WHETHER OR NOT IT WAS RIGHT FOR THE MED-ARBITER TO CHANGE THE EMPLOYER FROM
TWO SEPARATE BARGAINING UNITS TO ONLY ONE.
II
WHETHER OR NOT THERE WAS MASSIVE VOTE BUYING AND SERIOUS THREAT TO LIFE TO
JUSTIFY INVALIDATING THE RESULT OF THE ELECTION.
III
WHETHER OR NOT AN ELECTION PROTEST IN A CERTIFICATION ELECTION CAN BE GIVEN DUE
COURSE EVEN IF NOT ENTERED IN THE MINUTES OF THE ELECTION.
In the case at bar, petitioner alleges that the employer MALDECO was composed of two
bargaining units, the Sawmill Division in Butuan City and the Logging Division, in Zapanta Valley,
Kitcharao, Agusan Norte, about 80 kilometers distant from each other and in fact, had then two
separate CBA's, one for the Sawmill Division and another for the Logging Division, both the
petition and decision referred only to one bargaining unit; that from 1979 to 1985, the Ministry of
Labor and Employment recognized the existence of two (2) separate bargaining units at
MALDECO, one for its Logging Division and another for its Sawmill Division.
Significantly, out of two hundred and one (201) employees of MALDECO, one hundred seventy
five (175) consented and supported the petition for certification election, thereby confirming their
desire for one bargaining representative (Rollo, p. 104).
:- nad

Moreover, while the existence of a bargaining history is a factor that may be reckoned with in
determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors
must be considered. The test of grouping is community or mutuality of interests. This is so
because "the basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their
collective bargaining rights." (Democratic Labor Association v. Cebu Stevedoring Company, Inc.,
et al., 103 Phil. 1103 [1958]).
Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the
Logging Division. Their functions mesh with one another. One group needs the other in the same
way that the company needs them both. There may be difference as to the nature of their
individual assignments but the distinctions are not enough to warrant the formation of a separate
bargaining unit.
Secondly, the issue had been raised earlier by petitioner. The respondent Bureau of Labor
Relations had already ruled on the same in its decision dated April 28, 1986 affirming the MedArbiter's Order dated April 11, 1985 which granted the petition for Certification Election. NAFTU
did not elevate the April 28, 1986 decision to this Court. On the contrary, it participated in the
questioned election and later it did not raise the issue in its election protest (Rollo, p. 210).
Hence, the principle of res judicata applies. It was settled as early as 1956 that "the rule which
forbids the reopening of a matter once judicially determined by competent authority applies as
well to the judicial and quasi-judicial acts of public, executive or administrative officers and
boards acting within their jurisdiction as to the judgments of courts having general judicial
powers . . ." (B.F. Goodrich Philippines, Inc. v. Workmen's Compensation Commission and
Leandro M. Castro, 159 SCRA 355 [1988]).
With regard to the second and third issues raised by petitioner, the public respondent Bureau of
Labor Relations in its order dated September 24, 1986 found the following, to wit:
"After a careful perusal of the records of this case and after considering, adducing and weighing
all the pleadings, arguments, etc. and the circumstances attendant to the instant case, this Office
is of the opinion that the grounds relied upon by the protestant NAFTU in its protest are bereft of
any merit, hence, this Office finds no cogent reason to order the invalidation or annulment of the
certification election under protest or the holding of a run-off election thereat between no union
and the protestee, MALDECOWU-ULGWP. Indeed, the minutes of said certification elections

conducted both at the sawmill and logging departments on August 15 and 21, 1986 respectively,
of the respondent/employer showed that there was no protest on massive vote buying
accompanied with grave and serious threats, force and intimidation raised by any of the parties
who were ably represented in said elections. Paragraph 2, Section 9, Rule 6 of the Rules and
Regulations implementing the Labor Code of the Philippines (now Section 3, Rule VI, Book 5 of
the Omnibus Rules Implementing the Labor Code) provides that protests not so raised and
contained in the minutes of the proceedings are deemed waived. Allegations of vote buying,
grave and serious threats, force and intimidation are questions of fact which should be contained
in the minutes of said proceedings. There is no clear and convincing proof presented by the
protestant in support of its contention, hence, we have no other alternative than to uphold the
election results."
In the case of Philippine Airlines Employees' Association (PALEA) v. Hon. Pura Ferrer-Calleja, et
al., 162 SCRA 425 [1988]), this Court held that factual findings of the Bureau of Labor Relations
which are supported by substantial evidence are binding on this Court and must be respected.
: nad

PREMISES CONSIDERED, the resolution of public respondent Bureau of Labor Relations dated
January 29, 1987 is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. L-14656

November 29, 1960

PHILIPPINE LAND-AIR-SEA LABOR UNION (PLASLU), petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS, ET AL., respondents.
Emilio Lumontad for petitioner.
Simeon S. Andres for respondent CIR.
Severino, Ferrer, Revira and Benigno for respondent AWA.
Hilado and Hilado for respondent San Carlos Milling Co.
GUTIERREZ DAVID, J.:
This is a petition to review on certiorari an order of the Court of Industrial Relations in Case No. 38 MC-Cebu certifying the Allied Workers' Association of the
Philippines, San Carlos Chapter, as the sole collective bargaining representative of the employees of the San Carlos Milling Co., Inc.
The record shows that in said Case No. 38 MC-Cebu the Industrial Court on May 25, 1956 ordered the holding of a certification election to determine which of
the two contending labor unions therein, herein petitioner Philippine Land-Air-Sea Labor Union (PLASLU)or respondent Allied Workers' Association of the
Philippines (AWA), shall be the sole collective bargaining agent to the employees of the San Carlos Milling Co. The pertinent portions of the court's order read
as follows:
Considering the history of bargaining relations in this case where there has only been one bargaining unit, and for purposes of effectuating the
policies of the Act, the same should be maintained. In other words, the appropriate bargaining unit is the Employer unit composed of 602 employees
including some 200 piece work (pakiao) workers and stevedores appearing in the Employer's payrolls during the milling and off the season minus
the alleged laborers and operators of farm tractors who are hired and paid by the sugar cane planters. (Emphasis supplied.)
All the foregoing considered, the Court hereby directs the Department of Labor to conduct a certification election in the premises of the San Carlos
Milling Company, Ltd. at San Carlos, Negros Occidental for the purpose of determining, under existing rules and regulations on the matter, which of
the two (2) contending labor unions herein, the PLASLU or the AWA shall be the sole collective bargaining agent in accordance with the provisions
of the Act. The Employer is hereby ordered to submit a list of employees appearing in its payroll during milling season for the year 1955 to the
Department of Labor which, together with the "Exhibit X-Court" now part of the records of this case shall be used as the list of eligible voters minus
employees who are performing functions of supervisors and security guards who are excluded from participating in said election. (Emphasis
supplied.)
SO ORDERED.
Prior to the holding of the election, respondent AWA filed an urgent motion to exclude 144 employees from participating in the election. The motion, however,
was denied, the Industrial Court holding that the workers sought to be excluded were eligible to vote since they were actual employees of good standing of the
respondent company during the milling season of 1955 and were included in the company's payroll as of that date.
On September 21, 1956, the certification election was held in the premises of the San Carlos Milling Co., PLASLU receiving 88 votes while AWA garnered 149,
with 390 ballots recorded as challenged, 242 of them by the petitioner PLASLU and 148 by the respondent AWA filed with the Industrial Court a petition
contesting the election on the ground of the ineligibility of the voters cast the 148 ballots is challenged by PLASLU were cast by legitimate employee of the
company, as they were the votes of "piece work (pakiao) workers and stevedores appearing in the employer's payroll during the milling and off-season" of 1955.
PLSLU, on the other hand, in an urgent motion filed on October 4, 1956, questioned the validity of the 242 ballots cast by stevedores and piece workers. The
motion was opposed by AWA on the ground that as a protest of the election it was filed late. The Industrial Court, however, considered the same as an answer
to AWA'S petition, and on September 4, 1957, after hearing the arguments of the parties, ordered that all the 390 challenged ballots were opened. After the
canvass, 148 votes challenged by AWA were counted in favor of PLASLU. Of the 242 votes challenged by PLASLU, 3 were counted in its favor, 228 credited in
favor of AWA, and 11 declared either for no union or spoiled ballots. Adding the votes to the results of the certification election, the final count showed that
respondent AWA garnered a total of 377 votes as against 239 for PLASLU. Accordingly, said respondent was certified by the Industrial Court in its order dated
March 12, 1958 as the sole collective bargaining agent of the employees of the San Carlos Milling Co. As its motion for reconsideration of the order was denied
by the court en banc with Judge Feliciano Tabigne dissenting -- the petitioner PLASLU filed the present petition for review, contending that Industrial Court
erred in not excluding the 242 votes challenged by it from the total number of votes credited to respondent AWA.
We find petitioner's contention to be meritorious.
In order of May 25, 1956 authorizing the certification election, the trial judge of the Industrial Court directed the "list of employees appearing in its payroll during
milling season for the year 1955 ... together with the Exhibit "X-Court" now part of the records of this case shall be used as the list of eligible voters minus
employees who are performing functions of supervisors and security guards who are excluded from participating in said election." It being undisputed that the
challenged votes were cast by casual employees consisting of stevedores and piece workers who as stated by Judge Tabigne in his dissent "were not
included in the list of employees appearing in the payroll of the company during the milling season for the year 1955 nor did they appear in the Exhibit "X-Court"
which formed portion of the list of personnel allowed to vote in this certification election", the said challenged votes should have been excluded. Citing that the
appropriate bargaining unit is the employer's unit composed of 602 employees, including the piece workers and stevedores whose votes were challenged by
PLASLU, the respondent AWA argues that the challenged votes were cast by employees eligible to vote. It will be noted, however, that these employees whose
votes were challenged were hired on temporary or casual basis and had work of a different nature from those of the laborers permitted to vote in the certification
election. In the case of DemocraticLabor Union vs. Cebu Stevedoring Co., Inc., et al. (G.R. No. L-10321, February 28, 1958) this Court had occasion to rule that
in the determination of the proper constituency of a collective bargaining unit, certain factors must be considered, among them, the employment status of the
employees to be affected, that is to say, the positions and categories of work to which they belong, and the unity of the employees' interest. And this is so
because the basic test of a bargaining unit's acceptability is whether it will best assure to all employees is whether it will be assure to all employees the exercise
of their collective bargaining rights. (See also Alhambra Cigar & Cigarette Manufacturing Co. vs. Alhambra Employee's Association, 107 Phil., 23.) It appearing
that the 242 stevedores and piece workers, whose votes have been challenged, were employed on casual or day to day basis and have no reasonable basis for
continued or renewed employment for any appreciable substantial time not to mention the nature of work they perform they cannot be considered to have
such mutuality of interest as to justify their inclusion in a bargaining unit composed of permanent or regular employees.
There is nothing to the contention that the order complained of is merely complementary to the order of the Industrial Court dated September 4, 1957, which has
become final and executory the same not having been appealed. It will be observed that the said order of September 4, 1957, merely ordered the opening and
canvassing of the challenged ballots. Any appeal taken from said order would therefore have been premature.
Disregarding the votes cast by stevedores and piece workers which were counted in favor of the respondent AWA, the final results of the certification election
show that the petitioner PLASLU garnered a majority of the votes cast by eligible voters. Consequently, said petitioner should be certified as the sole collective
bargaining representative of the employees of the San Carlos Milling Co.
Wherefore, the order complained of is reversed and the petitioner PLASLU is hereby certified as the collective bargaining agent of the employees of the San
Carlos Milling Company. Without costs.

G.R. No. 77395 November 29, 1988

BELYCA CORPORATION, petitioner,
vs.
DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND EMPLOYMENT; MED-ARBITER, RODOLFO S. MILADO,
MINISTRY OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR UNION (ALU-TUCP), MINDANAO REGIONAL
OFFICE, CAGAYAN DE ORO CITY,respondents.
Soriano and Arana Law Offices for petitioner.
The Solicitor General for public respondent.
Francisco D. Alas for respondent Associated Labor Unions-TUCP.

PARAS, J.:
This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the resolution of the Bureau of Labor Relations dated
November 24, 1986 and denying the appeal, and the Bureau's resolution dated January 13, 1987 denying petitioner's motion for reconsideration.
The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4) reads as follows:
WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and the appeal therefrom denied.
Let, therefore, the pertinent records of the case be remanded to the office of origin for the immediate conduct of the certification election.
The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as follows:
WHEREFORE, the Motion for Reconsideration filed by respondent Belyca Corporation (Livestock Agro-Division) is hereby dismissed for
lack of merit and the Bureau's Resolution dated 24 November 1986 is affirmed. Accordingly, let the records of this case be immediately
forwarded to the Office of origin for the holding of the certification elections.
No further motion shall hereafter be entertained.
The antecedents of the case are as follows:
On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor organization duly registered with the Ministry of Labor and
Employment under Registration Certificate No. 783-IP, filed with the Regional Office No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a
petition for direct certification as the sole and exclusive bargaining agent of all the rank and file employees/workers of Belyca Corporation (Livestock and AgroDivision), a duly organized, registered and existing corporation engaged in the business of poultry raising, piggery and planting of agricultural crops such as
corn, coffee and various vegetables, employing approximately 205 rank and file employees/workers, the collective bargaining unit sought in the petition, or in
case of doubt of the union's majority representation, for the issuance of an order authorizing the immediate holding of a certification election (Rollo, p. 18).
Although the case was scheduled for hearing at least three times, no amicable settlement was reached by the parties. During the scheduled hearing of July 31,
1986 they, however, agreed to submit simultaneously their respective position papers on or before August 11, 1986 (rollo. p. 62).
Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged, among others, (1) that there is no existing collective bargaining
agreement between the respondent employer, petitioner herein, and any other existing legitimate labor unions; (2) that there had neither been a certification
election conducted in the proposed bargaining unit within the last twelve (12) months prior to the filing of the petition nor a contending union requesting for
certification as the. sole and exclusive bargaining representative in the proposed bargaining unit; (3) that more than a majority of respondent employer's rankand-file employees/workers in the proposed bargaining unit or one hundred thirty-eight (138) as of the date of the filing of the petition, have signed membership
with the ALU-TUCP and have expressed their written consent and authorization to the filing of the petition; (4) that in response to petitioner union's two letters to
the proprietor/ General Manager of respondent employer, dated April 21, 1986 and May 8, 1 986, requesting for direct recognition as the sole and exclusive
bargaining agent of the rank-and-file workers, respondent employer has locked out 119 of its rank-and-file employees in the said bargaining unit and had
dismissed earlier the local union president, vice-president and three other active members of the local unions for which an unfair labor practice case was filed by
petitioner union against respondent employer last July 2, 1986 before the NLRC in Cagayan de Oro City (Rollo, pp. 18; 263).
<r e|| an 1w>

Respondent employer, on the other hand, alleged in its position paper, among others, (1) that due to the nature of its business, very few of its employees are
permanent, the overwhelming majority of which are seasonal and casual and regular employees; (2) that of the total 138 rank-and-file employees who
authorized, signed and supported the filing of the petition (a) 14 were no longer working as of June 3, 1986 (b) 4 resigned after June, 1986 (c) 6 withdrew their
membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were dismissed due to malicious insubordination and destruction of property
and (f) 100 simply abandoned their work or stopped working; (3) that the 128 incumbent employees or workers of the livestock section were merely transferred
from the agricultural section as replacement for those who have either been dismissed, retrenched or resigned; and (4) that the statutory requirement for holding
a certification election has not been complied with by the union (Rollo, p. 26).
The Labor Arbiter granted the certification election sought for by petitioner union in his order dated August 18, 1986 (Rollo, p. 62).
On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor Arbiter to the Bureau of Labor Relations in Manila (Rollo, p. 67)
which denied the appeal (Rollo, p. 80) and the motion for reconsideration (Rollo, p. 92). Thus, the instant petition received in this Court by mail on February 20,
1987 (Rollo, p. 3).
In the resolution of March 4, 1987, the Second Division of this Court required respondent Union to comment on the petition and issued a temporary restraining
order (,Rollo, p. 95).
Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents filed its comment on April 8, 1987 (Rollo, p. 218).
On May 4, 1987, the Court resolved to give due course to the petition and to require the parties to submit their respective memoranda within twenty (20) days
from notice (Rollo, p. 225).

The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the comment for public respondents as its memorandum (Rollo, p. 226);
memorandum for respondent ALU was filed on June 30, 1987 (Rollo, p. 231); and memorandum for petitioner, on July 30, 1987 (Rollo, p. 435).
The issues raised in this petition are:
I
WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE BARGAINING UNIT.
II
WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF THE EMPLOYEES IN THE PROPOSED
BARGAINING UNIT, ASKING FOR A CERTIFICATION ELECTION HAD BEEN STRICTLY COMPLIED WITH.
In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining agent of all the rank-and-file workers of the livestock and agro
division of petitioner BELYCA Corporation (Rollo, p. 232), engaged in piggery, poultry raising and the planting of agricultural crops such as corn, coffee and
various vegetables (Rollo, p. 26). But petitioner contends that the bargaining unit must include all the workers in its integrated business concerns ranging from
piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into fragmented bargaining units (Rollo, p. 435).
< re| |an 1w>

The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256 of the Code provides:
Art. 256. Exclusive bargaining representative.The labor organization designated or selected by the majority of
the employees in an appropriate collective bargaining unit shall be exclusive representative of the employees in
such unit for the purpose of collective bargaining. However, an individual employee or group of employee shall
have the right at any time to present grievances to their employer.
According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer, comprised of all or less than all of the entire
body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to be best suited to serve reciprocal rights
and duties of the parties under the collective bargaining provisions of the law (Rothenberg in Labor Relations, p. 482).
This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective bargaining unit.
Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees (Glove Doctrine);
(2) affinity and unity of employee's interest, such as substantial similarity of work and duties or similarity of compensation and working conditions; (3) prior
collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees".
Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial court's conclusion that two separate
bargaining units should be formed in dealing with respondent company, one consisting of regular and permanent employees and another consisting of casual
laborers or stevedores. Otherwise stated, temporary employees should be treated separately from permanent employees. But more importantly, this Court laid
down the test of proper grouping, which is community and mutuality of interest.
Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra Employees' Association 107 Phil. 28 [1960]) where the employment
status was not at issue but the nature of work of the employees concerned; the Court stressed the importance of the second factor otherwise known as the
substantial-mutual-interest test and found no reason to disturb the finding of the lower Court that the employees in the administrative, sales and dispensary
departments perform work which has nothing to do with production and maintenance, unlike those in the raw leaf, cigar, cigarette and packing and engineering
and garage departments and therefore community of interest which justifies the format or existence as a separate appropriate collective bargaining unit.
Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the employees concerned was again challenged, the Court reiterating
the rulings, both in Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra and Alhambra Cigar and Cigarette Co. et al. v. Alhambra Employees'
Association (supra) held that among the factors to be considered are: employment status of the employees to be affected, that is the positions and categories of
work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties.
In any event, whether importance is focused on the employment status or the mutuality of interest of the employees concerned "the basic test of an asserted
bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective
bargaining rights (Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra)
Hence, still later following the substantial-mutual interest test, the Court ruled that there is a substantial difference between the work performed by musicians
and that of other persons who participate in the production of a film which suffice to show that they constitute a proper bargaining unit. (LVN Pictures, Inc. v.
Philippine Musicians Guild, 1 SCRA 132 [1961]).
Coming back to the case at bar, it is beyond question that the employees of the livestock and agro division of petitioner corporation perform work entirely
different from those performed by employees in the supermarts and cinema. Among others, the noted difference are: their working conditions, hours of work,
rates of pay, including the categories of their positions and employment status. As stated by petitioner corporation in its position paper, due to the nature of the
business in which its livestock-agro division is engaged very few of its employees in the division are permanent, the overwhelming majority of which are
seasonal and casual and not regular employees (Rollo, p. 26). Definitely, they have very little in common with the employees of the supermarts and cinemas. To
lump all the employees of petitioner 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 the substantial similarity of work and duties which will ultimately assure its members the
exercise of their collective bargaining rights.
II
It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs more or less two hundred five (205) rank-and-file employees and
workers. It has no existing duly certified collective bargaining agreement with any legitimate labor organization. There has not been any certification election
conducted in the proposed bargaining unit within the last twelve (12) months prior to the filing of the petition for direct certification and/or certification election
with the Ministry of Labor and Employment, and there is no contending union requesting for certification as the sole and exclusive bargaining representative in
the proposed bargaining unit.
The records show that on the filing of the petition for certification and/or certification election on June 3, 1986; 124 employees or workers which are more than a
majority of the rank-and-file employees or workers in the proposed bargaining unit had signed membership with respondent ALU-TUCP and had expressed their
written consent and authorization to the filing of the petition. Thus, the Labor Arbiter ordered the certification election on August 18, 1986 on a finding that 30%
of the statutory requirement under Art. 258 of the Labor Code has been met.

But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six (6) subsequently withdrew their membership; five (5) were
retrenched; twelve (12) were dismissed for illegally and unlawfully barricading the entrance to petitioner's farm; and one hundred (100) simply abandoned their
work.
Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119 employees dated July 28, 1986 showing that the employees were
on strike, which was confirmed by the finding of the Bureau of Labor Relations to the effect that they went on strike on July 24, 1986 (Rollo, p. 419). Earlier the
local union president, Warrencio Maputi; the Vice-president, Gilbert Redoblado and three other active members of the union Carmen Saguing, Roberto Romolo
and Iluminada Bonio were dismissed and a complaint for unfair labor practice, illegal dismissal etc. was filed by the Union in their behalf on July 2, 1986 before
the NLRC of Cagayan de Oro City (Rollo, p. 415). The complaint was amended on August 20, 1986 for respondent Union to represent Warrencio Maputi and
137 others against petitioner corporation and Bello Casanova President and General Manager for unfair labor practice, illegal dismissal, illegal lockout, etc.
(Rollo, p. 416).
<r e|| an 1w>

Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no choice but to call a certification election (Atlas
Free Workers Union AFWU PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It
becomes in the language of the New Labor Code "Mandatory for the Bureau to conduct a certification election for the purpose of determining the representative
of the employees in the appropriate bargaining unit and certify the winner as the exclusive bargaining representative of all employees in the unit." (Federacion
Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414
[1977]); more so when there is no existing collective bargaining agreement. (Samahang Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]);
and there has not been a certification election in the company for the past three years (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119
SCRA 299 [1982]) as in the instant case.
It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have expressed their written consent to the certification election
or more than a majority of the rank and file employees and workers; much more than the required 30% and over and above the present requirement of 20% by
Executive Order No. 111 issued on December 24, 1980 and applicable only to unorganized establishments under Art. 257, of the Labor Code, to which the
BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June 20, 1988).) More than that, any doubt cast on the authenticity of
signatures to the petition for holding a certification election cannot be a bar to its being granted (Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]). Even
doubts as to the required 30% being met warrant holding of the certification election (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA
299 [1982]). In fact, once the required percentage requirement has been reached, the employees' withdrawal from union membership taking place after the filing
of the petition for certification election will not affect said petition. On the contrary, the presumption arises that the withdrawal was not free but was procured
through duress, coercion or for a valuable consideration (La Suerte Cigar and Cigarette Factory v. Director of the Bureau of Labor Relations, 123 SCRA 679
[1983]). Hence, the subsequent disaffiliation of the six (6) employees from the union will not be counted against or deducted from the previous number who had
signed up for certification elections Vismico Industrial Workers Association (VIWA) v. Noriel 131 SCRA 569 [1984]). Similarly, until a decision, final in
character, has been issued declaring the strike illegal and the mass dismissal or retrenchment valid, the strikers cannot be denied participation in the
certification election notwithstanding, the vigorous condemnation of the strike and the fact that the picketing were attended by violence. Under the foregoing
circumstances, it does not necessarily follow that the strikers in question are no longer entitled to participate in the certification election on the theory that they
have automatically lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the duty of the employer to bargain collectively is nullified if the
purpose of the dismissal of the union members is to defeat the union in the consent requirement for certification election. (Samahang Manggagawa Ng Via Mare
v. Noriel, 98 SCRA 507 [1980]). As stressed by this Court, the holding of a certification election is a statutory policy that should not be circumvented. (George
and Peter Lines Inc. v. Associated Labor Unions (ALU), 134 SCRA 82 [1986]).
<r e|| an1w>

Finally, as a general rule, a certification election is the sole concern of the workers. The only exception is where the employer has to file a petition for
certification election pursuant to Art. 259 of the Labor Code because the latter was requested to bargain collectively. But thereafter the role of the employer in
the certification process ceases. The employer becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64
[1983]).
There is no showing that the instant case falls under the above mentioned exception. However, it will be noted that petitioner corporation from the outset has
actively participated and consistently taken the position of adversary in the petition for direct certification as the sole and exclusive bargaining representative
and/or certification election filed by respondent Associated Labor Unions (ALU)-TUCP to the extent of filing this petition for certiorari in this Court. Considering
that a petition for certification election is not a litigation but a mere investigation of a non-adversary character to determining the bargaining unit to represent the
employees (LVN Pictures, Inc. v. Philippine Musicians Guild, supra; Bulakena Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George
Peter Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149 SCRA 470 [1987]), and its only purpose is to
give the employees true representation in their collective bargaining with an employer (Confederation of Citizens Labor Unions CCLU v. Noriel, 116 SCRA 694
[1982]), there appears to be no reason for the employer's objection to the formation of subject union, much less for the filing of the petition for a certification
election.
PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the Bureau of Labor Relations dated Nov. 24, 1986 is AFFIRMED;
and the temporary restraining order issued by the Court on March 4, 1987 is LIFTED permanently.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. 75810 September 9, 1991

KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner,
vs.
HON. CRESENCIANO B. TRAJANO in his capacity as Director, Bureau of Labor Relations, and VIRON GARMENTS MFG., CO., INC., respondents.
Esteban M. Mendoza for petitioner.

R E S O LU T I O N

NARVASA, J.:p
The propriety of holding a certification election is the issue in the special civil action of certiorari at bar.
By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National Federation of Labor Unions (NAFLU) was declared the
exclusive bargaining representative of all rank-and-file employees of Viron Garments Manufacturing Co., Inc. (VIRON).
More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino KAMPIL Katipunan filed with the Bureau of Labor
Relations a petition for certification election among the employees of VIRON. The petition allegedly counted with the support of more than thirty percent (30%)
of the workers at VIRON.
NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14, 1985, that a certification election be held at VIRON as
prayed for, after ascertaining that KAMPIL had complied with all the requirements of law and that since the certification of NAFLU as sole bargaining
representative in 1981, nocollective bargaining agreement had been executed between it and VIRON.
NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985, it was in process of collective bargaining with
VIRON; that there was in fact a deadlock in the negotiations which had prompted it to file a notice of strike; and that these circumstances constituted a bar to the
petition for election in accordance with Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code, 1

reading as follows:

SEC. 3. When to file. In the absence of a collective bargaining agreement submitted in accordance with Article 231 of the Code, a
petition for certification election may be filed at any time. However, no certification election may be held within one year from the date of
issuance of declaration of a final certification election result. Neither may a representation question be entertained if, before the filing of a
petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted
to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.
If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification
election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement.
Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April 30, 1986 setting aside the Med-Arbiter's Order of June 14,
1985 and dismissing KAMPIL's petition for certification election. This disposition is justified in the Resolution as follows:
... While it may be true that the one-year period (mentioned in Section 3 above quoted) has long run its course since intervenor NAFLU
was certified on February 27, 1981, it could not be said, however, that NAFLU slept on its right to bargain collectively with the employer.
If a closer look was made on the history of labor management relations in the company, it could be readily seen that the delay in the
negotiations for and conclusion of a collective agreement the object of the one-year period could be attributed first, on the
exhaustion of all legal remedies in the representation question twice initiated in the company before the filing of the present petition and
second, to management who had been resisting the representations of NAFLU in collective bargaining.
The one-year period therefore, should not be applied literally to the present dispute, especially considering that intervenor had to
undergo a strike to bring management to the negotiation table. ...
KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the present certiorari action.
It is evident that the prohibition imposed by law on the holding of a certification election "within one year from the date of issuance of declaration of a final
certification election result' in this case, from February 27, 1981, the date of the Resolution declaring NAFLU the exclusive bargaining representative of rankand-file workers of VIRON can have no application to the case at bar. That one-year period-known as the "certification year" during which the certified union
is required to negotiate with the employer, and certification election is prohibited 2

has long since expired.

Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred because,before its filing, a bargaining deadlock between
VIRON and NAFLU as the incumbent bargaining agent, had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or
lockout, in accordance with Section 3, Rule V, Book V of the Omnibus Rules above quoted.
Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such "bargaining deadlock ... (which) had been submitted
to conciliation or arbitration or had become the subject of a valid notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its
attempts to bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance and unfulfilled promises to bargain

but there is no proof that it had taken any action to legally coerce VIRON to comply with its statutory
duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did not. It could have
gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel it to do so; but it
did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by
continuing challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is
no adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining process between it
and VIRON.
collectively; 3

The stark, incontrovertible fact is that from February 27, 1981 when NAFLU was proclaimed the exclusive bargaining representative of all VIRON employees
to April 11, 1985 when KAMPIL filed its petition for certification election or a period of more than four (4) years, no collective bargaining agreement was
ever executed, and no deadlock ever arose from negotiations between NAFLU and VIRON resulting in conciliation proceedings or the filing of a valid strike
notice.
The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain and for violation of terms and conditions of
employment, which was settled by the parties' agreement, and to another strike staged on December 6, 1986 in connection with a claim of violation of said

Obviously, however,
these activities took place after the initiation of the certification election case by KAMPIL, and it was grave
abuse of discretion to have regarded them as precluding the holding of the certification election thus prayed for.
agreement, a dispute which has since been certified for compulsory arbitration by the Secretary of Labor & Employment. 4

WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the law exists in the case at bar, and it was in the premises
grave abuse of discretion to have ruled otherwise, the contested Resolution of the respondent Director of the Bureau of Labor Relations dated April 30, 1986 in
BLR Case No. A-7-139-85 (BZEO-CE-04-004-85) is NULLIFIED AND SET ASIDE. Costs against private respondent.
SO ORDERED.
Cruz, Grio-Aquino and Medialdea, JJ., concur.

Footnotes
1 As amended by Sec. 3, Rules Implementing Batas Pambansa Bilang 130.
2 EE Sec. 1, Rule 3, Rules and Regulations Implementing PD 1391.
3 omment filed by public respondent himself dated Sept. 14, 1987 (Rollo, pp. 60, 63) in view of the refusal of the Solicitor General to do
so (Rollo, pp. 34-44).
4 Rollo, p. 63.

G.R. No. 118915 February 4, 1997

CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE WORKERS, (CMC-ACE-UFSW), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and Employment; CAPITOL MEDICAL CENTER EMPLOYEES
ASSOCIATION-ALLIANCE OF FILIPINO WORKERS AND CAPITOL MEDICAL CENTER INCORPORATED AND DRA. THELMA CLEMENTE,
President, respondents.

HERMOSISIMA, JR., J.:

This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November 18, 1994 of public respondent Bienvenido E. Laguesma,

which dismissed the petition for certification

election filed by petitioner for lack of merit and further directed private respondent hospital to negotiate
a collective bargaining agreement with respondent union, Capitol Medical Center Employees AssociationAlliance of Filipino Workers.
Undersecretary of the Department of Labor and Employment in Case No. OS.-A-136-94 1

The antecedent facts are undisputed.

On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent union's petition for certification election among the rank-

Respondent CMC appealed the Order to the Office of the Secretary by

questioning the legal status of respondent union's affiliation with the Alliance of Filipino Workers (AFW). To
correct any supposed infirmity in its legal status, respondent union registered itself independently and withdrew
the petition which had earlier been granted. Thereafter, it filed another petition for certification election.
and-file employees of the Capitol Medical Center. 2

On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification election. 3Respondent

CMC again appealed

to the Office of the Secretary which affirmed the Order of the Med-Arbiter granting the certification election.
4

On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in favor of no union and 8 spoiled ballots out of a total of 380
votes cast. Thereafter, on January 4, 1993, Med-Arbiter Cruz issued an Order certifying respondent union as the sole and exclusive bargaining representative of
the rank and file employees at CMC. 5
Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the Secretary of Labor which appeal was denied on February 26,

A subsequent motion for reconsideration filed by respondent CMC was likewise denied on March 23,
1993.
1993. 6

Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of respondent union's certificate of registration in Case No.
NCR-OD-M-92211-028. In the said case, Med-Arbiter Paterno Adap issued an Order dated February 4, 1993 which declared respondent union's certificate of

However, this order was reversed on appeal by the Officer-in-Charge of the Bureau of
Labor Relations in her Order issued on April 13, 1993. The said Order dismissed the motion for cancellation of
the certificate of registration of respondent union and declared that it was not only a bona fide affiliate or local of
a federation (AFW), but a duly registered union as well. Subsequently, this case reached this Court in Capitol
Medical Center, Inc. v. Hon. Perlita Velasco, G.R. No. 110718, where we issued a Resolution dated December
13, 1993, dismissing the petition of CMC for failure to sufficiently show that public respondent committed grave
abuse of discretion. The motion for reconsideration filed by CMC was likewise denied in our Resolution dated
February 2, 1994. Thereafter, on March 23, 1994, we issued an entry of judgment certifying that the
Resolution dated December 13, 1993 has become final and executory.
registration as null and void. 8

10

11

Respondent union, after being declared as the certified bargaining agent of the rank-and-file employees of respondent CMC by Med-Arbiter Cruz, presented
economic proposals for the negotiation of a collective bargaining agreement (CBA). However, respondent CMC contended that CBA negotiations should be
suspended in view of the Order issued on February 4, 1993 by Med-Arbiter Adap declaring the registration of respondent union as null and void. In spite of the
refusal of respondent CMC, respondent union still persisted in its demand for CBA negotiations, claiming that it has already been declared as the sole and
exclusive bargaining agent of the rank-and-file employees of the hospital.
Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on March 1, 1993. After complying with the other legal
requirements, respondent union staged a strike on April 15, 1993. On April 16, 1993, the Secretary of Labor assumed jurisdiction over the case and issued an
order certifying the same to the National Labor Relations Commission for compulsory arbitration where the said case is still pending. 12
It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election among the regular rank-and-file employees of the Capitol
Medical Center Inc. It alleged in its petition that: 1) three hundred thirty one (331) out of the four hundred (400) total rank-and-file employees of respondent CMC
signed a petition to conduct a certification election; and 2) that the said employees are withdrawing their authorization for the said union to represent them as
they have joined and formed the union Capitol Medical Center Alliance of Concerned Employees (CMC-ACE). They also alleged that a certification election can
now be conducted as more that 12 months have lapsed since the last certification election was held. Moreover, no certification election was conducted during
the twelve (12) months prior to the petition, and no collective bargaining agreement has as yet been concluded between respondent union and respondent CMC
despite the lapse of twelve months from the time the said union was voted as the collective bargaining representative.
On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended that it is the certified bargaining agent of the rank-and-file
employees of the Hospital, which was confirmed by the Secretary of Labor and Employment and by this Court. It also alleged that it was not remiss in asserting
its right as the certified bargaining agent for it continuously demanded the negotiation of a CBA with the hospital despite the latter's avoidance to bargain
collectively. Respondent union was even constrained to strike on April 15, 1993, where the Secretary of Labor intervened and certified the dispute for
compulsory arbitration. Furthermore, it alleged that majority of the signatories who supported the petition were managerial and confidential employees and not
members of the rank-and-file, and that there was no valid disaffiliation of its members, contrary to petitioner's allegations.
Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification election as more than twelve (12) months had lapsed since
respondent union was certified as the exclusive bargaining agent and no CBA was as yet concluded. It also claimed that the other issues raised could only be
resolved by conducting another certification election.

In its surrejoinder, respondent union alleged that the petition to conduct a certification election was improper, immoral and in manifest disregard of the decisions
rendered by the Secretary of Labor and by this Court. It claimed that CMC employed "legal obstructionism's" in order to let twelve months pass without a CBA
having been concluded between them so as to pave the way for the entry of petitioner union.
On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for certification election among the rank and file

It ruled that the issue was the majority status of respondent union. Since no certification election was
held within one year from the date of issuance of a final certification election result and there was no bargaining
deadlock between respondent union and the employees that had been submitted to conciliation or had become
the subject of a valid notice of strike or lock out, there is no bar to the holding of a certification election.
employees. 13

14

Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting the petition for certification election and in holding that this case
falls under Section 3, Rule V Book V of the Rules Implementing the Labor Code. 15

It also prayed that the said provision must not be

applied strictly in view of the facts in this case.

Petitioner union did not file any opposition to the appeal.

He ratiocinated that while the petition was indeed

filed after the lapse of one year form the time of declaration of a final certification result, and that no bargaining
deadlock had been submitted for conciliation or arbitration, respondent union was not remiss on its right to enter
into a CBA for it was the CMC which refused to bargain collectively.
On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16

17

CMC and petitioner union separately filed motions for reconsideration of the said Order.
CMC contended that in certification election proceedings, the employer cannot be ordered to bargain collectively with a union since the only issue involved is the
determination of the bargaining agent of the employees.
Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a certification election would result in the denial of their
substantial rights and interests. Moreover,it contended that public respondent's "indictment" that petitioner "capitalize (sic) on the ensuing delay which was
caused by the Hospital, . . ." was unsupported by the facts and the records.
On January 11, 1995, public respondent issued a Resolution which denied the two motions for reconsideration hence this petition. 18
The pivotal issue in this case is whether or not public respondent committed grave abuse of discretion in dismissing the petition for certification election, and in
directing the hospital to negotiate a collective bargaining agreement with the said respondent union.
Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it ruled against the holding of a certification election. It further
claims that the denial of due process can be gleaned from the manner by which the assailed resolution was written, i.e., instead of the correct name of the
mother federation UNIFIED, it was referred to as UNITED; and that the respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO. Petitioner
maintains that such errors indicate that the assailed resolution was prepared with "indecent haste."
We do not subscribe to petitioner's contention.
The errors pointed to by petitioner can be classified as mere typographical errors which cannot materially alter the substance and merit of the assailed
resolution.
Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a reversal of the questioned resolution. As correctly observed
by the Solicitor General, petitioner is merely "nit-picking vainly trying to make a monumental issue out of a negligible error of the public respondent." 19
Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing delay which was caused by the hospital and which resulted in

It further argues that the denial of its motion fro a fair hearing was
clear case of denial of its right to due process.
the non-conclusion of a CBA within the certification year.'' 20

Such contention of petitioner deserves scant consideration.

A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for respondent union's appeal.
It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.
Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules Implementing the Labor Code where a certification election should
be conducted, viz: (1) that one year had lapsed since the issuance of a final certification result; and (2) that there is no bargaining deadlock to which the
incumbent or certified bargaining agent is a party has been submitted to conciliation or arbitration, or had become the subject of a valid notice of strike or
lockout, are present in this case. It further claims that since there is no evidence on record that there exists a CBA deadlock, the law allowing the conduct of a
certification election after twelve months must be given effect in the interest of the right of the workers to freely choose their sole and exclusive bargaining agent.
While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final certification result, and that there is no collective bargaining
deadlock, public respondent did not commit grave abuse of discretion when it ruled in respondent union's favor since the delay in the forging of the CBA could
not be attributed to the fault of the latter.
A scrutiny of the records will further reveal that after respondent union was certified as the bargaining agent of CMC, it invited the employer hospital to the
bargaining table by submitting its economic proposal for a CBA. However, CMC refused to negotiate with respondent union and instead challenged the latter's
legal personality through a petition for cancellation of the certificate of registration which eventually reached this Court. The decision affirming the legal status of
respondent union should have left CMC with no other recourse but to bargain collectively; but still it did not. Respondent union was left with no other recourse
but to file a notice of strike against CMC for unfair labor practice with the National Conciliation and Mediation Board. This eventually led to a strike on April 15,
1993.
Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994, filed the subject petition for certification election on March
24, 1994, claiming that twelve months had lapsed since the last certification election.

Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner of a petition for certification election, which had been
submitted to conciliation or had become the subject of a valid notice of strike or lockout?

In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21

we had the occasion to define what a deadlock

is, viz:\
A "deadlock" is . . . the counteraction of things producing entire stoppage; . . . . There is a deadlock when there is a complete blocking or
stoppage resulting from the action of equal and opposed forces . . . . The word is synonymous with the word impasse, which . .
"presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the
parties."
Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this case nor "reasonable effort at good faith bargaining,"
such can be attributed to CMC's fault as the bargaining proposals of respondent union were never answered by CMC. In fact, what happened in this case is
worse than a bargaining deadlock for CMC employed all legal means to block the certification of respondent union as the bargaining agent of the rank-and-file;
and use it as its leverage for its failure to bargain with respondent union. Thus, we can only conclude that CMC was unwilling to negotiate and reach an
agreement with respondent union. CMC has not at any instance shown willingness to discuss the economic proposals given by respondent union. 22
As correctly ratiocinated by public respondent, to wit:
For herein petitioner to capitalize on the ensuing delay which was caused by the hospital and which resulted in the non-conclusion of a
CBA within the certification year, would be to negate and render a mockery of the proceedings undertaken before this Department and to
put an unjustified premium on the failure of the respondent hospital to perform its duty to bargain collectively as mandated in Article 252
of the Labor Code, as amended, which states".
"Article 252. Meaning of duty to bargain collectively the duty to bargain collectively means the performance of
a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievance 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."
The duly certified bargaining agent, CMCEA-AFW, should not be made to further bear the brunt flowing from the respondent hospital's
reluctance and thinly disguised refusal to bargain. 23
If the law proscribes the conduct of a certification election when there is a bargaining deadlock submitted to conciliation or arbitration, with more reason should it
not be conducted if, despite attempts to bring an employer to the negotiation table by the "no reasonable effort in good faith" on the employer certified
bargaining agent, there was to bargain collectively.
In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned by Chief Justice Andres R. Narvasa, the factual milieu of which
is similar to this case, this Court allowed the holding of a certification election and ruled that the one year period known as the "certification year" has long since
expired. We also ruled, that:
. . . prior to the filing of the petition for election in this case, there was no such "bargaining deadlock . . (which) had been submitted to
conciliation or arbitration or had become the subject of a valid notice of strike or lockout." To be sure, there are in the record assertions
by NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance, and
unfulfilled promises to bargain collectively; but there is no proof that it had taken tiny action to legally coerce VIRON to comply with its
statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did not. It could have gone on a
legitimate strike in protest against VIRON's refusal to bargain collectively and compel it to do so; but it did not. There are assertions by
NAFLU, too, that its attempts to bargain collectively had been delayed by continuing challenges to the resolution pronouncing it the sole
bargaining representative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of the
bargaining process between it and VIRON. 24
Although the statements pertinent to this case are merely obiter, still the fact remains that in the Kaisahan case, NAFLU was counselled by this Court on the
steps that it should have undertaken to protect its interest, but which it failed to do so.
This is what is strikingly different between the Kaisahan case and the case at bench for in the latter case, there was proof that the certified bargaining agent,
respondent union, had taken an action to legally coerce the employer to comply with its statutory duty to bargain collectively, i.e., charging the employer with

It is only just and equitable that the

circumstances in this case should be considered as similar in nature to a "bargaining deadlock" when no
certification election could be held. This is also to make sure that no floodgates will be opened for the
circumvention of the law by unscrupulous employers to prevent any certified bargaining agent from negotiating a
CBA. Thus, Section 3, Rule V, Book V of the Implement Rules should be interpreted liberally so as to include a
circumstance, e.g. where a CBA could not be concluded due to the failure of one party to willingly perform its
duty to bargain collectively.
unfair labor practice and conducting a strike in protest against the employer's refusal to bargain. 25

The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.
WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is AFFIRMED and the instant petition is hereby DISMISSED.
SO ORDERED
Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.

G.R. No. 75321 June 20, 1988

ASSOCIATED TRADE UNIONS (ATU), petitioner,
vs.
HON. CRESENCIO B. TRAJANO, in his capacity as Director of the Bureau of Labor Relations, MOLE, BALIWAG TRANSIT, INC. and TRADE UNIONS
OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS)-WFTU,respondents.
Puerto, Nunez & Associates for petitioner.
Tupaz and Associates for respondent Union.
Jose C. Espinas collaborating counsel for private respondent.
Agapito S. Mendoza for respondent Baliwag Transit, Inc.
The Solicitor General for public respondent.

CRUZ .J,:
The resolution of this case has been simplified because it has been, in Justice Vicente Abad Santos's felicitous phrase, "overtaken by events."
This case arose when on March 25, 1986, the private respondent union (TUPAS) filed with the Malolos labor office of the MOLE a petition for certification
election at the Baliwag Transit, Inc. among its rank-and-file workers. 1 Despite opposition from the herein petitioner, Associated Trade Unions (ATU), the petition
was granted by the med-arbiter on May 14, 1986, and a certification election was ordered "to determine the exclusive bargaining agent (of the workers) for
purposes of collective bargaining with respect to (their) terms and conditions of employment." 2 On appeal, this order was sustained by the respondent Director
of Labor Relations in his order dated June 20, 1986, which he affirmed in his order of July 17, 1986, denying the motion for reconsideration. 3 ATU then came to
this Court claiming that the said orders are tainted with grave abuse of discretion and so should be reversed. On August 20, 1986, we issued a temporary
restraining order that has maintained the status quoamong the parties. 4
In support of its petition, ATU claims that the private respondent's petition for certification election is defective because (1) at the time it was filed, it did not
contain the signatures of 30% of the workers, to signify their consent to the certification election; and (2) it was not allowed under the contract-bar rule because
a new collective bargaining agreement had been entered into by ATU with the company on April 1, 1986. 5
TUPAS for its part, supported by the Solicitor General, contends that the 30% consent requirement has been substantially complied with, the workers'
signatures having been subsequently submitted and admitted. As for the contract-bar rule, its position is that the collective bargaining agreement, besides being
vitiated by certain procedural defects, was concluded by ATU with the management only on April 1, 1986 after the filing of the petition for certification election on
March 25, 1986. 6
This initial sparring was followed by a spirited exchange of views among the parties which insofar as the first issue is concerned has become at best only
academic now. The reason is that the 30% consent required under then Section 258 of the Labor Code is no longer in force owing to the amendment of this
section by Executive Order No. 111, which became effective on March 4, 1987.
As revised by the said executive order, the pertinent articles of the Labor Code now read as follows:
Art. 256. Representation issue in organized establishments. In organized establishments, when a petition questioning the majority status of the incumbent
bargaining agent is filed before the Ministry within the sixty-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall
automatically order an election by secret ballot to ascertain the will of the employees in the appropriate bargaining unit. To have a valid election, at least a
majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit. When an election which provides for three or more choices results in no choice receiving a majority of the valid
votes cast, a runoff election shall be conducted between the choices receiving the two highest number of votes.
Art. 257. Petitions in unorganized establishments. In any establishment where there is no certified bargaining agent, the petition for certification election filed
by a legitimate labor organization shall be supported by the written consent of at least twenty (20%) percent of all the employees in the bargaining unit. Upon
receipt and verification of such petition, the Med-Arbiter shall automatically order the conduct of a certification election.
The applicable provision in the case at bar is Article 256 because Baliwag transit, Inc. is an organized establishment. Under this provision, the petition for
certification election need no longer carry the signatures of the 30% of the workers consenting to such petition as originally required under Article 258. The
present rule provides that as long as the petition contains the matters 7 required in Section 2, Rule 5, Book V of the Implementing Rules and Regulations, as
amended by Section 6, Implementing Rules of E.O. No. 111, the med-arbiter "shall automatically order" an election by secret ballot "to ascertain the will of the
employees in the appropriate bargaining unit." The consent requirement is now applied only to unorganized establishments under Article 257, and at that,
significantly, has been reduced to only 20%.
The petition must also fail on the second issue which is based on the contract-bar rule under Section 3, Rule 5, Book V of the Implementing Rules and
Regulations. This rule simply provides that a petition for certification election or a motion for intervention can only be entertained within sixty days prior to the
expiry date of an existing collective bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification election during the existence of
a collective bargaining agreement except within the freedom period, as it is called, when the said agreement is about to expire. The purpose, obviously, is to
ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective bargaining agreement earlier
entered into by them in good faith and for the stipulated original period.
ATU insists that its collective bargaining agreement concluded by it with Baliwag Transit, Inc, on April 1, 1986, should bar the certification election sought by
TUPAS as this would disturb the said new agreement. Moreover, the agreement had been ratified on April 3, 1986, by a majority of the workers and is plainly
beneficial to them because of the many generous concessions made by the management. 8
Besides pointing out that its petition for certification election was filed within the freedom period and five days before the new collective bargaining agreement
was concluded by ATU with Baliwag Transit, Inc. TUPAS contends that the said agreement suffers from certain fatal procedural flaws. Specifically, the CBA was
not posted for at least five days in two conspicuous places in the establishment before ratification, to enable the workers to clearly inform themselves of its
provisions. Moreover, the CBA submitted to the MOLE did not carry the sworn statement of the union secretary, attested by the union president, that the CBA
had been duly posted and ratified, as required by Section 1, Rule 9, Book V of the Implementing Rules and Regulations. These requirements being mandatory,
non-compliance therewith rendered the said CBA ineffective. 9

The Court will not rule on the merits and/or defects of the new CBA and shall only consider the fact that it was entered into at a time when the petition for
certification election had already been filed by TUPAS and was then pending resolution. The said CBA cannot be deemed permanent, precluding the
commencement of negotiations by another union with the management. In the meantime however, so as not to deprive the workers of the benefits of the said
agreement, it shall be recognized and given effect on a temporary basis, subject to the results of the certification election. The agreement may be continued in
force if ATU is certified as the exclusive bargaining representative of the workers or may be rejected and replaced in the event that TUPAS emerges as the
winner.
This ruling is consistent with our earlier decisions on interim arrangements of this kind where we declared:
... we are not unmindful that the supplemental collective bargaining contract, entered into in the meanwhile between management and respondent Union
contains provisions beneficial to labor. So as not to prejudice the workers involved, it must be made clear that until the conclusion of a new collective bargaining
contract entered into by it and whatever labor organization may be chosen after the certification election, the existing labor contract as thus supplemented
should be left undisturbed. Its terms call for strict compliance. This mode of assuring that the cause of labor suffers no injury from the struggle between
contending labor organization follows the doctrine announced in the recent case of Vassar Industries Employees v. Estrella (L-46562, March 31, 1978). To
quote from the opinion. "In the meanwhile, if as contended by private respondent labor union the interim collective bargaining agreement which it engineered
and entered into on September 26, 1977 has, much more favorable terms for the workers of private respondent Vassar Industries, then it should continue in full
force and effect until the appropriate bargaining representative is chosen and negotiations for a new collective bargaining agreement thereafter concluded." 10
It remains for the Court to reiterate that the certification election is the most democratic forum for the articulation by the workers of their choice of the union that
shall act on their behalf in the negotiation of a collective bargaining agreement with their employer. Exercising their suffrage through the medium of the secret
ballot, they can select the exclusive bargaining representative that, emboldened by their confidence and strengthened by their support shall fight for their rights
at the conference table. That is how union solidarity is achieved and union power is increased in the free society. Hence, rather than being inhibited and
delayed, the certification election should be given every encouragement under the law, that the will of the workers may be discovered and, through their freely
chosen representatives, pursued and realized.
WHEREFORE, the petition is DENIED. The temporary restraining order of August 20, 1986, is LIFTED. Cost against the petitioner.

[G.R. No. 85085. November 6, 1989.]

ASSOCIATED LABOR UNIONS (ALU), Petitioner, v. HON. PURA FERRER-CALLEJA, DIRECTOR, BUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR AND
EMPLOYMENT, NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), Respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; COLLECTIVE BARGAINING AGREEMENT; CERTIFICATION PROCEEDING; AN INVESTIGATOR OF A NON-ADVERSARIAL AND FACT FINDING
CHARACTER NOT COVERED BY TECHNICAL RULES OF EVIDENCE. A certification proceedings is not a litigation in the sense that the term is ordinarily understood, but an
investigation of a non-adversarial and fact-finding character. As such, it is not covered by the technical rules of evidence. Thus, as provided under Article 221 of the Labor Code,
proceedings before the National Labor Relations Commission (NLRC) are not covered by the technical rules of procedure and evidence. The Court had previously construed Article
221 as to allow the NLRC or the labor arbiter to decide the case on the basis of position papers and other documents submitted without resorting to technical rules of evidence as
observed in regular courts of justice.
2. ID.; ID.; COLLECTIVE BARGAINING AGREEMENT; UNORGANIZED ESTABLISHMENT ARTICLE 257 OF LABOR CODE; APPLIES. Article 257 is applicable only to unorganized
labor organizations and not to establishments like PASAR where there exists a certified bargaining agent, petitioner ALU, which as the record shows had previously entered into a
CBA with the management. Nowhere in the said provision does it require that the petition in organized establishments should be accompanied by the written consent of at least
twenty percent (20%) of the employees of the bargaining unit concerned much less a requirement that the petition be supported by the majority of the rank-and-file employees.
As above stated, Article 257 is applicable only to unorganized establishments.
3. ID.; ID.; ID.; CERTIFICATION ELECTION; ORGANIZED ESTABLISHMENT MUST BE FILED WITHIN FREEDOM PERIOD. Article 256 of the Labor Code is clear and leaves no
room for interpretation. The mere filing of a petition for certification election within the freedom period is sufficient basis for the respondent Director to order the holding of a
certification election.
4. ID.; ID.; ID.; CONTRACT BAR RULE; WHEN APPLICABLE. The contract bar rule is applicable only where the petition for certification election was filed either before or after
the freedom period.
5. ID.; ID.; ID.; CERTIFICATION ELECTION; FOAMTEX LABOR UNION-TUPAS VS. NORIEL CASE, NOT APPLICABLE TO CASE AT BAR; REASON. Even assuming for the sake of
argument that the petitioner herein has the majority of the rank-and-file employees and that some members of the NAFLU even renounced their membership thereat and
affirmed membership with the petitioner, We cannot, however, apply TUPAS in the case at bar. Unlike in the case of herein petitioner, in TUPAS, the petition for certification
election was filed nineteen (19) days after the CBA was signed which was well beyond the freedom period.
6. ID.; ID.; ID.; ID.; PREMATURE RENEWAL OF A COLLECTIVE BARGAINING AGREEMENT, NOT A BAR TO HOLDING THEREOF; HASTE FRUSTRATES CONSTITUTIONAL RIGHT OF
EMPLOYEES TO SELF-ORGANIZATION. The petition for certification election in this case was filed within the freedom period but the petitioner and PASAR hastily concluded a
CBA despite the order of the Med-Arbiter enjoining them from doing so until the issue of representation is finally resolved. As pointed out by public respondent in its comment,
the parties were in bad faith when they concluded the CBA. Their act was clearly intended to bar the petition for certification election filed by NAFLU. A collective bargaining
agreement which was prematurely renewed is not a bar to the holding of a certification election. Such indecent haste in renewing the CBA despite an order enjoining them from
doing so is designed to frustrate the constitutional right of the employees to self-organization. Moreover, We cannot countenance the actuation of the petitioner and the
management in this case which is not conducive to industrial peace.
7. ID.; ID.; ID.; ID.; ID.; REASON; HOLDING OF A CERTIFICATION ELECTION, A STATUTORY POLICY THAT SHOULD NOT BE CIRCUMVENTED. The renewed CBA cannot
constitute a bar to the instant petition for certification election for the very reason that the same was not yet in existence when the said petition was filed. The holding of a
certification election is a statutory policy that should not be circumvented.
8. ID.; ID.; ID.; ID.; FREEDOM OF WORKERS TO CHOOSE THEIR BARGAINING REPRESENTATIVE, OF PARAMOUNT IMPORTANCE; MOST EFFECTIVE WAY OF DETERMINING
REPRESENTATIVE LABOR ORGANIZATION. Our established jurisprudence adheres to the policy of enhancing the welfare of the workers. Their freedom to choose who should be
their bargaining representative is of paramount importance. The fact that there already exists a bargaining representative in the unit concerned is of no moment as long as the
petition for certification was filed within the freedom period. What is imperative is that by such a petition for certification election the employees are given the opportunity to
make known who shall have the right to represent them thereafter. Not only some but all of them should have the right to do so. Petitioners contention that it has the support of
the majority is immaterial. What is equally important is that everyone be given a democratic space in the bargaining unit concerned. Time and again, We have reiterated that the
most effective way of determining which labor organization can truly represent the working force is by certification election.
9. ID.; ID.; ID.; ID.; HOLDING THEREOF PROPER PURSUANT TO RIGHT OF WORKERS TO UNIONISM. Petitioners claim that the holding of a certification election will be
inimical to the national interest is far fetched. The workers are at peace with one another and their working condition is smooth. There has been no stoppage of work or an
occurrence of a strike. With these facts on hand, to order otherwise will be repugnant to the well-entrenched right of the workers to unionism.

DECISION

GANCAYCO, J.:

Is the contract bar rule applicable where collective bargaining agreement was hastily concluded in defiance of the order of the med-arbiter enjoining the parties from entering into
a CBA until the issue on representation is finally resolved? This is the primary issue on in this special civil action forcertiorari.
The Philippine Associated Smelting and Refining Corporation (PASAR) is a corporation established and existing pursuant to Philippine laws and is engaged in the manufacture and
processing of copper cathodes with a plant operating in Isabel, Leyte. It employs more or less eight hundred fifty (850) rank-and-file employees in its departments.
Petitioner Associated Labor Union (ALU) had a collective bargaining agreement (CBA) with PASAR which expired on April 1, 1987. Several days before the expiration of the said
CBA or on March 23, 1987, private respondent National Federation of Labor Unions (NAFLU) filed a petition for certification election with the Bureau of Labor Relations Regional
Office in Tacloban City docketed as MED-ARB-RO VII Case No. 3-28-87, alleging, among others, that no certification election had been held in PASAR within twelve (12) months
immediately preceding the filing of the said petition.
Petitioner moved to intervene and sought the dismissal of the petition on the ground that NAFLU failed to present the necessary signatures in support of its petition. In the order
dated April 21, 1987, 1 Med-Arbiter Bienvenido C. Elorcha dismissed the petition. However, the order of dismissal was set aside in another order dated May 8, 1987 and the case
was rescheduled for hearing on May 29, 1987. The said order likewise enjoined PASAR from entering into a collective bargaining agreement with any union until after the issue of
representation is finally resolved. In the order dated June 1, 1987, 2 the petition for certification was dismissed for failure of NAFLU to solicit 20% of the total number of rank and
file employees while ALU submitted 33 pages containing the signatures of 88.5% of the rank and file employees at PASAR.
cha nrob les law l ibra ry

Private respondent appealed the order of dismissal to the Bureau of Labor Relations. While the appeal was pending, petitioner ALU concluded negotiations with PASAR on the
proposed CBA. On July 24, 1987, copies of the newly concluded CBA were posted in four (4) conspicuous places in the company premises. The said CBA was ratified by the
members of the bargaining unit on July 28, 1987. 3 Thereafter, petitioner ALU moved for the dismissal of the appeal alleging that it had just concluded a CBA with PASAR and
that the said CBA had been ratified by 98% of the regular rank-and-file employees and that at least 75 of NAFLUs members renounced their membership thereat and affirmed
membership with PEA-ALU in separate affidavits.
In a resolution dated September 30, 1987, the public respondent gave due course to the appeal by ordering the conduct of a certification election among the rank-and-file
employees of PASAR with ALU, NAFLU and no union as choices, and denied petitioners motion to dismiss. 4
Both parties moved for reconsideration of the said resolution. However, both motions were denied by public respondent in the order dated April 22, 1988.
Hence, the present petition. 5
The petition is anchored on the argument that the holding of certification elections in organized establishments is mandated only where a petition is filed questioning the majority
status of the incumbent union and that it is only after due hearing where it is established that the union claiming the majority status in the bargaining unit has indeed a
considerable support that a certification election should be ordered, otherwise, the petition should be summarily dismissed. 6 Petitioner adds that public respondent missed the
legal intent of Article 257 of the Labor Code as amended by Executive Order No. 111. 7
In effect, petitioner is of the view that Article 257 of the Labor Code which requires the signature of at least 20% of the total number of rank-and-file employees should be
applied in the case at bar.
The petition is devoid of merit.
As it has been ruled in a long line of decisions, 8 a certification proceedings is not a litigation in the sense that the term is ordinarily understood, but an investigation of a nonadversarial and fact-finding character. As such, it is not covered by the technical rules of evidence. Thus, as provided under Article 221 of the Labor Code, proceedings before the
National Labor Relations Commission (NLRC) are not covered by the technical rules of procedure and evidence. The Court had previously construed Article 221 as to allow the
NLRC or the labor arbiter to decide the case on the basis of position papers and other documents submitted without resorting to technical rules of evidence as observed in regular
courts of justice. 9
On the other hand, Article 257 is applicable only to unorganized labor organizations and not to establishments like PASAR where there exists a certified bargaining agent,
petitioner ALU, which as the record shows had previously entered into a CBA with the management. This could be discerned from the clear intent of the law which provides that


"ART. 257. Petitions in unorganized establishments. In any establishment where there is no certified bargaining agent, the petition for certification election filed by a legitimate
labor organization shall be supported by the written consent of at least twenty per cent (20%) of all the employees in the bargaining unit. Upon receipt and verification of such
petition, the Med-Arbiter shall automatically order the conduct of a certification election."
cralaw virtua1aw l ibra ry

Said article traverses the claim of the petitioner that in this case there is a need for a considerable support of the rank-and-file employees in order that a certification election
may be ordered. Nowhere in the said provision does it require that the petition in organized establishments should be accompanied by the written consent of at least twenty
percent (20%) of the employees of the bargaining unit concerned much less a requirement that the petition be supported by the majority of the rank-and-file employees. As
above stated, Article 257 is applicable only to unorganized establishments.
The Court reiterates that in cases of organized establishments where there exists a certified bargaining agent, what is essential is whether the petition for certification election
was filed within the sixty-day freedom period. Article 256 of the Labor Code, as amended by Executive Order No. 111 provides:
chanrob les vi rtua l lawlib rary

"ART. 256. Representation issue in organized establishments. In organized establishments, when a petition questioning the majority status of the incumbent bargaining agent
is filed before the Department within the sixty-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by
secret ballot to ascertain the will of the employees in the appropriate bargaining unit. To have a valid election, at least a majority of all elegible voters in the unit must have cast
their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When an election which
provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted between the choices receiving the two
highest number of votes."
cralaw virtua1aw l ibra ry

Article 256 is clear and leaves no room for interpretation. The mere filing of a petition for certification election within the freedom period is sufficient basis for the respondent
Director to order the holding of a certification election.
chan roble s virtualawl ibra ry cha nrob les.co m:chan roble s.com.p h

Was the petition filed by NAFLU instituted within the freedom period? The record speaks for itself. The previous CBA entered into by petitioner ALU was due to expire on April 1,
1987. The petition for certification was filed by NAFLU on March 23, 1987, well within the freedom period.
The contract bar rule is applicable only where the petition for certification election was filed either before or after the freedom period. Petitioner, however, contends that since the
new CBA had already been ratified overwhelmingly by the members of the bargaining unit and that said CBA had already been consummated and the members of the bargaining
unit have been continuously enjoying the benefits under the said CBA, no certification election may be conducted, 10 citing, Foamtex Labor Union-TUPAS v. Noriel, 11 and Trade
Unions of the Phil. and Allied Services v. Inciong. 12
The reliance on the aforementioned cases is misplaced. In Foamtex, the petition for certiorariquestioning the validity of the order of the Director of Labor Relations which in turn
affirmed the order of the Med-Arbiter calling for a certification election was dismissed by the Court on the ground that although a new CBA was concluded between the petitioner
and the management, only a certified CBA would serve as a bar to the holding of a certification election, citing Article 232 of the Labor Code.
Foamtex weakens rather than strengthens petitioners stand. As pointed out by public respondent, the new CBA entered into between petitioner on one hand and by the
management on the other has not been certified as yet by the Bureau of Labor Relations.
There is an appreciable difference in Trade Unions of the Phil. and Allied Services (TUPAS for short). Here, as in Foamtex, the CBA was not yet certified and yet the Court affirmed
the order of the Director of the Bureau of Labor Relations which dismissed the petition for certification election filed by the labor union. In TUPAS, the dismissal of the petition for
certification, was based on the fact that the contending union had a clear majority of the workers concerned since out of 641 of the total working force, the said union had 499
who did not only ratify the CBA concluded between the said union and the management but also affirmed their membership in the said union so that apparently petitioners
therein did not have the support of 30% of all the employees of the bargaining unit.
chan roble s.com.p h : virtua l law lib rary

Nevertheless, even assuming for the sake of argument that the petitioner herein has the majority of the rank-and-file employees and that some members of the NAFLU even
renounced their membership thereat and affirmed membership with the petitioner, We cannot, however, apply TUPAS in the case at bar. Unlike in the case of herein petitioner, in
TUPAS, the petition for certification election was filed nineteen (19) days after the CBA was signed which was well beyond the freedom period.
On the other hand, as earlier mentioned, the petition for certification election in this case was filed within the freedom period but the petitioner and PASAR hastily concluded a
CBA despite the order of the Med-Arbiter enjoining them from doing so until the issue of representation is finally resolved. As pointed out by public respondent in its comment, 13
the parties were in bad faith when they concluded the CBA. Their act was clearly intended to bar the petition for certification election filed by NAFLU. A collective bargaining
agreement which was prematurely renewed is not a bar to the holding of a certification election. 14 Such indecent haste in renewing the CBA despite an order enjoining them
from doing so 15 is designed to frustrate the constitutional right of the employees to self-organization 16 Moreover, We cannot countenance the actuation of the petitioner and
the management in this case which is not conducive to industrial peace.
The renewed CBA cannot constitute a bar to the instant petition for certification election for the very reason that the same was not yet in existence when the said petition was
filed 17 The holding of a certification election is a statutory policy that should not be circumvented. 18
Petitioner posits the view that to grant the petition for certification election would open the floodgates to unbridled and scrupulous petitions the objective of which is to prejudice
the industrial peace and stability existing in the company.
This Court believes otherwise. Our established jurisprudence adheres to the policy of enhancing the welfare of the workers. Their freedom to choose who should be their
bargaining representative is of paramount importance. The fact that there already exists a bargaining representative in the unit concerned is of no moment as long as the petition
for certification was filed within the freedom period. What is imperative is that by such a petition for certification election the employees are given the opportunity to make known
who shall have the right to represent them thereafter. Not only some but all of them should have the right to do so. 19 Petitioners contention that it has the support of the
majority is immaterial. What is equally important is that everyone be given a democratic space in the bargaining unit concerned. Time and again, We have reiterated that the
most effective way of determining which labor organization can truly represent the working force is by certification election. 20
Finally, petitioner insists that to allow a certification election to be conducted will promote divisiveness and eventually cause polarization of the members of the bargaining unit at
the expense of national interest. 21
The claim is bereft of merit. Petitioner failed to establish that the calling of certification election will be prejudicial to the employees concerned and/or to the national interest. The
fear perceived by the petitioner is more imaginary than real. If it is true, as pointed out by the petitioner, that it has the support of more than the majority and that there was
even a bigger number of members of NAFLU who affirmed their membership to petitioner-union, then We see no reason why petitioner should be apprehensive over the issue. If
their claim is true, then most likely the conduct of a certification election will strengthen their hold as any doubt will be erased thereby. With the resolution of such doubts,
fragmentation of the bargaining unit will be avoided, and hence coherence among the workers will likely follow.
chan roble s lawlib rary : rednad

Petitioners claim that the holding of a certification election will be inimical to the national interest is far fetched. The workers are at peace with one another and their working
condition is smooth. There has been no stoppage of work or an occurrence of a strike. With these facts on hand, to order otherwise will be repugnant to the well-entrenched right
of the workers to unionism.
WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The temporary restraining order issued by the Court in the resolution dated October 10,
1988 22 is hereby lifted.
This decision is immediately executory. No costs.

[G.R. No. 146728. February 11, 2004]

GENERAL MILLING CORPORATION, petitioner, vs. HON. COURT OF

APPEALS, GENERAL MILLING CORPORATION INDEPENDENT
LABOR UNION (GMC-ILU), and RITO MANGUBAT, respondents.
DECISION
QUISUMBING, J.:

Before us is a petition for certiorari assailing the decision dated July 19, 2000,
of the Court of Appeals in CA-G.R. SP No. 50383, which earlier reversed the
decision dated January 30, 1998 of the National Labor Relations Commission
(NLRC) in NLRC Case No. V-0112-94.
[1]

[2]

The antecedent facts are as follows:

In its two plants located at Cebu City and Lapu-Lapu City, petitioner General
Milling Corporation (GMC) employed 190 workers. They were all members of
private respondent General Milling Corporation Independent Labor Union (union,
for brevity), a duly certified bargaining agent.
On April 28, 1989, GMC and the union concluded a collective bargaining
agreement (CBA) which included the issue of representation effective for a term of
three years. The CBA was effective for three years retroactive to December 1,
1988. Hence, it would expire on November 30, 1991.
On November 29, 1991, a day before the expiration of the CBA, the union sent
GMC a proposed CBA, with a request that a counter-proposal be submitted within
ten (10) days.
As early as October 1991, however, GMC had received collective and
individual letters from workers who stated that they had withdrawn from their union
membership, on grounds of religious affiliation and personal differences. Believing
that the union no longer had standing to negotiate a CBA, GMC did not send any
counter-proposal.
On December 16, 1991, GMC wrote a letter to the unions officers, Rito
Mangubat and Victor Lastimoso. The letter stated that it felt there was no basis to
negotiate with a union which no longer existed, but that management was
nonetheless always willing to dialogue with them on matters of common concern
and was open to suggestions on how the company may improve its operations.
In answer, the union officers wrote a letter dated December 19, 1991
disclaiming any massive disaffiliation or resignation from the union and submitted a
manifesto, signed by its members, stating that they had not withdrawn from the
union.
On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on
the ground of incompetence. The union protested and requested GMC to submit
the matter to the grievance procedure provided in the CBA. GMC, however,
advised the union to refer to our letter dated December 16, 1991.
[3]

Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC,
Arbitration Division, Cebu City. The complaint alleged unfair labor practice on the

part of GMC for: (1) refusal to bargain collectively; (2) interference with the right to
self-organization; and (3) discrimination. The labor arbiter dismissed the case with
the recommendation that a petition for certification election be held to determine if
the union still enjoyed the support of the workers.
The union appealed to the NLRC.
On January 30, 1998, the NLRC set aside the labor arbiters decision. Citing
Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, which fixed
the terms of a collective bargaining agreement, the NLRC ordered GMC to abide
by the CBA draft that the union proposed for a period of two (2) years beginning
December 1, 1991, the date when the original CBA ended, to November 30,
1993. The NLRC also ordered GMC to pay the attorneys fees.
[4]

[5]

In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No.
6715, the duration of a CBA, insofar as the representation aspect is concerned, is
five (5) years which, in the case of GMC-Independent Labor Union was from
December 1, 1988 to November 30, 1993. All other provisions of the CBA are to
be renegotiated not later than three (3) years after its execution. Thus, the NLRC
held that respondent union remained as the exclusive bargaining agent with the
right to renegotiate the economic provisions of the CBA. Consequently, it was
unfair labor practice for GMC not to enter into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from the union
submitted by 13 of its members from February to June 1993 confirmed the
pressure exerted by GMC on its employees to resign from the union. Thus, the
NLRC also found GMC guilty of unfair labor practice for interfering with the right of
its employees to self-organization.
With respect to the unions claim of discrimination, the NLRC found the claim
unsupported by substantial evidence.
On GMCs motion for reconsideration, the NLRC set aside its decision of
January 30, 1998, through a resolution dated October 6, 1998. It found GMCs
doubts as to the status of the union justified and the allegation of coercion exerted
by GMC on the unions members to resign unfounded. Hence, the union filed a
petition for certiorari before the Court of Appeals. For failure of the union to attach
the required copies of pleadings and other documents and material portions of the
record to support the allegations in its petition, the CA dismissed the petition on
February 9, 1999. The same petition was subsequently filed by the union, this time
with the necessary documents. In its resolution dated April 26, 1999, the appellate
court treated the refiled petition as a motion for reconsideration and gave the
petition due course.
On July 19, 2000, the appellate court rendered a decision the dispositive
portion of which reads:
WHEREFORE, the petition is hereby GRANTED. The NLRC Resolution of October 6,
1998 is hereby SET ASIDE, and its decision of January 30, 1998 is, except with respect to
the award of attorneys fees which is hereby deleted, REINSTATED.
[6]

A motion for reconsideration was seasonably filed by GMC, but in a resolution

dated October 26, 2000, the CA denied it for lack of merit.
Hence, the instant petition for certiorari alleging that:

I
THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE THAT
NO DECISION SHALL BE RENDERED BY ANY COURT WITHOUT EXPRESSING
THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH IT IS
BASED.
II
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION IN
THE ABSENCE OF ANY FINDING OF SUBSTANTIAL ERROR OR GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION.
III
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT APPRECIATING
THAT THE NLRC HAS NO JURISDICTION TO DETERMINE THE TERMS AND
CONDITIONS OF A COLLECTIVE BARGAINING AGREEMENT.[7]

Thus, in the instant case, the principal issue for our determination is whether or
not the Court of Appeals acted with grave abuse of discretion amounting to lack or
excess of jurisdiction in (1) finding GMC guilty of unfair labor practice for violating
the duty to bargain collectively and/or interfering with the right of its employees to
self-organization, and (2) imposing upon GMC the draft CBA proposed by the
union for two years to begin from the expiration of the original CBA.
On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act
No. 6715, states:
ART. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be
renegotiated not later than three (3) years after its execution....
The law mandates that the representation provision of a CBA should last for
five years. The relation between labor and management should be undisturbed
until the last 60 days of the fifth year. Hence, it is indisputable that when the union
requested for a renegotiation of the economic terms of the CBA on November 29,
1991, it was still the certified collective bargaining agent of the workers, because it
was seeking said renegotiation within five (5) years from the date of effectivity of
the CBA on December 1, 1988. The unions proposal was also submitted within the
prescribed 3-year period from the date of effectivity of the CBA, albeit just before
the last day of said period. It was obvious that GMC had no valid reason to refuse
to negotiate in good faith with the union. For refusing to send a counter-proposal
to the union and to bargain anew on the economic terms of the CBA, the company
committed an unfair labor practice under Article 248 of the Labor Code, which
provides that:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to
commit any of the following unfair labor practice:
...

(g) To violate the duty to bargain collectively as prescribed by this Code;

...
Article 252 of the Labor Code elucidates the meaning of the phrase duty to
bargain collectively, thus:
ART. 252. Meaning of duty to bargain collectively. The duty to bargain collectively
means the performance of a mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement....
We have held that the crucial question whether or not a party has met his
statutory duty to bargain in good faith typically turn$ on the facts of the individual
case. There is no per setest of good faith in bargaining. Good faith or bad faith is
an inference to be drawn from the facts. The effect of an employers or a unions
actions individually is not the test of good-faith bargaining, but the impact of all
such occasions or actions, considered as a whole.
[8]

[9]

[10]

[11]

Under Article 252 abovecited, both parties are required to perform their mutual
obligation to meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement. The union lived up to this obligation when it
presented proposals for a new CBA to GMC within three (3) years from the
effectivity of the original CBA. But GMC failed in its duty under Article 252. What it
did was to devise a flimsy excuse, by questioning the existence of the union and
the status of its membership to prevent any negotiation.
It bears stressing that the procedure in collective bargaining prescribed by the
Code is mandatory because of the basic interest of the state in ensuring lasting
industrial peace. Thus:
ART. 250. Procedure in collective bargaining. The following procedures shall be
observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the
other party with a statement of its proposals. The other party shall make a reply thereto not
later than ten (10) calendar days from receipt of such notice. (Underscoring supplied.)
GMCs failure to make a timely reply to the proposals presented by the union is
indicative of its utter lack of interest in bargaining with the union. Its excuse that it
felt the union no longer represented the workers, was mainly dilatory as it turned
out to be utterly baseless.
We hold that GMCs refusal to make a counter-proposal to the unions proposal
for CBA negotiation is an indication of its bad faith. Where the employer did not
even bother to submit an answer to the bargaining proposals of the union, there is
a clear evasion of the duty to bargain collectively.
[12]

Failing to comply with the mandatory obligation to submit a reply to the unions
proposals, GMC violated its duty to bargain collectively, making it liable for unfair
labor practice. Perforce, the Court of Appeals did not commit grave abuse of
discretion amounting to lack or excess of jurisdiction in finding that GMC is, under
the circumstances, guilty of unfair labor practice.

Did GMC interfere with the employees right to self-organization? The CA

found that the letters between February to June 1993 by 13 union members
signifying their resignation from the union clearly indicated that GMC exerted
pressure on its employees. The records show that GMC presented these letters to
prove that the union no longer enjoyed the support of the workers. The fact that the
resignations of the union members occurred during the pendency of the case
before the labor arbiter shows GMCs desperate attempts to cast doubt on the
legitimate status of the union. We agree with the CAs conclusion that the ill-timed
letters of resignation from the union members indicate that GMC had interfered
with the right of its employees to self-organization. Thus, we hold that the appellate
court did not commit grave abuse of discretion in finding GMC guilty of unfair labor
practice for interfering with the right of its employees to self-organization.
Finally, did the CA gravely abuse its discretion when it imposed on GMC the
draft CBA proposed by the union for two years commencing from the expiration of
the original CBA?
The Code provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining
agreement. ....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 [prior to its expiration date] and/or until a new agreement is reached by the parties.
(Underscoring supplied.)
The provision mandates the parties to keep the status quo while they are still in
the process of working out their respective proposal and counter proposal. The
general rule is that when a CBA already exists, its provision shall continue to
govern the relationship between the parties, until a new one is agreed upon. The
rule necessarily presupposes that all other things are equal. That is, that neither
party is guilty of bad faith. However, when one of the parties abuses this grace
period by purposely delaying the bargaining process, a departure from the general
rule is warranted.
In Kiok Loy vs. NLRC, we found that petitioner therein, Sweden Ice Cream
Plant, refused to submit any counter proposal to the CBA proposed by its
employees certified bargaining agent. We ruled that the former had thereby lost its
right to bargain the terms and conditions of the CBA. Thus, we did not hesitate to
impose on the erring company the CBA proposed by its employees union - lock,
stock and barrel. Our findings in Kiok Loy are similar to the facts in the present
case, to wit:
[13]

petitioner Companys approach and attitude stalling the negotiation by a series of

postponements, non-appearance at the hearing conducted, and undue delay in submitting its
financial statements, lead to no other conclusion except that it is unwilling to negotiate and
reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or
willingness to discuss freely and fully the claims and demands set forth by the Union much
less justify its objection thereto.
[14]

Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and

Employment, petitioner therein, Divine Word University of Tacloban, refused to
perform its duty to bargain collectively. Thus, we upheld the unilateral imposition
[15]

on the university of the CBA proposed by the Divine Word University Employees
Union. We said further:
That being the said case, the petitioner may not validly assert that its consent should be a
primordial consideration in the bargaining process. By its acts, no less than its action which
bespeak its insincerity, it has forfeited whatever rights it could have asserted as an
employer.
[16]

Applying the principle in the foregoing cases to the instant case, it would be
unfair to the union and its members if the terms and conditions contained in the old
CBA would continue to be imposed on GMCs employees for the remaining two (2)
years of the CBAs duration. We are not inclined to gratify GMC with an extended
term of the old CBA after it resorted to delaying tactics to prevent
negotiations. Since it was GMC which violated the duty to bargain collectively,
based on Kiok Loy and Divine Word University of Tacloban, it had lost its statutory
right to negotiate or renegotiate the terms and conditions of the draft CBA
proposed by the union.
We carefully note, however, that as strictly distinguished from the facts of this
case, there was no pre-existing CBA between the parties in Kiok Loy and Divine
Word University of Tacloban. Nonetheless, we deem it proper to apply in this case
the rationale of the doctrine in the said two cases. To rule otherwise would be to
allow GMC to have its cake and eat it too.
Under ordinary circumstances, it is not obligatory upon either side of a labor
controversy to precipitately accept or agree to the proposals of the other. But an
erring party should not be allowed to resort with impunity to schemes feigning
negotiations by going through empty gestures. Thus, by imposing on GMC the
provisions of the draft CBA proposed by the union, in our view, the interests of
equity and fair play were properly served and both parties regained equal footing,
which was lost when GMC thwarted the negotiations for new economic terms of
the CBA.
[17]

The findings of fact by the CA, affirming those of the NLRC as to the
reasonableness of the draft CBA proposed by the union should not be disturbed
since they are supported by substantial evidence. On this score, we see no cogent
reason to rule otherwise. Hence, we hold that the Court of Appeals did not commit
grave abuse of discretion amounting to lack or excess of jurisdiction when it
imposed on GMC, after it had committed unfair labor practice, the draft CBA
proposed by the union for the remaining two (2) years of the duration of the original
CBA. Fairness, equity, and social justice are best served in this case by sustaining
the appellate courts decision on this issue.
WHEREFORE, the petition is DISMISSED and the assailed decision dated July
19, 2000, and the resolution dated October 26, 2000, of the Court of Appeals in
CA-G.R. SP No. 50383, are AFFIRMED. Costs against petitioner.

G.R. No. 127422. April 17, 2001]

LMG

CHEMICALS
CORPORATION,
LMG
CHEMICALS
CORPORATION, petitioner, vs. THE
SECRETARY
OF
THE DEPARTMENT OF LABORAND EMPLOYMENT, THE HON.
LEONARDO A. QUISUMBING, and CHEMICAL WORKERS
UNION, respondents.
DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for certiorari with prayer for a temporary restraining order and a
writ of preliminary injunction under Rule 65 of the 1997 Rules of Civil Procedure, as
amended, seeking to nullify the orders dated October 7, 1996 and December 17, 1996,
issued by the then Secretary of Labor and Employment, Hon. Leonardo A.
Quisumbing,[1] in OS-AJ-05-10(1)-96, IN RE: LABOR DISPUTE AT LMG
CHEMICALS CORPORATION
The facts as culled from the records are:
LMG Chemicals Corporation, (petitioner) is a domestic corporation engaged in the
manufacture and sale of various kinds of chemical substances, including aluminum sulfate
which is essential in purifying water, and technical grade sulfuric acid used in thermal
power plants. Petitioner has three divisions, namely: the Organic Division, Inorganic
Division and the Pinamucan Bulk Carriers. There are two unions within petitioners
Inorganic Division. One union represents the daily paid employees and the other union
represents the monthly paid employees. Chemical Workers Union, respondent, is a duly
registered labor organization acting as the collective bargaining agent of all the daily paid
employees of petitioners Inorganic Division.
Sometime in December 1995, the petitioner and the respondent started negotiation for a
new Collective Bargaining Agreement (CBA) as their old CBA was about to expire. They
were able to agree on the political provisions of the new CBA, but no agreement was
reached on the issue of wage increase. The economic issues were not also settled.
The positions of the parties with respect to wage issue were:
Petitioner Company
P40 per day on the first year
P40 per day on the second year
P40 per day on the third year
Respondent Union
P350 per day on the first 18 months, and
P150 per day for the next 18 months

In the course of the negotiations, respondent union pruned down the originally
proposed wage increase quoted above to P215 per day, broken down as follows:
P142 for the first 18 months
P73 for the second 18 months
With the CBA negotiations at a deadlock, on March 6, 1996, respondent union filed a
Notice of Strike with the National Conciliation and Mediation Board, National Capital
Region. Despite several conferences and efforts of the designated conciliator-mediator, the
parties failed to reach an amicable settlement.
On April 16, 1996, respondent union staged a strike. In an attempt to end the strike
early, petitioner, on April 24, 1996, made an improved offer of P135 per day, spread over
the period of three years, as follows:
P55 per day on the first year;
P45 per day on the second year;
P35 per day on the third year.
On May 9, 1996, another conciliation meeting was held between the parties. In that
meeting, petitioner reiterated its improved offer of P135 per day which was again rejected
by the respondent union.
On May 20, 1996, the Secretary of Labor and Employment, finding the instant labor
dispute impressed with national interest, assumed jurisdiction over the same.
In compliance with the directive of the Labor Secretary, the parties submitted their
respective position papers both dated June 21, 1996.
In its position paper, petitioner made a turn-around, stating that it could no longer
afford to grant its previous offer due to serious financial losses during the early months of
1996. It then made the following offer:
Zero increase in the first year;
P30 per day increase in the second year; and
P20 per day increase in the third year.
In its reply to petitioners position paper, respondent union claimed it had a positive
performance in terms of income during the covered period.
On October 7, 1996, the Secretary of Labor and Employment issued the first assailed
order, pertinent portions of which read:
xxx. In the light of the Companys last offer and the Unions last position, We decree
that the Companys offer of P135 per day wage increase be further increased to P140
per (day), which shall be incorporated in the new CBA, as follows:
P90 per day for the first 18 months, and

P50 per day for the next 18 months.

After all, the Company had granted its supervisory employees an increase of P4,500
per month or P166 per day, more or less, if the period reckoned is 27 working days.
In regard to the division of the three-year period into two sub-periods of 18 months
each, this office take cognizance of the same practice under the old CBA.
2. Other economic demands
Considering the financial condition of the Company, all other economic demands
except those provided in No. 3 below are rejected. The provisions in the old CBA as
well as those contained in the Companys Employees Primer of Benefits as of Aug. 1,
1994 shall be retained and incorporated in the new CBA.
3. Effectivity of the new CBA
Article 253-A of the Labor Code, as amended, provides that when no new CBA is
signed during a period of six months from the expiry date of the old CBA, the
retroactivity period shall be according to the parties agreement. Inasmuch as the
parties could not agree on this issue and since this Office has assumed jurisdiction,
then this matter now lies at the discretion of the Secretary of Labor and Employment.
Thus the new Collective Bargaining Agreement which the parties will sign pursuant
to this Order shall retroact to January 1, 1996.
x x x
ACCORDINGLY, this Office now directs the parties to incorporate these dispositions
in their new Collective bargaining Agreement effective January 1, 1996 to December
31, 1998.
Forthwith, petitioner filed a motion for reconsideration but was denied by
the Secretary in his order dated December 16, 1996.
Petitioner now contends that in issuing the said orders, respondent Secretary gravely
abused his discretion, thus:
I

THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISREGARDING
THE EVIDENCE OF PETITIONERS FINANCIAL LOSSES AND IN GRANTING
A P140.00 WAGE INCREASE TO THE RESPONDENT UNION.
II

THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DECREEING
THAT THE NEW COLLECTIVE BARGAINING AGREEMENT TO BE SIGNED
BY THE PARTIES SHALL RETROACT TO JANUARY 1, 1996.
Anent the first ground, petitioner asserts that the decreed amount of P140 wage
increase has no basis in fact and in law. Petitioner insists that public respondent Secretary

whimsically presumed that the company can survive despite the losses being suffered by
its Inorganic Division and its additional losses caused by the strike held by respondent
union. Petitioner further contends that respondent Secretary disregarded its evidence
showing that for the first part of 1996, its Inorganic Division suffered serious losses
amounting to P15.651 million. Hence, by awarding wage increase without any basis,
respondent Secretary gravely abused his discretion and violated petitioners right to due
process.
We are not persuaded.
As aptly stated by the Solicitor General in his comment on the petition dated July 1,
1997, respondent Secretary considered all the evidence and arguments adduced by both
parties. In ordering the wage increase, the Secretary ratiocinated as follows:
xxx
In the Companys Supplemental Comment, it says that it has three divisions, namely:
the Organic Division, Inorganic Division and the Pinamucan Bulk Carriers. The
Union in this instant dispute represent the daily wage earners in the Inorganic
Division. The respective income of the three divisions is shown in Annex B to the
Companys Supplemental Comment. The Organic Division posted an income of
P369,754,000 in 1995. The Inorganic Division realized an income of P261,288,000 in
the same period. The tail ender is the Pinamucan Bulk Carriers Division with annual
income of P11,803,000 for the same period. Total Company income for the period was
P642,845,000.
It is a sound business practice that a Companys income from all sources are collated
to determine its true financial condition. Regardless of whether one division or
another losses or gains in its yearly operation is not material in reckoning a
Companys financial status. In fact, the loss in one is usually offset by the gains in the
others. It is not a good business practice to isolate the employees or workers of one
division, which incurred an operating loss for a particular period. That will create
demoralization among its ranks, which will ultimately affect productivity. The
eventual loser will be the company.
So, even if We believe the position of the company that its Inorganic Division lost last
year and during the early months of this year, it would not be a good argument to
deny them of any salary increase. When the Company made the offer of P135 per day
for the three year period, it was presumed to have studied its financial condition
properly, taking into consideration its past performance and projected income. In
fact, the Company realized a net income of P10,806,678 for 1995 in all its operations,
which could be one factor why it offered the wage increase package of P135 per day
for the Union members.
Besides, as a major player in the countrys corporate field, reneging from a wage
increase package it previously offered and later on withdrawing the same simply
because this Office had already assumed jurisdiction over its labor dispute with the
Union cannot be countenanced. It will be worse if the employer is allowed to
withdraw its offer on the ground that the union staged a strike and consequently
subsequently suffered business setbacks in its income projections. To sustain the
Companys position is like hanging the proverbial sword of Damocles over the

Unions right to concerted activities, ready to fall when the latter clamors for better
terms and conditions of employment.
But we cannot also sustain the Unions demand for an increase of P215 per day. If we
add the overload factors such as the increase in SSS premiums, medicare and
medicaid, and other multiplier costs, the Company will be saddled with additional
labor cost, and its projected income for the CBS period may not be able to absorb the
added cost without impairing its viability. xxx
Verily, petitioners assertion that respondent Secretary failed to consider the evidence
on record lacks merit. It was only the Inorganic Division of the petitioner corporation that
was sustaining losses. Such incident does not justify the withholding of any salary increase
as petitioners income from all sources are collated for the determination of its true
financial condition. As correctly stated by the Secretary, the loss in one is usually offset
by the gains in the others.
Moreover, petitioner company granted its supervisory employees, during the pendency
of the negotiations between the parties, a wage increase of P4,500 per month or P166 per
day, more or less. Petitioner justified this by saying that the said increase was pursuant to
its earlier agreement with the supervisors. Hence, the company had no choice but to abide
by such agreement even if it was already sustaining losses as a result of the strike of the
rank-and-file employees.
Petitioners actuation is actually a discrimination against respondent union
members. If it could grant a wage increase to its supervisors, there is no valid reason why
it should deny the same to respondent union members. Significantly, while petitioner
asserts that it sustained losses in the first part of 1996, yet during the May 9, 1996
conciliation meeting, it made the offer of P135 daily wage to the said union members.
This Court, therefore, holds that respondent Secretary did not gravely abuse his
discretion in ordering the wage increase. Grave abuse of discretion implies whimsical and
capricious exercise of power which, in the instant case, is not obtaining.
On the second ground, petitioner contends that public respondent committed grave
abuse of discretion when he ordered that the new CBA which the parties will sign shall
retroact to January 1, 1996, citing the cases of Union of Filipro Employees vs. NLRC,[2] and
Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan Confesor.[3]
Invoking the provisions of Article 253-A of the Labor Code, petitioner insists that
public respondents discretion on the issue of the date of the effectivity of the new CBA is
limited to either: (1) leaving the matter of the date of effectivity of the new CBA to the
agreement of the parties or (2) ordering that the terms of the new CBA be prospectively
applied.
It must be emphasized that respondent Secretary assumed jurisdiction over the dispute
because it is impressed with national interest. As noted by the Secretary, the petitioner
corporation was then supplying the sulfate requirements of MWSS as well as the sulfuric
acid of NAPOCOR, and consequently, the continuation of the strike would seriously affect
the water supply of Metro Manila and the power supply of the Luzon Grid. Such
authority of the Secretary to assume jurisdiction carries with it the power to determine the
retroactivity of the parties CBA.
It is well settled in our jurisprudence that the authority of the Secretary of Labor to
assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an

industry indispensable to national interest includes and extends to all questions and
controversies arising therefrom. The power is plenary and discretionary in nature to enable
him to effectively and efficiently dispose of the primary dispute.[4]
In St. Lukes Medical Center, Inc. vs. Torres[5], a deadlock developed during the CBA
negotiations between the management and the union. The Secretary of Labor assumed
jurisdiction and ordered that their CBA shall retroact to the date of the expiration of the
previous CBA. The management claimed that the Secretary of Labor gravely abused his
discretion. This Court held:
xxx
Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of
the expiration of the previous CBA, contrary to the position of the petitioner. Under
the circumstances of the case, Art. 253-A cannot be properly applied to herein
case. As correctly stated by public respondent in his assailed Order of April 12, 1991
Anent the alleged lack of basis for retroactivity provisions awarded, We
would stress that the provision of law invoked by the Hospital, Article 253-A
of the Labor Code, speaks of agreement by and between the parties, and not
arbitral awards.
Therefore in the absence of the specific provision of law prohibiting retroactivity of
the effectivity of the arbitral awards issued by the Secretary of Labor pursuant to
Article 263(g) of the Labor Code, such as herein involved, public respondent is
deemed vested with plenary powers to determine the effectivity thereof.
Finally, to deprive respondent Secretary of such power and discretion would run
counter to the well-established rule that all doubts in the interpretation of labor laws should
be resolved in favor of labor. In upholding the assailed orders of respondent
Secretary, this Court is only giving meaning to this rule. Indeed, the Court should help
labor authorities in providing workers immediate benefits, without being hampered by
arbitration or litigation processes that prove to be not only nerve-wracking but financially
burdensome in the long run.
As we said in Maternity Childrens Hospital vs. Secretary of Labor[6]:
Social Justice Legislation, to be truly meaningful and rewarding to our workers,
must not be hampered in its application by long winded-arbitration and
litigation. Rights must be asserted and benefits received with the least
inconvenience. Labor laws are meant to promote, not to defeat, social justice.
WHEREFORE, the instant petition is DENIED. The assailed orders of the Secretary
of Labor dated October 7, 1996 and December 16, 1996 are AFFIRMED. Costs against
petitioner.
SO ORDERED.
Melo (Chairman), Vitug, and Gonzaga-Reyes, JJ., concur.
Panganiban J., no part. Former partner in law firm representing a party.

[G.R. No. 121227. August 17, 1998]

VICENTE SAN JOSE, petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION and OCEAN TERMINAL SERVICES, INC., respondents.
DECISION
PURISIMA, J.:

Before the Court is a Petition for Certiorari seeking to annul a Decision of the National
Labor Relations Commission dated April 20, 1995 in NLRC-NCR-CA-No. 00671-94
which reversed, on jurisdictional ground, a Decision of the Labor Arbiter dated January 19,
1994 in NLRC-NCR Case No. 00-03-02101-93 a case for a money claim - underpayment
of retirement benefit. Records do not show that petitioner presented a Motion for
Reconsideration of subject Decision of the National Labor Relations Commission, which
motion is, generally required before the filing of Petition for Certiorari.
While the rule prescribing the requisite motion for reconsideration is not absolute and
recognizes some exceptions, there is no showing that the case at bar constitutes an
exception. Nevertheless, we gave due course to the petition to enable the Court to reiterate
and clarify the jurisdictional boundaries between Labor Arbiters and Voluntary Arbitrator
or Panel of Voluntary Arbitrators over money claims, and to render substantial and speedy
justice to subject aged stevedore retiree who first presented his claim for retirement
benefit in April 1991, or seven years ago.
Labor law practitioners and all lawyers, for that matter, should be fully conversant
with the requirements for the institution of certiorari proceedings under Rule 65 of the
Revised Rules of Court. For instance, it is necessary that a Motion for Reconsideration of
the Decision of the National Labor Relations Commission must first be resorted to. The
ruling in Corazon Jamer v. National Labor Relations Commission, G.R. No. 112630,
September 5, 1997, comes to the fore and should be well understood and observed. An
ordinary allegation ... and there is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law (Rule 65, Sec. 1, Revised Rules of Court) is not a
foolproof substitute for a Motion for Reconsideration, absence of which can be fatal to a
Petition for Certiorari. Petitioner cannot and should not rely on the liberality of the Court
simply because he is a working man.
In the Jamer case, this court said:
... This premature action of petitioners constitutes a fatal infirmity as ruled in a long line
of decisions, most recently is the case of Building Care Corporation v. National Labor
Relations Commission
The filing of such motion is intended to afford public respondent an opportunity to correct
any actual or fancied error attributed to it by way of a re-examination of the legal and
factual aspects of the case. Petitioners inaction or negligence under the circumstances is
tantamount to a deprivation of the right and opportunity of the respondent commission to
cleanse itself of an error unwittingly committed or to vindicate itself of an act unfairly
imputed...
Likewise, a motion for reconsideration is an adequate remedy;
hence certiorari proceedings, as in this case, will not prosper.

As stated in the Decision of the Labor Arbiter in NLRC-NCR-Case No. 00-03-020193, dated January 19, 1994, the facts of this case are undisputed. The Labor Arbiter
reported, thus:
Complainant, in his position paper (Record, pages 11 to 14) states that he was hired
sometime in July 1980 as a stevedore continuously until he was advised in April 1991 to
retire from service considering that he already reached 65 years old (sic); that accordingly,
he did apply for retirement and was paid P3,156.39 for retirement pay... (Rollo, pp. 15,
26-27, 58-59).
Decision of the Labor Arbiter in NLRC-NCR-Case No. 00-03-02101-93, January 9,
1994 (Rollo, pp. 15017, at pp. 16-17).
The Labor Arbiter decided the case solely on the merits of the complaint. Nowhere in
the Decision is made mention of or reference to the issue of jurisdiction of the Labor
Arbiter (Rollo, pp. 15-17). But the issue of jurisdiction is the bedrock of the Petition
because, as earlier intimated, the Decision of the National Labor Relations Commission,
hereinbelow quoted, reversed the Labor Arbiters Decision on the issue of
jurisdiction. Reads subject Decision of the Labor Arbiter:
Respondents, in their Reply to complainants position paper, allege (Record, pages 18 to
21) that complainants latest basic salary was P120.34 per day; that he only worked on
rotation basis and not seven days a week due to numerous stevedores who can not all be
given assignments at the same time; that all stevedores only for paid every time they were
assigned or actually performed stevedoring; that the computation used in arriving at the
amount of P3,156.30 was the same computation applied to the other stevedores; that the
use of divisor 303 is not applicable because complainant performed stevedoring job only on
call, so while he was connected with the company for the past 11 years, he did not actually
render 11 years of service; that the burden of proving that complainants latest salary
was P200.00 rests upon him; that he already voluntarily signed a waiver of quitclaim; that
if indeed respondent took advantage of his illiteracy into signing his quitclaim, he would
have immediately filed this complaint but nay, for it took him two (2) years to do so.
The issue therefore is whether or not complainant is entitled to the claimed differential of
separation pay.
We find for the complainant. He is entitled to differential.
We cannot sustain a computation of length of service based on the ECC contribution
records. Likewise, the allegation that complainant rendered service for only five days a
month for the past 11 years is statistically improbable, aside from the fact that the best
evidence thereof are complainants daily time records which respondent are (sic) duty
bound to keep and make available anytime in case of this.
The late filing has no bearing. The prescription period is three years. It is suffice (sic) that
the filing falls within the period.
Whether or not complainant worked on rotation basis is a burden which lies upon the
employer. The presumption is that the normal working period is eight (8) hours a day and
six (6) days a week, or 26 days a month, unless proven otherwise.

Also, the burden of proving the amount of salaries paid to employees rests upon the
employer not on the employee. It can be easily proven by payrolls, vouchers, etc. which
the employers are likewise duty bound to keep and present. There being non, we have to
sustain complainants assertion that his latest salary rate was P200 a day or P5,200 a
month. Therefore, his retrenchment pay differential is P25,443.70 broken down as follows:
P200 x 26 days = P5,200 x 11 years
2
= (P2,600 x 11 years) - P3,156.30
= P28,600 - P3,156.30
= P25,443.70
The Decision of the National Labor Relations Commission in NLRC-NCR-CA No. 0670194, April 20, 1995 (Rollo, pp. 18-21).
The National Labor Relations Commission reversed on jurisdictional ground the
aforesaid Decision of the Labor Arbiter; ruling, as follows:
... His claim for separation pay differential is based on the Collective Bargaining
Agreement (CBA) between his union and the respondent company, the pertinent portion of
which reads:
xxx ANY UNION member shall be compulsory retired (sic) by the company upon reaching
the age of sixty (60) years, unless otherwise extended by the company for justifiable
reason. He shall be paid his retirement pay equivalent to one-half (1/2) month salary for
every year of service, a fraction of at least six months being considered as one (1) whole
year.
xxx The company agrees that in case of casual employees and/or workers who work on
rotation basis the criterion for determining their retirement pay shall be 303 rotation calls or
work days as equivalent to one(1) year and shall be paid their retirement pay equivalent to
one half (1/2) month for every year of service.
xxx
Since the instant case arises from interpretation or implementation of a collective
bargaining agreement, the Labor Arbiter should have dismissed it for lack of jurisdiction in
accordance with Article 217 (c) of the Labor Code, which reads: (Underscoring supplied)
Art. 217. Jurisdiction of Labor Arbiter and the Commission.
xxx
(c) Cases arising from the interpretation or implementation of collective bargaining
agreement and those arising from the interpretation or enforcement of company
procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitrator as may be provided in said agreements.

Petitioner contends that:

I. THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION
IN GIVING DUE COURSE TO THE APPEAL DESPITE THE FACT 4 (SIC) THAT
IT WAS FILED OUT OF TIME AND THERE IS NO SHOWING THAT A SURETY
BOND WAS POSTED.
II. THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION
N SETTING ASIDE THE DECISION OF XXX DATED 19 JANUARY 1994 AND
DISMISSING THE CASE ON THE GROUND OF LACK OF JURISDICTION
WHEN THE ISSUE DOES NOT INVOLVE ANY PROVISION OF THE
COLLECTIVE BARGAINING AGREEMENT. (Rollo, pp. 7-8)
The Manifestation and Motion (In Lieu of Comment) sent in on December 6, 1995 by
the Office of the Solicitor General support the second issue, re: jurisdiction raised by the
Petitioner (Rollo, pp. 26-33, at pp. 38-32).
Labor Arbiter Decision
Labor Arbiters should exert all efforts to cite statutory provisions and/or judicial
decision to buttress their dispositions. An Arbiter cannot rely on simplistic statements,
generalizations, and assumptions. These are not substitutes for reasoned judgment. Had the
Labor Arbiter exerted more research efforts, support for the Decision could have been
found in pertinent provisions of the Labor Code, its Implementing Rules, and germane
decisions of the Supreme Court. As this Court said in Juan Saballa, et al. v. NLRC, G.R.
No. 102472-84, August 22, 1996:
xxx This Court has previously held that judges and arbiters should draw up their decisions
and resolutions with due care, and make certain that they truly and accurately reflect their
conclusions and their final dispositions. A decision should faithfully comply with Section
14, Article VIII of the Constitution which provides that no decision shall be rendered by
any court without expressing therein clearly and distinctly the facts of the case and the law
on which it is based. If such decision had to be completely overturned or set aside, upon
the modified decision, such resolution or decision should likewise state the factual and
legal foundation relied upon. The reason for this is obvious: aside from being required by
the Constitution, the court should be able to justify such a sudden change of course; it must
be able to convincingly explain the taking back of its solemn conclusions and
pronouncements in the earlier decision. The same thing goes for the findings of fact made
by the NLRC, as it is a settled rule that such findings are entitled to great respect and even
finality when supported by substantial evidence; otherwise, they shall be struck down for
being whimsical and capricious and arrived at with grave abuse of discretion. It is a
requirement of due process and fair play that the parties to a litigation be informed of how
it was decided, with an explanation of the factual and legal reasons that led to the
conclusions of the court. A decision that does not clearly and distinctly state the facts and
the law on which it is based leaves the parties in the dark as to how it was reached and is
especially prejudicial to the losing party, who is unable to pinpoint the possible errors of
the court for review by a higher tribunal. xxx
This is not an admonition but rather, advice and a critique to stress that both have
obligations to the Courts and students of the law. Decisions of the Labor Arbiters, the
National Labor Relations Commission, and the Supreme Court serve not only to adjudicate
disputes, but also as an educational tool to practitioners, executives, labor leaders and law

students. They all have a keen interest in methods of analysis and the reasoning processes
employed in labor dispute adjudication and resolution. In fact, decisions rise or fall on the
basis of the analysis and reasoning processes of decision makers or adjudicators.
On the issues raised by the Petitioner, we rule:
I. Timeliness of Appeal And Filing of Appeal Bond

The Court rules that the appeal of the respondent corporation was interposed within the
reglementary period, in accordance with the Rules of the National Labor Relations
Commission, and an appeal bond was duly posted. We adopt the following Comment
dated August 14, 1996, submitted by the National Labor Relations Commission, to wit:
xxx While it is true that private respondent company received a copy of the decision dated
January 19, 1994 of the Labor Arbiter xxx and filed its appeal on February 14, 1994, it is
undisputed that the tenth day within which to file an appeal fell on a Saturday, the last day
to perfect an appeal shall be the next working day.
Thus, the amendments to the New Rules of Procedure of the NLRC, Resolution No. 11-0191 which took effect on January 14, 1992, provides in part:
xxx
1. Rule VI, Sections 1 and 6 are hereby amended to read as follows:
Section 1. Period of Appeal Decisions, awards or orders of the Labor Arbiter ... shall
be final and executory unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards or orders of the Labor Arbiter
xxx ... If the 10 day ... falls on a Saturday, Sunday or a Holiday, the last day to perfect the
decision shall be the next working day. (Underscoring supplied)
th

Hence, it is crystal clear that the appeal was filed within the prescriptive period to perfect
an appeal. Likewise, the petitioners contention that private respondent did not post the
required surety bond, deserves scant consideration, for the simple reason that a surety bond
was issued by BF General Insurance Company, Inc., in the amount of P25, 443.70 (Rollo,
pp. 63-64).
2. Jurisdictional Issue
The jurisdiction of Labor Arbiters and Voluntary Arbitrator or Panel of Voluntary
Arbitrators is clearly defined and specifically delineated in the Labor Code. The pertinent
provisions of the Labor Code, read:
A. Jurisdiction of Labor Arbiters
Art. 217. Jurisdiction of Labor Arbiter and the Commission. -- (a) Except as otherwise
provided under this Code the Labor Arbiter shall have original and exclusive jurisdiction to
hear and decide, within thirty(30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and,
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000) regardless of whether accompanied with a claim for reinstatement.
xxx
(c) Cases arising from the interpretation or implementation of collective bargaining
agreement and those arising from the interpretation or enforcement of company
procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitrator so maybe provided in said agreement.
B. Jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. The
Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in the immediately
preceding article. Accordingly, violations of a Collective Bargaining Agreement, except
those which are gross in character, shall no longer be treated as unfair labor practice and
shall be resolved as grievances under the collective bargaining agreement. For purposes of
this Article, gross violations of Collective Bargaining Agreement shall mean flagrant
and/or malicious refusal to comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department of
Labor and Employment shall not entertain disputes, grievances or matters under the
exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary
Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery
or Voluntary Arbitration provided in the Collective Bargaining Agreement.
Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining deadlocks.
The aforecited provisions of law cannot be read in isolation or separately. They must
be read as a whole and each Article of the Code reconciled one with the other. An analysis
of the provisions of Articles 217, 261, and 262 indicates, that:

1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators
over the cases enumerated in Articles 217, 261 and 262, can possibly include money claims in one
form or another.
2. The cases where the Labor Arbiters have original and exclusive jurisdiction are enumerated in
Article 217, and that of the Voluntary Arbitrator or Panel of Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an exception as indicated
in the introductory sentence of Article 217 (a), to wit:

Art. 217. Jurisdiction of Labor Arbiters ... (a) Except as otherwise provided under this
Code the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide ...
the following cases involving all workers...
The phrase Except as otherwise provided under this Code refers to the following
exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters ...
xxx
(c) Cases arising from the interpretation or implementation of collective bargaining
agreement and those arising from the interpretation or enforcement of company
procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitrator as may be provided in said agreement.
B. Art. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining deadlocks.
Parenthetically, the original and exclusive jurisdiction of the Labor Arbiter under Article
217 (c), for money claims is limited only to those arising from statutes or contracts other
than a Collective Bargaining Agreement. The Voluntary Arbitrator or Panel of Voluntary
Arbitrators will have original and exclusive jurisdiction over money claims arising from
the interpretation or implementation of the Collective Bargaining Agreement and, those
arising from the interpretation or enforcement of company personnel policies, under
Article 261.
4. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is provided for in Arts.
261 and 262 of the Labor Code as indicated above.

1. A close reading of Article 261 indicates that the original and exclusive jurisdiction
of Voluntary Arbitrator or Panel of Voluntary Arbitrators is limited only to:
... unresolved grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from the interpretation or enforcement
of company personnel policies... Accordingly, violations of a collective bargaining
agreement, except those which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the Collective Bargaining
Agreement. xxx.
2. Voluntary Arbitrators or Panel of Voluntary Arbitrators, however, can exercise
jurisdiction over any and all disputes between an employer and a union and/or individual
worker as provided for in Article 262.

Art. 262. Jurisdiction over other labor disputes. - The voluntary arbitrator or panel of
voluntary arbitrators, upon agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining deadlocks.
It must be emphasized that the jurisdiction of the Voluntary Arbitrator or Panel of
Voluntary Arbitrators under Article 262 must be voluntarily conferred upon by both labor
and management. The labor disputes referred to in the same Article 262 can include all
those disputes mentioned in Article 217 over which the Labor Arbiter has original and
exclusive jurisdiction.
As shown in the above contextual and wholistic analysis of Articles 217, 261, and 262
of the Labor Code, the National Labor Relations Commission correctly ruled that the Labor
Arbiter had no jurisdiction to hear and decide petitioners money-claim underpayment of
retirement benefits, as the controversy between the parties involved an issue arising from
the interpretation or implementation of a provision of the collective bargaining
agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators has original and
exclusive jurisdiction over the controversy under Article 261 of the Labor Code, and not
the Labor Arbiter.
3. Merits of the Case
The Court will not remand the case to the Voluntary Arbitrator or Panel of Voluntary
Arbitrators for hearing. This case has dragged on far too long - eight (8) years. Any
further delay would be a denial of speedy justice to an aged retired stevedore. There is
further the possibility that any Decision by the Voluntary Arbitrator or Panel of Voluntary
Arbitrators will be appealed to the Court of Appeals, and finally to this Court. Hence, the
Court will rule on the merits of the case.
We adopt as our own the retirement benefit computation formula of the Labor Arbiter,
and the reasons therefor as stated in the decision abovequoted.
The simple statement of the Labor Arbiter that we cannot sustain a computation of
length of service based on ECC contribution records, was not amply explained by the
Labor Arbiter; however, there is legal and factual basis for the same. It is unrealistic to
expect a lowly stevedore to know what reports his employer submits to the Employees
Compensation Commission under Book IV, Health, Safety and Welfare Benefits, Title II,
Employees Compensation and State Insurance Fund, of the Labor Code, simply because
the insurance fund is solely funded by the employer and the rate of employers contribution
varies according to time and actuarial computations. (See Articles 183-184; Labor
Code). The worker has no ready access to this employers record. In fact, it is farthest
from his mind to inquire into the amount of employers contribution, much less whether the
employer remits the contributions. The worker is at all times entitled to benefits upon the
occurrence of the defined contingency even when the employer fails to remit the
contributions. (See Article 196 (b), Labor Code).
All employers are likewise required to keep an employment record of all their
employees, namely: payrolls; and time records. (See Book III, Rule X, specifically Secs.
6,7,8, 1 and 12, Omnibus Rules - Implementing the Labor Code).
The respondent-employer was afforded the opportunity to show proof of the
petitioners length of service and pay records. In both instances, the respondent-employer
failed. By its own folly, it must therefore suffer the consequences of such failure. (South
Motorists Enterprises v. Tosoc, 181 SCRA 386, [1990]) From the very beginning - by the
provision of the retirement provision of the Collective Bargaining Agreement, i.e., the

length of service as requirement for retirement, and salary as a basis for benefit
computation - the employer was forewarned of the need for accurate record keeping. This
is precisely the basis of retirement, and the computation of benefits based on years of
service and monthly wage.
To recapitulate; the Court hereby rules 1. That the National Labor Relations Commission correctly ruled that the Labor Arbiter had no
jurisdiction over the case, because the case involved an issue arising from the interpretation or
implementation of a Collective Bargaining Agreement;
2. That the appeal to the National Labor Relations Commission was filed within the reglementary
period and that the appeal bond was filed; and
3. That we adopt the computation formula for the retirement benefits by the Labor Arbiter, and the
basis thereof. The respondent must therefore pay the petitioner the additional amount of TwentyFive Thousand Four Hundred Forty-Three and Seventy Centavos P25,443.70) Pesos.

In view of the long delay in the disposition of the case, this decision is immediately
executory.

G.R. No. 101619 July 8, 1992

SANYO PHILIPPINES WORKERS UNION-PSSLU LOCAL CHAPTER NO. 109 AND/OR ANTONIO DIAZ, PSSLU NATIONAL PRESIDENT, petitioners,
vs.
HON. POTENCIANO S. CANIZARES, in his capacity as Labor Arbiter, BERNARDO YAP, RENATO BAYBON, SALVADOR SOLIBEL, ALLAN MISTERIO, EDGARDO TANGKAY,
LEONARDO DIONISIO, ARNEL SALVO, REYNALDO RICOHERMOSO, BENITO VALENCIA, GERARDO LASALA AND ALEXANDER ATANASIO, respondents.

MEDIALDEA, J.:

This petition seeks to nullify: 1) the order of respondent Labor Arbiter Potenciano Caizares dated August 6, 1991 deferring the resolution of the motion to dismiss the complaint of private
respondents filed by petitioner Sanyo Philippines Workers Union-PSSLU Local Chapter No. 109 (PSSLU, for brevity) on the ground that the labor arbiter had no jurisdiction over said
complaint and 2) the order of the same respondent clarifying its previous order and ruling that it had jurisdiction over the case.
The facts of the case are as follows:
PSSLU had an existing CBA with Sanyo Philippines Inc. (Sanyo, for short) effective July 1, 1989 to June 30, 1994. The same CBA contained a union security clause which provided:

Sec. 2. All members of the union covered by this agreement must retain their membership in good standing in the union as condition of his/her continued
employment with the company. The union shall have the right to demand from the company the dismissal of the members of the union by reason of their
voluntary resignation from membership or willful refusal to pay the Union Dues or by reasons of their having formed, organized, joined, affiliated, supported
and/or aided directly or indirectly another labor organization, and the union thus hereby guarantees and holds the company free and harmless from any liability
whatsoever that may arise consequent to the implementation of the provision of this article. (pp. 5-6, Rollo)
In a letter dated February 7, 1990, PSSLU, through its national president, informed the management of Sanyo that the following employees were notified that their membership with
PSSLU were cancelled for anti-union, activities, economic sabotage, threats, coercion and intimidation, disloyalty and for joining another union: Benito Valencia, Bernardo Yap, Arnel
Salvo, Renato Baybon, Eduardo Porlaje, Salvador Solibel, Conrado Sarol, Angelito Manzano, Allan Misterio, Reynaldo Ricohermoso, Mario Ensay and Froilan Plamenco. The same letter
informed Sanyo that the same employees refused to submit themselves to the union's grievance investigation committee (p. 53, Rollo). It appears that many of these employees were not
members of PSSLU but of another union, KAMAO.
On February 14, 1990, some officers of KAMAO, which included Yap, Salvo, Baybon, Solibel, Valencia, Misterio and Ricohermoso, executed a pledged of cooperation with PSSLU
promising cooperation with the latter union and among others, respecting, accepting and honoring the CBA between Sanyo and specifically:

1. That we shall remain officers and members of KAMAO until we finally decide to rejoin Sanyo Phil. Workers Union-PSSLU;
2. That henceforth, we support and cooperate with the duly elected union officers of Sanyo Phil. Workers Union-PSSLU in any and all its activities and
programs to insure industrial peace and harmony;
3. That we collectively accept, honor, and respect the Collective Bargaining Agreement entered into between Sanyo Phil. Inc. and Sanyo Phil. Workers UnionPSSLU dated February 7, 1990;
4 That we collectively promise not to engage in any activities inside company premises contrary to law, the CBA and existing policies;
5 That we are willing to pay our individual agency fee in accordance with the provision of the Labor Code, as amended;
6 That we collectively promise not to violate this pledge of cooperation. (p. 55, Rollo)

On March 4, 1991, PSSLU through its national and local presidents, wrote another letter to Sanyo recommending the dismissal of the following non-union workers: Bernardo Yap, Arnel
Salvo, Renato Baybon, Reynaldo Ricohermoso, Salvador Solibel, Benito Valencia, and Allan Misterio, allegedly because: 1) they were engaged and were still engaging in anti-union
activities; 2) they willfully violated the pledge of cooperation with PSSLU which they signed and executed on February 14, 1990; and 3) they threatened and were still threatening with
bodily harm and even death the officers of the union (pp. 37-38, Rollo).
Also recommended for dismissal were the following union members who allegedly joined, supported and sympathized with a minority union, KAMAO: Gerardo Lasala, Legardo Tangkay,
Alexander Atanacio, and Leonardo Dionisio.
The last part of the said letter provided:
The dismissal of the above-named union members is without prejudice to receive (sic) their termination pay if management decide (sic) to grant them benefits in
accordance with law. The union hereby holds the company free and harmless from any liability that may arise consequent to the implementation by the
company of our recommendations for the dismissal of the above-mentioned workers.
It is however suggested that the Grievance Machinery be convened pursuant to Section 3, Article XV of the Collective Bargaining Agreement (CBA) before their
actual dismissal from the company. (p. 38, Rollo)
Pursuant to the above letter of the union, the company sent a memorandum to the same workers advising them that:
As per the attached letter from the local union President SPWU and the federation President, PSSLU, requesting management to put the herein mentioned
employees on preventive suspension, effective immediately, preliminary to their subsequent dismissal, please be informed that the following employees are
under preventive suspension effective March 13, 1991 to wit:
1. Bernardo Yap
2. Renato Baybon
3. Salvador Solibel

4. Allan Misterio
5. Edgardo Tangkay
6. Leonardo Dionisio
7. Arnel Salvo

8. Reynaldo Ricohermoso
9. Benito Valencia
10. Gerardo Lasala
11. Alexander Atanacio

The above listed employees shall not be allowed within company premises without the permission of management.
As per request of the union's letter to management, should the listed employees fail to appeal the decision of the union for dismissal, then effective March 23,
1991, said listed employees shall be considered dismissed from the company. (p 39, Rollo)
The company received no information on whether or not said employees appealed to PSSLU. Hence, it considered them dismissed as of March 23, 1991 (p. 40, Rollo).

On May 20, 1991, the dismissed employees filed a complaint (pp. 32-35, Rollo) with the NLRC for illegal dismissal. Named respondent were PSSLU and Sanyo.
On June 20, 1991, PSSLU filed a motion to dismiss the complaint alleging that the Labor Arbiter was without jurisdiction over the case, relying on Article 217 (c) of P.D. 442, as amended
by Section 9 of Republic Act No. 6715 which provides that cases arising from the interpretation or implementation of the collective bargaining agreements shall be disposed of by the labor
arbiter by referring the same to the grievance machinery and voluntary arbitration.
The complainants opposed the motion to dismiss complaint on these grounds: 1) the series of conferences before the National Conciliation and Mediation Board had been terminated; 2)
the NLRC Labor Arbiter had jurisdiction over the case which was a termination dispute pursuant to Article 217 (2) of the Labor Code; and 3) there was nothing in the CBA which needs
interpretation or implementation (pp. 44-46, Rollo).
On August 7, 1991, the respondent Labor Arbiter issued the first questioned order. It held that:
xxx xxx xxx
While there are seemingly contradictory provisions in the aforecited article of the Labor Code, the better interpretation will be to give effect to both, and
termination dispute being clearly spelled as falling under the jurisdiction of the Labor Arbiter, the same shall be respected. The jurisdiction of the grievance
machinery and voluntary arbitration shall cover other controversies.

However, the resolution of the instant issue shall be suspended until both parties have fully presented their respective positions and the said issue shall be
included in the final determination of the above-captioned case.
WHEREFORE, the instant Motions to Dismiss are hereby held pending.
Consequently, the parties are hereby directed to submit their position papers and supporting documents pursuant to Section 2, Rule VII of the Rules of the
Commission on or before the hearing on the merit of this case scheduled on August 29, 1991 at 11:00 a.m. (p. 23, Rollo)
On August 27, 1991, PSSLU filed another motion to resolve motion to dismiss complaint with a prayer that the Labor Arbiter resolve the issue of jurisdiction.
On September 4, 1991, the respondent Labor Arbiter issued the second questioned order which held that it was assuming jurisdiction over the complaint of private respondents, in effect,
holding that it had jurisdiction over the case.
On September 19, 1991, PSSLU filed this petition alleging that public respondent Labor Arbiter cannot assume jurisdiction over the complaint of public respondents because it had no
jurisdiction over the dispute subject of said complaint. It is their submission that under Article 217 (c) of the Labor Code, in relation to Article 261 thereof, as well as Policy Instruction No. 6
of the Secretary of Labor, respondent Arbiter has no jurisdiction and authority to take cognizance of the complaint brought by private respondents which involves the implementation of the
union security clause of the CBA. The function of the Labor Arbiter under the same law and rule is to refer this case to the grievance machinery and voluntary arbitration.

In its comment, private respondents argue that Article 217(a) 2 and 4 of the Labor Code is explicit, to wit:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide . . . the following cases
involving all workers, . . . :
xxx xxx xxx

2) Termination disputes,
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4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations.
The private respondents also claimed that insofar as Salvo, Baybon, Ricohermoso, Solibel, Valencia, Misterio and Lasala were concerned, they joined another union, KAMAO during the
freedom period which commenced on May 1, 1989 up to June 30, 1989 or before the effectivity of the July 1, 1989 CBA. Hence, they are not covered by the provisions of the CBA
between Sanyo and PSSLU. Private respondents Tangkay, Atanacio and Dionisio admit that in September 1989, they resigned from KAMAO and rejoined PSSLU (pp.
66(a)-68, Rollo).
For its part, public respondent, through the Office of the Solicitor General, is of the view that a distinction should be made between a case involving "interpretation or implementation of
collective bargaining agreement or "interpretation" or "enforcement" of company personnel policies, on the one hand and a case involving termination, on the other hand. It argued that the
case at bar does not involve an "interpretation or implementation" of a collective bargaining agreement or "interpretation or enforcement" of company policies but involves a "termination."
Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up in the CBA or by voluntary arbitration. Where
there was already actual termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter.
Article 217 of the Labor Code defines the jurisdiction of the Labor Arbiter.
Art. 217. Jurisdiction of Labor Arbiters and the Commission. a) Except as otherwise provided under this Code the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide within thirty (30) calendar days after the submission of the case by the parties for decision without extension even in
the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions
of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of
company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be
provided in said agreements.
It is clear from the above article that termination cases fall under the jurisdiction of the Labor Arbiter. It should be noted however that said article at the outset excepted from the said
provision cases otherwise provided for in other provisions of the same Code, thus the phrase "Except as otherwise provided under this Code . . . ." Under paragraph (c) of the same article,
it is expressly provided that "cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation and enforcement of
company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.
It was provided in the CBA executed between PSSLU and Sanyo that a member's voluntary resignation from membership, willful refusal to pay union dues and his/her forming, organizing,
joining, supporting, affiliating or aiding directly or indirectly another labor union shall be a cause for it to demand his/her dismissal from the company. The demand for the dismissal and the
actual dismissal by the company on any of these grounds is an enforcement of the union security clause in the CBA. This act is authorized by law provided that enforcement should not be
characterized by arbitrariness (Manila Mandarin Employee Union v. NLRC, G.R. No. 76989, 29 Sept. 1987, 154 SCRA 368) and always with due process (Tropical Hut Employees Union
v. Tropical Food Market, Inc., L-43495-99, Jan. 20, 1990).

The reference to a Grievance Machinery and Voluntary Arbitrators for the adjustment or resolution of grievances arising from the interpretation or implementation of their CBA and those
arising from the interpretation or enforcement of company personnel policies is mandatory. The law grants to voluntary arbitrators original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company
personnel policies (Art. 261, Labor Code).
In its order of September 4, 1991, respondent Labor Arbiter explained its decision to assume jurisdiction over the complaint, thus:
The movants failed to show (1) the provisions of the CBA to be implemented, and (2) the grievance machinery and voluntary arbitrator already formed and
properly named. What self-respecting judge would refer a case from his responsibility to a shadow? To whom really and specifically shall the case be indorsed
or referred? In brief, they could have shown the (1) existence of the grievance machinery and (2) its being effective.

Furthermore, the aforecited law merely directs the "referral" cases. It does not expressly confer jurisdiction on the grievance machinery or voluntary arbitration
panel, created or to be created. Article 260 of the Labor Code describes the formation of the grievance and voluntary arbitration. All this of course shall be on
voluntary basis. Is there another meaning of voluntary arbitration? (The herein complainant have strongly opposed the motion to dismiss. Would they go
willingly to the grievance machinery and voluntary arbitration which are installed by their opponents if directed to do so?) (p. 26, Rollo)
The failure of the parties to the CBA to establish the grievance machinery and its unavailability is not an excuse for the Labor Arbiter to assume jurisdiction over disputes arising from the
implementation and enforcement of a provision in the CBA. In the existing CBA between PSSLU and Sanyo, the procedure and mechanics of its establishment had been clearly laid out as
follows:
ARTICLE XV GRIEVANCE MACHINERY
Sec. 1. Whenever any controversy should arise between the company and the union as to the interpretation or application of the provision of this agreement, or
whenever any difference shall exist between said parties relative to the terms and conditions of employment, an earnest effort shall be made to settle such
controversy in substantially the following manner:

First step. (Thru Grievance) The dispute shall initially be resolved by conference between the management to be represented by the Management's authorized
representatives on the one hand, and the Union to be represented by a committee composed of the local union president and one of the local union officer
appointed by the local union president, on the other hand within three days from date of concurrence of grievance action. In the absence of the local union
president, he (shall) appoint another local union officer to take over in his behalf. Where a controversy personally affects an employee, he shall not be allowed
to be a member of the committee represented by the union.
Second step. (Thru Arbitrator mutually chosen) Should such dispute remain unsettled after twenty (20) days from the first conference or after such period as the
parties may agree upon in specified cases, it shall be referred to an arbitrator chosen by the consent of the company and the union. In the event of failure to
agree on the choice of voluntary arbitrator, the National Conciliation and Mediation Board, Department of Labor and Employment shall be requested to choose
an Arbitrator in accordance with voluntary arbitration procedures.
Sec. 2. The voluntary Arbitrator shall have thirty (30) days to decide the issue presented to him and his decision shall be final, binding and executory upon the
parties. He shall have no authority to add or subtract from and alter any provision of this agreement. The expenses of voluntary arbitration including the fee of
the arbitrator shall be shared equally by the company and the union. In the event the arbitrator chosen either by the mutual agreement of the company and the
union by (the) way of voluntary arbitration or by the National Conciliation and Mediation Board (NCMB) failed to assume his position, died, become disabled or
any other manner failed to function and or reach a decision, the company and the union shall by mutual agreement choose another arbitrator; in the event of
failure to agree on the choice of a new voluntary arbitrator, the matter shall again be referred back to the NCMB who shall be requested again to choose a new
arbitrator as above provided. Any grievance not elevated or processed as above provided within the stipulated period shall be deemed settled and terminated.

Sec. 3. It is hereby agreed that decisions of the union relative to their members, for implementation by the COMPANY, should be resolved for review thru the
Grievance Machinery; and management be invited to participate in the Grievance procedure to be undertaken by the union relative to (the) case of the union
against members. (pp. 134-135, Rollo)
All that needs to be done to set the machinery into motion is to call for the convening thereof. If the parties to the CBA had not designated their representatives yet, they should be ordered
to do so.
The procedure introduced in RA 6715 of referring certain grievances originally and exclusively to the grievance machinery and when not settled at this level, to a panel of voluntary
arbitrators outlined in CBA's does not only include grievances arising from the interpretation or implementation of the CBA but applies as well to those arising from the implementation of
company personnel policies. No other body shall take cognizance of these cases. The last paragraph of Article 261 enjoins other bodies from assuming jurisdiction thereof:

The commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances or
matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of voluntary arbitrators and shall immediately dispose and refer the
same to the grievance machinery or voluntary arbitration provided in the Collective Bargaining Agreement.
In the instant case, however, We hold that the Labor Arbiter and not the Grievance Machinery provided for in the CBA has the jurisdiction to hear and decide the complaints of the private
respondents. While it appears that the dismissal of the private respondents was made upon the recommendation of PSSLU pursuant to the union security clause provided in the CBA, We
are of the opinion that these facts do not come within the phrase "grievances arising from the interpretation or implementation of (their) Collective Bargaining Agreement and those arising
from the interpretation or enforcement of company personnel policies," the jurisdiction of which pertains to the Grievance Machinery or thereafter, to a voluntary arbitrator or panel of
voluntary arbitrators. Article 260 of the Labor Code on grievance machinery and voluntary arbitrator states that "(t)he parties to a Collective Bargaining Agreement shall include therein
provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the
interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies." It is further provided in
said article that the parties to a CBA shall name or designate their respective representatives to the grievance machinery and if the grievance is not settled in that level, it shall
automatically be referred to voluntary arbitrators (or panel of voluntary arbitrators) designated in advance by the parties. It need not be mentioned that the parties to a CBA are the union
and the company. Hence, only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators.
In the instant case, both the union and the company are united or have come to an agreement regarding the dismissal of private respondents. No grievance between them exists which
could be brought to a grievance machinery. The problem or dispute in the present case is between the union and the company on the one hand and some union and non-union members
who were dismissed, on the other hand. The dispute has to be settled before an impartial body. The grievance machinery with members designated by the union and the company cannot
be expected to be impartial against the dismissed employees. Due process demands that the dismissed workers grievances be ventilated before an impartial body. Since there has
already been an actual termination, the matter falls within the jurisdiction of the Labor Arbiter.
ACCORDINGLY, the petition is DISMISSED. Public respondent Labor Arbiter is directed to resolve the complaints of private respondents immediately.