Contents

1. Takata v Bureau of Labor Relations GR. 196276, June 2014 ............................................... 1

2. The heritage hotel v National Union GR. 178296, Jan. 12, 2011 ....................................... 8
G.R. No. 178296 ........................................................................................................................................... 8
3. Mariwasa v sec. of Labor gr. 183317, dec. 21, 2009 ............................................................ 21
G.R. No. 183317 ......................................................................................................................................... 21
4. Standard v secretary gr. 11497, june 16, 2004 ...................................................................... 29
5. Union v nestle gr 158930-31, march 3, 2008 .......................................................................... 40
6. Lopez v FFW gr 75700-0, aug. 30, 1990 .................................................................................... 71
7. PICOP v anacleto gr 160828, au. 9, 2010 .................................................................................. 78
Present: .......................................................................................................................................................... 79

1. Takata v Bureau of Labor Relations GR. 196276, June 2014

G.R. No. 196276 June 4, 2014

TAKATA (PHILIPPINES) CORPORATION, Petitioner,

vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS MANGGAGAWA NG TAKATA
(SALAMAT),Respondents.

DECISION

PERALTA, J.:

Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines

Corporation assailing the Decision1 dated December 22, 2010 and the Resolution 2 dated
March 28, 2011 of the Court of Appeals in CA-G.R. SP No. 112406.

On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE)
Regional Office a Petition3for Cancellation of the Certificate of Union Registration of
Respondent Samahang Lakas Manggagawa ng Takata (SALAMA1) on the ground that the
latter is guilty of misrepresentation, false statement and fraud with respect to the number
of those who participated in the organizational meeting, the adoption and ratification of its
Constitution and By-Laws, and in the election of its officers. It contended that in the May 1,
2009 organizational meeting of respondent, only 68 attendees signed the attendance sheet,
and which number comprised only 17% of the total number of the 396 regular rank- and-
file employees which respondent sought to represent, and hence, respondent failed to
comply with the 20% minimum membership requirement. Petitioner insisted that the
document "Pangalan ng mga Kasapi ng Unyon" bore no signatures of the alleged 119 union
members; and that employees were not given sufficient information on the documents they
signed; that the document "Sama-Samang Pahayag ng Pagsapi" was not submitted at the
time of the filing of respondent's application for union registration; that the 119 union
members were actually only 117; and, that the total number of petitioner's employees as of
May 1, 2009 was 470, and not 396 as respondent claimed.4

Respondent denied the charge and claimed that the 119 union members were more than
the 20% requirement for union registration. The document "Sama-Samang Pahayag ng
Pagsapi sa Unyon" which it presented in its petition for certification election 5 supported their
claim of 119 members. Respondent also contended that petitioner was estopped from
assailing its legal personality as it agreed to a certification election and actively participated
in the pre-election conference of the certification election proceedings.6 Respondent argued
that the union members were informed of the contents of the documents they signed and
that the 68 attendees to the organizational meeting constituted more than 50% of the total
union membership, hence, a quo rumexisted for the conduct of the said meeting. 7

On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a
Decision8 granting the petition for cancellation of respondent's certificate of registration, the
dispositive portion of which reads:

WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED.

Accordingly, the respondent Union Certificate of Registration No. RO400A-2009-05-01-UR-
LAG, dated May 19, 2009 is hereby REVOCKED (sic) and /or CANCELLED pursuant to
paragraph (a) & (b), Section 3, Rule XIV of Department Order No. 40-03 and the Samahang
Lakas ng Manggagawa ng TAKATA (SALAMAT) is hereby delisted from the roll of legitimate
labor organization of this office.9

In revoking respondent's certificate of registration, the Regional Director found that the 68
employees who attended the organizational meeting was obviously less than 20% of the
total number of 396 regular rank-and-file employees which respondent sought to represent,
hence, short of the union registration requirement; that the attendance sheet which
contained the signatures and names of the union members totalling to 68 contradicted the
list of names stated in the document denominated as "Pangalan ng mga Kasaping Unyon."
The document "Sama-Samang Pahayag ng Pagsapi" was not attached to the application for
registration as it was only submitted in the petition for certification election filed by
respondent at a later date. The Regional Director also found that the proceedings in the
cancellation of registration and certification elections are two different and entirely separate
and independent proceedings which were not dependent on each other.

Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal

Officer, Domingo P. Mole, filed a Notice and Memorandum of Appeal 10 with the Bureau of
Labor Relations (BLR). However, on September 28,2009, respondent, through its counsels,
Attys.

Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with
Formal Entry of Appearance11 to the Office of the DOLE Secretary, which the latter
eventually referred to the BLR. Petitioner filed an Opposition to the Appeals 12 praying for
their dismissal on the ground of forum shopping as respondent filed two separate appeals in
two separate venues; and for failing to avail of the correct remedy within the period; and
that the certificate of registration was tainted with fraud, misrepresentation and falsification.

In its Answer,13 respondent claimed that there was no forum shopping as BMP's Paralegal
Officer was no longer authorized to file an appeal on behalf of respondent as the latter's link
with BMP was already terminated and only the Union President was authorized to file the
appeal; and that it complied with Department Order No. 40-03.

On December 9, 2009, after considering respondent's Appeal Memorandum with Formal

Entry of Appearance and petitioner's Answer, the BLR rendered its Decision 14 reversing the
Order of the Regional Director, the decretal portion of which reads:

WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo S.
Martinez, Sr., dated 27 August 2009, is hereby REVERSEDand SET ASIDE.

Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the

roster of labor organizations.15

In reversing, the BLR found that petitioner failed to prove that respondent deliberately and
maliciously misrepresented the number of rank-and-file employees. It pointed out
petitioner's basis for the alleged noncompliance with the minimum membership requirement
for registration was the attendance of 68 members to the May 1, 2009 organizational
meeting supposedly comprising only 17% of the total 396 regular rank-and-file employees.
However, the BLR found that the list of employees who participated in the organizational
meeting was a separate and distinct requirement from the list of the names of members
comprising at least 20% of the employees in the bargaining unit; and that there was no
requirement for signatures opposite the names of the union members; and there was no
evidence showing that the employees assailed their inclusion in the list of union members.

Petitioner filed a motion for reconsideration, which was denied by the BLR in a
Resolution16 dated January 8, 2010.

Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.

After the submission of the parties' respective pleadings, the case was submitted for
decision.

On December 22, 2010, the CA rendered its assailed decision which denied the petition and
affirmed the decision of the BLR. Petitioner's motion for reconsideration was denied in a
Resolution dated March 29, 2011.

Hence this petition for review filed by petitioner raising the following issues, to wit:

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN

AFFIRMING THE DECISION OF PUBLIC RESPONDENT BLR AND NOT FINDING ANY
VIOLATION BY SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) OF THE RULE ON
FORUM SHOPPING IN THE FILING OF TWO VERIFIED APPEALS FOR AND ITS BEHALF. BOTH
OF THE APPEALS SHOULD HAVE BEEN DISMISSED OUTRIGHT BY PUBLIC RESPONDENT
BLR, ON GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE
APPLICATION FOR REGISTRATION OF SAMAHANG LAKAS MANGGAGAWA SA TAKATA
(SALAMAT) WAS COMPLIANT WITH THE LAW. CONSIDERING THE CIRCUMSTANCES
OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED
WITH FRAUD, MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT POSSESS
THE REQUIREDNUMBER OF MEMBERS AT THE TIME OF FILING OF ITS APPLICATION FOR
REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION, AND FALSE
STATEMENTS AND FRAUD IN CONNECTION THEREWITH. 17

Anent the first issue, petitioner contends that respondent had filed two separate appeals
with two different representations at two different venues, in violation of the rule on
multiplicity of suits and forum shopping, and instead of dismissing both appeals, the appeal
erroneously filed before the Labor Secretary was the one held validly filed, entertained and
even granted; that it is not within the discretion of BLR to choose which between the two
appeals should be entertained, as it is the fact of the filing of the two appeals that is being
prohibited and not who among the representatives therein possessed the authority.

We are not persuaded.

We find no error committed by the CA in finding that respondent committed no forum

shopping. As the CA correctly concluded, to wit:

It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file
an appeal on behalf of union SALAMAT and that BMP was duly informed that its services was
already terminated. SALAMAT even submitted before the BLR its "Resolusyon Blg. 01-2009"
terminating the services of BMP and revoking the representation of Mr. Domingo Mole in any
of the pending cases being handled by him on behalf of the union. So, considering that BMP
Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal when it filed
the Notice and Memorandum of Appeal to DOLE Regional Office No. IV-A, the same can no
longer be treated as an appeal filed by union SALAMAT. Hence, there is no forum shopping
to speak of in this case as only the Appeal Memorandum with Formal Entry of Appearance
filed by Atty. Napoleon C. Banzuela, Jr. and Atty. Jehn Louie W. Velandrez is sanctioned by
SALAMAT.18

Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such
appeal is considered to have not been filed at all. It has been held that "if a complaint is
filed for and in behalf of the plaintiff who is not authorized to do so, the complaint is not
deemed filed.

An unauthorized complaint does not produce any legal effect."19

Respondent through its authorized representative filed its Appeal Memorandum with Formal
Entry of Appearance before the Labor Secretary, and not with the BLR. As the appeal
emanated from the petition for cancellation of certificate of registration filed with the
Regional Office, the decision canceling the registration is appealable to the BLR, and not
with the Labor Secretary. However, since the Labor Secretary motu propio referred the
appeal with the BLR, the latter can now act on it. Considering that Mole's appeal with the
BLR was not deemed filed, respondents appeal, through Banzuela and Associates, which the
Labor Secretary referred to the BLR was the only existing appeal with the BLR for
resolution. There is, therefore, no merit to petitioner's claim that BLR chose the appeal of
Banzuela and Associates over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees
Union20 cited by petitioner is not at all applicable in this case as the issue therein is the
authority of the Labor Secretary to review the decision of the Bureau of Labor Relations
rendered in the exercise of its appellate jurisdiction over decision of the Regional Director in
cases involving cancellations of certificate of registration of labor unions. We found no grave
abuse of discretion committed by the Secretary of Labor in not acting on therein petitioner's
appeal. The decision of the Bureau of Labor Relations on cases brought before it on appeal
from the Regional Director are final and executory. Hence, the remedy of the aggrieved
party is to seasonably avail of the special civil action of certiorari under Rule 65 and the
Rules of Court. In this case, after the Labor Secretary motu propio referred respondent's
appeal filed with it to the BLR which rendered its decision reversing the Regional Director,
petitioner went directly to the CA via a petition for certiorari under Rule 65.

As to the second issue, petitioner seeks the cancellation of respondent's registration on

grounds offraud and misrepresentation bearing on the minimum requirement of the law as
to its membership, considering the big disparity in numbers, between the organizational
meeting and the list of members, and so misleading the BLR that it obtained the minimum
required number of employees for purposes of organization and registration.

We find no merit in the arguments.

Art. 234 of the Labor Code provides:

ART. 234. Requirements of Registration. - A federation, national union or industry or trade

union center or an independent union shall acquire legal personality and shall be entitled to
the rights and privileges granted by law to legitimate labor organizations upon issuance of
the certificate of registration based on the following requirements:

(a) Fifty pesos (50.00)registration fee;

(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers
who participated in such meetings;

(c) In case the applicant is an independent union, the names of all its members
comprising at least twenty percent (20%) of all the employees in the bargaining unit
where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; and

(e) Four copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it."

And after the issuance of the certificate of registration, the labor organization's registration
could be assailed directly through cancellation of registration proceedings in accordance with
Articles 238 and 239 of the Labor Code. And the cancellation of union certificate of
registration and the grounds thereof are as follows:
ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate
labor organization, whether national or local, may be cancelled by the Bureau, after due
hearing, only on the grounds specified in Article 239 hereof.

ART. 239. Grounds for Cancellation of Union Registration. - The following may constitute
grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or

ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the election of

officers, minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members.

Petitioner's charge that respondent committed misrepresentation and fraud in securing its
certificate of registration is a serious charge and must be carefully evaluated. Allegations
thereof should be compounded with supporting circumstances and evidence.21 We find no
evidence on record to support petitioner's accusation.

Petitioner's allegation of misrepresentation and fraud is based on its claim that during the
organizational meeting on May 1, 2009, only 68 employees attended, while respondent
claimed that it has 119 members as shown in the document denominated as "Pangalan ng
mga Kasapi ng Unyon;" hence, respondent misrepresented on the 20% requirement of the
law as to its membership.

We do not agree.

It does not appear in Article 234 (b) of the Labor Code that the attendees in the
organizational meeting must comprise 20% of the employees in the bargaining unit. In fact,
even the Implementing Rules and Regulations of the Labor Code does not so provide. It is
only under Article 234 (c) that requires the names of all its members comprising at least
twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate.
Clearly, the 20% minimum requirement pertains to the employees membership in the
union and not to the list of workers who participated in the organizational meeting. Indeed,
Article 234 (b) and (c) provide for separate requirements, which must be submitted for the
union's registration, and which respondent did submit. Here, the total number of employees
in the bargaining unit was 396, and 20% of which was about 79. Respondent submitted a
document entitled "Pangalan ng Mga Kasapi ng Unyon" showing the names of 119
employees as union members, thus respondent sufficiently complied even beyond the 20%
minimum membership requirement. Respondent also submitted the attendance sheet of the
organizational meeting which contained the names and signatures of the 68 union members
who attended the meeting. Considering that there are 119 union members which are more
than 20% of all the employees of the bargaining unit, and since the law does not provide for
the required number of members to attend the organizational meeting, the 68 attendees
which comprised at least the majority of the 119 union members would already constitute a
quorum for the meeting to proceed and to validly ratify the Constitution and By-laws of the
union. There is, therefore, no basis for petitioner to contend that grounds exist for the
cancellation of respondent's union registration. For fraud and misrepresentation to be
grounds for cancellation of union registration under Article 239 of the Labor Code, the
nature of the fraud and misrepresentation must be grave and compelling enough to vitiate
the consent of a majority of union members.22

Petitioner's claim that the alleged union members signed documents without adequate
information is not persuasive. The one who alleges a fact has the burden of proving it and a
mere allegation is not evidence.23 In fact, we note that not one of those listed in the
document denominated as "Pangalan ng Mga Kasaping Unyon" had come forward to deny
their membership with respondent. Notably, it had not been rebutted that the same union
members had signed the document entitled "Sama-Samang Pahayag ng Pagsapi," thus,
strengtheningtheir desire to be members of the respondent union.

Petitioner claims that in the list of members, there was an employee whose name appeared
twice and another employee who was merely a project employee. Such could not be
considered a misrepresentation in the absence of showing that respondent deliberately did
so for the purpose of increasing their union membership. In fact, even if those two names
were not included in the list of union members, there would still be 117 members which was
still more than 20% of the 396 rank-and-file employees.

As to petitioner's argument that the total number of its employees as of May 1, 2009 was
470, and not396 as respondent claimed, still the 117 union members comprised more than
the 20% membership requirement for respondent's registration.

In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment, 24 we

said:

For the purpose of de-certifying a union such as respondent, it must be shown that there
was misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification; or, in connection with the election of officers, the minutes of the election of
officers, the list of voters, or failure to submit these documents together with the list of the
newly elected-appointed officers and their postal addresses to the BLR.

The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel
respondents certificate of registration. The cancellation of a unions registration doubtless
has an impairing dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration under the Labor Code,
the nature of the fraud and misrepresentation must be grave and compelling enough to
vitiate the consent of a majority of union members.1wphi1

In this case, we agree with the BLR and the CA that respondent could not have possibly
committed misrepresentation, fraud, or false statements. The alleged failure of respondent
to indicate with mathematical precision the total number of employees in the bargaining
unit is of no moment, especially as it was able to comply with the 20% minimum
membership requirement. Even if the total number of rank-and-file employees of petitioner
is 528, while respondent declared that it should only be 455, it still cannot be denied that
the latter would have more than complied with the registration requirement. 25

WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated
December 22, 2010 and the Resolution dated March 28, 2011 of the Court of Appeals, in
CA-G.R. SP No. 112406, are AFFIRMED.
SO ORDERED.

2. The heritage hotel v National Union GR. 178296, Jan. 12, 2011
THE HERITAGE HOTEL MANILA, G.R. No. 178296
acting through its owner, GRAND
PLAZA HOTEL CORPORATION,
Petitioner, Present:

- versus -
CARPIO, J.,
NATIONAL UNION OF WORKERS
IN THE HOTEL, RESTAURANT Chairperson,
AND ALLIED INDUSTRIES-
NACHURA,
HERITAGE HOTEL MANILA
SUPERVISORS CHAPTER LEONARDO-DE CASTRO,*
(NUWHRAIN-HHMSC),
Respondent. ABAD, and

MENDOZA, JJ.

Promulgated:

January 12, 2011

x----------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari of the Decision[1] of the Court of
Appeals (CA) dated May 30, 2005 and Resolution dated June 4, 2007. The assailed
Decision affirmed the dismissal of a petition for cancellation of union registration filed by
petitioner, Grand Plaza Hotel Corporation, owner of Heritage Hotel Manila, against
 respondent, National Union of Workers in the Hotel, Restaurant and Allied Industries-
Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC), a labor organization of
the supervisory employees of Heritage Hotel Manila.

The case stemmed from the following antecedents:

On October 11, 1995, respondent filed with the Department of Labor and
Employment-National Capital Region (DOLE-NCR) a petition for certification
election.[2] The Med-Arbiter granted the petition on February 14, 1996 and ordered the
holding of a certification election.[3] On appeal, the DOLE Secretary, in a Resolution
dated August 15, 1996, affirmed the Med-Arbiters order and remanded the case to the
Med-Arbiter for the holding of a preelection conference on February 26, 1997. Petitioner
filed a motion for reconsideration, but it was denied on September 23, 1996.

The preelection conference was not held as initially scheduled; it was held a year later, or
on February 20, 1998. Petitioner moved to archive or to dismiss the petition due to
alleged repeated non-appearance of respondent. The latter agreed to suspend
proceedings until further notice. The preelection conference resumed on January 29,
2000.

Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of
Labor Relations (BLR) its annual financial report for several years and the list of its
members since it filed its registration papers in 1995. Consequently, on May 19, 2000,
petitioner filed a Petition for Cancellation of Registration of respondent, on the ground of
the non-submission of the said documents. Petitioner prayed that respondents
Certificate of Creation of Local/Chapter be cancelled and its name be deleted from the
list of legitimate labor organizations. It further requested the suspension of the
certification election proceedings.[4]

On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or Suspend
the [Certification Election] Proceedings,[5] arguing that the dismissal or suspension of the
proceedings is warranted, considering that the legitimacy of respondent is seriously
being challenged in the petition for cancellation of registration. Petitioner maintained
 that the resolution of the issue of whether respondent is a legitimate labor organization
is crucial to the issue of whether it may exercise rights of a legitimate labor
organization, which include the right to be certified as the bargaining agent of the
covered employees.

Nevertheless, the certification election pushed through on June 23, 2000. Respondent
emerged as the winner.[6]

On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of
Election Results and Winner,[7] stating that the certification election held on June 23,
2000 was an exercise in futility because, once respondents registration is cancelled, it
would no longer be entitled to be certified as the exclusive bargaining agent of the
supervisory employees. Petitioner also claimed that some of respondents members were
not qualified to join the union because they were either confidential employees or
managerial employees. It then prayed that the certification of the election results and
winner be deferred until the petition for cancellation shall have been resolved, and that
respondents members who held confidential or managerial positions be excluded from
the supervisors bargaining unit.

Meanwhile, respondent filed its Answer[8] to the petition for the cancellation of its
registration. It averred that the petition was filed primarily to delay the conduct of the
certification election, the respondents certification as the exclusive bargaining
representative of the supervisory employees, and the commencement of bargaining
negotiations. Respondent prayed for the dismissal of the petition for the following
reasons: (a) petitioner is estopped from questioning respondents status as a legitimate
labor organization as it had already recognized respondent as such during the
preelection conferences; (b) petitioner is not the party-in-interest, as the union
members are the ones who would be disadvantaged by the non-submission of financial
reports; (c) it has already complied with the reportorial requirements, having submitted
its financial statements for 1996, 1997, 1998, and 1999, its updated list of officers, and
its list of members for the years 1995, 1996, 1997, 1998, and 1999; (d) the petition is
already moot and academic, considering that the certification election had already been
held, and the members had manifested their will to be represented by respondent.
Citing National Union of Bank Employees v. Minister of Labor, et al. [9] and Samahan ng
Manggagawa sa Pacific Plastic v. Hon. Laguesma,[10] the Med-Arbiter held that the
pendency of a petition for cancellation of registration is not a bar to the holding of a
certification election. Thus, in an Order[11] dated January 26, 2001, the Med-Arbiter
dismissed petitioners protest, and certified respondent as the sole and exclusive
bargaining agent of all supervisory employees.

Petitioner subsequently appealed the said Order to the DOLE Secretary. [12] The appeal was
later dismissed by DOLE Secretary Patricia A. Sto. Tomas (DOLE Secretary Sto. Tomas)
in the Resolution of August 21, 2002.[13] Petitioner moved for reconsideration, but the
motion was also denied.[14]

In the meantime, Regional Director Alex E. Maraan (Regional Director Maraan) of DOLE-NCR
finally resolved the petition for cancellation of registration. While finding that respondent
had indeed failed to file financial reports and the list of its members for several years,
he, nonetheless, denied the petition, ratiocinating that freedom of association and the
employees right to self-organization are more substantive considerations. He took into
account the fact that respondent won the certification election and that it had already
been certified as the exclusive bargaining agent of the supervisory employees. In view
of the foregoing, Regional Director Maraanwhile emphasizing that the non-compliance
with the law is not viewed with favorconsidered the belated submission of the annual
financial reports and the list of members as sufficient compliance thereof and considered
them as having been submitted on time. The dispositive portion of the decision [15] dated
December 29, 2001 reads:

WHEREFORE, premises considered, the instant petition to delist the

National Union of Workers in the Hotel, Restaurant and Allied Industries-
Heritage Hotel Manila Supervisors Chapter from the roll of legitimate labor
organizations is hereby DENIED.
 SO ORDERED.[16]

Aggrieved, petitioner appealed the decision to the BLR. [17] BLR Director Hans Leo Cacdac
inhibited himself from the case because he had been a former counsel of respondent.

In view of Director Cacdacs inhibition, DOLE Secretary Sto. Tomas took cognizance of the
appeal. In a resolution[18] dated February 21, 2003, she dismissed the appeal, holding
that the constitutionally guaranteed freedom of association and right of workers to self-
organization outweighed respondents noncompliance with the statutory requirements to
maintain its status as a legitimate labor organization.

Petitioner filed a motion for reconsideration,[19] but the motion was likewise
denied in a resolution[20] dated May 30, 2003. DOLE Secretary Sto. Tomas admitted that
it was the BLR which had jurisdiction over the appeal, but she pointed out that the BLR
Director had voluntarily inhibited himself from the case because he used to appear as
counsel for respondent. In order to maintain the integrity of the decision and of the BLR,
she therefore accepted the motion to inhibit and took cognizance of the appeal.

Petitioner filed a petition for certiorari with the CA, raising the issue of whether the DOLE
Secretary acted with grave abuse of discretion in taking cognizance of the appeal and
affirming the dismissal of its petition for cancellation of respondents registration.

In a Decision dated May 30, 2005, the CA denied the petition. The CA opined that the DOLE
Secretary may legally assume jurisdiction over an appeal from the decision of the
Regional Director in the event that the Director of the BLR inhibits himself from the case.
According to the CA, in the absence of the BLR Director, there is no person more
competent to resolve the appeal than the DOLE Secretary. The CA brushed aside the
allegation of bias and partiality on the part of the DOLE Secretary, considering that such
allegation was not supported by any evidence.

The CA also found that the DOLE Secretary did not commit grave abuse of discretion when
she affirmed the dismissal of the petition for cancellation of respondents registration as
 a labor organization. Echoing the DOLE Secretary, the CA held that the requirements of
registration of labor organizations are an exercise of the overriding police power of the
State, designed for the protection of workers against potential abuse by the union that
recruits them. These requirements, the CA opined, should not be exploited to work
against the workers constitutionally protected right to self-organization.

Petitioner filed a motion for reconsideration, invoking this Courts ruling in Abbott Labs.
Phils., Inc. v. Abbott Labs. Employees Union,[21] which categorically declared that the
DOLE Secretary has no authority to review the decision of the Regional Director in a
petition for cancellation of union registration, and Section 4, [22] Rule VIII, Book V of the
Omnibus Rules Implementing the Labor Code.

In its Resolution[23] dated June 4, 2007, the CA denied petitioners motion, stating that the
BLR Directors inhibition from the case was a peculiarity not present in the Abbott case,
and that such inhibition justified the assumption of jurisdiction by the DOLE Secretary.

In this petition, petitioner argues that:

I.

The Court of Appeals seriously erred in ruling that the Labor Secretary properly
assumed jurisdiction over Petitioners appeal of the Regional Directors
Decision in the Cancellation Petition x x x.

A. Jurisdiction is conferred only by law. The Labor Secretary had

no jurisdiction to review the decision of the Regional Director in a
petition for cancellation. Such jurisdiction is conferred by law to the
BLR.

B. The unilateral inhibition by the BLR Director cannot justify the

Labor Secretarys exercise of jurisdiction over the Appeal.

C. The Labor Secretarys assumption of jurisdiction over the

Appeal without notice violated Petitioners right to due process.
 II.

The Court of Appeals gravely erred in affirming the dismissal of the Cancellation
Petition despite the mandatory and unequivocal provisions of the Labor Code
and its Implementing Rules.[24]

The petition has no merit.

Jurisdiction to review the decision of the Regional Director lies with the BLR. This is clearly
provided in the Implementing Rules of the Labor Code and enunciated by the Court
in Abbott. But as pointed out by the CA, the present case involves a peculiar
circumstance that was not present or covered by the ruling in Abbott. In this case, the
BLR Director inhibited himself from the case because he was a former counsel of
respondent. Who, then, shall resolve the case in his place?

In Abbott, the appeal from the Regional Directors decision was directly filed with
the Office of the DOLE Secretary, and we ruled that the latter has no appellate
jurisdiction. In the instant case, the appeal was filed by petitioner with the BLR, which,
undisputedly, acquired jurisdiction over the case. Once jurisdiction is acquired by the
court, it remains with it until the full termination of the case.[25]

Thus, jurisdiction remained with the BLR despite the BLR Directors inhibition.
When the DOLE Secretary resolved the appeal, she merely stepped into the shoes of the
BLR Director and performed a function that the latter could not himself perform. She did
so pursuant to her power of supervision and control over the BLR.[26]

Expounding on the extent of the power of control, the Court, in Araneta, et al. v. Hon. M.
Gatmaitan, et al.,[27] pronounced that, if a certain power or authority is vested by law
 upon the Department Secretary, then such power or authority may be exercised directly
by the President, who exercises supervision and control over the departments. This
principle was incorporated in the Administrative Code of 1987, which defines supervision
and control as including the authority to act directly whenever a specific function is
entrusted by law or regulation to a subordinate.[28] Applying the foregoing to the present
case, it is clear that the DOLE Secretary, as the person exercising the power of
supervision and control over the BLR, has the authority to directly exercise the quasi-
judicial function entrusted by law to the BLR Director.

It is true that the power of control and supervision does not give the Department Secretary
unbridled authority to take over the functions of his or her subordinate. Such authority is
subject to certain guidelines which are stated in Book IV, Chapter 8, Section 39(1)(a) of
the Administrative Code of 1987.[29] However, in the present case, the DOLE Secretarys
act of taking over the function of the BLR Director was warranted and necessitated by
the latters inhibition from the case and the objective to maintain the integrity of the
decision, as well as the Bureau itself.[30]

Petitioner insists that the BLR Directors subordinates should have resolved the appeal, citing
the provision under the Administrative Code of 1987 which states, in case of the
absence or disability of the head of a bureau or office, his duties shall be performed by
the assistant head.[31] The provision clearly does not apply considering that the BLR
Director was neither absent nor suffering from any disability; he remained as head of
the BLR. Thus, to dispel any suspicion of bias, the DOLE Secretary opted to resolve the
appeal herself.

Petitioner was not denied the right to due process when it was not notified in advance of the
BLR Directors inhibition and the DOLE Secretarys assumption of the case. Well-settled is
the rule that the essence of due process is simply an opportunity to be heard, or, as
applied to administrative proceedings, an opportunity to explain ones side or an
opportunity to seek a reconsideration of the action or ruling complained of. [32] Petitioner
had the opportunity to question the BLR Directors inhibition and the DOLE Secretarys
taking cognizance of the case when it filed a motion for reconsideration of the latters
decision. It would be well to state that a critical component of due process is a hearing
before an impartial and disinterested tribunal, for all the elements of due process, like
notice and hearing, would be meaningless if the ultimate decision would come from a
 partial and biased judge.[33] It was precisely to ensure a fair trial that moved the BLR
Director to inhibit himself from the case and the DOLE Secretary to take over his
function.

Petitioner also insists that respondents registration as a legitimate labor union should be
cancelled. Petitioner posits that once it is determined that a ground enumerated in
Article 239 of the Labor Code is present, cancellation of registration should follow; it
becomes the ministerial duty of the Regional Director to cancel the registration of the
labor organization, hence, the use of the word shall. Petitioner points out that the
Regional Director has admitted in its decision that respondent failed to submit the
required documents for a number of years; therefore, cancellation of its registration
should have followed as a matter of course.

We are not persuaded.

Articles 238 and 239 of the Labor Code read:

ART. 238. CANCELLATION OF REGISTRATION; APPEAL

The certificate of registration of any legitimate labor organization, whether

national or local, shall be canceled by the Bureau if it has reason to
believe, after due hearing, that the said labor organization no longer meets
one or more of the requirements herein prescribed.[34]

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION.

The following shall constitute grounds for cancellation of union registration:

xxxx

(d) Failure to submit the annual financial report to the Bureau within thirty (30)
days after the closing of every fiscal year and misrepresentation, false entries
or fraud in the preparation of the financial report itself;

xxxx
 (i) Failure to submit list of individual members to the Bureau once a year or
whenever required by the Bureau.[35]

These provisions give the Regional Director ample discretion in dealing with a petition for
cancellation of a unions registration, particularly, determining whether the union still
meets the requirements prescribed by law. It is sufficient to give the Regional Director
license to treat the late filing of required documents as sufficient compliance with the
requirements of the law. After all, the law requires the labor organization to submit the
annual financial report and list of members in order to verify if it is still viable and
financially sustainable as an organization so as to protect the employer and employees
from fraudulent or fly-by-night unions. With the submission of the required documents
by respondent, the purpose of the law has been achieved, though belatedly.

We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in
denying the petition for cancellation of respondents registration. The union members
and, in fact, all the employees belonging to the appropriate bargaining unit should not
be deprived of a bargaining agent, merely because of the negligence of the union
officers who were responsible for the submission of the documents to the BLR.

Labor authorities should, indeed, act with circumspection in treating petitions for
cancellation of union registration, lest they be accused of interfering with union
activities. In resolving the petition, consideration must be taken of the fundamental
rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of all
workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities. Labor authorities should bear in mind that registration confers upon
a union the status of legitimacy and the concomitant right and privileges granted by law
to a legitimate labor organization, particularly the right to participate in or ask for
certification election in a bargaining unit.[36] Thus, the cancellation of a certificate of
registration is the equivalent of snuffing out the life of a labor organization. For without
such registration, it loses - as a rule - its rights under the Labor Code.[37]
It is worth mentioning that the Labor Codes provisions on cancellation of union registration
and on reportorial requirements have been recently amended by Republic Act (R.A.) No.
9481, An Act Strengthening the Workers Constitutional Right to Self-Organization,
Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known
as the Labor Code of the Philippines, which lapsed into law on May 25, 2007 and became
effective on June 14, 2007. The amendment sought to strengthen the workers right to
self-organization and enhance the Philippines compliance with its international
obligations as embodied in the International Labour Organization (ILO) Convention No.
87,[38] pertaining to the non-dissolution of workers organizations by administrative
authority.[39] Thus, R.A. No. 9481 amended Article 239 to read:

ART. 239. Grounds for Cancellation of Union Registration.The following may

constitute grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or

ratification of the constitution and by-laws or amendments thereto, the
minutes of ratification, and the list of members who took part in the
ratification;

(b) Misrepresentation, false statements or fraud in connection with the election of

officers, minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members.

R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:

ART. 242-A. Reportorial Requirements.The following are documents required to

be submitted to the Bureau by the legitimate labor organization concerned:

(a) Its constitution and by-laws, or amendments thereto, the minutes of

ratification, and the list of members who took part in the ratification of the
constitution and by-laws within thirty (30) days from adoption or ratification
of the constitution and by-laws or amendments thereto;
 (b) Its list of officers, minutes of the election of officers, and list of voters within
thirty (30) days from election;

(c) Its annual financial report within thirty (30) days after the close of
every fiscal year; and

(d) Its list of members at least once a year or whenever required by the Bureau.

Failure to comply with the above requirements shall not be a ground for
cancellation of union registration but shall subject the erring officers
or members to suspension, expulsion from membership, or any
appropriate penalty.

ILO Convention No. 87, which we have ratified in 1953, provides that workers and
employers organizations shall not be liable to be dissolved or suspended by
administrative authority. The ILO has expressed the opinion that the cancellation of
union registration by the registrar of labor unions, which in our case is the BLR, is
tantamount to dissolution of the organization by administrative authority when such
measure would give rise to the loss of legal personality of the union or loss of
advantages necessary for it to carry out its activities, which is true in our jurisdiction.
Although the ILO has allowed such measure to be taken, provided that judicial
safeguards are in place, i.e., the right to appeal to a judicial body, it has nonetheless
reminded its members that dissolution of a union, and cancellation of registration for
that matter, involve serious consequences for occupational representation. It has,
therefore, deemed it preferable if such actions were to be taken only as a last resort and
after exhausting other possibilities with less serious effects on the organization. [40]

The aforesaid amendments and the ILOs opinion on this matter serve to fortify our ruling in
this case. We therefore quote with approval the DOLE Secretarys rationale for denying
the petition, thus:
 It is undisputed that appellee failed to submit its annual financial
reports and list of individual members in accordance with Article 239 of the
Labor Code. However, the existence of this ground should not necessarily lead
to the cancellation of union registration. Article 239 recognizes the regulatory
authority of the State to exact compliance with reporting requirements. Yet
there is more at stake in this case than merely monitoring union activities and
requiring periodic documentation thereof.

The more substantive considerations involve the constitutionally guaranteed

freedom of association and right of workers to self-organization. Also involved
is the public policy to promote free trade unionism and collective bargaining
as instruments of industrial peace and democracy. An overly stringent
interpretation of the statute governing cancellation of union registration
without regard to surrounding circumstances cannot be allowed. Otherwise, it
would lead to an unconstitutional application of the statute and emasculation
of public policy objectives. Worse, it can render nugatory the protection to
labor and social justice clauses that pervades the Constitution and the Labor
Code.

Moreover, submission of the required documents is the duty of the officers of the
union. It would be unreasonable for this Office to order the cancellation of the
union and penalize the entire union membership on the basis of the
negligence of its officers. In National Union of Bank Employees vs. Minister of
Labor, L-53406, 14 December 1981, 110 SCRA 296, the Supreme Court
ruled:

As aptly ruled by respondent Bureau of Labor Relations Director

Noriel: The rights of workers to self-organization finds general
and specific constitutional guarantees. x x x Such constitutional
guarantees should not be lightly taken much less nullified. A
healthy respect for the freedom of association demands that
acts imputable to officers or members be not easily visited with
capital punishments against the association itself.

At any rate, we note that on 19 May 2000, appellee had submitted its financial
statement for the years 1996-1999. With this submission, appellee has
substantially complied with its duty to submit its financial report for the said
period. To rule differently would be to preclude the union, after having failed
to meet its periodic obligations promptly, from taking appropriate measures
to correct its omissions. For the record, we do not view with favor appellees
late submission. Punctuality on the part of the union and its officers could
have prevented this petition.[41]
WHEREFORE, premises considered, the Court of Appeals Decision dated May 30, 2005 and
Resolution dated June 4, 2007 are AFFIRMED.

SO ORDERED.

3. Mariwasa v sec. of Labor gr. 183317, dec. 21, 2009

MARIWASA SIAM CERAMICS, INC., G.R. No. 183317

Petitioner,

Present:

CORONA, J.,

Chairperson,
- versus -
VELASCO, JR.,

NACHURA,

PERALTA, and

DEL CASTILLO,* JJ.

THE SECRETARY OF THE DEPARTMENT OF

LABOR AND EMPLOYMENT, CHIEF OF THE
BUREAU OF LABOR RELATIONS,
DEPARTMENT OF LABOR AND
EMPLOYMENT, REGIONAL DIRECTOR OF
DOLE REGIONAL OFFICE NUMBER IV-A &

SAMAHAN NG MGA MANGGAGAWA SA

MARIWASA SIAM CERAMICS, INC.
(SMMSC-INDEPENDENT),
 Respondents.

Promulgated:

December 21, 2009

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This is a petition for review on certiorari[1] under Rule 45 of the Rules of Court, seeking to
annul the Decision[2] dated December 20, 2007 and the Resolution[3] dated June 6,
2008 of the Court of Appeals in CA-G.R. SP No. 98332.

The antecedent facts are as follows

On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics,

Inc. (SMMSC-Independent) was issued a Certificate of Registration [4] as a legitimate
labor organization by the Department of Labor and Employment (DOLE), Region IV-A.

On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation
of Union Registration against respondent, claiming that the latter violated Article
234[5] of the Labor Code for not complying with the 20% requirement, and that it
committed massive fraud and misrepresentation in violation of Article 239 [6] of the same
code. The case was docketed as Case No. RO400-0506-AU-004.
On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the
petition, revoking the registration of respondent, and delisting it from the roster of
active labor unions.

Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).

In a Decision[7] dated June 14, 2006, the BLR granted respondents appeal and disposed as
follows

WHEREFORE, premises considered, the appeal by Samahan ng Manggagawa sa

Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) is hereby GRANTED,
and the Decision dated 26 August 2005 by DOLE-Region-IV-A Director
Maximo B. Lim is hereby REVERSED and SET ASIDE. Samahan ng
Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent), under
Registration Certificate No. RO400-200505-UR-002, remains in the roster of
legitimate labor organizations.

SO DECIDED.[8]

Petitioner filed a Motion for Reconsideration but the BLR denied it in a

Resolution[9] dated February 2, 2007.

Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari;
but the CA denied the petition for lack of merit.

Petitioners motion for reconsideration of the CA Decision was likewise denied, hence, this
petition based on the following grounds
 Review of the Factual Findings of the Bureau of Labor Relations,
adopted and confirmed by the Honorable Court of Appeals is warranted[;]

The Honorable Court of Appeals seriously erred in ruling that the

affidavits of recantation cannot be given credence[;]

The Honorable Court of Appeals seriously erred in ruling that private

respondent union complied with the 20% membership requirement[; and]

The Honorable Court of Appeals seriously erred when it ruled that

private respondent union did not commit misrepresentation, fraud or false
statement.[10]

The petition should be denied.

The petitioner insists that respondent failed to comply with the 20% union membership
requirement for its registration as a legitimate labor organization because of the
disaffiliation from the total number of union members of 102 employees who executed
affidavits recanting their union membership.

It is, thus, imperative that we peruse the affidavits appearing to have been
executed by these affiants.

The affidavits uniformly state

Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado

bilang Rank & File sa Mariwasa Siam Ceramics, Inc., Bo. San Antonio, Sto.
Tomas, Batangas, matapos na makapanumpa ng naaayon sa batas ay malaya
at kusang loob na nagsasaad ng mga sumusunod:
 1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa
sa Mariwasa Siam Ceramics, Inc. o SMMSC-Independent sa kabila ng
aking pag-aalinlangan[;]

2. Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at

handa ako[ng] tumalikod sa anumang kasulatan na aking nalagdaan
sa kadahilanan na hindi angkop sa aking pananaw ang mga mungkahi
o adhikain ng samahan.

SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan

ngayong ika-____ ng ______, 2005 dito sa Lalawigan ng Batangas, Bayan ng
Sto. Tomas.

____________________

Nagsasalaysay

Evidently, these affidavits were written and prepared in advance, and the pro
forma affidavits were ready to be filled out with the employees names and signatures.

The first common allegation in the affidavits is a declaration that, in spite of his
hesitation, the affiant was forced and deceived into joining the respondent union. It is
worthy to note, however, that the affidavit does not mention the identity of the people
who allegedly forced and deceived the affiant into joining the union, much less the
circumstances that constituted such force and deceit. Indeed, not only was this
allegation couched in very general terms and sweeping in nature, but more importantly,
it was not supported by any evidence whatsoever.
 The second allegation ostensibly bares the affiants regret for joining respondent
union and expresses the desire to abandon or renege from whatever agreement he may
have signed regarding his membership with respondent.

Simply put, through these affidavits, it is made to appear that the affiants
recanted their support of respondents application for registration.

In appreciating affidavits of recantation such as these, our ruling in La Suerte

Cigar and Cigarette Factory v. Director of the Bureau of Labor Relations [11] is
enlightening, viz.

On the second issuewhether or not the withdrawal of 31 union members from

NATU affected the petition for certification election insofar as the 30%
requirement is concerned, We reserve the Order of the respondent Director of
the Bureau of Labor Relations, it appearing undisputably that the 31 union
members had withdrawn their support to the petition before the filing of said
petition. It would be otherwise if the withdrawal was made after the filing of
the petition for it would then be presumed that the withdrawal was not free
and voluntary. The presumption would arise that the withdrawal was procured
through duress, coercion or for valuable consideration. In other words, the
distinction must be that withdrawals made before the filing of the petition are
presumed voluntary unless there is convincing proof to the contrary, whereas
withdrawals made after the filing of the petition are deemed involuntary.

The reason for such distinction is that if the withdrawal or retraction is made
before the filing of the petition, the names of employees supporting the
petition are supposed to be held secret to the opposite party. Logically, any
such withdrawal or retraction shows voluntariness in the absence of proof to
the contrary. Moreover, it becomes apparent that such employees had not
given consent to the filing of the petition, hence the subscription requirement
has not been met.

When the withdrawal or retraction is made after the petition is filed, the
employees who are supporting the petition become known to the opposite
party since their names are attached to the petition at the time of
 filing. Therefore, it would not be unexpected that the opposite party would
use foul means for the subject employees to withdraw their support.[12]

In the instant case, the affidavits of recantation were executed after the identities of the
union members became public, i.e., after the union filed a petition for certification
election on May 23, 2005, since the names of the members were attached to the
petition. The purported withdrawal of support for the registration of the union was made
after the documents were submitted to the DOLE, Region IV-A. The logical conclusion,
therefore, following jurisprudence, is that the employees were not totally free from the
employers pressure, and so the voluntariness of the employees execution of the
affidavits becomes suspect.

It is likewise notable that the first batch of 25 pro forma affidavits shows that the affidavits
were executed by the individual affiants on different dates from May 26, 2005 until June
3, 2005, but they were all sworn before a notary public on June 8, 2005.

There was also a second set of standardized affidavits executed on different dates
from May 26, 2005 until July 6, 2005. While these 77 affidavits were notarized on
different dates, 56 of these were notarized on June 8, 2005, the very same date when
the first set of 25 was notarized.

Considering that the first set of 25 affidavits was submitted to the DOLE on June
14, 2005, it is surprising why petitioner was able to submit the second set of affidavits
only on July 12, 2005.

Accordingly, we cannot give full credence to these affidavits, which were executed under
suspicious circumstances, and which contain allegations unsupported by evidence. At
best, these affidavits are self-serving. They possess no probative value.

A retraction does not necessarily negate an earlier declaration. For this reason, retractions
are looked upon with disfavor and do not automatically exclude the original statement or
declaration based solely on the recantation. It is imperative that a determination be first
 made as to which between the original and the new statements should be given weight
or accorded belief, applying the general rules on evidence. In this case, inasmuch as
they remain bare allegations, the purported recantations should not be upheld. [13]

Nevertheless, even assuming the veracity of the affidavits of recantation, the legitimacy of
respondent as a labor organization must be affirmed. While it is true that the withdrawal
of support may be considered as a resignation from the union, the fact remains that at
the time of the unions application for registration, the affiants were members of
respondent and they comprised more than the required 20% membership for purposes
of registration as a labor union. Article 234 of the Labor Code merely requires a 20%
minimum membership during the application for union registration. It does not mandate
that a union must maintain the 20% minimum membership requirement all throughout
its existence.[14]

Respondent asserts that it had a total of 173 union members at the time it applied for
registration. Two names were repeated in respondents list and had to be deducted, but
the total would still be 171 union members. Further, out of the four names alleged to be
no longer connected with petitioner, only two names should be deleted from the list
since Diana Motilla and T.W. Amutan resigned from petitioner only on May 10, 2005 and
May 17, 2005, respectively, or after respondents registration had already been
granted. Thus, the total union membership at the time of registration was 169. Since the
total number of rank-and-file employees at that time was 528, 169 employees would be
equivalent to 32% of the total rank-and-file workers complement, still very much above
the minimum required by law.

For the purpose of de-certifying a union such as respondent, it must be shown that there
was misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto; the minutes of
ratification; or, in connection with the election of officers, the minutes of the election of
officers, the list of voters, or failure to submit these documents together with the list of
the newly elected-appointed officers and their postal addresses to the BLR.[15]
 The bare fact that two signatures appeared twice on the list of those who
participated in the organizational meeting would not, to our mind, provide a valid reason
to cancel respondents certificate of registration. The cancellation of a unions registration
doubtless has an impairing dimension on the right of labor to self-organization. For fraud
and misrepresentation to be grounds for cancellation of union registration under the
Labor Code, the nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union members.

In this case, we agree with the BLR and the CA that respondent could not have
possibly committed misrepresentation, fraud, or false statements. The alleged failure of
respondent to indicate with mathematical precision the total number of employees in the
bargaining unit is of no moment, especially as it was able to comply with the 20%
minimum membership requirement. Even if the total number of rank-and-file employees
of petitioner is 528, while respondent declared that it should only be 455, it still cannot
be denied that the latter would have more than complied with the registration
requirement.

WHEREFORE, the petition is DENIED. The assailed December 20, 2007 Decision
and the June 6, 2008 Resolution of the Court of Appeals are AFFIRMED. Costs against
petitioner.

SO ORDERED.

4. Standard v secretary gr. 11497, june 16, 2004

STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE), petitioner, vs. The

Honorable MA. NIEVES R. CONFESOR, in her capacity as SECRETARY OF
LABOR AND EMPLOYMENT; and the STANDARD CHARTERED
BANK, respondents.

DECISION
CALLEJO, SR., J.:
 This is a petition for certiorari under Rule 65 of the Rules of Court filed by the Standard
Chartered Bank Employees Union, seeking the nullification of the October 29, 1993
Order[1] of then Secretary of Labor and Employment Nieves R. Confesor and her resolutions
dated December 16, 1993 and February 10, 1994.

The Antecedents

Standard Chartered Bank (the Bank, for brevity) 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, for brevity).
In August of 1990, the Bank and the Union signed a five-year collective bargaining
agreement (CBA) with a provision to renegotiate the terms thereof on the third year. Prior
to the expiration of the three-year period[2] but within the sixty-day freedom period,
the Union initiated the negotiations. On February 18, 1993, the Union, through its President,
Eddie L. Divinagracia, sent a letter[3] containing its proposals[4] covering political
provisions[5] and thirty-four (34) economic provisions.[6] Included therein was a list of the
names of the members of the Unions negotiating panel.[7]
In a Letter dated February 24, 1993, the Bank, through its Country Manager Peter H.
Harris, took note of the Unions proposals. The Bank attached its counter-proposal to the
non-economic provisions proposed by the Union.[8] The Bank posited that it would be in a
better position to present its counter-proposals on the economic items after the Union had
presented its justifications for the economic proposals.[9] The Bank, likewise, listed the
members of its negotiating panel.[10] The parties agreed to set meetings to settle their
differences on the proposed CBA.
Before the commencement of the negotiation, the Union, through Divinagracia,
suggested to the Banks 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.[11] 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 Unions negotiating panel.[12]However, Umali
was retained as a member thereof.
On March 12, 1993, the parties met and set the ground rules for the
negotiation. Diokno suggested that the negotiation be kept a family affair. The proposed
non-economic provisions of the CBA were discussed first.[13] Even during the final reading of
the non-economic provisions on May 4, 1993, there were still provisions on which
the Union and the Bank could not agree. Temporarily, the notation DEFERRED was placed
therein. Towards the end of the meeting, the Union manifested that the same should be
changed to DEADLOCKED to indicate that such items remained unresolved. Both parties
agreed to place the notation DEFERRED/DEADLOCKED.[14]
On May 18, 1993, the negotiation for economic provisions commenced. A presentation
of the basis of the Unions economic proposals was made. The next meeting, the Bank made
a similar presentation. Towards the end of the Banks presentation, Umali requested the
Bank to validate the Unions guestimates, especially the figures for the rank and file
staff.[15] In the succeeding meetings, Umali chided the Bank for the insufficiency of its
counter-proposal on the provisions on salary increase, group hospitalization, death
assistance and dental benefits. He reminded the Bank, how the Union got what it wanted in
1987, and stated that if need be, the Union would go through the same route to get what it
wanted.[16]
 Upon the Banks insistence, the parties agreed to tackle the economic package item by
item. Upon the Unions suggestion, the Bank indicated which provisions it would accept,
reject, retain and agree to discuss.[17] The Bank suggested that the Unionprioritize its
economic proposals, considering that many of such economic provisions remained
unresolved. The Union, however, demanded that the Bank make a revised itemized
proposal.
In the succeeding meetings, the Union made the following proposals:

Wage Increase:
1st Year Reduced from 45% to 40%
2nd Year - Retain at 20%
Total = 60%

Group Hospitalization Insurance:

Maximum disability benefit reduced from P75,000.00 to P60,000.00 per illness annually

Death Assistance:
For the employee -- Reduced from P50,000.00 to P45,000.00
For Immediate Family Member -- Reduced from P30,000.00 to P25,000.00

Dental and all others -- No change from the original demand.[18]

In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank
would not make the necessary revisions on its counter-proposal, it would be best to seek a
third party assistance.[19] After the break, the Bank presented its revised counter-
proposal[20] as follows:

Wage Increase : 1st Year from P1,000 to P1,050.00

2nd Year P800.00 no change

Group Hospitalization Insurance

From: P35,000.00 per illness
To : P35,000.00 per illness per year

Death Assistance For employee

From: P20,000.00
To : P25,000.00

Dental Retainer Original offer remains the same[21]

The Union, for its part, made the following counter-proposal:

Wage Increase: 1st Year - 40%

2nd Year - 19.5%

Group Hospitalization Insurance

From: P60,000.00 per year
To : P50,000.00 per year

Dental:
 Temporary Filling/ P150.00
Tooth Extraction
Permanent Filling 200.00
Prophylaxis 250.00
Root Canal From P2,000 per tooth
To: 1,800.00 per tooth

Death Assistance:
For Employees: From P45,000.00 to P40,000.00
For Immediate Family Member: From P25,000.00 to P20,000.00.[22]

The Unions original proposals, aside from the above-quoted, remained the same.
Another set of counter-offer followed:

Management Union
Wage Increase
1st Year P1,050.00 40%
2 Year - 850.00 19.0%[23]
nd

Diokno stated that, in order for the Bank to make a better offer, the Union should
clearly identify what it wanted to be included in the total economic package. Umali replied
that it was impossible to do so because the Banks counter-proposal was unacceptable. He
furthered asserted that it would have been easier to bargain if the atmosphere was the
same as before, where both panels trusted each other. Diokno requested the Union panel to
refrain from involving personalities and to instead focus on the negotiations. [24] He
suggested that in order to break the impasse, the Union should prioritize the items it
wanted to iron out.Divinagracia stated that the Bank should make the first move and make
a list of items it wanted to be included in the economic package. 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[25] and filed a Notice of
Strike before the National Conciliation and Mediation Board (NCMB) on June 21, 1993,
docketed as NCMB-NCR-NS-06-380-93.[26]
On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and
Damages before the Arbitration Branch of the National Labor Relations Commission (NLRC)
in Manila, docketed as NLRC Case No. 00-06-04191-93 against the Union on June 28,
1993. The Bank alleged 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.[27] Further, the Union violated its no strike- no lockout clause by
filing a notice of strike before the NCMB. Considering that the filing of notice of strike was
an illegal act, the Union officers should be dismissed. Finally, the Bank alleged that as a
consequence of the illegal act, the Bank suffered nominal and actual damages and was
forced to litigate and hire the services of the lawyer.[28]
On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R. Confesor,
pursuant to Article 263(g) of the Labor Code, issued an Order assuming jurisdiction over the
labor dispute at the Bank. The complaint for ULP filed by the Bank before the NLRC was
consolidated with the complaint over which the SOLE assumed jurisdiction. After the parties
submitted their respective position papers, the SOLE issued an Order on October 29, 1993,
the dispositive portion of which is herein quoted:
WHEREFORE, the Standard Chartered Bank and the Standard Chartered Bank Employees
Union NUBE are hereby ordered to execute a collective bargaining agreement incorporating
the dispositions contained herein. The CBA shall be retroactive to 01 April 1993 and shall
remain effective for two years thereafter, or until such time as a new CBA has superseded
it. All provisions in the expired CBA not expressly modified or not passed upon herein are
deemed retained while all new provisions which are being demanded by either party are
deemed denied, but without prejudice to such agreements as the parties may have arrived
at in the meantime.

The Banks charge for unfair labor practice which it originally filed with the NLRC as NLRC-
NCR Case No. 00-06-04191-93 but which is deemed consolidated herein, is dismissed for
lack of merit. On the other hand, the Unions charge for unfair labor practice is similarly
dismissed.

Let a copy of this order be furnished the Labor Arbiter in whose sala NLRC-NCR Case No.
00-06-04191-93 is pending for his guidance and appropriate action.[29]

The SOLE gave the following economic awards:

1. Wage Increase:
a) To be incorporated to present salary rates:
Fourth year : 7% of basic monthly salary
Fifth year : 5% of basic monthly salary based on the 4th year adjusted
salary

b) Additional fixed amount:

Fourth year : P600.00 per month
Fifth year : P400.00 per month

2. Group Insurance
a) Hospitalization : P45,000.00
b) Life : P130,000.00
c) Accident : P130,000.00

3. Medicine Allowance
Fourth year : P5,500.00
Fifth year : P6,000.00

4. Dental Benefits
Provision of dental retainer as proposed by the Bank, but without
diminishing existing benefits

5. Optical Allowance
Fourth year: P2,000.00
Fifth year : P2,500.00

6. Death Assistance
a) Employee : P30,000.00
b) Immediate Family Member : P5,000.00

7. Emergency Leave Five (5) days for each contingency

8. Loans
a) Car Loan : P200,000.00
b) Housing Loan : It cannot be denied that the costs attendant to having ones
own home have tremendously gone up. The need, therefore, to improve
on this benefit cannot be overemphasized. Thus, the management is
urged to increase the existing and allowable housing loan that the Bank
extends to its employees to an amount that will give meaning and
substance to this CBA benefit.[30]
The SOLE dismissed the charges of ULP of both the Union and the Bank, explaining that
both parties failed to substantiate their claims. Citing National Labor Union v. Insular-
Yebana Tobacco Corporation,[31] the SOLE stated that ULP charges would prosper only if
shown to have directly prejudiced the public interest.
Dissatisfied, the Union filed a motion for reconsideration with clarification, while the
Bank filed a motion for reconsideration. On December 16, 1993, the SOLE issued a
Resolution denying the motions. The Union filed a second motion for reconsideration, which
was, likewise, denied on February 10, 1994.
On March 22, 1994, the Bank and the Union signed the CBA.[32] Immediately thereafter,
the wage increase was effected and the signing bonuses based on the increased wage were
distributed to the employees covered by the CBA.

The Present Petition

On April 28, 1994, the Union filed this petition for certiorari under Rule 65 of the Rules
of Procedure alleging as follows:
A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING
THE UNIONS CHARGE OF UNFAIR LABOR PRACTICE IN VIEW OF THE CLEAR
EVIDENCE OF RECORD AND ADMISSIONS PROVING THE UNFAIR LABOR
PRACTICES CHARGED.[33]
B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON
OTHER UNFAIR LABOR PRACTICES CHARGED.[34]
C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THE
CHARGES OF UNFAIR LABOR PRACTICES ON THE GROUND THAT NO PROOF OF
INJURY TO THE PUBLIC INTEREST WAS PRESENTED.[35]
The Union alleges that the SOLE acted with grave abuse of discretion amounting to lack
or excess of jurisdiction when it found that the Bank did not commit unfair labor practice
when it interfered with the Unions choice of negotiator. It argued that, Dioknos suggestion
that the negotiation be limited as a family affair was tantamount to suggesting that
Federation President Jose Umali, Jr. be excluded from the Unions negotiating panel. It
further argued that contrary to the ruling of the public respondent, damage or injury to the
public interest need not be present in order for unfair labor practice to prosper.
The Union, likewise, pointed out that the public respondent failed to rule on the ULP
charges arising from the Banks surface bargaining. The Union contended that the Bank
merely went through the motions of collective bargaining without the intent to reach an
agreement, and made bad faith proposals when it announced that the parties should begin
from a clean slate. It argued that the Bank opened the political provisions up for grabs,
which had the effect of diminishing or obliterating the gains that the Union had made.
The Union also accused the Bank of refusing to disclose material and necessary data,
even after a request was made by the Union to validate its guestimates.
In its Comment, the Bank prayed that the petition be dismissed as the Union was
estopped, considering that it signed the Collective Bargaining Agreement (CBA) on April 22,
1994. It asserted that contrary to the Unions allegations, it was the Union that committed
ULP when negotiator Jose Umali, Jr. hurled invectives at the Banks head negotiator, Cielito
Diokno, and demanded that she be excluded from the Banks negotiating team. Moreover,
the Union engaged in blue-sky bargaining and isolated the no strike-no lockout clause of the
existing CBA.
The Office of the Solicitor General, in representation of the public respondent, prayed
that the petition be dismissed. It asserted that the Union failed to prove its ULP charges and
that the public respondent did not commit any grave abuse of discretion in issuing the
assailed order and resolutions.

The Issues

The issues presented for resolution are the following: (a) whether or not the Union was
able to substantiate its claim of unfair labor practice against the Bank arising from the
latters alleged interference with its choice of negotiator; surface bargaining; making bad
faith non-economic proposals; and refusal to furnish the Union with copies of the relevant
data; (b) whether or not the public respondent acted with grave abuse of discretion
amounting to lack or excess of jurisdiction when she issued the assailed order and
resolutions; and, (c) whether or not the petitioner is estopped from filing the instant action.

The Courts Ruling

The petition is bereft of merit.

Interference under Article
248 (a) of the Labor Code
The petitioner asserts that the private respondent committed ULP, i.e., interference in
the selection of the Unions negotiating panel, when Cielito Diokno, the Banks Human
Resource Manager, suggested to the Unions President Eddie L. Divinagracia that Jose P.
Umali, Jr., President of the NUBE, be excluded from the Unions negotiating panel. In
support of its claim, Divinagracia executed an affidavit, stating that prior to the
commencement of the negotiation, Diokno approached him and suggested the exclusion of
Umali from the Unions negotiating panel, and that during the first meeting, Diokno stated
that the negotiation be kept a family affair.
Citing the cases of U.S. Postal Service[36] and Harley Davidson Motor Co., Inc.,
AMF,[37] the Union claims that interference in the choice of the Unions bargaining panel is
tantamount to ULP.
 In the aforecited cases, the alleged ULP was based on the employers violation of
Section 8(a)(1) and (5) of the National Labor Relations Act (NLRA), [38] which pertain to the
interference, restraint or coercion of the employer in the employees exercise of their rights
to self-organization and to bargain collectively through representatives of their own
choosing; and the refusal of the employer to bargain collectively with the employees
representatives. In both cases, the National Labor Relations Board held that upon the
employers refusal to engage in negotiations with the Union for collective-bargaining contract
when the Union includes a person who is not an employee, or one who is a member or an
official of other labor organizations, such employer is engaged in unfair labor practice under
Section 8(a)(1) and (5) of the NLRA.
The Union further cited the case of Insular Life Assurance Co., Ltd. Employees
Association NATU vs. Insular Life Assurance Co., Ltd.,[39] wherein this Court said that the
test of whether an employer has interfered with and coerced employees in the exercise of
their right to self-organization within the meaning of subsection (a)(1) is whether the
employer has engaged in conduct which it may reasonably be said, tends to interfere with
the free exercise of employees rights under Section 3 of the Act.[40] Further, it is not
necessary that there be direct evidence that any employee was in fact intimidated or
coerced by statements of threats of the employer if there is a reasonable inference that
anti-union conduct of the employer does have an adverse effect on self-organization and
collective bargaining.[41]
Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF
ASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the Philippines is a
signatory, workers and employers, without distinction whatsoever, shall have the right to
establish and, subject only to the rules of the organization concerned, to job organizations
of their own choosing without previous authorization.[42] Workers and employers
organizations shall have the right to draw up their constitutions and rules, to elect their
representatives in full freedom to organize their administration and activities and to
formulate their programs.[43]Article 2 of ILO Convention No. 98 pertaining to the Right to
Organize and Collective Bargaining, provides:

Article 2

1. Workers and employers organizations shall enjoy adequate protection against

any acts or interference by each other or each others agents or members in their
establishment, functioning or administration.
2. In particular, acts which are designed to promote the establishment of workers
organizations under the domination of employers or employers organizations or
to support workers organizations by financial or other means, with the object of
placing such organizations under the control of employers or employers
organizations within the meaning of this Article.
The aforcited ILO Conventions are incorporated in our Labor Code, particularly in Article
243 thereof, which provides:

ART. 243. COVERAGE AND EMPLOYEES RIGHT TO SELF-ORGANIZATION. All persons

employed in commercial, industrial and agricultural enterprises and in religious, charitable,
medical or educational institutions whether operating for profit or not, shall have the right to
self-organization and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection.
and Articles 248 and 249 respecting ULP of employers and labor organizations.
The said ILO Conventions were ratified on December 29, 1953. However, even as early
as the 1935 Constitution,[44] the State had already expressly bestowed protection to labor
as part of the general provisions. The 1973 Constitution,[45] on the other hand, declared it
as a policy of the state to afford protection to labor, specifying that the workers rights to
self-organization, collective bargaining, security of tenure, and just and humane conditions
of work would be assured. For its part, the 1987 Constitution, aside from making it a policy
to protect the rights of workers and promote their welfare,[46] devotes an entire section,
emphasizing its mandate to afford protection to labor, and highlights the principle of shared
responsibility between workers and employers to promote industrial peace. [47]
Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer
interferes, restrains or coerces employees in the exercise of their right to self-organization
or the right to form association. The right to self-organization necessarily includes the right
to collective bargaining.
Parenthetically, if an employer interferes in the selection of its negotiators or coerces
the Union to exclude from its panel of negotiators a representative of the Union, and if it
can be inferred that the employer adopted the said act to yield adverse effects on the free
exercise to right to self-organization or on the right to collective bargaining of the
employees, ULP under Article 248(a) in connection with Article 243 of the Labor Code is
committed.
In order to show that the employer committed ULP under the Labor Code, substantial
evidence is required to support the claim. Substantial evidence has been defined as such
relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.[48] In the case at bar, the Union bases its claim of interference on the alleged
suggestions of Diokno to exclude Umali from the Unions negotiating panel.
The circumstances that occurred during the negotiation do not show that the suggestion
made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that
the Bank consciously adopted such act to yield adverse effects on the free exercise of the
right to self-organization and collective bargaining of the employees, especially considering
that such was undertaken previous to the commencement of the negotiation and
simultaneously with Divinagracias suggestion that the bank lawyers be excluded from its
negotiating panel.
The records show that after the initiation of the collective bargaining process, with the
inclusion of Umali in the Unions negotiating panel, the negotiations pushed through. The
complaint was made only on August 16, 1993 after a deadlock was declared by
the Union on June 15, 1993.
It is clear that such ULP charge was merely an afterthought. The accusation occurred
after the arguments and differences over the economic provisions became heated and the
parties had become frustrated. It happened after the parties started to involve personalities.
As the public respondent noted, passions may rise, and as a result, suggestions given under
less adversarial situations may be colored with unintended meanings. [49] Such is what
appears to have happened in this case.
The Duty to Bargain
Collectively
If at all, the suggestion made by Diokno to Divinagracia should be construed as part of
the normal relations and innocent communications, which are all part of the friendly
relations between the Union and Bank.
 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 Banks counter-proposals. It explained that of the 34 economic provisions it
made, the Bank only made 6 economic counterproposals. Further, as borne by the minutes
of the meetings, the Bank, after indicating the economic provisions it had rejected,
accepted, retained or were open for discussion, refused to make a list of items it agreed to
include in the economic package.
Surface bargaining is defined as going through the motions of negotiating without any
legal intent to reach an agreement.[50]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 partys conduct both at and away from the bargaining table. [51] It involves
the question of whether an employers conduct demonstrates an unwillingness to bargain in
good faith or is merely hard bargaining.[52]
The minutes of meetings from March 12, 1993 to June 15, 1993 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 on February 17, 1993, the latter replied with a
list of its counter-proposals on February 24, 1993. 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.[53] Hence, the parties failure to agree did not amount to ULP under Article
248(g) for violation of the duty to bargain.

We can hardly dispute this finding, for it finds support in the evidence. 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 on April 29, 1960[54]

In view of the finding of lack of ULP based on Article 248(g), the accusation that the
Bank made bad faith provisions has no leg to stand on. The records show that the Banks
counter-proposals on the non-economic provisions or political provisions did not put up for
grabs the entire work of the Union and its predecessors. As can be gleaned from the Banks
counter-proposal, there were many provisions which it proposed to be retained. The
revisions on the other provisions were made after the parties had come to an
agreement. Far from buttressing the Unions claim that the Bank made bad-faith proposals
on the non-economic provisions, all these, on the contrary, disprove such allegations.
We, likewise, find that the Union failed to substantiate its claim that the Bank refused to
furnish the information it needed.
While the refusal to furnish requested information is in itself an unfair labor practice,
and also supports the inference of surface bargaining,[55] in the case at bar, Umali, in a
meeting dated May 18, 1993, requested the Bank to validate its guestimates on the data of
the rank and file. However, Umali failed to put his request in writing as provided for in
Article 242(c) of the Labor Code:

Article 242. Rights of Legitimate Labor Organization

(c) To be furnished by the employer, upon written request, with the 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 representatives
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
negotiation;

The Union, did not, as the Labor Code requires, send a written request for the issuance
of a copy of the data about the Banks rank and file employees. Moreover, as alleged by
the Union, the fact that the Bank made use of the aforesaid guestimates, amounts to a
validation of the data it had used in its presentation.
No Grave Abuse of Discretion
On the Part of the Public Respondent
The special civil action for certiorari may be availed of when the tribunal, board, or
officer exercising judicial or quasi-judicial functions has acted without or in excess of
jurisdiction and there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law for the purpose of annulling the proceeding.[56] Grave abuse of
discretion implies such capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction, or where the power is exercised in an arbitrary or despotic manner by
reason of passion or personal hostility which must be so patent and gross as to amount to
an invasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at
all in contemplation of law. Mere abuse of discretion is not enough.[57]
While it is true that a showing of prejudice to public interest is not a requisite for ULP
charges to prosper, it cannot be said that the public respondent acted in capricious and
whimsical exercise of judgment, equivalent to lack of jurisdiction or excess thereof. Neither
was it shown that the public respondent exercised its power in an arbitrary and despotic
manner by reason of passion or personal hostility.
Estoppel not Applicable
In the Case at Bar
The respondent Bank argues that the petitioner is estopped from raising the issue of
ULP when it signed the new CBA.
Article 1431 of the Civil Code provides:

Through estoppel an admission or representation is rendered conclusive upon the person

making it, and cannot be denied or disproved as against the person relying thereon.

A person, who by his deed or conduct has induced another to act in a particular
manner, is barred from adopting an inconsistent position, attitude or course of conduct that
thereby causes loss or injury to another.[58]
In the case, however, the approval of the CBA and the release of signing bonus do not
necessarily mean that the Unionwaived its ULP claim against the Bank during the past
negotiations. After all, the conclusion of the CBA was included in the order of the SOLE,
while the signing bonus was included in the CBA itself. Moreover, the Union twice filed a
motion for reconsideration respecting its ULP charges against the Bank before the SOLE.
The Union Did Not Engage
In Blue-Sky Bargaining
We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky
bargaining or making exaggerated or unreasonable proposals.[59] 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.
In sum, we find that the public respondent did not act with grave abuse of discretion
amounting to lack or excess of jurisdiction when it issued the questioned order and
resolutions. While the approval of the CBA and the release of the signing bonus did not
estop the Union from pursuing its claims of ULP against the Bank, we find that the latter did
not engage in ULP. We, likewise, hold that the Union is not guilty of ULP.
IN LIGHT OF THE FOREGOING, the October 29, 1993 Order and December 16,
1993 and February 10, 1994 Resolutions of then Secretary of Labor Nieves R. Confesor are
AFFIRMED. The Petition is hereby DISMISSED.
SO ORDERED.

5. Union v nestle gr 158930-31, march 3, 2008

U N IO N O F FI L IP R O E MPL O Y EES - G. R. N o. 1 5 89 30 -3 1
DR U G, FOOD A ND AL L IED
I ND U STR I ES U N IO NS -
KI L US A N G M A YO U NO ( U FE - DF A -
KM U ),
Pet i ti o ne r,

- ve r su s -

NE STL PH I L IP PI N ES,
I NC O RP O R AT ED ,

Re s po nd e nt .

x---- ------ ----- ----- -------- ----- -- x

NE STL PH I L IP PI N ES,
I NC O RP O R AT ED
Pet i ti o ne r,

- ve r su s -

U N IO N O F FI L IP R O E MPL O Y EES - G. R. N o. 1 5 89 44 -4 5
DR U G, FOOD A ND AL L IED
I ND U STR I ES U N IO NS -
KI L US A N G M A YO U NO ( U FE - DF A -
KM U ),
Re s po nd e nt .

Pr e s en t :

PA N GA N IB AN , C .J .
Ch ai rp e r s on ,
YN AR ES - SA N T IA G O

AUS TR IA - M AR T IN EZ ,

CA LL E JO , SR . , an d

CH IC O - N AZA R IO , J J .

Pr o mu l gat ed:

Au gu s t 22 , 2006

x---- ------ ----- ----- -------- ----- ------ --- -------- ----- ------ --- -------- - x

DECISION
CH ICO -NA Z AR IO , J.:

Th e Ca s e

Be f o r e th e C ou rt a r e t w o (2) p eti ti on s f o r r e vi e w on c e r tio r ar i u n d e r

Ru l e 4 5 of th e Ru l e s o f Cou r t, a s a m en ded . B oth s e e k t o a n n u l an d s et a si d e

th e j oi n t: (1) D e ci si on [ 1 ] dat e d 2 7 F eb ru ar y 2003 , an d

(2) R es ol u ti on [ 2 ] d a ted 2 7 Ju n e 2 003 , o f th e C ou rt o f Ap p eal s i n CA - G. R. S P

N o. 6 9805 [ 3 ] an d N o . 715 40 . [ 4 ]

G .R . N o . 15 8930 - 31 w a s fi l ed b y Un i on o f Fi li pro E mpl o y e es D ru g, F o o d

an d Al l i ed In du s t r i e s Un i on s K i l u san g M ay o Un o ( UF E - DFA - K MU) agai n st N e stl

Ph i li ppi n es, In c o rp o rat e d ( N es tl ) s e e ki n g th e r ev e r s e o f th e C ou rt of App e al s

D eci si on i n s o fa r a s th e l att er s f ai l u re to adj u d g e N es tl gu i l ty o f u n fai r l ab or

pr acti c e i s c on ce rn e d, as w el l as th e R e s ol u ti on of 27 Ju n e 2003 d en yi n g i ts

Pa rti al M oti on f o r Re c on si de ra ti on ; G. R. N o . 15 894 4 - 45 wa s i n s ti tu te d by

N es tl a gai n st UF E - DFA - K MU si mi l arl y s e eki n g t o an n u l a n d s et a si de th e

D eci si on an d R e sol u ti on o f t h e C ou rt o f Ap pe al s d e cl ari n g 1) th e R e ti r em en t

Pl an a v al i d c ol l ecti v e ba rg ai n i n g i ssu e ; a n d 2) th e s c op e of a ssu mpti on o f

j u ri sdi cti o n power of th e S e c r eta r y of th e DO L E to be l i mi ted to the

r e s ol u ti on o f qu e sti on s an d m att e r s p e rtai n i n g m e r el y t o t h e g r ou n d ru l e s o f

th e c ol l ecti v e ba rg ai n i n g n e go ti ati on s t o b e c on du c te d b etw e en th e pa rti e s .

In a s mu ch a s th e ca s e s i n v ol v e th e s am e s et o f pa rti e s; a r os e f r o m

th e sam e s et of ci r cu m sta n c e s , i . e ., f r om s ev e r al O r d er s i ssu e d by th en

Se c r eta r y o f t h e D e pa rtm en t of L ab o r a n d Empl oy m en t ( D O L E) , H on . Pat ri ci a

A. S t o. T om a s, r e sp e cti n g h e r a s su mpti on o f j u ri sdi cti on o v e r th e l ab o r

di spu t e b e tw e en N e stl an d U F E - DFA - K MU , Al aba n g an d Cabu ya o

Di vi si on s; [ 5 ] an d l i k e wi se a ss ai l th e s am e D e ci si on an d Re s ol u ti on of th e

Co u r t o f App e al s, th e C ou rt o rd e r ed th e c on s ol i dati on o f t h e tw o p eti ti on s. [ 6 ]

 Th e Fa ct s

Fr om th e r e c o rd an d th e pl eadi n g s fi led b y th e pa rti es , w e cu l l th e

f ol l owi n g ma t eri al f act s i n th i s c as e:

On 4 Ap ri l 2001 , i n c on si d er ati on of t h e i mpe n di n g e xpi r ati on o f th e

e xi sti n g c ol l ecti v e b ar gai n i n g ag r e e me n t ( CB A) b etw e e n N e stl an d UF E- DFA -

K MU [ 7 ] on 5 Ju n e 2 001 , [ 8 ] i n a l et t er d en omi n at ed as a L e tte r o f In t en t , th e

Pr e si d en t s of th e A l aban g an d Ca bu y a o Di vi si on s o f U F E - D FA - K M U, E rn est o

Pa sc o an d Di o sda d o F o rtu n a , r e sp e cti v e l y, i n f o rm ed N es tl o f th ei r i n ten t t o

op en ou r n ew C ol l e cti v e B a rgai n i n g N eg oti ati on f o r t h e y ea r 200 1 - 2 004

x x x a s ea rl y a s Ju n e 20 01 . [ 9 ]

In a l ett e r [ 1 0 ] da t ed 10 A pri l 20 01 , N e s tl ac kn owl edg ed r e c ei pt o f th e

af o r em en ti on ed l e tt e r . It al s o i n f o r m ed UF E - DFA - K MU th a t i t wa s p r ep a ri n g

i ts own c ou n t e r - p r o po sal a n d pr o p os e d g r ou n d ru l es th at sh al l go v e rn th e

c on du ct of th e c ol l e cti v e ba rg ai n i n g n eg oti ati on s.

On 29 M ay 2 001 , i n an ot h e r l et t er a ddr e s s ed t o th e U FE - DF A - K M U

( Cabu ya o Di vi si on ), N e stl u n d e r sc o r ed i ts p o si ti on th at u n ilat e ra l g ra n ts ,

on e- t im e co mp an y g ran ts , c omp an y - in i tiat ed p ol ic i es a n d p r og ra m s, wh i ch

in clu d e, bu t a r e n ot li mit ed t o th e R et ir em en t Pl an , I n c id en tal St ra igh t Du t y

Pa y an d Call in g Pa y P r emi u m , a r e by th ei r v e ry n at u r e n ot pr op e r su bj ec ts of

CBA n eg ot iati on s a n d t h er e f o r e sh all be e x clu d ed th e r e f r om . [ 1 1 ] In addi ti on ,

i t cl a ri fi ed th a t wi th th e cl o su r e of th e Al aban g Pl an t, th e C BA n eg o ti ati on s

wi ll on l y b e a ppl i cabl e t o th e c ov e r e d empl oy e e s of th e C abu ya o Pl an t;

h en c e , th e Cabu ya o Di vi si on of UF E - D FA - K M U b ec am e th e s ol e ba rgai n i n g

u n i t i n vol v ed i n th e su bj e ct C BA n eg oti a ti on s .
 Th ereaft e r, di al ogu e between th e compan y an d th e u n i on en su ed.

In a l ett e r d at ed 1 4 Au gu st 20 01 , N e s tl , cl ai mi n g t o h av e r ea ch ed an

i mpas s e in s ai d di al ogu e , re qu e st e d [ 1 2 ] t h e Nati on al C on ci l i ati on an d

M edi ati on B oa rd ( N CM B), R e gi on al O ff i ce N o . IV , Imu s , C avi te , t o c on du c t

pr e v en ti v e m e di ati on p r o c e edi n gs b e tw e en it an d UF E - DFA - K MU . N e stl

al l eged th at d e spi te fi ft e en ( 15) m e eti n gs b et w e en th em , th e pa rti es fai l ed

to r ea ch an y ag r e e men t on t h e p r op o s ed CBA . Th e r equ e st w a s d o ck et e d

as N C MB - R BI V - C AB- PM- 08- 0 35 - 01 .

Co n ci l i ati on pr o c e ed i n gs n ev e rth el es s p r ov e d i n e f f ecti v e . C om pl ai n i n g,

in es s en c e, of ba rg ai n i n g deadl oc k pe rt ai n i n g to e c on omi c i s su e s , i . e .,

r eti r e m en t ( pl an ), pan el c omp o si ti on , c o st s and att en da n c e , an d

CBA , [ 1 3 ] U F E- D FA - K MU fi l ed a N o ti c e o f St rik e [ 1 4 ] on 31 O ct ob e r 20 01 wi th

th e NC MB d o ck et e d a s N CM B - R BIV - LA G - NS- 10- 0 37 - 01 . On e w e e k l at e r , o r

on 07 N o v emb e r 2 0 01, an oth e r N oti c e o f St rik e [ 1 5 ] wa s fi l ed by th e UF E- DFA -

K MU d o ck et e d a s N CM B - RB IV - LA G- NS - 11- 10 - 03 9 - 01 , th i s ti me p r edi cat e d on

N es tl s al l eg ed u n f ai r l ab o r p r a cti c es i . e ., ba rg ai n i n g i n bad f ai th i n th at i t

wa s se tti n g p r e - co n di ti on s i n th e g ro u n d ru l es by r e fu si n g to i n cl u de th e

i ssu e of th e R eti r e men t Pl an i n th e CB A n e go ti ati on s . A st ri k e v ot e wa s th en

c on du ct ed by UF E - DFA - K MU on 22 N o v emb e r 20 01 . Th e r e su l t wa s an

o v er wh el mi n g ap p r o val of th e d e ci si on t o h ol d a s tri k e . [ 1 6 ]

On 26 N ov e mb e r 20 01, i n vi ew o f th e l o omi n g st ri k e , N e st l fi l ed wi th

th e D O L E a P e titi on f o r A ss u mpt i on o f Ju ri sdi cti on , [ 1 7 ] d o ck e t ed a s OS - AJ-

0023- 01 , fu n da m en tal l y pr ayi n g th at th e S e c r eta r y of th e DOLE, H on .

Pat ri ci a A. St o . T o m as , a ssu m e j u ri s di ct i on ov e r th e cu rr en t l abo r di spu t e as

man da t ed by A rti cl e 2 63 (g ) of th e Lab o r C od e , as am en d ed , th e r eb y

e ff e cti v el y en j oi n i n g an y i mp en di n g st ri k e a t th e N e stl C abu ya o Pl an t i n

Lagu n a .
 On 29 No v e mb e r 20 01, S e c . St o. To ma s i s su ed an O rd e r [ 1 8 ] i n OS - AJ-

0023- 01 , N CM B - RB IV - C AV - PM - 08- 035- 01, NC MB - RB IV - LA G - NS - 10- 0 37 - 01 &

NC MB - RB IV - LA G- NS - 11- 1 0- 03 9 - 0 1 a ss u mi n g j u ri sdi cti on ov e r th e su bj e ct

l abo r di spu t e b et w e en th e pa rti e s , th e f all o th er e o f s tati n g th at:

CO NS ID E R IN G TH E F O R E GO IN G , th i s O ffi c e
h e r eb y a ssu m e s j u ri sdi cti on ov e r th e l abo r di spu t e a t
th e N e stl Ph i l i ppi n es, In c . ( Ca bu y a o Pl an t) pu rsu an t
to A rti cl e 2 63 (g) of th e L ab o r C od e , as am en d ed .

Ac c o rdi n gl y, an y s tri k e or l o c k ou t i s h e r eb y
en j oi n e d. Th e pa rt i es a r e di r e ct ed t o c ea s e an d
de si st f r o m c om mi tti n g an y a ct th at mi gh t l e ad t o th e
fu rth e r d et e ri o ra ti o n o f th e cu r r en t l ab or r el ati on s
si tu ati on .

Th e pa rti e s a r e fu r th e r di r e ct ed t o m e et an d
c on v en e f o r th e di s cu s si on o f th e u n i on pr o p os al s
an d c om pan y c ou n t e r - p r op o sal s b e f o r e th e Na ti on al
Co n ci l i ati on an d M edi ati on B oa r d ( N CM B) wh o i s
h e r eb y d e si gn at ed as th e d el eg at e/ fa c il i tator o f th i s
O ffi c e fo r th i s pu rp o s e. Th e N CM B sh al l r ep o rt t o th i s
O ffi c e th e r e su l ts o f th i s a tt emp t at c o n ci li ati on an d
del i mi tati on of th e i ss u es wi th i n th i rty (30 ) da ys
f ro m t h e p ar ti e s r e c ei pt of th i s O rd e r , i n n o ca s e
l ate r th an D e ce mb e r 3 1, 20 01 . If n o s e ttl em en t o f al l
th e i s su e s i s r ea c h ed , th i s O ffi c e s h al l th e r ea ft e r
de fi n e th e ou tst an d i n g i ssu e s a n d o rd e r th e fi li n g o f
po si ti on p ap e r s f o r a ru l i n g on th e m e ri ts .

UF E- D FA - K MU s ou g h t r e c on si de ra ti on [ 1 9 ] of

th e a bo v equ ot e d As su mp ti on o f Ju ri sdi c ti on O rd e r on th e a s s e rti on th at :

i. A rti cl e 2 63 ( g) o f th e Lab o r C od e , as a m en d ed , i s
i n val i d an d u n c on st i tu ti on al a s i t i s i n d e r og ati on o f th e
pr o vi si on s d eal i n g o n p r ot e cti on t o l abo r , s o ci al j u sti c e , th e
bi l l of ri gh ts , a n d, ge n er al l y ac c ept e d p ri n ci pl e o f
i n tern ati on al l aw;

ii . c o mpu l s o r y a rbi t rati on as a mode of di spu t e

s ettl e m en t p r o vi de d f o r i n t h e L ab o r C od e an d s ou r c ed
f ro m th e 193 5 an d 1973 c on s ti tu ti on s h as b e en di s ca rd e d
 an d del eted by th e New Ch arter wh i ch i n sti tu ted i n i ts
st ea d f r e e c ol l ecti v e ba rg ai n i n g;

ii i . th at IL O c on d emn s th e c o n ti n u ou s e x er ci s e by th e
Se c r eta r y of Lab o r o f t h e p o w e r o f c o mp u l so ry ar bi tra ti on ;

i v. g ran ti n g th at th e l aw i s val i d, th e S ec r e ta r y h as
u n c on sti tu ti on al l y a ppl i ed th e l aw;

v. th at th e c om pan y i s a bu si n e s s en t e r pri s e n ot
bel on gi n g to an i n du st r y i n di sp en sa bl e t o th e n ati on al
i n ter e st c on si d eri n g th at i t i s on l y on e am on g a n u mb e r o f
c omp an i e s i n th e c ou n t r y p r odu ci n g mi l k an d n u t ri ti on a l
pr odu ct s; th at th e Cabu ya o pl an t i s on l y on e o f th e si x (6 )
N es tl e pl an ts i n th e c ou n t ry an d c ou l d r el y on i ts h i gh l y
au t oma te d Ca ga yan de O r o pl an t f or bu f f e r st o ck s;

vi . th at th e S e c r eta r y a ct ed wi th g ra v e abu s e o f
di sc r eti on i n i s su i n g th e a s sai l ed o rd e r wi th ou t th e b en e fi t
o f a p ri o r n oti c e an d i n qu i ry .

In th e in t e r r eg n u m , th e u n i on i n te r p o s ed a m oti on f o r e xt en si on o f

ti me [ 2 0 ] t o fi l e i ts p o si ti on pap e r as di r e ct e d by t h e A ss u mpti on of

Ju ri sdi c ti on O rd e r o f 29 No v e mb e r 200 1.

In an O rd e r [ 2 1 ] da t ed 1 4 Jan u a ry 2 002 , S e c. S to . T o ma s d en i ed

th e a f o r equ ot ed m ot i on f o r r e co n si d e rati on i n th i s wi s e:

Th i s i s n ot th e fi r s t ti me th at th i s O ff i ce h ad o c ca si on t o
r e s ol ve th e gr ou n ds an d a rgu m en ts n o w b ei n g rai s ed x x x. In a
mo r e r ec en t ca s e In r e : l ab o r di spu t e at T o y ota M o to r Ph i li ppi n es
Co r p or ati on x x xth i s O f fi c e ru l e d:

Th e co n sti tu ti on al ity of th e p ow e r o f th e
Se c r eta r y o f L ab o r u n de r A rti cl e 26 3 ( g ) of th e La b o r
Co d e t o a s su m e j u r i sdi cti on o v e r a l ab o r di spu t e i n
an i n du st ry i n di sp en sabl e t o th e n ati on a l i n ter e st h as
be en u ph el d as an e x e rci s e o f p ol i ce p o w e r of th e
c on s ti tu ti on . x x x .

x x x x

As ru l ed b y t h e S u p r em e C ou rt i n th e P h il tr ead ca s e:
 Arti cl e 263 (g) of th e Labor Code does
n ot vi ol at e t h e w o rk e r s c on s ti tu ti on al
ri gh t t o st ri k e.

x x x x x x

Th e f o r eg oi n g a rti cl e cl ea rl y d o es n ot
i n ter f e r e wi th th e w o rk e r s ri gh t t o st ri k e
bu t m e r el y r e gu l ate s i t, wh en i n t h e
e x e rci s e of su ch ri gh t, n ati on al i n ter e s ts
wi l l be a ff e ct ed .

On 15 Jan u a ry 2002 , d es pi te the i n j u n cti on [ 2 2 ] c on t ai n ed in

Se c . St o. T oma s As su mp ti on of Ju ri sdi c ti on O r d er an d c on c il i ati on e f f or ts by

th e NC MB , th e empl oy e e m e mb e rs of UF E - DFA - K MU at th e

N es tl Ca bu y a o Pl an t w en t on s tri k e .

On 16 Jan u a ry 20 0 2, i n c on si d e rati o n o f th e ab o v e , S e c . St o. T oma s

i ssu ed y et a n o th e r O rd e r [ 2 3 ] di r ecti n g: (1) t h e m emb e r s o f UF E - DFA - K MU t o

r etu rn - t o - w o rk wi th i n tw en t y - f ou r (2 4) h ou r s fr o m r e c ei pt o f su ch O rd e r; ( 2)

N es tl t o a c c ept b a ck al l re tu rn i n g w o rk e r s under th e sa m e t e rm s an d

c on di ti on s e xi sti n g pr e c edi n g t o th e st ri k e; (3 ) b oth pa rt i es t o c e a s e an d

de si st f r o m c om mi tti n g ac ts i n i mi cal to th e on - g oi n g c on ci l iati on p ro c e edi n g s

l eadi n g t o th e fu rth e r d et e ri o ra ti on of th e si tu ati on ; an d ( 4) t h e su b mi ss i on

o f th e i r r e sp e cti v e p o siti on p ap e rs wi th in t en (10 ) d ay s fr o m r e c ei pt th e r e o f.

N otwi th stan di n g th e R etu rn - T o- W o rk O r de r , th e m emb e r s o f UF E - DFA -

K MU c on ti n u ed wi t h th ei r s t ri ke and r efu s ed to go b ac k to w o rk as

i n stru ct ed . Th u s , S e c. St o . T o ma s s ou gh t th e a s si sta n c e of th e Ph i l i ppi n e

Nati on al P ol i ce ( PN P ) f o r th e en f o r c em e n t of sai d o rd e r .

At th e h ea ri n g cal l e d on 7 F eb ru a ry 200 2, N estl an d U F E - D F A - K MU fi l ed

th ei r r e sp e cti v e p o si ti on p ap e rs . In i ts p osi ti on pap e r , [ 2 4 ] N e stl a dd r es s ed

s ev e r al i ssu e s al l eg edl y p e rt ai n i n g to th e cu r r en t l abo r di spu t e , i. e . ,

e c on omi c pr o vi si on s o f th e C BA as w el l as th e n on - i n cl u si o n o f th e i ssu e of
th e Reti remen t Pl an i n th e col l ecti ve bargai n i n g n egoti ati on s. UFE - DFA - K MU,

i n c on t ra st , l i mi ted i tsel f t o t ac kl i n g th e s ol i tar y i s su e of wh eth e r o r n ot th e

r eti r e m en t pl an wa s a m an da t or y su bj e ct i n i ts C BA n e g oti ati on s wi th th e

c omp an y on th e c on t en ti on th a t th e O rd e r o f A s su m pt i on o f Ju ri sdi c ti on

c ov e r s on l y th e i s su e of R eti r e m en t Pl a n . [ 2 5 ]

On 8 F eb ru a r y 20 0 2, N e stl mo v ed th a t UF E - DF A - K MU b e d e cl ar ed t o

h av e w ai ve d i ts ri gh t t o p r e s en t a rg u me n ts r e sp e cti n g th e oth e r i s su e s

rai s ed b y th e c o mp an y on th e g ro u n d th at th e l att e r ch os e to l i mi t i tsel f t o

di scu s si n g on l y o n e ( 1) i s su e. S ec . Sto . T om as , i n an O rd e r [ 2 6 ] da t ed 11

Feb ru a ry 20 02 , h o w ev e r , di d n o t s e e fi t t o g ran t sai d moti on . Sh e i n st ea d

al l owed UF E - DF A- K MU the ch an c e to tender i ts s tan d on th e oth e r

i ssu e s rai s e d by N e stl bu t n ot c ov e r ed b y i ts i n i ti al posi ti on pa p er p ap e r by

wa y o f a Su pp le m en tal P o siti on P ap e r .

UF E- D FA - K MU aft e r wa rd fi l ed s e v e ral pl eadi n gs : (1) an U rg en t M oti on

to Fil e a R ep ly d a ted 1 3 F eb ru a ry 2 002; (2) a M oti on for Tim e to Fi l e

Su ppl e me n tal P os itio n Pa p er d at ed 22 F e br u a ry 2 002; an d (3)

a Man i f e stat io n with M oti on f o r R e c on si de r ati on o f th e O rd e r dat ed F e bru a ry

11, 200 2 dat ed 2 7 Fe b ru a r y 20 02 . The l att e r pl eadi n g wa s an ab s ol u te

c on t radi c ti on of th e s e co n d on e p ra yi n g f o r addi ti on al ti me to fi l e th e su bj ec t

su ppl em en t al p osi ti on pa pe r . In sai d Man i f e stat io n , UF E - DFA - K MU ex pl ai n ed

th at i t r eal i z ed th at th e O rd e r of F eb ru ar y 11 , 2 002 app ea r s t o b e c on tr a ry

to l aw an d j u ri sp ru den c e an d i s n ot i n c on f o r mi ty wi th e xi sti n g l aw s an d th e

e vi den c e on r e co r d , [ 2 7 ] a s th e S e c r et a r y o f th e D O L E c o u l d o n l y a ssu m e

j u ri sdi cti o n o v e r t h e i ssu e s m en ti on ed i n th e n o ti c e o f st ri k e su b j e ct o f t h e

cu r r en t di spu t e . [ 2 8 ] UF E- D FA - K MU th en w en t o n t o cl ari f y t h at th e Am en d e d

N oti c e o f St ri k e di d n ot ci te , as on e o f t h e g r ou n d s , th e CB A d e adl o ck .

On 8 M a rc h 200 2, S e c . St o. To ma s d en i ed th e moti on for

r e c on si d e rati on o f U FE - DF A - K M U.
 Fru strated wi th th e foregoi n g tu rn of even ts, UFE - DFA - K MU fi l ed a

peti ti on f o r c e rti o ra ri [ 2 9 ] wi th appl i cati o n f o r th e i s su an c e o f a t emp o r ar y

r e st rai n i n g o rd e r o r a w ri t of pr el i min ar y i n j u n cti on b ef o r e th e C ou rt o f

App eal s . Th e p eti ti on wa s p r edi ca t e d o n th e qu e sti on of w h eth e r o r n ot t h e

DO L E S e cr e ta r y c o mmi tte d g ra v e abu s e o f di s c r eti on i n i ssu i n g th e O rd e r s

o f 1 1 F eb ru a r y 200 2 an d 8 Ma r ch 200 2.

M ean wh i l e, i n a n at te mpt t o fi n al l y r es ol v e th e c ri ppl i n g l ab or di spu t e

bet w e en th e pa rti e s, th en A ct i n g S e c r eta r y of th e D O L E, Ho n . A rtu r o

D. B ri on , c am e ou t wi th an Or d e r [ 3 0 ] da ted 0 2 Ap ri l 2002 , i n th e mai n , ru l i n g

th at:

a. w e h e r eb y r e c ogn i z e th a t th e p r e s en t R eti r em en t Pl an at
th e N e stl C abu ya o Pl an t i s a u n i l ate r al g ran t th at th e pa rti e s
h av e ex p re s sl y s o r e c ogn i z e d su b s equ e n t t o th e Su p r em e Co u r ts
ru l i n g i n N e stl , Ph il s. In c. vs . NL RC , G. R. N o . 9 023 1, F eb ru ar y 4 ,
1991 , an d i s th e r ef o r e n ot a man d at o ry su bj e ct f o r ba r gai n in g;

b. th e Un i on s ch ar g e o f u n f ai r l ab o r p ra cti c e ag ai n st th e
Co mpa n y i s h e r e by di smi ss e d f o r l a ck o f m e ri t;

c. th e pa rti e s a r e di re ct e d t o s e cu r e th e b es t ap pl i cabl e
te rm s of th e r ec en tl y c on cl u d ed CB s bet w e en N e stl Ph i l s. In c .
an d i t ei gh t ( 8) oth e r b a rgai n i n g u n i ts, an d t o ad opt th es e as th e
te rm s an d c on di ti on s o f th e N e stl C abu y ao Pl an t CBA;

d. al l u n i on d em a n ds th at a r e n o t c ov e r e d b y th e
pr o vi si on s of th e C BA s o f th e oth e r ei gh t (8) b a rgai n i n g u n i ts i n
th e C o m pan y a r e h e r eb y d en i ed;

e . al l e xi sti n g p r o vi si on s of th e e xpi r ed
N es tl Ca bu y a o Pl an t CB A wi th ou t an y c ou n t e rp a rt i n th e C BA s o f
th e ot h er ei gh t ba rg ai n i n g u n i ts i n t h e C omp an y a r e h e r eb y
o rd e r ed m ai n tai n ed as pa rt o f t h e n e w N es tl Ca bu y a o Pl an t C BA;

f. th e p a rti e s sh al l e x ecu t e th ei r CBA wi th i n th i rty (30)

day s f r o m r ec ei pt o f th i s O rd e r , fu rn i s h i n g th i s O ffi c e a c op y of
th e si gn ed A gr e e m e n t;

g. th i s CB A sh al l , i n s o fa r a s r ep r e s en t ati on i s c on ce rn e d,
be f o r a t e rm o f f i ve (5 ) y e a rs ; al l oth e r p r o vi si on s sh al l be
r en eg oti at ed n ot l a te r th an th r e e (3) y ea r s af t er i ts e f f e cti v e
dat e wh i ch sh al l be D ec e mb e r 5 , 20 01 ( o r on th e fi r st d ay si x
 mon th s after th e expi rati on on Ju n e 4, 2001 of th e su perceded
CBA) .

N ot su rp ri si n gl y, UF E - DF A - K M U mo v ed to r e c on s i d e r

th e a f o r equ ot ed p o s i ti on o f th e D OL E .

On 6 Ma y 2002 , th e S ec r et a ry of th e D O L E, H on . St o . T om as , i ss u e d

th e l ast o f th e a ss ai l ed O rd e r s . [ 3 1 ] Th i s o rd e r r es ol v ed t o d en y th e p r ec e di n g

moti on f o r r e c on si de rati on o f UF E - DFA - K MU .

Un dau n t e d sti l l , UFE - DFA - K MU , f o r th e s e c on d ti me , w e n t t o th e

Co u r t o f App eal s l i ke wi se vi a a p eti ti on f o r c e rt i or a ri s e e ki n g t o an n u l , on
th e g r ou n d o f g ra v e abu s e of di s c r eti on , th e O rd e r s o f 0 2 Apri l 2002 an d
06 Ma y 200 2 o f th e Se c r eta r y of th e D O L E.

Th e C ou rt o f App e al s, a cti n g on th e twi n p eti ti on s f o r c e rti o ra r i ,

det e r mi n ed th e issues in fa v or of U FE - DF A - K M U in a j oi n t D e ci si on
dat ed 27 F eb ru a ry 2 003 . Th e di sp o si ti ve pa rt th e r e o f st at es th at:

W H ER EF OR E , i n vi e w o f th e f o r eg oi n g, th e r e b ei n g g r av e
abu s e on th e p a rt o f th e p u bl i c r e sp on d en t i n i ss u i n g al l th e
as sai l ed O rd e r s , both p eti ti on s a r e h e r eb y G RA NT E D . Th e
as sai l ed O rd e r s d at ed F eb ru a r y 1 1, 2 001 , an d M ar ch 8, 2001
(CA - G .R . SP N o. 6 9805) , a s w el l as th e O rd e r s dat ed A pri l 2,
2002 a n d M ay 6 , 2 002 (C A - G .R. SP N o . 715 40) o f th e S ec r eta r y
o f La bo r an d E mpl o ym en t i n th e c as e en ti tl ed: IN R E : L AB OR
D IS PU T E AT N ES T L E P H IL IP P IN ES INC . (CA BU YA O FA CT OR Y)
u n de r OS- AJ- 0 023 - 01 (N CM B - R B IV - CA V - P M- 08 - 03 5 - 01 , N CM B -
RB IV - L A G- N S- 1 0- 03 7 - 01 , N C MB - R B IV - L AG- NS - 11- 10- 0390 1 ) ar e
h e r eb y AN N UL L E D a n d S E T AS ID E . P ri v at e r e sp on d en t i s h e r eb y
di re ct e d t o r es u m e t h e C BA n eg oti ati on s wi th th e p e ti ti on e r . [ 3 2 ]
 Di ss ati sfi ed , bo th p arti es s ep ar at el y m o v ed f o r th e r e co n s i der ati on
o f th e ab o v equ ot ed de ci si on wi th N e stl basi c al l y a s sai l i n g th at pa rt o f th e
de ci si on fi n di n g th e D O L E S e c r eta r y t o h av e g r av el y a bu s e d h e r di s c r eti on
wh en sh e ru l ed th at th e R eti r e m en t Pl a n i s n ot a v al i d i ssu e f o r c ol l ecti v e
ba rgai n i n g n eg oti at i on s; wh i l e UF E - DF A - K MU qu e sti o n s , i n es s en c e , th e
app el l ate c ou rt s d e ci si on i n a bs ol vi n g N es tl o f th e ch a rg e o f u n f ai r l ab o r
pr acti c e .

Th e pa rti e s e f f o rts w er e al l f o r n au gh t as th e C ou rt of Ap p eal s st o od

pat in i ts ea rl i e r p r on ou n c e m en t s an d d en i e d th e m oti on s for
r e c on si d e rati on i n a j oi n t R e s ol u ti on d at ed 2 7 Ju n e 2 003 .

H en c e, th e s e p eti ti on s f or r evi e w on c e rti o ra ri s epa r at el y fi l ed b y

th e pa r ti e s. Sai d p e ti ti on s w e r e o rd e r e d c on s ol i dat ed i n a Su p r em e C ou rt
Re s ol u ti on d at ed 2 9 M ar ch 2 004 .

Th e I ssu e s

UF E- D FA - K MU s p eti ti on f o r r evi ew do c k et ed a s G. R. N o . 15 8930 - 31 ,

i s p r edi ca te d on th e f ol l owi n g al l eged e r r o rs :

I.

T H E C O UR T OF A PP EA LS C O MM IT T ED A S E R IOU S ERR O R O F LA W IN
N OT H O L D IN G T HA T R E SP O ND E N T IS GU IL T Y OF UN FA IR LAB O R
PRA CT IC E IN R E FUS IN G TO P R O C E ED W IT H THE CBA
N E G OT IA T IO NS UN L ESS P E T IT IO N ER F IRS T A D M ITS T HA T T H E
RE T IR EM E N T P LA N I N T H E C O MP AN Y I S A N ON - CB A MA T T ER ; an d
 II.

T H E C O N T EN T IO N T HA T T H ER E IS N O EV ID E NC E O F UN FA IR
LAB O R PR AC T IC E O NR ES P ON D E NT N E ST L S PAR T A N D T HA T
P ET IT IO N E R D ID N OT R A IS E T H E ISSU E OF UL P IN ITS
AR GUM E N TS B EF O RE T H E C O UR T O F A PP EA LS IS GR OS SL Y
ER R ON E OU S. [ 3 3 ]

Wh e r ea s in G .R . N o. 158 944 - 45 , p eti ti on e r N e stl ch al l en ge s th e

c on cl u si on o f th e C o u rt of A pp eal s on th e ba si s of th e f ol l owi n g i s su es :

I.

W H ET H E R OR N OT T H E C OUR T O F A P P EA LS C OM M IT T ED S ER IO US
ER R OR IN H O LD IN G T HA T T H E P O W ER S GRA N T ED T O T H E
SE CR E TAR Y OF L AB OR TO R ES O L VE NA T IO NA L IN T ER ES T
D IS PU T ES U N D ER A RT IC L E 263 ( G) OF T H E LA B OR C O D E M AY B E
L IM IT ED B Y A (S E C O ND) N OT IC E OF S T R IK E; an d

II.

W H ET H E R OR N OT T H E C OUR T O F A P P EA LS C OM M IT T ED S ER IO US
ER R OR IN AN NU L IN G THE S EC RE TA RY OF
LAB O RS JU D GM E N T O N T H E R E T IR EM E NT P LA N ISS U E W H IC H
WAS M ER E L Y A PA RT OF T H E C OM P L E T E R E SO L UT IO N OF T H E
LAB O R D ISP UT E . [ 3 4 ]

On th e wh ol e, the c on s ol i dat ed c as e s on l y r ai s e three (3 )

fu n da m en tal i s su e s f or d el i be ra ti on by th i s Co u r t, th at i s, wh eth e r o r n ot
th e C ou rt o f A pp e al s c om mi tted r e v e r si bl e e r r o r, fi r st , i n fi n di n g th e
Se c r eta r y of Lab o r an d E mpl o ym en t t o h av e g ra v el y abu s e d h e r di s c r eti on
i n h er p r on ou n c e m e n t th at th e R eti r e m en t Pl an w as n ot a pr op e r su bj e ct
to b e i n cl u ded i n th e C BA n eg oti ati on s bet w e en th e pa rti e s ; h en c e, n on -
n eg oti abl e ; s ec on d , in h ol di n g th at th e a ss u mpti o n po w e rs of th e
Se c r eta r y o f L ab o r an d E mpl o ym en t s h ou l d h a v e b e en l i mi ted m e r el y t o
th e g r ou n ds al l eg e d i n th e s e c on d N oti c e of St ri ke ; an d t h ir d , i n n ot
ru l i n g th at N es tl wa s gu i l ty of u n f ai r l ab o r p r acti c e d e spi te al l eg edl y
s etti n g a p r e - c on di ti on t o b ar gai n i n g th e n on - i n cl u si on o f t h e R eti r em en t
Pl an a s an i ss u e i n t h e c ol l ec ti v e b a rgai n i n g n e go ti ati on s .

Th e C ou rt s Ru lin g

Fo r em o st f o r ou r r e s ol u ti on i s th e matt e r o f th e n on - i n cl u s i on of th e
Reti r em en t Pl an i n th e CB A n eg oti ati on s be tw e en N e stl an d UF E - D FA - K MU
( Cabu ya o Di vi si on ).

In fi n di n g th e S e cr et ar y o f th e D O L E to h a v e g ra v el y ab u s ed h e r
di sc r eti on i n h ol di n g th at th e R eti r em en t Pl an i s n ot a v al i d CBA i s su e , th e
Co u r t o f App e al s e x pl ai n ed th at:

Al th ou gh th e Un i on , th ru i ts P r e si d en t Di os dad o F o rtu n a ,
si gn e d a M em o ra n du m of Ag r e em e n t dat ed O ct ob e r 8 , 1998
tog e th er wi th th e pri va t e r e sp on d en t wh i ch cl ea rl y st at e s th at
th e C o mpa n y a gr e e t o ext en d th e f ol l owi n g u n i l ate ral g ran ts
wh i ch sh al l n o t f o r m p a rt o f th e CB A ( ci tati on o mi tte d) h o w ev e r ,
th e s am e d o cu m e n t m ad e a p r o vi s o th at r ef e r en c e o n th e
Reti r em en t Pl an i n th e C BA si gn ed o n Ju l y 4 , 1995 , sh al l be
mai n tai n ed , x x x t h u s , t h i s C ou rt i s o f th e b el i ef an d so h ol ds
th at th e R eti r e m en t Pl an i s sti l l a val i d CBA i ssu e , h en c e , i t c ou l d
n ot b e a r gu ed th at th e t ru e i n ten ti on o f th e pa rti e s i s th at th e
Reti r em en t Pl an , al th ou gh r e f e r r ed i n t h e CBA , w ou l d n ot i n an y
wa y f o rm p ar t o f th e C BA ( ci tati on o mi tted ) as i t c ou l d b e c l earl y
i n fe r r ed by th i s C ou rt th at i t i s t o b e u s ed a s an i n t eg ral p art o f
th e CBA an d t o b e u s ed a s a t opi c f o r fu t u r e ba rgai n i n g, i n
c on s on an c e wi th th e ru l i n g o f th e S u p r em e C ou rt i n th e p r e vi ou s
 Nestl Case th at th e Reti remen t Pl an was a col l ecti ve bargai n i n g
i ssu e ri gh t f r om th e s ta rt . [ 3 5 ]

In fi l i n g th e p r e s en t p eti ti on , N e stl e i s o f th e vi e w th at a ft e r th e
1991 Su p r em e C ou r t D e ci si on w a s p r o mu l gate d, th e r e w a s ob vi ou sl y an
ag r e em en t b y th e p arti es t o n o l on g e r c on si d e r th e R eti r e men t Pl an a s a
n eg oti abl e i t em s u bj e ct t o ba r gai n i n g. Rath e r , s ai d b en e fi t w ou l d b e
r eg ar d ed a s a u n i l at er al g ran t ou t si de th e ambi t o f n e goti ati on . N e stl
j u sti fi e s su ch c on t e n ti on by di r e cti n g t h e C ou rt s a tt en ti on t o th e G r ou n d
Ru l es for 199 8 Al aban g /Ca bu y a o Fa c to ri e s C BA N e g oti ati on (ci tati on
omi tt ed) si gn ed b y i t an d th e r e p r es en t ati ve s of UF E - DFA - K MU wh e r e bo th
si de s exp r e s sl y r e c o gn i z ed N es tl s p r e r o gati v e t o i n i ti ate u n il ate ral g ran t s
wh i ch are not n eg oti abl e . It l i ke wi se ci te d th e M em o r an du m of
Agr e e m en t [ 3 6 ] e n t e r e d i n to by th e p a r ti es on 0 8 O ct ob e r 199 8, wh i ch
al so cat eg o ri ca lly r e f e rr e d t o th e R e ti r e men t Pl an a s on e o f th e u n i l ate ral
gr an t s al l u ded to in th e a f o r em en t i on ed G r ou n d Ru l e s. N e stl e th en
c on cl u d ed th at:

In d e ed , th e f or e g oi n g u n c on t r o v er t e d d o cu m en t s v e r y
cl ea rl y e st abl i sh ed th e cl e a r a gr e e m en t o f th e pa rti es , aft e r th e
1991 Su pr e m e C ou rt D e ci si on , to r em o v e th e R eti r em en t Pl an
f ro m t h e sc o p e o f ba rgai n i n g n e g oti ati on , a n d l e av e th e matt e r
u pon th e sol e i n i ti ati ve an d di s c r eti on o f N e stl . [ 3 7 ]

In co n t ra st , UF E - DF A - K MU p o si ts th at t h e r e i s n oth i n g i n ei th e r of
th e d o cu m en t s ab o v ec l ai m ed th at p r o v es th at i t ag r e ed t o t r e at th e
Reti r em en t Pl an as a u n i l ate r al g ran t o f th e c omp an y wh i ch i s ou t si de th e
s co p e o f th e CB A an d h en c e , n ot a pr op e r su bj ec t of ba rgai n i n g. It
e xpl ai n ed th at th e M OA al l u ded to by N es tl merely sp ea k s of
th e improvemen t [ 3 8 ] or th e review for th e improvemen t [ 3 9 ] of th e cu rren t
Reti r em en t Pl an an d n oth i n g el s e . UF E - DFA - K MU rati o n al i z es th at:

Ha d th e obj e cti v e of th e pa rti es b e en t o c on si de r th e

Reti r em en t Pl an as n ot a su b j e ct f o r c ol l ecti v e b a rgai n i n g, th ey
wo u l d h av e s tat ed s o i n c at eg o ri cal t e rm s . O r, th e y c ou l d h av e
del e t ed th e sai d b en e fi t f r om th e C BA .

Un f o rtu n at el y f o r p eti ti on e r, th e d o cu men ts r el i ed u p on b y

i t do n ot st at e t h at th e Re ti r em en t Pl an i s n o l on ge r a
ba rgai n abl e i t em . Th e s ai d b en e fi t w as n ot al s o r em o v ed o r
del e t ed f r om th e C B A.

If e v e r , wh at w a s u n i l ate r al l y gr a n ted b y p e ti ti on e r
c omp an y a s ap p ea ri n g on th e ab o v e - st at ed l ett e r an d M O A w e r e
th e i mpr o v em en ts on th e R eti r e m en t Pl an . Th e R eti r em e n t Pl an
c ou l d n ot h a v e b e e n u n i l ater al l y gr an t ed by th e sai d l e tt e r an d
M OA si n c e th e sai d Pl an pr e dat e s th e s ai d l ett e r an d M OA by o v er
tw o de c ad e s.

UF E- D FA - K MU c on cl u de s th at [ s]i n c e t h e R eti r em en t Pl an di d n o t
de ri v e i ts e xi st en c e f r o m th e l et t e r an d MO A x x x, th e n atu r e o f th e
Reti r em en t Pl an wa s n ot al te r ed o r ch an g ed by th e su b s e qu en t i s su an c e
by p eti ti on e r c omp an y o f th e sai d l et te r an d MO A. Th e Reti r em en t Pl an
r em ai n ed a C BA i te m wh i ch i s a p r op e r su bj ec t o f c ol l ect i ve ba rg ai n i n g
pu r su a n t t o th e 1 99 1 ru l i n g o f th i s H on o rabl e C ou rt . [ 4 0 ]

W e ag r e e .

Th e p r e s en t i ssu e is n ot on e of fi r st i mp r e s si on . In N e stl
Ph ili ppin e s, In c . v . NL RC , [ 4 1 ] i r on i cal l y i n v ol vi n g th e s am e pa rti e s h e r ei n ,
th i s C ou rt h a s h a d th e o c ca si on to af fi r m th at a r et i rem e n t pl an i s
c on s e n su al i n n atu r e .

By w ay o f ba ck g ro u n d, th e pa rti es th e r ei n r es o rt e d t o a sl ow d own
an d wal k ed ou t of t h e f ac t or y p r omp ti n g th e ma n ag e m en t t o sh u t d o wn i ts
op e ra ti on s. C ol l ecti v e ba rg ai n i n g n eg oti ati on s were c on du ct ed bu t a
de adl o ck w as su bs equ en tl y d e cl ar ed . Th e S e c r et ar y o f L a bo r a ss u m ed
j u ri sdi cti o n ov e r t h e l ab o r di sp u t e an d i ssu ed a r etu rn - t o- wo r k o rd e r . Th e
NL RC th e r ea ft e r i s su ed i ts r e s ol u ti on m odi f yi n g N e stl s e xi sti n g n on -
c on t ri bu to r y R eti r em en t Pl an . Th e c o mpan y fi l ed a p eti ti on
f or c e rti o ra ri al l egi n g gr av e abu s e o f di s c r eti on on th e pa rt o f th e N LR C a s
N es tl wa s a rgu i n g th at si n c e i ts R eti r em en t Pl an i s n on - c on t ri bu to r y , i t
sh ou l d be a n on - i s su e in CB A n e go ti ati on s . N e stl h ad th e s ol e an d
e xcl u si v e p r e r ogati v e t o d efi n e th e t e rm s o f th e pl an a s th e em pl oy e e s
h ad n o v e s t e d a n d de man d abl e ri gh ts t h e r e on th e g r an t o f su ch n ot b ei n g
a c on t r ac tu al obl i gati on bu t si mpl y g rat u i tou s. In a ru l i n g c on t r ar y t o
N es tl s po si ti on , th i s C ou rt , th r ou gh Mad am e Ju sti c e G ri o - Aq u i n o, d e cl ar ed
th at:

Th e c om pan y s [ N e st l ] c on t en ti on th at i t s r eti r em en t pl an i s
n on - n e go ti abl e, i s n ot w el l - tak en . Th e N LR C c o r r e ctl y o b s e rv e d
th at th e i nc l u si o n of t he r et i re m en t p l a n in t he co l l ect i ve
b ar g a i ni n g a g r ee me nt a s p a rt of t he p ack a g e o f ec on om ic
be n ef it s ex te n de d by t he co m p a ny to it s em p lo ye e s to
pr o vi de th em a m ea su r e o f fi n an ci al s e cu ri ty a ft e r t h e y sh al l
h av e c ea s ed t o b e em pl o y ed i n t h e c omp an y, r e wa r d th ei r
l oyal ty , b o o st th ei r mo r al e a n d e ffi ci e n cy an d p r om ot e i n d u st ri al
pe ac e , g i v es a c on se n s u al c h ar a ct er t o t he p l a n s o t h at it
m ay n ot b e t e r mi n at e d o r mo d i fi e d a t w i l l b y ei t he r
p ar ty ( ci tati on omi tted ).

T h e f ac t th a t t he re t ir e me nt pl a n i s no n -c o nt ri b ut or y ,
i .e. , th at th e e mpl o y e es c on tri bu t e n o th i n g to th e op e r at i on o f
th e pl an , do e s n ot m a ke i t a no n - i s su e i n t h e C B A
ne go t i at io n s . A s a matt e r of f a ct, al m o st al l o f th e b en e fi ts th at
th e p eti ti on e r h as g ran t ed t o i ts e mpl o y e es u n d e r th e CBA sal a ry
 i n creases, ri ce al l owan ces, mi dyear bon u ses, 13 t h an d 14 t h mon th
pay , s en i o ri ty pa y , me di cal an d h o spi ta li z ati on pl an s , h eal th an d
den t a l s er vi c e s, va c ati on , si ck & oth e r l eav e s wi th pa y a r e n on -
c on t ri bu to r y b en efi t s. Si nc e t he re t ir e me nt p l a n h a s b e en a n
i nt eg r a l p ar t of t he C B A s i nc e 1 97 2, th e U ni o ns d e m a nd to
i nc re a s e t h e b e ne fi ts d u e t he e mp l o ye e s un d er s a i d p l a n, i s
a v a l id C B A i s s ue . x x x

x x x x

x x x [ E] m pl oy e es do h av e a v e st e d an d d e m an d a bl e
r ig ht ov e r ex is ti n g b e ne f it s vo l un t a r il y g r an te d t o t h em b y
th e ir em p lo ye r . T he l at te r m a y n ot u n i l at er a l l y w it h dr a w ,
el i m in a te o r d i m i n is h s uc h b e ne f it s (A rt . 1 00 , Lab o r Co d e;
oth e r ci ta ti o n o mi tted) . [ Em ph a s e s su p pl i ed.] [ 4 2 ]

In t h e c as e a t ba r , i t can n o t b e d en i ed th at th e C BA th a t w as a b ou t
to e xpi r e at th at t i me c on tai n e d p r o v i si on s r e sp e cti n g t h e R eti r em en t
Pl an . A s th e l att e r ben e fi t w a s al r ead y su bj ec t o f th e e xi sti n g CBA , th e
me mb e r s of U F E - D FA - K M U w er e on l y e x e r ci si n g th ei r pr e r og ati v e to
ba rgai n or r en eg ot iat e f o r th e i mp r o v em en t of th e te rm s of th e
Reti r em en t Pl an j u s t l i ke th e y w ou l d f o r al l th e oth e r e c on omi c , a s w el l as
n on - e c on omi c b en e f i ts p r e vi ou sl y en j oy ed b y th e m. P r eci s e l y, th e pu rp o s e
of c ol l ecti v e b a rga i ni n g is th e ac qu i si ti on or at tai n m e n t of th e b e st
po s si bl e c ov en an t s or terms r el ati n g to ec on o mi c an d n on - e c on omi c
ben e fi ts g r an t ed by e mpl o y er s an d du e th e empl o y e e s. T h e La bo r C od e
h as a ctu al l y i mp os e d a s a mu tu al o bl i gati on o f b oth pa r ti e s, th i s du ty t o
ba rgai n c ol l ecti v el y . Th e du t y to ba r gai n c ol l ec ti vel y is c at eg o ri cal l y
pr e s c ri bed b y A rti cl e 25 2 o f th e sai d c o de . It s tat e s:

A RT. 25 2. M E A NI N G O F D UT Y TO B A RG A I N CO L LE CT I V ELY . Th e
du ty t o b a rgai n c ol l e cti v el y m ean s th e pe r f o rman c e o f a m u tu al
obl i gati on t o m e et an d c on f e r p r omp tl y an d e xp edi ti ou sl y an d i n
go od fai th f o r th e pu rp o s e o f n eg oti ati n g a n a g r e em en t wi th
r e sp e ct to wag e s , h ou rs of w o r k , an d al l oth e r t e r ms an d
c on di ti on s of e mpl o ym en t i n cl u di n g pr op o sal s f o r adj u sti n g an y
 gri e van c e s or qu e sti on s a ri si n g u n d e r su ch a gr e e m en t an d
e x ecu ti n g a c on t ra c t i n c o rp o rati n g su c h a gr e e m en t i f r e q u e st ed
by ei th e r p a rty , b u t su ch du t y d o e s n ot c omp el an y p art y t o
ag r e e t o a p r op o sal o r t o ma k e an y c on c e ssi on .

Fu rth e r , A rti cl e 25 3 , al s o o f t h e La bo r Co d e, d e fi n e s th e p ar am et e r
o f sai d o bl i gati on w h en th e r e al r ea dy e xi st s a CBA , v iz :

ART . 253 . D UT Y T O BA R GA IN C O LL E C T IVE L Y W H E N T H ER E EX IS TS A

CO L L EC T IV E BAR G A IN IN G A G R E EM E N T. Th e du ty t o ba rgai n
c ol l ecti v el y sh al l al s o m e an th a t ei th e r pa rt y sh al l n ot t e r mi n ate
n o r m o di fy su ch a g r e em en t du ri n g i ts li feti m e. Ho w e v e r, ei th e r
pa rty can s e r v e a w ri tten n oti c e t o t er mi n at e o r m od i fy th e
ag r e em en t at l ea st si xty (6 0) d a ys p ri o r t o i ts e xpi r ati on d at e. It
sh al l b e th e du ty o f bo th pa rti e s t o k e ep th e statu s qu o a n d t o
c on ti n u e i n fu l l fo r c e an d e f f ect th e t e r ms an d c on di ti on s o f th e
e xi sti n g ag r e e me n t du ri n g th e si xty day p e ri od an d/ o r u n ti l a
n e w ag r e em en t i s r e ach ed b y th e pa rti e s.

An d, i n d em an di n g t h at th e t e r ms of th e R eti r e me n t Pl an b e op en ed
f or r e n eg oti ati on , t h e m emb e r s o f UF E - DFA - K MU a r e a ct i n g wel l wi th i n
th ei r ri gh t s a s w e h av e , i n de e d, d ec l are d th a t th e R eti r em en t Pl an i s
c on s e n su al i n ch a ra ct e r; an d s o, n eg oti abl e.

Co n t ra r y t o th e cl ai m o f N estl th at th e cat e go ri c al m en ti o n o f th e
te rm s u n il at e ral ag r e em en t i n th e l et te r an d th e M OA si gn e d by th e
r ep r e s en ta ti ve s of U FE - DF A - K M U, h a d, f o r al l i n ten t s a n d p u rp o s e s w o rk e d
t o es t op UF E- DFA - K MU f r om r ai si n g i t as a n i s su e i n th e C B A n eg oti ati on s,
ou r r e adi n g o f th e s am e, sp e ci fi cal l y P a ra gr aph 6 an d su bp ar ag rap h 6 .2 :
 6. Addi ti on al l y, th e COMPANY agree to exten d th e fol l owi n g
u n i l ateral g ran t s w h i ch sh al l n o t f o r m pa rt of th e C ol l ecti v e
Ba rgai n i n g Ag r e e m e n t ( CBA ):

x x x x

6.2 . R evi ew for i mpr o v em e n t of

th e C O MP AN Y s R eti r em en t Pl an an d th e r e f e r en c e on
th e R eti r e m en t Pl an i n th e C ol l ecti v e Ba rg ai n i n g
Agr e e m en t si gn ed on 4 Ju l y 19 95 sh al l be
mai n tai n ed . [43]

h ar dl y p e r su a d es u s th at th e m emb e r s o f UF E - DF A - K M U h a v e ag r e e d t o t r eat
th e R e ti r em en t Pl an a s a b en efi t th e t e rm s o f wh i ch a r e s o l el y d ep e n d en t
on th e i n cl i n ati on o f th e N e stl an d r e mo v e th e su bj ec t b en e fi t f r om th e
ambi t o f th e C BA. Th e ch a ra ct e ri z ati o n u n i l ate r al l y i mp os ed by N e stl on
th e R eti r e m en t Pl a n c an n ot op e rat e to di v e st th e e mpl o y e es of th ei r
v es t ed an d d e man d abl e ri gh t o ve r e xi s ti n g b en efi t s v ol u n tari l y g r an t ed b y
th ei r em pl oy e r . [ 4 4 ] B e si de s , th e c on ten ti on t h at UF E - DFA - K MU has
aban d on e d o r f o r sa k en ou r ea r l i er p r on ou n c em en t vi s - - vi s th e c on s en su al
n atu r e o f a r eti r e m en t pl an i s qu i te i n c on si s t en t wi th , n a y , i s n egat e d b y
i ts co n du ct i n do gg e dl y a s ki n g f o r a r en eg oti ati on of sai d b en e fi t.

W o rth n oti n g, at th i s p oi n t, i s th e fa ct th at th e a f o r equ ot e d p ar ag ra ph 6 an d

i ts su bpa r ag raph s , p a rti cu l arl y su bpa rag r aph 6. 2, h i gh li gh ts an
u n den i abl e fa ct th a t N es tl r e c ogn i z es t h at th e R eti r em en t Pl an i s pa r t o f
th e exi s ti n g C ol l ec ti v e Ba rg ai n i n g Ag r e e men t.

N es tl fu r th e r r ati on al i z es th at a ru l i n g de cl ari n g th e Re ti r e men t Pl an

a val i d C BA n eg ot i ati on i ss u e wi ll in spi r e oth e r ba r ga i ni n g u n i ts to
de man d f o r gr e at e r ben e fi ts i n a c c o rdan c e wi th th ei r r e sp e c ti ve ap p eti te s .
Su f fi c e i t t o sa y th a t th e c on s en su al n a tu r e o f th e R eti re m en t Pl an n ei th e r
gi ves th e u n i on members the u n fettered ri gh t n or th e u n bri dl ed
pr e r og ati v e t o d e ma n d m o r e th an wh at t h e c o mpan y can vi abl y gi v e.

As r ega rd s th e sc op e of th e a s su mp ti on p ow e r s of th e S e c r et ar y of
th e D OL E , th e app e l l ate c ou rt ru l ed th at S e c. St o. T om a s a s su m pti on o f
j u ri sdi cti o n p ow e r s sh ou l d h av e b ee n l imi ted t o th e di s ag r e em en t o n th e
gr ou n d ru l e s of the c ol l ec ti ve b ar g ai n i n g n eg oti ati on s . Th e C ou rt of
App eal s r e f e r r ed to th e mi n u t es of th e m e eti n g h el d on 30 O ct o b er
2001 . Th at th e r e p r e s en ta ti ve N es tl wa s r e c or d ed t o h a v e stat e d th at w e
ar e stil l di scu s sin g g r ou n d ru l e s an d n ot y et on th e C BA n e g otiat i on s
pr op e r , a d ead l oc k can n ot b e d e cl ar e d , [ 4 5 ] wa s a t el li n g fa c t. Th e C ou rt o f
App eal s , th u s , d e cl ar e d th at th e S e c r e tar y sh ou l d n o t h av e ru l ed on th e
qu e sti on s an d i s su e s r el ati v e t o th e su bst an ti v e as p ec t o f th e C BA si mpl y
be cau s e th e r e wa s n o c on fl i ct on th e CB A y et. [ 4 6 ]

UF E- D FA - K MU a gr e e s i n th e a b ov e an d c on t en d s th at th e r equ i si t es
o f j u di ci al i n qu i ry r equ i r e , fi rs t an d f o r em o st th e p r e s en c e of an a ctu al
ca s e c on tr o v e r sy . It th en c on cl u d e s th a t [i ]f th e c ou rts o f l aw c an n ot a ct
an d d e ci de i n th e a bs en c e of an act u al ca s e o r c on t r ov e r s y, s o sh ou l d b e
(si c) al s o th e H on o r abl e D O L E S ec r et a ry . [ 4 7 ]

N es tl e, h ow e v e r , c on t ra di ct s th e p r e c edi n g di squ i si ti on s on th e
gr ou n d th at su ch r e f er r al t o th e mi n u te s o f th e m e eti n g wa s e rr on e ou s
an d mi sl e adi n g. It av e r s th at th e C ou r t o f Ap pe al s f ai l ed to c on si de r th e
ci r cu m stan c e su r r o u n di n g sai d u tt e ra n c e th at th e sta t em en t wa s m ad e
du ri n g th e p r ev en ti v e m edi ati on p r o ce edi n g s an d th e UF E - DFA - K MU h ad
n ot y e t fi l ed an y n oti c e of st ri ke . It f u rth e r emph a si z e s t h at i t wa s UF E -
DFA - K MU wh o fi r st al l eged ba rg ai n i n g de adl o ck a s th e ba s i s f o r th e fi li n g
o f i ts N oti c e o f St ri k e. Fi n al l y, N estl cl ari fi e s th at b e f o r e t h e fi r st N oti c e
o f St ri k e wa s fi l ed , s e v e ral c on ci l i ation c on f e r en c e s h a d al r e ad y b e en
u n de rt ak e n wh e r e both pa rti es h ad e xch an g e s o f th ei r r e sp e cti v e C BA
pr op o sal s .
 In th i s, w e ag r e e wi th N e stl . D ecl a ri n g t h e S ec r et a ry o f t h e D OL E t o
h av e a ct ed wi th g ra v e abu s e of di s c r eti on for ruling on su bs tan ti al
matt e r s o r i s su e s a n d n ot r e st ri cti n g i ts el f m e r el y on th e g r ou n d ru l e s ,
th e app el l ate c ou rt an d UF E - DF A - K M U wo u l d h a v e u s t r e at th e su bj e ct
l abo r di spu t e i n a pi e c em eal fa sh i on .

Th e p ow e r g ran t e d t o th e S ec r et a ry o f t h e D O L E by Pa ra gr a ph (g ) o f
Arti cl e 2 63 of th e L ab or C od e, t o wi t:

A RT . 26 3. ST R I KE S, P I CK ET IN G , A N D LO CKO U TS .

x x x x

( g ) Wh en , i n h i s opi n i on , th e r e e xi s ts a l ab o r di spu t e
cau si n g o r l i kel y t o cau s e a st ri k e o r l o ck ou t i n an i n du st r y
i n di spen sabl e t o th e n ati o n al i n te r e st , t h e S e c r eta r y o f Lab o r an d
Em pl oy m en t ma y a s su m e j u ri s di cti on o v e r th e di spu t e an d d e ci de
i t or c e r ti fy t h e sa m e t o th e C o mmi s si on fo r c o m pu l so r y
ar bi trati on . Su ch a s su mp ti on o r c e rti fi c ati on sh al l h av e th e e f f ect
o f au t o mati cal l y en j oi n i n g th e i n t en d e d o r i mp en di n g st r i ke o r
l oc ko u t a s sp e ci fi ed i n th e a s su m pti on o r c e rti fi cati o n o r de r . If
on e h a s al r e ad y t ak en pl ac e at t h e ti me o f a ssu mpti on o r
c e rti fi cati on , al l st ri ki n g or locked ou t empl o y e e s sh al l
i mmedi at el y r etu rn to w o r k an d th e e mpl oy e r sh al l i mme di atel y
r e su m e o p e rati on s a n d r ead mi t al l wo r k e r s u n d e r th e s am e te rm s
an d c on di ti on s p r e vai l i n g bef o r e th e st ri k e o r l o c k o u t. Th e
Se c r eta r y o f L ab o r an d Empl o y m en t o r th e C ommi s si on ma y s e e k
th e as si st an c e o f l aw en f o r c em en t ag en ci e s t o en su r e c om p li an c e
wi th th i s p r o vi si on a s w el l a s wi th su ch o rd e r s a s h e ma y i s su e t o
en f o rc e th e s am e .

x x x x
au th ori z es h er to assu me j u ri sdi cti on over a l abor di spu te, cau si n g or l i kel y
to c au s e a st ri k e o r l oc k ou t i n an i n du st r y i n di sp en sabl e t o th e n ati on al
i n ter e st , an d c or r el ati vel y , t o d eci d e th e s am e .

In th e c a s e at b a r, th e S e c r et a ry o f t h e DO L E si mpl y r el ied on th e
N oti c es o f St ri k e th at w e r e fi l ed b y U F E - DFA - K MU a s st at e d i n h er O rd e r
o f 0 8 Ma r ch 20 02 , t o wi t:

x x x Th e r e c or ds d i scl o s e th at th e Un i on fi l ed t w o N oti c e s
o f St ri k e . Th e Fi r st i s dat ed Oc t ob e r 31 , 20 01 wh o s e g r ou n ds ar e
ci ted v e rbati m h e r e u n de r:

A. Ba r gai n i n g D ea dl o ck
1. Ec on o mi c i s su e s (sp e ci fy )
1. R eti r e me n t
2. P an el C om po si ti o n
3. C o st s an d Att en d an c e
4. C BA

Th e s e c on d No ti c e o f St ri ke i s da t ed N o v emb e r 7 , 200 1 a n d th e
ci ted g r ou n d i s l i ke qu ot e d v e rba ti m b el ow :

B. Un fai r Lab o r P r ac ti ce s (s p eci f y)

Ba rgai n i n g i n ba d fa i th
Set ti n g p r e - c on di ti on i n th e g r ou n d ru l e s ( R eti r em en t
i ssu e)

N owh e r e i n th e s e c on d N o ti ce o f S tri k e i s i t i n di cat ed th at th i s

N oti c e i s an a m en d men t t o an d t o o k th e pl a c e o f th e fi r st N oti c e
o f St ri k e. In f a ct, ou r A s su mp ti on of Ju ri sdi c ti on Or d e r d at ed
N ov e mb e r 29, 2 00 1 sp e ci fi cal l y ci te d th e t w o ( 2) N oti c es of
Stri k e wi th ou t an y o bj e cti on on th e pa rt of th e Un i on x x x . [ 4 8 ]

Th u s, ba s ed on th e N oti c es o f St ri ke fi l ed by UF E - DFA - K MU , th e S e c r et ar y o f

th e D O L E ri gh tl y d e ci ded on matt e r s o f su b st an c e. Fu rth e r , i t i s a fa ct t h at

du ri n g th e c on ci l i ati on m e eti n g s b ef o r e th e N CM B , bu t p ri o r t o th e fi l i n g of

th e n oti c es of st ri k e , th e pa rti es h ad al re ad y d el v e d i n to mat t er s a ff e cti n g

th e m eat of th e c ol l ecti v e ba r gai n i n g ag r e em en t . Th e a pp el l ate c ou r ts

rel i an ce on th e statemen t [ 4 9 ] of th e represen tati ve of Nestl i n ru l i n g th at th e

l abo r di spu t e h ad y et t o p ro g r es s f r om th e di scu s si on o f t h e g r ou n d ru l e s of

th e C BA n eg oti ati on s i s cl ea rl y mi sl e adi n g; h en c e , e r r on e ou s.

N ev e rth el es s , g r an t i n g fo r th e sa k e o f ar gu m en t th at th e m e e ti n gs
u n de rt ak e n by th e p a rti e s h ad n o t g on e b e y on d th e di s cu s si on o f th e
gr ou n d ru l e s , th e i s su e of w h eth e r o r n ot th e S e c r eta r y of th e D OL E c ou l d
de ci de i s su e s i n ci d en t al t o th e su b j e c t l ab o r di spu t e h a d al r e ad y b e en
an s w e r ed i n th e a f fi rm ati v e. Th e S e c r et ar y s a ssu mpti on o f j u ri sdi cti on
po w e r n e c e ss a ri l y i ncl u de s mat t er s i n ci den t al to th e l ab o r di spu t e , t h at i s ,
i ssu e s th a t a r e n e c e s sa ri l y i n vol v ed i n t h e di spu t e i ts el f , n o t j u st t o th o s e
as c ri bed i n th e N o ti ce o f St ri k e; o r , oth e r wi s e su bmi tt ed t o h i m f or
r e s ol u ti on . A s h el d i n th e c a s e of In t e rn a ti on al Ph a r ma c eu ti c al s, In c . v.
Se c . of Lab o r an d Em pl oy m en t , [ 5 0 ] x x x [t ]h e S e c r eta r y w a s e xpl i ci tl y
gr an t ed b y A rti cl e 263 (g) o f th e La b o r C od e th e au t h o r i ty t o a ssu m e
j u ri sdi cti o n o v er a l abo r di s pu t e cau si n g o r l i kel y to cau s e a st ri k e o r
l oc ko u t i n an i n du s tr y i n di spen s abl e t o th e n ati on al i n te r e st , an d d e ci d e
th e s am e a c c or di n gl y. N ec e s sa ri l y, th i s au th o rit y t o a s su me j u ri sdi cti on
ov e r th e s aid l ab o r disp u t e mu st in clu d e an d ex t en d t o a ll qu e sti on s an d
c on t r ov e r si e s a ri sin g th e r ef r o m , i n cl u di n g c as e s ov e r w h i ch th e L ab o r
Arbi t e r h as e xcl u si v e j u ri sdi c ti on . [ 5 1 ] Ac c o rdi n gl y, e v en i f n ot e xa ctl y on
th e g r ou n d u p on w h i ch th e N oti c e o f Stri k e i s b a s ed, th e fa ct th at th e
i ssu e i s i n ci de n tal t o th e r e s ol u ti on of th e su bj e ct l ab o r di spu t e o r t h at a
sp e ci fi c i ss u e h a d be en su bmi tt ed t o th e S e cr e ta r y of th e D OL E f o r h e r
r e s ol u ti on , val i dl y e mp ow e r s th e l att e r to t ak e c ogn i z an c e o f an d r e s ol v e
th e sam e .

Se c r eta r y St o . T o ma s c o r r ec tl y as s u me d j u ri s di cti on o v er th e
qu e sti on s i n ci den t al t o th e cu r r en t l ab o r di spu t e an d th o s e mat t er s rai s ed
by th e pa rti e s . In an y e v en t , th e qu e r y as to wh et h e r or n ot th e
Reti r em en t Pl an i s to b e i n cl u de d i n t h e CB A n eg oti ati on s b et w e en th e
pa rti e s i n el u c tabl y di ctat e s u po n th e S e c r eta r y o f t h e D OL E t o g o i n to th e
su b stan ti ve matt e r o f th e CBA n eg oti ati on s.
 La stl y , the th i rd i s su e p er tai n s to the al l eg ed r ev e r si bl e error
c ommi tt ed b y th e C ou rt o f App e al s i n h ol di n g, al bei t i mpl i edl y, N e stl f r e e
an d cl ea r f r om an y u n fai r l abo r p ra cti c e . UF E - DF A- K MU ar gu e s th at N e stl s
r e fu s al to ba rg ai n o n a v e r y i mp o rtan t CBA e c on omi c p r ovi si on c on sti tu te s
u n fai r l ab o r p ra cti c e . [ 5 2 ] It e xpl ai n ed t h at N e stl s et a s a pr e c on di ti on f o r
th e h ol di n g o f c ol l ecti v e b a rgai n i n g n e goti ati on s th e n on - i n cl u si on o f th e
i ssu e o f R eti r e m en t Pl an . In i ts w o r ds , r e sp on d en t N e stl Ph i l s., In c .
i n si sted th at th e Un i on sh ou l d fi r st a g re e t h at th e r eti r em en t pl an i s n ot a
ba rgai n i n g i s su e b e f or e r e sp on de n t N e stl w ou l d a g r e e t o di s cu ss o th er
i ssu e s in th e C BA . [ 5 3 ] It th en c on cl u ded th at th e C ou rt of A pp eal s
c ommi tt ed a l egal e r r o r i n n ot ru l i n g th at r e sp on d en t co mp an y i s gu i l ty of
u n fai r l abo r p ra cti c e . It al s o c o mmi tt e d a l egal e r ro r i n f ai li n g to awa r d
dama g es t o th e p eti ti on e r fo r th e U LP c om mi tted b y th e r e s pon de n t. [ 5 4 ]

N es tl r e fu t e s th e ab ov e a rgu m en t a n d a s s er ts th at i t wa s on l y
be f o r e th e C ou rt o f App e al s, a n d i n th e s e c on d P eti ti on f o r C e rti o ra r i at
th at, di d UF E - DF A - K MU r ai s e th e ma tte r of u n f ai r l ab o r pr a cti c e. It
r ea s on ed th at th e su bj e ct o f u n fai r l abo r p r acti c e sh ou l d h a v e b e en
th r e sh ed o u t wi th t h e app r op ri at e l ab o r t ri bu n al . In j u sti f yi n g th e fai l u re
o f th e C ou rt o f A pp eal s t o fi n d i t gu i l ty o f u n fai r l ab o r p r acti c e , i t stat e d
th at:

Un d e r t h e ci r cu m st an c e s , th e r e f o r e, th e r e wa s n o wa y f o r
th e C ou rt o f App e a l s to m ak e a ru l i n g on th e i ssu e s o f u n f ai r
l abo r p ra cti c e an d d amag e s , si mpl y b e c au s e t h er e wa s n o th i n g t o
su pp o rt o r j u sti f y s u ch a cti o n . Al th ou g h pe ti ti on e r wa s a f f o rd ed
by th e S ec r et a r y th e o pp o rtu n i ty t o b e h ea r d an d m o r e, i t si mpl y
ch os e t o omi t th e sa i d i ssu e s i n th e p r o c e edi n g s b el o w . [ 5 5 ]

W e a r e pe r su ad ed .
 Th e c on c ept o f u n f ai r l ab o r p ra cti c e i s d efi n ed b y th e L ab or C od e
as:

A RT . 2 47 . C O N CE P T O F U NF A I R L A B O R PR A CT I CE A N D
PRO CE D URE FO R P RO SE C UT IO N TH EREO F . U n f ai r l ab or
pr acti c e s vi ol at e th e c on sti tu ti on al ri gh t of w o rk e r s an d
em pl oy e e s t o s el f - o rga n i z ati on , a r e i n i mi ca l to th e l egi ti mate
i n ter e st s o f b oth l abo r an d man a g em e n t, i n cl u di n g th ei r r i gh t to
ba rgai n c ol l ecti v el y an d oth e rwi s e d e al wi th ea ch oth e r i n an
atm o sph e r e o f f r e e do m an d mu tu al r e sp e ct , di s ru pt i n du st ri al
pe ac e an d h i n de r th e p r o mo ti on of h eal th y an d st abl e l ab or -
man ag e m en t r el ati on s.

x x x x.

Th e s am e c od e l i ke wi se pr o vi de s th e a ct s c on sti tu ti n g u n f ai r l ab o r
pr acti c e s co mmi tt ed b y e mpl o y er s , t o w i t:

A RT . 24 8. U N F A IR L A BO R PR A CT IC ES OF
EMPL O Y ER S . It sh a l l be u n l aw fu l f o r a n empl o y e r t o c om mi t an y
o f th e f ol l owi n g u n f ai r l ab o r p ra cti c e s:

(a) T o i n te r f e r e wi th , r e st rai n o r c o e r c e em pl oy e e s
i n th e ex e r ci s e of th ei r ri gh t t o s el f - o r g an i z ati on ;

(b) T o r equ i r e a s a c on di ti on o f em pl oy m en t th at a
pe r s on o r a n e mpl o y e e sh al l n ot j oi n a l abo r o rg an i z ati on o r sh al l
wi th dr aw f r o m on e t o wh i ch h e b el on g s;

(c) T o c on t r act ou t s e r vi c e s o r fu n c ti on s b ei n g
pe r f o rm ed by u n i o n m e mb e r s wh en su ch wi l l i n terf e r e wi th ,
r e st rai n o r c o e r c e em pl oy e e s i n th e e x e rci s e o f th ei r ri g h t t o
s el f- o rgan i z ati on ;

(d) To i n i ti ate , d o mi n at e, a s si st or o th er wi s e
i n ter f e r e wi th th e f o rm ati on o r a d mi n i strati on o f a n y l ab o r
o rga n i z ati on , i n cl u di n g th e gi vi n g o f fi n an ci al o r o th e r su pp o rt to
i t o r i t s o rg an i z e r s o r su pp o rt e rs ;

(e) T o di sc ri mi n ate i n r ega rd t o wag e s , h ou rs o f

wo r k , an d oth e r t e r ms an d c on di ti on s o f empl oy m en t i n o r de r t o
en c ou rag e or d i sc ou rag e me mb e r sh i p in an y l ab o r
o rga n i z ati on . No th i n g i n th i s C od e o r i n an y oth e r l aw sh al l st o p
th e pa rti e s f r om r e qu i ri n g m emb e r sh i p i n a re c og n i z ed c ol l ecti v e
ba rgai n i n g ag en t a s a c on di ti on f o r e mpl oy m en t , e xc e pt th o s e
em pl oy e e s wh o a r e al r ea dy m e mb e rs o f a n o th e r u n i on a t th e
ti me o f th e si gn i n g o f th e c ol l ecti v e ba r gai n i n g ag r e em en t .

Em pl oy e e s o f an ap pr op ri at e c ol l ecti v e ba rgai n i n g u n i t wh o
ar e n ot m em b er s o f th e r e co gn i z ed c o ll ecti v e ba rg ai n i n g ag en t
may b e a ss e s s ed a r e as on abl e f e e eq u i val en t t o th e du e s an d
oth e r f e e s p ai d by m em b e rs o f t h e r ec o gn i z ed c ol l ecti v e
ba rgai n i n g ag en t , i f su ch n on - u n i on m e mb e rs a cc e pt th e b en e fi ts
u n de r t h e c ol l ecti v e ag r e e m en t . P r ovi ded , Th at th e i n di vi du al
au th o ri z ati on r equ i r ed u n d e r A rti cl e 24 2, p a rag r aph ( o ) o f th i s
Co d e sh al l n ot a p pl y t o th e n on m e mb e rs o f th e r ec o gn i z ed
c ol l ecti v e ba r gai n i n g ag en t; [ Th e a r ti cl e r e f e rr e d t o i s 24 1, n ot
242 . CAA ]

( f) T o di smi s s, di s ch a rg e, o r oth e rwi s e p r ej u di c e o r

di sc ri mi n ate ag ai n st an e mpl o y e e f o r h a vi n g gi v en o r b ei n g ab ou t
to gi v e t es ti mon y u n de r th i s C od e ;

(g) T o v i o l at e t h e d uty t o b ar g a i n c o ll ec t iv e ly as
pr e sc r ib e d b y th i s C o de ;
 (h ) To pay n egoti ati on or attorn eys fees to th e
u n i on o r i ts o f fi c er s o r a g en t s as p a rt of th e s ettl e m en t o f an y
i ssu e i n c ol l ecti v e b ar gai n i n g o r an y o th e r di spu t e; o r

(i ) T o vi ol ate a c ol l ec ti ve b a rgai n i n g ag r e em en t .

Th e p r ovi si o n s o f th e p r e c edi n g pa ra g ra ph n ot wi th st an di n g,
on l y th e o ffi c e r s an d ag en ts o f c o r po ra ti on s a s so ci ati on s o r
pa rtn e rsh i p s wh o h av e a ctu al l y p a r ti ci pated , au th o ri z ed o r
rati fi e d u n fai r l abo r p r ac ti c es sh al l be h el d c ri mi n all y li abl e.
[E mph a si s su ppl i ed. ]

H e r ei n , N e stl i s a c c u s ed o f vi ol ati n g i ts du t y t o ba rg ai n c ol l ecti v el y

wh en i t p u r p or t edl y i mp o s ed a p re - c on di ti on t o i ts ag r e e men t t o di s cu ss
an d en gag e i n col l e cti v e ba rg ai n i n g n eg oti ati on s wi th U F E - DFA - K MU .

A m eti cu l ou s r e vi e w o f th e r ec o r d an d pl eadi n gs o f th e ca s e s a t b a r
sh ow s th at , of th e t wo n oti c es of st ri k e fi l ed b y UF E - DF A - K MU b e f o r e th e
NC MB , i t w as on l y on th e s e c on d th at th e g r ou n d o f u n f ai r l abo r p r acti c e
wa s al l eg ed. W o rs e , th e 7 N o v emb e r 20 01 N oti c e of St ri k e m e r el y
c on tai n ed a g en e r al al l ega ti on th at N e s tl c om mi tte d u n f ai r l ab o r p ra cti c e
by b a rgai n i n g i n bad fai th f o r su pp o s edl y s etti n g p r e - c on di ti on i n th e
gr ou n d ru l e s ( R eti r e men t i s su e) . [ 5 6 ] On th e c on t ra r y, N e stl , i n i ts Po si ti on
Pap e r , di d n ot c on fi n e i ts el f t o th e i s su e o f th e n on - i n cl u si on of th e
Reti r em en t Pl an bu t ext en si v el y di scu s s ed i t s stan c e on o th e r ec on o mi c
matt e r s p e rtai n i n g t o th e CB A.

Ba si c i s th e p ri n ci pl e th at g o od f ai th i s p r esu m ed an d h e wh o
al l ege s bad fai th h as th e du t y t o p r o v e th e s am e . [ 5 7 ] B y i mpu ti n g b ad
fai th u n t o th e a ctu ati on s o f N es tl , i t wa s UF E - DFA - K MU , th e r e f o r e, wh o
h ad th e bu rd en o f pr o o f t o p r es en t su bst an ti al e vi d en c e t o su pp o rt th e
al l egati on of u n fai r l abor practi ce. A peru sal of th e al l egati on s an d
ar gu m en t s rai s e d by U F E - D FA - K MU i n th e M em o r an du m (i n G.R . N os .
1589 30 - 3 1) wi l l re adi l y di scl o s e th a t i t f ai l ed t o di sc h ar g e sai d on u s
pr ob an di a s th e re i s sti l l a n e ed f o r t h e p r es en tati on of e vi den c e oth e r
th an i ts ba r e c on t e n ti on of u n f ai r l ab o r p r ac ti c e i n o r d e r to ma k e c e rtai n
th e p r op ri e ty o r i mpr op ri e ty o f th e u n fai r l ab o r p ra cti c e ch a rg e h u rl e d
agai n st N estl . Un d e r Ru l e X III, S e c. 4 , B o o k V o f th e Impl em en ti n g Ru l e s
o f th e Lab o r C o d e:

x x x . In ca s e s o f u n fai r l ab o r p ra cti c es , t he n ot ic e o f
st r ik e s h a ll a s f a r a s p r act i c ab l e, st at e t he a ct s co mp l a i ne d
of an d th e e ff o rt s to r e s ol v e th e di s p u te ami c abl y. [ Emp h asi s
su ppl i ed .]

E xc e pt f o r th e a ss e rti on pu t f o rth by UF E - DF A - K M U, n ei th e r th e
s ec on d N oti c e o f S tri k e n o r th e r e c o r ds o f th e s e ca s e s su b stan ti ate a
fi n di n g o f u n fai r l a bo r pr a cti c e. It i s n ot en ou gh th at th e u n i on b el i ev ed
th at th e e mpl o y er c om mi tted a cts o f u n f ai r l ab o r p ra c ti ce wh en th e
ci r cu m stan c e s cl e a r l y n e gat e ev en a p r ima f ac ie sh owi n g t o wa r r an t su ch
a b el i ef . [ 5 8 ] In i ts l e tte r [ 5 9 ] t o UF E - DF A - K MU o f 29 M ay 2 00 1, th ou gh N e s tl
u n de r s c o r ed i ts p os i ti on th at u n ilat e r al gr an t s, on e - tim e c om pan y g ran t s ,
c omp an y - in iti at ed pol ic i es an d p r og r am s, wh i ch in clu d e , bu t are n ot
limit ed t o th e R eti r em en t Plan , In cid e n tal St rai gh t D u ty Pa y a n d Ca llin g
Pa y P r e miu m , are by th ei r v e ry n a tu r e n ot p ro p e r s u bj e ct s of C BA
n eg oti ati on s an d th e r ef o r e sh all b e ex clu d e d th e r e f r om , s u ch a tti tu de i s
n ot t an ta m ou n t t o r e fu s al t o ba r gai n . Th i s i s e sp e ci al l y t ru e wh e n i t i s
vi ew e d i n t h e l i gh t o f th e fa ct th a t ei gh t ou t of n i n e b a rgai n i n g u n i ts h av e
al l egedl y ag r e ed t o tr ea t th e R eti r em e n t Pl an as a u n i l ater al gr an t. N e stl ,
th e r e f o r e, c an n ot be fau l t ed for c on si d e ri n g th e s am e b en e fi t as
u n i l ateral l y g ran t e d. To be sure, it mu s t be sh own th at N es tl wa s
moti v at ed by i l l wi l l , bad f ai th , o r f ra u d, o r w as opp r e s si v e t o l abo r , o r
don e i n a ma n n er c on t ra r y t o m o ral s , g o od cu st om s , o r pu bl i c p ol i cy, an d ,
o f c ou r s e, th at s o ci al h u mi li ati on , w ou n d e d f e el i n gs, or g ra v e an xi et y
resu l ted x x x [ 6 0 ] i n di scl ai mi n g u n i l ateral gran ts as proper su bj ects i n
th ei r c ol l ecti v e ba rg ai n i n g n eg oti ati on s .

Th e r e i s n o p e r s e t e st o f g o o d fai th i n ba rg ai n i n g. [ 6 1 ] G o o d f ai th o r
bad fai th i s an i n f e r en c e t o b e d r awn f r om th e fa ct s , [ 6 2 ] t o be p r e ci s e, th e
c ru ci al qu es ti on of wh eth e r o r n ot a p art y h as m et h i s st atu t o ry du t y t o
ba rgai n i n g o od fai th t ypi cal l y tu rn s o n th e fa ct s o f th e i n di vi du al ca s e.
N ec e s sa ri l y, a d et e rmi n ati on of th e v al i di ty o f t h e Ne st l s pr o p osi ti on
i n vol v es a n app rai s al o f th e e x e r ci se o f i ts man ag em en t p r e r oga ti ve .

Em pl oy e r s a r e a c c o rd ed ri gh ts a n d p ri vi l ege s t o a s su r e t h ei r s el f -
det e r mi n ati on an d i n de p en d en c e an d r e as on abl e r etu rn o f capi tal . [ 6 3 ] Th i s
ma ss of p ri vi l eg e s c o mp ri s es th e s o- cal l ed man ag em en t
pr e r og ati v es . [ 6 4 ] In th i s c on n e cti on , th e ru l e i s th a t g o od f ai th i s al way s
pr e su m e d. As l on g as th e c o mpan y s e x e r ci s e of th e s am e i s i n go o d f ai th
to a dv an ce i t s i n t e r e st an d n o t f o r pu r po s e of d ef e ati n g o r ci rcu m v en ti n g
th e ri gh t s o f em pl o y e e s u n d e r th e l aw o r a val i d a g re e m en t , su ch e x e r ci se
wi ll be u ph el d. [ 6 5 ]

Co n st ru i n g a rg u en d o th at th e c on t en t of th e af o r equ o ted l et t er
o f 2 9 Ma y 20 01 l ai d do wn a p r e - c on di ti on t o i t s ag r e e m en t to ba rg ai n wi th
UF E- D FA - K MU , N es tl s i n cl u si on in i ts P o si ti on P ap e r of i ts p r op o sal s
af f ec ti n g ot h e r ma tte r s c o v er e d b y t h e CB A c on t radi ct s th e cl ai m of
r e fu s al t o ba rg ai n o r ba r gai n i n g i n bad fai th . A c c o rdi n gl y, s i n ce UF E - DF A -
K MU fai l ed t o p r o ff e r su b stan ti al e vi de n c e th a t w ou l d ov e r c om e t h e l egal
pr e su m pti on o f g oo d f ai th o n th e pa rt o f N e stl , th e a wa r d of m o ral an d
e x empl a ry d ama g es i s u n av ai li n g.

It mu st b e r em e mb e r ed at al l ti mes th at th e Ph i l i ppi n e C o n sti tu ti on ,

wh i l e i n e x o rabl y c o mmi tte d t ow a rd s th e p r ot e cti on o f th e wo r ki n g cl a ss
f ro m ex pl oi tati on a n d u n fai r t r e atm en t , n e v e rth el e s s m an dat e s th e p ol i cy
 of soci al j u sti ce so as to stri ke a bal an ce between an avowed predi l ecti on
f or l abo r , on th e o n e h an d , an d th e mai n ten an c e of t h e l egal ri gh t s of
capi tal , th e p r o v er bi al h e n th at l ay s th e g ol de n e gg, on th e oth e r . In d e ed ,
w e sh ou l d n o t b e u n mi n dfu l o f th e l eg al n o r m th at j u sti c e i s i n ev e r y ca s e
f or th e d es e r vi n g, t o b e di sp en s ed wi t h i n th e l i gh t of es tabl i sh ed f ac ts ,
th e a ppl i cabl e l a w, an d e xi sti n g j u ri sp r u den c e . [ 6 6 ]

In su m, f r om th e fa ct s an d evi d en c e ex tan t i n th e r ec o rd s o f th e s e
c on s ol i dat ed p eti ti o n s, th i s C ou rt fi n ds th at 1) th e R eti r e m en t Pl an i s s ti ll
a val i d i ssu e f or h e r ei n p ar ti e s c ol l ecti v e ba rg ai n i n g n eg ot i ati on s; 2) th e
Co u r t of App e al s c o mmi tte d r ev e r si b l e e r r o r i n l i mi ti n g to t h e i s su e o f th e
gr ou n d r u l es th e sc op e o f th e p o w e r of th e S ec r et a ry o f L ab or t o a s su m e
j u ri sdi cti o n o v e r th e su bj e ct l ab o r di s pu te ; an d 3) N es tl i s n ot gu i l ty of
u n fai r l ab o r p r acti c e . As no oth e r i s su es are av ai li n g,
th i s p on en ci a w ri te s fin i s t o t h e p r ot r ac ted l ab o r di spu t e bet w e en N e stl
an d UF E- DFA - K MU ( Cabu ya o Di vi si on ).

W H ER EF OR E , i n vi e w o f th e f o r eg oi n g, th e P eti ti on i n G. R. N o. 158 930 -

31 s e e ki n g th at N es tl be d ecl a r ed t o h a v e c o mmi tte d u n f ai r l ab o r p ra cti c e i n

al l egedl y s e tti n g a pr e c on di ti on t o b a rg ai n i n g i s D E N IE D. T h e P eti ti on i n G .R .

N o. 158 944 - 45 , h o w ev e r , i s PAR T LY G RAN T E D i n th at w e RE V ERS E th e ru l i n g

o f th e C ou rt o f App eal s i n CA G.R . SP N o. 69 805 i n s o fa r as i t ru l e d th at t h e

Se c r eta r y o f t h e D O L E g r av el y abu s ed h e r di sc r eti on i n fai l in g t o c on fi n e h e r

as su m pti on of j u r i sdi cti on power over th e g r ou n d r u l es of th e C BA

n eg oti ati on s; bu t th e ru l i n g of th e C ou rt o f App e al s on th e i n cl u si on o f th e

Reti r em en t Pl an as a val i d i s su e i n t h e c ol l ecti v e ba r ga i ni n g n eg oti ati on s

bet w e en UF E - DF A - K MU an d N e stl i s AF F IRM E D . Th e p a rti e s a r e di r e ct ed t o

r e su m e n eg oti ati o n s r e sp e cti n g th e R eti r em en t Pl a n an d to t ak e

acti o n c on si st en t wi th th e di s cu ssi on s h e r ei n ab ov e s et f o rth . N o c o st s .

SO OR D ER E D.
 6. Lopez v FFW gr 75700-0, aug. 30, 1990

G.R. Nos. 75700-01 August 30, 1990

LOPEZ SUGAR CORPORATION, petitioner,

vs.
FEDERATION OF FREE WORKERS, PHILIPPINE LABOR UNION ASSOCIATION
(PLUA-NACUSIP) and NATIONAL LABOR RELATIONS COMMISSION, respondents.

Sicangco, Diaz, Ortiz and Lapak for petitioner.

Reynaldo J. Gulmatico for private respondents.

FELICIANO, J.:

In this Petition, petitioner Lopez Sugar Corporation seeks reversal of the Decision dated 2
July 1986 of public respondent National labor Relations Commission ("NLRC") which
affirmed the decision of the Labor Arbiter dated 30 September 1983. The Labor Arbiter (a)
had denied petitioner's application to retrench some of its employees and (b) had ordered
the reinstatement of twenty-seven (27) employees and to pay them full backwages from
the time of termination until actual reinstatement.

Petitioner, allegedly to prevent losses due to major economic problems, and exercising its
privilege under Article XI, Section 2 of its 1975-1977 Collective Bargaining Agreement
("CBA") entered into between petitioner and private respondent Philippine Labor Union
Association ("PLUA-NACUSIP"), caused the retrenchment and retirement of a number of its
employees.

Thus, on 3 January 1980, petitioner filed with the Bacolod District Office of the then Ministry
of Labor and Employment ("MOLE") a combined report on retirement and application for
clearance to retrench, dated 28 December 1979, 1 affecting eighty six (86) of its employees.
This was docketed as NLRC Case Ne. A-217-80. Of these eighty-six (86) employees, fifty-
nine (59) were retired effective 1 January 1980 and twenty-eight (27) were to be
retrenched effective 16 January 1980 "in order to prevent losses."

Also, on 3 January 1980, private respondent Federation of Free Workers ("FFW"), as the
certified bargaining agent of the rank-and-file employees of petitioner, filed with the
Bacolod District Office of the MOLE a complaint dated 27 December 1979 for unfair labor
practices and recovery of union dues docketed as NLRC Case No. A-198-80. In said
complainant, FFW claimed that the terminations undertaken by petitioner were violative of
the security of tenure of its members and were intended to "bust" the union and hence
constituted an unfair labor practice. FFW claimed that after the termination of the services
of its members, petitioner advised 110 casuals to report to its personnel office. FFW further
argued that to justify retrenchment, serious business reverses must be "actual, real and
amply supported by sufficient and convincing evidence." FFW prayed for reinstatement of its
members who had been retired or retrenched.

Petitioner denied having hired casuals to replace those it had retired or retrenched. It
explained that the announcement calling for 110 workers to report to its personnel office
was only for the purpose of organizing a pool of extra workers which could be tapped
whenever there were temporary vacancies by reason of leaves of absence of regular
workers.

On 22 January 1980, another report on retirement affecting an additional twenty-five (25)

employees effective 1 February 1980 was filed by petitioner. 2

On 3 March 1980, petitioner filed its Position Paper in NLRC Case No. A-217-80 contending
that certain economic factors jeopardizing its very existence rendered the dismissals
necessary. Petitioner explained:

As a business firm, the Applicant must earn [a] fair return of (sic) its
investment. Its income is generated from the sales of the Central's shares of
sugar and molasses production. It has however no control of the selling price
of both products. It is of common knowledge that for the past years the price
of sugar has been very low. In order to survive, the Applicant has effected
several forms of cost reduction. Now that there is hope in the price of sugar
the applicant is again faced with two major economic problems, i.e., the
stoppage of its railway operation and the spiralling cost of production.

The Applicant was forced to stop its railway operation because the owners of
the land upon which the Applicant's railway lines traverse are no longer
willing to allow the Applicant to make further use of portions of their lands. . .
.

The other economic problem that confronted the Applicant is the rising cost of
labor, materials, supplies, equipment, etc. These two major economic
problems the rising cost of production and the stoppage of its railway
facilities, put together pose a very serious threat against the economic
survival of the Applicant. In view of this, the Applicant was constrained to
touch on the last phase of its cost reduction program which is the reduction of
its workforce.

xxx xxx xxx

The Applicant as a business proposition must be allowed to earn income in

order to survive. This is the essence of private enterprise. Being plagued with
two major economic problems, the applicant is not expected to remain
immobile. It has to react accordingly. As many other business firms have
resorted to reduction of force in view of the present economic crisis obtaining
here and abroad, the applicant was likewise compelled to do the same as a
last alternative remedy for survival. 3

In a decision dated 30 September 1983, 4 the Labor Arbiter denied petitioner's application
for clearance to retrench its employees on the ground that for retrenchment to be valid, the
employer's losses must be serious, actual and real and must be amply supported by
sufficient and convincing evidence. The application to retire was also denied on the ground
that petitioner's prerogative to so retire its employees was granted by the 1975-77
collective bargaining agreement which agreement had long ago expired. Petitioner was,
therefore, ordered to reinstate twenty-seven retired or retrenched employees represented
by private respondent Philippine Labor Union Association ("PLUA") and FFW and to pay them
full backwages from the time of termination until actual reinstatement.

Both dissatisfied with the Labor Arbiter's decision, petitioner and respondent FFW appealed
the case to public respondent NLRC. On appeal, the NLRC, finding no justifiable reason for
disturbing the decision of the Labor Arbiter, affirmed that decision on 2 July 1986. 5

Hence, this Petition for certiorari making the following arguments:

1. That portions of the decision of public respondent NLRC dated July 2, 1986
affirming the decision of Labor Arbiter Ethelwoldo Ovejera dated September
30, 1983 are contrary to law and jurisprudence;

2. That said decision subject of this petition are in some respects not
supported by evidence and self-contradictory;

3. That said decision subject of this petition were rendered with grave abuse
of discretion and in excess of jurisdiction;

4. That the dismissals at bar are valid and based on justifiable

grounds. 6

Petitioner contends that the NLRC acted with grave abuse of discretion in denying its
combined report on retirement and application for clearance to retrench. Petitioner argues
that under the law, it has the right to reduce its workforce if made necessary by economic
factors which would endanger its existence, and that for retrenchment to be valid, it is not
necessary that losses be actually sustained. The existence of valid grounds to anticipate or
expect losses would be sufficient justification to enable the employer to take the necessary
actions to prevent any threat to its survival.

Upon the other hand the Solicitor General argued that the Decision rendered by the Labor
Arbiter and affirmed by the NLRC is supported by substantial evidence on record; that,
therefore, no grave abuse of discretion was committed by public respondent NLRC when it
rendered that Decision.

Article 283 of the Labor Code provides:

Article 283. Closure of establishment and reduction of personnel. The

employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of cricumventing the
provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employer at least one (1) month before the intended
date thereof. In case of termination due to the installation of labor saving
devices or redundancy, the worker affected thereby shall be entitled to a se
pay equivalent to at least his one (1) month pay or to at least one (1) month
 pay for every year of service, whichever is higher. In case of retrenchment to
prevent losses and in cases, of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or at
least one half (1/2) month pay for every year of service, whichever is higher.
A fraction of at least six (6) months shall be considered one (1) whole year.
(Emphasis supplied)

In ts ordinary connotation, he phrase "to revent losses" means hat retrenchment or

termination of the services of some employees is authorized to be undertaken by the
employer sometime before the losses anticipated are actually sustained or realized. It is
not, in other words, the intention of the lawmaker to compel the employer to stay his hand
and keep all his employees until sometime after losses shall have in fact materialized ; 7 if
such an intent were expressly written into the law, that law may well be vulnerable to
constitutional attack as taking property from one man to give to another. This is simple
enough.

At the other end of the spectrum, it seems equally clear that not every asserted possibility
of loss is sufficient legal warrant for reduction of personnel. In the nature of things, the
possibility of incurring losses is constantly present, in greater or lesser degree, in the
carrying on of business operations, since some, indeed many, of the factors which impact
upon the profitability or viability of such operations may be substantially outside the control
of the employer. Thus, the difficult question is determination of when, or under what
circumstances, the employer becomes legally privileged to retrench and reduce the number
of his employees.

We consider it may be useful to sketch the general standards in terms of which the acts of
petitioner employer must be appraised. Firstly, the losses expected should be substantial
and not merely de minimis in extent. If the loss purportedly sought to be forestalled by
retrenchment is clearly shown to be insubstantial and inconsequential in character, the bona
fide nature of the retrenchment would appear to be seriously in question. Secondly, the
substantial loss apprehended must be reasonably imminent, as such imminence can be
perceived objectively and in good faith by the employer. There should, in other words, be a
certain degree of urgency for the retrenchment, which is after all a drastic recourse with
serious consequences for the livelihood of the employees retired or otherwise laid-off.
Because of the consequential nature of retrenchment, it must, thirdly, be reasonably
necessary and likely to effectively prevent the expected losses. The employer should have
taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other
costs than labor costs. An employer who, for instance, lays off substantial numbers of
workers while continuing to dispense fat executive bonuses and perquisites or so-called
"golden parachutes", can scarcely claim to be retrenching in good faith to avoid losses. To
impart operational meaning to the constitutional policy of providing "full protection" to
labor, the employer's prerogative to bring down labor costs by retrenching must be
exercised essentially as a measure of last resort, after less drastic means e.g., reduction
of both management and rank-and-file bonuses and salaries, going on reduced time,
improving manufacturing efficiencies, trimming of marketing and advertising costs, etc.
have been tried and found wanting.

Lastly, but certainly not the least important, alleged if already realized, and the expected
imminent losses sought to be forestalled, must be proved by sufficient and convincing
evidence. The reason for requiring this quantum of proof is readily apparent: any less
exacting standard of proof would render too easy the abuse of this ground for termination of
services of employees. In Garcia v. National Labor Relations Commissions, 8 the Court said:

. . . But it is essentially required that the alleged losses in business operations must be
prove[n] (National Federation of Labor Unions [NAFLU] vs. Ople, 143 SCRA 124
[1986]). Otherwise, said ground for termination would be susceptible to abuse by scheming
employers who might be merely feigning business losses or reverses in their business
ventures in order to ease out employees. (Emphasis supplied) 9

Whether or not an employer would imminently suffer serious or substantial losses for
economic reasons is essentially a question of fact for the Labor Arbiter and the NLRC to
determine. In the instant case, the Labor Arbiter found no sufficient and convincing
evidence to sustain petitioner's essential contention that it was acting in order to prevent
substantial and serious losses. The Labor Arbiter said:

There is no question that an employer may reduce its work force to prevent
losses, however, these losses must be serious, actual and real. In the instant
case, even assuming arguendo that applicant company was, in fact,
surrounded by the major economic problems stated earlier, the question may
be asked will it suffer serious losses as a result of the said economic
problems? We find the answer to be negative. We have scanned the records
but failed to find evidence submitted to show that applicant company would
suffer serious business losses or reverses as a consequence of the alleged
major economic problems. In fact, applicant company asseverated that these
problems only threatens its survival, hence, it had to reduce its work force.
Another thing, while applicant company was retrenching its regular
employees, it also hired the services of casuals. This militated its claim to
reduce its work force to set up cost reduction. It must be stated that settled is
the rule that serious business losses or reverses must be actual, real and
amply supported by sufficient and convincing evidence. 10 (Emphasis
supplied)

We are in principle bound by such findings in accordance with well-established

jurisprudence that the factual findings of labor administrative officials, if supported
by substantial evidence, are entitled not only to great respect but even to
finality, 11 unless, indeed, petitioner is able to show that the Labor Arbiter and the
NLRC simply and arbitrarily disregarded evidence before them or had
misapprehended evidence of such a nature as to compel a contrary conclusion if
properly appreciated.

The submissions made by petitioner in this respect are basically that from the crop year
1975-1976 to the crop year 1980-981, the amount of cane deliveries made to petitioner
Central was declining and that the degree of utilization of the mill's capacity and the sugar
recovery from the cane actually processed, were similarly declining. 12 Petitioner also argued
that the competition among the existing sugar mills for the limited supply of sugar cane was
lively and that such competition resulted in petitioner having to close approximately
thirty-eight (38) of its railroad lines by the end of 1979. 13According to the petitioner, the
cost of producing one (1) picul of sugar during the same period (i.e., from crop year 1976-
1977 to crop year 1979-1980) increased from P69.97 to P93.11.

The principal difficulty with petitioner's case as above presented was that no proof of actual
declining gross and net revenues was submitted. No audited financial statements showing
the financial condition of petitioner corporation during the above mentioned crop years were
submitted. Since financial statements audited by independent external auditors constitute
the normal method of proof of the profit and loss performance of a company, it is not easy
to understand why petitioner should have failed to submit such financial statements.

Moreover, while petitioner made passing reference to cost reduction measures it had
allegedly undertaken, it was, once more, a fairly conspicuous failure to specify the cost-
reduction measures actually undertaken in good faith before resorting to retrenchment.
Upon the other hand, it appears from the record that petitioner, after reducing its work
force, advised 110 casual workers to register with the company personnel officer as extra
workers. Petitioner, as earlier noted, argued that it did not actually hire casual workers but
that it merely organize(d] a pool of "extra workers" from which workers could be drawn
whenever vacancies occurred by reason of regular workers going on leave of absence. Both
the Labor Arbiter and the NLRC did not accord much credit to petitioner's explanation but
petitioner has not shown that the Labor Arbiter and the NLRC were merely being arbitrary
and capricious in their evaluation. We note also that petitioner did not claim that the
retrenched and retired employees were brought into the "pool of extra workers" rather than
new casual workers.

Petitioner next contends that the NLRC committed grave abuse of discretion in affirming the
ruling of the Labor Arbiter that the retirements effected by petitioner were na valid since the
basis therefor, i.e. Article XI Section 2 of the 1975-1977 CBA, had by then already expired
and was thus no longer enforceable or operative. 14 Article XI, 2 of the CBA provides:

2. Section 2. Any employee may apply for after having rendered the of at
least eighteen (18) year of service to the COMPANY. The COMPANY, as a right
, may retire any employee who has rendered twenty (20) years of service, or
has reached the age of sixty (60) years. Employees who are physically
incapacitated to continue to work in the COMPANY upon certification of the
COMPANY Physician, shall be entitled to a separation pay equivalent to the
retirement benefits herein provided for that may have accrued. The heirs or
surviving legally married spouse of the deceased employee shall be granted
by the COMPANY the amount equivalent to the accrued retirement benefit of
the deceased employee at the time of his death." 15 (Emphasis supplied)

Petitioner argues that the CBA was "extended" not merely by implication, but by reciprocal
acts in the sense that even after the CBA had expired, petitioner continued to give, and
the workers continued to receive, the benefits and exercise the prerogatives provided
therein. Under these circumstances, petitioner urges, the employees are estopped from
denying the extended effectivity of the CBA.

The Solicitor General, as well as private respondents, argue basically that petitioner's right
to retire its employees was coterminous with the life of the CBA.

On this point, we must find for petitioner. Although the CBA expired on 31 December 1977,
it continued to have legal effects as between the parties until a new CBA had been
negotiated and entered into. This proposition finds legal support in Article 253 of the Labor
Code, which provides:

Article 253 Duty to bargain collectively when there exists a collective

bargaining agreement. When there is a collective bargaining agreement,
the duty to bargain collectively shall also mean that neither party shall
 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 60-day period
and/or until a new agreement is reached by the parties. (Emphasis supplied)

Accordingly, in the instant case, despite the lapse of the formal effectivity of the CBA by
virtue of its own provisions, the law considered the same as continuing in force and effect
until a new CBA shall have been validly executed. Hence, petitioner acted within legal
bounds when it decided to retire several employees in accordance with the CBA. That the
employees themselves similarly acted in accordance with the CBA is plain from the record.
Even after the expiration of the CBA, petitioner's employees continued to receive the
benefits and enjoy the privileges granted therein. They continued to avail of vacation and
sick leaves as computed in accordance with Articles VII and VIII of the CBA. They also
continued to avail of medical and dental aid under Article IX, death aid and bereavement
leave under Articles X and XIV, insurance coverage under Article XVI and housing allowance
under Article XVIII. Seventeen (17) employees even availed of Section XI (dealing with
retirement) when they voluntarily retired between 1 January 1978 and 31 December 1980
and received retirement pay computed on the basis of Section 3 of the same article. If the
workers chose to avail of the CBA despite its expiration, equity if not the law-dictates that
the employer should likewise be able to invoke the CBA.

The fact that several workers signed quitclaims will not by itself bar them from joining in the
complaint. Quitclaims executed by laborers are commonly frowned upon as contrary to
public policy and ineffective to bar claims for the full measure of the worker's legal rights.
In AFP Mutual Benefit Association, Inc. v. AFP-MBAI-EU, 16 the Court held:

In labor jurisprudence, it is well establish that quitclaims and/or complete

releases executed by the employees do not estop them from pursuing their
claims arising from the unfair labor practice of the employer. The basic reason
for this is that such quitclaimants and/or complete releases are against public
policy and, therefore, null and void. The acceptance of termination pay does
not divest a laborer of the right to prosecute his employer for unfair labor
practice acts. (Cario vs. ACCFA, L-19808, September 29, 1966, 18 SCRA
183; Philippine Sugar Institute vs. CIR, L-13475, September 29, 1960, 109
Phil. 452; Mercury Drug Co. vs. CIR, L-23357, April 30, 1974, 56 SCRA 694,
704)

In the Cario case, supra, the Supreme Court, speaking thru Justice Sanchez,
said:

Acceptance of those benefits would not amount to estoppel.

The reason is plain. Employer and employee, obviously, do not
stand on the same footing The employer drove the employee to
the wall. The latter must have to get hold of money. Because,
out of job, he had to face the harsh necessities of life. He thus
found himself in no position to resist money proffered. His,
then, is a case of adherence, not of choice. One thing sure,
however, is that petitioners did not relent their claim. They
pressed it. They are deemed not to have waived any of their
rights. Renuntiatio non praesumitur (Emphasis supplied)
We conclude that because the attempted retrenchment on the part of the petitioner was
legally ineffective, all retrenched employees should be reinstated and backwages paid them
corresponding to a period of three (3) years without qualification or deduction, in
accordance with the three-year rule laid down in a long line of cases. 17 In the case of
employees who had received payments for which they had executed quitclaims, the amount
of such payments shall be deducted from the backwages due to them. Where reinstatement
is no longer possible because the positions they had previously filled are no longer in
existence, petitioner shall pay backwages plus, in lieu of reinstatement, separation pay in
the amount of one-month's pay for every year of service including the three (3) year-period
of putative service for which backwages will be paid. Upon the other hand, we find valid the
retirement of those employees who were retired by petitioner pursuant to the applicable
provisions of the CBA.

WHEREFORE, the Petition for Certiorari is partially GRANTED due course and the Decision
dated 2 July 1986 of the public respondent NLRC is hereby MODIFIED to the extent that it
had affirmed that portion of the Decision of the Labor Arbiter dated 30 September 1983
ordering the reinstatement judgment of employees who had been retired by petitioner
under the applicable provisions of the CBA. Except as so modified, the Decision of the NLRC
is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.

7. PICOP v anacleto gr 160828, au. 9, 2010

 PICOP RESOURCES, INCORPORATED G.R. No. 160828
(PRI),
Petitioner,

- versus Present:

ANACLETO L. TAECA, GEREMIAS S.

TATO, JAIME N. CAMPOS, CARPIO, J., Chairperson,
MARTINIANO A. MAGAYON, JOSEPH
B. BALGOA, MANUEL G. ABUCAY, NACHURA,
MOISES M. ALBARAN, MARGARITO G.
PERALTA
ALICANTE, JERRY ROMEO T. AVILA,
LORENZO D. CANON, RAUL P. ABAD, and
DUERO, DANILO Y. ILAN, MANUEL M.
MATURAN, JR., LUISITO R. POPERA, MENDOZA, JJ.
CLEMENTINO C. QUIMAN, ROBERTO
Q. SILOT, CHARLITO D.
SINDAY, REMBERT B. SUZONALLAN
J. TRIMIDAL, and NAMAPRI-SPFL,
Promulgated:
Respondents.

August 9, 2010

x----------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the
reversal of the Decision[1] dated July 25, 2003 and Resolution[2] dated October 23, 2003 of
the Court of Appeals in CA-G.R. SP No. 71760, setting aside the Resolutions dated October
8, 2001[3] and April 29, 2002[4] of the National Labor Relations Commission in NLRC CA No.
M-006309-2001 and reinstating the Decision[5] dated March 16, 2001 of the Labor Arbiter.

The facts, as culled from the records, are as follows:

On February 13, 2001, respondents Anacleto Taeca, Loreto Uriarte, Joseph Balgoa, Jaime
Campos, Geremias Tato, Martiniano Magayon, Manuel Abucay and fourteen (14) others
filed a Complaint for unfair labor practice, illegal dismissal and money claims against
petitioner PICOP Resources, Incorporated (PRI), Wilfredo Fuentes (in his capacity as
PRI's Vice President/Resident Manager), Atty. Romero Boniel (in his capacity as PRI's
Manager of Legal/Labor), Southern Philippines Federation of Labor (SPFL), Atty. Wilbur
T. Fuentes (in his capacity as Secretary General of SPFL), Pascasio Trugillo (in his
capacity as Local President of Nagkahiusang Mamumuo sa PICOP Resources, Inc.- SPFL
[NAMAPRI-SPFL]) and Atty. Proculo Fuentes, Jr.[6] (in his capacity as National President
of SPFL).

Respondents were regular rank-and-file employees of PRI and bona

fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of
Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI.

PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period
of five (5) years from May 22, 1995 until May 22, 2000.

The CBA contained the following union security provisions:

Article II- Union Security and Check-Off

Section 6. Maintenance of membership.

6.1 All employees within the appropriate bargaining unit who

are members of the UNION at the time of the signing of this
AGREEMENT shall, as a condition of continued employment by the
COMPANY, maintain their membership in the UNION in good standing
during the effectivity of this AGREEMENT.

6.2 Any employee who may hereinafter be employed to occupy a

position covered by the bargaining unit shall be advised by the COMPANY that
they are required to file an application for membership with the UNION within
thirty (30) days from the date his appointment shall have been made regular.

6.3 The COMPANY, upon the written request of the UNION and
after compliance with the requirements of the New Labor Code, shall
give notice of termination of services of any employee who shall fail
to fulfill the condition provided in Section 6.1 and 6.2 of this
Article, but it assumes no obligation to discharge any employee if it has
reasonable grounds to believe either that membership in the UNION was not
 available to the employee on the same terms and conditions generally
applicable to other members, or that membership was denied or terminated
for reasons other than voluntary resignation or non-payment of regular union
dues. Separation under the Section is understood to be for cause,
consequently, the dismissed employee is not entitled to separation benefits
provided under the New Labor Code and in this AGREEMENT.[7]

On May 16, 2000, Atty. Proculo P. Fuentes (Atty. Fuentes) sent a letter to the
management of PRI demanding the termination of employees who allegedly campaigned
for, supported and signed the Petition for Certification Election of the Federation of Free
Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL considered said
act of campaigning for and signing the petition for certification election of FFW as an act
of disloyalty and a valid basis for termination for a cause in accordance with its
Constitution and By-Laws, and the terms and conditions of the CBA, specifically Article
II, Sections 6.1 and 6.2 on Union Security Clause.

In a letter dated May 23, 2000, Mr. Pascasio Trugillo requested the management
of PRI to investigate those union members who signed the Petition for Certification
Election of FFW during the existence of their CBA. NAMAPRI-SPFL, likewise, furnished
PRI with machine copy of the authorization letters dated March 19, 20 and 21, 2000,
which contained the names and signatures of employees.

Acting on the May 16 and May 23, 2000 letters of the NAMAPRI-SPFL, Atty.
Romero A. Boniel issued a memorandum addressed to the concerned employees to
explain in writing within 72 hours why their employment should not be terminated due
to acts of disloyalty as alleged by their Union.

Within the period from May 26 to June 2, 2000, a number of employees who
were served explanation memorandum submitted their explanation, while some did not.

In a letter dated June 2, 2000, Atty. Boniel endorsed the explanation letters of
the employees to Atty. Fuentes for evaluation and final disposition in accordance with
the CBA.

After evaluation, in a letter dated July 12, 2000, Atty. Fuentes advised the
management of PRI that the Union found the member's explanations to be
unsatisfactory. He reiterated the demand for termination, but only of 46 member-
employees, including respondents.

On October 16, 2000, PRI served notices of termination for causes to the 31 out
of the 46 employees whom NAMAPRIL-SPFL sought to be terminated on the ground of
acts of disloyalty committed against it when respondents allegedly supported and signed
 the Petition for Certification Election of FFW before the freedom period during the
effectivity of the CBA. A Notice dated October 21, 2000 was also served on the
Department of Labor and Employment Office (DOLE), Caraga Region.

Respondents then accused PRI of Unfair Labor Practice punishable under Article
248 (a), (b), (c), (d) and (e) of the Labor Code, while Atty. Fuentes and Wilbur T.
Fuentes and Pascasio Trujillo were accused of violating Article 248 (a) and (b) of the
Labor Code.

Respondents alleged that none of them ever withdrew their membership from NAMAPRI-
SPFL or submitted to PRI any union dues and check-off disauthorizations against
NAMAPRI-SPFL. They claimed that they continue to remain on record as bona
fide members of NAMAPRI-SPFL. They pointed out that a patent manifestation of ones
disloyalty would have been the explicit resignation or withdrawal of membership
from the Union accompanied by an advice to management to discontinue union dues and
check-off deductions. They insisted that mere affixation of signature on such
authorization to file a petition for certification election was not per se an act of
disloyalty. They claimed that while it may be true that they signed the said authorization
before the start of the freedom period, the petition of FFW was only filed with the DOLE
on May 18, 2000, or 58 days after the start of the freedom period.

Respondents maintained that their acts of signing the authorization signifying support to the
filing of a Petition for Certification Election of FFW was merely prompted by their desire
to have a certification election among the rank-and-file employees ofPRI with hopes of a
CBA negotiation in due time; and not to cause the downfall of NAMAPRI-SPFL.

Furthermore, respondents contended that there was lack of procedural due process. Both
the letter dated May 16, 2000 of Atty. Fuentes and the follow-up letter dated May 23,
2000 of Trujillo addressed to PRI did not mention their names. Respondents stressed
that NAMAPRI-SPFL merely requested PRI to investigate union members who supported
the Petition for Certification Election of FFW. Respondents claimed that they should have
been summoned individually, confronted with the accusation and investigated
accordingly and from where the Union may base its findings of disloyalty and, thereafter,
recommend to management the termination for causes

Respondents, likewise, argued that at the time NAMAPRI-SPFL demanded their termination,
it was no longer the bargaining representative of the rank-and-file workers of PRI,
because the CBA had already expired on May 22, 2000. Hence, there could be no
justification in PRIs act of dismissing respondents due to acts of disloyalty.
Respondents asserted that the act of PRI, Wilfredo Fuentes and Atty. Boniel in giving in to
the wishes of the Union in discharging them on the ground of disloyalty to the Union
amounted to interference with, restraint or coercion of respondents exercise of their
right to self-organization. The act indirectly required petitioners to support and maintain
their membership with NAMAPRI-SPFL as a condition for their continued employment.
The acts of NAMAPRI-SPFL, Atty. Fuentes and Trujillo amounted to actual restraint and
coercion of the petitioners in the exercise of their rights to self-organization and
constituted acts of unfair labor practice.

In a Decision[8] dated March 16, 2001, the Labor Arbiter declared the respondents
dismissal to be illegal and ordered PRI to reinstate respondents to their former or
equivalent positions without loss of seniority rights and to jointly and solidarily pay their
backwages. The dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainants dismissal illegal; and

2. Ordering respondents Picop Resources Inc. (PRI) and

NAMAPRI-SPFL to reinstate complainants to their former or equivalent
positions without loss of seniority rights and to jointly and solidarily pay their
backwages in the total amount of P420,339.30 as shown in the said Annex A
plus damages in the amount of P10,000.00 each, or a total of P210,000.00
and attorneys fees equivalent to 10% of the total monetary award.

SO ORDERED.[9]

PRI and NAMAPRI-SPFL appealed to the National Labor Relations Commission (NLRC), which
reversed the decision of the Labor Arbiter; thus, declaring the dismissal of respondents
from employment as legal.

Respondents filed a motion for reconsideration, but it was denied on April 29, 2001 for lack
of merit.

Unsatisfied, respondents filed a petition for certiorari under Rule 65 before the Court of
Appeals and sought the nullification of the Resolution of the NLRC dated October 8, 2001
which reversed the Decision dated March 16. 2001 of Labor Arbiter and the Resolution
dated April 29, 2002, which denied respondents motion for reconsideration.

On July 25, 2003, the Court of Appeals reversed and set aside the assailed Resolutions of
the NLRC and reinstated the Decision dated March 16, 2001 of the Labor Arbiter.

Thus, before this Court, PRI, as petitioner, raised the following issues:
I

WHETHER AN EXISTING COLLECTIVELY (sic) BARGAINING AGREEMENT (CBA)

CAN BE GIVEN ITS FULL FORCE AND EFFECT IN ALL ITS TERMS AND
CONDITION INCLUDING ITS UNION SECURITY CLAUSE, EVEN BEYOND THE 5-
YEAR PERIOD WHEN NO NEW CBA HAS YET BEEN ENTERED INTO.

II

WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION AND/OR

CONCLUSION OF LAW FALL WITHIN THE AMBIT OF THE EXTRAORDINARY
REMEDY OF CERTIORARI UNDER RULE 65, REVISED RULES OF COURT.[10]

We will first delve on the technical issue raised.

PRI perceived a patent error in the mode of appeal elected by respondents for the purpose
of assailing the decision of the NLRC. It claimed that assuming that the NLRC erred in
its judgment on the legal issues, its error, if any, is not tantamount to abuse of
discretion falling within the ambit of Rule 65.

Petitioner is mistaken.

The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition
for Certiorari has been settled as early as in our decision in St. Martin Funeral Home v.
National Labor Relations Commission.[11] This Court held that the proper vehicle for such
review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and
that this action should be filed in the Court of Appeals in strict observance of the
doctrine of the hierarchy of courts.[12] Moreover, it is already settled that under Section
9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act
Expanding the Jurisdiction of the Court of Appeals, amending for the purpose of Section
Nine of Batas Pambansa Blg. 129 as amended, known as the Judiciary Reorganization
Act of 1980), the Court of Appeals pursuant to the exercise of its original jurisdiction
over Petitions for Certiorari is specifically given the power to pass upon the evidence, if
and when necessary, to resolve factual issues. [13]

We now come to the main issue of whether there was just cause to terminate the
employment of respondents.

PRI argued that the dismissal of the respondents was valid and legal. It claimed to have
acted in good faith at the instance of the incumbent union pursuant to the Union
Security Clause of the CBA.

Citing Article 253 of the Labor Code,[14] PRI contends that as parties to the CBA, they are
enjoined to keep the status quo and continue in full force and effect the terms and
 conditions of the existing CBA during the 60-day period and/or until a new agreement is
reached by the parties.

Petitioner's argument is untenable.

Union security" is a generic term, which is applied to and comprehends "closed

shop," union shop," "maintenance of membership," or any other form of agreement
which imposes upon employees the obligation to acquire or retain union membership as
a condition affecting employment. There is union shop when all new regular employees
are required to join the union within a certain period as a condition for their continued
employment. There is maintenance of membership shop when employees, who are
union members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued employment
until they are promoted or transferred out of the bargaining unit, or the agreement is
terminated. A closed shop, on the other hand, may be defined as an enterprise in which,
by agreement between the employer and his employees or their representatives, no
person may be employed in any or certain agreed departments of the enterprise unless
he or she is, becomes, and, for the duration of the agreement, remains a member in
good standing of a union entirely comprised of or of which the employees in interest are
a part.[15]

However, in terminating the employment of an employee by enforcing the union

security clause, the employer needs to determine and prove that: (1) the union security
clause is applicable; (2) the union is requesting for the enforcement of the union
security provision in the CBA; and (3) there is sufficient evidence to support the decision
of the union to expel the employee from the union. These requisites constitute just
cause for terminating an employee based on the union security provision of the CBA. [16]

As to the first requisite, there is no question that the CBA between PRI and
respondents included a union security clause, specifically, a maintenance of membership
as stipulated in Sections 6 of Article II, Union Security and Check-Off. Following the
same provision, PRI, upon written request from the Union, can indeed terminate the
employment of the employee who failed to maintain its good standing as a union
member.

Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions

demanded from PRI, in their letters dated May 16 and 23, 2000, to terminate the
employment of respondents due to their acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no sufficient evidence to
support the decision of PRI to terminate the employment of the respondents.
 PRI alleged that respondents were terminated from employment based on the
alleged acts of disloyalty they committed when they signed an authorization for the
Federation of Free Workers (FFW) to file a Petition for Certification Election among all rank-
and-file employees of PRI. It contends that the acts of respondents are a violation of the
Union Security Clause, as provided in their Collective Bargaining Agreement.
We are unconvinced.

We are in consonance with the Court of Appeals when it held that the mere signing of the
authorization in support of the Petition for Certification Election of FFW on March 19, 20
and 21, or before the freedom period, is not sufficient ground to terminate the
employment of respondents inasmuch as the petition itself was actually filed during the
freedom period. Nothing in the records would show that respondents failed to maintain
their membership in good standing in the Union. Respondents did not resign or withdraw
their membership from the Union to which they belong. Respondents continued to pay
their union dues and never joined the FFW.

Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of
signing an authorization letter to file a petition for certification election as they signed it
outside the freedom period. However, we are constrained to believe that an
authorization letter to file a petition for certification election is different from an actual
Petition for Certification Election. Likewise, as per records, it was clear that the actual
Petition for Certification Election of FFW was filed only on May 18, 2000. [17] Thus, it was
within the ambit of the freedom period which commenced from March 21, 2000 until
May 21, 2000. Strictly speaking, what is prohibited is the filing of a petition for
certification election outside the 60-day freedom period.[18] This is not the situation in
this case. If at all, the signing of the authorization to file a certification election was
merely preparatory to the filing of the petition for certification election, or an exercise of
respondents right to self-organization.

Moreover, PRI anchored their decision to terminate respondents employment on

Article 253 of the Labor Code which states that it shall be the duty of both parties to
keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a new
agreement is reached by the parties. It claimed that they are still bound by the Union
Security Clause of the CBA even after the expiration of the CBA; hence, the need to
terminate the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.

The provision of Article 256 of the Labor Code is particularly enlightening. It reads:
 Article 256. Representation issue in organized establishments. - In
organized establishments, when a verified petition questioning the majority
status of the incumbent bargaining agent is filed before the Department of
Labor and Employment within the sixty-day period before the expiration of a
collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot when the verified petition is supported by the written
consent of at least twenty-five percent (25%) of all the employees in the
bargaining unit to ascertain the will of the employees in the appropriate
bargaining unit. To have a valid election, at least a majority of all eligible
voters in the unit must have cast their votes. The labor union receiving the
majority of the valid votes cast shall be certified as the exclusive bargaining
agent of all the workers in the unit. When an election which provides for three
or more choices results in no choice receiving a majority of the valid votes
cast, a run-off election shall be conducted between the labor unions receiving
the two highest number of votes: Provided,That the total number of votes for
all contending unions is at least fifty per cent (50%) of the number of votes
cast.

At the expiration of the freedom period, the employer shall

continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election is
filed.[19]

Applying the same provision, it can be said that while it is incumbent

for the employer to continue to recognize the majority status of the
incumbent bargaining agent even after the expiration of the freedom period,
they could only do so when no petition for certification election was filed. The
reason is, with a pending petition for certification, any such agreement
entered into by management with a labor organization is fraught with the risk
that such a labor union may not be chosen thereafter as the collective
bargaining representative.[20] The provision for status quo is conditioned on
the fact that no certification election was filed during the freedom period. Any
other view would render nugatory the clear statutory policy to favor
certification election as the means of ascertaining the true expression of the
will of the workers as to which labor organization would represent them. [21]

In the instant case, four (4) petitions were filed as early as May 12, 2000. In fact, a petition
for certification election was already ordered by the Med-Arbiter of DOLE Caraga Region
on August 23, 2000.[22] Therefore, following Article 256, at the expiration of the freedom
period, PRI's obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent
does not hold true when petitions for certification election were filed, as in this case.

Moreover, the last sentence of Article 253 which provides for automatic renewal pertains
only to the economic provisions of the CBA, and does not include representational
aspect of the CBA. An existing CBA cannot constitute a bar to a filing of a petition for
certification election. When there is a representational issue, the status quo provision in
so far as the need to await the creation of a new agreement will not apply. Otherwise, it
 will create an absurd situation where the union members will be forced to maintain
membership by virtue of the union security clause existing under the CBA and,
thereafter, support another union when filing a petition for certification election. If we
apply it, there will always be an issue of disloyalty whenever the employees exercise
their right to self-organization. The holding of a certification election is a statutory policy
that should not be circumvented,[23] or compromised.

Time and again, we have ruled that we adhere to the policy of enhancing the
welfare of the workers. Their freedom to choose who should be their bargaining
representative is of paramount importance. The fact that there already exists a
bargaining representative in the unit concerned is of no moment as long as the petition
for certification election was filed within the freedom period. What is imperative is that
by such a petition for certification election the employees are given the opportunity to
make known of who shall have the right to represent them thereafter. Not only some,
but all of them should have the right to do so. What is equally important is that
everyone be given a democratic space in the bargaining unit concerned.[24]

We will emphasize anew that the power to dismiss is a normal prerogative of the employer.
This, however, is not without limitations. The employer is bound to exercise caution in
terminating the services of his employees especially so when it is made upon the request of
a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be
arbitrary and capricious. Due process must be observed in dismissing an employee, because
it affects not only his position but also his means of livelihood. Employers should, therefore,
respect and protect the rights of their employees, which include the right to labor. [25]
An employee who is illegally dismissed is entitled to the twin reliefs of full backwages
and reinstatement. If reinstatement is not viable, separation pay is awarded to the
employee. In awarding separation pay to an illegally dismissed employee, in lieu of
reinstatement, the amount to be awarded shall be equivalent to one month salary for every
year of service. Under Republic Act No. 6715, employees who are illegally dismissed are
entitled to full backwages, inclusive of allowances and other benefits, or their monetary
equivalent, computed from the time their actual compensation was withheld from them up
to the time of their actual reinstatement. But if reinstatement is no longer possible, the
backwages shall be computed from the time of their illegal termination up to the finality of
the decision. Moreover, respondents, having been compelled to litigate in order to seek
redress for their illegal dismissal, are entitled to the award of attorneys fees equivalent to
10% of the total monetary award.[26]
WHEREFORE, the petition is DENIED. The Decision dated July 25, 2003 and the
Resolution dated October 23, 2003 of the Court of Appeals in CA-G.R. SP No. 71760,
which set aside the Resolutions dated October 8, 2001 and April 29, 2002 of the
National Labor Relations Commission in NLRC CA No. M-006309-2001,
are AFFIRMED accordingly. Respondents are hereby awarded full backwages and
other allowances, without qualifications and diminutions, computed from the time
they were illegally dismissed up to the time they are actually reinstated. Let this case
be remanded to the Labor Arbiter for proper computation of the full backwages due
respondents, in accordance with Article 279 of the Labor Code, as expeditiously as
possible.

SO ORDERED.