G.R. No.

114974 June 16, 2004

STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE), petitioner, Not guilty of ULP
vs.
The Honorable MA. NIEVES R. CONFESOR, in her capacity as SECRETARY OF LABOR AND
EMPLOYMENT; and the STANDARD CHARTERED BANK, respondents, Not guilty of ULP

Facts:

The exclusive bargaining agent of the rank and file employees of the Bank is the Standard Chartered
Bank Employees Union.

The Bank and the Union signed a five-year collective bargaining agreement (CBA) with a provision to
renegotiate the terms thereof on the third year. Prior to the expiration of the three-year period2 but within
the sixty-day freedom period, the Union initiated the negotiations. The union sent a letter containing its
proposals and 34 economic provisions in which the bank took note.

The Bank attached its counter-proposal to the non-economic provisions proposed by the Union.8 The
Bank posited that it would be in a better position to present its counter-proposals on the economic items
after the Union had presented its justifications for the economic proposals.9 The parties agreed to set
meetings to settle their differences on the proposed CBA.

The parties met and set the ground rules for the negotiation. The proposed non-economic provisions of
the CBA were discussed first.13Even during the final reading of the non-economic provisions on there
were still provisions on which the Union and the Bank could not agree. Temporarily, the notation
"DEFERRED" was placed therein. Towards the end of the meeting, the Union manifested that the same
should be changed to "DEADLOCKED" to indicate that such items remained unresolved. Both parties
agreed to place the notation "DEFERRED/DEADLOCKED."14

The negotiation for economic provisions commenced. A presentation of the basis of the Unions economic
proposals was made. The Bank made a similar presentation. Towards the end of the Banks presentation,
Umali requested the Bank to validate the Unions "guestimates," especially the figures for the rank and file
staff.15 In the succeeding meetings, Umali chided the Bank for the insufficiency of its counter-proposal. He
reminded the Bank, how the Union got what it wanted in and stated that if need be, the Union would go
through the same route to get what it wanted.16

In the succeeding meetings, the Union and the bank made the proposals.

Diokno stated that, in order for the Bank to make a better offer, the Union should clearly identify what it
wanted to be included in the total economic package. Umali replied that it was impossible to do so
because the Banks counter-proposal was unacceptable. Except for the provisions on signing bonus and
uniforms, the Union and the Bank failed to agree on the remaining economic provisions of the CBA. The
Union declared a deadlock25 and filed a Notice of Strike before the National Conciliation and Mediation
Board (NCMB)

On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the
NLRC against the Union. The Bank alleged that the Union violated its duty to bargain, as it did not
bargain in good faith. It contended that the Union demanded "sky high economic demands," indicative
of blue-sky bargaining.27 Further, the Union violated its no strike- no lockout clause by filing a notice of
strike before the NCMB. The Secretary of Labor and Employment dismissed the banks and unions
charge of unfair labor practice for lack of merit.
Dissatisfied, the Union filed a motion for reconsideration with clarification, while the Bank filed a motion
for reconsideration. The motions were all denied.

Issue: Whether or not the Union was able to substantiate its claim of unfair labor practice against the
Bank arising from the latters alleged "interference" with its choice of negotiator; surface bargaining;
making bad faith non-economic proposals; and refusal to furnish the Union with copies of the relevant
data;

Held:

The petition is bereft of merit.

"Interference" under Article

248 (a) of the Labor Code

The petitioner asserts that the private respondent committed ULP, i.e., interference in the selection of the
Unions negotiating panel, when Cielito Diokno, the Banks Human Resource Manager, suggested to the
Unions President Eddie L. Divinagracia that Jose P. Umali, Jr., President of the NUBE, be excluded from
the Unions negotiating panel and that during the first meeting, Diokno stated that the negotiation be kept
a "family affair."

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

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

In order to show that the employer committed ULP under the Labor Code, substantial evidence is
required to support the claim. In the case at bar, the Union bases its claim of interference on the alleged
suggestions of Diokno to exclude Umali from the Unions negotiating panel.

The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno
to Divinagracia is an anti-union conduct from which it can be inferred that the Bank consciously adopted
such act to yield adverse effects on the free exercise of the right to self-organization and collective
bargaining of the employees, especially considering that such was undertaken previous to the
commencement of the negotiation and simultaneously with Divinagracias suggestion that the bank
lawyers be excluded from its negotiating panel.

It is clear that such ULP charge was merely an afterthought.

The Duty to Bargain

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

Surface bargaining is defined as "going through the motions of negotiating" without any legal intent to
reach an agreement.50

The minutes of meetings do not show that the Bank had any intention of violating its duty to bargain with
the Union. Records show that after the Union sent its proposal to the Bank, the latter replied with a list of
its counter-proposals. The minutes of the meetings show that both the Bank and the Union exchanged
economic and non-economic proposals and counter-proposals.

The Union has not been able to show that the Bank had done acts, which tend to show that it did not want
to reach an agreement with the Union or to settle the differences between it and the Union. However, it is
herein emphasized that the duty to bargain "does not compel either party to agree to a proposal or require
the making of a concession."53 Hence, the parties failure to agree did not amount to ULP under Article
248(g) for violation of the duty to bargain.

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

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

While the refusal to furnish requested information is in itself an unfair labor practice, and also supports the
inference of surface bargaining,55 in the case at bar, Umali, requested the Bank to validate
its guestimates on the data of the rank and file. However, Umali failed to put his request in writing.

Estoppel not Applicable

In the Case at Bar

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

In the case, however, the approval of the CBA and the release of signing bonus do not necessarily mean
that the Union waived its ULP claim against the Bank during the past negotiations. After all, the
conclusion of the CBA was included in the order of the SOLE, while the signing bonus was included in the
CBA itself.

The Union Did Not Engage

In Blue-Sky Bargaining

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making
exaggerated or unreasonable proposals.59 The Bank failed to show that the economic demands made by
the Union were exaggerated or unreasonable. The minutes of the meeting show that the Union based its
economic proposals on data of rank and file employees and the prevailing economic benefits received by
bank employees from other foreign banks doing business in the Philippines and other branches of the
Bank in the Asian region.

G.R. No. 158930-31 August 22, 2006

UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS - KILUSANG
MAYO UNO (UFE-DFA-KMU), Petitioner,
vs.
NESTL PHILIPPINES, INCORPORATED, Respondent.

Facts:

In a letter denominated as a Letter of Intent, the Presidents of the Alabang and Cabuyao Divisions of
UFE-DFA-KMU, Ernesto Pasco and Diosdado Fortuna, informed Nestl of their intent to "open a new
Collective Bargaining Negotiation for the year 2001-2004

In a letter, Nestl acknowledged receipt of the aforementioned letter. It also informed UFE-DFA-KMU that
it was preparing its own counter-proposal and proposed ground rules that shall govern the conduct of the
collective bargaining negotiations.

In another letter addressed to the UFE-DFA-KMU (Cabuyao Division), Nestl underscored its position that
"unilateral grants, one-time company grants, company-initiated policies and programs, which include, but
are not limited to the Retirement Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their
very nature not proper subjects of CBA negotiations and therefore shall be excluded therefrom."11 In
addition, it clarified that with the closure of the Alabang Plant, the CBA negotiations will only be applicable
to the covered employees of the Cabuyao Plant; hence, the Cabuyao Division of UFE-DFA-KMU became
the sole bargaining unit involved in the subject CBA negotiations.

In a letter, Nestl, claiming to have reached an impasse in said dialogue, requested 12 the NCMB to
conduct preventive mediation proceedings between it and UFE-DFA-KMU. Nestl alleged that despite
fifteen (15) meetings between them, the parties failed to reach any agreement on the proposed CBA.

Conciliation proceedings nevertheless proved ineffective. Complaining, in essence, of bargaining

deadlock pertaining to economic issues, i.e., "retirement (plan) and CBA,"13UFE-DFA-KMU filed a
Notice of Strike14 with the NCMB. One week later, another Notice of Strike15 was filed by the UFE-DFA-
KMU this time predicated on Nestls alleged unfair labor practices i.e., bargaining in bad faith in that it
was setting pre-conditions in the ground rules by refusing to include the issue of the Retirement Plan in
the CBA negotiations.

Nestl filed with the DOLE a Petition for Assumption of Jurisdiction,17 fundamentally praying that the
Secretary of the DOLE, Hon. Sto. Tomas, assume jurisdiction over the current labor dispute as mandated
by Article 263 (g) of the Labor Code, as amended, thereby effectively enjoining any impending strike at
the Nestl Cabuyao Plant in Laguna.

On 29 November 2001, Sec. Sto. Tomas issued an Order assuming jurisdiction over the subject labor
dispute between the parties.

Accordingly, any strike or lockout is hereby enjoined. The parties are directed to cease and desist from
committing any act that might lead to the further deterioration of the current labor relations situation.
UFE-DFA-KMU sought reconsideration19 of the abovequoted Assumption of Jurisdiction Order but
denied.

Despite the injunction22 contained in Assumption of Jurisdiction Order and conciliation efforts by the
NCMB, the employee members of UFE-DFA-KMU at the Nestl Cabuyao Plant went on strike.

In consideration of the above, Sec. Sto. Tomas issued yet another Order 23 directing: (1) the members of
UFE-DFA-KMU to return-to-work within twenty-four (24) hours; (2) Nestl to accept back all returning
workers under the same terms and conditions existing preceding to the strike; and (3) both parties to
cease and desist from committing acts inimical to the on-going conciliation proceedings leading to the
further deterioration of the situation.

Notwithstanding the Return-To-Work Order, the members of UFE-DFA-KMU continued with their strike
and refused to go back to work as instructed.

Nestl and UFE-DFA-KMU filed their respective position papers. Nestl addressed several issues
allegedly pertaining to the current labor dispute, i.e., economic provisions of the CBA as well as the non-
inclusion of the issue of the Retirement Plan in the collective bargaining negotiations. UFE-DFA-KMU, in
contrast, limited itself to tackling the solitary issue of whether or not the retirement plan was a mandatory
subject in its CBA negotiations with the company on the contention "that the Order of Assumption of
Jurisdiction covers only the issue of Retirement Plan."25

On 8 February 2002, Nestl moved that UFE-DFA-KMU be declared to have waived its right to present
arguments respecting the other issues raised by the company on the ground that the latter chose to limit
itself to discussing only one (1) issue. Sec. Sto. Tomas allowed UFE-DFA-KMU the chance to tender its
stand on the other issues raised by Nestl but not covered by its initial position paper.

UFE-DFA-KMU afterward filed a Manifestation with Motion for Reconsideration of the Order which was
denied.

Then Acting Secretary of the DOLE, Hon. Arturo D. Brion, came out with an Order, ruling that:

a. we hereby recognize that the present Retirement Plan at the Nestl Cabuyao Plant is a unilateral grant
and is therefore not a mandatory subject for bargaining;

b. the Unions charge of unfair labor practice against the Company is hereby dismissed for lack of merit;

g. the CBA shall, in so far as representation is concerned, be for a term of five (5) years; all other
provisions shall be renegotiated not later than three (3) years after its effective date

UFE-DFA-KMU, went to the Court of Appeals likewise via a petition forcertiorari seeking to annul, on the
ground of grave abuse of discretion, the Orders of the Secretary of the DOLE. The court of appeals acting
on such petition determined the issues in favor of UFE-DFA-KMU.

Issue/s: Whether or not the Court of Appeals committed reversible error in not ruling that Nestl was
guilty of unfair labor practice despite allegedly setting a pre-condition to bargaining the non-inclusion of
the Retirement Plan as an issue in the collective bargaining negotiations.

Held:

It pertains to the alleged reversible error committed by the Court of Appeals in holding, albeit impliedly,
Nestl free and clear from any unfair labor practice. UFE-DFA-KMU argues that Nestls "refusal to
bargain on a very important CBA economic provision constitutes unfair labor practice."52 It explained that
Nestl set as a precondition for the holding of collective bargaining negotiations the non-inclusion of the
issue of Retirement Plan.

Nestl refutes the above argument and asserts that it was only before the Court of Appeals, and in the
second Petition for Certiorari at that, did UFE-DFA-KMU raise the matter of unfair labor practice. It
reasoned that the subject of unfair labor practice should have been threshed out with the appropriate
labor tribunal.

We are persuaded.

The acts constituting unfair labor practices committed by employers, to wit:

ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. It shall be unlawful for an employer to
commit any of the following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

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

(c) To contract out services or functions being performed by union members when such will interfere with,
restrain or coerce employees in the exercise of their right to self-organization;

(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor
organization, including the giving of financial or other support to it or its organizers or supporters;

(e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in
order to encourage or discourage membership in any labor organization. Nothing in this Code or in any
other law shall stop the parties from requiring membership in a recognized collective bargaining agent as
a condition for employment, except those employees who are already members of another union at the
time of the signing of the collective bargaining agreement.

Employees of an appropriate collective bargaining unit who are not members of the recognized collective
bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by
members of the recognized collective bargaining agent, if such non-union members accept the benefits
under the collective agreement. Provided, That the individual authorization required under Article 242,
paragraph (o) of this Code shall not apply to the nonmembers of the recognized collective bargaining
agent.

Herein, Nestl is accused of violating its duty to bargain collectively when it purportedly imposed a pre-
condition to its agreement to discuss and engage in collective bargaining negotiations with UFE-DFA-
KMU.

A meticulous review of the record and pleadings of the cases at bar shows that, of the two notices of
strike filed by UFE-DFA-KMU before the NCMB, it was only on the second that the ground of unfair labor
practice was alleged. Worse, Notice of Strike merely contained a general allegation that Nestl committed
unfair labor practice by bargaining in bad faith for supposedly "setting pre-condition in the ground rules
(Retirement issue)."56

By imputing bad faith unto the actuations of Nestl, it was UFE-DFA-KMU, therefore, who had the burden
of proof to present substantial evidence to support the allegation of unfair labor practice. A perusal of the
allegations and arguments raised by UFE-DFA-KMU in the Memorandum will readily disclose that it failed
to discharge said onus probandi as there is still a need for the presentation of evidence other than its bare
contention of unfair labor practice in order to make certain the propriety or impropriety of the unfair labor
practice charge hurled against Nestl.

x x x. In cases of unfair labor practices, the notice of strike shall as far as practicable, state the acts
complained of and the efforts to resolve the dispute amicably." [Emphasis supplied.]

Except for the assertion put forth by UFE-DFA-KMU, neither the second Notice of Strike nor the records
of these cases substantiate a finding of unfair labor practice. It is not enough that the union believed that
the employer committed acts of unfair labor practice when the circumstances clearly negate even a prima
facie showing to warrant such a belief.58 In its letter59 to UFE-DFA-KMU such attitude is not tantamount to
refusal to bargain. This is especially true when it is viewed in the light of the fact that eight out of nine
bargaining units have allegedly agreed to treat the Retirement Plan as a unilateral grant. Nestl,
therefore, cannot be faulted for considering the same benefit as unilaterally granted. To be sure, it must
be shown that Nestl was motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy, and, of course, that social humiliation,
wounded feelings, or grave anxiety resulted x x x"60 in disclaiming unilateral grants as proper subjects in
their collective bargaining negotiations.

Construing arguendo that the content of the aforequoted letter of 29 May 2001 laid down a pre-condition
to its agreement to bargain with UFE-DFA-KMU, Nestls inclusion in its Position Paper of its proposals
affecting other matters covered by the CBA contradicts the claim of refusal to bargain or bargaining in bad
faith.

In sum, from the facts and evidence extant in the records of these consolidated petitions, this Court finds
that 1) the Retirement Plan is still a valid issue for herein parties collective bargaining negotiations; 2) the
Court of Appeals committed reversible error in limiting to the issue of the ground rules the scope of the
power of the Secretary of Labor to assume jurisdiction over the subject labor dispute; and 3) Nestl is not
guilty of unfair labor practice.

G.R. No. 154113 December 7, 2011

EDEN GLADYS ABARIA, petitioner vs. NLRC, Respondent

Facts:

Metro Cebu Community Hospital, Inc. (MCCHI), presently known as the Visayas Community Medical
Center (VCMC), is a non-stock, non-profit corporation organized under the laws of the Republic of the
Philippines. It operates the Metro Cebu Community Hospital (MCCH), a tertiary medical institution located
at Osmea Boulevard, Cebu City. MCCH is owned by the United Church of Christ in the Philippines
(UCCP) and Rev. Gregorio P. Iyoy is the Hospital Administrator.

In the CBA effective from January 1994 until December 31, 1995, the signatories were Sheila E. Buot as
Board of Trustees Chairman, Rev. Iyoy as MCCH Administrator and Atty. Fernando Yu as Legal Counsel
of NFL, while Perla Nava, President of Nagkahiusang Mamumuo sa MCCH (NAMA-MCCH-NFL) signed
the Proof of Posting.

On December 6, 1995, Nava wrote Rev. Iyoy expressing the unions desire to renew the CBA, attaching
to her letter a statement of proposals signed/endorsed by 153 union members. However, MCCHI returned
the CBA proposal for Nava to secure first the endorsement of the legal counsel of NFL as the official
bargaining representative of MCCHI employees.
Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA submitted by Nava was never referred
to NFL and that NFL has not authorized any other legal counsel or any person for collective bargaining
negotiations. By January 1996, the collection of union fees (check-off) was temporarily suspended by
MCCHI in view of the existing conflict between the federation and its local affiliate. Thereafter, MCCHI
attempted to take over the room being used as union office but was prevented to do so by Nava and her
group who protested these actions and insisted that management directly negotiate with them for a new
CBA. MCCHI referred the matter to Atty. Alforque, NFLs Regional Director, and advised Nava that their
group is not recognized by NFL.

In his letter dated February 24, 1996 addressed to Nava, Ernesto Canen, Jr., Jesusa Gerona, Hannah
Bongcaras, Emma Remocaldo, Catalina Alsado and Albina Baez, Atty. Alforque suspended their union
membership for serious violation of the Constitution and By-Laws.

Several union members led by Nava and her group launched a series of mass actions such as wearing
black and red armbands/headbands, marching around the hospital premises and putting up placards,
posters and streamers. Atty. Alforque immediately disowned the concerted activities being carried out by
union members which are not sanctioned by NFL. Nava and her group denied there was a temporary
stoppage of work, explaining that employees wore their armbands only as a sign of protest and reiterating
their demand for MCCHI to comply with its duty to bargain collectively.

On March 13 and 19, 1996, the Department of Labor and Employment (DOLE) Regional Office No. 7
issued certifications stating that there is nothing in their records which shows that NAMA-MCCH-NFL is a
registered labor organization, and that said union submitted only a copy of its Charter Certificate on
January 31, 1995.

For their continued picketing activities despite the said warning, more than 100 striking employees were
dismissed effective April 12 and 19, 1996.

Unfazed, the striking union members held more mass actions. The means of ingress to and egress from
the hospital were blocked so that vehicles carrying patients and employees were barred from entering the
premises.

Thereafter, several complaints for illegal dismissal and unfair labor practice were filed by the terminated
employees against MCCHI, Rev. Iyoy, UCCP and members of the Board of Trustees of MCCHI.

Issue:

Whether or not the Respondent MCCHI, now VCMC, is guilty of unfair labor practices. Whether or not
NAMA was a legitimate labor organization which could enter in a CBA with MCCHI

Held:

No and No, Art. 248 (g) of the Labor Code, as amended, makes it an unfair labor practice for an employer
"[t]o violate the duty to bargain collectively" as prescribed by the Code.
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. When there
is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party
shall terminate nor modify such agreement during its lifetime. However, either party can serve a written
notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be
the duty of both parties to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by
the parties.

NAMA-MCCH-NFL charged MCCHI with refusal to bargain collectively when the latter refused to meet
and convene for purposes of collective bargaining, or at least give a counter-proposal to the proposed
CBA the union had submitted and which was ratified by a majority of the union membership. MCCHI, on
its part, deferred any negotiations until the local unions dispute with the national union federation (NFL) is
resolved considering that the latter is the exclusive bargaining agent which represented the rank-and-file
hospital employees in CBA negotiations since 1987.

We rule for MCCHI.

Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL had not registered as a
labor organization, having submitted only its charter certificate as an affiliate or local chapter of NFL. 37
Not being a legitimate labor organization, NAMA-MCCH-NFL is not entitled to those rights granted to a
legitimate labor organization under Art. 242, specifically:

(a) To act as the representative of its members for the purpose of collective bargaining;

(b) To be certified as the exclusive representative of all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining;

Aside from the registration requirement, it is only the labor organization designated or selected by the
majority of the employees in an appropriate collective bargaining unit which is the exclusive
representative of the employees in such unit for the purpose of collective bargaining, as provided in Art.
255. NAMA-MCCH-NFL is not the labor organization certified or designated by the majority of the rank-
and-file hospital employees to represent them in the CBA negotiations but the NFL, as evidenced by
CBAs concluded in 1987, 1991 and 1994. While it is true that a local union has the right to disaffiliate from
the national federation, NAMA-MCCH-NFL has not done so as there was no any effort on its part to
comply with the legal requisites for a valid disaffiliation during the "freedom period" or the last 60 days of
the last year of the CBA, through a majority vote in a secret balloting in accordance with Art. 241 (d).
Nava and her group simply demanded that MCCHI directly negotiate with the local union which has not
even registered as one.

In any case, NAMA-MCCH-NFL at the time of submission of said proposals was not a duly registered
labor organization, hence it cannot legally represent MCCHIs rank-and-file employees for purposes of
collective bargaining. Hence, even assuming that NAMA-MCCH-NFL had validly disaffiliated from its
mother union, NFL, it still did not possess the legal personality to enter into CBA negotiations. A local
union which is not independently registered cannot, upon disaffiliation from the federation, exercise the
rights and privileges granted by law to legitimate labor organizations; thus, it cannot file a petition for
certification election.

Not being a legitimate labor organization nor the certified exclusive bargaining representative of MCCHIs
rank-and-file employees, NAMA-MCCH-NFL cannot demand from MCCHI the right to bargain collectively
in their behalf. Hence, MCCHIs refusal to bargain then with NAMA-MCCH-NFL cannot be considered an
unfair labor practice to justify the staging of the strike.

According to Art 263, no labor union may strike and no employer may declare a lockout on grounds
involving inter-union and intra-union disputes.

As borne by the records, NAMA-MCCH-NFL was not a duly registered or an independently registered
union at the time it filed the notice of strike on March 13, 1996 and when it conducted the strike vote on
April 2, 1996. It could not then legally represent the union members. Consequently, the mandatory notice
of strike and the conduct of the strike vote report were ineffective for having been filed and conducted by
NAMA-MCCH-NFL which has no legal personality as a legitimate labor organization.

Furthermore, the strike was illegal due to the commission of the following prohibited activities 48 : (1)
violence, coercion, intimidation and harassment against non-participating employees; and (2) blocking of
free ingress to and egress from the hospital, including preventing patients and their vehicles from entering
the hospital and other employees from reporting to work, the putting up of placards with a statement
advising incoming patients to proceed to another hospital because MCCHI employees are on
strike/protest.
Art. 264 (a) of the Labor Code, as amended, provides for the consequences of an illegal strike to the
participating workers:

x x x Any union officer who knowingly participates in illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status Provided, That mere participation of a worker in a lawful strike shall not constitute
sufficient ground for termination of his employment, even if a replacement had been hired by the
employer during such lawful strike.

G.R. No. 164301 October 19, 2011

BANK OF THE PHILIPPINE ISLANDS, Petitioner,

vs.
BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI
UNIBANK, Respondent.

Facts:

Petitioner Bank of the Philippine Islands (BPI) moves for reconsideration1, holding that former employees
of the Far East Bank and Trust Company (FEBTC) "absorbed" by BPI pursuant to the two banks merger
in 2000 were covered by the Union Shop Clause in the then existing collective bargaining agreement
(CBA)2 of BPI with respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPI
Unibank (the Union).

Issue: Whether or not the "absorbed" FEBTC employees fell within the definition of "new employees"
under the Union Shop Clause, such that they may be required to join respondent union and if they fail to
do so, the Union may request BPI to terminate their employment, as the Union in fact did in the present
case.

BPI refused to accede to the Unions request. BPI won the initial battle at the Voluntary Arbitrator level.

BPIs position was rejected by the Court of Appeals which ruled that the Voluntary Arbitrators
interpretation of the Union Shop Clause was at war with the spirit and rationale why the Labor Code
allows the existence of such provision.

Held:

On review with this Court, we upheld the appellate courts ruling.

In seeking reversal, petitioner insists that the parties to the CBA clearly intended to limit the application of
the Union Shop Clause only to new employees who were hired as non-regular employees but later
attained regular status at some point after hiring. FEBTC employees cannot be considered new
employees as BPI merely stepped into the shoes of FEBTC as an employer purely as a consequence of
the merger.5

From dissenting opinions, petitioner derives its contention that "the situation of absorbed employees can
be likened to old employees of BPI, insofar as their full tenure with FEBTC was recognized by BPI and
their salaries were maintained and safeguarded from diminution" but such absorbed employees "cannot
and should not be treated in exactly the same way as old BPI employees for there are substantial
differences between them."6 Thus, adopting Justice Brions stance, petitioner contends that the absorbed
FEBTC employees should be considered "a sui generis group of employees whose classification will not
be duplicated until BPI has another merger."7

The Union filed its Comment9 on the Motion for Reconsideration. The Union argues that the creation of
employment relations between former FEBTC employees and BPI occurred after the merger. The Union
likewise points out that BPI failed to offer any counterargument to the Courts reasoning that:

The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the
individual employee's right or freedom of association, is not to protect the union for the union's sake

Not to be forgotten is that the affected employees managed, operated and worked on the transferred
assets and properties as their means of livelihood; they constituted a basic component of their
corporation during its existence. In a merger and consolidation situation, they cannot be treated without
consideration of the applicable constitutional declarations and directives, or, worse, be simply
disregarded. Hence, there is a need for the surviving corporation to take responsibility for the affected
employees and to absorb them into its workforce where no appropriate provision for the merged
corporation's human resources component is made in the Merger Plan.13

By upholding the automatic assumption of the non-surviving corporations existing employment contracts
by the surviving corporation in a merger, the Court strengthens judicial protection of the right to security of
tenure of employees affected by a merger and avoids confusion regarding the status of their various
benefits which were among the chief objections of our dissenting colleagues. However, nothing in this
Resolution shall impair the right of an employer to terminate the employment of the absorbed employees
for a lawful or authorized cause or the right of such an employee to resign, retire or otherwise sever his
employment, whether before or after the merger, subject to existing contractual obligations.

Notwithstanding this concession, we find no reason to reverse our previous pronouncement that the
absorbed FEBTC employees are covered by the Union Shop Clause.

Hence, we stated in the Decision that:

In any event, it is of no moment that the former FEBTC employees retained the regular status that they
possessed while working for their former employer upon their absorption by petitioner. This fact would not
remove them from the scope of the phrase "new employees" as contemplated in the Union Shop Clause
of the CBA, contrary to petitioner's insistence that the term "new employees" only refers to those who are
initially hired as non-regular employees for possible regular employment.

The Union Shop Clause in the CBA simply states that "new employees" who during the effectivity of the
CBA "may be regularly employed" by the Bank must join the union within thirty (30) days from their
regularization. There is nothing in the said clause that limits its application to only new employees who
possess non-regular status, meaning probationary status, at the start of their employment. Petitioner
likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new
employees who are "absorbed" as regular employees from the beginning of their employment. What is
indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioner's new regular
employees are required to join the Union as a condition of their continued employment. 15

Although by virtue of the merger BPI steps into the shoes of FEBTC as a successor employer as if the
former had been the employer of the latters employees from the beginning it must be emphasized that, in
reality, the legal consequences of the merger only occur at a specific date, i.e., upon its effectivity which
is the date of approval of the merger by the SEC. Thus, we observed in the Decision that BPI and FEBTC
stipulated in the Articles of Merger that they will both continue their respective business operations until
the SEC issues the certificate of merger and in the event no such certificate is issued, they shall hold
each other blameless for the non-consummation of the merger.16 We likewise previously noted that BPI
made its assignments of the former FEBTC employees effective on April 10, 2000, or after the SEC
approved the merger.17 In other words, the obligation of BPI to pay the salaries and benefits of the former
FEBTC employees and its right of discipline and control over them only arose with the effectivity of the
merger. Concomitantly, the obligation of former FEBTC employees to render service to BPI and their right
to receive benefits from the latter also arose upon the effectivity of the merger.

From the plain, ordinary meaning of the terms of the Union Shop Clause, it covers employees who (a)
enter the employ of BPI during the term of the CBA; (b) are part of the bargaining unit (defined in the CBA
as comprised of BPIs rank and file employees); and (c) become regular employees without distinguishing
as to the manner they acquire their regular status.

Indeed, there are differences between (a) new employees who are hired as probationary or temporary but
later regularized, and (b) new employees who, by virtue of a merger, are absorbed from another company
as regular and permanent from the beginning of their employment with the surviving corporation. It bears
reiterating here that these differences are too insubstantial to warrant the exclusion of the absorbed
employees from the application of the Union Shop Clause. In the Decision, we noted that:

Verily, we agree with the Court of Appeals that there are no substantial differences between a newly hired
non-regular employee who was regularized weeks or months after his hiring and a new employee who
was absorbed from another bank as a regular employee pursuant to a merger, for purposes of applying
the Union Shop Clause. Both employees were hired/employed only after the CBA was signed. At the time
they are being required to join the Union, they are both already regular rank and file employees of BPI.
They belong to the same bargaining unit being represented by the Union. We see no cogent reason why
the Union Shop Clause should not be applied equally to these two types of new employees, for they are
undeniably similarly situated.18

We now come to the question: Does our affirmance of our ruling that former FEBTC employees absorbed
by BPI are covered by the Union Shop Clause violate their right to security of tenure which we expressly
upheld in this Resolution? We answer in the negative.

We have also previously held that the fundamental guarantee of security of tenure and due process
dictates that no worker shall be dismissed except for a just and authorized cause provided by law and
after due process is observed.21 Even as we now recognize the right to continuous, unbroken
employment of workers who are absorbed into a new company pursuant to a merger, it is but logical that
their employment may be terminated for any causes provided for under the law or in jurisprudence
without violating their right to security of tenure.

Although it is accepted that non-compliance with a union security clause is a valid ground for an
employees dismissal, jurisprudence dictates that such a dismissal must still be done in accordance with
due process.

In light of the foregoing, we find it appropriate to state that, apart from the fresh thirty (30)-day period from
notice of finality of the Decision given to the affected FEBTC employees to join the Union before the latter
can request petitioner to terminate the formers employment, petitioner must still accord said employees
the twin requirements of notice and hearing on the possibility that they may have other justifications for
not joining the Union.

G.R. No. 141471 September 18, 2000

COLEGIO DE SAN JUAN DE LETRAN, petitioner,

vs.
ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS, respondents.
Facts:

President of respondent union, Association of Employees and Faculty of Letran, initiated the renegotiation
of its Collective Bargaining Agreement with petitioner Colegio de San Juan de Letran for the last two (2)
years of the CBA's five (5) year lifetime from 1989-1994. On the same year, the union elected a new set
of officers wherein private respondent Eleanor Ambas emerged as the newly elected President.

Ambas wanted to continue the renegotiation of the CBA but petitioner claimed that the CBA was already
prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the union
members, who rejected it.

Petitioner accused the union officers of bargaining in bad faith before the NLRC.

The union notified the National Conciliation and Mediation Board (NCMB) of its intention to strike on the
grounds (sic) of petitioner's: non-compliance with the NLRC (1) order to delete the name of Atty. Federico
Leynes as the union's legal counsel; and (2) refusal to bargain (Ibid, p. 1).

The parties agreed to disregard the unsigned CBA and to start negotiation on a new five-year CBA
starting 1994-1999. The union submitted its proposals to petitioner, which notified the union six days later
that the same had been submitted to its Board of Trustees. In the meantime, Ambas was informed that
her work schedule was being changed. Ambas protested and requested management to submit the issue
to a grievance machinery under the old CBA.

Due to petitioner's inaction, the union filed a notice of strike. The parties met before the NCMB to discuss
the ground rules for the negotiation. The union received petitioner's letter dismissing Ambas for alleged
insubordination. Hence, the union amended its notice of strike to include Ambas' dismissal.

Both parties again discussed the ground rules for the CBA renegotiation. However, petitioner stopped the
negotiations after it purportedly received information that a new group of employees had filed a petition
for certification election

Public respondent the Secretary of Labor and Employment assumed jurisdiction and ordered all striking
employees including the union president to return to work and for petitioner to accept them back under
the same terms and conditions before the actual strike. Petitioner readmitted the striking members except
Ambas.

Public respondent issued an order declaring petitioner guilty of unfair labor practice.

Issue/s: (1) whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when
it unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon
mere information that a petition for certification has been filed by another legitimate labor organization?
(2) whether the termination of the union president amounts to an interference of the employees' right to
self-organization?

Held:

The petition is without merit.

As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty to
bargain collectively.

Article 252 states that both parties of the performance of the mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement. Undoubtedly,
respondent union lived up to this requisite when it presented its proposals for the CBA to petitioner. On
the other hand, petitioner devised ways and means in order to prevent the negotiation.

Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply
to the proposals presented by the latter. More than a month after the proposals were submitted by the
union, petitioner still had not made any counter-proposals. This is a clear violation of Article 250 of the
Labor Code governing the procedure in collective bargaining.

Moreover, it was shown that petitioner's resort to delaying tactics to ensure that negotiation would not
push through.

In order to allow the employer to validly suspend the bargaining process there must be a valid petition for
certification election raising a legitimate representation issue. Hence, the mere filing of a petition for
certification election does not ipso facto justify the suspension of negotiation by the employer. The petition
must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost is that a
petition for certification election must be filed during the sixty-day freedom period. The "Contract Bar
Rule" provides that: " . 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." No petition for certification
election for any representation issue may be filed after the lapse of the sixty-day freedom period. The old
CBA is extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the
CBA the law still considers the same as continuing in force and effect until a new CBA shall have been
validly executed.9 Hence, the contract bar rule still applies.10

In the case at bar, the lifetime of the previous CBA was from 1989-1994.1wphi1 The petition for
certification election by ACEC, allegedly a legitimate labor organization, was filed only on May 26, 1996.
Clearly, the petition was filed outside the sixty-day freedom period. Hence, the filing thereof was barred
by the existence of a valid and existing collective bargaining agreement. Consequently, there is no
legitimate representation issue and, as such, the filing of the petition for certification election did not
constitute a bar to the ongoing negotiation.

In view of the above, there is no doubt that petitioner is guilty of unfair labor practice by its stern refusal to
bargain in good faith with respondent union.

Concerning the issue on the validity of the termination of the union president, we hold that the dismissal
was effected in violation of the employees' right to self-organization.

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.

Facts:

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.

SO ORDERED.

G.R. No. L-14689 July 26, 1960

GENERAL MARITIME STEVEDORES' UNION OF THE PHILIPPINES, ET AL., petitioners,

vs.
SOUTH SEA SHIPPING LINE, ET AL., respondents.

Felix S. Falgui for petitioners.

Antonio T. Tirona for CIR.
Carlos E. Santiago for respondent Union.
German G. Lee for respondent Shipping Line.

MONTEMAYOR, J.:

This is a petition for certiorari to review an order the Court of Industrial Relations (CIR), dated September
23, 1958, dismissing the petition for certification election filed by the General Maritime Stevedores' Union,
later referred to as GMSU, and its co-petitioners, as well as the order of the court en banc denying the
motion for re-consideration. The purpose of the petition to review is set aside the order of dismissal and to
give due course to GMSU petition for certification election.

Acting on a petition dated October 23, 1953 of the United Seamen's Union of the Philippines, later
referred to as USUP, in case No. 43-MC, the CIR issued an order dated February 28, 1955, directing that
an election be held among the unlicensed members and crew of the respondent South Sea Shipping
Lines, later referred to as Shipping Lines. In said order, the USUP and GMSU were considered eligible to
be voted for. The certification election was held on April 15 and June 10, 1955, after which the CIR issued
another order dated June 17, 1955, certifying USUP as the exclusive bargaining representative of the
laborers and employees of the Shipping Lines. On June 28, 1957, a collective bargaining agreement was
entered into between the Shipping Line and the USUP. Art. 10 of the agreement provided as follows:

This Agreement shall take effect on July 21, 1957, to continue in full force and effect for two (2)
years until July 20, 1959 and thereafter for another period of two (2) years, unless either party
shall notify the other in writing not less than sixty (60) days prior to the expiration date hereof of
its intention or election to terminate the agreement as of the end of the current term.

GMSU insists that the agreement entered into was but a renewal of an agreement between the USUP
and Shipping Line entered into sometime in 1955. This statement seems to have been confirmed by the
Shipping Line in its answer where it stated that "after the above-mentioned order (referring to the order
dated June 17, 1955) or to be specific, on June 28, 1955, a collective bargaining agreement. ... entered
into between the respondent."

On April 30, 1958, that is a little more than two years after the holding of the last certification election,
GMSU and its co-petitioners filed with the CIR a petition for certification election, Case No. 546-MC, later
numbered as Case No. 547-MC, alleging that there were two labor unions, to which were unlicensed crew
members of the Shipping Line, namely, the GMSU and the USUP; that as members of the GMSU
petitioners constituted 10% of all the unlicensed crew members of the Shipping Line; and that there had
not been a certification election within twelve months before the filing of the petition.

The Shipping Line in its answer, expressed its attitude of strict neutrality and its willingness to abide by
the order of the CIR although in its amended answer, it also alleged that it considered the existing
collective bargaining agreement between itself and the USUP as binding until annulled.

The USUP intervened and filed a motion for dismissal of the petition claiming that there was an existing
collective bargaining agreement between itself and the Shipping Line entered on June 28, 1957, for a
period of two years up to July 26, 1959, which period was reasonable, and which agreement contained
reasonable conditions of employment, and that the existence of such agreement barred another
certification election. As already stated, the CIR granted the motion to dismiss and refused to give due
course to the GMSU's petition for certification election.

To support its order, the CIR invoked the "contract-bar rule", explaining that the then existing contract
between the Shipping Line and the USUP, which was for a period of two years, up to July 20, 1959,
contained provisions regarding wages, closed shops, check off, grievances, machinery and other
conditions regarding employment relationships. According to the CIR, these circumstances plus the fact
that there was no showing that the contracting union was company dominated support the validity and
reasonableness of the agreement between the Shipping Line and the USUP, the duly certified bargaining
representative, and that the existence of such contract barred the holding of a certification election. The
CIR further stated:

The "contract-bar rule" is procedural which this Court in its discretion may apply or waive as the
facts of any given case may demand in the interest of stability and fairness in collective
bargaining agreements. (Case No. 54 MC-Cebu, PCLUE, vs. Caltex, June 25, 1957). the facts of
the present case considered,, it is the opinion of this Court that the policies of the Industrial Peace
Act of promoting stable, sound employer-employee relations is effectuated by collective
bargaining agreement of reasonable duration. The contract between the intervenor and the
company falls under this criterion.

The GMSU, however, equally maintains that it is mandatory for the CIR to order a certification election
once a petition is signed and submitted by at least 10% of all the workers in a bargaining unit; and it is
also shown that no certification election had been held within twelve months prior to the filing of such
petition pursuant to the provisions of Section 12 (b) and (c), Republic Act No. 875, the pertinent portions
of which read:

(b) Whenever a question arising concerning the representation of employees, the Court may
investigate such controversy and certify to the parties in writing the name of the labor
organization that has been designated or selected for the appropriate bargaining unit. ... Such a
balloting shall be known as "certification election" and the Court shall not order certifications in
the same unit more often than once intwelve months. The organization receiving the majority
votes casts in such election shall be certified as the exclusive bargaining representative of such
employees.

(c) In an instance where a petition is filed by at least ten percent of the employees in the
appropriate unit requesting an election, it shall be mandatory on the Court to order an election for
the purpose of determining the representative of the employees for the appropriate bargaining
unit.

The GMSU has expressed fear that if a certification election was not held as per its petition, the
agreement between the respondent under its renewal clause, may again be renewed with or without
modification by the parties as a result of which, the existence of the contract as renewed may again be
utilized as an argument for barring a subsequent petition for certification election, thereby completely
depriving petitioners of the right and opportunity to prove that they constituted the majority of the workers
and employees of the Shipping Line.

What is meant by the "Contract-Bar Policy"? When ever a substantial number of employees in an
appropriate bargaining agreement desires to be represented by a union or organization other than that
which had negotiated a collective bargaining contract with the management, the CIR is faced with the
dilemma of the right of contract or the right of representation:

Whenever a contract is urged as a bar, the Board is faced with the problem of balancing two
separate interests of employees and society which the act was designated to protect; the interest
in such stability is as essential to encourage the effective collective bargaining, and the
sometimes conflicting interest in the freedom of employees to select and change their
representatives. In furtherance of the purpose of the act, we have repeatedly held that employees
are entitled to change their representatives, if they so desire, at reasonable intervals, or
controversy, that a collective bargaining contract may preclude a determination of representatives
for a reasonable period. (Reed Roller Bit Co., 72 NLRD 927).

It sometimes occurs that representation petitions are brought when a bargaining contract already
exists. There is then a question of whether the Board shall respect the contract and let it
constitute a bar or institute proceedings despite the contract. (Bowman, Public Control of Labor
Relations, p. 135.)

As a solution to this problem, there are three possibilities:

One solution of the problem would be to hold that a collective bargaining agreement valid when
made is a bar to a new certification throughout its existence, regardless of the length of its term. .
..

A second solution is to hold that employees may shift their allegiance during the term of the
agreement but that the contract continues in force with the new union simply replacing the old. . .
.

The solution to the problem which the National Labor-Relations Board has adopted lies between
the extremes: "The board has normally refused to proceed to an election, in the presence of a
collective bargaining contract where the contract granted exclusive recognition is to be effective
only for a reasonable period and was negotiated by a union representing at the time a majority of
the employees (in an appropriate unit) prior to any claim by a rival labor organization". (Cox,
Cases on Labor Law, pp. 497-498).

The National Labor Relations Board, later referred to as the Board, which is the counterpart of our CIR,
regards the conflict as one which requires it to strike a balance between the desirability of achieving
stability in industrial relations secured through bargaining, on the one hand, and the benefits flowing from
the grant to employee full freedom in their choice of representative, on the other.

But the conflict implicit in the situation is so clear that the Board has recognized the necessity for
some solution. While it is apparent that the board will not allow the existence of an agreement to
preclude all change, on the other hand has not suggested absolute abrogation of the contract. (51
Yale Law Journal p. 470, Change of Bargaining Representative).

In resolving this conflict, the Board "initially took the unqualified view that the existence of agreements
was no bar to certification of bargaining representatives." (Teller, Labor Disputes and Collective
Bargaining, Vol. 2, p. 901). So, in the Matter of New England Transportation Co. (1936) 1 NLRB 130, the
Board directed an election despite existing contracts between the company and an employees'
association:
 The whole process of collective bargaining and unrestricted choice of representatives assumes
the freedom of the employees to change their representatives, while at the same time continuing
the existing agreements under which the representatives must function. ... These representatives
are, of course, free to bargain with respect to the termination of an existing contract.

The above ruling gave support to the doctrine of substitution whereby a change of representatives would
alter an existing contract only by "substituting the new union for the old under its substantive terms" (51
Yale Law Journal, Change of Bargaining Representatives, p. 466). However, the Board subsequently
took the position that a collective bargaining agreement of reasonable duration is "in the interest of the
stability of industrial relations", a bar to certification elections. (Vol. 2, Teller, Labor Disputes and
Collective Bargaining, p. 902). Thus, evolved the "contract-bar policy".

In adopting the "contract-bar policy", the Board, however, was careful in refusing to announce an
inflexible rule as to its authority, and whenever possible, it avoided a determination of the contract's effect
on its power of certification election:

. . . Again the Board is bounded by no stereotyped procedure; rather, the Board exercises
discretion to let the circumstances determine whether proceedings shall go on. . . .

This Board action was not charted by Congress, but the dilemma of right of contract or right of
representation is real. The resolution of the dilemma is not to decide whether the primary purpose
of the Act is to insure employee freedom to choose representatives, or to encourage collective
contracts, for either choice leaves an unsatisfactory situation. Hence the Board's compromise
seems wise, even though it is in a sense contradictory. Such Board flexibility and the refusal to
draw sharp rules open the door to criticism, but the dilemma demonstrated the necessity of giving
broad discretionary power to an administrative agency. (Public Control of Labor Relations,
Bowman, p. 135, 137).

The United States Circuit Court of Appeals, recognizing the Board's power to promulgate rules and
regulations to carry out the purpose of the Act, gave the Board broad discretion to apply the "contract-bar
policy", as it saw fit, thus:

The Board's rule that the existence of a valid written and signed bargaining agreement between
an employer and an appropriate bargaining representative is a bar to a certification proceedings
for a different representation, if applicable to the facts in this case, is a procedural rule which the
Board in its discretion may apply or waive as the facts of the given case may demand in the
interest of stability and fairness in collective bargaining agreements. The Board is not the slave of
its rules." National Labor Relations Boardvs. Grace Co. 184 Fed. 2nd p. 126 (U. S. Circuit Ct. of
App., 8th Circuit.)

Where "contract bar policy" of National Labor Relations Board, along with exceptions thereto, as
applicable to representation proceedings, were solely of board's creation, board could reasonably
expand or restrict such policy as it saw fit. (Syllabus) Kearney & Treacker Corp. vs. National
Labor Relations Board, 210 Fed. 2nd p. 852 (U.S. Circuit Ct. of App., 7th Circuit)

During the period "when the techniques and potentialities of collective bargaining were first being slowly
developed under the encouragement and protection of Federal Legislation", the Board laid greater
emphasis upon the right of laborers to select their respective frequently than upon prolonged adherence
to the bargaining agreement. (General Motors Corporation, 102 NLRB 1140). As a result, when the
contract-bar policy was first initiated, only one-year contracts were held to be a bar to certification
election. (e.g., M & J Tracy, Inc. 12 NLRB 936 (1939); Columbia Broadcasting System, Inc. 8 NLRB 508
(1938) Hubinger Company, 3 NLRB 802)
 The net result of the Broad's viewpoint that collective bargaining agreements of reasonable
duration will constitute a bar to certification, but that agreements unduly long which have been in
effect for at least a year will not constitute a bar is, when read in connection with the cases,
equivalent to the rule that collective bargaining agreements prevent proceedings for a period of
one year from the time of their execution. (2 Teller, Labor Disputes and Collective Bargaining, p.
905).

Thus, in the case of Superior Electric Products Co., NLRB (1948), the collective bargaining agreement of
one year duration entered into at the time when the contracting union represented a majority of the
respondent-employees was held to be a bar to certification election. And in the Metro Goldwyn Mayer
case, 7 NLRB 662, involving collective bargaining agreement of five years duration, the Board granted the
petition for election filed after the agreement had run one year with a reiteration of its belief that
employees' "choice of their representatives could not be shackled for an unduly long period just because
of the existence of a contract." However, in 1947, the Board held that thereafter, it would regard a two
year contract as a bar to an election until its expiration, because collective bargaining had:

So emerged from a stage of trial and error (that) the time has come when stability of industrial
relations can better be served, without unreasonably restricting employees in their right to change
representatives, by refusing to interfere with bargaining relations secured by collective
agreements for two years' duration. (Matter of Reed Roller Bit Co. 72 NLRB 927 (1947).

In the light of our experience in administering the Act, we believe that a contract for a term of 2
years cannot be said to be of unreasonable duration. ... For large masses of employees collective
bargaining has but recently emerged from a stage of trial and error, during which its techniques
and full potentialities were being slowly developed under the encouragement and protection of
the Act. To have insisted in the past upon prolonged adherence to a bargaining agent, once
chosen, would have been wholly incompatible with this experimental and transitional period. It
was especially necessary, therefore to lay emphasis upon the right of workers to select and
change their representatives. Now, however, the emphasis can better be placed elsewhere.

HOWEVER, in 1953, the same Board announced that:

The time has arrived when stability of labor relations can be better served, without unreasonably
restricting employees in their right to change representatives, by holding as a bar collective
bargaining agreements even for 5 years' duration (when) a substantial part of the industry
concerned is covered by contracts with a similar term.

In the case of General Motors Corporation, 102 NLRB 1140 (1953), involving a five years contract, the
Board refused to order a certification election despite the lapse of more than 2 1/2 years since the
agreement became effective. From all this, it may be seen that the National Labor Relations Board has
not adopted an iron-clad policy, rigid and fixed, but rather one to be applied according to the changing
conditions and industrial practices.

In this jurisdiction, we have had occasion to apply the "contract-bar policy". In the case of Philippine Long
Distance Employees' Union vs. PLDT and Free Telephone Workers Union, 97 Phil., 424; 51 Off. Gaz. [9]
4519, through Mr. Justice Bengzon, we made the following observation:

It is interesting to note in this regard that in the United States, where we copied the present
Industrial Peace Act, an existing collective bargaining contract with a union is a bar to subsequent
certification election when ... it has a definite and reasonable period to run and has not been in
existence for too long a period (history, industry and customs may affect reasonableness of the
contract term ... . (Werne Law of Labor Relations, p. 27 citing U.S. Finishing Co. 63 NLRB 575).
Normally, the National Labor Relations Board have been in existence for more than years, as no
 obstacle to determining bargaining representatives. (Werne op cit. pp. 28-29, citing several
cases.)

. . . as this contract between the Company and the petitioner was signed December 1, 1951, it
had been in operation more than two years in August, 1954 when the certification election was
ordered. It is therefore no bar to the certification even under American Labor Laws.

In a subsequent case, Acoje Mines and Acoje United Workers Union vs. Acoje Labor Union and Acoje
Mining Co. Inc., 105 Phil., 814; 56 Off. Gaz. (6) 1157, on the issue of whether or not upon submission of a
petition for certification election by at least 10% of all the workers in a bargaining union, it is mandatory for
the CIR to order a certification election with no exceptions, pursuant to Section 12 (c), Republic Act
No. 875, through the same Justice, we made the following statement:

The above command of the Court is not so absolute as it may appear at first glance. The statute
itself expressly recognizes one exception: When a certification election had occured within one
year. And the judicial administrative agencies have found two exceptions: where there is an
unexpired bargaining agreement not exceeding two years and when there is a pending charge of
company domination of one of the labor unions intending to participate in the election.

After reviewing the cases decided by the NLRB of the United States and our cases, we have arrived at
the conclusion that it is reasonable and proper that when there is a bargaining contract for more than a
year, it is too early to hold a certification election within a year from the effectivity of said bargaining
agreement; also that a two year bargaining contract is not too long for the purpose of barring a
certification election. For this purpose, a bargaining agreement may run for three, even four years, but in
such case, it is equally advisable that to decide whether or not within those three or four years, a
certification election should not be held, may well be left to the sound discretion of the CIR, considering
the conditions involved in the case, particularly, the terms and conditions of the bargaining contract.

We also hold that where the bargaining contract is to run for more than two years, the principle of
substitution may well be adopted and enforced by the CIR to the effect that after two years of the life of
bargaining agreement, a certification election may be allowed by the CIR; that if a bargaining agent other
than the union or organization that executed the contract, is elected, said new agent would have to
respect said contract, but that it may bargain with the management for the shortening of the life of the
contract if it considers it too long, or refuse to renew the contract pursuant to an automatic renewal
clause.

On September 15, 1959, while this case was still pending in this Tribunal, petitioner filed a manifestation
to the effect that the contract between the USUP and the Shipping Line had expired on June 28, 1959,
and that the same had not been renewed. We asked for the comment of the other party. the respondent
United Seamen's Union in its counter manifestation dated July 6, 1960, stated that the collective
bargaining agreement involved, executed on July 28, 1957, was automatically renewed for a period of two
years from July 28, 1959 to July 28 1961, pursuant to the automatic renewal clause, for the reason that
neither party notified the other in writing not less than sixty days prior to the expiration date, of its desire
to terminate the agreement. So, it would appear that the contract will still be effective up to July 28, 1961,
that is to say, about a year from today.

According to the claim or contention of the petitioners the bargaining agreement of July 28, 1957 was but
a renewal of the same or similar agreement of July 1955, so that the bargaining agreement has been in
existence for about five years, which is too long a period within which a certification election has not been
held.

In view of the foregoing, we believe and hold that the appealed order of the CIR dismissing the petition for
certification election and refusing to allow the selection of a new bargaining agent, was valid under the
circumstances obtaining at the time. However, inasmuch as there has been a renewal of the bargaining
agreement for another two years and because it seems that the present agreement is but a renewal of
the one entered into way back in 1955, so that until the expiration of the present agreement, about six
years shall have passed, it is advisable that a new certification election be held. For this purpose, this
case is hereby remanded to the CIR, so that the petition for certification can be entertained, admitted and
given due course, and that a certification election be held, with the understanding that if a bargaining
agent other tan the one that negotiated and executed the present bargaining contract, is elected, said
new agent would have to respect the present bargaining agreement, but without prejudice to its
negotiating with the company for a shortening of the period of the life of the contract, refuse to renew it
when it expires, if it so desires, and otherwise represent and protect the interest of the members of the
bargaining unit, all of course, within the terms and purview of the bargaining contract. No costs.

Collective Bargaining Agreement

G.R. No. 140960 January 20, 2003

LUDO & LUYM CORPORATION, petitioner,

vs.
FERDINAND SAORNIDO as voluntary arbitrator and LUDO EMPLOYEES UNION (LEU)
representing 214 of its officers and members, respondents.

QUISUMBING, J.:

This petition for review on certiorari seeks to annul and set aside the decision1 of the Court of Appeals
promulgated on July 6, 1999 and its Order denying petitioners motion for reconsideration in CA-G.R. SP
No. 44341.

The relevant facts as substantially recited by the Court of Appeals in its decision are as follows:

Petitioner LUDO & LUYM CORPORATION (LUDO for brevity) is a domestic corporation engaged in the
manufacture of coconut oil, corn starch, glucose and related products. It operates a manufacturing plant
located at Tupas Street, Cebu City and a wharf where raw materials and finished products are shipped
out.

In the course of its business operations, LUDO engaged the arrastre services of Cresencio Lu Arrastre
Services (CLAS) for the loading and unloading of its finished products at the wharf. Accordingly, several
arrastre workers were deployed by CLAS to perform the services needed by LUDO.

These arrastre workers were subsequently hired, on different dates, as regular rank-and-file employees of
LUDO every time the latter needed additional manpower services. Said employees thereafter joined
respondent union, the LUDO Employees Union (LEU), which acted as the exclusive bargaining agent of
the rank-and-file employees.

On April 13, 1992, respondent union entered into a collective bargaining agreement with LUDO which
provides certain benefits to the employees, the amount of which vary according to the length of service
rendered by the availing employee.

Thereafter, the union requested LUDO to include in its members period of service the time during which
they rendered arrastre services to LUDO through the CLAS so that they could get higher benefits. LUDO
failed to act on the request. Thus, the matter was submitted for voluntary arbitration.
The parties accordingly executed a submission agreement raising the sole issue of the date of
regularization of the workers for resolution by the Voluntary Arbitrator.

In its decision dated April 18, 1997, the Voluntary Arbitrator ruled that: (1) the respondent employees
were engaged in activities necessary and desirable to the business of petitioner, and (2) CLAS is a labor-
only contractor of petitioner.2 It disposed of the case thus:

WHEREFORE, in view of the foregoing, this Voluntary Arbitrator finds the claims of the
complainants meritorious and so hold that:

a. the 214 complainants, as listed in the Annex A, shall be considered regular employees
of the respondents six (6) months from the first day of service at CLAS;

b. the said complainants, being entitled to the CBA benefits during the regular
employment, are awarded a) sick leave, b) vacation leave & c) annual wage and salary
increases during such period in the amount of FIVE MILLION SEVEN HUNDRED
SEVEN THOUSAND TWO HUNDRED SIXTY ONE PESOS AND SIXTY ONE
CENTAVOS (P5,707,261.61) as computed in "Annex A";

c. the respondents shall pay attorneys fees of ten (10) percent of the total award;

d. an interest of twelve (12) percent per annum or one (1) percent per month shall be
imposed to the award from the date of promulgation until fully paid if only to speed up the
payment of these long over due CBA benefits deprived of the complaining workers.

Accordingly, all separation and/or retirement benefits shall be construed from the date of
regularization aforementioned subject only to the appropriate government laws and other social
legislation.

SO ORDERED.3

In due time, LUDO filed a motion for reconsideration, which was denied. On appeal, the Court of Appeals
affirmed in toto the decision of the Voluntary Arbitrator, thus:

WHEREFORE, finding no reversible error committed by respondent voluntary arbitrator, the

instant petition is hereby DISMISSED.

SO ORDERED.4

Hence this petition. Before us, petitioner raises the following issues:

WHETHER OR NOT BENEFITS CONSISTING OF SALARY INCREASES, VACATION LEAVE

AND SICK LEAVE BENEFITS FOR THE YEARS 1977 TO 1987 ARE ALREADY BARRED BY
PRESCRIPTION WHEN PRIVATE RESPONDENTS FILED THEIR CASE IN JANUARY 1995;

II

WHETHER OR NOT A VOLUNTARY ARBITRATOR CAN AWARD BENEFITS NOT CLAIMED

IN THE SUBMISSION AGREEMENT.5
Petitioner contends that the appellate court gravely erred when it upheld the award of benefits which were
beyond the terms of submission agreement. Petitioner asserts that the arbitrator must confine its
adjudication to those issues submitted by the parties for arbitration, which in this case is the sole issue of
the date of regularization of the workers. Hence, the award of benefits by the arbitrator was done in
excess of jurisdiction.6

Respondents, for their part, aver that the three-year prescriptive period is reckoned only from the time the
obligor declares his refusal to comply with his obligation in clear and unequivocal terms. In this case,
respondents maintain that LUDO merely promised to review the company records in response to
respondents demand for adjustment in the date of their regularization without making a categorical
statement of refusal.7 On the matter of the benefits, respondents argue that the arbitrator is empowered to
award the assailed benefits because notwithstanding the sole issue of the date of regularization, standard
companion issues on reliefs and remedies are deemed incorporated. Otherwise, the whole arbitration
process would be rendered purely academic and the law creating it inutile. 8

The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators and Labor Arbiters is clearly
defined and specifically delineated in the Labor Code. The pertinent provisions of the Labor Code, read:

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 wage, 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;

xxx

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."

In construing the above provisions, we held in San Jose vs. NLRC, 9 that the jurisdiction of the Labor
Arbiter and the Voluntary Arbitrator or Panel of Voluntary Arbitrators over the cases enumerated in the
Labor Code, Articles 217, 261 and 262, can possibly include money claims in one form or
another.10 Comparatively, in Reformist Union of R.B. Liner, Inc. vs. NLRC,11 compulsory arbitration has
been defined both as "the process of settlement of labor disputes by a government agency which has the
authority to investigate and to make an award which is binding on all the parties, and as a mode of
arbitration where the parties are compelled to accept the resolution of their dispute through arbitration by
a third party (emphasis supplied)."12 While a voluntary arbitrator is not part of the governmental unit or
labor departments personnel, said arbitrator renders arbitration services provided for under labor laws.

Generally, the arbitrator is expected to decide only those questions expressly delineated by the
submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to
make a final settlement since arbitration is the final resort for the adjudication of disputes. 13 The succinct
reasoning enunciated by the CA in support of its holding, that the Voluntary Arbitrator in a labor
controversy has jurisdiction to render the questioned arbitral awards, deserves our concurrence, thus:

In general, the arbitrator is expected to decide those questions expressly stated and limited in the
submission agreement. However, since arbitration is the final resort for the adjudication of
disputes, the arbitrator can assume that he has the power to make a final settlement. Thus,
assuming that the submission empowers the arbitrator to decide whether an employee was
discharged for just cause, the arbitrator in this instance can reasonable assume that his powers
extended beyond giving a yes-or-no answer and included the power to reinstate him with or
without back pay.

In one case, the Supreme Court stressed that "xxx the Voluntary Arbitrator had plenary
jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his
own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. The
Arbitrator, as already indicated, viewed his authority as embracing not merely the determination
of the abstract question of whether or not a performance bonus was to be granted but also, in the
affirmative case, the amount thereof.

By the same token, the issue of regularization should be viewed as two-tiered issue. While the
submission agreement mentioned only the determination of the date or regularization, law and
jurisprudence give the voluntary arbitrator enough leeway of authority as well as adequate
prerogative to accomplish the reason for which the law on voluntary arbitration was created
speedy labor justice. It bears stressing that the underlying reason why this case arose is to settle,
once and for all, the ultimate question of whether respondent employees are entitled to higher
benefits. To require them to file another action for payment of such benefits would certainly
undermine labor proceedings and contravene the constitutional mandate providing full protection
to labor.14

As regards petitioners contention that the money claim in this case is barred by prescription, we hold that
this contention is without merit. So is petitioners stance that the benefits claimed by the respondents, i.e.,
sick leave, vacation leave and 13th-month pay, had already prescribed, considering the three-year period
for the institution of monetary claims.15 Such determination is a question of fact which must be
ascertained based on the evidence, both oral and documentary, presented by the parties before the
Voluntary Arbitrator. In this case, the Voluntary Arbitrator found that prescription has not as yet set in to
bar the respondents claims for the monetary benefits awarded to them. Basic is the rule that findings of
fact of administrative and quasi-judicial bodies, which have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only great respect but even finality.16 Here, the
Voluntary Arbitrator received the evidence of the parties first-hand. No compelling reason has been
shown for us to diverge from the findings of the Voluntary Arbitrator, especially since the appellate court
affirmed his findings, that it took some time for respondent employees to ventilate their claims because of
the repeated assurances made by the petitioner that it would review the company records and determine
therefrom the validity of the claims, without expressing a categorical denial of their claims. As elucidated
by the Voluntary Arbitrator:

The respondents had raised prescription as defense. The controlling law, as ruled by the High
Court, is:

"The cause of action accrues until the party obligated refuses xxx to comply with his duty. Being
warded off by promises, the workers not having decided to assert [their] right[s], [their] causes of
action had not accrued" (Citation omitted.)

Since the parties had continued their negotiations even after the matter was raised before the
Grievance Procedure and the voluntary arbitration, the respondents had not refused to comply
with their duty. They just wanted the complainants to present some proofs. The complainants
cause of action had not therefore accrued yet. Besides, in the earlier voluntary arbitration case
aforementioned involving exactly the same issue and employees similarly situated as the
complainants, the same defense was raised and dismissed by Honorable Thelma Jordan,
Voluntary Arbitrator.

In fact, the respondents promised to correct their length of service and grant them the back CBA
benefits if the complainants can prove they are entitled rendered the former in estoppel, barring
them from raising the defense of laches or prescription. To hold otherwise amounts to rewarding
the respondents for their duplicitous representation and abet them in a dishonest scheme against
their workers.17

Indeed, as the Court of Appeals concluded, under the equitable principle of estoppel, it will be the height
of injustice if we will brush aside the employees claims on a mere technicality, especially when it is
petitioners own action that prevented them from interposing the claims within the prescribed period.

WHEREFORE, the petition is denied. The appealed decision of the Court of Appeals in CA-G.R. SP No.
44341 and the resolution denying petitioners motion for reconsideration, are AFFIRMED. Costs against
petitioner.

SO ORDERED.

G.R. No. 113907 February 28, 2000

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP, petitioners,

vs.
HON. CRESENCIO J. RAMOS, respondents.

Facts:

The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B) (MSMG), is a local
union and an affiliate of the private respondent federation, United Lumber and General Workers of the
Philippines (ULGWP). The collective bargaining agreement between MSMG and M. Greenfield, Inc.,
names the parties as follows:

This agreement made and entered into by and between M. GREENFIELD, INC. (B) and
 MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (B) (MSMG)/UNITED
LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (ULGWP), a legitimate labor
organization

The CBA includes the pertinent provisions:

Art. II-Union Security

Sec. 4. Dismissal. Any such employee who fails to maintain his membership in the UNION for
non-payment of UNION dues, for resignation and for violation of UNION's Constitution and By-
Laws and any new employee shall upon written notice of such failure to join or to maintain
membership in the UNION and upon written recommendation to the COMPANY by the UNION,
be dismissed from the employment by the COMPANY; provided, however, that the UNION shall
hold the COMPANY free and blameless from any and all liabilities that may arise should the
dismissed employee question, in any manner, his dismissal; provided, further that the matter of
the employee's dismissal under this Article may be submitted as a grievance and provided,
finally, that no such written recommendation shall be made upon the COMPANY nor shall
COMPANY be compelled to act upon any such recommendation within the period of sixty (60)
days prior to the expiry date of this Agreement conformably to law.

On September 1986, a local union election was held under the auspices of the ULGWP wherein the
herein petitioner, Beda Magdalena Villanueva, and the other union officers were proclaimed as winners.

On March 1987, a Petition for Impeachment was filed with the national federation ULGWP by the
defeated candidates in the aforementioned election.

On June 1987, the federation conducted an audit of the local union funds. The investigation did not yield
any unfavorable result and the local union officers were cleared of the charges of anomaly in the custody,
handling and disposition of the union funds.1wphi1.nt

The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local union officers with the
DOLE. However, the same was dismissed by Med-Arbiter Renato Parungo for failure to substantiate the
charges and to present evidence in support of the allegations.

On April 17, 1988, the local union held a general membership meeting. Several union members failed to
attend the meeting, prompting the Executive Board to create a committee tasked to investigate the non-
attendance of several union members in the said assembly, pursuant to the Constitution and By-Laws of
the union, which read:

Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng hakbangin ng unyon
ng sinumang kasapi o pinuno ay maaaring maging sanhi ng pagtitiwalag o pagpapataw ng multa
sa bawat araw na nagkulang.

Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong ay ituturing na
pagliban at maparusahan. Sino mang kasapi o pisyales na mahuli and dating sa takdang oras ng
di lalampas sa isang oras ay magmumulta ng P25.00 at babawasin sa sahod sa pamamagitan ng
salary deduction at higit sa isang oras ng pagdating ng huli ay ituturing na pagliban. 3

On June 1988, the local union wrote respondent company a letter requesting it to deduct the union fines
from the wages/salaries of those union members who failed to attend the general membership meeting.
In a Memorandum dated July 1988, the Secretary General of the national federation, Godofredo Paceo,
Jr. disapproved the resolution of the local union imposing fine. The union officers protested such action by
the Federation.

On July 11, 1988, the Federation wrote respondent company a letter advising the latter not to deduct the
fine from the salaries of the union members requesting that:

. . . any and all future representations by MSMG affecting a number of members be first cleared
from the federation before corresponding action by the Company.5

The following day, respondent company sent a reply to petitioner stating that it cannot deduct fines from
the employees' salary without going against certain laws. The company suggested that the union refer the
matter to the proper government office for resolution in order to avoid placing the company in the middle
of the issue.

The imposition of a fine became the subject of bitter disagreement between the Federation and the local
union culminating in the latter's declaration of general autonomy from the former.

In retaliation, the national federation asked respondent company to stop the remittance of the local
union's share in the education funds. This was objected to by the local union.

Meanwhile, on September 1988, several local unions (Top Form, M. Greenfield, Grosby, Triumph
International, General Milling, and Vander Hons chapters) filed a Petition for Audit and Examination of the
federation and education funds of ULGWP which was granted by Med-Arbiter.

On September 1988, the officials of ULGWP called a Special National Executive Board Meeting where a
Resolution was passed placing the MSMG under trusteeship and appointing respondent Cesar Clarete as
administrator.

On October 27, 1988, the said administrator wrote the respondent company informing the latter of its
designation of a certain Alfredo Kalingking as local union president and "disauthorizing" the incumbent
union officers from representing the employees which was protested by the petitioners.

The petitioner union officers received identical letters from the administrator requiring them to explain
within 72 hours why they should not be removed from their office and expelled from union membership.

On November 26, 1988 they replied but prior to such date, the officers were expelled from the federation.

On the same day, the federation advised respondent company of the expulsion of the 30 union officers
and demanded their separation from employment pursuant to the Union Security Clause in their collective
bargaining agreement.

Thereafter, the Federation filed a Notice of Strike to compel the company to effect the immediate
termination of the expelled union officers.

Under the pressure of a threatened strike, respondent company terminated the 30 union officers from
employment.

On that same day, the expelled union officers assigned in the first shift were physically or bodily brought
out of the company premises by the company's security guards. Likewise, those assigned to the second
shift were not allowed to report for work. This provoked some of the members of the local union to
demonstrate their protest for the dismissal of the said union officers. Some union members left their work
posts and walked out of the company premises.
On the other hand, the Federation, having achieved its objective, withdrew the Notice of Strike.

On March 8, 1989, the petitioners filed a Notice of Strike alleging the following grounds for the strike:

(a) Discrimination

(b) Interference in union activities

(c) Mass dismissal of union officers and shop stewards

(d) Threats, coercion and intimidation

(e) Union busting

The thirty (30) dismissed union officers filed an urgent petition, with the Office of the Secretary of the
DOLE praying for the suspension of the effects of their termination from employment. However, the
petition was dismissed by then Secretary.

On March 13 and 14, 1989, a total of 78 union shop stewards were placed under preventive suspension
by respondent company. This prompted the union members to again stage a walk-out and resulted in the
official declaration of strike. The strike was attended with violence, force and intimidation on both sides
resulting to physical injuries to several employees, both striking and non-striking, and damage to
company properties.

The employees who participated in the strike and allegedly figured in the violent incident were placed
under preventive suspension by respondent company. The company also sent return-to-work notices to
the home addresses of the striking employees thrice successively. However, respondent company
admitted that only 261 employees were eventually accepted back to work. Those who did not respond to
the return-to-work notice were sent termination letters.

On August 1989, the petitioners filed a verified complaint with the Arbitration Branch of DOLE, charging
private respondents of unfair labor practice which consists of union busting, illegal dismissal, illegal
suspension, interference in union activities, discrimination, threats, intimidation, coercion, violence, and
oppression.

After the filing of the complaint, the lease contracts on the respondent company's office and factory
expired and were not renewed.

Thereafter, the company transferred its administration and account/client servicing department. For failure
to find a suitable place for relocation of its factory and manufacturing operations, the company was
constrained to move the said departments to Tacloban, Leyte. Hence, on April 16, 1990, respondent
company accordingly notified its employees of a temporary shutdown in operations. Employees who were
interested in relocating to Tacloban were advised to enlist on or before April 23, 1990.

Finding the termination to be valid in compliance with the union security clause of the collective
bargaining agreement, Labor Arbiter Cresencio Ramos dismissed the complaint.

Petitioners then appealed to the NLRC.

The First Division affirmed the Labor Arbiter's disposition. With the denial of their motion for
reconsideration, petitioners elevated the case to this Court, attributing grave abuse of discretion to public
respondent NLRC.
 .

Issue of whether or not respondent company was justified in dismissing petitioner employees merely
upon the labor federation's demand for the enforcement of the union security clause embodied in their
collective bargaining agreement.

Held:

The court finds that the Complaint for unfair labor practice filed by the petitioners against respondent
company which charges union busting, illegal dismissal, illegal suspension, interference in union
activities, discrimination, threats, intimidation, coercion, violence, and oppression actually proceeds from
one main issue which is the termination of several employees by respondent company upon the demand
of the labor federation pursuant to the union security clause embodied in their collective bargaining
agreement.

This ruling of the NLRC is erroneous. Although this Court has ruled that union security clauses embodied
in the collective bargaining agreement may be validly enforced and that dismissals pursuant thereto may
likewise be valid, this does not erode the fundamental requirement of due process. The reason behind the
enforcement of union security clauses which is the sanctity and inviolability of contracts 14 cannot override
one's right to due process.

In the case under scrutiny, petitioner union officers were expelled by the federation for allegedly
committing acts of disloyalty and/or inimical to the interest of ULGWP and in violation of its Constitution
and By-laws. Upon demand of the federation, the company terminated the petitioners without conducting
a separate and independent investigation. Respondent company did not inquire into the cause of the
expulsion and whether or not the federation had sufficient grounds to effect the same. Relying merely
upon the federation's allegations, respondent company terminated petitioners from employment when a
separate inquiry could have revealed if the federation had acted arbitrarily and capriciously in expelling
the union officers. Respondent company's allegation that petitioners were accorded due process is belied
by the termination letters received by the petitioners which state that the dismissal shall be immediately
effective.

While respondent company may validly dismiss the employees expelled by the union for disloyalty under
the union security clause of the collective bargaining agreement upon the recommendation by the union,
this dismissal should not be done hastily and summarily thereby eroding the employees' right to due
process, self-organization and security of tenure. The enforcement of union security clauses is authorized
by law provided such enforcement is not characterized by arbitrariness, and always with due
process.16 Even on the assumption that the federation had valid grounds to expel the union officers, due
process requires that these union officers be accorded a separate hearing by respondent company.

As a matter of fact, the records reveal that the termination was effective on the same day that the
termination notice was served on the petitioners.

Thus, notwithstanding the fact that the dismissal was at the instance of the federation and that it
undertook to hold the company free from any liability resulting from such a dismissal, the company may
still be held liable if it was remiss in its duty to accord the would-be dismissed employees their right to be
heard on the matter.

Anent petitioners contention that the federation was not a principal party to the collective bargaining
agreement between the company and the union; MSMG was not yet registered labor organization at the
time of the signing of the CBA. Hence, the union referred to in the CBA is the ULGWP.18

Although the issue of whether or not the federation had reasonable grounds to expel the petitioner union
officers is properly within the original and exclusive jurisdiction of the Bureau of Labor Relations, being an
intra-union conflict, this Court deems it justifiable that such issue be nonetheless ruled upon, as the Labor
Arbiter did, for to remand the same to the Bureau of Labor Relations would be to intolerably delay the
case.

The Labor Arbiter found that petitioner union officers were justifiably expelled from the federation for
committing acts of disloyalty when it "undertook to disaffiliate from the federation by charging ULGWP
with failure to provide any legal, educational or organizational support to the local. . . . and declared
autonomy, wherein they prohibit the federation from interfering in any internal and external affairs of the
local union."20

Thus, a local union which has affiliated itself with a federation is free to sever such affiliation anytime and
such disaffiliation cannot be considered disloyalty. In the absence of specific provisions in the federation's
constitution prohibiting disaffiliation or the declaration of autonomy of a local union, a local may dissociate
with its parent union.24

The evidence on hand does not show that there is such a provision in ULGWP's constitution.
Respondents' reliance upon Article V, Section 6, of the federation's constitution is not right because said
section, in fact, bolsters the petitioner union's claim of its right to declare autonomy.

There is no disloyalty to speak of, neither is there any violation of the federation's constitution because
there is nothing in the said constitution which specifically prohibits disaffiliation or declaration of
autonomy. Hence, there cannot be any valid dismissal because Article II, Section 4 of the union security
clause in the CBA limits the dismissal to only three (3) grounds, to wit: failure to maintain membership in
the union (1) for non-payment of union dues, (2) for resignation; and (3) for violation of the union's
Constitution and By-Laws.

With regard to the issue of the legality or illegality of the strike, the Labor Arbiter held that the strike was
illegal for the following reasons: (1) it was based on an intra-union dispute which cannot properly be the
subject of a strike, the right to strike being limited to cases of bargaining deadlocks and unfair labor
practice (2) it was made in violation of the "no strike, no lock-out" clause in the CBA, and (3) it was
attended with violence, force and intimidation upon the persons of the company officials, other employees
reporting for work and third persons having legitimate business with the company, resulting to serious
physical injuries to several employees and damage to company property.

On the submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the
intra-union conflict between the federation and the local union, it bears reiterating that when respondent
company dismissed the union officers, the issue was transformed into a termination dispute and brought
respondent company into the picture. Petitioners believed in good faith that in dismissing them upon
request by the federation, respondent company was guilty of unfair labor practice in that it violated the
petitioner's right to self-organization. The strike was staged to protest respondent company's act of
dismissing the union officers. Even if the allegations of unfair labor practice are subsequently found out to
be untrue, the presumption of legality of the strike prevails.25

Another reason why the Labor Arbiter declared the strike illegal is due to the existence of a no strike no
lockout provision in the CBA. Again, such a ruling is erroneous. A no strike, no lock out provision can only
be invoked when the strike is economic in nature, i.e. to force wage or other concessions from the
employer which he is not required by law to grant.26 Such a provision cannot be used to assail the legality
of a strike which is grounded on unfair labor practice, as was the honest belief of herein petitioners.
Again, whether or not there was indeed unfair labor practice does not affect the strike.

On the allegation of violence committed in the course of the strike, it must be remembered that the Labor
Arbiter and the Commission found that "the parties are agreed that there were violent incidents . . .
resulting to injuries to both sides, the union and management."27 The evidence on record show that the
violence cannot be attributed to the striking employees alone for the company itself employed hired men
to pacify the strikers. With violence committed on both sides, the management and the employees, such
violence cannot be a ground for declaring the strike as illegal.

With respect to the dismissal of individual petitioners, the Labor Arbiter declared that their refusal to heed
respondent's recall to work notice is a clear indication that they were no longer interested in continuing
their employment and is deemed abandonment. It is admitted that three return to work notices were sent
by respondent company to the striking employees and only 261 employees who responded to the notice
were admitted back to work.

In the present case, respondents failed to prove that there was a clear intention on the part of the striking
employees to sever their employer-employee relationship. Although admittedly the company sent three
return to work notices to them, it has not been substantially proven that these notices were actually sent
and received by the employees.

Furthermore, this Court has ruled that an employee who took steps to protest his lay-off cannot be said to
have abandoned his work.30 The filing of a complaint for illegal dismissal is inconsistent with the allegation
of abandonment. In the case under consideration, the petitioners did, in fact, file a complaint when they
were refused reinstatement by respondent company.

Anent public respondent's finding that there was no unfair labor practice on the part of respondent
company and federation officers, the Court sustains the same. As earlier discussed, union security
clauses in collective bargaining agreements, if freely and voluntarily entered into, are valid and binding.
Corollary, dismissals pursuant to union security clauses are valid and legal subject only to the
requirement of due process, that is, notice and hearing prior to dismissal. Thus, the dismissal of an
employee by the company pursuant to a labor union's demand in accordance with a union security
agreement does not constitute unfair labor practice.31

However, the dismissal was invalidated in this case because of respondent company's failure to accord
petitioners with due process, that is, notice and hearing prior to their termination.

Lastly, the Court is of the opinion, and so holds, that respondent company officials cannot be held
personally liable for damages on account of the employees' dismissal because the employer corporation
has a personality separate and distinct from its officers who merely acted as its agents.

G.R. Nos. 158786 & 158789 October 19, 2007

TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION (TMPCWA), versus (NLRC-2ND

DIVISION)

Facts:

Toyota Motor Philippines Corporation Workers Association (Union) and its dismissed officers and
members seek to set aside the Decision of the Court of Appeals which affirmed the Decision and
Resolution of the National Labor Relations Commission (NLRC), declaring illegal the strikes staged by the
Union and upholding the dismissal of the 227 Union officers and members.

On the other hand, in the related cases docketed as G.R. Nos. 158798-99, Toyota Motor
Philippines Corporation (Toyota) prays for the recall of the award of severance compensation to the 227
dismissed employees, which was granted.

In view of the fact that the parties are petitioner/s and respondent/s and vice-versa in the four (4)
interrelated cases, they will be referred to as simply the Union and Toyota hereafter.
ISSUE:

(1) WHETHER THE MASS ACTIONS COMMITTED BY THE UNION ON DIFFERENT

OCCASIONS ARE ILLEGAL STRIKES; AND

(2) WHETHER SEPARATION PAY SHOULD BE AWARDED TO THE UNION MEMBERS WHO
PARTICIPATED IN THE ILLEGAL STRIKES.

HELD:

We rule that the protest actions undertaken by the Union officials and members on February 21 to
23, 2001 are not valid and proper exercises of their right to assemble and ask government for redress of
their complaints, but are illegal strikes in breach of the Labor Code. The Unions position is weakened by
the lack of permit from the City of Manila to hold rallies. Shrouded as demonstrations, they were in
reality temporary stoppages of work perpetrated through the concerted action of the employees who
deliberately failed to report for work on the convenient excuse that they will hold a rally at the BLR and
DOLE offices in Intramuros, Manila, on February 21 to 23, 2001. The purported reason for these protest
actions was to safeguard their rights against any abuse which the med-arbiter may commit against their
cause. However, the Union failed to advance convincing proof that the med-arbiter was biased against
them. The acts of the med-arbiter in the performance of his duties are presumed regular. Sans ample
evidence to the contrary, the Union was unable to justify the February 2001 mass actions. What comes
to the fore is that the decision not to work for two days was designed and calculated to cripple the
manufacturing arm of Toyota. It becomes obvious that the real and ultimate goal of the Union is to coerce
Toyota to finally acknowledge the Union as the sole bargaining agent of the company. This is not a legal
and valid exercise of the right of assembly and to demand redress of grievance.

It is obvious that the February 21 to 23, 2001 concerted actions were undertaken without
satisfying the prerequisites for a valid strike under Art. 263 of the Labor Code. The Union failed to comply
with the following requirements: (1) a notice of strike filed with the DOLE 30 days before the intended
date of strike, or 15 days in case of unfair labor practice; (2) strike vote approved by a majority of the total
union membership in the bargaining unit concerned obtained by secret ballot in a meeting called for that
purpose; and (3) notice given to the DOLE of the results of the voting at least seven days before the
intended strike. These requirements are mandatory and the failure of a union to comply with them renders
the strike illegal. The evident intention of the law in requiring the strike notice and the strike-vote report is
to reasonably regulate the right to strike, which is essential to the attainment of legitimate policy
objectives embodied in the law. As they failed to conform to the law, the strikes on February 21, 22, and
23, 2001 were illegal.

The Court declined to grant termination pay because the causes for dismissal recognized under Art. 282
of the Labor Code were serious or grave in nature and attended by willful or wrongful intent or they
reflected adversely on the moral character of the employees. We therefore find that in addition to serious
misconduct, in dismissals based on other grounds under Art. 282 like willful disobedience, gross and
habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer
or his family, separation pay should not be conceded to the dismissed employee. Based on existing
jurisprudence, the award of separation pay to the Union officials and members in the instant petitions
cannot be sustained.

G.R. No. 155109 September 29, 2010

C. ALCANTARA & SONS, INC., Petitioner,

vs.
COURT OF APPEALS, Respondent.
Facts:

C. Alcantara & Sons, Inc., is a domestic corporation engaged in the manufacture and processing of
plywood. Nagkahiusang Mamumuo sa Alsons-SPFL is the exclusive bargaining agent of the Companys
rank and file employees.

The Company and the Union entered into a Collective Bargaining Agreement (CBA) that bound them to
hold no strike and no lockout in the course of its life. At some point the parties began negotiating the
economic provisions of their CBA but this ended in a deadlock, prompting the Union to file a notice of
strike. After efforts at conciliation by the DOLE failed, the Union conducted a strike vote that resulted in an
overwhelming majority of its members favoring it. The Union reported the strike vote to the DOLE and,
after the observance of the mandatory cooling-off period, went on strike.

During the strike, the Company filed a petition for the issuance of a writ of preliminary injunction with
prayer for the issuance of a temporary restraining order (TRO) Ex Parte3 with the NLRC to enjoin the
strikers from intimidating, threatening, molesting, and impeding by barricade the entry of non-striking
employees at the Companys premises. The NLRC first issued a 20-day TRO and, after hearing, a writ of
preliminary injunction, enjoining the Union and its officers and members from performing the acts
complained of. But several attempts to implement the writ failed. Only the intervention of law enforcement
units made such implementation possible. Meantime, the Union filed a petition4 with the Court of Appeals
(CA), questioning the preliminary injunction order, but the latter court dismissed the petition. The Union
did not appeal from such dismissal.

The Company, on the other hand, filed a petition with the Regional Arbitration Board to declare the
Unions strike illegal,5 citing its violation of the no strike, no lockout, provision of their CBA. Subsequently,
the Company amended its petition to implead the named Union members who allegedly committed
prohibited acts during the strike. For their part, the Union, its officers, and its affected members filed
against the Company a counterclaim for unfair labor practices, illegal dismissal, and damages. The Union
also assailed as invalid the service of summons on the individual Union members included in the
amended petition.

On June 1999 the Labor Arbiter rendered a decision,6 declaring the Unions strike illegal for violating the
CBAs no strike, no lockout, provision. As a consequence, the Labor Arbiter held that the Union officers
should be deemed to have forfeited their employment with the Company and that they should pay actual
damages. With respect to the striking Union members, finding no proof that they actually committed illegal
acts during the strike, the Labor Arbiter ordered their reinstatement without backwages. The Labor Arbiter
denied the Unions counterclaim for lack of merit.

On the same day, the terminated Union members promptly filed a motion for their immediate
reinstatement but the Labor Arbiter did not act on the same. At any rate, the Company did not reinstate
them. Both parties appealed7the Labor Arbiters decision to the NLRC. The Company impugned the Labor
Arbiters decision insofar as it ordered the reinstatement of the terminated Union members. The Union, on
the other hand, questioned the declaration of illegality of the strike as well as the dismissal of its officers
and the order for them to pay damages.

The NLRC rendered a decision,8 affirming that of the Labor Arbiter insofar as the latter declared the strike
illegal, ordered the Union officers terminated, and directed them to pay damages to the Company. The
NLRC ruled, however, that the Union members involved, who were identified in the proceedings held in
the case, should also be terminated for having committed prohibited and illegal acts.

The Union filed a petition for certiorari9 with the CA, questioning the NLRC decision. Finding merit in the
petition, the CA rendered a decision annulling the NLRC decision and reinstating that of the Labor Arbiter.
The Company and the Union with its officers and members filed separate petitions for review of the CA
decision.
During the pendency of these cases, the affected Union members filed with the Labor Arbiter a motion for
reinstatement pending appeal by the parties and the computation of their backwages based on the CA
decision. After hearing, the Labor Arbiter issued a resolution,11 holding that due to the delay in the
resolution of the dispute and the impracticability of reinstatement owing to the fact that the relations
between the terminated Union members and the Company had been severely strained by the prolonged
litigation, payment of separation pay to such Union members was in order. The Labor Arbiter thus
approved the computation and payment of their separation pay and denied all their other claims.

Both parties appealed the Labor Arbiters resolution12 to the NLRC. Initially, the NLRC declared the Labor
Arbiters resolution void for lack of factual and legal basis but ordered the Company to pay the affected
employees accrued wages and 13th month pay considering the Companys refusal to reinstate them
pending appeal. On motion for reconsideration by both parties, however, the NLRC issued a resolution
modifying its earlier resolution by deleting the grant of accrued wages and 13th month pay to the subject
employees, thus denying their motion for computation.

Upon the Unions petition for certiorari15 with the CA, questioning the NLRCs denial of the terminated
Union members claim for separation pay, accrued wages, and other benefits, the CA rendered a decision
dismissing the petition. The CA ruled that the reinstatement pending appeal provided under Article 223 of
the Labor Code contemplated illegal dismissal or termination cases and not cases under Article 263.
Thus, the CA ruled that the resolution ordering the reinstatement of the terminated Union members and
the payment of their wages and other benefits had no basis.

Issue/s: Whether or not the Union staged an illegal strike; Assuming the strike to be illegal, whether or
not the impleaded Union members committed illegal acts during the strike, justifying their termination from
employment;

Held:

A strike may be regarded as invalid although the labor union has complied with the strict requirements for
staging one as provided in Article 263 of the Labor Code when the same is held contrary to an existing
agreement, such as a no strike clause or conclusive arbitration clause. 19 Here, the CBA between the
parties contained a "no strike, no lockout" provision that enjoined both the Union and the Company from
resorting to the use of economic weapons available to them under the law and to instead take recourse to
voluntary arbitration in settling their disputes.

The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.

The Court finds no compelling reason to depart from the findings of the Labor Arbiter, the NLRC, and the
CA regarding the illegality of the strike.

Since the Unions strike has been declared illegal, the Union officers can, in accordance with law be
terminated from employment for their actions. This includes the shop stewards. They cannot be shielded
from the coverage of Article 264 of the Labor Code since the Union appointed them as such and placed
them in positions of leadership and power over the men in their respective work units.

As regards the rank and file Union members, Article 264 of the Labor Code provides that termination from
employment is not warranted by the mere fact that a union member has taken part in an illegal strike. It
must be shown that such a union member, clearly identified, performed an illegal act or acts during the
strike.201avvphi1

Here, although the Labor Arbiter found no proof that the dismissed rank and file Union members
committed illegal acts, the NLRC found that the Union members concerned committed such acts, for
which they had in fact been criminally charged before various courts and the prosecutors office in Davao
City. Since the CA held that the existence of criminal complaints against the Union members did not
warrant their dismissal, it becomes necessary for the Court to go into the records to settle the issue.

The striking Union members allegedly committed the following prohibited acts:

a. They threatened, coerced, and intimidated non-striking employees, officers, suppliers and
customers;

b. They obstructed the free ingress to and egress from the company premises; and

c. They resisted and defied the implementation of the writ of preliminary injunction issued against
the strikers.

Cornelio Caguiat, Ruben Tungapalan, and Eufracio Rabusa depicted the above prohibited acts in their
affidavits and testimonies. The Sheriff of the NLRC said in his Report21 that, in the course of his
implementation of the writ of injunction, he observed that the striking employees blocked the exit lane of
the Alson drive with their tent. Tungapalan, a non-striking employee, identified the Union members who
threatened and coerced him. Indeed, he filed criminal actions against them. Lastly, the photos taken of
the strike show the strikers, properly identified, committing the acts complained of. These constitute
substantial evidence in support of the termination of the subject Union members.

The mere fact that the criminal complaints against the terminated Union members were subsequently
dismissed for one reason or another does not extinguish their liability under the Labor Code. Nor does
such dismissal bar the admission of the affidavits, documents, and photos presented to establish their
identity and guilt during the hearing of the petition to declare the strike illegal. The technical grounds that
the Union interposed for denying admission of the photos are also not binding on the NLRC. 22

G.R. No. 78524 January 20, 1989

PLANTERS PRODUCTS, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, respondents.

Facts:

This case involves about 440 retrenched employees of the respondent from its Bataan
and Makati-based operations. It was filed by the complainants as individuals, and jointly
with their respective unions, as a class suit on behalf of Bataan-based Planters Products,
Inc. ('PPI' hereafter) employees similarly situated under Section 12, Rule 3 of the Rules
of Court, on January 16, 1986., The intervenors, on June 20, 1986, in their behalf and in
behalf of similarly situated Makati-based employees, moved for leave to intervene
because they were similarly situated as the complainants.

Moreover, the Stipulation of Facts entered into by and between the parties herein
succinctly disclosed these undisputed facts, to wit:

STIPULATION OF FACTS

l. The complainants and Complainants-Intervenors were all regular employees of the

Respondent until their respective dates of retirement/retrenchment.
2. All the Complainants, except the Complainants-Intervenors, are members of either one
of the following Unions of workers/employees of the Respondent:

a. Planters Product Employees Union ('PPEU' for brevity);

b. First Line Association of Management Employees ('FLAME' for brevity); and

c. Super 21, and/or were represented by said unions as their respective agents.

3. These Unions of former employees of Respondent have always had collective

bargaining agreements (Exhs. A -1975-78 CBA which was formally ratified; 'A l'- 1978-81
and 'A-2'/'8'-1981-84 CBAs which were not formally submitted for ratification; and 'A-3'/9'-
the purported 1984-87 CBA which was not formally submitted for ratification).

4. On October 11, 1982, the Respondent instituted a Retirement and Pension Plan (RPP'
hereafter for brevity) for all employees, which was to be effective retroactive to March 31,
1982, (Exhs. 'P' to 'P-14 a').

5. This non-contributory RPP was funded exclusively by PPI.

6. On February 23, 1984, PPI to institutionalize the RPP, entered into a Trust Agreement
with Philippine Trust Co., Inc. ('PTC' for brevity), under the terms of which, PTC shall
administer and manage the fund.

7. The initial amount deposited with PTC in accord with the trust agreement, and to fund
the RPP initially was P15,772,421.98 (Exh. 'Q').

8. There were subsequent deposits made into the RPP trust account, so that by
December 31, 1984, the trust fund in the RPP amounted to P23,789,690.00, more or less
(Exh. '5').

9. On September 28, 1984 a CBA for 1984-1987 was signed between PPI and the
directors and principal officers of its unions, assisted by their lawyer, Atty. Gabriel
Manansala (Exh. 'A-3'/'9').

10. Exh. 'A-3'/'9' modified the provisions in the previous CBAs on 'termination allowance'
or benefit, and limited its scope to separation from the service of PPI by reason solely of
disability.

11. The 1984-87 CBA was never formally submitted to the membership of the Unions for
ratification.

12. In March 1984 the RPP was submitted to the Bureau of Internal Revenue for
qualification as an approved Retirement and Pension Plan (Exh. '4'/'K').

13. On October 10, 1984, the RPP was approved by BIR Deputy Commissioner Tomas
Toledo (Exhs. '6'-' 6-D 'L' and 'L-1').

14. After the RPP was approved by the BIR, on November 21, 1984, PPI issued a
circular to all employees announcing the funding of the RPP (Exh. 'B'/'10) and its
approval by the BIR pursuant to R.A. 4917.
 15. On September 15, 1985, without formally informing the PPI employees-beneficiaries
of the RPP, the RPP was unilaterally amended by the company, particularly its Part IV,
paragraphs 3-5, pursuant to Section J, Part 7 of the RPP and a copy was later submitted
to the BIR for approval on 22 October 1985 and the amendments were approved by the
BIR pursuant to the provisions of R.A. 4197 (Exhs. '4' to '4-F'/'K' to 'K- 2').

16. On September 26, 1985 a circular was issued to all employees of RPI (Exh.'H/'16')
announcing that employees laid off from its Bataan operations on July 8 and August 15,
1985, were being terminated effective as of September 30, 1985; while those laid off from
its Makati office would be terminated effective as of October 15, 1985. Between their lay-
off dates and their announced termination/retirement dates, all of the concerned
employees did not render service to PPI.

17. On September 27, 1985, individual letters were sent to each employee notifying them
of their formal termination and the termination benefits that they would be granted (Exh.
'C'/11').

18. On or about October 11, 1985, Mr. Roberto Orig, for PPI, issued to the individual
Complainants/Complainants- Intervenors computer print-outs reflecting the respective
computations of their separation benefits for all employees terminated during the said
periods (Exhs. 'I'-'I-123'. 'N- INTERVENOR'-N-20-INTERVENOR). Exhs. 'B' to 'B-8', 'N-
INTERVENOR' to 'N-20-INTERVENOR' AND 'I' to 'I'-133', shows that the separation pay
granted to the Bataan-based and Makati-based employees who were not retireable, was
only one (1) month of basic pay for each year of service with one- half paid from the RPP
and the balance from PPI operating funds. As shown by the same Exhibits, all employees
entitled to optional or forced retirement, were granted retirement benefits based on their
basic pay. These benefits ranged from 1.02 to 1.43 months of basic pay per year of
service as computed in accordance with the RPP. These computations were used in
paying the Complainants and the Complainants-Intervenors the sums indicated on the
print outs.

19. The RPP was managed by a Retirement and Pension Committee of PPI (Exh. 'Q-l').

20. Effective 15 September 1985, before the Complainants and Complainants-

Intervenors were retired/retrenched, the company amended PPI's RPP particularly Part.
IV, Par. D (4) and (5), pursuant to which Complainants and Complainants- Intervenors
were paid their separation pay/benefits on the basis of their basic salary.

21. Subsequent to the retirement/retrenchment of the Complainants and Complainants-

Intervenors, all the remaining employees were paid their computed
retirement/retrenchment benefits from the RPP and the RPP was liquidated on June 23,
1986 (Exhs. 'G/'15'-Caluag letter and Exhs. 'R', ' R-1', 'S') and

22. Some of the employees who were retired/retrenched effective June 1, 1986, have
been subsequently re-hired by PPI under certain conditions. (pp. 42-45, Rollo - 78739)

The labor arbiter rendered judgment against Planters Products, Inc., holding it guilty of unfair labor
practice. This was affirmed on appeal to the NLRC, with the modification that it set aside the award for
actual, exemplary and moral damages, and attorney's fees.

Both parties filed their respective petitions before this Court.

Planters Products, Inc., (PPI) in its petition raised the following assignments of errors:
 In rendering the decision/resolution complained of, public respondents acted without or in
excess of jurisdiction and/or grave abuse of discretion in that

1. The NLRC, and before it, the Labor Arbiter acted without jurisdiction in resolving this
case, jurisdiction over which is vested exclusively on another judicial authority. (p. 10,
Rollo- 78524)

2. Assuming arguendo that public respondents have jurisdiction, they miserably failed to
make a sufficient and valid findings of facts upon which they could reasonably base their
conclusions. (p. 15,Id.)

3. Assuming arguendo that public respondents made sufficient and valid findings of facts,
such findings are clearly and manifestly erroneous and absolutely devoid of evidentiary
support. (p. 16, Id.) .

a. Total absence of evidence to support conclusion of unfair labor practice.

b. The finding of bad faith has no basis; Planters's decision to amend its retirement plan
was prompted by its benevolent desire to give more benefits to its employees. (p. 18, Id.)

4. Public respondents committed gross errors of law in that

(a) Under its express provision, the Retirement Plan may be amended unilaterally and
the validity and enforceability of the amendment are not nullified by a mere formal defect.
(p. 20, Id.)

(b) Private respondents are estopped from questioning the validity of the amendment to
the Retirement Plan. (p. 24, Id.)

(c) The rule on non-diminution of benefits does not apply to a modification of a provision
in the CBA voluntarily negotiated and entered into by the parties. (p. 26, Id.)

(d) Continued employment is a condition sine qua non to entitlement to the liquidation
proceeds of the Retirement Fund; non-employees at the time of liquidation are no longer
participants in the Retirement Plan and are, therefore, not entitled to liquidation proceeds.
(p. 28, Id.)

5. Public respondents gravely abused their discretion and denied Planters due process
when they deliberately ignored Planter's evidence. (p. 31, Id.)

On the other hand, the individual complainants and intervenors-complainants, in their petition for partial
review, raised the following assignments of errors:

A. THE SETTING ASIDE BY THE HONORABLE NLRC OF THE AWARD OF THE LABOR ARBITER TO
THE PETITIONERS AND INTERVENORS-PETITIONERS OF ACTUAL, MORAL AND EXEMPLARY
DAMAGES, AND ATTORNEYS FEES, IS INCONSISTENT WITH ITS FINDING OF UNFAIR LABOR
PRACTICE, BREACH OF TRUST, AND VIOLATION OF THE CBA PROVISIONS ON TERMINATION
ALLOWANCES AND THE PROHIBITION AGAINST THE DIMINUTION OF EMPLOYEE BENEFITS.

B. THE HONORABLE NLRC ERRED IN EXCLUDING NOT INTEGRATING THE 10% SALARY
ADJUSTMENT AND THE ALLOWANCES IN THE COMPUTATION OF THE TERMINATION AND
RETIREMENT ENTITLEMENT OF THE PETITIONERS AND INTERVENORS-PETITIONERS.
C. THE HONORABLE NLRC ERRED IN NOT FINDING FROM THE DOCUMENTARY EVIDENCE THAT
PETITIONERS AND INTERVENORS-PETITIONERS ARE ALSO ENTITLED TO PRO-RATED DEATH
BENEFITS. (pp. 3-4, Rollo-78739)

The first issue to resolve is whether or not the NLRC and the Labor Arbiter have jurisdiction over the
present suit.

PPI contends that the public respondents have no jurisdiction over the case as there is no longer an
existing employer-employee relationship between the private parties. The relationship having been
severed, it is believed that the complainants should have sought reinstatement for the present action to
fall under said respondents' jurisdiction.

The contention is without merit.

An employee need not seek reinstatement in order to file a complaint before the Labor Arbiter. (A.
Consteel Construction Co., Inc. v. Intermediate Appellate Court, G.R. No. 64673, Oct. 21, 1988). Money
claims of workers as in the instant case, fall within the original and exclusive jurisdiction of labor arbiters
when these claims have some reasonable causal connection with the employer-employee relationship
(San Miguel Corp. v. National Labor Relations Commission, G.R. No. 80774, May 31, 1988; Oreshoot
Mining Co. v. Arellano, G.R. Nos. 75746-48, Dec. 14, 1987; Vargas v. Akai Phils., Inc., UDK-7927, Dec.
14, 1987; Samahang Manggagawa ng Liberty Commercial Center v. Pimentel, G.R. No. 78621, Dec. 2,
1987; and Tuvera v. Dayrit, G.R. No. 50096, April 15, 1988).

It is a fact that the complainants and complainants-intervenors were all regular employees of PPI until
their respective dates of retirement/retrenchment (p. 46, Rollo- 78524). They now seek to improve the
terminal benefits granted to them on the allegation that a different computation was used for the other
employees. Their claims clearly arose from the employer-employee relationship.

PPI next contends that this should be a purely civil suit against the duly designated corporate trustee
because it is specifically against the Retirement Fund which was separately administered and managed
by said trustee.

We disagree. It is stated in the stipulation of facts that the Retirement and Pension Plan (RPP hereafter)
was managed by a Retirement and Pension Committee of Planters Products, Inc. Moreover, the RPP was
solely funded by PPI.

We therefore go along with the findings of the Labor Arbiter who stated:

The RPP was managed by a Retirement and Pension Committee (RPC' hereafter ) of
PPI. Exhibits "P", "P-1" and "Q-10" Identify the RPC members as:

Committee Vice-chairman-the Executive Vice-President and General Manager Members-

the Vice-President, Treasurer; the Vice-President, Corporate Services; the Vice-
President, Controller; the Assistant to the President; the Plant Manager; and Secretary-
the Employee Relations Manager.

The incumbents from the start of the RPP until its liquidation, were: Messrs. M.B. Cortes,
M.C. Ortega, H.G. Buhay, N.Q. Dungca, J.L. Montelibano and Roberto Orig (Exh. "P-1")
They are agents of PPI. Hence, PPI is the proper party-respondent in this action. (p. 50,
Rollo-78524)

Having determined that the public respondents have jurisdiction over the present case, we now proceed
to the other issues.
PPI questions the findings of fact of the public respondents. The NLRC merely adopted the findings of
facts of the Labor Arbiter.

It is a well-established doctrine that the findings of fact of administrative agencies are binding on this
Court if supported by substantial evidence. (Llobecera v. National Labor Relations Commission, G.R. No.
76271, June 28, 1988; PALEA v. Calleja, G.R. No. 76673, June 22, 1988; Continental Marble Corp. v.
National Labor Relations Commission, G.R. No. L-43825, May 9, 1988; Casin v. Employees'
Compensation Commission, G.R. No. L-46556, May 28, 1988; and Asim B. Castro, G.R. Nos. 75063-64,
June 30, 1988)

After a close perusal of the records of this petition, we find no reason to depart from the factual findings of
the Labor Arbiter. The findings were mainly based upon the stipulation of facts reached by the parties.

PPI alleges that it was denied due process when public respondents deliberately ignored its evidence.
This is a misapprehension.

The essence of due process is simply an opportunity to be heard. (Van-Orient Shipping co., Inc. v.
Achacoso, G.R. No. 81805, May 31, 1988; Ong, Sr. v. Parel, G.R. No. 76710, Dec. 21, 1987). PPI was
given this opportunity. The fact that the public respondents gave credit to the other party's evidence and
not to the evidence of PPI is not a violation of due process.

The evidence presented by contesting parties are logically opposing. Necessarily then the agency or
court agency or court tasked to resolve a controversy decides whose evidence shall be given more
weight. That a party's evidence was given more weight does not amount to a denial of due process to the
other party. Otherwise, it would give rise to the incongruous situation where all the losing parties would
claim a denial of due process simply because their evidences were not given the desired weight to
resolve the issues in their favor.

The next issue is whether or not PPI was guilty of unfair labor practice.

The Labor Arbiter ruled that PPI committed an unfair labor practice by withdrawing the termination
allowance in the 1984-87 CBA. (p. 62, Rollo-78524)

Article 248 of the Labor Code provides inter alia that:

... Unfair labor practices of employers, It shall be unlawful for an employer to commit any
of the following unfair labor practice.

xxx xxx xxx

(i) To violate a collective bargaining agreement.

The questioned provision in the 1984-87 Collective Bargaining Agreement limited the application of the
termination allowance only to those separated from the service due to disability (Sec. 1, Art. XVI, CBA for
1984- 1987). (pp. 7 & 158, Rollo -78524). The prior CBAs from 1975 upwards granted a termination
allowance, upon the employee's separation, of at least three (3) weeks to one (1) month's pay for each
year of service depending upon the total years of service. (p. 76, Rollo-78524)

The provisions of the 1978-1984 CBAs (Exhibits "A" to "A-2"), Art. XVI, Secs. 1 and 2, uniformly read:

ARTICLE XVI. TERMINATION ALLOWANCE

 Section 1. A regular employee who is separated from the service of the COMPANY shall
be given a termination pay which shall depend on the length of his service and shall be
computed as follows:

Employees with: Amount of Allowance

1-5 years service 3 weeks pay for each year of service

6-9 years service 4 months plus 1 month for each year of service after the fifth year

10 or more years One month pay for each year

service of service

The termination pay shall be based upon the employee's basic pay at the time of his
termination.

Section 2. An employee who is temporarily laid off, discharged for cause, resigns or
retires from the service of the COMPANY will not be entitled to any termination pay. (p.
54, Rollo-78524)

The crux of the petition is to determine whether or not the 1984-1987 CBA was validly entered into and to
determine: 1) the terminal benefits due to the employees, and 2) whether or not there was an unfair labor
practice.

If the prior CBA is applied, the complainants/complainants-intervenors who do not fall under the above
stated section 2 would be entitled to termination allowance under the CBA, over and above the benefits
extended under the RPP.

PPI computed their terminal benefits by considering the 1984-1987 CBA and the amended RPP. All
employees terminated effective as of September 30, 1985 (Bataan Operations) and October 15, 1985
(Makati Office) who were not retireable were granted a separation pay of one (1) month of basic pay for
each year of service with one-half paid from the RPP and the balance from PPI operating funds. All
employees entitled to optional or forced retirement were granted retirement benefits based on their basic
pay ranging from 1.02 to 1.43 months of basic pay per year of service as computed in accordance with
the RPP (p. 48, Rollo-78524).

It is contended that the 1984-1987 CBA was not only negotiated in bad faith but was also not formally
ratified. There was allegedly bad faith in limiting the application of the termination allowance as the
company already had plans to retrench the workers.

We apply the established rule, that a CBA is the Law among the parties, to the 1984-1987 CBA.

Bad faith in the negotiations was not present considering that the provision on termination allowance was
made to apply to everybody including those subsequently retrenched or retired after the complainants'
and complainants- intervenors' retrenchment. There was no singling out of the complainants and
intervenors-complainants.

Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing Rules, the parties
to a collective agreement are required to furnish copies to the appropriate Regional Office with
accompanying proof of ratification by the majority of all the workers in the bargaining unit. This was not
done in the case at bar. But we do not declare the 1984-1987 CBA invalid or void considering that the
employees have enjoyed benefits from it. They cannot receive benefits under provisions favorable to
them and later insist that the CBA is void simply because other provisions turn out not to the liking of
certain employees. (Stipulation of Facts, No. 3; p. 46, Rollo-78524). Moreover, the two CBAs prior to the
1984-1987 CBA were not also formally ratified, yet the employees are basing their present claims on
these CBAs. It is inequitous to receive benefits from a CBA and later on disclaim its validity.

There is nothing in the records before us to show that PPI was guilty of unfair labor practice.

However, PPI erred in not integrating the allowances with the basic salary in the computation of the
separation pay. The salary base properly used in computing the separation pay should include not just
the basic salary but also the regular allowances that an employee has been receiving. (Insular Life
Assurance Co., Ltd. v. National Labor Relations Commission, 156 SCRA 740 [1987]; and Soriano v.
National Labor Relations Commission, 155 SCRA 124 [1987]).

The allowances of the remaining PPI employees were made part of their basic pay. This increased the
computation bases for their terminal benefits. (p. 51, Rollo-78524). This should have been the case also
for the complainants/complainants-intervenors.

We adopt the Solicitor General's statement on the questioned death benefits that in any case, the death
benefits are payable only in the event of the death of the employee. Since petitioners and intervenors-
petitioners are still alive, they obviously are not entitled thereto. (p. 99, Rollo - 78739).

Finally, the complainants/complainants-intervenors are not entitled to share in the distribution of the RPP.
Under Section M, Part VII of the RPP only existing employees of the Company have the right to
participate in the distribution of the assets of the fund.

WHEREFORE, the decisions of the Labor Arbiter and the National Labor Relations Commission are
hereby SET ASIDE and a NEW ONE is ENTERED ordering Planters Products, Inc., under the
supervision of the National Labor Relations Commission, to recompute the terminal benefits of the
complainants/complainants-intervenors by including their allowances, the amount of which shall be taken
from the assets which the Court enjoined Planters Products, Inc., from disposing. The temporary
restraining orders issued on June 11, 1987 and February 29, 1988 are hereby LIFTED.

SO ORDERED.