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II.B.

NON-UNIONIZED ESTABLISHMENTS -PALEA’s reply: Art 249(E), LC was violated when PAL unilaterally implemented the
following:
Sec. 2. Non-exclusivity. — This Code does not contain the
LABOR-MANAGEMENT COUNCIL entirety of the rules and regulations of the company.
Every employee is bound to comply with all applicable
rules, regulations, policies, procedures and standards,
PAL V. NLRC, 225 SCRA 301 (1993) including standards of quality, productivity and
behaviour, as issued and promulgated by the company
SUMMARY: PAL revised its 1966 Code of Discipline in 1985, without sufficient
through its duly authorized officials. Any violations
notice to its employees, thereby subjecting some of its employees to disciplinary
thereof shall be punishable with a penalty to be
measures and even dismissing some of them. PALEA filed a ULP case before NLRC.
determined by the gravity and/or frequency of the
LA was for PAL, though she did not find any ULP or BF bargaining on PAL’s part.
offense.
NLRC affirmed said decision. SC upheld the said decisions, saying that PAL should
Sec. 7. Cumulative Record. — An employee's record of
have involved the employees in the revision of the Code of Discipline as it is not
offenses shall be cumulative. The penalty for an offense
purely management prerogative, the act involving repercussions to the employees’
shall be determined on the basis of his past record of
security of tenure. Shared responsibility between management and labor also
offenses of any nature or the absence thereof. The more
highlighted as already an existing state policy even before the amendment of the
habitual an offender has been, the greater shall be the
LC.
penalty for the latest offense. Thus, an employee may be
dismissed if the number of his past offenses warrants
FACTS:
such penalty in the judgment of management even if
-PAL unilaterally revised its 1966 Code of Discipline in March 15, 1985.; This was
each offense considered separately may not warrant
immediately implemented
dismissal. Habitual offenders or recidivists have no place
-it was circulated among its employees (point of contention: PAL contends all the
in PAL. On the other hand, due regard shall be given to
employees received a copy while PALEA argues otherwise)
the length of time between commission of individual
-as a result of the said revision, some of the employees were subjected to
offenses to determine whether the employee's conduct
disciplinary measures in accordance with the said 1985 Code of Discipline
may indicate occasional lapses (which may nevertheless
-PALEA filed a complaint before NLRC for ULP (A249 e and g; Art. 253):
require sterner disciplinary action) or a pattern of
 copies of the code circulated in limited numbers incorrigibility.
 Code is penal in nature: should have complied with requirements of  -LA Ortiguerra called conference – parties did not attend – so LA Ortiguerra
sufficient publication considered the case submitted for decision (interpreted absence to waiver of right
 Code was arbitrary, oppressive, and prejudicial to the rights of the to present evidence)
employees -LA:
>PRAYER: 1. No BF on PAL
1. Implementation of the Code be held in abeyance 2. No ULP
2. PAL discuss substance of the Code with PALEA BUT…
3. EEs dismissed be reinstated, subjected to further hearing A. Section 1 of the Code: all embracing, all encompassing that makes
4. PAL be declared guilty of ULP, ordered to pay damages punishable any offense one can think of in a company
-PAL filed MTD: B. Section 7: objectionable for it violates the rule against double jeopardy
1. Management prerogative thereby ushering in two or more punishment for the same
2. Complaint not supported by evidence misdemeanor."
3. Art 253 not involved because a CBA was already negotiated C. PAL failed to prove that the Code was amply circulated (no
documentary evidence):
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-so PAL needs to:  distributing its products, but gave the following caveat: So long as a
1. Furnish all employees with the new Code of Discipline; company's management prerogatives are exercised in good faith for the
2. Reconsider the cases of employees meted with penalties under the New Code of advancement of the employer's interest and not for the purpose of
Discipline and remand the same for further hearing; and defeating or circumventing the rights of the employees under special laws
3. Discuss with PALEA the objectionable provisions specifically tackled in the body of or under valid agreements, this Court will uphold them. 
the decision.  University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]: the exercise of
All other claims of the complainant union (is) [are] hereby, dismissed for lack of managerial prerogatives is not unlimited. It is circumscribed by limitations
merit. found in law, a collective bargaining agreement, or the general principles
-PAL appealed to NLRC of fair play and justice
-NLRC (Com. Encarnacion): No evidence of ULP, affirmed dismissal of PALEA’s  Abbott Laboratories (Phil.), vs. NLRC (154 713 [1987]): it must be duly
charge but: established that the prerogative being invoked is clearly a managerial one.
“The complainant union in this case has the right to feel isolated in the adoption of -HERE: they are not purely business-oriented nor do they concern the
the New Code of Discipline. The Code of Discipline involves security of tenure and management aspect of the business of the company as in the San Miguel case. The
loss of employment — a property right! It is time that management realizes that to provisions of the Code clearly have repercusions on the employee's right to
attain effectiveness in its conduct rules, there should be candidness and openness security of tenure. The implementation of the provisions may result in the
by Management and participation by the union, representing its members. In fact, deprivation of an employee's means of livelihood which, as correctly pointed out by
our Constitution has recognized the principle of "shared responsibility" between the NLRC, is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268
employers and workers and has likewise recognized the right of workers to [1986]).
participate in "policy and decision-making process affecting their rights . . ." The - uphold the constitutional requirements for the protection of labor and the
latter provision was interpreted by the Constitutional Commissioners to mean promotion of social justice, for these factors, according to Justice Isagani Cruz, tilt
participation in "management"' (Record of the Constitutional Commission, Vol. II). "the scales of justice when there is doubt, in favor of the worker" (Employees
In a sense, participation by the union in the adoption of the code if conduct could Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA
have accelerated and enhanced their feelings of belonging and would have resulted 628 [1991] 635).
in cooperation rather than resistance to the Code. In fact, labor-management - a line must be drawn between management prerogatives regarding business
cooperation is now "the thing." (pp. 3-4, NLRC Decision ff. p. 149, Original Record.) operations  per se and those which affect the rights of the employees. In treating
-PAL appealed NLRC Decision: there is no law which mandated the sharing of the latter, management should see to it that its employees are at least properly
responsibility between EE and ER informed of its decisions or modes action. PAL asserts that all its employees have
been furnished copies of the Code. Public respondents found to the contrary, which
ISSUE: WON management may be compelled to share with the union or its finding, to say the least is entitled to great respect.
employees its prerogatives of formulating a code of disciplne? (note: PAL’s Code PAL posits the view that by signing the 1989-1991 collective bargaining agreement,
was revised 1985) on June 27, 1990, PALEA in effect, recognized PAL's "exclusive right to make and
enforce company rules and regulations to carry out the functions of
HELD: YES management without having to discuss the same with PALEA and much less, obtain
-Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, the latter'sconformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180-
amending Article 211 of the Labor Code, that the law explicitly considered it a State 181, Rollo.) Petitioner's view is based on the following provision of the agreement:
policy "(t)o ensure the participation of workers in decision and policy-making The Association recognizes the right of the Company to determine matters of
processes affecting the rights, duties and welfare." However, even in the absence of management it policy and Company operations and to direct its manpower.
said clear provision of law, the exercise of management prerogatives was never Management of the Company includes the right to organize, plan, direct and
considered boundless. control operations, to hire, assign employees to work, transfer employees from one
 Cruz vs. Medina (177 SCRA 565 [1989]): management's prerogatives must department, to another, to promote, demote, discipline, suspend or discharge
be without abuse of discretion. employees for just cause; to lay-off employees for valid and legal causes, to
 San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 introduce new or improved methods or facilities or to change existing methods or
[1989]): upheld the company's right to implement a new system of
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facilities and the right to make and enforce Company rules and regulations to carry Art. IV, Section 1. Employees within the appropriate bargaining unit
out the functions of management. shall be entitled to a basic monthly compensation plus commission
The exercise by management of its prerogative shall be done in a just reasonable, based on their respective sales. (p. 6, Annex A; p. 113, Rollo.)
humane and/or lawful manner. -Sept 1979, SMC introduced CDS where its beer products were offered for sale
-Such provision in the collective bargaining agreement may not be interpreted as directly to wholesalers through SMC offices. This led PTGWO to file ULP case w/
cession of employees' rights to participate in the deliberation of matters which Ministry of Labor + notice of strike (for union busting and violation of CBA):
may affect their rights and the formulation of policies relative thereto. And one 1. CDS was contrary to the existing marketing scheme: Route salesmen were
such mater is the formulation of a code of discipline. assigned to specific territories w/n which to sell their stocks of beer,
-on point that RA 6715 amending the LC was not yet in force: While such wholesalers had to buy beer products from them
"obligation" was not yet founded in law when the Code was formulated, the 2. CDS violates the CBA: reduces the take-home pay of the salesmen and truck
attainment of a harmonious labor-management relationship and the then already helpers
existing state policy of enlightening workers concerning their rights as employees -MINISTER OF LABOR:
demand no less than the observance of transparency in managerial moves 1. NO VIOLATION ON SMC’S PART
affecting employees' rights. …CDS was only a part of SMC’s overall plan to improve efficiency and economy and
-Petitioner's assertion that it needed the implementation of a new Code of to gain profit to the highest.
Discipline considering the nature of its business cannot be overemphasized. In fact, …change in present marketing scheme too insignificant to interpret that it
its being a local monopoly in the business demands the most stringent of measures interfered w/ worker’s right to self-organization
to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures 2. ON ARGUMENT THAT CDS WOULD SOW DISSATISFACTION FROM THE RANK:
are adopted cannot be properly implemented in the absence of full cooperation already a prejudgment
of the employees. Such cooperation cannot be attained if the employees are …PTGWO failed to consider that corollary to the adoption of CDS is the effort of the
restive on account, of their being left out in the determination of cardinal and company to compensate whatever loss the workers may suffer because of the new
fundamental matters affecting their employment. plan and above than what has been provided in the CBA
DISPOSITION: PETITION DISMISSED
ISSUE: WON SMC’S CDS is a valid exercise of Management prerogative?

SAN MIGUEL BREWERY SALES FORCE UNION V. OPLE, 170 SCRA 25 HELD: YES
(1989) -Except as limited by special laws, an employer is free to regulate, according to his
own discretion and judgment, all aspects of employment, including hiring, work
SUMMARY: PTGWO and SMC entered into a CBA in April 1978 (effective May 1, assignments, working methods, time, place and manner of work, tools to be
1978-January 31, 1981) which provided that employees would receive an additional used, processes to be followed, supervision of workers, working regulations,
commission based on their respective sales. However, in 1979, SMC adopted the transfer of employees, work supervision, lay-off of workers and the discipline,
“Complementary Distribution System” (CDS) wherein beer products were sold dismissal and recall of work. ... (NLU vs. Insular La Yebana Co., 2 SCRA 924; Republic
directly to wholesalers, thereby removing any chance for the employees to gain Savings Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V. Hernandez, Labor Relations
commission. PTGWO filed a case for ULP. Minister of Labor absolved SMC. SC Law, 1985 Ed., p. 44.) (Emphasis ours.)
upheld the CDS, ruling that it was a valid exercise of management prerogative. -Every business enterprise endeavors to increase its profits. In the process, it may
Besides, SMC offered to compensate those who would be affected by paying them adopt or devise means designed towards that goal.
“back adjustment commission”.
 Abbott Laboratories vs. NLRC, 154 SCRA 713: Even as the law is
solicitous of the welfare of the employees, it must also protect the right
FACTS
of an employer to exercise what are clearly management prerogatives.
-PTGWO and SMC entered into a CBA in April 17, 1978 (effective until January 31,
The free will of management to conduct its own business affairs to
1981). One of its provisions is as follows (SEC1 of ART IV):
achieve its purpose cannot be denied.
 LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil. American
Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil.
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Refining Co. vs. Garcia, 18 SCRA 110: So long as a company's (1) to give all salespersons an opportunity to contact advertisers within a
management prerogatives are exercised in good faith for the reasonable period;
advancement of the employer's interest and not for the purpose of (2) to assure GTE that it will get its share of advertising budget from clients as
defeating or circumventing the rights of the employees under special early as possible; and
laws or under valid agreements, this Court will uphold them (3) to ensure an even flow of work throughout the company.
-San Miguel Corporation's offer to compensate the members of its sales force who 3. SALES EVALUATION AND PRODUCTION POLICY: adopted to get what it
will be adversely affected by the implementation of the CDS by paying them a so- considered its rightful share of the advertising budget of its clientele:
called "back adjustment commission" to make up for the commissions they might (1) all its sales representatives were required, as in the past, to achieve
lose as a result of the CDS proves the company's good faith and lack of intention to specified revenue targets (advertisements sold) within pre-determined
bust their union. periods;
DISPOSITION:WHEREFORE, the petition for certiorari is dismissed for lack of merit. (2) in cases of cancelled revenue accounts or advertisements, it required all its
SO ORDERED. salespersons to re-establish contact and renew the same within a fixed period;
(3) if the cancelled revenue accounts were not renewed within the assigned
period, said accounts were declared, for a set period, OPEN TERRITORY to all
GTE DIRECTORIES CORP V. SANCHEZ, 197 SCRA 452 (1991) sales representatives including the one who reported the cancellation;
(4) if not renewed during said open territory period, said cancelled accounts
SUMMARY: GTE through the years adopted several Sales evaluation policies.
were deemed no longer "open territory," and the same could be referred for
Pursuant to the latest sales policy, GTE issued 6 memoranda to its employees which
handling to contractual salespersons and/or outside agencies.
required the Premise Sales Reps (PSRs) to submit individual reports reflecting target
-Through an Oct. 12, 1984 MEMO, GTE informed its sales reps of the new
revenues as of deadlines set. None of these memoranda were followed by the
policy.
employees, arguing that they were not consulted. As a result, 14 employees (some
-Union demanded that it be allowed to raise questions or objections to the new
of them Union officers) were dismissed. Union also filed notice of strike before the
policy, which GTE allowed
4th memo was issued. Court held that GTE’s sales policy was pursuant to the valid
-Union submitted OCT 26, 1984 letter for proposals to the new policy (proposing to
exercise of management prerogatives and that its implementation is not suspended
delete the new policy)
merely because of pending negotiations initiated by the Union.
-GTE formulated new set of "Sales Administrative Practices" (4th!)
-pursuant to the new policy, GTE issued July 9, 1985 MEMO(1st memo): required all
FACTS:
Premise Sales Reps to submit individual reports reflecting target revenues (P30k) as
-GTE Directories Corp. had observed several sales evaluation policies through the
of August 2, 1985
years:
-2nd MEMO (JULY 16) issued based on "the consensus reached after several
1. DRAW METHOD: its sales representatives to be given work assignments
discussions with your DSMs, as well as, most of you":extended the deadline and
within specific territories. These sales territories were so plotted or mapped out
further reduced the target to P20k
as to have "an equal number of advertisers as well as . . . revenue. . ." Within
-3rd MEOMO (AUG 5): sent to all PSR; observed noncompliance of most of them;
these territories, the sales representatives therein assigned were given
gave deadline 2PM; as before, no sales rep submitted their report
quotas; i.e., they had to "achieve a certain amount of revenue or
-GTE Directories Corp. Employees Union (UNION) sent AUG 5, 1985 letter to sales
advertisements sold, decreased, increased or cancelled within a given period of
rep, saying the ff:
time." A territory was not fully released to the salesperson for handling at one
1."only one out of nineteen sales representatives met the P20,000 revenue
time, but assigned in increments or partial releases of account.
handled on our first grid deadline of August 2
2. GRID SYSTEM: each sales rep were given grids (divisions or sections) within
2. “that the schedule was not "drawn (up) as a result of an agreement of all
each territory usually numbering five (i.e., Grids I to V). Each grid was assigned
concerned” since GTE had failed to get "affirmative responses" from "clustered
a fixed closing dated. At such closing date, a salesperson should have achieved
groups of SRs;"
a certain amount of the revenue target designated for his grid; otherwise, he
3. that the union could not "Comprehend how cancelling non-cancelling
loses the forthcoming grid or forfeits the remaining grids not yet received.
accounts help production;" and that
Why GRID SYSTEM INSTALLED:

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4. its members would fail "expectations of cancelling . . . non-cancelling government," and that "major contribution to the national economy . . . (was)
accounts" since it "would result to further reduction of our pay which (they) being threatened because of the strike;" and
believe is the purpose of your discriminate and whimsical memo." 2) "top officers of the union were dismissed during the conciliation process
-AUG 6: UNION filed notice of strike, allegedly based on ULP of GTE thereby compounding the dispute,"
1. Refusal to bargain on unjust sales policies particularly on the failure to meet the -GTE filed MR of Acting Secretary Leogardo’s order on DEC 16, mostly assailing
75% of the average sales production for two consecutive years; SOLE’s jurisdiction, w/o prior consultation w/ the parties.
2. Open territory of accounts; …GTE also expressed position of accepting the other striking workers back to work,
3. Illegal suspension of Brian Pineda, a union officer; and except the 14 sales reps who were dismissed for cause prior to the strike (therefore
4. Non-payment of eight days' suspension pay increase. not included in the return-to-work order)
-BLR undertook conciliation -JAN 20, 1986 RESOLUTION (this time by Labor Minister OPLE): Denied MR:
-4th MEMO (AUG 6): Required 16 sales reps to submit individual reports not later 1) adverted to the "general rule (that) promulgations of company policies and
than 4 PM regulations are basic management prerogatives although the principle of
- still no compliance so GTE suspended its sales reps w/o pay effective AUG 12 for 5 collective bargaining encompasses almost all relations between the employer
working days + warning that failure to submit would merit “more drastic and its employees which are best threshed out through negotiations, . . . (and
disciplinary actions” that) it is recognized that company policies and regulations are, unless shown
-5th MEMO (AUG 19): all sales reps concerned were suspended effective AUG 20 to be grossly oppressive or contrary to law, generally binding and valid on the
until they submitted report. Still no compliance parties until finally revised or amended unilaterally or preferably through
-6th MEMO (AUG 23): individually addressed, required sales reps concerned to negotiations or by competent authorities;"
submit the required reports (LIST OF ACCOUNTS TO BE CANCELLED) w/n 24 hours or 2) affirmed the "recognized principle of law that company policies and regulations
else they would be terminated “for cause”. Still NO COMPLIANCE! are, unless shown to be grossly oppressive or contrary to law, generally binding
-AUG 29: union sent undated letter to GTE acknowledging receipt of notice of (and) valid on the parties and must be complied with until finally revised or
suspension on AUG 19 and professed surprise at being served w/ a contradictory amended unilaterally or preferably through negotiations or by competent
notice (set schedule vs. 24 hours) and asked which of the 2 directives to follow, authorities;" and
reserving right to take action for harassment and intimidation…(alleged ULP) 3) closed by pointing out that "as a basic principle, the matter of the acceptability
-individually, 14 sales reps received letter dated AUG 29 terminating their of company policies and rules is a proper subject of collective negotiations
employment, w/ undertaking to give them separation pay upon proper clearance between the parties or arbitration if necessary."
and submission of company documents in their possession. These included the -JAN 21 CLARIFICATORY ORDER: reiterated management prerogatives must be
union’s president and 3rd VP. complied with until finally revised or amended unilaterally, or preferably, through
-SEPT 2: Union declared strike of 60 employees. negotiations or by competent authorities.
-even before the suspension, BLR was attempting to prevent impositions of GTE on -SANCHEZ ORDER on March 31, 1986 (on the merits of the labor dispute):
its employees of sanctions, and the strike itself. Since it proved futile, Acting Labor 1) pointed out "that the issue central to the labor dispute revolves around
Minister LEOGARDO issued DEC 6 ORDER assuming jurisdiction over the dispute compliance with existing company policies, rules and regulations specifically
pursuant to ART 264(g) of LC, as amended: the sales evaluation and production policy which was amended by the October
* All striking workers dismissed during the conciliation proceedings (14) were 12, 1984 memorandum and the grid schedule;"
directed to return to work 2) declared that because fourteen (14) sales representatives — who after
*Management of GTE ordered to accept returning employees w/o prejudice to reinstatement pursuant to the order of January 20, 1986 had been placed "on
the determination of the obligation and rights of the parties or to the final forced leave with pay —"were actually dismissed for failure to comply with
outcome of the dispute. the reporting requirements under the "Sales Administration Practices" which
* Dispute "adversely affects the national interest," because: was (sic) then the subject of negotiations between the parties at the Bureau
1) GTE, a "100% foreign owned" company, had, as publisher of "PLDT's Metro of Labor Relations," it was only fair that they 'be reinstated . . .with back wages
Manila and provincial directories . . . earned a total of P127,038,463 since they were terminated from employment based on a policy . . . still being
contributing close to P10 million in income tax alone to the Philippine negotiated to avoid precisely a labor-management dispute from arising"
therefrom;"
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3) pronounced the union's action relative to the allegedly illegal dismissal of one that said sales policies are being used to bust the union; thus precipitating a lawful
Brian Pineda to be "barred by extinctive prescription" in accordance with the strike on the part of the latter. A strike is legal if it was provoked by the employer's
CBA then in force; and failure to abide by the terms and conditions of its collective bargaining agreement
4) on the foregoing premises adjudicated the dispute as follows: with the union, by the discrimination employed by it with regard to the hire and
1. The union and management of G.T.E. Directories Corporation are directed tenure of employment, and the dismissal of employees due to union activities as
to negotiate and effect a voluntary settlement on the questioned Grid well as the company's refusal to bargain collectively in good faith (Cromwell
schedule, the Sales Evaluation and Production Policy; Commercial Co., Inc. vs. Cromwell Employees and Laborers Union, 19 SCRA 398).
2. Management is ordered to reinstate the fourteen (14) employees with full The same rule applies if employer was guilty of bad faith delay in reinstating them
back wages from the time they were dismissed up to the time that they were to their position (RCPI vs. Phil. Communications Electronics & Electricity Workers
on forced leave with pay." Federation, 58 SCRA 762).
-Union and GTE moved for reconsideration -While as a rule strikers are not entitled to backpay for the strike period (J.P.
-JUNE 6 decision on MR: Heilbronn Co. vs. NLU, 92 Phil. 575) strikers may be properly awarded backwages
AFFIRMED: where the strike was precipitated by union busting activities of the employer (Davao
 Pineda’s suspension Free Workers, Front, et al. vs, CIR, 60 SCRA 408), as in the case at bar. . . .
 Question on GTE’s sales and administrative policies …basta Minister ruled ifo of Union: "directing Union and Management to negotiate
 Matter of backwages a voluntary settlement on the company sales policies and reinstating the fourteen
MODIFIED: agreed w/ GTE that the other issues raised were not adequately employees with full backwages from the time they were dismissed up to the time
threshed out in earlier proceedings as GTE had not been given opportunity to they were on forced leave with pay" — "but with the modification that
present its own evidence. BLR ordered to hear the other issues raised by the union management . . . (was) directed to give the striking workers strike duration pay for
( i.e., GTE's liability for unfair labor practice, the legality of the strike and the the whole period of the strike less earnings."
strikers' right to be paid their wages while on strike) -Special civil action instituted by GTE
-GTE MR
-OCT 1 DECISION ON MR: Denied MR ISSUES:
1) invoked Section 6, Rule XIII of the Rules and Regulations Implementing the Labor 1. WON GTE had cause to dismiss the 14 GTEs?
Code, pertinently reading as follows: 2. WON the effectivity of ER’s regulations and policies is dependent upon the
During the proceedings, the parties shall not do any act which may disrupt or acceptance and consent of the employees? And their nonapproval would suspend
impede the early settlement of the dispute. They are obliged, as part of their duty to the enforcement thereof and excuse the employee’s refusal to comply with the
bargain collectively in good faith, to participate fully and promptly in the same?
conciliation proceedings called by the Bureau or the Regional Office. Dismissal of 3. WON ER acted evidently in BF in firing the 14 SR for alleged violations of
the 14 employees for noncompliance w/ the policy subjected to the conciliation reportorial requirements subjected to the conciliatory proceedings before BLR?
proceedings is BF on part of GTE 4. WON Minister of Labor had power to assume jurisdiction over the dispute?
2) declared that because he had "ordered the parties to negotiate and effect a
voluntary settlement of the questioned Grid Schedule, the Sales Evaluation and HELD:
Productions Policy, it would be unripe and premature for us to rule on the legality 1. YES, GTE had cause to dismiss the 14 PSRs: GTE addressed 6 written official
or illegality on the company's sales policies at this instance;" communications to the 14 PSRs but the only response it got from the PSRs were the
3) opted, however, to himself resolve "the so-called 'other issues"' which he had ff:
earlier directed the Bureau of Labor Relations to first hear and resolve (in the 1) a letter by their Union to GTE's Sales Manager dated August 5, 1985 in which
Decision of June 6, 1986, supra): the requirement was criticized as not being the "result of an agreement of all
“While the company, in merely implementing its challenged sales policies did concerned," and as incomprehensible, "discriminate and whimsical;"
not ipso facto commit an unfair labor practice, it did so when it in mala 2) a strike notice filed with the Ministry of Labor on August 6, 1985; and
fide  dismissed the fourteen salesmen, all union members, while conciliation 3) an undated letter sent to GTE's Director for Marketing & Sales on August 29,
proceedings were being conducted on disputes on its very same policies, especially 1985, drawing attention to what it deemed contradictory directives, and
at that time when a strike notice was filed on the complaint of the union alleging reserving the right to take action against the manager for "acts of harassment
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and intimidation . . . clearly designed to discourage our legitimate union thereon, bring proceedings for redress against the employer before the Ministry of
activities in protesting management's continuous unfair labor practices." Labor. But until and Unless the rules or orders are declared to be illegal or improper
by competent authority, the employees ignore or disobey them at their peril. It is
2. NO. impermissible to reverse the process: suspend enforcement of the orders or rules
-cited SMBrewery vs. Ople (just refer above) until their legality or propriety shall have been subject of negotiation, conciliation,
-GTE’s adoption of a new "Sales Evaluation and Production Policy" was within its or arbitration.
management prerogative to regulate, according to its own discretion and
judgment, all aspects of employment, including the manner, procedure and 3. NO.
processes by which particular work activities should be done. -No other facts appear on record relevant to the issue of GTE's dismissal of the 14
-On objections to the new policy: sales representatives. There is no proof on record to demonstrate any
 the schedule had not been "drawn (up) as a result of an agreement of all underhanded motive on the part of GTE in formulating and imposing the sales
concerned policies in question, or requiring the submission of reports in line therewith.
 " that the new policy was incomprehensible, discriminatory and whimsical, What, in fine, appears to be the Minister's thesis is that an employer has the
and "would result to further reduction" of the sales representatives' prerogative to lay down basic policies and rules applicable to its employees, but
compensation. *ULP: may not exact compliance therewith, much less impose sanctions on employees
o Refusal to bargain on unjust sales policies particularly on the shown to have violated them, the moment the propriety or feasibility of those
failure to meet the 75% of the average sales production for two policies and rules, or their motivation, is challenged by the employees and the
consecutive years; latter file a strike notice with the Labor Department — which is the situation in
o Open territory of accounts; the case at bar.
o Illegal suspension of Brian Pineda, a union officer; and -When the strike notice was filed by the union, the chain of events which
o Non-payment of eight days' suspension pay increase. culminated in the termination of the 14 sales persons' employment was already
-but objections and accusations WOULD NOT justify the deliberate and obdurate taking place, the series of defiant refusals by said sales representatives to comply
refusal of the sales representatives to obey the management's simple requirement with GTE's requirement to submit individual reports was already in progress. At that
for submission by all Premise Sales Representatives (PSRs) of individual reports or time, no less than three (3) of the ultimate six (6) direct orders of the employer for
memoranda requiring reflecting target revenues—which is all that GTE basically the submission of the reports had already been disobeyed. The filing of the strike
required — and which it addressed to the employees concerned no less than six (6) notice, and the commencement of conciliation activities by the Bureau of Labor
times. The Court fails to see how the existence of objections made by the union Relations did not operate to make GTE's orders illegal or unenforceable so as to
justify the studied disregard, or wilful disobedience by the sales representatives of excuse continued non-compliance therewith. It does not follow that just because
direct orders of their superior officers to submit reports. Surely, compliance with the employees or their union are unable to realize or appreciate the desirability of
their superiors' directives could not have foreclosed their demands for the their employers' policies or rules, the latter were laid down to oppress the former
revocation or revision of the new sales policies or rules; there was nothing to and subvert legitimate union activities. Indeed, the overt, direct, deliberate and
prevent them from submitting the requisite reports with the reservation to seek continued defiance and disregard by the employees of the authority of their
such revocation or revision. employer left the latter with no alternative except to impose sanctions. The
-To sanction disregard or disobedience by employees of a rule or order laid down sanction of suspension having proved futile, termination of employment was the
by management, on the pleaded theory that the rule or order is unreasonable, only option left to the employer.
illegal, or otherwise irregular for one reason or another, would be disastrous to -To repeat, it would be dangerous doctrine indeed to allow employees to refuse to
the discipline and order that it is in the interest of both the employer and his comply with rules and regulations, policies and procedures laid down by their
employees to preserve and maintain in the working establishment and without employer by the simple expedient of formally challenging their reasonableness or
which no meaningful operation and progress is possible. Deliberate disregard or the motives which inspired them, or filing a strike notice with the Department of
disobedience of rules, defiance of management authority cannot be Labor and Employment, or, what amounts to the same thing, to give the employees
countenanced. This is not to say that the employees have no remedy against rules the power to suspend compliance with company rules or policies by requesting that
or orders they regard as unjust or illegal. They may object thereto, ask to negotiate they be first subject of collective bargaining, It would be well nigh impossible under

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these circumstances for any employer to maintain discipline in its establishment. proposals of the Union and MERALCO. Decision more or less merely discusses the
This is, of course, intolerable. decision on the terms of the CBA contested.
-Justice Gregorio Perfecto: Success of industries and public services is the (at tinamad magdigest – haba eh! Di ko alam which one would be relevant)
foundation upon which just wages may be paid. There cannot be success without *since ang topic eh LMCs, eto feeling ko relevant (ON PARTICIPATION OF UNION
efficiency. There cannot be efficiency without discipline. Consequently, when MEMBERS IN THE COMMITTEES):
employees and laborers violate the rules of discipline they jeopardize not only the "To ensure the participation of workers in decision and policy-making processes
interest of the employer but also their own. In violating the rules of discipline they affecting their rights, duties and welfare. Denying this opportunity to the Union is
aim at killing the hen that lays the golden eggs. Laborers who trample down the to lay the claim that only management has the monopoly of ideas that may
rules set for an efficient service are, in effect, parties to a conspiracy, not only improve management strategies in enhancing the Company's growth. What every
against capital but also against labor. The high interest of society and of the company should remember is that there might be one among the Union members
individuals demand that we should require everybody to do his duty. That demand who may offer productive and viable ideas on expanding the Company's business
is addressed not only to employer but also to employees. horizons. The Union's participation in such committees might just be the
opportune time for dormant ideas to come forward. So, the Company must
4. NO welcome this development (see also PAL v. NLRC,  et. al., G.R. 85985, August 13,
-“AANI”: such as may occur in but not limited to public utilities, companies engaged 1995). It must be understood, however, that the committees referred to here are
in the generation or distribution of energy, banks, hospitals, and export-oriented the Safety Committee, the Uniform Committee and other committees of a similar
industries, including those within export processing zones nature and purpose involving personnel welfare, rights and benefits as well as
-The production and publication of telephone directories, which is the principal duties."
activity of GTE, can scarcely be described as an industry affecting the national We do not find merit in MERALCO's contention that the above-quoted ruling of the
interest. GTE is a publishing firm chiefly dependent on the marketing and sale of Secretary is an intrusion into the management prerogatives of MERALCO. It is
advertising space for its not inconsiderable revenues. Its services, while of value, worthwhile to note that all the Union demands and what the Secretary's order
cannot be deemed to be in the same category of such essential activities as "the granted is that the Union be allowed to participate in policy formulation and
generation or distribution of energy" or those undertaken by "banks, hospitals, and decision-making process on matters affecting the Union members' rights, duties and
export-oriented industries." welfare as required in Article 211 (A) (g) of the Labor Code. And this can only be
-It cannot be regarded as playing as vital a role in communication as other mass done when the Union is allowed to have representatives in the Safety Committee,
media. The small number of employees involved in the dispute, the employer's Uniform Committee and other committees of a similar nature. Certainly, such
payment of "P10 million in income tax alone to the Philippine government," and the participation by the Union in the said committees is not in the nature of a co-
fact that the "top officers of the union were dismissed during the conciliation management control of the business of MERALCO. What is granted by the
process," obviously do not suffice to make the dispute in the case at bar one Secretary is participation and representation. Thus, there is no impairment of
"adversely affecting the national interest." management prerogatives.
DISPOSITION: WHEREFORE, the petition is GRANTED, and as prayed for, the Order ***
dated October 1, 1986 of the public respondent is NULLIFIED and SET ASIDE. MARTINEZ, J.:
SO ORDERED. In this petition for certiorari, the Manila Electric Company (MERALCO) seeks to
annul the orders of the Secretary of Labor dated August 19, 1996 and December 28,
MERALCO V. QUISUMBING, 302 SCRA 173 (1999) 1996, wherein the Secretary required MERALCO and its rank and file union — the
Meralco Workers Association (MEWA) — to execute a collective bargaining
SUMMARY: MERALCO and MEWA executed in a CBA. When it was about to expire,
agreement (CBA) for the remainder of the parties' 1992-1997 CBA cycle, and to
they entered into negotiations but were not able to reach an amicable
incorporate in this new CBA the Secretary's dispositions on the disputed economic
arrangement. MEWA filed notice to strike, several conciliation proceedings were
and non-economic issues.
undertaken but the parties still were unable to agree. MERALCO petitioned SOLE to
MEWA is the duly recognized labor organization of the rank-and-file employees of
assume jurisdiction, which it did. Both parties were requested to submit their
MERALCO.
respective memoranda and the SOLE issued an order awarding some of the
On September 7, 1995, MEWA informed MERALCO of its intention to re-negotiate
the terms and conditions of their existing 1992-1997 Collective Bargaining
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Agreement (CBA) covering the remaining period of two years starting from Red Circle Rate (RCR) Allowance — all RCR allowances (promotional increases that
December 1, 1995 to November 30, 1997. 1 MERALCO signified its willingness to re- go beyond the maximum range of a job classification salary) shall be integrated into
negotiate through its letter dated October 17, 1995 2 and formed a CBA negotiating the basic salary of employees effective December 1, 1995.
panel for the purpose. On November 10, 1995, MEWA submitted its proposal 3 to Longevity Allowance — the integration of the longevity allowance into the basic
MERALCO, which, in turn, presented a counter-proposal. Thereafter, collective wage is denied; the present policy is maintained.
bargaining negotiations proceeded. However, despite the series of meetings Longevity Increase — the present longevity bonus is maintained but the bonus shall
between the negotiating panels of MERALCO and MEWA, the parties failed to arrive be incorporated into the new CBA.
at "terms and conditions acceptable to both of them." Sick Leave — MEWA's demand for upgrading is denied; the company's present
policy is maintained. However, those who have not used the sick leave benefit
On April 23, 1996, MEWA filed a Notice of Strike with the National Capital Region during a particular year shall be entitled to a one-day sick leave incentive.
Branch of the National Conciliation and Mediation Board (NCMB) of the Sick leave reserve — the present reserve of 25 days shall be reduced to 15 days; the
Department of Labor and Employment (DOLE) which was docketed as NCMB-NCR- employee has the option either to convert the excess of 10 days to cash or let it
NS-04-152-96, on the grounds of bargaining deadlock and unfair labor practices. remain as long as he wants. In case he opts to let it remain, he may later on convert
The NCMB then conducted a series of conciliation meetings but the parties failed to it into cash at his retirement or separation.
reach an amicable settlement. Faced with the imminence of a strike, MERALCO on Vacation Leave — MEWA's demand for upgrading denied & the company's present
May 2, 1996, filed an Urgent Petition 4 with the Department of Labor and policy is maintained which must be incorporated into the new CBA but scheduled
Employment which was docketed as OS-AJ No. 0503[1]96 praying that the Secretary vacation leave may be rounded off to one full day at a time in case of a benefit
assume jurisdiction over the labor dispute and to enjoin the striking employees to involving a fraction of a day;
go back to work. Union Leave — of MEWA's officers, directors or stewards assigned to perform union
duties or legitimate union activity is increased from 30 to 40 Mondays per month.
The Labor Secretary granted the petition through its Order 5 of May 8, 1996, the Maternity, Paternity and Funeral leaves — the existing policy is to be maintained
dispositive portion of which reads: and must be incorporated in the new CBA unless a new law granting paternity leave
WHEREFORE, premises considered, this Office now assumes jurisdiction over the benefit is enacted which is superior to what the company has already granted.
labor dispute obtaining between the parties pursuant to Article 263(g) of the Labor Birthday Leave — union's demand is granted. If birthday falls on the employee's
Code. Accordingly, the parties are here enjoined from committing any act that may rest day or on a non-working holiday, the worker shall be entitled to go on leave
exacerbate the situation. To speed up the resolution of the dispute, the parties are with pay on the next working day.
also directed to submit their respective Position Papers within ten (10) days from Group Hospitalization & Surgical Insurance Plan (GHSIP) and Health Maintenance
receipt. Plan (HMP) — present policy is maintained insofar as the cost sharing is concerned
Undersecretary Jose M. Espanol, Jr. is deputized to conduct conciliation conferences — 70% for the Company and 30% for MEWA.
between the parties to bridge their differences and eventually hammer out a Health Maintenance Plan (HMP) for dependents — subsidized dependents
solution that is mutually acceptable. He shall be assisted by the Legal Service. increased from three to five dependents.
SO ORDERED. Longevity Bonus — is increased from P140.00 to P200.00 for even year of service to
be received by the employee after serving the Company for 5 years.
Thereafter, the parties submitted their respective memoranda and on August 19, Christmas Bonus and Special Christmas Grant — MEWA's demand of one month
1996, the Secretary resolved the labor dispute through an Order, 6 containing the salary as Christmas Bonus two month's salary as Special Christmas Grant is granted
following awards: and to be incorporated in the new CBA.
ECONOMIC DEMANDS Midyear Bonus — one month's pay to be included in the CBA.
Wage increase — P2,300.00 for the first year covering the period from December 1, Anniversary Bonus — union's demand is denied.
1995 to November 30, 1996 Christmas Gift Certificate — company has the discretion as to whether it will give it
— P2,200.00 for the second year covering the period December 1, 1996 to to its employees.
November 30, 1997. Retirement Benefits:
a. Full retirement-present policy is maintained;
b. one cavan of rice per month is granted to retirees;
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c. special retirement leave and allowance-present policy is maintained; Payroll Treatment for Accident while on Duty — an employee shall be paid his
d. HMP coverage for retirees — HMP coverage is granted to retirees who have not salary and allowance if any is due plus average excess time for the past 12 months
reached the age of 70, with MERALCO subsidizing 100% of the monthly premium; from the time of the accident up to the time of full recovery and placing of the
those over 70 are entitled to not more than 30 days of hospitalization at the J.F. employee back to normal duty or an allowance of P2,000.00, whichever is higher.
Cotton Hospital with the company shouldering the entire cost. Housing and Equity Assistance Loan — is increased to P60,000.00; those who have
e. HMP coverage for retiree's dependents is denied. already availed of the privilege shall be allowed to get the difference.
f. Monthly pension of P3,000.00 for each retiree is denied. Benefits for Collectors:
g. Death benefit for retiree's beneficiaries is denied. a. Company shall reduce proportionately the quota and monthly average product
Optional retirement — union's demand is denied; present policy is maintained; level (MAPL) in terms of equivalent bill assignment when an employee is on sick
employee is eligible for optional retirement if he has rendered at least 18 years of leave and paid vacation leave.
service. b. When required to work on Saturdays, Sundays and holidays, an employee shall
Dental, Medical and Hospitalization Benefits — grant of all the allowable medical, receive P60.00 lunch allowance and applicable transportation allowance as
surgical, dental and annual physical examination benefits, including free medicine determined by the Company and shall also receive an additional compensation to
whenever the same is not available at the JFCH. one day fixed portion in addition to lunch and transportation allowance.
Resignation benefits — union's demand is denied. c. The collector shall be entitled to an incentive pay of P25.00 for every delinquent
Night work — union demand is denied but present policy must be incorporated in account disconnected.
CBA. d. When a collector voluntarily performs other work on regular shift or overtime, he
Shortswing — work in another shift within the same day shall be considered as the shall be entitled to remuneration based on his computed hourly compensation and
employee's work for the following day and the employee shall be given additional the reimbursement of actually incurred transportation expenses.
four (4) hours straight time and the applicable excess time premium if he works e. Collectors shall be provided with bobcat belt bags every year.
beyond 8 hours in the other shift. f. Collector's cash bond shall be deposited under his capital contribution to MESALA.
High Voltage allowance — is increased from P45.00 to P55.00 to be given to any g. Collectors quota and MAPL shall be proportionately reduced during typhoons,
employee authorized by the Safety Division to perform work on or near energized floods, earthquakes and other similar force majeure events when it is impossible for
bare lines & bus including stockman drivers & crane operators and other crew a collector to perform collection work.
members on ground. Political Demands:
High Pole Allowance — is increased from P30.00 to P40.00 to be given to those a. Scope of the collective bargaining unit — the collective bargaining unit shall be
authorized to climb poles up to at least 60 ft. from the ground. Members of the composed of all regular rank-and-file employees hired by the company in all its
team including stockman drivers, crane operators and other crew members on the offices and operative centers throughout its franchise area and those it may employ
ground, are entitled to this benefit. by reason of expansion, reorganization or as a result of operational exigencies.
Towing Allowance — where stockmen drive tow trailers with long poles and b. Union recognition and security —
equipment on board, they shall be entitled to a towing allowance of P20.00 i. The union shall be recognized by the Company as sole and exclusive bargaining
whether they perform the job on regular shift or on overtime. representative of the rank-and-file employees included in the bargaining unit. The
Employee's Cooperative — a loan of P3 M seed money is granted to the proposed Company shall agree to meet only with Union officers and its authorized
establishment of a cooperative, payable in twenty (20) years starting one year from representatives on all matters involving the Union and all issues arising from the
the start of operations. implementation and interpretation of the new CBA.
Holdup Allowance — the union demand is denied; the present policy shall be ii. The union shall meet with the newly regularized employees for a period not to
maintained. exceed four (4) hours, on company time, to acquaint the new regular employees of
Meal and Lodging Allowance — shall be increased effective December 1, 1995 as the rights, duties and benefits of Union membership.
follows: iii. The right of all rank-and-file employees to join the union shall be recognized in
Breakfast — from P25.00 to P35.00 accordance with the maintenance of membership principle as a form of union
Lunch — from P35.00 to P45.00 security.
Dinner — from P35.00 to P45.00 c. Transfer of assignment and job security —
Lodging — from P135.00 to P180.00 a night in all MERALCO franchise areas.
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i. No transfer of an employee from one position to another shall be made if 5. in ordering the CBA to be "effective December 1995" instead of August 19, 1996
motivated by considerations of sex, race, creed, political and religious belief, when he resolved the dispute.
seniority or union activity.
ii. If the transfer is due to the reorganization or decentralization, the distance from MERALCO filed a supplement to the motion for reconsideration on September 18,
the employee's residence shall be considered unless the transfer is accepted by the 1995, alleging that the Secretary of Labor did not properly appreciate the effect of
employee. If the transfer is extremely necessary, the transfer shall be made within the awarded wages and benefits on MERALCO's financial viability.
the offices in the same district.
iii. Personnel hired through agencies or contractors to perform the work done by MEWA likewise filed a motion asking the Secretary of Labor to reconsider its Order
covered employees shall not exceed one month. If extension is necessary the union on the wage increase, leaves, decentralized filing of paternity and maternity leaves,
shall be informed. But the Company shall not permanently contract out regular or bonuses, retirement benefits, optional retirement, medical, dental and
permanent positions that are necessary in the normal operation of the Company. hospitalization benefits, short swing and payroll treatment. On its political
d. Check off Union Dues — where the union increases its dues as approved by the demands, MEWA asked the Secretary to rule on its proposal to institute a Code of
Board of Directors, the Company shall check off such increase from the salaries of Discipline for its members and the union's representation in the administration of
union members after the union submits check off authorizations signed by the the Pension Fund.
majority of the members. The Company shall honor only those individual
authorizations signed by the majority of the union members and collectively On December 28, 1996, the Secretary issued an Order 8 resolving the parties'
submitted by the union to the Company's Salary Administration. separate motions, the modifications of the August 19, 1996 Order being highlighted
e. Payroll Reinstatement — shall be in accordance with Article 223, p. 3 of the Labor hereunder:
Code. 1) Effectivity of Agreement — December 1, 1995 to November 30, 1997.
f. Union Representation in Committees — the union is allowed to participate in Economic Demands
policy formulation and in the decision-making process on matters affecting their 2) Wage Increase:
rights and welfare, particularly in the Uniform Committee, the Safety Committee First year — P2,200.00 per month;
and other committees that may be formed in the future. Second year — P2,200.00 per month.
Signing Bonus — P4,000.00 per member of the bargaining unit for the conclusion of 3) Integration of Red Circle Rate (RCR) and Longevity Allowance into Basic Salary —
the CBA. the RCR allowance shall be integrated into the basic salary of employees as of
Existing benefits already granted by the Company but which are not expressly or August 19, 1996 (the date of the disputed Order).
impliedly repealed in the new agreement shall remain subsisting and shall be 4) Longevity Bonus — P170 per year of service starting from 10 years of continuous
included in the new agreement to be signed by the parties effective December 1, service.
1995. 5) Vacation Leave — The status quo shall be maintained as to the number of
vacation leave but employees' scheduled vacation may be taken one day at a time
On August 30, 1996, MERALCO filed a motion for reconsideration 7 alleging that the in the manner that this has been provided in the supervisory CBA.
Secretary of Labor committed grave abuse of discretion amounting to lack or excess 6) Sick Leave Reserve — is reduced to 15 days, with any excess payable at the end
of jurisdiction: of the year. The employee has the option to avail of this cash conversion or to
1. in awarding to MEWA a package that would cost at least P1.142 billion, a package accumulate his sick leave credits up to 25 days for conversion to cash at retirement
that is grossly excessive and exorbitant, would not be affordable to MERALCO and or separation from the service.
would imperil its viability as a public utility affected with national interest. 7) Birthday Leave — the grant of a day off when an employee's birthday falls on a
2. in ordering the grant of a P4,500.00 wage increase, as well as a new and non-working day is deleted.
improved fringe benefits, under the remaining two (2) years of the CBA for the- 8) Retirement Benefits for Retirees — The benefits granted shall be effective on
rank-and-file employees. August 19, 1996, the date of the disputed order up to November 30, 1997, which is
3. in ordering the "incorporation into the CBA of all existing employee benefits, on the date the CBA expires and shall apply to those who are members of the
the one hand, and those that MERALCO has unilaterally granted to its employees by bargaining unit at the time the award is made.
virtue of voluntary company policy or practice, on the other hand." One sack of rice per quarter of the year shall be given to those retiring between
4. in granting certain "political demands" presented by the union. August 19, 1996 and November 30, 1997.
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On HMP Coverage for Retirees — The parties "maintain the status quo, that is, with individual written authorizations. Only those check-off authorization submitted by
the Company complying with the present arrangement and the obligations to the union shall be honored by the Company.
retirees as is." With respect to special assessments, attorney's fees, negotiation fees or any other
9) Medical, Dental and Hospitalization Benefits — The cost of medicine unavailable extraordinary fees individual authorization shall be necessary before the company
at the J.F. Cotton Hospital shall be in accordance with MERALCO's Memorandum may so deduct the same.
dated September 14, 1976. 19) Union Representation in Committees — The union is granted representation in
10) GHSIP and HMP for Dependents — The number of dependents to be subsidized the Safety Committee, the Uniform Committee and other committees of a similar
shall be reduced from 5 to 4 provided that their premiums are proportionately nature and purpose involving personnel welfare, rights and benefits as well as
increased. duties.
11) Employees' Cooperative — The original award of P3 million pesos as seed
money for the proposed Cooperative is reduced to P1.5 million pesos. Dissatisfied, petitioner filed this petition contending that the Secretary of Labor
12) Shortswing — the original award is deleted. gravely abused his discretion:
13) Payroll Treatment for Accident on Duty — Company ordered to continue its 1) . . . in awarding wage increases of P2,200.00 for 1996 and P2,200 for 1997.
present practice on payroll treatment for accident on duty without need to pay the 2) . . . in awarding the following economic benefits:
excess time the Union demanded. a. Two months Christmas bonus;
Political Demands: b. Rice Subsidy and retirement benefits for retirees;
14) Scope of the collective bargaining unit — The bargaining unit shall be composed c. Loan for the employees' cooperative;
of all rank and file employees hired by the Company in accordance with the original d. Social benefits such as GHSIP and HMP for dependents, employees' cooperative
Order. and housing equity assistance loan;
15) Union recognition and security — The incorporation of a closed shop form of e. Signing bonus;
union security in the CBA; the Company is prohibited from entertaining individuals f. Integration of the Red Circle Rate Allowance.
or groups of individuals only on matters that are exclusively within the domain of g. Sick leave reserve of 15 days
the union; the Company shall furnish the Union with a complete list of newly h. The 40-day union leave;
regularized employees within a week from regularization so that the Union can i. High pole/high voltage and towing allowance; and
meet these employees on the Union's and the employee's own time. j. Benefits for collectors
16) Transfer of assignment and job security — Transfer is a prerogative of the 3) . . . in expanding the scope of the bargaining unit to all regular rank and file
Company but the transfer must be for a valid business reason, made in good faith employees hired by the company in all its offices and operating centers and those it
and must be reasonably exercised. The CBA shall provide that "No transfer of an may employ by reason of expansion, reorganization or as a result of operational
employee from one position to another, without the employee's written consent, exigencies;
shall be made if motivated by considerations of sea, race, creed, political and 4) . . . in ordering for a closed shop when his original order for a maintenance of
religious belief, age or union activity. membership arrangement was not questioned by the parties;
17) Contracting Out — The Company has the prerogative to contract out services 5) . . . in ordering that Meralco should consult the union before any contracting out
provided that this move is based on valid business reasons in accordance with law, for more than six months;
is made in good faith, is reasonably exercised and,  provided further that if the 6) . . . in decreeing that the union be allowed to have representation in policy and
contracting out involves more than six months, the Union must be consulted before decision making into matters affecting "personnel welfare, rights and benefits as
its implementation. well as duties;"
18) Check off of union dues 7) . . . in ruling for the inclusion of all terms and conditions of employment in the
In any increase of union dues or contributions for mandatory activities, the union collective bargaining agreement;
must submit to the Company a copy of its board resolution increasing the union 8) . . . in exercising discretion in determining the retroactivity of the CBA;
dues or authorizing such contributions;
If a board resolution is submitted, the Company shall deduct union dues from all Both MEWA and the Solicitor General, on behalf of the Secretary of Labor, filed
union members after a majority of the union members have submitted their their comments to the petition. While the case was also set for oral argument on
Feb. 10, 1997, this hearing was cancelled due to MERALCO not having received the
12 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
comment of the opposing parties. The parties were instead required to submit Under this constitutional mandate, every legal power of the Secretary of Labor
written memoranda, which they did. Subsequently, both petitioner and private under the Labor Code, or, for that matter, any act of the Executive, that is attended
respondent MEWA also filed replies to the opposing parties' Memoranda, all of by grave abuse of discretion is subject to review by this Court in an appropriate
which We took into account in the resolution of this case. proceeding. To be sure, the existence of an executive power alone — whether
granted by statute or by the Constitution — cannot exempt the executive action
The union disputes the allegation of MERALCO that the Secretary abused his from judicial oversight, interference or reversal when grave abuse of discretion is,
discretion in issuing the assailed orders arguing that he acted within the scope of or is alleged to be, present. This is particularly true when constitutional norms are
the powers granted him by law and by the Constitution. The union contends that cited as the applicable yardsticks since this Court is the final interpreter of the
any judicial review is limited to an examination of the Secretary's decision- meaning and intent of the Constitution. 13
making/discretion — exercising process to determine if this process was attended
by some capricious or whimsical act that constitutes "grave abuse"; in the absence The extent of judicial review over the Secretary of Labor's arbitral award is not
of such abuse, his findings — considering that he has both jurisdiction and expertise limited to a determination of grave abuse in the manner of the secretary's exercise
to make them — are valid. of his statutory powers. This Court is entitled to, and must — in the exercise of its
judicial power — review the substance of the Secretary's award when grave abuse
The union's position is anchored on two premises: of discretion is alleged to exist in the award, i.e., in the appreciation of and the
First, no reviewable abuse of discretion could have attended the Secretary's arbitral conclusions the Secretary drew from the evidence presented.
award because the Secretary complied with constitutional norms in rendering the
disputed award. The union posits that the yardstick for comparison and for the The natural and ever present limitation on the Secretary's acts is, of course, the
determination of the validity of the Secretary's actions should be the specific Constitution. And we recognize that indeed the constitutional provisions the union
standards laid down by the Constitution itself. To the union, these standards include cited are State policies on labor and social justice that can serve as standards in
the State policy on the promotion of workers' welfare, 9 the principle of distributive assessing the validity of a Secretary of Labor's actions. However, we note that these
justice, 10 the right of the State to regulate the use of property, 11the obligation of provisions do not provide clear, precise and objective standards of conduct that
the State to protect workers, both organized and unorganized, and insure their lend themselves to easy application. We likewise recognize that the Constitution
enjoyment of "humane conditions of work" and a "living wage," and the right of is not a lopsided document that only recognizes the interests of the working man;
labor to a just share in the fruits of production. 12 it too protects the interests of the property owner and employer as well. 14
Second, no reversible abuse of discretion attended the Secretary's decision because
the Secretary took all the relevant evidence into account, judiciously weighed them, For these reasons — and more importantly because a ruling on the breadth and
and rendered a decision based on the facts and law. Also, the arbitral award should scope of the suggested constitutional yardsticks is not absolutely necessary in the
not be reversed given the Secretary's expertise in his field and the general rule that disposition of this case — we shall not use these yardsticks in accordance with the
findings of fact based on such expertise is generally binding on this Court. time-honored practice of avoiding constitutional interpretations when a decision
can be reached using non-constitutional standards. We have repeatedly held that
To put matters in proper perspective, we go back to basic principles. The Secretary one of the essential requisites for a successful judicial inquiry into constitutional
of Labor's statutory power under Art. 263 (g) of the Labor Code to assume questions is that the resolution of the constitutional question must be necessary in
jurisdiction over a labor dispute in an industry indispensable to the national deciding the case. 15
interest, and, to render an award on compulsory arbitration, does not exempt the
exercise of this power from the judicial review that Sec. 1, Art. 8 of the In this case we believe that the more appropriate and available standard — and one
Constitution mandates. This constitutional provision states: does not require a constitutional interpretation — is simply the standard of
Judicial power includes the duty of the courts of justice to settle actual reasonableness. In layman's terms, reasonableness implies the absence of
controversies involving rights which are legally demandable and enforceable, and arbitrariness; 16 in legal parlance, this translates into the exercise of proper
to determine whether or not there has been a grave abuse of discretion amounting discretion and to the observance of due process. Thus, the question we have to
to lack or excess of jurisdiction on the part of any branch or instrumentality of the answer in deciding this case is whether the Secretary's actions have been
government. reasonable in light of the parties positions and the evidence they presented.

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MEWA's second premise —  i.e., that the Secretary duly considered the evidence MERALCO based its projection on the increase of the income for the first 6 months
presented — is the main issue that we shall discuss at length below. Additionally, of 1996 over the same period in 1995. The union, on the other hand, projected that
MEWA implied that we should take great care before reading an abuse of discretion the 1996 income would increase by 29% to 35% because the "consumption of
on the part of the Secretary because of his expertise on labor issues and because his electric power is at its highest during the last two quarters with the advent of the
findings of fact deserve the highest respect from this Court. Yuletide season." The union likewise relied heavily on a newspaper report citing an
estimate by an all Asia capital financial analyst that the net operating income would
This Court has recognized the Secretary of Labor's distinct expertise in the study amount to 5.795 Billion. 21
and settlement of labor disputes falling under his power of compulsory
arbitration. 17 It is also well-settled that factual findings of labor administrative Based essentially on these considerations, the Secretary made the following
officials, if supported by substantial evidence, are entitled not only to great respect computations and ordered his disputed wage award:
but even to finality. 18 We, therefore, have no difficulty in accepting the Projected net operating  
union's caveat on how to handle a Secretary of Labor's arbitral award.
income for 1996 5,795,000,000
But at the same time, we also recognize the possibility that abuse of discretion may
attend the exercise of the Secretary's arbitral functions; his findings in an arbitration Principals and interests 1,426,571,703
case are usually based on position papers and their supporting documents (as they Dividends at 1995 rate 1,636,949,000
are in the present case), and not on the thorough examination of the parties'
contending claims that may be present in a court trial and in the face-to-face Net Amount left with the Company 2,729,479,297
adversarial process that better insures the proper presentation and appreciation of
evidence. 19 There may also be grave abuse of discretion where the board, tribunal Add: Tax credit equivalent to 35% of labor cost 231,804,940
or officer exercising judicial function fails to consider evidence adduced by the Company's net operating income 2,961,284,237
present.20 Given the parties' positions on the justiciability of the issues before us,
For 1997, the projected income is P7,613,612 which can easily absorb the
the question we have to answer is one that goes into the substance of the
incremental increase of P2,200 per month or a total of P4,500 during the last year
Secretary's disputed orders: Did the Secretary properly consider and appreciate
of the CBA period.
the evidence presented before him?
xxx xxx xxx
An overriding aim is to estimate the amount that is left with the Company after the
We find, based on our consideration of the parties' positions and the evidence on
awarded wages and benefits and the company's customary obligations are paid.
record, that the Secretary of Labor disregarded and misappreciated evidence,
This amount can be the source of an item not found in the above computations but
particularly with respect to the wage award. The Secretary of Labor apparently
which the Company must provide for, that is — the amount the company can use
also acted arbitrarily and even whimsically in considering a number of legal points;
for expansion.
even the Solicitor General himself considered that the Secretary gravely abused his
discretion on at least three major points: (a) on the signing bonus issue; (b) on the
Considering the expansion plans stated in the Company's Supplement that calls for
inclusion of confidential employees in the rank and file bargaining unit, and (c) in
capital expenditures of 6 billion, 6.263 billion and 5.802 billion for 1996, 1997 and
mandating a union security "closed-shop" regime in the bargaining unit.
1998 respectively, We conclude that our original award of P2,300 per month for the
first year and P2,200 for the second year will still leave much by way of retained
We begin with a discussion on the wages issue. The focal point in the consideration
income that can be used for expansion." 22 (Emphasis ours.)
of the wage award is the projected net income for 1996 which became the basis for
the 1996 wage award, which in turn — by extrapolation — became the basis for the
We find after considering the records that the Secretary gravely abused his
(2nd Year) 1997 award. MERALCO projected that the net operating income for 1996
discretion in making this wage award because he disregarded evidence on record.
was 14.7% above the 1999 level or a total net operating income of 4.171 Billion,
Where he considered MERALCO's evidence at all, he apparently misappreciated
while the union placed the 1996 net operating income at 5.795 Billion.
this evidence in favor of claims that do not have evidentiary support. To our mind,
the MERALCO projection had every reason to be reliable because it mas based on

14 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
actual and undisputed figures for the first six months of 1996. 23 On the other afford. It may lead to the danger too that neither of the parties will engage in
hand, the union projection was based on a speculation of Yuletide consumption principled bargaining; the company may keep its position artificially low while the
that the union failed to substantiate. In fact, as against the union's unsubstantiated union presents an artificially high position, on the fear that a "Solomonic" solution
Yuletide consumption claim, MERALCO adduced evidence in the form of historical cannot be avoided. Thus, rather than encourage agreement, a "middle ground
consumption data showing that a lengthy consumption does not tend to rise during approach" instead promotes a "play safe" attitude that leads to more deadlocks
the Christmas period. 24 Additionally, the All-Asia Capital Report was nothing more than to successfully negotiated CBAs.
than a newspaper report that did not show any specific breakdown or
computations. While the union claimed that its cited figure is based on MERALCO's After considering the various factors the parties cited, we believe that the interests
10-year income stream, 25 no data or computation of this 10-year stream appear in of both labor and management are best served by a wage increase of P1,900.00 per
the record. month for the first year and another P1,900.00 per month for the second year of
the two-year CBA term. Our reason for this is that these increases sufficiently
While the Secretary is not expected to accept the company-offered figures protects the interest of the worker as they are roughly 15% of the monthly
wholesale in determining a wage award, we find it a grave abuse of discretion to average salary of P11,600.00. 26 They likewise sufficiently consider the employer's
completely disregard data that is based on actual and undisputed record of costs and its overall wage structure, while at the same time, being within the range
financial performance in favor of the third-hand and unfounded claims the that will not disrupt the wage trends in Philippine industries.
Secretary eventually relied upon. At the very least, the Secretary should have
properly justified his disregard of the company figures. The Secretary should have The record shows that MERALCO, throughout its long years of existence, was never
also reasonably insured that the figure that served as the starting point for his remiss in its obligation towards its employees. In fact, as a manifestation of its
computation had some substantial basis. strong commitment to the promotion of the welfare and well-being of its
employees, it has consistently improved their compensation package. For
Both parties extensely discussed the factors that the decision maker should instance, MERALCO has granted salary increases 27 through the collective
consider in making a wage award. While We do not seek to enumerate in this bargaining agreement the amount of which since 1980 for both rank-and-file and
decision the factors that should affect wage determination, we must emphasize supervisory employees were as follows:
that a collective bargaining dispute such as this one requires due consideration  
and proper balancing of the interests of the parties to the dispute and of those AMOUNT OF     DIFFERENCE    
who might be affected by the dispute. To our mind, the best way in approaching CBA
this task holistically is to consider the available objective facts, including, where INCREASES
applicable, factors such as the bargaining history of the company, the trends and
amounts of arbitrated and agreed wage awards and the company's previous CBAs, CBA RANK- SUPERVISORY   AMOUNT PERCENT
and industry trends in general. As a rule, affordability or capacity to pay should be COVERAGE AND-FILE
taken into account but cannot be the sole yardstick in determining the wage
award, especially in a public utility like MERALCO. In considering a public utility, 1980 230 342.5   112.5 48.91%
the decision maker must always take into account the "public interest" aspects of 1981 210 322.5   112.5 53.57
the case; MERALCO's income and the amount of money available for operating
expenses — including labor costs — are subject to State regulation. We must also 1982 200 312.5   112.5 56.25
keep in mind that high operating costs will certainly and eventually be passed on to
the consuming public as MERALCO has bluntly warned in its pleadings. TOTAL 640 977.5   337.5 52.73

1983 320 432.5   112.5 35.16


We take note of the "middle ground" approach employed by the Secretary in this
case which. we do not necessarily find to be the best method of resolving a wage 1984 350 462.5   112.5 32.14
dispute. Merely finding the midway point between the demands of the company
1985 370 482.5   112.5 30.41
and the union, and "splitting the difference" is a simplistic solution that fails to
recognize that the parties may already be at the limits of the wage levels they can
15 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
TOTAL 1,040.00 1,377.50   337.5 32.45 We note that each of the grant mentioned in the commonly adopted table of grants
has a special description. Christmas bonuses were given in 1988 and 1989.
1986 860 972.5   112.5 13.08 However, the amounts of bonuses given differed. In 1988, it was P1,500. In 1989, it
was 1/2 month salary. The use of "Christmas bonus" title stopped after 1989. In
1987 640 752.5   112.5 17.58 1990, what was given was a "cash gift" of 1/2 month's salary. The grants thereafter
1988 600 712.5   112.5 18.75 bore different titles and were for varying amounts. Significantly, the Company
explained the reason for the 1995 bonuses and this explanation was not
TOTAL 2,100.00 2,437.50   337.5 16.07 substantially contradicted by the Union.
1989 1,100.00 1,212.50   112.5 10.23 What comes out from all these is that while the Company has consistently give
1990 1,200.00 1,312.50   112.5 9.38 some amount by way of bonuses since 1988, these awards were not given uniformly
as Christmas bonuses or special Christmas grants although they may have been
1991 1,300.00 1,412.50   112.5 8.65 given at or about Christmas time.
xxx xxx xxx
TOTAL 3,600.00 3,937.50   337.5 9.38
The Company is not therefore correct in its position that there is no established
1992 1,400.00 1,742.50   342.5 24.46 practice of giving Christmas bonuses that has ripened to the status of being a term
and condition of employment. Regardless of its nomenclature and purpose, the act
1993 1,350.00 1,682.50   332.5 24.63 of giving this bonus in the spirit of Christmas has ripened into a Company
practice. 28
1994 1,150.00 1,442.50   292.5 25.43

TOTAL 3,900.00 4,867.50   967.5 24.81 It is MERALCO's position that the Secretary erred when he recognized that there
was an "established practice" of giving a two-month Christmas bonus based on the
 
fact that bonuses were given on or about Christmas time. It points out that the
Based on the above-quoted table, specifically under the column "RANK-AND-FILE,"
"established practice" attributed to MERALCO was neither for a considerable period
it is easily discernible that the total wage increase of P3,800.00 for 1996 to 1997
of time nor identical in either amount or purpose. The purpose and title of the
which we are granting in the instant case is significantly higher than the total
grants were never the same except for the Christmas bonuses of 1988 and 1989,
increases given in 1992 to 1994, or a span of three (3) years, which is only
and were not in the same amounts.
P3,900.00 a month. Thus, the Secretary's grant of P2,200.00 monthly wage increase
in the assailed order is unreasonably high a burden for MERALCO to shoulder.
We do not agree.
As a rule, a bonus is not a demandable and enforceable obligation;   29  it may
We now go to the economic issues.
nevertheless be granted on equitable considerations  30  as when the giving of
1. CHRISTMAS BONUS
such bonus has been the company's long and regular practice. 31  To be considered
MERALCO questions the Secretary's award of "Christmas bonuses" on the ground
a "regular practice," the giving of the bonus should have been done over a long
that what it had given its employees were special bonuses to mark or celebrate
period of time, and must be shown to have been consistent and
"special occasions," such as when the Asia Money Magazine recognized MERALCO
deliberate. 32 Thus we have ruled in National Sugar Refineries Corporation vs.
as the "best managed company in Asia." These grants were given on or about
NLRC: 33
Christmas time, and the timing of the grant apparently led the Secretary to the
The test or rationale of this rule on long practice requires an indubitable showing
conclusion that what were given were Christmas bonuses given by way of a
that the employer agreed to continue giving the benefits knowing fully well that
"company practice" on top of the legally required 13th month pay.
said employees are not covered by the law requiring payment thereof.
The Secretary in granting the two-month bonus, considered the following factual
In the case at bar, the record shows that MERALCO, aside from complying with the
finding, to wit:
regular 13th month bonus, has further been giving its employees an additional
Christmas bonus at the tail-end of the year since 1988. While the special bonuses
16 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
differed in amount and bore different titles, it can not be denied that these were administered by an entity not a party to the collective bargaining and the funds may
given voluntarily and continuously on or about Christmas time. The considerable not be touched without the trustee's conformity.
length of time MERALCO has been giving the special grants to its employees On the other hand, MERALCO control over these funds means that MERALCO may
indicates a unilateral and voluntary act on its part, to continue giving said benefits be compelled in the compulsory arbitration of a CBA deadlock where it is the
knowing that such act was not required by law. employer, to improve retirement benefits since retirement is a term or condition of
employment that is a mandatory subject of bargaining.
Indeed, a company practice favorable to the employees has been established and
the payments made by MERALCO pursuant thereto ripened into benefits enjoyed 3. EMPLOYEES' COOPERATIVE
by the employees. Consequently, the giving of the special bonus can no longer be The Secretary's disputed ruling requires MERALCO to provide the employees
withdrawn by the company as this would amount to a diminution of the employee's covered by the bargaining unit with a loan of 1.5 Million as seed money for the
existing benefits. 34 employees formation of a cooperative under the Cooperative Law, R.A. 6938. We
see nothing in this law — whether expressed or implied — that requires
We can not, however, affirm the Secretary's award of a two-month special employers to provide funds, by loan or otherwise, that employees can use to form
Christmas bonus to the employees since there was no recognized company practice a cooperative. The formation of a cooperative is a purely voluntary act under this
of giving a two-month special grant. The two-month special bonus was given only law, and no party in any context or relationship is required by law to set up a
in 1995 in recognition of the employees prompt and efficient response during the cooperative or to provide the funds therefor. In the absence of such legal
calamities. Instead, a one-month special bonus, We believe, is sufficient, this being requirement, the Secretary has no basis to order the grant of a 1.5 million loan to
merely a generous act on the part of MERALCO. MERALCO employees for the formation of a cooperative. Furthermore, we do not
see the formation of an employees cooperative, in the absence of an agreement by
2. RICE SUBSIDY and RETIREMENT BENEFITS for RETIREES the collective bargaining parties that this is a bargainable term or condition of
It appears that the Secretary of Labor originally ordered the increase of the employment, to be a term or condition of employment that can be imposed on the
retirement pay, rice subsidy and medical benefits of MERALCO retirees. This ruling parties on compulsory arbitration.
was reconsidered based on the position that retirees are no longer employees of
the company and therefore are no longer bargaining members who can benefit 4. GHSIP, HMP BENEFITS FOR DEPENDENTS and HOUSING EQUITY LOAN
from a compulsory arbitration award. The Secretary, however, ruled that all MERALCO contends that it is not bound to bargain on these benefits because these
members of the bargaining unit who retire between August 19, 1996 and November do not relate to "wages, hours of work and other terms and conditions of
30, 1997 (i.e., the term of the disputed CBA under the Secretary's disputed orders) employment" hence, the denial of these demands cannot result in a bargaining
are entitled to receive an additional rice subsidy. impasse.

The question squarely brought in this petition is whether the Secretary can issue an The GHSIP, HMP benefits for dependents and the housing equity loan have been
order that binds the retirement fund. The company alleges that a separate and the subject of bargaining and arbitral awards in the past. We do not see any reason
independent trust fund is the source of retirement benefits for MERALCO retirees, why MERALCO should not now bargain on these benefits. Thus, we agree with the
while the union maintains that MERALCO controls these funds and may therefore Secretary's ruling:
be compelled to improve this benefit in an arbitral award. . . . Additionally and more importantly, GHSIP and HMP, aside from being
contributory plans, have been the subject of previous rulings from this Office as
The issue requires a finding of fact on the legal personality of the retirement fund. bargainable matters. At this point, we cannot do any less and must recognize that
In the absence of any evidence on record indicating the nature of the retirement GHSIP and HMP are matters where the union can demand and negotiate for
fund's legal personality, we rule that the issue should be remanded to the Secretary improvements within the framework of the collective bargaining system.  35
for reception of evidence as whether or not the MERALCO retirement fund is a
separate and independent trust fund. The existence of a separate and independent Moreover, MERALCO have long been extending these benefits to the employees
juridical entity which controls an irrevocable retirement trust fund means that these and their dependents that they now become part of the terms and conditions of
retirement funds are beyond the scope of collective bargaining: they are employment. In fact, MERALCO even pledged to continue giving these benefits.
Hence, these benefits should be incorporated in the new CBA.
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With regard to the increase of the housing equity grant, we find P60,000.00 For purposes of uniformity, we affirm the Secretary's order on the integration of the
reasonable considering the prevailing economic crisis. RCR allowance in the basic salary of the employees.

5. SIGNING BONUS 7. SICK LEAVE RESERVE OF 15 DAYS


On the signing bonus issue, we agree with the positions commonly taken by MERALCO assails the Secretary's reduction of the sick leave reserve benefit from 25
MERALCO and by the Office of the Solicitor General that the signing bonus is a days to 15 days, contending that the sick leave reserve of 15 days has reached the
grant motivated by the goodwill generated when a CBA is successfully negotiated lowest safe level that should be maintained to give employees sufficient buffer in
and signed between the employer and the union. In the present case, this the event they fall ill.
goodwill does not exist. In the words of the Solicitor General:
When negotiations for the last two years of the 1992-1997 CBA broke down and the We find no compelling reason to deviate from the Secretary's ruling that the sick
parties sought the assistance of the NCMB, but which failed to reconcile their leave reserve is reduced to 15 days, with any excess convertible to cash at the end
differences, and when petitioner MERALCO bluntly invoked the jurisdiction of the of the year. The employee has the option to avail of this cash conversion or to
Secretary of Labor in the resolution of the labor dispute, whatever goodwill existed accumulate his sick leave credits up to 25 days for conversion to cash at his
between petitioner MERALCO and respondent union disappeared. . . . . 36 retirement or separation from the service. This arrangement is, in fact, beneficial
to MERALCO. The latter admits that "the diminution of this reserve does not
In contractual terms, a signing bonus is justified by and is the consideration paid for seriously affect MERALCO because whatever is in reserve are sick leave credits that
the goodwill that existed in the negotiations that culminated in the signing of a CBA. are payable to the employee upon separation from service. In fact, it may be to
Without the goodwill, the payment of a signing bonus cannot be justified and any MERALCO's financial interest to pay these leave credits now under present salary
order for such payment, to our mind, constitutes grave abuse of discretion. This is levels than pay them at future higher salary levels. 38
more so where the signing bonus is in the not insignificant total amount of P16
Million. 8. 40-DAY UNION LEAVE
MERALCO objects to the demanded increase in union leave because the union leave
6. RED-CIRCLE-RATE ALLOWANCE granted to the union is already substantial. It argues that the union has not
An RCR allowance is an amount, not included in the basic salary, that is granted by demonstrated any real need for additional union leave.
the company to an employee who is promoted to a higher position grade but whose The thirty (30) days union leave granted by the Secretary, to our mind, constitute
actual basic salary at the time of the promotion already exceeds the maximum sufficient time within which the union can carry out its union activities such as but
salary for the position to which he or she is promoted. As an allowance, it applies not limited to the election of union officers, selection or election of appropriate
only to specific individuals whose salary levels are unique with respect to their new bargaining agents, conduct referendum on union matters and other union-related
and higher positions. It is for these reasons that MERALCO prays that it be allowed matters in furtherance of union objectives. Furthermore, the union already enjoys
to maintain the RCR allowance as a separate benefit and not be integrated in the a special union leave with pay for union authorized representatives to attend work
basic salary. education seminars, meetings, conventions and conferences where union
representation is required or necessary, and Paid-Time-off for union officers,
The integration of the RCR allowance in the basic salary of the employees had stewards and representatives for purpose of handling or processing grievances.
consistently been raised in the past CBAs (1989 and 1992) and in those cases, the
Secretary decreed the integration of the RCR allowance in the basic salary. We do 9. HIGH VOLTAGE/HIGH POLE/TOWING ALLOWANCE
not see any reason why it should not be included in the present CBA. In fact, in the MERALCO argues that there is no justification for the increase of these allowances.
1995 CBA between MERALCO and the supervisory union (FLAMES), the integration The personnel concerned will not receive any additional risk during the life of the
of the RCR allowance was recognized. Thus, Sec. 4 of the CBA provides: current CBA that would justify the increase demanded by the union. In the absence
All Red-Circle-date Allowance as of December 1, 1995 shall be integrated in the of such risk, then these personnel deserve only the same salary increase that all
basic salary of the covered employees who as of such date are receiving such other members of the bargaining unit will get as a result of the disputed CBA.
allowance. Thereafter, the company rules on RCR allowance shall continue to be MERALCO likewise assails the grant of the high voltage/high pole allowance to
observed/applied. 37 members of the team who are not exposed to the high voltage/high pole risks. The
risks that justify the higher salary and the added allowance are personal to those
18 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
who are exposed to those risks. They are not granted to a team because some The Secretary's ruling on this issue states that:
members of the team are not exposed to the given risks. a. Scope of the collective bargaining unit. The union is demanding that the
The increase in the high-voltage allowance (from P45.00 to P55.00), high-pole collective bargaining unit shall be composed of all regular rank and file employees
allowance (from P30.00 to P40.00), and towing allowance is justified considering hired by the company in all its offices and operating centers through its franchise
the heavy risk the employees concerned are exposed to. The high-voltage and those it may employ by reason of expansion, reorganization or as a result of
allowance is granted to an employee who is authorized by the company to actually operational exigencies. The law is that only managerial employees are excluded
perform work on or near energized bare lines and bus, while the high-pole from any collective bargaining unit and supervisors are now allowed to form their
allowance is given to those authorized to climb poles on a height of at least 60 feet own union (Art. 254 of the Labor Code as amended by R.A. 6715 ). We grant the
from the ground to work thereat. The towing allowance, on the other hand, is union demand.
granted to the stockman drivers who tow trailers with long poles and equipment on
board. Based on the nature of the job of these concerned employees, it is Both MERALCO and the Office of the Solicitor General dispute this ruling because it
imperative to give them these additional allowances for taking additional risks. disregards the rule. We have established on the exclusion of confidential employees
These increases are not even commensurate to the danger the employees from the rank and file bargaining unit.
concerned are subjected to. Besides, no increase has been given by the company
since 1992. 39 In Pier 8 Arrastre vs. Confesor and General Maritime and Stevedores Union, 40 we
ruled that:
We do not, however, subscribe to the Secretary's order granting these allowances Put another way, the confidential employee does not share in the same
to the members of the team who are not exposed to the given risks. The reason is "community of interest" that might otherwise make him eligible to join his rank and
obvious no risk, no pay. To award them the said allowances would be manifestly file co-workers, precisely because of a conflict in those interests.
unfair for the company and even to those who are exposed to the risks, as well as Thus, in  Metrolab Industries vs. Roldan-Confesor, 41 We ruled:
to the other members of the bargaining unit who do not receive the said . . . that the Secretary's order should exclude the confidential employees from the
allowances. regular rank and file employees qualified to become members of the MEWA
bargaining unit.
10. BENEFITS FOR COLLECTORS From the foregoing disquisition, it is clear that employees holding a confidential
MERALCO opposes the Secretary's grant of benefits for collectors on the ground position are prohibited from joining the union of the rank and file employees.
that this is grossly unreasonable both in scope and on the premise it is founded.
2. ISSUE OF UNION SECURITY
We have considered the arguments of the opposing parties regarding these benefits The Secretary in his Order of August 19, 1996, 42 ruled that:
and find the Secretary's ruling on the (a) lunch allowance; (b) disconnection fee for b. Union recognition and security. The Union is proposing that it be recognized by
delinquent accounts; (c) voluntary performance of other work at the instance of the the Company as sole and exclusive bargaining representative of the rank and file
Company; (d) bobcat belt bags; and (e) reduction of quota and MAPL during employees included in the bargaining unit for the purpose of collective bargaining
typhoons and other force  majeure  events, reasonable considering the risks taken regarding rates of pay, wages, hours of work and other terms and conditions of
by the company personnel involved, the nature of the employees' functions and employment. For this reason, the Company shall agree to meet only with the Union
responsibilities and the prevailing standard of living. We do not however subscribe officers and its authorized representatives on all matters involving the Union as an
to the Secretary's award on the following: organization and all issues arising from the implementation and interpretation of
(a) Reduction of quota and MAPL when the collector is on sick leave because the the new CBA. Towards this end, the Company shall not entertain any individual or
previous CBA has already provided for a reduction of this demand. There is no need group of individuals on matters within the exclusive domain of the Union.
to further reduce this. Additionally, the Union is demanding that the right of all rank and file employees to
(b) Deposit of cash bond at MESALA because this is no longer necessary in view of join the Union shall be recognized by the Company. Accordingly, all rank and file
the fact that collectors are no longer required to post a bond. employees shall join the Union.
xxx xxx xxx
WE SHALL NOW RESOLVE THE NON-ECONOMIC ISSUES. These demands are fairly reasonable. We grant the same in accordance with the
1. SCOPE OF THE BARGAINING UNIT maintenance of membership principle as a form of union security.
19 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
We feel that the limitations imposed by the union advocates are too specific and
The Secretary reconsidered this portion of his original order when he said in his may not be applicable to the situations that the company and the union may face in
December 28, 1996 order that: the future. To our mind, the greater risk with this type of limitation is that it will
. . . . When we decreed that all rank and file employees shall join the Union, we tend to curtail rather than allow the business growth that the company and the
were actually decreeing the incorporation of a closed shop form of union security in union must aspire for. Hence, we are for the general limitations we have stated
the CBA between the parties. In  Ferrer v. NLRC, 224 SCRA 410, the Supreme Court above because they will allow a calibrated response to specific future situations the
ruled that a CBA provision for a closed shop is a valid form of union security and is company and the union may face. 44
not a restriction on the right or freedom of association guaranteed by the
Constitution, citing Lirag v. Blanco, 109 SCRA 87. Additionally, We recognize that contracting out is not unlimited; rather, it is a
prerogative that management enjoys subject to well-defined legal limitations. As
MERALCO objected to this ruling on the grounds that: (a) it was never questioned we have previously held, the company can determine in its best business judgment
by the parties; (b) there is no evidence presented that would justify the restriction whether it should contract out the performance of some of its work for as long as
on employee's union membership; and (c) the Secretary cannot rule on the union the employer is motivated by good faith, and the contracting out must not have
security demand because this is not a mandatory subject for collective bargaining been resorted to circumvent the law or must not have been the result of
agreement. malicious or arbitrary action. 45 The Labor Code and its implementing rules also
We agree with MERALCO's contention. contain specific rules governing contracting out (Department or Labor Order No. 10,
An examination of the records of the case shows that the union did not ask for a May 30, 1997, Sections 1-25).
closed shop security regime; the Secretary in the first instance expressly stated
that a maintenance of membership clause should govern; neither MERALCO nor Given these realities, we recognize that a balance already exists in the parties'
MEWA raised the issue of union security in their respective motions for relationship with respect to contracting out; MERALCO has its legally defined and
reconsideration of the Secretary's first disputed order; and that despite the protected management prerogatives while workers are guaranteed their own
parties clear acceptance of the Secretary's first ruling, the Secretary motu protection through specific labor provisions and the recognition of limits to the
proprio  reconsidered his maintenance of membership ruling in favor of the more exercise of management prerogatives. From these premises, we can only conclude
stringent union shop regime. that the Secretary's added requirement only introduces an imbalance in the
Under these circumstances, it is indubitably clear that the Secretary gravely abused parties' collective bargaining relationship on a matter that the law already
his discretion when he ordered a union shop in his order of December 28, 1996. The sufficiently regulates. Hence, we rule that the Secretary's added requirement,
distinctions between a maintenance of membership regime from a closed shop and being unreasonable, restrictive and potentially disruptive should be struck down.
their consequences in the relationship between the union and the company are
well established and need no further elaboration. 4. UNION REPRESENTATION IN COMMITTEES
As regards this issue, We quote with approval the holding of the Secretary in his
Consequently, We rule that the maintenance of membership regime should govern Order of December 28, 1996, to wit:
at MERALCO in accordance with the Secretary's order of August 19, 1996 which We see no convincing reason to modify our original Order on union representation
neither party disputed. in committees. It reiterates what the Article 211 (A)(g) of the Labor Code provides:
3. THE CONTRACTING OUT ISSUE "To ensure the participation of workers in decision and policy-making processes
This issue is limited to the validity of the requirement that the union be consulted affecting their rights, duties and welfare. Denying this opportunity to the Union is
before the implementation of any contracting out that would last for 6 months or to lay the claim that only management has the monopoly of ideas that may
more. Proceeding from our ruling in San Miguel Employees Union-PTGWO vs. improve management strategies in enhancing the Company's growth. What every
Bersamira, 43 (where we recognized that contracting out of work is a proprietary company should remember is that there might be one among the Union members
right of the employer in the exercise of an inherent management prerogative) the who may offer productive and viable ideas on expanding the Company's business
issue we see is whether the Secretary's consultation requirement is reasonable or horizons. The Union's participation in such committees might just be the
unduly restrictive of the company's management prerogative. We note that the opportune time for dormant ideas to come forward. So, the Company must
Secretary himself has considered that management should not be hampered in the welcome this development (see also PAL v. NLRC,  et. al., G.R. 85985, August 13,
operations of its business when he said that: 1995). It must be understood, however, that the committees referred to here are
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the Safety Committee, the Uniform Committee and other committees of a similar two years of the effectivity of the existing CBA. This retroactive date, MERALCO
nature and purpose involving personnel welfare, rights and benefits as well as argues, is contrary to the ruling of this Court in Pier 8 Arrastre and Stevedoring
duties." Services, Inc. vs. Roldan-Confessor 47 which mandates that the effective date of the
We do not find merit in MERALCO's contention that the above-quoted ruling of the new CBA should be the date the Secretary of Labor has resolved the labor dispute.
Secretary is an intrusion into the management prerogatives of MERALCO. It is On the other hand, MEWA supports the ruling of the Secretary on the theory that
worthwhile to note that all the Union demands and what the Secretary's order he has plenary power and discretion to fix the date of effectivity of his arbitral
granted is that the Union be allowed to participate in policy formulation and award citing our ruling in  St. Lakes Medical Center, Inc. vs.
decision-making process on matters affecting the Union members' rights, duties and Torres. 48 MEWA also contends that if the arbitral award takes effect on the date of
welfare as required in Article 211 (A) (g) of the Labor Code. And this can only be the Secretary Labor's ruling on the parties' motion for reconsideration (i.e., on
done when the Union is allowed to have representatives in the Safety Committee, December 28, 1996), an anomaly situation will result when CBA would be more
Uniform Committee and other committees of a similar nature. Certainly, such than the 5-year term mandated by Article 253-A of the Labor Code.
participation by the Union in the said committees is not in the nature of a co- However, neither party took into account the factors necessary for a proper
management control of the business of MERALCO. What is granted by the resolution of this aspect.  Pier 8, for instance, does not involve a mid-term
Secretary is participation and representation. Thus, there is no impairment of negotiation similar to this case, while  St. Lukes does not take the "hold over"
management prerogatives. principle into account, i.e., the rule that although a CBA has expired, it continues to
have legal effects as between the parties until a new CBA has been entered into. 49
5. INCLUSION OF ALL TERMS AND CONDITIONS IN THE CBA Art. 253-A serves as the guide in determining when the effectivity of the CBA at bar
MERALCO also decries the Secretary's ruling in both the assailed Orders that — is to take effect. It provides that the representation aspect of the CBA is to be for a
All other benefits being enjoyed by the Company's employees but which are not term of 5 years, while
expressly or impliedly repealed in this new agreement shall remain subsisting and . . . [A]ll other provisions of the Collective Bargaining Agreement shall be re-
shall likewise be included in the new collective bargaining agreement to be signed negotiated not later than 3 years after its execution. Any agreement on such other
by the parties effective December 1, 1995. 46 provision of the Collective Bargaining Agreement entered into within 6 months
claiming that the above-quoted ruling intruded into the employer's freedom to from the date of expiry of the term of such other provisions as fixed in such
contract by ordering the inclusion in the new CBA all other benefits presently Collective Bargaining Agreement shall retroact to the day immediately following
enjoyed by the employees even if they are not incorporated in the new CBA. This such date. If such agreement is entered into beyond 6 months, the parties shall
matter of inclusion, MERALCO argues, was never discussed and agreed upon in the agree on the duration of the effectivity thereof. . . . .
negotiations; nor presented as issues before the Secretary; nor were part of the Under these terms, it is clear that the 5-year term requirement is specific to the
previous CBA's between the parties. representation aspect. What the law additionally requires is that a CBA must be
re-negotiated within 3 years "after its execution." It is in this re-negotiation that
We agree with MERALCO. gives rise to the present CBA deadlock.

The Secretary acted in excess of the discretion allowed him by law when he If no agreement is reached within 6 months from the expiry date of the 3 years that
ordered the inclusion of benefits, terms and conditions that the law and the follow the CBA execution, the law expressly gives the parties — not anybody else —
parties did not intend to be reflected in their CBA. the discretion to fix the effectivity of the agreement.
To avoid the possible problems that the disputed orders may bring, we are Significantly, the law does not specifically cover the situation where 6 months have
constrained to rule that only the terms and conditions already existing in the elapsed but no agreement has been reached with respect to effectivity. In this
current CBA and was granted by the Secretary (subject to the modifications eventuality, we hold that any provision of law should then apply for the law
decreed in this decision) should be incorporated in the CBA, and that the abhors a vacuum. 50
Secretary's disputed orders should accordingly be modified. One such provision is the principle of hold over,  i.e., that in the absence of a new
CBA, the parties must maintain the  status quo  and must continue in full force and
6. RETROACTIVITY OF THE CBA effect the terms and conditions of the existing agreement until a new agreement is
Finally, MERALCO also assails the Secretary's order that the effectivity of the new reached. 51 In this manner, the law prevents the existence of a gap in the
CBA shall retroact to December 1, 1995, the date of the commencement of the last relationship between the collective bargaining parties. Another legal principle that
21 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
should apply is that in the absence of an agreement between the parties, then, an -some LIPERCON and D’RITE workers signed up for PTWGO; PTWGO sought their
arbitrated CBA takes on the nature of any judicial or quasi-judicial award; it regularization as they have been continuously working for San Mig from 6m-15 yrs,
operates and may be executed only respectively unless there are legal justifications with work neither casual nor seasonal.
for its retroactive application. -when no favorable response from SMC received, PTWGO filed NOTICE OF STRIKE
FOR ULP, CBA violations, and union busting
Consequently, we find no sufficient legal ground on the other justification for the -2nd Notice of strike for ULP filed
retroactive application of the disputed CBA, and therefore hold that the CBA -conciliatory conferences held by NCMB
should be effective for a term of 2 years counted from December 28, 1996 (the -pending conciliatory conferences, LIPERCON and D’RITE workers staged series of
date of the Secretary of Labor's disputed order on the parties' motion for pickets in various SMC plants and offices.
reconsideration) up to December 27, 1999. -SMC filed verified complaint for injunction and damages before RTC Pasig to enjoin
WHEREFORE, the petition is granted and the orders of public respondent Secretary Union from:
of Labor dated August 19, 1996 and December 28, 1996 are set aside to the extent a. representing and/or acting for and in behalf of the employees of LIPERCON
set forth above. The parties are directed to execute a Collective Bargaining and/or D'RITE for the purposes of collective bargaining;
Agreement incorporating the terms and conditions contained in the unaffected b. calling for and holding a strike vote, to compel plaintiff to hire the employees
portion is of the Secretary of Labor's orders of August 19, 1996 and December 28, or workers of LIPERCON and D'RITE;
1996, and the modifications set forth above. The retirement fund issue is remanded c. inciting, instigating and/or inducing the employees or workers of LIPERCON
to the Secretary of Labor for reception of evidence and determination of the legal and D'RITE to demonstrate and/or picket at the plants and offices of plaintiff
personality of the MERALCO retirement fund.1âwphi1.nêt within the bargaining unit referred to in the CBA,...;
SO ORDERED. d. staging a strike to compel plaintiff to hire the employees or workers of
Davide, Jr., C.J., Melo, Kapunan and Pardo, JJ., concur. LIPERCON and D'RITE;
e. using the employees or workers of LIPERCON AND D'RITE to man the strike
area and/or picket lines and/or barricades which the defendants may set up
III. TYPES OF DISPUTE AND DIFFERENT MODES OF DISPUTE at the plants and offices of plaintiff within the bargaining unit referred to in
SETTLEMENT the CBA ...;
f. intimidating, threatening with bodily harm and/or molesting the other
3. WHAT IS A LABOR DISPUTE? employees and/or contract workers of plaintiff, as well as those persons
lawfully transacting business with plaintiff at the work places within the
bargaining unit referred to in the CBA, ..., to compel plaintiff to hire the
employees or workers of LIPERCON and D'RITE;
SMC EMPLOYEES UNION VS. BERSAMIRA, 186 SCRA 496 (1990) g. blocking, preventing, prohibiting, obstructing and/or impeding the free
SUMMARY: RTC issued Writ of Preliminary Injunction, on the assumption that it had ingress to, and egress from, the work places within the bargaining unit
jurisdiction over the dispute between SMC and the Union, there being no EER. referred to in the CBA .., to compel plaintiff to hire the employees or workers
Court held that even if there is no EER, there can still be a labor dispute. of LIPERCON and D'RITE;
h. preventing and/or disrupting the peaceful and normal operation of plaintiff
FACTS: at the work places within the bargaining unit referred to in the CBA, Annex
-Sometime 1983-1984, SMC entered contracts for merchandising services w/ 'C' hereof, to compel plaintiff to hire the employees or workers of LIPERCON
LIPERCON & D’RITE (Independent Contractors). Under the said contracts, it was and D'RITE.
understood that the EEs were employed by the contractors, paid by the contractors, -RTC issued TRO
and none were deemed to be SMC’s EEs nor agents. -Union filed MTD: opposed then denied by RTC
-PTWGO is duly authorized representative of monthly paid rank-and-file SMC EEs. -RTC (DECISION): granted the application, enjoined Union from committing acts
CBA excluded from bargaining unit "temporary, probationary, or contract complained of:
employees and workers”

22 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
“The absence of employer-employee relationship negates the existence of event of a deadlock in a labor
labor dispute. Verily, this court has jurisdiction to take cognizance of dispute over 'wages, hours of
plaintiff's grievance. work and all other and of the
The evidence so far presented indicates that plaintiff has contracts for employment' of the employees
services with Lipercon and D'Rite. The application and contract for in the unit. The union leaders
employment of the defendants' witnesses are either with Lipercon or D'Rite. cannot instigate a strike to
What could be discerned is that there is no employer-employee relationship compel the employer,
between plaintiff and the contractual workers employed by Lipercon and especially on the eve of
D'Rite. This, however, does not mean that a final determination regarding certification elections, to hire
the question of the existence of employer-employee relationship has already strangers or workers outside
been made. To finally resolve this dispute, the court must extensively the unit, in the hope the latter
consider and delve into the manner of selection and engagement of the will help re-elect them.
putative employee; the mode of payment of wages; the presence or absence  Civil courts have jurisdiction
of a power of dismissal; and the Presence or absence of a power to control because this kind of strike did
the putative employee's conduct. This necessitates a full-blown trial. If the not arise from a labor dispute.
acts complained of are not restrained, plaintiff would, undoubtedly, suffer
irreparable damages. Upon the other hand, a writ of injunction does not HELD: NO
necessarily expose defendants to irreparable damages.” -A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any
-pending issuance of the order, some of the contractual workers of Lipercon and controversy or matter concerning terms and conditions of employment or the
D’Rite were laid off. association or representation of persons in negotiating, fixing, maintaining,
-NCMB called the parties to conciliation: parties entered into a MOA: "without changing, or arranging the terms and conditions of employment, regardless of
prejudice to the outcome of G.R. No. 87700 (this case) and Civil Case No. 57055 (the whether the disputants stand in the proximate relation of employer and employee."
case below), the laid-off individuals ... shall be recalled effective 8 May 1989 to their -While it is SanMig's submission that no employer-employee relationship exists
former jobs or equivalent positions under the same terms and conditions prior to between itself, on the one hand, and the contractual workers of Lipercon and D'Rite
"lay-off" (Annex 15, SanMig Comment). In turn, the Union would immediately lift on the other, a labor dispute can nevertheless exist "regardless of whether the
the pickets and return to work. disputants stand in the proximate relationship of employer and employee"
(Article 212 [1], Labor Code, supra) provided the controversy concerns, among
ISSUE: WON RTC correctly assumed jurisdiction over the present controversy and others, the terms and conditions of employment or a "change" or "arrangement"
properly issued the Writ of Preliminary Injunction to the resolution of that question, thereof (ibid). Put differently, and as defined by law, the existence of a labor
is the matter of whether, or not the case at bar involves, or is in connection with, or dispute is not negative by the fact that the plaintiffs and defendants do not stand
relates to a labor dispute. in the proximate relation of employer and employee.
-That a labor dispute, as defined by the law, does exist herein is evident. At bottom,
w/n jurisdiction (SMC) Outside Jurisdiction (UNION) what the Union seeks is to regularize the status of the employees contracted by
 No EER  There’s a labor dispute directly Lipercon and D'Rite in effect, that they be absorbed into the working unit of
 EBR cannot strike to compel ER connected or interwoven w/ SanMig. This matter definitely dwells on the working relationship between said
to hire and create an cases pending w/ NCMB-DOLE employees vis-a-vis SanMig. Terms, tenure and conditions of their employment
employment relations w/  Mass concerted action of and the arrangement of those terms are thus involved bringing the matter within
contractual workers (who were picketing are w/n competence the purview of a labor dispute. Further, the Union also seeks to represent those
expressly excluded in the CBA) of labor tribunals workers, who have signed up for Union membership, for the purpose of collective
 . A strike is a coercive economic bargaining. SanMig, for its part, resists that Union demand on the ground that there
weapon granted the bargaining is no employer-employee relationship between it and those workers and because
representative only in the the demand violates the terms of their CBA. Obvious then is that representation
and association, for the purpose of negotiating the conditions of employment are
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also involved. In fact, the injunction sought by SanMig was precisely also to prevent SUMMARY: Workers of INPORT staged a strike, filing individual notice of strike w/
such representation. Again, the matter of representation falls within the scope of a MOLE (which EEs alleged to have been done through fraud on part of the union
labor dispute. Neither can it be denied that the controversy below is directly officers), expressing grievances regarding wages, 13 th month pay, and hazard pay.
connected with the labor dispute already taken cognizance of by the NCMB-DOLE INPORT complained that the strike was illegal. NLRC issued TRO, return-to-work
(NCMB-NCR- NS-01- 021-89; NCMB NCR NS-01-093-83). order (majority of workers returned to work). LA declared strike as illegal (failed to
-As the case is indisputably linked with a labor dispute, jurisdiction belongs to the comply w/ Art 264-265,LC). NLRC affirmed w/ modification, characterizing the strike
labor tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to as a “protest action”. Court held that there was a strike – stemming from a labor
its amendment by R.A. No. 6715 on 21 March 1989, since the suit below was dispute – but it was illegal for not complying w/ the cooling-off period, 7-day strike
instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction ban after the strike vote report. Main issue of the petition for review is actually the
to hear and decide the following cases involving all workers including "1. unfair separation pay and backwages which Court recalled the payment of backwages,
labor practice cases; 2. those that workers may file involving wages, hours of work reduced separation pay.
and other terms and conditions of employment; ... and 5. cases arising from any
violation of Article 265 of this Code, including questions involving the legality of FACTS:
striker and lockouts. ..." Article 217 lays down the plain command of the law. -APRIL 30, 1985: Employees of INPORT, members of the Macajalar Labor Union –
-The claim of SanMig that the action below is for damages under Articles 19, 20 and Federation of Free Workers (MLU-FFW) stopped working and gathered in mass
21 of the Civil Code would not suffice to keep the case within the jurisdictional action to express grievances re: wages, 13th month pay and hazard pay. Individual
boundaries of regular Courts. That claim for damages is interwoven with a labor notices of strike were also filed w/ MOLE on the same morning.
dispute existing between the parties and would have to be ventilated before the -conciliation conferences between INPORT and UNION failed
administrative machinery established for the expeditious settlement of those -INPORT filed COMPLAINT FOR ILLEGAL STRIKE W/ PRAYER FOR TRO w/ Labor
disputes. To allow the action filed below to prosper would bring about "split Arbiter
jurisdiction" which is obnoxious to the orderly administration of justice (Philippine -NLRC issued TRO, return-to-work order. Majority of the strikers returned to work,
Communications, Electronics and Electricity Workers Federation vs. Hon. Nolasco, L- the respondent employees were the only ones who remained. The remaining
24984, 29 July 1968, 24 SCRA 321). workers were required to undergo prior screening conducted by MLU-FFW before
-We recognize the proprietary right of SanMig to exercise an inherent management they be accepted to work.
prerogative and its best business judgment to determine whether it should contract -278 employees were dropped by MLU-FFW’s counsel as respondents, claiming they
out the performance of some of its work to independent contractors. However, the were merely tricked into signing the individual notices of strike – done w/o approval
rights of all workers to self-organization, collective bargaining and negotiations, and nor consultation of the majority of union members. INPORT did not object so LA
peaceful concerted activities, including the right to strike in accordance with law granted the exclusion of the 278 employees. COMPLAINT for illegal strike was only
(Section 3, Article XIII, 1987 Constitution) equally call for recognition and protection. against the 31 employees who continued w/ the strike.
Those contending interests must be placed in proper perspective and equilibrium. -LA: STRIKE ILLEGAL. But because the employees who continued the strike were not
DISPOSITION: WHEREFORE, the Writ of certiorari is GRANTED and the Orders of shown to have participated in illegal acts, they were ordered to return to work w/o
respondent Judge of 25 March 1989 and 29 March 1989 are SET ASIDE. The Writ of undergoing the required screening by MLU-FFW. BUT WITH THE UNION OFFICERS,
Prohibition is GRANTED and respondent Judge is enjoined from taking any further they should first seek reconsideration of INPORT before they be allowed to work.
action in Civil Case No. 57055 except for the purpose of dismissing it. The status -Both INPORT and employees appealed (MR)
quo ante declaration of strike ordered by the Court on 24 May 1989 shall be -NLRC: affirmed w/ Modification LA: concerted action was more of a “protest
observed pending the proceedings in the National Conciliation Mediation Board- action” + All workers should be allowed to work unconditionally but because of
Department of Labor and Employment, docketed as NCMB-NCR-NS-01-02189 and strained relations, SEPARATION PAY (equivalent to 12 months salaries) AWARDED
NCMB-NCR-NS-01-093-83. No costs. IN LIEU OF REINSTATEMENT + 2 yr BACKWAGES
SO ORDERED. -INPORT filed MR
-NLRC modified: no basis for reinstatement (EEs not terminated). Separation pay
(reduced to 6months) merely as equitable relief. Backwages deleted for lack of
GOLD CITY INTEGRATED PORT SERVICE V. NLRC, 245 SCRA 627 (1995) factual and legal basis but P1k given.

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-INPORT filed petition for certiorari for GADALEJ for the award of separation pay their imposition is essential to attain the legitimate policy objectives embodied in
and backwages even if w/ an ILLEGAL STRIKE the law. We hold that they constitute a valid exercise of the police power of the
state.
- effects of an ILLEGAL STRIKE (Art 264): A union officer who knowingly participates
in an illegal strike and any worker or union officer who knowingly participates in
ISSUES: the commission of illegal acts during a strike may be declared to have lost their
1. WON there was a strike? employment status. An ordinary striking worker cannot be terminated for mere
2. If there was a strike, WON it was illegal? participation in an illegal strike. There must be proof that he committed illegal acts
3. WON the award of separation pay and back wages was proper? during a strike. A union officer, on the other hand, may be terminated from work
when he knowingly participates in an illegal strike, and like other workers, when he
HELD: commits an illegal act during a strike.
1. YES. There was a strike, not a spontaneous protest action! -HERE: In the case at bench, INPORT accepted the majority of the striking workers,
-A strike, considered as the most effective weapon of labor, is defined as any including union officers, back to work. Private respondents were left to continue
temporary stoppage of work by the concerted action of employees as a result of an with the strike after they refused to submit to the "screening" required by the
industrial or labor dispute. A labor dispute includes any controversy or matter company. 
concerning terms or conditions of employment or the association or representation
of persons in negotiating, fixing, maintaining, changing or arranging the terms and 3. NO basis. But gave separation pay as equitable relief
conditions of employment, regardless of whether or not the disputants stand in the -Under the law, an employee is entitled to reinstatement and to his full
proximate relation of employers and employees. backwages when he is unjustly dismissed. 
-Employees stopped working and held the mass action on April 30, 1985 to press -Reinstatement means restoration to a state or condition from which one had been
for their wages and other benefits. What transpired then was clearly a strike, for removed or separated. Reinstatement and backwages are separate and distinct
the cessation of work by concerted action resulted from a labor dispute. reliefs given to an illegally dismissed employee. 
-Separation pay is awarded when reinstatement is not possible, due, for instance,
2. NO. it was ILLEGAL to strained relations between employer and employee. It is also given as a form of
-The individual notices of strike filed by the workers did not conform to the notice financial assistance when a worker is dismissed in cases such as the installation of
required by the law to be filed since they were represented by a union (MLU-FFW) labor saving devices, redundancy, retrenchment to prevent losses, closing or
which even had an existing collective bargaining agreement with INPORT. cessation of operation of the establishment, or in case the employee was found to
-Neither did the striking workers observe the strike vote by secret ballot, cooling-off have been suffering from a disease such that his continued employment is
period and reporting requirements. prohibited by law. It is a statutory right defined as the amount that an employee
 National Federation of Sugar Workers v. Ovejera: the language of the law receives at the time of his severance from the service and is designed to provide the
leaves no room for doubt that the cooling-off period and the seven-day employee with the wherewithal during the period that he is looking for another
strike ban after the strike-vote report were intended to be mandatory. employment.  It is oriented towards the immediate future, the transitional period
 -Article 265 of the Labor Code reads, inter alia: (i)t SHALL be unlawful for the dismissed employee must undergo before locating a replacement job. 
any labor organization . . . to declare a strike . . . without first having filed -Hence, an employee dismissed for causes other than those cited above is not
the notice required in the preceding Article or without the necessary strike entitled to separation pay.  Well-settled is it that separation pay shall be allowed
vote first having been obtained and reported to the Ministry. only in those instances where the employee is validly dismissed for causes other
- In requiring a strike notice and a cooling-off period, the avowed intent of the law than serious misconduct or those reflecting on his moral character. 
is to provide an opportunity for mediation and conciliation. It thus directs the -Backwages, on the other hand, is a form of relief that restores the income that was
MOLE to exert all efforts at mediation and conciliation to effect a voluntary lost by reason of unlawful dismissal. 
settlement' during the cooling-off period. . . . ***It is clear from the foregoing summary of legal provisions and jurisprudence
xxx xxx xxx that there must generally be unjust or illegal dismissal from work, before
The cooling-off period and the 7-day strike ban after the filing of a strike-vote reinstatement and backwages may be granted. And in cases where reinstatement
report, as prescribed in Art. 264 of the Labor Code, are reasonable restrictions and
25 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
is not possible or when dismissal is due to valid causes, separation pay may be TYPES OF LABOR DISPUTE
granted.
-HERE: No illegal dismissal: it was the employees’ fault that they were not
reinstated as they were the ones who refused to undergo the “screening” ELGIN, J. & E. RY. CO. V. BURLEY ET AL., 325 U.S. 711 (1945)
requirement. SUMMARY: There was a change in ER in the railroad company. CBA w/Previous ER
-but distinguish: provided Art.6 which provided the start of work hours. New ER (ELGIN) and the
*for the ORDINARY WORKER: Under Article 264 of the Labor Code, a worker Union (Brotherhood) failed to reach an agreement as to its applicability.
merely participating in an illegal strike may not be terminated from his Subsequently, the union members Burley et al filed complaints with the union as to
employment. It is only when he commits illegal acts during a strike that he may be violation of the Art 6. Complaint was filed by the Union in behalf of the employees
declared to have lost his employment status. Since there appears no proof that before the BOARD. Pending its decision, ER settled w/ Union w/ re: the claims of the
these union members committed illegal acts during the strike, they cannot be individual employees, w/o notice to the individual employees concerned. When a
dismissed. The striking union members among private respondents are thus entitled subsequent claim for the same violation was filed again by the employees, ER was
to reinstatement, there being no just cause for their dismissal. BUT HERE AWARD asserting that the claim was already resolved in the settlement. Issue was WON the
SEPARATION PAY IN LIEU OF REINSTATEMENT (MORE THAN 10YRS PASSED) Union was authorized by the individual employees to settle the dispute between
*for the UNION MEMBERS: No backwages. them. Court differentiated Major disputes (disputes re: formation of CBA/rights)
*for the UNION OFFICERS: NO RELIEF! But moot because cannot be reinstated in and Minor disputes (grievances arising from application of existing CBA) and held
accordance w/ CBA (they lost their good standing in the Union, thus were not that Union represents employees in major disputes, but in minor disputes express
members of the union anymore – cannot be reinstated) authorization of the employees are needed for the union to act on their behalf.
-For knowingly participating in an illegal strike, the law mandates that a union
officer may be terminated from employment. Notwithstanding the fact that INPORT FACTS:
previously accepted other union officers and that the screening required by it was -The controversy relates to operations in petitioner's so-called 'Whiting Yard.' Prior
uncalled for, still it cannot be gainsaid that it possessed the right and prerogative to July 24, 1934, respondents (BURLEY ET AL), or some of them, were employed by
to terminate the union officers from service. The law, in using the word may, grants the Standard Oil Company to do private intraplant switching in its Whiting, Indiana,
the employer the option of declaring a union officer who participated in an illegal plant. On that date this work was taken over by ELGIN J & E. Ry. Until then Standard
strike as having lost his employment.  Oil's switching crews began work each day at hours fixed in advance by the
-Moreover, an illegal strike which, more often than not, brings about unnecessary management, which varied as plant operations required.
economic disruption and chaos in the workplace should not be countenanced by a -Prior to 1934 petitioner's crews at all yards in Indiana and Illinois began work daily
relaxation of the sanctions prescribed by law. in accordance with starting time provisions contained in Article 6 of a collective
-In sum, reinstatement and backwages or, if no longer feasible, separation pay, agreement made in 1927 between petitioner and the Brotherhood of Railroad
can only be granted if sufficient bases exist under the law, particularly after a Trainmen, governing rules, working conditions and rates of pay of yardmen.
showing of illegal dismissal. However, while the union members may thus be -Upon transfer of the Whiting yard switching to petitioner, respondents theretofore
entitled under the law to be reinstated or to receive separation pay, their employed by Standard Oil became employees of petitioner and members of the
expulsion from the union in accordance with the collective bargaining agreement Brotherhood. On July 24, 1934, company officials conferred with representatives of
renders the same impossible. the engineers, the firemen and the yardmen concerning terms of employment.
DISPOSITION: WHEREFORE, from the foregoing premises, the petition in G.R. No. -The Brotherhood acted for the yardmen. Apparently agreement was reached on
103560 ("Gold City Integrated Port Service Inc. v. National Labor Relations all matters except starting time but, as to that, versions of what transpired differ.
Commission, et al.") is GRANTED. One month salary for each year of service until EMPLOYEES and the Brotherhood have maintained that the 1927 agreement,
1985 is awarded to private respondents who were not union officers as separation including Article 6, became applicable to them upon the transfer. They say,
pay. The petition in G.R. No. 103599 ("Adelo Ebuna, et al. v. National Labor however, that they assented to a suspension of Article 6 for thirty days from July 27,
Relations Commission, et al.") is DISMISSED for lack of merit. No costs. SO 1934, to enable the company to work out adjustment to the plant's operations, and
ORDERED. accordingly it governed their relation with petitioner from August 26, 1934.
-The company has insisted that Article 6 did not become applicable to respondents
upon the transfer and that it made no agreement to apply Article 6, other than to
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follow it as closely as possible, prior to October 31, 1938, when it and the Article No. 6 of the Yardmen's Agreement * * * effective January 1, 1927, and
Brotherhood eventually agreed to place Whiting yard crews on fixed starting time applicable to Whiting (Standard Oil Company) Yardmen, July 27, 1934, from dates of
under circumstances to be noted. August 27, 1934, until November 14, 1938, inclusive.'
- The carrier continued to follow the former practice, although departures from the -The submission not only maintained the applicability of Article 6 and accrual of the
schedule were reduced, as it claims, in conformity with the oral undertaking to individual claims asserted. It also maintained that the settlement of October 31,
observe it as far as possible. The work went on without interruption. But numerous 1938, was effective only to fix the starting time for the future and had no effect to
complaints on account of departures were made through local officers of the waive or determine individual claims for penalty damages accrued prior to the
Brotherhood. Time slips were filed by the employees. Frequent negotiations took settlement.
place. None however resulted in a settlement prior to October 31, 1938. -The carrier's submission reiterated its position in Case No. 3537. It also relied upon
-In this state of affairs, respondents authorized the Brotherhood to file complaint the settlement as precluding later assertion of any claim, individual or collective,
with the National Railroad Adjustment Board for violation of Article 6. This was based upon occurrences prior to the date of the settlement.
done on November 23, 1936. The 'statement of claim' was signed and filed by - Board: Under the procedure prescribed in case of deadlock, cf. § 3, First (l), a
Williams, chairman of the general grievance committee. It asserted that the carrier, referee was called in. The award was made by the First Division on September 6,
having 'placed the employees under the agreement of the yardmen,' had 'failed to 1940. It sustained the Board's jurisdiction, found that 'the parties to said dispute
put into effect the starting time provisions' o Article 6, and denied that violation were given due notice of hearing thereon,' and held that 'the evidence shows that
was justified either because the carrier had agreed with the Engineers to follow the the parties to the agreement disposed of the claim here made by the letter of
formerly prevailing practice or by the carrier's claim that the work could be done in carrier dated October 28, 1938, accepted by employees October 31, 1938.'
no other way. The submission was intended to secure compliance. There was no Accordingly the claim was 'denied per findings.'
prayer for money damages. Petitioner maintained that Article 6 was not applicable. -DC: no issue; immaterial if the Union or its officers had specific authority to submit
-NATIONAL RAILROAD ADJUSTMENT BOARD: docketed the claim as No. 3537, the employee’s individual claims for decision…
notified the carrier and the union that the case, with many others docketed at the CA: for employees
same time, was 'assumed to be complete,' and forwarded to each copies of the
other's submissions. ISSUES: WON Williams and Johnson had authority to release the employees’ claims,
- October 31, 1938: Williams and Johnson, secretary of the Brotherhood, two of the in lieu of the Brotherhood’s constitution which forbid union officials to release
grievance committee's three members, accepted an offer made by ER's president, individual claims or to submit them to the Board w/o specific authority granted by
Rogers, to settle the claim. The settlement took the form of a proposal, made in a individual members themselves.
letter by Rogers to Williams, to settle some 61 different claims, including 'Labor
Board Docket No. 3537—Starting time of switch engines in Whiting S. O. Yard.' 2 kinds of disputes discussion:
Williams and Johnson endorsed acceptance for the Brotherhood and the yardmen Disputes over grievances Disputes concerning the making of CBA
on the letter. On the day the settlement was concluded Rogers and Williams the prompt and orderly settlement of all the prompt and orderly settlement of all
advised the Board of it by letter and jointly requested that the case be withdrawn disputes concerning rates of pay, rules, disputes growing out of grievances or
from the docket, which accordingly was done. or working conditions out of the interpretation or application
-Notwithstanding the settlement, a further dispute arose. In March, 1939, the of agreements covering rates of pay,
Brotherhood, through Williams, requested the carrier to furnish a complete list of rules, or working conditions
crews in the Whiting yard started at times other than those fixed by Article 6 from contemplates the existence of a arise where there is no such agreement
August 27, 1934, to November 15, 1938, when the settlement became effective. collective agreement already concluded or where it is sought to change the
The company declined to furnish the list, stating it was at a loss to understand the or, at any rate, a situation in which no terms of one, and therefore the issue is
reason for the request in view of the settlement. effort is made to bring about a formal not whether an existing agreement
-The upshot of the dispute was the filing of another claim with the Board, Docket change in terms or to create a new one. controls the controversy. They look to
No. 7324, on May 18, 1939, by Williams, acting for the Brotherhood. This The dispute relates either to the the acquisition of rights for the future,
submission was 'for one day's pay at time and one-half for each foreman and each meaning or proper application of a not to assertion of rights claimed to
helper for each day they were required to work in yard service in the Whiting particular provision with reference to a have vested in the past.
(Standard Oil Company) Yard, in violation of the fixed starting time provided for in
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specific situation or to an omitted case. of decision.
the claim is founded upon some incident
of the employment relation, or asserted On power of collective agent to act in behalf of employees:
one, independent of those covered by -applicable statute does not expressly provide that the bargaining agent can also
the collective agreement, e.g., claims on represent the employees in Minor disputes – only in Major disputes
account of personal injuries. In either -If the collective agent has exclusive power to settle grievance by agreements, a
case the claim is to rights accrued, not strong inference, though not necessarily conclusive, would follow for its exclusive
merely to have new ones created for the power to represent the aggrieved employee before the Board. The converse also
future. would be true.
Minor disputes: affect the smaller Major disputes? : present the large -HERE: NO POWER or else the aggrieved employee's rights of individual action are
differences which inevitably appear in issues about which strikes ordinarily limited to rights of hearing before the union and possibly also by the carrier.
the carrying out of major agreements arise with the consequent interruptions - to adopt such a view of the statute's effects, in so far as it would deprive the
and policies or arise incidentally in the of traffic the Act sought to avoid. aggrieved employee of effective voice in any settlement and of individual hearing
course of an employment. They Because they more often involve those before the Board, would be contrary to the clear import of its provisions and to its
represent specific maladjustments of a consequences and because they seek to policy.
detailed or individual quality. They create rather than to enforce -Individual employee preserves right to confer individually with ER of his grievances.
seldom produce strikes, though in contractual rights, they have been left Rights of conference are not identical with rights of settlement. But the purpose of
exaggerated instances they may do so. for settlement entirely to the processes conference and the duty to treat is to bring about agreement. The right and the
of noncompulsory adjustment. obligation to share in the negotiations are relevant to their aim. Conceivably the
Negotiation and conference first, BUT Negotiation and conference first, BUT statute might confer the right to participate in the negotiations, that is, to be heard
then undergo process under the local then mediation under National before any agreement is concluded, either upon the collective agent or upon the
adjustment boards. Another tribunal of Mediation Board – acceptance/rejection aggrieved employee or employees, at the same time conferring upon the other the
very different character is established of arbitration – then to possible final voice in determining the terms of the settlement. This is, in effect, the position
with 'jurisdiction' to determine presidential intervention to secure taken by each of the parties in this case. But they differ concerning where the final
grievances and make awards concerning adjustment say has been vested. COURT RULES IFO of INDIVIDUAL EMPLOYEE!
them. Each party to the dispute may -traditional voluntary processes of -His rights, to share in the negotiations, to be heard before the Board, to have
submit it for decision, w ether or not the negotiation, mediation, voluntary notice, and to bring the enforcement suit, would become rights more of shadow
other is willing, provided he has himself arbitration and conciliation than of substance if the union, by coming to agreement with the carrier, could
discharged the initial duty of foreclose his claim altogether at the threshold of the statutory procedure. This
negotiation. § 3, First (i). Rights of would be true in any case where the employee's ideas of appropriate settlement
notice, hearing, and participation or might differ from the union's. But the drastic effects in curtailment of his preexisting
representation are given. § 3, First (j). In rights to act in such matters for his own protection would be most obvious in two
some instances judicial review and types of cases; one, where the grievance arises from incidents of the employment
enforcement of awards are expressly not covered by a collective agreement, in which presumabl the collective interest
provided or are contemplated. § 3, First would be affected only remotely, if at all; the other, where the interest of an
(p); cf. § 3, First (m). When this is not employee not a member of the union and the collective interest, or that of the
done, the Act purports to make the union itself, are opposed or hostile. That the statute does not purport to
Board's decisions 'final and binding.' discriminate between these and other cases furnishes strong support for believing
The Adjustment Board was created to its purpose was not to vest final and exclusive power of settlement in the collective
remove the settlement of grievances agent.
from this stagnating process and bring -An award to affect the employee's rights, therefore, more must be shown than
them within a general and inclusive plan that the collective agent appeared and purported to act for him. It must appear that
in some legally sufficient way he authorized it to act in his behalf.
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-To settle for the future alone, without reference to or effect upon the past, is in not only for this reason but also because no notice of the proceeding was given to
fact to bargain collectively, that is, to make a collective agreement. That authority them.
is conferred independently of the power to deal with grievances, as part of the
power to contract 'concerning rates of pay, rules, or working conditions.' It SO ISSUES: whether respondents assented, in legal effect, to the final settlement of
includes the power to make a new agreement settling for the future a dispute their claims by the union or to exclusive representation by it in any of the following
concerning the coverage or meaning of a pre-existing collective agreement. For the ways: (1) by making complaints through local union officials; (2) by authorizing the
collective bargaining power is not exhausted by being once exercised; it covers Brotherhood to submit the complaint in Docket No. 3537; (3) by virtue of the
changing the terms of an existing agreement as well as making one in the first place. Brotherhood's regulations; (4) by virtue of the collective agreement.
-HERE: The Brotherhood had power, therefore, as collective agent to make an -HELD: The collective agreement could not be effective to deprive the employees of
agreement with the carrier, effective for the future only, to settle the question of their individual rights. Otherwise those rights would be brought within the
starting time, and that power was derived from the Act itself. From the fact that the collective bargaining power by a mere exercise of that power, contrary to the
Brotherhood occupied the position of collective bargaining agent and as such had purport and effect of the Act as excepting them from its scope and reserving them
power to deal for the future, therefore, petitioner was not entitled to make any to the individuals aggrieved. In view of that reservation the Act clearly does not
assumption concerning its authority to settle the claims accrued for the past or to contemplate that the right saved may be nullified merely by agreement between
represent the claimants exclusively in proceedings before the Board. Accordingly for the carrier and the union.
the union to act in their behalf with conclusive effect, authorization by them over -Nor can we say as a matter of law that the mere making of complaints through
and above any authority given by the statute was essential. local Brotherhood officials amounted to final authorization to the union to settle
the claims or represent the employees before the Board. Neither the statute nor
WON the union was actually authorized to file complaints before the board? the union's regulations purported to give these effects to that conduct. The time
-ER alleged that the employees made out time slips and filed many complaints slips apparently were filed by the employees themselves. The record shows only
w/ER’s local officers of the Union on account of violation of Art 6 of CBA. Employees the general fact that complaints concerning departures were made through local
admit having authorized the union at a meeting of their local lodge to file the officials. More than this would be required to disclose unequivocal intention to
complaint in Docket No. 3537 and that this complaint was filed in full compliance surrender the individual's right to participate in the settlement and to give the
with the Brotherhood's constitution and rules. The settlement of October, 1938, union final voice in making it together with exclusive power to represent him
and the consequent withdrawal of the claim in Docket No. 3537 were made by the before the Board. The making of complaints in this manner was only preliminary
same official, Williams, whom respondents had authorized to file the claim and with to negotiation and equivocal at the most.
whom, in effect, both the collective agreement and the Brotherhood's regulations -Nor can we say, in the present state of the record, that the union's regulations
required petitioner to deal concerning the matter. Moreover, the complaint in unequivocally authorized the general grievance committee or its chairman either to
Docket No. 7324, filed in May, 1939, was filed by Williams and in the same manner settle the claims or to act as exclusive representative before the Board. The parties
as the complaint in Docket No. 3537. rely upon apparently conflicting provisions or, if they are not actually in conflict,
-but even w/ this, EEs allege that the union officers were not allowed by the Union’s then upon different ones, the applicability of some of which is in dispute. Thus
constitution to revise or change a general wage schedule or agreement concerning respondents rely upon Rule 3, which forbids change in existing agreements without
rates of pay, nor working conditions, unless authorized to do so by a majority vote the required vote of local lodges or system membership, and petitioner says the
of the lodges, or by a majority vote of the membership in the system'; that claims of rule is not applicable to the dispute in this case. Whether or not the rule is
individual members for back compensation could not be released without specific applicable is a question of fact to be determined in the light of whatever evidence
authority given individually; that no such authority was given; and that the carrier may be presented to sustain the one view or the other. Conceivably it may be
had knowledge of these limitations. They further allege that Williams and Johnson intended to apply only where no grievance is involved or to the settlement of
failed to notify them of the settlement, as the by-laws required; and deny that they grievances and other disputes as well. But we cannot say, in the absence of further
knew of the settlement, the proceedings in Docket 7324 or the award until after the light than is now available, that on its face the rule bears only the one construction
award was made, when they promptly repudiated it. They say accordingly that or the other.
Williams acted without authority from them directly or through the Brotherhood's
regulations in submitting and presenting the claims; and that the award is invalid

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IV. COLLECTIVE BARGAINING Mr. Escreza (the real union) and the 2nd represented by Mr. Diaz. Since that
represented by Mr. Diaz is represented only a faction of the original union, it was
A. NATURE AND PURPOSE not included. During the 2 pre-election conferences, the two factions has not
decided on how its name would be placed in the ballot. Later, Mr. Diaz appeared
under a new union – PSSLU. When the notice of cert. election w/ sample ballot was
UNITED EMPLOYEES UNION OF GELMART INDUSTRIES PHILIPPINES V. posted, they still had not decided how they should be called. Only after the elction
NORIEL, 67 SCRA 267 (1975) notice was already posted did the parties decided how they should be represented
SUMMARY: Union wants to nullify the certification election held due to the in the ballots.
allegation that its name was misspelled in the ballot, thus the other union won by
landslide. Court held that one needs competent and credible proof – not general ISSUE: WON the certification election can be nullified?
allegation of duress – to invalidate a certification election. Highlighted on the HELD: NO
importance of Certification election. Importance of CB merely introduction to 1. The institution of collective bargaining is, to recall Cox, a prime manifestation of
Certification election. industrial democracy at work. The two parties to the relationship, labor and
management, make their own rules by coming to terms. That is to govern
FACTS: themselves in matters that really count. As labor, however, is composed of a
-United Employees of Gelmart Industries and the respondent union, National Union number of individuals, it is indispensable that they be represented by a labor
of Garments, Textiles, Cordage and Allied Workers of the Philippines, allegedly organization of their choice. Thus may be discerned how crucial is a certification
agreed in the pre-election conference conducted by the BLR that United Employees election.
would be listed in the ballot as United Employees Union of Gelmart Industries  Standard Cigarette Workers' Union v. Court of Industrial Relations (JBL
Philippines (UEUGIP). However, in the notice of certification election, UEUGIP was Reyes): "a complaint for unfair labor practice may be considered a
deleted, replaced by “a non-contending party, namely, Philippine Social Security prejudicial question in a proceeding for certification election when it is
Labor Union (PSSLU), which, although an existing labor federation ... has nothing to charged therein that one or more labor unions participating in the election
do and has no interest or right of participation [therein]." This was the same in the are being aided, or are controlled, by the company or employer. The
ballot. reason is that the certification election may lead to the selection of an
-UEUGIP did protest, but on the ground of the alleged electioneering of nuns and a employer-dominated or company union as the employees' bargaining
priest as observers or inspectors on behalf of the respondent union. representative, and when the court finds that said union is employer-
-Respondent union won – 3,970 or 63% of the votes. UEUGIP garnered only 4.5% of dominated in the unfair labor practice case, the union selected would be
the votes (291). On alleged violation of procedural due process, UEUGIP filed this decertified and the whole election proceedings would be rendered useless
action. and nugatory." 
-election turnout (according to respondent union): there were 11 precincts, each of  LVN Pictures v. Philippine Musicians Guild (J. Concepcion): important "to
which was presided over by a med-arbiter of the Bureau, as chairman, and another insure the fair and free choice of bargaining representatives by
representation officer of the Bureau; there was also created a central election employees." There must be such an opportunity to determine which labor
committee composed of four top personnel of the Bureau for optimum supervision; organization shall act on their behalf.
3. There were some 8,900 eligible voters out of about 10,000 employees of the - It is precisely because respect must be accorded to the will of labor thus
company; out of the 8,900 eligible voters, duly agreed upon by all the parties and ascertained that a general allegation of duress is not sufficient to invalidate a
approved by the Bureau, 6,309 or 79.7% voted; out of the 6,309 eligible voters certification election; it must be shown by competent and credible proof. That is to
cast,3970 or 63% went to GATCORD, [with UEUGIP placing] only fifth with a measly give substance to the principle of majority rule, one of the basic concepts of a
291 votes or barely 4.5% of the total number of votes cast. It may be noted that democratic polity. 
even if the votes of all seven losing unions[were added], their total would only be  Federation of the United Workers Organization v. Court of Industrial
2,057, which is still 1,823 votes short of GATCORD's 2,970 votes. Relations:  "The slightest doubt cannot therefore be entertained that what
-respondent union also alleges that the petitioner actually does not represent the possesses significance in a petition for certification is that through such a
majority of the employees: there were actually 2 UEUGIP. 1 st was represented by device the employees are given the opportunity to make known who shall

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have the right to represent them. What is equally important is that not efforts to negotiate shown by the ER. As to the 2nd allegation, it appears that
only some but all of them should have the right to do so."  another union - International Labor and Marine Union of the Philippines – claimed
-HERE: the grievance spoken of is more fancied than real, the assertion of confusion to represent majority of the workers in the company so the ER wanted to make sure
and demoralization based on conjecture rather than reality. The mode and manner that the union had capacity to be the authorized bargaining unit. As to the third
in which Antonio Diaz demonstrated how militant and articulate he could be in contention, it was found that other active members of the union were not
presenting his side of the controversy could hardly argue for the accuracy of his terminated so the termination of Briones could not have been based on union
claim that his men did lose heart by what appeared at the most to be an honest activities.
mistake, if it could be characterized as one. Certainly then, the accusation that
there was abuse of discretion, much less a grave one, falls to the ground. FACTS:
-ON THE PARTICIPATION OF NUNS AND A PRIEST: -Union filed ULP vs. Tres Hermanas Restaurant (rep by Felisa Herrera) on the
 Victoriano v. Elizalde Rope Workers' Union(Justice Zaldivar): the privacy following allegations:
of religious freedom, to which contractual rights, even on labor matters,  Tres Hermanas made a counter-proposal to the Union, that they would
must yield, thus removing any taint of nullity from the amendment to the bargain if the Union would be a company union
Industrial Peace Act, which would allow exemption from a closed shop on  Martin Briones, an employee was separated from the service because he
the part of employees, members of a given religious sect prohibiting its organized and advised the complaining union
devotees from affiliating with any labor organization. -Tres Hermanas Restaurant denied the allegations
 Basa v. Federacion Obrera de la Industria Tabaquera: emphasized that -Judge Tabigne: exonerated Tres Hermanas
one's religious convictions may be the basis for an employee joining or -CIR en banc: split decision
refusing to join a labor union. Certainly, the wide latitude accorded -subject to review
religious groups in the exercise of their constitutional freedom would  
caution against reliance on such aground to invalidate a certification ISSUES:
election. It thus appears that such an approach is reflected in the attitude 1. WON Tres Hermanas refused to bargain cllectively
adopted by petitioner, which in effect amounts to an abandonment of such 2. WON Tres Hermanas interfered, coerced, or restrained their employees in the
a possible ground of protest, not at all lodged with this Court but merely exercise of their right to join the complaining union
mentioned in its recital of background facts. 3. WON the dismissal of Martin Briones was due to the concern of Mrs. Herrera for
DISPOSITION: WHEREFORE, the petition for certiorari and prohibition is dismissed her life
for lack of merit. The restraining order issued by this Court is lifted. This decision is  
immediately executory. No costs. HELD
1. NO
-in the letter sent by the union to Tres Hermanas, it contained marks opposite each
NATIONAL UNION OF RESTAURANT WORKERS V. CIR, 10 SCRA 843 demand by the union (check for demands to which Mrs. Herrera was agreeable,
(1964) Cross for disapproved demands, and circle for those left for discussion on some
future time)
SUMMARY: NURW filed a complaint for ULP against Tres Hermanas Restaurant, -markings were made during the discussion of the demands in the meeting at Tres
specifically against Mrs. Felisa Herrera, for 3 grounds: (1)refusal to bargain with Hermanas Restaurant.
them, (2) that NURW be a company union first before the ER entered CBA with -the meeting where the markings were made was called by Tres Hermanas precisely
them; (3) that ER terminated one MARTIN BRIONES for union activities. Court found in view of the letter sent by the union
that the said allegations are baseless. On first allegation, it was found that upon the -Tres Hermanas allegedly refused to bargain with the union unless they became a
demand to negotiate by the union, the ERs called a meeting with them in a company union but it was shown in the answer of the respondents that they were
restaurant in QC and negotiated the demands of the Union, making some markings of the impression that before a union could have the capacity to bargain with them,
on the proposals ( if agreeable;  if not agreeable;  if open for discussions). This they must first be certified by the Court of Industrial Relations as the duly
fact shows that the ER was agreeable to negotiations. The fact that it did not give a authorized bargaining unit (in another case before CIR, INTERNATIONAL LABOR AND
reply to its demands is merely procedural and could not be deemed an ULP with the
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MARINE UNION OF THE PHILIPPINES claimed to represent the majority of the ER guilty. NLRC held for the Union so ER contests it. Court held that ER is guilty of
employees of Tres Hermanas (yeah right, "marine" union in a restaurant) ULP for refusal to bargain with the union, primarily due to the failure to provide
  counterproposals to the proposals of the union. As to the nature and purpose of
2. NO collective bargaining, court held that it is a mutual responsibility of the ER and the
-to prove this, the union showed a document which contains the alleged counter- union, characterized as a legal obligation. Note that as penalty to the ER, the court
proposals tendered to the complainant union. This document contained certain imposed the proposals of the Union as the terms of the CBA. Note also that there
notations which were made by one Ernesto Tan which are indeed derogatory and was no preexisting CBA here.
which were allegedly made by him upon instructions of Mrs. Herrera, specifically
the one which stated that Herrera would be willing to recognize the union "if union FACTS
would be willing to recognize the union". - Pambansang Kilusan ng Paggawa (Kilusan), a legitimate labor federation, won cert
-Tres Hermanas, however, denied that they ever authorized Ernesto Tan to make election and was certified by the BLR as the sole and exclusive bargaining agent of
such notation (merely a bookkeeper whose duties were confined to the keeping the rank-and-file employees of Sweden Ice Cream Plant (Company).
and examination of their books of accounts and sales invoices.  - Kilusan then gave the Company two copies of its proposed CBA. It requested the
-Ernesto Tan was not even invited to the meeting. He also made those notations on Company for its counter proposals. There was no response from Company. Kilusan
his own account and initiative again requested the Company for collective bargaining negotiations and for the
  Company to furnish them with its counter proposals. Both requests were ignored
3. NO and remained unacted upon by the Company.
-It appears from Martin Briones himself that he is not the only one who organized  -Kilusan on Feb 14, 1979, filed a "Notice of Strike", with the BLR on ground of
the complaining union but together with other employees who were more active unresolved economic issues in collective bargaining.
than himself. Yet, these employees were never touched and continued to be  -Conciliation proceedings followed but all attempts towards an amicable
employed in respondent's resturant. settlement failed. BLR certified the case to the NLRC for compulsory arbitration. The
-If it was indeed due to union activities, then the more active union members case was reset/postponed several times (mostly Company’s “request”).
should have been dismissed earlier than Briones  -Then in the scheduled hearing on June 4, 1979, the Company's representative, Mr.
  Ching, who was supposed to be examined, failed to appear. The Company’s counsel
Disposition. WHEREFORE, the decision appealed from is affirmed. No costs. requested for another postponement. The labor arbiter denied. He ruled that the
Company has waived its right to present further evidence and, therefore,
considered the case submitted for resolution.
PHILAM MGT. CO. INC V. PHILAM EMPLOYEES ASSOCIATION (1973)  - NLRC held: Sweden Ice Cream guilty of unjustified refusal to bargain. The draft
proposal for a CBA was found to be reasonable under the premises, and declared to
Summary: Not much facts to talk about. The point of this case being assigned is that
be the collective agreement w/c should govern the relationship between the
the issue of minimum wage is not a bargainable issue. “Neither party in this
parties.
particular case is at liberty to agree to an amount lower than that the law requires
 -Petitioner: …its right to procedural due process has been violated when it was
as to the wages to be paid. To that extent, there is no room for offer and counter
precluded from presenting further evidence in support of its stand and when its
offer. The employer has an obligation to meet. His duty is plain. He must pay what
request for further postponement was denied.
he has to.”
…that the NLRC’s finding of unfair labor practice for refusal to bargain is not
supported by law and the evidence considering that it was only on May 24. 1979
when the Union furnished them with a copy of the proposed CBA and it was only
KIOK LOY V. NLRC (1986)
then that they came to know of the Union's demands; … that CBA approved and
Summary: The certified sole and exclusive bargaining representative union offered adopted by the NLRC is unreasonable and lacks legal basis.
to bargain but was just ignored by the ER (no counterproposals given). The union  
filed a Notice of Strike based on unresolved economic issues in the Collective ISSUE/S
Bargaining.Conciliation proceedings were delayed on account of the ER, and the 1. WON company’s right to due process has been violated
labor arbiter finally denied the request for postponement by the ER and considered 2. WON company is guilty of ULP
32 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
3. WON CBA is reasonable Company's stalled the negotiation by a series of postponements, non-appearance at
  the hearing conducted
HELD  -Herald Delivery Carriers Union (PAFLU) vs. Herald Publications: "unfair labor
1) NO practice is committed when it is shown that the respondent employer, after having
-Considering the various postponements granted in its behalf, the claimed denial of been served with a written bargaining proposal by the petitioning Union, did not
due process appeared totally bereft of any legal and factual support. As herein even bother to submit an answer or reply to the said proposal. This doctrine was
earlier stated, petitioner had not even honored respondent union with any reply to reiterated in Bradman vs. CIR: "while the law does not compel the parties to reach
the latter's successive letters, all geared towards bringing the Company to the an agreement, it does contemplate that both parties will approach the negotiation
bargaining table.. Certainly, the moves and overall behavior of company were in with an open mind and make a reasonable effort to reach a common ground of
total derogation of the policy enshrined in the Labor Code which is aimed towards agreement".
expediting settlement of economic disputes. Hence, the Court is not prepared to  
affix its imprimatur to such an illegal scheme and dubious maneuvers. 3) YES
  - The instant case being a certified one, it must be resolved by the NLRC pursuant to
2) YES the mandate of P.D. 873, as amended, which authorizes the said body to determine
 - Article 249, par. (g) LC makes it an unfair labor practice for an employer to refuse the reasonableness of the terms and conditions of employment embodied in any
"to meet and convene promptly and expeditiously in good faith for the purpose of CBA. To that extent, utmost deference to its findings of reasonableness of any
negotiating an agreement with respect to wages, hours of work, and all other terms Collective Bargaining Agreement as the governing agreement by the employees and
and conditions of employment including proposals for adjusting any grievance or management must be accorded due respect by this Court.
question arising under such an agreement and executing a contract incorporating
such agreement, if requested by either party."  Disposition Petition dismissed.
 -Collective bargaining which is defined as negotiations towards a collective  
agreement, is designed to stabilize the relation between labor and management
and to create a climate of sound and stable industrial peace. It is a mutual DIVINE WORD UNIVERSITY V. SOLE (1992)
responsibility of the employer and the Union and is characterized as a legal
Summary: The Certified Bargaining Representative initially offered its proposed CBA
obligation.
terms but unilaterally withdrawn it. After 3 years, it again offered to negotiate but
 - While it is a mutual obligation of the parties to bargain, the employer, however, is
was ignored by the ER. They filed a notice to strike, the dispute was assumed by the
not under any legal duty to initiate contract negotiation.
SOLE, the parties entered into an agreement that they would negotiate but an hour
 -The mechanics of collective bargaining is set in motion only when the ff.
before that, a petition for certification election was filed by the ER. Court upheld the
jurisdictional preconditions are present, namely, (1) possession of the status of
decision of SOLE that the certification election should not be held, not because
majority representation of the employees' representative in accordance with any of
there was a deadlock because there was really none, but because of the bad faith
the means of selection or designation provided for by the LC; (2) proof of majority
on the part of the ER. The court also upheld the unilateral imposition of the CBA
representation; and (3) a demand to bargain under Art 251, par. (a) of the Labor
terms to the ER due to the fault of the ER. Note that there was no preexisting CBA
Code . . . all of which preconditions are undisputedly present in the instant case.
here. Sir said that in Kiok Loy and in Divine Word, the ER closed.
 -From the over-all conduct of petitioner company, Kilusan has a valid cause to
complain against Company's attitude, the totality of which is indicative of the
 FACTS:
latter's disregard of, and failure to live up to, what is enjoined by the Labor Code ----
-Divine Word University Employees Union was certified as the sole and exclusive
to bargain in good faith.
bargaining agent of Divine Word University. Thus, they requested a preliminary
 -Company is GUILTY of unfair labor practice. (1) respondent Union was a duly
conference with the University. However, 2 days before the scheduled conference,
certified bargaining agent; (2) it made a definite request to bargain, accompanied
the union's vice-president wrote a letter to the university unilaterally withdrew the
with a copy of the proposed CBA, to the Company not only once but twice which
CBA proposals.
were left unanswered and unacted upon; and (3) the Company made no counter
-After almost 3 years after, the Union then affiliated with ALU requested a
proposal whatsoever all of which conclusively indicate lack of a sincere desire to
conference with the University for CBA negotiations. No response from the
negotiate. Even during the period of compulsory arbitration before the NLRC,
33 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
University so the Union sent a follow-up letter reiterating the request for a opposed forces; as, the deadlock of a jury or legislature.” The word is synonymous
conference. University still did not reply. with the word impasse which, within the meaning of the American federal labor
-So the Union filed w/ NCMB a Notice of Strike on the ground of bargaining laws, “presupposes reasonable effort at good faith bargaining which, despite noble
deadlock and ULP. To stop the strike, an agreement was entered into by the Union intentions, does not conclude in agreement between the parties.”
and the University wherein they agreed to have negotiations. -HERE: No deadlock so legally, can still grant petition for certification election: NO
-However, the University filed a petition for certification election before the said "REASONABLE EFFORT AND GOOD FAITH BARGAINING. Its indifferent attitude
agreement was entered into. Thus, when the Union submitted its proposals, they towards collective bargaining inevitably resulted in the failure of the parties to
were ignored by the University arrive at an agreement. As it was evident that unilateral moves were being
-after a marathon of conciliation conferences wherein nothing happened, SOLE undertaken only by the DWUEU-ALU, there was no “counteraction” of forces or an
exercised his powers under Art. 263(g) of LC and assumed jurisdiction over the labor impasse to speak of. While collective bargaining should be initiated by the union,
dispute. there is a corresponding responsibility on the part of the employer to respond in
-meanwhile, MedArb directed the conduct of certification elections which the union some manner to such acts.
sought to be enjoined - the SOLE granted it and enjoined the conduct of the -BF ON PART OF ER: an hour before the agreement between the ER and the Union
elections. was entered, the petition for certification of election was filed even with the ER
-SOLE, assuming jurisdiction over the disputes, resolved the issues in favor of the knowing that the Union was certified as the EBR of its employees
Union, saying that it was not proper to conduct a certification election, the failure  
to negotiate w/n 1 year from election being not a ground for the conduct of a 3. WON the SOLE committed grave abuse of discretion when it "unilaterally
certification election and that there existed a bargaining deadlock imposed" the provisions of the CBA as proposed by the union.
-SOLE also ordered the parties to continue with CBA negotiations but nothing NO.
happened…. The petitioner may not validly assert that its consent should be a primordial
-SOLE changed (from Drilon to Acting Secretary dela Serna) but the ruling was still consideration in the bargaining process. By its acts, no less than its inaction which
the same. For failure of the University to negotiate, the proposals of the Union were bespeak its insincerity, it has forfeited whatever rights it could have asserted as an
adopted employer. We, therefore, find it superfluous to discuss the two other contentions in
  its petition.
1. WON the SOLE correctly assumed jurisdiction over the dispute as one of
national interest? Disposition. WHEREFORE, the instant Petition is hereby DISMISSED for lack of merit.
YES. The nature of the business of the University demanded immediate and This Decision is immediately executory. Costs against the petitioner.
effective action on the part of the respondent public officials. Otherwise, not only
the contending parties in the dispute would be adversely affected but more
importantly, the studentry and their parents SAN JUAN DE LETRAN V. ASSOCIATION OF EMPLOYEES (2000)
 
Summary: The existing exclusive bargaining representative wanted to renegotiate
2. WON a petition for certification election could be refused in this case?
the terms of the remaining period of the CBA but Letran refused to do so, delaying
Legally no but cannot reward the ER for BF
the negotiation process by rescheduling the work of the president and by
-in the absence of a collective bargaining agreement, an employer who is requested
subsequently dismissing her. Letran also suspended the negotiations allegedly due
to bargain collectively may file a petition for certification election any time except
to a petition for certification election filed by another union, though outside the 60-
upon a clear showing that one of these two instances exists: (a) the petition is filed
day freedom period prior to the expiration of the CBA (which already expired 2
within one year from the date of issuance of a final certification election result or
years before the petition was filed). Court held that Letran committed ULP when it
(b) when a bargaining deadlock had been submitted to conciliation or arbitration or
failed to give counterproposal – BF bargaining. Also held that the petition for
had become the subject of a valid notice of strike or lockout.
certification election which was not filed during the freedom period does not give a
-A “deadlock” is defined as the “counteraction of things producing entire stoppage:
legitimate representation question which would necessitate the suspension of
a state of inaction or of neutralization caused by the opposition of persons or of
renegotiation with the Union. Also held that the dismissal of the Union president
factions (as in government or a voting body): standstill.” There is a deadlock when
was also ULP on the part of Letran.
there is a “complete blocking or stoppage resulting from the action of equal and
34 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
-Union lived up to this requisite by presenting its proposals to LETRAN. LETRAN on
FACTS: the other hand devised ways and means to prevent the negotiation.
-Union, through its president, initiated the renegotiation fort the last 2 years of the -Petitioner's utter lack of interest in bargaining with the union is obvious in its
CBA's 5 year lifetime. On the same year, Ambas was newly elected as president failure to make a timely reply to the proposals presented by the latter. More than a
-Ambas wanted to continue the renegotiation but LETRAN claimed that a CBA was month after the proposals were submitted by the union, petitioner still had not
already prepared. The said CBA was submitted for referendum by the union made any counter-proposals. This inaction on the part of petitioner prompted the
members but was rejected by the UNION union to file its second notice of strike on March 13, 1996. Petitioner could only
-LETRAN accused UNION of bargaining in BF offer a feeble explanation that the Board of Trustees had not yet convened to
LA: for LETRAN discuss the matter as its excuse for failing to file its reply.
NLRC: reversed for UNION -applied Kiok Loy: refusal to make a counter-propsal is an indication of BF
-UNION notified NCMB of intention to strike: -delaying tactics by LETRAN:
1. Non-compliance w/NLRC's order to delete Atty. Leynes's name as the 1. Days after the union submitted its proposals, LETRAN changed
union's counsel work schedule of the UNION PRESIDENT
2. Refusal to bargain 2. Two days after LETRAN and the UNION met to set the ground
-Parties eventually agreed to renegotiate the terms of the CBA. UNION submitted its rules for negotiation, LETRAN dismissed the union president for alleged
proposal to petitioner, which allegedly was submitted to the Board of Trustees of insubordination.
LETRAN. Meanwhile: 3. LETRAN now suspends the bargaining on the allegation that a new
1. Ambas was informed of the change of her work schedule, to which group of employees (ASSOCIATION OF CONCERNED EMPLOYEES OF
Ambas protested, requested that the issue be submitted to grievance COLLEGIO) has filed a petition for certification election
procedure -on suspension of negotiations on alleged petition for certification election:  In
2. Union filed notice to strike after LETRAN did not act upon the request of order to allow the employer to validly suspend the bargaining process there
the union must be a valid petition for certification election raising a legitimate
3. Union received LETRAN's letter dismissing Ambas for insubordination representation issue. Hence, the mere filing of a petition for certification
-renegotiation started again. But LETRAN stopped the negotiations on the allegation election does not ipso facto justify the suspension of negotiation by the
that a new group of employees filed a petition for certification election employer. 
-Union finally struck. Return to work order. Letran readmitted the striking …must also comply with LABOR CODE PROVISIONS
employees except AMBAS  A petition for certification election must be filed durign the 60-day
-NLRC: declared LETRAN guilty of ULP freedom period prior to the expiry of the CBA (contract bar rule). No
  petition should be filed after the lapse of the 60-day period
ISSUES  Old CBA extended for stability purposes
1. WON petitioner is guilty of ULP by refusing to bargain w/ the union when it …here no clear reprsentation issue, the petition being filed 2 years after the
unilaterally suspended the ongoing negotiations for a new CBA upon mere lifetime of the previous CBA.
information that a petition for certification has been filed by another …the same petition was also dismissed by SOLE, upheld by SC
legitimate labor organization  
2. WON the termination of union president amounts to an interference of 2. YES
employees' right to self-organization -While we recognize the right of the employer to terminate the services of an
  employee for a just or authorized cause, nevertheless, the dismissal of employees
HELD must be made within the parameters of law and pursuant to the tenets of equity
1. YES and fair play.The employer's right to terminate the services of an employee for just
-Art 252 MEANING OF DUTY TO BARGAIN COLLECTIVELY or authorized cause must be exercised in good faith. More importantly, it must not
-Requirement on both parties of the performance of the mutual obligation to meet amount to interfering with, restraining or coercing employees in the exercise of
and convene promptly and expeditiously in GF for the purpose of negotiation an their right to self-organization because it would amount to, as in this case, unlawful
agreement labor practice under Article 248 of the Labor Code.
35 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
-The factual backdrop of the termination of Ms. Ambas leads us to no other Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary,
conclusion that she was dismissed in order to strip the union of a leader who would pursuant to the selection procedure agreed upon in the Collective Bargaining
fight for the right of her co-workers at the bargaining table. Ms. Ambas, at the time Agreement, which shall act with the same force and effect as if the Arbitrator or
of her dismissal, had been working for the petitioner for ten (10) years already. In panel of Arbitrators has been selected by the parties as described above.
fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years
her working schedule was from Monday to Friday. However, things began to change MANILA FASHIONS INC. V. NLRC (1996)
when she was elected as union president and when she started negotiating for a
Summary: ER and Union entered into an agreement to condone the
new CBA. Thus, it was when she was the union president and during the period of
implementation of Wage Orders in lieu of the alleged losses suffered by the ER. EEs
tense and difficult negotiations when her work schedule was altered from Mondays
now assail the noncompliance with the Wage Orders. Court held that the parties
to Fridays to Tuesdays to Saturdays. When she did not budge, although her
cannot negotiate on the nonimplementation of wage orders, it being contrary to
schedule was changed, she was outrightly dismissed for alleged insubordination.
law.
 
Disposition. WHEREFORE, premises considered, the petition is DENIED for lack of
FACTS:
merit. SO ORDERED.
-The workers of Manila Fashions Inc. went on strike. Manila Fashions Inc. (ER)
allegedly suffered losses so the workers allegedly sent a notice to them condoning
B. BARGAINABLE ISSUES the implementation of Wage Order Increase, as contained in Section 3, Article 8 of
ARTICLE 252. Meaning of duty to bargain collectively. - The duty to bargain the 1992 CBA (though the Wage Order covered were only Wage Order No. NCR-02
collectively means the performance of a mutual obligation to meet and convene and 02-A)
promptly and expeditiously in good faith for the purpose of negotiating an -For the nonpayment of the corresponding increase in wage, as ordered by the said
agreement with respect to wages, hours of work and all other terms and conditions wage orders, the employees as represented by the union, filed before the Labor
of employment including proposals for adjusting any grievances or questions arising Arbiter a complaint for noncompliance of the wage orders. They did admit the
under such agreement and executing a contract incorporating such agreements if existence of the provision in the CBA but denied the validity of the said provision,
requested by either party but such duty does not compel any party to agree to a on the ground that it was not reached after due consultation with the members
proposal or to make any concession. LA: CBA provision VOID, not enforceable, it being contrary to law.
…only the Tripartite Wge Productivity Board of DOLE could approve the exemption
ARTICLE 260. Grievance machinery and voluntary arbitration. - The parties to a of an establishment from coverage of the Wage Order
Collective Bargaining Agreement shall include therein provisions that will ensure the NLRC: affirmed LA
mutual observance of its terms and conditions. They shall establish a machinery for  
the adjustment and resolution of grievances arising from the interpretation or ISSUE
implementation of their Collective Bargaining Agreement and those arising from the Was the condonation of the Wage Order contained in the CBA valid?
interpretation or enforcement of company personnel policies.
HELD
All grievances submitted to the grievance machinery which are not settled within NO. Parties to a CBA may not by themselves, set a wage lower than the minimum
seven (7) calendar days from the date of its submission shall automatically be wage. To do so would render nugatory the purpose of a wage exemption, not to
referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. mention the possibility that employees may be unwittingly put in a position to
accept a lower wage. 
For this purpose, parties to a Collective Bargaining Agreement shall name and -A Collective Bargaining Agreement refers to the negotiated contract between a
designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or legitimate labor organization and the employer concerning wages, hours of work
include in the agreement a procedure for the selection of such Voluntary Arbitrator and all other terms and conditions of employment in a bargaining unit, including
or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary mandatory provisions for grievances and arbitration 
Arbitrators duly accredited by the Board. In case the parties fail to select a machineries. 
Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the

36 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
-As in all other contracts, the parties in a CBA may establish such stipulations, WON the BANK dismissed the employees for cause, and not for union activities as
clauses, terms and conditions as they may deem convenient provided they are not they wrote the letter in their individual capacities and not related to their right to
contrary to law, morals, good customs, public order or public policy.  self-organization?
-HOWEVER, Section 3, Art. VIII, of the CBA is a void provision because by agreeing  
to condone the implementation of the Wage Order the parties thereby contravened HELD
its mandate on wage increase of P12.00 effective 8 January 1991. NO. Still ULP!
-Also, as stated by the Labor Arbiter, it is only the Tripartite Wage Productivity -Definition of INTERFERENCE: interference with which constitutes an unfair labor
Board of the DOLE that could approve exemption of an establishment from practice under section 4(a)(1). This is the view of some members of this Court. For,
coverage of a Wage Order. If petitioner is a financially distressed company then it as has been aptly stated, the joining in protests or demands, even by a small group
should have applied for a wage exemption so that it could meet its labor costs of employees, if in furtherance of their interests as such, is a concerted activity
without endangering its viability or its very existence upon which both management protected by the Industrial Peace Act. It is not necessary that union activity be
and labor depend for a living.  involved or that collective bargaining be contemplated.
Disposition. WHEREFORE, the petition is DISMISSED. The order of -Here, even when the employees acted in their individual capacities, a proper
respondent National Labor Relations Commission which affirmed the construction is that the employees shall have the right to engage in concerted
decision of the Labor Arbiter awarding the total amount of P900,012.00 to the activities for their mutual aid or protection even though no union activity be
complainants is likewise AFFIRMED. SO ORDERED. involved, for collective bargaining be contemplated.
-As to grievance procedure: Some other members of this Court believe, without
REPUBLIC SAVINGS BANK V. CIR (1967) necessarily expressing approval of the way the respondents expressed their
Summary: The employees of the bank wrote to the President of the bank, asking grievances, that what the Bank should have done was to refer the letter-charge to
that he resign on grounds of immorality, nepotism, favoritism as to promotions, the grievance committee. This was its duty, failing which it committed an unfair
toleration of dishonesty, and other accusations. The employees were dismissed, labor practice under section 4(a) (6). For collective bargaining does not end with the
thus they filed a complaint for illegal dismissal. Court held in their favor, with the execution of an agreement. It is a continuous process. The duty to bargain imposes
bank failing to resort to grievance machinery. on the parties during the term of their agreement the mutual obligation "to meet
and confer promptly and expeditiously and in good faith . . . for the purpose of
FACTS adjusting any grievances or question arising under such agreement" and a violation
-8 employees of the bank wrote to the President of the bank, demanding his of this obligation is, by section 4 (a) (6) and (b) (3) an unfair labor practice.
resignation on the grounds of immorality, nepotism in appointment and favoritism, -   Collective bargaining . . . normally takes the form of negotiations when major
as well as discrimination in the promotion of bank employees. Copies of the said conditions of employment to be written into an agreement are under consideration
letter were given to the Chairman of the Board of the Bank and the Governor of and of grievance committee meetings and arbitration when questions arising in the
Central Bank administration of an agreement are at stake.
-based on the alleged "patently libelous letter", the said employees were - Instead of stifling criticism, the Bank should have allowed the respondents to air
discharged. their grievances. Good faith bargaining required of the Bank an open mind and a
-Employees filed a case for ULP before the CIR, alleging that the dismissal was due sincere desire to negotiate over grievances. The grievance committee, created in
to union activities the collective bargaining agreements, would have been an appropriate forum for
-ER denied, moved for dismissal such negotiation. Indeed, the grievance procedure is a part of the continuous
CIR: For the employees: Section 4 (a) applies to cases in which an employee is process of collective bargaining. It is intended to promote, as it were, a friendly
dismissed or discriminated against for having filed "any charges against his dialogue between labor and management as a means of maintaining industrial
employer" peace.
  Disposition. ACCORDINGLY, the decision of July 4, 1962 and the resolution of
ISSUE August 9, 1962 of the Court of Industrial Relations are affirmed, at petitioner's cost.

NESTLE PHIL. INC V. NLRC

37 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
Summary: There was a bargaining deadlock between the Union and Nestle. One of medical and hospitalization plans, health and dental services, vacation, sick & other
the issues was with regard the Retirement plan. Nestle argued that since the leaves with pay) are non-contributory benefits. Since the retirement plan has been
retirement plan is non-contributory, it should not be within the ambit of the an integral part of the CBA since 1972, the Union's demand to increase the benefits
negotiations. Court held that even if the retirement plan was not contributory, most due the employees under said plan is a valid CBA issue.
of the economic benefits negotiated in the CBA negotiations were also - The improvement of the existing Retirement Plan was one of the original CBA
noncontributory. Also, it was previously included in previous CBA negotiations, and proposals submitted by the UFE to Nestle. The union's original proposal was to
were not questioned by the ER before. The inclusion of such retirement plan thus is modify the existing plan by including a provision for early retirement. The company
a vested and demandable right on the part of the employees which Nestle cannot did not question the validity of that proposal as a collective bargaining issue but
now withdraw, eliminate or diminish. merely offered to maintain the existing noncontributory retirement plan which it
believed to be still adequate for the needs of its employees and competitive with
FACTS those existing in the industry. The union thereafter modified its proposal, but the
- Four CBAs with Nestle Philippines (Nestle) expired on June 30, 1987. While the company was adamant. Consequently, the impasse on the retirement plan became
parties were negotiating, the employees resorted to a "slowdown" and walk-outs one of the issues certified to the NLRC for compulsory arbitration.
prompting Nestle to shut down the factory. Marathon collective bargaining - The inclusion of the retirement plan in the CBA as part of the package of economic
negotiations between the parties ensued. benefits extended by the company to its employees gives it "a consensual
- The UFE declared a bargaining deadlock. The Secretary of Labor assumed character" so that it may not be terminated or modified at will by either party.
jurisdiction and issued a return to work order. In spite of that order, the union Employees have a vested and demandable right over existing benefits voluntarily
struck, without notice. Nestle retaliated by dismissing the union officers and granted to them by their employer. The latter may not unilaterally withdraw,
members of the negotiating panel who participated in the illegal strike. The NLRC eliminate or diminish such benefits.
affirmed the dismissals. UFE filed a notice of strike on the same ground of CBA  
deadlock and ULP. Disposition Petition is DISMISSED.
- After conciliation efforts of the NCMB yielded negative results, the dispute was
certified to the NLRC by the Secretary of Labor. The NLRC issued a resolution LUZON DEVELOPMENT BANK VS. ASSOCIATIONS OF LUZON
regarding the union's demand for liberalization of the company's retirement plan DEVELOPMENT BANK EMPLOYEES (1995)
for its workers. Both the parties’ MFR were denied.
- Nestle filed this petition for certiorari alleging that since its retirement plan is non- Summary: Not much discussion here since the facts refer to the procedure before
contributory, it has the sole and exclusive prerogative to define the terms of the the voluntary arbiter. What is relevant as to bargainable issues here is that the
plan because the workers have no vested and demandable rights there under, the parties are required to include a grievance procedure in the CBA.
grant being not a contractual obligation but merely gratuitous. At most the  
company can only be directed to maintain the same but not to change its terms. It FACTS
should be left to the discretion of the company on how to improve or modify the -Luzon Development Bank (LDB) and the Association of Luzon Development Bank
same. Employees (ALDBE) submitted to arbitration to resolve WON the company has
  violated the Collective Bargaining Agreement provision and the Memorandum of
ISSUE Agreement dated April 1994, on promotion
WON the Retirement Plan is a collective bargaining issue -The parties agreed to submit their respective Position Papers on December 1-15,
  1994.
HELD -Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's
YES. Position Paper on January 18, 1995.
Ratio The fact that the retirement plan is non-contributory, i.e., that the employees -LDB, on the other hand, failed to submit its Position Paper
contribute nothing to the operation of the plan, does not make it a non-issue in the -On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered
CBA negotiations. a decision finding that the Bank has not adhered to the Collective Bargaining
Reasoning Almost all of the benefits granted to its employees under the CBA (salary Agreement provision nor the Memorandum of Agreement on promotion.
increases, rice allowances, midyear bonuses, 13th & 14th month pay, seniority pay, -Hence, this petition

38 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
  ARTICLE 250. Procedure in collective bargaining. - The following procedures shall
ISSUE be observed in collective bargaining:
WON the Voluntary Arbitrator erred in finding that the Bank has not adhered to the (a) When a party desires to negotiate an agreement, it shall serve a written notice
Collective Bargaining Agreement provision nor the Memorandum of Agreement on upon the other party with a statement of its proposals. The other party shall make a
promotion reply thereto not later than ten (10) calendar days from receipt of such notice;
(the Court referred the case to the CA so the issue wasn’t resolved…it said that (b) Should differences arise on the basis of such notice and reply, either party may
elevating a decision or award of a voluntary arbitrator to the Supreme Court on a request for a conference which shall begin not later than ten (10) calendar days
petition for certiorari is in effect equating the voluntary arbitrator with the NLRC or from the date of request. chanroblespublishingcompany
the Court of Appeals, which in its view is illogical and imposes an unnecessary (c) If the dispute is not settled, the Board shall intervene upon request of either or
burden upon it) both parties or at its own initiative and immediately call the parties to conciliation
  meetings. The Board shall have the power to issue subpoenas requiring the
HELD attendance of the parties to such meetings. It shall be the duty of the parties to
-In labor law context, arbitration is the reference of a labor dispute to an impartial participate fully and promptly in the conciliation meetings the Board may call;
third person for determination on the basis of evidence and arguments presented (d) During the conciliation proceedings in the Board, the parties are prohibited from
by such parties who have bound themselves to accept the decision of the arbitrator doing any act which may disrupt or impede the early settlement of the disputes;
as final and binding. and
-Arbitration may either be compulsory or voluntary. (e) The Board shall exert all efforts to settle disputes amicably and encourage the
-Compulsory arbitration is a system whereby the parties to a dispute are compelled parties to submit their case to a voluntary arbitrator. (As amended by Section 20,
by the government to forego their right to strike and are compelled to accept the Republic Act No. 6715, March 21, 1989).
resolution of their dispute through arbitration by a third party.
-Under voluntary arbitration, on the other hand, referral of a dispute by the ARTICLE 251. Duty to bargain collectively in the absence of collective bargaining
parties is made, pursuant to a voluntary arbitration clause in their collective agreements. - In the absence of an agreement or other voluntary arrangement
agreement, to an impartial third person for a final and binding resolution. providing for a more expeditious manner of collective bargaining, it shall be the
-Ideally, arbitration awards are supposed to be complied with by both parties duty of employer and the representatives of the employees to bargain collectively
without delay, such that once an award has been rendered by an arbitrator, nothing in accordance with the provisions of this Code.
is left to be done by both parties but to comply with the same. After all, they are
presumed to have freely chosen arbitration as the mode of settlement for that ARTICLE 233. Privileged communication. - Information and statements made at
particular dispute. Pursuant thereto, they have chosen a mutually acceptable conciliation proceedings shall be treated as privileged communication and shall not
arbitrator who shall hear and decide their case. Above all, they have mutually be used as evidence in the Commission. Conciliators and similar officials shall not
agreed to de bound by said arbitrator's decision. testify in any court or body regarding any matters taken up at conciliation
-In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) proceedings conducted by them.
are required to include therein provisions for a machinery for the resolution of
grievances arising from the interpretation or implementation of the CBA or NATURE OF PROCEDURE
company personnel policies.
-For this purpose, parties to a CBA shall name and designate therein a voluntary
NATIONAL UNION OF RESTAURANT WORKERS, SUPRA.
arbitrator or a panel of arbitrators, or include a procedure for their selection,
preferably from those accredited by the National Conciliation and Mediation Board SUMMARY: NURW filed a complaint for ULP against Tres Hermanas Restaurant,
(NCMB). specifically against Mrs. Felisa Herrera, for 3 grounds: (1)refusal to bargain with
  Disposition. The Court resolved to REFER this case to the Court of Appeals them, (2) that NURW be a company union first before the ER entered CBA with
them; (3) that ER terminated one MARTIN BRIONES for union activities. Court found
C. PROCEDURE that the said allegations are baseless. On first allegation, it was found that upon the
demand to negotiate by the union, the ERs called a meeting with them in a
restaurant in QC and negotiated the demands of the Union, making some markings
39 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
on the proposals ( if agreeable;  if not agreeable;  if open for discussions). This Summary: The existing exclusive bargaining representative wanted to renegotiate
fact shows that the ER was agreeable to negotiations. The fact that it did not give a the terms of the remaining period of the CBA but Letran refused to do so, delaying
reply to its demands is merely procedural and could not be deemed an ULP with the the negotiation process by rescheduling the work of the president and by
efforts to negotiate shown by the ER. As to the 2nd allegation, it appears that subsequently dismissing her. Letran also suspended the negotiations allegedly due
another union - International Labor and Marine Union of the Philippines – claimed to a petition for certification election filed by another union, though outside the 60-
to represent majority of the workers in the company so the ER wanted to make sure day freedom period prior to the expiration of the CBA (which already expired 2
that the union had capacity to be the authorized bargaining unit. As to the third years before the petition was filed). Court held that Letran committed ULP when it
contention, it was found that other active members of the union were not failed to give counterproposal – BF bargaining. Also held that the petition for
terminated so the termination of Briones could not have been based on union certification election which was not filed during the freedom period does not give a
activities. legitimate representation question which would necessitate the suspension of
renegotiation with the Union. Also held that the dismissal of the Union president
KIOK LOY, SUPRA was also ULP on the part of Letran.
Summary: The certified sole and exclusive bargaining representative union offered
Relevant Opinion:
to bargain but was just ignored by the ER (no counterproposals given). The union
-Requirement on both parties of the performance of the mutual obligation to meet
filed a Notice of Strike based on unresolved economic issues in the Collective
and convene promptly and expeditiously in GF for the purpose of negotiation an
Bargaining.Conciliation proceedings were delayed on account of the ER, and the
agreement
labor arbiter finally denied the request for postponement by the ER and considered
ER guilty. NLRC held for the Union so ER contests it. Court held that ER is guilty of
ARTICLE 242. Rights of legitimate labor organizations. - A legitimate labor
ULP for refusal to bargain with the union, primarily due to the failure to provide
organization shall have the right:
counterproposals to the proposals of the union. As to the nature and purpose of
(c) To be furnished by the employer, upon written request, with its annual audited
collective bargaining, court held that it is a mutual responsibility of the ER and the
financial statements, including the balance sheet and the profit and loss statement,
union, characterized as a legal obligation. Note that as penalty to the ER, the court
within thirty (30) calendar days from the date of receipt of the request, after the
imposed the proposals of the Union as the terms of the CBA. Note also that there
union has been duly recognized by the employer or certified as the sole and
was no preexisting CBA here.
exclusive bargaining representative of the employees in the bargaining unit, or
within sixty (60) calendar days before the expiration of the existing collective
Relevant opinion:
bargaining agreement, or during the collective bargaining negotiation;
 -Collective bargaining which is defined as negotiations towards a collective
agreement, is designed to stabilize the relation between labor and management
4. DOLE CONCILIATION
and to create a climate of sound and stable industrial peace. It is a mutual
responsibility of the employer and the Union and is characterized as a legal ARTICLE 250. Procedure in collective bargaining. - The following procedures shall
obligation. be observed in collective bargaining:
 - While it is a mutual obligation of the parties to bargain, the employer, however, is (c) If the dispute is not settled, the Board shall intervene upon request of either or
not under any legal duty to initiate contract negotiation. both parties or at its own initiative and immediately call the parties to conciliation
 -The mechanics of collective bargaining is set in motion only when the ff. meetings. The Board shall have the power to issue subpoenas requiring the
jurisdictional preconditions are present, namely, (1) possession of the status of attendance of the parties to such meetings. It shall be the duty of the parties to
majority representation of the employees' representative in accordance with any of participate fully and promptly in the conciliation meetings the Board may call;
the means of selection or designation provided for by the LC; (2) proof of majority (d) During the conciliation proceedings in the Board, the parties are prohibited from
representation; and (3) a demand to bargain under Art 251, par. (a) of the Labor doing any act which may disrupt or impede the early settlement of the disputes;
Code . . . all of which preconditions are undisputedly present in the instant case. and
(e) The Board shall exert all efforts to settle disputes amicably and encourage the
COLEGION DE SAN JUAN DE LETRAN V. ASSOCIATION OF EMPLOYEES parties to submit their case to a voluntary arbitrator. (As amended by Section 20,
AND FACULTY OF LETRAN (2000), SUPRA Republic Act No. 6715, March 21, 1989).

40 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
representative within a year of the proclamation of the results of the certification
EO 251, Section 4 election.
-Here the results, which showed that 61% of the employees voted for "no union,"
ARTICLE 233. Privileged communication. - Information and statements made at were certified only on February 25, 1991 but on December 1, 1991 Permex
conciliation proceedings shall be treated as privileged communication and shall not Producer already recognized the union and entered into a CBA with it.
be used as evidence in the Commission. Conciliators and similar officials shall not -There is something dubious about the fact that just ten (10) months after the
testify in any court or body regarding any matters taken up at conciliation employees had voted that they did not want any union to represent them, they
proceedings conducted by them. would be expressing support for petitioner. The doubt is compounded by the fact
that in sworn affidavits some employees claimed that they had either been coerced
LC IRR, Rule 13, Setion 6, Book V or misled into signing a document which turned out to be in support of petitioner as
its collective bargaining agent. Although there were retractions, we agree with the
Solicitor General that retractions of statements by employees adverse to a company
5. DUTY TO BARGAIN (or its favored union) are oftentimes tainted with coercion and intimidation. For
how could one explain the seeming flip-flopping of position taken by the
employees? The figures claimed by petitioner to have been given to it in support
SAMAHAN SA PERMEX V. SOLE (1998)
cannot readily be accepted as true.
Summary: In the Certification Election, “no Union” won. 10 months after, Union -on contract bar rule: The purpose of the rule is to ensure stability in the
wanted to be voluntarily recognized. Employer entered into CBA negotiations. Court relationships of the workers and the management by preventing frequent
held that Permex should not have recognized the union as the bargaining modifications of any collective bargaining agreement earlier entered into by them
representative of the employees, it being dubious that they entered CBA with the in good faith and for the stipulated original period. Excepted from the contract-bar
said union 10 months after the employees of the said company voted in the petition rule are certain types of contracts which do not foster industrial stability, such as
for certification for “No union”. Although certification elections should only be contracts where the identity of the representative is in doubt. Any stability derived
conducted 60 days prior to the expiration of the CBA, an exemption to this is when from such contracts must be subordinated to the employees' freedom of choice
there is doubt in the identity of the representative that would not provide the because it does not establish the kind of industrial peace contemplated by the
stability aimed by the rule. law. 6 Such situation obtains in this case. The petitioner entered into a CBA with
Permex Producer when its status as exclusive bargaining agent of the employees
Relevant Opinion: had not been established yet.
-Certification election is the most effective and the most democratic way of
determining which labor organization can truly represent the working force in the ALU V. FERRER-CALLEJA
appropriate bargaining unit of a company.
Summary: Employer Recognized ALU as the Exclusive bargaining representative and
-Petitioner argues that of the 763 qualified employees of Permex Producer, 479
entered with it a CBA 2 days after even when there was no proof of majority
supported its application for registration with the DOLE and that when petitioner
support from the employees. Two other unions contest the recognition, filed a
signed the CBA with the company, the CBA was ratified by 542 employees.
petition for certification election. Further, 181 of the 281 employees who allegedly
Petitioner contends that such support by the majority of the employees justifies its
“ratified” the CBA now strongly and vehemently repudiated the alleged
finding that the CBA made by it is valid and binding.
negotiations and ratification. The CBA also was not posted as required, allegedly
-But it is not enough that a union has the support of the majority of the employees.
because there were no impartial members of the unit. Court held that there is
It is equally important that everyone in the bargaining unit be given the opportunity
doubt as to the status of ALU as representing the majority of the employees, so
to express himself. 
ordered the conduct of certification election.
-This is especially so because, in this case, the recognition given to the union came
barely ten (10) months after the employees had voted "no union" in the
Relevant Opinion:
certification election conducted in the company. As pointed out by respondent
-the mechanics of collective bargaining are set in motion only when the following
Secretary of Labor in his decision, there can be no determination of a bargaining
jurisdictional preconditions are present, namely, (1) possession of the status of

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majority representation by the employees' representative in accordance with any of accord. In the sforementioned letter where respondent company required
the means of selection and/or designation provided for by the Labor Code; (2) proof petitioner union to present proof of its support by the employees, the company
of majority representation; and (3) a demand to bargain under Article 251, already suggested that petitioner ALU at the same time submit the proposals that it
paragraph (a), of the New Labor Code. intended to embody in the projected agreement. This was on May 12, 1986, and
-In the present case, the standing of petitioner as an exclusive bargaining prompltly on thre following day the negoltiation panel; furnish respondent
representative is dubious, to say the least. It may be recalled that respondent company final copies of the desired agreement whcih, with equal dispatch, was
company, in a letter dated May 12, 1986 and addressed to petitioner, merely signed on May 15, 1986.
indicated that it was "not against the desire of (its) workers" and required -one hundred eighty-one( 181) of the two hundred eighty-one (281) workers who
petitioner to present proof that it was supported by the majority thereof in a "ratified" the same now " strongly and vehemently deny and/or repudiate the
meeting to be held on the same date. The only express recognition of petitioner as alleged negotiations and ratification of the CBA. " 
said employees' bargaining representative that We see in the records is in the -... Basic to the contract bar rule is the proposition that the delay of the right to
collective bargaining agreement entered into two days thereafter. Evidently, there select represen tatives can be justified only where stability is deemed paramount.
was precipitate haste on the part of respondent company in recognizing petitioner Excepted from the contract which do not foster industrial stability, such as
union, which recognition appears to have been based on the self-serving claim of contracts where the identity of the representative is in doubt. Any stability derived
the latter that it had the support of the majority of the employees in the bargaining from such contracts must be subordinated to the employees' freedom of choice
unit. Furthermore, at the time of the supposed recognition, the employer was because it does nto establish the type of industrial peace contemplated by the law. 
obviously aware that there were other unions existing in the unit. As earlier stated, Disposition. WHEREFORE, the order of the public respondent for the conduct of a
respondent company's letter is dated May 12, 1986 while the two other unions, certification election among the rank-and-file workers of respondent GAW Trading
Southern Philippine Federation of Labor (hereafter, SPFL and Philippine Social Inc. is AFFIRMED. The temporary restraining order issued in this case pursuant to
Security Labor Union (PSSLU, for short), went on strike earlier on May 9, 1986. The the Resolution of March 25, 1987 is hereby lifted. SO ORDERED.
unusual promptitude in the recognition of petitioner union by respondent company
as the exclusive bargaining representative of the workers in GAW Trading, Inc. CITIZENS LABOR UNION V. CIR (1966)
under the fluid and amorphous circumstances then obtaining, was decidedly
Summary: 2 Unions claim to represent the majority of the employees in ESSO: CLU,
unwarranted and improvident.
which is the existing bargaining representative, and Malayang Manggagawa sa ESSO
-even in cases where it was the then Minister of Labor himself who directly certified
(MME). CLU and ESSO allegedly entered into renegotiations and extended the CBA
the union as the bargaining representative, this Court voided such certification
so MME filed a motion for preliminary injunction with CIR. Court remanded the
where there was a failure to properly determine with legal certainty whether the
case, subject to the finding of which between the two Unions is the representative
union enjoyed a majority representation. In such a case, the holding of a
of the majority of the employees.
certification election at a proper time would not necessarily be a mere formality as
there was a compelling reason not to directly and unilaterally certify a union. 
Relevant Opinion:
-ON FAILURE TO POST THE CBA: the posting of copies of the collective bargaining
-This Court in numerous cases has reaffirmed its attitude that it is a sound and
agreement is the responsibility of the employer which can easily comply with the
unassailable labor practice for labor and management to conclude a new contract
requirement through a mere mechanical act. The fact that there were "no impartial
before the expiry date of any collective bargaining agreement in order to avoid a
members of the unit" is immaterial. The purpose of the requirement is precisely to
hiatus in management-labor relations. The Industrial Peace Act was designed
inform the employees in the bargaining unit of the contents of said agreement so
primarily to promote industrial peace through encouragement of collective
that they could intelligently decide whether to accept the same or not. The
bargaining. Any undue delay in the selection of a bargaining representative can
assembly of the members of ALU wherein the agreement in question was allegedly
hardly be said to contribute to that end.
explained does not cure the defect. The contract is intended for all employees and
-Against the presumption of continued majority status, however, is the rule that
not only for the members of the purpoted representative alone. It may even be said
such majority status does not continue forever "especially in face of an assertion
that the need to inform the non-members of the terms thereof is more exigent and
and offer of proof to the contrary"
compelling since, in all likehood, their contact with the persons who are supposed
…or "in view of altered circumstances which have likely occurred in the interim"
to represent them is limited. Moreover, to repeat, there was an apparent and
suspicious hurry in the formulation and finalization of said collective bargaining
42 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
…or "by a change in the conditions which demonstrates that a shift in sentiment
actually exists among the employees, and is caused by other factors than the
employer's refusal to bargain collectively" STANDARD CHARTERED BANK EMPLOYEES UNION V. CONFESSOR (2004)
-It would seem then that the burden of coming forward with proof of majority
Summary: Union and bank entered into CBA negotiations, with bank sending
status is upon the union asserting it.
counterproposals and even setting up meeting. Deadlock occurred, with the Bank
arguing that the proposals of the Union were “blueskies” bargaining. Each charged
the other with ULP for refusal to bargain. Court held that the duty to bargain does
NATIONAL CONGRESS OF UNIONS V. FERRER-CALLEJA (1992) not compel either party to agree to a proposal or to require the making of a
Summary: During the cooling off period in bargaining deadlock between the ER and concession.
NFSW, NCU filed petition for certification election. NFSW contested the petition,  
arguing the contract bar rule and an existence of deadlock. Issue was WON petition FACTS
for certification election could be filed beyond the 60-day period. Court held that - Standard Chartered Bank is a foreign banking corporation doing business in the
the CBA still exists (Article 253) so contract bar rule still applies. Petition for Philippines. The exclusive bargaining agent of the rank and file employees of the
Certification election or intervention only allowed during the 60 day freedom Bank is the Standard Chartered Bank Employees Union
period prior to the expiration of the CBA. - The Union sought to renegotiate the terms of the CBA and initiated the
negotiations.
Relevant Opinion: - Through its President, Eddie L. Divinagracia, it sent a letter containing its proposals
-A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor covering political and economic provisions.
Code, as amended by the rules implementing Executive Order No. 111 provides - The Bank, took note of the Union’s proposals. The Bank attached its counter-
that: proposal to the non-economic provisions proposed by the Union.
Sec. 6. Procedure — . . . - Before the commencement of the negotiation, the Union, through Divinagracia,
In a petition involving an organized establishment or enterprise where the majority suggested to the Bank’s Human Resource Manager and head of the negotiating
status of the incumbent collective bargaining union is questioned by a legitimate panel, Cielito Diokno, that the bank lawyers should be excluded from the
labor organization, the Med-Arbiter shall immediately order the conduct of a negotiating team. The Bank acceded.
certification election if the petition is filed during the last sixty (60) days of the - Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President
collective bargaining agreement. Any petition filed before or after the sixty-day of the National Union of Bank Employees (NUBE), the federation to which the Union
freedom period shall be dismissed outright. was affiliated, be excluded from the Union’s negotiating panel. However, Umali was
The sixty-day freedom period based on the original collective bargaining agreement retained as a member thereof.
shall not be affected by any amendment, extension or renewal of the collective - The parties met and set the ground rules for the negotiation. Diokno suggested
bargaining agreement for purposes of certification election. that the negotiation be kept a “family affair.”
-It is a rule in this jurisdiction that only a certified collective bargaining agreement - Even during the final reading of the, there were still non-economic provisions on
— i.e., an agreement duly certified by the BLR may serve as a bar to certification which the Union and the Bank could not agree. Both parties agreed to place the
elections. notation “DEFERRED/DEADLOCKED.”
-This rule simply provides that a petition for certification election or a motion for - The negotiation for economic provisions commenced. Except for the provisions on
intervention can only be entertained within sixty days prior to the expiry date of an signing bonus and uniforms, the Union and the Bank failed to agree on the
existing collective bargaining agreement. Otherwise put, the rule prohibits the filing remaining economic provisions of the CBA. The Union declared a deadlock and filed
of a petition for certification election during the existence of a collective bargaining a Notice of Strike before the National Conciliation and Mediation Board
agreement except within the freedom period, as it is called, when the said - The Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the
agreement is about to expire. The purpose, obviously, is to ensure stability in the NLRC in Manila alleging that the Union violated its duty to bargain, as it did not
relationships of the workers and the management by preventing frequent bargain in good faith. It contended that the Union demanded “sky high economic
modifications of any collective bargaining agreement earlier entered into by them demands,” indicative of blue-sky bargaining.
in good faith and for the stipulated original period.

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- Then Secretary of Labor and Employment (SOLE) Nieves R. Confesor, assumed the others even leaving open other demands for future discussion is correct,
jurisdiction over the labor dispute and issued an Order dismissing the Bank and the especially so when those demands were discussed at a meeting called by
Union’s charges for unfair labor practice respondents themselves precisely in view of the letter sent by the union
- The Union filed a motion for reconsideration with clarification, while the Bank filed - The Court also does not agree that the Union is guilty of ULP for engaging in blue-
a motion for reconsideration. The SOLE issued a Resolution denying the motions. sky bargaining or making exaggerated or unreasonable proposals.
The Union filed a second motion for reconsideration, which was, likewise, denied - The Bank failed to show that the economic demands made by the Union were
- The Union filed this petition exaggerated or unreasonable. The minutes of the meeting show that the Union
- The Union alleges that the Bank violated its duty to bargain; hence, committed based its economic proposals on data of rank and file employees and the prevailing
ULP under Article 248(g) when it engaged in surface bargaining. It alleged that the economic benefits received by bank employees from other foreign banks doing
Bank just went through the motions of bargaining without any intent of reaching an business in the Philippines and other branches of the Bank in the Asian region.
agreement, as evident in the Bank’s counter-proposals. Disposition Resolutions of the SOLE are AFFIRMED.
   
ISSUE 6. Deadlock
WON the SOLE committed grave abuse of discretion amounting to lack of
jurisdiction in dismissing the union’s charge of unfair labor practice. SMC V. NLRC (1999)
 
Summary: SMB and Union had grievance procedure in CBA. SMB shut down plants,
HELD
declared 55 positions as redundant. Grievance procedure entered but before
NO.
completing it, the union filed a notice to strike. The court defined deadlock, but said
- Surface bargaining: “going through the motions of negotiating” without any legal
there was no deadlock in this case because the grievance procedure was not fully
intent to reach an agreement.
exhausted. There is still a board assigned to resolve conflicting views between the
- The resolution of surface bargaining allegations never presents an easy issue. The
parties. Since grievance procedure not yet done, notice of strike was dismissed.
determination of whether a party has engaged in unlawful surface bargaining is
usually a difficult one because it involves, at bottom, a question of the intent of the
Relevant opinion:
party in question, and usually such intent can only be inferred from the totality of
-Collective Bargaining Deadlock is defined as "the situation between the labor and
the challenged party’s conduct both at and away from the bargaining table. It
the management of the company where there is failure in the
involves the question of whether an employer’s conduct demonstrates an
collective bargaining negotiations resulting in a stalemate" 
unwillingness to bargain in good faith or is merely hard bargaining.
-NO DEADLOCK: Since there is a Board assigned on the third level (Step 3) of
- The minutes of meetings do not show that the Bank had any intention of violating
the grievancemachinery to resolve the conflicting views of the parties. Instead of
its duty to bargain with the Union. Records show that after the Union sent its
asking the Conciliation Board composed of five representatives each from the
proposal to the Bank, the latter replied with a list of its counter-proposals.
company and the union, to decide the conflict, petitioner declared a deadlock, and
Thereafter, meetings were set for the settlement of their differences. The minutes
thereafter, filed a notice of strike.
of the meetings show that both the Bank and the Union exchanged economic and
non-economic proposals and counter-proposals.
- The Union has not been able to show that the Bank had done acts, both at and
DIVINE WORD UNIVERSITY V. SOLE (1992), SUPRA
away from the bargaining table, which tend to show that it did not want to reach an
agreement with the Union or to settle the differences between it and the Union. Summary: The Certified Bargaining Representative initially offered its proposed CBA
Admittedly, the parties were not able to agree and reached a deadlock. However, it terms but unilaterally withdrawn it. After 3 years, it again offered to negotiate but
is herein emphasized that the duty to bargain “does not compel either party to was ignored by the ER. They filed a notice to strike, the dispute was assumed by the
agree to a proposal or require the making of a concession.” Hence, the parties’ SOLE, the parties entered into an agreement that they would negotiate but an hour
failure to agree did not amount to ULP under Article 248(g) for violation of the duty before that, a petition for certification election was filed by the ER. Court upheld the
to bargain. decision of SOLE that the certification election should not be held, not because
- The inference that respondents did not refuse to bargain collectively with the there was a deadlock because there was really none, but because of the bad faith
complaining union because they accepted some of the demands while they refused on the part of the ER. The court also upheld the unilateral imposition of the CBA
44 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
terms to the ER due to the fault of the ER. Note that there was no preexisting CBA considering the allegations in the aforementioned joint affidavit of its members.
here. Sir said that in Kiok Loy and in Divine Word, the ER closed. However, Article 252 also states that the duty to bargain "does not compel any
party to agree to a proposal or make any concession." Thus, petitioner union may
Relevant Opinion: not validly claim that the proposal embodied in the Minutes of the negotiation
-A “deadlock” is defined as the “counteraction of things producing entire stoppage: forms part of the CBA that it finally entered into with private respondent.
a state of inaction or of neutralization caused by the opposition of persons or of -The CBA is the law between the contracting parties — the collective bargaining
factions (as in government or a voting body): standstill.” There is a deadlock when representative and the employer-company. Compliance with a CBA is mandated by
there is a “complete blocking or stoppage resulting from the action of equal and the expressed policy to give protection to labor.  In the same vein, CBA provisions
opposed forces; as, the deadlock of a jury or legislature.” The word is synonymous should be "construed liberally rather than narrowly and technically, and the courts
with the word impasse which, within the meaning of the American federal labor must place a practical and realistic construction upon it, giving due consideration to
laws, “presupposes reasonable effort at good faith bargaining which, despite noble the context in which it is negotiated and purpose which it is intended to serve." This
intentions, does not conclude in agreement between the parties.” is founded on the dictum that a CBA is not an ordinary contract but one impressed
-HERE: No deadlock so legally, can still grant petition for certification election: NO with public interest. It goes without saying, however, that only provisions embodied
"REASONABLE EFFORT AND GOOD FAITH BARGAINING. Its indifferent attitude in the CBA should be so interpreted and complied with. Where a proposal raised by
towards collective bargaining inevitably resulted in the failure of the parties to a contracting party does not find print in the CBA,  it is not a part thereof and the
arrive at an agreement. As it was evident that unilateral moves were being proponent has no claim whatsoever to its implementation.
undertaken only by the DWUEU-ALU, there was no “counteraction” of forces or an -The Minutes reflects the proceedings and discussions undertaken in the process of
impasse to speak of. While collective bargaining should be initiated by the union, bargaining for worker benefits in the same way that the minutes of court
there is a corresponding responsibility on the part of the employer to respond in proceedings show what transpired therein. At the negotiations, it is but natural for
some manner to such acts. both management and labor to adopt positions or make demands and offer
proposals and counter-proposals. However, nothing is considered final until the
parties have reached an agreement. In fact, one of management's usual negotiation
SAMAHAN SA TOP FORM V. NLRC strategies is to ". . . agree tentatively as you go along with the understanding that
nothing is binding until the entire agreement is reached." If indeed private
Summary: During the CBA negotiations, provision mandating across the board
respondent promised to continue with the practice of granting across-the-board
implementation of wage order was not included in the CBA, with the ER promising
salary increases ordered by the government, such  promise could only be
to incorporate it. When the wage order was issued, the employer refused to accede
demandable in law if incorporated in the CBA.
to the union’s demand because it was not included in the CBA. The court held that
-NO BF: by making such  promise, private respondent may not be considered in bad
only the provisions in the CBA should be liberally interpreted and complied with.
faith or at the very least, resorting to the scheme of feigning to undertake the
Nothing considered final until the parties reached an agreement. No bad faith
negotiation proceedings through empty promises. As earlier stated, petitioner
bargaining. The fact that CBA was entered disproves this. The ER can insist on a
union had, under the law, the right and the opportunity to insist on
position to the point of stalemate.
the  foreseeable fulfillment of the private respondent's promise by demanding its
incorporation in the CBA. Because the proposal was never embodied in the CBA, the
Relevant Opinion:
promise has remained just that, a promise, the implementation of which cannot be
-To start with, if there was indeed a promise or undertaking on the part of private
validly demanded under the law.
respondent to obligate itself to grant an automatic across-the-board wage increase,
petitioner union should have requested or demanded that such "promise or
undertaking" be incorporated in the CBA. After all, petitioner union has the means SMC V. NLRC (2003)
under the law to compel private respondent to incorporate this specific economic Summary:
proposal in the CBA. It could have invoked Article 252 of the Labor Code defining
"duty to bargain," thus, the duty includes "executing a contract incorporating such OLA effective July 1, 1989-June 30, 1992. In 1991, while renegotiating union insisted
agreements if requested by either party." Petitioner union's assertion that it had that new CBA should be effective for 2 years while SMC argued it should be for 3.
insisted on the incorporation of the same proposal may have a factual basis

45 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
H: The CBA provisions which are other than “representation issues” should be In case of a deadlock in the renegotiation of the Collective Bargaining Agreement,
renegotiated within 3 years but law does not provide for a time period within which the parties may exercise their rights under this Code. (As amended by Section 21,
the other terms of the CBA should be effective. Republic Act No. 6715, March 21, 1989).

CBA PROPER RIVERA V. ESPIRITU


Definition of CBA: Rule I, Book V, Sec 1 (jj), IRR of LCC F: PAL & PALEA agreed to suspend the CBA negotiations for 10 years (on the threat
CBA: refers to the CONTRACT of PAL that it would close down, and for fear of the employees that they would lose
…between a legitimate labor union their job). Now some employees are contesting the suspension, arguing that it
And the employer violates the right of the employees to negotiate terms of their agreement, that it
…concerning wages made PALEA a company union…
Hours of work H: Court upheld the suspension (but note that the Court made it appear that it was
And all other terms and conditions of employment the choice of the union to suspend the negotiations)
In the bargaining unit
NEW PACIFIC TIMBER V. NLRC
Substandard CBA: Art 239(f): Grounds for cancellation of Union Registration F: The ER refused to negotiate the CBA with the exclusive bargaining representative.
…entering into a CBA The ER was charged of ULP, and the LA adopted the proposed CBA by the Union as
Which provide terms and conditions of employment the CBA that would govern between the EE-ER. New employees were hired by the
Below minimum standards ER and these new employees were arguing that the CBA should also apply to them
established by law but the ER refused to apply it to them, arguing that it was already expired and the
CBA should only apply to those employees existing during the time it was adopted.
Duration and re-negotiation H: Based on Art 253, “until a new Collective Bargaining Agreement has been
ARTICLE 253-A. Terms of a collective bargaining agreement. executed by and between the parties, they are duty-bound to keep the status
Any Collective Bargaining Agreement that the parties may enter into shall, insofar quo and to continue in full force and effect the terms and conditions of the existing
as the representation aspect is concerned, agreement. The law does not provide for any exception nor qualification as to
be for a term of five (5) years. which of the economic provisions of the existing agreement are to retain force and
No petition questioning the majority status of the incumbent bargaining agent shall effect, therefore, it must be understood as encompassing all the terms and
be entertained conditions in the said agreement.”
and no certification election shall be conducted by the Department of Labor and -HERE: No new agreement was entered into by the ER and the Union.
Employment -Union of Filipino Employees vs. NLRC, 192 SCRA 414 (1990): the Court had
outside of the sixty-day period immediately before the date of expiry of such five- occasion to rule that Article 253 and 253-A mandate the parties to keep the status
year term of the Collective Bargaining Agreement. quo and to continue in full force and effect the terms and conditions of the existing
All other provisions of the Collective Bargaining Agreement agreement during the 60-day period prior to the expiration of the old CBA and/or
shall be renegotiated not later than three (3) years after its execution. until a new agreement is reached by the parties. Consequently, the automatic
Any agreement on such other provisions of the Collective Bargaining Agreement renewal clause provided for by the law, which is deemed incorporated in all CBA's,
entered into within six (6) months from the date of expiry of the term of provides the reason why the new CBA can only be given a prospective effect
such other provisions as fixed in such Collective Bargaining Agreement, -Lopez Sugar Corporation vs. Federation of Free Workers, et. al: although a CBA
shall retroact to the day immediately following such date. has expired, it continues to have legal effects as between the parties until a new
If any such agreement is entered into beyond six months, the parties shall agree on CBA has been entered into. It is the duty of both parties to the CBA to keep
the duration of retroactivity thereof. the status quo, and to continue in full force and effect the terms and conditions of
the existing agreement during the 60-day period and/or until a new agreement is
reached by the parties. 20

46 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
To rule otherwise, i.e., that the economic provisions of the existing CBA in the after its execution. The "representation aspect" refers to the identity and majority
instant case ceased to have force and effect in the year 1984 would be to create a status of the union that negotiated the CBA as the exclusive bargaining
gap during which no agreement would govern, from the time the old contract representative of the appropriate bargaining unit concerned. "All other provisions"
expired to the time a new agreement shall have been entered into. simply refers to the rest of the CBA, economic as well as non-economic provisions,
-ON WON THE BENEFITS FROM THE CBA APPLIES TO NEW EMPLOYEES? YES. when a except representation. 
collective bargaining contract is entered into by the union representing the -As the Secretary of Labor herself observed in the instant case, the law is clear and
employees and the employer, even the non-member employees are entitled to the definite on the duration of the CBA insofar as the representation aspect is
benefits of the contract. To accord its benefits only to members of the union concerned, but is quite ambiguous with the terms of the other provisions of the
without any valid reason would constitute undue discrimination against CBA. It is a cardinal principle of statutory construction that the Court must ascertain
nonmembers. the legislative intent for the purpose of giving effect to any statute. The history of
the times and state of the things existing when the act was framed or adopted must
be followed and the conditions of the things at the time of the enactment of the
INTERPHIL LABORATORIES EMPLOYEES UNION V. INTERPHIL law should be considered to determine the legislative intent. 
LABORATORIES - the framers of the law wanted to maintain industrial peace and stability by having
both management and labor work harmoniously together without any disturbance.
F: ER refused to renegotiate with theUnion the CBA (because there are still a few Thus, no outside union can enter the establishment within five (5) years and
months left before renegotiations are scheduled to be entered). The Union asked challenge the status of the incumbent union as the exclusive bargaining agent.
the ER again to renegotiate but still, the HR head refused to do so saying it was still Likewise, the terms and conditions of employment (economic and non-economic)
early. The EEs resorted to a work slowdown, they undertook a boycott of work can not be questioned by the employers or employees during the period of
schedule, arguing that the 2-shift schedule was not in the CBA (note however that effectivity of the CBA. The CBA is a contract between the parties and the parties
the employees have been complying with the 2-shift schedule and they were paid must respect the terms and conditions of the agreement. Notably, the framers of
overtime pay) the law did not give a fixed term as to the effectivity of the terms and conditions
H: the union cannot invoke that since the2-shift work schedule is not in the CBA so of employment. It can be gleaned from their discussions that it was left to the
they are not compelled to follow it, it being that they have been observing it as parties to fix the period.
company practice -HERE: the previous CBAs between ER-EE had lasted for 3 years
SIR: In addition, there is a crucial fact that the CBA recognizes the discretion of the
employer to change the working hours
-why slowdown is not lawful: you are still being paid even if you are there in the
GRIEVANCE PROCEDURE
premises of the employer but not doing job for the employer

NAVARRO V. DAMASCO (1995)


SMC EMPLOYEES UNION V. CONFESSOR (1996) F:Navrro was preventively suspended
F: The CBA effective July 1, 1989-June 30, 1992. In 1991, While renegotiating, Union -then dismissed from service for having violated the Conduct and Behavior
insisted that the new CBA should be coterminous with the Union’s term – thus only provisions of the Code of Employee Discipline
for 2 years. The ER (SMC) insisted that the terms of the economic provisions of the -Union and Navarro agreed to submit the case to voluntary arbitration (instead of
CBA should be effective for 3 years. arguing that the grievance procedure be resorted to) raised as an issue WON the
H: Should be 3 years, in accordance with the Herrera-Veloso Law providing for Art grievance procedure in the CBA was followed
253-A. -VA: dismissed Navarro from employment; ER did not violate the provisions of the
-Article 253-A is a new provision. This was incorporated by Section 21 of Republic grievance procedure under the CBA
Act No. 6715 (the Herrera-Veloso Law) which took effect on March 21, 1989. This
new provision states that the CBA has a term of five (5) years instead of three years, WON THE GRIEVANCE PROCEDURE IN THE CBA WAS FOLLOWED:
before the amendment of the law as far as the representation aspect is concerned.
All other provisions of the CBA shall be negotiated not later than three (3) years HELD
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-the Grievance Machinery in the CBA may be availed of as regards the following: prejudice or discriminate against an employee for having filed charges or for having
"any ruling, practice or working conditions in the Company, or any dispute arising as given or being about to give testimony under this Act.")
to the meaning, application or claim of violation of any provision of this Agreement -Bank moved to dismiss: employees discharged not for Union activities but for
or any complaint that any employee may have against the COMPANY shall having written and published a libelous letter against the bank president
constitute a grievance " -CIR: denied MTD: an employee is dismissed or discriminated against for having
HERE: SC held that this is not a grievance: filed "any charges against his employer" (based on the Royal Interocean Case)
The instant case is not a grievance that must be submitted to the grievance • The Royal Interocean Case was overruled by the SC in saying that the
machinery. What are subject of the grievance procedure for adjustment and charge must be related to the EE's right to self-organization in order to
resolution are grievances arising from the interpretation or implementation of the give rise to ULP ...
collective bargaining agreement (Labor Code of the Philippines, as amended by R.A. • Pursuant to this, Bank renewed its MTD - court held the motion in
No. 6715, Art. 260). abeyance
-the acts of petitioner, violating the Code of Employee Discipline, cannot be invoked CIR: BANK GUILTY OF ULP, ORDERED REINSTATEMENT OF EMPLOYEES W/ FULL
to resort to the CBA (court citing Auxilio Jr v. NLRC (1990)) BACK WAGES
-Navarro voluntarily submitted to the jurisdiction of the Voluntary Arbitrator, and CIR en banc: affirmed
has not questioned his jurisdiction. Even submitted additional documentary -so this appeal on the ground that the employees were not dismissed in connection
evidence and was present during the initial conference with their union activities but due to their "individual" acts
-ON THE ISSUE OF WON HE WAS DENIED DUE PROCESS BECAUSE HE WAS NOT
ACCORDED AN OPPORTUNITY TO CROSS EXAMINE THE WITNESS AGAINSTH HIM: WON THE EMPLOYEES WERE DISMISSED DUE TO THEIR UNION ACTIVITIES?
No violation of due process. A formal or trial-type hearing is not at all times and in HELD: indirectly, it related to their union activiites (because they acted in a
all instances essential. The requirements are satisfied where the parties are fair and CONCERTED MANNER)
reasonable opportunity to explain their side of the controversy at hand. What is -"Assuming that the latter acted in their individual capacities when they wrote the
frowned upon is the absolute lack of notice and hearing. . . .  letter-charge they were nonetheless protected for they were engaged in concerted
-also, the parties have agreed that position papers be submitted instead of activity, in the exercise of their right of self-organization that includes concerted
undergoing examination of witnesses activity for mutual aid and protection,5interference with which constitutes an
-ON ALLEGATION THAT THE QUARREL WAS P[URELY A PRIVATE AFFAIR unfair labor practice under section 4(a)(1). This is the view of some members of
• Incident happened w/n company premises, i.e. The ladies dormitory located thisCourt. For, as has been aptly stated, the joining in protests or demands, even by
inside the plant site a small group of employees, if in furtherance of their interests as such, is a
• Both of them were employees of the ER concerted activity protected by the Industrial Peace Act. It is not necessary that
union activity be involved or that collective bargaining be contemplated."
-court compared the case to NLRB v. Phoenix Mutual Life Insurance Co:
REPUBLIC SAVINGS BANK V. CIR (1967) F: employees wrote a letter to the branch office contesting the transfer to
their branch office of a cashier from another branch office to fill the position. These
F: Employees wrote to the President of the bank demanding his resignation, on the
employees were discharged for their activities.
grounds of immorality, nepotism in the appointment and favoritism as well as
-Court held that the company was liable for ULP: "the employees shall
discrimination in the promotion of bank employees.
have the right to engage in concerted activities for their mutual aid or protection
-the said letter was also given to the Chairman of the BOD + Governor of the Central
even though no union activity be involved, for collective bargaining be
Bank
contemplated."
-the bank dismissed the said employees (officers of various Unions in the bank) " for
-  Some other members of this Court believe, without necessarily expressing
having written and published "a patently libelous letter . . . tending to cause the
approval of the way the respondents expressed their grievances, that what
dishonor, discredit or contempt not only of officers and employees of this bank, but
the Bank should have done was to refer the letter-charge to the grievance
also of your employer, the bank itself.""
committee. This was its duty, failing which it committed an unfair labor practice
-Employees filed a complaint in the CIR, alleging that the bank violated the
under section 4(a) (6). For collective bargaining does not end with the execution of
industrial Peace Act (ULP for an employer "to dismiss, discharge or otherwise
an agreement. It is a continuous process. The duty to bargain imposes on the
48 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
parties during the term of their agreement the mutual obligation "to meet and F: CBA provided sick leave with pay to its regular employees . The said provision was
confer promptly and expeditiously and in good faith . . . for the purpose of adjusting extended to its workpool employees, which can be converted to cash if unused.
any grievances or question arising under such agreement"8 and a violation of this New management discontinued the said benefit as to workpool employees, arguing
obligation is, by section 4 (a) (6) and (b) (3) an unfair labor practice.9 that there was merely error in payment.
-AS TO ARGUMENT OF THE BANK THAT IT WAS MERELY EXERCISING ITS RIGHT TO H: CBA not merely contractual but is imbued with public interest. Reasonable
DISCIPLINE EMPLOYEES: The Industrial Peace Act does not touch the normal interpretation. Fixed sick leave not applicable to intermittent employees.
exercise of the right of an employer to select his employees or to discharge them. It -While the terms and conditions of a CBA constitute the law between the parties, it
is directed solely against the abuse of that right by interfering with the is not, however, an ordinary contract to which is applied the principles of law
countervailing right of self-organization. But the difficulty arises in determining governing ordinary contracts. A CBA, as a labor contract within the contemplation
whether in fact the discharges are made because of such a separable cause or of Article 1700 of the Civil Code of the Philippines which governs the relations
because of some other activities engaged in by employees for the purpose of between labor and capital, is not merely contractual in nature but impressed with
collective bargaining. public interest, thus, it must yield to the common good. As such, it must be
-RE: ROYAL INTEROCEAN RULING: in Interocean, the employee wrote a letter construed liberally rather than narrowly and technically, and the courts must place
complaining of the local manager's inconsiderate and untactful attitude (which the a practical and realistic construction upon it, giving due consideration to the context
court later found to have nothing to do with or did not arise from her union in which it is negotiated and purpose which it is intended to serve.
activities) -It must be noted that the 1989 CBA has two (2) sections on sick leave with pay
-RE LAKAS NG PAGKAKAISA CASE: union wrote a letter to the mother company benefits which apply to two (2) distinct classes of workers in petitioner's company,
denouncing the wastage of company funds - which was contrary to the local namely:
company's rule (1) the regular non-intermittent workers or those workers who render a daily eight-
-HERE: dismissal of the employees was made on account of a letter they had hour service to the company and are governed by Section 1, Article VIII of the 1989
written, demanding the resignation of the bank president for a number of reason CBA; and
TOUCHING LABOR-MANAGEMENT RELATIONS...reasons which not even the Bank's (2) intermittent field workers who are members of the regular labor pool and the
judgment that the respondents had committed libel could excuse it for making present regular extra labor pool as of the signing of the agreement on April 15,
summary discharges in disregard of its duty to bargain collectively. 1989 or those workers who have irregular working days and are governed by
Section 3, Article VIII of the 1989 CBA.
SO DIFFERENCE WITH NAVARRO V. DAMASCO: here, the act complained of -It is not disputed that both classes of workers are entitled to sick leave with pay
concerned labor-management relations, as opposed to the Navarro case wherein benefits provided they comply with the conditions set forth under Section 1 in
the dispute was between co-employees and the management was only dragged relation to the last paragraph of Section 3, to wit:
into the issue when the management, in accordance with its rules of conduct, (1) the employee-applicant must be regular or must have rendered at least one year
adjudged the petitioner to be guilty of violating its rules of conduct and dismissed of service with the company; and
him. So in short, the different lies in the root of the problem and what relationship (2) the application must be accompanied by a certification from a company-
was involved: designated physician.
Republic bank Navarro -NATURE OF SICK LEAVES: Sick leave benefits, like other economic benefits
Employees vs. Management, Employee vs. Employee, dismissed the stipulated in the CBA such as maternity leave and vacation leave benefits, among
management dismissed the employees erring employee others, are by their nature, intended to be replacements for regular income which
otherwise would not be earned because an employee is not working during the
period of said leaves. They are non-contributory in nature, in the sense that the
CONTRACT ADMINISTRATION employees contribute nothing to the operation of the benefits. 7 By their nature,
upon agreement of the parties, they are intended to alleviate the economic
condition of the workers.
DAVAO INTEGRATED PORT STEVEDORING SERVICES V. ABARQUEZ -ON INTERPRETATION OF CBA PROVISION: the phrase "herein sick leave privilege,"
as used in the last sentence of Section 1, refers to the privilege of having a fixed 15-
day sick leave with pay which, as mandated by Section 1, only the non-intermittent
49 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
workers are entitled to. This fixed 15-day sick leave with pay benefit should be -note this however: We take note, furthermore, that KCPI is not obligated to
distinguished from the variable number of days of sick leave, not to exceed 15 unconditionally accept the recommendee since the latter must still meet the
days, extended to intermittent workers under Section 3 depending on the number required employment standards theretofore set by it. And even when the
of hours of service rendered to the company, including overtime pursuant to the recommendee is qualified, he, nonetheless, shall be hired only, pursuant to the
schedule provided therein. It is only fair and reasonable for petitioner-company agreement, on a "probationary status," an added measure, we assume, to further
not to stipulate a fixed 15-day sick leave with pay for its regular intermittent prove his worth for eventual regular employment. The company is not, therefore,
workers since, as the term "intermittent" implies, there is irregularity in their left without its own safeguards under the agreement.
work-days. Reasonable and practical interpretation must be placed on contractual
provisions. Interpetatio fienda est ut res magis valeat quam pereat. Such
interpretation is to be adopted, that the thing may continue to have efficacy rather UNITED KIMB ERLY-CLARK EMPLOYEES UNION V. KIMBERLY-CLARK
than fail. PHILIPPINES INC. (2006)
*note: NCC not resorted to in interpreting the CBA
*PART TWO!*
KIMBERLY CLARK PHIL. V. LORREDO
F: In the light of the ruling in KCPI v. Lorredo, KCPI adapted in Nov. 1995 Guidelines
F: CBA provided that retiring employees may recommend their children or, in on Hiring and Replacement, improving the educational attainment required of its
default, relatives w/n the 3rd degree as replacements. Here, Danilo Guerrero employees from HS graduate to that of at least:
voluntarily resigned, naming his nephew as his replacement. However, KCPI refused  Graduate of a 2-year vocational course
to accept such recommendation, arguing that Guerrero had 3 children. These 3  3 years of colleged education
children, however, were still minors (the eldest is 10 y.o.) so Guerrero and the -union asked for deferment of the Guidelines in lieu of the coming renegotiations of
union argued that he could validly recommend his nephew instead. The the CBA. CKPI agreed to postpone until January 1, 1997, unless it would be revoked
interpretation of the said provision was not agreed upon by the parties, and after or amended in the 1997 CBA of the company
exhausting the grievance procedure, they agreed to be subjected to voluntary -CBA negotiations entered. Provision for replacement of retirees maintained intact.
arbitration. Guidelines not revoked nor included in the CBA.
VA: ER already complied with the CBA provision before, hiring relatives within the -KCPI was alleged to still accept recommendees up to 1998 (which amounted to 44
3rd degree of retiring employees. Has already hired before so cannot object now recommendees)
with Guerrero’s recommendation? -in second half of 1998, it stopped hiring recommedees (actually stopped applying
-MR denied. the CBA altogether), arguing Asian Financial Crisis and Freeze-Hiring Policy of the
H: A collective bargaining agreement, just like any other contract, is respected as Asia-Pacific Headquarters
the law between the contracting parties and compliance therewith in good faith is -since the Union and the ER failed to settle in the grievance procedure, they agreed
mandated. Similarly, the rules embodied in the Civil Code on the proper to resort to NCMB for arbitration. Meanwhile, a new CBA was entered into by the
interpretation of contracts can very well govern. The intention of the parties is parties, still including the provision for recommedees.
primodial; if the terms of the contract are clear, the literal meaning of the -Union alleged that it was company practice for the company to hire retirees, even
stipulations shall control, but if the words appear to be contrary to the evident if they were merely high school graduates. Thus, it cannot be unilaterally withdrawn
intention of the parties, the latter shall prevail over the former.  by the company. Further, it alleged that even with the alleged freeze-hiring policy,
-ON “IN DEFAULT THEREOF”: the phrase "in default thereof" has not been the ER continued to hire casuals who were high school graduates.
intended or contemplated by the parties as having a preclusive effect within the -Company however argued that it was within its management prerogative to
group. It simply sets a priority on who can possibly be recommendees for impose guidelines on who to hire and that the said recommendees were for regular
employment. The employee, in fine, need not be childless at all for him to be positions, unlike those casuals hired by the company who were mere high school
allowed to nominate a third degree collateral relative; otherwise, his ability to graduates. It further alleged that the union did not do anything even after the
designate such relative is all but suddenly lost by the birth of an only child and applicability of the 1997 Guidelines so they are stopped from assailing it.
regained by the latter's demise. This situation could not have been intended. VA: for the union
-can’t unilaterally withdraw existing employment benefits
50 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
-literal interpretation of CBA, in case of doubt, interpret in favor of labor -here, the Union proposed the inclusion of the minimum qualification that the
-relied on the continuous hiring of 400 casuals who more or less were hs graduates recommendees be at least high school graduates. This was not agreed upon by
and who performed work of regular employees KCPI, so it was not made a part of the CBA
CA: partially set aside VA decision (agreed that KCPI cannot unilaterally suspend the -however, even before the renegotiation of the CBA, there was an existing guideline
application of the CBA based on economic distress. But agreed with KCPI that it was – the 1997 Guidelines on Hiring of Replacements, which was merely deferred by the
within its management prerogative to adopt hiring guidelines in accordance with ER, to be subject to what the new CBA may contain. As the guidelines were not
the earlier SC Decision. amended or revoked in the adapted CBA, and the Union has not contested its
H: If CBA is vague as to hiring qualifications, the VA may resort to evidence extrinsic application afterwards, KCPI can now enforce it!
of the CBA to disclose of the intention of the parties
-A CBA is more than a contract; it is a generalized code to govern a myriad of cases Manalang v. Artex
which the draftsmen cannot wholly anticipate. It covers the whole employment F: Manalang et al’ union entered into a CBA with a closed shop provision. Manalang
relationship and prescribes the rights and duties of the parties. It is a system of and others formed another union so they were terminated. They now assail the
industrial self-government with the grievance machinery at the very heart of the provision of the closed-shop, saying they were not aware of its existence.
system. The parties solve their problems by molding a system of private law for all -more specific: Manalang et al. formed Federation of Free Workers and informed
the problems which may arise and to provide for their solution in a way which will the company that a great majority of the company’s employees had joined them,
generally accord with the variant needs and desires of the parties. and thus offered proposals for CBA. Company said it had nothing against FFW but
-If the terms of a CBA are clear and have no doubt upon the intention of the informed the latter that the company already recognized BBLU (Bagong Buhay
contracting parties, the literal meaning of its stipulation shall prevail. However, if, Labor Union) as its exclusive bargaining representative, and has already executed 2
in a CBA, the parties stipulate that the hirees must be presumed of employment CBAs with the latter union. FFW asked for copies of the CBA but Company did not
qualification standards but fail to state such qualification standards in said CBA, the honor request. FFW then resorted to Regional Office of the Conciliation office but
VA may resort to evidence extrinsic of the CBA to determine the full agreement company still did not reply.
intended by the parties. When a CBA may be expected to speak on a matter, but -BBLU meanwhile had a meeting with regards Manalang et al’s joining FFW without
does not, its sentence imports ambiguity on that subject. The VA is not merely to first resigning from the Union, thus were charged with disloyalty with the union and
rely on the cold and cryptic words on the face of the CBA but is mandated to were dismissed as members of good standing from the union.
discover the intention of the parties. Recognizing the inability of the parties to -Also pursuant to the existing CBA, BBLU informed the company that Manalang, et
anticipate or address all future problems, gaps may be left to be filled in by al were no longer members in good standing of the union, thus, merit their
reference to the practices of the industry, and the step which is equally a part of the dismissal.al.
CBA although not expressed in it. In order to ascertain the intention of the -having in mind the closed shop rovision of the CBA, the Corporation individually
contracting parties, their contemporaneous and subsequent acts shall be principally wrote to the petitioners informing them of their termination. Manalang et al filed
considered. The VA may also consider and rely upon negotiating and contractual ULP case against the ER and BBLU for union busting
history of the parties, evidence of past practices interpreting ambiguous provisions. -BBLU’s answer: were dismissed from the union for disloyalty
The VA has to examine such practices to determine the scope of their agreement, -ER: only followed CBA on closed shop provision
as where the provision of the CBA has been loosely formulated. Moreover, the CBA CIR: FFW was not aware of the existing CBA, much more of the closed shop
must be construed liberally rather than narrowly and technically and the Court provision in it
must place a practical and realistic construction upon it. CIR en banc: ER was not guilty of ULP because it was BBLU’s duty, not the ER’s, to
-In the present case, the parties are in agreement that, on its face, Article XX, inform its members of the contents of the CBA. If FFW would want to sue, it should
Section 1 of their 1997 CBA does not contain any provision relative to the sue the BBLU
employment qualification standards of recommendees of retired/resigned, H: FFW members were not unaware of the CBA provision, much more of the closed
deceased or disabled employees of respondent who are members of petitioner. shop provision:
However, in determining the employment qualification standards for said  They tried to persuade other employees to join their union so the court
recommendees, the VA should have relied on the November 7, 1995 Guidelines presumed that they also knew of the existing CBA between BBLU and the
issued by respondent. ER, and its fundamental provisions which affect them individually,
personally and directly
51 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
 They must have studied the existing CBA between the ER and BBLU to -NATURE OF CBA: A collective bargaining agreement or CBA refers to the negotiated
come up with CBA proposals to the company contract between a legitimate labor organization and the employer concerning
-before these employees were dismissed from the Union, the Union first conducted wages, hours of work and all other terms and conditions of employment in a
an investigation. The disavowal from FFW was merely an afterthought bargaining unit. As in all contracts, the parties in a CBA may establish such
-ON VALIDITY OF CLOSED-SHOP Provisions: already upheld in numerous rulings stipulations, clauses, terms and conditions as they may deem convenient provided
-IF EVER UNAWARE OF THE CLOSED SHOP PROVISION: since their membership in these are not contrary to law, morals, good customs, public order or public policy.
the BBLU prior to their expulsion therefrom is undenied, there can be no question Thus, where the CBA is clear and unambiguous, it becomes the law between the
that as long as the agreement with closed-shop provision was in force, they were parties and compliance therewith is mandated by the express policy of the law
bound by it. Neither their ignorance of, nor their dissatisfaction with, its terms and -Moreover, if the terms of a contract, as in a CBA, are clear and leave no doubt
conditions would justify breach thereof or the formation by them of a union of their upon the intention of the contracting parties, the literal meaning of their
own. As has been aptly said, "a collective bargaining agreement entered into by stipulations shall control. However, sometimes, as in this case, though the
officers of a union, as agent of the members, and an employer, gives rise to valid provisions of the CBA seem clear and unambiguous, the parties sometimes arrive at
enforcible contractual relations, against the individual union members in matters conflicting interpretations.
that affect them peculiarly, and against the union in matters that affect the entire - As a general rule, in the interpretation of a contract, the intention of the parties is
membership or large classes of its members," and "a union member who is to be pursued. Littera necat spiritus vivificat. An instrument must be interpreted
employed under an agreement between the union and his employer is bound by according to the intention of the parties. It is the duty of the courts to place a
the provisions thereof, since it is a joint and several contract of the members of the practical and realistic construction upon it, giving due consideration to the context
union entered into by the union as their agent. in which it is negotiated and the purpose which it is intended to serve. Absurd and
illogical interpretations should also be avoided.
TSPIC CORP V. TSPIC UNION -HERE: the parties in the CBA agreed that the wage increases be replacements of
wage orders after WO 7. Thus, WO 8 would be deemed credited.
F: CBA provided for Wage increases and regularization pay subject to crediting
-GENERAL v. SPECIFIC PROVISIONS: It is a familiar rule in interpretation of contracts
clause
that conflicting provisions should be harmonized to give effect to all. Likewise, when
-TSPIC entered CBA w/ TSPIC union providing salary and wage increases. It also
general and specific provisions are inconsistent, the specific provision shall be
granted regularization increases. However, the said provisions included a crediting
paramount to and govern the general provision.
clause wherein the wage increases for 2001 and 2002 were deemed compliance of
HERE:
future WOs after Wage Order 7 and are considered as correction of any wage
GENERAL PROVISION: Paragraph (b) of Sec. 1 of Art. X of the CBA: effective
distortions
January 1, 2001, all employees on regular status and within the bargaining
-ER paid respondents salary increases and wage increase in accordance with Wage
unit on or before said date shall be granted a salary increase equivalent to
Order 8 (which should have been considered complied with by the CBA)
twelve (12%) of their basic monthly salary as of December 31, 2000. The
-ER wanted to be reimbursed by the employees whatever wage increase it has
12% salary increase is granted to all employees who (1) are regular
granted aside from that in the CBA (wanted the crediting provision/clause to be
employees and (2) are within the bargaining unit.
applied) so informed the employees that amounts would be deducted from their
SPECIFIC PROVISION: last paragraph: the wage/salary increases for the
salaries
years 2001 and 2002 shall be deemed inclusive of the mandated minimum
-Union contended that the reimbursement is a diminution of pay so they resorted
wage increases under future wage orders, that may be issued after WO No.
to grievance machinery. Still no resolution so went to VA
7, and shall be considered as correction of the wage distortions that may
VA: for the Union: unilateral deduction made by the ER violates Art 100.MR DENIED
be brought about by the said future wage orders. Thus, the wage/salary
CA: affirmed VA. Some of the employees were still probationary employees when
increases in 2001 and 2002 shall be deemed as compliance to future wage
WO 8 was issued. Thus, when they were regularized, they were separately entitled
orders after WO No. 7.
to the regularization increases.
INTERPRETATION: it may be reasonably concluded that TSPIC granted the
H: Considering that the parties have unequivocally agreed to substitute the benefits
salary increases under the condition that any wage order that may be
granted under the CBA with those granted under wage orders, the agreement must
subsequently issued shall be credited against the previously granted
prevail and be given full effect.
increase. The intention of the parties is clear: As long as an employee is
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qualified to receive the 12% increase in salary, the employee shall be who will be transferred from Bauan to Makati.  For employees who will be
granted the increase; and as long as an employee is granted the 12% transferred from Makati to Bauan, the relocation assistance shall be ONE
increase, the amount shall be credited against any wage order issued after THOUSAND FIVE HUNDRED PESOS (1,500.00).
WO No. 7. Section 2.  Employees can avail this provision provided their transfer is on a
-ON ARGUMENT THAT THERE WAS DIMINUTION OF BENEFITS: Diminution of permanent basis or for a duration exceeding one (1) month.”
benefits is the unilateral withdrawal by the employer of benefits already enjoyed by -INTERPRETING THE PROVISIONS: Such provisions need no interpretation for they
the employees. There is diminution of benefits when it is shown that: (1) the grant are clear. Contracts which are not ambiguous are to be interpreted according to
or benefit is founded on a policy or has ripened into a practice over a long period; their literal meaning and not beyond their obvious intendment.
(2) the practice is consistent and deliberate; (3) the practice is not due to error in
the construction or application of a doubtful or difficult question of law; and (4) the
diminution or discontinuance is done unilaterally by the employer. GRIEVANCE SETTLEMENT AND ISSUES
-HERE: the overpayment of its employees was a result of an error. This error was
ARTICLE 255. Exclusive bargaining representation and workers’ participation in
immediately rectified by TSPIC upon its discovery. We have ruled before that an
policy and decision-making. –
erroneously granted benefit may be withdrawn without violating the prohibition
The labor organization designated or selected by the majority of the employees in
against non-diminution of benefits.
an appropriate collective bargaining unit shall be the exclusive representative of the
employees in such unit for the purpose of collective bargaining.
BOBCOCK V. UNION (2005) However, an individual employee or group of employees shall have the right at any
F: CBA provided a RELOCATION ALLOWANCE of P1500 for employees transferred time to present grievances to their employer.
from Makati-Bauan, Batangas and vise-versa. The employees who were residents of Any provision of law to the contrary notwithstanding,
Bauan but were assigned in Makati were transferred to Bauan with the transfer of workers shall have the right,
the Design Department. They are now claiming the said RELOCATION allowance subject to such rules and regulations as the Secretary of Labor and Employment
provided in the CBA. may promulgate,
-ER refused to give the RELOCATION ALLOWANCE, arguing that since they were to participate in policy and decision-making processes of the establishment where
already residents of the place where they were re-assinged, they were not entitled they are employed insofar
to Relocation allowance (bottomline: ER was arguing that the relocation allowance as said processes will directly affect their rights, benefits and welfare.
was intended for those who had to travel far because of the relocation of their jobs) For this purpose, workers and employers may form labor-management councils:
IN ACCORDANCE WITH THE POLICY STATEMENT ISSUED BY THE EMPLOYER (dated Provided, That the representatives of the workers in such labor-management
1996) councils shall be elected by at least the majority of all employees in said
-Union members filed complaint for payment of Relocation allowance in NCMB. establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989).
Parties agreed to submit dispute to VA
VA: ER pay EEs relocation allowance; MR denied ARTICLE 260. Grievance machinery and voluntary arbitration. –
CA: Affirm VA: interpret LC and CBA ifo of labor. Policy statement not anymore The parties to a Collective Bargaining Agreement shall include therein provisions
applicable with the adoption of the 1997 CBA. CBA provision is clear and does not that will ensure the mutual observance of its terms and conditions. They shall
provide any qualification. MR Denied establish a machinery for the adjustment and resolution of grievances arising from
H: any doubt or ambiguity in the contract between management and the interpretation or implementation of their Collective Bargaining Agreement and
the union members should be resolved in favor of the latter.  This is pursuant to those arising from the interpretation or enforcement of company personnel
Article 1702 of the Civil Code which provides: “(I)n case of doubt, all labor policies.
legislation and all labor contracts shall be construed in favor of the safety and All grievances submitted to the grievance machinery which are not settled within
decent living for the laborer.” seven (7) calendar days from the date of its submission shall automatically be
-the "doubtful" provisions: referred to voluntary arbitration prescribed in the Collective Bargaining Agreement.
“Section 1.  The COMPANY shall provide a relocation allowance of ONE For this purpose, parties to a Collective Bargaining Agreement shall name and
THOUSAND EIGHT HUNDRED PESOS (1,800.00) per month for employees designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or

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include in the agreement a procedure for the selection of such Voluntary Arbitrator
or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary 2. ON WAGE INCREASE
Arbitrators duly accredited by the Board. In case the parties fail to select a SOLE: granted 3 wage increases: 14%, 14% and 13%
Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the a) INFLATION Argument: not 11-8% but only 7.496%
Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, b) Financial capacity: union based Caltex’s financial capacity on the Banaba Housing
pursuant to the selection procedure agreed upon in the Collective Bargaining Facility
Agreement, which shall act with the same force and effect as if the Arbitrator or -this facility was built for employees required to stay because they were members
panel of Arbitrators has been selected by the parties as described above. of the emergency response organization of the corporation. The said facility is
dilapidated, etc…
-upgrading should be evaluated as a business judgment
CALTEX REFINERY V. BRILLANTES c) can’t apply “Shell yardstick” and “relative parties in wages” because what worked
was HIGHER PRODUCTIVITY = HIGHER PAY:  “It is not just a matter of  being above
-renegotiation of CBA entered into by the Union, participated in by NCMB and SOLE.
the rest.  Sound compensation principle of higher productivity equals higher pay, as
Some items of the new CBA were already agreed upon except for some issues.
well as, recent developments in the industry have negated this argument.  Both
These issues were not settled, resulting into a deadlock.
Shell and Petron continue to benefit from increasing manpower productivity.  Shell,
-9 conciliatory meetings were conducted by the NCMB, but all efforts to settle
for instance, produces 155,000 barrels per day on a 120 manpower complement of
failed.
operatives and rank and file; while the Company only produces 65,000 barrels per
-Union filed notice to strike. During strike vote, employees voted for a walkout.
day with its 221 manpower complement.  In addition, the counterpart union at
Caltex then filed for SOLE’s assumption of jurisdiction.
Shell incurs an average overtime rate of 37%, as a percentage of base pay; the
-SOLE assumed jurisdiction, enjoining any lockout, strike, actual or intended and
Union’s overtime rate is 102%. Thus, the issue is productivity, not sales, and so far,
that the parties cease and desist from any act which might exacerbate the situation
the Company’s Refinery is not as productive as Shell’s or Petron’s.  To ask for
-still, union held strike. Return to work orders issued. DOLE Undersecretatry
relative parity in the face of this reality is not only unreasonable, it is likewise
Laguesma intervened, was able to convince the striking employees to return to
illogical.”
work and MOA entered into between the parties. But as a result of the strike, some
-as it is, the wage increase is illogical. It amounts to the basic salary of P23,510 while
employees were terminated. Unable to resolve problems, they referred the dispute
the average monthly salary should just be P16, 010.
to SOLE
d) there is no showing that Caltex and Shell are similar in substantial aspects, so the
-SOLE rendered decision directing the parties to enter into a new CBA wherein
Union should not use Shell as its yardstick
existing benefits were to be maintained and the new demands not modified or
improved were denied. MR denied. Another MR Denied.
3. UNION SECURITY CLAUSE
-apparently, SOLE made decisions on the following issues:
-the Union argues that inspite of the union security clause, the proposed CBA by
wage increase
Caltex would only lead to the dismissal of the employee from the company (even if
union security clause
not a member in good standing anymore) if based on the following grounds: non-
retirement benefits or application of the new retirement plan
payment of dues, subversion, or conviction for a crime involving moral turpitude
signing bonus
-Caltex however argued that it does not limit the Union from disciplining its
grievance and arbitration machineries
members but termination of employment should be based merely on those three
H:
grounds.
1. ON CERTIORARI IN LABOR CASES:
-SOLE did not rule on the issue, arguing it was procedural.
-factual findings of QJA, if substantial evidence backs it, should be accorded with
H: The disagreement between petitioner and private respondent on the union
finality and respect
security clause should have been definitively resolved by public respondent. The
-substantial evidence: such amount of relevant evidence which a reasonable mind
labor secretary should take cognizance of an issue which is not merely incidental to
will accept as adequate to justify a conclusion
but essentially involved in the labor dispute itself, or which is otherwise submitted
-FLORES v. NLRC: can’t file R65 if just to correct evaluation of NLRC of evidence and
to him for resolution.xxx The secretary of labor assumed jurisdiction over this labor
factual findings
dispute in an industry indispensable to national interest, precisely to settle once and
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for all the disputes over which he has jurisdiction at his level. In not performing his appropriate to a particular situation.  At bottom, we cannot really impute grave
duty, the secretary of labor committed a grave abuse of discretion. abuse of discretion to public respondent on this issue.

4. ON THE NEW RETIREMENT PLAN 6. SIGNING BONUS


-Caltex offered its employees a choice of whether to avail of the old or new -SOLE held that the signing bonus was not covered by “existing benefits” which
retirement plan. However, 40 employees did not express their choice, and were were to be maintained in the new CBA, the award for a signing bonus should
thus held to have chosen the old retirement plan. partake the nature of an incentive and premium for peaceful negotiations and
-Union now argues that the said 40 employees should be given a chance to choose amicable resolution of disputes which apparently are not present in the instant
or option to choose the new retirement plan case. 
H: 40 employees are deemed to have chosen the old retirement plan, as held by -Union argues that it is an existing benefit which should be maintained. Caltex
SOLE disagreed, saying that the signing bonus is not awarded when the CBA negotiations
-Although the union has every right to represent its members in the negotiation results into a strike
regarding the terms and conditions of their employment, it cannot negate their H: A signing bonus is not a benefit which may be demanded under the law.  Rather,
wishes on matters which are purely personal and individual to them. In this case, it is now claimed by petitioner under the principle of “maintenance of existing
the forty employees freely opted to be covered by the Old Plan; their decision should benefits” of the old CBA.  However, as clearly explained by private respondent, a
be respected. The company gave them every opportunity to choose, and they signing bonus may not be demanded as a matter of right.  If it is not agreed upon by
voluntarily exercised their choice. The union cannot pretend to know better; it the parties or unilaterally offered as an additional incentive by private respondent,
cannot impose its will on them. the condition for awarding it must be duly satisfied.  In the present case, the
condition sine qua non for its grant – a non strike – was not complied with. 
5. GRIEVANCE MACHINERY AND ARBITRATION
-SOLE decided to shorten the period within which grievance would be decided upon
by the VP for manufacturing (1st step from 45 days to 30 days; 2nd step from 10 days MASTER IRON V. NLRC (1993)
to 7 days) and to remove the establishment of a joint council and deem that
F: The Union and ER entered into a CBA which contains a no strike clause (That
grievance not automatically settled within 7 days by the VP be automatically
there shall be no strike and no lockout, stoppage or shutdown of work, or any other
referred to voluntary arbitration, with only 1 arbitrator handling the case.
interference with any of the operation of the COMPANY during the term of this
-Union contested the removal of the grievance council
AGREEMENT, unless allowed and permitted by law) and which provided that Service
H: No particular setup for a grievance machinery is mandated by law.  Rather,
allowance be given to employees who work outside its plant.
Article 260 of the Labor Code, as incorporated by RA 6715, provides for only a
-however, after entering the CBA, the employer hired outside (casual) workers to
single grievance machinery in the company to settle problems arising from
do the work outside the plant (work which were previously done by regular
“interpretation or implementation of their collective bargaining agreement and
workers, resulting to financial losses to the regular employees of the company)
those arising from the interpretation or enforcement of company personnel
-Union requested implementation of the grievance procedure under the CBA but
policies.” 
the Employer ignored the request.
-the procedure described by public respondent sufficiently complies with the
-the Union president even insisted in doing job which he previously performed but
minimum requirement of the law.  Public respondent even provided for two steps
was assigned to a casual employee. He was reprimanded for insubordination, was
in hearing grievances prior to their referral to arbitration.  The parties will decide on
suspended for 3 days. He requested that conciliation conferences be held but was
the number of arbitrators who may hear a dispute only when the need for it
still ignored.
arises.  Even the law itself does not specify the number of arbitrators.  Their
-Union then filed a notice to strike based on: (1) violation of CBA; (2) discrimination;
alternatives – whether to have one or three arbitrators – have their respective
(3) unreasonable suspension of union officials; and (4) unreasonable refusal to
advantages and disadvantages.  In this matter, cost is not the only consideration;
entertain grievance. DOLE intervened, an agreement between EE and ER entered
full deliberation on the issues is another, and it is best accomplished in a hearing
wherein ER promised not to resort to hiring casual employees. Still, it did.
conducted by three arbitrators.   In effect, the parties are afforded the latitude to
-Union eventually held a strike, which was dispersed when the counsels of the
decide for themselves the composition of the grievance machinery as they find
company called CAPCOM officers to arrest the union members, were later charged

55 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
for illegal possession of firearms and deadly weapons, but charges were dropped hiring, firing, transfer, demotion, and promotion of employees are traditionally
for failure of the CAPCOM officers to appear during the investigations identified as management prerogatives. However, they are not absolute
-Corporation filed petition to declare strike illegal with NLRC. Union restaged the prerogatives. They are subject to limitations found in law, a collective bargaining
strike, to which the corporation filed a petition for injunction. The union offered to agreement, or general principles of fair play and justice (University of Sto.
return to work, conditioned on the continuous working relationship between the er Tomas vs. NLRC, 190 SCRA 758 [1990] citing Abbott Laboratories [Phil.],
and the ee Inc. vs. NLRC, 154 SCRA 713 [1987]). The Corporation's assertion that it was
-Union filed counter-complaint for ULP against the corporation before the NLRC exercising a management prerogative in hiring outside workers being contrary to
LA: Strike illegal, ordered termination of union officers and members. Union’s the contract of employment which, of necessity, states the expected wages of the
certificate of registration also cancelled. Union was allegedly denied opportunity to workers, as well as the CBA, is therefore untenable.
cross-examine the witnesses presented by the corporation so they appealed to -ON HOLDING OF NLRC THAT UNION FAILED TO RESORT TO GRIEVANCE
NLRC PROCEDURE: it was not contested by the employer that the employees did exhaust
NLRC: affirmed the illegality of the strike, with the Union held to have failed to the grievance procedure available to them.
exhaust the grievance procedure provided for in the CBA . But held that LA cannot - It should be remembered that a grievance procedure is part of the continuous
cancel registration of the union, as only the BLR may do so. Dissent from process of collective bargaining (Republic Savings Bank. vs. CIR, et al., 21 SCRA 226
Commissioner Lucas, saying that it should have been remanded as the counter- [1967]). It is intended to promote a friendly dialogue between labor and
charge of ULP was not resolved management as a means of maintaining industrial peace. The Corporation's refusal
to heed petitioners' request to undergo the grievance procedure clearly
H: STRIKE WA LEGAL demonstrated its lack of intent to abide by the terms of the CBA.
- Philippine Metal Foundries, Inc. vs. CIR (90 SCRA 135 [1979]): a no-strike clause in …basta strike legal
a CBA is applicable only to economic strikes. Corollarily, if the strike is founded on
an unfair labo rpractice of the employer, a strike declared by the union cannot be
considered a violation of the no-strike clause. PAL V. SANTOS (1993)
-ECONOMIC STRIKE: An economic strike is defined as one which is to force wage or
F: PAL made deductions from the salary of some of its employees who were all port
other concessions from the employer which he is not required by law to grant
stewards of Catering sub-department, allegedly for losses of inventoried items.
(Consolidated Labor Association of the Philippines vs. Marsman & Co., Inc., 11 SCRA
-uncomfortable with the said deductions, the employees presented their grievance
589 [1964])
upon a formal notice to the manager for Catering, Mr. Reynaldo Abad in AUGUST
-according to J.Perfecto Fernandez: an economic strike involves issues relating to
21, 1984. Abad, however, was on leave.
demands for higher wages, higher pension or overtime rates, pensions, profit
-no action was taken so employees, through union, filed a formal grievance on
sharing, shorter working hours, fewer work days for the same pay, elimination of
November 4, 1984 pursuant to step1 of the grievance machinery in the CBA. The
night work, lower retirement age, more healthful working conditions, better health
grievance was submitted to Mr. Abad November 21, BUT HE WAS STILL ON LEAVE!
services, better sanitation and more safety appliances.
-December 5, the employees wrote to Mr. Abad that in as much as no reply was
-here: the strike was not an economic strike. The employees were asserting the CBA
made with regards their grievance, it was deemed resolved in their favor, pursuant
provision for service allowances which they were deprived of, and were not holding
to the CBA.
a strike to pressure the employer to grant a benefit not yet granted.
-Dec7, Mr.Abad finally returned. He scheduled a meeting with the individual
- Although the end result, should the Corporation be required to observe the CBA,
employees on December 12.
may be economic in nature because the workers would then be given their regular
-the said employees refused to conduct inventory. Thus during the December 12
working hours and therefore their just pay, not one of the said grounds is an
meeting, Mr. Abad resolved to deny the petition filed by the individual grievants,
economic demand within the meaning of the law on labor strikes.
and asked the individual grievants to explain why they should not be subjected to
-ON ARGUMENT THAT ER MERELY EXERCISING MANAGEMENT PREROGATIVE:
disciplinary action.
While it is true that an employer's exercise of management prerogatives, with or
-the individual grievants replied, saying that since there was no reply within 5 days,
without reason, does not per se constitute unjust discrimination, such exercise, if
the grievance was deemed to be resolved in their favor- Mr. Abad was dissatisfied,
clearly shown to be in grave abuse of discretion, may be looked into by the courts
thus he suspended the employees
(National Federation of Labor Unions vs. NLRC, 202 SCRA 346 [1991]). Indeed, the
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-PALEA filed another grievance petition for the lifting of the suspension and Summary: SMB and Union had grievance procedure in CBA. SMB shut down plants,
demanded that the employees be paid during their suspension. Mr. Abad declared 55 positions as redundant. Grievance procedure entered but before
maintained the legality of the suspension completing it, the union filed a notice to strike. The court defined deadlock, but said
-Union filed complaint for illegal suspension before the Labor Arbiter there was no deadlock in this case because the grievance procedure was not fully
LA: Dismissed complaint. Suspension legal exhausted. There is still a board assigned to resolve conflicting views between the
NLRC: Suspension illegal. PAL pay the grievants suspended their salaries during said parties. Since grievance procedure not yet done, notice of strike was dismissed.
suspension Grievance procedure of SMB:
H: It is not the employees fault that the person who should have been in charge of Sec.5. Processing of Grievance. — Should a grievance arise, an earnest effort shall
the procedure was not present. Should not work to their prejudice be made to settle the grievance expeditiously in accordance with the following
-It is a fact that the sympathy of the Court is on the side of the laboring classes, not procedures:
only because the Constitution imposes such sympathy, but because of the one- Step 1. — The individual employee concerned and the Union Directors, or the Union
sided relation between labor and capital. The constitutional mandate for the Steward shall, first take up the employee's grievance orally with his immediate
promotion of labor is as explicit as it is demanding. The purpose is to place the superior. If no satisfactory agreement or adjustment of the grievance is reached,
workingman on an equal plane with management — with all its power and the grievance shall, within twenty (20) working days from the occurrence of the
influence — in negotiating for the advancement of his interests and the defense of cause or event which gave rise to the grievance, be filed in writing with the
his rights. Under the policy of social justice, the law bends over backward to Department Manager or the next level superior who shall render his decision
accommodate the interests of the working class on the humane justification that within ten (10) working days from the receipt of the written grievance. A copy of
those with less privileges in life should have more privileges in law.  the decision shall be furnished the Plant Personnel Officer.
-the grievance of employees is not a matter which requires the personal act of Mr. Step 2. — If the decision in Step 1 is rejected, the employee concerned may elevate
Abad and thus could not be delegated. Petitioner could at least have assigned an or appeal this in writing to the Plant Manager/Director or his duly authorized
officer-in-charge to look into the grievance and possibly make his recommendation representative within twenty (20) working days from the receipt of the Decision of
to Mr. Abad. It is of no moment that Mr. Abad immediately looked into the the Department Manager, Otherwise, the decision in Step 1 shall be deemed
grievance upon returning to work, for it must be remembered that the grievants are accepted by the employee.
workingmen who suffered salary deductions and who rely so much on their meager The Plant Manager/Director assisted by the Plant Personnel Officer shall determine
income for their daily subsistence and survival. the necessity, of conducting grievance meetings. If necessary, the Plant
-Abad's failure to act on the matter may have been due to petitioner's Manager/Director and the Plant Personnel Officer shall meet the employee
inadvertence, but it is clearly too much of an injustice if the employees be made to concerned and the Union Director/Steward on such date(s) as may be designated
bear the dire effects thereof. Much as the latter were willing to discuss their by the Plant Manager. In every plant/office, Grievance Meetings shall be scheduled
grievance with their employer, the latter closed the door to this possibility by not at least twice a month.
assigning someone else to look into the matter during Abad's absence. Thus, private The Plant Manager shall give his written comments and decision within ten (10)
respondents should not be faulted for believing that the effects of the CBA in their working days after his receipt of such grievance or the date of submission of the
favor had already stepped into the controversy. grievance for resolution, as the case may be. A copy of his Decision shall be
-If the Court were to follow petitioner's line of reasoning, it would be easy for furnished the Employee Relations Directorate.
management to delay the resolution of labor problems, the complaints of the Step 3. — If no satisfactory adjustment is arrived at Step 2, the employee may
workers in particular, and hide under the cloak of its officers being "on leave" to appeal the Decision to the Conciliation Board as provided under Section 6 hereof,
avoid being caught by the 5-day deadline under the CBA. If this should be allowed, within fifteen (15) working days from the date of receipt of the decision of the Plant
the workingmen will suffer great injustice for they will necessarily be at the mercy Manager/Director or his designate. Otherwise, the decision in Step 2 shall be
of their employer. That could not have been the intendment of the pertinent deemed accepted by the employee.
provision of the CBA, much less the benevolent policy underlying our labor laws. The Conciliation Board shall meet on the grievance in such dates as shall be
designated by the Division/Business Unit Manager or his representative. In every
Division/Business Unit, Grievance Meetings of the Conciliation Board shall be
SMC V. NLRC (1999) scheduled at least once a month.

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The Conciliation Board shall have fifteen (15) working days from the date of comply with its economic provisions, shall not be considered unfair labor practice
submission of the grievance for resolution within which to decide on the grievance. and shall not be strikeable. No strike or lockout may be declared on grounds
Sec. 6. Conciliation Board. — There shall be a conciliation Board per Business Unit or involving inter-union and intra-union disputes or on issues brought to voluntary, or
Division. Every Conciliation Board shall be composed of not more than five (5) compulsory, arbitration.
representatives each from the Company and the Union. Management and the -In the case under consideration, the grounds relied upon by the private
Union may be assisted by their respective legal counsels. respondent union are non-strikeable. The issues which may lend substance to the
In every Division/Business Unit, the names of the Company and Union notice of strike filed by the private respondent union are:* collective bargaining
representatives to the Conciliation Board shall be submitted to the deadlock and *petitioner's alleged violation of the collective bargaining
Division/Business Unit Manager not later than January of every year. The agreement. These grounds, however, appear more illusory than real.
Conciliation Board members shall act as such for one (1) year until removed by the -Collective Bargaining Deadlock is defined as "the situation between the labor and
Company or the Union, as the case may be. the management of the company where there is failure in the
xxx xxx xxx collective bargaining negotiations resulting in a stalemate" 
Sec. 8. Submission to Arbitration. — If the employee or Union is not satisfied with -NO DEADLOCK: Since there is a Board assigned on the third level (Step 3) of
the Decision of the Conciliation Board and desires to submit the grievance to the grievancenmachinery to resolve the conflicting views of the parties. Instead of
arbitration, the employee or the Union shall serve notice of such intention to the asking the Conciliation Board composed of five representatives each from the
Company within fifteen (15) working days after receipt of the Board's decision. If no company and the union, to decide the conflict, petitioner declared a deadlock, and
such written notice is received by the Company within fifteen (15) working days, the thereafter, filed a notice of strike.
grievance shall be considered settled on the basis of the company's position and - For failing to exhaust all the steps in the grievance machinery and arbitration
shall no longer be available for arbitration.  proceedings provided in the Collective Bargaining Agreement, the notice of strike
-when the parties reached step 3, only 17 of the employees remained. SMC should have been dismissed by the NLRC and private respondent union ordered to
informed them that if they would not be redeployed, their services would be proceed with the grievance and arbitration proceedings.
terminated. The union thus did not finish the grievance procedure, declaring that -ON ALLEGATION OF VIOLATION OF CBA: such a violation is chargeable against the
there was a deadlock. private respondent union. In abandoning the grievance proceedings and stubbornly
- -Union filed with the National Conciliation and Mediation Board (NCMB) of the refusing to avail of the remedies under the CBAsuch a violation is chargeable
Department of Labor and Employment (DOLE) a notice of strike on the following against the private respondent union. In abandoning the grievance proceedings and
grounds: stubbornly refusing to avail of the remedies under the CBA
a) bargaining deadlock;
b) union busting;
c) gross violation of the Collective Bargaining Agreement (CBA), such as non- EXTENSION/RENEWAL
compliance with the grievance procedure;
d) failure to provide private respondent with a list of vacant positions pursuant to
SENO V. MENDOZA (1967)
the parties side agreement that was appended to the 1990 CBA; and
e) defiance of voluntary arbitration award Facts:
-SMC prayed that the notice to strike be dismissed and that the union be compelled On October 4, 1957: Carlos Go Thong & Co. And the United Seamen's Union of the
to submit to grievance procedure Philippines entered into a CBA effective for 2 years, and thereafter for another 1
NLRC: denied SMC’s complaint year period
...unless either party should notify the other in writing, not less than 60 days prior
H: Strike illegal, should have been dismissed to the expiry date, of its intention and election to terminate the agreement as of
-Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor the end of the current term.
Code, reads: (so in effect, presumed to be continuing)
Sec.1. Grounds for strike and lockout. — A strike or lockout may be declared in -On July 18, 1959, CBA was extended for another period of 2 years, counted from
cases of *bargaining deadlocks and *unfair labor practices. Violations of the October 4, 1959.
collective bargaining agreements, except flagrant and/or malicious refusal to
58 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
-October 6 & 31, Philippine Labor Federation (PLF) & General Maritime Stevedores labor and management in the interim, the situation would well be productive of
Union (GMSU)filed separate petitions for certification election w/ CIR confusion and result in breaches of the law by either party (Victorias Milling Co. vs.
-United Seamen's Union opposed the said petitions Victorias-Manapla Workers Organization vs. Court of Industrial Relations and Free
-January 17, 1961: United Seamen's Union and Company renewed the CBA w/ Visayan Workers, Nos. L-18467 & L-18470, Sept. 30, 1963).
additional conditions for a period of 5 years counted from execution -what is the effect if the CBA is renewed but a new bargaining agent is certified:
-sometime before 1962, the petitioners (as represented by Atty. Seno) were New bargaining agent would have to respect the contract, but the new bargaining
removed from the union as "members in good standing", and were thus terminated agent may bargain that its term be shortened (General Maritime Stevedores Union
from the company due to the closed shop clause in the CBA between company and v. South Sea Shipping Lines)
United Seamen's Union
-petitioners requested to be reinstated and be paid their salaries but Company
denied said request. LOPEZ SUGAR V. FEDERATION OF FREE WORKERS (1990)
-conciliation conferences in the Regional Office of DOLE (Cebu) failed so petitioners
F: Lopez Sugar and the Union entered into a CBA wherein Lopez Sugar is allowed to
and their sympathizers picketed the vessels of the company.
retrench employees to prevent business losses. Allegedly in accordance with the
-November 7, 1962: petitioners filed ULP charge against the company and the
said provision, Lopez Sugar did entrench employees.
Union in CIR Cebu
-So union filed a case for ULP for union busting, and violation of security of tenure.
-Company filed against United Seamen's Union of the Philippines and petitioners in
Allegedly, Lopez Sugar started hiring casuals who did the job of the entrenched
CFI Cebu for Actual damages, and to enjoin the petitioners from molesting them
employees, and the serious business losses were not proven. FURTHER, when the
and their vessels, among others
retrenchment was exercised by Lopez Sugar, the CBA was not renegotiated by the
-Petitioners appeared before CFI Cebu and opposed issuance of writ of preliminary
Union so the union alleged that it was no longer enforceable or operative.
injunction on ground of lack of jurisdiction (arguing that there is already a case for
H: Lopez Sugar, although authorized under the CBA (which was deemed to be still
ULP in CIR)
effective and enforceable), was not proven to be justified in resorting to
-On the same day, CFI Ordered the issuance of a writ of preliminary injunction.
retrenchment. So the court held for the laborers
-MR denied
-Although the CBA had expired, it continued to have legal effects as between the
-so petition for certiorari contesting the taking of CFI of cognizance of the case,
parties until a new CBA had been negotiated and entered into.
arguing:
1. That a labor dispute exists
2. Dismissal constitutes ULP, being an act of discrimination in regard to hire
or tenure of employment ARBITRATED CBAS
(the closed shop agreement is null and void for being violative of Sections
4(a)(1) and 4(a)(4) of RA 875, inasmuch as the matter of union representation was MERALCO V. QUISUMBING
still pending before the CIR at the time said closed shop agreement was executed)
SUMMARY: MERALCO and MEWA executed in a CBA. When it was about to expire,
they entered into negotiations but were not able to reach an amicable
HELD:
arrangement. MEWA filed notice to strike, several conciliation proceedings were
1. There was a labor dispute (refer to RA 875, Sectionj ,2(j))
undertaken but the parties still were unable to agree. MERALCO petitioned SOLE to
2. WON the dismissal constitutes ULP? NO. SINCE CBA is still valid, and the CBA
assume jurisdiction, which it did. Both parties were requested to submit their
contains a closed shop agreement, the dismissal of the petitioners is not ULP
respective memoranda and the SOLE issued an order awarding some of the
-The pendency of the petitions for certification election did not bar or preclude the
proposals of the Union and MERALCO. Decision more or less merely discusses the
renewal of the CBA with the United Seamen's Union of the Philippines
decision on the terms of the CBA contested.
-Rationale: Otherwise there would be a gap or interregnum during which
As to retreoactivity (Facts):
no agreement would govern, that is, from the time the old collective bargaining
- SOLE ordered that the effectivity of the new CBA shall retroact to December 1,
contract expired to the time the petition for certification election is decided and a
1995, the date of the commencement of the last two years of the last two years of
new agreement entered into with the Union that may be duly certified as the
the effectivity of the existing CBA.
proper bargaining unit. Without any agreement to govern the relations between
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-MERALCO Contention: contrary to the ruling of this Court in Pier 8 Arrastre and quasi-judicial award; it operates and may be executed only respectively unless there
Stevedoring Services, Inc. vs. Roldan-Confessor (the effective date of the new CBA are legal justifications for its retroactive application.
should be the date the Secretary of Labor has resolved the labor dispute) HELD: PROSPECTIVE APPLICATION OF CBA. We find no sufficient legal ground on the
-MEWA contention: (1) SOLE has plenary power and discretion to fix the date of other justification for the retroactive application of the disputed CBA, and therefore
effectivity of his arbitral award [St. Lakes Medical Center, Inc. vs. Torres]; (2) If the hold that the CBA should be effective for a term of 2 years counted from December
arbitral award takes effect on the date of the Secretary Labor's ruling on the parties' 28, 1996 (the date of the Secretary of Labor's disputed order on the parties' motion
motion for reconsideration (i.e., on December 28, 1996), an anomaly situation will for reconsideration) up to December 27, 1999.
result when CBA would be more than the 5-year term mandated by Article 253-A of
the Labor Code.
H: Both cases cited have different facts from the facts here MANILA CENTRAL LINE V. MANILA CENTRAL LINE FREE WORKERS UNION
 PIER 8 Case: does not involve a mid-term negotiation similar to this case (1998)
 St. Lukes: does not take the "hold over" principle into account, i.e., the rule
Facts: The existing CBA between the Company and the Union had already expired
that although a CBA has expired, it continues to have legal effects as
so they renegotiated the said CBA. However, a CBA deadlock occurred even with
between the parties until a new CBA has been entered into. 
the help of the NCMB.
-Art. 253-A serves as the guide in determining when the effectivity of the CBA at bar
-The Union filed a “Petition for Compulsory Arbitration” with NLRC. During the
is to take effect. It provides that the representation aspect of the CBA is to be for a
initial hearing, the parties declared that conciliation proceedings before NCMB had
term of 5 years, while
terminated and they desired to submit to Compulsory arbitration. Parties agreed to
. . . [A]ll other provisions of the Collective Bargaining Agreement shall be re-
submit position papers containing their proposals for the CBA.
negotiated not later than 3 years after its execution. Any agreement on such other
-LA: Decision embodied the CBA that would govern between the two parties
provision of the Collective Bargaining Agreement entered into within 6 months
-Company appealed but NLRC dismissed appeal. MR also denied
from the date of expiry of the term of such other provisions as fixed in such
H (as to part relevant to discussion):
Collective Bargaining Agreement shall retroact to the day immediately following
-Company contention: In ordering the new CBA to be effective on March 15, 1989,
such date. If such agreement is entered into beyond 6 months, the parties shall
the expiry date of the old CBA, the labor arbiter acted contrary to Art. 253-A of the
agree on the duration of the effectivity thereof. . . . .
Labor Code.
-Under these terms, it is clear that the 5-year term requirement is specific to the
H: Art. 253-A refers to collective bargaining agreements entered into by the parties
representation aspect. What the law additionally requires is that a CBA must be re-
as a result of their mutual agreement. The CBA in this case, on the other hand, is
negotiated within 3 years "after its execution." It is in this re-negotiation that gives
part of an arbitral award. As such, it may be made retroactive to the date of
rise to the present CBA deadlock.
expiration of the previous agreement.
-If no agreement is reached within 6 months from the expiry date of the 3 years
-cited St. Luke's Medical Center, Inc. v.Torres:“Finally, the effectivity of the Order of
that follow the CBA execution, the law expressly gives the parties — not anybody
January 28, 1991, must retroact to the date of the expiration of the previous CBA,
else — the discretion to fix the effectivity of the agreement.
contrary to the position of petitioner. Under the circumstances of the case, Article
-Significantly, the law does not specifically cover the situation where months have
253-A cannot be properly applied to herein case. As correctly stated by public
elapsed but no agreement has been reached with respect to effectivity. In this
respondent in his assailed Order of April 12, 1991 dismissing petitioner's Motion for
eventuality, we hold that any provision of law should then apply for the law
Reconsideration —Anent the alleged lack of basis for the retroactivity provisions
abhors a vacuum.
awarded, we would stress that the provision of law invoked by the Hospital,
-One such provision is the principle of hold over, i.e., that in the absence of a new
Article 253-A of the Labor Code, speaks of agreements by and between the
CBA, the parties must maintain the status quo and must continue in full force and
parties, and not arbitral awards . . . (p. 818 Rollo). Therefore, in the absence of a
effect the terms and conditions of the existing agreement until a new agreement is
specific provision of law prohibiting retroactivity of the effectivity of arbitral awards
reached.  In this manner, the law prevents the existence of a gap in the relationship
issued by the Secretary of Labor pursuant to Article 263(g) of the Labor Code, such
between the collective bargaining parties.
as herein involved, public respondent is deemed vested with plenary and
-Another legal principle that should apply is that in the absence of an agreement
discretionary powers to determine the effectivity thereof. 
between the parties, then, an arbitrated CBA takes on the nature of any judicial or

60 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
-COMPANY has not shown that the question of effectivity was not included in the arbitral awards issued by the
general agreement of the parties to submit their dispute for arbitration. To the Secretary of Labor pursuant to Article
contrary, as the order of the labor arbiter states, this question was among those 263(g) of the Labor Code, such as
submitted for arbitration by the parties: herein involved, public respondent is
As regards the "Effectivity and Duration" clause, the company proposes that the deemed vested with plenary and
collective bargaining agreement shall take effect only upon its signing and shall discretionary powers to determine
remain in full force and effect for a period of five years. The union proposes that the the effectivity thereof. 
agreement shall take effect retroactive to March 15, 1989, the expiration date of
the old CBA.
And after an evaluation of the parties' respective contention and argument thereof, CBA AND 3 R D PARTY APPLICABILITY
it is believed that of the union is fair and reasonable. It is the observation of this
Arbitrator that in almost subsequent CBAs, the effectivity of the renegotiated
CBA, usually and most often is made effective retroactive to the date when the SUNDOWER DEVELOPMENT CORP. VS. DRILON
immediately proceeding CBA expires so as to give a semblance of continuity. Facts: Mabuhay leased the premises of Syjuco but failed to pay rentals so a case for
Hence, for this particular case, it is believed that there is nothing wrong adopting ejectment was filed by Syjuco against Mabuhay hotels. To amicably settle the case,
the stand of the union, that is that this CBA be made retroactive effective March Mabuhay offered to surrender the premises to Syjuco and to sell the assets and
15, 1989.  personal property to any interested buyer.
-Syjuco offered the premises for lease to Sundower. Mabuhay also offered to sell
So difference between Meralco v. Quisumbing and Mla. Central Line v. Mla. Central the properties to Sundower, to which the latter also agreed.
Line Free Workers Union (1998) - National Union of Workers in Hotel, Restaurant and Allied Services (NUWHRAIN
MERALCO CASE MLA CENTRAL LINE CASE for short) picketed the leased premises, barricaded the entrance to the leased
SOLE issued the Order Labor Arbiter issued the order premises and denied petitioner's officers, employees and guests free access to and
Retroact from the date of the Retroact from the date of expiration of egress from said premises. SO, SUNDOWER wrote a letter-complaint to their lessor
commencement of the last two years of the old CBA Syjuco.
the last two years of the effectivity of -SOLE ordered that the striking union members be absorbed by the new hotel
the existing CBA. owner Sundower
 Court held that according to Art 253-  Art. 253-A refers to collective HELD: The rule is that unless expressly assumed, labor contracts such as
A, the parties — not anybody else — bargaining agreements entered into employment contracts and collective bargaining agreements are not enforceable
are given the discretion to fix the by the parties as a result of their against a transferee of an enterprise, labor contracts being in personam, thus
effectivity of the agreement. mutual agreement. The CBA in this binding only between the parties .5 A labor contract merely creates an action in
 in the absence of an agreement case, on the other hand, is part of an personally and does not create any real right which should be respected by third
between the parties, then, an arbitral award. As such, it may be parties. This conclusion draws its force from the right of an employer to select his
arbitrated CBA takes on the nature of made retroactive to the date of employees and to decide when to engage them as protected under our
any judicial or quasi-judicial award; it expiration of the previous Constitution, and the same can only be restricted by law through the exercise of the
operates and may be executed only agreement. police power. 
respectively unless there are legal  Article 253-A of the Labor Code, As a general rule, there is no law requiring a bona fide purchaser of assets of an on-
justifications for its retroactive speaks of agreements by and going concern to absorb in its employ the employees of the latter. 
application. between the parties, and not However, although the purchaser of the assets or enterprise is not legally bound to
arbitral awards . . . (p. 818 Rollo). absorb in its employ the employers of the seller of such assets or enterprise, the
Therefore, in the absence of a parties are liable to the employees if the transaction between the parties is colored
specific provision of law prohibiting or clothed with bad faith. 
retroactivity of the effectivity of In the case at bar, contrary to the claim of the public respondent that the
transaction between petitioner and Mabuhay was attended with bad faith, the
61 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
court finds no cogent basis for such contention. Thus, the absorption of the If one has already taken place at the time of assumption or certification,
employees of Mabuhay may not be imposed on petitioner. 1. All striking or locked-out employees shall IMMEDIATELY RETURN TO WORK
It is undisputed that when Mabuhay surrendered the leased premises to Syjuco and 2. AND the employer shall IMMEDIATELY resume operations and READMIT all
asked Syjuco to offer same to other lessees it was Syjuco who found petitioner and workers under the SAME terms and conditions prevailing before the strike or
persuaded petitioner to lease said premises. Mabuhay had nothing to do with the lock-out.
negotiation and consummation of the lease contract between petitioner and
Syjuco. The deed of assignment and the tripartite agreement entered into by The Secretary of Labor and Employment or the Commission may seek the assistance
Sundower and Mabuhay, and even with Union, provide that Sundower is free from of law enforcement agencies to ensure the compliance with this provision as well as
any liability that Mabuhay may have with the Union. with such orders as he may issue to enforce the same.
- it is clear that petitioner has no liability whatsoever to the employees of Mabuhay In line with the national concerns for and highest respect accorder to the right of
And its responsibility if at all, is only to consider them for re-employment in the patients to life and health, strikes and lock-outs in HOSPITALS, CLINICS, and SIMILAR
operation of the business in the same premises. There can be no implied MEDICAL INSTITUTIONS SHALL, to every extent possible, BE AVOIDED, and all
acceptance of the employees of Mabuhay by petitioner and acceptance of statutory serious efforts, not only by labor and management but government as well, be
wrong as it is expressly provided in the agreement that petitioner has no exhausted to SUBSTANTIALLY MINIMIZE, if not prevent, their adverse effects on
commitment or duty to absorb them. such life and health, through the exercise, however legitimate, by labor of its right
- What is obvious is that the petitioner, by purchasing the assets of respondent to strike and by management to lockout.
Mabuhay in the hotel premises, enabled Mabuhay to pay its obligations to its
employees. There being no employer-employee relationship between the petitioner In labor disputes adversely affecting the continued operation of such hospitals,
and the Mabuhay employees, the petition must fail. Petitioner can not be clinics or medical institutions,
compelled to absorb the employees of Mabuhay and to pay them backwages. 1. it shall be the DUTY of striking union or locking out employer to provide and
maintain an EFFECTIVE SKELETAL WORKFORCE of medical and other health
Manlimos v. NLRC (1995) personnel,
F: Corporation was bought by another company. Even with this knowledge, the 2. Whose movement and services shall be unhampered and unrestricted, as are
employees of the previous company still worked necessary to insure the proper and adequate protection of the life and health of its
patients, most especially emergency cases, for the duration of the strike or lockout.
***
In such cases, therefore, the Secretary of Labor and Employment may
IMMEDIATELY assume, within twenty four (24) hours from knowledge of the
COMPULSORY ARBITRATION occurrence of such a strike or lockout, jurisdiction over the same or certify it to the
Commission for compulsory arbitration. For this purpose the contending parties are
STRICTLY ENJOINED to comply with such orders, prohibitions and/or injunctions as
1. ART. 263 (G)
are issued by the Secretary of Labor and Employment or the Commission, under
When, in his OPINION, pain of immediate disciplinary action, including dismissal or loss of employment
 there exists a LABOR DISPUTE status or payment by the locking-out employer of back wages, damages and other
 causing or likely to cause a STRIKE OR LOCKOUT affirmative relief, even criminal prosecution against either or both of them.
 in an INDUSTRY INDISPENDSABLE TO THE NATIONAL INTERESTS,
The Secretary of Labor and Employment MAY The foregoing notwithstanding, the President of the Philippines shall not be
1. assume jurisdiction over the dispute and decide it OR precluded
2. certify the same to the Commission (NLRC) for COMPULSORY ARBITRATION. 1. From DETERMINING THE INDUSTRIES that, in HIS OPINION, are indispensable to
Such assumption or certification shall have the effect of: the national interest, and
AUTOMATICALLY enjoining the intended or impending strike or lock-out as specified 2. From intervening at any time and assuming jurisdiction over such labor dispute in
in the assumption or certification order. order to settle or terminate the same.

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* Sec. 22 RA 8791: Banking institutions are industries indispensable to the national -Chung Fu: moved for remand, MR of the judgment award as Arbitrator committed
interest. 12 instances of Grave Error by disregarding the parties' contract
-RTC:
Compulsory Arbitration is by mandate of law. While voluntary arbitration is by o Denied Chung Fu's Motion to remand. MR denied.
agreement of parties. o granted Motion for confirmation of award, entered judgment, granted motion
 What is the type of dispute subject to compulsory arbitration? Labor disputes in for issuance of writ of execution
industry indispensable to the national interest. -Chung Fu filed Petition for certiorari before CA
 Who is initiating party? Initiated by the Secretary of Labor or the President. CA: Affirm RTC. Award which provides that is be final and unappealable are
Take note that the NLRC has no authority to initiate. The NLRC only comes into the precluded from judicial review.
picture when the secretary of labor or the President certifies the case to them.
H: FOR CHUNG FU: Arb award providing that the award be final and unappealable
CHUNG FU VS. CA (1992) are valid BUT when there's GADALEJ on the part of the arbitrators, the aggrieved
*arb agreement provides that the award be FINAL AND UNAPPEALABLE party may file a petition for certiorari under R65 or may ask for the vacation of the
*the Supreme Court will not engage in a review of the facts found nor even of the award if the grounds enumerated under the Arbitration law are proven and
law as interpreted or applied by the arbitrator, unless there be on the part of the sufficiently showed.
arbitrator a grave abuse of discretion or that he has acted without or in excess of -History of Arbitration:
jurisdiction With the progress of civilization, physical combat has been ruled out and instead,
F: Chung Fu and Roblecor Philippines entered into a construction agreement on more specific means have been evolved, such as recourse to the good offices of a
May 17, 1989: disinterested third party, whether this be a court or a private individual or
individuals.
 *Roblecor would construct and finish on December 31, 1989 Chung Fu's
Legal history discloses that "the early judges called upon to solve private conflicts
factory complex in Tanza, Cavite for P42M
were primarily the arbiters, persons not specially trained but in whose morality,
 *in the event of disputes arising from the performance of the contract,
probity and good sense the parties in conflict reposed full trust. Thus, in Republican
issues shall be submitted for resolution before a single arbitrator chosen by
Rome, arbiter and judge (judex) were synonymous. The magistrate or praetor, after
both parties
noting down the conflicting claims of litigants, and clarifying the issues, referred
-The parties entered further ancillary contracts
them for decision to a private person designated by the parties, by common
• for the construction of the dormitory and support facilities for ~P4M (to be
agreement, or selected by them from an apposite listing (the album judicium) or
finished October 31) and
else by having the arbiter chosen by lot. The judges proper, as specially trained
• for installation of electrical, water and hydrant systems at the plant site for
state officials endowed with own power and jurisdiction, and taking cognizance of
P12.1M (completed 1 month after civil works have been finished)
litigations from beginning to end, only appeared under the Empire, by the so-called
-DISPUTE: Roblecor failed to complete work despite extensions. Chung Fu took over
cognitio extra ordinem."
the construction when it became evident Roblecor could not fulfill its obligation
Such means of referring a dispute to a third party has also long been an accepted
-Roblecor filed a PETITION FOR COMPULSORY ARBITRATION, pursuant to arb clause,
alternative to litigation at common law.
for the unsatisfied account of P10.5M and unpaid progress billings of ~P2M
-IN RP:
-Chung fu MOVED TO DISMISS
*Recognized in Spanish Civil Code under A1820 and 1821, reinstated in present
-Subsequently, both parties agreed to an arbitration agreement which
Civil Code (A2042-2046)
 precludes further judicial recourse if either party disagrees with the whole
*AS REGARDS LABOR: Arbitration found a fertile field in the resolution of labor-
or any part of the arb agreement.
management disputes in the Philippines. Although early on, Commonwealth Act
 Only exception is when BOTH PARTIES AGREE that either is entitled to seek
103 (1936) provided for compulsory arbitration as the state policy to be
judicial assistance for purpose of enforcing the arb award
administered by the Court of Industrial Relations, in time such a modality gave way
-RTC approved arbitration agreement. Arbitrator appointed as sole arbiter.
to voluntary arbitration. While not completely supplanting compulsory arbitration
-Arb Award: Chung Fu pay Roblecor P16,108,801. Final and unappelable
which until today is practiced by government officials, the Industrial Peace Act
-Roblecor moved for the CONFIRMATIONOF THE AWARD
which was passed in 1953 as Republic Act No. 875, favored the policy of free
63 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
collective bargaining, in general, and resort to grievance procedure, in particular, as * so now, parties are free to establish stipulations they may deem convenient to
the preferred mode of settling disputes in industry. It was accepted and enunciated refer all future disputes to an arbitrator or submit an ongoing dispute to one
more explicitly in the Labor Code, which was passed on November 1, 1974 as (subject to limitation that it not be contrary to law, morals, good customs, public
Presidential Decree No. 442, with the amendments later introduced by Republic order, or public policy). This stipulation is VALID AND BINDING UPON THE PARTIES.
Act No. 6715 (1989). IT ALSO CONSTITUTES A CONDITION PRECEDENT
-Whether utilized in business transactions or in employer-employee relations, -WON ARBITRATION AWARD IS BEYOND THE AMBIT OF THE COURT’S POWER OF
arbitration was gaining wide acceptance. A consensual process, it was preferred to JUDICIAL REVIEW? NO
orders imposed by government upon the disputants. Moreover, court litigations UNDER NCC:
tended to be time-consuming, costly, and inflexible due to their scrupulous Art. 2038. A compromise in which there is mistake, fraud, violence,
observance of the due process of law doctrine and their strict adherence to rules of intimidation, undue influence, or falsity of documents, is subject to the
evidence. provisions of article 1330 of this Code.
*as early as the 1920s, SC held (Pasay Co. case included): However, one of the parties cannot set up a mistake of fact as against the other
"The rule now is that unless the agreement is such as absolutely to close the doors if the latter, by virtue of the compromise, has withdrawn from a litigation
of the courts against the parties, which agreement would be void, the courts will already commenced.
look with favor upon such amicable arrangements and will only with great Art. 2039. When the parties compromise generally on all differences which
reluctance interfere to anticipate or nullify the action of the arbitrator." they might have with each other, the discovery of documents referring to one
*RA 876 (Arbitration Law) passed to supplement the New Civil Code provisions on or more but not to all of the questions settled shall not itself be a cause for
Arbitration. annulment or rescission of the compromise, unless said documents have been
*In the construction Industry, CIAC was created by EO 1008 concealed by one of the parties.
-CAN THE PARTIES PROVIDE THAT THE DISPUTE BE SUBMITTED TO ARBITRATION, But the compromise may be annulled or rescinded if it refers only to one thing
AND THAT THE DECISION OF THE ARBITER BE FINAL AND EXECUTORY? YES to which one of the parties has no right, as shown by the newly-discovered
*Article 2044 of the Civil Code: documents.
Any stipulation that the arbitrators' award or decision shall be final is valid, without Art. 2040. If after a litigation has been decided by a final judgment, a
prejudice to Articles 2038, 2039 and 2040. compromise should be agreed upon, either or both parties being unaware of
* Construction Industry Arbitration Law: arbitral award "shall be final and the existence of the final judgment, the compromise may be rescinded.
inappealable except on questions of law which shall be appealable to the Supreme Ignorance of a judgment which may be revoked or set aside is not a valid
Court." ground for attacking a compromise.
*Under the original Labor Code: UNDER ARBITRATION LAW:
GR: voluntary arbitration awards or decisions were final, unappealable and Sec. 24. Grounds for vacating award. — In any one of the following cases, the
executory. " court must make an order vacating the award upon the petition of any party to
X: voluntary arbitration awards or decisions on money claims, involving an amount the controversy when such party proves affirmatively that in the arbitration
exceeding One Hundred Thousand Pesos (P100,000.00) or forty-percent (40%) of the proceedings:
paid-up capital of the respondent employer, whichever is lower, maybe appealed to (a) The award was procured by corruption, fraud, or other undue means; or
the National Labor Relations Commission on any of the following grounds: (b) That there was evident partiality or corruption in the arbitrators or any of
(a) abuse of discretion; and them; or
(b) gross incompetence." (c) That the arbitrators were guilty of misconduct in refusing to postpone the
It is to be noted that the appeal in the instances cited were to be made to the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent
National Labor Relations Commission and not to the courts. and material to the controversy; that one or more of the arbitrators was
-BUT THE SAID PROVISION WAS DELETED: the voluntary arbitrator is now mandated disqualified to act as such under section nine hereof, and wilfully refrained
to render an award or decision within twenty (20) calendar days from the date of from disclosing such disqualifications or of any other misbehavior by which the
submission of the dispute and such decision shall be final and executory after ten rights of any party have been materially prejudiced; or
(10) calendar days from receipt of the copy of the award or decision by the
parties. (a262-a)
64 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
(d) That the arbitrators exceeded their powers, or so imperfectly executed F: Dolina was admitted in PAL Aviation school, the training agreement of which
them, that a mutual, final and definite award upon the subject matter provided that after training, he would be made a regular and permanent employee
submitted to them was not made. of PAL. He was initially appointed temporarily for 6 month durations but failed to
Where an award is vacated, the court, in its discretion, may direct a new comply with the required flying hours. When he finally complied with the required
hearing either before the same arbitrators or before a new arbitrator or flying hours, his Adaptability rating was however found to be unsatisfying and the
arbitrators chosen in the manner provided in the submission or contract for the Pilot Acceptance Qualification Board did not recommend him for regular
selection of the original arbitrator or arbitrators, and any provision limiting the employment. He was recommended for termination.
time in which the arbitrators may make a decision shall be deemed applicable -PAL applied for clearance of Dolina's termination, while putting Dolina in
to the new arbitration and to commence from the date of the court's order. preventive suspension pending the clearance.
Where the court vacates an award, costs, not exceeding fifty pesos and -Dolina countered with a COMPLAINT FOR ILLEGAL DISMISSAL
disbursements may be awarded to the prevailing party and the payment -DOLE regional office lifted the preventive suspension and ordered actual
thereof may be enforced in like manner as the payment of costs upon the reinstatement with payment of backwages
motion in an action. -issue of termination and damages was referred to Exec. Labor Arbiter
Sec. 25. Grounds for modifying or correcting award. — In any one of the -PAL appealed the order lifting the preventive suspension w/ SOLE
following cases, the court must make an order modifying or correcting the -pending resolution of SOLE, PAL and DOLINA entered into an AGREEMENT before
award, upon the application of any party to the controversy which was Undersec:
arbitrated: AGREEMENT
(a) Where there was an evident miscalculation of figures, or an evident mistake The undersigned parties hereby agree to the following:
in the description of any person, thing or property referred to in the award; or 1 While pending final resolution of the complaint of Mr. Armando Dolina
(b) Where the arbitrators have awarded upon a matter not submitted to them, against the Philippine Airlines, he shall be considered in the payroll effective 1
not affecting the merits of the decision upon the matter submitted; or October 1976.
(c) Where the award is imperfect in a matter of form not affecting the merits of 2 The order of Regional Director Vicente Leogardo for the reinstatement with
the controversy, and if it had been a commissioner's report, the defect could backwages of Mr. Dolina is hereby rendered moot and academic.
have been amended or disregarded by the court. 3 The parties shall consider this arrangement pending final resolution of the
The order may modify and correct the award so as to effect the intent thereof case by arbitration.
and promote justice between the parties. xxx xxx xxx
- WHAT IF COURTS REFUSE OR NEGLECT TO INQUIRE INTO THE FACTUAL MILIEU -case referred to compulsory arbitration to the Exec. Labor arbiter
OF AN ARBITRATOR'S AWARD TO DETERMINE WHETHER IT IS IN ACCORDANCE -LA: for PAL
WITH LAW OR WITHIN THE SCOPE OF HIS AUTHORITY? HOW MAY THE POWER OF  Termination is in order
JUDICIAL REVIEW BE INVOKED? PETITION FOR REVIEW ON CERTIORARI (R65) for  Claim for MD denied
GADALEJ! -PAL then removed Dolina from Payroll effective 1 April 1979
WHY GADALEJ: CHUNG FU HAS AMPLY MADE OUT A CASE WHERE THE VOLUNTARY -Dolina appealed LA's decision to NLRC, prayed that he should still be considered in
ARBITRATOR FAILED TO APPLY THE TERMS AND PROVISIONS OF THE the payroll because LA's decision not yet final due to his appeal
CONSTRUCTION AGREEMENT WHICH FORMS PART OF THE LAW APPLICABLE AS -NLRC: For DOLINA
BETWEEN THE PARTIES. FURTHERMORE, IN GRANTING UNJUSTIFIED EXTRA  Termination is in order - clearance approved; BUT
COMPENSATION for several items, ARBITRATOR EXCEEDED HIS POWERS - grounds  Dolina should still be included in the payroll and be paid his salaries from 1
for vacating the award under SECTION 24(d) of RA 876. April 1979 until the case is finally resolved!
…as the courts refused to rule on the grounds for vacating even if it was clearly -so Petition for Certiorari here
there, they also commited GADALEJ, thus, petition for certiorari should be granted!  
Case is remanded to court of origin for further hearing. WON NLRC GADALEJ when it ruled that DOLINA was still entitled to SALARY "until
the case is finally resolved"? YES
PAL V. NLRC (1989) -PAL argues: stipulation only refers to resolution of case by LA

65 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
-NLRC: arbitration is a continuing process. Since no final resolution of the case yet,  It is unjust enrichment!
still in payroll  Plus Dolina would be in a better position than those illegally dismissed by
H: Interpretation of contracts: circumstances under which an instrument was made, employers (still paid backwages even if LEGALLY and VALIDLY terminated)
including the situation of the subject thereof and the parties to it may be
considered so that the intention of the contracting parties may be adjudged REFORMIST UNION OF RB LINES V. NLRC (1997)
correctly
-Reformist Union (Reformist) was organized in May 1989 by affiliating with Lakas ng
-HERE: Agreement was intended to supersede the order of the Regional DOLE
Manggagawa ng Pilipinas (Lakas)
director; in lieu of reinstatement with backwages, Dolina would just be included in
-for alleged acts of ULP by RB Liner, Lakas filed a NOTICE OF STRIKE (13 Nov 1989)
the payroll from time of preventive suspension until the final resolution of the case
-conciliation hearings were conducted (4 & 6 Dec 198) but nothing happened
by arbitration, w/o having to perform any work for PAL
-another set of alleged ULP made by RB Liner, so Reformist (with authorizatin of
-it would be absurd if the parties intended that "final resolution of the case by
Lakas) went on strike (13 DEC 1989) even as conciliation proceedings continued
arbitration" would include the whole adjudicatory process, even upon petition for
-21 DEC 1989: RB liner petitioned SOLE Drilon to assume jurisdiction
certiorari, w/o Dolina rendering any service to PAL
-SOLE Drilon assumed jurisdiction, certified dispute to NLRC for compulsory
-ARBITRATION, DEF: arbitration is the reference of a dispute to an impartial third
arbitration, issued RTWO (28 Dec 1989)
person, chosen by the parties or appointed by statutory authority to hear and
-even after certification to NLRC, RB Liner and Reformist reached an AGREEMENT
decide the case in controversy [Chan Linte v. Law Union and Rock, Ins. Co., 42 Phil.
which provided the holding of a certification election (19 January 1990)
548 (1921)]. When the consent of one of the parties is enforced by statutory
-31 January 1990: CE was held, Lakas won as CBA
provisions, the proceeding is referred to as compulsory arbitration.
-Lakas presented proposals for CBA to RB Liner but RB Liner refused to bargain
... In labor cases, compulsory arbitration is the process of settlement of labor
-later, 8 RB Liner buses were converted to buses of other liners
disputes by a government agency which has the authority to investigate and to
-so Lakas/Reformist filed w/ NLRC ULP case for illegal lockout
make an award which is binding on all the parties [See Wood v. Seattle, 23 Wash. 1,
-RB Liner countered saying that the strike held by the union is ILLEGAL
62 P 135, 52 LRA 369 (1920); Amalgamated Association v. Wisconsin Employees'
...the 2 cases were consolidated and tried jointly
Relations Board, 340 U.S. 383-410,95 L. Ed. 381 (1951)].
LA (kasi before NLRC):
-WHY APPEAL TO NLRC NOT INCLUDED IN ARBITRATION: Under the Labor Code, it
a. There was no illegal lockout (proof of payment of percentage taxes and
is the Labor Arbiter who is clothed with the authority to conduct compulsory
conductors/inspectors daily reports)
arbitration on cases involving termination disputes [Article 217, Pres. Decree No.
b. There was an illegal strike (no evidence of strike vote held, submitted to
442, as amended]. When the Labor Arbiter renders his decision, compulsory
DOLE and they held a strike even pending conciliation process... Plus there
arbitration is deemed terminated because by then the hearing and determination of
was an alleged violation of SOLE Drilon's RTWO)
the controversy has ended. Any appeal raised by an aggrieved party from the Labor
-NLRC (on appeal): affirm LA: strike was illegal (not yet the exclusive bargaining rep
Arbiter's decision is already beyond the scope of arbitration since in the appeal
as there was allegedly no CE conducted previous to the strike); RTWO violated
stage, the NLRC en banc merely reviews the Labor Arbiter's decision for errors of
through the Union's alleged admission as stated in the minutes of the conference
fact or law and no longer duplicates the proceedings before the Labor Arbiter. Thus,
before Commissioner Diokno that there are some employees who have not yet
the clause "pending final resolution of the case by arbitration" should be
returned to work even after the RTWO was issued...; plus alleged illegal acts during
understood to be limited only to the proceedings before the Labor Arbiter, such
strike
that when the latter rendered his decision, the case was finally resolved by
...conversion of some of buses into other bus companies was a sufficient ground for
arbitration.
UNION to believe in GF that there was ULP so allowed reinstatement of the
-NLRC'S affirmance of validity of granting termination clearance runs counter to its
dismissed employees
order of inclusion of Dolina in the payroll
-MR denied
 plus it runs counter to the age-old rule of "a fair day's wage for a fair day's
 
labor"
WON RB Liner could still contest the legality of the strike conducted by the Union
 Plus it in effect awarded backwages notwithstanding the finding of a valid
on 13 Dec 1989? NO
dismissal
 Backwages are granted for earnings lost due to illegal dismissal
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1. RB Liner submitted the issue of the legality of strike already to Compulsory final and binding upon the parties. The National Labor Relations Commission or any
Arbitration, and the subsequent agreement it entered with the Union finally court shall not assume jurisdiction over issues involved therein except in case of
disposed of the issue non-compliance thereof or if there is prima facie evidence that the settlement was
-RB Liner itself sought compulsory arbitration (by writing a letter to SOLE Drilon) in obtained through fraud, misrepresentation or coercion.
order to resolve the legality of the said strike -HERE:
-RB Liner and Union entered into an agreement, pursuant to the compulsory 1. Agreement was forged under authority of SOLE
arbitration. In the said agreement, they agreed to accept all employees who have 2. Reps of Union and company signed the handwritted agreement to signify
not returned to work yet. By acceding to the peaceful settlement brooked by the their consent
NLRC, the private respondents waived the issue of the illegality of the strike. 3. RB liner never alleged that the UNION did not comply with the agreement
-The very nature of compulsory arbitration makes the settlement binding upon the -A2037, NCC: Compromise agreements have effect and authority of res judicata. SO
private respondents, for compulsory arbitration has been defined both as "the LA and NLRC erroneously reviewed the said issue, as this should no longer be re-
process of settlement of labor disputes by a government agency which has the litigated
authority to investigate and to make an award which is binding on all the parties,"  
and as mode of arbitration where the parties are "compelled to accept the WON UNION VIOLATED THE RTWO? NO
resolution of their dispute through arbitration by the a third party." -RB Liner failed to sufficiently substantiate the defiance of the Union to comply with
-The legality of the strike could no longer be reviewed by the LA nor the NLRC, as it the RTWO
had already been resolved. It was the sole issue submitted for compulsory -the union's undertaking to cause absentee employees to RTW was NOT AN
arbitration, as referred by RB Liner to SOLE Drilon. Due to the agreement entered ADMISSION: hose who did not report for work after the issuance of the Labor
between RB Liner and Union, the case certified by SOLE Drilon to NLRC was Secretary's order may not have been informed of such order, or they may have
dismissed. This dismissal conclusively disposed of the strike issue. been too few so as to conclude that they deliberately defied the order. The private
2. THE DECISION IS ALREADY FINAL AND EXECUTORY: respondents failed to eliminate these probabilities.
LC, Art 263(i): the decision in compulsory arbitration proceedings "shall be final and -on the COMPANY LOGBOOK (which allegedly showed the union members who did
executory ten (10) calendar days after receipt thereof by the parties." not report to work even after RTWO): logbook was withdrawn as an exhibit, and
-parties were informed of the dismissal of the case in a letter dated 14 February was allegedly either lost or stolen
1990 and RB Liner only filed complaint with LA for illegal strike on 13 January 1990 -Other evidence indicated that UNION members complied with the RTWO through
so it may be reasonably inferred that more than 10 days have elepsed for RB liner the Conductors/Inspectors Daily Reports (dated 2 days after RTWO, detail the bus
to appeal the decision in the CA proceedings. trips made by a particular conductor-driver + number of bus tickets used during
- A final judgment is no longer susceptible to change, revision, amendment, or each trip), some of which were executed by the dismissed employees
reversal. Neither the Labor Arbiter nor the NLRC, therefore, could review the same  
issue passed upon in NLRC Certified Case No. 0542, and their decisions to the WON THERE WAS ILLEGAL LOCKOUT TO JUSTIFY THE REINSTATEMENT OF THE
contrary have been rendered in grave abuse of discretion amounting to excess of EMPLOYEES? YES, GF belief that there was an illegal lockout
jurisdiction. 1. NO defiance of RTWO proven
3. NATURE OF AGREEMENT BET COMPANY AND UNION IS A COMPROMISE 2. No cause to decree dismissal in the first instance 
AGREEMENT
-COMPROMISE AGREEMENT DEFINED: an agreement between two or more PHIMCO INDUSTRIES V. BRILLANTES (1999)
persons, who, for preventing or putting an end to a lawsuit, adjust their difficulties
F: PHIMCO is a corporation engaged in the production of matches
by mutual consent in the manner which they agree on, and which everyone of them
-PILA filed a NOTICE OF STRIKE w/ NCMB based on an alleged deadlock in the CBA
prefers to the hope of gaining, balanced by the danger of losing."
negotiations
-Although ULP acts are beyond and outside the sphere of compromises, LC bestows
-after several conciliation conferences without any resolution, PILA staged a strike
finality to unvitiated compromise agreements:
-PILA presented a PETITION FOR THE INTERVENTION OF SOLE
Art. 227 Compromise agreements — Any compromise settlement, including those
>PHIMCO opposed
involving labor standard laws, voluntarily agreed upon by the parties with the
assistance of the Bureau or the regional office of the Department of Labor, shall be
67 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
>PHIMCO also terminated some employees, including several union officers, 4th memo was issued. Court held that GTE’s sales policy was pursuant to the valid
pending the resolution of the said petition exercise of management prerogatives and that its implementation is not suspended
>>Acting SOLE Brillantes ASSUMED JURISDICTION OVER THE LABOR DISPUTE: merely because of pending negotiations initiated by the Union.
“ the prolonged work disruption has adversely affected not only the
protagonists, i.e., the workers and the Company, but also those directly and WON Minister of Labor had power to assume jurisdiction over the dispute?
indirectly dependent upon the unhampered and continued operations of the 4. NO
Company for their means of livelihood and existence. In addition, the entire -“IINI”: such as may occur in but not limited to public utilities, companies engaged
community where the plant is situated has also been placed in jeopardy. If the in the generation or distribution of energy, banks, hospitals, and export-oriented
dispute at the Company remains unabated, possible loss of employment, not to industries, including those within export processing zones
mention consequent social problems, might result thereby compounding the -The production and publication of telephone directories, which is the principal
unemployment problem of the country. activity of GTE, can scarcely be described as an industry affecting the national
“Thus we cannot be unmindful of the possible dire consequences that might interest. GTE is a publishing firm chiefly dependent on the marketing and sale of
ensue if the present dispute is allowed to remain unresolved, particularly when advertising space for its not inconsiderable revenues. Its services, while of value,
alternative dispute resolution mechanism obtains to dispose of the differences cannot be deemed to be in the same category of such essential activities as "the
between the parties herein.” generation or distribution of energy" or those undertaken by "banks, hospitals, and
...ordered that all the striking workers (except those already terminated) to RTW export-oriented industries."
-PHIMCO brought petition before court assailing the assumption of jurisdiction of -It cannot be regarded as playing as vital a role in communication as other mass
Acting SOLE media. The small number of employees involved in the dispute, the employer's
  payment of "P10 million in income tax alone to the Philippine government," and the
WON SOLE acted w/ GADALEJ in assuming jurisdiction over the labor dispute in a fact that the "top officers of the union were dismissed during the conciliation
match factory? YES process," obviously do not suffice to make the dispute in the case at bar one
-A263(g) vests in SOLE the discretion to determine what IINI (industries "adversely affecting the national interest."
indispensable to national interest)
BUT power is not w/o limitation
-Free Telephone workers Union vs. MOLE: the coverage is limted to strikes or PROCEDURAL RULES
lockouts adversely affecting the national interest (as set by legislature)
-HERE: SOLE even admitted that the match factory dispute is not imbued w/
national interest; he did not even make any effort to touch on the indispensability
ARTICLES 213 TO 225, LABOR CODE
of the match factory to the national interest
-SOLE assumed jurisdiction based on the alleged "obtaining circumstances" and not ARTICLE 213. National Labor Relations Commission. - There shall be a National
on a determination that the industry involved in the labor dispute is one Labor Relations Commission which shall be attached to the Department of Labor
indispensable to the "national interest" and Employment for program and policy coordination only, composed of a
-THUS GADALEJ Chairman and fourteen (14) Members.
  Five (5) members each shall be chosen from among the nominees of the workers
and employers organizations, respectively. The Chairman and the four (4) remaining
GTE DIRECTORIES CORP. VS. SANCHEZ (1991), SUPRA members shall come from the public sector, with the latter to be chosen from
among the recommendees of the Secretary of Labor and Employment.
SUMMARY: GTE through the years adopted several Sales evaluation policies.
Upon assumption into office, the members nominated by the workers and
Pursuant to the latest sales policy, GTE issued 6 memoranda to its employees which
employers organizations shall divest themselves of any affiliation with or interest in
required the Premise Sales Reps (PSRs) to submit individual reports reflecting target
the federation or association to which they belong.
revenues as of deadlines set. None of these memoranda were followed by the
The Commission may sit en banc or in five (5) divisions, each composed of three (3)
employees, arguing that they were not consulted. As a result, 14 employees (some
members. Subject to the penultimate sentence of this paragraph, the Commission
of them Union officers) were dismissed. Union also filed notice of strike before the
shall sit en banc only for purposes of promulgating rules and regulations governing
68 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
the hearing and disposition of cases before any of its divisions and regional branches as there are regional offices of the Department of Labor and Employment,
branches, and formulating policies affecting its administration and operations. The sub-regional branches or provincial extension units. There shall be as many Labor
Commission shall exercise its adjudicatory and all other powers, functions, and Arbiters as may be necessary for the effective and efficient operation of the
duties through its divisions. Of the five (5) divisions, the first, second and third Commission. Each regional branch shall be headed by an Executive Labor Arbiter.
divisions shall handle cases coming from the National Capital Region and the parts (As amended by Section 6, Republic Act No. 6715, March 21, 1989).
of Luzon; and the fourth and fifth divisions, cases from the Visayas and Mindanao,
respectively; Provided that the Commission sitting en banc may, on temporary or ARTICLE 215. Appointment and Qualifications. - The Chairman and other
emergency basis, allow cases within the jurisdiction of any division to be heard and Commissioners shall be members of the Philippine Bar and must have engaged in
decided by any other division whose docket allows the additional workload and the practice of law in the Philippines for at least fifteen (15) years, with at least five
such transfer will not expose litigants to unnecessary additional expense. The (5) years experience or exposure in the field of labor-management relations, and
divisions of the Commission shall have exclusive appellate jurisdiction over cases shall preferably be residents of the region where they are to hold office. The
within their respective territorial jurisdictions. (As amended by Republic Act No. Executive Labor Arbiters and Labor Arbiters shall likewise be members of the
7700). Philippine Bar and must have been engaged in the practice of law in the Philippines
The concurrence of two (2) Commissioners of a division shall be necessary for the for at least seven (7) years, with at least three (3) years experience or exposure in
pronouncement of judgment or resolution. Whenever the required membership in the field of labor-management relations: Provided, However, that incumbent
a division is not complete and the concurrence of two (2) commissioners to arrive at Executive Labor Arbiters and Labor Arbiters who have been engaged in the practice
a judgment or resolution cannot be obtained, the Chairman shall designate such of law for at least five (5) years may be considered as already qualified for purposes
number of additional Commissioners from the other divisions as may be necessary. of reappointment as such under this Act. The Chairman and the other
The conclusions of a division on any case submitted to it for decision shall be Commissioners, the Executive Labor Arbiters and Labor Arbiters shall hold office
reached in consultation before the case is assigned to a member for the writing of during good behavior until they reach the age of sixty-five years, unless sooner
the opinion. It shall be mandatory for the division to meet for purposes of the removed for cause as provided by law or become incapacitated to discharge the
consultation ordained herein. A certification to this effect signed by the Presiding duties of their office.
Commissioner of the division shall be issued and a copy thereof attached to the The Chairman, the division Presiding Commissioners and other Commissioners shall
record of the case and served upon the parties. be appointed by the President, subject to confirmation by the Commission on
The Chairman shall be the Presiding Commissioner of the first division and the four Appointments. Appointment to any vacancy shall come from the nominees of the
(4) other members from the public sector shall be the Presiding Commissioners of sector which nominated the predecessor. The Executive Labor Arbiters and Labor
the second, third, fourth and fifth divisions, respectively. In case of the effective Arbiters shall also be appointed by the President, upon recommendation of the
absence or incapacity of the Chairman, the Presiding Commissioner of the second Secretary of Labor and Employment and shall be subject to the Civil Service Law,
division shall be the Acting Chairman. rules and regulations.
The Chairman, aided by the Executive Clerk of the Commission, shall have The Secretary of Labor and Employment shall, in consultation with the Chairman of
administrative supervision over the Commission and its regional branches and all its the Commission, appoint the staff and employees of the Commission and its
personnel, including the Executive Labor Arbiters and Labor Arbiters. regional branches as the needs of the service may require, subject to the Civil
The Commission, when sitting en banc, shall be assisted by the same Executive Clerk Service Law, rules and regulations, and upgrade their current salaries, benefits and
and, when acting thru its Divisions, by said Executive Clerks for the second, third, other emoluments in accordance with law. (As amended by Section 7, Republic Act
fourth and fifth Divisions, respectively, in the performance of such similar or No. 6715, March 21, 1989).
equivalent functions and duties as are discharged by the Clerk of Court and Deputy
Clerks of Court of the Court of Appeals. (As amended by Section 5, Republic Act No. ARTICLE 216. Salaries, benefits and other emoluments. - The Chairman and
6715, March 21, 1989). members of the Commission shall receive an annual salary at least equivalent to,
and be entitled to the same allowances and benefits as those of, the Presiding
ARTICLE 214. Headquarters, Branches and Provincial Extension Units. - The Justice and Associate Justices of the Court of Appeals, respectively. The Executive
Commission and its First, Second and Third divisions shall have their main offices in Labor Arbiters shall receive an annual salary at least equivalent to that of an
Metropolitan Manila, and the Fourth and Fifth divisions in the Cities of Cebu and Assistant Regional Director of the Department of Labor and Employment and shall
Cagayan de Oro, respectively. The Commission shall establish as many regional be entitled to the same allowances and benefits as that of a Regional Director of
69 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
said Department. The Labor Arbiters shall receive an annual salary at least purposes of this Code; (As amended by Section 10, Republic Act No. 6715, March
equivalent to, and be entitled to the same allowances and benefits as that of, an 21, 1989).
Assistant Regional Director of the Department of Labor and Employment. In no (b) To administer oaths, summon the parties to a controversy, issue subpoenas
case, however, shall the provision of this Article result in the diminution of existing requiring the attendance and testimony of witnesses or the production of such
salaries, allowances and benefits of the aforementioned officials. (As amended by books, papers, contracts, records, statement of accounts, agreements, and others
Section 8, Republic Act No. 6715, March 21, 1989). as may be material to a just determination of the matter under investigation, and to
testify in any investigation or hearing conducted in pursuance of this Code;
Chapter II (c) To conduct investigation for the determination of a question, matter or
POWERS AND DUTIES controversy within its jurisdiction, proceed to hear and determine the disputes in
ARTICLE 217. Jurisdiction of the Labor Arbiters and the Commission. - the absence of any party thereto who has been summoned or served with notice to
(a) Except as otherwise provided under this Code, the Labor Arbiters shall have appear, conduct its proceedings or any part thereof in public or in private, adjourn
original and exclusive jurisdiction to hear and decide, within thirty (30) calendar its hearings to any time and place, refer technical matters or accounts to an expert
days after the submission of the case by the parties for decision without extension, and to accept his report as evidence after hearing of the parties upon due notice,
even in the absence of stenographic notes, the following cases involving all workers, direct parties to be joined in or excluded from the proceedings, correct, amend, or
whether agricultural or non-agricultural: waive any error, defect or irregularity whether in substance or in form, give all such
1. Unfair labor practice cases; directions as it may deem necessary or expedient in the determination of the
2. Termination disputes; dispute before it, and dismiss any matter or refrain from further hearing or from
3. If accompanied with a claim for reinstatement, those cases that workers may file determining the dispute or part thereof, where it is trivial or where further
involving wages, rates of pay, hours of work and other terms and conditions of proceedings by the Commission are not necessary or desirable; and
employment; (d) To hold any person in contempt directly or indirectly and impose appropriate
4. Claims for actual, moral, exemplary and other forms of damages arising from the penalties therefor in accordance with law.
employer-employee relations; A person guilty of misbehavior in the presence of or so near the Chairman or any
5. Cases arising from any violation of Article 264 of this Code, including questions member of the Commission or any Labor Arbiter as to obstruct or interrupt the
involving the legality of strikes and lockouts; and proceedings before the same, including disrespect toward said officials, offensive
6. Except claims for Employees’ Compensation, Social Security, Medicare and personalities toward others, or refusal to be sworn, or to answer as a witness or to
maternity benefits, all other claims arising from employer-employee relations, subscribe an affidavit or deposition when lawfully required to do so, may be
including those of persons in domestic or household service, involving an amount summarily adjudged in direct contempt by said officials and punished by fine not
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with exceeding five hundred pesos (P500) or imprisonment not exceeding five (5) days,
a claim for reinstatement. or both, if it be the Commission, or a member thereof, or by a fine not exceeding
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided one hundred pesos (P100) or imprisonment not exceeding one (1) day, or both, if it
by Labor Arbiters. be a Labor Arbiter.
(c) Cases arising from the interpretation or implementation of collective bargaining The person adjudged in direct contempt by a Labor Arbiter may appeal to the
agreements and those arising from the interpretation or enforcement of company Commission and the execution of the judgment shall be suspended pending the
personnel policies shall be disposed of by the Labor Arbiter by referring the same to resolution of the appeal upon the filing by such person of a bond on condition that
the grievance machinery and voluntary arbitration as may be provided in said he will abide by and perform the judgment of the Commission should the appeal be
agreements. (As amended by Section 9, Republic Act No. 6715, March 21, 1989). decided against him. Judgment of the Commission on direct contempt is
immediately executory and unappealable. Indirect contempt shall be dealt with by
ARTICLE 218. Powers of the Commission. - The Commission shall have the power the Commission or Labor Arbiter in the manner prescribed under Rule 71 of the
and authority: Revised Rules of Court; and (As amended by Section 10, Republic Act No. 6715,
(a) To promulgate rules and regulations governing the hearing and disposition of March 21, 1989).
cases before it and its regional branches, as well as those pertaining to its internal (e) To enjoin or restrain any actual or threatened commission of any or all
functions and such rules and regulations as may be necessary to carry out the prohibited or unlawful acts or to require the performance of a particular act in any
labor dispute which, if not restrained or performed forthwith, may cause grave or
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irreparable damage to any party or render ineffectual any decision in favor of such reasonable notice, the said complainant and surety submitting themselves to the
party: Provided, That no temporary or permanent injunction in any case involving or jurisdiction of the Commission for that purpose. But nothing herein contained shall
growing out of a labor dispute as defined in this Code shall be issued except after deprive any party having a claim or cause of action under or upon such undertaking
hearing the testimony of witnesses, with opportunity for cross-examination, in from electing to pursue his ordinary remedy by suit at law or in equity: Provided,
support of the allegations of a complaint made under oath, and testimony in further, That the reception of evidence for the application of a writ of injunction
opposition thereto, if offered, and only after a finding of fact by the Commission, to may be delegated by the Commission to any of its Labor Arbiters who shall conduct
the effect: such hearings in such places as he may determine to be accessible to the parties
(1) That prohibited or unlawful acts have been threatened and will be committed and their witnesses and shall submit thereafter his recommendation to the
and will be continued unless restrained, but no injunction or temporary restraining Commission. (As amended by Section 10, Republic Act No. 6715, March 21, 1989).
order shall be issued on account of any threat, prohibited or unlawful act, except
against the person or persons, association or organization making the threat or ARTICLE 219. Ocular inspection. - The Chairman, any Commissioner, Labor Arbiter
committing the prohibited or unlawful act or actually authorizing or ratifying the or their duly authorized representatives, may, at any time during working hours,
same after actual knowledge thereof; conduct an ocular inspection on any establishment, building, ship or vessel, place or
(2) That substantial and irreparable injury to complainant’s property will follow; premises, including any work, material, implement, machinery, appliance or any
(3) That as to each item of relief to be granted, greater injury will be inflicted upon object therein, and ask any employee, laborer, or any person, as the case may be,
complainant by the denial of relief than will be inflicted upon defendants by the for any information or data concerning any matter or question relative to the object
granting of relief; of the investigation.
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainant’s property [ARTICLE 220. Compulsory arbitration. - The Commission or any Labor Arbiter shall
are unable or unwilling to furnish adequate protection. have the power to ask the assistance of other government officials and qualified
Such hearing shall be held after due and personal notice thereof has been served, in private citizens to act as compulsory arbitrators on cases referred to them and to fix
such manner as the Commission shall direct, to all known persons against whom and assess the fees of such compulsory arbitrators, taking into account the nature
relief is sought, and also to the Chief Executive and other public officials of the of the case, the time consumed in hearing the case, the professional standing of the
province or city within which the unlawful acts have been threatened or committed, arbitrators, the financial capacity of the parties, and the fees provided in the Rules
charged with the duty to protect complainant’s property: Provided, however, that if of Court.] (Repealed by Section 16, Batas Pambansa Bilang 130, August 21, 1981).
a complainant shall also allege that, unless a temporary restraining order shall be
issued without notice, a substantial and irreparable injury to complainant’s property ARTICLE 221. Technical rules not binding and prior resort to amicable settlement. -
will be unavoidable, such a temporary restraining order may be issued upon In any proceeding before the Commission or any of the Labor Arbiters, the rules of
testimony under oath, sufficient, if sustained, to justify the Commission in issuing a evidence prevailing in courts of law or equity shall not be controlling and it is the
temporary injunction upon hearing after notice. Such a temporary restraining order spirit and intention of this Code that the Commission and its members and the
shall be effective for no longer than twenty (20) days and shall become void at the Labor Arbiters shall use every and all reasonable means to ascertain the facts in
expiration of said twenty (20) days. No such temporary restraining order or each case speedily and objectively and without regard to technicalities of law or
temporary injunction shall be issued except on condition that complainant shall first procedure, all in the interest of due process. In any proceeding before the
file an undertaking with adequate security in an amount to be fixed by the Commission or any Labor Arbiter, the parties may be represented by legal counsel
Commission sufficient to recompense those enjoined for any loss, expense or but it shall be the duty of the Chairman, any Presiding Commissioner or
damage caused by the improvident or erroneous issuance of such order or Commissioner or any Labor Arbiter to exercise complete control of the proceedings
injunction, including all reasonable costs, together with a reasonable attorney’s fee, at all stages.
and expense of defense against the order or against the granting of any injunctive Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert
relief sought in the same proceeding and subsequently denied by the Commission. all efforts towards the amicable settlement of a labor dispute within his jurisdiction
The undertaking herein mentioned shall be understood to constitute an agreement on or before the first hearing. The same rule shall apply to the Commission in the
entered into by the complainant and the surety upon which an order may be exercise of its original jurisdiction. (As amended by Section 11, Republic Act No.
rendered in the same suit or proceeding against said complainant and surety, upon 6715, March 21, 1989).
a hearing to assess damages, of which hearing, complainant and surety shall have
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ARTICLE 222. Appearances and Fees. - The Commission shall decide all cases within twenty (20) calendar days from receipt
(a) Non-lawyers may appear before the Commission or any Labor Arbiter only: of the answer of the appellee. The decision of the Commission shall be final and
1. If they represent themselves; or executory after ten (10) calendar days from receipt thereof by the parties.
2. If they represent their organization or members thereof. Any law enforcement agency may be deputized by the Secretary of Labor and
(b) No attorney’s fees, negotiation fees or similar charges of any kind arising from Employment or the Commission in the enforcement of decisions, awards or orders.
any collective bargaining agreement shall be imposed on any individual member of (As amended by Section 12, Republic Act No. 6715, March 21, 1989).
the contracting union: Provided, However, that attorney’s fees may be charged
against union funds in an amount to be agreed upon by the parties. Any contract, ARTICLE 224. Execution of decisions, orders or awards.
agreement or arrangement of any sort to the contrary shall be null and void. (As (a) The Secretary of Labor and Employment or any Regional Director, the
amended by Presidential Decree No. 1691, May 1, 1980). Commission or any Labor Arbiter, or Med-Arbiter or Voluntary Arbitrator may, motu
proprio or on motion of any interested party, issue a writ of execution on a
Chapter III judgment within five (5) years from the date it becomes final and executory,
APPEAL requiring a sheriff or a duly deputized officer to execute or enforce final decisions,
ARTICLE 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final orders or awards of the Secretary of Labor and Employment or regional director,
and executory unless appealed to the Commission by any or both parties within ten the Commission, the Labor Arbiter or med-arbiter, or voluntary arbitrators. In any
(10) calendar days from receipt of such decisions, awards, or orders. Such appeal case, it shall be the duty of the responsible officer to separately furnish immediately
may be entertained only on any of the following grounds: the counsels of record and the parties with copies of said decisions, orders or
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor awards. Failure to comply with the duty prescribed herein shall subject such
Arbiter; responsible officer to appropriate administrative sanctions.
(b) If the decision, order or award was secured through fraud or coercion, including (b) The Secretary of Labor and Employment, and the Chairman of the Commission
graft and corruption; may designate special sheriffs and take any measure under existing laws to ensure
(c) If made purely on questions of law; and compliance with their decisions, orders or awards and those of the Labor Arbiters
(d) If serious errors in the findings of facts are raised which would cause grave or and voluntary arbitrators, including the imposition of administrative fines which
irreparable damage or injury to the appellant. shall not be less than P500.00 nor more than P10,000.00. (As amended by Section
In case of a judgment involving a monetary award, an appeal by the employer may 13, Republic Act No. 6715, March 21, 1989).
be perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the amount equivalent to ARTICLE 225. Contempt powers of the Secretary of Labor. - In the exercise of his
the monetary award in the judgment appealed from. powers under this Code, the Secretary of Labor may hold any person in direct or
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated indirect contempt and impose the appropriate penalties therefor.
employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to
work under the same terms and conditions prevailing prior to his dismissal or 2005 REVISED RULES OF PROCEDURE OF THE NLRC: RULES I THROUGH XI
separation or, at the option of the employer, merely reinstated in the payroll. The (NO COPY YET)
posting of a bond by the employer shall not stay the execution for reinstatement
provided herein.
To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter
shall impose reasonable penalty, including fines or censures, upon the erring JUSTIFICATION
parties.
In all cases, the appellant shall furnish a copy of the memorandum of appeal to the
other party who shall file an answer not later than ten (10) calendar days from NFL V. MOLE (1983)
receipt thereof.
-company: Zamboanga Wood Products

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-SHORT FACTS: Zamboanga Wood Products asked SOLE to assume jurisdiction over  The RTC had no jurisdiction over the subject matter of the case filed by some
the case it. After issuing RTWO, Company failed to comply with the same, even PSBA students, involving as it does a labor dispute over which the labor agencies
filing an MR. MOLE denied it.Company still failed to comply with it (even after 10 had exclusive jurisdiction. That the regular courts have no jurisdiction over labor
months from the issuance of the said order). Thus, NFL filed a mandamus case for disputes and to issue injunctions against strikes is well-settled.
the company to admit the striking employees back to work in accordance with the It may also be added that due to petitioner's intransigent refusal to attend the
RTWO. conciliation conferences called after the union struck, assumption of jurisdiction by
the Secretary of Labor and the issuance of a return-to-work order had become the
WON the Union could compel the company to execute the RTWO? YES only way of breaking the deadlock and maintaining the status quo ante pending
-it is provided by law resolution of the dispute.
-"The very nature of a return-to-work order issued in a certified case lends itself to The Solicitor General was correct when he stated that by assuming jurisdiction over
no other construction. the labor dispute, the Acting Secretary of Labor merely provided for a formal forum
 The certification attests to the urgency of the matter, affecting as it does an for the parties to ventilate their positions with the end in view of settling the
industry indispensable to the national interest. The order is issued in the exercise of dispute.
the court's (?)compulsory power of arbitration, and therefore must be obeyed until It is, therefore, error for the petitioners to allege that by the mere act of certifying a
set aside. labor
 To say that its effectivity must await affirmance on a motion for reconsideration is dispute for compulsory arbitration and issuing a return to work order, the Minister
not only to emasculate it but indeed to defeat its import, for by then the deadline of Labor and
fixed for the return to work would, in the ordinary course, have already passed and Employment thereby "enters the picture on the side of the Company," and violates
hence can no longer be affirmed insofar as the time element is concerned." the freedom of
-It is quite apparent, therefore, why this case calls for prompt decision. After this expression of workers engaged in picketing, "in utter subversion of the
long lapse of time, respondent Zamboanga Wood Products, Inc. had failed to abide constitutional rights of
by the clear and mandatory requirement of the law. workers."
It would negate the very purpose of a compulsory arbitration, which precisely is As contended by the SolGen, "there can be no such unconstitutional application (of
intended to call a halt to a pending strike by requiring that the status quo prior to BP 227) because all that Minister has done is to certify the labor dispute for
its to live up to such a norm. The inconsistencies between what was sought by arbitration and thereafter personally assume jurisdiction over it. He has not
private respondent, namely, compulsory arbitration, and the failure to admit the rendered any decision; he has not favored one party over the other.
striking employees back to work in the meantime, cannot be countenanced. As The exercise of the power, to be in full accord with the Constitution, must be with a
noted earlier, time is of the essence as far as the eightyone petitioners are view to the
concerned. protection of labor:
 . . . It must be stressed anew, however, that the power of compulsory arbitration,
PSBA V. NORIEL while allowable under the [1973] Constitution, and quite understandable in labor
disputes affected with a national interest, to be free from the taint of
In the opinion of Acting Secretary Noriel, the labor dispute adversely affected the
unconstitutionality, must be exercised in accordance with the
national interest, affecting as it did some 9,000 students.
constitutional mandate of protection to labor.
He was authorized by law to assume jurisdiction over the labor dispute, after
The arbiter then is called upon to take due care that in the decision to be reached,
finding that it adversely affected the national interest. This power is expressly
there is no
granted by Art. 263(g) of the Labor Code.
violation of "the rights of workers to self-organization, collective bargaining,
 Acting Secretary Noriel did exactly what he was supposed to do under the Labor
security of
Code. Petitioner contends that the Acting Secretary erred when he found that the
tenure, and just and humane conditions of work."
strike staged by respondent union and its members, who had already been
[Art. II, Sec. 9, 1973 Constitution.]
restrained by the RTC from picketing and barricading the main gate of the school,
 It is of course manifest that there is such unconstitutional application if a law "fair
was a fit subject of a return to work order.
on its face and impartial in appearance is applied and administered by a public
However, the Court finds that no error was made by the Acting Secretary.
authority with an evil eye and an unequal hand." [Yick Wo v. Hopkins, 118 U.S. 356,
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372 (1886).] It does not even have to go that far. An instance of unconstitutional -so PSBAmade its petition URGENT
application would be discernible if what is ordained by the fundamental law, the -Civil case before RTC dismissed for lack of jurisdiction
protection of law, is ignored or disregarded. -even with writ of execution, PSBA still refused to readmit the striking employees.
Thus, Motion for the issuance of alias writ of execution and motion to cite
F: Union filed w/ DOLE a PETITION FOR DIRECT CERTIFICATION petitioner in contempt was filed by Union in DOLE
-Union subsequently filed NOTICE TO STRIKE w/ BLR: -SOLE issued show cause order to PSBA, afterwards, SOLE Drilon issued order
 Union busting ordering petitioner to pay a fine of P10k and to immediately readmit striking
 Coercion of employees employees w/ full backwages
 Harrassment -so PSBA again amended its petition, providing supplements...
-PSBA opposed, prayed the denial of Petition for direct certification:  
 Union did not represent majority of non-academic personnel, attaching a ON THE LETTER OF REP. JABAR AND THE SUBSEQUENT ASSUMPTION OF
letter from one Sacro allegedly representing a group which composed the JURISDICTION OF SOLE
majority -f: Rep. Jabar, Vice-president of FFW, wrote to SOLE Drilon, saying that the Union
 The group represented by Sacro (PSBA-AL-Gro-WELL) filed its application members were picketing peacefully but Policed authorities have been prohibiting
for registration as a legitimate labor org w/BLR them from engaging in peaceful picketing and that management refused to attend
-Union, after voting 36 to 0, decided to go on strike the conciliation conferences. He then asked SOLE Drilon to issue RTWO and early CE
-conciliation conferences held by BLR but to no avail -PSBA argued that this was against Art VI, Section 14
-strike pushed through H: The argument is based on a wrongful premise that SOLE Drilon's only reason for
-complaint for ULP and for declaration of illegal strike w/ prayer for preliminary assuming jurisdiction is the letter by Rep. Jabar. However, it was shown that the
injunction filed by PSBA in NLRC Union petitioned for its direct certification; it filed a notice of strike; conciliation
-conciliation conferences against called but PSBA refused to attend the said conferences were held but to no avail (so basically summarized all the proceedings
conferences before and during the petition was filed with the SC)
-some PSBA students filed before RTC Manila, seeking to enjoin Union and its -given these circumstances, the existence of an unresolved labor dispute in PSBA
members from maintaining and continuing w/ their picket and from barricading needed the immediate attention of the labor authorities
themselves in front of the school's main gate. TRO issued by court -In SOLE Noriel's opinion, the labor dispute adversely affected the national interest.
>PSBA filed a prayer, joining the students in their prayer for injunction and filed a -SOLE was authorized to assume jurisdiction over the labor dispute, after finding
crossclaim against union. that it adversely affected national interest
>Union filed MTD: case involves labor dispute:: RTC has no jurisdiction -legal basis: Art 263 (g)
>Acting SOLE Noriel: assumed jurisdiction, saying the labor dispute involves an  
industry imbued with national interest ON WON ACTING SOLE ERRED IN FINDING THAT THE STRIKE WAS A FIT SUBJECT
 School has more or less 9k students OF A RTWO:
 Ongoing work stoppage unduly prejudices the students and will entail a. RTC was w/o jurisdiction over the subject matter of the case: it involved a
great loss in terms of time, effort and money to everyone concerned labor dispute over which the labor agencies had exclusive jurisdiction
 School is engaged in the promotion of physical, intellectual and emotional b. Due to PSBA's refusal to attend the conciliation conferences even after the
well-being of the country's youth union struck, assujption of jurisdiction by SOLE and the issuance of RTWO
...issued RTWO + ordered management to accept all returning employees had become the only way of breaking the deadlock and maintaining status
...parties enjoined to maintain status quo... quo
-Union members returned to work BUT were allegedly prevented by PSBA from c. By assuming jurisdiction over the labor dispute, SOLE merely provided a
doing so formal forum for the parties to ventilate their positions w/ the end view of
-Union thus filed Motion for issuance of writ of execution settling the dispute
-PSBA filed instant petition  
-SOLE Drilon: issued writ of execution ON WON ACTING SECRETARY ERRED WHEN HE ORDERED PETITIONER TO ACCEPT
ALL RETURNING EMPLOYEES DESPITE THE PENDENCY OF THE CASE FOR ULP
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H: no GADALEJ 2. The Company agrees to accept on a staggered basis all the employees who
-all the circumstances in this case, taken together, reveal the intensity of the have not returned to work
dispute and how it had worsened, which virtually left the Acting SOLE w/ no 3. The company reserves the right to prosecute all teh cases the company has
recourse but to assume jurisdiction over it filed and are pending...
-Acting SOLE merely implemented the clear mandate of the law: from time of 4. The Union assures and guarantees the re-establishment and maintenance
assumption of jurisdiction, SOLE would order all the striking employees to return to of industrial peace
work and for the employer to readmit the striking employees 5. Any grievance would be processed in accordance w/ the grievance
procedure in the CBA
6. Union guarantees that the agreement has been duly ratified by members
MANILA CORDAGE V. CIR (1971) -RTW provision in agreement immediately duly implemented, other than the
respondents herein
The purpose of a presidential certification is nothing more than to bring about
-President certified the said dispute for compulsory arbitration to CIR
soonest, thru arbitration by the industrial court, a fair and just solution of the
-Manila Cordage wrote to the President to withdraw or recall the certification. Even
differences between an employer and his workers regarding the terms and
with endorsement by Executive Secretary to the SOLE, President did not act on the
conditions of work in the industry concerned which in the opinion of the President
said request
involves the national interest, so that the damage such employer-worker dispute
-pending proceedings, a new CBA was signed between those who signed the RTW
might cause upon the national interest may be minimized as much as possible, if
agreement, except that, on behalf of the union, a certain Adolfo Espano signed
not totally averted by avoiding the stoppage of work as a result of a strike or lock
additionally as Exec. VP and none of the directors were included
out or any lagging of the activities of the industry or the possibility of these
-in 2 successive months, Manila Cordage again sought to take the case out of CIR by
contingencies which might cause detriment to such national interest.
either dismissal or suspension of the proceedings
This is the foundation of that court's jurisdiction in what may be termed as a
 The same persons who allegedly represented the Union filed a
certification case.
manifestation to the effect that there exists no labor dispute between the
Naturally, if the employer and the workers are able to arrive at an amicable
Company and the employees
settlement by free
-In the petition by Manila Cordage, there was mention of a so-called "small group of
and voluntary collective bargaining preferably thru a labor union, before the court is
strikers - being represented by Atty. Israel Bocobo", evidently the one referred to in
able to use its
the questioned order of the CIR as "200" others . The said "200" strikers actually
good offices, it is but in consonance with the objective of the Industrial Peace Act to
took part in the hearing , alleging that there was a TABUYAN GROUP which alleged
promote
that even before the Presidential Certification for compulsory arbitration, there was
unionism and free collective bargaining that the court should step out of the picture
already a RTW agreement between them and the management. However, the
and declare its
"200" strikers had nothing to do with the Tabuyan Group. The "200" strikers further
function in the premises at an end, except as it may become necessary to
alleged that the Tabuyan group is a spurious group headed by strike-breakers and
determine whether or not the agreement forged by the parties is not contrary to
the 200 strikers does not recognize the agreement. (thus there was still a strike
law, morals or public policy.
when the President certified the dispute for compulsory arbitration to CIR)
-CIR first order: upheld the President's order certifying the dispute to compulsory
F: factual background not stated because the lower court failed to make a finding
arbitration
on the principal factual issue raised by Union
...the number of employees involved in the case is immaterial. Sectionj 10 of RA 875
-Manila Cordage and the labor union had a labor dispute: Union declared a strike
merely requires that the labor dispute involve an industry indispensable to the
against the company.
national interest. President found that the business of the company is such industry
-Labor Union and the company allegedly entered into an agreement which provides
...on theory of exhaustion of administrative remedies (since President has not yet
the ff:
acted on their MR on the assumption of jurisdiction): Court may proceed to exercise
1. The Unin shall call off and withdraw the picketing at the company premises
jurisdiction provided the rights of the parties are not thereby prejudiced and vital
and officially terminate the strike
industrial peace as well as pre-conflict operation of the business concerned is

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restored. IF President recalls the certification, the parties may revert to their lagging of the activities of the industry or the possibility of these contingencies
positions prior thereto. which might cause detriment to such national interest. This is the foundation of that
...the existence of the RTW agreement does not bar a presidential certification of court's jurisdiction in what may be termed as a certification case.
the dispute inasmuch as the "relations between capital and labor are not merely -if there is indeed a valid CBA entered between the parties, no need for the
contractual, they are also impressed w/ public interest certification to Compulsory arbitration: the entering into a voluntary and valid
...but the workers who have been charged w/ criminal offenses in the conduct of collective bargaining agreement between an employer and a labor union of its
the strike should not return to work for the meanwhile workers before or after a presidential certification is issued under Section 10 of the
...ENDING: MTD and/or suspend the proceedings is hereby denied Industrial Peace Act ousts the jurisdiction of the Court of Industrial Relations, except
  as to the question of whether or not the agreement is contrary to law, morals or
WON CIR HAS NO JURISDICTION TO GIVE DUE COURSE TO TEH PRESIDENTIAL public policy, should such question be raised by any of the parties, and in this
CERTIFICATION connection and with respect to the laborers or workers, whether the question be
-ARGUMENT: raised by the Union as such or by any of the members thereof.
 There is no labor dispute  
 The business of the company is not indispensable to the national interest ON ARGUMENT THAT MERELY "200" EMPLOYEES - A MINORITY - PRAYED FOR THE
 Dispute invloves only a minority faction in the Union SAID CERTIFICATION BY THE PRESIDENT: MAJORITY rule is not an absolute on in
 Assumption of jurisdiction was set at naught by the RTW Agreement labor cases of this kind. Any number of members of a labor union may question, in
H: SEPARATION OF POWERS stops the court from ruling on the validity of the the appropriate cases, any agreement entered into by its officers or the majority if it
assumption of jurisdiction by the Prexi is contrary to law, morals or public policy.
Court is not constitutionally permitted to inquire into, in exactly the same manner  
that the Executive cannot refuse to accord respect and sanction to a decision of this Dispositive: affirm as to RTWO, except to the 33 strikers who are criminally charged
Court merely for the reason that in his opinion, the same is w/o sufficient factual or And remand the case to Court!
legal basis.
-on FACTUAL ISSUE NOT RESOLVED: on WON Tabuyan and his co-signers were INITIATING PARTY
legitimate officers of the respondent Union to validly represent the Union in the Initiated by the Secretary of Labor or the President.
signing of the disputed agreement Take note that the NLRC has no authority to initiate. The NLRC only comes into the
  picture when the secretary of labor or the President certifies the case to them.
WON THE CIR LOST ITS JURISDICTION UPON ENtRY INTO A RTW AGREEMENT BY
THE PARTIES: NO.
-there was no determination yet WON the alleged representatives of the union 1. DOLE SECRETARY
were indeed authorized to sign the agreements with the company in behalf of its
members
 If it is so authorized, then CIR would not have jurisdiction, or could have A263 (G)
suspended the proceedings before it due to the signed CBA and the RTW When, in his OPINION,
agreement  there exists a LABOR DISPUTE
 If they are not authorized, the jurisdiction remained  causing or likely to cause a STRIKE OR LOCKOUT
-purpose of presidential certification: nothing more than to bring about soonest,  in an INDUSTRY INDISPENDSABLE TO THE NATIONAL INTERESTS,
thru arbitration by the industrial court, a fair and just solution of the differences The Secretary of Labor and Employment MAY
between an employer and his workers regarding the terms and conditions of work 1. assume jurisdiction over the dispute and decide it OR
in the industry concerned which in the opinion of the President involves the 2. certify the same to the Commission (NLRC) for COMPULSORY ARBITRATION.
national interest, so that the damage such employer-worker dispute might cause Such assumption or certification shall have the effect of:
upon the national interest may be minimized as much as possible, if not totally AUTOMATICALLY enjoining the intended or impending strike or lock-out as specified
averted by avoiding the stoppage of work as a result of a strike or lock out or any in the assumption or certification order.

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1. From DETERMINING THE INDUSTRIES that, in HIS OPINION, are indispensable to
If one has already taken place at the time of assumption or certification, the national interest, and
1. All striking or locked-out employees shall IMMEDIATELY RETURN TO WORK 2. From intervening at any time and assuming jurisdiction over such labor dispute in
2. AND the employer shall IMMEDIATELY resume operations and READMIT all order to settle or terminate the same.
workers under the SAME terms and conditions prevailing before the strike or
lock-out. SAULOG V. LAZARO (1984)
-Union members held a strike (it appears that the Union held a strike because of
The Secretary of Labor and Employment or the Commission may seek the assistance
nonpayment of benefits and allowances in accordance with a supplemental CBA).
of law enforcement agencies to ensure the compliance with this provision as well as
Mediation and conciliation proceedings were conducted but to no avail. After all
with such orders as he may issue to enforce the same.
efforts exerted, MOLE issued RTWO. MOLE also ordered that the dispute be
In line with the national concerns for and highest respect accorder to the right of
submitted for arbitration. Accordingly, the parties filed their position papers, with
patients to life and health, strikes and lock-outs in HOSPITALS, CLINICS, and SIMILAR
the company even asking for the dismissal of the complaint of Robert Arevalo
MEDICAL INSTITUTIONS SHALL, to every extent possible, BE AVOIDED, and all
(representing the employees) allegedly on the ground that there was improper class
serious efforts, not only by labor and management but government as well, be
suit, aside from assailing the jurisdiction of the MOLE
exhausted to SUBSTANTIALLY MINIMIZE, if not prevent, their adverse effects on
-MOLE issued a resolution which ordered the employer to pay the allowances and
such life and health, through the exercise, however legitimate, by labor of its right
benefits, allegedly according to a supplemental CBA…
to strike and by management to lockout.
-the MOLE issued a RTWO even w/o a formal complaint or a notice of strike filed in
his office
In labor disputes adversely affecting the continued operation of such hospitals,
clinics or medical institutions,
WON A FORMAL COMPLAINT OR A NOTICE OF STRIKE IS REQUIRED BEFORE THE
1. it shall be the DUTY of striking union or locking out employer to provide and
MOLE COULD ASSUME JURISDICTION? NO
maintain an EFFECTIVE SKELETAL WORKFORCE of medical and other health
The petitioner has not shown that its business of public transportation covering not
personnel,
only the entire province of Cavite but also connecting Cavite to Metro Manila and to
2. Whose movement and services shall be unhampered and unrestricted, as are
various other provinces and cities is not covered within the meaning and purview of
necessary to insure the proper and adequate protection of the life and health of its
"vital industries" under Section 2(e) of the Rules and Regulations Implementing
patients, most especially emergency cases, for the duration of the strike or lockout.
Presidential Decree No. 823 as amended by Presidential Decree No. 849. As a vital
industry, the business of the petitioner is governed by the strict prohibition against
In such cases, therefore, the Secretary of Labor and Employment may
all forms of strikes, picketing, and lockouts found in said decrees which were
IMMEDIATELY assume, within twenty four (24) hours from knowledge of the
applicable at that time.
occurrence of such a strike or lockout, jurisdiction over the same or certify it to the
Commission for compulsory arbitration. For this purpose the contending parties are
WON THE MOLE FAILED TO COMPLY FIRST WITH THE REQUIREMENTS BEFORE IT
STRICTLY ENJOINED to comply with such orders, prohibitions and/or injunctions as
COULD ASSUME JURISDICTION? NO
are issued by the Secretary of Labor and Employment or the Commission, under
The petitioner contends that the Minister acted even before three conditions
pain of immediate disciplinary action, including dismissal or loss of employment
necessary to confer jurisdiction were present, namely:
status or payment by the locking-out employer of back wages, damages and other
(1) Conciliation and mediation over the labor disputes must first be exerted;
affirmative relief, even criminal prosecution against either or both of them.
(2) The Bureau of Labor Relations the Regional Office, the National Labor Relations
Commission or Voluntary Arbitrator should be unable to resolve the dispute within
2. PRESIDENT the reglementary period; and
(3) Assumption of jurisdiction may be made only upon the advice and
A263 (G) recommendation of the Under Secretary of Labor and Employment, the Chairman
of the National Labor Relations Commission, and the Director of the Bureau of
The foregoing notwithstanding, the President of the Philippines shall not be
Labor Relations.
precluded
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HERE: efforts at mediation and conciliation had already been taken but the same -the petitioner was initially given the chance to air its views during the conference
were not successful. Significantly, the return to work order expressly declared that presided by Brigadier General Prosper Olivas. There were various other occasions
the Ministry of Labor and Employment shall continue its conciliation efforts and during the proceedings below — not only at the conciliation conferences but before
would still try to bring about an amicable settlement even at that stage. More the respondent Minister and the respondent Presidential Assistant — where the
conciliation conferences actually followed the return to work order but the parties petitioner not only had the opportunity to be heard but where it was actually
remained deadlocked on the main issues. There was, therefore, a failure to resolve heard.
the disputes through the very methods which the petitioner now claims should first -Saulog submitted a petition paper, a MR,
have been applied
- Confronted with the strike which virtually paralyzed the transportation services of UNION OF FILIPRO EMPLOYEES VS. NESTLE PHILIPPINES (1990)
the petitioner and taking into account the inability of his Ministry's intervention to
F: Due to the impending expiration of the existing collective bargaining agreement
bring about an amicable settlement between the parties, the Minister rightly
(CBA) between Nestlé and UFE-DFA-KMU, the Presidents of the Alabang and
assumed jurisdiction. He did not have to wait for any notice of strike or formal
Cabuyao Divisions of UFE-DFA-KMU, informed Nestlé of their intent to “open our
complaint about a strike already in progress before he could exercise the powers
new Collective Bargaining Negotiation for the year 2001-2004 x x x as early as June
given to him by law to avoid the strikes, picketing, or lockouts contemplated in the
2001.”
grant of power.
- Nestlé acknowledged receipt of the aforementioned letter. It also informed UFE-
-MOLE DOESN’T HAVE TO WAIT: An actual strike effectively paralyzing an industry
DFA-KMU that it was preparing its own counter-proposal and proposed ground
where strikes were not allowed and compulsory arbitration was mandated, called
rules that shall govern the conduct of the collective bargaining negotiations.
for his immediate action.
- Nestlé underscored its position that “unilateral grants, one-time company grants,
company-initiated policies and programs, which include, but are not limited to the
SAULOG NOW ESTOPPED FROM ASSAILING JURISDICTION OF MOLE: IT PRAYED
Retirement Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their
FOR AFFIRMATIVE RELIEF
very nature not proper subjects of CBA negotiations and therefore shall be excluded
-a party cannot invoke the jurisdiction of a court to secure affirmative relief against
therefrom.”
his opponent and after failing to obtain such relief, repudiate or question that same
- In addition, it clarified that with the closure of the Alabang Plant, the CBA
jurisdiction.
negotiations will only be applicable to the covered employees of the Cabuyao Plant;
hence, the Cabuyao Division of UFE-DFA-KMU became the sole bargaining unit
WON THE CASE FILED BY ROBERT AREVALO IS A VALID CLASS SUIT? YES
involved in the subject CBA negotiations.
-there was an agreement between the parties to limit the number of
- Thereafter, dialogue between the company and the union ensued.
representatives of the striking employees. The representatives chose Robert
- Nestlé, claiming to have reached an impasse in said dialogue, requested the
Arevalo to be their leader and the spokesman for all the strikers. It is true that the
National Conciliation and Mediation Board to conduct preventive mediation
private respondents failed to state their individual names as the real parties in
proceedings between it and UFE-DFA-KMU.
interest when their position paper was filed. However, this defect was cured
- Conciliation proceedings nevertheless proved ineffective. Complaining, in essence,
because the respondent Minister, taking cognizance of the petitioner's objections,
of bargaining deadlock – pertaining to economic issues, i.e., “retirement (plan),
ordered the respondents to specify who were the "complainants numbering about
panel composition, costs and attendance, and CBA,” UFE-DFA-KMU filed a Notice of
250 more or less (who) are all regular drivers, conductors, conductresses, and
Strike .
mechanics of respondent and is (sic) represented by their leader Robert Arevalo ..."
- One week later, another Notice of Strike was filed by the UFE-DFA-KMU, this time
predicated on Nestlé’s alleged unfair labor practices i.e., bargaining in bad faith in
ON ARGUMENT THAT THE EXCLUSIVE BARGAINING REPRESENTATIVE IS THE REAL
that it was setting pre-conditions in the ground rules by refusing to include the issue
PARTY IN INTEREST, NOT THE EMPLOYEES REPRESENTED BY ROBERT AREVALO?
of the Retirement Plan in the CBA negotiations.
NO MERIT
- In view of the looming strike, Nestlé filed with the DOLE a Petition for Assumption
- it does not appear from the records that the respondents are members thereof.
of Jurisdiction
- Sto. Tomas issued an Order assuming jurisdiction over the subject labor dispute
WON THERE WAS A VIOLATION OF DUE PROCESS ON THE PART OF SAULOG? NO
between the parties stating that any strike or lockout is enjoined, that the parties

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are further directed to meet and convene for the discussion of the union proposals - In Nestlé Philippines, Inc. v. NLRC, ironically involving the same parties herein, the
and company counter-proposals before the National Conciliation and Mediation Court has had the occasion to affirm that a retirement plan is consensual in nature.
Board and that if no settlement of all the issues is reached, the Office shall define The Court, through Madame Justice Griño-Aquino, declared that:
the outstanding issues and order the filing of position papers for a ruling on the The fact that the retirement plan is non-contributory, i.e., that the employees
merits. contribute nothing to the operation of the plan, does not make it a non-issue in the
- UFE-DFA-KMU sought reconsideration of the Assumption of Jurisdiction Order CBA negotiations. As a matter of fact, almost all of the benefits that the petitioner
- In an Order, Sec. Sto. Tomas denied the aforequoted motion for reconsideration has granted to its employees under the CBA – salary increases, rice allowances,
- The employee members of UFE-DFA-KMU at the Nestlé Cabuyao Plant went on midyear bonuses, 13th and 14th month pay, seniority pay, medical and
strike. hospitalization plans, health and dental services, vacation, sick & other leaves with
- Notwithstanding a Return-To-Work Order, the members of UFE-DFA-KMU pay – are non-contributory benefits. Since the retirement plan has been an integral
continued with their strike and refused to go back to work as instructed. Thus, Sec. part of the CBA since 1972, the Union’s demand to increase the benefits due the
Sto. Tomas sought the assistance of the Philippine National Police (PNP) for the employees under said plan, is a valid CBA issue.
enforcement of said order. x x x [E]mployees do have a vested and demandable right over existing benefits
- At the hearing called, Nestlé and UFE-DFA-KMU filed their respective position voluntarily granted to them by their employer. The latter may not unilaterally
papers. withdraw, eliminate or diminish such benefits
- Tomas denied the motion for reconsideration of UFE-DFA-KMU. - In the case at bar, it cannot be denied that the CBA that was about to expire at
- Frustrated with the foregoing turn of events, UFE-DFA-KMU filed a petition for that time contained provisions respecting the Retirement Plan. As the latter benefit
certiorari with application for the issuance of a temporary restraining order or a was already subject of the existing CBA, the members of UFE-DFA-KMU were only
writ of preliminary injunction before the Court of Appeals. exercising their prerogative to bargain or renegotiate for the improvement of the
- Meanwhile, in an attempt to finally resolve the crippling labor dispute between terms of the Retirement Plan just like they would for all the other economic, as well
the parties, then Acting Secretary of the DOLE, Hon. Arturo D. Brion, came out with as non-economic benefits previously enjoyed by them.
an Order - The purpose of collective bargaining is the acquisition or attainment of the best
- UFE-DFA-KMU moved to reconsider the aforequoted position of the DOLE. possible covenants or terms relating to economic and non-economic benefits
- Secretary of the DOLE, Hon. Sto. Tomas, issued the last of the assailed Orders. This granted by employers and due the employees. The Labor Code has actually imposed
order resolved to deny the preceding motion for reconsideration of UFE-DFA-KMU. as a mutual obligation of both parties, this duty to bargain collectively.
- Undaunted still, UFE-DFA-KMU, for the second time, went to the Court of Appeals - The duty to bargain collectively is categorically prescribed by Article 252 of the
- The Court of Appeals, acting on the twin petitions for certiorari, determined the said code. It states:
issues in favor of UFE-DFA-KMU ART. 252. MEANING OF DUTY TO BARGAIN COLLECTIVELY. – The duty to bargain
- Dissatisfied, both parties separately moved for the reconsideration of the collectively means the performance of a mutual obligation to meet and confer
abovequoted decision promptly and expeditiously and in good faith for the purpose of negotiating an
- The Court of Appeals stood pat in its earlier pronouncements and denied the agreement with respect to wages, hours of work, and all other terms and conditions
motions for reconsideration of employment including proposals for adjusting any grievances or questions arising
  under such agreement and executing a contract incorporating such agreement if
ISSUES requested by either party, but such duty does not compel any party to agree to a
1. WON the Retirement Plan was a proper subject to be included in the CBA proposal or to make any concession.
negotiations between the parties hence, negotiable. - Further, Article 253, also of the Labor Code, defines the parameter of said
2. WON the assumption powers of the Secretary of Labor and Employment should obligation when there already exists a CBA, viz:
have been limited merely to the grounds alleged in the second Notice of Strike ART. 253. DUTY TO BARGAIN COLLECTIVELY WHEN THERE EXISTS A COLLECTIVE
3. WON Nestlé was guilty of unfair labor practice BARGAINING AGREEMENT. – The duty to bargain collectively shall also mean that
  either party shall not terminate nor modify such agreement during its lifetime.
HELD However, either party can serve a written notice to terminate or modify the
1. YES agreement at least sixty (60) days prior to its expiration date. It shall be the duty of
both parties to keep the status quo and to continue in full force and effect the
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terms and conditions of the existing agreement during the sixty day period and/or Nestlé’s proposition involves an appraisal of the exercise of its management
until a new agreement is reached by the parties. prerogative.
- In demanding that the terms of the Retirement Plan be opened for renegotiation, - Employers are accorded rights and privileges to assure their self-determination
the members of UFE-DFA-KMU are acting well within their rights as we have, and independence and reasonable return of capital. This mass of privileges
indeed, declared that the Retirement Plan is consensual in character; and so, comprises the so-called management prerogatives. In this connection, the rule is
negotiable. that good faith is always presumed. As long as the company’s exercise of the same
  is in good faith to advance its interest and not for purpose of defeating or
2. NO. circumventing the rights of employees under the law or a valid agreement, such
- Declaring the Secretary of the DOLE to have acted with grave abuse of discretion exercise will be upheld.
for ruling on substantial matters or issues and not restricting itself merely on the Disposition Petition seeking that Nestlé be declared to have committed unfair labor
ground rules, the appellate court and UFE-DFA-KMU would have the Court treat the practice was DENIED. The Petition was PARTLY GRANTED, the ruling of the Court of
subject labor dispute in a piecemeal fashion. Appeals was REVERSED in so far as it ruled that the Secretary of the DOLE gravely
- The power granted to the Secretary of the DOLE by Paragraph (g) of Article 263 of abused her discretion in failing to confine her assumption of jurisdiction power over
the Labor Code, authorizes her to assume jurisdiction over a labor dispute, causing the ground rules of the CBA negotiations; but the ruling of the Court of Appeals on
or likely to cause a strike or lockout in an industry indispensable to the national the inclusion of the Retirement Plan as a valid issue in the collective bargaining
interest, and correlatively, to decide the same. negotiations between UFE-DFA-KMU and Nestlé is AFFIRMED.
- In the case at bar, the Secretary of the DOLE simply relied on the Notices of Strike
that were filed by UFE-DFA-KMU. Thus, based on the Notices of Strike filed by UFE-
DFA-KMU, the Secretary of the DOLE rightly decided on matters of substance. INTERNATIONAL PHARMACEUTICALS VS. SOLE (1992)
- The issue of whether or not the Secretary of the DOLE could decide issues
incidental to the subject labor dispute had already been answered in the
affirmative. The Secretary’s assumption of jurisdiction power necessarily includes
FEATI UNIVERSITY VS. BAUTISTA (1966)
matters incidental to the labor dispute, that is, issues that are necessarily involved
in the dispute itself, not just to those ascribed in the Notice of Strike; or, otherwise
submitted to him for resolution.
- In any event, the query as to whether or not the Retirement Plan is to be included MANILA CORDAGE VS. CIR (1971)
in the CBA negotiations between the parties ineluctably dictates upon the Secretary
of the DOLE to go into the substantive matter of the CBA negotiations.
 
VOLUNTARY ARBITRATION
3. NO.
- Basic is the principle that good faith is presumed and he who alleges bad faith has Notes:
the duty to prove the same. By imputing bad faith unto the actuations of Nestlé, it
was UFE-DFA-KMU, therefore, who had the burden of proof to present substantial ARBITRABLE ISSUES
evidence to support the allegation of unfair labor practice. Art. 261 EOJ over
- A perusal of the allegations and arguments raised by UFE-DFA-KMU in the  All unresolved grievances arising from
Memorandum will readily disclose that it failed to discharge said onus probandi as  Interpretation or implementation of CBA
there is still a need for the presentation of evidence other than its bare contention  Interpretation and enforcement of company personnel policies
of unfair labor practice in order to make certain the propriety or impropriety of the  Violations of CBA not anymore ULP
unfair labor practice charge hurled against Nestlé. X: Gross violations of CBA: flagrant and malicious refusal to comply with the
- There is no per se test of good faith in bargaining. Good faith or bad faith is an economic provisions of the CBA
inference to be drawn from the facts, to be precise, the crucial question of whether -NLRC, its regional offices and Regional Directors should not entertain disputes
or not a party has met his statutory duty to bargain in good faith typically turns on under EOJ of VA and should immediately refer it to VA
the facts of the individual case. Necessarily, a determination of the validity of the
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worked on 22 Saturdays - as proven by the time cards plus a joint affidavit by 150
Art. 262: Also, if parties agree, all other labor disputes including employees
ULP and -Arbitrator argued that the time cards are defective:
bargaining deadlocks • There should be 3,300 time cards (22 Saturdays for 150 employees) and
may be included w/n jurisdiction of VA not 589
• That there were 589 timecards allegedly rescued before they were to be
burned
ETERNIT EMPLOYEES AND WORKERS UNION V. JESUS DE VEYRA • Time cards were picked up at random
• Inspected one of the timecards, showed that the employees did not work
Summary: Union filed complaint to claim benefits from Employer but some were
on 22 Saturdays and so the joint affidavits contained falsity
not awarded to them due to the insufficiency of the evidence presented by the
Union. The union moved for the reopening of the case so they would be able to
WON GADALEJ on part of arbitrator? NO
present additional evidence to prove their claims but the VA still found that their
The voluntary arbitrator had plenary jurisdiction and authority to interpret the
evidence were not sufficient. They now alleged GADALEJ on the part of the VA for
agreement to arbitrate and to determine the scope of his own authority subject to
requiring them to present evidence when it should have been the ER who would
the certiorari jurisdiction of the court
prove their claim. Court held no GADALEJ because the Union was the one in fact
-includes not merely the determination of the question of whether or not the claim
who were requesting to present evidence and they could not now contest the
is to be granted but also, in the affirmative case, the amount thereof (Sime Darby
decision of the VA that they have not presented evidence sufficient to prove their
Pilipinas v. Magsalin)
claims.
-the decision of the voluntary arbitrator chosen by the parties is final, executory and
not appealable. This is true especially when the parties have stipulated to that
FACTS
effect in their submission agreement as in the present case
-petition for certiorari under R654: annulment of the order of the voluntary
-purpose of arbitration: preserve industrial peace and avoid unnecessary litigation
arbitrator
between the parties
-Petitioner: Labor union
-on claim that the union should not be compelled to present evidence: basic rule in
-ER: Corporation engaged in the manufacture of asbestos cement products
evidence that each party must prove that he is entitled to the same.
-Dispute: Some CBA provisions were not followed by the Corporation
-records show that after the issuance of the award by the VA, the union on its own
-so Union filed complaint w/ Ministry of Labor
initiative moved to reopen the case and manifested that it will present newly
-case was certified for VA
discovered evidence. NOW that it was allowed to odo so, it cannot alleged that they
-Issues submitted for resolution:
have no legal obligation to show evidence
• Privilege of buying second class sheets
-No arbitrariness on part of arbitrator because proceedings considered in totality.
• Overtime work on Saturday
Computation of salaries, allowances and even OT are factual questions submitted
• Cash value of unused vacation and sick leave
before VA. Court had no authority to evaluate the sufficiency of evidence before a
• Right of 23 reinstated employees to vacation and sick leave
labor officer. Given highest respect
• Right of the same to 13th month pay
• Right of the same to P2 adjustment pay
-VA (1st award): rendered an award granting claims of union except for overtime
and adjustment pay (dated March 16) MANEJA V. NLRC
-union filed Motion to re-open case w/ re issue no. 2 (dated April 11) Summary: Maneja and another telephone operator were dismissed from service so
-VA granted, allowed petitioner to present its evidence on overtime work they filed a case against their employer before LA. They were allegedly dismissed in
-VA (2nd Award, dated January 1979): affirmed earlier decision accordance with company personnel policies so the LA said he actually has no
-Union filed R65 petition: GADALEJ because they were required to present jurisdiction over the case but assumed the same nevertheless because he has
evidence on overtime work when company already admitted that it had in fact jurisdiction over termination disputes. Appealed to NLRC, NLRC reversed LA saying
overpaid petitioner's claim for overtime work (the members of the union actually that the case should have underwent VA. On appeal, court held that the

81 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
termination dispute is w/n LA’s jurisdiction because this case does not involve an YES
unresolved grievance involving company personnel policy (Art 217c read w/ 261). A. THIS IS NOT AN UNRESOLVED GRIEVANCE AND THE INTERPRETATION AND
Where the dispute is just in the interpretation, implementation or enforcement IMPLEMENTATION OF COMPANY PERSONNEL POLICY WAS MERELY A COROLLARY
stage, it may be referred to the grievance machinery set up the Collective ISSUE
Bargaining Agreement or by voluntary arbitration. Where there was already actual ART 217: Rule on Jurisdiction of LA
termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter. Art. 217. Jurisdiction of Labor Arbiters and the Commission. a) Except as otherwise
provided under this Code the Labor Arbiters shall have original and exclusive
Facts: jurisdiction to hear and decided within thirty (30) calendar days after the
Maneja was a telephone operator in Manila Midtown Hotel. On 13 Feb 1990, fellow submission of the case by the parties for decision without extension even in the
telephone operator Loleng received a request for long distance call (RLDC) form and absence of stenographic notes, the following cases involving all workers, whether
P500 deposit from hotel guest Ieda, brought by a page boy. The call was agricultural or non-agricultural:
unanswered, the P500 forwarded to the cashier. Another RLDC form and P500 1. Unfair labor practice cases;
deposit was given by Ieda, through a page boy, but the call was again unanswered. 2. Termination disputes;
Maneja followed the call up. 3. If accompanied with a claim for reinstatement, those cases that workers may file
-Hotel cashier inquired upon P1000 deposit 15 Feb. Loleng found the P500 deposit involving wages, rates of pay, hours of work and other terms and conditions of
inserted in the guest folio while the second P500 was discovered inside the folder employment;
for cancelled calls. 4. Claims for actual, moral, exemplary and other forms of damages arising from the
-alleged act of tampering (admitted): Maneja saw that the 2 nd RLDC was not time- employer-employee relations;
stamped, so she time-stamped it. But seeing that the date was wrong, she changed 5. Cases arising from any violation of Article 264 of this Code, including questions
the date, then delivered it with the money to the cashier. The second deposit was involving the legality of strikes and lockouts;
returned to Ieda. 6. Except claims for Employees Compensation, Social Security, Medicare and
-Chief telephone operator issued a memorandum to Loleng and Maneja to explain maternity benefits, all other claims, arising from employer-employee relations,
the 15 Feb incident. Both submitted their written explanations but after that, the including those of persons in domestic or household service, involving an amount
Chief telephone operator made a report and recommendation terminating the two exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with
on alleged violations of the Offenses Subject to Disciplinary Actions (OSDA). Notice a claim for reinstatement.
of termination issued to them, which they refused to sign saying it was still under b) The commission shall have exclusive appellate jurisdiction over all cases decided
protest. The company even filed a criminal case for estafa against them but were by Labor Arbiters.
dismissed in the prosecutor level. c) Cases arising from the interpretation or implementation of collective bargaining
-Maneja filed a case for illegal dismissal before the LA (which later included agreements and those arising from the interpretation or enforcement of company
complaint for unpaid wages, unpaid vacation leave conversion and moral damages) personel policies shall be disposed of by the Labor Arbiter by referring the same to
-position papers were submitted, case set for hearing, trial on the merits ensued the grievance machinery and voluntary arbitration as may be provided in said
LA: Maneja was illegally dismissed and actually, he has no jurisdiction to try the case agreements.
since it involved the implementation and interpretation of company personnel …termination cases fall squarely w/n jurisdiction of LA
policies BUT NEVERTHELESS, he assumed jurisdiction because they have EOJ over …Art. 217 c should be read in conjunction w/ Art 261 which provides that the VA
termination cases. Employer appealed to NLRC has jurisdiction over UNRESOLVED GRIEVANCES arising from the interpretation and
NLRC: LA had no jurisdiction because it should have undergone VA. MR denied so implementation of company personnel policies
went to SC for R65 GADALEJ -Where the dispute is just in the interpretation, implementation or enforcement
stage, it may be referred to the grievance machinery set up the Collective
ISSUE Bargaining Agreement or by voluntary arbitration. Where there was already actual
1. WON LA had jurisdiction over illegal dismissal case termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter.
2. WON Maneja was illegally dismissed -why not an unresolved grievance arising from the interpretation and
implementation of the CBA/company personnel policy: grievance procedure not
HELD resorted to because there was a practice in the hotel that in questioning the legality
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of a termination, the dismissed employee would automatically go to the LA, the management to enable hom to prepare adequately for his defense, including
whether the termination arose from the interpretation or implementation of legal representation.
company personnel policy
…this is primarily a case for illegal dismissal, and the interpretation and
implementation of company personnel policy was merely a corollary issue PAL V. NLRC (1997) [CBA VIOLATIONS]
(Pantranco North Star v. NLRC)
Violations of collective bargaining agreements were no longer deemed unfair labor
practices - except those gross in character i. e. flagrant and malicious refusal to
B. COMPANY ESTOPPED BY LACHES FROM QUESTIONING THE JURISDICTION OF THE
comply with the economic provisions thereof - and were considered mere grievances
LA
resolvable through the appropriate grievance machinery, or voluntary arbitration
-Company actively participated in the proceedings before the LA and has not
provided in the CBA.
questioned the jurisdiction of the LA during the said proceedings so should not have
Facts:
been allowed to question it.
-Micabalo and Enriquez were union members. Micabalo was hired as ticket freight
clerk while Enriquez was a load control clerk. Both were assigned at the Davao
2. YES
Stationof PAL
requisites of a valid dismissal:
-PAL conducted an audit check of its Davao Station and found that some of its
(1) the dismissal must be for any of the causes expressed in the Article 282 of the
employees procured for themselves teh money paid by the passengers for their
Labor Code, and
tickets and then charged the said tickets to their or their co-employees' credit cards.
(2) the employee must be given an opportunity to be heard and to defend himself
-how they covered it up: the audit coupon and the flight coupon of the tickets were
made to carry different entries, i.e., "Cash/Charge" or simply "Charge" in the audit
(1) GROUNDS for dismissal:
coupon, and "Cash" or no entry in the flight coupon.
a. culpade carelessness, negligence, failure to follow specific instruction(s) or
-how discovered: 80The flight coupon and audit coupon of the tickets revealed
established procedure(s) under OSDA 1.11
different entries in the "Form of Payment" box.  In the flight coupon, the box is
b. having forged or falsified official document(s) under OSDA 2.01.
either empty or carries the notation "Cash".  In the audit coupon, the mode of
HERE:
payment reflected is either  "Cash/Charge" or "Charge" only.
-It was shown that the usual procedures for requests for long distance calls were
-Micabalo was investigated and was found to have used his VISA credit card to pay
not usually followed in the hotel when circumstances warrant. For instance, the
for 4 plane tickets of various passengers. He was administratively charged for
RLDC forms and the deposits are brought by the page boy directly to the operators
violation of PAL's Code of Discipline.Micabalo was placed under preventive
instead of the cashiers if the latter are busy and cannot attend to the same.
suspension
Furthermore, she avers that the telephone operators are not concious of the serial
-Micabalo alleged that he was just paying at the request of the said passengers and
numbers in the RLDCs and at times, the used RLDCs are recycled. Even the page
that he did not pocket any cash payment because there weren't any. Further, he did
boys do not actually check the serial numbers of all RLDCs in one batch, except for
not intend to defraud the company and was merely rendering public service so he
the first and the last.
contests the application to him of Section 5 Article 8 of the Code of Discipline
-On charges of taking money: all the money were accounted for
-on falsification charges: he changed the entry in the audit coupon to speak the
-on the alleged tampering: they admitted the tampering of the altered date to
truth
reflect the true date of the transaction without malice on their part
-Micabalo was charged with the same charges of fraud and falsification for 2 more
times
(2) on Due process requirements: not sufficient
-he was later on served with notice of dismissal
-no hearing was ever conducted by private respondent before petitioner was
-The same situation was found with Enriquez, and the same made the similar
dismissed. While it may be true that petitioner submitted a written explanation, no
defense that he was just using his credit card to accommodate a friend. He was also
hearing was actually conducted before her employment was terminated. She was
dismissed
not accorded the opportunity to fully defend herself.
-PAL also dismissed 5 other employees
-Consultations or conferences may not be a substitute for the actual holding of a
hearing. Every opportunity and assistance must be accorded to the employee by
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-4 employees joined Micabalo and Enriquez for filing illegal dismissal cases against respondents have complained that they are the subject of harassment by PAL for
PAL before Regional Arbitration branch of NLRC their union activities.
- for all the employees (except Micabalo and Enriquez), PAL agreed to consider -Violation of CBA: Thus, as of March 21, 1989, violations of collective bargaining
them resigned w/o benefits and to desist from filing any criminal case against them agreements were no longer deemed unfair labor practices - except those gross in
-so Micabalo and Enriquez alleged that the charges against them were brought character - and were considered mere grievances resolvable through the
because of their membership in the union: filed before LA ULP and illegal appropriate grievance machinery, or voluntary arbitration provided in the CBA.
termination cases Jurisdiction over such violations was withdrawn from the Labor Arbiters and vested
LA: ifo Ees - they were illegally dismissed in the voluntary arbitrator, the former (including the Commission itself, its Regional
-the investigation conducted by the ER were the offshoot of several grievance suits Offices, and the Regional Directors of the Department of Labor and Employment)
filed by PAL as well as the Ees active participation in the strike held in 1989 (which being in fact enjoined not to "entertain disputes, grievances or matters under the
LA found to be highly suspicious) exclusive and original jurisdiction of the Voluntary Arbitrators or panel of Voluntary
-no damage shown to have been caused to PAL Arbitrators and *** (instead) immediately dispose and refer the same to the
-Ees should be reinstated Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining
NLRC: affirmed Agreement."
-PAL may not be regarded as precluded from impugning the jurisdiction of the
WON the NLRC committed grave abuse of discretion amounting to excess of or Arbiter and the Commission because, at the time that the proceedings were
want of jurisdiction when it affirmed the Labor Arbiter's decision that private initiated before the former, adjudged by him, and thereafter appealed to and
respondents were illegally dismissed? YES resolved by the latter adversely to PAL, the law amending their jurisdiction (R.A.
-NLRC acted with GAD in rendering the assailed Resolution as the same is not 6715) had not come into effect.
supported by substantial evidence. As correctly observed by the SolGen, the NLRC -As already observed, it was only after PAL's motion for reconsideration of
and the LA committed GAD when they gave more credence to the illogical November 21,1988 had been filed and was awaiting resolution before the NLRC
suppositions and inferences proffered by private respondents and disregarded the that said law became effective, on March 21, 1989. Under the circumstances, no
established evidence that they committed falsification and diverted the cash estoppel of the right to question jurisdiction can be ascribed to
payments made by the passengers through the use of credit cards for their personal PAL.
gain and satisfaction. Private respondents cannot hide behind the mantle of
unionism for the mantle has never been conceived to shield criminal acts of union ARBITRATOR
officials perpetrated to pursue personal gains.
1. Selection – A260
-PAL presented concrete evidence of repeated wrong doings by private
1) As stated in CBA (or selection procedure of a VA), preferably from a list of
respondents. The different entries in the box for the mode of payment for the
qualified VA’s accredited by NCMB
tickets purchased found in the audit coupon and the flight coupon clearly showed
2) If parties fail to select, the Board (NCMB) shall select VA pursuant to
the falsifications committed by private respondents. Indeed, the private
selection procedure as stated in CBA
respondents admitted these falsifications. Micabalo cannot pull a hat trick by
ARTICLE 260. Grievance machinery and voluntary arbitration. - The parties to a
alleging "the discrepancy between the entries in the audit coupon and flight coupon
Collective Bargaining Agreement shall include therein provisions that will ensure the
of the subject tickets was not intended to conceal an irregularity, rather it was
mutual observance of its terms and conditions. They shall establish a machinery for
intended to reveal an irregularity inadvertently committed." Enriquez was more
the adjustment and resolution of grievances arising from the interpretation or
candid. He conceded that "while it might be true that there was some sort of
implementation of their Collective Bargaining Agreement and those arising from the
falsification, the same was done in good faith with no intention at all to cause
interpretation or enforcement of company personnel policies.
damage to anybody. . . . The change of entry in the ticket from charge to cash was
chanroblespublishingcompany
made only to facilitate the return of the money to the card holder, never to cause
All grievances submitted to the grievance machinery which are not settled within
damage to any person or the company." It was only after these irregularities were
seven (7) calendar days from the date of its submission shall automatically be
discovered and only after proper investigation were the private respondents
referred to voluntary arbitration prescribed in the Collective Bargaining Agreement.
dismissed from service. Without these irregularities, private respondents were not
charged by petitioner. The records do not show that before the case at bar, private
84 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
For this purpose, parties to a Collective Bargaining Agreement shall name and F: San Jose was a former employee of Ocean Terminal Services who was made to
designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or retire because he reached his compulsory retirement age. However, he was
include in the agreement a procedure for the selection of such Voluntary Arbitrator claiming differential pay which was based on the CBA. He filed his claim with LA,
or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary who ruled in his favor. NLRC reversed, saying LA did not have jurisdiction. Court
Arbitrators duly accredited by the Board. In case the parties fail to select a held that LA did not have jurisdiction, as money claims arising from CBA are under
Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the VA’s jurisdiction, but ruled ifo EE nonetheless because the case already dragged for
Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, long.
pursuant to the selection procedure agreed upon in the Collective Bargaining F: EE was hired since 1980 but was notified that he should retire because he
Agreement, which shall act with the same force and effect as if the Arbitrator or reached 65. He did apply for retirement and was paid P3,156,39
panel of Arbitrators has been selected by the parties as described above. -EE filed for differential on separation pay
-ER alleged that the basic sallary of EE was P120.34 per day
-that he worked on rotation basis, not 7 days a week
2. JURISDICTION -only paid every time they were assigned or actually performed stevedoring
-computation for arriving at P3,156.30 was same computation for other stevedores
A261-262
-that he did not actually render 11 years of service
ARTICLE 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators.
-burden of proving that his latest salary is P200 is on him
- The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and
LA: for EE
exclusive jurisdiction to hear and decide all unresolved grievances arising from the
-cannot sustain a computation of length of service based on the ECC contribution
interpretation or implementation of the Collective Bargaining Agreement and those
records.
arising from the interpretation or enforcement of company personnel policies
-allegation that complainant rendered service for only five days a month for the
referred to in the immediately preceding article. Accordingly, violations of a
past 11 years is statistically improbable, aside from the fact that the best evidence
Collective Bargaining Agreement, except those which are gross in character, shall no
thereof are complainant's daily time records which ER are duty bound to keep and
longer be treated as unfair labor practice and shall be resolved as grievances under
make available anytime in case of this.
the Collective Bargaining Agreement. For purposes of this article, gross violations of
-on late filing: The prescription period is three years. It is suffice (sic) that the filing
Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to
falls within the period.
comply with the economic provisions of such agreement.
-on WON rotation basis: burden which lies upon the employer.
The Commission, its Regional Offices and the Regional Directors of the Department
...presumption is that the normal working period is eight (8) hours a day and six (6)
of Labor and Employment shall not entertain disputes, grievances or matters under
days a week, or 26 days a month, unless proven otherwise.
the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of
-Also, the burden of proving the amount of salaries paid to employees rests upon
Voluntary Arbitrators and shall immediately dispose and refer the same to the
the employer not on the employee.
Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining
NLRC: reversed LA on jurisdictional ground
Agreement.
-case arises from the interpretation of the CBA (separation pay diffential based on
ARTICLE 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or
the CBA. Since interpretation of CBA, LA should refer it to the grievance machinery
panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and
and VA)
decide all other labor disputes including unfair labor practices and bargaining
 
deadlocks.
WON the appeal was timely? YES
-here, the last day (10th day) for filing the appeal fell on a Saturday
SAN JOSE V. NLRC
-based on NLRC Res. No. 11-01-91, parties had 10 days to appeal. If the 10th day fell
the jurisdiction of the Labor Arbiter and the Voluntary Arbitrator or Panel on a
of Voluntary Arbitrators over the cases enumerated in the Labor Code, Articles 217, Saturday
261 and 262, can possibly include money claims in one form or another. EOJ for Sunday
money claims is limited only to those arising from statutes or contracts other than a Holiday
Collective Bargaining Agreement. -last day to perfect the decision shall be the next working day
85 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
  -SO ADOPT FORMULA BY LABOR ARBITER!
WON the LA had jurisdiction over the dispute as to the differential? NO It is unrealistic to expect a lowly stevedore to know what reports his employer
LA had no jurisdiction to hear and decide San Jose's money claim of underpayment submits to the Employee's Compensation Commission under Book IV, Health, Safety
of retirement benefits since the controversy arose from the interpretation or and Welfare Benefits, Title II, Employees Compensation and State Insurance Fund,
implementation of a provision of the CBA of the Labor Code, simply because the insurance fund is solely funded by the
-VA had jurisdiction employer and the rate of employer's contribution varies according to time and
-read A217, Art 261 & 262 as a whole actuarial computations. (See Articles 183-184; Labor Code). The worker has no
1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of ready access to this employer's record. In fact, it is farthest from his mind to inquire
Voluntary Arbitrators over the cases enumerated in Articles 217, 261 and 262, can into the amount of employer's contribution, much less whether the employer
possibly include money claims in one form or another. remits the contributions. The worker is at all times entitled to benefits upon the
2. The cases where the Labor Arbiters have original and exclusive jurisdiction are occurrence of the defined contingency even when the employer fails to remit the
enumerated in Article 217, and that of the Voluntary Arbitrator or Panel of contributions. (See Article 196 (b), Labor Code).
Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an SANYO PHIL. V. CANIZARES (1992)
exception as indicated in the introductory sentence of Article 217 (a), to wit:
Summary: Sanyo entered into CBA with union, with Union security clause which
Art. 217. Jurisdiction of Labor Arbiters . . . (a) Except as otherwise provided under
entitles the Union to ask for the dismissal of employees who are not in good
this Code the Labor Arbiter shall have original and exclusive jurisdiction to hear and
standing anymore with the union. The union availed of the said clause, asked Sanyo
decide . . . the following cases involving all workers. . . .
to dismiss some of the employees who did anti-union activities. The employees now
A. Art. 217. Jurisdiction of Labor Arbiters . . .
contest their dismissal from work, bringing the same w/ LA. MTD filed by Sanyo but
xxx xxx xxx
LA sustained assumption of jurisdiction. Court held that the LA correctly assumed
(c) Cases arising from the interpretation or implementation of collective bargaining
jurisdiction because the case does not involve the union. The grievance procedure
agreement and those arising from the interpretation or enforcement of company
mandated by law is only between the union and the company but here, since the
procedure/policies shall be disposed of by the Labor Arbiter by referring the same
latter two are in the same sides, the dispute is between the employees and the ER.
to the grievance machinery and voluntary arbitrator as may be provided in said
SO under LA jurisdiction.
agreement.
 
B. Art. 262. Jurisdiction over other labor disputes. — The Voluntary Arbitrator or
Facts:
panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and
-Sanyo Phil. Entered CBA w/ PSSLU containing a union security clause which is as
decide all other labor disputes including unfair labor practices and bargaining
follows:
deadlocks.
Sec. 2. All members of the union covered by this agreement must retain their
SO
membership in good standing in the union as condition of his/her continued
LA (217(c)): EOJ for money claims is limited only to those arising from statutes or
employment with the company. The union shall have the right to demand from the
contracts other than a Collective Bargaining Agreement.
company the dismissal of the members of the union by reason of their voluntary
VA: EOJ over money claims "arising from the interpretation or implementation of
resignation from membership or willful refusal to pay the Union Dues or by reasons
the Collective Bargaining Agreement and, those arising from the interpretation or
of their having formed, organized, joined, affiliated, supported and/or aided directly
enforcement of company personnel policies", under Article 261.
or indirectly another labor organization, and the union thus hereby guarantees and
SO VA's jurisdiction...
holds the company free and harmless from any liability whatsoever that may arise
Unresolved grievances from the interpretation or implementation of the CBA
consequent to the implementation of the provision of this article
Unresolved grievances arising from the interpretation or enforcement of company
-Union informed Sanyo that some employees were not members of PSSLU anymore
personnel policies
for anti-union activities, economic sabotage, threats etc. (these were members of
Other labor disputes, as agreed upon by the parties
another union, KAMAO)
 
-initially KAMAO and PSSLU had an agreement but since some of the employees still
*BUT THE COURT WOULD NOT REMAND THE CASE, AS IT DRAGGED FAR TOO LONG
did not follow the said agreement, the Union notified Sanyo that the employees be
- 8 YEARS. ANY FURTHER DELAY WOULD BE A DENIAL OF SPEEDY JUSTICE
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dismissed and so Sanyo did. The company recommended that the said employees remanded case to LA but ER appealed the decision to CA, which ruled in its favor. SC
appeal to PSSLU or else they would be deemed dismissed (initially preventively held that the ER cannot invoke the CBA and the jurisdiction to VA since it did not
suspended). Termination finalized when no appeal to PSSLU heard follow the grievance procedure itself. And the CBA itself provided an option to the
-Ees filed COMPLAINT FOR ILLEGAL DISMISSAL W/ NLRC EE to choose WON to undergo grievance procedure or to go directly to LA, which he
-Sanyo and PSSLU filed MTD: LA had no jurisdiction over the case because it did. The implementation and interpretation of the CBA was just a subissue, but this
involved the interpretation and implementation of the CBA is the main issue is the illegal termination. If the parties wanted to submit all
-MTD deferred resolution twice (and LA assumed jurisdiction) so the petitioners disputes to VA, illegal termination should be expressly stated as one of the issues.
filed R65 Certiorari  
  Facts:
WON the case is w/n the jurisdiction of the LA? YES -Vivero was hired as Chief Officer of MV Sunny Prince but was terminated
-ON CLAIM THAT THIS CASE INVOLVED THE IMPLEMENTATION OF THE UNION (repatriated) after a month due to allegedly very poor performance and conduct,
SECURITY CLAUSE: Art 217 (a) interpreted in connection with (c) which provides refusal to perform his job, etc.
that in cases arising from the ...implementation of the CBA ...shall be disposed of by -so Vivero filed a complaint with his Union for illegal dismissal, and pursuant to the
the LA by referring the same to the grievance machinery and voluntary arbitration CBA, grievance proceedings were conducted. However, parties failed to reach and
as may be provided in the CBA settle the dispute amicably so vivero went to POEA (Since the law then applicable in
-the grounds for dismissal based on violation of union security clause is provided n 1994 was EO No. 247)
the CBA -ER filed MTD (no jurisdiction over the case, VA Committee should be resorted to in
-but here, no grievance machinery available. BUT IT IS NOT AN EXCUSE FOR THE LA accordance w/ CBA) - NOTE HOWEVER THAT THEY ALREADY FILED THEIR POSITION
TO ASSUME JURISDICTION OVER DISPUTES ARISING FROM THE IMPLEMENTATION PAPERS BEFORE FILING MTD (SO IN FACT THEY ARE ESTOPPED)
AND ENFORCEMENT OF CBA PROVISIONS ...RA 8042 was enacted so the case was transferred to LA
-All that needs to be done to set the machinery into motion is to call for the LA: dismissed complaint: CBA should be followed so go to VA Committee, then if
convening thereof. If the parties to the CBA had not designated their unresolved, VA
representatives yet, they should be ordered to do so. NLRC: Vivero had exhausted his remedy by submitting to the Grievance Committee
*SO YES IT IS A CASE INVOLVING THE IMPLEMENTATION AND INTERPRETATION OF of the Union. Considering that he could not obtain any settlement, he was correct in
CBA PROVISION BUT IT IS NOT A GRIEVANCE ARISING FROM THE IMPLEMENTATION resorting to POEA, and now to LA. So remand case to LA
AND INTERPRETATION OF CBA PROVISION...only disputes involving the union and -ER appealed to CA
the company shall be referred to the grievance machinery or voluntary CA: CBA providing grievance proceeding should be followed. It is the law between
arbitrators. the parties.
-HERE: both the union and the company are united or have come to an  Parties had no choice but to submit to VAC because it is provided in the
agreement regarding the dismissal of private respondents. No grievance between CBA (VA: contract; LA: law)
them exists which could be brought to a grievance machinery.  LC provides that VA has exclusive jurisdiction over disputes in CBA
 Law prefers VA over LA
VIVIERO V. CA  
GR: “All disputes” limited to areas of conflict traditionally w/n jurisdiction of VA: WON the dismissal of an EE constitute a "grievance between the parties" as
 contract interpretation and implementation defined under the provisions of the CBA, and consequently, w/n the EOJ of the
VA? NO
 interpretation and implementation of company personnel policies
-A217 provides jurisdiction of LA
X: if express stipulation including other issues, i.e. illegal termination
-but any or all of these cases may, by agreement of the parties, be submitted to a
Summary: Vivero was terminated from his job as a seaman. He filed a complaint for
VA for adjudication (Art 262)
illegal dismissal with his Union and undergone grievance proceedings but nothing
HERE: The case is primarily a termination dispute. It is clear from the
happened so he just filed a complaint w/ POEA. ER filed MTD, saying he should
claim/assistance request form submitted by petitioner to AMOSUP that he was
have undergone VA. Upon enactment of Migrant Workers and Overseas Filipinos
challenging the legality of his dismissal for lack of cause and lack of due process.
Act of 1995, his case was transferred to NLRC. LA ifo EE. NLRC ruled ifo EE,
The issue of whether there was proper interpretation and implementation of the
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CBA provisions comes into play only because the grievance procedure provided  
for in the CBA was not observed after he sought his Union’s assistance in Facts:
contesting his termination. Thus, the question to be resolved necessarily springs -LUDO engaged services of Cresencio Lu Arrastre Services (CLAS) for the loading and
from the primary issue of whether there was a valid termination; without this, then unloading of its products.
there would be no reason to invoke the need to interpret and implement the CBA -these arrastre workers were eventually made (on different days) as regular
provisions properly. employees of LUDO and joined the Lude Employees Union who received benefits
-here, it is not sufficient that the parties agreed in the CBA to submit all disputes to under the CBA (benefits depended on length of service)
VA. THERE IS A NEED FOR AN EXPRESS STIPULATION IN THE CBA THAT ALL ILLEGAL -Union requested Ludo to include the arrastre workers to be included among those
TERMINATION DISPUTES SHOULD BE RESOLVED BY A VA. who are receiving benefits but since LUDO did not, they agreed to submit
-further, the CBA makes it the discretion of the parties to submit to VA (with MAY themselves to VA
used in the CBA provision) -submission agreement: date of regularizaion
-on poicy of the state to promote VA: in this case, the dispute was never brought to VA:
a VA for resolution and the EE recognized the jurisdiction of the LA (as opposed to  Employees were engaged in activities necessary and desirable to the
Navarro III v. Damasco where the parties submitted documentary evidence before business of Ludo
the VA and did not question the authority of the VA - which probably was later  CLAS is a labor-oly contractor
questioned by one of the parties)  Employees are considered regular employees of CLAS 6 months from first
-VA is mandatory i character IF THERE IS A SPECIFIC AGREEMENT BETWEEN THE day of service at CLAS
PARTIES TO THAT EFFECT but since here, there is none (only permissive w/ the word  They are entitled to CBA benefits and Attorney's fees
"may"), LA has jurisdiction over the termination dispute -Ludo filed MR. Denied. So Instant petition for R65 Certiorari
-on Policy Instruction No. 56 ("Clarifying the Jurisdiction Between Voluntary  
Arbitrators and Labor Arbiters Over Termination Cases and Providing Guidelines for WON GADALEJ when VA awarded benefits beyond the submission agreement?
the Referral of Said Cases Originally Filed with the NLRC to the NCMB"): the instant NO
case is a termination dispute falling under the EOJ of the LA, and does not -jurisdiction of VA and LA may include money claims in one form or another (San
specifically involve the application, implementation or enforcement of company Jose v. NLRC)
personnel policies contemplated in Policy Instruction No. 56. -Compulsory arbitration: "the process of settlement of labor disputes by a
-the Union should have informed Vivero of his option to appeal the case before VA; government agency which has the authority to investigate and to make an award
ER should have invoked early on Policy Instruction No. 56 (so estopped) which is binding on all the parties, and as a mode of arbitration where the parties
are compelled to accept the resolution of their dispute through arbitration by a
LUDO V. SAORNIDO third party
F: date of regularization was in issue but the VA awarded bonuses and benefits to -In general, the arbitrator is expected to decide those questions expressly stated
the EEs so ER contested VA’s award. Court upheld award: and limited in the submission agreement. However, since arbitration is the final
GR: the arbitrator is expected to decide only those questions expressly delineated by resort for the adjudication of disputes, the arbitrator can assume that he has the
the submission agreement. power to make a final settlement. Thus, assuming that the submission empowers
X: the arbitrator can assume that he has the necessary power to make the arbitrator to decide whether an employee was discharged for just cause, the
a final settlement since arbitration is the final resort for the adjudication of arbitrator in this instance can reasonable assume that his powers extended beyond
disputes. giving a yes-or-no answer and included the power to reinstate him with or without
Summary: Ludo hired as regular employees arrastre workers from CLAS. Now these back pay.
workers joined Ludo's labor union and are now claiming benefits enjoyed by union -While the submission agreement mentioned only the determination of the date or
members. They went to VA, submitted only as the issue to be resolved the date of regularization, law and jurisprudence give the voluntary arbitrator enough leeway
regularization of the employees but the VA awarded benefits (determined amount of authority as well as adequate prerogative to accomplish the reason for which
to be received by the parties). Court held that VA has plenary jurisdiction to make the law on voluntary arbitration was created – speedy labor justice.
awards in the interest of speedy justice. -WON Money claim is barred by prescription: NO. In accordance with the findings of
the VA who had received evidence of the parties first hand.
88 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
APALISOK V. RPN (2003) machinery (it was not constituted due to ER), refiled illegal termination case. LA
found there was illegal dismissal (and primarily, this was illegal dismissal case) but
Summary: Apalisok was dismissed from RPN after being issued a memo for her to since Ees accepted separation pay, estopped from claiming. NLRC reversed and CA
explain the admin charges against her and then afterwards just informed of her affirmed. Court held that this is an illegal dismissal case and interpretation and
dismissal. She waived resort to the grievance procedure and filed case with NLRC implementation of CBA provisions merely subissues so this is under LA's jurisdiction.
but undergone VA, to which the parties submitted a Submission Agreement. VA Also ruled that since no effort to constitute grievance machinery on part of ER, Ees
ruled ifo Apalisok so RPN appealed to CA. CA held that VA had no jurisdiction cannot be faulted for searching for an impartial forum. Court also found illegal
because waiver of grievance machinery is waiver to resort to VA since the dispute dismissal for failure of ER to substantiate charges against Ees.
becomes a resolved grievance. Court held that even if a party waives the grievance  
procedure, if they agree to submit themselves to VA it is allowed. Facts:
  -2 employees were dismissed, allegedly refused to receive the formal notice nor
Facts: explain theirselves to ER, and were terminated:
-Apalisok was the Production Chief of RPN when she was issued a Memo to explain  Pena allegedly was caught urinating and defecating on company premises
her acts hostile to RPN and the arrogant, disprespectful and defiant behavior not intended for the purpose
towards her superior. She filed her Answer to the said Memo.
 Abion allegedly caused the clogging of the fishpond drainage due to
-She was later informed of her termination
improper disposal of waste
-She wrote to RPN that she was waiving the grievance machinery provided in CBA
-both employees received their separation pay
-she then filed complaint for Illegal dismissal before the NLRC
-they separately filed ILLEGAL DISMISSAL complaints before NLRC, alleging that they
-NLRC referred case to NCMB
were dismissed because Atlas suspected them of forming a union which is against
-parties submitted Submission Agreement (issue: WON Apalisok's dismissal was
the company-dominated union
valid; they promised to abide by the decision of VA)
-LA1: dismissed complaints: grievance machinery under CBA should be followed
-VA: dismissal was invalid. Granted Separation pay because of strained relations
-Abion and Pena availed of the grievance machinery but due to "lack of sympathy"
-RPN appealed to SC, but was referred to CA (Luzon Dev't Bank v. Assoc. Of Luzon
on Atlas' part to engage in conciliation proceedings, they refiled case w/ NLRC
Dev't Bank Employees)
-Atlas filed MTD for lack of jurisdiction: should have exhausted remedies under CBA
-CA: option of Apalisok not to subject the dispute to grievance machinery was
- and if not, should have gone to VA
tantamount to relinquishing her right to avail of the aid of a VA; said act converted
LA2: although he assumed jurisdiction (primarily a termination case), he dismissed
grievance into a resolved one so VA had no jurisdiction
the complaint because Ees allegedly failed to substantiate claims for illegal
 
dismissal, and since they voluntary accepted separation pay
WON VA had jurisdiction even if the EE waived resort to grievance machinery?
NLRC: reversed LA
YES
CA: Affirmed NLRC's reversal
-LC provides that VA would have jurisdiction if parties agree
 
-voluntary arbitration as a mode of settling the dispute was not forced upon
WON LA/NLRC had jurisdiction? YES
respondents. Both parties indeed agreed to submit the issue of validity of the
- Where the dispute is just in the interpretation, implementation or enforcement
dismissal of petitioner to the jurisdiction of the voluntary arbitrator by the
stage, it may be referred to the grievance machinery set up in the CBA, or brought
Submission Agreement duly signed by their respective counsels.
to voluntary arbitration. But, where there was already actual termination, with
alleged violation of the employee’s rights, it is already cognizable by the labor
ATLAS FARMS V. NLRC (2002) arbiter.
Summary: Ees were terminated allegedly for violation of company personnel -even if the Ees resorted to grievance procedure, Atlas did not show proof that it
policies, but Ees alleged it was for their efforts to form a union. No notice proved to took steps to convene the grievance machinery after the labor arbiter first
have been given to the Ees before they were dismissed. Ees received separation dismissed the complaints for illegal dismissal and directed the parties to avail of
pay. Ees filed illegal termination case before NLRC but was dismissed and was the grievance procedure under Article VII of the existing CBA. Employees could
referred to grievance machinery in CBA. Since nothing happened in grievance not now be faulted for attempting to find an impartial forum, after petitioner

89 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
failed to listen to them and after the intercession of the labor arbiter proved
futile. Facts:
-further, grievance procedure should be undertaken with the UNION. Since no -Mindanao Steel and Minsteel Free Workers Org entered a CBA whihc provided a
union participation, grievance procedure would be pointless or prejudicial to the P20 increae in worker's daily wage (executed June 29, 1990)
cause of the employees -December 5, 1990, due to fuel increase, Regional Tripartite Wages and Productiv
-VIVERO V. CA: petitioner cannot arrogate into the powers of Voluntary Arbitrators ity Board issued Interim Wage Order No. RX-02 granting all workers an ECOLA for 3
the original and exclusive jurisdiction of Labor Arbiters over unfair labor practices, months.
termination disputes, and claims for damages, in the absence of an express -ER refused to implement wage order
agreement between the parties in order for Article 262 of the Labor Code -Union filed COMPLAINT FOR PAYMENT OF ECOLA in NCMB. Parties agreed to
[Jurisdiction over other labor disputes] to apply in the case at bar." submit to VA
...private respondents attempted to justify the jurisdiction of the voluntary -VA: ER pay ECOLA. MR denied
arbitrator over a termination dispute alleging that the issue involved the -CA: ER pay ECOLA. Grant of P20 increase in wage did not have purpose of granting
interpretation and implementation of the grievance procedure in the CBA. There, temporary allowance
we held that since what was challenged was the legality of the employee’s ...plus CBA provided that the salary increases shall be exclusive of any wage that
dismissal for lack of cause and lack of due process, the case was primarily a may be provided by law. Since that is what they agreed to, they should be bound by
termination dispute. The issue of whether there was proper interpretation and it.MR denied
implementation of the CBA provisions came into play only because the grievance  
procedure in the CBA was not observed, after he sought his union’s assistance. WON ER should be exempt from paying ECOLA? NO
Since the real issue then was whether there was a valid termination, there was no -ER's argument why it did not pay ECOLA: there was a crediting clause in the wage
reason to invoke the need to interpret nor question an implementation of any CBA order providing that Wage increases shall be creditable
provision. -BUT CBA IS CLEAR: Section 3, Article 7 of CBA provides the ff:
-MANEJA V. NLRC: the hotel employee was dismissed without hearing. We ruled that "It is hereby agreed that these salary increases shall be exclusive of any wage
her dismissal was unjustified, and her right to due process was violated, absent the increase that may be provided by law as a result of any economic change."
twin requirements of notice and hearing. We also held that the labor arbiter had -so it is clear that the P20 salary increase in the CBA does not include any wage
original and exclusive jurisdiction over the termination case, and that it was error increase that may be provided by law as a result of any economic change. Since not
to give the voluntary arbitrator jurisdiction over the illegal dismissal case. ambiguous, no need for interpretation
  -WAGE INCREASE NOT CREDITABLE: the order provided that for a wage increase to
WON Ees were illegally dismissed? YES be creditable, it should have been given because of, o in anticipation of the fuel
-Atlas failed to substantiate their claims that Ees committed certain acts violating price hikes in December 1990.
company rules and regulations; no factual basis for the dismissal
-no evidence that Ees received notices to show cause UNION OF NESTLE WORKERS V. NESTLE PHILIPPINES (2002)
 
SUMMARY: The company implemented Policy No. HRM 1.8 imposing simultaneous
WON the costs were properly awarded? Modified
drug test on all employees. Union contested its implementation and filed Complaint
for Injunction in RTC. Their main allegations is that the implementation of the policy
MINDANAO STEEL V. MINSTEEL WORKERS (2004) is arbitrary because it was not done w/ consultation w/ the union. RTC held that it
Summary: Union and Mindanao steel had a CBA which provided for wage increase. had no jurisdiction over the case, it being a labor dispute. R65 P4C filed w/ SC but
CBA also expressly provided that it was exclusive of any other wage increase. An was referred to CA. CA dismissed petition, saying wrong remedy plus injunction
ECOLA was ordered to be given due to the increase in fuel prices but Mindanao already moot because policy was already implemented. Now Court upheld RTC and
Steel did not implement wage order, contending that the wage increase provided in CA, saying first that since this involved the implementation of company personnel
the CBA should be credited already. Parties agreed to submit to VA's jurisdiction policy, it should be under VA jurisdiction. Further, it said that remedy should have
and VA ruled ifo workers. CA affirmed VA. Court also affirmed VA, saying that CBA been ordinary R45 appeal to CA.
terms are clear that the wage order is exclusive of the wage increase in the CBA.  

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Facts: Summary: Some employees of San Miguel Foods Inc (SMFI) brought a grievance
-Nestle implemented Policy No. HRM 1.8 (Drug Abuse Policy) which provided for against the Finance Manager for discrimination, favoritism, etc. Before Plant
the simultaneous drug testing of all employees of Nestle Operations Manager. Union sought Grievance machinery step 1 but SMFI took so
-Union contested the drug testing with only 28.43% of the employees submitting long to resolve it so they filed a COMPLAINT FOR ULP before NLRC . SMFI filed MTD
themselves to the drug testing. saying it should be subject to the grievance machinery provided in CBA. LA granted
-Union then filed w/ RTC COMPLAINT FOR INJUUNCTION W/TRO. RTC issued TRO MTD so Union appealed to NLRC. NLRC ordered LA to continue proceedings so SMFI
-Nestle filed MTD: this is a labor dispute on the enforcement of a company MR but denied. So P4C R65 w/ SC but referred to CA. CA held that LA had
personnel policy so should be under VA jurisdiction since it is a ULP. Court held that first, procedural rules under ROC not
-why argue CONSTITUTIONAL ISSUE: right against self-incrimination, to due process strictly applied in Labor proceedings. Second, there is NO ULP as to the questioned
and to security of tenure. promotions because it was not alleged that they were done to discourage unionism.
RTC: dismissed complaint: main issue is a labor dispute because the union contest Third, on ULP on alleged violations of CBA, it was held that under LC, if it is not an
the policy for lack of proper consultation w/ union members. MR denied economic provision, it is not considered gross violation of CBA w/c is under LA
-R65 petition for certiorari filed w/ SC, referred to CA jurisdiction. Since the failure to follow the grievance machinery is not an economic
-CA: dismissed petition: R45 should be the correct remedy plus injunction moot provision, it is not considered gross violation. However, violation of seniority was
because the petitioners themselves already subjected themselves to drug testing considered a gross violation of the CBA so that sole issue is under LA's jurisdiction.
   
WON RTC has jurisdiction? NO, VA has. FACTS
-the fact that the complaint was denominated as one for injunction does not -Some of the employees of SMIFI's Finance Department brought a grievance against
necessarily mean that the RTC has jurisdiction. Well-settled is the rule that Finance Manager for discrimination, favoritism, etc. On the promotion of junior
jurisdiction is determined by the allegations in the complaint employees, bypassing some senior employees
-allegations in the complaint basically says that the implementation of the policy -Grievance machinery Step 1 was followed, so grievance brought before Plant
was arbitrary because: Operations Manager.
(1) the employees were not consulted prior to its implementation; -Union sought the review, evaluation and upgrading of all Finance staff and
(2) the policy is punitive inasmuch as an employee who refuses to abide with the promotion of employee.
policy may be dismissed from the service; and -Grievance meeting held, where management addressed the grievance by
(3) such implementation is subject to limitations provided by law which were conducting a WORK MANAGEMENT REVIEW
disregarded by the management. -however, almost 9 months after the first grievance meeting nothing happened so
-so this is a dispute involving COMPANY PERSONNEL POLICY (DEF: San Miguel v. the Union filed a COMPLAINT FOR ULP AND UNJUST DICRIMINATION IN MATTERS
NLRC): OF PROMOTION W/ NLRC
"Company personnel policies are guiding principles stated in broad, long-range -SMFI filed MTD: grievance issues involved so Grievance proceedings should be
terms that express the philosophy or beliefs of an organization’s top authority followed, and if not followed, VA
regarding personnel matters. They deal with matter affecting efficiency and well- -parties submitted position papers. In their position papers, the Union alleged that
being of employees and include, among others, the procedure in the administration some of its members were bypassed in promotion. The ER also allegedly violated
of wages, benefits, promotions, transfer and other personnel movements which are the CBA for failure to follow the grievance procedure and the seniority rule
usually not spelled out in the collective agreement." LA:DISMISSED: grievance machinery should be followed
-since this involves implementation of company personnel policy, it is w/n VA's NLRC: LA continue proceedings. SMFI MR
jurisdiction and not RTC's SC: referred to CA
  CA: LA has jurisdiction over the complaint for violation of the seniority rule under
WON R65 P4C proper? NO the CBA
-should have filed APPEAL under R45. R65 P4C not a substitute for a lost appeal  
WON The conplaint should be dismissed for failure to establish a COA since the
SAN MIGUEL FOODS V. SAN MIGUEL UNION (2007) complaint does not state the ultimate facts constituting ULP? NO
-Procedural rules should not be strictly applied to labor proceedings
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-here: Complaint + Position papers show the acts constituting ULP
 
WON LA has jurisdiction on the Union's complaint on discrimination in the OLVIDO V. CA (2007)
promotion? NO
SUMMARY: Employees, former officers of SEU-ADFLO, filed complaints for illegal
-For it to be a ULP, it should have been done to discourage membership in a union
lay-off, illegal deductions, nonpayment of OT…etc. When SEU-ADFLO wanted to be
or labor organization. Here, no allegation as to that the alleged discrimination was
certified as the EBR of the company, it was agreed with the company that the
done to discourage unionism. The employees promoted were even members of the
company would recognized it as the EBR voluntarily provided the employees
complaining Union
withdraw the charges against it. The employees did not sign the MTD so they were
 
removed from the union. They formed their own union but pending their petition
WON the violation of the CBA: failure to comply with the grievance procedure in
for CE, SEU-ADFLO and ER entered into CBA. CBA provided a modified closed shop
the CBA, is under the jurisdiction of the LA? NO.
agreement and allegedly in accordance to this, SEU-ADFLO requested the company
-For violations of CBA to be not under VA, it should be:
to dismiss the employees. They were accordingly dismissed so they filed
1. gross in character
COMPLAINT FOR ILLEGAL DISMISSAL before NLRC. LA ruled ifo company. NLRC
2. economic. Provision
reversed ifo EEs and ordered reinstatement of employees. It said that EEs cannot be
-the said violation is not an economic provision
charged with disloyalty to SEU-ADFLO because they were not members thereof. CA
 
ruled that EEs were not covered by the modified closed shop provision because
WON the violation of the CBA as to the seniority is under jurisdiciton of LA? YES
when it was implemented, they were already members of a union and the said
-the ER violated the JOB SECURITY PROVISION OF THE CBA, PARTICULARYLY THE
provision only requires that the employees join a union. However, the EEs were
SENIORITY RULE
dismissed in GF so not entitled to reinstatement. Sole issue is WON EEs are entitled
-all doubts are resolved ifo labor
to backwages. SC held that since the EEs were unjustly dismissed, they were
-seniority rule in the promotion of the employees has a bearing on salary and
entitled to backwages.
benefits. Thus it is an economic provision the CBA and its violation is under LA's
jurisdiction
DEL MONTE PHIL V. SALDIVAR (2006)
LANDTEX INDUSTRIES V. CA (2007)
SUMMARY: Timbal, an employee of Del Monte and a member of ALU, was alleged
SUMMARY: Ayson was hired as a knitting operator of Landtex. For allegedly
to have been disloyal to ALU for allegedly promoting membership to a competing
spreading rumors against the owners of the Company, the Compay administratively
union, NFL. To back this up, they used the affidavit of Artajo, who allegedly had an
charged Ayson. There were hearings conducted but Ayson was not able to attend
“axe to grind” with Timbal since Timbal’s husband filed collection suits against
the first few hearings because he took care of a sick child and on the last, he did not
Artajo. Based on this affidavit, and based on the closed shop clause in the CBA, Del
sign the minutes. Ayson was later terminated. The union and the Conpany then
Monte dismissed Timbal. Timbal filed case for ILLEGAL DISMISSAL in NLRC. LA held
agreed to refer Ayson’s termination to a third party in accordance with the CBA.
that all employees (Timbal was not the only one dismissed). NLRC held that all the
Ayson however, filed complaint FOR ILLEGAL DISMISSAL before LA. LA held that it
complainants were validly dismissed. CA held that only Timbal was illegally
had jurisdiction, this being a termination case. ER appealed, NLRC reversed LA
dismissed and Del Monte failed to observe procedural due process. On their MR to
saying that since the CBA provides that disciplinary measures are covered in
CA, Del Monte alleges that besides the affidavit of Artajo, there was another
grievance procedure and this is merely an implementation of the grievance
witness who could substantiate the claim of disloyalty. SC held that the said witness
procedure in the CBA, LA had no jurisdiction. CA held that LA had jurisdiction.
was just reproduced by Del Monte so dubious. Also held that Timbal was entitled to
Pending appeal to SC, Ayson died. SC held that LA had jurisdiction because Ayson
backwages, even if Del Monte merely dismissed her in good faith compliance with
was already terminated when the Union and the Company decided to refer the
the union security clause because the dismissal should always be in accordance
dispute to grievance proceedings. Further, termination proceedings are not
with substantive due process.
expressly covered by the grievance procedure in the CBA, it not clearly covered by
disciplinary measures. Lastly, SC held that there were no valid grounds for Ayson’s
termination, there being no witnesses who were able to substantiate the claims.

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IMPERIAL TEXTILE MILLS INC V. SAMPANG (1993) CONTINENTAL MARBLE V. NLRC (1988)
On finality and execution of awards Exception to the rule that the decision of the VA is final and executory
F: The ER and Union executed a CBA which provided wage increases and other SUMMARY: Nasayao allegedly was hired as Continental’s manager with a monthly
benefits. The dispute in this case is to the adjustment of the wages to the base pay salary of P3k or 25% of the net profits, whichever is higher. Nasayao allegedly
level, ER says that the wage of the particular employee subject of possible however was not paid for 3 months so he filed a complaint with NLRC for
adjustment on wage pay should be the pay with the first year of the CBA increase nonpayment of the said salary. In their answer, Continental alleged that there’s a
while the union alleged that CBA increases should NOT be included in adjusting the joint venture between them and Nasayao and that Nasayao was not to receive
wages to the base level. They both agreed to submit the dispute to VA. In this case, monthly salaries but instead was entitled to receive 25% of the net profits if there
the VA rendered two decisions. The Labor Code was applicable when he rendered were any. As there were none for the months he allegedly did not receive salary, he
his first decision (and such unamended code provides no period when the decision was not entitled to any. Case submitted to VA but Continental contested the
becomes final and unappealable). The union MR, and the VA reconsidered his fairness of the appointed VA and aksed the VA to desist. Instead of doing so, VA
decision. So ER contested the 2nd decision of the VA (ifo Union). Court held that the proceeded in trying the case and even rendered judgment ifo Nasayao. Continental
VA was in GADALEJ because his first decision was already final when he rendered it appealed to NLRC but NLRC ruled that the VA decision was already final and
(the LC then applicable then making his decision final and executor without a executory. SC held that generally, decisions of the VA are final and executor but an
period). VA cannot review his decisions because: exception is when the VA GADALEJ, especially when the VA’s decision is not backed
once an arbitrator has made and published a final award, his authority is exhausted by substantial evidence.
and he is functus officio and can do nothing more in regard to the subject matter of
the arbitration. The policy which lies behind this is an unwillingness to permit one
who is not a judicial officer and who acts informally and sporadically, to re-examine LUDO V. SAORDINO, SUPRA.
a final decision which he has already rendered, because of the potential evil of
VA can render awards even if it is not submitted by the parties under his
outside communication and unilateral influence which might affect a new
jurisdiction.
conclusion. The continuity of judicial office and the tradition which surround judicial
conduct is lacking in the isolated activity of an
arbitrator, although even here the vast increase in the arbitration of labor disputes
FINALITY AND EXECUTION OF AWARDS
has created the office of the specialized provisional arbitrator.
*note that only with RA 6715 did the 10 day period emerge (with Art 262-A)
IMPERIAL TEXTILES V. CALICA
SMC V. NLRC (1996)
*Company personnel policies: guiding principles stated in broad, long-range terms
that express the philosophy or beliefs of an organization’s top authority regarding
personnel matters. The usual source of grievances are rules and regulations PROCEDURE
governing disciplinary actions. Art. 262-A
*Discharges based on redundancy can hardly be considered a company personnel VA or panel of VA…
policy. …hold hearings
CBA agreement to arbitrate must be plain and unambiguous – must expressly state …receive evidences
that termination disputes and unfair labor practice cases under voluntary …take whatever action is necessary to resolve the issue or issues subject of the
arbitration. dispute
*In the same manner, job security provisions invoking grievance procedure must be All parties to the dispute
strictly construed (e.g. union reconsideration requirement). …shall be entitled to attend the arbitration proceedings
The attendance of any third party
or the exclusion of any witness from the proceedings
93 | L a b o r A r b i t r a ti o n C a s e D i g e s t s _ C h a M e n d o z a Go ninja! Go!
shall be determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. the basis of the finding that the monthly salary of said employees does not include
Hearing may be adjourned their pay for unworked holidays. Award was partially implemented but MOLE issued
 for a cause INTEGRATED IMPLEMENTING RULES OF THE LABOR CODE which provided that
 or upon agreement by the parties. workers paid monthly shall be presumed to be paid for ALL days in the month
Award: whether worked or not worked, and the POLICY INSTRUCTION NO. 9 which
-mandatory to give 20 calendar days from submission of the dispute to voluntary provided that an employee is presumed to be already paid the 10 paid legal
arbitration holidays if he is receiving not less than the maximum monthly minimum wage.
-form: contain facts and the law upon which it was based Thus, Citibank refused to further implement the award.
-final and executor after 10 calendar days from RECEIPT of the copy of the award or Held: The award of the arbitrator in this case IS NOT TO BE EQUATED WITH A
its decision by the parties. JUDICIAL DECISION. In effect, when in relation to a controversy as to working
X: unless appealed to NLRC conditions, which necessarily include the
-WoE: may be issued ...Amount of wages
…upon motion of interested party ...Allowances
…made by ...Bonuses
 VA ...Overtime pay
 VA Panel ...Holiday pay
 LA in region where movant resides, in case of absence or incapacity of VA ...Etc.
...The parties submit their differences to arbitration, they do not seek any judicial
pronouncement techically as such; they are merely asking the arbitrator to fix for
AWARDS AND ORDERS them what would be the fair and just condition or term rearding the matter in
dispute that should govern further collective bargaining relations between them.
THE ARBITRATOR'S AWARD WHEN STIPULATED BY THE PARTIES TO BE CONCLUSIVE
DAVAO INTEGRATED PORT STEVEDORING SERVICES VS. ABARQUEZ BECOMES PART AND PARCEL OF THE CBA.
(1993), SUPRA *Regardless of any law anterior or posterior to the Arbitrator's award, the collective
Summary: CBA provided sick leave with pay to its regular employees . The said bargaining agreement in this case has been correspondingly amended in a manner
provision was extended to its workpool employees, which can be converted to cash that is unalterable, immovable and immutable like the rock of Gibraltar, during the
if unused. New management discontinued the said benefit as to workpool lifetime of the CBA.
employees, arguing that there was merely error in payment. Court held that the
CBA was clear so it should be followed by the Company. VOLKSCHEL LABOR UNION V. NLRC (1980)
Obiter on the VA: Company was contesting the award made by the VA ordering the Summary: Company made a memo transferring its employees from Malabon to
company to pay the unenjoyed portion of the sick leave with pay benefits. The Cebu (which the Union opposed and sought reconsideration). The Company argued
court held that there was no GADALEJ on the part of the VA because it is the that the transfer was w/n its prerogative but the Union argued it was ULP, as the
necessary consequence of his exercise of his arbitral power as Voluntary Arbitrator employees transferred were union members. ULP case filed w/ NLRC, mediation
under Article 261 of the Labor Code "to hear and decide all unresolved grievances ensued but nothing happened so referred to an arbitrator (later clarified as LA). LA
arising from the interpretation or implementation of the Collective Bargaining decided ifo Union but NLRC ruled ifo company. Court held that the Company filed
Agreement." out of time (without even looking at the calendar!) so moot to discuss other parts.
But held that if this was indeed a VA decision, the decision would have been final
CITY BANK EMPLOYEES UNION V. MOLE (1980) and executory already.
Summary: VA decision, when final and executor, cannot be modified even by -Company ordered transfer of Malabon employees to Cebu.
subsequent changes in the law Union sought reconsideration through a letter. However, the Company did not
Facts: employees are claiming holiday pay from Citibank. They agreed to submit reconsider, indefinitely suspending the employees for refusing to comply with the
their dispute to VA. VA ordered Citibank to pay the employees their holiday pay on management’s order.

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-Suspension led to termination of the employees for alleged violation of the Code of -It is a well-settled rule that an award or judgment becomes final and executory
Discipline of the Corporation. The Company alleged the reason to be retrenchment upon the expiration of the period to appeal and no appeal was made within the
because of business slump in Malabon. It gave the employees options but the union reglementary period. The basic rule of finality of judgment is applicable
argued that the company violated the CBA provision on Union Recognition and indiscriminately to one and all since the rule is grounded on fundamental
Check-offf, saying that moving employees would take the employees outside the consideration of public policy and sound practice that at the risk of occasional error,
bargaining unit. Some reinstated. Union also alleged that the Company failed to the judgment of courts and award of quasi-judicial agencies must become final at
comply with its promise to help the union collect agency fee some definite date fixed by law.
-Union filed complaint for ULP with NLRC -The lapse of the appeal period deprives courts of jurisdiction to alter a final
-arbitrator: ordered reinstatement of employees; Company ordered to comply with judgment. In the instant case, the decision of the Commission[14] modifying the
its obligation under CBA to transmit all agency fees award of the arbitrator is null and void for having been issued without jurisdiction
-appeal to NLRC. Union objected: and authority, the appeal taken thereto not having been filed on time. The
1. Arbitrator’s award ALREADY FINAL AND EXECUTORY; perfection of an appeal within the reglementary period is not only mandatory but
2. CBA Provides that it is final and executor jurisdictional.
3. Award is supported by substantial evidence
-NLRC: modified: saying that the employees should comply with the directive of
reassignment APPEAL
-Union filed petition for review pending their appeal to SOLE (to prevent irreparable
A262-A:
danger)
- can appeal decision of VA 10 CALENDAR days from receipt of the copy of the
award, or else final and executor.
WON NLRC has power to alter/modify award by VA (note: it is not clear from the
Note that as noted in Imperial Textile Mills vs. Sampang, the period of finality was
facts if the arbitrator in issue is an LA or VA but the allegations of the union in the
previously not provided. RA 6715 added the 10 day period. So would this mean that
pleadings says it’s a VA)? NO
the VA’s decision can be reconsidered? Sir said in class that an MR is not necessary
-to settle once and for all: the arbitrator here IS A LABOR ARBITER, NOT A
anymore based on the Malayan Insurance Case (but not confirmed)
VOLUNTARY ARBITRATOR. It was referred to NLRC.
-so OBITER: The award of voluntary Arbitrators acting within the scope of their
OCEANIC BIC DIVISION V. ROMERO (1984)
authority determines the rights of the parties, and their decisions have the same
legal effects as a judgment of the Court. Such decisions on matters of fact and law Summary: Probational employee dismissed without clearance for poor
are conclusive, and all matters in the award are thenceforth res judicata, on the performance. The union contested the termination, both union and ER submitted to
theory that the matter has been adjudged by the tribunal which the parties have VA. VA ifo ER. UUnion filed a petition for certiorari (no mention WON 45 or 65) to
agreed to make final as tribunal of last resort. SC. Company questioned jurisdiction of SC, saying VA’s decision final. Court held
that VA is just a QJA whose decision can be reviewed. But here, VA’s decision was
WON the appeal to NLRC was filed out of time so NLRC had no jurisdiction to respected because she ruled correctly that the probational employee can be
entertain the same (beyond the 5 day period from receipt as stated in the IRR it dismissed by the ER even w/o clearance as he is not a regular employee who would
promulgated in 1972)? YES so dismissed because of prescription. NLRC should not require clearance before he is dismissed. Further, the unsatisfactory performance of
have reviewed LA’s decision. In short, decision for UNION. the employee was well documented so it was supported by substantial evidence.
-Counsel of Company received a copy of the award FEB 22. Appeal was filed w/NLRC
March 5 and was received by BLR March 6
-NOTE: the court did not look at the calendar. Just said that the lawyer failed to MANTRADE V. BACUNGAN (1986)
substantiate his claim that he filed w/n the reglementary period. After checking the Summary: Mantrade is not paying its monthly salaried employees holiday pay
calendar for 1974… March 5 is the 11th day but since the 10th day fell on a Sunday based on Section 2 of LC’s IRR made by NLRC. Parties submitted dispute to VA
(March 4), technically the 10th day is the 5th) Bacungan, who ruled ifo ER. Union now contesting VA Bacungan’s decision, but ER
-BUT the court held that according to Section 2 of the NLRC IRR, the company filed contested it saying VA’s decision already final. SC held ifo employees, citing Oceanic
out of time – beyond the 10 day period; so the award attained finality
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BIC v Romero that Vas are QJAs so can be reviewed by the court when there’s want -Under voluntary arbitration, on the other hand, referral of a dispute by the parties
of jurisdiction, grave abuse of discretion, violation of due process, denial of is made, pursuant to a voluntary arbitration clause in their collective agreement, to
substantial justice, or erroneous interpretation of the Law. Also held that LC, which an impartial third person for a final and binding resolution.
provides entitled to holiday pay, should be followed instead of the IRR which is -Ideally, arbitration awards are supposed to be complied with by both parties
promulgated by NLRC and the IRR is null and void since in the guise of clarifying the without delay, such that once an award has been rendered by an arbitrator, nothing
Labor Code's provisions on holiday pay, they in effect amended them by enlarging is left to be done by both parties but to comply with the same. After all, they are
the scope of their exclusion presumed to have freely chosen arbitration as the mode of settlement for that
particular dispute. Pursuant thereto, they have chosen a mutually acceptable
arbitrator who shall hear and decide their case. Above all, they have mutually
LUZON DEV’T BANK V. ASSN OF LUZON DEV’T BANK EMPLOYEES (1995) agreed to de bound by said arbitrator's decision.
-In the Philippine context, the parties to a Collective Bargaining Agreement (CBA)
Summary: VA ruled ifo Union even w/o receiving ER’s position paper. ER appealed
are required to include therein provisions for a machinery for the resolution of
directly to SC. SC remanded the case to CA, saying that direct appeal to it would
grievances arising from the interpretation or implementation of the CBA or
equate the decision of the VA to the NLRC and CA.
company personnel policies.
-Luzon Development Bank (LDB) and the Association of Luzon Development Bank
-For this purpose, parties to a CBA shall name and designate therein a voluntary
Employees (ALDBE) submitted to arbitration to resolve WON the company has
arbitrator or a panel of arbitrators, or include a procedure for their selection,
violated the Collective Bargaining Agreement provision and the Memorandum of
preferably from those accredited by the National Conciliation and Mediation Board
Agreement dated April 1994, on promotion
(NCMB).
-The parties agreed to submit their respective Position Papers on December 1-15,
1994.
-Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's CEU FACULTY & ALLIED WORKDERS UNION V. CEU (1995)
Position Paper on January 18, 1995. Summary: CEU had a tuition fee increase. In accordance w/ RA 6728, tuition fee
-LDB, on the other hand, failed to submit its Position Paper increases are allowed in private schools provided 70% of the proceeds of the
-VA: without LDB's Position Paper, rendered a decision finding that the Bank has not increase would go to payment of salaries of teaching and nonteaching staff. CEU
adhered to the Collective Bargaining Agreement provision nor the Memorandum of had a CBA with its Union which provided an IP increase integrated in the salaries of
Agreement on promotion. its workers. But the said IP integrated was sourced from the 70% proceeds from the
-Hence, this petition DIRECTLY TO SC tuition fee increase. The Union argues that since their CBA provided that whatever
salary increases were provided in the CBA would not be taken from the 70% of the
WON VA erred in ruling ifo Union w/o waiting for position paper of ER? Court did tuition fee increase, the integrated IP should also not be taken from the 70% tuition
not rule on it but instead remanded the case to CA fee increase. VA held for CEU. Union appealed to CA via R65 petition but wrong
-elevating a decision or award of a voluntary arbitrator to the Supreme Court on a appeal, should have been R43. Court upheld the VA and CA.
petition for certiorari is in effect equating the voluntary arbitrator with the NLRC or
the Court of Appeals, which in its view is illogical and imposes an unnecessary Facts:
burden upon it -The Government Assistance to Students and Teachers in Private Education Act or
Obiter na lahat… RA 6728 provides that in every tuition fee increase, 70% of the proceeds of the
-In labor law context, arbitration is the reference of a labor dispute to an impartial increase shall go to the payment of the salaries of teaching and nonteaching staff
third person for determination on the basis of evidence and arguments presented -CEU and the union had an existing CBA which provided salary increases and IP
by such parties who have bound themselves to accept the decision of the arbitrator (intemental proceeds) integrated in the salary. The CBA also provided that salary
as final and binding. increases arising from the CBA shall not be deductible from the 70% share in the
-Arbitration may either be compulsory or voluntary. Incremental Increase
-Compulsory arbitration is a system whereby the parties to a dispute are compelled -most of the salary increases are taken from the university fund, while the IP
by the government to forego their right to strike and are compelled to accept the integrated are taken from the proceeds of the 70% increase.
resolution of their dispute through arbitration by a third party. CEU Union

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-2 types of increases: CBA-negotiated the integrated IP granted in the CBAs -The allocation of 70% of the IP for payment of salaries, wages, allowances and
and the IP, which by nature, should be should not be deducted from the other benefits of teaching and non-teaching personnel is clearly mandated by law.
taken from the 70% increase personnel’s 70% share in the IP Yet, nowhere is it provided in Republic Act No. 6728 that the IP should be
-can’t give increase for teachers working -CBA prohibits deduction of salary integrated with the salary and wages. The nature of IP is that it bears a reasonable
OT or overload increases arising from the CBA from the relation as to whether or not universities/schools will increase their tuition fees.
70% share in the IP Like that of a bonus, IP is additional compensation subject to a resolutory condition
-IP is computed on a pro-rata basis, imposed for its payment.
depending on the hours worked so -Historically, IP was allocated "to alleviate the sad plight of private schools, their
those rendering OT should received personnel and all those directly and indirectly dependent on school incomes." It is
additional IP additional benefit accorded to the employees. Hence, the determination of the
-union filed w/ NCMB, parties submitted their position papers amount of IP to be integrated into employees’ basic salary entails the exercise of
VA: For CEU the right of an employer to regulate all aspects of employment. Precisely, the
-so Union elevated the case via R65 P4C to CA employer has the right to change the basis of the payment of wages of the
CA: Dismissed: wrong mode of appeal. Should have been R43, not R65; MR denied employees, subject to provisions of law.

WON the VA Award is appealable to CA via R43? YES WON the teaching staff is entitled to additional IP for overload? NO
-so CA correct in ruling that the wrong remedy was availed of by the Union -unlike a bonus or commission, the IP is not given for extra efforts exerted. Thus, a
-Luzon Dev’t Bank v. Assn. of Luzon Dev’t Bank Employees: LC silent as to where teacher originally handling a load of 21 units will not be provided IP the next school
appeals from awards of VA may be taken. year even with the same teaching load, should there be a tuition fee increase.
…But VA is a gov’t instrumentality w/n contemplation of BP 129. -To be entitled to IP, it matters not that a teacher is handling a regular full teaching
…Decisions of VA = RTC so should first be appealed to CA. load or is handling extra teaching load. Professors handling extra teaching loads are
…Circ. 1-91: uniform procedure for appeal correspondingly compensated depending on the extra units they are assigned. To
…Cric. 1-91 revised by Revised Adm. Circ. No. 1-95: now expressly provided that grant them additional IP would amount to double compensation.
decisions of VA may be appealed to CA via R43
-R65 P4C not appropriate: here, question of fact is involved, not the lack of
jurisdiction of the VA in rendering award. Union questions the decision of the VA on MANILA CENTRAL LINE CORP. VS. MANILA CENTRAL LINE FREE
WON the university’s practice of sourcing the integrated IP in the CBA from the WORKERS, SUPRA
70% share of the personnel in the IP violates the provisions of the CBA
Summary: The corporation and the union were renegotiating their CBA but had a
deadlock. Nothing happened in the NCMB proceedings so Union filed a Petition for
WON CEU may deduct the integrated IP from the employees’ share coming from
Compulsory Arbitration before the NLRC. The LA ordered them to submit position
the 70% increase (and therefore, is not violating the CBA)? YES. No violation of the
papers containing their proposed provisions of the CBA. The LA rendered a decision
CBA
which contained the applicable CBA between them. Corporation appealed to NLRC
-The integrated IP provided in the CBAs of the teaching and the non-teaching staff is
but was denied. The Corporation is now questioning the jurisdiction of the LA to
actually the share of the employees in the 70% of the IP that is incorporated into
render the said decision. Court held on this point that the corporation agreed with
their salaries as a result of the negotiation between the university and its personnel.
the Union to submit the dispute to LA. The Corporation is correct in saying that
The purpose of the integration is to regularize the receipt by the personnel of the
now, when NCMB proceedings fail, the parties should be referred to VA, as before,
benefits arising from the increase in the school’s tuition fees. But it does not change
parties would be referred to LA:
the nature of the benefit as IP.
-Although the union's petition was for "compulsory arbitration," the subsequent
-Cebu Institute of Medicine v. Cebu Institute of Medicine Employees’ Union-
agreement of petitioner to submit the matter for arbitration in effect made the
National Federation of Labor: the allocation of the 70% of the IP is considered a
arbitration a voluntary one. The essence of voluntary arbitration, after all, is that it
management prerogative. The only precondition is that seventy percent (70%) of
is by agreement of the parties, rather than compulsion of law, that a matter is
the incremental tuition fee increase goes to the payment of salaries, wages,
submitted for arbitration.  It does not matter that the person chosen as arbitrator is
allowances and other benefits of teaching and non-teaching personnel.
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a labor arbiter who, under Art. 217 of the Labor Code, is charged with the justice: his award is legitimate only in so far as it draws its essence from the CBA,
compulsory arbitration of certain labor cases. There is nothing in the law that i.e., when there is a rational nexus between the award and the CBA under
prohibits these labor arbiters from also acting as voluntary arbitrators as long as the consideration. It is said that an arbitral award does not draw its essence from the
parties agree to have him hear and decide their dispute. CBA; hence, there is an unauthorized amendment or alteration thereof, if:
* note that the other points in the case were on the decision of the LA that 1. It is so unfounded in reason and fact;
contained provisions of the CBA…covered by the previous part of the reviewer. 2. It is so unconnected with the working and purpose of the agreement;
3. It is without factual support in view of its language, its context, and any other
SEVILLA TRADING V. SEMANA (2004) indicia of the parties' intention;
4. It ignores or abandons the plain language of the contract;
Summary: the Corporation computed its 13th month pay by including in the base
5. It is mistakenly based on a crucial assumption which concededly is a nonfact;
pay the other benefits it had given its employees. Allegedly because the one in
6. It is unlawful, arbitrary or capricious; and
charge of computing the 13th month pay committed a mistake, it unilaterally
7. It is contrary to public policy.
recomputed the 13th month pay (therefore, decreased the amount received by the
-X: IF CBA AMBIGUOUS.
EEs for their 13th month pay). Union complained, grievance procedure resorted to
If the terms of a CBA are clear and have no doubt upon the intention of the
but ended up submitting to VA. VA ifo Union. ER filed R65 P4C beyond 15 days.
contracting parties, the literal meaning of its stipulation shall prevail. However, if, in
Court held that first, an ordinary R43 appeal should have been filed. R65 P4C is not
a CBA, the parties stipulate that the hirees must be presumed of employment
a substitute for a loss appeal. Second, the Corporation cannot unilaterally withdraw
qualification standards but fail to state such qualification standards in said CBA, the
the benefits resulting from company practice (For 6 years, it has included in the
VA may resort to evidence extrinsic of the CBA to determine the full agreement
base pay the other benefits received by the employees).
intended by the parties. When a CBA may be expected to speak on a matter, but
does not, its sentence imports ambiguity on that subject. The VA is not merely to
UNITED KIMBERLY CLARK EMPLOYEES UNION V. KCPI (2006), SUPRA
rely on the cold and cryptic words on the face of the CBA but is mandated to
Summary: KCPI adopted the 1997 employment guidelines which provided that the discover the intention of the parties. Recognizing the inability of the parties to
recommendees of the retiring employees should be at least graduate of a 2 year anticipate or address all future problems, gaps may be left to be filled in by
vocational course or at least attained 3rd year college. The Union contested it, and reference to the practices of the industry, and the step which is equally a part of the
KCPI deferred its implementation subject to the results of the CBA. The CBA did not CBA although not expressed in it. In order to ascertain the intention of the
contain any qualifications as to the recommendees (as the Union is insisting that contracting parties, their contemporaneous and subsequent acts shall be principally
the recommendees be just high school graduates) so KCPI continued the considered. The VA may also consider and rely upon negotiating and contractual
implementation of the Guidelines. KCPI also suspended the CBA allegedly due to history of the parties, evidence of past practices interpreting ambiguous provisions.
financial problems. Union and KCPI failed to settle the problem through the The VA has to examine such practices to determine the scope of their agreement,
grievance machinery so filed with NCMB a submission agreement, with an as where the provision of the CBA has been loosely formulated. Moreover, the CBA
agreement not to appeal the decision of the VA. Union assailed the implementation must be construed liberally rather than narrowly and technically and the Court
of the guidelines while KCPI alleged it was an exercise of management prerogative. must place a practical and realistic construction upon it.
The VA visited KCPI premises and found that KCPI hired casuals who performed -here: The VA ignored the plain language of the 1997 CBA of the parties, as well as
work of regular employees. VA decided ifo Union, saying that KCPI cannot the Guidelines issued by respondent. He capriciously based his resolution on the
unilaterally change the guidelines of hiring recommendees and cannot ignore what respondent’s practice of hiring which, however, by agreement of petitioner and
has been agreed upon during CBA negotiations. VA also held that KCPI cannot argue respondent, was discontinued.
economic conditions since it was found that it continued to hire casuals to do job of
regular employees. KCPI appealed to CA. CA partially set aside the VA decision, LEYTE IV ELECTRIC COOPERATIVE V. LUYECO IV EMPLOYEES UNION
saying that KCPI can impose additional qualifications for recommendees. Union now (2007)
contest the said decision. SC held on the point of VA:
- GR: WHEN CBA CLEAR, STICT TO CBA’S LITERAL INTERPRETATION Summary: CBA provided that employees would be paid holiday pay. Union claimed
an arbitrator is confined to the interpretation and application of the collective the holiday pay but mngt said they already paid it. Grievance machinery pursued
bargaining agreement. He does not sit to dispense his own brand of industrial but exhausted, parties submitted to NCMB. Parties submitted their position papers.

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Union admitted that the employees were being paid for all the days of the month -final and executor after 10 calendar days from RECEIPT of the copy of the award or
(even if there is no work – including holidays) but still claims for holiday pay. ER its decision by the parties.
insisted it already is deemed to have paid the said holiday pay. VA ruled ifo Union, X: unless appealed to NLRC
saying that the CBA required that the payment of the holiday pay be reflected in the -WoE: may be issued
payroll slips but the payroll slips did not so provide. MR filed before VA but denied. …upon motion of interested party
30 days after denial of MR, ER filed R65 P4C before CA (VA GADALEJ) but CA …made by
dismissed the petition for wrong mode of remedy: Should have been R43. SC held VA
that wrong remedy indeed but for interest of substantial justice, considered the R65 VA Panel
petition because the VA decision would require the ER to pay EE double: LA in region where movant resides, in case of absence or incapacity of VA
-Luzon Dev’t Bank Case: VA enjoys in law the status of a QJA; hence, his decisions
are appealable to CA. This is so because the awards of voluntary arbitrators become INDOPHIL TEXTILE MILL WORKERS UNION V. CALICA (1992)
final and executory upon the lapse of the period to appeal; and since their awards
Summary: The officers of Indophil Textile created Indophil Acrylic. Both have
determine the rights of parties, their decisions have the same effect as judgments
different bargaining units but the union of Indophil Textile want to extend their
of a court. 
bargaining unit to the employees of Indophil Acrylic, the latter being an extension
-R43 (providing that R43 shall not apply to judgments or final orders issued under
or expansion in accordance with the CBA. Grievance machinery exhausted, parties
the Labor Code of the Philippines) is merely a reiteration of the exception to the
resorted to VA. VA held for Indophil textile so Union appealed. SC affirmed VA.
exclusive appellate jurisdiction of the CA as stated in BP 129. Further, decisions of
-the decisions of voluntary arbitrators are to be given the highest respect and a
VA are not issued pursuant to LC since it is a QJ Instrumentality similar to the ECC
certain measure of finality, but this is not a hard and fast rule, it does not preclude
-GR: R43 petition for review to CA
judicial review thereof where want of jurisdiction, grave abuse of discretion,
-X: R65 P4C, especially when VA acted in total disregard of evidence material to or
violation of due process, denial of substantial justice, or erroneous interpretation of
decisive of the controversy.
the law were brought to our attention.
…other exceptions:
-here, VA Calica did not abuse his discretion, even citing facts and the law upon
(a) when public welfare and the advancement of public policy dictate;
which his award was based. But the court found that VA Calica did not err in not
(b) when the broader interests of justice so require;
allowing the corporate veil of Indophil textile based on jurisprudence (and also
(c) when the writs issued are null; and
since the Union is not claiming any liability of the officers of the corporation but is
(d) when the questioned order amounts to an oppressive exercise of judicial
merely insisting on the expansion of its bargaining unit. The claim of liability on the
authority.
officers of the corporation merits the piercing of the corporate veil).
-Court still entertained the R65 petition because the ER alleged that the VA decision
conclusions have no basis in fact and in law: The Voluntary Arbitrator gravely
abused its discretion in giving a strict or literal interpretation of the CBA provisions
PLDT V. MONTEMAYOR (1990)
that the holiday pay be reflected in the payroll slips. Such literal interpretation
ignores the admission of respondent in its Position Paper that the employees were Summary: PLDT dismissed 3 employees: 2 for dishonesty and 1, a probational
paid all the days of the month even if not worked. employee, for failure to meet the minimum requirement for regularization. The
-HERE: EEs required to work only from Monday to Friday.  Thus, the minimum Union contested the termination, they all agreed to submit dispute to VA. VA held
allowable divisor is 263, which is arrived at by deducting 51 un-worked Sundays and ifo Union, held that PLDT should not have dismissed the EEs. Termination of the 2
51 un-worked Saturdays from 365 days.  Considering that petitioner used the 360- dishonest employees too drastic + probi employee should have been retained
day divisor, which is clearly above the minimum, indubitably, petitioner's because she was in fact a regular employee already. PLDT MR denied. So they filed
employees are being given their holiday pay. P4C directly to SC. SC held that there was GADALEJ on the part of the VA.
-Apropos of the power of judicial review, while decisions of voluntary arbitrators
FINALITY AND EXECUTION OF AWARDS are given the Highest respect and accorded a certain measure of finality, this does
not preclude the exercise of judicial review over such decisions. A voluntary
Art. 262-A
arbitrator, by the nature of his functions, acts in a quasi-judicial capacity. There is
Award:
no reason why his decisions involving interpretations of law should be beyond the
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Supreme Court's review. Administrative officials are presumed to act in accordance IMPERIAL TEXTILE MILLS INC V. SAMPANG (1993), SUPRA
with law and yet the Court does not hesitate to pass upon their work where a
question of law is involved or where there is a showing of abuse of authority or Summary: VA reconsidered his decision which was initially ifo Corp. Court held that
discretion in their official acts. once he has rendered his decision, his office terminates. He did not have jurisdiction
-PLDT is justified in dismissing the employees: In the ultimate analysis, dismissal of a to review his decision anymore. His award was rendered during the time when the
dishonest employee is in the best interest not only of management but also of LC provided that the awards of VA are already final and executory.
labor. As a measure of self-protection against acts inimical to its interest, a
company has the right to dismiss its erring employees. The law never intended to UNICRAFT INDUSTRIES INT’L V. CA (2002)
impose unjust situations on either labor or management. Summary: In the initial case, the facts stated that the respondents were employees
-but as to the “probi” employee, her dismissal is not justified so VA correct in saying of the ER who were transferred to the Cebu branch of the ER. However, the Cebu
that she should be reinstated branch was closed for failure to comply with city government requirements, and the
service of the EEs were terminated. The employees contested the dismissal, they
MARANAW HOTELS VS. CA (1992) submitted dispute to VA. VA decided w/o receiving evidence from the ER, ordering
Summary: Room boy was found to have blurted out discourteous remarks against the payment of separation pay and atty’s fees. During appeal to the CA, the parties
his supervisors. He was dismissed by the ER. Room boy filed Complaint for Illegal agreed to a stipulation to refer back the proceedings to the VA to determine WON
dismissal, which was submitted to VA. VA found that the discourtesy only merits a 7 there was illegal dismissal. The VA, however, declared that he had already lost his
day suspension in accordance with the rules of the ER but since he was terminated, jurisdiction over the case when he rendered the Award ifo Union. CA then partially
the room boy should have been reinstated. ER appealed to CA but CA denied, even executed the decision, which was assailed by the ER. Court held that the VA has not
in MR. Court held that petition had no merit, as there was no GADALEJ on the part yet lost his jurisdiction because he has not provided both parties adequate
of the VA. opportunity to be heard.
-As in the case of a labor arbiter, the conclusions of a voluntary arbitrator, when -the finding of the A was premature and null and void because the award of
they are sufficiently corroborated by the evidence on record, should similarly be separation pay carries with it the inevitable conclusion that the complainants were
respected by appellate tribunals since he is also in a vantage position to assess and illegally dismissed.
evaluate the credibility of the contending parties.
-We have also emphasized the rule that decisions of voluntary arbitrators are final SIME DARBY PILIPINAS V. MAGSALIN (1989)
and unappealable except when there is Summary: The CBA entered by Sime Darby with the Unions in its establishment
...want of jurisdiction contained a provision for the grant of performance bonus, dependent on the return
...grave abuse of discretion of capital investment as reflected in the financial statements. The Unions claimed
...violation of due process the said performance bonus but Sime Darby alleged that the performance of the
...denial of substantial justice Union’s members did not justify the award of such bonus. They submitted their
...erroneous interpretation of the law. dispute to the VA, and agreed that the award of the VA be final and executor. Both
-HERE: None of the exceptions lie in the case before Us. parties submitted their respective position papers, but Sime Darby expressed that it
-ON STRAINED RELATIONS ARGUMENT: NOT TENABLE: the doctrine of strained would file a Reply to the position papers of the unions. The VA, however, ruled ifo
relations cannot be applied with impunity lest We trifle with the rights of wage the unions even w/o the reply filed by the ER. VA ruled that Sime Darby had enough
earners by authorizing management to indiscriminately dismiss them and thereafter retained earnings to grant the performance bonus demanded by the union. Sime
provide the employer with the convenient and ready excuse not to reinstate them. Darby filed MR but was denied, VA saying that he already lost jurisdiction once he
On the contrary, We have to exercise extreme caution in this regard. rendered the said award. Now Sime Darby filed R65 P4C assailing the award, saying
-Indeed, "strained relations" may be invoked only against employees whose there was GADALEJ. Court upheld VA’s decision:
positions demand trust and confidence, or whose differences with their employer -the award of a Voluntary Arbitrator is final and executory after ten (10) calendar
are of such nature or degree as to preclude reinstatement. In the instant case, days from receipt of the award by the parties.
however, the relationship between private respondent, a roomboy, and -B4: award of a Voluntary Arbitrator relating to money claims amounting to more
management was clearly on an impersonal level. than P 100,000.00 or forty percent (40%) of the paid-up capital of the employer

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(whichever was lower), could be appealed to the National Labor Relations between ER and Ramoran submitting the issue of WON Ramoran was terminated
Commission upon the grounds of (a) abuse of discretion; or (b) gross incompetence, for just cause to the VA, LA terminated proceedings before him. Meanwhile, Jardine
presumably of the arbitrator also filed criminal charges for falsification of private documents before MTC Makati.
-NOW: R 65 P4C, but only in exceptional cases: VA ruled that the termination was valid. After that, Ramoran was convicted on one
-a voluntary arbitral award may be modified and set aside only upon the same charge of falsification but was later acquitted. Believing that her acquittal in the
grounds on which a decision of the NLRC itself may be modified or set aside, by this criminal case would reverse the decision of the VA, she filed a R65 P4C before CA.
Court. CA denied it, even in MR. SC ruled ifo Jardine and dismissed petition.
-findings of facts of quasi-judicial agencies are accorded great respect and, at times,
WON VA was only authorized to determine the question of WON a performance even finality, if supported by substantial evidence.
bonus was to be granted, and the determination of the amount to be given is -conclusions of voluntary arbitrator (or a panel as in this case) when they are
reserved for determination by the employer Sime Darby? NO. sufficiently corroborated by the evidence on record, should similarly be respected
-Submission agreement only submitted for resolution "the issue of performance by appellate tribunals.
bonus.". If Sime Darby's counsel deemed it as two-tiered problem, he should have - Dismissal on the basis of loss of trust and confidence calls for substantial evidence
said so but no! only . . . defined as the amount of relevant evidence which a reasonable mind might
- the Voluntary Arbitrator had plenary jurisdiction and authority to interpret the accept as adequate to justify a conclusion . . . . It does not demand proof beyond
agreement to arbitrate and to determine the scope of his own authority subject reasonable doubt of the employee's misconduct. . . . As pointed out by the panel,
only, in a proper case, to the certiorari jurisdiction of this Court. The Arbitrator, as the petitioner submitted the case for decision without any evidence, documentary
already indicated, viewed his authority as embracing not merely the determination or testimonial, other than her own allegations, adopting only as her proof the
of the abstract question of whether or not a performance bonus was to be granted overtime authorization slips involved. It should be noted that the panel did not have
but also, in the affirmative case, the amount thereof. the benefit of examining the other evidence apparently adduced by RAMORAN in
the criminal prosecution and there is no showing that the evidence in the latter
WON VA GADALEJ in awarding an amount equivalent to 75% of the basic monthly proceeding was ever introduced before the panel. The voluntary arbitrators,
pay of the members of the respondent Union for being devoid of factual basis? therefore, cannot be faulted for so deciding based on the evidence made available
Not really. VA based his decision on the CBA, which does not identify whose to them.
performance is to be appraised in determining an appropriate amount to be -even if the trial court found the same documentary evidence to be inadequate to
awaded as performance bonus. Court considered performance of the company as a sustain Ramoran's conviction, by no means does it prevent the panel from
whole, not merely the production or manufacturing performance of its employees. considering the evidence sufficient to warrant dismissal
-ON WON RAMORAN WAS DEPRIVED OF DUE PROCESS: NO
...She atended the administrative investigation scheduled by the employer. She was
LUDO & LUYM CORP V. SAORNIDO (2003), SUPRA given opportunity to give her side. She consented to resorting to VA and
participated in the selection of the VAs.
Summary: Ludo hired as regular employees arrastre workers from CLAS. Now these
-ON MITIGATION OF LIABILITY THAT IT WAS THE FIRST TIME THAT SHE WAS
workers joined Ludo's labor union and are now claiming benefits enjoyed by union
CHARGED W/ FALSIFICATION: Cannot be. She was earlier suspended for allegedly
members. They went to VA, submitted only as the issue to be resolved the date of
tampring with entries in OR issued by Limited Vision Center in support of her
regularization of the employees but the VA awarded benefits (determined amount
application for the optical loan...
to be received by the parties). Court held that VA has plenary jurisdiction to make
awards in the interest of speedy justice.

RAMORAN V. JARDINE CMG LIFE INSURANCE (2000)


Summary: Ramoran was found to have falsified some OT slips and upon
investigation, was dismissed from work. Union defended her, even filing a notice of
strike before NCMB. Proceedings in LA initiated but upon a compromise agreement

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