[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.
DECISION
KAPUNAN, J.:
This is a petition for review on certiorari seeking the reversal of the Decision of the Court of
Appeals, promulgated on 9 August 1999, dismissing the petition filed by Colegio de San Juan
de Letran (hereinafter, "petitioner") and affirming the Order of the Secretary of Labor, dated
December 2, 1996, finding the petitioner guilty of unfair labor practice on two (2) counts.
The facts, as found by the Secretary of Labor and affirmed by the Court of Appeals, are as
follows:
"On December 1992, Salvador Abtria, then 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 (Secretary
of Labor and Employment's Order dated December 2, 1996, p. 12).
Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao,
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 eventually rejected the said CBA
(Ibid, p. 2).
Petitioner accused the union officers of bargaining in bad faith before the National Labor
Relations Commission (NLRC). Labor Arbiter Edgardo M. Madriaga decided in favor of
petitioner. However, the Labor Arbiter's decision was reversed on appeal before the NLRC (Ibid,
p. 2).
On January 1996, 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).
On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation
on a new five-year CBA starting 1994-1999. On February 7, 1996, the union submitted its
proposals to petitioner, which notified the union six days later or on February 13, 1996 that the
same had been submitted to its Board of Trustees. In the meantime, Ambas was informed
through a letter dated February 15, 1996 from her superior that her work schedule was being
changed from Monday to Friday to Tuesday to Saturday. Ambas protested and requested
management to submit the issue to a grievance machinery under the old CBA (Ibid, p. 2-3).
Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met
on March 27, 1996 before the NCMB to discuss the ground rules for the negotiation. On March
29, 1996, the union received petitioner's letter dismissing Ambas for alleged insubordination.
Hence, the union amended its notice of strike to include Ambas' dismissal. (Ibid, p. 2-3).
On April 20, 1996, 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 (Ibid, p. 3).
On June 18, 1996, the union finally struck. On July 2, 1996, 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. The parties then submitted their pleadings including their position papers which were
filed on July 17, 1996 ( Ibid, pp. 2-3).
On December 2, 1996, public respondent issued an order declaring petitioner guilty of unfair
labor practice on two counts and directing the reinstatement of private respondent Ambas with
backwages. Petitioner filed a motion for reconsideration which was denied in an Order dated
May 29, 1997 (Petition, pp. 8-9)."[1]
Having been denied its motion for reconsideration, petitioner sought a review of the order of the
Secretary of Labor and Employment before the Court of Appeals. The appellate court dismissed
the petition and affirmed the findings of the Secretary of Labor and Employment. The dispositive
portion of the decision of the Court of Appeals sets forth:
WHEREFORE, foregoing premises considered, this Petition is DISMISSED, for being without
merit in fact and in law.
With cost to petitioner.
SO ORDERED.[2]
Hence, petitioner comes to this Court for redress.
Petitioner ascribes the following errors to the Court of Appeals:
I
THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND
EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF REFUSAL TO
BARGAIN (UNFAIR LABOR PRACTICE) FOR SUSPENDING THE COLLECTIVE
BARGAINING NEGOTIATIONS WITH RESPONDENT AEFL, DESPITE THE FACT THAT THE
SUSPENSION OF THE NEGOTIATIONS WAS BROUGHT ABOUT BY THE FILING OF A
PETITION FOR CERTIFICATION ELECTION BY A RIVAL UNION WHO CLAIMED TO
COMMAND THE MAJORITY OF THE EMPLOYEES WITHIN THE BARGAINING UNIT.
II
THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND
EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF UNFAIR LABOR
PRACTICE FOR DISMISSING RESPONDENT AMBAS, DESPITE THE FACT THAT HER
DISMISSAL WAS CAUSED BY HER INSUBORDINATE ATTITUDE, SPECIFICALLY, HER
REFUSAL TO FOLLOW THE PRESCRIBED WORK SCHEDULE.[3]
The twin questions of law before this Court are the following: (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?
The petition is without merit.
After a thorough review of the records of the case, this Court finds that petitioner has not shown
any compelling reason sufficient to overturn the ruling of the Court of Appeals affirming the
findings of the Secretary of Labor and Employment. It is axiomatic that the findings of fact of the
Court of Appeals are conclusive and binding on the Supreme Court and will not be reviewed or
disturbed on appeal. In this case, the petitioner failed to show any extraordinary circumstance
justifying a departure from this established doctrine.
As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty
to bargain collectively," as follows:
Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement with respect to wages, hours of work and all
other terms and conditions of employment including proposals for adjusting any grievances or
questions arising under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel any party to agree to a
proposal or to make any concession.
Noteworthy in the above definition is the requirement on 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 Association of Employees and Faculty of
Letran (AEFL) (hereinafter, "union") lived up to this requisite when it presented its proposals for
the CBA to petitioner on February 7, 1996. 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 inaction
on the part of petitioner prompted the union to file its second notice of strike on March 13, 1996.
Petitioner could only offer a feeble explanation that the Board of Trustees had not yet convened
to discuss the matter as its excuse for failing to file its reply. This is a clear violation of Article
250 of the Labor Code governing the procedure in collective bargaining, to wit:
Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in
collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the
other party with a statement of its proposals. The other party shall make a reply thereto not later
than ten (10) calendar days from receipt of such notice.[4]
xxx
As we have held in the case of Kiok Loy vs. NLRC,[5] the company's refusal to make counter-
proposal to the union's proposed CBA is an indication of its bad faith. Where the employer did
not even bother to submit an answer to the bargaining proposals of the union, there is a clear
evasion of the duty to bargain collectively.[6] In the case at bar, petitioner's actuation show a
lack of sincere desire to negotiate rendering it guilty of unfair labor practice.
Moreover, the series of events that transpired after the filing of the first notice of strike in
January 1996 show petitioner's resort to delaying tactics to ensure that negotiation would not
push through. Thus, on February 15, 1996, or barely a few days after the union proposals for
the new CBA were submitted, the union president was informed by her superior that her work
schedule was being changed from Mondays to Fridays to Tuesdays to Saturdays. A request
from the union president that the issue be submitted to a grievance machinery was
subsequently denied. Thereafter, the petitioner and the union met on March 27, 1996 to discuss
the ground rules for negotiation. However, just two days later, or on March 29, 1996, petitioner
dismissed the union president for alleged insubordination. In its final attempt to thwart the
bargaining process, petitioner suspended the negotiation on the ground that it allegedly
received information that a new group of employees called the Association of Concerned
Employees of Colegio (ACEC) had filed a petition for certification election. Clearly, petitioner
tried to evade its duty to bargain collectively.
Petitioner, however, argues that since it has already submitted the union's proposals to the
Board of Trustees and that a series of conferences had already been undertaken to discuss the
ground rules for negotiation such should already be considered as acts indicative of its intention
to bargain. As pointed out earlier, the evidence on record belie the assertions of petitioner.
Petitioner, likewise, claims that the suspension of negotiation was proper since by the filing of
the petition for certification election the issue on majority representation of the employees has
arose. According to petitioner, the authority of the union to negotiate on behalf of the employees
was challenged when a rival union filed a petition for certification election. Citing the case of
Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises,[7] petitioner asserts that in view
of the pendency of the petition for certification election, it had no duty to bargain collectively with
the union.
We disagree. 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" under Section 3, Rule XI,
Book V, of the Omnibus Rules Implementing the Labor Code, 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." The rule is based on Article 232,[8] in
relation to Articles 253, 253-A and 256 of the Labor Code. 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] The
purpose is to ensure stability in the relationship of the workers and the company by preventing
frequent modifications of any CBA earlier entered into by them in good faith and for the
stipulated original period.[11]
In the case at bar, the lifetime of the previous CBA was from 1989-1994. The petition for
certification election by ACEC, allegedly a legitimate labor organization, was filed with the
Department of Labor and Employment (DOLE) 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. Reliance, therefore, by petitioner of the ruling in
Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises[12] is misplaced since that case
involved a legitimate representation issue which is not present in the case at bar.
Significantly, the same petition for certification election was dismissed by the Secretary of Labor
on October 25, 1996. The dismissal was upheld by this Court in a Resolution, dated April 21,
1997.[13]
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.
To justify the dismissal, petitioner asserts that the union president was terminated for cause,
allegedly for insubordination for her failure to comply with the new working schedule assigned to
her, and pursuant to its managerial prerogative to discipline and/or dismiss its employees. While
we recognize the right of the employer to terminate the services of an employee for a just or
authorized cause, nevertheless, the dismissal of employees must be made within the
parameters of law and pursuant to the tenets of equity and fair play.[14] The employer's right to
terminate the services of an employee for just or authorized cause must be exercised in good
faith.[15] More importantly, it must not amount to interfering with, restraining or coercing
employees in the exercise of their right to self-organization because it would amount to, as in
this case, unlawful labor practice under Article 248 of the Labor Code.
The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she
was dismissed in order to strip the union of a leader who would fight for the right of her co-
workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had been working for
the petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award.
Moreover, for the past ten (10) years her working schedule was from Monday to Friday.
However, things began to change when she was elected as union president and when she
started negotiating for a new CBA. Thus, it was when she was the union president and during
the period of tense and difficult negotiations when her work schedule was altered from Mondays
to Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was
changed, she was outrightly dismissed for alleged insubordination.[16] We quote with approval
the following findings of the Secretary of Labor on this matter, to wit:
"Assuming arguendo that Ms. Ambas was guilty, such disobedience was not, however, a valid
ground to teminate her employment. The disputed management action was directly connected
with Ms. Ambas' determination to change the complexion of the CBA. As a matter of fact, Ms.
Ambas' unflinching position in faithfully and truthfully carrying out her duties and responsibilities
to her Union and its members in getting a fair share of the fruits of their collective endeavors
was the proximate cause for her dismissal, the charge of insubordination being merely a ploy to
give a color of legality to the contemplated management action to dismiss her. Thus, the
dismissal of Ms. Ambas was heavily tainted with and evidently done in bad faith. Manifestly, it
was designed to interfere with the members' right to self-organization.
Admittedly, management has the prerogative to discipline its employees for insubordination. But
when the exercise of such management right tends to interfere with the employees' right to self-
organization, it amounts to union-busting and is therefore a prohibited act. The dismissal of Ms.
Ambas was clearly designed to frustrate the Union in its desire to forge a new CBA with the
College that is reflective of the true wishes and aspirations of the Union members. Her dismissal
was merely a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her
from the premises of the College. It has the effect of busting the Union, stripping it of its strong-
willed leadership. When management refused to treat the charge of insubordination as a
grievance within the scope of the Grievance Machinery, the action of the College in finally
dismissing her from the service became arbitrary, capricious and whimsical, and therefore
violated Ms. Ambas' right to due process."[17]
In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming
the findings of the Secretary of Labor and Employment. The right to self-organization of
employees must not be interfered with by the employer on the pretext of exercising
management prerogative of disciplining its employees. In this case, the totality of conduct of the
employer shows an evident attempt to restrain the employees from fully exercising their rights
under the law. This cannot be done under the Labor Code.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
SO ORDERED.

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

GENERAL MILLING CORPORATION, petitioner, vs. HON. COURT OF APPEALS, GENERAL
MILLING CORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO
MANGUBAT, respondents.
DECISION
QUISUMBING, J.:
Before us is a petition for certiorari assailing the decision[1] dated July 19, 2000, of the Court of
Appeals in CA-G.R. SP No. 50383, which earlier reversed the decision[2] dated January 30,
1998 of the National Labor Relations Commission (NLRC) in NLRC Case No. V-0112-94.
The antecedent facts are as follows:
In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling Corporation
(GMC) employed 190 workers. They were all members of private respondent General Milling
Corporation Independent Labor Union (union, for brevity), a duly certified bargaining agent.
On April 28, 1989, GMC and the union concluded a collective bargaining agreement (CBA)
which included the issue of representation effective for a term of three years. The CBA was
effective for three years retroactive to December 1, 1988. Hence, it would expire on November
30, 1991.
On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a
proposed CBA, with a request that a counter-proposal be submitted within ten (10) days.
As early as October 1991, however, GMC had received collective and individual letters from
workers who stated that they had withdrawn from their union membership, on grounds of
religious affiliation and personal differences. Believing that the union no longer had standing to
negotiate a CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and Victor
Lastimoso. The letter stated that it felt there was no basis to negotiate with a union which no
longer existed, but that management was nonetheless always willing to dialogue with them on
matters of common concern and was open to suggestions on how the company may improve its
operations.
In answer, the union officers wrote a letter dated December 19, 1991 disclaiming any massive
disaffiliation or resignation from the union and submitted a manifesto, signed by its members,
stating that they had not withdrawn from the union.
On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of
incompetence. The union protested and requested GMC to submit the matter to the grievance
procedure provided in the CBA. GMC, however, advised the union to refer to our letter dated
December 16, 1991.[3]
Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration
Division, Cebu City. The complaint alleged unfair labor practice on the part of GMC for: (1)
refusal to bargain collectively; (2) interference with the right to self-organization; and (3)
discrimination. The labor arbiter dismissed the case with the recommendation that a petition for
certification election be held to determine if the union still enjoyed the support of the workers.
The union appealed to the NLRC.
On January 30, 1998, the NLRC set aside the labor arbiters decision. Citing Article 253-A of the
Labor Code, as amended by Rep. Act No. 6715,[4] which fixed the terms of a collective
bargaining agreement, the NLRC ordered GMC to abide by the CBA draft that the union
proposed for a period of two (2) years beginning December 1, 1991, the date when the original
CBA ended, to November 30, 1993. The NLRC also ordered GMC to pay the attorneys fees.[5]
In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No. 6715, the duration
of a CBA, insofar as the representation aspect is concerned, is five (5) years which, in the case
of GMC-Independent Labor Union was from December 1, 1988 to November 30, 1993. All other
provisions of the CBA are to be renegotiated not later than three (3) years after its execution.
Thus, the NLRC held that respondent union remained as the exclusive bargaining agent with
the right to renegotiate the economic provisions of the CBA. Consequently, it was unfair labor
practice for GMC not to enter into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13
of its members from February to June 1993 confirmed the pressure exerted by GMC on its
employees to resign from the union. Thus, the NLRC also found GMC guilty of unfair labor
practice for interfering with the right of its employees to self-organization.
With respect to the unions claim of discrimination, the NLRC found the claim unsupported by
substantial evidence.
On GMCs motion for reconsideration, the NLRC set aside its decision of January 30, 1998,
through a resolution dated October 6, 1998. It found GMCs doubts as to the status of the union
justified and the allegation of coercion exerted by GMC on the unions members to resign
unfounded. Hence, the union filed a petition for certiorari before the Court of Appeals. For failure
of the union to attach the required copies of pleadings and other documents and material
portions of the record to support the allegations in its petition, the CA dismissed the petition on
February 9, 1999. The same petition was subsequently filed by the union, this time with the
necessary documents. In its resolution dated April 26, 1999, the appellate court treated the
refiled petition as a motion for reconsideration and gave the petition due course.
On July 19, 2000, the appellate court rendered a decision the dispositive portion of which reads:
WHEREFORE, the petition is hereby GRANTED. The NLRC Resolution of October 6, 1998 is
hereby SET ASIDE, and its decision of January 30, 1998 is, except with respect to the award of
attorneys fees which is hereby deleted, REINSTATED.[6]
A motion for reconsideration was seasonably filed by GMC, but in a resolution dated October
26, 2000, the CA denied it for lack of merit.
Hence, the instant petition for certiorari alleging that:
I
THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE THAT NO
DECISION SHALL BE RENDERED BY ANY COURT WITHOUT EXPRESSING THEREIN
CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH IT IS BASED.
II
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING
THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION IN THE ABSENCE
OF ANY FINDING OF SUBSTANTIAL ERROR OR GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION.
III
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT APPRECIATING THAT
THE NLRC HAS NO JURISDICTION TO DETERMINE THE TERMS AND CONDITIONS OF A
COLLECTIVE BARGAINING AGREEMENT.[7]
Thus, in the instant case, the principal issue for our determination is whether or not the Court of
Appeals acted with grave abuse of discretion amounting to lack or excess of jurisdiction in (1)
finding GMC guilty of unfair labor practice for violating the duty to bargain collectively and/or
interfering with the right of its employees to self-organization, and (2) imposing upon GMC the
draft CBA proposed by the union for two years to begin from the expiration of the original CBA.
On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, states:
ART. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement
that the parties may enter into shall, insofar as the representation aspect is concerned, be for a
term of five (5) years. No petition questioning the majority status of the incumbent bargaining
agent shall be entertained and no certification election shall be conducted by the Department of
Labor and Employment outside of the sixty-day period immediately before the date of expiry of
such five year term of the Collective Bargaining Agreement. All other provisions of the Collective
Bargaining Agreement shall be renegotiated not later than three (3) years after its execution....
The law mandates that the representation provision of a CBA should last for five years. The
relation between labor and management should be undisturbed until the last 60 days of the fifth
year. Hence, it is indisputable that when the union requested for a renegotiation of the economic
terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent of
the workers, because it was seeking said renegotiation within five (5) years from the date of
effectivity of the CBA on December 1, 1988. The unions proposal was also submitted within the
prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of
said period. It was obvious that GMC had no valid reason to refuse to negotiate in good faith
with the union. For refusing to send a counter-proposal to the union and to bargain anew on the
economic terms of the CBA, the company committed an unfair labor practice under Article 248
of the Labor Code, which provides that:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit
any of the following unfair labor practice:
(g) To violate the duty to bargain collectively as prescribed by this Code;
Article 252 of the Labor Code elucidates the meaning of the phrase duty to bargain collectively,
thus:
ART. 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement....
We have held that the crucial question whether or not a party has met his statutory duty to
bargain in good faith typically turn$ on the facts of the individual case.[8] There is no per se test
of good faith in bargaining.[9] Good faith or bad faith is an inference to be drawn from the
facts.[10] The effect of an employers or a unions actions individually is not the test of good-faith
bargaining, but the impact of all such occasions or actions, considered as a whole.[11]
Under Article 252 abovecited, both parties are required to perform their mutual obligation to
meet and convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement. The union lived up to this obligation when it presented proposals for a new CBA to
GMC within three (3) years from the effectivity of the original CBA. But GMC failed in its duty
under Article 252. What it did was to devise a flimsy excuse, by questioning the existence of the
union and the status of its membership to prevent any negotiation.
It bears stressing that the procedure in collective bargaining prescribed by the Code is
mandatory because of the basic interest of the state in ensuring lasting industrial peace. Thus:
ART. 250. Procedure in collective bargaining. The following procedures shall be observed in
collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the
other party with a statement of its proposals. The other party shall make a reply thereto not later
than ten (10) calendar days from receipt of such notice. (Underscoring supplied.)
GMCs failure to make a timely reply to the proposals presented by the union is indicative of its
utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer
represented the workers, was mainly dilatory as it turned out to be utterly baseless.
We hold that GMCs refusal to make a counter-proposal to the unions proposal for CBA
negotiation is an indication of its bad faith. Where the employer did not even bother to submit an
answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain
collectively.[12]
Failing to comply with the mandatory obligation to submit a reply to the unions proposals, GMC
violated its duty to bargain collectively, making it liable for unfair labor practice. Perforce, the
Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of
jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice.
Did GMC interfere with the employees right to self-organization? The CA found that the letters
between February to June 1993 by 13 union members signifying their resignation from the union
clearly indicated that GMC exerted pressure on its employees. The records show that GMC
presented these letters to prove that the union no longer enjoyed the support of the workers.
The fact that the resignations of the union members occurred during the pendency of the case
before the labor arbiter shows GMCs desperate attempts to cast doubt on the legitimate status
of the union. We agree with the CAs conclusion that the ill-timed letters of resignation from the
union members indicate that GMC had interfered with the right of its employees to self-
organization. Thus, we hold that the appellate court did not commit grave abuse of discretion in
finding GMC guilty of unfair labor practice for interfering with the right of its employees to self-
organization.
Finally, did the CA gravely abuse its discretion when it imposed on GMC the draft CBA
proposed by the union for two years commencing from the expiration of the original CBA?
The Code provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. ....It
shall be the duty of both parties to keep the status quo and to continue in full force and effect
the terms and conditions of the existing agreement during the 60-day period [prior to its
expiration date] and/or until a new agreement is reached by the parties. (Underscoring
supplied.)
The provision mandates the parties to keep the status quo while they are still in the process of
working out their respective proposal and counter proposal. The general rule is that when a
CBA already exists, its provision shall continue to govern the relationship between the parties,
until a new one is agreed upon. The rule necessarily presupposes that all other things are
equal. That is, that neither party is guilty of bad faith. However, when one of the parties abuses
this grace period by purposely delaying the bargaining process, a departure from the general
rule is warranted.
In Kiok Loy vs. NLRC,[13] we found that petitioner therein, Sweden Ice Cream Plant, refused to
submit any counter proposal to the CBA proposed by its employees certified bargaining agent.
We ruled that the former had thereby lost its right to bargain the terms and conditions of the
CBA. Thus, we did not hesitate to impose on the erring company the CBA proposed by its
employees union - lock, stock and barrel. Our findings in Kiok Loy are similar to the facts in the
present case, to wit:
petitioner Companys approach and attitude stalling the negotiation by a series of
postponements, non-appearance at the hearing conducted, and undue delay in submitting its
financial statements, lead to no other conclusion except that it is unwilling to negotiate and
reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or
willingness to discuss freely and fully the claims and demands set forth by the Union much less
justify its objection thereto.[14]
Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and Employment,[15]
petitioner therein, Divine Word University of Tacloban, refused to perform its duty to bargain
collectively. Thus, we upheld the unilateral imposition on the university of the CBA proposed by
the Divine Word University Employees Union. We said further:
That being the said case, the petitioner may not validly assert that its consent should be a
primordial consideration in the bargaining process. By its acts, no less than its action which
bespeak its insincerity, it has forfeited whatever rights it could have asserted as an
employer.[16]
Applying the principle in the foregoing cases to the instant case, it would be unfair to the union
and its members if the terms and conditions contained in the old CBA would continue to be
imposed on GMCs employees for the remaining two (2) years of the CBAs duration. We are not
inclined to gratify GMC with an extended term of the old CBA after it resorted to delaying tactics
to prevent negotiations. Since it was GMC which violated the duty to bargain collectively, based
on Kiok Loy and Divine Word University of Tacloban, it had lost its statutory right to negotiate or
renegotiate the terms and conditions of the draft CBA proposed by the union.
We carefully note, however, that as strictly distinguished from the facts of this case, there was
no pre-existing CBA between the parties in Kiok Loy and Divine Word University of Tacloban.
Nonetheless, we deem it proper to apply in this case the rationale of the doctrine in the said two
cases. To rule otherwise would be to allow GMC to have its cake and eat it too.
Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to
precipitately accept or agree to the proposals of the other. But an erring party should not be
allowed to resort with impunity to schemes feigning negotiations by going through empty
gestures.[17] Thus, by imposing on GMC the provisions of the draft CBA proposed by the union,
in our view, the interests of equity and fair play were properly served and both parties regained
equal footing, which was lost when GMC thwarted the negotiations for new economic terms of
the CBA.
The findings of fact by the CA, affirming those of the NLRC as to the reasonableness of the draft
CBA proposed by the union should not be disturbed since they are supported by substantial
evidence. On this score, we see no cogent reason to rule otherwise. Hence, we hold that the
Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of
jurisdiction when it imposed on GMC, after it had committed unfair labor practice, the draft CBA
proposed by the union for the remaining two (2) years of the duration of the original CBA.
Fairness, equity, and social justice are best served in this case by sustaining the appellate
courts decision on this issue.
WHEREFORE, the petition is DISMISSED and the assailed decision dated July 19, 2000, and
the resolution dated October 26, 2000, of the Court of Appeals in CA-G.R. SP No. 50383, are
AFFIRMED. Costs against petitioner.
SO ORDERED.

G.R. No. L-54334 January 22, 1986

KIOK LOY, doing business under the name and style SWEDEN ICE CREAM
PLANT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG
PAGGAWA (KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.
CUEVAS, J.:
Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC)
dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for
unjustified refusal to bargain, in violation of par. (g) of Article 249 2 of the New Labor Code, 3 and
declared the draft proposal of the Union for a collective bargaining agreement as the governing
collective bargaining agreement between the employees and the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union
for short), a legitimate late labor federation, won and was subsequently certified in a resolution
dated November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive
bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company for
short). The Company's motion for reconsideration of the said resolution was denied on January
25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with
two copies of its proposed collective bargaining agreement. At the same time, it requested the
Company for its counter proposals. Eliciting no response to the aforesaid request, the Union
again wrote the Company reiterating its request for collective bargaining negotiations and for the
Company to furnish them with its counter proposals. Both requests were ignored and remained
unacted upon by the Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the
Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR)
on ground of unresolved economic issues in collective bargaining. 5
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all
attempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to
certify the case to the National Labor Relations Commission (NLRC) for compulsory arbitration
pursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to
whom the case was assigned, set the initial hearing for April 29, 1979. For failure however, of
the parties to submit their respective position papers as required, the said hearing was
cancelled and reset to another date. Meanwhile, the Union submitted its position paper. The
Company did not, and instead requested for a resetting which was granted. The Company was
directed anew to submit its financial statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of
record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered
his appearance as counsel for the Company only to request for another postponement allegedly
for the purpose of acquainting himself with the case. Meanwhile, the Company submitted its
position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the Company's
representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty.
Panganiban then requested for another postponement which the labor arbiter denied. He also
ruled that the Company has waived its right to present further evidence and, therefore,
considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor
Relations Commission. On July 20, 1979, the National Labor Relations Commission rendered
its decision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of
unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article
249), of P.D. 442, as amended. Further, the draft proposal for a collective
bargaining agreement (Exh. "E ") hereto attached and made an integral part of
this decision, sent by the Union (Private respondent) to the respondent (petitioner
herein) and which is hereby found to be reasonable under the premises, is
hereby declared to be the collective agreement which should govern the
relationship between the parties herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending that the National
Labor Relations Commission acted without or in excess of its jurisdiction or with grave abuse of
discretion amounting to lack of jurisdiction in rendering the challenged decision. On August 4,
1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however,
the Resolution of dismissal was reconsidered and the petition was given due course in a
Resolution dated April 1, 1981.
Petitioner Company now maintains that its right to procedural due process has been violated
when it was precluded from presenting further evidence in support of its stand and when its
request for further postponement was denied. Petitioner further contends that the National
Labor Relations Commission's finding of unfair labor practice for refusal to bargain is not
supported by law and the evidence considering that it was only on May 24, 1979 when the
Union furnished them with a copy of the proposed Collective Bargaining Agreement and it was
only then that they came to know of the Union's demands; and finally, that the Collective
Bargaining Agreement approved and adopted by the National Labor Relations Commission is
unreasonable and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective agreement, 6 is one
of the democratic frameworks under the New Labor Code, designed to stabilize the relation
between labor and management and to create a climate of sound and stable industrial peace. It
is a mutual responsibility of the employer and the Union and is characterized as a legal
obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair labor
practice for an employer to refuse "to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all
other terms and conditions of employment including proposals for adjusting any grievance or
question arising under such an agreement and executing a contract incorporating such
agreement, if requested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any
legal duty to initiate contract negotiation. 7 The mechanics of collective bargaining is set in
motion only when the following jurisdictional preconditions are present, namely, (1) possession
of the status of majority representation of the employees' representative in accordance with any
of the means of selection or designation provided for by the Labor Code; (2) proof of majority
representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor Code .
... all of which preconditions are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can
be no doubt that the Union has a valid cause to complain against its (Company's) attitude, the
totality of which is indicative of the latter's disregard of, and failure to live up to, what is enjoined
by the Labor Code — to bargain in good faith.
We are in total conformity with respondent NLRC's pronouncement that petitioner Company is
GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union
was a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied
with a copy of the proposed Collective Bargaining Agreement, to the Company not only once
but twice which were left unanswered and unacted upon; and (3) the Company made no
counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to
negotiate. 8 A Company's refusal to make counter proposal if considered in relation to the entire
bargaining process, may indicate bad faith and this is specially true where the Union's request
for a counter proposal is left unanswered. 9 Even during the period of compulsory arbitration
before the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a
series of postponements, non-appearance at the hearing conducted, and undue delay in
submitting its financial statements, lead to no other conclusion except that it is unwilling to
negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced
good faith or willingness to discuss freely and fully the claims and demands set forth by the
Union much less justify its opposition thereto. 10
The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union
(PAFLU) vs. Herald Publications11 the rule had been laid down that "unfair labor practice is
committed when it is shown that the respondent employer, after having been served with a
written bargaining proposal by the petitioning Union, did not even bother to submit an answer or
reply to the said proposal This doctrine was reiterated anew in Bradman vs. Court of Industrial
Relations 12 wherein it was further ruled that "while the law does not compel the parties to reach
an agreement, it does contemplate that both parties will approach the negotiation with an open
mind and make a reasonable effort to reach a common ground of agreement
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner
capitalizes on the issue of due process claiming, that it was denied the right to be heard and
present its side when the Labor Arbiter denied the Company's motion for further postponement.
Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements
granted in its behalf, the claimed denial of due process appeared totally bereft of any legal and
factual support. As herein earlier stated, petitioner had not even honored respondent Union with
any reply to the latter's successive letters, all geared towards bringing the Company to the
bargaining table. It did not even bother to furnish or serve the Union with its counter proposal
despite persistent requests made therefor. Certainly, the moves and overall behavior of
petitioner-company were in total derogation of the policy enshrined in the New Labor Code
which is aimed towards expediting settlement of economic disputes. Hence, this Court is not
prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.
Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining
Agreement which was approved and adopted by the NLRC is a total nullity for it lacks the
company's consent, much less its argument that once the Collective Bargaining Agreement is
implemented, the Company will face the prospect of closing down because it has to pay a
staggering amount of economic benefits to the Union that will equal if not exceed its capital.
Such a stand and the evidence in support thereof should have been presented before the Labor
Arbiter which is the proper forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor
controversy to precipitately accept or agree to the proposals of the other. But an erring party
should not be tolerated and allowed with impunity to resort to schemes feigning negotiations by
going through empty gestures. 13 More so, as in the instant case, where the intervention of the
National Labor Relations Commission was properly sought for after conciliation efforts
undertaken by the BLR failed. The instant case being a certified one, it must be resolved by the
NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to
determine the reasonableness of the terms and conditions of employment embodied in any
Collective Bargaining Agreement. To that extent, utmost deference to its findings of
reasonableness of any Collective Bargaining Agreement as the governing agreement by the
employees and management must be accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on
August 27, 1980, is LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 75321 June 20, 1988
ASSOCIATED TRADE UNIONS (ATU), petitioner,
vs.
HON. CRESENCIO B. TRAJANO, in his capacity as Director of the Bureau of Labor Relations,
MOLE, BALIWAG TRANSIT, INC. and TRADE UNIONS OF THE PHILIPPINES AND ALLIED
SERVICES (TUPAS)-WFTU, respondents.
Puerto, Nunez & Associates for petitioner.
Tupaz and Associates for respondent Union.
Jose C. Espinas collaborating counsel for private respondent.
Agapito S. Mendoza for respondent Baliwag Transit, Inc.
The Solicitor General for public respondent.
CRUZ .J,:
The resolution of this case has been simplified because it has been, in Justice Vicente Abad
Santos's felicitous phrase, "overtaken by events."
This case arose when on March 25, 1986, the private respondent union (TUPAS) filed with the
Malolos labor office of the MOLE a petition for certification election at the Baliwag Transit, Inc.
among its rank-and-file workers. 1 Despite opposition from the herein petitioner, Associated
Trade Unions (ATU), the petition was granted by the med-arbiter on May 14, 1986, and a
certification election was ordered "to determine the exclusive bargaining agent (of the workers)
for purposes of collective bargaining with respect to (their) terms and conditions of
employment." 2 On appeal, this order was sustained by the respondent Director of Labor
Relations in his order dated June 20, 1986, which he affirmed in his order of July 17, 1986,
denying the motion for reconsideration. 3 ATU then came to this Court claiming that the said
orders are tainted with grave abuse of discretion and so should be reversed. On August 20,
1986, we issued a temporary restraining order that has maintained the status quoamong the
parties. 4
In support of its petition, ATU claims that the private respondent's petition for certification
election is defective because (1) at the time it was filed, it did not contain the signatures of 30%
of the workers, to signify their consent to the certification election; and (2) it was not allowed
under the contract-bar rule because a new collective bargaining agreement had been entered
into by ATU with the company on April 1, 1986. 5
TUPAS for its part, supported by the Solicitor General, contends that the 30% consent
requirement has been substantially complied with, the workers' signatures having been
subsequently submitted and admitted. As for the contract-bar rule, its position is that the
collective bargaining agreement, besides being vitiated by certain procedural defects, was
concluded by ATU with the management only on April 1, 1986 after the filing of the petition for
certification election on March 25, 1986. 6
This initial sparring was followed by a spirited exchange of views among the parties which
insofar as the first issue is concerned has become at best only academic now. The reason is
that the 30% consent required under then Section 258 of the Labor Code is no longer in force
owing to the amendment of this section by Executive Order No. 111, which became effective on
March 4, 1987.
As revised by the said executive order, the pertinent articles of the Labor Code now read as
follows:
Art. 256. Representation issue in organized establishments.— In organized establishments,
when a petition questioning the majority status of the incumbent bargaining agent is filed before
the Ministry within the sixty-day period before the expiration of the collective bargaining
agreement, the Med-Arbiter shall automatically order an election by secret ballot to ascertain the
will of the employees in the appropriate bargaining unit. To have a valid election, at least a
majority of all eligible voters in the unit must have cast their votes. The labor union receiving the
majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the
workers in the unit. When an election which provides for three or more choices results in no
choice receiving a majority of the valid votes cast, a runoff election shall be conducted between
the choices receiving the two highest number of votes.
Art. 257. Petitions in unorganized establishments.— In any establishment where there is no
certified bargaining agent, the petition for certification election filed by a legitimate labor
organization shall be supported by the written consent of at least twenty (20%) percent of all the
employees in the bargaining unit. Upon receipt and verification of such petition, the Med-Arbiter
shall automatically order the conduct of a certification election.
The applicable provision in the case at bar is Article 256 because Baliwag transit, Inc. is an
organized establishment. Under this provision, the petition for certification election need no
longer carry the signatures of the 30% of the workers consenting to such petition as originally
required under Article 258. The present rule provides that as long as the petition contains the
matters 7 required in Section 2, Rule 5, Book V of the Implementing Rules and Regulations, as
amended by Section 6, Implementing Rules of E.O. No. 111, the med-arbiter "shall
automatically order" an election by secret ballot "to ascertain the will of the employees in the
appropriate bargaining unit." The consent requirement is now applied only to unorganized
establishments under Article 257, and at that, significantly, has been reduced to only 20%.
The petition must also fail on the second issue which is based on the contract-bar rule under
Section 3, Rule 5, Book V of the Implementing Rules and Regulations. This rule simply provides
that a petition for certification election or a motion for intervention can only be entertained within
sixty days prior to the expiry date of an existing collective bargaining agreement. Otherwise put,
the rule prohibits the filing of a petition for certification election during the existence of a
collective bargaining agreement except within the freedom period, as it is called, when the said
agreement is about to expire. The purpose, obviously, is to ensure stability in the relationships
of the workers and the management by preventing frequent modifications of any collective
bargaining agreement earlier entered into by them in good faith and for the stipulated original
period.
ATU insists that its collective bargaining agreement concluded by it with Baliwag Transit, Inc, on
April 1, 1986, should bar the certification election sought by TUPAS as this would disturb the
said new agreement. Moreover, the agreement had been ratified on April 3, 1986, by a majority
of the workers and is plainly beneficial to them because of the many generous concessions
made by the management. 8
Besides pointing out that its petition for certification election was filed within the freedom period
and five days before the new collective bargaining agreement was concluded by ATU with
Baliwag Transit, Inc. TUPAS contends that the said agreement suffers from certain fatal
procedural flaws. Specifically, the CBA was not posted for at least five days in two conspicuous
places in the establishment before ratification, to enable the workers to clearly inform
themselves of its provisions. Moreover, the CBA submitted to the MOLE did not carry the sworn
statement of the union secretary, attested by the union president, that the CBA had been duly
posted and ratified, as required by Section 1, Rule 9, Book V of the Implementing Rules and
Regulations. These requirements being mandatory, non-compliance therewith rendered the said
CBA ineffective. 9
The Court will not rule on the merits and/or defects of the new CBA and shall only consider the
fact that it was entered into at a time when the petition for certification election had already been
filed by TUPAS and was then pending resolution. The said CBA cannot be deemed permanent,
precluding the commencement of negotiations by another union with the management. In the
meantime however, so as not to deprive the workers of the benefits of the said agreement, it
shall be recognized and given effect on a temporary basis, subject to the results of the
certification election. The agreement may be continued in force if ATU is certified as the
exclusive bargaining representative of the workers or may be rejected and replaced in the event
that TUPAS emerges as the winner.
This ruling is consistent with our earlier decisions on interim arrangements of this kind where we
declared:
... we are not unmindful that the supplemental collective bargaining contract, entered into in the
meanwhile between management and respondent Union contains provisions beneficial to labor.
So as not to prejudice the workers involved, it must be made clear that until the conclusion of a
new collective bargaining contract entered into by it and whatever labor organization may be
chosen after the certification election, the existing labor contract as thus supplemented should
be left undisturbed. Its terms call for strict compliance. This mode of assuring that the cause of
labor suffers no injury from the struggle between contending labor organization follows the
doctrine announced in the recent case of Vassar Industries Employees v. Estrella (L-46562,
March 31, 1978). To quote from the opinion. "In the meanwhile, if as contended by private
respondent labor union the interim collective bargaining agreement which it engineered and
entered into on September 26, 1977 has, much more favorable terms for the workers of private
respondent Vassar Industries, then it should continue in full force and effect until the appropriate
bargaining representative is chosen and negotiations for a new collective bargaining agreement
thereafter concluded." 10
It remains for the Court to reiterate that the certification election is the most democratic forum for
the articulation by the workers of their choice of the union that shall act on their behalf in the
negotiation of a collective bargaining agreement with their employer. Exercising their suffrage
through the medium of the secret ballot, they can select the exclusive bargaining representative
that, emboldened by their confidence and strengthened by their support shall fight for their rights
at the conference table. That is how union solidarity is achieved and union power is increased in
the free society. Hence, rather than being inhibited and delayed, the certification election should
be given every encouragement under the law, that the will of the workers may be discovered
and, through their freely chosen representatives, pursued and realized.
WHEREFORE, the petition is DENIED. The temporary restraining order of August 20, 1986, is
LIFTED. Cost against the petitioner.
SO ORDERED.
[G.R. No. 135547. January 23, 2002]
GERARDO F. RIVERA, ALFRED A. RAMISO, AMBROCIO PALAD, DENNIS R. ARANAS,
DAVID SORIMA, JR., JORGE P. DELA ROSA, and ISAGANI ALDEA, petitioners, vs.
HON. EDGARDO ESPIRITU in his capacity as Chairman of the PAL Inter-Agency Task
Force created under Administrative Order No. 16; HON. BIENVENIDO LAGUESMA in
his capacity as Secretary of Labor and Employment; PHILIPPINE AIRLINES (PAL),
LUCIO TAN, HENRY SO UY, ANTONIO V. OCAMPO, MANOLO E. AQUINO, JAIME J.
BAUTISTA, and ALEXANDER O. BARRIENTOS, respondents.
DECISION
QUISUMBING, J.:
In this special civil action for certiorari and prohibition, petitioners charge public respondents
with grave abuse of discretion amounting to lack or excess of jurisdiction for acts taken in regard
to the enforcement of the agreement dated September 27, 1998, between Philippine Airlines
(PAL) and its union, the PAL Employees Association (PALEA).
 The factual antecedents of this case are as follows:
On June 5, 1998, PAL pilots affiliated with the Airline Pilots Association of the Philippines
(ALPAP) went on a three-week strike, causing serious losses to the financially beleaguered flag
carrier. As a result, PALs financial situation went from bad to worse. Faced with bankruptcy,
PAL adopted a rehabilitation plan and downsized its labor force by more than one-third.
On July 22, 1998, PALEA went on strike to protest the retrenchment measures adopted by
the airline, which affected 1,899 union members. The strike ended four days later, when PAL
and PALEA agreed to a more systematic reduction in PALs work force and the payment of
separation benefits to all retrenched employees.
On August 28, 1998, then President Joseph E. Estrada issued Administrative Order No. 16
creating an Inter-Agency Task Force (Task Force) to address the problems of the ailing flag
carrier. The Task Force was composed of the Departments of Finance, Labor and Employment,
Foreign Affairs, Transportation and Communication, and Tourism, together with the Securities
and Exchange Commission (SEC). Public respondent Edgardo Espiritu, then the Secretary of
Finance, was designated chairman of the Task Force. It was empowered to summon all parties
concerned for conciliation, mediation (for) the purpose of arriving at a total and complete
solution of the problem.[1] Conciliation meetings were then held between PAL management and
the three unions representing the airlines employees,[2] with the Task Force as mediator.
On September 4, 1998, PAL management submitted to the Task Force an offer by private
respondent Lucio Tan, Chairman and Chief Executive Officer of PAL, of a plan to transfer
shares of stock to its employees. The pertinent portion of said plan reads:
1. From the issued shares of stock within the group of Mr. Lucio Tans holdings, the ownership of
60,000 fully paid shares of stock of Philippine Airlines with a par value of PHP5.00/share will be
transferred in favor of each employee of Philippine Airlines in the active payroll as of September
15, 1998. Should any share-owning employee leave PAL, he/she has the option to keep the
shares or sells (sic) his/her shares to his/her union or other employees currently employed by
PAL.
2. The aggregate shares of stock transferred to PAL employees will allow them three (3)
members to (sic) the PAL Board of Directors. We, thus, become partners in the boardroom and
together, we shall address and find solutions to the wide range of problems besetting PAL.
3. In order for PAL to attain (a) degree of normalcy while we are tackling its problems, we would
request for a suspension of the Collective Bargaining Agreements (CBAs) for 10 years.[3]
On September 10, 1998, the Board of Directors of PALEA voted to accept Tans offer and
requested the Task Forces assistance in implementing the same. Union members, however,
rejected Tans offer. Under intense pressure from PALEA members, the unions directors
subsequently resolved to reject Tans offer.
On September 17, 1998, PAL informed the Task Force that it was shutting down its
operations effective September 23, 1998, preparatory to liquidating its assets and paying off its
creditors. The airline claimed that given its labor problems, rehabilitation was no longer feasible,
and hence, the airline had no alternative but to close shop.
On September 18, 1998, PALEA sought the intervention of the Office of the President in
immediately convening the parties, the PAL management, PALEA, ALPAP, and FASAP,
including the SEC under the direction of the Inter-Agency Task Force, to prevent the imminent
closure of PAL.[4]
On September 19, 1998, PALEA informed the Department of Labor and Employment
(DOLE) that it had no objection to a referendum on the Tans offer. 2,799 out of 6,738 PALEA
members cast their votes in the referendum under DOLE supervision held on September 21-22,
1998. Of the votes cast, 1,055 voted in favor of Tans offer while 1,371 rejected it.
On September 23, 1998, PAL ceased its operations and sent notices of termination to its
employees.
 Two days later, the PALEA board wrote President Estrada anew, seeking his
intervention. PALEA offered a 10-year moratorium on strikes and similar actions and a waiver of
some of the economic benefits in the existing CBA.[5] Tan, however, rejected this counter-offer.
On September 27, 1998, the PALEA board again wrote the President proposing the
following terms and conditions, subject to ratification by the general membership:
1. Each PAL employee shall be granted 60,000 shares of stock with a par value of P5.00, from
Mr. Lucio Tans shareholdings, with three (3) seats in the PAL Board and an additional seat from
government shares as indicated by His Excellency;
2. Likewise, PALEA shall, as far as practicable, be granted adequate representation in
committees or bodies which deal with matters affecting terms and conditions of employment;
3. To enhance and strengthen labor-management relations, the existing Labor-Management
Coordinating Council shall be reorganized and revitalized, with adequate representation from
both PAL management and PALEA;
4. To assure investors and creditors of industrial peace, PALEA agrees, subject to the
ratification by the general membership, (to) the suspension of the PAL-PALEA CBA for a period
of ten (10) years, provided the following safeguards are in place:
a. PAL shall continue recognizing PALEA as the duly certified bargaining agent of the
regular rank-and-file ground employees of the Company;
b. The union shop/maintenance of membership provision under the PAL-PALEA CBA
shall be respected.
c. No salary deduction, with full medical benefits.
5. PAL shall grant the benefits under the 26 July 1998 Memorandum of Agreement forged by
and between PAL and PALEA, to those employees who may opt to retire or be separated from
the company.
6. PALEA members who have been retrenched but have not received separation benefits shall
be granted priority in the hiring/rehiring of employees.
7. In the absence of applicable Company rule or regulation, the provisions of the Labor Code
shall apply.[6]
Among the signatories to the letter were herein petitioners Rivera, Ramiso, and Aranas, as
officers and/or members of the PALEA Board of Directors. PAL management accepted the
PALEA proposal and the necessary referendum was scheduled.
On October 2, 1998, 5,324 PALEA members cast their votes in a DOLE-supervised
referendum. Of the votes cast, 61% were in favor of accepting the PAL-PALEA agreement,
while 34% rejected it.
On October 7, 1998, PAL resumed domestic operations. On the same date, seven officers
and members of PALEA filed this instant petition to annul the September 27, 1998 agreement
entered into between PAL and PALEA on the following grounds:
I
PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND EXCEEDED
THEIR JURISDICTION IN ACTIVELY PURSUING THE CONCLUSION OF THE PAL-PALEA
AGREEMENT AS THE CONSTITUTIONAL RIGHTS TO SELF-ORGANIZATION AND
COLLECTIVE BARGAINING, BEING FOUNDED ON PUBLIC POLICY, MAY NOT BE WAIVED,
NOR THE WAIVER, RATIFIED.
II
PUBLIC RESPONDENTS GRAVELY ABUSED THEIR DISCRETION AND EXCEEDED
THEIR JURISDICTION IN PRESIDING OVER THE CONCLUSION OF THE PAL-PALEA
AGREEMENT UNDER THREAT OF ABUSIVE EXERCISE OF PALS MANAGEMENT
PREROGATIVE TO CLOSE BUSINESS USED AS SUBTERFUGE FOR UNION-BUSTING.
The issues now for our resolution are:
(1) Is an original action for certiorari and prohibition the proper remedy to annul the
PAL-PALEA agreement of September 27, 1998;
 (2) Is the PAL-PALEA agreement of September 27, 1998, stipulating the suspension of
the PAL-PALEA CBA unconstitutional and contrary to public policy?
Anent the first issue, petitioners aver that public respondents as functionaries of the Task
Force, gravely abused their discretion and exceeded their jurisdiction when they actively
pursued and presided over the PAL-PALEA agreement.
Respondents, in turn, argue that the public respondents merely served as conciliators or
mediators, consistent with the mandate of A.O. No. 16 and merely supervised the conduct of
the October 3, 1998 referendum during which the PALEA members ratified the
agreement. Thus, public respondents did not perform any judicial and quasi-judicial act
pertaining to jurisdiction. Furthermore, respondents pray for the dismissal of the petition for
violating the hierarchy of courts doctrine enunciated in People v. Cuaresma[7] and Enrile v.
Salazar.[8]
Petitioners allege grave abuse of discretion under Rule 65 of the 1997 Rules of Civil
Procedure. The essential requisites for a petition for certiorari under Rule 65 are: (1) the writ is
directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial functions;
(2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any
plain, speedy, and adequate remedy in the ordinary course of law.[9] For writs of prohibition, the
requisites are: (1) the impugned act must be that of a tribunal, corporation, board, officer, or
person, whether exercising judicial, quasi-judicial or ministerial functions; and (2) there is no
plain, speedy, and adequate remedy in the ordinary course of law. [10]
The assailed agreement is clearly not the act of a tribunal, board, officer, or person
exercising judicial, quasi-judicial, or ministerial functions. It is not the act of public respondents
Finance Secretary Edgardo Espiritu and Labor Secretary Bienvenido Laguesma as
functionaries of the Task Force. Neither is there a judgment, order, or resolution of either public
respondents involved. Instead, what exists is a contract between a private firm and one of its
labor unions, albeit entered into with the assistance of the Task Force. The first and second
requisites for certiorari and prohibition are therefore not present in this case.
Furthermore, there is available to petitioners a plain, speedy, and adequate remedy in the
ordinary course of law. While the petition is denominated as one for certiorari and prohibition, its
object is actually the nullification of the PAL-PALEA agreement. As such, petitioners proper
remedy is an ordinary civil action for annulment of contract, an action which properly falls under
the jurisdiction of the regional trial courts.[11] Neither certiorari nor prohibition is the remedy in the
present case.
Petitioners further assert that public respondents were partial towards PAL
management. They allegedly pressured the PALEA leaders into accepting the
agreement. Petitioners ask this Court to examine the circumstances that led to the signing of
said agreement. This would involve review of the facts and factual issues raised in a special civil
action for certiorari which is not the function of this Court.[12]
Nevertheless, considering the prayer of the parties principally we shall look into the
substance of the petition, in the higher interest of justice[13] and in view of the public interest
involved, inasmuch as what is at stake here is industrial peace in the nations premier airline and
flag carrier, a national concern.
On the second issue, petitioners contend that the controverted PAL-PALEA agreement is
void because it abrogated the right of workers to self-organization[14] and their right to collective
bargaining.[15] Petitioners claim that the agreement was not meant merely to suspend the
existing PAL-PALEA CBA, which expires on September 30, 2000, but also to foreclose any
renegotiation or any possibility to forge a new CBA for a decade or up to 2008. It violates the
protection to labor policy[16] laid down by the Constitution.
Article 253-A of the Labor Code reads:
 ART. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be conducted
by the Department of Labor and Employment outside of the sixty-day period immediately before
the date of expiry of such five-year term of the Collective Bargaining Agreement. All other
provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3)
years after its execution. Any agreement on such other provisions of the Collective Bargaining
Agreement entered into within six (6) months from the date of expiry of the term of such other
provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day
immediately following such date. If any such agreement is entered into beyond six months, the
parties shall agree on the duration of the retroactivity thereof. In case of a deadlock in the
renegotiation of the collective bargaining agreement, the parties may exercise their rights under
this Code.
Under this provision, insofar as representation is concerned, a CBA has a term of five years,
while the other provisions, except for representation, may be negotiated not later than three
years after the execution.[17] Petitioners submit that a 10-year CBA suspension is inordinately
long, way beyond the maximum statutory life of a CBA, provided for in Article 253-A. By
agreeing to a 10-year suspension, PALEA, in effect, abdicated the workers constitutional right to
bargain for another CBA at the mandated time.
We find the argument devoid of merit.
A CBA is a contract executed upon request of either the employer or the exclusive
bargaining representative incorporating the agreement reached after negotiations with respect
to wages, hours of work and all other terms and conditions of employment, including proposals
for adjusting any grievances or questions arising under such agreement.[18] The primary purpose
of a CBA is the stabilization of labor-management relations in order to create a climate of a
sound and stable industrial peace.[19] In construing a CBA, the courts must be practical and
realistic and give due consideration to the context in which it is negotiated and the purpose
which it is intended to serve.[20]
The assailed PAL-PALEA agreement was the result of voluntary collective bargaining
negotiations undertaken in the light of the severe financial situation faced by the employer, with
the peculiar and unique intention of not merely promoting industrial peace at PAL, but
preventing the latters closure. We find no conflict between said agreement and Article 253-A of
the Labor Code. Article 253-A has a two-fold purpose. One is to promote industrial stability and
predictability. Inasmuch as the agreement sought to promote industrial peace at PAL during its
rehabilitation, said agreement satisfies the first purpose of Article 253-A. The other is to assign
specific timetables wherein negotiations become a matter of right and requirement. Nothing in
Article 253-A, prohibits the parties from waiving or suspending the mandatory timetables and
agreeing on the remedies to enforce the same.
In the instant case, it was PALEA, as the exclusive bargaining agent of PALs ground
employees, that voluntarily entered into the CBA with PAL. It was also PALEA that voluntarily
opted for the 10-year suspension of the CBA. Either case was the unions exercise of its right to
collective bargaining. The right to free collective bargaining, after all, includes the right to
suspend it.
The acts of public respondents in sanctioning the 10-year suspension of the PAL-PALEA
CBA did not contravene the protection to labor policy of the Constitution. The agreement
afforded full protection to labor; promoted the shared responsibility between workers and
employers; and the exercised voluntary modes in settling disputes, including conciliation to
foster industrial peace."[21]
Petitioners further allege that the 10-year suspension of the CBA under the PAL-PALEA
agreement virtually installed PALEA as a company union for said period, amounting to unfair
labor practice, in violation of Article 253-A of the Labor Code mandating that an exclusive
bargaining agent serves for five years only.
The questioned proviso of the agreement reads:
a. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of the
regular rank-and-file ground employees of the Company;
Said proviso cannot be construed alone. In construing an instrument with several
provisions, a construction must be adopted as will give effect to all. Under Article 1374 of the
Civil Code,[22] contracts cannot be construed by parts, but clauses must be interpreted in relation
to one another to give effect to the whole. The legal effect of a contract is not determined alone
by any particular provision disconnected from all others, but from the whole read
together.[23] The aforesaid provision must be read within the context of the next clause, which
provides:
b. The union shop/maintenance of membership provision under the PAL-PALEA CBA
shall be respected.
The aforesaid provisions, taken together, clearly show the intent of the parties to maintain
union security during the period of the suspension of the CBA. Its objective is to assure the
continued existence of PALEA during the said period. We are unable to declare the objective of
union security an unfair labor practice. It is State policy to promote unionism to enable workers
to negotiate with management on an even playing field and with more persuasiveness than if
they were to individually and separately bargain with the employer. For this reason, the law has
allowed stipulations for union shop and closed shop as means of encouraging workers to join
and support the union of their choice in the protection of their rights and interests vis--vis the
employer.[24]
Petitioners contention that the agreement installs PALEA as a virtual company union is also
untenable. Under Article 248 (d) of the Labor Code, a company union exists when the employer
acts [t]o 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. The case records are bare of any showing of such acts by PAL.
We also do not agree that the agreement violates the five-year representation limit
mandated by Article 253-A. Under said article, the representation limit for the exclusive
bargaining agent applies only when there is an extant CBA in full force and effect. In the instant
case, the parties agreed to suspend the CBA and put in abeyance the limit on the
representation period.
In sum, we are of the view that the PAL-PALEA agreement dated September 27, 1998, is a
valid exercise of the freedom to contract. Under the principle of inviolability of contracts
guaranteed by the Constitution,[25] the contract must be upheld.
WHEREFORE, there being no grave abuse of discretion shown, the instant petition is
DISMISSED. No pronouncement as to costs.
SO ORDERED.