LABOR RELATIONS

CASE DIGESTS SET 5

Collective Bargaining
(Art 250-257)
55. FRANCISCO SALUNGA vs. CIR, SMB and
NATIONAL
BREWERY & ALLIED INDUSTRIES LABOR
UNION OF
THE PHILIPPINES (NABAILUP-PAFLU), et
al.
G.R. No. L-22456 - 27September 1967
FACTS:
In 1959, SMB entered in a CBA with National
Brewery and Allied Industries Labor Union-PAFLU,
which was to take effect for 3 years. Said CBA
contained a closed-shop agreement. Salonga was
a member of the union since 1953. In August
1961, he tendered his resignation from the Union,
which accepted it 8 days after and transmitted
the same to the Company on August 29, 1961,
with a request for the immediate implementation
of said agreement.
After
being
informed
by
SMB
of
the
implementation of the agreement, Salunga wrote
to the Union to revoke his resignation and for him
to continue being deducted of his monthly union
dues. He furnished the Company a copy of the
same. SMB, in turn, notified the Union of its
receipt and said that it shall not take any action
on the case and shall consider Salunga still a
union member. The Union told SMB that his
membership could not be reinstated and it
insisted on his separation from the service, to
which the Company replied that it is not insisting
on his readmission and that following his perusal
of the CBA, Salunga decided on withdrawing his
resignation without any pressure or bad faith.
SMB eventually said that if the Union still
considers him as having actually resigned from
the organization, and if it insists that he be
dismissed him from the service in accordance
with the closed-shop agreement, it will have no
alternative but to do so. Upon reiteration by the
Union of its request for implementation of the
agreement, SMB notified Salunga of his
termination. After seeking intervention from
PAFLU, his dismissal was deferred but albeit his
request that SMB maintain the status quo as his
appeal was pending, he was still discharged from
his employment.
Soon after, a proceeding for ULP commenced
against herein respondents and in due course,
decision was rendered declaring the respondents

guilty, and have ordered for them to cease and

desist from further committing such acts
complained
of,
with
affirmative
reliefs:
readmission and continuation of petitioner
without prejudice to his rights as a member of the
union, his reinstatement to his former position
with SMB, and for the decision to be posted, with
a copy of the certificate of compliance to be
furnished to the court after a month. On MR of
the respondents, the decision was reversed by
the CIR, which dismissed the case.
ISSUES:
1. WON the CIR erred in reversing the decision of
the lower court declaring the respondents guilty
of ULP in effecting the closed-shop agreement
provided in the CBA.
2. WON SMB is guilty of ULP.
HELD:
1. YES. The Court upheld the decision of the
lower court and ruled that the Union acted
arbitrarily in not allowing Salunga to continue his
membership and it did so without any just cause
therefor. It also held that CIR did not reverse
these findings of fact or even question the
accuracy thereof.
2. NO, the Court did not find SMB guilty of unfair
labor practice. It did not merely show a
commendable understanding of and sympathy for
Salungas plight and even tried to help him,
although to such extent only as was consistent
with its obligation to refrain from interfering in
purely internal affairs of the Union.
If the resolution appealed from was affirmed, it
will nullify the right of union members to give
their views on "all transactions made by the
Union;" which is part and parcel of the freedom of
speech guaranteed by the Constitution - a
condition sine qua non to the sound growth and
development
of
labor
organizations
and
democratic institutions.
The decision of the lower court was affirmed, and
the appealed resolution of the CIR en banc was
reversed, with costs against respondents, except
the Company.
RATIO:
Unions are not entitled to arbitrarily exclude
qualified applicants for membership, and a
closed-shop provision would not justify the
employer in discharging, or a union in insisting
upon the discharge of, an employee whom the
union thus refuses to admit to membership,
without any reasonable ground therefor. If they
may be compelled to admit new members, who

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have the requisite qualifications, with more

reason may the law and the courts exercise the
coercive power when the employee involved is a
long standing union member, who, owing to
provocations of union officers, was impelled to
tender his resignation, which he forthwith
withdrew or revoked.
In this case, the Union, by not presenting
evidence to overcome the testimonies of Salunga
on what caused him to submit his resignation
have, in effect, confirmed the fact that its refusal
to allow the withdrawal of his resignation had
been due to his aforementioned criticisms which
did not only assail the Union, but the acts of its
officers, and, indirectly, the officers themselves.
Indeed, the officers tried to justify themselves by
characterizing said criticisms as acts of disloyalty
to the Union.
56. KIOK LOY, doing business under the
name and
style SWEDEN ICE CREAM PLANT vs.
NLRC and
PAMBANSANG KILUSAN NG PAGGAWA
(KILUSAN)
G.R. No. 54334 - 22 January 1986
FACTS:
A certification election held in 1978, the
Pambansang Kilusang Paggawa, a legitimate late
labor federation, won as the sole and exclusive
bargaining agent of the R&F employees of
Sweden Ice Cream Plant; as was subsequently
certified in a resolution by the BLR. The Company
filed an MR of the said resolution but was denied.
The Union thereafter furnished the Company with
two copies of its proposed CBA and has requested
the Company for its counter proposals. Twice it
did so but both requests were ignored and
remained unacted upon by the Company.
Eventually, it filed a "Notice of Strike with BLR
due to the refusal of Sweden to bargain which.
Conciliation proceedings followed during the 30day statutory cooling-off period and as all
attempts towards an amicable settlement failed,
BLR was prompted to refer the case to NLRC for
compulsory arbitration. The LA set hearings and
ordered for the parties to submit their respective
position papers as required. The Union submitted
its position paper but the Company did not, and
instead requested for a resetting. Following the
non-appearance of the representatives of the
company and the repeated requests for
postponement by the Company, LA Fedelino ruled
that the Company has waived its right to present

further evidence and

submitted for resolution.

considered

the

case

NLRC rendered its decision declaring the

respondent guilty of ULP for its unjustified refusal
to bargain, in violation Section (g) Article 249.
Petitioner countered, contending that that the
Commission acted with grave abuse of discretion
amounting to lack of jurisdiction, and that its
findings as regards ULP for refusal to bargain is
not supported by law and evidence considering
that it was only on May 24, 1979 that the Union
furnished them with a copy of the proposed CBA
and it was only then that they came to know of
the Union's demands; and finally, that the CBA
approved and adopted by the NLRC is
unreasonable and lacks legal basis.
ISSUE:
WON the respondent is guilty of unjustified
refusal to bargain.
HELD:
YES. The Court affirmed the NLRC, and ruled that,
petitioner Company is GUILTY of unfair labor
practice as it was shown that the employer, after
having been served with a written bargaining
proposal by the Union, did not even bother to
submit an answer or reply to the said proposal.
From the over-all conduct of petitioner company
in relation to the task of negotiation, it is
indubitably shown that it disregarded its
obligation to bargain hence, the Union has a valid
cause to complain against its 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. The Petition
was dismissed.
RATIO:
Collective bargaining which is defined as
negotiations towards a CA 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

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incorporating such agreement, if requested by

either party.
In the case at bar, the Union was a duly certified
bargaining agent; 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 the Company
made no counter proposal whatsoever all of
which conclusively indicate lack of a sincere
desire to negotiate.

57. DIVINE WORD UNIVERSITY OF TACLOBAN

vs. SoL and DIVINE WORD UNIVERSITY
EMPLOYEES UNION-ALU
G.R. No. 91915 11 September 1992
In 1984, MA Elorcha certified the Divine Word
University-EU as the sole and exclusive
bargaining agent of the University. The following
year, DWUEU submitted its CB proposals. The
University replied and requested a preliminary
conference but prior to the scheduled meeting,
DWUEUs resigned VP Urmeneta unilaterally
withdrew the CBA proposals, consequently
cancelling the conference.
After almost 3 years, DWUEU, which had by then
affiliated with the Associated Labor Union,
requested a conference with the University for
the purpose of continuing the collective
bargaining negotiations and for not having heard
from it, DWUEU-ALU sent a follow-up letter
reiterating its request for a conference and
warning the University against committing acts of
interference through its various meetings with
both the academic and non-academic employees
regarding their union affiliation and activities.
Despite the letter, the University remained
intransigent.
Eventually, DWUEU-ALU filed with NCMB a notice
of strike on the grounds of bargaining deadlock
and ULP due to the Universitys refusal to
bargain, and its discrimination and coercion on
employees. The conferences held thereafter led
to the conclusion of an agreement between the
University and Union on May 10, 1888, which
required the latter to submit its CBA proposals,
along with other conditions. Notwithstanding the
agreement, however, it turned out that on the
same day, the University had filed a petition for
certification election with DOLE.
In consonance with the agreement, the Union still
submitted its CB proposals, which were ignored

by the University. As the conciliation conferences

thereafter conducted failed, then SoL Franklin M.
Drilon issued an Order assuming jurisdiction over
the labor dispute and directing all striking
workers to report back to work within 24 hours
and the management to accept them back under
the same terms and conditions prevailing prior to
the work stoppage. He also designated the NCMB
to hear the case and to submit its report thereon.
On the same day, MA. Milado, acting on the
Universitys petition for certification election,
issued an Order directing the conduct of a
certification election to be participated in by
DWUEU-ALU, after finding it to be well-supported
in fact and in law.
Said Order prompted the DWUEU-ALU to file an
urgent motion seeking to enjoin MA Milado from
further acting on the matter of the certification
election, which was granted by Sec. Drilon,
directing Milado to hold in abeyance any and all
certification
election
proceedings
at
the
University pending the resolution of the labor
dispute.
Sec. Drilon then issued an order for the entire
labor dispute including all incidents arising
therefrom, or necessarily related thereto and the
following cases subsumed or consolidated (in
exercise of his extraordinary powers under Art.
263(g), LC).
In January 1990, Acting Secretary of Labor
Dionisio L. de la Serna, dismissed for lack of
merit the Universitys MR and affirmed the Order
of May 23, 1989 (consolidation, assumption of
jurisdiction). He noted the fact that the CB
proposals of the DWUEU had not been validly
withdrawn as the unions VP had resigned and the
withdrawal was signed only by three of the eight
members of the Executive Board of said union.
Granting that the withdrawal was valid, the
Acting Secretary believed that it did not
exculpate the University from the duty to
bargain with the Union because the CB
processes had been set in motion from the time
the CBA proposals were received by the
University until the impasse took place on
account of its failure to reply to the Unions
letters pursuing its CBA Proposals dated March 11
and 23, 1988.
On the Universitys assertion that no negotiations
took place insofar as the CB proposals are
concerned, ASec. Dela Serna concluded that for
reneging on the agreement and for its
reluctance and subscription to legal delay, the
University should be declared in default. He
also
maintained
that
since
under
the

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circumstances the University cannot claim

deprivation of due process, the Office of the SoL
may rightfully impose the Unions May 19, 1988
collective bargaining agreement proposals motu
proprio.
agreement proposals motu proprio. On the
Universitys contention that the motion for
intervention of the DWU-IFEU was not resolved,
the Acting Secretary ruled that said motion was in
effect denied when the petition for certification
election filed by the University was dismissed in
the Order of May 23, 1989.
Hence, the University had recourse to instant
petition.
ISSUES:
WON respondent Seretary committed grave and
patent abuse of discretion amounting to lack of
jurisdiction in:
1. issuing his order of 17 January 1990 finally
denying the Universitys MR;
2. holding that a certification election is
mandatory in the absence of a certified CBA and
there having been no certification election held in
petitioner unit for more than five (5) years.
3.WON the Petitioner is guilty of ULP for not
bargaining in good faith.
HELD:
1. No. The Court ruled that a single decision or
order should settle all controversies resulting
from a labor dispute. This is in consonance with
the principle of avoiding multiplicity of suits. In
this case, resolution of the MR at the earliest
possible time was urgently needed to set at rest
the issues regarding the first notice of strike, the
certification election and the ULP cases filed by
the University and the DWUEU-ALU. The nature of
the business of the University demanded
immediate and effective action on the part of the
respondent public officials. Otherwise, not only
the contending parties in the dispute would be
adversely affected but more importantly, the
studentry and their parents. Thus, when he set
aside the issues raised in the second notice of
strike, ASec. Dela Serna was acting in accordance
with the exigencies of the circumstances of the
case. Hardly can it be said to be an abuse of his
discretion.
2. No. In the absence of a collective bargaining
agreement, an employer who is requested to
bargain collectively may file a petition for
certification election any time except upon a
clear showing that one of these two instances
exists:

(a) the petition is filed within one year from the

date of issuance of a final certification election
result or
(b) when a bargaining deadlock had been
submitted to conciliation or arbitration or had
become the subject of a valid notice of strike or
lockout.
3. Yes. Records reveal that there was no
reasonable effort at good faith bargaining
specially on the part of the University. Its
indifferent attitude towards collective bargaining
inevitably resulted in the failure of the parties to
arrive at an agreement. As it was evident that
unilateral moves were being undertaken only by
the DWUEU-ALU, there was no counteraction of
forces or an impasse to speak of. While collective
bargaining should be initiated by the union, there
is a corresponding responsibility on the part of
the employer to respond in some manner to such
acts.
While there is no question that the petition for
certification election was filed by the herein
petitioner after almost four years from the time of
the certification election and, therefore, there is
no question as to the timeliness of the petition,
the problem appears to lie in the fact that the
Secretary of Labor had found that a bargaining
deadlock exists.
That being the 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 inaction
which bespeak its insincerity, it has forfeited
whatever rights it could have asserted as an
employer. We, therefore, find it superfluous to
discuss the two other contentions in its petition.
The Petition was DISMISSED for lack of merit.
RATIO:
A deadlock is defined as the counteraction of
things producing entire stoppage: a state of
inaction or of neutralization caused by the
opposition of persons or of factions (as in
government or a voting body): standstill. There
is a deadlock when there is a complete blocking
or stoppage resulting from the action of equal
and opposed forces; as, the deadlock of a jury or
legislature.[22] The word is synonymous with
the word impasse which, within the meaning of
the American federal labor laws, presupposes
reasonable effort at good faith bargaining which,
despite noble intentions, does not conclude in
agreement between the parties.
Bad faith on the part of the University is
exemplified by the fact that an hour before the

4 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

start of the May 10, 1988 conference, it

surreptitiously filed the petition for certification
election. And yet during said conference, it
committed itself to sit down with the Union.
Obviously, the University tried to preempt the
conference which would have legally foreclosed
its right to file the petition for certification
election. In so doing, the University failed to act
in accordance with Art. 252 of the Labor Code
which defines the meaning of the duty to bargain
collectively as the performance of a mutual
obligation to meet and convene promptly and
expeditiously in good faith. Moreover, by filing
the petition for certification election while
agreeing to confer with the DWUEU-ALU, the
University violated the mandate of Art. 19 of the
Civil Code that (e)very person must, in the
exercise of his rights and in the performance of
his duties, act with justice, give everyone his due,
and observe honesty and good faith.

58. UNION OF FILIPRO EMPLOYEES vs.

NESTL PHILIPPINES, INCORPORATED
G.R. Nos. 158930-31 March 3, 2008
FACTS:
Petition assailing the decisions of the NLRC
affirming the unanimous decisions of LAs that
declared the strikes illegal of 3 different cases
involving the same parties
a. 1st case
UFE filed a complaint for ULP: non-payment of
holiday
pay,
non-implementation
of
CBA
provisions on Labor Mgt Corp Scheme, financial
assistance & other acts of ULP.
Nestle filed a petition for assumption of
jurisdiction
MOLE assumed jurisdiction & released a returnto-work order
UFE filed for the issuance of a TRO assailing the
assumption of jurisdiction by the MOLE but still
went on w/ the strike, manned the picket lines
& advocated a boycott of company products
Nestle filed a petition to declare the strike
illegal the MOLE issued another return-to-work
order
Despite the second order, UFE continued with
the strike
LA declared the strike illegal, the union officers
to have lost their employment status, the union

guilty of ULP & dismissed the union complaint

for ULP
b. 2nd case
UFE officers sent a letter to WATU (Nestle union in
CDO) advising them that they shall administer
the CBA by themselves w/ the help of UFE
claiming to be the contracting party of the CBA
Consequently, the rank and file employees of the
company staged a strike at the instigation of the
UFE officers
LA declared the strike illegal, the union guilty of
ULP & the union officers to have lost their
employment status.
c. 3rd case
UFE filed a notice of strike ULP for hiring
contractual workers to perform regular jobs &
wage discrimination
At the instigation of UFE union officers, all
workers staged a sitdown strike
SOLE ordered return to work
Despite the return to work order issued by the
SOLE, UFE staged a strike w/o notice of strike and
strike vote
Nestle sent individual letters dismissing them
from service for knowingly instigating &
participating in an illegal strike
UFE filed a complaint for illegal dismissal
LA dismissed illegal dismissal complaint for lack
of merit & confirmed the dismissal of all
individual complainants as valid. SC affirms NLRC
decision affirming all LA decisions

58. UNION OF FILIPRO EMPLOYEES (UFEDFA-KMU) vs.

NESTLE PHILS., INC,
G.R. Nos. 158930-31 March 3, 2008
FACTS:
Petitioner was the sole and exclusive bargaining
agent of the rank-and-file employees of Nestle.
Since the CBA was about to expire on 5 June
2001, negotiations for a new CBA was conducted.
In a letter sent by the company to the petitioner,
it reiterated its stance that unilateral grants, onetime company grants, company-initiated policies
and programs, which include, but are not limited
to the Retirement Plan, Incidental Straight Duty

5 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

Pay and Calling Pay Premium, are by their very

nature
not
proper
subjects
of
CBA
negotiations
and
therefore
shall
be
excluded therefrom.
Dialogue between the company and the union
thereafter ensued. Despite 15 meetings, the
parties failed to meet an agreement so Nestle
requested NCMB to conduct a preventive
suspension. But the parties failed to reconcile,
which prompted the petitioner to file a notice of
strike with NCMB for a bargaining deadlock,
pertaining to economic issues. Then another
notice of strike was again filed, this time, due to
the alleged ULP of Nestle.
Prior to the holding of the strike, Sec. Sto. Tomas
assumed jurisdiction over the labor dispute,
enjoining any strike and lockout and ordered
conciliation among the parties. An MR was filed
by petitioner but was denied by SOLE.
Despite such prohibition, a strike was conducted
by members of petitioner. So a return-to-work
order was directed by SOLE against members of
petitioner, but the latter did not comply to said
order.
Thereafter, numerous pleadings and an MR was
filedd by petitioner which the SOLE denied. So a
petition for certiorari was filed to CA against the
SOLE for grave abuse of discretion amounting to
lack or excess of jurisdiction.
The then acting SOLE tried to resolve the dispute
and decided against the Union. The MR filed was
subsequently denied. So a 2nd petition to CA for
nullification of SOLEs orders was again instituted.
CA promulgated its Decision on the twin petitions
for certiorari, ruling entirely in favor of UFE-DFAKMU. Both parties appealed the aforequoted
ruling. The MR of both parties were denied by CA
so a separate petition for certiorari was filed to
SC. The cases were consolidated.
ISSUE:
1.WON Nestle violates its duty to bargain
collectively, thereby committing ULP when it
imposed a precondition in collective bargaining
negotiations?
RULING:
(1)No. As we have said, there is no per se test of
good faith in bargaining. Good faith or bad faith is
an inference to be drawn from the facts. To some
degree, the question of good faith may be a
question of credibility. The effect of an employers
or a unions individual actions is not the test of
good-faith bargaining, but the impact of all such

occasions or actions, considered as a whole, and

the inferences fairly drawn therefrom collectively
may offer a basis for the finding of the NLRC.
As we have stated in this Courts Decision, said
letter is not tantamount to refusal to bargain. In
thinking to exclude the issue of Retirement Plan
from the CBA negotiations, Nestle, cannot be
faulted for considering the same benefit as
unilaterally granted, considering that eight out of
nine bargaining units have allegedly agreed to
treat the Retirement Plan as a unilaterally
granted benefit. This is not a case where the
employer exhibited an indifferent attitude
towards collective bargaining, because the
negotiations were not the unilateral activity of the
bargaining representative. Nestls desire to settle
the dispute and proceed with the negotiation
being evident in its cry for compulsory arbitration
is proof enough of its exertion of reasonable effort
at good-faith bargaining.
WHEREFORE, premises considered, the basic
issues of the case having been passed upon and
there being no new arguments availing, the
Motion for Partial Reconsideration is hereby
DENIED WITH FINALITY for lack of merit. Let
these cases be remanded to the Secretary of the
Department of Labor and Employment for proper
disposition, consistent with the discussions in this
Courts Decision of 22 August 2006 and as
hereinabove set forth. No costs.

59. STANDARD CHARTERED BANK

EMPLOYEES UNION vs. CONFESOR
G.R. No. 114974 16 June 2004
FACTS:
Petitioner Union is the exclusive bargaining agent
of the rank and file employees of Standard
Chartered Bank (Bank). The Union and the Bank
signed a 5 year CBA in 1990 with a provision to
renegotiate its terms in its 3rd year.
In 1993, the Union initiated negotiations. It
submitted its proposal to the Bank as well as a
list containing the members of its negotiating
panel. The Bank submitted its counter-proposal
and the respective list of the members of its
negotiating panel. Before negotiations can begin,
the Union suggested that the Banks lawyers are
to be excluded from its negotiating panel. The
Bank agreed. The Bank however, suggested that
Jose P. Umali, Jr., the President of NUBE be
excluded from the Unions negotiating panel.
However, Umali remained a member of the
Unions panel.

6 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

During the preliminary negotiations, the parties

laid down the ground rules. The Bank suggested
that the negotiation be kept a family affair. The
negotiations on the revisions on the CBA began
on March 12, 1993. The proposed non-economic
provisions were discussed first. The parties were
not able to reach at an agreement leaving some
of the provisions as DEFERRED/DEADLOCKED.
Afterwards, negotiations on the economic
provisions began on May 18, 1993. Like before,
the Union and the Bank could not reach an
agreement. Umali chided the Bank for the
insufficiency of its counter-proposal and reminded
the Bank how they got what they wanted in 1987
and that they were willing to resort to such
means if needed.
The negotiations resumed but even after the
submission of counter-proposals from both
parties, the impasse remained. Exasperated,
Umali asserted that it would be easier to bargain
if both parties trusted each other like before. The
Bank requested the Union to refrain from
involving personalities and to focus on the
negotiations. On June 21, 1993, the Union
declared a deadlock and filed a Notice of Strike
with the NCMB.
On its part, the Bank filed a complaint for unfair
labor practices against the Union with the Labor
Arbiter. The Bank claimed that the Union engaged
in
blue
sky
bargaining
(unrealistic
or
unreasonable demands in negotiations where
neither concedes anything or demands the
impossible). The Bank also claimed that the Union
violated the no strike-no lockout clause of the
CBA.
Then Secretary of Labor Confesor assumed
jurisdiction of the dispute and dismissed the ULP
charges of both the Bank and Union. She also
ordered the award of certain benefits. On March
22, 1994, the Bank and Union signed the CBA.
ISSUE:
WON SoL Confessor committed grave abuse of
discretion when she dismissed the ULP charge
filed by the Union.
HELD:
No ULP committed by the Bank or Union.
Article 248(a) considers it an ULP if the employer
interferes, restrains or coerces employees in the
exercise of their right to self organization or the
right to form an association.

In order to show that the employer committed

ULP under the Labor Code, substantial evidence
is required to support the claim. Substantial
evidence is such relevant evidence as a
reasonable mind might accept as adequate to
support a conclusion.
The facts show that the suggestion to exclude
Umali Jr., was not an anti-union conduct from
which it can be inferred that the Bank adopted to
undermine the free exercise of the right to selforganization and collective bargaining of the
employees especially when it was requested after
the Union requested the exclusion of the Banks
lawyer from its negotiating panel.
Further, the ULP charge was merely an
afterthought as the complaint was only made
after a deadlock was declared by the Union.
There was no surface bargaining on the part of
the Bank. Surface bargaining is defined as going
through the motions of negotiating without any
legal intent to reach an agreement. Such is a
question of the intent of the party in question and
usually such intent can be inferred from the
totality of the challenged partys conduct both at
and away from the table.
The duty to bargain does not compel either party
to agree to a proposal or require the making of a
concession.
There was no grave abuse of discretion on the
part of the Secretary of Labor. It cannot be said
that she acted in a capricious and whimsical
exercise of judgment. There was no showing that
the public respondent exercised her power in an
arbitrary and despotic manner by reason of
passion or personal hostility.
Likewise, neither is the Union guilty of ULP for
engaging in blue sky bargaining. The demands of
the Union were not exaggerated or unreasonably
but based on the data of rank and file employees
and other prevailing economic benefits received
by employees in the industry.

=====
If an employer interferes in the selection of the unions
negotiators or coerces the union to exclude from its
panel of negotiators are 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. However, in this case, the act of the banks
Human Resource Manager in suggesting the exclusion
of the federation president from the negotiating panel

7 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

was not considered ULP. It is not 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 the managers suggestion that the bank lawyers
be excluded from its negotiating panel. The records
show that after the initiation of the collective
bargaining process, with the inclusion of the federation
president in the unions negotiating panel, the
negotiations pushed through. If at all, the suggestion
should be construed as part of the normal relations and
innocent communications which are all part of the
friendly relations between the union and the bank.
F: Surface bargaining v. blue sky-bargaining
H: NO ULP in either side
-Duty to bargain does not compel either party to agree
to a proposal or to require the making of a concession

60. NEW PACIFIC TIMBER vs. NLRC

G.R. No. 124224 17 March 2000
FACTS:
The National Federation of Labor (NFL) was
certified as the sole and exclusive bargaining
representative of all the regular rank-and-file
employees of New Pacific Timber & Supply Co.,
Inc.
NFL started to negotiate for the employees in the
bargaining unit. However, the same was allegedly
met with stiff resistance by petitioner Company,
so that the former was prompted to file a
complaint for ULP on the ground of refusal to
bargain collectively.
Labor Arbiter: issued an order declaring
(a) herein petitioner Company guilty of ULP; and
(b) the CBA proposals submitted by the NFL as
the CBA between the regular rank-and-file
employees in the bargaining unit and petitioner
Company.
NLRC: dismissed the complaint for lack of merit.
A "Petition for Relief" was filed in behalf of 186 of
the private respondents "Mariano J. Akilit and 350
others". In their petition, they claimed that they
were "wrongfully excluded from enjoying the
benefits under the CBA since the agreement with
NFL and petitioner Company limited the CBA's
implementation to only the 142 rank-and-file
employees enumerated."
NLRC declared that the 186 excluded employees
"form part and parcel of the then existing rank-

and-file bargaining unit" and were, therefore,

entitled to the benefits under the CBA.
Petitioners argue that the private respondents are
not entitled to the benefits under the CBA
because employees hired after the term of a CBA
are not parties to the agreement, and therefore,
may not claim benefits thereunder, even if they
subsequently become members of the bargaining
unit.
As for the term of the CBA, petitioner maintains
that Article 253 of the Labor Code refers to the
continuation in full force and effect of the
previous CBA's terms and conditions. By
necessity, it could not possibly refers to terms
and conditions which, as expressly stipulated,
ceased to have force and effect.
ISSUE:
WON the private respondent are entitled to the
benefits under the CBA.
HELD:
It is clear from the above provision of law that
until a new Collective Bargaining Agreement has
been executed by and between the parties, they
are duty-bound to keep the status quo and to
continue in full force and effect the terms and
conditions of the existing agreement. The law
does not provide for any exception nor
qualification as to which of the economic
provisions of the existing agreement are to retain
force and effect, therefore, it must be understood
as encompassing all the terms and conditions in
the said agreement.
In the case at bar, no new agreement was
entered into by and between petitioner Company
and NFL pending appeal of the decision in NLRC
Case No. RAB-IX-033482; nor were any of the economic provisions
and/or terms and conditions pertaining to
monetary benefits in the existing agreement
modified or altered. Therefore, the existing CBA in
its entirety continues to have legal effect.
Court has held that when a collective bargaining
contract is entered into by the union representing
the employees and the employer, even the nonmember employees are
entitled to the benefits of the contract. To accord
its benefits only to members of the union without
any valid reason would constitute undue
discrimination against
nonmembers. 22 It is even conceded, that a
laborer can claim benefits from the CBA entered
into between the company and the union of
which he is a member at the

8 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

time of the conclusion of the agreement, after he

has resigned from the said union.
FACTS:
The National Federation of Labor (NFL) was certified as
the sole and exclusive bargaining representative of all
the regular rank-and-file employees of petitioner
Company. As such, NFL started to negotiate for better
terms and conditions of employment but the same was
allegedly rejected by Petitioner Company, so that the
former was prompted to file a complaint for ULP.
The LA issued an order declaring (a) petitioner
Company guilty of ULP; and (b) the CBA proposals
submitted by the NFL as the CBA. Petitioners appeal
and later certiorariwere both dismissed. Petitioner
Company complied with the LAs order; and, the case
was considered closed following NFL's manifestation
that it will no longer appeal said order.
However, notwithstanding such manifestation, a
"Petition for Relief" was filed in behalf of 186 of the
private respondents who claimed that they were
wrongfully excluded from enjoying said benefits since
the agreement with NFL and petitioner Company
limited the CBA's implementation to only the 142 rankand-file employees enumerated. They claimed that
NFL's misrepresentations had precluded them from
appealing their exclusion.
NLRC issued a resolution declaring that the 186
excluded employees as part of the existing rank-andfile bargaining unit and were, therefore, entitled to the
benefits under the CBA.
Meanwhile, the private respondents, including
original 186 filed individual money claims but
Villena dismissed these cases. The NLRC set aside
dismissal orders for lack of legal basis. It sustained
earlier NLRC resolution IFO the respondents. Hence
instant petition.

the
LA
the
the
the

ISSUES:
1) Procedural WON the Petition for Relief is proper
(even if treated as an appeal, WON its proper for being
filed several months after allowable period).
2) A) Substantive - May the term of a CBA as to its
economic provisions be extended beyond the term
expressly stipulated therein, and, in the absence of a
new CBA, even beyond the three-year period provided
by law? B) Are employees hired after the stipulated
term of a CBA entitled to the benefits provided
thereunder?
HELD:
1) YES. No grave abuse of discretion on the part of the
NLRC, when it entertained the petition for relief. A
careful scrutiny of the facts and circumstances of the
instant case warrants liberality in the application of
technical rules and procedure.
2) A) YES. It is clear from Article 253 that until a new
CBA has been executed, the parties are duty-bound to
keep the status quo and to continue in full force and
effect the terms and conditions of the existing
agreement. In the case at bar, the existing CBA in its
entirety, continued to have legal effect. The automatic

renewal clause provided for by the law, which is

deemed incorporated in all CBA's, provides the reason
why the new CBA can only be given a prospective
effect.
To rule otherwise would be to create a gap during
which no agreement would govern, from the time the
old contract expired to the time a new agreement shall
have been entered into. Consequently, the employees
from the year 1985 onwards would be deprived of a
substantial amount of monetary benefits which runs
contrary to the very intent and purpose of Articles 253
and 253-A of the Labor Code which is to curb labor
unrest and to promote industrial peace,
B) YES. In a long line of cases, this Court has held that
when a collective bargaining contract is entered into by
the union and the employer, even the non-member
employees are entitled to the benefits of the contract.
In the same vein, the benefits under the CBA in the
instant case should be extended to those employees
who only became such after 1984. To exclude them
would constitute undue discrimination and deprive
them of monetary benefits they would otherwise be
entitled to under a new CBA to which they would have
been parties. Since in this particular case, no new
agreement had been entered into after the CBA's
stipulated term, it is only fair and just that the
employees hired thereafter be included in the existing
CBA.

61. SMC UNION vs. HON. CONFESOR

G.R. No. 11262 19 September 1996
FACTS:
Petitioner San Miguel Corporation Employees
Union entered into a CBA with private respondent
San Miguel Corporation (SMC). It provides that
the agreement SHALL EMAIN IN FORCE AND
EFFECTIVE until 1992, and the terms of the
agreement shall be for 5 years. from 1989 to
1992.
For purposes of business expansion, the SMC
would undergo with reconstructing, the magnolia
and the Feeds and livestock Division were spunoff and become two separate and distinct
corporation. But the CBA remain in forced and
effective.
During the negotiation the petitioner union
insisted that the bargaining unit of SMC should
still include the employees of the spun-off
corporations, which is the MAGNOLIA and SMFI
and that the renegotiation terms of the CBA shall
be effective ONLY for the remaining period of 2
years.
On the other hand the SMC contended that the
members or employees WHO HAD MOVED TO
MAGNOLIA AND SMFI, SHALL AUTHOMATICALLY

9 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

CEASED TO BE PART OF THE BARGAINING UNIT at

the SMC, and that the CBA shall be effective for
3years in accordance with ART.253-A
Unable to agree with these issues of bargaining
unit and duration of the CBA, petitioner union
declared a deadlock and filed a notice of strike.
HELD:
Spin-off of Magnolia and San Miguel Foods
Companies from the San Miguel Corporation as
separate corporate entities. Existing CBA included
all four divisions. During the renewal or
renegotiation for two years on the economic
provisions, spin-off corporations were already in
existence. The Union insisted that the employees
of the spun-off corporations were still to be
considered as part of the appropriate bargaining
unit.
Considering the spin-off, the companies would
consequently
have
their
respective
and
distinctive concerns in terms of the nature of
work, wages, hours of work and other conditions
of employment. The interests of the employees in
different companies would perforce differ. SMC is
engaged in beer manufacturing; Magnolia with
manufacturing and processing of dairy products;
SM Foods with production of feeds and processing
of
chicken. The nature of the products and sales of
business may require diff. Skills which must
necessarily be commensurated by different
compensation packages; different volumes of
work and working conditions. It would then be
best to have separate bargaining units for
different companies where the employees can
bargain separately accdg. to their needs and
working conditions.
Facts:
28 June 1990: SMCEU-PTGWO entered into a CBA with
SMC to take effect upon the expiration of the previous
CBA or on 30 June 1989, for which the duration shall
be for a term of 3 years or until 30 June 1992.
The terms of the CBA also provided that insofar as the
representation aspect is concerned, the term of the
CBA shall be for five years: from 1 July 1989 to 30 June
1994.
13 August 1991: In a letter, SMC management
informed its employees that the company would
undergo a restructuring
1 October 1991 the Magnolia and the Feeds &
Livestocks Divisions were spun-off and became two
separate
and
distinct
corporations:
Magnolia
Corporation and San Miguel Foods, Inc.

The CBA was renegotiated after 30 June 1992. SMCEUPTGWO (petitioner-union) insisted that the bargaining
unit of SMC should still include the employees of the
spun-off corporations, and that the renegotiated terms
of the CBA shall be effective only for the remaining
period of two years or until 30 June 1994.
SMC contended that the members/employees who had
moved to Magnolia and SMFI automatically ceased to
be part of the bargaining unit at the SMC, and the
renegotiated terms should be effective for three years
in accordance with Article 253-A of the Labor Code.
Petitioner-union declared a deadlock on 29 September
1990. On 2 October 1992, a Notice of Strike was filed
against SMC. The NCMB conducted preventive
mediation upon the request of SMC, but no settlement
was arrived at. A strike vote was conducted which
resulted in a yes vote. The Secretary of Labor
assumed jurisdiction over the labor dispute, after which
several conciliation meetings were held, but still no
settlement was reached.
Secretary of Labor issued the assailed order directing
that the renegotiated terms of the CBA shall be
effective for a period of three years from 30 June 1992,
and that such CBA shall over only the employees of
SMC and not of Magnolia and SMFI.
Issues:
W/N the duration of the renegotiated terms of the CBA
is to be effective for three years or for only two years
W/N the bargaining unit of SMC includes also the
employees of the Magnolia and SMFI. (RE CORPORATE
ENTITIES)
Held:
The duration of the renegotiated terms of the CBS shall
be effective for three years, based on Article 253-A of
the Labor Code.
Under this provision, a CBA has a term of five years as
far as the representation aspect is concerned, and all
other provisions of the CBA shall be negotiated not
later than three years after its execution.
Representation aspect: refers to the identity and
majority status of the union that negotiated the CBA as
the exclusive bargaining representative of the
appropriate bargaining unit concerned.
The framers of the law wanted to maintain industrial
peace and stability, and thus no outside union could
enter the establishment within five years and challenge
the status of the incumbent union as the exclusive
bargaining agent.
This way, the last year of the RENEGOTIATED
terms,which is technically the year after the five-year
period of the representation aspect - ASSUMING THE
BARGAINING AGENT IS CHANGED AFTER THE FIVEYEAR PERIOD becomes a sort of adjustment period of
industrial peace so as to let the management and
the new agent to get to know each other, negotiate,
etc. - gist of the quoted deliberations. :)

10 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

No, the bargaining unit of SMC excludes the employees

of Magnolia and SMFI.
The transformation of the companies was a
management prerogative and business judgments
which the courts cannot look into unless it is contrary
to law, public policy or morals.
Magnolia and SMFI became distinct entities with
separate juridical personalities
In determining an appropriate bargaining unit,
the test of grouping is mutuality or commonality
of interests. The employees sought to be represented
must have substantial mutual interests in terms of
employment and working conditions as evinced by the
type of work they performed. Considering the spin-offs,
the companies would consequently have their
respective and distinctive concerns in terms of the
nature of work, wages, hours of work and other
conditions of employment.
The nature of their
products and scales of business may require different
skills which must necessarily be commensurated by
different compensation packages.
PETITION WAS DISMISSED.

62. RIVERA v. ESPIRITU,

G.R. No. 135547 23 January 2002
FACTS:
As a result of a three week strike staged by PAL
pilots affiliated with the Airline Pilots Association
of the Philippines (ALPAP) PAL which was already
financially beleaguered suffered serious losses,
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. In protest to such action
PALEA went on strike which when PAL and PALEA
agreed to a more systematic reduction in PALs
work force and the payment of separation
benefits to all retrenched employees. President
Estrada thru AO 16 created an Inter-Agency Task
Force to address the problems of PAL.
PAL management submitted to the Task Force an
offer by Lucio Tan, Chairman a plan to transfer
shares of stock to its employees which has a
provision regarding the suspension of the
Collective Bargaining Agreements (CBAs) for 10
years.
PALEA
Members
rejected
the
offer.Subsequently, PAL informed the Task Force
that it was shutting down its operations because
given its labor problems, rehabilitation was no
longer feasible, and hence, the airline had no
alternative but to close shop. 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.After several negotiations a the
questioned PAL- PALEA Agreement which
provided for among others the suspension of the
PAL-PALEA CBA for a period of ten (10) years,
provided the certain safeguards are in place.
ISSUE:
WON the PAL-PALEA agreement stipulating the
suspension of the PAL-PALEA CBA unconstitutional
and contrary to public policy
HELD:
No. 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. 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. 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.
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.

11 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

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."
Disposition petition is DISMISSED.
63. PHILIPS INDUSTRIAL DEVELOPMENT,
INC. vs. NLRC
G.R. No. 88957 25 June 1992
FACTS:
Since 1971, PIDI had 6 CBAs with PEO-FFW. The
1st CBA excludes confidential employees, security
guards,
temporary
employees
and
sales
representatives from the bargaining unit. Then on
the 2nd to 5th CBA, the sales force, confidential
employees and heads of small units, together
with the managerial employees, temporary
employees
and
security
personnel,
were
specifically excluded from the bargaining unit. On
its 6th CBA, it was agreed upon that the subject of
inclusion or exclusion of service engineers, sales
personnel and confidential employees in the
coverage of the bargaining unit would be
submitted for arbitration.
As the parties failed to agree on a voluntary
arbitrator, the BLR endorsed the petition to the
Executive Labor Arbiter of the NLRC for
compulsory arbitration. LA Amansec held that the
Division Secretaries and all Staff of general
management, personnel and industrial relations
department, secretaries of audit, EDP, financial
system are confidential employees and as such
are
hereby
deemed
excluded
in
the
bargaining unit. He also directed that service
engineers and sales representatives conduct a
referendum among themselves.
LAs decision was appealed to NLRC, with the
latter reversing the formers decision, asserting
that LAs directive of carrying-out a referendum is
erroneous as it arrogates unto said employees
the right to define what the law means. NLRC also
held that LAs decision as to the exclusion of
some employees is contrary to law for they are
not mentioned as among those to be excluded
from the bargaining unit, that is, managerial
employees and security personnel only.(under
Art. 245)

After its MR was denied, a petition for certiorari

and prohibition was filed to SC.
ISSUES:
1. WON NLRC committed abuse of discretion
amounting to lack of jurisdiction in holding
that
service
engineers,
sales
representatives
and
confidential
employees of petitioner are qualified to be
part of the existing bargaining unit?
2. WON NLRC committed grave abuse of
discretion amounting to lack of jurisdiction
in not applying the time honored globe
doctrine?
RULING:
(1)Yes. On the main issue raised before Us, it is
quite obvious that respondent NLRC committed
grave abuse of discretion in reversing the
decision of the Executive Labor Arbiter and in
decreeing that PIDI's "Service Engineers, Sales
Force, division secretaries, all Staff of General
Management, Personnel and Industrial Relations
Department, Secretaries of Audit, EDP and
Financial Systems are included within the rank
and file bargaining unit."
In the first place, all these employees, with the
exception of the service engineers and the sales
force personnel, are confidential employees. Their
classification as such is not seriously disputed by
PEO-FFW; the five (5) previous CBAs between PIDI
and PEO-FFW explicitly considered them as
confidential employees. By the very nature of
their functions, they assist and act in a
confidential capacity to, or have access to
confidential matters of, persons who exercise
managerial functions in the field of labor
relations. 12As such, the rationale behind the
ineligibility of managerial employees to form,
assist or join a labor union equally applies to
them. l
(2) No. Suffice it to state here that since the only
issue is the subject employees' inclusion in or
exclusion from the bargaining unit in question,
and PIDI never questioned the decision of the
Executive Labor Arbiter, the Globe Doctrine finds
no application. Besides, this doctrine applies only
in instances of evenly balanced claims by
competitive groups for the right to be established
as the bargaining unit, 21 which do not obtain in
this case.
NOTE: GLOBE DOCTRINE - in determining the
proper bargaining unit the express will or desire
of the employees shall be considered, they
should be allowed to determine for themselves
what union to join or form.

12 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang

management.
64. NATIONAL CONGRESS OF UNIONS IN THE
SUGAR INDUSTRY OF THE PHILS (NACUSIP)
vs. HON. FERRER-CALLEJA
G.R. No. 89609
27 January 1992
FACTS:
Dacongcogon Sugar and Rice Milling Co. entered
into a CBA with respondent National Federation of
Sugar Workers (NFSW). When the CBA expired, it
was extended for another 3 years with
reservation to negotiate for its amendment,
particularly on wage increases, hours of work,
and other terms and conditions of employment.
However, a deadlock in negotiation ensued on
the matter of wage increases and optional
retirement. In order to obviate friction and
tension, the parties agreed on a suspension to
provide a cooling-off period to give them time to
evaluate and further study their positions. Hence,
a Labor Management Council was set up and
convened, with a representative of the
Department of Labor and Employment, acting as
chairman, to resolve the issues.

It is a rule in this jurisdiction that only a certified

CBA i.e., an agreement duly certified by the
BLR may serve as a bar to certification elections.
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 CBA 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 CBA
earlier entered into by them in good faith and for
the stipulated original period.

Petitioner filed filed a petition for direct

certification or certification election among the
rank
and
file
workers of Dacongcogon.
Respondent NSFW moved to dismiss the petition
on the grounds that the petition was filed out of
time and that there is a deadlocked of CBA
negotiation.
Med-Arbiter: denied the Motion to Dismiss and
direct the conduct of a certification election
among rank-and-file employees
BLR: set aside the order of the Med-Arbiter and
ruled in favor of respondent
ISSUE:
WON the
discretion?

BLR

committed

grave

abuse

of

HELD:
NO. Petition Denied.
The Deadlock Bar Rule simply provides that a
petition for certification election can only be
entertained if there is no pending bargaining
deadlock submitted to conciliation or arbitration
or had become the subject of a valid notice of
strike or lockout. The principal purpose is to
ensure stability in the relationship of the workers
and the
13 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang