----------------------------------------------- by the parties and expands the 19 faculty ranks to 23.

Upon
CASE 091 Faculty Association of Mapua vs. Mapua learning of the changes, FAMIT opposed the formula.
G.R. No. 164060 5. FAMIT brought the matter to NCMB. It ruled against Mapua.
June 15, 2007 CA reversed.
Digest by: Angelo Lopez
----------------------------------------------- Issue: WON MIT’s new proposal, regarding faculty ranking and
Topic: Bargaining Procedure – Duty to Bargain evaluation, lawful and consistent with the ratified CBA

Ponente: J. Quisimbing Ruling:

Facts: No, as observed by Office of the Voluntary Arbitrators, the evaluation

1. Private respondent Mapua Institute of Technology (MIT) hired system differs from past evaluation practices (e.g., those that give
Arthur Andersen to develop a faculty ranking and more weight to tenure and faculty load) such that the system can lead
compensation system. On January 29, 2001, in the 5th CBA to a demotion in rank for a faculty member.
negotiation meeting, MIT presented the new faculty ranking Noteworthy, Article 253 of the Labor Code states:
instrument to petitioner Faculty Association of Mapua Institute
of Technology (FAMIT). The latter agreed to the adoption and ART. 253. Duty to bargain collectively when there exists a
implementation of the instrument, with the reservation that collective bargaining agreement – When there is a collective
there should be no diminution in rank and pay of the faculty bargaining agreement, the duty to bargain collectively shall
members. On April 17, 2001, FAMIT and MIT entered into a also mean that neither party shall terminate nor modify such
new CBA effective June 1, 2001.4 It incorporated the new agreement during its lifetime. However, either party can serve
ranking for the college faculty in Section 8 of Article V of a written notice to terminate or modify the agreement at least
CBA. sixty (60) days prior to its expiration date. It shall be the duty
2. When the CBA took effect, the Vice President for Academic of both parties to keep the status quo and to continue in full
Affairs issued a memorandum to all deans and subject chairs to force and effect the terms and conditions of the existing
evaluate and re-rank the faculty under their supervision using agreement during the 60-day period and/or until a new
the new ranking instrument. Eight factors were to be agreement is reached by the parties.
considered and given their corresponding weights/points
according to levels attained per factor. Among these were: (1) Until a new CBA is executed by and between the parties, they are
educational attainment; (2) professional honors received; (3) duty-bound to keep the status quo and to continue in full force and
relevant training, etc. effect the terms and conditions of the existing agreement. The law
3. After a month, MIT called FAMIT’s attention to what it does not provide for any exception nor qualification on which
perceived to be flaws or omissions in the CBA signed by the economic provisions of the existing agreement are to retain its force
parties. MIT requested for an amendment of CBA annexes. and effect. Therefore, it must be understood as encompassing all the
4. FAMIT rejected the proposal. It said that these changes would terms and conditions in the said agreement.
constitute a violation of the ratified 2001 CBA and result in the
diminution of rank and benefits of FAMIT college faculty. It The CBA during its lifetime binds all the parties. The provisions of the
argued that the proposed amendment in the ranking system for CBA must be respected since its terms and conditions "constitute the
the college faculty revised the point ranges earlier agreed upon law between the parties." Those who are entitled to its benefits can
invoke its provisions. In the event that an obligation therein imposed is
not fulfilled, the aggrieved party has the right to go to court and ask
redress.14 The CBA is the norm of conduct between petitioner and
private respondent and compliance therewith is mandated by the
express policy of the law.

Dispositive: Petition is Granted.

Doctrine:
Until a new CBA is 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 on which
economic provisions of the existing agreement are to retain its force
and effect. Therefore, it must be understood as encompassing all the
terms and conditions in the said agreement.
The CBA during its lifetime binds all the parties. The provisions of the
CBA must be respected since its terms and conditions "constitute the
law between the parties."
 the profits in agreement. In the computation of said ten per cent (10%)
-------------------------------------------------- to [be] distributed as a bonus among the employees and laborers of the
CASE 092 Mactan Workers Union v. Aboitiz [Company] in proportion to their salaries or wages, only the income
GR NO./ SCRA NO. L-30241 derived by the [Company] from the direct operation of its shipyard and
Date June 30, 1972 shop in Lapulapu City, as stated herein-above-commencing from the
Digest by: Anna Beatrice S.Tarrosa earnings during the year 1964, shall be included. Said profit-sharing
-------------------------------------------------- bonus shall be paid by the [Company] to [Associated Labor Union] to
be delivered by the latter to the employees and laborers concerned and
Petitioner: Mactan Workers Union And Tomas Ferrer, As President it shall be the duty of the Associated Labor Union to furnish and
Thereof deliver to the [Company] the corresponding receipts duly signed by the
Respondent: DON RAMON ABOITIZ, President, Cebu Shipyard & laborers and employees entitled to receive the profit-sharing bonus
Engineering Works, Inc.; EDDIE LIM, as Treasurer; JESUS DIAGO, within a period of sixty (60) days from the date of receipt by [it] from
Superintendent of the aforesaid corporation; WILFREDO VIRAY, as the [Company] of the profit-sharing bonus
Resident Manager of the Shipyard & Engineering Works, Inc.; and the
CEBU SHIPYARD & ENGINEERING WORKS, INC., defendants- 2.In compliance with the said CBA 1965 the defendant Cebu Shipyard
appellees; ASSOCIATION LABOR UNION, intervenor-appellant. & Engineering Works, Inc. delivered to the ALU for distribution to the
laborers or employees working with the defendant corporation to the
Ponente: FERNANDO, J profit-sharing bonus corresponding to the first installment for the year
1965. Again in June 1965 the defendant corporation delivered to the
Topic: D. The Collective Bargaining Agreement ALU in the profit-sharing bonus corresponding to the second
Beneficiaries installment for 1965. The members of the Mactan Workers Union
failed to receive their shares in the second installment of bonus
FACTS: because they did not like to go to the office of the ALU to collect
their shares. In accordance with the terms of the collective bargaining
1. Defendant Cebu Shipyard & Engineering Works, Inc. is employing after 60 days, the uncollected shares of the plaintiff union members
laborers and employees belonging to two rival labor unions. Seventy- was returned by the ALU to the defendant corporation. At the
two of these employees or laborers whose names appear in the same time the defendant corporation was advised by the ALU not to
complaint are affiliated with the Mactan Workers Union while the rest deliver the said amount to the members of the Mactan Workers Union
are members of the intervenor Associated Labor Union. The defendant unless ordered by the Court, otherwise the ALU will take such step to
Cebu Shipyard & Engineering Works, Inc. and the Associated Labor protect the interest of its members. Because this warning given by the
Union entered into a 'Collective Bargaining Agreement' ... the pertinent intervenor union the defendant corporation did not pay to the plaintiffs
part of which, agrees to give a profit-sharing bonus to its employees the sum of P4,035.82 which was returned by the Associated Labor
and laborers to be taken from ten per cent (10%) of its net profits or Union, but instead, deposited the said amount with the Labor
net income derived from the direct operation of its shipyard and shop Administrator. For the recovery of this amount this case was filed with
in Lapulapu City and after deducting the income tax and the bonus the lower court.
annually given to its General Manager and the Superintendent and the
members of the Board of Directors and Secretary of the Corporation, CFI- ordering the defendants to deliver to the Associated Labor Union
to be payable in two (2) installments, the first installment being the sum of P4,035.82 for distribution to the employees of the
payable in March and the second installment in June, each year out of defendant corporation who are members of the Mactan Workers
Union; and ordering the intervenor Associated Labor Union, Union.
immediately after receipt of the said amount, to pay the members of
the Mactan Workers Union their corresponding shares in the profit-
sharing bonus for the second installments for the year 1965." 5 DOCTRINE: The labor union who won as sole bargaining agent of
the employees does not act for its members alone. It represents all the
ISSUE/S: employees in such a bargaining unit. Furthermore, what is entitled to
1. WON the ALU as the bargaining agent represents the whole protection is labor, not the labor organization. The latter are merely
bargaining unit or just it members instrumentalities through which their welfare may be promoted and
fostered.
RULING: Whole bargaining unit. The terms and conditions of a
collective bargaining contract constitute the law between the parties.
Those who are entitled to its benefits can invoke its provisions. In the
event that an obligation therein imposed is not fulfilled, the aggrieved
party has the right to go to court for redress. Nor does it suffice as a
defense that the claim is made on behalf of non-members of intervenor
Associated Labor Union, for it is a well-settled doctrine that the
benefits of a collective bargaining agreement extend to the laborers
and employees in the collective bargaining unit, including those who
do not belong to the chosen bargaining labor organization. Any other
view would be a discrimination on which the law frowns. It is
appropriate that such should be the case. the right to be the exclusive
representative of all the employees in an appropriate collective
bargaining unit is vested in the labor union 'designated or selected' for
such purpose 'by the majority of the employees' in the unit
concerned." 9 If it were otherwise, the highly salutory purpose and
objective of the collective bargaining scheme to enable labor to secure
better terms in employment condition as well as rates of pay would be
frustrated insofar as non-members are concerned, deprived as they are
of participation in whatever advantages could thereby be gained. The
labor union that gets the majority vote as the exclusive bargaining
representative does not act for its members alone. It represents all the
employees in such a bargaining unit. It is not to be indulged in any
attempt on its part to disregard the rights of non-members. Yet that is
what intervenor labor union was guilty of, resulting in the complaint
filed on behalf of the laborers, who were in the ranks of plaintiff
Mactan Labor Union.

DISPOSITIVE: In favor of Petitioner. The decision of the lower court

of February 22, 1968 is affirmed. Costs against Associated Labor
-------------------------------------------------- HELD: No. The employees are not entitled to the claimed salary
093 Norkis Free and Independent Workers Union v. Norkis increase, simply because they are not within the coverage of the Wage
Trading Co. Order, as they were already receiving salaries greater than the
G.R. No. 157098 minimum fixed by the Order.
June 30, 2005
Digested by: Carl Au We cannot sustain petitioner, even if we assume that its contention is
-------------------------------------------------- right and that the implementation of any government-decreed increase
under the CBA is absolute.
Petitioner: NORKIS FREE AND INDEPENDENT WORKERS
UNION The CBA is no ordinary contract, but one impressed with public
Respondents: NORKIS TRADING COMPANY interest. Therefore, it is subject to special orders on wages, such as
Ponente: PANGANIBAN, J. those issued by the RTWPB. the implementation of a wage increase
for respondents employees should be controlled by the stipulations of
FACTS: Wage Order No. ROVII-06.
1. On January 27, 1998, a Memorandum of Agreement was
forged between the parties wherein Norkis Trading Corp shall Concededly, there is an increase necessarily resulting from raising the
grant a salary increase to all regular and permanent employees minimum wage level, but not across-the-board. Indeed, a “double
as follows: burden” cannot be imposed upon an employer except by clear
a. Ten pesos per day increase effective August 1, 1997; provision of law. It would be unjust, therefore, to interpret Wage Order
b. Ten pesos per day increase effective August 1, 1998. On No. ROVII-06 to mean that respondent should grant an across-the-
March 10, 1998 board increase. Such interpretation of the Order is not sustained by its
2. The RTWPB of Region VII issued Wage Order ROVII-06 text
which established the minimum wage of P165.00, by
mandating a wage increase of five (P5.00) pesos per day DOCTRINE: The CBA is no ordinary contract, but one impressed
beginning April 1, 1998, thereby raising the daily minimum with public interest. Therefore, it is subject to special orders on wages,
wage to P160.00 and another increase of five (P5.00) pesos per such as those issued by the RTWPB
day beginning October 1, 1998, thereby raising the daily
minimum wage to P165.00 per day. DISPOSITIVE: WHEREFORE, the Petition is DENIED, and the
3. In accordance with the Wage Order and Section 2, Article XII assailed Decision and Resolution AFFIRMED. Costs against
of the CBA, petitioner demanded an across-the-board increase. petitioner.
4. Respondent, however, refused to implement the Wage Order,
insisting that since it has been paying its workers the new
minimum wage of P165.00 even before the issuance of the
Wage Order, it cannot be made to comply with said Wage
Order.

ISSUE: Whether respondent violated the CBA in its refusal to grant its
employees an across-the-board increase as a result of the passage of
Wage Order No. ROVII-06?
 and should not include other increases in benefits received
------------------------------------------------------------------------------------- by employees
CASE 094 University of San Agustin vs. University of San Agustin 5. resort to the existing grievance machinery having failed, the
Employees Union-FFW parties agreed to submit the case to voluntary arbitration.
G.R. No. 177594 | July 23, 2009 6. VA Arriola of DOLE-NCMB in favor of respondent:
Digest by: Kayelyn Lat - The salary increases shall be paid out of 80% of the TIP
--------------------------------------------------------------------------------- should the same be higher than P1, 500
Petitioner: University of San Agustin, Inc.
Respondent: University of San Agustin Employees Union-FFW - The existing CBA is the law between the parties, and as it
Ponente: J. Carpio-Morales is not contrary to law, morals and public policy and it
having been shown that the parties entered into it
Topic: The CBA – Interpretation, Administration and Enforcement voluntarily, it should be respected.
- As to petitioner’s deduction of scholarship grants and
tuition fee discounts from the TIP, it is invalid, petitioner
FACTS: having waived the collection thereof when it granted the
1. July 27, 2000, petitioner forged with the University of San same – a waiver which its employees had nothing to do
Agustin Employees Union-FFW (respondent) a Collective with – and the employees should not be made to bear or
Bargaining Agreement (CBA) effective for five (5) years or suffer from the burden
from July, 2000 to July, 2005. 7. Petitioner filed MR; denied
2. Among other things, the parties agreed to include a provision 8. It appealed to CA
on salary increases based on the incremental tuition fee 9. CA:
increases or tuition incremental proceeds (TIP) and pursuant to - the questioned CBA provision is clear and unambiguous,
Republic Act No. 6728, The Tuition Fee Law.
hence, it should be interpreted literally to mean that 80% of
3. It appears that for the School Year 20012002, the parties
the TIP or P1,500, whichever is higher, is to be allotted for
disagreed on the computation of the salary increases.
the employees’ salary increases
4. Respondent:
- refused to accept petitioner’s proposed across-the-board - by its very nature, the TIP excludes any sum which
petitioner did not obtain or realize, hence, it is only fair that
salary increase of P1, 500 per month and its subtraction
the same be deducted.
from the computation of the TIP of the scholarships and
tuition fee discounts it grants to deserving students and its - The appellate court noted, however, that as to scholarship
employees and their dependents grants and tuition fee discounts which are fully or partly
- likewise rejected petitioner’s interpretation of the term subsidized by the government or private institutions and
individuals, petitioner should include them in the TIP
“salary increases” as referring not only to the increase in
computation.
salary but also to corresponding increases in other benefits
- the provision in question referred to “salary increases” 10. Petitioner’s Motion for Partial Reconsideration of the CA’s
alone, hence, the phrase “P1, 500 or 80% of the TIP, decision on the interpretation of the CBA provision, as well as
whichever is higher,” should apply only to salary increases
 respondent’s MR of the decision on computation of the TIP,
was denied. A reading of the abovequoted provision of the CBA shows that the
11. Hence, the present petition. parties agreed that 80% of the TIP or at the least the amount of P1,500
is to be allocated for individual salary increases.

Petitioner: The CBA does not speak of any other benefits or increases which
- like the VA, the appellate court erred in interpreting the would be covered by the employees’ share in the TIP, except salary
questioned provision of the abovequoted Sec. 3, Art. VIIII of increases. The CBA reflects the incorporation of different provisions to
the CBA, since Sec. 5(2) of R.A. 6728 only mandates that 70% cover other benefits such as Christmas bonus (Art. VIII, Sec. 1),
of the TIP of academic institutions is to be set aside for service award (Art. VIII, Sec. 5), leaves (Article IX), educational
employees’ salaries, allowances and other benefits, while at benefits (Sec. 2, Art. X), medical and hospitalization benefits (Secs. 3,
least 20% thereof is to go to the improvement, modernization 4 and 5, Art. 10), bereavement assistance (Sec. 6, Art. X), and signing
of buildings, equipment, libraries and other school facilities. bonus (Sec. 8, Art. VIII), without mentioning that these will likewise
be sourced from the TIP. Thus, petitioner’s belated claim that the 80%
- the interpretation of the provision that 80% of the TIP should TIP should be taken to mean as covering ALL increases and not
go to salary increases alone, to the exclusion of other benefits, merely the salary increases as categorically stated in Sec. 3, Art. VIII
is contrary to R.A. 6728 of the CBA does not lie.

Respondent: In the present case, petitioner could have, during the

- petitioner never claimed that its consent to the CBA was CBA negotiations, opposed the inclusion of or renegotiated the
vitiated with fraud, mistake or intimidation, and that petitioner provision allotting 80% of the TIP to salary increases alone, as it was
has always been aware of the provisions of R.A. 6728 and was and is not under any obligation to accept respondent’s demands hook,
even assisted by its accountants, internal and external legal line and sinker.
counsels during the CBA negotiations, hence, it can not now
renege on its commitment under Sec. 3. Art. VIII of the CBA. The records are thus bereft of any showing that petitioner had made it
clear during the CBA negotiations that it intended to source not only
ISSUE: Whether or not the CBA provision only applies to salary the salary increases but also the increases in other employee benefits
increases from the 80% of the TIP. Absent any proof that petitioner’s consent
was vitiated by fraud, mistake or duress, it is presumed that it entered
HELD: YES into the CBA voluntarily, had full knowledge of the contents thereof,
and was aware of its commitments under the contract.
RATIO:
DISPOSITIVE PORTION: Petitioner WON.
It is a familiar and fundamental doctrine in labor law that the CBA is
the law between the parties and they are obliged to comply with its DOCTRINE: It is a familiar and fundamental doctrine in labor law
provisions. If the terms of a contract, in this case the CBA, are clear that the CBA is the law between the parties and they are obliged to
and leave no doubt upon the intention of the contracting parties, the comply with its provisions. If the terms of a contract, in this case the
literal meaning of their stipulations shall control. CBA, are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of their stipulations shall
control.
 Article XI, Section 1 (e) (5) of the May 2, 1989 Collective Bargaining
------------------------------------------------------------------------- Agreement 8between petitioner company and the union states:
CASE 095 Pantranco North Express, Inc. v. NLRC
GR No. 95940 Section 1. The COMPANY shall formulate a retirement plan with the
Date: July 24, 1996 following main features:
Digest by: Jen Balmeo
------------------------------------------------------------------------- (e) The COMPANY agrees to grant the retirement benefits herein
provided to regular employees who may be separated from the
Petitioner: Pantranco North Express COMPANY for any of the following reasons:
Respondent: NLRC and Suiga
Ponente: J. Panganiban (5) Upon reaching the age of sixty (60) years or upon completing
Topic: Interpretation, Administration and Enforcement nature. twenty-five (25) years of service to the COMPANY, whichever comes
first, and the employee shall be compulsory retired and paid the
Facts: retirement benefits herein provided."

Private respondent was hired by petitioner in 1964 as a bus conductor. The said Code provides: Art. 287. Retirement . — Any employee may
He eventually joined the Pantranco Employees Association-PTGWO. be retired upon reaching the retirement age established in the
Collective Bargaining Agreement or other applicable employment
He continued in petitioner's employ until August 12, 1989, when he contract. In case of retirement, the employee shall be entitled to
was retired at the age of fifty-two (52) after receive such retirement benefits as he may have earned under existing
having rendered twenty five years' service. The basis of his retirement laws and any collective bargaining or other agreement."
was the compulsory retirement provision of the collective bargaining
agreement between the petitioner and the aforenamed union. The Court agrees with petitioner and the Solicitor General. Art. 287 of
the Labor Code as worded permits employers and employees to fix the
On February 1990, private respondent filed a applicable retirement age at below60 years. Moreover, providing for
complaint for illegal dismissal against petitioner with NLRC. early retirement does not constitute diminution
The complaint was consolidated with two other cases of illegal of benefits. In almost all countries today, early retirement, i.e., before a
dismissal having similar facts and issues, filed by other employees, ge 60, isconsidered a reward for services rendered since it enables an
non-union members. employee to reap the fruits of his labor — particularly retirement
benefits, whether lump-sum or otherwise — at an earlier age, when
Issue: WON the CBA stipulation on compulsory retirement after said employee, in presumably better physical and mental condition,
twenty-five years of service is legal and enforceable. can enjoy them better and longer.

Held: The CBA stipulation is legal and enforceable. As a matter of fact, one of the advantages of early retirement is that the
corresponding retirement benefits, usually consisting of a substantial
The bone of contention in this case is the provision on compulsory reti cash windfall, can early on be put to productive and profitable uses by
rement after 25years of service. way of income-generating investments, thereby affording a more
significant measure of financial security and independence for the
retiree who, up till then, had to contend with life's vicissitudes within
the parameters of his fortnightly or weekly wages. Thus we are now DISPOSITIVE: Pantranco won. Petition granted.
seeing many CBAs with such early retirement provisions. And the
same cannot be considered a diminution of employment benefits. DOCTRINE: A CBA incorporates the agreement reached after
negotiations between employer and bargaining agent with respect to
Being a product of negotiation, the CBA between the petitioner and the terms and conditions of employment. A CBA is not an ordinary
union intended the provision contract. "(A)s a labor contract within the contemplation of Article
on compulsory retirement to be beneficial to the employees-union 1700 of the Civil Code of the Philippines which governs the relations
members, including herein private respondent. When private between labor and capital, (it) is not merely contractual in nature but
respondent ratified the CBA with the union, he not only agreed to the impressed with public interest, thus it must yield to the common
CBA but also agreed to conform to and abide by its provisions. Thus, good. As such, it must be construed liberally rather than narrowly and
it cannot be said that he was illegally dismissed when the CBA technically, and the courts must place a practical and realistic
provision on compulsory retirement was applied to his case. construction upon it, giving due consideration to the context in which
it is negotiated and purpose which it is intended to serve."
Incidentally, we call attention to Republic Act No. 7641, known
as "The Retirement Pay Law", which went into effect on January 7,
1993. Although passed many years after the
compulsory retirement of herein
private respondent, nevertheless, the said Statute sheds light on the
present discussion when it amended

Art. 287 of the Labor Code, to make it read as follows: Retirement . —

Any employee may be retired upon reaching the retirement
age establish in the collective bargaining agreement or other applicable
employment contract. In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the establishment, an
employee upon reaching the age of sixty (60) years or more, but not
beyond sixty-five (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in the said
establishment may retire”.

The aforequoted provision makes clear the intention and spirit of the la
w to give employers and employees a free hand to determine and agree
upon the terms and conditions of retirement. Providing in a CBA for
compulsory retirement of employees after twenty-five (25) years of
service is legal and enforceable so long as the parties agree to
be governed by such CBA. The law presumes that employees know
what they want and what is good for them absent any showing that
fraud or intimidation was employed to secure their consent thereto.
 (1) Whether or not free meals should be granted after exactly 3 hrs of
-------------------------------------------------------------------- work
CASE 096 DOLE PHILS. INC. VS. PAWIS NG MAKABAYANG
OBRERO (2) Whether or not the petitioner has the right to determine when to
G.R. No. 146650 January 13, 2003 grant free meals and its conditions
Digested by: Lanz Olives
-------------------------------------------------------------------- RULING:

Petitioner: DOLE PHILIPPINES, INC. (1) YES. The same meal allowance provision is found in their
Respondents: PAWIS NG MAKABAYANG OBRERO (PAMAO- previous CBAs, the 1985-1988 CBA and the 1990-1995 CBA.
NFL) However, it was amended in the 1993-1995 CBA, by changing the
Nature of the Case: a petition for review under rule 45 phrase “after 3 hrs of overtime work” to “after more than 3 hrs of
Ponente: Corona, J. overtime work”. In the 1996-2001 CBA, the parties had to negotiate
the deletion of the said phrase in order to revert to the old provision.
TOPIC: The Collective Bargaining Agreement; Nature Clearly, both parties had intended that free meals should be given after
exactly 3 hrs of overtime work.
FACTS:
The disputed provision is clear and unambiguous, hence the literal
The petitioner and the respondent executed a CBA for the period meaning shall prevail. No amount of legal semantics can convince the
starting February 1996 to February 2001. Under the bonuses and Court that “after more than” means the same as “after”.
allowances section of the said CBA, a P10 meal allowance shall be
given to employees who render at least 2 hrs of overtime work and (2) NO. The exercise of management prerogative is not unlimited. It is
free meals shall be given after 3 hours of actual overtime work. subject to the limitations provided by law. In this case, there was a
CBA, and compliance therewith is mandated by the express policy of
Pursuant to this provision, some departments of granted free meals the law.
after exactly 3 ours of work. However, other departments granted free
meals only after more than 3 hours of overtime work. DISPOSITIVE: PAWIS NG MAKABAYANG OBRERO won.

The respondent filed a complaint against Dole, saying that free meals DOCTRINE:
should be granted after exactly 3 hrs of overtime work, not after more
than 3 hrs. The parties agreed to settle the dispute to voluntary The exercise of management prerogative is not unlimited. It is subject
arbitration. It was decided in favor of the respondent, directing the to the limitations found in law, a collective bargaining agreement or
petitioner to grant free meals after exactly 3 hrs of overtime work. CA the general principles of fair play and justice.9 This situation
affirmed. constitutes one of the limitations. The CBA is the norm of conduct
between petitioner and private respondent and compliance therewith is
mandated by the express policy of the law.
ISSUE:
-------------------------------------------------- 2004 and SY2004-2005. During the negotiations, the parties could
not agree on the manner of computing the TIP, thus the need to
097 USAEU-FFW V. CA undergo preventive mediation proceedings before the National
GR NO. 169632 Conciliation and Mediation Board (NCMB), Iloilo City.
March 28, 2006
Digest by: Metha Dawn H. Orolfo 5. The computation of TIP was not resolved. This development
-------------------------------------------------- prompted the Union to declare a bargaining deadlock grounded on
the parties’ failure to arrive at a mutually acceptable position on the
Petitioner: University Of San Agustin Employees’ Union-Ffw manner of computing the seventy percent (70%) of the net TIP to
(USAEU-FFW), And Individual Union Officers Theodore Neil Lasola, be allotted for salary.
Merlyn Jara, Julius Mario, Flaviano Manalo, Rene Cabalum,
Herminigildo Calzado, Ma. Luz Calzado, Ray Anthony Zuñiga, 6. Thereafter, the Union filed a Notice of Strike before the NCMB
Rizalene Villanueva, Rudante Dolar, Rover John Tavarro, Rena Lete, which was expectedly opposed by the University in a Motion to
Alfredo Goriona, Ramon Vacante And Maximo Montero, Strike Out Notice of Strike and to Refer the Dispute to Voluntary
Respondent: CA and And University Of San Agustin Arbitration, invoking the "No strike, no lockout" clause of the
Ponente: Garcia parties’ CBA. The NCMB, however, failed to resolve the
University’s motion.
Topic: Interpretation, Administration and Enforcement of CBA
7. The Union staged a strike. At 6:45 a.m. of the same day, Sheriffs
FACTS: Francisco L. Reyes and Rocky M. Francisco had arrived at San
Agustin University to serve the AJO on the Union. At the main
1. Petitioner Union is the duly recognized collective bargaining unit entrance of the University, the sheriffs saw some elements of the
for teaching and non-teaching rank-and-file personnel of the Union at the early stages of the strike. There they met Merlyn Jara,
University while the other individual petitioners are its officers. the Union’s vice president, upon whom the sheriffs tried to serve
2. On July 27, 2000, the parties entered into a 5-year CBA which, the AJO, but who, after reading it, refused to receive the same,
among other things, provided that the economic provisions thereof citing Union Board Resolution No. 3 naming the union president
shall have a period of three (3) years or up to 2003. as the only person authorized to do so. The sheriffs explained to
Complementary to said provisions is Section 3 of Article VIII of Ms. Jara that even if she refused to acknowledge receipt of the
the CBA providing for salary increases for School Years (SY) AJO, the same would be considered served. Sheriff Reyes further
2000-2003, such increase to take the form of either a lump sum or informed the Union that once the sheriffs post the AJO, it would be
a percentage of the tuition incremental proceeds (TIP). considered received by the Union.

3. The CBA contained a "no strike, no lockout" clause and a 8. At approximately 8:45 a.m., the sheriffs posted copies of the AJO
grievance machinery procedure to resolve management-labor at the main gate of San Agustin University, at the main entrance of
disputes, including a voluntary arbitration mechanism should the its buildings and at the Union’s office inside the campus. At 9:20
grievance committee fail to satisfactorily settle such disputes. a.m., the sheriffs served the AJO on the University.

4. Pursuant to the CBA, the parties commenced negotiations for the

economic provisions for the remaining two years, i.e., SY2003-
9. Notwithstanding the sheriffs’ advice as to the legal implication of Lacerna a former DOLE Regional Director. Atty. Lacerna however
the Union’s refusal to be served with the AJO, the Union went refused to be officially served the Order again pointing to Board
ahead with the strike. Resolution No. 3 passed by the Union officers. Atty. Lacerna then
informed the undersigned Sheriffs that the Union president will accept
10. University filed a Petition to Declare Illegal Strike and Loss of the Order at around 5:00 o’clock in the afternoon. Atty. Lacerna told
Employment Status7 at the National Labor Relations Commission the undersigned Sheriff that only when the Union president receives
(NLRC) Sub-regional Arbitration Branch No. VI in Iloilo City. the Order at 5:00 p.m. shall the Union recognize the Secretary of
Labor as having assumed jurisdiction over the labor dispute.
ISSUE: WON the CBA clause on no strike no lockout was violated?
Thus, we see no reversible error in the CA’s finding that the strike of
RULING: YES. September 19, 2003 was illegal. Consequently, the Union officers were
deemed to have lost their employment status for having knowingly
When the SOLE assumes jurisdiction over a labor dispute in an participated in said illegal act.
industry indispensable to national interest or certifies the same to the
NLRC for compulsory arbitration, such assumption or certification We likewise find logic in the CA’s directive for the herein parties to
shall have the effect of automatically enjoining the intended or proceed with voluntary arbitration as provided in their CBA. As we see
impending strike or lockout. Moreover, if one had already taken place, it, the issue as to the economic benefits, which included the issue on
all striking workers shall immediately return to work and the employer the formula in computing the TIP share of the employees, is one that
shall immediately resume operations and readmit all workers under the arises from the interpretation or implementation of the CBA. To be
same terms and conditions prevailing before the strike or lockout. In sure, the parties’ CBA provides for a grievance machinery to resolve
Trans-Asia Shipping Lines, Inc., et al. vs. CA, et al., the Court any "complaint or dissatisfaction arising from the interpretation or
declared that when the Secretary exercises these powers, he is granted implementation of the CBA and those arising from the interpretation or
great breadth of discretion in order to find a solution to a labor dispute. enforcement of company personnel policies." Moreover, the same
The most obvious of these powers is the automatic enjoining of an CBA provides that should the grievance machinery fail to resolve the
impending strike or lockout or the lifting thereof if one has already grievance or dispute, the same shall be "referred to a Voluntary
taken place. Assumption of jurisdiction over a labor dispute, or the Arbitrator for arbitration and final resolution."
certification of the same to the NLRC for compulsory arbitration,
always co-exists with an order for workers to return to work However, through no fault of the University these processes were not
immediately and for employers to readmit all workers under the same exhausted. It must be recalled that while undergoing preventive
terms and conditions prevailing before the strike or lockout. mediation proceedings before the NCMB, the Union declared a
bargaining deadlock, filed a notice of strike and thereafter, went on
In this case, the AJO was served at 8:45 a.m. of September 19, 2003. strike. The University filed a Motion to Strike Out Notice of Strike and
The strikers then should have returned to work immediately. However, to Refer the Dispute to Voluntary Arbitration but the motion was not
they persisted with their refusal to receive the AJO and waited for their acted upon by the NCMB. As borne by the records, the University has
union president to receive the same at 5:25 p.m. The Union’s defiance been consistent in its position that the Union must exhaust the
of the AJO was evident in the sheriff’s report: grievance machinery provisions of the CBA which ends in voluntary
arbitration.
We went back to the main gate of the University and there NCMB
Director Dadivas introduced us to the Union lawyer, Atty. Mae
The University’s stance is consistent with Articles 261 and 262 of the
Labor Code, as amended.

DISPOSITIVE: University of San Agustin won.

DOCTRINE: The University filed a Motion to Strike Out Notice of

Strike and Refer the Dispute to Voluntary Arbitration precisely to call
the attention of the NCMB and the Union to the fact that the CBA
provides for a grievance machinery and the parties’ obligation to
exhaust and honor said mechanism. Accordingly, the NCMB should
have directed the Union to honor its agreement with the University to
exhaust administrative grievance measures and bring the alleged
deadlock to voluntary arbitration. Unfortunately, the NCMB did not
resolve the University’s motion thus paving the way for the strike on
September 19, 2003 and the deliberate circumvention of the CBA’s
grievance machinery and voluntary arbitration provisions.

As we see it, the failure or refusal of the NCMB and thereafter the
SOLE to recognize, honor and enforce the grievance machinery and
voluntary arbitration provisions of the parties’ CBA unwittingly
rendered said provisions, as well as, Articles 261 and 262 of the Labor
Code, useless and inoperative. As here, a union can easily circumvent
the grievance machinery and a previous agreement to resolve
differences or conflicts through voluntary arbitration through the
simple expedient of filing a notice of strike. On the other hand,
management can avoid the grievance machinery and voluntary
arbitration provisions of its CBA by simply filing a notice of lockout.
-------------------------------------------------- they were the leaders in a plan to form a union to compete and
CASE 098 ATLAS FARM VS NLRC replace the existing management-dominated union.
G.R. No. 142244 6. On November 9, 1993, the labor arbiter dismissed their
November 18, 2002 complaints on the ground that the grievance machinery in the
Digest by: Michelle Vale Cruz collective bargaining agreement (CBA) had not yet been
-------------------------------------------------- exhausted. Private respondents availed of the grievance
process, but later on refiled the case before the NLRC in
Petitioner: ATLAS FARMS, INC. Region IV. They alleged lack of sympathy on petitioners part to
Respondent: NLRC, JAIME O. DELA PENA and MARCIAL I. engage in conciliation proceedings.
ABION 7. Their cases were consolidated in the NLRC. At the initial
Ponente: mandatory conference, petitioner filed a motion to dismiss, on
the ground of lack of jurisdiction, alleging private respondents
Topic: CBA: grievance procedure themselves admitted that they were members of the employees
union with which petitioner had an existing CBA. This being
FACTS: the case, according to petitioner, jurisdiction over the case
1. Private respondents Jaime O. dela Pena and Marcial Abion belonged to the grievance machinery and thereafter the
were both employees of Atlas Farms Inc who were terminated voluntary arbitrator, as provided in the CBA.
on separate causes. 8. Labor Arbiter: The labor arbiter dismissed the complaint for
2. Dela Pena was allegedly caught urinating and defecating on lack of merit, finding that the case was one of illegal dismissal
company premises not intended for the purpose. On the other and did not involve the interpretation or implementation of any
hand, Abion caused the clogging of the fishpond drainage CBA provision. He stated that Article 217 (c) of the Labor
resulting in damages worth several hundred thousand pesos Code was inapplicable to the case. Further, the labor arbiter
when he improperly disposed of the cut grass and other waste found that although both complainants did not substantiate
materials into the ponds drainage system. their claims of illegal dismissal, there was proof that private
3. A formal notice was issued directing them to explain within 24 respondents voluntarily accepted their separation pay and
hours why disciplinary action should not be taken against them petitioners financial assistance.
for violating company rules and regulations but they refused to 9. NLRC: Reversed Labor Arbiter
receive the formal notice. Both were terminated on March 20,
1993 and October 27, 1992 respectively. They also ISSUE: Whether or not the labor arbiter and the NLRC had
acknowledged receipt of their separation pays. jurisdiction to decide complaints for illegal dismissal
4. Both private respondents worked seven days a week, including
holidays, without holiday pay, rest day pay, service incentive RULING: YES. Article 217 of the Labor Code provides that labor
leave pay, and night shift differential pay. When terminated, arbiters have original and exclusive jurisdiction over termination
Abion was receiving a monthly salary of P4,500 while dela disputes. A possible exception is provided in Article 261 of the Labor
Pena was receiving P180 pesos daily wage, or an average Code, which provides that –
monthly salary of P5,402.
5. Pea and Abion filed separate complaints for illegal dismissal The Voluntary Arbitrator or panel of voluntary arbitrators shall
that were later consolidated. Both claimed that their have original and exclusive jurisdiction to hear and decide all
termination from service was due to petitioners suspicion that unresolved grievances arising from the interpretation or
 implementation of the Collective Bargaining Agreement and In the case of Maneja vs. NLRC, we held that the dismissal case does
those arising from the interpretation or enforcement of not fall within the phrase grievances arising from the interpretation or
company personnel policies referred to in the immediately implementation of the collective bargaining agreement and those
preceding article. Accordingly, violations of a Collective arising from the interpretation or enforcement of company personnel
Bargaining Agreement, except those which are gross in policies.
character, shall no longer be treated as unfair labor practice and
shall be resolved as grievances under the Collective Bargaining DISPOSITIVE: Respondents won
Agreement. For purposes of this article, gross violations of
Collective Bargaining Agreement shall mean flagrant and or DOCTRINE: Where the dispute is just in the interpretation,
malicious refusal to comply with the economic provisions of implementation or enforcement stage, it may be referred to the
such agreement. grievance machinery set up in the CBA, or brought to voluntary
arbitration. But, where there was already actual termination, with
The Commission, its Regional Offices and the Regional alleged violation of the
Directors of the Department of Labor and Employment shall
not entertain disputes, grievances or matters under the
exclusive and original jurisdiction of the Voluntary Arbitrator
or panel of Voluntary Arbitrators and shall immediately dispose
and refer the same to the grievance Machinery or Arbitration
provided in the Collective Bargaining Agreement.

Coming to the merits of the petition, the NLRC found that petitioner
did not comply with the requirements of a valid dismissal. For a
dismissal to be valid, the employer must show that: (1) the employee
was accorded due process, and (2) the dismissal must be for any of the
valid causes provided for by law. No evidence was shown that private
respondents refused, as alleged, to receive the notices requiring them
to show cause why no disciplinary action should be taken against
them. Without proof of notice, private respondents who were
subsequently dismissed without hearing were also deprived of a
chance to air their side at the level of the grievance machinery. Given
the fact of dismissal, it can be said that the cases were effectively
removed from the jurisdiction of the voluntary arbitrator, thus
placing them within the jurisdiction of the labor arbiter. Where
the dispute is just in the interpretation, implementation or
enforcement stage, it may be referred to the grievance machinery
set up in the CBA, or brought to voluntary arbitration. But, where
there was already actual termination, with alleged violation of the
employees’ rights, it is already cognizable by the labor arbiter.
 6. JICC informed Jean Legaspi that she was selected as a recipient of
the scholarship.
--------------------------------------------------
CASE 099 HOLY CROSS OF DAVAO COLLEGE, INC. v. HOLY 7. Consequently, she requested petitioner to allow her to be on study
CROSS FACULTY UNION-KAMAPI leave with grant-in aid equivalent to her 18 months salary and
G.R. No. 156098 allowance, pursuant to Section 1, Article XIII of the CBA.
June 27, 2005
8. However, petitioner denied her request, claiming that she is not
Digest by: Thea Denilla entitled to grant-in aid under its "Policy Statement and Guidelines
-------------------------------------------------- for Trips Abroad for Professional Growth."

Petitioner: Holy Cross of Davao College, Inc. 9. Nevertheless, petitioner granted her 12 months study leave without
Respondent: Holy Cross of Davao Faculty Union - KAMAPI pay.
Ponente: Sandoval-Gutierrez, J.
10. Before she left for Japan, she asked respondent union KAMPI to
submit to the Grievance Committee petitioner’s refusal to grant her
Topic: Contract Ambiguity claim for grant-in aid, but the same was not settled.

FACTS: 11. Respondent filed with the National Conciliation and Mediation
Board (NCMB), Regional Office No. XI, Davao City, a complaint
1. Petitioner Holy Cross of Davao College, Inc. is a tertiary level for payment of grant-in aid against petitioner.
educational institution at Sta. Ana Avenue, Davao City.
2. Petitioner Holy Cross of Davao College, Inc. and Respondent 12. NCMB: the Voluntary Arbitrator rendered a Decision ordering
Holy Cross of Davao College Faculty Union – KAMAPI executed petitioner to pay respondent’s member, Jean A. Legaspi, her grant-
a collective bargaining agreement (CBA) providing for a faculty in aid benefits.
development scholarship for academic teaching personnel.
13. Petitioner filed an MR but was denied.
3. Petitioner received a letter of invitation for the
1999 Monbusho scholarship grant (In-Service Training for 14. Petitioner filed with the Court of Appeals a petition for review
Teachers) offered and sponsored by the Japanese Government, under Rule 43.
through the Japan Information and Cultural Center (JICC).
15. CA: affirmed the voluntary arbitrator’s decision.
4. This prompted Jean Legaspi, a permanent English teacher in
petitioner’s high school department, to submit her application. 16. Hence, this petition for review on certiorari.

5. Meantime, petitioner issued policy statement and guidelines on

educational trips abroad for the school year 1998 to 1999. ISSUE: Whether or not Jean Legaspi is entitled to grant-in aid benefits
in light of the CBA between the parties.
 Thus, the Court of Appeals did not err in its assailed Decision and
RULING: 1. Yes, Jean Legaspi is entitled to grant-in aid benefits in Resolution.
light of the CBA.
DISPOSITIVE: WHEREFORE, the petition is DENIED. The
Yes, because a careful reading of Section 1, Article XIII of the CBA assailed Decision dated June 5, 2002 and Resolution dated October 18,
provides that: 2002 of the Court of Appeals in CA-G.R. SP No. 65507 are
AFFIRMED. Costs against petitioner.
“xxx Management shall grant to all academic
personnel a grant-in-aid program, where the DOCTRINE: Any doubt or ambiguity in the contract (CBA) between
academic teaching personnel, whenever management and the union members should be resolved in favor of the
scholarship opportunities should arise, be afforded latter. This is pursuant to Article 1702 of the Civil Code which
a leave of absence to further their studies in provides: "(I)n case of doubt, all labor legislation and all labor
Institutions of Higher Learning with a grant-in-aid contracts shall be construed in favor of the safety and decent living for
equivalent to their salary and allowance xxx” the laborer."

Along the same line, paragraph 2 of petitioner’s Policy Statement and Contracts which are not ambiguous are to be interpreted according to
Guidelines for Trips Abroad for Professional Growth (SY 1998-1999) their literal meaning and not beyond their obvious intendment
reads:
In Mactan Workers Union vs. Aboitiz, we held that "the terms and
"The school recognizes that educational trips conditions of a collective bargaining contract constitute the law
abroad promote both personal and professional between the parties. Those who are entitled to its benefits can
growth. Hence, employees may travel abroad for invoke its provisions. In the event that an obligation therein imposed
study tours and to attend seminars, conferences, is not fulfilled, the aggrieved party has the right to go to court for
and other related academic pursuits. The school redress."
may provide financial assistance subject to the
following guidelines: x x x x x x”

Moreover, it is said in the CBA that the employee is the official

representative of the school upon recommendation of the office head.
As such, he/she receives regular salary.

The provisions in the CBA state that academic teaching personnel, like
Jean Legaspi, as recipient of a scholarship grant are entitled to a leave
of absence with a grant-in-aid equivalent to their monthly salary
and allowance, provided such grant is to promote their professional
growth or to enhance their studies in institutions of higher learning.
Such provisions need no interpretation for they are clear. Contracts
which are not ambiguous are to be interpreted according to their literal
meaning and not beyond their obvious intendment.
 4) NLRC: declaring that the 186 excluded employees “form part and
--------------------------------------------------------------------- parcel of the then existing rank-and-file bargaining unit” and were,
CASE 100. New Pacific Timber v. NLRC therefore, entitled to the benefits under the CBA.
G.R. No. 124224
March 17, 2000 5) Petitioner: According to petitioner, the provision on wage increase
Digest by: Olive Cachapero in the 1981 to 1984 CBA between petitioner Company and NFL
--------------------------------------------------------------------- provided for yearly wage increases. Logically, these provisions
ended in the year 1984 – the last year that the economic provisions
Topic: Interpretation, Administration and Enforcement; Contract of the CBA were, pursuant to contract and law, effective. Petitioner
Duration and Renewal claims that there is no contractual basis for the grant of CBA
benefits such as wage increases in 1985 and subsequent years,
FACTS: since the CBA stipulates only the increases for the years 1981 to
1) The National Federation of Labor (NFL) was certified as the sole 1984.
and exclusive bargaining representative of all the regular rank-and-
file employees of Petitioner New Pacific Timber & Supply Co., 1st ISSUE: WON the term of an existing CBA, particularly as to its
Inc. (hereinafter referred to as petitioner Company). As such, NFL economic provisions, can be extended beyond the period stipulated
started to negotiate for better terms and conditions of employment therein, and even beyond the three-year period prescribed by law, in
for the employees in the bargaining unit which it represented. the absence of a new agreement.
However, the same was allegedly met with stiff resistance by
petitioner Company, so that the former was prompted to file a RULING:
complaint for unfair labor practice (ULP) against the latter on the YES. The CBA between petitioner Company and NFL remained in
ground of refusal to bargain collectively. full force and effect even beyond the stipulated term, in the
absence of a new agreement; and, therefore, that the economic
2) LA: declared petitioner Company guilty of ULP and the CBA provisions such as wage increases continued to have legal effect.
proposals submitted by the NFL was declared as the CBA between
the regular rank-and-file employees in the bargaining unit and Article 253 of the Labor Code explicitly provides:
petitioner Company. NLRC affirmed. LA directed petitioner ART. 253. Duty to bargain collectively when there exists a
Company to pay 142 employees entitled to the benefits under the collective bargaining agreement. – When there is a collective
CBA. Petitioner Company complied. bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate nor modify such
3) A “Petition for Relief” was filed in behalf of 186 of the private agreement during its lifetime. However, either party can serve a
respondents “Mariano J. Akilit and 350 others” claiming that they written notice to terminate or modify the agreement at least sixty
were wrongfully excluded from enjoying the benefits under the (60) days prior to its expiration date. It shall be the duty of both
CBA since the agreement with NFL and petitioner Company parties to keep the status quo and to continue in full force and
limited the CBA’s implementation to only the 142 rank-and-file effect the terms and conditions of the existing agreement during
employees enumerated. the 60-day period and/or until a new agreement is reached by the
parties.
It is clear from the above provision of law that until a new Collective purpose of Articles 253 and 253-A of the Labor Code which is to curb
Bargaining Agreement has been executed by and between the parties, labor unrest and to promote industrial peace.
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 2nd ISSUE: Are employees hired after the stipulated term of a CBA
does not provide for any exception nor qualification as to which of the entitled to the benefits provided thereunder?
economic provisions of the existing agreement are to retain force and
effect; therefore, it must be understood as encompassing all the terms RULING:
and conditions in the said agreement. YES. The benefits under the CBA in the instant case should be
extended to those employees who only became such after the year
In the case at bar, no new agreement was entered into by and between 1984. To exclude them would constitute undue discrimination and
petitioner Company and NFL pending appeal of the decision in NLRC deprive them of monetary benefits they would otherwise be entitled to
Case No. RAB-IX-0334-82; nor were any of the economic provisions under a new collective bargaining contract to which they would have
and/or terms and conditions pertaining to monetary benefits in the been parties. Since in this particular case, no new agreement had been
existing agreement modified or altered. Therefore, the existing CBA in entered into after the CBA’s stipulated term, it is only fair and just that
its entirety, continues to have legal effect. the employees hired thereafter be included in the existing CBA. This is
in consonance with our ruling that the terms and conditions of a
In a recent case, the Court had ccasion to rule that Articles 253 and collective bargaining agreement continue to have force and effect
253-A mandate the parties to keep the status quo and to continue in beyond the stipulated term when no new agreement is executed by and
full force and effect the terms and conditions of the existing agreement between the parties to avoid or prevent the situation where no
during the 60-day period prior to the expiration of the old CBA and/or collective bargaining agreement at all would govern between the
until a new agreement is reached by the parties. Consequently, the employer company and its employees.
automatic renewal clause provided for by the law, which is deemed
incorporated in all CBA’s, provides the reason why the new CBA can Dispositive: Respondent won.
only be given a prospective effect.
Doctrine: Lopez Sugar Corporation vs. Federation of Free Workers,
To rule otherwise, i.e., that the economic provisions of the existing et.al: Although a CBA has expired, it continues to have legal effects as
CBA in the instant case ceased to have force and effect in the year between the parties until a new CBA has been entered into. It is the
1984, would be to create a gap during which no agreement would duty of both parties to the CBA to keep the status quo, and to continue
govern, from the time the old contract expired to the time a new in full force and effect the terms and conditions of the existing
agreement shall have been entered into. For if, as contended by the agreement during the 60-day period and/or until a new agreement is
petitioner, the economic provisions of the existing CBA were to have reached by the parties
no legal effect, what agreement as to wage increases and other
monetary benefits would govern at all? None, it would seem, if we are
to follow the logic of petitioner Company. Consequently, the
employees from the year 1985 onwards would be deprived of a
substantial amount of monetary benefits which they could have
enjoyed had the terms and conditions of the CBA remained in force
and effect. Such a situation runs contrary to the very intent and
 intense pressure from PALEA members, the unions directors
----------------------------------------------- subsequently resolved to reject Tan’s offer.
CASE 101 Rivera vs. Espiritu 4. PALEA informed the Department of Labor and Employment
G.R. No. 1335547 (DOLE) that it had no objection to a referendum on the Tans
Jan. 23, 2002 offer. 2,799 out of 6,738 PALEA members cast their votes in
Digest by: Angelo Lopez the referendum under DOLE supervision held on September
----------------------------------------------- 21-22, 1998. Of the votes cast, 1,055 voted in favor of Tans
Topic: Collective Bargaining Agreement – Interpretation, offer while 1,371 rejected it. PAL ceased its operations and sent
Administration and Enforcement : Contract Duration and Renewal notices of termination to its employees.
5. The PALEA board again wrote the President proposing the
Ponente: J. Quisimbing following terms and conditions, subject to ratification by the
general membership:
Facts: 4.To assure investors and creditors of industrial
1. PAL pilots affiliated with the Airline Pilots Association of the peace, PALEA agrees, subject to the ratification
Philippines (ALPAP) went on a three-week strike, causing by the general membership, (to) the suspension of
serious losses to the financially beleaguered flag carrier. As a the PAL-PALEA CBA for a period of ten (10)
result, PALs financial situation went from bad to worse. Faced years, provided the following safeguards are in
with bankruptcy, PAL adopted a rehabilitation plan and place:
downsized its labor force by more than one-third. PALEA went
on strike to protest the retrenchment measures adopted by the a. PAL shall continue recognizing PALEA as the
airline, which affected 1,899 union members. The strike ended duly certified bargaining agent of the regular
four days later, when PAL and PALEA agreed to a more rank-and-file ground employees of the Company;
systematic reduction in PALs workforce and the payment of
separation benefits to all retrenched employees. b. The union shop/maintenance of membership
2. President Joseph E. Estrada issued Administrative Order No. provision under the PAL-PALEA CBA shall be
16 creating an Inter-Agency Task Force (Task Force) to address respected.
the problems of the ailing flag carrier. PAL management
submitted to the Task Force an offer by private respondent 6. Among the signatories to the letter were herein petitioners
Lucio Tan, Chairman and Chief Executive Officer of PAL, of a Rivera, Ramiso, and Aranas, as officers and/or members of the
plan to transfer shares of stock to its employees. One provision PALEA Board of Directors. PAL management accepted the
reads: PALEA proposal and the necessary referendum was scheduled.
“xxx 3. In order for PAL to attain (a) degree of 7. On October 2, 1998, 5,324 PALEA members cast their votes in
normalcy while we are tackling its problems, we a DOLE-supervised referendum. Of the votes cast, 61% were
would request for a suspension of the Collective in favor of accepting the PAL-PALEA agreement, while 34%
Bargaining Agreements (CBAs) for 10 years xxx” rejected it. PAL resumed domestic operations. On the same
3. The Board of Directors of PALEA voted to accept Tan’s offer date, seven officers and members of PALEA filed this instant
and requested the Task Forces assistance in implementing the petition to annul the agreement entered into between PAL and
same. Union members, however, rejected Tan’s offer. Under PALEA.
 8. petitioners contend that the controverted PAL-PALEA Nothing in Article 253-A, prohibits the parties from waiving or
agreement is void because it abrogated the right of workers to suspending the mandatory timetables and agreeing on the remedies to
self-organization and their right to collective bargaining. enforce the same.
Petitioners claim that the agreement was not meant merely to
suspend the existing PAL-PALEA CBA, which expires on In the instant case, it was PALEA, as the exclusive bargaining agent of
September 30, 2000, but also to foreclose any renegotiation or PALs ground employees, that voluntarily entered into the CBA with
any possibility to forge a new CBA for a decade or up to 2008. PAL. It was also PALEA that voluntarily opted for the 10-year
It violates the protection to labor policy laid down by the suspension of the CBA. Either case was the unions exercise of its right
Constitution. to collective bargaining. The right to free collective bargaining, after
all, includes the right to suspend it.
Issue:
WON the PAL-PALEA agreement of September 27, 1998, stipulating The acts of public respondents in sanctioning the 10-year suspension
the suspension of the PAL-PALEA CBA unconstitutional and contrary of the PAL-PALEA CBA did not contravene the protection to labor
to public policy. policy of the Constitution. The agreement afforded full protection to
labor; promoted the shared responsibility between workers and
Ruling: employers; and the exercised voluntary modes in settling disputes,
including conciliation to foster industrial peace."
No, a CBA is a contract executed upon request of either the employer
or the exclusive bargaining representative incorporating the agreement Dispositive: Petition is Dismissed.
reached after negotiations with respect to wages, hours of work and all
other terms and conditions of employment, including proposals for Doctrine:
adjusting any grievances or questions arising under such agreement.
The primary purpose of a CBA is the stabilization of labor- The Court finds no conflict between said agreement and Article 253-A
management relations in order to create a climate of a sound and stable of the Labor Code. Article 253-A has a two-fold purpose. One is to
industrial peace. In construing a CBA, the courts must be practical and promote industrial stability and predictability. Inasmuch as the
realistic and give due consideration to the context in which it is agreement sought to promote industrial peace at PAL during its
negotiated and the purpose which it is intended to serve. rehabilitation, said agreement satisfies the first purpose of Article 253-
A. The other is to assign specific timetables wherein negotiations
The assailed PAL-PALEA agreement was the result of voluntary become a matter of right and requirement. Nothing in Article 253-A,
collective bargaining negotiations undertaken in the light of the severe prohibits the parties from waiving or suspending the mandatory
financial situation faced by the employer, with the peculiar and unique timetables and agreeing on the remedies to enforce the same.
intention of not merely promoting industrial peace at PAL, but
preventing the latter’s closure. The Court finds 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.
 expiry date of the past CBA. Based on the provision of Section
-------------------------------------------------- 253-A, its retroactivity should be agreed upon by the parties.
CASE 102 Meralco v. Sec. Quisimbing But since no agreement to that effect was made, public
GR NO./ SCRA NO. 127598 respondent did not abuse its discretion in giving the said CBA a
Date February 22, 2000 prospective effect. The action of the public respondent is
Digest by: Anna Beatrice S. Tarrosa within the ambit of its authority vested by existing law.
3.
-------------------------------------------------- On the other hand, the Union argues that the award should
retroact to such time granted by the Secretary, citing the 1993
Petitioner: MANILA ELECTRIC COMPANY decision of St. Luke's.16
Respondent: Hon. SECRETARY OF LABOR LEONARDO Finally, the effectivity of the Order of January 28, 1991, must
QUISUMBING and MERALCO EMPLOYEES and WORKERS retroact to the date of the expiration of the previous CBA,
ASSOCIATION (MEWA) contrary to the position of petitioner. Under the circumstances
Ponente: YNARES-SANTIAGO, J of the case, Article 253-A cannot be properly applied to herein
case. As correctly stated by public respondent in his assailed
Topic: d. Contract Duration and Renewal Order of April 12, 1991 dismissing petitioner's Motion for
Reconsideration —
FACTS: Anent the alleged lack of basis for the retroactivity provisions
1.
The parties are directed to execute a Collective Bargaining awarded; we would stress that the provision of law invoked by
Agreement incorporating the terms and conditions contained in the Hospital, Article 253-A of the Labor Code, speaks of
the unaffected portions of the Secretary of Labor's orders of agreements by and between the parties, and not arbitral
August 19, 1996 and December 28, 1996, and the awards . . .
modifications set forth above. The retirement fund issue is Therefore, in the absence of a specific provision of law
remanded to the Secretary of Labor for reception of evidence prohibiting retroactivity of the effectivity of arbitral awards
and determination of the legal personality of the MERALCO issued by the Secretary of Labor pursuant to Article 263(g) of
retirement fund. the Labor Code, such as herein involved, public respondent is
2.
On the retroactivity of the CBA arbitral award, it is well to deemed vested with plenary and discretionary powers to
recall that this petition had its origin in the renegotiation of the determine the effectivity thereof.
parties' 1992-1997 CBA insofar as the last two-year period
thereof is concerned. When the Secretary of Labor assumed
jurisdiction and granted the arbitral awards, there was no ISSUE/S: For how long will the CBA be effective and from when
question that these arbitral awards were to be given retroactive should it retroact?
effect. However, the parties dispute the reckoning period when
retroaction shall commence. Petitioner claims that the award
should retroact only from such time that the Secretary of Labor RULING: The Court in the January 27, 1999 Decision, stated that the
rendered the award, invoking the 1995 decision in Pier 8 CBA shall be "effective for a period of 2 years counted from
case14 where the Court, citing Union of Filipino Employees v. December 28, 1996 up to December 27, 1999." Parenthetically, this
NLRC,15 said: actually covers a three-year period. Labor laws are silent as to when an
The assailed resolution which incorporated the CBA to be arbitral award in a labor dispute where the Secretary had assumed
signed by the parties was promulgated on June 5, 1989, the jurisdiction by virtue of Article 263 (g) of the Labor Code shall
retroact. In general, a CBA negotiated within six months after the
expiration of the existing CBA retroacts to the day immediately
following such date and if agreed thereafter, the effectivity depends on
the agreement of the parties.18 On the other hand, the law is silent as to
the retroactivity of a CBA arbitral award or that granted not by virtue
of the mutual agreement of the parties but by intervention of the
government. Despite the silence of the law, the Court rules herein that
CBA arbitral awards granted after six months from the expiration of
the last CBA shall retroact to such time agreed upon by both employer
and the employees or their union. Absent such an agreement as to
retroactivity, the award shall retroact to the first day after the six-
month period following the expiration of the last day of the CBA
should there be one. In the absence of a CBA, the Secretary's
determination of the date of retroactivity as part of his discretionary
powers over arbitral awards shall control.

DISPOSITIVE: (1) the arbitral award shall retroact from December 1,

1995 to November 30, 1997; and (2) the award of wage is increased
from the original amount of One Thousand Nine Hundred Pesos
(P1,900.00) to Two Thousand Pesos (P2,000.00) for the years 1995
and 1996. This Resolution is subject to the monetary advances granted
by petitioner to its rank-and-file employees during the pendency of this
case assuming such advances had actually been distributed to them.
The assailed Decision is AFFIRMED in all other respects

DOCTRINE: Despite the silence of the law, the Court rules herein
that CBA arbitral awards granted after six months from the expiration
of the last CBA shall retroact to such time agreed upon by both
employer and the employees or their union. Absent such an agreement
as to retroactivity, the award shall retroact to the first day after the six-
month period following the expiration of the last day of the CBA
should there be one.
 2. The employees accepted their checks for separation pay and
-------------------------------------------------- signed quit-claims under protest and subject to the outcome of
103. Associated Labor Unions v. NLRC this case.
G.R. No. 74841 & G.R. No. 75667
December 20, 1991 3. Caltex Philippines, Inc. was impleaded as additional
Digested by: Carl Au respondent because of its acquisition of the entire marketing
-------------------------------------------------- and distribution assets of Mobil Oil Philippines. Mobil
Philippines, Inc. was also made a respondent in view of a
G.R. No. 74841 metropolitan daily newspaper announcement that Mobil Oil
Petitioner: ASSOCIATED LABOR UNIONS-VIMCONTU, THE Philippines, Inc. will continue to do business under the
CEBU OIL EMPLOYEES ASSOCIATION, represented by its Acting corporate name of Mobil Philippines
President, MIGUEL C. ALIVIADO, and THE MOBIL DAVAO/
COTABATO CHAPTER-ALU, represented by its President, DAVID 4. Complainants charge Mobil Oil Philippines, Inc. and J.P.
C. ONDEVILLA Respondents: THE NATIONAL LABOR Bailiux with unfair labor practice for violating their collective
RELATIONS COMMISSION (NLRC), MOBIL OIL PHILIPPINES, bargaining agreement which, among others, states that "this
INC., JEAN PIERRE BAILLEUX, CALTEX PHILIPPINES, INC., Agreement shall be binding upon the parties hereto and their
and MOBIL PHILIPPINES, INC. successors and assigns, and may be assigned by the company
without the previous approval of the Union. However, the latter
G.R. No. 75667 will be notified of such assignment when it occurs."
Petitioner:ASSOCIATED LABOR UNIONS-VIMCONTU, THE
CEBU OIL EMPLOYEES ASSOCIATION-ALU LOCAL 15, 5. In this case, the complainant unions were not notified officially
represented by its President, EMILIO S. SUAREZ, and THE MOBIL of such assignment to Caltex Philippines and respondent Mobil
DAVAO/COTABATO CHAPTER-ALU, represented by its President, Oil Philippines made announcement in major dailies that the
DAVID C. ONDEVILLA company shall continue to operate its business.
Respondents:MOBIL OIL PHILS., INC., JEAN PIERRE
BAILLEUX, CALTEX PHILIPPINES, INC., and MOBIL ISSUE: WON the union could enforce the CBA against the new
PHILIPPINES, INC. owner of the business?

Ponente: Davide Jr., J. RULING: NO. In a recent case involving these two parties (Mobil
Employees Association, et al. vs. NLRC, et al.) it was held that since
FACTS: what was effected was cessation of business and that the requirement
of due notice was substantially complied with, the allegations that both
1. A collective bargaining agreement was entered into between MOPI and Caltex merely intended to evade the provisions of the CBA
the complainants and Mobil Oil Philippines, Inc. for a period of cannot be sustained.
three years starting. J.P. Bailiux, President of Mobil Oil
Philippines, Inc., sent letters to the employees, notifying of the There was nothing irregular in the closure by MOPI of its business
termination of their services effective August 31, 1983 because operation. Caltex may not be said to have stepped into the picture as an
of the sale of the respondent firm. assignee of the CBA because of the very fact of such closure.
As a rule that unless, expressly assumed, labor contracts are not
enforceable against a transferee of an enterprise, labor contracts being
in personam, thus binding only between the parties.

As a general rule, there is no law requiring a bona fide purchaser of the

assets of an on-going concern to absorb in its employ the employees of
the latter. However, although the purchaser of the assets or enterprise
is not legally bound to absorb in its employ the employees of the seller
of such assets or enterprise, the parties are reliable to the employees if
the transaction between the parties is colored or clothed with bad faith.
The sale or disposition must be motivated by good faith as an element
of exemption from liability.

This flows from the well-recognized principle that is within the

employer's legitimate sphere of management control of the business to
adopt economic policies or make some changes or adjustments in their
organization or operations that would insure profit to itself or protect
the investment of its stockholders. As in the exercise of such
management prerogative, the employer may merge or consolidate its
business with another, or sell or dispose all or substantially all of its
assets and properties which may bring about the dismissal or
termination of its employees in the process.

DOCTRINE: As a rule that unless, expressly assumed, labor contracts

are not enforceable against a transferee of an enterprise, labor
contracts being in personam, thus binding only between the parties.
This flows from the well-recognized principle that is within the
employer's legitimate sphere of management control of the business to
adopt economic policies or make some changes or adjustments in their
organization or operations that would insure profit to itself or protect
the investment of its stockholders.

DISPOSITIVE: WHEREFORE, both Petitions for certiorari are

DISMISSED for lack of merit.
------------------------------------------------------------ 7. With the issuance of the certificate of registration, petitioner
CASE 104 Elisco-Elirol Labor Union vs. Noriel acquired a personality separate and distinct from any other
80 SCRA 682 (1977) labor union
Digest by: Kayelyn Lat 8. Steps were taken by petitioner to enforce the CBA
------------------------------------------------------------ 9. June 10, 1975: At a special meeting called for the purpose, the
general membership of petitioner union decided that their
Petitioner: Elisco-Elirol Labor Union (NAFLU) and its officers and mother union, the National Federation of Labor Unions, can no
members of the Board of Directors longer safeguard the rights of its members insofar as working
Respondent: Carmelo Noriel (BLR), Elizalde Steel Consolidated, Inc. conditions and other terms of employment are concerned and
and NAFLU that the interest and welfare of petitioner can be served best if it
Ponente: J. Teehankee will stay independent and disaffiliated from said mother union,
hence, the general membership adopted a resolution to
Topic: CBA and Disaffiliation disaffiliate from the National Federation of Labor Unions.

FACTS: 10. June 11, 1975: Petitioner, acting through its President Riza,
1. February 1974: Petitioner Elisco-Elirol Labor Union informed respondents of said disaffiliation by means of a letter,
(NAFLU), negotiated and executed a Collective Bargaining and subsequently requested respondents to recognize petitioner
Agreement with Respondent Elizalde Steel Consolidated, Inc. as the sole and exclusive bargaining representative of the
2. Upon verification by individual petitioners at the Registration employees thereof.
Division, BLR, Dept of Labor, NAFLU, the contracting party
in said collective bargaining agreement, was not then registered 11. Respondent without any reason refused and continues to refuse
and therefore not entitled to the benefits and privileges to recognize petitioner as the sole and exclusive bargaining
embodied in said agreement representative of its employees, and, now actually dismissed
3. March 3, 1975: members of petitioner union in a general the petitioner union’s officers and board members
membership meeting decided in a resolution to register their
union to protect and preserve the integrity and inviolability of 12. A complaint for unfair labor practice was filed by petitioners
the CBA between NAFLU and Elizalde Steel Consolidated, against respondents for the latter’s refusal to bargain
Inc. collectively with petitioner
4. Said resolution of members of petitioner union was passed
upon by the officers and members of the BD at a special 13. By virtue of said refusal of respondent to recognize petitioner
meeting, resolution no. 6 was approved requesting the Acting as the sole and exclusive bargaining representative of
Directors, Registration Division, BLR, to register the union employees, petitioners filed a petition before the BLR against
NAFLU respondents, and NAFLU be ordered to stop from presenting
5. By virtue of resolution, petitioner union applied for registration itself as the collective bargaining agent and pursuant thereto, a
with BLR writ of Prelim. Mandatory and Prohibitory Injunction be issued
6. May 28, 1975: Certificate of Registration was issued by the
Office. 14. BLR: dismissed petition for lack of merit
 15. On appeal, Director of BLR affirmed dismissal of petitioner locals into the national union (as PAFLU) was in furtherance of the
union’s petition same end. These associations are consensual entities capable of
- Appellant is correct. For to grant to the former mother entering into such legal relations with their members. The essential
union (NAFLU) the authority to administer and enforce purpose was the affiliation of the local unions into a common
their collective bargaining agreement without presumably enterprise to increase by collective action the common bargaining
any members in the bargaining unit is quite absurd power in respect of the terms and conditions of labor. Yet the locals
remained the basic units of association, free to serve their own and the
- But to transfer also to the newly formed union the authority common interest of all, subject to the restraints imposed by the
although the members of the same were the same members Constitution and ByLaws of the Association, and free also to renounce
who composed then the local chapter of the mother union is the affiliation for mutual welfare upon the terms laid down in the
also a violation of the CBA (union security clause) agreement which brought it into existence.”
16. Hence, this petition.
Corollarily, the “substitutionary” doctrine likewise fully supports
ISSUE: Whether or not the disaffiliation of the employees from the petitioner’s stand. Petitioner union to whom the employees owe their
mother union and formed into a new one, their status as employees allegiance has from the beginning expressly avowed that it “does not
was terminated intend to change and/or amend the provisions of the present collective
bargaining agreement but only to be given the chance to enforce the
HELD: NO same since there is a shift of allegiance in the majority of the
employees at respondent company.”
RATIO:
It need only be mentioned finally that the Secretary of Labor in his
His error was in not perceiving that the employees and members of the decision of April 23, 1976 and order of January 10, 1977 denying
local union did not form a new union but merely registered the local reconsideration in the sister unfair labor practice case and ordering
union as was their right. Petitioner Elisco-Elirol Labor UnionNAFLU, respondent corporation to immediately lift the suspension and reinstate
consisting of employees and members of the local union was the the complainant officers and board members of petitioner union has
principal party to the agreement. NAFLU as the “mother union” in likewise adhered to the foregoing basic principles and settled
participating in the execution of the bargaining agreement with jurisprudence in contrast to respondent director (as well as therein
respondent company acted merely as agent of the local union, which respondent NLRC which similarly adhered to the archaic and illogical
remained the basic unit of the association existing principally and view that the officers and board members of petitioner local union
freely to serve the common interest of all its members, including the committed an “act of disloyalty” in disaffiliating from the mother
freedom to disaffiliate when the circumstances so warranted as in the union when practically all its members had so voted to disaffiliate and
present case. the mother union [as mere agent] no longer had any local union or
members to represent), ruling that “(G)ranting arguendo that the
Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc: disaffiliation from the NAFLU is a legal cause for expulsion and
“The Court expressly cited and affirmed the basic principle that “(T)he dismissal, it could not detract from the fact that only 13 individual
locals are separate and distinct units primarily designed to secure and complainants out of almost 700 members who disaffiliated, were
maintain an equality of bargaining power between the employer and singled out for expulsion and recommended for dismissal. The
their employee-members in the economic struggle for the fruits of the actuation of NAFLU conclusively constitutes discrimination. Since the
joint productive effort of labor and capital; and the association of the
suspension of complainants was effected at the instance of NAFLU, it
should be held liable to the payment of backwages.

DISPOSITIVE PORTION: Elisco-Elirol Labor Union WON.

DOCTRINE: “(W)hat is paramount, as it is expressly and explicitly

emphasized in an exacting language under the New Constitution, is the
security of tenure of the workers, not the security of the union. To
impress, therefore, such ‘maintenance of membership’—which is
intended for the security of the union rather than the security of tenure
of the workers—as a bar to employees’ changing their affiliation is not
only to infringe on the constitutional right of freedom of association,
but also to trample upon the constitutional right of workers to security
of tenure and to render meaningless whatever ‘adequate social
services’ the State may establish or maintain in the field of
employment ‘to guarantee the enjoyment by the people of a decent
standard of living.’”
 In addition, neither he nor the DOLE were formally notified of his
----------------------------------------------------------------------------- termination. He found out about it when he was handed a copy of the
CASE 105 Culili v. Eastern Telecommunications Philippines, Inc., letter, after he was barred from entering ETPI’s premises. ETPI
GR No.165381 already decided to dismiss him even prior to the AVP’s letter,
February 9, 2011 as evidenced by an earlier version of the letter.
Digest by: Jen Balmeo
----------------------------------------------------------------------------- ETPI denied hiring outside contractors to perform Culili’s work. It also
Petitioner: Nelson A. Culili denied singling Culili out for termination. The abolition of Culili’s
Respondent: Eastern Telocom. Phil. Inc. department and the absorption of its functions by another department
Ponente: J. Leonardo-De Castro were in line with the Right-Sizing Program’s goals.

Topic: Definition of Unfair Labor Practice Since Culili did not avail of the Special Retirement Program and his
position was subsequently declared redundant, ETPI had no choice but
FACTS: to terminate Culili. Because there was no more work for him, it was
constrained to serve a final notice of termination, which Culili ignored.
Nelson Culili was employed as a Technician, and was promoted to
Senior Technician after 15 years. In 1998, due to business troubles and Culili filed a complaint for ULP, illegal dismissal, and money claims
losses, ETPI implemented a two-phased Right-Sizing Program: before the LA.-
reduction of ETPI’s workforce, then a company-wide reorganization
(transfer, merger, absorption or abolition of departments). ETPI LC 248(c) – To contract out services or functions being performed by
offered a Special Retirement Program to employees who have been in union members when such will interfere with, restrain or coerce
service for at least 15 years. Of all the employees who qualified, only employees in the exercise of their rights to self-organization.
Culili rejected the offer.
LC 248(e)– To discriminate in regard to wages, hours of work, and
The functions of Culili’s unit were absorbed by another department, other terms and conditions of employment in order to encourage or
and his position was abolished (and was eventually absorbed by discourage membership in any labor organization. Nothing in this
another employee) due to redundancy. Culili wrote to the union Code or in any other law shall stop the parties from requiring
president in protest. membership in a recognized collective bargaining agent as a condition
He was informed of his termination from employment through a letter for employment, except those employees who are already members of
from the ETPI AVP. another union at the time of the signing of the collective
bargaining agreement. Employees of an appropriate collective
This letter was similar to the memo shown to Culili by the union bargaining unit who are not members of the recognized collective
president weeks before Culili was dismissed. bargaining agent may be assessed a reasonable fee equivalent to the
dues and other fees paid by members of the recognized collective
Culili claims that ETPI contracted out the services he used to perform bargaining agent, if such non-union members accept the benefits under
to a labor-only contractor, which not only proved that his functions had the collective agreement: Provided, that the individual authorization
not become unnecessary, but which also violated the CBA + LC. required under Article 242, (o) of this Code shall not apply to the non-
members of the recognized collective bargaining agent.
LA–ETPI GUILTY OF ILLEGAL DISMISSAL AND ULP freedom and mutual respect, disrupt industrial peace and hinder
(AFFIRMED BY NLRC) the promotion of healthy and stable labor-management relations.
ULP refers to ‘acts that violate the workers' right to organize. The
Re: ULP—the contracting out of Culili’s functions to non-union prohibited acts are related to the workers' right to self organization and
members violated his rights as a union member; to the observance of a CBA. An employer may only be held liable for
ETPI was not able to dispute Culili’s claims of discrimination and unfair labor practice if it can be shown that his acts affect in whatever
subcontracting manner the right of his employees to self-organize.
There is no showing that ETPI, in implementing its Right-Sizing
The earlier version of the letter was a telling sign of the intention to Program, was motivated by ill will, bad faith or malice, or that it was
dismiss even before declaration of redundancy. The ground that ETPI aimed at interfering with its employees’ right to self -organization. In
was actually invoking was retrenchment, but ETPI stuck to fact, ETPI negotiated and consulted with the SEBA before
redundancy since it was easier to prove. ETPI failed to present implementing the program.
reasonable criteria to justify declaration of redundancy. By imputing bad faith to ETPI’s actuations, Culili has the burden of
proof to present substantial evidence to support the allegation of
CA–VALID DISMISSAL, NO ULP ULP. Culili failed to discharge this burden and his bare allegations
deserve no credit.
Re: ULP—mere contracting out of services being performed by union
members does not per se amount to ULP unless it interferes with
the employees’ right to self -organization. DISPOSITIVE: Culili lost. Petition denied.

Culili’s position validly abolished due to redundancy. ETPI officers DOCTRINE: Unfair Labor Practice refers to ‘acts that violate the
cannot be held liable absent a showing of bad faith of malice. workers' right to organize. The prohibited acts are related to the
HOWEVER, ETPI failed to observe due process when it failed workers' right to self organization and to the observance of a CBA. An
to notify both Culili and DOLE of the termination. employer may only be held liable for unfair labor practice if it can be
shown that his acts affect in whatever manner the right of his
ISSUE: WON Culili’s dismissal can be considered as ULP. employees to self-organize.

HELD: NO. However, ETPI has to pay nominal damages for non-
compliance with statutory due process, in addition to the mandatory
separation pay [LC 283].

Article 247. Concept of unfair labor practice and procedure for

prosecution thereof.

Unfair labor practices violate the constitutional right of workers

and employees to self-organization, are inimical to the legitimate
interest of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of
 On account of serious business losses which occurred in 1997 up to
-------------------------------------------------------------------- mid-1999 totaling around P127,000,000.00, Galaxie Steel Workers
CASE 106 GALAXIE STEEL WORKERS UNION VS. NLRC Union decided to close down its business operations. It thereafter filed
G.R. No. 165757 October 17, 2006 a written notice with the Department of Labor and Employment
Digested by: Lanz Olives (DOLE) informing the latter of its intended closure and the consequent
-------------------------------------------------------------------- termination of its employees effective August 31, 1999. It posted the
Petitioners: GALAXIE STEEL WORKERS UNION (GSWU- notice of closure on the corporate bulletin board.
NAFLU-KMU), EDUARDO FLORES, BONIFACIO LABACO,
SALVADOR VERDEFLOR, PAULITO NIEVES, NILO On September 8, 1999, Galaxie Steel Workers Union and Galaxie
AMENAZOR, BENJAMIN BEDUYA, EUTIQUIO MENESES, employees filed a complaint for illegal dismissal, unfair labor practice,
CENON LABACO, DANILO MARANAN, ELISEO LASTIMOSO, and money claims against Galaxie. The Labor Arbiter, NLRC and the
JAMES MADERAS, EFREN LABACO, CESARIO BOLSICO, Court of Appeals were unanimous in ruling that Galaxie’s closure or
DARIO DECALAIN, SAMMY CEDENO, PRUDENCIO DELA cessation of business operations was due to serious business losses or
CRUZ, EDGARDO PASTRANA, DANILO BERMUDEZ, BILLY financial reverses, and not because of any alleged anti-union position.
BLASCO, ROBERTO PEPINO, RUBEN TENOSO, ORLANDO
TUDILLA, JESSIE SACE, JUNE DALAYAT, FRANCISO LABACO, The workers’ union and employees contend that Galaxie did not serve
EDIN DEMAYO, WILFREDO CHENG, JAIME GANDO, written notices of the closure of business operations upon them, it
JOSELITO GUANZON, VICTOR DELMUNDO, NATHANIEL having merely posted a notice on the company bulletin board.
PEROY, ROBERTO VIRTUDAZO, RICARDO HILAGA, RODRIGO
FIRMANEZ, RENE VILLA, VERGELIO ICO, NOLITO ISSUE:
PANUNCIA, ALDRONICO BAHILLO, FLORENCIO
LANZADEROS, ROLLY ROTIL, BENJAMIN ESCANO, 1) Whether or not the written notice posted by [Galaxie] on the
DOMINADOR ABAINCIA, ROMEO LITANG, NELSON PETALIO, company bulletin board sufficiently complies with the notice
MARIO VILLAMOR, AGUSTIN CONSTANTINO, HERMINIO requirement under Article 283 of the Labor Code.
AGUSTIN, VICTORIO NEMENZO, MABINI YARCIA, PERCY
ZOSIMO, ANGELITO DELOS REYES, ADVINCULA 2) Whether or not [Galaxie] is guilty of unfair labor practice in closing
ELMEDULAN, GORGONIO BOLORAN, ALAN MONIN, JESSIE its business operations shortly after petitioner union filed for
PACALINGGA, and MICHAEL DACLAG certification election.

Respondents: NATIONAL LABOR RELATIONS COMMISSION, RULING:

GALAXIE STEEL CORPORATION and RICARDO CHENG
1) NO.
Nature of the Case: petition for review
Ponente: Carpio Morales, J. The requirement of the Labor Code that notice shall be served on the
workers is not complied with by the mere posting of the notice on the
TOPIC: Unfair Labor Practice; In General; Definition and General bulletin board.
Concept.
The mere posting on the company bulletin board does not meet the
FACTS: requirement under Article 283 of ―serving a written notice on the
workers.‖ The purpose of the written notice is to inform the employees DOCTRINE: Unfair labor practice refers to acts that violate the
of the specific date of termination or closure of business operations, workers’ right to organize, and are defined in Articles 248 and 261 of
and must be served upon them at least one month before the date of the Labor Code. The prohibited acts relate to the workers’ right to self-
effectivity to give them sufficient time to make the necessary organization and to the observance of Collective Bargaining
arrangements. In order to meet the foregoing purpose, service of the Agreement without which relation the acts, no matter how unfair, are
written notice must be made individually upon each and every not deemed unfair labor practices
employee of the company.
Art. 283. Closure of establishment and reduction of personnel. — The
2) NO employer may also terminate the employment of any employee due to
the installation of labor saving devices, redundancy, retrenchment to
Indeed, Galaxie’s documentary evidence shows that it had been prevent losses or the closing or cessation of operation of the
experiencing serious financial losses at the time it closed business establishment or undertaking unless the closing is for the purpose of
operations. As aptly found by the Court of Appeals: circumventing the provisions of this Title, by serving a written notice
on the workers and the Ministry of Labor and Employment at least one
The NLRC’s finding on the legality of the closure should be upheld for (1) month before the intended date thereof. In case of termination due
it is supported by substantial evidence consisting of the audited to the installation of labor saving devices or redundancy, the worker
financial statements showing that Galaxie continuously incurred losses affected thereby shall be entitled to a separation pay equivalent to at
from 1997 up to mid-1999, to wit: P65,753,480.65 in 1997, least his one (1) month pay or to at least one (1) month pay for every
P48,429,785.89 in 1998, and P13,204,389.97 in 1999; and of the year of service , whichever is higher. In case of retrenchment to
various demand notices of payments from creditor banks. Besides, the prevent losses and in cases of closures or cessation of operations of
petitioners had not presented evidence to the contrary; nor did they establishment or under taking not due to serious business losses or
establish that the closure was motivated by Galaxie’s anti-union financial reverses, the separation pay shall be equivalent to one (1)
stance. True, the union was seeking the holding of a certification month pay or at least one-half (1/2) month pay for every year of
election at the time that Galaxie closed its business operation, but that, service, whichever is higher. A fraction of at least six (6) months shall
without more, was not sufficient to attribute anti-unionism against be considered one (1) whole year.
Galaxie. (Underscoring supplied)

Upon the other hand, petitioners failed to present concrete evidence

supporting their claim of unfair labor practice. Unfair labor practice
refers to acts that violate the workers’ right to organize,12 and are
defined in Articles 248 and 261 of the Labor Code. The prohibited acts
relate to the workers’ right to self-organization and to the observance
of Collective Bargaining Agreement without which relation the acts,
no matter how unfair, are not deemed unfair labor practices

DISPOSITIVE: GALAXIE WORKERS UNION et al. partly won.

 ISSUE/S:
-------------------------------------------------- WON the petitioners are guilty of unfair labor practice?
107 STERLING PRODUCTS INTRNTL V. SEC OF LABOR
GR NO. L-19187 RULING: NO.
February 28, 1963
Digest by: Metha Dawn H. Orolfo In the case of Royal Interocean Lines, et al. vs. CIR, as respondent sol
-------------------------------------------------- was merely an employee and was not connected woth any labor union,
the company cannot be cpnsidered as having committed acts
Petitioner: Sterling Products International Inc. and V. San Pedro constitution unfair labor practice as defined in the Industrial peace act.
Respondent: Loreta C. Sol and Court of Industrial Relations
Ponente: Labrador The term ULP has been defined as any of those acts listed in SEC. 4 of
the act. The respondent has never been found to commit any of the acts
Topic: Unfair Labor Practice – Definition and General Concept mentioned in par. A of sec. 4. Respondent sol was not connected with
any labor organization or to assist, or contribute to labor organization.
FACTS: The company, therefore cannot be considered as having committed an
1. Respondent Loreta Sol chared pettioners and its Radio Director unfair labor practice.
with having committed an unfair labor practice act.
2. That Respondent has been a regular radio monitor of the DISPOSITIVE: Petitioner won.
petitioners and filed a complaint for underpayment, money
equivalent of her vacation leave and Christmas bonus. DOCTRINE: Section 4 of the Industrial Peace Act.
3. The said complaint resulted in her dismissal without just cause
in December 1960.
4. Petitioners aver that the complainant is an independent
contractor whose services were restrained by them to submit
reports of radio monitoring work outside of the petitioner’s
office and that it don’t need the services of the complainant as
independent contractor, that it dismissed the respondents with
good and justifiable reasons in accordance with business
requirements and not engaging in unfair labor practice acts
within the meaning pf Sec 4 (a), subsec 5 of the Industrial
Peace Act.
5. CIR: respondent is only an independent contractor
6. CA: Reversed CIR, because she has an ID as a bona fide
employee, when she purchased a lot she was certified by the
petitioner as employee for the last 5-6 years and she was able
to borrow money from the employees loan association of the
firm.
7.
-------------------------------------------------- Tinsay, operator of said watchmen’s agency, and thatœthe
CASE 108 AMERICAN PRESIDENT LINES INC VS CLAVE operator of the Marine Security Agency then allegedly
G.R. No. L-51641 threatened to cause trouble to the APL, and particularly to
June 29, 1982 Capt. Morris
Digest by: Michelle Vale Cruz 5. On February 6, 1961, respondent union Maritime Security
-------------------------------------------------- Union passed a resolution abolishing itself with the following
reasons: 1) Termination of Contract of the Marine Security
Petitioner: AMERICAN PRESIDENT LINES Agency with the American President Lines. 2) Inability of the
Respondent: Hon. Jacobo Clave (Pres. Exec. Assistant Office of the Marine Security Agency to provide employment 3) Inability of
Pres.), NLRC, Ministry of Labor, Maritime Security Union, Indiv. the members and the Union to provide maintenance in the
Complainnats headed by Julian Advincula and Sheriff Leon Navea coming months.
Ponente: J. Barredo 6. On December 10, 1962, the respondent union passed another
resolution reviving itself.
Topic: Employer-employee relationship: requisites 7. On March 21, 1963, the Maritime Security Union, through
private respondents filed a complaint against the petitioner for
FACTS: unfair labor practice under RA 875. Their complaint, wherein
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1. The under to Pea
thereceipt
Pea was
purpose
several
other
toseveral
explain
company
terminated
under receipt on
was
purpose
other
explain
company
terminated
petitioner on
ofwaste
ofwaste
their into a contract with the Marine Security
their
entered they charged that the petitioner had refused to negotiate an
Agency for the latter to guard and protect the petitioner’s agreement with them and had discriminated against them with
vessels while they were moored at the port of Manila. The regard to their tenure of employment by dismissing them for no
contract was for one year and may be terminated by either other reason than their membership with the union and union
party upon 30 days’ notice to the other. activities, was lodged with the defunct Court of Industrial
2. The relationship between the petitioner and Marine Security Relations. However, before that court could resolve the case,
Agency is such that it was the latter who hired and assigned the the Labor Code was enacted and the case was transferred to the
guards who kept watching over the petitioner’s vessels. The NLRC under Arbiter Lomabao.
guards were not known to petitioner who dealt only with the 8. Arbiter Lomabao found the petitioner to be an employer of the
agency on matters pertaining to the service of the guards. A private respondents and guilty of ULP against them.
lump sum would be paid by the petitioner to the agency who in 9. The NLRC affirmed with the qualification that only those
turn determined and paid the compensation of the individual complainants who are 60 years old or younger and capacitated
watchmen. to discharge their former duties should be reinstated without
3. After the termination of its contract with Marine Security loss of seniority rights and other privileges, and with three
Agency, the petitioner executed a new contract with the years of backwages; and those who could not be so reinstated
Philippine Scout Veterans Security and Investigation Agency should be given separation pay in addition to their backwages
also for the purpose of having its vessels protected for a term of for three years.
one year. 10. Minister of Labor and Office of the President affirmed the
4. Private respondents protested against the termination. NLRC
Respondents claim that that the termination of the contract was
primarily because of misunderstanding that had intervened ISSUE: WON there existed an employer-employee relationship
between the APL represented by your Capt. Morris, and Mr. A. between the petitioner and the individual watchmen of the Marine
Security Agency who are alleged to be members of the respondent individual watchmen of the agency. To start with, the contract between
union? the petitioner and the agency has, by its own terms, expired. Indeed,
after the expiration of the contract with respondent Marine Security
RULING: NO. Respondents are not employees of petitioner. Agency, the petitioner engaged the services of the Philippine Scout
Veterans Security and Investigation Agency for a period of one year
In determining the existence of employer-employee relationship, the also. In other words, to hold the complaining members of respondent
following elements are generally considered, namely: (1) the selection agency as the employees of the petitioner, and therefore, entitled to
and engagement of the employee; (2) the payment of wages; (3) the labor benefits as such, would violate the petitioner’s exclusive
power of dismissal; and (4) the power to control the employee’s prerogative to determine whether it should enter into a security service
conduct — although the latter is the most important element.” contract or not, i.e., whether it should hire others or not.

In the light of the foregoing standards, We fail to see how the There is no employer-employee relationship between the petitioner
complaining watchmen of the Marine Security Agency can be and the members of the respondent agency, it should necessarily
considered as employees of the petitioner. It is the agency that recruits, follow that the petitioner cannot be guilty of unfair labor practice as
hires, and assigns the work of its watchmen. Hence, a watchman can charged by the private respondents. Under Republic Act 875, Section
not perform any security service for the petitioner’s vessels unless the 13, an unfair labor practice may be committed only within the context
agency first accepts him as its watchman. With respect to his wages, of an employer-employee relationship.
the amount to be paid to a security guard is beyond the power of the
petitioner to determine. Certainly, the lump sum amount paid by the DISPOSITIVE: American President Lines won
petitioner to the agency in consideration of the latter’s service is much
more than the wages of any one watchman. In point of fact, it is the DOCTRINE: In determining the existence of employer-employee
agency that quantifies and pays the wages to which a watchman is relationship, the following elements are generally considered, namely:
entitled. (1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the
Neither does the petitioner have any power to dismiss the security employee’s conduct — although the latter is the most important
guards. In fact, We fail to see any evidence in the record that it wielded element.”
such a power. It is true that it may request the agency to change a
particular guard. But this, precisely, is proof that the power lies in the
hands of the agency.

Since the petitioner has to deal with the agency, and not the individual
watchmen, on matters pertaining to the contracted task, it stands to
reason that the petitioner does not exercise any power over the
watchmen’s conduct. Always, the agency stands between the petitioner
and the watchmen; and it is the agency that is answerable to the
petitioner for the conduct of its guards.

There are other considerations that militate against a finding of

employee-employer relationship between the petitioner and the
 8. LABOR ARBITER: found no factual and legal ground to hold
-------------------------------------------------- RBS guilty of unfair labor practices against the Union.
CASE 109 MARIO TIU v. NLRC and RBS 9. NLRC: affirmed the labor arbiter's decision in a resolution
G.R. No. 123276 / 227 SCRA 680 10. Fourteen (14) GMA Channel 7 Employees Union (GMAEU)
August 18, 1997 officers involved in the strike, ten (10) officers did not appeal
Digest by: Thea Denilla the labor arbiter's decision and opted to avail of the optional
-------------------------------------------------- retirement benefits under the collective bargaining agreement
with private respondent Republic Broadcasting System Inc.
Petitioner: Mario Tiu and Jonathan Hayuhay (RBS)
Respondent: National Labor Relations Commission and Republic 11. The remaining four (4) union officers, namely: Mario Tiu, Nani
Broadcasting System, Inc. (Channel 7) Hayuhay, Bong Cerezo and Virgilio Santoyo, appealed to the
NLRC.
Ponente: Padilla, J. 12. The labor arbiter continued to hear the illegal strike case filed
by RBS against GMAEU.
13. The labor arbiter rendered judgment declaring the strike illegal
Topic: Burden of Proof and the union officers who knowingly participated in the illegal
strike to have validly lost their employment status.
FACTS: 14. Hence, this petition for certiorari under Rule 65 of the Rules of
Court .
1. Republic Broadcasting System Inc. (RBS) had a collective
bargaining agreement with GMA Channel 7 Employees Union ISSUE
(GMAEU).
2. After the first quarter of 1991, RBS management noted the 1. Whether or not the NLRC committed grave abuse of discretion
huge amount of overtime expense it incurred during the said when it upheld the labor arbiter’s decision that petitioners
period, which averaged to P363,085.26 monthly. staged an illegal strike
3. To streamline its operations, the president of RBS created a
committee to formulate guidelines on the availment of leaves RULING: 1. No, NLRC was correct in upholding the labor arbiter’s
and rendering of overtime work. decision.
4. RBS, through its personnel department, furnished GMAEU a
copy of the new guidelines and requested the latter to comment No, because the notice of strike filed by the union before the NCMB
thereon. The union did not file any comment. on 12 July 1991 contained general allegations that RBS management
5. RBS officially issued the implementing guidelines "on the committed unfair labor practices by its gross violation of the economic
availment of leaves and rendering of overtime services." provisions in their collective bargaining agreement and by alleged acts
6. GMAEU filed a Notice of Strike with the National Conciliation of coercion, union interference and discrimination which amounted to
and Mediation Board (NCMB) based on unfair labor practices union busting. It is the union, therefore, who had the burden of
allegedly committed by RBS. proof to present substantial evidence to support these allegations.
7. he union struck. On the same day, RBS filed a complaint for
illegal strike and unfair labor practice against GMAEU and its
fourteen (14) officers (hereafter, illegal strike case)
The Court affirms the factual finding of the labor arbiter and the strike based on alleged unfair labor practices it did not even bother to
NLRC that" there was no strikeable issue to support respondent's (the substantiate during the conciliation proceedings. It is not enough that
Union) subject strike." The evidence show that the union anchored its the union believed that the employer committed acts of unfair labor
position on alleged unfair labor practices in order to evade not only the practice when the circumstances clearly negate even a prima facie
grievance machinery but also the no strike clause in their collective showing to warrant such a belief.
bargaining agreement with RBS.

RBS did not issue its implementing guidelines dated 24 June 1991
concerning the availment of leaves and rendering of overtime services
in an arbitrary manner. The union was promptly informed that RBS'
decision was based on its management prerogative to regulate all
aspects of employment, subject of course to well-defined limitations
imposed by law or by contract.

Even assuming arguendo that in the issuance of said guidelines RBS

may have violated some provisions in the collective bargaining
agreement, there was no palpable showing that the same was
a flagrant and/or malicious refusal to comply with its economic
provisions. (Book V Implementing Rules of the Labor Code, Rule
XIII, Section 1) Hence, the law mandates that said violation "shall not
be considered unfair labor practice and shall not be strikeable."

The bottom line is that the union should have immediately resorted to
the grievance machinery established in their agreement with RBS. In
disregarding said procedure the union leaders who knowingly
participated in the illegal strike "have acted unreasonably, and, as such,
the law cannot interpose its hand to protect them from the
consequences of their behavior" (National labor Union v. Philippine
Match Factory, 70 Phil. 300; United Seamen's Union v. Davao
Shipowner's Association, 20 SCRA 1226)

DISPOSITIVE: WHEREFORE, premises considered, the petition is

hereby DISMISSED, there being no substantial evidence of grave
abuse of discretion amounting to lack or excess of jurisdiction on the
part of the NLRC.

DOCTRINE: In the case at bar, the facts and the evidence did not
establish even at least a rational basis why the union would wield a
 5) CABEU-NFL filed a Notice of Strike with the NCMB. NCMB
then assumed conciliatory-mediation jurisdiction and summoned
the parties to conciliation conferences.
---------------------------------------------------------------------
CASE 110. Central Azucarera De Bais Employees Union-NFL v. 6) CAB replied declared purpose of the requested conciliation
Central Azucarera De Bais, Inc. meeting has already been rendered moot and academic because:
G.R. No. 186605 (1) the Union has already lost its majority status by reason of the
November 17, 2010 disauthorization and withdrawal of support thereto by more than
Digest by: Olive Cachapero 90% of the rank and file employees in the bargaining unit, and (2)
--------------------------------------------------------------------- the workers themselves have organized themselves into a new
Union known as Central Azucarera de Bais Employees Labor
Topic: ULP; Burden of proof Association (CABELA) and after obtaining their registration
certificate and making due representation that it is a duly
FACTS: organized union representing almost all the rank and file workers
1) Petitioner Central Azucarera De Bais Employees Union-National in the Central, had concluded a new CBA with CAB which had
Federation of Labor (CABEU-NF) is a duly registered labor union been duly ratified by the rank and file workers constituting 91%
and a certified bargaining agent of respondent Central Azucarera of the collective bargaining unit.
De Bais, Inc. (CAB).
7) NCMB did not pursue further negotiation.
2) CABEU-NFL sent CAB a proposed CBA seeking increases in
the daily wage and vacation and sick leave benefits of the 8) CABEU-NFL filed a Complaint for ULP for the formers refusal
monthly employees and the grant of leave benefits and 13 th month to bargain with it.
pay to seasonal workers.
9) LA: dismissed the complaint. It cannot be said that CAB refused
3) CAB responded with a counter-proposal to the effect that the to negotiate or that it violated its duty to bargain collectively in
bonuses production bonus incentive and special production bonus light of its active participation in the past CBA negotiations at the
and incentives be maintained. In addition, respondent CAB agreed plant level as well as in the NCMB.
to execute a pro-rated increase of wages every time the
government would mandate an increase in the minimum wage. 10) NLRC: reversed LA and found CAB guilty of ULP. CAB
CAB, however, did not agree to grant additional and separate violated its duty to bargain with complainant when during the
Christmas bonuses. pendency of the conciliation proceedings before the NCMB it
concluded a CBA with another union as a consequence, it refused
4) CAB received an Amended Union Proposal sent by CABEU-NFL to resume negotiation with complainant upon the latter’s demand.
reducing its previous demand regarding wages and bonuses. CAB,
however, maintained its position on the matter. Thus, the 11) CA: absolved CAB of ULP. CABEU-NFL failed in its burden of
collective bargaining negotiations resulted in a deadlock. proof to present substantial evidence to support the allegation of
unfair labor practice. The assailed Decision and Resolution of
public respondent referred merely to two circumstances which
allegedly support the conclusion that the presumption of good
 faith had been rebutted and that bad faith was extant in on the said letter-response, failed to substantiate its claim of unfair
petitioner’s actions. To recall, these circumstances are: (a) the labor practice to rebut the presumption of good faith.
execution of a supposed CBA with another labor union,
CABELA; and (b) CAB’s sending of the letter to NCMB seeking Dispositive: CAB won.
to call off the collective bargaining negotiations. These, however,
are not enough to ascribe the very serious offense of ULP upon Doctrine: For a charge of unfair labor practice to prosper, it must be
petitioner. shown that CAB was motivated by ill will, bad faith, or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good
ISSUE: WON CAB was guilty of acts constituting unfair labor customs, or public policy, and, of course, that social humiliation,
practice by refusing to bargain collectively. NO wounded feelings or grave anxiety resulted x x x in suspending
negotiations with CABEU-NFL. Basic is the principle that good faith
RULING: is presumed and he who alleges bad faith has the duty to prove the
NO. CABEU-NFL, in simply relying on the said letter-response, same.
failed to substantiate its claim of unfair labor practice to rebut the
presumption of good faith.

For a charge of unfair labor practice to prosper, it must be shown

that CAB was motivated by ill will, bad faith, or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good
customs, or public policy, and, of course, that social humiliation,
wounded feelings or grave anxiety resulted x x x in suspending
negotiations with CABEU-NFL. Notably, CAB believed that CABEU-
NFL was no longer the representative of the workers. It just wanted to
foster industrial peace by bowing to the wishes of the overwhelming
majority of its rank and file workers and by negotiating and
concluding in good faith a CBA with CABELA. Such actions of CAB
are nowhere tantamount to anti-unionism, the evil sought to be
punished in cases of unfair labor practices.

Burden of Proof
Furthermore, basic is the principle that good faith is presumed and he
who alleges bad faith has the duty to prove the same. By imputing bad
faith to the actuations of CAB, CABEU-NFL has the burden of
proof to present substantial evidence to support the allegation of
unfair labor practice. Apparently, CABEU-NFL refers only to the
circumstances mentioned in the letter-response, namely, the execution
of the supposed CBA between CAB and CABELA and the request to
suspend the negotiations, to conclude that bad faith attended CABs
actions. The Court is of the view that CABEU-NFL, in simply relying
 5. Nestl requested the NCMB to conduct preventive mediation
---------------------------------------------- proceedings between it and the Union
6. Conciliation proceedings nevertheless proved ineffective.
CASE 111 Union of Filipro Employees-Drug, Food and Allied 7. Complaining, in essence, of bargaining deadlock pertaining
Industries Unions-KMU vs. NLRC to economic issues, i.e., retirement (plan), panel
G.R. No. 158930-31 composition, costs and attendance, and CBA, UFE-DFA-
August 22, 2006 KMU filed a Notice of Strike; One week later, another strike
Digest by: Angelo Lopez (Facts from Kaye) was filed by the Union, this time predicated on Nestl’s
-------------------------------------------------------------------------------- alleged unfair labor practices i.e., bargaining in bad faith in
Petitioner: Union of Filipro Employees – Drug, Food and Allied that it was setting pre-conditions in the ground rules by
Industries Unions – Kilusang mayo Uno (UFE-DFA-KMU) refusing to include the issue of the Retirement Plan in the
Respondent: Nestl Philippines, Inc. CBA negotiations.
Ponente: J. Chico-Nazario 8. Nestl filed with the DOLE a Petition for Assumption of
Jurisdiction, praying that Secretary of DOLE assume
Topic: Unfair Labor Practice – Requisites: Burden of Proof jurisdiction over the labor dispute
9. Sec. Sto. Tomas: assumed jurisdiction; strike enjoined
FACTS: 10. Union sought reconsideration; denied
1. In consideration of the impending expiration of the existing 11. Despite efforts by NCMB, employee members of Union went
CBA between Nestl and UFE-DFA-KMU, Presidents of the on strike (Cabuyao Plant)
Alabang and Cabuyao Divisions of the Union, Pasco and 12. Sec. Sto. Tomas issued yet another Order directing:
Fortuna, informed Nestl of their intent to open our new CB - the members of UFE-DFA-KMU to return-to-work within
Negotiation for the year 2001-2004 as early as June 2001 twenty-four (24) hours from receipt of such Order;
2. Nestl acknowledged receipt of the letter; also informed the - Nestl to accept back all returning workers under the same
Union that it was preparing its counter-proposal and proposed terms and conditions existing preceding to the strike;
ground rules that shall govern the conduct of the CB - both parties to cease and desist from committing acts
negotiations inimical to the on-going conciliation proceedings leading to
3. In another letter addressed to Union Cabuyao Division, Nestle the further deterioration of the situation; and
underscored its position that unilateral grants, one-time - the submission of their respective position papers within
company grants, company-initiated policies and programs, ten (10) days from receipt thereof.
which include, but are not limited to the Retirement Plan, 13. Nestl and Union filed their respective position papers
Incidental Straight Duty Pay and Calling Pay Premium, are by 14. Union filed several pleadings; Eventually filed a petition for
their very nature not proper subjects of CBA negotiations and certiorari with application for the issuance of TRO or a WPI
therefore shall be excluded therefrom; clarified that with the before CA
closure of the Alabang Plant, the CBA negotiations will only be 15. Then acting Sec of DOLE Brion came out with an order
applicable to the covered employees of the Cabuyao Plant; recognizing that the present Retirement Plan at Cabuyao Plant
hence, the Cabuyao Division became the sole bargaining unit is a unilateral grant that the parties have expressly so
involved recognized; all union demands not covered by the provisions of
4. Dialogue between the company and union ensued CBA are denied, etc.
16. Union moved to reconsider; denied
 17. Both parties appealed Basic is the principle that good faith is presumed and he who alleges
18. Hence, these petitions for review on certiorari bad faith has the duty to prove the same. By imputing bad faith unto
the actuations of Nestl, it was UFE-DFA-KMU, therefore, who had the
burden of proof to present substantial evidence to support the
ISSUE: allegation of unfair labor practice.
WON Nestle has burden of proving bad faith

RULING:
No, basic is the principle that good faith is presumed and he who
alleges bad faith has the duty to prove the same. By imputing bad faith
unto the actuations of Nestl, it was UFE-DFA-KMU, therefore, who
had the burden of proof to present substantial evidence to support the
allegation of unfair labor practice. A perusal of the allegations and
arguments raised by UFE-DFA-KMU in the Memorandum will readily
disclose that it failed to discharge said onus probandi as there is still a
need for the presentation of evidence other than its bare contention of
unfair labor practice in order to make certain the propriety or
impropriety of the unfair labor practice charge hurled against Nestl.
Under Rule XIII, Sec. 4, Book V of the Implementing Rules of the
Labor Code:

x x x. In cases of unfair labor practices, the notice of strike shall as far

as practicable, state the acts complained of and the efforts to resolve
the dispute amicably. [Emphasis supplied.]

Except for the assertion put forth by UFE-DFA-KMU, neither the

second Notice of Strike nor the records of these cases substantiate a
finding of unfair labor practice. It is not enough that the union believed
that the employer committed acts of unfair labor practice when the
circumstances clearly negate even a prima facie showing to warrant
such a belief.

DISPOSITIVE: WHEREFORE, in view of the foregoing, the

Petition in G.R. No. 158930-31 seeking that Nestl be declared
to have committed unfair labor practice in allegedly setting a
precondition to bargaining is DENIED.

DOCTRINE:
 proceeding docketed as Case 1484-MC.
--------------------------------------------------
2. On March 8, 1965 the Association filed notice to strike giving the
CASE 112 Caltex Filipino Managers and Supervisors Assn. v. CIR following reasons:
GR NO./ SCRA NO. L-30632-33
Date April 11, 1972 Refusal to bargain in good faith and to act on demands, a copy of
Digest by: Anna Beatrice Tarrosa which is enclosed; resort to union-busting tactics in order to
-------------------------------------------------- discourage the activities of the undersigned association and its
members, including discrimination and intimidation of officers and
Petitioner: CALTEX FILIPINO MANAGERS AND members of the association and circulation of promises of immediate
SUPERVISORS ASSOCIATION benefits to be given by the company to its employees, officers and
Respondent: COURT OF INDUSTRIAL RELATIONS, CALTEX members of this association or those intending to join the same, if the
(PHILIPPINES), INC., W.E. MENEFEE and B.F. EDWARDS employees concerned in due course will vote against the selection of
Ponente: VILLAMOR, J this association as the exclusive collective bargaining unit for
managers and supervisors of the Company in the petition for
Topic: PART VII - UNFAIR LABOR PRACTICE certification the latter filed. (Annex "A" of Annex "A", Petition).
Interpretation
On March 29, 1965, during the hearing of the certification
FACTS: proceedings, Judge Tabigne cautioned the parties to maintain the status
quo; he specifically advised the employees not to go on strike, making
1. The Caltex Filipino Managers and Supervisors' Association is a it clear, however, that in the presence of unfair labor practices they
labor organization of Filipino managers supervisors in Caltex could go on strike even without any notice. 2
(Philippines), Inc., respondent Company in this proceeding. After the
Association was registered as a labor organization it sent a letter to the 3. On the basis of the strike notice filed on March 8, 1965 and in view
Company on January 21, 1965 informing the latter of the former's of acts committed by the Company which the Association considered
registration; the Company replied inquiring on the position titles of the as constituting unfair labor practice, the Association struck on April
employees which the Association sought to represent. On February 8, 22, 1965, after the efforts exerted by the Bureau of Labor Relations to
1965 the Association sent a set of proposals to the Company wherein settle the differences between the parties failed. Then, through an
one of the demands was the recognition of the Association as the duly "Urgent Petition" dated April 26, 1965 filed as Case No. 1484-MC(1),
authorized bargaining agency for managers and supervisors in the or as an incident of the certification election proceedings (Case No.
Company. To this the Company countered stating that a distinction 1484-MC), the Company prayed that the strike of respondent Caltex
exists between representatives of management and individuals Filipino Managers and Supervisors Association be declared illegal;
employed as supervisors and that it is Company's belief that
managerial employees are not qualified for membership in a labor 4. Such urgent petition was frontally met by the Association with a
organization; hence, it is digested that the Association institute a motion to dismiss questioning the jurisdiction of the industrial court.
certification proceeding so as to remove any question with regard to The motion to dismiss was opposed by the Company and on May 17,
position titles that should be included in the bargaining unit. The 1965 the trial court denied the same. Not satisfied with the order of
Association felt disinclined to follow the suggestion of the Company 1 May 17, 1965, the Association moved for its reconsideration before
and so on February 22, 1965 the Company initiated a certification respondent court en banc.
Because of the settlement between the parties on May 30, 1965 of RULING: No.
some of their disputes, the Association filed with respondent court
under date of June 3, 1965 a manifestation (to which was attached a To begin with, we view the return-to-work agreement of May 30, 1965
copy of the return-to-work agreement signed by the parties on May 30, as in the nature of a partial compromise between the parties and, more
1965), to the effect that the issues in Case No. 1484-MC (1) had important, a labor contract; consequently, in the latter aspect the same
become moot and academic. Under date of June 15, 1965 the "must yield to the common good" (Art. 1700, Civil Code of the
Company filed a counter-manifestation disputing the representations of Philippines) and "(I)n case of doubt ... shall be construed in favor of
the Association on the effect of the return-to-work agreement. On the the safety and decent living for the laborer" (Art. 1702, ibid). To our
basis of the manifestation and counter-manifestation, respondent court mind when the Company unqualifiedly bound itself in the return-to-
en banc issued a resolution on August 24, 1965 allowing the work agreement that all employees will be taken back "with the same
withdrawal of the Association's motion for reconsideration against the employee status prior to April 22, 1965," the Company thereby made
order of May 17, 1965, on the theory that there was justification for manifest its intention and conformity not to proceed with Case No.
such withdrawal. 1484-MC, (c) relating the illegality of the strike incident. For while it
is true that there is a reservation in the return-to-work agreement as
5. Relative to the resolution of August 24, 1965 the Company filed a follows:
motion for clarification which the Association opposed on September
22, 1965, for it contended that such motion was in reality a motion for 6. The parties agree that all Court cases now pending shall continue,
reconsideration and as such filed out of time. But respondent court including CIR Case No. 1484-MC.
brushed aside the Association's opposition and proceeded to clarify the
resolution of August 24, 1965 to mean that the Company was not we think the same is to be construed bearing in mind the conduct and
barred from continuing with Case No. 1484-MC(1) intention of the parties. The failure to mention Case No. 1484-MC(1)
while specifically mentioning Case No. 1484-MC, in our opinion, bars
6. trial court ruled in its order of February 15, 1966 that under the the Company from proceeding with the former especially in the light
return-to-work agreement the Company had reserved its rights to of the additional specific stipulation that the strikers would be taken
prosecute Case No. 1484-MC(1) and, accordingly, directed that the back with the same employee status prior to the strike on April 22,
case be set for hearing covering the alleged illegality of the strike. 1965. The records disclose further that, according to Atty. Domingo E.
Within the prescribed period the Association filed a motion for de Lara when he testified on October 9, 1965, and this is not seriously
reconsideration of the February 15, 1966 order to which motion the disputed by private respondents, the purpose of Paragraph 10 of the
Company filed its opposition and, in due course, respondent court en return-to-work agreement was, to quote in part from this witness, "to
banc issued its resolution dated March 28, 1966 affirming the order. secure the tenure of employees after the return-to-work agreement
Appeal from the interlocutory order was elevated by the Association to considering that as I understand there were demotions and suspensions
this Court in G.R. No. L-25955, but the corresponding petition for of one or two employees during the strike and, moreover, there was
review was summarily "DISMISSED for being premature" under this this incident Case No. 1484-MC(1)" (see Brief for the Petition pp. 41-
court's resolution of May 13, 1966. 42). To borrow the language of Justice J.B.L. Reyes in Citizens Labor
Union Pandacan Chapter vs. Standard Vacuum Oil Company (G.R.
No. L-7478, May 6, 1955), in so far as the illegality of the strike is
ISSUE/S: whether the strike staged by the Association on April 22, concerned in this proceeding and in the light of the records.
1965 is illegal
... the matter had become moot. The parties had both abandoned their strike. We should not be understood here as advocating a strike in
original positions and come to a virtual compromise and agreed to order to secure recognition of a union by the employer. On the whole
resume unconditionally their former relations. To proceed with the we are satisfied from the records that it is incorrect to say that the
declaration of illegality would not only breach this understanding, strike of the Association was mainly for the purpose of securing
freely arrived at, but to unnecessarily revive animosities to the recognition as bargaining agent.
prejudice of industrial peace. (Emphasis supplied)
DISPOSITIVE: In favor of petitioners
Conceding arguendo that the illegality incident had not become moot
and academic, we find ourselves unable to agree with respondent court WHEREFORE, respondent court's resolution en banc dated May 16,
to the effect that the strike staged by the Association on April 22, 1965 1969, together with the decision dated February 26, 1969, is reversed
was unjustified, unreasonable and unwarranted that it was declared in and judgment is hereby rendered as follows:
open defiance of an order in Case No. 1484-MC not to strike; and that 1. In Case No. 1484-MC(1), the Court declares the strike of the Caltex
the Association resorted to means beyond the pale of the law in the Filipino Managers and Supervisors' Association as legal in all respects
prosecution of the strike. As adverted to above, the Association filed and, consequently, the forfeit of the employee status of J.J. Mapa,
its notice to strike on March 8, 1965, giving reasons therefor any one Dominador Mangalino and Herminigildo Mandanas is set aside. The
of which is a valid ground for a strike. Company is hereby ordered to reinstate J.J. Mapa and Dominador
Mangalino to their former positions without loss of seniority and
In addition, from the voluminous evidence presented by the privileges, with backwages from the time of dismissal on July 1, 1969.
Association, it is clear that the strike of the Association was declared Since Herminigildo Mandanas appears to have voluntarily left the
not just for the purpose of gaining recognition as concluded by Company, no reinstatement is ordered as to him.
respondent court, but also for bargaining in bad faith on the part of the 2. In Case No. 4344-ULP, the Court finds the Company B.F. Edwards
Company and by reason of unfair labor practices committed by its and W.E. Menefee guilty of unfair labor practices and they are
officials. But even if the strike were really declared for the purpose of therefore ordered to cease and desist from the same. In this connection,
recognition, the concerted activities of the officers and members of the the Company is furthermore directed to pay backwages to the striking
Association in this regard cannot be said to be unlawful nor the employees from April 22, 1965 to May 30, 1965 and to pay attorney's
purpose thereof be regarded as trivial. Significantly, in the voluntary fees which are hereby fixed at P20,000.00.
return-to-work agreement entered into between the Company and the Costs against private respondents.
Association, thereby ending the strike, the Company agreed to
recognize for membership in the Association the position titles DOCTRINE: . What is clearly within the law is the concerted activity
mentioned in Annex "B" of said agreement. 3 This goes to show that of cessation of work in order that a union's economic demands may be
striking for recognition is productive of good result in so far as a union granted or that an employer cease and desist from the unfair labor
is concerned. practice. That the law recognizes as a right.

Besides, one of the important rights recognized by the Magna Carta of

Labor is the right to self-organization and we do not hesitate to say
that is the cornerstone of this monumental piece of labor legislation.
Indeed, because of occasional delays incident to a certification
proceeding usually attributable to dilatory tactics employed by the
employer, to a certain extent a union may be justified in resorting to a
------------------------------------------- RULING: YES. Even assuming that respondents acted in their
113. Republic Savings Bank v. CIR individual capacities when they wrote the letter-charge they were
G.R. No. L-20303 nonetheless protected for they were engaged in concerted activity in
September 27, 1967 the exercise of their right of self-organization which includes
Digested by: Carl Au concerted activity for mutual aid and protection; and interference with
-------------------------------------------------- which constitutes an unfair labor practice.

Petitioner: REPUBLIC SAVINGS BANK (now REPUBLIC BANK) The joining in protests or demands, even by a small group of
Respondent: COURT OF INDUSTRIAL RELATIONS, ROSENDO employees, if in furtherance of their interests, is a concerted activity
T. RESUELLO, BENJAMIN JARA, FLORENCIO ALLASAS, protected by the Industrial Peace Act. It is not necessary that union
DOMINGO B. JOLA, DIOSDADO S. MENDIOLA, TEODORO DE activity be involved or that collective bargaining be contemplated.
LA CRUZ, NARCISO MACARAEG and MAURO A. ROVILLOS
Ponente: CASTRO, J. Instead of stifling criticism, the Bank should have allowed the
respondents to air their grievances. Good faith bargaining required of
FACTS: the Bank an open mind and a sincere desire to negotiate over
1. Republic Savings Bank (now Republic Bank or RB) terminated grievances.
respondents Resuello, Jola et al, for having written and
published "a patently libelous letter, tending to cause the The grievance committee, created in the collective bargaining
dishonor, discredit or contempt not only of officers and agreements, would have been an appropriate forum for such
employees and employer bank itself." negotiation. Indeed, the grievance procedure is a part of the continuous
2. Respondents had written to the bank president, Ramon Racelis, process of collective bargaining. It is intended to promote, as it were, a
a letter-charge, demanding his resignation on the grounds of friendly dialogue between labor and management as a means of
immorality, nepotism in the appointment andfavoritism as well maintaining industrial peace.
as discrimination in the promotion of RBemployees. CIR ruled
that RB’s act of dismissing the 8 respondent employees DOCTRINE: Even assuming that respondents acted in their
constituted an unfair labor practice within the meaning and individual capacities when they wrote the letter-charge they were
intendment of the Industrial Peace Act (RA 875).RB appealed. nonetheless protected for they were engaged in concerted activity in
It still maintains that the discharge was for cause. the exercise of their right of self-organization which includes
3. RB argued that CIR should have dismissed the complaint concerted activity for mutual aid and protection; and interference with
because the discharge of the respondents had nothing to do which constitutes an unfair labor practice.
with their union activities as the latter in fact admitted at the
hearing that the writing of the letter-charge was not a "union
action" but merely their "individual" act.

ISSUE/S: WON the dismissal of the 8 employees by RB constituted

unfair labor practice within the meaning and intendment of the
Industrial Peace Act?
------------------------------------------------------------------------------------- (b) The management will give priority to the women
CASE 114 Hacienda Fatima vs. National Federation of Sugarcane workers who are members of the union in case work
Workers-Food and General Trade relative x x x or amount[ing] to gahit and [dipol] arises
G.R. No. 149440 | January 28, 2003 (c) Ariston Eruela, Jr. will be given back his normal work
Digest by: Kayelyn Lat load which is six (6) days in a week The management
------------------------------------------------------------------------------------ will provide fifteen (15) wagons for the workers and
Petitioner: Hacienda Fatima and/or Patricio Villegas, Alfonso Villegas that existing workforce prior to the actual strike will be
and Cristine Segura given priority. However, in case the said workforce
Respondent: National Federation of Sugarcane Workers-Food and would not be enough, the management can hire
General Trade additional workers to supplement them.
Ponente: J. Panganiban (d) The management will not anymore allow the scabs,
numbering about eighteen (18) workers[,] to work in
Topic: Acts Violative of Right to Self-Organization: Interference, the hacienda; and
Restraint and Coercion (e) The union will immediately lift the picket upon signing
of this agreement.’
FACTS:
1. Contrary to the findings of the LA that complainants 5. Alleging that complainants failed to load the fifteen wagons,
(respondents) refused to work and/or were choosy in the kind respondents reneged on its commitment to sit down and
of jobs they wanted to perform, the records is replete with bargain collectively. Instead, respondent employed all means
complainants’ persistence and dogged determination in going including the use of private armed guards to prevent the
back to work. organizers from entering the premises.
2. Indeed, it would appear that respondents did not look with 6. Starting September 1991, respondents did not any more give
favor workers’ having organized themselves into a union. Thus, work assignments to the complainants forcing the union to
when complainant union was certified as the collective stage a strike on January 2, 1992. But due to the conciliation
bargaining representative in the certification elections, efforts by the DOLE, another Memorandum of Agreement was
respondents under the pretext that the result was on appeal, signed by the complainants and respondents
refused to sit down with the union for the purpose of entering - List of names of affected union members attached shall be
into a collective bargaining agreement. referred to the Hacienda payroll of 1990 and determined
3. Moreover, the workers including complainants herein were not WON concerned members are hacienda workers
given work for more than one month.
4. In protest, complainants staged a strike which was however - In case conflict or disagreement arises in the determination
settled upon the signing of a Memorandum of Agreement of the status of the hacienda works, agree to submit to VA
which stipulated among others that: 7. Parties met and the Minutes of the Conciliation Meeting
showed as follows:
(a) The parties will initially meet for CBA negotiations on the 11th - Meeting started at 10AM
day of January 1991 and will endeavor to conclude the same - List of employees based on who received their 13th month
within thirty (30) days.
pay
- 4 are deemed not employees
 - 12 shall be reinstated immediately upon availability of “Where there is no showing of clear, valid and legal cause for the
work termination of employment, the law considers the matter a case of
8. When respondents again reneged on its commitment, illegal dismissal and the burden is on the employer to prove that the
complainants filed the present complaint termination was for a valid and authorized cause.” In the case at bar,
9. But, complainants were being accused of refusing to work and petitioners failed to prove any such cause for the dismissal of
being choosy in the kind of work they have to perform respondents who are regular employees.
10. CA:
The NLRC also found herein petitioners guilty of unfair labor practice.
- while the work of respondents was seasonal in nature, they It ruled as follows:
were considered to be merely on leave during the offseason
and were therefore still employed by petitioners. “Indeed, from respondents’ refusal to bargain, to their acts of
- Moreover, the workers enjoyed security of tenure. Any economic inducements resulting in the promotion of those who
infringement upon this right was deemed by the CA to be withdrew from the union, the use of armed guards to prevent the
tantamount to illegal dismissal. organizers to come in, and the dismissal of union officials and
- The appellate court found neither “rhyme nor reason in members, one cannot but conclude that respondents did not want a
union in their hacienda—a clear interference in the right of the
petitioner’s argument that it was the workers themselves
workers to self-organization.”
who refused to or were choosy in their work.” As found by
the NLRC, the record of this case is “replete with
We uphold the CA’s affirmation of the above findings.
complainants’ persistence and dogged determination in
going back to work.”
DISPOSITIVE PORTION: Respondent WON.
- Petitioners were guilty of ULP
11. Hence, this petition. DOCTRINE: The Court finds no reason to disturb the CA’s dismissal
of what petitioners claim was their valid exercise of a management
ISSUE: Whether or not petitioner was guilty of unfair labor prerogative. The sudden changes in work assignments reeked of bad
practice for interfering with the workers’ right to self-organization faith. These changes were implemented immediately after respondents
had ‘organized themselves into a union and started demanding
HELD: YES collective bargaining. Those who were union members were
effectively deprived of their jobs. Petitioners’ move actually amounted
RATIO: to unjustified dismissal of respondents, in violation of the Labor Code.
The Court finds no reason to disturb the CA’s dismissal of what
petitioners claim was their valid exercise of a management
prerogative. The sudden changes in work assignments reeked of bad
faith. These changes were implemented immediately after respondents
had ‘organized themselves into a union and started demanding
collective bargaining. Those who were union members were
effectively deprived of their jobs. Petitioners’ move actually amounted
to unjustified dismissal of respondents, in violation of the Labor Code.
 HELD: NO. This is against the due process guaranteed by
------------------------------------------------------------------- our Constitution. It may be contended that this gap may be sub served
CASE 115 Scoty’s Department Store v. Micaller by requiring the Court of Industrial Relations to observe strictly the
GR No. L-8116 rules applicable to criminal cases to meet the requirements of the
August 25, 1956 Constitution, but this would be tantamount to amending the law which
Digest by: Jen Balmeo is not within the province of the judicial branch of our Government.
-------------------------------------------------------------------
In conclusion, our considered opinion is that the power to impose the
Petitioner: Scoty’s Dept Store penalties provided for in section 25 of Republic Act No. 875 is lodged
Respondent: Nena Micaller in ordinary courts, and not in the Court of Industrial Relations,
Ponente: J. Bautista Angelo notwithstanding the definition of the word "Court" contained in
Topic: Interrogation section 2 (a) of said Act. Hence, the decision of the industrial court in
so far as it imposes a fine of P100 upon petitioners is illegal and
FACTS: should be nullified.

Nena Micaller was employed as a salesgirl in the Scoty's Department The procedure laid down by law to be observed by the Court of
Store situated at 615 Escolta, Manila. This store was owned and Industrial Relations in dealing with unfair labor practice cases negates
operated by Yu KiLam, Richard Yang, Yu Si Kiao and Helen Yang. those constitutional guarantees to the accused. And this is so because,
Pursuant to section 5(b) of the Industrial Peace Act, Nena Micaller among other things, the law provides that "the rules of evidence
filed charges of unfair labor practice against her above employers prevailing in courts of law or equity shall not be controlling and it is
alleging that she was dismissed by them because of her membership in the spirit and intention of this Act that the Court of Industrial Relations
the National Labor Union and that, prior to her separation, said and its members and Hearing Examiners shall use every and all
employers had been questioning their employees regarding their reasonable means to ascertain the facts in each case speedily and
membership in said union and had interfered with their right to objectively and without regard to technicalities of law, or procedure."
organize under the law. The employers denied the charge. They
claimed that the complainant was dismissed from the service because It is likewise enjoined that "the Court shall not be bound solely by the
of her misconduct and serious disrespect to the management and her evidence presented during the hearing but may avail itself of all other
co employees so much so that several criminal charges were filed means such as (but not limited to) ocular inspections and questioning
against her with the city fiscal of Manila who, after investigation, filed of well-informed persons which results must be made a part of the
the corresponding information’s against her and the same are now record". All-this means that an accused may be tried without the right
pending trial in court. "to meet the witnesses face to face" and may be convicted merely on
preponderance of evidence and not beyond reasonable doubt
The Court of industrial relation ruled in favor of Nina Micaller and
impose fine against the petitioner. DISPOSITIVE: Department Store won. Decision modified.

ISSUE: WON the Court of Industrial Relations has jurisdiction to DOCTRINE: The power to impose the penalties provided for in
impose the penalties prescribed in section 25 of Republic Act No. section 25 of Republic Act No. 875 is lodged in ordinary courts, and
875. not in the Court of Industrial Relations, notwithstanding the definition
of the word "Court" contained in section 2(a) of said Act
 the majority of its employees and proceeded to consider CSA's
-------------------------------------------------------------------- demands.
CASE 116 PHILIPPINE STEAM NAVIGATION CO. V. PHIL.
MARINE OFFICERS GUILD, PHILSTEAM and CSA signed a collective bargaining agreement. On
G.R. Nos. L-20667 and 20669 October 29, 1965 the same date, PMOG declared a strike against PHILSTEAM. Around
Digested by: Lanz Olives 46 officers of PHILSTEAM joined PMOG's strike; 15 of these later
-------------------------------------------------------------------- returned to work, leaving 31 PHILSTEAM officers on strike. Pier 4 of
the North Harbor of the Port of Manila, where PHILSTEAM vessels
Petitioner: PHILIPPINE STEAM NAVIGATION CO docked, was among the areas picketed during the strike.
Respondents: PHILIPPINE OFFICERS GUILD, ET AL
Nature of the Case: CIR (Court of Industrial Relations) held that Philippine Steam
Ponente: Bengzon, J.P., J. Navigation Company, its agents, successors and assigns, to cease and
desist from interrogating and investigating their employees to
TOPIC: Acts that violate right to self-organization; interference, determine whether they have authorized Philippine Marine Officers
restraint and coercion; interrogation Guild or any other labor organization to represent them for the purpose
of collective bargaining, discouraging or trying to discourage any of
FACTS: such employees from remaining as a member of Philippine Marine
Officers Guild or any other labor organization, and encouraging or
PMOG (Philippine Marine Officers Guild) sent PHILSTEAM trying to encourage any of such employees to join Cebu Seamen's
(Philippine Steam Navigation Co. Inc.) a set of demands with a request Association or any other labor organization, and, in any manner,
for collective bargaining. Subsequently, PHILSTEAM transmitted its interfering with, restraining, or coercing their employees in the
answer to PMOG, requiring the latter to first prove its representation exercise of their right to self-organization and other rights guaranteed
of a majority of PHILSTEAM's employees before its demands will be in Section 3 of this Act; and offer all of their striking employees
considered as requested. PHILSTEAM, on the same date, started immediate and full reinstatement to their former or substantially
interrogating and investigating its captains, deck officers, and equivalent positions, without back salaries and without prejudice to
engineers, to find out directly from them if they had joined PMOG or their seniority or other rights and privileges, unless they have found
authorized PMOG to represent them. substantially equivalent employment elsewhere during the pendency of
this case.
A reply was sent by PMOG to the answer of PHILSTEAM, insisting
that PHILSTEAM consider its requests and demands first before PHILSTEAM admits that it initiated and carried out an investigation
requiring proof of majority representation. PMOG thereafter filed on a of its officers as to their membership in PMOG and whether they had
notice of intention to strike stating as reasons therefor PHILSTEAM's given PMOG authority to represent them in collective bargaining. The
alleged refusal to bargain and unspecified unfair labor practices. The reason for this, PHILSTEAM would, however, aver, was merely to
Department of Labor brought PHILSTEAM and PMOG to a ascertain for itself the existence of a duty to bargain collectively with
conference without any success. PMOG, a step allegedly justified by PMOG's refusal to furnish proof
of majority representation.
The CSA (Cebu Seamen’s Association) had meanwhile also
transmitted its own set of demands to PHILSTEAM. PHILSTEAM
and CSA met. PHILSTEAM therein recognized CSA as representing
ISSUE: Whether or not PHILSTEAM committed unfair labor
practice by interrogating its employees

RULING: YES.

The respondent court has found that PHILSTEAM's interrogation of

its employees had in fact interfered with, restrained and coerced the
employees in the exercise of their rights to self-organization (Petition,
Annex A, p. 31). Such finding being upon questions of fact, the same
cannot be reversed herein, because it is fully supported by substantial
evidence.

The rule in this jurisdiction is that subjection by the company of its

employees to a series of questionings regarding their membership in
the union or their union activities, in such a way as to hamper the
exercise of free choice on their part, constitutes unfair labor practice
(Scoty's Department Store vs. Micaller, 52 O.G. 5119). PHILSTEAM's
aforestated interrogation squarely falls under this rule.

DISPOSITIVE: PMOG won.

DOCTRINE: An employer is not denied the privilege of interrogating

its employees as to their union affiliation, provided the same is for a
legitimate purpose and assurance is given by the employer that no
reprisals would be taken against unionists. Nonetheless, any employer
who engages in interrogation does so with notice that he risks a finding
of unfair labor practice if the circumstances are such that his
interrogation restrains or interferes with employees in the exercise of
their rights to self-organization.
 but, instead, insisted that the Unions first drop their demand for
-------------------------------------------------- union security, promising money benefits if this was done.
117 THE INSULAR LIFE ASSURANCE CO LTD EMPLOYEES
ASSOCIATION V. THE INSULAR LIFE ASSURANCE CO 3. From April 25 to May 6, 1958, the parties negotiated on the labor
GR NO. L-25291 demands but with no satisfactory result due to a stalemate on the
January 30, 1971 matter of salary increases. On May 13, 1958 the Unions
Digest by: Metha Dawn H. Orolfo demanded from the Companies final counter-proposals on their
-------------------------------------------------- economic demands, particularly on salary increases. Instead of
giving counter-proposals, the Companies on May 15, 1958
Petitioner: The Insular Life Assurance Co., Ltd., Employees presented facts and figures and requested the Unions to submit a
Association-Natu, Fgu Insurance Group Workers And Employees workable formula which would justify their own proposals,
Association-Natu, And Insular Life Building Employees Association- taking into account the financial position of the former.
Natu Forthwith the Unions voted to declare a strike in protest against
Respondent: The Insular Life Assurance Co., Ltd., Fgu Insurance what they considered the Companies' unfair labor practices.
Group, Jose M. Olbes And Court Of Industrial Relations
Ponente: Castro 4. On May 20, 1958 the Unions went on strike and picketed the
offices of the Insular Life Building at Plaza Moraga.
Topic: Picketing – Nature and Purpose of Picket Line
5. On May 21, 1958 the Companies through their acting manager
FACTS: and president, the respondent Jose M. Olbes (hereinafter referred
to as the respondent Olbes), sent to each of the strikers a letter
1. In a letter dated September 16, 1957, the Unions jointly (exhibit A) quoted verbatim as follows:
submitted proposals to the Companies for a modified renewal of
their respective collective bargaining contracts which were then We recognize it is your privilege both to strike and to conduct
due to expire on September 30, 1957. The parties mutually picketing.
agreed and to make whatever benefits could be agreed upon However, if any of you would like to come back to work voluntarily,
retroactively effective October 1, 1957. you may:
2. Thereafter, in the months of September and October 1957 1. Advise the nearest police officer or security guard of your intention
negotiations were conducted on the Union's proposals, but these to do so.
were snagged by a deadlock on the issue of union shop, as a 2. Take your meals within the office.
result of which the Unions filed on January 27, 1958 a notice of 3. Make a choice whether to go home at the end of the day or to sleep
strike for "deadlock on collective bargaining." Several nights at the office where comfortable cots have been prepared.
conciliation conferences were held under the auspices of the 4. Enjoy free coffee and occasional movies.
Department of Labor wherein the conciliators urged the 5. Be paid overtime for work performed in excess of eight hours.
Companies to make reply to the Unions' proposals en toto so that 6. Be sure arrangements will be made for your families.
the said Unions might consider the feasibility of dropping their The decision to make is yours — whether you still believe in the
demand for union security in exchange for other benefits. motives of the strike or in the fairness of the Management.
However, the Companies did not make any counter-proposals
 6. The Unions, however, continued on strike, with the exception of notifying them to return to work at a time specified therein, otherwise
a few unionists who were convinced to desist by the aforesaid new employees would be engaged to perform their jobs. Individual
letter of May 21, 1958. solicitation of the employees or visiting their homes, with the
7. the Companies, again through the respondent Olbes, sent employer or his representative urging the employees to cease union
individually to the strikers a letter (exhibit B), quoted hereunder activity or cease striking, constitutes unfair labor practice. All the
in its entirety: above-detailed activities are unfair labor practices because they tend to
undermine the concerted activity of the employees, an activity to
The first day of the strike was last 21 May 1958. which they are entitled free from the employer's molestation.
Our position remains unchanged and the strike has made us even more
convinced of our decision. Moreover, since exhibit A is a letter containing promises of benefits to
We do not know how long you intend to stay out, but we cannot hold the employees in order to entice them to return to work, it is not
your positions open for long. We have continued to operate and will protected by the free speech provisions of the Constitution. The same
continue to do so with or without you. is true with exhibit B since it contained threats to obtain replacements
If you are still interested in continuing in the employ of the Group for the striking employees in the event they did not report for work on
Companies, and if there are no criminal charges pending against you, June 2, 1958. The free speech protection under the Constitution is
we are giving you until 2 June 1958 to report for work at the home inapplicable where the expression of opinion by the employer or his
office. If by this date you have not yet reported, we may be forced to agent contains a promise of benefit, or threats, or reprisal
obtain your replacement.
Before, the decisions was yours to make. When the respondents offered reinstatement and attempted to "bribe"
So it is now. the strikers with "comfortable cots," "free coffee and occasional
movies," "overtime" pay for "work performed in excess of eight
ISSUE/S: hours," and "arrangements" for their families, so they would abandon
WON respondent company guilty of unfair labor practice and violated the strike and return to work, they were guilty of strike-breaking
the freedom of picketing of its workers (petitioners)? and/or union-busting and, consequently, of unfair labor practice. It is
equivalent to an attempt to break a strike for an employer to offer
RULING: YES. reinstatement to striking employees individually, when they are
Indeed, it is an unfair labor practice for an employer operating under a represented by a union, since the employees thus offered reinstatement
collective bargaining agreement to negotiate or to attempt to negotiate are unable to determine what the consequences of returning to work
with his employees individually in connection with changes in the would be.
agreement. And the basis of the prohibition regarding individual
bargaining with the strikers is that although the union is on strike, the Likewise violative of the right to organize, form and join labor
employer is still under obligation to bargain with the union as the organizations are the following acts: the offer of a Christmas bonus to
employees' bargaining representative. all "loyal" employees of a company shortly after the making of a
Similar actions are illegal as constituting unwarranted acts of request by the union to bargain; wage increases given for the purpose
interference. Thus, the act of a company president in writing letters to of mollifying employees after the employer has refused to bargain with
the strikers, urging their return to work on terms inconsistent with their the union, or for the purpose of inducing striking employees to return
union membership, was adjudged as constituting interference with the to work; the employer's promises of benefits in return for the strikers'
exercise of his employees' right to collective bargaining. It is likewise abandonment of their strike in support of their union; and the
an act of interference for the employer to send a letter to all employees employer's statement, made about 6 weeks after the strike started, to a
group of strikers in a restaurant to the effect that if the strikers returned
to work, they would receive new benefits in the form of
hospitalization, accident insurance, profit-sharing, and a new building
to work in.

DISPOSITIVE: Petitioner won.

DOCTRINE: The act of an employer in notifying absent employees

individually during a strike following unproductive efforts at collective
bargaining that the plant would be operated the next day and that their
jobs were open for them should they want to come in has been held to
be an unfair labor practice, as an active interference with the right of
collective bargaining through dealing with the employees individually
instead of through their collective bargaining representatives.
-------------------------------------------------- PBMEO representatives that workers who belong to the first
CASE 118 PHILIPPINE BLOOMING MILLS EMPLOYMENT and regular shifts, who without previous leave of absence
ORGANIZATION VS PHILIPPINE BLOOMING MILLS CO., approved by the Company, particularly, the officers present
INC who are the organizers of the demonstration, who shall fail to
G.R. No. L-31195 report for work the following morning (March 4, 1969) shall be
June 5, 1973 dismissed, because such failure is a violation of the existing
Digest by: Michelle Vale Cruz CBA and, therefore, would be amounting to an illegal strike;
-------------------------------------------------- 4. A second meeting took place in the afternoon of March 3,
where the company reiterated their appeal that while the
Petitioner: PHILIPPINE BLOOMING MILLS EMPLOYMENT workers may be allowed to participate, those from the 1st and
ORGANIZATION, NICANOR TOLENTINO, FLORENCIO, regular shifts should not absent themselves to participate,
PADRIGANO RUFINO, ROXAS MARIANO DE LEON, otherwise, they would be dismissed. Since it was too late to
ASENCION PACIENTE, BONIFACIO VACUNA, BENJAMIN cancel the plan, the rally took place and the officers of the
PAGCU and RODULFO MUNSOD PBMEO were eventually dismissed for a violation of the ‘No
Respondent: PHILIPPINE BLOOMING MILLS CO., INC. and Strike and No Lockout’ clause of their Collective Bargaining
COURT OF INDUSTRIAL RELATIONS Agreement.
5. Herein petitioners claim that they did not violate the existing
Topic: Acts Violative of Right to Self-Organization CBA because they gave the respondent Company prior notice
of the mass demonstration on March 4, 1969; that the said mass
FACTS: demonstration was a valid exercise of their constitutional
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Blooming freedom of speech against the alleged abuses of some Pasig
decided to stage a mass demonstration in front of Malacañang policemen; and that their mass demonstration was not a
to express their grievances against the alleged abuses of the declaration of strike because it was not directed against the
Pasig Police to be participated by the first shift (6:00 AM-2:00 respondent firm.
PM) workers as well as those working in the regular shifts 6. The lower court decided in favor of the company and the
(7:00 A.M. to 4:00 PM and 8:00 AM to 5:00 PM) in the officers of the PBMEO were found guilty of bargaining in bad
morning of March 4, 1969; faith.
2. After learning about the planned mass demonstration,
Philippine Blooming Mills Inc., called for a meeting with the ISSUE: Whether or not the workers who joined the strike violated the
leaders of the PBMEO. During the meeting, the planned CBA.
demonstration was confirmed by the union. But it was stressed
out that the demonstration was not a strike against the company RULING: NO. Such was a valid exercise of their constitutional right.
but was in fact an exercise of the laborers inalienable
constitutional right to freedom of expression, freedom of The rights of free expression, free assembly and petition, are not only
speech and freedom for petition for redress of grievances. civil rights but also political rights essential to man's enjoyment of his
3. The company asked them to cancel the demonstration for it life, to his happiness and to his full and complete fulfillment. Thru
would interrupt the normal course of their business which may these freedoms the citizens can participate not merely in the periodic
result in the loss of revenue. The Company also warned the establishment of the government through their suffrage but also in the
administration of public affairs as well as in the discipline of abusive
public officers. The citizen is accorded these rights so that he can the collective bargaining agreement with private respondent Philippine
appeal to the appropriate governmental officers or agencies for redress Blooming Mills Co., inc.. Set against and tested by foregoing
and protection as well as for the imposition of the lawful sanctions on principles governing a democratic society, such conclusion cannot be
erring public officers and employees. sustained. The demonstration held petitioners on March 4, 1969 before
Malacañang was against alleged abuses of some Pasig policemen, not
While the Bill of Rights also protects property rights, the primacy of against their employer, herein private respondent firm, said
human rights over property rights is recognized. Because these demonstrate was purely and completely an exercise of their freedom
freedoms are "delicate and vulnerable, as well as supremely precious expression in general and of their right of assembly and petition for
in our society" and the "threat of sanctions may deter their exercise redress of grievances in particular before appropriate governmental
almost as potently as the actual application of sanctions," they "need agency, the Chief Executive, again the police officers of the
breathing space to survive," permitting government regulation only municipality of Pasig. They exercise their civil and political rights for
"with narrow specificity." their mutual aid protection from what they believe were police
excesses. As matter of fact, it was the duty of herein private respondent
Property and property rights can be lost thru prescription; but human firm to protect herein petitioner Union and its members fro the
rights are imprescriptible. If human rights are extinguished by the harassment of local police officers. It was to the interest herein private
passage of time, then the Bill of Rights is a useless attempt to limit the respondent firm to rally to the defense of, and take up the cudgels for,
power of government and ceases to be an efficacious shield against the its employees, so that they can report to work free from harassment,
tyranny of officials, of majorities, of the influential and powerful, and vexation or peril and as consequence perform more efficiently their
of oligarchs — political, economic or otherwise. respective tasks enhance its productivity as well as profits. Herein
respondent employer did not even offer to intercede for its employees
In the hierarchy of civil liberties, the rights of free expression and of with the local police.
assembly occupy a preferred position as they are essential to the
preservation and vitality of our civil and political institutions; and such In seeking sanctuary behind their freedom of expression well as their
priority "gives these liberties the sanctity and the sanction not right of assembly and of petition against alleged persecution of local
permitting dubious intrusions." officialdom, the employees and laborers of herein private respondent
firm were fighting for their very survival, utilizing only the weapons
The superiority of these freedoms over property rights is underscored afforded them by the Constitution — the untrammelled enjoyment of
by the fact that a mere reasonable or rational relation between the their basic human rights. The pretension of their employer that it
means employed by the law and its object or purpose — that the law is would suffer loss or damage by reason of the absence of its employees
neither arbitrary nor discriminatory nor oppressive — would suffice to from 6 o'clock in the morning to 2 o'clock in the afternoon, is a plea
validate a law which restricts or impairs property rights. On the other for the preservation merely of their property rights.
hand, a constitutional or valid infringement of human rights requires a
more stringent criterion, namely existence of a grave and immediate As heretofore stated, the primacy of human rights — freedom of
danger of a substantive evil which the State has the right to prevent. expression, of peaceful assembly and of petition for redress of
grievances — over property rights has been sustained.
The respondent Court of Industrial Relations, after opining that the
mass demonstration was not a declaration of strike, concluded that by The respondent company is the one guilty of unfair labor practice.
their "concerted act and the occurrence temporary stoppage of work," Because the refusal on the part of the respondent firm to permit all its
herein petitioners are guilty bargaining in bad faith and hence violated employees and workers to join the mass demonstration against alleged
police abuses and the subsequent separation of the eight (8) petitioners
from the service constituted an unconstitutional restraint on the
freedom of expression, freedom of assembly and freedom petition for
redress of grievances, the respondent firm committed an unfair labor
practice defined in Section 4(a-1) in relation to Section 3 of Republic
Act No. 875, otherwise known as the Industrial Peace Act. Section 3 of
Republic Act No. 8 guarantees to the employees the right "to engage in
concert activities for ... mutual aid or protection"; while Section 4(a-1)
regards as an unfair labor practice for an employer interfere with,
restrain or coerce employees in the exercise their rights guaranteed in
Section Three."

We repeat that the obvious purpose of the mass demonstration staged

by the workers of the respondent firm on March 4, 1969, was for their
mutual aid and protection against alleged police abuses, denial of
which was interference with or restraint on the right of the employees
to engage in such common action to better shield themselves against
such alleged police indignities. The insistence on the part of the
respondent firm that the workers for the morning and regular shift
should not participate in the mass demonstration, under pain of
dismissal, was as heretofore stated, "a potent means of inhibiting
speech."

Such a concerted action for their mutual help and protection deserves
at least equal protection as the concerted action of employees in giving
publicity to a letter complaint charging bank president with
immorality, nepotism, favoritism and discrimination in the
appointment and promotion of ban employees.

DISPOSITIVE: Petitioners won

 4. In due course, its Presiding Judge issued the order appealed from,
-------------------------------------------------- which was affirmed by the CIR sitting en banc.
CASE 119 VISAYAN STEVEDORE TRANS. CO. v. CIR 5. CIR: Petitioners guilty of unfair labor practice as charged, directs
G.R. No. L-21696 / 19 SCRA 426 them to cease and desist from such unfair labor practice and to
February 25, 1967 reinstate the complainants, with back wages from the date they
Digest by: Thea Denilla were laid off until reinstated.
-------------------------------------------------- 6. Hence, this petition for review by certiorari.

Petitioner: Visayan Stevedore Transportation Company ISSUES:

(VISTRANCO) and Rafael Xaudaro
2. Whether or not there is employer-employee relationship
Respondent: Court of Industrial Relations, United Workers’ & between the Company and the Complainants
Farmers’ Association (UWFA) Venancio Dano-og, Buenaventura 3. Whether or not the Company has been guilty of unfair labor
Agarcio and 137 others practice
Ponente: Concepcion, C.J. 4. Whether or not the order of reinstatement of Complainants,
with backpay, is a reversible error.

Topic: Non-Union Membership or Withdrawal from Membership as a RULING: 1. Yes there is employer-employee relationship.
condition of Employment (Yellow-Dog Contract)
Yes, because in the performance of their duties, Complainants worked,
FACTS: however, under the direction and control of the officers of the
Company, whose paymaster, or disbursing officer paid the
1. Visayan Stevedoring Transportation Co. (VISTRANCO) is corresponding compensation directly to said Complainants, who, in
engaged in the loading and unloading of vessels, with a branch turn, acknowledged receipt in payrolls of the Company. We have
office in Hinigaran, Negros Occidental, under the management of already held that laborers working under these conditions are
said Rafael Xaudaro. employees of the Company in the same manner as watchmen or
2. Its workers are supplied by the United Workers and Farmers security guards furnished, under similar circumstances, by watchmen
Association (UWFA) , a labor organization — whose men or security agencies, inasmuch as the agencies and/or labor
(affiliated to various labor unions) have regularly worked as organizations involved therein merely performed the role of a
laborers of the Company during every milling season since representative or agent of the employer in the recruitment of men
immediately after World War II up to the milling season needed for the operation of the latter's business.
immediately preceding November 11, 1955, when the Company
refused to engage the services of Venancio Dano-og, 2. Yes, the company is guilty of unfair labor practice.
Buenaventura, Agarcio and 137 other persons named in the
complaint Yes, because referring to the unfair labor practice charge against the
3. At the behest of the UWFA and the Complainants, a complaint for Company, the Court finds, with the CIR, that said charge is
unfair labor practice was, accordingly, filed against the Company substantially borne out by the evidence of record, it appearing that the
and Xaudaro with the Court of Industrial Relations. workers not admitted to work beginning from November, 1955, were
precisely those belonging to the UWFA and the Xaudaro, the Company
Branch Manager, had told them point-blank that severance of their
connection with the UWFA was the remedy, if they wanted to continue
working with the Company.

3.No, the order of reinstatement of complainants with backpay is not a

reversible error.

No, because as to the payment of back wages, the law explicitly vests
in the CIR discretion to order the reinstatement with back pay of
laborers dismissed due to union activities, and the record does not
disclose any cogent reason to warrant interference with the action
taken by said Court.

DISPOSITIVE: WHEREFORE, the order and resolution appealed

from are hereby affirmed, with costs against petitioners herein. It is so
ordered.

DOCTRINE: Stipulation Prohibiting Employee to Join Union. A

yellow dog contract is an employment contract which prohibits an
employee from joining a labor organization or which requires him to
withdraw from one to which he belongs. Yellow dog contract is
prohibited under Article 248(b) of the Labor Code.
 members. For said reason, Bankard contended that the issue of bad
--------------------------------------------------------------------- faith in bargaining had become moot and academic.
CASE 120. Bankard, Inc. v. NLRC
G.R. No. 171664 4) Union alleged that contractualization started in Bankard in 1995 in
March 6, 2013 the Records Communications Management Division, particularly
Digest by: Olive Cachapero in the mailing unit, which was composed of two (2) employees and
--------------------------------------------------------------------- fourteen (14) messengers. They were hired as contractual workers
to perform the functions of the regular employees who had earlier
Topic: Contracting out to Discourage Unionism resigned and availed of the MRP. According to the Union, there
were other departments in Bankard utilizing messengers to perform
FACTS: work load considered for regular employees, like the Marketing
1) Respondent Bankard Employees Union-AWATU (Union) filed Department, Voice Authorizational Department, Computer
before the National Conciliation and Mediation Board (NCMB) its Services Department, and Records Retention Department. The
first Notice of Strike (NOS), alleging commission of unfair labor Union contended that the number of regular employees had been
practices by petitioner Bankard, Inc. (Bankard), to wit: 1) job reduced substantially through the management scheme of freeze-
contractualization; 2) outsourcing/contracting-out jobs; 3) hiring policy on positions vacated by regular employees on the
manpower rationalizing program; and 4) discrimination. basis of cost-cutting measures and the introduction of a more
drastic formula of streamlining its regular employees through the
2) Bankard: is of the position that job contractualization or MRP.
outsourcing or contracting-out of jobs was a legitimate exercise of
management prerogative and did not constitute ULP. It had to 5) Union averred that Bankard’s proposals were way below their
implement new policies and programs, one of which was the demands, showing that the management had no intention of
Manpower Rationalization Program (MRP) to further enhance reaching an agreement. It was a scheme calculated to force the
its efficiency and be more competitive in the credit card industry. Union to declare a bargaining deadlock.
The MRP was an invitation to the employees to tender their
voluntary resignation, with entitlement to separation pay 6) NLRC: declared that the management committed acts considered
equivalent to at least two (2) months salary for every year of as ULP. It ruled that the act of management of reducing its number
service. Those eligible under the company’s retirement plan would of employees thru application of the Manpower Rationalization
still receive additional pay. Thereafter, majority of the Phone Program and subsequently contracting the same to other
Center and the Service Fulfilment Division availed of the MRP. contractual employees defeats the purpose or reason for
Thus, Bankard contracted an independent agency to handle its call streamlining the employees. The ultimate effect is to reduce the
center needs. number of union members and increasing the number of
contractual employees who could never be members of the union
3) Bankard denied that there was bad faith on its part in bargaining for lack of qualification. Consequently, the union was effectively
with the Union. It came up with counter-offers to the Union’s restrained in their movements as a union on their rights to self-
proposals, but the latter’s demands were far beyond what organization. Management had successfully limited and prevented
management could give. Nonetheless, Bankard continued to the growth of the Union and the acts are clear violation of the
negotiate in good faith CBA was entered into between Bankard and provisions of the Labor Code and could be considered as Unfair
the Union. The CBA was overwhelmingly ratified by the Union
 Labor Practice in the light of the provisions of Article 248 CBA. It refers to "acts that violate the workers’ right to organize."
paragraph (c) of the Labor Code. Without that element, the acts, even if unfair, are not ULP.

7) NLRC, however, agreed with Bankard that the issue of bargaining The general principle is that the one who makes an allegation has the
in bad faith was rendered moot and academic by virtue of the burden of proving it. While there are exceptions to this general rule, in
finalization and signing of the CBA between the management and ULP cases, the alleging party has the burden of proving the ULP; and
the Union. in order to show that the employer committed ULP under the Labor
Code, substantial evidence is required to support the claim. Such
8) CA: agreed with Bankard that job contracting, outsourcing and/or principle finds justification in the fact that ULP is punishable with both
contracting out of jobs did not per se constitute ULP, especially civil and/or criminal sanctions.
when made in good faith and for valid purposes. CA, however,
ruled in this wise: Incontrovertible is the fact that petitioner's acts, Aside from the bare allegations of the Union, nothing in the records
particularly its promotion of the program enticing employees to strongly proves that Bankard intended its program, the MRP, as a tool
tender their voluntary resignation in exchange for financial to drastically and deliberately reduce union membership. Contrary to
packages, resulted to a union dramatically reduced in numbers. the findings and conclusions of both the NLRC and the CA, there was
Coupled with the management's policy of "freeze-hiring" of no proof that the program was meant to encourage the employees to
regular employees and contracting out jobs to contractual workers, disassociate themselves from the Union or to restrain them from
petitioner was able to limit and prevent the growth of the Union, an joining any union or organization. There was no showing that it was
act that clearly constituted unfair labor practice. intentionally implemented to stunt the growth of the Union or that
Bankard discriminated, or in any way singled out the union members
Article 248(c) of the Labor Code which states that: who had availed of the retirement package under the MRP. True, the
Art. 248. Unfair labor practices of employers. – It shall be program might have affected the number of union membership
unlawful for an employer to commit any of the following unfair because of the employees’ voluntary resignation and availment of the
labor practice: package, but it does not necessarily follow that Bankard indeed
purposely sought such result. It must be recalled that the MRP was
(c) To contract out services or functions being performed by union implemented as a valid cost-cutting measure, well within the ambit
members when such will interfere with, restrain or coerce of the so-called management prerogatives. Bankard contracted an
employees in the exercise of their rights to self-organization; independent agency to meet business exigencies. In the absence of any
showing that Bankard was motivated by ill will, bad faith or malice, or
ISSUE: WON Bankard committed acts considered as ULP. that it was aimed at interfering with its employees’ right to self-
organize, it cannot be said to have committed an act of unfair labor
RULING: practice.
NO. Bankard merely validly exercised its management
prerogative. Not shown to have acted maliciously or arbitrarily, no Unfortunately, the Union, which had the burden of adducing
act of ULP can be imputed against it. substantial evidence to support its allegations of ULP, failed to
discharge such burden.
The Court has ruled that the prohibited acts considered as ULP relate
to the workers’ right to self-organization and to the observance of a The law on unfair labor practices is not intended to deprive employers
of their fundamental right to prescribe and enforce such rules as they
honestly believe to be necessary to the proper, productive and
profitable operation of their business.

Dispositive: Bankard won.

Doctrine: Contracting out of services is an exercise of business

judgment or management prerogative. Absent any proof that
management acted in a malicious or arbitrary manner, the Court will
not interfere with the exercise of judgment by an employer.