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Labor Arb Reviewer_Cha Mendoza

Labor Arb Reviewer_Cha Mendoza

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my compilation of case summaries...incomplete though
my compilation of case summaries...incomplete though

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II.B.

NON-UNIONIZED ESTABLISHMENTS LABOR-MANAGEMENT COUNCIL

PAL V. NLRC, 225 SCRA 301 (1993) SUMMARY: PAL revised its 1966 Code of Discipline in 1985, without sufficient notice to its employees, thereby subjecting some of its employees to disciplinary measures and even dismissing some of them. PALEA filed a ULP case before NLRC. LA was for PAL, though she did not find any ULP or BF bargaining on PAL s part. NLRC affirmed said decision. SC upheld the said decisions, saying that PAL should have involved the employees in the revision of the Code of Discipline as it is not purely management prerogative, the act involving repercussions to the employees security of tenure. Shared responsibility between management and labor also highlighted as already an existing state policy even before the amendment of the LC. FACTS: -PAL unilaterally revised its 1966 Code of Discipline in March 15, 1985.; This was immediately implemented -it was circulated among its employees (point of contention: PAL contends all the employees received a copy while PALEA argues otherwise) -as a result of the said revision, some of the employees were subjected to disciplinary measures in accordance with the said 1985 Code of Discipline -PALEA filed a complaint before NLRC for ULP (A249 e and g; Art. 253): y copies of the code circulated in limited numbers y Code is penal in nature: should have complied with requirements of sufficient publication y Code was arbitrary, oppressive, and prejudicial to the rights of the employees >PRAYER: 1. Implementation of the Code be held in abeyance 2. PAL discuss substance of the Code with PALEA 3. EEs dismissed be reinstated, subjected to further hearing 4. PAL be declared guilty of ULP, ordered to pay damages -PAL filed MTD: 1. Management prerogative 2. Complaint not supported by evidence 3. Art 253 not involved because a CBA was already negotiated 1|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

-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 entirety of the rules and regulations of the company. Every employee is bound to comply with all applicable rules, regulations, policies, procedures and standards, including standards of quality, productivity and behaviour, as issued and promulgated by the company through its duly authorized officials. Any violations thereof shall be punishable with a penalty to be determined by the gravity and/or frequency of the offense. Sec. 7. Cumulative Record. An employee's record of offenses shall be cumulative. The penalty for an offense shall be determined on the basis of his past record of offenses of any nature or the absence thereof. The more habitual an offender has been, the greater shall be the penalty for the latest offense. Thus, an employee may be dismissed if the number of his past offenses warrants such penalty in the judgment of management even if each offense considered separately may not warrant dismissal. Habitual offenders or recidivists have no place in PAL. On the other hand, due regard shall be given to the length of time between commission of individual offenses to determine whether the employee's conduct may indicate occasional lapses (which may nevertheless require sterner disciplinary action) or a pattern of incorrigibility. -LA Ortiguerra called conference parties did not attend so LA Ortiguerra considered the case submitted for decision (interpreted absence to waiver of right to present evidence) -LA: 1. No BF on PAL 2. No ULP BUT A. Section 1 of the Code: all embracing, all encompassing that makes punishable any offense one can think of in a company B. Section 7: objectionable for it violates the rule against double jeopardy thereby ushering in two or more punishment for the same misdemeanor." C. PAL failed to prove that the Code was amply circulated (no documentary evidence): -so PAL needs to:
Go ninja! Go!

1. Furnish all employees with the new Code of Discipline; 2. Reconsider the cases of employees meted with penalties under the New Code of Discipline and remand the same for further hearing; and 3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the decision. All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit. -PAL appealed to NLRC -NLRC (Com. Encarnacion): No evidence of ULP, affirmed dismissal of PALEA s charge but: The complainant union in this case has the right to feel isolated in the adoption of the New Code of Discipline. The Code of Discipline involves security of tenure and loss of employment a property right! It is time that management realizes that to attain effectiveness in its conduct rules, there should be candidness and openness by Management and participation by the union, representing its members. In fact, our Constitution has recognized the principle of "shared responsibility" between employers and workers and has likewise recognized the right of workers to participate in "policy and decision-making process affecting their rights . . ." The latter provision was interpreted by the Constitutional Commissioners to mean participation in "management"' (Record of the Constitutional Commission, Vol. II). In a sense, participation by the union in the adoption of the code if conduct could have accelerated and enhanced their feelings of belonging and would have resulted in cooperation rather than resistance to the Code. In fact, labor-management cooperation is now "the thing." (pp. 3-4, NLRC Decision ff. p. 149, Original Record.) -PAL appealed NLRC Decision: there is no law which mandated the sharing of responsibility between EE and ER ISSUE: WON management may be compelled to share with the union or its employees its prerogatives of formulating a code of disciplne? (note: PAL s Code was revised 1985) HELD: YES -Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the Labor Code, that the law explicitly considered it a State policy "(t)o ensure the participation of workers in decision and policy-making processes affecting the rights, duties and welfare." However, even in the absence of said clear provision of law, the exercise of management prerogatives was never considered boundless. y Cruz vs. Medina (177 SCRA 565 [1989]): management's prerogatives must be without abuse of discretion. y San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]): upheld the company's right to implement a new system of distributing its products, but gave the following caveat: So long as a 2|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

company's management prerogatives are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them. y University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]: the exercise of managerial prerogatives is not unlimited. It is circumscribed by limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice y Abbott Laboratories (Phil.), vs. NLRC (154 713 [1987]): it must be duly established that the prerogative being invoked is clearly a managerial one. -HERE: they are not purely business-oriented nor do they concern the management aspect of the business of the company as in the San Miguel case. The provisions of the Code clearly have repercusions on the employee's right to security of tenure. The implementation of the provisions may result in the deprivation of an employee's means of livelihood which, as correctly pointed out by the NLRC, is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). - uphold the constitutional requirements for the protection of labor and the promotion of social justice, for these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker" (Employees Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635). - a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly 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 finding, to say the least is entitled to great respect. PAL posits the view that by signing the 1989-1991 collective bargaining agreement, 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 management without having to discuss the same with PALEA and much less, obtain the latter'sconformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180181, Rollo.) Petitioner's view is based on the following provision of the agreement: The Association recognizes the right of the Company to determine matters of management it policy and Company operations and to direct its manpower. Management of the Company includes the right to organize, plan, direct and control operations, to hire, assign employees to work, transfer employees from one department, to another, to promote, demote, discipline, suspend or discharge employees for just cause; to lay-off employees for valid and legal causes, to introduce new or improved methods or facilities or to change existing methods or facilities and the right to make and enforce Company rules and regulations to carry out the functions of management.
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The exercise by management of its prerogative shall be done in a just reasonable, humane and/or lawful manner. -Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights to participate in the deliberation of matters which may affect their rights and the formulation of policies relative thereto. And one such mater is the formulation of a code of discipline. -on point that RA 6715 amending the LC was not yet in force: While such "obligation" was not yet founded in law when the Code was formulated, the attainment of a harmonious labor-management relationship and the then already existing state policy of enlightening workers concerning their rights as employees demand no less than the observance of transparency in managerial moves affecting employees' rights. -Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature of its business cannot be overemphasized. In fact, its being a local monopoly in the business demands the most stringent of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted cannot be properly implemented in the absence of full cooperation of the employees. Such cooperation cannot be attained if the employees are restive on account, of their being left out in the determination of cardinal and fundamental matters affecting their employment. DISPOSITION: PETITION DISMISSED

-Sept 1979, SMC introduced CDS where its beer products were offered for sale directly to wholesalers through SMC offices. This led PTGWO to file ULP case w/ Ministry of Labor + notice of strike (for union busting and violation of CBA): 1. CDS was contrary to the existing marketing scheme: Route salesmen were assigned to specific territories w/n which to sell their stocks of beer, wholesalers had to buy beer products from them 2. CDS violates the CBA: reduces the take-home pay of the salesmen and truck helpers -MINISTER OF LABOR: 1. NO VIOLATION ON SMC S PART CDS was only a part of SMC s overall plan to improve efficiency and economy and to gain profit to the highest. change in present marketing scheme too insignificant to interpret that it interfered w/ worker s right to self-organization 2. ON ARGUMENT THAT CDS WOULD SOW DISSATISFACTION FROM THE RANK: already a prejudgment PTGWO failed to consider that corollary to the adoption of CDS is the effort of the company to compensate whatever loss the workers may suffer because of the new plan and above than what has been provided in the CBA ISSUE: WON SMC S CDS is a valid exercise of Management prerogative? HELD: YES -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 assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of work. ... (NLU vs. Insular La Yebana Co., 2 SCRA 924; Republic Savings Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V. Hernandez, Labor Relations Law, 1985 Ed., p. 44.) (Emphasis ours.) -Every business enterprise endeavors to increase its profits. In the process, it may adopt or devise means designed towards that goal. y 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 of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. y LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil. American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil. Refining Co. vs. Garcia, 18 SCRA 110: So long as a company's management prerogatives are exercised in good faith for the advancement of the employer's interest and not for the purpose of
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SAN MIGUEL BREWERY SALES FORCE UNION V. OPLE, 170 SCRA 25 (1989) SUMMARY: PTGWO and SMC entered into a CBA in April 1978 (effective May 1, 1978-January 31, 1981) which provided that employees would receive an additional commission based on their respective sales. However, in 1979, SMC adopted the Complementary Distribution System (CDS) wherein beer products were sold directly to wholesalers, thereby removing any chance for the employees to gain commission. PTGWO filed a case for ULP. Minister of Labor absolved SMC. SC upheld the CDS, ruling that it was a valid exercise of management prerogative. Besides, SMC offered to compensate those who would be affected by paying them back adjustment commission . FACTS -PTGWO and SMC entered into a CBA in April 17, 1978 (effective until January 31, 1981). One of its provisions is as follows (SEC1 of ART IV): Art. IV, Section 1. Employees within the appropriate bargaining unit shall be entitled to a basic monthly compensation plus commission based on their respective sales. (p. 6, Annex A; p. 113, Rollo.) 3|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them -San Miguel Corporation's offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS by paying them a socalled "back adjustment commission" to make up for the commissions they might lose as a result of the CDS proves the company's good faith and lack of intention to bust their union. DISPOSITION:WHEREFORE, the petition for certiorari is dismissed for lack of merit. SO ORDERED.

GTE DIRECTORIES CORP V. SANCHEZ, 197 SCRA 452 (1991) SUMMARY: GTE through the years adopted several Sales evaluation policies. Pursuant to the latest sales policy, GTE issued 6 memoranda to its employees which required the Premise Sales Reps (PSRs) to submit individual reports reflecting target revenues as of deadlines set. None of these memoranda were followed by the employees, arguing that they were not consulted. As a result, 14 employees (some of them Union officers) were dismissed. Union also filed notice of strike before the 4th memo was issued. Court held that GTE s sales policy was pursuant to the valid exercise of management prerogatives and that its implementation is not suspended merely because of pending negotiations initiated by the Union. FACTS: -GTE Directories Corp. had observed several sales evaluation policies through the years: 1. DRAW METHOD: its sales representatives to be given work assignments within specific territories. These sales territories were so plotted or mapped out as to have "an equal number of advertisers as well as . . . revenue. . ." Within these territories, the sales representatives therein assigned were given quotas; i.e., they had to "achieve a certain amount of revenue or advertisements sold, decreased, increased or cancelled within a given period of time." A territory was not fully released to the salesperson for handling at one time, but assigned in increments or partial releases of account. 2. GRID SYSTEM: each sales rep were given grids (divisions or sections) within each territory usually numbering five (i.e., Grids I to V). Each grid was assigned a fixed closing dated. At such closing date, a salesperson should have achieved a certain amount of the revenue target designated for his grid; otherwise, he loses the forthcoming grid or forfeits the remaining grids not yet received. Why GRID SYSTEM INSTALLED: (1) to give all salespersons an opportunity to contact advertisers within a reasonable period; 4|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

(2) to assure GTE that it will get its share of advertising budget from clients as early as possible; and (3) to ensure an even flow of work throughout the company. 3. SALES EVALUATION AND PRODUCTION POLICY: adopted to get what it considered its rightful share of the advertising budget of its clientele: (1) all its sales representatives were required, as in the past, to achieve specified revenue targets (advertisements sold) within pre-determined periods; (2) in cases of cancelled revenue accounts or advertisements, it required all its 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 sales representatives including the one who reported the cancellation; (4) if not renewed during said open territory period, said cancelled accounts were deemed no longer "open territory," and the same could be referred for handling to contractual salespersons and/or outside agencies. -Through an Oct. 12, 1984 MEMO, GTE informed its sales reps of the new policy. -Union demanded that it be allowed to raise questions or objections to the new policy, which GTE allowed -Union submitted OCT 26, 1984 letter for proposals to the new policy (proposing to delete the new policy) -GTE formulated new set of "Sales Administrative Practices" (4th!) st -pursuant to the new policy, GTE issued July 9, 1985 MEMO(1 memo): required all Premise Sales Reps to submit individual reports reflecting target revenues (P30k) as of August 2, 1985 -2nd MEMO (JULY 16) issued based on "the consensus reached after several discussions with your DSMs, as well as, most of you":extended the deadline and further reduced the target to P20k rd -3 MEOMO (AUG 5): sent to all PSR; observed noncompliance of most of them; gave deadline 2PM; as before, no sales rep submitted their report -GTE Directories Corp. Employees Union (UNION) sent AUG 5, 1985 letter to sales rep, saying the ff: 1."only one out of nineteen sales representatives met the P20,000 revenue handled on our first grid deadline of August 2 2. that the schedule was not "drawn (up) as a result of an agreement of all concerned since GTE had failed to get "affirmative responses" from "clustered groups of SRs;" 3. that the union could not "Comprehend how cancelling non-cancelling accounts help production;" and that 4. its members would fail "expectations of cancelling . . . non-cancelling accounts" since it "would result to further reduction of our pay which (they) believe is the purpose of your discriminate and whimsical memo."
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-AUG 6: UNION filed notice of strike, allegedly based on ULP of GTE 1. Refusal to bargain on unjust sales policies particularly on the failure to meet the 75% of the average sales production for two consecutive years; 2. Open territory of accounts; 3. Illegal suspension of Brian Pineda, a union officer; and 4. Non-payment of eight days' suspension pay increase. -BLR undertook conciliation -4th MEMO (AUG 6): Required 16 sales reps to submit individual reports not later than 4 PM - still no compliance so GTE suspended its sales reps w/o pay effective AUG 12 for 5 working days + warning that failure to submit would merit more drastic disciplinary actions th -5 MEMO (AUG 19): all sales reps concerned were suspended effective AUG 20 until they submitted report. Still no compliance -6th MEMO (AUG 23): individually addressed, required sales reps concerned to submit the required reports (LIST OF ACCOUNTS TO BE CANCELLED) w/n 24 hours or else they would be terminated for cause . Still NO COMPLIANCE! -AUG 29: union sent undated letter to GTE acknowledging receipt of notice of suspension on AUG 19 and professed surprise at being served w/ a contradictory notice (set schedule vs. 24 hours) and asked which of the 2 directives to follow, reserving right to take action for harassment and intimidation (alleged ULP) -individually, 14 sales reps received letter dated AUG 29 terminating their employment, w/ undertaking to give them separation pay upon proper clearance and submission of company documents in their possession. These included the union s president and 3rd VP. -SEPT 2: Union declared strike of 60 employees. -even before the suspension, BLR was attempting to prevent impositions of GTE on its employees of sanctions, and the strike itself. Since it proved futile, Acting Labor Minister LEOGARDO issued DEC 6 ORDER assuming jurisdiction over the dispute pursuant to ART 264(g) of LC, as amended: * All striking workers dismissed during the conciliation proceedings (14) were directed to return to work *Management of GTE ordered to accept returning employees w/o prejudice to the determination of the obligation and rights of the parties or to the final outcome of the dispute. * Dispute "adversely affects the national interest," because: 1) GTE, a "100% foreign owned" company, had, as publisher of "PLDT's Metro Manila and provincial directories . . . earned a total of P127,038,463 contributing close to P10 million in income tax alone to the Philippine government," and that "major contribution to the national economy . . . (was) being threatened because of the strike;" and 2) "top officers of the union were dismissed during the conciliation process thereby compounding the dispute," 5|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

-GTE filed MR of Acting Secretary Leogardo s order on DEC 16, mostly assailing SOLE s jurisdiction, w/o prior consultation w/ the parties. GTE also expressed position of accepting the other striking workers back to work, except the 14 sales reps who were dismissed for cause prior to the strike (therefore not included in the return-to-work order) -JAN 20, 1986 RESOLUTION (this time by Labor Minister OPLE): Denied MR: 1) adverted to the "general rule (that) promulgations of company policies and regulations are basic management prerogatives although the principle of collective bargaining encompasses almost all relations between the employer and its employees which are best threshed out through negotiations, . . . (and that) it is recognized that company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the parties until finally revised or amended unilaterally or preferably through negotiations or by competent authorities;" 2) affirmed the "recognized principle of law that company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding (and) valid on the parties and must be complied with until finally revised or amended unilaterally or preferably through negotiations or by competent authorities;" and 3) closed by pointing out that "as a basic principle, the matter of the acceptability of company policies and rules is a proper subject of collective negotiations between the parties or arbitration if necessary." -JAN 21 CLARIFICATORY ORDER: reiterated management prerogatives must be complied with until finally revised or amended unilaterally, or preferably, through negotiations or by competent authorities. -SANCHEZ ORDER on March 31, 1986 (on the merits of the labor dispute): 1) pointed out "that the issue central to the labor dispute revolves around compliance with existing company policies, rules and regulations specifically the sales evaluation and production policy which was amended by the October 12, 1984 memorandum and the grid schedule;" 2) declared that because fourteen (14) sales representatives who after reinstatement pursuant to the order of January 20, 1986 had been placed "on forced leave with pay "were actually dismissed for failure to comply with the reporting requirements under the "Sales Administration Practices" which was (sic) then the subject of negotiations between the parties at the Bureau of Labor Relations," it was only fair that they 'be reinstated . . .with back wages since they were terminated from employment based on a policy . . . still being negotiated to avoid precisely a labor-management dispute from arising" therefrom;" 3) pronounced the union's action relative to the allegedly illegal dismissal of one Brian Pineda to be "barred by extinctive prescription" in accordance with the CBA then in force; and 4) on the foregoing premises adjudicated the dispute as follows:
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1. The union and management of G.T.E. Directories Corporation are directed to negotiate and effect a voluntary settlement on the questioned Grid schedule, the Sales Evaluation and Production Policy; 2. Management is ordered to reinstate the fourteen (14) employees with full back wages from the time they were dismissed up to the time that they were on forced leave with pay." -Union and GTE moved for reconsideration -JUNE 6 decision on MR: AFFIRMED: y Pineda s suspension y Question on GTE s sales and administrative policies y Matter of backwages MODIFIED: agreed w/ GTE that the other issues raised were not adequately threshed out in earlier proceedings as GTE had not been given opportunity to present its own evidence. BLR ordered to hear the other issues raised by the union ( i.e., GTE's liability for unfair labor practice, the legality of the strike and the strikers' right to be paid their wages while on strike) -GTE MR -OCT 1 DECISION ON MR: Denied MR 1) invoked Section 6, Rule XIII of the Rules and Regulations Implementing the Labor Code, pertinently reading as follows: During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of the dispute. They are obliged, as part of their duty to bargain collectively in good faith, to participate fully and promptly in the conciliation proceedings called by the Bureau or the Regional Office. Dismissal of the 14 employees for noncompliance w/ the policy subjected to the conciliation proceedings is BF on part of GTE 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 Productions Policy, it would be unripe and premature for us to rule on the legality or illegality on the company's sales policies at this instance;" 3) opted, however, to himself resolve "the so-called 'other issues"' which he had earlier directed the Bureau of Labor Relations to first hear and resolve (in the Decision of June 6, 1986, supra): While the company, in merely implementing its challenged sales policies did not ipso facto commit an unfair labor practice, it did so when it in mala fide dismissed the fourteen salesmen, all union members, while conciliation proceedings were being conducted on disputes on its very same policies, especially at that time when a strike notice was filed on the complaint of the union alleging that said sales policies are being used to bust the union; thus precipitating a lawful strike on the part of the latter. A strike is legal if it was provoked by the employer's failure to abide by the terms and conditions of its collective bargaining agreement 6|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

with the union, by the discrimination employed by it with regard to the hire and tenure of employment, and the dismissal of employees due to union activities as well as the company's refusal to bargain collectively in good faith (Cromwell Commercial Co., Inc. vs. Cromwell Employees and Laborers Union, 19 SCRA 398). The same rule applies if employer was guilty of bad faith delay in reinstating them to their position (RCPI vs. Phil. Communications Electronics & Electricity Workers Federation, 58 SCRA 762). -While as a rule strikers are not entitled to backpay for the strike period (J.P. Heilbronn Co. vs. NLU, 92 Phil. 575) strikers may be properly awarded backwages where the strike was precipitated by union busting activities of the employer (Davao Free Workers, Front, et al. vs, CIR, 60 SCRA 408), as in the case at bar. . . . basta Minister ruled ifo of Union: "directing Union and Management to negotiate a voluntary settlement on the company sales policies and reinstating the fourteen employees with full backwages from the time they were dismissed up to the time they were on forced leave with pay" "but with the modification that management . . . (was) directed to give the striking workers strike duration pay for the whole period of the strike less earnings." -Special civil action instituted by GTE ISSUES: 1. WON GTE had cause to dismiss the 14 GTEs? 2. WON the effectivity of ER s regulations and policies is dependent upon the acceptance and consent of the employees? And their nonapproval would suspend the enforcement thereof and excuse the employee s refusal to comply with the same? 3. WON ER acted evidently in BF in firing the 14 SR for alleged violations of reportorial requirements subjected to the conciliatory proceedings before BLR? 4. WON Minister of Labor had power to assume jurisdiction over the dispute? HELD: 1. YES, GTE had cause to dismiss the 14 PSRs: GTE addressed 6 written official communications to the 14 PSRs but the only response it got from the PSRs were the ff: 1) a letter by their Union to GTE's Sales Manager dated August 5, 1985 in which the requirement was criticized as not being the "result of an agreement of all concerned," and as incomprehensible, "discriminate and whimsical;" 2) a strike notice filed with the Ministry of Labor on August 6, 1985; and 3) an undated letter sent to GTE's Director for Marketing & Sales on August 29, 1985, drawing attention to what it deemed contradictory directives, and reserving the right to take action against the manager for "acts of harassment and intimidation . . . clearly designed to discourage our legitimate union activities in protesting management's continuous unfair labor practices."
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2. NO. -cited SMBrewery vs. Ople (just refer above) -GTE s adoption of a new "Sales Evaluation and Production Policy" was within its management prerogative to regulate, according to its own discretion and judgment, all aspects of employment, including the manner, procedure and processes by which particular work activities should be done. -On objections to the new policy: y the schedule had not been "drawn (up) as a result of an agreement of all concerned y " that the new policy was incomprehensible, discriminatory and whimsical, and "would result to further reduction" of the sales representatives' compensation. *ULP: o Refusal to bargain on unjust sales policies particularly on the failure to meet the 75% of the average sales production for two consecutive years; o Open territory of accounts; o Illegal suspension of Brian Pineda, a union officer; and o Non-payment of eight days' suspension pay increase. -but objections and accusations WOULD NOT justify the deliberate and obdurate refusal of the sales representatives to obey the management's simple requirement for submission by all Premise Sales Representatives (PSRs) of individual reports or memoranda requiring reflecting target revenues which is all that GTE basically required and which it addressed to the employees concerned no less than six (6) times. The Court fails to see how the existence of objections made by the union justify the studied disregard, or wilful disobedience by the sales representatives of direct orders of their superior officers to submit reports. Surely, compliance with their superiors' directives could not have foreclosed their demands for the revocation or revision of the new sales policies or rules; there was nothing to prevent them from submitting the requisite reports with the reservation to seek such revocation or revision. -To sanction disregard or disobedience by employees of a rule or order laid down by management, on the pleaded theory that the rule or order is unreasonable, illegal, or otherwise irregular for one reason or another, would be disastrous to the discipline and order that it is in the interest of both the employer and his employees to preserve and maintain in the working establishment and without which no meaningful operation and progress is possible. Deliberate disregard or disobedience of rules, defiance of management authority cannot be countenanced. This is not to say that the employees have no remedy against rules or orders they regard as unjust or illegal. They may object thereto, ask to negotiate thereon, bring proceedings for redress against the employer before the Ministry of 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 impermissible to reverse the process: suspend enforcement of the orders or rules 7|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

until their legality or propriety shall have been subject of negotiation, conciliation, or arbitration. 3. NO. -No other facts appear on record relevant to the issue of GTE's dismissal of the 14 sales representatives. There is no proof on record to demonstrate any underhanded motive on the part of GTE in formulating and imposing the sales policies in question, or requiring the submission of reports in line therewith. What, in fine, appears to be the Minister's thesis is that an employer has the prerogative to lay down basic policies and rules applicable to its employees, but may not exact compliance therewith, much less impose sanctions on employees shown to have violated them, the moment the propriety or feasibility of those policies and rules, or their motivation, is challenged by the employees and the latter file a strike notice with the Labor Department which is the situation in the case at bar. -When the strike notice was filed by the union, the chain of events which culminated in the termination of the 14 sales persons' employment was already taking place, the series of defiant refusals by said sales representatives to comply with GTE's requirement to submit individual reports was already in progress. At that time, no less than three (3) of the ultimate six (6) direct orders of the employer for the submission of the reports had already been disobeyed. The filing of the strike notice, and the commencement of conciliation activities by the Bureau of Labor Relations did not operate to make GTE's orders illegal or unenforceable so as to excuse continued non-compliance therewith. It does not follow that just because the employees or their union are unable to realize or appreciate the desirability of their employers' policies or rules, the latter were laid down to oppress the former and subvert legitimate union activities. Indeed, the overt, direct, deliberate and continued defiance and disregard by the employees of the authority of their employer left the latter with no alternative except to impose sanctions. The sanction of suspension having proved futile, termination of employment was the only option left to the employer. -To repeat, it would be dangerous doctrine indeed to allow employees to refuse to comply with rules and regulations, policies and procedures laid down by their employer by the simple expedient of formally challenging their reasonableness or the motives which inspired them, or filing a strike notice with the Department of Labor and Employment, or, what amounts to the same thing, to give the employees the power to suspend compliance with company rules or policies by requesting that they be first subject of collective bargaining, It would be well nigh impossible under these circumstances for any employer to maintain discipline in its establishment. This is, of course, intolerable. -Justice Gregorio Perfecto: Success of industries and public services is the foundation upon which just wages may be paid. There cannot be success without efficiency. There cannot be efficiency without discipline. Consequently, when
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employees and laborers violate the rules of discipline they jeopardize not only the interest of the employer but also their own. In violating the rules of discipline they aim at killing the hen that lays the golden eggs. Laborers who trample down the rules set for an efficient service are, in effect, parties to a conspiracy, not only against capital but also against labor. The high interest of society and of the individuals demand that we should require everybody to do his duty. That demand is addressed not only to employer but also to employees. 4. NO - AANI : such as may occur in but not limited to public utilities, companies engaged in the generation or distribution of energy, banks, hospitals, and export-oriented industries, including those within export processing zones -The production and publication of telephone directories, which is the principal activity of GTE, can scarcely be described as an industry affecting the national interest. GTE is a publishing firm chiefly dependent on the marketing and sale of advertising space for its not inconsiderable revenues. Its services, while of value, cannot be deemed to be in the same category of such essential activities as "the generation or distribution of energy" or those undertaken by "banks, hospitals, and export-oriented industries." -It cannot be regarded as playing as vital a role in communication as other mass 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 fact that the "top officers of the union were dismissed during the conciliation process," obviously do not suffice to make the dispute in the case at bar one "adversely affecting the national interest." 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. SO ORDERED. MERALCO V. QUISUMBING, 302 SCRA 173 (1999) 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 arrangement. MEWA filed notice to strike, several conciliation proceedings were undertaken but the parties still were unable to agree. MERALCO petitioned SOLE to assume jurisdiction, which it did. Both parties were requested to submit their respective memoranda and the SOLE issued an order awarding some of the proposals of the Union and MERALCO. Decision more or less merely discusses the decision on the terms of the CBA contested. (at tinamad magdigest haba eh! Di ko alam which one would be relevant) *since ang topic eh LMCs, eto feeling ko relevant (ON PARTICIPATION OF UNION MEMBERS IN THE COMMITTEES): 8|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

"To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare. Denying this opportunity to the Union is to lay the claim that only management has the monopoly of ideas that may improve management strategies in enhancing the Company's growth. What every company should remember is that there might be one among the Union members who may offer productive and viable ideas on expanding the Company's business horizons. The Union's participation in such committees might just be the opportune time for dormant ideas to come forward. So, the Company must welcome this development (see also PAL v. NLRC, et. al., G.R. 85985, August 13, 1995). It must be understood, however, that the committees referred to here are the Safety Committee, the Uniform Committee and other committees of a similar nature and purpose involving personnel welfare, rights and benefits as well as duties." We do not find merit in MERALCO's contention that the above-quoted ruling of the Secretary is an intrusion into the management prerogatives of MERALCO. It is worthwhile to note that all the Union demands and what the Secretary's order granted is that the Union be allowed to participate in policy formulation and decision-making process on matters affecting the Union members' rights, duties and welfare as required in Article 211 (A) (g) of the Labor Code. And this can only be done when the Union is allowed to have representatives in the Safety Committee, Uniform Committee and other committees of a similar nature. Certainly, such participation by the Union in the said committees is not in the nature of a comanagement control of the business of MERALCO. What is granted by the Secretary is participation and representation. Thus, there is no impairment of management prerogatives. *** MARTINEZ, J.: 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, 1996, wherein the Secretary required MERALCO and its rank and file union the Meralco Workers Association (MEWA) to execute a collective bargaining agreement (CBA) for the remainder of the parties' 1992-1997 CBA cycle, and to incorporate in this new CBA the Secretary's dispositions on the disputed economic and non-economic issues. MEWA is the duly recognized labor organization of the rank-and-file employees of MERALCO. On September 7, 1995, MEWA informed MERALCO of its intention to re-negotiate the terms and conditions of their existing 1992-1997 Collective Bargaining Agreement (CBA) covering the remaining period of two years starting from December 1, 1995 to November 30, 1997. 1 MERALCO signified its willingness to renegotiate through its letter dated October 17, 1995 2 and formed a CBA negotiating panel for the purpose. On November 10, 1995, MEWA submitted its proposal 3 to MERALCO, which, in turn, presented a counter-proposal. Thereafter, collective
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bargaining negotiations proceeded. However, despite the series of meetings between the negotiating panels of MERALCO and MEWA, the parties failed to arrive at "terms and conditions acceptable to both of them." On April 23, 1996, MEWA filed a Notice of Strike with the National Capital Region Branch of the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment (DOLE) which was docketed as NCMB-NCRNS-04-152-96, on the grounds of bargaining deadlock and unfair labor practices. The NCMB then conducted a series of conciliation meetings but the parties failed to reach an amicable settlement. Faced with the imminence of a strike, MERALCO on May 2, 1996, filed an Urgent Petition 4 with the Department of Labor and Employment which was docketed as OS-AJ No. 0503[1]96 praying that the Secretary assume jurisdiction over the labor dispute and to enjoin the striking employees to go back to work. The Labor Secretary granted the petition through its Order 5 of May 8, 1996, the dispositive portion of which reads: WHEREFORE, premises considered, this Office now assumes jurisdiction over the labor dispute obtaining between the parties pursuant to Article 263(g) of the Labor Code. Accordingly, the parties are here enjoined from committing any act that may exacerbate the situation. To speed up the resolution of the dispute, the parties are also directed to submit their respective Position Papers within ten (10) days from receipt. Undersecretary Jose M. Espanol, Jr. is deputized to conduct conciliation conferences between the parties to bridge their differences and eventually hammer out a solution that is mutually acceptable. He shall be assisted by the Legal Service. SO ORDERED. Thereafter, the parties submitted their respective memoranda and on August 19, 1996, the Secretary resolved the labor dispute through an Order, 6 containing the following awards: ECONOMIC DEMANDS Wage increase P2,300.00 for the first year covering the period from December 1, 1995 to November 30, 1996 P2,200.00 for the second year covering the period December 1, 1996 to November 30, 1997. Red Circle Rate (RCR) Allowance all RCR allowances (promotional increases that go beyond the maximum range of a job classification salary) shall be integrated into the basic salary of employees effective December 1, 1995. Longevity Allowance the integration of the longevity allowance into the basic wage is denied; the present policy is maintained. Longevity Increase the present longevity bonus is maintained but the bonus shall be incorporated into the new CBA. 9|L a b o r Ar b i t r a t i o n Ca se D i g e st s_ Ch a M e n d o z a

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 during a particular year shall be entitled to a one-day sick leave incentive. Sick leave reserve the present reserve of 25 days shall be reduced to 15 days; the employee has the option either to convert the excess of 10 days to cash or let it remain as long as he wants. In case he opts to let it remain, he may later on convert it into cash at his retirement or separation. Vacation Leave MEWA's demand for upgrading denied & the company's present policy is maintained which must be incorporated into the new CBA but scheduled vacation leave may be rounded off to one full day at a time in case of a benefit involving a fraction of a day; 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. Maternity, Paternity and Funeral leaves the existing policy is to be maintained and must be incorporated in the new CBA unless a new law granting paternity leave benefit is enacted which is superior to what the company has already granted. Birthday Leave union's demand is granted. If birthday falls on the employee's rest day or on a non-working holiday, the worker shall be entitled to go on leave with pay on the next working day. Group Hospitalization & Surgical Insurance Plan (GHSIP) and Health Maintenance Plan (HMP) present policy is maintained insofar as the cost sharing is concerned 70% for the Company and 30% for MEWA. Health Maintenance Plan (HMP) for dependents subsidized dependents increased from three to five dependents. 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. Christmas Bonus and Special Christmas Grant MEWA's demand of one month salary as Christmas Bonus two month's salary as Special Christmas Grant is granted and to be incorporated in the new CBA. Midyear Bonus one month's pay to be included in the CBA. Anniversary Bonus union's demand is denied. Christmas Gift Certificate company has the discretion as to whether it will give it to its employees. Retirement Benefits: a. Full retirement-present policy is maintained; b. one cavan of rice per month is granted to retirees; c. special retirement leave and allowance-present policy is maintained; d. HMP coverage for retirees HMP coverage is granted to retirees who have not reached the age of 70, with MERALCO subsidizing 100% of the monthly premium; those over 70 are entitled to not more than 30 days of hospitalization at the J.F. Cotton Hospital with the company shouldering the entire cost. e. HMP coverage for retiree's dependents is denied. f. Monthly pension of P3,000.00 for each retiree is denied.
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g. Death benefit for retiree's beneficiaries is denied. Optional retirement union's demand is denied; present policy is maintained; employee is eligible for optional retirement if he has rendered at least 18 years of service. Dental, Medical and Hospitalization Benefits grant of all the allowable medical, surgical, dental and annual physical examination benefits, including free medicine whenever the same is not available at the JFCH. Resignation benefits union's demand is denied. Night work union demand is denied but present policy must be incorporated in CBA. Shortswing work in another shift within the same day shall be considered as the employee's work for the following day and the employee shall be given additional four (4) hours straight time and the applicable excess time premium if he works beyond 8 hours in the other shift. High Voltage allowance is increased from P45.00 to P55.00 to be given to any employee authorized by the Safety Division to perform work on or near energized bare lines & bus including stockman drivers & crane operators and other crew members on ground. High Pole Allowance is increased from P30.00 to P40.00 to be given to those authorized to climb poles up to at least 60 ft. from the ground. Members of the team including stockman drivers, crane operators and other crew members on the ground, are entitled to this benefit. Towing Allowance where stockmen drive tow trailers with long poles and equipment on board, they shall be entitled to a towing allowance of P20.00 whether they perform the job on regular shift or on overtime. Employee's Cooperative a loan of P3 M seed money is granted to the proposed establishment of a cooperative, payable in twenty (20) years starting one year from the start of operations. Holdup Allowance the union demand is denied; the present policy shall be maintained. Meal and Lodging Allowance shall be increased effective December 1, 1995 as follows: Breakfast from P25.00 to P35.00 Lunch from P35.00 to P45.00 Dinner from P35.00 to P45.00 Lodging from P135.00 to P180.00 a night in all MERALCO franchise areas. Payroll Treatment for Accident while on Duty an employee shall be paid his salary and allowance if any is due plus average excess time for the past 12 months from the time of the accident up to the time of full recovery and placing of the employee back to normal duty or an allowance of P2,000.00, whichever is higher. Housing and Equity Assistance Loan is increased to P60,000.00; those who have already availed of the privilege shall be allowed to get the difference. Benefits for Collectors: 10 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

a. Company shall reduce proportionately the quota and monthly average product level (MAPL) in terms of equivalent bill assignment when an employee is on sick leave and paid vacation leave. b. When required to work on Saturdays, Sundays and holidays, an employee shall receive P60.00 lunch allowance and applicable transportation allowance as determined by the Company and shall also receive an additional compensation to one day fixed portion in addition to lunch and transportation allowance. c. The collector shall be entitled to an incentive pay of P25.00 for every delinquent account disconnected. d. When a collector voluntarily performs other work on regular shift or overtime, he shall be entitled to remuneration based on his computed hourly compensation and the reimbursement of actually incurred transportation expenses. e. Collectors shall be provided with bobcat belt bags every year. f. Collector's cash bond shall be deposited under his capital contribution to MESALA. g. Collectors quota and MAPL shall be proportionately reduced during typhoons, floods, earthquakes and other similar force majeure events when it is impossible for a collector to perform collection work. Political Demands: a. Scope of the collective bargaining unit the collective bargaining unit shall be composed of all regular rank-and-file employees hired by the company in all its offices and operative centers throughout its franchise area and those it may employ by reason of expansion, reorganization or as a result of operational exigencies. b. Union recognition and security i. The union shall be recognized by the Company as sole and exclusive bargaining representative of the rank-and-file employees included in the bargaining unit. The Company shall agree to meet only with Union officers and its authorized representatives on all matters involving the Union and all issues arising from the implementation and interpretation of the new CBA. ii. The union shall meet with the newly regularized employees for a period not to exceed four (4) hours, on company time, to acquaint the new regular employees of the rights, duties and benefits of Union membership. iii. The right of all rank-and-file employees to join the union shall be recognized in accordance with the maintenance of membership principle as a form of union security. c. Transfer of assignment and job security i. No transfer of an employee from one position to another shall be made if motivated by considerations of sex, race, creed, political and religious belief, seniority or union activity. ii. If the transfer is due to the reorganization or decentralization, the distance from the employee's residence shall be considered unless the transfer is accepted by the employee. If the transfer is extremely necessary, the transfer shall be made within the offices in the same district.
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iii. Personnel hired through agencies or contractors to perform the work done by covered employees shall not exceed one month. If extension is necessary the union shall be informed. But the Company shall not permanently contract out regular or permanent positions that are necessary in the normal operation of the Company. d. Check off Union Dues where the union increases its dues as approved by the Board of Directors, the Company shall check off such increase from the salaries of union members after the union submits check off authorizations signed by the majority of the members. The Company shall honor only those individual authorizations signed by the majority of the union members and collectively submitted by the union to the Company's Salary Administration. e. Payroll Reinstatement shall be in accordance with Article 223, p. 3 of the Labor Code. f. Union Representation in Committees the union is allowed to participate in policy formulation and in the decision-making process on matters affecting their rights and welfare, particularly in the Uniform Committee, the Safety Committee and other committees that may be formed in the future. Signing Bonus P4,000.00 per member of the bargaining unit for the conclusion of the CBA. Existing benefits already granted by the Company but which are not expressly or impliedly repealed in the new agreement shall remain subsisting and shall be included in the new agreement to be signed by the parties effective December 1, 1995. On August 30, 1996, MERALCO filed a motion for reconsideration 7 alleging that the Secretary of Labor committed grave abuse of discretion amounting to lack or excess of jurisdiction: 1. in awarding to MEWA a package that would cost at least P1.142 billion, a package that is grossly excessive and exorbitant, would not be affordable to MERALCO and would imperil its viability as a public utility affected with national interest. 2. in ordering the grant of a P4,500.00 wage increase, as well as a new and improved fringe benefits, under the remaining two (2) years of the CBA for therank-and-file employees. 3. in ordering the "incorporation into the CBA of all existing employee benefits, on the one hand, and those that MERALCO has unilaterally granted to its employees by virtue of voluntary company policy or practice, on the other hand." 4. in granting certain "political demands" presented by the union. 5. in ordering the CBA to be "effective December 1995" instead of August 19, 1996 when he resolved the dispute. MERALCO filed a supplement to the motion for reconsideration on September 18, 1995, alleging that the Secretary of Labor did not properly appreciate the effect of the awarded wages and benefits on MERALCO's financial viability. 11 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

MEWA likewise filed a motion asking the Secretary of Labor to reconsider its Order on the wage increase, leaves, decentralized filing of paternity and maternity leaves, bonuses, retirement benefits, optional retirement, medical, dental and hospitalization benefits, short swing and payroll treatment. On its political demands, MEWA asked the Secretary to rule on its proposal to institute a Code of Discipline for its members and the union's representation in the administration of the Pension Fund. On December 28, 1996, the Secretary issued an Order 8 resolving the parties' separate motions, the modifications of the August 19, 1996 Order being highlighted hereunder: 1) Effectivity of Agreement December 1, 1995 to November 30, 1997. Economic Demands 2) Wage Increase: First year P2,200.00 per month; Second year P2,200.00 per month. 3) Integration of Red Circle Rate (RCR) and Longevity Allowance into Basic Salary the RCR allowance shall be integrated into the basic salary of employees as of August 19, 1996 (the date of the disputed Order). 4) Longevity Bonus P170 per year of service starting from 10 years of continuous service. 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 in the manner that this has been provided in the supervisory CBA. 6) Sick Leave Reserve is reduced to 15 days, with any excess payable at the end of the year. The employee has the option to avail of this cash conversion or to accumulate his sick leave credits up to 25 days for conversion to cash at retirement or separation from the service. 7) Birthday Leave the grant of a day off when an employee's birthday falls on a non-working day is deleted. 8) Retirement Benefits for Retirees The benefits granted shall be effective on August 19, 1996, the date of the disputed order up to November 30, 1997, which is the date the CBA expires and shall apply to those who are members of the bargaining unit at the time the award is made. One sack of rice per quarter of the year shall be given to those retiring between August 19, 1996 and November 30, 1997. On HMP Coverage for Retirees The parties "maintain the status quo, that is, with the Company complying with the present arrangement and the obligations to retirees as is." 9) Medical, Dental and Hospitalization Benefits The cost of medicine unavailable at the J.F. Cotton Hospital shall be in accordance with MERALCO's Memorandum dated September 14, 1976.
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10) GHSIP and HMP for Dependents The number of dependents to be subsidized shall be reduced from 5 to 4 provided that their premiums are proportionately increased. 11) Employees' Cooperative The original award of P3 million pesos as seed money for the proposed Cooperative is reduced to P1.5 million pesos. 12) Shortswing the original award is deleted. 13) Payroll Treatment for Accident on Duty Company ordered to continue its present practice on payroll treatment for accident on duty without need to pay the excess time the Union demanded. Political Demands: 14) Scope of the collective bargaining unit The bargaining unit shall be composed of all rank and file employees hired by the Company in accordance with the original Order. 15) Union recognition and security The incorporation of a closed shop form of union security in the CBA; the Company is prohibited from entertaining individuals or groups of individuals only on matters that are exclusively within the domain of the union; the Company shall furnish the Union with a complete list of newly regularized employees within a week from regularization so that the Union can meet these employees on the Union's and the employee's own time. 16) Transfer of assignment and job security Transfer is a prerogative of the Company but the transfer must be for a valid business reason, made in good faith and must be reasonably exercised. The CBA shall provide that "No transfer of an employee from one position to another, without the employee's written consent, shall be made if motivated by considerations of sea, race, creed, political and religious belief, age or union activity. 17) Contracting Out The Company has the prerogative to contract out services provided that this move is based on valid business reasons in accordance with law, is made in good faith, is reasonably exercised and, provided further that if the contracting out involves more than six months, the Union must be consulted before its implementation. 18) Check off of union dues In any increase of union dues or contributions for mandatory activities, the union must submit to the Company a copy of its board resolution increasing the union dues or authorizing such contributions; If a board resolution is submitted, the Company shall deduct union dues from all union members after a majority of the union members have submitted their individual written authorizations. Only those check-off authorization submitted by the union shall be honored by the Company. With respect to special assessments, attorney's fees, negotiation fees or any other extraordinary fees individual authorization shall be necessary before the company may so deduct the same. 19) Union Representation in Committees The union is granted representation in the Safety Committee, the Uniform Committee and other committees of a similar 12 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

nature and purpose involving personnel welfare, rights and benefits as well as duties. Dissatisfied, petitioner filed this petition contending that the Secretary of Labor gravely abused his discretion: 1) . . . in awarding wage increases of P2,200.00 for 1996 and P2,200 for 1997. 2) . . . in awarding the following economic benefits: a. Two months Christmas bonus; b. Rice Subsidy and retirement benefits for retirees; c. Loan for the employees' cooperative; d. Social benefits such as GHSIP and HMP for dependents, employees' cooperative and housing equity assistance loan; e. Signing bonus; f. Integration of the Red Circle Rate Allowance. g. Sick leave reserve of 15 days h. The 40-day union leave; i. High pole/high voltage and towing allowance; and j. Benefits for collectors 3) . . . in expanding the scope of the bargaining unit to all regular rank and file employees hired by the company in all its offices and operating centers and those it may employ by reason of expansion, reorganization or as a result of operational exigencies; 4) . . . in ordering for a closed shop when his original order for a maintenance of membership arrangement was not questioned by the parties; 5) . . . in ordering that Meralco should consult the union before any contracting out for more than six months; 6) . . . in decreeing that the union be allowed to have representation in policy and decision making into matters affecting "personnel welfare, rights and benefits as well as duties;" 7) . . . in ruling for the inclusion of all terms and conditions of employment in the collective bargaining agreement; 8) . . . in exercising discretion in determining the retroactivity of the CBA; Both MEWA and the Solicitor General, on behalf of the Secretary of Labor, filed 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 comment of the opposing parties. The parties were instead required to submit written memoranda, which they did. Subsequently, both petitioner and private respondent MEWA also filed replies to the opposing parties' Memoranda, all of which We took into account in the resolution of this case. The union disputes the allegation of MERALCO that the Secretary abused his discretion in issuing the assailed orders arguing that he acted within the scope of
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the powers granted him by law and by the Constitution. The union contends that any judicial review is limited to an examination of the Secretary's decisionmaking/discretion exercising process to determine if this process was attended by some capricious or whimsical act that constitutes "grave abuse"; in the absence of such abuse, his findings considering that he has both jurisdiction and expertise to make them are valid. The union's position is anchored on two premises: First, no reviewable abuse of discretion could have attended the Secretary's arbitral award because the Secretary complied with constitutional norms in rendering the disputed award. The union posits that the yardstick for comparison and for the determination of the validity of the Secretary's actions should be the specific standards laid down by the Constitution itself. To the union, these standards include the State policy on the promotion of workers' welfare, 9 the principle of distributive justice, 10 the right of the State to regulate the use of property, 11the obligation of the State to protect workers, both organized and unorganized, and insure their enjoyment of "humane conditions of work" and a "living wage," and the right of labor to a just share in the fruits of production. 12 Second, no reversible abuse of discretion attended the Secretary's decision because the Secretary took all the relevant evidence into account, judiciously weighed them, and rendered a decision based on the facts and law. Also, the arbitral award should not be reversed given the Secretary's expertise in his field and the general rule that findings of fact based on such expertise is generally binding on this Court. To put matters in proper perspective, we go back to basic principles. The Secretary of Labor's statutory power under Art. 263 (g) of the Labor Code to assume jurisdiction over a labor dispute in an industry indispensable to the national 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 Constitution mandates. This constitutional provision states: Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. Under this constitutional mandate, every legal power of the Secretary of Labor under the Labor Code, or, for that matter, any act of the Executive, that is attended by grave abuse of discretion is subject to review by this Court in an appropriate proceeding. To be sure, the existence of an executive power alone whether granted by statute or by the Constitution cannot exempt the executive action from judicial oversight, interference or reversal when grave abuse of discretion is, or is alleged to be, present. This is particularly true when constitutional norms are 13 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

cited as the applicable yardsticks since this Court is the final interpreter of the meaning and intent of the Constitution. 13 The extent of judicial review over the Secretary of Labor's arbitral award is not limited to a determination of grave abuse in the manner of the secretary's exercise 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 of discretion is alleged to exist in the award, i.e., in the appreciation of and the conclusions the Secretary drew from the evidence presented. The natural and ever present limitation on the Secretary's acts is, of course, the Constitution. And we recognize that indeed the constitutional provisions the union cited are State policies on labor and social justice that can serve as standards in assessing the validity of a Secretary of Labor's actions. However, we note that these provisions do not provide clear, precise and objective standards of conduct that lend themselves to easy application. We likewise recognize that the Constitution is not a lopsided document that only recognizes the interests of the working man; it too protects the interests of the property owner and employer as well. 14 For these reasons and more importantly because a ruling on the breadth and scope of the suggested constitutional yardsticks is not absolutely necessary in the disposition of this case we shall not use these yardsticks in accordance with the time-honored practice of avoiding constitutional interpretations when a decision can be reached using non-constitutional standards. We have repeatedly held that one of the essential requisites for a successful judicial inquiry into constitutional questions is that the resolution of the constitutional question must be necessary in deciding the case. 15 In this case we believe that the more appropriate and available standard and one does not require a constitutional interpretation is simply the standard of reasonableness. In layman's terms, reasonableness implies the absence of arbitrariness; 16 in legal parlance, this translates into the exercise of proper discretion and to the observance of due process. Thus, the question we have to answer in deciding this case is whether the Secretary's actions have been reasonable in light of the parties positions and the evidence they presented. MEWA's second premise i.e., that the Secretary duly considered the evidence presented is the main issue that we shall discuss at length below. Additionally, MEWA implied that we should take great care before reading an abuse of discretion on the part of the Secretary because of his expertise on labor issues and because his findings of fact deserve the highest respect from this Court. This Court has recognized the Secretary of Labor's distinct expertise in the study and settlement of labor disputes falling under his power of compulsory
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arbitration. 17 It is also well-settled that factual findings of labor administrative officials, if supported by substantial evidence, are entitled not only to great respect but even to finality. 18 We, therefore, have no difficulty in accepting the union's caveat on how to handle a Secretary of Labor's arbitral award. 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 case are usually based on position papers and their supporting documents (as they 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 faceto-face 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 or officer exercising judicial function fails to consider evidence adduced by the present.20 Given the parties' positions on the justiciability of the issues before us, the question we have to answer is one that goes into the substance of the Secretary's disputed orders: Did the Secretary properly consider and appreciate the evidence presented before him? We find, based on our consideration of the parties' positions and the evidence on record, that the Secretary of Labor disregarded and misappreciated evidence, particularly with respect to the wage award. The Secretary of Labor apparently also acted arbitrarily and even whimsically in considering a number of legal points; 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 inclusion of confidential employees in the rank and file bargaining unit, and (c) in mandating a union security "closed-shop" regime in the bargaining unit. We begin with a discussion on the wages issue. The focal point in the consideration 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 (2nd Year) 1997 award. MERALCO projected that the net operating income for 1996 was 14.7% above the 1999 level or a total net operating income of 4.171 Billion, while the union placed the 1996 net operating income at 5.795 Billion. MERALCO based its projection on the increase of the income for the first 6 months of 1996 over the same period in 1995. The union, on the other hand, projected that the 1996 income would increase by 29% to 35% because the "consumption of electric power is at its highest during the last two quarters with the advent of the 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 amount to 5.795 Billion. 21

Based essentially on these considerations, the Secretary made the following computations and ordered his disputed wage award: Projected net operating income for 1996 Principals and interests Dividends at 1995 rate Net Amount left with the Company Add: Tax credit equivalent to 35% of labor cost Company's net operating income 5,795,000,000 1,426,571,703 1,636,949,000 2,729,479,297 231,804,940 2,961,284,237

For 1997, the projected income is P7,613,612 which can easily absorb the incremental increase of P2,200 per month or a total of P4,500 during the last year of the CBA period. xxx xxx xxx An overriding aim is to estimate the amount that is left with the Company after the awarded wages and benefits and the company's customary obligations are paid. This amount can be the source of an item not found in the above computations but which the Company must provide for, that is the amount the company can use for expansion. Considering the expansion plans stated in the Company's Supplement that calls for capital expenditures of 6 billion, 6.263 billion and 5.802 billion for 1996, 1997 and 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 income that can be used for expansion." 22 (Emphasis ours.) We find after considering the records that the Secretary gravely abused his discretion in making this wage award because he disregarded evidence on record. Where he considered MERALCO's evidence at all, he apparently misappreciated 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 actual and undisputed figures for the first six months of 1996. 23 On the other hand, the union projection was based on a speculation of Yuletide consumption that the union failed to substantiate. In fact, as against the union's unsubstantiated Yuletide consumption claim, MERALCO adduced evidence in the form of historical consumption data showing that a lengthy consumption does not tend to rise during the Christmas period. 24 Additionally, the All-Asia Capital Report was nothing more 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
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10-year income stream, 25 no data or computation of this 10-year stream appear in the record. While the Secretary is not expected to accept the company-offered figures wholesale in determining a wage award, we find it a grave abuse of discretion to completely disregard data that is based on actual and undisputed record of financial performance in favor of the third-hand and unfounded claims the Secretary eventually relied upon. At the very least, the Secretary should have properly justified his disregard of the company figures. The Secretary should have also reasonably insured that the figure that served as the starting point for his computation had some substantial basis. Both parties extensely discussed the factors that the decision maker should consider in making a wage award. While We do not seek to enumerate in this decision the factors that should affect wage determination, we must emphasize 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 who might be affected by the dispute. To our mind, the best way in approaching this task holistically is to consider the available objective facts, including, where 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, and industry trends in general. As a rule, affordability or capacity to pay should be 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, the decision maker must always take into account the "public interest" aspects of 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 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. 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 dispute. Merely finding the midway point between the demands of the company 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 afford. It may lead to the danger too that neither of the parties will engage in principled bargaining; the company may keep its position artificially low while the union presents an artificially high position, on the fear that a "Solomonic" solution cannot be avoided. Thus, rather than encourage agreement, a "middle ground approach" instead promotes a "play safe" attitude that leads to more deadlocks than to successfully negotiated CBAs.

After considering the various factors the parties cited, we believe that the interests of both labor and management are best served by a wage increase of P1,900.00 per 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 protects the interest of the worker as they are roughly 15% of the monthly average salary of P11,600.00. 26 They likewise sufficiently consider the employer's costs and its overall wage structure, while at the same time, being within the range that will not disrupt the wage trends in Philippine industries. The record shows that MERALCO, throughout its long years of existence, was never remiss in its obligation towards its employees. In fact, as a manifestation of its strong commitment to the promotion of the welfare and well-being of its employees, it has consistently improved their compensation package. For instance, MERALCO has granted salary increases 27 through the collective bargaining agreement the amount of which since 1980 for both rank-and-file and supervisory employees were as follows: AMOUNT OF CBA INCREASES CBA COVERAGE 1980 1981 1982 TOTAL 1983 1984 1985 TOTAL 1986 1987 1988 RANKAND-FILE 230 210 200 640 320 350 370 1,040.00 860 640 600 SUPERVISORY 342.5 322.5 312.5 977.5 432.5 462.5 482.5 1,377.50 972.5 752.5 712.5 DIFFERENCE

AMOUNT PERCENT 112.5 112.5 112.5 337.5 112.5 112.5 112.5 337.5 112.5 112.5 112.5 48.91% 53.57 56.25 52.73 35.16 32.14 30.41 32.45 13.08 17.58 18.75

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TOTAL 1989 1990 1991 TOTAL 1992 1993 1994 TOTAL

2,100.00 1,100.00 1,200.00 1,300.00 3,600.00 1,400.00 1,350.00 1,150.00 3,900.00

2,437.50 1,212.50 1,312.50 1,412.50 3,937.50 1,742.50 1,682.50 1,442.50 4,867.50

337.5 112.5 112.5 112.5 337.5 342.5 332.5 292.5 967.5

16.07 10.23 9.38 8.65 9.38 24.46 24.63 25.43 24.81

What comes out from all these is that while the Company has consistently give 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 given at or about Christmas time. xxx xxx xxx The Company is not therefore correct in its position that there is no established 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 of giving this bonus in the spirit of Christmas has ripened into a Company practice. 28 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 "established practice" attributed to MERALCO was neither for a considerable period of time nor identical in either amount or purpose. The purpose and title of the grants were never the same except for the Christmas bonuses of 1988 and 1989, and were not in the same amounts. We do not agree. As a rule, a bonus is not a demandable and enforceable obligation; 29 it may nevertheless be granted on equitable considerations 30 as when the giving of such bonus has been the company's long and regular practice.31 To be considered a "regular practice," the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. 32 Thus we have ruled in National Sugar Refineries Corporation vs. NLRC: 33 The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not covered by the law requiring payment thereof. In the case at bar, the record shows that MERALCO, aside from complying with the 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 differed in amount and bore different titles, it can not be denied that these were given voluntarily and continuously on or about Christmas time. The considerable length of time MERALCO has been giving the special grants to its employees indicates a unilateral and voluntary act on its part, to continue giving said benefits knowing that such act was not required by law. Indeed, a company practice favorable to the employees has been established and the payments made by MERALCO pursuant thereto ripened into benefits enjoyed
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Based on the above-quoted table, specifically under the column "RANK-AND-FILE," it is easily discernible that the total wage increase of P3,800.00 for 1996 to 1997 which we are granting in the instant case is significantly higher than the total increases given in 1992 to 1994, or a span of three (3) years, which is only 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 now go to the economic issues. 1. CHRISTMAS BONUS MERALCO questions the Secretary's award of "Christmas bonuses" on the ground that what it had given its employees were special bonuses to mark or celebrate "special occasions," such as when the Asia Money Magazine recognized MERALCO as the "best managed company in Asia." These grants were given on or about Christmas time, and the timing of the grant apparently led the Secretary to the conclusion that what were given were Christmas bonuses given by way of a "company practice" on top of the legally required 13th month pay. The Secretary in granting the two-month bonus, considered the following factual finding, to wit: 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. 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 1990, what was given was a "cash gift" of 1/2 month's salary. The grants thereafter bore different titles and were for varying amounts. Significantly, the Company explained the reason for the 1995 bonuses and this explanation was not substantially contradicted by the Union. 16 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

by the employees. Consequently, the giving of the special bonus can no longer be withdrawn by the company as this would amount to a diminution of the employee's existing benefits. 34 We can not, however, affirm the Secretary's award of a two-month special Christmas bonus to the employees since there was no recognized company practice of giving a two-month special grant. The two-month special bonus was given only in 1995 in recognition of the employees prompt and efficient response during the calamities. Instead, a one-month special bonus, We believe, is sufficient, this being merely a generous act on the part of MERALCO. 2. RICE SUBSIDY and RETIREMENT BENEFITS for RETIREES It appears that the Secretary of Labor originally ordered the increase of the retirement pay, rice subsidy and medical benefits of MERALCO retirees. This ruling 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 from a compulsory arbitration award. The Secretary, however, ruled that all members of the bargaining unit who retire between August 19, 1996 and November 30, 1997 (i.e., the term of the disputed CBA under the Secretary's disputed orders) are entitled to receive an additional rice subsidy. The question squarely brought in this petition is whether the Secretary can issue an order that binds the retirement fund. The company alleges that a separate and independent trust fund is the source of retirement benefits for MERALCO retirees, while the union maintains that MERALCO controls these funds and may therefore be compelled to improve this benefit in an arbitral award. The issue requires a finding of fact on the legal personality of the retirement fund. In the absence of any evidence on record indicating the nature of the retirement fund's legal personality, we rule that the issue should be remanded to the Secretary 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 juridical entity which controls an irrevocable retirement trust fund means that these retirement funds are beyond the scope of collective bargaining: they are administered by an entity not a party to the collective bargaining and the funds may not be touched without the trustee's conformity. On the other hand, MERALCO control over these funds means that MERALCO may be compelled in the compulsory arbitration of a CBA deadlock where it is the employer, to improve retirement benefits since retirement is a term or condition of employment that is a mandatory subject of bargaining. 3. EMPLOYEES' COOPERATIVE 17 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

The Secretary's disputed ruling requires MERALCO to provide the employees covered by the bargaining unit with a loan of 1.5 Million as seed money for the employees formation of a cooperative under the Cooperative Law, R.A. 6938. We see nothing in this law whether expressed or implied that requires employers to provide funds, by loan or otherwise, that employees can use to form a cooperative. The formation of a cooperative is a purely voluntary act under this law, and no party in any context or relationship is required by law to set up a cooperative or to provide the funds therefor. In the absence of such legal requirement, the Secretary has no basis to order the grant of a 1.5 million loan to 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 the collective bargaining parties that this is a bargainable term or condition of employment, to be a term or condition of employment that can be imposed on the parties on compulsory arbitration. 4. GHSIP, HMP BENEFITS FOR DEPENDENTS and HOUSING EQUITY LOAN MERALCO contends that it is not bound to bargain on these benefits because these do not relate to "wages, hours of work and other terms and conditions of employment" hence, the denial of these demands cannot result in a bargaining impasse. The GHSIP, HMP benefits for dependents and the housing equity loan have been the subject of bargaining and arbitral awards in the past. We do not see any reason why MERALCO should not now bargain on these benefits. Thus, we agree with the Secretary's ruling: . . . Additionally and more importantly, GHSIP and HMP, aside from being contributory plans, have been the subject of previous rulings from this Office as bargainable matters. At this point, we cannot do any less and must recognize that GHSIP and HMP are matters where the union can demand and negotiate for improvements within the framework of the collective bargaining system. 35 Moreover, MERALCO have long been extending these benefits to the employees and their dependents that they now become part of the terms and conditions of employment. In fact, MERALCO even pledged to continue giving these benefits. Hence, these benefits should be incorporated in the new CBA. With regard to the increase of the housing equity grant, we find P60,000.00 reasonable considering the prevailing economic crisis. 5. SIGNING BONUS On the signing bonus issue, we agree with the positions commonly taken by MERALCO and by the Office of the Solicitor General that the signing bonus is a grant motivated by the goodwill generated when a CBA is successfully negotiated
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and signed between the employer and the union. In the present case, this 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 parties sought the assistance of the NCMB, but which failed to reconcile their differences, and when petitioner MERALCO bluntly invoked the jurisdiction of the Secretary of Labor in the resolution of the labor dispute, whatever goodwill existed between petitioner MERALCO and respondent union disappeared. . . . . 36 In contractual terms, a signing bonus is justified by and is the consideration paid for the goodwill that existed in the negotiations that culminated in the signing of a CBA. Without the goodwill, the payment of a signing bonus cannot be justified and any order for such payment, to our mind, constitutes grave abuse of discretion. This is more so where the signing bonus is in the not insignificant total amount of P16 Million. 6. RED-CIRCLE-RATE ALLOWANCE An RCR allowance is an amount, not included in the basic salary, that is granted by the company to an employee who is promoted to a higher position grade but whose actual basic salary at the time of the promotion already exceeds the maximum salary for the position to which he or she is promoted. As an allowance, it applies only to specific individuals whose salary levels are unique with respect to their new and higher positions. It is for these reasons that MERALCO prays that it be allowed to maintain the RCR allowance as a separate benefit and not be integrated in the basic salary. The integration of the RCR allowance in the basic salary of the employees had 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 not see any reason why it should not be included in the present CBA. In fact, in the 1995 CBA between MERALCO and the supervisory union (FLAMES), the integration of the RCR allowance was recognized. Thus, Sec. 4 of the CBA provides: All Red-Circle-date Allowance as of December 1, 1995 shall be integrated in the basic salary of the covered employees who as of such date are receiving such allowance. Thereafter, the company rules on RCR allowance shall continue to be observed/applied. 37 For purposes of uniformity, we affirm the Secretary's order on the integration of the RCR allowance in the basic salary of the employees. 7. SICK LEAVE RESERVE OF 15 DAYS MERALCO assails the Secretary's reduction of the sick leave reserve benefit from 25 days to 15 days, contending that the sick leave reserve of 15 days has reached the lowest safe level that should be maintained to give employees sufficient buffer in the event they fall ill. 18 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

We find no compelling reason to deviate from the Secretary's ruling that the sick leave reserve is reduced to 15 days, with any excess convertible to cash at the end of the year. The employee has the option to avail of this cash conversion or to accumulate his sick leave credits up to 25 days for conversion to cash at his 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 seriously affect MERALCO because whatever is in reserve are sick leave credits that are payable to the employee upon separation from service. In fact, it may be to MERALCO's financial interest to pay these leave credits now under present salary levels than pay them at future higher salary levels. 38 8. 40-DAY UNION LEAVE MERALCO objects to the demanded increase in union leave because the union leave granted to the union is already substantial. It argues that the union has not demonstrated any real need for additional union leave. The thirty (30) days union leave granted by the Secretary, to our mind, constitute sufficient time within which the union can carry out its union activities such as but not limited to the election of union officers, selection or election of appropriate bargaining agents, conduct referendum on union matters and other union-related matters in furtherance of union objectives. Furthermore, the union already enjoys a special union leave with pay for union authorized representatives to attend work education seminars, meetings, conventions and conferences where union representation is required or necessary, and Paid-Time-off for union officers, stewards and representatives for purpose of handling or processing grievances. 9. HIGH VOLTAGE/HIGH POLE/TOWING ALLOWANCE MERALCO argues that there is no justification for the increase of these allowances. The personnel concerned will not receive any additional risk during the life of the current CBA that would justify the increase demanded by the union. In the absence of such risk, then these personnel deserve only the same salary increase that all other members of the bargaining unit will get as a result of the disputed CBA. MERALCO likewise assails the grant of the high voltage/high pole allowance to 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 who are exposed to those risks. They are not granted to a team because some members of the team are not exposed to the given risks. The increase in the high-voltage allowance (from P45.00 to P55.00), high-pole allowance (from P30.00 to P40.00), and towing allowance is justified considering the heavy risk the employees concerned are exposed to. The high-voltage allowance is granted to an employee who is authorized by the company to actually perform work on or near energized bare lines and bus, while the high-pole allowance is given to those authorized to climb poles on a height of at least 60 feet
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from the ground to work thereat. The towing allowance, on the other hand, is 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 imperative to give them these additional allowances for taking additional risks. These increases are not even commensurate to the danger the employees concerned are subjected to. Besides, no increase has been given by the company since 1992. 39 We do not, however, subscribe to the Secretary's order granting these allowances to the members of the team who are not exposed to the given risks. The reason is obvious no risk, no pay. To award them the said allowances would be manifestly unfair for the company and even to those who are exposed to the risks, as well as to the other members of the bargaining unit who do not receive the said allowances. 10. BENEFITS FOR COLLECTORS MERALCO opposes the Secretary's grant of benefits for collectors on the ground that this is grossly unreasonable both in scope and on the premise it is founded. We have considered the arguments of the opposing parties regarding these benefits and find the Secretary's ruling on the (a) lunch allowance; (b) disconnection fee for delinquent accounts; (c) voluntary performance of other work at the instance of the Company; (d) bobcat belt bags; and (e) reduction of quota and MAPL during typhoons and other force majeure events, reasonable considering the risks taken by the company personnel involved, the nature of the employees' functions and responsibilities and the prevailing standard of living. We do not however subscribe to the Secretary's award on the following: (a) Reduction of quota and MAPL when the collector is on sick leave because the previous CBA has already provided for a reduction of this demand. There is no need to further reduce this. (b) Deposit of cash bond at MESALA because this is no longer necessary in view of the fact that collectors are no longer required to post a bond. WE SHALL NOW RESOLVE THE NON-ECONOMIC ISSUES. 1. SCOPE OF THE BARGAINING UNIT The Secretary's ruling on this issue states that: a. Scope of the collective bargaining unit. The union is demanding that the collective bargaining unit shall be composed of all regular rank and file employees hired by the company in all its offices and operating centers through its franchise and those it may employ by reason of expansion, reorganization or as a result of operational exigencies. The law is that only managerial employees are excluded from any collective bargaining unit and supervisors are now allowed to form their 19 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

own union (Art. 254 of the Labor Code as amended by R.A. 6715 ). We grant the union demand. Both MERALCO and the Office of the Solicitor General dispute this ruling because it disregards the rule. We have established on the exclusion of confidential employees from the rank and file bargaining unit. In Pier 8 Arrastre vs. Confesor and General Maritime and Stevedores Union, 40 we ruled that: Put another way, the confidential employee does not share in the same "community of interest" that might otherwise make him eligible to join his rank and file co-workers, precisely because of a conflict in those interests. Thus, in Metrolab Industries vs. Roldan-Confesor, 41 We ruled: . . . that the Secretary's order should exclude the confidential employees from the regular rank and file employees qualified to become members of the MEWA bargaining unit. From the foregoing disquisition, it is clear that employees holding a confidential position are prohibited from joining the union of the rank and file employees. 2. ISSUE OF UNION SECURITY The Secretary in his Order of August 19, 1996, 42 ruled that: b. Union recognition and security. The Union is proposing that it be recognized by the Company as sole and exclusive bargaining representative of the rank and file employees included in the bargaining unit for the purpose of collective bargaining regarding rates of pay, wages, hours of work and other terms and conditions of employment. For this reason, the Company shall agree to meet only with the Union officers and its authorized representatives on all matters involving the Union as an organization and all issues arising from the implementation and interpretation of the new CBA. Towards this end, the Company shall not entertain any individual or group of individuals on matters within the exclusive domain of the Union. Additionally, the Union is demanding that the right of all rank and file employees to join the Union shall be recognized by the Company. Accordingly, all rank and file employees shall join the Union. xxx xxx xxx These demands are fairly reasonable. We grant the same in accordance with the maintenance of membership principle as a form of union security. The Secretary reconsidered this portion of his original order when he said in his December 28, 1996 order that: . . . . When we decreed that all rank and file employees shall join the Union, we were actually decreeing the incorporation of a closed shop form of union security in the CBA between the parties. In Ferrer v. NLRC, 224 SCRA 410, the Supreme Court ruled that a CBA provision for a closed shop is a valid form of union security and is
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not a restriction on the right or freedom of association guaranteed by the Constitution, citing Lirag v. Blanco, 109 SCRA 87. MERALCO objected to this ruling on the grounds that: (a) it was never questioned by the parties; (b) there is no evidence presented that would justify the restriction on employee's union membership; and (c) the Secretary cannot rule on the union security demand because this is not a mandatory subject for collective bargaining agreement. We agree with MERALCO's contention. An examination of the records of the case shows that the union did not ask for a closed shop security regime; the Secretary in the first instance expressly stated that a maintenance of membership clause should govern; neither MERALCO nor MEWA raised the issue of union security in their respective motions for reconsideration of the Secretary's first disputed order; and that despite the parties clear acceptance of the Secretary's first ruling, the Secretary motu proprio reconsidered his maintenance of membership ruling in favor of the more stringent union shop regime. Under these circumstances, it is indubitably clear that the Secretary gravely abused his discretion when he ordered a union shop in his order of December 28, 1996. The distinctions between a maintenance of membership regime from a closed shop and their consequences in the relationship between the union and the company are well established and need no further elaboration. Consequently, We rule that the maintenance of membership regime should govern at MERALCO in accordance with the Secretary's order of August 19, 1996 which neither party disputed. 3. THE CONTRACTING OUT ISSUE This issue is limited to the validity of the requirement that the union be consulted before the implementation of any contracting out that would last for 6 months or more. Proceeding from our ruling in San Miguel Employees Union-PTGWO vs. Bersamira, 43 (where we recognized that contracting out of work is a proprietary right of the employer in the exercise of an inherent management prerogative) the issue we see is whether the Secretary's consultation requirement is reasonable or unduly restrictive of the company's management prerogative. We note that the Secretary himself has considered that management should not be hampered in the operations of its business when he said that: We feel that the limitations imposed by the union advocates are too specific and may not be applicable to the situations that the company and the union may face in the future. To our mind, the greater risk with this type of limitation is that it will tend to curtail rather than allow the business growth that the company and the union must aspire for. Hence, we are for the general limitations we have stated above because they will allow a calibrated response to specific future situations the company and the union may face. 44 20 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

Additionally, We recognize that contracting out is not unlimited; rather, it is a prerogative that management enjoys subject to well-defined legal limitations. As we have previously held, the company can determine in its best business judgment whether it should contract out the performance of some of its work for as long as the employer is motivated by good faith, and the contracting out must not have been resorted to circumvent the law or must not have been the result of malicious or arbitrary action. 45 The Labor Code and its implementing rules also contain specific rules governing contracting out (Department or Labor Order No. 10, May 30, 1997, Sections 1-25). Given these realities, we recognize that a balance already exists in the parties' relationship with respect to contracting out; MERALCO has its legally defined and protected management prerogatives while workers are guaranteed their own protection through specific labor provisions and the recognition of limits to the exercise of management prerogatives. From these premises, we can only conclude that the Secretary's added requirement only introduces an imbalance in the parties' collective bargaining relationship on a matter that the law already sufficiently regulates. Hence, we rule that the Secretary's added requirement, being unreasonable, restrictive and potentially disruptive should be struck down. 4. UNION REPRESENTATION IN COMMITTEES As regards this issue, We quote with approval the holding of the Secretary in his Order of December 28, 1996, to wit: We see no convincing reason to modify our original Order on union representation in committees. It reiterates what the Article 211 (A)(g) of the Labor Code provides: "To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare. Denying this opportunity to the Union is to lay the claim that only management has the monopoly of ideas that may improve management strategies in enhancing the Company's growth. What every company should remember is that there might be one among the Union members who may offer productive and viable ideas on expanding the Company's business horizons. The Union's participation in such committees might just be the opportune time for dormant ideas to come forward. So, the Company must welcome this development (see also PAL v. NLRC, et. al., G.R. 85985, August 13, 1995). It must be understood, however, that the committees referred to here are the Safety Committee, the Uniform Committee and other committees of a similar nature and purpose involving personnel welfare, rights and benefits as well as duties." We do not find merit in MERALCO's contention that the above-quoted ruling of the Secretary is an intrusion into the management prerogatives of MERALCO. It is worthwhile to note that all the Union demands and what the Secretary's order granted is that the Union be allowed to participate in policy formulation and
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decision-making process on matters affecting the Union members' rights, duties and welfare as required in Article 211 (A) (g) of the Labor Code. And this can only be done when the Union is allowed to have representatives in the Safety Committee, Uniform Committee and other committees of a similar nature. Certainly, such participation by the Union in the said committees is not in the nature of a comanagement control of the business of MERALCO. What is granted by the Secretary is participation and representation. Thus, there is no impairment of management prerogatives. 5. INCLUSION OF ALL TERMS AND CONDITIONS IN THE CBA MERALCO also decries the Secretary's ruling in both the assailed Orders that All other benefits being enjoyed by the Company's employees but which are not expressly or impliedly repealed in this new agreement shall remain subsisting and shall likewise be included in the new collective bargaining agreement to be signed by the parties effective December 1, 1995. 46 claiming that the above-quoted ruling intruded into the employer's freedom to contract by ordering the inclusion in the new CBA all other benefits presently enjoyed by the employees even if they are not incorporated in the new CBA. This matter of inclusion, MERALCO argues, was never discussed and agreed upon in the negotiations; nor presented as issues before the Secretary; nor were part of the previous CBA's between the parties. We agree with MERALCO. The Secretary acted in excess of the discretion allowed him by law when he ordered the inclusion of benefits, terms and conditions that the law and the parties did not intend to be reflected in their CBA. To avoid the possible problems that the disputed orders may bring, we are constrained to rule that only the terms and conditions already existing in the current CBA and was granted by the Secretary (subject to the modifications decreed in this decision) should be incorporated in the CBA, and that the Secretary's disputed orders should accordingly be modified. 6. RETROACTIVITY OF THE CBA Finally, MERALCO also assails the Secretary's order that the effectivity of the new CBA shall retroact to December 1, 1995, the date of the commencement of the last two years of the effectivity of the existing CBA. This retroactive date, MERALCO argues, is contrary to the ruling of this Court in Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan-Confessor 47 which mandates that the effective date of the new CBA should be the date the Secretary of Labor has resolved the labor dispute. On the other hand, MEWA supports the ruling of the Secretary on the theory that he has plenary power and discretion to fix the date of effectivity of his arbitral award citing our ruling in St. Lakes Medical Center, Inc. vs. 21 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

Torres. 48 MEWA also contends that if the arbitral award takes effect on the date of the Secretary Labor's ruling on the parties' motion for reconsideration (i.e., on December 28, 1996), an anomaly situation will result when CBA would be more than the 5-year term mandated by Article 253-A of the Labor Code. However, neither party took into account the factors necessary for a proper resolution of this aspect. Pier 8, for instance, does not involve a mid-term negotiation similar to this case, while St. Lukes does not take the "hold over" 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 Art. 253-A serves as the guide in determining when the effectivity of the CBA at bar is to take effect. It provides that the representation aspect of the CBA is to be for a term of 5 years, while . . . [A]ll other provisions of the Collective Bargaining Agreement shall be renegotiated not later than 3 years after its execution. Any agreement on such other provision of the Collective Bargaining Agreement entered into within 6 months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement shall retroact to the day immediately following such date. If such agreement is entered into beyond 6 months, the parties shall agree on the duration of the effectivity thereof. . . . . Under these terms, it is clear that the 5-year term requirement is specific to the 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 gives rise to the present CBA deadlock. If no agreement is reached within 6 months from the expiry date of the 3 years that follow the CBA execution, the law expressly gives the parties not anybody else the discretion to fix the effectivity of the agreement. Significantly, the law does not specifically cover the situation where 6 months have elapsed but no agreement has been reached with respect to effectivity. In this eventuality, we hold that any provision of law should then apply for the law abhors a vacuum. 50 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 effect the terms and conditions of the existing agreement until a new agreement is reached. 51 In this manner, the law prevents the existence of a gap in the relationship between the collective bargaining parties. Another legal principle that should apply is that in the absence of an agreement between the parties, then, an arbitrated CBA takes on the nature of any judicial or quasi-judicial award; it operates and may be executed only respectively unless there are legal justifications for its retroactive application. Consequently, we find no sufficient legal ground on the other justification for the retroactive application of the disputed CBA, and therefore hold that the CBA
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should be effective for a term of 2 years counted from December 28, 1996 (the date of the Secretary of Labor's disputed order on the parties' motion for reconsideration) up to December 27, 1999. WHEREFORE, the petition is granted and the orders of public respondent Secretary of Labor dated August 19, 1996 and December 28, 1996 are set aside to the extent set forth above. The parties are directed to execute a Collective Bargaining Agreement incorporating the terms and conditions contained in the unaffected portion is of the Secretary of Labor's orders of August 19, 1996 and December 28, 1996, and the modifications set forth above. The retirement fund issue is remanded to the Secretary of Labor for reception of evidence and determination of the legal personality of the MERALCO retirement fund.1âwphi1.nêt SO ORDERED. Davide, Jr., C.J., Melo, Kapunan and Pardo, JJ., concur.

III. TYPES OF DISPUTE AND DIFFERENT MODES OF DISPUTE SETTLEMENT 3. WHAT IS A LABOR DISPUTE?

SMC EMPLOYEES UNION VS. BERSAMIRA, 186 SCRA 496 (1990) SUMMARY: RTC issued Writ of Preliminary Injunction, on the assumption that it had jurisdiction over the dispute between SMC and the Union, there being no EER. Court held that even if there is no EER, there can still be a labor dispute. FACTS: -Sometime 1983-1984, SMC entered contracts for merchandising services w/ LIPERCON & D RITE (Independent Contractors). Under the said contracts, it was understood that the EEs were employed by the contractors, paid by the contractors, and none were deemed to be SMC s EEs nor agents. -PTWGO is duly authorized representative of monthly paid rank-and-file SMC EEs. CBA excluded from bargaining unit "temporary, probationary, or contract employees and workers -some LIPERCON and D RITE workers signed up for PTWGO; PTWGO sought their regularization as they have been continuously working for San Mig from 6m-15 yrs, with work neither casual nor seasonal. -when no favorable response from SMC received, PTWGO filed NOTICE OF STRIKE FOR ULP, CBA violations, and union busting -2nd Notice of strike for ULP filed -conciliatory conferences held by NCMB 22 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-pending conciliatory conferences, LIPERCON and D RITE workers staged series of pickets in various SMC plants and offices. -SMC filed verified complaint for injunction and damages before RTC Pasig to enjoin Union from: a. representing and/or acting for and in behalf of the employees of LIPERCON and/or D'RITE for the purposes of collective bargaining; b. calling for and holding a strike vote, to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE; c. inciting, instigating and/or inducing the employees or workers of LIPERCON and D'RITE to demonstrate and/or picket at the plants and offices of plaintiff within the bargaining unit referred to in the CBA,...; d. staging a strike to compel plaintiff to hire the employees or workers of 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 at the plants and offices of plaintiff within the bargaining unit referred to in the CBA ...; f. intimidating, threatening with bodily harm and/or molesting the other 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; g. blocking, preventing, prohibiting, obstructing and/or impeding the free ingress to, and egress from, 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; h. preventing and/or disrupting the peaceful and normal operation of plaintiff at the work places within the bargaining unit referred to in the CBA, Annex 'C' hereof, to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE. -RTC issued TRO -Union filed MTD: opposed then denied by RTC -RTC (DECISION): granted the application, enjoined Union from committing acts complained of: The absence of employer-employee relationship negates the existence of labor dispute. Verily, this court has jurisdiction to take cognizance of plaintiff's grievance. The evidence so far presented indicates that plaintiff has contracts for services with Lipercon and D'Rite. The application and contract for employment of the defendants' witnesses are either with Lipercon or D'Rite. What could be discerned is that there is no employer-employee relationship between plaintiff and the contractual workers employed by Lipercon and D'Rite. This, however, does not mean that a final determination regarding
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the question of the existence of employer-employee relationship has already been made. To finally resolve this dispute, the court must extensively consider and delve into the manner of selection and engagement of the putative employee; the mode of payment of wages; the presence or absence of a power of dismissal; and the Presence or absence of a power to control the putative employee's conduct. This necessitates a full-blown trial. If the acts complained of are not restrained, plaintiff would, undoubtedly, suffer irreparable damages. Upon the other hand, a writ of injunction does not necessarily expose defendants to irreparable damages. -pending issuance of the order, some of the contractual workers of Lipercon and D Rite were laid off. -NCMB called the parties to conciliation: parties entered into a MOA: "without prejudice to the outcome of G.R. No. 87700 (this case) and Civil Case No. 57055 (the case below), the laid-off individuals ... shall be recalled effective 8 May 1989 to their former jobs or equivalent positions under the same terms and conditions prior to "lay-off" (Annex 15, SanMig Comment). In turn, the Union would immediately lift the pickets and return to work. ISSUE: WON RTC correctly assumed jurisdiction over the present controversy and properly issued the Writ of Preliminary Injunction to the resolution of that question, is the matter of whether, or not the case at bar involves, or is in connection with, or relates to a labor dispute. w/n jurisdiction (SMC) y No EER y EBR cannot strike to compel ER to hire and create an employment relations w/ contractual workers (who were expressly excluded in the CBA) y . A strike is a coercive economic weapon granted the bargaining representative only in the event of a deadlock in a labor dispute over 'wages, hours of work and all other and of the employment' of the employees in the unit. The union leaders cannot instigate a strike to compel the employer, especially on the eve of certification elections, to hire Outside Jurisdiction (UNION) y There s a labor dispute directly connected or interwoven w/ cases pending w/ NCMB-DOLE y Mass concerted action of picketing are w/n competence of labor tribunals

y

strangers or workers outside the unit, in the hope the latter will help re-elect them. Civil courts have jurisdiction because this kind of strike did not arise from a labor dispute.

HELD: NO -A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee." -While it is SanMig's submission that no employer-employee relationship exists between itself, on the one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor dispute can nevertheless exist "regardless of whether the disputants stand in the proximate relationship of employer and employee" (Article 212 [1], Labor Code, supra) provided the controversy concerns, among others, the terms and conditions of employment or a "change" or "arrangement" thereof (ibid). Put differently, and as defined by law, the existence of a labor dispute is not negative by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee. -That a labor dispute, as defined by the law, does exist herein is evident. At bottom, what the Union seeks is to regularize the status of the employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the working unit of SanMig. This matter definitely dwells on the working relationship between said employees vis-a-vis SanMig. Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved bringing the matter within the purview of a labor dispute. Further, the Union also seeks to represent those workers, who have signed up for Union membership, for the purpose of collective bargaining. SanMig, for its part, resists that Union demand on the ground that there is no employer-employee relationship between it and those workers and because 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 also involved. In fact, the injunction sought by SanMig was precisely also to prevent such representation. Again, the matter of representation falls within the scope of a labor dispute. Neither can it be denied that the controversy below is directly connected with the labor dispute already taken cognizance of by the NCMB-DOLE (NCMB-NCR- NS-01- 021-89; NCMB NCR NS-01-093-83). -As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to its amendment by R.A. No. 6715 on 21 March 1989, since the suit below was
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instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear and decide the following cases involving all workers including "1. unfair labor practice cases; 2. those that workers may file involving wages, hours of work 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 striker and lockouts. ..." Article 217 lays down the plain command of the law. -The claim of SanMig that the action below is for damages under Articles 19, 20 and 21 of the Civil Code would not suffice to keep the case within the jurisdictional boundaries of regular Courts. That claim for damages is interwoven with a labor dispute existing between the parties and would have to be ventilated before the administrative machinery established for the expeditious settlement of those disputes. To allow the action filed below to prosper would bring about "split jurisdiction" which is obnoxious to the orderly administration of justice (Philippine Communications, Electronics and Electricity Workers Federation vs. Hon. Nolasco, L24984, 29 July 1968, 24 SCRA 321). -We recognize the proprietary right of SanMig to exercise an inherent management prerogative and its best business judgment to determine whether it should contract out the performance of some of its work to independent contractors. However, the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law (Section 3, Article XIII, 1987 Constitution) equally call for recognition and protection. Those contending interests must be placed in proper perspective and equilibrium. DISPOSITION: WHEREFORE, the Writ of certiorari is GRANTED and the Orders of respondent Judge of 25 March 1989 and 29 March 1989 are SET ASIDE. The Writ of Prohibition is GRANTED and respondent Judge is enjoined from taking any further action in Civil Case No. 57055 except for the purpose of dismissing it. The status quo ante declaration of strike ordered by the Court on 24 May 1989 shall be observed pending the proceedings in the National Conciliation Mediation BoardDepartment of Labor and Employment, docketed as NCMB-NCR-NS-01-02189 and NCMB-NCR-NS-01-093-83. No costs. SO ORDERED.

dispute but it was illegal for not complying w/ the cooling-off period, 7-day strike ban after the strike vote report. Main issue of the petition for review is actually the separation pay and backwages which Court recalled the payment of backwages, reduced separation pay. FACTS: -APRIL 30, 1985: Employees of INPORT, members of the Macajalar Labor Union Federation of Free Workers (MLU-FFW) stopped working and gathered in mass action to express grievances re: wages, 13th month pay and hazard pay. Individual notices of strike were also filed w/ MOLE on the same morning. -conciliation conferences between INPORT and UNION failed -INPORT filed COMPLAINT FOR ILLEGAL STRIKE W/ PRAYER FOR TRO w/ Labor Arbiter -NLRC issued TRO, return-to-work order. Majority of the strikers returned to work, the respondent employees were the only ones who remained. The remaining workers were required to undergo prior screening conducted by MLU-FFW before they be accepted to work. -278 employees were dropped by MLU-FFW s counsel as respondents, claiming they were merely tricked into signing the individual notices of strike done w/o approval nor consultation of the majority of union members. INPORT did not object so LA granted the exclusion of the 278 employees. COMPLAINT for illegal strike was only against the 31 employees who continued w/ the strike. -LA: STRIKE ILLEGAL. But because the employees who continued the strike were not shown to have participated in illegal acts, they were ordered to return to work w/o undergoing the required screening by MLU-FFW. BUT WITH THE UNION OFFICERS, they should first seek reconsideration of INPORT before they be allowed to work. -Both INPORT and employees appealed (MR) -NLRC: affirmed w/ Modification LA: concerted action was more of a protest action + All workers should be allowed to work unconditionally but because of strained relations, SEPARATION PAY (equivalent to 12 months salaries) AWARDED IN LIEU OF REINSTATEMENT + 2 yr BACKWAGES -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 factual and legal basis but P1k given. -INPORT filed petition for certiorari for GADALEJ for the award of separation pay and backwages even if w/ an ILLEGAL STRIKE

GOLD CITY INTEGRATED PORT SERVICE V. NLRC, 245 SCRA 627 (1995) SUMMARY: Workers of INPORT staged a strike, filing individual notice of strike w/ MOLE (which EEs alleged to have been done through fraud on part of the union officers), expressing grievances regarding wages, 13th month pay, and hazard pay. INPORT complained that the strike was illegal. NLRC issued TRO, return-to-work order (majority of workers returned to work). LA declared strike as illegal (failed to comply w/ Art 264-265,LC). NLRC affirmed w/ modification, characterizing the strike as a protest action . Court held that there was a strike stemming from a labor 24 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

ISSUES: 1. WON there was a strike? 2. If there was a strike, WON it was illegal?
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3.

WON the award of separation pay and back wages was proper?

HELD: 1. YES. There was a strike, not a spontaneous protest action! -A strike, considered as the most effective weapon of labor, is defined as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. A labor dispute includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employers and employees. -Employees stopped working and held the mass action on April 30, 1985 to press for their wages and other benefits. What transpired then was clearly a strike, for the cessation of work by concerted action resulted from a labor dispute. 2. NO. it was ILLEGAL -The individual notices of strike filed by the workers did not conform to the notice required by the law to be filed since they were represented by a union (MLU-FFW) which even had an existing collective bargaining agreement with INPORT. -Neither did the striking workers observe the strike vote by secret ballot, cooling-off period and reporting requirements. y National Federation of Sugar Workers v. Ovejera: the language of the law leaves no room for doubt that the cooling-off period and the seven-day strike ban after the strike-vote report were intended to be mandatory. y -Article 265 of the Labor Code reads, inter alia: (i)t SHALL be unlawful for any labor organization . . . to declare a strike . . . without first having filed the notice required in the preceding Article or without the necessary strike vote first having been obtained and reported to the Ministry. - In requiring a strike notice and a cooling-off period, the avowed intent of the law is to provide an opportunity for mediation and conciliation. It thus directs the MOLE to exert all efforts at mediation and conciliation to effect a voluntary settlement' during the cooling-off period. . . . xxx xxx xxx The cooling-off period and the 7-day strike ban after the filing of a strike-vote report, as prescribed in Art. 264 of the Labor Code, are reasonable restrictions and their imposition is essential to attain the legitimate policy objectives embodied in 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 the commission of illegal acts during a strike may be declared to have lost their employment status. An ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he committed illegal acts 25 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

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 commits an illegal act during a strike. -HERE: In the case at bench, INPORT accepted the majority of the striking workers, including union officers, back to work. Private respondents were left to continue with the strike after they refused to submit to the "screening" required by the company. 3. NO basis. But gave separation pay as equitable relief -Under the law, an employee is entitled to reinstatement and to his full backwages when he is unjustly dismissed. -Reinstatement means restoration to a state or condition from which one had been removed or separated. Reinstatement and backwages are separate and distinct reliefs given to an illegally dismissed employee. -Separation pay is awarded when reinstatement is not possible, due, for instance, to strained relations between employer and employee. It is also given as a form of financial assistance when a worker is dismissed in cases such as the installation of labor saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the establishment, or in case the employee was found to have been suffering from a disease such that his continued employment is prohibited by law. It is a statutory right defined as the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. It is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. -Hence, an employee dismissed for causes other than those cited above is not entitled to separation pay. Well-settled is it that separation pay shall be allowed only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. -Backwages, on the other hand, is a form of relief that restores the income that was lost by reason of unlawful dismissal. ***It is clear from the foregoing summary of legal provisions and jurisprudence that there must generally be unjust or illegal dismissal from work, before reinstatement and backwages may be granted. And in cases where reinstatement is not possible or when dismissal is due to valid causes, separation pay may be 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 requirement. -but distinguish: *for the ORDINARY WORKER: Under Article 264 of the Labor Code, a worker merely participating in an illegal strike may not be terminated from his employment. It is only when he commits illegal acts during a strike that he may be
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declared to have lost his employment status. Since there appears no proof that these union members committed illegal acts during the strike, they cannot be dismissed. The striking union members among private respondents are thus entitled to reinstatement, there being no just cause for their dismissal. BUT HERE AWARD SEPARATION PAY IN LIEU OF REINSTATEMENT (MORE THAN 10YRS PASSED) *for the UNION MEMBERS: No backwages. *for the UNION OFFICERS: NO RELIEF! But moot because cannot be reinstated in accordance w/ CBA (they lost their good standing in the Union, thus were not members of the union anymore cannot be reinstated) -For knowingly participating in an illegal strike, the law mandates that a union officer may be terminated from employment. Notwithstanding the fact that INPORT previously accepted other union officers and that the screening required by it was uncalled for, still it cannot be gainsaid that it possessed the right and prerogative to terminate the union officers from service. The law, in using the word may, grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. -Moreover, an illegal strike which, more often than not, brings about unnecessary economic disruption and chaos in the workplace should not be countenanced by a relaxation of the sanctions prescribed by law. -In sum, reinstatement and backwages or, if no longer feasible, separation pay, can only be granted if sufficient bases exist under the law, particularly after a showing of illegal dismissal. However, while the union members may thus be entitled under the law to be reinstated or to receive separation pay, their expulsion from the union in accordance with the collective bargaining agreement renders the same impossible. DISPOSITION: WHEREFORE, from the foregoing premises, the petition in G.R. No. 103560 ("Gold City Integrated Port Service Inc. v. National Labor Relations Commission, et al.") is GRANTED. One month salary for each year of service until 1985 is awarded to private respondents who were not union officers as separation pay. The petition in G.R. No. 103599 ("Adelo Ebuna, et al. v. National Labor Relations Commission, et al.") is DISMISSED for lack of merit. No costs. SO ORDERED.

before the BOARD. Pending its decision, ER settled w/ Union w/ re: the claims of the individual employees, w/o notice to the individual employees concerned. When a subsequent claim for the same violation was filed again by the employees, ER was asserting that the claim was already resolved in the settlement. Issue was WON the Union was authorized by the individual employees to settle the dispute between them. Court differentiated Major disputes (disputes re: formation of CBA/rights) and Minor disputes (grievances arising from application of existing CBA) and held that Union represents employees in major disputes, but in minor disputes express authorization of the employees are needed for the union to act on their behalf. FACTS: -The controversy relates to operations in petitioner's so-called 'Whiting Yard.' Prior to July 24, 1934, respondents (BURLEY ET AL), or some of them, were employed by the Standard Oil Company to do private intraplant switching in its Whiting, Indiana, plant. On that date this work was taken over by ELGIN J & E. Ry. Until then Standard Oil's switching crews began work each day at hours fixed in advance by the management, which varied as plant operations required. -Prior to 1934 petitioner's crews at all yards in Indiana and Illinois began work daily in accordance with starting time provisions contained in Article 6 of a collective agreement made in 1927 between petitioner and the Brotherhood of Railroad Trainmen, governing rules, working conditions and rates of pay of yardmen. -Upon transfer of the Whiting yard switching to petitioner, respondents theretofore employed by Standard Oil became employees of petitioner and members of the Brotherhood. On July 24, 1934, company officials conferred with representatives of the engineers, the firemen and the yardmen concerning terms of employment. -The Brotherhood acted for the yardmen. Apparently agreement was reached on all matters except starting time but, as to that, versions of what transpired differ. EMPLOYEES and the Brotherhood have maintained that the 1927 agreement, including Article 6, became applicable to them upon the transfer. They say, however, that they assented to a suspension of Article 6 for thirty days from July 27, 1934, to enable the company to work out adjustment to the plant's operations, and 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 follow it as closely as possible, prior to October 31, 1938, when it and the Brotherhood eventually agreed to place Whiting yard crews on fixed starting time under circumstances to be noted. - The carrier continued to follow the former practice, although departures from the schedule were reduced, as it claims, in conformity with the oral undertaking to observe it as far as possible. The work went on without interruption. But numerous complaints on account of departures were made through local officers of the Brotherhood. Time slips were filed by the employees. Frequent negotiations took place. None however resulted in a settlement prior to October 31, 1938.
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TYPES OF LABOR DISPUTE ELGIN, J. & E. RY. CO. V. BURLEY ET AL., 325 U.S. 711 (1945) SUMMARY: There was a change in ER in the railroad company. CBA w/Previous ER provided Art.6 which provided the start of work hours. New ER (ELGIN) and the Union (Brotherhood) failed to reach an agreement as to its applicability. Subsequently, the union members Burley et al filed complaints with the union as to violation of the Art 6. Complaint was filed by the Union in behalf of the employees 26 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-In this state of affairs, respondents authorized the Brotherhood to file complaint with the National Railroad Adjustment Board for violation of Article 6. This was done on November 23, 1936. The 'statement of claim' was signed and filed by Williams, chairman of the general grievance committee. It asserted that the carrier, having 'placed the employees under the agreement of the yardmen,' had 'failed to put into effect the starting time provisions' o Article 6, and denied that violation was justified either because the carrier had agreed with the Engineers to follow the formerly prevailing practice or by the carrier's claim that the work could be done in no other way. The submission was intended to secure compliance. There was no prayer for money damages. Petitioner maintained that Article 6 was not applicable. -NATIONAL RAILROAD ADJUSTMENT BOARD: docketed the claim as No. 3537, notified the carrier and the union that the case, with many others docketed at the same time, was 'assumed to be complete,' and forwarded to each copies of the other's submissions. - October 31, 1938: Williams and Johnson, secretary of the Brotherhood, two of the grievance committee's three members, accepted an offer made by ER's president, Rogers, to settle the claim. The settlement took the form of a proposal, made in a 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.' Williams and Johnson endorsed acceptance for the Brotherhood and the yardmen on the letter. On the day the settlement was concluded Rogers and Williams advised the Board of it by letter and jointly requested that the case be withdrawn from the docket, which accordingly was done. -Notwithstanding the settlement, a further dispute arose. In March, 1939, the Brotherhood, through Williams, requested the carrier to furnish a complete list of crews in the Whiting yard started at times other than those fixed by Article 6 from August 27, 1934, to November 15, 1938, when the settlement became effective. The company declined to furnish the list, stating it was at a loss to understand the reason for the request in view of the settlement. -The upshot of the dispute was the filing of another claim with the Board, Docket No. 7324, on May 18, 1939, by Williams, acting for the Brotherhood. This submission was 'for one day's pay at time and one-half for each foreman and each helper for each day they were required to work in yard service in the Whiting (Standard Oil Company) Yard, in violation of the fixed starting time provided for in Article No. 6 of the Yardmen's Agreement * * * effective January 1, 1927, and applicable to Whiting (Standard Oil Company) Yardmen, July 27, 1934, from dates of August 27, 1934, until November 14, 1938, inclusive.' -The submission not only maintained the applicability of Article 6 and accrual of the individual claims asserted. It also maintained that the settlement of October 31, 1938, was effective only to fix the starting time for the future and had no effect to waive or determine individual claims for penalty damages accrued prior to the settlement. 27 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-The carrier's submission reiterated its position in Case No. 3537. It also relied upon the settlement as precluding later assertion of any claim, individual or collective, based upon occurrences prior to the date of the settlement. - Board: Under the procedure prescribed in case of deadlock, cf. § 3, First (l), a referee was called in. The award was made by the First Division on September 6, 1940. It sustained the Board's jurisdiction, found that 'the parties to said dispute were given due notice of hearing thereon,' and held that 'the evidence shows that the parties to the agreement disposed of the claim here made by the letter of carrier dated October 28, 1938, accepted by employees October 31, 1938.' Accordingly the claim was 'denied per findings.' -DC: no issue; immaterial if the Union or its officers had specific authority to submit the employee s individual claims for decision CA: for employees ISSUES: WON Williams and Johnson had authority to release the employees claims, in lieu of the Brotherhood s constitution which forbid union officials to release individual claims or to submit them to the Board w/o specific authority granted by individual members themselves. 2 kinds of disputes discussion: Disputes over grievances the prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions

contemplates the existence of a collective agreement already concluded or, at any rate, a situation in which no effort is made to bring about a formal change in terms or to create a new one. The dispute relates either to the meaning or proper application of a particular provision with reference to a specific situation or to an omitted case. the claim is founded upon some incident of the employment relation, or asserted one, independent of those covered by the collective agreement, e.g., claims on account of personal injuries. In either case the claim is to rights accrued, not merely to have new ones created for the

Disputes concerning the making of CBA the prompt and orderly settlement of all disputes growing out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions arise where there is no such agreement or where it is sought to change the terms of one, and therefore the issue is not whether an existing agreement controls the controversy. They look to the acquisition of rights for the future, not to assertion of rights claimed to have vested in the past.

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future. Minor disputes: affect the smaller differences which inevitably appear in the carrying out of major agreements and policies or arise incidentally in the course of an employment. They represent specific maladjustments of a detailed or individual quality. They seldom produce strikes, though in exaggerated instances they may do so. Negotiation and conference first, BUT then undergo process under the local adjustment boards. Another tribunal of very different character is established with 'jurisdiction' to determine grievances and make awards concerning them. Each party to the dispute may submit it for decision, w ether or not the other is willing, provided he has himself discharged the initial duty of negotiation. § 3, First (i). Rights of notice, hearing, and participation or representation are given. § 3, First (j). In some instances judicial review and enforcement of awards are expressly provided or are contemplated. § 3, First (p); cf. § 3, First (m). When this is not done, the Act purports to make the Board's decisions 'final and binding.' The Adjustment Board was created to remove the settlement of grievances from this stagnating process and bring them within a general and inclusive plan of decision.

Major disputes? : present the large issues about which strikes ordinarily arise with the consequent interruptions of traffic the Act sought to avoid. Because they more often involve those consequences and because they seek to create rather than to enforce contractual rights, they have been left for settlement entirely to the processes of noncompulsory adjustment. Negotiation and conference first, BUT then mediation under National Mediation Board acceptance/rejection of arbitration then to possible presidential intervention to secure adjustment -traditional voluntary processes of negotiation, mediation, voluntary arbitration and conciliation

On power of collective agent to act in behalf of employees: -applicable statute does not expressly provide that the bargaining agent can also represent the employees in Minor disputes only in Major disputes -If the collective agent has exclusive power to settle grievance by agreements, a strong inference, though not necessarily conclusive, would follow for its exclusive

power to represent the aggrieved employee before the Board. The converse also would be true. -HERE: NO POWER or else the aggrieved employee's rights of individual action are limited to rights of hearing before the union and possibly also by the carrier. - to adopt such a view of the statute's effects, in so far as it would deprive the aggrieved employee of effective voice in any settlement and of individual hearing before the Board, would be contrary to the clear import of its provisions and to its policy. -Individual employee preserves right to confer individually with ER of his grievances. Rights of conference are not identical with rights of settlement. But the purpose of conference and the duty to treat is to bring about agreement. The right and the obligation to share in the negotiations are relevant to their aim. Conceivably the statute might confer the right to participate in the negotiations, that is, to be heard before any agreement is concluded, either upon the collective agent or upon the aggrieved employee or employees, at the same time conferring upon the other the final voice in determining the terms of the settlement. This is, in effect, the position taken by each of the parties in this case. But they differ concerning where the final say has been vested. COURT RULES IFO of INDIVIDUAL EMPLOYEE! -His rights, to share in the negotiations, to be heard before the Board, to have notice, and to bring the enforcement suit, would become rights more of shadow than of substance if the union, by coming to agreement with the carrier, could foreclose his claim altogether at the threshold of the statutory procedure. This would be true in any case where the employee's ideas of appropriate settlement might differ from the union's. But the drastic effects in curtailment of his preexisting rights to act in such matters for his own protection would be most obvious in two types of cases; one, where the grievance arises from incidents of the employment not covered by a collective agreement, in which presumabl the collective interest would be affected only remotely, if at all; the other, where the interest of an employee not a member of the union and the collective interest, or that of the union itself, are opposed or hostile. That the statute does not purport to discriminate between these and other cases furnishes strong support for believing its purpose was not to vest final and exclusive power of settlement in the collective agent. -An award to affect the employee's rights, therefore, more must be shown than 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. -To settle for the future alone, without reference to or effect upon the past, is in fact to bargain collectively, that is, to make a collective agreement. That authority 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 includes the power to make a new agreement settling for the future a dispute concerning the coverage or meaning of a pre-existing collective agreement. For the collective bargaining power is not exhausted by being once exercised; it covers
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changing the terms of an existing agreement as well as making one in the first place. -HERE: The Brotherhood had power, therefore, as collective agent to make an agreement with the carrier, effective for the future only, to settle the question of starting time, and that power was derived from the Act itself. From the fact that the Brotherhood occupied the position of collective bargaining agent and as such had power to deal for the future, therefore, petitioner was not entitled to make any assumption concerning its authority to settle the claims accrued for the past or to represent the claimants exclusively in proceedings before the Board. Accordingly for the union to act in their behalf with conclusive effect, authorization by them over and above any authority given by the statute was essential. WON the union was actually authorized to file complaints before the board? -ER alleged that the employees made out time slips and filed many complaints w/ER s local officers of the Union on account of violation of Art 6 of CBA. Employees admit having authorized the union at a meeting of their local lodge to file the complaint in Docket No. 3537 and that this complaint was filed in full compliance with the Brotherhood's constitution and rules. The settlement of October, 1938, and the consequent withdrawal of the claim in Docket No. 3537 were made by the same official, Williams, whom respondents had authorized to file the claim and with whom, in effect, both the collective agreement and the Brotherhood's regulations required petitioner to deal concerning the matter. Moreover, the complaint in Docket No. 7324, filed in May, 1939, was filed by Williams and in the same manner as the complaint in Docket No. 3537. -but even w/ this, EEs allege that the union officers were not allowed by the Union s constitution to revise or change a general wage schedule or agreement concerning rates of pay, nor working conditions, unless authorized to do so by a majority vote of the lodges, or by a majority vote of the membership in the system'; that claims of individual members for back compensation could not be released without specific authority given individually; that no such authority was given; and that the carrier had knowledge of these limitations. They further allege that Williams and Johnson failed to notify them of the settlement, as the by-laws required; and deny that they knew of the settlement, the proceedings in Docket 7324 or the award until after the award was made, when they promptly repudiated it. They say accordingly that 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 not only for this reason but also because no notice of the proceeding was given to them. SO ISSUES: whether respondents assented, in legal effect, to the final settlement of their claims by the union or to exclusive representation by it in any of the following ways: (1) by making complaints through local union officials; (2) by authorizing the 29 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

Brotherhood to submit the complaint in Docket No. 3537; (3) by virtue of the Brotherhood's regulations; (4) by virtue of the collective agreement. -HELD: The collective agreement could not be effective to deprive the employees of their individual rights. Otherwise those rights would be brought within the collective bargaining power by a mere exercise of that power, contrary to the purport and effect of the Act as excepting them from its scope and reserving them to the individuals aggrieved. In view of that reservation the Act clearly does not contemplate that the right saved may be nullified merely by agreement between the carrier and the union. -Nor can we say as a matter of law that the mere making of complaints through 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 the union's regulations purported to give these effects to that conduct. The time slips apparently were filed by the employees themselves. The record shows only the general fact that complaints concerning departures were made through local officials. More than this would be required to disclose unequivocal intention to surrender the individual's right to participate in the settlement and to give the union final voice in making it together with exclusive power to represent him before the Board. The making of complaints in this manner was only preliminary to negotiation and equivocal at the most. -Nor can we say, in the present state of the record, that the union's regulations unequivocally authorized the general grievance committee or its chairman either to settle the claims or to act as exclusive representative before the Board. The parties rely upon apparently conflicting provisions or, if they are not actually in conflict, then upon different ones, the applicability of some of which is in dispute. Thus respondents rely upon Rule 3, which forbids change in existing agreements without the required vote of local lodges or system membership, and petitioner says the rule is not applicable to the dispute in this case. Whether or not the rule is applicable is a question of fact to be determined in the light of whatever evidence may be presented to sustain the one view or the other. Conceivably it may be intended to apply only where no grievance is involved or to the settlement of grievances and other disputes as well. But we cannot say, in the absence of further light than is now available, that on its face the rule bears only the one construction or the other.

IV. COLLECTIVE BARGAINING A. NATURE AND PURPOSE UNITED EMPLOYEES UNION OF GELMART INDUSTRIES PHILIPPINES V. NORIEL, 67 SCRA 267 (1975)
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SUMMARY: Union wants to nullify the certification election held due to the 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 allegation of duress to invalidate a certification election. Highlighted on the importance of Certification election. Importance of CB merely introduction to Certification election. FACTS: -United Employees of Gelmart Industries and the respondent union, National Union of Garments, Textiles, Cordage and Allied Workers of the Philippines, allegedly agreed in the pre-election conference conducted by the BLR that United Employees would be listed in the ballot as United Employees Union of Gelmart Industries Philippines (UEUGIP). However, in the notice of certification election, UEUGIP was deleted, replaced by a non-contending party, namely, Philippine Social Security Labor Union (PSSLU), which, although an existing labor federation ... has nothing to do and has no interest or right of participation [therein]." This was the same in the ballot. -UEUGIP did protest, but on the ground of the alleged electioneering of nuns and a priest as observers or inspectors on behalf of the respondent union. -Respondent union won 3,970 or 63% of the votes. UEUGIP garnered only 4.5% of the votes (291). On alleged violation of procedural due process, UEUGIP filed this action. -election turnout (according to respondent union): there were 11 precincts, each of which was presided over by a med-arbiter of the Bureau, as chairman, and another representation officer of the Bureau; there was also created a central election committee composed of four top personnel of the Bureau for optimum supervision; 3. There were some 8,900 eligible voters out of about 10,000 employees of the company; out of the 8,900 eligible voters, duly agreed upon by all the parties and approved by the Bureau, 6,309 or 79.7% voted; out of the 6,309 eligible voters cast,3970 or 63% went to GATCORD, [with UEUGIP placing] only fifth with a measly 291 votes or barely 4.5% of the total number of votes cast. It may be noted that even if the votes of all seven losing unions[were added], their total would only be 2,057, which is still 1,823 votes short of GATCORD's 2,970 votes. -respondent union also alleges that the petitioner actually does not represent the majority of the employees: there were actually 2 UEUGIP. 1st was represented by 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 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 posted, they still had not decided how they should be called. Only after the elction notice was already posted did the parties decided how they should be represented in the ballots. 30 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

ISSUE: WON the certification election can be nullified? HELD: NO 1. The institution of collective bargaining is, to recall Cox, a prime manifestation of 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 themselves in matters that really count. As labor, however, is composed of a number of individuals, it is indispensable that they be represented by a labor organization of their choice. Thus may be discerned how crucial is a certification election. y Standard Cigarette Workers' Union v. Court of Industrial Relations (JBL Reyes): "a complaint for unfair labor practice may be considered a prejudicial question in a proceeding for certification election when it is charged therein that one or more labor unions participating in the election are being aided, or are controlled, by the company or employer. The reason is that the certification election may lead to the selection of an employer-dominated or company union as the employees' bargaining representative, and when the court finds that said union is employerdominated in the unfair labor practice case, the union selected would be decertified and the whole election proceedings would be rendered useless and nugatory." y LVN Pictures v. Philippine Musicians Guild (J. Concepcion): important "to insure the fair and free choice of bargaining representatives by employees." There must be such an opportunity to determine which labor organization shall act on their behalf. - It is precisely because respect must be accorded to the will of labor thus ascertained that a general allegation of duress is not sufficient to invalidate a certification election; it must be shown by competent and credible proof. That is to give substance to the principle of majority rule, one of the basic concepts of a democratic polity. y Federation of the United Workers Organization v. Court of Industrial Relations: "The slightest doubt cannot therefore be entertained that what possesses significance in a petition for certification is that through such a device the employees are given the opportunity to make known who shall have the right to represent them. What is equally important is that not only some but all of them should have the right to do so." -HERE: the grievance spoken of is more fancied than real, the assertion of confusion and demoralization based on conjecture rather than reality. The mode and manner in which Antonio Diaz demonstrated how militant and articulate he could be in presenting his side of the controversy could hardly argue for the accuracy of his claim that his men did lose heart by what appeared at the most to be an honest

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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. -ON THE PARTICIPATION OF NUNS AND A PRIEST: y Victoriano v. Elizalde Rope Workers' Union(Justice Zaldivar): the privacy of religious freedom, to which contractual rights, even on labor matters, must yield, thus removing any taint of nullity from the amendment to the Industrial Peace Act, which would allow exemption from a closed shop on the part of employees, members of a given religious sect prohibiting its devotees from affiliating with any labor organization. y Basa v. Federacion Obrera de la Industria Tabaquera: emphasized that one's religious convictions may be the basis for an employee joining or refusing to join a labor union. Certainly, the wide latitude accorded religious groups in the exercise of their constitutional freedom would caution against reliance on such aground to invalidate a certification election. It thus appears that such an approach is reflected in the attitude adopted by petitioner, which in effect amounts to an abandonment of such a possible ground of protest, not at all lodged with this Court but merely mentioned in its recital of background facts. DISPOSITION: WHEREFORE, the petition for certiorari and prohibition is dismissed for lack of merit. The restraining order issued by this Court is lifted. This decision is immediately executory. No costs.

FACTS: -Union filed ULP vs. Tres Hermanas Restaurant (rep by Felisa Herrera) on the following allegations: y Tres Hermanas made a counter-proposal to the Union, that they would bargain if the Union would be a company union y Martin Briones, an employee was separated from the service because he organized and advised the complaining union -Tres Hermanas Restaurant denied the allegations -Judge Tabigne: exonerated Tres Hermanas -CIR en banc: split decision -subject to review ISSUES: 1. WON Tres Hermanas refused to bargain cllectively 2. WON Tres Hermanas interfered, coerced, or restrained their employees in the exercise of their right to join the complaining union 3. WON the dismissal of Martin Briones was due to the concern of Mrs. Herrera for her life HELD 1. NO -in the letter sent by the union to Tres Hermanas, it contained marks opposite each demand by the union (check for demands to which Mrs. Herrera was agreeable, Cross for disapproved demands, and circle for those left for discussion on some future time) -markings were made during the discussion of the demands in the meeting at Tres Hermanas Restaurant. -the meeting where the markings were made was called by Tres Hermanas precisely in view of the letter sent by the union -Tres Hermanas allegedly refused to bargain with the union unless they became a company union but it was shown in the answer of the respondents that they were of the impression that before a union could have the capacity to bargain with them, they must first be certified by the Court of Industrial Relations as the duly authorized bargaining unit (in another case before CIR, INTERNATIONAL LABOR AND MARINE UNION OF THE PHILIPPINES claimed to represent the majority of the employees of Tres Hermanas (yeah right, "marine" union in a restaurant) 2. NO -to prove this, the union showed a document which contains the alleged counterproposals tendered to the complainant union. This document contained certain notations which were made by one Ernesto Tan which are indeed derogatory and which were allegedly made by him upon instructions of Mrs. Herrera, specifically
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NATIONAL UNION OF RESTAURANT WORKERS V. CIR, 10 SCRA 843 (1964) SUMMARY: NURW filed a complaint for ULP against Tres Hermanas Restaurant, specifically against Mrs. Felisa Herrera, for 3 grounds: (1)refusal to bargain with 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 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 on the proposals (3 if agreeable; 2 if not agreeable; c if open for discussions). This fact shows that the ER was agreeable to negotiations. The fact that it did not give a reply to its demands is merely procedural and could not be deemed an ULP with the efforts to negotiate shown by the ER. As to the 2nd allegation, it appears that another union - International Labor and Marine Union of the Philippines claimed to represent majority of the workers in the company so the ER wanted to make sure that the union had capacity to be the authorized bargaining unit. As to the third contention, it was found that other active members of the union were not terminated so the termination of Briones could not have been based on union activities. 31 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

the one which stated that Herrera would be willing to recognize the union "if union would be willing to recognize the union". -Tres Hermanas, however, denied that they ever authorized Ernesto Tan to make such notation (merely a bookkeeper whose duties were confined to the keeping and examination of their books of accounts and sales invoices. -Ernesto Tan was not even invited to the meeting. He also made those notations on his own account and initiative 3. NO -It appears from Martin Briones himself that he is not the only one who organized the complaining union but together with other employees who were more active than himself. Yet, these employees were never touched and continued to be employed in respondent's resturant. -If it was indeed due to union activities, then the more active union members should have been dismissed earlier than Briones Disposition. WHEREFORE, the decision appealed from is affirmed. No costs.

PHILAM MGT. CO. INC V. PHILAM EMPLOYEES ASSOCIATION (1973) Summary: Not much facts to talk about. The point of this case being assigned is that the issue of minimum wage is not a bargainable issue. Neither party in this particular case is at liberty to agree to an amount lower than that the law requires as to the wages to be paid. To that extent, there is no room for offer and counter offer. The employer has an obligation to meet. His duty is plain. He must pay what he has to.

KIOK LOY V. NLRC (1986) Summary: The certified sole and exclusive bargaining representative union offered 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 Bargaining.Conciliation proceedings were delayed on account of the ER, and the 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 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 collective bargaining, court held that it is a mutual responsibility of the ER and the union, characterized as a legal obligation. Note that as penalty to the ER, the court imposed the proposals of the Union as the terms of the CBA. Note also that there was no preexisting CBA here. 32 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

FACTS - Pambansang Kilusan ng Paggawa (Kilusan), a legitimate labor federation, won cert election and was certified by the BLR as the sole and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company). - Kilusan then gave the Company two copies of its proposed CBA. It requested the Company for its counter proposals. There was no response from Company. Kilusan again requested the Company for collective bargaining negotiations and for the Company to furnish them with its counter proposals. Both requests were ignored and remained unacted upon by the Company. -Kilusan on Feb 14, 1979, filed a "Notice of Strike", with the BLR on ground of unresolved economic issues in collective bargaining. -Conciliation proceedings followed but all attempts towards an amicable settlement failed. BLR certified the case to the NLRC for compulsory arbitration. The case was reset/postponed several times (mostly Company s request ). -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 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. - 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 be the collective agreement w/c should govern the relationship between the parties. -Petitioner: its right to procedural due process has been violated when it was precluded from presenting further evidence in support of its stand and when its request for further postponement was denied. 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 then that they came to know of the Union's demands; that CBA approved and adopted by the NLRC is unreasonable and lacks legal basis. ISSUE/S 1. WON company s right to due process has been violated 2. WON company is guilty of ULP 3. WON CBA is reasonable HELD 1) NO -Considering the various postponements granted in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had not even honored respondent union with any reply to the latter's successive letters, all geared towards bringing the Company to the
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bargaining table.. Certainly, the moves and overall behavior of company were in total derogation of the policy enshrined in the Labor Code which is aimed towards expediting settlement of economic disputes. Hence, the Court is not prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers. 2) YES - Article 249, par. (g) LC makes it an unfair labor practice for an employer to refuse "to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievance or question arising under such an agreement and executing a contract incorporating such agreement, if requested by either party." -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 responsibility of the employer and the Union and is characterized as a legal obligation. - While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. -The mechanics of collective bargaining is set in motion only when the ff. jurisdictional preconditions are present, namely, (1) possession of the status of majority representation of the employees' representative in accordance with any of the means of selection or designation provided for by the LC; (2) proof of majority representation; and (3) a demand to bargain under Art 251, par. (a) of the Labor Code . . . all of which preconditions are undisputedly present in the instant case. -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 latter's disregard of, and failure to live up to, what is enjoined by the Labor Code ---to bargain in good faith. -Company is GUILTY of unfair labor practice. (1) respondent Union was a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed CBA, to the Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. Even during the period of compulsory arbitration before the NLRC, Company's stalled the negotiation by a series of postponements, non-appearance at the hearing conducted -Herald Delivery Carriers Union (PAFLU) vs. Herald Publications: "unfair labor practice is committed when it is shown that the respondent employer, after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal. This doctrine was reiterated in Bradman vs. CIR: "while the law does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation 33 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

with an open mind and make a reasonable effort to reach a common ground of agreement". 3) YES - The instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to determine the reasonableness of the terms and conditions of employment embodied in any CBA. To that extent, utmost deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing agreement by the employees and management must be accorded due respect by this Court. Disposition Petition dismissed.

DIVINE WORD UNIVERSITY V. SOLE (1992) Summary: The Certified Bargaining Representative initially offered its proposed CBA terms but unilaterally withdrawn it. After 3 years, it again offered to negotiate but was ignored by the ER. They filed a notice to strike, the dispute was assumed by the SOLE, the parties entered into an agreement that they would negotiate but an hour before that, a petition for certification election was filed by the ER. Court upheld the decision of SOLE that the certification election should not be held, not because there was a deadlock because there was really none, but because of the bad faith on the part of the ER. The court also upheld the unilateral imposition of the CBA terms to the ER due to the fault of the ER. Note that there was no preexisting CBA here. Sir said that in Kiok Loy and in Divine Word, the ER closed. FACTS: -Divine Word University Employees Union was certified as the sole and exclusive bargaining agent of Divine Word University. Thus, they requested a preliminary conference with the University. However, 2 days before the scheduled conference, the union's vice-president wrote a letter to the university unilaterally withdrew the CBA proposals. -After almost 3 years after, the Union then affiliated with ALU requested a conference with the University for CBA negotiations. No response from the University so the Union sent a follow-up letter reiterating the request for a conference. University still did not reply. -So the Union filed w/ NCMB a Notice of Strike on the ground of bargaining deadlock and ULP. To stop the strike, an agreement was entered into by the Union and the University wherein they agreed to have negotiations. -However, the University filed a petition for certification election before the said agreement was entered into. Thus, when the Union submitted its proposals, they were ignored by the University
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-after a marathon of conciliation conferences wherein nothing happened, SOLE exercised his powers under Art. 263(g) of LC and assumed jurisdiction over the labor dispute. -meanwhile, MedArb directed the conduct of certification elections which the union sought to be enjoined - the SOLE granted it and enjoined the conduct of the elections. -SOLE, assuming jurisdiction over the disputes, resolved the issues in favor of the 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 certification election and that there existed a bargaining deadlock -SOLE also ordered the parties to continue with CBA negotiations but nothing happened . -SOLE changed (from Drilon to Acting Secretary dela Serna) but the ruling was still the same. For failure of the University to negotiate, the proposals of the Union were adopted 1. WON the SOLE correctly assumed jurisdiction over the dispute as one of national interest? YES. The nature of the business of the University demanded immediate and effective action on the part of the respondent public officials. Otherwise, not only the contending parties in the dispute would be adversely affected but more importantly, the studentry and their parents 2. WON a petition for certification election could be refused in this case? Legally no but cannot reward the ER for BF -in the absence of a collective bargaining agreement, an employer who is requested to bargain collectively may file a petition for certification election any time except upon a clear showing that one of these two instances exists: (a) the petition is filed within one year from the date of issuance of a final certification election result or (b) when a bargaining deadlock had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. -A deadlock is defined as the counteraction of things producing entire stoppage: a state of inaction or of neutralization caused by the opposition of persons or of factions (as in government or a voting body): standstill. There is a deadlock when there is a complete blocking or stoppage resulting from the action of equal and opposed forces; as, the deadlock of a jury or legislature. The word is synonymous with the word impasse which, within the meaning of the American federal labor laws, presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the parties. -HERE: No deadlock so legally, can still grant petition for certification election: NO "REASONABLE EFFORT AND GOOD FAITH BARGAINING. Its indifferent attitude towards collective bargaining inevitably resulted in the failure of the parties to arrive at an agreement. As it was evident that unilateral moves were being 34 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

undertaken only by the DWUEU-ALU, there was no counteraction of forces or an impasse to speak of. While collective bargaining should be initiated by the union, there is a corresponding responsibility on the part of the employer to respond in some manner to such acts. -BF ON PART OF ER: an hour before the agreement between the ER and the Union was entered, the petition for certification of election was filed even with the ER knowing that the Union was certified as the EBR of its employees 3. WON the SOLE committed grave abuse of discretion when it "unilaterally imposed" the provisions of the CBA as proposed by the union. NO. The petitioner may not validly assert that its consent should be a primordial consideration in the bargaining process. By its acts, no less than its inaction which bespeak its insincerity, it has forfeited whatever rights it could have asserted as an employer. We, therefore, find it superfluous to discuss the two other contentions in its petition. Disposition. WHEREFORE, the instant Petition is hereby DISMISSED for lack of merit. This Decision is immediately executory. Costs against the petitioner.

SAN JUAN DE LETRAN V. ASSOCIATION OF EMPLOYEES (2000) Summary: The existing exclusive bargaining representative wanted to renegotiate the terms of the remaining period of the CBA but Letran refused to do so, delaying the negotiation process by rescheduling the work of the president and by subsequently dismissing her. Letran also suspended the negotiations allegedly due to a petition for certification election filed by another union, though outside the 60day freedom period prior to the expiration of the CBA (which already expired 2 years before the petition was filed). Court held that Letran committed ULP when it failed to give counterproposal BF bargaining. Also held that the petition for certification election which was not filed during the freedom period does not give a legitimate representation question which would necessitate the suspension of renegotiation with the Union. Also held that the dismissal of the Union president was also ULP on the part of Letran. FACTS: -Union, through its president, initiated the renegotiation fort the last 2 years of the CBA's 5 year lifetime. On the same year, Ambas was newly elected as president -Ambas wanted to continue the renegotiation but LETRAN claimed that a CBA was already prepared. The said CBA was submitted for referendum by the union members but was rejected by the UNION -LETRAN accused UNION of bargaining in BF
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LA: for LETRAN NLRC: reversed for UNION -UNION notified NCMB of intention to strike: 1. Non-compliance w/NLRC's order to delete Atty. Leynes's name as the union's counsel 2. Refusal to bargain -Parties eventually agreed to renegotiate the terms of the CBA. UNION submitted its proposal to petitioner, which allegedly was submitted to the Board of Trustees of LETRAN. Meanwhile: 1. Ambas was informed of the change of her work schedule, to which Ambas protested, requested that the issue be submitted to grievance procedure 2. Union filed notice to strike after LETRAN did not act upon the request of the union 3. Union received LETRAN's letter dismissing Ambas for insubordination -renegotiation started again. But LETRAN stopped the negotiations on the allegation that a new group of employees filed a petition for certification election -Union finally struck. Return to work order. Letran readmitted the striking employees except AMBAS -NLRC: declared LETRAN guilty of ULP ISSUES 1. WON petitioner is guilty of ULP by refusing to bargain w/ the union when it unilaterally suspended the ongoing negotiations for a new CBA upon mere information that a petition for certification has been filed by another legitimate labor organization 2. WON the termination of union president amounts to an interference of employees' right to self-organization HELD 1. YES -Art 252 MEANING OF DUTY TO BARGAIN COLLECTIVELY -Requirement on both parties of the performance of the mutual obligation to meet and convene promptly and expeditiously in GF for the purpose of negotiation an agreement -Union lived up to this requisite by presenting its proposals to LETRAN. LETRAN on the other hand devised ways and means to prevent the negotiation. -Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply to the proposals presented by the latter. More than a month after the proposals were submitted by the union, petitioner still had not made any counter-proposals. This inaction on the part of petitioner prompted the union to file its second notice of strike on March 13, 1996. Petitioner could only 35 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matter as its excuse for failing to file its reply. -applied Kiok Loy: refusal to make a counter-propsal is an indication of BF -delaying tactics by LETRAN: 1. Days after the union submitted its proposals, LETRAN changed work schedule of the UNION PRESIDENT 2. Two days after LETRAN and the UNION met to set the ground rules for negotiation, LETRAN dismissed the union president for alleged insubordination. 3. LETRAN now suspends the bargaining on the allegation that a new group of employees (ASSOCIATION OF CONCERNED EMPLOYEES OF COLLEGIO) has filed a petition for certification election -on suspension of negotiations on alleged petition for certification election: In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the employer. must also comply with LABOR CODE PROVISIONS y A petition for certification election must be filed durign the 60-day 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 y Old CBA extended for stability purposes here no clear reprsentation issue, the petition being filed 2 years after the lifetime of the previous CBA. the same petition was also dismissed by SOLE, upheld by SC 2. YES -While we recognize the right of the employer to terminate the services of an employee for a just or authorized cause, nevertheless, the dismissal of employees must be made within the parameters of law and pursuant to the tenets of equity and fair play.The employer's right to terminate the services of an employee for just or authorized cause must be exercised in good faith. More importantly, it must not amount to interfering with, restraining or coercing employees in the exercise of their right to self-organization because it would amount to, as in this case, unlawful labor practice under Article 248 of the Labor Code. -The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years her working schedule was from Monday to Friday. However, things began to change when she was elected as union president and when she started negotiating for a
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new CBA. Thus, it was when she was the union president and during the period of tense and difficult negotiations when her work schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was changed, she was outrightly dismissed for alleged insubordination. Disposition. WHEREFORE, premises considered, the petition is DENIED for lack of merit. SO ORDERED. B. BARGAINABLE ISSUES ARTICLE 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. ARTICLE 260. Grievance machinery and voluntary arbitration. - The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or 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 Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above. MANILA FASHIONS INC. V. NLRC (1996) 36 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

Summary: ER and Union entered into an agreement to condone the implementation of Wage Orders in lieu of the alleged losses suffered by the ER. EEs now assail the noncompliance with the Wage Orders. Court held that the parties cannot negotiate on the nonimplementation of wage orders, it being contrary to law. FACTS: -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 the implementation of Wage Order Increase, as contained in Section 3, Article 8 of the 1992 CBA (though the Wage Order covered were only Wage Order No. NCR-02 and 02-A) -For the nonpayment of the corresponding increase in wage, as ordered by the said wage orders, the employees as represented by the union, filed before the Labor Arbiter a complaint for noncompliance of the wage orders. They did admit the existence of the provision in the CBA but denied the validity of the said provision, on the ground that it was not reached after due consultation with the members LA: CBA provision VOID, not enforceable, it being contrary to law. only the Tripartite Wge Productivity Board of DOLE could approve the exemption of an establishment from coverage of the Wage Order NLRC: affirmed LA ISSUE Was the condonation of the Wage Order contained in the CBA valid? HELD NO. Parties to a CBA may not by themselves, set a wage lower than the minimum wage. To do so would render nugatory the purpose of a wage exemption, not to mention the possibility that employees may be unwittingly put in a position to accept a lower wage. -A Collective Bargaining Agreement refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit, including mandatory provisions for grievances and arbitration machineries. -As in all other contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided they are not contrary to law, morals, good customs, public order or public policy. -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 its mandate on wage increase of P12.00 effective 8 January 1991. -Also, as stated by the Labor Arbiter, it is only the Tripartite Wage Productivity Board of the DOLE that could approve exemption of an establishment from
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coverage of a Wage Order. If petitioner is a financially distressed company then it should have applied for a wage exemption so that it could meet its labor costs without endangering its viability or its very existence upon which both management and labor depend for a living. Disposition. WHEREFORE, the petition is DISMISSED. The order of respondent National Labor Relations Commission which affirmed the decision of the Labor Arbiter awarding the total amount of P900,012.00 to the complainants is likewise AFFIRMED. SO ORDERED. REPUBLIC SAVINGS BANK V. CIR (1967) Summary: The employees of the bank wrote to the President of the bank, asking that he resign on grounds of immorality, nepotism, favoritism as to promotions, toleration of dishonesty, and other accusations. The employees were dismissed, thus they filed a complaint for illegal dismissal. Court held in their favor, with the bank failing to resort to grievance machinery. FACTS -8 employees of the bank wrote to the President of the bank, demanding his resignation on the grounds of immorality, nepotism in appointment and favoritism, as well as discrimination in the promotion of bank employees. Copies of the said letter were given to the Chairman of the Board of the Bank and the Governor of Central Bank -based on the alleged "patently libelous letter", the said employees were discharged. -Employees filed a case for ULP before the CIR, alleging that the dismissal was due to union activities -ER denied, moved for dismissal CIR: For the employees: Section 4 (a) applies to cases in which an employee is dismissed or discriminated against for having filed "any charges against his employer" ISSUE WON the BANK dismissed the employees for cause, and not for union activities as they wrote the letter in their individual capacities and not related to their right to self-organization? HELD NO. Still ULP! -Definition of INTERFERENCE: interference with which constitutes an unfair labor practice under section 4(a)(1). This is the view of some members of this Court. For, as has been aptly stated, the joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is a concerted activity 37 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

protected by the Industrial Peace Act. It is not necessary that union activity be involved or that collective bargaining be contemplated. -Here, even when the employees acted in their individual capacities, a proper construction is that the employees shall have the right to engage in concerted activities for their mutual aid or protection even though no union activity be involved, for collective bargaining be contemplated. -As to grievance procedure: Some other members of this Court believe, without necessarily expressing approval of the way the respondents expressed their grievances, that what the Bank should have done was to refer the letter-charge to the grievance committee. This was its duty, failing which it committed an unfair labor practice under section 4(a) (6). For collective bargaining does not end with the execution of an agreement. It is a continuous process. The duty to bargain imposes 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 adjusting any grievances or question arising under such agreement" and a violation of this obligation is, by section 4 (a) (6) and (b) (3) an unfair labor practice. - Collective bargaining . . . normally takes the form of negotiations when major conditions of employment to be written into an agreement are under consideration and of grievance committee meetings and arbitration when questions arising in the administration of an agreement are at stake. - Instead of stifling criticism, the Bank should have allowed the respondents to air their grievances. Good faith bargaining required of the Bank an open mind and a sincere desire to negotiate over grievances. The grievance committee, created in the collective bargaining agreements, would have been an appropriate forum for such negotiation. Indeed, the grievance procedure is a part of the continuous process of collective bargaining. It is intended to promote, as it were, a friendly dialogue between labor and management as a means of maintaining industrial peace. Disposition. ACCORDINGLY, the decision of July 4, 1962 and the resolution of August 9, 1962 of the Court of Industrial Relations are affirmed, at petitioner's cost. NESTLE PHIL. INC V. NLRC Summary: There was a bargaining deadlock between the Union and Nestle. One of the issues was with regard the Retirement plan. Nestle argued that since the retirement plan is non-contributory, it should not be within the ambit of the negotiations. Court held that even if the retirement plan was not contributory, most of the economic benefits negotiated in the CBA negotiations were also noncontributory. Also, it was previously included in previous CBA negotiations, and were not questioned by the ER before. The inclusion of such retirement plan thus is a vested and demandable right on the part of the employees which Nestle cannot now withdraw, eliminate or diminish.

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FACTS - Four CBAs with Nestle Philippines (Nestle) expired on June 30, 1987. While the parties were negotiating, the employees resorted to a "slowdown" and walk-outs prompting Nestle to shut down the factory. Marathon collective bargaining negotiations between the parties ensued. - The UFE declared a bargaining deadlock. The Secretary of Labor assumed jurisdiction and issued a return to work order. In spite of that order, the union struck, without notice. Nestle retaliated by dismissing the union officers and members of the negotiating panel who participated in the illegal strike. The NLRC affirmed the dismissals. UFE filed a notice of strike on the same ground of CBA deadlock and ULP. - 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 regarding the union's demand for liberalization of the company's retirement plan for its workers. Both the parties MFR were denied. - Nestle filed this petition for certiorari alleging that since its retirement plan is noncontributory, it has the sole and exclusive prerogative to define the terms of the plan because the workers have no vested and demandable rights there under, the 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 should be left to the discretion of the company on how to improve or modify the same. ISSUE WON the Retirement Plan is a collective bargaining issue HELD YES. Ratio The fact that the retirement plan is non-contributory, i.e., that the employees contribute nothing to the operation of the plan, does not make it a non-issue in the CBA negotiations. Reasoning Almost all of the benefits granted to its employees under the CBA (salary increases, rice allowances, midyear bonuses, 13th & 14th month pay, seniority pay, medical and hospitalization plans, health and dental services, vacation, sick & other leaves with pay) are non-contributory benefits. Since the retirement plan has been an integral part of the CBA since 1972, the Union's demand to increase the benefits due the employees under said plan is a valid CBA issue. - The improvement of the existing Retirement Plan was one of the original CBA proposals submitted by the UFE to Nestle. The union's original proposal was to modify the existing plan by including a provision for early retirement. The company did not question the validity of that proposal as a collective bargaining issue but 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 38 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

those existing in the industry. The union thereafter modified its proposal, but the company was adamant. Consequently, the impasse on the retirement plan became one of the issues certified to the NLRC for compulsory arbitration. - The inclusion of the retirement plan in the CBA as part of the package of economic benefits extended by the company to its employees gives it "a consensual character" so that it may not be terminated or modified at will by either party. Employees have a vested and demandable right over existing benefits voluntarily granted to them by their employer. The latter may not unilaterally withdraw, eliminate or diminish such benefits. Disposition Petition is DISMISSED. LUZON DEVELOPMENT BANK VS. ASSOCIATIONS OF LUZON DEVELOPMENT BANK EMPLOYEES (1995) Summary: Not much discussion here since the facts refer to the procedure before the voluntary arbiter. What is relevant as to bargainable issues here is that the parties are required to include a grievance procedure in the CBA. FACTS -Luzon Development Bank (LDB) and the Association of Luzon Development Bank Employees (ALDBE) submitted to arbitration to resolve WON the company has violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April 1994, on promotion -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 Position Paper on January 18, 1995. -LDB, on the other hand, failed to submit its Position Paper -On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision finding that the Bank has not adhered to the Collective Bargaining Agreement provision nor the Memorandum of Agreement on promotion. -Hence, this petition ISSUE WON the Voluntary Arbitrator erred in finding that the Bank has not adhered to the Collective Bargaining Agreement provision nor the Memorandum of Agreement on promotion (the Court referred the case to the CA so the issue wasn t resolved it said that elevating a decision or award of a voluntary arbitrator to the Supreme Court on a 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 burden upon it)
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HELD -In labor law context, arbitration is the reference of a labor dispute to an impartial third person for determination on the basis of evidence and arguments presented by such parties who have bound themselves to accept the decision of the arbitrator as final and binding. -Arbitration may either be compulsory or voluntary. -Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and are compelled to accept the resolution of their dispute through arbitration by a third party. -Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a voluntary arbitration clause in their collective agreement, to an impartial third person for a final and binding resolution. -Ideally, arbitration awards are supposed to be complied with by both parties without delay, such that once an award has been rendered by an arbitrator, nothing 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 particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide their case. Above all, they have mutually agreed to de bound by said arbitrator's decision. -In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to include therein provisions for a machinery for the resolution of grievances arising from the interpretation or implementation of the CBA or company personnel policies. -For this purpose, parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators, or include a procedure for their selection, preferably from those accredited by the National Conciliation and Mediation Board (NCMB). Disposition. The Court resolved to REFER this case to the Court of Appeals C. PROCEDURE ARTICLE 250. Procedure in collective bargaining. - The following procedures shall be observed in collective bargaining: (a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice; (b) Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than ten (10) calendar days from the date of request. chanroblespublishingcompany (c) If the dispute is not settled, the Board shall intervene upon request of either or 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 39 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call; (d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and (e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator. (As amended by Section 20, Republic Act No. 6715, March 21, 1989). ARTICLE 251. Duty to bargain collectively in the absence of collective bargaining agreements. - In the absence of an agreement or other voluntary arrangement providing for a more expeditious manner of collective bargaining, it shall be the duty of employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code. ARTICLE 233. Privileged communication. - Information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence in the Commission. Conciliators and similar officials shall not testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them. NATURE OF PROCEDURE NATIONAL UNION OF RESTAURANT WORKERS, SUPRA. SUMMARY: NURW filed a complaint for ULP against Tres Hermanas Restaurant, specifically against Mrs. Felisa Herrera, for 3 grounds: (1)refusal to bargain with 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 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 on the proposals (3 if agreeable; 2 if not agreeable; c if open for discussions). This fact shows that the ER was agreeable to negotiations. The fact that it did not give a reply to its demands is merely procedural and could not be deemed an ULP with the efforts to negotiate shown by the ER. As to the 2nd allegation, it appears that another union - International Labor and Marine Union of the Philippines claimed to represent majority of the workers in the company so the ER wanted to make sure that the union had capacity to be the authorized bargaining unit. As to the third contention, it was found that other active members of the union were not terminated so the termination of Briones could not have been based on union activities.
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KIOK LOY, SUPRA Summary: The certified sole and exclusive bargaining representative union offered 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 Bargaining.Conciliation proceedings were delayed on account of the ER, and the 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 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 collective bargaining, court held that it is a mutual responsibility of the ER and the union, characterized as a legal obligation. Note that as penalty to the ER, the court imposed the proposals of the Union as the terms of the CBA. Note also that there was no preexisting CBA here. Relevant opinion: -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 responsibility of the employer and the Union and is characterized as a legal obligation. - While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. -The mechanics of collective bargaining is set in motion only when the ff. jurisdictional preconditions are present, namely, (1) possession of the status of majority representation of the employees' representative in accordance with any of the means of selection or designation provided for by the LC; (2) proof of majority representation; and (3) a demand to bargain under Art 251, par. (a) of the Labor Code . . . all of which preconditions are undisputedly present in the instant case. COLEGION DE SAN JUAN DE LETRAN V. ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN (2000), SUPRA Summary: The existing exclusive bargaining representative wanted to renegotiate the terms of the remaining period of the CBA but Letran refused to do so, delaying the negotiation process by rescheduling the work of the president and by subsequently dismissing her. Letran also suspended the negotiations allegedly due to a petition for certification election filed by another union, though outside the 60day freedom period prior to the expiration of the CBA (which already expired 2 years before the petition was filed). Court held that Letran committed ULP when it failed to give counterproposal BF bargaining. Also held that the petition for certification election which was not filed during the freedom period does not give a legitimate representation question which would necessitate the suspension of 40 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

renegotiation with the Union. Also held that the dismissal of the Union president was also ULP on the part of Letran. Relevant Opinion: -Requirement on both parties of the performance of the mutual obligation to meet and convene promptly and expeditiously in GF for the purpose of negotiation an agreement ARTICLE 242. Rights of legitimate labor organizations. - A legitimate labor organization shall have the right: (c) To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation; 4. DOLE CONCILIATION ARTICLE 250. Procedure in collective bargaining. - The following procedures shall be observed in collective bargaining: (c) If the dispute is not settled, the Board shall intervene upon request of either or 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 attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call; (d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and (e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator. (As amended by Section 20, Republic Act No. 6715, March 21, 1989). EO 251, Section 4 ARTICLE 233. Privileged communication. - Information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence in the Commission. Conciliators and similar officials shall not testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them. LC IRR, Rule 13, Setion 6, Book V
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5. DUTY TO BARGAIN SAMAHAN SA PERMEX V. SOLE (1998) Summary: In the Certification Election, no Union won. 10 months after, Union wanted to be voluntarily recognized. Employer entered into CBA negotiations. Court held that Permex should not have recognized the union as the bargaining representative of the employees, it being dubious that they entered CBA with the said union 10 months after the employees of the said company voted in the petition for certification for No union . Although certification elections should only be conducted 60 days prior to the expiration of the CBA, an exemption to this is when there is doubt in the identity of the representative that would not provide the stability aimed by the rule. Relevant Opinion: -Certification election is the most effective and the most democratic way of determining which labor organization can truly represent the working force in the appropriate bargaining unit of a company. -Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its application for registration with the DOLE and that when petitioner signed the CBA with the company, the CBA was ratified by 542 employees. Petitioner contends that such support by the majority of the employees justifies its finding that the CBA made by it is valid and binding. -But it is not enough that a union has the support of the majority of the employees. It is equally important that everyone in the bargaining unit be given the opportunity to express himself. -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 certification election conducted in the company. As pointed out by respondent Secretary of Labor in his decision, there can be no determination of a bargaining representative within a year of the proclamation of the results of the certification election. -Here the results, which showed that 61% of the employees voted for "no union," were certified only on February 25, 1991 but on December 1, 1991 Permex Producer already recognized the union and entered into a CBA with it. -There is something dubious about the fact that just ten (10) months after the employees had voted that they did not want any union to represent them, they 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 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 41 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

Solicitor General that retractions of statements by employees adverse to a company (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 cannot readily be accepted as true. -on contract bar rule: The purpose of the rule is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good faith and for the stipulated original period. Excepted from the contract-bar rule are certain types of contracts which do not foster industrial stability, such as contracts where the identity of the representative is in doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice because it does not establish the kind of industrial peace contemplated by the 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 had not been established yet. ALU V. FERRER-CALLEJA Summary: Employer Recognized ALU as the Exclusive bargaining representative and entered with it a CBA 2 days after even when there was no proof of majority support from the employees. Two other unions contest the recognition, filed a petition for certification election. Further, 181 of the 281 employees who allegedly ratified the CBA now strongly and vehemently repudiated the alleged negotiations and ratification. The CBA also was not posted as required, allegedly because there were no impartial members of the unit. Court held that there is doubt as to the status of ALU as representing the majority of the employees, so ordered the conduct of certification election. Relevant Opinion: -the mechanics of collective bargaining are set in motion only when the following jurisdictional preconditions are present, namely, (1) possession of the status of majority representation by the employees' representative in accordance with any of the means of selection and/or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, paragraph (a), of the New Labor Code. -In the present case, the standing of petitioner as an exclusive bargaining representative is dubious, to say the least. It may be recalled that respondent company, in a letter dated May 12, 1986 and addressed to petitioner, merely indicated that it was "not against the desire of (its) workers" and required petitioner to present proof that it was supported by the majority thereof in a meeting to be held on the same date. The only express recognition of petitioner as said employees' bargaining representative that We see in the records is in the
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collective bargaining agreement entered into two days thereafter. Evidently, there was precipitate haste on the part of respondent company in recognizing petitioner union, which recognition appears to have been based on the self-serving claim of the latter that it had the support of the majority of the employees in the bargaining unit. Furthermore, at the time of the supposed recognition, the employer was obviously aware that there were other unions existing in the unit. As earlier stated, respondent company's letter is dated May 12, 1986 while the two other unions, Southern Philippine Federation of Labor (hereafter, SPFL and Philippine Social Security Labor Union (PSSLU, for short), went on strike earlier on May 9, 1986. The unusual promptitude in the recognition of petitioner union by respondent company as the exclusive bargaining representative of the workers in GAW Trading, Inc. under the fluid and amorphous circumstances then obtaining, was decidedly unwarranted and improvident. -even in cases where it was the then Minister of Labor himself who directly certified the union as the bargaining representative, this Court voided such certification where there was a failure to properly determine with legal certainty whether the union enjoyed a majority representation. In such a case, the holding of a 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. -ON FAILURE TO POST THE CBA: the posting of copies of the collective bargaining agreement is the responsibility of the employer which can easily comply with the requirement through a mere mechanical act. The fact that there were "no impartial members of the unit" is immaterial. The purpose of the requirement is precisely to inform the employees in the bargaining unit of the contents of said agreement so that they could intelligently decide whether to accept the same or not. The assembly of the members of ALU wherein the agreement in question was allegedly explained does not cure the defect. The contract is intended for all employees and not only for the members of the purpoted representative alone. It may even be said that the need to inform the non-members of the terms thereof is more exigent and compelling since, in all likehood, their contact with the persons who are supposed to represent them is limited. Moreover, to repeat, there was an apparent and suspicious hurry in the formulation and finalization of said collective bargaining accord. In the sforementioned letter where respondent company required petitioner union to present proof of its support by the employees, the company already suggested that petitioner ALU at the same time submit the proposals that it intended to embody in the projected agreement. This was on May 12, 1986, and prompltly on thre following day the negoltiation panel; furnish respondent company final copies of the desired agreement whcih, with equal dispatch, was signed on May 15, 1986. -one hundred eighty-one( 181) of the two hundred eighty-one (281) workers who "ratified" the same now " strongly and vehemently deny and/or repudiate the alleged negotiations and ratification of the CBA. " 42 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-... Basic to the contract bar rule is the proposition that the delay of the right to select represen tatives can be justified only where stability is deemed paramount. Excepted from the contract which do not foster industrial stability, such as contracts where the identity of the representative is in doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice because it does nto establish the type of industrial peace contemplated by the law. Disposition. WHEREFORE, the order of the public respondent for the conduct of a certification election among the rank-and-file workers of respondent GAW Trading Inc. is AFFIRMED. The temporary restraining order issued in this case pursuant to the Resolution of March 25, 1987 is hereby lifted. SO ORDERED. CITIZENS LABOR UNION V. CIR (1966) Summary: 2 Unions claim to represent the majority of the employees in ESSO: CLU, which is the existing bargaining representative, and Malayang Manggagawa sa ESSO (MME). CLU and ESSO allegedly entered into renegotiations and extended the CBA so MME filed a motion for preliminary injunction with CIR. Court remanded the case, subject to the finding of which between the two Unions is the representative of the majority of the employees. Relevant Opinion: -This Court in numerous cases has reaffirmed its attitude that it is a sound and unassailable labor practice for labor and management to conclude a new contract before the expiry date of any collective bargaining agreement in order to avoid a hiatus in management-labor relations. The Industrial Peace Act was designed primarily to promote industrial peace through encouragement of collective bargaining. Any undue delay in the selection of a bargaining representative can hardly be said to contribute to that end. -Against the presumption of continued majority status, however, is the rule that such majority status does not continue forever "especially in face of an assertion and offer of proof to the contrary" or "in view of altered circumstances which have likely occurred in the interim" 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" -It would seem then that the burden of coming forward with proof of majority status is upon the union asserting it.

NATIONAL CONGRESS OF UNIONS V. FERRER-CALLEJA (1992) Summary: During the cooling off period in bargaining deadlock between the ER and 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
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for certification election could be filed beyond the 60-day period. Court held that the CBA still exists (Article 253) so contract bar rule still applies. Petition for Certification election or intervention only allowed during the 60 day freedom period prior to the expiration of the CBA. Relevant Opinion: -A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code, as amended by the rules implementing Executive Order No. 111 provides that: Sec. 6. Procedure . . . In a petition involving an organized establishment or enterprise where the majority status of the incumbent collective bargaining union is questioned by a legitimate labor organization, the Med-Arbiter shall immediately order the conduct of a certification election if the petition is filed during the last sixty (60) days of the collective bargaining agreement. Any petition filed before or after the sixty-day freedom period shall be dismissed outright. The sixty-day freedom period based on the original collective bargaining agreement shall not be affected by any amendment, extension or renewal of the collective bargaining agreement for purposes of certification election. -It is a rule in this jurisdiction that only a certified collective bargaining agreement i.e., an agreement duly certified by the BLR may serve as a bar to certification elections. -This rule simply provides that a petition for certification election or a motion for intervention can only be entertained within sixty days prior to the expiry date of an existing collective bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification election during the existence of a collective bargaining agreement except within the freedom period, as it is called, when the said agreement is about to expire. The purpose, obviously, is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good faith and for the stipulated original period.

STANDARD CHARTERED BANK EMPLOYEES UNION V. CONFESSOR (2004) Summary: Union and bank entered into CBA negotiations, with bank sending 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 not compel either party to agree to a proposal or to require the making of a concession. FACTS 43 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

- Standard Chartered Bank is a foreign banking corporation doing business in the Philippines. The exclusive bargaining agent of the rank and file employees of the Bank is the Standard Chartered Bank Employees Union - The Union sought to renegotiate the terms of the CBA and initiated the negotiations. - Through its President, Eddie L. Divinagracia, it sent a letter containing its proposals covering political and economic provisions. - The Bank, took note of the Union s proposals. The Bank attached its counterproposal to the non-economic provisions proposed by the Union. - Before the commencement of the negotiation, the Union, through Divinagracia, suggested to the Bank s Human Resource Manager and head of the negotiating panel, Cielito Diokno, that the bank lawyers should be excluded from the negotiating team. The Bank acceded. - Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the National Union of Bank Employees (NUBE), the federation to which the Union was affiliated, be excluded from the Union s negotiating panel. However, Umali was retained as a member thereof. - The parties met and set the ground rules for the negotiation. Diokno suggested that the negotiation be kept a family affair. - Even during the final reading of the, there were still non-economic provisions on which the Union and the Bank could not agree. Both parties agreed to place the notation DEFERRED/DEADLOCKED. - The negotiation for economic provisions commenced. Except for the provisions on signing bonus and uniforms, the Union and the Bank failed to agree on the remaining economic provisions of the CBA. The Union declared a deadlock and filed a Notice of Strike before the National Conciliation and Mediation Board - The Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the NLRC in Manila alleging that the Union violated its duty to bargain, as it did not bargain in good faith. It contended that the Union demanded sky high economic demands, indicative of blue-sky bargaining. - Then Secretary of Labor and Employment (SOLE) Nieves R. Confesor, assumed jurisdiction over the labor dispute and issued an Order dismissing the Bank and the Union s charges for unfair labor practice - The Union filed a motion for reconsideration with clarification, while the Bank filed a motion for reconsideration. The SOLE issued a Resolution denying the motions. The Union filed a second motion for reconsideration, which was, likewise, denied - The Union filed this petition - The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went through the motions of bargaining without any intent of reaching an agreement, as evident in the Bank s counter-proposals. ISSUE
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WON the SOLE committed grave abuse of discretion amounting to lack of jurisdiction in dismissing the union s charge of unfair labor practice. HELD NO. - Surface bargaining: going through the motions of negotiating without any legal intent to reach an agreement. - The resolution of surface bargaining allegations never presents an easy issue. The 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 party in question, and usually such intent can only be inferred from the totality of the challenged party s conduct both at and away from the bargaining table. It involves the question of whether an employer s conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining. - The minutes of meetings do not show that the Bank had any intention of violating its duty to bargain with the Union. Records show that after the Union sent its proposal to the Bank, the latter replied with a list of its counter-proposals. Thereafter, meetings were set for the settlement of their differences. The minutes of the meetings show that both the Bank and the Union exchanged economic and non-economic proposals and counter-proposals. - The Union has not been able to show that the Bank had done acts, both at and 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. Admittedly, the parties were not able to agree and reached a deadlock. However, it is herein emphasized that the duty to bargain does not compel either party to agree to a proposal or require the making of a concession. Hence, the parties failure to agree did not amount to ULP under Article 248(g) for violation of the duty to bargain. - The inference that respondents did not refuse to bargain collectively with the complaining union because they accepted some of the demands while they refused the others even leaving open other demands for future discussion is correct, especially so when those demands were discussed at a meeting called by respondents themselves precisely in view of the letter sent by the union - The Court also does not agree that the Union is guilty of ULP for engaging in bluesky bargaining or making exaggerated or unreasonable proposals. - The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. The minutes of the meeting show that the Union based its economic proposals on data of rank and file employees and the prevailing economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the Bank in the Asian region. Disposition Resolutions of the SOLE are AFFIRMED. 6. Deadlock 44 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

SMC V. NLRC (1999) Summary: SMB and Union had grievance procedure in CBA. SMB shut down plants, declared 55 positions as redundant. Grievance procedure entered but before completing it, the union filed a notice to strike. The court defined deadlock, but said there was no deadlock in this case because the grievance procedure was not fully exhausted. There is still a board assigned to resolve conflicting views between the parties. Since grievance procedure not yet done, notice of strike was dismissed. Relevant opinion: -Collective Bargaining Deadlock is defined as "the situation between the labor and the management of the company where there is failure in the collective bargaining negotiations resulting in a stalemate" -NO DEADLOCK: Since there is a Board assigned on the third level (Step 3) of the grievancemachinery to resolve the conflicting views of the parties. Instead of asking the Conciliation Board composed of five representatives each from the company and the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed a notice of strike.

DIVINE WORD UNIVERSITY V. SOLE (1992), SUPRA Summary: The Certified Bargaining Representative initially offered its proposed CBA terms but unilaterally withdrawn it. After 3 years, it again offered to negotiate but was ignored by the ER. They filed a notice to strike, the dispute was assumed by the SOLE, the parties entered into an agreement that they would negotiate but an hour before that, a petition for certification election was filed by the ER. Court upheld the decision of SOLE that the certification election should not be held, not because there was a deadlock because there was really none, but because of the bad faith on the part of the ER. The court also upheld the unilateral imposition of the CBA terms to the ER due to the fault of the ER. Note that there was no preexisting CBA here. Sir said that in Kiok Loy and in Divine Word, the ER closed. Relevant Opinion: -A deadlock is defined as the counteraction of things producing entire stoppage: a state of inaction or of neutralization caused by the opposition of persons or of factions (as in government or a voting body): standstill. There is a deadlock when there is a complete blocking or stoppage resulting from the action of equal and opposed forces; as, the deadlock of a jury or legislature. The word is synonymous with the word impasse which, within the meaning of the American federal labor laws, presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the parties. -HERE: No deadlock so legally, can still grant petition for certification election: NO "REASONABLE EFFORT AND GOOD FAITH BARGAINING. Its indifferent attitude
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towards collective bargaining inevitably resulted in the failure of the parties to arrive at an agreement. As it was evident that unilateral moves were being undertaken only by the DWUEU-ALU, there was no counteraction of forces or an impasse to speak of. While collective bargaining should be initiated by the union, there is a corresponding responsibility on the part of the employer to respond in some manner to such acts.

SAMAHAN SA TOP FORM V. NLRC Summary: During the CBA negotiations, provision mandating across the board implementation of wage order was not included in the CBA, with the ER promising to incorporate it. When the wage order was issued, the employer refused to accede to the union s demand because it was not included in the CBA. The court held that only the provisions in the CBA should be liberally interpreted and complied with. Nothing considered final until the parties reached an agreement. No bad faith bargaining. The fact that CBA was entered disproves this. The ER can insist on a position to the point of stalemate. Relevant Opinion: -To start with, if there was indeed a promise or undertaking on the part of private 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 under the law to compel private respondent to incorporate this specific economic 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 agreements if requested by either party." Petitioner union's assertion that it had insisted on the incorporation of the same proposal may have a factual basis considering the allegations in the aforementioned joint affidavit of its members. 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 not validly claim that the proposal embodied in the Minutes of the negotiation forms part of the CBA that it finally entered into with private respondent. -The CBA is the law between the contracting parties the collective bargaining representative and the employer-company. Compliance with a CBA is mandated by the expressed policy to give protection to labor. In the same vein, CBA provisions should be "construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve." This is founded on the dictum that a CBA is not an ordinary contract but one impressed with public interest. It goes without saying, however, that only provisions embodied in the CBA should be so interpreted and complied with. Where a proposal raised by 45 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

a contracting party does not find print in the CBA, it is not a part thereof and the proponent has no claim whatsoever to its implementation. -The Minutes reflects the proceedings and discussions undertaken in the process of bargaining for worker benefits in the same way that the minutes of court proceedings show what transpired therein. At the negotiations, it is but natural for 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 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 respondent promised to continue with the practice of granting across-the-board salary increases ordered by the government, such promise could only be demandable in law if incorporated in the CBA. -NO BF: by making such promise, private respondent may not be considered in bad faith or at the very least, resorting to the scheme of feigning to undertake the negotiation proceedings through empty promises. As earlier stated, petitioner union had, under the law, the right and the opportunity to insist on 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 promise has remained just that, a promise, the implementation of which cannot be validly demanded under the law. SMC V. NLRC (2003) Summary: OLA effective July 1, 1989-June 30, 1992. In 1991, while renegotiating union insisted that new CBA should be effective for 2 years while SMC argued it should be for 3. H: The CBA provisions which are other than representation issues should be renegotiated within 3 years but law does not provide for a time period within which the other terms of the CBA should be effective.

CBA PROPER Definition of CBA: Rule I, Book V, Sec 1 (jj), IRR of LCC CBA: refers to the CONTRACT between a legitimate labor union And the employer concerning wages Hours of work And all other terms and conditions of employment In the bargaining unit
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Substandard CBA: Art 239(f): Grounds for cancellation of Union Registration entering into a CBA Which provide terms and conditions of employment Below minimum standards established by law Duration and re-negotiation ARTICLE 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such fiveyear term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the Collective Bargaining Agreement, the parties may exercise their rights under this Code. (As amended by Section 21, Republic Act No. 6715, March 21, 1989).

RIVERA V. ESPIRITU F: PAL & PALEA agreed to suspend the CBA negotiations for 10 years (on the threat of PAL that it would close down, and for fear of the employees that they would lose their job). Now some employees are contesting the suspension, arguing that it violates the right of the employees to negotiate terms of their agreement, that it made PALEA a company union H: Court upheld the suspension (but note that the Court made it appear that it was the choice of the union to suspend the negotiations) NEW PACIFIC TIMBER V. NLRC F: The ER refused to negotiate the CBA with the exclusive bargaining representative. The ER was charged of ULP, and the LA adopted the proposed CBA by the Union as 46 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

the CBA that would govern between the EE-ER. New employees were hired by the ER and these new employees were arguing that the CBA should also apply to them 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. H: Based on Art 253, until a new Collective Bargaining Agreement has been executed by and between the parties, they are duty-bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement. The law does not provide for any exception nor qualification as to which of the economic provisions of the existing agreement are to retain force and effect, therefore, it must be understood as encompassing all the terms and conditions in the said agreement. -HERE: No new agreement was entered into by the ER and the Union. -Union of Filipino Employees vs. NLRC, 192 SCRA 414 (1990): the Court had occasion to rule that Article 253 and 253-A mandate the parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the expiration of the old CBA and/or until a new agreement is reached by the parties. Consequently, the automatic renewal clause provided for by the law, which is deemed incorporated in all CBA's, provides the reason why the new CBA can only be given a prospective effect -Lopez Sugar Corporation vs. Federation of Free Workers, et. al: although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. It is the duty of both parties to the CBA to keep the status quo, and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. 20 To rule otherwise, i.e., that the economic provisions of the existing CBA in the instant case ceased to have force and effect in the year 1984 would be to create a gap during which no agreement would govern, from the time the old contract expired to the time a new agreement shall have been entered into. -ON WON THE BENEFITS FROM THE CBA APPLIES TO NEW EMPLOYEES? YES. when a collective bargaining contract is entered into by the union representing the employees and the employer, even the non-member employees are entitled to the benefits of the contract. To accord its benefits only to members of the union without any valid reason would constitute undue discrimination against nonmembers.

INTERPHIL LABORATORIES EMPLOYEES UNION V. INTERPHIL LABORATORIES F: ER refused to renegotiate with theUnion the CBA (because there are still a few months left before renegotiations are scheduled to be entered). The Union asked the ER again to renegotiate but still, the HR head refused to do so saying it was still
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early. The EEs resorted to a work slowdown, they undertook a boycott of work schedule, arguing that the 2-shift schedule was not in the CBA (note however that the employees have been complying with the 2-shift schedule and they were paid overtime pay) H: the union cannot invoke that since the2-shift work schedule is not in the CBA so they are not compelled to follow it, it being that they have been observing it as company practice 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 premises of the employer but not doing job for the employer

Likewise, the terms and conditions of employment (economic and non-economic) can not be questioned by the employers or employees during the period of effectivity of the CBA. The CBA is a contract between the parties and the parties must respect the terms and conditions of the agreement. Notably, the framers of the law did not give a fixed term as to the effectivity of the terms and conditions of employment. It can be gleaned from their discussions that it was left to the parties to fix the period. -HERE: the previous CBAs between ER-EE had lasted for 3 years

GRIEVANCE PROCEDURE NAVARRO V. DAMASCO (1995) F:Navrro was preventively suspended -then dismissed from service for having violated the Conduct and Behavior provisions of the Code of Employee Discipline -Union and Navarro agreed to submit the case to voluntary arbitration (instead of arguing that the grievance procedure be resorted to) raised as an issue WON the grievance procedure in the CBA was followed -VA: dismissed Navarro from employment; ER did not violate the provisions of the grievance procedure under the CBA WON THE GRIEVANCE PROCEDURE IN THE CBA WAS FOLLOWED: HELD -the Grievance Machinery in the CBA may be availed of as regards the following: "any ruling, practice or working conditions in the Company, or any dispute arising as to the meaning, application or claim of violation of any provision of this Agreement or any complaint that any employee may have against the COMPANY shall constitute a grievance " HERE: SC held that this is not a grievance: The instant case is not a grievance that must be submitted to the grievance machinery. What are subject of the grievance procedure for adjustment and resolution are grievances arising from the interpretation or implementation of the collective bargaining agreement (Labor Code of the Philippines, as amended by R.A. No. 6715, Art. 260). -the acts of petitioner, violating the Code of Employee Discipline, cannot be invoked to resort to the CBA (court citing Auxilio Jr v. NLRC (1990)) -Navarro voluntarily submitted to the jurisdiction of the Voluntary Arbitrator, and has not questioned his jurisdiction. Even submitted additional documentary evidence and was present during the initial conference
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SMC EMPLOYEES UNION V. CONFESSOR (1996) F: The CBA effective July 1, 1989-June 30, 1992. In 1991, While renegotiating, Union insisted that the new CBA should be coterminous with the Union s term thus only for 2 years. The ER (SMC) insisted that the terms of the economic provisions of the CBA should be effective for 3 years. H: Should be 3 years, in accordance with the Herrera-Veloso Law providing for Art 253-A. -Article 253-A is a new provision. This was incorporated by Section 21 of Republic 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, 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 after its execution. The "representation aspect" refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining unit concerned. "All other provisions" simply refers to the rest of the CBA, economic as well as non-economic provisions, except representation. -As the Secretary of Labor herself observed in the instant case, the law is clear and definite on the duration of the CBA insofar as the representation aspect is concerned, but is quite ambiguous with the terms of the other provisions of the CBA. It is a cardinal principle of statutory construction that the Court must ascertain 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 law should be considered to determine the legislative intent. - the framers of the law wanted to maintain industrial peace and stability by having both management and labor work harmoniously together without any disturbance. Thus, no outside union can enter the establishment within five (5) years and challenge the status of the incumbent union as the exclusive bargaining agent. 47 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-ON THE ISSUE OF WON HE WAS DENIED DUE PROCESS BECAUSE HE WAS NOT ACCORDED AN OPPORTUNITY TO CROSS EXAMINE THE WITNESS AGAINSTH HIM: No violation of due process. A formal or trial-type hearing is not at all times and in all instances essential. The requirements are satisfied where the parties are fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack of notice and hearing. . . . -also, the parties have agreed that position papers be submitted instead of undergoing examination of witnesses -ON ALLEGATION THAT THE QUARREL WAS P[URELY A PRIVATE AFFAIR Incident happened w/n company premises, i.e. The ladies dormitory located inside the plant site Both of them were employees of the ER

REPUBLIC SAVINGS BANK V. CIR (1967) F: Employees wrote to the President of the bank demanding his resignation, on the grounds of immorality, nepotism in the appointment and favoritism as well as discrimination in the promotion of bank employees. -the said letter was also given to the Chairman of the BOD + Governor of the Central Bank -the bank dismissed the said employees (officers of various Unions in the bank) " for having written and published "a patently libelous letter . . . tending to cause the dishonor, discredit or contempt not only of officers and employees of this bank, but also of your employer, the bank itself."" -Employees filed a complaint in the CIR, alleging that the bank violated the industrial Peace Act (ULP for an employer "to dismiss, discharge or otherwise prejudice or discriminate against an employee for having filed charges or for having given or being about to give testimony under this Act.") -Bank moved to dismiss: employees discharged not for Union activities but for having written and published a libelous letter against the bank president -CIR: denied MTD: an employee is dismissed or discriminated against for having filed "any charges against his employer" (based on the Royal Interocean Case) The Royal Interocean Case was overruled by the SC in saying that the charge must be related to the EE's right to self-organization in order to give rise to ULP ... Pursuant to this, Bank renewed its MTD - court held the motion in abeyance CIR: BANK GUILTY OF ULP, ORDERED REINSTATEMENT OF EMPLOYEES W/ FULL BACK WAGES CIR en banc: affirmed -so this appeal on the ground that the employees were not dismissed in connection with their union activities but due to their "individual" acts 48 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

WON THE EMPLOYEES WERE DISMISSED DUE TO THEIR UNION ACTIVITIES? HELD: indirectly, it related to their union activiites (because they acted in a CONCERTED MANNER) -"Assuming that the latter acted in their individual capacities when they wrote the letter-charge they were nonetheless protected for they were engaged in concerted activity, in the exercise of their right of self-organization that includes concerted activity for mutual aid and protection,5interference with which constitutes an unfair labor practice under section 4(a)(1). This is the view of some members of thisCourt. For, as has been aptly stated, the joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is a 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: 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 employees were discharged for their activities. -Court held that the company was liable for ULP: "the employees shall have the right to engage in concerted activities for their mutual aid or protection even though no union activity be involved, for collective bargaining be contemplated." - Some other members of this Court believe, without necessarily expressing approval of the way the respondents expressed their grievances, that what the Bank should have done was to refer the letter-charge to the grievance committee. This was its duty, failing which it committed an unfair labor practice under section 4(a) (6). For collective bargaining does not end with the execution of an agreement. It is a continuous process. The duty to bargain imposes 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 adjusting any grievances or question arising under such agreement"8 and a violation of this obligation is, by section 4 (a) (6) and (b) (3) an unfair labor practice.9 -AS TO ARGUMENT OF THE BANK THAT IT WAS MERELY EXERCISING ITS RIGHT TO DISCIPLINE EMPLOYEES: The Industrial Peace Act does not touch the normal exercise of the right of an employer to select his employees or to discharge them. It is directed solely against the abuse of that right by interfering with the countervailing right of self-organization. But the difficulty arises in determining whether in fact the discharges are made because of such a separable cause or because of some other activities engaged in by employees for the purpose of collective bargaining. -RE: ROYAL INTEROCEAN RULING: in Interocean, the employee wrote a letter complaining of the local manager's inconsiderate and untactful attitude (which the court later found to have nothing to do with or did not arise from her union activities)
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-RE LAKAS NG PAGKAKAISA CASE: union wrote a letter to the mother company denouncing the wastage of company funds - which was contrary to the local company's rule -HERE: dismissal of the employees was made on account of a letter they had written, demanding the resignation of the bank president for a number of reason TOUCHING LABOR-MANAGEMENT RELATIONS...reasons which not even the Bank's judgment that the respondents had committed libel could excuse it for making summary discharges in disregard of its duty to bargain collectively. SO DIFFERENCE WITH NAVARRO V. DAMASCO: here, the act complained of concerned labor-management relations, as opposed to the Navarro case wherein the dispute was between co-employees and the management was only dragged into the issue when the management, in accordance with its rules of conduct, adjudged the petitioner to be guilty of violating its rules of conduct and dismissed him. So in short, the different lies in the root of the problem and what relationship was involved: Republic bank Navarro Employees vs. Management, Employee vs. Employee, dismissed the management dismissed the employees erring employee

CONTRACT ADMINISTRATION DAVAO INTEGRATED PORT STEVEDORING SERVICES V. ABARQUEZ F: CBA provided sick leave with pay to its regular employees . The said provision was extended to its workpool employees, which can be converted to cash if unused. New management discontinued the said benefit as to workpool employees, arguing that there was merely error in payment. H: CBA not merely contractual but is imbued with public interest. Reasonable interpretation. Fixed sick leave not applicable to intermittent employees. -While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve.

-It must be noted that the 1989 CBA has two (2) sections on sick leave with pay benefits which apply to two (2) distinct classes of workers in petitioner's company, namely: (1) the regular non-intermittent workers or those workers who render a daily eighthour service to the company and are governed by Section 1, Article VIII of the 1989 CBA; and (2) intermittent field workers who are members of the regular labor pool and the present regular extra labor pool as of the signing of the agreement on April 15, 1989 or those workers who have irregular working days and are governed by Section 3, Article VIII of the 1989 CBA. -It is not disputed that both classes of workers are entitled to sick leave with pay benefits provided they comply with the conditions set forth under Section 1 in relation to the last paragraph of Section 3, to wit: (1) the employee-applicant must be regular or must have rendered at least one year of service with the company; and (2) the application must be accompanied by a certification from a companydesignated physician. -NATURE OF SICK LEAVES: Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and vacation leave benefits, among 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 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. -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 15day sick leave with pay which, as mandated by Section 1, only the non-intermittent workers are entitled to. This fixed 15-day sick leave with pay benefit should be distinguished from the variable number of days of sick leave, not to exceed 15 days, extended to intermittent workers under Section 3 depending on the number of hours of service rendered to the company, including overtime pursuant to the schedule provided therein. It is only fair and reasonable for petitioner-company not to stipulate a fixed 15-day sick leave with pay for its regular intermittent workers since, as the term "intermittent" implies, there is irregularity in their 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 than fail. *note: NCC not resorted to in interpreting the CBA KIMBERLY CLARK PHIL. V. LORREDO

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F: CBA provided that retiring employees may recommend their children or, in default, relatives w/n the 3rd degree as replacements. Here, Danilo Guerrero voluntarily resigned, naming his nephew as his replacement. However, KCPI refused to accept such recommendation, arguing that Guerrero had 3 children. These 3 children, however, were still minors (the eldest is 10 y.o.) so Guerrero and the union argued that he could validly recommend his nephew instead. The interpretation of the said provision was not agreed upon by the parties, and after exhausting the grievance procedure, they agreed to be subjected to voluntary arbitration. VA: ER already complied with the CBA provision before, hiring relatives within the 3rd degree of retiring employees. Has already hired before so cannot object now with Guerrero s recommendation? -MR denied. H: A collective bargaining agreement, just like any other contract, is respected as the law between the contracting parties and compliance therewith in good faith is mandated. Similarly, the rules embodied in the Civil Code on the proper interpretation of contracts can very well govern. The intention of the parties is primodial; if the terms of the contract are clear, the literal meaning of the stipulations shall control, but if the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. -ON IN DEFAULT THEREOF : the phrase "in default thereof" has not been intended or contemplated by the parties as having a preclusive effect within the group. It simply sets a priority on who can possibly be recommendees for employment. The employee, in fine, need not be childless at all for him to be allowed to nominate a third degree collateral relative; otherwise, his ability to designate such relative is all but suddenly lost by the birth of an only child and regained by the latter's demise. This situation could not have been intended. -note this however: We take note, furthermore, that KCPI is not obligated to unconditionally accept the recommendee since the latter must still meet the required employment standards theretofore set by it. And even when the recommendee is qualified, he, nonetheless, shall be hired only, pursuant to the agreement, on a "probationary status," an added measure, we assume, to further prove his worth for eventual regular employment. The company is not, therefore, left without its own safeguards under the agreement.

UNITED KIMB ERLY-CLARK EMPLOYEES UNION V. KIMBERLY-CLARK PHILIPPINES INC. (2006) *PART TWO!*

F: In the light of the ruling in KCPI v. Lorredo, KCPI adapted in Nov. 1995 Guidelines on Hiring and Replacement, improving the educational attainment required of its employees from HS graduate to that of at least: y Graduate of a 2-year vocational course y 3 years of colleged education -union asked for deferment of the Guidelines in lieu of the coming renegotiations of the CBA. CKPI agreed to postpone until January 1, 1997, unless it would be revoked or amended in the 1997 CBA of the company -CBA negotiations entered. Provision for replacement of retirees maintained intact. Guidelines not revoked nor included in the CBA. -KCPI was alleged to still accept recommendees up to 1998 (which amounted to 44 recommendees) -in second half of 1998, it stopped hiring recommedees (actually stopped applying the CBA altogether), arguing Asian Financial Crisis and Freeze-Hiring Policy of the Asia-Pacific Headquarters -since the Union and the ER failed to settle in the grievance procedure, they agreed to resort to NCMB for arbitration. Meanwhile, a new CBA was entered into by the parties, still including the provision for recommedees. -Union alleged that it was company practice for the company to hire retirees, even if they were merely high school graduates. Thus, it cannot be unilaterally withdrawn by the company. Further, it alleged that even with the alleged freeze-hiring policy, the ER continued to hire casuals who were high school graduates. -Company however argued that it was within its management prerogative to impose guidelines on who to hire and that the said recommendees were for regular positions, unlike those casuals hired by the company who were mere high school graduates. It further alleged that the union did not do anything even after the applicability of the 1997 Guidelines so they are stopped from assailing it. VA: for the union -can t unilaterally withdraw existing employment benefits -literal interpretation of CBA, in case of doubt, interpret in favor of labor -relied on the continuous hiring of 400 casuals who more or less were hs graduates and who performed work of regular employees CA: partially set aside VA decision (agreed that KCPI cannot unilaterally suspend the application of the CBA based on economic distress. But agreed with KCPI that it was within its management prerogative to adopt hiring guidelines in accordance with the earlier SC Decision. H: If CBA is vague as to hiring qualifications, the VA may resort to evidence extrinsic 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 which the draftsmen cannot wholly anticipate. It covers the whole employment relationship and prescribes the rights and duties of the parties. It is a system of industrial self-government with the grievance machinery at the very heart of the system. The parties solve their problems by molding a system of private law for all
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the problems which may arise and to provide for their solution in a way which will generally accord with the variant needs and desires of the parties. -If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. However, if, in a CBA, the parties stipulate that the hirees must be presumed of employment qualification standards but fail to state such qualification standards in said CBA, the VA may resort to evidence extrinsic of the CBA to determine the full agreement 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 rely on the cold and cryptic words on the face of the CBA but is mandated to discover the intention of the parties. Recognizing the inability of the parties to anticipate or address all future problems, gaps may be left to be filled in by reference to the practices of the industry, and the step which is equally a part of the CBA although not expressed in it. In order to ascertain the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. The VA may also consider and rely upon negotiating and contractual history of the parties, evidence of past practices interpreting ambiguous provisions. The VA has to examine such practices to determine the scope of their agreement, as where the provision of the CBA has been loosely formulated. Moreover, the CBA must be construed liberally rather than narrowly and technically and the Court must place a practical and realistic construction upon it. -In the present case, the parties are in agreement that, on its face, Article XX, Section 1 of their 1997 CBA does not contain any provision relative to the employment qualification standards of recommendees of retired/resigned, deceased or disabled employees of respondent who are members of petitioner. However, in determining the employment qualification standards for said recommendees, the VA should have relied on the November 7, 1995 Guidelines issued by respondent. -here, the Union proposed the inclusion of the minimum qualification that the recommendees be at least high school graduates. This was not agreed upon by KCPI, so it was not made a part of the CBA -however, even before the renegotiation of the CBA, there was an existing guideline the 1997 Guidelines on Hiring of Replacements, which was merely deferred by the ER, to be subject to what the new CBA may contain. As the guidelines were not amended or revoked in the adapted CBA, and the Union has not contested its application afterwards, KCPI can now enforce it! Manalang v. Artex F: Manalang et al union entered into a CBA with a closed shop provision. Manalang and others formed another union so they were terminated. They now assail the provision of the closed-shop, saying they were not aware of its existence. -more specific: Manalang et al. formed Federation of Free Workers and informed the company that a great majority of the company s employees had joined them, 51 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

and thus offered proposals for CBA. Company said it had nothing against FFW but informed the latter that the company already recognized BBLU (Bagong Buhay Labor Union) as its exclusive bargaining representative, and has already executed 2 CBAs with the latter union. FFW asked for copies of the CBA but Company did not honor request. FFW then resorted to Regional Office of the Conciliation office but company still did not reply. -BBLU meanwhile had a meeting with regards Manalang et al s joining FFW without first resigning from the Union, thus were charged with disloyalty with the union and were dismissed as members of good standing from the union. -Also pursuant to the existing CBA, BBLU informed the company that Manalang, et al were no longer members in good standing of the union, thus, merit their dismissal.al. -having in mind the closed shop rovision of the CBA, the Corporation individually wrote to the petitioners informing them of their termination. Manalang et al filed ULP case against the ER and BBLU for union busting -BBLU s answer: were dismissed from the union for disloyalty -ER: only followed CBA on closed shop provision CIR: FFW was not aware of the existing CBA, much more of the closed shop provision in it CIR en banc: ER was not guilty of ULP because it was BBLU s duty, not the ER s, to inform its members of the contents of the CBA. If FFW would want to sue, it should sue the BBLU H: FFW members were not unaware of the CBA provision, much more of the closed shop provision: y They tried to persuade other employees to join their union so the court presumed that they also knew of the existing CBA between BBLU and the ER, and its fundamental provisions which affect them individually, personally and directly y They must have studied the existing CBA between the ER and BBLU to come up with CBA proposals to the company -before these employees were dismissed from the Union, the Union first conducted an investigation. The disavowal from FFW was merely an afterthought -ON VALIDITY OF CLOSED-SHOP Provisions: already upheld in numerous rulings -IF EVER UNAWARE OF THE CLOSED SHOP PROVISION: since their membership in the BBLU prior to their expulsion therefrom is undenied, there can be no question that as long as the agreement with closed-shop provision was in force, they were bound by it. Neither their ignorance of, nor their dissatisfaction with, its terms and conditions would justify breach thereof or the formation by them of a union of their own. As has been aptly said, "a collective bargaining agreement entered into by officers of a union, as agent of the members, and an employer, gives rise to valid enforcible contractual relations, against the individual union members in matters that affect them peculiarly, and against the union in matters that affect the entire membership or large classes of its members," and "a union member who is
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employed under an agreement between the union and his employer is bound by the provisions thereof, since it is a joint and several contract of the members of the union entered into by the union as their agent. TSPIC CORP V. TSPIC UNION F: CBA provided for Wage increases and regularization pay subject to crediting clause -TSPIC entered CBA w/ TSPIC union providing salary and wage increases. It also granted regularization increases. However, the said provisions included a crediting clause wherein the wage increases for 2001 and 2002 were deemed compliance of future WOs after Wage Order 7 and are considered as correction of any wage distortions -ER paid respondents salary increases and wage increase in accordance with Wage Order 8 (which should have been considered complied with by the CBA) -ER wanted to be reimbursed by the employees whatever wage increase it has granted aside from that in the CBA (wanted the crediting provision/clause to be applied) so informed the employees that amounts would be deducted from their salaries -Union contended that the reimbursement is a diminution of pay so they resorted to grievance machinery. Still no resolution so went to VA VA: for the Union: unilateral deduction made by the ER violates Art 100.MR DENIED CA: affirmed VA. Some of the employees were still probationary employees when WO 8 was issued. Thus, when they were regularized, they were separately entitled to the regularization increases. H: Considering that the parties have unequivocally agreed to substitute the benefits granted under the CBA with those granted under wage orders, the agreement must prevail and be given full effect. -NATURE OF CBA: A collective bargaining agreement or CBA refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit. As in all contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the express policy of the law -Moreover, if the terms of a contract, as in a CBA, are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of their stipulations shall control. However, sometimes, as in this case, though the provisions of the CBA seem clear and unambiguous, the parties sometimes arrive at conflicting interpretations. - As a general rule, in the interpretation of a contract, the intention of the parties is to be pursued. Littera necat spiritus vivificat. An instrument must be interpreted 52 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

according to the intention of the parties. It is the duty of the courts to place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and the purpose which it is intended to serve. Absurd and illogical interpretations should also be avoided. -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. -GENERAL v. SPECIFIC PROVISIONS: It is a familiar rule in interpretation of contracts that conflicting provisions should be harmonized to give effect to all. Likewise, when general and specific provisions are inconsistent, the specific provision shall be paramount to and govern the general provision. HERE: GENERAL PROVISION: Paragraph (b) of Sec. 1 of Art. X of the CBA: effective January 1, 2001, all employees on regular status and within the bargaining unit on or before said date shall be granted a salary increase equivalent to twelve (12%) of their basic monthly salary as of December 31, 2000. The 12% salary increase is granted to all employees who (1) are regular employees and (2) are within the bargaining unit. SPECIFIC PROVISION: last paragraph: the wage/salary increases for the years 2001 and 2002 shall be deemed inclusive of the mandated minimum wage increases under future wage orders, that may be issued after WO No. 7, and shall be considered as correction of the wage distortions that may be brought about by the said future wage orders. Thus, the wage/salary increases in 2001 and 2002 shall be deemed as compliance to future wage orders after WO No. 7. INTERPRETATION: it may be reasonably concluded that TSPIC granted the salary increases under the condition that any wage order that may be subsequently issued shall be credited against the previously granted increase. The intention of the parties is clear: As long as an employee is qualified to receive the 12% increase in salary, the employee shall be granted the increase; and as long as an employee is granted the 12% increase, the amount shall be credited against any wage order issued after WO No. 7. -ON ARGUMENT THAT THERE WAS DIMINUTION OF BENEFITS: Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the employees. There is diminution of benefits when it is shown that: (1) the grant or benefit is founded on a policy or has ripened into a practice over a long period; (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. -HERE: the overpayment of its employees was a result of an error. This error was immediately rectified by TSPIC upon its discovery. We have ruled before that an erroneously granted benefit may be withdrawn without violating the prohibition against non-diminution of benefits.
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BOBCOCK V. UNION (2005) F: CBA provided a RELOCATION ALLOWANCE of P1500 for employees transferred from Makati-Bauan, Batangas and vise-versa. The employees who were residents of Bauan but were assigned in Makati were transferred to Bauan with the transfer of the Design Department. They are now claiming the said RELOCATION allowance provided in the CBA. -ER refused to give the RELOCATION ALLOWANCE, arguing that since they were already residents of the place where they were re-assinged, they were not entitled to Relocation allowance (bottomline: ER was arguing that the relocation allowance was intended for those who had to travel far because of the relocation of their jobs) IN ACCORDANCE WITH THE POLICY STATEMENT ISSUED BY THE EMPLOYER (dated 1996) -Union members filed complaint for payment of Relocation allowance in NCMB. Parties agreed to submit dispute to VA VA: ER pay EEs relocation allowance; MR denied CA: Affirm VA: interpret LC and CBA ifo of labor. Policy statement not anymore applicable with the adoption of the 1997 CBA. CBA provision is clear and does not provide any qualification. MR Denied H: any doubt or ambiguity in the contract between management and the union members should be resolved in favor of the latter. This is pursuant to Article 1702 of the Civil Code which provides: (I)n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. -the "doubtful" provisions: Section 1. The COMPANY shall provide a relocation allowance of ONE THOUSAND EIGHT HUNDRED PESOS (1,800.00) per month for employees who will be transferred from Bauan to Makati. For employees who will be transferred from Makati to Bauan, the relocation assistance shall be ONE THOUSAND FIVE HUNDRED PESOS (1,500.00). Section 2. Employees can avail this provision provided their transfer is on a permanent basis or for a duration exceeding one (1) month. -INTERPRETING THE PROVISIONS: Such provisions need no interpretation for they are clear. Contracts which are not ambiguous are to be interpreted according to their literal meaning and not beyond their obvious intendment.

However, an individual employee or group of employees shall have the right at any time to present grievances to their employer. Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989). ARTICLE 260. Grievance machinery and voluntary arbitration. The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or 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 Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above.

GRIEVANCE SETTLEMENT AND ISSUES ARTICLE 255. Exclusive bargaining representation and workers participation in policy and decision-making. The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. 53 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

CALTEX REFINERY V. BRILLANTES -renegotiation of CBA entered into by the Union, participated in by NCMB and SOLE. Some items of the new CBA were already agreed upon except for some issues. These issues were not settled, resulting into a deadlock. -9 conciliatory meetings were conducted by the NCMB, but all efforts to settle failed.
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-Union filed notice to strike. During strike vote, employees voted for a walkout. Caltex then filed for SOLE s assumption of jurisdiction. -SOLE assumed jurisdiction, enjoining any lockout, strike, actual or intended and that the parties cease and desist from any act which might exacerbate the situation -still, union held strike. Return to work orders issued. DOLE Undersecretatry Laguesma intervened, was able to convince the striking employees to return to work and MOA entered into between the parties. But as a result of the strike, some employees were terminated. Unable to resolve problems, they referred the dispute to SOLE -SOLE rendered decision directing the parties to enter into a new CBA wherein existing benefits were to be maintained and the new demands not modified or improved were denied. MR denied. Another MR Denied. -apparently, SOLE made decisions on the following issues: wage increase union security clause retirement benefits or application of the new retirement plan signing bonus grievance and arbitration machineries H: 1. ON CERTIORARI IN LABOR CASES: -factual findings of QJA, if substantial evidence backs it, should be accorded with finality and respect -substantial evidence: such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion -FLORES v. NLRC: can t file R65 if just to correct evaluation of NLRC of evidence and factual findings 2. ON WAGE INCREASE SOLE: granted 3 wage increases: 14%, 14% and 13% a) INFLATION Argument: not 11-8% but only 7.496% b) Financial capacity: union based Caltex s financial capacity on the Banaba Housing Facility -this facility was built for employees required to stay because they were members of the emergency response organization of the corporation. The said facility is dilapidated, etc -upgrading should be evaluated as a business judgment 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 the rest. Sound compensation principle of higher productivity equals higher pay, as well as, recent developments in the industry have negated this argument. Both Shell and Petron continue to benefit from increasing manpower productivity. Shell, for instance, produces 155,000 barrels per day on a 120 manpower complement of operatives and rank and file; while the Company only produces 65,000 barrels per 54 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

day with its 221 manpower complement. In addition, the counterpart union at Shell incurs an average overtime rate of 37%, as a percentage of base pay; the Union s overtime rate is 102%. Thus, the issue is productivity, not sales, and so far, the Company s Refinery is not as productive as Shell s or Petron s. To ask for relative parity in the face of this reality is not only unreasonable, it is likewise illogical. -as it is, the wage increase is illogical. It amounts to the basic salary of P23,510 while the average monthly salary should just be P16, 010. d) there is no showing that Caltex and Shell are similar in substantial aspects, so the Union should not use Shell as its yardstick 3. UNION SECURITY CLAUSE -the Union argues that inspite of the union security clause, the proposed CBA by Caltex would only lead to the dismissal of the employee from the company (even if not a member in good standing anymore) if based on the following grounds: nonpayment of dues, subversion, or conviction for a crime involving moral turpitude -Caltex however argued that it does not limit the Union from disciplining its members but termination of employment should be based merely on those three grounds. -SOLE did not rule on the issue, arguing it was procedural. H: The disagreement between petitioner and private respondent on the union security clause should have been definitively resolved by public respondent. The labor secretary should take cognizance of an issue which is not merely incidental to but essentially involved in the labor dispute itself, or which is otherwise submitted to him for resolution.xxx The secretary of labor assumed jurisdiction over this labor dispute in an industry indispensable to national interest, precisely to settle once and for all the disputes over which he has jurisdiction at his level. In not performing his duty, the secretary of labor committed a grave abuse of discretion. 4. ON THE NEW RETIREMENT PLAN -Caltex offered its employees a choice of whether to avail of the old or new retirement plan. However, 40 employees did not express their choice, and were thus held to have chosen the old retirement plan. -Union now argues that the said 40 employees should be given a chance to choose or option to choose the new retirement plan H: 40 employees are deemed to have chosen the old retirement plan, as held by SOLE -Although the union has every right to represent its members in the negotiation regarding the terms and conditions of their employment, it cannot negate their wishes on matters which are purely personal and individual to them. In this case, the forty employees freely opted to be covered by the Old Plan; their decision should be respected. The company gave them every opportunity to choose, and they
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voluntarily exercised their choice. The union cannot pretend to know better; it cannot impose its will on them. 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 to 7 days) and to remove the establishment of a joint council and deem that grievance not automatically settled within 7 days by the VP be automatically referred to voluntary arbitration, with only 1 arbitrator handling the case. -Union contested the removal of the grievance council H: No particular setup for a grievance machinery is mandated by law. Rather, Article 260 of the Labor Code, as incorporated by RA 6715, provides for only a single grievance machinery in the company to settle problems arising from interpretation or implementation of their collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies. -the procedure described by public respondent sufficiently complies with the minimum requirement of the law. Public respondent even provided for two steps in hearing grievances prior to their referral to arbitration. The parties will decide on the number of arbitrators who may hear a dispute only when the need for it arises. Even the law itself does not specify the number of arbitrators. Their alternatives whether to have one or three arbitrators have their respective advantages and disadvantages. In this matter, cost is not the only consideration; full deliberation on the issues is another, and it is best accomplished in a hearing conducted by three arbitrators. In effect, the parties are afforded the latitude to decide for themselves the composition of the grievance machinery as they find appropriate to a particular situation. At bottom, we cannot really impute grave abuse of discretion to public respondent on this issue. 6. SIGNING BONUS -SOLE held that the signing bonus was not covered by existing benefits which were to be maintained in the new CBA, the award for a signing bonus should partake the nature of an incentive and premium for peaceful negotiations and amicable resolution of disputes which apparently are not present in the instant case. -Union argues that it is an existing benefit which should be maintained. Caltex disagreed, saying that the signing bonus is not awarded when the CBA negotiations results into a strike H: A signing bonus is not a benefit which may be demanded under the law. Rather, it is now claimed by petitioner under the principle of maintenance of existing benefits of the old CBA. However, as clearly explained by private respondent, a signing bonus may not be demanded as a matter of right. If it is not agreed upon by the parties or unilaterally offered as an additional incentive by private respondent, 55 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

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.

MASTER IRON V. NLRC (1993) F: The Union and ER entered into a CBA which contains a no strike clause (That there shall be no strike and no lockout, stoppage or shutdown of work, or any other interference with any of the operation of the COMPANY during the term of this AGREEMENT, unless allowed and permitted by law) and which provided that Service allowance be given to employees who work outside its plant. -however, after entering the CBA, the employer hired outside (casual) workers to do the work outside the plant (work which were previously done by regular workers, resulting to financial losses to the regular employees of the company) -Union requested implementation of the grievance procedure under the CBA but the Employer ignored the request. -the Union president even insisted in doing job which he previously performed but was assigned to a casual employee. He was reprimanded for insubordination, was suspended for 3 days. He requested that conciliation conferences be held but was still ignored. -Union then filed a notice to strike based on: (1) violation of CBA; (2) discrimination; (3) unreasonable suspension of union officials; and (4) unreasonable refusal to entertain grievance. DOLE intervened, an agreement between EE and ER entered wherein ER promised not to resort to hiring casual employees. Still, it did. -Union eventually held a strike, which was dispersed when the counsels of the company called CAPCOM officers to arrest the union members, were later charged for illegal possession of firearms and deadly weapons, but charges were dropped for failure of the CAPCOM officers to appear during the investigations -Corporation filed petition to declare strike illegal with NLRC. Union restaged the strike, to which the corporation filed a petition for injunction. The union offered to return to work, conditioned on the continuous working relationship between the er and the ee -Union filed counter-complaint for ULP against the corporation before the NLRC LA: Strike illegal, ordered termination of union officers and members. Union s certificate of registration also cancelled. Union was allegedly denied opportunity to cross-examine the witnesses presented by the corporation so they appealed to NLRC NLRC: affirmed the illegality of the strike, with the Union held to have failed to exhaust the grievance procedure provided for in the CBA . But held that LA cannot cancel registration of the union, as only the BLR may do so. Dissent from Commissioner Lucas, saying that it should have been remanded as the countercharge of ULP was not resolved

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H: STRIKE WA LEGAL - Philippine Metal Foundries, Inc. vs. CIR (90 SCRA 135 [1979]): a no-strike clause in 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. -ECONOMIC STRIKE: An economic strike is defined as one which is to force wage or other concessions from the employer which he is not required by law to grant (Consolidated Labor Association of the Philippines vs. Marsman & Co., Inc., 11 SCRA 589 [1964]) -according to J.Perfecto Fernandez: an economic strike involves issues relating to demands for higher wages, higher pension or overtime rates, pensions, profit sharing, shorter working hours, fewer work days for the same pay, elimination of night work, lower retirement age, more healthful working conditions, better health services, better sanitation and more safety appliances. -here: the strike was not an economic strike. The employees were asserting the CBA provision for service allowances which they were deprived of, and were not holding a strike to pressure the employer to grant a benefit not yet granted. - Although the end result, should the Corporation be required to observe the CBA, may be economic in nature because the workers would then be given their regular working hours and therefore their just pay, not one of the said grounds is an economic demand within the meaning of the law on labor strikes. -ON ARGUMENT THAT ER MERELY EXERCISING MANAGEMENT PREROGATIVE: While it is true that an employer's exercise of management prerogatives, with or without reason, does not per se constitute unjust discrimination, such exercise, if clearly shown to be in grave abuse of discretion, may be looked into by the courts (National Federation of Labor Unions vs. NLRC, 202 SCRA 346 [1991]). Indeed, the hiring, firing, transfer, demotion, and promotion of employees are traditionally identified as management prerogatives. However, they are not absolute prerogatives. They are subject to limitations found in law, a collective bargaining agreement, or general principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990] citing Abbott Laboratories [Phil.], Inc. vs. NLRC, 154 SCRA 713 [1987]). The Corporation's assertion that it was exercising a management prerogative in hiring outside workers being contrary to the contract of employment which, of necessity, states the expected wages of the workers, as well as the CBA, is therefore untenable. -ON HOLDING OF NLRC THAT UNION FAILED TO RESORT TO GRIEVANCE PROCEDURE: it was not contested by the employer that the employees did exhaust the grievance procedure available to them. - It should be remembered that a grievance procedure is part of the continuous process of collective bargaining (Republic Savings Bank. vs. CIR, et al., 21 SCRA 226 [1967]). It is intended to promote a friendly dialogue between labor and management as a means of maintaining industrial peace. The Corporation's refusal 56 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

to heed petitioners' request to undergo the grievance procedure clearly demonstrated its lack of intent to abide by the terms of the CBA. basta strike legal

PAL V. SANTOS (1993) F: PAL made deductions from the salary of some of its employees who were all port stewards of Catering sub-department, allegedly for losses of inventoried items. -uncomfortable with the said deductions, the employees presented their grievance upon a formal notice to the manager for Catering, Mr. Reynaldo Abad in AUGUST 21, 1984. Abad, however, was on leave. -no action was taken so employees, through union, filed a formal grievance on November 4, 1984 pursuant to step1 of the grievance machinery in the CBA. The grievance was submitted to Mr. Abad November 21, BUT HE WAS STILL ON LEAVE! -December 5, the employees wrote to Mr. Abad that in as much as no reply was made with regards their grievance, it was deemed resolved in their favor, pursuant to the CBA. -Dec7, Mr.Abad finally returned. He scheduled a meeting with the individual employees on December 12. -the said employees refused to conduct inventory. Thus during the December 12 meeting, Mr. Abad resolved to deny the petition filed by the individual grievants, and asked the individual grievants to explain why they should not be subjected to disciplinary action. -the individual grievants replied, saying that since there was no reply within 5 days, the grievance was deemed to be resolved in their favor- Mr. Abad was dissatisfied, thus he suspended the employees -PALEA filed another grievance petition for the lifting of the suspension and demanded that the employees be paid during their suspension. Mr. Abad maintained the legality of the suspension -Union filed complaint for illegal suspension before the Labor Arbiter LA: Dismissed complaint. Suspension legal NLRC: Suspension illegal. PAL pay the grievants suspended their salaries during said suspension H: It is not the employees fault that the person who should have been in charge of the procedure was not present. Should not work to their prejudice -It is a fact that the sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes such sympathy, but because of the onesided relation between labor and capital. The constitutional mandate for the promotion of labor is as explicit as it is demanding. The purpose is to place the workingman on an equal plane with management with all its power and influence in negotiating for the advancement of his interests and the defense of his rights. Under the policy of social justice, the law bends over backward to
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accommodate the interests of the working class on the humane justification that those with less privileges in life should have more privileges in law. -the grievance of employees is not a matter which requires the personal act of Mr. Abad and thus could not be delegated. Petitioner could at least have assigned an officer-in-charge to look into the grievance and possibly make his recommendation to Mr. Abad. It is of no moment that Mr. Abad immediately looked into the grievance upon returning to work, for it must be remembered that the grievants are workingmen who suffered salary deductions and who rely so much on their meager income for their daily subsistence and survival. -Abad's failure to act on the matter may have been due to petitioner's inadvertence, but it is clearly too much of an injustice if the employees be made to bear the dire effects thereof. Much as the latter were willing to discuss their grievance with their employer, the latter closed the door to this possibility by not assigning someone else to look into the matter during Abad's absence. Thus, private respondents should not be faulted for believing that the effects of the CBA in their favor had already stepped into the controversy. -If the Court were to follow petitioner's line of reasoning, it would be easy for management to delay the resolution of labor problems, the complaints of the workers in particular, and hide under the cloak of its officers being "on leave" to avoid being caught by the 5-day deadline under the CBA. If this should be allowed, the workingmen will suffer great injustice for they will necessarily be at the mercy of their employer. That could not have been the intendment of the pertinent provision of the CBA, much less the benevolent policy underlying our labor laws.

SMC V. NLRC (1999) Summary: SMB and Union had grievance procedure in CBA. SMB shut down plants, declared 55 positions as redundant. Grievance procedure entered but before completing it, the union filed a notice to strike. The court defined deadlock, but said there was no deadlock in this case because the grievance procedure was not fully exhausted. There is still a board assigned to resolve conflicting views between the parties. Since grievance procedure not yet done, notice of strike was dismissed. Grievance procedure of SMB: Sec.5. Processing of Grievance. Should a grievance arise, an earnest effort shall be made to settle the grievance expeditiously in accordance with the following procedures: Step 1. The individual employee concerned and the Union Directors, or the Union Steward shall, first take up the employee's grievance orally with his immediate superior. If no satisfactory agreement or adjustment of the grievance is reached, the grievance shall, within twenty (20) working days from the occurrence of the cause or event which gave rise to the grievance, be filed in writing with the Department Manager or the next level superior who shall render his decision 57 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

within ten (10) working days from the receipt of the written grievance. A copy of the decision shall be furnished the Plant Personnel Officer. Step 2. If the decision in Step 1 is rejected, the employee concerned may elevate or appeal this in writing to the Plant Manager/Director or his duly authorized representative within twenty (20) working days from the receipt of the Decision of the Department Manager, Otherwise, the decision in Step 1 shall be deemed accepted by the employee. The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the necessity, of conducting grievance meetings. If necessary, the Plant Manager/Director and the Plant Personnel Officer shall meet the employee concerned and the Union Director/Steward on such date(s) as may be designated by the Plant Manager. In every plant/office, Grievance Meetings shall be scheduled at least twice a month. The Plant Manager shall give his written comments and decision within ten (10) working days after his receipt of such grievance or the date of submission of the grievance for resolution, as the case may be. A copy of his Decision shall be furnished the Employee Relations Directorate. Step 3. If no satisfactory adjustment is arrived at Step 2, the employee may appeal the Decision to the Conciliation Board as provided under Section 6 hereof, within fifteen (15) working days from the date of receipt of the decision of the Plant Manager/Director or his designate. Otherwise, the decision in Step 2 shall be deemed accepted by the employee. 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 scheduled at least once a month. The Conciliation Board shall have fifteen (15) working days from the date of submission of the grievance for resolution within which to decide on the grievance. Sec. 6. Conciliation Board. There shall be a conciliation Board per Business Unit or Division. Every Conciliation Board shall be composed of not more than five (5) representatives each from the Company and the Union. Management and the Union may be assisted by their respective legal counsels. In every Division/Business Unit, the names of the Company and Union representatives to the Conciliation Board shall be submitted to the Division/Business Unit Manager not later than January of every year. The Conciliation Board members shall act as such for one (1) year until removed by the Company or the Union, as the case may be. xxx xxx xxx Sec. 8. Submission to Arbitration. If the employee or Union is not satisfied with the Decision of the Conciliation Board and desires to submit the grievance to arbitration, the employee or the Union shall serve notice of such intention to the Company within fifteen (15) working days after receipt of the Board's decision. If no such written notice is received by the Company within fifteen (15) working days, the
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grievance shall be considered settled on the basis of the company's position and shall no longer be available for arbitration. -when the parties reached step 3, only 17 of the employees remained. SMC informed them that if they would not be redeployed, their services would be terminated. The union thus did not finish the grievance procedure, declaring that there was a deadlock. - -Union filed with the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment (DOLE) a notice of strike on the following grounds: a) bargaining deadlock; b) union busting; c) gross violation of the Collective Bargaining Agreement (CBA), such as noncompliance with the grievance procedure; d) failure to provide private respondent with a list of vacant positions pursuant to the parties side agreement that was appended to the 1990 CBA; and e) defiance of voluntary arbitration award -SMC prayed that the notice to strike be dismissed and that the union be compelled to submit to grievance procedure NLRC: denied SMC s complaint H: Strike illegal, should have been dismissed -Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor Code, reads: Sec.1. Grounds for strike and lockout. A strike or lockout may be declared in cases of *bargaining deadlocks and *unfair labor practices. Violations of the collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor practice and shall not be strikeable. No strike or lockout may be declared on grounds involving inter-union and intra-union disputes or on issues brought to voluntary, or compulsory, arbitration. -In the case under consideration, the grounds relied upon by the private respondent union are non-strikeable. The issues which may lend substance to the notice of strike filed by the private respondent union are:* collective bargaining deadlock and *petitioner's alleged violation of the collective bargaining agreement. These grounds, however, appear more illusory than real. -Collective Bargaining Deadlock is defined as "the situation between the labor and the management of the company where there is failure in the collective bargaining negotiations resulting in a stalemate" -NO DEADLOCK: Since there is a Board assigned on the third level (Step 3) of the grievancenmachinery to resolve the conflicting views of the parties. Instead of asking the Conciliation Board composed of five representatives each from the company and the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed a notice of strike. 58 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

- For failing to exhaust all the steps in the grievance machinery and arbitration proceedings provided in the Collective Bargaining Agreement, the notice of strike should have been dismissed by the NLRC and private respondent union ordered to proceed with the grievance and arbitration proceedings. -ON ALLEGATION OF VIOLATION OF CBA: such a violation is chargeable against the private respondent union. In abandoning the grievance proceedings and stubbornly refusing to avail of the remedies under the CBAsuch a violation is chargeable against the private respondent union. In abandoning the grievance proceedings and stubbornly refusing to avail of the remedies under the CBA

EXTENSION/RENEWAL SENO V. MENDOZA (1967) Facts: On October 4, 1957: Carlos Go Thong & Co. And the United Seamen's Union of the Philippines entered into a CBA effective for 2 years, and thereafter for another 1 year period ...unless either party should notify the other in writing, not less than 60 days prior to the expiry date, of its intention and election to terminate the agreement as of the end of the current term. (so in effect, presumed to be continuing) -On July 18, 1959, CBA was extended for another period of 2 years, counted from October 4, 1959. -October 6 & 31, Philippine Labor Federation (PLF) & General Maritime Stevedores Union (GMSU)filed separate petitions for certification election w/ CIR -United Seamen's Union opposed the said petitions -January 17, 1961: United Seamen's Union and Company renewed the CBA w/ additional conditions for a period of 5 years counted from execution -sometime before 1962, the petitioners (as represented by Atty. Seno) were removed from the union as "members in good standing", and were thus terminated from the company due to the closed shop clause in the CBA between company and United Seamen's Union -petitioners requested to be reinstated and be paid their salaries but Company denied said request. -conciliation conferences in the Regional Office of DOLE (Cebu) failed so petitioners and their sympathizers picketed the vessels of the company. -November 7, 1962: petitioners filed ULP charge against the company and the Union in CIR Cebu -Company filed against United Seamen's Union of the Philippines and petitioners in CFI Cebu for Actual damages, and to enjoin the petitioners from molesting them and their vessels, among others
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-Petitioners appeared before CFI Cebu and opposed issuance of writ of preliminary injunction on ground of lack of jurisdiction (arguing that there is already a case for ULP in CIR) -On the same day, CFI Ordered the issuance of a writ of preliminary injunction. -MR denied -so petition for certiorari contesting the taking of CFI of cognizance of the case, arguing: 1. That a labor dispute exists 2. Dismissal constitutes ULP, being an act of discrimination in regard to hire or tenure of employment (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 still pending before the CIR at the time said closed shop agreement was executed) HELD: 1. There was a labor dispute (refer to RA 875, Sectionj ,2(j)) 2. WON the dismissal constitutes ULP? NO. SINCE CBA is still valid, and the CBA contains a closed shop agreement, the dismissal of the petitioners is not ULP -The pendency of the petitions for certification election did not bar or preclude the renewal of the CBA with the United Seamen's Union of the Philippines -Rationale: Otherwise there would be a gap or interregnum during which no agreement would govern, that is, from the time the old collective bargaining contract expired to the time the petition for certification election is decided and a new agreement entered into with the Union that may be duly certified as the proper bargaining unit. Without any agreement to govern the relations between labor and management in the interim, the situation would well be productive of confusion and result in breaches of the law by either party (Victorias Milling Co. vs. Victorias-Manapla Workers Organization vs. Court of Industrial Relations and Free Visayan Workers, Nos. L-18467 & L-18470, Sept. 30, 1963). -what is the effect if the CBA is renewed but a new bargaining agent is certified: New bargaining agent would have to respect the contract, but the new bargaining agent may bargain that its term be shortened (General Maritime Stevedores Union v. South Sea Shipping Lines)

retrenchment was exercised by Lopez Sugar, the CBA was not renegotiated by the Union so the union alleged that it was no longer enforceable or operative. H: Lopez Sugar, although authorized under the CBA (which was deemed to be still effective and enforceable), was not proven to be justified in resorting to retrenchment. So the court held for the laborers -Although the CBA had expired, it continued to have legal effects as between the parties until a new CBA had been negotiated and entered into.

ARBITRATED CBAS MERALCO V. QUISUMBING 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 arrangement. MEWA filed notice to strike, several conciliation proceedings were undertaken but the parties still were unable to agree. MERALCO petitioned SOLE to assume jurisdiction, which it did. Both parties were requested to submit their respective memoranda and the SOLE issued an order awarding some of the proposals of the Union and MERALCO. Decision more or less merely discusses the decision on the terms of the CBA contested. As to retreoactivity (Facts): - SOLE ordered that the effectivity of the new CBA shall retroact to December 1, 1995, the date of the commencement of the last two years of the last two years of the effectivity of the existing CBA. -MERALCO Contention: contrary to the ruling of this Court in Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan-Confessor (the effective date of the new CBA should be the date the Secretary of Labor has resolved the labor dispute) -MEWA contention: (1) SOLE has plenary power and discretion to fix the date of effectivity of his arbitral award [St. Lakes Medical Center, Inc. vs. Torres]; (2) If the arbitral award takes effect on the date of the Secretary Labor's ruling on the parties' motion for reconsideration (i.e., on December 28, 1996), an anomaly situation will 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 y PIER 8 Case: does not involve a mid-term negotiation similar to this case y St. Lukes: does not take the "hold over" 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. -Art. 253-A serves as the guide in determining when the effectivity of the CBA at bar is to take effect. It provides that the representation aspect of the CBA is to be for a term of 5 years, while
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LOPEZ SUGAR V. FEDERATION OF FREE WORKERS (1990) F: Lopez Sugar and the Union entered into a CBA wherein Lopez Sugar is allowed to retrench employees to prevent business losses. Allegedly in accordance with the said provision, Lopez Sugar did entrench employees. -So union filed a case for ULP for union busting, and violation of security of tenure. Allegedly, Lopez Sugar started hiring casuals who did the job of the entrenched employees, and the serious business losses were not proven. FURTHER, when the 59 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

. . . [A]ll other provisions of the Collective Bargaining Agreement shall be renegotiated not later than 3 years after its execution. Any agreement on such other provision of the Collective Bargaining Agreement entered into within 6 months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement shall retroact to the day immediately following such date. If such agreement is entered into beyond 6 months, the parties shall agree on the duration of the effectivity thereof. . . . . -Under these terms, it is clear that the 5-year term requirement is specific to the representation aspect. What the law additionally requires is that a CBA must be renegotiated within 3 years "after its execution." It is in this re-negotiation that gives rise to the present CBA deadlock. -If no agreement is reached within 6 months from the expiry date of the 3 years that follow the CBA execution, the law expressly gives the parties not anybody else the discretion to fix the effectivity of the agreement. -Significantly, the law does not specifically cover the situation where months have elapsed but no agreement has been reached with respect to effectivity. In this eventuality, we hold that any provision of law should then apply for the law abhors a vacuum. -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 effect the terms and conditions of the existing agreement until a new agreement is reached. In this manner, the law prevents the existence of a gap in the relationship between the collective bargaining parties. -Another legal principle that should apply is that in the absence of an agreement between the parties, then, an arbitrated CBA takes on the nature of any judicial or quasi-judicial award; it operates and may be executed only respectively unless there are legal justifications for its retroactive application. HELD: PROSPECTIVE APPLICATION OF CBA. We find no sufficient legal ground on the other justification for the retroactive application of the disputed CBA, and therefore hold that the CBA should be effective for a term of 2 years counted from December 28, 1996 (the date of the Secretary of Labor's disputed order on the parties' motion for reconsideration) up to December 27, 1999.

MANILA CENTRAL LINE V. MANILA CENTRAL LINE FREE WORKERS UNION (1998) Facts: The existing CBA between the Company and the Union had already expired so they renegotiated the said CBA. However, a CBA deadlock occurred even with the help of the NCMB. -The Union filed a Petition for Compulsory Arbitration with NLRC. During the initial hearing, the parties declared that conciliation proceedings before NCMB had 60 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

terminated and they desired to submit to Compulsory arbitration. Parties agreed to submit position papers containing their proposals for the CBA. -LA: Decision embodied the CBA that would govern between the two parties -Company appealed but NLRC dismissed appeal. MR also denied H (as to part relevant to discussion): -Company contention: In ordering the new CBA to be effective on March 15, 1989, the expiry date of the old CBA, the labor arbiter acted contrary to Art. 253-A of the Labor Code. H: Art. 253-A refers to collective bargaining agreements entered into by the parties as a result of their mutual agreement. The CBA in this case, on the other hand, is part of an arbitral award. As such, it may be made retroactive to the date of expiration of the previous agreement. -cited St. Luke's Medical Center, Inc. v.Torres: Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the previous CBA, contrary to the position of petitioner. Under the circumstances of the case, Article 253-A cannot be properly applied to herein case. As correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing petitioner's Motion for Reconsideration Anent the alleged lack of basis for the retroactivity provisions awarded, we would stress that the provision of law invoked by the Hospital, Article 253-A of the Labor Code, speaks of agreements by and between the parties, and not arbitral awards . . . (p. 818 Rollo). Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public respondent is deemed vested with plenary and discretionary powers to determine the effectivity thereof. -COMPANY has not shown that the question of effectivity was not included in the general agreement of the parties to submit their dispute for arbitration. To the contrary, as the order of the labor arbiter states, this question was among those submitted for arbitration by the parties: As regards the "Effectivity and Duration" clause, the company proposes that the collective bargaining agreement shall take effect only upon its signing and shall remain in full force and effect for a period of five years. The union proposes that the 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, 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 immediately proceeding CBA expires so as to give a semblance of continuity. Hence, for this particular case, it is believed that there is nothing wrong adopting the stand of the union, that is that this CBA be made retroactive effective March 15, 1989.
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So difference between Meralco v. Quisumbing and Mla. Central Line v. Mla. Central Line Free Workers Union (1998) MERALCO CASE MLA CENTRAL LINE CASE SOLE issued the Order Labor Arbiter issued the order Retroact from the date of the Retroact from the date of expiration of commencement of the last two years of the old CBA the last two years of the effectivity of the existing CBA. y Court held that according to Art 253y Art. 253-A refers to collective A, the parties not anybody else bargaining agreements entered into are given the discretion to fix the by the parties as a result of their effectivity of the agreement. mutual agreement. The CBA in this case, on the other hand, is part of an y in the absence of an agreement arbitral award. As such, it may be between the parties, then, an made retroactive to the date of arbitrated CBA takes on the nature of expiration of the previous any judicial or quasi-judicial award; it agreement. operates and may be executed only respectively unless there are legal y Article 253-A of the Labor Code, justifications for its retroactive speaks of agreements by and application. between the parties, and not arbitral awards . . . (p. 818 Rollo). Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public respondent is deemed vested with plenary and discretionary powers to determine the effectivity thereof.

CBA AND 3

RD

PARTY APPLICABILITY

SUNDOWER DEVELOPMENT CORP. VS. DRILON Facts: Mabuhay leased the premises of Syjuco but failed to pay rentals so a case for ejectment was filed by Syjuco against Mabuhay hotels. To amicably settle the case, Mabuhay offered to surrender the premises to Syjuco and to sell the assets and personal property to any interested buyer.

-Syjuco offered the premises for lease to Sundower. Mabuhay also offered to sell the properties to Sundower, to which the latter also agreed. - National Union of Workers in Hotel, Restaurant and Allied Services (NUWHRAIN for short) picketed the leased premises, barricaded the entrance to the leased premises and denied petitioner's officers, employees and guests free access to and egress from said premises. SO, SUNDOWER wrote a letter-complaint to their lessor Syjuco. -SOLE ordered that the striking union members be absorbed by the new hotel owner Sundower HELD: The rule is that unless expressly assumed, labor contracts such as employment contracts and collective bargaining agreements are not enforceable against a transferee of an enterprise, labor contracts being in personam, thus binding only between the parties .5 A labor contract merely creates an action in personally and does not create any real right which should be respected by third parties. This conclusion draws its force from the right of an employer to select his employees and to decide when to engage them as protected under our Constitution, and the same can only be restricted by law through the exercise of the police power. As a general rule, there is no law requiring a bona fide purchaser of assets of an ongoing concern to absorb in its employ the employees of the latter. However, although the purchaser of the assets or enterprise is not legally bound to absorb in its employ the employers of the seller of such assets or enterprise, the parties are liable to the employees if the transaction between the parties is colored or clothed with bad faith. 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 court finds no cogent basis for such contention. Thus, the absorption of the employees of Mabuhay may not be imposed on petitioner. It is undisputed that when Mabuhay surrendered the leased premises to Syjuco and asked Syjuco to offer same to other lessees it was Syjuco who found petitioner and persuaded petitioner to lease said premises. Mabuhay had nothing to do with the negotiation and consummation of the lease contract between petitioner and Syjuco. The deed of assignment and the tripartite agreement entered into by Sundower and Mabuhay, and even with Union, provide that Sundower is free from any liability that Mabuhay may have with the Union. - it is clear that petitioner has no liability whatsoever to the employees of Mabuhay And its responsibility if at all, is only to consider them for re-employment in the operation of the business in the same premises. There can be no implied acceptance of the employees of Mabuhay by petitioner and acceptance of statutory wrong as it is expressly provided in the agreement that petitioner has no commitment or duty to absorb them. - What is obvious is that the petitioner, by purchasing the assets of respondent Mabuhay in the hotel premises, enabled Mabuhay to pay its obligations to its
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61 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

employees. There being no employer-employee relationship between the petitioner and the Mabuhay employees, the petition must fail. Petitioner can not be compelled to absorb the employees of Mabuhay and to pay them backwages. Manlimos v. NLRC (1995) F: Corporation was bought by another company. Even with this knowledge, the employees of the previous company still worked ***

In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, 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 personnel, 2. Whose movement and services shall be unhampered and unrestricted, as are 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 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 are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of back wages, damages and other affirmative relief, even criminal prosecution against either or both of them. The foregoing notwithstanding, the President of the Philippines shall not be precluded 1. From DETERMINING THE INDUSTRIES that, in HIS OPINION, are indispensable to the national interest, and 2. From intervening at any time and assuming jurisdiction over such labor dispute in order to settle or terminate the same. * Sec. 22 RA 8791: Banking institutions are industries indispensable to the national interest. Compulsory Arbitration is by mandate of law. While voluntary arbitration is by agreement of parties. What is the type of dispute subject to compulsory arbitration? Labor disputes in industry indispensable to the national interest. Who is initiating party? Initiated by the Secretary of Labor or the President. 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. CHUNG FU VS. CA (1992) *arb agreement provides that the award be FINAL AND UNAPPEALABLE *the Supreme Court will not engage in a review of the facts found nor even of the law as interpreted or applied by the arbitrator, unless there be on the part of the

COMPULSORY ARBITRATION 1. ART. 263 (G) When, in his OPINION, there exists a LABOR DISPUTE causing or likely to cause a STRIKE OR LOCKOUT in an INDUSTRY INDISPENDSABLE TO THE NATIONAL INTERESTS, The Secretary of Labor and Employment MAY 1. assume jurisdiction over the dispute and decide it OR 2. certify the same to the Commission (NLRC) for COMPULSORY ARBITRATION. Such assumption or certification shall have the effect of: AUTOMATICALLY enjoining the intended or impending strike or lock-out as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, 1. All striking or locked-out employees shall IMMEDIATELY RETURN TO WORK 2. AND the employer shall IMMEDIATELY resume operations and READMIT all workers under the SAME terms and conditions prevailing before the strike or lock-out. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure the compliance with this provision as well as with such orders as he may issue to enforce the same. In line with the national concerns for and highest respect accorder to the right of patients to life and health, strikes and lock-outs in HOSPITALS, CLINICS, and SIMILAR MEDICAL INSTITUTIONS SHALL, to every extent possible, BE AVOIDED, and all serious efforts, not only by labor and management but government as well, be exhausted to SUBSTANTIALLY MINIMIZE, if not prevent, their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right to strike and by management to lockout. 62 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

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arbitrator a grave abuse of discretion or that he has acted without or in excess of jurisdiction F: Chung Fu and Roblecor Philippines entered into a construction agreement on May 17, 1989: y *Roblecor would construct and finish on December 31, 1989 Chung Fu's factory complex in Tanza, Cavite for P42M y *in the event of disputes arising from the performance of the contract, issues shall be submitted for resolution before a single arbitrator chosen by both parties -The parties entered further ancillary contracts for the construction of the dormitory and support facilities for ~P4M (to be finished October 31) and for installation of electrical, water and hydrant systems at the plant site for P12.1M (completed 1 month after civil works have been finished) -DISPUTE: Roblecor failed to complete work despite extensions. Chung Fu took over the construction when it became evident Roblecor could not fulfill its obligation -Roblecor filed a PETITION FOR COMPULSORY ARBITRATION, pursuant to arb clause, for the unsatisfied account of P10.5M and unpaid progress billings of ~P2M -Chung fu MOVED TO DISMISS -Subsequently, both parties agreed to an arbitration agreement which y precludes further judicial recourse if either party disagrees with the whole or any part of the arb agreement. y Only exception is when BOTH PARTIES AGREE that either is entitled to seek judicial assistance for purpose of enforcing the arb award -RTC approved arbitration agreement. Arbitrator appointed as sole arbiter. -Arb Award: Chung Fu pay Roblecor P16,108,801. Final and unappelable -Roblecor moved for the CONFIRMATIONOF THE AWARD -Chung Fu: moved for remand, MR of the judgment award as Arbitrator committed 12 instances of Grave Error by disregarding the parties' contract -RTC: o Denied Chung Fu's Motion to remand. MR denied. o granted Motion for confirmation of award, entered judgment, granted motion for issuance of writ of execution -Chung Fu filed Petition for certiorari before CA CA: Affirm RTC. Award which provides that is be final and unappealable are precluded from judicial review. H: FOR CHUNG FU: Arb award providing that the award be final and unappealable are valid BUT when there's GADALEJ on the part of the arbitrators, the aggrieved party may file a petition for certiorari under R65 or may ask for the vacation of the award if the grounds enumerated under the Arbitration law are proven and sufficiently showed. 63 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-History of Arbitration: With the progress of civilization, physical combat has been ruled out and instead, more specific means have been evolved, such as recourse to the good offices of a disinterested third party, whether this be a court or a private individual or individuals. Legal history discloses that "the early judges called upon to solve private conflicts were primarily the arbiters, persons not specially trained but in whose morality, probity and good sense the parties in conflict reposed full trust. Thus, in Republican Rome, arbiter and judge (judex) were synonymous. The magistrate or praetor, after noting down the conflicting claims of litigants, and clarifying the issues, referred them for decision to a private person designated by the parties, by common agreement, or selected by them from an apposite listing (the album judicium) or else by having the arbiter chosen by lot. The judges proper, as specially trained state officials endowed with own power and jurisdiction, and taking cognizance of litigations from beginning to end, only appeared under the Empire, by the so-called cognitio extra ordinem." Such means of referring a dispute to a third party has also long been an accepted alternative to litigation at common law. -IN RP: *Recognized in Spanish Civil Code under A1820 and 1821, reinstated in present Civil Code (A2042-2046) *AS REGARDS LABOR: Arbitration found a fertile field in the resolution of labormanagement disputes in the Philippines. Although early on, Commonwealth Act 103 (1936) provided for compulsory arbitration as the state policy to be administered by the Court of Industrial Relations, in time such a modality gave way to voluntary arbitration. While not completely supplanting compulsory arbitration which until today is practiced by government officials, the Industrial Peace Act which was passed in 1953 as Republic Act No. 875, favored the policy of free collective bargaining, in general, and resort to grievance procedure, in particular, as the preferred mode of settling disputes in industry. It was accepted and enunciated more explicitly in the Labor Code, which was passed on November 1, 1974 as Presidential Decree No. 442, with the amendments later introduced by Republic Act No. 6715 (1989). -Whether utilized in business transactions or in employer-employee relations, arbitration was gaining wide acceptance. A consensual process, it was preferred to orders imposed by government upon the disputants. Moreover, court litigations tended to be time-consuming, costly, and inflexible due to their scrupulous observance of the due process of law doctrine and their strict adherence to rules of evidence. *as early as the 1920s, SC held (Pasay Co. case included): "The rule now is that unless the agreement is such as absolutely to close the doors of the courts against the parties, which agreement would be void, the courts will
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look with favor upon such amicable arrangements and will only with great reluctance interfere to anticipate or nullify the action of the arbitrator." *RA 876 (Arbitration Law) passed to supplement the New Civil Code provisions on Arbitration. *In the construction Industry, CIAC was created by EO 1008 -CAN THE PARTIES PROVIDE THAT THE DISPUTE BE SUBMITTED TO ARBITRATION, AND THAT THE DECISION OF THE ARBITER BE FINAL AND EXECUTORY? YES *Article 2044 of the Civil Code: Any stipulation that the arbitrators' award or decision shall be final is valid, without prejudice to Articles 2038, 2039 and 2040. * Construction Industry Arbitration Law: arbitral award "shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court." *Under the original Labor Code: GR: voluntary arbitration awards or decisions were final, unappealable and executory. " X: voluntary arbitration awards or decisions on money claims, involving an amount exceeding One Hundred Thousand Pesos (P100,000.00) or forty-percent (40%) of the paid-up capital of the respondent employer, whichever is lower, maybe appealed to the National Labor Relations Commission on any of the following grounds: (a) abuse of discretion; and (b) gross incompetence." It is to be noted that the appeal in the instances cited were to be made to the National Labor Relations Commission and not to the courts. -BUT THE SAID PROVISION WAS DELETED: the voluntary arbitrator is now mandated to render an award or decision within twenty (20) calendar days from the date of submission of the dispute and such decision shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties. (a262-a) * so now, parties are free to establish stipulations they may deem convenient to refer all future disputes to an arbitrator or submit an ongoing dispute to one (subject to limitation that it not be contrary to law, morals, good customs, public order, or public policy). This stipulation is VALID AND BINDING UPON THE PARTIES. IT ALSO CONSTITUTES A CONDITION PRECEDENT -WON ARBITRATION AWARD IS BEYOND THE AMBIT OF THE COURT S POWER OF JUDICIAL REVIEW? NO UNDER NCC: Art. 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence, or falsity of documents, is subject to the provisions of article 1330 of this Code. However, one of the parties cannot set up a mistake of fact as against the other if the latter, by virtue of the compromise, has withdrawn from a litigation already commenced. 64 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

Art. 2039. When the parties compromise generally on all differences which they might have with each other, the discovery of documents referring to one or more but not to all of the questions settled shall not itself be a cause for annulment or rescission of the compromise, unless said documents have been concealed by one of the parties. But the compromise may be annulled or rescinded if it refers only to one thing to which one of the parties has no right, as shown by the newly-discovered documents. Art. 2040. If after a litigation has been decided by a final judgment, a compromise should be agreed upon, either or both parties being unaware of the existence of the final judgment, the compromise may be rescinded. Ignorance of a judgment which may be revoked or set aside is not a valid ground for attacking a compromise. UNDER ARBITRATION LAW: Sec. 24. Grounds for vacating award. In any one of the following cases, the court must make an order vacating the award upon the petition of any party to the controversy when such party proves affirmatively that in the arbitration proceedings: (a) The award was procured by corruption, fraud, or other undue means; or (b) That there was evident partiality or corruption in the arbitrators or any of them; or (c) That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; that one or more of the arbitrators was disqualified to act as such under section nine hereof, and wilfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or (d) That the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made. Where an award is vacated, the court, in its discretion, may direct a new hearing either before the same arbitrators or before a new arbitrator or arbitrators chosen in the manner provided in the submission or contract for the selection of the original arbitrator or arbitrators, and any provision limiting the time in which the arbitrators may make a decision shall be deemed applicable to the new arbitration and to commence from the date of the court's order. Where the court vacates an award, costs, not exceeding fifty pesos and disbursements may be awarded to the prevailing party and the payment thereof may be enforced in like manner as the payment of costs upon the motion in an action. Sec. 25. Grounds for modifying or correcting award. In any one of the following cases, the court must make an order modifying or correcting the
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award, upon the application of any party to the controversy which was arbitrated: (a) Where there was an evident miscalculation of figures, or an evident mistake in the description of any person, thing or property referred to in the award; or (b) Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the decision upon the matter submitted; or (c) Where the award is imperfect in a matter of form not affecting the merits of the controversy, and if it had been a commissioner's report, the defect could have been amended or disregarded by the court. The order may modify and correct the award so as to effect the intent thereof and promote justice between the parties. - WHAT IF COURTS REFUSE OR NEGLECT TO INQUIRE INTO THE FACTUAL MILIEU OF AN ARBITRATOR'S AWARD TO DETERMINE WHETHER IT IS IN ACCORDANCE WITH LAW OR WITHIN THE SCOPE OF HIS AUTHORITY? HOW MAY THE POWER OF JUDICIAL REVIEW BE INVOKED? PETITION FOR REVIEW ON CERTIORARI (R65) for GADALEJ! WHY GADALEJ: CHUNG FU HAS AMPLY MADE OUT A CASE WHERE THE VOLUNTARY ARBITRATOR FAILED TO APPLY THE TERMS AND PROVISIONS OF THE CONSTRUCTION AGREEMENT WHICH FORMS PART OF THE LAW APPLICABLE AS BETWEEN THE PARTIES. FURTHERMORE, IN GRANTING UNJUSTIFIED EXTRA COMPENSATION for several items, ARBITRATOR EXCEEDED HIS POWERS - grounds for vacating the award under SECTION 24(d) of RA 876. as the courts refused to rule on the grounds for vacating even if it was clearly there, they also commited GADALEJ, thus, petition for certiorari should be granted! Case is remanded to court of origin for further hearing. PAL V. NLRC (1989) F: Dolina was admitted in PAL Aviation school, the training agreement of which provided that after training, he would be made a regular and permanent employee of PAL. He was initially appointed temporarily for 6 month durations but failed to comply with the required flying hours. When he finally complied with the required flying hours, his Adaptability rating was however found to be unsatisfying and the Pilot Acceptance Qualification Board did not recommend him for regular employment. He was recommended for termination. -PAL applied for clearance of Dolina's termination, while putting Dolina in preventive suspension pending the clearance. -Dolina countered with a COMPLAINT FOR ILLEGAL DISMISSAL -DOLE regional office lifted the preventive suspension and ordered actual reinstatement with payment of backwages -issue of termination and damages was referred to Exec. Labor Arbiter -PAL appealed the order lifting the preventive suspension w/ SOLE 65 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-pending resolution of SOLE, PAL and DOLINA entered into an AGREEMENT before Undersec: AGREEMENT The undersigned parties hereby agree to the following: 1 While pending final resolution of the complaint of Mr. Armando Dolina against the Philippine Airlines, he shall be considered in the payroll effective 1 October 1976. 2 The order of Regional Director Vicente Leogardo for the reinstatement with backwages of Mr. Dolina is hereby rendered moot and academic. 3 The parties shall consider this arrangement pending final resolution of the case by arbitration. xxx xxx xxx -case referred to compulsory arbitration to the Exec. Labor arbiter -LA: for PAL y Termination is in order y Claim for MD denied -PAL then removed Dolina from Payroll effective 1 April 1979 -Dolina appealed LA's decision to NLRC, prayed that he should still be considered in the payroll because LA's decision not yet final due to his appeal -NLRC: For DOLINA y Termination is in order - clearance approved; BUT y Dolina should still be included in the payroll and be paid his salaries from 1 April 1979 until the case is finally resolved! -so Petition for Certiorari here WON NLRC GADALEJ when it ruled that DOLINA was still entitled to SALARY "until the case is finally resolved"? YES -PAL argues: stipulation only refers to resolution of case by LA -NLRC: arbitration is a continuing process. Since no final resolution of the case yet, still in payroll H: Interpretation of contracts: circumstances under which an instrument was made, 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 correctly -HERE: Agreement was intended to supersede the order of the Regional DOLE director; in lieu of reinstatement with backwages, Dolina would just be included in the payroll from time of preventive suspension until the final resolution of the case by arbitration, w/o having to perform any work for PAL -it would be absurd if the parties intended that "final resolution of the case by arbitration" would include the whole adjudicatory process, even upon petition for certiorari, w/o Dolina rendering any service to PAL -ARBITRATION, DEF: arbitration is the reference of a dispute to an impartial third person, chosen by the parties or appointed by statutory authority to hear and
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decide the case in controversy [Chan Linte v. Law Union and Rock, Ins. Co., 42 Phil. 548 (1921)]. When the consent of one of the parties is enforced by statutory provisions, the proceeding is referred to as compulsory arbitration. ... In labor cases, compulsory arbitration is the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties [See Wood v. Seattle, 23 Wash. 1, 62 P 135, 52 LRA 369 (1920); Amalgamated Association v. Wisconsin Employees' Relations Board, 340 U.S. 383-410,95 L. Ed. 381 (1951)]. -WHY APPEAL TO NLRC NOT INCLUDED IN ARBITRATION: Under the Labor Code, it is the Labor Arbiter who is clothed with the authority to conduct compulsory arbitration on cases involving termination disputes [Article 217, Pres. Decree No. 442, as amended]. When the Labor Arbiter renders his decision, compulsory arbitration is deemed terminated because by then the hearing and determination of the controversy has ended. Any appeal raised by an aggrieved party from the Labor Arbiter's decision is already beyond the scope of arbitration since in the appeal stage, the NLRC en banc merely reviews the Labor Arbiter's decision for errors of fact or law and no longer duplicates the proceedings before the Labor Arbiter. Thus, the clause "pending final resolution of the case by arbitration" should be understood to be limited only to the proceedings before the Labor Arbiter, such that when the latter rendered his decision, the case was finally resolved by arbitration. -NLRC'S affirmance of validity of granting termination clearance runs counter to its order of inclusion of Dolina in the payroll y plus it runs counter to the age-old rule of "a fair day's wage for a fair day's labor" y Plus it in effect awarded backwages notwithstanding the finding of a valid dismissal y Backwages are granted for earnings lost due to illegal dismissal y It is unjust enrichment! y Plus Dolina would be in a better position than those illegally dismissed by employers (still paid backwages even if LEGALLY and VALIDLY terminated) REFORMIST UNION OF RB LINES V. NLRC (1997) -Reformist Union (Reformist) was organized in May 1989 by affiliating with Lakas ng Manggagawa ng Pilipinas (Lakas) -for alleged acts of ULP by RB Liner, Lakas filed a NOTICE OF STRIKE (13 Nov 1989) -conciliation hearings were conducted (4 & 6 Dec 198) but nothing happened -another set of alleged ULP made by RB Liner, so Reformist (with authorizatin of Lakas) went on strike (13 DEC 1989) even as conciliation proceedings continued -21 DEC 1989: RB liner petitioned SOLE Drilon to assume jurisdiction -SOLE Drilon assumed jurisdiction, certified dispute to NLRC for compulsory arbitration, issued RTWO (28 Dec 1989) 66 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-even after certification to NLRC, RB Liner and Reformist reached an AGREEMENT which provided the holding of a certification election (19 January 1990) -31 January 1990: CE was held, Lakas won as CBA -Lakas presented proposals for CBA to RB Liner but RB Liner refused to bargain -later, 8 RB Liner buses were converted to buses of other liners -so Lakas/Reformist filed w/ NLRC ULP case for illegal lockout -RB Liner countered saying that the strike held by the union is ILLEGAL ...the 2 cases were consolidated and tried jointly LA (kasi before NLRC): a. There was no illegal lockout (proof of payment of percentage taxes and conductors/inspectors daily reports) b. There was an illegal strike (no evidence of strike vote held, submitted to DOLE and they held a strike even pending conciliation process... Plus there was an alleged violation of SOLE Drilon's RTWO) -NLRC (on appeal): affirm LA: strike was illegal (not yet the exclusive bargaining rep as there was allegedly no CE conducted previous to the strike); RTWO violated through the Union's alleged admission as stated in the minutes of the conference before Commissioner Diokno that there are some employees who have not yet returned to work even after the RTWO was issued...; plus alleged illegal acts during strike ...conversion of some of buses into other bus companies was a sufficient ground for UNION to believe in GF that there was ULP so allowed reinstatement of the dismissed employees -MR denied WON RB Liner could still contest the legality of the strike conducted by the Union on 13 Dec 1989? NO 1. RB Liner submitted the issue of the legality of strike already to Compulsory Arbitration, and the subsequent agreement it entered with the Union finally disposed of the issue -RB Liner itself sought compulsory arbitration (by writing a letter to SOLE Drilon) in order to resolve the legality of the said strike -RB Liner and Union entered into an agreement, pursuant to the compulsory arbitration. In the said agreement, they agreed to accept all employees who have not returned to work yet. By acceding to the peaceful settlement brooked by the NLRC, the private respondents waived the issue of the illegality of the strike. -The very nature of compulsory arbitration makes the settlement binding upon the private respondents, for compulsory arbitration has been defined both as "the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties," and as mode of arbitration where the parties are "compelled to accept the resolution of their dispute through arbitration by the a third party."
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-The legality of the strike could no longer be reviewed by the LA nor the NLRC, as it had already been resolved. It was the sole issue submitted for compulsory arbitration, as referred by RB Liner to SOLE Drilon. Due to the agreement entered between RB Liner and Union, the case certified by SOLE Drilon to NLRC was dismissed. This dismissal conclusively disposed of the strike issue. 2. THE DECISION IS ALREADY FINAL AND EXECUTORY: LC, Art 263(i): the decision in compulsory arbitration proceedings "shall be final and executory ten (10) calendar days after receipt thereof by the parties." -parties were informed of the dismissal of the case in a letter dated 14 February 1990 and RB Liner only filed complaint with LA for illegal strike on 13 January 1990 so it may be reasonably inferred that more than 10 days have elepsed for RB liner to appeal the decision in the CA proceedings. - A final judgment is no longer susceptible to change, revision, amendment, or 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 contrary have been rendered in grave abuse of discretion amounting to excess of jurisdiction. 3. NATURE OF AGREEMENT BET COMPANY AND UNION IS A COMPROMISE AGREEMENT -COMPROMISE AGREEMENT DEFINED: an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone of them prefers to the hope of gaining, balanced by the danger of losing." -Although ULP acts are beyond and outside the sphere of compromises, LC bestows finality to unvitiated compromise agreements: Art. 227 Compromise agreements Any compromise settlement, including those 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 final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation or coercion. -HERE: 1. Agreement was forged under authority of SOLE 2. Reps of Union and company signed the handwritted agreement to signify their consent 3. RB liner never alleged that the UNION did not comply with the agreement -A2037, NCC: Compromise agreements have effect and authority of res judicata. SO LA and NLRC erroneously reviewed the said issue, as this should no longer be relitigated WON UNION VIOLATED THE RTWO? NO 67 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-RB Liner failed to sufficiently substantiate the defiance of the Union to comply with the RTWO -the union's undertaking to cause absentee employees to RTW was NOT AN ADMISSION: hose who did not report for work after the issuance of the Labor Secretary's order may not have been informed of such order, or they may have been too few so as to conclude that they deliberately defied the order. The private respondents failed to eliminate these probabilities. -on the COMPANY LOGBOOK (which allegedly showed the union members who did not report to work even after RTWO): logbook was withdrawn as an exhibit, and was allegedly either lost or stolen -Other evidence indicated that UNION members complied with the RTWO through the Conductors/Inspectors Daily Reports (dated 2 days after RTWO, detail the bus trips made by a particular conductor-driver + number of bus tickets used during each trip), some of which were executed by the dismissed employees WON THERE WAS ILLEGAL LOCKOUT TO JUSTIFY THE REINSTATEMENT OF THE EMPLOYEES? YES, GF belief that there was an illegal lockout 1. NO defiance of RTWO proven 2. No cause to decree dismissal in the first instance PHIMCO INDUSTRIES V. BRILLANTES (1999) F: PHIMCO is a corporation engaged in the production of matches -PILA filed a NOTICE OF STRIKE w/ NCMB based on an alleged deadlock in the CBA negotiations -after several conciliation conferences without any resolution, PILA staged a strike -PILA presented a PETITION FOR THE INTERVENTION OF SOLE >PHIMCO opposed >PHIMCO also terminated some employees, including several union officers, pending the resolution of the said petition >>Acting SOLE Brillantes ASSUMED JURISDICTION OVER THE LABOR DISPUTE: the prolonged work disruption has adversely affected not only the protagonists, i.e., the workers and the Company, but also those directly and indirectly dependent upon the unhampered and continued operations of the Company for their means of livelihood and existence. In addition, the entire community where the plant is situated has also been placed in jeopardy. If the dispute at the Company remains unabated, possible loss of employment, not to mention consequent social problems, might result thereby compounding the unemployment problem of the country. Thus we cannot be unmindful of the possible dire consequences that might ensue if the present dispute is allowed to remain unresolved, particularly when alternative dispute resolution mechanism obtains to dispose of the differences between the parties herein.
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...ordered that all the striking workers (except those already terminated) to RTW -PHIMCO brought petition before court assailing the assumption of jurisdiction of Acting SOLE WON SOLE acted w/ GADALEJ in assuming jurisdiction over the labor dispute in a match factory? YES -A263(g) vests in SOLE the discretion to determine what IINI (industries indispensable to national interest) BUT power is not w/o limitation -Free Telephone workers Union vs. MOLE: the coverage is limted to strikes or 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 of the match factory to the national interest -SOLE assumed jurisdiction based on the alleged "obtaining circumstances" and not on a determination that the industry involved in the labor dispute is one indispensable to the "national interest" -THUS GADALEJ

generation or distribution of energy" or those undertaken by "banks, hospitals, and export-oriented industries." -It cannot be regarded as playing as vital a role in communication as other mass 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 fact that the "top officers of the union were dismissed during the conciliation process," obviously do not suffice to make the dispute in the case at bar one "adversely affecting the national interest."

PROCEDURAL RULES

ARTICLES 213 TO 225, LABOR CODE ARTICLE 213. National Labor Relations Commission. - There shall be a National Labor Relations Commission which shall be attached to the Department of Labor and Employment for program and policy coordination only, composed of a 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 members shall come from the public sector, with the latter to be chosen from among the recommendees of the Secretary of Labor and Employment. Upon assumption into office, the members nominated by the workers and employers organizations shall divest themselves of any affiliation with or interest in the federation or association to which they belong. The Commission may sit en banc or in five (5) divisions, each composed of three (3) members. Subject to the penultimate sentence of this paragraph, the Commission shall sit en banc only for purposes of promulgating rules and regulations governing the hearing and disposition of cases before any of its divisions and regional branches, and formulating policies affecting its administration and operations. The Commission shall exercise its adjudicatory and all other powers, functions, and duties through its divisions. Of the five (5) divisions, the first, second and third divisions shall handle cases coming from the National Capital Region and the parts 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 emergency basis, allow cases within the jurisdiction of any division to be heard and decided by any other division whose docket allows the additional workload and such transfer will not expose litigants to unnecessary additional expense. The divisions of the Commission shall have exclusive appellate jurisdiction over cases within their respective territorial jurisdictions. (As amended by Republic Act No. 7700).
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GTE DIRECTORIES CORP. VS. SANCHEZ (1991), SUPRA SUMMARY: GTE through the years adopted several Sales evaluation policies. Pursuant to the latest sales policy, GTE issued 6 memoranda to its employees which required the Premise Sales Reps (PSRs) to submit individual reports reflecting target revenues as of deadlines set. None of these memoranda were followed by the employees, arguing that they were not consulted. As a result, 14 employees (some of them Union officers) were dismissed. Union also filed notice of strike before the 4th memo was issued. Court held that GTE s sales policy was pursuant to the valid exercise of management prerogatives and that its implementation is not suspended merely because of pending negotiations initiated by the Union. WON Minister of Labor had power to assume jurisdiction over the dispute? 4. NO - IINI : such as may occur in but not limited to public utilities, companies engaged in the generation or distribution of energy, banks, hospitals, and export-oriented industries, including those within export processing zones -The production and publication of telephone directories, which is the principal activity of GTE, can scarcely be described as an industry affecting the national interest. GTE is a publishing firm chiefly dependent on the marketing and sale of advertising space for its not inconsiderable revenues. Its services, while of value, cannot be deemed to be in the same category of such essential activities as "the 68 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of judgment or resolution. Whenever the required membership in a division is not complete and the concurrence of two (2) commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary. The conclusions of a division on any case submitted to it for decision shall be reached in consultation before the case is assigned to a member for the writing of the opinion. It shall be mandatory for the division to meet for purposes of the consultation ordained herein. A certification to this effect signed by the Presiding Commissioner of the division shall be issued and a copy thereof attached to the record of the case and served upon the parties. The Chairman shall be the Presiding Commissioner of the first division and the four (4) other members from the public sector shall be the Presiding Commissioners of the second, third, fourth and fifth divisions, respectively. In case of the effective absence or incapacity of the Chairman, the Presiding Commissioner of the second division shall be the Acting Chairman. The Chairman, aided by the Executive Clerk of the Commission, shall have administrative supervision over the Commission and its regional branches and all its personnel, including the Executive Labor Arbiters and Labor Arbiters. The Commission, when sitting en banc, shall be assisted by the same Executive Clerk and, when acting thru its Divisions, by said Executive Clerks for the second, third, fourth and fifth Divisions, respectively, in the performance of such similar or 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. 6715, March 21, 1989). ARTICLE 214. Headquarters, Branches and Provincial Extension Units. - The Commission and its First, Second and Third divisions shall have their main offices in Metropolitan Manila, and the Fourth and Fifth divisions in the Cities of Cebu and Cagayan de Oro, respectively. The Commission shall establish as many regional branches as there are regional offices of the Department of Labor and Employment, sub-regional branches or provincial extension units. There shall be as many Labor Arbiters as may be necessary for the effective and efficient operation of the Commission. Each regional branch shall be headed by an Executive Labor Arbiter. (As amended by Section 6, Republic Act No. 6715, March 21, 1989). ARTICLE 215. Appointment and Qualifications. - The Chairman and other Commissioners shall be members of the Philippine Bar and must have engaged in the practice of law in the Philippines for at least fifteen (15) years, with at least five (5) years experience or exposure in the field of labor-management relations, and shall preferably be residents of the region where they are to hold office. The Executive Labor Arbiters and Labor Arbiters shall likewise be members of the Philippine Bar and must have been engaged in the practice of law in the Philippines 69 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

for at least seven (7) years, with at least three (3) years experience or exposure in the field of labor-management relations: Provided, However, that incumbent Executive Labor Arbiters and Labor Arbiters who have been engaged in the practice of law for at least five (5) years may be considered as already qualified for purposes of reappointment as such under this Act. The Chairman and the other Commissioners, the Executive Labor Arbiters and Labor Arbiters shall hold office during good behavior until they reach the age of sixty-five years, unless sooner removed for cause as provided by law or become incapacitated to discharge the duties of their office. The Chairman, the division Presiding Commissioners and other Commissioners shall be appointed by the President, subject to confirmation by the Commission on Appointments. Appointment to any vacancy shall come from the nominees of the sector which nominated the predecessor. The Executive Labor Arbiters and Labor Arbiters shall also be appointed by the President, upon recommendation of the Secretary of Labor and Employment and shall be subject to the Civil Service Law, rules and regulations. The Secretary of Labor and Employment shall, in consultation with the Chairman of the Commission, appoint the staff and employees of the Commission and its regional branches as the needs of the service may require, subject to the Civil Service Law, rules and regulations, and upgrade their current salaries, benefits and other emoluments in accordance with law. (As amended by Section 7, Republic Act No. 6715, March 21, 1989). ARTICLE 216. Salaries, benefits and other emoluments. - The Chairman and 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 Justice and Associate Justices of the Court of Appeals, respectively. The Executive Labor Arbiters shall receive an annual salary at least equivalent to that of an Assistant Regional Director of the Department of Labor and Employment and shall be entitled to the same allowances and benefits as that of a Regional Director of said Department. The Labor Arbiters shall receive an annual salary at least equivalent to, and be entitled to the same allowances and benefits as that of, an Assistant Regional Director of the Department of Labor and Employment. In no case, however, shall the provision of this Article result in the diminution of existing salaries, allowances and benefits of the aforementioned officials. (As amended by Section 8, Republic Act No. 6715, March 21, 1989). Chapter II POWERS AND DUTIES ARTICLE 217. Jurisdiction of the Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension,
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even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. (c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. (As amended by Section 9, Republic Act No. 6715, March 21, 1989). ARTICLE 218. Powers of the Commission. - The Commission shall have the power and authority: (a) To promulgate rules and regulations governing the hearing and disposition of cases before it and its regional branches, as well as those pertaining to its internal functions and such rules and regulations as may be necessary to carry out the purposes of this Code; (As amended by Section 10, Republic Act No. 6715, March 21, 1989). (b) To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of such books, papers, contracts, records, statement of accounts, agreements, and others 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; (c) To conduct investigation for the determination of a question, matter or controversy within its jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has been summoned or served with notice to appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearings to any time and place, refer technical matters or accounts to an expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded from the proceedings, correct, amend, or 70 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

waive any error, defect or irregularity whether in substance or in form, give all such directions as it may deem necessary or expedient in the determination of the dispute before it, and dismiss any matter or refrain from further hearing or from determining the dispute or part thereof, where it is trivial or where further proceedings by the Commission are not necessary or desirable; and (d) To hold any person in contempt directly or indirectly and impose appropriate penalties therefor in accordance with law. A person guilty of misbehavior in the presence of or so near the Chairman or any member of the Commission or any Labor Arbiter as to obstruct or interrupt the proceedings before the same, including disrespect toward said officials, offensive personalities toward others, or refusal to be sworn, or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to do so, may be summarily adjudged in direct contempt by said officials and punished by fine not exceeding five hundred pesos (P500) or imprisonment not exceeding five (5) days, or both, if it be the Commission, or a member thereof, or by a fine not exceeding one hundred pesos (P100) or imprisonment not exceeding one (1) day, or both, if it be a Labor Arbiter. The person adjudged in direct contempt by a Labor Arbiter may appeal to the Commission and the execution of the judgment shall be suspended pending the resolution of the appeal upon the filing by such person of a bond on condition that he will abide by and perform the judgment of the Commission should the appeal be decided against him. Judgment of the Commission on direct contempt is immediately executory and unappealable. Indirect contempt shall be dealt with by the Commission or Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court; and (As amended by Section 10, Republic Act No. 6715, March 21, 1989). (e) To enjoin or restrain any actual or threatened commission of any or all 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 irreparable damage to any party or render ineffectual any decision in favor of such party: Provided, That no temporary or permanent injunction in any case involving or growing out of a labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with opportunity for cross-examination, in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only after a finding of fact by the Commission, to the effect: (1) That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained, but no injunction or temporary restraining 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 committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof; (2) That substantial and irreparable injury to complainant s property will follow;
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(3) That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief; (4) That complainant has no adequate remedy at law; and (5) That the public officers charged with the duty to protect complainant s property are unable or unwilling to furnish adequate protection. Such hearing shall be held after due and personal notice thereof has been served, in such manner as the Commission shall direct, to all known persons against whom relief is sought, and also to the Chief Executive and other public officials of the province or city within which the unlawful acts have been threatened or committed, charged with the duty to protect complainant s property: Provided, however, that if 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 will be unavoidable, such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction upon hearing after notice. Such a temporary restraining order shall be effective for no longer than twenty (20) days and shall become void at the expiration of said twenty (20) days. No such temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an undertaking with adequate security in an amount to be fixed by the Commission sufficient to recompense those enjoined for any loss, expense or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs, together with a reasonable attorney s fee, and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the Commission. The undertaking herein mentioned shall be understood to constitute an agreement entered into by the complainant and the surety upon which an order may be rendered in the same suit or proceeding against said complainant and surety, upon a hearing to assess damages, of which hearing, complainant and surety shall have reasonable notice, the said complainant and surety submitting themselves to the jurisdiction of the Commission for that purpose. But nothing herein contained shall deprive any party having a claim or cause of action under or upon such undertaking from electing to pursue his ordinary remedy by suit at law or in equity: Provided, further, That the reception of evidence for the application of a writ of injunction may be delegated by the Commission to any of its Labor Arbiters who shall conduct such hearings in such places as he may determine to be accessible to the parties and their witnesses and shall submit thereafter his recommendation to the Commission. (As amended by Section 10, Republic Act No. 6715, March 21, 1989). ARTICLE 219. Ocular inspection. - The Chairman, any Commissioner, Labor Arbiter or their duly authorized representatives, may, at any time during working hours, conduct an ocular inspection on any establishment, building, ship or vessel, place or 71 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

premises, including any work, material, implement, machinery, appliance or any object therein, and ask any employee, laborer, or any person, as the case may be, for any information or data concerning any matter or question relative to the object of the investigation. [ARTICLE 220. Compulsory arbitration. - The Commission or any Labor Arbiter shall have the power to ask the assistance of other government officials and qualified private citizens to act as compulsory arbitrators on cases referred to them and to fix and assess the fees of such compulsory arbitrators, taking into account the nature of the case, the time consumed in hearing the case, the professional standing of the arbitrators, the financial capacity of the parties, and the fees provided in the Rules of Court.] (Repealed by Section 16, Batas Pambansa Bilang 130, August 21, 1981). ARTICLE 221. Technical rules not binding and prior resort to amicable settlement. In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. In any proceeding before the Commission or any Labor Arbiter, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise complete control of the proceedings at all stages. Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts towards the amicable settlement of a labor dispute within his jurisdiction on or before the first hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction. (As amended by Section 11, Republic Act No. 6715, March 21, 1989). ARTICLE 222. Appearances and Fees. (a) Non-lawyers may appear before the Commission or any Labor Arbiter only: 1. If they represent themselves; or 2. If they represent their organization or members thereof. (b) No attorney s fees, negotiation fees or similar charges of any kind arising from any collective bargaining agreement shall be imposed on any individual member of 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, agreement or arrangement of any sort to the contrary shall be null and void. (As amended by Presidential Decree No. 1691, May 1, 1980). Chapter III APPEAL
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ARTICLE 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: (a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; (b) If the decision, order or award was secured through fraud or coercion, including graft and corruption; (c) If made purely on questions of law; and (d) If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. In case of a judgment involving a monetary award, an appeal by the employer may 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 the monetary award in the judgment appealed from. In any event, the decision of the Labor Arbiter reinstating a dismissed or separated 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 separation or, at the option of the employer, merely reinstated in the payroll. The 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 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 receipt thereof. The Commission shall decide all cases within twenty (20) calendar days from receipt of the answer of the appellee. The decision of the Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties. Any law enforcement agency may be deputized by the Secretary of Labor and Employment or the Commission in the enforcement of decisions, awards or orders. (As amended by Section 12, Republic Act No. 6715, March 21, 1989). ARTICLE 224. Execution of decisions, orders or awards. (a) The Secretary of Labor and Employment or any Regional Director, the 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 judgment within five (5) years from the date it becomes final and executory, requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders or awards of the Secretary of Labor and Employment or regional director, the Commission, the Labor Arbiter or med-arbiter, or voluntary arbitrators. In any 72 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

case, it shall be the duty of the responsible officer to separately furnish immediately the counsels of record and the parties with copies of said decisions, orders or awards. Failure to comply with the duty prescribed herein shall subject such responsible officer to appropriate administrative sanctions. (b) The Secretary of Labor and Employment, and the Chairman of the Commission may designate special sheriffs and take any measure under existing laws to ensure compliance with their decisions, orders or awards and those of the Labor Arbiters and voluntary arbitrators, including the imposition of administrative fines which shall not be less than P500.00 nor more than P10,000.00. (As amended by Section 13, Republic Act No. 6715, March 21, 1989). ARTICLE 225. Contempt powers of the Secretary of Labor. - In the exercise of his powers under this Code, the Secretary of Labor may hold any person in direct or indirect contempt and impose the appropriate penalties therefor.

2005 REVISED RULES OF PROCEDURE OF THE NLRC: RULES I THROUGH XI (NO COPY YET)

JUSTIFICATION

NFL V. MOLE (1983) -company: Zamboanga Wood Products -SHORT FACTS: Zamboanga Wood Products asked SOLE to assume jurisdiction over the case it. After issuing RTWO, Company failed to comply with the same, even filing an MR. MOLE denied it.Company still failed to comply with it (even after 10 months from the issuance of the said order). Thus, NFL filed a mandamus case for the company to admit the striking employees back to work in accordance with the RTWO. WON the Union could compel the company to execute the RTWO? YES -it is provided by law -"The very nature of a return-to-work order issued in a certified case lends itself to no other construction. The certification attests to the urgency of the matter, affecting as it does an industry indispensable to the national interest. The order is issued in the exercise of the court's (?)compulsory power of arbitration, and therefore must be obeyed until set aside.

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To say that its effectivity must await affirmance on a motion for reconsideration is not only to emasculate it but indeed to defeat its import, for by then the deadline fixed for the return to work would, in the ordinary course, have already passed and hence can no longer be affirmed insofar as the time element is concerned." -It is quite apparent, therefore, why this case calls for prompt decision. After this long lapse of time, respondent Zamboanga Wood Products, Inc. had failed to abide by the clear and mandatory requirement of the law. It would negate the very purpose of a compulsory arbitration, which precisely is intended to call a halt to a pending strike by requiring that the status quo prior to its to live up to such a norm. The inconsistencies between what was sought by private respondent, namely, compulsory arbitration, and the failure to admit the striking employees back to work in the meantime, cannot be countenanced. As noted earlier, time is of the essence as far as the eightyone petitioners are concerned. PSBA V. NORIEL In the opinion of Acting Secretary Noriel, the labor dispute adversely affected the national interest, affecting as it did some 9,000 students. He was authorized by law to assume jurisdiction over the labor dispute, after finding that it adversely affected the national interest. This power is expressly granted by Art. 263(g) of the Labor Code. Acting Secretary Noriel did exactly what he was supposed to do under the Labor Code. Petitioner contends that the Acting Secretary erred when he found that the strike staged by respondent union and its members, who had already been restrained by the RTC from picketing and barricading the main gate of the school, was a fit subject of a return to work order. However, the Court finds that no error was made by the Acting Secretary. The RTC had no jurisdiction over the subject matter of the case filed by some PSBA students, involving as it does a labor dispute over which the labor agencies had exclusive jurisdiction. That the regular courts have no jurisdiction over labor disputes and to issue injunctions against strikes is well-settled. It may also be added that due to petitioner's intransigent refusal to attend the 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 only way of breaking the deadlock and maintaining the status quo ante pending resolution of the dispute. The Solicitor General was correct when he stated that by assuming jurisdiction over the labor dispute, the Acting Secretary of Labor merely provided for a formal forum for the parties to ventilate their positions with the end in view of settling the dispute. It is, therefore, error for the petitioners to allege that by the mere act of certifying a labor 73 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

dispute for compulsory arbitration and issuing a return to work order, the Minister of Labor and Employment thereby "enters the picture on the side of the Company," and violates the freedom of expression of workers engaged in picketing, "in utter subversion of the constitutional rights of workers." As contended by the SolGen, "there can be no such unconstitutional application (of BP 227) because all that Minister has done is to certify the labor dispute for arbitration and thereafter personally assume jurisdiction over it. He has not rendered any decision; he has not favored one party over the other. The exercise of the power, to be in full accord with the Constitution, must be with a view to the protection of labor: . . . It must be stressed anew, however, that the power of compulsory arbitration, while allowable under the [1973] Constitution, and quite understandable in labor disputes affected with a national interest, to be free from the taint of unconstitutionality, must be exercised in accordance with the constitutional mandate of protection to labor. The arbiter then is called upon to take due care that in the decision to be reached, there is no violation of "the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work." [Art. II, Sec. 9, 1973 Constitution.] It is of course manifest that there is such unconstitutional application if a law "fair on its face and impartial in appearance is applied and administered by a public authority with an evil eye and an unequal hand." [Yick Wo v. Hopkins, 118 U.S. 356, 372 (1886).] It does not even have to go that far. An instance of unconstitutional application would be discernible if what is ordained by the fundamental law, the protection of law, is ignored or disregarded. F: Union filed w/ DOLE a PETITION FOR DIRECT CERTIFICATION -Union subsequently filed NOTICE TO STRIKE w/ BLR: y Union busting y Coercion of employees y Harrassment -PSBA opposed, prayed the denial of Petition for direct certification: y Union did not represent majority of non-academic personnel, attaching a letter from one Sacro allegedly representing a group which composed the majority y The group represented by Sacro (PSBA-AL-Gro-WELL) filed its application for registration as a legitimate labor org w/BLR
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-Union, after voting 36 to 0, decided to go on strike -conciliation conferences held by BLR but to no avail -strike pushed through -complaint for ULP and for declaration of illegal strike w/ prayer for preliminary injunction filed by PSBA in NLRC -conciliation conferences against called but PSBA refused to attend the said conferences -some PSBA students filed before RTC Manila, seeking to enjoin Union and its members from maintaining and continuing w/ their picket and from barricading themselves in front of the school's main gate. TRO issued by court >PSBA filed a prayer, joining the students in their prayer for injunction and filed a crossclaim against union. >Union filed MTD: case involves labor dispute:: RTC has no jurisdiction >Acting SOLE Noriel: assumed jurisdiction, saying the labor dispute involves an industry imbued with national interest y School has more or less 9k students y Ongoing work stoppage unduly prejudices the students and will entail great loss in terms of time, effort and money to everyone concerned y School is engaged in the promotion of physical, intellectual and emotional well-being of the country's youth ...issued RTWO + ordered management to accept all returning employees ...parties enjoined to maintain status quo... -Union members returned to work BUT were allegedly prevented by PSBA from doing so -Union thus filed Motion for issuance of writ of execution -PSBA filed instant petition -SOLE Drilon: issued writ of execution -so PSBAmade its petition URGENT -Civil case before RTC dismissed for lack of jurisdiction -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 petitioner in contempt was filed by Union in DOLE -SOLE issued show cause order to PSBA, afterwards, SOLE Drilon issued order ordering petitioner to pay a fine of P10k and to immediately readmit striking employees w/ full backwages -so PSBA again amended its petition, providing supplements... ON THE LETTER OF REP. JABAR AND THE SUBSEQUENT ASSUMPTION OF JURISDICTION OF SOLE -f: Rep. Jabar, Vice-president of FFW, wrote to SOLE Drilon, saying that the Union members were picketing peacefully but Policed authorities have been prohibiting them from engaging in peaceful picketing and that management refused to attend the conciliation conferences. He then asked SOLE Drilon to issue RTWO and early CE 74 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-PSBA argued that this was against Art VI, Section 14 H: The argument is based on a wrongful premise that SOLE Drilon's only reason for assuming jurisdiction is the letter by Rep. Jabar. However, it was shown that the Union petitioned for its direct certification; it filed a notice of strike; conciliation conferences were held but to no avail (so basically summarized all the proceedings before and during the petition was filed with the SC) -given these circumstances, the existence of an unresolved labor dispute in PSBA needed the immediate attention of the labor authorities -In SOLE Noriel's opinion, the labor dispute adversely affected the national interest. -SOLE was authorized to assume jurisdiction over the labor dispute, after finding that it adversely affected national interest -legal basis: Art 263 (g) ON WON ACTING SOLE ERRED IN FINDING THAT THE STRIKE WAS A FIT SUBJECT OF A RTWO: a. RTC was w/o jurisdiction over the subject matter of the case: it involved a labor dispute over which the labor agencies had exclusive jurisdiction b. Due to PSBA's refusal to attend the conciliation conferences even after the union struck, assujption of jurisdiction by SOLE and the issuance of RTWO had become the only way of breaking the deadlock and maintaining status quo c. By assuming jurisdiction over the labor dispute, SOLE merely provided a formal forum for the parties to ventilate their positions w/ the end view of settling the dispute ON WON ACTING SECRETARY ERRED WHEN HE ORDERED PETITIONER TO ACCEPT ALL RETURNING EMPLOYEES DESPITE THE PENDENCY OF THE CASE FOR ULP H: no GADALEJ -all the circumstances in this case, taken together, reveal the intensity of the dispute and how it had worsened, which virtually left the Acting SOLE w/ no recourse but to assume jurisdiction over it -Acting SOLE merely implemented the clear mandate of the law: from time of assumption of jurisdiction, SOLE would order all the striking employees to return to work and for the employer to readmit the striking employees

MANILA CORDAGE V. CIR (1971) The purpose of a presidential certification is nothing more than to bring about soonest, thru arbitration by the industrial court, a fair and just solution of the differences between an employer and his workers regarding the terms and conditions of work in the industry concerned which in the opinion of the President involves the national interest, so that the damage such employer-worker dispute
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might cause upon the national interest may be minimized as much as possible, if not totally averted by avoiding the stoppage of work as a result of a strike or lock out or any lagging of the activities of the industry or the possibility of these contingencies which might cause detriment to such national interest. This is the foundation of that court's jurisdiction in what may be termed as a certification case. Naturally, if the employer and the workers are able to arrive at an amicable settlement by free and voluntary collective bargaining preferably thru a labor union, before the court is able to use its good offices, it is but in consonance with the objective of the Industrial Peace Act to promote unionism and free collective bargaining that the court should step out of the picture and declare its function in the premises at an end, except as it may become necessary to determine whether or not the agreement forged by the parties is not contrary to law, morals or public policy. F: factual background not stated because the lower court failed to make a finding on the principal factual issue raised by Union -Manila Cordage and the labor union had a labor dispute: Union declared a strike against the company. -Labor Union and the company allegedly entered into an agreement which provides the ff: 1. The Unin shall call off and withdraw the picketing at the company premises and officially terminate the strike 2. The Company agrees to accept on a staggered basis all the employees who have not returned to work 3. The company reserves the right to prosecute all teh cases the company has filed and are pending... 4. The Union assures and guarantees the re-establishment and maintenance of industrial peace 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 -RTW provision in agreement immediately duly implemented, other than the respondents herein -President certified the said dispute for compulsory arbitration to CIR -Manila Cordage wrote to the President to withdraw or recall the certification. Even with endorsement by Executive Secretary to the SOLE, President did not act on the said request

-pending proceedings, a new CBA was signed between those who signed the RTW agreement, except that, on behalf of the union, a certain Adolfo Espano signed additionally as Exec. VP and none of the directors were included -in 2 successive months, Manila Cordage again sought to take the case out of CIR by either dismissal or suspension of the proceedings y The same persons who allegedly represented the Union filed a manifestation to the effect that there exists no labor dispute between the Company and the employees -In the petition by Manila Cordage, there was mention of a so-called "small group of strikers - being represented by Atty. Israel Bocobo", evidently the one referred to in the questioned order of the CIR as "200" others . The said "200" strikers actually took part in the hearing , alleging that there was a TABUYAN GROUP which alleged that even before the Presidential Certification for compulsory arbitration, there was already a RTW agreement between them and the management. However, the "200" strikers had nothing to do with the Tabuyan Group. The "200" strikers further alleged that the Tabuyan group is a spurious group headed by strike-breakers and the 200 strikers does not recognize the agreement. (thus there was still a strike when the President certified the dispute for compulsory arbitration to CIR) -CIR first order: upheld the President's order certifying the dispute to compulsory arbitration ...the number of employees involved in the case is immaterial. Sectionj 10 of RA 875 merely requires that the labor dispute involve an industry indispensable to the national interest. President found that the business of the company is such industry ...on theory of exhaustion of administrative remedies (since President has not yet acted on their MR on the assumption of jurisdiction): Court may proceed to exercise jurisdiction provided the rights of the parties are not thereby prejudiced and vital industrial peace as well as pre-conflict operation of the business concerned is restored. IF President recalls the certification, the parties may revert to their positions prior thereto. ...the existence of the RTW agreement does not bar a presidential certification of the dispute inasmuch as the "relations between capital and labor are not merely contractual, they are also impressed w/ public interest ...but the workers who have been charged w/ criminal offenses in the conduct of the strike should not return to work for the meanwhile ...ENDING: MTD and/or suspend the proceedings is hereby denied WON CIR HAS NO JURISDICTION TO GIVE DUE COURSE TO TEH PRESIDENTIAL CERTIFICATION -ARGUMENT: y There is no labor dispute y The business of the company is not indispensable to the national interest y Dispute invloves only a minority faction in the Union y Assumption of jurisdiction was set at naught by the RTW Agreement
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H: SEPARATION OF POWERS stops the court from ruling on the validity of the assumption of jurisdiction by the Prexi 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 Court merely for the reason that in his opinion, the same is w/o sufficient factual or legal basis. -on FACTUAL ISSUE NOT RESOLVED: on WON Tabuyan and his co-signers were legitimate officers of the respondent Union to validly represent the Union in the signing of the disputed agreement 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 were indeed authorized to sign the agreements with the company in behalf of its members y If it is so authorized, then CIR would not have jurisdiction, or could have suspended the proceedings before it due to the signed CBA and the RTW agreement y If they are not authorized, the jurisdiction remained -purpose of presidential certification: nothing more than to bring about soonest, thru arbitration by the industrial court, a fair and just solution of the differences between an employer and his workers regarding the terms and conditions of work in the industry concerned which in the opinion of the President involves the national interest, so that the damage such employer-worker dispute might cause upon the national interest may be minimized as much as possible, if not totally averted by avoiding the stoppage of work as a result of a strike or lock out or any lagging of the activities of the industry or the possibility of these contingencies which might cause detriment to such national interest. This is the foundation of that court's jurisdiction in what may be termed as a certification case. -if there is indeed a valid CBA entered between the parties, no need for the certification to Compulsory arbitration: the entering into a voluntary and valid collective bargaining agreement between an employer and a labor union of its workers before or after a presidential certification is issued under Section 10 of the 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 public policy, should such question be raised by any of the parties, and in this connection and with respect to the laborers or workers, whether the question be raised by the Union as such or by any of the members thereof. ON ARGUMENT THAT MERELY "200" EMPLOYEES - A MINORITY - PRAYED FOR THE SAID CERTIFICATION BY THE PRESIDENT: MAJORITY rule is not an absolute on in labor cases of this kind. Any number of members of a labor union may question, in 76 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

the appropriate cases, any agreement entered into by its officers or the majority if it is contrary to law, morals or public policy. Dispositive: affirm as to RTWO, except to the 33 strikers who are criminally charged And remand the case to Court! INITIATING PARTY Initiated by the Secretary of Labor or the President. 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.

1. DOLE SECRETARY A263 (G) When, in his OPINION, there exists a LABOR DISPUTE causing or likely to cause a STRIKE OR LOCKOUT in an INDUSTRY INDISPENDSABLE TO THE NATIONAL INTERESTS, The Secretary of Labor and Employment MAY 1. assume jurisdiction over the dispute and decide it OR 2. certify the same to the Commission (NLRC) for COMPULSORY ARBITRATION. Such assumption or certification shall have the effect of: AUTOMATICALLY enjoining the intended or impending strike or lock-out as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, 1. All striking or locked-out employees shall IMMEDIATELY RETURN TO WORK 2. AND the employer shall IMMEDIATELY resume operations and READMIT all workers under the SAME terms and conditions prevailing before the strike or lock-out. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure the compliance with this provision as well as with such orders as he may issue to enforce the same. In line with the national concerns for and highest respect accorder to the right of patients to life and health, strikes and lock-outs in HOSPITALS, CLINICS, and SIMILAR MEDICAL INSTITUTIONS SHALL, to every extent possible, BE AVOIDED, and all serious efforts, not only by labor and management but government as well, be

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exhausted to SUBSTANTIALLY MINIMIZE, if not prevent, their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right to strike and by management to lockout. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, 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 personnel, 2. Whose movement and services shall be unhampered and unrestricted, as are 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 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 are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of back wages, damages and other affirmative relief, even criminal prosecution against either or both of them. 2. PRESIDENT A263 (G) The foregoing notwithstanding, the President of the Philippines shall not be precluded 1. From DETERMINING THE INDUSTRIES that, in HIS OPINION, are indispensable to the national interest, and 2. From intervening at any time and assuming jurisdiction over such labor dispute in order to settle or terminate the same. SAULOG V. LAZARO (1984) -Union members held a strike (it appears that the Union held a strike because of nonpayment of benefits and allowances in accordance with a supplemental CBA). Mediation and conciliation proceedings were conducted but to no avail. After all efforts exerted, MOLE issued RTWO. MOLE also ordered that the dispute be submitted for arbitration. Accordingly, the parties filed their position papers, with the company even asking for the dismissal of the complaint of Robert Arevalo

(representing the employees) allegedly on the ground that there was improper class suit, aside from assailing the jurisdiction of the MOLE -MOLE issued a resolution which ordered the employer to pay the allowances and benefits, allegedly according to a supplemental CBA -the MOLE issued a RTWO even w/o a formal complaint or a notice of strike filed in his office WON A FORMAL COMPLAINT OR A NOTICE OF STRIKE IS REQUIRED BEFORE THE MOLE COULD ASSUME JURISDICTION? NO The petitioner has not shown that its business of public transportation covering not only the entire province of Cavite but also connecting Cavite to Metro Manila and to various other provinces and cities is not covered within the meaning and purview of "vital industries" under Section 2(e) of the Rules and Regulations Implementing 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 all forms of strikes, picketing, and lockouts found in said decrees which were applicable at that time. WON THE MOLE FAILED TO COMPLY FIRST WITH THE REQUIREMENTS BEFORE IT COULD ASSUME JURISDICTION? NO The petitioner contends that the Minister acted even before three conditions necessary to confer jurisdiction were present, namely: (1) Conciliation and mediation over the labor disputes must first be exerted; (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 the reglementary period; and (3) Assumption of jurisdiction may be made only upon the advice and recommendation of the Under Secretary of Labor and Employment, the Chairman of the National Labor Relations Commission, and the Director of the Bureau of Labor Relations. HERE: efforts at mediation and conciliation had already been taken but the same were not successful. Significantly, the return to work order expressly declared that the Ministry of Labor and Employment shall continue its conciliation efforts and would still try to bring about an amicable settlement even at that stage. More conciliation conferences actually followed the return to work order but the parties remained deadlocked on the main issues. There was, therefore, a failure to resolve the disputes through the very methods which the petitioner now claims should first have been applied - Confronted with the strike which virtually paralyzed the transportation services of the petitioner and taking into account the inability of his Ministry's intervention to bring about an amicable settlement between the parties, the Minister rightly assumed jurisdiction. He did not have to wait for any notice of strike or formal complaint about a strike already in progress before he could exercise the powers
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given to him by law to avoid the strikes, picketing, or lockouts contemplated in the grant of power. -MOLE DOESN T HAVE TO WAIT: An actual strike effectively paralyzing an industry where strikes were not allowed and compulsory arbitration was mandated, called for his immediate action. SAULOG NOW ESTOPPED FROM ASSAILING JURISDICTION OF MOLE: IT PRAYED FOR AFFIRMATIVE RELIEF -a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and after failing to obtain such relief, repudiate or question that same jurisdiction. WON THE CASE FILED BY ROBERT AREVALO IS A VALID CLASS SUIT? YES -there was an agreement between the parties to limit the number of representatives of the striking employees. The representatives chose Robert Arevalo to be their leader and the spokesman for all the strikers. It is true that the private respondents failed to state their individual names as the real parties in interest when their position paper was filed. However, this defect was cured because the respondent Minister, taking cognizance of the petitioner's objections, ordered the respondents to specify who were the "complainants numbering about 250 more or less (who) are all regular drivers, conductors, conductresses, and mechanics of respondent and is (sic) represented by their leader Robert Arevalo ..." ON ARGUMENT THAT THE EXCLUSIVE BARGAINING REPRESENTATIVE IS THE REAL PARTY IN INTEREST, NOT THE EMPLOYEES REPRESENTED BY ROBERT AREVALO? NO MERIT - it does not appear from the records that the respondents are members thereof. WON THERE WAS A VIOLATION OF DUE PROCESS ON THE PART OF SAULOG? NO -the petitioner was initially given the chance to air its views during the conference presided by Brigadier General Prosper Olivas. There were various other occasions during the proceedings below not only at the conciliation conferences but before the respondent Minister and the respondent Presidential Assistant where the petitioner not only had the opportunity to be heard but where it was actually heard. -Saulog submitted a petition paper, a MR, UNION OF FILIPRO EMPLOYEES VS. NESTLE PHILIPPINES (1990) F: Due to the impending expiration of the existing collective bargaining agreement (CBA) between Nestlé and UFE-DFA-KMU, the Presidents of the Alabang and Cabuyao Divisions of UFE-DFA-KMU, informed Nestlé of their intent to open our 78 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

new Collective Bargaining Negotiation for the year 2001-2004 x x x as early as June 2001. - Nestlé acknowledged receipt of the aforementioned letter. It also informed UFEDFA-KMU that it was preparing its own counter-proposal and proposed ground rules that shall govern the conduct of the collective bargaining negotiations. - Nestlé underscored its position that unilateral grants, one-time company grants, company-initiated policies and programs, which include, but are not limited to the Retirement Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their very nature not proper subjects of CBA negotiations and therefore shall be excluded therefrom. - In addition, it clarified that with the closure of the Alabang Plant, the CBA negotiations will only be applicable to the covered employees of the Cabuyao Plant; hence, the Cabuyao Division of UFE-DFA-KMU became the sole bargaining unit involved in the subject CBA negotiations. - Thereafter, dialogue between the company and the union ensued. - Nestlé, claiming to have reached an impasse in said dialogue, requested the National Conciliation and Mediation Board to conduct preventive mediation proceedings between it and UFE-DFA-KMU. - Conciliation proceedings nevertheless proved ineffective. Complaining, in essence, of bargaining deadlock pertaining to economic issues, i.e., retirement (plan), panel composition, costs and attendance, and CBA, UFE-DFA-KMU filed a Notice of Strike . - 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 that it was setting pre-conditions in the ground rules by refusing to include the issue of the Retirement Plan in the CBA negotiations. - In view of the looming strike, Nestlé filed with the DOLE a Petition for Assumption of Jurisdiction - Sto. Tomas issued an Order assuming jurisdiction over the subject labor dispute between the parties stating that any strike or lockout is enjoined, that the parties are further directed to meet and convene for the discussion of the union proposals and company counter-proposals before the National Conciliation and Mediation Board and that if no settlement of all the issues is reached, the Office shall define the outstanding issues and order the filing of position papers for a ruling on the merits. - UFE-DFA-KMU sought reconsideration of the Assumption of Jurisdiction Order - In an Order, Sec. Sto. Tomas denied the aforequoted motion for reconsideration - The employee members of UFE-DFA-KMU at the Nestlé Cabuyao Plant went on strike. - Notwithstanding a Return-To-Work Order, the members of UFE-DFA-KMU continued with their strike and refused to go back to work as instructed. Thus, Sec. Sto. Tomas sought the assistance of the Philippine National Police (PNP) for the enforcement of said order.
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- At the hearing called, Nestlé and UFE-DFA-KMU filed their respective position papers. - Tomas denied the motion for reconsideration of UFE-DFA-KMU. - Frustrated with the foregoing turn of events, UFE-DFA-KMU filed a petition for certiorari with application for the issuance of a temporary restraining order or a writ of preliminary injunction before the Court of Appeals. - Meanwhile, in an attempt to finally resolve the crippling labor dispute between the parties, then Acting Secretary of the DOLE, Hon. Arturo D. Brion, came out with an Order - UFE-DFA-KMU moved to reconsider the aforequoted position of the DOLE. - Secretary of the DOLE, Hon. Sto. Tomas, issued the last of the assailed Orders. This order resolved to deny the preceding motion for reconsideration of UFE-DFA-KMU. - Undaunted still, UFE-DFA-KMU, for the second time, went to the Court of Appeals - The Court of Appeals, acting on the twin petitions for certiorari, determined the issues in favor of UFE-DFA-KMU - Dissatisfied, both parties separately moved for the reconsideration of the abovequoted decision - The Court of Appeals stood pat in its earlier pronouncements and denied the motions for reconsideration ISSUES 1. WON the Retirement Plan was a proper subject to be included in the CBA negotiations between the parties hence, negotiable. 2. WON the assumption powers of the Secretary of Labor and Employment should have been limited merely to the grounds alleged in the second Notice of Strike 3. WON Nestlé was guilty of unfair labor practice HELD 1. YES - In Nestlé Philippines, Inc. v. NLRC, ironically involving the same parties herein, the Court has had the occasion to affirm that a retirement plan is consensual in nature. The Court, through Madame Justice Griño-Aquino, declared that: The fact that the retirement plan is non-contributory, i.e., that the employees contribute nothing to the operation of the plan, does not make it a non-issue in the CBA negotiations. As a matter of fact, almost all of the benefits that the petitioner has granted to its employees under the CBA salary increases, rice allowances, midyear bonuses, 13th and 14th month pay, seniority pay, medical and hospitalization plans, health and dental services, vacation, sick & other leaves with pay are non-contributory benefits. Since the retirement plan has been an integral part of the CBA since 1972, the Union s demand to increase the benefits due the employees under said plan, is a valid CBA issue.

x x x [E]mployees do have a vested and demandable right over existing benefits voluntarily granted to them by their employer. The latter may not unilaterally withdraw, eliminate or diminish such benefits - In the case at bar, it cannot be denied that the CBA that was about to expire at that time contained provisions respecting the Retirement Plan. As the latter benefit was already subject of the existing CBA, the members of UFE-DFA-KMU were only exercising their prerogative to bargain or renegotiate for the improvement of the terms of the Retirement Plan just like they would for all the other economic, as well as non-economic benefits previously enjoyed by them. - The purpose of collective bargaining is the acquisition or attainment of the best possible covenants or terms relating to economic and non-economic benefits granted by employers and due the employees. The Labor Code has actually imposed as a mutual obligation of both parties, this duty to bargain collectively. - The duty to bargain collectively is categorically prescribed by Article 252 of the said code. It states: ART. 252. MEANING OF DUTY TO BARGAIN COLLECTIVELY. The duty to bargain collectively means the performance of a mutual obligation to meet and confer promptly and expeditiously and in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreement if requested by either party, but such duty does not compel any party to agree to a proposal or to make any concession. - Further, Article 253, also of the Labor Code, defines the parameter of said obligation when there already exists a CBA, viz: ART. 253. DUTY TO BARGAIN COLLECTIVELY WHEN THERE EXISTS A COLLECTIVE BARGAINING AGREEMENT. The duty to bargain collectively shall also mean that either party shall not terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the sixty day period and/or until a new agreement is reached by the parties. - In demanding that the terms of the Retirement Plan be opened for renegotiation, the members of UFE-DFA-KMU are acting well within their rights as we have, indeed, declared that the Retirement Plan is consensual in character; and so, negotiable. 2. NO. - Declaring the Secretary of the DOLE to have acted with grave abuse of discretion for ruling on substantial matters or issues and not restricting itself merely on the ground rules, the appellate court and UFE-DFA-KMU would have the Court treat the subject labor dispute in a piecemeal fashion.
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- The power granted to the Secretary of the DOLE by Paragraph (g) of Article 263 of the Labor Code, authorizes her to assume jurisdiction over a labor dispute, causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and correlatively, to decide the same. - 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 UFEDFA-KMU, the Secretary of the DOLE rightly decided on matters of substance. - 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 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 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. 3. NO. - Basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same. By imputing bad faith unto the actuations of Nestlé, it was UFE-DFA-KMU, therefore, who had the burden of proof to present substantial evidence to support the allegation of unfair labor practice. - A perusal of the allegations and arguments raised by UFE-DFA-KMU in the Memorandum will readily disclose that it failed to discharge said onus probandi as there is still a need for the presentation of evidence other than its bare contention of unfair labor practice in order to make certain the propriety or impropriety of the unfair labor practice charge hurled against Nestlé. - There is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts, to be precise, the crucial question of whether or not a party has met his statutory duty to bargain in good faith typically turns on the facts of the individual case. Necessarily, a determination of the validity of the Nestlé s proposition involves an appraisal of the exercise of its management prerogative. - Employers are accorded rights and privileges to assure their self-determination and independence and reasonable return of capital. This mass of privileges comprises the so-called management prerogatives. In this connection, the rule is 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 circumventing the rights of employees under the law or a valid agreement, such exercise will be upheld. Disposition Petition seeking that Nestlé be declared to have committed unfair labor practice was DENIED. The Petition was PARTLY GRANTED, the ruling of the Court of Appeals was REVERSED in so far as it ruled that the Secretary of the DOLE gravely 80 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

abused her discretion in failing to confine her assumption of jurisdiction power over the ground rules of the CBA negotiations; but the ruling of the Court of Appeals on the inclusion of the Retirement Plan as a valid issue in the collective bargaining negotiations between UFE-DFA-KMU and Nestlé is AFFIRMED.

INTERNATIONAL PHARMACEUTICALS VS. SOLE (1992)

FEATI UNIVERSITY VS. BAUTISTA (1966)

MANILA CORDAGE VS. CIR (1971)

VOLUNTARY ARBITRATION Notes: ARBITRABLE ISSUES Art. 261 EOJ over y All unresolved grievances arising from y Interpretation or implementation of CBA y Interpretation and enforcement of company personnel policies y Violations of CBA not anymore ULP X: Gross violations of CBA: flagrant and malicious refusal to comply with the economic provisions of the CBA -NLRC, its regional offices and Regional Directors should not entertain disputes under EOJ of VA and should immediately refer it to VA Art. 262: Also, if parties agree, all other labor disputes including ULP and bargaining deadlocks may be included w/n jurisdiction of VA

ETERNIT EMPLOYEES AND WORKERS UNION V. JESUS DE VEYRA Summary: Union filed complaint to claim benefits from Employer but some were 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 present additional evidence to prove their claims but the VA still found that their
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evidence were not sufficient. They now alleged GADALEJ on the part of the VA for requiring them to present evidence when it should have been the ER who would prove their claim. Court held no GADALEJ because the Union was the one in fact who were requesting to present evidence and they could not now contest the decision of the VA that they have not presented evidence sufficient to prove their claims. FACTS -petition for certiorari under R654: annulment of the order of the voluntary arbitrator -Petitioner: Labor union -ER: Corporation engaged in the manufacture of asbestos cement products -Dispute: Some CBA provisions were not followed by the Corporation -so Union filed complaint w/ Ministry of Labor -case was certified for VA -Issues submitted for resolution: Privilege of buying second class sheets Overtime work on Saturday Cash value of unused vacation and sick leave Right of 23 reinstated employees to vacation and sick leave 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) -union filed Motion to re-open case w/ re issue no. 2 (dated April 11) -VA granted, allowed petitioner to present its evidence on overtime work -VA (2nd Award, dated January 1979): affirmed earlier decision -Union filed R65 petition: GADALEJ because they were required to present evidence on overtime work when company already admitted that it had in fact overpaid petitioner's claim for overtime work (the members of the union actually worked on 22 Saturdays - as proven by the time cards plus a joint affidavit by 150 employees -Arbitrator argued that the time cards are defective: There should be 3,300 time cards (22 Saturdays for 150 employees) and not 589 That there were 589 timecards allegedly rescued before they were to be burned Time cards were picked up at random Inspected one of the timecards, showed that the employees did not work on 22 Saturdays and so the joint affidavits contained falsity WON GADALEJ on part of arbitrator? NO 81 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

The voluntary arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority subject to the certiorari jurisdiction of the court -includes not merely the determination of the question of whether or not the claim is to be granted but also, in the affirmative case, the amount thereof (Sime Darby Pilipinas v. Magsalin) -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 effect in their submission agreement as in the present case -purpose of arbitration: preserve industrial peace and avoid unnecessary litigation between the parties -on claim that the union should not be compelled to present evidence: basic rule in evidence that each party must prove that he is entitled to the same. -records show that after the issuance of the award by the VA, the union on its own initiative moved to reopen the case and manifested that it will present newly discovered evidence. NOW that it was allowed to odo so, it cannot alleged that they have no legal obligation to show evidence -No arbitrariness on part of arbitrator because proceedings considered in totality. Computation of salaries, allowances and even OT are factual questions submitted before VA. Court had no authority to evaluate the sufficiency of evidence before a labor officer. Given highest respect

MANEJA V. NLRC Summary: Maneja and another telephone operator were dismissed from service so they filed a case against their employer before LA. They were allegedly dismissed in accordance with company personnel policies so the LA said he actually has no jurisdiction over the case but assumed the same nevertheless because he has jurisdiction over termination disputes. Appealed to NLRC, NLRC reversed LA saying that the case should have underwent VA. On appeal, court held that the termination dispute is w/n LA s jurisdiction because this case does not involve an unresolved grievance involving company personnel policy (Art 217c read w/ 261). Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up the Collective Bargaining Agreement or by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter. Facts: Maneja was a telephone operator in Manila Midtown Hotel. On 13 Feb 1990, fellow telephone operator Loleng received a request for long distance call (RLDC) form and P500 deposit from hotel guest Ieda, brought by a page boy. The call was unanswered, the P500 forwarded to the cashier. Another RLDC form and P500
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deposit was given by Ieda, through a page boy, but the call was again unanswered. Maneja followed the call up. -Hotel cashier inquired upon P1000 deposit 15 Feb. Loleng found the P500 deposit inserted in the guest folio while the second P500 was discovered inside the folder for cancelled calls. -alleged act of tampering (admitted): Maneja saw that the 2nd RLDC was not timestamped, so she time-stamped it. But seeing that the date was wrong, she changed the date, then delivered it with the money to the cashier. The second deposit was returned to Ieda. -Chief telephone operator issued a memorandum to Loleng and Maneja to explain the 15 Feb incident. Both submitted their written explanations but after that, the Chief telephone operator made a report and recommendation terminating the two on alleged violations of the Offenses Subject to Disciplinary Actions (OSDA). Notice of termination issued to them, which they refused to sign saying it was still under protest. The company even filed a criminal case for estafa against them but were dismissed in the prosecutor level. -Maneja filed a case for illegal dismissal before the LA (which later included complaint for unpaid wages, unpaid vacation leave conversion and moral damages) -position papers were submitted, case set for hearing, trial on the merits ensued LA: Maneja was illegally dismissed and actually, he has no jurisdiction to try the case since it involved the implementation and interpretation of company personnel policies BUT NEVERTHELESS, he assumed jurisdiction because they have EOJ over termination cases. Employer appealed to NLRC NLRC: LA had no jurisdiction because it should have undergone VA. MR denied so went to SC for R65 GADALEJ ISSUE 1. WON LA had jurisdiction over illegal dismissal case 2. WON Maneja was illegally dismissed HELD YES A. THIS IS NOT AN UNRESOLVED GRIEVANCE AND THE INTERPRETATION AND IMPLEMENTATION OF COMPANY PERSONNEL POLICY WAS MERELY A COROLLARY ISSUE ART 217: Rule on Jurisdiction of LA Art. 217. Jurisdiction of Labor Arbiters and the Commission. a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decided within thirty (30) calendar days after the submission of the case by the parties for decision without extension even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 82 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. termination cases fall squarely w/n jurisdiction of LA Art. 217 c should be read in conjunction w/ Art 261 which provides that the VA has jurisdiction over UNRESOLVED GRIEVANCES arising from the interpretation and implementation of company personnel policies -Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up the Collective Bargaining Agreement or by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter. -why not an unresolved grievance arising from the interpretation and implementation of the CBA/company personnel policy: grievance procedure not resorted to because there was a practice in the hotel that in questioning the legality of a termination, the dismissed employee would automatically go to the LA, whether the termination arose from the interpretation or implementation of 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 (Pantranco North Star v. NLRC) B. COMPANY ESTOPPED BY LACHES FROM QUESTIONING THE JURISDICTION OF THE LA -Company actively participated in the proceedings before the LA and has not questioned the jurisdiction of the LA during the said proceedings so should not have been allowed to question it.
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2. YES requisites of a valid dismissal: (1) the dismissal must be for any of the causes expressed in the Article 282 of the Labor Code, and (2) the employee must be given an opportunity to be heard and to defend himself (1) GROUNDS for dismissal: a. culpade carelessness, negligence, failure to follow specific instruction(s) or established procedure(s) under OSDA 1.11 b. having forged or falsified official document(s) under OSDA 2.01. HERE: -It was shown that the usual procedures for requests for long distance calls were not usually followed in the hotel when circumstances warrant. For instance, the RLDC forms and the deposits are brought by the page boy directly to the operators instead of the cashiers if the latter are busy and cannot attend to the same. Furthermore, she avers that the telephone operators are not concious of the serial numbers in the RLDCs and at times, the used RLDCs are recycled. Even the page boys do not actually check the serial numbers of all RLDCs in one batch, except for the first and the last. -On charges of taking money: all the money were accounted for -on the alleged tampering: they admitted the tampering of the altered date to reflect the true date of the transaction without malice on their part (2) on Due process requirements: not sufficient -no hearing was ever conducted by private respondent before petitioner was dismissed. While it may be true that petitioner submitted a written explanation, no hearing was actually conducted before her employment was terminated. She was not accorded the opportunity to fully defend herself. -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 the management to enable hom to prepare adequately for his defense, including legal representation.

PAL V. NLRC (1997) [CBA VIOLATIONS] Violations of collective bargaining agreements were no longer deemed unfair labor practices - except those gross in character i. e. flagrant and malicious refusal to comply with the economic provisions thereof - and were considered mere grievances resolvable through the appropriate grievance machinery, or voluntary arbitration provided in the CBA. Facts: 83 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-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 Stationof PAL -PAL conducted an audit check of its Davao Station and found that some of its employees procured for themselves teh money paid by the passengers for their tickets and then charged the said tickets to their or their co-employees' credit cards. -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 coupon, and "Cash" or no entry in the flight coupon. -how discovered: 80The flight coupon and audit coupon of the tickets revealed different entries in the "Form of Payment" box. In the flight coupon, the box is either empty or carries the notation "Cash". In the audit coupon, the mode of payment reflected is either "Cash/Charge" or "Charge" only. -Micabalo was investigated and was found to have used his VISA credit card to pay for 4 plane tickets of various passengers. He was administratively charged for violation of PAL's Code of Discipline.Micabalo was placed under preventive suspension -Micabalo alleged that he was just paying at the request of the said passengers and that he did not pocket any cash payment because there weren't any. Further, he did not intend to defraud the company and was merely rendering public service so he contests the application to him of Section 5 Article 8 of the Code of Discipline -on falsification charges: he changed the entry in the audit coupon to speak the truth -Micabalo was charged with the same charges of fraud and falsification for 2 more times -he was later on served with notice of dismissal -The same situation was found with Enriquez, and the same made the similar defense that he was just using his credit card to accommodate a friend. He was also dismissed -PAL also dismissed 5 other employees -4 employees joined Micabalo and Enriquez for filing illegal dismissal cases against PAL before Regional Arbitration branch of NLRC - for all the employees (except Micabalo and Enriquez), PAL agreed to consider them resigned w/o benefits and to desist from filing any criminal case against them -so Micabalo and Enriquez alleged that the charges against them were brought because of their membership in the union: filed before LA ULP and illegal termination cases LA: ifo Ees - they were illegally dismissed -the investigation conducted by the ER were the offshoot of several grievance suits filed by PAL as well as the Ees active participation in the strike held in 1989 (which LA found to be highly suspicious) -no damage shown to have been caused to PAL
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-Ees should be reinstated NLRC: affirmed WON the NLRC committed grave abuse of discretion amounting to excess of or want of jurisdiction when it affirmed the Labor Arbiter's decision that private respondents were illegally dismissed? YES -NLRC acted with GAD in rendering the assailed Resolution as the same is not supported by substantial evidence. As correctly observed by the SolGen, the NLRC and the LA committed GAD when they gave more credence to the illogical suppositions and inferences proffered by private respondents and disregarded the established evidence that they committed falsification and diverted the cash payments made by the passengers through the use of credit cards for their personal 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 officials perpetrated to pursue personal gains. -PAL presented concrete evidence of repeated wrong doings by private respondents. The different entries in the box for the mode of payment for the tickets purchased found in the audit coupon and the flight coupon clearly showed the falsifications committed by private respondents. Indeed, the private respondents admitted these falsifications. Micabalo cannot pull a hat trick by alleging "the discrepancy between the entries in the audit coupon and flight coupon of the subject tickets was not intended to conceal an irregularity, rather it was intended to reveal an irregularity inadvertently committed." Enriquez was more candid. He conceded that "while it might be true that there was some sort of falsification, the same was done in good faith with no intention at all to cause damage to anybody. . . . The change of entry in the ticket from charge to cash was made only to facilitate the return of the money to the card holder, never to cause damage to any person or the company." It was only after these irregularities were discovered and only after proper investigation were the private respondents 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 respondents have complained that they are the subject of harassment by PAL for their union activities. -Violation of CBA: Thus, as of March 21, 1989, violations of collective bargaining agreements were no longer deemed unfair labor practices - except those gross in character - and were considered mere grievances resolvable through the appropriate grievance machinery, or voluntary arbitration provided in the CBA. Jurisdiction over such violations was withdrawn from the Labor Arbiters and vested in the voluntary arbitrator, the former (including the Commission itself, its Regional Offices, and the Regional Directors of the Department of Labor and Employment) being in fact enjoined not to "entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrators or panel of Voluntary Arbitrators and *** (instead) immediately dispose and refer the same to the 84 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement." -PAL may not be regarded as precluded from impugning the jurisdiction of the Arbiter and the Commission because, at the time that the proceedings were initiated before the former, adjudged by him, and thereafter appealed to and resolved by the latter adversely to PAL, the law amending their jurisdiction (R.A. 6715) had not come into effect. -As already observed, it was only after PAL's motion for reconsideration of November 21,1988 had been filed and was awaiting resolution before the NLRC that said law became effective, on March 21, 1989. Under the circumstances, no estoppel of the right to question jurisdiction can be ascribed to PAL. ARBITRATOR 1. Selection A260 1) As stated in CBA (or selection procedure of a VA), preferably from a list of qualified VA s accredited by NCMB 2) If parties fail to select, the Board (NCMB) shall select VA pursuant to selection procedure as stated in CBA ARTICLE 260. Grievance machinery and voluntary arbitration. - The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. chanroblespublishingcompany All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or 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 Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above.

2. JURISDICTION
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A261-262 ARTICLE 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. - The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement. ARTICLE 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. SAN JOSE V. NLRC the jurisdiction of the Labor Arbiter and the Voluntary Arbitrator or Panel of Voluntary Arbitrators over the cases enumerated in the Labor Code, Articles 217, 261 and 262, can possibly include money claims in one form or another. EOJ for money claims is limited only to those arising from statutes or contracts other than a Collective Bargaining Agreement. F: San Jose was a former employee of Ocean Terminal Services who was made to retire because he reached his compulsory retirement age. However, he was claiming differential pay which was based on the CBA. He filed his claim with LA, who ruled in his favor. NLRC reversed, saying LA did not have jurisdiction. Court held that LA did not have jurisdiction, as money claims arising from CBA are under VA s jurisdiction, but ruled ifo EE nonetheless because the case already dragged for long. F: EE was hired since 1980 but was notified that he should retire because he reached 65. He did apply for retirement and was paid P3,156,39 -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 -only paid every time they were assigned or actually performed stevedoring 85 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-computation for arriving at P3,156.30 was same computation for other stevedores -that he did not actually render 11 years of service -burden of proving that his latest salary is P200 is on him LA: for EE -cannot sustain a computation of length of service based on the ECC contribution records. -allegation that complainant rendered service for only five days a month for the past 11 years is statistically improbable, aside from the fact that the best evidence thereof are complainant's daily time records which ER are duty bound to keep and make available anytime in case of this. -on late filing: The prescription period is three years. It is suffice (sic) that the filing falls within the period. -on WON rotation basis: burden which lies upon the employer. ...presumption is that the normal working period is eight (8) hours a day and six (6) days a week, or 26 days a month, unless proven otherwise. -Also, the burden of proving the amount of salaries paid to employees rests upon the employer not on the employee. NLRC: reversed LA on jurisdictional ground -case arises from the interpretation of the CBA (separation pay diffential based on the CBA. Since interpretation of CBA, LA should refer it to the grievance machinery and VA) WON the appeal was timely? YES -here, the last day (10th day) for filing the appeal fell on a Saturday -based on NLRC Res. No. 11-01-91, parties had 10 days to appeal. If the 10th day fell on a Saturday Sunday Holiday -last day to perfect the decision shall be the next working day WON the LA had jurisdiction over the dispute as to the differential? NO LA had no jurisdiction to hear and decide San Jose's money claim of underpayment of retirement benefits since the controversy arose from the interpretation or implementation of a provision of the CBA -VA had jurisdiction -read A217, Art 261 & 262 as a whole 1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators over the cases enumerated in Articles 217, 261 and 262, can possibly include money claims in one form or another. 2. The cases where the Labor Arbiters have original and exclusive jurisdiction are enumerated in Article 217, and that of the Voluntary Arbitrator or Panel of Voluntary Arbitrators in Article 261.
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3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an exception as indicated in the introductory sentence of Article 217 (a), to wit: Art. 217. Jurisdiction of Labor Arbiters . . . (a) Except as otherwise provided under this Code the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide . . . the following cases involving all workers. . . . A. Art. 217. Jurisdiction of Labor Arbiters . . . xxx xxx xxx (c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitrator as may be provided in said agreement. B. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. SO LA (217(c)): EOJ for money claims is limited only to those arising from statutes or contracts other than a Collective Bargaining Agreement. VA: EOJ over money claims "arising from the interpretation or implementation of the Collective Bargaining Agreement and, those arising from the interpretation or enforcement of company personnel policies", under Article 261. SO VA's jurisdiction... Unresolved grievances from the interpretation or implementation of the CBA Unresolved grievances arising from the interpretation or enforcement of company personnel policies Other labor disputes, as agreed upon by the parties *BUT THE COURT WOULD NOT REMAND THE CASE, AS IT DRAGGED FAR TOO LONG - 8 YEARS. ANY FURTHER DELAY WOULD BE A DENIAL OF SPEEDY JUSTICE -SO ADOPT FORMULA BY LABOR ARBITER! It is unrealistic to expect a lowly stevedore to know what reports his employer submits to the Employee's Compensation Commission under Book IV, Health, Safety and Welfare Benefits, Title II, Employees Compensation and State Insurance Fund, of the Labor Code, simply because the insurance fund is solely funded by the employer and the rate of employer's contribution varies according to time and actuarial computations. (See Articles 183-184; Labor Code). The worker has no ready access to this employer's record. In fact, it is farthest from his mind to inquire into the amount of employer's contribution, much less whether the employer remits the contributions. The worker is at all times entitled to benefits upon the occurrence of the defined contingency even when the employer fails to remit the contributions. (See Article 196 (b), Labor Code). 86 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

SANYO PHIL. V. CANIZARES (1992) Summary: Sanyo entered into CBA with union, with Union security clause which entitles the Union to ask for the dismissal of employees who are not in good standing anymore with the union. The union availed of the said clause, asked Sanyo to dismiss some of the employees who did anti-union activities. The employees now contest their dismissal from work, bringing the same w/ LA. MTD filed by Sanyo but LA sustained assumption of jurisdiction. Court held that the LA correctly assumed jurisdiction because the case does not involve the union. The grievance procedure mandated by law is only between the union and the company but here, since the latter two are in the same sides, the dispute is between the employees and the ER. SO under LA jurisdiction. Facts: -Sanyo Phil. Entered CBA w/ PSSLU containing a union security clause which is as follows: Sec. 2. All members of the union covered by this agreement must retain their membership in good standing in the union as condition of his/her continued employment with the company. The union shall have the right to demand from the company the dismissal of the members of the union by reason of their voluntary resignation from membership or willful refusal to pay the Union Dues or by reasons of their having formed, organized, joined, affiliated, supported and/or aided directly or indirectly another labor organization, and the union thus hereby guarantees and holds the company free and harmless from any liability whatsoever that may arise consequent to the implementation of the provision of this article -Union informed Sanyo that some employees were not members of PSSLU anymore for anti-union activities, economic sabotage, threats etc. (these were members of another union, KAMAO) -initially KAMAO and PSSLU had an agreement but since some of the employees still did not follow the said agreement, the Union notified Sanyo that the employees be dismissed and so Sanyo did. The company recommended that the said employees appeal to PSSLU or else they would be deemed dismissed (initially preventively suspended). Termination finalized when no appeal to PSSLU heard -Ees filed COMPLAINT FOR ILLEGAL DISMISSAL W/ NLRC -Sanyo and PSSLU filed MTD: LA had no jurisdiction over the case because it involved the interpretation and implementation of the CBA -MTD deferred resolution twice (and LA assumed jurisdiction) so the petitioners filed R65 Certiorari WON the case is w/n the jurisdiction of the LA? YES -ON CLAIM THAT THIS CASE INVOLVED THE IMPLEMENTATION OF THE UNION SECURITY CLAUSE: Art 217 (a) interpreted in connection with (c) which provides that in cases arising from the ...implementation of the CBA ...shall be disposed of by
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the LA by referring the same to the grievance machinery and voluntary arbitration as may be provided in the CBA -the grounds for dismissal based on violation of union security clause is provided n the CBA -but here, no grievance machinery available. BUT IT IS NOT AN EXCUSE FOR THE LA TO ASSUME JURISDICTION OVER DISPUTES ARISING FROM THE IMPLEMENTATION AND ENFORCEMENT OF CBA PROVISIONS -All that needs to be done to set the machinery into motion is to call for the convening thereof. If the parties to the CBA had not designated their representatives yet, they should be ordered to do so. *SO YES IT IS A CASE INVOLVING THE IMPLEMENTATION AND INTERPRETATION OF CBA PROVISION BUT IT IS NOT A GRIEVANCE ARISING FROM THE IMPLEMENTATION AND INTERPRETATION OF CBA PROVISION...only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators. -HERE: both the union and the company are united or have come to an agreement regarding the dismissal of private respondents. No grievance between them exists which could be brought to a grievance machinery. VIVIERO V. CA GR: All disputes limited to areas of conflict traditionally w/n jurisdiction of VA: y contract interpretation and implementation y interpretation and implementation of company personnel policies X: if express stipulation including other issues, i.e. illegal termination Summary: Vivero was terminated from his job as a seaman. He filed a complaint for illegal dismissal with his Union and undergone grievance proceedings but nothing happened so he just filed a complaint w/ POEA. ER filed MTD, saying he should have undergone VA. Upon enactment of Migrant Workers and Overseas Filipinos Act of 1995, his case was transferred to NLRC. LA ifo EE. NLRC ruled ifo EE, remanded case to LA but ER appealed the decision to CA, which ruled in its favor. SC held that the ER cannot invoke the CBA and the jurisdiction to VA since it did not follow the grievance procedure itself. And the CBA itself provided an option to the EE to choose WON to undergo grievance procedure or to go directly to LA, which he did. The implementation and interpretation of the CBA was just a subissue, but this is the main issue is the illegal termination. If the parties wanted to submit all disputes to VA, illegal termination should be expressly stated as one of the issues. Facts: -Vivero was hired as Chief Officer of MV Sunny Prince but was terminated (repatriated) after a month due to allegedly very poor performance and conduct, refusal to perform his job, etc. 87 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-so Vivero filed a complaint with his Union for illegal dismissal, and pursuant to the CBA, grievance proceedings were conducted. However, parties failed to reach and settle the dispute amicably so vivero went to POEA (Since the law then applicable in 1994 was EO No. 247) -ER filed MTD (no jurisdiction over the case, VA Committee should be resorted to in accordance w/ CBA) - NOTE HOWEVER THAT THEY ALREADY FILED THEIR POSITION PAPERS BEFORE FILING MTD (SO IN FACT THEY ARE ESTOPPED) ...RA 8042 was enacted so the case was transferred to LA LA: dismissed complaint: CBA should be followed so go to VA Committee, then if unresolved, VA NLRC: Vivero had exhausted his remedy by submitting to the Grievance Committee of the Union. Considering that he could not obtain any settlement, he was correct in resorting to POEA, and now to LA. So remand case to LA -ER appealed to CA CA: CBA providing grievance proceeding should be followed. It is the law between the parties. y Parties had no choice but to submit to VAC because it is provided in the CBA (VA: contract; LA: law) y LC provides that VA has exclusive jurisdiction over disputes in CBA y Law prefers VA over LA WON the dismissal of an EE constitute a "grievance between the parties" as defined under the provisions of the CBA, and consequently, w/n the EOJ of the VA? NO -A217 provides jurisdiction of LA -but any or all of these cases may, by agreement of the parties, be submitted to a VA for adjudication (Art 262) HERE: The case is primarily a termination dispute. It is clear from the claim/assistance request form submitted by petitioner to AMOSUP that he was challenging the legality of his dismissal for lack of cause and lack of due process. The issue of whether there was proper interpretation and implementation of the 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 contesting his termination. Thus, the question to be resolved necessarily springs from the primary issue of whether there was a valid termination; without this, then there would be no reason to invoke the need to interpret and implement the CBA provisions properly. -here, it is not sufficient that the parties agreed in the CBA to submit all disputes to VA. THERE IS A NEED FOR AN EXPRESS STIPULATION IN THE CBA THAT ALL ILLEGAL TERMINATION DISPUTES SHOULD BE RESOLVED BY A VA. -further, the CBA makes it the discretion of the parties to submit to VA (with MAY used in the CBA provision)
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-on poicy of the state to promote VA: in this case, the dispute was never brought to a VA for resolution and the EE recognized the jurisdiction of the LA (as opposed to Navarro III v. Damasco where the parties submitted documentary evidence before the VA and did not question the authority of the VA - which probably was later questioned by one of the parties) -VA is mandatory i character IF THERE IS A SPECIFIC AGREEMENT BETWEEN THE PARTIES TO THAT EFFECT but since here, there is none (only permissive w/ the word "may"), LA has jurisdiction over the termination dispute -on Policy Instruction No. 56 ("Clarifying the Jurisdiction Between Voluntary Arbitrators and Labor Arbiters Over Termination Cases and Providing Guidelines for the Referral of Said Cases Originally Filed with the NLRC to the NCMB"): the instant case is a termination dispute falling under the EOJ of the LA, and does not specifically involve the application, implementation or enforcement of company personnel policies contemplated in Policy Instruction No. 56. -the Union should have informed Vivero of his option to appeal the case before VA; ER should have invoked early on Policy Instruction No. 56 (so estopped) LUDO V. SAORNIDO F: date of regularization was in issue but the VA awarded bonuses and benefits to the EEs so ER contested VA s award. Court upheld award: GR: the arbitrator is expected to decide only those questions expressly delineated by the submission agreement. X: the arbitrator can assume that he has the necessary power to make a final settlement since arbitration is the final resort for the adjudication of disputes. Summary: Ludo hired as regular employees arrastre workers from CLAS. Now these workers joined Ludo's labor union and are now claiming benefits enjoyed by union members. They went to VA, submitted only as the issue to be resolved the date of regularization of the employees but the VA awarded benefits (determined amount to be received by the parties). Court held that VA has plenary jurisdiction to make awards in the interest of speedy justice. Facts: -LUDO engaged services of Cresencio Lu Arrastre Services (CLAS) for the loading and unloading of its products. -these arrastre workers were eventually made (on different days) as regular employees of LUDO and joined the Lude Employees Union who received benefits under the CBA (benefits depended on length of service) -Union requested Ludo to include the arrastre workers to be included among those who are receiving benefits but since LUDO did not, they agreed to submit themselves to VA -submission agreement: date of regularizaion 88 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

Employees were engaged in activities necessary and desirable to the business of Ludo y CLAS is a labor-oly contractor y Employees are considered regular employees of CLAS 6 months from first day of service at CLAS y They are entitled to CBA benefits and Attorney's fees -Ludo filed MR. Denied. So Instant petition for R65 Certiorari WON GADALEJ when VA awarded benefits beyond the submission agreement? NO -jurisdiction of VA and LA may include money claims in one form or another (San Jose v. NLRC) -Compulsory arbitration: "the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties, and as a mode of arbitration where the parties are compelled to accept the resolution of their dispute through arbitration by a third party -In general, the arbitrator is expected to decide those questions expressly stated and limited in the submission agreement. However, since arbitration is the final resort for the adjudication of disputes, the arbitrator can assume that he has the power to make a final settlement. Thus, assuming that the submission empowers the arbitrator to decide whether an employee was discharged for just cause, the arbitrator in this instance can reasonable assume that his powers extended beyond giving a yes-or-no answer and included the power to reinstate him with or without back pay. -While the submission agreement mentioned only the determination of the date or regularization, law and jurisprudence give the voluntary arbitrator enough leeway of authority as well as adequate prerogative to accomplish the reason for which the law on voluntary arbitration was created speedy labor justice. -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. APALISOK V. RPN (2003) Summary: Apalisok was dismissed from RPN after being issued a memo for her to explain the admin charges against her and then afterwards just informed of her dismissal. She waived resort to the grievance procedure and filed case with NLRC but undergone VA, to which the parties submitted a Submission Agreement. VA ruled ifo Apalisok so RPN appealed to CA. CA held that VA had no jurisdiction because waiver of grievance machinery is waiver to resort to VA since the dispute 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.
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VA: y

Facts: -Apalisok was the Production Chief of RPN when she was issued a Memo to explain her acts hostile to RPN and the arrogant, disprespectful and defiant behavior towards her superior. She filed her Answer to the said Memo. -She was later informed of her termination -She wrote to RPN that she was waiving the grievance machinery provided in CBA -she then filed complaint for Illegal dismissal before the NLRC -NLRC referred case to NCMB -parties submitted Submission Agreement (issue: WON Apalisok's dismissal was valid; they promised to abide by the decision of VA) -VA: dismissal was invalid. Granted Separation pay because of strained relations -RPN appealed to SC, but was referred to CA (Luzon Dev't Bank v. Assoc. Of Luzon Dev't Bank Employees) -CA: option of Apalisok not to subject the dispute to grievance machinery was tantamount to relinquishing her right to avail of the aid of a VA; said act converted grievance into a resolved one so VA had no jurisdiction WON VA had jurisdiction even if the EE waived resort to grievance machinery? YES -LC provides that VA would have jurisdiction if parties agree -voluntary arbitration as a mode of settling the dispute was not forced upon respondents. Both parties indeed agreed to submit the issue of validity of the dismissal of petitioner to the jurisdiction of the voluntary arbitrator by the Submission Agreement duly signed by their respective counsels. ATLAS FARMS V. NLRC (2002) Summary: Ees were terminated allegedly for violation of company personnel policies, but Ees alleged it was for their efforts to form a union. No notice proved to have been given to the Ees before they were dismissed. Ees received separation pay. Ees filed illegal termination case before NLRC but was dismissed and was referred to grievance machinery in CBA. Since nothing happened in grievance 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 since Ees accepted separation pay, estopped from claiming. NLRC reversed and CA affirmed. Court held that this is an illegal dismissal case and interpretation and implementation of CBA provisions merely subissues so this is under LA's jurisdiction. Also ruled that since no effort to constitute grievance machinery on part of ER, Ees cannot be faulted for searching for an impartial forum. Court also found illegal dismissal for failure of ER to substantiate charges against Ees. Facts: 89 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-2 employees were dismissed, allegedly refused to receive the formal notice nor explain theirselves to ER, and were terminated: y Pena allegedly was caught urinating and defecating on company premises not intended for the purpose y Abion allegedly caused the clogging of the fishpond drainage due to improper disposal of waste -both employees received their separation pay -they separately filed ILLEGAL DISMISSAL complaints before NLRC, alleging that they were dismissed because Atlas suspected them of forming a union which is against the company-dominated union -LA1: dismissed complaints: grievance machinery under CBA should be followed -Abion and Pena availed of the grievance machinery but due to "lack of sympathy" on Atlas' part to engage in conciliation proceedings, they refiled case w/ NLRC -Atlas filed MTD for lack of jurisdiction: should have exhausted remedies under CBA - and if not, should have gone to VA LA2: although he assumed jurisdiction (primarily a termination case), he dismissed the complaint because Ees allegedly failed to substantiate claims for illegal dismissal, and since they voluntary accepted separation pay NLRC: reversed LA CA: Affirmed NLRC's reversal WON LA/NLRC had jurisdiction? YES - Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there was already actual termination, with alleged violation of the employee s rights, it is already cognizable by the labor arbiter. -even if the Ees resorted to grievance procedure, Atlas did not show proof that it took steps to convene the grievance machinery after the labor arbiter first dismissed the complaints for illegal dismissal and directed the parties to avail of the grievance procedure under Article VII of the existing CBA. Employees could not now be faulted for attempting to find an impartial forum, after petitioner failed to listen to them and after the intercession of the labor arbiter proved futile. -further, grievance procedure should be undertaken with the UNION. Since no union participation, grievance procedure would be pointless or prejudicial to the cause of the employees -VIVERO V. CA: petitioner cannot arrogate into the powers of Voluntary Arbitrators the original and exclusive jurisdiction of Labor Arbiters over unfair labor practices, termination disputes, and claims for damages, in the absence of an express agreement between the parties in order for Article 262 of the Labor Code [Jurisdiction over other labor disputes] to apply in the case at bar." ...private respondents attempted to justify the jurisdiction of the voluntary arbitrator over a termination dispute alleging that the issue involved the interpretation and implementation of the grievance procedure in the CBA. There,
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we held that since what was challenged was the legality of the employee s dismissal for lack of cause and lack of due process, the case was primarily a termination dispute. The issue of whether there was proper interpretation and 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. Since the real issue then was whether there was a valid termination, there was no reason to invoke the need to interpret nor question an implementation of any CBA provision. -MANEJA V. NLRC: the hotel employee was dismissed without hearing. We ruled that her dismissal was unjustified, and her right to due process was violated, absent the twin requirements of notice and hearing. We also held that the labor arbiter had original and exclusive jurisdiction over the termination case, and that it was error to give the voluntary arbitrator jurisdiction over the illegal dismissal case. WON Ees were illegally dismissed? YES -Atlas failed to substantiate their claims that Ees committed certain acts violating company rules and regulations; no factual basis for the dismissal -no evidence that Ees received notices to show cause WON the costs were properly awarded? Modified MINDANAO STEEL V. MINSTEEL WORKERS (2004) Summary: Union and Mindanao steel had a CBA which provided for wage increase. CBA also expressly provided that it was exclusive of any other wage increase. An ECOLA was ordered to be given due to the increase in fuel prices but Mindanao Steel did not implement wage order, contending that the wage increase provided in the CBA should be credited already. Parties agreed to submit to VA's jurisdiction and VA ruled ifo workers. CA affirmed VA. Court also affirmed VA, saying that CBA terms are clear that the wage order is exclusive of the wage increase in the CBA. Facts: -Mindanao Steel and Minsteel Free Workers Org entered a CBA whihc provided a P20 increae in worker's daily wage (executed June 29, 1990) -December 5, 1990, due to fuel increase, Regional Tripartite Wages and Productiv ity Board issued Interim Wage Order No. RX-02 granting all workers an ECOLA for 3 months. -ER refused to implement wage order -Union filed COMPLAINT FOR PAYMENT OF ECOLA in NCMB. Parties agreed to submit to VA -VA: ER pay ECOLA. MR denied -CA: ER pay ECOLA. Grant of P20 increase in wage did not have purpose of granting temporary allowance 90 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

...plus CBA provided that the salary increases shall be exclusive of any wage that may be provided by law. Since that is what they agreed to, they should be bound by it.MR denied WON ER should be exempt from paying ECOLA? NO -ER's argument why it did not pay ECOLA: there was a crediting clause in the wage order providing that Wage increases shall be creditable -BUT CBA IS CLEAR: Section 3, Article 7 of CBA provides the ff: "It is hereby agreed that these salary increases shall be exclusive of any wage increase that may be provided by law as a result of any economic change." -so it is clear that the P20 salary increase in the CBA does not include any wage increase that may be provided by law as a result of any economic change. Since not ambiguous, no need for interpretation -WAGE INCREASE NOT CREDITABLE: the order provided that for a wage increase to be creditable, it should have been given because of, o in anticipation of the fuel price hikes in December 1990. UNION OF NESTLE WORKERS V. NESTLE PHILIPPINES (2002) SUMMARY: The company implemented Policy No. HRM 1.8 imposing simultaneous 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 is arbitrary because it was not done w/ consultation w/ the union. RTC held that it had no jurisdiction over the case, it being a labor dispute. R65 P4C filed w/ SC but was referred to CA. CA dismissed petition, saying wrong remedy plus injunction already moot because policy was already implemented. Now Court upheld RTC and CA, saying first that since this involved the implementation of company personnel policy, it should be under VA jurisdiction. Further, it said that remedy should have been ordinary R45 appeal to CA. Facts: -Nestle implemented Policy No. HRM 1.8 (Drug Abuse Policy) which provided for the simultaneous drug testing of all employees of Nestle -Union contested the drug testing with only 28.43% of the employees submitting themselves to the drug testing. -Union then filed w/ RTC COMPLAINT FOR INJUUNCTION W/TRO. RTC issued TRO -Nestle filed MTD: this is a labor dispute on the enforcement of a company personnel policy so should be under VA -why argue CONSTITUTIONAL ISSUE: right against self-incrimination, to due process and to security of tenure. RTC: dismissed complaint: main issue is a labor dispute because the union contest the policy for lack of proper consultation w/ union members. MR denied -R65 petition for certiorari filed w/ SC, referred to CA
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-CA: dismissed petition: R45 should be the correct remedy plus injunction moot because the petitioners themselves already subjected themselves to drug testing WON RTC has jurisdiction? NO, VA has. -the fact that the complaint was denominated as one for injunction does not necessarily mean that the RTC has jurisdiction. Well-settled is the rule that jurisdiction is determined by the allegations in the complaint -allegations in the complaint basically says that the implementation of the policy was arbitrary because: (1) the employees were not consulted prior to its implementation; (2) the policy is punitive inasmuch as an employee who refuses to abide with the policy may be dismissed from the service; and (3) such implementation is subject to limitations provided by law which were disregarded by the management. -so this is a dispute involving COMPANY PERSONNEL POLICY (DEF: San Miguel v. NLRC): "Company personnel policies are guiding principles stated in broad, long-range terms that express the philosophy or beliefs of an organization s top authority regarding personnel matters. They deal with matter affecting efficiency and wellbeing of employees and include, among others, the procedure in the administration of wages, benefits, promotions, transfer and other personnel movements which are usually not spelled out in the collective agreement." -since this involves implementation of company personnel policy, it is w/n VA's jurisdiction and not RTC's WON R65 P4C proper? NO -should have filed APPEAL under R45. R65 P4C not a substitute for a lost appeal SAN MIGUEL FOODS V. SAN MIGUEL UNION (2007) Summary: Some employees of San Miguel Foods Inc (SMFI) brought a grievance against the Finance Manager for discrimination, favoritism, etc. Before Plant Operations Manager. Union sought Grievance machinery step 1 but SMFI took so long to resolve it so they filed a COMPLAINT FOR ULP before NLRC . SMFI filed MTD saying it should be subject to the grievance machinery provided in CBA. LA granted MTD so Union appealed to NLRC. NLRC ordered LA to continue proceedings so SMFI MR but denied. So P4C R65 w/ SC but referred to CA. CA held that LA had jurisdiction since it is a ULP. Court held that first, procedural rules under ROC not strictly applied in Labor proceedings. Second, there is NO ULP as to the questioned promotions because it was not alleged that they were done to discourage unionism. Third, on ULP on alleged violations of CBA, it was held that under LC, if it is not an economic provision, it is not considered gross violation of CBA w/c is under LA jurisdiction. Since the failure to follow the grievance machinery is not an economic 91 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

provision, it is not considered gross violation. However, violation of seniority was considered a gross violation of the CBA so that sole issue is under LA's jurisdiction. FACTS -Some of the employees of SMIFI's Finance Department brought a grievance against Finance Manager for discrimination, favoritism, etc. On the promotion of junior employees, bypassing some senior employees -Grievance machinery Step 1 was followed, so grievance brought before Plant Operations Manager. -Union sought the review, evaluation and upgrading of all Finance staff and promotion of employee. -Grievance meeting held, where management addressed the grievance by conducting a WORK MANAGEMENT REVIEW -however, almost 9 months after the first grievance meeting nothing happened so the Union filed a COMPLAINT FOR ULP AND UNJUST DICRIMINATION IN MATTERS OF PROMOTION W/ NLRC -SMFI filed MTD: grievance issues involved so Grievance proceedings should be followed, and if not followed, VA -parties submitted position papers. In their position papers, the Union alleged that some of its members were bypassed in promotion. The ER also allegedly violated the CBA for failure to follow the grievance procedure and the seniority rule LA:DISMISSED: grievance machinery should be followed NLRC: LA continue proceedings. SMFI MR SC: referred to CA CA: LA has jurisdiction over the complaint for violation of the seniority rule under the CBA WON The conplaint should be dismissed for failure to establish a COA since the complaint does not state the ultimate facts constituting ULP? NO -Procedural rules should not be strictly applied to labor proceedings -here: Complaint + Position papers show the acts constituting ULP WON LA has jurisdiction on the Union's complaint on discrimination in the promotion? NO -For it to be a ULP, it should have been done to discourage membership in a union or labor organization. Here, no allegation as to that the alleged discrimination was done to discourage unionism. The employees promoted were even members of the complaining Union WON the violation of the CBA: failure to comply with the grievance procedure in the CBA, is under the jurisdiction of the LA? NO. -For violations of CBA to be not under VA, it should be: 1. gross in character
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2. economic. Provision -the said violation is not an economic provision WON the violation of the CBA as to the seniority is under jurisdiciton of LA? YES -the ER violated the JOB SECURITY PROVISION OF THE CBA, PARTICULARYLY THE SENIORITY RULE -all doubts are resolved ifo labor -seniority rule in the promotion of the employees has a bearing on salary and benefits. Thus it is an economic provision the CBA and its violation is under LA's jurisdiction LANDTEX INDUSTRIES V. CA (2007) SUMMARY: Ayson was hired as a knitting operator of Landtex. For allegedly spreading rumors against the owners of the Company, the Compay administratively charged Ayson. There were hearings conducted but Ayson was not able to attend the first few hearings because he took care of a sick child and on the last, he did not sign the minutes. Ayson was later terminated. The union and the Conpany then agreed to refer Ayson s termination to a third party in accordance with the CBA. Ayson however, filed complaint FOR ILLEGAL DISMISSAL before LA. LA held that it had jurisdiction, this being a termination case. ER appealed, NLRC reversed LA saying that since the CBA provides that disciplinary measures are covered in grievance procedure and this is merely an implementation of the grievance procedure in the CBA, LA had no jurisdiction. CA held that LA had jurisdiction. Pending appeal to SC, Ayson died. SC held that LA had jurisdiction because Ayson was already terminated when the Union and the Company decided to refer the dispute to grievance proceedings. Further, termination proceedings are not 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.

reversed ifo EEs and ordered reinstatement of employees. It said that EEs cannot be 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 when it was implemented, they were already members of a union and the said provision only requires that the employees join a union. However, the EEs were dismissed in GF so not entitled to reinstatement. Sole issue is WON EEs are entitled to backwages. SC held that since the EEs were unjustly dismissed, they were entitled to backwages.

DEL MONTE PHIL V. SALDIVAR (2006) SUMMARY: Timbal, an employee of Del Monte and a member of ALU, was alleged to have been disloyal to ALU for allegedly promoting membership to a competing union, NFL. To back this up, they used the affidavit of Artajo, who allegedly had an axe to grind with Timbal since Timbal s husband filed collection suits against Artajo. Based on this affidavit, and based on the closed shop clause in the CBA, Del Monte dismissed Timbal. Timbal filed case for ILLEGAL DISMISSAL in NLRC. LA held that all employees (Timbal was not the only one dismissed). NLRC held that all the complainants were validly dismissed. CA held that only Timbal was illegally dismissed and Del Monte failed to observe procedural due process. On their MR to CA, Del Monte alleges that besides the affidavit of Artajo, there was another witness who could substantiate the claim of disloyalty. SC held that the said witness was just reproduced by Del Monte so dubious. Also held that Timbal was entitled to backwages, even if Del Monte merely dismissed her in good faith compliance with the union security clause because the dismissal should always be in accordance with substantive due process.

IMPERIAL TEXTILE MILLS INC V. SAMPANG (1993) On finality and execution of awards F: The ER and Union executed a CBA which provided wage increases and other benefits. The dispute in this case is to the adjustment of the wages to the base pay level, ER says that the wage of the particular employee subject of possible adjustment on wage pay should be the pay with the first year of the CBA increase while the union alleged that CBA increases should NOT be included in adjusting the wages to the base level. They both agreed to submit the dispute to VA. In this case, the VA rendered two decisions. The Labor Code was applicable when he rendered his first decision (and such unamended code provides no period when the decision becomes final and unappealable). The union MR, and the VA reconsidered his nd decision. So ER contested the 2 decision of the VA (ifo Union). Court held that the VA was in GADALEJ because his first decision was already final when he rendered it
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OLVIDO V. CA (2007) SUMMARY: Employees, former officers of SEU-ADFLO, filed complaints for illegal lay-off, illegal deductions, nonpayment of OT etc. When SEU-ADFLO wanted to be certified as the EBR of the company, it was agreed with the company that the company would recognized it as the EBR voluntarily provided the employees 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 for CE, SEU-ADFLO and ER entered into CBA. CBA provided a modified closed shop agreement and allegedly in accordance to this, SEU-ADFLO requested the company to dismiss the employees. They were accordingly dismissed so they filed COMPLAINT FOR ILLEGAL DISMISSAL before NLRC. LA ruled ifo company. NLRC 92 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

(the LC then applicable then making his decision final and executor without a period). VA cannot review his decisions because: once an arbitrator has made and published a final award, his authority is exhausted 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 a final decision which he has already rendered, because of the potential evil of outside communication and unilateral influence which might affect a new 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 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) 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 governing disciplinary actions. *Discharges based on redundancy can hardly be considered a company personnel policy. CBA agreement to arbitrate must be plain and unambiguous must expressly state that termination disputes and unfair labor practice cases under voluntary arbitration. *In the same manner, job security provisions invoking grievance procedure must be strictly construed (e.g. union reconsideration requirement).

exception is when the VA GADALEJ, especially when the VA s decision is not backed by substantial evidence.

LUDO V. SAORDINO, SUPRA. VA can render awards even if it is not submitted by the parties under his jurisdiction.

FINALITY AND EXECUTION OF AWARDS IMPERIAL TEXTILES V. CALICA

PROCEDURE Art. 262-A VA or panel of VA hold hearings receive evidences take whatever action is necessary to resolve the issue or issues subject of the dispute All parties to the dispute shall be entitled to attend the arbitration proceedings The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. Hearing may be adjourned y for a cause y or upon agreement by the parties. Award: -mandatory to give 20 calendar days from submission of the dispute to voluntary arbitration -form: contain facts and the law upon which it was based -final and executor after 10 calendar days from RECEIPT of the copy of the award or its decision by the parties. X: unless appealed to NLRC -WoE: may be issued upon motion of interested party made by y VA
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CONTINENTAL MARBLE V. NLRC (1988) Exception to the rule that the decision of the VA is final and executory SUMMARY: Nasayao allegedly was hired as Continental s manager with a monthly salary of P3k or 25% of the net profits, whichever is higher. Nasayao allegedly however was not paid for 3 months so he filed a complaint with NLRC for nonpayment of the said salary. In their answer, Continental alleged that there s a joint venture between them and Nasayao and that Nasayao was not to receive monthly salaries but instead was entitled to receive 25% of the net profits if there were any. As there were none for the months he allegedly did not receive salary, he was not entitled to any. Case submitted to VA but Continental contested the fairness of the appointed VA and aksed the VA to desist. Instead of doing so, VA proceeded in trying the case and even rendered judgment ifo Nasayao. Continental appealed to NLRC but NLRC ruled that the VA decision was already final and executory. SC held that generally, decisions of the VA are final and executor but an 93 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

y y

VA Panel LA in region where movant resides, in case of absence or incapacity of VA

AWARDS AND ORDERS DAVAO INTEGRATED PORT STEVEDORING SERVICES VS. ABARQUEZ (1993), SUPRA Summary: CBA provided sick leave with pay to its regular employees . The said provision was extended to its workpool employees, which can be converted to cash if unused. New management discontinued the said benefit as to workpool employees, arguing that there was merely error in payment. Court held that the CBA was clear so it should be followed by the Company. Obiter on the VA: Company was contesting the award made by the VA ordering the company to pay the unenjoyed portion of the sick leave with pay benefits. The court held that there was no GADALEJ on the part of the VA because it is the necessary consequence of his exercise of his arbitral power as Voluntary Arbitrator under Article 261 of the Labor Code "to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement." CITY BANK EMPLOYEES UNION V. MOLE (1980) Summary: VA decision, when final and executor, cannot be modified even by subsequent changes in the law Facts: employees are claiming holiday pay from Citibank. They agreed to submit their dispute to VA. VA ordered Citibank to pay the employees their holiday pay on the basis of the finding that the monthly salary of said employees does not include their pay for unworked holidays. Award was partially implemented but MOLE issued INTEGRATED IMPLEMENTING RULES OF THE LABOR CODE which provided that workers paid monthly shall be presumed to be paid for ALL days in the month whether worked or not worked, and the POLICY INSTRUCTION NO. 9 which provided that an employee is presumed to be already paid the 10 paid legal holidays if he is receiving not less than the maximum monthly minimum wage. Thus, Citibank refused to further implement the award. Held: The award of the arbitrator in this case IS NOT TO BE EQUATED WITH A JUDICIAL DECISION. In effect, when in relation to a controversy as to working conditions, which necessarily include the ...Amount of wages ...Allowances ...Bonuses ...Overtime pay 94 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

...Holiday pay ...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 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 BECOMES PART AND PARCEL OF THE CBA. *Regardless of any law anterior or posterior to the Arbitrator's award, the collective bargaining agreement in this case has been correspondingly amended in a manner that is unalterable, immovable and immutable like the rock of Gibraltar, during the lifetime of the CBA. VOLKSCHEL LABOR UNION V. NLRC (1980) Summary: Company made a memo transferring its employees from Malabon to Cebu (which the Union opposed and sought reconsideration). The Company argued that the transfer was w/n its prerogative but the Union argued it was ULP, as the employees transferred were union members. ULP case filed w/ NLRC, mediation ensued but nothing happened so referred to an arbitrator (later clarified as LA). LA decided ifo Union but NLRC ruled ifo company. Court held that the Company filed 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 and executory already. -Company ordered transfer of Malabon employees to Cebu. Union sought reconsideration through a letter. However, the Company did not reconsider, indefinitely suspending the employees for refusing to comply with the management s order. -Suspension led to termination of the employees for alleged violation of the Code of Discipline of the Corporation. The Company alleged the reason to be retrenchment because of business slump in Malabon. It gave the employees options but the union argued that the company violated the CBA provision on Union Recognition and Check-offf, saying that moving employees would take the employees outside the bargaining unit. Some reinstated. Union also alleged that the Company failed to comply with its promise to help the union collect agency fee -Union filed complaint for ULP with NLRC -arbitrator: ordered reinstatement of employees; Company ordered to comply with its obligation under CBA to transmit all agency fees -appeal to NLRC. Union objected: 1. Arbitrator s award ALREADY FINAL AND EXECUTORY; 2. CBA Provides that it is final and executor 3. Award is supported by substantial evidence

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-NLRC: modified: saying that the employees should comply with the directive of reassignment -Union filed petition for review pending their appeal to SOLE (to prevent irreparable danger) WON NLRC has power to alter/modify award by VA (note: it is not clear from the facts if the arbitrator in issue is an LA or VA but the allegations of the union in the pleadings says it s a VA)? NO -to settle once and for all: the arbitrator here IS A LABOR ARBITER, NOT A VOLUNTARY ARBITRATOR. It was referred to NLRC. -so OBITER: The award of voluntary Arbitrators acting within the scope of their 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 are conclusive, and all matters in the award are thenceforth res judicata, on the theory that the matter has been adjudged by the tribunal which the parties have agreed to make final as tribunal of last resort. WON the appeal to NLRC was filed out of time so NLRC had no jurisdiction to entertain the same (beyond the 5 day period from receipt as stated in the IRR it promulgated in 1972)? YES so dismissed because of prescription. NLRC should not have reviewed LA s decision. In short, decision for UNION. -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 substantiate his claim that he filed w/n the reglementary period. After checking the calendar for 1974 March 5 is the 11th day but since the 10th day fell on a Sunday (March 4), technically the 10th day is the 5th) -BUT the court held that according to Section 2 of the NLRC IRR, the company filed out of time beyond the 10 day period; so the award attained finality -It is a well-settled rule that an award or judgment becomes final and executory upon the expiration of the period to appeal and no appeal was made within the reglementary period. The basic rule of finality of judgment is applicable indiscriminately to one and all since the rule is grounded on fundamental consideration of public policy and sound practice that at the risk of occasional error, the judgment of courts and award of quasi-judicial agencies must become final at some definite date fixed by law. -The lapse of the appeal period deprives courts of jurisdiction to alter a final judgment. In the instant case, the decision of the Commission[14] modifying the award of the arbitrator is null and void for having been issued without jurisdiction and authority, the appeal taken thereto not having been filed on time. The perfection of an appeal within the reglementary period is not only mandatory but jurisdictional. 95 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

APPEAL A262-A: - can appeal decision of VA 10 CALENDAR days from receipt of the copy of the award, or else final and executor. Note that as noted in Imperial Textile Mills vs. Sampang, the period of finality was previously not provided. RA 6715 added the 10 day period. So would this mean that the VA s decision can be reconsidered? Sir said in class that an MR is not necessary anymore based on the Malayan Insurance Case (but not confirmed) OCEANIC BIC DIVISION V. ROMERO (1984) Summary: Probational employee dismissed without clearance for poor performance. The union contested the termination, both union and ER submitted to VA. VA ifo ER. UUnion filed a petition for certiorari (no mention WON 45 or 65) to 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 respected because she ruled correctly that the probational employee can be dismissed by the ER even w/o clearance as he is not a regular employee who would require clearance before he is dismissed. Further, the unsatisfactory performance of the employee was well documented so it was supported by substantial evidence.

MANTRADE V. BACUNGAN (1986) Summary: Mantrade is not paying its monthly salaried employees holiday pay based on Section 2 of LC s IRR made by NLRC. Parties submitted dispute to VA Bacungan, who ruled ifo ER. Union now contesting VA Bacungan s decision, but ER contested it saying VA s decision already final. SC held ifo employees, citing Oceanic BIC v Romero that Vas are QJAs so can be reviewed by the court when there s want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the Law. Also held that LC, which provides entitled to holiday pay, should be followed instead of the IRR which is promulgated by NLRC and the IRR is null and void since in the guise of clarifying the Labor Code's provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion

LUZON DEV T BANK V. ASSN OF LUZON DEV T BANK EMPLOYEES (1995) Summary: VA ruled ifo Union even w/o receiving ER s position paper. ER appealed directly to SC. SC remanded the case to CA, saying that direct appeal to it would equate the decision of the VA to the NLRC and CA. -Luzon Development Bank (LDB) and the Association of Luzon Development Bank Employees (ALDBE) submitted to arbitration to resolve WON the company has
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violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April 1994, on promotion -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 Position Paper on January 18, 1995. -LDB, on the other hand, failed to submit its Position Paper -VA: without LDB's Position Paper, rendered a decision finding that the Bank has not adhered to the Collective Bargaining Agreement provision nor the Memorandum of Agreement on promotion. -Hence, this petition DIRECTLY TO SC WON VA erred in ruling ifo Union w/o waiting for position paper of ER? Court did not rule on it but instead remanded the case to CA -elevating a decision or award of a voluntary arbitrator to the Supreme Court on a 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 burden upon it Obiter na lahat -In labor law context, arbitration is the reference of a labor dispute to an impartial third person for determination on the basis of evidence and arguments presented by such parties who have bound themselves to accept the decision of the arbitrator as final and binding. -Arbitration may either be compulsory or voluntary. -Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and are compelled to accept the resolution of their dispute through arbitration by a third party. -Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a voluntary arbitration clause in their collective agreement, to an impartial third person for a final and binding resolution. -Ideally, arbitration awards are supposed to be complied with by both parties without delay, such that once an award has been rendered by an arbitrator, nothing 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 particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide their case. Above all, they have mutually agreed to de bound by said arbitrator's decision. -In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to include therein provisions for a machinery for the resolution of grievances arising from the interpretation or implementation of the CBA or company personnel policies. -For this purpose, parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators, or include a procedure for their selection, 96 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

preferably from those accredited by the National Conciliation and Mediation Board (NCMB). CEU FACULTY & ALLIED WORKDERS UNION V. CEU (1995) Summary: CEU had a tuition fee increase. In accordance w/ RA 6728, tuition fee increases are allowed in private schools provided 70% of the proceeds of the increase would go to payment of salaries of teaching and nonteaching staff. CEU had a CBA with its Union which provided an IP increase integrated in the salaries of its workers. But the said IP integrated was sourced from the 70% proceeds from the 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 tuition fee increase, the integrated IP should also not be taken from the 70% tuition fee increase. VA held for CEU. Union appealed to CA via R65 petition but wrong appeal, should have been R43. Court upheld the VA and CA. Facts: -The Government Assistance to Students and Teachers in Private Education Act or RA 6728 provides that in every tuition fee increase, 70% of the proceeds of the increase shall go to the payment of the salaries of teaching and nonteaching staff -CEU and the union had an existing CBA which provided salary increases and IP (intemental proceeds) integrated in the salary. The CBA also provided that salary increases arising from the CBA shall not be deductible from the 70% share in the Incremental Increase -most of the salary increases are taken from the university fund, while the IP integrated are taken from the proceeds of the 70% increase. CEU Union -2 types of increases: CBA-negotiated the integrated IP granted in the CBAs and the IP, which by nature, should be should not be deducted from the taken from the 70% increase personnel s 70% share in the IP -can t give increase for teachers working -CBA prohibits deduction of salary OT or overload increases arising from the CBA from the 70% share in the IP -IP is computed on a pro-rata basis, depending on the hours worked so those rendering OT should received additional IP -union filed w/ NCMB, parties submitted their position papers VA: For CEU -so Union elevated the case via R65 P4C to CA CA: Dismissed: wrong mode of appeal. Should have been R43, not R65; MR denied WON the VA Award is appealable to CA via R43? YES
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-so CA correct in ruling that the wrong remedy was availed of by the Union -Luzon Dev t Bank v. Assn. of Luzon Dev t Bank Employees: LC silent as to where appeals from awards of VA may be taken. But VA is a gov t instrumentality w/n contemplation of BP 129. Decisions of VA = RTC so should first be appealed to CA. Circ. 1-91: uniform procedure for appeal Cric. 1-91 revised by Revised Adm. Circ. No. 1-95: now expressly provided that 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 WON the university s practice of sourcing the integrated IP in the CBA from the 70% share of the personnel in the IP violates the provisions of the CBA WON CEU may deduct the integrated IP from the employees share coming from the 70% increase (and therefore, is not violating the CBA)? YES. No violation of the CBA -The integrated IP provided in the CBAs of the teaching and the non-teaching staff is actually the share of the employees in the 70% of the IP that is incorporated into their salaries as a result of the negotiation between the university and its personnel. The purpose of the integration is to regularize the receipt by the personnel of the benefits arising from the increase in the school s tuition fees. But it does not change the nature of the benefit as IP. -Cebu Institute of Medicine v. Cebu Institute of Medicine Employees UnionNational Federation of Labor: the allocation of the 70% of the IP is considered a management prerogative. The only precondition is that seventy percent (70%) of the incremental tuition fee increase goes to the payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel. -The allocation of 70% of the IP for payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel is clearly mandated by law. Yet, nowhere is it provided in Republic Act No. 6728 that the IP should be integrated with the salary and wages. The nature of IP is that it bears a reasonable relation as to whether or not universities/schools will increase their tuition fees. Like that of a bonus, IP is additional compensation subject to a resolutory condition imposed for its payment. -Historically, IP was allocated "to alleviate the sad plight of private schools, their personnel and all those directly and indirectly dependent on school incomes." It is additional benefit accorded to the employees. Hence, the determination of the amount of IP to be integrated into employees basic salary entails the exercise of the right of an employer to regulate all aspects of employment. Precisely, the employer has the right to change the basis of the payment of wages of the employees, subject to provisions of law. WON the teaching staff is entitled to additional IP for overload? NO 97 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-unlike a bonus or commission, the IP is not given for extra efforts exerted. Thus, a teacher originally handling a load of 21 units will not be provided IP the next school year even with the same teaching load, should there be a tuition fee increase. -To be entitled to IP, it matters not that a teacher is handling a regular full teaching load or is handling extra teaching load. Professors handling extra teaching loads are correspondingly compensated depending on the extra units they are assigned. To grant them additional IP would amount to double compensation.

MANILA CENTRAL LINE CORP. VS. MANILA CENTRAL LINE FREE WORKERS, SUPRA 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 Compulsory Arbitration before the NLRC. The LA ordered them to submit position papers containing their proposed provisions of the CBA. The LA rendered a decision which contained the applicable CBA between them. Corporation appealed to NLRC but was denied. The Corporation is now questioning the jurisdiction of the LA to render the said decision. Court held on this point that the corporation agreed with the Union to submit the dispute to LA. The Corporation is correct in saying that now, when NCMB proceedings fail, the parties should be referred to VA, as before, parties would be referred to LA: -Although the union's petition was for "compulsory arbitration," the subsequent agreement of petitioner to submit the matter for arbitration in effect made the arbitration a voluntary one. The essence of voluntary arbitration, after all, is that it is by agreement of the parties, rather than compulsion of law, that a matter is submitted for arbitration. It does not matter that the person chosen as arbitrator is a labor arbiter who, under Art. 217 of the Labor Code, is charged with the compulsory arbitration of certain labor cases. There is nothing in the law that prohibits these labor arbiters from also acting as voluntary arbitrators as long as the parties agree to have him hear and decide their dispute. * note that the other points in the case were on the decision of the LA that contained provisions of the CBA covered by the previous part of the reviewer. SEVILLA TRADING V. SEMANA (2004) Summary: the Corporation computed its 13th month pay by including in the base pay the other benefits it had given its employees. Allegedly because the one in th charge of computing the 13 month pay committed a mistake, it unilaterally th recomputed the 13 month pay (therefore, decreased the amount received by the EEs for their 13th month pay). Union complained, grievance procedure resorted to but ended up submitting to VA. VA ifo Union. ER filed R65 P4C beyond 15 days. Court held that first, an ordinary R43 appeal should have been filed. R65 P4C is not a substitute for a loss appeal. Second, the Corporation cannot unilaterally withdraw
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the benefits resulting from company practice (For 6 years, it has included in the base pay the other benefits received by the employees). UNITED KIMBERLY CLARK EMPLOYEES UNION V. KCPI (2006), SUPRA Summary: KCPI adopted the 1997 employment guidelines which provided that the recommendees of the retiring employees should be at least graduate of a 2 year vocational course or at least attained 3rd year college. The Union contested it, and KCPI deferred its implementation subject to the results of the CBA. The CBA did not contain any qualifications as to the recommendees (as the Union is insisting that the recommendees be just high school graduates) so KCPI continued the implementation of the Guidelines. KCPI also suspended the CBA allegedly due to financial problems. Union and KCPI failed to settle the problem through the grievance machinery so filed with NCMB a submission agreement, with an agreement not to appeal the decision of the VA. Union assailed the implementation of the guidelines while KCPI alleged it was an exercise of management prerogative. The VA visited KCPI premises and found that KCPI hired casuals who performed work of regular employees. VA decided ifo Union, saying that KCPI cannot unilaterally change the guidelines of hiring recommendees and cannot ignore what has been agreed upon during CBA negotiations. VA also held that KCPI cannot argue 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, saying that KCPI can impose additional qualifications for recommendees. Union now contest the said decision. SC held on the point of VA: - GR: WHEN CBA CLEAR, STICT TO CBA S LITERAL INTERPRETATION an arbitrator is confined to the interpretation and application of the collective bargaining agreement. He does not sit to dispense his own brand of industrial justice: his award is legitimate only in so far as it draws its essence from the CBA, i.e., when there is a rational nexus between the award and the CBA under consideration. It is said that an arbitral award does not draw its essence from the CBA; hence, there is an unauthorized amendment or alteration thereof, if: 1. It is so unfounded in reason and fact; 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 indicia of the parties' intention; 4. It ignores or abandons the plain language of the contract; 5. It is mistakenly based on a crucial assumption which concededly is a nonfact; 6. It is unlawful, arbitrary or capricious; and 7. It is contrary to public policy. -X: IF CBA AMBIGUOUS. If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. However, if, in a CBA, the parties stipulate that the hirees must be presumed of employment 98 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

qualification standards but fail to state such qualification standards in said CBA, the VA may resort to evidence extrinsic of the CBA to determine the full agreement 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 rely on the cold and cryptic words on the face of the CBA but is mandated to discover the intention of the parties. Recognizing the inability of the parties to anticipate or address all future problems, gaps may be left to be filled in by reference to the practices of the industry, and the step which is equally a part of the CBA although not expressed in it. In order to ascertain the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. The VA may also consider and rely upon negotiating and contractual history of the parties, evidence of past practices interpreting ambiguous provisions. The VA has to examine such practices to determine the scope of their agreement, as where the provision of the CBA has been loosely formulated. Moreover, the CBA must be construed liberally rather than narrowly and technically and the Court must place a practical and realistic construction upon it. -here: The VA ignored the plain language of the 1997 CBA of the parties, as well as the Guidelines issued by respondent. He capriciously based his resolution on the respondent s practice of hiring which, however, by agreement of petitioner and respondent, was discontinued. LEYTE IV ELECTRIC COOPERATIVE V. LUYECO IV EMPLOYEES UNION (2007) Summary: CBA provided that employees would be paid holiday pay. Union claimed the holiday pay but mngt said they already paid it. Grievance machinery pursued but exhausted, parties submitted to NCMB. Parties submitted their position papers. Union admitted that the employees were being paid for all the days of the month (even if there is no work including holidays) but still claims for holiday pay. ER insisted it already is deemed to have paid the said holiday pay. VA ruled ifo Union, saying that the CBA required that the payment of the holiday pay be reflected in the payroll slips but the payroll slips did not so provide. MR filed before VA but denied. 30 days after denial of MR, ER filed R65 P4C before CA (VA GADALEJ) but CA dismissed the petition for wrong mode of remedy: Should have been R43. SC held that wrong remedy indeed but for interest of substantial justice, considered the R65 petition because the VA decision would require the ER to pay EE double: -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 final and executory upon the lapse of the period to appeal; and since their awards determine the rights of parties, their decisions have the same effect as judgments of a court. -R43 (providing that R43 shall not apply to judgments or final orders issued under the Labor Code of the Philippines) is merely a reiteration of the exception to the
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exclusive appellate jurisdiction of the CA as stated in BP 129. Further, decisions of VA are not issued pursuant to LC since it is a QJ Instrumentality similar to the ECC -GR: R43 petition for review to CA -X: R65 P4C, especially when VA acted in total disregard of evidence material to or decisive of the controversy. other exceptions: (a) when public welfare and the advancement of public policy dictate; (b) when the broader interests of justice so require; (c) when the writs issued are null; and (d) when the questioned order amounts to an oppressive exercise of judicial authority. -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 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 paid all the days of the month even if not worked. -HERE: EEs required to work only from Monday to Friday. Thus, the minimum allowable divisor is 263, which is arrived at by deducting 51 un-worked Sundays and 51 un-worked Saturdays from 365 days. Considering that petitioner used the 360day divisor, which is clearly above the minimum, indubitably, petitioner's employees are being given their holiday pay. FINALITY AND EXECUTION OF AWARDS Art. 262-A Award: -final and executor after 10 calendar days from RECEIPT of the copy of the award or its decision by the parties. X: unless appealed to NLRC -WoE: may be issued upon motion of interested party made by VA VA Panel LA in region where movant resides, in case of absence or incapacity of VA INDOPHIL TEXTILE MILL WORKERS UNION V. CALICA (1992) Summary: The officers of Indophil Textile created Indophil Acrylic. Both have different bargaining units but the union of Indophil Textile want to extend their bargaining unit to the employees of Indophil Acrylic, the latter being an extension or expansion in accordance with the CBA. Grievance machinery exhausted, parties resorted to VA. VA held for Indophil textile so Union appealed. SC affirmed VA. 99 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

-the decisions of voluntary arbitrators are to be given the highest respect and a certain measure of finality, but this is not a hard and fast rule, it does not preclude judicial review thereof where want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the law were brought to our attention. -here, VA Calica did not abuse his discretion, even citing facts and the law upon which his award was based. But the court found that VA Calica did not err in not allowing the corporate veil of Indophil textile based on jurisprudence (and also since the Union is not claiming any liability of the officers of the corporation but is merely insisting on the expansion of its bargaining unit. The claim of liability on the officers of the corporation merits the piercing of the corporate veil).

PLDT V. MONTEMAYOR (1990) Summary: PLDT dismissed 3 employees: 2 for dishonesty and 1, a probational employee, for failure to meet the minimum requirement for regularization. The Union contested the termination, they all agreed to submit dispute to VA. VA held ifo Union, held that PLDT should not have dismissed the EEs. Termination of the 2 dishonest employees too drastic + probi employee should have been retained because she was in fact a regular employee already. PLDT MR denied. So they filed 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 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 arbitrator, by the nature of his functions, acts in a quasi-judicial capacity. There is no reason why his decisions involving interpretations of law should be beyond the Supreme Court's review. Administrative officials are presumed to act in accordance 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 discretion in their official acts. -PLDT is justified in dismissing the employees: In the ultimate analysis, dismissal of a dishonest employee is in the best interest not only of management but also of 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 impose unjust situations on either labor or management. -but as to the probi employee, her dismissal is not justified so VA correct in saying that she should be reinstated MARANAW HOTELS VS. CA (1992) Summary: Room boy was found to have blurted out discourteous remarks against his supervisors. He was dismissed by the ER. Room boy filed Complaint for Illegal dismissal, which was submitted to VA. VA found that the discourtesy only merits a 7
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day suspension in accordance with the rules of the ER but since he was terminated, the room boy should have been reinstated. ER appealed to CA but CA denied, even in MR. Court held that petition had no merit, as there was no GADALEJ on the part of the VA. -As in the case of a labor arbiter, the conclusions of a voluntary arbitrator, when they are sufficiently corroborated by the evidence on record, should similarly be respected by appellate tribunals since he is also in a vantage position to assess and evaluate the credibility of the contending parties. -We have also emphasized the rule that decisions of voluntary arbitrators are final and unappealable except when there is ...want of jurisdiction ...grave abuse of discretion ...violation of due process ...denial of substantial justice ...erroneous interpretation of the law. -HERE: None of the exceptions lie in the case before Us. -ON STRAINED RELATIONS ARGUMENT: NOT TENABLE: the doctrine of strained relations cannot be applied with impunity lest We trifle with the rights of wage earners by authorizing management to indiscriminately dismiss them and thereafter provide the employer with the convenient and ready excuse not to reinstate them. On the contrary, We have to exercise extreme caution in this regard. -Indeed, "strained relations" may be invoked only against employees whose positions demand trust and confidence, or whose differences with their employer are of such nature or degree as to preclude reinstatement. In the instant case, however, the relationship between private respondent, a roomboy, and management was clearly on an impersonal level. IMPERIAL TEXTILE MILLS INC V. SAMPANG (1993), SUPRA Summary: VA reconsidered his decision which was initially ifo Corp. Court held that once he has rendered his decision, his office terminates. He did not have jurisdiction to review his decision anymore. His award was rendered during the time when the LC provided that the awards of VA are already final and executory. UNICRAFT INDUSTRIES INT L V. CA (2002) Summary: In the initial case, the facts stated that the respondents were employees of the ER who were transferred to the Cebu branch of the ER. However, the Cebu 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 submitted dispute to VA. VA decided w/o receiving evidence from the ER, ordering the payment of separation pay and atty s fees. During appeal to the CA, the parties agreed to a stipulation to refer back the proceedings to the VA to 100 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a

determine WON there was illegal dismissal. The VA, however, declared that he had already lost his jurisdiction over the case when he rendered the Award ifo Union. CA then partially executed the decision, which was assailed by the ER. Court held that the VA has not yet lost his jurisdiction because he has not provided both parties adequate opportunity to be heard. -the finding of the A was premature and null and void because the award of separation pay carries with it the inevitable conclusion that the complainants were illegally dismissed. SIME DARBY PILIPINAS V. MAGSALIN (1989) Summary: The CBA entered by Sime Darby with the Unions in its establishment contained a provision for the grant of performance bonus, dependent on the return of capital investment as reflected in the financial statements. The Unions claimed the said performance bonus but Sime Darby alleged that the performance of the Union s members did not justify the award of such bonus. They submitted their dispute to the VA, and agreed that the award of the VA be final and executor. Both parties submitted their respective position papers, but Sime Darby expressed that it would file a Reply to the position papers of the unions. The VA, however, ruled ifo the unions even w/o the reply filed by the ER. VA ruled that Sime Darby had enough retained earnings to grant the performance bonus demanded by the union. Sime Darby filed MR but was denied, VA saying that he already lost jurisdiction once he rendered the said award. Now Sime Darby filed R65 P4C assailing the award, saying there was GADALEJ. Court upheld VA s decision: -the award of a Voluntary Arbitrator is final and executory after ten (10) calendar days from receipt of the award by the parties. -B4: award of a Voluntary Arbitrator relating to money claims amounting to more than P 100,000.00 or forty percent (40%) of the paid-up capital of the employer (whichever was lower), could be appealed to the National Labor Relations Commission upon the grounds of (a) abuse of discretion; or (b) gross incompetence, presumably of the arbitrator -NOW: R 65 P4C, but only in exceptional cases: -a voluntary arbitral award may be modified and set aside only upon the same grounds on which a decision of the NLRC itself may be modified or set aside, by this Court. WON VA was only authorized to determine the question of WON a performance bonus was to be granted, and the determination of the amount to be given is reserved for determination by the employer Sime Darby? NO. -Submission agreement only submitted for resolution "the issue of performance bonus.". If Sime Darby's counsel deemed it as two-tiered problem, he should have said so but no!

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- the Voluntary Arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. The Arbitrator, as already indicated, viewed his authority as embracing not merely the determination of the abstract question of whether or not a performance bonus was to be granted but also, in the affirmative case, the amount thereof. WON VA GADALEJ in awarding an amount equivalent to 75% of the basic monthly pay of the members of the respondent Union for being devoid of factual basis? Not really. VA based his decision on the CBA, which does not identify whose performance is to be appraised in determining an appropriate amount to be awaded as performance bonus. Court considered performance of the company as a whole, not merely the production or manufacturing performance of its employees.

LUDO & LUYM CORP V. SAORNIDO (2003), SUPRA
Summary: Ludo hired as regular employees arrastre workers from CLAS. Now these workers joined Ludo's labor union and are now claiming benefits enjoyed by union members. They went to VA, submitted only as the issue to be resolved the date of regularization of the employees but the VA awarded benefits (determined amount to be received by the parties). Court held that VA has plenary jurisdiction to make awards in the interest of speedy justice.

accept as adequate to justify a conclusion . . . . It does not demand proof beyond reasonable doubt of the employee's misconduct. . . . As pointed out by the panel, the petitioner submitted the case for decision without any evidence, documentary or testimonial, other than her own allegations, adopting only as her proof the overtime authorization slips involved. It should be noted that the panel did not have 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 proceeding was ever introduced before the panel. The voluntary arbitrators, therefore, cannot be faulted for so deciding based on the evidence made available to them. -even if the trial court found the same documentary evidence to be inadequate to sustain Ramoran's conviction, by no means does it prevent the panel from 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 given opportunity to give her side. She consented to resorting to VA and participated in the selection of the VAs. -ON MITIGATION OF LIABILITY THAT IT WAS THE FIRST TIME THAT SHE WAS CHARGED W/ FALSIFICATION: Cannot be. She was earlier suspended for allegedly tampring with entries in OR issued by Limited Vision Center in support of her application for the optical loan...

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 between ER and Ramoran submitting the issue of WON Ramoran was terminated for just cause to the VA, LA terminated proceedings before him. Meanwhile, Jardine also filed criminal charges for falsification of private documents before MTC Makati. VA ruled that the termination was valid. After that, Ramoran was convicted on one charge of falsification but was later acquitted. Believing that her acquittal in the criminal case would reverse the decision of the VA, she filed a R65 P4C before CA. 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, even finality, if supported by substantial evidence. -conclusions of voluntary arbitrator (or a panel as in this case) when they are sufficiently corroborated by the evidence on record, should similarly be respected by appellate tribunals. - Dismissal on the basis of loss of trust and confidence calls for substantial evidence only . . . defined as the amount of relevant evidence which a reasonable mind might 101 | L a b o r A r b i t r a t i o n C a s e D i g e s t s _ C h a M e n d o z a
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